Real Growth Corporation Ltd Management Discussions

Economy OverView

The strong global economic performance benefited from better-than-expected growth in the United States (US). In the US, consumer spending drove GDP growth supported by accumulated household savings, tight job- markets, and expansionary fiscal policy. On the other hand, the euro area, witnessed a tardy growth reflecting weak consumer sentiment, the lingering effects of high energy prices, and weakness in interest-rate-sensitive manufacturing and business investment. In China, growth accelerated to 5.2% in 2023 after hitting the second lowest growth in 40 years of 3.0% in 2022 but remained below expectations and much below its historical (pre- pandemic rates) rates amid a protracted property crisis, sluggish consumer, and business confidence. In contrast, the Indian economy achieved robust growth and surpassed expectation of 6-7% growth by accelerating to 7.8% in 2023-24 from 7.0% in 2022-23. The surge in growth in India was driven by a surge in investment supported by the governments capital expenditure boost and resurgence in manufacturing sector growth despite slowdown in Indian Agriculture due to below normal and uneven monsoons.

India too was able to control inflation despite challenges on the food inflation front. In 2024, global economy is expected to maintain the economic momentum and grow at broadly the same rates as 2023 and inflation is also expected to continue declining, although downside risks in the form of furthering of geopolitical tensions remain. Interest rates are expected to decline during the year although the pace and quantum would remain contingent on the evolving inflation situation. Indian economy in 2024-25 is expected to remain the fastest growing large economy with GDP growth projected to be 6.8%. The economy would benefit from fiscal rebalancing, increased digitalization, strong domestic demand, and a good monsoon.

Indian Economy OverView

a) Indias real GDP grew by 8.2% in FY 2023-24, exceeding the 8% mark in three out of four quarters of FY 2023-24. FY 2024-25 GDP growth is seen at 6.5% to 7% with the risks to FY 2024-25 GDP growth evenly balanced.

b) Gross Fixed Capital Formation increased by 9% in real terms in FY 2023-24. This is due to the Governments investment in Capital Expenditure and a steady pace of Private Investment.

c) Retail inflation declined to 5.4% in FY 2023-24. This is because the Inflationary pressures caused by global

issues, supply chain disruptions and monsoons have been cleverly contained through administrative and monetary policy initiatives.

d) India is resilient amid geopolitical challenges, with the Indian economy having a stable footing.

e) Subdued global demand for goods has pressured the external balance, but strong services exports largely counterbalanced this. As a result, CAD stood at 0.7 % of the GDP during FY 2023-24, an improvement from the deficit of 2.0% of GDP in FY 2022-23.

Indian Steel Industry

a) In the past 10-12 years, Indias steel sector has expanded significantly. Production has increased by 75% since 2008, while domestic steel demand has increased by almost 80%. The capacity for producing steel has grown concurrently, and the rise has been largely organic.

b) In FY23, the production of crude steel and finished steel stood at 125.32 MT and 121.29 MT, respectively.

c) In FY24, the production of crude steel and finished steel stood at 143.6 MT and 138.5 MT, respectively.

d) In FY23, crude and finished steel production stood at 125.32 MT and 121.29 MT, respectively. In July 2023, crude steel production in India stood at 11.52 MT.

e) In FY24, the consumption of finished steel stood at 135.90 MT. The per-capita consumption of steel stood at 86.7 kgs in FY23.

f) In FY22, the production of crude steel and finished steel stood at 133.596 MT and 120.01 MT, respectively. In FY23, the consumption of finished steel stood at 119.17 MT.

g) In FY23, exports and imports of finished steel stood at 6.7 MT and 6.02 MT, respectively. In FY22, India exported 11.14 MT of finished steel. In April 2024 exports of finished steel stood at 5.1 lakh metric tonnes (LMT), while imports stood at 5.9 LMT.In FY24, the exports and imports of finished steel stood at 7.49 MT and 8.32 MT, respectively.

The annual production of steel is anticipated to exceed 300 million tonnes by 2030-31. By 2030-31, crude steel production is projected to reach 255 million tonnes at 85% capacity utilisation achieving 230 million tonnes of finished steel production, assuming a 10% yield loss or a 90% conversion ratio for the conversion of raw steel to finished steel. With net exports of 24 million tonnes, consumption is expected to reach 206 million tonnes by the years 2030-2031. As a result, it is anticipated that per-person steel consumption will grow to 160 kg.

Internal Control Systems

RGCL has established a robust internal control system that protects all of its assets and assures operational excellence. The internal control system also assures regulatory compliance and precisely documents all information regarding the Companys transactions. The internal control system is totally relevant to the businesss type, size, scope, and complexity of operations. The Company has effective internal financial control mechanisms in place to make sure that transactions are properly authorised, documented, and reported. Regular internal audits and checks make sure that operations are carried out successfully. The audit committee is in charge of establishing and maintaining suitable internal financial controls to guarantee the smooth and effective operation of its affairs. Periodically, the Audit Committee reviews significant issues and material weaknesses brought up by the Internal and Statutory Auditors. It is ensured that prompt and sufficient measures are made to limit the risk and make the necessary corrections

Human Resources

RGCL considers its people to be the foundation of the Companys success. The Company takes great pride in recognizing the success of its human resource, which has always responded with unwavering dedication to accomplish business growth and market leadership.

The executive leadership serves as the governing force in promoting a progressive workplace culture.

The Company believes in reinforcing the core thrust areas, namely becoming the employer of choice, fostering an inclusive culture, developing a strong talent pipeline.

Statement

This Statement contains forward-looking statements about the business, financial performance, skills and of the Company. Statements about the plans, intentions, expectations, beliefs, estimates, predictions or similar expressions for future are forward-looking statements. Forward-looking statements should be viewed in the context of many risk issues and event that could cause actual performance to be different from that contemplated in the Directors Report and Management Discussions and Analysis

Report, including but not limited to, the impact of changes in oil, steel pnces worldwide, technological obsolescence and domestic economic and political conditions. Actual result

By Order of the Board
for REAL GROWTH CORPORATION LIMITED
Sd/-	Sd/-
Himanshu Garg	Deepak Gupta
Director	Whole Time Director
DIN: 08055616	DIN - 01890274
Flat No. 150 Tower-Magnolia, Gaur Saundaryam,	Add:-D-9 Rana Pratap Road
Techzone-04 Greater Noida West, Bishrakh, Surjpur,	Near Mosque Adarsh Nagar
Dist: Gautam Buddha Nagar, Uttar Pradesh-201306	Delhi
Date: 30.08.2024
Place: New Delhi