Your Directors are pleased to present the Thirtieth Annual Report of the Companytogether with the Audited Accounts for the financial year ended March 31 2016.
|FINANCIAL RESULTS: || |
(Rs. In Crores)
|Particulars ||2015-16 ||2014-15 |
|Income from Operations ||267.31 ||256.59 |
|Other Income ||1.16 ||3.29 |
|Total Income ||268.47 ||259.88 |
|Profit before tax for the year ||34.71 ||44.20 |
|Less : Provision for taxation || || |
|- Current Tax ||11.00 ||14.20 |
|- Deferred Tax ||0.45 ||(0.08) |
|Profit after tax ||23.26 ||30.08 |
|Add: Surplus brought forward ||21.45 ||30.52 |
|Total Amount available for appropriation ||44.71 ||60.60 |
|Less: || || |
|Interim Dividend (20%) paid on equity shares ||3.05 ||3.04 |
|Tax on Interim Dividend ||0.62 ||0.61 |
|Transfer to General Reserve ||15.00 ||30.00 |
|Proposed Final Dividend on Equity Shares @ 20 % (Re.0.20 per equity share on face value of Re.1/-) ||3.05 ||4.57 |
|Provision for tax on Dividends ||0.62 ||0.93 |
|Surplus carried Forward to balance sheet ||22.38 ||21.45 |
Total income increased from Rs.259.88 Crores in 2014-15 to Rs.268.47 Crores in 2015-16- increase of 3.30%. Profit after Tax was Rs. 23.26 Crores (previous year : Rs.30.08Crores)
With Fixed Assets of Rs.59.02 Crores (previous year Rs.55 crores) our Asset Turnoverratio is a healthy 4.53 with Return on Sales of 21.98%. Interest cost for the year isdecreased by Rs.2.31 crores.
Your Directors are pleased to recommend a final dividend of 20% on Equity ShareCapital for the year ended 31.03.2016 amounting to Rs. 304.57 Lakhs excluding dividendtax. During the year the Board declared an Interim Dividend of 20% amounting to Rs.304.57 Lakhs excluding dividend tax. The aggregate of dividend declared for the year was40% amounting to Rs. 609.14 Lakhs excluding dividend tax.
TRANSFER TO GENERAL RESERVE
Your directors are pleased to transfer a sum of Rs.15 crore towards the General Reserve
Cash and cash equivalents as at 31st March 2016 was Rs 743.57 lakhs(previous year Rs. 1027.76 lakhs). The Company continues to focus on judicious managementof its working capital receivables inventories and other working capital parameters andwhich were kept under strict check through continuous monitoring.
The wind mill of the Company located at Kokkampalayam village Dharapuram Taluk ErodeDistrict Tamil Nadu generated 650659 units of electricity in the year 2015-16 against801130 units generated in 2014-15. The Company had utilised the 394068 units generatedas captive consumption during 2015-16 for its Satyamangalam plant and the balance 256591units are being sold to TNEB.
The Board of Directors met five times during this financial year. The details of theBoard meeting are given in the Corporate Governance report. The intervening gap betweenthe meetings were within the period stipulated under Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
AUDIT COMMITTEE MEETING
The Audit Committee of the Company met four times during the current financial year.The details of the Audit Committee meetings are given in the Corporate Governance report.The intervening gap between the meetings were within the period stipulated under SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
PARTICULARS OF LOANS GUARANTEE OR INVESTMENTS
The Company has not given any loans or guarantees covered under the provisions ofsection 186 of the Companies Act 2013 except the Corporate Guarantee given onbehalf of AVT Tea Services Ltd. London which is given in the Note No. 27 to thefinancial statements.
The details of investments made by the Company are given in the Note Nos. 11 &13tothe financial statements.
LISTING WITH STOCK EXCHANGES
The equity shares of the Company are continued to be listed in BSE Limited (BSE) andthe National Stock
Exchange of India Ltd. (NSE). The Company confirms that it has paid the annual listingfees for the year 2016-17 to both the stock exchanges as on date.
During the year as envisaged under the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Company has executed afresh Listing agreement with both BSE and NSE before 1st March 2016.
DSIR APPROVAL FOR IN-HOUSE R&D FACILITY AT SOUTH VAZHAKULAM AND BANGALORE
Department of Scientific and Industrial Research (DSIR) New Delhi has renewedits recognition for both our R&D facilities at South Vazhakulam Aluva Keralaand the Manchenahaili Village Kasabe Hobari Bangalore. The said recognition is validtill 31st March 2019.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes or events that have occurred since the date of theBalance Sheet which could have any effect on the financial position of the Company.
DIRECTORS & KEY MANAGERIAL PERSONNEL
i) Director retiring by rotation
In accordance with the provisions of Companies Act 2013 and the Articles ofAssociation of the Company Mr. Ajit Thomas Director retires by rotation at the 30thAnnual General Meeting and being eligible offers himself for re-appointment.
ii) Declaration from Independent Directors on Annual Basis The Company has receivednecessary declarations from all the three Independent Directors of the Company underSection 149(7) of the Companies Act 2013 that the Independent Directors of the Companymeet with the criteria of their Independence laid down in Section 149(6) of the CompaniesAct 2013.
iii) Key Managerial Personnel
Mr. M.N. Satheesh Kumar President & COO Manager Mr. A. Ramadas Sr. VicePresident & CFO and Mr. Dileepraj. P Company Secretary are the Key ManagerialPersonnel of the Company
PERFORMANCE OF SUBSIDIARY / JOINT VENTURE /ASSOCIATES
a) AVT Tea Services Ltd. London UK (AVTTSL):
The present authorized share capital of the Company is Pound Sterling (GBP) 1.00million (Rs.9.41 Crores approx.). The paid up capital of the Company as on 31stMarch 2016 is Pound Sterling (GBP) 1 million (Rs.9.41 Crores approx.). AVTTSL is themarketing arm of your Company for de-caffeinated tea and instant tea. The AVTTSL recordedsales of Rs.48 Crores (previous year Rs.43.14 crore) and loss of Rs.1.63 crores (previousyear loss of Rs.2.35 crore) for the year 2015-16.
b) Closure of AVT Natural Pte. Ltd. Singapore:
During the year the Liquidation of AVT Natural Pte. Ltd. Singapore was completed atSingapore.
c) Accounts of subsidiaries:
Pursuant to Section 136 (1) (b) of the Companies Act 2013 a copy of the auditedfinancial statements of AVT Tea Services Ltd. London for the year ended 31.03.2016 theoverseas subsidiary of your Company shall be furnished to any shareholder on demand. TheConsolidated financial statements audited by the statutory auditors of the Company havebeen attached to this Report.
d) Joint Venture / Associate Company
The Company does not have any Joint Venture / Associate Company
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars prescribed by the section 134 (3) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 relating to Conservation of EnergyTechnology Absorption Foreign Exchange earnings and outgo are furnished in the Annexure-Ito this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of Section 135 of the Companies Act 2013 CSR Committee ofthe Board of Directors was formed to recommend
a. the policy on Corporate Social Responsibility (CSR) and
b. implementation of the CSR Projects to be undertaken by the Company as per the CSRPolicy for consideration and approval by the Board of Directors.
Annual Report on CSR in the prescribed format is enclosed as Annexure - II. The CSRpolicy of the Company has been already uploaded in the web site: www.avtnatural.com
CONTENTS OF CSR POLICY
The CSR policy of the Company was approved by the Board of Directors on 28.01.2015.
The Companys commitment to CSR projects and programs will be to focus on holisticdevelopment of host communities and create social environmental and economic value to thesociety.
Companys commitment to CSR projects and programs will be by investing resourcesinto any of the following areas:
a) Development of skill among various sections of society
b) Development of Infrastructure
c) Empowerment of Women
d) Promotion of Health Care
e) Old age homes / day care facilities for Senior Citizens
f) Promotion of Education
g) Swachh Bharat and;
h) All other activities envisaged in the Schedule VII of the Companies Act 2013
Pursuant to Section 139 of the Companies Act 2013 the appointment of M/s. Suri &Co. Chartered Accountants Chennai - 600017 (Firms Registration No. 004283S) theStatutory Auditor of the Company needs to be ratified by the shareholders in every AnnualGeneral Meeting. Your directors recommends ratifying their appointment at the forthcomingAnnual General Meeting.
There are no qualifications or adverse remarks mentioned in the Auditors report.The notes to accounts forming part of financial statements are self-explanatory and needsno further clarification.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. V. Suresh Practising Company Secretary (C.P. No.6032) Chennai 600018 to undertake the Secretarial Audit of the Company. The Secretarial Audit Report isincluded as Annexure III and forms an integral part of this Report.
There is no secretarial audit qualification for the year under review.
During the year under review M/s. PKF Sridhar & Santhanam LLP CharteredAccountants Chennai 600 004 carried out the internal audit of the Company andsubmitted their reports.
COST AUDIT REPORT
Cost Audit is not applicable to the Company as per the Companies (Cost Records &Audit) Rules 2014 however the cost records are maintained by the Company.
The Company continues to carry adequate insurance for all assets against unforeseeableperils.
RELATED PARTY TRANSACTIONS
All transactions entered with related parties for the year under review were atarms length basis and in the ordinary course of business and that the provisions ofSection 188 of the Companies Act 2013 are not attracted. No Material Related Partytransactions i.e. transactions exceeding ten percent of the annual consolidated turnoveras per the last audited financial statements were entered during the year by yourCompany. Accordingly the disclosure of Related Party transactions to be provided undersection 134 (3) (h) of the Companies Act 2013 in Form AOC -2 is not applicable
Further there are no material related party transactions during the year under reviewwith the Promoters Directors or Key Managerial Personnel or other designated personswhich may have a potential conflict with the interest of the Company at large.
All related party transactions are placed before the Audit Committee and also theBoard. Prior omnibus approval of the Audit Committee is obtained on yearly / quarterlybasis for the transactions which are of a foreseen and repetitive nature. The transactionsentered into pursuant to the omnibus approval so granted has been placed before the AuditCommittee and the Board of Directors for their approval on a quarterly basis.
The policy on Related Party Transaction as approved by the Board of Directors has beenuploaded on the website of the Company and the website link is www.avtnatural.com
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS AND COURTS.
There are no significant material orders passed by the Regulators/ Courts which wouldimpact the going concern status of the Company and its future operations.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT - 9 isenclosed herewith as Annexure - IV.
The information required under section 197 of Companies Act 2013 and pursuant to rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of employees of the Company have been given in the Annexure - V.
The information required under section 197 (12) of the Companies Act 2013 read withrule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 in respect of the Company have been given in the Annexure - VI.
During the year under review your Company enjoyed cordial relationship with workersand employees at all levels
NOMINATION AND REMUNERATION POLICY
The Board on the recommendation of the Nomination & Remuneration Committee framed apolicy for selection and appointment of Directors Senior Management Personnel KeyManagerial Personnel and their remuneration etc.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Vigil Mechanism / Whistle Blower Policy in place pursuant to Section177 (9) of the Companies Act 2013 and as per the Regulation 22 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The said policy is available inthe website of the Company which can be accessed from the link - www.avtnatural.com
Pursuant to Section 134 (3) (n) of the Companies Act 2013 and the Regulation 21 (5) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hadlaid down the procedures to inform Board members about the risk assessment and mitigationprocedures.
Mr. A. Ramadas Sr. Vice President & CFO has been assigned the task of informingthe Board about the various risks and its mitigation by the Company from time to time. Atpresent the Company has not identified any element of risk which may threaten theexistence of the Company.
INTERNAL FINANCIAL CONTROL
The Company has established an Internal Financial Control framework and operatingcontrol framework. The framework will be reviewed regularly by the management. InternalFinancial Controls are adequate and operating effectively.
ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and safeoperations. The Companys policy requires conduct of operations in such a manner soas to ensure safety of all concerned compliances environmental regulations andpreservation of natural resources.
The performance of Board Committees and all individual directors includingIndependent Directors are evaluated by number of meetings held time spent in each meetingdeliberating the issues statutory compliance contribution of each director the detailsof decision taken and measures adopted in implementing the decision and monitoring thecontinuous implementation and feed back to the Board.
DISCLOSURE OF ACCOUNTING TREATMENT
In the preparation of the financial statements the Company has followed the AccountingStandards referred to in Section 133 of the Companies Act 2013. The significantaccounting policies which are consistently applied are set out in the Notes to theFinancial Statements.
Pursuant to Regulation 34(3) read with schedule V of SEBI (Listing Obligations andDisclosure Requirements)
Regulations 2015 the Management Discussion & Analysis
Report Report on Corporate Governance with Auditors Certificate on compliancewith conditions of Corporate Governance have been annexed in Annexure VII & VIII tothis Report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Act and that an Internal Complaints Committee has been set up for redressal ofcomplaints and that all employees (permanent contractual temporary trainees) arecovered under this policy.
During the year the Company has not received any complaint under Sexual Harassment ofWomen at the Workplace (Prevention Prohibition & Redressal) Act 2013.
Statements in this Directors Report & Management Discussion and AnalysisReport describing the Companys objectives projections estimates expectations orpredictions may be forward looking statements within the meaning of applicablesecurities laws and regulations. Actual results could differ materially from thoseexpressed or implied. Important factors that could make difference to the Companysoperations include raw material availability and its prices cyclical demand and pricingin the Companys principle markets changes in Government regulations Tax regimeseconomic developments within India and the countries in which the Company conductsbusiness and other ancillary factors.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 (3) (c) of the Companies Act 2013 withrespect to Directors Responsibility Statement it is hereby confirmed that:
1. In the preparation of the accounts for the financial year ended 31stMarch 2016 the applicable accounting standards had been followed along with properexplanation relating to material departures;
2. The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;
3. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
4. The Directors have prepared the accounts for the financial year ended 31stMarch 2016 on a going concern basis.
5. The directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively.
6. The directors have devised proper system to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and operating effectively.
Your Directors acknowledge the support from customers shareholders farmers BankersCameo Corporate Services
Limited BSE Limited the National Stock Exchange of India Limited National SecuritiesDepository Limited Central Depository Services Limited Central / State Governmentauthorities for the co-operation and assistance provided to the Company.
The Directors also place on record their gratitude to the employees for their continuedsupport commitment dedication and co-operation.
| ||For and On behalf of the Board |
|Place : Chennai ||Ajit Thomas |
|Date : 30th May 2016 ||Chairman |