DIRECTORS' REPORT Your Directors are pleased to present the 22nd Annual Report together with the Audited Accounts of your Company for the financial year ended 31st March 2016. FINANCIAL HIGHLIGHTS AND OPERATIONS Income from operations during the financial year ended 31st March 2016 was at INR 16210.59 Lacs as against INR 18532.69 Lacs representing a decrease of approximately 12.5% over the previous year. Profit after Tax for the year under review amounted to INR 1416.76 Lacs as against INR 2539.74 Lacs in the previous year representing a decrease of 44.21%. The decrease in sales and profit during the year under review is basically due to the overall draught situation in the country resulting in excessive sales return and reduction in margins to the company. However, the monsoon forecast for the coming year is good and your company is also geared up with products to operationally gain from the same. RESEARCH & DEVELOPMENT & NEW PRODUCTS Your Company remains committed towards strengthening its Research & Development programs. Inspite of rather difficult conditions existing in seed business, your company has allocated significant resources to provide further impetus to the research initiatives. The competitive scenario in hybrid seeds industry keeps intensifying over time. In order to enhance competitive ability, your Company has made persistent efforts to offer high yielding hybrid varieties of seeds which carry built-in added value through seed embedded technologies/genes, thereby providing durable protection to the Indian farmers against specific diseases, pests and vagaries of nature. The modern Indian farmers prefer seeds of high potential yield with multiple layers of value addition. Your Company has over the years reached out to farmers in the rain-fed & relatively unreached regions across the Country and delivered quality seeds. NBIL is pursuing both Genetic Engineering Technologies as well as Molecular-Aided Selection systems to augment its crop breeding and product development programs. Cotton: NBIL possibly is the sole company in India which offers a choice between Bt-Cotton seed technologies. Your Company provides a wide range of Bt-Cotton hybrids to suit the farmer requirements across various Cotton growing agro-climatic ecologies in India. NBIL has incorporated the exclusive Fusion-Bt technology of the Chinese Academy of Sciences (used predominantly all over China and exclusively licensed to Nath Bio-Genes). In addition, your company has also started offering BG-II version. The seed industry is intensely research-oriented, where it is typical for a new trait to be developed over a number of years. Your Company's proficiency in the business depends on its ability to constantly hone in on commercially viable crop characteristics that will address present challenges while delivering substantive gains in yields and farm income. This is also the root of research philosophy of NBIL. Being an important member in the crop-hierarchy of India, Cotton has seen extensive work by your Company's team of scientists. Attention is focused on developing/imparting those characteristics that are generally absent from the market at present. These cover resistances / tolerance to Bollworms and major Sucking Pests, which have emerged as potent threats in recent times. Additionally, given the variability of the monsoon and the lack of plentiful access to water resources in the country, most crops are found suffering from a variety of agro-climatic stress. It is imperative that the hybrid incorporate a certain degree of sustainability to dehydration (drought) and heat stress. Your company has been engaged over the years to enhance useful traits against such known challenges. Some of the qualities that have been incorporated in our products include: - • Big boll size mitigates need for intensive labor involvement/promotes easy picking. • Re-flushing ability - in those cases where the farmer would prefer re-flushing (fresh crop of bolls formation) rather than take up a new Rabi crop. • Re-Structure the plant-type that suits high-density planting, synchronous boll bursting and, thereby, more suited to machine harvesting. Such traits and characteristics have been assimilated into NBC-101 (re-flushing), NBC-10 and NBC-102 (drought tolerance), which are NBIL's frontline hybrids in Cotton. It is crucial to nurture farmer trust by way of consistent delivery of promised performance. In a competitive landscape, products that provide an edge have earned a distinct share and farmer following. Your Company maintains a deep pipeline of products, each catering to specific requirements. The leading candidates such as NBC-10, NBC-102 and NBC-1022 have all demonstrated superiority in multi-location and large scale trials. Maize: Within Maize, the emphasis of your Company has been on full-season maturity hybrids, which includes both the single cross/modified single cross segments. Consistent performance in the field and better yields are important attributes in this crop. The acceptability and success of Singhum (NMH-02) and NMH-1008 has been particularly encouraging in the target markets of Bihar, Maharashtra, A.P. and even Karnataka. Similar line of hybrids in Maize, with responsiveness to high input management, tolerance to major foliar diseases and wider adaptability, have been introduced across key growing regions with very good degree of success. NMH-1605, NMH-1591 and even NMH-02 are the recent examples of Success Stories of NBIL Maize hybrids. Bajra: Your Company's line of products for Bajra is second to none, with a line-up of products suitable for almost all Bajra Segments of Rajasthan. With consistent performance and commercially desirable traits NBIL's Big-B Bajra hybrid has carved for itself a sizeable share in the marketplace. NBH-1717, another example of Bajra hybrid, is getting wider acceptance. Your company has launched new generation hybrids to replace / complement the existing ones, such as: NBBH-20, NBBH-21 and more recently NBBH-26, in the Tall and Medium Segments. NBBH- 21 and NBBH-22 are especially suitable for the Summer Segment in Gujrat. With the introduction of NBBH-5151 for Maharashtra (alongside NBBH-1717), NBIL has covered almost the entire Bajra Market of the country. Paddy: Paddy is the third major crop where your Company has undertaken extensive work towards introducing hybrids domestically. Gazhab and Supper Duper are the two most promising and wide adaptability products, poised to make it very big. Vegetables: Your company's new hybrids in Okra namely Amrapali, Anokha and Amoli have become popular in a short span of time. Company's new Tomato Varieties NTH-1831 and NTH-1894 are unique hybrids incorporating resistance to Tomato leaf curl viruses TY1, TY2 and TY3. Your company has successfully introduced new hybrids in Bitter Gourd and Chilies. It is your company's endeavor to build a formidable portfolio of vegetable seeds to constitute at least 20% of company's revenues. Plant Nutrient Supplement: Win-Chi-Win, the versatile plant nutrition supplement, continues to be a star performer. It is a unique organic foliar fertilizer having unique composition of NPK, Manganese, Zinc, large number of amino acids, folic acid and poly saccharides. Win-Chi-Win can be effectively used for improving yield, quality of produce and offering resistance to biotic and abiotic traces. Your company is making vigorous efforts to enlarge offering of plant nutrition supplements. To summarize, NBIL would continue to support the farming community by offering high quality seeds which would result in high yields. This would be backed by your company's constant focus on Research and Development. INTERNATIONAL COLLABORATIONS: Nath Bio-Genes, jointly with its sister concern Global Transgenes Ltd., had signed agreement for R&D collaboration and commercialization thereof, of Fusion-Bt. Cotton technology in Philippines. Due processes of trans-boundary regulations, in accordance to the provisions of the Cartgena Protocol, have been followed strictly for transfer of Fusion-Bt. Embedded cotton seeds. PhilFIDA (Fiber Crops Development Authority, under Govt of the Philippines) is directly coordinating with NBIL-GTL of India, in view of our track record and scientific competence in pursuing the Fusion-Bt Technology approval process in India. MANAGEMENT DISCUSSION & ANALYSIS A detailed report on the management discussion and analysis is provided as a separate section in this Annual Report. CORPORATE GOVERNANCE The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally. The Report on Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Companies Act, 2013 and rules made thereunder is enclosed. The Requisite Certificate from the Auditors of the Company, Gautam N Associates, Chartered Accountants, Aurangabad conforming compliance to the conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed to this Report DIVIDEND Given the growth requirements of the business, the Directors have not recommended any dividend for the financial year 2015-16. DEPOSITS Your company has not accepted any fixed deposits during the year under review. RISK MANAGEMENT The company has a Risk Management Committee which has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company's enterprise wide risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. DIRECTORS & KEY MANAGERIAL PERSON Mrs. Sweta Kagliwal, Director retires by rotation and being eligible offers herself for re-appointment. Pursuant to Clause 49 of the Listing Agreement, Details of Directors retiring by rotation is provided as part of the Notice of the ensuing Annual General Meeting. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors. AUDITORS At the Annual General Meeting held on July 5th 2014, M/s Gautam N Associates, Chartered Accountants, Aurangabad were appointed as the Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2018. In terms of the first proviso to Section 139 of the Companies Act 2013, the appointment of the Auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s Gautam N Associates, Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, The Company has received a certificate from the Auditors to the effect that if they are re-appointed, it would be in accordance with the provisions of section 141 of the Companies Act 2013. AUDITORS' REPORT The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. SECRETARIAL AUDITOR M/s Neha P Agrawal, Practising Company Secretary has been appointed as the secretarial Auditor of the Company for the financial year 2016-17 as required under Section 204 of the Companies Act 2013 and Rules thereunder. The Secretarial Audit Report for the financial year ended March 31, 2016 is annexed herewith marked as Annexure IV to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. COMMITTEES OF THE BOARD Currently the Board has six committees: The Audit Committee, the stakeholders' relationship committee, the nomination & remuneration committee, the corporate social responsibility committee, risk Management Committee, & whistle blower committee. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to Note 13, 14, 15 and 37 to the standalone financial statement). DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the provisions of Section 134 (3)(c) of the Companies Act, 2013, the Board of Directors hereby confirms that, i. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures. ii. It has in the selection of the accounting policies, consulted the Statutory Auditors and has applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the company as at 31st March, 2016 and of the profits of the company for that period. iii. It has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities, to the best of its knowledge and ability. There are however, inherent limitations, which should be recognized while relying on any system of internal control and records. iv. It has prepared the annual accounts on a going concern basis. v. The Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operation efficiently. vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure V to this Report. EXTRACT OF ANNUAL RETURN Extract of Annual Return of the Company is annexed herewith as Annexure VI to this Report. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to INSURANCE All the insurable interest of the company, including Inventories, Buildings, Machinery etc., is adequately insured. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All related party transactions that were entered during the financial year were in the ordinary course of the business of the Bank and were on arm's length basis. There were no materially significant related party transactions entered by the Bank with Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interest of the Bank. All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval for normal banking transactions is also obtained from the Audit Committee for the related party transactions which are of repetitive nature as well as for the normal banking transactions which cannot be foreseen and accordingly the required disclosures are made to the Committee on quarterly basis in terms of the approval of the Committee. The policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Bank and the link for the same is <https://www.yesbank.in/> investor-relations/corporate governance.html. Since all related party transactions entered into by the Bank were in the ordinary course of business and were on an arm's length basis, form AOC-2 is not applicable to the Bank. ACKNOWLEDGEMENT The employees of NATH BIOGENES (INDIA) LIMITED continue to work with great dedication and commitment. The Board desires to place on record its appreciation to all the employees of the company during the year under review. The Board also acknowledges the support given by Banks, Financial Institutions and Government Authorities. For and on behalf of the Board of Directors Nandkishor Kagliwal Chairman DIN: 01691691 Satish Kagliwal Managing Director DIN: 00119601 30th May 2016 Registered Office: Nath House, Nath Road, Aurangabad-431005 |