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Directors Report of Nath Bio-Genes (India) Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the 21st Annual Report together with the Audited Account: of your Company for the financial year ended 31st March 2015.

FINANCIAL RESULTS

(Rs in Lacs) YEAR ENDED PARTICULARS 31.03.2015 31.03.2014

Sales 18532.69 17211.53

Profit before Interest & Depreciation 3533.17 26366.71

Interest 459.19 376.09

Depreciation 438.70 466.14

Profit Before Tax & Extra-ordinary items 2635.28 2552.49

Tax Provision (Net of Deferred Tax) 95.54 120.88

Profit After Tax 2539.74 2431.60

Extra-Ordinary Items 0 1.20

Profit available for Appropriation 2539.74 2430.40

Balance carried to Balance Sheet 2539.74 2430.40

FINANCIAL HIGHLIGHTS AND OPERATIONS

Income from operations during the financial year ended 31st March 2015 was at Rs 18532.69 Lacs as against Rs 17211.53 Lacs representing an increase of approximately 7.67% over the previous year. Profit after Tax for the year under review amounted to Rs 2539.74 Lacs as against Rs 2430.40 Lacs in the previous year representing an increase of 4.49%. The increase in profits during the year under review was on account of enhanced sales, improved product mix and operational efficiencies.

RESEARCH & DEVELOPMENT & NEW PRODUCTS

NBIL continues to provide substantial financial allocations to further strengthen its R&D programs. The competitive environment in the area of hybrid seeds is rapidly growing worldwide, so also in our country as well. It is no longer good enough to offer high yielding hybrid varieties to the Indian Farmers. It is now becoming a mandatory requirement that such hybrids carry additional built-in value through seed embedded technologies/genes providing durable protection against specific diseases, pests and vagaries of nature (floods/drought/heat stress etc).

Seeds endowed with multiple value additions, in addition to high yield potential, are much in demand and eagerly sought after by the modern Indian Farmers. At NBIL, our Company has undertaken specific initiatives of reaching out even to the rain-fed and largely un-reached farmers. This is in congruence with our national priorities and commitments, as also in harmony with finding newer areas of opportunities for business. NBIL is pursuing both Genetic Engineering Technologies as well as Molecular-Aided Selection systems to enrich our crop breeding and product development programs.

NBIL is perhaps the only company of its kind in the country that offers a choice of Bt-Cotton technologies. Besides, we offer also a wide range of Bt-Cotton hybrids that suit the need of farmers from Punjab to Karnataka, primarily incorporating the exclusive Fusion-Bt technology of the Chinese Academy of Sciences (used predominantly all over China and exclusively licensed to Nath). However, beginning 2012, we also offer the BG-II version (from Monsanto) of certain elite cotton hybrids for those who may have preference for the American Technology.

Technological up-gradation remains a continual process at the NBIL. In cotton, for example, in addition to stacking GM traits for bollworm protection, we are on the constant lookout for novel germplasm resources for imparting/enhancing resistance/ tolerance against some of the notorious sucking pests, as also dehydration-stress (drought). Big Boll size (for reduced labor and ease in picking) and excellent re-flushing abilities are the additional novelties our new Bt-Cotton products (for Central and South Zone) are almost invariably carrying. Jagannath-2 (mainly for Irrigated high-management areas) as well as Arjun-21 (mainly recommended for the Rain-fed cotton ecosystems), the two frontline NBIL products, have proved themselves to be second to none. Besides, all our pipeline products, whether NBC-51 for the North, or NBC-4, NBC-10 and NBC-11 for the Central and South Zone, all have been found to be significantly superior in the respective State Agricultural University trials, in the states of Punjab, Haryana, Rajasthan, MP, Gujarat, Maharashtra, AP and Karnataka.

Similarly in Maize, NBIL's Singhum (NMH-02) was launched in 2011, after comprehensive trials and testing. True to its name, performance in the Full Season segment, Bihar in particular, has been outstanding. In Maize, our major focus continues to be in the Full Season maturity segment hybrids (Single Cross/Modified Single Cross), which are responsive to high input management, tolerance to major foliar diseases and have wider adaptability. Such hybrids would show superior performance across the states of Karnataka, AP, MH and Bihar. Similarly, we are also developing very competitive hybrids for the Medium Maturity as well as Early Duration hybrids.

Our recent R&D Bajra products, appropriately named Big-B (NBC-1188) has been ranked among the top-selling Bajra products sold in Rajasthan, the hot-bed of Bajra competitors. In fact, Big-B has become a house-hold name among the Bajra dealers, distributors and farmers of Rajasthan. It has acquired the status of 'One of the Top Five' bajra hybrids in the state of Rajasthan, the largest bajra growing state in the country. Another Bajra hybrid (NBH-1717) is gathering momentum and speed in the state of Maharashtra.

Rice remains our major crop and obviously involves very intensive R&D activities. In addition to a very large (12 acres) Research Farm at Medchal (near Hyderabad), we have two other Rice

Exclusive R&D Centres, located at Faizabad (UP) and Purnia (Bihar). In both these states, we have two additional sub-centres located at Hazaribagh (Bihar) and Aligarh (UP).

To summarize, your company is constantly endeavoring to invest time, energy and money in Research and Development efforts to create high yield products to benefit the farming community at large.

INTERNATIONAL COLLABORATIONS:

Nath Bio-Genes, jointly with its sister concern Global Transgenes Ltd., had signed agreement for R&D collaboration and commercialization thereof, of Fusion-Bt. Cotton technology in Philippines. Due processes of trans-boundary regulations, in accordance to the provisions of the Cartgena Protocol, have been followed strictly for transfer of Fusion-Bt. Embedded cotton seeds.

PhilFIDA (Fibre Crops Development Authority, under Govt of The Philippines) is directly coordinating with NBIL-GTL of India, in view of our track record and scientific competence in pursuing the Fusion-Bt Technology approval process in India.

MANAGEMENT DISCUSSION & ANALYSIS

A detailed report on the management discussion and analysis is provided as a separate section in this Annual Report.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally.

The Report on Corporate Governance as stipulated under Clause 49 of Listing Agreement forms part of the Annual Report. The Requisite Certificate from the Auditors of the Company, Gautam N Associates, Chartered Accountants, Aurangabad confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this report.

DIVIDEND

Given the growth requirements of the business and the inadequacy of profits in the Company, the Directors have not recommended any dividend for the financial year 2014-15.

DEPOSITS

Your company has not accepted any fixed deposits during the year under review.

RISK MANAGEMENT

During the year, your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company's enterprise wide risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputati -onal and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks.

DIRECTORS & KEY MANAGERIAL PERSON

Mr. Nandkishor Kagliwal, Director retires by rotation and being eligible offers himself for re- appointment. Pursuant to Clause 49 of the Listing Agreement, Details of Directors retiring by rotation is provided as part of the Notice of the ensuing Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the non-executive directors and executive directors.

AUDITORS

At the Annual General Meeting held on July 5th 2014, M/s Gautam N Associates, Chartered Accountants, Aurangabad were appointed as the Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2018. In terms of the first proviso to Section 139 of the Companies Act 2013, the appointment of the Auditors shall be placed for ratification at every Annual general Meeting. Accordingly, The appointment of M/s Gautam N Associates, Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, The Company has received a certificate from the Auditors to the effect that if they are re-appointed, it would be in accordance with the provisions of section 141 of the Companies Act 2013.

AUDITORS' REPORT

The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

SECRETARIAL AUDITOR

M/s Neha P Agrawal, Practising Company Secretary has been appointed as the secretarial Auditor of the Company for the financial year 2015-16 as required under Section 204 of the Companies Act 2013 and Rules thereunder. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure IV to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

COMMITTEES OF THE BOARD

Currently the Board has six committees: The Audit Committee, the stakeholders' relationship committee, the nomination & remuneration committee, the corporate social responsibility committee, risk Management Committee, & whistle blower committee.

A detailed note on the Board and its committees is provided under the Corporate Governance Report section in this Annual Report. The Composition of the Committees and compliances, as per the applicable provisions of the Act and Rules are as follows:

Committee Committee

Audit Committee K. G Iyer-Chairman Hitesh Purohit, Satish Kagliwal

Stakeholders' K. G Iyer-Chairman Hitesh Purohit,Satish Relationship Kagliwal Committee

Nomination and K.G Iyer-Chairperson Hitesh Purohit, Remuneration Nandkishor Kagiwal Committee

Corporate Social Nandkishor Kagliwal- Chairperson Hitesh Responsibility Purohit K. G. Iyer Committee

Committee

Audit Committee - All recommendations made by the Audit Committee during the year were accepted by the Board.

- In accordance with the requirements of the Listing Agreement, The Company has formulated policies on related party transactions.

Stakeholders' - The Committee reviews and ensures Relationship redressal of investor grievances. Committee - The Committee noted that all the grievances of the investors have been resolved during the year.

Nomination and - To formulate the criteria for Remuneration determining qualifications, positive Committee attributes and independence of a Director, and recommend to the Board a policy, relating to the remuneration for the Directors, key managerial personnel and other employees.

- To carry out evaluation of every Director's performance.

Corporate Social - The Board has laid out the Company's policy Responsibility on CSR and the CSR activities of the Company Committee are carried out as per instructions of the committee.

- The Financial Data pertaining to the Company's CSR activites for

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to Note 13, 14, 15 and 37 to the standalone financial statement).

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134 (3)(c) of the Companies Act, 2013, the Board of Directors hereby confirms that,

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures.

ii. It has in the selection of the accounting policies, consulted the Statutory Auditors and has 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 as at 31st March, 2015 and of the profits of the company for that period.

iii. It has 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 recognized while relying on any system of internal control and records.

iv. It has prepared the annual accounts on a going concern basis.

v. The Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operation efficiently.

vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure V to this Report.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company is annexed herewith as Annexure VI to this Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report.

Having regard to the provisions of the first proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to

INSURANCE

All the insurable interest of the company, including Inventories, Buildings, Machinery etc, is adequately insured.

ACKNOWLEDGEMENT

The employees of NATH BIOGENES (INDIA) LIMITED continue to work with great dedication and commitment. The Board desires to place on record its appreciation to all the employees of 1 company during the year under review.

The Board also acknowledges the support given by Banks, Financial Institutions and Government Authorities. For and on behalf of the Board of Directors

30th May 2015 Registered Office: Nath House, Nath Road, Chairman Managing Director Aurangabad-431005 Nandkishor Kagliwal Satish Kagliwal DIN: 01691691 DIN: 00119601


Mar 31, 2013

The Directors are pleased to present the 19th Annual Report together with the Audited Accounts of your Company for the financial year ended 31st March 2013.

FINANCIAL RESULTS (Rs In Lacs)

YEAR ENDED Sr. PARTICULARS 2012-13 2011-12 No

1. Sales 13770.29 12391.53

2. Profit before Interest & Depreciation 1697.91

3. Interest 367.29 180.63

4. Depreciation 450.98 470.00

5. Profit Before Tax & Extra-ordinary items 1229.61 1047.28

6. Tax Provision (Net of Deferred Tax) (55.04) (12.56)

7. Profit After Tax 1174.56 1059.84

8. Extra-Ordinary Items 0 139.78

9. Profit available for Appropriation 1174.56 920.06

10 Balance carried to Balance Sheet 1174.56 920.06

FINANCIAL HIGHLIGHTS AND OPERATIONS

Income from operations during the financial year ended 31st March 2013 was at Rs 13770.29 Lacs as against Rs 12391.53 Lacs representing an increase of approximately 11% over the previous year. Profit after Tax for the year under review amounted to Rs 1174.56 Lacs as against Rs 1059.84 Lacs in the previous year representing an increase of 10.82%. The increase in profits during the year under review was on account of improved product mix, operational efficiencies resulting in increased sales, reduction in input & interest costs.

NEW PRODUCTS

Technological up-gradation remains a continual process at the NBIL, in cotton, for example, in addition to stacking GM traits for bollworm protection, we are on the constant lookout for novel germplasm resources for imparting / enhancing resistance / tolerance against some of the notorious sucking pests, as also dehydration-stress (drought). Big Boll size ( for reduced labor and ease in picking) and excellent re-flushing abilities are the additional novelties ( our new Bt- Cotton products ( for Central and South Zone) are almost invariably carrying). Jagannath-2 (mainly for irrigated high-management areas) as well as Arjun-21 ( mainly recommended for the Rain-fed cotton ecosystems), the two frontline NBIL products, have proved themselves to be second to non.

Our recent R & D Bajra product, appropriately named Big-B (NBC-1188) has been ranked among the top three Bajra products sold in Rajasthan (2012) , the hot-bed of Bajra competitors, Local news papers are full of praise for the "Dark Horse" Big-B that emerged from the lower ranks last year (2011) to occupy a prestigious position in 2012.

Similarly in Maize after comprehensive trials and testing, NBIL''s Singhum (NMH-02) was launched in 2011, true to its name, performance in the Full Season segment, Bihar in particular, has been outstanding. Two more single-cross hybrids (NMH-1008 and NMH-1007) are currently under intensive multi-location testing.

Rice remains our major crop and obviously involves very intensive R & D activities. "Tehelka" is new R & D product.

RESEARCH AND DEVELOPMENT

The company continues to provide substantial financial allocations to further strengthen its R & D programs. In fact, intensification of our R & D infrastructure ( men and materials, all over the country) was the largest in any single financial year (2011 - 12), thus far. The competitive environment in the area of hybrid seeds is rapidly growing worldwide, so also in our country as well.

It is no longer good enough to offer high yielding hybrid varieties to the Indian Farmers. It is now becoming a mandatory requirement that such hybrids carry additional built-in value through seed embedded technologies / genes providing durable protection against specific diseases, pests and vagaries of nature ( floors/ drought / heat stress etc.).

Seeds endowed with multiple value additions, in addition to high yield potential, are much in demand and eagerly sought after by the modern Indian Farmers. At NBIL, your Company has undertaken specific initiatives of reaching out even to the rain-fed and largely un-reached farmers. This is in congruence with our national priorities and commitments, as also in harmony with finding newer areas of opportunities for business. NBIL is pursuing both Genetic Engineering Technologies as well as Molecular-Aided Selection systems to enrich our crop breeding and product development programs.

INTERNATIONAL R&D COLLABORATIONS:

Nath Bio-Genes, jointly with its sister concern Global Transgenes Ltd., have signed agreements for R & D collaboration and commercialization thereof, of Fusion-Bt. Cotton technology, with specific partners in Pakistan and Philippines. Due processes of trans-boundary regulations, in accordance to the provisions of the Cartgena Protocol, have been followed strictly for transfer of Fusion-Bt. Embedded cotton seeds. During 2011 permission was granted, by the Government of Pakistan for conducting Large Scale Trial of some of the NBIL Bt. Cotton hybrids in Pakistan.

Based on the impressive results of trial, the Bio-safety Authority of the Philippines have granted permission for Multi Location Trials to be conducted in 2012-13. These MLTs are currently in progress in Southern Philippines.

DIRECTORS

During the year Mr. Kashinath Iyer & Mr. Hitesh Purohit have been appointed as the Independent directors of the company.

Mr. Akash Kagliwal has resigned from the Board of Directors of the company during the year & the Board acknowledges his contribution to the group.

Mr. Hitesh Purohit, Director retires by rotation and being eligible offers himself for re- appointment. Pursuant to Clause 49 of the Listing Agreement, Details of Directors retiring by rotation is provided as part of the Notice of the ensuing Annual General Meeting.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Pursuant to clause 49 of the Listing Agreement with the Stock Exchanges, the management Discussion and Analysis Report, is annexed to this Report and forms part of this Annual Report.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Report on Corporate Governance as stipulated under Clause 49 of Listing Agreement forms part of the Annual Report. The Requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this report.

DIVIDEND

Given the growth requirements of the business, it is necessary for the Company to plough back its profits into the business, and hence the Directors have not recommended any dividend for the financial year 2012-13.

SUBSIDIARIES

There is one subsidiary company as on 31st March, 2013. The financial details of the subsidiary companies as well as the extent of holding therein are provided in a separate section of this Annual Report.

The Ministry of Corporate Affairs has, vide General Circular No. 2/2011 dated 8th February, 2011, granted general exemption for not attaching the annual accounts of the subsidiary companies with the annual accounts of holding company. However, these documents shall be made available upon request by any member of the Company interested in obtaining the same and shall also be kept for inspection at the Registered Office of your Company and that of Subsidiary Companies concerned. Further, the financial data of the Subsidiary Companies has been furnished along with the statement pursuant to Section 212 of the Companies Act, 1956 forming part of this Annual Report.

PUBLIC DEPOSITS

Your company has not accepted any fixed deposits during the year under review.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING & OUTGO:

Information as required in terms of the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 in respect of conservation of energy, technology absorption and foreign exchange Earnings and outgo is as follows;

CONSERVATION OF ENERGY:

The Company has taken necessary measures to achieve economy in consumption of energy. TECHNOLOGY ABSORPTION & RESEARCH AND DEVELOPMENT:

Your Company is intensely research driven & has one of the best collections of talent & germ plasm pool in the industry. Your Company is continuously developing seeds for better resistance to pests, diseases & moisture stress for higher productivity.

Expenditure on R & D Rs. 9,06,93,877

AUDITORS

M/s Gautam N Associates, Chartered Accountants, Aurangabad Statutory Auditors of the Company, will retire at the conclusion of the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment as statutory auditors for the financial year 2013-14. The Company has received a letter dated April 1, 2013 from them to the effect that their re- appointment, if made, would be within the limit prescribed under section 224(1B) of the Companies Act, 1956, and that they are not disqualified for such re-appointment within the meaning of Section 226 of the Companies Act, 1956.

The Auditors have vide their letter dated April 22, 2013 also confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and holds a valid certificate issued by the peer Review Board of the ICAI.

The Board hereby requests the members to reappoint M/s Gautam N Associates, Chartered Accountants, Aurangabad as the Auditors for the current year.

AUDITORS REPORT

The observations of the Auditors, together with the notes to Accounts referred to in the Auditors'' Report, are self-explanatory and do not call for any further explanation from the Directors.

PARTICULARS OF EMPLOYEES

As required by Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the information be treated as NIL, as no employee is drawing salary equals to or above the limits mentioned in the said Section and Rules.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217 (2AA) of Companies Act, 1956, the Board of Directors hereby confirms that,

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures.

ii. It has in the selection of the accounting policies, consulted the Statutory Auditors and has 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 as at 31st March, 2013 and of the profits of the company for that period.

iii. It has 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 recognized while relying on any system of internal control and records.

iv. It has prepared the annual accounts on a going concern basis.

INSURANCE

All the insurable interest of the company, including Inventories, Buildings, Machinery etc, is adequately insured.

INDUSTRIAL RELATIONS

Industrial relations remained cordial throughout the year under review.

ACKNOWLEDGEMENT

Your Directors record their gratitude to the Financial Institutions, Banks and other Government departments for their continued assistance and co-operation extended to your Company during the year under report.

Your Directors also wish to place on record, their appreciation for the dedicated services of the employees of your Company at all levels.

By order of the Board of Directors

29h May 2013 Chairman Mananging Director

Place: Aurangabad Nandkishor Kagliwal Satish Kagliwal

 
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