National Steel & Agro Industries Ltd Management Discussions.


The objective of this report is to convey the Managements perspective on the external environment and steel industry, as well as strategy, operating and financial performance, material developments in human resources and industrial relations, risks and opportunities and internal control systems and their adequacy in the Company during the financial year 2020-21. This report should be read in conjunction with the Companys financial statements, the schedules, notes thereto and other information included elsewhere in the Annual Report.

II) Industry Structure and Developments

(Source: World Steel Association: 2021 world steel in figures)

? World Steel Scenario

Global steel sector has over the years saw a significant growth pattern, together with several challenges and shortcomings which are on the verge of becoming the strength of the industry in the near future.

> The world crude steel production has increased to around 1877.5 Million Tonnes (MT) in the year 2020 as per the data provided by World Steel Association, China being the top-most steel producing nation.

> The world apparent steel use per capita has decreased to around 227.5 kilograms for the CY 2020 as compared to 230.3 kilograms in the CY 2019.

Disruption on both demand and supply resulted in global steel demand in 2020 to fall by 0.2% against a growth of 3.7% in 2019. The total demand in 2020 was 1,772 MT against 1,775 MT in 2019.

? Indian Steel Scenario

Indias steel industry has also suffered the production loss due to lockdown in the first half of CY 2020 and recovered gradually by recovery in domestic demand.

> As per the World Steel Association India gained second position among the major steel producing countries with a crude steel production of 100.3 MT in the CY 2020 and based on the growth patterns in the industry over the years, it is expected to become the first largest producer of crude steel soon.

> The apparent steel use per capita has decreased to 64.52 kilograms for the CY 2020 as compared to 75.1 kilograms per the data provided by World Steel Association.

> The steel sector contributes to over 2% of the Countrys GDP.

III) Opportunities and Threats

? Opportunities

(Source: Ministry of Steel: Make in India)

> India is expected to become the largest producer of steel in the world.

> Indias per capita consumption of steel fell to 64.52 kilograms, for the CY 2020 as compared to the 75.1 kilograms in the corresponding previous year. National Steel Policy 2017 aims to increase the per capita steel consumption to 160 kilograms by 2030-31.

> In line with Governments announcement of various schemes like Housing for all, Jal Shakti and the resulting investments they will drive into roads, railways and other infrastructure will be major drivers for the growth of the steel sector in India.

> Governments focus on strengthening the domestic manufacturing base under the flagship "Atmanirbhar Bharat" programme. The Production Linked Incentive scheme has been introduced to boost the manufacturing sector in industries like automobile & auto components, consumer durables, solar equipment, telecom, etc. These are expected to boost steel consumption.

> Government has announced an investment of over Rs. 1 trillion in infrastructure over the next 5 years. This would be a key growth driver not only for steel industry but will also be a multiplier of growth across the sectors, boosting steel demand from sectors such as transportation, real estate and infrastructure.

? Threats

> Demand-Supply imbalance.

> Political, legal and regulatory risks.

> Financial Risks.

> Depletion of high quality raw materials required for production of steel.

> Environmental concerns.

> Dumping of excess inventory in other countries by countries producing steel in abundance.

IV) Outlook - Steel Sector

(Source: World steel SRO April 2021)

Despite the disastrous impact of the pandemic, the global steel industry was fortunate enough to end 2020 with only a minor contraction in steel demand. The World Steel Association (WSA) forecasts that steel demand will grow by 5.8% in 2021 to reach 1,874 MT. It also expects that, in 2022, the steel demand will see further growth of 2.7% to reach 1,924.6 MT.

The World Steel Association (WSA) also expects a shift in steel demand shape due to structural changes in a post-pandemic world. The steel industry will see exciting opportunities from rapid developments through digitisation and automation, infrastructure initiatives, re-organisation of urban centres, a nd energy transformation.

The current forecast is on the assumptions that the ongoing second or third waves of infections will stabilise in the second quarter and that steady progress on vaccinations will be made, allowing a gradual return to normality in major steel-using countries.

V) Risks and Concerns

The business environment in which the Company operates faces a variety of risks which may affect its operations, financial results. Many of risks are driven by the factors which are beyond the control of the Company.

Broadly, the risks are classified as under:

> Macroeconomic Risk;

> Operational Risk;

> Market Related Risk;

> Regulatory Risk; and

> Environmental Risks

Hence, adequate risk management system has been put in place by the management to ensure the success of the Company.


The Company operates only in one segment i.e. Manufacturing Segment.

The product wise performance in detail is given in Note No. 20 to the audited accounts of the Company.


The Company has an Internal Financial Controls (IFC) framework, commensurate with the size, scale, and complexity of the Companys operations. The Board of Directors of the Company is responsible for ensuring that IFC have been laid down by the Company and that such controls are adequate and operating effectively. The internal control framework has been designed to provide assurance with respect to recording and providing reliable financial and operational information, complying with applicable laws, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance with corporate policies.

The Company maintains an adequate and fair system of internal control based on well established policies and procedures designed for transparent operations. The management is regular in reviewing, on periodic basis, issues and concerns that have or could have an effect on the operations, functioning or performance of the Company.


Human resource is considered as one of the key assets of an organisation as human resource is unique to a particular organisation and plays an active role in its growth.

The Company provides adequate opportunity for training and learning to the employees. The Company takes responsibility for effective management of careers of individuals to make them expert in their respective fields.

The team is strongly motivated to work on their abilities and deliver better results. Further, in order to retain the experienced employees, the Company has absorbed the employees of its labor contractors which have been providing services to the Company since many years. The absorption doesnt lead to have any additional financial burden on the Company. Accordingly, the total number of permanent employees on roll as on 31st March, 2021 was 714.



During the year under review, the revenue from operations is 1,57,848 Lakhs [Previous Year 1,30,933 ]. The Earning Before Interest, Tax, Depreciation and Amortisation (EBITDA) is (644) Lakhs [Previous year (621) Lakhs]. The Loss Before Tax has been (25,272) Lakhs [Previous Year (23,727) Lakhs] and Loss After tax is (22,740) Lakhs [Previous Year (29,083) Lakhs].


The disastrous outbreak of Covid-19 pandemic resulted in lockdown/travel restrictions on the movement of people to contain the spread of the virus. However, the plant facilities (Steel Sector) were exempt from the lockdown measures, subject to adherence of hygiene standards and social distancing norms.

During the year under review, the Company has utilized 86% (approx) of its production capacity of its Colled Rolling Mill, Galvanized Plant and Color Coating Line in the following manner:

> The Cold Rolling Mill of the Company has given a production of 256,772 MT, which is 86% (approx) to the capacity utilization.

> The Galvanized Plant has given a production of 263,721 MT, which is 80% (approx) to the capacity utilization.

> The Colour Coating Line has given a production of 154,756 MT, which is 91% (approx) to the capacity utilization.


Health, safety, security and environment have always been an integral part of our value system. Our operations are driven by the value system so established and hence are in compliance with the norms of health, safety, security and environment.

Considering the present circumstances due to the outbreak of COVID-19 pandemic, the Company is taking all the requisite precautions for its staff and workforce like sanitisation, social distancing, mandatory mask wearing and thermal screening at the entrance of premises, maintaining proper hygiene.

The Company has been regularly putting efforts for conservation of energy and resources.


The change in the key financial ratios as compared to previous year is stated below:

Sr.No. Particulars 2021 2020 % Change Explanations, if any
1. Debtors Turnover 57.53 12.09 375.85 The Company w.e.f. 4th Quarter of FY 2020-21 is utilising most of its capacity on Job work. Accordingly, the debtors has been reduced.
2. Inventory Turnover 36.94 37.51 (1.52) -
3. Interest Coverage Ratio (0.03) (0.03) 0. 00 -
4. Current Ratio 0.08 0.12 (33.33) Decreased due to reduction in debtors and increase in current liabilities on account of making interest provision on borrowings.
5. Debt Equity Ratio (1.20) (1.31) (8.40) -
6. Operating Profit Margin (0.41) (0.47) (12.77) -
7. Net Profit Margin (%) (14.66) (21.97) 33.27 Improved as operational expenses has been reduced.


This Management Discussion and Analysis Report, giving a brief profile of the Company along with its vision, mission, objectives, performance and future prospects and also reflecting the scenario of the industry at domestic and global level, may consist of "forward looking statements" which involve a number of risks and uncertainties that could cause actual results to differ materially from those stated. Important factors that could make a difference to the Companys operations include external economic conditions affecting demand/supply or influencing price conditions in the market in which the Company operates, changes in regulatory regime and other incidental factors.