The Board of Directors are pleased to present the 19th Annual Report of
the Company together with the Audited Statement of Accounts, Auditors''
Report and the report on business and operations of the Company for the
financial year ended 31st December 2012.
The financial highlights for the year under review are presented below:
(Rs. in Lacs)
Consolidated Stand Alone
Description 31-Dec-2012 31-Dec-2011 31-Dec-20 31-Dec-2011
Sales Including other
Income 107,299.46 95,214.92 12,946.75 17,044.22
interest, Tax &
Depreciation and 17,287.77 13,584.90 5013.54 7,315.10
adjustments 7,250.63 2,679.24 589.59 1,593.66
Exceptional Item (470.42) (238.24) (470.42) -
adjustments - (62.95) - -
Profit Before Tax 6,780.21 2,378.05 119.17 1,593.66
Profit / (Loss)
After Tax (PAT) 5,936.27 1,229.05 294.17 1,418.66
Add: Balance brought
previous Year 13,464.60 13,654.21 (2,780.57) (2,780.57)
Adjustment on account
of amalgamation of
subsidiary 143.47 - (179.02) -
Surplus Available for
Appropriations 19,544.34 14,883.26 (2,665.42) (1,361.91)
Proposed Final Dividend Nil Nil Nil Nil
Tax on Dividend Nil Nil Nil Nil
Transfer to General
Reserve Nil Nil Nil Nil
Transfer to Debenture
Redemption Reserve 294.17 1,418.66 294.17 1,418.66
to Balance Sheet 19,250.17 13,464.60 (2,959.59) (2,780.57)
Conversion rates as on 31st December, 2012:
For Balance Sheet items (Closing Rate) [For Profit & Loss Account
1 USD = Rs. 54.9950 Rs. 54.0500
1AUD = Rs. 57.0463 Rs. 55.5191
1 EURO = Rs. 72.5302 Rs. 70.6148
1THB = Rs. 1.7978 Rs. 1.7403
11DR = Rs. 0.00571 Rs. 0.00578
1BRL = Rs. 26.8596 Rs. 27.6617
We have seen an excellent growth of 21% in the International business
of the company during this year. We adopted a new business model in
India under which UPL has been given the rights to produce and sell our
seeds and in turn UPL shall make royalty payment to our Company as a
certain percentage on sale. This change has helped to smoothen the
operations and the results are encouraging.
Canola crop in Australia performed the best during this year riding on
the success of the varieties and the TT technology. Canola showed a
76% growth at the global level. Long reach varieties have gained share
in the wheat markets of Australia based on superior performance. Corn
seed production suffered due to bad weather in Thailand, adversely
affecting the availability in various markets. But still corn recorded
a good growth of 11% over the last year. The other crops performed
FUTURE OUTLOOK / PROSPECTS
The future outlook of this business looks very bright. In 2013, the
business environment is expected to be favorable in view of the high
commodity prices in corn, sorghum and oilseeds. Our International
business, particularly in Europe, SE Asia and Latin America is poised
for a big growth in 2013. Few of the investments which we have been
making in research and market development are expected to start paying
off from 2013 onwards. We have positioned ourselves for a good growth
by producing adequate amount of seed to meet the planned growth in
2013. During 2012, we have launched GM corn in Philippines and Brazil
which is expected to ramp up in 2013. However, all our plans are
subject to favorable weather in all our operating countries.
MODERNISATION / EXPANSION PROJECTS
We are in the process of modernizing our plants in Thailand and
Argentina. Because of the continuous growth in our business, the
capacities of our plants are being completely utilized in all the
countries. We are reviewing these capacities and will be taking actions
soon to upgrade all the facilities to suit the medium term business
We are also investing in various market development activities in
emerging markets like SE Asia and Africa. These investments have long
RESEARCH & DEVELOPMENT
We continue to invest 10% to 11% of our revenues in research activity.
This is essential to ensure a good future for the company. The
investments in long gestations projects like Nutrisun and Long reach
have started to show results in 2012. We have seen Nutrisun getting
its first big order in this year which will be executed in 2013. This
will make this project break even in 2013. Similarly Long reach
varieties have started gaining market share and are promising to make
it a profitable business very soon. We have invested in a SNP machine
in Argentina which should increase the speed and the precision of our
breeding activities with the use of SNP markers. We have invested more
in the breeding programmes in France and Brazil during this year.
DIVIDEND AND TRANSFER TO RESERVES
The Board of Directors do not recommend any Dividend for the Financial
Year ended 31st December, 2012 in view of inadequate Profits during the
said year. Owing to the said reason, it is not proposed to transfer any
amount to General Reserve Account.
Pursuant to the provisions of the Companies Act, 1956, the Company
shall create a debenture redemption reserve Account for redemption of
its debentures and adequate amounts shall be transferred to the said
Account, out of its profits every year, until such debentures are
In compliance with the aforesaid provisions, the Company has
transferred an amount of Rs. 294.17 lacs to the debenture redemption
reserve, being the available surplus profit for the year ended 31st
As on date, your Company has four direct subsidiaries: Advanta Seeds
Limited - India; Advanta Holdings B.V. - Netherlands; Advanta Seed
International - Mauritius; PT Advanta Seeds Indonesia - Indonesia and
eleven step-down subsidiaries: Advanta US Inc. - USA; Advanta
Netherlands Holdings B.V. - Netherlands; Advanta Finance B.V. -
Netherlands; Advanta International B.V. - Netherlands; Pacific Seeds
Holding (Thailand) Ltd - Thailand; Advanta Commercio De Sementas LTDA -
Brazil; Pacific Seeds Pty. Ltd. - Australia; Advanta Semillas, SAIC -
Argentina; Pacific Seeds (Thai) Ltd. - Thailand; Long Reach Plant
Breeders Management Pty. Ltd. - Australia; Advanta (B.V.I) Ltd.-
British Virgin Islands.
Pursuant to the provisions of Section 212 of the Companies Act, 1956,
your Company, being the Holding Company, is required to attach the
Directors'' Report, Balance Sheet, and Profit and Loss account and other
documents of its subsidiaries along with its Balance Sheet.
In this regard, it may be noted that pursuant to the directions issued
by the MCA, vide General Circular No.2/ 2011, Dt.8th February, 2011,
general exemption has been granted to the Companies from complying with
the provisions of Section 212 of the Companies Act, 1956 in respect of
their subsidiaries. This implies that your Company, being the Holding
Company need not attach the Balance Sheet, Profit and Loss account
etc., of its subsidiaries subject to compliance of certain conditions
attached with the said exemption.
In view of the compliance of said conditions, audited consolidated
financial statements for the year ended 31st December, 2012, prepared
in compliance with applicable Accounting Standards are attached
Further, your Company undertakes that the Annual Accounts of the
subsidiary Companies and the related detailed information will be made
available to its shareholders and to the shareholders of its subsidiary
companies seeking such information at any point of time. Further, the
Annual Accounts of the subsidiary Companies shall also be kept for
inspection by any shareholder at its head office and that of the
concerned subsidiary companies.
Further Statement as required under Section 212 in respect of
Subsidiaries is annexed to this Report.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard AS-21 on Consolidated
Financial Statements read with Accounting Standard AS-23 on Accounting
for Investment in Associates and with reference to Clause 32 of the
Listing Agreement, your Directors present the Audited Consolidated
Financial Statements in the Annual Report.
CASH FLOW ANALYSIS
The Cash Flow Statement for the year under reference in terms of Clause
32 of the Listing Agreement entered into by the Company with the Stock
Exchanges is annexed hereto.
The outstanding amount of Non-Convertible Debentures as on 31st
December 2012 is Rs. 162 crores comprising 1620 Non-Convertible
Debentures of Rs. 10,00,000 each.
ISSUE OF SHARES - ESOP
Consequent to the issue of 8,931 equity shares of Rs. 10 each to
employees upon exercise of options under Employees Stock Option and
Shares Plan-2006 of the Company, during the year under review, the
paid-up share capital of the Company increased from Rs. 1685.42 lacs
divided into 16,854,212 equity shares of Rs. 10/- each to Rs. 1686.31
lacs divided into 16,863,143 equity shares of Rs. 10 each.
The particulars of shares allotted during the FY ended 31st December,
2012 are as follows:
Allotment Name of the
Allotted No. of
Shares Date of Listing
27.02.2012 H. Sateesh Hegde 4028 27.03.2012 27.03.2012
07.05.2012 Suresh Atluri 504 13.07.2012 24.07.2012
10.08.2012 Dr. M. Narasimham 800 03.09.2012 31.08.2012
07.11.2012 Dr. Surinder K. Tikoo 1008
Dr. M. Narasimham 1000
V. Satyadev 908 29.11.2012 23.11.2012
FOREIGN CURRENCY CONVERTIBLE BONDS
In July 2011 the Company had issued USD 50,000,000 Floating Rate
Guaranteed Convertible Bonds due 2016 Convertible into Ordinary Shares
or Global Depository Shares representing Ordinary Shares of the
The said bonds are listed at Singapore Exchange Limited. If the
bondholder(s) opt for conversion, the equity capital of the Company
will increase by an amount of Rs. 7,94,44,210 comprising of 79,44,421
equity shares of Rs. 10 each.
During the year under review, the Company has not received any
conversion notice from the FCCB holders.
Further information, such as the total bonds issued, bonds converted,
expected number of shares to be allotted in respect of outstanding
FCCBs is given in detail in Corporate Governance Report.
In January 2013, the Company has redeemed all the outstanding 300 units
of Commercial Paper (CP) of face value of Rs. 5 lacs each aggregating
to Rs. 15 Crores which were issued in January 2012. Consequently, there
are no outstanding Commercial Paper as on date.
As the members are aware, the Company had filed Draft Letter of Offer
(DLOF) for issue of equity shares on rights basis aggregating to an
amount upto Rs. 200 Crores with SEBI on 30.03.2011.
We are glad to inform you that, the Company has received final
observations from SEBI vide its letter No. CFD/DIL-1/ SD/19128/2012
dated August 28, 2012.
Your management, in consultation with its Book Running Lead Managers,
will take a decision on the future course of action.
The Company has neither accepted nor renewed any deposits from public
within the meaning of Section 58A and 58AA of the Companies Act, 1956,
and the Companies (Acceptance of Deposits) Rules, 1975, during the year
Pursuant to the provisions of Section 256 of the Companies Act, 1956
and the Articles of Association of the Company Mr. Vikram R. Shroff and
Mr. Vinod Sethi, Directors of the Company retire by rotation at the
ensuing Annual General Meeting and being eligible, offer themselves for
A brief profile of the said Directors as required by Clause 49(IV)(G)
of the Listing Agreement is provided in the Notice, attached hereto.
The Board of Directors recommends the same for your approval in the
AMALGAMATION AND ARRANGEMENT
Your Board of Directors feel glad to inform you that the Hon''Ble High
Court of Andhra Pradesh, vide its order dated 09.10.2012 has sanctioned
the Scheme of Amalgamation and Arrangement between your Company and
it''s wholly owned subsidiary, Unicorn Seeds Private Limited and their
respective Shareholders and Creditors.
The said Scheme, which has come into effect from 23rd November 2012,
being the Effective Date has become operative from 01.04.2011, being
the Appointed Date.
AUDITORS AND AUDITORS REPORT
M/s. SR Batliboi and Associates LLP, Chartered Accountants, Statutory
Auditors of the Company retire at the conclusion of the ensuing AGM.
However, being eligible for re-appointment, they have offered
themselves for reappointment. As recommended by the Audit Committee,
the Board of Directors propose the appointment of M/s. S.R.Batliboi &
Associates LLP, Chartered Accountants as Statutory Auditors for the
financial year 2013.
The Statutory Auditors have confirmed that their appointment, if made,
will be in accordance with the provisions of Section 224(1B) of the
Companies Act, 1956.
Statutory Auditors of the Company, vide Para 9 of their Report on
Consolidated Financial Statements, have qualified their Report about
recognition of deferred tax assets with respect to the subsidiary
companies i.e. Pacific Seeds Holdings (Thailand) ltd., Long reach Plant
Breeders Management Pty. Ltd., PT Advanta Seeds Indonesia, Advanta
Comercio De Sementes LTDA., Pacific Seeds Pty Ltd., Advanta Holdings BV
and Advanta Semillas SAIC, stating that there is no virtual certainty
as required by Accounting Standard (AS) 22, ''Accounting for Taxes on
Income'' to indicate that it is probable that the said companies will
have sufficient taxable profits against which such deferred tax assets
can be utilized.
In this regard, your attention is requested to Note No.33 of Notes to
Consolidated Accounts on recognition of deferred taxes containing
management''s opinion that the said unused losses can be utilized.
Auditors of the Company, vide para 10 of their Report on Consolidated
Financial Statements have qualified their Report about the recognition
of MAT Credit entitlement in respect of Advanta Semillas SAIC,
Argentina, subsidiary company. Your attention is invited to Note No.
33 wherein the management explained its view that the said MAT credit
can be utilized.
Auditors of the Company, vide para 11 of their Report on Consolidated
Financial Statements have qualified their Report about consolidated
segment information. Your attention is invited to Note No.40 wherein
the management explained its view that providing the said information
would be prejudicial to the interest of the Group.
The members may note that by virtue of Order No. F.No. 52/26/CAB-2010,
dated 6th November 2012, issued by the Ministry of Corporate Affairs,
your Company has been generally directed to get its cost accounting
records in respect of FY commencing on 1st day of January 2013, audited
by a practicing Cost Accountant.
In view of the aforesaid, the Board of Directors have appointed M/s.
MPR & Associates, Cost Accountants, as Cost Auditor of the Company to
conduct the audit of cost records maintained by the Company for the
Financial Year ending 31st December, 2013.
DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information
and explanations obtained by them, your Directors make the following
statement in terms of Section 217 (2AA) of the Companies Act, 1956:
i. That in the preparation of accounts for the year ended December 31,
2012, the applicable accounting standards have been followed and that
no material departures have been made from the same.
ii. That 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 the affairs of the Company at the end of the financial year and of
the profit of the Company for that period.
iii. That proper and sufficient care has been taken for the maintenance
of the adequate accounting records in accordance with the provisions of
the Companies Act, 1956 for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
iv. That the Directors had prepared annual accounts for the year ended
31st December, 2012 on a going concern basis.
Quality first! True progress lies in enhancing the quality of life of
farmers and making their future better. In line with this thought, we
have reinforced our focus on quality - what it means to us and how we
can achieve higher quality in our processes, product development and
Advanta has striven for and successfully created a participatory
approach in its regional / country / location specific farming
practices by partnering with farmers / local communities and leveraging
on growing awareness levels of farmers on access to better inputs,
infrastructure and emerging agronomic / management practices for better
In Research, Marketing and Sales, we have been moving from strength to
strength in line with the strategies laid out on new Product
Development, Go to Market and Customer Satisfaction.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to the provisions of Clause 49 of the Listing Agreement, a
report on Management Discussion and Analysis is furnished as Annexure -
A to this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Particulars with respect to conservation of energy, technology
absorption, foreign exchange earnings and outgo pursuant to Section
217(1) (e) of the Companies Act, 1956 read with the Companies
(Disclosures of particulars in the report of Board of Directors) Rules,
1988 are provided in Annexure - B which forms part of this report.
The relationship with all employees and workers at all levels of the
Company remained very cordial throughout the year. Your Directors
place their appreciation for the contribution made by all the employees
of the Company.
PARTICULARS OF EMPLOYEES
Particulars of employees, as required under section 217(2A) of the
Companies Act, 1956 and the Companies (Particulars of Employees) Rules,
1975 as amended, forms part of this report. However in pursuance of
section 219(1)(b)(iv) of the Companies Act, 1956, this report is being
sent to all the shareholders of the company excluding the aforesaid
information and the said particulars are made available at the
registered office of the Company. Any shareholder interested in
obtaining copy of the same may write to the Company Secretary at the
registered office of the Company. None of the employees listed in the
said Annexure is related to any Director of the Company and all the
employments are contractual in nature.
EMPLOYEES STOCK OPTION PLAN (ESOP)
The Advanta India Limited Employees Stock Option and Shares Plan - 2006
(ESOPs) approved by the shareholders on 20th September, 2006 is in
force. In accordance with the said Plan, the Company reserved 1,68,000
Equity Shares to be issued to its employees and to the employees of its
subsidiaries on one to one basis at an exercise price of Rs. 285/-
being the market price as per the valuation report from a Chartered
Accountant on the date of grant. The options were granted with a
vesting period spread over 4 years and 6 months. Out of the total
options granted, vesting of such options is conditional upon the
employee''s tenor and upon the Company meeting annual performance
benchmarks based on parameters set by the Remuneration Committee.
The disclosures as required under Clause 12 & 19 of SEBI (Employees
Stock Option Scheme & Employees Stock Purchase Scheme) Guidelines, 1999
are enclosed as Annexure - C to this Report.
The Company is committed to achieve the highest standards of corporate
governance and it aspires to benchmark itself with best international
practices in this regard.
As required under Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section on Corporate Governance practices
followed by the Company together with a certificate from a Company
Secretary in practice confirming compliance is annexed as part of the
INSIDER TRADING REGULATIONS
Based on the requirements under SEBI (Prohibition of Insider Trading)
Regulations, 1992, as amended from time to time, the Company has
adopted Code of Conduct for prevention of Insider Trading and the same
is in force.
The Equity Shares of your Company continue to be listed on BSE Limited
(BSE) and National Stock Exchange of India Limited (NSE). There is no
default in payment of Annual listing fees.
DEMATERIALISATION OF SHARES
It may be noted that the entire paid up equity share capital of the
Company (except 2 shares) are held in dematerialized form as on 31st
Your Directors wish to express their grateful appreciation for the
valuable support and co-operation received from customers, investors,
lenders, business associates, banks, financial institutions, various
statutory authorities and society at large.
Your Directors also place on record their appreciation for the
contribution, commitment and dedication of the employees of the Company
and its subsidiaries at all levels.
For and on behalf of the Board of
Advanta India Limited
Place : Mumbai V.R. Kaundinya Vikram R Shroff
Date : 26.04.2013 Managing Director Director