City Crops Agro Ltd Management Discussions

A. Global Economic Outlook:

Global growth is expected to remain steady but below pre-pandemic averages through 2027, with continued uncertainty around tariff and trade flows, geopolitical developments and energy prices. The global economy continues to face multiple downside risks, including a longer or wider conflict in the Middle East, fresh trade tensions, higher energy prices and financial market volatility. However, improvements in productivity levels, driven by advancements in artificial intelligence, along with the gradual resolution of trade-related issues in certain countries, could support global economic activity.

For emerging markets and developing economies, growth in 2026 is projected to remain broadly stable at around 3.9%, following a similar estimate in 2025. However, this stability masks considerable divergence across regions. While approximately 60% of these economies are expected to post stronger growth, others - including several low-income and geographically vulnerable nations - continue to face economic strain.

In emerging and developing Europe, growth is expected to reach 3.9% in 2026, building on the modest recovery observed in the previous year.

B. Overview of the Indian Economy:

The Indian economy is poised to sustain its momentum in the upcoming financial year, reaffirming its stature as one of the worlds fastest-growing major economies. Expansion is likely to remain broadly aligned with its medium-term potential, supported by strong domestic fundamentals and structural drivers, even as external conditions stay uncertain. Inflation may see moderate pressures after a period of easing in the previous year, though it is likely to remain contained within a manageable range.

India remains a high-growth, resilient economy, backed by robust macroeconomic fundamentals amidst an uncertain global environment. Real GDP is projected at 7.4% in FY 2025-26 and is expected to remain close to 7% in FY 2026-27, while inflation has fallen to historically low level, averaging about 1.7%. Growth is primarily driven by the services sector, which is expanding at 9.1% and accounts for more than half of GVA, propelled by strengthening global competitiveness in services exports. Manufacturing activity is gaining traction, supported by PLI-led investments and higher capacity utilisation, while agriculture remains steady and continues to support rural demand.

Indias external sector remains resilient, with exports of USD 825.3 Billion and forex reserves exceeding USD 701 Billion, complemented by record remittance inflows. Capital markets are witnessing increased participation, reflecting growing investor confidence and a shift towards market-linked savings instruments.

C. Industry structure and development:

India has the second-largest arable land resources in the world. With 20 agri-climatic regions, all the 15 major climates in the world exist in India. India is the largest producer of spices, pulses, milk, tea, cashew, and jute, and the second largest producer of wheat, rice, fruits and vegetables, sugarcane, cotton, and oilseeds. Further, India is second in the global production of fruits and vegetables.

The broader economic environment presents several challenges. India is currently navigating complex issues related to economic growth, asset quality, inflationary pressures, and fiscal discipline. Growth trends have shown signs of deceleration, and a sustained recovery will depend largely on transparent, timely, and decisive policy action - elements largely outside the control of private enterprises, including those in the food grains trading sector. India must be consistent in regaining its position as a leading emerging market investment destination. This can only be possible if consistency and clarity is in our policies.

D. Opportunities and Threats:

Opportunities:

With rising population, demand for food will continue to drive the need for better seeds. The governments focus and various subsidy and incentive schemes for the farmers will also add to the requirement of better-quality seeds. With shifting educational reforms and government regulations aimed at educating investors and raising trading awareness among the general public, there is a growing opportunity for stock brokerage firms. Number of modern techniques and tools along with awareness created by Agri-tech start-ups is helping farmers get into precision farming. This has in turn increased the appreciation of the farming community towards the value of inputs like seeds, bio fertilizers etc. Investments in warehousing, logistics, and cold chains under government schemes can enhance storage and transportation, reducing post-harvest losses.

Threats:

Agricultural commodity prices can change significantly because of supply, demand, weather, and global market conditions. Geopolitical tensions, trade restrictions, or currency fluctuations can adversely affect export competitiveness and import pricing. Because firms can enter and quit an industry with few limitations, the number of substitutes in the same product line at different prices poses a risk of losing the investor base. Food grain production is heavily reliant on monsoon patterns. Irregular rainfall or extreme weather events (like droughts or floods) can disrupt supply and pricing. Threats for this Industry are very common and every person is aware of the threats and the risks involved with this Industry.

E. Segment-wise or Product-wise performance:

The Company is primarily engaged in Single Segment i.e. Trading in Agriculture Product.

F. Future Outlook:

The Company presents the analysis of the Company for the year 2025-26 & its outlook for the future. This outlook is based on assessment of the current business environment. It may vary due to future economic & other developments, both in India and abroad.

G. Risks and Concerns:

Risk Management is an integral part of our Companys business strategy. A dedicated team is a part of the management processes governed by the senior management team. This team reviews compliance with risk policies, monitors risk tolerance limits, reviews and analyzes risk exposure related to specific issues and provides oversight of risk across the organization. The team nurtures a healthy and independent risk management function to avoid any kind of misappropriations in the Company. As part of the Risk Management framework, the management of Credit Risk, Market Risk, Operational Risk and Fraud Risk are placed under the Head - Risk. The Credit Risk management structure includes separate credit policies and procedures for various businesses. The risk policies define prudential limits, portfolio criteria, exceptional approval metrics, etc. and cover risk assessment for new product offerings. Concentration Risk is managed by analyzing counter-party, industry sector, geographical region, single borrower and borrower group. Retail Finance credit approval is based on product / programs and monitoring is primarily done at the portfolio level across products and programs. Causal analysis is carried out and corrective actions are implemented on key risk indicators. A Senior Management oversight committee meets periodically to review the operational risk profile of the organization. Fraud risks are mitigated through a fraud risk management team.

H. Internal control systems and their adequacy:

The Company has established a robust internal control framework aligned with the scale and complexity of its operations.

The framework is designed to ensure operational efficiency, regulatory compliance and safeguarding of assets, while maintaining accurate, timely and reliable financial reporting. Internal Control Systems are the foundation for ensuring achievement of organizations objectives of operational efficiencies, reliable financial reporting and compliance with laws, regulations & policies. The Company has in place Internal Control Systems commensurate with the nature of its business, size and complexity of its operations. The Company continuously reviews and fortifies its internal control systems in line with evolving business requirements, regulatory stringency, accounting standards and risk dynamics. Independent internal auditors conduct risk based audits across business areas, and their observations are reviewed by the Audit Committee, which monitors the adequacy of internal controls, implementation of corrective actions and the overall effectiveness of the internal audit Function.

I. Discussion on financial performance with respect to operational performance:

The financial performance of the Company for the Financial Year 2025-26 is described in the Directors Report of the Company.

J. Material developments in Human Resources / Industrial Relations front including number of people employed:

The Company maintained cordial and constructive relations with employee which continued during the year under the review. The Company considers its human capital to be one of the fundamental strengths supporting sustainable growth and business excellence.

K. Material Financial and Commercial Transactions:

During the year there were no material financial or commercial transactions.

L. Key Financial Ratios:

In accordance with the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2018 (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in Key sector specific financial ratios. In this regard, the disclosure regarding the Key Financial Ratios are given in the Notes to Financial Statement of the Company.

M. Human Resources:

The Companys human resource practices are centred on talent development, employee engagement, productivity enhancement, skill building, workplace safety and stable industrial relations. During the year, The Company continued to invest in training and development programmes to strengthen functional, technical, safety and managerial capabilities across levels. A collaborative and constructive work culture remained a priority all through, boosting efficiency, accountability and long-term organizational growth.

N. Caution Statement:

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, strategies, outlook, or future plans may constitute forward-looking statements within the meaning of applicable securities laws and regulations.

Registered Office			By the order of the Board,
307, Haash : Business Centre, Fatehnagar, Nr. Ankoor School, Paldi,		City Crops Agro Limited
Ahmedabad - 380 007
	Sd/-	Sd/-
	Kaupilkumar Shah	Shitalben Shah
Place : Ahmedabad th	Managing Director	Director
Date : 8 September, 2026	DIN: 08937535	DIN: 08935979