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Directors Report of Venky's (India) Ltd.

Mar 31, 2015

Dear Memers,

The Directors have pleasure in presenting the Thirty Ninth Annual Report and audited accounts for the financial year ended 31st March 2015.

FINANCIAL SUMMARY

(Rs. in Lacs)

Description 2014-15 2013-14

Revenue from Operations (Net) 1,73,081 1,73,612

Operating Expenditure 1,63,175 1,67,011

Depreciation 3,215 1,924

Operating Profit 6,691 4,677

Finance Costs 7,419 4,260

Exceptional Items 155 1,053

(Depreciation/ Profit on sale of Fixed Assets)

Other Income 3,345 2,989

Profit Before Tax 2,772 4,517

Provision for Tax 902 1,112

Tax adjustment in respect of — — earlier years

Profit for the year 1,870 3,404

Amount available for 6,836 7,515 appropriation

Appropriations :

Transfer to General Reserve 2,000 2,000

Proposed Dividend 470 470

Dividend Distribution Tax 96 80

Net Surplus in the Statement of 4,270 4,966 Profit and Loss

OPERATIONS

For the year ended 31st March, 2015, the Company's sales turnover was at Rs. 1,73,081 lacs as against Rs. 1,73,612 lacs in the previous year. The profit before tax stood at Rs. 2,772 lacs as compared to Rs. 4,517 lacs in the previous year. During the year the cost of raw material like maize and soya deoiled cake was on higher side and realizations from the sale of grown up broiler birds were on lower side.

During the year under review, the Poultry and Poultry Products Segment showed improved performance as compared to the previous year. Performance of the animal health products segment was better as compared to the previous year. However, the performance of the oilseed segment was affected due to lower realizations.

EXPANSION

All the expansion programmes of the Company i.e. to augment capacities in poultry and poultry products segment and setting up a new plant for processing of soya seeds have been completed during the year under review. Setting up of Venky's XPRS outlets at various locations is under way.

DIVIDEND

Your Directors recommend a dividend of Rs. 5.00 per equity share (50%). The dividend, if approved at the ensuing Annual General Meeting, will absorb Rs. 470 lacs (previous year Rs. 470 lacs) plus taxes. Your Directors propose to transfer Rs. 2,000 lacs to the General Reserve.

SEGMENT-WISE PERFORMANCE

Operational performance of each business segment has been comprehensively covered in the Management Discussion and Analysis Report given in Annexure-A which forms part of this Report.

CORPORATE GOVERNANCE REPORT

As per the requirements of Clause 49 of the Listing Agreement a separate report on Corporate Governance along with the certificate issued by Company Secretary in Whole-Time Practice thereupon is given in Annexure-B which forms part of this Report.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 92 of the Companies Act, 2013 an extract of the Annual Return in Form MGT-9 is annexed to this report as Annexure C and forms of this report.

MEETINGS OF BOARD

During the year 2014-15, five meetings of the Board of Directors were held. The dates on which the said meetings were held are as follows:

1) 12th May, 2014, 2) 29th May, 2014, 3) 11th August, 2014, 4) 12th November, 2014, 5) 11th February, 2015.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors declare that :

1. the accounts for the year ended 31st March, 2015 have been prepared by following applicable accounting standards;

2. the Directors 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 ended 31st March, 2015 and of the profit of the Company for that year;

3. proper care has been taken for the maintenance of adequate records for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

4. the accounts for the year ended 31st March, 2015 have been prepared on a going concern basis;

5. internal financial controls to be followed by the company are laid down and that such internal financial controls are adequate and are operating effectively; and

6. proper systems are devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

BOARD OF DIRECTORS & THEIR COMMITTEES

a. Changes in the Composition of Board of Directors.

As per the provisions of Companies Act, 2013 and Articles of Association of the Company, Mrs. Anuradha J. Desai, Director is due for retirement by rotation at the ensuing Annual General Meeting and, being eligible, offers herself for reappointment. A brief profile of the retiring director is given in the Corporate Governance Report annexed to this report.

Apart from the above, there is no change in the Board of Directors of the Company.

b. Declaration from Independent Directors:

Pursuant to Section 149(7) of the Companies Act, 201 3, the Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as stipulated under sub section 6 of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

c. Policy relating to the remuneration for directors, key management personnel & other employees.

The Company's policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided in sub section 3 of Section 178 is available on the website of the Company at http://www.venkys.com/Policy on Remuneration of Director, KMP etc.pdf

d. Annual evaluation by the Board of its own performance and that of its Committees.

The board annually performs the evaluation of its own performance, the Committees of the Board and that of individual directors. While carrying out such evaluation various aspects relating to the Board functioning such as adequacy of composition, level of diversity of the Board, execution of specific duties, governance etc. are considered. The same mechanism is applied while evaluating the performance of the Committees of the Board and additionally the fulfillment of duties and scope as stipulated by the Companies Act, 2013 and Listing Agreement is considered.

The performance evaluation of individual directors is carried considering factors like execution of specific assignments, effective contribution to the Board discussions and decisions, independence of judgment and steps taken towards proper governance of business and safeguarding interest of stakeholders.

e. Familiarisation Programme of Independent Directors

The Company at selected intervals takes steps to familiarise its independent directors about their roles, rights and responsibilities. The details of such programme is available on the website of the Company at http://www.venkys.com/ Familiarisation Programme for ID.pdf

f. Audit Committee:

The Company has already formed Audit Committe as per Section 177 of the Companies Act 2013. Details of such committee is given in corporate goverence report which is annexed and forms part of this report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review the Company has not given any loans, guarantees or made investments under Section 186 of the Companies Act, 2013.

RISK MANAGEMENT

The Company has in place a risk management plan devised by the Board and focuses on three key elements i.e. Risk Assessment, Risk Management and Risk Monitoring. The Board therefore identifies elements of risk, focus on mitigating the risk as per the plan and monitor the same post execution.

CORPORATE SOCIAL RESPONSIBILITY

VH Group and in particular Venky's (India) Limited has been historically doing CSR activities concentrated on educational and medical services for the uplifment of the society. Your company has pursuant to Section 135 of the Companies Act, 2013 formed a CSR Committee. The Annual Report on CSR for the F.Y. 2014-15 is appended as Annexure D to this report. The policy on CSR is available on the website of the company at http:// www.venkys.com/CSR Policy.pdf.

INTERNAL FINANCIAL CONTROLS

The internal control system is designed to ensure that all the financial and other records are reliable for preparing financial statements and for maintaining accountability of the assets. The Company has a proper and adequate system of internal controls.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your company has established a Vigil Mechanism as per the provisions of the Companies Act, 2013 for the directors and employees to report genuine concerns. The Audit Committee overlooks this function. The details of vigil mechanism is available on the website of the Company at http:// www.venkys.com/VIGIL MECHAHISM.pdf.

DEPOSITS

During the year under review the Company has neither accepted any deposits under Chapter V of the Companies Act, 2013 nor any such deposits remained unpaid or unclaimed.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Pursuant to the provisions of Section 134 of the Companies Act, 2013, read with Rule 8 (2) of the Companies (Accounts) Rules, 2014, contracts or arrangements entered into by the Company with Related Parties have been done at arm's length and are in the ordinary course of business. Hence, no particulars are being provided in Form AOC - 2. However, Related Party disclosures as per AS -18 have been provided in Note no. 10 to the Financial Statements.

ACCOUNTS

The accounts read with the notes thereon are selfexplanatory and hence do not call for any further comments.

INSURANCE

The assets of the Company which include buildings, sheds, machinery, stocks, etc. are adequately insured.

PERSONNEL AND HUMAN RESOURCES

Employee relations continued to be cordial throughout the year. The Company did not have any employee during the year under review whose remuneration is required to be disclosed in terms of the provisions of Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014. Further information as per said rule is appended to this report as Annexure E.

AUDITORS

M/s. Sudit K. Parekh & Co., Chartered Accountants, were appointed in the 38th Annual General Meeting and their appointment is liable for ratification in the ensuing Annual General Meeting.

SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act, 2013 and allied rules thereof, the Board of Directors has appointed Mr. P. L. Shettigar, Practicing Company Secretary as Secretarial Auditor for conducting the audit for the financial year 2014-15. The Secretarial Audit report issued by Mr. Shettigar is appended as Annexure F and forms part of this report. The Secretarial Audit report does not contain any qualification, reservation or adverse remark.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Record and Audit) Rules, 2014 the Company has appointed M/s. Joshi Apte & Associates, Pune as Cost Auditors of the Company for conducting cost audit for the financial year 2015-16. Further, as per sub section (3) of Section 148 of the Companies Act, 2013 the remuneration decided between the Board of Directors and Cost Auditor is put before the members for their ratification in the ensuing Annual General Meeting. The Cost Audit for the financial year ended 31st March, 2015 is under process and the Company will submit the Cost Auditors' Report to the Central Government in time.

INFORMATION UNDER SECTION 134 READ WITH RULE 8 OF THE COMPANIES (ACCOUNTS) RULES, 2014

A. Conservation of Energy

The operations of the Company are not very power intensive. Nevertheless, the Company continues its efforts to conserve energy wherever practicable, by economizing on the use of power at the farms, hatchery and offices. The Company has installed state-of-the-art hatchers and setters at its hatcheries.

B. Technology Absorption

1. Research and Development (R & D)

a) Specific areas: R & D activities of the Company are concentrated in the areas of developing wider application of Specific Pathogen Free (SPF) eggs and application of various breeder management techniques to improve productivity and increase feed efficiency.

b) Benefits derived : Wider acceptance of SPF eggs in the manufacture of human and livestock vaccines in India and higher production and increased feed efficiency of breeders.

c) Plan of action : Further promotion of SPF eggs applications in the biological industry

d) Expenditure on R & D : The expenditure incurred by the Company during the year on Research and Development was Rs. 69.49 Lacs.

2. Technology Absorption, Adaptation and Innovation

a) Efforts made : The Company maintains continuous interaction with Charles River Laboratories Inc. (formerly SPAFAS Inc.), U.S.A for absorption of technology.

b) Benefits :

i. Development of new application

ii. Savings in foreign exchange through import substitution.

c) Technology Imported : SPF egg production and Reagent production technologies were imported from Charles River Laboratories Inc. The benefit of the ongoing research by them in the said technologies is being derived by the Company through continued association with them.

C. Foreign Exchange Earnings and Outgo

1. Efforts have been made to increase exports of hatching eggs and SPF eggs.

2. Earnings and outgo:

a. Foreign exchange earnings (FOB):

Rs. 213.25 lacs

b. Foreign exchange outgo:

Rs. 1,353.75 lacs

ACKNOWLEDGEMENT

The Directors place on record their appreciation for the excellent services of the employees at all the levels. The Company also expresses its thanks to its shareholders, bankers, Central and State Governments and district level authorities, Stock Exchanges, dealers and customers of the Company for their valued support.

For and on behalf of the Board of Directors

Pune Anuradha J. Desai May 29, 2015 Chairperson




Mar 31, 2014

The Directors have pleasure in presenting the Thirty Eighth Annual Report and audited accounts for the financial year ended 31st March, 2014.

FINANCIAL RESULTS

(Rs. in Lacs)

Description 2013-14 2012-13

Revenue from Operations (Net) 1,73,612 1,42,643

Operating Expenditure 1,67,011 1,36,604

Depreciation 1,924 1,554

Operating Profit 4,676 4,484

Finance Costs 4,260 2,314

Exceptional Items - Income 1,053 -

Other Income 3,048 1,750

Profit Before Tax 4,517 3,920

Provision for Tax 1,112 1,383

Tax adjustment in respect of - 59

earlier years

Profit for the year 3,404 2,478

Amount available for 7,515 6,660

appropriation

Appropriations:

Transfer to General Reserve 2,000 2,000

Proposed Dividend 470 470

Dividend Distribution Tax 80 80

Net Surplus in the Statement 4,966 4,111 of Profit and Loss

OPERATIONS

Sales turnover for the year ended 31st March, 2014 amounted to Rs. 1,73,612 Lacs as against Rs. 1,42,643 Lacs achieved in the previous year, registering a growth of 21.71%. Profit before tax was higher at Rs.4,517 Lacs as compared to Rs.3,920 Lacs in the previous year, showing an increase of 15.23%.

During the year under review, Poultry and Poultry Products Segment showed improved performance as compared to the previous year, in spite of continuous high cost of feed ingredients and lower realisations from sale of day old chicks and grown up birds for most of the periods. Performance of the Animal Health Products segment was satisfactory. As regards the oilseed segment, the profitability has been lower as compared to the previous year due to lower realisations.

EXPANSION

(A) The Company''s expansion programme initiated in March, 2013 at an estimated cost of Rs.125 crores to augment capacities in poultry and poultry products segment, setting up a new plant for processing of soya seeds and setting up of Venky''s XPRS outlets is under way and it is expected that the same will be completed by the second quarter of the current year.

(B) As part of inorganic expansion plan and to consolidate poultry operations in North India to increase operational efficiency and to strengthen the geographical presence for the Company in North India, the Company acquired poultry and packaging business operations, on going concern basis, of Venkateshwara Hatcheries Private Limited - its holding company - at a cost of around Rs. 75 crores. The acquired units are situated in Northern India in the States of Haryana, Punjab, Himachal Pradesh and Uttarakhand.

DIVIDEND

Your Directors recommend a dividend of Rs. 5.00 per equity share (50%). The dividend, if approved at the ensuing Annual General Meeting, will absorb Rs. 470 Lacs (previous year Rs. 470 Lacs).

SEGMENT-WISE PERFORMANCE

Operational performance of each business segment has been comprehensively covered in the Management Discussion and Analysis Report given in Annexure-A which forms part of this Report.

CORPORATE GOVERNANCE

As per the requirements of Clause 49 of the Listing Agreement a separate report on Corporate Governance along with the certificate issued by Company Secretary in Whole-Time Practice thereupon is given in Annexure-B which forms part of this Report.

DIRECTORS

As per the provisions of Articles of Association of the Company, Mr. Jitendra M. Desai, Director is due for retirement by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for reappointment.

Brig. (Retd.) Amrit Kapur and Brig. (Retd.) Rajeshwar Singh Rathore were appointed as Additional Directors with effect from 23rd January, 2014 and as per the Articles of Association hold office upto the date of the ensuing Annual General Meeting and are eligible for appointment as Independent Directors for a tenure of 5 years as per the applicable provisions of the Companies Act, 2013 and Listing Agreement.

The other Independent Directors viz. Mr. C. Jagapati Rao, Lt. Col (Retd.) Ashok Mahajan and Col (Retd.) Surinder Kumar are required to be re-appointed as Independent Directors for a tenure of 5 years as per the provisions of the Companies Act, 2013 and Listing Agreement and are eligible for re-appointment.

Apart from the above, there is no change in the Board of Directors of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors declare that :

1. the accounts for the year ended 31st March, 2014 have been prepared by following applicable accounting standards;

2. the Directors 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 ended 31st March, 2014 and of the profit of the Company for that year;

3. proper care has been taken for the maintenance of adequate records for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

4. the accounts for the year ended 31st March, 2014 have been prepared on a going concern basis.

ACCOUNTS

The accounts read with the notes thereon are self- explanatory and hence do not call for any further comments.

INSURANCE

The assets of the Company which include buildings, sheds, machinery, stocks, etc. are adequately insured.

PERSONNEL AND HUMAN RESOURCES

Employee relations continued to be cordial throughout the year. The Company did not have any employee during the year under review whose remuneration is required to be disclosed in terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended.

AUDITORS

M/s. Sudit K. Parekh & Co., Chartered Accountants, hold office of Statutory Auditors upto the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013, the Company has appointed M/s. Joshi Apte & Associates, Pune as Cost Auditors of the Company for conducting cost audit for the financial year 2014- 15 subject to the relevant orders and notifications as the Central Government may issue in terms of sub section (1) of Section 148 of the Companies Act, 2013. Further, as per sub section (3) of Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 the remuneration decided between the Board of Directors and Cost Auditor is put before the members for their ratification in the ensuing Annual General Meeting. The Cost Audit for the financial year ended 31st March, 2014 is under process and the Company will submit the Cost Auditors'' Report to the Central Government in time.

INFORMATION UNDER SECTION 217(1)(e)

ACKNOWLEDGEMENT

The Directors place on record their appreciation for the excellent services of the employees at all the levels. The Company also expresses its thanks to its shareholders, bankers, Central and State Governments and district level authorities, Stock Exchanges, dealers and customers of the Company for their valued support.

For and on behalf of the Board of Directors

Pune ANURADHA J. DESAI

May 29, 2014 Chairperson


Mar 31, 2013

The Shareholders,

The Directors have pleasure in presenting the Thirty Seventh Annual Report and audited accounts for the financial year ended 31st March 2013.

FINANCIAL RESULTS

(Rs. in lacs)

Description 2012-13 2011-12

Revenue from Operations (Net) 1,42,643 99.029

Operating Expenditure 1,36,628 92,216

Depreciation 1,554 1,178

Operating Profit 4,461 5,635

Finance Costs 2,314 1.541

Other Income 1,773 1.625

Profit Before Tax 3,920 5,719

Provision for Tax 1,383 1.613

Tax adjustment in respect of 59 - earlier years

Profit for the year 2,478 4,106

Amount available for 6,660 12,228 appropriation

Appropriations :

Transfer to General Reserve 2,000 7,500

Proposed Dividend 470 470

Dividend Distribution Tax 80 76

Net Surplus in the Statement 4,111 4,182 of Profit and Loss

OPERATIONS

Sales turnover for the year ended 31st March, 2013 amounted to Rs. 1,42,911 lacs as against Rs.99,246 lacs achieved in the previous year, registering a growth of 44%. Profit before tax was lower at Rs. 3,920 lacs as compared to Rs.5,719 lacs in the previous year, showing a decline of 31%.

During the year under review, the performance of the poultry and poultry products segment was affected due to the unprecedented high cost of feed ingredients and the lower realizations from sale of day old chicks and grown up birds. While the cost of feed ingrediens went up by 40% to 45%, the increase in prices of eggs and chicken was only by 20% to 25%. The extent of increase in the prices of raw material is unprecedented in the history of the poultry industry by far, and this can be considered as the worst year experienced by the poultry industry. This was largely responsible for the overall decline in profits of the Company. Performance of the other two segments, viz. animal health products and oilseed has been satisfactory.

EXPANSION

(A) During the year under review, the Company has completed all the expansion-cum- modernisation programme which was started in August, 2011. The expansion was to augment the capacities in Poultry and Poultry Products and Animal Health Products Segments, modernisation in Oilseed Segment and for setting up of Venky''s XPRS outlets.

(B) The Company has initiated another expansion programme in March, 2013 at an estimated cost of Rs.125 crores, to further augment capacities in poultry and poultry products segment, setting up a new plant for processing of oil seeds and setting up of Venky''s XPRS outlets. This will be funded by internal accruals and long term loans. Benefits of the expanded capacities will start accruing to the Company from next year.

DIVIDEND

Your Directors recommend a dividend of Rs.5.00 per equity share (50%). The dividend, if approved at the ensuing Annual General Meeting, will absorb Rs. 470 lacs (previous year Rs. 470 lacs).

SEGMENT-WISE PERFORMANCE

Operational performance of each business segment has been comprehensively covered in the Management Discussion and Analysis Report given in Annexure-A which forms part of this Report.

CORPORATE GOVERNANCE

As per the requirements of Clause 49 of the Listing Agreement a separate report on Corporate Governance along with the certificate issued by Company Secretary in Whole-Time Practice thereupon is given in Annexure-B which forms part of this Report.

DIRECTORS

As per the provisions of Articles of Association of the Company, Mr. B. Venkatesh Rao and Mr. Jitendra M. Desai, Directors are due for retirement by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment.

The term of office of Mr. B. Balaji Rao, Managing Director of the Company expired on 31.10.2012. The Board of Directors at its meeting held on 29.10.2012 has re-appointed Mr. B. Balaji Rao as Managing Director of the Company for a period of 5 years with effect from 01.11.2012. Brief terms and conditions of his appointment and remuneration are set out in the explanatory statement attached to the notice.

Mr. S. B. Thorat has tendered his resignation from the post of Director at the meeting of Board of Directors held on 30th May, 2013. The Board wishes to place on record its gratitude and appreciation for the co-operation and guidance rendered by him during his tenure as a Director.

Apart from the above, there is no change in the Board of Directors of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors declare that :

1. the accounts for the year ended 31st March, 2013 have been prepared by following applicable accounting standards;

2. the Directors 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 ended 31st March, 2013 and of the profit of the Company for that year;

3. proper care has been taken for the maintenance of adequate records for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

4. the accounts for the year ended 31st March, 2013 have been prepared on a going concern basis.

ACCOUNTS

The accounts read with the notes thereon are self- explanatory and hence do not call for any further comments.

INSURANCE

The assets of the Company which include buildings, sheds, machinery, stocks, etc. are adequately insured.

PERSONNEL AND HUMAN RESOURCES

Employee relations continued to be cordial throughout the year. The Company did not have any employee during the year under review whose remuneration is required to be disclosed in terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended.

AUDITORS

M/s. Sudit K. Parekh & Co., Chartered Accountants, hold office of Statutory Auditors upto the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

COST AUDITORS

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit in respect of certain products of the Foods Division, Animal Health Products Division and Oil Seed Division of the Company. The Board has appointed M/s. Joshi Apte & Associates, Pune as Cost Auditors of the Company for the financial year 2013-14. The Cost Audit is under process and the Company will submit the Cost Auditors'' Report to the Central Government in time.

INFORMATION UNDER SECTION 217(1)(e)

A. Conservation of Energy

The operations of the Company are not power intensive. Nevertheless, the Company continues its efforts to conserve energy wherever practicable, by economising on the use of power at the farms, hatcheries and offices. The Company has installed state-of-the-art hatchers and setters at its hatcheries.

B. Technology Absorption

1. Research and Development (R & D)

a) Specific areas : R & D activities of the Company are concentrated in the areas of developing wider application of Specific Pathogen Free (SPF) eggs and application of various breeder management techniques to improve productivity and increase feed efficiency.

b) Benefits derived : Wider acceptance of SPF eggs in the manufacture of human and livestock vaccines in India and higher production and increased feed efficiency of breeders.

c) Plan of action : Further promotion of SPF eggs applications in the biological industry

d) Expenditure on R & D : The expenditure incurred by the Company during the year on Research and Development was Rs.56 lacs.

2. Technology Absorption, Adaptation and Innovation

a) Efforts made :The Company maintains continuous interaction with Charles River Laboratories Inc. (formerly SPAFAS Inc.), U.S.A for absorption of technology.

b) Benefits :

i. Development of new application

ii. Savings in foreign exchange through import substitution.

c) Technology Imported : SPF egg production and Reagent production technologies were imported from Charles River Laboratories Inc. The benefit of the ongoing research by them in the said technologies is being derived by the Company through continued association with them.

C. Foreign Exchange Earnings and Outgo

1. Efforts have been made to increase exports of hatching eggs and SPF eggs.

2. Earnings and outgo :

a. Foreign exchange earnings (FOB) : Rs.210.11 lacs

b. Foreign exchange outgo : Rs.896.80 lacs

ACKNOWLEDGEMENT

The Directors place on record their appreciation for the excellent services of the employees at all the levels. The Company also expresses its thanks to its shareholders, bankers, Central and State Governments and district level authorities, Stock Exchanges, dealers and customers of the Company for their valued support.

For and on behalf of the Board of Directors

Pune ANURADHA J. DESAI

May 30, 2013 Chairperson


Mar 31, 2012

The Directors have pleasure in presenting the Thirty Sixth Annual Report and audited accounts for the financial year ended 31st March 2012.

FINANCIAL RESULTS (Rs. in lakhs)

Description 2011-12 2010-11

Revenue from Operations (Net) 99,029 85,176

Operating Expenditure 92,216 73,814

Depreciation 1,178 965

Operating Profit 5,635 10,397

Finance Costs 1,541 468

Other Income 1,625 847

Profit Before Tax 5,719 10,776

Provision for Tax 1,613 3,473

Profit for the year 4,106 7,303

Amount available for 12,228 18,668 appropriation

Appropriations :

Transfer to General Reserve 7,500 10,000

Proposed Dividend 470 470

Dividend Distribution Tax 76 76

Net Surplus in the Statement of 4,182 8,122 Profit and Loss

OPERATIONS

Sales turnover for the year ended 31st March, 2012 amounted to Rs. 99,246 lakhs as against Rs. 85,306 lakhs achieved in the previous year, registering a growth of 16.3%. Profit before tax was lower at Rs. 5,719 lakhs as compared to Rs. 10,776 lakhs in the previous year, showing a decline of 47%.

During the year under review, the poultry and poultry products segment registered lower profits due to high cost of feed ingredients and lower realizations from sale of day old chicks and grown up birds. Performance of this segment was largely responsible for overall decline in profits of the Company. Performance of the other two segments, viz. animal health products and oilseed has been satisfactory.

EXPANSION

During the year under review, the Company has undertaken an expansion-cum-modernisation programme at an estimated cost of Rs.10,700 lakhs, to augment the capacities in Poultry and Poultry Products and Animal Health Products Segments, modernisation in Oilseed Segment and for setting up of 'Venky's Xprs' outlets.

The expansion-cum-modernisation programme is funded by internal accruals and long term loans. Benefits of the expanded capacities will start accruing to the Company from second half of the current financial year.

DIVIDEND

Your Directors recommend a dividend of Rs. 5.00 per equity share (50%). The dividend, if approved at the ensuing Annual General Meeting, will absorb Rs. 470 lakhs (previous year Rs. 470 lakhs).

SEGMENT-WISE PERFORMANCE

Operational performance of each business segment has been comprehensively covered in the Management Discussion and Analysis Report given in Annexure-A which forms part of this Report.

CORPORATE GOVERNANCE

As per the requirements of Clause 49 of the Listing Agreement a separate report on Corporate Governance along with the certificate issued by Company Secretary in Whole-Time Practice thereupon is given in Annexure-B which forms part of this Report.

DIRECTORS

The Board regrets to report that Mr. B.G. Deshmukh, Director, expired on 7th August, 2011. Late Mr. B.G. Deshmukh was on Board of the Company for 16 years. With his vast management and administrative expertise coupled with proven knowledge, he made remarkable contribution to the growth of the Company. The Directors express their sorrow on the sad demise of Mr. B.G. Deshmukh and place on record their appreciation for the contribution made by him during his tenure as Director of the Company.

Col. (Retd.) Surinder Kumar has been appointed as an Additional Director with effect from 20th February, 2012. As per Articles of Association of the Company, he holds office till the date of ensuing Annual General Meeting and is eligible for appointment.

As per the provisions of Articles of Association of the Company, Mrs. Anuradha J. Desai and Mr. C. Jagapati Rao, Directors are due for retirement by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors declare that:

1. the accounts for the year ended 31st March, 2012 have been prepared by following applicable accounting standards;

2. the Directors 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 ended 31st March, 2012 and of the profit of the Company for that year;

3. proper care has been taken for the maintenance of adequate records for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

4. the accounts for the year ended 31st March, 2012 have been prepared on a going concern basis.

FIXED DEPOSITS

The Company has discontinued the fixed deposit schemes. As on 31st March, 2012 no deposits were due for repayment and remained unclaimed.

ACCOUNTS

The accounts read with the notes thereon are self- explanatory and hence do not call for any further comments.

INSURANCE

The assets of the Company which include buildings, sheds, machinery, stocks, etc. are adequately insured.

PERSONNEL AND HUMAN RESOURCES

Employee relations continued to be cordial throughout the year. The Company did not have any employee during the year under review whose remuneration is required to be disclosed in terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended.

AUDITORS

M/s. Sudit K. Parekh & Co., Chartered Accountants, hold office of Statutory Auditors upto the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

COST AUDITORS

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit in respect of certain products of the Animal Health Products Division of the Company. The Board has appointed M/s. D.V. Joshi, Apte & Associates, Pune as Cost Auditors of the Company for the financial year 2011-12. The Cost Audit is under process and the Company will submit the Cost Auditors' Report to the Central Government in time.

INFORMATION UNDER SECTION 217(1)(e)

A. Conservation of Energy

The operations of the Company are not power intensive. Nevertheless, the Company continues its efforts to conserve energy wherever practicable, by economising on the use of power at the farms, hatchery and offices. The Company has installed state-of-the-art hatchers and setters at its hatcheries.

B. Technology Absorption

1. Research and Development (R & D)

a) Specific areas: R & D activities of the Company are concentrated in the areas of developing wider application of Specific Pathogen Free (SPF) eggs and application of various breeder management techniques to improve productivity and increase feed efficiency.

b) Benefits derived : Wider acceptance of SPF eggs in the manufacture of human and livestock vaccines in India and higher production and increased feed efficiency of breeders.

c) Plan of action : Further promotion of SPF eggs applications in the biological industry

d) Expenditure on R & D : The expenditure incurred by the Company during the year on Research and Development was Rs.44.03 lakhs.

2. Technology Absorption, Adaptation and Innovation

a) Efforts made : The Company maintains continuous interaction with Charles River Laboratories Inc. (formerly SPAFAS Inc.), U.S.A for absorption of technology.

b) Benefits :

i. Development of new application

ii. Savings in foreign exchange through import substitution.

c) Technology Imported : SPF egg production and Reagent production technologies were imported from Charles River Laboratories Inc. The benefit of the ongoing research by them in the said technologies is being derived by the Company through continued association with them.

C. Foreign Exchange Earnings and Outgo

1. Efforts have been made to increase exports of hatching eggs and SPF eggs.

2. Earnings and outgo:

a. Foreign exchange earnings (FOB) : Rs.240.69 lakhs

b. Foreign exchange outgo : Rs. 746.74 lakhs

ACKNOWLEDGEMENT

The Directors place on record their appreciation for the excellent services of the employees at all the levels. The Company also expresses its thanks to its shareholders, bankers, Central and State Governments and district level authorities, dealers and customers of the Company for their valued support.

For and on behalf of the Board of Directors

Pune ANURADHA J. DESAI

May 29, 2012 Chairperson

 
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