AKG Exim Ltd Management Discussions

This Management Discussion and Analysis report has been prepared in compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and contains expectations and projections about the strategy for growth, product development, market position, expenditures and financial results. Certain Statements in the Management Discussion and analysis report are forward looking statements which involve, a number of risks and uncertainties that could differ actual results, performance or achievements with such forward looking statements on the basis of any subsequent development, information or events for which the Company do not bear any responsibility.

GLOBAL ECONOMY:

Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. The cost-of living crisis, tightening financial conditions in most regions and the continuing war in Ukraine weigh heavily on the outlook.

Global growth slowed in 2022 to 3.4%, ~1% weaker than expected at the end of 2021, mainly weighed down by the Russia-Ukraine war and elevated inflation levels, which continue to shadow the world economy. Economic growth proved surprisingly resilient during the third quarter of 2022, with strong labour markets, robust household consumption, business investment and better-than expected adaptation to the energy crisis in Europe. Even as headline inflation appears to have peaked in 2022 and the energy crisis has been less severe than initially feared, the global economy still faces major headwinds.

The International Monetary Fund (IMF) trimmed its 2023 global growth outlook as higher interest rates cool activity. It is forecasting global real GDP growth at 2.8% for 2023, before rebounding to 3.0% for 2024, marking a sharp slowdown from 3.4% growth in 2022 due to a tighter monetary policy. IMF predicts global inflation to cool to 6.6% in 2023 and 4.3% in 2024, which is still above pre-pandemic levels of about 3.5%, but significantly lower than 8.8% observed in 2022. Structural reforms can further support the fight against inflation by improving productivity and easing supply constraints, while multilateral cooperation is necessary for fast-tracking the green energy transition.

Indias Economic Performance:

Indias economy demonstrated resilience despite a challenging external environment. The World Banks latest India Development Update states that "India was one of the fastest growing economies in the world with real GDP growing 7.7% year-on-year during Q1-Q3 fiscal year 2022/23. Growth was underpinned by

robust domestic demand - strong investment activity bolstered by the governments capex push and buoyant private consumption, particularly among higher income earners." The World Bank report titled "Navigating the Storm" finds that while the deteriorating external environment will weigh on Indias growth prospects, the economy is relatively well positioned to weather global spill-overs compared to other emerging markets.

Indias GDP may grow by 7% for the financial year 2022-23, according to the second advance estimates released by the Ministry of Statistics and Programme Implementation. The Ministry also revised economic growth for financial year FY 2021 -22 to 9.1%, against 8.7% estimated in the previous year. The fall in year- on-year growth rate is partly due to a fading of pandemic-induced base effects, which contributed towards higher growth in FY 2021-22. Inflation remained high in FY 2022-23, averaging around 6.7%, but the current account deficit narrowed in Q3 of FY 2022-23 on the back of strong growth in service exports and easing global commodity prices.

https://www.worldbank.org/en/news/press-release/2023/04/04/indian-economy-continues-to-

showresilience-amid-global-uncertainties

INDIAN AGRICULTURE INDUSTRY ANALYSIS

According to Inc42, the Indian agricultural sector is predicted to increase to US$ 24 billion by 2025. Indian food and grocery market is the worlds sixth largest, with retail contributing 70% of the sales. Indias agricultural and processed food products exports stood at US$ 43.37 billion in FY23 (April 2022-January 2023). As per Second Advance Estimates for 2022-23 (Kharif only), total foodgrain production in the country is estimated at 153.43 million tonnes. At current prices, agriculture and allied sectors account for 18.3% of Indias GDP (2022-23). As per the third Advance Estimates of National Income, 2021 -22 released by the National Statistical Office (NSO), Ministry of Statistics & Programme Implementation, the agriculture and allied sectors contributed approximately 18.6 % of Indias GVA at current prices during 2021-22. Between April 2000-December 2022, FDI in agriculture services stood at US$ 4.43 billion.

Rapid population expansion in India is the main factor driving the industry. The rising income levels in rural and urban areas, which have contributed to an increase in the demand for agricultural products across the nation, provide additional support for this. In accordance with this, the market is being stimulated by the growing adoption of cutting-edge techniques including blockchain, artificial intelligence (AI), geographic information systems (GIS), drones, and remote sensing technologies, as well as the release of various e- farming applications.

In terms of exports, the sector has seen good growth in the past year. In FY22 (April 2022-February 2023) Exports of marine products stood at US$ 7.4 billion.

> Exports of rice (Basmati and Non-Basmati) stood at US$ 10.2 billion.

> Buffalo meat exports stood at US$ 2.88 billion.

> Sugar exports stood at US$ 5.28 billion.

> Tea exports stood at US$ 759.96 million.

> Coffee exports stood at US$ 1.01 billion.

(Source: https://www.ibef.org/industry/agriculture-india )

METALS AND STEELS:

India holds a fair advantage in production and conversion costs in steel and alumina. Its strategic location enables export opportunities to develop as well as fast-developing Asian markets. As of FY22, the number of reporting mines in India were estimated at 1,425, of which reporting mines for metallic minerals were estimated at 525 and non-metallic minerals at 720.

Minerals are precious natural resources that serve as essential raw materials for fundamental industries, so the growth of the mining industry is essential for the overall industrial development of a nation. The vast resources of numerous metallic and non-metallic minerals that India is endowed with serve as a foundation for the expansion and advancement of the nations mining industry. India is largely self-sufficient in metallic minerals including bauxite, chromites, iron ore, and lignite as well as mineral fuels like coal and lignite. The industry has the potential to significantly impact GDP growth, foreign exchange earnings, and give end-use industries like building, infrastructure, automotive, and electricity, among others, a competitive edge by obtaining essential raw materials at reasonable rates.

Rise in infrastructure development and automotive production are driving growth. Power and cement industries are also aiding growth for the sector. Demand for iron and steel is set to continue given the strong growth expectations for the residential and commercial building industry.

Some of the investments/ developments in the Metals & Mining sector in the recent past are as follows:

• As per data from the Ministry of Statistics and Programme Implementation (MOSPI), Indias mining GDP increased from Rs. 739.90 billion (US$ 8.98 billion) in the fourth quarter of 2020 to Rs. 913.03 billion (US$ 11.09 billion) in the first quarter of 2021.

• The index of mineral production of mining and quarrying sector for the month of December 2022 stood at 107.4, 9.8% higher as compared to the level in the month of December 2021.

• In FY23 (until December 2022), the combined index of eight core industries stood at 152.2 driven by the production of coal, refinery products, fertilizers, steel, electricity and cement industries.

• Between April 2000-September 2022, FDI inflows in the metallurgical industry stood at US$ 17.09 billion, followed by the mining (US$ 3.405 billion), diamond & gold ornaments (US$ 1.219 billion) and coal production (US$ 27.73 million) industries.

• In February 2023, ArcelorMittal - Nippon Steel is investing Rs. 60,000 crore (US$ 7.3 billion) to expand its steelmaking capacity in Hazira to I5MT a year from 9MT.

• In February 2023, NMDC signed an agreement for collaborative research with CSIR-IMMT, Bhubaneswar on "Feasibility Studies for Preparation of Fused Magnesia from Kimberlite Tailings" at its Head Office in Hyderabad.

• In November 2022, IIT Bombay and JSW Group entered into an exclusive strategic agreement to establish first-of-its-kind, state-of-the-art JSW Technology Hub in India for steel manufacturing in India.

• In August 2022, Tata Steel signed a MoU with the Government of Punjab for setting up a 0.75 MnTPA long products steel plant with a scrap-based electric arc furnace.

• In July 2022, Hindalco Industries Limited has signed an MoU with Phinergy and IOC Phinergy Private Limited (IOP) on R&D and pilot production of aluminium plates for Aluminium-Air batteries, and recycling of aluminium, after usage in these batteries.

• In October 2022, Coal India Limited (CIL) signed a MoU with Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUNL), for setting up 1,190 MW solar power project.

• In January 2023, Vedanta announced that its board had approved the sale of its international zinc assets in South Africa and Namibia to subsidiary Hindustan Zinc (HZL) for US$ 2.98 billion.

• In March 2022, MOU with detailed collaborative framework was between KABIL, India and Critical Mineral Office (CMO), Department of Industry, Science and Resources (DISER), Govt. of Australia for carrying out joint due diligence and further joint investment in Li & Co mineral assets of Australia.

• In February 2023, JSW Group announced to build a steel plant in Andhra Pradeshs YSR Kadapa district with an investment of Rs. 8,800 crore (US$ 1 billion).

• In 2021, an Indian state committee recommended the expansion of Vedanta Ltds Lanjigarh Alumina refinery from 1 million tonnes to 6 million tonnes, an investment that would cost the company Rs. 64.83 billion (US$ 993 million).

• In February 2023, Essar Capital Limited, investment manager of Essar Global Fund Limited, announced to set up steel plants in Odisha and a facility to import liquefied natural gas (LNG) at Hazira in Gujarat.

• On 2nd September 2022, Steel Authority of India Ltd. (SAIL) has supplied about 30000 tonnes of the specialty steel for nations first indigenously built Aircraft Carrier INS Vikrant for Indian Navy which commissioned at Cochin Shipyard Ltd.

• Innovative mineral exploration activities using state-of-the-art technology by Geological Survey of India (GSI), stepped up efforts by Khanij Bidesh India Limited (KABIL) to source strategic minerals from countries like Australia, Argentina and Chile.

• Three Indian state-run companies, National Aluminium Co Ltd, Hindustan Copper Ltd and Mineral Exploration Corp formed a joint venture to buy mining assets overseas that have minerals such as lithium and cobalt, which are used in the manufacture of batteries for electric vehicles.

• The index of mineral production of mining and quarrying sector for the month of September 2022 stood at 99.5.

• Between April 2000-June 2022, FDI inflows in the metallurgical industry stood at US$ 17.07 billion, followed by the mining (US$ 3.40 billion), diamond & gold ornaments (US$ 1.21 billion) and coal production (US$ 27.73 million) industries.

• GVA from mining and quarrying stood at US$ 43.3 billion in FY22, as per the advance estimates

• In FY23, Vedantas aluminium division will focus on backward integration and will put two of its mines in Odisha into production.

• Iron and steel imports stood at US$ 1,991.41 million in October 2022.

• In FY23 (until September 2022), the combined index of eight core industries stood at 142.8 driven by the production of coal, refinery products, fertilizers, steel, electricity and cement industries.

• NMDCs cumulative iron ore production (until May 2022) stood at 6.35 MT as compared to 5.91 MT (until May 2021)

• As of October 31, 2022, Indias total installed electricity generation capacity stood at 408,714.84 MW.

• In 2021-22, Indias iron and steel export was valued at US$ 17.62 billion. During FYI6-22, Indias export of iron and steel grew at a CAGR of 17.15%.

• In October 2022, iron ore exports stood at US$ 7.83 million.

• In November 2021, JSW Steel announced that the company registered a 6% YoY surge in crude steel production at 1.42 million tonnes in October 2021.

• In November 2021, AMNS India announced that it is planning to manufacture specialty steel under the production-linked incentive (PLI) scheme.

• Vedanta Limited is planning a US$ 20 billion investment across its operations, including increase silver production and steel capacity.

• In June 2021, Mr. T.V. Narendran, the CII President and Managing Director of Tata Steel, stated that steel firms have firmed up plans to invest ~Rs. 60,000 crore (US$ 8 billion) over the next three years in this sector.

• In May 2021, Vedanta Ltd. announced its plan to invest Rs.10,000 crore (US$ 1.34 billion) in setting up an aluminium park in Odisha to facilitate companies that use metal to set up their manufacturing units in the facility.

• In May 2021, ArcelorMittal Nippon Steel (AMNS) signed a contract with Total (a France-based energy company) for supply of up to 500,000 tons of liquefied natural gas (LNG) per year until 2026.

• In February 2021, ArcelorMittal-Nippon Steel India, in agreement with the Odisha government, has planned to set up an integrated steel plant (with 12 MT capacity) in the states Kendrapada district for Rs. 50,000 crore (US$ 6.89 billion)

• In February 2021, two new iron ore mines were inaugurated in Odisha, with a production capacity of 15 lakh tonnes per month and ~275 million tonnes of consolidated iron ore reserves. These mines will bring in ~Rs. 5000 crore (US$ 679.28 million) in annual revenue for the state and employment opportunities for locals.

OUTLOOK

Our Company is in the Line of Business of Import/ Export or Trading of following products and also deals in Engineering / Technical Consultancy or Indenting / Commission or Business Consulting Services of:

1. Metal Scrap - The Company offers a wide range of scrap metals viz. HMS (Heavy Melting Scrap), aluminum scrap, stainless steel scrap, copper scrap, brass scrap, etc. The company also deals in ferrous Scrap, non-ferrous Scrap and reusable items. It procures metal scrap originating from USA, West African and European countries, and sells these products in the domestic market all over India.

2. Petrochemicals - The Company also operates in the trading, wholesaling, distribution and indenting business of base oil variants to refineries along with supply of petrochemicals to industries. The petroleum products traded / distributed by the Company are Group I, II and III variants for automobiles lubricants and different industrial purposes, Granular & Formed Sulphur used in phosphate based industrial and consumer industry sectors and Aromatics - Benzene, Toluene.

We have developed a sustainability mission for our company which can be briefed in three words (reduce- reuse-recycle).

BUSINESS OVERVIEW

The total standalone turnover including other income for the year 2022-23 stood at Rs. 8,633.49 Lacs as compared to Rs. 12,404.30 Lacs for the year 2021-22. Total consolidated turnover of Rs. 22,225.11 Lacs during the year under review as against the consolidated turnover of Rs. 18,679.95 Lacs in the last year 2021-22.

MARKETING

The Company has set up a good marketing team.

INTERNAL CONTROL

The Company has an internal control system, commensurate with the size of its operations. Adequate records and documents were maintained as required by laws. The Companys audit Committee reviewed the internal control system. All efforts are being made to make the internal control systems more effective.

CONSOLIDATED SEGMENT WISE REPORTING

During the year under review, Company has achieved all sales under Segment B i.e., Trading only.

Name of the segments dealt by the Company during the year 2022-23:

1. Segment A: Manufacturing (Under Process)

2. Segment B: Trading

RISKS AND CONCERNS

In any business, risks and prospects are inseparable. As a responsible management, the Companys principal endeavor is to maximize returns. The Company continues to take all steps necessary to minimize losses through detailed studies and interaction with experts.

CAUTIONARY STATEMENT

Statement in this Managements Discussion and Analysis detailing the Companys objectives, projections, estimates, expectations or predictions are "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include g lobal and Indian demand-supply conditions, feedstock 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 within which the Company conducts business and other factors such as litigation and labour negotiations.

DISCLOSURE OF ACCOUNTING TREATMENT

The Company has followed all the treatments in the Financial Statements as per the prescribed Accounting Standards.

By Order of the Board of Directors For AKG Exim Limited

Sd/-	Sd/-
RAHUL BAJAJ	MAHIMA GOEL
EXECUTIVE DIRECTOR & CFO	MANAGING DIRECTOR
DIN:03408766	DIN:02205003

Place: Gurugram

Date: 29th August, 2023