Dear
Members,
Kaveri Seed
Company Limited
The
Directors have pleasure to present their 36th Annual Report and the audited Annual
Accounts for the year ended 31st March 2023.
STANDALONE
AND CONSOLIDATD FINANCIAL HIGHLIGHTS:
PERFORMANCE
REVIEW
Your
Company's performance during the year as compared with that during the previous year
is summarized below:
(In H
Lakhs)
S. |
Particulars |
Standalone |
Consolidated |
No. |
|
March 31,
2023 |
March 31,
2022 |
March 31,
2023 |
March 31,
2022 |
1 |
Revenue
from operations |
1,00,056.43 |
91500.02 |
1,07,035.53 |
96,998.16 |
2 |
Profit
before finance cost, depreciation and tax |
29,694.08 |
23,840.59 |
30,663.06 |
24,381.05 |
|
expense |
|
|
|
|
3 |
Finance
Cost |
18.20 |
12.10 |
18.84 |
12.74 |
4 |
Profit
before depreciation and tax expense |
29,675.88 |
23,828.49 |
30,644.22 |
24,368.31 |
5 |
Depreciation |
1,950.45 |
2,010.45 |
2,054.78 |
2,093.12 |
6 |
Profit
before exceptional items and tax |
27,725.43 |
21,818.04 |
28,589.44 |
22,275.19 |
7 |
Exceptional
items |
- |
- |
- |
- |
8 |
Profit
before Tax Expense |
27,725.43 |
21,818.04 |
28,589.44 |
22,275.19 |
9 |
Tax
Expense |
1020.98 |
927.73 |
1,324.95 |
995.51 |
10 |
Profit
after Tax Expense |
26,704.45 |
20,890.31 |
27,264.49 |
21,279.68 |
11 |
Non-controlling
interests |
- |
- |
91.94 |
34.49 |
12 |
Profit
after tax expense after non-controlling |
26,704.45 |
20,890.31 |
27,172.55 |
21,245.19 |
|
interests |
|
|
|
|
13 |
Add:
Surplus at the beginning of the year |
1,25,384.96 |
1,20,453.42 |
1,27,701.64 |
1,22,380.04 |
14 |
Total
Available for appropriation |
1,52,089.41 |
1,41,343.73 |
1,54,874.19 |
1,43,625.23 |
|
Appropriations |
|
|
|
|
15 |
Dividend
including taxes |
2,332.87 |
2332.87 |
2,297.85 |
2297.69 |
16 |
Transfer
to general reserve |
1000.00 |
1000.00 |
1000.00 |
1000.00 |
17 |
Utilized
for Buyback |
14,219.30 |
12589.82 |
14,219.30 |
12589.82 |
18 |
Transferred
to Capital Redemption Reserve |
48.00 |
40.15 |
48.00 |
40.15 |
19 |
Amortization
of Interest on loan to employee trust |
- |
- |
- |
- |
20 |
Others |
(0.48) |
(4.07) |
(0.48) |
(4.07) |
|
Total
Appropriations |
17,599.69 |
15,958.77 |
17,564.68 |
15,923.59 |
21 |
Surplus
carried to Balance Sheet |
1,34,489.72 |
1,25,384.96 |
1,37,309.51 |
1,27,701.64 |
COMPANY'S
AFFAIRS:
Operations:
During the
year under review, the Company has achieved revenue of H 1,00,056.43 Lakhs and net profit
of H 26,704.45 Lakhs on Standalone basis. During the same period, the Consolidated Revenue
was H 1,07,035.53 Lakhs and net profit after non-controlling interests was H 27,172.55
Lakhs.
Indian
Agriculture Sector
In FY23,
India's agricultural product exports demonstrated a noteworthy growth of 9%, reaching
a total value of US$ 26.3 billion compared to the preceding fiscal year. This was
primarily driven by substantial increases in the shipment of rice, fruits, vegetables,
livestock, and dairy products. This exceeded the target set by the Agricultural and
Processed Food Products Exports Development Authority (APEDA), surpassing US$ 23.56
billion. Fresh and processed fruits and vegetables exhibited an impressive export growth
of 18.8%, amounting to US$ 3.8 billion, while the export of cereals, preparations, and
processed food products experienced a notable ascent of 20% to US$ 4.3 billion in the
fiscal year 2022-23. India has upheld its position as the world's leading rice
exporter, with a substantial 45% share in the global grain trade. This is underscored by
competitive pricing, a near-record high rice supply, and an impressive 15% YoY increase in
rice exports, reaching a record US$ 11.1 billion.
Key Growth
Drivers
PM Kisan Scheme - The central sector PM Kisan scheme supplements the
financial needs of land-holding farmers by providing a yearly benefit of H 6,000 directly
to their bank accounts through the Direct Benefit Transfer (DBT) system. In the payment
cycle of April-July 2022-23, around 11.3 crore farmers benefited from the scheme, offering
total assistance of over H 2 million to numerous farmers in a span of three years.
Agriculture Infrastructure Fund (AIF) - Established for the period
2020-21 to 2032-33, the AIF facilitates financing for agricultural infrastructure. With an
allocation of H 1 lakh crore for 2020-21 to 2025-26, the fund also provides interest
subvention and credit guarantee assistance until 2032-33. Since its inception, the AIF has
sanctioned H 13,681 crore for more than 18,133 agricultural infrastructure projects across
the country.
PM Fasal Bima Yojana (PMFBY) - The world's largest crop insurance
scheme by farmer enrolments, the PMFBY records an average of 5.5 crore applications
annually. Farmers only bear a minimal financial burden, contributing 1.5 percent and 2
percent of the total premium for the Rabi and Kharif seasons respectively, while the
majority of the premium cost is covered by the Central and State Governments. Over the
past six years, farmers paid a premium of H 25,186 crore and received claims totaling H
1.2 lakh crore.
Agricultural credit target - The Agricultural Credit Target is set to
rise to H 20 lakh Crores, focusing on fisheries, animal husbandry, and dairying. This
entails introducing the PM Matsya Sampada Yojana with an H 6000 crore outlay to enhance
value chain efficiency in these sectors.
Digital ecosystem upscaling - The development of an open-source,
interoperable public infrastructure for agriculture aims to improve access to credit,
insurance, market intelligence, and support for the growth of agri-tech industries and
startups. An allocated budget of H 2,516 Crore is earmarked for the computerisation of
63,000 Primary Agriculture Credit Societies, enhancing operational efficiency and business
diversification.
Budget growth - Over the past decade (fiscal year 2013 to fiscal year
2023), the budget has shown a Compound Annual Growth Rate (CAGR) of 11%. Notably, the
allocation towards the agriculture sector and rural development has exhibited a CAGR of
approximately 12%. This underscores the government's dedicated investment in
promoting agriculture sector growth and enhancing living standards in rural areas.
Indian Seed
Industry
The Indian
seed industry has demonstrated substantial growth, expanding to a value of USD 6.3 billion
in 2022 and anticipated to reach USD 12.7 billion by 2028, driven by a notable CAGR of
12.43% between 2023 and 2028. This growth trajectory is attributed to a confluence of
factors, including the country's burgeoning population and the presence of fertile
arable lands across diverse agro-climatic zones. The strategic partnership between public
and private sectors, coupled with the commercialisation of agriculture, has further
propelled the industry. Pioneering seed breeders are harnessing advanced digital
technologies to empower farmers in managing challenges posed by pests, climate variations,
and environmental factors, thus bolstering overall market expansion. The integration of
cutting-edge tools such as data science, artificial intelligence, and advanced phenomics
within the agricultural sector presents promising opportunities for the seed industry. The
Government of India's proactive role through initiatives like the Integrated Scheme
for Oilseeds, Pulses, Oil Palm, and Maize (ISOPOM) and the Rashtriya Krishi Vikas Yojana
has fostered an environment of support and growth for both farmers and seed breeders.
Complemented by increased research and development investments in crop production, supply
chain management, and quality assurance by research institutes, these endeavours are
poised to catalyse the Indian seed industry's trajectory.
Vibrant
R&D Division
Kaveri
Seeds has solidified its position as a frontrunner in the market by releasing promising
agricultural products every year, effectively addressing the aspirations of the farming
community while meeting market demands. The noteworthy stability in new product
contributions to the volume in FY 2022-2023 can be largely attributed to the Company's
robust R&D network focused on essential crops. Employing a team of over 165
professionals, including 100+ dedicated scientists, the Company consistently endeavours to
deliver high-yielding hybrids. Leveraging state-of-the-art biotechnology tools alongside
classical plant breeding methods, its advanced laboratory fosters innovation.
Additionally, its germplasm bank holds a valuable repository enhancing plant varieties
suitable for Indian agricultural conditions.
Research
and Development (R&D)
Agricultural
science is experiencing rapid advancement through novel and refined biotechnology tools,
nurturing innovations and pioneering product development. The Company's advanced
R&D proficiencies facilitate the conception, enhancement, and distribution of
cutting-edge products to the market. Throughout its operational history, the Company has
elevated both product yield and seed quality, concurrently achieving heightened seed
resilience against biotic and abiotic pressures.
Enhancing
crop productivity and stress resilience is pivotal for sustainable food production and
crop advancement. In pursuit of this objective, Kaveri Seeds adopts essential
biotechnological methodologies encompassing marker-assisted breeding (MB), and their
harmonious amalgamation with traditional breeding practices. The Company is also planning
to work on phonemics to design plant ideotypes that will be resilient to the effects of
climate change.
Kaveri
Seeds' resilient foundation in R&D has facilitated the innovation of novel
hybrids across various crops including cotton, maize, rice, millets and vegetables. The
Company has a consistent history of introducing fresh products, coupled with a robust
lineup of offerings meticulously designed to cater to the requirements of the farming
community. Leveraging its adeptness in risk management, the Company adeptly navigate
through prevailing market fluctuations.
Technical
innovations
The Company
aims to enhance its returns while expediting the rate of innovation. With a strong
commitment to innovating advanced products, it has forged collaborations with both
domestic and international institutions to augment its research capabilities.
Plant
variety protection
In order to
safeguard the Company's products, several hybrids that were created underwent
registration under the provisions of the Protection of Plant Varieties and Farmers Rights
Act (PPVFRA). A total of 274 applications have been submitted for the safeguarding of
plant varieties in accordance with the provisions outlined in the aforementioned Act.
Germplasm
The
germplasm bank of the Company facilitates the strategic formulation and advancement of
well-suited crop varieties and hybrids, tailored to the preferences of both farmers and
consumers. Through a robust germplasm foundation across various crops and productive
collaborations, the Company effectively acquire cutting-edge technology and germplasm
resources, expanding its genetic base for enhanced disease and pest tolerance.
Central
Varietal Release Committee
More than
27 hybrids were released and notified by the Central Varietal Release Committee (CVRC),
Government of India, and more are to be released soon.
DIVIDEND:
The Board
of Directors, at their meeting held on 08th August 2022, declared an Interim Dividend @
200% on the paid-up Equity Share Capital (i.e., H 4/- per equity share of the face value
of H 2/- per share) for the financial year 31st March 2023, which was paid to the
shareholders in September 2022. Pursuant to Regulation 43A of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Board has approved and
adopted the Dividend Distribution Policy and the same is available on the Company's
website viz. https://
www.kaveriseeds.in/wp-content/uploads/2023/08/Dividend-Distribution-Policy.pdf and is also
provided as annexure.
TRANSFER OF
AMOUNT TO RESERVES
The Company
has transferred H 10.00 Crores to the general reserve for the financial year ended 31st
March 2023 under the provisions of Companies Act, 2013 and Rules there under.
BUYBACK OF
EQUITY SHARES
In line
with the practice of returning free cash flow to the shareholders, during the financial
year 2022-23 the Company has completed its Fifth buy-back of 23,99,831 Equity Shares at an
average price of H 522.40/- per Equity Share for an aggregate consideration of H 125.37
Crores. The offer size of the Buyback was 9.68% of the aggregate paid up equity share
capital and free reserves of the Company and represented 4.11% of the total issued and
paid up equity share capital of the Company. The buyback process was completed on 27th
December, 2022 and the shares were extinguished on 29th December 2022.
SHARE
CAPITAL
During the
year, there was change in the Paid-up Share Capital of the Company. The paid up Equity
Share Capital of the Company as on 31st March 2023 was H 1118.44 Lakhs (5,59,21,829 Equity
Shares of H 2/- each). During the year under review, the Company has bought back 23,99,831
equity shares of the Company.
STATUTORY
AUDITORS & AUDITORS' REPORT
The
Statutory Auditors report is annexed to this annual report. There are no adverse remarks
on disclosure by the statutory auditors in their report. They have not reported any
incident of fraud to the Audit Committee of the Company during the year under review.
Pursuant to Section 139(2) of the Companies Act, 2013, read with Companies (Audit and
Auditors) Rules, 2014, the Company at its 35th Annual General Meeting (AGM) held on 29th
September 2022, had re-appointed M/s. M. Bhaskar Rao & Co., Chartered Accountants as
Statutory Auditors to hold office from the conclusion of 35th AGM until the conclusion of
40th AGM of the Company, subject to ratification by shareholders every year, as may be
applicable. However, the Ministry of Corporate Affairs (MCA) vide its notification dated
7th May 2018 has omitted the requirement under first proviso to section 139 of the
Companies Act, 2013 and rule 3(7) of the Companies (Audit and Auditors) Rules, 2014,
regarding ratification of appointment of statutory auditors by shareholders at every
subsequent AGM.
Consequently,
M/s. M. Bhaskar Rao & Co., Chartered Accountants, continues to be the Statutory
Auditors of the Company till the conclusion of 40th AGM, as approved by shareholders at
35th AGM.
INTERNAL
AUDITORS
The Board
of Directors of the Company has re-appointed M/s. M. Anandam & Co., Chartered
Accountants as Internal Auditors to conduct Internal Audit of the Company for the
financial year ended 31st March 2023. The Internal Audit reports are being reviewed on
quarterly basis by the Audit Committee of the Company.
COST
AUDITORS
Pursuant to
the provisions of Section 148 (1) of the Act read with the Companies (Cost Records and
Audit) Rules, 2014, your Company is not required to maintain cost records and accordingly
no such audit is required to be conducted.
SUBSIDIARY
COMPANIES
The Company
has 4 subsidiaries as of March 31, 2023. There was no material change in the nature of the
business carried on by the subsidiaries. As per the provisions of Section 129 of the
Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement
containing the salient features of the financial statements of the subsidiary Companies is
prepared in Form AOC-1 and is attached to the Financial Statements of the Company.
In accordance with the provisions of Section 136 of the Companies Act, 2013, the
consolidated financial statements along with relevant documents and separate audited
financial statements in respect of subsidiaries are available on the website of the
Company https://www.kaveriseeds.in/investors/subsidiaries-financials/
The Company
will make available the Annual Accounts of the subsidiary companies and the related
information to any member of the Company who may be interested in obtaining the same. The
annual accounts of the subsidiary companies will also be kept open for inspection by any
member at the Registered Office of the Company and that of the respective subsidiary
companies.
During the
Financial year, no Company has become or ceased to be Company's Subsidiary, Joint
Venture or Associate Company.
PARTICULARS
OF CONTRACTS OR ARRANGEMENTS WITH THE RELATED PARTIES
No material
related party transactions, during the year under review, with the Promoters, Directors or
Key Managerial Personnel falls under the scope of Section 188(1) of the Companies Act
2013. The information on transactions for the year under review were on arm's length
basis and in the ordinary course of business with the related parties pursuant to Section
134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given
in Form No. AOC-2 and the same forms part of this report. The company has developed
a Related Party Transactions framework through standard operation procedures for the
purpose of identification and monitoring of such transactions. The related party
transactions policy is available at https://www.kaveriseeds.in/wp-content/
uploads/2023/08/RELATED-PARTY-TRANSACTION.pdf
EXTRACT OF
ANNUAL RETURN
Pursuant to
sub-section 3(a) of Section 134 and sub Section (3) of Section 92 of the Companies Act,
2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014 the
Annual Return as at 31st March 2023 can be accessed at Company's website on
https://www.kaveriseeds.in/wp-content/ uploads/2023/08/MGT-9.pdf
SECRETARIAL
AUDIT REPORT
Pursuant to
the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors have
appointed M/s. L.D.Reddy & Co., a firm of Company Secretaries in Practice
(C.P.No.3752) as Secretarial Auditors to conduct Secretarial Audit of the Company for the
financial year ended 31st March 2023. The Secretarial Audit Report issued by M/s.
L.D.Reddy & Co, Practicing Company Secretaries in Form MR-3 is annexed to this Board's
Report as Annexure A.
The
Secretarial auditors Report does not contain any qualifications, reservation or adverse
remarks.
ANNUAL
SECRETARIAL COMPLIANCE REPORT
The Company
has undertaken an audit for the financial year 2022-23 for all applicable compliances as
per Securities and Exchange Board of India Regulations and Circulars/ Guidelines issued
thereunder. The Annual Secretarial Compliance Report issued by Mr. L. Dhanamjay Reddy,
Practising Company Secretary, Hyderabad has been submitted to the Stock Exchanges within
the specified time and same is formed part of a Corporate Governance.
BOARD'S
RESPONSE ON AUDITOR'S QUALIFICATION, RESERVATION OR ADVERSE REMARKS OR DISCLAIMER
MADE
There are
no qualifications, reservation or adverse remarks made by the statutory auditors in their
report or by the Practicing Company Secretary in the Secretarial Audit Report for the year
ended 31st March 2023. During the year, there were no instances of frauds reported by
auditors under Section 143(12) of the Companies Act, 2013.
AUDIT
COMMITTEE
The Audit
Committee of the Board of Directors consists Mr. K. Purushotham (Chairman), Dr.
S.Raghuvardhan Reddy, Mrs. M. Chaya Ratan and Mr. C. Mithunchand, members of the
Committee. The Board has accepted all the recommendations made by the Audit Committee
during the year. Further details can be seen in the chapter on Corporate Governance
report.
NOMINATION
AND REMUNERATION COMMITTEE
The
Nomination and Remuneration Committee presently consists of the following Directors namely
Mr. K. Purushotham, Chairman, Dr. S. Raghuvardhan Reddy and Mrs. M. Chaya Ratan as
Members.
CONSOLIDATED
FINANCIAL STATEMENTS
In
compliance with the relevant provisions of Section 133 of the Companies Act, 2013 and the
Ind As-110 on consolidated financial statements, read with the Accounting Standard AS-23
on Accounting for Investments in Associates, your Directors have pleasure in attaching the
consolidated financial statements for the financial year ended March 31, 2023, which forms
part of the Annual Report. The company has placed separately, the audited accounts of its
subsidiaries on its website https://www.kaveriseeds.in/investors/ subsidiaries-financials/
in compliance with the provisions of Section 136 of the Companies Act, 2013.
INTERNAL
CONTROL SYSTEMS AND THEIR ADEQUACY
The Company
has laid down a set of standards which enables implementation of internal financial
controls across the organization and ensure that the same are adequate and operating
effectively. The Board periodically reviews the findings and recommendations of the
statutory auditors, internal & secretarial auditors and suggests corrective actions
whenever necessary. The Audit Committee of the Board of Directors is also actively
reviewing the adequacy and effectiveness of the internal control systems and suggests
improvements to strengthen the same. The Audit Committee of the Board of Directors,
Statutory Auditors and Finance heads are periodically apprised of the internal audit
findings and corrective actions are taken. The Internal Audit team prepares annual audit
plans based on risk assessment and conducts extensive reviews covering financial,
operational and compliance controls. Audit plays a key role in providing assurance to the
Board of Directors. Significant audit observations and corrective actions taken by the
management is presented to the Audit Committee of the Board. The Audit Committee of the
Board monitors the performance of the Internal Audit team on a quarterly basis through a
review of audit plans, audit findings and speed of issue resolution through follow-ups.
Each year, there are at least four meetings in which the audit committee reviews internal
audit findings assurance and advisory function, responsible for evaluating and improving
the effectiveness of risk management, control and governance processes. The internal audit
team helps to enhance and protect organizational value by providing risk-based objective
assurance, advice, and insight.
ADEQUACY OF
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The
internal financial controls (IFC) framework at Kaveri Seeds encompasses internal controls
over financial reporting (ICOFR) as well as operational controls that have been put in
place across all key business processes of the Company. The internal controls are designed
to facilitate and support the achievement of the Company's business objectives and
such controls do enable the Company to adapt to changing and operating environment, to
mitigate risks to acceptable levels and to support right decision making and good
governance. Details in respect of adequacy of internal financial controls with reference
to the financial statements are briefly iterated below: a. The Company maintains all its
major records in ERP System. b. The Company has appointed internal auditors to examine the
internal controls, whether the workflow of the organisation is being done through the
approved policies of the Company. In every quarter, during the approval of financial
statements, internal auditors present the internal audit report and the management
comments on the internal audit observations; and c. The Board of Directors of the
Company has adopted various policies such as Related Party Transactions Policy, Whistle
Blower Policy, Policy to Determine Material Subsidiaries, Corporate Social Responsibility
Policy, Dissemination of Material Events Policy, Documents Preservation Policy, Sexual
Harassment Policy, Code of Conduct under Insider Trading Regulations, Code of Conduct for
Senior Management, Nomination and Remuneration Policy, Board Diversity Policy,
Dividend
Distribution Policy, Risk Management Policy and such other procedures for ensuring the
orderly and efficient conduct of its business for safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy and completeness of the
accounting records, and the timely preparation of reliable financial information.
INDIAN
ACCOUNTING STANDARDS IFRS CONVERGE STANDARDS
The
Ministry of Corporate Affairs vide its notification dated 16th February 2015 notified
under Section 133 of the Companies Act 2013 read with Companies (Indian Accounting
Standards) Rules, 2015. In pursuance of the said notification, your Company has prepared
the financial statements to comply in all material respects, in accordance with the
applicability of Indian Accounting Standards.
DIRECTORS'
RESPONSIBILITY STATEMENT:
Pursuant to
the requirement under Section 134(5) of the Companies Act, 2013, with respect to the
Directors' Responsibility Statement, the Board of Directors of the Company hereby
confirms: i) that the applicable accounting standards have been followed in the
preparation of the Annual Accounts. ii) that the Directors have selected such Accounting
policies and consistently applied judgments and estimates that are reasonable and prudent,
so as to give a true and fair view of the state of affairs of the Company at the end of
the financial year 31st March 2023 and of the profit of the Company for that
period. iii) that the Directors have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the Companies Act,
2013 for safeguarding the assets of the company and for preventing and detecting fraud and
other irregularities. iv) that the Directors have prepared the annual accounts on a going
concern basis. v) that the Directors have laid down Internal Financial Controls to be
followed by the Company and that the financial controls were adequate and were operating
effectively and vi) that the Directors have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems are adequate and
operating effectively.
BOARD OF
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Your
Company is managed and controlled by a Board comprising an optimum blend of Executive and
Non-Executive Directors. As on date the Board of Directors comprises of Ten (10) Directors
consisting of Five Executive Directors including the Chairman & Managing Director and
Five Independent Directors including the Women Independent Director.
The
composition of the Board is in conformity with Regulation 17 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 and the relevant provisions of
the Companies Act, 2013. The Directors possess requisite qualifications and experience in
general corporate management, strategy, finance, administration and other allied fields
which enable them to contribute effectively to the Company in their capacity as Directors
of the Company.
Pursuant to
the provisions of Section 203 of the Companies Act, 2013 the Key Managerial Personnel
(KMP) of the Company as on March 31, 2023 are: Mr. G.V.Bhaskar Rao, Chairman &
Managing Director, Mrs. G.Vanaja Devi, Dr. Gundavaram Pawan, Mr. C. Vamsheedhar and Mr. C.
Mithunchand, Whole time Directors, Mr. K.V. Chalapathi Reddy, Chief Financial Officer
& Mrs. V.Sreelatha, Company Secretary.
Changes in
Directors
Appointment
of Dr. Gundavaram Pawan, (DIN : 00768751) as Whole time Director of the Company w.e.f.8th
August 2022 approved by the shareholders at their 35th AGM held on 29th September 2022.
Director(s)
retiring by rotation:
In
accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company's
Articles of Association, Mr. C. Vamsheedhar ((DIN: 01458939), retires by rotation at the
ensuing Annual General Meeting and being eligible, offers himself for reappointment.
Declaration
from Independent Directors
None of the
Directors of the Company are disqualified under the provisions of the Companies Act, 2013
(Act') or under the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015. All Independent Directors have provided confirmations as contemplated
under Section 149(7) of the Act. As required by SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, a certificate from the Company Secretary in practice,
that none of the Directors on the Board of the Company have been debarred or disqualified
from being appointed or continuing as Directors of companies by the Board/Ministry of
Corporate Affairs or any such statutory authority, forms part of Corporate Governance
Report as Annexure.
During the
year under review, the non-executive independent directors of the Company had no pecuniary
relationship or transactions with the Company, other than sitting fees and reimbursement
of expenses incurred by them for the purpose of attending meetings of the Board/Committees
of the Company.
Registration
of Independent Directors in Independent Directors Databank
All the
Independent Directors of the Company have been registered and are members of Independent
Directors Databank maintained by Indian Institute of Corporate Affairs.
COMMITTEES
OF THE BOARD
The details
pertaining to the composition of the Board and its Committees are included in the
Corporate Governance Report, which is a part of this report.
MEETING OF
INDEPENDENT DIRECTORS
A separate
meeting of the Independent Directors was held under the Chairmanship of Mr. K.
Purushotham, Independent Director on 24th January 2023, inter-alia, to discuss evaluation
of the performance of Non- Independent Directors, the Board as a whole, evaluation of the
performance of the Chairman, taking into account the views of the Executive and
Non-Executive Directors and the evaluation of the quality, content and timelines of flow
of information between the management and the Board that is necessary for the Board to
effectively and reasonably perform its duties. The Independent Directors expressed
satisfaction with the overall performance of the Directors and the Board as a whole.
Familiarization
Programme for Independent Directors
The details
of the familiarization programme for the Independent Directors is reported in the Report
on Corporate Governance, which is attached to the Board's Report.
NUMBER OF
MEETINGS OF THE BOARD AND AUDIT COMMITTEE
During the
year under review five Board Meetings and Four Audit Committee Meetings were convened and
held. The dates on which the Board Meetings were held on 23rd May 2022, 08th August 2022,
27th October 2022, 14th November 2022 and 24th January 2023. The dates on which the Audit
Committee Meetings were held on 23rd May 2022, 08th August 2022, 14th November 2022 and
24th January 2023. The details of attendance of meetings held during the Financial Year
2022-23 forms part of the Corporate Governance Report. The time gap between the said
meetings were within the period prescribed under the provisions of the Companies Act, 2013
and the SEBI guidelines thereof.
CHANGE IN
THE NATURE OF BUSINESS, IF ANY:
There was
no change in the nature of business of the company or any of its subsidiaries.
FIXED
DEPOSITS:
Your
Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013.
Accordingly, no disclosure or reporting is required in respect of details relating to
deposits.
BOARD
EVALUATION
Pursuant to
the provisions of the Companies Act, 2013 and Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 and the guidance Note
on Board Evaluation issued by the SEBI on 5th January 2017, the Board has carried out an
annual performance evaluation of its own performance, the directors individually as well
as the evaluation of the working of its committees. The performance of the Board was
evaluated by the board after seeking inputs from all the directors on the basis of
criteria such as the board composition and structure, effectiveness of board processes,
information and functioning etc., The performance of the committees was evaluated by the
board after seeking inputs from the committee members on the basis of criteria such as the
composition of committees, effectiveness of committee meetings etc., In a separate meeting
of independent directors, performance of non-independent directors, the chairman of the
company and the board as a whole was evaluated, taking into account the views of executive
directors and non-executive directors.
The Board
and the nomination and remuneration committee reviewed the performance of individual
directors on the basis of criteria such as the contribution of the individual director to
the board and committee meetings like preparedness on the issues to be discussed,
meaningful and constructive contribution and valuable inputs in meetings etc., In the
board meeting that followed the meeting of the independent directors and meeting of
nomination and remuneration committee, the performance of the board, its committees, and
individual directors was also discussed. The performance evaluation of the Independent
Directors was completed. The performance evaluation of the Chairman and the
Non-Independent Directors was carried out by the Independent Directors. The Board of
Directors expressed their satisfaction with the evaluation process.
BOARD
DIVERSITY
The Company
recognizes and embraces the importance of a diverse board in its success. The Board has
adopted the Board Diversity Policy which sets out the approach to diversify the Board of
Directors. The Board Diversity Policy is available on the Company's website
https://www.kaveriseeds.in/wp-content/ uploads/2021/02/Policy-on-Board-Diversity.pdf
APPOINTMENT
OF DIRECTORS AND REMUNERATION POLICY
The
assessment and appointment of board members is based on a combination of criterion that
includes ethics, personal and professional stature, domain expertise, gender diversity and
specific qualifications required for the position. A potential board member is also
assessed on the basis of independent criteria defined in Section 149(6) of the Companies
Act, 2013 and Regulation 16(1)(b) of SEBI (LODR) Regulations. In accordance with Section
178(3) of the Companies Act, 2013, Regulation 19(4) of SEBI (LODR) Regulations and on
recommendations of the company's Nomination and Remuneration Committee, the Board
adopted a remuneration policy for directors, KMP, senior management and other employees.
The Policy is placed on the Company's website:
https://www.kaveriseeds.in/images/pdf/images/Nomination-and-Remuneration-Policy.pdf and
further details are set out in the Corporate Governance Report forming part of this annual
report.
CORPORATE
GOVERNANCE:
A detailed
Report on Corporate Governance systems and practices of the company is given in a separate
section forming part of this annual report.
The
Certificate issued by M/s. L.D.Reddy & Co., Practicing Company Secretaries, Hyderabad,
with regard to compliance with the conditions of Corporate Governance is attached to the
chapter on Corporate Governance.
MANAGEMENT
DISCUSSION AND ANALYSIS:
Management's
Discussion and Analysis report for the year under review, as stipulated under Regulation
34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 is presented in a separate section forming part of the
Annual Report.
CORPORATE
SOCIAL RESPONSIBILITY
In
compliance with Section 135 of the Companies Act, 2013, read with the Companies (Corporate
Social Responsibility Policy) Rules 2014, the Company has established Corporate Social
Responsibility (CSR) committee composed of Mr. G.V.Bhaskar Rao as Chairman, Mrs. G.Vanaja
Devi and Dr. S. Raghuvardhan Reddy as members. The Committee is responsible for
formulating and monitoring the CSR Policy of the Company, the Report on CSR Activities
forms part of this Report as Annexure - B. The Company has incorporated
a separate company in the name of Kaveri Bhaskar Rao Charitable Trust' under
Section 8 of the Companies Act, 2013 to undertake CSR and other charitable activities. For
other details regarding the CSR Committee, please refer to the Corporate Governance
Report, which is a part of this report.
https://www.kaveriseeds.in/wp-content/uploads/2021/09/ CSR-Policy.pdf
ENERGY CONSERVATION,
TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The
Information on conservation of energy, technology absorption, foreign exchange earnings
and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8
of the Companies (Accounts) Rules, 2014, forms part of this report as Annexure C.
EMPLOYEE
STOCK OPTION SCHEME
The Company
grants share-based benefits to eligible employees with a view to attracting and retaining
the best talent, encouraging employees to align individual performances with Company
objectives, and promoting increased participation by them in the growth of the Company.
Kaveri Seed
Employee Stock Option Plan 2018 (ESOP Plan)
On 19th
July 2018, pursuant to the approval by the shareholders by way of Postal Ballot, the
Board/Nomination and Remuneration Committee has been authorized to introduce, offer, issue
and grant the share-based incentives to eligible employees of the Company and its
subsidiaries under the ESOP Plan. The Kaveri Employee Stock Option Plan 2018 (ESOP Plan)
to be implemented through the Kaveri Employees Trust (Trust) with an objective of enabling
the company to attract and retain talented human resources by offering them the
opportunity to acquire a continuing equity interest in the Company, which will reflect in
their efforts to sustain the growth and profitability of the Company. The ESOP Plan
involves acquisition of shares, not exceeding 30,00,000 equity shares, from the secondary
market through Barclays Wealth Trustees (India) Private Limited as Trustees of Kaveri
Employees Trust for implementation and administration. As on 31st March 2023 a total of
8,73,491 Equity Share (Eight Lakhs Seventy Three Thousand Four Hundred Ninty One Only)
options were available in the Trust account. The Nomination and Remuneration Committee
(NRC), is empowered to formulate detailed terms and conditions of the ESOP Plan 2018, and
supervise the same. The specific employees to whom the Options would be granted and their
eligibility criteria would be determined by the Nomination and Remuneration Committee at
its sole discretion. Further, the Nomination and Remuneration Committee is empowered to
determine the eligible employees of subsidiary companies, whether existing or future,
whose employees will be entitled to stock options under this Scheme. The Nomination
and Remuneration Committee has granted 6,29,516 options @ 315/-. per option to the
eligible employees of the Company on 31.03.2020 under ESOP Plan 2018. During the year 2000
options were exercised. In this grant aggregating the total 6000 options exercised as on
31.03.2023.
Further,
the Nomination and Remuneration Committee at their meeting held on 25.03.2021 has granted
2,49,975 options @ H 450/- per option to the eligible employees of the Company during the
year under ESOP Plan 2018. There are no outstanding options for the year ended 31.03.2023.
Both the
granted options would vest on or after 1 (one) year from the respective date of grant(s)
but not later than 4 (four) years from the date of grant of such Options or any other
terms as decided by the Nomination and Remuneration Committee.
The ESOP
Plan is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014, as
amended from time to time, and there has been no material change to the plan during the
fiscal. The Disclosure required to be made under Regulation 14 of SEBI (Share Based
Employee Benefits) Regulations, 2014 is available on the Company's website at
https://www.kaveriseeds. in/wp-content/uploads/2023/08/ESOPS.pdf
STATEMENT
OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL
Details in
respect of remuneration paid to employees as required under Section 197 (12) of the
Companies Act, 2013 , read with Rule 5(2) & (3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, as amended forms part of this report.
In terms of Section 136 of the Companies Act, 2013 the same is open for inspection at the
Registered Office of the Company. Copies of this statement may be obtained by the members
by writing to the Company Secretary at the Registered Office of the Company. The ratio of
the remuneration of each Director to the median employee's remuneration and other
details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are enclosed
in Annexure D and forms part of this Report.
Affirmation
that the remuneration is as per the remuneration policy of the Company.
In
compliance with the provisions of the Companies Act, 2013 and SEBI Listing Regulations,
the Board, on the recommendation of the Nomination and Remuneration/Compensation Committee
approved the Policy for Selection, Appointment of Directors, KMPs and Senior Management
persons. The said Policy provides a framework to ensure that suitable and efficient
succession plans are in place for appointment of Directors on the Board and other
management members. The Policy also provides for selection and remuneration criteria for
the appointment of Directors and senior management persons. The Company affirms that the
remuneration is as per the remuneration policy of the Company.
INSURANCE
All
properties and insurable interests of the Company have been fully insured.
DIRECTORS
AND OFFICERS INSURANCE (D&O')
As per the
requirements of Regulation 25(10) of the SEBI Listing Regulations, the Company has taken
Directors and Officers Insurance (D&O') for all the Directors and Key
managerial Personnel of the Company.
BUSINESS
RESPONSIBILITY AND SUSTAINABILITY REPORT
The Business
Responsibility and Sustainability Report (BRSR) of your Company for the year ended
31.03.2023 forms part of the Annual Report as required under Regulation 34(2)(f) of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 is available as a
separate section in this Annual Report.
DIVIDEND
DISTRIBUTION POLICY
The Board
has adopted a suitable Policy for Dividend Distribution as per the Regulation 43A of the
SEBI (LODR) Regulations 2015. The policy is stated in the Annual Report and has been
uploaded on the Company's website and can be accessed at https://
www.kaveriseeds.in/wp-content/uploads/2023/08/Dividend-Distribution-Policy.pdf
MATERIAL
CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are
no material changes and commitments in the business operations of the Company from the
financial year ended March 31, 2023 to the date of signing of the Director's Report.
There has been no change in the nature of business of the Company.
PARTICULARS
OF LOANS, GURANTEES OR INVESTMENTS
The Company
makes investments or extends advances to its subsidiaries for business purposes. The
details of investments covered under the provisions of Section 186 of the Companies Act,
2013 are given in the notes to the Financial Statements provided in this annual report.
The details
of difference between amount of the valuation done at the time of one time settlement and
the valuation done while taking loan from the Banks or Financial Institutions along with
the reasons thereof is not applicable to the Company.
VIGIL
MECHANISM /WHISTLE BLOWER POLICY:
The Board
of Directors has adopted the Whistle Blower Policy, which is in compliance with Section
177(10) of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations 2015
to report genuine concerns or grievances. The Audit Committee Chairperson is the chief
ombudsperson. The policy also provides access to the Chairperson of the Audit Committee
for raising concerns. The Whistle Blower Policy has been posted on the website of the
company. https://www.kaveriseeds.in/wp-content/ uploads/2023/08/WHISTLE-BLOWER-POLICY.pdf
RISK
MANAGEMENT
Pursuant to
the requirement of SEBI (LODR) Regulations 2015, the Company has a risk management
committee of the Board consisting of Director Mr. Dr. S.Raghuvardhan Reddy, Independent
Director and Chairman of the Committee Mr. C.Vamsheedhar and Mr. C. Mithunchand as members
of the Committee. The Company through its Risk Management Policy identified the various
risks and challenges, internally as well as externally and takes appropriate measures with
timely actions to mitigate them and also recommend the Board about risk assessment and
minimization procedures. The Committee is monitoring and reviewing the risk management
plan and ensuring its effectiveness. The Audit Committee has additional oversight in the
area of financial risks and controls. The major risks identified by the businesses and
functions are systematically addressed through mitigating actions on a continuing basis.
The development and implementation of risk management policy has been covered in the
Management Discussion and Analysis, which forms part of this report and the Policy has
been posted on the website of the company viz., https://www.kaveriseeds.in/images/
pdf/images/Risk-Management-Policy_final.pdf
SIGNIFICANT
AND MATERIAL ORDERS PASSED BY THE COURTS/REGULATORS OR TRIBUNALS
There are
no significant and material orders passed by the Regulators/Courts or tribunals that would
impact the going concern status of the company and its future operations.
No
application was made or any proceedings pending under the Insolvency and Bankruptcy Code,
2016 (31 of 2016) during the financial year.
LISTING ON
STOCK EXCHANGES
The Company's
shares are listed on BSE Limited and the National Stock Exchange of India Limited.
TRANSFER OF
UN-PAID AND UN-CLAIMED AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to
the provisions of the Companies Act, 2013, read with IEPF Authority (Accounting, Audit,
Transfer and Refund) Rules, 2016 as amended, declared dividends which remained unpaid or
unclaimed for a period of seven years have been transferred by the company to the IEPF,
which has been established by the Central Government.
The
above-referred rules also mandate transfer of shares on which dividend are unpaid or
unclaimed for a period of seven consecutive years to IEPF. The Company has issued
individual notices to the shareholders whose equity shares are liable to be transferred to
IEPF on due dates, advising them to claim their dividend within the stipulated
time.
ENVIRONMENTAND
SAFETY
The Company
is conscious of the importance of environmentally clean and safe operations. The Company's
policy requires conduct of operations in such a manner that ensures safety of all
concerned, compliance to environmental regulations and preservation of natural resources.
POLICY ON
SEXUAL HARASSMENT
Your
Company has constituted an internal committee as per the Sexual Harassment of Women at
Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules there under. The
Company has a policy on prevention of Sexual Harassment at work place with a mechanism for
lodging complaints. The Company regularly conducts necessary awareness/workshops
programmes for its employees. The policy provides protection against sexual harassment of
women at workplace and ensures prevention and redressal of such complaints. During the
year under review, no complaints have been received under the policy. The said policy is
available on the website of the company. https://www.kaveriseeds.
in/images/pdf/images/sexual-harrasment-policy.pdf
COMPLIANCE
WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS
The Company
complies with all applicable mandatory Secretarial Standards issued by the Institute of
Company Secretaries of India.
CODE OF
CONDUCT
Board of
Directors have adopted and oversee the administration of the Company's Code of
Business Conduct and Ethics (the Code of Conduct'), which applies to all
Directors, Officers and Employees of Kaveri Seed Company Limited and its subsidiaries. The
Code of Conduct reflects the Company's commitment to doing business with integrity
and in full compliance with the law and provides a general roadmap for all the Directors,
Officers and Employees to follow as they perform their day to-day responsibilities with
the highest ethical standards. The Code of Conduct also ensures that all members of Kaveri
perform their duties in compliance with applicable laws and in a manner that is respectful
of each other and the Company's relationships with its customers, suppliers and
shareholders, as well as the communities and regulatory bodies where the Company does
business.
INSIDER
TRADING CODE
In
compliance with the Securities and Exchange Board of India (Prohibition of Insider
Trading) Regulations, 2015 (the PIT Regulations') on prevention of insider
trading, your Company has revised its Code of Conduct for regulating, monitoring and
reporting of trading by Designated Persons, in line with the recent amendments brought by
SEBI in the PIT Regulations. The said Code lays down guidelines, which advise Designated
Persons on the procedures to be followed and disclosures to be made in dealing with the
shares of the Company and cautions them on consequences of non-compliances. Your Company
has also updated its Code of practices and procedures for fair disclosures of unpublished
price sensitive information by including a policy for determination of legitimate
purposes.
INITIATIVES
FOR STAKEHOLDER RELATIONSHIP
The Company
has an effective Investor Relations Program (IR) through which the Company
continuously interacts with the investor community across various channels (Periodic
Earnings Calls and group meetings). The Company ensures that critical information about
the Company is available to all the investors by submitting all such information to the
Stock Exchanges and also uploading the information on the Company's website under the
Investors section. The Company strives to adopt emerging best practices in IR and building
a relationship of mutual understanding with investors and analysts.
HUMAN
RESOURCE MANAGEMENT
The great
task of Product development, Supply chain, Marketing etc. was done at Kaveri Seeds
successfully. We work as team by aligning objectives with organizational strategy to drive
business out comes successfully and personal motivation.
The above
success was possible, we strive to on board the right people, with right skills and
knowledge, at right time. The talent of individual employees utilized effectively managing
it with strategies and initiatives driven to achieve business goals.
Today
Kaveri Seed's strength of 1270 member strong work force drives our growth effectively
and efficiently.
Objective
oriented Trainings under taken:
Besides
organizing several developmental skills, we organize programmes to improve manage
behavioral and communication skills of our employees. All new recruits undergo a detailed
induction program including orientation about all the policies of the Company including HR
Policies and Practices of the company. The Induction program is continuously improved with
the help of employees feedback.
All the
Employees go through functional trainings specific to their role of job in the company.
Employees also undergo safety training as required by their role. Every employee in the
company undergoes on-the-job training customized to the requirements of that specific
employee. We encourage our Scientists to attend the Seminars, Symposia and Work Shops to
enrich their knowledge and participate in the interactive sessions. We also invite Sr.
Consultants and experts in the field of Genetics & Plant Breeding, Biotechnology,
Agronomy, Seed Technology etc. to conduct knowledge sessions. These sessions will give
motivation to our scientists to develop promising products with futuristic needs to meet
the aspirations of the farmers, so as to increase the farm income and to improve their
lives.
Every
quarter in all the departments Utkrishta Puraskar award were given to the best
performer . The aim is incentivizing employees to focus on and to achieve sustainable
objectives. The Company has formulated and adopted the Employee Stock Option Plan with a
view to motivate the employees of the Company to continue extending their participation to
the Company and enable the Company to achieve long term financial growth. The
administration and implementation of the plan has been entrusted to the Compensation
Committee of the Company.
INDUSTRIAL
RELATIONS:
The Company
enjoyed cordial relations with its employees at all levels. Your Directors record their
appreciation of the support and co-operation of all employees and counts on them for the
accelerated growth of the Company.
ACKNOWLEDGEMENTS:
The
Directors acknowledge and would like to place on record the commitment and dedication on
the part of the employees of your Company for their continued efforts in achieving good
results. Your Company is grateful to the Distributors, Dealers, Customers and farming
community for their support and encouragement. Your Directors thank the Banks, Financial
Institutions, Government Departments and Shareholders and look forward to having the same
support in all our future endeavors.
By Order of
the Board of Directors For KAVERI SEED COMPANY LIMITED
|
Sd/- |
Sd/- |
Date:
14.08.2023 |
G.V.BHASKAR
RAO |
G.VANAJA
DEVI |
Place:
Secunderabad |
Managing
Director |
Whole
time Director |