Camson Bio Technologies

There are lot of grey areas in this story.Corporate governance is main issue here.On July 8,2011 HDFC Sec published a report with Buycall. sent a mail to them to recheck the story.Iam reproducing entiremail.


Yesterday i read your report named** “camson-seeded growth”**.I have lot of Faith and respect for Hdfc and its research reports until your report.After your report all my faith gone.There are some grey areas in Camson story.They are visible for any investors who can read annual report.

There are some very interesting points in the Annual Report, raising several points on its corporate governance issue and also its business.

Auditoras has qualified its accounts on several counts raising some very serious issues as under. Incidentally, the present auditors was appointed in the last AGM only and this is theirs first year of audit.

  1. Out of total expenditure of Rs 62.46 cr, supporting vouchers for Rs 25.06 cr. (40.12% of expenses) not available.

  2. Sales of Rs 79.98 Cr as reported in the accounts are not tallying with the sales tax return filed with Sales tax authorities. The company is reconciling the same and there may be additional liabilities on account of its towards VAT.

  3. Inventory records are not maintained. (Giving serious doubt about the production reported by the Company.)

  4. Internal Control as regards purchase of fixed assets, purchase of inventory and sales of goods and services is very week and is not commensurate with the size of the Company.

  5. Internal audit system is not commensurate with the size of the Company.

  6. 1. The company has sold Seeds for Rs 59.68 Cr and Biocides for Rs 20.29 Cr and others for Rs 27201 totaling to Rs 79.98 Cr.
  7. Some of very unnatural and abnormalexpenditure booked by the Co are as under :

  8. Rebate and Discount: Rs 14.81Cr

  9. Business Promotions: Rs11.26 Cr

  10. Demonstration Trials : Rs 14.55 Cr

Business Promotion Expenses of Rs 11.26 cr is incurred as against last years expenses of Rs 3.73 lacs only. One can hardly believe such abnormal expenses on account of business promotions. The business promotion expense is over and above advertisement and publicity expenses for which co maintains separate head of account. One has to see this expense along with demonstration trial expenses.

Demonstration Trials expenses is for Rs 14.55 cr as against Rs 9.40 cr. No where company explains what is the nature of this expenses. In previous years these expenses were booked under Research & Development to show the company is spending very high amount on research.Total of Rs 57.91 lacs was spent. This is just .71% of sales

To produce11.93 lacs kg & 11.90 Lt of biocides, surprisingly the company has consumed only 60,130 kg of chemicals. There has not been any other consumption of any other material. How can you produce more than 12 lacs kg and 12 lacs ltrs of biocides just by consuming 60,000 kg of chemical… Here one has to take into account that the company has also produced 1.71 lacs kg of Seeds. Again these productions quantity does not include WIP, which has gone up from Rs 9.38 crores to 14.83 crores. This increase in WIP also involves significant quantity as well.

Previous years account has been significantly recast where almost every expense have been restated giving serious doubt about the company accounting policy and book keeping.

There have been significant differences under various head and also PBT and PAT in unaudited result published by the co for this year and audited result.

Management in page no-44 of AR-2010 mentioned that "B. NOTES TO ACCOUNTS:

  1. a. Confirmation of balances from the parties with whom the Company has had transactions are called for andreceived in certain cases and are reconciled. In respect of cases where confirmation of balances is not received,the Management does not expect any material variations.

b. Supporting documents relating to Rs 2,506 lakhs of expenses incurred during the year is misplaced / lost intransit. The management has reviewed these transactions and confirms the veracity of the same."

After observation of AR-2010 one can comprehend that

Since supporting documents for over 40% expenses are missed, they could be bogus. Bogus expenditure does not necessary means otherwise higher profit. sales have also been inflated.Sales being inflated can also be established by the fact that sales as reported in the annual report does not tally with sales tax return filed with the company".

So,Don’t ignore lot of investors has faith in your reports and blindly put amount into stocks recommended by you.I think it is irresponsibility from you by publishing this report with out going into annual report and auditor comments.Please take corrective measures .

I didn’t find any reply from them.But they again published a report with SELL call due to corporate governance issues.



Good you are taking up these points. I have been pointing similar things to readers at my blog also. Investors should be very very careful here.

Thanks & Regards,


Excellent initiative Omprakash.

Great to see you taking this forward and writing to HDFC Sec. At least they came out with a SELL call even if they did not acknowledge your contribution!

Please keep it up!



I attended the AGM and captured some inputs here:

I had written to HDFC, the company investor mail id and a few other analysts after seeing the blog post link share on theequitydesk. The company did not reply, I indicated this to the promoter and he has indicated that this will not happen in future. HDFC also did not reply. But there were analysts who responded and they did not share the concerns that were raised by the blog post.

Just to let you know July 2011 was not the first time HDFC had recommended Camson to the investors. In June 2010 for example they had it as part of their aggressive portfolio.

The blog post also for the questions while did raise some points but not sure why such questions were not asked to the management directly?

The stock as per my understanding is not a typical investment kind of stock where looking at numbers would indicate what the future holds. But probably more a PE kind of investment where you bet on the capabilities if you expect them to do well. They might falter and leave you with nothing or they might do well. The typical issue with analysing such stocks specially by analysts would be that they would expect next few qtrs/yrs revenues, profits etc. which the management might not give and also would be difficult to predict.

I’m invested so please do a due dilligence in case you wish to enter/exit.

There were two major issues- first, lost vouchers in last financial year. In 2011 report they have reported that lost vouchers have been found and tallied. The second issue is sales tax return… the company is largely engaged in agriculture. Generally on agricultural products, there is no VAT. These may have resulted in filing of incorrect returns, which shall be rectified as reported by the management. With respect to higher receivables, the management reported in AR2011 that in the first few months large portion of receivables were recovered.

We need to decide if the accounts are fudged. Does not appear so. The company is growing for last many years without any debt. Thus the company must be generating enough revenue to sustain itself. Some equity dilution has been done, but the money has largely gone into fresh investments in Himachal/Aligarh. Thus, ignoring window dressing, the accounts may not be fudged. Further, there are insiders buying through preferential issues. Cash flow from operating activities has largely remained positive, except in 2011 when high receivables were there.

Respected journals are saying good thing about the company. Forbes put the company in best 200 list recently. Business standard was positive. There were other positive reports also. Although we need to be careful, the company does not appear to be a fraud.

Wondering if anyone thinks this one is worth paying attention now – the corporate governance issues may be a thing of the past with new mgt? Per the AR, they’ve hired a Merill Lynch/HDFC Bank guy as CEO and a ML/Citibank guy as COO. They’re also hiring from the competition and offering ESOPs to their own people.

So looks like the new mgt takes care of the sales and finances and the MD takes care of the research -they spend 15% of their revenues in research and have filed for 7 product patents. Have built new R&D facilities as well.

The Company was one among the 35 Indian companies to be selected in the Forbes list of best 200 companies under a billion in Asia. It was also recognized by Deloitte Technology Fast50 India 2011 Program as a leading technology Company for the 5th year in succession

Hi All,

Two reputed brokerages has recommended this company in past some months :

1). By Axis Capital in June’14 :

2). By Indianivesh in Nov’14. Since then it was gone above 154 and has now cooled down to about 120.

Just wanted to bring this to the notice of fellow Valuepickrs. Has anybody assessed it post the above discussion? Looking forward to know your comments.

Now Karvy has come out with Initiating coverage report :

Any views?

There was also a CEO interview on Moneycontrol talking up seeds separation and pesticides expansion.

Any assessment of this company?

Camson Bio’s AGM is on 28th September. If its possible for anyone in Bangalore to attend it would be interesting. The company is working with KPMG for seeds division listing. Also it had mentioned the possibility of forensic audit. The AGM could give some answers around this area. At INR 60 crore market cap I see this company as a potential turnaround candidate.

Haresh Bhai any idea about listing of camsinbio seed . they have credited in demat account since long but trading is not happening.

I had called the Company to check on the status. They informed me that all compliance required from their end has already been undertaken. The company is awaiting the final listing approval from Bombay Stock Exchange. Also there is a link on their website which mentions the Company is working with KPMG to complete the process.

I haven’t yet received Camson seeds shares in my demat account. Has everyone received? Should i mail to their compliance team?


It would be a good idea to check your NSDL statement.The shares are reflecting in the statement.

Oh good. Jst checked and its reflected in the nsdl statement. Thanks.
So will it be reflecting in the demat account once it gets approval for listing?


Yes once the company receives listing approval it would reflect in the demat account.

It’s credited since more then 10 months stil listing is not happening big trap. Really bad investment idea.last year so many positive reports by brokerages .Analyst like Prakash Diwan was strongly recommending camson bio same time.

Seems CLSA (Bio Haverst a group company which holds 20% stake) has starting to take interest in Camson to sort out any issues…

Based upon the notice received from a shareholder namely Bio Harvest Pte Ltd, and on the, recommendation of Nomination and Remuneration Committee, the Board of Directors have appointed Mr. Peter Joseph Kennedy and Mr. Yong Teck Seong Daniel as the Additional Directors of the Company.

Camson Bio up 20% curcuit


I understand your concern on the Company however:
Camson’s auditor is Deloitte
KPMG is assisting them in seeds listing
2 additional directors from CLSA have been appointed on Board

If the company was mismanaging their finances it would not work with such large institutions.