Mar 31, 2023
The Directors have pleasure to present their 36th Annual Report and the audited Annual Accounts for the year ended 31st March 2023.
STANDALONE AND CONSOLIDATD FINANCIAL HIGHLIGHTS:
PERFORMANCE REVIEW
Your Companyâs performance during the year as compared with that during the previous year is summarized below:
(In Rs. Lakhs) |
|||||
S. |
Particulars |
Standalone |
Consolidated |
||
No. |
March 31, 2023 |
March 31, 2022 |
March 31, 2023 |
March 31, 2022 |
|
1 |
Revenue from operations |
1,00,056.43 |
91500.02 |
1,07,035.53 |
96,998.16 |
2 |
Profit before finance cost, depreciation and tax expense |
29,694.08 |
23,840.59 |
30,663.06 |
24,381.05 |
3 |
Finance Cost |
18.20 |
12.10 |
18.84 |
12.74 |
4 |
Profit before depreciation and tax expense |
29,675.88 |
23,828.49 |
30,644.22 |
24,368.31 |
5 |
Depreciation |
1,950.45 |
2,010.45 |
2,054.78 |
2,093.12 |
6 |
Profit before exceptional items and tax |
27,725.43 |
21,818.04 |
28,589.44 |
22,275.19 |
7 |
Exceptional items |
- |
- |
- |
- |
8 |
Profit before Tax Expense |
27,725.43 |
21,818.04 |
28,589.44 |
22,275.19 |
9 |
Tax Expense |
1020.98 |
927.73 |
1,324.95 |
995.51 |
10 |
Profit after Tax Expense |
26,704.45 |
20,890.31 |
27,264.49 |
21,279.68 |
11 |
Non-controlling interests |
- |
- |
91.94 |
34.49 |
12 |
Profit after tax expense after non-controlling interests |
26,704.45 |
20,890.31 |
27,172.55 |
21,245.19 |
13 |
Add: Surplus at the beginning of the year |
1,25,384.96 |
1,20,453.42 |
1,27,701.64 |
1,22,380.04 |
14 |
Total Available for appropriation Appropriations |
1,52,089.41 |
1,41,343.73 |
1,54,874.19 |
1,43,625.23 |
15 |
Dividend including taxes |
2,332.87 |
2332.87 |
2,297.85 |
2297.69 |
16 |
Transfer to general reserve |
1000.00 |
1000.00 |
1000.00 |
1000.00 |
17 |
Utilized for Buyback |
14,219.30 |
12589.82 |
14,219.30 |
12589.82 |
18 |
Transferred to Capital Redemption Reserve |
48.00 |
40.15 |
48.00 |
40.15 |
19 |
Amortization of Interest on loan to employee trust |
- |
- |
- |
- |
20 |
Others |
(0.48) |
(4.07) |
(0.48) |
(4.07) |
Total Appropriations |
17,599.69 |
15,958.77 |
17,564.68 |
15,923.59 |
|
21 |
Surplus carried to Balance Sheet |
1,34,489.72 |
1,25,384.96 |
1,37,309.51 |
1,27,701.64 |
Operations:
During the year under review, the Company has achieved revenue of H 1,00,056.43 Lakhs and net profit of H 26,704.45 Lakhs on Standalone basis. During the same period, the Consolidated Revenue was H 1,07,035.53 Lakhs and net profit after noncontrolling interests was H 27,172.55 Lakhs.
Indian Agriculture Sector
In FY23, Indiaâs agricultural product exports demonstrated a noteworthy growth of 9%, reaching a total value of US$ 26.3 billion compared to the preceding fiscal year. This was primarily driven by substantial increases in the shipment of rice, fruits, vegetables, livestock, and dairy products. This exceeded the target set by the Agricultural and Processed Food Products Exports Development Authority (APEDA), surpassing US$ 23.56 billion. Fresh and processed fruits and vegetables exhibited an impressive export growth of 18.8%, amounting to US$ 3.8 billion, while the export of cereals, preparations, and processed food products experienced a notable ascent of 20% to US$ 4.3 billion in the fiscal year 2022-23.
India has upheld its position as the worldâs leading rice exporter, with a substantial 45% share in the global grain trade. This is underscored by competitive pricing, a near-record high rice supply, and an impressive 15% YoY increase in rice exports, reaching a record US$ 11.1 billion.
Key Growth Drivers
⢠PM Kisan Scheme - The central sector PM Kisan scheme supplements the financial needs of land-holding farmers by providing a yearly benefit of H 6,000 directly to their bank accounts through the Direct Benefit Transfer (DBT) system. In the payment cycle of April-July 2022-23, around 11.3 crore farmers benefited from the scheme, offering total assistance of over H 2 million to numerous farmers in a span of three years.
⢠Agriculture Infrastructure Fund (AIF) - Established for the period 2020-21 to 2032-33, the AIF facilitates financing for agricultural infrastructure. With an allocation of H 1 lakh crore for 2020-21 to 2025-26, the fund also provides interest subvention and credit guarantee assistance until 2032-33. Since its inception, the AIF has sanctioned H 13,681 crore for more than 18,133 agricultural infrastructure projects across the country.
⢠PM Fasal Bima Yojana (PMFBY) - The worldâs largest crop insurance scheme by farmer enrolments, the PMFBY records an average of 5.5 crore applications annually. Farmers only bear a minimal financial burden, contributing 1.5 percent and 2 percent of the total premium for the Rabi and Kharif seasons respectively, while the majority of the premium cost is covered by the Central and State Governments. Over the past six years, farmers paid a premium of H 25,186 crore and received claims totaling H 1.2 lakh crore.
⢠Agricultural credit target - The Agricultural Credit Target is set to rise to H 20 lakh Crores, focusing on fisheries, animal husbandry, and dairying. This entails introducing the PM Matsya Sampada Yojana with an H 6000 crore outlay to enhance value chain efficiency in these sectors.
⢠Digital ecosystem upscaling - The development of an open-source, interoperable public infrastructure for agriculture aims to improve access to credit, insurance, market intelligence, and support for the growth of agri-tech industries and startups. An allocated budget of H 2,516 Crore is earmarked for the computerisation of 63,000 Primary Agriculture Credit Societies, enhancing operational efficiency and business diversification.
⢠Budget growth - Over the past decade (fiscal year 2013 to fiscal year 2023), the budget has shown a Compound Annual Growth Rate (CAGR) of 11%. Notably, the allocation towards the agriculture sector and rural development has exhibited a CAGR of approximately 12%. This underscores the governmentâs dedicated investment in promoting agriculture sector growth and enhancing living standards in rural areas.
Indian Seed Industry
The Indian seed industry has demonstrated substantial growth, expanding to a value of USD 6.3 billion in 2022 and anticipated to reach USD 12.7 billion by 2028, driven by a notable CAGR of 12.43% between 2023 and 2028. This growth trajectory is attributed to a confluence of factors, including the countryâs burgeoning population and the presence of fertile arable lands across diverse agro-climatic zones. The strategic partnership between public and private sectors, coupled with the commercialisation of agriculture, has further propelled the industry.
Pioneering seed breeders are harnessing advanced digital technologies to empower farmers in managing challenges posed by pests, climate variations, and environmental factors, thus bolstering overall market expansion. The integration of cutting-edge tools such as data science, artificial intelligence, and advanced phenomics within the agricultural sector presents promising opportunities for the seed industry. The Government of Indiaâs proactive role through initiatives like the Integrated Scheme for Oilseeds, Pulses, Oil Palm, and Maize (ISOPOM) and the Rashtriya Krishi Vikas Yojana has fostered an environment of support and growth for both farmers and seed breeders. Complemented by increased research and development investments in crop production, supply chain management, and quality assurance by research institutes, these endeavours are poised to catalyse the Indian seed industryâs trajectory.
Vibrant R&D Division
Kaveri Seeds has solidified its position as a frontrunner in the market by releasing promising agricultural products every year, effectively addressing the aspirations of the farming community while meeting market demands. The noteworthy stability in new product contributions to the volume in FY 2022-2023 can be
largely attributed to the Companyâs robust R&D network focused on essential crops. Employing a team of over 165 professionals, including 100 dedicated scientists, the Company consistently endeavours to deliver high-yielding hybrids. Leveraging state-of-the-art biotechnology tools alongside classical plant breeding methods, its advanced laboratory fosters innovation. Additionally, its germplasm bank holds a valuable repository enhancing plant varieties suitable for Indian agricultural conditions.
Research and Development (R&D)
Agricultural science is experiencing rapid advancement through novel and refined biotechnology tools, nurturing innovations and pioneering product development. The Companyâs advanced R&D proficiencies facilitate the conception, enhancement, and distribution of cutting-edge products to the market. Throughout its operational history, the Company has elevated both product yield and seed quality, concurrently achieving heightened seed resilience against biotic and abiotic pressures.
Enhancing crop productivity and stress resilience is pivotal for sustainable food production and crop advancement. In pursuit of this objective, Kaveri Seeds adopts essential biotechnological methodologies encompassing marker-assisted breeding (MB), and their harmonious amalgamation with traditional breeding practices. The Company is also planning to work on phonemics to design plant ideotypes that will be resilient to the effects of climate change.
Kaveri Seedsâ resilient foundation in R&D has facilitated the innovation of novel hybrids across various crops including cotton, maize, rice, millets and vegetables. The Company has a consistent history of introducing fresh products, coupled with a robust lineup of offerings meticulously designed to cater to the requirements of the farming community. Leveraging its adeptness in risk management, the Company adeptly navigate through prevailing market fluctuations.
Technical innovations
The Company aims to enhance its returns while expediting the rate of innovation. With a strong commitment to innovating advanced products, it has forged collaborations with both domestic and international institutions to augment its research capabilities.
Plant variety protection
In order to safeguard the Companyâs products, several hybrids that were created underwent registration under the provisions of the Protection of Plant Varieties and Farmers Rights Act (PPVFRA). A total of 274 applications have been submitted for the safeguarding of plant varieties in accordance with the provisions outlined in the aforementioned Act.
Germplasm
The germplasm bank of the Company facilitates the strategic formulation and advancement of well-suited crop varieties and
hybrids, tailored to the preferences of both farmers and consumers. Through a robust germplasm foundation across various crops and productive collaborations, the Company effectively acquire cutting-edge technology and germplasm resources, expanding its genetic base for enhanced disease and pest tolerance.
Central Varietal Release Committee
More than 27 hybrids were released and notified by the Central Varietal Release Committee (CVRC), Government of India, and more are to be released soon.
The Board of Directors, at their meeting held on 08th August 2022, declared an Interim Dividend @ 200% on the paid-up Equity Share Capital (i.e., H 4/- per equity share of the face value of H 2/- per share) for the financial year 31st March 2023, which was paid to the shareholders in September 2022.
Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has approved and adopted the Dividend Distribution Policy and the same is available on the Companyâs website viz. https:// www.kaveriseeds.in/wp-content/uploads/2023/08/Dividend-Distribution-Policy.pdf and is also provided as annexure.
TRANSFER OF AMOUNT TO RESERVES
The Company has transferred H 10.00 Crores to the general reserve for the financial year ended 31st March 2023 under the provisions of Companies Act, 2013 and Rules there under.
In line with the practice of returning free cash flow to the shareholders, during the financial year 2022-23 the Company has completed its Fifth buy-back of 23,99,831 Equity Shares at an average price of H 522.40/- per Equity Share for an aggregate consideration of H 125.37 Crores. The offer size of the Buyback was 9.68% of the aggregate paid up equity share capital and free reserves of the Company and represented 4.11% of the total issued and paid up equity share capital of the Company. The buyback process was completed on 27th December, 2022 and the shares were extinguished on 29th December 2022.
During the year, there was change in the Paid-up Share Capital of the Company.
The paid up Equity Share Capital of the Company as on 31st March 2023 was H 1118.44 Lakhs (5,59,21,829 Equity Shares of H 2/- each). During the year under review, the Company has bought back 23,99,831 equity shares of the Company.
STATUTORY AUDITORS & AUDITORSâ REPORT
The Statutory Auditors report is annexed to this annual report. There are no adverse remarks on disclosure by the statutory auditors in their report. They have not reported any incident of fraud to the Audit Committee of the Company during the year under review.
Pursuant to Section 139(2) of the Companies Act, 2013, read with Companies (Audit and Auditors) Rules, 2014, the Company at its 35th Annual General Meeting (AGM) held on 29th September 2022, had re-appointed M/s. M. Bhaskar Rao & Co., Chartered Accountants as Statutory Auditors to hold office from the conclusion of 35th AGM until the conclusion of 40th AGM of the Company, subject to ratification by shareholders every year, as may be applicable. However, the Ministry of Corporate Affairs (MCA) vide its notification dated 7th May 2018 has omitted the requirement under first proviso to section 139 of the Companies Act, 2013 and rule 3(7) of the Companies (Audit and Auditors) Rules, 2014, regarding ratification of appointment of statutory auditors by shareholders at every subsequent AGM.
Consequently, M/s. M. Bhaskar Rao & Co., Chartered Accountants, continues to be the Statutory Auditors of the Company till the conclusion of 40th AGM, as approved by shareholders at 35th AGM.
The Board of Directors of the Company has re-appointed M/s. M. Anandam & Co., Chartered Accountants as Internal Auditors to conduct Internal Audit of the Company for the financial year ended 31st March 2023. The Internal Audit reports are being reviewed on quarterly basis by the Audit Committee of the Company.
Pursuant to the provisions of Section 148 (1) of the Act read with the Companies (Cost Records and Audit) Rules, 2014, your Company is not required to maintain cost records and accordingly no such audit is required to be conducted.
The Company has 4 subsidiaries as of March 31, 2023. There was no material change in the nature of the business carried on by the subsidiaries. As per the provisions of Section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the subsidiary Companies is prepared in Form AOC-1 and is attached to the Financial Statements of the Company.
In accordance with the provisions of Section 136 of the Companies Act, 2013, the consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries are available on the website of the Company https://www.kaveriseeds.in/investors/subsidiaries-financials/
The Company will make available the Annual Accounts of the subsidiary companies and the related information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any member at the Registered Office of the Company and that of the respective subsidiary companies.
During the Financial year, no Company has become or ceased to be Companyâs Subsidiary, Joint Venture or Associate Company.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH THE RELATED PARTIES
No material related party transactions, during the year under review, with the Promoters, Directors or Key Managerial Personnel falls under the scope of Section 188(1) of the Companies Act 2013. The information on transactions for the year under review were on armâs length basis and in the ordinary course of business with the related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form No. AOC-2 and the same forms part of this report. The company has developed a Related Party Transactions framework through standard operation procedures for the purpose of identification and monitoring of such transactions. The related party transactions policy is available at https://www.kaveriseeds.in/wp-content/ uploads/2023/08/RELATED-PARTY-TRANSACTION.pdf
Pursuant to sub-section 3(a) of Section 134 and sub Section (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014 the Annual Return as at 31st March 2023 can be accessed at Companyâs website on https://www.kaveriseeds.in/wp-content/ uploads/2023/08/MGT-9.pdf
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors have appointed M/s. L.D.Reddy & Co., a firm of Company Secretaries in Practice (C.P.No.3752) as Secretarial Auditors to conduct Secretarial Audit of the Company for the financial year ended 31st March 2023. The Secretarial Audit Report issued by M/s. L.D.Reddy & Co, Practicing Company Secretaries in Form MR-3 is annexed to this Boardâs Report as Annexure - A.
The Secretarial auditors Report does not contain any qualifications, reservation or adverse remarks.
ANNUAL SECRETARIAL COMPLIANCE REPORT
The Company has undertaken an audit for the financial year 2022-23 for all applicable compliances as per Securities and Exchange Board
of India Regulations and Circulars/ Guidelines issued thereunder. The Annual Secretarial Compliance Report issued by Mr. L. Dhanamjay Reddy, Practising Company Secretary, Hyderabad has been submitted to the Stock Exchanges within the specified time and same is formed part of a Corporate Governance.
BOARDâS RESPONSE ON AUDITORâS QUALIFICATION, RESERVATION OR ADVERSE REMARKS OR DISCLAIMER MADE
There are no qualifications, reservation or adverse remarks made by the statutory auditors in their report or by the Practicing Company Secretary in the Secretarial Audit Report for the year ended 31st March 2023. During the year, there were no instances of frauds reported by auditors under Section 143(12) of the Companies Act, 2013.
The Audit Committee of the Board of Directors consists Mr. K. Purushotham (Chairman), Dr. S.Raghuvardhan Reddy, Mrs. M. Chaya Ratan and Mr. C. Mithunchand, members of the Committee. The Board has accepted all the recommendations made by the Audit Committee during the year. Further details can be seen in the chapter on Corporate Governance report.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee presently consists of the following Directors namely Mr. K. Purushotham, Chairman, Dr. S. Raghuvardhan Reddy and Mrs. M. Chaya Ratan as Members.
CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the relevant provisions of Section 133 of the Companies Act, 2013 and the Ind As-110 on consolidated financial statements, read with the Accounting Standard AS-23 on Accounting for Investments in Associates, your Directors have pleasure in attaching the consolidated financial statements for the financial year ended March 31, 2023, which forms part of the Annual Report. The company has placed separately, the audited accounts of its subsidiaries on its website https://www.kaveriseeds.in/investors/ subsidiaries-financials/ in compliance with the provisions of Section 136 of the Companies Act, 2013.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has laid down a set of standards which enables implementation of internal financial controls across the organization and ensure that the same are adequate and operating effectively. The Board periodically reviews the findings and recommendations of the statutory auditors, internal & secretarial auditors and suggests corrective actions whenever necessary. The Audit Committee of the Board of Directors is also actively reviewing the adequacy and effectiveness of the internal control
systems and suggests improvements to strengthen the same. The Audit Committee of the Board of Directors, Statutory Auditors and Finance heads are periodically apprised of the internal audit findings and corrective actions are taken.
The Internal Audit team prepares annual audit plans based on risk assessment and conducts extensive reviews covering financial, operational and compliance controls. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management is presented to the Audit Committee of the Board.
The Audit Committee of the Board monitors the performance of the Internal Audit team on a quarterly basis through a review of audit plans, audit findings and speed of issue resolution through follow-ups. Each year, there are at least four meetings in which the audit committee reviews internal audit findings assurance and advisory function, responsible for evaluating and improving the effectiveness of risk management, control and governance processes. The internal audit team helps to enhance and protect organizational value by providing risk-based objective assurance, advice, and insight.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The internal financial controls (IFC) framework at Kaveri Seeds encompasses internal controls over financial reporting (ICOFR) as well as operational controls that have been put in place across all key business processes of the Company. The internal controls are designed to facilitate and support the achievement of the Companyâs business objectives and such controls do enable the Company to adapt to changing and operating environment, to mitigate risks to acceptable levels and to support right decision making and good governance. Details in respect of adequacy of internal financial controls with reference to the financial statements are briefly iterated below:
a. The Company maintains all its major records in ERP System.
b. The Company has appointed internal auditors to examine the internal controls, whether the workflow of the organisation is being done through the approved policies of the Company. In every quarter, during the approval of financial statements, internal auditors present the internal audit report and the management comments on the internal audit observations; and
c. The Board of Directors of the Company has adopted various policies such as Related Party Transactions Policy, Whistle Blower Policy, Policy to Determine Material Subsidiaries, Corporate Social Responsibility Policy, Dissemination of Material Events Policy, Documents Preservation Policy, Sexual Harassment Policy, Code of Conduct under Insider Trading Regulations, Code of Conduct for Senior Management, Nomination and Remuneration Policy, Board Diversity Policy,
Dividend Distribution Policy, Risk Management Policy and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
INDIAN ACCOUNTING STANDARDS - IFRS CONVERGE STANDARDS
The Ministry of Corporate Affairs vide its notification dated 16th February 2015 notified under Section 133 of the Companies Act 2013 read with Companies (Indian Accounting Standards) Rules, 2015. In pursuance of the said notification, your Company has prepared the financial statements to comply in all material respects, in accordance with the applicability of Indian Accounting Standards.
DIRECTORSâ RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to the Directorsâ Responsibility Statement, the Board of Directors of the Company hereby confirms:
i) that the applicable accounting standards have been followed in the preparation of the Annual Accounts.
ii) that the Directors have selected such Accounting policies and consistently applied judgments and estimates that 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 31st March 2023 and of the profit of the Company for that period.
iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.
iv) that the Directors have prepared the annual accounts on a going concern basis.
v) that the Directors have laid down Internal Financial Controls to be followed by the Company and that the financial controls were adequate and were operating effectively and
vi) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
Your Company is managed and controlled by a Board comprising an optimum blend of Executive and Non-Executive Directors. As on date the Board of Directors comprises of Ten (10) Directors
consisting of Five Executive Directors including the Chairman & Managing Director and Five Independent Directors including the Women Independent Director.
The composition of the Board is in conformity with Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the relevant provisions of the Companies Act, 2013. The Directors possess requisite qualifications and experience in general corporate management, strategy, finance, administration and other allied fields which enable them to contribute effectively to the Company in their capacity as Directors of the Company.
Pursuant to the provisions of Section 203 of the Companies Act, 2013 the Key Managerial Personnel (KMP) of the Company as on March 31, 2023 are: Mr. G.V.Bhaskar Rao, Chairman & Managing Director, Mrs. G.Vanaja Devi, Dr. Gundavaram Pawan, Mr. C. Vamsheedhar and Mr. C. Mithunchand, Whole time Directors, Mr. K.V. Chalapathi Reddy, Chief Financial Officer & Mrs. V.Sreelatha, Company Secretary.
Changes in Directors
Appointment of Dr. Gundavaram Pawan, (DIN : 00768751) as Whole time Director of the Company w.e.f.8th August 2022 approved by the shareholders at their 35th AGM held on 29th September 2022.
Director(s) retiring by rotation:
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companyâs Articles of Association, Mr. C. Vamsheedhar ((DIN: 01458939), retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.
Declaration from Independent Directors
None of the Directors of the Company are disqualified under the provisions of the Companies Act, 2013 (âActâ) or under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All Independent Directors have provided confirmations as contemplated under Section 149(7) of the Act. As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a certificate from the Company Secretary in practice, that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority, forms part of Corporate Governance Report as Annexure.
During the year under review, the non-executive independent directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committees of the Company.
Registration of Independent Directors in Independent Directors Databank
All the Independent Directors of the Company have been registered and are members of Independent Directors Databank maintained by Indian Institute of Corporate Affairs.
The details pertaining to the composition of the Board and its Committees are included in the Corporate Governance Report, which is a part of this report.
MEETING OF INDEPENDENT DIRECTORS
A separate meeting of the Independent Directors was held under the Chairmanship of Mr. K. Purushotham, Independent Director on 24th January 2023, inter-alia, to discuss evaluation of the performance of Non- Independent Directors, the Board as a whole, evaluation of the performance of the Chairman, taking into account the views of the Executive and Non-Executive Directors and the evaluation of the quality, content and timelines of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties. The Independent Directors expressed satisfaction with the overall performance of the Directors and the Board as a whole.
Familiarization Programme for Independent Directors
The details of the familiarization programme for the Independent Directors is reported in the Report on Corporate Governance, which is attached to the Boardâs Report.
NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE
During the year under review five Board Meetings and Four Audit Committee Meetings were convened and held. The dates on which the Board Meetings were held on 23rd May 2022, 08th August 2022, 27th October 2022, 14th November 2022 and 24th January 2023. The dates on which the Audit Committee Meetings were held on 23rd May 2022, 08th August 2022, 14th November 2022 and 24th January 2023. The details of attendance of meetings held during the Financial Year 2022-23 forms part of the Corporate Governance Report. The time gap between the said meetings were within the period prescribed under the provisions of the Companies Act, 2013 and the SEBI guidelines thereof.
CHANGE IN THE NATURE OF BUSINESS, IF ANY:
There was no change in the nature of business of the company or any of its subsidiaries.
Your Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013. Accordingly, no disclosure or reporting is required in respect of details relating to deposits.
Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the guidance Note on Board Evaluation issued by the SEBI on 5th January 2017, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its committees.
The performance of the Board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning etc.,
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings etc.,
In a separate meeting of independent directors, performance of non-independent directors, the chairman of the company and the board as a whole was evaluated, taking into account the views of executive directors and non-executive directors.
The Board and the nomination and remuneration committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and valuable inputs in meetings etc.,
In the board meeting that followed the meeting of the independent directors and meeting of nomination and remuneration committee, the performance of the board, its committees, and individual directors was also discussed. The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.
The Company recognizes and embraces the importance of a diverse board in its success. The Board has adopted the Board Diversity Policy which sets out the approach to diversify the Board of Directors. The Board Diversity Policy is available on the Companyâs website https://www.kaveriseeds.in/wp-content/ uploads/2021/02/Policy-on-Board-Diversity.pdf
APPOINTMENT OF DIRECTORS AND REMUNERATION POLICY
The assessment and appointment of board members is based on a combination of criterion that includes ethics, personal and professional stature, domain expertise, gender diversity and specific qualifications required for the position. A potential board member is also assessed on the basis of independent criteria defined in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (LODR) Regulations. In accordance with Section 178(3) of the Companies Act, 2013, Regulation 19(4) of SEBI (LODR) Regulations and on recommendations of the companyâs Nomination and Remuneration Committee, the Board adopted a remuneration policy for directors, KMP, senior management and other employees. The Policy is placed on the Companyâs website: https://www.kaveriseeds.in/images/pdf/images/Nomination-and-Remuneration-Policy.pdf and further details are set out in the Corporate Governance Report forming part of this annual report.
A detailed Report on Corporate Governance systems and practices of the company is given in a separate section forming part of this annual report.
The Certificate issued by M/s. L.D.Reddy & Co., Practicing Company Secretaries, Hyderabad, with regard to compliance with the conditions of Corporate Governance is attached to the chapter on Corporate Governance.
MANAGEMENT DISCUSSION AND ANALYSIS:
Managementâs Discussion and Analysis report for the year under review, as stipulated under Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established Corporate Social Responsibility (CSR) committee composed of Mr. G.V.Bhaskar Rao as Chairman, Mrs. G.Vanaja Devi and Dr. S. Raghuvardhan Reddy as members. The Committee is responsible for formulating and monitoring the CSR Policy of the Company, the Report on CSR Activities forms part of this Report as âAnnexure - Bâ.
The Company has incorporated a separate company in the name of âKaveri Bhaskar Rao Charitable Trustâ under Section 8 of the Companies Act, 2013 to undertake CSR and other charitable activities. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which is a part of this report. https://www.kaveriseeds.in/wp-content/uploads/2021/09/ CSR-Policy.pdf
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The Information on conservation of energy, technology absorption, foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, forms part of this report as Annexure C.
The Company grants share-based benefits to eligible employees with a view to attracting and retaining the best talent, encouraging employees to align individual performances with Company objectives, and promoting increased participation by them in the growth of the Company.
Kaveri Seed Employee Stock Option Plan - 2018 (ESOP Plan)
On 19th July 2018, pursuant to the approval by the shareholders by way of Postal Ballot, the Board/Nomination and Remuneration Committee has been authorized to introduce, offer, issue and grant the share-based incentives to eligible employees of the Company and its subsidiaries under the ESOP Plan. The Kaveri Employee Stock Option Plan 2018 (ESOP Plan) to be implemented through the Kaveri Employees Trust (Trust) with an objective of enabling the company to attract and retain talented human resources by offering them the opportunity to acquire a continuing equity interest in the Company, which will reflect in their efforts to sustain the growth and profitability of the Company.
The ESOP Plan involves acquisition of shares, not exceeding 30,00,000 equity shares, from the secondary market through Barclays Wealth Trustees (India) Private Limited as Trustees of Kaveri Employees Trust for implementation and administration.
As on 31st March 2023 a total of 8,73,491 Equity Share (Eight Lakhs Seventy Three Thousand Four Hundred Ninty One Only) options were available in the Trust account.
The Nomination and Remuneration Committee (NRC), is empowered to formulate detailed terms and conditions of the ESOP Plan 2018, and supervise the same. The specific employees to whom the Options would be granted and their eligibility criteria would be determined by the Nomination and Remuneration Committee at its sole discretion. Further, the Nomination and Remuneration Committee is empowered to determine the eligible employees of subsidiary companies, whether existing or future, whose employees will be entitled to stock options under this Scheme.
The Nomination and Remuneration Committee has granted 6,29,516 options @ 315/-. per option to the eligible employees of the Company on 31.03.2020 under ESOP Plan 2018. During the year 2000 options were exercised. In this grant aggregating the total 6000 options exercised as on 31.03.2023.
Further, the Nomination and Remuneration Committee at their meeting held on 25.03.2021 has granted 2,49,975 options @ H 450/-per option to the eligible employees of the Company during the year under ESOP Plan 2018. There are no outstanding options for the year ended 31.03.2023.
Both the granted options would vest on or after 1 (one) year from the respective date of grant(s) but not later than 4 (four) years from the date of grant of such Options or any other terms as decided by the Nomination and Remuneration Committee.
The ESOP Plan is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014, as amended from time to time, and there has been no material change to the plan during the fiscal. The Disclosure required to be made under Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014 is available on the Companyâs website at https://www.kaveriseeds. in/wp-content/uploads/2023/08/ESOPS.pdf
STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL
Details in respect of remuneration paid to employees as required under Section 197 (12) of the Companies Act, 2013 , read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended forms part of this report. In terms of Section 136 of the Companies Act, 2013 the same is open for inspection at the Registered Office of the Company. Copies of this statement may be obtained by the members by writing to the Company Secretary at the Registered Office of the Company. The ratio of the remuneration of each Director to the median employeeâs remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are enclosed in Annexure - D and forms part of this Report.
Affirmation that the remuneration is as per the remuneration policy of the Company.
In compliance with the provisions of the Companies Act, 2013 and SEBI Listing Regulations, the Board, on the recommendation of the Nomination and Remuneration/Compensation Committee approved the Policy for Selection, Appointment of Directors, KMPs and Senior Management persons. The said Policy provides a framework to ensure that suitable and efficient succession plans are in place for appointment of Directors on the Board and other management members. The Policy also provides for selection and remuneration criteria for the appointment of Directors and senior management persons. The Company affirms that the remuneration is as per the remuneration policy of the Company.
All properties and insurable interests of the Company have been fully insured.
DIRECTORS AND OFFICERS INSURANCE (âD&Oâ)
As per the requirements of Regulation 25(10) of the SEBI Listing Regulations, the Company has taken Directors and Officers Insurance (âD&Oâ) for all the Directors and Key managerial Personnel of the Company.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
The âBusiness Responsibility and Sustainability Reportâ (BRSR) of your Company for the year ended 31.03.2023 forms part of the Annual Report as required under Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is available as a separate section in this Annual Report.
The Board has adopted a suitable Policy for Dividend Distribution as per the Regulation 43A of the SEBI (LODR) Regulations 2015. The policy is stated in the Annual Report and has been uploaded on the Companyâs website and can be accessed at https:// www.kaveriseeds.in/wp-content/uploads/2023/08/Dividend-Distribution-Policy.pdf
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments in the business operations of the Company from the financial year ended March 31, 2023 to the date of signing of the Directorâs Report. There has been no change in the nature of business of the Company.
PARTICULARS OF LOANS, GURANTEES OR INVESTMENTS
The Company makes investments or extends advances to its subsidiaries for business purposes. The details of investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements provided in this annual report.
The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable to the Company.
VIGIL MECHANISM /WHISTLE BLOWER POLICY:
The Board of Directors has adopted the Whistle Blower Policy, which is in compliance with Section 177(10) of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations 2015 to report genuine concerns or grievances. The Audit Committee Chairperson is the chief ombudsperson. The policy also provides access to the Chairperson of the Audit Committee for raising
concerns. The Whistle Blower Policy has been posted on the website of the company. https://www.kaveriseeds.in/wp-content/ uploads/2023/08/WHISTLE-BLOWER-POLICY.pdf
Pursuant to the requirement of SEBI (LODR) Regulations 2015, the Company has a risk management committee of the Board consisting of Director Mr. Dr. S.Raghuvardhan Reddy, Independent Director and Chairman of the Committee Mr. C.Vamsheedhar and Mr. C. Mithunchand as members of the Committee. The Company through its Risk Management Policy identified the various risks and challenges, internally as well as externally and takes appropriate measures with timely actions to mitigate them and also recommend the Board about risk assessment and minimization procedures. The Committee is monitoring and reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis, which forms part of this report and the Policy has been posted on the website of the company viz., https://www.kaveriseeds.in/images/ pdf/images/Risk-Management-Policy_final.pdf
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS/REGULATORS OR TRIBUNALS
There are no significant and material orders passed by the Regulators/Courts or tribunals that would impact the going concern status of the company and its future operations.
No application was made or any proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.
The Companyâs shares are listed on BSE Limited and the National Stock Exchange of India Limited.
TRANSFER OF UN-PAID AND UN-CLAIMED AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of the Companies Act, 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended, declared dividends which remained unpaid or unclaimed for a period of seven years have been transferred by the company to the IEPF, which has been established by the Central Government.
The above-referred rules also mandate transfer of shares on which dividend are unpaid or unclaimed for a period of seven consecutive years to IEPF. The Company has issued individual notices to the shareholders whose equity shares are liable to be transferred to IEPF on due dates, advising them to claim their dividend within the stipulated time.
The Company is conscious of the importance of environmentally clean and safe operations. The Companyâs policy requires conduct of operations in such a manner that ensures safety of all concerned, compliance to environmental regulations and preservation of natural resources.
Your Company has constituted an internal committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules there under. The Company has a policy on prevention of Sexual Harassment at work place with a mechanism for lodging complaints. The Company regularly conducts necessary awareness/workshops programmes for its employees. The policy provides protection against sexual harassment of women at workplace and ensures prevention and redressal of such complaints. During the year under review, no complaints have been received under the policy. The said policy is available on the website of the company. https://www.kaveriseeds. in/images/pdf/images/sexual-harrasment-policy.pdf
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS
The Company complies with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.
Board of Directors have adopted and oversee the administration of the Companyâs Code of Business Conduct and Ethics (the âCode of Conductâ), which applies to all Directors, Officers and Employees of Kaveri Seed Company Limited and its subsidiaries. The Code of Conduct reflects the Companyâs commitment to doing business with integrity and in full compliance with the law and provides a general roadmap for all the Directors, Officers and Employees to follow as they perform their day to-day responsibilities with the highest ethical standards. The Code of Conduct also ensures that all members of Kaveri perform their duties in compliance with applicable laws and in a manner that is respectful of each other and the Companyâs relationships with its customers, suppliers and shareholders, as well as the communities and regulatory bodies where the Company does business.
In compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (âthe PIT Regulationsâ) on prevention of insider trading, your Company has revised its Code of Conduct for regulating, monitoring and reporting of trading by Designated Persons, in line with the recent amendments brought by SEBI in the PIT Regulations. The said Code lays down guidelines, which advise Designated Persons on the procedures to be followed and disclosures to be made in dealing with the shares of the Company and cautions them on consequences of non-compliances. Your Company has also updated its Code of practices and procedures for fair disclosures of unpublished price sensitive information by including a policy for determination of legitimate purposes.
INITIATIVES FOR STAKEHOLDER RELATIONSHIP
The Company has an effective Investor Relations Program (âIRâ) through which the Company continuously interacts with the investor community across various channels (Periodic Earnings Calls and group meetings). The Company ensures that critical information about the Company is available to all the investors by submitting all such information to the Stock Exchanges and also uploading the information on the Companyâs website under the Investors section. The Company strives to adopt emerging best practices in IR and building a relationship of mutual understanding with investors and analysts.
The great task of Product development, Supply chain, Marketing etc. was done at Kaveri Seeds successfully. We work as team by aligning objectives with organizational strategy to drive business out comes successfully and personal motivation.
The above success was possible, we strive to on board the right people, with right skills and knowledge, at right time. The talent of individual employees utilized effectively managing it with strategies and initiatives driven to achieve business goals.
Today Kaveri Seedâs strength of 1270 member strong work force drives our growth effectively and efficiently.
Objective oriented Trainings under taken:
Besides organizing several developmental skills, we organize programmes to improve manage behavioral and communication
skills of our employees. All new recruits undergo a detailed induction program including orientation about all the policies of the Company including HR Policies and Practices of the company. The Induction program is continuously improved with the help of employees feedback.
All the Employees go through functional trainings specific to their role of job in the company. Employees also undergo safety training as required by their role. Every employee in the company undergoes on-the-job training customized to the requirements of that specific employee. We encourage our Scientists to attend the Seminars, Symposia and Work Shops to enrich their knowledge and participate in the interactive sessions. We also invite Sr. Consultants and experts in the field of Genetics & Plant Breeding, Biotechnology, Agronomy, Seed Technology etc. to conduct knowledge sessions. These sessions will give motivation to our scientists to develop promising products with futuristic needs to meet the aspirations of the farmers, so as to increase the farm income and to improve their lives.
Every quarter in all the departments âUtkrishta Puraskarâ award were given to the best performer . The aim is incentivizing employees to focus on and to achieve sustainable objectives.
The Company has formulated and adopted the Employee Stock Option Plan with a view to motivate the employees of the Company to continue extending their participation to the Company and enable the Company to achieve long term financial growth. The administration and implementation of the plan has been entrusted to the Compensation Committee of the Company.
The Company enjoyed cordial relations with its employees at all levels. Your Directors record their appreciation of the support and co-operation of all employees and counts on them for the accelerated growth of the Company.
The Directors acknowledge and would like to place on record the commitment and dedication on the part of the employees of your Company for their continued efforts in achieving good results. Your Company is grateful to the Distributors, Dealers, Customers and farming community for their support and encouragement. Your Directors thank the Banks, Financial Institutions, Government Departments and Shareholders and look forward to having the same support in all our future endeavors.
Mar 31, 2018
Dear Members,
Kaveri Seed Company Limited
The Directors have pleasure to present their 31st Annual Report and the audited Annual Accounts for the Year ended 31st March 2018.
Performance Review
Your Companyâs performance during the year as compared with that during the previous year is summarized below:
(Rs. in Lakhs)
S.No. |
Particulars |
Standalone |
Consolidated |
||
March 31, 2018 |
March 31, 2017 |
March 31, 2018 |
March 31, 2017 |
||
1 |
Revenue from operations |
77,240.30 |
66,989.10 |
81,937.48 |
70,635.76 |
2 |
Profit before finance cost, depreciation and tax expense |
24,170.11 |
17,222.57 |
24,548.73 |
17,396.90 |
3 |
Finance Cost |
39.96 |
12.27 |
60.41 |
24.14 |
4 |
Profit before depreciation and tax expense |
24,130.15 |
17,210.30 |
24,488.32 |
17,372.76 |
5 |
Depreciation |
2,335.19 |
2,849.21 |
2,507.73 |
3,023.67 |
6 |
Profit before exceptional items and tax |
21,794.96 |
14,361.09 |
21,980.59 |
14,349.09 |
7 |
Exceptional items |
(5,923.80) |
(5,923.80) |
||
8 |
Profit before Tax Expense |
21,794.96 |
8,437.29 |
21,980.59 |
8,425.29 |
9 |
Tax Expense |
760.75 |
590.17 |
839.54 |
696.34 |
10 |
Profit after Tax Expense |
21,034.21 |
7,847.12 |
21,141.05 |
7,728.95 |
11 |
Non-controlling interests |
17.27 |
(54.39) |
||
12 |
Profit after tax expense after non-controlling interests |
21,034.21 |
7,847.12 |
21,123.78 |
7,783.34 |
13 |
Add: Surplus at the beginning of the year |
84,230.30 |
76,383.17 |
83,258.89 |
75,475.55 |
14 |
Total Available for appropriation |
1,05,264.51 |
84,230.30 |
1,04,382.67 |
83,258.89 |
Appropriations |
|||||
15 |
Dividend including taxes |
2,386.41 |
2,386.41 |
||
16 |
Transfer to general reserve |
1,000.00 |
1,000.00 |
||
17 |
Utilized for Buyback |
5,326.85 |
5,326.85 |
||
18 |
Transferred to Capital Redemption Reserve |
59.26 |
59.26 |
||
Total Appropriations |
8,772.51 |
- |
8,772.51 |
- |
|
19 |
Surplus carried to Balance Sheet |
96,492.00 |
84,230.30 |
95,610.16 |
83,258.89 |
State of the Companyâs Affairs
During the year, the Company has achieved revenue of Rs.77,240.30 lakhs and net profit of Rs.21,034.21 Lakhs on a standalone basis. During the same period, the consolidated revenue was Rs.81,937.48 Lakhs and net profit after noncontrolling interests was Rs.21,123.78 Lakhs.
Future Prospects & Out Look:
The agricultural sector is the backbone of the Indian economy. Despite two consecutive favourable monsoons as well as the Indian Meteorological Department (IMD) forecast for adequate rainfall in CY 2018, rain in the year appears to be unpredictable. Agriculture in India will benefit from a higher scale of investments in agri-infrastructure, owing to the Governmentâs focus on doubling farmersâ income by 2022. As a result, the agricultural input space, including commercial seeds, will continue to expand at a robust pace in the years to come.
Growth in the Indian seed market will be facilitated by the development of modern retail channels along with the entry of large national and multi-national entities. Further, increased number of subsidies and greater awareness around the use of high-yielding hybrid variety seeds will drive growth in the market. Comparatively higher year-on-year seed replacement rate (SRR) has led farmers to consistently prefer quality seeds to obtain high yields.
While the demand for food in India is on the rise, the area of cultivable land in the country remains stagnated. Thus, quality seeds have increasingly become key to enhance agricultural output and productivity.
Kaveri Seeds is focusing its research efforts in field and vegetable crops to tailor promising hybrids and varieties that are suitable for cultivation under different environmental situations and resilient pan-India climatic conditions. Our research collaborations with several national and international organisations help us design products that suit the needs of the market, while also being tolerant to biotic and abiotic stress factors. We are also equipped with modern R&D facilities in the advance science of biotechnology, plant breeding, quality control and seed technology innovations. We will focus our efforts to enhance sales across multiple crops and continue to improve our presence in the market, expanding our footprint into new geographies.
Research and Development
There is a lot of opportunity for unbounded growth in the seed sector; and to utilise the same, your Company is constantly focusing its R&D infrastructure development on frontier research in science together with the use of advanced biotechnological tools in conventional plant breeding of field and vegetable crops. We have also formulated an integrated programme for molecular breeding as a part of reinforced R&D efforts that are centred on high-yielding hybrid technology. Our strong in-house R&D base has been recognised by the Government of Indiaâs Department of Scientific and Industrial Research (DSIR) since 2001.
Your Company is one of Indiaâs fastest-growing seed companies with an expansive portfolio, large network of distributors and dealers and a wide pan-India customer base. Our research efforts are focused on designing and developing suitable hybrids and varieties. Our research innovations are deeply rooted in our understanding of crops and the needs of growers. Brand salience of different products represents the hallmark of Kaveri Seeds.
Your Companyâs research efforts continue to show the way forward. Diverse research collaborations enable us to pursue segment-wise product development as per the requirements of farmers, the market and consumer preferences. Our products are planned bearing in mind biotic and abiotic stresses, along with the looming threat of climate change. Seed innovations at Kaveri Seeds have helped farmers augment yields significantly, earning us goodwill among both farmers and distributors. The Companyâs premier hybrid varieties of BT cotton, maize and rice (including selection rice) are at the forefront of the seed market.
Your Companyâs relentless efforts to sustain product quality through innovation, commitment and dedication have gained the trust of growers. Our processes are differentiated; and we are well-equipped with best-in-class production zones. We have a state-of-the-art seed technology lab at Pamulaparthy plant. We possess seven processing plants at various strategic locations to process and supply the seed to the market well in advance.
Quality seed is the order of the day. It is your Companyâs honest endeavour to inculcate the highest level of quality management across functional domains. We will devote promotional efforts towards promising products in the growth stage. We will add more sales locations to improve our visibility in the market, in tandem with our strategy to explore new geographies. We are receiving positive reviews from our hybrids in various countries. In the years to come, we expect to expand our export presence in the focused countries.
Dividend
The Board of Directors at their meeting held on 8th August 2017 declared an Interim Dividend @ 150% on the paid-up Equity Share Capital i.e., Rs.3.00/- per equity share for the financial year 31st March 2018 and same was paid to the shareholders.
Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has approved and adopted the Dividend Distribution Policy and the same is available on the Companyâs website viz. www.kaveriseeds.in
Buyback of Equity Shares
During the year 29,62,962 Equity Shares were bought back at a price of Rs.675/- per Equity Share for an aggregate consideration of Rs.200.00 crores. The offer size of the Buyback was 19.96% of the aggregate paid up equity share capital and free reserves of the Company for the year ended 31.03.2017 and represented 4.29% of the total issued and paid up equity share capital of the Company. The buyback process was completed and the shares were extinguished on 3rd August 2017.
Transfer of Amount to Reserve
The Company has transferred Rs.10.00 crores to the general reserve for the financial year ended 31st March 2018 under the provisions of Companies Act, 2013 and Rules there under.
Statutory Auditors & Auditorsâ Report
The statutory auditors report is annexed to this annual report. There are no adverse remarks on disclosure by the statutory auditors in their report. They have not reported any incident of fraud to the Audit Committee of the Company during the year under review. Pursuant to Section 139(2) of the Companies Act, 2013, read with Companies (Audit and Auditors) Rules, 2014, the Company at its 30th Annual General Meeting (AGM) held on 25th September 2017, had appointed M/s. M. Bhaskar Rao & Co., Chartered Accountants as Statutory Auditors to hold office from the conclusion of 30th AGM until the conclusion of 35th AGM of the Company, subject to ratification by shareholders every year, as may be applicable. However, the Ministry of Corporate Affairs (MCA) vide its notification dated 7th May 2018 has omitted the requirement under first proviso to section 139 of the Companies Act, 2013 and rule 3(7) of the Companies (Audit and Auditors) Rules, 2014, regarding ratification of appointment of statutory auditors by shareholders at every subsequent AGM.
Consequently, M/s. M. Bhaskar Rao & Co., Chartered Accountants, continues to be the Statutory Auditors of the Company till the conclusion of 35th AGM, as approved by shareholders at 30th AGM held on 25th September 2017.
Internal Auditors
The Board of Directors of the Company have appointed M/s. M. Anandam & Co., Chartered Accountants as Internal Auditors to conduct Internal Audit of the Company for the financial year ended 31st March 2019. The Internal Audit reports are being reviewed by the Audit Committee of the Company.
Secretarial Auditors Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) rules, 2014, the Board of Directors have appointed M/s. L.D.Reddy & Co., a firm of Company Secretaries in Practice (C.P.No.3725) as Secretarial Auditors to conduct Secretarial Audit of the Company for the financial year ended 31st March 2018. The Secretarial Audit Report issued by M/s. L.D.Reddy & Co, Practicing Company Secretaries in Form MR-3 is annexed to this Boardâs Report as Annexure - B.
The Secretarial auditors Report does not contain any qualifications, reservation or adverse remarks.
Boardâs response on Auditorâs qualification, reservation or adverse remarks or disclaimer made:
There are no qualifications, reservation or adverse remarks made by the statutory auditors in their report or by the Practicing Company Secretary in the Secretarial Audit Report for the year ended 31st March 2018. During the year, there were no instances of frauds reported by auditors under Section 143(12) of the Companies Act, 2013.
Audit Committee
The Audit Committee of the Board of Directors consists Mr. K. Purushotham (Chairman), Mr. P. Varaprasad Rao, Dr. S. Raghuvardhan Reddy and Mr. C. Mithunchand. Dr. S. Raghuvardhan Reddy was appointed as member of Audit Committee on 24th May 2018. The Board has accepted all recommendations made by the audit committee during the year. Further details can be seen in the chapter on Corporate Governance report.
Subsidiary Companies
The Company has 5 subsidiaries as of March 31, 2018. There was no material change in the nature of the business carried on by the subsidiaries. As per the provisions of Section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the subsidiary Companies is prepared in Form AOC-1 and is attached to the Financial Statements of the Company.
In accordance with the provisions of the Companies Act, 2013, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are being made available on the website of the Company and are not attached with the Annual Accounts of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any member at the Registered Office of the Company and that of the respective subsidiary companies.
Names of the Company which have become Companyâs Subsidiary during the year
During the financial year M/s. Genomix Agri Genetics Private Limited has been incorporated on 16th October 2017 as 100% Wholly Owned Subsidiary of the Company.
Consolidated Financial Statements
In compliance with the relevant provisions of Section 133 of the Companies Act, 2013 and the Accounting Standards AS-21 and AS-27 on consolidated financial statements, read with the Accounting Standard AS-23 on Accounting for Investments in Associates, your Directors have pleasure in attaching the consolidated financial statements for the financial year ended March 31, 2018, which forms part of the Annual Report. The Company has placed separately, the audited accounts of its subsidiaries on its website www.kaveriseeds.in in compliance with the provisions of Section 136 of the Companies Act, 2013.
Internal Control Systems and Their Adequacy
The Company has laid down set of standards which enables to implement internal financial control across the organization and ensure that the same are adequate and operating effectively. The Board periodically reviews the findings and recommendations of the statutory and internal auditors and suggests corrective actions whenever necessary. The Audit Committee of the Board of Directors is also actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Audit Committee of the Board of Directors, Statutory Auditors and Finance Heads are periodically apprised of the internal audit findings and corrective actions taken.
The Internal Audit team prepares annual audit plans based on risk assessment and conducts extensive reviews covering financial, operational and compliance controls. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board.
The Audit Committee of the Board monitors the performance of Internal Audit team on a periodic basis through review of audit plans, audit findings and speed of issue resolution through follow-ups. Each year, there are at least four meetings in which the audit committee reviews internal audit findings assurance and advisory function, responsible for evaluating and improving the effectiveness of risk management, control and governance processes. The internal audit team helps to enhance and protect organizational value by providing risk-based objective assurance, advice, and insight.
Adquacy of Internal Financial Controls With Reference to the Financial Statements
The internal financial controls (IFC) framework at Kaveri Seeds encompasses internal controls over financial reporting (ICOFR) as well as operational controls that have been put in place across all key business processes of the Company. The internal controls are designed to facilitate and support the achievement of the Companyâs business objectives and such controls do enable the Company to adapt to changing and operating environment, to mitigate risks to acceptable levels and to support right decision making and good governance. Details in respect of adequacy of internal financial controls with reference to the financial statements are briefly iterated below:
a. The Company maintains all its major records in ERP System.
b. The Company has appointed internal auditors to examine the internal controls, whether the workflow of the organisation is being done through the approved policies of the Company. In every quarter, during the approval of financial statements, internal auditors present the internal audit report and the management comments on the internal audit observations; and
c. The Board of Directors of the Company has adopted various policies such as Related Party Transactions Policy, Whistle Blower Policy, Policy to Determine Material Subsidiaries, Corporate Social Responsibility Policy, Dissemination of Material Events Policy, Documents Preservation Policy, Sexual Harassment Policy, Code of Conduct under Insider Trading Regulations, Code of Conduct for Senior Management, Nomination and Remuneration Policy, Board Diversity Policy, Dividend Distribution Policy and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
Indian Accounting Standards - Ifrs Converge Standards
The Ministry of Corporate Affairs vide its notification dated 16th February 2015 notified under Section 133 of the Companies Act 2013 read with Companies (Indian Accounting Standards) Rules, 2015. In pursuance of the said notification your Company has prepared the financial statements to comply in all material respects in accordance with the applicability of Indian Accounting Standards.
Directorsâ Responsibility Statement
Pursuant to the requirement under Section 134(3)(C) of the Companies Act, 2013, with respect to the Directorsâ Responsibility Statement, the Board of Directors of the Company hereby confirms:
i) that the applicable accounting standards have been followed in the preparation of the Annual Accounts.
ii) that the Directors have selected such Accounting policies and applied consistently and judgments and estimates made when required that 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 31st March 2018 and of the profit of the Company for that period.
iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv) that the Directors have prepared the annual accounts on a going concern basis.
v) that the Directors have laid down Internal Financial Controls were in place to be followed by the Company and that the financial controls were adequate and were operating effectively and
vi) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Directors
Changes in Directors and Key Managerial Personnel: Appointment of Independent Director Mrs. M. Chaya Ratan (DIN: 08085687) was appointed as an Additional and Independent Director with effect from 24th May 2018 by the Board of Directors at their meeting held on 24th May 2018 under section 161 of the Companies Act, 2013. The appointment is subject to the approval of the shareholders at the ensuing Annual General Meeting.
A notice under Section 160 of the Companies Act, 2013 is received from a member of the Company proposing candidature of Mrs. M. Chaya Ratan. The Company has received: i) consent in writing to act as a Director in Form DIR-2 pursuant to Rule 8 of the Companies (Appointment & Qualification of Directors) Rules, 2014; ii) Intimation in Form DIR-8 pursuant to terms of the Companies (Appointment & Qualification of Directors) Rules, 2014, from Mrs. M. Chaya Ratan to the effect that she is not disqualified as per Section 164(2) of the Companies Act, 2013; and iii) a declaration to the effect that she meets the criteria of independence as provided under Section 149 of the Companies Act, 2013.
Resignation of Director
Mr. M. Srikanth Reddy, tendered the resignation from the office of Independent Director of the Company due to his pre occupations with effect from 24th May 2018. The Board members of the Company profound thanks to Mr. M. Srikanth Reddy for valuable services and significant contribution to the organization in different aspects of the Company is highly appreciable the services rendered by him and the Board be instructed to convey its gratitude for the services rendered during his tenure.
The Board has expressed deep condolence for sudden demise of Dr. Yeshwant Laxman Nene, Independent Director of the Company and noted that his valuable service rendered to the Company is highly appreciated and deeply grieved for losing an eminent Director of the Company.
Resignation of Chief Operating Officer
Mr. G.S.Satish, tendered resignation as the Chief Operating Officer of the Company effective from 30th November 2017 due to his personal reasons.
In terms of Section 203 of the Companies Act 2013, the following are the Key Managerial Personnel (KMP) of the Company:
Mr. G.V. Bhaskar Rao, Chairman & MD Mrs. G. Vanaja Devi, Whole time Director Mr. C. Vamsheedhar, Whole time Director Mr. C. Mithunchand, Whole time Director Mr. G.Vijay Kumar, Chief Financial Officer Mr. V.R.S. Murti, Company Secretary
Director(s) retiring by rotation
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companyâs Articles of Association, Mr. C. Mithunchand (DIN :00764906), retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
There have been no other changes in the key managerial personnel during the year.
Committees of the Board
The details pertaining to the re-constitution of all Board Committees are included in the Corporate Governance Report, which is a part of this report.
Declaration from Independent Directors
The Independent Directors have submitted the declaration of independence, as required pursuant to section 149 (7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub section (6) of Section 149.
Meeting of Independent Directors
A separate meeting of the Independent Directors was held under the Chairmanship of Mr. K. Purushotham, Independent Director on 7th February 2018, inter-alia, to discuss evaluation of the performance of Non- Independent Directors, the Board as a whole, evaluation of the performance of the Chairman, taking into account the views of the Executive and NonExecutive Directors and the evaluation of the quality, content and timelines of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties. The Independent Directors expressed satisfaction with the overall performance of the Directors and the Board as a whole.
Familiarization Programme for Independent Directors
The details of the familiarization programme for the Independent Directors is reported in the Report on Corporate Governance, which is attached to the Boardâs Report.
Number of Meetings of the Board
Four meeting of the Board were held during the year. The dates on which the Board meetings were held are 24th May 2017, 8th August 2017, 27th October 2017 and 7th February 2018. The details of attendance of Board meetings and Committee meetings held during the Financial Year 2017-18 forms part of the Corporate Governance Report.
Change in the Nature of Business, If Any
There has been no change in the nature of the business of the Company.
Public Deposits
Your Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the guidance Note on Board Evaluation issued by the SEBI on 5th January 2017, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its committees.
The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning etc.,
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings etc.,
In a separate meeting of independent directors, performance of non-independent directors, the chairman of the Company and the board as whole was evaluated, taking into account the views of executive directors and non-executive directors.
The Board and the nomination and remuneration committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc.,
In the board meeting that followed the meeting of the independent directors and meeting of nomination and remuneration committee, the performance of the board, its committees, and individual directors was also discussed. The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.
Board Diversity
The Company recognizes and embraces the importance of a diverse board in its success. The Board has adopted the Board Diversity Policy which sets out the approach to diversify of the Board of Directors. The Board Diversity Policy is available on the Companyâs website www.kaveriseeds.in
Nomination and Remuneration Committee
Your Company has a Nomination and Remuneration Committee and further details are set out in the Corporate Governance Report forming part of the Directorsâ Report. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Persons (KMP), Senior Management and their remuneration. The Nomination and Remuneration Policy as adopted by the Board is placed on the Companyâs website: www.kaveriseeds.in
Corporate Governance
A detailed Report on Corporate Governance prepared in substantial compliance with the provisions of Schedule V (C) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as a separate section forming part of this report.
The Certificate issued by M/s. L.D.Reddy & Co., Practicing Company Secretaries, Hyderabad, with regard to compliance of conditions of Corporate Governance as stipulated under Schedule V (E) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the Report on Corporate Governance.
Management Discussion and Analysis
Managementâs Discussion and analysis Report for the year under review, as stipulated under Regulation 34(2)(e)of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report.
Particulars of Contracts or Arrangements With Related Parties
All transactions entered with Related Parties for the year under review were on armâs length basis and in the ordinary course of business. There are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. The Company has developed a Related Party Transactions frame work through standard operation procedures for the purpose of identification and monitoring of such transactions.
All Related Party Transactions are placed before the Audit Committee as also to be Board for approval. The particulars of contracts or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 disclosed in Form No. AOC - 2 and is set out as Annexure and forms part of this report.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT - 9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure - A and forms on integral part of this report.
Corporate Social Responsibility
In compliance with Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established Corporate Social Responsibility (CSR) committee composed of Mr. G.V.Bhaskar Rao as Chairman, Mrs. G.Vanaja Devi and Mr. P. Varaprasad Rao as members. The Committee is responsible for formulating and monitoring the CSR Policy of the Company, the Report on CSR Activities forms part of this Report as âAnnexure - C.â
The Company has incorporated a separate company in the name of âKaveri Bhaskar Rao Charitable Trustâ under Section 8 of the Companies Act, 2013 to undertake CSR and other charitable activities. For other details regarding the CSR Committee, please refer to the Corporate governance Report, which is a part of this report. The policy is available on www.kaveriseeds.in
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:
The Information on conservation of energy, technology absorption, foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, forms part of this report as Annexure D.
Statement of Particulars of Appointment and Remuneration of Managerial Personnel
Details in respect of remuneration paid to employees as required under Section 197 (12) of the Companies Act, 2013 , read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended forms part of this report. In terms of Section 136 of the Companies Act, 2013 the same is open for inspection at the Registered Office of the Company. Copies of this statement may be obtained by the members by writing to the Company Secretary at the Registered Office of the Company. The ratio of the remuneration of each Director to the median employeeâs remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are enclosed in Annexure - E and forms part of this Report.
Insurance
All properties and insurable interests of the Company have been fully insured.
Business Responsibility Report
A detailed Business Responsibility Report in terms of the provisions of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is available as a separate section in this Annual Report.
Dividend Distribution Policy
Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, requires that the top 500 listed Companies based on the market capitalization to formulate Dividend Distribution Policy. In compliance with the said requirement, the Company has formulated the Dividend Distribution Policy, the details of which are available on the Companyâs website at www.kaveriseeds.in
Material Changes and Commitments
There are no material changes and commitments in the business operations of the Company from the financial year ended March 31, 2018 to the date of signing of the Directorâs Report.
Particulars of Loans, Gurantees or Investments by Company
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements.
Whistle Blower Policy
The Board of Directors has adopted the Whistle Blower Policy, which is in compliance with Section 177(10) of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations 2015 to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the Company. (www.kaveriseeds.in)
Risk Management Policy
In todayâs economic environment, Risk Management is a very important part of business. The main aim of risk management is to identify, monitor and take precautionary measures in respect of the events that may pose risk for the business. Your Companyâs risk management is embedded in the business process. The Company has established Enterprise Risk Management process to manage risks with the objective of maximizing shareholders value. Your Company has adequate internal control systems and procedures to combat risks. The risk management procedures are reviewed by the Audit Committee and Board of Directors from time to time.
Significant and Material Orders Passed by the Regulators or Courts
There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.
Transfer of Un-Paid and Un-Claimed Dividend Amount to IEPF
The dividends which remain un-paid/un-claimed for a period of seven years, have been transferred on due dates by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.
Pursuant to Section 124 of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âthe Rulesâ) mandates that companies shall apart from transfer of dividend that has remained unclaimed for a period of seven years from the unpaid dividend account to the Investor Education and Protection Fund (IEPF), also transfer the corresponding shares with respect to the dividend, which has not been claimed for seven consecutive years or more to IEPF. Accordingly, the dividends that remain unclaimed for seven years and also the corresponding shares would be transferred to IEPF account on due dates. The details are provided in the Corporate Governance Report forming part of the Annual Report.
Environment and Safety
The Company is conscious of the importance of environmentally clean and safe operations. The Companyâs policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances environmental regulations and preservation of natural resources.
Human Resources
Kaveri consistently focuses on bringing talent on-board. The Company provides its people with relevant training to drive its long-term growth. The Company trains employees on several developmental programmes to enhance their managerial and behavioural skills. The Company is strengthening employee involvement through communication meetings.
The Company organises regular training programmes for its field staffs to impart them knowledge on crop production, quality control, agronomy, and plant protection, among others. New employees go through formal induction programme and given interactive sessions with their line managers. Besides, specialised training programmes are conducted for R&D and marketing staff, as well as other departments. The Company has introduced a reward programme to recognise top performers from various departments.
The leadership team of the Company has wealth of experience in seed and crop production industry. It has a team of more than 50 dedicated scientists comprising breeders, agronomists, biotechnologists and seed technologists, along with dynamic sales and marketing professionals. Currently, the workforce includes over 883 members, who are driving the levers of growth.
Policy on Sexual Harassment
Your Company has constituted an internal committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules there under. The Company has a policy on prevention of Sexual Harassment at work place with a mechanism of lodging complaints. The policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. During the year under review, no complaints have been received under the policy.
Share Capital
During the year, there was change in the Paid-up Share Capital of your Company due to Buy-back.
During the year under review the Company bought back an aggregate of 29,62,962 Equity Shares out of 69,055,095 Equity Shares from the Shareholders of the Company. After successful Completion of Buy-back the Paid-up Share Capital of the Company was decreased from 6,90,55,095 Equity Shares to 6,60,92,133 Equity Shares of Rs.2/- each.
Compliance With Secretarial Standards on Board and General Meetings
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
Industrial Relations
The Company enjoyed cordial relations with its employees at all levels. Your Directors record their appreciation of the support and co-operation of all employees and counts on them for the accelerated growth of the Company.
Acknowledgements
Your Directors place on record their sincere appreciation for the dedication, hard work and commitment of the employees at all levels and their significant contribution to your Companyâs growth. Your Company is grateful to the Distributors, Dealers, and Customers for their support and encouragement. Your Directors thank the Banks, Financial Institutions, Government Departments and Shareholders and look forward to having the same support in all our future endeavors.
By Order of the Board of Directors
For Kaveri Seed Company Limited
Sd/- Sd/-
Date: 24.05.2018 G.V. BHASKAR RAO G. VANAJA DEVI
Place: Secunderabad Managing Director Whole time Director
Mar 31, 2017
Dear Members,
Kaveri Seed Company Limited
The Directors have pleasure to present their 30th Annual Report and the audited Annual Accounts for the Year ended 31st March 2017.
FINANCIAL RESULTS:__Rs. in Lakhs
Particulars |
Year ended 31st March 2017 |
Year ended 31st March 2016 |
Total Income |
70424.00 |
72819.78 |
Profit before Depreciation |
11286.50 |
20234.00 |
Profit before Tax |
8437.29 |
17735.71 |
Profit After Tax |
7847.12 |
17227.96 |
Transfer to General Reserve |
- |
1000.00 |
PERFORMANCE REVIEW
A prolonged period of volatility was created in the market in 2015 following severe drought across large parts of India. However, a relatively better monsoon in 2016 enabled us to gain a favorable position, backed by several effective interventions. During the financial year, your Company posted a net profit after tax of Rs.7847.12 Lakhs as compared to previous year PAT of Rs.17227.96 Lakhs (54.45% decline). An overall deficit monsoon in the Kharif season 2016 resulted in the Company''s turnover of Rs.66989.10 Lakhs compared to Rs.71652.95 Lakhs for the previous year (decline 6.50%)
During the financial year, the consolidated revenue from operations of Rs.70635.76 Lakhs against the previous year Rs.74530.27 Lakhs (5.23% decline) and the Consolidated net profit of Rs.7783.34 Lakhs compared to previous year PAT of Rs.16788.41Lakhs (decline by 53.64%). As per the agreement with M/s. Mahyco Monsanto Biotech India Limited, during the financial year the company has made a provision of Rs.5923.80 Lakhs for payment of royalty against the short provided royalty in the previous years. In this regard, the issue has been settled in arbitration with the above said technical provider.
FUTURE PROSPECTS & OUT LOOK:
India''s economy is largely dependent on the country''s agricultural sector. After sluggish growth of agricultural production due to the consecutive weak monsoon, optimism has returned in FY 2016-17 with a good monsoon. It led to substantial recovery for the overall agri-input space.
According to Indian Meteorological Department (IMD), the Kharif season is likely to receive normal or above average level rainfall in FY 2017-18. Besides, the sector is likely to gain better momentum, owing to further investments in agricultural infrastructure such as irrigation facilities, warehousing and cold storages. The demand for food and agricultural products is anticipated to increase. It would invariably lead to a surge in production of commercial seeds.
India''s seed industry is projected to thrive in the coming days. Market growth will be facilitated by the growth of modern retail channels -- the foraying of prominent national and multinational brands. Moreover, amplifying demand due to increased subsidies and the Government''s focus on the use of high yielding varieties is likely to provide impetus to the overall seed market in India. Enhancement in seed replacement rate (SRR) and farmers opting for hybrid seeds are further expected to bolster the growth. On the one hand, the demand for crops is rising, whereas on the contrary, the area of arable land available in the country remains limited. Hence, today, quality seeds have become a crucial component to augment the agricultural production and productivity.
DIVIDEND:
Your Directors have not recommended dividend during the year 2016-17.
BUYBACK OF EQUITY SHARES:
The Board of Directors of the Company at its meeting held on 27th March 2017 has approved buyback up to 29,62,963 Equity Shares of Rs.2/- each, on a proportionate basis, at a price of Rs.675/- per equity share payable in cash for an aggregate consideration not exceeding Rs.200.00 Crores, excluding transaction costs viz. brokerage, applicable taxes such as securities transaction tax, service tax, stamp duty etc., by way of a Tender offer route through Stock Exchange Mechanism. This is in accordance with the provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Buy Back of Securitas) Regulations, 1998, and other applicable laws and regulations.
The buyback is a capital allocation decision taken with the objective of seeking a fairer valuation of the company''s stock while improving the company''s Return on Equity and increasing shareholder value in the longer term. The offer size of the buyback is within the prescribed limit of 25% of the aggregate of paid up capital and free reserves of the company and represents 4.29% of the total issued and paid up equity share capital of the company as on 31st March
2016.
RESEARCH AND DEVELOPMENT
Your Company has consistently invested in R&D initiatives to strengthen our portfolio. Moreover, realising the immense potential of biotechnology in fostering and fortifying traditional breeding, we have formulated an integrated programme of molecular breeding. We have developed research collaborations with several national and international institutions for product development in line with evolving consumer preferences; and in view of developing tolerance to biotic and abiotic stresses and the looming threat of climate change. Our relentless innovation has helped to enhance farmer yields enormously and earned us goodwill among farmers and distributors. Our multi-crop portfolio, superior R&D, brand salience, human capital efficiencies laid firm foundation for long-term success.
Your Company has equipped with the state - of - the - art Seed Technology laboratory at Pamulaparthy plants. Our supply chain management involves meticulous planning and execution of maintenance breeding of basic seed, seed production, field production of hybrid seed, transportation of inbound raw materials, plant processing of the products, sending it to storage, and delivering finished quality products to domestic and export markets. We are producing high-quality seeds with focus on time to market to enhance productivity of farms.
STATUTORY AUDITORS & AUDITORS'' REPORT
The statutory auditorâs report is annexed to this annual report. There are no adverse remarks on disclosure by the statutory auditors in their report. They have not reported any incident of fraud to the Audit Committee of the Company during the year under review. Pursuant to Section 139(2) of the Companies Act, 2013, read with Companies (Audit and Auditors) Rules, 2014, the Company at its 27th Annual General Meeting (AGM) held on 18th September 2014, had appointed M/s. P.R. Reddy & Co., Chartered Accountants as Statutory Auditors for a period of 3 years i.e. up to the conclusion of the 30th AGM to be held in the year 2017. The present term of M/s. P.R.Reddy & Co.,Statutory Auditors would expire at the conclusion of the ensuing AGM.
The Board of Directors of the Company has proposed the appointment of M/s. M. Bhaskar Rao & Co. Chartered Accountants (Firm Registration No. 000459S) are proposed to appoint as Statutory Auditors of the Company to hold office from the conclusion of 30th AGM until the conclusion of 35th AGM of the Company, based on the recommendation of Audit Committee. The Company has received written confirmation from M/s. M. Bhaskar Rao & Co., Chartered Accountants, confirming that they are eligible for appointment, if made, would be in conformity with the limits specified in the said section and subject to the approval of the Members of the Company.
INTERNAL AUDITORS
The Board of Directors of the Company has appointed a professional firm of M/s. M. Anandam & Co., Chartered Accountants to conduct internal audit of the Company for the financial year ended 31st March 2018. The Internal Audit Reports are being reviewed by the Audit Committee of the Company.
TRANSFER TO RESERVE:
The Company has not transferred any amount to general reserve out of the profits of the year.
SUBSIDIARY COMPANIES
The Company has 4 subsidiaries as of March 31, 2017. There was no material change in the nature of the business carried on by the subsidiaries. As per the provisions of Section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the subsidiary Companies is prepared in Form AOC-1 and is attached to the Financial Statements of the Company.
In accordance with the provisions of the Companies Act, 2013, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are being made available on the website of the Company and are not attached with the Annual Accounts of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any member at the Registered Office of the Company and that of the respective subsidiary companies.
CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the provisions of the Companies Act, 2013 and the Accounting Standards AS-21 and AS-27 on consolidated financial statements, read with the Accounting Standard AS-23 on Accounting for Investments in Associates, your Directors have pleasure in attaching the consolidated financial statements for the financial year ended March 31, 2017, which forms part of the Annual Report. The company has placed separately, the audited accounts of its subsidiaries on its website www.kaveriseeds.in in compliance with the provisions of Section 136 of the Companies Act, 2013.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has laid down set of standards which enables to implement internal financial control across the organization and ensure that the same are adequate and operating effectively. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Audit Committee of the Board of Directors, Statutory Auditors and Finance Heads are periodically apprised of the internal audit findings and corrective actions taken. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. To maintain its objectivity and independence, the internal Audit function reports to the Chairman of the Audit Committee.
INDIAN ACCOUNTING STANDARDS - IFRS CONVERGE STANDARDS
The Ministry of Corporate Affairs vide its notification dated 16th February 2015 notified under Section 133 of the Companies Act 2013 read with Companies (Indian Accounting Standards) Rules, 2015. In pursuance of the said notification your Company has prepared the financial statements to comply in all material respects in accordance with the applicability of Indian Accounting Standards.
INTERNAL FINANCIAL CONTROLS
The internal financial controls (IFC) framework at Kaveri Seeds encompasses internal controls over financial reporting (ICOFR) as well as operational controls that have been put in place across all key business processes of the Company. The internal controls are designed to facilitate and support the achievement of the Company''s business objectives and such controls do enable the Company to adapt to changing and operating environment, to mitigate risks to acceptable levels and to support sound decision making and good governance. Details in respect of adequacy of internal financial controls with reference to the financial statements are briefly iterated below:
a. The Company maintains all its major records in ERP System.
b. The Company has appointed internal auditors to examine the internal controls, whether the workflow of the organisation is being done through the approved policies of the Company. In every quarter, during the approval of financial statements, internal auditors present the internal audit report and the management comments on the internal audit observations; and
c. The Board of Directors of the Company has adopted various policies such as related party transactions policy, whistle blower policy, policy to determine material subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)(C) of the Companies Act, 2013 your
Directors confirm that:
i) The applicable accounting standards have been followed in the preparation of the Annual Accounts.
ii) Such Accounting policies have been selected and applied consistently and judgments and estimates made when required that 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 of the Company for that period.
iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.
iv) The Directors have prepared the annual accounts on a going concern basis.
v) Proper Internal Financial Controls were in place to be followed by the Company and that the financial controls were adequate and were operating effectively.
vi) Proper systems devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
DIRECTORS
Changes in Directors and Key Managerial Personnel:
During the year under review there was no change in the Directors or Key Managerial Personnel.
Appointment of Dr. G.Pawan, Director as Vice Chairman of the Company:
Dr. G. Pawan, Director has been appointed as Vice Chairman (Non-Executive) of the Company with effect from 24th May
2017. He has completed Doctor of Medicine (MD) from Illinois State University, Chicago, USA. His services are very much needed to assist the Chairman & Managing Director in strategic issues and long term business plans of the Company and to repose confidence with investors, employees and all other stake holders for further betterment of the company. His active involvement on strategic issues and long term business plans and operations of the company will surely bring in to the Company a new blend of flavor to promote to further level.
Director(s) retiring by rotation:
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company''s Articles of Association, Mr. C. Vamsheedhar, retires by rotation at the ensuring Annual General Meeting and being eligible, offers himself for re-appointment.
DECLARATION FROM INDEPENDENT DIRECTORS
The independent directors have submitted the declaration of independence, as required pursuant to section 149(6) &(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in subsection.
BOARD DIVERSITY
The Company recognizes and embraces the importance of a diverse board in its success. The Board has adopted the Board Diversity Policy which sets out the approach to diversify of the Board of Directors. The Board Diversity Policy is available on the Company''s website www.kaveriseeds.in
NOMINATION AND REMUNERATION COMMITTEE:
Your Company has a Nomination and Remuneration Committee and further details are set out in the Corporate Governance Report forming part of the Directors'' Report. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Persons (KMP), Senior Management and their remuneration. The Nomination and Remuneration Policy as adopted by the Board is placed on the Company''s website: www.kaveriseeds.in
CORPORATE GOVERNANCE:
A detailed Report on Corporate Governance prepared in substantial compliance with the provisions of Schedule V (C) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as a separate section forming part of this report.
The Certificate issued by M/s. P.R.Reddy & Co., Chartered Accountants, Hyderabad, with regard to compliance of conditions of Corporate Governance as stipulated under Schedule V (E) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the Report on Corporate Governance.
MANAGEMENT DISCUSSION AND ANALYSIS:
Management''s Discussion and analysis Report for the year under review, as stipulated under Regulation 34(2)(e)of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All transactions entered with Related Parties for the year under review were on arm''s length basis and in the ordinary course of business. There are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. The company has developed a Related Party Transactions frame work through standard operation procedures for the purpose of identification and monitoring of such transactions.
All Related Party Transactions are placed before the Audit Committee as also to be Board for approval. The particulars of contracts or arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 disclosed in Form No. AOC - 2 and is set out as Annexure and forms part of this report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT - 9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure - A and forms on integral part of this report.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed M/s. L.D.Reddy & Co., a firm of Company Secretaries in Practice (C.P.No.3725) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as
Annexure - B and forms on integral part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established Corporate Social Responsibility (CSR) committee composed of Mr. G.V.Bhaskar Rao as Chairman, Mrs. G.Vanaja Devi and Mr. M. Srikanth Reddy as members. The Committee is responsible for formulating and monitoring the CSR Policy of the Company, the Report on CSR Activities forms part of this Report as "Annexure - C.â
During the year, the Board has approved and incorporated a separate company in the name of ''Kaveri Bhaskar Rao Charitable Trust'' under Section 8 of the Companies Act, 2013 to undertake charitable activities under Corporate Social Responsibility policy and other related activities.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The Information on conservation of energy, technology absorption, foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, forms part of this report as Annexure D.
PARTICULARS OF EMPLOYEES:
Details in respect of remuneration paid to employees as required under Section 197 (12) of the Companies Act, 2013 , read with Rule5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended forms part of this report. In terms of Section 136 of the Companies Act, 2013 the same is open for inspection at the Registered Office of the Company. Copies of this statement may be obtained by the members by writing to the Company Secretary at the Registered Office of the Company. The ratio of the remuneration of each Director to the median employee''s remuneration and other details in terms of Section197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are enclosed in Annexure - E and forms part of this Report.
BUSINESS RESPONSIBILITY REPORT
A detailed Business Responsibility Report in terms of the provisions of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is available as a separate section in this Annual Report.
PERFORMANCE EVALUATION OF THE BOARD
Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its committees.
The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments in the business operations of the Company from the financial year ended March 31, 2017 to the date of signing of the Director''s Report.
NUMBER OF MEETINGS OF THE BOARD
The details of the number of meeting of the Board and Committees held during the Financial Year 2016-17 forms part of the Corporate Governance Report.
PARTICULARS OF LOANS, GURANTEES OR INVESTMENTS BY COMPANY
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements.
WHISTLE BLOWER POLICY
The Board of Directors has adopted the Whistle Blower Policy, which is in compliance with Section 177(10) of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations 2015 to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the company. (www.kaveriseeds.in)
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the company and its future operations.
SHARE CAPITAL
During the year, there was no change in the Paid-up Share Capital of your Company.
TRANSFER OF UN-PAID AND UN-CLAIMED AMOUNT TO IEPF
The dividends which remain un-paid/un-claimed for a period of seven years, have been transferred on due dates by the company to the Investor Education and Protection Fund (IEPF) established by the Central Government.
Pursuant to Section 124 of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (''the Rules'') mandates that companies shall apart from transfer of dividend that has remained unclaimed for a period of seven years from the unpaid dividend account to the Investor Education and Protection Fund (IEPF), also transfer the corresponding shares with respect to the dividend, which has not been claimed for seven consecutive years or more to IEPF. Accordingly, the dividends that remain unclaimed for seven years and also the corresponding shares would be transferred to IEPF account on due dates.
PUBLIC DEPOSITS:
Your Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.
RISK MANAGEMENT POLICY
In today''s economic environment, Risk Management is a very important part of business. The main aim of risk management is to identify, monitor and take precautionary measures in respect of the events that may pose risk for the business. Your Company''s risk management is embedded in the business process. The Company has established Enterprise Risk Management process to manage risks with the objective of maximizing shareholders value.
ENVIRONMENTAND SAFETY
The Company is conscious of the importance of environmentally clean and safe operations. The Company''s policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances environmental regulations and preservation of natural resources.
HUMAN RESOURCES
Kaveri consistently focuses on bringing talent on-board. The Company provides its people with relevant training to drive its long-term growth. The Company trains employees on several developmental programmes to enhance their managerial and behavioral skills. The Company is strengthening employee involvement through communication meetings.
The Company organizes regular training programmes for its field staffs to impart them knowledge on crop production, quality control, agronomy, and plant protection, among others. New employees go through formal induction programme and given interactive sessions with their line managers. Besides, specialised training programmes are conducted for R&D and marketing staff, as well as other departments. The Company has introduced a reward programme to recognise top performers from various departments.
The leadership team of the Company has wealth of experience in seed and crop production industry. It has a team of more than 50 dedicated scientists comprising breeders, agronomists, biotechnologists and seed technologists, along with dynamic sales and marketing professionals. Currently, the workforce includes over 793 members, who are driving the levers of growth.
POLICY ON SEXUAL HARASSMENT
Your Company has constituted an internal committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules there under. The Company has a policy on prevention of Sexual Harassment at work place with a mechanism of lodging complaints. The policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. During the year under review, no complaints have been received under the policy.
INDUSTRIAL RELATIONS:
The Company enjoyed cordial relations with its employees at all levels. Your Directors record their appreciation of the support and co-operation of all employees and counts on them for the accelerated growth of the Company.
ACKNOWLEDGEMENTS:
Your Directors place on record their sincere appreciation for the dedication, hard work and commitment of the employees at all levels and their significant contribution to your Company''s growth. Your Company is grateful to the Distributors, Dealers, and Customers for their support and encouragement. Your Directors thank the Banks, Financial Institutions, Government Departments and Shareholders and look forward to having the same support in all our future endeavors.
By Order of the Board of Directors
For KAVERI SEED COMPANY LIMITED
Sd/- Sd/-
Secunderabad, G.V.BHASKAR RAO G.VANAJA DEVI
24th May 2017 Managing Director Whole time Director
Mar 31, 2016
Dear Members,
Kaveri Seed Company Limited
The Directors have pleasure to present their 29th Annual Report and the audited Annual Accounts for the Year ended 31st March 2016.
FINANCIAL RESULTS
Rs, in Lakhs
Particulars |
Year ended 31 March 2016 |
Year ended 31 March 2015 |
Total Income Profit before Depreciation Profit before Tax Profit After Tax Transfer to General Reserve |
86,491.17 20,775.49 18,282.46 17,712.20 1,000.00 |
1,13,117.74 32,171.88 30,944.00 30,184.30 1,000.00 |
PERFORMANCE REVIEW
In the face of low precipitation of monsoon condition and the consequent to severe competitive pressures, your company strengthened its presence in the Seed Industry and improved its marketing reach. During the financial year, your Company posted a net profit after tax of Rs, 17,712.20 Lakhs as compared to previous year PAT of Rs, 30,184.30 Lakhs (41.31% decline). An overall deficit monsoon in the Kharif season 2015 resulted in the Company''s turnover of Rs, 84,895.50 Lakhs compared to Rs, 1,11,555.51 Lakhs for the previous year (decline 23.89%)
During the financial year, the consolidated revenue from operations of Rs, 89,277.90 Lakhs against the previous year Rs, 1,16,094.47 Lakhs (23.09% decline) and the Consolidated net profit of Rs, 17,268.46 Lakhs compared to previous year PAT of Rs, 30,095.77 Lakhs (decline by 42.62%).
FUTURE PROSPECTS& OUT LOOK
Agriculture plays an integral role in India''s economy. Over 58% of rural households depend on agriculture as their primary means of livelihood. As per estimates by the Central Statistics Office (CSO), the share of agriculture and allied sectors (including agriculture, livestock, forestry and fishery) was 15.35% of the Gross Value Added (GVA) during 2015-16 at 2011-12 prices. According to the Department of Industrial Policy and Promotion (DIPP), the Indian agricultural services and agricultural machinery sectors have cumulatively attracted Foreign Direct Investment (FDI) equity inflow of about US$ 2,261 million from April 2000 to December 2015. The country''s agriculture sector is expected to grow by 6% in FY 2016-17 if normal monsoon prevails during the June-September, 2016.
India''s seed industry is growing at a compound growth rate (CAGR) of 8.4% in volume terms from FY 2009 to FY 2015 to reach 3.5 million tonnes in consumption (Source: ICRA). The industry is expected to increase significantly, on account of improved seed replacement ratio (SRR) and rising adoption of high-yielding hybrid seeds. The Government of India''s favourable policy environment, aimed at supporting the usage of seeds through the National Seeds Plan and bolstering agricultural productivity through the National Food Security Mission (NFSM) also augur well for the industry.
DIVIDEND
During the financial year 2015-16, your Company has declared and paid an Interim Dividend of Rs, 2.50 per equity share. Your Directors have not recommended any final dividend for the financial year 2015-16. An amount of Rs, 10.00 Crores has been transferred to general reserve as per the provisions of Companies Act, 2013 and Rules there under.
RESEARCH AND DEVELOPMENT
The Company''s R&D comprises state-of-the-art Biotechnology lab, modern seed testing lab, company owned central research farm for generation and evaluation of breeding material and several satellite farms for crop specific research, seed production research (SPR), breeder seed production (BSP) and GOT. Our R&D is recognized by the Department of Scientific and Industrial Research (DSIR) and is manned by a competent team of qualified breeders and trained technicians. The Company has large collection of crop specific germ plasm, well documented and conserved in Gene Bank.
Your Company has equipped with state-of-the-art Seed testing laboratory at Pamulaparthy plant for quick and reliable method of testing of seed lots. Seed lots are thoroughly checked by the quality control department for genetic and physical purity, germination. The company has set quality benchmarks based on Indian Minimum Seed Certification Standards(IMSCS) to supply quality seed of premier hybrids for ensuring better seedling emergence.
CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the provisions of the Companies Act, 2013 and the Accounting Standards AS-21 and AS-27 on consolidated financial statements, read with the Accounting Standard AS-23 on Accounting for Investments in Associates, your Directors have pleasure in attaching the consolidated financial statements for the financial year ended March 31, 2016, which forms part of the Annual Report.
SUBSIDIARY COMPANIES
The Company has 4 subsidiaries as of 31 March 2016. There was no material change in the nature of the business carried on by the subsidiaries. As per the provisions of Section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the subsidiary Companies is prepared in Form AOC-1 and is attached to the Financial Statements of the Company.
In accordance with the provisions of the Companies Act, 2013, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are being made available on the website of the Company and are not attached with the Annual Accounts of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any member at the Registered Office of the Company and that of the respective subsidiary companies.
INDIAN ACCOUNTING STANDARDS -IFRS CONVERGE STANDARDS
The Ministry of Corporate Affairs vide its notification dated 16th February, 2015 has notified the Companies (Indian Accounting Standards) Rules, 2015. In pursuance of the said notification, the Company will adopt Indian Accounting Standards with effect from 01st April, 2016 with the comparatives for the period ending 31st March, 2015. The implementation of Indian Accounting Standards (IAS) is a major change process for which the Company has set up a dedicated team and is providing desired resources for its completion within the time frame. The impact of the change on adoption of said IAS is being assessed.
STATUTORY AUDITORS & AUDITORS'' REPORT
M/s. P.R.Reddy & Co. Chartered Accountants (Firm Registration No. 003268S) who are Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and recommended for re-appointment to audit the accounts of the Company for the financial year 2016-17. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s. P.R.Reddy & Co., that their appointment, if made, would be in conformity with the limits specified in the said section.
The statutory auditor''s report is annexed to this report. There are no specifications, reservations, adverse remarks on disclosure by the statutory auditors in their report. They have not reported any incident of fraud to the Audit Committee of the Company during the year under review.
INTERNAL AUDITORS
The Board of Directors of the Company has appointed a professional firm of M/s. M.Bhaskar Rao & Co., Chartered Accountants to conduct internal audit of the Company for the financial year ended 31 March 2017.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has laid down set of standards which enables to implement internal financial control across the organization and ensure that the same are adequate and operating effectively. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Audit Committee of the Board of Directors, Statutory Auditors and Finance Heads are periodically apprised of the internal audit findings and corrective actions taken. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. To maintain its objectivity and independence, the internal Audit function reports to the Chairman of the Audit Committee.
INTERNAL FINANCIAL CONTROLS
The internal financial controls (IFC) framework at Kaveri Seeds encompasses internal controls over financial reporting (ICOFR) as well as operational controls that have been put in place across all key business processes of the Company. The internal controls are designed to facilitate and support the achievement of the Company''s business objectives and such controls do enable the Company to adapt to changing and operating environment, to mitigate risks to acceptable levels and to support sound decision making and good governance.
Details in respect of adequacy of internal financial controls with reference to the financial statements are briefly iterated below:
a. The Company maintains all its major records in ERP System.
b. The Company has appointed internal auditors to examine the internal controls, whether the workflow of the organization is being done through the approved policies of the Company. In every quarter, during the approval of financial statements, internal auditors present the internal audit report and the management comments on the internal audit observations; and
c. The Board of Directors of the Company has adopted various policies such as related party transactions policy, whistle blower policy, policy to determine material subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(C) of the Companies Act, 2013 your Directors confirm that:
i) The applicable accounting standards have been followed in the preparation of the Annual Accounts.
ii) Such Accounting policies have been selected and applied consistently and judgments and estimates made when required that 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 of the Company for that period.
iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.
iv) The Directors have prepared the annual accounts on a going concern basis.
v) Proper Internal Financial Controls were in place to be followed by the Company and that the financial controls were adequate and were operating effectively.
vi) Proper systems devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
DIRECTORS
Changes in Directors and Key Managerial Personnel: Resignation of Director:
Mr. R. Venumanohar Rao, tendered resignation as the Director and Whole time Director of the Company effective from 01 April 2016. Your directors place on record their sincere appreciation of the valuable contribution made by him during his tenure as Director of the Company.
Re-appointment of MD & Whole Time Directors:
The re-appointments of Mr. G.V.Bhaskar Rao, Chairman cum Managing Director, Mrs. G.Vanaja Devi, Mr. C. Vamsheedhar and Mr. C.Mithunchand, Whole time Directors are being proposed at the ensuing Annual General Meeting.
Director(s) retiring by rotation:
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company''s Articles of Association, Dr. G. Pawan, retires by rotation at the ensuring Annual General Meeting and being eligible, offers himself for re-appointment.
Appointment of Chief Operating Officer:
Mr. G. S. Satish, has been appointed as Chief Operating Officer of the Company with effect from 11 May 2015. He is an Agriculture graduate from G B Pant University of Agriculture and Technology with Management Education from Indian Institute of Management, (IIM) Ahmadabad, having more than two decades of experience in Seeds and Crop protection industry, working with leading seeds and crop protection multi-national companies.
APPOINTMENT/RESIGNATION OF CHIEF FINANCIAL OFFICER AND KEY MANAGERIAL PERSONNEL:
Mr. K. V. Chalapathi Reddy tendered resignation as the Chief Financial Officer of the Company effective from 10th May 2016 due to his personal reasons. Your Directors place on record their sincere appreciation of the valuable contribution made by him during his tenure as CFO of the Company.
Mr. G. Vijaya Kumar has been appointed as Chief Financial Officer of the Company effective from 10 May 2016. Mr. G.Vijay Kumar, a Chartered Accountant & Cost Accountant and has around 21 years of experience and in the past associated with reputed companies in senior positions.
DECLARATION FROM INDEPENDENT DIRECTORS
The independent directors have submitted the declaration of independence, as required pursuant to section149(6) & (7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in subsection.
BOARD DIVERSITY
The Company recognizes and embraces the importance of a diverse board in its success. The Board has adopted the Board Diversity Policy which sets out the approach to diversify of the Board of Directors. The Board Diversity Policy is available on the Company''s website www.kaveriseeds.in
NOMINATION AND REMUNERATION COMMITTEE:
Your Company has a Nomination and Remuneration Committee and further details are set out in the Corporate Governance Report forming part of the Directors'' Report. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Persons (KMP), Senior Management and their remuneration. The Nomination and Remuneration Policy as adopted by the Board is placed on the Company''s website : www.kaveriseeds.in
CORPORATE GOVERNANCE:
A detailed Report on Corporate Governance prepared in substantial compliance with the provisions of Schedule V (C) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as a separate section forming part of this report.
The Certificate issued by M/s. P. R. Reddy & Co., Chartered Accountants, Hyderabad, with regard to compliance of conditions of Corporate Governance as stipulated under Schedule V (E) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the Report on Corporate Governance.
MANAGEMENT DISCUSSION AND ANALYSIS:
Management''s Discussion and analysis Report for the year under review, as stipulated under Regulation 34(2)(e)of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All transactions entered with Related Parties for the year under review were on arm''s length basis and in the ordinary course of business. There are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. The company has developed a Related Party Transactions frame work through standard operation procedures for the purpose of identification and monitoring of such transactions.
All Related Party Transactions are placed before the Audit Committee as also to be Board for approval. The particulars of contracts or arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 disclosed in Form No. AOC - 2 and is set out as Annexure and forms part of this report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT - 9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure - A and forms on integral part of this report
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed M/s. L.D.Reddy & Co., a firm of Company Secretaries in Practice (C.P.No.3725) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure - B and forms on integral part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established Corporate Social Responsibility (CSR) committee composed of Mr. G.V.Bhaskar Rao as Chairman, Mrs. G.Vanaja Devi and Mr. M. Srikanth Reddy as members. The Committee is responsible for formulating and monitoring the CSR Policy of the Company, the Report on CSR Activities forms part of this Report as Annexure - C.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The Information on conservation of energy, technology absorption, foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, forms part of this report as Annexure - D.
PARTICULARS OF EMPLOYEES
Details in respect of remuneration paid to employees as required under Section 197 (12) of the Companies Act, 2013, read with Rule5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended forms part of this report. In terms of Section 136 of the Companies Act, 2013 the same is open for inspection at the Registered Office of the Company. Copies of this statement may be obtained by the members by writing to the Company Secretary at the Registered Office of the Company. The ratio of the remuneration of each Director to the median employee''s remuneration and other details in terms of Section197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are enclosed in Annexure - E and forms part of this Report.
PERFORMANCE EVALUATION OF THE BOARD
Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its committees.
The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments in the business operations of the Company from the financial year ended March 31, 2016 to the date of signing of the Director''s Report.
NUMBER OF MEETINGS OF THE BOARD
The details of the number of meeting of the Board and Committees held during the Financial Year 2015-16 forms part of the Corporate Governance Report.
PARTICULARS OF LOANS, GURANTEES OR INVESTMENTS BY COMPANY
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements.
WHISTLE BLOWER POLICY
The Board of Directors has adopted the Whistle Blower Policy, which is in compliance with Section 177(10) of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations 2015 to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the company. (www.kaveriseeds.in)
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the company and its future operations.
SHARE CAPITAL
During the year, the Paid-up Share Capital of your Company has been increased by Rs, 138,110,190/- due to the allotment of 158900 Equity Shares of Rs, 2/- each on exercise of Stock Options by the eligible employees under Employees Stock Options Scheme.
TRANSFER OF UN-PAID AND UN-CLAIMED AMOUNT TO IEPF
The dividends which remain un-paid/un-claimed for a period of seven years, have been transferred on due dates by the company to the Investor Education and Protection Fund (IEPF) established by the Central Government.
EMPLOYEE STOCK OPTION SCHEME
Pursuant to the Employee Stock Option Scheme 2010, the 6,85,000 options were granted by the company to the eligible Employees of the Company at a price of Rs, 34/- per option. Each option entitles the holder thereof to apply for and be allotted an ordinary share of the Company of the nominal value of Rs, 2/- each, upon payment of the exercise price during the exercise period. Some of the employees are exercised their options and 1,58,900 equity shares of Rs, 2/- each were allotted during the year. Details of the options up to 31st March 2016 are set out in the Annexure - F to this Report, as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Options Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.
PUBLIC DEPOSITS
Your Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.
RISK MANAGEMENT POLICY
In today''s economic environment, Risk Management is a very important part of business. The main aim of risk management is to identify, monitor and take precautionary measures in respect of the events that may pose risk for the business. Your Company''s risk management is embedded in the business process. The Company has established Enterprise Risk Management process to manage risks with the objective of maximizing shareholders value.
ENVIRONMENTAND SAFETY
The Company is conscious of the importance of environmentally clean and safe operations. The Company''s policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances environmental regulations and preservation of natural resources.
HUMAN RESOURCES
Your Company is well known for its execution capabilities, marketing and manufacturing strengths, product quality, and ability to keep to its commitment and deliver for its customers. At Kaveri, our consistent emphasis is on promoting teamwork and personalized training. Your Company has conducting specialized training and developmental programmes to sharpen our team''s communication, behavioral and managerial skills. The human resource department conducts periodic training programmes on motivation and interpersonal behavior; and to improve employee skills. Special training programmes are organized for research staff faculty to improve their skills in the frontier line of science. Scientists also attend seminars and workshops, where they interact with public and private sector organizations. Training initiatives are also undertaken for field staff on seed production, quality control, agronomy and plant protection, among others. This improves their technical knowledge in quality seed production, while for sales and marketing team to improve their skills in marketing. For the last two years, the company has been focusing on need-based training. We are taking feedback from managers to understand their specific requirements. Accordingly, we make a list of things that needs to be addressed and based on that, we organize training programmes. The company has introduced a reward programme to recognize top performers from various departments, including research and development, seed production, sales and marketing, among others.
AWARDS & RECOGNITION
The Company was honored the ''Bio-Excellence Asia Award 2015â from the Department of IT, BT and S&T, Government of Karnataka.
POLICY ON SEXUAL HARASSMENT
Your Company has constituted an internal committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules there under. The Company has a policy on prevention of Sexual Harassment at work place with a mechanism of lodging complaints. The policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. During the year under review, no complaints have been received under the policy.
INDUSTRIAL RELATIONS
The Company enjoyed cordial relations with its employees at all levels. Your Directors record their appreciation of the support and co-operation of all employees and counts on them for the accelerated growth of the Company.
ACKNOWLEDGEMENTS
Your Directors place on record their sincere appreciation for the dedication, hard work and commitment of the employees at all levels and their significant contribution to your Company''s growth. Your Company is grateful to the Distributors, Dealers, and Customers for their support and encouragement. Your Directors thank the Banks, Financial Institutions, Government Departments and Shareholders and look forward to having the same support in all our future endeavors.
By Order of theBoard of Directors
For KAVERI SEED COMPANY LIMITED
Sd/- Sd/-
Secunderabad, G. V. BHASKAR RAO G. VANAJA DEVI
10 May 2016 Managing Director Whole time Director
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting the 27th Annual Report of
the Company together with the Audited Accounts for the financial Year
ended 31st March 2014.
FINANCIAL RESULTS:
(Rs. in Lakhs)
Particulars 2013-14 2012-13
Gross Turnover 100241.39 71083.58
Profit before Depreciation, 22989.87 14576.69
Interest and Taxes.
Depreciation/Amortization 1437.03 1060.39
Interest 15.95 150.71
Profit before Tax 21536.89 13365.59
Provision for Tax/Deferred Tax 480.65 378.47
Net Profit 21056.23 12987.12
Balance brought forward from 21784.64 12353.99
Previous Year
Balance available for 42840.88 25341.11
appropriation
Appropriations:
Proposed Dividend including Tax 3869.05 2556.47
Transfer to General Reserve 1000.00 1000.00
Balance carried to Balance Sheet 37971.83 21784.64
REVIEW OF OPERATIONS
During the year your Company''s business has significantly improved in
all aspects - revenues, operating income, profit before tax, and profit
after tax, earnings per share. The consolidated revenue from operation
was higher over the previous year by 42.38% at Rs.1020.85 Crores in the
year under review as against Rs.716.97 Crores in the previous year.
Consolidated net Profit is Rs.209.16 Crores was higher by 63.15% over
Rs.128.07 Crores of the previous year. It is a new all time high for
your Company translating to EPS of Rs.30.40 as compared to Rs.18.69 of
last year.
FUTURE OUTLOOK
With the area under agriculture cultivation coming down across the
world the focus is on producing more from limited land and resources.
This is imperative to feed the ever increasing population in the globe.
Despite growth in food production, hunger in it various forms are still
prevalent in the world - a complex challenge the world is trying to
overcome.
By 2050, the world requirement for food will double, driven by
anticipated population of more than 9 billion and a demand for improved
diets, particularly in developing countries like India. Farming
community is in general under great stress to produce more from less.
There is a need to increase productivity in a more accelerated way in
order to ensure food and nutritional security to a growing population
that is on the path of societal ascendency. Farms need to produce more
year by year to provide food, feed and fiber to meet the demands of the
population Anticipated and experiencing climate changes, dwindling
natural resources and biodiversity pose additional challenges to
improve farm productivity at required pace.
At Kaveri our relentless focus has been developing high quality seeds.
Contribution of quality seeds to the total production is estimated to
be 15-20% depending upon the crop. Our vision to be a benchmark seed
company and our focus on research have enabled us to be one of the
fastest growing seed company in India. In the long run, organised
players and seed companies with a strong R&D and diversified portfolio
of products will reap the benefit.
DIVIDEND:
Your Directors have proposed a final dividend of 120% i.e., Rs.2.40 per
equity share and together with the interim dividend of 120% i.e.
Rs.2.40 per equity share, the total dividend for the financial year
2013-14 comes to 240% i.e. Rs.4.80 per share on the equity shares of
Rs.2/- each against 160% i.e. Rs.3.20 per share paid in the previous
year.
The Dividend, if approved at the ensuing 27th Annual General Meeting,
will be paid to those shareholders whose names appear on the register
of members of the Company as on 16th September 2014. The Dividend would
be tax- free in the hands of the shareholders.
SUBDIVISION OF EQUITY SHARES
During the year under review, your Company''s Equity Share has
subdivided bearing the face value of Rs.10/- each into 5 (five) Equity
Shares of the face value of Rs.2/- (Rupees Two) each into fully paid up
Equity Shares. Consequent to stock split, your company''s paid up
capital of 6,87,42,205 Equity Shares of Rs.2/- each.
SHARE CAPITAL
During the year, the paid-up share capital of your Company has been
increased by Rs. 13,74,84,410/- due to the allotment of 2,31,285 equity
shares of Rs.2/- each on exercise of stock options by the eligible
employees under Employees Stock Option Scheme 2010.
SUBSIDIARIES COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
The company had 2 subsidiaries on 31st March 2014. There has been no
material change in the nature of the business of the subsidiaries.
As required under the Listing Agreements entered into with the Stock
Exchanges, consolidated financial statements of the Company and all its
subsidiaries is attached. The consolidated financial statements have
been prepared in accordance with the relevant accounting standards as
prescribed under section 211(3C) of the Companies Act, 1956. The
consolidated financial statements disclose the assets, liabilities,
income, expenses and other details of the company and its subsidiaries.
Pursuanttothe provisions ofsection212(8) ofthe Companies Act, 1956, the
Ministry of Corporate Affairs vide its circular dated February 8, 2011
has granted general exemption from attaching the balance sheet,
statement of profit and loss and other documents ofthe subsidiary
companies with the balance sheet ofthe Company. A statement containing
brief financial details of the Company''s subsidiaries for the financial
year ended March 31, 2014 is included in the annual report. The annual
accounts of these subsidiaries and the related information will be made
available to any member of the company/its subsidiaries seeking such
information and are available for inspection by any member ofthe
Company/its subsidiaries at the registered office of the company. The
annual accounts ofthe said subsidiaries will also be available for
inspection at the registered offices ofthe respective subsidiary
companies.
ACQUISITION:
Genome Agritech Private Limited
During the year your company has acquired 51% stake in Genome Agritech
Private Limited. The total cash-flow for the acquisition was
Rs.30,29,400/- . The Genome Agritech has a good research facility at
Kantheru Village, Tadikonda Mandal, Guntur District and having an elite
germplasm lines used in breeding program. Your company is on the same
line of business had shown interest in the said proposal to
invest/contribute towards the further issue of equity up to 51% of
total post allotment paid up capital of Genome Agritech Pvt. Ltd. The
acquisition was made by way of subscribing to invest 91,800 equity
shares of Rs.10/- each at a premium of Rs.23/- per share in Genome
Agritech Pvt. Ltd.,
Kaveri Microteck Private Limited
As you are aware, at present your Company is carrying on business in
two segments ie., Seed Division and Microteck Division, The Microteck
division is producing Micronutrient mixtures, Organic Products and
Bio-Pesticides. Out ofthe total turnover of the Company less than 5% is
from the Microteck Division and the nature of business activity is also
different from Seed Division.
As a part of restructuring of operations for strengthening and
enhancing the scope of the business of Microteck Division and to focus
more attention on the said division, your Company was obtained members
approval for transfer/dispose ofthe said Microteck Division to M/s.
Kaveri Microteck Private Limited, which isa 100% Subsidiary of the
Company, together with all its assets & liabilities, licenses, brands,
permits, consents and approvals whatsoever as on 31st March 2013, for
such consideration at Book Value of Rs. 14,52,63,600/- as per the
Audited Balance Sheet and to receive the said consideration by way of
allotment of 1,45,26,360 Equity Shares of Rs.10/- each at par value to
Kaveri Seed Company Limited by the above said 100% Subsidiary Company
ie., M/s. Kaveri Microteck Private Limited.
With effect from 1st April 2014 the Microteck Division shall start
their operations separately in Kaveri Microteck Private Limited, which
is 100% subsidiary of Kaveri Seed Company Ltd.,
DIRECTORS:
Sub-section (10) of Section 149 of the Companies Act, 2013 (effective 1
April 2014) provides that an Independent Director shall hold office for
a term of up to five consecutive years on the Board of a Company; and
shall be eligible for re-appointment on passing of a special resolution
by the shareholders of the Company. Sub-section (11) of the same
section states that no Independent Director shall be eligible for more
than two consecutive terms of up to five years each. In addition,
sub-section 13 of Section 149 states that the provisions of retirement
by rotation as defined in sub-sections (6) and (7) of Section 152 of
the Act, shall not apply to such Independent Directors.
The new Clause 49 notified by the SEBI on April 17, 2014, most of which
comes into effect from 1 October 2014, states in sub-clause II (B)(2)
that any Independent Director "who has already served five years or
more in a listed company as on 1 October 2014, shall be eligible for
appointment, on completion of his present term, for one more term of up
to five years only.
The appointment of Non-Executive Directors  whose sub-set comprise
Independent Directors  under the Companies Act, 1956 was a defacto
term of three years because one third of such fiduciaries were eligible
for retirement by rotation.
Therefore, it stands to reason that those Independent Directors who
would complete their present three-year term at the ensuing AGM of the
Company in September 2014, and are eligible for re-appointment, may be
considered by the shareholders for re-appointment for a term of up to
five years. Therefore, the Board recommends reappointing the retiring
Directors, Dr. Y.L.Nene and Mr. M. Srikanth Reddy for an additional
period of five years each, respectively.
Further, the Board also recommends the appointment of Mr. RVaraprasad
Rao, Dr. S. Raghuvardhan Reddy,
Dr. S.M.IIyas and Mr. K.Purushotham as Independent Directors under the
provisions of the Companies Act, 2013 and Clause 49 of the Listing
Agreement, not liable to retire by rotation and to hold office for the
period as stated in their respective resolutions and the explanatory
statement forming part of the Notice of the AGM.
The brief profile of all the Independent Directors is given in the
accompanying notice of the annual report for reference of the
shareholders.
Further, pursuant to the provisions of Section 152 of the Companies
Act, 2013 (effective 1 April 2014), one-third of the retiring Board
members (other than Independent Directors), shall retire every year and
if eligible, can be re- appointed, by the shareholders at their
meeting. Hence, approval of shareholders is also being sought for
variation in terms of appointment of Mr. R.Venumanohar Rao, Whole time
Director for making his office liable to retire by rotation. All other
terms and conditions of his appointment shall remain unchanged.
The respective resolutions to the above referred matters are included
in the notice convening the 27th Annual General Meeting scheduled on
18th September 2014.
STATUTORY AUDITORS
The statutory auditors of the Company, M/s. RR.Reddy & Co. Chartered
Accountants, retire at the ensuing Annual General Meeting and have
confirmed their eligibility and willingness to accept office of the
statutory auditors, if re- appointed.
Section 139(2) of the Companies Act, 2013 (effective 1 April 2014),
mandates that a listed company or such other prescribed classes of
companies shall not appoint or reappoint an audit firm as Statutory
Auditors for more than two terms of five consecutive years each.
Further, the companies as aforesaid, whose Statutory Auditors has held
office for a period of ten years or more are required to comply with
these provisions, within three years from the date of commencement of
these provisions i.e. 1 April 2014. For this purpose, the term of the
audit firm before the commencement of these provisions shall be taken
into account for calculating the period of ten consecutive years. Our
auditors, M/s. RR.Reddy & Co. Chartered Accountants, are holding the
office as Statutory Auditors since inception. Hence, they can only be
re- appointed in transitional period up to three years, i.e. up to
FY2017 (subject to ratification by the members at every subsequent
AGM).
The Audit Committee and the Board of Directors recommend the
re-appointment of M/s. RR.Reddy & Co. Chartered Accountants as
statutory auditors of the Company up to FY2017, for shareholders''
approval.
FIXED DEPOSITS:
Your Company has not accepted any deposits under
Section 58A of the Companies Act, 1956 and hence no amount of principal
or interest was outstanding as on the date of this Annual Report.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956 as amended, your Directors confirm as under:
In preparation of Annual Accounts, the applicable Accounting Standards
has been followed along with proper explanation relating to material
departures;
We have selected such accounting policies and applied them consistently
and made judgments and estimates that 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 2013-14 and of profit of the Company for
that period;
We have taken properandsufficientcareforthe maintenance of adequate
accounting records in accordance with the provisions of this Act for
safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities;
We have prepared the annual accounts on an on-going concern basis
PARTICULARS OF EMPLOYEES:
The particulars of employees as required to be disclosed in accordance
with the provisions of Section 217(2A) of the Companies Act, 1956 and
the Companies (Particulars of Employees) Rules, 1975 as amended are
annexed to the Directors'' Report. However, as per the provisions of
Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and
Accounts are being sent to all the shareholders of the Company
excluding the aforesaid information. Any shareholder interested in
obtaining such particulars may write to the Company Secretary.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
Information in accordance with the provisions of Section 217 (1) (e) of
the Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 is given
in Annexure I forming part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
In terms of Section 135 of the Companies Act, 2013, the Company has
constituted Corporate Social Responsibility Committee to monitor the
CSR activities of the Company in terms of the provisions of the
Companies Act, 2013.
EMPLOYEE STOCK OPTION SCHEME:
Pursuant to the Employee Stock Option Scheme, 6,85,000 options were
granted by the company to the eligible Employees of the Company at a
price of Rs.34/- per option, being below the market price. Each option
entitles the holder thereof to apply for and be allotted an ordinary
share of the Company of the nominal value of Rs.2/- each, upon payment
of the exercise price during the exercise period. Some of the
employees are exercised their options and 2,31,285 equity shares of
Rs.2/- each were allotted during the year. Details of the options up to
31st March 2014 are set out in the annexure to this Report, as required
under Clause 12 of the Securities and Exchange Board of India (Employee
Stock Options Scheme and Employee Stock Purchase Scheme) Guidelines,
1999.
CORPORATE GOVERNANCE:
The certificate of the Statutory Auditor M/s. RR.Reddy & Co.,
confirming of compliance of conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India is annexed.
MANAGEMENT DISCUSSION AND ANALYSIS:
A detailed report on the Management Discussion and Analysis is provided
as a separate section in this Annual Report.
HUMAN RESOURCES
Your Company is well known for its execution capabilities, marketing
and manufacturing strengths, product quality, and ability to keep to
its commitment and deliver for its customers. Over the year,
organisational strengths have enabled your company to grow faster than
the industry average in each of the year. The momentum continued during
the year under review with a new high in volume sold, highest over
revenues and profit after tax. Your company has been well served by all
the employees.
SAFETY, HEALTH AND ENVIRONMENT
Company''s focus on Safety, Health and Environment continued during the
year under review across all locations with all seed processing plants
maintaining high safety standards. Company has put in place robust
processes and performance indicators to track its Safety, Health and
Environment performance. Your Company maintained high standards of
environmental performances with all facilities operating well within
norms.
INDUSTRIAL RELATIONS:
The Company enjoyed cordial relations with its employees at all levels.
Your Directors record their appreciation of the support and
co-operation of all employees and counts on them for the accelerated
growth of the Company.
ACKNOWLEDGEMENTS:
Your Directors place on record their sincere appreciation for the
dedication, hard work and commitment of the employees at all levels and
their significant contribution to your Company''s growth. Your Company
is grateful to the Distributors, Dealers, and Customers for their
support and encouragement. Your Directors thank the Banks, Financial
Institutions, Government Departments and Shareholders and look forward
to having the same support in all our future endeavors.
For and on behalf of the Board
Sd/- Sd/-
Secunderabad, G.V. Bhaskar Rao G. Vanaja Devi
29th May 2014 Managing Director Whole time Director
Mar 31, 2013
Dear Members,
The Directors have pleasure in presenting the 26th Annual Report of the
Company together with the Audited Accounts for the financial Year ended
31st March 2013.
FINANCIAL RESULTS:
(Rs. in Lakhs)
Particulars 2012-13 2011-12
Gross Turnover 71083.58 37244.32
Profit before Depreciation, 14576.69 7423.54
Interest and Taxes.
Depreciation/Amortization 1060.39 1000.94
Interest 150.71 327.12
Profit before Tax 13365.59 6095.48
Provision for Tax/Deferred Tax 378.47 285.12
Net Profit 12987.12 5810.36
Balance brought forward from 12353.99 8180.63
Previous Year
Balance available for appropriation 25341.11 13990.99
Appropriations:
Proposed Dividend including Tax 2556.47 637.00
Transfer to General Reserve 1000.00 1000.00
Balance carried to Balance Sheet 21784.64 12353.99
FINANCIAL HIGHLIGHTS:
Members would be happy to know that the revenues and net earnings were
the highest in the history of the Company. During the year you company
has reached a turnover of Rs. 71083.58 Lakhs during the year under
review. The financial year 2012-13 was a significant improvement in all
parameters like revenues, operating income, profit before tax, profit
after tax and earnings per share. The gross turnover grew over 90.85%
at Rs. 71083.58 lakhs which was augmented by our strategic initiatives
taken by the company by high volume sale of seed. Net Profit after Tax
of Rs. 12987.11 lakhs was higher by 123.51% over Rs. 5810.36 lakhs of
the previous year. It is a new all time high for your Company
translating to EPS of Rs. 94.78 as compared to Rs. 42.40 of last year.
REVIEW OF OPERATIONS:
Your Company made significant progress during the year under review
gaining market presence, volume growth and visibility for its products
in the addressable markets. Your Company has a well structured
marketing team that is able to convert approvals into invoicing. The
investment made in the market place and the expertise of the team will
be leveraged to differentiate Kaveri from competition. Channels to
market have been broadened to increase revenue.
These efforts allow the marketing team to better anticipate
opportunities and shifts in the market and understand changing customer
and farmer needs. With such knowledge, your company is able to
effectively manage the product mix to achieve highest possible market
share and margins. Your Company is pursuing the goal of becoming a
leading seed company in the Indian seed market.
FUTURE OUTLOOK
The carrying capacity of spaceship earth and to sustain life on the
planet is fragile and under increasing stress. Despite significant
growth in food production over the past five decades more than a
billion people suffer from hunger and even more from silent hunger. By
2050, the global food requirement will double, driven by anticipated
population of more than 9 billion and a demand for improved diets,
particularly in developing countries like India.
Agriculture ingeneral is under great pressure to produce more from
less. There is a need to increase productivity in a more accelerated
way in order to ensure food and nutritional security to a growing
population that is on the path of societal ascendency. Farms need to
produce more year by year to provide food, feed and fiber to meet the
demands of the population
Anticipated and experiencing climate changes, dwindling natural
resources and biodiversity pose additional challenges to improve farm
productivity at required pace. Sustainable intensification of
agriculture holds the key to tackle these challenges to achieve food
sufficiency.As seed is the most critical renewable input in
agriculture, seed the future with production of high quality hybrid
seed of field and vegetable crops is the motto of Kaveri Seeds.
At Kaveri, we are also leveraging our strength in R&D with our
unmatched expertise in agribusiness, to explore new opportunities in
high value agriculture by way of protective cultivation of premium
vegetables and herbs. The company has established a subsidiary company,
Kexveg India Private Limited, to producing high value exotic vegetables
and herbs. The subsidiary has started commercial cultivation of high
value exotic Indian vegetables and European culinary herbs in an
exploratory built up area of 5 hectares of mega green houses. During
the year, the company cultivated full range of Indian vegetables-
tomato, cucumber, melons, and bell pepper in its farm under drip. The
company has plans to expand cultivation of green and colour capsicums,
hybrid and cherry tomatoes, parthenocarpic cucumber, leafy lettuce,
Iceberg lettuce and Basil; and culinary herbs which include chives,
sage, cilantro and parsley to cater to the domestic and European
market. For penetration to the export market, the Company is exploring
new grounds.
DIVIDEND:
Your Directors have proposed a final dividend of 80% i.e., Rs. 8/- per
equity share and together with the interim dividend of 80% i.e. Rs. 8/-
per equity share, the total dividend for the financial year 2012-13
comes to 160% i.e. Rs. 16/- per share on the equity shares of Rs. 10/-
each against 40% i.e. Rs. 4/- per share paid in the previous year.
The Dividend, if approved at the ensuing 26th Annual General Meeting,
will be paid to those shareholders whose names appear on the register
of members of the Company as on 19th September 2013. The Dividend would
be tax-free in the hands of the shareholders.
SUBSIDIARIES:
During the year your Company has one subsidiary as on 31st March 2013
ie., Kexveg India Private Limited.
As per Section 212 of the Companies Act, 1956, the Company is required
to attached the Directors'' Report, Balance Sheet and Statement of
Profit and Loss of the Subsidiary of the annual report. The Ministry of
Corporate Affairs, Government of India vide its circular No.2/2011
dated 8th February 2011 has provided an exemption to companies from
complying with Section 212, provided such companies publish the audited
publish the audited consolidated financial statements in their annual
report. Accordingly, the annual report 2012-13 does not contain the
financial statements of the subsidiary. The audited annual accounts
are related information of the subsidiary, where applicable, will be
made available for inspection during business hours at our registered
office in Hyderabad, India.
The members, if desire, may write to the Company Secretary at Kaveri
Seed Company Limited, 513-B, 5th Floor, Minerva Complex, S.D.Road,
Secunderabad - 500 003, Andhra Pradesh to obtain a copy of the
financial of the subsidiary company.
The consolidated financial statement, in terms of Clause 32 of the
Listing Agreement and prepared in accordance with Accounting Standard
21 as specified in the Companies (Accounting Standards) Rules, 2006
also forms a part of this annual report.
ACQUISITION:
During the year the Company has acquired 70% stake in Partnership firm
of Aditya Agritech. The total cash-flow for the acquisition was Rs.
77.00 Lakhs. The investment utilized for the purchase of stocks and
seed business. The product profile of the said firm will exactly match
with our Company''s products and therefore, the proposal will be more
beneficial to enhance the share in the seed market. Further, the Board
also proposed to convert the said firm into private limited company.
FIXED DEPOSITS:
Your Company has not accepted any deposits under Section 58A of the
Companies Act, 1956 and hence no amount of principal or interest was
outstanding as on the date of this Annual Report.
DIRECTORS:
During the year, Sri K. Purushotham, appointed as an Additional
Director of the Company with effect from 14th February 2013 in the
casual vacancy caused by the expire of Sri K.V.D.Prasad Rao, pursuant
to Section 262 of the Companies Act, 1956 read with Article 140 of the
Articles of Association of the Company, liable to retire by rotation
and subject to approval of members of the Company in the ensuing Annual
General Meeting.
The Board has expressed deep condolence for sudden demise of Sri
K.V.D.Prasad Rao, Non-Exectuve Independent Director of the Company and
noted that his valuable service rendered to the Company is highly
appreciated and deeply grieved for losing an eminent Director of the
Company.
In accordance with the provisions of the Companies Act, 1956, read with
the Articles of Association of the Company, Sri C.Vamsheedhar, Sri
C.Mithun Chand, Sri P.Varaprasad Rao, Directors retire by rotation at
the forthcoming Annual General Meeting scheduled on 24th September 2013
and being eligible offer themselves for re-appointment. The brief
profiles of Sri C.Vamsheedhar, Sri C.Mithun Chand, Sri P.Varaprasad Rao
and Sri K. Purushotham provided in the Report on Corporate Governance
forming part of Annual Report.
AUDITORS'' & AUDITORS'' REPORT:
The statutory auditors'' report is annexed to this report. The notes
on financial statements referred to in the Auditors'' report are self
explanatory and do not call for any further comments.
M/s. P.R.Reddy & Co. Chartered Accountants, retire at the ensuing
Annual General Meeting and being eligible, offer themselves for
re-appointment as Statutory Auditors of the Company for the financial
year 2013-14.
COST AUDITORS:
Pursuant to Section 233B of the Companies Act, 1956, the Central
Government has prescribed an audit of cost accounting records in
respect of seed business of the company. Based on the recommendations
of the Audit Committee, and subject to the approval of the Central
Government, the Board of Directors had appointed Mr.P.L.N.Sarma, Cost
Accountants, as Cost Auditors of the Company for FY 2013. The cost
audit report would be filed with the Central government as per
timeline.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956 as amended, your Directors confirm as under:
i) In preparation of Annual Accounts, the applicable Accounting
Standards has been followed along with proper explanation relating to
material departures;
ii) We have selected such accounting policies and applied them
consistently and made judgments and estimates that 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 2012-13 and of profit of
the Company for that period;
iii) We have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
iv) We have prepared the annual accounts on an on-going concern basis
PARTICULARS OF EMPLOYEES:
The particulars of employees as required to be disclosed in accordance
with the provisions of Section 217(2A) of the Companies Act, 1956 and
the Companies (Particulars of Employees) Rules, 1975 as amended are
annexed to the Directors'' Report. However, as per the provisions of
Section 219(1 )(b)(iv) of the Companies Act, 1956, the Report and
Accounts are being sent to all the shareholders of the Company
excluding the aforesaid information. Any shareholder interested in
obtaining such particulars may write to the Company Secretary.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
Information in accordance with the provisions of Section 217 (1) (e) of
the Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 is given
in Annexure I forming part of this Report.
EMPLOYEE STOCK OPTION SCHEME:
Pursuant to the Employee Stock Option Scheme, the Company has granted
1,37,000 options on 28th January 2010 to the eligible Employees of the
Company at a price of Rs. 170/- per option, being below the market
price. Each option entitles the holder thereof to apply for and be
allotted an ordinary share of the Company of the nominal value of Rs.
10/- each, upon payment of the exercise price during the exercise
period. Some of the employees are exercised their options during the
end of year, hence the allotment will be made in the month of April
2013 under the Scheme.
Details of the options up to 31st March 2013 are set out in the
annexure to this Report, as required under Clause 12 of the Securities
and Exchange Board of India (Employee Stock Options Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999.
CORPORATE GOVERNANCE:
The certificate of the Statutory Auditor M/s. P.R.Reddy & Co.,
confirming of compliance of conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India is annexed.
MANAGEMENT DISCUSSION AND ANALYSIS:
A detailed report on the Management Discussion and Analysis is provided
as a separate section in this Annual Report.
HUMAN RESOURCES
Your Company is well known for its execution capabilities, marketing
and manufacturing strengths, product quality, ability to keep to its
commitment and deliver for its customers. Over the year,
organisational strengths have enabled your company to grow faster than
the industry average in each of the year. The momentum continued during
the year under review with a new high in volume sold, highest over
revenues and profit after tax. Your company has been well served by all
the employees. Your company has appointed HR Consultants of M/s. Husys
Consultants to execute and implement HR Agenda and actions within the
organisation with the objective of enhance business performance and
capability of employees under strong value based framework.
The consultants gives a broad direction and support initiation for
talent management programs in line with short term and long term
business imperative/organisational needs. As at 31st March 2013
employees on roll constituted 699 higher by 8.37% over 645 as on the
previous year.
INDUSTRIAL RELATIONS:
The Company enjoyed cordial relations with its employees at all levels.
Your Directors record their appreciation of the support and
co-operation of all employees and counts on them for the accelerated
growth of the Company.
ACKNOWLEDGEMENTS:
Your Directors place on record their sincere appreciation for the
dedication, hard work and commitment of the employees at all levels and
their significant contribution to your Company''s growth. Your Company
is grateful to the Distributors, Dealers, and Customers for their
support and encouragement. Your Directors thank the Banks, Financial
Institutions, Government Departments and Shareholders and look forward
to having the same support in all our future endeavors.
For and on behalf of the Board
Sd/- Sd/-
Secunderabad, G.V.Bhaskar Rao G.Vanaja Devi
23rd May 2013 Managing Director Whole time Director
Mar 31, 2012
To The Members of M/s KAVERI SEED COMPANY LIMITED
The Directors have pleasure in presenting the 25th Annual Report of
the Company together with the audited accounts for the financial year
ended 31 March 2012.
FINANCIAL RESULTS
(in Rs Lakh)
2011-12 2010-11
Gross Turnover 37244.32 23468.84
Profit before Depreciation, Interest
and Taxes 7423.54 5486.67
Depreciation/Amortization 1000.94 1019.31
Interest 327.12 434.94
Profit before Tax 6095.48 4032.42
Provision for Tax/Deferred Tax 285.12 (215.09)
Net Profit 5810.36 4247.51
Balance brought forward from Previous Year 8180.63 5366.68
Balance available for appropriation 13990.99 9614.19
Appropriations
Proposed Dividend including Tax 637.00 398.13
Transfer to General Reserve 1000.00 1000.00
Balance carried to Balance Sheet 12353.99 8216.07
FINANCIAL HIGHLIGHTS
Members will be happy to know that your Company is celebrating its
Silver Jubilee this Year. This eventful journey has been a period of
planned growth and success, and your Directors take this opportunity to
complement every one - the members, customers, dealers, distributors,
business associates and employees for their encouragement, support and
co- operation. Your Company shall maintain the momentum and re-dedicate
itself to strive for sustained growth and thereby meet every
stakeholder's expectation in the future as well.
Your Company has reached a turnover of Rs 37244.32 lakhs during the
year under review. The financial year 2011-12 was a significant
improvement in all parameters like revenues, operating income, profit
before tax, profit after tax and earnings per share. The gross turnover
grew over 59% at Rs 37244.32 lakhs which was augmented by our strategic
initiatives taken by the company by high volume sale of seed. Net
Profit after Tax of Rs 5810.36 lakhs was higher by 36.79% over Rs
4247.51 lakhs of the previous year. It is a new all time high for your
Company translating to EPS of Rs 42.40 as compared to Rs 31 of last
year.
Your Company is working towards accelerated growth, both in revenues as
well as its earnings. Sustainable medium and long-term goals are being
pursued. Our customer centricity will always be matched by our efforts
to meet the stakeholders' interest. Investors in Kaveri can look
forward to robust growth.
Your Company will always endeavor to leverage its product,
technologically and people strength to enhance share owner's value.
This sustainable growth model is being further augmented with new
initiatives initiated and contemplated.
REVIEW OF OPERATIONS
Your Company during the last five years has shown healthy CAGR growth
of 40% and 43% in respect of revenue and PAT. Your Company has
maintained and made a mark as a National player in the seed industry
with substantial products. Plans are afoot to launch six more hybrids,
of which two have been marching ahead already. These hybrids in
conjunction with other currently marketed ones, keep the growth
momentum of the company in the years ahead. Your Company is one of the
few in the industry who have more than three decades of experience and
consistent track record. The experience over the years has helped in
understanding every changing needs and demands of customers. The clear
focus on quality, product development, manufacturing efficiencies,
productivity improvements and quicker reach to market will drive to
success in future. Your Company strongly believes that our future rests
on continued investment in R&D with focus on breeding research and
product development. As such the Company plans to invest more in R&D to
further the capabilities à in terms of human resources and
infrastructure.
Your Company's image received boost by figuring in Forbes Listing Under
Top 200 Companies, Best under a Billion in Asia - Pacific Region
successively for third time.
OUTLOOK
Seed is the harbinger of change in modern agriculture and agriculture
in turn is the game changer of the society. Harnessing the best of
scientific knowledge and technological breakthroughs to produce seed of
super green hybrids is crucial for second green revolution with world
food crisis looming large, it is a foregone conclusion that future
rests with those who wield grain power and the quality seed we produce
through innovation hold the key in such empowerment. Technological
advances and policy reforms initiated in late 1980s, greatly impacted
India's seed industry by opening up new growth opportunities through
investment on innovation. This is amply witnessed in case of cotton,
where the introduction of Bt cotton hybrids to combat vexed problem of
bollworm menace, developed by the private sector lead to stabilized and
enhanced yields, extension of area and maximization of output. Less
benefited from these technological advances and policy reforms are the
triple cereals- rice, wheat, and maize. In general, seed industry's
investment in research, development, and marketing of improved seed for
these crops lagged that of cotton. Rice, wheat and maize are also key
to India's food and nutritional security and their stagnant production
and productivity makes the country food insecure. The falling rate of
yield gain for these crops is of great concern. It is the private
sector that may contribute to growth in coming years by reversing the
trend. The R&D capabilities of seed Industry, as well as pro business
policy environment to support their growth, will significantly
contribute to productivity gains in the major cereals. After Bt.
cotton, growth driver and hope for industry is hybrid rice. Hybrid rice
with huge market potential is the next major attraction for your
company's business too.
RESEARCH & DEVELOPMENT
The seed industry is highly competitive and one who establishes an edge
in respect of quality of launched products in the market is the front
runner. The company is currently refurbishing its seed business by
phasing out extant products, with an eye on new and improved, extending
its entry into emerging markets to secure firm leadership in industry.
The company is striving to deliver solutions from seed to agro inputs -
micro nutrients and bio pesticides. The key strategy is to focus on
innovation by way of increased investment in R&D, infra structure and
human resources. The company has plans to consolidate its recently
established lead in cotton, pearl millet and maize and carve a niche in
vegetable seed and export market. It also intends to scale up their
position in hybrid rice and sunflower.
Your Company continues to rein enviably in its research driven product
portfolio - both in number and performance. The Company's premier BT
cotton hybrids - Jaadoo, Jackpot and North Bullet and bajra hybrid -
Super Boss launched in the recent past are now the envy to the
competitors in the seed business. Sampada (red gram) Sampoorna (paddy)
have created niche markets. Based on National Evaluation process, the
ICAR has identified Company's maize hybrids KMH 25K60 for AP, Karnataka
and Maharastra and KMH 3712 for Punjab, Delhi, Haryana, Western UP.,
Rajasthan, Gujarat, Madhya Pradesh, Bihar, and W. Bengal & Eastern UP
(2011). Four paddy hybrids KPH 216, KPH 371, KPH 272 & KPH 199 excelled
in National trials and advanced to second stage of national evaluation.
In a similar vein, X 563 (Bajra) and KSH 950 (Jowar) are the hybrids of
promise and likely to hit the market soon. Success has also been
achieved in vegetable breeding; Tomato hybrids - KTH 104, KTH 204, okra
hybrids - Kaveri Nadia and Kaveri Leena hold promise and hope for the
Company's further growth in vegetable business. Significant progress
has been made in breeding yellow vein mosaic virus (YVMV) resistant
okra hybrids. The performance of proprietary hybrids at all India level
is evidenced by their identification in ICAR trials and subsequent
notification by the CVRC. Four maize hybrids- KMH 218 Plus; KMH 3426;
KMH 25K60 & KMH3712 and Bajra hybrid Super Boss (MH1553) have been
notified recently.
PPV&FR
With increased private investment in research and knowledge-driven
products, Intellectual Property Rights (IPR) are rising in importance,
a trend that would affect many players in the agricultural sector. IPR
regimes are expected to contribute to increasing agricultural
productivity and improving food security through higher investment and
better innovations by the private sector in crop genetic improvement.
To encourage such an endeavour, the government enacted PPV&FR Act 2001.
Your Company has registered a number of germplasm/parental lines and
hybrids evolved through its dedicated R&D team to realize investments
and protect rights. To date as many as 159 lines/hybrids have been
registered with PPV&FR of which 39 have undergone DUS test and 15 are
in line for certification.
Microteck
Your Company established Microteck division about 9 years back to
provide green and organic productsÃmicro nutrients and
bio-pesticidesÃto farmers. Branded Microteck, these products help
significantly in increasing crop yield. Bulk moving products under this
category are Mazik and Energy, which are used as foliar spray. Captain
is recommended for soil application. The main products under this
category are ultimax , Kick, and microzyme, which are yield maximizers.
Fire and Fatafat stimulate the plant defence mechanism. Microteck has
started production of bio-pesticidesÃBio-guard and Bio-censeÃthat
subscribe to green norms.
The Thrust
Your Company is committed to be a front-runner in its core seed
business by ensuring quality through greater focus, improved
efficiency, accelerated innovation, and by remaining farmer-centric
throughout the value chain. With the efforts of the last five years,
your Company's business has climbed new heights and gained momentum.
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs 4 per equity
share of Rs 10 each 40% for financial year 2011-12. The dividend, if
approved at the ensuing Annual General Meeting, will be paid to those
shareholders whose names appear on the register of members of the
Company as on 25 September 2012. The dividend would be tax-free in the
hands of the shareholders.
SUBSIDIARIES
During the year, your Company has incorporated 100% Wholly Owned
Subsidiary Company, Kexveg India Private Limited, in the month of
November 2011, with an initial investment of Rs 6.40 crore.
The subsidiary company is a new initiative for producing high value
exotic Indian vegetables and European herbs for domestic and export
markets. The subsidiary entered into commercial cultivation of these
products in state-of-the-art and specially designed and built green
houses. During the year, the Company started cultivating a five hectare
area as a pilot project near Hyderabad. It is now taking steps to
expand the farm by another five hectares to cultivate crops like green
and coloured capsicum, hybrid tomato, cherry tomato, parthenocarpic
cucumber, leafy and iceberg lettuce, basil, and other culinary herbs
like chives, sage, tarragon, Rosemary, oregano, cilantro, and parsley
to cater to European tastes. Apart from this, the company is growing a
full range of Indian vegetables in its farms under drip irrigation.
Facilities include an in-house cold room and packing facilities by
punnet packing. The company plans to introduce shrink wrapping and
slicing dehydration.
During the year, the financial statements of the above said subsidiary
and also the consolidated statements will not be reflected in the
accounts of this Annual Report. In accordance with the Companies Act,
the accounts of the subsidiary will be closed within the stipulated
time from the date of incorporation. Accordingly, the financial results
of the subsidiary company will be made available along with the next
Annual Report of the company.
HUMAN RESOURCES
Your Company is well-known for its execution capabilities, marketing
and manufacturing strengths, product quality, ability to keep to its
commitment, and deliver for its customers. Over the year,
organisational strengths have enabled your company to grow faster than
the industry average in each year. The momentum continued during the
year under review with a new high in volume sold, highest ever
revenues, and profit after tax. Your company has received the support
of all employees. As at 31 March 2012, your Company had 645 employees
on roll, higher by 11.59% over 578 in the previous year.
CORPORATE GOVERNANCE
The certificate of the Statutory Auditor M/s. PR Reddy & Co.,
confirming compliance of conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement with the stock
exchanges in India is annexed.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed report on the Management Discussion and Analysis is provided
as a separate section in this Annual Report.
FIXED DEPOSITS
Your Company has not accepted any deposits under Section 58A of the
Companies Act, 1956, and hence no amount of principal or interest was
outstanding as on the date of this Annual Report.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956, read with
the Articles of Association of the Company, KVD Prasada Rao, Dr S
Raghuvardhan Reddy and Dr SM Ilyas, Directors, retire by rotation at
the forthcoming Annual General Meeting scheduled on 25 September 2012
and, being eligible, offer themselves for re-appointment. The brief
profiles of KVD Prasada Rao, Dr S Raghuvardhan Reddy and Dr SM Ilyas
are given in the Notice of the Annual Report for reference of members.
AUDITORS
The Statutory Auditors of the Company M/s PR Reddy & Co. Chartered
Accountants retire at the ensuing Annual General Meeting and have
confirmed their eligibility and willingness to accept office of
Statutory Auditors, if reappointed. The Audit Committee and the Board
of Directors recommend reappointment of M/s PR Reddy & Co., Statutory
Auditors of the Company for the financial year 2012-13 for
shareholders' approval.
RECONCILIATION OF SHARE CAPITAL AUDIT
A reconciliation of share capital audit for the year 2011-12 was
carried out by AN Sarma, practicing Company Secretary. The said
reconciliation of share capital confirms that the Company has complied
with all the applicable provisions of the Companies Act, 1956,
Depositories Act, 1996, Listing Agreements with the Stock Exchanges,
Securities Contracts (Regulation) Act, 1996, and all the regulations of
SEBI as applicable to the Company, including the Securities and
Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997, and the Securities and Exchange Board of
India (Prohibition of Insider Trading) Regulations, 1992.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956, as amended, your Directors confirm as under:
i In preparation of Annual Accounts, the applicable accounting
standards have been followed, along with a proper explanation relating
to material departures;
ii We have selected such accounting policies and applied them
consistently and made judgments and estimates that 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 2011-12 and of profit of
the Company for that period;
iii We have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities to the best of its knowledge
and ability. There are however, inherent limitations, which should be
reconised while relying on any system of internal control and records;
and
iv it has prepared the annual accounts on a going concern basis.
PARTICULARS OF EMPLOYEES
The particulars of employees as required to be disclosed in accordance
with the provisions of Section 217(2A) of the Companies Act, 1956, and
the Companies (Particulars of Employees) Rules, 1975, as amended are
annexed to the Directors' Report. However, as per the provisions of
Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and
Accounts are being sent to all shareholders of the Company excluding
the aforesaid information. Any shareholder interested in obtaining such
particulars may write to the Company Secretary.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information in accordance with the provisions of Section 217(1)(e) of
the Companies Act, 1956, read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988, is given
in Annexure I forming part of this Report.
EMPLOYEE STOCK OPTION SCHEME
Pursuant to the Employee Stock Option Scheme, the Company has granted
1,37,000 options on 28 January 2010 to eligible employees of the
Company at a price of Rs 170 per option, being below the market price.
Each option entitles the holder thereof to apply for and be allotted an
ordinary share of the Company of the nominal value of Rs 10 each, upon
payment of the exercise price during the exercise period. During the
year, no employee exercised the options, hence, no options were
allotted under the Scheme. Details of the options up to 31 March 2012
are set out in the Annexure II to this Report, as required under Clause
12 of the Securities and Exchange Board of India (Employee Stock
Options Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.
INDUSTRIAL RELATIONS
The Company enjoyed cordial relations with its employees at all levels.
Your Directors record their appreciation of the support and
co-operation of all employees and counts on them for the accelerated
growth of the Company.
ACKNOWLEDGEMENTS
Your Directors place on record their sincere appreciation for the
dedication and commitment of the employees at all levels and their
significant contribution to your Company's growth. Your Company is
grateful to distributors, dealers, and customers for their support and
encouragement. Your Directors thank the banks, financial institutions,
government departments, and shareholders, and look forward to having
the same support in all our future endeavors.
For and on behalf of the Board
Sd/-
GV BHASKAR RAO
Managing Director
Sd/-
Place Secunderabad G VANAJA DEVI
Date 26 May 2012 Wholetime Director
Mar 31, 2011
Dear Members,
The Directors have pleasure in presenting the 24th Annual Report of
the Company together with the Audited Accounts for the financial Year
ended 31st March 2011.
FINANCIAL RESULTS (Rs. in Lakhs)
2010-11 2009-10
Cross Turnover 23468.84 16402.68
Profit before Depreciation, interest
and Taxes. 5486.67 3715.85
Depreciation/Amortization 1019.31 414,52
Interest 434.94 182,29
Profit before Tax 4032.42 3119,04
Provision for Tax/Deferred Tax 215.09 212.51
Net Profit 4247.51 2906.53
Balance brought forward from Previous Year 5366.68 3779.70
Balance available for appropriation 9614.19 6686.24
Appropriations:
Proposed Dividend including Tax 398,13 319,55
Transfer to General Reserve 1000.00 1000,00
Balance carried to Balance Sheet 8216.07 5366.68
FINANCIAL HIGHLIGHTS
During the year, your Company's business has significantly improved in
all aspects - revenues, operating income, profit before tax, profit
after tax and earnings per share. The gross turnover growth of over 43%
at Rs 23468.84 lakhs was a reflection of success of our strategic
initiatives for quantum jump in seed sales. Net Profit after Tax at
Rs.4247.51 lakhs was higher by 46,13% over Rs.2906,53 lakhs than in the
previous year. It isa new high for your Company Earning
PerShare(EPS)@Rs, 31.00 compared to Rs.21.21of last year,
Your Company is striving hard for accelerated growth in revenues as
well as earnings. Sustainable medium and long- term goals are being
envisioned and pursued. Our customer focus will always be in tandem
with our t stakeholder's interest. Investors in Kaveri can look forward
for robust growth,
Your Company will always endeavor to leverage it's technological and
product strength to enhance augmentation of the company. This
sustainable growth model is being further augmented with innovation and
initiatives that will further growth of the company.
REVIEW OF OPERATIONS
Your Company is makingall out efforts toensure that the products
developed are in tune with the needsof the farmers and initiated
several steps to mark its presence in the premium markets. Reducing the
marketing lag and improve the reach of Company's products are some of
the current initiatives that are expected to help the Company to be a
cost effective producer that enable your Company to meet the challenges
of competitive markets in the future.
Your Company continues to rein enviably in its product portfolio - both
in number and performance. The Company's premier BT cotton hybrids -
Jadoo and Jackpot, and bajra hybrid- Super Boss launched earlier are
doing good in the seed market and in the farmer's fields. Sampada (red
gram) Sampoorna (paddy) have also created niche markets, Based on
National Evaluation process, the ICAR has identified Company's maize
hybrid KMH 3712 for Punjab, Delhi, Haryana, Western U.P., Rajasthan,
Gujarat, Madhya Pradesh, Bihar, and W. Bengal & Eastern LLP. Four of
our paddy hybrids KPH216,KPH 371, KPH272&KPH 199 excelled in National
trialsand advanced to next stage of evaluation. Ina similar vein, X 563
(Bajra) and KSH 950 (Jowar) are the hybrids of promise and likely to
hit the market soon. Some success has been achieved in vegetable
breeding; Tomato hybrids- KTH 104, KTH 204, Okra hybrids - Kaveri Nadia
Kaveri Leena hold promise and hope for the Company's business.
Significant progress has been made in breeding yellow vein mosaic virus
resistant Okra hybrids.
Germplasm or the genetic wealth is the most vital asset of the Company.
The vast collection of germplasm that accrued over the years has been
streamlined for conserving in" Gene Bank" built in as part of the newly
commissioned cold storage unit and Seed Bank at Pamulaparty. Realizing
the importance of multi environment evaluation of Company's hybrids,
the Company strengthened the system of out reach evaluation tlvrough
organizing multi location trials. In order to establish legal ownership
of the Company's hybrids and their parental lines, efforts are underway
to registering the lines with PPV&FR authority. Till date, ~"I4Q
applications were Hied with PPV&FRA of which twenty cleared through DUS
testing.
OUTLOOK
To augment finite natural resources -land and water, the Company has
embarked on plans to bring more area for seed production of Foundation
seed with judicious use of rain water. Towards this goal, more farm
area has been brought under plough for commercial production of seed
and intensified efforts on rain water harvest for use in new cropped
area.
The twin challenges in current agriculture is to increase the
production and productivity of field crops through a green growth
strategy. Concurrently, your company is giving emphasis to high value
agriculture by way of protective cultivation of premium vegetables.
Demand for vegetables at home and for export is increasing. In view of
the demand for higher quality and more variety in vegetables, the
Company is laying new thrust on vegetable breeding with emphasis on
tomato, okra and chilly. Your Company has plans to grow high value
vegetables for export. Despite stiff opposition to GM technology,
environmental, quality and production efficiency benefits will
eventually tilt in favour of wide adoption of the transgenic crops in
the country. Deregulation of Blbrinjal is on the cards. With Btbrinjal
getting clearance soon for commercial planting, a host of GM crops
follow suit, ushering an era of biotech crops. Biotechnology is
destined to steer the breeding process in the near future. Realising
this, your Company has built state of the art transgenic containment
hays and put into operation at Pamulaparthy. Building of mega
greenhouses for Flori and Olericulture are in progress as the Company
is loo king forward for business in overseas markets. Hybrid rice with
huge tradeoff is still the major attraction for the Company's
investment. Production problems of quality seed production of Hybrid
paddy seed are being tackled. Your company's R&D is geared to absorb
and adopt new technologies in crop breeding. Being India's leadingSeed
Company, the focus centers round conventional breeding and breeding by
design using biotechnology to advance the yield frontier and stabilize
through incorporation of genetic resistance to biotic and abiotic
stresses. Your Company is striving for new and sustained levels of
recognition exemplified by the performance of pipe line hybrids in All
India Coordinated Trials and commercial launching of premier cotton,
bajra and maize hybrids. Conjunct use of Breeding and Biotechnology is
on the anvil for developing biotic resistant rice hybrids,
RESEARCH & DEVELOPMENT
Three years after the food crisis in 2007, the prices of basic food
items are again rising rapidly, fueling new concerns about the food
security of developing countries. The international prices of maize and
wheat have almost doubled in 201 tl -2011 India's biggest challenge is
to ensure food and nutritional security to its masses. Investment in
Agriculture R&D is the effective way of ensuring food security and
economic growth. There is emphasis for another green revolution through
sustainable intensification of agriculture. This implies a green growth
strategy (GSS) that ensures productivity growth through a sustainable
path consistent with long term environmental safety. Seed is the key
player in this endeavour. Being the carrier of genetic potential,
contributes to productivity increase thereby creating revenue pathways
to farmers. The pressing need is for quality seed of varieties and
hybrids that are not only high yielding but resilient to less
inputs-water,fertilizersetc.Thusfood security isinterwoven with the
seed security.
The Kaveri Seed Company's R&D targeted its research for developing
hybrids that excel in the market with quality assurance. Genetically
enhanced premium quality seed has been the hallmark of Kaveri for more
than three decades, The Company with vast experience in seed production
of major agricultural crops backed by a very strong in-house R&D
programme for crops-maize, cotton, sunflower, bajra, sorghum, rice and
several vegetable crops nurtured a competitive edge in seed and
agribusiness. With over 600 acres of farm land owned by the company and
dedicated team of researchers, the company is conscious of the changing
needs of farmers and consumers to design and develop productive hybrids
that fetch rewarding returns. Being India's leading Seed Company, the
R&D focus centers round conventional breeding and breeding In design
using biotechnology to advance the yield frontier and stabilize through
incorporation of genetic resistance tobiotic and abiotic stresses.
During the year under report, our R&D strived hard to accelerate to new
and sustained levels of innovation as exemplified by the performance of
pipe line hybrids in All India Coordinated Trials and commercial
launching of premier hybrids.
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs.2.50/- per
Equity Share of Rs.10/- each (25%) for the financial year 2010-11. The
dividend, on approved at the ensuing Annual General Meeting, will be
paid to the shareholders whose names appear in the register of the
Company as on 24th September 2011. The dividend would be tax-free in
the hands of the shareholders.
CORPORATE GOV ERNANCE
The certificate of the Statutory Auditor M/s. P.R. Reddy & Co.,
confirming of compliance of conditions of Corporate Governance as
stiputa ted under Ctause49 of the Us ting Agreement with
theStockExchaugesin India is annexed.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed report on the Management Discussion and Analysis is provided
in a separate section elsewhere in this Annual Report.
FIXED DEPOSITS
Your Company has not accepted any deposits under Section 58A of the
Companies Act, 1956 and hence no amount of principal or interest was
out standing as on date of this Annual Report.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956, read with
the Articles of Association of the Company, Dr. G. Pawan, Dr. Y.L. Nene
and Sri M. Srikanth Reddy, Directors retire by rotation at the
forthcoming Annual General Meeting scheduled on 27th September 2011
will be eligible for re-appointment. The brief profiles of Dr, C.
Pawan, Dr. Y.L. Nene and Sri M. Srikanth Reddy are given in the
Corporate Governance section of the Annual Report for information.
The Board of Directors at their meeting held on 10th August 2011 had
re-appointed Sri G,V. Bhaskar Rao, Managing Director designated as
Chairman, Smt. G, Vanaja Devi, Sri R, Venu Manohar Rao, Sri C
Vamsheedhar and Sri C Mithun Grand, Whole time Directors of the Company
for a further period of five years with effect from 15th Movember 2011.
These re-appointments are subjected to shareholder's approval and (he
resolutions to this effect have accordingly been included in the notice
convening 24th Annual General Meeting scheduled for 27th September
2011, A brief profile of the above said Directors are provided in the
section on Corporate Governance.
AUDITORS
The term of Statutory Auditors of the Company M/s. P.R. Reddy & Co.
Chartered Accountants, expires with the ensuing Annual General Meeting.
However, they expressed willingness to serve as Statutory Auditors for
another year. The Audit Committee and the Board of Directors recommend
reappointment of M/s. P.R, Reddy & Co., Statutory Auditors of the
Company for the financial year 2011-12 for shareholder's approval.
RECONCILIATION OF SHARE CAPITAL AUDIT
A Reconciliation of Share Capital Audit for the year 2010-11 was
carried out hy Mr. A.N. Sarma, Practicing Company Secretary. The said
Reconciliation of Share Capital audit confirms that the Company has
complied with all the applicable provisions of the Companies Act, 1956,
Depositories Act, 19%, Listing Agreements with the Stock Exchanges,
Securities Contracts (Regulation) Act, 1996 and all the regulations of
SEBI as applicable to the Company, including the Securilies and
Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997 and the Securities and Exchange Board of
India (Prohibition of Insider Trading) Regulations, 1992,
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956 as amended, your Directors confirm as under:
i) In preparation of Annual Accounts, the applicable Accounting
Standards has been followed along with proper explanation relating to
material departures;
ii) We have selected such accounting policies and applied them
consistently and made judgments and estimates that 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 2010-11 and of profit of
the Company for that period;
iii) We have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of tire Company and for preventing and
detecting fraud and otherirregularities;
iv) We have prepared the annual accounts on an on-going concern basis
PARTICULARS OF EMPLOYEES
The particulars of employees as required to be disclosed in accordance
with the provisions of Section 217(2A) of the Companies Act, 1956 and
the Companies (Particulars of Employees) Rules, 1975 as amended are
annexed to the Directors' Report. However, as per the provisions of
Section 219(1) (b) (iv)of the Companies Act, 1956, the Report and
Accounts are being sent to all the shareholders of the Company
excluding the aforesaid information. Any shareholder interested in
obtaining such particulars may write to the Company Secretary.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information in accordance with the provisions of Section 217 (1) (e) of
the Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 is given
in Annexure I which forms part of this Report.
EMPLOYEE STOCK OPTION SCHEME
The Members of the Company through Postal Ballot on 9th January 2009
have approved formulation of Employee Stock Option Scheme 2009 (KSCL
ESOP 2009) to the eligible employees of the Company. Further, the
modification was approved by the members in their Annual General
Meeting held on 22nd September 2009. Pursuant the Scheme, the Company
has granted 1,37,000 options on 28th January 2010 to the eligible
Employees of the Company at a price of Rs.170/- per option, being below
the market price. Each option entitles the holder thereof to apply for
and be allotted an ordinary share of the Company of the nominal value
of Rs.10/- each, upon payment of the exercise price during the exercise
period. During the year, no employee was exercised the options, hence,
there is no options were allotted under the Scheme. Details of the
options granted and lapsed up to 31st March 2011 are set out in the
Annexure II to this Report, as required under Clause 12 of the
Securities and Exchange Board of India (Employee Stock Options Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999.
INDUSTRIAL RELATIONS
The Company enjoyed cordial relations with its employees at all levels.
Your Directors record their appreciation of the support and
co-operation of all employees and count on them for the accelerated
growth of the Company.
ACKNOWLEDGEMENTS
Your Directors place on record their sincere appreciation for the
dedication and commitment of the employees at all levels and their
significant contribution to your Company's growth. Your Company is
grateful to the Distributors, Dealers, and Customers for their trust,
support and encouragement, Your Directors thank the Banks, Financial
Institutions, Government Departments and Shareholders and look forward
for renewed support in all our future endeavors.
For and on behalf of the Board
sd/- sd/-
Secunderabad, G VANAJA DEVI G.V. BHASKAR RAO
10th August 2011 Whole-time Director Managing Director
Mar 31, 2010
The Directors have pleasure in presenting the 23rd Annual Report of
the Company together with the Audited Accountsforthe financal Year
ended 31 st March 20IO.
FINANCIAL RESULTS:
(Rs. in Lakhs)
Gross Turnover 16402.68 12434.42
Profit before Deprecation, Interest
and Taxes 3715.85 3226.81
Depreciation/Amortization 414.52 321.94
Interest 182.29 191.85
Profit before Tax 3119.04 2713.02
Provision for Tax/Deferred Tax 207.14 239.45
Net Profit 2911.90 2473.57
Balance brought forward from
Previous Year 3779.70 2810.16
Add / Less : Provision for
Deferred Tax (5.37) 15.40
Less: Provision for diminution
in value of Investments - 198.81
Balance available for appropriation 6686.24 5100.32
Appropriations:
Proposed Dividend including Tax 319.55 320.61
Transfer to General Reserve 1000.00 1000.00
Balance earned to Balance Sheet 5366.68 3779.71
REVIEWOF OPERATIONS AND OUT LOOK:
Your Companys performance for the year under review has been quite
satisfactory despite the monsoon playmg truant during the Kharif
season. Your Companys business have significantly improved on
operational performance compared to previous year and also record a
strong financial performance, Gross turnover of Rs. 16402.68 Lakhs
improved a growth rate of 32 percent, while the profit after tax is
Rs.2906.53 Lakhs improved a growth rate of 16.77 percent.
The financial strength continues to successfully sustain your Companys
business model, which is centered on attaining market leadership in its
chosen areas of competence at competitive level.
Your Company will always endeavor to leverage ,ts product,
technological and people strength to enhance share owner value. Th,s
sustainable growth model is being further strengthened with new
initiative that will add to the Companys fundamentals.
Your Company has made strategic investment in setting up a new plant at
Pamulaparthi Village, Wargal Mandal, Medak District with the state of
an art facility for utilizing cob drying, seed processing and cold
storages on owned farmland o f29 Acres which has commenced commercial
production in the year 2010.
Your Company is also ensunng that its marketing efforts stay tuned to
the needs of the farmers and has initiated steps to develop its
presence in quality conscious premium markets and reduce marketing lag
and improve the reach for your Companys products. The present
initiatives also include converting the Company into a cost effective
producer. Th,s will enable your Company to meet the challenges of
competitive markets in the future.
Your Company is working towards accelerated growth, both in revenues as
well as its earnings. Sustainable medium and long-term goals are be,ng
pursed. Our customer focus will always be matched by our efforts to
meet the stakeholder interest. Investors in Kaveri can look forward to
robust growth.
RESEARCH & DEVELOPMENT:
Investment in Agriculture R&D is the most effective way of ensuring
food security and econom,cgrowth. There ,s a growing consensus for
another green revolution through sustainable intensification of
agriculture. Seed is the key player in this endeavour. Be,ng the
repository of genetic potential, evolved through hybridization and
selection, seed contributes to productivity increase thereby creating
revenue pathways to farmers. The pressing need is for quality seed of
varieties and hybrids that are not only high yielding but resilient to
less inputs- water, fertilizers etc. Thus food security is interwoven
with the seed security. The Kaveri Seed Companys R&D targeted its
research for developing hybrids that excel in the market with quality
assurance. Genetically enhanced premium quality seed has been the
hallmark of Kaveri for more than three decades, The Company w,th vast
experience in seed production of major agricultural crops backed by a
very strong in-house R&D programme for crops-ma,ze, cotton,
sunflower,,bajra, sorghum, rice and several vegetable crops nurtured a
competitive edge in seed and agribusiness. With over 600 acres of farm
land owned by the company and dedicated team of researchers, the
company is conscious of the changing needs of farmers and consumers to
design and develop productive hybrids that fetch rewarding returns.
Being Indias leading seed company, the R&D focus centers round
combined use of conventional breeding and biotechnology to advance the
yield frontier and stabilize it through incorporation of genetic
resistance to biotic and iotic stresses. Dunng tyear under report, our
R&D srnved hard to accelerate to new and sustained levels of innovation
as exemplified by the performance of pipe line hybrids in All India
Co-ordinated Trials and commercial launching of premier hybrids.
Vegetable consumption, Nation wise is increasing along with seed volume
and value. In view of demand for higher quality and more variety in
vegetables, KaveriR&D is laying newthrustto vegetables with emphasis on
tomato, okra and chilly. All of us anticipated approval for BT brjnjal
in India that is not to be. Regardless of this development,
commercialization of CM vegetables, particularly in developing
countries like ours, is inevitable. Despite current public opposition
to CM technology, environmental, quality and production efficiency
benefits will eventually tilt in favour of wide adoption of the
technology in the country. Once the way is paved for Bt Brinjal, CM
rice, maize, wheat and a number of vegetable crops follow the suit,
heralding an era of biotech crops. As biotechnology steers the breeding
process in the near future, our R&D is being geared up by strengthening
human resources and expanding the infrastructure. Abattery of
transgenic containment units are getting ready at Gowraram and plans
are afoot to build mega greenhouses for Flori and Olericulture.
Fortifying BT cotton with herbicide tolerance (HT) and drought
tolerance (DT) is on our research agenda. After BT cotton it is the
turn of hybrid rice with huge market potential. Whatever may be the
current production problems, we need to over come to sustain the
technological option for increasing food production
On the product front, the company ,s successful in launching two of its
premier BT cotton hybrids in the brand names of jadoo and jack pot, and
a pearl millet hybrid, Super Boss. Sampada (red gram) Sampoorna
(paddy) are the newly launched varieties. Based on the performance at
National level, two of our maize hybrids, Kaveri 50 and KMH 25K60 along
with bajra hybrid, MH 1553 were identified by varietal identification
committee for eventual notification.
Germplasm is the most vital asset of the company. The vast collection
of germplasm that accrued over the years has been streamlined for
conserving in" Gene Bank" built in as part of the newly commissioned
cold storage un,t and Seed Bank at Gowraram. In order to establish
legal ownership of the Companys hybrids and their parental lines,
efforts are underway to reg,ster,ngthe lines with PPV&FR authority,
Till date, ~ 100 applications were filed with PPV&FRA
To augment natural resources-land and water, the Company has embarked
on plans to bring more area under plough and judicious use of scarce
water. Towards this goal, farm area to the tune of nearly 120 acres has
been brought under cultivation of crops for commercial production of
seed. The rain water harvest is in place for use in new cropped area.
In addition, drip irrigation has been extended to cover more area in
Gundla Narasingpur farm and elsewhere.
DIVIDEND:
Your Directors are pleased to recommend a Dividend of Rs.2/- per Equity
Share of Rs. 10/- each (20%) for the financial year 2009-10. The
Dividend, if approved at the ensuing Annual General Meeting, will be
paid to those shareholders whose names appear on the register of
members of the Company as on Book closure date.
CORPORATE GOVERNANCE:
A detailed Report on Corporate Governance system and practices of the
Company are given in a separate section in this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS:
A detailed report on the Management D,scuss,on and Analysis is provided
as a separate section in this Annual Report.
FIXED DEPOSITS:
Your Company has not accepted any deposits under Section 58A of the
Companies Act, 1956 and hence no amount of principal or interest was
out stand,ngasonthedateofth,s Annual Report.
DIRECTORS:
In accordance with the provisions of the Companies Act, 1956, read with
the Articles of Association of the Company, Sri C.Vamsheedhar, Shri
C.Mithun Chand and Sri P.Varaprasad Rao retire by rotation and be,ng
el,g,bleofferthemselvesforre-appo,ntmentasD,rectorsofthe Company.
In accordance with Clause 49 of Listing Agreement your Board was
constituted with the total strength of twelve Directors. Apart from
this the Board also constituted mandatory/statutory committees and non-
statutory committees as mentioned in the Report on Corporate
Governance.
AUDITORS:
The Statutory Auditors of the Company M/s. P.R.Reddy & Co. Chartered
Accountants, retire at the ensuing Annual General Meeting and have
confirmed their eligibility and willingness to accept office of
Statutory Auditors, if reappointed. The Audit Committee and the Board
of Directors recommend reappointment of M/s. P.RReddy & Co., Statutory
Auditors of the Company for the financial year 2010-1 I for
shareholders approval.
SECRETARIALAUDIT REPORT:
A Secretarial Audit for the year 2009-10 was carried out by Mr.
A.N.Sarma, Practicing Company Secretary. The sa,d Secretarial Audit
Report confirms that the Company has complied with all the applicable
provisions of the Companies Act, 1956, Depositories Act, 1996, Listing
Agreements with the Stock Exchanges, Secunrities Contracts (Regulation)
Act, 1996 and all the regulations of SEBI as applicable to the Company,
including the Securities and Exchange Board oflnd,a(Substant,al
Acquisition of Shares and Takeovers) Regulations, 1997 and the
Securities and Exchange Board oflnd,a(Proh,b,t,onoflns,derTrading)
Regulations, 1992.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956 as amended, your Directors confirm as under:
i) In preparation of Annual Accounts, the applicable Accounting
Standards has been followed along with proper explanation relatmg to
material departures;
ii) We have selected such accounting polices and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to g,ve a true and fair v,ew of the state of affairs of
the Company at the end of the financial year 2009-10 and of profit of
the Company for that period;
iii) We have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detectmg fraud and other irregularities;
iv) We have prepared the annual accounts on an on-go,ng concern basis
PARTICULARS OF EMPLOYEES:
The particulars of employees as required to be disclosed in accordance
with the provisions of Section 217(2A; of the Companies Act, 1956 and
the Companies (Particulars of Employees) Rules, 1975 as amended are
annexed to the Directors Report. However, as per the provisions of
Section 219( l)(b)(,v) of the Companies Act, 1956, the Report and
Accounts are be,ng sent to all the shareholders of the Company
excluding the aforesaid information. Any shareholder interested in
obtaining such particulars may write to the Company Secretary.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
Information in accordance with the provisions of Section 217 (I) (e) of
the Companies Act, 1956 read with the Companies (disclosure of
Particulars in the Report of Board of Directors) rules, 1988 is given
in Annexure forming part of this Report.
INDUSTRIAL RELATIONS:
The Company enjoyed cordial relations with its employees at all levels.
Your Directors record their appreciation of the support and
co-operation of all employees and counts on them for the accelerated
growth of the Company.
ACKNOWLEDGEMENTS:
Your Directors wish to place on record their appreciation and
acknowledge with gratitude the support and co- operation extended by
farmers, dealers, Banks, financial institutions, Central and State
Governments, customers and others and thank the shareholders for their
continued confidence reposed in the Company.
For and on behalf of the Board
Sd/- Sd/-
Secunderabad G.VBHASKAR RAO G.VANAJA DEVI
3rd August 2010 Managing Director Whole time Director