bhaskar agrochemicals ltd Management discussions

Management Discussion and Analysis Report:

(a) Industry structure and developments:

Agriculture and its affiliated sectors continue to be the largest source of livelihood for more than 58% of Indias population and its growth ensures economic growth of the country. Nearly 54.6% of the nations work force is engaged in agriculutrul and allied activities . This sector accounts for nearly 18.3% of Indias gross value added. While rainfall numbers for FY 2022-23 reflects above average monsoon, the season was marked by highly erratic spatial distribution, extended withdrawal of monsoon and instances of flooding & crop damages. Uneven monthly as well as geographic spread of south-west monsoon led to lower sowing of Kharif crops, mainly paddy and foodgrains. Rabi season was also delayed due to extended withdrawal of southwest monsoon and untimely & heavy rainfall in October.

(b) Opportunities and Threats:

The Indian Governments policies like "Make in India" which aims to promote domestic manufacturing has played a crucial role in supporting the agrochemical industry. One key driver of Indias growth in the agrochemical sector is the backward integration of production processes. Indian companies have been investing in the production of off-patent molecules and reducing their reliance on imports from China. They have also focused on registering off-patent products and developing relationships with distributors to push volumes at more affordable prices. The growth in domestic Agrochemicals is was mostly driven by higher prices while volumes remain muted. Huge inventories with surplus from the previous weak seasons in the domestic markets restricted new product placements and volume growth in FY 2022-23. The Kharif season was impacted by lower spraying opportunities due to crop damages, erratic rainfall and low pest infestations while sowing in Rabi season got delayed on account of untimely and heavy rainfall in October due to extended monsoon withdrawal. At the same time, price hikes were not commensurate with the rising input costs which impacted sector margin profile as w

(c) Segment–wise or product-wise performance:

During the year under review, the Company has recorded revenue of Rs. 5525.62 Lakhs and made a Profit of Rs. 23.43 Lakhs against revenue of Rs. 6245.48 Lakhs and a profit of Rs. 108.77 Lakhs in the previous financial year 2021-22.

(d) Outlook:

The management is doing its best to forge relations with other companies and take the company forward in the new business lines. However, the outlook of the management is cautious in view of the competitive nature of the market.

(e) Risks and concerns:

Risk management comprises all the organisational rules and actions for early identification of risks in the course of doing business and the management of such risks along with identification of opportunities.

The Company as formulated a Risk Management Policy under which various risks associated with the business operations is identified and risk mitigation plans have been put in place.

(f) Internal control systems and their adequacy:

The system of internal control has been established to provide reasonable assurance of safeguarding assets and maintenance of proper Accounting Records and its accuracy. The business risks and its control procedures are reviewed frequently. Systems audit is also conducted regularly to review the systems with respect to Security and its Adequacy .Reports are prepared and circulated to Senior Management and action taken to strengthen controls where necessary.

(g) Discussion on financial performance with respect to operational performance:

The Financial performance of the Company has been detailed in Boards Report under para Financial summary.

(h) Material developments in Human Resources/Industrial Relations front, including number of people employed:

The Company has able and experienced staff and dedicated executives. The company continues to have cordial relations with its employees and other stakeholders.The Company has 97 permanent employees as on 31.03.2023.

i) Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios along with detailed explanations thereof:Sector-specific equivalent ratios, as applicable:

The system of internal control has been established to provide reasonable assurance of safeguarding assets and maintenance of proper Accounting Records and its accuracy. The business risks and its control procedures are reviewed frequently. Systems audit is also conducted regularly to review the systems with respect to Security and its Adequacy .Reports are prepared and circulated to Senior Management and action taken to strengthen controls where necessary.

(g) Discussion on financial performance with respect to operational performance:

The Financial performance of the Company has been detailed in Boards Report under para Financial summary.

(h) Material developments in Human Resources/Industrial Relations front, including number of people employed:

The Company has able and experienced staff and dedicated executives. The company continues to have cordial relations with its employees and other stakeholders.The Company has 78 permanent employees as on 31.03.2022.

i) Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios along with detailed explanations thereof: Sector-specific equivalent ratios, as applicable:

PARTICULARS	2022-2023	2021-2022	REMARKS
Debtors turnover ratio	3.71 Times	7.57 Times
Inventory turnover ratio	3.20 Times	4.30 Times
Interest coverage ratio	1.877 Times	2.678 Times
Current ratio	1.03	1.03
Debt equity ratio	0.51	0.51
Operating profit margin (%)	3.82%	5.35%
Net profit margin (%)	0.42%	1.74%
Return on Net worth	1.94%	9.21%

j) Disclosure of Accounting Treatment:

The Company has not carried out any treatment different from that prescribed in Accounting Standards.

CAUTIONARY STATEMENT:

Statements in this Management Discussion and Analysis Report may be "forward looking statements: within the meaning of applicable securities laws and regulations. These statements are based on certain assumption and expectations of future events. Actual results could differ materially from those expressed or implied. Important facts that could make a difference at the Companys operations include economic conditions affecting domestic demand and supply conditions, finished goods prices, changes in government regulations and tax regime etc. The Company assumes no responsibility to publicly amend, modify or revise any forwardlooking statements on the basis of subsequent developments, information or events.