Shiv Aum Steels Ltd Management Discussions

For the Financial Year Ended March 31, 2026

One of the primary forces behind industrialisation has been the use of metals. Steel has traditionally occupied a top spot among metals. Steel production and consumption are frequently seen as measures of a countrys economic development because it is both a raw material and an intermediary product. It would not be an exaggeration to argue that the steel sector has always been at the forefront of industrial progress and that it remains the foundation of any modern economy.

India continued to strengthen its position as a global steel powerhouse during FY 2025-26, remaining the worlds second-largest crude steel producer. Indias crude steel production for the fiscal year 2025-26 is estimated at 168.4 million tonnes (MT), a robust increase of 10.7% over the previous year, while total installed steel-making capacity rose to approximately 220 million tonnes per annum (MTPA). Domestic steel consumption during the year reached 164 MT, up 8% year-on-year, propelled by sustained demand from infrastructure, construction, automobile and capital goods sectors. In a notable structural shift, India turned net exporter of finished steel in FY26 — with exports rising 35.9% to 6.6 MT and imports falling by 31.7% year-on-year — reversing the net-import position of the previous two fiscals.

Growth in the Indian steel sector continues to be driven by the domestic availability of raw materials such as iron ore and cost-effective labour, positioning the steel sector as a major contributor to Indias manufacturing output and to nearly 2% of national GDP.

The Indian steel industry remains modern, with state-of-the-art steel mills. It continues to strive for continuous modernisation of older plants, up-gradation to higher energy efficiency levels, and a calibrated transition towards low-carbon and green steel-making technologies.

FY 2025-26 Industry Snapshot

Parameter	FY 2025-26	FY 2024-25	YoY Change
Crude Steel Production	168.4 MT	151.14 MT	+10.7%
Finished Steel Consumption	164.0 MT	150.23 MT	+8.0%
Finished Steel Exports	6.60 MT	4.85 MT	+35.9%
Finished Steel Imports	6.51 MT	9.53 MT	-31.7%
Installed Capacity	220 MTPA	200.33 MTPA	+9.8%
Per Capita Consumption	100 kg	97.7 kg	+2.4%

Source: Ministry of Steel (Monthly Economic Reports, Feb-Mar 2026); Joint Plant Committee; IBEF Steel Industry

Report

INVESTMENT

The steel industry and its associated mining and investments and developments through FY 2025- Indian metallurgical industries had attracted crore (US$ 18.67 billion), reflecting sustained FDI permitted under the automatic route. metallurgy sectors continued to see major 26. Between April 2000 and June 2025, cumulative FDI inflows of Rs. 1,60,000 investor confidence supported by 100%

Key Investments and Developments in FY 2025-26

- PLI Scheme for Specialty Steel — Round 3 (PLI 1.2): Launched by the Ministry of Steel in November 2025, PLI 1.2 covers 85 applications from 55 companies across four specialty product categories, with a committed investment of Rs. 11,887 crore and a planned capacity addition of ~8.29 MT. Incentives range from 4% to 15% on incremental sales over five years commencing FY 2025-26, with disbursements beginning FY 2026-27.

- Cumulative PLI Progress: Under PLI Rounds 1.0 and 1.1, cumulative investment commitments reached Rs. 44,106 crore, of which Rs. 23,022 crore has already been mobilised, generating over 13,000 direct jobs and 2.4 MT of incremental specialty steel production.

- Tata Steel — NINL & Meramandali Expansion: On December 10, 2025, the Tata Steel board approved an in-principle 4.80 MTPA capacity expansion at Neelachal Ispat Nigam Limited (Phase I), alongside a 2.50 MTPA thin slab caster and rolling facility at Meramandali (Odisha) and a 0.70 MTPA downstream galvanising line in Maharashtra.

- JSW Steel — Paradip Greenfield Plant: JSW Steel commenced construction of its integrated steel plant at Paradip, Odisha in May 2026, with a planned phased capacity of 13.2 MTPA — among the most significant greenfield investments undertaken in the sector.

- SAIL — Bhilai Steel Plant Expansion: Steel Authority of India Limited approved expansion of crude steel capacity at its Bhilai Steel Plant from 6.8 MTPA to 10.2 MTPA, reinforcing the public sectors contribution to the National Steel Policys 300 MTPA target.

- India-Japan Steel Dialogue: India and Japan held their third bilateral Steel Dialogue in February 2025 in New Delhi, discussing economic trends, steel trade, green steel efforts and investment opportunities.

- Union Budget 2026-27: The Government allocated Rs. 443.18 crore (US$ 50.1 million) to the Ministry of Steel, alongside a dedicated Rs. 20,000 crore outlay over five years for Carbon Capture, Utilisation and Storage (CCUS) technologies applicable to the steel and allied industries.

- JSW-Gadchiroli and Jharkhand Investments: Momentum continued on previously announced large investments, including JSW Groups Rs. 1,00,000 crore (US$ 11.6 billion) 25 MT greenfield project in Maharashtras Gadchiroli district, and continued execution of steel-linked investment proposals emerging from the Bengal Global Business Summit and other state investment platforms.

MARKET SIZE

Over the past decade, Indias steel sector has expanded significantly. Crude steel output has grown at approximately a 9% CAGR since FY 2021-22, reaching 168.4 MT in FY 2025-26 — a 41% increase over the 120.29 MT produced in FY 2021-22. Finished steel consumption has grown even faster, climbing to 164 MT in FY 2025-26 from 105.75 MT in FY 2021-22, a rise of 55% over five years.

The per-capita consumption of steel touched approximately 100 kg during FY 2025-26 (April-August 2025 base), moving closer to the National Steel Policy 2017s target of 160 kg by FY 2030-31. A key structural highlight of the year was Indias transition to a net exporter of finished steel — with exports exceeding imports by a surplus for the full fiscal year — after being a net importer for the two preceding years (India imported 4.69 MT more than it exported in FY 2024-25).

The top five exported product categories during FY 2025-26 were HR coils/strips, pipes, GP/GC sheets and coils, bars & rods, and CR coils/sheets — with HR coils/strips emerging as the leading export category. Indias steel exports grew by nearly one-third during April-December 2025, supported by government measures aimed at boosting domestic production and competitiveness.

Looking ahead, annual steel production is anticipated to exceed 300 million tonnes by 2030-31, in line with the National Steel Policys target, requiring an estimated additional investment of Rs. 10 lakh crore (US$ 156.08 billion). The Ministry of Steels long-term vision, articulated in 2026, aims for India to reach 500 million tonnes of steel-making capacity by 2047, coinciding with the centenary of Indias independence.

Government policy support remained a cornerstone of sectoral growth through FY 2025-26. Key initiatives during the year include:

- Safeguard Duty Extension: Following the Directorate General of Trade Remedies (DGTR) recommendation of a provisional safeguard duty to protect domestic producers from a surge in imports, the safeguard measure was extended into 2026, materially improving the sectors competitive outlook against underpriced imports, particularly from China and other Asian exporters.

- PLI Scheme for Specialty Steel (Rounds 1.1 and 1.2): The Ministry of Steel expanded the PLI Scheme through PLI 1.1 (launched January 6, 2025, with relaxed investment thresholds) and PLI 1.2 (launched November 2025), collectively targeting incremental specialty steel capacity, import substitution and higher value addition across five to nine key product categories.

- Domestically Manufactured Iron & Steel Products (DMI&SP) Policy: The Government continued to mandate minimum domestic value addition (15%) in notified steel products under preferential procurement, ensuring a guaranteed market for compliant domestic manufacturers in the countrys large public infrastructure pipeline.

- Decarbonisation Roadmap: The Ministry of Steel constituted 14 Task Forces in February 2025 to recommend sector-wide decarbonisation measures. The Union Budget 2026-27 backed this with a Rs. 20,000 crore CCUS outlay over five years, while the Steel Scrap Recycling Policy, 2019 continues to expand domestic scrap availability (currently around 30 MT, of which ~5 MT is imported), lowering specific energy consumption and emissions in steel-making.

- Trade Facilitation Measures: The Government simplified import procedures by removing the No-Objection Certificate requirement for non-QCO grades, undertook calibrated suspension of select Quality Control Order standards, and integrated steel logistics under the PM GatiShakti programme to improve efficiency and reduce investment friction.

- SIMS 2.0: The Steel Import Monitoring System 2.0, launched in July 2024, continues to strengthen data transparency, quality control and integration with government portals to support better import management.

- Long-Term Vision — 500 MT by 2047: The Ministry of Steels May 2026 backgrounder reaffirmed Indias ambition to reach 500 million tonnes of steel-making capacity by 2047, building on the National Steel Policy 2017s interim target of 300 MT by 2030-31.

- Union Budget Allocation: The Government allocated Rs. 443.18 crore (US$ 50.1 million) to the Ministry of Steel under the Union Budget 2026-27, to be deployed across R&D, PLI disbursement readiness and sectoral support programmes.

ROAD AHEAD

The steel industry remains a major focus area given the dependence of a diverse range of sectors on its output, as India works to become a manufacturing powerhouse through policy initiatives such as Make in India. With the industry accounting for about 2% of the nations GDP, India ranks as the worlds second-largest producer of steel and continues to close the gap with China as the worlds second-largest consumer of steel. Both the industry and the nations export manufacturing capacity have the potential to help India sustain a favourable steel trade balance, as demonstrated by the shift to net-exporter status in FY 2025-26.

The National Steel Policy 2017 continues to envisage 300 million tonnes of production capacity by 2030-31, with per-capita steel consumption targeted to rise to 160 kg over the same period. The Government maintains a fixed objective of increasing rural steel consumption from roughly 19.6-21.3 kg per capita to 38 kg per capita by 2030-31 — representing a substantial addressable growth opportunity.

Green steel is emerging as a defining theme for the decade ahead. Indias green steel demand is forecast to rise from negligible levels today to 4.49 MT by FY30, 24 MT by FY35, 73 MT by FY40, and as high as 179 MT by FY50, driven by construction, infrastructure and automotive demand, alongside global buyer preference for lower- carbon steel.

Huge scope for growth continues to be offered by Indias comparatively low per-capita steel consumption relative to global peers, and by the expected rise in consumption due to increased infrastructure construction, urbanisation, and the thriving automobile and railways sectors.

Our Company, Shiv Aum Steels Limited, is engaged in the trading of mild steel products such as beams, angles, plates, channels, coils and thermo-mechanically treated (TMT) bars. Our Company operates as a trader, stockist and distributor of steel products. We are an authorised distributor for selling steel products of Jindal Steel Limited (JSL), have entered into MoUs with Steel Authority of India (SAIL), Rashtriya Ispat Nigam Limited (RINL), and also procure steel products from other manufacturers including Vandana Ispat Limited (VIL) and Mivaan Steels Limited, among others — giving us an exclusive market to trade in high-quality, well-established brands of steel products. We deal in various types of steel products such as I-Beams, H-Beams, C-Channels, Angles, T-Angles, Coils and Plates, all in varied sizes as per customer requirements.

Though our Company was incorporated in 2002, our Promoters have amassed extensive experience in the steel trading business since 1982. We specialise in procuring a large array of steel products from top manufacturers in bulk quantities and selling them to customers who require specific quantities, sizes and dimensions. As the steel sector is characterised by large-scale, bulky production that does not facilitate direct selling in small quantities, our Companys broad-based distribution model — spanning beams, plates, angles, bars and more — helps spread market risk across product categories and brands, while capturing economies of scale.

Our Companys operating model represents an indirect sales model, in which we play the role of supply-chain consolidator between several steel manufacturers and end users. Key deliverables include logistics, inventory management, credit facilitation and delivery at cost-effective prices. This business is working-capital intensive, requiring stocking of various steel products at our dedicated godown.

Product Portfolio

Long Steel Products	Flat Steel Products
- Angles	- Coils
- Beams	- Plates
- Channels
- TMT Bars
- Columns & Rails

OPPORTUNITIES

1. Robust Demand: Indias finished steel consumption reached 164 MT in FY26, up from 150.23 MT in FY25 and 135.90 MT in FY24. The governments continued investment focus on roads, railways, metro connectivity, industrial corridors, dedicated freight corridors, water and gas transportation, transmission infrastructure and affordable housing continues to drive structural demand for steel.

2. Competitive Advantage: Crude steel production in India reached 168.4 MT in FY26. Easy availability of low-

cost manpower and abundant iron ore reserves — India holds the worlds fifth-highest iron ore reserves, with the potential to produce 700 MT annually — keep India cost-competitive in the global marketplace.

3. Policy Support: The extended safeguard duty on steel imports, PLI 1.1 and PLI 1.2 schemes, the Domestically

Manufactured Iron & Steel Products policy, and a dedicated Union Budget 2026-27 allocation to the Ministry of Steel collectively strengthen the domestic operating environment for traders and distributors alike.

4. Increasing Investment: To achieve the 300 MTPA capacity target by 2030-31, India would need to invest an

estimated US$ 156.08 billion. FY26 saw major capacity commitments including JSW Steels Paradip greenfield project, SAILs Bhilai expansion and Tata Steels NINL/Meramandali expansion — signalling continued consolidation and long-term confidence in the sector.

STRUCTURE OF THE STEEL SECTOR

STEEL

Form	Composition	End Use
Liquid Steel Crude Steel (Ingots, Semis) Finished Steel (Flat, Non-flat)	Alloy (Stainless, Silicon Electrical, High-speed) Non-alloy (Low, Medium, High Carbon Steel)	Structural Steel Construction Steel Rail Steel

Indias steel production capacity has expanded rapidly over the past decade, growing from 97 MT in FY13 to approximately 220 MTPA in FY26 moving steadily towards the National Steel Policy 2017s target of 300 MTPA by 2030-31. The Blast Furnace-Basic Oxygen Furnace (BF-BOF) route continues to contribute roughly 65% of total capacity, with the remaining ~35% sourced from Electric Arc Furnace (EAF) and Induction Furnace (IF) routes. Secondary steel plants, including MSMEs, accounted for 47% of crude steel capacity in FY25, underlining the depth and diversity of Indias steel-making base.

Expansion of production capacity to 300 MT will translate into an additional investment of approximately Rs. 10 lakh crore (US$ 156.08 billion) by 2030-31. Major steel producers — including JSW Steel, SAIL and Tata Steel — announced or advanced significant capacity-addition projects during FY 2025-26, reinforcing the sectors investment momentum.

Steel Production in India Has Been Growing at a Fast Pace

Fiscal Year	Crude Steel Production (MT)	Finished Steel Production / Consumption (MT)
FY22	133.60	120.01 (Production)
FY23	125.32	121.29 (Production)
FY24	143.60	135.90 (Consumption)
FY25	151.14	150.23 (Consumption)
FY26	168.40	164.00 (Consumption)

In Q1 FY 2026-27 (April-June 2026), the momentum has carried forward, with crude steel production rising 3% year-on-year to 42.1 MT and finished steel consumption growing over 8%, reflecting sustained demand across key sectors of the economy.

Fiscal Year	Exports (MT)	Imports (MT)	Net Position
FY22	11.14	7.50	Net Exporter
FY23	6.70	6.02	Net Exporter
FY24	7.49	8.32	Net Importer
FY25	4.85	9.53	Net Importer (-4.69 MT)
FY26	6.60	~6.51	Net Exporter (+0.08 MT)

FY 2025-26 marked a significant turnaround in Indias steel trade balance. Exports grew 35.9% year-on-year to 6.6 MT, while imports fell sharply by 31.7%, aided by the extended safeguard duty and improved global competitiveness of Indian mills. As a result, India returned to net-exporter status for the full fiscal year, reversing two consecutive years of net imports. The top five exported product categories were HR coils/strips, pipes, GP/GC sheets and coils, bars & rods, and CR coils/sheets.

Globally, the trade environment remained complex. The United States maintained Section 232 tariffs on steel and aluminium imports at 50% through FY 2025-26, constraining direct Indian steel exports to the US even as bilateral trade discussions progressed. Meanwhile, global steelmaking overcapacity — led by China, whose exports approached 111 million tonnes in 2025 — continued to pressure international steel prices, reinforcing the importance of Indias safeguard duty regime in protecting the domestic market from import surges and dumping.

Growing Demand	Policy Support	Increasing Investment
- Rising infrastructure & construction demand	- Extended safeguard duty on imports	- JSW Paradip, SAIL Bhilai & Tata NINL expansions
- Union Budget 2026-27 infrastructure push	- PLI 1.1 & PLI 1.2 for specialty steel	- FDI of Rs. 1,60,000 crore since April 2000
- Rising demand for consumer durables & capital goods	- 100% FDI under automatic route	- Rs. 10 lakh crore additional capex needed by FY31

THREATS

The steel industry, both globally and domestically, continues to face several significant threats:

1. Fluctuating Raw Material Prices: Prices of key raw materials such as iron ore and coking coal remain volatile, which can materially affect production costs and profit margins.

2. Environmental Regulations: Increasingly stringent regulations on emissions and energy consumption require sustained investment in cleaner technologies, including CCUS and green hydrogen-based routes, which can be costly and challenging to implement.

3. Global Competition and Dumping: The steel market remains highly competitive, with global overcapacity — approximately 543 million tonnes in 2024, led by China — leading to excess supply and downward price pressure. The escalation of US Section 232 tariffs to 50% in 2025 has diverted trade flows and intensified competitive pressure on producers across Asia, including India.

4. Technological Disruptions: Advances in alternative materials (e.g., aluminium, carbon fibre) and new production methods (e.g., electric arc furnaces, hydrogen-based direct reduction) could disrupt traditional steel manufacturing processes over the medium term.

5. Economic Downturns: The steel industry remains closely tied to construction, automotive and infrastructure cycles; slowdowns in these sectors can reduce demand for steel and impact profitability.

6. Trade Policies and Tariffs: Uncertain and rapidly evolving global trade policy — including tariff escalation, safeguard actions and quota regimes — can disrupt supply chains and affect market access for steel producers and traders.

7. Workforce Challenges: The industry continues to face challenges in attracting and retaining skilled labour, alongside the impacts of automation and digitalisation, which may require significant retraining efforts.

The Company is engaged in the business of iron and steel products. Currently, the Company deals in structural steel, coils and plates; accordingly, this continues to be the only single reportable segment.

The Companys financial performance for the year ended March 31, 2026 is summarised below (standalone figures, in Rs. Lakhs):

Particulars	Year Ended 31st March 2026	Year Ended 31st March 2025
Total Revenue	53,724.36	55,465.87
Profit Before Tax	948.48	1,182.82
Less: Current Tax	236.89	313.21
Deferred Tax	(4.56)	(24.42)
Income Tax — Earlier Years	(27.94)	(0.59)
Provision of Income Tax	-	-
Profit For the Year	744.10	894.61
Paid-Up Equity Capital	1,360.04	1,360.04
Reserves & Surplus	10,725.19	10,153.76

The Company reported total revenue of Rs. 53,724.36 lakh (Rs. 537.24 crore) for FY 2025-26, compared to Rs. 55,465.87 lakh (Rs. 554.66 crore) in FY 2024-25 a decline of about 3.1%, reflecting softer steel realisations and a subdued demand environment in parts of the year. Profit before tax stood at Rs. 948.48 lakh, down from Rs. 1,182.81 lakh in the previous year, while profit for the year came in at Rs. 744.10 lakh (Rs. 7.44 crore), compared to Rs. 894.61 lakh (Rs. 8.95 crore) in FY 2024-25 a decline of approximately 16.8%, primarily on account of margin compression amid fluctuating steel prices and elevated finance costs. Reserves & Surplus nonetheless strengthened to Rs. 10,725.19 lakh from Rs. 10,153.76 lakh, while Paid-Up Equity Capital remained unchanged at Rs. 1,360.04 lakh.

The Company continued to deal in structural steel, coils and plates, with no change in the nature of its business during the period April 2025 to March 2026 or thereafter till the date of this report.

OUTLOOK

Shiv Aum Steels Limited remains strategically positioned to capitalise on the promising growth opportunities within Indias steel industry, which delivered record production, a return to net-exporter status, and continued policy tailwinds during FY 2025-26. The Companys strong reputation for delivering exceptional performance, coupled with its customer-focused approach, sets the stage for continued progress.

The expansion of Shiv Aum Steels product portfolio, which spans a wide range of structural steel, plates and coils, underscores the Companys commitment to meeting diverse customer needs. By forging and maintaining partnerships with esteemed manufacturers including JSPL, SAIL, VSP, RINL, Mivaan Ltd. and Vandana Ispat, the Company ensures consistent access to high-quality products from well-established brands.

The Companys primary warehouse in Taloja remains a key asset, featuring advanced logistics infrastructure including cranes and an in-house weighbridge — enabling swift, efficient deliveries that boost customer satisfaction and minimise turnaround times.

Technology and Digital Initiatives: The Company continues to invest in technology-led process improvements, including digital inventory and warehouse management systems, ERP-driven order processing and billing, and data-based procurement and demand-planning tools. These digital initiatives are aimed at improving turnaround times, strengthening inventory accuracy, enhancing customer service through faster order execution, and supporting more informed, data-driven decision-making across the Companys trading operations.

Industry trends indicate sustained demand growth for steel across infrastructure, automotive and affordable housing. Shiv Aum Steel Limited is well-positioned to benefit from these trends, given its capacity to meet rising demand. The Governments continued emphasis on infrastructure development, Smart Cities initiatives, the Vehicle Scrappage Policy, and the extended safeguard duty regime are together expected to further invigorate the domestic steel trading environment, creating favourable conditions for the Companys continued growth.

With a solid foundation, disciplined working-capital management and forward-looking strategies, Shiv Aum Steel Limited is well-prepared to seize emerging opportunities, drive growth and deliver sustained value to its stakeholders in the years ahead.

RISKS AND CONCERNS

Shiv Aum Steel Limited, like any business, is exposed to a variety of risks that could impact its daily operations and long-term objectives. These risks can be both internal, such as operational challenges or management decisions, and external, including market volatility, regulatory changes or economic downturns. Recognising the importance of managing these risks, the Company has implemented a comprehensive risk management policy.

This policy is designed to proactively identify, assess and mitigate risks across all business verticals and key support functions. Dedicated risk workshops are regularly conducted for each segment of the business, where potential risks are systematically identified, analysed and evaluated based on their potential impact and likelihood, allowing the Company to prioritise them accordingly.

The outcomes of these workshops are documented in risk registers, which serve as dynamic tools for monitoring and managing risks, periodically reviewed to ensure they remain relevant and reflect changes in the business environment. This ongoing review process allows Shiv Aum Steel to maintain a risk appetite aligned with its strategic objectives, ensuring risks are accepted, mitigated or managed to an acceptable level, thereby safeguarding operations and supporting sustainable, long-term growth.

Key Risk Categories

- Market Risk: Exposure to fluctuations in steel prices, demand cyclicality and shifts in customer buying patterns can affect realisations and inventory valuation. The Company manages this through disciplined inventory planning and diversified product offerings across long and flat steel categories.

- Competition Risk: Intense competition from both organised and unorganised steel traders and distributors could pressure margins. The Company mitigates this through strong manufacturer partnerships, service quality and a diversified, loyal client base.

- Operational Risk: Risks arising from warehousing, logistics, inventory handling and day-to-day operational execution are managed through the Companys dedicated Taloja warehouse infrastructure, standard operating procedures and continuous process improvements.

- Financial Risk: Includes exposure to interest rate movements, working-capital intensity and credit risk on receivables. The Company addresses this through a balanced debt-equity mix, disciplined receivables management and prudent treasury practices.

- Regulatory and Compliance Risk: Changes in trade policy, safeguard duties, tax regulations and SEBI (LODR) requirements could affect operations and compliance costs. The Company maintains a robust internal control and compliance framework to stay ahead of regulatory change.

- Technology and Cybersecurity Risk: Increasing reliance on digital systems for inventory management, billing and customer engagement exposes the Company to data security and system-continuity risks. The Company continues to invest in secure IT infrastructure and periodic system reviews.

- Supply Chain Risk: Disruptions in the availability of steel products from manufacturing partners, or delays in inbound/outbound logistics, could affect delivery timelines. The Companys multi-vendor sourcing model across JSPL, SAIL, RINL, VSP and other manufacturers helps mitigate single-source dependency.

- Economic and Geopolitical Risk: Global trade tensions, tariff actions (such as evolving US Section 232 measures) and macroeconomic slowdowns can influence steel demand and international price dynamics, indirectly affecting the domestic trading environment in which the Company operates.

STRENGTHS OF THE STEEL INDUSTRY

- Easy Access to Raw Materials: The steel industry benefits greatly from the abundance of key raw materials, primarily iron ore and carbon, which are readily available and extracted domestically, ensuring a steady supply chain crucial for consistent production and growth.

- Affordable Labour: The availability of low-cost labour, particularly across India and other parts of Asia, has been a major driver of the industrys growth, allowing competitive production and contributing to global market dominance.

- Efficient Shipping and Transportation: A well-developed network of supply chains and distribution channels ensures the smooth flow of raw materials to manufacturing facilities and timely delivery of finished steel products, enabling the industry to meet demand effectively — both domestically and, increasingly, for export markets.

Challenges of the Steel Industry

- Rising Input Prices: Fluctuating input prices due to limited availability of key raw materials such as high- grade manganese ore, chromite and coking coal continue to drive up costs and complicate financial planning for producers.

- Raw Material Quality and Costs: Indias steel sector continues to contend with subpar coking coal quality and elevated coal blending costs relative to other producing nations, alongside high labour and transportation costs for iron ore.

- Supply Chain and Logistics: Production remains hampered by logistical issues, including the remote location of many plants, infrastructure gaps, and delays in transportation — with railcar availability and port operations continuing to raise operational costs.

Credit Risk: To manage credit risk, Shiv Aum Steels Limited maintains a comprehensive credit policy that includes credit limit requests and approval procedures. The Company conducts thorough research on clients financial health and project viability before finalising agreements. A rigorous follow-up process ensures payments are collected as per the agreed schedule, supported by an efficient receivables management system that mitigates credit exposure.

Interest Rate Risk: The Company has carefully balanced its debt-equity ratio through a mix of external borrowings and internal cash accruals. Effective working-capital management has helped contain overall interest costs, supporting financial stability and reducing exposure to interest-rate fluctuations.

Competition Risk: The steel trading industry remains characterised by intense competition, from both domestic and multinational players. Shiv Aum Steels Limited addresses this through strong project execution, a diversified portfolio, active marketing, continuous investment in technology and talent, and a robust, stable client base. The Companys commitment to high-quality infrastructure, customer-centric solutions and disciplined pricing and cost management helps it remain resilient and insulated from competitive pressures.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

Shiv Aum Steels Limited maintains a robust internal control system designed to ensure the effectiveness and efficiency of its operations. This system encompasses a comprehensive internal audit function that evaluates the adequacy of control checks across all major areas of the Companys operations, including:

- Accounting and finance

- Procurement

- Business operations

- Statutory compliance

- IT processes

- Asset protection

- Compliance with applicable laws and regulations: The Companys internal control framework places particular emphasis on ensuring compliance with all applicable laws and regulations, including the Companies Act, 2013, SEBI (LODR) Regulations, 2015, labour laws, tax regulations and other statutory requirements, thereby minimising legal and regulatory risk.

The internal audit function operates on a structured internal audit plan, reviewed and approved annually by the Boards Audit Committee, which outlines the scope and frequency of audits and ensures all significant areas are thoroughly examined. The Audit Committee reviews reports submitted by internal auditors, considers suggestions for improvements, and follows up on corrective actions, with disciplinary measures implemented where necessary to address non-compliance.

In addition to internal audits, the Company has implemented effective systems to optimise operational efficiency and resource utilisation, ensuring compliance with the Companies Act, 2013, the Listing Agreement, SEBI (LODR) Regulations, 2015, labour laws and tax regulations. By maintaining stringent compliance and monitoring mechanisms, the Company aims to enhance financial management and investment policies, facilitating smooth information flow and effective monitoring of its operations and resources.

(Disclosure of ratios that changed 25% or more compared to the previous year, in accordance with SEBI (LODR) Regulations, 2015)

Ratio Analysis	31-03-2026	31-03-2025	% Change	Reason for Variance >25%
Current Ratio	2.35*	2.43	-3.3%	-
Debt Equity Ratio	0.78*	0.81	-3.7%	-
Debt Service Coverage Ratio	1.55*	1.77	-12.4%	-
Return on Equity Ratio (%)	6.16%	7.77%	-20.7%	-
Inventory Turnover Ratio	5.30*	5.07	+4.5%	-
Trade Receivables Turnover Ratio	10.30*	10.79	-4.5%	-
Trade Payables Turnover Ratio	440.00*	458.13	-4.0%	-
Net Capital Turnover Ratio	4.20*	4.47	-6.0%	-
Net Profit Ratio (%)	1.39%	1.61%	-14.2%	-
Return on Capital Employed (ROCE)	0.08*	0.16*	-50.0%	Lower operating profit combined with a higher capital base (on account of increased borrowings and reserves) reduced ROCE materially.
Return on Investment	0.65*	0.71	-8.5%	-

Return on Net Worth (RONW) measures the Companys profitability relative to shareholders funds (Paid-Up Equity Capital plus Reserves & Surplus). The movement in RONW for FY 2025-26 as compared to FY 2024-25 is set out below:

Particulars	Year Ended 31st March 2026	Year Ended 31st March 2025
Net Profit (Rs. Lakhs)	744.10	894.61
Net Worth — Paid-Up Capital + Reserves & Surplus (Rs. Lakhs)	12,085.23	11,513.80
Return on Net Worth (%)	6.16%	7.77%

Return on Net Worth declined by approximately 20.7% year-on-year, from 7.77% in FY 2024-25 to 6.16% in FY 2025-26. This decline was primarily driven by lower net profit for the year amid margin compression from softer steel realisations and elevated finance costs, partly offset by continued strengthening of Reserves & Surplus, which expanded the Companys net worth base. As this change remains below the 25% threshold prescribed under the SEBI (LODR) Regulations, 2015, no further explanation is separately mandated; the Company nonetheless continues to closely monitor profitability and capital efficiency as part of its ongoing performance review.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED.

At Shiv Aum Steels Limited, we recognise that our employees are fundamental to our success. Our commitment to attracting and retaining top talent remains central to our business strategy. We seek individuals with specific skills, interests and backgrounds that align with and enhance our Companys goals.

Employee Strength: As on March 31, 2026, the total number of employees of the Company was 32.

The Companys workforce continues to be strategically composed of both experienced professionals and younger talent, providing a balance of stability and potential for growth. The diverse skill sets of our employees, ranging from skilled to semi-skilled and unskilled roles alongside our strong management team, remain instrumental in advancing our growth objectives.

To support ongoing development and operational excellence, we provide comprehensive training programmes for our employees, including behavioural training, technical skills development and on-the-job training. Technical training is often mandated by our vendors for employees handling pre-technical or post-technical issues, with vendor-specific training calendars established and selected employees attending these programmes and receiving feedback upon completion. This structured approach ensures our team remains proficient and up-to-date with the latest industry standards and practices.

In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. This report and other statements - written and oral - that we periodically make contain forward-looking statements that set out anticipated results based on the managements plans and assumptions. We have tried, wherever possible, to identify such statements by using words such as ‘anticipate, ‘estimate, ‘expects, ‘projects, ‘intends, ‘plans, ‘believes and words of similar substance in connection with any discussion of future performance.

We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in our assumptions. The achievements of results are subject to risks, uncertainties, and even inaccurate assumptions. Should known or unknown risks or uncertainties materialize or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated, or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.