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Directors Report of Kohinoor Foods Ltd.

Mar 31, 2016

The Directors have pleasure in presenting the 27th Annual Report and the Audited Annual Accounts of the Company for the Financial Year ended 31st March, 2016.

Financial Overview

The financial highlights for the year ending 31st March, 2016 are as under:

(Rs. In Millions)

Particulars

FY''16

FY''15

Total Turnover

11338.27

11611.29

Profit Before Interest, Depreciation and Tax(PBIDT)

1397.88

177.56

Profit/(Loss) Before Exceptional and Extra-Ordinary Items

295.30

(974.03)

Exceptional and Extra Ordinary Items

250.00

---

Profit Before Tax

45.30

(974.03)

Less: Tax Expense

7.17

248.51

Profit After Tax

38.13

(725.52)

The Board''s Report is based on the stand alone financial statements of the Company.

Directors'' Report and Management Discussion & Analysis

Operations:

For the financial year under review 2015-16, the company''s Export Sales stood at INR 7,705 millions as against INR 8,867 millions in previous year and the Domestic Sales stood at INR 3,597 millions as against INR 2,704 millions in the last financial year.

During 2015-2016, the contribution of Rice to the Company''s total business is INR 10,406 millions as against Rs.10,289 millions during the last financial year. The Food Business has contributed INR 674 millions in the total turnover as against INR 769 millions in the previous year.

The year saw an increase in Basmati rice exports from India in volume terms; however there was decrease in total value of goods exported. The major reason was low average price of Basmati Rice Paddy due to all time high domestic production of 4.5 Mn Metric Tonnes. Also political instability in countries such as Iraq, Syria & Yemen contributed to the decline of Indian export of basmati rice. In addition, many importing countries of Basmati rice held back as they had enough stock of Indian Rice imported earlier and were now disposing that inventory instead of ordering fresh quantities. Major highlights of performance during the financial year being:

- -Focused sales and marketing efforts in all the major basmati rice importing countries of the world viz. UK, Saudi Arabia, Iran and to the US.

- -Ourover-all Basmati Rice exports grew by 11% in volume terms.

- -Impressive growth in the export volume of Basmati Rice in the markets of United Kingdom, USA, Canada, UAE, Kuwait, Qatar, Oman, Egypt, Morocco, New Zealand & Singapore.

- -The UK subsidiary has not only added volumes but have also increased ''Kohinoor'' brand listings and its presence in many new multiple stores. TESCO has recently awarded it with an honour of the ''''Most Preferred Suppliers"

- -The private label business of Basmati Rice grew on the back of acquiring new clients & more buying from existing customer. New clients include from countries such as Iran, USA, Saudi Arabia, Qatar, Kuwait & Sweden. The company focused on spreading its foot prints across the globe and reaching out to new customers.

- Our Private Label business of Basmati Rice in Saudi Arabia, USA, and Canada has recorded a robust growth.

- Kohinoor Basmati Rice (Brand) exports saw significant increase over last year in Qatar, Oman, Kuwait, UK, New Zealand & Morocco

- We have recorded phenomenal growth in both value and volume terms in export of Basmati Rice to our JV Company M/s Al Dahra Kohinoor LLC (Abu Dhabi)

- Acquired business from new countries such as - Brunei, Cyprus, Djibouti, Mauritania, Guinea, Somalia, Sweden & Taiwan.

- Also a robust increase of 30% in volume in our business of export of Non Basmati Rice.

EXPORT MARKETS Export- Basmati Rice

This year, in the Export of Basmati Rice, the company did a business of INR 6,395 millions as against INR 7,158 millions in the previous financial year.

Export- Processed Food

This year the export of processed & packaged food products recorded a decline in revenues and stood at INR 674 millions as against INR 769 millions in the previous year. On account of restructuring of US operations, low business revenue from one of our major client of Private Label in South Africa and erratic supply from one of the Vendor the overall business \ momentum was hampered that resulted in slow-down.

Subsidiaries/Joint Venture

UKO operations

Indo European Foods Limited (IEFL) was incorporated in year 2000 in United Kingdom (UK), as a wholly owned subsidiary of Kohinoor Foods Limited (KFL), India, to cater the markets of UK and Europe.

Business performance and plans IEFL had a very good year, with business growth of around 14% in volumes. Led by the flagship Kohinoor Brand, the IEFL has become the leading supplier of big bags rice to the UK grocery market. (Source: IRI, UK Grocery Major Multiples). The marketing and new product development efforts have focused on revitalizing the portfolio packaging and on reformulating the food range. IEFL has also invested in road shows that have sampled the products and showcased the brands at major retail outlets.

Investment in People-

The sales and marketing teams of IEFL has been strengthened, experienced marketing people have been hired and provided exposure to various training programmes.

BRC Audit-

The IEFL have been awarded the highly sought after “Grade AA” by the British Retail Consortium (BRC). The Felixstowe factory meets the criteria of global standard for food safety and is equipped to supply all major international retailers.

Forward Thinking-

IEFL while focusing on rice business is also strengthening the food side of its business. The Efforts of IEFL will continue to open new accounts in the UK and Continental Europe.

USA Operations

Kohinoor Foods USA Inc. was incorporated in year 2000 in the state of New Jersey, USA, as a wholly owned subsidiary of Kohinoor Foods Limited (KFL), India, to cater to the markets of US & Canada. Through this subsidiary the Company has demonstrated its presence in both the Ethnic & the Mainstream segment of the business for both Rice & Processed & Packaged food products. The brand ''Kohinoor'' is well known in US and under our new strategy we plan to increase the width and the depth of distribution across US & Canada markets to further improve the visibility & strengthen the brand.

During the financial year 2015-16, the company operated under new restructured business plan; wherein the company appointed a national distributor to sell & promote its brands in US market. It would helped the company (Kohinoor Foods USA Inc.) to considerably reduce the cost of operation & improve financial position. Under this new business model the role of US subsidiary is to support & supervise the Distributor to generate business & sales volume. The re-alignment of business operations of Kohinoor Foods USA Inc. has reduced cost of operations. We expect an improvement in our sales to US under the distribution system. This year we plan to focus on mainstream buyers of rice and food products.

UAE Operations

In FY: 2013-14, Kohinoor Foods Limited entered into a Joint Venture Agreement with Al Dahra (Abu Dhabi) that seeks to establish a robust frame work for supply of Rice & other agro products from India UAE and provide long-term sustainable food security to the people of UAE. Kohinoor Foods also entered into the Shareholders Agreement to jointly develop and manage brown to white rice facility in Abu Dhabi with a capacity of approximately 60,000 MTs per annum scalable up to 1,00,000 MTs and also to build storage facility of approx 30,000 MT. The Joint venture Company M/sAl Dahra Kohinoor LLC and Al Dahra Kohinoor Industries LLC, have been incorporated in Abu Dhabi in which Kohinoor Foods Limited is a Share Holder and also having a board seat in consideration for providing supervision/guidance to establish these JV Companies. This JV Company in its second year of operation has conducted satisfying & encouraging business so far.

The Rich Rice Raisers Factory LLC, (RRR) is a Joint Venture Company having 25% equity of KFL. The RRR is not doing any business activity since the inception of Al Dahra-Kohinoor Joint Venture. As perthe terms of the JVagreement with Al-Dahra; Kohinoor Foods Ltd., have already initiated steps to exit from Rich Rice Raisers Factory LLC, Dubai. FOODBUSINESS:

During the year (2015-16) our Food Vertical, executed a business of INR 674 Mn as against INR 769 Mn in the previous financial year, a decline of 12% over last year. UK & US are two major markets for our range of processed & packaged food products. The restructuring of our US subsidiary coupled with ban on import of Indian origin dairy products by UK& EU has resulted intoa decline in turnover. Food Business has few large buyers and we need to expand customer base to avoid over dependence on few buyers, efforts are being made in this direction.

Highlights (2015-16)

-Acquired a new Food Processing Unit near Sonipat, Haryana to add to our existing production capacity and enable us to meet the increasing demand of our clients for Ready to Eat & Ready to Cook products. The acquisition of new food facility would not only reduce the dependence on our existing facilities but also help us to focus on business by acquisition of new customers.

- Developed 100% Certified Organic range of Products under ''Green Grown'' brand such as Pulses, Spices, Cereals, Healthy Grains and much more. We are planning to launch this new category of products in Saudi Arabia, Oman & Qatar to name a few.

- Secured a long-term contract (4 years) from our major Private Label Client- COLES thus ensuring steady business over a long period of time.

- Revamped & gave new look to the entire packaging of Kohinoor Branded Products for UK Market for Ready to Cook- Sauces and Ready to Eat-Curries.

- Added new markets such as Oman, Sri Lanka, Uganda, Saudi Arabia & Nepal..

CHALLENGES:.

- Erratic supply from a major vendor resulted in delayed shipment & business loss.

- Re-structuring of US office contributed to business slowdown.

- Export of products to UK containing ''Dairy'' suffered due to EU regulations.

- Quality related issues with one of our major clients in South Africa (M/s Tiger Brands) hampered the business & momentum.

FINANCIAL YEAR (2016-17)

- We''ll consolidate the existing categories & products by increasing the Width & Depth of Distribution in focus markets.

- We will discontinue non core product categories such as cookies, pickles etc.

- Focus on mainstream market in US & Canada.

- “Green Grown” Organic range of products would be our focused category and look to launch in several countries.

Overview- Food Processing Industry

The Indian market offers a huge potential for the food processing industry - more so because of the fact that it promotes two main growing factors of our Indian Economy - Industry & Agriculture. During the last one decade, India moved from a position of scarcity to surplus in Food. Given the trade in production of food commodities, the Food Processing Industry in India is on an assured track of growth and profitability. It is expected to attract phenomenal investment in capital, human, technological and financial areas. Areason why the Food Processing Industry sector in India has been accorded high priority by the Government of India, with a number of fiscal relief and incentives, to encourage commercialization and value addition. As per a study conducted by McKinsey and Confederation of Indian Industry (CII), the turnover of the total food market is approximately Rs.250,000 Crores, out of which value-added food products comprise Rs.80,000 Crores.

Basmati Rice

Like any other commodity business, Basmati Rice is a category which is little complex and widely unorganized. With an industry estimated consumption of around 1.5 million tonnes of Basmati Rice in India, this is one category which has grown significantly over the years and slated to grow further in times to come. Though majorly unorganized, but year on year this category is experiencing good number of conversions from unbranded to branded packaged Basmati Rice in terms of consumptions in India. This is mainly due to introduction of branded and package basmati rice in many retail outlets. India''s growing middle class has augmented the domestic demand of branded rice. Moreover, introduction of modern food retail formats has also propelled the packaged food market, facilitating the availability, visibility and accessibility of branded products. The domestic branded market in India is expected to grow in double digits as compared to single digit growth for unbranded rice. Eating rice is common habit in most of the Indian households and it is usually a part of one of the 3 meals cooked every day. Geographically, the consumption of Basmati is higher in the Northern & Western part of the country while culturally, its consumption is quite high in the Punjabi & Gujarati families. With the view of serving the best to their customers, Basmati consumption is also high in well recognized hotels & large institutions. The consumption of branded packaged Basmati Rice is also being driven by the modern retail that offers wide choice to customers

Ambient - Ready Meals

Ready Meals, is a category which is gaining popularity globally though still at a growing stage; but the factors that has so far contributed to sales of Ready Meals have been increasing consumer base of working people who have less time to spend on cooking, Eating out of home have become a common phenomena on weekends, growth of Modern trade, the Convenience of making exotic vegetarian & non-vegetarian dishes in just a few minutes, etc. As this category grows, an Innovative value addition to products with Health & Nutrition is expected to become an important aspect of it.

Frozen Food - Ready Meals

Though Frozen Food as a category constitutes many products, majority of it being the frozen unprocessed no vegetarian food, but within this segment vegetarian Frozen Ready Meals, snacks too is growing at significant rate. The factors that contribute to the growth of this category is very similar to that of Ambient Ready Meals like growing consumer base of working people who have less time to spend on cooking, eating out of home becoming a common phenomena every week & on weekend, growth of Modern trade, the convenience of making exotic vegetarian dishes in just a few minutes, etc.

Risks & Concerns

Macro-economic factors like recession, subdued demand and political uncertainty may affect the business of the Company and the industry at large as well. The Company is aware that uncertainties in business offer opportunities as well as downside risks and thus has identified and put in place mitigation tools for the same. Some key risk areas are:

Procurement risk: Adequate availability of key raw materials at the right prices is crucial for the Company. Being a generic natural product with low yield concentrated in a small region of the World, production of Basmati depends on the vagaries of nature. Therefore, any disruption in the supply due to a natural or other calamity or violent changes in the cost structure could adversely affect the Company''s ability to reach its consumers with the right value proposition. However, we are ready with plans that might help us at such times. However, the Company''s long term relationship with farmers built on trust ensures constant supply and thus over the years it has not faced any procurement problems. Also, adequacy of irrigation facilities in the Basmati producing regions mitigates these uncertainties.

High working capital requirement: Basmati rice requires to be aged for 9-12 months before selling, leading to huge working capital requirements. This results in low ROCE for the industry. Combating this risk, efficient working capital management system has been set in place by the Company and cash flow is monitored on daily basis.

Intense competition from unorganized sector: Another characteristic of this industry is the presence of unorganized sector offering basmati in loose unbranded form which intensifies competition. The Company is moving towards branded products and has invested significantly in building strong brands which helps differentiate their product.

Dividend

Your Directors do not recommend any dividend for the financial year2015-16.

Re-Appointment / Appointment of Directors

In accordance with the provisions of the Companies Act, 2013, Mr. Khedaim Abdulla Saeed Faris Alderei (holding DIN-06699678), Director of the Company shall retires by rotation at the ensuing Annual General Meeting and being eligible offer himself for reappointment. Your Directors recommend his re-appointment.

Mr. Vijay Burman, Mr. Sandeep Kohli, Mr. Maharaj Kishen Trisal and Mr. Satish Chander Gupta, were appointed as an Independent Director of the Company, under Section 149 of the Companies Act, 2013, for a period of two consecutive years from 1st April, 2014 to 31st March, 2016, at the Annual General Meeting of the Company held on 29th September, 2014.

The Board of Directors on the recommendation of the Nomination and Remuneration Committee, have approved at their Meeting held on 11th February, 2016 the re-appointment of Mr. Vijay Burman, Mr. Sandeep Kohli, Mr. Maharaj Kishen Trisal and Mr. Satish Chander Gupta, as an Independent Directors of the Company, from 1st April, 2016, to hold office up to 31st March, 2021, not liable to retire by rotation, subject to the approval of the shareholders.

Subsidiary, Joint Ventures and Associate Companies

The company has no material subsidiary in accordance with the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

In accordance with section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. The statement provides the details of performance, financial positions of each of the subsidiaries. During the year the Board of Directors of the Company had reviewed the affairs of the subsidiaries and a statement containing the salient features of the financial statement of our subsidiaries and Joint Venture in the prescribed format AOC-1 is enclosed as Part I and Part II of Annexure At the Consolidated Financial Statement and hence not repeated here for the sake of brevity

In accordance with Section 136 of the Companies Act, 2013, the audited financial statement, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on our website www.kohinoorfoods.in/investor. These documents will also be available for inspection during business hours at our corporate office.

Further the Policy for determining material subsidiaries as approved by the Board may be accessed on the Company''s website at the link: www.kohinoorfoods.in/investor

Internal Control System

The Company has in place adequate internal control systems that facilitates the accuracy and timely compilation of financial statements and management reports, ensures regulatory and statutory compliance, and safeguards investor interest by ensuring the highest level of governance. The control system ensures that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly. A CEO and CFO Certificate provided by Jt. Managing Director and CFO, included in the Corporate Governance Report confirms the existence of effective internal control systems and procedures in the Company’s Internal audit function evaluates the adequacy of, and compliance with policies, plans, regulatory and statutory requirements. The Internal Auditors directly report to the Board''s Audit Committee, thus ensuring the independence of the process. It also evaluates and suggests improvement in effectiveness of risk management, controls and governance process. The Audit committee and Board provides necessary oversight and directions to the Internal audit function and periodically reviews the findings and ensures corrective measures are taken. In the opinion of the management and the internal auditors, there exists adequate safeguard against fraud and negligence within the Company.

Our Offices as well as the manufacturing facilities endorse the highest health, safety, security and environmental standards.

Internal Financial Controls

The Company has in place well defined and adequate Internal Financial Controls which are tested from time to time for necessary improvement, if any required.

Listing at Stock Exchange

The Equity Shares of the Company are listed with BSE Limited and National Stock Exchange of India Ltd. The annual listing fee for the year 2016-17 has been paid to the Exchanges.

Corporate Governance

Your Company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as stipulated by the Stock Exchanges. Pursuant to SEBI (LODR), Regulation, 2015, a report on the Corporate Governance, Certificate regarding Compliance, Secretarial Audit Report and Jt. Managing Director (CEO) and CFO certification along with the Auditors Certificate has been made part of the Annual Report.

Auditors

M/s Rajender Kumar Singal & Associates LLP, Chartered Accountants, New Delhi, Statutory Auditors of the Company, holds office till the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits and they are not disqualified for re-appointment. The Board pursuant to the provisions of Section 139, 142 and other applicable provisions of the Companies Act, 2013 and on the recommendation of the Audit Committee has considered the appointment of M/s Rajender Kumar Singal & Associates LLP, Chartered Accountants, New Delhi (Firm Registration No. 016379N), as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting to the conclusion of next Annual General Meeting.

Auditors Report

The Company has received the Auditors Report duly signed by M/s Rajender Kumar Singal & Associates LLP, Chartered Accountants, New Delhi, and took note on the same. Further as mentioned in the Auditors Report, attention is drawn to Note No. 11(c), 38(a)(i) and 24 to the financial statements, the board discussed the contention of the Auditor and is of the view that the losses incurred by the Wholly Owned Subsidiary is not going to affect the Company''s investment in long run. As per advice receive from legal experts and on the basis of merit of the case, there is a high probability that the income tax order will be set aside and the demand will be quashed. Further with regard to the managerial remuneration paid to Executive Director, Mr. Jugal Kishore Arora, Mr. Satnam Arora and Mr. Gurnam Arora, during the period from April 2015 to March 2016 in excess of the limit specified in the section 197 of the Companies Act, 2013, which is subject to approval of the central government. The Management is in the view that the company is in the process of obtaining the requisite approval from the central government for such excess remuneration and is hopeful that it will received the approval without any modification, as the same approval was received earlier as well without any modification. Accordingly management is of the view that no provision in respect of the above demand is required to be made in the books of accounts.

Cost Auditors

The Cost Auditor M/s Cheena and Associates appointed as Cost Accountants of the Company for the year 2015-16 and has completed the audit of the cost record of the Company The Cost Audit Report does not contain any qualification, reservation or adverse remark.

The Board pursuant to the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013 and Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof, for the time being in force), on the recommendation of the Audit Committee has approved the appointment of M/s Cheena & Associates, Cost Accountant Firm to conduct the audit of the cost records of the Company for the financial year ending on March 31, 2017 and remuneration to be paid subject to rectification by shareholders.

Secretarial Audit

The Board of Directors pursuant to the Provision of Section 204 of the Companies Act, 2013, has appointed M/s Vinod Aggarwal and Associates, Company Secretary Firm, (having FCS No. 8007 and CP No. 8816) to conduct Secretarial Audit of the Company for the Financial Year 2016-2017.

Secretarial Audit Report

The Secretarial Auditor M/s Vinod Aggarwal and Associates, Company Secretaries, appointed for the year 2015-16 and has completed the secretarial audit of the Company. The Secretarial Audit Report as received from the Practicing Company Secretary is annexed to the Annual Report. As per the Secretarial Audit Report the Company has complied with all the applicable acts, laws, rules and regulations and does not contain any qualification, reservation or adverse remark. Internal Auditor

The terms of M/s SPMG & Co., Chartered Accountants, New Delhi, who was reappointed as Internal Auditor of the Company for the Financial Year 2015-16 expired on 31st March, 2016.

Your Directors have approved their reappointment in the Board Meeting dated 30th May, 2016, for the financial year 2016-17.

Deposits

During the year under review, the Company has not accepted any deposit under Chapter V of the Companies Act, 2013

Share Capital of the Company

During the year under review, the Company did not issue equity shares. The paid up Share Capital of the Company is amounting to Rs. 35,24,15,300/- comprising of 3,52,41,530 equity shares of Rs. 10/-each.

Board Meetings

The Board is headed by an executive Chairman. As on 31st March 2016, the Board of Directors consisted of Nine Directors, including Chairman, Joint Managing Directors, Woman Director, Independent Director and others.

Four (4) Board Meetings were held during the year2015-16 i.e. on 28th May, 2015,13th August, 2015,9th November, 2015 and 11th February, 2016 and the gap between two meetings did not exceed 120 days.

Audit Committee Meetings

During the year under review, the Audit Committee met Four (4) times i.e. on 28th May 2015,13th August, 2015, 9th November, 2015 and 11th February, 2016 and the maximum time gap between any two consecutive meetings did not exceed 120 days. The minutes of the meetings of the Audit Committee are noted by the Board.

Nomination and Remuneration Committee

During the year under review, the Nomination and Remuneration Committee met two (2) times i.e. on 13th August, 2015 and 11th February, 2016. The Board of Directors of the Company at their meeting held on 11th February, 2016, have reconstituted the Nomination and Remuneration Committee by deleting/removing the name of Mr. Satnam Arora, Jt. Managing Director from membership of the Committee as required under SEBI (LODR), Regulation, 2015.

Remuneration Policy

On the recommendation of the Nomination and Remuneration Committee, the Board has formulated Remuneration Policy for appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration.

The Remuneration Policy of the Company forms part of this Report and may be accessed on the Company''s website on the link www.kohinoorfoods.in/investor.

Whistle Blower Policy/Vigil mechanism

The Company has established a vigil mechanism for Directors and Employees to report their concerns about unethical behavior, actual or suspected, fraud or violation of the company''s code of conduct or ethics policy or any other grievances, the details of which are given in the Corporate Governance Report. The Whistle

Blower Policy may be accessed on the Company''s website on the link www.kohinoorfoods.in/investor

Risk Management

The Company has constituted a Risk Management Committee comprising executives headed by the Managing Director.

The Company has a Risk Management Policy to identify evaluate business risks and opportunities. The Company has adopted several strategies for Risk Management to mitigate risks and uncertainties. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage.

The Company has adopted a Risk Management Policy which establishes various levels of accountability and overview within the Company. In addition, all the key risks get continuously deliberated and discussed at the Group Executive Committee level as well as the Business Unit level. The said Policy is placed on the Company''s website www.kohinoorfoods.in/investor.

Particulars of Loan Given, Investment made, Guarantees given and Securities Provided

Particulars of loans given, investments made, guarantees and securities provided under section 186 of the Companies Act, 2013 are provided in the notes of standalone Financials statement.

Acquisitions of Food Factory

During the year your Company has purchased a Food Factory of Ready to eat Packaged Food, situated at Village Sultanpur, Sonepat, Haryana, through auction from Bank of India. The production of this factory will commence in the current financial year.

The acquisition of new food facility would not only reduce the dependence on our existing out-sourced facilities but also help us to focus on business by acquiring new customers. Status of Joint Venture Agreement executed in the year 2011.

Kohinoor Foods Ltd. (KFL) and Kohinoor Specialty Foods India Pvt. Ltd. (KSF), had entered into Joint Venture Agreement in the year 2011. Consequent upon the formation of JV, Kohinoor Specialty Foods India Pvt. Ltd. (KSF) on 9th September, 2011 and execution of various agreements, Kohinoor Foods Ltd. (KFL), Stopped sale of food items and rice in domestic market and commenced exclusive supply of rice and broken rice to KSF.

During the year the Kohinoor Specialty Foods India Pvt. Ltd. (KSF) had issued a Legal Notice dated 07th August, 2015, for

Termination of Rice Supply Agreement (RSA) and to restrain Kohinoor Foods Ltd. (KFL) from entering into domestic market for rice and food business. KFL had given a detail reply to the notice and denied all the allegation/averments made in the said Notice. However, KSF filed a petition before the Hon''ble Delhi High Court under section 9 of the Arbitration and Conciliation Act, 1996, to restrain Kohinoor Foods Ltd. (KFL) and its Promoters from selling rice in India in term of Non-Compete clause provided under Business Transfer Agreement (BTA) and Non Compete and Non Solicitation Agreement. However, the Honbl''e Delhi High Court vide its order dated 1st March, 2016 has given its order that the respondents (KFL) would be entitled to sell the rice/processed rice in loose condition/form to the other traders who may sell the rice received from the respondents under their respective brand names and trading styles.

KFL being a minority shareholders holding 15% equity shareholding in Kohinoor Specialty Foods India Pvt. Ltd. (KSF), filed a Petition with Company Law Board, Delhi (CLB), [now National Company Law Tribunal (NCLT)] under section 397 and 398 of the Companies Act, 1956 relating to oppression and mismanagement.

During the year McCormick Switzerland GmbH, invoked the Arbitration clause under License Mark and Corporate Name License Agreement dated 1st June, 2011 against KFL and its Promoters before London Court of International Arbitration (LCIA) restraining KFL and its Promoters from using the Licensed Marks including the mark Kohinoor, whether as a part of corporate name or otherwise. KSF invoked the Arbitration clause under Business Transfer Agreement (BTA) dated 1st June,2011 against KFL and its Promoters LCIA restraining KFL and its Promoters for breach of its obligations under BTA and to pay to KSF an amount of Rs. 35.00 crores by way of Liquidated damages. KSF also invoked the Arbitration clause under Non Compete and Non Solicitation Agreement dated 1st June, 2011, before LCI Against Promoters.

The detailed Status of Pending Litigations before Various Court/Tribunal /Authorities has been given as under:

1. During the financial year 2015-16, the Assessing officer has passed fresh assessment orders dated 29.01.2016 in respect of AY 2002-03 toAY 2008-09 in respect of the issues set aside as per the Order of Hon''ble ITAT, New Delhi. As a result, the company has received substantial relief of Rs. 46,81,37,484/- towards outstanding tax & interest demand on the additions made by the AO in his earlier orders. Finally, the tax and interest demand stand reduced to Rs.5,90,39,692/- and Rs.2,34,38,268/- respectively for AY 2002-03 to AY 2008-09 and the same has been adjusted against the amount of Rs.13,50,00,000/-deposited with the Department under protest. However, the Company has still preferred an appeal before the Commissioner of Income Tax (Appeals), New Delhi, & Delhi High Court, which is yet to be heard.

2. Following appeals are also lying pending for hearing before the Income Tax Appellate Tribunal, New Delhi against the tax demand raised in impugned Income Tax Assessment Orders as per details given below :-

Assessment Year

Tax

Interest

Total

2009-10

17,89,66,465

10,54,26,352

28,43,92,817

2010-11

23,31,25,126

13,47,86,187

36,79,11,313

2011-12*

9,02,62,717

5,18,35,593

14,20,98,310

* The company has also filed a rectification application before DRP to reconsider its findings.

3. In respect of Assessment Year 2012-13, the company has received Final order dtd. 09.05.2016, making an addition of Rs.58,55,68,586/- on which the tax effect is Rs.22,94,96,840/-. The company has filed an appeal against the above order before the Commissioner of Income Tax (Appeals), New Delhi.

4. An appeal is lying pending before the Dy. Excise & Taxation Commissioner-Appeal, Punjab against the Order received from Excise and Taxation Deptt., Punjab in respect of Year 2009-10 and 2010-11 demanding a sum of Rs.4,50,41,414/- towards the cess imposed by the State Govt. on exports. The company has challenged the validity of imposition of cess on export in its appeal as the same is not permissible under article 286 of the Constitution of India. Further demand has been raised for Rs. 5,41,073/- after completing the Sales Tax assessment for AY 2011-12 against which appeal has been filed.

5. An appeal before the Customs, Excise & Service Tax Appellate Tribunal, New Delhi is lying pending against the order of Commissioner of Central Excise (Appeals), Delhi -III in respect of additional excise duty of Rs. 42,90,580/- demanded by the Excise department in connection of dispute over classification of goods - food product produced at Bahalgarh Factory- as per the Central TariffAct.

6. An appeal before the Appellate Tribunal is lying pending against the order received from the office of Service Tax Commissioner ate, New Delhi demanding the service tax & penalty Rs. 2,59,25,414/- in respect of certain services provided in earlier years. Subsequently, the company has deposited Rs.20,00,000/- "Under Protest" as per the directions given in the stay order granted by Appellate Tribunal.

As per the advice received from legal experts in respect of above cases and on the basis of merit of the case, there is a high probability that the aforesaid impugned orders will be set aside and the demand will be set aside. Accordingly, management is of the view that no provision in respect of the above demands is required to be made in the books of accounts.

7. During the year, the Company entered into settlement agreement with Punjab National Bank (PNB) in respect of liability on account of Derivative transactions. The liability is settled for Rs. 25.00 Crores against the total amount which has been shown in the previous year balance sheet under contingent liabilities of Rs. 27.49 as calculated in last year. After this settlement, now there is no contingent liability on account of derivative transactions with any bank.

8. The Board of Trustee of the port of Mumbai has filed a money suit for recovery of Rs. 9.64 Cr. Before Mumbai High Court, towards alleged outstanding demurrage charges against which the company has filed its counter claim of Rs. 10.88 Cr. towards the financial losses, interest on the investment, refund of the license fees, refund of the demurrage charges, compensation and damages etc. The matter is still pending to be heard.

9. During the year the Kohinoor Specialty Foods India Pvt. Ltd. (KSF) has filed a Petition under Section 9 of the Indian Arbitration Act, in High Court of Delhi, to restrain Kohinoor Foods Ltd. (KFL) and its Promoters from selling rice in India in term of Non-Compete clause provided under Business Transfer Agreement (BTA) and Non Compete and Non Solicitation Agreement. However, the Honbl''e Delhi High Court vide its order dated 1st March, 2016 has given its order that the respondents (KFL) would be entitled to sell the rice/processed rice in loose condition/form to the other traders who may sell the rice received from the respondents under their respective brand names and trading styles.

10. During the year the Company (KFL) being a minority shareholders holding 15% equity shareholding in Kohinoor Specialty Foods India Pvt. Ltd. (KSF), filed a Petition with Company Law Board Delhi (CLB), under section 397 and 398 of the Companies Act, 1956 relating to oppression and mismanagement. The matter is still pending.

11. McCormick Switzerland GmbH, invoked the Arbitration clause under License Mark and Corporate Name License Agreement dated 1st June, 2011 against KFL and its Promoters before London Court of International Arbitration (LCIA) restraining KFL and its Promoters from using the Licensed Marks including the mark Kohinoor, whether as a part of corporate name or otherwise. The company has in its reply written to the LCIA that the company has not breached any of the provisions of this agreement.

12. KSF invoked the Arbitration clause under Business Transfer Agreement (BTA) dated 1st June, 2011 against KFL and its Promoters before London Court of International Arbitration (LCIA) restraining KFL and its Promoters for breach of its obligations under BTA and to pay to KSF an amount of Rs. 35.00 crores by way of Liquidated damages. KSF also invoked the Arbitration clause under Non Compete and Non Solicitation Agreement dated 1st June, 2011, before London Court of International Arbitration (LCIA) against Promoters.

The Company is in the process of filing Statement of Defense in the aforesaid cases along with cross claim/counter claim under Rice Supply Agreement (RSA) to claim a substantial amount of losses from KSF on account of wrong termination of RSA. Further the company appointed Norton Rose Fulbright, one of the best Arbitration firm in London to file/represent the case so as to protect its interest. The Tribunal has been constituted. The date of final hearing schedule in these matters is April, 2017.

13. There are few more cases which are pending before the various authorities and the same has been duly disclosed under Notes to the Account.

Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earning and Outgo

The particulars as prescribed in sub-section (3) of Section 134 of the Companies Act, 2013, read with Companies (Accounts) Rules, 2014 are enclosed as Annexure B to this Report.

Particulars of Employees and Related Disclosure

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are given as under:

I) There are no Employee, employed throughout the year and in receipt of remuneration of Rs. 1,02,00,000/- or more per annum.

ii) There are no Employee, employed part of the year and in receipt of remuneration of Rs. 8,50,000/- or more per month during any part of the year.

Disclosures pertaining to remuneration and other details as 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, are set out in the Annexure D to this report.

Having regard to the provisions of Section 136(1) read with its relevant proviso of the Companies Act, 2013, the Board''s Report is being sent to the members without above mentioned annexure. The said annexure are available for inspection at the Corporate/Registered Office of the Company during working hours and any member interested in obtaining such annexure may write to the Company Secretary and the same will be furnished free of cost.

Extract of Annual Return

In accordance with Section 134(3)(a) of the Companies Act, 2013, the extract of the annual return in Form No. MGT-9 is enclosed as Annexure C to this Report.

Management''s Discussion and Analysis Report

Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), a Management Discussion and Analysis Report and a Report on Corporate Governance is attached in a separate section forming part of the Annual Report.

A Certificate from the Statutory Auditors of the Company regarding the Compliance by the Company of the conditions stipulated in Regulations Part C of Schedule V of the Listing Regulations is also attached with this report.

A declaration by the Managing Director pursuant to Regulations Part C of Schedule V of the Listing Regulations stating that all the Board Members and Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct, during the financial year ended 31st March, 2016, is also attached with this report.

Directors'' Responsibility Statement

Pursuant to section 134(5) of The Companies Act, 2013, the Directors confirm that:

a) in the preparation of the annual accounts for the year ended 31 March 2016, the applicable accounting standards read with requirements set out under Schedule III to the Act, had been followed and there are no material departures from the same;

b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and Fairview of the state of affairs of the Company as at 31 March 2016 and of the profit of the Company for the year ended on that date;

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

d) the Directors had prepared the annual accounts on a ''going concern'' basis;

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

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

Awards & Recognitions

Kohinoor Foods is no stranger to Awards & Recognitions. Since its inception, the company has been earning awards and recognition like consumer validated Super Brand Award (thrice in series), Reader''s Digest Most Trusted Brand award (4 times in a row), Power Brand Award, Guinness Book of World Record (for making World''s Largest Biryani), National award for Export Excellence, Brand Equity Award & many APED A awards.

Corporate Social Responsibility

As per provisions under Section 135 of the Companies Act, 2013, all companies having net worth of Rs. 500 crores or more, or turnover of Rs.1,000 crores or more ora net profit of Rs. 5 crores or more during any financial year are required to constitute a Corporate Social Responsibility (CSR) Committee of Board of Directors comprising three or more directors, at least one of whom should be an Independent Director and such Company shall spend 2% of the average net profits of the Company made during the three immediately preceding financial years.

Accordingly a detailed CSR Policy was framed by the Company with the approvals of the CSR Committee and Board. The Policy interlaid, covers the following:

- Philosophy

- Scope

- List of CSR activities

- Modalities of execution of projects/programmes

- Implementation through CSR Cell

- Monitoring assessment of projects/programmes

CSR Policy gives an overview of the projects or programmes which are proposed to be undertaken by the Company in the coming years.

2. The composition of the CSR Committee

A Committee of the directors, titled ''Corporate Social

Responsibility Committee'', was constituted by the Board with the

following members:

Mr. Sandeep Kohli Mr. Maharaj Kishan Trisal Mr. Satnam Arora Mr.GurnamArora

As the Average net Profit/(Loss) of the Company for last three financial years prior to 2015-16 comes to average net loss and therefore the company is not statutorily required to spent amount as prescribed for CSR expenditure.

Although the company is not statutory require to expend 2% of the average net profit (INR) of the last three financial years, being average net loss. However the company voluntarily expends an amount of Rs. 14.26 lakhs in the last financial year on this account by doing various CSR activities.

Kohinoor also envisions to improve lives in communities we live around, protect workplace rights, respect people, support missions that help people have a better life, provide good jobs, world class quality products and a healthy environment to all of us around.

At Workplace, Kohinoor Foods maintain high standards for fair and dignified treatment of all the people who work for our company. For all of its employees, it is not just a place to work, but like another home and everybody in it like a big family, closely bonded with each other.

Kohinoor Foods also believes that a company is as good as the people who work for it - their combined talents; skills, knowledge, experience and passion make a company what it is. Hence, company''s continuous goal is to inspire and motivate its people to hone their talents, increase their knowledge & skills and achieve extraordinary results at their workplace. In this Endeavour we have offered subsidized meals to our employees at a very nominal cost. Being environmentally conscious company and as part of Go Green campaign, have put up water treatment plant in our rice factory (Murthal), where treated water is used for watering the lawn, garden and irrigate the fields.

Adherence to global human rights standards, No minor labour, Fair-trade practices, complete Medical facilities for its people, Safe & sound working environment are the things that Kohinoor Foods take utmost care about.

The CSR Policy may be accessed on the Company''s website at the link: www.kohinoorfoods.in/investor

Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance towards sexual harassment at the workplace. The Company has in place a Sexual Harassment Policy in compliance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment. The Sexual Harassment Committee has been set up to redress complaints received regarding sexual harassment.

The Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)Act,2013.

Declaration by Independent Directors

The Company has received necessary declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements), Regulation, 2015.

Board Evaluation

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, it is mandatory that the Board shall monitor and review the Board Evaluation Framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. Schedule IV of the Companies Act, 2013 and Regulation 17 (10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the director being evaluated.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual

Directors on the basis of the criteria and framework adopted by the Board. In addition, the performance of Board as a whole and committees were evaluated by the Board after seeking inputs from all the Directors on the basis of various criteria.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of Board as a whole and performance of the Chairman was evaluated, taking into account the views of the Executive Directors and Non-Executive Directors. The evaluation process has been explained in the Corporate Governance Report section of the Annual Report.

Training of Independent Directors

The Company Secretary of the company conducted a detail training programme to provide/update the changes in the SEBI (LODR), Regulation, 2015/Companies Act, 2013 and other relevant act to the Independent Directors.

Further, the Company issues a formal letter of appointment to Independent Directors outlining their roles, responsibilities, functions and duties as an Independent Director. The format of the letter of appointment is available on the Company''s website at the link: www.kohinoorfoods.in/investor.

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise

3. Issue of shares (including sweat equity shares) to employee of the Company under any scheme.

4. Issue of Employees Stock Option to employee of the company under any scheme..

5. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

6. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

7. Business Responsibility Report as per Regulation 34 (2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, describing the initiatives taken by them from an environmental, social and governance perspective is not applicable to the Company for the financial year 2015-2016 as per the SEBI Circular SEBI/LAD-NRO/GN/2015-16/27 dated 22nd December2015and Frequently Asked Questions issued by SEBI on SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 dated 29 January 2016.

Acknowledgment

Your Directors would like to express their appreciation for the assistance and co-operation received from the Banks, Government Authorities, Customers, Vendors, JV Partners and Members during the year under review. Your Directors acknowledge with gratitude, the commitment and dedication of the employees at all levels that has contributed to the growth and success of the Company.

For and on Behalf of the Board

Sd/-

Jugal Kishore Arora

Faridabad

Chairman

August 12th, 2016


Mar 31, 2015

The following report should be read in conjunction with the audited financial statements and notes for the year ended March 31, 2015 and the audited financial statements and notes for the year ended March 31, 2014. This report contains forward looking statements, which may be identified by their use of words like 'plans', 'expects', 'will', 'anticipates', 'believes', 'intends', 'projects', 'estimates' or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the Company's strategy for growth, market position, expenditures, and financial results, are forward looking statements. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company's actual results, performance or achievements could thus differ materially from those projected in any such forward looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

Company – In General

Synonymous with the fine taste of India in its absolute authentic form, the sole objective of Kohinoor Foods Limited, since its inception, has been to make the world experience the true Indian flavour. The Company offers an extensive range that caters to consumers' need in all parts of the world – a wide variety of Basmati Rice, Ready to Eat Curries & Meals, Readymade Gravies, Cooking Pastes, Chutney's, Spices and Seasonings to Frozen Breads, Ghee, Snacks & Paneer (Indian Cottage Cheese), healthy grains, edible oils. Today, the most powerful brand of the Company "Kohinoor" is a household name in the countries like USA, UK, UAE, Canada, Australia, Singapore, Japan, Mauritius & Middle Eastern, European countries . As of now, the brand 'Kohinoor' is known in more than 60 countries worldwide.

Your Directors presents the 26th Annual Report and the Audited Annual Accounts of the Company for the Financial Year ended 31st March, 2015.

Financial Overview

The financial highlights for the year ending 31st March, 2015 are as under:

(Rs. In Million) Particulars FY'15 FY'14

Total Turnover 11611.29 12649.32

Profit Before Interest, Depreciation 177.56 1202.19 and Tax

Profit/(Loss) Before Exceptional and (974.03) 225.02

Extra-Ordinary Items

Exceptional and Extra Ordinary Items - 152.71

Profit Before Tax (974.03) 72.30

Less: Tax Expense (248.51) 7.21

Profit After Tax (725.52) 65.09

The Board's Report is based on the stand alone financial statements of the Company.

Operations:

For the financial year under review 2014-15, the Company's Export sales stood at INR 8,867 million as against INR 9,437 million in previous year whereas the Domestic Sales stood at INR 2,704 million as against INR 3,187 million in the last financial year.

The contribution made by Rice to the Company's business is INR 10,289 million as against Rs.11,080 million in the last financial year, while the Food Business also contributed INR 769 million as against INR 732 million in the previous year, a marginal growth over last year

The year saw decline in Basmati rice exports from India both in value and volume terms mainly due to surplus supply and lower international demand especially from Iran, which is the biggest importer of Indian Basmati Rice Also political instability in countries such as Iraq, Syria & Yemen contributed to the decline of Indian export of basmati rice. In addition, many importing countries of Basmati rice held back Indian Rice imported earlier and are now disposing that inventory instead of ordering new quantities. Also the Basmati Rice exporters had to bear high cost of Processing of Paddy and lower realization. Major highlights during the financial year being:

- Our Basmati Rice exports grew by 22% in volume Terms and 12% in value terms.

- Impressive growth in the volume of Basmati Rice in the markets of United Kingdom, Iran, United Arab Emirates, Sri Lanka, Bangladesh, Hong Kong, Israel, Qatar & Reunion.

- The private label business of Basmati Rice grew on the back of acquiring new clients & more buying from existing customers. New clients include from countries such as Brazil, Portugal, Bosnia & Herzegovina, Iran, Saudi Arabia & Paraguay etc. The Company focussed on spreading its foot prints across the globe and reaching out to new customers.

- In Saudi Arabia, our Private Label business has recorded a robust growth.

- Basmati Rice exports to Iran and United Kingdom recorded significant growth at 36% & 74% respectively

- We have recorded phenomenal growth in both value and volume terms in export of Basmati Rice to our JV Company M/s Al Dahra Kohinoor LLC (Abu Dhabi)

Listing at Stock Exchange

The Equity Shares of the Company are listed with BSE Limited and National Stock Exchange of India Ltd. The annual listing fee for the year 2015-16 has been paid to the Exchanges.

Corporate Governance

Your Company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as stipulated by the Stock Exchanges. Pursuant to clause 49 of the Listing Agreement, a report on the Corporate Governance , Certificate regarding Compliance, Secretarial Audit Report and Managing Director and CFO certification along with the Auditors Certificate have been made part of the Annual Report.

Auditors

M/s Rajender Kumar Singal & Associates LLP, Chartered Accountants, New Delhi, Statutory Auditors of the Company, holds office till the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits and they are not disqualified for re-appointment.

The Board pursuant to the provisions of Section 139, 142 and other applicable provisions of the Companies Act, 2013 and on the recommendation of the Audit Committee has considered the appointment of M/s Rajender Kumar Singal & Associates LLP, Chartered Accountants, New Delhi (Firm Registration No. 016379N), as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting to the conclusion of next Annual General Meeting.

Auditors Report

The Company has received the Auditors Report duly signed by M/s Rajender Kumar Singal & Associates LLP, Chartered

Accountants, New Delhi, and took note of the same. Further as mentioned in the Auditors Report, attention is drawn to Note No. 11(c) & 38(a)(i) to the financial statements, the board discussed the contention of the Auditor and is of the view that the losses incurred by the Wholly Owned Subsidiary is not going to affect the Company's investment in long run. Further as per advice received from legal experts and on the basis of merit of the case, there is a high probability that the income tax order will be set aside and the demand will be quashed. Accordingly, management is of the view that no provision in respect of the above demand is required to be made in the books of accounts.

Cost Auditors

The Cost Auditor M/s Cheena and Associates, appointed as Cost Accountants of the Company for the year 2014-15 has completed the audit of the cost record of the Company.

The Board pursuant to the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013 and Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof, for the time being in force), on the recommendation of the Audit Committee has approved the appointment of M/s Cheena & Associates, Cost Accountant Firm to conduct the audit of the cost records of the Company for the financial year ending on March 31, 2016 and remuneration to be paid subject to rectification by shareholders.

Secretarial Audit

The Board of Directors pursuant to the Provision of Section 205 of the Companies Act, 2013, has appointed M/s Vinod Aggarwal Associates, Company Secretary Firm, to conduct Secretarial Audit of the Company for the Financial Year 2015- 2016.

Secretarial Audit Report

The Secretarial Auditor M/s Vinod Aggarwal and Associates, Company Secretaries, appointed for the year 2014-15 has completed the secretarial audit of the Company. The Secretarial Audit Report as received from the Practicing Company Secretary is annexed to the Annual Report. As per the Secretarial Audit Report the Company has complied with all the applicable acts, laws, rules and regulations.

Internal Auditor

The terms of M/s SPMG & Co., Chartered Accountants, New Delhi, who was reappointed as an Internal Auditor of the Company for the Financial Year 2014-15 expired on 31st March, 2015.

Your Directors have approved their reappointment in the Board Meeting dated 28th May, 2015, for the financial year 2015-16.

Fixed Deposits

Your Company has not accepted any deposit from Public during the year under review.

Share Capital of the Company

The paid up Share Capital of the Company is amounting to Rs. 35,24,15,300/- comprising of 3,52,41,530 equity shares of Rs. 10/- each.

Board Meetings

The Board is headed by an executive Chairman. As on 31 March 2015, the Board of Directors consisted of Nine Directors, including Chairman, Joint Managing Directors, Woman Director, Independent Director and others.

There were five (5) Board Meetings held during the year 2014-15 and the gap between two meetings did not exceed 120 day.

Audit Committee Meetings

During the year under review, the Audit Committee met Four (4) times i.e. on 29th May, 2014, 13th August, 2014, 13th November, 2014 and 9th February, 2015 and the maximum time gap between any two consecutive meetings did not exceed 120 Days. The minutes of the meetings of the Audit Committee are noted by the Board.

Nomination and Remuneration Committee

The Board of Directors of the Company at their meeting held on 29th May, 2014, have approved the change in nomenclature of the Remuneration Committee to Nomination and Remuneration Committee and have revised their role. The recommendation of the Nomination and Remuneration Committee, the Board has formulated a Nomination and Remuneration Policy for selection and appointment of Directors, Senior Management and their remuneration.

Whistle Blower Policy/Vigil mechanism

The Company adopted its Whistle Blower Policy on 13th August 2014, more specifically required as per clause 49 of the Listing Agreement. The Whistle Blower Policy/Vigil Mechanism provides a mechanism for the director/employee to report violations, without fear of victimisation of any unethical behavior, suspected or actual fraud, violation of the Code of Conduct etc. which are detrimental to the organisation's interest. The said Policy is placed on the Company's website www.kohinoorfoods.in/investor

Risk Management

The Company has adopted several strategies for Risk Management to mitigate risks and uncertainties. Controls have been put in place to quickly and systematically identify, prioritise, monitor and mitigate such risks on a constant basis. This is a real- time and ever-evolving area, given the dynamic nature of the environment.

The Company has devised its risk management policy to ensure that the Company has an appropriate and effective Risk management system with appropriate Policies and process which carries out Risk assessment and ensures that Risk mitigation plans are in place. In addition, all the key risks get continuously deliberated and discussed at the Group Executive Committee level as well as the Business Unit level. The said Policy is placed on the Company's website www.kohinoorfoods.in/investor

Particulars of Loan given, Investment made, Guarantees given and Securities provided

Particulars of loans given, investments made, guarantees given and securities provided under section 186 of the Companies Act, 2013 are provided in the notes of standalone Financials statement.

STATUS OF PENDING LITIGATIONS BEFORE VARIOUS COURT / AUTHORITIES

1. The Company has preferred an appeal before the Income Tax Appellate Tribunal, New Delhi against the impugned Income Tax Assessment Order in respect of Assessment Years 2002-03 to 2008-09 in which additional income tax of Rs. 63.32 Cr ( Pr. Yr. 63.32 Cr) along with interest Rs. 31.55 Cr. (Pr. Yr.-Rs.31.55 Cr.) has been demanded. Subsequently, Company has deposited Rs. 13.50 Cr. "Under Protest" against the aforesaid demand.

Subsequently, during the last year, Hon'ble ITAT, New Delhi has passed its order on 21st July 2014 against the above appeal and has granted significant relief by deleting the addition of more than Rs. 110 Cr out of the total addition of Rs. 185 Cr. In view of the substantial material place on the record, Hon'ble ITAT has remanded back certain issues to the Assessing Officer for fresh adjudication. As per the partial appeal order effect received from the Dept., the tax demand and interest demand stand reduced to Rs.30.23 Cr and Rs.24.83 Cr. respectively.

Against the above ITAT order, appeal filed by the Income Tax Dept. has been dismissed by Hon'ble Delhi High Court whereas Company's appeal filed before Hon'ble Delhi High Court is pending to be heard.

The Company has preferred another appeal before the Income Tax Appellate Tribunal, New Delhi against the impugned Income Tax Assessment Order in respect of Assessment Years 2009-10 in which income tax of Rs. 17.90 Cr., along with interest Rs. 10.54 Cr. has been demanded.

The Company has also filed objections before the Dispute Resolution Panel, New Delhi against the draft assessment order passed by the Income Tax Dept. in respect of Assessment Years 2011-12. The tax effect of the additions made is estimated at Rs. 26.89 Cr.

As per the advice received from legal experts and on the basis of merit of the case, there is a high probability that the aforesaid impugned orders will be set aside and the demand will be deleted. Accordingly, management is of the view that no provision in respect of the above demand is required to be made in the books of accounts.

2. The Company has filed a suit for declaration, and mandatory

injunction against the Reserve Bank of India and Punjab National Bank before the Hon'ble High Court, New Delhi for loss of Rs. 27.49 Cr. arising out of forex derivative transactions.

However recently the Company and PNB have entered into a mutual agreement to resolve the pending Derivative matter under which the company will pay an agreed lump sum amount of Rs. 25.00 crores, in respect of disputed liability and will jointly withdraw the case in due course.

3. The Board of Trustee of the port of Mumbai has filed a money

suit for recovery of Rs. 9.64 Cr. towards alleged outstanding demurrage charges against which the Company has filed its counter claim of Rs. 10.88 Cr. towards the financial losses, interest on the investment, refund of the license fees, refund of the demurrage charges, compensation and damages etc.

4. There are few more cases which are pending before the various authorities and the same has been duly disclosed under Notes to the Account.

Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earning and Outgo

The particulars as prescribed in sub-section (3) of section 134 of the Companies Act, 2013, read with Companies (Accounts) Rules, 2014 are enclosed as Annexure B to this Report.

Extract of Annual Return

In accordance with Section 134(3)(a) of the Companies Act,2013, the extract of the annual return in Form No. MGT – 9 and is enclosed as Annexure C to this Report.

Information regarding Employees

Information as per Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rule 2014 read with Companies (Particulars of Employee) Rules 1975, the names and other particulars of Employees are given as under:

I) Name of the Employees, Designation/Nature of Duties,

Gross Remuneration, Qualification, Age, Total Experience

(in years), Date of Commencement of Employment, the percentage of Equity Shares held, employed throughout the year and in receipt of remuneration of Rs. 60,00,000/- or more per annum are as under.

a) Shri Jugal Kishore Arora, Whole time Director designated as Chairman, Rs. 96,00,000/-, Graduate, 72 years, 29 years and he is the promoter of the Company, 17.15% of total Equity.

b) Shri Satnam Arora, designated as Joint Managing Director, Rs. 1,14,52,455/-, Post Graduate, 66 years, 29 years and he is the promoter of the Company, 15.26% of total equity.

c) Shri Gurnam Arora, designated as Joint Managing Director, Rs. 1,15,82,043/-, Graduate, 65 years, 29 years and he is the promoter of the Company, 17.31% of total equity.

ii) Employed part of the year and in receipt of remuneration of Rs. 5,00,000/- or more per month during any part of the year under consideration.: Nil

Disclosers as required under section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of management Personnel) Rules, 2014, is annexed as annexure D to this report.

Management's Discussion and Analysis Report

Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

Directors' Responsibility Statement

Pursuant to section 134(5) of The Companies Act, 2013, the Directors confirm that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating material departures;

b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

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

d) ) The Directors had prepared the annual accounts on a going concern basis;

e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and

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

Awards & Recognitions

Kohinoor Foods is no stranger to Awards & Recognitions. Since its inception, the company has been earning awards and recognition like consumer validated Super Brand Award (thrice in series), Reader's Digest Most Trusted Brand award (4 times in a row), Power Brand Award, Guinness Book of World Record (for making World's Largest Biryani), National award for Export Excellence, Brand Equity Award & many APEDA awards.

Corporate Social Responsibility

As per Companies Act, 2013, all companies having net worth of Rs 500 Crore or more, or turnover of Rs.1,000 Crore or more or a net profit of Rs. 5.00 Crore or more during any financial year are required to constitute a Corporate Social Responsibility (CSR) Committee of Board of Directors comprising three or more directors, at least one of whom should be an Independent Director and such Company shall spend 2% of the average net profits of the Company's profit immediately preceding financial year.

Accordingly a detailed CSR Policy was framed by the Company with the approvals of the CSR Committee and Board taken on 29th May, 2014. The Policy, inter alia, covers the following:

- Philosophy

- Scope

- List of CSR activities

- Modalities of execution of projects/programmes

- Implementation through CSR Cell

- Monitoring assessment of projects/programmes

CSR Policy gives an overview of the projects or programmes which are proposed to be undertaken by the Company in the coming years.

2. The composition of the CSR Committee

A Committee of the directors, titled 'Corporate Social Responsibility Committee', was constituted by the Board in its meeting held on 29th May, 2014 with the following members:

Mr. Sandeep Kohli

Mr. Maharaj Kishan Trisal

Mr. Satnam Arora

Mr. Gurnam Arora

As the Average net Profit/(Loss) of the Company for last three financial years prior to 2014-15 comes to Rs.29.69 crores, average net loss and therefore the company is not required to spend any amount as prescribed for CSR expenditure.

Although the company is not statutorily required to expend 2% of the average net profit (INR) of the last three financial years, being average net loss. However the company voluntarily spent an amount of Rs. 18.38 lakhs in the last financial year on this account by doing various CSR activities.

Kohinoor envisions to improve lives in communities we live around, protect workplace rights, respect people, support missions that help people have a better life, provide good jobs, world class quality products and a healthy environment to all of us around.

At Workplace, Kohinoor Foods maintains high standards for fair and dignified treatment of all the people who work for our company. For all of its employees, it is not just a place to work, but like another home and everybody in is like a big family, closely bonded with each other. Kohinoor Foods also believes that a company is as good as the people who work for it - their combined talents; skills, knowledge, experience and passion make a company what it is. Hence, company's continuous goal is to inspire and motivate its people to hone their talents, increase their knowledge & skills and achieve extraordinary results at their workplace. In this endeavour we have offered subsidized meals to our employees at a very nominal cost. The company also considers it as its responsibility to support the community that we live in. Kohinoor Foods supports 'Maitri' an NGO working for widows on Vrindavan to make difference in their lives. It supported CEQUIN (Centre for Equity & Inclusion), a non-profit organisation working towards the empowerment of marginalised and excluded sections of the population especially the women. Due to unprecedented floods in Jammu & Kashmir, Kohinoor Foods, supplied Ready to Eat Processed Food products to the victims of that region and helped them to normalcy. In addition we also supported the needy girl child's education at Himalayan School Society, Dehradun and also to Rotary South end Charitable Trust towards Saving Lives, to contribute positively to the society. Being environmentally conscious company and as part of Go Green campaign, we have put up water treatment plant in our rice factory (Murthal), where treated water is used for watering the lawn, garden and irrigate the fields. Adherence to global human rights standards, No minor labour, Fair trade practices, complete Medical facilities for its people, Safe & sound working environment are the things that Kohinoor Foods take utmost care about.

The CSR Policy may be accessed on the Company's website at the link : www.kohinoorfoods.in/investor Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a Sexual Harassment Policy in compliance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment. The Sexual Harassment Committee, has been set up to redress complaints received regarding sexual harassment.

The Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Declaration by Independent Directors

The Company has received necessary declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.

Board Evaluation

In accordance with Clause 49 of the Listing Agreement, it is mandatory that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the director being evaluated.

The evaluation of all the Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Corporate Governance Report section in the Annual Report. The Board approved the evaluation results as collated by the Nomination and Remuneration Committee. None of the Independent Directors are due for re-appointment.

Training of Independent Directors

The Company Secretary of the company conducted a details training programmes to provide/update the changes in the Listing Agreement/Companies Act and other relevant act to the Independent Directors.

Further, the Company issues a formal letter of appointment to Independent Directors outlining their roles, responsibilities, functions and duties as an Independent Director. The format of the letter of appointment is available on the Company's website at the link: www.kohinoorfoods.in/investor

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1 .Details relating to deposits covered under Chapter V of the Act.

2. Details relating to transfer in reserve.

3. Issue of equity shares with differential rights as to dividend, voting or otherwise.

4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

Acknowledgment

Your Directors acknowledge with gratitude, the commitment and dedication of the employees at all levels that has contributed to the growth and success of the Company. Your Directors also put on record their appreciation and thanks to the Authorities and millions of consumers who have reposed faith in the products of your Company.

For and on Behalf of the Board

Sd/-

Jugal Kishore Arora Faridabad

Chairman August 13th, 2015


Mar 31, 2014

Dear Members,

The following report should be read in conjunction with the audited financial statements and notes for the year ended March 31, 2014 and the audited financial statements and notes for the year ended March 31, 2013. This report contains forward looking statements, which may be identified by their use of words like ''plans'', ''expects'', ''will'', ''anticipates'', ''believes'', ''intends'', ''projects'', ''estimates'' or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the company''s strategy for growth, market position, expenditures, and financial results, are forward looking statements. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company''s actual results, performance or achievements could thus differ materially from those projected in any such forward looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

Company-In General

Synonymous with the fine taste of India in its absolute authentic form, the sole objective of Kohinoor Foods Limited, since its inception, has been to make the world experience the true Indian flavor. Just some of the reasons why it offers an extensive range that caters to consumers'' need in all parts of the world - a wide variety of Basmati Rice, Wheat Flour, Ready to Eat Curries & Meals, Readymade Gravies, Cooking Pastes, Chutney''s, Spices and Seasonings to Frozen Breads, Ghee, Snacks & Paneer (Indian Cottage Cheese). Today, the most powerful brand of the Company "Kohinoor" is a household name not only in India, but also in the countries like USA, UK, UAE, Canada, Australia, Middle East, Singapore, Japan, Mauritius & other European countries. As of now, the brand ''Kohinoor'' is known in more than 60 countries worldwide.

The Directors have pleasure in presenting the 25th Annual Report and the Audited Annual Accounts of the Company for the Financial Year ended 31st March, 2014.

Financial Overview

The year under review has been quite promising and at the same time challenging for the Company, with an overall turnover growth of 16% (approx) at INR 12649.32 Million. The Export Sales grew by 38% (approx) vis-a-vis last year''s performance. The financial highlights for the year ending 31st March, 2014 are as under:

(Rs. In Million) Particulars FY''14 FY''13

Total Turnover 12649.32 10896.62 Profit Before Interest, Depreciation and Tax (PBIDT) 1202.19 1164.632 Profit/(Loss) Before Exceptional and Extra-Ordinary Items 225.02 160.04 Exceptional and Extra Ordinary Items 152.71 0.00 Profit Before Tax 72.30 160.04 Less: Tax Expense 7.21 62.65 Profit After Tax 65.09 97.40

Dividend

The Directors do not recommend any dividend for the financial year2013-14.

Re-Appointment/Appointment of Directors

In accordance with the provisions of the Companies Act, 2013, Mr. Satnam Arora, Director retires by rotation at the ensuing Annual General Meeting and being eligible offer himself for reappointment. Your Directors recommend his re-appointment.

Mr. Khedaim Abdulla Saeed Faris Alderei, (holding DIN 06699678) was appointed as an Additional Director by the Board at its meeting held on 5th December, 2013. According to the provisions of Section 161 of the Companies Act, 2013, he holds that office upto the date of this Annual General Meeting be and is hereby appointed as Director liable to retire by rotation of the Company, subject to approval of Shareholder in General Meeting.

Mr. Maharaj Kishen Trisal and Mr. Satish Chander Gupta were appointed as an Independent Directors of the Company, liable to retire by rotation and their term expires at this Annual General Meeting.

Pursuant to the provisions of section 149 of the Act, which came in to effect from April 1, 2014, every listed public company is required to appoint Independent Directors, who are not liable to retire by rotation.

Mr. Vijay Burman, Mr. Sandeep Kohli, Mr. Maharaj Kishen Trisal and Mr. Satish Chander Gupta, Non-Executive Directors of the Company, have given a declaration to the Board that they meet the criteria of independence as provided under section 149(6) of the Act. In the opinion of the Board, each of these directors fulfil the conditions specified in the Act and the Rules framed thereunder for appointment as Independent Director and they are independent of the management. The Nomination Committee has recommended the appointment of these directors as Independent Directors from April 1, 2014 upto March 31, 2016.

Compliance with Section 212:

As required under the Listing Agreements with the Stock Exchanges, a Consolidated Financial Statement of the Company and all its Subsidiaries is attached. The Consolidated Financial Statements have been prepared in accordance with the relevant Accounting Standards as prescribed under Section 211(3C) of the Companies Act, 1956 ( "Act"). These financial statements disclose the assets, liabilities, income, expenses and other details of the Company, its subsidiaries and associate companies.

Pursuant to the provision of Section 212(8) of the Act, the Ministry of Corporate Affairs vide its circular dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the Subsidiary Companies with the Balance Sheet of the Company. A statement containing brief financial details of the Company''s subsidiaries for the financial year ended March 31,2014, is included in the Annual Report. The annual accounts of these Subsidiaries and the related detailed information will be made available to any member of the Company/ its Subsidiaries seeking such information at any point of time and are also available for inspection by any member of the Company/ its Subsidiaries at the registered/ Corporate office of the Company. The annual accounts of the said Subsidiaries will also be available for inspection, as above, at the Head Office/Registered Offices of the said respective Subsidiary Companies. The Company shall furnish a copy of details of annual accounts of subsidiaries to any member on demand.

Internal Control System

Your Company has well established Internal Control Procedures across its various locations, commensurate with its size and nature of operations to ensure that financial and Operating Reporting Systems are reliable and that all material risks are evaluated. The Internal audit function is adequately resourced and reports independently to the Audit Committee of the Board. In the opinion of the management and the internal auditors, there exists adequate safeguard against fraud and negligence within the Company.

Listing at Stock Exchange

The Equity Shares of the Company are listed with BSE Limited and National Stock Exchange of India Ltd. The annual listing fee for the year 2014-15 has been paid to the Exchanges.

Corporate Governance

Your company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as stipulated by the Stock Exchanges. A separate report on Corporate Governance and its compliance by the company is attached as Annexure ''A'' to this report. The Company has also taken Auditors Certificate on its Compliance and the same is attached with its Annual Report.

Auditors

M/s Rajender Kumar Singal & Associates LLP, Chartered Accountants, New Delhi, Statutory Auditors of the Company retires at the conclusion of this Annual General Meeting and offer themselves for re-appointment.

The Board pursuant to the provisions of Section 139, 142 and other applicable provisions of the Companies Act, 2013 and on the recommendation of the Audit Committee has considered the appointment of M/s Rajender Kumar Singal & Associates LLP, Chartered Accountants, New Delhi (Firm Registration No. 016379N), as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting to the conclusion of Fourth consecutive Annual General Meeting subject to ratification by the Shareholders Annually at every Annual General Meeting to be held till the year 2018.

The Board recommends the appointment of M/s Rajender Kumar Singal & Associates LLP, Chartered Accountants, New Delhi, who have given their consent and a certificate to the effect that their appointment, if made, will be within the limit specified under Section 141 of the Companies Act, 2013.

Auditors Report

The Company has received the Auditors Report duly signed by M/s Rajender Kumar Singal & Associates LLP, Chartered Accountants, New Delhi, and took note on the same. Further as mentioned in the Auditors Report, attention is drawn to Note No. 11(c) & 38(a)(i) to the financial statements, the board discussed the contention of the Auditor and is of the view that the losses incurred by the Wholly Owned Subsidiary is not going to affect the company''s investment in long run. Further as per advice received from legal experts and on the basis of merit of the case, there is a high probability that the income tax order will be set aside and the demand will be quashed. Accordingly, management is of the view that no provision in respect of the above demand is required to be made in the books of accounts.

Cost Auditors

The Cost Auditor M/s Cheena and Associates, appointed as Cost Accountants of the Company for the year 2013-14, has completed the audit of the cost record of the company and will submit his report within 180 days from the close of Financial Year.

The Board pursuant to the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013 and Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof, for the time being in force), on the recommendation of the Audit Committee has approved the appointment and remuneration of M/s Cheena & Associates, Cost Accountant Firm to conduct the audit of the cost records of the Company for the financial year ending on March 31,2015.

Secretarial Audit Report

As a measure of good corporate governance practice, the Board of Directors of the company appointed M/s Vinod Aggarwal and Associates, Company Secretaries to conduct Secretarial Audit of the company for the year 2013-14. The Secretarial Audit Report as received from the Practicing Company Secretary is annexed to the Annual Report. As per the Secretarial Audit Report the company has complied with all the applicable acts, laws, rules and regulations.

Secretarial Audit

The Board pursuant to the Provision of Section 205 of the Companies Act, 2013 has appointed M/s Vinod Aggarwal Associates, Company Secretary Firm, to conduct Secretarial Audit of the Company for the Financial Year 2014-2015.

Fixed Deposits

Your company has not accepted any deposit from Public during the year under review.

Share Capital of the Company

During the year the paid up Share Capital of the Company has increased from Rs. 28,19,32,240/- to Rs. 35,24,15,300/- by issuing 70,48,306 equity shares of Rs. 10/- each at a premium of Rs. 150/- per share to Al Dahra International Investments LLC, UAE (Investor) on preferential basis.

STATUS OF PENDING LITIGATIONS BEFORE VARIOUS COURT/AUTHORITIES

1. The Company has preferred an appeal before the Income Tax Appellate Tribunal, New Delhi against the impugned Income Tax Assessment Order in respect of Assessment Years 2002-03 to 2008-09 in which additional income tax of Rs. 63.32 Cr. along with interest of Rs. 31.55 Cr. has been demanded. However the company has deposited a sum of Rs. 13.50 Cr. "Under Protest" against the above pending demand till date.

In respect of above appeal, Hon''ble Income Tax Appellate Tribunal, New Delhi in its order dated 21st July 2014 has granted significant relief by deleting the majority of additions made by the Income Tax Authorities. The resultant tax effect of the same is estimated at Rs.38.78 Cr. (appx.) for Income Tax and Rs. 19.38 Cr. (appx.) for Interest Apart from above, certain issues have been remanded back to the Assessing Officer for fresh adjudication in view of the substantial material placed on records by the Company before Hon''ble ITAT, New Delhi. As per the opinion of the legal experts and on the basis of the merit of the case, there is a high probability that the item remanded back to the Assessing Officer will also be decided in Company''s favour in due course.

The Company has preferred another appeal before the Income Tax Appellate Tribunal, New Delhi against the impugned Income Tax Assessment Order in respect of Assessment Year 2009-10 in which income tax of Rs. 17.90 Cr. along with interest of Rs. 10.54 Cr. has been demanded.

The Company has also filed objection before the Dispute Resolution Panel, New Delhi against the draft Assessment Order passed by the Income Tax Department, in respect of Assessment Year 2010-11. The Tax effects on the additions made for AY 2010-11 is estimated at Rs. 20.75 Cr.

As per the opinion of the legal experts and on the basis of the merit of the case coupled with the relief granted by Hon''ble Income Tax Appellate Tribunal, New Delhi in its order dated 21st July 2014, major relief is expected to be received in subsequent years as well in respect of the additions made on the identical issues.

2. The Company has filed a suit for declaration, and mandatory injunction against the Reserve Bank of India and Punjab National Bank before the Hon''ble High Court, New Delhi for loss of Rs. 27.49 crores, arising out of forex derivative transactions.

3. During the year the Company and HDFC Bank have entered into a mutual agreement under which the company will pay an agreed amount against the total amount of Rs. 39.50 crores, in respect of disputed liability arises on account of forex derivatives transaction, as mentioned in the Previous Year Annual Report and will jointly withdraw the case.

4. The Board of Trustee of the port of Mumbai has filed a money suit for recovery of Rs. 9.63 crores towards alleged outstanding demurrage charges against which the company has filed its counter claim of Rs. 10.88 crores towards the financial losses, interest on the investment, refund of the license fees, refund of the demurrage charges, compensation and damages etc.

5. There are few more cases which are pending before the various authorities and the same has been duly disclosed under Notes to the Account.

Information Regarding Conservation of Energy etc.

Information required under Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 as amended from time to time is given in Annexure ''B'' forming part of this report.

Information regarding Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the companies (Particulars of Employee) Rules 1975 the names and other particulars of Employees are given as under:

i) Name of the Employees, Designation/Nature of Duties, Gross Remuneration, Qualification, Age, Total Experience (in years), employed part of the year and in receipt of remuneration of Rs. 60,00,000/- or more per annum are as under:

a) Shri Jugal Kishore Arora, Whole time Director designated as Chairman, Rs. 96,61,524/-, Graduate, 71 years, 28 years and he is the promoter of the company.

b) Shri Satnam Arora, designated as Joint Managing Director, Rs. 1,10,74,131/-, Post Graduate, 65 years, 28 years and he is the promoter of the company.

c) Shri Gurnam Arora, designated as Joint Managing Director, Rs. 1,10,24,256/-, Graduate, 64 years, 28 years and he is the promoter of the company.

ii) Employed part of the year and in receipt of remuneration of Rs. 5,00,000/- or more per month during any part of the year under consideration.: Nil

Directors'' Responsibility Statement

Pursuant to section 134(5) of The Companies Act, 2013, the Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b) The Director had selected such accounting policies and applied 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;

c) The Director had 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;

d) The Director had prepared the annual accounts on a going concern basis;

e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

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

Awards & Recognitions

Kohinoor Foods is no stranger to Awards & Recognitions. Since its inception, the company has been earning awards and recognition like consumer validated Super Brand Award (thrice in series), Reader''s Digest Most Trusted Brand award (4 times in a row), Power Brand Award, Guinness Book of World Record (for making World''s Largest Biryani), National award for Export Excellence, Brand Equity Award & many APEDA awards. During the year your Company has been Ranked as India''s Most Trusted Packaged Rice Brand in a study covering 19000 brands across 16 cities by Trust Research Advisory.

Corporate Social Responsibility

Kohinoor also envisions to improve lives in communities we live around, protect workplace rights, respect people, support missions that help people have a better life, provide good jobs, world class quality products and a healthy environment to all of us around.

At Workplace, Kohinoor Foods maintain high standards for fair and dignified treatment of all the people who work for our Company. For all of its employees, it is not just a place to work, but like another home and everybody in it is like a big family, closely bonded with each other.

Kohinoor Foods also believes that a Company is as good as the people who work for it - their combined talents, skills, knowledge, experience and passion make a Company what it is. Hence, Company''s continuous goal is to inspire and motivate its people to hone their talents, increase their knowledge & skills and achieve extraordinary results at their workplace. In this endeavour we have offered subsidized meals to our employees at a very nominal cost.

The Company also considers it as its responsibility to support the community that we live in. Kohinoor Foods supports ''Maitri'' an NGO working for widows at Vrindavan to make difference in their lives. It also supports'' Smt. Nagendram Nandi Nelayam Trust'', the non-governmental organization working for animals, environment and education. We have supported the needy girl child''s education at Him Jyoti School, Dehradun and also distributed blankets during winters for the under privileged & homeless people to help them with basic necessities of life on regular basis.

Being environmentally conscious company and as part of Go Green Campaign, we have put up water treatment plant in our rice factory (Murthal), where treated water is used for watering the lawn, garden and irrigation of the fields.

Adherence to global human rights standards, No minor labour, Fair trade practices, complete Medical facilities for its people, Safe & sound working environment are the things that Kohinoor Foods takes utmost care about.

CSR Committee

The Ministry of Corporate Affairs has notified Section 135 and Schedule VII of the Companies Act 2013 as well as the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014, which comes into effect from April 1,2014.

As per the new Act, every company, having a net worth of Rs 500 crore or a turnover of Rs 1,000 crores or net profit of Rs 5 crore, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility activities. The CSR activities should not be undertaken in the normal course of business and must be with respect to any of the activities mentioned in Schedule VII of the 2013 Act. Accordingly the Board of your company has constituted the CSR committee as per the Act to monitor all the activities to be undertaken in the year 2014- 15.The members of the CSR Committee are as under:

Mr. Sandeep Kohli

Mr. Maharaj Kishan Trisal

Mr. Satnam Arora

Mr. Gurnam Arora

Sexual Harassment Committee

As per the recent judgment given by Honourable Supreme Court of the India, every employer has to constitute a committee to prevent Sexual Harassment at work place. In view of the aforesaid ruling, during the year your Company has constituted the said committee to comply with the Supreme Court directions.

Acknowledgment

Your Directors acknowledge with gratitude, the commitment and dedication of the employees at all levels that has contributed to the growth and success of the company. Your Directors also put on record their appreciation and thanks to the Authorities and millions of consumers who have reposed faith in the products of your company.

FOR AND ON BEHALF OF THE BOARD

Sd/- Faridabad JUGAL KISHORE ARORA 13th August, 2014 CHAIRMAN


Mar 31, 2013

The Directors have pleasure in presenting the --- Annual Report and the Audited Annual Accounts of the Company for the financial year ended 31st March, 2013.

Financial Overview

The year under review has been quite promising and challenging for the Company, with an Overall Turnover growth of 13% (approx) and the Export Sales grew by 22% (approx) vis-a-vis last year''s performance. The financial highlights for the year ending 31st March, 2013 are as under:

Particulars FY''13 FY''12

Total Turnover 10896.62 9,649.11

Profit Before Interest, Depreciation 1164.63 240.22 and Tax (PBIDT)

Profit/(Loss) Before Exceptional and 160.04 (761.15) Extra-Ordinary Items

Exceptional and Extra Ordinary Items 0.00 2997.79

Profit Before Tax 160.04 2236.64

Less: Tax Expense 62.65 404.14

Profit after Tax 97.40 1832.50

Figures in Rs. Million

Operations:

For the year under review, the company has exhibited positive growth in the Export market As shown below the Export Sales grew by 21.91% amounting to Rs. 6,849 million against Rs. 5,618 million in previous year while the Domestic Sales stood at Rs. 4,026 million as against Rs. 3,983 million in the previous year.

This year the major contributors towards the company''s growth were:

Focus on Middle East: The year saw increased growth of Basmati Rice sales that includes private label as well in the Middle East markets comprising of Iran, Bahrain, Iraq, Israel, Jordan, Kuwait, Lebanon, Syria & Yemen. The company embarked on major brand promotion campaign in Iraq especially. in Kurdistan (above the line activity) in the first quarter of the year that consists of Television, Print & Radio for its flagship brand Kohinoor. Tremendous consumer awareness was generated through successful media campaign and Kohinoor was able to distinguish itself from the other available brands and emerge as a respectable name for basmati rice in the Iraqi market. In Saudi Arabia, we have given Kohinoor a solid foundation and our products are present in all the leading supermarkets viz., Panda, Carrefour, Danube, Bin Dawood, Lulu, Nesto, Tammimi and Star Markets besides other Retail Chains. In Kuwait, Bahrain, Oman & Lebanon, the company undertook promotional programs and consistent initiative in these markets to drive long-term value to our customers.

New Clients added: In rice business, new clients were added some of the prestigious ones from countries like Benin, Cyprus, Germany, Iran, Israel, Italy, Jordan, Kuwait, Lebanon, Maldives, New Zealand, Poland, Reunion & Saudi Arabia.

New markets added: Some of the highlights of the company''s export business comprised addition of new markets such as Benin, Tanzania, Ivory Coast, Algeria, & Ukraine. The company is focused on spreading its foot prints across the globe and reaching out to new customers. Plan to identify and add new fast growing markets in the next financial year to increase our width of distribution in both Food & Rice products.

Growth across continents: Basmati rice business grew in almost all geographies globally that we are present in e.g., Asia Pacific, Middle East, Africa, United Kingdom & Europe.

Launch of New Products: In our endeavor to offer to new products to our consumers, your company launched Kohinoor Pure Ghee in the select markets of Zambia, Oman, Bahrain, USA, Hong Kong, Kuwait, Australia, New Zealand & Singapore to a positive response. In future this product is expected to contribute to the sales revenue of Food Business Division. In addition to the pure ghee, your company launched Instant Mixes, Namkeens (Indian Savories), Indian Sweets in the select market globally. Besides we continue to focus on Ambient Range- Cooking Paste, Cooking Sauces & Ready to Eat to cater to the varying tastes and requirements of our consumers across the globe.

Subsidiaries: Exports of Basmati Rice to our wholly owned subsidiary in United Kingdom- Indo European Foods Limited have recorded an increase in revenue by 17%. We are available in major super markets across United Kingdom such as Booker Cash & Carry, Tesco, Lidl, Sainsbury, Morrisons & Kerry Foods. Our export to USA subsidiary- Kohinoor Foods USA Inc has posted a decline in revenues due to various challenges being faced by Indian exporters. However, we are reaching close to their expectations but still not there yet, the issue has driven the import cost by almost 12-15% more.

EXPORTMARKETS Export- Basmati Rice

This year, in the Export of Basmati Rice, the company did the business of around Rs. 5,178 million as against Rs. 3,692 million in the previous financial year. Though the company did business in more than 60 countries this year and recorded a growth of 40.26% in comparison to the last year business. Some of the countries which recorded significant growth in Basmati Rice exports were Australia, Reunion, Angola, Iran, Iraq, Jordan, Israel & United Kingdom.

Postal Ballot

A Notice dated 12th July, 2013 was circulated to the Shareholders seeking approval under section 81(1A) of the Companies Act, 1956 for allotment of 20% equity Shares to Al Dahra International Investment LLC, Abu Dhabi with such other term and condition as may be stipulated and also for consent under Section 293(1)(a) & 293(1)(d) of the Companies Act, 1956 by way of voting through postal ballot process in terms of Section 192Aof the Companies Act, 1956 read with the rules made there under.

Mr. Vinod Aggarwal, Practicing Company Secretary was appointed as the Scrutinizer for conducting the postal ballot process.

In terms of the report dated 22nd August, 2013 submitted by Mr. Vinod Aggarwal, Scrutinizer, the Chairman declared that the consent of the Shareholders has been obtained with, requisite majority.

Dividend

Your Directors do not recommend any dividend for the financial year2012-13.

Re-Appointment / Appointment / Resignation of Directors

In accordance with the provisions of the Companies Act, 1956, Mr. Vijay Burman and Mr. Sandeep Kohli, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment. Your Directors recommend their re-appointment.

Mr. Maharaj Kishen Trisal was appointed as an Additional Director by the Board at its meeting held on 10th November, 2012. According to the provisions of Section 260 of the Companies Act, 1956, he hold that office up to the date of this Annual General Meeting. As required by Section 257 of the Act, a notice has been received from a member signifying his intention to propose his appointment as a Director, along with deposit of rupee five hundred.

Your Directors recommend this resolution for approval of the members.

Mr. Satish Chander Gupta was appointed as an Additional Director by the Board at its meeting held on 14th August, 2013. According to the provisions of Section 260 of the Companies Act, 1956, he hold that office up to the date of this Annual General Meeting. As required by Section 257 of the Act, a notice has been received from a member signifying his intention to propose his appointment as a Director, along with a deposit of rupee five hundred.

Your Directors recommend this resolution for approval of the members.

Mr. Vijay Prakash Agarwal, Independent Directorof the company has resigned from the post of Directorship w.e.f. 13th February, 2013, the board has accepted the same and appreciated his effort for providing great contribution to the company for past so many years.

Compliance with Section 212:

As required under the Listing Agreements with the stock exchanges, a Consolidated Financial Statement of the Company and all its subsidiaries is attached. The Consolidated Financial Statements have been prepared in accordance with the relevant Accounting Standards as prescribed under Section 211(3C) of the Companies Act, 1956 ("Act"). These financial statements disclose the assets, liabilities, income, expenses and other details of the Company, its subsidiaries and associate companies.

Pursuant to the provision of Section 212(8) of the Act, the Ministry of Corporate Affairs vide its circular dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the Subsidiary Companies with the Balance Sheet of the Company. A statement containing brief financial details of the Company''s subsidiaries for the financial year ended March 31,2012 is included in the Annual Report. The annual accounts of these subsidiaries and the related detailed information will be made available to any member of the Company/its subsidiaries seeking such information at any point of time and are also available for inspection by any member of the Company/its subsidiaries at the registered/Corporate office of the Company. The annual accounts of the said subsidiaries will also be available for inspection, as above, at the head office/registered offices of the said respective subsidiary companies. The Company shall furnish a copy of details of annual accounts of subsidiaries to any member on demand.

Internal Control System

Your Company has well established Internal Control Procedures across its various locations, commensurate with its size and nature of operations to ensure that financial and Operating Reporting Systems are reliable and that all material risks are evaluated. The Internal audit function is adequately resourced and reports independently to the Audit Committee ofthe Board. In the opinion of the management and the internal auditors, there exists adequate safeguard against fraud and negligence within the company.

Listing at Stock Exchange

The Equity Shares of the Company are listed with Bombay Stock Exchanges Ltd. and National Stock Exchange of India Ltd. The annual listing fee for the year 2013-14 has been paid to the Exchanges.

Corporate Governance

Your company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as stipulated by the Stock Exchanges. A separate report on Corporate Governance and its compliance by the company is attached as Annexure ''A'' to this report. The Company has also taken Auditors Certificate on its Compliance and the same is attached with its Annual Report.

Auditors

The Board on the recommendation of the Audit Committee has considered the appointment of M/s Rajender Kumar Singal & Associates, Chartered Accountants, New Delhi ( Firm Registration No. 016379N), as a Statutory Auditors of the Company at the ensuing Annual General Meeting.

The Board recommends the appointment of M/s Rajender Kumar Singal & Associates, Chartered Accountants, New Delhi, who have given their consent and a certificate to the effect that their appointment, if made, will be within the limit specified under Section 224(1B) of the Companies Act, 1956.

M/s. Nath Ahuja & Co., Statutory Auditors of the Company has resigned from the Company effective at the conclusion of forthcoming Annual General Meeting of the Company. The Board hereby record appreciation for the service rendered by them during their tenure.

Auditors Report

The Company has received the Auditors Report duly signed by M/s Nath Ajuja & Co., and took note on the same. Further as mentioned in the Auditors Report attention is drawn to Note No. 11(c) & 39(a)(i) to the financial statement, the board discussed the contention of the Auditor and is of the view that the losses incurred by the wholly owned subsidiary is not going to affect the company''s investment in long run. Further as per advice received from legal experts and on the basis of merit of the case, there is a high probability that the income tax order will be set aside and the demand will be quashed. Accordingly, management is of the view that no provision in respect of the above demand is required to be made in the books of accounts.

Cost Auditors

The Cost Auditor M/s H. Tara & Associates, appointed as Cost Accountants of the Company for the year 2012-13, has completed the audit of the cost record of the company and will submit his report within 180 days from the close of Financial Year.

The Board has appointed M/s Cheena and Associates, Cost Accountants, as Cost Auditors of the Company as required under Section 233B of the Companies Act, 1956 for the Financial Year 2013-14 for conducting the audit of the Cost Records of the company.

Secretarial Audit Report

As a measure of good corporate governance practice, the Board of Directors of the company appointed M/s Vinod Aggarwal and Associates, Company Secretaries to conduct Secretarial Audit of the company. The Secretarial Audit Report as received from the Practicing Company Secretary, for the Financial Year ended March, 31,2013 is annexed to the Annual Report. As per the Secretarial Audit Report the company has complied with all the applicable acts, laws, rules and regulations.

Fixed Deposits

Your company has not accepted any deposit from Public during the year under review.

Share Capital of the Company

In the last Annual General Meeting of the Company, the authorized share capital has been increased from Rs. 50 crores to 75 crores. The Company has paid the Stamp Duty and all the Statutory Compliances in this regard has been completed.

STATUS OF PENDING LITIGATIONS BEFORE VARIOUS COURT/AUTHORITIES

1.The Company has preferred an appeal before the Income Tax Appellate Tribunal, New Delhi against the impugned Income Tax Assessment Order in respect of Assessment years 2002-03 to 2008-09 in which additional income tax of Rs. 63.32 Cr ( Pr. Yr. 64.04 Cr.) along with interest of Rs. 31.55 Cr. (Pr. Yr.-Rs.31.73 Cr.) has been demanded. As per the advice received from legal experts and on the basis of merit of the case, there is a high probability that the impugned order will be set aside and the demand will be deleted. Accordingly, management is of the view that no provision in respect of the above demand is required to be made in the books of accounts. However during the current financial year the company has deposited Rs. 6.00 Cr. "Under Protest" against the above pending demand.

2.The company has filed a suit for declaration, and mandatory injunction against the Reserve Bank of India and Punjab National Bank before the Hon''ble High Court, New Delhi for loss of Rs. 27.49 crores arising out of forex derivative transactions.

3.The company has filed a suit for declaration and mandatory injunction against the Reserve Bank of India and HDFC Bank before the Hon''ble High Court, New Delhi for loss of Rs. 39.50 crores (previous year 39.22 crores) arising out of forex derivative transactions. An Application has also been filed by the HDFC Bank Ltd., before DRT Mumbai, for recovery of dues amounting to Rs. 8.69 crores (previous year Rs. 72.84 lakhs). Against the aforesaid order the company has filed an appeal with DRAT.

4.The Board of Trustee ofthe port of Mumbai has filed a money suit for recovery of Rs. 9.63 crores towards alleged outstanding demurrage charges against which the company has filed its counter claim of Rs. 10.88 crores towards the financial losses, interest on the investment, refund of the license fees, refund of the demurrage charges, compensation and damages etc.

5.There are few more cases which are pending before the various authorities and the same have been duly disclosed under Notes to the Account.

Information Regarding Conservation of Energy etc.

Information required under Section 217 (1) (e) of the CompaniesAct, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 as amended from time to time is given in Annexure ''B'' forming part of this report.

Information regarding Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the companies (Particulars of Employee) Rules 1975 the names and other particulars of Employees are given as under:

i) Name of the Employees, Designation/Nature of Duties, Gross Remuneration, Qualification, Age, Total Experience (in years), employed part of the year and in receipt of remuneration of Rs. 60,00,000/- or more per annum are as under:

a) Shri Jugal Kishore Arora, Whole time Director designated as Chairman, Rs. 73,11,144/-, Graduate, 70 years, 27 years, 27th September, 2012 and he is the promoter of the company.

b) Shri Satnam Arora, designated as Joint Managing Director, Rs. 72,49,427/-, Post Graduate, 64 years, 27 years, 27"1 September, 2012 and he is the promoter of the company.

c) Shri Gurnam Arora, designated as Joint Managing Director, Rs. 77,80,398/-, Graduate, 63 years, 27 years, 27th September, 2012 and he is the promoter of the company.

ii) Employed part of the year and in receipt of remuneration of Rs. 5,00,000/- or more per month during any part of the year under consideration.: Nil

Directors'' Responsibility Statement

Pursuant to Section 217 (2AA) of Companies Act, the Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b) appropriate accounting policies have been selected and applied consistently and judgments and estimates made 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;

c) proper and sufficient care has been taken 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;

d) the annual accounts have been prepared on a going concern basis

Awards & Recognitions

Kohinoor Foods is no stranger to Awards & Recognitions. Since its inception, the company has been earning awards and recognition like consumer validated Super Brand Award (thrice in series), Reader''s Digest Most Trusted Brand award (4 times in a row), Power Brand Award, Guinness Book of World Record (for making World''s Largest Biryani), National award for Export Excellence, Brand Equity Award & Many APED Aawards.

Corporate Social Responsibility

Kohinoor also envisions to improve lives in communities we live around, protect workplace rights, respect people, support missions that help people have a better life, provide good jobs, world class quality products and a healthy environment to all of us around.

At Workplace, Kohinoor Foods maintain high standards for fair and dignified treatment of all the people who work for our company. For all of its employees, it is not just a place to work, but like another home and everybody in it like a big family, closely bonded with each other.

Kohinoor Foods also believes that a company is as good as the people who work for it - their combined talents; skills, knowledge, experience and passion make a company what it is. Hence, company''s continuous goal is to inspire and motivate its people to hone their talents, increase their knowledge & skills and achieve extraordinary results at their workplace. In this endeavor we have offered subsidized meals to our employees at a very nominal cost.

The company also considers it as its responsibility to support the community that we live in. Kohinoor Foods supports ''Maitri'' an NGO working for widows on Vrindavan to make difference in their lives. It also supports''Smt. Nagendram Nandi Nelayam Trust'', the non-governmental organization working for animals, environment and education. We have supported the needy girl child''s education at Him Jyoti School, Dehradun and have initiated for distribution of blankets and bed sheets during winters for under privileged & homeless people to help them with basic necessities of life on regular basis.

Being environmentally conscious company and as part of Go Green campaign, we have put up water treatment plant in our rice factory (Murthal), where treated water is used for watering the lawn, garden and irrigate the fields.

Adherence to global human rights standards, No minor labour, Fairtrade practices, complete Medical facilities for its people, Safe & sound working environment are the things that Kohinoor Foods take utmost care about.

Acknowledgment

Your Directors acknowledge with gratitude, the commitment and dedication of the employees at all levels that has contributed to the growth and success of the company. Your Directors also put on record their appreciation and thanks to the Authorities and millions of consumers who have reposed faith in the products of your company.

For and on Behalf of the Board

Sd/-

Jugal Kishore Arora New Delhi

Chairman September 6th, 2013


Mar 31, 2012

Dear Members,

The Directors have pleasure in presenting the - Annual Report and the Audited Annual Accounts of the Company for the financial year ended 31st March, 2012.

As already mentioned in the last year Annual Report, as a major strategic step, the Company has transferred its business relating to (i) manufacturing, processing, finishing, marketing, trading, distributing, importing, exporting and/or supply of food products, including ready to eat products, cook-in sauces, cooking pastes, spices, seasonings and frozen food; and (ii) the marketing, trading, selling and distributing of rice products in the territory of India along with its Food Factory situated at Bahalgarh, Haryana (collectively the "Business") together with all the assets and liabilities, employees, contracts, licenses, agreements etc, as a going concern on a slump sale to M/s Kohinoor Speciality Foods India Private Limited pursuant to Joint Collaboration between M/s McCormick Ingredients Southeast Asia Private Limited, Singapore and your Company.

Company - In General

Synonymous with the fine taste of India in its absolute authentic form, the sole objective of Kohinoor Foods Limited, since its inception, has been to make the world experience the true Indian flavour. Just some of the reasons why it offers an extensive range that caters to consumers' need in

all parts of the world - a wide variety of Basmati Rice, Wheat Flour, Ready to Eat Curries & Meals, Readymade Gravies, Cooking Pastes, Chutney's, Spices and Seasonings to Frozen Breads, Snacks & Paneer (Indian Cottage Cheese). Today, the most powerful brand of the Company "Kohinoor" is a household name not only in India, but also in the countries like USA, UK, Canada, Australia, Middle East, Singapore, Japan, Mauritius & other European countries. As of now, the brand 'Kohinoor' is known in more than 60 countries worldwide

In this endeavour of serving only the authentic, this year, Kohinoor Foods has achieved another landmark:

Financial Overview

The year under review has been quite promising and challenging for the Company, with an Overall Turnover growth of 5.92% and the Export Sales grew by 42.60% vis-a-vis last year's performance. The Company's financials are highlighted as under:

Particulars FY'12 FY'11

Revenue from Operations 9611.10 9,074.38

Profit before Depreciation 2696.43 297.13

Depreciation 97.81 79.92

Profit before Tax 2598.62 217.21 Less:

Extra Ordinary Items 361.98 540.55

Profit after Tax ordinary Items 2236.44 (323.34)

Provision for Taxation 404.15 88.51

Profit after Tax 1832.50 (234.83)

Figures in Rs. Million

Operations:

During the year under review, the company has shown positive growth in the Export market as the Export Sales grew by 42.60% amounting to Rs. 5,618 million against Rs. 3,939 millions in previous year while the Domestic Sales came down by 22.28% amounting to Rs. 3,982 millions as against Rs. 5,123 millions in the previous year.

The contribution made by the Rice to the Company's business was Rs. 8,092 millions as against Rs.7,458 millions in the previous year, while the Food Business contributed only Rs. 368 millions as against Rs. 412 millions in the previous year.

This year the major contributors towards the company's growth were:

1. Focus on Middle East: The year saw increased growth of Basmati Rice exports that includes private label as well in the Middle East markets comprising of Iran, Bahrain, Iraq, Israel, Jordan, Kuwait, Lebanon, Qatar, Saudi Arabia Oman, Syria, UAE & Yemen with 35% growth as compared to last year. The company embarked on major brand promotion campaign across Pan Arab to an impressive product launch of its flagship brand Kohinoor Gold to cater to the need of Indian Diaspora and local population in these markets. Tremendous consumer awareness through successful media campaigns of Television, Print and Outdoors. Kohinoor was able to distinguish itself from the other brands available in the market and emerge as a respectable name for basmati rice in the Middle East. Not only did this generate significant numbers for the company but it also built the strong brand equity in these markets. Further, restructuring of the distribution network and product portfolio specially in Saudi Arabia, one of the largest export market, saw a 6-fold increase in Kohinoor (Brand) sales as compared to the last financial year. We have given Kohinoor brand a solid foundation and our products are present in all the leading supermarkets viz., Panda, Carrefour, Danube, Bin Dawood, Lulu, Nesto, Tammimi and Star Markets besides other Retail Chains. The company undertook promotional programs and consistent initiative in markets such as Kuwait, Bahrain, Oman, Lebanon & Iraq to drive long-term value to our customers.

2. New Clients added- In rice business, new private label clients were acquired some of them prestigious ones from countries like Belgium, Australia, Iran, Israel, Kenya, Kuwait & Saudi Arabia.

3. New markets added: Some of the highlights of the company's export business comprised addition of new markets such as Palestine, Israel & Bangladesh. The company is focussed on spreading its foot prints across the globe and reaching out to new customers. Plan to identify and add new fast growing markets in the next financial year to increase our width of distribution in both Food & Rice products.

4. Growth across continents: Basmati rice business grew in almost all geographies globally that we are present in e.g., Asia Pacific, UK, Europe, USA, Africa and Middle East.

5. Successful launch of Trophy 1121 XL in Mauritius: - The New Trophy 1121 XL Basmati Rice was successfully launched in Mauritius, the same was very well received and liked by the consumers. It's already one of the largest and preferred basmati rice brands in the market and created new benchmarks to be achieved by others. It is available across the country in stores like Jumbo, City Way, Belly Rose, Intermart, Winners, Lolo, King Savers Hyper, Shoprite Trianon & Value Maxx.

6. Launch of Kohinoor Frozen Paneer: In our endeavour to offer to new offering to our consumers, your company launched Kohinoor Paneer (Indian Cottage Cheese) in the select markets of Middle East, Asia Pacific and the US to an exhilarating response. The product contributed to the sales revenue of Food Business Division and is very well received by not only the ethnic consumers but also the mainstream ones. Besides Frozen, we continue to focus on Ambient Range- Cooking Paste, Cooking Sauces & Ready to Eat to cater to the varying tastes and requirements of our consumers across the globe.

7. Subsidiaries- Exports of Basmati Rice to our subsidiary in United Kingdom- Indo European Foods Limited have increased by 61% in volume and 62% in value terms. We are available in major super markets across United Kingdom such as Booker Cash & Carry, Tesco, Lidl, Sainsbury, Morrisons & Kerry Foods. Also our export to USA subsidiary- Kohinoor Foods USA Inc has posted 47% growth in our Kohinoor (Brand) Basmati sales as compared to the last financial year.

EXPORTMARKETS

Export- Basmati Rice

This year, in the Export of Basmati Rice, the company did the business of around Rs. 3692 million as against Rs. 3,185 million in the previous financial year and recorded a growth of 15.92% in comparison to the last year business. Some of the countries which recorded significant growth in Basmati Rice exports were Mauritius, Reunion, South Africa, Australia, U.K, Iraq, Jordan, Oman, Qatar, Saudi Arabia & USA.

Export- Food

This year, in the export of food products the Company did the business of around Rs. 348 millions as against Rs. 340 millions in the previous year and maintained the last year achievements. We expect to notch up good numbers in the next financial year through some exciting product, launch of Kohinoor 'Paneer' besides acquisition of new clients in private label business and expanding & streamlining the distribution network.

DOMESTIC MARKET:

During the year, the Company has transferred its part of business, as a going concern on a slump sale to M/s Kohinoor Speciality Foods India Private Limited and the said company is in process of restructuring, re-organising the entire domestic operations in terms of distribution, product portfolio, supply chain & Manpower and due to this the domestic market of the basmati rice sales dropped by 24.9% with a value of Rs. 3,209 millions in this financial year as against Rs. 4,273 millions in the previous financial year. In the food business too sales declined with sales value of Rs. 21 million this year as against Rs. 72 million in the previous year.

U.K Operations:

The year 2011-2012 saw a pinnacle in Kohinoor's UK performance through its wholly owned subsidiary, Indo European Foods Limited, based in London with its core brands ''Kohinoor'' & ''Trophy'' becoming #1 and #3 fastest growing branded dry basmati rice in the UK market* respectively. Kohinoor & Trophy constituted 33% of all branded basmati rice sold through the UK Grocery market ethnic aisles. Our branded basmati rice is now available in key UK top grocery multiples like Tesco, Sainsbury's, ASDA, Wholesale and Cash & Carry like Booker, Costco, TRS, Wani's, Discounters like TJ Morris, Lidl, more than 3000 Independent Ethnic Stores nationwide and with talks in place with other retailers which will see further growth of Indo European Foods Ltd. The subsidiary owns a rice processing facility at the port city of Felixstowe. The subsidiary also caters to the neighbouring European countries. Continuing its past tradition of shaking and growing the UK Basmati rice market, this subsidiary company has achieved new heights and is now playing a very active role in taking Kohinoor Foods to a new global height. In times to come, this position is only going to get better with various Product Innovations being planned and further distribution gains to be made. (* Source: Kantar Worldpanel 52 w/e 13 May 2012 value share in major grocery multiples.)

USA Operations:

Company has its wholly owned subsidiary based in New Jersey, Kohinoor Foods USA, Inc. that caters to the US and the Canada market. Through this subsidiary the Company has demonstrated its presence in both the Ethnic & the Mainstream segment of the business. Ethnic food in United States has traditionally meant Mexican and Chinese. The Indian foods and related food products are now being the hottest trend today. The modern day l ife and the rigors that tag along, leave most people with very little time for themselves. A need of healthy vegetarian food and growing awareness of the relationship between diet and health has driven consumer to look at food that has made the Indian convenience food most popular in USA markets. The trend has been steadily evolving over the past decade.

Kohinoor foods, added more members to the family keeping in mind the fast changing consumer trends of Gluten Free, 100% Vegetarian, Low sodium, Kosher & Halal Foods - from Ready to Eat Indian Curries- specially cooked in Olive Oil, the Cook-in Sauces, Cooking Paste to Spices, Seasoning and Frozen food. Today, the entire range of Kohinoor Foods depicts the authentic Indian taste, essence & aroma.

Another trend is towards the Frozen Foods which are strongly associated with perceptions of healthfulness, fresh foods and are in high demand. The ultimate combination of convenience and taste is what the Frozen Food range from Kohinoor Foods is all about.

Last year has shown a modest improvement of Kohinoor share in Rice markets, we are in a process of consolidating our current basic distribution structure, few- non productive warehouses are being closed down to achieve an overall profitability goals. The current branch structures will be replaced with a new set of distribution centres to offer Kohinoor range to the retailers.

The areas of new distribution planned in the next financial year are -Chicago, Minnesota, Detroit, Ohio, Colorado, Utah, Washington, Portland, Los Angles, San Diego, Florida, North and South California.

Another market opportunity lies in the Private label business in US market and we have started acquiring major retailers as clients such as Target, Trader Joes, Cost Plus, Kroger, Roland Rice & Himalayas Rice.

We cater to over 3,000 ethnic stores across the US markets besides Kohinoor brand is widely available in the main stream supermarkets as well. Our success can be measured by the fact we are available in coveted retail chains like Target, Kroger, Wal- mart, Wegmans, Big Lots and many more and also in Canadian supermarkets such as Metro, Loblaw's, Wal-mart in Canada. Kohinoor is now supplying specially designed Rice & Curry packs from its India on platter vertical to Costco, one of the biggest Cash & Carry stores in US. Also in collaboration with Big Lots discount store- delivering an ambient range of specially designed 'India on Platter' products.

We have added a new range of lentils to the existing range in Kohinoor brand; the category will help us to improve Kohinoor brand presence, also we plans to add few more products range in the current line up next year.

Dubai Operations

Rich Rice Raisers Factory LLC (RRR) was established as a joint venture Company in the financial year 2001 in Dubai to augment its marketing strengths in the middle-east region. RRR has a small rice processing facility in Dubai besides a full-fledged marketing office. RRR presently supplies Kohinoor range of basmati rice and other food products in mainstream stores like Lulu, Geant, Hyper Panda, KM Trading, Al Maya & Choithram Supermarkets. Kohinoor launched frozen paneer in UAE and the response so far has been quite overwhelming, besides Kohinoor Foods also caters to the Iranian market from its Dubai base.

Food Business: In its commitment to bring authentic Indian Taste in its truest form, Kohinoor brings to the world yet another 100% authentic delicacy in the frozen food category, Kohinoor Fresh & Frozen Paneer (Indian Cottage Cheese). Kohinoor launched India Cottage Cheese in 'Fresh & Frozen' brand in countries such as UAE, Bahrain, Qatar, Oman Australia, New Zealand, Honk Kong, Singapore and USA. The product is very well received by the consumers in particular and Trade in general; in fact the product itself has become an independent Category and contributing substantially to the revenues of the food division. The response so far has been quite overwhelming. In Dubai, by launching 200g & 500g packs in the leading Supermarket chains, our joint venture partners has brought the taste of authenticity to many kitchens. We now plan to extend this diary category to new products like Pure Ghee & Butter in the same markets to expand the bouquet of product offering to our customers.

Kohinoor has always gained trust of International reputed retail chain stores for manufacturing their branded food products. Another feather in the cap was Coles & Woolworths private label manufacturing of Microwaveable pouches. Coles & Woolworths enjoys 90 % (approx.) of the organized retail market of Australia and Kohinoor is supplying 10 SKUs collectively under their brand name. Both retail chain stores, Coles, Woolworths have now shown interest on other new product categories to be manufactured by Kohinoor under their private brand and this project is to be started very soon.

Kohinoor has joined hands with one of the leading retail chain stores - Kobe Bussan in Japan recently, which has more than 600 retail stores across the country. Kohinoor has successfully launched its frozen Naan, Breads and Snacks in Kobe Bussan retail stores. The product has received great acceptability in Japan which has encouraged Kobe Bussan to launch Kohinoor ambient Curry and Sauces in their stores. The supply for Curry and Sauce in Kohinoor brand to them will be started very soon.

Overview - Food Processing Industry

The Indian market offers a huge potential for the food processing industry - more so because of the fact that it promotes two main growing factors of our Indian Economy - Industry & Agriculture. During the last one decade, India moved from a position of scarcity to surplus in Food. Given the trade in production of food commodities, the Food Processing Industry in India is on an assured track of growth and profitability. It is expected to attract phenomenal investment in capital, human, technological and financial areas. The total food production of India is estimated to double in the next ten years. A reason why the Food Processing Industry sector in India has been accorded high priority by the Government of India, with a number of fiscal relief and incentives, to encourage commercialization and value addition. As per a study conducted by McKinsey and Confederation of Indian Industry (CII), the turnover of the total food market is approximately Rs.250,000 Crores, out of which value-added food products comprise Rs.80,000 Crores.

Basmati Rice

Like any other commodity business, Basmati Rice is a category which is little complex and widely unorganized. With an estimated consumption of around 1.0 million tonne of Basmati Rice in India, this is one category which has grown by almost 8 times in the last 5 years. And this is expected to grow further in India with an estimated consumption to go up in times to come.

Though majorly unorganized, but year on year this category is experiencing good number of conversions from unbranded to branded packaged Basmati Rice in terms of consumptions in India. This is mainly due to introduction of branded and package basmati rice in many retail outlets. India's growing middle class has augmented the domestic demand of branded rice. Moreover, introduction of modern food retail formats has also propelled the packaged food market, facilitating the availability, visibility and accessibility of branded products. The domestic branded market in India is expected to grow at around 15%-20% as compared to 5% for unbranded rice. Eating rice is common habit in most of the Indian households and it is usually a part of one of the 3 meals cooked every day. Geographically, the consumption of Basmati is higher in the Northern & Western part of the country while culturally, its consumption is quite high in the Punjabi & Gujarati families. With the view of serving the best to their customers & employees, Basmati consumption is also higher in well recognized hotels & large institutions. The consumption of branded packaged Basmati Rice is also being driven by the modern retail that allows every consumer to select what they want.

Ambient - Ready Meals

With an estimated value of around Rs.1400 millions, Ready Meals, is a category which is growing at an average value of around 15% every year. Largely this category is still at a growing stage, but the factors that has so far contributed to sales of Ready Meals have been increasing consumer base of working people who have less time to spend on cooking, Eating out of home becoming a common phenomena on weekends, growth of Modern trade, the Convenience of making exotic vegetarian & non-vegetarian dishes in just a few minutes, etc. As this category grows, an Innovative value addition to products with Health & Nutrition is expected to become an important aspect of it.

Frozen Food - Ready Meals

Though Frozen Food as a category constitutes many products, major of it being the frozen unprocessed non- vegetarian food, but within this segment vegetarian Frozen Ready Meals, snacks contributes approximately Rs. 400 millions and is expected to grow at a rate of 20% every year. The factors that contribute to the growth of this category is very similar to that of Ambient Ready Meals like growing consumer base of working people who have less time to spend on cooking, Eating out of home becoming a common phenomena every week & on weekend, Growth of Modern trade, the Convenience of making exotic Vegetarian & Non- vegetarian dishes in just a few minutes, etc.

Risks & Concerns

Macro-economic factors like recession, subdued demand and political uncertainty may affect the business of the Company and the industry at large as well. The Company is aware that uncertainties in business offer opportunities as well as downside risks and thus has identified and put in place mitigation tools for the same. Some key risk areas are:

Procurement risk: Adequate availability of key raw materials at the right prices is crucial for the Company. Being a generic natural product with low yield concentrated in a small region of the World, production of Basmati depends on the vagaries of nature. Therefore, any disruption in the supply due to a natural or other calamity or violent changes in the cost structure could adversely affect the Company's ability to reach its consumers with the right value proposition. However, we are ready with plans that might help us at such times.

High working capital requirement: Basmati rice requires to be aged for 9-12 months before selling, leading to huge working capital requirements. This results in low ROCE for the industry. Combating this risk, efficient working capital management system has been set in place by the Company and cash flow is monitored on daily basis.

Intense competition from unorganized sector: Another characteristic of this industry is the presence of unorganized sector offering basmati in loose unbranded form which intensifies competition. The Company is moving towards branded products and has invested significantly in building strong brands which helps differentiate their product.

Transfer of Business on Slump Sale

During the year, the Company has transferred its business relating to (i) manufacturing, processing, finishing, marketing, trading, distributing, importing, exporting and/or supply of food products, including ready to eat products, cook-in sauces, cooking pastes, spices, seasonings and frozen food; and (ii) the marketing, trading, selling and distributing of rice products in the territory of India along with its Food Factory situated at Bahalgarh, Haryana (collectively the "Business") together with all the assets and liabilities, employees, contracts, licenses, agreements etc, as a going concern on a slump sale to M/s Kohinoor Speciality Foods India Private Limited pursuant to a Joint Collaboration agreement between M/s McCormick Ingredients Southeast Asia Private Limited, Singapore having 85% shareholding and Kohinoor Foods Limited having 15% Shareholding.

The Company shall, exclusively manufacture/process and/or package the Rice Products, for M/s Kohinoor Speciality Foods India Private Limited, for sell within the territory of India and further the Company will continue to focus its export business.

Further, M/s Kohinoor Speciality Foods India Private Limited shall, exclusively manufacture/process and/or package the food products, for the Company for export by the Company.

The necessary consent of the Shareholders, in terms of Section 293(1)(a) of the Companies Act, 1956 has already been obtained by way of voting through postal ballot process in terms of Section 192A of the Companies Act, 1956 read with the rules made thereunder.

Postal Ballot

During the year, a Notice dated 1st June, 2011 was circulated to the Shareholders seeking consent under Section 293(1)(a) of the Companies Act, 1956 by way of voting through postal ballot process in terms of Section 192A of the Companies Act, 1956 read with the rules made thereunder.

Mr. Vinod Aggarwal, Practicing Company Secretary was appointed as the Scrutinizer for conducting the postal ballot process.

In terms of the report dated 9th July, 2011 submitted by Mr. Vinod Aggarwal, Scrutinizer, the Chairman declared that the consent of the Shareholders has been obtained with, requisite majority.

Purchase of Office premises for the Company

The Company has purchased an office premises at 10th Floor, The Pinnacle Business Tower, Surajkund, Faridabad, Haryanan (Delhi NCR) for the smooth functioning of the company's day to day to operations.

Dividend

Your Directors do not recommend any dividend for the financial year 2011-12.

Re-Appointment / Appointment / Resignation of Directors

In accordance with the provisions of the Companies Act, 1956, Mr. Gurnam Arora and Mr. Satnam Arora, Directors retires by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment. Your Directors recommend their re-appointment.

Mr. Sandeep Kohli was appointed as an Additional Director by the Board at its meeting held on 14th August, 2012. According to the provisions of section 260 of the Companies Act, 1956, he hold that office upto the date of this Annual General Meeting. As required by Section 257 of the Act, a notice has been received from a member signifying his intention to propose his appointment as a Director, along with a deposit of rupee five hundred.

Your Directors recommend this resolution for approval of the members.

Mr. Anil Bhatia, Independent Director of the company has resign from the post of Directorship w.e.f. 14th August, 2012, the board has accepted the same and appreciated his effort for providing great contribution to the company for past so many years.

Subsidiaries and Joint Ventures

During the last year, M/s Kohinoor Speciality Foods India Private Limited was incorporated as a wholly Owned Subsidiary of the Company. Presently the said Company his Joint Venture Company pursuant to joint collaboration between M/s McCormick Ingredients Southeast Asia Private Limited, Singapore and your Company.

In terms of the order dated 6th July, 2011 of the Hon'ble Company Law Board, New Delhi Bench, the registered office of Sachdeva Brothers Private Limited was shifted from the State of Haryana to NCT of Delhi. A copy of the said order has been registered with the Registrar of Companies vide certificate dated 21st July, 2011.

Compliance with Section 212:

As required under the Listing Agreements with the stock exchanges, a Consolidated Financial Statement of the Company along with all its subsidiaries is required to be attached. The Consolidated Financial Statements have been prepared in accordance with the relevant Accounting Standards as prescribed under Section 211(3C) of the Companies Act, 1956 ("Act"). These financial statements disclose the assets, liabilities, income, expenses and other details of the Company, its subsidiaries and associate companies.

Pursuant to the provision of Section 212(8) of the Act, the Ministry of Corporate Affairs vide its circular dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies with the Balance Sheet of the Company. A statement containing brief financial details of the Company's subsidiaries for the financial year ended March 31, 2012 is included in the Annual Report. The annual accounts of these subsidiaries and the related detailed information will be made available to any member of the Company/its subsidiaries seeking such information at any point of time and are also available for inspection by any member of the Company/its subsidiaries at the registered office of the Company. The annual accounts of the said subsidiaries will also be available for inspection, as above, at the head office/registered offices of the said respective subsidiary companies. The Company shall furnish a copy of details of annual accounts of subsidiaries to any member on demand.

Internal Control System

Your Company has well established Internal Control Procedures across its various locations, commensurate with its size and nature of operations to ensure that financial and Operating Reporting Systems are reliable and that all material risks are evaluated. The Internal audit function is adequately resourced and reports independently to the Audit Committee of the Board. In the opinion of the management and the internal auditors, there exists adequate safeguard against fraud and negligence within the company.

Listing at Stock Exchange

The Equity Shares of the Company are listed with Bombay Stock Exchanges Ltd. and National Stock Exchange of India Ltd. The annual listing fee for the year 2012-13 has been paid to the Exchanges.

Corporate Governance

Your company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as stipulated by the Stock Exchanges. A separate report on Corporate Governance along with Auditors's Certificate on its compliance by the company is attached as Annexure 'A' to this report.

Auditors

M/s Nath Ahuja & Co., Statutory Auditors of the Company retire and offer themselves for reappointment. The Company has obtained a Certificate to the effect that their appointment, if made, would be in conformity with the limits specified under section 224 (1) (B) of the Companies Act, 1956.

Auditor's Report

With regard to point no. 4(f) of the Auditors Report, explanations are given below.

In respect of contingent liability, as explained in Note No. 31 of Notes to Accounts, the Company has filed appeals with Appellant Authorities in respect of demand raised by Tax Authorities. On the basis of experts advice received and on the merit of the cases, the management is of the view that no provision in respect of these demands is required to be made.

In respect of Diminution in the value of Investment, as explained in Note No. 32 of Notes to Accounts, the investment in Wholly Owned Subsidiary Companies have been stated at cost. The Company's investment in subsidiaries are long term Strategic Investment. The losses incurred by the wholly owned subsidiary in U.S.A are not going to effect the Company's investment in long run. The Company is in the process of taking necessary steps to improve the profitability and financial position. Therefore the management is of the view that no provision in respect of Diminution in the value of Investment is required to be made in the books of accounts.

Secretarial Audit Report

As a measure of good corporate governance practice, the Board of Directors of the company appointed M/s Vinod Aggarwal and Associates, Company Secretaries to conduct Secretarial Audit of the company. The Secretarial Audit Report as received from the Practicing Company Secretary, for the Financial Year ended March, 31, 2012 is annexed to the Annual Report. As per the Secretarial Audit Report the company has complied with all the applicable act, law, rules and regulations.

Fixed Deposits

Your company has not accepted any deposit from Public during the year under review.

STATUS OF PENDING LITIGATIONS BEFORE VARIOUS COURT /AUTHORITIES

(i) Complaint filed to SEBI on 10~ June, 2008 under SEBI Takeover Code read with SEBI Act, 1992

The said complaint is under consideration with SEBI.

(ii) Compounding petitions filed suo-moto by the company

The books of accounts and other statutory records of the Company were inspected under Section 209A of the Act, by the officers of the Ministry of Corporate Affairs (Regional Director, Northern Region) in the year 2008-09.

The concerned officers were of the view that the Company had not complied with the provisions of Sections 224, 300, 209, 212, 217(1)(e) and 217(2AA) of the Companies Act, 1956, in respect of certain years. However, the Company has complied with all the provisions of the Companies Act, 1956 & rules made there under, as a part of its good Corporate Governance practice and to regularize the inadvertent defaults, if any as aforesaid, the Company has suo moto filed the Compounding Petitions under Sections 224, 300, 209, 212, 217(1)(e) and 217(2AA) of the Companies Act, 1956 and the Company Law Board/Regional Director has issued an order in our favour and the same has also been regularized by the company.

(iii) The company has received the Income Tax Assessment Order in respect of Assessment Year 2002-03 to 2008-09 in which additional income tax of Rs. 64.04 Cr., along with the interest of Rs.31.73 Cr. has been demanded. The Company has preferred an appeal before the Income Tax Appellate Tribunal, New Delhi against the impugned order. As per advice received from legal experts and on the basis of merit of the case, there is a high probability that the impugned order will be set aside and the demand will be quashed. Accordingly, management is of the view that no provision in respect of the above demand is required to be made in the books of accounts.

(iv) The company has filed a suit for declaration, recovery and mandatory injunction against the Reserve Bank of India and Punjab National Bank before the Hon'ble High Court, New Delhi for Rs. 27.49 crores towards mark to market losses arising under the said transactions and also claimed a sum of Rs. 14.02 crores towards the recovery from the Punjab National Bank, which has been paid to them against some foreign derivatives transactions.The Hon'ble court was pleased to grant an interim relief and directed both the parties to maintain status quo with respect to the derivatives transactions vide an order dated 10.08.2011.

(v) The company has filed a suit for declaration, recovery and mandatory injunction against the Reserve Bank of India and HDFC Bank before the Hon'ble High Court, New Delhi for Rs. 39.22 crores towards mark to market losses arising under the said transactions and also claimed a sum of Rs. 28.73 crores towards the recovery from the HDFC Bank, which has been paid to them against some foreign exchange derivatives transactions. The Hon'ble court was pleased to grant an interim relief and directed both the parties to maintain status quo with respect to the derivatives transactions vide an order dated 12.10.2011.

(vi) A petition has also been filed by the HDFC Bank Ltd. against the company and the court directed to pay to the applicant a sum of INR 72.84 lakhs out of the said transaction, the Company's preferred to file an appeal before the Hon'ble Chairperson DRAT.

(vii) There are few more cases which are pending before the various authorities and the same has been duly disclosed under Notes to the Account.

Information Regarding Conservation of Energy etc.

Information required under Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 as amended from time to time is given in Annexure 'B' forming part of this report.

Information regarding Employees

No person, employed for the whole year, was in receipt of remuneration of Rs. 60,00,000/- or more per annum, nor was any of them, employed for part of the year, was in receipt of remuneration of Rs. 5,00,000/- or more per month during any part of the year under consideration. Thus, the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are not applicable.

Directors' Responsibility Statement

Pursuant to Section 217 (2AA) of Companies Act, the Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b) appropriate accounting policies have been selected and applied consistently and judgments and estimates made 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;

c) Proper and sufficient care has been taken 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; the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) The annual accounts have been prepared on a going concern basis Awards & Recognitions Kohinoor Foods is no stranger to Awards & Recognitions. Since its inception, the company has been earning awards and recognition like consumer validated Super Brand Award (thrice in series), Reader's Digest Most Trusted Brand award (4 times in a row), Power Brand Award, Guinness Book of World Record (for making World's Largest Biryani), National award for Export Excellence, Brand Equity Award & many APEDA awards.

Corporate Social Responsibility

Kohinoor also envisions to improve lives in communities we live around, protect workplace rights, respect people, support missions that help people have a better life, provide good jobs, world class quality products and a healthy environment to all of us around.

At Workplace, Kohinoor Foods maintain high standards for fair and dignified treatment of all the people who work for our company. For all of its employees, it is not just a place to work, but like another home and everybody in it like a big family, closely bonded with each other.

Kohinoor Foods also believes that a company is as good as the people who work for it - their combined talents; skills, knowledge, experience and passion make a company what it is. Hence, company's continuous goal is to inspire and motivate its people to hone their talents, increase their knowledge & skills and achieve extraordinary results at their workplace.

The company also considers it as its responsibility to support the community that we live in. Kohinoor Foods supports 'Missions of Charity, Kolkata set up by Mother Teresa'. It also supports 'Khushi', the non-governmental organization working for the under-privileged. We have supported the needy girl child's of Him Jyoti School, Dehradun. For the community who live around its factories and the re- settlement groups of Kashmiri migrants, the company makes sure it helps them with food & basic necessities of life on a regular basis.

Being environmentally conscious company and as part of Go Green campaign, have put up water treatment plant in our rice factory (Murthal), where treated water is used for watering the lawn, garden and irrigate the fields.

Adherence to global human rights standards, No minor labour, Fair trade practices, complete Medical facilities for its people, Safe & sound working environment are the things that Kohinoor Foods take utmost care about.

Acknowledgment

Your Directors acknowledge with gratitude, the commitment and dedication of the employees at all levels that has contributed to the growth and success of the company. Your Directors also put on record their appreciation and thanks to the Authorities and millions of consumers who have reposed faith in the products of their company.

For and on Behalf of the Board

Sd/-

New Delhi Jugal Kishore Arora

August 31st, 2012 Chairman


Mar 31, 2011

Dear Members,

The following report should be read in conjunction with the audited financial statements and notes for the year ended March 31, 2011 and the audited financial statements and notes for the year ended March 31,2010. This report contains forward looking statements, which may be identified by their use of words like 'plans', 'expects', 'will', 'anticipates', 'believes', 'intends', 'projects', 'estimates' or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the company's strategy for growth, market position, expenditures, and financial results, are forward looking statements. Forward looking statements are based on certain assumptions and expectations of future events. The company cannot guarantee that these assumptions and expectations are accurate or will be realized. The company's actual results, performance or achievements could thus differ materially from those projected in any such forward looking statements. The company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

Your Directors have pleasure in presenting the — Annual Report and the Audited Annual Accounts of the Company for the financial year ended 31 st March, 2011.

As a major strategic step, the Company is transferring its business relating to (i) manufacturing, processing, finishing, marketing, trading, distributing, importing, exporting and/or supply of food products, including ready to eat products, cook-in sauces, cooking pastes, spices, seasonings and frozen food; and (ii) the marketing, trading, selling and distributing of rice products in the territory of India along with its Food Factory situated at Bahalgarh, Haryana (collectively the "Business") together with all the assets and liabilities, employees, contracts, licenses, agreements etc, as a going concern on a slump sale to M/s Kohinoor Speciality Foods India Private Limited a proposed Joint Collaboration with M/s McCormick Ingredients Southeast Asia Private Limited, Singapore.

Company-In General

Synonymous with the fine taste of India in its absolute authentic form, the sole objective of Kohinoor Foods Limited, since its inception, has been to make the world experience the true Indian flavor. Just some of the reasons why it offers an extensive range that caters to consumers' need in all parts of the world - a wide variety of Basmati Rice; range of Healthy Ready to Eat Indian Curries, Meals & Desserts; Range of Frozen Indian Breads & Snacks; different kinds of Spices & Seasonings; unique range of Readymade Gravies & variety of Cooking Pastes. Today, the most powerful brand of the Company "Kohinoor", is a household name not only in India, but also in the countries like USA, UK, Middle East, Canada, Japan, Australia, Singapore & other European countries. Today, the brand 'Kohinoor' is known in more than 60 countries worldwide.

In this endeavor of serving only the authentic, this year, Kohinoor Foods has achieved another landmark:

Financial Overview

The year under review has been quite promising and challenging for the Company. With an Overall Turnover growth of 17.3% vis-a-vis last year's performance. The Company's EBIDTA margin (Earnings before Interest, Depreciation, Tax & Amortization) has been 12.1% of the turnover in FV11 compared to 14.98% in the previous year.

Particulars FY'11 FY'10

Net Sales & Other Income 9,075.65 7,748.48

Profit before Depreciation 297.27 500.01

Depreciation 79.92 102.12

Profit before Tax 217.35 397.89

Less:

Extra Ordinary Items 540.55 290.74

Profit after Tax ordinary Items (323.20) 107.15

Provision for Tax (88.37) 24.91

Profit after Tax (234.83) 82.24

Figures in Rs. Million

Operations

For the year under review, the Company has shown positive growth in the Domestic market, while the growth dipped a little in the Export markets vis-a-vis last year's results. As shown below, the Domestic Sales grew by 48.42%, amounting to Rs. 5123 millions as against Rs.3452 millions in the previous year while the Export Sales came down by 7.88%, amounting to Rs.3939 millions as against Rs.4276 millions in the previous year.

The contribution made by the Basmati Rice to the Company's business was Rs.7557 millions as against Rs.6513 millions in the previous year, while the Food business contributed only Rs.425 millions as against Rs.450 millions in the previous year.

This year, the major contributors towards the Company's growth were:

1. Company's focus on Kohinoor Platinum, Gold & Silver - Kohinoor Platinum, Gold & Silver (PGS) has been one of the strongest moves that the Company took in the last few years. During this year, the Company focused on Kohinoor PGS in all possible areas in both, the Domestic & the Export market, especially in those areas like Saudi Arabia, Kuwait, United Kingdom, USA in the Export markets and Tamil Nadu, Andhra Pradesh, West Bengal, Karnataka, Gujarat, Maharashtra & Kerala in the Domestic market. Not only did this generate significant numbers for the Company, but it also built a strong equity for the Company's brand in all the markets.

2. Deeper & Broader Penetrations of Kohinoor products - With focus on Kohinoor PGS, the Company this year also invested its efforts in increasing the level of penetrations in both Domestic & the Export markets.

Some new private label clients were added to the list - from countries like UAE, Saudi Arabia, USA, Kuwait, Canada, New Zealand, Jordan, Seychelles & Germany. Similarly, in the Domestic market, the availability of Kohinoor products have increased in areas like Tamil Nadu, Andhra Pradesh, Kerala, West Bengal, etc.

3. Introduction of Kohinoor Limited Edition in the market- Limited Edition was a new introduction that happened this year. Though this was introduced in the later part of the year, but with its presence, it has already started adding onto the equity that Kohinoor enjoys in all the markets worldwide.

4. Acceptance of Heat & Eat products - Though this is more valid for the Domestic market, but the new healthy range of India on Platter (IOP) enjoyed a good acceptance in lot of markets where Kohinoor is present as a brand. The range gained good numbers, especially in the Domestic market.

5. Stronger New Avenues - Some of the new avenues that were opened last year, did get the Company good numbers in terms of sales. Supplying Kohinoor range of products to Defence & CSD Canteens brought in concrete numbers this year to the Domestic market's Food business.

LISTING AT STOCK EXCHANGE

The Equity Shares of the Company are listed with Bombay Stock Exchanges Ltd. and National Stock Exchange of India Ltd. The annual listing fee for the year 2011-12 has been paid to the Exchanges.

CORPORATE GOVERNANCE

Your company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as stipulated by the Stock Exchanges. A separate report on Corporate Governance along with Auditors's Certificate on its compliance by the company is attached as Annexure A' to this report.

AUDITORS

M/s Nath Ahuja & Co., Statutory Auditors of the Company retire and offer themselves for reappointment. The Company has obtained a Certificate to the effect that their appointment, if made, would be in conformity with the limits specified under section 224

(1) (B) of the Companies Act, 1956.

FIXED DEPOSITS

Your company has not accepted any deposit from Public during the year under review.

COMPOUNDING PETITIONS FILED SUO-MOTO BY THE COMPANY

The books of accounts and other statutory records of the Company were inspected under Section 209A of the Act, by the officers of the Ministry of Corporate Affairs (Regional Director, Northern Region).

The concerned officers were of the view that the Company had not complied with the provisions of Sections 224, 300, 209, 212, 217(1)(e) and 217(2AA)of the Companies Act, 1956, in respect of certain years.

In the opinion of the Company, however, the Company has complied with all the provisions of the Companies Act, 1956 & rules made there under.

However, as a part of its good Corporate Governance practice and to regularize the inadvertent defaults, if any as aforesaid, the Company has suo moto filed the Compounding Petitions under Sections 224, 300, 209, 212, 217(1)(e) and 217(2AA) of the Companies Act, 1956.

Apart from the aforesaid, the Company has also suo moto filed the compounding petitions under Section 297 and Section 211 (3A) of the Companies Act, 1956.

The petition under Section 224 of the Act has been allowed and disposed off by the Hon'ble Company Law Board. Other Petitions are pending with the concerned authorities.

STATUS OF LITIGATIONS BEFORE SEBI AND THE COMPANY LAW BOARD

(I) Petition being C.P No. 12/111A (N.D) of 2008 under Section 111A of the Companies Act, 1956 filed by the Company on 18th June, 2008 against Temptation Foods Limited and Others.

The Company is pleased to inform you that, vide order dated 26th May, 2011 of the Hon'ble Company Law Board, the said Company Petition has been disposed off, inter-alia, in view of the disposing of the equity shares by Temptation Foods Limited and undertaking given in Para 4 of the Affidavit submitted by it.

Para 4 of the Affidavit submitted on behalf of Temptation Foods Limited reads as under:

(II) Complaint filed to SEBI on 10th June, 2008 under SEBI

Takeover Code read with SEBI Act, 1992

The said complaint is under consideration with SEBI.

INFORMATION REGARDING CONSERVATION OF ENERGY ETC.

Information required under Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 as amended from time to time is given in Annexure 'B' forming part of this report.

INFORMATION REGARDING EMPLOYEES

No person, employed for the whole year, was in receipt of remuneration of Rs. 60,00,000/-or more per annum, nor was any of them, employed for part of the year, was in receipt of remuneration of Rs. 5,00,000/- or more per month during any part of the year under consideration. Thus, the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are not applicable.

DIRECTORS'RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of Companies Act, the Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b) appropriate accounting policies have been selected and applied consistently and judgments and estimates made 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;

c) Proper and sufficient care has been taken 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;

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

AWARDS & RECOGNITIONS

Kohinoor Foods is no stranger to awards & recognitions. Since inception, the Company has been earning awards and recognitions like consumer validated Super Brand Award (twice in series), Reader's Digest Most Trusted Brand Award (4th time in series), Power Brand Award.

But the one that the company cherishes the most is when consumers say, "I trust Kohinoor".

CORPORATE SOCIAL RESPONSIBILITY

Kohinoor also envisions to improve lives in communities we live around, protect workplace rights, respect people, support missions that help people have a better life, provide good jobs, world class quality products and a healthy environment to all of us around.

At Workplace, Kohinoor Foods maintain high standards for fair and dignified treatment of all the people who work for our company. For all of its employees, it is not just a place to work, but like another home and everybody in it like a big family, closely bonded with each other.

Kohinoor Foods also believes that a company is as good as the people who work for it - their combined talents, skills, knowledge, experience and passion make a company what it is. Hence, company's continuous goal is to inspire and motivate its people to hone their talents, increase their knowledge & skills and achieve extraordinary results at their workplace.

The company also considers it as its responsibility to support the community that we live in. Kohinoor Foods supports 'Missions of Charity, Kolkata set up by Mother Teresa' with annual contribution of around 30 tonnes of rice to their missionaries. It also supports 'Khushi', the non-governmental organization working for the under- privileged. For the community who live around its factories and the re-settlement groups of Kashmir, the company also makes sure it helps them with food & basic necessities of life on a regular basis.

Adherence to global human rights standards, No minor labour, Fair trade practices, complete Medical facilities for its people, Safe & sound working environment are the things that Kohinoor Foods take utmost care about.

ACKNOWLEDGMENT

Your Directors acknowledge with gratitude, the commitment and dedication of the employees at all levels that has contributed to the growth and success of the company. Your Directors also put on record their appreciation and thanks to the Authorities and millions of consumers who have reposed faith in the products of their company.

for and on Behalf of the Board

Sd/-

New Delhi Jugal KishoreArora

August 31st, 2011 Chairman


Mar 31, 2010

The following report should be read in conjunction with the audited financial statements and notes for the year ended March 31, 2010 and the audited financial statements and notes for the year ended March 31, 2009. This report contains forward looking statements, which may be identified by their use of words like plans, expects, will, anticipates, believes, intends, projects, estimates or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the companys strategy for growth, market position, expenditures, and financial results, are forward looking statements. Forward -looking statements are based on certain assumptions and expectations of future events. The company cannot guarantee that these assumptions and expectations are accurate or will be realized. The companys actual results, performance or achievements could thus differ materially from those projected in any such forward - looking statements. The company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

Company- In General

Synonymous with the fine taste of India in its absolute authentic form, the sole objective of Kohinoor Foods Limited, since its inception, has been to make the world experience the true Indian flavor. Just the reason why it offers an extensive range that caters to all kinds of consumers need in all different parts of the world - a wide variety of Basmati Rice, range of Healthy Ready to Eat Indian Curries, Meals a Desserts, Range of Frozen Indian Breads & Snacks, Different kinds of Spices & Seasonings, unique range of Readymade Gravies & variety of Cooking Pastes. Today, the most powerful brand of the company "Kohinoor", is a household name not only in India, but also in the countries like USA, UK, Middle East, Canada, Japan, Australia, Singapore & other European countries.

In this endeavor of serving the true Indian culinary experience, largely, your company has achieved another landmark this year.

Financial Overview

The year under review was a fairly good year for the company and it achieved an overall turnover growth of 21.55% in comparison to Previous Year.

Particulars FY10 FY09

Net Sales & Other Income 7,748.48- 6,396.05

Profit before Depreciation 500.02 437.62

Depreciation 102.12 107.19

Profit before Tax and extraordinary 397.89 330.43

Less:-

Extra Ordinary Items 290.75 500.09

Profit before Tax 107.15. (169.66)

Provision for Taxation 24.91 (61.68)

Profit after Tax 82.24. (107.97)

Figures in Rs. Million ""

The EBIDTA margin (Earnings before interest, depreciation, tax and amortization) of the company is 14.98% of turnover in FY10 compared to 15.23% in the previous year. However net profit after tax in FY is Rs. 82.24mn in comparison to in Net loss after tax of Rs 107.98mn in FY09.

The major contributor for this was the all round growth in business generated in different regions, both in the Export & the Domestic markets coupled along with all the new initiatives that the company took in this financial year.

Operations

For the year under review, the company has shown positive growth patterns vis-a-vis in the previous year. As shown below, the Exports have grown by 26.46% while the Domestic Sales showed a growth of 15.98%. This year, the export sales was Rs. 4,276 millions as against Rs. 3,382 millions in the previous year, while the domestic sales was Rs. 3,452 millions as against Rs. 2,976 millions in the previous year.

The contribution that both the Basmati Rice & the Food business generated to the entire business of the

For this years company growth, on a larger scale, the major contributors were:

1. Global acceptance of the new avatars of Kohinoor the Platinum, Gold & Silver (PGS) versions of Basmati Rice - The Companys move of introducing Kohinoor Platinum, Gold & Silver in the entire rice industry, globally, was a strategic and bold move that it took during the year. Not only did it gain acceptance in the Domestic market, but also in the Export markets. Platinum, Gold & Silver, together broadened the horizon of Kohinoor and made it more approachable to a larger base of consumers, that too worldwide. Making a product like Kohinoor Basmati Rice available to a larger bandwidth of consumers made the brand enter more number of houses, which in turn brought good results into the companys books.

2. Companys focus on Kohinoor Platinum, Gold & Silver - Not only did the PGS gain considerable acceptance, but this year the company focused all its efforts onto the availability of these three products in as many shelves, stores, cities & countries as possible.

3. The revamped version of Heat & Eat - the healthy India on Platter range (IOP) - this was another move that gave enough impetus to the business of Kohinoor Foods, especially to the Food Division. In the countries where it is consumed the most, it gained tremendous response - not only from the

Ethnic Consumers, but also from the Mainstream. In markets where there were all kinds of Heat & Eat products, this introduction of Kohinoors healthy range of Heat & Eat dishes made its own way. What made a great impact among consumers was the factor that the entire range was "Cooked in Olive Oil" which brought in all the healthy benefits to the entire range of products.

4. Broader Penetrations - This year, the company also worked towards broadening its penetration in as many countries, for both the Rice & the Food products. Today, there are many additional countries that get to savor the fine taste that Kohinoor brings through its different range of products. The company also broadened its penetrations in the Domestic markets, especially for the Rice products, by implementing FMCG Distribution model. It was another strong move towards doing a commodity business in a completely new way, within the same parameters.

5. Growth in focused countries - This was another move where the company tried doing business in a little different way. To have a deep focus in every country, this year the company looked at individual countries and approached each of them in their own way. A reason why some of the countries have shown tremendous growth patterns in this financial year.

6. New Avenues - This year, especially in the Food Division, the company also explored some of the new avenues. Supplying our range of products to Defence & CSD Canteens were the new moves that the company took. Exploring possibilities like this not only ensured extra business for the company, but also enhanced the reach of Kohinoor products to more number of consumers.

The Export Market

Exports - Basmati Rice

This year, in the Export of the Basmati Rice, the company did a business of around Rs. 3,363 millions as against Rs. 2,719 millions in the previous year. Kohinoor Foods exported to around 54 countries and gained a growth of 23.68% over the last years business. Some of the countries that showed remarkable growth were UK,

Botswana, Egypt, Kenya, Kuwait, New Zealand, Mauritius, Syria & Yemen. With its range of Basmati Rice, Kohinoor Foods made its mark in all of these countries.

The growth in the export of Basmati Rice was due to a combination of factors. Some of them being a deeper penetration in every country, exploration of new countries, Investment in the brand - especially in some of the focused markets and heavy consumer promotions during peak seasons.

Exports - Food

This year, Kohinoor Foods exported different Food products and recorded a business of around Rs. 422 millions as against Rs.318 millions in the previous year. The company exported its products Heat & Eat, Spices & Frozen Food product to around 18 countries and gained a growth of around 32.70% over the last year.

The growth in the Export Business (Food) was largely due to the new range of Healthy Heat & Eat products that the company conceptualized this year. It gained significant recognition in all the International markets and also helped the company open new markets, globally. What also helped was some of the new product developments that the company did in this year, coupled along with

some of the parallel Pvt. Labels business that the company generated in this year. The main focus in the next 5 years would be to increase our share in mainstream segment in Europe, USA and Australia by targeting mass retail chains in these respective territories.

The Domestic Market

Domestic Market- Basmati Rice

In the Domestic market, your company recorded a growth of 8.87% with a value of Rs.3,033 millions in this financial year versus Rs.2,785 millions in the previous year. In comparison to the Export result, though the percentage growth of the Domestic market seems marginal, but this year the company did fairly well in building the Consumer Pack segment of the Basmati Rice products, which showed a strong growth of around 34% as compared to the last year. Also, the companys initiative of implementing FMCG Distribution Model in as many cities is helping it gain enough of grounds in every market.

Domestic Market - Foods

In the Domestic market, your company achieved a turnover of around Rs.28 millions as against Rs.24 millions in the previous year showing a growth of around 17.8% over the previous year. Like in the export market, the highlighting feature of this year in the domestic market for Food was the introduction of healthy range of Heat & Eat products (India on Platter). This introduction helped the company in distinguishing its range of Heat & Eat products in the Indian market to a great extent.

Overview

The Indian market offers a huge potential for the food processing industry. According to the Confederation of

Indian Industry (Cll), the Indian food industry is estimated to be worth over $200 billion and is expected to grow to $310 billion by 2015. Even though India is one of the worlds largest food producers, it accounts for less than 1.5% of international trade and presents a huge opportunity. However we plan to change that.

Processed food market is the most important segment of the food industry accounting for over 32% of the total food market (Source: ibef). While India has an abundant supply of food, the food processing industry is still nascent: only 2% of fruit and vegetables; and 15% of milk produced are processed. Despite this, the processed food industry in India ranks 5th in size, representing 6.3% of GDP. It accounts for 13% of the countrys exports and 6% of total industrial investment. The industry size is estimated at $70 billion, including $22 billion of value- added products.

Convenience food

The Food Service business in India is seeing explosive growth driven by increasing incomes, changing lifestyles, increasing urbanization and changing demographics where the average age in working population is decreasing. According to Euromonitor International a market research company, the amount of money Indians spend on meals outside the home has more than doubled in the past decade, to about $5billion a year and is expected to double again in about half that time. With the increase of women in the working population, convenience foods are also likely to become popular. The emerging large retail chains make these foods more easily accessible. According to the Ministry of Food Processing the industry size of the semi- processed and ready-to-eat packaged food industry is over $1 billion and is growing at a CAGR of 20%.

Basmati rice

Among the rice growing countries, India has the largest area (40.2 million hectares) followed by China and Bangladesh. India and Pakistan grow and export aromatic rice and the main buyers are the Middle East and Europe. The global production of basmati rice is approximately 2.3 million tons, out of which Indias share is a whopping 74%. Total basmati rice market in India is estimated at Rs 10 billion, out of which branded basmati rice market is approximately 50% in value and 33% in volume terms.

The domestic branded basmati market is growing rapidly driven by rising incomes and changing lifestyle. The major driver for branded basmati sales will be organized retail which is growing at 9% p.a. and is expected to grow by 30% in 5 years. As organized retail penetrates semi-urban and rural areas branded basmati penetration to rural areas is expected to increase.

Strengthening presence in key international markets

During the year under review, your company has strengthened its presence in leading international markets and also made successful inroads into new markets. It entered several new markets for the branded basmati segment including Saudi Arabia, the largest market of basmati rice in the world. It also entered new countries for the food business including Bahrain and Kuwait. Today, the companys products are available at over 3,50,000 retail outlets across the globe and its clientele includes leading retail chains world over.

The company has 2 wholly-owned subsidiaries in US and UK and a Joint Venture Company in Dubai to look after these markets, which jointly form the largest market for food.

USA operations

USA is a large potential market for Indian food products. According to the US-based Food Marketing Group, Indian food is growing rapidly and is expected to overtake Chinese and Kosher food and occupy the No. 3 position (below Italian and Mexican) in the next 3 years.

Realizing the strong demand in that country, we established our wholly-owned subsidiary in New Jersey, Kohinoor Foods USA, Inc. in the year 2000. KFUI is

presently supplying to leading mainstream stores such as Whole Foods, Krogers, select stores of Walmart, BJs Club Stores and Costco apart from almost all leading ethnic Indian stores in the US.

UK operations

Indian food is hugely popular in UK and enjoys mainstream acceptance. There are more than 10,000 Indian restaurants in greater London alone. Kohinoor Foods had set up Indo European Foods Limited, a wholly- owned subsidiary in the year 2001 in UK. The subsidiary owns a rice processing facility at the port city of Felixstowe with a milling capacity of 8 MT per hour. It presently services mainstream stores like Tesco, Somerfield, ASDA Walmart, Bestway, Costco, Tesco, Ireland and almost all leading ethnic stores in UK.

Indo European Foods Ltd. has taken Kohinoor to a new high. The brand Kohinoor has grown by leaps and bounds and has become the No. 2 brand in dry basmati in UK in a very short span of time (Source: AC Nielsen). Kohinoor is one of the fastest growing brands in TESCO (50% YoY). Kohinoor today is recognized as the 4th most favored food brand in the UK (Source: Ethnic Focus Research, Jan 2007 UK).

Dubai Operations

Rich Rice Raisers Factory LLC (RRR) was established as a joint venture company in the financial year 2001 in Dubai to augment its marketing strengths in the middle- east region. RRR has a small rice processing facility in Dubai besides a full-fledged marketing office. RRR is presently supplying Kohinoor range of basmati rice and other food products in mainstream stores like Carrefour, Lulus Chain and Geant Stores.

Strengthening domestic presence for food business

Kohinoor Foods has also taken measures to strengthen its presence in the domestic market for foods business. It has set up an independent distribution unit for marketing its range of food products in India and building relationships with modern retail stores.The Company has also tied up with international chains like Pizza Hut, Papa Johns, Pulse Foods for supplies to the domestic market.

Business outlook

A rapidly growing domestic economy with changing

consumption patterns presents a huge opportunity for your company going forward. Your company is committed to building a global food brand and has drawn up a strategy to continue its focus on the branded foods business. It will continue to introduce new products and penetrate new markets, overseas.

Focus on branded business

We will continue our focus on branded product sales and capitalize on the high margin convenience foods segment. We believe that 90% of our turnover would come from the branded segment (Basmati rice and Food business) by FY 2012

We expect the food business to contribute 25% of our turnover by FY 2012.

After the successful launch of frozen foods, your company is eyeing the much larger chilled foods business in UK and India to further consolidate its position as a global player in this arena.

International market

The company plans to enter into more big retail formats across the world, in mainstream markets. Major focus would be on US and UK, the largest markets for food products in the world.

Your company intends to acquire major market share of US ethnic food market by leveraging distribution centers in five major cities of US.

We aim to add at least another 25 countries to our list of customer countries in the next 2 years in the food business.

Risks 8t concerns

Macro-economic factors like recession, subdued demand and political uncertainty may affect the business of the Company as also the industry at large. The company is aware that uncertainties in business offer opportunities as well as downside risks and thus has identified and put in place mitigation tools for the same. Some key risk areas are:

Procurement risk: Adequate availability of key raw materials at the right prices is crucial for the Company. Being a generic natural product with low yield concentrated in a small region of the World, production of Basmati depends on the vagaries of nature. Therefore, any disruption in the supply due to a natural

or other calamity or violent changes in the cost structure could adversely affect the Companys ability to reach its consumers with the right value proposition. However, we are ready with plans that might help us at such times.

However, the companys long term relationship with farmers built on trust ensures constant supply and thus over the years it has not faced any procurement problems. Also, adequacy of irrigation facilities in the Basmati producing regions mitigates these uncertainties.

High working capital requirement: Basmati rice requires to be aged for 9-12 months before selling, leading to huge working capital requirements. This results in low ROCE for the industry. Combating this risk, efficient working capital management system has been set in place by the company and cash flow is monitored on daily basis.

Intense competition from unorganized sector: Another characteristic of this industry is the presence of unorganized sector offering basmati in loose unbranded form which intensifies competition. The company is moving towards branded products and has invested significantly in building strong brands which helps differentiate their product.

DIVIDEND

Your Directors do not recommend any dividend for the financial year 2009-10.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, Mr. Anil Bhatia and Mr. Satnam Arora, Directors of your company are retiring by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment. Your directors recommend their re-appointment.

SUBSIDIARIES AND JOINT VENTURES

Your Company had applied to the Central Government under Section 212(8) of the Companies Act 1956, seeking an exemption from attaching copies of the Balance Sheet, Profit and Loss Account, Directors Report and Auditor s Report of its subsidiary companies.

In terms of the approval granted by the central government vide order No. 47/358/2010-CL-lll dated

13th May, 2010 copies of the Board of Directors and Auditors of the subsidiary companies have not been attached to the Balance sheet of the Company. However, the statement required under Section 212 of the Companies Act, 1956 is attached. The Consolidated Financial Statements prepared by the Company pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, include financial information of its subsidiaries.

The annual account of the subsidiary companies and the related information will be kept for inspection, by any member of the Company and of the subsidiary Companies, at the Registered Office of the Company and will be made available upon request by any member.

As per the terms of the exemption letter, a statement containing brief financial details of the Company subsidiaries for the year ended March 31, 2010 is included in the Annual Report.

INTERNAL CONTROL SYSTEM

Your Company has well established Internal Control Procedures across its various locations, Commen- surate with its size and nature of operations to ensure that financial and Operating Reporting Systems are reliable and that all material risks are evaluated. The Internal audit function is adequately resourced and reports independently to the Audit Committee of the Board. In the opinion of the management and the internal auditors, there exists adequate safeguard against fraud and negligence within the company.

LISTING AT STOCK EXCHANGE

The Equity Shares of the Company are listed with Bombay Stock Exchanges Ltd. and National Stock Exchange of India Ltd. The annual listing fee for the year 2010-11 has been paid to the Exchanges.

CORPORATE GOVERNANCE

Your company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as stipulated by the Stock Exchanges. A separate report on Corporate Governance along with Auditorss Certificate on its compliance by the company is attached asAnnexure A to this report.

AUDITORS

M/s Nath Ahuja & Co., Statutory Auditors of the

Company retire and offer themselves for reappointment. The Company has obtained a Certificate to the effect that their appointment, if made, would be in conformity with the limits specified under section 224 (1) (B) of the Companies Act, 1956.

FIXED DEPOSITS

Your company has not accepted any deposit from Public during the year under review.

STATUS OF PENDING LITIGATIONS BEFORE SEBI AND THE COMPANY LAW BOARD

(I) Petition being C.P No. 12/111A (N.D) of 2008 under Section 111Aof the Companies Act, 1956 filed by the Company on 18th June, 2008 against Temptation Foods Limited and Others.

The Temptation Foods Limited and others have been acting in concert and are acquiring shares of the Company in violation of SEBI Takeover Code, in view whereof, the aforesaid Company Petition was filed by the Company before the Honble Company Law Board for seeking rectification of its Register of Members and is pending adjudication before the Honble Company Law Board.

(II) Complaint filed to SEBI on 10th June, 2008 under SEBI Takeover Code read with SEBI Act, 1992

The Company had also filed a Complaint to SEBI against Temptation Foods Limited (TFL) and its MD Shri Vinit Kumar and others, who all being Persons Acting in Concert have been attempting an hostile Takeover of the Company in gross violation of SEBI Takeover Code and Companies Act, 1956. Various developments in relation to such Takeover have been provided to SEBI from time to time. In the process of its enquiry, SEBI vide its interim order dated 16th February, 2009, had formed a prima-f acie opinion that TFL has attempted to mislead the investors and created an artificial market to induce the investors in violation of Regulation 4(2) (f) and 4(2) (r) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003. SEBI had therefore, passed a cease and desist order u/s 11D of SEBI Act, 1992 directing TFL and its Managing Director, Mr. Vinit Kumar to cease and desist with immediate effect from publishing or causing to

publish or reporting or causing to report or circulate or cause to circulate in any manner any false or misleading information relating to dealing in securities until further orders. SEBI vide its order dated 11th September, 2009 disposed off the proceedings initiated u/s 11D of SEBI Act, 1992 and advised TFL and its MD not to report or publish information regarding their shareholding without strictly adhering to the provisions of law.

INFORMATION REGARDING CONSERVATION OF ENERGY ETC. AND EMPLOYEES

Information required under section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 and information as per Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 as amended from time to time are given in Annexures B 6t C forming part of this report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of Companies Act, the Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b) appropriate accounting policies have been selected and applied consistently and judgments and estimates made 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;

c) Proper and sufficient care has been taken 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;

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

AWARDS a RECOGNITIONS

Kohinoor Foods is no stranger to awards & recognitions. This year, the company was awarded with two coveted awards - SuperBrand & Readers Digest Most Trusted Brand Award.

It was for the 2nd time in series that Kohinoor Foods was awarded the SuperBrand Awards for its range of True Basmati. This is an award which is consumer validated and only the top few brands, on a national level, gets picked from all the categories that are available in the market.

SuperBrand is the elitist of the titles given to brands when they attain a paramount status in the market and enjoy undisputed preference over the competition something that Kohinoor has been doing for years and has won loyal patrons and become a preferred choice of the consumers by delivering quality through its wide range of products.

This year, the company also received another award in series - Readers Digest Trusted Brand Award. This award is the most reliable 6t credible barometer of consumer preferences in Asia. It didnt take much time for Kohinoor to be among the product winners of Readers Digest Gold Trusted Brand award for two years, a survey of brand performances, being the undisputed king of rice and creating a niche with an unchallenging position in the consumers heart in India & abroad. CORPORATE SOCIAL RESPONSIBILITY

Kohinoor also envisions to improve lives in communities we live around, protect workplace rights, respect people, support missions that help people have a better life, provide good jobs, world class quality products and a healthy environment to all of us around.

At Workplace, Kohinoor Foods maintains high standards for fair and dignified treatment of all the people who work for our company. For all of its employees, it is not just a place to work, but like another home and everybody in it like a big family, closely bonded with each other.

Kohinoor Foods also believes that a company is as good as the people who work for it - their combined talents, skills, knowledge, experience and passion make a company what it is. Hence, companys continuous goal is to inspire and motivate its people to hone their talents, increase their knowledge & skills and achieve extraordinary results at their workplace. The company also considers it as its responsibility to support the community that we live in. Kohinoor Foods supports Missions of Charity, Kolkata set up by Mother Teresa with annual contribution of around 30 tonnes of rice to their missionaries. It also supports Khushi, the non-governmental organization working for the under- privileged. For the community who live around its factories and the re-settlement groups of Kashmir, the company also makes sure it helps them with food & basic necessities of life on a regular basis. Adherence to global human rights standards, No minor labour, Fair trade practices, complete Medical facilities for its people, Safe & sound working environment are the things that Kohinoor Foods take utmost care about.

ACKNOWLEDGMENT

Your Directors acknowledge with gratitude the commitment and dedication of the employees at all levels that has contributed to the growth and success of the company. Your Directors also put on record their appreciation and thanks to the Authorities and millions of consumers who have reposed faith in the product of their company.

for And On Behalf of the Board

sd/- New Delhi Jugal KishoreArora

June, 26,2010 Chairman


Mar 31, 2009

The following report should be read in conjunction with the audited financial statements and notes for the year ended March 31, 2009 and the audited financial statements and notes for the year ended March 31, 2008. This report contains forward looking statements, which may be identified by their use of words like plans, expects, will, anticipates, believes, intends, projects, estimates or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the companys strategy for growth, market position, expenditures, and financial results, are forward looking statements. Forward -looking statements are based on certain assumptions and expectations of future events. The company cannot guarantee that these assumptions and expectations are accurate or will be realized. The companys actual results, performance or achievements could thus differ materially from those projected in any such forward ¦ looking statements. The company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

DIVIDEND

Your Directors do not recommend any dividend for the financial year 2008-09.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, Mr. Vijay Prakash Agarwal and Mr. Gurnam Arora, Directors of your company are retiring by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment. Your directors recommend their re-appointment.

SUBSIDIARIES AND JOINT VENTURES

As required by section 212 of the Companies Act, 1956 the reports and audited accounts of the Subsidiary Companies along with the statement pursuant to Section 212 of the Companies Act, 1956 form part of the Annual Report.

INTERNAL CONTROL SYSTEM

Your Company has well established Internal Control Procedures across its various locations, commensurate with its size and nature of operations to ensure that financial and Operating Reporting Systems are reliable and that all material risks are evaluated. The Internal audit function is adequately resourced and reports independently to the Audit Committee of the Board. In the opinion of the management and the internal auditors, there exists adequate safeguard against fraud and negligence within the company.

LISTINGATSTOCK EXCHANGE

The Equity Shares of the Company are listed with Bombay Stock Exchanges Ltd. and National Stock Exchange of India Ltd. The annual listing fee for the year 2009-10 has been paid to the Exchanges.

CORPORATE GOVERNANCE

Your company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as stipulated by the Stock Exchanges. A separate report on Corporate Governance along with Auditorss Certificate on its compliance by the company is attached as Annexure A to this report.

AUDITORS

M/s Nath Ahuja 6t Co., Statutory Auditors of the Company retire and offer themselves for reappointment. The Company has obtained a Certificate to the effect that their appointment, if made, would be in conformity with the limits specified under section 224(1) (B)of the CompaniesAct, 1956.

FIXED DEPOSITS

Your company has not accepted any deposit from Public during the year under review.

STATUS OF PENDING LITIGATIONS BEFORE SEBI AND THE COMPANY LAW BOARD

(I) Petition being C.P No. 12/111A (N.D) of 2008 under Section 111Aof the CompaniesAct, 1956 filed by the Company on 18th June, 2008 against Temptation Foods Limited and Others.

The Temptation Foods Limited and others have been acting in concert and are acquiring shares of the Company in violation of SEBI Takeover Code, in view whereof, the aforesaid Company Petition was filed by the Company before the Honble Company Law Board for seeking rectification of its Register of Members and is pending adjudication before the Honble Company Law Board. As per the order dated 18th September, 2008 passed by the Honble Company Law Board, the Annual General Meeting scheduled to be held on 27th September, 2008 was deferred till further orders. The Company Law Board had also ordered that no Shareholders Meeting shall be convened and held till the disposal of the said C.P. No. 12/111A(ND) of 2008.Consequent upon, filing of C.A. No. 08 of 2010 in C.P. No. 12/111A (ND) of 2008, the Honble Company Law Board vide its order dated 22nd February, 2010, has allowed the Company to hold its Annual General Meetings for the year ending on 31st March, 2008 and 31st March,2009 after giving due notices. The Honble Company Law Board has also allowed the Company to convene its General meetings from time to time as per law.

(11) Complaint filed to SEBI on 10th June, 2008 under SEBI Takeover Code read with SEBI Act, 1992

The Company had also filed a Complaint to SEBI against Temptation Foods Limited (TFL) and its MD Shri Vinit Kumar and others, who all being Persons Acting in Concert have been attempting an hostile Takeover of the Company in gross violation of SEBI Takeover Code and Companies Act, 1956. Various developments in relation to such Takeover have been provided to SEBI from time to time. In the process of its enquiry, SEBI vide its interim order dated 16th February, 2009, had formed a prima-facie opinion that TFL has attempted to mislead the investors and created an artificial market to induce the investors in violation of Regulation 4(2) (f) and 4(2) (r) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003. SEBI had therefore, passed a cease and desist order u/s 11D of SEBI Act, 1992 directing TFL and its Managing Director, Mr. Vinit Kumar to cease and desist with immediate effect from publishing or causing to publish or reporting or causing to report or circulate or cause to circulate in any manner any false or misleading information relating to dealing in securities until further orders. SEBI vide its order dated 11th September, 2009 disposed off the proceedings initiated u/s 11D of SEBI Act, 1992 and advised TFL and its MD not to report or publish information regarding their shareholding without strictly adhering to the provisions of law.

(iii) Petition being C.P No. 12 (N.D) of 2009 under Section 397/398 of the Companies Act, 1956 filed against the Company by Temptation Foods Limited and Venture Business Advisors Private Limited.

The aforesaid Company Petition dated 6th February, 2009 was filed by Temptation Foods Limited and Venture Business Advisors Private Limited under section 397-398 of the Companies Act, 1956 before the Honble Company Law Board. Consequent upon, an application challenging maintainability of the said Petition filed by the Company on 5th March, 2009, the said Petition was dismissed as withdrawn.

INFORMATION REGARDING CONSERVATION OF ENERGY ETC. AND EMPLOYEES

Information required under section 217 (1) (e) of the Companies Act, 1956 read with the Companies

(Disclosure of particulars in the report of Board of Directors) Rules, 1988 and information as per Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 as amended from time to time are given in Annexures B fit C forming part of this report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of Companies Act, the Directors confirm that:

a)in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b) appropriate accounting policies have been selected and applied consistently and judgments and estimates made 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;

c) Proper and sufficient care has been taken 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;

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

ACKNOWLEDGMENT

Your Directors acknowledge with gratitude the commitment and dedication of the employees at all levels that has contributed to the growth and success of the company. Your Directors also put on record their appreciation and thanks to the Authorities and millions of consumers who have reposed faith in the product of their company.

For And On Behalf of the Board

New Delhi Jugal Kishore Arora

March, 31,2010 Chairman

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