Annexure A
SPECIAL NOTE ON CORONAVIRUS PENADAMICSPECIAL NOTE ON CORONAVIRUS
By end of March 2021, the sudden outbreak of Second Wave of Coronavirus (COVID-19)
pandemic has been rapidly spreading throughout the world, including India causing
significant disturbance and slowdown of economic activity. Looking at current situation
the company does not predict any significant effect of Covid-19 on profitability. The
Company is continuously monitoring the situation and taking necessary actions in response
to the developments, to minimize the impact on the business of the Company.
iNTRODUCTION
India was the worlds second-largest steel producer with production standing at 111.2
million tonnes (MT) in 2019. The growth in the Indian steel sector has been driven by
domestic availability of raw materials such as iron ore and cost-effective labour.
Consequently, the steel sector has been a major contributor to Indias manufacturing
output. The Indian steel industry is modern with state-of-the-art steel mills. It has
always strived for continuous modernisation of older plants and up-gradation to higher
energy efficiency levels. Indian steel industry is classified into three categories -
major producers, main producers and secondary producers.
Market size
As of April 2022, India was the worlds second-largest producer of crude steel, with an
output of 10.14 MT. In FY22, the production of crude steel and finished steel stood at
133.596 MT and 120.01 MT, respectively. In FY22, the production of crude steel and
finished steel stood at 133.596 MT and 120.01 MT, respectively. In FY22, crude steel
production in India is estimated to increase by 18%, to reach 120 million tonnes, driven
by rising demand from customers. The consumption of finished steel stood at 105.751 MT in
FY22. In April 2022, Indias finished steel consumption stood at 9.072 MT. Steel companies
are looking to restart expansion projects on the back of burgeoning steel processes with a
capacity addition of 29 MT. Between April 2021-January 2022, consumption of finished steel
stood at 86.3 MT. In FY22, demand for steel is expected to increase by 17% to 110 million
tonnes, driven by rising construction activities. Tata Steel is planning to set up more
scrap-based facilities that will have a capacity of at least a billion tonnes by 2025.
Tata Steel in India is also planning to expand its annual capacity from 34 MTPA to 55 MTPA
by 2030. In FY22, exports and imports of finished steel stood at 13.49 MT and 4.67 MT,
respectively. In FY22, Indias export rose by 25.1% YoY, compared with 2021. Indias per
capita consumption of steel grew at a CAGR of 4.43% from 46 kgs in FY08 to 74.10 kgs in
FY19.
Investments
The iron and steel industry were included in the high priority list for foreign
investment, implying automatic approval for foreign equity participation up to 50%,
subject to the foreign exchange and other stipulations governing such investments in
general.
Steel industry and its associated mining and metallurgy sectors have seen major
investments and developments in the recent past. According to the data released by
Department for Promotion of Industry and Internal Trade (DPIIT), between April 2000 and
March 2021, Indian metallurgical industries attracted FDI inflows of US$ 14.74 billion.
Some of the major investments in the Indian steel industry are as follows:
• In June 2021, Mr. T.V. Narendran, the newly elected CII president and MD of Tata
Steel, in an interview with The Telegraph, stated that steel companies have firmed their
plans to invest ~Rs. 60,000 crore (US$ 8.09 billion) over the next three years this is was
the biggest private sector investment plan announced in recent times
.• In June 2021, Shyam Metalics and Energy Ltd. (SMEL) announced that the company
is planning to double its production capacity at an estimated investment of ~Rs. 2,894
crore (US$ 389.72 million) through brownfield expansion at two of its units in the next
3-4 years.
•In April 2021, in a virtual roundtable conference organised by the Indian Chamber
of Commerce, Mr. Shin Bongkil, the South Korean Ambassador to India, announced that POSCO,
the South Korean steel giant, is planning to set up an integrated steel plant in Odisha at
an investment of US$ 12 billion, which would make it the countrys biggest FDI project
.• In May 2021, JSW Steel signed a Memorandum of Understanding (MOU) to conduct a
feasibility study with its strategic alliance partner JFE Steel Corporation to establish a
Grain-oriented Electrical Steel Sheet Manufacturing and Sales JV Company in India
.• In May 2021, JSW Steel announced the steel-making expansion at its Vijayanagar
plant by 5 MT every year to 17 MT every year by the financial year ending March 2024
.• In March 2021, JSW Steel completed its takeover of debt-ridden Bhushan Power
and Steel Ltd., boosting to the formers overall output to 21.5 mtpa. JSW Steels has 18
mtpa of capacity, which will hit more than 26 mtpa with the addition of BPSL and a
doubling of capacity at JSW Steels Dolvi steel mill to 10 mtpa
.• In March 2021, Arcelor Mittal Steel signed Rs 50,000 crore deal with Odisha
government to setup a steel plant in the state.
• In February 2021, Tata Steel BSL collaborated with FarEye, a software logistics
firm to improve its digital transformation process. In a move towards becoming
self-reliant, Indian steel companies have started boosting steel production capacity. To
this end, SAIL announced doubling of its at 5 of its steel plants capacity in September
2020.
•In March 2020, Arcelor Mittal Nippon Steel India (AM/NS) acquired Bhander Power
plant in Hazira, Gujarat from Edelweiss Asset Reconstruction Company.
• In February 2020, GFG Alliance acquired Adhunik Metaliks and its arm Zion Steel
for Rs. 425 crore (US$ 60.81 million), marking its entry into the Indian steel market
.• For FY20, JSW Steel set a target of supplying around 1.5 lakh tonnes of TMT
Rebars to metro rail projects across the country.
• In December 2019, Arcelor Mittal completed the acquisition of Essar Steel at Rs.
42,000 crore (US$ 6.01 billion) and formed a joint venture with Nippon Steel Corporation
.• JSW Steel has planned a US$ 4.14 billion capital expenditure programme to
increase its overall steel output capacity from 18 million tonnes to 23 million tonnes by
2020.
• Ministry of Steel plans to invest US$ 70 million in the eastern region of the
country through accelerated development of the sector.
•The production capacity of SAIL is expected to increase from 13 MTPA to 50 MTPA
in 2025 with total investment of US$ 24.88 billion
.• Tata Steel has decided to increase the capacity of its Kalinganagar integrated
steel plant from 3 million tonnes to 8 million tonnes at an investment of US$ 3.64
billion.
Government Initiatives:
Some of the other recent Government initiatives in this sector are as follows:
• In June 2021, Minister of Steel & Petroleum & Natural Gas Mr. Dharmendra
Pradhan addressed the webinar on ‘Making Eastern India a manufacturing hub with
respect to metallurgical industries, organised by the Indian Institute of Metals. In
2020, ‘Mission Purvodaya was launched to accelerate development of the eastern
states of India (Odisha, Jharkhand, Chhattisgarh, West Bengal and the northern part of
Andhra Pradesh) through establishment of an integrated steel hub in Kolkata, West Bengal.
Eastern India has the potential to add >75% of the countrys incremental steel
capacity. It is expected that of the 300 MT capacity by 2030-31, >200 MT can come from
this region alone.
• In June 2021, JSW Steel, CSIR-National Chemical Lab (NCL), Scottish Development
International (SDI) and India H2 Alliance (IH2A) joined forces to commercialise hydrogen
in steel and cement sectors.
• Under the Union Budget 2020-21, the government allocated Rs. 39.25 crore (US$
5.4 million) to the Ministry of Steel. The budgets focus is on creating infrastructure
and manufacturing to propel the economy. In addition, enhanced outlays for key sectors
such as defence services, railways, and roads, transport and highways would provide
impetus to steel consumption.
• In January 2021, the Ministry of Steel, Government of India, signed a Memorandum
of Cooperation (MoC) with the Ministry of Economy, Trade and Industry, Government of
Japan, to boost the steel sector through joint activities under the framework of India
Japan Steel Dialogue.
• In December 2020, the Minister for Petroleum & Natural Gas and Steel, Mr.
Dharmendra Pradhan, has appealed to the scientific community to Innovate for India (I4I)
and create competitive advantages to make India ‘Aatmanirbhar
•. In September 2020, the Ministry of Steel prepared a draft framework policy for
development of steel clusters in the country.
•. On October 1, 2020, Directorate General of Foreign Trade (DGFT) announced that
steel manufacturers in the country can avail duty drawback benefits on steel supplied
through their service centres, distributors, dealers and stock yards.
•. Government introduced Steel Scrap Recycling Policy to reduce import.
•. An export duty of 30% has been levied on iron ore^ (lumps and fines) to ensure
supply to domestic steel industry
•.. Government of Indias focus on infrastructure and restarting road projects is
aiding the demand for steel. Also, further likely acceleration in rural economy and
infrastructure is expected to lead to growth in demand for steel
. •. The Union Cabinet, Government of India approved the National Steel Policy
(NSP) 2017, as it intend to create a globally competitive steel industry in India. NSP
2017 envisage 300 million tonnes (MT) steel-making capacity and 160 kgs per capita steel
consumption by 2030-31.
•. The Ministry of Steel is facilitating setting up of an industry driven Steel
Research and Technology Mission of India (SRTMI) in association with the public and
private sector steel companies to spearhead research and development activities in the
iron and steel industry at an initial corpus of Rs. 200 crore (US$ 30 million).
•. The Government of India raised import duty on most steel items twice, each time
by 2.5% and imposed measures including anti-dumping and safeguard duties on iron and steel
items.
Road Ahead:
The National Steel Policy, 2017 envisage 300 million tonnes of production capacity by
2030-31. The per capita consumption of steel has increased from 57.6 kgs to 74.1 kgs
during the last five years. The government has a fixed objective of increasing rural
consumption of steel from the current 19.6 kg/per capita to 38 kg/per capita by 2030-31.
As per Indian Steel Association (ISA), steel demand will grow by 10% in 2022. Huge scope
for growth is offered by Indias comparatively low per capita steel consumption and the
expected rise in consumption due to increased infrastructure construction and the thriving
automobile and railways sectors. *Source: https://www.ibef.org/industry/steel.aspx
Discussion on Financial Performance with respect to operation performance:
The Companys financial performance for the year ended 31st March, 2021 is summarized
below: (Amt in Rs. Lacs)
Particulars |
2022-23 |
2021-22 |
Revenue from Operations |
30266.54 |
30259.65 |
Other Income |
242.99 |
291.68 |
Total Income from Operations (Net) |
30509.53 |
30551.34 |
Profit/(Loss) before Tax and Extra Ordinary Items |
480.68 |
383.52 |
Less: Extra Ordinary Items |
- |
- |
Less: Current Tax |
121.26 |
116.70 |
Deferred Tax |
19.31 |
19.02 |
Prior Period Tax |
- |
- |
Profit/(Loss) After Tax |
340.11 |
242.79 |
Balance Carried to Balance Sheet |
340.11 |
242.79 |
Paid up Capital |
82902520 |
82902520 |
Earnings Per Share |
4.10 |
2.99 |
Reserves and Surplus |
4416.07 |
4075.96 |
For Riddhi Steel and Tube Limited |
|
RajeshKumar Mittal |
Preeti R. Mittal |
SD/- |
SD/- |
Managing Director |
Director & CFO |
DIN : 00878934 |
DIN : 01594555 |
Date: September 05, 2023 |
Date: September 05, 2023 |
Place: Ahmedabad |
Place: Ahmedabad |
+91-9892691696
