QVC Exports Ltd Management Discussions

BUSINESS OVERVIEW

Our Company is engaged in the business of dealing in ferro alloys, including but not limited to high carbon silico manganese, low carbon silico manganese, high carbon ferro manganese, high carbon ferro chrome and ferro silicon. We also engaged in the dealing in raw materials for manufacturing of steel. We have devised a unique business model, wherein we procure raw materials required for manufacturers of ferro alloys, such as, manganese ore, chrome ore, coke, and purchase their finished products, being varied categories of ferro alloys and further sell it to domestic and international steel manufacturers. We have created a unique inward and outward model, wherein we procure raw materials for a manufacturer and further sell the finished products of the same manufacturer, thereby creating a wide and reliable customer and supplier base and ability of serving manufacturers at different points of the steel supply chain.

A majority of our revenue from operations is earned from exporting our products to reputed steel manufacturers in various countries. We are also a supplier of ferro alloys for a lot of reputed Indian manufacturers and therefore in order to maintain such clientele, we are bound to ensure that the products procured by us are of utmost quality and are compliant with the quality requirements of our customers. We deploy independent inspection agencies such as Bureau Veritas, IRA, SGS etc. We also follow up with our customers to ensure that the products supplied to them is of utmost quality. If the event our products face quality issues, we ensure that corrective and preventive steps, wherein we investigate the root cause of the issue, update our customers about our analysis and change suppliers or quality inspection agencies, to ensure that such issues are not repeated. Furthermore, our Company has devised an extensive supplier selection process in order to identify and evaluate the effectiveness and quality of the products manufactured by the suppliers, reduce purchase risk, maximize overall value to the purchaser, and develop closeness and long-term relationships between buyers and suppliers. Owing to our supplier selection process, we engage with quality manufacturers of our products, in order to stand by our commitments to our customers. We also visit the mines and manufacturing units of our suppliers to ensure that the products are manufactured by following the quality practices. Owing to our commitment to quality, our Company has received a certificate of registration dated April 8, 2023 from Bureau Veritas (India) Private Limited certifying that the management system of our Company has been found to be compliant with management system standards prescribed under ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018.

Our revenues from operations for the Fiscals 2024, 2023 and 2022 were ^ 44,598.65 lakhs, ^ 20,724.19 lakhs, and ^ 12,310.14 lakhs, respectively. Our EBITDA for the Fiscals 2024, 2023 and 2022 were ^ 1,196.28 lakhs and ^ 455.82 lakhs, and ^ 251.56 lakhs, respectively. Our profit after tax for the Fiscals 2024, 2023 and 2022 was ^ 604.92 lakhs and ^ 230.32 lakhs, and ^ 123.39 lakhs, respectively.

INDUSTRY OVERVIEW

More than three years after the global economy suffered the largest shock of the past 75 years, the wounds are still healing, amid widening growth divergences across regions. After a strong initial rebound from the depths of the COVID-19 pandemic, the pace of recovery has moderated. Several forces are holding back the recovery. Some reflect the long-term consequences of the pandemic, Russias war in Ukraine, and increasing geoeconomic fragmentation. Others are more cyclical, including the effects of monetary policy tightening necessary to reduce inflation, withdrawal of fiscal support amid high debt, and extreme weather events. Despite signs of economic resilience earlier this year and progress in reducing headline inflation, economic activity is still generally falling short of pre-pandemic (January 2020) projections, especially in emerging market and developing economies.

The strongest recovery among major economies has been in the United States, where GDP in 2023 is estimated to exceed its prepandemic path. The euro area has recovered, though less strongly·with output still 2.2 percent below prepandemic projections, reflecting greater exposure to the war in Ukraine and the associated adverse terms-of-trade shock, as well as a spike in imported energy prices. In China, the pandemic-related slowdown in 2022 and the property sector crisis contribute to the larger output losses of about 4.2 percent, compared with prepandemic predictions. Other emerging market and developing economies have seen even weaker recoveries, especially low-income countries, where output losses average more than 6.5 percent. Higher interest rates and depreciated currencies have exacerbated the difficulties of low-income countries, placing more than half either at high risk of distress or already in distress. Overall, global output for 2023 is estimated at 3.4 percent (or about $3.6 trillion in 2023 prices) below prepandemic projections. Private consumption has also recovered faster in advanced economies than in emerging market and developing economies, owing to an earlier reopening in the former group facilitated by greater availability of effectivevaccines, stronger safety nets, more ample policy stimulus, and greater feasibility of remote work. These factors supported livelihoods during the pandemic, and household consumption is now broadly back to prepandemic trends. Among advanced economies, private consumption has been stronger in the United States than in the euro area, with households receiving larger fiscal transfers early in the pandemic

and spending the associated savings more quickly; being better insulated from the rise in energy prices resulting from the war in Ukraine; and feeling relatively confident amid historically tight US labor markets, which have supported real disposable incomes.

Among emerging market and developing economies, the consumption shortfall is particularly large in China, reflecting tight restrictions on mobility during the COVID-19 crisis. Divergences in labour market performance across regions broadly mirror those for output and consumption. Employment and labour participation rates are estimated to exceed prepandemic trends in advanced economies but to remain significantly below them in emerging market and developing economies, reflecting more severe output losses and much weaker social protection. Countries that had the most limited fiscal space are also those where employment shortfalls are the largest (ILO 2023). Among advanced economies, the euro area has seen larger employment gains than the United States. This may reflect more extensive use in the former of worker-retention programs modelled on the German Kurzarbeit short-time work scheme (IMF 2020), which protect workers income and allow businesses to retain firm-specific human capital, reducing the costly process of separation, rehiring, and training. In the euro area, these programs bolstered employment during the most challenging phases of the crisis and accelerated the recovery when economies reopened. Investment, on the other hand, has uniformly fallen short of prepandemic trends across regions. Businesses have shown less enthusiasm for expansion and risk taking amid rising interest rates, withdrawal of fiscal support, dimmer prospects for product demand, stricter lending conditions, and growing uncertainties regarding geoeconomic fragmentation. Higher leverage has further dampened investment which remains 3 percent to 10 percent lower across regions than had been projected before the pandemic. Moreover, the pandemic, war in Ukraine, and worsening climate shocks have contributed to a reversal in decades-long poverty reduction trends. According to World Bank staff estimates, 75 million to 95 million more people were living in extreme poverty in 2022 compared with prepandemic estimates. Spikes in food prices and related insecurities following Russias invasion of Ukraine, as well as bouts of extreme weather, have accentuated these difficulties. The global average temperature in July 2023 was the highest on record for any month, amid reports of catastrophic flooding, heat waves, and wildfires in many regions. Overall, the global prevalence of undernourishment is significantly higher than before the pandemic.

The EU introduced CBAM to prevent "carbon leakage,” ensuring that imported products face a comparable carbon cost as those produced domestically. This policy targets imports in carbon-intensive sectors (such as steel, cement, and aluminum) and incentivizes cleaner production both inside and outside the EU. The EU has also utilized safeguard measures·temporary restrictions such as quotas and tariffs·to protect European industries from sudden surges of imports that could threaten local producers. For instance, in the steel sector, the EU has renewed safeguard measures several times since 2018, citing the need to shield the industry from global overcapacity and redirected exports resulting from US tariffs. These policies reflect Europes commitment to fair trade as well as climate objectives·placing increasing regulatory pressures on exporters to the EU, particularly from emerging markets and developing economies. They form part of a wider trend where trade, environmental, and industrial policies increasingly intersect in the global economy·intensifying the need for exporters and governments to adapt to new requirements and market dynamics.

India continues to show resilience against the backdrop of a challenging global environment, according to World Banks latest India Development Update (IDU). The IDU, the Banks flagship half yearly report on the Indian economy, observes that despite significant global challenges, India was one of the fastest-growing major economies in FY22/23 at 7.2%. Indias growth rate was the second highest among G20 countries and almost twice the average for emerging market economies. This resilience was underpinned by robust domestic demand, strong public infrastructure investment and a strengthening financial sector. Bank credit growth increased to 15.8% in the first quarter of FY23/24 compared with 13.3% in the first quarter of FY22/23.

The World Bank forecasts Indias GDP growth for FY23/24 to be at 6.3%. The expected moderation is mainly due to challenging external conditions and waning pent-up demand. However, service sector activity is expected to remain strong with growth of 7.4% and investment growth is also projected to remain robust at 8.9%.

"Tapping public spending that crowds in more private investments will create more favourable conditions for India to seize global opportunities in the future and thus achieve higher growth."- Auguste Tano Kouame, World Banks Country Director in India.

"While the spike in headline inflation may temporarily constrain consumption, we project a moderation. Overall conditions will remain conducive for private investment," said Dhruv Sharma, Senior Economist, World Bank, and lead author of the report. "The volume of foreign direct investment is also likely to grow in India as rebalancing of the global value chain continues."

OPPORTUNITIES, THREATS AND CONCERN

Amid the global economic recovery, the ferro alloys and steel industry faces a complex mix of opportunities and challenges. The United States strong rebound has supported domestic steel production, but the imposition of a 25% tariff on imported steel and aluminum from March 2025 has reshaped demand dynamics. Specialty ferroalloys like ferromolybdenum and ferrovanadium are seeing reduced demand due to cost pressures, while ordinary alloys such as ferrosilicon and ferromanganese remain relatively stable. This shift presents an opportunity for Indian producers to supply bulk-grade alloys to the US, especially as American steelmakers adjust their product mix. Meanwhile, the EUs Carbon Border Adjustment Mechanism (CBAM) and safeguard measures are pushing exporters to adopt cleaner production methods. Ferroalloy producers who invest in low-emission technologies and traceable supply chains may gain preferential access to European markets, particularly in sectors like stainless steel and automotive where green credentials are increasingly valued.

However, the industry also faces significant threats. EU safeguard investigations into rising imports of silicon-metal and manganese-based alloys signal potential quotas or tariffs that could restrict access for Indian exporters. Existing antidumping duties·up to 50.7% for calcium-silicon from China·already pose a barrier. In the US, tariff confusion and inconsistent exemptions have led to unpredictable cost structures, with some alloys like ferrophosphorus facing duties as high as 145%. These measures, while aimed at protecting domestic industries, risk fragmenting global trade and increasing input costs for steelmakers. Additionally, the slowdown in global investment and construction activity·especially in China· has dampened demand for high-performance steel, affecting the pricing and profitability of ferroalloys. Producers must now navigate a landscape of shifting trade routes, regulatory compliance, and volatile raw material costs, while exploring new markets and innovating to remain competitive.

Your Company conducts its business with integrity and high standards of ethical behaviour, and in compliance with the laws and regulations that govern its business. Your Company has an established framework of internal controls in operation, supported by standard operating procedures, policies and guidelines, including self-assessment exercises. The Company time to time seek evaluating the adequacy of all internal controls and ensuring that operating and business units adhere to internal processes and procedures as well as to regulatory and legal requirements.

The Board of Directors continues to challenge the management and push for higher targets. The Boards well-rounded experience comprises individuals with experience in industry. The Board continues to provide long term direction to the Company and engages actively towards initiatives inputs on the Companys long-term vision.

The Company recognizes the importance and contribution of its human resources for its growth and development and values their talent, integrity and dedication. With the focus to develop leadership talent

from within, the Company conduct various programmes. Employee motivation is key to organization success. On these lines, the Company conducts its various social programs and motivate them. As on March 31, 2025, the Company has 14 employees.

Your Company has achieved a total income of Rs. 36,573.20 Lakh during the year under review as against Rs. 45,462.68 Lakh in the previous financial year. The net profit after tax of the Company for the year under review is Rs. 553.80 Lakh as compared to profit of Rs. 392.75 Lakh for the previous year. The net profit before tax for the year under review is Rs. 708.52 Lakh as compared to profit of Rs. 542.18 Lakhs for the previous year.

Statements in the Management Discussion and Analysis Report containing the objectives, expectations or predictions of the company may be forward-looking within the meaning of securities laws and regulations. Actual results may differ materially from those expressed in the statement. The operations of the Company could be influenced by various factors such as domestic and global demand and supply conditions affecting sales volumes and selling prices of finished goods, input availability and cost, tax laws, economic developments within the country and other factors such as litigation and industrial relations.