Unisem Agritech Ltd Management Discussions

You should read the following discussion of our financial condition and results of operations together with our Restated Financial Statements included in this Draft Red Herring Prospectus. You should also read the section entitled "Risk Factors" on page no 28 which discusses several factors, risks and contingencies that could affect our financial condition and results of operations. The following discussion relates to our Company and is based on our Restated Financial Statements, which have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI Regulations. Portions of the following discussion are also based on internally prepared statistical information and on other sources. Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year ("Fiscal Year") are to the Twelve-month period ended March 31 of that year.

The financial statements have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI (ICDR) Regulations 2018, and restated as described in the report of our auditors dated 16.09.2025 which is included in this Draft Red Herring Prospectus under the section titled "Financial Information" on page no. 206 of this Draft Red Herring Prospectus. The Restated Financial Statements have been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. We do not provide a reconciliation of our Restated Financial Statements to US GAAP or IFRS and we have not otherwise quantified or identified the impact of the differences between Indian GAAP and U.S. GAAP or IFRS as applied to our Restated Financial Statements.

This discussion contains forward looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those described under "Risk Factors" and "Forward Looking Statements" on page no. 28 & 20 and respectively, and elsewhere in this Draft Red Herring Prospectus Accordingly, the degree to which the Restated financial statements in this Draft Red Herring Prospectus will provide meaningful information depend entirely on such potential investors level of familiarity with Indian accounting practices.

OVERVIEW

We are a company engaged in developing, processing, and selling diverse range of seeds for vegetables, flower and field crops. By integrating conventional breeding techniques, we strive to develop hybrid vegetable, flower and field crop seeds that offer higher yields, improved product quality, and greater resistance to pests and diseases compared to naturally occurring varieties. Our core operations focus on developing hybrid vegetable, flower and field crop seed varieties and processing them to ensure the consistent quality.

We continuously develop various type of hybrid breeder seeds and select only the best qualitative traits from it which undergo additional processing and eliminating more seeds and provide only the superior quality seeds, which are known as foundation seeds. The foundation seeds consist of the parental materials essential for developing a hybrid. Following this, the foundation seeds then multiplied into commercial seeds, which are then offered in the market for agricultural production. We provide multiple seed variants for vegetable, flower and field crop, specifically designed to meet the requirements of different Agro-climatic conditions, including factors such as water availability, crop duration, and soil characteristics across various geographic regions.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

For details in respect of Statement of Significant Accounting Policies, please refer to "Restated Financial Statements" on page no 206 of this Draft Red Herring Prospectus.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factors" on page no. 28 of this Draft Red Herring Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:

1. Market Demand Fluctuations Changes in consumer demand may impact sales and profitability.

2. Product Concentration Risk Heavy dependence on vegetable seed sales exposes the company to risks related to limited product diversification.

3. Regulatory & Policy Changes Alterations in government policies, taxation, and industry regulations could adversely affect business operations.

4. Talent Retention & Management The companys success depends on its ability to retain key management personnel and skilled employees.

5. Technological Advancements Failure to keep pace with evolving technology may hinder competitiveness.

6. Debt Obligations The companys ability to meet interest and principal repayment obligations is crucial for financial stability.

7. Macroeconomic & Political Risks Inflation, interest rate fluctuations, global financial market volatility, and unforeseen economic disruptions may impact business growth.

8. Operational & Compliance Risks Non-compliance with regulatory requirements across jurisdictions may lead to legal and financial repercussions.

9. Business Growth & Expansion Risks Challenges in successfully implementing growth strategies could affect long-term sustainability. 10. Competitive Landscape Intense competition within the industry may impact pricing power, market share, and profitability. 11. Environmental & Uninsured Losses Unforeseen environmental issues or inadequate insurance coverage could pose significant financial risks. 12. Pandemic & Global Crisis Impact Events such as COVID-19 and other unforeseen crises could disrupt operations and financial performance. 13. Dependence on third-party farmers: Dependence on third-party farmers Reliance on contracted farmers for seed production poses risks related to non-compliance, quality control, and continuity of supply.

Discussion on Result of Operations

Profit and Loss Statement

The following discussion on results of operations should be read in conjunction with the Restated Financial Statements for the financial years ended on March 31, 2025, March 31, 2024 and March 31, 2023.

(Amount in lakhs except percentages)

Particulars	FY 2025	% of Total Income	FY 2024	% of Total Income	FY 2023	% of Total Income
Revenue from operations	6,907.75	100.00%	6,113.88	99.97%	4,691.15	100.00%
Other Income	-	0.00%	2.14	0.03%	0.11	0.00%
Total Income	6,907.75	100.00%	6,116.02	100.00%	4,691.26	100.00%
Expenses
Cost of Material Consumed	3,020.39	43.72%	2,192.84	35.85%	1,525.20	32.51%
Changes in inventories of finished goods & WIP	-455.78	-6.60%	51.94	0.85%	76.78	1.64%
Employee benefits expenses	1,026.57	14.86%	1,083.70	17.72%	859.99	18.33%
Finance costs	71.12	1.03%	72.39	1.18%	73.15	1.56%
Depreciation and amortization expense	69.63	1.01%	36.32	0.59%	33.95	0.72%
Other Expense	2,604.21	37.70%	2,380.68	38.93%	1,938.66	41.32%
Total Expenses	6,336.14	91.73%	5,817.87	95.13%	4,507.73	96.09%
Profit/ (Loss) Before Tax	571.61	8.27%	298.15	4.87%	183.54	3.91%
Tax Expense:
(a) Current tax expense	150.63	2.18%	88.08	1.44%	55.33	1.18%
(b) Deferred tax liability/ (asset)	-6.43	-0.09%	-5.26	-0.09%	-3.94	-0.08%
Total tax	144.20	2.09%	82.82	1.35%	51.39	1.10%
Profit/ (Loss) After Tax	427.41	6.19%	215.32	3.52%	132.15	2.82%

Our Significant Accounting Policies

For Significant accounting policies please refer Significant Accounting Policies, under Chapter titled "Restated Financial Statements" on page no 206 of this Draft Red Herring Prospectus.

Overview of Revenue & Expenditure

The following discussion on results of operations should be read in conjunction with the Restated Financial Statements for the financial years 2024-25, financial years 2023-24 & financial Year 2022-23. Our revenue and expenses are reported in the following manner:

Revenue from operations:

Our Companys revenue is primarily generated from sale of seeds and other operating revenue including research and development revenue.

Other Income:

Other Income includes profit on sale of fixed assets and other miscellaneous income.

Expenses:

Our total expenditure primarily consists of Cost of Sales, Employee benefit expense, Finance Costs, Depreciation and amortization expense, and Other Expenses.

Cost of Sales

Cost of Sales primarily comprise purchase of seeds from various vendors, including purchases of materials for research and development purpose and the changes in the inventory of the purchases made.

Employee benefits expense:

The Employee benefit expense includes Salaries and wages, contribution to provident and other funds, and gratuity expense.

Finance Costs:

Finance cost of the company consists of the interest expense on the term loans, working capital limit and other bank charges.

Depreciation and Amortization Expenses:

Depreciation and Amortization Expenses majorly include depreciation on plant and machinery, vehicles, furniture and fixture, office equipment, etc.

Other Expenses:

Other expenses are further divided into 3 broad categories, namely:

1. Operating/ manufacturing expense: This majorly includes expenses like field labour charge, packaging material expense, research and development expense, etc.

2. Administration expense: These expenses consist of expenses like travelling expense, office expense, etc.

3. Sales and distribution expense: These consist of expenses like discount allowed, promotional and advertisement expense, etc.

FINANCIAL YEAR 2025 COMPARED TO FINANCIAL YEAR 2024 (BASED ON RESTATED FINANCIAL STATEMENTS)

Total Income:

The total income of the company has increased from Rs 6,116.02 lakhs in FY 2024 to Rs 6,907.75 lakhs in FY 2025 showing an increase of Rs 791.73 lakhs. The increase in total income is due to increase in revenue of operations of the company by 12.98% from FY 2024 to FY 2025.

Revenue from Operations:

Revenue of operations of the company has increased from Rs 6,113.88 lakhs in FY 2024 to Rs 6,907.75 lakhs in FY 2025. The increase in revenue of the company shows a growth of 12.98%.

This the general business growth year on year basis due to increase in sales of some categories as mentioned below:

(Amount in lakhs)

Particulars	FY 2025	FY 2024
1 Vegetable Seeds	5,806.00	4,805.80
2 Field Crop Seeds	934.25	1,207.08
3 Flower Seeds	164.92	93.58
TOTAL	6,905.17	6,106.47

1. Vegetable Seeds: It can be inferred from the table above that the sales of vegetable seeds have increased from Rs 4805.80 lakhs in FY 2024 to Rs 5,806.00 lakhs in FY 2025, contributing the highest to the increase in overall sales. The increase in vegetable seeds is due to increase in the sales of Tomato (Rs 179.51 lakhs), Watermelon (Rs 176.05 lakhs), Onion (Rs 106.21 lakhs), Peas (Rs 96.56 lakhs), etc.

2. Field Crop Seeds: The sales of the field crop seeds have declined from Rs 1,207.08 lakhs in FY 2024 to Rs 934.25 lakhs in FY 2025. The decline is majorly due to decrease in the sales of maize by Rs 192.63 lakhs in FY 2025.

3. Flower Seeds: The sales of flower seeds (Marigold) has increased by 76.22%, i.e., Rs 71.33 lakhs.

Overall, despite the decline in field crop seeds, the company achieved a healthy increase in revenue from operations, driven mainly by vegetable and flower seed sales.

Other Income:

There is no other income of the company in FY 2025. Other income in the company has derived from profit from sale of asset. In FY 2025, there is no sale of asset and hence no other income has been booked.

Total Expenses:

Total expenses of the company include Cost of sales, employee benefit expense, finance cost, depreciation cost and other expenses. Overall, total expense of the company has decreased slightly from Rs 5,817 lakhs, comprising 95.13% of total income, in FY 2024 to Rs 6,336.15 lakhs, leading to 91.73% of the total income, in FY 2025.

Cost of Sales

The companys cost of sales increased marginally from Rs 2,244.78 lakhs in FY 2024 to Rs 2,564.61 lakhs in FY 2025, representing 36.70% and 37.13% of total income respectively. This small rise indicates that the cost of sales has remained largely stable relative to the companys overall revenue.

Employee benefits expense:

The employee benefit expense of the company has slightly decreased from Rs 1,083.70 lakhs in FY 2024 to Rs 1,026.57 lakhs in FY 2025. However, if we compare the same with the sales, it is 17.72% and 14.86% of the total income in FY 2024 and FY 2025 respectively. The employee benefit expenses can be further bifurcated as follows:

(Amount in lakhs)

Particulars	FY 2025	FY 2024
Salaries	977.27	882.07
Incentives	1.00	156.47
Contributions to Provident and other funds	31.48	29.66
Gratuity Expense	16.16	10.65
Perquisites to Directors	0.66	4.86
Total	1,026.57	1,083.70

The companys salary expenses increased from Rs 882.07 lakhs in FY 2024 to Rs 977.27 lakhs in FY 2025, reflecting a rise in fixed compensation for employees. On the other hand, the incentives paid to employees saw a sharp decline, dropping from Rs

156.47 lakhs in FY 2024 to only Rs 1.00 lakh in FY 2025. This significant reduction was due to the company implementing a stricter incentive policy. As a result of the lower incentive payouts, the total employee benefit expense of the company decreased overall, despite the increase in base salaries.

Finance costs:

The companys finance cost has remained relatively stable, amounting to Rs 72.39 lakhs in FY 2024, representing 1.18% of total income, and Rs 71.12 lakhs in FY 2025, accounting for 1.03% of total income. The decrease in the percentage of expense against total income is due to sales growth of ~12.98% in FY 2025.

Depreciation and Amortization Expenses:

The companys depreciation and amortization expense has increased from FY 2024 to FY 2025, standing at Rs 36.32 lakhs (0.59% of total income) in FY 2024 and Rs 69.63 lakhs (1.01% of total income) in FY 2025. There is an increase in depreciation and amortization expense due to acquisition of the assets like plant & machinery, vehicles, furniture and fixture, etc. leading to higher depreciation cost in the year.

Other expense:

The Companys other expenses have marginally decreased from 38.93% of total income, i.e., Rs 2,380.68 lakhs in FY 2024, to 37.70% of total income, i.e., Rs 2,604.21 lakhs in FY 2025.

The decrease is mainly due to reduction in discount expenses, which decreased from Rs 1,082.57 lakhs, representing 17.70% of total income in FY 2024, to Rs 1,060.98 lakhs, representing 15.36% of total income in FY 2025. This decrease was the result of a change in the Companys discount policy during the year, whereby comparatively lower discounts were offered to customers. The revision in policy enabled the Company to exercise better control over its discount-related outflows.

As a result, the Company was able to contain its other expenses more effectively, thereby contributing to improved cost efficiency and enhanced profitability during the year under review.

Restated Profit/ (Loss) before tax:

The profit before tax of the company has increased from Rs 298.15 lakhs, marking 4.87% of the total income in FY 2024 to Rs 571.61 lakhs, representing 8.27% of the total income, in FY 2025.

Tax Expense

The tax expense of the company has increased from Rs 82.82 lakhs in FY 2024 to Rs 144.20 lakhs in FY 2025, this is due to increase in profit before tax of the company.

Restated Profit/ (Loss) after tax:

The profit after tax of the company has increased from Rs 215.32 lakhs, marking 3.52% of the total income, in FY 2024 and Rs 427.41 lakhs, leading to 6.19% of the total income, in FY 2025.

The profitability of the company has increased due to the following reason:

(Amount in lakhs)

Particulars	FY 2025	% of Total Income	FY 2024	% of Total Income
1 Employee Benefit Expense	1,026.57	14.86%	1,083.70	17.72%
2 Finance Cost	71.12	1.03%	72.39	1.18%
3 Other Expense	2,604.21	37.70%	2,380.68	38.93%
TOTAL	3,701.90	53.59%	3,536.77	57.83%

1. Employee Benefit Expense: The employee benefit expense can be seen declining in terms of percentage of total income from 17.72% in FY 2024 to 14.86% in FY 2025. This is due to increase in the revenue of the company by 12.98% and also due to decrease in the incentive expense of the company.

2. Finance Cost: The Finance cost of the company in absolute terms has remained moreover constant, however due to growth in the sales of the company, in terms of percentage it can be seen declining from 1.18% of the total income in FY 2024 to 1.03% of the total income in FY 2025.

3. Other Expense: The other expense of the company can be seen declining in terms of percentage of total income from 38.93% in FY 2024 to 37.70% in FY 2025. This decline is due to change in the discount policy of the company due to which there was decrease in the discounts given to the vendors from 17.70% of the total income in FY 2024 (Rs 1,082.57 lakhs) to 15.36% of total income in FY 2025 (Rs 1,060.98 lakhs).

FINANCIAL YEAR 2024 COMPARED TO FINANCIAL YEAR 2023 (BASED ON RESTATED FINANCIAL STATEMENTS)

Total Income:

The total income of the company has increased from Rs 4,691.26 lakhs in FY 2023 to Rs 6,116.02 lakhs in FY 2024 showing an increase of Rs 1,424.76 lakhs. The increase in total income is due to increase in revenue of operations of the company by 30.33% from FY 2023 to FY 2024.

Revenue from Operations:

Revenue from operations of the company has increased by Rs 1,422.73 lakhs, from Rs 4,691.15 lakhs in FY 2023 to Rs 6,113.88 lakhs in FY 2024, representing a growth of 30.33 %.

The increase in the revenue of the company is due to increase in the sales of the following sales category:

(Amount in lakhs)

Particulars	FY 2024	FY 2023
1 Vegetable Seeds	4,805.80	3,854.32
2 Field Crop Seeds	1,207.08	786.16
3 Flower Seeds	93.58	49.95
TOTAL	6,106.47	4,690.43

1. Vegetable Seeds: The sales of vegetable seeds category have increased from Rs 3,854.32 lakhs in FY 2023 to Rs 4,805,80 lakhs in FY 2024. The increase in sales can be attributed to increase in the sales of Chilli (Rs 737.48 lakhs), Bhendi (Rs 165.16 lakhs), Bitter Gourd (Rs 80.54 lakhs), etc.

2. Field Crop Seeds: The sales of field crop seeds have increased from Rs 779.46 lakhs in FY 2023 to Rs 1,052.84 lakhs in FY 2024, due to increase in sales of Maize (Rs 273.39 lakhs), and introduction of field crop seeds like Bajra, Mustard and Sunflower.

3. Flower Seeds: The sales of Flower Seed (Marigold) has increased by 87.37%, i.e., Rs 43.64 lakhs.

Overall, sales in all three seed categories recorded year-on-year growth, resulting in a notable increase in the companys operational revenue.

Other Income:

The companys Other Income increased from Rs 0.11 lakhs in FY 2023 to Rs 2.14 lakhs in FY 2024, representing 0.002% and 0.03% of total income, mainly from a profit on the sale of a vehicle.

Total Expenses:

Total expenses of the company have declined marginally from Rs 4,507.73 lakhs in FY 2023, marking 96.09% of total income to Rs 5,817.87 lakhs, leading to 95.13%, of the total income.

Cost of Sales

The Companys cost of sales increased from Rs 1,601.98 lakhs in FY 2023, representing 34.15% of total income, to Rs 2,244.78 lakhs in FY 2024, accounting for 36.70% of total income.

This rise in cost of sales corresponds with the growth in revenue, which increased from Rs 4,691.15 lakhs in FY 2023 to Rs 6,113.88 lakhs in FY 2024, reflecting a year-on-year growth of 30.33%. In order to meet this growing demand and ensure uninterrupted supply, the Company maintains adequate inventory by preparing stock for the upcoming season in advance, resulting in higher cost of sales.

Employee benefits expense:

The employee benefit expense of the company has increased from Rs 859.99 lakhs in FY 2023 to Rs 1,083.70 lakhs in FY 2024. However, if we compare the same with the total income, it is 18.33% and 17.72% of total income in FY 2023 and FY 2024 respectively. This indicates that, despite the absolute increase in employee costs, the expense has remained largely consistent relative to the Companys revenue growth.

Increase in employees of the company from FY 2023 to FY 2024 is as follows:

Particulars	FY 2024	FY 2023
1 Employee count	138	128

Based on the table, it can be concluded that the companys workforce has grown by 10 employees on a YOY basis. The primary factors contributing to the rise in employee benefit expenses are the increase in headcount and an average salary hike of 10% for existing employees.

Finance costs:

The companys finance cost has remained relatively stable, amounting to Rs 73.15 lakhs in FY 2023, representing 1.56% of total income, and Rs 72.39 lakhs in FY 2024, accounting for 1.18% of total income. The decrease in the percentage of expense against total income is due to sales growth of ~30% in FY 2024.

Depreciation and Amortization Expenses:

The companys depreciation and amortization expense has remained stable from FY 2023 to FY 2024, standing at Rs 33.95 lakhs (0.72% of total income) in FY 2023 and Rs 36.32 lakhs (0.59% of total income) in FY 2024. There is a decrease in depreciation and amortization expense in percentage terms due to increase in sales of the company by ~30% in FY 2024.

Other expense:

The Companys other expenses increased from Rs 1,938.66 lakhs in FY 2023 to Rs 2,380.68 lakhs in FY 2024. This increase is largely attributable to the overall expansion in business operations and is in line with the significant rise in sales, which grew from Rs 4,691.15 lakhs in FY 2023 to Rs 6,113.88 lakhs in FY 2024, reflecting a YoY growth of approximately 30%.

Although other expenses rose in absolute terms, they demonstrated improved cost efficiency when measured as a proportion of total income. Specifically, other expenses accounted for 41.32% of total income in FY 2023, which reduced to 38.93% in FY 2024. This small decrease shows that the company managed to increase sales and grow revenue without a similar rise in other expenses.

Restated Profit/ (Loss) before tax:

The profit before tax of the company has increased from Rs 183.54 lakhs, marking 3.91% of the total income in FY 2023 to Rs 298.15 lakhs, representing 4.87% of the total income, in FY 2024

Taxation Expense:

The tax expense of the company has increased from Rs 51.39 lakhs in FY 2023 to Rs 82.83 lakhs in FY 2024, this is due to increase in profit before tax of the company.

Restated Profit/ (Loss) after tax:

The profit after tax of the company has increased from Rs 132.15 lakhs, marking 2.82% of the total income, in FY 2023 and Rs 215.32 lakhs, leading to 3.52% of the total income, in FY 2024.

The profitability of the company has increased due to the following reason:

(Amount in lakhs)

Particulars	FY 2024	% of Total Income	FY 2023	% of Total Income
1 Employee Benefit Expense	1,083.70	17.72%	859.99	18.33%
2 Finance Cost	72.39	1.18%	73.15	1.56%
3 Depreciation Cost	36.32	0.59%	33.95	0.72%
4 Other Expense	2,380.68	38.93%	1,938.66	41.32%
TOTAL	3,573.09	58.42%	2,905.75	61.94%

1. Employee Benefit Expense: The employee benefit expense increased in absolute value from Rs 859.99 lakhs in FY 2023 to Rs 1,083.70 lakhs in FY 2024. However, as a proportion of total income, it declined from 18.33% to 17.72%, primarily due to the Companys revenue growing by ~30% during FY 2024. This indicates that employee costs have been effectively managed in relation to revenue growth.

2. Finance Cost: Finance costs remained nearly constant at Rs 72.39 lakhs in FY 2024 compared to Rs 73.15 lakhs in FY 2023. When measured against total income, finance costs declined from 1.56% in FY 2023 to 1.18% in FY 2024, reflecting better cost absorption on account of higher sales.

3. Depreciation Cost: Depreciation increased marginally from Rs 33.95 lakhs in FY 2023 to Rs 36.32 lakhs in FY 2024. As a percentage of total income, however, it decreased from 0.72% to 0.59%, as there were no significant additions to fixed assets during the year and revenue growth outpaced the increase in depreciation expense.

4. Other Expense: Other expenses rose from Rs 1,938.66 lakhs in FY 2023 to Rs 2,380.68 lakhs in FY 2024, broadly in line with the increase in sales from Rs 4,691.15 lakhs to Rs 6,113.88 lakhs (~30% YoY growth). Despite the increase in absolute terms, other expenses declined as a percentage of total income from 41.32% in FY 2023 to 38.93% in FY 2024, indicating better expense efficiency.

Overall, while expenses increased in absolute terms, they grew at a slower pace compared to revenue. The Companys year-on-year sales growth outperformed the growth in total expenses, leading to an improvement in profitability and a stronger profit after tax margin in FY 2024.

Balance Sheet

The following discussion on balance sheet should be read in conjunction with the Restated Financial Statements for the financial years ended on March 31, 2025, March 31, 2024 and March 31, 2023.

(Amount in lakhs)

Particulars	FY 2025	FY 2024	FY 2023
Liabilities
Long Term Borrowing	305.73	162.57	50.41
Short Term Borrowings	884.45	448.75	531.05
Trade Payables	1,302.40	647.66	563.59
Contingent Liability	-	-	-
Assets
Inventory	1,977.19	1,495.48	1,541.52
Trade Receivable	1,300.94	884.01	738.90
Short Term Loans and Advances	433.58	257.43	149.67
Non-Current Investment	-	-	-

Overview of Assets and Liabilities

The following discussion on assets and liabilities should be read in conjunction with the Restated Financial Statements for FY 2024-25, FY 2023-24 & FY 2022-23. Our assets and liabilities are reported in the following manner:

Long Term Borrowing

The long term borrowing of the company includes term loan taken by the company for construction of shed and multiple vehicle loans.

Short Term Borrowing

Short term borrowing of the company includes the working capital limit availed by the company and the current maturities of the long term borrowings.

Trade Payables

The Companys trade payables represent amounts payable to suppliers for goods purchased on credit.

Contingent Liability

There is no contingent liability of the company.

Inventory

The inventory of the company includes the finished stock of the company and stores and spares used by the company.

Trade Receivable

The Companys trade receivables represent amounts due from customers for goods sold on credit.

Non-Current Investment

There are no non-current investments of the company.

Short Term Loans and Advances

Short term Loans and advances include advances given by the company supplier, balance with revenue authorities, Staff loans and accrued expense.

CHANGES IN THE ASSETS FROM FINANCIAL YEAR 2023 TO FINANCIAL YEAR 2025

Long Term Borrowing

The companys long-term borrowings have shown a steady increase, rising from Rs 50.41 lakhs in FY 2023 to Rs 162.57 lakhs in FY 2024, and further to Rs 305.73 lakhs in FY 2025. This upward trend in borrowings is in line with the companys growing revenue base and its planned capital expenditure, aimed at supporting business expansion.

In FY 2025, the additional borrowings were availed for setting up a dedicated seed processing unit, which is expected to strengthen the companys operational capacity and efficiency. Apart from this, the remaining borrowings primarily consist of multiple vehicle loans taken by the company to support its logistics and distribution requirements.

Short Term Borrowing

Short term borrowings of the company have decreased from Rs 531.05 lakhs in FY 2023 to Rs 448.75 lakhs in FY 2024, which further increased to Rs 884.45 lakhs in FY 2025. The short term borrowings basically include the working capital limit and the current maturities of long term borrowing.

(Amount in lakhs)

Particulars	FY 2025	FY 2024	FY 2023
Karnataka Bank	(88.92)	407.89	472.23
Federal Bank	907.91	-	-
Current Maturities of long-term debts	65.46	40.85	58.83
Total Borrowings	884.45	448.75	531.05

The rise in short-term borrowings in FY 2025 is aligned with the Companys expanding revenue base and the consequent increase in working capital requirements. To ensure uninterrupted supply and meet expected demand, the Company must maintain higher inventory levels for upcoming seasons, which required the Company to depend more on short-term borrowings.

Additionally, there was a shift in the banker to the company: The Company moved its borrowings in during the financial year ending 2025 from Karnataka Bank to Federal Bank. This shows a change in banking arrangements to better meet the Companys working capital needs.

Trade Payables

The trade payables of the company can be seen increasing from Rs 563.59 lakhs in FY 2023 to Rs 647.66 lakhs in FY 2024 to Rs 1,302.40 lakhs in FY 2025. The trade payable days of the company is as follows:

(Amount in days)

Particulars	FY 2025	FY 2024	FY 2023
1 Trade Payable	155	106	133

The companys trade payable cycle has witnessed fluctuations over the past years, reflecting its evolving working capital strategy in line with its growth trajectory. Trade payable days stood at 133 days in FY 2023, before improving to 106 days in FY 2024. In FY 2025, payable days increased to 155 days, as the company strategically utilized extended credit from suppliers to support its expanding operations, manage its production cycle, and maintain adequate inventory levels during a high-growth phase. This approach enabled the company to channel available funds toward scaling up operations while ensuring business continuity.

Inventory

The inventory of the company has decreased from Rs 1,541.52 lakhs in FY 2023 to Rs 1,495.48 lakhs in FY 2024, which further increased to Rs 1,977.19 lakhs in FY 2025. However, the days of the inventory can be seen improving YOY basis as follows:

(Amount in days)

Particulars	FY 2025	FY 2024	FY 2023
Inventory	199	241	362

The company maintains relatively high inventory levels to ensure adequate seed availability for the upcoming season. Its operations involve developing hybrid seeds, which are then supplied to farmers for large-scale cultivation. Depending on the seed variety, cultivation takes place during the kharif or rabi season to prepare for distribution in the following cycle. Once harvested, the seeds undergo quality testing, sorting, and packaging. As a result, the company holds inventory for about 6 8 months to ensure timely distribution.

Inventory days have shown fluctuations over the years, standing at 362 days in FY 2023, improving to 241 days in FY 2024, and further reducing to 199 days in FY 2025. To further optimize working capital, the company aims to streamline its hybrid seed production and quality testing processes, thereby improving overall inventory management.

Trade Receivable

Trade receivables of the company have increased from Rs 738.90 lakhs in FY 2023 to Rs 884.01 lakhs in FY 2024 to Rs1,300.94 lakhs in FY 2025. The trade receivable days of the company is as follows:

(Amount in days)

Particulars	FY 2025	FY 2024	FY 2023
Trade Receivables	68	52	57

The companys trade receivable days have historically remained in the range of 2 to 2.5 months. They improved from 57 days in FY 2023 to 52 days in FY 2024 but increased to 68 days in FY 2025. The initial improvement indicates better collection efficiency, while the increase in FY 2025 is mainly due to the company being in a growth phase, during which higher sales and expanding customer base temporarily extended the time needed to collect receivables.

Short Term Loans and Advances

Short term loans and advances of the company comprise the following:

(Amount in lakhs)

Particulars	FY 2025	FY 2024	FY 2023
Advance to Supplier	259.21	148.10	75.38
Balance with Revenue Authority	108.31	75.78	53.57
Accrued Expense	24.97	-	-
Staff Loans and advances	41.09	33.56	20.71
Total	433.58	257.43	149.67

Total short-term loans and advances increased from Rs 149.67 lakhs in FY 2023 to Rs 433.58 lakhs in FY 2025, mainly driven by higher advances to suppliers (Rs 259.21 lakhs in FY 2025) and increased balances with revenue authorities (Rs 108.31 lakhs in FY 2025). This rise is directly linked to the Companys revenue growth and reflects higher working capital deployment to support expanding operations.

Information required as per Item (II) (C) (iv) of Part A of Schedule VI to the SEBI Regulations:

An analysis of reasons for the changes in significant items of income and expenditure is given hereunder:

1. Unusual or infrequent events or transactions

Except as described in this Draft Red Herring Prospectus, there have been no events or transactions to our knowledge which may be described as "unusual" or "infrequent."

2. Significant economic changes that materially affected or are likely to affect income from continuing operations.

Except as disclosed in this Draft Red Herring Prospectus There are no significant economic changes that may materially affect or likely to affect income from continuing operations

3. Future changes in relationship between costs and revenues

Other than as described in the sections "Risk Factors", "Business Overview" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 28, 117 and 264 respectively, to our knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

4. Total turnover of each major industry segment in which our Company operates

The Company is in the business of sales of seeds. Relevant industry data, as available, has been included in the chapter titled "Industry Overview" beginning on page 105 of this Draft Red Herring Prospectus.

5. Seasonality of business

Our business is affected by seasonal variations and adverse weather conditions. For further details, see chapter "Risk Factors" on the page number 28 of this Draft Red Herring Prospectus.

6. Increases in net sales or revenue and Introduction of new products or services or increased sales prices

Increases in revenues are by and large linked to increases in volume of our business.

7. Competitive conditions

Competitive conditions are as described under the Chapters "Industry Overview" and "Business Overview" beginning on pages 105 and 117 respectively of this Draft Red Herring Prospectus.

8. Details of material developments after the date of last balance sheet i.e. March 31, 2025.

After the date of last Balance sheet i.e. March 31, 2025, the following material events have occurred after the last audited period, i.e., March 31, 2025:

1. Board Resolution passed in the board meeting of directors dated June 18, 2025 for approving resolution for Dropline overdraft working capital facility from Federal Bank

2. Board Resolution passed in the board meeting of directors dated June 18, 2025 for approving resolution for applying exemption under regulation 300 (1) (c) of SEBI (ICDR) Regulations, 2018 for promoters relatives.

3. Resolution passed in the board meeting dated August 29, 2025 for approving borrowings from Cholamandalam Investment and Finance Company Limited, Kotak Mahindra Bank, TATA Capital Limited, Yes Bank Limited, Poonawalla Fincorp Limited, Bajaj Finance Limited and L&T Finance Limited.

4. Resolution passed in the board meeting dated September 16, 2025 to adopt Materiality policy for Litigation, group company and Outstanding dues to MSME Creditors.

5. Approval of Restated financial statement for the financial year ended March 31, 2025, 2024 and 2023 dated 16.09.2025.

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