grandeur products ltd Management discussions

A. CAUTIONARY STATEMENT:

The statements in the "Management Discussion and Analysis Report" describe your Companys objectives, projections, expectations, estimates or forecasts within the meaning of the applicable laws and regulations. Actual results may differ substantially or materially from those expressed or implied herein due to risks and uncertainties. Important factors that could influence the Companys operations, inter alia, input availability and prices, changes in government regulations, tax laws, economic, political developments within the country and other factors such as litigations and industrial relations.

B. OVERVIEW:

With Covid -19 creating widespread disruptions across the economic segments, agriculture remained the least impacted sector, more so at the point of production. The global agriculture, though, had to withstand multifaceted challenges including the pandemic, locust infestation, extreme climate conditions, African swine fever, growing resistance to antimicrobial substances, and fertilizer usages. Supply chain disruptions, low container availability and pandemic-related restrictions further aggravated the stress.

While the pandemics impact on agricultural production and also supply chain disruptions and demand volatility are far from over, the sectors long-term challenges and prospects remain intact. The growing food demand with contracting land and water resources hinges significantly on yield improving inputs, practices and technology.

India continues to dominate the world agriculture as the largest producer of spices, pulses, milk, tea, cashew and jute, and the second-largest producer of wheat, rice, fruits and vegetables, sugarcane, cotton and oilseeds.

Despite severe health and socioeconomic challenges inflicted by the Covid -19 pandemic in FY 2020-21, the Indian Agriculture Sector received significant impetus during the year. First among them was exemptions allowed for the agriculture and allied sectors from the nationwide lockdown. The three laws namely The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, The Essential Commodities (Amendment) Act and The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act were introduced during the year and are presently under discussion with the stakeholders.

Switching the overarching objective from eradicating hunger to ensuring diverse nutrition, from growing for India to grow for the world, from yield improvement to raising farm incomes, from monsoon dependence to sustainable, green farming ought to be to the larger agenda now. India has the potential to not only provide food support to the nation but also catapult agricultural contribution to the national GDP to a much higher level. Looking back at the year gone by, agriculture was classified as an essential commodity and hence exempted from the nationwide lockdown. With good reservoir levels and retained soil moisture from the previous Rabi season, the sector was blessed with an above-normal monsoon for the second consecutive year. Early cropping during the Kharif season and prolonged monsoon created a very favourable climatic and soil condition for year-round cultivation of food crops, cash crops, fruits and vegetables.

C. INDUSTRY STRUCTURE AND DEVELOPMENT:

The Federation of the Seed Industry of India (FSII) claims that the Indian seed industry is worth Rs 18,000 Crore and is constantly growing. Looking at the countrys well-developed seed industry and expertise in the sector, it has the potential to become a global hub, according to the FSII. The growth in seed industry can be attributable to various factors including rising population, reducing arable land, increasing demand for high-value agricultural products and sustained efforts from the industry and the Government to promote awareness and technology penetration. Robust domestic demand for agrochemicals is expected with favorable agronomical conditions such as good moisture in the soil and adequate water levels in reservoirs which bodes well for the Rabi crops. The Governments strong thrust towards agricultural sector growth, the demand for agrochemicals is expected to remain robust. The growth of the industry is expected to rise upward led by improvement in both acreage and crop prices.

To improve the quantity and quality of agricultural produce, significant efforts are under progress to introduce enhanced varieties of seeds with the help of advanced technology and modern agricultural methods. The industry has garnered active participation of both, public and private sectors to launch several initiatives to promote the use of hybrid seeds. Several other drivers for growth in the industry include rising income levels, commercialisation of agriculture, patent protection systems and intellectual rights over plant varieties.

In order to meet the increasing demand for agricultural produce for both domestic consumption and exports, it is necessary to further improve the quality of seed production and quality assurance. Since quality seed is important for increasing production, there is a need to develop appropriate guidelines for the production, quality control and evaluation of high-quality seeds.

The Indian seed industry can become a globally competitive, export-oriented, and self-reliant industry, especially for several Asian, African, East European, and South American countries, which share similar agriclimatic conditions as India.

D. OUTLOOK:

India is expected to achieve the ambitious goal of doubling farm income by 2022. The agriculture sector in India is expected to generate better momentum in the next few years due to increased investment in agricultural infrastructure such as irrigation facilities, warehousing and cold storage. Furthermore, the growing use of genetically modified crops will likely improve the yield for Indian farmers. India is expected to be selfsufficient in pulses in the coming few years due to concerted effort of scientists to get early maturing varieties of pulses and the increase in minimum support price.

The government has set the production target for food grain for the crop year 2021-22 at a record 307.31 million tonnes. This includes production of 151.43 million tonnes of food grains during kharif (summer) season and 155.88 million tonnes during rabi (winter) season. The targeted production is over 1.3% more than the last years estimated food grain production of 303.34 million tonnes.

E. FINANCIAL REVIEW

During the financial year, your Company posted a net loss of Rs.113.34 Lakhs. The Company is taking steps to improve the Companys performance and increase the profitability in the future. The key highlights of the Standalone and Consolidated Financials for the Financial Year ended March 31, 2021 are as under:

Particulars	Standalone		Consolidated
	2020-2021	2019-2020	2020-2021	2019-2020
Revenue from operations	-	3.42	5,684.30	9,868.50
Other income	-	2.87	153.15	35.32
Profit/ (Loss) before Finance cost, Depreciation and Tax	(71.35)	(59.84)	(21.06)	644.51
Finance costs	35.50	108.60	696.05	560.11
Depreciation and amortization expense	1.03	1.91	25.43	29.70
Profit before exceptional and extraordinary items and tax	(107.88)	(170.35)	(742.54)	54.70
Share in net profit/(loss) of associate and joint venture	-	-	(17.19)	(27.13)
Exceptional items	-	-	-	-
Extraordinary items	-	-	-	-
Profit before tax	(107.88)	(170.35)	(759.73)	27.57
Tax expense:
(1) Current tax	-	-	-	38.93
(2) Prior Year Income Tax expenditure	-	-	-	(4.54)
(3) Deferred tax	5.46	(0.48)	(132.47)	11.09
(4) MAT Credit Entitlement	-	-	-	(38.93)
Profit (Loss) for the year	(113.34)	(169.87)	(627.26)	21.02
Total comprehensive income	17.67	(23.96)	36.66	(25.20)
Total comprehensive income for the period	(95.67)	(193.83)	(590.60)	(4.18)

Key Financial Ratios (Consolidated)

In accordance with SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the details of significant changes (change of 25% or more as compared to the immediately previous financial year) are given below:

S. No. Financial Ratios	2020-2021	2019-2020
1. Operating Profit Margin (%)	2.77	6.25
2. Net Profit Margin (%)	-10.78	0.21
3. Interest Coverage Ratio	-0.05	1.10
4. Current Ratio	0.73	0.89
5. Debt Equity Ratio	1.72	2.94
6. Debtors Turnover	2.60	3.03
7. Inventory Turnover	0.99	156
8. Return on Net Worth	-8.39	0.00

Significant changes in the financial ratios is due to the advent of Covid-19 on the operations of the Company.

F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has in place adequate and appropriate systems of internal controls commensurate with its size and the nature of its operations and these have broadly withstood the test of time. The systems have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorizations and ensuring compliance of corporate policies.

The Internal Audit team is reviewed by the Audit Committee of the Board which monitors its performance on a periodic basis through review of audit plans, audit findings and speed of issue resolution through followups. Through at least four meetings every year, the audit committee reviews internal audit findings assurance and advisory function, which is responsible for evaluating and improving the overall effectiveness of risk management, control and government processes. This entire process helps enhance and protect organizational value by providing risk-based objective assurance, advice and insight.

H. OPPORTUNITIES AND THREATS:

Tierra Seed Science Private Limited (TSSPL) is the Wholly Owned Subsidiary of your Company. Your Companys emphasis on R&D has been critical to its success and a differentiating factor from competitors. Dedicated R&D is undertaken in existing products primarily with a focus to improve yields and process efficiencies. Your Company also focuses on R&D efforts in areas where there is a significant growth potential. TSSPL provides your Company with access to strong R&D capabilities. Investment is also being made in developing innovative technologies to further grow through product portfolio across businesses.

The wholly owned subsidiary of your company i.e. Tierra Agrotech Private Limited is one of the germplasm enriched company in the country, particularly in cotton after acquisition of Monsantos India cotton business and Dupont - Pioneers Cotton company Xylem. Your Company will continue to focus on improving the market share present products as well as in launching new products. Your Companys ability to increase sales will be strengthened by continued focus on offering a wide range of innovative products which will help in gaining market share.

By 2050, the world will have 10 billion people, with India accounting for 1.73 billion (Source: United Nations). To feed Indias growing population, the yield per hectare needs to increase significantly - especially keeping in mind the declining cultivatable land in India. Further, Indias agricultural yield is far lower as compared to global averages. Extreme weather coupled with low penetration of high-yielding hybrid seeds, lack of awareness of modern agricultural technologies and inefficient use of agrochemicals are some of the factors behind the low yields. This presents a significant opportunity for the Companys Hybrid Seeds business along with opportunities for expanding crop advisory and digital offerings.

Innovation in seeds, crop protection and digital farming solutions can go a long way in addressing the productivity problems affecting Indian agriculture. It will also help farmers get good commodity prices, encouraging them to spend on qualitative inputs for achieving higher yields.

The performance of the seed industry is heavily dependent on monsoons, pest and disease incidences on crops. Major fluctuations in total rainfall and its distribution affect the crop acreages and overall productivity and have a direct correlation with sales. Over the period industry has become more fragmented which may Affect Companys profitability. Strong support produce prices and better availability of credit will ease the pressure on the farming community. Tightening regulations can be looked upon as an opportunity by committed enterprises.

Water scarcity has also become a growing issue as water is utilized for potable use and less water is available for farming. Water stress is and will be driven by degeneration of water table caused by usage, shifts in demand for water, and variation in availability of water resources due to climatic changes. During past few years the rate of expansion of area under irrigation is slowing down and it will be imperative to increase area under irrigation to reduce the usage of water by optimally utilizing the natural resource.

I. HUMAN RESOURCES:

As a key contributor to the successful attainment of organizational goals, holistic development and well-being of employees remain at the forefront of its business approach. Company has a Policy of Prevention of Sexual Harassment (POSH) to ensure a harassment-free workplace for employees. Harassment cases are dealt with as per the Companys zero-tolerance policy. During the year 2020-21, no case was reported on sexual harassment.

People are the key assets that are instrumental in driving the companys performance year on year. Their passion, commitment, sense of ownership and team work has enabled the Company to grow even in unpredictable and uncertain environment. The Company strives to offer a positive, supportive, open and high performance work culture where innovation and risk taking is encouraged.

Further, your Company would like to sincerely appreciate the valuable contribution and support of employees towards the performance and growth of the Company.