JK Agri Genetics - Is this the desi Monsanto/Bayer?

(Mridul) #48

Rishi…gov proposed further reduction in bt cotton prices from 800 to 740 for 450 gm packet. Revenue hit per packet will be 50 inr as 10 inr is reduction of royalty payments to Mosanto. JK’s bt business would be hit if this is implemented. Check below article.

Good that Ethiopia doesn’t have price caps yet.

Any insights on how they are planning to ramp up operation in India on veggie front? Their annual reports do not contain much info.

Here is CARE credit report with pros and cons marked in Green and Red.
JKAgriGenetics_Care Report_Dec17_Marked.pdf (516.3 KB)

Any industry scuttlebutt on seed quality?

(James Sebastian) #50

Q1 results - Flat compared to corresponding Quarter.

(vaibhavjain87) #51

Vikrampati Singhania has been appointed Managing Director with a remuneration of ₹37 lakh per month, i.e. ₹4.5 crore a year. Over and above, various perquisites and commission of 2% of net profit.

Given JKAgri’s PAT was ₹12 crores in FY18, isn’t this too high? Also, this has been a new position created, so this is incremental expenses.

(Abhishek Basumallick) #52

Another way to look at this is why would someone like Vikrampati Singhania resign from the directorship of JK Tyre and take up full time MD role in such a small company in the JK group.

(vaibhavjain87) #53

He resigned from JK Tyres in January 2016 (he was a Deputy MD there), and was appointed MD of JKAgri in May 2018. Surely, resignation from JK Tyres wasn’t because he wanted to take up full time MD role in JK Agri, but it was for JK Fenner.
Moreover, he got INR 15 cr from JK Tyre for FY16 (however, INR 13.35 cr as commission). This sounds brilliant for such a profit making company. Fixed is low, commission is high.
For JK Fenner (in FY17), his fixed was INR 4 cr and a commission of INR 2.7 cr. JK Fenner had a PAT of INR 57 cr in FY17.

Coming to JK Agri, his fixed is INR 4.5 cr for a PAT in FY18 of INR 12 cr.

He directly holds very less number of shares in the company, but other members of Singhania family and indirect holding through Florence Investech, Bengal and Assam company, Hari Shankar Singhania Holding Pvt Limited is huge. In any case, I would be in favour of him taking higher commission based on profits and higher # shares, rather than such a high fixed component and various perquisites.

By the way, can someone please shed light on what Companies Act caps on the remuneration of MDs? I can see that it’s 5% of profits, hence not able to digest this news.

(Abhishek Basumallick) #54

It is 5% of net profit and total director remuneration cannot be more than 11% in total. To go beyond this level, exceptional approval from the government is required. (I don’t know which authority provides the approval)