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Directors Report of AVT Natural Products Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the Twenty Ninth Annual Report of the Company together with the Audited Accounts for the financial year ended March 31, 2015.

FINANCIAL RESULTS:

(Rs. In Crores)

Particulars 2014-15 2013-14

Income from Operations 256.59 271.08

Other Income 3.29 3.60

Total Income 259.88 274.68

Profit before tax for the year 44.20 76.14

Less : Provision for taxation

- Current Tax 14.20 25.10

- Deferred Tax (0.08) 0.01

Profit after tax 30.08 51.03

Add: Surplus brought forward 30.52 22.36

Total Amount available for

appropriation 60.60 73.39

LESS:

Interim Dividend (20%) paid on

equity shares 3.04 4.57

Tax on Interim Dividend 0.61 0.78

Transfer to General Reserve 30.00 30.00

Proposed Final Dividend on Equity Shares @ 30 % (Re. 0.30 per equity share on face value

of Re.1/- ) 4.57 6.85

Provision for tax on Dividends 0.93 0.67

Surplus carried Forward to balance sheet 21.45 30.52

OPERATIONS REVIEW:

Total income decreased from Rs.274.68 Crores in 2013-14 to Rs.259.88 Crores in 2014-15 - decrease of 5.39%. Profit after Tax was Rs.30.08 Crores (previous year : Rs.51.03 Crores).

With Fixed Assets of Rs.55 Crores, our Asset Turnover ratio is a healthy 4.67 with Return on Sales of 21.16%. Interest cost for the year is increased by Rs. 1.56 crore (0.98% of sales).

DIVIDEND:

Your Directors are pleased to recommend a final dividend of 30% on Equity Share Capital, for the year ended 31.03.2015, amounting to Rs 456.85 Lakhs, excluding dividend tax. 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 during the year was 50% amounting to Rs 761.42 Lakhs, excluding dividend tax.

TRANSFER TO GENERAL RESERVE

Your directors are pleased to transfer a sum of Rs.30 crore towards the General Reserve

SHARE CAPITAL

The paid up equity share capital as on 31st March 2015 was Rs.15.23 crore. During the year under review, the Company has neither issued share with differential voting rights nor granted stock options and sweat equity. The share holding of the Directors as on 31st March 2015 are given in the Corporate Governance report.

FINANCE

Cash and cash equivalents as at 31st March 2015 was Rs.1027.76 lakhs. The Company continues to focus on judicious management of its working capital, receivables, inventories and other working capital parameters and which were kept under strict check through continuous monitoring.

WIND MILL

The wind mill of the Company located at Kokkampalayam village, Dharapuram Taluk, Erode District, Tamil Nadu generated 8,01,130 units of electricity in the year 2014- 15 against 9,29,100 units generated in 2013-14. The Company had utilised the entire units generated as captive consumption during 2014-15.

BOARD MEETING

The Board consists of Mr. Ajit Thomas, Chairman, Mr. M.A. Alagappan, Independent Director, Mr. P. Shankar, Independent Director, Mr. Habib Hussain, Non-Executive Director, Mrs. Shanthi Thomas, Additional ( Non-Executive Director), Mr. Shyam B.Ghia, Independent Director (up to 19.3.2015) and Mr. M.S.A. Kumar, Managing Director (up to 31.3.2015)

The Board of Directors met five times during this financial year. The details of the Board meeting are given in the Corporate Governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

AUDIT COMMITTEE MEETING

The Audit Committee consists of Mr. M.A. Alagappan, Chairman, Mr. P. Shankar, Member, Mr. Habib Hussain, Member, Mr. Shyam B. Ghia, Member (up to 19.3.2015).

The Audit Committee of the Company met five times during

this financial year. The details of the Audit Committee meetings are given in the Corporate Governance report.

PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTS:

The Company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013 except the 'Corporate Guarantee' & 'Stand by Letter of Credit' given on behalf of AVT Tea Services Ltd., London, which is given in the notes No. 28 to the financial statements.

The details of investments made by the Company are given in the notes No. 12 & 14 to the financial statements.

LISTING WITH STOCK EXCHANGES:

The equity shares of the Company are continued to be listed in Bombay Stock Exchange Ltd., (BSE) and the National Stock Exchange of India Ltd., (NSE). The Company confirms that it has paid the annual listing fees for the year 2014-15 to both the stock exchanges.

During the year, the equity shares of the Company were delisted from the Madras Stock Exchange (MSE) with effect from 25th September 2014 by complying with the provisions of SEBI (Delisting of equity shares) Regulations 2009.

FIXED DEPOSITS:

The Company stopped accepting / renewing deposits with effect from 30th July 2012. As per the Companies Act 2013, the deposits accepted prior to the commencement of the Act, was required to be repaid within one year from the commencement of the Act. Accordingly, the Company has repaid the entire outstanding fixed and cumulative deposits to the deposit holders and there are no unclaimed deposits in the books of accounts of the Company as on 31st March 2015.

DSIR APPROVAL FOR IN-HOUSE R&D FACILITY AT BANGALORE

Department of Scientific and Industrial Research (DSIR), New Delhi, has accorded its approval for the In-house research and development facility of the Company located at Bangalore. This is in addition to the earlier approval of In- house R&D facility of South Vazhakulam, Aluva, Kerala.

DIRECTORS & KEY MANAGERIAL PERSONNEL:

i) Director retiring by rotation

In accordance with the provisions of Companies Act, 2013 and the Articles of Association of the Company, Mr. Habib Hussain, Director retires by rotation at the 29th Annual General Meeting and being eligible, offers himself for re-appointment.

ii) Woman Director

Mrs. Shanthi Thomas was appointed as an Additional Director with effect from 21st March 2015. Her appointment requires the approval of the members

at the ensuing Annual General Meeting. A notice has been received from one of the shareholders pursuant to section 160 of Companies Act, 2013 proposing her candidature, along with the prescribed fees. The necessary resolution for her appointment is being placed before the share holders for approval.

iii) Resignation of Directors

Mr. M.S.A. Kumar, Managing Director of the Company Resigned due to personal reasons, with effect from 31st March 2015 and he was relieved from the service of the Company on the said date.

Further, Mr. Shyam B. Ghia, Independent Director resigned from the Board with effect from 19th March 2015 due to personal reasons.

iv) Declaration from Independent Directors on Annual Basis

The Company has received necessary declaration from the Independent Directors of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6).

v) Key Managerial Personnel

The Board in its meeting held on 30.05.2014 appointed Mr. M.S.A. Kumar, Managing Director, Mr. A. Ramadas, Sr. Vice President & CFO and Mr. Dileepraj. P, Company Secretary as the Key Managerial personnel of the Company. Mr. M.S.A. Kumar resigned with effect from 31.03.2015. Mr. M.N. Satheesh Kumar, President & COO has been appointed as 'Manager' and is the Key Managerial Personnel from 01.04.2015

vi) Appointment of Independent Director

The Board in its meeting held on 29.05.2015 has appointed Mr. A.D. Bopana as the Independent Director of the Company for a period of 5 years. Necessary resolution is being placed before the members for their approval.

vii) Appointment of 'Manager'

The Board in its meeting held on 29.05.2015 has appointed Mr. M.N. Satheesh Kumar, President & COO as the 'Manager' under section 203 (1) of the Companies Act 2013 for a period of 2 years w.e.f. 01.04.2015. Necessary resolution is being placed before the members for their approval.

PERFORMANCE OF SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANIES:

a) AVT Tea Services Ltd., London, UK (AVT TSL):

The present authorized share capital of the Company is Pound Sterling (GBP) 1.00 million (Rs.10 Crores

approx.). The paid up capital of the Company as on 31st March 2015 is Pound Sterling (GBP) 6.19 million (Rs 6.20 Crores approx.). AVT TSL is the marketing arm of your Company for de-caffeinated tea and instant tea. The AVT TSL recorded sales of Rs.43.14 Crores and loss of Rs.2.35 crores for the year 2014-15

b) AVT Tea Services North America, LLC., step down subsidiary

During the year AVT Tea Services Ltd., United Kingdom incorporated AVT Tea Services North America, LLC, under the laws of the State of Florida as its wholly owned subsidiary Company.

c) AVT Natural Pte. Ltd., Singapore :

The subsidiary performance includes the liquidation loss of Rs. 1.26 crores of its chinese subsidiary Company from November 2013 to January 2014.

d) Closure of AVT Natural Pte. Ltd., Singapore:

During the year the Company had decided to close down its wholly owned subsidiary M/s AVT Natural Pte Ltd, Singapore as it had become non operational due to closing down of its Chinese Subsidiary in line with changed global market conditions.

Liquidation of the Company is in progress.

e) Accounts of Subsidiaries:

Pursuant to Section 136 (1) (b) of the Companies Act, 2013, a copy of the audited financial statements of AVT Tea Services Ltd., London for the period ended 31.03.2015 & AVT Natural Pte. Ltd., Singapore, for the period ended 15.12.2014, the overseas subsidiaries of your Company shall be furnished to any shareholder on demand. The Consolidated financial statements audited by the statutory auditors of the Company have been attached to this Report.

f) 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, read with Rule 8 of the Companies (Accounts) Rules, 2014 relating to Conservation of Energy, Technology Absorption, Foreign Exchange earnings and outgo are furnished in the Annexure-I to this Report.

AUDITORS:

M/s. Suri & Co., Chartered Accountants, Chennai - 600017,

(Firm's Registration No. 004283S) are the Statutory Auditors of the Company.

As per Section 139 of the Companies Act 2013, their appointment needs to be ratified by the share holders in every Annual General Meeting. Yours directors recommends ratifying their appointment at the forthcoming AGM.

AUDITORS' REPORT

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 needs no further clarification.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to the provisions of Section 135 of the Companies Act 2013, CSR Committee of the 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 CSR Policy for consideration and approval by the Board of Directors.

Annual Report on CSR in the prescribed format is enclosed as Annexure - II. The CSR policy of the Company has been already uploaded in the web site: http://avtnatural. com/policy.html

Contents of CSR policy

The CSR policy of the Company was approved by the Board of Directors on 28.01.2015.

The Company's commitment to CSR projects and programs will be the focus on holistic development of host communities and create social, environmental and economic value to the society.

To Company's commitment to CSR projects and programs will be by investing resources into any of the following areas:

a) Development of Skilling 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

SECRETARIAL AUDIT:

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 has appointed Mr. V. Suresh, Practising Company Secretary (C.P No.6032), Chennai to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure — III and forms an integral part of this Report.

There is no secretarial audit qualification for the year under review.

INTERNAL AUDITORS

During the year under review, M/s. PKF Sridhar & Santhanam, Chartered Accountants, Chennai carried out the internal audit exercise of the Company and submitted their reports.

COST AUDIT REPORT

Cost Audit is not applicable to the Company as per the Companies ( Records & Audit) Rules 2014.

INSURANCE:

The Company continues to carry adequate insurance for all assets against unforeseeable perils.

RELATED PARTY TRANSACTIONS:

All transactions entered with related parties for the year under review were at arm's length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. No Material Related Party transactions i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party transactions to be provided under section 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 review with the Promoters, Directors or Key Managerial Personnel or other designated persons which 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 the Board. Prior omnibus approval of the Audit Committee is obtained on yearly / quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted has been placed before the Audit Committee 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 been uploaded on the website of the Company and the website link is http://avtnatural. com/policy.html

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS.

There are no significant material orders passed by the Regulators/ Courts which would impact 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 is enclosed herewith as 'Annexure - IV'.

STATUTORY INFORMATION:

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 in respect 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 with rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of the Company have been given in the Annexure - VI.

INDUSTRIAL RELATIONS

During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels

NOMINATION & REMUNERATION POLICY

The Board on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Managerial Personnel, Key Managerial Personnel and their remuneration etc.

Contents of Nomination & Remuneration Policy

The details of the contents of Nomination & Remuneration policy of the Company is provided in the Corporate Governance Report, forming part of the Directors Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has a Vigil Mechanism / Whistle Blower Policy in place pursuant to Section 177 (9) of the Companies Act 2013 and as per clause 49 of the listing agreement. The said policy is available in the website of the Company which can be accessed from the link - http://avtnatural. com/policy.html

RISK MANAGEMENT:

Pursuant to Section 134 (3) (n) of the Companies Act, 2013 and the clause 49 of the listing agreement, the Company had laid down the procedures to inform Board members about the risk assessment and mitigation procedures.

Mr. A. Ramadas, Sr. Vice President & CFO has been assigned the task of informing the Board about the various risks and its mitigation by the Company from time to time.

At present the Company has not identified any element of risk which may threaten the existence of the Company.

INTERNAL CONTROL SYSTEMS

The details of the internal control systems adopted by the Company are provided in the Management Discussion and Analysis Report, forming part of the Directors Report.

ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances environmental regulations and preservation of natural resources.

BOARD EVALUATION

The performance of Board, its Committee and individual directors are evaluated by number of meetings held, time spent in each meeting deliberating the issues, statutory compliance, contribution of each director, the details of decision taken and measures adopted in implementing the decision and monitoring the continuous implementation of the decision and feed back to the Board.

DISCLOSURE OF ACCOUNTING TREATMENT

In the preparation of the financial statements, the Company has followed the Accounting Standards referred to in Section 133 of the Companies Act, 2013. The significant accounting policies which are consistently applied are set out in the Notes to the Financial Statements.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, the Management Discussion & Analysis Report, Report on Corporate Governance with Auditors' Certificate on compliance with conditions of Corporate Governance have been annexed VII & VIII to this Report.

DISCLOSURE 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 Act and that an Internal Complaints Committee has been set up for redressal of complaints and that all employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year the Company has not received any complaint under Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013

CAUTIONARY STATEMENT

Statements in this Directors' Report & Management Discussion and Analysis Report describing the Company's objectives, projections, estimates, expectations or predictions may be 'forward looking statements' within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company's operations include raw material availability and its prices, cyclical demand and pricing in the Company's principle markets, changes in Government regulations, Tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134 (3) (c) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

1. In the preparation of the accounts for the financial year ended 31st March 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures;

2. The Directors have 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 of the Company for that period;

3. 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;

4. The Directors have prepared the accounts for the financial year ended 31st March 2015 on a 'going concern' basis.

5. The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

6. The directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ACKNOWLEDGEMENT:

The Directors sincerely acknowledge the contribution and

support from customers, shareholders, farmers, Central and State governments, bankers, Securities Exchange Board of India, Bombay Stock Exchange Ltd, National Stock Exchange of India Ltd., Cameo Corporate Services Ltd., National Securities Depository Ltd., Central Depository Services Ltd., Registrar of Companies, Tamil Nadu and other government authorities for the co-operation and assistance provided to the Company.

The Directors also place on record their gratitude to the employees for their continued support, commitment, dedication and co-operation.

For and On behalf of the Board

Place : Chennai Ajit Thomas Date : 22nd July 2015 Chairman


Mar 31, 2013

The Directors are pleased to present the Twenty Seventh Annual Report of the company together with the Audited Accounts for the financial year ended March 31, 2013.

FINANCIAL RESULTS:

The standalone performance of the Company for the financial year ended March 31, 2013 is summarized below:

(Rs. In Crores)

Particulars 2012-13 2011-12

Income from Operations 255.95 218.35

Other Income 0.11 0.56

Total Income 256.06 218.91

Profit before tax for the year 75.70 75.16

Less : Provision for taxation

- Current Tax 25.00 24.70

- Deferred Tax 0.13 0.04

Profit after tax 50.57 50.42

Add: Surplus brought forward 12.90 3.55

Total Amount available for

appropriation 63.47 53.97

Less:

Special Dividend (25%) on the occasion of silver jubilee of the

Company on Equity Shares 1.90

Interim Dividend (50%) paid on equity shares 3.81 3.81

Tax on Special Dividend 0.31

Tax on Interim Dividend 0.62 0.62

Transfer to General Reserve 30.00 30.00

Proposed Final Dividend on Equity Shares @ 75% (Re.0.75 per equity share on face value of Re.l/-) 5.71 3.81

Provision for tax on Dividends 0.97 0.62

Surplus carried Forward 22.36 12.90

OPERATIONS REVIEW:

Increased volumes of Marigold Food Grade Oleoresin (used in Eye Health segment), Spice Oils & Oleoresins (used in Food flavoring & coloring) and Decaffeinated Teas contributed to 17% increase in sales from Rs.219 Crores in 2011-12 to Rs.256 Crores in 2012-13. However Profit After Tax was flat at Rs. 50.57 Crores due to softening of Marigold Feed Grade Oleoresin (used for Poultry Pigmentation) prices in the global market (thanks to over production in China). After registering a five fold increase in Profit after Tax during

2011-12 (from Rs.10.81 Crores in 2010-11 to Rs.50.42 Crores in 2011-12), your company did well by maintaining Profit after Tax at the same level as last year. 2012 crop of Marigold was a record high due to a very favourable monsoon in growing areas.

Despite 17% increase in sales, working capital borrowing has come down from Rs.25.79 Crores as of 31st March 2012 to Rs.23.49 Crores as of 31st March 2013. Term loan outstanding as of 31st March 2013 is Rs.1.49 Crores which will be repaid during 2013/14. Thus it will be our endeavor to make your company a "Zero Debt" organization by 31st March 2014.

AWARDS:

Your company won three awards during the year under review: A FORBES ASIA UNDER A BILLION $ AWARD:

Your Company has been recognized by Forbes as one among 200 best companies from Asia-Pacific region under $ 1 billion revenue. The list published on August

18, 2012 is based on the financial data of the preceding 12 months. Those companies in Asia Pacific with sales of over US$ 5 Million and below US$ 1 Billion which are publicly traded with a positive net income are first short listed. Your company is one among 23 companies from India to find a place in this esteemed list of Asia''s Best 200. The list recognizes the importance of small and medium enterprises in powering the Asia-Pacific economy.

B. EXCELLENCE IN SPICES EXPORT AWARD:

Your company was selected for the "Certificate of Merit" by the Spices Board in recognition of our outstanding performance in the export of spices / spice products during the year 2010-11.

C. POLLUTION CONTROL BOARD AWARD - 2011:

Your Company''s plant at Cochin was awarded "Certificate of Merit" by Kerala State Pollution Control Board for securing second position among medium scale industries in making substantial and sustained effort towards pollution control in the year 2011.

DIVIDEND:

Your Directors are pleased to recommend a final dividend of 75% on Equity Share Capital, for the year ended 31.03.2013, amounting to Rs.571 Lakhs, excluding dividend tax.

During the year, the Board declared an Interim Dividend of

50 %, amounting to Rs.381 Lakhs, excluding dividend tax. The aggregate of dividend declared during the year was 125 % amounting to Rs. 952 Lakhs, excluding dividend tax. Thus for 2012/13, we have maintained same dividend of 125% as that of the last year.

SUBSIDIARY COMPANIES:

The company has the following subsidiaries:

AVT Natural Pte. Ltd., Singapore with its step down subsidiary, Heilongjiang AVT Bio-Products Limited, China:

The subsidiary recorded sales of Rs.10.82 Crores in 2012 as against the sales of Rs.25.66 Crores in 2011, showing a decline of 58%. The reduction in sales is on account of lower production and sales of Marigold Oleoresin (Feed Grade) and very low prices compared to 2011. The subsidiary companies incurred a loss of Rs.2.09 Crores in the period ended December 2012 as against a profit of Rs. 4.36 Crores during the same period last year.

AVT Tea Services Ltd., London, UK (AVT TSL):

During the year your company had set up this wholly owned subsidiary with an authorized capital of Pound Sterling (GBP)

0.50 million (approx. Rs.440 Lakhs) and the Company started functioning with effect from 13th August 2012. AVT TSL will be the global marketing arm of your company for de-caffeinated tea and instant tea. This would further strengthen the Company''s position in the Global Value Added Beverages market. AVT TSL commenced its operations during the year and recorded a sale of Rs.0.22 Crores as on

31.12.2012 and recorded a loss of Rs.0.68 Crores on account of administrative overheads.

ACCOUNTS OF SUBSIDIARIES:

Pursuant to Section 212 of the Companies Act, 1956, the Balance Sheet, Statement of Profit & Ix-ss, Director''s Report and the Auditor''s Report for the period ended 31st December 2012 for AVT Tea Services Ltd., London, an overseas subsidiary, AVT Natural Pte. Ltd., Singapore, another overseas subsidiary of your Company and its Chinese Subsidiary, Heilongjiang AVT Bio-Products Ltd., have been kept at the Registered Office of your Company for inspection by shareholders. The Company shall furnish a hard copy of the accounts to any shareholder on demand. The Consolidated financial statements audited by the statutory auditors of the Company have been attached to this Report.

FIXED DEPOSITS:

The Company had stopped accepting / renewing deposit with effect from 30th July 2012. As on 31.03.2013, a total sum of Rs.0.46 Lakh due to 3 fixed deposit holders remained unclaimed. The entire unclaimed deposits were repaid subsequendy. All matured deposits shall be paid on its maturity.

DIRECTORS:

In accordance with the provisions of Companies Act, 1956 and the Articles of Association of the Company, Mr. M.A. Alagappan, Director and Mr. Shyam B. Ghia, Director, retire by rotation at the 27 th Annual General Meeting and being eligible, offer them for re-appointment.

RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, ENERGY CONSERVATION:

The particulars prescribed by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 relating to Conservation of Energy, Technology Absorption, Foreign Exchange are furnished in the Annexure-I to this Report.

PARTICULARS OF EMPLOYEES:

Particulars of employees in terms of the requirement of Section 217 (2A) of Companies Act, 1956 have been given in the Annexure II forming part of this Report.

AUDITORS:

M/s. Suri & Co., Chartered Accountants, Chennai - 600 017, Auditors of die Company retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. They have confirmed that their re-appointment, if made, will be within the limits specified under Section 224 (1-B) of the Companies Act, 1956.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement widt the Stock Exchanges, the Management Discussion & Analysis Report, Report on Corporate Governance with Auditors'' Certificate on compliance with conditions of Corporate Governance have been annexed to this Report.

INSURANCE:

The Company continues to carry adequate insurance for all assets against foreseeable perils.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

1. That in the preparation of the accounts for the financial year ended 31st March 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. That the Directors have selected such accounting policies and applied them consistendy 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 of the Company for the year under review;

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the Directors have prepared the accounts for the financial year ended 31st March 2013 on a ''going concern'' basis.

ACKNOWLEDGEMENT:

Your Directors take this opportunity to thank and wish to place on record their sincere dianks and the appreciation for the continued co-operation and support extended to the Company by all die stake holders including share holders, depositors, customers, farmers, bankers, suppliers, stock exchanges etc.,

The Directors also wish to place on record their appreciation for the contribution, support and continued co-operation extended by the employees throughout the year.

For and On behalf of the Board

Place : Chennai Ajit Thomas

Date : 30th May, 2013 Chairman


Mar 31, 2012

The Directors are pleased to present the Twenty Sixth Annual Report Of your Company together with the Audited Accounts for the financial year ended March 31, 2012.

FINANCIAL RESULTS:

The standalone performance of the Company for the financial year ended March 31, 2012 is summarized below:

(Rs. In Crores)

Particulars 2011-12 2010-11

Income from Operations 218.19 138.90

Other Income 0.56 0.15

Total Income 218.75 139.05

Profit before tax for the year 75.16 16.45

Less : Provision for taxation

- Current Tax 24.70 5.70

- Deferred Tax 0.04 (0.06)

Profit after tax 50.42 10.81

Add: Surplus brought forward 3.55 3.17

Total Amount available for appropriation 53.97 13.98

Less:

Special Dividend (25%) on the occasion of silver jubilee of the Company and Interim Dividend (50%) paid on Equity Shares To talling to 75% (Rs. 7.50 per equity share) 5.71 -

Tax on Interim Dividend 0.93 -

Transfer to General Reserve 30.00 6.00

Proposed Final Dividend on Equity Shares @ 50 % (Rs.5/- * per equity share on face value of Rs.10/- ) 3.81 3.81

Provision for tax on Dividends 0.62 0.62

Surplus carried Forward 12.90 3.55

* post split dividend per share shall be in proportion to sub-divided share.

OPERATIONS REVIEW:

Your company had an exceptional year in 2011-12. All three business units of Marigold, Spice Oils & Oleoresins and Value Added Beverages did exceptionally well beating all expectations.

- Sales grew by 57% from Rs. 138.90 Crores to Rs. 218.19 Crores.

- With the major benefit of doubled sales and prices in our key product of Marigold Oleoresins, Profit after Tax grew by 5 times from Rs. 10.81 Crores in 2010-11 to Rs. 50.42 Crores in 2011-12.

- Marigold Oleoresin sales value almost doubled from previous year (93% growth) with higher price realization for both Feed grade for Poultry usage and Food grade for human consumption. The average price doubled during the year due to global shortages arising from failed China crop.

- Favourable weather conditions supported by an excellent and timely Monsoon in Marigold growing areas in South India enabled your company to register record flower output.

- Spice Oils and Oleoresins sales registered a healthy growth of 39%.

- Earnings Per Share (EPS) jumped to Rs. 66.21 in 2011-12 from Rs. 14.20 in 2010-11.

The detailed Operational Performance of the Company including future prospects has been comprehensively discussed in the Management Discussion and Analysis Report which forms part of this Report.

DIVIDEND:

Your Directors are pleased to recommend a final dividend of 50% on Equity Share Capital, for the year ended 31.03.2012, amounting to Rs.380.71 lakh, excluding dividend tax.

During the year, the Board declared a special dividend of 25% on the occasion of the Silver Jubilee of the Company amounting to Rs. 190.36 lakh, excluding dividend tax. Further, in the month of March 2012, the Board declared an Interim Dividend of 50 %, amounting to Rs.380.71 lakh, excluding dividend tax. The aggregate of dividend declared during the year was 125 % amounting to Rs. 951.78 lakh, excluding dividend tax.

QUALITY, HEALTH, SAFETY AND ENVIRONMENT:

With the continued thrust of the Company in this critical area, your company is taking care of the triple bottom line concept People, Planet and Profit.

RECOGNITION OF IN HOUSE R&D UNIT:

The Department of Scientific & Industrial Research, Technology Bhavan, Under Ministry of Science & Technology has renewed its recognition to the in-House R&D facility of your company located at South Vazhakulam, Marampilly Post, Aluva, Kerala, for a further period of 4 years, from 1st April 2012 to 31st March 2016.

WIND MILL:

The wind mill of the company located at Kokkampalayam Village, Dharapuram Taluk, Erode District, Tamil Nadu generated 11,11,500 units in the year 2011-12 against 12,05,325 units generated last year. Out of the same, the Company had captive consumption of 9,98,984 units and the balance is being sold to the TNEB.

FIXED DEPOSITS:

As on 31.03.2012, a total sum of Rs. 10.05 Lakh due to 9 fixed deposit holders remained unclaimed. Out of this, deposits for a sum of Rs. 3 Lakh were renewed / repaid subsequently.

However, the Company had decided to stop accepting / renewing deposit with effect from 30th July 2012. All matured deposits shall be paid on its maturity.

SUB-DIVISION OF EQUITY SHARES:

In order to improve the liquidity, the equity shares of the Company have been sub-divided from face value of Rs.10/- to face value of Re.1/- each and consequently the authorized equity share capital is 7,99,00,000 equity shares of Re.1/- each.

PERFORMANCE OF SUBSIDIARIES:

AVT Natural Pte. Ltd., Singapore together with its subsidiary, Heilongjiang AVT Bio-Products Limited, China did very well in 2011 due to favorable Marigold market conditions. The subsidiary recorded sales of Rs.25.66 Crores in 2011 as against the sales of Rs.8.61 Crores in 2010 - growth of 3 times. Thanks to the good prices of Marigold Oleoresins, the subsidiary companies earned a record profit of Rs. 4.36 Crores in the period ended December 2011 as against a profit of Rs. 0.30 Crores during the same period last year.

ACCOUNTS OF SUBSIDIARIES:

Pursuant to section 212 of the Companies Act, 1956, the Balance Sheet, Profit & Loss Account, Director's Report and the Auditor's Report for the period ended 31st December 2011 for AVT Natural Pte. Ltd., Singapore, an overseas subsidiary of your Company and its Chinese Subsidiary, Heilongjiang AVT Bio-Products Limited, have been kept at the Registered Office of your Company for inspection by shareholders. The company shall furnish a hard copy of the accounts to any shareholder on demand. The Consolidated financial statements audited by the Statutory auditors of the Company have been attached to this Report.

DIRECTORS:

In accordance with the provisions of Companies Act, 1956 and the Articles of Association of the Company, Mr. Ajit Thomas, Chairman and Mr. P. Shankar, Director, retire by rotation at the 26th Annual General Meeting and being eligible, offer themselves for re-appointment.

RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, ENERGY CONSERVATION:

The particulars prescribed by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 relating to Conservation of Energy, Technology Absorption, Foreign Exchange are furnished in the Annexure-I to this Report.

PARTICULARS OF EMPLOYEES:

Particulars of employees in terms of the requirement of section 217 (2A) of Companies Act, 1956 have been given in the Annexure II forming part of this Report.

AUDITORS:

M/s. Suri & Co., Chartered Accountants, Chennai 600 017, Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. They have confirmed that their re-appointment, if made, will be within the limits specified under Section 224 (1-B) of the Companies Act, 1956.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, the Management Discussion & Analysis Report, Report on Corporate Governance with Auditors' Certificate on compliance with conditions of Corporate Governance have been annexed to this Report.

INSURANCE:

The Company continues to carry adequate insurance for all assets against foreseeable perils.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

1. That in the preparation of the accounts for the financial year ended 31st March 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. That the Directors have 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 of the Company for the year under review;

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the Directors have prepared the accounts for the financial year ended 31st March 2012 on a going concern' basis.

ACKNOWLEDGEMENT:

Your Directors wish to express their sincere thanks and place on record the appreciation for the continued co-operation and support extended by the share holders, depositors, customers, farmers, bankers namely State Bank of India, Bank of Baroda, The South Indian Bank, CITI Bank, suppliers, stock exchanges and other stake holders for their continued support to the Company.

The Directors also wish to thank all the employees for their contribution, support and continued co-operation throughout the year.

For and On behalf of the Board Place : Chennai Ajit Thomas

Date: 30th May, 2012 Chairman


Mar 31, 2011

Dear Members,

The Directors are pleased to present the Twenty Fifth Annual Report of your Company together with the Audited Accounts for the financial year ended 31st March 2011.

FINANCIAL RESULTS:

The standalone performance of the Company for the financial year ended 31st March 2011 is summarized below:

(Rs. In lakhs)

Particulars 2010-11 2009-10

Income from Operations 13890.37 8312.60

Other Income 14.58 35.10

Total Income 13904.95 8347.70

Profit before tax for the year 1644.88 1011.96

Less : Provision for taxation

- Current Tax 570.00 320.00

- Deferred Tax (6.60) 40.00

Profit after tax 1081.48 651.96

Add: Surplus brought forward 315.57 329.98

Total Amount available for appropriation 1397.06 981.94

Less:

Transfer to General Reserve 600.00 400.00

Proposed Dividend on Equity Shares @ 50 % 380.71 228.43 (Rs.5 per equity share)

Provision for tax on Dividends 61.76 37.94

Surplus carried Forward 354.58 315.57

OPERATIONS REVIEW:

Your Company has scaled new heights during the year under review. The key aspects of your Company's performance during the financial year 2010-11 are as follows:

- Sales of key product in the company's portfolio - Marigold Oleoresin - jumped by 52% during 2010-11.

- Turnover increased by 67% from Rs. 83.13 Crores in 2009-10 to Rs. 138.90 Crores in 2010-11.

- Profit After Tax increased by 66% from Rs. 6.52 Crores in 2009-10 to Rs. 10.81 Crores in 2010-11.

- Earnings Per Share (EPS) for the year increased by 66% from Rs. 8.56 in 2009-10 to Rs. 14.20 in 2010-11.

The detailed Operational Performance of the Company has been comprehensively discussed in the Management Discussion and Analysis Report which forms part of Directors' Report.

DIVIDEND:

The outstanding performance of the Company has enabled Directors to recommend a dividend of 50% (Rs.5 per equity share) on 76,14,200 Equity shares of Rs. 10 each for the year ended 31.3.2011.

PERFORMANCE OF SUBSIDIARY COMPANY:

AVT Natural Pte. Ltd., Singapore together with its subsidiary, Heilongjiang AVT Bio-Products Limited, China has recorded sales of Rs. 8.61 Crores and profit of Rs. 29.59 Lakhs in the period ended December 2010 against the sales of Rs.7.15 Crores and a profit of Rs. 20.41 Lakhs during the period ended December 2009. We expect an improved performance in sales and profits of the subsidiary company in 2011 from our Chinese operation due to increase in growing areas, higher flower output and better Marigold Oleoresin prices.

ACCOUNTS OF SUBSIDIARY COMPANY:

Pursuant to Section 212 of the Companies Act, 1956, the Balance Sheet, Profit & Loss Account, Director's Report and the Auditors Report for the period ended 31st December 2010 of AVT Natural Pte. Ltd., Singapore, overseas subsidiary of your company and its Chinese Subsidiary, Heilongjiang AVT Bio-Products Limited, have been kept at the Registered Office of your company for inspection by any share holder. The company shall furnish a hard copy of the accounts to any share holder on demand. The Consolidated financial statements audited by the Statutory auditors of the company have been attached to this Report.

QUALITY, HEALTH, SAFETY AND ENVIRONMENT:

At AVT Natural Products Limited (AVT NPL), Quality, Health, Safety and Environmental (QHSE) responsibilities are integral. AVT NPL has acquired International Standards ISO 9001:2008, ISO 22000 for HACCP and Kosher Certification by Circle U. As a part of its objective to improve quality, health, safety and environment in the work place and developing an Integrated Management System (IMS), we are currently working on ISO 14000:2004 for Environment, PAS 220 for GMP Certification and OHSAS 18001:2007. We are also preparing an "On Site Emergency Plan" for augmenting Plant Safety Standards.

FIXED DEPOSITS:

As on 31.03.2011, a total sum of Rs. 8.92 Lakhs due to 14 fixed deposit holders remained unclaimed. Out of this, deposits for a sum of Rs. 7.98 Lakhs were renewed / repaid subsequently.

RECOGNITION OF IN HOUSE R&D UNIT:

The Department of Scientific & Industrial Research, Technology Bhavan, Under Ministry of Science & Technology has accorded its recognition to the in-House, R&D facility of your company located at South Vazhakulam, Marampilly Post, Aluva, Kerala, which is valid up to the period ending 31st March 2012, will be renewed thereafter.

AWARDS AND ACCREDITATIONS:

During the year under review, your Company had won the "Second Prize" amongst Large Scale Industries of Kerala for 2009/10 instituted by the Kerala State Pollution Control Board. AVT Natural is winning this award second year in a row.

SHIFTING OF THE REGISTERED OFFICE OF THE COMPANY:

Pursuant to the resolution passed by the Board of Directors of the company at its meeting held on 29th April 2011, the registered office of the company has been shifted with effect from 12th May 2011 from No. 64, Rukmani Lakshmipathy Salai, Egmore, Chennai - 600 008, to No. 60, Rukmani Lakshmipathy Salai, Egmore, Chennai - 600 008.

WIND MILL:

The Company has set up a windmill project 600 KW WTG, Kokkampalayam Village, Dharapuram Taluk, Erode District, Tamil Nadu. The wind mill has started its commercial operation with effect from 27 September 2008. The wind mill generated 12,05,325 units in the year 2010-11 against 13,94,064 units in generated the year 2009-10. This output is as per our projections.

DIRECTORS:

In accordance with the provisions of Companies Act, 1956 and the Articles of Association of the Company Mr. Shyam B. Ghia, Director and Mr. Habib Hussain, Director, retire by rotation at this Annual General Meeting and being eligible, offer themselves for re-appointment.

RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, ENERGY CONSERVATION:

The particulars prescribed by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 relating to Conservation of Energy, Technology Absorption, Foreign Exchange are furnished in the Annexure-I to this Report.

PARTICULARS OF EMPLOYEES:

None of the employees of the Company is coming under the purview of Section 217(2A) of the Companies Act, 1956. Details of managerial remuneration under section 198 of the Act are furnished under the Note No. 9 (a) of Schedule 19 forming part of the Accounts.

AUDITORS:

M/s. Suri & Co., Chartered Accountants, Chennai 600 017, Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. They have confirmed that their re-appointment, if made, will be within the limits specified under Section 224 (1-B) of the Companies Act, 1956.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, the Management Discussion & Analysis Report, Report on Corporate Governance with Auditors' Certificate on compliance with conditions of Corporate Governance have been annexed to this Report.

INSURANCE:

The Company continues to carry adequate insurance for all assets against foreseeable perils.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

1. That in the preparation of the accounts for the financial year ended 31st March 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. That the Directors have selected such accounting policies and applied them consistendy 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 of the Company for the year under review;

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the Directors have prepared the accounts for the financial year ended 31st March 2011 on a 'going concern' basis.

ACKNOWLEDGEMENT:

Your Directors wish to express their sincere thanks and place on record their appreciation for the continued co-operation and support extended by the share holders, depositors, customers, farmers, bankers namely State Bank of India, Bank of Baroda, The South Indian Bank, CITI Bank, suppliers, stock exchanges and other stake holders.

The Directors also wish to express their appreciation and to thank all the employees for their contribution, support and continued cooperation throughout the year.

For and On behalf of the Board

Ajit Thomas Chairman Place : Chennai Date : 22nd July 2011


Mar 31, 2010

The Directors have pleasure in presenting their Twenty Fourth Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2010.

FINANCIAL RESULTS

(Rs. In lakhs) 2009-10 2008-09

Turn Over 8297.33 8745.42

Other Income 35.09 51.88

Total Income 8332.42 8797.30

Profit before tax for the year 1011.96 1135.23

Less : Provision for taxation

- Current Tax 320.00 320.00

- Deferred Tax 40.00 101.20

- Fringe Benefit Tax Nil 12.00

Profit after tax 651.96 702.03

Add: Surplus brought forward 329.98 395.20 Total Amount available for

appropriation 981.94 1097.23

Less:

Transfer to General Reserve 400.00 500.00

Proposed Dividend on

Equity Shares @ 30% 228.43 228.43

Provision for tax on Dividends 37.94 38.82

Surplus carried Forward 315.57 329.98

OPERATIONS

During 2009-10, the Sales dropped to Rs.82.97 Crore from Rs 87.45 Crores of 2008-09. Profit After Tax dropped by 7.12 % from Rs 7.02 Crores in 2008-09 to Rs 6.52 Crores in 2009-10.

Spice Oleo sales and Value Added Beverages Sales were lower due to reduced global demand. Marigold Oleoresins, key ingredient in Eye Health Care and your companys main product line was not impacted as the demand compression did not occur in this segment.

Your company experienced margin pressures in all 3 product categories. Cost push in labour, power and fuel prices coupled with lower product prices dented the operating margins. With the increase in Agricultural commodity prices and increase in cost of cultivation, Marigold Farmers are demanding higher flower prices. Southern India experienced adverse weather conditions for Marigold crop growing resulting in lower flower output and lesser volumes through the plant. Thus margin pressures coupled with lower volumes resulted in 7.12% drop in PAT.

FUTURE PROSPECTS

The "Critical Global Strategic Partnership Agreement" signed with Kemin Health, L.C. (Kemin), Des Moines, Iowa,

USA last year for supply of Marigold Oleoresin is progressing as planned. Future volume of this product is expected to register around 5 to 10% annual growth rates. Kemin and AVT are working together in further strengthening the Lutein (Eye care ingredient from Marigold Oleoresin) supply chain in anticipation of the emerging global competition.

Spice Oils and Oleoresins demand is bouncing back with the start of the global economic recovery. Your company will continue its focus on "niche food safe" platform to increase the sales. The importing countries thrust on Food Safety will result in higher sales for this product group in future years.

Value Added Beverages - Decaffeinated Teas - will grow at a faster rate with addition of more customers and higher volumes. We expect to fill the second extraction plant volumes during next 3 to 5 years. Instant Teas is another product we are focusing on.

2010 Crop Season is progressing well. Good Summer showers and timely rains from South West Monsoon is helping the crop growth. We increased flower prices to meet the expectations of Farmers. We strengthened the Agricultural Operations Management systems. To mitigate risk of single season, your company now cultivates in Monsoon season as well apart from Summer. Thus we expect good flower output during 2010-11 thereby ensuring higher capacity utilization of the plant.

DIVIDEND

Your Directors are pleased to recommend a dividend of 30 % on Equity Share Capital for the year ended 31.03.2010.

PERFORMANCE OF SUBSIDIARY COMPANY

AVT Natural Pte. Ltd., Singapore together with its subsidiary, Heilongjiang AVT Bio-Products Limited, China has recorded sales of Rs 7.15 Crores and profit of Rs 20.41 Lakhs in the period ended December 2009 against the sales of 8.43 Crores and a profit of Rs 9.56 Lakhs during the period ended December 2008. We expect improved performance in sales and profits of the subsidiary company in 2010 from our Chinese operation due to increase in growing areas and higher flower output.

Pursuant to section 212 of the Companies Act, 1956, the Balance Sheet, Profit & Loss Account, Directors Report and the Auditors Report for the period ended 31st December 2009 for AVT Natural Pte. Ltd., Singapore, an overseas subsidiary of your company and its Chinese Subsidiary, Heilongjiang AVT Bio-Products Limited, have been attached.

FIXED DEPOSITS

As on 31.03.2010, a total sum of Rs 2.31 Lakhs due to 8 fixed deposit holders remain unclaimed. Out of this, deposits for a sum of Rs.1.22 Lakhs were renewed / repaid subsequently.

RECOGNITION OF IN-HOUSE R&D UNIT

The Department of Scientific & Industrial Research, Technology Bhavan, under Ministry of Science & Technology has accorded its recognition to the in-House, R&D facility of your company located at South Vazhakulam, Marampilly Post, Aluva, Kerala, for the period ending 31st March 2012, vide its letter No. F-TU-IV/RD/ 2976/2009 dated 18th March 2010.

WIND MILL

The Company had set up a windmill project 600 KW WTG, Kokkampalayam Village, Dharapuram Taluk, Erode District, Tamil Nadu. The wind mill has started its commercial operation with effect from 27th September 2008. The wind mill has generated 13,70,520 units in the year 2009-10. This output is as per our projections.

CLOSURE OF PLANT

During the year 2009-10, the company had closed its plant located at Hindupur. The said plant which was processing various grades of marigold flower, cultivated in and around that area and that the plant was running only 4 to 5 months a year depending on the flower arrival.

With the introduction of the Hybrid seeds at Sathyamangalam and Hassan cultivation area, the company was able to meet its requirement of Xanthophyll from these two areas. The Hindupur plant was set up in a lease hold land and its lease period had already expired, is being vacated by your company.

DIRECTORS

In accordance with the provisions of Companies Act, 1956 and the Articles of Association of the Company Mr. P. Shankar, Director and Mr. M.A. Alagappan, Director, retire by rotation at the 24th Annual General Meeting and being eligible, offer themselves for re-appointment.

RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, ENERGY CONSERVATION ETC.

The particulars prescribed by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 relating to Conservation of Energy, Technology Absorption, Foreign Exchange are furnished in the Annexure-I to this Report.

PARTICULARS OF EMPLOYEES

Particulars of employees in terms of the requirement of section 217 (2A) Companies Act, 1956 have been given in Annexure II forming part of this Report.

AUDITORS

M/s. Suri & Co., Chartered Accountants, Chennai 600 017, Auditors of the Company retire at the conclusion of the

ensuing Annual General Meeting and being eligible, offer themselves for reappointment. They have confirmed that their re-appointment, if made, will be within the limits specified under Section 224 (1-B) of the Companies Act, 1956.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, the Management Discussion & Analysis Report, Report on Corporate Governance with Auditors Certificate on compliance with conditions of Corporate Governance have been annexed to this Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed:

1. That in the preparation of the accounts for the financial year ended 31st March 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. That the Directors have 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 of the Company for the year under review;

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the Directors have prepared the accounts for the financial year ended 31st March 2010 on a going concern basis.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank and place on record their sincere appreciation for the continued co-operation and support extended by the share holders customers, farmers, bankers namely State Bank of India, Bank of Baroda, The South Indian Bank, CITI Bank, suppliers and other stake holders for their continued support to the Company.

The Directors also wish to place on record their appreciation for the contribution support and continued co-operation made by the employees.

For and On behalf of the Board

Ajit Thomas Chairman

Place : Chennai Date : 29th July, 2010