Board's Report

KARNATAKA CASHEW DEVELOPMENT CORPORATION LIMITED
(A Government of Karnataka undertaking)

BOARD’S REPORT

To:
The Shareholders,

Gentlemen,

           Your directors have great pleasure in presenting the 38thAnnual Report together with Financial Statements of the Company for the year ending 31-03-2016 and Auditors report with replies thereto including the Certificate issued by the Comptroller and Auditor General of India as per the Companies Act, 2013.

I. FINANCIAL RESULTS, REVIEW OF OPERATIONS AND FUTURE PLANS:
A. Financial Results:

           During the financial year ending 31st March 2016, the Company has earned a net profit ofRs.87.85lakhs. The accumulated profit of the Company is  Rs.159.21 lakhs after all adjustments.

 

Standalone

Particulars

2015-16

2014–15

Revenue from operations

5,22,73,885.00

5,35,55,251.00

Other Income

8,64,95,039.00

3,17,95,222.00

Total income

13,87,68924.00

8,53,50,473.00

Expenses

7,60,88,721.00

7,10,79,629.00

Profit (Loss) before Depreciation

6,26,80,203.00

1,42,70,844.00

Less: Depreciation

43,77,584.00

43,40,971.00

Profit (Loss) before Tax

5,83,02,619.00

99,29,874.00

Less/add: Prior period expenses/income

4,21,127.00

6,64,323.00

Less: Provision for Taxes

7,78,569.00

4,80,959.00

Profit (Loss) after taxation

5,79,45,177.00

87,84,592.00

Earnings Per Share: Basic
                             :Diluted

763
0

116
0

B. Working or operations:

  1. The Company continues to be in the business of development of cashew through raising new cashew plantations of high yielding varieties in the forest lands under the control of the Corporation through lease and equity and maintenance of its older cashew plantations and also by promoting cashew planting activities on farm land by raising and also procuring high yielding variety of grafted cashew seedlings to prospective cashew growing farmers.
  2. During the year, the Company has maintained 3714 ha. of cashew plantations raised under IDA - World Bank aided Cashew Project raised from the year 1981 to 1987.  Out of 3714 ha. of cashew plantations raised under the IDA scheme, 2860.78 ha. are on reserve forest lands leased to the Company by Karnataka ForestDepartment and the remaining are on the forest lands transferred to the Company by government of Karnataka as  part of equity. 
       In the same period, the Company has maintained 12,724.43 ha. of older cashew plantations transferred by the Government of Karnataka during the year 1979 & 1993 to the Company towards equity and 12,908.19 ha. of cashew plantations transferred by the Government of Karnataka in 1993, on lease.  Thus the total holding of the Company as on 31-03-2015 is 25,632.62 ha. These estates are under the administrative control of Divisional Managers located in the divisional headquarters at Kumta, Kundapur, Puttur and Moodabidri working under the administrative control of the head office located at Mangalore.  An extent of 5937.33 ha. of cashew plantations covered in the government order dtd.05-04-1993 is yet to be transferred to the KCDC by the Forest Department.
  3. The Company has planted 12,130.80 ha. with high yielding varieties of cashew in the open areas existing in the older cashew plantations starting from 1992-93 to 2015-16 and the High Yielding Variety (HYV)cashew grafts were planted and maintained during the period. The Government of India has released Rs.126.00 lakhs as Central Assistance for raising and maintenance of HYV cashew plantations during the year 2015-16. Apart from the grant received towards raising and maintenance of cashew plantations, a sum of Rs.1,24,00,000/- received as grant from Central Government under the centrally sponsored scheme through Directorate of Cashew and Cocoa Development, Cochin towards rejuvenation of existing older cashew plantations. The entire amount was spent on rejuvenation work during the year 2015-16.
  4. During the year 2015-16, the rights of collection of cashew usufructs from all the 25,632.62 hectares of cashew plantations of KCDC Ltd. situated in Puttur, Kundapur, Kumta and Moodabidri were disposed through e-auction and tender-cum-auction procedure. Total revenue generated from sale of right to collect cashew usufructs for the year is `522.74 lakhs.

C. Future Plans:

           The areas with KCDC has old and senile cashew trees yielding very low crop. Such of the plantations need to be replaced with High Yielding Varieties of cashew grafts. So far the Company has raised 3714 ha. of cashew plantations with genetically superior seeds collected from identified plus trees between the years 1981-1987 and 12,130.80 ha. of cashew plantation with HYV grafts between the years 1992-93 to 2015-16. The existing HYV clonal orchards with the Corporation are also need to be maintained intensively for enhancing yields. The Company will take up fresh planting of cashew grafts in 350 hectares during 2016 rains with the grants from DCCD.

            However, KCDC needs financial assistance, to sustain and increase cashew crop from HYV plantations.

II. DIVIDEND:

No Dividend was declared for the current financial year due to meager profit.

III. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND:

The provisions of Section 125(2) of the Companies Act, 2013 do not apply as there was no dividend declared and paid last year.

IV. FINANCE:
           During the year the Company continued to operate all its major banking transactions with the State Bank of India to get the maximum benefit of the funds available with Company.

V. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

No material changes and commitments affecting the financial position of the Company occurred between the ends of the financial year to which this financial statement relate on the date of this report.

VI. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

As the Company was mainly engaged in development and maintenance of cashew plantations and other related activities, the information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is NIL.

As regards conservation of energy and technology absorption, the Company continues to work through computers in all the Divisions and Head office and the offices are automated for extensive use of information technology in its operations for administrative speed and efficiency. Further, as a measure of better use of information technology in its operations, the Company adopted the e-auction system through e-platform for sale of cashew usufructs, which is the major source of revenue to the Company.

VII. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

Not applicable to the company during the year under review.

VIII. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

The particulars of Loans, guarantees or investments made under Section 186 are NIL.

IX. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

The particulars of Contracts or Arrangements made with related parties made pursuant to Section 188 are furnished as NIL.

X. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS:

The replies on the observations made by the Statutory Auditors and the Comptroller and Auditor General of India are annexed which may be read as part of this report.

XI. REVIEW OF ACCOUNTS:
           The comments on the accounts for the financial year ending 31-3-2016 made by the Principal Accountant General, nominee of the Comptroller & Auditor General of India are annexed which may be received as part of this report.

XII. COMPANY’S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES:

The provisions of Section 178(1) relating to constitution of Nomination and Remuneration Committee are not applicable to the Company.

XIII. ANNUAL RETURN:

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure – D and is attached to this Report.

XIV. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:

The Company had fiveBoard meetings during the financial year under review on 27-06-2015, 10-08-2015, 26-09-2015, 05-01-2016 and     28-03-2016.

XV. DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:—

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c)  The directors had 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;

(d) The directors had prepared the annual accounts on a going concern basis; and

(e) 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.

XVI. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The details of financial performance of Subsidiary/ Joint Venture/ Associate Company are NIL.

XVII. DEPOSITS:

The Company has neither accepted nor renewed any deposits during the year under review.

XVIII. BOARD OF DIRECTORS:

Since the date of last report i.e. from 28-09-2015, the following changes have taken place regarding the constitution of the Board.

Government of Karnataka vide letter No.FEE84 FPC 2015 dated 28-09-2015 has nominated Sri.Vijay Kumar Gogi, as Director of KCDC Ltd Mangalore. Government of Karnataka vide letter No.FEE22 FPC 2016 dated 26-04-2016 has nominated Sri.Maskeri M K Nayak, Sri. Jagadeeshkaila and Sri. Chandu L as Directors on the Board of KCDC Ltd., in the place of Sri. Vijay Kumar Gogi, IFS, Sri. VinayLuthra, IFS, and Sri. A K Singh, IFS.
            The Directors representing the Government of Karnataka and Government of India as on the date of this report are as follows:

Directors representing the Government of Karnataka :

  1. Sri. Shambhu N Gowda, Chairman.
  2. Sri. Nagaraja, IFS, Managing Director.
  3. Sri. Maskeri M K Nayak, Director.
  4. Sri. Jagadeesh Kaila, Director.
  5. Sri. Chandu L, Director.

Directors representing Government of India :

  1. Sri. Venkatesh N. Hubballi, Director.
  2. Dr. M. Tamil Selvan, Director.
  3. Sri. Avinash T.J., Director.
  4. Sri. Prakash Kalbavi, Director.

XIX. DECLARATION OF INDEPENDENT DIRECTORS:

The provisions of Section 149 pertaining to the appointment of Independent Directors do not apply to our Company.

XX. STATUTORY AUDITORS:

           Sri. Shiva Kumar, Chartered Accountant, Mangalore, was appointed for conducting internal audit of accounts for the year 2015-16 on a total remuneration of Rs.12,500/- plus out of pocket expenses to comply with Companies (Auditor’s Report) order.

            M/s. M. Rajesh Kini& Co, Chartered Accountants, Mangalore, were appointed as Statutory Auditors for the audit of accounts for the financial year ended 31-3-2016 by the Comptroller and Auditor General of India.

            The power of appointment of Statutory Auditors for Government Companies like ours for the financial year ended 31-3-2017 vests with Comptroller and Auditor General of India in accordance with the provisions of the Companies Act, 2013.

XXI. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM:

The provisions of Section 177 of the Companies Act, 2013 read with Rule 6 and 7 of the Companies (Meetings of the Board and its Powers) Rules, 2013 is not applicable to the Company.

XXII. SHARES:

a. BUY BACK OF SECURITIES:

The Company has not bought back any of its securities during the year under review.

b. SWEAT EQUITY:

The Company has not issued any Sweat Equity Shares during the year under review.

c.BONUS SHARES:

No Bonus Shares were issued during the year under review.

d. EMPLOYEES STOCK OPTION PLAN:

The Company has not provided any Stock Option Scheme to the employees.

The employer and employee relationships were cordial during the year under report.

XXIII. FINANCIAL BENEFIT TO THE GOVERNMENT OF KARNATAKA:

           During the year, the Company has paid Value Added Tax of Rs.28,77,170/-/- and an amount of Rs.1,03,90,662/-towards Forest Development Tax to the Government of Karnataka.

XXIV. IMPLEMENTATION OF RIGHT TO INFORMATION ACT:

            The Company successfully implemented the right to information Act as per the guidelines issued by the Government.

XXV. ACKNOWLEDGEMENT:

           The Directors would like to record their appreciation of the continuous and unstinted support accorded to the Company by the Government of Karnataka, Government of India, Directorate of Cashewnut & Cocoa Development, Kochi, Directorate of Cashew Research, Puttur and the Karnataka Forest Department and all others who were associated with the activities of the Corporation. The Company also thanks the Internal Auditors, the Statutory Auditors, the Principal Accountant General (nominee of the Comptroller and Auditor General of India) and the various experts and consultants who have extended their services and co-operation.

            The Directors also wish to express the appreciation of the loyalty and co-operation of the officers and employees of this Corporation who have been rendering yeoman service to the organization.

 

 FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

                                         Sd/-                                                                                                                       Sd/-
                                   (NAGARAJA)                                                                                            (PRAKASH KALBAVI)
                        MANAGING DIRECTOR                                                                                                    DIRECTOR
                                   
Place: Mangalore

                                                                          ANNEXURE – A

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

A) Conservation of energy: Not Applicable

(B) Technology absorption: NIL

(C) Foreign exchange earnings and Outgo:

Foreign Exchange earned:       Rs. NIL
Foreign Exchange Expended:  Rs. NIL

                                                                          ANNEXURE –B

The particulars of Loans, guarantees or investments made under Section 186 :
                                                                          Not applicable


                                                                          ANNEXURE –C

                                                                          Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies
(Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto

  1. Details of contracts or arrangements or transactions not at Arm’s length basis.

    SL. No.

    Particulars

    Details

    a)       a

    Name (s) of the related party & nature of relationship

    NA

    b)      b

    Nature of contracts/ arrangements/ transaction

    NA

    c)       c

    Duration of the contracts/ arrangements/ transaction

    NA

    d)      d

    Salient terms of the contracts or arrangements or transaction including the value, if any

    NA

    e)       e

    Justification for entering into such contracts or arrangements or transactions’

    NA

    f)        f

    Date of approval by the Board

    NA

    g)       g

    Amount paid as advances, if any

    NA

    h)      h

    Date on which the special resolution was passed in General meeting as required under first proviso to section 188

    NA

  2. Details of contracts or arrangements or transactions at Armís length basis.

    SL. No.

    Particulars

    Details

    a)       a

    Name (s) of the related party & nature of relationship

    NIL

    b)      b

    Nature of contracts/ arrangements/
    transaction

    NIL

    c)       c

    Duration of the contracts/ arrangements/ transaction

    NIL

    d)      d

    Salient terms of the contracts or arrangements or transaction including the value, if any

    NIL

    e)       e

    Date of approval by the Board

    NA

    f)        f

    Amount paid as advances, if any

    NIL

ANNEXURE –D

FORM NO. MGT 9
EXTRACT OF ANNUAL RETURN

As on financial year ended on 31.03.2016

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014.

I REGISTRATION & OTHER DETAILS:

  1.  

CIN

U01133KA1978SGC003280

  1.  

Registration Date

 14.02.1978

  1.  

Name of the Company

KARNATAKA CASHEW DEVELOPMENT CORPORATION LIMITED

  1.  

Category/Sub-category of the Company

Government Company

  1.  

Address of the Registered office  & contact details

23,24 ABBAKKANAGAR, IST MAIN
KOTTARA,
MANGALORE,KARNATAKA
INDIA - 575006

  1.  

Whether listed company

No

  1.  

Name, Address & contact details of the Registrar & Transfer Agent, if any.

N.A

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

(All the business activities contributing 10 % or more of the total turnover of the company shall be stated)

S. No.

Name and Description of main products / services

NIC Code of the Product/service

%  to total turnover of the company

1

Development and maintenance of cashew plantations

01133

100 

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE   COMPANIES:

All the business activities contributing 10% or more of the total turnover of the company shall be stated:-nil.

VI. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity):

      Category-wise Share Holding

Category of Shareholders

No. of Shares held at the beginning of the year [As on 31-March-2015]

No. of Shares held at the end of the year[As on 31-March-2016]

% Change
during
the year   

 

Demat

Physical

Total

% of Total Shares

Demat

Physical

Total

% of Total Shares

A. Promoter s

 

 

 

 

 

 

 

 

 

(1) Indian

 

 

 

 

 

 

 

 

 

a) Individual/ HUF

NIL

0

0

0

NIL

0

0

0

0

b) Central Govt

NIL

4400

4400

05.80

NIL

4400

4400

05.80

0

c) State Govt(s)

NIL

71503

71503

94.20

NIL

71503

71503

94.20

0

d) Bodies Corp.

NIL

0

0

0

NIL

0

0

0

0

e) Banks / FI

NIL

0

0

0

NIL

0

0

0

0

f) Any other

NIL

0

0

0

NIL

0

0

0

0

Total shareholding of Promoter (A)

NIL

75903

75903

100

NIL

75905

75903

100

0

 

 

 

 

 

 

 

 

 

 

B. Public Shareholding

NIL

-

-

-

NIL

-

-

-

-

Sub-total (B)(1):-

0

0

0

0

0

0

0

0

0

 

 

 

 

 

 

 

 

 

 

2. Non-Institutions

NIL

-

-

-

NIL

-

-

-

-

Sub-total (B)(2):-

0

0

0

0

0

0

0

0

0

Total Public Shareholding (B)=(B)(1)+ (B)(2)

0

0

0

0

0

0

0

0

0

C. Shares held by Custodian for GDRs & ADRs

0

0

0

0

0

0

0

0

0

Grand Total (A+B+C)

NIL

75903

75903

100

NIL

75905

75903

100

0

B) Shareholding of Promoter-

SN

Shareholder’s Name

Shareholding at the beginning of the year

Shareholding at the end of the year

% change in share
holding during the year

 

 

No. of Shares

% of total Shares of the company

% of Shares Pledged / encumbered to total shares

No. of Shares

% of total Shares of the company

%of Shares Pledged / encumbered to total shares

1

Government of India

4400

05.80%

0

4400

05.80%

0

-

2

 Government of Karnataka

71503

94.20%

0

71503

94.20%

0

-

3

75903

100.00

0

75903

100.00

0

-

C) Change in Promoters’ Shareholding (please specify, if there is no change)- No change in share holding

SN

Particulars

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of shares

% of total
shares of the
company

No. of shares

% of total
shares of the
company

 

 

 

 

 

 

 

At the beginning of the year

-

-

-

-

 

Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer / bonus/ sweat equity etc.):

-

-

-

-

 

At the end of the year

-

-

-

-

D) Shareholding Pattern of top ten Shareholders:
                 (Other than Directors, Promoters and Holders of GDRs and ADRs):  NIL

      E)Shareholding of Directors and Key Managerial Personnel: NIL

V)INDEBTEDNESS:Indebtedness of the Company including interest             
outstanding/accrued but not due for payment. NIL

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL  

       PERSONNEL - NIL - As Government Companies are exempted from the provisions of Section 197 of the Companies Act, 2013 as per the Notification no. GSR 463 dated 5th June 2015 vide sl. No.28.

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

NOT APPLICABLE

 

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

                                         Sd/-                                                                                                                       Sd/-
                                   (NAGARAJA)                                                                                            (PRAKASH KALBAVI)
                        MANAGING DIRECTOR                                                                                                    DIRECTOR
                                   
Place: Mangalore

ANNEXURE -E
Form AOC-I
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures

Part “A”: Subsidiaries
Not applicable
(Information in respect of each subsidiary to be presented with amounts in Rs…………….. )

Part “B”: Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

Not applicable

Note: This Form is to be certified in the same manner in which the Balance Sheet is to be certified.

 

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

                                         Sd/-                                                                                                                       Sd/-
                                   (NAGARAJA)                                                                                            (PRAKASH KALBAVI)
                        MANAGING DIRECTOR                                                                                                    DIRECTOR
                                   
Place: Mangalore