Avanti Feeds Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting their 27th Annual Report together with the Audited Financial Statements of your Company and its subsidiary for the year ended 31st March, 2020.

1. Financial Summary or Highlights

The summarized standalone and consolidated financial results of your Company and its subsidiary are given in the table below:

(Rs. in Lakhs)

Financial Year ended

Particulars

Standalone

Consolidated

31st March, 2020 31st March, 2019 31st March, 2020 31st March, 2019
Total Revenue 3,16,257.16 2,73,842.34 4,11,529.15 3,48,777.95
Profit / (Loss) Before Interest, Depreciation & Tax (PBITDA) 39,857.28 35,720.09 52,455.48 46,651.92
Finance Charges 121.23 124.58 198.79 262.67
Depreciation 2,098.56 2,028.31 3,770.67 3,583.87
Provision for Income Tax (including for earlier years) 9,039.82 11,217.72 9,857.44 12,143.39
Net Profit/(Loss) After Tax 28,597.67 22,349.48 38,628.59 30,661.99
Profit/(Loss) brought forward from previous year 89,800.23 79,360.55 1,04,107.24 88,658.54
Profit/(Loss) carried to Balance Sheet 1,01,028.45 89,800.23 1,21,440.48 1,04,107.24

2. Summary of Operations & State of Companys Affairs

The Profit for the year under consideration i.e., FY 2019-20, before depreciation, finance charges and tax is Rs.39,857.28 Lakhs as compared to a Profit of Rs.35,720.09 Lakhs in the previous financial year. The Profit for the year after tax is Rs.28,597.67 Lakhs as against a Profit of Rs.22,349.48 Lakhs during the previous financial year.

Your Company reported sale of 4,84,669 MT shrimp feed during 2019-20 as compared to 4,21,691 MT shrimp feed sales in the immediate preceding financial year 2018-19, an increase of 15% volume.

The Four Windmills of your Company located in Karnataka State with a total capacity of 3.2 MW have generated 48.09 Lakh units as against 40.06 Lakh units in the previous year. The power generated during the year was sold to Karnataka power Transmission Corporation Limited under the power purchase Agreement.

There have been no material changes and commitments, which affect the financial position of the company which have occurred between the end of the financial year to which the financial statements relate and the dates of this report.

During the year under review, there is no change in nature of the business of the Company. The affairs of the Company are conducted in accordance with the accepted business practices and within the purview of the applicable legislations.

3. The impact of COVID-19 on the business and going concern assumptions of the Company and its subsidiary Avanti Frozen Foods Pvt. Ltd.

On 30th January, 2020, the World Health organization (WHo) declared the Coronavirus (CoVID-19) out break a "public Health Emergency of International Concern" and on 11th March, 2020 declared it to be a pandemic. The Government of India imposed a countrywide lockdown from 24th March, 2020. The Shrimp Feed manufacturing and Shrimp processing and Exports have been declared as "Essential Services" and exempted from restrictions of lockdown. However, due to low manpower turnout coupled with difficulties in transportation of raw materials and finished goods, the production and sales/exports reduced during April and May 20. The situation is gradually improving with increase in employee turnout and streamlining transportation and other related services.

The Company is strictly implementing the measures stipulated by the Government for safety of the workers in the production facilities and other establishments of the Company.

The impact of COVID-19 is not significant on the financial performance of the Company in the quarter ended 31st March, 2020 and the Company opines that assessment of impact of CoVID-19 on future is premature since the virus is still aggressive in India, not subsided elsewhere in the world and there is already effect of recession on global economy.

4. Survey and Search by Income Tax Department

In November, 2019 the Income Tax Department, Hyderabad conducted Search/Survey, on the premises of the Company and its subsidiary (i.e., Avanti Frozen Foods private Limited). Since then the Department has been calling for information/records from time to time which the Company has been submitting. on the basis of preliminary information from the accounts and on the advice of the tax consultants a provision for Income Tax amounting to Rs.358 Lakhs has been made on estimation basis in the accounts. Actual amount will be determined only on completion of the assessments.

5. Share Capital

During the year under review, there is no change in share capital of the Company. As on 31st March, 2020 the authorized capital of the Company is Rs.15,85,00,000 divided into 15,85,00,000 equity shares of Rs.1/-each and paid-up capital is Rs.13,62,45,630 divided into 13,62,45,630 equity shares of Rs.1/- each.

6. Dividend

Interim Dividend

Your Directors at the meeting held on 24th February, 2020 have declared an Interim Dividend of Rs.5 (Rupees Five only) per equity share of Rs.1/- each fully paid, for FY 2019-20. The Interim dividend, was paid by 12th March, 2020 to the eligible members as on the record Date i.e., 6th March, 2020. Interim Dividend resulted in a cash outflow of approximately Rs.8,212.57 Lakhs, which includes corporate dividend distribution tax of Rs.1,400.28 Lakhs.

Final Dividend

Your Directors recommend a final dividend of Rs.0.10 ps. (Ten paise only) per equity share of Rs.1/- each fully paid for the FY 2019-20. The final dividend if declared by the members at the 27th Annual General Meeting to be held on 29th August, 2020, will be paid, subject to deduction of tax at source as applicable, on or before 25th September, 2020.

Pursuant to Reg.43A of SEBI (LoDR) regulations, the Company has formulated a policy on Dividend Distribution which is disseminated on the Companys website at www.avantifeeds.com.

7. Reserves

During the year under review, an amount of Rs.2,500 Lakhs was transferred to reserves out of the current year profits.

8. Credit Rating

During the year under review, India Ratings & Research Private Limited (the India Ratings), Affirmed the Credit rating as under:

Sl. No. Details Rating Affirmed
1 Avanti Feeds Ltd - Long Term Issuer Rating IND AA(-)Stable
2 Fund Based Working Capital Limits (Rs. 75 Crs.) IND AA(-)Stable
3 Non-Fund Based Working Capital Limits (Rs.67 Crs.) IND A1 +

9. Composition of the Board and Details of Board Meetings

Sl. No. Name Designation
1 Sri A. Indra Kumar Chairman & Managing Director
2 Sri C. ramachandra rao Joint Managing Director, Company Secretary & Chief Financial Officer
3 Sri N. ram prasad Director
4 Mr. Bunluesak Sorajjakit Director
5 Mr. Wai Yat paco Lee Director
6 Sri A.V. Achar Independent Director
7 Sri B.V. Kumar Independent Director
8 Sri M.S.p. rao Independent Director
9 Sri K. ramamohana rao Independent Director
10 Sri N.V.D.S. raju Independent Director
11 Smt. K. Kiranmayee Independent Woman Director
12 Sri J.V. ramudu Independent Director
13 Sri A. Venkata Sanjeev (Director from 07.06.2019 and Executive Director from 09.08.2019) Executive Director
14 Sri Solmon Arokia raj IAS, (upto 27.09.2019) Nominee Director (Nominee of Andhra pradesh Industrial Corporation Limited - represented as equity investor)
15 Dr. rajat Bhargava, IAS (from 19.10.2019) Nominee Director (Nominee of Andhra Pradesh Industrial Corporation Limited - represented as equity investor)

9.1 Number of Board Meetings

During the year under review, 6(Six) Board meetings were held. The details are as under:

Sl. No. Date of Board Meeting No of Directors Attended
1 25.05.2019 12
2 07.06.2019 10
3 20.07.2019 11
4 19.10.2019 12
5 04.02.2020 12
6 24.02.2020 12

10. Committees of the Board

The details of the Committees of the Board viz., Audit Committee, Nomination and Remuneration Committee, Corporate Social responsibility Committee, Stakeholders relationship Committee and risk Management Committee are reported in the report on Corporate Governance which forms part of the Boards report.

11. Meeting of Independent Directors

The details of the Separate meeting of the Independent Directors are reported in the report on Corporate Governance which forms part of the Boards report.

12. Familiarization Programme for Independent Directors

The details of the familiarization programme for the Independent Directors is reported in the report on Corporate Governance which forms the part of the Boards report.

13. Independent Directors

13.01 Declaration by Independent Directors

Sri A.V. Achar, Sri B.V. Kumar, Sri M.S.P. Rao, Sri K. Ramamohana Rao, Sri N.V.D.S. Raju, Smt. K. Kiranmayee and Sri J.V. Ramudu, are Independent Directors on the Board of your Company. In the opinion of the Board and as confirmed by these Directors, they fulfil the conditions specified in Sec. 149(6) of the Act and the Rules made thereunder and under Regulation 16(1)(b) of SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 about their status as Independent Directors of the Company.

13.02 Registration of Independent Directors with the Databank in the portal of Indian Institute of Corporate Affairs

Pursuant to notification dated 22nd october, 2019 of Ministry of Corporate Affairs, all the Independent Directors have registered themselves as Independent Directors in the portal of Indian Institute of Corporate Affairs.

14. Changes in Directors and Key Managerial Personnel

During the year under review, Andhra pradesh Industrial Development Corporation Limited has withdrawn the nomination of Sri Solomon Arokia Raj, IAS w.e.f 27th September, 2019 and appointed Dr. Rajat Bhargava, IAS w.e.f 19th october, 2019 as Nominee Director.

During the year under review Sri A. Venkata Sanjeev, was appointed as an Additional Director on 7th June, 2019. He was appointed as an Executive Director for a period of 5 years at the 26th Annual General Meeting held on 9th August, 2019.

In terms of Article 105 and 106 of the Articles of Association of the Company Mr. Bunluesak Sorajjakit and Sri N. Ram prasad, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Nomination & Remuneration Committee and the Board recommended their re-appointment for approval of the members at the ensuing AGM.

15. Policy on Directors Appointment and Remuneration

15.01 The details of policy on Directors appointment and Remuneration (i.e., Nomination and Remuneration Policy), criteria for determining qualifications, positive attributes, independence of directors are included in Report on Corporate Governance forming part of the Boards Report.

15.02 The details of the remuneration paid to Sri A. Indra Kumar, Chairman and Managing Director and Sri C. Ramachandra Rao, Joint Managing Director, Company Secretary & CFO and Sri A Venkata Sanjeev, Executive Director are as under:

(Rs. in Lakhs)
Details Sri A. Indra Kumar, CMD Sri C. Ramachandra Rao, JMD, CS & CFO Sri A. Venkata Sanjeev, 1 ED
Salary 315.79 165.12 36.80
Ex-gratia 36.72 19.20 3.87
Superannuation 27.57 14.42 2.30
Perks 4.36 - -
Commission on Profits 1,556.88 1,167.66 -
Total 1,941.32 1,366.40 42.97

Further, information about the elements of remuneration package of above whole-time directors is provided in the extract of the Annual Return in Form MGT-9 enclosed to this Report.

16. Transfer of unpaid/unclaimed Dividend to IEPF

Pursuant to the provisions of Sec. 124(5) of the Companies Act, 2013, as amended, read with Investor Education and protection Fund (Awareness and protection of Investors) Rules, dividend which remain unpaid or unclaimed for a period of 7 consecutive years will be transferred to the Investor Education and protection Fund of the Central Government.

Shareholders who have not encashed their dividend warrant(s) within 7 years from the date of the declaration of dividend, are requested to make their claim immediately to the Registrars & Transfer Agents i.e., KFin Technologies private Limited (Formerly Karvy Fintech private Limited), Hyderabad or to the Company at its Corporate Office. The unclaimed dividend for the financial year 2012-13 will be transferred to IEPF within the time limit prescribed under the provisions of the Act.

The following table provides the details of years for which unclaimed dividends and their corresponding shares would become eligible to be transferred to the IEpF on the dates mentioned below:

Sl. No. Year Date of Declaration Dividend per Share (Rs.) Face Value of Equity Share (Rs.) Due Date for Transfer Amount of unpaid Dividend as on 31.3.2020 (in Rs.)
1 2012-13 27.07.2013 6.50 10.00 30.08.2020 10,37,068.50
2 2013-14 02.08.2014 15.00 10.00 05.09.2021 16,40,895.00
3 2014-15 08.08.2015 27.50 10.00 11.09.2022 22,75,412.00
4 2015-16 13.08.2016 7.00 2.00 17.09.2023 27,64,909.00
5 2016-17 12.08.2017 9.00 2.00 15.09.2024 34,15,761.00
6 2017-18 07.08.2018 6.00 1.00 10.09.2025 53,35,032.00
7 2018-19 09.08.2019 4.00 1.00 12.09.2026 25,29,612.00

Sri C. Ramachandra Rao, Joint Managing Director, Company Secretary & CFO is the Nodal Officer for the purpose of IEpF Rules.

17. Transfer of Shares to IEPF

As per Sec.124(6) of the Companies Act 2013 all shares in respect of which dividend has not been paid or claimed for seven (7) consecutive years or more shall be transferred by the Company to Investor Education and protection Fund of the Central Government. During the year under review, 25,500 equity shares of Rs.1/- each were transferred to IEpF which pertains to unclaimed dividend for FY 2011-12.

18. Extract of Annual Return

Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) rules, 2014, extract of Annual return (Form MGT-9) is enclosed at Annexure-1.

19. Loans, Guarantees or Investments

The details of the Loans, Guarantees and Investments as on 31st March, 2020 are as under:

a) Guarantees : Rs.15,000.00 Lakhs
b) Investments : Rs.11,622.46 Lakhs
26,662.46 Lakhs

20. Contracts or arrangements with Related Parties

The particulars of contracts or arrangements with related parties referred to in Sec.188 (1) in Form No. AoC-2 pursuant to Sec.134 (3)(h) of the Companies Act and rule 8(2) of the Companies (Accounts) rules, 2014 are enclosed at Annexure-2.

The Company formulated the Policy on dealing with related Party Transactions. The details of the policy is disseminated at the Companys website: www.avantifeeds.com.

21. Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing obligations and Disclosure requirements) regulations, 2015, the Board has carried out evaluation of (i) its own performance, (ii) the directors individually and (iii) working of its Committees. The manner in which the evaluation was carried out is reported in the report on Corporate Governance which forms part of this report.

22. Corporate Social Responsibility Committee

22.1 Composition

Sl. No. Name Designation Chairman/Members
1 Sri A. Indra Kumar Chairman & Managing Director Chairman
2 Sri N. Ram Prasad Director Member
3 Sri A.V. Achar Independent Director Member
4 Sri B.V. Kumar Independent Director Member
5 Smt. K. Kiranmayee Independent Director Member
6 Sri C. Ramachandra Rao Joint Managing Director, Company Secretary & CFO Member & Compliance Officer

22.2 Terms of Reference

The Committee is primarily responsible for formulating and recommending to the Board of Directors a Corporate Social Responsibility (CSR) policy and monitoring the same from time to time, amount of expenditure to be incurred on the activities pertaining to CSR and monitoring CSR activities.

22.3 CSR Policy

The Companys CSR policy is disseminated at Companys website: www.avantifeeds.com During the year under review one meeting of the Corporate Social Responsibility Committee was held on 24th February, 2020.

22.4 Avanti Foundation:

During the year under review, the Company along with Avanti Frozen Foods private Limited and Srinivasa Cystine private Limited, as Settlers, established "Avanti Foundation" a Charitable trust to implement the CSR activities of these Companies. The main objective of the Trust is to carry out CSR activities from contributions received from the settlers. Avanti Foundation is registered as a Trust under the provisions of the Income Tax ACT. Sri A. Indra Kumar, Chairman & Managing Director of Avanti Feeds is the Managing Trustee.

One of the objectives of the TRUST is to promote Skill Development. The Trust in collaboration with Andhra university is establishing an "Aquaculture Skill Development Centres" in the Andhra university Campus to function with joint cooperation from Industry and the university faculty. The university has provided space in the campus for construction of class rooms, labs etc. for the Skill Development Centre. The Construction work is in progress. An Mou has been entered into with Andhra University (AU), Visakhapatnam to this effect and the Skill Development is named as "AU-AVANTI AQUACULTURE SKILL DEVELOPMENT CENTRE". Until the building is completed, Aquaculture Skill Development programmes are being held in the facilities provided by the University.

22.5 CSR Expenditure during the Year 2019-20

As per the Sec.135(5) of Companies Act 2013, the company shall ensure that an amount of 2% of the average Net Profits of the Company made during the three immediately preceding financial years towards Corporate Social Responsibility activities. For the Financial Year 2019-20, the amount to be spent towards CSR activities works out to Rs.809.50 Lakhs. The Company has spent Rs.1,070.06 Lakhs towards the CSR activities in the financial year 2019-20. Out of total CSR Expenditure Rs.1,070.06 Lakhs, Rs.809.70 Lakhs pertains to FY 2019-20 and Rs.260.36 Lakhs pertains to unspent amount of CSR expenditure for FY 2018-19. The detailed Report, on the CSR Activities is annexed to Boards Report at Annexure-3.

23. Management Discussion & Analysis

Management Discussion and Analysis Report is annexed which forms part of this Report.

24. Business Responsibility Report

The Business Responsibility Report is annexed which forms part of this Report.

25. Corporate Governance

Report on the Corporate Governance together with a Certificate on compliance of Corporate Governance by Independent Auditors forms part of this report.

26. Risk Management Policy

In terms of the requirement of Sec. 134(3)(n) of the Companies Act 2013, the Company has developed and implemented the risk Management policy.

The Board oversees Companys processes for determining risk tolerance and review managements action and comparison of overall risk tolerance to established levels. The framework is designed to enable risks to be identified, assessed and mitigated appropriately. Major risks identified by the businesses and functions are systematically addressed through appropriate actions on a continuous basis.

26.1 Risk Management Committee

Details of composition, number of meetings held during the year under review and other related details are set out in the report on Corporate Governance which forms a part of this report.

27. Whistle Blower Policy

The Company established Whistle Blower policy for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Companys code of conduct or ethics policy and Code of Conduct to regulate, monitor and report trading by Insiders. The practice of Whistle Blower policy is overseen by the Audit Committee and no employee has been denied access to the Committee. The Whistle Blower policy is available at the Companys website: www.avantifeeds.com.

28. Maintenance of Cost Records

The Company has maintained the Cost records required to be maintained under Sec.148(1) of the Companies Act, 2013.

29. Subsidiaries and Associate Companies

Report on the Performance of Subsidiaries and Associates

The report on the business of the Subsidiaries and Associate companies as on 31st March, 2020 is as follows:

29.1 Subsidiaries

(a) Avanti Frozen Foods Private Limited (AFFPL)

During the year under review, Avanti Frozen Foods private Limited (AFFpL) reported a turnover of Rs.95,490.43 Lakhs and Profit before tax is Rs.10,767.41 Lakhs. The Profit after tax reported by AFFPL is Rs.9,949.79 Lakhs.

The Annual report along with Secretarial Audit report of the AFFpL was placed on the website of the Company at www.avantifeeds.com.

The Secretarial Audit report of AFFpL as required under regulation 24A of SEBI (LoDR) regulations, 2015 is provided as a separate annexure forming part of this report. Further, the annual report is being sent to the members excluding the aforesaid annexure. The same is available for inspection and any member interested in obtaining a copy of the same may write to the company.

(b) SVIMSAN Exports & Imports Private Limited (SVIMSAN)

SVIMSAN Exports & Imports Pvt Ltd., (SVIMSAN) is a wholly owned subsidiary of the Company established in 1998 to carry on the activity of Exports & Imports. After carrying on business for about 11 years i.e., till 2009, the Company discontinued business activity, as the activity found to be not viable and remained non-operative for the past 11 years. The Company has written off the investment of Rs.100 Lakhs in the equity along with un-secured loan of Rs.92.14 Lakhs during the year as there is no possibility of recovery of the investment and the un-secured loan. The SVIMSAN approached registrar of Companies (roC) for removal of its name from registrar of Companies under Sec. 248(2) of the Companies Act. All the necessary statutory procedures have been complied with and the removal of name by the Roc from the register of companies is awaited. Since the process of removal of name by Roc is under process, accounts of SVIMSAN is not considered for consolidation.

(c) Avanti Frozen Foods INC. - Step Down Subsidiary

During the year under review, Avanti Frozen Foods Inc. (USA), Step down subsidiary of the Company and a wholly owned subsidiary of Avanti Frozen Foods private Limited was incorporated on 22.04.2019 in the State of Delaware in USA. The subsidiary Company i.e., Avanti Frozen Foods pvt Ltd., has invested in 10,000 equity share of USD0.01 face value each at a premium of USD 0.99 per share.

29.2 The consolidated financial statements of the Company and its subsidiary prepared in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Sec.133 of the Companies Act, 2013 read with relevant Rules, form part of this Annual Report and are reflected in the Consolidated Financial Statements of the Company.

29.3 The Annual financial statements of the subsidiary including step down subsidiary and related detailed information will be kept at the Registered Office and Corporate Office of the Company and also at the Registered Offices of the respective subsidiaries.

29.4 The Company has adopted a policy for determining Material subsidiaries in terms of regulation 16(1)(c) of the SEBI (Listing obligations and Disclosure requirements) regulations, 2015. The policy approved by the Board is available on the website of the Company at www.avantifeeds.com.

29.5 Joint Ventures

During the year under review there were no Joint Ventures.

29.6 Associate Companies

1. Srivathsa Power Projects Private Limited

Srivathsa power projects private Limited,

is a 17.02 MW gas based independent power project situated in Andhra pradesh in which company holds 49.99% of equity shares.

During the year 2019-20, the gas supplied by GAIL was only 24,024 SCMD as against the nominated quota of 65,000 SCMD stated to be due to non-availability of ApM-Gas. As a result, the power generation was limited to 97.04 Lakhs units as against generation capacity of 1,100.00 Lakhs units. During the year 2019-20 plant operated for 101 days, the Company reported a turnover of Rs.393.59 Lakhs and a loss of Rs.199.07 Lakhs after charging interest and depreciation, as per audited financials.

2. Patikari Power Private Limited

The Company holds 25.88% equity shares in patikari power private Limited which has a 16 MW Hydel power project in Himachal pradesh. During the year 2019-20 as per audited financials the Company generated 530.12 Lakhs saleable energy units, yielding a gross sales income of Rs.1,191.87 Lakhs which resulted in a net Profit of Rs.544.28 Lakhs after charging interest, depreciation and tax.

29.7 Names of companies which have become or ceased to be joint ventures or Associate companies

There were no companies which have become or ceased to be Joint Ventures or associate companies.

29.8 Statement containing salient features of financial statements of subsidiaries and associates

Pursuant to Sec.129(3) of the Act, the statement containing the salient features of the financial statements of Companys subsidiary and associate companies is enclosed at Annexure-4 of Boards report.

30. Listing at Stock Exchanges

The equity shares of your Company continue to be listed and traded on the BSE Limited and National Stock Exchange of India Limited. The Annual Listing fee for the year 2020-21 has been paid to both the stock exchanges.

31. Internal Controls Systems and Adequacy

The Company has in place an adequate system of internal controls. The details of the internal controls system are given in the Management Discussion and Analysis report which forms part of this report.

The internal financial controls with reference to the Financial Statements for the year ended 31st March, 2020 commensurate with the size and nature of business of the Company.

The measures implemented for internal financial controls include multiple authority levels for approval of expenditures, budgetary controls, internal audit etc.

32. Internal Audit

In terms of Sec.138 of the Companies Act, 2013 and the relevant rules, the Company appointed Smt. Santhilatha, Chartered Accountant, an employee of the Company, as Internal Auditor. The Internal Auditor directly reports to the Audit Committee.

33. Independent Auditors, their Report and Notes to Financial Statements

At the 24th Annual General Meeting held on 12th August, 2017 Tukaram & Co. LLP., Chartered Accountants, Hyderabad have been appointed as Independent Auditors of the Company for a period of 5 years, to hold the office from the conclusion of 24th Annual General Meeting till the conclusion of 29th Annual General Meeting to be held in the year 2022. The ratification of the appointment of Tukaram & Co LLP, as Independent Auditors for the year 2020-21 is not required as per Companies (Amendment) Act, 2017 notified on 7th May, 2018.

The report of the Independent Auditors along with notes to Schedules is annexed to this Report.

There were no qualifications, reservations or adverse remarks or disclaimers made by Independent Auditors i.e., Tukaram & Co. LLP, Chartered Accountants, Hyderabad, in their report.

34. Compliance with Secretarial Standards

The Company complies with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

35. Secretarial Audit

In terms of Sec. 204 of the Companies Act 2013 and the rules made thereunder, M/s.V. Bhaskara Rao & Co., Hyderabad Practicing Company Secretary has been appointed as Secretarial Auditor of the Company for the year 2019-20, The report of the Secretarial Auditor is annexed to this report.

36. Annual Secretarial Compliance Report

A Secretarial Compliance Report for the financial year ended 31st March, 2020 on compliance of all applicable SEBI regulations and circulars/ guidelines, issued by M/s. V. Bhaskara Rao & Co., Secretarial Auditors was submitted to Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

37. Directors Responsibility Statement

Pursuant to the requirement Sec.134(3)(c)of the Companies Act, 2013 your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) 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 affairs of the Company at the end of the financial year and of the Profit and Loss of the Company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

38. Details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

(a) Conservation of Energy

(i) The steps taken or impact on conservation of energy Company enhanced the Solar Energy Capacity from 30 KW to 35.28 KW at Gujarat plant. replaced all Traditional Lights with LED Lights.
(ii) The steps taken by the Company for utilizing alternate sources of energy Company is studying feasibility of installing solar panels on roof top of its factory godowns to harness solar power.
(iii) The capital investment on energy conservation Equipments Solar Energy at Gujarat for Rs.1.4 Lakhs, LED lights Rs.20 Lakhs

(b) Technology absorption: Not applicable.

(c) Foreign Exchange Earnings and outgo: During the year under review, the details of Foreign Exchange earnings and outgo are as under:

Inflow - Rs.817.66 Lakhs.

Outflow - Rs.21,470.10 Lakhs

39. Public Deposits

The Company has not accepted any Deposits from the public and as such no principal or interest on deposits from the publics is outstanding as on the date of Balance Sheet.

40. Significant and Material Orders Passed by the Regulators

None of the orders passed by Court or Tribunal has any impact on the going concern status of the Company or significant impact on Companys operations.

41. Human Resources

Your Company treats its human resources as one of its most important assets. Your Company continuously invests in attracting, retaining and development of talent on an ongoing basis. Your Companys thrust is on the promotion of talent internally through job rotation and job enlargement.

42. Particulars of Employees

The statement containing particulars of employees as required under Sec. 197(12) of Companies Act, 2013 read with Rule 5 of the Companies (Appointment and remuneration of Managerial personnel) rules, 2014 indicating (i) the ratio of remuneration of each director to the median employees remuneration and other details and (ii) statement showing the details of employees who are in receipt of remuneration of Rs.102 Lakhs or more are enclosed at Annexure-5 of this report.

43. Policy under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti-Sexual Harassment policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year ended 31st March, 2020 the Company has not received any complaints pertaining to sexual harassment of women at workplace. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (prevention, prohibition and redressal) Act, 2013.

Acknowledgments

Your Directors take this opportunity to express their deep and sincere gratitude and appreciation for co-operation extended by the Governmental Agencies, Shareholders and Banks from time to time. Your Directors also place on record their appreciation for the contributions made by the employees through their dedication, hard work and commitment. Your Directors also convey thanks and appreciation to the valued customers and dealers for their continued patronage.

For and on behalf of the Board
For Avanti Feeds Limited
A. Indra Kumar
DIN: 00190168
Place: Hyderabad Chairman & Managing Director
Date : 27th June, 2020