Maiden Forgings Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Managements perspective on performance of the Company for financial year 2022-23 is given in this report should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included elsewhere in the Annual Report. Your Companys financial statements have been prepared in accordance with Indian Accounting Standards (‘Ind AS) complying with the requirements of the Companies Act, 2013, as amended and regulations issued by the Securities and Exchange Board of India (‘SEBI) from time to time.

Your Company is engaged in the business of manufacturing of wide range of Bright Steels bars and Wires which main aim to provide best quality of its products to its customers and to meet their dynamic demand. Your Company has experience of more than 35 years in manufacturing of bright steel bars and it has complete in-house manufacturing facility including testing, pickling and annealing and accordingly, become a domestic leader in the Industry, offering reliable customized solutions and constant access to new and cutting-edge solutions to its customers domestically and globally.

During the year, Your Company has diversified its product portfolio by adding "Plastic Coil Pneumatic Nails and Wire Welded Coil Nails" which aims to produce plastic collated, paper collated and wire collated nails for the application in the construction industry around the world and target developed nations by exporting 95% of this products which not only led to focus on modern sectors, improve profitability, increase in exports but too add high margins products in the portfolio of the Company. There are four other potential products which can give company a high value, high margin proposition and are complementary to the existing products of the company, which the company is considering and doing R&D on the same. The company shall be introducing one of them in near future once the R&D will be completed. The criteria for selection of product is based upon the demand supply matrix, gross & net margins achievable, long term market scenario for the product & expertise of the management and team to handle sales, production and execution of such a product.

OPPORTUNITIES/ THREATS AND OUTLOOK

During the year, Your Company has recognized the need to accelerate its product portfolio and add the above-mentioned products which has created a huge opportunity to access the developed nations via export of its products and improve its profitability. Further, after the impact of covid-19 it is being observed that the demand for steel is constantly increasing from the automotive sector and other sectors which has and will create a tremendous opportunity for the Company.

Moreover, it has been seen that Indias steel production has expanded rapidly over the past few years, growing at a

CAGR of 3.93% from 122 MT in FY 16 to 143.9 MT in FY 21 via the government initiatives and measures and forecasted that till financial year 2030, the production steel capacity will increase and reach to 300million tones which subsequently establish an extreme opportunity for Your Company.

In the amid stresses being witnessed across developed and emerging economies of the world, the India outlook appears fairly encouraging. On the steel consumption and demand front, there is a visible upswing both on account of pent up demand getting released as well as shift in consumption behavior. This, coupled with the significant capital expenditure by the Government of India, rising demand for affordable housing, infrastructure developments and construction projects, has led to a V-shape recovery in demand in most steel markets. Government spending in infrastructure projects such as airports, metro rail projects, highways has been very encouraging and is likely to continue to be key driver in steel demand.

RISKS AND CONCERNS

Your Company has established a well-defined process of risk management, wherein the identification, analysis and assessment of the various risks, measuring of the probable impact of such risks, formulation of risk mitigation strategy and implementation of the same takes place in a structured manner. Though the various risks associated with the business cannot be eliminated completely, all efforts are made to minimize the impact of such risks in the operations of the Company.

SEGMENT WISE AND PRODUCT WISE PERFORMANCE

Your Company is carrying out the business of manufacturing of wide range of bright steel bars and wires and accordingly, there is no segment reporting is required.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the financial year 2022-2023, Your Company has shown good performance an all aspects as follows:-

(Amount in lakhs)

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has in place adequate internal financial controls that commensurate with the size and nature of its operations of Your Company and has been operating satisfactorily. Further, Internal control systems comprising of policies and procedures that are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The employees are the backbone and true assets for the success of Company. Your Company on regular basis takes initiatives for their welfare; development, up gradation in their performance in order to build a strong team of talented professionals. Your Company human resources are commensurate with the size, nature and operations of the Company. Further, Your Companys total permanent employee strength as on 31st March, 2023 stood at 119 and it continues to maintain open and cordial employee relations with the employees and extremely grateful for their close and constructive cooperation in the financial year 2022-2023 pursuant to which Your Company is able to achieve its targets and made it listed on the BSE SME Platform.

Moreover, the establishment of Vigil Mechanism plays an important role as a watchdog via which employees and directors can report their genuine concerns to the management of Your Company.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFORE, INCLUDING

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF

During the year under review, Return on Net Worth (%) of the Company has been increased by 235.89% due to increase in PAT and better working capital management.

CAUTIONARY STATEMENT

Statements in this ‘Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, plans or industry conditions or events are ‘forward-looking statements within the meaning of applicable securities laws and regulations. Actual results, performance or achievements could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and Indian demand-supply conditions, competitors pricing, changes in government regulations, tax regimes, economic conditions within India. The Company assumes no responsibility to publicly update, amend, modify or revise any forward-looking statements, based on any subsequent development, new information or future events or otherwise except as required by applicable law.