Bhaskar Agrochemicals Ltd Management Discussions.

(a) Industry structure and developments:

Indian agriculture witnessed a downtrend in sowings during both Kharif and Rabi seasons, due to below normal South West Monsoons and deficit North East monsoons, respectively. The ongoing Rabi season, especially witnessed less sowing, which was the prime reason for increase in prices for all key crops – wheat, paddy, cotton, maize, chana and soyabean. Indian agricultural sector is facing adversity due to factors like - shortage of labour supply- escalated labour costs- marginalized cultivable areas - lack of irrigation facilities, among other things.

The agrochemical production in India has risen by 2.9% in FY 19. Historically, the production has witnessed a CAGR of 4.3% during FY14-18. With the growth in population in India, there is a rise in production of crops, which in turn enhances demand for agrochemicals. Food grain and horticulture production grew by 1.8% and 3% CAGR, respectively during FY14-18.

(b) Opportunities and Threats:

Indias agrochemical consumption is one of the lowest in the worldwith per hectare consumption beingjust 0.6 kgs as compared to the United States (5-7 kgs/hectare) and Japan (11-12 kgs/hectare). With the increase in awareness and market penetration, consumption is likely to improve in the near future. The agrochemicals industry is expected to play a pivotal role in attainingfood security for a populous country like India.

India is fast emerging as a hub for contract manufacturing, due to some competitive advantages like Low Cost Manufacturing Capability, Availability of highly skilled workforce, Seasonal nature of domestic demand, Idle Capacity availability, Better price realizations in global markets and Ease of Doing Business

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

During the year under review, the Company has recorded revenue of Rs.5166.99 Lakhsand made a Profit of Rs.71.70 Lakhs against revenue of Rs.5220.09 Lakhs and a profit of Rs.38.94 Lakhs in the previous financial year 2017-18.

(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 businessoperations 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 56 permanent employees as on 31.03.2019.

i) Details of significant changes in key financial ratios along with detailed explanations thereof : Not Applicable

j) Details of any change in return on net worth as compared to the immediately previous financial year along with a detailed explanation thereof : Not Applicable

k) Disclosure of Accounting Treatment :

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

REMUNERATION DETAILS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

1. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Name of Directors Designation Ratio of Remuneration
P. Pattabhi Rama Rao Managing Director 21.15:1
P. Praveen Kumar Wholetime Director & CFO 21.15:1

2. The percentage in increase in remuneration of each directors, chief financial officer, Company secretary, if any in the financial year. No increase

3. The percentage increase in the median remuneration of Employees for the financial year: Nil

4. There were 56 permanent employees as on 31st March, 2019

5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration: Nil

6. The average increase in the remuneration of employees excluding KMPs during FY 2018-19 was Nil % and the average increase in the remuneration of KMPs was Nil %.

7. The remuneration of Directors was as per the Remuneration Policy of the Company.

8. Details of TOP 10 Employees

S. No Name and Age Age: Designation Remunera- tion per annum (in Rs.) Qualification and Experience Date of commencement of Employment Last employment No of equity shares held in the company Relation with any director of the Company
1 P. Pattabhi Rama Rao 69 Managing Director 24,00,000 B Com 19/02/1988 - 2,08,057 Husband of Mrs. P. Rajyalakshmi and father of Mr. P. Praveen Kumar Son of Mrs.
2 P. Praveen Kumar 42 Wholetime Director & CFO 24,00,000 B.Tech, M.B.A 24/11/2005 - 2,77,954 P. Rajyalakshmi and P. Pattabhi Rama Rao
3 G. Sada Siva Rao 55 Manager 9,64,152 B Com 05/06/1988 - - -
4 N. Adinarayana Rao 59 Manager 9,02,256 B.Com 15/05/1995 - - -
5 K. Bhaskar Reddy 44 Maintenance 5,28,000 Diploma ITI 01/11/2015 M/s Annapurna Ear Canal Ltd - -
6 S. Jagadeswara Rao 44 Chemist 5,28,000 M.Sc 20/07/2017 M/s Hyderabad Chemicals Ltd - -
7 K. Ravi Kishore 32 Accounts Officer 3,13,200 B Com 01/08/2013 M/s Exide Industries Ltd - -
8 G. Satyam 46 Supervisor (Prod) 2,70,000 Diploma ITI 23/01/1995 - - -
9 P.Bhujangadhararao 56 Accounts Officer 2,44,020 B.Com 05/06/1988 - - -
10 P.Lal Bahadur 49 Supervisor 2,40,180 Diploma ITI 14/07/2012 M/s Pristine Agro - -