TO THE MEMBERS
Your Directors have pleasure in presenting the Annual Report together with the Audited
Financial Statements of the Company for the Financial Year ended 31st March
2022.
FINANCIAL RESULTS
(Rs in Crore)
| Sales & Other Income |
249.90 |
| Profit before Finance Cost & |
19.26 |
| Depreciation (PBIDT) |
|
| Profit after Tax |
7.73 |
| Surplus brought forward |
41.92 |
| Surplus carried to Balance Sheet |
48.96 |
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs 1.50/- per Equity Share of Rs
10/- each (15%) for the Financial Year ended 31st March 2022. The Dividend
outgo subject to approval at the ensuing Annual General Meeting will be Rs 69.55 Lacs.
OPERATIONS
During the year 2021-22, your Company has delivered 10% revenue growth compared to the
last year. Vegetable business and field crops delivered 19% and 9% growth, respectively.
However, Cotton seed business continues to be challenging in the backdrop of spread of
unapproved Cotton seeds, resulting degrowth from last year.
On the export front, your Company continues to carefully expand its geographical and
product footprints and diversifying into new crops like Chilli and Cucumber. During the
year, the export revenue registered 24% growth. However, export segment continues to face
headwinds due to political instability and forex availability in importing countries,
currency depreciations & high trade logistics costs.
The year 2021-22 was one of the toughest years for agriculture companies especially in
the seed sector. Covid second wave hit during peak season (April - May 2021) impacting
rural economy severely. Operations and logistics activities were grossly disrupted.
However, the operation team stood up to challenge and delivered as per market demand.
As a part of the growth strategy, the sales teams were realigned to focus on different
verticals of business. The realigned growth strategy and strategic business plan is based
on six priorities as outlined earlier as well
(1) Portfolio Strengthening
(2) Demand Generation
(3) Effective Channel Management
(4) Branding & Effective use of Digital Media
(5) High Operation Efficiency and
(6) Talent Acquisition & People Development.
To strengthen portfolio, your Company now follows strict product lifecycle management
principles. Portfolio renewal has been fundamental for Companys growth and in last 2
years, 24 new Hybrids were introduced and most of them are performing well & the
actual volume growth will be visible in the coming years. Robust product advancement
processes have been put in place. Demand generation is another key driver for growth, we
are working on focused village approach and investing on the specific geographies to
create high demand for our products.
New packing design and over all appearance of market communication tools have been well
accepted by the customers and channel partners. With the help of social media and digital
tools, customer connect and visibility have been enhanced. The work that was started last
year to improve the performance of vegetable seed business has started delivering positive
outcomes.
As a part of broader digitisation initiative, your Company implemented Track &
Trace solution, which provides serialisation of each product pack and end to end
visibility amongst the various inventory stages of the products including establishing
linkage of ‘Batch Genealogy. The initiative helps to meet the compliance requirement
of uniquely serialising product packs, establish end to end inventory traceability and
support several CRM initiatives.
Untimely and sustained rains in the month of September to December 2021 negatively
impacted seed field production activities, however, the operation team developed and
implemented appropriate mitigation plans to minimise the impact.
INDUSTRY OVERVIEW AND OUTLOOK
In the current situation the world is facing high agricultural prices across the
segments and most of it is linked to the high demand post covid and ongoing conflict in
the eastern Europe. High commodity prices are certainly good for the farmers but not for
the consumers. Initial indicators for the upcoming season are good as farmers had a good
harvest, IMD forecast for the rains is normal and all demand factors are positive. We also
understand that government will do all in their control to ensure timely availability of
fertilisers especially Phosphorus and Potash at affordable rate to the farmers. The Indian
seed market has witnessed a major restructuring because of the implementation of some
progressive policies by the government. This includes launching initiatives to promote the
use of hybrid seeds among the farmers who had earlier used outmoded open pollinated
varieties. Some other growth-inducing forces, such as growth in income levels,
commercialisation of agriculture, patent protection systems and intellectual rights over
plant varieties, have given a great push to the market. Owing to these factors, the Indian
seed market is expected to exhibit strong growth in future.
During the year 2021-22, few crop segments like Hybrid rice, vegetable seeds and Cotton
faced major challenges due to multiple factors at different times of the year including
prolonged rains in North & East markets. The extended rainy season impacted the
cropping of Cauliflower, Cabbages & Tomatoes. Whereas Covid 3rd wave in
October to January put farmers in ambiguity of which crop to be cultivate so that they can
sell their produce profitably. The above factors impacted overall business. From 4th
quarter of the year, positive sentiments are building owing to good commodity prices for
vegetables. This gives us a hope that the business will come back to normal and can grow
further in 2022-23.
RESEARCH AND DEVELOPMENT
The Company continues to sharpen focus on developing products for multiple climatic
regions, biotic and abiotic stress to fulfil customer needs in domestic, African and ASEAN
market. Your Company has prioritised R&D efforts and allocated the resources to focus
on highest value opportunities.
Your Company has strengthened pre-breeding in field crops, cotton and vegetables using
molecular marker assisted breeding, shifted from traditional marker to single nucleotide
polymorphism and using latest biotechnology tools to develop product in shortest possible
time. New breeding software has been introduced and improved strategic field trials with
stringent product advancement procedure have been put in place. Your Company has
strengthened production research for cost effectiveness and improved quality.
OPPORTUNITIES, THREATS, RISK AND CONCERNS
Opportunities
In India, agriculture is the dominant occupation, which secures abundant opportunities
for the seed market. Awareness of healthy food habits and increase in general consumption
of vegetables & fruits is driving the growth of vegetable seeds business in India.
Farmers are adopting the cultivation of Hybrids with value added traits, ex.
transportability, quality and disease tolerance traits resulting into increase in the
value of the business. Acceptance of high value seeds cultivation is growing. Commodity
prices are also giving a bigger opportunity for the growth of Vegetable seed business in
India. The prolonged Covid-19 pandemic has provided both challenges and opportunities for
seed companies to place more emphasis on sustainable innovative approaches for long-term
profitability.
We are hopeful that the above-mentioned factors will help in fuelling the growth of the
Seed Industry. There could also be an opportunity to improve our basket of input offerings
to the farmers in future.
Threats, Risk and Concerns
While demand side of agriculture remains strong, external climatic factors continues to
impact the production cycle. We have seen increased focus of the Government to deal with
such challenges by especially strengthening Irrigation and Crop Insurance. Emerging global
challenges like climate change, pest resistance, herbicide tolerance, higher costs to
R&D and supply chain disruptions have made the seed industry facing challenging
future. Changing consumer behaviours due to Covid-19 could also have an impact on cropping
patterns. Increase in labour cost is also posing challenges to business.
More innovative approaches are required to feed the worlds increasing population and
also to meet the challenges of reducing arable land and increasing demand for more
sustainably grown food. For agribusiness companies to remain competitive they need to move
out of the traditional innovation models and focus on attention to customer needs, dynamic
R&D programs, rapid digitisation, increased internal and external collaboration and an
innovation culture across the organisation. On the policy side, India needs better
enabling environment that protects intellectual property and allows introduction of modern
technologies in agriculture.
HUMAN RESOURCE DEVELOPMENT
Future of Work: A New Era in Human Resources
Future of Work represents a fundamental change in the working world. The Covid-19
pandemic casts a new light on people at work and society. Trends such as digitalisation,
globalisation, global networking and demographic change have added a fair amount of
complexity to how we work.
Our journey - Third successive certification of "Great Place to Work"
recognition has given us lot of insights and confirms that with your support we are making
slow but steady progress on the people front. Winning runner-up award for the
inter-company UDAAN competition is a great example of Creativity & Innovation and
fostering Cross Functional Team Working. All our actions are aimed at transforming our
business and provide opportunities to developing talent. On people side, we continue to
make policy changes to align with the best practices in gradual manner without ignoring
the rapidly changing work environment.
Effective people policies covering all the aspects of the business that are important
to the employees are in place. When transparency is part of workplace culture, it comes
along with trust, communication and greater levels of employee engagement. The people
policy changes implemented in alignment with the best industry practices had enhanced
motivation amongst the employees, in-turn reflecting a positive surge in short, medium and
long-term growth opportunities. Improved workplace ergonomics has upped the morale and
increased employee involvement at locations.
At JKAGL, employee engagements are very important to us, events such as festivals,
employee birthdays, achievements are celebrated in a unique manner. Strategies to promote
inclusiveness are highly valued. Recently conducted Women day event, commemorating the
culture of thanking all the women staff including front line seasonal staff for their
support and contribution, has been a memorable event. These milestones will sharpen our
objectives further in the journey to build a High-Trust, High-Performance Culture.
KEY CHANGES IN FINANCIAL INDICATORS
Key Changes in financial indicators, are given in the Notes to Financial Statements.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company believes that a strong Internal Control framework is an important pillar of
Corporate Governance. The Company has in place Internal Control Systems commensurate with
the nature of its business, size and complexity of its operations. These systems are
regularly tested for their effectiveness by Statutory as well as Internal Auditor and were
found to be operating effectively during the year. The Internal Auditor reviews on regular
basis to check its adequacy and also to verify all statutory compliances. Based on the
Internal Audit Programme approved by the Audit Committee of the Board, the Internal
Auditor carry out regular internal audits covering all offices, factory and key areas of
business. Reports of the Internal Auditor are placed before the Audit Committee on
quarterly basis for review. The Audit Committee regularly reviews the reports and
discusses the actions taken with the management in addition to reviewing the effectiveness
of the internal control systems and monitoring the implementation of audit
recommendations. There are adequate checks & balances in place, wherein deviation from
the systems laid-out are clearly identified and corrective actions are taken in the
respective areas, wherever required.
INTERNAL FINANCIAL CONTROLS
The Company has laid down Internal Financial Controls Systems, Policies and Procedures
with reference to Financial Statements. The systems, policies and procedures are reviewed
from time to time and are updated. These are designed to ensure adherence to the Companys
policies, safeguarding of its assets & interests, prevention & detection of frauds
& errors, accuracy & completeness of financial records and proper conduct of
business of the Company. The Company also has a robust Management Information System which
not only facilitates speedy business decisions but also helps in timely preparation and
sharing of reliable financial information across various levels in the Company. The
transactional controls built in SAP ERP systems ensures appropriate segregation of duties,
appropriate level of approval mechanisms and maintenance of various records. All such
controls are assessed during the year. Regular audits and review processes ensure that
such systems are reinforced on on-going basis. Based on the review of the Internal
Financial Control Systems during the year by the Management, Audit Committee and the
Auditors of the Company, no material reportable weakness was observed in the Internal
Financial Control Systems during the financial year.
ANNUAL RETURN
The Annual Return as required under Section 92 and Section 134 of the Companies Act,
2013 read with Rules made thereunder is available on the website of the Company at
www.jkagri.com
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The particulars of loans given, guarantees or securities provided and investments made
as required under the provisions of Section 186 of the Companies Act, 2013 are given in
the Notes to Financial Statements.
RELATED PARTY TRANSACTIONS
During the Financial Year ended 31st March 2022, all the contracts or
arrangements or transactions entered into by the Company with the Related Parties were in
the ordinary course of business and on arms length basis and were in compliance with the
applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
Further, the Company has not entered into any contract or arrangement or transaction
with the related parties which could be considered material in accordance with the policy
of the Company on materiality of Related Party Transactions.
In view of the above, disclosure in Form AOC-2 is not applicable. The Related Party
Transaction Policy as approved by the Board is available on the website of the Company.
COST RECORDS
Maintenance of cost records, as specified by the Central Government under sub-section
(1) of section 148 of the Companies Act 2013, is not required by the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Dr. Gyanendra Shukla (DIN: 02922133), President & Director of the Company retires
by rotation and being eligible offers himself for re-appointment at the ensuing Annual
General Meeting (AGM). The Board recommends his re-appointment.
During the year, the Members have approved the appointment of Shri Raj Kumar Jain (DIN:
01741527) as an Independent Director of the Company for a period of 3 (three) consecutive
years, commencing 26th November 2021, by way of Postal Ballot. The Board of
Directors of the Company has also appointed Shri Jain as member of Nomination and
Remuneration Committee and Stakeholders Relationship Committee w.e.f., 26th
November 2021.
Shri Amar Singh Mehta (DIN: 00030694), Independent Director of the Company resigned
from the directorship w.e.f. the closing of business hours of 30th December
2021. Shri A.S. Mehta was also Chairman of Stakeholders Relationship Committee and member
of Audit Committee and Nomination and Remuneration Committee.
The first term of office of Shri Ajay Srivastava (DIN:00049912) as Independent Director
of the Company shall determine on 23rd October 2022. Shri Ajay Srivastava is
eligible for re-appointment as Independent Director of the Company for second term. The
Board of Directors of the Company, on recommendation of the Nomination and Remuneration
Committee, re-appointed Shri Ajay Srivastava as Independent Director of the Company for
second term of 3 years, commencing 24th October 2022, subject to requisite
approval of Members of the Company at the ensuing AGM. In the opinion of the Board, he
possesses requisite expertise, integrity, proficiency and experience. Accordingly, the
Board recommends his re-appointment.
The Board of Directors of the Company, on recommendation of the Nomination and
Remuneration Committee, re-appointed Dr. Gyanendra Shukla as Whole-time Director of the
Company with the designation "President & Director", for a term of 3 years,
commencing 23rd May 2022, subject to requisite approval of Members of the
Company at the ensuing AGM. The Board recommends his re-appointment.
All Independent Directors of the Company have given declarations that they meet the
criteria of independence as provided in Section 149 of the Companies Act, 2013 and
Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015.
There were no other changes in the Directors/ Key Managerial Personnel of the Company
in terms of the provisions of the Companies Act, 2013, during the period under review.
CONSERVATION OF ENERGY, ETC.
The details as required under Section 134(3)(m) of the Companies Act, 2013 read with
the Companies (Accounts) Rules, 2014 are annexed to this Report as Annexure - 1 and forms
part of it.
DEPOSITS
The Company has neither invited nor accepted any deposits from the public.
AUDITORS
(a) Statutory Auditors and their Report
M/s BGJC & Associates LLP, Chartered Accountants (ICAI Firm Registration Number-
003304N), were appointed as Statutory Auditors of the Company for a second term of five
consecutive years, commenced from the conclusion of 19th AGM held on 27th
August 2019 till the conclusion of 24th AGM to be held in the year 2024.
The observations of the Auditors in their Report on Accounts and the Financial
Statements read with relevant notes are self-explanatory. The Auditors Report does not
contain any qualifications, reservations or adverse remarks. Further, no fraud has been
reported by the auditors to the Audit Committee or the Board.
(b) Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of
Directors appointed Shri Namo Narain Agarwal, Company Secretary in Practice as Secretarial
Auditor to carry out Secretarial Audit of the Company for the Financial Year 2021-22.
The Report given by him for the said Financial Year in the prescribed format is annexed
to this Report as Annexure - 2. The Secretarial Audit Report does not contain any
qualifications, reservations or adverse remarks.
PARTICULARS OF REMUNERATION
Disclosure of the ratio of the remuneration of each director to the median employees
remuneration and other requisite details pursuant to Section 197(12) of the Companies Act,
2013 (Act) read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, is annexed to this Report as Annexure - 3. Further,
Particulars of Employees pursuant to Rule 5(2) & (3) of the above Rules forms part of
this Report. However, in terms of provisions of Section 136 of the Act, the Report and
Accounts are being sent to all the Members of the Company and others entitled thereto,
excluding the said Particulars of Employees. The said information is available for
inspection at the Registered Office of the Company during business hours on working days
of the Company up to the ensuing AGM. Any member interested in obtaining such particulars
may write to the Company Secretary.
CORPORATE SOCIAL RESPONSIBILITY
Your Company believes in the process of giving back to the society and aims to
contribute to sustainable growth of the society at large. Besides undertaking projects for
overall development and welfare of the society, your Company has been working closely with
the farming community in areas of imparting agricultural knowledge, promoting preventive
healthcare, skill development and livelihood enhancement projects.
The Company has requisite Corporate Social Responsibility (CSR) Policy in accordance
with the provisions of the Companies Act, 2013 and rules made thereunder. The CSR Policy
is disclosed on the website of the Company at www.jkagri.com. As per the CSR provisions
disclosure requirements, a brief description of CSR projects is uploaded on the Companys
website. Web-link of the same is https://jkagri.com/wp-content/uploads/2022/05/CSR-
Policy-2022.pdf
The Annual Report on the CSR activities undertaken by the Company during the Financial
Year under review, in the prescribed format, is annexed to this Report as Annexure - 4.
CHANGE IN THE NATURE OF BUSINESS
During the Financial Year under review, there was no change in the nature of business
of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the Financial Year under review, there were no significant and material orders
passed by the Regulators or Courts or Tribunals which could impact the going concern
status of the Company and its future operations.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND
BANKRUPTCY CODE
During the Financial Year under review, no application is made or any proceeding is
pending under the Insolvency and Bankruptcy Code, 2016.
COMPLIANCE OF SECRETARIAL STANDARDS
Based on the Secretarial Audit Report of the Secretarial Auditor, the Company has duly
complied with the applicable Secretarial Standards on Meetings of Board of Directors and
General Meetings issued by the Institute of Company Secretaries of India.
CORPORATE GOVERNANCE
Your Company reaffirms its commitment to best corporate governance practices. Pursuant
to
Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations
2015, a Management Discussion and Analysis, Corporate Governance Report and Auditors
Certificate regarding compliance of conditions of Corporate Governance are made a part of
this Report. The Corporate Governance Report also covers the following:
(a) Particulars of the five Board Meetings held during the Financial Year under review.
(b) Salient features of the Nomination and Remuneration Policy.
(c) The manner in which formal annual evaluation of the performance of the Board of
Directors, of its Committees and of individual Directors has been made.
(d) The details with respect to Composition of Audit Committee and establishment of
Vigil Mechanism.
(e) Details regarding Risk Management.
(f) Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Companies Act, 2013, your Directors state
that-
(a) in the preparation of the annual accounts, the applicable accounting standards have
been followed along with proper explanation relating to material departures;
(b) the accounting policies have been selected and applied consistently and judgments
and estimates made are reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company at the end of the financial year and of the profit and
loss of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of the said Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) the internal financial controls to be followed by the Company have been laid down
and that such internal financial controls are adequate and were operating effectively; and
(f) the proper systems to ensure compliance with the provisions of all applicable laws
have been devised and that such systems were adequate and operating effectively.
CAUTIONARY STATEMENT
"Managements Discussion & Analysis Report" contains forward looking
statements, which may be identified by the use of the words in that direction or connoting
the same. All statements that address expectation or projections about the future,
including but not limited to statements about the Companys strategy for growth, product
development, market position, expenditures and financial results are forward looking
statements. The Companys actual results, performance or achievements could thus differ
materially from those projected in such forward looking statements. The Company assumes no
responsibility to publicly amend, modify or revise any forward - looking statements on the
basis of any subsequent development, information or events.
ACKNOWLEDGEMENTS
Your Directors wish to acknowledge and place on record the commitment and dedication on
the part of the employees of your Company in achieving good results.
Your Directors would also like to acknowledge and record their appreciation of the
continued support and assistance received by the Company from its valued Customers,
Dealers, Suppliers, Shareholders, Banks and various Central and State Government Agencies.
| On behalf of the Board of Directors |
|
| Date: 26th April 2022 |
Bharat Hari Singhania |
| Place: New Delhi |
Chairman |
+91-9892691696
