Jain Irrigation Management Discussions


Global Economy

The global economy experienced a turbulent year In 2022. The conflict In Ukraine took everyone by surprise and had profound effects on both human lives and the overall economy. Inflation surged, worsened by the disrupted supply chains caused by the COVID-19 fallout and further deteriorated with prolonged Ukraine war. This led to all major economies in the World increasing policy rates simultaneously, tightening monetary policies in emerging economies and creating forex reserve challenges. As a result, business conditions were impacted across the globe.

Looking ahead to 2023, uncertainties continue to test global growth conditions. Headline inflation remains high, surpassing the comfort zone of monetary authorities, leading to ongoing uncertainties in financial markets and impacting economic conditions. The recent turmoil in the banking sector in the US and Europe demonstrated the interconnectedness of these factors. While the turmoil seems contained for now, risk indicators remain concerning.

Multilateral agencies have cautioned about a global growth slowdown, with geopolitical tensions adding another layer of ambiguity to existing uncertainties. The global economy is projected to witness a modest increase. Businesses worldwide must remain vigilant, adaptable, and build resiliency in their models to ensure sustained performance in evolving conditions.

Indian Economy

Amidst these challenges, the Indian economy is expected to provide stability and ongoing growth momentum. Although influenced by global developments, domestic anchors are in place to drive the economy forward.

The Indian economy also faced challenges in 2022. After a strong rebound in the previous year, the year marked a period of normalisation with gradually moderating but still robust demand in many sectors. Global risk aversion, driven by rapid rate increases in developed economies, put pressure on the exchange rate and negatively affected import-dependent businesses. In India, the Reserve Bank of India (RBI) implemented effective monetary measures to contain inflationary pressures by increasing policy rates, outperforming many other central banks worldwide. Despite the global deceleration and recessionary expectations, the Indian economy displayed resilience supported by strong domestic consumption and government investment in infrastructure.

The Economic Survey for FY23 provided a comprehensive assessment of the Indian economy for 2023 and the outlook for the ensuing year. The survey has also examined certain pertinent aspects and ideas for the countrys economic development. Some of the key highlights of the Economic Survey are as follows:

The survey expects the Indian economy to grow at 6.5% in FY24 gaining support from robust domestic demand and a pick-up in capital investment. However, with plateauing of export growth and cooling of pent- up demand, focus on capex growth will be crucial to support growth and employment in the economy.

Further, government measures such as PM GatiShakti, National Logistics Policy and PLI schemes to boost manufacturing output will help in unleashing animal spirits in the economy. Downside risks to growth exist owing to the prolonged monetary tightening cycle, elevated commodity prices plateauing export growth, depreciating rupee and its unfavourable impact on the current account balance.

As per the survey, Indias potential GDP could rise to 7-8% per annum in the medium term. Growth will be supported by a sound financial system, digitalisation reforms, formalisation and geopolitical opportunities. However, there is a need for further reforms in the areas of the power sector, education and skilling, climate change and improving the Ease of Doing Business through measures like simplification of compliances and support for the MSME segment.

Resilient domestic demand is expected to drive industrial output going ahead. Improving capacity utilisation and robust credit growth in the industry point to bright prospects of capex investments by companies.

Production-linked incentive (PLI) scheme to play a catalyst in boosting exports. Introduction of the Emergency Credit Linked Guarantee Scheme (ECLGS) has played a catalyst in increasing credit to MSMEs. Easing input cost pressures due to moderation in international commodity prices is expected to bode well for company margins.

The survey highlights that crude oil prices (the main driver of inflation this year) and other commodity prices have moderated. As a result, both CPI and WPI inflation are on a declining trend. The inflationary pressures are expected to ease in FY24 from the levels seen during this year.

Initiatives such as CoWIN, e-RUPI, TReDS, Account Aggregators, Open Network for Digital Commerce

(ONDC) are expected to tap into Indias digital public infrastructure space. As per the survey, robust and growing public digital infrastructure can add around 3050 basis points to Indias potential GDP growth rate.

In midst of concerns around the global economy, the survey highlights that the external situation is manageable given Indias high forex reserves and low external debt. Given the volatile and uncertain global environment, there is a need to remain cautious on the external sector. Recently, India has been upgraded from equal weight to over weight in global ratings.

Industry Overview Agriculture & Irrigation

Agriculture, involving around 54.6% of Indias total workforce and contributing 17.8% to the countrys GVA, is pivotal to Indias economy. However, conventional farming methods have led to limited efficiency and productivity growth. Therefore, the Indian government has initiated the fourth agricultural revolution, known as Agriculture 4.0. This advanced approach is a refined version of precision farming, aiming to enhance yield quality and quantity while minimising environmental damage. According to Bain & Co., the Indian agricultural sector is predicted to increase to US$ 30-35 billion by 2025.

With the help of technology and government initiatives, this new approach offers a promising growth trajectory for Indian agriculture. Agriculture 4.0 includes cloud-based solutions and other cutting-edge management techniques to increase farming efficiency.

The governments policy initiatives for agricultural digitalization include the Jal Jeevan Mission, PM Kisan Yojana, Agriculture Infrastructure Fund, PM Fasal Bima Yojana, Mission for Integrated Development of Horticulture, National Agriculture Market (e-NAM) Scheme, Organic Farming under the Paramparagat Krishi Vikas Yojana

(PKVY), Rashtriya Krishi Vikas Yojna (RKVY), and the Atmanirbhar Clean Plant Program. These initiatives are designed to boost productivity, supplement farmers financial needs, support post-harvest activities, provide insurance, and promote online transparent trading and organic farming. Under Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)-Per Drop More Crop, an area of 32.697 lakh hectare (ha) has been covered under micro irrigation in the country

In the Budget 2023-24, the Indian government announced following key initiatives for the agricultural sector:

Digital Public Infrastructure for Agriculture: This open-source, interoperable public good will offer farmer-centric solutions through improved access to information, inputs, credit, and insurance, supporting crop planning and the growth of agri-tech industry.

Agriculture Accelerator Fund: Aimed at encouraging agri-start-ups by young entrepreneurs in rural areas, this fund will introduce innovative solutions to farming challenges and boost modern technologies to improve productivity.

Atmanirbhar Horticulture Clean Plant Program: With an outlay of Rs. 2,200 crores, this initiative will ensure the availability of disease-free, quality planting material for high-value horticultural crops.

Agriculture Credit: The target for agricultural credit will be raised to Rs. 20 lakh crore, focusing on animal husbandry, dairy, and fisheries.

Centres of Excellence for Artificial Intelligence: Three centres will be set up in top educational institutions, in partnership with leading industry players, to foster interdisciplinary research and application development in agriculture, health, and sustainable cities, thereby building an effective AI ecosystem. Agricultureal growth rates is an important factor which may impact our Company.

Water Supply and Management

Water scarcity is a global issue affecting millions of lives, food security, health, and the environment. Under Sustainable Development Goal (SDG) 6, all nations aim to provide Clean water and sanitation for everyone by 2030.

India, with 18% of the worlds population but only 4% of water resources, faces high to extreme water stress. This problem is likely to be exacerbated by climate change and erratic monsoons. To address this issue, the Indian government established the Ministry of Jal Shakti in 2019 to handle water resource management.

Under this ministry, the Jal Jeevan Mission was launched with the aim to provide piped water supply to every household by 2024. The mission, backed by USD 65.6 billion in public funding, focuses on establishing community-managed, demand-driven water supply systems. Additionally, Rs. 15,000 crore will be allocated over the next three years for the Pradhan Mantri Particularly Vulnerable Tribal Groups Development Mission under the Development Action Plan for the Scheduled Tribes, which includes clean drinking water provision.

Overview of the Business:

Jain Irrigation is a diverse group, specialising in areas such as Micro and Sprinkler Irrigation Systems, Precision Farming, Tissue Culture, Plumbing Systems, Drinking Water Solutions, and Renewable Energy, among others. Its business spans four verticals: Hi-Tech Agriculture, Plastics, Agro Processing, and Others (including solar systems & products).

The parent company, Jain Irrigation Systems Limited (JISL), along with its global subsidiaries, generated revenues of Rs. 57.47 billion as of March 31, 2023. As a leader in Indias Micro and Sprinkler Irrigation systems and the second- largest globally, JISL operates across the agricultural value chain.

JISLs main businesses are Hi-Tech Agri and Plastics, with Food business operations through its subsidiary, Jain Farm Fresh Foods Limited, and its subsidiaries in the UK, USA, Dubai, Ireland, and Turkey.

The company is Indias largest polyethylene pipe producer, amongst the top three PVC pipe producers, and the worlds largest tissue culture banana and pomegranate plant producer. JISL produces more than 100 million banana plants each year. Additionally, JISL is the worlds second-largest dehydrated onion producer and the largest producer of mango pulp, puree, and concentrate in India. It also works with hybrid and grafted plants, biofertilizers, biogas, renewable energy sources, and more. All of its manufacturing plants comply with international FDA regulations and are ISO 50,000 & HACCP certified. JISL offers integrated agricultural solutions, such as crop rotation and selection for watersheds or wastelands. Its products aim to conserve natural resources and promote sustainable agricultural growth, ultimately aiming to double farm income.

Year 2023 was a watershed milestone year in the history of the JISL for many reasons. The Company successfully implemented Resolution Plan (RP) in record time of one year and became Standard Account on 31st March 2023. The Company got investment grade ratings from CRISIL and ICRA. The Company successfully concluded a cash and stock merger deal with Rivulis Pte Ltd. by retaining 18.7% stake in the merged entity in March, 23. This deal helped the Company to deleverage its consolidated balance sheet by $200 mn and cancelling $300 mn corporate guarantee given to the overseas Bond holders, thereby reducing interest outgo by INR 2,000 mn in FY23 and reduction of overall debt by INR 2.8 bn at consolidated level. The Company saw secular growth across all its business segments during FY23 with better margins, cash flow, improvement in working capital cycle, higher capacity utilisation and order book. This helped the Company to meet its financial obligations towards financial institutions and banks in a timely manner without any additional working capital support during the year. The company also saw almost 35% in top line revenue growth with improvement in margin which is also indicative of getting back the market share and improvement in quality of business.

Growth Drivers and Strategy

At the forefront, our aim is to leverage strengths and focus on expanding our business operations by utilising our capabilities in product innovation, R&D, manufacturing capabilities, solutions to farmers and farm produce through our vast network of dealers and associates worldwide. As we create value along the entire supply chain in the three areas of water, energy, and food security, we want to be the finest company managing water, food, and natural resources. The main components of our present strategy are as follows:

a) Expand the geographic markets and product offerings:

The Companys operations in India and overseas are being expanded geographically. While the company continues to make efforts to increase sales in other regions by extending the reach of its retail distribution network and utilising the current distribution capabilities, historically, MIS product and piping system sales in India have been concentrated primarily in the Western and Southern regions of the country. The company merged its international irrigation business in FY23 with Rivulis by continuing to hold an 18.70% stake in the merged entity. The company will continue to serve adjacent countries like Nepal, Bhutan, Sri Lanka, Bangladesh, Myanmar etc. and it has also secured the right to serve the landscape market world over under funding arrangement from Indian multilateral agencies like EXIM bank. The Company will continue to serve international markets under its plastic business directly and through its international subsidiaries. The Company continues its efforts to capitalise on growth opportunities in the domestic market and take advantage of market prospects for growth and further solidify its market position. It leverages on its R&D capabilities to expand and diversify the use of its MIS products in India, including its use for wheat and rice in addition to commercial cash crops including sugarcane, cotton, vegetables, and fruits. This provides the company with a substantial opportunity for horizontal expansion to boost sales of its MIS and Pipe products.

b) Continue to focus on Agri Solution Approach: The Company has positioned itself as end to end solution provider and One Stop Shop for irrigation, water conservation, water management and food security. The Company follows a solution based approach with thorough analysis about cultivation area, seasonality of a crop, weather conditions, farmers need and application of the Company products to provide sustainable solutions for higher yield from farm land, disease free quality output and higher realisations for farmers. The Company has put in significant efforts in developing new varieties for Banana, Pomegranate, Sweet Oranges, Onions, Papaya, Potato and others through its in-house R&D centres under Jain Tissue Culture, Jain Seeding, Jain Seeds, Jain Hi Tech Factories and Jain Graftling. The Company also provides comprehensive solutions for Green houses and Poly houses as a part of Hi Tech Agri business.

c) Focus on Retail Sales and Cash & Carry business model:

The Company is focussed on deleveraging its Balance Sheet by improving overall working capital cycle. in these efforts the Company reduced its DSO from 314 days in FY22 to 250 days in FY23 on Standalone Basis and from 185 days in FY22 to 176 days in FY23 on Consolidated basis. By assessing the benefits and feasibility of using various funding sources, the company aims to optimise its capital structure. Additionally, the company plans to continue focusing on its cash and carry model for MIS product sales to its dealers, which has decreased the gross credit days for MIS product sales over the past few years. Company continues to adopt these measures to increase its free cash flow, enabling it to better pursue the development of the business even though currently there is a challenging situation on Government project related receivables, which is temporary in nature. As a strategic decision, the Company has not participated in any EPC project for the past 2 years. The Company continues to focus on the cash & carry model for supply of pipes and piping material to other EPC companies. The Company has over 3500 dealers in the state of Maharashtra, Gujarat, Tamil Nadu, AP Telangana, Rajasthan. The Company is focussing on developing its network in Rajasthan, Punjab, North East, UP, Bengal.

d) Resolution Plan updates of Company: JISL successfully implemented resolution plan in March 2022 and within a period of one year, the Company obtained investment grade rating from CRISIL and ICRA as on March 31, 2023. The Company has repaid long term debt Rs. 1,839 million during the year and overall reduction in debt by Rs. 7,170 mn (including NCD/ECB2 redemption of Rs. 4,460 mn) up to April 2023. Consolidated debt was also reduced by Rs. 24.30 Bn at Rs. 35.8 billion as of March 31, 2023 as compared to Rs. 60.1 billion as of March 31, 2022 on account of repayment of bond and International Irrigation Business debt.

Competitive Strengths

The following, in our opinion, are our key competitive advantages.

a) Strong Brand and Leadership in India: Being a leading manufacturer of micro irrigation systems, piping systems, and agro-processed products in India, weve built a large dealership and distribution network throughout the country. Known brands like Jain Drip, Jain Sprinklers, Jain Pipes, Chapin, and Jain Farm Fresh are popular domestically and globally. Our deep collaboration with farmers, state governments, and international organisations helps us innovate and educate, maintaining our leadership position.

b) Experienced Leadership: Our seasoned management teams deep understanding of global agricultural markets over five decades allows us to diversify our offerings and expand globally. With over 1,000 skilled professionals, we provide unparalleled after-sales support and training, differentiating us from competitors.

c) Global Reach: Companys entire product range meets international standards. The Company is able to make direct export and through its subsidiary for micro irrigation solutions and its plastic products division.

d) Integrated Agri-Value Chain Solutions: Our holistic approach to the agricultural value chain helps us diversify our offerings and foster strong relationships with farmers. We provide biotech tissue culture plantlets, solar pumps, irrigation systems, and a host of turnkey services, including agronomic and technical support. Our traceability offers sustainable solutions in compliance with international food safety norms.

e) Robust R&D and IP: We leverage technology for operational efficiency, strict quality control, and product innovation. Our focus on R&D enables us to develop new products and enhance existing processes, ensuring customer satisfaction and retention. The Company has largest number of offerings in MIS and SIS, Pipe and Pipe fittings.

f) Exceptional Product Quality: Our stringent quality management program ensures defect minimization and efficient manufacturing processes. Our commitment to "Jain Good Agricultural Practices (JAINGAP)" promotes traceability, environmental protection, and food safety, reinforcing customer trust.

Overview - Food Business

JISL s entry into the food processing business dates to the late 1970s when the Company acquired a banana powder plant in Jalgaon and converted it to make ultra refined, world class quality enzymes called Papain from Papaya fruit and sold to nutraceutical and pharmaceutical sectors in Europe and Americas. The food business of JISL has gone from strength to strength during the last three decades. Now this business is operating under subsidiary Jain Farm Fresh Foods, Limited (JFFFL) and consists of operations in India, Turkey, Belgium, UK, and the USA.

JFFFL now employs all known and key food processing technologies in its operations, namely dehydration, pulping, freezing, fresh and mix of some of these technologies. Product range includes tropical fruit pulps and purees, concentrates, clarified juices, dehydrated onion, dehydrated garlic, Indian spices like Chili, turmeric, ginger, cumin, coriander, Mediterranean herbs and spices via our Turkey facility, supply of industrial dry food ingredients, mixes via our Belgium and UK subsidiaries, frozen fruits, frozen vegetables via our USA operation, fresh fruits, value add seasoning, mixes, blends, retail products for India markets, private label and co-manufacturing operations through our operations for optimum capacity utilization, etc.

Following is an overview of JFFFLs key businesses and how these stand-alone businesses form a common theme and group themselves with shared purpose of leadership in high impact value proposition in supply of industrial food ingredients to key sectors of food value chain in food manufacturing, food service / institutional sale, private label, co-manufacturing, generic retail, branded retail, etc.

INDIA:

JFFFL India business consists of two business units:

Fruit puree, Concentrates, Clarified juices and IQF division (Fruit Division)

Dehydrated Ingredients Division consisting of main products like dehydrated onion, garlic and spices of Indian origin (DHO Division)

The Company has marquee customers like Hindustan Coca Cola, Nestle, Unilever etc. JFFFL India plays a vital role in supply of ingredients via its international subsidiaries in the UK, USA and Turkey. During the year under review, JFFFL India showed overall a strong performance in both revenue and profitability year on year basis. Due to many external challenges, JFFFL India fell short of showing even stronger performance however management of the Company feels that under the challangingcircumstances, double digit growth is overall a good result.

The Companys Fruit Division showed significantly improved performance in terms of revenue and healthy profitability. Strong growth in revenue was observed in domestic sales. The export order book was strong, but the Company faced some volume allocations challenge due to adverse mango crop (very short season) and the Company held back on volumes for export markets of Europe, Asia Pacific and North America.

The Companys DHO Division also showed growth in revenue. Less than ideal situation was observed in production volumes of Dehydrated Onion, Dehydrated Garlic, Indian Spices. Production volumes were tracking around 45-50% in key production months compared to what was anticipated.

OVERSEAS:

JFFFLs overseas operations showed strong performance during the year under review. Overseas operations contributed nearly 60% of JFFFL group revenue. The USA operation showed strong growth in both revenue and margin improvement. Revenues grew by 12%. UK Operations under subsidiary Sleaford Quality Foods showed 17% growth in revenues. Company has good distribution coverage of the British Isles and supplies to all key food manufacturing companies, food service companies and private label markets. Turkey and Belgium operations showed strong resilience in adverse market conditions, especially in Turkey due to currency issues. Companies continued to show year-on- year improvement in revenue, profitability, and working capital management.

Growth Drivers and Strategy

JFFFL s India operations are on a turnaround journey after COVID disruptions and other challenges. Companys strategic direction is heavily focused on first reaching the Pre-Covid levels of operations in revenue, margins, capacity utilizations and working capital management. The Company enjoys very strong customer relationships despite many supply challenges we faced in our supply chain to our customers. Company has unmatched farmer relations in India due to farmer relation strength of parent Company Jain Irrigation Systems Limited. Company is focused on leveraging the parent Companys strengths and fill a yawning gap that exists in food markets with respect to traceability, sustainability and subsequently food safety. It is safe to say that our customer base has remained loyal to us due to our strengths in backward integration, contract farming, supply chain traceability, world class processing facilities and customer service. Food value chain looks for an undisrupted supply chain and our capacities put us on an unparalleled platform. Focus is to reach pre-covid capacity utilisation levels and then go beyond.

The Company is also looking to grow in adjacent categories. To expand its processed fruit products basket, the Company is commencing the manufacture of processed citrus pulps and concentrates. Additionally, the Company has grown the spice basket of processed spices made from turmeric, chili, pepper, garlic, coriander, ginger, etc. to cater to B2B and retail markets in India and overseas. Our downsized retail operations in India during COVID are regaining traction, especially new brands in healthy fruit snacks under an in-house brand named "FRUSH". The Company uses its own processed fruit pulps as raw materials for production of this healthy snack. The Companys retail spices under the "Valley Spice" Brand are also gaining popularity. These natural food products are prepared without any preservatives, artificial flavours and aimed to provide a healthy nutrition to our customers.

Overseas operations are also continuously evolving their strategic approach to markets. Businesses are adapting well to changing market conditions, adding new markets, and new origins in the supply chain. Parent Companys supplies form about 20% of overseas sourcing. Rest comes from various other origins, suppliers. Operations continue to look for efficiencies in those supply chains regularly.

Competitive Strengths

JFFFL s competitive strengths include:

a) Strong backward linkage and contract farming: One of the few companies in the marketplace in any sector - that has fully integrated supply chain, farming base due to strong parent JISLs farmer reach. Sustainability story of the Company is used as an industry benchmark by many to emulate.

b) Experienced Management: One of the key strengths is highly experienced management and management team helping the Company to source the agricultural produce at right time at competitive prices, quality and quantum

c) Strong Research and Development: The Company, in its early years of food processing business had to face many challenges w.r.t. getting viable varieties of fruits and vegetables for processing. As a result, the Company had to come up with its own varieties. What started as a crisis driven move has now become the Companys strongest attribute and gives the Company an edge over its competition.

d) World class facilities: All the operations of the Company, whether in India or abroad are world class facilities, approved by major customers and hold all necessary quality certifications.

e) International reach of the products: The Company has direct access to the institutional and food service industries in the UK thanks to our subsidiary in the UK, Sleaford, which distributes spices and other blends of food ingredient items. Our agro-processed products have a strong presence in the US and Europe. Unique processes in our Frozen Ingredients division and a direct supply chain to UKs institutional and food service industries through our UK subsidiary, Sleaford, allow us to meet global market demands

Subsidiary Operations

• Indian Subsidiary Companies

DripTech India Pvt. Ltd., India ("DripTech) is owned to the extent of 74% by JPFTIPL and 1% by JISL. The Company focuses on affordable, high quality irrigation systems designed for small-plot farmers which are affordable, high quality and easy to use which will help to increase income from farm land. The Company caters to both domestic and international markets. Revenue of the company has declined by 6.9% from Rs. 144.91 million in FY 2021-22 to Rs. 134.89 million in FY 2022-23 mainly due to volatility in the market for low priced irrigation products.

Overseas Holding Companies:

a) JISL Overseas Ltd., Mauritius ("JISO") is a wholly owned subsidiary of JISL India was incorporated in 1994 under the laws of Mauritius. JISO acts as a holding Company for the UK and USA based overseas subsidiaries. It holds 54.53% in Jain (Europe) Ltd., It has made a net profit of US$ 1,993,478 in FY 2022-23 against net loss of US$ 408,566 in FY 2021-22 on account of profit on sale of discontinued operations.

b) Jain international Trading B.V., ("JITBV") is a wholly owned subsidiary of JISL India incorporated in March 2010 under the laws of The Netherlands. It holds 45.47% in Jain (Europe) Ltd., UK, and 100% in Jain Americas Inc., USA, Jain MENA DMCC, Dubai and Jain Overseas B.V, Netherlands. JITBV had a net profit of US$ 1,317,971 in FY 2022-23 against net profit of US$ 24,485,272 in FY 2021-22.

c) Jain Overseas B.V., The Netherlands ("JOBV") is a wholly owned subsidiary of the Jain International Trading BV, and was incorporated under the laws of The Netherlands. It has been in business since 2007. JOBV has a net loss of US$ 17,562,789 in FY 2022-23 against net loss of US$ 1,446,834 in FY 2021-22 mainly due to business combination on account of discontinued operations.

d) Jain (Israel) B.V., The Netherlands ("JIBV") is a wholly owned subsidiary of the Jain Overseas B.V, The Netherlands was incorporated under the laws of The Netherlands. It has been in business since 2007. JIBV had a net profit of US$ 112,996,910 in FY 202223 against net loss of US$ 4,613,926 in FY 2021-22, primarily on account of profit on sale of discontinued operations.

e) JISL Global BA, Switzerland ("JGSA") is a wholly owned subsidiary of the Jain Overseas B.V., The Netherlands and was incorporated under the laws of Switzerland. It has been a holding company since 2007. JGSA had a net loss of CHF 204,827 in FY 2022-23 against net profit of CHF 5,988,243 in FY 2021-22.

f) JISL Systems SA, Switzerland ("JSSA") is a wholly owned subsidiary of the JISL Global SA., Switzerland and was incorporated under the laws of Switzerland. It has been in business since 2007. JSSA had a net profit of CHF 26,830 in FY 2022-23 against net loss of CHF 312,183 in FY 2021-22.

g) Jain Netherlands Holding, i B.V., The Netherlands ("JNHBV I") is a wholly owned subsidiary of the Jain Overseas B.V., The Netherlands and was incorporated under the laws of The Netherlands in 2020. JNHBV I had a net loss of US$ 6,879 in FY 2022-23 against net loss of US$ 10,605 in FY 2021-22.

h) Jain Netherlands Holding ii B.V., The Netherlands ("JNHBV II") is a wholly owned subsidiary of the Jain Overseas B.V. The Netherlands and was incorporated under the laws of The Netherlands in 2020. JNHBV II had a net loss of US$ 6,715 in FY 2022-23 against net loss of US$ 9,888 in FY 2021-22.

Overseas Sales and Distribution Companies

i) Jain (Europe) Ltd., UK ("JEL") is a wholly owned subsidiary was incorporated in 1996, under English laws. Jain (Europe) Ltd. is our marketing and distribution arm in the UK and other EU countries. The sales of the Company increased by 79.5% from GBP 0.07 million in FY 2021-22 to GBP 0.13 million in FY 2022-23. The increase in sales is due to a re-alignment within the group of sales from the parent Company in India directly to customers in major markets. The Company now operates as largely a holding / financing company for the Plastic business subsidiaries.

j) Jain Americas Inc., USA ("JAI") is a wholly owned subsidiary and was incorporated in August 2022, under the laws of Delaware, USA. It is the key marketing and distribution in the United States for Plastic sheet & Hi- tech agri business. The sales of the Company US$ 0.70 million in FY 2022-23 (for the last two days). Jain America Holdings Inc., USA has carved out its Plastic Business into JAI on March 29, 2023.

k) Jain America Holding Inc., USA ("JAH") is a wholly owned subsidiary of the Company and was incorporated in February 2016, under the laws of Delaware, USA. It is the key marketing, distribution and investment arm in the United States for Plastic sheet & Hi-tech agri business. The sales of the Company have increased by 1.5% from US$ 21.52 million in FY 2021-22 to US$ 21.85 million in FY 2022-23. Jain America Holdings Inc., USA has carved out its Plastic Business into JAI on March 29, 2023 and discounted its other activity.

l) Jain MEN A DMCC, Dubai ("JMENA") is a wholly owned subsidiary of Jain International Trading B.V., Netherlands and was incorporated in 2017, registered in Dubai Multi Commodities Center, Dubai. JMENA is the marketing and distribution arm in Dubai and other neighbouring countries. The sales of the Company have decreased from AED 9.17 million in FY 2021-22 to AED 4.95 million in FY 2022-23 mainly on account of serving the customers /business directly from India.

Operating Overseas Subsidiary Companies

m) Excel Plastics Ltd., Ireland ("EPL") is a company limited by shares and was incorporated in 2013 under the laws of the Republic of Ireland. The Company is engaged in manufacturing Plastic sheets products. EPL is one of the leading manufacturers of the highly technical product PVC Foam Sheets in Europe. The sales of the Company have increased by 10.5% from EUR 24.33 million in FY 2021-22 to EUR 26.87 million in FY 2022-23. After Covid-19 slowdown, the company has strongly turned around and registered a double-digit revenue growth. Excel Plastics Limited is now the leading player in Europe in PVC Foam Sheets especially in the key markets such as Germany, France & UK. Ex-cel Plastics is the strategic supplier to the leading plastic sheet distributors across all the main European countries. Ex-cel Plastics Limited has one of the widest product ranges in the industry. EXCEL Brand is widely recognised as the most preferred brand by digital print companies and in the building industry due to the consistent quality & reliability of supplies. The European market for sign and graphics has been quite challenging due to diverse reasons such as inflation, reduced demand and a cut in sales & advertising budget by major companies. Ex-cel Plastics has managed to stay ahead of competition despite the challenging environment,

n) Northern Ireland Plasties Ltd, ("NIP") is owned 100% through the Jain (Europe) Ltd,, UK, The Company is engaged in manufacture and distribution of Polypropylene (PP) twin-walled plastic sheets under the well-known brand name CORRIBOARD. Company was acquired to expand the product range, extend the presence at key European distributors, expand the markets for plastic products and provide a plastic manufacturing base in the United Kingdom to service that market, Company is one of the largest manufacturers of Polypropylene Twin Wall Sheets in Europe, and has an excellent reputation for product quality and service, Company also employs the latest extrusion technology at its plant in Northern Ireland, and complements our existing plastic sheet operations in the Republic of Ireland, The company services three main industries - Sign & Graphics, Packaging & Building Construction, With the increase in online sales of products, the Company is focussing on the Packaging sector, The sales of the company have increased by 4,1% from GBP 13,65 million in FY 2021-22 to GBP 14,21 million in FY 2022-23, Northern Ireland Plastics continues to service mainly the UK market in all the key areas of Sign & Graphics, Packaging sector and in Building Construction, CORRIBOARD continues to be the most preferred brand in its sector,

• Indian Subsidiary Companies (Food Business)

o) Jain Farm Fresh Foods Ltd,, India ("JFFFL") Company incorporated in April-2015, The Standalone revenue of the Company has increased from 13,4% on yoy basis to Rs. 6,603,06 million in FY 2022-23 as against Rs. 5,822,74 million during the FY 2021-22, The Company also had better margins on account of better realization in spite of higher raw material prices,

p) Jain Processed Foods Trading & Investments Pvt, Ltd,, India ("JPFTIPL") is a wholly owned subsidiary of the Company, JPFTIPL holds 74% of Driptech India Pvt Ltd, & 7,16 % in JFFFL,

Overseas Sales and Distribution Companies

q) Jain International Foods Ltd,, UK ("JIFL") is a wholly owned subsidiary of the Jain Farm Fresh Foods Ltd,, India ("JFFFL) and incorporated under English laws, The sales of the Company declined in FY2021-22 by 17,1% on yoy basis, In FY 2021-22 GBP 20,71 million and in FY 2022-23 GBP 17,17 million, JIFLs trading business primarily involves servicing customers on behalf of its parent company i,e, Jain Farm Fresh Foods Limited by providing local logistics and sales support, The companys performance is dependent upon volume allocation from the parent company in the markets and customers that JIFL looks after, During the year under review, while the parent companys standalone performance showed growth in revenue year on year basis, JIFL revenue declined due to supply chain disruption and lesser allocation of volumes by the parent company,

r) Jain America Foods Inc,, USA ("JAF") is a wholly owned subsidiary and was incorporated in 1998, under the laws of Ohio, USA, It is the sales, distribution and investment arm in the United States for the food business, The sales of the Company decreased from US$ 1,73 million in FY 2021-22 to US$ 1,53 million in FY 2022-23, Company is a sales and distribution arm for food business and servicing North America SPV markets,

Operating Overseas Subsidiary Companies

s) Sleaford Quality Foods Ltd,, UK ("SQF") is based in Sleaford town in Lincolnshire County in the East Midlands region of England, Primary nature of its business is blending, repacking, trading & distribution of food ingredients, The sales of the Company increased by 23,1% from GBP 43,18 million in FY 2021-22 to GBP 53.15 million in FY 2022-23. After difficult years during COVID pandemic when the companys institutional sales and food service business declined quite considerably, the company has been able to raise its performance and show considerably improved results, The company continues to enjoy a strong order book and excellent customer relations, Some challenges remain on the supply side but the company is managing these challenges well,

t) Jain Farm Fresh Foods, Inc ("JFFFI, USA") is a wholly owned subsidiary through Jain America Foods Inc,, USA, JFFFI, USA is engaged in the frozen vegetables and frozen foods business, The sales have increased by 4,1% from US$ 38,50 million in FY 2021-22 to US$ 40,09 million in FY 2022-23, The company showed moderate growth in revenue, however stronger growth in profitability. The company faced some seasonal capacity issues on certain key products during the year and adverse weather, unprecedented heavy rains and flooding in key production months of Q4 FY23 also negatively impacted the performance during those months, Company enjoys strong customer relations due to high quality products it offers to customers, Company also has strong order book,

u) Jain Farm Fresh Holdings SPRL, Belgium ("JFFH") is a wholly owned subsidiary and incorporated in 2018 under the laws of Belgium, JFFH has acquired 100% stake in Innova foods N,V. Belgium, Innova food is a leading importer, stockist and distributor of food ingredients and has become one of the leading players in the dehydrated vegetables, spices and other food ingredients in Belgium, Netherlands, France and other neighbouring countries, Consolidated sales of the JFFH including Innova food for FY 2021-22 were EUR 22,86 million and FY 2022-23 is EUR 21.45 million. The company significantly depends on supplies from parent company JFFFL, India and during the year under review, the company faced some supply challenges on certain spices,

v) Jain Farm Fresh Gida Sanayi Ve Tiearet Anonim Sirketi, Turkey ("JFFG") is a subsidiary and incorporated in 2019 under the laws of Turkey, JFFG is a leading processor, importer, stockist and distributor of food ingredients, especially Mediterranean herbs and spices, The sales of the Company were US$ 11,65 million in the year 2021-22 and US$ 10,86 million in 2022-23, The company is the youngest company in the JFFFL food group, During the year under review, the company saw delayed volumes offtake from one of the key customers and as a result showed less revenue year-on-year. Significant part of company revenues come from another group company SQF in the UK and the company ensured steady supplies to SQF Company is operating in economically volatile environment of very high inflation and interest rates but the company is managing these risks well,

A) Hi Tech Agri Input Products Division

The company manufactures Drip Irrigation Systems, Sprinkler Irrigation Systems, Integrated Irrigation Solutions and Biotech Tissue Culture, With in-house technological capabilities, the products are innovative, efficient, long-life and designed in a way that ensures maximum water savings, good harvest every year and ease of installation, We are a one stop shop for all Agricultural inputs needs, Additionally, our Hi-tech enabled systems are not only environment friendly but also focuses on optimising labour and fertiliser costs,

Industry:

1) Micro Irrigation Systems

Annual Market Size in India of the Fertilisers, Pesticides, Seeds (USD 6 billion), Plastic Pipes (USD 5 billion) and Drip/Sprinkler Systems in India (USD 0,7billion) totalling to USD 11,7 billion,

The present market share of JISL in the above market is around USD 0,5 billion i,e, 4,2% of the total market, The market size is expected to reach USD 20 billion by 2030 and we target to have almost 5% i,e, USD 1 billion market share,

The rising food demand because of the increasing population, coupled with the decreasing arable lands due to industrialization and urbanizations, has prompted the need for effective water management and irrigation techniques, Micro-irrigation technologies are one of the most effective systems used by farmers in many economies to reduce water wastage, The increasing awareness of MIS among farmers has led to a transitional shift from flood irrigation towards microsprinkler systems, Moreover, low labour costs associated with such automated and advanced irrigation systems is gaining market growth across countries where agrilabour cost is high,

In India, the micro-irrigation systems market is consolidated, with the top five companies accounting for more than 60% of the market share, With the presence of many players across several states, makes the MIS industry very competitive, Central and State Governments play critical role since large of part of MIS business is linked with 45%-55% subsidy with additional extra subsidy as per the scheme to small and marginal farmers with service support for 3 years, The Government is working hard to improve water use efficiency at the farm level through the adoption of micro irrigation across the country, and so far, 137,80 lakh hectares have been covered by micro irrigation, It also plays a prime role in aiding farmers for installing MIS by providing subsidies, In India in 2022-23, out of total 140 million hectares of sown area, the net irrigated area was 68 million hectares (48,80%) while 71,74 million hectares (51,20%) were non-irrigated, The area under micro irrigation was only 12,90 million hectares, which was about 19% to the net irrigated area, Out of the total irrigated area in the country, 40% is currently watered through canal networks, while 60% through groundwater so there is a long way to go for micro-irrigation in India,

JISL has also been exporting various components of Micro Irrigation System/ Sprinkler Irrigation Systems to countries in Europe, America, Africa, South East, Middle East and Far East Asia,

Operational Performance

Revenue from domestic sales of Micro Irrigation Systems has increased by 28,70% in FY 2023 to Rs.18,040 million from Rs. 14,022 million in FY 2022 mainly due to increase in Retail Sales, Export of MIS has increased by 4,5 % to Rs. 2,055 million in FY 2023 from Rs. 1,967 million in FY 2022, mainly due to increase in retail sales,

Risks & Challenges

Micro-irrigation systems, despite their benefits, face challenges like energy requirements, limited awareness, affordability, and declining landholdings and farm income in India, The over-reliance on monsoons and depleting groundwater levels, alongside cash flow issues in the manufacturing sector due to state government delays, compound these issues,

Faulty irrigation systems causing water waste and the absence of financial aid for system part replacements add to the farmers financial burdens. The loan waiver scheme has inadvertently curbed rural spending, impeding farmers ability to purchase new irrigation equipment. Moreover, diminished demand for microirrigation products, due to drought conditions during the latter half of the monsoon season, affects the market during the Rabi season. These factors call for comprehensive and forward-thinking solutions to fully leverage the potential of micro-irrigation.

Opportunities & Outlook

JISLs high-quality Micro-Irrigation systems, made with cutting-edge technology and virgin raw materials, bring even challenging terrains into productive cultivation, enhancing crop yields and providing faster ROI. Looking ahead, the governments agricultural fund intends to facilitate the expansion of micro-irrigation, by encouraging innovative projects and offering incentives beyond the Rashtriya Krishi Vikas Yojanas (RKVY) Per Drop More Crop (PDMC) component.

The future of micro-irrigation looks promising in India. With growing emphasis on efficient water use, low- cost irrigation techniques, and Al utilization, the Micro Irrigation Systems Market is set for significant growth. As governments push for water conservation and its management through micro-irrigation systems, the market is projected to experience double-digit growth. The motto per drop more crop underscores the potential of advanced and efficient irrigation technologies in shaping the future of agriculture.

2) Biotech Tissue Culture

The global plant tissue culture industry is estimated to be about $400 million at present and expected to cross $895 million by 2030. In India there are more than 78 tissue culture laboratories producing about 200 million plants. Among the plants produced, ornamental plants have a good share but banana is the single largest crop produced by tissue culture units. Other major commercial cash crops in tissue culture include pomegranate and strawberry. Future of this industry is bright as tissue cultured planting material is able to add a major multiplier factor in crop productivity.

Banana is the single largest plant propagated by tissue culture in India and till date <20% crop is under improved planting material and rest of the crop is raised from conventional planting material. Jain Irrigation has been one of the major suppliers of tissue culture banana plants and has more than 50% share in the market due to its quality plants. Quality Jain banana plants and Jain Precision production technology is able to increase productivity by 3-6 fold. Banana plants need to be replaced every year or every alternate year thus it is a recurring demand besides new areas are also brought under cultivation.

Pomegranate is another major crop in tissue cultured plants and JlSL has more than 70% share and the first choice of the farmers. Pomegranate is one of the high return crops to the farmers thus the area under pomegranate has been growing year to year and it is being introduced in a new cultivation pockets. Pomegranate plants are replaced every 10-12 years creating a long cycle business. The Company through its inhouse R&D has effectively reduced the crop cycle for Banana from 15-18 months to 9-10 months making it possible for the farmers to have higher yield without any impact of deceases with short crop cycle. The Company produce 100 million Banana plants and planning to increase the capacity to 120 million in current year so Banana Tissue Culture is on industrial scale which is a very rear phenomenon in the world.

Potatoes are one of the important vegetable and industrial crops in which the production is greatly influenced by high quality seed. The high-quality seed in potato is initiated with tissue culture and multiplied to various stages involving new technologies like aeroponics, net house cultivation and seed plot technique. JlSL has taken a bold step in development and production of potato seed. The company has developed technology to grow potato in air without soil as Air Aloo

In planting material JlSL has made a strategic position in sweet orange and mango by developing innovative hi- tech nursery production systems to provide high quality plants. Jain Irrigation has been working on many other projects to bring high quality planting material. We will be able to release planting material of new crops like coffee, guava, ginger, turmeric, papaya, onion and other potential crops in future.

Operational Performance:

The Business contributed about 4.9% to the Companys corporate turnover. The Tissue Culture Revenue has increased by 5.6% in FY 2023 to Rs. 1,766 million from Rs. 1,672 million in FY 2022. The major benefit of this business it acts as a pull effect for MIS/SIS business so this business support and enhance the overall value proposition of the Companys offerings.

Risks & Challenges:

The primary challenges in tissue culture applications, including seasonal plant demand, extended propagation cycles, skilled labour needs, and high unit costs, hinder accurate planning of manufacturing schedules and planting material demand, primarily due to precipitation uncertainty. To address these, the tissue culture industry is exploring cost-reduction strategies like automation. The development of cost-effective, automated systems for mass propagation and efficient robotic transplant manufacturing techniques are becoming increasingly vital.

Opportunity & Outlook:

Tissue culture has already played a significant role in enhancing germplasm variety, improving plant health, and boosting genetic diversity, crucial for crop improvement. It has successfully integrated specific traits through gene transfer, and large-scale micropropagation laboratories have provided millions of plants for diverse markets. Looking forward, tissue cultures impact on crop improvement is set to increase, with the ability to produce commercially valuable variants and improved varieties through soma clonal and gametoclonal variations, cell line selection, and protoplast fusion. This technology will continue to yield disease-free, high-quality plants, true to their type.

Jains Hi-Tech nursery, accredited by NHB for premium planting material manufacturing, is poised to expand its offering of agroforestry, ornamental, medicinal, and fruit and vegetable crops. With a commitment to higher yields and improved quality, this technology is set to play a pivotal role in the future of agriculture.

B)Plastic Products

Revenue from the domestic Plastic Products division has increased by 48.1% in FY 2023 to Rs. 12,480 million from Rs. 8,426 million in FY 2022. The revenue from export of Plastic division has decreased by 19.9% in FY 2023 to Rs. 1,472 million from Rs. 1,838 million in FY 2022. The company manufactures and offers PVC Pipes & Fittings, plumbing systems, PE Piping and PVC sheets.

a) PVC Piping

Industry:

Polyvinyl chloride (PVC) pipes and fittings manufacturers are set to sustain their momentum with a 13-15% on-year volume growth next fiscal, driven by higher budgetary allocation for government schemes in water supply, irrigation, housing, and infrastructure. One of the major advantages of plastic pipes is their affordability. PVC water pipes are one of the most popular and affordable options in the market. The PVC water pipe price in India is significantly lower than that of traditional materials like steel and concrete, making it a preferred choice for many consumers.

CPVC pipe manufacturers in India have also seen a significant increase in demand for their products. CPVC pipes are commonly used for hot and cold water supply, as they are highly resistant to heat and corrosion. The CPVC pipe fittings price list in India varies depending on the manufacturer and the type of fitting required. Nahani trap is another important component of the plastic pipe industry in India. It is a type of pipe fitting that is used to prevent foul odor and gases from entering the house or building through the drain pipes. Nahani traps are commonly made from plastic and are highly durable and long-lasting.

The future of the plastic pipe industry in India looks promising. The demand for cost-effective and efficient water infrastructure is expected to drive the growth of the industry in the coming years. With increasing investments in infrastructure development, industrialization, and water conservation efforts, the demand for plastic pipes is expected to increase significantly. This is expected to lead to further advancements in the technology and manufacturing processes used in the production of plastic pipes, resulting in higher quality products and lower prices.

Operational Performance:

During FY 2023, this division contributed about 21.6% to the Companys turnover. The revenue from PVC has increased by 26.1% to Rs. 7,789 million in FY 2023 from Rs. 6,178 million in FY 2022. The revenue from the domestic market for PVC Pipe has increased by 28.3% in FY 2023 to Rs. 7,411 million from Rs. 5,774 million in FY 2022.

Risks & Challenges:

Availability of the substitutes of PVC pipes such as steel, high-density polyethylene (HDPE) and cross-linked polyethylene (PEX) pose a major threat to the profitability of the PVC pipes manufacturers, in turn, deterring the market growth. The plastics pipe industry has a great deal of dependence on labor intensive machinery which has impacted productivity. Moreover, erratic power and high energy prices in the country as compared to other nations are significant obstacles that influence capacity utilisation levels. Depending on the diameter, piping materials are transported individually or in bundles. Utmost care is required while transporting and handling these pipes to avoid any damages. It has been challenging for the industry to uphold high standards for its products.

Opportunity & Outlook:

As awareness of plastic pipe durability and BIS standards grows, residential consumers and farmers are increasingly choosing high-quality pipes to reduce water waste. The affordability, superior quality, and durability of PVC pipes have made them popular. Given the robust government objectives, significant international projects, and replacement demand in the overseas market, the Company is well-positioned to tap into the burgeoning pipe market. To compete effectively in this expanding industry, the Company relies on stringent quality controls, adherence to international standards, and technological advancements.

Government initiatives focused on housing and agriculture are the primary demand drivers for the Indian pipe industry. Government projects like the Jal Jeevan Mission, Pradhan Mantri Awas Yojana (Housing for All), AMRUT, Swatch Bharat Abhiyan, Sanitation & Affordable Houses for All, and the Development of 100 Smart Cities are major catalysts for the growth of the PVC pipe industry in India.

Looking ahead, market consolidation, stability in higher PVC prices, and opportunities in the infrastructure pipe segment are expected to drive growth. This is further fueled by the governments strong emphasis on infrastructure in the budget and the resumption of full- scale construction and development activities.

b) PE Piping

Industry:

The global High Density Polyethylene pipes (HDPE) market is projected to reach $26,518 million by 2025, growing at a CAGR of 5% from 2018 to 2025. The growth in demand from water irrigation systems in the agricultural industry is expected to drive the growth of the PE pipe market. The expansion of government infrastructure investment, rising home and business building, industrial output, irrigation sector, and the replacement of deteriorating conventional metal pipelines are the main growth drivers for this market. Rapid urbanization is anticipated to increase the demand for water supply, leading to an increase in the requirement of PE pipes. Furthermore, growth in sewage disposal infrastructure fuels the demand for PE pipes.

Operational Performance:

This business contributed about 14.9% to the Companys corporate turnover. The revenue from PE Piping has increased by 65.9% to Rs. 5,398 million in FY 2023 from Rs. 3,254 million in FY 2022. The revenue from domestic PE Piping has increased by 98.4% in FY 2023 to Rs. 4,947 million from Rs. 2,493 million in FY 2022.

Markets:

Risk and Challenges:

Delays in project execution continue to be the main risk for the company. The consumer faces major difficulties since they dont comprehend the standards for quality. Even though HDPE pipes can withstand the majority of chemicals and solvents, they are frequently combustible and susceptible to stress cracking. As a result, producers of HDPE pipes should increase their production capabilities in state-of-the-art pipes that adhere to extremely strict quality and manufacturing standards. The conversion of HDPE from steel or concrete still becomes challenging owing to unwillingness to adapt the existing standards at technical levels. We are now witnessing the movement in mindset on a large scale, which is in fact a great indicator for the industry.

Opportunity and Outlook:

The Indian HDPE (High-Density Polyethylene) Pipes Market is on an upward trend, predicted to reach $233.5 million by 2026, boasting an impressive CAGR of 11.2% from 2019 to 2026. These pipes are gaining popularity across a variety of sectors due to their application in gas transit, agriculture irrigation, drinking water supply, sewage systems, city gas distribution, and chemical & processing industries, among others. Rapid population growth and the trend of rural-to-urban migration are fuelling the expansion of the construction sector. This, in turn, is driving demand for pipelines and propelling the growth of the HDPE pipes market.

Government initiatives like the Jal Jeevan Mission (JJM), aiming to provide every rural household with a functional tap connection by 2024, contribute significantly to the markets growth. Jain Irrigation Systems Ltd. (JISL), a pioneer in Agri-Tech and MicroIrrigation, has established a prominent position in 24*7 drinking water supply projects, delivering clean drinking water in over 15 cities across the country.

The focus on enhancing wastewater treatment infrastructure, coupled with government schemes like PMKSY, are providing a boost to the sector. The improvement of gas distribution networks, escalating agricultural activity, and increasing numbers of housing units all pose potential growth opportunities for the HDPE pipes market, with an anticipated CAGR of 1011% over FY20-24.

In both national and international markets, natural gas usage has been on a consistent rise. JISL, being a leading manufacturer and supplier of premium quality PE pipes, has supplied over 40,000 km of PE piping to various CGD entities. The demand in the City Gas Distribution (CGD) sector is predicted to grow at a CAGR of 10.7%, reaching 85.6 MMSCMD by 2029-30. As the central government inaugurates CGD projects across 65 geographical areas in 129 districts, this nascent sector is expected to witness substantial growth, driven by increased urbanisation, environmental awareness, and policy focus to promote CGD in over 100 Indian cities by 2022.

c) PVC Sheets Industry:

PVC foam board or PVC foam sheet market is expected to reach $154.65 billion till 2026 with annual growth rate of 4.06%. PVC foam boards are of high quality, water and corrosion resistance, and a green building material product. PVC sheets are the most preferred alternative used for wooden sheets to manufacture doors, furniture, outdoor advertising boards and shelves. PVC sheets are in high demand because of its use in a variety of applications, including control cabinets and panels, wall cladding, pop-up displays, exhibition boards, models, and structures for corrosive conditions in many different industries. Additionally, the expanding demand for PVC foam in other sectors like packaging and building & construction is a crucial contributor in the markets expansion.

Wood Polymer Composite (WPC) is a contemporary and environmentally friendly material. The global wood plastic composite market size is projected to reach $9.03

Bn by 2027 at a CAGR of 8.57%. WPC is durable, has high shear strength, resistant to fire, moisture, and corrosion as compared to traditional wood products. Due to its versatile applications and high-end characteristics make WPC foam board a perfect choice and better substitute for wood and plywood. Emerging technologies coupled with new innovative product baskets shall be the driving factors for PVC and WPC sheets.

Operational Performance:

The business contributed about 2.1% to the Companys corporate turnover. The business has decreased by 7.9% to ?765 million in FY2023 from Rs. 831 million in FY2022. This is small segment for the Company currently but in coming years company would like to focus on this given improved financial position.

Markets:

The company has 2 manufacturing facilities, one India and the other in Ireland. The group also has a facility in in USA to transform PVC sheets into siding boards for the housing sector.

Risks and Challenges:

PVC sheets have been the fastest growing panel products in the last few years. However, with the entry of many unorganised players, the market has been quite competitive. In order to cater the growing demand of customers, adhering to high quality benchmark products poses a few concerns. Use of alternative products like glass, metal, MDF, plywood etc by customers, builders, dealers shall further provide a threat to the business.

Opportunity and outlook:

The PVC foam board industry is developing rapidly across the world as customers are very optimistic about the potential PVC board carries and its ecological benefits. This large market share is primarily attributed to increasing demand for plastic sheets in emerging economies, such as India, China, Indonesia, Malaysia, Vietnam, Singapore, and Thailand, in the region. Rapid growth in industrialization, increasing demand due to changing demographics, and government initiatives to attract business investments in various industries including packaging, construction, pharmaceuticals, industrial, and electronics shall drive the market for plastic sheets across many regions.

3) Agro-Food Processing

JFFFL operates in dynamic markets and looks towards a brighter future due to many micro factors.

India forms a major part of our overall food landscape, JFFFL is looking to enjoy the fruits of Indias success story. Except for one years COVID induced negative growth in GDP (year 2020-21), India has continuously delivered strong, positive year-on- year GDP growth in the last 3 decades. The Indian food processing sector is expected to grow to US$ 535 billion by 2025-2026 by some estimates. India is currently ranked sixth in the world for food and grocery markets. Food processing sector contributes approximately 1/3rd of the food market. Indias geographical situation gives it the unique advantage of connectivity to Europe, the Middle East, Japan, Singapore, Thailand, Malaysia and Korea. Our product range goes largely into the Packaged Food segment that Indias packaged food sector is witnessing nearly 10% CAGR and being valued approximately Rs. 4,000 billion by some estimates. Our company operates in industries that are also showing strong performance.

Overall spices sector in India is booming though the market is unorganized and fragmented. As per leading Spice trade association, India is producing nearly 11 million MT of spices of various kinds. Also, the Dehydrated onion and dehydrated garlic are very unique spices that give volume and flavour to the seasoning mix. Worldwide its approx Rs. 10,000 Crs. industry, almost equally split between onion and garlic in dry form. Indias fruit processing sector is witnessing 7-8% growth per year as per industry estimates. JFFFL plays an important role in these categories.

Our overseas operations operate and get impacted by local macro and micro economic issues, industry trends, consumer trends, etc. Turkeys economy has been witnessing volatile situation in terms of inflation and interest rates. Our company has been able to manage macro and micro issues well. Mainland European markets of Benelux, France, Germany, Southern Europe has started witnessing softening in demand due to rising interest rates and inflationary trends in the food sector. Our Belgium operations are managing these challenges well. British Isles and especially the United Kingdom has been seeing one of the biggest economic challenges. Food service and hospitality sector forms major part of our UK operations and this sector is still coming out of COVID challenges and now high interest rates and inflation. US economic outlook remains strong for our business although cost inflation is a challenge.

Products

The company under its brand, Jain Farm Fresh, offers dehydrated onion and vegetable products, aseptic fruit purees, concentrates, clarified juices, individually quick frozen (IQF) and frozen products of premium quality. Valley Spice has been created to give consumers the real taste of spice in its most pure and authentic form.

Operational Performance

The business has grown by 5% to USD 118 million in FY2023 from USD 112 million in FY2022.

Markets

The company has two plants in India and one in the US, with total capacity to manufacture 34,700 MT of product, it caters to major players in dehydrated soups and ready to eat/cook products in 28 countries,

Risk & Challenges

Our biggest risks and challenges remain around crop situations, weather related issues impacting quality and quantum of output, high cost inflation, slowdown in demand, rising costs in both origin countries and consuming markets, high interest rates, While we continue to remain focused on supplying high quality products, we also face challenges from lower quality and lower cost competition,

Opportunities & Outlook

Our food business is focused on improving its capacity utilisation because opportunities continue to exist with our existing and potentially new customer base, increase in volumes and reduction in unit cost shall allow JFFFL to deliver overall value to customers while strengthening its own business base, Opportunities exist in yield improvement at farm level, yield improvement in processing, cost optimization and provide value and thought leadership in the markets we operate in, Overall the business outlook remains bullish and the company has robust business plans in place for the next few years to come while remaining nimble and agile in the changing macro business environment,

4) Risks and concerns at corporate level

Our company navigates various risks associated with agriculture, environment, international markets, currency fluctuations, and governmental policies, Our adeptness in handling these risks has allowed us to sustain growth, improve margins, and increase market share despite recent pandemic & war related turbulence in markets and economies,

Here are the top six risks weve identified:

1) Commodity Price Risk: Our reliance on commodities like fruits, vegetables, and polymers and resins as raw materials exposes us to price fluctuations caused by oil price changes and supply-demand dynamics in Indian and global markets, Notably, petroleum-based raw materials can significantly impact our operations and financial position.

2) Seasonality in Agriculture: Our performance is subject to seasonal variations in the agriculture sector, Factors like monsoon timing and weather conditions in india, which can cause flooding, droughts, and crop damage, affect our production of agro-processed goods,

3) Foreign Currency Exchange Rate Risk: Our business involves foreign currency transactions, primarily in USD, EUR, GBP and CHF, which expose us to exchange rate risks, We handle this risk by creating a natural hedge through exports and subsidiary operations,

4) Lower Capacity Utilization: Occasional underutilization of resources can impact our performance, This can result from seasonal dependency, competition, or initiatives like the PMKSY not meeting their goals,

5) Volatile and Uncertain Regulatory Environment: Changes in federal and state government policies can introduce new regulations that affect our growth, Factors like alterations in government policies impacting turnkey projects, the subsidy model, and contracts for drip irrigation contribute to this risk,

6) Liquidity and Borrowing Risk: Various elements affect our financial situation and liquidity, including capacity utilization, reliance on lenders, interest rates, the cash collection cycle, and delays in government receivables, Our main cash requirements are for operating and working capital needs, debt servicing, and capital equipment purchases,

We manage these risks through a comprehensive risk management plan, which involves periodic reviews and necessary adjustments in response to evolving market conditions and our internal operations,

Type of Risk

Mitigation

Operating Risk

1) Operation and Maintenance We mitigate this risk with state-of-the-art equipment and a dedicated, skilled workforce at all our locations, We have competent labour at various levels for routine operations and maintenance across our facilities,
2) Raw Material Prices Given the absence of traded futures or other hedging instruments for our plastic resin, we currently do not hedge against the market risk resulting from price fluctuations of these commodities,
3) Lower Capacity utilisation Factors like seasonal dependency, competition, and underperformance of programs like RKVY can cause reduced capacity utilisation,

Market Risk & Opportunities

4) Demand

mis

The PMKSY program aims to implement MIS across India with an outlay of INR 50,000 Crore in five years, and funds are allocated for projects increasing the area under Micro irrigation.
Plastic Products
With initiatives like the Jal Swarajya Scheme, Jal Nirmal Scheme, Co-operative lift irrigation scheme, AMRUT, Swachh Bharat Mission, and Smart cities project, the government aims to provide piped water to 150 million households across 500,000+ villages by 2024.

Tissue Culture

In India, theres a significant gap between the demand for saplings and actual production. Tissue culture saplings are currently used in only 5% of total crop cultivation in India, indicating immense growth potential
5) Interest Rate Risk We understand that projected interest rates reflect market conditions, and any changes due to inflation or external factors could impact our cash flows. The Company continue to deleverage its Balance sheet with better working capital management.
6) Payments and Overdue Outstanding Many state governments delay subsidy payments, leading to a sharp increase in receivables and straining our working capital cycle. To mitigate this, weve shifted from the subsidy model to the cash and carry model and have initiated community-based turnkey irrigation projects for supply but not turnkey implementation. So the Company is focussing on retail business with its strong dealers network across India

6) Analysis of the Standalone financial performance

a) Net Sales C in million)

Business

2022-23 2021-22 Change absolute Change %

Hi Tech Agri Input Products Division

21,862 17,661 4,200 23.8%

Plastic Division

13,952 10,263 3,689 35.9%

Other Division

321 267 54 20.3%

Total Revenue

36,135 28,192 7,943 28.2%

Domestic

32,611 24,385 8,226 33.7%

Export

3,524 3,807 (283) (7.4%)

Total revenue of the Company on a standalone basis has increased by 28.2% to Rs. 36,134.90 million in FY 2023 vis-avis Rs. 28,191.50 million in FY 2022.

Companys total domestic revenue has increased by 33.7% for FY 2023 to Rs. 32,611.00 million from Rs. 24,384.58 million in FY 2022. The revenue from exports has decreased by 7.4% in FY 2023 to Rs. 3,527.8 million from Rs. 3,524.00 million in FY 2022.

i) Hi Tech Agri Input Products Division:

Revenue from sales of Companys Hi-Tech Agri Input Products has increased by 23.8% in FY 2023 to Rs. 21,861.67 million from Rs. 17,661.30 million in FY 2022, mainly due to increase in MIS sales. Domestic Hi-Tech Agri Input Products has increased by 26.2% to Rs. 19,806.79 million in FY 2023 from Rs. 15,692.04 million in FY 2022, mainly due to increase in MIS retail sales.

ii) Plastic Products:

Revenue from the Plastic Products division has increased by 35.9% in FY 2023 to Rs. 13,952.36 million from Rs. 10,263.47 million in FY 2022. The revenue from domestic Plastic division has increased by 48.1% in FY 2023 to Rs. 12480.42 million from Rs. 8,425.77 million of FY 2022.

iii) Other Division:

Other divisions include Solar Water Heating systems, Solar Photovoltaic Systems, and Agricultural products. Revenues from other division has increased by 20.3% in fiscal 2023 to Rs. 320.87 million from Rs. 66.77 million of FY 2022.

b) Raw material consumption Rs in Million)

Particulars

31st Mar 2023 31st Mar 2022 Change absolute Change %

Polymers, Chemicals & additives, packing material etc.

22,003.14 16,687.76 5,315.38 31.85%

Raw material consumption has increased by 31.85% to Rs. 22,003.14 million in FY 2023 as compared to Rs. 16,687.76 million of FY 2022, due to change in product mix.

c) Other Expenses Rs in Million)

Particulars

31st Mar 2023 31st Mar 2022 Change absolute Change %

Other Expenses

7,760.97 6,465.33 1,295.64 20.04%

Other Expenses were increased by 20.04% to 7,760.97 million in FY 2023 as compared to Rs. 6,465.33 million in FY 2022, due to increase in commission & brokerage by 236.40%, Rs. 217.72 million in FY 2023 from Rs. 64.72 in FY 2022, increase in consumption of stores and spares by 33.46% Rs. 251.70 million in FY 2023 from Rs. 188.59 million in FY 2022. Increase in Power and Fuel charges by 31.05% Rs. 984.79 million in FY 2023 from Rs. 751.46 in FY 2022. Increase in agency charges for installation by 16.87% Rs. 1,818.78 million in FY 2023 from Rs. 1,556.21 million in FY 2022. Increase in Bad debts/Advance, write off Claim receivables by 17.68% Rs. 1,341.42 million in FY 2023 from Rs. 1,139.87 million in FY 2022

d) Employee Benefit Expenses Rs in Million)

Particulars

31st Mar 2023 31st Mar 2022 Change absolute Change %

Employees benefit expenses

2,874.59 2,431.76 442.83 18.21%

Employee cost has decreased by 18.21% to Rs. 2,874.59 million for FY 2023 as compared to Rs. 2,431.76 million of FY 2022, due to increase in basic salary of associates by 18.24% Rs. 2,761.63 million in FY 2023 from Rs. 2,335.53 in FY 2022.

e) Finance Costs Rs in Million)

Particulars

31st Mar 2023 31st Mar 2022 Change absolute Change %

Interest Exp

3,501.71 2,456.02 1,045.69 42.58%

Bank Charges

127.68 115.92 11.76 10.14%

Total

3,629.39 2,571.94 1,057.45 41.11%

The Finance Cost has increased by 41.11% to Rs. 3,629.39 million for FY 2023 as compared to Rs. 2,571.94 million of FY 2022, increase due to fair valuation impact of NCD & the interest rate fluctuation of various lenders. Interest Rate is 9.70% for FY 2023 from average (10% to 13%) in FY 2022 mainly on account of Restructuring Plan.

f) Fixed Assets Rs in Million)

Particulars

31st Mar 2023 31st Mar 2022 Change absolute Change %

Gross Block (net of disposal)

46,141.64 45,311.08 830.56 1.83%

Less: Depreciation

18,776.31 17,561.20 1,215.11 6.92%

Net Block

27,365.33 27,749.88 (384.55) (1.39%)

Gross block of Fixed Assets has increased by Rs. 830.56 million during FY 23 increase mainly on addition in Greer Poly shade house & Plant and Equipment Rs. 735.71 millior and disposal of Rs. 164.16 million

g) Investments Rs in Million)

Particulars 31st Mar 2023

31st Mar 2022 Change absolute Change %

13,011.11 in Wholly owned subsidiary (WoS)/ Subsidiary/ Step Down Subsidiary Company

12,972.43 38.68 0.30%

Other 612.49 Investment

612.49 0.00 0.00%

Total 13,623.60

13,584.92 38.68 0.28%

Investment in Subsidiary increased by 0.30% Rs. 13,011.11 million in FY 2023 from Rs. 12,972.43 million in FY 2022 mainly on account of increase in Corporate guarantee value.

h) Inventories Rs in Million)

Particulars 31st Mar 2023

31st Mar 2021 Change absolute Change %

Inventories 8,934.03 (incl.Biological assets)

8,294.43 639.60 7.71%

The overall inventory has Increased by Rs. 639.60 million during FY 2023 as compared to FY 2022.

i) Trade Receivables C in Million)

Particulars

31st Mar 2023 31st Mar 2022 Change absolute Change %

Gross Receivables

24,508.91 23,201.98 1,306.93 5.63%

Less: Impairment allowances

3,748.74 4,205.04 (456.30) (10.85%)

Net Receivables

20,760.17 18,996.94 1,763.23 9.28%

The net receivables slightly increased by 5.63% to Rs. 24,508.91 million for FY 2023 receivables as compared to Rs. 23,201.98 million of FY 2022 and there was a decrease in impairment allowances of Rs. 456.30 million mainly on account of Govt. & Project Receivables. And over all increase mainly due to decreased by subsidiary outstanding by Rs. 2,522.33 million Rs. 2,786.28 million in FY 2023 from Rs. 5,308.61 million in FY 2022

j) Short Term Loans and Advances C in Million)

Particulars 31st Mar 2023

31st Mar 2022 Change absolute Change %

Short Term 5,894.59 Loans & Advances

5,519.02 375.57 6.81%

Short Term Loans & Advances have increased by 6.81% Rs. 5,894.59 million for FY 2023 as compared to Rs. 5,519.02 million in FY 2022, mainly due to increase in contract asset value by 25.70% Rs. 238.88 in FY 2023 from Rs. 929.49 million in FY 2022, decrease in balance with government authority i.e. sales tax, GST, Custom Duty etc.by 11.93% Rs. 965.24 million in FY 2023 compared to Rs. 1,095.97 million in FY 2022 and increase in Employee Advances by 8.82% Rs. 5.83 million in FY 2023 from Rs. 66.07 million in FY 2022.

k) Current Liabilities C in Million)

Particulars

31st Mar 2023 31st Mar 2022 Change absolute Change%

Current Liabilities

27,522.24 25,108.44 2,413.80 9.61%

Current Liabilities have increased by Rs. 2,413.80 million to Rs. 27,522.24 million for FY 2023 from Rs. 25,108.44 million for FY 2022.Mainly due to increase in trade payable by Rs. 1,797.28 million Rs. 5,377.28 million in FY 2023 from Rs. 3,580.00 million in FY 2022 and increase in other current liabilities (mainly contract customer advance) by Rs. 486.66 million Rs. 2,243.47 million in FY 2023 from Rs. 1,756.81 million in FY 2022.

l) Long Term Borrowing

(Rs in Million)

Particulars

31st Mar 2023 31st Mar 2022 Change absolute Change %

Long Term Borrowing (incl. the current maturities

11,906.11 12,757.16 (851.05) (6.67%)

The Long Term Borrowing has decreased by 6.67% to Rs. 11,906.11 in FY 2023 from Rs. 12,757.16 million in FY 2022.Due to repayment of the loans.

m) Shareholders Fund ( in Million)

Particulars

Equity Capital Premium Share Other Reserves Retained Money recd agst share warrants Total

Balance as on 1st April 2022

1,223.80 18,020.67 3,948.64 21,591.41 540.33 45,324.85

a) Allotted during the year

24.08 323.53 - - - 347.61

b) Share option outstanding

- - - - - -

b) Profits for the year

- - - 393.21 - 393.21

c) Dividend paid (incl. dividend tax)

- - - - - -

d) Adjustments

- - - (56.16) (86.90) (143.06)

Sub Total (a to d)

24.08 323.53 - 337.05 (86.90) 597.76

Balance as on 31st March 2023

1,247.88 18,344.20 3,948.64 21,928.46 453.43 45,922.61

Increase in Equity share capital and share premium by Rs. 24.08 million and Rs. 323.53 million due to issue 12,040,623 Equity share to domestic and foreign lenders and individual investor.

n) Dividend C in Million)

The Board has not proposed to pay dividend on Ordinary Equity Shares and DVR Equity Shares for the FY 2023.

Business

2022-23 2021-22 Change absolute Change %

Equity Dividend

- - - -

7) Internal Control Systems

The Company has implemented dynamic and agile internal control mechanisms that align with the evolving business landscape and the nature of its operations. The responsibility for the Companys internal control systems rests with the Management, who ensures the protection of assets and the accuracy of financial records. To adapt to changing circumstances, the Company maintains a robust system for budget control, continuously evaluating actual performance to ensure operational costs are in line with the companys evolving needs. Our internal audit program encompasses all areas of activity, providing regular updates to management to address emerging risks and opportunities. The Internal Auditors actively collaborate with the Audit Committee, presenting quarterly reports and participating in meetings to address any queries raised by Committee members. Recognizing the importance of staying ahead, the Audit Committee meticulously examines all financial information to maintain effective internal control mechanisms.

The Company prides itself on its contemporary internal business rules, procedures, authority levels, and organizational structures. These dynamic frameworks empower our teams to adapt swiftly and make informed decisions in response to the dynamic business landscape. By embracing change and fostering a culture of innovation, we ensure our internal control environment remains relevant and responsive to the evolving needs of the Company.

8) Human Resources

At JISL, we recognize that our employees are the driving force behind our companys success. We are fully committed to empowering them in todays dynamic and rapidly changing business landscape. We understand that effective people management is not only a crucial leadership skill but also a key factor in boosting productivity, fostering a positive work culture, and nurturing employee motivation. In line with this vision, we have implemented innovative and forward-thinking initiatives to support our diverse workforce. At JISL, we take pride in cultivating long-term relationships with our talented employees. Their continued dedication and loyalty demonstrate their trust in our leadership and growth potential. We believe in providing a platform for personal and professional growth, equipping our employees with the skills and mindset needed to tackle new challenges head-on. In this regard, we are committed to creating a dynamic learning environment and investing in our people. By attracting top talent and fostering an inclusive, engaging, and fulfilling work environment, we empower our employees to thrive and succeed. In recent times, our focus has been on enhancing productivity, agility, and adaptability. We understand the importance of staying ahead in an ever-evolving marketplace. Therefore, we have placed a strong emphasis on organisational development, employee engagement, talent management, and retention. Our goal is to foster a strong, progressive, and agile organisation that can quickly respond to changing market dynamics. We actively encourage the growth and development of our associates, providing them with opportunities to enhance their skills, leadership abilities, and engagement. Our aim is to cultivate a workforce of future leaders who can drive our business strategies and steer us toward continued success. Transparency, fairness, and competitiveness are at the core of our reward and recognition approach. We strive to maintain an ethical and values- driven performance culture that aligns the interests of our associates, shareholders, and customers. By adopting a market- oriented and merit-based approach, we ensure that our associates feel valued and motivated to contribute their best. We also prioritise the identification, development, and deployment of talented individuals who possess the necessary skills, experience, and values to excel in current and future senior management positions. In todays rapidly changing world, we understand the importance of adapting our strategies to meet the evolving needs of our workforce. We are committed to providing our associates with the support, resources, and opportunities they need to thrive in the present and future. At JISL, we embrace a contemporary approach to human resources, prioritising employee well-being, diversity and inclusion, and leveraging technology to create a seamless and collaborative work environment. Our dedication to our associates remains steadfast as we navigate the challenges and opportunities of the modern business landscape.

Disclaimer

The Management issues a warning that some of the aforementioned statements are directional and forward-looking and may not represent the accuracy of the underlying predictions as they depend on a number of variables, some of which may be beyond the managements control.