Transcript of AGM

Ankitha

Yes Mr. Praful Chavda.

Praful

Hello am I audible?

Ankitha

Yes, we can hear you Sir. You may continue.

Praful

Thank you. Thank you, Sir, Chairman Sir and Board of Directors. I am Praful Chavda from Hyderabad. The Chairman’s speech has provided detailed information including hiring of new Directors and CEO and I welcome all of them, this would result in benefiting the Company.

In page No. 4 of the Annual Report, it is mentioned that the Company is India’s 3rd largest manganese ore. I hope and wish that the Company soon reaches to the 1st or 2nd position in

India. Further, Saleem Sir has completed his 1st term and has entered into the 2nd term.I support this and wish you all the best. In your 1st term, the Company provided us Bonus shares, which increased the wealth of the shareholders, and I wonder what plans you have during your 2nd term of association with the Company.

We know you from a very long time and today your remuneration is being approved for which we are very happy, and I would not be surprised to see you as a Managing Director of the

Company in the upcoming future. Venture Capital And Corporate Investments Private

Limited’s services are very good, and they provide all necessary information.

Apart from this, the Company’s CSR projects are going well and focus on education in rural area is benefitting a lot of students. However, I would like to suggest the Company to provide technical knowledge along with education. Today if a light or fuse goes off, then people at house will have to wait for 2 to 3 days to get the same repaired and in addition to which they charge fair amount for such repair. Also, students have be taught to aid elderly persons by including nursing as a part of the education curriculum, since in case of any emergency, it will be of help as they will know how to handle emergencies. You may consider including religious education as well in this regard. Currently, I am happy with the Company and its Annual Report has been prepared very well through hard work by the Secretarial Department. One thing that I would like to point out is previous 10 years’ highlights of the Company which is either not available in the Annual Report or I have not found the same, I am not sure. All in all, I am happy with the Company. Request you to conduct the next Annual General Meeting through

VC so that we can meet and attend online. Thank you, Sir.

Bahirji

Thank you, thank you Praful Chavda, you have given us a good feedback. Similar to the Board of Directors and Company executives, the shareholders also think not only about the business but also about the society. Thank you for your valuable feedback.

Praful

Thank you, Sir.

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Ankitha

Thank you, Mr. Praful Chavda.

2. I now request 2nd Speaker Mr. Kanwar Singh Sahni to unmute yourself and speak.

Ankitha

Mr. Kanwar Singh Sahni?

Moderator

Ankitha, the said shareholder has not participated and you can go to the next.

3. Ankitha: Okay. So, moving on to the 3rd speaker, Mr. Kamal Kishore Jhawar, to unmute yourself and speak. Okay, so looks like Mr. Kamal Kishore Jhawar is also not there.

Kamal

Hello am I audible?

Ankitha

Yes Sir, we can hear you.

Kamal

Thank you Ankithaji.

Bahirji

Your voice is not clear.

Kamal

Hello?

Ankitha

Yes Sir we can hear you. Go ahead Sir.

Kamal

Chairman Sir, Board of Directors and Management. Attending Annual General

Meeting through Video Conferencing is the best thing, and it enables shareholders to attend

Annual General Meetings from anywhere. I am associated with Venture Capital and Corporate

Investments Private Limited for more than 30 years.

Ankitha

Sir your voice is getting cut. It is not clear.

Kamal

Hello, now can you hear me? Can you hear me?

Ankitha

Yes Sir, yes Sir. I think there is a connectivity issue from your end, Sir. Hello?

Kamal

Can you hear me now? Everything went well, is also going well. The Company’s Share price has also gone up. Earlier I attended physical AGM of the Company along with Mr.

Damani, a shareholder who came from Bombay to attend the AGM and then I expected that the

Company would do well and it turned out right. Mohammed Abdul Saleem promised last year that the Company would do well during the financial year and Secretarial Team is also very good and coordinates well. Venture Capital and Corporate Investments Private Limited’s services is good and I thank them.

These days there are various frauds that are happening in the market by siphoning funds in the name of CSR activities. Considering such frauds happening around, the Company shall take all precautionary cautions and do the good work for the society. Thank you, Sir.

Saleem

Bahirji I would like to respond to this. Kamalji, whatever you mentioned is right.

Further, I would like to add that in case of our Company we carry out all the CSR activities in- house.

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Whenever the Company applies for 5 Star Awards which the Company has been getting year on year, is received after various verifications at 3 levels i.e., regional level, Zonal Level and

Ministry Level. They verify whether spendings are for CSR or business purpose or for social causes. It is only after the thorough verification we get these awards. However, your suggestion is good and we are working in line with it.

Ankitha

Thank you, Mr. Kamal Kishore Jhawar.

4. I now invite the 4th Speaker Mr. Hardik Indramal Jain to unmute yourself and speak.

Hardik

Yeah, can you hear me? Yes.

Ankitha

Yes Sir, we can hear you, go ahead.

Hardik

So, thanks for the opportunity. Actually, I have emailed my list of questions, so you want me to repeat that, or you have it handy?

Bahirji

Mr. Hardik, we have your questions handy and we have the replies to that also. So I would like to quickly take everybody through that and then your questions are also quite detailed, so I think subsequently also many speaker shareholders may have their answers with these questions I am answering. I think the 1st question that you asked was with regard to the

Company has received the MPAP limit approval to produce manganese ore of 0.46 MTPA and

3.81 MTPA of iron ore. So, you had asked whether we need any further approval to do this volume or have already started working on these enhanced output. So we received these approvals during the last quarter February 2024 and we already have ramped up to these production limits.We are also happy to update you that with all the proactive measures in place, we have successfully achieved the pro-rata production of MPAP targets, that is 0.31 Million

Tonnes of manganese ore and 1.968 Million Tonnes of iron ore during the last financial year itself. And we have continued the same run rate during the first quarter, which you can see from the financial results.

Your 2nd question was with regard to if we can mine manganese and iron ore to the tune of

MPAP in FY 25 or will it increase gradually over the years and by when will we reach the

MPAP? So answer to this would be, we should be able to mine at the MPAP limits available.

Historically, we've always been able to achieve the MPAP production targets. If you look at our quarter one results, our quarterly run rate, is in line to achieve the annual production as per the MPAP limit.

You had asked another question with regard to Iron Ore, in case of iron ore, are we pursuing further increase of MPAP to 4.36 Million Tonne from 3.81 Million Tonne of iron ore and how much time will it take for approvals? Yes, we are actively pursuing the revision of our MPAP to the tune of our EC limits. The process has been good and we are hopeful that soon our efforts will crystallize. We will share a positive update on this subject as it happens in the next few months.

Then you had asked a question with regard to Arjas Steel Private Limited. We are acquiring

80% of the enterprise value of ₹3,000 crore. Who will be owning the remaining 20% stake and any plans to buy a hundred percent? SMIORE is acquiring 80% and the balance 19.12% is

Page 9 of 14 being acquired by an entity in which the promoter is interested. The rationale was to keep the reasonable debt equity ratio in SMIORE.

Then you had asked regarding how much rough debt that the Company has as of FY 24 ? The

Company is net cash positive or net cash surplus. As at FY 24 end the net cash balance was

₹819 crore. We have strengthened that further during the 1st Quarter.

Then you asked regarding how much cash will we be required to pay for this equity? How are we planning to fund? How much from internal accruals, QIP and debt? Rough estimates will be alright is what you had mentioned. So I'd like to answer this. We would need around ₹1,800 crore of funds. The funds will be raised by a mix of minimum 25% through internal accruals and balance through borrowings.

You had also asked with regard to key numbers of Arjas Steel for FY 24. Okay, with regard to that, FY 24 revenue for Arjas was about ₹2,700 crore plus , EBITDA margin was at about ₹300 crores and a moderate debt to equity ratio which is in line with the industry. The capacity utilization, considering the ongoing capex which would result in significant incremental capacity utilization for FY 2024 was in the tune of about 60% to 70% because there were certain shutdowns taken to implement the capacity expansion.

You had also asked that currently we are a net cash Company. In case we use the cash for acquisition and take more debt, what kind of peak net debt are we looking at approximately?

At this point of time, it is difficult to quote a debt number but to answer your question, out of the total fund requirement, we intend to raise debt maximum to the tune of 75% of the fund requirement. We also are looking at new initiatives to ensure how we can lower our debt. We have already taken some initiatives towards this objective as you may know. It is difficult to quote an expected debt number for FY 25. However, it would be a modest number as compared to the industry.

You had also asked that Arjas Steel at capacity of 0.5 Million Tonnes per annum of specialty

Steel production at our Arjas steel, how much iron ore it will require and full capacity utilization and are we planning to source it entirely from our Company or will Arjas buy from outside as well? And currently how much iron ore are we giving to them, if any? So to answer this question, we are not supplying any iron ore to Arjas currently. However, once the acquisition is completed, we will build some synergies around the same. Our long-term mining experience and presence in iron ore rich belt of the state will certainly help us to bridge the raw material concerns of Arjas either from SMIORE mines or mines in the Sandur region.

You had also asked another question with regard to production of Coke was only at 0.6 lakh

Tonne against 2.44 lakh Tonne. What was the main reason for the sharp fall and what kind of production are we looking at in FY 25? What are the key parameters based on which we decide to ramp up or scale down the coke production. If it is only price, then above what level will generally ramp up the production? To answer this question, we are observing volatility in Coke business since last year, which is the main reason for lowering the production. We are closely monitoring the macro situation around the business. As soon as there are indicators showing a revival of business economics, we will ramp up the production.

You had also asked regarding ferroalloy. In case of ferroalloys also production has come down from 57,000 tonnes per annum to 28,000 Tonnes per annum. What were the main reasons for

Page 10 of 14 scaling down the production? Here also, based on which parameters we decide to ramp up or scale down the production? To answer this question, I think during the last year, our strategic initiative to set up a renewable energy plant to the tune of 42.9 megawatt, which is 33 megawatt of solar and 9.9 megawatt of wind is helping us to be competitive in the business. However, as the ferroalloy business is closely integrated with the coke business, for its energy requirements and the coke business has been volatile and ramping up the production using traditional grid energy is not viable. So currently we are using our renewable energy completely for our ferroalloy production. We await the revival of coke business to ramp up our ferroalloy production.

So, you had also asked if coke production is lower in any year, can we buy power from outside and keep producing ferroalloys? Or one cannot make profits in ferroalloy if we use the power from any other source than renewable or waste heat recovery? To answer this, manufacturing using traditional grid energy is unviable for ferroalloys.

You had also asked regarding other expenses, royalties and taxes has gone up sharply from

₹154 crore in FY 23 to ₹276 crore in FY 24. The volume growth was not high. So, what led to such high growth in royalty expense? Has there been any increase in royalty by the government?

So, to answer this, royalty is higher in FY 24 due to two reasons i.e., higher royalty, as we have moved some iron ore quantity to the port after paying royalty for exporting of iron ore. This is again a new initiative, after more than a decade we started exporting during January this year. other than that, higher royalty is observed because of increased volumes.

You had also asked how much is the current realization of each product, manganese ore, iron ore, ferroalloy and coke? As all these commodities are linked to international index and they are very dynamic, which we have been observing. Our realizations have always been similar or better as compared to our peers. I think I have covered all your questions and answered them.

Hardik

Yeah, thanks for answering in such a detailed way, just one last question regarding the recent Supreme Court order of taxes on mines from retrospectively since 2005, will there be any impact on our Company?

Bahirji

See this ruling of the Supreme Court of retrospectively levying taxes is limited to few states and state of Karnataka has not been a party to this., In fact, after the order, Central

Government has filed a review petition in the Supreme Court along with the states to review the order. But generally, we don't see any retrospective impact on our Company.

Hardik

Okay, thank you for the opportunity.

Ankitha

Thank you Mr. Hardik Indramal Jain.

5. I now invite the 5th speaker, Mr. Manjit Singh to unmute yourself and speak. Mr. Manjit Singh?

Moderator

The said Shareholder is not attending, you can proceed to the next shareholder.

6. Okay, so, I now invite 6th speaker Mr. Anandu Vithal Nayak to unmute yourself and speak. I think he is also not available.

7. I now move on to the 7th Speaker Mr. Rohinton Batiwala to unmute yourself and speak.

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Moderator

Same case, you can proceed further.

8. I now move on to our 8th Speaker Mr. Ayush Mittal to unmute yourself and speak please.

Ayush

Good morning, everyone. Wonderful to see you all again and it's great to participate at the AGM again. I've been a long-standing shareholder, and it's a pleasure to see the way Sandur has been growing from strength to strength. So, I think 7 to 8 years back when I started investing into the company or looked upon it, there was a huge legacy and resources which were available and finally we are seeing how our core team has been able to build upon those assets and skills the business up and now it's very exciting to see that with the acquisition what we have done.

With the great talent we are able to attract to the Company, I think it's a very exciting journey that we are looking ahead. Also, first time I think we are going to raise equity after a long period of 10 to 15 years. So, I've already sent my detailed questions and maybe many points have been covered, so if something is skipped, maybe you can address them. Beyond that, can you please share some of your thoughts, like, I have seen that we have always held the equity at a very high level and not diluted it. Now that we are going to raise equity funds, your thoughts behind this decision and how will we create value from here and your vision for the Company for the next 3 to 5 years, if those things can keep at the centre, that will be great. And thank you for the Board of Directors. Saleem Sir, Uttam Sir and Everyone, thank you so much.

Bahirji

Thank you, Ayush for good feedback regarding our journey and how we have evolved over a period of time and specifically answering your question with regard to raising funds, yes we are raising funds for the first time like many other first-time initiatives that we have done in the last few years as you are observing. So, this is definitely a first time initiative for us and this is mainly with the intent to support and fuel our growth in the upcoming years to come. These fundswill be utilised for the purpose of supporting our growth, maybe also managing our debt in a better way and also ensuring organic and inorganic growth opportunities which will support the Company to take the performance to another level altogether. Anything else you have specifically to be asked? because I think other questions were answered earlier.

Ayush

Most of points have been covered. So, coming to our iron ore scale up that we are doing, in the industry what we observed is that there was very good pricing till few months back and now the pricing has started falling very rapidly due to China issues and Indian issues also and then the Supreme Court order confusion, all those things came. Can you please tell us as to how the industry scenario is currently, what kind of average realizations are we getting?

And, also as we are scaling up our volumes substantially, is the quality falling or are we able to

Maintain quality, something around this will be very helpful.

Bahirji

Currently we have already scaled our operations, definitely we do expect slight variation in the quality. There will be, because of the volume increase, a marginal drop in the quality. However, from the marketing perspective and say the realizations and keeping a healthy margin, we should not face a challenge. Higher volumes will definitely help, as you would have seen even the performance of the first quarter has been quite good, but post that we know that we've been observing even internationally the prices have been coming down.

However, this should recover in the time to come and we believe especially for India, the growth story is beginning to unfold and we expect a good amount of growth of the economy especially infrastructure requirement and with that, also our customers are scaling up to

Page 12 of 14 significantly high levels. So, we expect that our products especially the ores to do well in the time to come.

Ayush

Any idea about the average realization that we are getting now in the market?

Bahirji

There is a marginal drop, no doubt it in line with the international trend and also in line with the industry trend. However, we are on par or maybe better than our peers. But then with increased volumes by the end of the year, say Q3 & Q4, we expect hopefully better realizations to come so we should end this as a good year by the end of the financial year.

Ayush

And Sir, what about the something some commentary and insight about the other segments which have not been doing well for us? By when do you expect them to recover or re-come back to some kind of normal because they have been a huge drag like coke and ferroalloy, in both of these the productions are quite low and the market was bad, but what are the expectation on these segments as of now?

Bahirji

With regard to these segments, we are observing the market very carefully and this is again an industry wide trend that generally, similar producers are facing. But I think with the strategic initiative that we did last year of commissioning our renewable energy facility at least consistent volume of ferroalloy is being ensured. However, with regard to coke, we are taking a very cautious approach not to make losses or try to minimize that. Coke if it runs well then we get the power andwe can also ramp up the ferroalloys. So, we are very carefully keeping a watch and hopefully in the times to come situations should become better.

Ayush

Okay, and Sir finally on the Arjas, by when will we start seeing it in our financials? By when will the consolidation start happening?

Bahirji

During Quarter 3, we expect to move in there. So, from then on we expect the consolidation to happen.

Ayush

Thank you.

Bahirji

Thank you.

Ankitha

Thank you, Mr. Ayush Mittal.

There being no other request from shareholders, I now request the Chairman to continue with the proceedings.

Closing remarks by Chairman

Thank you, Ankitha. The Members may note that the insta-poll e-voting facility will now be activated for those Members who are participating in this meeting and have not already voted through remote e- voting. The insta-poll facility shall remain active until 30 minutes after this meeting.

Furthermore, I hereby authorize Bahirji Ajai Ghorpade, Managing Director, to declare the results of the e-voting and place the results on the website of the Company as per the prescribed timeline. The resolutions as set forth in the Notice shall be deemed to be passed today subject to the receipt of the requisite number of votes.

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We had 52 Members participating in today’s 70th Annual General Meeting. Thank you all for attending the meeting. I hereby declare the proceedings of the 70th Annual General Meeting of The Sandur

Manganese & Iron Ores Limited closed. On behalf of the Board of Directors and Management, I thank each one of you. We will see you at the next Annual General Meeting. Please stay safe, healthy and happy. Jai Hind.

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