RKB Agro Industries Ltd Management Discussions.

Industry structure and developments :

The main business activity of the Company relates cotton which is an agro based activity. Therefore understandably the indicator for the performance of the companys is timely rains and favorable weather condition coupled with remunerative price for their produce that would help encourage the farmers to go in for cotton cultivation. In the last two years thanks to reasonable good rainfall in the cotton growing area of Karnataka the Companys performance has been on encouraging note.

The assistance and guidance extended by the Government has been an encouraging factor for making cotton cultivation reasonably attractive. The demand for quality cotton is another factor that would help the industry realize remunerative price to sustain the growth. .

Review of operating performance :

Particulars 31st March 2019 31st March 2018
Gross Revenue from operations 2937.82 4164.36
Other Income 21.29 33.56
Total Revenue 2959.11 4197.92
Expenditure before depreciation and financial cost 2851.37 4046.45
Depreciation 26.19 23.27
Financial cost 73.45 83.92
Profit before tax 8.10 44.28
Provision for Tax – Current Tax 1.80 10.47
Mat Credit Set off (0.80) (1.93)
Deferred tax Charge/ (Income) 1.40 1.44
Tax adjustment of earlier years - 0.21
Profit/(Loss) after Tax for the year 5.70 34.08
Earnings per share – Basic & Diluted 0.08 0.45

During the year the revenue declined as compare to last year due to reduced sales, unfavorable weather conditions and other market conditions.

Effect of economy on the company

Though there are no visible weaknesses, the textile industry is prone to cyclical recession trend. The going would be good so for the industry gets supportexemption support from Government.

Industry Outlook

The world consumption of cotton is forecast to increase as clothing and textile production continues to expand throughout Asia, with India expected to witness robust increase in production, the outlook remains positive for the country. Global cotton imports are on the rise, lead by China and this would aid the boosting India‘s export substantially.

Risk and Concerns

The risk management policy is being renewed periodically by the management and appropriate actions will be taken and also the policy would get reviewed to deal with the development taking place in the industry.

With the contemplated efforts the company has achieved a positive operating figure though it was negative in the previous year.

Your company was confident of showing better performance in the coming years. Your company continues to accord highest priority for safety in all of its operations. The processing facilities are subject to regular inspections. A safety Audit is undertaken regularly to ensure safety in the process. Your company has taken adequate insurance cover for all of its plant and machinery as well as for third party liabilities.

Transparency and sharing of Information

Transparency refers to sharing of information in an open manner. Processes, instructions and information are accessible to those concerned with them, and enough information is provided to understand them. Your company believes in total transparency in sharing information about its business operations with all its stakeholders. Your company strives to provide maximum possible information in the management discussion and analysis in the annual report and also through the other means to keep the stakeholders informed about the business performance.

Internal Control Systems

The company has instituted adequate internal control procedure commensurate with the nature of its business and the size of its operations for the smooth conduct of its businesses.

The Audit Committee monitors performance of Internal Audit on a periodical basis through review of the audit plans, audit findings and promptness of issue resolution through follow-ups.

Human Resources

The company‘s industrial relations continued to be harmonious during the year under review.

Cautionary Statement

The contents in this Management Discussion and Analysis describing the Companys objectives, estimates and expectations constitute "forward looking statements" given the existing laws and regulations which the management believes are true to the best of its knowledge at the time of preparation of this report. Actual results could differ materially from those expected or implied. Important factors that could make a difference to your companys operations include economic conditions affecting the demand/supply, price conditions in the domestic and international markets, and changes in government regulations, tax laws, other statutes and other incidental factors.

CEO / CFO Certification

The Board of Directors,

R K B Agro Industries Limited

Raichur.

Re: Financial Statements for the financial year 1.4.2018 to 31.3.2019 Certification by Managing Director and Whole-time Director

We, Mr. S K Bhandari, Managing Director, Mr. V M Bhandari, Whole time Director and Mr. Sripad Hanchate, Chief Financial Officer, on the basis of the review of the financial statements and the cash flow statement for year ended 31st March 2019 and to the best of our knowledge and belief, hereby certify that:

1. These statements do not contain any materially untrue statements or omit any material fact or contain statements that might be misleading.

2. These statements together present a true and fair view of the companys affairs and are in compliance with existing accounting standards, applicable laws and regulations.

3. These are to the best of our knowledge and belief, no transactions entered into by the Company for the year ended 31st March 2019 which is fraudulent, illegal or violative of the Companys code of conduct.

4. We accept responsibility for establishing and maintaining internal controls for financial reporting, we have evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the audit committee those deficiencies in the design or operation of such internal controls of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

5. We have indicated to the auditors and the audit committee that:

a) There have been no significant changes in internal control over financial reporting during this year.

b) There have been no significant changes in accounting policies during the year.

c) There have been no instances of significant fraud of which we have become aware and the involvement therein, of management or an employee having significant role in the companys internal control system over financial reporting.

S. K. Bhandari V.M.Bhandari Sripad Hanchate
Managing Director Whole-time Director Chief Financial Officer
Place : Raichur
Dated : August 22, 2019