South West Pinnacle Exploration Ltd Management Discussions

I. INDUSTRY OVERVIEW

The global mineral and energy exploration industry is entering a super cycle, fueled by the rapid transition to clean energy, reindustrialization, and the race to secure critical raw materials. From copper and coal to lithium and rare earths, exploration has become a strategic priority for nations and corporations alike.

a. Global Market Momentum: The global exploration services industry is projected to cross USD 20 billion by 2030, driven by decarburization, electrification, and supply chain realignment. Global mining giants and national governments are scaling investments to secure long-term reserves of copper, cobalt, gold, and battery minerals. Regions such as Africa, GCC, Central Asia, and South America are emerging as high-priority zones for greenfield exploration.

b. In Indias Untapped Geological Potential: India has one of the largest unexplored geological basins globally — rich in coal, iron ore, bauxite, and polymetallic deposits. Despite vast reserves, exploration depth remains low, offering strong upside for drilling, seismic surveys, and geophysical studies. Growing domestic demand for power, infrastructure, EVs, and renewables is accelerating the need for reliable mineral sourcing.

c. South West Pinnacles Strategic Advantage: Among the few Indian companies with a fully integrated end to end exploration portfolio: CBM exploration and production, aquifer mapping, seismic surveys, coal &mineral drilling, and mining services. International presence through joint ventures in Oman, executing large-scale copper and polymetallic mining contracts. Proven execution across 150+ projects, with over 2.8 million meters drilled, and a zero Lost Time Injury (LTI) record — a rare operational benchmark.

d. Key Industry Tailwinds:Global policy shift toward resource nationalism and localization is pushing early-stage exploration to the forefront. Rising ESG and environmental due diligence standards are boosting demand for structured, scientific exploration. Advancements in seismic imaging, AI-based geological modeling, and precision drilling are transforming the cost-efficiency of exploration.

e. Market Outlook :Indias exploration services industry is valued at INR 15,000— INR 18,000 Cr, with an expected 8—10% CAGR growth trajectory. With a presence across both brownfield and greenfield exploration, South West Pinnacle is ideally positioned to ride this global exploration wave.

II. COMPOSITION OF INDIAS METALS AND MINING SECTOR

Production of metalic and Non-metallic minerals ( USD Billion)

a. The country has large reserves of iron ore, bauxite, chromium, manganese ore, baryte, rare earth and mineral salts.

b. Production of metallic minerals in the country was US$ 14.69 billion in FY24P In the same period, production of nonmetallic minerals US$ 1.57 billion in FY24P.

c. Odisha was the leading producer of minerals with 45% market share, followed by Chhattisgarh at 14% and Rajasthan at 16%.

III. BUSINESS OVERVIEW

a. OUR KEY VERTICALS:

b. BUSINESS SEGMENTS :

• CBM EXPLORATION SERVICES

Specialising in identifying and evaluating CBM potential in coal-rich regions through a complete suite of geological and technical services.

Process :

Including geological surveys, drilling exploratory wells, logging and testing to estimate gas content, and evaluating commercial viability. These services help determine whether CBM extraction is feasible and profitable in a given area.

Highlights:

• Over 100 CBM core wells completed — Highest in India

• Trusted by industry leaders Reliance Industries, Oil India, Dart Energy

• Proven capabilities in Indias most challenging basins

• CBM PRODUCTION SERVICES

Develop, operate, and maintain specialized infrastructure to extract and produce methane gas from coal beds ensuring safe, continuous, and cost-efficient CBM output.

Process :

Involves dewatering coal seams to reduce pressure and release methane gas, which is then collected through wells. The gas is compressed, processed, and transported for end use, while production is monitored continuously.

Highlights:

• 200+ CBM production wells drilled — depths up to2,406 meters

• Owns advanced CBM drilling rigs.

• COAL & OTHER MINERALS EXPLORATION SERVICES

Comprehensive solutions from exploration to processing, ensuring efficient, compliant, and sustainable mineral recovery.

Process:

• Exploration & Planning: Surveying, sampling, geological analysis, mine design.

• Drilling & Extraction: Core, RC, DTH & mud rotary drilling (~30 lakh meters), blasting, hauling

• Processing & Rehab: Safe resource development with minimal environmental impact

Highlights:

• Expertise in core drilling, large diameter core drilling, and non-core methods including reverse circulation(RC), down-the- hole (DTH), and mud rotary drilling.

• Completed ~30 lakh meters of drilling using these technologies

• Proven expertise in coal (incl. OB removal), ferrous, and non-ferrous mining, with operations across Indiaand a global footprint via a copper/gold JV in Oman

• 2D/3D SEISMIC EXPLORATION

A geophysical technique that uses sound waves to map subsurface rock formations crucial for identifying zones rich in oil, gas, or minerals.

Process :

• Generate and send sound waves into the ground

• Capture echoes via sensors to create 2D/3D images of underground structures

• Analyze reflections to pinpoint resource-bearing formations

Highlights:

• Proven capability in 2D/3D Land Seismic Exploration

• Serving sectors: Coal, Oil & Gas

• Equipped with PST Technology for precision seismic mapping

• End-to-end solutions encompassing data acquisition, seamless data processing, and insightful interpretation and reporting.

and infrastructure planning.

Process:

• Collect surface and subsurface data through:

• Geological mapping

• Seismic & resistivity surveys

• Analyze data to interpret formation behavior and resource viability Highlights:

• Team of experienced geoscientists

• Proven expertise in coal, limestone, atomic minerals, and more

• End-to-end on-site exploration services

• Integrated geological & geophysical capabilities tailored to client needs

• AQUIFER MAPPING

Aquifer mapping involves identifying and visualizing underground water-bearing formations to evaluate groundwater availability, quantity, and quality a critical input for infrastructure, agriculture, and industrial planning.

Process :

Multidisciplinary Surveys : Geological, geophysical & remote sensing techniques Field Validation : Drilling & testing to understand aquifer depth, thickness & yield Data Integration : Hydrogeology, hydrochemistry & groundwater modeling Outcome : Detailed maps and models for waterresource planning

Highlights:

• Delivered aquifer studies for state & national water resource departments

• Proven capability to quantify groundwater potential across diverse terrains

• Tailored solutions based on demand scale & hydrogeological behavior

A UNDERGROUND DRILLING

The process of creating boreholes below the Earths surface for mineral exploration, tunneling, or resource access in subsurface environments. Its a foundational service for mining, infrastructure, and utilityprojects.

Process :

• Mobilize drilling rigs to confined underground sites

• Bore into rock or soil to collect geological core samples

• Create access holes for mining, pipelines, or structural development

• Conduct detailed subsurface evaluation to guide future extraction

Highlights:

• Entered a new domain underground Drilling

• Order secured from Premier Copper producing company owned by Govt. of India.

• Commissioned 4 advanced rigs, now operational

• Expanding capabilities to support deep-access mining and critical infrastructure projects

A GEOLOGICAL & GEOPHYSICAL SERVICES

Studying the Earths structure and composition to locate natural resources, assess ground conditions, andsupport mining

IV. COAL BLOCK ACQISITION

• Coal Momentum: Powering Indias Energy Core

• Indias coal production rose from 728.72 MT in FY19 to 893.08 MT in FY23 (22.6% growth). In FY25 (till Jan), output reached 997.80 MT, with 104.43 MT produced in January alone, up 4.4% y-o-y.

• The power sector consumed 678.54 MT in FY24, a 5.97% increase. However, with demand expected to hit 1,290 MT and production estimated at 1,111 MT by FY25-end, a supply gap remains.

• Captive mining grew due to reforms allowing sale of up to 50% output in the open market, improving utilization and private sector participation.

• Coal imports rose 7.7% to 268.24 MT in FY24, despite production growth, reflecting the continuing supply-demand imbalance.

• The government is boosting domestic output through commercial coal block auctions, 100% FDI, and upgrades in mine evacuation infrastructure like rail and conveyor systems.

• A committee has been formed by the Ministry of Coal to review and speed up project execution timelines, especially for tendering and approvals.

• The GoI targets coal production of 1.40 BT by 2027 and 1.58 BT by 2030, supported by faster clearances, private

V. OPERATIONS IN OMAN

Operations in Oman

1^st Joint Venture

• This joint venture was formed with Alara Resources, a renowned Australian exploration and mining company, in 2018.

• The JV company was awarded an 11-year copper mining contract in 2021—22, with a total contract value of USD 125 million.

• Mining operations commenced in February 2022 and are progressing well.

• The JV company is also executing various drilling and exploration contracts, generating sizeable revenues

• Another joint venture was established in 2024, comprising four partners, including Alara Resources Ltd., Australia.

• In January 2025, the JV company was awarded Exploration and Mining Block 22-B in Oman, which contains geological reserves of copper, gold, silver, chromite, and basalt. The block spans an area of 1,448 sq. km.

• As per the agreement executed with the Ministry of Energy and Minerals, Sultanate of Oman, the JV company has been granted the right to first explore and subsequently exploit the mining block, in accordance with the terms set out in the agreement.

• Given the size of the block and the presence of high-value minerals, the project holds significant potential for the future.

2^nd Joint Venture

VI. NEW AVENUES/ OPPORTUNITIES FOR THE COMPANY:

• Coal & Mineral Exploration

• Over 500 mineral blocks to be auctioned by 2026

• Increased focus on domestic exploration to reduce import dependency

• Large unexplored reserves of coal, iron ore, bauxite, copper, and rare earths

• Policy shift enabling private sector participation and commercial mining

• Oil & Gas Exploration

• 100% FDI allowed in upstream oil & gas sector

• Government initiatives like OLAP and Mission Anveshan to boost exploration

• Push toward discovery of new oil-bearing blocks through seismic surveys

• Fiscal incentives to attract investment and advanced technology

• Aquifer Mapping & Groundwater Management

• National Project on Aquifer Management initiated by CGWB

• High demand for groundwater studies for infrastructure, agriculture, and urban development

• Growing need for hydrogeological surveys, modeling, and sustainable resource planning

• Unconventional Sources of Energy

• Significant potential in Coal Bed Methane (CBM), shale gas, and geothermal energy

• Most unconventional sources in India remain underexplored

• Growing energy demand and policy support accelerating exploration in this space

• International Exploration & Mining

• Emerging opportunities in mineral-rich regions like Africa, Middle East, and Central Asia

• Governments abroad increasingly opening up their mining sectors to foreign participation

• High potential in copper, gold, rare earths, and strategic minerals

VII. OUTLOOK

• Exploration and Allied Services

• This year has been most rewarding year in terms of winning new orders resulting in a very healthy order book of 332

• We expect our core exploration service business continue to grow at about 15%-20⁰/o- p.a. over the near to medium term.

• We expect EBITDA Margins to be in the range of 20% to 22%.

• Opening up of 500 non-coal minerals block for private players by Central Government will give a boost to Drilling and Exploration business in India.

• Oil and Gas Sector is among the eight core sectors in India and plays a major role when we talk about energy demand in India.

• Impetus to explore Oil & Gas through seismic technology is a welcome step and brightens prospects of our exploration business in the times ahead.

• Un-explored Non-conventional source of energy further enhances the potential of drilling and exploration business in future.

• Coal Mining Business

• We expect revenues from coal block to kick in from FY2028 and will fetch a revenue of Rs. 700- 800 Crores within next three years thereafter.

• We expect EBITDA Margins to be in the range of 40% to 42%.

• Driven by the improved domestic economic outlook and significant infrastructure development, demand for coal is expected to grow in coming years.

• Operations in Oman

• The mining services operations in Oman are going on well since last over two years. We expectthe net margin in the range of 5% - 6% annually.

• As the Oman Government looks to diversify and move away from dependence on oil revenue and to create jobs for Omani nationals, growth is anticipated in the mining sector following the discovery of significant reserves of minerals including gold and copper.

• The recently awarded mining block spread across 1448 Sq Km to our new JV company is a very positive development and the outlook is extremely bright and positive.

VIII. SWOT ANALYSIS

1. Strengths: -

a. Presence across almost all domains of Drilling & Exploration

b. Capability to deliver the Projects successfully within timelines

c. Qualification Credentials

d. Experienced Management Team

e. Client Retention

f. Robust Order Book

g. Renowned Clientals from both Public & Private Sector

h. Presence in Oman a mineral rich country through two JV Companies.

i. Owning a Coal Block in State of Jharkhand.

2. Weakness: -

a. Being Tender based business, sometimes we have to win a contract on a relatively lower rate to beat the competition.

b. Our business needs forest/environment clearances in most cases, which sometimes takes longer than expected time.

c. Weather plays a vital role in project completion.

Particulars	Numerator	Denominator	For the year ended March 31, 2025	For the year ended March 31, 2024	Variance
Current Ratio	Current assets	Current liabilities	2.17	1.78	21.61%
Debt- Equity Ratio	Total debt	Shareholders equity	0.37	0.73	-49.82%
Debt Service Coverage Ratio	Earnings available for debt service	Debt service	1.05 -	1.12	-5.80%
Return on Equity	Net Profit after taxes	Avg. shareholders equity	10.01%	5.85%	71.21%
Inventory Turnover Ratio	Revenue	Avg. Inventory	4.00	3.14	27.22%
Trade receivable Turnover Ratio	Revenue	Avg. Trade receivables	2.74	2.40	14.21%
Trade payable Turnover Ratio	Purchases + other operating expenses + other expenses	Avg. Trade payables	9.79	10.82	-9.46%
Net Capital Turnover ratio	Revenue	Avg. Working capital	2.27	2.22	2.14%
Net Profit Ratio	Net profit	Revenue	8.27%	5.31%	55.87%
Return on Capital employed	Earnings before interest and taxes	Capital employed	11.94%	8.24%	44.92%
Return on Investment	Interest and Rental Income	Investment	4.54%	11.07%	-58.95%

Debt- Equity Ratio:- The recent Preferential Issue of Equity share coupled with higher profit after tax at during the year has resulted in significant improvement in debt equity ratio.

3. Opportunity: -

a. Over 500 Non- coal Mineral Blocks are now available for Drilling and Exploration through competitive bidding

b. A large number of unexplored/partly explored coal blocks for Drilling and Exploration of Coal are available in the wake of new policy of Government of India.

c. The policy announcement of GOI, allowing 100% FDI in Oil & Gas Sector throws open many opportunities inthe sector.

d. The OLAP/Mission ANVESHAN pronounced by the government are reaping results for us.

d. The ground water management has become aquafer management now. CGWB has launched the aquafer mapping projects in a big way and we are able to win some of the contracts.

e. Oman JVs are having lots of potential for our growth.

4. Threats: -

a. Stringent Environment laws & probability of change in those laws

b. Change in Government Policies & GST Act/rules

c. Local unrest and non- cooperation by local villagers which sometimes may result in delay in completion of projects

IX. FINANCIAL PERFORMANCE:

The financial performance of the company during the year was the best ever performance in company s history . We have clocked a total income of Rs. 18387.26 Lacs on standalone basis and Rs. 18514.28 Lacs on consolidated basis registering a sizable growth of over 35 % and 36% respectively. The company has achieved profit before tax of Rs. 1977.76 Lacs on standalone basis and Rs. 2137.82 Lacs on consolidated basis registering a significant growth of 103% on standalone and 96%on consolidated basis. The higher profitability was achieved mainly by adopting proactive approach in expense management coupled with higher contribution on increased revenue.

X. RATIO ANALYSIS

Return on Equity:- The higher profit after tax during the current year has resulted in improved return on equity.

Inventory Turnover Ratio:- During the year the company registered significant growth in revenue, year on basis coupled with better inventory management has led to better Inventory Turnover ratio.

Net Profit Ratio:- The growth in revenue has resulted in incremental contribution coupled with reduction in expenses has resulted in improvement in the Net Profit Ratio.

Return on Capital employed:- Due to higher profitability as explained in forgoing, the Return on capital employed hence also improved significantly.

Return on Investment:- The return on investment includes interest income on fixed deposit in bank. During the year the fixed deposit amount has significantly gone up resulting in reduction in overall return on investment. It may be noted here that profit earned on investments in shares of Alara Resources LLC and Pilot Pipelines Pvt Ltd., as depicted in consolidated Profit and Loss account, have not been considered while arriving at the ratio. After adding those profits, the ratio will improve significantly.

Return on Networth:- There is an increase of 39% in return on Networth as compared to the immediately previous financial year. During financial year 2024-2025, the Company earned profit after tax (PAT) of 16.28 % as compared to INR 18.31 cr. During last year as against the networth of INR 164.83 cr. and INR 116.78 cr. respectively. The Company has generated a return of 9.9% viz 7.1% during previous year thus registering a growth in return of 39%.

XI. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The company has adequate internal control systems in place, commensurate with its size and complexity of its operations. There are pre-defined systems and processes with authorization matrix to deal with variety of transactions in different situations. The company has qualified internal auditor and other qualified personnel who monitor the operations of the company very closely and ensure that the transactions/operations are done in accordance with the standard operating procedures formulated by the company from time to time. The internal auditor makes a report of his observations periodically which is discussed with the management and finally with the Audit Committee and Board Members.

The internal auditor also interacts regularly with the statutory auditors for proper recording of transactions and physical verification of inventory as well as fixed assets of the company.

XII. HUMAN RESOURCE AND THEIR CONTRIBUTION:

Biggest strength of any Company is the human resource, specially in the service company like us. SWPE has the privilege of having excellent work force with very talented employees. The present strength of our employees is around 574 with a very minimal attrition rate as compared to industry average. The hallmark of our company is timely completion of projects, most of the credit for the same goes to our employees who work tirelessly to accomplish the given task with in the permissible timelines. Many clients have given very rich tributes for the for our employees commitment and professionalism. There is a complete culture of open discussion of employees with Management and views and suggestions of employees are given due weight age by the Management. We certainly take pride in saying that we are having one of the best work force in the industry.

XIII. RESPONSIBILITY FOR THE MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Board of Directors have reviewed the Management Discussion and Analysis prepared by the Management, and the Independent Auditors have noted its contents. Statement in this report of the Companys objective, projections, estimates, exceptions, and predictions are forward looking statements subject to the applicable laws and regulations. The statements may be subjected to certain risks and uncertainties. Companys operations are affected by many external and internal factors which are beyond the control of the management. Thus, the actual situation may differ from those expressed or implied.

The Company assumes no responsibility in respect of forward looking statements that may be amended or modified in future on the basis of subsequent developments, information or events.

*Source of information: https://www.wiseguyreports.com/reports/mineral-exploration-services-marketPutm https://dataintelo.com/report/exploration-services-market

	By order of the Board For South West Pinnacle Exploration Limited
	Sd/- Vikas Jain
Place: Gurugram	Chairman & Managing Director
Date: August 12, 2025	DIN: 00049217
	Annual Report 2024-25 O 41