Mardia Samyoung Capillary Tubes Company Ltd Management Discussions

This chapter on Managements Discussion and Analysis ("MD&A") is to provide the stakeholders with a greater understanding of the Companys business, the Companys business strategy and performance, as well as how it manages risk and capital.

The following management discussion and analysis is intended to help the reader to understand the results of operation, financial conditions of Mardia Samyoung Capillary Tubes Company Ltd.

ECONOMIC OVERVIEW, INDUSTRY STRUCTURE AND DEVELOPMENTS:

The Indian agriculture and allied sector continue to be one of the most strategically important sectors of the Indian economy. It plays a central role in food security, employment generation, rural income, inflation management, exports and inclusive economic development.

According to the Economic Survey 2025-26, agriculture and allied activities account for nearly one-fifth of Indias national income at current prices and employ approximately 46.1% of the countrys workforce. The sector has demonstrated resilience, recording an average annual growth rate of around 4.4% over the past five years.

For companies operating in the agricultural sector, business performance during the year remained influenced by monsoon conditions, crop acreage, agricultural commodity prices, input costs, rural purchasing power, government policies, irrigation availability and global market developments.

The agricultural sector is also undergoing structural changes, with increasing adoption of mechanisation, digital agriculture, precision farming, improved seeds, modern irrigation, organised supply chains and value-added processing.

INDIAN ECONOMY:

India remains one of the worlds leading agricultural producers and has significant potential to increase productivity, improve value addition and expand its presence in global agricultural markets. According to the Economic Survey 2025-26, agriculture and allied activities were estimated to grow by approximately 3.1% in FY2025-26, while agricultural GVA grew by 3.6% during the first half of the fiscal year. Allied activities such as livestock and fisheries have demonstrated relatively stable growth of around 5-6%, providing diversification and resilience to the agricultural economy.

Agricultural exports have also become an important contributor to Indias external trade. Indias agricultural exports increased from approximately USD 34.5 billion in FY2020 to USD 51.1 billion in FY2025, representing a CAGR of approximately 8.2%. However, Indias share in global agricultural exports remains relatively modest, indicating substantial opportunities for further growth through productivity improvement, quality enhancement, processing and market diversification.

The performance of the agricultural sector remains closely linked to monsoon conditions, irrigation availability, input costs, commodity prices, government policies and global market conditions.

During FY2025-26, favourable monsoon conditions supported agricultural activity and improved crop performance. The Governments advance estimates indicated continued growth in foodgrain and commercial crop production. Strong performance in livestock, dairy and fisheries has further contributed to the resilience of the broader agricultural sector.

At the same time, the sector continues to face structural challenges. Agricultural productivity in several crops remains below that of leading global producers, while fragmented landholdings, limited irrigation, inadequate storage and post-harvest infrastructure and exposure to weather conditions continue to affect farm profitability.

KEY GROWTH DRIVERS

The principal factors supporting the long-term growth of the agricultural industry include:

•Growing domestic food demand: Rising population, urbanisation, changing consumption patterns and increasing purchasing power are driving demand for food, dairy, horticultural products, processed foods and protein-rich products.

•Increasing focus on productivity: Adoption of improved seeds, precision agriculture, mechanisation, irrigation technologies, farm advisory services and digital agriculture is expected to improve farm productivity and resource efficiency.

• Expansion of allied activities: Dairy, poultry, livestock and fisheries are becoming increasingly important sources of rural income and provide diversification beyond traditional crop cultivation.

•Food processing and value addition: Increased investment in cold chains, warehousing, food processing and organised retail can reduce post-harvest losses and improve farmer realisations.

•Agricultural exports: India has significant opportunities to expand exports of rice, spices, marine products, fruits, vegetables, processed foods and other agricultural commodities.

• Government support: Minimum Support Prices, procurement programmes, irrigation initiatives, agricultural infrastructure programmes, crop insurance, credit support and digital agricultural initiatives continue to influence sector development.

OPPORTUNITY AND THREATS:

Opportunities

The agricultural sector offers significant opportunities for businesses operating across the agricultural value chain.

Precision and digital agriculture present opportunities through satellite-based crop monitoring, drones, sensors, artificial intelligence, farm-management platforms and data-driven decision-making.

Farm mechanisation is expected to increase as farmers seek to improve productivity and address labour constraints. Demand for tractors, harvesters, irrigation equipment and specialised farm machinery is likely to expand.

Agri-inputs such as high-quality seeds, crop-protection products, biological inputs, fertilisers and soil-health solutions remain essential to improving agricultural productivity.

Horticulture and high-value crops provide attractive opportunities as consumers increasingly demand fruits, vegetables, spices, dairy products, processed foods and health-oriented products.

Food processing and cold-chain infrastructure offer substantial potential for value creation by reducing postharvest losses and enabling farmers and businesses to access higher-value markets.

Export-oriented agriculture represents another major opportunity. Indias agricultural exports increased substantially between FY2020 and FY2025, although the countrys global export share remains relatively low, indicating room for expansion.

Threats

Despite favourable long-term prospects, the agricultural industry remains exposed to several risks.

Climate and weather risk: Agriculture remains highly sensitive to rainfall, temperature, droughts, floods, cyclones and other extreme weather events. In 2026, rainfall variability has again highlighted this risk, with reports indicating an August rainfall deficit and expectations of below-normal rainfall in September.

Commodity price volatility: Prices of agricultural commodities can fluctuate significantly because of changes in production, inventories, global demand, exports, imports and government interventions.

Input-cost inflation: Fertilisers, seeds, crop-protection products, fuel, electricity and labour constitute significant components of agricultural costs. Increases in these costs can adversely affect farm profitability.

Fragmented landholdings: Small and fragmented holdings can limit economies of scale, mechanisation and investment in modern agricultural technologies.

Water availability: Dependence on monsoon rainfall and uneven irrigation coverage remains a structural challenge. Efficient irrigation and water-management practices are therefore critical for sustainable agricultural growth.

Regulatory and trade-policy risk: Changes in export restrictions, import duties, minimum support prices, procurement policies and food-security measures can affect commodity prices and market opportunities.

Global market uncertainty: Changes in international commodity prices, exchange rates, geopolitical conditions and trade policies may affect agricultural exports and profitability.

OUTLOOK:

The medium- to long-term outlook for Indian agriculture remains positive, supported by rising food demand, increasing consumption of high-value agricultural products, technological advancement, infrastructure development, government support and opportunities in food processing and exports.

The sector is expected to gradually move from traditional commodity-based agriculture towards a more diversified, technology-enabled and value-added agricultural ecosystem.

However, growth is likely to remain sensitive to monsoon conditions, climate change, input prices, commodity- price movements and government policy. Building resilient supply chains, improving irrigation coverage, increasing mechanisation, strengthening farmer-market linkages and expanding processing capacity will be critical to achieving sustainable growth.

Indias agricultural exports increased to USD 51.1 billion in FY2025, but its share of global agricultural exports was only about 2.2% in 2024. This gap highlights the significant potential for India to increase its international market presence through higher productivity, improved quality standards, branding, processing and export-market diversification.

RISK AND CONCERNS:

While the Company continues to pursue its growth strategy with prudence and focus, several external and internal risks could potentially impact its operations and financial performance. Key risks and concerns identified for the financial year 2025-26 include the following:

1. Volatility in Raw Material Prices

The prices of key raw materials are highly sensitive to global geopolitical events, including ongoing wars and political conflicts in key regions. These events often lead to supply chain disruptions, price volatility, and currency fluctuations, which can adversely affect procurement costs and profit margins, even for companies with a purely domestic focus.

2. Macroeconomic and Policy Risks

Although the Company does not currently operate in global markets, any major shifts in global interest rates, inflationary pressures, or government policy changes in India or key commodity-producing countries may indirectly impact domestic pricing and consumer demand. Rising inflation may reduce discretionary spending on agricultural products, while higher interest rates may limit access to consumer credit.

3. Export Exposure (if applicable)

Where applicable, any income from exports exposes the Company to risks related to foreign exchange volatility, changes in trade regulations, or import/export duties. Unfavorable developments in trade relationships or economic policies of importing countries may affect business performance.

4. Increasing Competition

The agricultural industry continues to witness heightened competition from both organized national brands and unorganized local players. In addition, rapid product innovation, and price-driven competition may impact the Companys market share and pricing power.

5. Regulatory and Compliance Risks

With increasing regulatory oversight in argricultural sector, including mandatory hallmarking, tax compliance (GST), and KYC norms, there is a need for constant adaptation. Non-compliance or delays in adapting to regulatory changes may pose reputational or financial risks.

6. Operational Risks

Dependence on a limited number of vendors, technological disruptions, inventory mismanagement, or supply chain inefficiencies may hamper the Companys ability to deliver products on time and maintain consistent quality.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has a proper and adequate system of internal controls. This ensures that all transactions are authorized, recorded and reported correctly, and assets are safeguarded and protected against loss from unauthorized use or disposition. In addition, there are operational controls and fraud risk controls, covering the entire spectrum of internal financial controls. An extensive programme of internal audits and management reviews supplements the process of internal financial control framework. Properly documented policies, guidelines and procedures are laid down for this purpose. The internal financial control framework has been designed to ensure that the financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets.

In addition, the Company has identified and documented the risks and controls for each process that has a relationship to financial operations and reporting. The Company also has an Audit Committee to interact with Statutory Auditors, Internal Auditors and Management in dealing with matters within its terms of reference. This Committee mainly deals with accounting matters, financial reporting and internal controls.

HUMAN RESOURCES & INDUSTRIAL RELATIONS:

The Company firmly believes that its employees are their most asset and the foundation of its continued success. Our human resources philosophy is centered on fostering a performance-oriented, competency-driven culture built on a strong sense of accountability, integrity, and collaboration.

The Company remains committed to providing a safe, inclusive, and enabling work environment, where every employee is respected, valued, and empowered to deliver their best. We focus on continuous learning and development by facilitating training programs, skill enhancement initiatives, and professional growth opportunities, ensuring that our workforce remains competitive and future ready.

Our human resource policies are designed to nurture a transparent and harmonious relationship between the management and employees. The Company has maintained cordial industrial relations throughout the year, with open channels of communication and mutual respect forming the backbone of our internal work culture.

Going forward, the Company is focused on attracting, retaining, and rewarding talent to build a motivated workforce capable of supporting long-term business sustainability and growth.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

	CURRENT	PREVIOUS
	YEAR	YEAR
	(2025-26)	(2024-25)
Revenue from Operation	7387.12	-
Other Income	0.00	276.32
Total Income	7387.12	276.32
Less: Expenditure	7038.45	156.37
Net Profit /(Loss) before Tax and extra ordinary items	348.67	119.95
Less: Extra Ordinary Items	0.00	0.00
Net Profit (Loss) before Tax	348.67	119.95
Less: Current Tax	103.84	0.00
Deferred Tax	0.00	0.00
Income Tax for Earlier years	22.23	0.00
Net Profit /(Loss) after tax	222.60	119.95
Other Comprehensive Income	0.00	0.00
Balance of Profit/(Loss)	222.60	119.95

During the year Company has total revenue of Rs. 7387.12 Lakhs (Previous year Rs. 276.32 Lakhs) and Profit of Rs 222.60 Lakhs (Previous year Profit of Rs. 119.95 Lakhs).

Your directors are optimistic about the Companys business and hopeful of better performance with increased revenue and profit in the coming year.

CAUTIONARY STATEMENT:

Statement in the Management Discussion and Analysis describing the Companys objectives, expectations, estimates or predictions may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement due to external factor The company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments, information or events.