Suraj Ltd Management Discussions.

Industry Structure and Development:

Suraj Limited ("the Company") is Indias leading Manufacturer of Stainless Steel seamless Pipes, tubes, and "U" tubes, Flanges & fittings with Electro polishing having a plant at Survey no. 779/A, Thol, Tal:-Kadi, Dist: - Mehsana. Our products find application in important industry segments like pharmaceuticals, dyes & pigments, Oil, Gas, Refinery, etc. The day to day management of the Company is looked by the Executive Director assisted by a team of competent technical & commercial professionals.

Financial Performance:

The companys overall operational performance has been average during the financial year2020-21; it achieved sale and other income of 19,238.23 Lakhs as against last years 17,703.47 Lakhs. Profit before tax increase from 158.69 Lakhs to 192.23 Lakhs. Net Profit is 137.54 Lakhs, Reserve and Surplus stood at 6,988.07 Lakhs.

Opportunities, Threats, Risks and Concerns:

As is normal and prevalent for any business, the Company is likely to face competition from large scale imports. There can be risks inherent in meeting unforeseen situation, not uncommon in the industry. Company is fully aware of these challenges and is geared to meet them. Company also recognizes the risks associated with business and would take adequate measures to address the associated risks and concerns. Some of these factors include competition from multinational Companies, duty free imports by customers against export obligations, our pricing strategy being mainly dependent on import affairs and dependence on imported raw material.

Internal Control Systems and their Adequacy:

Management has put in place effective Internal Control Systems to provide reasonable assurance for:

• Safeguarding Assets and their usage.

• Maintenance of Proper Accounting Records and

• Adequacy and Reliability of the information used for carrying on Business Operations.

Key elements of the Internal Control Systems are as follows:

(i) Existence of Authority Manuals and periodical updating of the same for all Functions.

(ii) Existence of clearly defined organizational structure and authority.

(iii) Existence of corporate policies for Financial Reporting and Accounting.

(iv) Existence of Management information system updated from time to time as may be required.

(v) Existence of Annual Budgets and Long Term Business Plans.

(vi) Existence of Internal Audit System.

(vii) Periodical review of opportunities and risk factors depending on the Global / Domestic Scenario and to undertake measures as may be necessary.

The Company has appointed an Independent Auditor to ensure compliance and effectiveness of the Internal Control Systems in place.

The Audit Committee is regularly reviewing the Internal Audit Reports for the auditing carried out in all the key areas of the operations. Additionally the Audit Committee approves all the audit plans and reports for significant issues raised by the Internal and External Auditors. Regular reports on the business development, future plans and projections are given to the Board of Directors. Internal Audit Reports are regularly circulated for perusal of Senior Management for appropriate action as required.

Human Resource/Industrial Relations:

Human Resources Development, in all its aspects like training in safety and social values is under constant focus of the management. Relations between the management & the employees at all levels remained healthy & cordial throughout the year. The Management and the employees are dedicated to achieve the corporate objectives and the targets set before the company.

Business outlook:

Indias steel demand expected to rebound by 19.8% in 2021. Steel demand is expected to decline significantly in 2020-21 in line with a projected contraction in the global economy due to the impact of corona virus pandemic. Releasing its short-range outlook for 2021 and 2022, the WSAforecasted that demand growth for India in 2022, however, will be lower at 5.9%. In 2020, Indias steel consumption was 88.5 million tonne (MT). After declining 13.7% in 2020, Indias steel demand is expected to rebound by 19.8% in 2021, the highest rate among the top-10 consuming nations (Source: World Steel Association). The global steel industry is being impacted as our customers are hit by shutdowns, disrupted supply chains, collapsing confidence and delayed investment and construction projects, as well as a decline in consumption activity. The global economic growth is expected to see a contraction of over 3% in 2020. According to the association, whose members represent 85% of the global steel production, globally steel demand will grow by 5.8% in 2021 to reach 1,874 MT, after declining by 0.2% in 2020. In 2022, global steel demand will see further growth of 2.7% to reach 1,924.60 MT. China, which recorded 9.1% growth in consumption in 2020, is expected to see 3% and 1% growth respectively in 2021 and 2022.

Cautionary Statement:

Statements in the Management Discussion and Analysis and Directors Report describing the Companys strengths, strategies, projections and estimates, are forward-looking statements and progressive within the meaning of applicable laws and regulations.Actual results may vary from those expressed or implied, depending upon economic conditions, Government Policies and other incidental factors. Readers are cautioned not to place undue reliance on the forward looking statements.