R J Bio-Tech Ltd Management Discussions.

Industry Structure and Outlook:

Seed is the basic and most critical input for sustainable agriculture. The response of all other inputs depends on quality of seeds to a large extent. It is estimated that the direct contribution of quality seed alone to the total production is about 15 - 20% depending upon the crop and it can be further raised up to 45% with efficient management of other inputs. The developments in the seed industry in India, particularly in the last 30 years, are very significant. Farmer has a wide product choice and seed industry today is set to work with a ‘farmer centric approach and is market driven.

Opportunity

• Rise in consumption pattern of food has provided a room to Indian seed industry to provide more high quality seeds with better productivity.

• The company has continuously invested and focused on its R&D, thus in forthcoming period, there are more high quality seeds to hit the market.

• Faster adoption of new technological seeds by Indian farmers

Threat

• Inadequate Working Capital during the peak period

• Dependency on monsoon

Segment wise performance:

Segment wise sales breakup of the Company for the Financial Year 2015-16, 2016-17 and 2018-2019 is as follows:

Segment wise Sales

Type of Crop Sales for FY 2018-19 (in Lakhs) % as to the Total Sales for FY 201819 Sales for FY 201718 (in Lakhs) % as to the Total Sales for FY 201718 Sales for FY 201617 (in Lakhs) % as to the Total Sales for FY 201617
Cotton 301.71 30% 99.38 11% 188.62 12%
Paddy 441.24 44% 506.30 56% 522.61 33%
Maize 91.76 9% 127.93 14% 430.17 27%
Vegetables 117.65 12% 117.08 13% 295.50 19%
Other field Crops 59.25 6% 52.07 6% 136.93 9%
Total 1011.61 100% 902.76 100% 1573.83 100%

Risk and Concerns:

• Drastic changes in weather pattern, erratic climate, unseasonal rain, drought etc. have major impact on the cropping pattern in the country & normal sowing cycles are disturbed due to rain.

• Volatility in farm harvest prices &farmers willingness and ability to spend will be an important driver to demand generation.

Internal Control Systems and their adequacy:

The Company has an adequate system of internal controls in place. It has documented policies and procedures covering all financial and operating functions. These controls have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations and protecting assets from unauthorised use or losses, compliances with regulations. The Company has continued its efforts to align all its processes and controls with global best practices.

Financial Performance with respect to Operational Performance:

Particulars 2018 2019

% to revenue

2017 2018 % to revenue Growth rate
I Revenue from Operations 1025.04 100 902.76 100 11.93
II Expenses:
Cost of Materials Consumed 349.26 34.07 601.63 67.70 -72.26
Purchases of Stock-in-Trade
Changes in Inventories of Finished goods, work-in-progress and Stock-in Trade 275.64 26.89 176.20 19.83 36.08
Employee Benefit Expenses 153.27 14.95 157.09 12.02 -2.49
Finance Costs 413.74 40.36 388.83 29.75 6.02
Depreciation & Amortization Expenses 15.03 1.47 30.02 1.62 -99.73
Other Expenses 971.3 94.76 742.43 43.69 23.56
Total Expenses 2178.24 212.50 2096.23 141.05 3.76
III Profit/(Loss) before exceptional and extraordinary items and tax -1153.2 -112.50 -1193.47 -133.71 -3.49
Exceptional Items 0.13 0.01 883.18 82.49 -679269.2
IV Profit/(Loss) before extraordinary items and tax -1153.07 -112.49 -2076.66 -166.66 -80.10
V Profit before tax -1153.07 -112.49 -2076.66 -166.66 -80.10
VI Tax Expense:
(1) Income tax 0 0.00 0
(2) Current tax 0
(3) Deferred tax charge / (credit) 0
(4) MAT Credit 0
(5) Wealth Tax 0 0.00 0 0
VII Profit after Tax -1153.07 -112.49 -2076.66 -166.66 -80.10
VII Earning per equity share:
I Basic & Diluted -12.18 -21.93

Material Developments in Human Resources / Industrial Relation:

The Company believes that the success of any organisation depends upon availability of human capital. Our assets are our people who work to innovate beyond and challenge established boundaries. Thus, employees are vital to the Company. We have favourable work environment that encourages innovation and meritocracy. We focus on attracting the best and brightest talent and the meritocracy is the sole criteria for selection. The Company firmly believes that manpower is the most important asset, above all..No Strikes, Lock outs or any anarchy occurred during the period under review and Company enjoys cordial industrial relations with its employees.

Cautionary Statement:

Statements in the Management Discussion and Analysis describing the Companys objective, projections, estimates, expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include, among others, economic conditions affecting demand / supply and price conditions in the domestic market in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors.

By order of the Board
Date: 3rd September 2019 SD/-
Place: Aurangabad Harshwardhan Joshi
(Chairman)
DIN:06742716