Owais Metal and Mineral Processing Ltd Management Discussions

We at " Owais" are an efficient and effective manufacturer and processor of various metals and minerals. Uniquely diversified across the broad spectrum of natural resources with main interests in manufacturing and processing metal and minerals. The company is engaged in the manufacturing and processing of the following products.

Manganese Oxide (MNO)

MC Ferro Manganese

Manufacturing of Wood Charcoal

Processing of Minerals such as Ferro Alloy, Quartz and Manganese Ore

Waste to Wealth, where the company manufactures rare earth metals from waste.

Our products like Manganese Oxide is used in fertilizer industry and is also used by the Manganese Sulphate Plants. Manganese Ore is used in manufacturing of Ferro Manganese, Silico Manganese, Manganese Oxide, Batteries and other Ferro products also it can be directly sellable in the market. MC Ferro Manganese is used in steel and casting industries, as it assists in removing sulphur from steel and improve properties, like durability, machinability and malleability. It can deoxidize molten metal. Our Wood Charcoal is used in furnaces of industries which requires high heat for their manufacturing process such as Steel industry. Processed Quartz is being used hotel industry, Ferro Alloys industry, tiles & ceramic industry, glass industry and industry of interiors & furniture. As on date of filing Prospectus our major products are being supplied to the state of Madhya Pradesh, Maharashtra Punjab, Delhi and Gujrat.

Our company has a manufacturing unit for wood charcoal at Rajasthan and Meghnagar. Processing of Quartz has been done through our Meghnagar plant.

Our factory is situated in Meghnagar which is a Strategic location as it is situated on the border of Gujarat, Madhya Pradesh and Rajasthan. Gujarat, Madhya Pradesh and Rajasthan are the three major consumers of Manganese oxide and MC Ferro Manganese. This location helps us in minimize our transportation cost and labour cost. We try to attain maximised output of our products through our operational excellence, processing capability and state of the art infrastructure. We focus on large scale expansion of product portfolio in India and aims to emerges as a well-known natural resource processing company. For manufacturing and processing of minerals and metals both machine and labour are required. We have a semi-automatic plant and machines available and also, we work in the Tribal area where there is sufficient availability of cheaper labours. The company has sufficient land and factory shed for manufacturing and processing of metals and minerals with other necessary infrastructural facilities such as power, water, labour etc.

Prior to incorporation of the company, the business of the Company was carried on in the name M/s Owais Ali Overseas, which was a sole proprietorship concern of our promoter Mr. Saiyyed Owais Ali. Initially company rented the manufacturing facility and started the production. The company wanted to test the markets before starting the facility of its own. After a successful a run in the rented premises, the company in the year 2023 bought the entire manufacturing facility vide agreement dated June 26, 2023 with M/s Growmore Enterprises Private Limited and with Azad Enterprises for Manufacturing of Manganese oxide situated at Plot No. 57 & 58A, AKVN, Industrial Area, village Meghnagar, Jhabua, Madhya Pradesh and situated at Plot No. -58, AKVN, Industrial Area, village Meghnagar, Jhabua, Madhya Pradesh respectively. Later in the financial year 2022 - 2023 the company expanded in the field of manufacturing of Wood Charcoal and started the processing of Quartz.

One of our Promoter Mr. Saiyyed Owais Ali is a young qualified civil engineer having sufficient experience of mining, manufacturing and construction business. This young dynamic individual with his innovative knowledge skills will undoubtedly take the company to seventh sky heights.

INDIAN METALS & MINING INDUSTRY

INTRODUCTION

India holds a fair advantage in production and conversion costs in steel and alumina. Its strategic location enables export opportunities to develop as well as fast-developing Asian markets.

Minerals are precious natural resources that serve as essential raw materials for fundamental industries, so the growth of the mining industry is essential for the overall industrial development of a nation. The vast resources of numerous metallic and non-metallic minerals that India is endowed with serve as a foundation for the expansion and advancement of the nations mining industry. India is largely self-sufficient in metallic minerals including bauxite, chromite, iron ore, and lignite as well as mineral fuels like coal and lignite. The industry has the potential to significantly impact GDP growth, foreign exchange earnings, and give end-use industries like building, infrastructure, automotive, and electricity, among others, a competitive edge by obtaining essential raw materials at reasonable rates.

Rise in infrastructure development and automotive production are driving growth. Power and cement industries are also aiding growth for the sector. Demand for iron and steel is set to continue given the strong growth expectations for the residential and commercial building industry.

MARKET SIZE

In April-December 2024 period, the production of crude steel stood at 112.011 MT and that of finished steel was 107.192 MT.

During FY25 (April-December), export of Finished Steel stood at 3.600 MT. India was a net importer of finished steel with overall trade deficit of 3.824 MT

India is expected to surpass its steel production capacity target of 300 MT by 2030, reaching an estimated 330 MT.

In CY25 January-April, the production of crude steel stood at 53.2 MT and Indias finished steel imports fell 11.3% year on year in April to 0.5 million metric tons following a decline in shipments from China and Japan.

Indias iron ore production increased by 0.18% to 277.83 million metric tonnes (MMT) during FY25 compared to 275 MMT in the same period of FY24.

India is the second-largest producer of aluminium globally. The production of primary aluminium reached 42 lakh tons in FY25 as compared to 41.5 lakh tons in the previous year.

In FY25, mineral production is estimated at Rs. 1,41,061 crores (US$ 16.40 billion).

GVA from mining and quarrying stood at Rs. 3,47,271 crore (US$ 40.69 billion) in FY25, as per the first revised estimates.

The construction sectors Gross Value Added (GVA) at current prices was estimated at Rs. 15,59,160 crore (US$ 179.5 billion) for FY25* against Rs. 14,36,081 crore (US$ 165.3 billion) for FY24 as per the provisional estimates.

The index of mineral production of the mining and quarrying sector for FY25 was at 124.9, 3.1% lower compared to FY24, which was 128.9.

INVESTMENTS / DEVELOPMENTS

Some of the investments / developments in the Metals & Mining sector in the recent past are as follows:

Between April 2000-December 2024, FDI inflows in the metallurgical industry stood at Rs. 1,10,062 crore (US$ 18.06 billion), followed by the mining Rs. 21,525 crore (US$ 3.50 billion), diamond & gold ornaments Rs. 8,905 crore (US$ 1.04 billion), and coal production Rs. 119 crore (US$ 27.73 million).

In January 2025, the Ministry of Steel has introduced the PLI Scheme 1.1 for specialty steel, covering five product categories, which aligns with the existing PLI Scheme. This initiative aims to encourage greater participation in response to industry requests for relaxation. The PLI Scheme 1.1 will be open for applications from January 6 to January 31, 2025, and will be implemented from FY26 to FY30.

India and Kazakhstan have launched IREUK Titanium Limited, a joint venture to produce Titanium Slag in India, marking Indias first venture in Central Asia. The company will convert low-grade Ilmenite into high-grade titanium feedstock, aiming to enhance the titanium value chain in India and create jobs in Odisha.

As per data from the Ministry of Statistics and Programme Implementation (MOSPI), Indias mining GDP increased from Rs. 76,877 crore (US$ 9.25 billion) in the third quarter of FY23 to Rs. 82,680 crore (US$ 9.95 billion) in the third quarter of FY24.

Southeastern Coalfields Limited (SECL), a subsidiary of Coal India in Chhattisgarh, has reached a milestone with its Gevra and Kusmunda coal mines ranking 2nd and 4th on WorldAtlas.coms list of the worlds largest coal mines. Located in Korba district, these mines together produce over 100 million tons of coal annually, accounting for about 10% of Indias total coal production.

India is experiencing a construction boom driven by a growing housing economy and significant government infrastructure investments. The country is projected to become the third-largest construction market in the world, following China and the US, by 2025.

In January 2024, India and Argentina signed an agreement to undertake the exploration and development of five lithium blocks, enhancing Indias efforts in sourcing lithium. Khanij Bidesh India Limited (KABIL) has obtained exploration and exclusivity right for these five blocks.

In February 2024, an MoU has been signed between India and the Republic of Cote dlvoire, for collaboration in field of Geology and Mineral Resources.

In March 2024, Karnataka and Rajasthan initiated the auction of Exploration Licences (EL) for critical and deep-seated minerals, marking the first such auction in India. Under the amended Mines and Minerals (Development and Regulation) Act, 1957, introduced by the MMDR Amendment Act, 2023, 29 critical minerals are eligible for exploration and mining concessions.

In January 2023, Vedanta announced that its board had approved the sale of its international zinc assets in South Africa and Namibia to subsidiary Hindustan Zinc (HZL) for US$ 2.98 billion.

In February 2023, Tata Steel and Central Building Research Institute (CBRI), a constituent of the Council of Scientific and Industrial Research (CSIR), signed an MoU to collaborate on research, academic growth, and sustainable solutions in mining.

In February 2023, ArcelorMittal - Nippon Steel is investing Rs. 60,000 crore (US$ 7.3 billion) to expand its steelmaking capacity in Hazira to 15MT a year from 9MT.

In February 2023, NMDC signed an agreement for collaborative research with CSIR-IMMT, Bhubaneswar on "Feasibility Studies for Preparation of Fused Magnesia from Kimberlite Tailings" at its Head Office in Hyderabad.

In February 2023, JSW Group announced to build a steel plant in Andhra Pradeshs YSR Kadapa district with an investment of Rs. 8,800 crore (US$ 1 billion).

In February 2023, Essar Capital Limited, investment manager of Essar Global Fund Limited, announced to set up steel plants in Odisha and a facility to import liquefied natural gas (LNG) at Hazira in Gujarat.

In March 2023, MOU with detailed collaborative framework was between KABIL, India, and Critical Mineral Office (CMO), Department of Industry, Science and Resources (DISER), Govt. of Australia for carrying out joint due diligence and further joint investment in Li & Co mineral assets of Australia.

In July 2023, the Union Cabinet approved amendments to the Mines and Minerals (Development and Regulation) Act-1957 to allow the mining of lithium and other minerals.

On August 3, 2023, the Rajya Sabha passed the Offshore Areas Mineral (Development and Regulation) Amendment Bill, 2023 which seeks to make amendments to the Offshore Areas Mineral (Development and Regulation) Act, 2002 (OAMDR Act). The Bill was passed by Lok Sabha on August 1, 2023.

In July 2022, Hindalco Industries Limited has signed an MoU with Phinergy and IOC Phinergy Private Limited (IOP) on R&D and pilot production of aluminium plates for Aluminium-Air batteries, and recycling of aluminium, after usage in these batteries.

In August 2022, Tata Steel signed a MoU with the Government of Punjab for setting up a 0.75 MTPA long products steel plant with a scrap-based electric arc furnace.

In September 2022, exports of mica, coal & other ores and minerals including processed minerals stood at US$ 426.32 million exhibiting growth of 7.31% as compared to September 2021.

In October 2022, Welspun Metallics Limited has forayed into Steel manufacturing as a part of the companys overall business

growth and diversification strategy by launching a state-of-the-art Greenfield manufacturing facility in Anjar, Gujarat.

In October 2022, Coal India Limited (CIL) signed a MoU with Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUNL), for setting up 1,190 MW solar power project

Coal production from captive mines increased by 18.67% y-o-y in FY24 (April- September 2023) and contributed 14.96% to the total coal production.

Innovative mineral exploration activities using state-of-the-art technology by Geological Survey of India (GSI), stepped up efforts by Khanij Bidesh India Limited (KABIL) to source strategic minerals from countries like Australia, Argentina, and Chile.

Three Indian state-run companies, National Aluminium Co Ltd, Hindustan Copper Ltd and Mineral Exploration Corp formed a joint venture to buy mining assets overseas that have minerals such as lithium and cobalt, which are used in the manufacture of batteries for electric vehicles.

As per data from the Ministry of Statistics and Programme Implementation (MOSPI), Indias mining GDP increased from Rs. 76,877 crore (US$ 9.25 billion) in the third quarter of FY23 to Rs. 82,680 crore (US$ 9.95 billion) in the third quarter of FY24.

In FY23, Vedantas aluminium division will focus on backward integration and will put two of its mines in Odisha into production.

Iron and steel imports stood at US$ 14.17 billion during April-December 2023.

In FY24 (until January 2024), the combined index of eight core industries stood at 156.0 driven by the production of coal, refinery products, fertilizers, steel, electricity, and cement industries.

NMDCs cumulative iron ore production (April-January FY24) stood at 36.32 MT as compared to 31.14 MT (April-January FY23).

As of January 2024, Indias total installed electricity generation capacity stood at 429.96 GW.

Vedanta Limited is planning a US$ 20 billion investment across its operations, including increase silver production and steel capacity.

GOVERNMENT INITIATIVES

The Government of India has adopted few initiatives in the recent past, some of these are as follows:

In the Union Budget 2025 ?€“ 2026, capital investment outlay for infrastructure is being increased by 11.1% to Rs. 11.2 lakh crore (US$ 129.0 billion). To encourage higher private participation, the government has proposed various measures.

In February 2024, the Union Cabinet approved the amendment to the Mines and Minerals (Development and Regulation) Act,1957 specifying royalty rates for 12 critical minerals, thus completing the rationalization process for all 24 strategic minerals. This move aims to streamline the mining sector and auction processes, aligning with recent amendments to the MMDR Amendment Act, 2023.

In December 2023, the Ministry of Mines proposed capping performance security and upfront amounts for mining critical minerals to attract more bidders. Currently based on a percentage of the Value of Estimated Resources (VER), the move aims to reduce barriers to participation in auctions and expedite the process for mining leases.

In October 2023, the Union Cabinet approved the amendment of the Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957, specifying royalty rates for three critical minerals: Lithium, Niobium, and Rare Earth Elements (REEs) paving the way for the auctioning of blocks for these minerals, as outlined in the MMDR Amendment Act, 2023.

The government plans to monetize assets worth Rs. 28,727 crore (US$ 3.68 billion) in the mining sector over 2022-25.

In 2022, PLI Scheme for domestic production of specialty steel has been approved with an outlay of Rs. 6,322 crore (US$

762.4 million) by the Cabinet.

Import duty on Anthracite / Pulverized Coal Injection (PCI) coal, Coke, and Semi-coke and Ferro-Nickel were reduced to zero.

Export duty on Iron ores / concentrates and iron ore pellets was raised to 50% and 45%, respectively.

In addition, 15% export duty was imposed on pig iron and several steel products.

District Mineral Foundation (DMF) has been established in 622 districts of 23 States and a total of Rs. 71,128.71 crore (US$

8.5 billion) has been collected till October 2022 under DMF.

In November 2022, the government removed export duties on steel and stainless steel to strengthen the nations steel sector and allow it to firmly establish its position in the global market.

The government plans to monetise assets worth Rs. 28,727 crore (US$ 3.68 billion) in the mining sector over 2022-25.

The Ministry of Mines of the Government of India has signed MoUs with different nations.

The Ministry of Mines notified the Mineral Conservation and Development (Amendment) Rules in November 2021 to provide rules regarding conservation of minerals, systematic and scientific mining, and development of minerals in the country for environment protection.

Steel Authority of India Ltd. (SAIL) and Central Public Sector Enterprises (CPSEs), under the Ministry of Steel, supplied 48,200 tonnes of steel for the Purvanchal Expressway, which was inaugurated by Prime Minister Narendra Modi on November 16, 2021.

The National Steel Policy aims to boost per capita steel consumption to 160 kgs by 2030-31. The government has a fixed objective of increasing rural consumption of steel from the current 19.6 kgs per capita to 38 kgs per capita by 2030-31.

ROAD AHEAD

There is a significant scope for new mining capacities in iron ore, bauxite and coal and considerable opportunities for future discoveries of sub-surface deposits. Infrastructure projects continue to provide lucrative business opportunities for steel, zinc, and aluminium producers. Iron and steel make up a core component for the real estate sector. Demand for these metals is set to continue given strong growth expectations for the residential and commercial building industry.

The Government of India has also helped in the development of the metals and mining sector in India by launching key policy initiatives. The National Mineral Policy, which was approved by the government in February 2019, has ensured improved regulation and enforcement, more transparency, balanced social and economic growth, and sustainable mining techniques. The policy grants industry status to the mining activities and boost private sector funding.

Additionally, it aims to facilitate the merger and acquisition of mining companies, entice private sector involvement in exploration, and permit the transfer of mineral corridors created specifically for metals and mining leases. In the future, both increased domestic demand and exports are projected to play significant roles in driving the industrys expansion and its contribution to GDP growth in a post-covid environment.

SWOT ANALYSIS OF OUR COMPANY

STRENGTHS	WEAKNESSES
Promoters are having due experience of the very industry. Already established & satisfactorily operated business so far, since last 5 years. Management has proved its strength to manage the business by available resources including finance. Financial discipline and back up of the company is found satisfactory experienced by the banks. The all locational advantages and internal and external facilities and amenities are also available to the project proposed. Already having sufficient infrastructural facilities including plot of Land, Power connection, Manpower, etc. Steady and continuous Sales Growth, since inception.	Requirement of Finance to cater on National Level. Limited Market Share & presence in few segments. Competition prevails in the open market.
OPPORTUNITIES	THREATS
Overall encouraging Govt. Policies for industries, especially Fertilizer industry. Demand scenario of the products is encouraging in Domestic as well as in international market. The established relationship with existing Customers will be proposed to be extended further and further and additional demand of products will facilitate the modernization and production thereby.	The company will have to constantly be aware in respect to quality, timings & pricing to prevent the threat from existing competitors as well of future. The Raw Material prices are volatile, mainly affected by Domestic Pricing and any change in near future may affect the economics of the Company as well as the projections. Changes in government policies. Rising labour wages.

SEGMENT ?€“ WISE OR PRODUCT WISE PERFORMANCE

The Company has delivered a satisfactory financial and operating performance for 2024 - 2025. The total revenue of your company from operations stood at ?‚? 21,341.06 Lakhs for the financial year ended March 31, 2025 as against ?‚? 8,004.73 Lakhs for the previous financial year. The Profit before tax from operations is ?‚? 6,326.60 Lakhs for the current year as against ?‚? 2,066.78 Lakhs in previous financial year. After making provision for tax, the net profit of your company is ?‚? 4,701.91 Lakhs as against ?‚? 1,546.61 Lakhs in the previous financial year. This growth is attributed to our strategic initiatives / investments and market positioning.

RISK AND CONCERN

The Company operates in the Challenging business environment and exposed with following risks which includes economic risk, competition risk, market risk, human resources risk and regulatory risk etc. Any unfavourable changes in the government policies and economic condition of the Indian & Global financial market impact the growth of the Company. In this competitive world, your Company faces competition from existing players and new entrants.

However, we have always considered competition as a favourable factor since it drives us further towards growth. The Company with its well diversified service offerings, nationwide reach, coupled with the latest technological infrastructure and strong risk management systems will facilitate continuous growth in the coming years Availability of skilled man power is the most important factor for the growth of the Company, your Company try to retain its skilled man power.

At a macro level, besides adverse geopolitical developments and rising global financial instability. These could affect the favourable combination of growth and inflation outcomes currently anticipated.

At the Micro level, there are "potential risks" to growth that arise out of the El Nino condition (unusual warming of surface waters in eastern Pacific Ocean), which could create drought conditions and lower agricultural output and raise prices.

Further technology expansions amongst the financial market intermediaries is a concern and can thus impact the performance of the company. The company is primarily exposed to interest rate risk, liquidity risk and operational risks.

During the year under review, both Financial as well as operational performance of the Company and the Group as a whole, has been affected for the reasons mentioned above in the segment wise performance.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUECY:

The Companys internal control systems are adequate, operating effectively and are commensurate with the size of business and the same is provided through competent management, implementation of standard policies and processes, maintenance of an appropriate audit program with internal control environment, effective risk monitoring and management information systems. Moreover, the Company continuously upgrades these systems in line with the best available practices.

The Board of the Company has constituted an Audit Committee, which is headed by a Non-Executive Independent Director. The Audit Committee periodically reviews internal audit reports and brings to the notice of the Board any significant process deviations.

ANALYSIS OF FINANCIAL PERFORMANCE / DISCUSSION OF FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The summary of previous two years financial results are given below:-

(?‚? in Lakhs)

FINANCIAL HIGHLIGHTS	2024 - 2025	2023 - 2024
Income from operations	21,341.06	8,004.73
Net Profit after Tax	4,701.91	1,546.61

OPERATIONAL PERFORMANCE

The Company continued to focus on improving operational efficiency leading to better returns for the shareholders. Further, the company has significantly enhanced its operational performance by establishing prudent risk management framework.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONSHIP FRONT, INCLUDING NUMBER OF PEPOLE EMPLOYED

Human resource practices and policies at OWAIS METAL AND MINERAL PROCESSING LIMITED (earlier known as Owais Metal and Mineral Processing Private Limited and Owais Ali Overseas Private Limited) ensure that all employees, wherever they work, whatever their role is, are always treated equally, fairly and respectfully. We maintain consistent and transparent diversity policies.

Our human resource team believes in personnel management, which involves planning, organizing, directing and controlling of the recruitment and resource management, training & development, compensation, integration and maintenance of people for the purpose of contributing to organizational, individual and social goals.

People power is one of the pillars of success of company. As on March 31, 2025, the Company employs 101 employees. Going ahead, the Company aims to retain and develop the existing employees and align their goals with the common business vision and mission.

THE DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

During the financial year, the details of significant change in the key financial ratios i.e. change of more than 25.00 % as compared to the previous year along with the detailed explanation is summarized below on standalone basis:

SR. NO.	KEY FINANCIAL RATIOS	2024 - 2025	2023 - 2024	CHANGES IN %	REASONS FOR CHANGE
1	Debtors Turnover Ratio	3.82	7.43	-48.68%	Due to increase in working capital cycle
2	Inventory Turnover Ratio	3.46	3.51	-1.26%	Due to increase in working capital cycle
3	Interest Coverage Ratio (in times)	36.17	13.71	164.0%	Due to increase in working capital cycle
4	Current Ratio	2.18	3.80	-42.65%	Due to an increase in debtors and investments
5	Debt Equity Ratio (in times)	0.23	0.20	14.60%	Due to high profitability which increases the reserve
6	Operating Margin (in %)	0.297	0.293	3.20%	Profitability increases due high sell volume
7	Net Profit Margin (in %)	0.22	0.19	14.03%	Profitability increases due high sell volume

The Return on Net Worth during the financial year 2024 - 2025 was 42.10% as compared to 23.64% in financial year 2023 - 2024. The Return on Net Worth has improved compared to the previous financial year, driven by increased profitability and better operational efficiency. This positive change reflects our strategic initiatives and strong market position.

CAUTIONARY STATEMENT

Statement made in the Management Discussion and Analysis describing the various parts may be "forward looking statement" within the meaning of application securities laws and regulations. The actual result may differ from those expectations depending upon the economic conditions, changes in Government regulation and amendments in tax laws and other internal and external factors.