O.P Chains Ltd Management Discussions

<dhhead>MANAGEMENT DISCUSSION AND ANALYSIS REPORT</dhhead>

In compliance of the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations 2015”), Please find Management Discussion and Analysis Report forming part of Annual Report

1. INDUSTRY STRUCTURE & DEVELOPMENTS

Company recognizes operations as an important source of competitive advantage and further believes in continually striving for higher and better levels of quality not just in its products, but also in its operations, without losing sight of its commitments towards the environment and communities where it operates. A host of initiatives are continually rolled out by the company to improve productivity while reducing its energy usage.

Company is committed to create an open and transparent organization that is focused on people and their capability and fostering an environment that enables them to deliver superior performance.

Company deals in the products which are of international standards in terms of purity. One of our strengths is that we practice fair dealings in or transactions and provide quality products. We believe that an intricacy of our quality products enables us to get better margins on the products traded by us and develop long term relations.

2. OPPORTUNITIES AND THREATS

The consumer landscape has been continuously evolving and one has to keep pace with the changing trends in order to win consumer confidence.

The Indian silver firms are reported to be going through a transition phase, upgrading their technologies to conform to international standards. The short supply of gold in the country and the rising prices of the yellow metal have in a way benefited silver jewelry manufacturers.

The economic outlook provides the most important basis for determining the prospects for global silver industrial demand, while prices are generally more of a secondary concern. In terms of the former, healthy western market growth over the past decade has been an important contributory factor to the strength in silver industrial demand.

Currency volatility, slowdown in category growth rates and unpredictable weather patterns are some of the threats to the company’s prospects.

3. SEGMENT-WISE/ PRODUCT-WISE PERFORMANCE

Your Company is engaged in Bullion trading of Gold and Silver and other precious metals. Your Company deals in bullion, specializing in bars and coins of various precious metals like Gold and Silver. We are bullion dealer, offering wholesale delivery of bullion to domestic users i.e. ornament manufacturers, goldsmiths, jewelers and semi-wholesalers.

Catering to majority silver and gold requirements of Agra and having strong and established presence in wholesale bullion market of Agra.

Your Company operate as an important intermediary in bullion trading industry whereby we purchase materials such as Gold, Silver and other precious metals etc. from State Trading Corporation of India, Hindustan Zinc Limited, ICICI Bank Limited, Punjab National Bank Limited and SB Ornaments Pvt. Ltd., and supply the same to customers in the Jewelry industry to various jewelers and related business.

The Product Portfolio offers mainly Gold and Silver, etc. according to customer specifications.

In order to consolidate the presence of your company across Uttar Pradesh and replicate our business model in other states, your company intend to increase our foothold in other markets in and around Uttar Pradesh (which have huge untapped potential) and other states as well, by having our team of localized marketing personnel, for our marketing and sales operations.

4. OUTLOOK

In order to consolidate the presence of your company across Uttar Pradesh and replicate our business model in other states, your company intend to increase our foothold in other markets in and around Uttar Pradesh (which have huge untapped potential) and other states as well, by having our team of localized marketing personnel, for our marketing and sales operations.

5. RISKS AND CONCERNS

Your Company is well aware of the risks and challenges and has put in place mechanisms to ensure that they are managed and mitigated with adequate timely actions. One of the key risks faced by the Company in today’s scenario is the continued inflationary trend which is not only increasing cost pressures, but may also lead to demand compression for its products. Increase of imitation/smuggled products can hamper our growth. The input Cost Pressures were managed effectively. Growth rates across quarters have been consistent and reflect your company’s sound business strategies and strong execution capabilities. A slowdown in overall economic growth can lead to pressure on disposable incomes and spending power of people.

To overcome the hurdles posed by a challenging external environment, Company has been taking proactive measures in portfolio, product and channel optimization. The focus of the Company is on ensuring deeper penetration and more effective distribution of products.

Your Company increased its efforts to improve productivity by deploying various cost reduction and energy saving initiatives, resulting in a reduction in manufacturing costs to lower levels.

6. INTERNALCONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has a proper and adequate system of internal control including internal financial controls. Your Company has an Audit Committee headed by a non-executive independent director, inter-alia, to oversee your Company’s financial reporting process, disclosure of financial information, and reviewing the performance of statutory and internal auditors with management. The internal control system, including internal financial controls of the Company, is monitored by an independent internal audit team, which encompasses examination/ periodic reviews to ascertain adequacy of internal controls and compliance to Company’s policies. Weaknesses noted along with

agreed upon action plans are shared with audit committee, which ensures orderly and efficient conduct of the business and effectiveness of the system of internal control. The auditfunction also looks into related party transactions, preventive controls, investigations, as well as other areas requiring mandatory review per applicable laws. The powers of the Audit Committee, inter-alia, include seeking information from any employee, obtaining outside legal or other professional advice and investigating any activity of the Company within the committee’s term of reference.

Your Company’s internal audit department verifies the information of the financial statements as well as the compliance with your Company’s policies to maintain accountability and ensuring controls are in place to safeguard of all its assets and correctness of accounting records. The internal audit department shares regular updates regarding the work done, coverage, weaknesses noted and other relevant issues with appropriate management levels including Audit Committee. Observations/ weaknesses noted from time to time are suitably acted upon and followed up at different levels of management. The internal control is supplemented by an extensive program of audits and periodic review by the management.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year under review, the turnover of the Company is Rs. 13,58,88,996.37/- in comparison with the last year Rs. 1,48,68,801.50/-. The profit after tax of the company is Rs. 1,85,75,134.19/-. Despite high inflationary and cost pressures throughout the year, company capitalized on every available opportunity and undertook strategic initiatives coupled with to exploit the full industry potential, besides making efforts towards cost reduction and improved efficiency which enable the company to grow reasonably well.

In continuation of its efforts towards maintain right inventory of different jewelries and accessories. Out-of-stock or overstock is a problem for business. Any delay or in ordering or negligence of the required items in the stock can result in losses. Focusing on real-time status of the inventory in the store and having information of stock levels can give an edge to the retailers as, if the stock in one store is not moving forward, it can be transferred to other stores for better sales. The optimization can be done with the help of analytics and data about trends and demand and supply scenarios.

8. HUMAN RESOURCES

‘Humankind is the Greatest Resource’

The Company’s endeavor has always been to build an organization where its people are always engaged and empowered to do their best. The Company’s culture is focused on customer-centricity collaborative team work, result orientation, entrepreneurial mindset and developing people.

Owing to the competitiveness and diversity of Indian markets, the Company strives to ensure adequate succession planning of its leadership talent pool. In line with the Company’s focus on employee empowerment, it has also designed new ‘Ways of Working’ to deliver high operational excellence and governance.

The Company recognizes and appreciates the contribution of all its employees in its growth path. Our Company strives to retain talent by facilitating career growth through job enrichment and empowerment, as it believes that the pool of the human resource is the biggest asset of the

organization. Your Company maintains a cordial relationship with its employees through a constructive work environment in support of productive gains.

9. ACCOUNTING RATIOS

Following are important ratios comparing performance of financial year ended on 31.03.2025 and financial year ended on 31.03.2024:

SrT No Ratio	Numerator	Denominator	2025	2024	Variance	Reason for variance
a Current Ratio	Total Current Assets	Total Current Liabilities	17.2 5	48.07	-64.11%	Due to Increase in Liabilities
b Debt-Equity Ratio	Total Borrowings	Total Equity	0.00	0.00
c Debt Service Coverage Ratio	Earning for Debt Service = Net Profit after taxes + Noncash expenses + Interest on debt	Debt service = Interest + Principal repayments	0.00	0.00
d Return on Equity Ratio	Profit after tax	Average Total Equity	39.63%	27.12%	46.14%
e Inventory Turnover Ratio	Purchases of stock in Trade + Change in Inventory	Average Stock	2.00	0.52	284.62%	Due to Decrease in Inventory
f Trade Receivable Turnover	Revenue from Operations	Average Trade Receivables	0.53	0.00		Due to Decrease in Revenue from Operation
g Trade Payables Turnover Ratio	Net purchase = Purchase of Stock in trade + Purchase of Raw Material	Trade Payables	0.00	0.00
h Net Capital Turnover Ratio	Revenue from Operations	Working Capital = Total Current Asset - Total Current Liabilities	0.54	0.62	-11.88%	Due to Decrease in Revenue from Operation
i Net Profit Ratio	Profit after tax	Turnover	33.17%	13.67%	142.64%	Due to Decrease in Revenue from Operation
j Return on Capital Employed	Earning before finance cost and tax	Capital employed = Total Equity + Debt	9.70%	6.73%	43.99%	Due to decrease in earnings.
k Return on Investment	Interest Income + Dividend Income + Profit on sale of Mutual Fund & Shares	Average Investments	NA	NA		NA

10. CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the O.P. Chains Limited objectives, projections, estimates and expectations might be construed as ‘forward looking statements’ within the meaning of applicable laws and regulations.

Actual results may differ substantially or materially from those expressed or implied. Important developments that could affect the Company’s operations include a downward trend in the industry, rise in input costs, exchange rate fluctuations and significant changes in political and economic environment, environment standards, tax laws, litigation and labor relations.

To ensure our long-term corporate success, company implements risk management system which includes recording, monitoring and controlling internal enterprise business risks and addressing them through informed and objective strategies.