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Tanvi Foods (India) Ltd.

BSE: 540332 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE978V01015
BSE 00:00 | 21 Aug 56.00 1.00
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NSE 05:30 | 01 Jan Tanvi Foods (India) Ltd
OPEN 56.00
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VOLUME 2000
52-Week high 80.00
52-Week low 55.00
P/E 20.14
Mkt Cap.(Rs cr) 23
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 56.00
CLOSE 55.00
VOLUME 2000
52-Week high 80.00
52-Week low 55.00
P/E 20.14
Mkt Cap.(Rs cr) 23
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tanvi Foods (India) Ltd. (TANVIFOODS) - Director Report

Company director report

To

The Members

Your Directors take pleasure in presenting the Tenth Annual Report on thebusiness and operations of the company together with the audited financial statementsalongwith the report of the Auditors for the financial year ended March 31 2017.

FINANCIAL SUMMARY:

STANDALONE CONSOLIDATED
Particulars For the FY ended For the FY ended For the FY ended For the FY ended
31.03.2017 31.03.2016 31.03.2017 31.03.2016
Revenue from Operations 559532065 481662140 594931124 516328123
Other Income 13101538 9236083 4834902 1094718
Total Revenue 572633603 490898223 599366026 517422841
Total Expenses 559041278 479616219 584847943 505057352
Exceptional Items - 4621304 - 6009181
Prior period items - 804184 - 804184
Profitbefore tax 13592325 16707492 14518083 19178853
Tax Expenses 3304849 2421083 3740173 3460098
Profit after tax 10287476 14286409 10777910 15718756
EPS 2.94 4.70 3.08 5.18

REVIEW OF PERFORMANCE & COMPANY'S STATE OF AFFAIRS:

AT STANDALONE LEVEL:

Our revenue from operations on standalone basis increased to Rs.55.95 Crores from Rs.48.17 Crores in the previous year at a growth rate of 16% Your Company has posted yetanother impressive year of performance. Out of the total revenue approx. 97% has beengenerated from the sale of Frozen Products.

Your Company has incurred total expenses of Rs.559.0 lakhs compared to Rs.479.7 lakhsin the preceding financial year. Further during the financial year under review certainfixed expenses such as depreciation & amortization expenses increased from Rs.79.09lakhs to Rs.95.32 lakhs and finance costs increased from Rs.170.59 lakhs to Rs.236.81lakhs respectively as compared to the preceding financial year.

Your Company earned a Net Profit of Rs.102.8 lakhs for the Financial Year ended 31stMarch 2017 as compared to Rs.142.8 lakhs in the preceding financial year.

This resulted in an EPS of Rs.2.94 for the FY 2016-17.

No amount is being proposed to be transferred to Reserves for the financial year ended31st March 2017.

AT CONSOLIDATED LEVEL:

Your Company owns 100% stake in Polar Cube Cold Storage Solutions Private Limited andSquarepeg Distribution Services Private Limited both being its Wholly Owned Subsidiaries(WOSs). The consolidated financial performance presented herewithcomprises the financialperformance of the Company and that of the said WOSsmentioned above. At consolidatedlevel the revenue from operations stood at Rs. 594.5 lakhs and profit before tax stood atRs.145.1 lakhs. After providing for taxes the PAT stood at Rs.107.8 lakhs.

CONSOLIDATED FINANCIAL STATEMENTS:

Your Company has prepared Consolidated Financial Statements in accordance withAccounting Standard 21 - "Consolidated Financial Statements" prescribed by theCompanies (Accounts) Rules 2014 of the Companies Act 2013. The Consolidated Statementsreflect the results of the Company along with that of its Subsidiaries. The AuditedConsolidated Financial Statements together with the Independent Auditor's Report thereonare annexed and form part of this Annual Report.

MATERIAL CHANGES AFTER THE CLOSURE OF THE FINANCIAL YEAR:

No material changes have occurred after the close of the financial year ended 31stMarch 2017 other than that mentioned in this Report.

CHANGE IN THE NATURE OF BUSINESS:

There was no change in the nature of business of your Company during the financial yearended 31st March 2017.

DIVIDEND:

In view of the ongoing expansion activities of the Company it needs to plough back itsprofits into the business. Hence the Board of Directors has not recommended any dividendfor the financial year ended 31st March 2017.

INTIAL PUBLIC OFFER & FUTURE OUTLOOK:

Your management's continuous efforts shall be to improve the operational performance ofthe Company in the coming years. It is proposed to scale up the operations of the Company.In this regard in the month of February 2017 your company conducted an IPO (SME Issue)and got its shares listed at BSE (SME Segment). In the said IPO 428000 equity shareswere offered for sale by the promoters (the selling shareholders) and 672000 equityshares were freshly issued and allotted@ Rs.60 per share. The primary object for raisingthe funds was to meet the long term working capital requirements. This will help theCompany reduce its dependence on borrowed funds and in turn reduce its debt burden. Withthe ease of availability of funds at its disposal your management hopes the Company willbe able to overcome the funding obstacles and will achieve its targets.

As frozen foods trend is increasing day by day in our country your Company iscontinuously exploring in this segment. Recently the company has introduced some of theproducts in the market such as Veg Keema Samosa Vegetable Samosa Paneer Samosa and OnionSamosa etc. and is coming up with the such other items.

ISSUE AND ALLOTMENT OF SECURITIES / CHANGES IN SHARE CAPITAL

Consequent upon the aforesaid IPO the Capital Structure as on date stands asfollows:

Particulars At the end of FY ended 2017
(Amt. in Rs.)
1 Authorised Capital
4500000 Equity Shares of Rs.10 each 45000000
2 Issued Subscribed & Paid up Capital
4116775 Equity Shares of Rs.10 each 41167750

SUBSIDIARY JOINT VENTURES & ASSOCIATE COMPANIES

The company has two wholly owned subsidiaries in India.

Polar Cube Cold Storage Solutions Private Limited is a wholly owned subsidiary of thecompany and involved in the business of cold storage warehousing refrigerated storekeepers etc.

Squarepeg Distribution Services Private Limited is also a wholly owned subsidiary ofthe company and provides cargo services to your Company and to others.

Pursuant to the provisions of Section 129(3) of the Companies Act 2013 a statementcontaining the salient features of the financial statements of Subsidiaries/Associates inthe prescribed format i.e. Form AOC-1 is provided as Annexure-I to thisReport. The statement also provides the details of performance financial position of eachof the subsidiaries/associates.

Further your Company undertakes that the Annual Accounts of the Subsidiary Companiesand the related detailed information will be made available to its shareholders and to theshareholders of its Subsidiary Companies seeking such information at any point of time.Further the Annual Accounts of the Subsidiary Companies shall also be kept for inspectionby any shareholder at its Registered office and that of the concerned Subsidiary Company.

In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each subsidiary are available on our websitewww.tanvifoods.com

TRANSACTIONS WITH RELATED PARTIES:

During the FY under review transactions were conducted by the Company pursuant to theAgreements entered into with its Related Parties during previous years; the same were onan arm's length basis and in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with the Promoters DirectorsKey Managerial Personnel or any related party which may have a potential conflict with theinterest of the Company at large.

As a matter of Company's Policy any related Party Transaction is placed before theAudit Committee and the Board for its approval.

The details of related party transactions which were entered into during the previousyear / current year are provided in the Note No. 32 forming part of the notes to financialstatements.

As per clause h of Section 134(3) of the Companies Act 2013 the particulars ofrelated party transactions as referred to in Section 188(1) of the Companies Act 2013have been disclosed in Form No. AOC – 2 which is appended as Annexure–II to this Report.

DIRECTORS AND KEY MANAGERIAL PERSONS:

The Board of Directors is duly constituted.

Following changes took place in the offices of Directors/ KMPs (since 01.04.2016 tilldate) –During the year in the EGM held on 01.04.2016 -

Mr. Naveen Nandigam and Mr. R. V. Radhakrishna were appointed as the IndependentDirectors of the Company for a period of five consecutive years.

Mr. A. Sarat Chandra Babu was appointed as the Chairman and Whole Time Director of theCompany for a period of 3 years.

Mrs. A. Vasavi was appointed as the Whole Time Director (Executive Director) of theCompany for a period of

3 years.

Further Mrs. Mahalaxmi Banda was appointed as the CFO of the Company w.e.f 01.07.2016who subsequently resigned on 30.06.2017. Mr. M. Srinivas Reddy was appointed as the CFO ofthe Company in her place with effect from the same date.

Further Mrs. Shilpa Kotagiri was appointed as the Company Secretary w.e.f. 01.09.2016.

Mrs. A. Sarada retired by rotation in the previous AGM held on 30.09.2016 and wasreappointed thereat. Thus the composition of the Board of Directors stands as follows :

1. Sri. A. Sarat Chandra Babu Chairman
2. Sri. A. Sri Nagaveer Managing Director
3. Sri. Naveen Nandigam Independent Director
4. Sri. R. V. Radhakrishna Independent Director
5. Smt. A. Vasavi Executive Director
6. Smt. A. Sarada Non-Executive Director

Pursuant to the provisions of Section 152 of the Companies Act 2013 and in accordancewith provisions of Articles of Association of the Company A. Sarat Chandra Babu retiresby rotation at the ensuing AGM and being eligible offers himself for re-appointment.

DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received respective declarations from both its Independent Directorsconfirming that they meet the criteria of independence as prescribed under sub-section (7)of Section 149 of the Companies Act 2013 and Regulation 25 of SEBI (LODR) Regulations.

DIRECTORS' RESPONSIBILITY STATEMENT:

As required under Section 134(5) of the Companies Act 2013 the Directors confirmthat:

i. In the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed and that no material departures are made from the same ;

ii. 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 profits of the company for the period;

iii. Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

iv. The annual accounts have been prepared on a going concern basis.

v. They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively;

vi. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

MEETINGS OF THE BOARD OF DIRECTORS:

The meetings of the Board are scheduled at regular intervals to decide and discuss onbusiness performance policies strategies and other matters of significance.

The Board duly met 8 times during the Financial Year 2016-17.The intervening gapbetween any two consecutive Board Meetings was within the period prescribed under theprovisions of the Companies Act 2013.

The names of members of the Board and their attendance at the Board Meetings are asunder:

Name of the Director Number of Meetings attended/
Total Meetings held during the
F.Y. 2016-17
Sri. A. Sarat Chandra Babu 5/8
Sri. A. Sri Nagaveer 8/8
Sri. Naveen Nandigam 4/8
Sri. R. V. Radhakrishna 4/8
Smt. A. Vasavi 8/8
Smt. A. Sarada 4/8

COMPOSITION OF BOARD COMMITTEES

We have in place all the Committees of the Board which are required to be constitutedunder the Companies Act 2013 SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

The Composition of various Committees of the Board is hereunder:

Audit Committee

Sri. Naveen Nandigam – Chairman
Sri. R. V. Radhakrishna – Member
Sri. A. Sri Nagaveer – Member

Nomination and Remuneration Committee

Sri. Naveen Nandigam – Chairman
Sri. R. V. Radhakrishna – Member
Smt. A. Sarada – Member

Stakeholders Relationship Committee

Sri. R. V. Radhakrishna – Chairman
Sri. Naveen Nandigam – Member
Smt. A. Vasavi – Member

BOARD EVALUATION NOMINATION AND REMUNERATION POLICY:

Based on the recommendations made by the Nomination and Remuneration Committee theCompany has had devised a Policy for performance evaluation of the Board and thecommittees as a whole and that of the Individual Directors which include criteria fordetermining qualifications positive attributes and independence of Directors.

Besides the Company also surveys on the best practices prevalent in the Industry withrespect to evaluation of the performance of the Board and its members. The Company alsoavails services of professionals seeking their suggestions on the said matter. Based onthe inputs received from the aforesaid sources and in accordance with the Policy of theCompany evaluation process is undertaken at appropriate time(s).

The performance evaluation of all the Directors and that of the Board as a whole andits committees was conducted based on the criteria and framework adopted by the board.

The Nomination and Remuneration Committee carried out independent evaluation of everyDirector's performance. The outcome of the board evaluation for the FY 2016-17 wasdiscussed by the said committee as well as by the Board. In line with effective governancerequirements the Board reviews its own performance annually using a pre-determinedtemplate designed as a tool to facilitate the evaluation process. The assessment was builtaround the functioning of the Board as a whole its Committees and also the evaluation ofIndividual Directors. The self-assessment format considered performance effectiveness withregard to Board composition expertise dynamics strategic oversight risk management andinternal control succession planning and leadership.

The Independent directors reviewed the performance of Non-Independent Directors theBoard and the Chairperson of the Company. Further the performance evaluation ofIndependent Directors was carried out by the entire Board excluding the director beingevaluated. Further feedback forms are also obtained from the Directors as an additionalsource of performance evaluation of each of the Directors. Standard parameters such asattendance acquaintance with business communication inter se Board members effectiveparticipation in Board deliberations compliance with code of conduct general thoughtprocess and inputs etc. are adopted in the process of evaluation.

None of the Independent Directors is due for reappointment.

POLICY ON DIRECTORS' APPOINTMENT REMUNERATION ETC.:

The following policies are attached herewith and marked as Annexure – III andIV respectively: a. Policy for selection of Directors and determining DirectorsIndependence; and evaluation mechanism. b. Remuneration Policy for Directors Keymanagerial Personnel and other employees.

INTERNAL FINANCIAL CONTROLS:

Your Company has an adequate system of internal financial controls with reference tofinancial statements including but not limited to safeguard and protection of assets fromloss their unauthorized use or disposition. All the transactions were properlyauthorized recorded and reported to the Management. Your Company is following all theapplicable Accounting Standards for properly maintaining the books of accounts andreporting in the financial statements. Your Company continues to ensure proper andadequate systems and procedures commensurate with its size and nature of its business.

STATUTORY AUDITORS:

As the members are aware in the 9th Annual General Meeting (AGM) held on 30.09.2016M/s. GV & Co. Chartered Accountants Hyderabad were appointed as Statutory Auditorsof the Company for a period of 5 years to hold office till the conclusion of the 14thAGM. In terms of the provisions of Section 139 of the Companies Act 2013 the appointmentof the auditors shall be placed for ratification at every AGM. Accordingly theappointment of M/s. GV & Co. Chartered Accountants as the Statutory Auditors of theCompany is placed for your ratification. In this regard the Company has received consentletter and certificate from the auditors to the effect that if they are reappointed itwould be in accordance with the provisions of Section 141 of the Companies Act 2013.

AUDITORS OBSERVATIONS:

In response to the observations made in the Auditors Report we would like to informyou that the matter pertains to the FY 2012-13 2013-14 and the same is lying pendingbefore the Commissioner of Income Tax (Appeals).

INTERNAL AUDITORS:

The Board of Directors based on the recommendation of the Audit Committee hasre-appointed M/s NSVR & Associates LLP Chartered Accountant Hyderabad (FirmRegistration No. 008801S/S200060 as the Internal Auditor of your Company. The InternalAuditor is submitting his report on half yearly basis.

SECRETARIAL AUDITORS' REPORT:

Pursuant to provisions of Section 204 of Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 we have obtained aSecretarial Audit report from Mr. Anand Kumar C. Kasat Practicing Company SecretaryHyderabad. The copy of said Report is attached herewith and marked as Annexure –V.

LOANS GUARANTEES AND INVESTMENTS:

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the respective notes to the FinancialStatements.

FIXED DEPOSITS:

Your Company has neither accepted nor repaid any deposits during the financial yearended on 31st March 2017. Further there were no outstanding deposits as at the beginningor at any time during the financial year. Hence no details are required to be providedpursuant to Rule 8 (5) (v) & (vi) of the Companies (Accounts) Rules 2014.

PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 (1) of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and as amended inrespect of our employees is attached herewith and marked as Annexure –VI (i).

We do hereby affirm that the remuneration paid is as per the Remuneration Policy forDirectors Key Managerial Personnel and other Employees.

Further we do not have any employee whose remuneration falls within the purview of thelimits prescribed under the provisions of Section 197 of the Companies Act 2013 readwith Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 and as amended i.e. Rs.8.5 lakhs per month or Rs.1.02 Crores per annum.

Further details of top ten employees in terms of remuneration drawn during thefinancial year ended 31st March 2017 as required under Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and as amended isattached herewith and marked as Annexure - VI (ii).

RISK MANAGEMENT POLICY:

A risk management policy has been devised and adopted by the Board.

Pursuant to the said policy the Board (a) oversees and approves the Company'senterprise wide risk management framework and (b) oversees that all the risks that theorganization may face such as material procurement sale and distribution financialliquidity security legal regulatory reputational and other risks have been identifiedand assessed and ensures that there is an adequate risk management mechanism in placecapable of addressing those risks.

The policy aims at sustainable business growth with stability and to promote apro-active approach in reporting evaluating and resolving risks associated with thebusiness.

CORPORATE SOCIAL RESPONSIBILITY POLICY:

Since the Company does not fall within any of the parameters specified under theprovisions of Section 135 of the Companies Act 2013 read with Rules made thereunderreporting pursuant to Section 134(3) (o) is Not Applicable.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE INFLOW AND OUTFLOW:

The details regarding Energy Conservation Technology Absorption Foreign ExchangeInflow and Outflow as required under Section 134 (3) (m) of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014 are given in the Annexure –VII andforms part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS:

In accordance with the provisions of SEBI (LODR) Regulations 2015 a Report on theManagement Discussion and Analysis is set out in Annexure–VIII attached tothis Report.

CORPORATE GOVERNANCE:

The Company's policy on Corporate Governance is simple and forward looking. Tanvi Foodsaims at maximizing the stakeholders value legally ethically and sustainably. It alwaysseeks to ensure that the performance is driven by integrity. The board exercises itsfiduciary responsibilities in the widest sense of the term. We also endeavor to enhancelong-term shareholder value and respect minority rights in all our business decisions.

Your Company being listed on BSE SME segment the provisions as regards CorporateGovernance and related disclosures in the Annual Report are not applicable to it.

EXTRACT OF ANNUAL RETURN:

In accordance with Section 134 (3) (a) of the Companies Act 2013 an extract of theAnnual Return in the prescribed Format i.e. Form MGT -9 is appended as Annexure–IX to this Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has in place a robust and full-fledged Vigil Mechanism and a Whistle BlowerPolicy for its directors and employees to report concerns about unethical behavioractual or suspected fraud or violation of the Company's code of conduct in terms ofSection 177 (10) of the Act and Rules thereunder. The mechanism provides adequatesafeguards against victimization of persons who use this mechanism.

Mr. Naveen Nandigam Independent Director of the Company is the Head of the VigilMechanism; all the employees have direct access to report their concerns and complaints.During the year under the review no complaint has been received.

The Vigil Mechanism and Whistle Blower Policy adopted by the Company is set out in AnnexureX to this Report.

DISPATCH OF ANNUAL REPORTS

In compliance of the applicable provisions we shall dispatch the Annual Report for theFY 2016-17 in electronic format to all our members whose E-Mail addresses are registeredand updated with our Registrar & Transfer Agents. To all the other members the AnnualReport will be sent in physical format.

LISTING & TRADING

The equity shares of your Company are listed on the SME Platform of BSE Limited. Theequity shares were listed on 2nd March 2017. The listing fee for the financial year2017-18 has been duly paid. You may further note that the listing/ trading was neversuspended at any time during the financial year 2016-17.

DEMATERIALIZATION OF SHARES

Total paid up share capital of your Company is in dematerialized form as on 31st March2017

SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no orders passed by the Regulators / Courts which would impact the goingconcern status of your Company and its future operations. Further we confirm that therewere no instances of fraud to be reported by the Auditors vide their Report for the FY2016-17.

POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE:

We strongly support the rights of all our employees to work in a harassment – freeenvironment. The Company has adopted a Policy on Prevention Prohibition and Redressal ofSexual Harassment at workplace as per the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the Rules made thereunder.The policy aims to provide protection to Employees at the workplace and prevent andredress complaints of sexual harassment and for matters connected or incidental theretowith the objective of providing a safe working environment where Employees feel secure.The Company has also constituted an Internal Committee known as Anti Sexual HarassmentCommittee to address the concerns and complaints of sexual harassment and to recommendappropriate action.

We further confirm that during the year under review there were no cases filedpursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

ACKNOWLEDGEMENT:

Your Directors would like to express their profound gratitude for the assistancesupport and co-operation received from the Banks Government authorities BusinessPartners Customers and other Stakeholders for the confidence reposed in the Company.

Further your Directors also wish to place on record their sincere appreciation for thecommitted services hard work dedication and commitment of the Executives Staff andWorkers of the Company at all levels.

For and on behalf of the Board of
Tanvi Foods (INDIA) Limited
Sd/- Sd/-
Adusumilli Sri Nagaveer Adusumilli Vasavi
Managing Director Executive Director
(DIN:02589830) (DIN: 02096695)
Place: Hyderabad
Date: 21/08/2017