Nagarjuna Agri Tech Ltd Management Discussions

1. OVERVIEW REVIEW

Floriculture or flower farming is the study of growing and marketing flowers and foliage plants. Floriculture includes cultivation of flowering and ornamental plants for direct sale or for use as raw materials in cosmetic and perfume industry and in the pharmaceutical sector. It also includes production of planting materials through seeds, cuttings, budding and grafting. Worldwide more than 140 countries are involved in commercial Floriculture. The leading flower producing country in the world is Netherlands and Germany is the biggest importer of flowers. Countries involved in the import of flowers are Netherlands, Germany, France, Italy and Japan while those involved in export are Colombia, israel, Spain and Kenya. USA and Japan continue to be the highest consumers.

The floriculture industry in India is still at its nascent stage and a large portion of its potential remains untapped. The Indian floriculture industry has shifted from traditional flowers to cut flowers, mainly for export purposes. Modernization and growing western cultural influences resulted in the growth in demand for flowers amongst the consumers in India, especially the young. Apart from this, there is also a huge spurt in the demand for flowers during festivals. This growth in demand for flowers has impacted its retailing in India. The report states that in terms of rupee value, the industry has grown at a CAGR of nearly 20% in the last five years.

During the year under review, the Company has decided to move in FMCG segment for expansion of business. To have a niche in the market, the Company has upcoming plans and strategies to work ahead in this segment.

2. INDUSTRY STRUCTURE AND DEVELOPMENT

In the recent years it has emerged as a profitable agri-business in India and worldwide has led to an increase in the demand of floriculture products in the developed as well as in the developing countries worldwide. The production and trade of floriculture has increased consistently over the last 10 years, in India, Floriculture industry comprises flower trade, production of nursery plants and potted plants, seed and bulb production, micro propagation and extraction of essential oils. Though the annual domestic demand for flowers is growing at a tremendous rate and international demand are increasing at a very high note, Indias share in international market of flowers is negligible.

The Indian floriculture market size reached INR 292.0 Billion in 2024. Looking forward, IMARC Group expects the market to reach INR 744.0 Billion by 2033, exhibiting a growth rate (CAGR) of 10.9% during 2025-2033. The continual advancements in technology and agricultural practices, the rising government initiatives and policies supporting floriculture, and the emergence of organized retail and e-commerce platforms across the country are among the key factors driving the market growth.

3. OPPORTUNITIES AND STRENGTH

• Consistent focus on High Standard of Quality

• Established manufacturing facilities with over decades of operations in the heavy electrical and engineering industry.

• International market also providing great opportunities for the floriculture section in India.

• Experienced Promoter and strong senior management team with extensive knowledge of the sector.

• Established distribution network and long term relationship with our customers

• Experienced Marketing Team.

• Operational Excellence.

4. THREATS AND RISK

• General economic and business conditions in the markets in which we operate and in the local & regional economies;

• Changes in Industry Requirements;

• New Innovation of our product portfolio, from time to time;

• Changes in laws and regulations that apply to the industries in which we operate;

• Inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

* The performance of the financial markets in India and globally.

* The availability of dedicated carriers for carrying perishable products is also low in India and freight rates are high.

5. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an effective and reliable internal control system commensurate with the size of its operations geared towards achieving efficiency in its various business operations, safeguarding assets, optimum utilization of resources and compliance with statutory regulations. At the same time, it adheres to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, the detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. The internal control system is looked after by Directors themselves, who also looked after the day to day affairs to ensure compliances of guide lines and policies adhere to the management instructions and policies to ensure improvements in the system. The Internal Audit reports are regularly reviewed by the management and efforts for continued improvement of internal control system are being consistently made in this regard.

6. HUMAN RESOURCES VIS-A-VIS INDUSTRIAL RELATIONS

We believe that our employees are key contributors to our business success. We focus on attracting and retaining the best possible talent. The Company, values and appreciates the dedication and drive with which its employees have contributed towards improved performance during the year under review. The relations with workers and staff are cordial during the year under review. All issues pertaining to staff matters are resolved in harmonious and cordial manner. Our Company looks for specific skillsets, interests and background that would be an asset for our business.

7. RISK MANAGEMENT

All material Risks faced by the Company are identified and assessed. For each of the risks identified, corresponding controls are assessed, and policies and procedures are put in place for monitoring, mitigating and reporting risk on a periodic basis.

8. KEY FINANCIAL RATIOS

9. CAUTIONARY STATEMENT

Certain statements made in the Management Discussion and Analysis Report relating to the Companys objectives, projections, outlook, expectations, estimates, and others may constitute "forward-looking statements" within the meaning of applicable laws and regulations. Actual results may differ from such expectations, whether expressed or implied. Several factors could make a significant difference to our operations. These include climatic and economic conditions affecting demand and supply, and price conditions in the domestic and overseas markets in which the Company operates changes in the Government regulations, tax laws, any epidemic or pandemic and natural calamities over which we do not have any direct/indirect control.