Sanwaria Consumer Ltd Management Discussions

Industry structure and Development

The fast-moving consumer goods (FMCG) sector is an important contributor to Indias GDP growth. The sector includes food & dairy products packaged food products household products drinks and others. The India FMCG market represents one of the most dynamic consumer-driven sectors in the economy, characterized by high-volume sales, rapid inventory turnover, and diverse product portfolios catering to essential daily requirements. Market expansion is fueled by demographic advantages, creating substantial demand for personal care, packaged foods, and convenience products. Digital penetration has transformed consumer engagement, with e-commerce contributing significantly to market reach across tier-two and tier-three cities. Your Companys primary business is food processing - processing of oilseeds refining of crude edible oil for use as cooking oil manufacturing of soya products and other consumer products. Considering the growing population and the food habits across India edible oils form an essential part of the modern diet. The total consumption of edible oil in India is estimated to be more in the coming days out of which domestic supply is much less due to stagnant production of edible oil seeds leaving demand-supply gap.

India vegetable oil market reached USD 9.62 Billion in 2025 and is on track to reach USD 14.83 Billion by 2034 at a 4.78% CAGR. The market expanded from USD 7.61 Billion in 2020, anchoring at USD 12.15 Billion in 2030. Indias edible oil sector is structurally import-dependent, with domestic oilseed production meeting only around 40-45% of national consumption requirements. This gap continues to drive large-scale imports of palm oil, soybean oil, and sunflower oil, making the market sensitive to global commodity price fluctuations.

MARKET SIZE

The food industry accounts for 81.3% of application share (2025), driven by household consumption, food processing units, quick-service restaurants, and institutional catering. The biofuels segment contributes 11.2%, supported by Indias push for biodiesel blending under national energy policy. Palm oil leads the oil type segmentation at 28.6%, followed by soybean oil (24.9%) and sunflower oil (18.7%). North India holds the largest regional share at 29.4%, driven by dense urban populations, robust modern trade infrastructure, and high per-capita edible oil consumption. Growing health consciousness and demand for fortified, low-cholesterol, and cold-pressed oils are emerging as powerful trends reshaping consumer preferences across income segments.

GOVERNMENT INITIATIVES

Government initiatives such as the National Mission on Edible Oils - Oilseeds (NMEO-Oilseeds), approved in October 2024 with an allocation of INR 10,103 Crore (approx. USD 1.21 Billion), aim to boost domestic oilseed output to 69.7 Million Tons by 2030-31

Goods and Service Tax (GST)

GST upon being implemented shall replace the multiple indirect taxes levied on FMCG sector with a uniform simplified and single-point taxation system. A swift move to the proposed GST may reduce prices bolstering consumption of FMCG products.

Food Security Bill

The Food Security Bill has been passed recently by the Union Cabinet. As per the bill 5Kg of food grains per person per month will be provided at subsidized prices by the State Governments under the targeted public distribution system. This is expected to result in higher inflow of investments into the agriculture sector in the coming years.

Excise Duty

Excise duty on other beverages and lemonade would be decreased to reduce retail sale price by 35%. Excise duty on various tobacco products other than beedi would be increased resulting in retail price of tobacco products going up by 10-15%.

Relaxation of License Rules

Industrial license is not required for almost all food and agro-processing industries barring certain items such as alcoholic beverages cane sugar and hydrogenated & animal fats as well as items reserved for exclusive manufacture in the small-scale sector

COMPANY OVERVIEW

The primary Business of the company is processing of Oils seeds and paddy Currently the Company is having capacity of 2500 TPD of Solvent Extraction Plant Soya Refinery of 225 TPD and 500 TPD of Paddy processing Plant. SCL has adopted strategy to convert its conventional commodity and agro based business into an FMCG Business. Currently Manufacturing units of the company are given on lease.

STRENGTHS OF THE BUSINESS

Strong Management team:

While promoters remain closely involved preserving the heritage and culture of the organisation the business is strongly steered and navigated by a highly experienced and professional management team. In addition its strong advisory team is also helping the organisation to drive its strategic agendas for future growth of the Company.

Enduring relationships:

The Company is involved in the food business for more than 30 years and has built very strong sourcing capabilities by direct procurement of agricultural produce. This has lead to significant cost economies in procurement.

Presence in a large and fast growing segment:

-The Company is amongst food producers of soya/Paddy/Wheat products in India.

-The Group has sustained exposure in trading of food grains and pulses apart from soyabean products wheat products rice oils and other food products.

Location Advantage:

-The companys operations in the heartland of the soya & Paddy & wheat belt of India gives it a major Locational advantage reducing the logistics costs substantially.

-The plants are located in Madhya Pradesh which is a power surplus state and hence the Company has access to cheap and uninterrupted power supply.

-The region has good access to skilled and semi skilled labour.

Consistent Quality

By way of stringent quality assurance norms and state of-the-art technology with a high degree of automation the Company ensures robust quality control. Critical tests are performed at each stage of manufacturing. The Companys unwavering focus on quality and innovation backed by deep consumer insights world-class R&D and an efficient and responsive supply chain will further strengthen its leadership position.

To achieve successful growth and profitability the Company relies on its greatest assets - its intellectual capital. The Companys human resource practice revolves around LET: Learning Empowerment and Togetherness. SCL values its employees and invests towards capability building with a long-term orientation. The Company has been building its skill-sets by adding new competences through hiring grooming of internal talent and functional capability building. The Companys value-system guides its actions and behaviour in everyday business which creates a unique culture at Sanwaria Consumer Limited. These values are the DNA of the organisation which are ingrained in every member across hierarchies and geographies.

Information Technology

The Company is enhancing the use of Information Technology tools and applications in their business processes to become more competitive efficient and effective. Its robust IT infrastructure acts as a growth enabler and helps achieve cost leadership process orientation and higher productivity. Better IT applications are helping us reach target market segments more cost effectively track data improve productivity levels and maximise our returns on investment. The Company has made investments towards various modules in line with Goods and Service tax (GST).

Research and Development

The Companys research and development programme are central to expanding value to its products and to keeping aligned to new global flavour trends and technologies. The R&D team is dedicated towards deepening the Companys pipeline of products focused on consumers looking for health and convenient options.

Opportunities

In the wake of COVID-19 Indias normal GDP has contracted by approximately 3% in FY2021 and is expected to bounce back and reach US$ 4 Tn by FY 2025. It is also expected that the growth trajectory of Indian economy will enable India to be among the top 3 global economies by FY 2050.

Growing awareness easier access and changing lifestyle are the key growth drivers for the consumer market. The focus on agriculture MSMEs education healthcare infrastructure and tax rebate under Union Budget 2019- 20 was expected to directly impact the FMCG sector. Initiatives undertaken to increase the disposable income in the hands of common man especially from rural areas will be beneficial for the sector. (source https://www . ibef.org/archives/industry/fmcg-reports/indian-fmcgindustry-analysis- september-2020)

Increasing presence on e-commerce platform:

It is estimated that 40% of all FMCG purchases in India will be online by 2020 thereby making it a US$ 5-6 billion business opportunity. Owing to their innate desires to live independently and well Indians are spending like never before on platforms like e-commerce. They are now looking for products and services that can be bought with convenience.

RISK AND CONCERNS

As per the Order of Honble National Company Law Tribunal ("NCLT") Indore Bench the Company was under CIRP with effect from May 29 2020.

CAUTIONARY STATEMENT

Certain statements in the Management Discussion and Analysis section may be forward-looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results which would be different from what the Directors envisage in terms of the future performance and

outlook. Investors are cautioned that this discussion contains forward looking statement that involve risks and uncertainties including but not limited to risks inherent in the Companys growth strategy dependence on certain businesses dependence on availability of qualified and trained manpower and other factors discussed. The discussion and analysis should be read in conjunction with the Companys financial statements and notes on accounts.

These documents signed by Resolution Professional on behalf of Company pursuant to the admission of application for CIRP against the company, the Honble NCLT, Indore bench vide its said order dated 29/05/2020 has appointed the Mr. Rajeev Goel, as the Interim Resolution Professional ("IRP") of the Company, Further, this is to inform you that Mr. Gautam Mittal, was appointed as the resolution Professional in second COC meeting and his appointment was confirmed vide order dated 04.09.2020 for conducting the CIRP and to exercise all powers and duties in pursuant to the provisions of the IBC.