Midwest Gold Ltd Management Discussions

ANNEXURE-III

OVERVIEW:

The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013, guidelines issued by the Securities and Exchange Board of India (SEBI) and other statutory requirements. Our Management accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner the form and substance of transactions and reasonably present our state of affairs, profits and cash flows for the year.

INDUSTRY REVIEW

The global mining industry is experiencing a persistent surge in demand, coupled with rising operational costs, which continue to drive up commodity prices. The challenge of replenishing mineral reserves is intensifying due to declining ore grades, alongside hurdles such as insufficient infrastructure and a shortage of skilled workforce, both of which are essential for the sectors sustained growth. In response, governments worldwide are implementing forward-looking policies to enhance mining and mineral exploration efforts. In India, the government has taken proactive steps through the Ministry of Mines, particularly under the Mines and Minerals (Development and Regulation) Act, 1957, and its subsequent amendments, to bolster the sectors development.

RISKS AND CONCERNS:

The Company is actively pursuing the acquisition of prospecting licenses for natural stones, gold, and other minerals. These activities are inherently speculative and carry significant risks, including the need for multiple approvals and exposure to operational uncertainties. Key risks include exploration and mining challenges, potential delays in obtaining necessary approvals for exploration activities, delays in securing appropriate mineral concession licenses, discrepancies between actual resources and initial estimates, operational delays, and the availability of equipment, skilled personnel, and infrastructure. Further more, the Company relies heavily on key personnel and is susceptible to the actions of third parties, including staff, contractors, and suppliers. The Companys operations are also governed by a complex framework of government regulations, particularly those related to environmental protection and land acquisition.

The Companys future revenue from product sales will be influenced by fluctuations in the market prices of gold and other natural stones, which are subject to various external factors beyond its control. These factors include global supply and demand dynamics, consumer demand levels, international economic trends, currency exchange rate fluctuations, interest rate levels, inflation rates, geopolitical events, and other market forces.

In the absence of operational cash flow, the Company may need to depend on capital markets or private equity investments to finance its operations. The ability to raise additional funds will be contingent upon the success of current operations.

Despite these challenges, the Company and its Directors are confident in their extensive experience, access to expertise, and available capital sources, which will enable the successful development, launch, and execution of the Companys projects.

OUT LOOK AND OPPORTUNITIES:

The business prospects of the Company remain intricately tied to the broader economic conditions, both locally and globally. With the current market challenges and intense competition, projecting an optimistic business outlook for the coming year remains difficult. However, despite these challenges, the mineral exploration and mining sector continues to present significant opportunities to drive economic growth and create value for all stakeholders, including the Central and State Governments, as well as the community at large.

Midwest Gold Limited is actively pursuing opportunities in this sector by applying for new mining leases and preparing to implement the licenses for mines if awarded by the Government of India. Leveraging state-of-the-art technology and a highly skilled team of geologists, geophysicists, and mining engineers, the Company aims to contribute to substantial mineral-based economic development.

In addition to its focus on mining, the Company is engaged in the trading of imported marble and the processing of locally sourced granite blocks. These activities are designed to generate steady revenue, ensuring the Company meets its day-to-day financial requirements. By strategically positioning itself in both domestic and international granite and marble markets, Midwest Gold Limited seeks to enhance its opportunities and achieve its business objectives.

RISK MANAGEMENT:

The Company has implemented a comprehensive risk management framework to address potential risks across various aspects of its operations, including business challenges, asset vulnerabilities, and financial exposures. This framework covers competition, accidents, natural disasters, technological obsolescence, foreign currency fluctuations, and more. The management remains proactive and vigilant, continuously monitoring and mitigating any threats that could impact the companys business and operation

INTERNAL CONROL SYSTEMS AND THEIR ADEQUACY:

The philosophy we have with regard to internal control systems and their adequacy has been formulation of effective systems and their strict implementation to ensure that assets and interests of the Company are safeguarded; checks and balances are in place to determine the accuracy and reliability of accounting data. The Company has a well -defined organization structure with clear functional authority, limits for approval of all transactions. The Company has a strong reporting system, which evaluates and forewarns the management on issues related to compliance. Company updates its internal control system from time to time, enabling it to monitor employee adherence to internal procedures and external regulatory guidelines.

FINANCIAL PERFORMANCE & OUTLOOK:

Your Company has achieved a Turnover of Rs. 104.53 Lakhs excluding other income of Rs. 5.11 Lakhs when compared to Rs. 175.03 Lakhs excluding other income of Rs. 1.66 Lakhs during previous year. The operations of the Company resulted in loss of Rs. 231.20 Lakhs when compared to loss of Rs. 960.64 Lakhs during previous year.

Details of significant changes (i.e. changes amounting to 25% or more compared to the previous financial year) in key financial ratios are as follows:

The management has done well to ensure sustained operations. However, due to low revenue and higher expenditure, the operations resulted into losses. Efforts are being made to reduce the costs involved. The Management is accelerating its efforts towards profits in the ensuing financial year.

PERSONNEL:

Human wealth is the ultimate wealth for any industry. The Company recognizes this fact and understands that employees are one of the most important sources for sustained growth of any business. Quality personnel delivering their optimum potential for the organization is the key differentiator. The Company maintained good relations with its employees and there was no unrest in the Company at any point of time during the year.

CAUTIONARY STATEMENT:

Certain statements made in the management discussion and analysis report relating to the Companys objectives, projections, outlook, expectations, estimates and others may constitute ‘forward looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations whether expressed or implied. Several factors could make significant difference to the Companys operations.

These shall Include climatic, geographical, political and economic conditions affecting demand and supply, government regulations and taxation, natural calamities over which the Company does not have any direct control.