Umiya Tubes Ltd Management Discussions

This section contains certain forward-looking statements which are based on certain assumptions and expectations of certain future events.

Overall Review:

The Company was engaged in the manufacturing of stainless-steel pipes and tubes through the state of art production units situated at Survey No. 284/1,2,3,4, (New Survey No. 1581,1582,1583 and 1584) Talod - Ujediya Road, Toraniya, Talod, Dist: Sabarkantha (Gujarat) with the total installation capacity of 3600 MTPA as on 31st March, 2021. The Company started with the production capacity of 2040 MTPA in the year 201314. However, due to financial constraints and to repay outstanding loan to Bank, the Company had to take decision to sale its manufacturing unit and its assets with due approval of the Board of Directors and also the members of the Company at the Extra Ordinary General Meeting held during the year. Subsequent to the year end, the said sale was also completed and the dues of the Bank were also completely paid off.

In the shareholders meeting held on 30^th October 2024, the members of the Company have resolved to step in the new line of business of Renewable Energy segment. Further, after the conclusion of the year, on 8^th August 2025, the members of the Company have also resolved to start manufacturing and distribution of tungsten-based products and related items.

So, now the Company has two operational segments i. e. (i) Renewable Energy Segment and (ii) manufacturing and distribution of tungsten-based products and related items. However, the company is yet to start its business operations in either segment.

Industry Structure:

(i) Renewable Energy Industry:

Ministry of New and Renewable Energy targets 500 GW non-fossil-based electricity generation by 2030, as per the Prime Ministers COP26 announcement, with an added installation of 13.5 GW renewable energy capacity in 2023, corresponding to an investment of around Rs. 74,000 crores (US$ 8.90 billion). Indias Rs. 9,22,866 crore (US$ 109.50 billion) plan aims to expand power infrastructure, meet 458 GW demand by 2032, enhance transmission, integrate renewable energy, and boost energy security, unlocking vast untapped potential.

India was ranked fourth in wind power capacity and solar power capacity, and fourth in renewable energy installed capacity, as of 2023. India surpasses the global average in setting and reducing carbon emission targets, ranking among the top three countries worldwide for emission reporting and reduction efforts. Power generation from solar and wind projects are likely to be cost- competitive relative to thermal power generation in India in 2025-30.

(ii) Tungsten-based products

Tungsten carbide, a compound made by combining tungsten with carbon, is one of the hardest known materials and is widely used in manufacturing cutting tools, drill bits, mining equipment, and industrial machinery. These tools are essential in the automotive, aerospace, construction, and general manufacturing sectors. The global tungsten market size was estimated at USD 1.86 billion in 2024 and is projected to reach USD 2.84 billion by 2033, growing at a CAGR of 4.7% from 2025 to 2033. The strong growth is largely driven by the critical use of tungsten in hard metals and tooling applications. Asia Pacific dominated the tungsten market with the largest revenue share of 54.1%.

Financial Performance with respect to Operational Performance:

The Revenue from Operation of the Company was Rs. 56.59 Lakhs against Rs. 53.31 Lakhs during the year 2023-24. After providing for Taxation (mainly, deferred tax liability), the Company has made loss of Rs. 172.94 Lakhs in current year as compared to loss of Rs. 339.62 Lakhs in the previous year which has been transferred to the Balance Sheet. The Company has not carried out material business operation from its former steel pipe business.

Financial Performance:

(INR in lakhs)

Details of significant changes in key financial ratios are as given below:

The Company has incurred loss as the scale of operations has reduced to a very large extent due to nonavailability of manufacturing activities due to working capital financial support in the financial year 202324. The Company has decided to sale its manufacturing unit with its assets which could be completed subsequent to the end of the financial year. Due to this during the year 2023-24, all profitability and other efficiency ratio has substantially deteriorated. After sale of manufacturing unit and repayment of dues of Bank, the Company can now focus on trading activities to generate turnover and profitability for the Company to sustain the existence of the Company. However, the challenging time continues for the Company in the near term.

Now, the company is in process of raising Rs. 43 Crores through preferential issue of Equity Shares and Convertible warrants for starting the business operation in the new line of business i. e. for manufacturing and distribution of tungsten-based products.

Accounting Treatment:

In the preparation of financial statements, no different treatment from that prescribed in an Accounting Standard has been followed.

Internal Control Systems and their adequacy:

The Company practices an internal control system which ensures proper handling and management of its assets. The internal control system of the Company is geared towards achieving efficiency in operations, effective monitoring and compliances with all applicable laws and regulations. The Company regularly conducts internal audit programs. The internal control department of the Company functions under the guidelines of the Audit Committee of the Company. The Company regularly reviews the adequacy and effectiveness of the internal control system and suggests improvement for strengthening them.

Opportunities, Risks and Concerns:

While the domestic and International economic conditions continue to remain challenging and are expected to remain for some more time, we expect that with new line of business and expanding demand for the Renewable Energy and Tungsten based products, the Company will be in a position to gradually expand its turnover and profitability from manufacturing and trading activities.

The Company has framed a risk management team which constantly monitors the Indian and international markets and guides the management of any sort of prevailing risk to the company. The risk management team plays a major role here. The management is regularly keeping watch on the domestic and international trade policy and commodities prices also.

Material Developments in Human Resources and Industrial Relations Front:

As the Company did not perform well during last couple of years, the company does not strength in the staff. However, as the Company grow in the new line of business, the focus has been on enhancing morale and capabilities of employees. The staff and workers will be provided orientation and training for the development of soft and hard skills on a regular basis. Efforts are made to improve the performance, providing work satisfaction and performance based increments, safety and social status.

The Company shall make regular efforts to maintain relation with Stakeholders by transparency, good governance, regular communication and effective transactions.

Environment and Safety:

The Company is committed to comply with the statutory requirements related to environment, health, safety and to prevent pollution through continuous improvement in processes, practices and EHS awareness. Your Company not only cares for compliances is this aspect but also contributes towards society health, safety and green environment.

Cautionary Statement:

Statement in this Management Discussion and Analysis Report, describing the Companys objectives, estimates and expectations may constitute Forward Looking Statements within the meaning of applicable laws or regulations. Actual results might differ materially from those either expressed or implied.