Neelkanth Ltd Management Discussions

Your directors are pleased to present the Management Discussion and Analysis for the financial year ended March 31, 2026.

A. INDUSTRY STRUCTURE AND DEVELOPMENTS:

BUSINESS OVERVIEW

India has set a new benchmark in rice production. Rice production has reached 154.024 million tonnes and India has now become number one in the world, surpassing China.

Over the past decade, Indias agriculture and allied sectors have witnessed significant expansion, supported by sustained policy focus and increased public investment. Targeted interventions have contributed to rising agricultural output, improved productivity, and enhanced resilience of the rural economy.

Total foodgrain production has increased from 265.05 million tonnes in 2013-14 to 357.73 million tonnes in 2024-25. The growth has been driven by higher production of rice, wheat, maize, and coarse cereals. This also included millets, now promoted as Shree Anna. This growth has been supported by the National Food Security and Nutrition Mission (NFSNM). The mission promotes higher production of rice, wheat, pulses, and coarse cereals. It supports improved seeds, better agronomic practices, and technology adoption.

Over the past twelve years, agricultural policy has expanded across irrigation, soil health, markets, risk mitigation, and infrastructure. A series of focused initiatives has shaped this transition towards a more integrated and farmer- centric agricultural framework.

The Mega Food Park scheme has strengthened linkages between farmers and markets. The number of Mega Food Parks has increased from 2 in 2014 to 41 in 2025, including 24 operational and 17 under implementation. These parks provide modern infrastructure for processing, storage, and logistics. Improved infrastructure, digital platforms, and processing capacity have enhanced efficiency and supported better income opportunities for farmers.

Public investment in the agricultural sector has increased substantially over this period. Budgetary allocation for the Department of Agriculture and Farmers Welfare increased from Rs.27,663 crore in 2013-14 to Rs.1,40,528.78 crore for 2026-27. This significant rise reflects the sustained policy support and continued investment in agricultural infrastructure, strengthening overall agricultural expansion.

India will be shifting its approach to agriculture from an acreage-oriented model to a productivity-oriented one, rather than expanding farmland. The seed reform 2025-26 aims to address critical priorities for agricultural development as it stands as the most important element for the upcoming phase of agricultural transformation.

The seed sector in India is undergoing an expansion phase that is being facilitated by several factors including hybridization, climate-resilient crop varieties and increased varietal turnover rate in cereal, oilseeds, pulse and horticultural crops. The Indian seed market was estimated at Rs. 79,498 crore (US$ 8.6 billion) in 2025 and is forecast to grow to Rs. 1,85,840 crore (US$ 20.2 billion) by 2034 with increased demand for high-yielding hybrid seeds for maize, rice, cotton, and vegetable varieties.

As Indias agricultural position are shifting from acreage expansion to productivity, climate resilience and export - grade crop quality seed reform has become critical. Delayed monsoons, increasing heat stress and water scarcity are rising demand for climate-adaptive, short-term and region-specific seed varieties.

A good monsoon can boost crop production, improve water availability, and increase farmer income, while irregular rainfall can create challenges such as floods, droughts, and pest outbreaks. Understanding the expected monsoon conditions and preparing in advance can help farmers reduce risks and improve productivity.

The Indian monsoon plays a crucial role in the countrys agricultural economy. Nearly half of Indias farmland still depends directly on rainfall, making the monsoon season one of the most important periods for farmers. As Monsoon 2026 approaches, farmers across India are preparing for crop planning, water management, and sowing decisions that will impact their entire farming season.

GLOBAL SCENARIO

Global Rice Market is anticipated to reach US$ 405.50 Billion in 2034 from US$ 305.14 Billion in 2025, at a CAGR of 3.21% between 2026 and 2034. The growth is due to factors such as an increase in global population, increased demand for food products, growing consumption in developing countries, technological developments in agriculture, and improvements in rice breeds.

It is one of the most widely eaten grains in the world and provides carbohydrates that support the lives of billions of people around the world. The versatile nature of rice makes it possible for it to be served in multiple forms such as boiled, fried, steamed, and processed food. There are numerous types of rice which include white rice, brown rice, basmati, jasmine, and sticky rice. In addition to providing rice meals, rice grains are used in the manufacture of products such as rice flour and drinks.

Growth in international trade and export of rice is also an important factor that drives the rice market. The leading producers of rice, such as India, Thailand, Vietnam, and Pakistan, are increasing exports due to high demand for rice across the globe. Greater globalization and trade facilitation make it easier to export rice and increase efficiency in doing so. There is also increased demand for certain types of rice, such as aromatic or specialty rice, in various regions, including Europe, the Middle East, and North America.

The Indian agriculture sector continues to demonstrate resilience, supported by healthy sowing activity, favorable monsoon conditions, improved reservoir levels and sustained government policy support.

B. OPPORTUNITIES AND THREATS

i) OUR STRENGTHS

The Company maintains a comfortable capital structure and demonstrates strong debt protection metrics, ensuring financial strength and stability.

Rice touched a record production of 150.18 MT in 2024-25, a 42.38 percent increase compared to 2014-15 (105.48

MT). India became the worlds largest rice producer.

As Indias agricultural position are shifting from acreage expansion to productivity, climate resilience and export- grade crop quality seed reform has become critical. Delayed monsoons, increasing heat stress and water scarcity are rising demand for climate-adaptive, short-term and region-specific seed varieties.

Government Support: The Indian government provides several subsidies and other support to the rice industry. These subsidies help reduce production costs and make it more profitable for farmers to grow rice. The government also provides technical assistance to farmers and helps to improve the quality of rice production.

ii) HUMAN CAPITAL

At Neelkanth Limited, employees are its prime assets and a vital key to its success.

Company believes its people are fundamental to great products, services and reputation. Therefore, it constantly endeavours to build a workforce of strong teams that include dedicated and highly skilled professionals.

The Company has Human Relations policies in place, which are reviewed and updated regularly in line with the Companys strategic plans. The Companys total employee strength as on 31st March, 2026 stood at 2. The Company aims to develop the potential of every individual associated with it as a part of its business goal.

The Company constantly introduces better systems and processes to enhance employee productivity.

Company has been working towards developing, grooming and training its employees for next-level roles.

iii) OUR STRATEGY

Reaching the right customer at the right time requires a strong omnichannel presence, and this has been a key pillar of our growth strategy. A core part of the business strategy is to provide an environment where all employees feel enabled, empowered, and committed.

With the objective to sustain growth, your Company is pursuing several strategic initiatives in all key areas of business.

Company has implemented a robust strategy to enhance its position in Indian market.

We strive to deploy our capitals judiciously to tap the existing and emerging opportunities while managing associated risks effectively.

We seek to further strengthen our march towards a leading global Agri product trading and export house by:

• We are expanding the market, educating consumers and retailers, and safeguarding Basmatis identity and providing an uncompromised experience.

• Increasing our relevance to clients by being able to work in the entire spectrum of their business

• Introducing affordable variants to drive market penetration. Delivering higher business value to clients through the alignment of our structure and offerings to their business objectives.

• Strengthening our strategic partnership with our clients

• Regular collaboration with stakeholders allows the Company to understand their needs and expectations, helping it design informed business strategies that promote long-term sustainable value for all.

iv) OPPORTUNITIES

Government support to agriculture and food processing Policies and initiatives such as PM Krishi Sinchayee Yojana, PM Fasal Bima Yojana, National Mission for Sustainable Agriculture and National Food Security Mission continue to strengthen Indias agricultural ecosystem.

Growth in international trade and export of rice is also an important factor that drives the rice market. The leading producers of rice, such as India, Thailand, Vietnam, and Pakistan, are increasing exports due to high demand for rice across the globe. Greater globalization and trade facilitation make it easier to export rice and increase efficiency in doing so. There is also increased demand for certain types of rice, such as aromatic or specialty rice, in various regions, including Europe, the Middle East, and North America.

At strategic levels, we have been evaluating our systems and process to remove bottlenecks, strengthen our cost competitiveness and de-risk our business to realise better value for our consumers and business. Indias dominant position in Basmati rice production, combined with surplus non-basmati rice availability provides a strong foundation for expanding exports.

v) THREATS

A major problem in the global rice market is posed by climate change since rice growing is very sensitive to climate conditions and water availability. Climate changes such as heavy rains or droughts have the potential to affect the yield of rice crops significantly. Moreover, rice production uses a lot of water and hence the possibility of shortage of water can affect rice farming in certain regions.

Also, conventional farming of rice produces greenhouse gases such as methane which has environmental effects. Rice farmers are finding it hard to maintain steady output because of climate change. Strategies have been made to produce environmentally resilient varieties of rice but adoption of such techniques has not yet been achieved widely. Environmental problems need to be addressed alongside the quest for increased output levels.

Freight costs have been particularly hard hit. Industry sources report that the price of shipping containers of rice to the Gulf region has increased.

In the current macroeconomic environment, 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.

Rural Economy, Farmer Economics and Demand Trends: The rural economy during FY26 continued to remain influenced by:

• Extended Monsoon distribution and intensity

• Input cost dynamics (fertilisers, power, labour)

• Government support mechanisms

Price volatility and supply chain issues constitute two of the major challenges that exist in the global rice market. The variations in the levels of production resulting from the effect of weather and changes in policy measures or restrictions on global trade can affect the price stability of rice. For example, bans and tariffs introduced by rice- producing countries can affect the international supply of the product in terms of stability. The increase in input costs, such as fertilizer, fuel, and labour, constitutes another problem in the production process and leads to higher production costs. This challenge is compounded by inefficiency in the transportation and storage phases, leading to increased post-harvest losses. The development of countries faces additional issues due to insufficient infrastructure.

C. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE COMPANY AND PERFORMANCE OVERVIEW

During the financial year 2025-26, your Companys revenue was Rs.327.99 lakh whereas revenue figures for the previous year were Rs.494.08 Lakh.

Your Company follows strong customer engagement leading new business from existing and new customers. We have intensified new customer development and is hopeful to see the demand pick up as the macro- economic conditions see a turnaround helped by Government initiatives.

Sr No.	Particulars	For the Financial Year ended March 31, 2026	For the Financial Year ended March 31, 2025
1.	Income
	(a) Revenue from operations	327.99	494.08
	(b) Other Income	59.69	1.14
	Total Income	387.68	495.22
2.	Earnings before Interest, taxes, depreciation and amortization	65.39	16.48
	Less: Finance Costs	6.87	4.35
	Less: Depreciation	15.36	11.36
3.	Profit Before Tax	43.16	0.77
4.	Less: Tax Expense
	Current Tax	7.00	-
	Deferred Tax	11.41	-
	Income tax of earlier years	-	-
5.	Profit/(Loss) for the year	24.75	0.77
6.	Add: Other Comprehensive Income	0.01	(0.09)
	Total Comprehensive Income	24.76	0.68

D. OUTLOOK

WORLDWIDE ACCEPTABILITY: Basmati is un-disputedly the king of grains, given its associations with being the best, it finds natural uptake across nations and especially in the Middle East where rice preparations are part of the culture. Basmati rice represents the largest market share due to its strong consumer preference, premium positioning, and widespread use in traditional and modern cuisines.

Government-supported food distribution initiatives are contributing to the growth of the packaged rice market in India by improving the availability of affordable and quality-assured staple foods across regional markets. Rapid urbanization across India is strengthening the demand for packaged rice as urban households increasingly prefer convenient, hygienic, and easy-to-store staple foods. Migration toward cities is reshaping consumption patterns, with working professionals and dual-income families placing greater emphasis on products that simplify cooking and ensure consistent quality. A large share of Indias rural and lower-income consumers continues to purchase rice in loose, unbranded bulk form due to its lower price compared with branded packaged products.

E. RISKS AND CONCERNS

The Board of Directors and the Audit Committee of the Board review the business risks to which your Company is exposed and the mitigation plans. The senior management team led by the Director and CFO is entrusted to manager risks pro-actively with appropriate mitigation measures and implementation thereof.

KEY RISKS TO WHICH YOUR COMPANY IS EXPOSED INCLUDE

Price volatility and supply chain issues constitute two of the major challenges that exist in the global rice market. The variations in the levels of production resulting from the effect of weather and changes in policy measures or restrictions on global trade can affect the price stability of rice. For example, bans and tariffs introduced by rice- producing countries can affect the international supply of the product in terms of stability. The increase in input costs, such as fertilizer, fuel, and labour, constitutes another problem in the production process and leads to higher production costs. This challenge is compounded by inefficiency in the transportation and storage phases, leading to increased post-harvest losses.

Governments across the Indo-Pacific are leaning more heavily on fertilizer and fuel subsidies, strategic reserves, export and licensing controls, import diversification and targeted bilateral commodity arrangements to manage price pass-through and political exposure.

d. Monsoon

For more than a billion people across India, the monsoon is not just a season, it is a lifeline. Rains refill reservoirs, revive soils, and sustain the worlds largest rice-growing regions.

Climate change is reshaping the monsoon in ways that are already impacting rice farmers and, by extension, the countrys food security. Even as total rainfall over a season may appear "normal," it is increasingly concentrated in fewer days. The gaps between rains are getting longer, creating dry spells that stress crops at critical growth stages.

Agriculture being vulnerable to climate change like erratic weather patterns, droughts, floods etc., affects the production of crops and increases customer prices.

Agriculture in India is largely dependent on the monsoon. As a result, production of food-grains fluctuates year after year. A year of abundant output is often followed by a year of acute shortage in key crops. Agriculture continues to be dependent on the vagaries of temperature and rainfall. Not only is quantity of rain important, but timing is even more critical.

e. Irrigation

Water intensity and groundwater exploitation: Producing 1 kg of rice requires approximately 3000-4000 litres of water. This demand leads to over-exploitation of ground water in many rice growing regions.

f. Raw Material Risk

Multiple factors are converging to squeeze global rice output. Key among them is the sharp increase in fertilizer and energy costs, partly a result of ongoing conflict involving Iran that has disrupted global commodity flows. A rice price index maintained by the FAO has also moved higher, reflecting broad-based cost increases across major exporters.

Reduced Crop Yields:

One of the most direct effects of climate change on Indian agriculture is lower crop productivity. Higher temperatures can shorten crop growth cycles, reduce weaken plant development. Crops such as wheat, rice, maize and pulses are especially vulnerable to heat stress during critical stages. India could lose 6.6 per cent of its rice yield for every 1 degree Celsius (?C) rise in global mean temperature, according to a new study. The study found that exposure to temperatures above 30?C was the prime reason of rice yield losses linked to warming. For India, the latest research is another warning sign. In recent years, high-heat days have been widely reported to cause crop wilting, particularly in wheat and rice.

Climate and weather uncertainty:

Unpredictable climate patterns and extreme weather events can disrupt rice cultivation, affecting both yield and quality. This poses a challenge for consistent raw material availability and supply chain reliability. The Company mitigates this risk by strengthening its supplier network and diversifying sourcing regions to secure raw material availability.

Geopolitical risks:

Global operations remain susceptible to policy shifts, trade restrictions and export regulations across critical global markets. The biggest risk right now is the volatility in international freight rates, insurance premiums and the food safety regulations of importing countries.

Water scarcity and irrigation stress:

Climate change is putting additional pressure on Indias already limited water resources. Declining groundwater levels and irregular rainfall are making irrigation more difficult in many agricultural regions. Due to the overexploitation of the available ground water resources, mainly in Northwest part of our country, water table is declining day by day therefore, ground water resources are depleting in a drastic manner

F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Company maintains proper accounting control and monitoring of operational efficiency; its policies ensure strict compliance with laws, and it works towards maintaining reliable financial and operational information.

The Company prioritises transparency, ethics, and good corporate governance and has established strong internal controls integral to its growth process.

The Company has in place adequate and appropriate systems of internal controls commensurate with its size and the nature of its operations and these have broadly withstood the test of time.

The Audit Committee, the Statutory Auditor and the top management are regularly apprised of the internal audit findings and regular updates, if any, provided at the Audit committee meetings of the Action taken on the internal audit reports. The Audit Committee of the Board consisting of non- Executive independent Directors reviews the quarterly, half yearly and the annual financial statements of your Company.

It maintains proper accounting control and monitoring of operational efficiency; its policies ensure strict compliance with laws and it works towards maintaining reliable financial and operational information.

Market Trends, Drivers, and Challenges

The steady rise in rice production is linked to high-yielding seed varieties, expanded irrigation coverage, and better access to agricultural inputs. Government-backed extension services have improved awareness among farmers. These efforts have helped bridge yield gaps across regions. Indias rice production is set to experience s teady growth in the coming years.

Indias rise as the largest rice producer has strengthened its position in international markets. Rice exports contribute significantly to foreign exchange earnings. Supplying rice to overseas markets also enhances Indias strategic role in global food supply chains.

ECONOMIC ENVIRONMENT:

India remains on track for consistent, inclusive economic growth, with real GDP expected to expand steadily, supported by highcapacity utilisation and sustained public investment in infrastructure. Government CapEx, especially in sectors, such as transport, digital infrastructure and agriculture, continued to stimulate economic activity. Overall, despite multiple global headwinds during the year including economic and geopolitical uncertainties, Indias economy grew driven by strong domestic macroeconomic fundamentals and private consumption.

INDIAN AGRICULTURE AND ALLIED INDUSTRIES

India is the largest exporter of rice globally and rising global interest in basmati and speciality rice offers further headroom for expansion.

Policies and initiatives such as PM Krishi Sinchayee Yojana, PM Fasal Bima Yojana, National Mission for Sustainable Agriculture and National Food Security Mission continue to strengthen Indias agricultural ecosystem.

These measures enhance farm productivity, reduce risks for farmers and promote sustainable farming practices, which are creating long-term opportunities to strengthen farm linkages and ensure sustainable sourcing.

After harvesting of wheat and transplanting of rice, there is gap of nearly 40-45 days which can be used for raising the good green manure crops.

Adoption of direct seeded rice (DSR)

Cultivation of rice by DSR in rice-wheat cropping system may save 30% water as compared to the conventional methods of rice cultivation such as transplanting.

G. DISCUSSION ON FINANCIAL INFORMATION WITH RESPECT TO OPERATIONAL PERFORMANCE Overview

The financial statements of the Company have been prepared in accordance with Ind AS as per the Companies (Indian Accounting Standard) Rules, 2015 as amended and notified under Section 133 of the Companies Act, 2013 (the Act) and other relevant provisions of the Act.

Income

Of the total revenues for the year ended March 31, 2026, approximately 84.60% were derived from sale of products and remaining 15.40% from other income like Interest Income, Rent received, sundry balance written back, other receipts, etc.

Expenditure

Purchases of stock in trade includes Rice Purchase. Employee benefit expense relates to Salaries and wages and Staff welfare expenses. Finance cost relates to interest expense. Other expenses primarily represents repairs and maintenance, insurance, rate and taxes, travelling & conveyance expenses, telephone expenses, advertising expenses, legal and professional charges, etc.

Depreciation and amortization

We have provided Rs. 15.36 Lakhs and Rs. 11.36 Lakhs towards depreciation and amortization, for the financial years ended March 31, 2026 and March 31, 2025, respectively.

Sensitivity to rupee movement

Company is sensitive to change in US Dollar value change as one segment of the company is into export.

Net profit after tax and exceptional item

Net profit stood at Rs. 24.75 Lakh for the year ended March 31, 2026, in comparison with net profit of Rs. 0.77 Lakh in the previous year.

Earnings Per Share (EPS) after exceptional item

During the year, our basic EPS increased to Rs. 0.57 per share from Rs.0.02 per share in the previous year.

Financial condition Sources of Funds

1. Share capital

Share Capital of your Company comprises of two classes of shares - equity shares having a face value Rs. 10/-each. Our authorized share capital is Rs 36.00 Crores, divided into 1,70,00,000 equity shares of Rs. 10/ -each and 19,00,000 preference shares of Rs. 100/- each. The issued, subscribed and paid up capital stood at Rs. 435.90 Lakh as at March 31, 2026, divided into 43,59,000 equity shares of Rs. 10/- each.

2. Reserves and Surplus Capital Redemption Reserve

The balance as at March 31, 2026, stood at Rs. 5.53 Lakh/ - same as the previous year.

Securities premium

The balance as at March 31, 2026, stood at Rs. 355.67 Lakh / -, same as the previous year.

3. Application of funds Fixed Assest Additions to gross block

During the year under review, no fixed assets have been purchased.

Trade Receivables

Trade receivables amounted to Rs. 86.75 Lakhs as at March 31, 2026, compared to 160.14 as at March 31, 2025. These debts are considered good and realizable.

Cash and cash equivalents

Cash and cash equivalents include balance with Banks and cash in hand.

Financial Assets and other non-current assets

The following tables give the details of our Financial Assets and other non-current assets:

Financial Assets and other non-current assets.

(Rs.in Lakh)

Particulars	For the financial year ended March 31, 2026	For the financial year ended March 31, 2025
Security Deposits	-	-
Loans & Advances (Related Party)	-	-
Advance Income Tax & TDS	-	0.70
Others	28.43	504.31
TOTAL	28.43	505.01

Current Liabilities and Trade Payables

(Rs.in Lakh)

Particulars	For the financial year ended March 31, 2026	For the financial year ended March 31, 2025
Trade Payables	30.49	7.39
Bank Overdraft	-	-
Others (Statutory Payments)	0.13	0.41
Others	41.47	20.60
TOTAL	72.09	28.40

H. MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

SALES AND MARKETING

Sales and marketing operations remained focused on strengthening customer relationships, improving market reach and responding to evolving customer preferences amid a competitive market environment. The Company continued to focus on sales effectiveness, pricing and distribution to support sustainable growth.

EXPORT

The Companys export business remained subdued during FY 2025-26 amid global economic and geopolitical uncertainties and evolving trade conditions. The Company continued to explore opportunities in international markets and strengthen customer relationships to support future export growth.

I. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR:

Key Financial Ratios:

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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. The Company has identified following ratios as key financial ratios.

Sr. No	Particulars	2025-26 (%)	2024-25 (%)	% of change
1.	Debtors Turnover	2.66	2.93	(9%)
2.	Inventory Turnover	0.64	1.26	(49%)
3.	Interest Coverage Ratio	7.28	1.18	517.40%
4.	Current Ratio	13.17	12.43	6%
5.	Debt Equity Ratio	0.04	0.04	6%
6.	Operating Profit Margin (%)	(2.95)	0.81	(463.06%)
7.	Net Profit Margin (%)	6.38	0.16	3892.90%

Reasons for significant changes in key ratios:

1. Inventory Turnover- Decrease primarily due to Increase in average inventory

2. Interest Coverage Ratio- Increase due to increase in profit during the year.

3. Operating Profit Margin (%)- Decrease primarily due to increase in purchase of stock in trade

4. Net Profit Margin (%)- Increase primarily due to increase in net profit.

J. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:

Return on Net Worth in the financial year 2025-26 is 2.55 % as compared to 0.08% in the immediately previous financial year 2024-25. During the financial year under review, return on Net Worth increased by 3075% as compared to immediately previous financial year mainly because of increase in profit.

K. CAUTIONARY STATEMENT

Statement in this Annual report, particularly those which relate to Management Discussion and Analysis, describing your Companys objectives, projections, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws and regulations.

Various factors, known or unknown, expected or otherwise, may influence the financial results. These statements are not expected to be updated or revised to address any changes in the underlying presumptions.

Actual results may materially differ from those expressed or implied. The Company assumes no responsibility in respect of forward - looking statements, which may be amended or modified in future on the basis of subsequent developments, information or events.