supershakti met Management discussions

Steel Industry Scenario Opportunities

Global steel experts led by the world steel association have predicted that India is going to be the epicenter of growth of the global steel growth. Indias finished steel production has increased by over 6%, whereas globally steel production declined by 4.2% in calendar year 2022. Steel Ministry is in the process of aligning policies with the Gati Shakti Master Plan, which will complement the hundred lakh crore investments for infrastructure development. Increased indigenous defence procurement and a growing manufacturing sector in the country is expected to contribute to steel demand. The demand for steel in India continues to be robust as compared to other countries. Indias Steel consumption has grown over 11% to 119 million tonnes in FY 2023 from 105 million tonnes in FY 2022. Central Government has implemented the Steel Scrapping policy and Vehicle Scrappage Policy for enhancing the supply of steel scrap to the industry. The scrappage policy will also accelerate and facilitate the production of green steel.

Threats

Global Scenario involving Russia -Ukraine war, With rising tensions in south China Sea , slowdown in US Economy and European markets may impact demand and results in supply chain disruptions.

Segment-Wise Performance

Our Companies main products are Billets, Wire Rods and HB Wire. Billets are mainly used as intermediary products and our products basically caters to the B2B segment and has good market for its products.

Outlook

With opening up of Mining Sector availability of raw materials for Steel manufacturing will improve similarly with infrastructure thrust of the present government along with political stability the outlook of the Industry as a whole seems to be positive, and your Company is well placed to tap this opportunity going forward. Your Company has already made a strategic investment in a Greenfield Project which has already started its production , your company may increase its stake going further, similarly your company is exploring possibilities of expansion by way of capacity addition of value-added products either at same location or nearby areas.

Risk and concerns

The Key risks are global steel demand scenario, domestic steel demand, economic slowdown, increase in financial charges, non-availability (or undue increase in cost) of raw materials, such as iron ore, coal and labour etc., coupled with market fluctuations. The Company does not apprehend any inherent risk in the long run, with the exception of certain primary concerns that have afflicted the progress of our industry in general, like:

• Government policies

• Import and Export Duty

Mitigation of Risk /Risk Management

The Board identifies and categorizes risks in the areas of operations, finance, marketing, regulatory compliances and corporate matter. The Company has prepared Risk Matrix and its adheres to Internal financial control. The Company annually reviews the ‘List of Risk Area to identify potential business threats and takes suitable corrective actions. Confirmations of compliance with appropriate statutory requirements are obtained from the respective units/ divisions.

Internal Control Systems and their Adequacy

The Company has appointed Mr. Krishna Kumar Gupta to carry out Internal Audit. The Audit is based on focused, and risk based Internal Audit plan, which is reviewed each year after consulting the Audit Committee. In line with international practice, the conduct of internal audit is oriented towards the review of Internal Controls and risks in its operations of its business. The Internal Audit function endeavors to make meaningful contributions to the organizations overall Governance, Risk Management and Internal Controls. The Audit Committee reviews reports submitted by Internal Auditors suggestions to improve any process are considered by the management and the Audit Committee follows up on corrective actions taken by the management. Singhi & Co, the Statutory Auditors of the Company Audited the Financial Statements included in this Annual Report and issued a report on the Internal Controls over financial reporting (as defined in Section 143 of the Companies Act, 2013).

The Audit Committee also meets the Companys Statutory Auditors to ascertain, inter alia, their views on the adequacy of Internal Control Systems and keeps the Board of Directors informed of its major observations periodically. Based on its evaluation [as provided under Section 177 of the Companies Act, 2013 and Clause 18 of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015] the Audit Committee has concluded that as of 31^st March, 2023 the Internal Financial Controls were adequate and operating effectively.

Financial and Operational Performance

The Total Revenue of the Company increased 15% compared to last and the net profit of the company is almost doubled as compared to previous year. The capacity utilization was robust and operational efficiency helped the company to perform better.

Some of the Financial Indicators are:

Indicators	Ratio
Trade Receivable Turnover Ratio	44.61
Current Ratio	1.61
Debt Equity Ratio	0.044
Net Profit Ratio	4.56
Return on Equity Ratio	16.01
Inventory Turnover Ratio	14.21

Material Developments in Human Resources/Industrial Relations Front and Number of People Employed.

The manpower strength of the Company as on 31^st March, 2023 was 430. The Company maintained harmonious industrial relations during the Financial Year 2022-23.

Cautionary Statement

Certain statements made in the Management Discussion and Analysis Report relating to the Companys objectives, projections, outlook, expectations, estimates and others may constitute ‘forward looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations whether expressed or implied. Several factors could make significant difference to the Companys Operations. These include climatic and economic conditions affecting demand and supply, Government regulations, taxation, and natural calamities over which the Company does not have any direct control.