Hemo Organic Ltd Management Discussions

A. Global Economic Outlook:

Global growth is projected to slow from 3.3% in 2024 to 3.2% in 2025 and 3.0 % in 2026, reflecting the impact of heightened trade tensions, policy uncertainty, and weaker global demand. Although inflation continues to moderate, the pace of disinflation is expected to remain uneven across countries. Global headline inflation is projected to 4.7% in 2026, and it is expected to remain above target in several economies, requiring continued vigilance from policymakers.

The global policy priority remains achieving durable price stability while preserving financial stability and supporting sustainable economic growth. Central banks are expected to maintain a data-driven approach to monetary policy, while governments should rebuild fiscal buffers, safeguard debt sustainability, and provide targeted support to vulnerable households. Structural reforms that improve productivity, strengthen labour markets, enhance supply chains, and promote investment remain essential for boosting long-term economic resilience.

For emerging market and developing economies, growth is projected to remain resilient at just above 4% in both 2025 and 2026, although significant differences persist across regions. Many economies are expected to benefit from stronger domestic demand and investment, while others—particularly low-income and conflict- affected countries—continue to face challenges from high debt, trade disruptions, geopolitical tensions, and climate-related risks.

In Emerging and Developing Europe, economic growth is projected at around 1.9 % in 2026, following the modest growth of 1.8% 2025. Russias economy is expected to slow as fiscal stimulus gradually weakens and external constraints persist, with GDP growth projected at approximately 2.2 % in 2026, reflecting a moderation from previous years despite continued government support for industrial activity.

B. Overview of the Indian Economy:

Indias economy is projected to remain one of the fastest-growing major economies in the world during FY 2025-26. Real GDP growth is expected to be around 6.5%, supported by resilient domestic demand, strong government capital expenditure, healthy rural consumption, and continued expansion in the services sector. While global uncertainties and trade-related risks persist, Indias macroeconomic fundamentals remain robust.

Economic activity continues to be supported by sustained growth in manufacturing, construction, and services, alongside improving agricultural performance due to favourable monsoon conditions. Private consumption and public investment remain the key drivers of growth, while increasing infrastructure spending and digital transformation continue to strengthen long-term economic prospects.

Stable macroeconomic conditions, prudent fiscal management, and continued structural reforms have reinforced investor confidence. The Reserve Bank of India has maintained a "Data-driven and calibrated monetary policy approach". RBI projected inflation for the FY 2025-26 at around 4%. India is expected to sustain GDP growth of around 6.3%-6.7% over the medium term, although the outlook remains subject to global geopolitical developments, trade uncertainties, and commodity price fluctuations.

Inflation has eased and is expected to remain broadly within the Reserve Bank of Indias target range during FY 2025-26, supported by moderating food and fuel prices. Goods and Services Tax (GST) collections have continued to record robust growth, reflecting resilient domestic economic activity and improved tax compliance. Indias external sector has also remained resilient, supported by strong services exports, healthy foreign exchange reserves, and a manageable current account deficit despite global economic headwinds.

India continues to be the fastest-growing major economy and is expected to remain among the worlds leading growth engines over the coming decade. Its strong domestic market, expanding digital economy, favourable demographic profile, ongoing infrastructure development, and commitment to structural reforms are expected to support sustained long-term economic growth and strengthen its position as one of the worlds largest economies.

C. Industry structure and development:

India possesses the second-largest arable land area in the world. Indias Planning Commission classification identifies 15 agro-climatic regions and all the 15 major climates in the world exist in India . The country remains the worlds largest producer of milk, spices, and pulses, and is among the leading producers of rice, wheat, sugarcane, cotton, fruits, and vegetables, making agriculture a vital contributor to food security, employment, and economic growth.

The broader economic environment presents several challenges. India is currently navigating complex issues related to economic growth, asset quality, inflationary pressures, and fiscal discipline. For FY 2025-26, inflationary pressures had moderated considerably and the banking sectors asset quality had improved. The growth momentum has moderated from earlier levels, while a sustained recovery will depend largely on transparent, timely, and decisive policy action—elements largely outside the control of private enterprises, including those in the food grains trading sector. India must be consistent in regaining its position as a leading emerging market investment destination. This can only be possible if consistency and clarity is in our policies.

D. Opportunities and Threats:

Opportunities:

- With rising population, demand for food will continue to drive the need for better seeds.

- Improved varieties of seed will be required to meet the changing needs of climate, processing industry and modern retail. The governments focus and various subsidy and incentive schemes for the farmers will also add to the requirement of better-quality seeds.

- With shifting educational reforms and government regulations aimed at educating investors and raising trading awareness among the general public, there is a growing opportunity for stock brokerage firms.

- Number of modern techniques and tools along with awareness created by Agri-tech start-ups is helping farmers get into precision farming. This has in turn increased the appreciation of the farming community towards the value of inputs like seeds, bio fertilizers etc.

- Investments in warehousing, logistics, and cold chains under government schemes can enhance storage and transportation, reducing post-harvest losses.

Threats:

- Agriculture continues to be dependent on the vagaries of temperature and rainfall. Not only is quantity of rain important, but timing is even more critical. Rapidly changing climatic conditions and impact of global climate change is having a drastic effect on the performance of crops as well as cropping patterns.

- Geopolitical tensions, trade restrictions, or currency fluctuations can adversely affect export competitiveness and import pricing.

- Because firms can enter and quit an industry with few limitations, the number of substitutes in the same product line at different prices poses a risk of losing the investor base.

- Food grain production is heavily reliant on monsoon patterns. Irregular rainfall or extreme weather events (like droughts or floods) can disrupt supply and pricing.

- Threats for this Industry are very common and every person is aware of the threats and the risks involved with this Industry.

E. Segment-wise or Product-wise performance:

The Company is primarily engaged in Single Segment i.e. Trading and Distribution.

F. Future Outlook:

The Company presents the analysis of the Company for the year 2025-26 & its outlook for the future. This outlook is based on assessment of the current business environment. It may vary due to future economic & other developments, both in India and abroad.

G. Risks and Concerns:

The Company considers risk management as an integral part of its business strategy and it is embedded in its management and decision-making processes. The Company has established a structured framework to identify, assess, monitor, and mitigate various business risks. Oversight of the risk management framework is undertaken by the senior management, with defined responsibilities for monitoring risk exposures, compliance with approved risk policies, risk tolerance limits, and the overall risk profile of the Company. The Company also monitors its risk exposures against approved risk tolerance limits and undertakes causal analysis and appropriate remedial measures wherever required.

The key risks include credit, market, operational, liquidity, regulatory, cybersecurity, and fraud risks, which are managed through well-defined policies, strong internal controls, regular monitoring, and periodic reviews by senior management.

The Company also closely tracks changes in the economic, regulatory, and business environment and takes appropriate measures to minimise potential risks while ensuring operational efficiency, regulatory compliance, and sustainable long-term growth.

G. Internal control systems and their adequacy:

The Company has taken adequate preventive and precautionary measures to overcome all negative factors responsible for low trend to ensure steady growth.

Internal Control Systems are the foundation for ensuring achievement of organizations objectives of operational efficiencies, reliable financial reporting and compliance with laws, regulations & policies. The Company has in place Internal Control Systems commensurate with the nature of its business, size and complexity of its operations. These systems are regularly tested for their effectiveness by Statutory as well as Internal Auditor and were found to be operating effectively during the year. Reports of the Internal Auditor are placed before the Audit Committee on quarterly basis for review. The Audit Committee regularly reviews the reports and discusses the actions taken with the management in addition to reviewing the effectiveness of the internal control systems and monitoring the implementation of audit recommendations. There are adequate checks & balances in place, wherein deviation from the systems laid-out are clearly identified and corrective actions are taken in the respective areas, wherever required.

H. Discussion on financial performance with respect to operational performance:

The financial performance of the Company for the Financial Year 2025-26 is described in the Directors Report of the Company.

I. Material developments in Human Resources / Industrial Relations front including number of people employed:

The cordial employer - employee relationship also continued during the year under the review. The Company has continued to give special attention to human resources.

J. Material Financial and Commercial Transactions:

During the year there were no material financial or commercial transactions.

K. Key Financial Ratios:

In accordance with the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2018 (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in Key sector specific financial ratios. In this regard, the Company has significant changes in key sector specific financial ratios is described in the Financial Statement along with reason for the variance in this Annual Report.

L. Human Resources:

These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company operations include global and domestic demand supply conditions, Government regulations, tax regimes, economic developments and other factors such as litigation and business relations.

M. Caution Statement:

Statements made in the Management Discussion and Analysis describing the various parts may be "forward looking statement" within the meaning of applicable securities laws and regulations. The actual results may differ from those expectations depending upon the economic conditions, changes in Government. Regulations and amendments in tax laws and other internal and external factors.

Registered Office:		By the Order of the Board
Shop1-3,1 Floor, Piyu Apartment, Opp, Eletricity Sub Station, Jay Amarnath Soc, Nikol, Ahmedabad, Gujarat, India - 382		Hemo Organic Limited
350	Sd/-	Sd/-
Place: Ahmedabad	Murlidhar Joshi	Vishwambar Kameshwar Singh
Date: 13th August, 2026	Director & CFO	Managing Director
	DIN: 09819849	DIN: 09822587