Management Discussion & Analysis

Industry Scenario

During the year the market conditions had ups and downs. The future holds promise because of thrust given by the government & our own better internal controls in the form of better management control within the organisation. Our company is well poised to benefit from the emerging opportunities to supply stainless steel sheets & products to industry & general public respectively.

Opportunities

Market for stainless steel business is showing good signs of revival with a number of new projects being tendered in India & Abroad. The general outlook for the business in India as well as the markets in which the company has a brsence, is quite good.

1) Company has started putting efforts for pursuing outside parties projects for stainless steel utensils fabrication and trading.

2) Implementation of cleaners production & technology by which waste minimization will be maintained, which in turn will yield higher returns.

3) It is anticipated that demand will further increase for steel, stainless steel & utensils.

4) In the international market ,we are open for Joint Ventures

5) Company is putting its endeavours to boost exports.

Risk & Concerns

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Key business risks and mitigation strategy are highlighted below.

1) Business risk:

To mitigate the risk of high dependence on any one business for revenues, the Company has adopted a strategy of launching new products/services, globalising its operations, and diversifying into different business segments. The strategy has yielded good results and the Company, therefore, now has a well-diversified stream of revenues. To address the risk of dependence on a few large clients, the Company has also actively sought to diversify its client base.

The Company strives to add value to its clients by providing services of a superior quality, and maintaining a robust franchise with investors and end-users, to mitigate the risk arising from price competition.

2) Legal & Statutory Risk:

The Company has no material litigation in relation to contractual obligations pending against it in any court in India or abroad. The Company Secretary, compliance and legal functions advise the Company on issues relating to compliance with law and to br-empt violations of the same. The Company Secretary submits a quarterly report to the Board on the company's initiatives to comply with the laws of various jurisdictions. The company also seeks independent legal advice wherever necessary.

3) Human resource attrition risk

Unison Metals Ltd's key assets are its employees and in a highly competitive market, it is a challenge to address attrition. Unison Metals Ltd continues to accord top priority to manage employee attrition by talent retention efforts and offering a competitive salary and growth path for talented individuals.

4) Others

The company is exposed to risks & fluctuations of foreign exchange rates, raw-material prices and overseas investments exposures.

5) Audit and Internal control System

Unison Metals Ltd. has well-established processes and clearly-defined roles and responsibilities for people at various levels. This, coupled with adequate internal information systems embedded in business automation software, ensures proper information flow for the decision-making process. An internal audit conducted by an independent firm, reviews by the Audit Committee, and requisite guidelines and procedures augment the internal controls. The internal control system is designed to ensure that financial and other records are reliable for brparing financial statements and other information. These procedures ensure that all transactions are properly reported and classified in the financial records.

Raw material prices:

The prices of basic major raw materials used in our manufacturing process viz. stainless steel scrap / flats of various grades doesn't affect much, as we are working in open market scenario.

Financial Performance

The operating results for the current year is net profit before exceptional items and taxes Rs. 65.38 lacs ( Previous Year Rs. 77.55 lacs). The exceptional Item during the year comprised of diminution in value of investment Rs. 24.18 lacs and in brvious year Rs. 18.51 lacs..So the net profit after tax resulted for the year at Rs. 21.02 lacs (Previous Year Rs. 36.00 lacs). During the year Company Started Trading Activity other than steel products and transaction during the year is Rs. 731.38 Lacs. (Nil)

Accounting Policies

The accounting policies have been consistently applied by the Company and are consistent with those used in the brvious year. The financial statements have been brpared under the historical cost convention on an accrual basis. The management accepts responsibility for the integrity and objectivity of the financial statements, as well as for the various estimates and judgment used therein.

Consolidated Financial Statements

The financial statements of the Group and its' subsidiaries have been combined on a line by line basis by adding together the book values of like items of assets, liabilities, income and expenses, after duly eliminating intra group balances and intra group transactions and resulting gains/losses as per Accounting Standard 21 - Consolidated Financial Statements.

Cautionary Statement:

Statements in the management Discussion and Analysis describing the Company's expectations or brdictions, may be forward looking within the meaning of applicable securities, law and regulations. Actual results may differ materially from those exbrssed in the statement. Important factors that could influence the Company's operations include global and domestic supply and demand conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws economic developments within the country and other factors such as litigation and industrial relations.

For UNISON METALS LTD.

(TIRTH U. MEHTA)

Managing Director