Bonlon Industries Ltd Management Discussions

<dhheadMANAGEMENT DISCUSSION AND ANALYSIS REPORT</dhhead

This Management Discussion and Analysis Report for the financial year ended 31^st March 2025.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The metal industry is one of the most flourishing industries and one of the core industries of India contributing more than 2% to the total GDP of India. The metals industry meets the requirements of a wide range of important industries such as engineering, electrical and electronics, infrastructure, automobile and automobile components, packaging etc. The metal industry consists of two major groups: ferrous metals and non-ferrous metals.

Non-ferrous metals, which include aluminium, copper, zinc, lead, nickel and tin, are used to make alloys, castings, forgings, extrusions, wires, cables, pipes, etc., and find their application in a number of sectors such as agriculture, infrastructure facilities like power plants, automobiles, railways, telecommunications, building and construction and in engineering and chemical plants.

Ferrous metals primarily consist of iron and different varieties of steel. Indian steel industry has shown strong performance in the recent past in terms of production, capacity utilisation, exports and consumption. India is now a major competitor among steel producers in the world.

Indias key advantages in the sector include a liberalized overall policy regime and reduced customs duty on primary and secondary metals, growing market demand, favourable conditions for production, presence of related and supporting industries and state support for helping companies improve performance and stimulating industry environment. India is the second largest producer of aluminium after China. Governments projects like ‘Make in India and ‘Smart City are expected to give huge impetus to the demand for nonferrous metals in the nation.

OPPORTUNITIES AND THREATS

Opportunities:

Key ingredients for the growth of the non-ferrous industry are strong demand, availability of raw materials, high entrepreneurial quotient of the country, development of the ancillary industry, technology, etc. The prevalence of most of these ingredients in India, provides strong and sustainable growth potential for the non-ferrous metals industry. In terms of demand, India has strong potential

given that the country is expected to be among the fastest growing large economies. Per capita consumption of non-ferrous metals in India is very low as compared to both developed and developing economies, thus leading to tremendous growth potential in the years to come. Furthermore, the boost to the Indian manufacturing sector due to the governments campaign ‘Make i n India is expected to provide an impetus to non-ferrous metals consumption.

The ‘Make in India initiative has provided a boost to investments by allowing 100 per cent FDI in major areas of the infrastructure sector such as railways, roadways, ports and inland waterways, aviation, and power. Favourable investment policies will facilitate the growth in the sector which can increase the demand of non-ferrous metals as this sector consumes these metals in large volumes. Further, the enhanced growth in the 25 identified sectors due to the initiatives and policy changes under ‘Make in India is expected to have a direct positive impact on the non-ferrous metals industry as these metals have widespread applications in these sectors.

Even though non-ferrous metals find applications across the spectrum, there are a few key sectors that contribute to the vast chunk of the consumption. These sectors, namely

ii. transport (automotives),

iii. electricals and

iv. construction

have widespread application of the nonferrous metals and are major drivers of consumption led growth. Additionally, the steel sector consumes the majority of Zinc produced for the process of galvanisation.

The non-ferrous metals industry is witnessing a paradigm shift in the way metals will be consumed in the future. With steady growth in demand, producers should move beyond traditional strengths in the electricals, automotive and building segments and shift to emerging applications offered by defence and aerospace, hybrid and electric vehicles, railways, etc.

Threats:

The non-ferrous metals industry has following threats for which Government support is required to provide a level playing field for healthy growth in the coming years. Non-ferrous metal industry is bracing for challenges such as:

• Rapid capacity expansion of input minerals

• Availability of indigenous technological expertise and need for cost reduction.

RISKS & CONCERNS AND INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY:

The non-ferrous metals industry is facing the following challenges and your Company has adequate internal control system for mitigating their risk:

a. Fluctuation in non ferrous metal price: The prices of non-ferrous metals, such as copper, nickel, and gold, are determined by the London Metal Exchange (LME) and other international markets (hereinafter collectively referred to as "LME reference prices"). LME reference prices are influenced by various factors, including international supply and demand balances, the state of the foreign exchange, political and economic circumstances, speculative trading, and competition with substitute materials. The state of fluctuations and the period effected by these can have either positive or negative results on the business performance.

We use commodity futures to hedge the risks of fluctuations in non-ferrous metal prices

b. Fluctuation in exchange rates:

Not only the import prices of raw materials, such as copper concentrates and nickel mattes, but also the domestic prices of non-ferrous metal ingots are determined based on LME reference prices in U.S. dollars. Consequently, depending on the state of fluctuations in the foreign exchange and when they occur, it could have a positive or a negative effect on the business performance.

We responds to fluctuations in the foreign exchange rate as necessary through forward foreign exchange contracts and the utilization of foreign currency accounts.

c. Changes in Laws and Regulations: The business activities are exposed to various political and economic risks, changes in laws and regulations concerning the environment, labor, taxation, currency control, trade and exchange rate fluctuations.

We are ensuring that each decision is based on a careful assessment of risks inherent concerned to Laws and Regulation.

Further, the Company has a proper and adequate internal control system to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized,

recorded and reported correctly. The internal control is exercised through documented policies, guidelines and procedures. It is supplemented by an extensive program of internal audits conducted by Internal Auditor appointed in pursuance of applicable Laws. The audit observations and corrective action taken thereon are periodically reviewed by the audit committee to ensure effectiveness of the internal control system. The internal control is designed to ensure that the financial and other records are reliable for preparing financial statements and other data, and for maintaining accountability of persons.

Internal Control system and their adequacy

We have a robust internal control system that is appropriate for the size, scale, and complexity of our operations. Comprehensive policies and procedures are in place to govern all financial and operational activities. These controls are designed to offer reasonable assurance with respect to the maintenance of accurate accounting records, the reliability of financial reporting, effective monitoring of operations, safeguarding of assets against unauthorized use or loss, and adherence to regulatory requirements. The internal financial control framework is further strengthened through periodic internal audits and regular management reviews.

MARKET REVIEW:

Global Economy:

Global economic activity is expected to maintain modest but uneven momentum. We project that global real GDP growth will decelerate to around 3.0% in 2025 and 2.9% in 2026, following a 3.2% advance in 2024, as rising trade frictions, persistent geopolitical and policy uncertainty, elevated market volatility, and inflation divergence reshape the global outlook. Regional growth patterns have become more fragmented, with developed markets losing steam and emerging markets showing varied resilience.

In developed markets, real GDP growth is expected to moderate to around 1.3% in 2025 and 2026, following a 1.8% advance in 2024. The US economy will no longer be the outperformer, with real GDP growth expected to decelerate from 2.8% in 2024 to 1.5% and 1.3% in 2025 and 2026, respectively. The impact of higher tariffs will be on full display in coming months with subdued private sector sentiment, higher inflation, softening labor market conditions, margin pressures, reduced business investment and weakening consumer demand.

In Europe, a fragile recovery is underway, buoyed by disinflation and real income gains along with stronger fiscal tailwinds. However, the imposition of US tariffs along with rising policy uncertainty will constrain the upside for business investment and exports. We project euro area growth to remain subdued

around 1.0% in 2025 and 1.3% in 2026 with disparities across economies. Japans economic recovery also remains modest, with GDP growth projected at 0.7% in 2025, following a 0.1% advance in 2024. While steady wage gains and a gradual rebound in consumer spending offer support, we expect external headwinds from trade tensions and structural challenges will continue to weigh on momentum.

Outlook

The global economy in 2025 shows resilience but faces persistent uncertainty, with the IMF projecting global growth at 3.0%. India is expected to lead growth among major economies, potentially becoming the fourth-largest economy overall, while countries like the U.S. and China are facing slower growth. Key risks include potential tariff increases, ongoing geopolitical tensions, and elevated uncertainty, which threaten to slow down global inflation and impede economic progress.

Indian economy overview

The International Monetary Fund (IMF) has revised its forecast for Indias economic growth to 6.4 percent for both 2025 and 2026. Earlier in its April 2025 World Economic Outlook, IMF had projected Indias GDP growth at 6.2 percent for 2025 and 6.3 percent for 2026.

Reaffirming Indias position as the worlds fastest-growing major economy, IMF attributed the upward revision to a more benign external environment than anticipated in its April forecast. For India, projections are based on the calendar year, with the agency noting that Indias growth projections are 6.7 percent for 2025 and 6.4 percent for 2026 based on financial year data.

The IMF has also modestly raised its global growth outlook to 3.0 percent in 2025 and 3.1 percent in 2026, citing lower-than-expected impact from tariffs, a weaker US dollar, and improved financial conditions. China is forecast to grow at 4.8 percent in 2025 and 4.2 percent in 2026, while the US is expected to expand 1.9 percent in 2025 and 2.0 percent in 2026.

India Metal Industry:

In 2025, Indias metal economy is characterized by robust domestic demand, particularly for steel, driven by infrastructure development and urbanization, with a projected 8-10% growth in steel demand. This expansion is occurring alongside a unique "multi-metal rally," with prices for both industrial metals like copper and aluminium, and precious metals like gold and silver, seeing significant increases simultaneously. Government policies, increased investment, and technological upgrades are further fueling this growth, positioning Indias metal sector as a strong driver of economic expansion and a compelling area for investors.

SRC="file:///C:/Program%20Files/microsoft%20frontpage/temp/Image264.jpg" WIDTH="135" HEIGHT="81"> OVERALL REVIEW OF OPERATIONS OF THE COMPANY:

The company is in the business of Manufacturing and Trading of Ferrous and Non Ferrous Metals. The Company has achieved a turnover of Rs. 62310.18 Lakhs which is 44% higher of previous financial years turnover of Rs. 4,31,48.60 Lakhs. Profits of the Company has also increased to 269.05 Lakh from 232.88 Lakhs as company to previous year.

OUTLOOK:

The company is taking all efforts to improve the quality of its products, timely delivery, to get more orders at competitive rates. Due to bulk orders and bargain power Company is able to quote better rates and maintain high quality & productivity of the products traded. Barring unforeseen circumstances the company is confident of achieving better results in the current year.

In trading segment also the Company is emphasizing on dealing on quality product, timely delivery of the goods and after sale services.

FINANCIAL AND OPERATIONAL PERFORMANCE:

The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013 and Generally Accepted Accounting Principles in India. Please refer Directors Report in this respect.

HUMAN RESOURCES/INDUSTRIAL RELATIONS:

The Companys HR philosophy is to establish and build a high performing organization, where each individual is motivated to perform to the fullest capacity to contribute to developing and achieving individual excellence and departmental objectives and continuously improve performance to realize the full potential of our personnel.

SIGNIFICANT CHANGES

Details of change significant changes in key financial ratios during the year as compared to previous year are given hereunder:

			Curren		Previou
Ratio	Numerator	Denominato r	t Year March 31,	s Year March 31,	Varianc e	Reasons
			2025	2024
Current ratio (in times)	Total current Assets	Total current liabilities	2.38	2.14	-11.22%
Debt- equity ratio (in times)	Long term liabilities +short term borrowings	Total equity	0.38	0.38	-1.85%
Debt service coverage ratio (in times)	Earnings before debt service = Net profit after taxes + non cash operating expenses +Interest + Other non cash adjustment s	Debt service Interest + principle repayments	1.14	0.59	93.17%	The Company has taken Loan during the current year
Return on equity ratio (in %)	Profit for the year	Average total equity	3.35	2.99	11.92%
Inventory turnover ratio (in times)	Revenue from operations	Average total inventory	28.89	20.21	42.96%	The primarly reason is increase in Average Inventory with the company
Trade receivable s turnover ratio (in times)	Revenue from operations	Average trade receivables	13.48	7.19	87.39%	The primarly reason is increase in average Trade receivable
Trade payables turnover	Purchase Expenses	Average trade payables	38.27	18.03	112.23%	The primarly reason is increase in average Trade payables

SRC="file:///C:/Program%20Files/microsoft%20frontpage/temp/Image265.jpg" WIDTH="135" HEIGHT="81"> CAUTIONARY STATEMENT:

Statements made herein describing the Companys expectations or predictions are "forward-looking statements". The actual results may differ from those expected or predicted. Prime factors that may make a difference to the Companys performance include market conditions, input costs, govt. regulations, economic development within/outside country etc.

	By Order of the Board of Directors
Date: August 29, 2025	For, Bonlon Industries Limited
Place: New Delhi	(Arun Kumar Jain)	(Rajat Jain)
	Managing Director	Whole Time Director
	DIN: 00438324	DIN: 00438444