Kachchh Minerals Ltd Management Discussions

MACROECONOMIC OVERVIEW

The global economy entered FY 2025-26 amid a complex environment characterized by geopolitical tensions, evolving trade policies, elevated uncertainty and uneven growth across major economies. Despite these challenges, global economic activity remained relatively resilient. The International Monetary Fund ("IMF"), in its April 2026 World Economic Outlook, projected global growth at 3.1% in 2026 and 3.2% in 2027, while highlighting geopolitical developments, trade tensions, commodity-price volatility and financial conditions as important downside risks to the global outlook.

Against this global backdrop, the Indian economy continued to demonstrate strong resilience and domestic growth momentum. As per the Economic Survey 2025-26, Indias real GDP growth for FY 2025-26 was estimated at 7.4%, compared with 6.5% in FY 2024-25. Growth continued to be supported principally by domestic demand, strengthening capital formation, resilient consumption and improving manufacturing activity. The Survey also noted that services continued to be a major contributor to overall economic expansion.

The Indian economys growth trajectory continues to be supported by structural factors including public investment in infrastructure, improving physical and digital connectivity, a strengthening manufacturing ecosystem, rising domestic consumption and increasing formalisation of economic activity. Gross Fixed Capital Formation was estimated to grow by 7.8% in FY 2025-26, while private final consumption expenditure was estimated to grow by 7.0%, reflecting continued domestic demand.

INDUSTRIAL AND MANUFACTURING ENVIRONMENT

The industrial sector remained an important contributor to Indias economic expansion during FY 2025-26. The Economic Survey estimated industrial GVA growth at 6.2% for FY 2025-26, with manufacturing GVA growth estimated at 7.0%. Construction activity was also estimated to grow by 7.0%, supported by continuing infrastructure development and investment activity.

The continued development of manufacturing, construction, infrastructure and allied industries has significance for the industrial minerals sector, as minerals such as China Clay, Kaolin and Silica Sand are used as inputs across several downstream applications, including ceramics, glass, paints and coatings, paper, foundry and other industrial processes.

At the same time, the mining and quarrying segment experienced comparatively weaker growth during the year. The Economic Survey estimated mining and quarrying GVA to contract by 0.7% in FY 2025-26, highlighting the operational and structural challenges that can affect the sector.

INFRASTRUCTURE AND MANUFACTURING-LED DEMAND

Indias continued focus on infrastructure creation, manufacturing capacity and connectivity is expected to remain an important structural driver of demand for industrial inputs. Investment in roads, housing, industrial facilities, urban infrastructure and other capital-intensive activities creates downstream demand across a broad range of manufacturing industries.

For the industrial minerals sector, these developments can create opportunities through increased demand from end-user industries. However, the benefits are dependent on the pace of industrial activity, customer demand, mineral availability, product quality, pricing and the ability of individual enterprises to operate efficiently and comply with applicable regulatory requirements.

MINERALS AND CRITICAL MINERAL LANDSCAPE

The strategic importance of minerals has increased as economies pursue manufacturing expansion, energy transition and supply-chain resilience. Indias Economic Survey 2025-26 has highlighted the growing importance of critical minerals and the need to strengthen domestic capabilities as well as international partnerships.

While the Companys present business is primarily associated with industrial minerals, the broader policy focus on strengthening Indias mineral ecosystem provides a supportive structural backdrop for the sector. Increasing emphasis on domestic resource development, processing capability, resource efficiency and value addition could create opportunities for appropriately positioned mineral businesses over the longer term.

OUTLOOK

Indias medium-term economic outlook remains constructive, supported by domestic demand, public and private investment, manufacturing expansion and continued infrastructure development. The Economic Survey projects real GDP growth of 6.8% to 7.2% for FY 2026-27, indicating expectations of continued economic expansion, albeit amid a challenging global environment.

According to the July 2026 World Economic Outlook Update of the International Monetary Fund ("IMF"), global economic growth is projected at 3.0% in 2026 and 3.4% in 2027, indicating an expected strengthening of global activity in 2027, although the outlook remains exposed to geopolitical and financial risks.

India is expected to remain one of the faster-growing major economies. The IMFs July 2026 assessment projects Indias growth at approximately 6.4% for FY 2026-27, with growth expected to strengthen thereafter as temporary external shocks moderate. The outlook continues to be supported by resilient domestic demand, investment activity and Indias underlying structural growth drivers.

The outlook for the minerals industry, however, remains subject to several factors, including commodity-price movements, availability of mineral resources, environmental and mining regulations, logistics costs, downstream industrial demand and global trade conditions.

For Kachchh Minerals Limited, the broader economic environment provides potential opportunities through the Companys association with industrial minerals and their diversified end-use applications. The Company intends to evaluate opportunities with a focus on commercial viability, regulatory compliance, operational sustainability and value addition. The management remains mindful that the Companys future performance will depend not only upon macroeconomic conditions but also upon its ability to establish sustainable operating activity and generate consistent revenues.

Overall, while the external environment continues to present uncertainties, Indias resilient domestic economy, infrastructure investment and manufacturing-led growth provide a potentially favourable long-term backdrop for industrial minerals. The Company will continue to monitor these developments and align its business approach with commercially viable opportunities as they arise.

INDUSTRY STRUCTURE AND DEVELOPMENT

The company is engaged in Single Segment i.e. Minerals Industry by catering to minerals processing segment through extraction of various types of silica sand and china clay, mineral raw material etc. These minerals are sometime sold as raw materials or sold after processing, making value addition to the same as per customer demands. Minerals are expected to become a core sector in the nations economy in terms of generation of employment and revenues, industrial growth, conservation of energy and natural resources and mainly some unit works as export-oriented unit generating foreign exchange and indispensable materials in all important sectors of the economy. The products of the Company are mainly accepted in the local market.

2025- 26 2024- 25 Revenue from Operations 29.44 Other Income 2.53 6.37 Total Income 2.53 35.81 Total Expenses 113.10 34.01 Profit/(Loss) for the year before taxation (110.56) 1.79 Tax Expenses Profit/(Loss) after tax (110.56) 1.79 Earnings Per Equity Share (Face Value Rs. 10/- Per Share) Basic (2.08) 0.03 Diluted (2.08) 0.03

The Company has recorded a total income of Rs. 2.53 lakhs as against Rs. 35.81 lakhs in the previous year. During the year under review, the Company has incurred loss of Rs. (110.56) lakhs as compared to previous year profit of Rs. 1.79 lakhs. There are no material changes and commitments affecting the financial position of your Company.

HUMAN RESOURCE

Human Resource development is essential for building a skilled and motivated workforce capable of driving innovation, achieving performance excellence, and sustaining competitive advantage in the long term. People are our key pillars of strength. Human Capital is the core strength in achieving the sustainable growth path charted by our strategic apex as it plays an important role in developing, reinforcing, and enhancing the culture of an organization. Our Company believes that its employees are one of the most important stakeholders. As on March 31, 2026, it had a total head count of 6 employees. The Directors wish to place on record their appreciation and acknowledgment for the efforts and dedication and contributions made by employees at all levels during the year under review. Our Company is focused on building and developing enduring capabilities for a future-ready workforce. For the same it aims to attract as well as develop, motivate and retain diverse talent in the highly competitive market that is critical for its continued success. Our Company has people-friendly policies and practices aligned with business strategy that provides its employees an opportunity to learn, grow and take their career forward. All employees, from a new joiner to a tenured one, are provided with tailored learning opportunities as per their role, level, and specific focus area. Employees are equally treated and provided opportunities irrespective of gender, marital status, religion, race/caste, color, age, ancestry, nationality, language, ethnic origin, socio-economic status, physical appearance, disability, sexual orientation, gender and expression.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

An internal control system encompasses policies, procedures and processes designed to safeguard assets, ensure accurate financial reporting and comply with regulations. Its adequacy is determined by its ability to effectively mitigate risks, prevent fraud and support operational efficiency. Regular evaluation, feedback from audits and alignment with organizational goals are crucial for maintaining and improving the effectiveness of internal controls over time.

The internal control is designed to ensure that the financial and other records of the company are reliable for preparing financial statements and other data, and for maintaining accountability of assets. Needless to mention that ensuring maintenance of proper accounting records, safeguarding assets against loss and misappropriation, compliance of applicable laws, rules and regulations and providing reasonable assurance against fraud and errors will continue to remain central point of the entire control systems.

OPPORTUNITIES.RISKS.CONCERNS AND THREATS:

SWOT Analysis:

Strengths	Weaknesses
• Active sectorial support by the Indian government • Availability of raw material; relatively lower • costs and reduced supply lead time • Availability of low cost and skilled manpower which may reduce the cost of production • Growing population • growth of service and infrastructure sector	• Rising competition • Inflexible labour laws • Technological obsolescence
Opportunities	Threats
• Growing economy and domestic market • Increase in GDP • Continuous innovation and technology advancements • New line of Business activities as approved by the shareholders	• Emergence of international brands • environmental laws • Geographical disadvantages • Regulatory challenges • compliance burdens and operational risks

It is a fact that many developments in Indian economy are triggered by globalization as one world markets are under cut-throat competition. The prime opportunity lies in meeting customers raised expectation in terms of high quality with value added products, prompt response, timely delivery, proper services and performance and the same opportunities were regularly grabbed by your company since its inception.

Due to rapid changes in the technologies, business dimensions and complexities, regulatory changes and environmental concerns, competitions from global players, fluctuation of price and technological obsolescence and various types of risks have emerged. All such risks cannot be eradicated completely, however, can be controlled, mitigated and managed within the Company in order to balance risk and reward. Risk management is an important part of the Companys business strategy, and it is smoothly incorporated into all of the Companys activities. The aim of the Companys framework is to optimize the risk-return equation while also ensuring strict adherence to all current and upcoming laws, rules, and regulations that apply to all of the Companys business activities. Thus, managing risks is not a one-time activity; its an ongoing process. The Company strives to cultivate a strong and disciplined risk management culture across all of its business operations and at all levels of the organization.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis, describing the Companys objectives, projections, estimates, expectations, or predictions, may be "forward looking statements" within the meaning of applicable 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 raw material 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 in which the Company conducts business and other incidental factors.

KEY FINANCIAL RATIOS

The same is provided under Financial Statements and forms part of this Annual Report.

Prakashbhai Haribhai Kanani

Director DIN:02331173

Date:August 14,2026

Place:Mumbai