SVC Industries Ltd Management Discussions

Agri Warehousing and Collateral Financing Significance Indias grain reserves have reached unprecedented levels, with rice stocks at 59.5 million MT and wheat inventories at 36.9 million MT as of June 1, 2025. These figures considerably surpass the govemments target reserves. The substantial increase in grain stocks underscores the growing importance of robust agri warehousing infrastructure and collateral financing mechanisms, such as the Warehouse Receipt Financing (WRF) system, to support liquidity and market stability for farmers and traders. Role ofthe Food Corporation of India (FCI) The Food Corporation of India (FCI) played a crucial role in market stabilization and food security. During the year 2025-26 Rabi Marketing Season, the FCI procured 29.7 million MT of wheat, ensuring sufficient reserves forthe Public Distribution System (PDS)and other govemment welfare initiatives. The FCIs consistent procurement activities have been instrumental in stabilizing market prices and effectively balancing supply and demand dynaics, thereby contributing to overall food security. Companys Agri-Business Vertical and Strategic Initiatives The company has been actively involved in agri-business services since 2018, focusing on enhancing the agricultural supply chain through technology, infrastructure, and knowledge transferto farmers. Agro Commodities Trading Building on its success in helping farmers improve their output and secure better prices, the company has expanded into agro commodities trading. Ithas established strong connectionswith key processing units and buyers:

+ Registered with over50 flour mills in Delhi, Ghaziabad, and Mathura. Associated with more than 10 rice mills in Kamal.

+ Appliedfor an FSSAI license to partner with major retail groups like LULU and Reliance as a Fruits & Vegetables (F&V) supplier. + wheat, paddy, and F&V, the company has initiated mustard procurementto supply to mustard oil mills.

+ The company has successfully facilitated the trade of wheat from Mathura to significant markets in Hyderabad, Bengaluru, and Delhi. The company has been actively involved in agri-business services since 2018, focusing on enhancing the agricultural supply chain through technology, infrastructure, and knowledge transfer to farmers.

Warehousing Services

The company offers modem warehousing services for essential agricultural commodities, facilitating direct sales from farmers to large companies and ensuring fair prices, particularly demonstrated during the COVID-19 pandemic when traditional buying centres were closed. ^{During the reporting period:} + Atotalof 16,982 MTof wheatand 1,639 MT of paddy were stored across 9 warehouses.

+ The company expanded its warehousing infrastructure from 1 lakh sq. ft. to 1.20 lakh sq. ft.,increasing its total storage capacity to 23,378 MT. SVC Kisan Centre The companys interest in agri-business necessitates a consistent supply of raw materials. To addressthis the company setup the Kisan Centre to strategically focus on the Mathura district and the agri-cluster situated within a 50 km radius of its plant, which is a significant production area for key crops such as wheat, rice, potato, mustard, peas, and various green vegetables. To ensure a steady supply for its future planned processing units and to support the local farmers, the company collaborates with numerous agri-experts and consultants. They organize seminars and establish training centres, facilitating direct access and interaction between farmers and reputable suppliers of essential agricultural inputs ke fertilizers, pesticides, and seeds. Company conducted soil testing training for 143 farmers. It carried out demonstration of spraying NANO urea using drones in 50 acres across 5 villages in the paddy seasons. SVC along with Chambal fertilizers under the aegis of KVK Mathura conducted soiltest in more than 700 acres. This soil testing helps farmers become aware of the health of their soil. Further to this through its tie-up with ASQI company is conducting more soil test and planning to introduce BIOCHARto improve the soil health in the Mathura district. The company has assigned one personto develop high value and climate resistant crops in Plot 6, where crops such as quinoa, wheat, paddy (and their high yielding variety) and mustard have been sown. The objective s to showcase regionally suitable crops and farming methods that are beneficial to local farmers in terms of productivity, soil health, and economic sustainability. This initiative encourages farmers to adopt natural inputs and crop diversification. AboutAsQl ASQl is a company providing Value Added Services (VAS) to farmers in specific areas of their interest by leveraging ICT through OBDs, SMS, IVRS, andrelated services. ASQI Farm app is involved in empowerment of farmers and people living in rural India with pertinent and quality information and services, through highly affordable communication network in a sustainable manner. the organization has been serving over 4.2 million farmers across the Country through daily Free Voice Messages on topics of agriculture and allied, government schemes, health and other topics of rural interests Digital Transformation and Export Exploration The company is committed to digitizing its procurement, payment, and management systems to enhance efficiency. This will be implementedin phases:

+ Phase1: Establishing afoundational website.

+ Phase2: Developing a secure Document Management System (DMS) and profile creation features.

+ Phase3: Introducing farmer-focused features, including loyalty benefits.

Furthermore, the company is actively exploring intemational trade opportunities. By engaging with global clients and leveraging existing networks, itaims to establish aworldwide presence for key commodities such as maize, potato, fice, and Nano urea. Process Facility Development Leveraging seven years of experience and the abundantavailability of raw materials (wheat, rice, potato, mustard, and vegetables) in its operational area, the company plans to establish a processing facility on its existing land and infrastructure. This initiative aims to add value to raw agricultural products, enabling farmers to achieve better prices. The execution of this project is contingent upon securing adequate funding. Risk Management Operating in the essential commodities sector, the company remains vigilant regarding government notifications concerning stock limits. Its operational strategy includes timely dilution of stock at appropriate prices to prevent being caught off-guard by stock limit notices, which could otherwise lead to distress sales of commodities. Human Resources Development (HRD) The company has implemented a Key ResultArea (KRA) system, requiring employees to report their top 3 monthly achievements in a monthly MIS submitted to senior management. The HRD team also plans to conduct internal and external job-specific training sessions ^{toenhance employee skills and capabilties.}Key Financial Ratios Financially, the company has demonstrated substantial improvement. Its current ratio significantly increased from 0.47 in FY 2023-24to 1.24in FY 2024-25. This improvementindicates a stronger abiltyto meet its short-term financial obligations.