Darjeeling Ropeway Company Ltd Management Discussions

A. Industry structure and developments

The Indian agricultural trading sector is highly fragmented, yet evolving rapidly due to:

Growing formalization through FPOs and agri-tech platforms.

Expansion of digital mandis and real-time price discovery tools (e-NAM).

Increased private investment in warehousing, logistics, and food processing.

Export opportunities driven by global demand for rice, wheat, pulses, and spices.

The year saw improved procurement systems due to tech-enabled traceability and warehousing integration, along with stricter compliance norms from buyers (especially in exports).

However, the sector remains vulnerable to seasonal risks, price control policies, and volatility in commodity markets.

B. Opportunities and Threats

Opportunities:

Export growth to Africa, Southeast Asia, and the Middle East. Integration of digital platforms and blockchain in agri-supply chains. Government support for agri start-ups and FPOs for direct sourcing. Rising consumer demand for organic and value-added agri-products.

Growth of contract farming and tie-ups with food processing companies. .

Threats:

Climate variability, especially unseasonal rains and heatwaves. Frequent changes in export/import policies and MSP mechanisms. Dependency on intermediaries in rural procurement chains. Rising input costs (fuel, fertilizers, transport). Price volatility in global and domestic commodity markets.

C. Segment-wise or Product-wise performance

The Company operates in single Segment i.e. Trading in Agricultural activities on a works contract basis.

D. Future Outlook

The outlook for FY 2025 26 remains optimistic. The company expects:

Stable agri-output, supported by a normal monsoon forecast.

Government focus on doubling farmer incomes and enhancing rural infrastructure.

Wider adoption of smart warehousing and digital procurement models.

Entry into new export geographies and value-added product categories.

Development of a farmer-facing mobile platform for procurement and advisory services.

E. Risks and concerns

Risk Management is an integral part of our Companys business strategy. A dedicated team is a part of the management processes governed by the senior management team. This team reviews compliance with risk policies, monitors risk tolerance limits, reviews and analyzes risk exposure related to specific issues and provides oversight of risk across the organization. The team nurtures a healthy and independent risk management function to avoid any kind of misappropriations in the Company. As part of the Risk Management framework, the management of Credit Risk, Market Risk, Operational Risk and Fraud Risk are placed under the Head Risk. The Credit Risk management structure includes separate credit policies and procedures for various businesses. The risk policies define prudential limits, portfolio criteria, exceptional approval metrics, etc. and cover risk assessment for new product offerings. Concentration Risk is managed by analyzing counter-party, industry sector, geographical region, single borrower and borrower group. Retail Finance credit approval is based on product / programs and monitoring is primarily done at the portfolio level across products and programs. Causal analysis is carried out and corrective actions are implemented on key risk indicators. A Senior Management oversight committee meets periodically to review the operational risk profile of the organization. Fraud risks are mitigated through a fraud risk management team.

F. Internal control system 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 organisations 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.

G. Discussion on financial performance with respect to operational performance

The financial performance of the Company for the Financial Year 2024-25 is described in the report of the Board of Directors of the Company.

H. 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.

I. 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 no significant changes in key sector specific financial ratios.

J. 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.

K. 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.