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Venkys (India) Ltd

BSE: 523261 | NSE: VENKEYS ISIN: INE398A01010
Market Cap: [Rs.Cr.] 438.79 Face Value: [Rs.] 10
Industry: Miscellaneous

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Management Discussions

1. Industry Structure and Development :

The world economy continues to grow at a moderate rate and recent data reflectsmarginal pick-up in growth in some advanced economies. On the domestic front, the Indianeconomy is now showing signs of transformation with expectations of policy initiativesbeing implemented. Various policy initiatives taken by the Government are expected toresult in a significant growth in GDP. Indian GDP growth rate has been 7.3% for the year2014-15 as compared to 6.9% in the previous year. Given this backdrop the poultry industrycontinued to grow at satisfactory rates.

The poultry industry is expected to maintain its growth rates in the coming years aswell. Presently, the poultry industry is a Rs.95,000 crore industry that provides directand indirect employment to 5.0 million people and also supports the economy of over 2crore agricultural farmers, especially the maize and soya grower, dependent on thisindustry. 75% to 80% of the cost of production in the poultry industry consists of feedingredients, like maize and soya. With an annual production of 67,000 million eggs, Indiaranks second in the world in egg production. The broiler production is estimated at 4million tons of chicken meat and India ranks 3rd in the world.

2. Opportunities, Threats, Risks and Concerns:

The vast gap between our present per capita consumption (64 eggs and 3.5 kg. of meat)and National Institute of Nutrition (NIN) recommended level (180 eggs and 11 kg of meat)offers an excellent opportunity for the growth of poultry industry at least for the nexttwo decades. Factors like increasing disposable income and rapid urbanization are expectedto contribute to the growth in demand for poultry products.

However, lack of adequate cold storage facilities at key locations and retailinfrastructure are the main reasons for slower than anticipated growth of the processingsegment of poultry industry. Higher volatile behaviour of feed ingredients prices is alsoone of the concerns of the poultry industry.

3. Segmentwise Performance:

a. Poultry and Poultry Products

The Company’s major business segment is poultry and poultry products whichconsists of production and sale of day old broiler and layer chicks, specific pathogenfree eggs, processed chicken products and poultry feed. In 2014-15 this segment’sturnover was Rs. 99,262 lacs as compared to Rs.1,00,172 lacs in the last year. The profitbefore tax and interest of this segment was Rs.7,149 lacs as compared to Rs.2,822 lacs inthe previous year.

b. Animal Health Products

The Company has its animal health products manufacturing facility at Pune. Thissegment’s sales turnover was Rs.14,160 lacs as compared to Rs.12,324 lacs. Profitbefore tax and interest was Rs. 1,986 lacs as against Rs.1,679 lacs in the last year.

c. Oilseed

This segment registered a sales turnover of Rs. 63,364 lacs as compared to Rs. 65,255lacs last year. Profit before tax and interest was Rs. 1,426 lacs as against Rs. 2,968lacs in the previous year.

4. Outlook

The outlook for the year 2015-16 is expected to be better as compared to the year ended31st March, 2015.

5. Internal Control Systems and their adequacy

The internal control system is designed to ensure that all the financial and otherrecords are reliable for preparing financial statements and for maintaining accountabilityof the assets. The Company has a proper and adequate system of internal controls to ensurethat all assets are safeguarded and protected against loss from unauthorised use ordisposition and that transactions are authorised, recorded and reported correctly.

Commensurate with the size of operation, your Company has Internal Audit departmentwhich continuously reviews the internal control system by an exclusive programme ofInternal Audit. The significant findings are then discussed by the Audit Committee ofDirectors and corrective measures are initiated. The Audit Committee also monitors theimplementation of recommendations made by it.

6. Discussion on Financial Performance with respect to Operational Performance:

For the year ended 31st March, 2015, the Company’s sales turnover wasat Rs. 1,73,081 lacs as against Rs. 1,73,612 lacs in the previous year. The profit beforetax stood at Rs. 2,772 lacs as compared to Rs. 4,517 lacs in the previous year. During theyear the cost of raw material like maize and soya de-oiled cake was on higher side andrealizations from the sale of grown up broiler birds were on lower side.

The long term borrowings of the Company during the year increased by about 6% from Rs.23,174 lacs to Rs. 24,612 Lacs. These funds were utilized for the expansion plans as wellas for general corporate purposes of the Company. The short term borrowings of the Companyduring the year were increased by about 32% from Rs. 35,599 lacs to Rs. 46,940 Lacs. Shortterm borrowings are being utilized for meeting operational expenditure and working capitalrequirements. Interest cost of the Company has increased by 74% from Rs. 4,260 lacs to Rs.7,419 Lacs.

Keeping in view liquidity, returns and also safety, the Company has invested certainfunds in bank deposit and debt/liquid schemes of mutual funds.

7. Material Development in Human Resources/ Industrial Relations front,including number of people employed:

In line with VH Group’s corporate philosophy, the Human Resource is considered asthe most valuable resource in the Company. The focus is on developing a performanceculture with high standards of efficiency and innovation. Employee relations at all levelscontinue to remain cordial. As on 31st March, 2015 the Company has 5,288employees.


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Key Information

Key Executives:

Anuradha J Desai , Chairperson

B Venkatesh Rao , Vice Chairman

B Balaji Rao , Managing Director

Jitendra M Desai , Director

Company Head Office / Quarters:

Venkateshwara House,
S No 114/A/2 Pune-Sinhagad Rd,
Phone : Maharashtra-91-020-24251530-41 / Maharashtra-
Fax : Maharashtra-91-020-24251077/24251060 / Maharashtra-
E-mail : corp.shares@venkys.com
Web : http://www.venkys.com


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E-2/3 Saki Vihar Rd,Ansa Indl Estate,Saki Naka Andheri-E,Mumbai - 400 072

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