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Tanvi Foods (India) Ltd.

BSE: 540332 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE978V01015
BSE 00:00 | 12 Feb 39.00 0






NSE 05:30 | 01 Jan Tanvi Foods (India) Ltd
OPEN 41.00
VOLUME 56000
52-Week high 55.00
52-Week low 36.45
P/E 11.64
Mkt Cap.(Rs cr) 19
Buy Price 36.50
Buy Qty 2000.00
Sell Price 40.00
Sell Qty 2000.00
OPEN 41.00
CLOSE 39.00
VOLUME 56000
52-Week high 55.00
52-Week low 36.45
P/E 11.64
Mkt Cap.(Rs cr) 19
Buy Price 36.50
Buy Qty 2000.00
Sell Price 40.00
Sell Qty 2000.00

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

Company director report

Dear Members

Your Directors take pleasure in presenting the Eleventh Annual Report on thebusiness and operations of the company together with the audited financial statementsalong with the report of the Auditors for the financial year ended March 312018.


Your Company's financial performance for the year ended March 312018 is summarizedbelow:

(Amt. in Rs.)



Particulars For the FY ended 31.03.2018 For the FY ended 31.03.2017 For the FY ended 31.03.2018 For the FY ended 31.03.2017
Revenue from Operations 628861233 559532065 659049482 594531124
Other Income 14436887 13101538 6950712 4834902
Total Revenue 643298120 572633603 666000194 599366026
Total Expenses 627943391 559041278 649356900 584847943
Exceptional Items - - -
Prior period items - - -
Profit before tax 15354729 13592325 16643294 14518083
Tax Expenses 3890826 3304849 4351396 3740173
Profit after tax 11463903 10287476 12291898 10777910
EPS 2.77 2.94 2.97 3.08



Our revenue from operations on standalone basis increased to K62.88 Crores from Rs.55.95 Crores in the previous year at a growth rate of 12%. Your Company has posted yetanother impressive year of performance. Out of the total revenue approx. 85% has beengenerated from the sale of Frozen Products of third parties.

Your Company has incurred total expenses of Rs.62.79 Crores as compared to K55.90Crores in the preceding financial year. Further during the financial year under reviewcertain fixed expenses such as depreciation & amortization expenses increased fromRs.0.95 Crores to K1.2 Crores and finance costs increased from Rs.2.3 Crores to K2.5Crores respectively as compared to the preceding financial year.

Your Company earned a Net Profit of Rs.1.14 Crores for the Financial Year ended 31stMarch 2018 as compared to Rs.1.02 Crores in the preceding financial year.

No amount is being proposed to be transferred to Reserves for the financial year ended31st March 2018.


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 herewith comprises thefinancial performance of the Company and that of the said WOS's mentioned above.

At consolidated level the revenue from operations stood at Rs. 65.90 Crores and profitbefore tax stood at Rs.1.66 crores. After providing for taxes the PAT stood at ^1.22crores.


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.


No material changes have occurred after the close of the financial year ended 31stMarch 2018.


There was no change in the nature of business of your Company during the financial yearended 31st March 2018.


With state of art facility and easing the complicated procedures in manufacturing toautomation we are coming up with 60000 sft facility with BRC standards which is 40 kmsaway from Vijayawada. Our production capacity will enhance by approx. 3 times which givesus the scope to expand to the vast Indian market and global market.

At present 90 percent of our business is in Andhra Pradesh and Telangana and a veryminimal portion in Karnataka and Tamil Nadu. From the upcoming facility we will be able tocater to the entire South India and also to export markets. Having opened our newwarehouse in Kesarpalli near Vijayawada NH-16 which enables us to cater toChennai-Calcutta and Orissa markets. Having in house warehouses and logistic facilitieswe do have an advantage of not relying on any other cold chain transporter as cold chainbeing very important part of our complete operations. We have been the pioneer inSecondary distribution being the only company having local cold chain fleet and deliversthe frozen product in temperature controlled vehicles. Being the monopoly in corn productswith an experience of about 16 years in the market we have exclusive advantage ofpenetrating into the market easier and quicker.


In view of the on-going expansion activities of the Company it needs to plough backits profits into the business. Hence the Board of Directors has not recommended anydividend for the financial year ended 31st March 2018.


Consequent upon the aforesaid preferential issue the Capital Structure as on datestands as follows:

Si. No Particulars At the end of FY ended 2018 At the end of FY ended 2017
(Amt. in Rs..) (Amt. in Rs..)
Authorised Capital
1 6500000 Equity Shares of Rs..10 each [65000000* 45000000
Issued Subscribed & Paid up Capital
2 4866775 Equity Shares of Rs..10 each 48667750** 41167750

* Increased the Authorised Capital in the Extra Ordinary General Meeting held on 10thMarch 2018

** Issued and allotted 750000 Equity Shares on Preferential Basis


During the period under review in order to scale up our operations we have introducednew products in the line of frozen foods. However owing to various limitations we arenot able to cater to the demands of the customers. The management felt that it is hightime to expand its processing capacity and create a state of the art facility which cancater to larger markets across the country. In this regard we are aggressively working onthe expansion project towards which a lot of preliminary work has been completed. At thisstage it needs the crucial financial support. In this regard your company has issued& allotted 750000 equity shares on preferential basis and 500000 convertiblewarrants to non-promoters and promoters of the company respectively. The said securitieswere issued at a price of Rs..80 per share / warrant.

The warrants will be converted into equity shares within 18 months from the date ofallotment. The equity shares to be allotted upon exercise of warrants shall rank paripassu in all respects including as to dividend with the existing Equity Shares of FaceValue of Rs.. 10/- each of the Company.

This has helped the Company reduce its dependence on borrowed funds and in turn reduceits debt burden. With the ease of availability of funds at its disposal your managementhopes the Company will be able to overcome the funding obstacles and will achieve itstargets.


The company has two wholly owned subsidiaries in India.

• Polar Cube Cold Storage Solutions Private Limited is a wholly owned subsidiaryof the company and involved in the business of cold storage warehousing and refrigeratedstore keepers etc.

• Squarepeg Distribution Services Private Limited is also a wholly ownedsubsidiary of the 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 this Report.This statement also provides the details of performance financial position of each of thesubsidiaries/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 open forinspection by any shareholder at its registered office and that of the concernedSubsidiary Companies during the office hours.

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

The company has no other joint ventures or associate companies as on till date.


During the financial year under review transactions were conducted by the Companypursuant to the Agreements entered into with its Related Parties during previous years;the same were on an arm's length basis and in the ordinary course of business. There areno materially significant related party transactions made by the Company with thePromoters Directors Key Managerial Personnel or any related party which may have apotential conflict with the interest of the Company at large.

As a matter of Company's Policy all Related Party Transactions are placed before theAudit Committee and the Board for its approval.

The details of related party transactions which were entered into during the previousyears/ current year are provided in the Note No. 33 forming part of the notes to financialstatements.

As per Section 134(3)(h) of the Companies act 2013 the particulars of related partytransactions as referred to in Section 188(1) of the Companies Act 2013 have beendisclosed in Form No. AOC-2 which is appended as Annexure -II to this Report.


The Board of Directors is duly constituted.

Following changes took place in the offices of Directors KMPs:

Mr. A. Sri Nagaveer owing to deactivation of his DIN resigned from the office ofManaging Director on 8th February 2018 and Mrs. A. Vasavi was appointed asManaging Director w.e.f from 8th February 2018 for a period of three years.

Mr. A. Sri Nagaveer was appointed as CEO of the company with effect from 15thFebruary 2018.

Mr. A. Sarat Chandra Babu retired by rotation in the previous AGM held on 28.09.2017and was reappointed thereat.

Pursuant to the provisions of Section 152 of the Companies Act 2013 and in accordancewith provisions of Articles of Association of the Company Mrs.A. Sarada retires byrotation at the ensuing AGM and being eligible offers herself for re-appointment.

The composition of the Board of Directors stands as follows:

SI.No Name of Director Designation
1 A. Sarat Chandra Babu Chairman
2 A. Vasavi Managing Director
3 A. Sarada Non-Executive Director
4 Naveen Nandigam Independent Director
5 R. V. Radhakrishna Independent Director

The Following are the Key Managerial Personnel:

SI.No Name of KMPs Designation
1 A. Sri Nagaveer Chief Executive Officer (CEO)
2 M. Srinivas Reddy Chief Financial Officer (CFO)
3 Shilpa Kotagiri Company Secretary (CS)


The Company has received respective declarations from both the 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.


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. The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively;

vi. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.


The meetings of the Board are scheduled at regular intervals to decide and discuss onbusiness performance

policies strategies and other matte Rs. of significance.

The Board duly met 5 times during the Financial Year 2017-18.The intervening gapbetween any two consecutive

Board Meetings was within the period prescribed under the provisions of the CompaniesAct 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. 2017-18
Mr. A. Sarat Chandra Babu 4/5
Mrs. A. Vasavi 5/5
Mrs. A. Sarada 4/5
Mr. Naveen Nandigam 4/5
Mr. R. V. Radhakrishna 4/5
Mr. A. Sri Nagaveer (ceased to hold the office w.e.f 8th February 2018) 3/3

The details of the date of meeting and Directors attendance are as below:

SI.No Date of Board Meetings A. Sarat Chandra Babu Naveen Nandigam R. V. Radhakrishna A. Vasavi A. Sarada A. Sri Nagaveer
1. 30.05.2017 Yes Yes Yes Yes Yes Yes
2. 21.08.2017 Yes Yes Yes Yes Yes Yes
3. 13.11.2017 No Yes No Yes No Yes
4. 08.02.2018 Yes No Yes Yes Yes NA
5. 15.03.2018 Yes Yes Yes Yes Yes NA


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.

During the year under review Mr. A. Sri Nagaveer upon cessation from his office ofManaging Director and Director as well has eventually ceased to hold his office ofcommittees membership also.

The reconstituted committees upon the aforesaid change are as detailed hereunder:

Audit Committee

Mr. Naveen Nandigam - Chairman
Mr. R. V. Radhakrishna - Member
Mr. A. Vasavi - Member

Nomination and Remuneration Committee

Mr. Naveen Nandigam - Chairman
Mr. R. V. Radhakrishna - Member
Mr. A. Sarada - Member

Stakeholders Relationship Committee

Mr. R. V. Radhakrishna - Chairman
Mr. Naveen Nandigam - Member
Mr. A. Vasavi - Member


In terms of the requirements of the Companies Act 2013 and the Listing Regulations anannual performance evaluation of the Board is undertaken where the Board formally assessesits own performance with an aim to improve the effectiveness of the Board and theCommittees.

During the year Board Evaluation cycle was completed by the Company internally whichincluded the evaluation of the Board as a whole Board Committees and peer evaluation ofdirectors. The exercise was led by the chairman of Nomination and Remuneration CommitteeCompany. The evaluation process focused on various aspects of the functioning of the Boardand Committees such as composition of the Board and its committees experience andcompetencies performance of special duties and obligations governance issues etc. as onoutcome of the exercise it was noted that the Board as a whole is functioning as cohesivebody which is well engaged with different perspectives.

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 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. Standard parameters such as attendance acquaintance with businesscommunication inter se Board members effective participation in Board deliberationscompliance with code of conduct general thought process and inputs etc. are adopted inthe process of evaluation. In particular performance evaluation was also carried out forMrs. A. Sarada who retires by rotation and being eligible for reappointment

None of the Independent Directors is due for reappointment.


The following policies are attached herewith and marked as Annexure - III and IVrespectively and are available at

a. Policy for selection of Directors and determining Directors Independence; andevaluation mechanism.

b. Remuneration Policy for Directors Key managerial Personnel and other employees.


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.


The Directors state that applicable secretarial standards i.e. SS-1 and SS-2 relatingto ‘Meeting of the Board of Directors' and ‘General Meetings' respectively havebeen duly followed by the Company.


As the members are aware in the 9th Annual General Meeting (AGM) held on30.09.2016 M/s. GV & Co. Chartered Accountants Hyderabad were appointed asStatutory Auditors of the Company for a period of 5 years to hold office till theconclusion 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. This provision has beenamended by the Companies (Audit and Auditors) Second Amendment Rules 2018 dated 7thMay 2018 which has omitted this provision of ratification of statutory auditors in everyAnnual General Meeting. Hence the appointment of M/s. GV & Co. Chartered Accountantsas the Statutory Auditors of the Company will continue till the conclusion of 14thAGM without any further ratification in every AGM.


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.


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.


Company is not required to maintain cost records as specified by the Central Governmentunder sub-section (1) of section 148 of the Companies Act 2013


During the period under review the company has made an investment of Rs..13248000by subscribing to 144000 equity shares of Rs..10 each in Kapston Facilities ManagementLimited. Further the investments made by the Company in its following wholly ownedsubsidiaries continue to remain as such during the year under review:

• Squarepeg Distribution Services (P) Ltd.

• Polar Cube Cold Storage Solutions (P) Ltd.


Your Company has neither accepted nor repaid any deposits during the financial yearended on 31st March 2018. Further there were no outstanding deposits as atthe beginning or at any time during the financial year. Hence no details are required tobe provided pursuant to Rule 8 (5) (v) & (vi) of the Companies (Accounts) Rules 2014.


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 31stMarch 2018 as required under Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and asamended is attached herewith and marked as Annexure- VI (ii).


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.


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.


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 2014are given in the Annexure -VII and forms part ofthis report.


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


The Company's policy on Corporate Governance is simple and forward looking. Tanvi Foodsaims at maximizing the stakeholder's 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.


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-IXto this Report.


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 inAnnexure X to this Report.


In compliance of the applicable provisions we shall dispatch the Annual Report for theFY 2017-18 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.


The equity shares of your Company are listed on the SME Platform of BSE Limited. Thelisting fee for the financial year 2018-19 has been duly paid. You may further note thatthe listing/ trading was never suspended at any time during the financial year 2017-18.

The company has allotted 750000 equity shares on preferential basis on 21.03.2018 andsame are listed on BSE (SME Segment).


Total paid up share capital of your Company is in dematerialized form as on 31stMarch 2018


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 FY2017-18.


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.


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
A. Sarat Chandra Babu
Place: Hyderabad
Date: 24/08/2018