Shiva Global Agro Industries Ltd Management Discussions

ECONOMIC OVERVIEW Global Economy

Global economic growth remained steady at 3.3% in year FY 2024-25, in line with the previous year. Inflation eased to 5.7% in FY 2024-25 from 6.7% in previous year, supported by stabilised post-COVID supply chains and moderation in commodity prices. This allowed major central banks to ease monetary policy, lowering benchmark rates by 50-100 bps during the year.

Nevertheless, geopolitical tensions and policy uncertainties, including trade tariffs, contributed to market volatility and dampened energy demand, leading to softer prices and narrower margins. Transportation fuel margins moderated from elevated levels, while downstream chemicals faced significant pressure due to incremental supply additions, particularly from China.

Domestic Economy

Amid these global headwinds, the Indian economy continued to display resilience. Growth moderated to 6.5% in FY 2024-25 from 9.2% in FY 2023-24, yet India maintained its position as the fastest-growing major economy. Domestic consumption showed mixed trends, with rural demand strengthening while urban consumption moderated. Macro-prudential tightening of credit in FY 2023-24 contributed to slower personal credit growth, easing to 16% in FY 2024-25 from 27% in the prior year. Consumption remained relatively subdued in the first half due to general elections and peak monsoon, but gained momentum in the second half, supported by the festive season and the Mahakumbh. That said, certain segments of both urban and rural demand are yet to achieve full recovery.

Indias external sector remained strong, with a current account deficit below 1% of GDP, underpinned by a resilient services surplus. Net services exports recorded 14% year-on-year growth, driven by sustained momentum in digital services and Global Capability Centres (GCCs). In the latter half, however, capital inflows slowed as FPIs turned net sellers, tightening liquidity. In response, the RBI reduced the CRR by 50 bps in December and subsequently lowered the policy repo rate by a cumulative 100 bps to 5.5% by June 2025.

Looking ahead, India remains well-positioned for sustained high growth, supported by favourable demographics, robust domestic demand, and a resilient macroeconomic foundation.

AGRICULTURE SECTOR OVERVIEW:

GLOBAL AGRICULTURE

The FAO projects global cereal production in 2024 at 2,849 million tonnes, down 0.3% from last year but still the second highest on record. Lower maize output—due to adverse

weather in South America, Europe, and Southern Africa—is partly offset by higher wheat and rice production, with India leading a record rice harvest of 543 million tonnes. Non-food industrial rice use rose 17%, driven by ethanol production in India.

The global cereals stocks-to-use ratio is forecast at 30.1% for 2024/25, slightly below last year but comfortable, with declines mainly in coarse grains. The FAO food price index fell 2% in 2024, led by cereals and sugar (both -13%).

According to the OECD-FAO outlook, Chinas share of global consumption growth is expected to drop from 28% in the last decade to 11% by 2033, while India and Southeast Asia together will contribute 31%, driven by urbanisation and rising incomes.

Sustainability is gaining momentum in agriculture, with growing adoption of regenerative farming, balanced chemical use, efficient water management, and technology. Demand for sustainably sourced products is driving transparency, innovation, and interest in low-carbon inputs such as green ammonia and eco-friendly fertilizers.

Indian Agriculture

Agriculture accounts for about 17-18% of Indias GDP while providing employment to nearly 45% of the workforce (around 250-300 million people). However, its relative share in the economy has been gradually declining with the rapid expansion of the services and industrial sectors.

In 2024, Indian agriculture remained resilient, achieving record foodgrain and horticulture output, supported by strong government policies, expanded irrigation, and above-normal monsoon rains (108% of the long-period average).

The Third Advance Estimates for 2024-25 peg food grain production at 354 million tonnes, up 7% year-on-year, driven by higher rice output, while horticulture production is estimated at 362 million tonnes, 2.1% higher than 2023-24.

In FY25, Indias foodgrain output is estimated at 354 million tonnes (+7% YoY), oilseeds at 43 million tonnes (+7%), sugarcane at 450 million tonnes (-1%), and cotton at 31 million bales (-6%). To reduce import dependence on pulses and oilseeds (worth ~USD 23 billion in FY25), the government launched a six-year mission to boost production of Tur, Urad, and Masoor, and approved the ^10,103 crore National Mission on Edible Oils-Oilseeds (2024-31).

Major irrigation projects advanced, including the Ken-Betwa river link (3.5 million hectares) and Polavaram project in Andhra Pradesh (1 million hectares).

Income support schemes such as PM-KISAN, along with state initiatives like Rythu Bharosa (Telangana) and Annadata Sukhibhava (Andhra), continued to strengthen rural incomes.

Drone adoption accelerated, supported by the Namo Drone Didi scheme—targeting 15,000 women SHGs by 2026—and subsidies under the Sub-Mission on Agricultural Mechanization, promoting precision farming.

BUSINESS AND FINANCIAL PERFROMANCE

Business Performance

The year marked a period of stabilization and strategic realignment for the Company. Favorable monsoon conditions supported agricultural activity; however, market saturation, policy changes, and elevated input costs continued to create a challenging operating environment. In response, the Company adopted a controlled production approach, aligning output with demand, focusing on inventory liquidation, optimizing cash flows, and safeguarding margins.

Prudent resource management and reduced dependence on borrowed funds further strengthened liquidity while lowering interest expenses.

During FY 2024-25, the Company maintained steady production

levels, reporting an output of 44,104.04 MT, marginally lower than 44,884.12 MT in the previous year. Within this, production of Single Super Phosphate (SSP) rose slightly to 34,814.04 MT from 33,990.62 MT, reaffirming the Companys continued emphasis on its flagship fertilizer. NPK fertilizer output remained stable at 8,490.00 MT versus 8,593.50 MT a year earlier, while production of specialty fertilizers declined to

800.00 MT from 2,300.00 MT, in line with the strategic decision to streamline the portfolio and prioritize core products.

On the sales side, overall volumes stood at 48,929.00 MT, compared to 50,743.50 MT in FY 2023-24. SSP sales moderated to 38,474.00 MT from 40,684.00 MT, reflecting demand stabilization and competitive pressures. Conversely, NPK sales rose significantly to 9,684.00 MT from 7,995.50 MT, underscoring growing farmer preference for balanced nutrient blends. Sales of other fertilizers declined to 771.00 MT from

2.064.00 MT, in line with the reduced production strategy.

Overall, the Companys performance during the year highlights a disciplined and balanced approach—aligning production with market trends, optimizing costs, and maintaining strategic focus on high-priority product categories.

Following is the snapshot of the business performance of the company during the financial year 2024-25:

Company Overview	Shiva Global Agro Industries Limited is one of the major manufacturer and supplier of Single Super Phosphate (SSP) and Mix Fertilisers (N.P.K.) in the Marathwada region of Maharashtra.
Installed Capacity	The company has an installed capacity of:
	• 1,20,000 MT for Single Super Phosphate (SSP)
	• 72,000 MT for NPK Mix Fertilisers
	The companys manufacturing units are located at:
Manufacturing Units	• MIDC, Nanded
	• Dhakni, Nanded
	These units have the flexibility to produce multiple grades of fertilizers.
	The company achieved a total production volume of 44,884 MT, comprising:
Production Volume	- Single Super Phosphate (SSP)
	- NPK Mix Fertilisers
	- Other fertilizers
Sales Volume for FY 20242025	The primary sales volume for the financial year 2024-2025 was recorded at:
	- 38,474 MT for SSP
	- 9,684 MT for NPK Mix fertilizers
	The Company enjoys a considerable market presence in:
Market Presence	- South-central parts of Marathwada region.
	- Vidharba region
	- Adjacent parts of Telangana

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The Company maintains a strong connect with farmers and follows a customer-centric approach by offering advisory services aimed at enhancing farm productivity and prosperity.

To strengthen engagement, the Company regularly undertakes farm extension initiatives such as:

• On-field soil testing

• Crop and product awareness programs

• Dealer conferences

• Farmer interaction meetings

These efforts have reinforced a robust consumption-driven market share. Among its product portfolio, SSP grades fortified with Zinc and Zinc plus Boron continue to lead overall sales volumes, and their contribution is expected to increase further in the coming years.

Financial performance:

Standalone Performance (FY 2024-25):

Revenue from operations grew to ^8,603.70 Lakhs (^8,042.41 Lakhs in FY 2023-24), with total income at ^8,646.25 Lakhs. The Company delivered a strong turnaround, posting PBIDT of ^1,838.53 Lakhs against a loss of ^734.78 Lakhs in the previous year, driven by operational efficiency and cost control.

Finance costs declined to ^284.34 Lakhs (^423.48 Lakhs in FY 2023-24), while depreciation stood at ^111.74 Lakhs. Consequently, PBT before exceptional items was ^1,442.46 Lakhs versus a loss of ^1,278.88 Lakhs last year.

The year also included exceptional income of ^887.88 Lakhs from divestment of two subsidiaries, resulting in PAT of ^640.34 Lakhs, a significant recovery from the loss of ^972.65 Lakhs in FY 2023-24.

Consolidated Performance (FY 2024-25):

Revenue from operations rose to ^37,992.85 Lakhs (^36,427.35 Lakhs in FY 2023-24), with total income at ^38,105.65 Lakhs. The Company delivered a strong turnaround, posting PBIDT of ^2,178.26 Lakhs versus a loss of ^1,824.02 Lakhs last year, driven by group-wide operational efficiencies.

Finance costs reduced to ^779.54 Lakhs and depreciation to ^232.84 Lakhs, resulting in PBT before exceptional items of ^1,165.87 Lakhs (loss of ^3,353.17 Lakhs in FY 2023-24).

Including exceptional income of ^887.88 Lakhs from subsidiary sales, Consolidated PBT stood at ^277.99 Lakhs, with a PAT of ^22.37 Lakhs, marking a return to positive earnings.

Key Financial Ratios:

Key Financial Ratios analyses and its elements are given under note no. 46 to the Accounts of Standalone Financial Statements

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has established a robust internal control system, commensurate with its business nature and size, to ensure the safety of its assets, reliability of financial transactions, and adherence to applicable statutes and accounting policies. This system is designed to provide adequate checks and balances, ensure optimum resource utilization, and maintain effective approval procedures.

The Company has well-defined internal controls and audit checks in place, which are regularly reviewed and updated to maintain their effectiveness. The internal audit function is supplemented by external firms, which monitor and assess the adequacy and effectiveness of internal controls across all key processes and locations. Any deviations are periodically reviewed, and due compliance is ensured.

The Audit Committee reviews the summary of significant audit observations, recommendations, and their

implementations, and reports any concerns to the Board. Additionally, the Company has a whistleblower policy to report any fraud or unethical practices, and conducts regular training and awareness programs for employees on internal controls and compliance. The Company also continuously monitors regulatory changes and updates to ensure compliance, and the Board reviews the

effectiveness of internal controls and risk management systems annually.

OPPORTUNITIES, STRENGTHS & THREATS Opportunities

• Rising demand for fertilizers in India driven by the focus on agricultural productivity and food security.

• Government policies encouraging organic fertilizers and sustainable farming practices.

• Growing adoption of precision farming and soil testing, boosting demand for specialized fertilizers.

• Expanding domestic market for organic and specialty fertilizer segments.

• Scope for collaborations with global players to introduce advanced technologies and innovative products.

Strengths

• Well-established brand presence in the Indian fertilizer sector.

• Wide distribution network supported by strong logistics infrastructure.

• Experienced leadership with proven expertise in fertilizer production and marketing.

• Robust R&D capabilities enabling product innovation and differentiation.

• Deep-rooted relationships with farmers, dealers, and stakeholders, strengthening customer trust and loyalty.

Threats

• Intensifying competition within the Indian fertilizer industry.

• Volatility in global commodity prices and currency fluctuations.

• Regulatory changes, including potential revisions in fertilizer subsidy policies.

• Rising input costs and risks of supply chain disruptions.

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• Environmental and sustainability challenges associated with fertilizer manufacturing and usage.

RISK MANAGEMENT:

The Company views risk management as an integral part of its overall business strategy. Our framework is structured to systematically identify, assess, mitigate, and monitor risks that may affect the achievement of business objectives.

The approach is guided by the following principles:

• Promoting risk awareness and a strong risk culture

• Timely identification and assessment of risks

• Implementing effective mitigation measures and controls

• Continuous monitoring and periodic review of risk exposures

• Transparent reporting and disclosure practices

Key risks identified include market, operational, financial, regulatory, and reputational risks. To address these, the Company has put in place robust mitigation strategies and regularly updates its framework to reflect evolving business dynamics.

This proactive risk management approach ensures preparedness for potential challenges, while enabling the Company to leverage opportunities, safeguard stakeholder interests, and sustain long-term value creation.

Key Risks and Mitigation Strategies

Market Risk Risks:

- Fluctuating demand and pricing of SSP fertilizers

- Intensifying competition in the Indian fertilizer market

Mitigation:

- Diversification of the product portfolio with a focus on value-added fertilizers

- Building strong partnerships with farmers, dealers, and distributors to strengthen market presence

Operational Risk Risks:

- Accidents or incidents at manufacturing plants

- Equipment breakdowns and maintenance challenges

Mitigation:

- Adoption of stringent safety protocols and regular training programs.

- Preventive maintenance schedules and continuous monitoring of plant operations

Financial Risk Risks:

-Volatility in raw material prices (e.g., rock phosphate, sulfuric acid)

- Foreign exchange fluctuations impacting import costs Mitigation:

- Hedging strategies to manage input cost volatility

- Maintaining adequate cash reserves to absorb forex variations

Regulatory Risk Risks:

- Changes in fertilizer subsidy policies or regulatory framework

- Compliance requirements related to environment, health,

and safety

Mitigation:

- Active engagement with government bodies and industry associations to remain updated on policy developments

- Robust compliance framework ensuring adherence to statutory and environmental regulations

Reputation Risk Risks:

- Product quality concerns or contamination issues

- Negative publicity or adverse social media campaigns

Mitigation:

- Strong quality assurance and control mechanisms across the supply chain

- Transparent and proactive stakeholder communication practices

Monitoring & Review

- Continuous monitoring of market dynamics, regulatory changes, and operational performance

- Periodic review of risk management strategies and effectiveness of mitigation measures

- Annual risk assessment and framework update to ensure long-term resilience

HUMAN RESOURCEDEVELOPMENT(HRD)

At Shiva Global Agro Industries Limited, employees are regarded as the Companys most valuable asset. We are committed to nurturing their skills, knowledge, and potential to drive both personal growth and organizational success.

During the year, the Company undertook several HRD initiatives:

• Training & Development: Leadership, technical, and soft skills training programs.

• Talent Management: Identification and development of high-potential employees with career growth opportunities.

• Employee Engagement: Recognition programs, teambuilding activities, and open communication channels.

• Diversity & Inclusion: Promotion of a culture of equality, respect, and opportunity.

These initiatives resulted in improved productivity, higher employee satisfaction, stronger retention, and better alignment of competencies with business objectives. Industrial relations remained harmonious across all plants. To recognize employee contributions, operative staff were covered under Performance Linked Incentive (PLI) schemes, designed around key parameters such as production, efficiency, quality, safety, behavior, and total quality management. This ensured motivation and performance excellence across the workforce.

Prevention of Sexual Harassment at Workplace:

The Company is committed to providing a safe and respectful workplace for all employees. In compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, an Internal Complaints Committee has been constituted to investigate and address any complaints of sexual harassment. During the year 2024-25, the Committee confirmed that no complaints or cases were filed or pending with the Company. The Company adheres to a zero- tolerance policy on harassment and is dedicated to ensuring a workplace free from any form of harassment. As a result, no cases of sexual harassment were reported during the year.

ENVIRONMENT & SUSTAINABILITY

At Shiva Global Agro Industries Limited, we remain deeply committed to environmental responsibility and sustainable growth. In FY 2024-25, the Company undertook several initiatives to reduce its ecological footprint and integrate sustainability across its operations.

Key initiatives included:

• Energy Efficiency: Significant reduction in energy

consumption through efficient lighting systems and equipment upgrades.

• Waste Management: Implementation of recycling and reuse programs for paper, plastic, and metal waste.

• Water Conservation: Reduced water usage through

process improvements and conservation measures.

• Sustainable Supply Chain: Collaboration with suppliers to encourage adoption of eco-friendly practices.

• Employee Awareness: Training programs to promote environmentally responsible behavior.

The Company is fully compliant with Extended Producer Responsibility (EPR) norms, ensuring 100% management of plastic waste through recycling and reuse. This proactive approach reduces the plastic footprint, conserves natural resources, mitigates greenhouse gas emissions, and contributes to a circular economy.

Through these measures, Shiva Global Agro Industries continues to strengthen its environmental performance while safeguarding resources for future generations.

BUSINESS OUTLOOK

FY 2024-25 laid a solid foundation for sustainable growth through operational prudence and market responsiveness. The positive outlook is supported by favorable industry trends and the Companys strong strategic foundation. The fertilizer sector is expected to witness sustained growth, driven by rising demand for agricultural productivity, food security, and government initiatives promoting sustainable farming and soil health. The increasing adoption of precision farming and soil testing is expected to further boost demand for specialized fertilizers such as SSP and fortified variants. Building on the progress achieved in FY 2024-25, the Company will pursue the following priorities:

• Operational Excellence: Enhance production efficiency and maintain disciplined working capital management.

• Portfolio Expansion: Introduce new value-added products and fortified fertilizer grades to address evolving farmer needs.

• Capacity Growth: Expand production capacity to meet rising demand in key markets.

• Customer Reach: Strengthen distribution networks and farmer outreach programs through advisory services and engagement initiatives.

• Cost Efficiency: Optimize manufacturing processes and resource utilization to sustain margins.

With these initiatives, the Company expects to deliver revenue growth, higher sales volumes, and improved profitability in the coming year. Guided by a customercentric approach and a commitment to sustainability, Shiva Global Agro Industries is well-positioned to create longterm value for stakeholders while contributing to the growth and resilience of Indian agriculture.