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SUJANA METAL PRODUCTS LIMITED
has increased substantially and production
may touch around 200 MT by the year
2020. The country has the necessary iron
ore reserves to achieve this level of steel
production. As highlighted earlier, due to
India’s expected acceleration in GDP growth
rate in the medium and long-term, the demand
for steel is bound to go up significantly. This
will benefit all steel producers including your
Company.
India is one of the very few economies in the
world which is growing at a commendable
speed and promises a huge opportunity for
core industries like steel. The economy is
expected to grow by more than 9% in the
fiscal 2011-12. If this comes true, it will surely
give big boost to the steel consumption in the
country.
Government’s intention to boost economic
growth by injecting funds in various industries,
like construction, infrastructure, power etc. will
drive the demand for steel. The average per
capita consumption of steel in India is 46 kgs,
compared to the global average of 198 kgs
thus; there is huge scope for increasing steel
production in India.
In spite of rising demand from various sectors
coupled with increased government spending
on infrastructure, the Indian Steel Industry is
likely to face severe challenges. The main
challenge steel producers would face from
high raw material prices, putting pressure
on operating margins. India, being mostly
dependent on imports for coking coal, is more
likely to be affected by the volatility in coking
coal prices.
Increase in input costs, adverse exchange
rate fluctuations and hardening of interest
rates are some of the specific threats that
the Company continues to mitigate by careful
planning, active treasury management and
use of alternative borrowing instruments.
The Company is also actively searching for
growth opportunities and new markets in all
its product segments.
3. RISK PERCEPTION:
The Company is exposed to normal industry
risk factors of competition, project delay,
human resource, cost escalation and
consumer attrition. Your Company manages
these risks, by maintaining a conservative
financial profile and by following prudent
business and risk management practices.
A varied product portfolio and wide
geographical presence and reach, both
domestic and international, have helped the
Company to significantly de-risk its business.
Manufacturing units in Taminadu and Andhra
Pradesh have enabled the Company to cater
to the needs of its customers, meeting delivery
deadlines at prescribed locations. The
Company has sales and technical servicing
offices at Mumbai, Chennai, Bangalore,
Hyderabad and Visakhapatnam. Multi
locational presence has reduced distribution
and inventory costs and delivery times.
4. INTERNAL CONTROL SYSTEMS AND
THEIR ADEQUACY:
The Company has in place adequate
internal control systems and procedures
commensurate with the size and nature of it
business. These procedures are designed to
ensure that:
v
v
all assets and resources are acquired
economically, used efficiently and are
adequately protected;
significant financial, managerial and
operating information is accurate,
reliable and is provided timely; and
v all internal policies and statutory
guidelines are complied with.
The effectiveness of internal control is
continuously monitored by the Audit
Committee of the Company. The Company
has an Audit Committee which regularly
reviews the reports submitted. All significant
audit observations and follow-up actions
thereon are reported to the Audit Committee.
The Committee also met the Company’s
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