Bombay Super Hybrid Seeds Ltd Management Discussions.

OVERVIEW

The economy of India is a developing mixed economy. It is the worlds sixth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP). The country ranks 139th in per capita GDP (nominal) with $2,134 and 122nd in per capita GDP (PPP) with $7,783 as of 2018. After the 1991 economic liberalisation, India achieved 6-7% average GDP growth annually. In FY 2015 and 2018 Indias economy became the worlds fastest growing major economy, surpassing China.

India ranks second worldwide in farm output. Agriculture and allied sectors like forestry, logging and fishing accounted for 17% of the GDP and employed 49% of its total workforce in 2014. Agriculture accounted for 23% of GDP, and employed 59% of the countrys total workforce in 2016.Agriculture is largest employment source and a significant piece of its overall socio-economic development.

First of all, the government develops agriculture so as to raise the gross national product (GNP). It can either impose direct or indirect measures. Subsidies, low-interest loan and guaranteed price can raise the quantity of farming output, i.e. the yield. With the increase of capital, quality of farming output can also be raised. For examples, the use of combine-harvester can ensure the crop to be fresh. Better seeds can be produced. In addition, quotas are implemented to discourage a particular kind of product importing from other countries. The domestic production increases after the imposition of quotas. These directly influence the production of farming.

With about 250 million below the poverty line, India accounts for about one-fifth of the worlds poor. Child malnutrition extracts its highest toll in this country. About 25% children suffer from serious malnutrition. More than 50 percent of the pre-school children and pregnant women are anaemic. The depth of hunger among the undernourished is also high.

To meet the projected demand in the year 2020, country must attain a per hectare yield of 2.7 tons for rice, 3.1 tons for wheat, 2.1 tons for maize, 1.3 tons for coarse cereals, 2.4 tons for cereal, 1.3 tons for pulses, 22.3 tons for potato, 25.7 for vegetables ( IARI Vison 2020), Productivity increasing varieties of crops, breeds of livestock, strains of microbes and efficient packages of technologies, particularly those for land and water management, for obviating biotic, a biotic, socio-economic and environmental constraints;

Yield increasing and environment-friendly production and post-harvest and value-addition technologies;

Reliable and timely availability of quality inputs at reasonable prices, institutional and credit supports, especially for small and resource-poor farmers, and support to land and water resources development.

Effective and credible technology, procurement, assessment and transfer and extension system involving appropriate linkages and partnerships; again with an emphasis on reaching the small farmers.

Improved institutional and credit support and increased rural employment opportunities, including those through creating agriculture-based rural agro-processing and agro-industries, improved rural infrastructures, including access to information, and effective markets, farm to market roads and related infrastructure.

OUR MAJOR CROPS

The Company are happy to share that we operate with almost 29 Crops with more than 100 varieties. These strategy is controlling fluctuation in our business which happens due to climate and monsoon pattern. Additionally, due to availability of in house fully high tech storage facilities, the basic factor of price fluctuation is minimized.

Additionally, company has increased emphasis on R & D by sourcing technology from agriculturally advanced nations and strengthen portfolio of existing products and incorporated several new products.

Groundnut :

Kharif-2018 groundnut crop acreage According to the Directorate of Economics and Statistics, GOI, all India kharif 2018the groundnut acreage was 38,90,000 hectares. The states which jointly accounted for 83.7% of the national acreage were Andhra Pradesh, Maharashtra, Rajasthan, Gujarat and Karnataka.

Being a dual purpose crop, both for fodder and grain for oil, it cultivation is growing significantly. In recent years, Groundnut cultivation is not limited for Kharif only but expanded for late Rabi and summer cultivation. Apart company has distinct geographical advantage of land of Saurastra, for seed production to cater the demand of Rajasthan, Maharashtra, Madhya Pradesh as well rest of Gujarat. The company is continuously coming out with new varieties to fulfil market demand.

Wheat :

India is the 4th largest producer of wheat in the world . It is important cereal crop. Wheat being most important staple food, rich with protein and god source of fibre, its demand increasing heavily with urbanisation. wheat has wide adaptability and can be grown in severe cold also.

BSHSL has made strong base in certified seeds production. Gujarat Certified, with Saurastra production, has priority demand. Apart, company has also introduced several research varieties to cater demand of different agro climatic zones.

Paddy/Rice :

India is one of the worlds largest producers of rice and brown rice, people of the eastern and southern parts of the country. Rice is one of the chief grains of India. Moreover, this country has the largest area under rice cultivation, as it is one of the principal food crops. It is in fact the dominant crop of the country. India is one of the leading producers of this crop. Rice is the basic food crop and being a tropical plant, it flourishes comfortably in hot and humid climate. Rice is mainly grown in rain fed areas that receive heavy annual rainfall. That is why it is fundamentally a kharif crop in India.

During the year, Company has entered in Paddy business by applying with Sales permission with State of Gujarat, Chhattisgarh etc.

Chick pea :

This highly nutritious pulse is ranked third in the important list of food legumes. India is the largest producer and approx. 80-90 % supply to world is from India. (IPGA) With decreasing rain scenario. it can be grown with less irrigation in cold climate also. BSHSL, with strong R & D efforts has successfully commercialized both Desi and Kabuli chick pea in Indian market and exploring export potential.

Cumin :

India ranks first in terms of acreage and production. Indian Cumin, dark coloured aromatic spice, finds worldwide use in foods. BSHSL with strong market presence in Gujarat and Rajasthan, ready with good varieties to capture this good export revenue earning crop.

Lucerne :

A protein rich fodder, along with good fibre , Calcium and other minerals. It is also considered as " Queen of fodder Crop" BSHSL has significant R & D for this crop and planning to expand with export potential. BSHSL has developed broad leaf, early cut start varieties, both for annual and in perennial segment.

Onion :

A poor man " Kasturi" with pan India cultivation and consumption. Saurastra, being well known tract of seed production of good quality ( Dark red) bulb is the greatest advantage for company. BSHSL has good R & D to cater Red , Lemon yellow and white bulb varieties.

FINANCIAL OVERVIEW

At this point of time, I have the pleasure and privilege to share with you the highlights of the years performance and Outlook for the next Year as mentioned below: I would urge all our shareholders to look at your companys performance from a wider perspective of resilience and long term growth.

Our total revenue of the company was marked to Rs. 7460.45 lakhs for financial year 2018-19.

Profit after tax was Rs. 208.42 Lakhs in Financial Year 2018-19 as compared to Rs. 117.84 Lakhs in the previous year 2017-18 , which represented the growth of around 77 %.

With respect to increase in earning of the company., EPS For Financial Year 2018-19 has also remarkably grew up to 3.24 from 3.12 in Financial Year 2017-18.

SWOT ANALYSES OF THE COMPANY

• STRENTH

During the year, your company has received sales licence from the State of Punjab, Odissa ,Uttar Pradesh & Chhattisgarh. Being major state of the country, your company is now able to expand its business more rapidly in pan India.

Bombay Super Hybrid Seeds Limited is one of the leading brands in Seeds & Agriculture field in India.

The company peruses its business pan India and developing its trade with Foreign Countries across the world.

The Company offers a wide range of products with diversified portfolio to match all 3 seasons.

The Company has one of best R&Ds facilities which are always active to ensure the constant and best quality of the product range we offer.

The Company changes the way of farming and the lives of farmers.

We, at Bombay Super Hybrid Seeds Limited, believe in perfection and development in all aspects.

As Seeds and Agriculture Industries totally relays on the perfect timings and seasons, The Company always ensure the Well-Time Distribution of products to farmers Door Steps through our best working Distributor Channel.

The Hybrid Seeds manufactured by the company are with a heavy load of High Germination Rates, Ability to Maintain the Genetic Purity & Physical Purity, High Yielding Ability, Disease Resistance, Lodging Resistance, Drought Tolerance, Healthiness & Vigorousness, Ability to Mature Early, High Oil Content, Development Geographical Location of Specific Varieties, Ability to perform in biotic & abiotic stress conditions & etc.

The Company have successfully tested foreign countries Germplasm for developing New High

Yielding Varieties.

Seed production is used to take in open field; hence, absolute quality control is not possible.

• Weakness:

As, the agriculture industries are leaned on the environment, the unexpected seasonal changes becomes the weakness of the company.

Changes to be adopted due to Alterations in some Government Policies, Rules and Regulations.

No proper forecast is possible for Seeds availability & Supply

Seed production is used to take in open field; hence, absolute quality control is not possible.

Opportunities;

During ongoing period, country wise good rain is an excellent opportunity for increasing business

Company has participated in Indus valley Seed Congress held at Dubai to explore the various business opportunities.

The opportunity to contribute into the National Income Growth by Exporting the Seeds across the world.

The Company is working in all major agricultural states of India; hence, high number of employment opportunities is created.

The company is digitally hyperactive, hence, the opportunities to connect the world Commercially is created.

The opportunity to grow mutually with 700 plus distributors pan India.

The company is in Tie-up as well as using Germplasm of many of the Known Agricultural Universities of the country including International Crop Research Institute Semi Arid and Tropics (ICRISAT), Indian Agriculture Research Institute (IARI) New Delhi, Jawaharlal Nehru Krishi Vishwa Vidyalaya (JNKVV) Jabalpur, Bhabha Atomic Research Centre (BARC) Mumbai and Many More.

Opportunity to introduce new breeds of seeds to the country by being fond of accepting them for R&D operations.

With growing Urbanization, Vegetables Consumption is increasing; hence, the opportunity of creating wide portfolio of such seeds is created.

Threats;

Limited Collaborations in Seed Sector between Countries due to Strict Government Policies & climate related variations.

Changes in cropping pattern, based on Global Commodity prices.

• GROWTH OPPORTUNITIES & OUTLOOK

The major kharif crops include Maize, Soybean, Groundnut, Cotton , Pulses and rice. Out of same BSHSL has already dominant position in Groundnut and expanding rapidly in Soybean , Pulses & Maize. Ground nut alone with national area of 38,90,000 Hector has good potentiality for BSHSL.

Among major Semi/rabbi crops of India which includes Chick pea (8.84 million hac.) Wheat (30.17 million hac), Cumin (703000 hac), Onion (1225000 Hac), BSHSL has wide range of R & D products and all necessary licences in all above segments, it can achieve reasonable growth.

Again, fodder segment, which is developing very fast due to increasing milk consumption (due to awareness and urbanization), BSHSL has Fodder Bajra, SSG and Lucerne. Lucerne has approx. 1000000 hac. area with limited seed players.( agro pedia, iitk, ac, in)

With well diversified products portfolio, good storage, prompt delivery to end point infrastructure, with well-developed R & D with experienced manpower, BSHSL has proper growth plan.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be ‘forward-looking statements within the meaning of applicable laws and regulations. Actual results could differ substantially or materially from those expressed or implied. Important factors that could affect the companys operations include a downward trend in the domestic industry, monsoon, rise in input cost and significant change in political and economic environment in India, environment standards, litigations, changes in the Government regulations, tax laws, statutes and other incidental factors.