Scarnose International Ltd Management Discussions

1. Introduction

Scarnose International Limited ("the Company") is a diversified global leader with a strong presence across the pharmaceutical, agrochemical, healthcare, and personal hygiene industries. The Company specializes in the manufacturing, trading, warehousing, clearing and forwarding, purchasing and selling, marketing, and brand establishment of a wide range of products. These include active pharmaceutical ingredients (APIs), oncology drugs, antibiotics, vaccines, pharmaceutical formulations, personal hygiene products, fertilizers, and agricultural chemicals, catering to human, animal, and agricultural needs.

We aim to deliver high-quality products that meet regulatory standards, create value for our stakeholders, and expand our market share in both established and emerging markets.

2. Overview of the Global Economy (2024)

As of 2024, the global economy is navigating a period of slow but steady recovery after the significant disruptions caused by the COVID-19 pandemic, geopolitical tensions, and supply chain challenges. While growth rates have moderated compared to the pre-pandemic boom years, several factors continue to shape the global economic landscape.

Key Global Economic Drivers:

i) Post-Pandemic Recovery:

• Many economies, especially in developed nations, are recovering from the pandemics effects, but the pace of recovery varies. Advanced economies like the U.S., Europe, and Japan have rebounded, driven by fiscal and monetary stimuli, but growth rates are expected to slow in the coming years.

• Emerging markets, particularly in Asia and Africa, are experiencing rapid growth, though many face challenges such as inflation, political instability, and debt concerns.

ii) Inflation and Monetary Policy:

• Global inflation has been a significant concern, with many central banks?such as the U.S. Federal Reserve, the European Central Bank (ECB), and the Bank of England (BoE)? raising interest rates to combat high inflation. In the short term, inflation remains elevated in many countries, especially in energy and food sectors.

• Central banks have been moving towards tightening monetary policy, and while inflationary pressures have moderated somewhat, they continue to affect economic growth in both developed and emerging economies.

iii) Geopolitical Risks:

• The ongoing Russia-Ukraine conflict has disrupted global energy supplies and commodity markets, particularly in Europe. The war has led to higher energy prices, shortages in key raw materials, and uncertainty in the global economy.

• U.S.-China tensions, especially over trade, technology, and intellectual property, continue to create volatility in global markets, affecting both supply chains and international investments.

iv) Technology and Digital Transformation:

• Technological innovation is a key driver of future growth, especially in sectors like AI, 5G, biotechnology, and renewable energy. These advancements are creating new opportunities, particularly in green technology, fintech, and medtech industries.

• Countries and companies that invest in digital infrastructure are well-positioned for longterm growth.

v) Energy Transition:

The transition to renewable energy is accelerating globally, as countries aim to reduce dependence on fossil fuels and mitigate climate change. This transition is shaping global energy markets and creating new business opportunities in solar, wind, electric vehicles, and battery technologies.

3. Overview of Business Performance

In the fiscal year ending [insert date], Scarnose International Limited successfully expanded its market reach and achieved notable growth across multiple business segments, including pharmaceutical manufacturing, agrochemicals, personal hygiene products, and more. Despite facing some global supply chain challenges and market fluctuations, the Company continued to excel in both production capacity and strategic partnerships.

Key performance highlights for the year include:

• Revenue Growth: A [percentage]% increase in total revenue, driven by robust sales across key product categories such as oncology drugs, antibiotics (including beta-lactam and cephalosporins), and personal hygiene products.

• Global Expansion: Scarnose made significant strides in its international footprint, with new market entries in [insert regions or countries], contributing to an overall increase in global sales.

• Product Launches: Successful launch of [insert product name, e.g., new API for oncology or a new line of disinfectant products], with strong customer acceptance and market penetration.

4. Industry Structure and Developments

Our business is positioned at the intersection of sustainable agriculture and animal health, supplying high-quality, environmentally responsible products to farmers, agribusinesses, and distributors across countries.

Our core product lines include:

• Animal Food Supplements: Tailored nutritional solutions designed to improve livestock health, growth efficiency, and productivity. These include mineral mixes, vitamins, probiotics, and enzyme-based additives.

• Organic Fertilizers: Environmentally friendly soil enhancers derived from natural and biodegradable inputs, aimed at improving soil health and promoting sustainable agriculture.

• Personal hygiene including Sanitary Napkins

The personal hygiene industry in India continues to witness steady growth driven by increasing awareness, rising disposable incomes, government initiatives, and changing lifestyles. Within this, the feminine hygiene segment, particularly sanitary napkins, is experiencing significant expansion, with deeper penetration in rural areas and robust urban demand.

Government programs like Swachh Bharat Abhiyan, Beti Bachao Beti Padhao, and free distribution initiatives in schools have positively impacted the adoption of sanitary hygiene products. Additionally, the rise in e-commerce and digital media has enhanced product accessibility and consumer awareness.

According to industry estimates, the Indian sanitary napkin market is expected to grow at a CAGR of 12-14% over the next five years. Multinational and domestic players are investing in product innovation, eco-friendly alternatives, and distribution efficiency to capitalize on this momentum.

5. Opportunities and Threats Opportunities:

• Growing health and hygiene awareness across all income groups

• Expansion into Tier II and Tier III cities through affordable product lines

• Rising demand for organic and biodegradable sanitary products

• Scope for product diversification (e.g., panty liners, menstrual cups)

• Potential in B2B partnerships with government and NGOs for distribution Threats:

• Increasing competition from private-label and regional players

• Price sensitivity and low per capita usage in rural areas

• Rising raw material and logistics costs

• Regulatory changes and evolving environmental standards

• Social taboos and misinformation, particularly in conservative geographies

The global demand for organic and sustainable farming inputs continues to rise, driven by:

• Rising consumer demand for organic food products.

• Increased focus on animal welfare and disease prevention.

• Regulatory pressures reducing the use of antibiotics and synthetic additives.

• Government incentives promoting sustainable agriculture.

The animal nutrition and organic fertilizer industries are projected to grow at CAGR of [insert]% through [year], presenting significant opportunities for innovation and market penetration

6. Segment-Wise / Product-Wise Performance A. Organic Fertilizers (Trading)

• Revenue & Volume: Revenue from trading of organic fertilizers was 80.14% of the total revenue, driven by improved distribution and seasonal demand.

• Drivers: Increased farmer awareness of soil health and subsidies/extension programs; growth in institutional buyers (agri-input retailers and cooperatives).

• Challenges: Fragmented supplier base, quality variability, and dependence on monsoon patterns affecting buying cycles.

• Actions Taken: Strengthened vendor audits and quality control, added SKU rationalisation, rolled out farmer education programs and bundling with soil testing services.

B. Animal Food Supplements (Trading & Distribution)

• Revenue & Volume: 19.16% of the total revenue growth led by higher off-take of protein supplements and probiotics for poultry and aquaculture.

• Drivers: Rising intensification, disease prevention focus, and shift to performance nutrition.

• Challenges: Volatility in commodity feed inputs and logistics costs.

7. Outlook

We expect the demand for personal and feminine hygiene products to remain robust in FY 2025-26, supported by favorable demographics, rising health consciousness, and supportive policy frameworks. The company will focus on:

• Expanding rural distribution and digital sales channels

• Launching new variants focused on comfort, sustainability, and affordability

• Increasing investment in consumer education campaigns

• Strengthening supply chain efficiency to mitigate input cost volatility

8. Risks and Concerns

The company remains e8xposed to risks arising from:

• Volatility in global prices of pulp, SAP (super absorbent polymers), and packaging material

• Potential regulatory constraints on plastic usage in sanitary products

• Shifts in consumer preference towards sustainable alternatives

• Dependency on third-party manufacturing in certain regions

Mitigation measures include hedging raw material exposure, investing in R&D for sustainable solutions, and diversifying sourcing channels.

9. Internal Control Systems and Their Adequacy

The company has robust internal control systems commensurate with the size and nature of its operations. These systems ensure compliance with applicable laws and regulations, safeguard company assets, and enhance operational efficiency. Regular internal audits and risk assessments are conducted, and findings are reviewed by the Audit Committee.

10. Financial Performance Overview

• Revenue from operations: 1210.16(in lakh)

• Net Profit :19.10(in Lakhs)

• Earnings per Share (EPS): 0.61(in Rs)

• Working capital and liquidity remained strong, aided by disciplined cost management and efficient inventory turnover.

11. Environmental, Social, and Governance (ESG) Initiatives

The company is committed to sustainability in product design and operations. Highlights include:

• Pilot launch of biodegradable sanitary napkin range

• Waste reduction and energy-saving measures in manufacturing

• Pprograms focused on menstrual health education in rural schools

• Strengthened governance through board diversity and transparent disclosures 1 . Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, or predictions may be “forward-looking statements” within the meaning of applicable laws and regulations. Actual results may differ materially due to economic conditions, government policies, and other subsequent developments.

The Company has delivered a strong year of growth, operational efficiency, and innovation. As we look ahead, we remain committed to sustainable value creation for all stakeholders?farmers, customers, employees, shareholders, and the environment.

Registered Office:	By the Order of the Board of
Surbhi Complex, Shop No.2, 2nd Floor,	Scarnose International Limited
Opp.Jaynath Petrol Pump, Gondal
Road, Rajkot Udyognagar, Rajkot,
Rajkot, Gujarat, India, 360002	Sd/-	Sd/-
Place: Rajkot Date: 28/08/2025	Shraddha Dev Pandya	Maharshi Jigar Pandya
	Managing Director	Director
	DIN:09621935	DIN: 09621936