Raconteur Global Resources Ltd Management Discussions

OVERVIEW:

This report is an integral part of the Boards Report and covers management perspective on economic environment, industrial scenario, business performance, opportunities, threats, risks & concern, internal control etc. during the Financial Year 2023-2024. This should be read in conjunction with the Companys Financial Statements, the schedules and notes thereto and other information included elsewhere in the Annual Report. India, a treasure trove of mineral resources, unearths a staggering 95 different minerals, fueling its industries and propelling economic growth. Indias abundant reserves of metallic minerals like bauxite, chromite, and iron ore, as well as mineral fuels such as coal and lignite, position the country for signi cant economic growth. The industry has the potential to contribute to GDP growth and foreign exchange earnings, while also providing essential raw materials for various end-use industries. At the forefront of this mining powerhouse is Odisha, a state contributing over 40 percent of Indias mineral production.

ECONOMIC ENVIRONMENT:

The index of mineral production for the month of March 2024 was 156.1, which is 1.2% higher as compared to the level in the month of March 2023. The index for the entire FY 2023-24 has increased by 7.5% over FY 2022-23. Some of the non-fuel minerals showing positive growth during the month of March 2024 as compared to the corresponding month of the previous year are Copper Concentrate, Gold, Manganese Ore, Diamond, Graphite, Kyanite, Sillimanite, Limeshell, Limestone, Magnesite, etc.

Iron ore and Limestone together account for about 80% of the total MCDR

mineral production by value. Production of these key minerals in the country has exhibited high growth in FY 2023-24 as per provisional gures. The production of iron ore at 277 million metric ton (MMT) in FY 2023-24 has broken the production record of 258 MMT achieved in FY 2022-23, with a 7.4% growth. Showing a similar trend, limestone production has also surpassed the production record of 406.5 MMT achieved in FY 2022-23, increasing by 10.7% to 450 MMT in FY 2023-24.

In the non-ferrous metal sector, production of primary Aluminum metal in FY 2023-24 has broken the production record of FY 2022-23. Primary aluminum production increased from 40.73 lakh ton (LT) in FY 2022-23 to 41.59 LT during FY 2023-24, at 2.1% growth rate.

India is the 2nd largest Aluminum producer, 3rd largest lime producer and 4th largest iron ore producer in the world. Healthy growth in production of iron ore and limestone in FY 2023-24 re ect the robust demand conditions in the user industries viz. steel and cement. Coupled with the high growth in Aluminum, these growth trends point towards strong economic activity in user sectors such as energy, infrastructure, construction, automotive and machinery.

INDUSTRY SCENARIO:

Coal mining leases was nalised and approved by the government in February 2018. Since Coal India Limiteds production is unable to meet the demand of non-captive industry requirement of coal, there has been a surge in import of coal. To meet this demand and to create a market for free trade of coal in the domestic industry, commercial auction of coal blocks is a sine qua non for the country.

Moreover, coal needs for the development of the country are increasing rapidly. As per the Draft National Energy Policy of Niti Aayog, the demand for coal is expected to rise in the range of 1.3-1.5 billion tonnes by 2030.

Coal India Limited and other government companies cannot meet this demand with their production alone. It is noteworthy that China is the largest producer and consumer of coal in the world and is giving new momentum to development by extensive exploitation of its coal reserves. We are almost nearing China in terms of population and we aspire to race ahead in terms of development. It is, therefore, very important that by making extensive use of our coal deposits at the earliest, we give a new momentum and edge to the countrys development.

The earlier-than-expected end of Covid restrictions in China led to a rapid rebound in consumption-driven economic expansion. Since more than 50% of major mining commodities are consumed in China, the returning demand had a positive impact on volumes.

Miners have maintained robust investment discipline since the 2015-2016 commodity downturn, postponing investment projects when returns were uncertain. Supply and demand in major mining commodities remain balanced with no concerns about fundamental oversupply, leading to broadly unchanged short-term prices.

Nickel & Lithium discoveries world over have been receiving their fair share of attention, how many of those actually translate into commercially viable & sustainable sources needs to be seen.

OPPORTUNITIES:

The increasing use of Aluminum in global decarbonizing efforts, right from Electric Vehicles, solar panels bode well for the Companys Bauxite operations.

Ukraine has been a large global exporter of white performance minerals, the continuing con ict in the region has seen India emerge as an alternate strategic supplier of quality Kaolin products.

THREATS:

The global interest rate cycle may continue to hamper demand across economies, this in turn may lead to a sluggish demand for the Companys value added products. Furthermore, China the worlds second largest economy continues to remain under a cloud, global mineral & commodity volumes & prices are very sensitive to Chinese demand.

The continuing con ict in Ukraine may lead to higher oil prices which could

in turn have implications on in ation and on costs.

FINANCIAL PERFORMANCE:

The Financial Statements for the year ended 31st March, 2024, have been prepared in accordance with the Companies (Indian Accounting Standards) Rule, 2015 (Ind AS) prescribed under section 133 of the Companies Act, 2013 and other recognized accounting practices and policies to the extent applicable.

For the nancial year ended 31st March, 2024, revenue at a s level stood

at Rs. 171.57 lakhs with a pre-tax loss of Rs. 27.87 lakhs.

OUTLOOK:

The outlook for FY 2023-24 is set to be positive on account of two more Bauxite mines becoming operational in Guinea from the second half of the nancial year, which would enable the company to export higher volumes. The Company shall continue its constant endeavour to move up the value chain by introducing a new line of animal feed products which are value added from quality Bentonite. Furthermore, the Companys Kaolin products are consolidating its position in the overseas market making up for the supply that has been lost because of the turmoil in Ukraine.

RISK & CONCERNS:

The mining industry remains fraught with several challenges such as commodity cycles, environmental risks, regulatory & compliance risks; the Company has a well-oiled risk management apparatus.

Any turbulence in large commodity hungry Asian economies such as India

and China could signi cantly affect demand for the companys products.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY:

In keeping with the size and nature of its business and complexity of its operations, commensurate internal control procedures are implemented by the Company. The guidelines are set by the Audit Committee Members and Board of Directors who are responsible for the internal control system. They carry out periodic reviews of the internal audit plan, verify the adequacy of the control system, marks its audit observations, and monitors the sustainability of the remedial measures.

On the recommendation of the Audit Committee, the Company appointed

th

28 February, 2024 as the Internal Auditors of the Company for the nancial year 2023-2024. Observations made in internal audit reports on business processes, systems, procedures and internal controls and implementation status of recommended remedial measures by the Internal Auditors, are presented half yearly to the Audit Committee.

The Companys internal control system is designed to ensure management ef ciency, measurability and veri ability, reliability of accounting and management information, compliance with all applicable laws and regulations, and the protection of the Companys assets. This is to timely identify and manage the Companys operational, compliance-related, economic and nancial risks.

RESEARCH & DEVELOPMENT:

Companys Research and Development (R&D) capabilities are playing an important role towards furthering your companys vision and goals. Its Knowledge & Innovation Center at Bhuj, Gujarat, has come up with several marketable world-class value-added products. During the year, the R&D Centre has done extensive work on advanced refractory materials and on certain B2C value-added products.

HUMAN RESOURCES DEVELOPMENT:

Human Resource is Companys greatest asset and your Company believe that in the roadmap for building the future, employee involvement is crucial to be continually creative and drive organizational excellence. The organizational excellence depends on the quality of people employed. Therefore, your Company focus on the culture of recognition, innovation in technology, engagement of right people for the right job and process improvements. Your companys ethics, principles and ideals have fostered a positive work culture among the employees across all its plants and of ces.

The employees are treated with respect and dignity at all times and senior management is easily accessible for counseling and redressal of grievances.

KEY FINANCIAL RATIOS:

The Key Financial Ratios for FY 2023-2024 and FY 2022-2023, along with

explanation for signi cant changes (change of 25% or more) are as follows:

Particulars	FY 2023-24	FY 2022-23	% Change
Debtors Turnover	5.75	0.05	11,101.57
Inventory Turnover	0.00	0.00	0.00
Interest Coverage Ratio	0.00	-11.52	100.00
Current Ratio	37.26	4.03	823.75
Debt Equity Ratio	0.00	0.02	99.68
Operating Pro t Margin	0.16	-27.05	100.60
Net Pro t Margin	0.65	-29.40	102.20
Return on Net Worth	10.20	-21.85	146.68

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include, among others, downtrend in the industry, economic conditions affecting demand/supply and price conditions in the domestic market in which the Company operates, changes in political and economic environment in India, changes in the Government regulations, tax laws and other statutes, litigations and incidental factors.