omega ag seeds punjab ltd Management discussions

i. ECONOMIC REVIEW

India has the 10th largest arable land resources in the world and the country possesses 45 of the 60 soil types across the globe. The country is the largest producer of spices, pulses, milk, tea, while it ranks second in the production of wheat, rice, fruits and vegetables.

Indias agriculture sector is considered to be the backbone of the nations economy. Providing livelihood to over 58 percent of households in the rural areas, the agriculture sector, along with fisheries and forestry, is also one of the largest contributors to the Gross Domestic Product (GDP).

ii. INDUSTRY STRUCTURE AND DEVELOPMENT

At 179.9 million hectares, India holds the second largest agricultural land in the world. A majority of the Indian population relies on agriculture for employment and livelihood. Steady investments in technology development, irrigation infrastructure, emphasis on modern agricultural practices and provision of agricultural credit and subsidies are the major factors contributing to agriculture growth.

iii. OPPORTUNITIES AND THREATS

In spite of some of these positive cues, the agricultural sector has a whole set of complex challenges. The sector continues to be significantly dependent on the monsoons, as majority of the area is rain-fed and is dependent on timely and adequate rain fall. The effects of global warming and unseasonal rains have a negative impact on the crops and the farmers ability to take risks. Changing food consumption patterns as well as volatility in agricultural price has an important impact on the sowing patterns of the crops across various states of India.

Harvesting and post harvesting practices need significant improvement to avoid huge losses. The pressure on land usage for alternate purposes of real estate and industry are shrinking the availability of cultivable land in the country.

Opportunities

• Agriculture reforms targeted at doubling farmer income over next five years to support agri inputs consumption for improving crop yields

• Irrigation projects and Micro irrigation focus to reduce dependence on monsoon and improve nutrient use efficiency

• Higher disposable income on account of improved Minimum Support Price (MSP), augmented MGNREGA allocation, better price discovery through electronic National Agriculture Market and price support through crop insurance scheme

• Governments focus towards improving soil health through Soil Health Cards and Organic fertiliser marketing assistance to promote balanced nutrition practices and organic usage. Further, Direct Benefit Transfer to improve subsidy targeting and increase soil health based recommendations.

iv. RISK MANAGEMENT INITIATIVES

Risk management policies and limits are evaluated by the Board of Directors. Risk limits, policies and procedures are periodically revised keeping in mind changes in market conditions. Risk management in your Company entails an integrated approach with margin protection considerations forming the back-bone of risk management initiatives. The long -term objective of risk management is to provide stability in margins over a longer period and through downturns in economic cycles.

v. 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.

vi. CAUTIONARY STATEMENT

"Managements Discussion & Analysis Report" contains forward looking statements, which may be identified by the use of the words in that direction, or connoting the same. All statements that address expectation or projections about the future, including, but not limited to statements about the Companys strategy for growth, product development, market position, expenditures and financial results are forward looking statements. The Companys actual results, performance or achievements could thus differ materially from those projected in such forward looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward - looking statements on the basis of any subsequent development, information or events.