Sagardeep Alloys Ltd Management Discussions.

INDUSTRY STRUCTURE & DEVELOPMENT

The size of Indian copper indu ndustry (consumption of refined copper per annu is around half a million tones which constitute only 3 percent of the world copper market. Sterlite Industries, Hindalco Industries and Hindus dustan Copper are major producers of refined copper in India. India has emerged as net exporter of copper from the status of net importer on account of rise in production. In fact, copper as a metal came in use of man much earlier than iron. Copper has been used for making utensils and coins since long. Being a good conductor of electricity and ductile, it is extensively used in a vast variety of electrical machinery, wires and cables. It is also an important metal used by autom tomobile and defense industries. Further, it is alloyed with iron and nickel to make stainless steel, with nickel to make ‘morel metal’ and with aluminium to make ‘duralumin’. When alloyed with zinc it is known as ‘brass’ and with tin ‘bronze’. Copper ore is found in ancient as well as in younger rock formations and occurs as veins, as dissemination and as bedded deposits. Mining for copper is a costly and a tedious affair because most of the copper ores contain a small percentage of the metal. Against the international averag of metal content (in the ore) of 2.5 per cent, Indian ore grade averages less than one per cent.

OPPORTUNITIES AND THREATS

Our success as an organization depends on our ability to identify opportunities and leverage them while mitigating the risks that arise while conducting our business. During the financial year 2017-18, major decision of indu ing into different business activities was tak in order to widen the operation of the Company. Looking into the opportunities into new business line, your directors are optimistic about future expansion and growth of our Company. Despite of identifying opportunities, there is always risk associated to it like Competition General Economic and Business Conditions, legal and regulatory compliance etc.

OUTLOOK, RISKS & CONCERNS

Our Outlook, risks and concern are as follows:

• A large part of our revenue depends on our top clients and loss of any one of major client may lead to negative impact on our business.

• Our success depends on our top management and key personnel and our ability to attract and retain them.

• Changes in policies of government of India or political instability may adversely affect economic conditions in India, which may lead to negative impact on our business.

• Any natural calamities such as earthquakes, storms, fire etc. may tend to affect our operational efficiency negatively.

INTERNAL CONTROL SYSTEM AND ADEQUACY

The Company has an adequate internal control system commensurate with its size and the nature of its business in order to achieve efficiency in operation and optimum utilization of resources. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information.

FINANCIAL AND OPERATIONAL PERFORMANCE

(Amount In lacs)

Particulars for the year ended March 31, 2018 March 31, 2017
Net revenue from Operations (Sales) 6240.59 7252.79
Profit Before Depreciation and Tax 117.73 84.39
Less: Depreciation 39.56 39.50
Profit Before Tax 78.17 44.89
Less: Tax Expense 23.34 17.73
Profit After Tax 54.53 27.16
EPS (Basic) 0.48 0.25
EPS (Diluted) 0.48 0.25

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The industrial relations remained cordial throughout the year. The employe of the Company have extended a very productive cooperation in the efforts of the manage agement to carry the Company to greater heights. Continuous training down the line is a normal feature in the Company to upgrade the skills and knowledge of the employees and workmen of the Company.

CAUTIONARY STATEMENT

Statement in this report describing the Company’s objectives, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the company’s operations include economic conditions affecting demand / supply and price condition in the domestic markets in which the company opera erates, changes in the government regulations, tax law and other statutes and other incidental factor .

For and on behalf of the Board of Directors
Date: 28/05/2018 Satishkumar Mehta
Place: Ahmedabad Chairman & Managing Director
(DIN: 01958984)