Sarda Proteins Ltd Management Discussions

The Year the Balance Sheet Moved Before the Business Did

1 Business Overview & the Year in Context

Sarda Proteins Limited closed FY26 as two different companies occupying the same corporate shell. For most of the year, it was what its name and history suggested only loosely: a small, BSE-listed trading entity whose operations centred on the distribution of solar modules, photovoltaic components and renewable energy equipment. By the time the accounts were signed, it had become the vehicle for a considerably larger ambition — an integrated agricultural, horticultural and food-processing platform, with its Objects Clause amended in July 2026 to permit cultivation, procurement, processing, import, export and warehousing across the agri value chain, and two acquisition targets already under a definitive investment plan.

The financial statements in this report, however, describe the company before that pivot fully lands. FY26s revenue, cost base and balance sheet are still substantially those of the legacy solar-trading business; the agri strategy is disclosed, funded and directionally underway, but its operating and financial imprint on FY26 numbers is minimal. Shareholders reading this MD&A should hold both realities at once: the numbers describe where the Company was, while the disclosures describe where it is going. The distance between the two is, in itself, the most useful thing this MD&A can quantify.

FY26 is not the year the agri business arrived. It is the year the capital did — and the balance sheet has been rearranged accordingly, well ahead of the operations that will eventually justify it.

What the Company actually did during FY26

Stripped of narrative, the Company bought and sold goods — recording ^1,547.8 Lakh of stock-in-trade purchases against ^1,615.8 Lakh of revenue from operations — and carried no inventory, no manufacturing cost base and negligible fixed assets (net block of ^0.6 Lakh) at year end. It employed a lean team, incurred modest administrative overheads, and generated a small, positive operating profit. This is the profile of an asset-light trading intermediary, not a processor, cultivator or manufacturer. The Companys own quarterly presentation for Q1 FY27 describes the business plainly as "currently engaged in agri-commodity trading," which is accurate as a forward description of intent but is not yet fully reflected in what the FY26 numbers contain — a distinction this MD&A returns to in Sections 3 and 4.

The strategic pivot, in one paragraph

On 18 March 2026, the conversion of promoter warrants delivered a change in control, lifting promoter and promoter-group holding to 80.66% and injecting ^8,335.5 Lakh of fresh equity capital into the Company. Within four months, the Objects Clause was expanded (15 July 2026), the Board and senior management were substantially reconstituted (4-15 July 2026), a new corporate office opened in Metoda, Rajkot (15 July 2026), and the Board approved a rights issue of up to ^90 Crore (5 August 2026) earmarking ^70 Crore of net proceeds for controlling stakes in two food-sector companies — Fresita Food Private Limited and Urja Protein India Private Limited. Each of these is examined in turn across the sections that follow.

2 Corporate Developments & Governance Transition

Few small-cap companies compress this much structural change into a single financial year. For shareholders, the sequencing matters as much as the individual events — each step created the precondition for the next, and understanding the chain is essential to reading the FY26 financial statements correctly, since several of the years most significant balance sheet movements (Section 4) and the entire capital-raising rationale (Section 7) trace directly back to this timeline.

Timeline of control, governance and capital events

DATE	EVENT	SIGNIFICANCE TO SHAREHOLDERS
18 Mar 2026	Change in control	Conversion of 72,00,000 warrants (70,00,000 to Onix Renewable Limited; 1,00,000 each to Mr. Divyeshkumar Savaliya and Mr. Piyushkumar Savaliya) lifted promoter and promoter-group holding to 80.66% and added ^8,335.5 Lakh of fresh equity, transforming the balance sheet overnight.
4-15 Jul 2026	Governance transition	Board and senior management reconstituted; statutory committees re-formed. The FY26 audited accounts are signed by a Managing Director and CFO who had already left office by the time the Draft Letter of Offer was filed three weeks later.
15 Jul 2026	Objects Clause expanded	Companys permitted activities widened from solar trading to agriculture, horticulture, food processing, warehousing and allied infrastructure — the legal precondition for the Fresita Food and Urja Protein investments.
15 Jul 2026	New corporate office	Corporate office relocated/opened at Metoda, Rajkot, Gujarat — positioning the Company inside the state where the bulk of its counterparty and trading relationships, both legacy-solar and prospective-agri, are concentrated (see Section 8).
5 Aug 2026	Rights Issue approved	Board approved a rights issue of up to ^90 Crore, with ^70 Crore of net proceeds earmarked for controlling (>51%) stakes in Fresita Food and Urja Protein — the capital-raising vehicle for the strategic pivot (Section 7).

Board composition and the leadership handover

As of the date of the Companys most recent regulatory filing, the Board comprises five directors: one Managing Director, two Non-Executive Directors and two Independent Directors, one of whom is a woman — a composition that satisfies the Companies Act, 2013 and SEBI Listing Regulations requirements on board size and independence. Four of the five directors joined the Board in 2026 itself; only the Independent Director appointed in July 2024 predates the change-in-control period.

DIRECTOR	DESIGNATION	ON BOARD SINCE	OTHER DIRECTORSHIPS
Mr. Yagnik A. Satasiya	Chairperson & Non-Executive Director	4 Jul 2026	Nexusgate Ventures Ltd; Hydromonia Energy Pvt Ltd
Mr. Shirish D. Savaliya	Managing Director	4 Jul 2026	Onix Trans Enersol Pvt Ltd; Onix Trans Stellar Pvt Ltd
Mr. Shivam G. Zaladi	Non-Executive Director	8 Dec 2025	Colo Farmtech Pvt Ltd
Mr. Dhairyakumar M. Thakkar	Independent Director	17 Jul 2024	Laxmi Security (Gujarat) Ltd; Bhagyalaxmi Steeltech Pvt Ltd; Vimal Dairy Ltd; Omkar Overseas Ltd
Ms. Minal S. Jain	Independent Director (Woman)	15 Jul 2026	Nil

Directorships as disclosed in the Draft Letter of Offer dated 6 August 2026. Two directors (Mr. Satasiya and Mr. Savaliya) hold other directorships in Onix-affiliated entities — a natural consequence of the change in control and a related-party dimension worth tracking as the Companys transaction volume with such entities grows (see Section 4s discussion of trade receivables, and Section 8, RisRs. 6).

A signature-block detail worth noting

The FY26 audited financial statements — Balance Sheet, Profit & Loss, Cash Flow and Notes — carry the signatures of Mr. Chirag Thummar as Managing Director and Mr. Yagnik Satasiya as CFO, dated 30 April 2026. By the date of the Draft Letter of Offer barely three months later, neither individual holds those roles: Mr. Satasiya has moved to

Chairperson, and the Managing Directors chair now belongs to Mr. Shirish Savaliya. This is not unusual for a company mid-transition, and no irregularity is implied — but it is a useful marker of how fast the leadership base has turned over, and shareholders reviewing the FY26 accounts should read the management commentary in this MD&A as reflecting the Companys board as constituted after the transition, not the signatories on the audited statements themselves.

Key Managerial Personnel

NAME	DESIGNATION	AGE
Ms. Drashti H. Delvadiya	Chief Financial Officer	28
Ms. Namrata Karwa	Company Secretary & Compliance Officer	32

Both Key Managerial Personnel are women, and both are permanent employees of the Company. This is worth reading alongside the Boards one woman Independent Director and the workforce composition in Section 6.

3 Results of Operations

On the surface, FY26 looks like a weaker year than FY25: total revenue fell 31.8% and revenue from operations fell 33.2%. Read only as a headline, that decline invites concern. Read against the cost structure beneath it, the story is materially different — the Company converted a much smaller revenue base into a dramatically better bottom line, because the cost of achieving that revenue fell even faster than the revenue itself.

Standalone Profit & Loss — FY26 vs FY25

PARTICULARS	FY26	FY25	YOY %
Revenue from Operations	1,615.84	2,419.10	(33.2%)
Other Income	34.98	0.06	+543x
Total Revenue	1,650.82	2,419.17	(31.8%)
Cost of Materials Consumed	0.00	0.00	—
Purchases of Stock-in-Trade	1,547.83	2,391.07	(35.3%)
Employee Benefits Expense	3.00	7.44	(59.7%)
Finance Cost	0.00	0.03	(98.3%)
Depreciation & Amortisation	0.39	0.00	n.m.
Other Expenses	36.09	18.62	+93.9%
Total Expenses	1,587.31	2,417.15	(34.3%)
Profit Before Tax	63.51	2.02	+31.5x
Tax Expense (Current + Deferred)	18.07	1.51	+ 12.0x
Profit After Tax	45.44	0.51	+88.8x
Basic EPS (K)	0.51	0.03	+ 17.1x
Diluted EPS (K)	0.85	0.03	+28.6x

All figures in K Lakh except EPS. Source: Standalone Financial Statements for the year ended 31 March 2026, audited by A H Mandaliya & Associates, Chartered Accountants.

Reading the reversal: margin expansion, not volume growth

The mechanics of the improvement are visible line by line. Purchases of stock-in-trade — the Companys dominant cost, and effectively its only variable cost, since it carries no inventory and consumes no raw materials in the conventional sense — fell from 98.8% of revenue from operations in FY25 to 95.8% in FY26. That four- percentage-point compression, small as it looks, is the entire explanation for a Profit Before Tax margin moving from 0.08% to 3.85% of total revenue, and a Profit After Tax margin moving from 0.02% to 2.75%. On a much smaller top line, the Company kept proportionally more of what it earned.

A 33% fall in revenue alongside an 89-fold rise in profit is not a contradiction. It is what happens when a low- margin trading book shrinks toward its more profitable transactions and sheds its least efficient ones.

Other income tells a second, quieter part of the story. It rose from a negligible RS. 0.06 Lakh in FY25 to RS. 34.98 Lakh in FY26 — almost entirely interest income of RS. 34.85 Lakh earned on other parties, which, set against the timing of the March 2026 warrant conversion and the resulting cash and advances build-up (Section 4), reads as interest income earned on capital that had already been raised but was not yet deployed into the acquisitions it was raised for. At 2.1% of total revenue, this is not a large number in isolation, but it is a useful marker: some of FY26s profit improvement came from treasury income on idle capital, not from the trading business itself, and shareholders should expect this specific income line to behave differently in FY27 once the Fresita Food and Urja Protein investments are completed and that cash is deployed into operating businesses instead.

Cost discipline, line by line

Every controllable cost line moved favourably except one. Employee Benefits Expense fell 59.7% to RS. 3.0 Lakh — consistent with a company running on a very small core team (Section 6) through a year of significant management transition. Finance Cost fell to a token RS. 4,956 (i.e., under RS. 1,000 rounded) as the Company carried no borrowings of consequence. The one outlier is Other Expenses, which rose 93.9% to RS. 36.09 Lakh, driven by costs directly attributable to the years corporate activity rather than ordinary operations: Legal & Professional Fees (RS. 11.28 Lakh, up from RS. 10.53 Lakh), ROC Expense (RS. 6.22 Lakh, up sharply from RS. 0.39 Lakh — consistent with the volume of regulatory filings around the change in control and objects amendment), O&M Expenses (RS. 7.85 Lakh combined, versus nil in FY25), and Postage & Courier costs (RS. 1.47 Lakh combined, versus a negligible base) — largely the paper trail of a company restructuring itself, not a deterioration in day-to-day cost control.

Quarterly momentum into FY27

The Companys Q1 FY27 (quarter ended 30 June 2026) unaudited results show the improving trend has continued and, on a quarterly run-rate basis, accelerated. Total revenue of RS. 1,847.4 Lakh in the quarter already exceeds the whole of FY26s RS. 1,650.8 Lakh, and Profit After Tax of RS. 165.97 Lakh compares with a loss of RS. 49.34 Lakh in the equivalent quarter a year earlier (Q1 FY26) — a swing of over RS. 215 Lakh within twelve months on a quarter-to- quarter basis. Basic EPS for the quarter alone, at RS. 1.85, already exceeds full-year FY26 basic EPS of RS. 0.51.

METRIC (K LAKH)	Q1 FY26	Q3 FY26	Q4 FY26	FY26 (FULL YEAR)	Q1 FY27
Total Revenue	25.0	89.3	n.d.	1,650.7	1,847.4
Profit After Tax	(49.3)	(8.9)	84.5	63.8	166.0

Quarterly figures as disclosed in the Companys Q1 FY27 investor presentation; "n.d." denotes not disclosed in the source presentation. FY26 full-year PAT figure of RS. 63.8 Lakh shown here reflects the presentations own quarterly- composition chart and should be read alongside the audited FY26 PAT of RS. 45.4 Lakh in the table above; the difference likely reflects presentation-level rounding or a pre-tax versus post-tax framing in the underlying chart and is flagged here for transparency rather than reconciled, since the audited financial statements are the authoritative source.

This should temper, not amplify, shareholder enthusiasm. A single strong quarter driven partly by interest income on undeployed rights-issue-adjacent capital and partly by a much smaller trading base is not yet evidence of a structurally larger or more resilient earnings stream. It is, at most, confirmation that the cost discipline visible in FY26 has persisted into the new financial year — genuinely useful information, but not a substitute for watching how the same P&L behaves once Fresita Food and Urja Protein are consolidated and their considerably larger, considerably thinner-margin revenue bases (Section 7) begin to dominate the group numbers.

4 Balance Sheet & Capital Structure

If Section 3 showed a company whose income statement improved on a shrinking base, this section shows why the balance sheet changed almost beyond recognition. Total assets grew 32.7 times over — from RS. 264.96 Lakh at 31 March 2025 to RS. 8,665.52 Lakh at 31 March 2026 — an absolute increase of RS. 8,400.55 Lakh in a single year. Nearly all of that growth traces to one line, and understanding that line is the single most important thing a shareholder can take from this MD&A.

Standalone Balance Sheet — summary

PARTICULARS	31 MAR 2026	31 MAR 2025	MOVEMENT
Non-Current Assets	229.00	197.04	+ 16.2%
— of which Long-Term Loans & Advances	216.36	185.00	+ 17.0%
Current Assets	8,436.51	67.92	+ 124x
— Trade Receivables	414.16	0.00	n.m.
— Cash & Cash Equivalents	751.92	3.38	+222x
— Short-Term Loans & Advances (Advances to Suppliers)	7,258.23	64.54	+ 112x
— Other Current Assets	12.20	0.00	n.m.
Total Assets	8,665.52	264.96	+32.7X
Equity Share Capital	975.45	250.45	+3.9x
Other Equity (Securities Premium + Retained Earnings)	7,645.29	(12.65)	n.m.
Total Equity (Net Worth)	8,620.74	237.80	+36.3x
Total Non-Current Liabilities	15.50	2.50	+6.2x
Total Current Liabilities	29.28	24.66	+ 18.7%
Total Equity and Liabilities	8,665.52	264.96	+32.7X

All figures K Lakh. Source: Standalone Balance Sheet as at 31 March 2026, audited by A H Mandaliya & Associates.

The RS. 7,258 Lakh question: what Advances to Suppliers actually is

A single asset — "Short-Term Loans and Advances," disclosed in the Notes as entirely "Advances to Suppliers" — accounts for RS. 7,258.23 Lakh, or 83.8% of the Companys entire balance sheet at year end, up from RS. 61.26 Lakh (23.1% of a much smaller balance sheet) a year earlier. This is, without qualification, the defining fact of Sarda Proteins FY26 balance sheet, and it deserves more scrutiny than a single line item usually receives.

The Companys own account-level records (maintained as part of the FY26 financial statement working papers) show precisely which counterparties this balance sits with. The composition is unambiguous, and it does not point where the Companys public narrative points.

Advances to Suppliers — counterparty breakdown, 31 March 2026

COUNTERPARTY	f LAKH	% OF TOTAL ADVANCES	% OF TOTAL ASSETS
Kunal Power	2,946.95	40.6%	34.0%
Systronic Engineers Private Limited	1,253.62	17.3%	14.5%
KRISH Engineers	950.01	13.1%	11.0%
Nexgenix Solar Manufacturing Private Limited	749.15	10.3%	8.6%
Astha Energy	350.00	4.8%	4.0%
Voltas Energy	350.00	4.8%	4.0%
Power Tech	150.05	2.1%	1.7%
Om Power	150.02	2.1%	1.7%
Onix Renewable Limited (Promoter)	40.81	0.6%	0.5%
All other counterparties (professional, regulatory, misc.)	317.62	4.4%	3.7%
Total Advances to Suppliers	7,258.23	100.0%	83.8%

Compiled from the Companys account-wise supporting schedules to the FY26 audited financial statements.

Every one of the eight largest counterparties — Kunal Power, Systronic Engineers, KRISH Engineers, Nexgenix Solar Manufacturing, Astha Energy, Voltas Energy, Power Tech, Om Power — is a solar-sector name. Together they account for 95.6% of the entire advances balance and 80.1% of the Companys total assets.

This is worth stating plainly, because it runs against the surface impression a reader would form from the Companys investor presentation and rights-issue materials, both of which foreground the agricultural pivot. The single largest asset on the FY26 balance sheet is not agri-related at all — it is a deep, concentrated commitment to the legacy solar-module and renewable-equipment trading business the Company is in the process of moving away from. Kunal Power alone represents RS. 2,946.95 Lakh, or just over a third of total assets; the top four counterparties together represent 81.3% of the advances balance and 68.1% of everything the Company owns.

None of this indicates impropriety. Advances to suppliers are a normal feature of a trading business that pays ahead of delivery to secure product and pricing, and the promoter entity itself, Onix Renewable Limited, appears in this list for a comparatively modest RS. 40.81 Lakh — hardly a sign of related-party favouritism. But the scale and concentration deserve three specific shareholder questions that this MD&A can pose without answering, since the underlying commercial terms are not disclosed in the materials reviewed: What is the expected delivery timeline against these advances, and are any past due? What recourse does the Company have if a counterparty of this concentration — Kunal Power in particular — is unable to perform? And, most pointedly, does the Company intend to unwind this solar-trading working-capital exposure as the agri pivot proceeds, or will it run in parallel with the new Fresita Food and Urja Protein investments, effectively doubling the Companys exposure to two entirely different sectors at once?

Net worth: a warrant conversion, not an earnings story

Total Equity rose 36.3 times, from RS. 237.80 Lakh to RS. 8,620.74 Lakh, and the Companys own investor materials are appropriately direct about the cause: the movement reflects the conversion of promoter warrants into 70,00,000 equity shares in March 2026, not retained earnings. The arithmetic bears this out precisely. Equity Share Capital grew by RS. 725.00 Lakh (from RS. 250.45 Lakh to RS. 975.45 Lakh) and Securities Premium contributed a further RS. 7,612.50 Lakh — together accounting for RS. 8,337.50 Lakh of the RS. 8,382.94 Lakh increase in net worth. FY26s Profit After Tax of RS. 45.44 Lakh, while a substantial improvement on FY25 in relative terms, represents just 0.5% of the years net worth increase.

Net Asset Value per share rose correspondingly, from RS. 13.78 to RS. 96.04 — a sevenfold increase — while Return on Net Worth actually improved to 15.07% from 0.21%, a function of a much larger equity base being deployed (even if only into advances, for now) rather than sitting idle. Shareholders should read the NAV increase as a capital-structure event: the Company is worth more per share today primarily because promoters and promoter- group members paid a real premium (RS. 115 per share, against a RS. 10 face value) to convert their warrants, not because the underlying business generated the wealth.

CAPITAL METRIC	FY26	FY25	MOVEMENT
Net Worth (K Lakh)	8,620.74	237.80	+36.3x
NAV per Share (K)	96.04	13.78	+7.0x
Return on Net Worth	15.07%	0.21%	+ 14.9 pts
Issued Shares (Lakh)	89.76	17.26	+5.2x
Promoter & Promoter Group Holding	80.66%	n.a.*	—

‘Promoter shareholding percentage as at the date of the Draft Letter of Offer (post warrant conversion); a directly comparable pre-conversion FY25 figure is not disclosed in the materials reviewed.

Trade receivables and the first agri-adjacent counterparties

Trade Receivables of RS. 414.16 Lakh, against zero a year earlier, is a smaller but genuinely new development. The account-wise breakdown shows five counterparties — Electro Products (RS. 76.70 Lakh), Kian Cotspin LLP (RS. 3.44 Lakh), Onix Trans Stellar Private Limited (JV with Onix Tech Energy LLP) (RS. 33.03 Lakh), Solsticepower (RS. 215.60 Lakh) and Unique Sun Power Private Limited (RS. 85.39 Lakh) — and here too, the pattern skews toward solar and renewable-energy-linked names rather than agricultural ones, with Onix Trans Stellar representing a related-party receivable through the Managing Directors other directorship. This reinforces the same conclusion as the advances-to-suppliers analysis: as of 31 March 2026, the Companys actual counterparty exposure — on both the paying and receiving side of its balance sheet — remains rooted in the business it is moving away from, not the one it has announced.

What the balance sheet does not yet contain

Equally instructive is what is absent. Inventories are nil (down from nil), consistent with a pure intermediary trading model that never takes physical stock risk. Net Property, Plant & Equipment stands at just RS. 0.60 Lakh — two line items, a computer/laptop (RS. 0.26 Lakh net) and digital assets/software (RS. 0.35 Lakh net), both acquired during the year. Total Borrowings are effectively zero on both a short-term and long-term basis. This is, in short, a balance sheet with almost no physical or operating infrastructure of its own — every rupee of the Companys scale currently sits in cash, receivables and advances, not in plant, warehouses, cold storage or processing capacity. That infrastructure, if it arrives, will most likely arrive through the Fresita Food and Urja Protein acquisitions (Section 7), which already possess it — a sensible sequencing, provided shareholders understand that Sarda Proteins standalone, absent its subsidiaries-to-be, remains an asset-light shell as at the balance sheet date.

5 Cash Flow Analysis

The cash flow statement is where Sections 3 and 4 meet, and it resolves what might otherwise look like a puzzle: how does a company with a healthy, improving Profit After Tax also record a large negative operating cash flow in the same year? The answer is that the P&L and the balance sheet were responding to two different events happening simultaneously — ordinary trading on one hand, and a large, deliberate capital deployment on the other — and the cash flow statement is what lets a shareholder tell them apart.

Standalone Cash Flow Statement — summary

PARTICULARS	FY26	FY25
Net Profit Before Tax	45.44	2.02
Add: Non-cash & other adjustments	10.93*	1.97
Operating Profit before Working Capital Changes	10.93	1.97
Increase in Trade & Other Receivables	(7,651.41)	(31.34)
Increase in Trade Payables & Other Liabilities	4.62	18.32
Net Cash Used in Operating Activities	(7,635.87)	(11.05)
Net Cash Used in / from Investing Activities	35.89	0.06
Net Cash from Financing Activities	8,348.52	2.50
Net Increase / (Decrease) in Cash	748.54	(8.49)
Cash & Cash Equivalents, Closing	751.92	3.38

All figures K Lakh. ‘Operating Profit before Working Capital Changes shown here (RS. 10.93 Lakh) differs from Net Profit Before Tax (RS. 63.51 Lakh, per Section 3) due to add-backs for depreciation and finance cost and a deduction for interest income already captured under Other Income; figures as per the audited Standalone Cash Flow Statement.

Operating cash flow: a working-capital story, not a profitability one

The operating section shows a swing of RS. 7,651.41 Lakh in trade and other receivables — an outflow, in cash flow terms, because it represents cash paid out to build up the advances-to-suppliers and trade-receivables balances quantified in Section 4. This single line overwhelms everything else in the operating section and turns what would otherwise have been a modest positive operating cash flow (consistent with the years positive PAT) into a RS. 7,635.87 Lakh outflow. It is the cash-flow mirror image of the balance sheet finding in Section 4: the Company did not lose money operationally in FY26 — it deployed a very large amount of cash into working capital, concentrated in solar-sector counterparty advances, and that deployment shows up as a cash outflow even though it shows up as an asset, not a loss, on the balance sheet.

Read together, Sections 3, 4 and 5 describe one event, seen from three angles: the Company raised capital, and within the same financial year, moved the overwhelming majority of it into advances against a legacy trading book — before a rupee of it reached the agri-food strategy the capital raise is now being asked to fund.

Financing activities: the capital that made it possible

The financing section shows exactly where the cash to fund that build-up came from: RS. 8,335.52 Lakh from the issue of share capital (the warrant conversion detailed in Section 4) and a further RS. 13.00 Lakh from proceeds of long-term borrowings, for total financing inflows of RS. 8,348.52 Lakh. This figure exceeds the operating cash outflow by only RS. 712.65 Lakh (a coverage ratio of 1.09 times) — in other words, financing inflows and operating outflows were almost exactly matched in FY26, with the small residual, together with a modest investing inflow of RS. 35.89 Lakh (chiefly the interest income discussed in Section 3, net of a small PP&E purchase), accounting for the years net cash increase of RS. 748.54 Lakh.

This tight matching is worth sitting with. It suggests the working-capital deployment into advances was not incidental — it absorbed almost the entirety of the capital raised through the warrant conversion, within the same financial year that capital arrived. Whether that timing reflects a deliberate treasury strategy (advances placed to secure supply or pricing ahead of the agri pivots execution) or simply reflects the momentum of an existing solar-trading relationship base that continued operating at scale even as the Companys strategic attention moved elsewhere is not something the financial statements alone can answer. It is, however, precisely the kind of question the forthcoming Rights Issue — which proposes to raise a further RS. 90 Crore, on top of capital already substantially deployed into advances rather than the stated strategic objects — should prompt shareholders to ask before subscribing.

A closing cash position that, for the first time, gives the Company real liquidity

Whatever the merits of how it got there, the Company ends FY26 in a materially stronger liquidity position than it has likely had in years: RS. 751.92 Lakh in bank balances, up 222 times from RS. 3.38 Lakh a year earlier, split across HDFC Bank (RS. 1.15 Lakh) and two ICICI Bank accounts (RS. 656.01 Lakh and RS. 94.76 Lakh). For a company of this scale, this is a genuine and welcome improvement in balance-sheet resilience — the question for FY27 is not whether the Company has cash, but whether that cash, together with the proposed Rights Issue proceeds, is deployed with the discipline and transparency shareholders will be entitled to expect once RS. 90 Crore of fresh capital is on the table.

6 Human Capital

Sarda Proteins is run, as at the date of this report, by a workforce of eight — three women and five men — a headcount that maps closely onto the Companys own asset-light operating model described in Sections 3 and 4. This is not a company that carries a large administrative or field workforce; it is a lean corporate structure whose entire annual Employee Benefits Expense for FY26 was ^3.0 Lakh, down from ^7.44 Lakh in FY25.

Reading headcount against capital under management

The juxtaposition is worth stating directly: a team of eight people, at a combined annual cost of ^3.0 Lakh, is presently responsible for a balance sheet holding ^8,665.5 Lakh in assets — including the ^7,258.2 Lakh advances- to-suppliers concentration examined in Section 4 — and is about to be asked to oversee the deployment of a further ^89 Crore of rights-issue net proceeds into two operating businesses in a sector (food processing and agritrading) that is new to the Company. This is not, in itself, a criticism of the current team; lean structures are appropriate for asset-light trading operations, and the Companys disclosed intention to acquire Fresita Food and Urja Protein — each with its own established management and operating personnel — suggests the incoming operating capability is meant to arrive with the acquisitions rather than be built organically at the Sarda Proteins level.

It is, however, a governance and execution-capacity question shareholders are entitled to ask directly: as the Rights Issue proceeds are deployed and two new subsidiaries with materially larger revenue bases (^333.34 Crore and ^3.80 Crore respectively, per Section 7) are consolidated, will the Companys own core team — finance, compliance and oversight functions in particular — scale commensurately, or will oversight of a considerably larger and more complex group rest on the same eight-person base that currently manages a trading shell?

Representation in leadership

Both Key Managerial Personnel disclosed by the Company — the Chief Financial Officer, Ms. Drashti Delvadiya, and the Company Secretary & Compliance Officer, Ms. Namrata Karwa — are women, and the Board includes one woman Independent Director, Ms. Minal Jain, satisfying the statutory requirement for womens representation on the Board of a listed company under the Companies Act, 2013 and SEBI Listing Regulations. Set against a workforce that is 37.5% women (three of eight), the Companys leadership composition at the KMP level is, in relative terms, more balanced than its overall headcount — worth noting as a positive, if modestly scaled, governance data point.

7 Key Risks & Forward-Looking Considerations

The Companys own Draft Letter of Offer discloses a comprehensive risk-factor section running to fifteen numbered risks and beyond. Rather than reproduce that disclosure in full, this MD&A highlights the risks that this analysiss own reading of the FY26 numbers suggests deserve the closest shareholder attention — several of which are visible in the financial statements themselves, not only in the qualitative risk-factor language.

1. Concentration risk in the legacy advances book

As detailed in Section 4, 95.6% of the Companys ^7,258.2 Lakh advances-to-suppliers balance sits with solar- sector counterparties, with the single largest name (Kunal Power) alone representing 40.6% of that balance and 34.0% of total assets. A shortfall, delay or dispute with any of the four largest counterparties — which together represent 81.3% of the advances balance — would have an outsized effect on a balance sheet of this size. This concentration is not explicitly broken out as a named risk factor in the Companys own disclosures, which frame supplier dependence in general terms; shareholders reading only the qualitative risk factors would not learn the degree of concentration this MD&As account-level analysis reveals.

2. Execution and integration risk on two dissimilar acquisitions

The Companys own risk factors acknowledge, directly and candidly, that agriculture, horticulture and allied activities are new to the Company, that it has limited operating experience managing agricultural and foodprocessing operations, and that there is no assurance the anticipated synergies from the Fresita Food and Urja Protein acquisitions will be realised within the expected timeframe or at all. Section 7 of this MD&A adds a further dimension: the two targets require fundamentally different post-acquisition management — Fresita Food needs disciplined working-capital and leverage management on a fast-scaling, thin-margin platform, while Urja Protein

needs a genuine operating turnaround from negative net worth. Successfully running both simultaneously, with the Companys current eight-person team (Section 6), is a materially harder task than integrating either alone.

3. Geographic concentration in Gujarat

The Companys disclosed risk factors note that a significant portion of its business operations and customer base is concentrated in Gujarat, and this MD&As own findings reinforce it: the new corporate office is in Metoda, Rajkot; several of the largest advances-to-suppliers and trade-receivable counterparties (Kunal Power, Systronic Engineers, Onix Trans Stellar, Solsticepower) appear to be Gujarat-linked entities based on the Companys other disclosures; and Urja Proteins manufacturing facility and peanut sourcing are also Gujarat-based. A region- specific disruption — regulatory, climatic or economic — would touch a disproportionate share of the Companys counterparty base across both its legacy and prospective businesses simultaneously.

4. No insurance coverage

The Company discloses directly that it does not currently maintain insurance coverage for its business operations, assets or products, exposing it to uninsured losses from damage, business interruption, transit losses or liability claims. For a company about to hold, indirectly, food-manufacturing infrastructure and inventory through Urja Protein and Fresita Food, this is a gap shareholders should expect to see closed as part of the acquisition integration process, and its resolution (or continuation) is worth tracking in subsequent disclosures.

5. Minimum Public Shareholding overhang

Promoter and promoter-group holding of 80.66% sits meaningfully above the regulatory minimum public shareholding threshold, and the Company has stated its intention to bring this down through the promoter forgoing its Rights Entitlement in the proposed Issue and through other compliance measures within prescribed timelines. Until this is resolved, the Company carries a standing regulatory compliance obligation that could, depending on how it is executed, affect share price dynamics, or in the case of continued non-compliance, invite regulatory action — a risk worth monitoring alongside, not instead of, the operational risks above.

6. Related-party transaction volume likely to grow

The Companys risk factors acknowledge past and likely future related-party transactions, and this MD&As own review found early evidence of this: Onix Renewable Limited appears both as a modest advances-to-suppliers counterparty and, through the Managing Directors other directorships (Onix Trans Enersol, Onix Trans Stellar), as a trade-receivable counterparty. As the Companys scale and transaction volume grow through the proposed acquisitions, the volume and materiality of related-party transactions should be expected to grow with it, making continued arms-length pricing discipline and Audit Committee oversight an area warranting sustained shareholder attention.

7. No firm arrangement of finance beyond the Rights Issue itself

The Draft Letter of Offer confirms that none of the Objects of the Issue have been appraised by any bank or financial institution, and that the Company proposes to meet the entire requirement of funds for these Objects from the Net Proceeds of the Issue itself — meaning the ^70 Crore acquisition plan has no committed fallback financing if the Rights Issue is undersubscribed or its terms change materially. Given that the Board retains discretion to allot any under-subscribed portion to specific investors (to be disclosed only two days before the Issue Opening Date), shareholders should treat the final subscription outcome, and the identity of any specific allottees, as material information still to come.

8 Outlook

Sarda Proteins enters FY27 as a company that has already done the hard part of raising capital and signalling strategic intent, and has not yet done the harder part of proving it can run two new, dissimilar operating businesses profitably and safely. The FY26 numbers, read closely rather than headline-first, describe a lean, cost- disciplined trading shell that improved its margins on a shrinking revenue base, raised a very large amount of capital through a warrant conversion, and then deployed the overwhelming majority of that capital into advances against its legacy solar-trading counterparties — well before a rupee of it reached the agri-food strategy the Company has built its public narrative around.

None of this makes the strategic pivot wrong. Fresita Food is a genuinely fast-growing, profitable global sourcing platform, even if highly leveraged and richly priced on current earnings; Urja Protein is a credible, well-certified early-stage manufacturing bet on a branded, export-oriented food category, even if currently loss-making and technically insolvent on a book basis. Both are the kind of assets that could, over several years, turn a solartrading shell into a genuine integrated agri-food business. But the FY26 financial statements make clear that this

transformation has not happened yet — it has been funded, approved and announced, and now needs to be executed.

The test for FY27 is simple to state and hard to satisfy: will the ^70 Crore earmarked for Fresita Food and Urja Protein actually complete, integrate cleanly, and begin showing up in a consolidated P&L and balance sheet that looks meaningfully different from the one this MD&A has just described — or will the advances-to-suppliers concentration in the legacy solar book prove stickier than the transition narrative suggests?

For shareholders considering participation in the proposed Rights Issue, the analysis in this MD&A points to three practical watch-items for the months immediately ahead: first, whether the Fresita Food and Urja Protein transactions complete on the disclosed terms and within the FY26-27 deployment schedule the Company has set for itself; second, whether the ^7,258 Lakh solar-sector advances concentration identified in Section 4 begins to unwind, is explained with greater counterparty-level transparency, or persists unchanged alongside the new agri investments; and third, whether the Companys core team and governance structure — currently eight people overseeing a balance sheet forty times its FY25 size — visibly strengthens in step with the scale and complexity the two acquisitions will bring.

Sarda Proteins Limited is, in the most literal sense, a company mid-sentence. FY26 wrote the capital-raising clause; FY27 will have to write the execution clause for the story to hold together. This MD&A has tried to give shareholders the full sentence as it stands today — including the parts the Companys own presentations understandably emphasise less.

This Management Discussion & Analysis has been prepared independently from the Companys audited standalone financial statements for FY26 and FY25, its Q1 FY27 investor presentation, and its Draft Letter of Offer dated 6 August 2026, for the purpose of shareholder analysis. It is not a substitute for the Companys own statutory disclosures, and readers are encouraged to review the underlying filings referenced throughout this document.