CFO's exit not related to SEBI's forensic audit: Kaveri Seed

The exit of Kaveri Seed's chief financial officer is not in any way connected to an ongoing forensic audit of the company by the Securities and Exchange Board of India (SEBI), the company's Wholetime Director Mithun Chand told CNBC-TV18.

On the government's proposed move to cut cotton seed prices, Chand says, although margins may be hit in the short term, it will help bring price uniformity in the longer run and curb royalty disputes.

The company reported an operational loss in the fourth quarter on Tuesday. It must, however, be noted that it earns 95 percent of its revenue in the first three quarters of the financial year, of which almost 70-75 percent is done in the first quarter itself. Therefore, the fourth quarter numbers are relatively inconsequential.Below is the verbatim transcript of C Mithun Chand’s interview with Anuj Singhal and Ekta Batra on CNBC-TV18.Ekta: First before we get to your numbers wanted to get an idea about the royalties. We understand that you have provided around Rs 38 crore for FY16 in terms of your total royalty payment versus a payable amount of around Rs 103.5 crore. Can you just explain to us about the deficit of around Rs 60 crore and where you would be accounting that? A: As we have clearly mentioned in the note, as we have provided only Rs 38 crore against Rs 103 crore, the provision is made on the government notifications. Usually in cotton seeds government releases seed notification which contains the seed price and the royalty. So, we have considered those figures and we have made a provision based on the government notifications. Anuj: The two big issues that the market wants to know, one, why did your CFO resign and two what is the status of the SEBI audit? A: CFO has been in the company for last nine years and he got some other better option so he is moving to another company. Regarding SEBI, it may take some more time because it is a time consuming process and as a policy they don’t say how much time will they take to complete the audit. So, as we explained earlier, that is a routine activity as per SEBI is concerned for them and we are very much transparent being a listed company so that is not an issue and we think it is a normal course it will take. Anuj: CFO resigning had nothing to do with what is happening with the company and the issues that have cropped up? A: Nothing. If you see the SEBI audit was ordered somewhere six months back. So, there is nothing to do with it. It is a co-incidence that after the SEBI audit that has come into picture but nowhere related to that case.