Avanti Feeds Ltd

To

The Shareholders,

Your Directors have immense pleasure in presenting Company’s Nineteenth AnnualReport together with the Audited Accounts for the financial year ended 31st March, 2012.Your company has achieved highest ever turnover of Rs. 39,341.48 lacs and before taxprofit at Rs. 4,003.00 lacs and profit after tax at Rs.2,807.02 lacs for the year.

FINANCIAL PERFORMANCE:

The profit for the year under consideration i.e. 2011-12, before depreciation, financecharges and tax is Rs.4,810.32 lacs as compared to a profit of Rs. 1,238.59 lacs in theprevious financial year. The profit for the year after tax is Rs. 2,807.02 lacs as againsta profit of Rs.341.80 lacs during the previous financial year.

For the second consecutive year there was overall increase in the shrimp culture bothin terms of water spread area and density of culture by around 25% mainly because ofsuccess of Vannamei shrimp culture many farmers converted from Black Tiger shrimpcultivation to Vannamei shrimp cultivation The improvement in the international prices forshrimps has also encouraged new farmers in taking up the shrimp cultivation. Yourdirectors are glad to inform you that as against the estimated shrimp culture growth of25%, your company's Shrimp Feed sales grew by 125%. Your Company's high quality of shrimpfeed and technical support to the farmers by educating them with best culture practices,has made our feed the most preferred by the farmers. The year 2011-12 ended with shrimpfeed sales at 59,838 MT, an increase of 33,196 MT as compared to previous financial year.

The shrimp processing and export division sales recorded export of 2,102 MT, anincrease of 775 MT as compared to previous financial year. The demand for shrimp ininternational markets is slowly improving with slow and steady economic recovery in USA.

The four windmills of your company located in Karnataka State with a total capacity of3.2 MW have generated 64.65 lac units and power generated was sold to BengaloreElectricity Supply Company Limited under PPA.

AMALGAMATION OF AVANTI THAI AQUA FEEDS PRIVATE LIMITED WITH THE COMPANY

Your Directors are happy to inform you that the amalgamation process of Avanti ThaiAqua Feeds Private Limited (a subsidary), with the Company, for which shareholders gavetheir unanimous approval at the EGM held on 21st January 2012 has been completed with theHon'ble High Court of Andhra Pradesh approving the scheme and subsequent effect of theamalgamation by ROC in their records.

DIVIDEND:

Your Directors are pleased to recommend dividend of Re.6.50 per equity share of Rs.10/-each for the financial year 2011-12 aggregating to Rs.590.40 lacs on 90,83,042 equityshares. The dividend if approved at the ensuing Annual General Meeting, will be paid tothose shareholders whose name appear on the register of members of the Company on 13thAugust 2012.

CONSOLIDATED FINANCIAL STATEMENTS:

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements,the audited Consolidated Financial Statements are provided in the Annual Report.

SUBSIDIARIES:

In accordance with the general circular No.2/2011 and Notification No.51/12/2007-CL-III issued by the Ministry of Corporate Affairs, Government of India, theBalance Sheet, statement of Profit and Loss and other documents of the subsidiary companyis not attached with the Balance Sheet of the Company. The Company will make available theAnnual Accounts of the subsidiary company and the related detailed information to anymember of the Company who may be interested in obtaining the same. The annual accounts ofthe subsidiary company will also be kept open for inspection at the Registered Office ofthe Company. The Consolidated Financial Statements presented by the Company include thefinancial results of its subsidiary company.

DIRECTORS:

In terms of Article 105 and 106 of the Articles of Association of the Company, Mr.B.V.Kumar and Mr. A.V. Achar retire by rotation at the ensuing Annual General Meeting andbeing eligible offer themselves for re-appointment. An ordinary resolution to that effectis propounded for the consideration and passing by the shareholders in ensuing AGM.

Board of Directors in their meeting held on 14.07.2012 appointed Mr. Wai Yat Paco Leeas an Additional Director, a nominee of Thai Union Frozen Products PCL. Mr. Wai Yat PacoLee was also a director in the amalgamated company M/S Avanti Thai Aqua Feeds PrivateLimited. As per the provisions of the Section 260 of the Companies Act, 1956 he holdsoffice up to the date of ensuing Annual General Meeting. An ordinary resolution for hisappointment as Director of the Company is propounded for the consideration and passing bythe Shareholders in the ensuing AGM.

AUDITORS:

The Auditors M/s. Karvy & Co., Chartered Accountants will retire at the conclusionof the forthcoming Annual General Meeting and are eligible for reappointment. Members arerequested to consider their reappointment for the financial year ending 31st March, 2013on remuneration to be decided by the Board of Directors.

COST AUDIT:

Complying with the provisions of Section 233 (B) of the Companies Act, 1956 andMinistry of Corporate Affairs Notification dated 3rd June, 2011, the Board of Directorshave appointed M/S Sagar & Associates,

Cost Accountants, Hyderabad to carry out Audit of the Cost Accounts of the Processingand Export Division of the Company for the year 2012-13 and the cost audit report will besubmitted to the Ministry of Corporate Affairs, Government of India.

PARTICULARS OF EMPLOYEES:

A statement containing the particulars of employees as required under section 217 (2A)of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 isfurnished in Annexure - 1.

CONSERVATION OF ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:

The details regarding conservation of energy, research and development, technologyabsorption, foreign earnings and outgo are furnished at Annexure - 2 pursuant to theprovisions of Sec.217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosureof Particulars in the Report of Directors) Rules, 1998.

DIRECTORS' RESPONSIBILITY STATEMENT:

Your Directors hereby confirm and declare that:

(a) in the preparation of Annual Accounts, the applicable accounting standards havebeen followed ;

(b) the accounting policies are consistently applied and reasonable, prudent judgmentsand estimates are made so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the Profits of the Company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act, 1956, forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities ; the Directors have prepared the Annual Accounts on a going concern basis.

CORPORATE GOVERNANCE:

As a listed company, necessary measures are taken to comply with the Listing Agreementwith the Stock Exchanges, report on the Corporate Governance together with a certificateof compliance from the Auditors, forms part of this report.

ACKNOWLEDGEMENTS:

Your Directors are pleased to place on record their gratitude and appreciation forco-operation extended by the Governmental Agencies, Shareholders and Banks from time totime. Your directors also place on record their appreciation for the contributions made bythe employees through their dedication, hard work and commitment. Your Directors alsoconvey thanks and appreciation to the valued customers and dealers for their continuedpatronage.

ANNEXURE – 1

Statement of particulars of employees pursuant to Section 217(2A) of the Companies Act,1956 and forming part of the Directors' Report for the year ended 31st March, 2012.

ANNEXURE – 2

Information pursuant to Section 217(1)(e) of the Companies (Disclosure of particularsin the Report of Board of Directors) Rules, 1988 and forming part of the Directors' Reportfor the year ended 31st March, 2012.

(See Rule 2)

Form for disclosure of particulars with respect to conservation of Energy:

B) Research and Development:

Company continuous to receive technological support from Thai Union Feed Mill, Thailandfor the efforts made by the company in its R & D.

C) Foreign Exchange Earnings & Outgoings: