Your Directors take immense pleasure in presenting their 21st Annual Reporton the business and operations together with the Audited Accounts of the Company for theyear ended March 31 2015.
Camson Bio Technologies Limited ("Camson" or "CBTL") is India'sfirst integrated IPR driven agricultural biotechnology company. Founded in 1993 theCompany is headquartered in Bangalore with primary focus on biotech R&D. The Companyis a pioneer of zero residue farming products which uses secondary metabolites(biological origin) of microbes to kill / inhibit pathogens with no use of chemicals.CBTL has been recognized by Deloitte as one the fastest growing technology companies in2015 and conferred the Technology Fast 500 award and awarded Leaders of Tomorrow Award byET Now & Indiamart 2014-15. The Company has highly specialized R&D capabilitieshaving developed the Proprietary Technology Platform for research with 4000+ microbiallibrary and 60+ hybrid seeds varieties.
Standalone Financial Results:
|(Rs. in million) ||FY 2015 ||FY 2014 |
|Net Sales ||1693.82 ||1456.28 |
|Profit before depreciation & taxation ||184.51 ||213.46 |
|Less: Depreciation ||134.02 ||51.13 |
|Less: Provision for taxation ||19.66 ||(6.01) |
|Add: Prior period adjustment (Taxation) ||0.00 ||0.00 |
|Profit after tax ||30.82 ||132.71 |
|Balance brought forward from last year ||798.44 ||695.24 |
|Profit available for appropriation ||829.26 ||827.95 |
|Transfer to General Reserve ||0 ||0 |
|Proposed Dividend and tax thereon ||(25.23) ||25.23 |
|Balance carried forward ||849.73 ||798.44 |
Financial and Operational Review:
FY2015 was a challenging year for the bio-agri sector in India marked by unfavourableweather conditions and subdued market demand. Despite the difficult operating environmentthe Company registered a strong standalone Net Sales growth of 16.3% which peaked to Rs.1694 mn in FY2015. Revenue contribution from the Agri Biotech (Biocides) business reached35.4% of total standalone Net Sales during the year in line with the managementexpectations and ongoing focus. The Company witnessed a significant increase in sales& marketing expense during the year which were required to push the sales in the badweather conditions. As a result standalone EBITDA stood at Rs. 225.0 mn in FY2015registering a decline of (10.61) % on a y-o-y basis.
On a consolidated basis FY2015 Revenue witnessed an increase of 6.4% on y-o-y basisto Rs. 2030 mn. The increase was driven by the robust growth of 7.2% shown by the AgriBiotech business. FY2015 revenue contribution from the Agri Biotech segment increased from22.5% in FY2014 to 29.7%.
Camson Bio Technologies Zero-Residue biocides products continued to be the marketleader in the fast growing organic agri space. Your Company continues to focus ontechnology and innovation with new product launches and innovative variants of existingproducts to make them more effective and efficient. This further enhances the Company sleading market position in the zero-residue biocides business. During FY2015 CBTLlaunched Calterm Super EPN a product based on a new age technology against harmfulnematodes.
Camson s focus on providing its customers with a wide range of products has resulted inthe requirement of a strong marketing and distribution network. The Company currently hasa network of over 3100 dealers of which over 200 are Platinum dealers. CBTL continues itsfocus on adding Platinum dealers to its network and strives to build a flexible supplychain to ensure requisite delivery volumes in a timely and cost efficient manner.
The Company has a dividend policy that balances the dual objective of appropriatelyrewarding its shareholders and retaining capital to support future growth. In view of therapidly ongoing growth activities to further improve the capacity utilization and toconsolidate the existing facilities your Board has consciously and judiciously decided toretain profit for further growth requirements.
During the year under review the Company has issued 4774327 Equity Shares of Rs.10/- each to various investors on a preferential basis by way of conversion of warrants.As of March 31 2015 the outstanding issued and paid-up equity shares stood at29999840.
The Company has not transferred any amount to the General Reserves. An amount of Rs.30823295 is proposed to be retained in the statement of Profit & Loss.
Term Loan and Working Capital:
Standalone Basis: As of March 31 2015 the Company had total debt of Rs. 366.0 mnCash and Cash Equivalents were Rs. 10.3 mn resulting in Net Debt of Rs. 355.7 mn. TotalDebt consists of Rs. 49.4 mn of Long Term loans and Rs. 316.9 mn of Working Capital loansinclusive of current portion of long term loans maturing within 12 months of the balancesheet date and Interest accrued but not due on borrowings & security deposit. As ofMarch 31 2015 Camson had a conservative leverage profile with Total Debt / Net Worthratio of 0.14x and Net Debt / EBITDA of 1.58x.
Consolidated Basis: As of March 31 2015 the Company had total debt of Rs. 456.62 mnCash and Cash Equivalents were Rs. 14.6 mn resulting in Net Debt of Rs. 442.02 mn. TotalDebt consists of Rs. 72.56 mn of Long Term loans and Rs. 384.06 mn of Working Capitalloans inclusive of current portion of long term loans maturing within 12 months of thebalance sheet date and Interest accrued but not due on borrowings & security deposit.
The Company continues to focus on judicious working capital management. Key workingcapital parameters were kept under strict check through continuous monitoring during theyear. Camson also deploys a robust cash management system to ensure timely servicing ofits liquidity obligations.
During the year under review your Company has neither invited nor accepted any fixeddeposits from the public within the meaning of Section 73 of the Companies Act 2013 readwith the Companies (acceptance of Deposits) Rules 2014.
Particulars of Loans Guarantees or Investments:
The loans or guarantees given by the Company covered under the provisions of Section186 of the Companies Act 2013 are annexed to this Report. The details of the investmentsmade by Company are given in the notes to the financial statements. [Annexure A]
During the year total number of outstanding shares increased by 4774327 to29999840 as of March 31 2015. During the year 6300053 shares of the Company weredematerialized. Around 78.74% of the shares of the Company have now been dematerialized ason March 31 2015.
Members holding shares in physical form are requested to consider converting theirholdings to dematerialized form to facilitate trading of their shares and eliminate risksassociated with physical shares. Members can contact the Company s Share Registrars andTransfer Agents for assistance in this regard.
Internal Control Systems and their Adequacy:
CBTL has an effective internal control and risk mitigation system commensurate withthe size scale and complexity of its operations. The objective of the internal controlsystem is to ensure that operations are conducted in adherence to the corporate policiesidentify areas of improvement and ensure compliance with the applicable rules andregulations. The scope and authority of the Internal Audit function is defined in theInternal Audit Manual. To maintain its objectivity and independence the Internal Auditfunction reports to the Chairman and Managing Director.
The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control system and makes suggestions to strengthen the same.The Internal Auditor monitors and evaluates the efficacy and adequacy of Internal Controlsystem in the Company its compliance with operating systems accounting procedures andpolicies at all locations of the Company. Based on the report of Internal Audit functionprocess owners undertake corrective actions in their respective areas and therebystrengthen the controls. Significant audit observations and recommendations along withcorrective actions thereon are presented to the Audit Committee of the Board. The Companyis in the process of further strengthening the Internal Control Systems by adoptingStandard Operating Procedures (SOP) and by delegating roles & responsibilities tovarious Department heads for effective implementation of the same. This is to ensure thatthe Company conducts its business with highest standards of statutory legal andregulatory compliance.
Corporate Social Responsibility (CSR):
Inclusive growth social well being and a disease free society is at the heart of yourCompany s value system and an intrinsic part of our vision. These values have helped usempower communities and contribute significantly to the social development. Your Companybelieves that social empowerment and community development are the major business dynamicsto influence the Company s growth and as such as part of its CSR policy the Companysupports various initiatives to create a greener and safer world. As part of the CSRinitiative Camson has constituted a trust in the name of SARTHI (Sustainable AgriculturalRural Thrust Initiative) to undertake Corporate Social Responsibility activities.
In accordance with the section 135 of the Companies Act 2013 the Board of Directorsof your Company has constituted a CSR Committee (the details of the same are exhibited inthe Corporate Governance Report). The detailed CSR policy of the Company is uploaded onits website at http:// www.camsonbiotechnologies.com/investor/clause49compliances.htm
However for the Financial Year 2014-15 the Company s Net Profit after tax onStandalone basis was Rs. 3.08 Crores and based on net worth and turnover criteria alsothe Company was not warranted to spend any monies on CSR activities. [Annexure B]
Conservation of Energy:
Your Company believes that Energy Conservation is an important parameter that indicateshow efficiently a company can conduct its operations. We strongly believe in the socialwelfare and environmental well-being. We always strive to put our best foot forward toreduce the harmful emissions and are truly committed towards building an environmentfriendly organization.
The Company ensures that the manufacturing operations are conducted in the mannerwhereby optimum utilization and maximum possible savings of energy is achieved. The natureof our manufacturing process is such that it does not have a significant ecologicalfootprint and therefore for the year no specific investments were required to be made infurther reducing the energy consumption. As the impact of measures taken for conservationand optimum utilization of energy are not quantitative its impact on cost cannot bestated accurately.
The Company's products are manufactured using in-house know how and research facilitiesand no outside technology is being used for manufacturing activities. Therefore notechnology absorption is required. The Company constantly strives for maintenance andimprovement of the quality of its products and entire Research & Developmentactivities are directed to achieve the aforesaid goal. The details of the same areannexed. [Annexure C]
The in-house developed Proprietary Technology Platform and research facilities areaugmented with latest operating systems a large library of microbes & microbialcultures and scientific testing tools. Your Company places significant emphasis oncreating and managing the Intellectual Property in the areas of biocides inputs watersoluble natural fertilizers and hybrid seeds. Additionally the Company continues toidentify and develop new technology in order to meet the expected future requirements.
Foreign Exchange Earnings and Outgo:
CBTL is making marketing efforts in selected countries and exploring new markets. TheCompany regularly participates in prestigious international exhibitions and conductsmarket surveys. During the year CBTL spent Rs. 1824240/- (Rupees Eighteen Lakhs TwentyFour Thousand Two Hundred Forty Only) in foreign exchange towards Directors travelexpenses and earn Rs. 614697.85/-(Rupees Six Lakhs Fourteen Thousand Six Hundred NinetySeven and Eight Five Paise Only) in foreign exchange towards Sale of Products.
Human Resource and Industrial Relations:
The Company places a high importance on the development and retention of its humanresources as well as providing employees with safe and healthy work environment. The humanresource department of the Company is focused on ensuring a right fit between the humanresource policies and the overall strategic direction of the Company to enhancestakeholder value. We have laid down HR policies and several best practices such asincentive policy and stock options to encourage the employee fraternity. Your Company hasrecruited various industry professionals to meet the current and future needs of theorganization. There are no financial or commercial transactions that resulted in aconflict of interest between senior management and the Company.
During the year under review your Company enjoyed cordial relationship with workersand employees at all levels and there has been no loss of production at any of the Companys R&D/manufacturing facility due to industrial unrest. Your Company strictly believesthat maintaining cordial industrial relations is the key to progress of the firmindividuals management industry and nation.
Key Managerial Personnel:
During the year under review the Key Managerial Personnel of the company comprised ofthe following members:
|Name of the person ||Designation |
|1. Dhirendra Kumar ||Managing director |
|2. Santosh Ramakrishna Nair ||CEO |
|3. Narendran Rabindranath ||CFO |
|4. Bhamidi Satya Krishna Sirish ||Company Secretary |
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany s Articles of Association Mr. Akbal Narayan Singh Non Executive Director retiresby rotation and being eligible offers himself for re appointment. The Board recommendsMr. Akbal Narayan Singh for reappointment.
Mr. B.C. Madappa was re-appointed as an Independent Director at the Board Meeting heldon February 12 2015 for a term of one year ending on February 11 2016 subject toShareholders approval. The
Board proposes to elect him as an Independent Director for the next 5 years startingfrom February 12 2016 to February 11 2021.
Mr. Krishnaswamy Ramaswamy was re-appointed as an Independent Director at the BoardMeeting held on February 12 2015 for a term of one year ending on February 11 2016subject to Shareholders approval. The Board proposes to elect him as an IndependentDirector for the next 5 years starting from February 12 2016 to February 11 2021.
Mr. Gulshan Kumar Khanna was re-appointed as an Independent Director at the BoardMeeting held on February 12 2015 for a term of one year ending on February 11 2016subject to Shareholders approval. The Board proposes to elect him as an IndependentDirector for the next 5 years starting from February 12 2016 to February 11 2021.
Dr. Anurudh Kumar Singh was re-appointed as an Independent Director at the BoardMeeting held on February 12 2015 for a term of one year ending on February 11 2016subject to Shareholders approval. The Board proposes to elect him as an IndependentDirector for the next 5 years starting from February 12 2016 to February 11 2021.
The Board proposes to induct Mr. Anil Nath as an Independent Director for a period of 5years from the ensuing AGM subject to Shareholders approval.
Your Company had engaged the services of Mr. Santosh Nair an independent professionalwith significant corporate management experience. He is currently engaged as the ChiefExecutive Officer of Camson. After considering various criteria and based on therecommendation from Nomination and Remuneration Committee your Board recommends theinduction of Mr. Santosh Nair into the Board and also as a Whole-time Director for aperiod of 5 years from the ensuing AGM subject to the Shareholders approval.
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the performance evaluation of the Board for FY2015 will be carried out inFY2016 as per the comprehensive and structured questionnaire framed by Nomination &Remuneration committee. Your Board has initiated the process of performance evaluation ofthe Board and requisite criteria have been established. The criteria provides forevaluation of the Board the Committees of the Board and individual Directors includingthe Chairman of the Board. Board evaluation plays an important role in further enhancingthe governance standards of the Company and your Company keeps a closer view on theevaluation policy and its framework.
The Remuneration Policy of Camson is aimed to attract retain reward and motivatetalented individuals critical for achieving the long term strategic goals of the Company.CBTL s policy is designed to reflect the performance and is aligned to the long terminterest of the stakeholders. The Board has on the recommendation of the Nomination andRemuneration Committee framed a policy for selection and appointment of Directors SeniorManagement and their remuneration. The Remuneration Policy is stated in the CorporateGovernance Report.
Particulars of Employees:
The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect to theemployees of the Company will be provided upon request. In terms of Section 136 of theCompanies Act 2013 the reports and accounts are being sent to the members and othersentitled thereto excluding the information on employees particulars which is availablefor inspection by the members at the Registered office of the Company during businesshours on working days of the Company up to the date of ensuing Annual General Meeting. Ifany member is interested in inspecting the same such member may write to the CompanySecretary in advance.
A calendar of meetings is prepared and circulated in advance to the Directors.
During the year 6 (Six) Board Meetings and 5 (Five) Audit Committee Meetings 2 (Two)Compensation Committee Meetings 1 (One) Nomination and Remuneration Committee Meeting and1 (One) Share Transfer Committee Meeting were convened and held. The details of which aregiven in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.
Declaration of Independence is obtained from all the Independent Directors as requiredunder the provisions of Companies Act 2013 and Clause 49 of the Listing Agreement for theyear under review.
Training and Familiarization of Independent Directors:
The Company firmly believes in keeping the interest of its stakeholders at theforefront and thereby puts maximum effort to establish and maintain an effective CorporateGovernance practice. The Company also believes that a Board which is well informed andfamiliarized with the Company can contribute significantly to effectively discharge itsrole of trusteeship in a manner that fulfils stakeholders expectations.
Independent Directors are familiarized with their roles rights and responsibilities inthe Company as well as with the nature of industry and business model of the Companythrough induction programs at the time of their appointment as Directors. The induction isaimed at familiarizing the new Board members about the Company s strategy products andofferings operations and facilities economic environment human resource finance andtechnology. Additionally Directors are updated on a continuing basis on developments inthe corporate and industry scenario including those pertaining to regulatory and economicenvironment to enable them to take well informed and timely decisions.
The details of the familiarization programme may be accessed on the Company s corporatewebsite at http://www.camsonbiotechnologies.com/investor/clause49compliances.htm
Statement on Declaration by Independent Directors:
Pursuant to the requirements of Criteria of Independence as laid down under Section 49(6) of the Companies Act 2013 and Clause 49 of the Listing Agreement all of theIndependent Directors have given declarations that they meet such criteria ofIndependence.
In order to maintain transparency your Company maintains an arm s length while dealingwith its Independent Directors. No transaction was entered with Independent directors inthe year which could have any material pecuniary relationship with them. Apart fromsitting fee no other remuneration was given to any of the Independent Directors.
Directors Responsibility Statement:
In terms of Section 134 (3) (c) and 134 (5) of the Companies Act 2013 the Directorswould like to state that:
i) In the preparation of the annual accounts the applicable accounting standards havebeen followed.
ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for the year under review.
iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe 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) The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
vi) The Directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.
Related Party Transactions:
All transactions entered with Related Parties for the year under review were on arm slength basis and were in the ordinary course of the business. There are no materiallysignificant related party transactions made by the Company with Promoters Key ManagerialPersonnel or other designated persons which may have potential conflict with interest ofthe Company at large. The Company has developed a Related Party Transactions frameworkthrough Standard Operating Procedures for the purpose of identification and monitoring ofsuch transactions. The details of related party transactions in the required format areannexed to this Report [Annexure D].
None of the Directors has any pecuniary relationship of transactions vis--vis theCompany. The policy on Related Party Transactions as approved by the Board of Directorshas been uploaded on the website of the Company athttp://www.camsonbiotechnologies.com/investor/clause49compliances.htm .
The Company has two subsidiaries namely Camson Agri-Ventures Private Limited (CAV) andCamson Agro Products Private Limited (CAP). The financial performance of the subsidiariesis annexed to this Report. Your Company continues to own two proprietorship concerns viz.Messrs Deccan Agro Exports and Messers Srushti Agro Exports based at Karad Maharashtra;through CAP.
Pursuant to Section 129(3) of the Companies Act 2013 and Accounting Standard 21 issuedby the
Institute of Chartered Accountants of India Consolidated Financial Statementspresented by the Company include the financial statements of its subsidiaries. The Companywill make available copies of the subsidiary financials upon request by any shareholder ofthe Company/ subsidiary interested in obtaining the same. These documents shall also beavailable for inspection at the registered office of the Company during business hours upto the date of ensuing AGM.
Change in Nature of the Business - Demerger of Seeds Business:
During the year the Company filed an application for the Scheme of Arrangement(Demerger) of the seeds business to form a new entity namely Camson Seeds Limited withthe Honorable High Court of Karnataka pursuant to a Scheme of Arrangement under Sections391 to 394 of the Companies Act 1956 and in compliance with the applicable SEBI Circulars/ Listing Agreement with the Stock Exchanges.
The Hon ble. High Court of Karnataka has sanctioned the scheme on 31st July2015. The company will see the formal launch of a separate Seeds business entity.
Code of Conduct:
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe Company. The Company believes in Zero Tolerance against bribery corruption andunethical dealings / behavior of any form and the Board has laid down the directives tocounter such acts. The Code laid down by the Board is known as Code of Business Conductwhich has been posted on the Company s website athttp://www.camsonbiotechnologies.com/investor/clause49compliances.htm
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with the stakeholders. The Code provides guidance through examples on theexpected behaviour from an employee in a given situation and the reporting structure. Allthe Directors on the Board and the Senior Management Personnel have confirmed complianceswith the Code.
Vigil Mechanism or Whistle Blower Policy:
Pursuant to the requirement of section 177 (9) & (10) of the Companies Act 2013Camson has adopted a Vigil Mechanism to deal with instances of fraud and mismanagementand which allows employees of the Company to raise their concerns relating to fraudmalpractice or any other activity or event which is against the interest of the Company orthe society as a whole. In line with our corporate values the Company is committed to thehighest standards of Corporate Governance and stakeholder responsibility. Camson believesin achieving its business goals solely through means that are ethical transparent andaccountable and this principle forms the basis of our strong Vigil Mechanism.
The Vigil Mechanism or the Whistle Blower Policy has been uploaded on the website ofthe Company at http://www.camsonbiotechnologies.com/investor/clause49compliances.htm
Prevention of Insider Trading:
The Company has adopted a Code of Conduct for prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company s shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed.
All the Directors and the designated employees have confirmed compliance with the Code.The Policy on Insider Trading and Code of Practices is uploaded on the website of theCompany at http://www.camsonbiotechnologies.com/investor/clause49compliances.htm
Auditor s Report for the Year Ended FY2015:
The observations made in the Auditors' Report read together with relevant notes thereonare self explanatory and hence do not call for any further comments under Section 134 ofthe Companies Act 2013.
The Statutory Auditors B.K. Khare & Co. Chartered Accountants Mumbai retire atthe conclusion of the ensuing Annual General Meeting and being eligible offer themselvesfor re-appointment.
Your Company has received confirmation from the Auditors to the effect that theirappointment if made will be in accordance with the limits specified under the CompaniesAct 2013 and the firm satisfies the criteria specified in Section 141 of the CompaniesAct 2013 read with Rule 4 of Companies (Audit & Auditors) Rules 2014.]
Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Camson has appointedMr. Vijayakrishna K.T a Practising Company Secretary to undertake the Secretarial Auditof the Company. The Secretarial Audit Report is annexed herewith [Annexure E].
Explanations by the Board on the comments of Secretarial Auditors:
|Qualifications made by Secretarial Auditor ||Explanations by the Board |
|1. Meeting place and time of commencement were not mentioned in the Minutes. ||The Company will ensure inclusion Meeting place and time of commencement in the Minutes. |
|2. Meetings were conducted with video conference facility but the record of the video conference not maintained by the Company. ||Recordings were done. However due to certain technical issues the recordings were erased. Steps have been taken to protect the same. The Company has advanced monies |
|3. There is one instance of non compliance under Section 185 of the Companies Act 2013. ||to its Subsidiaries to promote the business. Though the Company has advanced to newly incorporated Subsidiary. |
|4. There is one instance of non compliance of Section 188 of the Companies Act 2013 during the year. ||The Company requires agricultural land and Karnataka owning agricultural land by Corporate is not permitted as per law. Hence the Company entered into arrangement with one of the Director who owns agricultural land and at arm s length the agricultural land is being used for the agri related business of the Company. The Company has taken steps to take the approval of Shareholders. |
|5. Separate Sexual Harassment Committee does not include one external person as member. ||The Company will ensure inclusion of one external person as member. |
The Board has appointed Messrs Murthy & Co. LLP as the Cost auditor for theFinancial Year 2015-16. The Ministry of Corporate Affairs has vide Gazette NotificationGSR 01(E) dated 31st December 2014 has mandated Cost Audit for both Regulated Sectors andNon-Regulated Sectors. The Company being a non-regulated industry is not coming under costaudit as the CETA code is not covered under the purview of Cost Audit. Though cost auditis not applicable for the Company your Company has voluntarily taken the initiative toaudit the cost records of the Company.
Pursuant to the provisions of Section 148 of the Act read with the Companies (Audit andAuditors) Rules 2014 Members are requested to ratify the remuneration payable to MessrsMurthy & Co. LLP
Business Risk Management:
Pursuant to Section 134 (3) (n) of the Companies Act 2013 and Clause 49 of the ListingAgreement the Company has constituted a Business Risk Management Committee aimed atidentification assessment monitoring and mitigation of risk and also capturing lessonslearnt for future reference. The Company has in place active mechanism to periodicallyreview the risk assessment and minimization procedures and inform the Board Members incase any risk is foreseen.
The details of the Committee and its terms of reference are set out in the CorporateGovernance Report forming part of the Boards Report. At present the Company has notidentified any element of risk which may threaten the existence of the Company.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013:
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy.
The following is a summary of sexual harassment complaints received and disposed offduring FY2015:
|l No of complaints received ||: NIL |
|l No of complaints disposed off ||: NIL |
Significant and Material Orders Passed by the Regulators or Courts
The Honourable High Court of Karnataka has granted approval for the demerger scheme ofthe seeds division on 31st July 2015. This will pave way for the growth of theSeeds Division as a separate business entity.
Extract of Annual Return:
Pursuant to Section 92 (3) of the Companies Act 2013 and Rule 12 (1) of the Companies(Management and Administration) Rules 2014 the extract of the Annual Return in form ofMGT-9 is annexed herewith as [Annexure F].
Corporate Governance and Management Discussion & Analysis Reports:
The Corporate Governance and Management Discussion & Analysis Report which form anintegral part of this Report are set out as separate Annexures together with theCertificate from a practicing Company Secretary regarding compliance with the requirementsof Corporate Governance as stipulated in Clause 49 of the Listing Agreement.
Employee Stock Option Scheme:
Based on the approval accorded by the Shareholders in principle approval for theEmployee Stock Option Scheme Employee Stock Option Plan 2012 of Camson Bio TechnologiesLimited exercisable into not more than 1499990 options has been obtained by the Companyfrom the Stock Exchanges. The options are vested in the eligible employees as per thescheme with effect from February 12 2016. Options are granted on February 12 2015. Thereshall be a minimum gap of one year between date of grant and first vesting.
The Company implemented the Employee Stock Option Scheme in accordance with the SEBI(Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines 1999. TheCompensation Committee has been constituted in accordance with the SEBI Guidelines andadministers and monitors the ESOP Scheme. The applicable disclosures as stipulated underSEBI Guidelines as at 31st March 2015 are given hereunder: -
(i) Options Granted: 1499990 on February 12 2015
(ii) The Pricing Formula: Market Price of the Shares on the date of grant discounted bysuch rate as decided by the Board in consultation with Compensation Committee. (Previousday s Closing price was taken i.e. Closing Market Price of the Shares on February 112015 was Rs.109.50/-)
(iii) Exercise price: Rs.109 per Option
(iv) Options vested: Nil
(v) Options exercised: Nil
(vi) Total number of shares arising as a result of exercise of option: Nil (vii)Options lapsed: Nil (viii) Variation of terms of options: NA
(ix) Money realized by exercise of options: Nil (x) Total number of options in force:1499990 (xi) Employee wise details of options granted to: -(a) Senior managerialpersonnel (a.1) Chief Executive Officer: 299998
(b) Any other employee who receives a grant in any one year of option amounting to 5%or more of option granted during that year; All the options are granted at once. Noemployee has been granted options beyond 1% of the Issued and Paid-up capital as on thedate of grant.
(c) Identified employees who were granted option during any one year equal to orexceeding 1% of the issued capital (excluding outstanding warrants and conversions) of theCompany at the time of grant: 299998. Options equal to 1% of the Issued and Paid upcapital were granted on February 12 2015 to Chief Executive Officer Mr. Santosh Nair.
(xii) Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise ofoption calculated in accordance with [Accounting Standard (AS) 20 Earnings Per Share ]: NA
(xiii) Where the Company has calculated the employee compensation cost using theintrinsic value of the Stock Options the difference between the employee compensationcost so computed and the employee compensation cost that shall have been recognized if ithad used the fair value of the options shall be disclosed. The impact of this differenceon profits and on EPS of the Company shall also be disclosed.
|Intrinsic Value of the Options ||= Market Price Exercise Price |
| ||= Rs. 109.50 Rs. 109 |
| ||= 0.50 Paise |
Fair value of the Options calculated as per Black-Scholes Option Pricing Model withDividends is Rs.40.83/-.
Assuming one third of the options granted on February 12 2015 (499997) are fullyexercised before the expiry of expected life of options (2 Years from the date of grant)the difference between the employee compensation cost so computed and the employeecompensation cost that shall have been recognized if it had used the fair value of theoptions shall be as under: -
(i). Employee Compensation cost as per Intrinsic Value Method
= No. of Options * Intrinsic Value = 499997 * 0.50 Paise = Rs. 249999/-
(ii). Employee Compensation cost as per Fair Value Method
= No. of Options * Difference between Exercise Price and Fair value = 499997 * (109.40.83) = 499997 * 68.17 = 34084795
(iii). Difference in Employee Compensation cost
= (Employee Compensation Cost as per Fair Value Method) (Employee Compensation Cost asper Intrinsic Value Method)
= (34084795) (249999)
Thus if Option Pricing is computed using the Fair Value Method it would lead to thehighest Employee Compensation Cost thereby impact the Profit & Loss statementsubstantially.
The Company has received a Certificate from the Auditors stating that "TheEmployee Stock Option Scheme / Plan has been implemented in accordance with SEBI (EmployeeStock Option Scheme & Employee Stock Purchase Scheme) Guidelines 1999 and resolutionspassed by the Shareholders. The certificate would be available at the Annual GeneralMeeting for inspection by Members.
Your Directors wish to extend their sincerest appreciation to the investors bankerscustomers suppliers executives staff and workers at all levels for their continuousco-operation and assistance. Your Directors express their sincere gratitude to all theRegulatory Authorities such as the SEBI Stock Exchanges and other Central & StateGovernment authorities and agencies Registrars for their guidance and support. We alsotake this opportunity to thank the Indian farming community who believed in our companyand appreciated our products.
| ||For & On behalf of Board of Directors |
|Place: Bangalore ||Sd/- |
|Date: 12th August 2015 ||Dhirendra Kumar |
| ||Chairman & Managing Director |
| ||DIN: 00301372 |
ANNEXURE RELATING TO LOANS GUARANTEES
INVESTMENTS UNDER SECTION 186:
|ADVANCES || |
|Subsidiary/Associate ||Amount |
|1 Advance for Investment to Camson Agri Venture Private Limited ||60000000 |
Guarantees and Security
A corporate guarantee of Rs. 220000000/- (Rupees Twenty Two Crores) was given toCorporation Bank against the borrowing availed by Camson Agri-Ventures Private Limited.
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES
The Board has constituted a Trust in the name of SARTHI (Sustainable Agricultural RuralThrust Initiative) to undertake Corporate Social Responsibility activities and also hasconstituted a CSR Committee (the details of the same are exhibited in the CorporateGovernance Report). The Company has a CSR Policy as well which has been uploaded inCompany s website.
However for the Financial Year 2014-15 the Company s Net Profit after tax onStandalone basis was Rs. 3.08 Crores and based on net worth and turnover criteria alsothe Company was not warranted to spend any monies on CSR activities.
Particulars pursuant to the provisions of Section 217(1) (e) of the Companies Act 1956read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules1988
(A) Conservation of Energy:
Though the Company does not have energy intensive operations it continues to adoptenergy conservation measures.
Energy conservation programs adopted by the Company are -(i) Continuous monitoring ofenergy consumption.
(ii) Spreading awareness among the employees on the need to conserve energy. (iii)Optimizing plant and machinery system performance to reduce cost. (iv) Rain WaterHarvesting Further the Company is implementing the provisions of ISO 9001: 2008.
(B) Research and Development and Technology Absorption:
The Company has continuously strived to develop unique products and has laid emphasison ramping up its research and development activities.
The fresh initiatives during the year have been-
(i) Company is constantly involved in large scale tree planting activities within itspremises towards maintaining the ecological balance and prevention of soil erosion.
(ii) The company has also initiated activities towards harnessing of solar energy forits critical operations and is also exploring ways to garner wind energy in the future.
Research and Development (R&D) Expenditure
Incurred at R&D Center recognized by DSIR located at Doddaballapur
(Amount in Rs.)
|DSIR Revenue Expenses ||R&D Centre Doddaballapur 31st March 2015 ||31st March 2014 |
|Research & Development Expenses (comprising clinical trial expenses patent fees etc) ||22192369 ||5965235 |
|Employee Benefit Expenses ||35864789 ||16353770 |
|Lab Consumables ||2121656 ||1332021 |
|Professional Charges ||263327 ||20140 |
|Microbial Germplasm/ Breeder Seed Development ||134569811 ||95485907 |
|Total Revenue Expenditure ||195011952 ||119157073 |
|DSIR Capital Expenditure || || |
|Plant & Machinery ||2614736 ||1424850 |
|Office Equipment ||234275 ||- |
|Product Development Cost ||- ||320617067 |
|Total Capital Expenditure ||2849011 ||322041917 |
|Less: Sales proceeds (Income of R&D center) ||- ||- |
|Total Revenue and Capital Expenditure ||197860963 ||441198990 |
(C) Foreign Exchange Earnings and Outgo:
During the year CBTL spent Rs. 1824240/- (Rupees Eighteen Lakhs Twenty Four ThousandTwo Hundred Forty only) in foreign exchange towards Directors travel expenses and earn Rs.614697.85/-(Rupees Six Lakhs Fourteen Thousand Six Hundred Ninety Seven and Eight FivePaise only) in foreign exchange towards Sale of Products.
| ||For & On behalf of Board of Directors |
|Place: Bangalore ||Sd/- |
|Date: 12th August 2015 ||Dhirendra Kumar |
| ||Chairman & Managing Director |
| ||DIN: 00301372 |
Form No. AOC-2
(Pursuant to clause (h) of sub-Section (3) of Section 134 of the Act read with Rule8(2) of the Companies (Accounts) Rules 2014)
Form for disclosure of particulars of contracts/arrangements entered into by theCompany with related parties referred to in sub-Section (1) of Section 188 of theCompanies Act 2013 including certain arm s length transactions under third provisothereto
1. Details of contracts or arrangements or transactions not at arm s length basis: NA
During the Financial Year 2014-15 all the Related party transactions are entered inthe ordinary course of business and at Arm s length basis
2. Details of material contract arrangement or transaction at arm s length basis
(a) Name (s) of the related party and nature of relationship: Company and Director
(b) Nature of contracts/ arrangements/ transactions: Leave and License Arrangement
(c) Duration of the contracts/ arrangements/ transactions: 99 Years
(d) Salient terms of the contracts or arrangements or transactions including the valueif any:
A Leave and License agreement is executed between Camson Bio Technologies Limited(Licensee) and Mr. A.N.Singh Non-Executive Director (Licensor) in respect of Landadmeasuring 34 acres situated at Sy No.132 Madhurehobli Madagondanahalli DodballapurNelamangala Road Bangalore-561 203. The amount of Rs. 4199249/- (Rupees Forty One LakhsNinety Nine Thousand Two Hundred and Forty Nine only) is fixed as Annual License Fee.
(e) Date (s) of approval by the Board: May 28 2014
(f) Amount paid as advances if any: The Consideration for the entire term of 99 yearswas already paid during the Financial Years 2011-2015. However the same shall beapportioned equally over the entire Leave & License term.
Other contracts/arrangements in the ordinary course of business and at Arm s lengthbasis
|Name of related party ||Nature of relationship ||Salient Terms/Nature of the Contract ||Amount in Rs |
|Camson Agri- Ventures Pvt Ltd ||Subsidiary ||Sale of biocides product ||3387411 |
|Camson Agri- Ventures Pvt Ltd ||Subsidiary ||Sale of Seeds Product ||(9470) |
|Camson Agri- Ventures Pvt Ltd ||Subsidiary ||Reimbursement of Expenses/ Advances/ (recovery) ||48527275/(6653581) |
|Camson Agro Products Pvt Ltd ||Subsidiary ||Reimbursement of expenses ||272022 |
Form No. MR-3
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED 31.03.2015
[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
CAMSON BIO TECHNOLOGIES LIMITED
I have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Camson BIO TechnologiesLimited (hereinafter called the Company ). Secretarial Audit was conducted in a mannerthat provided me a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing my opinion thereon.
Based on my verification of the books papers minute books forms and returns filedand other records maintained by the Company and also the information provided by theCompany its officers agents and authorized representatives during the conduct ofSecretarial Audit I hereby report that in my opinion the Company has during the auditperiod covering the financial year ended on 31.03.2015 complied with the statutoryprovisions listed hereunder and also that the Company has proper Board-processes andcompliance mechanism in place to the extent in the manner and subject to the reportingmade hereinafter:
I have examined the books papers minute books forms and returns filed and otherrecords maintained by Camson Bio Technologies Limited for the financial year ended on31.03.2015 according to the provisions of:
(i) The Companies Act 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act 1956 ( SCRA ) and the rules madethereunder;
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ( SEBI Act ):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;
(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999;
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;
(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; and
(h) The Securities and Exchange Board of India (Buy back of Securities) Regulations1998; (vi) The Industry specific laws applicable to the Company are as follows: a) FoodSafety and Standards Act 2006 b) Export (Quality Control and Inspection) Act 1963 c)Agricultural Produce ( Grading and Marking ) Act 1937 d) The Insecticide Act 1968
I have further reviewed the systems and mechanism established by the Company forensuring compliance under the other applicable Acts Rules Regulations and Guidelinesprescribed under various laws which are applicable to the Company and are categorizedunder the following major heads/groups:
1. Factories Act 1948;
2. Labour laws and other incidental laws related to labour and employees appointed bythe Company including those on contractual basis as relating to wages gratuityprevention of sexual harassment dispute resolution welfare provident fund insurancecompensation etc.;
3. Industrial (Development Regulation) Act 1991;
4. Acts relating to consumer protection including the Competition Act 2002;
5. Acts and Rules prescribed under prevention and control of pollution;
6. Acts and Rules relating to Environmental protection and energy conservation;
7. Acts and Rules relating to hazardous substances and chemicals;
8. Acts relating to Electricity fire petroleum drugs motor vehicles explosivesBoilers etc.;
9. Acts relating to protection of IPR; 10. Land revenue laws; and
11. Other local laws as applicable to various plants and offices.
I have also examined compliances with the applicable clauses of the following:
(i) Secretarial Standards issued by the Institute of Company Secretaries of India (cameinto effect from 1st July 2015; hence not applicable for the financial yearended 31.03.2015).
(ii) The Listing Agreements entered into by the Company with the BSE Limited (BSE).
I further state that during the period under review and based on my verification of therecords maintained by the Company and also on the review of compliance reports/statementsby respective department heads/Chief Financial Officer/ Company Secretary taken on recordby the Board of Directors of the Company in my opinion adequate systems and process andcontrol mechanism exist in the Company to monitor and ensure compliance with applicablelabour laws environmental laws and other applicable laws as mentioned above. Certainnon-material findings made during the course of the audit relating to the provisions ofCompanies Act Labour Laws were addressed suitably by the Management. Followingobservations have been brought before the shareholders which are treated as material innature:
a) Meeting place and time of commencement were not mentioned in the Minutes.
b) Meetings were conducted with video conference facility but the record of the videoconference not maintained by the Company.
c) There is one instance of non-compliance under Section 185 of the Companies Act2013.
d) There is one instance of non-compliance of Section 188 of the Companies Act 2013during the year.
e) Separate Sexual Harassment Committee does not include one external person as member.
I further report that I have not reviewed the applicable financial laws direct andindirect tax laws since the same have been subject to review and audit by the StatutoryAuditors of the Company.
I further report that
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors which took place during the period under review werecarried out in compliance with the provisions of the Act.
As per the information received from the Company Secretary adequate notice is given toall Directors to schedule the Board Meetings agenda and detailed notes on agenda weresent at least seven days in advance and a system exists for seeking and obtaining furtherinformation and clarifications on the agenda items before the meeting and for meaningfulparticipation at the meeting.
Majority decision is carried through while the dissenting members views are capturedand recorded as part of the minutes as per the practice followed. However during theperiod under report there was no such case instance.
I further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
I further report that during the year the Company has passed the resolution fordemerger of its seeds business in to one of its subsidiary companies i.e. Camson SeedsLimited. Orders from the Hon ble High Court of Karnataka are awaited.
|Place: Bangalore ||Sd/- |
|Date: 12.08.2015 ||(Vijayakrishna KT) |
| ||FCS No.: 1788 |
| ||C P No.: 980 |
RATIO OF REMUNERATION OF EACH DIRECTOR
|(i) The ratio of the remuneration of each Director to the median remuneration of the Employees of the Company for the Financial Year; ||Managing Director- 47.92 |
| ||Non-Executive Director- 2.68 |
| ||Independent Directors: |
| ||Mr. B.C. Madappa- 0.12 |
| ||Mr. G.K. Khanna- 0.09 |
| ||Mr. K. Ramaswamy- 0.12 |
| ||Dr. A.K. Singh- 0.12 |
| ||Ms. Reeta Gangwani- 0.09 |
| ||(Median Remuneration of Employees- Rs. 1.75 Lakhs) |
|(ii) The percentage increase in remuneration of each Director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the Financial Year; ||Chief Financial Officer- 46.56% Company Secretary- 34.57% |
|(iii) The percentage increase/(Decrease) in the median remuneration of employees in the Financial Year; ||(13%) |
|(iv) The number of permanent employees on the rolls of Company; ||289 |
|(v) The explanation on the relationship between average increase in remuneration and company performance; ||The Profit before Tax decreased by 60 % and there is a decrease in median remuneration was 13%. The average decrease in median remuneration was in line with company. |
|(vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company; ||The total remuneration of Key Managerial Personnel increased by 5% from Rs. 1.36 Crore in 2013-14 to Rs. 1.43 crore in 2014-15 whereas the Profit before Tax decreased by 60% to Rs. 50478859 (Rs. 126702439 in 2013-14). |
|(vii) Variations in the market capitalisation of the Company price earnings ratio as at the closing date of the current Financial Year and previous Financial Year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last Public offer in case of listed companies and in case of unlisted companies the variations in the net worth of the Company as at the close of the current Financial Year and previous Financial Year; || The market capitalization as on March 31 2015 was Rs. 280.8 crore (Rs. 150.7 crore as on March 31 2014) |
| || Price Earning ratio of the Company was 87.16 as at March 31 2015 and 10.44 as at March 31 2014. |
| || % increase over/ decrease in market quotations of the shares of the company as compared to the rate at which the company came out with the last public offer in the year - The Company had come out with the initial public offer (IPO) in 1995. An amount of Rs. 10 invested in the said IPO worth Rs. 93.6 as on March 31 2015 indication a Compounded Annual Growth Rate of 41.8%. This is excluding the dividend accrued thereon. |
|(viii) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration; ||60% |
| ||whereas increase in the managerial remuneration for the same financial year was 5%. |
|(ix) Comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company ||The total remuneration of Key Managerial Personnel increased by 5% from Rs. 1.36 Crore in 2013-14 to Rs. 1.43 crore in 2014-15 whereas the Profit before Tax decreased by 60% to Rs. 50478859 (Rs. 126702439 in 2013-14). |
|(x) The key parameters for any variable component of remuneration availed by the Directors; ||Considered by the Board of Directors based on the recommendations of the Human Resources Nomination and Remuneration Committee as per the remuneration policy for Directors Key Managerial Personnel and other Employees. |
|(xi) The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year; ||NIL |
|(xii) Affirmation that the remuneration is as per the remuneration policy of the Company. ||Yes |
FINANCIAL PERFORMANCE OF THE SUBSIDIARIES
(Pursuant to first proviso to sub-Section (3) of Section 129 read with Rule 5 ofCompanies (Accounts) Rules 2014)
Statement containing salient features of the financial statement of Subsidiaries/Associate Companies/ Joint Ventures
(Amount in Rs)
|Name of the subsidiary ||CAMSON AGRI VENTURES PRIVATE LIMITED(CAV) ||CAMSON AGRO PRODUCTS PRIVATE LIMITED(CAP) |
|Share capital ||100000 ||91536740 |
|Reserves & surplus ||(6268835) ||(15493579) |
|Total assets ||200313030 ||189485929 |
|Total Liabilities ||200313030 ||189485929 |
|Investments ||46734640 ||- |
|Turnover ||295681679 ||45238625 |
|Profit Before taxation ||(13889844) ||(15444315) |
|Provision for taxation ||131697 ||- |
|Profit After Taxation ||(14021541) ||(15444315) |
|Proposed Dividend ||Nil ||Nil |
|% of shareholding ||65 ||51* |
| || |
| CAP is a subsidiary of CAV which holds 51%. || |