MCON Rasayan India Ltd Management Discussions

1. This section shall include discussion on the following matters within the limits set by the listed entitys competitive position:

Mcon Rasayan India Limited operates in the eld of construction chemicals and speciality building materials. So, thereby we are mainly focusing on the construction sector. As we all are aware that the Indian construction sector is booming right now with special focus on infrastructure development as well as on the residential building segment.

There are so many government initiatives that are happening in the residential building, may it be mass housing by CIDCO or Prime Minister Awas Yojana by the Maha Housing Development Corporation or any kind of low-cost housing or a ordable housing projects across India. Mcon Rasayan India Limited has been a very strong partner with the government of India in such initiatives. We have got our products approved in the segments like MAHADA, CIDCO, Maha Housing etc., which gives us an edge as far as the product consumption is concerned in the government initiatives.

At the same time, we are happy to announce that our construction chemical manufacturing facility in Ambethi Vapi is working now at its full capacity. The entire plant is ready, commenced and now fully operational. This is the plant where we can call it our mother plant spread over 3 lakh square feet and which can manufacture the entire range of construction chemicals from foundation to nishing. We have got di erent zones allocated in this plant which starts from the dry mix grey powder zone which manufactures ready mix mortars, styled adhesives and specialty mortars. Then the admixture division or the admixture zone which manufactures all the plasticizers and slum retainers. Then we have got the white powder zone where we manufacture the white adhesives as well as we also manufacture the wall putty. Then we have got the bonding polymer zone where we manufacture the gypsum bonding agent, plaster bonding agents and then various water boiling systems are manufactured in the polymer zone. So, this is the kind of range that we are manufacturing in this plant.

This plant has got a state of art laboratory wherein every raw material that comes in is thoroughly tested, inspected and then given for production and once the product is nished then the packed bag as well as the sample lot is tested in the laboratory to ensure that the compliance happens as per the standard.

Mcon Rasayan India Ltd. has a tremendous scope in the geography that its operating and also the product segment of Construction Chemicals and Modern building materials:

Talking of opportunities and strengths, Mcon Rasayan India Limited is very strong in the distribution network and we are capitalizing on the strength by further adding distributors. In the current nancial year, we have explored three more states, mainly being Uttar Pradesh, Karnataka and Kerala and we have appointed more than 18 distributors and more than 48 dealers in these areas. This builds the strength of Mcon Rasayan India Limited of being the local partner for their customers as the dealers and distributors are well equipped technically on the product knowledge as well as they stock Mcon products so that the customer can be serviced faster.

As far as the opportunities are concerned, we are slowly becoming stronger in the admixture division. Thus, every admixture that is being used, may it be the crystalline admixture used in the infra projects or may it be the plasticizers and slum returners used in the RMC plants or the road projects. Mcon has their entire product range and we are approaching various infrastructure companies for the same.

The second major opportunity that we can foresee is the paint segment which we have ventured in the current nancial year and we have got good positive feedback from the customers. They are liking the product and they are more than happy to use it. We are entering into the niche part of the paint division so that we dont have to compete with the big giants or try to pick that particular stake but we are mainly focusing either on the smaller contractor base or on projects that the builders are doing wherein the trust is already developed for Mcon products and so they are ready to accept one more product from our basket that is the paint. So, the combination of textures and paints is one more big opportunity that we are looking into.

The companys operations are highly dependent on the leadership as well as the technical team that is available with us in the R&D as well as the production site. So, we are ensuring that by providing them good incentives and strong ESOP policies, we can retain those teams. At the same time, we are also ensuring that we have got a strong sales force because at the end of the day everything is driven by numbers. So, getting talented sales force and retaining them is another challenge which the company is handling through giving them time to time training internally as well as externally.

Another major concern is the weather conditions like if excessive rain is there in certain regions, then that might hamper the total sales of the company. But fortunately, it seems that the current year will not see very heavy torrential rains or ooding situations. So that will not hamper the total overall numbers of the company.

Additionally, if there is any delay on part of the raw material that comes into the company, so that may hamper the production life cycle. But we are mitigating that by having enough raw material inventory with us which of course ends up in heavy stocks inventory at our end.But that mitigates the risk of running out of raw material stock and thus giving timely service to the customer.

Well, the companies, of course, depend on the market because they know that a business is going to come from the market. So, the market dependency is in terms of, number one, residential projects that the builders are doing, the private residential projects. Second is the government policies that are focused on the infrastructure. So, if at all those policies change, then that is one dependency that is there. Third is the labour strikes and con icts which, because you have got manufacturing plant in Gujarat, so the risk is on lower side. Fourth is health crisis or pandemic. Fifth is natural disasters and extreme weather conditions. And sixth is the nancial challenges that can be faced by the client due to which the payment cycle of the company gets delayed. So, these are the major external risks that the company is dependent on in the market.

The company has established enough internal controls and risk management systems to ensure that all its assets and the data accuracy is maintained. The company has got its own MIS system as well as the data is being safeguarded in terms of multiple softwares where we have got the Tally ERP version as well as the customer data is maintained in the CRM which is again tailor-made to the companys needs. Also, we have got internal control systems wherein we have got internal auditors who are reviewing the companys monthly P&L and monthly data and giving feedback to the management on how it is maintained.

Also, our independent directors are very proactive as far as the internal control systems are concerned and they are always cross-checking either through audit committees or during the board meetings to check how the company is faring and what all data it is maintaining and the e ciency as well as the advocacy of that data.

MCON has consciously ensured that we create more diverse segment bifurcation so that the high margin or the better bottom line products start getting an edge. Like if we talk of two years back then we were mainly Ready-mix Morter manufacturing and selling company wherein almost 65% of our turnover was coming from the Ready-mix Morter division.

But if you see in the past two years, we have slowly developed other segments also. If I talk of the current nancial year, then the Ready-mix Morter and the tile adhesives is almost at equal around 26.5% each. Also, the water-proo ng system segment is picking up slowly at 15% and the admixture division is at 13%. So those are some key segments that have developed.

The paint segment though a slow start as of now but is the next focus area for MCON and we are sure that with this 5-6 segments picking up hard, we will have a better bottom line and thus create value for our shareholders.

The company remains committed to delivering world-class products to the construction industry by focusing on their R&D capabilities and trying to develop new products year on year. Even this year we launched almost six to seven new products from our R&D basket. Mainly the primary products that were of interest, one was the anti-corrosive micro-concrete and the underwater micro-concrete which helps in the coastal environment or the environment where underwater micro-concrete needs to be done.

Apart from that the overall industry outlook if you see is a very positive outlook though there were major challenges in the second and the third quarter majorly marred by the elections the General Assembly elections as well as the Maharashtra State Assembly elections as MCON is doing more than 50% of their business in the Maharashtra state so these two elections have a ected our nancial year and also had a dent on the total sales but still if you see the overall its a positive trend of sales and we have shown sales growth in terms of numbers and of course we also have a very strong team now capable of creating bigger numbers. The manufacturing facility that we are talking of has got more than 40,000 metric ton capacity per annum due to which we can foresee that up to 300 crore rupees of turnover will not need additional manufacturing capability or capacity to su ce the customers.

The revenue from operations for FY 2024-25 is Rs. 5074.52 Lakhs over the previous years revenue from operations of Rs. 4212.62 Lakhs, re ecting an increase of 20.47% over the previous year.

Net Pro t after tax for FY 2024-25 is Rs. 224.12 Lakhs against the previous years Net Pro t after tax of Rs. 227.39 Lakhs.

Earnings per Share for FY 2024-25 was Rs. 3.40 against the previous years Earnings per Share of Rs. 3.56.

The Company remains committed to enhancing shareholder value through operational e ciencies, product innovations, and strategic growth initiatives, and expects to deliver improved results in the coming years

The Company rmly believes that motivated and empowered employees are the cornerstone of competitive advantage.

The companys employee value proposition is based on strong focus on employee development, providing a satisfying work environment, performance appraisal and counseling and appropriate empowerment. The company continues to maintain and enjoy a cordial relationship with its employees, providing a positive environment to improve e ciency with regular investments in upgrading the knowledge skills of the employees.

The number permanent employees on the roles of the Company as on 31st March 2025 is 140 employees and an average year on year growth of 34.62 %.

Due to change in increase in share capital, reserves and surplus and pro ts for the current nancial year there is a change in net worth amounting to 111.86%.

The Company has followed all the treatments in the Financial Statements as per the prescribed Accounting Standard: our company has followed all required accounting standards also disclosed signi cant accounting policy. Financial statements include balance sheet, pro t and loss, cash ow statement with schedules/Notes.

As per regulation 15(2) of the Listing Regulation, the Compliance with the Corporate Governance provisions shall not apply in respect of the following class of the Companies:

a. Listed entity having paid up equity share capital not exceeding Rs. 10 Crore and Net worth not exceeding Rs. 25 Crore, as on the last day of the previous nancial year;

b. Listed entity which has listed its speci ed securities on the SME Exchange.

Since, our Company falls in the ambit of aforesaid exemption (b); hence compliance with the provisions of Corporate Governance shall not apply to the Company and it does not form the part of the Annual Report for the nancial year 2024-25.

Since, our Company falls in the ambit of SME Listed entity; hence compliance with the provisions of declaration signed by the chief executive o cer stating that the members of board of directors and senior management personnel have a rmed compliance with the code of conduct of board of directors and senior management shall not apply to the Company and it does not form the part of the Annual Report for the nancial year 2024-25.

Since, our Company falls in the ambit of SME Listed entity; hence compliance with the provisions of Compliance certi cate from either the auditors or practicing company secretaries regarding compliance of conditions of corporate governance shall not apply to the Company and it does not form the part of the Annual Report for the nancial year 2024-25.

During the year under review there are no shares in the DEMAT suspense account or unclaimed suspense account, hence this provision is not applicable.

During the year under review the Company has not executed certain types of agreements binding listed entities as required to be disclosed under clause 5A of paragraph A of Part A of schedule III of the Listing Obligations and Regulations Act, 2015.

The statements in the "Management Discussion and Analysis Report" section describes the company objectives, projections, estimates, expectations, and predictions, which may be "forward looking statements" within the meaning of the applicable laws and regulations. The annual results can di er materially from those expressed or implied, depending upon the economic and climatic conditions, Government policies and other incidental factors.