Supremex Shine Steels Ltd Management Discussions.

INDUSTRYSTRUCTUREANDOUTLOOK:

Steel is crucial to the development of any modern economy and is considered to be the backbone of human civilization. The level of per capita consumption of steel is treated as an important index of the level of socio-economic development and living standards of the people in any country. It is a product of a large and technologically complex industry having strong forward and backward linkages in terms of material flows and income generation. All major industrial economies are characterized by the existence of a strong steel industry and the growth of many of these economies has been largely shaped by the strength of their steel industries in their initial stages of development. India is currently the worlds fourth largest producer of crude steel (knocking to be the third largest by theyearend) and is expected to become the second largest producer by 2020.

Indias economic growth is contingent upon the growth of the Indian steel industry. Consumption of steel is taken to be an indicator of economic development. While steel continues to have a stronghold in traditional sectors such as construction, housing and ground transportation, special steels are increasingly being used in engineering industries such as power generation, petrochemicals and fertilizers. India occupies a central position on the global steel map, with the establishment of new state-of- the-art steel mills, acquisition of global scale capacities by players, continuous modernization and up gradation of older plants, improving energy efficiency and backward integration into global raw material sources.

The Indian steel industry is largely iron-based through the blastfurnace (BF)orthe direct reduced iron (DRI) route. Indian steel industry is highly consolidated. About 50% of the crude steel capacity is resident with integrated steel producers (ISP). But the changing ratio of hot metal to crude steel production indicates toward the increasing presence of secondary steel producers in the eco-system.

BUSINESSSEGMENT:

The main object of the company is to carry on the business in trading of steels and acting as advisor and consultant on all matters and complications relating steel industry.

OPPORTUNITIESAND THREATS:

Opportunities:

The Company continues to adapt to the ever changing business environment to take advantage of the opportunities to deliver sustainable value for all its stakeholders.The Company endeavors to access high quality, low-cost steel that is available in its proximity to secure the long term availability of business opportunities. The Company expects the demand for steel products to be strong in the developing economies and the Company proposes to utilize it as well as its Groups existing network to meet this increased demand.

Further, Indias iron ore reserves and competitive labour costs give steel manufacturers based in the country a distinctive cost advantage. The Company seeks to leverage this advantageous position and strengthen its status as a low-costand high-quality traderofsteel.

Threats:

• Dumping of steel from abroad and increased competition from domesticand international steel Companies.

• Cheap sourcing of steel from countries with whom India has Free Trade Agreement (FTA).

RISKSAND CONCERNS:

The Company is exposed to risks arising out of the dynamic macro-economic environment as well as from internal business drivers. These could adversely impact its ability to create value overthe short, medium and long-term.

Your Company continuously monitors and revisits the risks associated with its business. It has institutionalized the procedure for identifying, minimizing and mitigating risks and the same are reviewed periodically. The Companys Structured Risk Management Process attempts to provide confidence to the stakeholders that the Companys risks are known and well managed. The management of the Company reviews the risk management processes and implementation of risk mitigation plans. The processes are continuously improved. Risk Management comprises three key components which are as below:

• Risk identification

• Risk assessment and mitigation

• Risk monitoring and assurance

INTERNAL CONTROLSYSTEM&ADEQUACY:

The Internal Control System facilitates the effectiveness and efficiency of Company operations and ensures the reliability of financial information and compliance with laws and regulations. In particular, the accounting control system is an important element of the Internal Control System as it helps ensure that the Company is not exposed to excessive financial risks and that financial internal and external reporting is reliable.

Your Company has robust internal audit and control systems. They are responsible for independently evaluating the adequacy of internal controls and provide assurance those operations and business units adhere to internal policies, processes and procedures as well as regulatory and legal requirements. Internal audit team defines and review scope, coordinates and conducts risk based internal audits with quarterly frequency across Company through their audit firm. Existing audit procedures are reviewed periodically to enhance effectiveness, usefulness and timeliness. The Internal control procedures include proper authorization and adherence to authorization matrix, segregation of roles and responsibilities, physically verification, checks and balances and preventive checks on Compliance riskand overseeing of periodical financials etc.

Internal audit entails risk assessment and detailed verification of processes, adequacy of maintenance of accounting records, documentation and supporting, authorizations, review of internal controls, compliance with management policies and laid down procedures, compliance with applicable accounting standards and to verify adherence with applicable statutes, rules, regulation, byelaws, and circulars of the relevant statutory and regulatory authorities.

FINANCIAL PERFORMANCE:
(I) Total Income
Financial Year (In Rs.)
2015-16 914,991
2016-17 1,416,732
2017-18 34,481,504

(II) Profit before Tax

Financial Year (In Rs.)
2015-16 20,289
2016-17 42,673
2017-18 8,32,906

(III) Profit for the Year

Financial Year (In Rs.)
2015-16 13,789
2016-17 29,673
2017-18 6,12,161
(IV) Earning per Share
Financial Year (In Rs.)
2015-16 0.001
2016-17 0.001
2017-18 0.02

HUMAN RESOURCESANDINDUSTRIALRELATIONS:

The Company takes pride in the commitment, competence and dedication of its employees in all areas of the business. The Company has a structured induction process at all locations and management development programs to upgrade skills of managers. Objective appraisal systems based on key resultareas (KRAs)are in place for senior management staff.

Human resource is considered as key to the future growth strategy of the Company and looks upon to focus its effortsto further align human resource policies, processes and initiatives to meet its business needs. In order to focus on keeping employees abreast of technological and technical developments, the Company provides opportunity for training and learning. The overall Industrial relations atmosphere continued to be cordial

Cautionary Statement

Certain statements in the 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. Actual results could differ from those expressed or implied therein. Important factors that could make a difference include cyclical demand and pricing in the Companys principal markets, changes in Government regulations and tax regime, economic developments within India and other ancillary factors.