Shivagrico Implements Ltd Management Discussions.



a) The steel industry plays a dynamic role in the development of economy. The demand for steel industry is driven mainly from industries like infrastructure, automobile, engineering, construction etc. The per capita of steel is normally accepted measure for socio-economic development of the people of the country. Consequently, the steel sector has been a major contributor to Indias manufacturing output.

b) The world economy grew at 3.6% level during 2018 and is likely to slow down marginally to 3.5% in 2019 in view of the issues that out-broke in second half of CY 2018 with the US policy stimulus are expected to spill over to CY 2019 first half. The Global steel demand grew by 2.1% in CY 2018 mainly driven by China with some advanced economies. According to the World Steel Association global crude steel production increased in all region except in the EU.

c) Based on the growth patterns in the industry over the years, it may be expected that the country, would reach to first rank in the coming years. As per IMF, India is expected to grow at 7.3% in CY 2019 and 7.5% in CY 2020.

W ith the strong mandate, with the stable government, through structural reforms and Government policies on development. Going forward Indias steel producers are likely to rely more on robust domestic, demand with better margins with production of high-end value-added steel.

d) The Indian economy witnessed a strong growth of more than 8% in Q1 FY19, however it slowed down in Q2 and Q3 and FY 19 primarily due to weaker rural sector. Prices and foreign exchange transactions effect are expected to continue to influence the industry performances.

e) The Company has succeeded to increase the customer base by participating in international exhibitions and venturing into new market and direct export to Sri Lanka, Mexico, South Africa, Nepal and Making it presence felt in the local market.

f) The company is certified ISO compliant for all its products.

B) Opportunities

(i) The company sees more opportunities in the year to come due of the continuous development of the new items and up gradation of the quality to cater to the need of the export and domestic market.

ii) The company has developed Hammers with fibre Glass handles to care to the needs of export and local market.

C) Threats

The Indian steel industry still writhes with high cost of power, fuel and transportation, which are expected to be addressed by Government by various measures. Steel is a cyclic industry and excess volatility in the steel and raw material markets may adversely impact the companys financial condition, fluctuation of foreign Exchange rates due to volatility in financial market may also impact the company.

Over capacity and over supply in the global steel industry as well as increased level of imports may adversely affect steel prices impacting profitability .Also the steel industry is phonic to high proportion of fixed costs and volatility in prices of raw material and energy. Limitations and disruption in the supply of raw material could adversely affect the company profitability.

The Board of Directors is being informed periodically in respect of risk assessment and steps being taken by the Company.


Your company has one segments viz.

1. Rolling and Forging Segment.

The Company deals in Rolling & Forging of Agricultural Implements and other products. All the products made by the company essentially emanate from Rolling & Forging Division.

2. Others

Overall production in Rolling Division for the present year was 8994 compared with last year production of 9986 MT. i.e. a decreased of 9.93 %.

Overall Forging production for the present year was 2048 compared with last year production of 2591 MT. i.e. a decreased of about 20.95 %

Both the above production figures include the production against conversion activity also.

The overall Rolling Products sale this year increased to Rs. 1323 Lacs as against previous year sale of Rs.1087 lacs and Forging sale increased to Rs. 726 Lacs as against previous year sale of Rs. 556 Lacs.

However the conversion charges decreased this year to Rs.336 Lacs from previous year of Rs.427 Lacs



The turnover of the Company for the current year was Rs.25,68,87,334 as compared to Rs.22,35,85,582 increased by 14.89% approximately from the last year.

Operation Profit (PBIDT) & margin

Profit/(Loss) before Interest, Depreciation and Tax of the Company for the year is marginally decreased from Rs. 103,97,132/- to Rs.95,63,273/- which is 8.02%

Power & Fuel Cost.

The Power and Fuel cost decreased from Rs. 2,27,51,542/- to Rs. 2,15,59,269/- which is 5.24%.

Employees Cost

The Company has incurred employee cost of Rs. 1,99,39,911/- in the current year as against Rs. 77,87,924/- in the previous year increased 156.10%.


The interest has incurred interest cost of Rs. 75,45,740/- as against Rs. 57,21,235/- in the previous year increased by 31.89%

Profit/(Loss) before Tax

The (Loss) before tax for the current year is Rs. 1,11,12,682/- as compared to the loss for the year 2018 of Rs. 50,31,134/- an increased by 120.88%.

Income Tax

The company has not provided any tax in this year due to loss. However the company has provided Deferred tax in the both the years.


Particulars FY 2017-2018 FY 2018-2019
Debtors Turnover 16.99 9.55
Inventory Turnover 2.93 2.58
Interest Coverage Ratio 0.12 -ve
Current Ratio 0.93 0.93
Debt Equity Ratio 0.11 0.18
Operating Profit Margin (%) 0.31 -ve
Net Profit Margin (%) -ve -ve


The Company has established team working of all employees at various levels at various lavels at factory site. The Company is managed under the guidance of its Executive Director Mr. Hemant Ranawat who in turn is supported by the office staff senior foreman, supervisors and assistants. Each division has its in charge / foreman who are supported by assistants and workshop staff. The supervisor assists foreman and acts as a link between management Systems and further developed cordial relations. Regular meeting with union leader maintains harmony. The company has legal consultants to ensure timely compliance with labour law.


Statement in the management Discussion and analysis describing the Company objectives, projections, estimated and expectation may be ‘Forward looking Statement’ within the meaning applicable to securities laws and regulations.

Actual results could differ materially from those expresses or implied. Important factor that could make a difference to the Company’s operation include economic conditions affecting demand / Supply and priced conditions in the domestic and overseas market, changes in the Government regulation. Tax laws and other statutes and other incidental factors.