Raghuvansh Agrofarms Ltd Management Discussions.

INTRODUCTION

Since its inception, the Company is engaged in agricultural operations. The Company is broadly engaged in cultivation of Organic Vegetables, Organic Grains and Cereals. We have an integrated facility for cultivation, processing and distribution of agricultural produce. Apart from the above, the Company is also engaged in dairy farming, production, distribution of dairy products and manufacturing of organic manure.

INDUSTRY STRUCTURE AND DEVELOPMENT

As per the land use statistics 2010 -11, the total geographical area of the country is 328.7 million hectares, of which 141.6 million hectares is the net sown area. The gross cropped area is 198.9 million hectares with a cropping intensity of 140.5%. The net irrigated area is 63.6 million hectares.

In India, agriculture is a traditional business which is being advanced with the use of scientific techniques, tools, equipments and machineries. The agriculture produce consumed in native place as well as exported to other countries.

Biomass has always been an important energy source for the country considering the benefits it offers. It is renewable, widely available, carbon -neutral and has the potential to provide significant employment in the rural areas. Biomass is also capable of providing firm energy. About 32% of the total primary energy use in the country is still derived from biomass and more than 70% of the countrys population depends upon it for its energy needs.

The availability of biomass in India is estimated at about 500 million metric tons per year. Studies sponsored by the Ministry have estimated surplus biomass availability at about 120 - 150 million metric tons per annum covering agricultural and forestry residues corresponding to a potential of about 18,000 MW. This apart, about 5000 MW additional power could be generated through bagasse based cogeneration in the countrys 550 Sugar mills, if these sugar mills were to adopt technically and economically optimal levels of cogeneration for extracting power from the bagasse produced by them.

OPPORTUNITIES AND THREATS

There is always demand of agricultural products, dairy products and organic manures. Apart from that there is always incremental demand of power. So Companys existing business is assured to be on demand whether there are agricultural, dairy products, organic manure or power generated through biogas power plant. Company is getting ahead for its expansion in its respective business sector as determined by its board.

Though company is operating in profit making sectors still its growth dependent on climate, government policies, availability of labors, and other factors.

SEGMENTWISE PERFORMANCE

Companys business activity primarily falls within a single business and geographical segment, during the year under review trading of agro and related products worth Rs. 4,07,39,41,859/ - were transacted.

OUTLOOK

The Company expects that the situation will ameliorate due to favorable changes in climatic condition and government policies. The market of agricultural and dairy product is expected to grow and would be on demand.

Company is making constant efforts to improve operational efficiency to increase the earnings and making value addition in their operational activities.

RISKS & CONCERNS THE MANAGEMENT PERCEIVE

Unfavorable climatic condition and uncertainty in economic growth which are not favorable presently in agricultural related activity is expected to impact the growth rate in India and consequently the Companys operations.

The growth in the industrial sector depends on government policies, better infrastructure, favorable climate, availability of labor, open market and growth in agricultural sector.

INTERNAL CONTROL SYSTEM & THEIR ADEQUACY

Internal Control Systems are implemented:-

• To safeguard the Companys assets from loss or damage.

• To keep constant check on cost structure.

• To provide adequate financial and accounting controls and implement accounting standards.

The system is being improved and modified continuously to meet with changes in business condition, statutory and accounting requirements. Internal controls are adequately supported by Internal Audit and periodic review by the management.

The Audit Committee meets periodically to review -

• Financial statements, with the management and statutory auditors;

• Adequacy/scope of internal audit function, significant findings and follow up thereon of any abnormal nature, with the internal auditors.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL EFFICIENCY

The details of the financial performance of the Company appear in the Balance Sheet, Statement of Profit and Loss and other financial statements appearing separately. Please refer the Directors Report for highlights.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES, INDUSTRIAL RELATIONS

The human resources received consistent attention during the year considering the growth of the organization and the need arising there from. The relation at all levels was cordial throughout the year and the Company has initiated many programs on enhancing the skills of its men power. As an ongoing exercise, the Company has continued to look at, identify, create and execute seamlessly, initiatives which enhance productivity and efficiency.

The Company continues to invest in people, required machines and equipments which enable the work force to meet the production requirements and challenges related thereto and to infuse positive enthusiasm towards the organization.

There were 08 employees on roll in an organization as on 31st March, 2019

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore, including:

Sr. No. Particulars 2017-18 2018-19 Change (in %)
1. Debtors Turnover Ratio 3.54 9.22 160.45%
2. Inventory Turnover ratio 2.18 43.61 1900.46%
3. Interest Coverage Ratio 686.75 1033.41 50.48%
4. Current Ratio 2.71 1.32 (39.17%)
5. Debt Equity Ratio* 0.48 1.96 308.33%
6. Operating Profit Margin (%) 19.00 1.45 (92.37%)
7. Net Profit Margin (%) 16.48 1.07 (93.51%)

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.

Sr. No. Particulars 2017- 18 2018- 19 Change (in %(
1. Return on Net Worth 13.17% 13.40% 1.75%

CAUTION

This report is based on the experience and information available to the Company in the agricultural, dairy business, manufacturing of manures and assumption in regard to domestic and global economic conditions, and government regulations etc.

The performance of the Company is dependent on these factors. It may be materially influenced by the changes therein beyond the Companys control, affecting the views expressed in or perceived from this report.

On behalf of the Board of Directors

For Raghuvansh Agrofarms Limited

-Sd-

(Subodh Agarwal)

Managing Director

DIN: 00122844