Natural Biocon (India) Ltd Management Discussions

Report (Forming part of Directors Report for the year ended 31^st March, 2025)

Natural Biocon (India) Limited (“the Company”) is a public listed Company incorporated on August 27, 1992. The equity shares of the Company are listed on BSE Ltd and CSE Ltd. since May 19, 2020 under Security Code No.: 543207 at BSE and August 08, 1996 024151 at CSE.

Overview

The Company is engaged in Agriculture Sector and agriculture plays a vital role in Indias economy. Agriculture remains vital in Indias economy supporting ~45 46% of the countrys workforce and contributing around 16% to GDP in FY24. According to UPAG (MOSPI), agriculture & allied sector contributed approximately 18.3% of GVA in 2024-25. The agriculture sector grew at 3.8% in FY25. The government projects real GDP growth of 6.3% 6.8% for FY26. Indias food processing industry is expanding rapidly it reached a valuation of around US$389 billion in 2025, and experts expect it to surge further, with projections hitting US$535 billion by FY26.

Processed food and agriculture exports reached US$49.4 billion in FY24-25, with processed food accounting for 20.4%. Technological adoption is reshaping agriculture smart and precision farming tools like AI, drones, GIS, ML, and Agritech platforms are increasingly integrated across the value chain.

Focus areas:

1. Organic and regenerative inputs are gaining momentum Indias agricultural biologicals market reached US$16 billion in 2024, projected to grow at a CAGR of 14.1% (2025 32). 2. Gujarat positioning itself as a leader in biofuels and circular agriculture whey-based ethanol and CBG projects are underway, enhancing farmer income and sustainability. 3. Shifting policies export restrictions on rice were lifted to boost shipments, aiming to ramp agricultural & food exports to US$100 billion by 2030. 4. Climate stress is impacting tea production Assam tea yields declined (~7.8%), increasing costs and affecting export viability. 5. Pulses: NITI Aayog is promoting self-sufficiency via productivity enhancements and value addition.

Market Size

Indias Agricultural & Agri-Food Exports (FY 2024-25)

Overall agricultural and allied exports reached approximately US$51.91 billion, marking a 6.47% growth over FY 2023-24 (~US$48.8 bn) APEDA-mandated agri & processed food exports grew 11% to US$27.90 billion Key Commodity Exports (FY 2024-25)

Tobacco exports rose 40%, totaling US$1.47 billion Dairy products jumped 54% (no absolute figure given) Processed fruits & juices grew roughly 6%, exceeding US$1 billion. Fresh fruits rose ~2% to US$1.17 billion Oil meals recorded a decline of ~21% to US$1.32 billion Additional Insights & Trends

India remains the worlds fourth-largest marine products exporter, with shipments reaching US$7.45 billion across 130 countries Rice export restrictions were fully lifted, contributing to a global supply surge; India aims to boost agricultural & food exports to US$100 billion by 2030 Forecasts are buoyed by value additions in processed foods, still an underexploited segment (~US$8 billion currently) with strong growth potential Updated Summary (FY 2024-25) Total Agri & Allied Exports: ~US$51.91 billion Processed Food (APEDA): ~US$27.90 billion Top Performers: o Basmati Rice: ~US$5.87 billion o Non-Basmati Rice: >US$6.5 billion o Marine Products: ~US$7.45 billion o Coffee: US$1.8 billion o Tea: US$924 million o Fruits & Vegetables: US$3.87 billion Opportunities and Threats

Increase in income levels will aid greater penetration of new customers and purchasing power of the consumer market.

Positive regulatory reforms including MSP.

Increase in corporate growth & risk appetite.

Greater efficiency in debt market operations which will also help greater penetration.

Increase in demand of natural base and agriculture product in the market

Focus on selling new product/services.

Global recession and increase in minimum wages of labour

Inflation could trigger increase in consumer price inflation, which would dampen growth.

Increased competition in both local & overseas markets.

Unfavorable economic development. Segment wise or product wise performance

The Company has identified its activities as single segment. Hence, the Companys performance is to be viewed as a single segment company operating in agricultural produce, Chemical and natural extracts Industry.

Recent trend and future outlook

Notwithstanding global uncertainties, regulatory tightening and cyclical economic downtrend, chemical industry in India on the whole, will continue to much ahead at a healthy pace in the long term. We expect more favourable policy in the coming years for chemical and agricultural segment to remain stable or move southward and liquidity to ease in the coming quarters. This should augur well for demand growth also. However, your company is making all possible efforts will improve its position.

Risks and Concerns

Like any other industry, this industry is also exposed to risk of competition, government policies, natural factor etc. As the Company is proposed to export raw materials/ finished product, the Company has risk on account of Exchange Rate fluctuations. The Company has taken necessary measures to safeguard its assets/interests etc. Prolonged limited economic activities due to COVID-19 would severely hamper demand of our product in domestic and international markets. Internal Control Systems and their Adequacy

The Company has proper and adequate system of Internal Controls to ensure that all the assets are safeguarded, protected as against loss from unauthorised use or disposition and that transactions are authorised, recorded and reported correctly. The Company conducted the audit of various departments through an independent internal auditor. The views of the statutory auditors are also considered to ascertain the adequacy of the internal control system.

Discussion on financial performance with respect to operational performance

The Company has adopted Indian Accounting Standards (Ind AS) from 01st April, 2017, accordingly, the financial statements for the Financial Year 2022-23 have been prepared in accordance with Ind AS.

The Net Worth of the Company as on 31^st March, 2025 is Rs.3187.03 lakhs. The Total Revenue and Net Profit (after tax) of the Company during the year under review was Rs.834.81 lakhs and Rs.4.46 lakhs respectively as compared to Rs.1353.37 lakhs and Rs.15.27 lakhs respectively in the previous year.

Material Developments in Human Resources/ Industrial Relations front, including number of people employed

Human resources are considered as one of the most critical resources in business which need to be continuously nurtured to maximize the effectiveness of the organization. The Company recognizes its employees as a critical asset of the organization and lays due emphasis on all round development of its employees. Various initiatives have been taken up for developing employees at all levels and to make them future ready for higher roles and responsibility. Cautionary Statement Statements made herein describing the Companys objectives, projections, estimates and expectations may be ‘forward looking within the meaning of applicable laws and regulations. As forward-looking Statements are based on certain assumptions and expectations of future events over which the Company exercise no control, the Company cannot guarantee their accuracy nor can it warrant that the same will be realized by the Company. Actual results may differ from those expressed or implied. Important factors that could make a difference to the Companys operations include changes in Government regulations, tax laws, economic developments and other incidental factors.