Your Directors take immense pleasure in presenting their 23rd Annual Reporton the business and operations together with the Audited Standalone and ConsolidatedFinancial Statements of the Company for the year ended 31st March 2017.
| ||(Rs. in Million) |
| ||Standalone ||Consolidated |
| ||FY2017 ||FY2016 ||FY2017 ||FY2016 |
|Net Sales ||103.50 ||254.03 ||153.92 ||621.15 |
|Profit before depreciation & taxation ||(199.33) ||(182.10) ||(215.49) ||(202.86) |
|Less: Depreciation ||74.41 ||217.18 ||76.90 ||232.24 |
|Less: Provision for taxation ||- ||(20.93) ||- ||(20.88) |
|Add: Prior period adjustment (Taxation) ||(1.70) ||- ||(1.70) ||- |
|Profit after tax ||(272.04) ||(378.35) ||(290.69) ||(414.23) |
|Minority interest ||- ||- ||- ||(19.84) |
|Share for Profit from associated Company ||- ||- ||(19.34) ||- |
|Dilution of Interest in Investment in || || || || |
|Subsidiary as on 19.06.2016 ||- ||- ||(29.20) ||- |
|Profit after Taxes Minority interest ||(272.04) ||(378.35) ||(339.23) ||(394.39) |
|Balance brought forward from last year ||(535.39) ||849.73 ||(618.80) ||842.34 |
|Opening consolidation Loss adjustment ||- ||- ||- ||(2.65) |
|On account of de-merger ||- ||957.89 ||- ||957.89 |
|Profit of Camson Seeds Limited (Demerged Company) for the FY 2014-15 ||- ||48.89 ||- ||48.89 |
|Profit/(Loss) from Investment in || || || || |
|Subsidiary up to 19.06.2016 ||- || ||(18.65) ||- |
|Loss on disposal of interest in Investment || || || || |
|in subsidiary as on 19.06.2016 ||- || ||(29.20) ||- |
|Profit available for appropriation ||(272.04) ||(535.39) ||(339.23) ||(561.47) |
|Appropriations || || || || |
|Transfer to capital reserve ||- ||- ||- ||57.32 |
|Adjusted from fixed assets ||- ||- ||- ||- |
|Impact of deferred tax ||- ||- ||- ||- |
|ESOP amortization ||- ||- ||- ||- |
|Proposed dividend on equity shares ||- ||- ||- ||- |
|Corporate dividend tax ||- ||- ||- ||- |
|Balance carried forward ||(807.43) ||(535.39) ||(826.77) ||(618.79) |
Financial and Operational Review:
FY 2017 was a challenging year for the bio-agri sector in India marked by unfavorableweather conditions and subdued market demand. The Company registered a decline standaloneNet Sales by 59.26% compared to previous year by Rs. 150.53 mn primarily because theCompany had to take back dumped stocks from the dealers and also had to write off thosepayments which were of doubtful nature the FY 2016-17. Revenue contribution from the AgriBiotech (Biocides) business has also declined by 59.26%.
On a consolidated basis FY 2017 Revenue witnessed decrease by 69.48% on y-o-y basisto Rs.193.34 mn. There was a decline by 75.22% in the Agri Biotech business segment due tothe ongoing portfolio rationalizationin line with the management expectations and theongoing focus on the core biocides business.
Your Company's Zero-Residue' biocides products continued to be the market leaderin the fast growing organic agri space. Your Company continues to focus on technology andinnovation with new product launches and innovative variants of existing products to makethem more effective and efficient. This further enhances the Company's leading marketposition in the zero-residue biocides business.
Your Company's focus on providing its customers with a wide range of products hasresulted in the requirement of a strong marketing and distribution network. A new set ofdistributors are being appointed to ensure requisite delivery volumes in a timely and costefficient manner.
Financial Statements of Subsidiaries and Associate Companies:
In accordance with the provisions of Section 129 (3) of the Companies Act 2013 readwith SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 theconsolidated financial statements have been prepared by the Company which forms part ofthis Annual Report. A statement containing the salient features of the financialstatements of subsidiaries/ associates as required in Form AOC 1 is enclosed as Annexure-Gto this Report.
Camson Agri-Ventures Private Limited which was a subsidiary Company till 19thJune 2016 ceased to be a Subsdiary and became Associate Company thereafter.
Camson Agri Products Private Limited which was a subsidiary Company till 19thJune 2016 ceased to be a subsidiary Company thereafter.
In view of the losses incurred during the year your Board has not recommended anydividend.
During the year under review the Company has not issued any Equity Shares andtherefore the Issued Subscribed and Paid-up Equity Share Capital of your Company standsunchanged. As of 31st March 2017 the issued and paid-up equity shares stoodat 29999840.
The Company has not transferred any amount to the General Reserves.
Term Loan and Working Capital:
Standalone Basis: As of 31st March 2017 the Company had total debt of Rs.458.69 mn Cash and Cash Equivalents were Rs. 2.08 mn resulting in Net Debt of Rs. 456.61mn. Total Debt consists of Rs. 84.20 mn of Long Term loans and Rs. 374.48 mn of WorkingCapital loans inclusive of current portion of long term loans maturing within 12 months ofthe Balance Sheet date. As of 31st March 2017 your Company had leverageprofile with Total Debt / Net Worth ratio of 0.6x and Net Debt / EBITDA of (3.40 x).
Consolidated Basis: As of 31st March 2017 the Company had total debt ofRs. 458.68 mn Cash and Cash Equivalents were Rs. 2.08 mn resulting in Net Debt of Rs.456.61 mn. Total Debt consists of Rs. 84.20mn of Long Term loans and Rs.374.48 mn ofWorking Capital loans inclusive of current portion of long term loans maturing within 12months of the balance sheet date.
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 neither invited nor accepted any fixeddeposits from the public and as such no amount on account of principal or interest onpublic deposits was outstanding as on the date of the balance sheet within the meaning ofSection 73 of the Companies Act 2013 read with the Companies (acceptance of Deposits)Rules 2014.
Loan from Director
During the year under review the Company has received loan from a Director to theextent of Rs. 1733050. The Company has received a declaration from the Director inwriting to the effect that the amount is not being given out of funds acquired by him byborrowing or accepting loans or deposits from others. The outstanding balances due to theDirector as shown in Notes to accounts is Rs. 53585715.
Particulars of Loans Guarantees or Investments:
During the year there were no loans or Guarantee given by the Company under theprovisions of Section 186 of the Companies Act 2013.
During the year under review the Company has not made any Investment. However theoutstanding Investment in Equity shares of Camson Agri-Ventures Private Limited was Rs.3.40 Crores
Guarantees and Security
During the year the Company has not given any Guarantee or Security. Last year acorporate guarantee of Rs. 130000000/- (Rupees Thirteen Crores only) was given toCorporation Bank against the borrowing availed by Camson Agri-Ventures Private Limited(subsidiary upto 19.6.2016 and Associate thereafter).
During the year there was no change in the total number of outstanding Shares as on 31stMarch 2017. During the year 23642951 Equity Shares of the Company have beendematerialized as at 31st March 2017. Around 78.81% of the Shares of theCompany have now been dematerialized as on 31st March 2017.
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:
Your company has an effective internal control and risk mitigation system commensuratewith the size scale and complexity of its operations. The objective of the internalcontrol system is to ensure that operations are conducted in adherence to the corporatepolicies identify areas of improvement and ensure compliance with the applicable rulesand regulations. 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 Audit Committee.
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 Companyhas adopted Standard Operating Procedures (SOP) and delegated roles and responsibilitiesto various Department heads for effective implementation of the same for furtherstrengthening the Internal Control Systems.
This is to ensure that the Company conducts its business with highest standards ofstatutory legal and regulatory compliance.
Corporate Social Responsibility (CSR):
The Composition of the Corporate Social Responsibility (CSR) Committee of the Companyis as follows:
|Dr. Anurudh Kumar Singh ||Chairman Independent Director |
|Mr. Veerendra Kumar Singh ||Member Non Executive Director |
|Mr. Dhirendra Kumar ||Member Executive Director |
Furthermore as required by Section 134(3)(o) of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility) Rules 2014 additional information on thePolicy and implementation of CSR activities by your Company during the year are providedin Annexure to this report.
During the Financial Year 2016-17 the Average Net Profit calculated according toSection 135 read with Section 198 of the Companies Act 2013 is negative therefore theCompany was not warranted to spend any monies on CSR activities. [Annexure A]
Conservation of Energy Technology absorption Foreign exchange earnings and outgo:
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 and Development activitiesare directed to achieve the aforesaid goal.
The in-house developed Proprietary Technology Platform' and research facilitiesare augmented 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.
Your Company is making marketing efforts in selected countries and exploring newmarkets. The Company regularly participates in prestigious international exhibitions andconducts market surveys. During the year Your Company spent Rs. 313002/- (Rupees Threelakhs thirteen thousand two only) in foreign exchange towards' travel expenses andearnings towards foreign exchange was Rs. 79974.
The particulars are enclosed as Annexure B to the Board's Report.
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.
Your Company strictly believes that maintaining cordial industrial relations is the keyto progress of the firm individuals management industry and nation.
Key Managerial Personnel:
During the year under review the Key Managerial Personnel of the Company comprised ofthe following members:
|No. ||Name of the person Messrs ||Designation |
|1. ||Veerendra Kumar Singh ||Managing Director* |
|2. ||Narendran R ||CFO* |
|3. ||Dhirendra Kumar ||Whole time Director* |
|4. ||Jayanth Vishwanath ||CFO* |
*1. Mr. Veerendra Kumar Singh was appointed as Managing Director w.e.f. 30th May 2016.2. Mr. Narendran R CFO resigned with effect from 4th June 2016 3. Mr. Dhirendra Kumarwas appointed as the Whole time Director w.e.f 26th October 2016. 4. Mr. JayanthVishwanath was appointed as the CFO with effect from 10th Feb 2017.
Change in Directors and Key Managerial Personnel
A. Appointment Change in designation and Resignation
Details on appointments changes in designation and resignation of Directors keymanagerial personnel and Committees of Directors as well as on Board and CommitteeMeetings of your Company and the matters required to be specified pursuant to sections134 of the Companies Act 2013 and the SEBI (Listing Obligations And DisclosureRequirements) Regulations 2015 are provided in the Corporate Governance Report that isannexed to and forms part of this Annual Report.
Mr. Dhirendra Kumar who was already in the employment as the Chief Scientific Officerof the Company was appointed as Additional Whole Time Director w.e.f 26th October 2016.Due to the Business requirements he was thereafter redesignated as the Managing Directorof the Company w.e.f 9th August 2017 while continuing to hold the position of ChiefScientific Officer.
Mr. Sachin Gupta (DIN: 0014550) was appointed as the Additional and Managing Directorof the Company on 19th April 2016 post resignation of Mr. Dhirendra Kumar former ManagingDirector at a remuneration of Re. 1 per month till such time the Company achievesturnaround. Due to some unavoidable circumstances and personal reasons he resigned fromthe office of Managing Director w.e.f 30th May 2016 and continued to act as an AdditionalDirector of the Company. Further he tendered his resignation as Director w.e.f 8th August2016.
Mr. Sunil Puri was appointed as an additional Independent Director of the Company from19th April 2016. Further he resigned from the office of Director with effect from 21stMarch 2017 due to personal reasons.
Mr. Ballachandra Chengappa Madappa (DIN: 00296426) resigned from the position ofIndependent Director of the Company w.e.f. 11th April 2016 Mr. Krishnaswamy Ramaswamy Iyerresigned from the position of Independent Director w.e.f 12th April 2016. Ms. Tay Geok Lanwas appointed as an Additional Non-Executive Director on 29th May 2017 by the Board ofDirectors and her appointment is being placed before the Shareholders.
Mr. Peter Joseph Kennedy was appointed as additional Directors by the Board w.e.f 2ndSeptember 2016 and was approved at the previous Annual General Meeting as Director.
Mr. Declan Pearse Macfadden was appointed as additional Independent Director w.e.f 26thOctober 2016 and his appointment is being placed before the shareholders.
Mr. Narendran R. resigned from the position of CFO w.e.f. 4th June 2016. Further Mr.Jayanth Vishwanath was appointed as the Chief Financial Officer of the Company from 10thFebruary 2017.
Further Ms. Yong Teck Seong Daniel resigned from the office of Director with effectfrom 29th May 2017.
The Company has appointed Ms. Vidya Sridharan as the Company Secretary and Complianceofficer with effect from 29th July 2017 at its Board Meeting in compliance with theCompanies Act 2013.
Mr. Veerendra Kumar Singh who held the position of Managing Director of the Companyresigned from the position of Managing Director on 9th August 2017 while continuing asDirector.
As per the provisions of the Act Mr. Akbal Narayan Singh (holding DIN: 00296396)retires by rotation and being eligible offers himself for re-appointment. A briefprofile of Mr. Akbal Narayan Singh is provided in the Notice of AGM.
C. Independent Directors
Mr. Declan Pearse Macfadden was appointed as the Additional Non-Executive IndependentDirector on 26th October 2016 at the Meeting of Board of Directors.
Mr. Manoj Srivastava and Mr. Vinod Kumar Lahoti were appointed as an AdditionalNon-Executive Independent Director of the Company on 29th May 2017 at theMeeting of Board of Directors.
Your Company has received declarations from Mr. Declan Pearse Macfadden Mr. ManojSrivastava and Mr. Vinod Kumar Lahoti Independent Directors that they meet the criteriaof independence as provided in subsection (6) of Section 149 of the Companies Act 2013and SEBI (LODR) Regulations 2015. Mr. Declan Pearse Macfadden Mr. Manoj Srivastava andMr. Vinod Kumar Lahoti being eligible and offering themselves for appointment areproposed to be appointed as Independent Directors for a term of 5 (five) consecutiveyears.
Your Company has also received declarations from other Independent Directors namelyAnurudh Kumar Singh and Gangwani Reeta Satish.
Copy of the draft letter of appointment to each of the Independent Directors in themanner as provided in the Companies Act 2013 and SEBI (LODR) Regulations 2015 have beendisclosed on the website of the Company.
Brief profiles of Mr. Declan Pearse Macfadden Mr. Manoj Srivastava and Mr. Vinod KumarLahoti as required by SEBI (LODR) Regulations 2015 form part of the Notice conveningthe 23rd Annual General Meeting contained in this Annual Report. The Boardrecommends the same for Shareholders' approval in the ensuing Annual General Meeting.
Your Directors place on record their sincere appreciation to the Directors who haveresigned during the year for the valuable services rendered by them during their tenure asDirectors in the Company.
D. Number of Meetings of the Board:
The details of the Board Meetings and other Committee Meetings held during thefinancial Year 2016-17 are stated in the Corporate Governance Report. The intervening gapbetween the Meetings was within the period prescribed under the Companies Act 2013. Themaximum interval between any two meetings did not exceed 120 days.
E. Board Committees:
The Company has setup the following Committees of the Board:
Audit Committee Nomination and Remuneration Committee Stakeholders' RelationshipCommittee and Corporate Social Responsibility Committee.
The composition of each of the above Committees and their respective roles andresponsibilities are detailed in the Corporate Governance Report.
F. Details of remuneration to Directors:
The Company had 78 employees as of 31st March 2017. Pursuant to Section197(12) of the Companies Act 2013 and Rule 5 (1) (2) (3) of the Companies (Appointmentand Remuneration) Rules 2014 details/disclosures of Ratio of Remuneration to eachDirector to the median employee's remuneration is annexed to this report as Annexure-F.
There are no employees posted and working in a country outside India not beingDirectors or relatives drawing more than One Crore Two Lakhs rupees per financial year orEight Lakhs Fifty Thousand rupees per month as the case may be. Thereforestatement/disclosure pursuant to Sub Rule 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is not required to be circulated to themembers and is not attached to the Annual Report.
As stated in the Corporate Governance Report sitting fees are paid to Non-ExecutiveDirectors for attending Board/ Committee Meetings. They are also entitled to reimbursementof actual travel expenses boarding and lodging conveyance and incidental expensesincurred in attending such Meetings in accordance with the travel policy for Directors
G. Board Evaluation:
Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015 the performance evaluation of the Board for FY 2016-17 will be carried out in FY2017-18 as per the comprehensive and structured questionnaire framed by Nomination andRemuneration Committee. Your Board has initiated the process of performance evaluation ofthe Board which was done at the Meeting on 10th February 2017 and requisitecriteria have been established. The criteria provides for evaluation of the Board theCommittees of the Board and individual Directors including the Chairman of the Board. Aseparate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board/ Committees' who were evaluated on parameters such aslevel of engagement and contribution independence of judgement safeguarding the interestof the Company and its minority Shareholders etc. Board evaluation plays an important rolein further enhancing the governance standards of the Company and your Company keeps acloser view on the evaluation Policy and its framework.
The Board has received consistent ratings on its overall effectiveness and has beenrated comparatively higher this year for composition of Directors and their skillsattributes and experience. The Board has also noted areas requiring more focus in thefuture.
The Remuneration Policy of Your Company is aimed to attract retain reward andmotivate talented individuals critical for achieving the long term strategic goals of theCompany. Your Company's Policy is designed to reflect the performance and is aligned tothe long term interest of the Stakeholders. The Board has on the recommendation of theNomination and Remuneration Committee framed a Policy for selection and appointment ofDirectors Senior Management and their remuneration. The Remuneration Policy is stated inthe Corporate Governance 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 ManagingDirector in advance.
Directors' Responsibility Statement:
Pursuant to Section 134 (5) of the Act in relation to financial statements (togetherwith the notes to such financial statements) for the financial year 2015-16 the Board ofDirectors report that:
(i) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(ii) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are 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/ loss of the Company for that period;
(iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the Directors have prepared the financial statements on a going concern basis;
(v) the Directors have laid down internal financial controls to be followed by theCompany commensurate with the size and nature of its business and the complexity of itsoperations and that such internal financial controls are adequate and are operatingeffectively; and
(vi) the Company has a system of getting reports of compliance periodically from theunits and is also in the process of implementing more comprehensive systems to ensurecompliance with the provisions of all applicable laws.
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 particulars of every contract /arrangement entered into by the Company with therelated parties referred to Section 188 of the Companies Act 2013 including certainarm's length transaction under third proviso thereto has been disclosed in Form AOC 2[Annexure C].
The Policy on related party transactions as approved by the Board is uploaded on theCompany's website and is available on:
None of the Directors has any material pecuniary relationship or transactions vis-a-visthe Company
Code of Conduct:
The Board of Directors have 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 BusinessConduct' which 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 behavior 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) and (10) of the Companies Act 2013 yourCompany 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's responsibility. Your Companybelieves in achieving its business goals solely through means that are ethicaltransparent and accountable and this principle forms the basis of our strong VigilMechanism.
The Vigil Mechanism or the Whistle Blower Policy has been uploaded on the website ofthe Company at http:// www.camsonbiotechnologies.com/investor/clause49compliances.htm
Messrs Deloitte Haskins & Sells LLP Chartered Accountants (FRN:117366W/W-100018) resigned from the position of Statutory Auditors vide theircommunication dated 25th July 2017 causing casual vacancy.
Subsequently the Audit Committee at its Meeting held on 29th July 2017recommended the appointment of Messrs YCRJ & Associates (FRN: 0069275) who have giventheir consent and willingness to be appointed as Auditors of your Company. The Board ofDirectors at its Meeting held on the same day approved the recommendation of the AuditCommittee and proposed to appoint Messrs YCRJ & Associates Chartered Accountants asthe Statutory Auditors of your Company to hold office till the conclusion of ensuingAnnual General Meeting.
As required under Section 139 of the Companies Act 2013 Messrs YCRJ & Associateswere proposed to be appointed as the Statutory Auditors of the Company to hold office fromthe conclusion of ensuing Annual General Meeting upto the conclusion of 28th AnnualGeneral Meeting of the Company. The Auditors have given their consent and eligibility forthe said appointment.
The Board recommends the same for Shareholders' approval in the ensuing Annual GeneralMeeting.
Further in compliance with statutory requirements the Statutory Auditors have notrendered to the Company during the financial year 2016-17 directly or indirectly any ofthe services enumerated under Section 144(1) of the Companies Act 2013.
Auditor's Report for the Financial Year ended 31st March2017:
During the year under review there is no qualification or adverse remarks made by theAuditors in their reports. However the Statutory Auditors (Auditors) have givendisclaimer of their opinion in Report on the Standalone Financial Statements Report onInternal Financial Controls over Financial Reporting Consolidated Financial Statementsand Companies (Auditor's Report) Order 2016 [CARO] for which your Directors haveaddressed with suitable replies as below:
We draw attention to note no. 39 of the Financial Statements which was also reportedin the our audit report for the financial year ended March 31 2016 review reports for thequarter ended December 31 2016 quarter ended September 30 2016 and quarter ended June30 2016. During the previous year the Company had received communication from ashareholder alleging certain issues relating to financial matters of the Company with arequest to conduct a forensic audit. The Company had requested the said shareholder toprovide specific facts and scope/areas for the forensic audit. In the absence of specificdetails requested above the Company's Board of Directors proposed to carry out a forensicaudit by appointing an independent committee/legal counsel to decide the scope and areasof forensic audit. Till date the Company has not conducted the forensic audit. TheCompany is of the view that material adjustments or disclosures if any arising out ofthe forensic audit would be considered after conclusion of the forensic audit and theManagement has not estimated the impact of any adjustment that may arise to the amountsand disclosures in the Statement. As a result of these matters we have not been able toobtain sufficient appropriate audit evidence to state whether any adjustments ordisclosure would be required to the information included in the Financial Statement andthe impact thereof.
Our report on the standalone financial statements for the year ended March 31 2016 wasalso disclaimed for the said matter. Further reference is also drawn towards thedisclaimer of Auditor's opinion in Report on the Standalone Financial Statements of theCompany under the heading Report on other legal and Regulatory requirements with referenceto point 1(a) (b) (c) (d) (e) (h) and 1(i)(ii) and para of Basis of Disclaimer ofopinion and disclaimer of opinion in the Report on Internal Financial Control overFinancial Reporting and para 23 and 4 of point no (x) to Annexure B to the IndependentAuditor's Report.
Further refer to para Basis of Disclaimer of Opinion and Disclaimer of Opinion to theReport on the Consolidated Financial Statements point 1 (a) (b) (c) (d) (e) (g) h(i) (ii) and Para Basis of disclaimer of opinion and Disclaimer of opinion under AnnexureA to the Independent Auditor's Report.
Reply by the Board of Directors:
Your Directors state as follows:
1. The Disclaimer opinions referred above are appearing solely since the Company wasunable to conduct the forensic Audit as yet as requested by shareholders namely Messrs BioHarvest and the promoter Mr. Dhirendra Kumar.
2. However the forensic Audit could not be conducted due to lack of sufficient fundsfor undertaking the said audit.To address the requirement your company requested MessrsBio Harvest to provide additional funds for initiating Forensic Audit but they wereunable to extend the same. Hence forensic Audit is yet to be initiated.
3. Further the attention of the Investors are sought to the detailed CARO Report(Annexure "B" to the Independent Auditor's Report) which is based on the actualAudit conducted during the financial year wherein the Auditors have provided anunqualified report on various Financial and Operating areas covered under CARO.
4. With reference to point no (vii) of CARO relating to delay in payment of EmployeeProvident Fund and TDS under the Income Tax Act 1961 your Directors state that they arestrongly working towards revival of the company and are hopeful that all the statutorydues will be cleared in the following months.
5. With reference to point no (viii) (a) of CARO relating to default in payment ofprincipal and interest your Directors state that during the previous year your Companyfaced challenges due to unfavourable climatic conditions draught condition huge dumpingof stocks and mismanagement by our Ex-CEO Mr. Santhosh Nair coupled with adverse economicconditions. However the Company is the right path to recovery in the current financialyear and have already made partial payments during the current financial year. Your Boardis confident that the outstandings will be disbursed shortly."
Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Company hasappointed Mr. Vijayakrishna K.T Practising Company Secretary to undertake the SecretarialAudit of the Company. The Secretarial Audit Report is annexed herewith [Annexure D]. TheSecretarial Audit Report contains following qualification reservation or adverse remark.
Explanations by the Board on the comments of Secretarial Auditor:
|Sl. No. ||Qualifications made by Secretarial Auditor ||Explanations by the Board |
|1. ||The Company had not appointed Company Secretary as mandated under Section 203 of the Act during the year. However it is learnt that the Company has recruited a qualified Company Secretary subsequently ||The Company has appointed Company Secretary under Section 203 of the Companies Act 2 013at its Board Meeting dated 29th July 2017. |
|2. ||It was reported by the Chairperson at the meeting of the Audit Committee that CLSA a Shareholder had obtained the resignation letters from the Directors including Indepen- dent Directors without date. Being a Listed Company this may impact and cause undue influence on the deliberations at the meetings of the Board/Committee. ||Yes it is a fact. The Management objected to this unique demand which is against the prevailing corporate practice. |
|3. ||There was a request for conduct of forensic audit; however the Company is yet to initiate the said audit ||Two parties Messrs Bio Harvest and the promoter Mr. Dhirendra Kumar both requested for forensic audit; but due to lack of funds to undertake the said audit the same could not be conducted. The management requested Messrs Bio harvest to bring in the money for initiating forensic audit but they could not do so. |
| || ||Hence the matter is still pending. |
|4. ||Internal Complaints Committee (ICC) under the Prevention of Sexual Harassment at Work Place Act 2013 does not have the External Member. ||The Company is in the process of finalizing and appointing an external member to Internal Complaints Committee. |
|5. ||Compliance on Secretarial Standard needs to be strengthened. ||The Company has now taken utmost care to adhere with Secretarial Standards. |
|6. ||Certain returns/registers required to be filed/maintained under some of the general laws are not maintained/'filed within prescribed time. ||Company already initiated steps to maintain/file the requisite returns under applicable laws. |
Pursuant to the direction from the Ministry of Corporate Affairs for appointment ofCost Auditors your Board had reappointed Messrs Murthy & Co. LLP as the CostAuditor of your Company for the financial year 2017-18 to conduct the audit of the costrecords 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 Cost Auditor.
Business Risk Management:
Pursuant to Section 134 (3) (n) of the Companies Act 2013 and SEBI (Listingobligations and Disclosure Requirements) Regulations 2015 the Company has Business RiskManagement policy aimed at identification assessment monitoring and mitigation of riskand also capturing lessons learnt for future reference. The Company has in place activemechanism to periodically review the risk assessment and minimization procedures andinform the Board Members in case any risk is foreseen.
At present the Company has not identified any element of risk which may threaten theexistence 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 and Redressal)Act 2013. Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this Policy.
The following is a summary of sexual harassment complaints received and disposed offduring FY 2016-17: o No of complaints received: NIL o No of complaints disposed off: NIL oNo of cases pending for more than 90 days: Nil o No of workshops or awareness programs: 4
Significant and Material Orders Passed by the Regulators or Courts
There are no significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
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 E].
Corporate Governance and Management Discussion & Analysis Reports:
The Corporate Governance and Management Discussion and Analysis Report capturing yourCompany's performance industry trends and other material changes with respect to yourCompanies which form an integral part of this Report are set out as separate Annexurestogether with the Certificate from a Practicing Company Secretary regarding compliancewith the requirements of Corporate Governance norms as stipulated in Regulation 34 of SEBI(Listing obligations and Disclosure Requirements) Regulations 2015.
Industrial relations have been cordial and constructive which have helped your Companyto achieve production targets.
Listing With Stock Exchanges:
Your Company confirms that it has paid the Annual Listing Fees for the financial year2016-17 to BSE Limited where the Company's Shares are listed.
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 BioTechnologies Limited exercisable into not more than 1499990 options has been obtained bythe Company from the Stock Exchanges. The options became vested in the eligible employeesas per the scheme with effect from February 12 2016. Options were granted on February 122015. There was a minimum gap of one year between date of grant and first vesting.
The applicable disclosures as stipulated under SEBI Guidelines as at 31stMarch 2017 are given hereunder:
(i) Options Granted: 1499990 on 12th February 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: 66.67 % of options (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 (Due to the resignation of CEO the optionsvested on him has lapsed since no options were exercised by him)
(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 up capital were granted on February 12 2015to Chief Executive Officer Mr. Santosh Nair nut due to his resignation as on 31st March2016 and he did not exercised his rights the options vested on him has lapsed.
(xii). Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise ofoption calculated in accordance with [Accounting Standard (AS) 20 Earnings PerShare']: 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 |
|= Re 0.50 || |
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 * Re 0.50 = 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 CompensationCost as per 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 have been implemented in accordance with SEBI(Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines 1999 andresolutions passed by the Shareholders. The certificate would be available at the AnnualGeneral Meeting for inspection by Members.
Transfer to Investor Education and Protection Fund (IEPF)
Pursuant to the provisions of Sections 123 of the Companies Act 2013 read with Rule 8of the Companies (Accounts) Rules 2014 the Unclaimed Dividend and Deposits remainunclaimed and unpaid for a period of more than 7 years. The Company will be accordinglytransferring an amount aggregating to unpaid dividend during the year to the InvestorEducation and Protection Fund within 30 days from the expiry of 7 years.
Shareholders may note that both the unclaimed dividend and the corresponding sharestransferred to IEPF including all benefits accruing on those shares if any can beclaimed back from the IEPF following the procedure prescribed in the rules. No claim shalllie in respect thereof with the Company.
During the year 2016-17 unclaimed Dividend for financial year 2008-09 of Rs. 326230(Rupees Three Lakh Twenty Six Thousand Two Hundred and Thirty Only) was transferred to theInvestor Education and Protection Fund (IEPF) as required under the Investor Educationand Protection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 (asamended from time to time). Pursuant to the provisions of Section 124(6) of the CompaniesAct 2013 and the rules mentioned aforesaid equity shares in respect of which dividendhas not been claimed for the financial year 2008-09 will be transferred to the IEPFAuthority in accordance with the aforesaid rules.
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.
Your Directors place on record their sincere appreciation for the continued supportfrom shareholders customers suppliers banks and financial institutions and otherbusiness associates and particularly the Employees of the Company.
A particular note of thanks to all employees of your company without whosecontribution your Company could not have achieved the year's performance.
For and on behalf of the Board of Directors
|Place : Bangalore ||Dhirendra Kumar ||Akbal Narayan Singh |
|Date : 9th August 2017 ||Managing Director ||Director |
| ||DIN : 00301372 ||DIN : 00296396 |