Southern Magnesium & Chemicals Ltd Management Discussions

The Company was set up to produce primary Magnesium Metal. However due to the dumping of magnesium metal from China we had to shift our focus on downstream products. Today we largely produce magnesium powders, turnings and also regular magnesium metal ingots.

We are focused on increasing our market share of existing products and building a strong relationship with our customers, thereby laying a robust foundation for sustainable growth.

The year 2024-25 looks promising with its own sets of challenges and opportunities for us. It is hoped that we will maintain revenue and profitability of the company as in the previous year.

However due to a weaker rupee there is an increasing threat of raw material cost increment and steep increase in imports into the country posing a major challenge. The management is taking timely and appropriate preventive measures to minimize the risks.

Further the company hopes to complete all the orders on hand by the fourth quarter of this financial year. For the future, we hope to receive further repeated orders from our customers.

Our company has always tried to obtain orders where the value addition is high, although the volumes are smaller. This is done to maximize returns on our limited resources. This also means that our number of customers is limited and this could pose a possible problem. However considering our long relation with our customers and the niche products that we produce we hope to maintain our success in the future.

The Company has established an appropriate system of internal control to ensure that there exists a proper control over all the transactions and that all its assets are properly safeguarded and not exposed to risk arising out of unauthorized use or disposal. The Internal Audit is conducted at all divisions for all the key areas of business. The Internal Control System is supplemented by a programme of Internal Audit to ensure that the assets are properly accounted for and the business operations are conducted in adherence to laid down policies and procedures. The Internal Audit is oriented towards review of controls and operational improvements.

Highlights of financial and operational Performance are given below:

(INR in Lakhs)

Relations with the employees remained cordial in general throughout the year. In order to optimize the contribution of the employees to the Companys business and operations, in- house training is given to the employees to induce contribution to productivity increase and development programmes for all levels of employees have been devised. Occupational Health Safety and Environmental Management are given utmost importance. Total Number of people employed was 33 during the year under review.

The Companys senior management makes disclosures to the Board relating to all material financial and commercial transactions as and when they occur.

Statement in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be ‘forward-looking statements within the meaning of applicable\ securities laws and regulations and such forward-looking statements involve risks and uncertainties. Actual results could differ materially from those expressed or implied, important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the Countries in which the Company conducts business and other incidental factors. The Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned not to place undue reliance on these forward looking statements that speaks only as of their dates.