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Notes to Accounts of Kohinoor Foods Ltd.

Mar 31, 2015

1 Extra Ordinary Items

The company has entered into agreements with banks in respect of disputed liability on account of derivative transaction, which was shown as contingent liability in the notes on financial statements for the year ended 31st March 2013. The net loss on account of these agreements has been shown as extraordinary items in the statement of profit and loss for the year ended 31stMarch 2014

2. Disclosures under Accounting Standard15on"EmployeesBenefits" :

a) Defined Contribution Plans:

Amount of Rs. 82.71 Lacs (previous year Rs. 67.23 Lacs) pertaining to employer's contribution to Provident Fund and Employees State Insurance is recognized as an expense and included in" Employees cost" in Note No. 24.

b) Defined Benefit Plan:

General description of Defined Benefit Plan (Gratuity):

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to 15 days basic salary last drawn for each completed year of service. The same is payable on termination of service, or retirement, or death whichever is earlier. The benefits vests after five years of continuous service. The Company has set a limit of Rs. 10.00 lacs (previous year Rs.10.00 lacs) per employee.

3. Disclosures under Accounting Standard17on"Segment Reporting":

The Company is primarily engaged in the business of manufacturing, trading & marketing of food products which is a single segment, as per Accounting Standard (AS) 17 issued by the Institute of Chartered Accountants of India.

4. Disclosures under Accounting Standard18on"Related Party Disclosures" :

31.1 List of Related Parties

i) Wholly Owned Subsidiaries of the Company

- Sachdeva Brothers Pvt Ltd. India

- Kohinoor Foods USA Inc.

- Indo European Foods Ltd., UK

Nature of Contingent Liabilities and other particulars are as given below:-

I 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 a fore said demand.

Subsequently, during the last year, Hon.'ble ITAT, New Delhi has passed its orderon21st 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 placed 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 Deptt., 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 Deptt. 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. 17.90Cr along with interest Rs. 10.54 Cr. has been demanded.

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 2010-11 in which income tax of Rs. 23.31 Cr along with interest Rs. 13.48 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 Deptt. in respect of Assessment Years 2011-12. The tax effect of the additions made are 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.

ii An appeal before the Sales Tax Commissioner -Appeals, New Delhi is lying pending in respect of Sales Tax demand on sale of made in earlier years.

iii 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 Cr 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. 26.83 Lacs after completing the Sales Tax Assessment for AY 2011-12 against which appeal has been filed.

iv 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 demanded by the Excise department in connection of dispute over classification of goods - food product produced at Bahalgarh Factory- as per the Central Tariff Act. As the matter is still pending before the Tribunal, no provision in the books of accounts have been made

v 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 Cr in respect of certain services provided in earlier years. As per the advice received from the legal experts and on the basis of merit of the case, management is of the view that no provision in respect of the above demand is required to be made in the books of accounts. Subsequently, the company has deposited Rs.20 Lacs "Under Protest" as per the directions given in the stay order granted by Appellate Tribunal in this regard.

vi 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 for ex derivative transactions.

vii 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.

viii The company has filed appeals before the Jt. Excise and Taxation Commissioner (Appeals),Haryana against the order passed by Haryana VAT Authority, Sonepat demanding the additional tax of Rs. 1.24 Cr. for theAssessmentYear2010-11. The Company has also filed another appeal before the Tribunal, Haryana State against the order passed by Jt. Excise and Taxation Commissioner-cum-Revision Authority, Faridabad (Range) demanding a sum of Rs. 7.32 Cr. (including interest) towards purchases made against concessional form H/D-2 within the state of Haryana.

5. During the year no amount of Dividend has been remitted in foreign currency to Non Resident out side India.

6. Some of the balances of Debtors and Creditors are subject to confirmation.

7. Prior Period Items

There is no material prior period items included in profit & loss account required to be disclosed as per Accounting Standard - 5, prescribed by the Companies (Accounting Standard) Rules, 2006.

8. Corresponding figures for the previous year have been regrouped/rearranged, wherever necessary to confirm to current year classification.


Mar 31, 2013

1. Exceptional Items

During the previous financial year the Company transferred part of its business pursuant to consent of share holders obtained under section 293(1)(a) ofthe Companies Act-1956. Profit of Rs. 33,597.72 lacs on sale of the part of business has been shown as Exceptional Items in the previous year figures of Profit and Loss a/c.

2. Extra Ordinary Items

The company has entered into forward exchange contracts to hedge the foreign exchange fluctuation risk. The losses amounting to Rs. 3,619.83/- lacs suffered in foreign exchange transactions during previous financial year are shown as Extra ordinary items in the previous year figures of Profit and Loss a/c.

b) As required under AS-11 the company has outstanding Forward contracts as on 31 March 2013 and there is Marked to Market (MTM) unrealized gain on forward contracts of Rs. 77.92 lacs , which has been accounted for accordingly in the books of accounts.

3. Disclosures under Accounting Standard 15 on "Employees Benefits":

a) Defined Contribution Plans:

Amount of Rs. 64.66 lacs (previous year Rs. 76.40 lacs) pertaining to employers'' contribution to Provident Fund and Employees State Insurance is recognized as an expense and included in "Employees cost" in Note No. 24.

b) Defined Benefit Plan:

General description of Defined Benefit Plan (Gratuity):

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to 15 days basic salary last drawn for each completed year of service. The same is payable on termination of service, or retirement, or death whichever is earlier. The benefits vests after five years of continuous service. The Company has set a limit of Rs. 10.00 lacs (previous year Rs.10.00 lacs) per employee.

* Included in the "Employee Costs" in Note No. 24

4. Disclosures under Accounting Standard 17 on "Segment Reporting":

The Company is primarily engaged in the business of manufacturing, trading & marketing of food products which is a single segment, as per Accounting Standard (AS) 17 issued by the Institute of Chartered Accountants of India.

5. Disclosures under Accounting Standard 18 on "Related Party Disclosures": 32.1 LISTOF RELATED PARTIES

i) Wholly Owned Subsidiaries of the Company

- Sachdeva Brothers Pvt Ltd. India

- Kohinoor Foods USA Inc.,

- Indo European Foods Ltd, U.K

ii) Joint Venture of the Company

- Rich Rice Raisers Factory LLC.- Dubai

iii) Key Managerial Personnel and their relatives

Mr. Jugal Kishore Arora Chairman

Mr. Satnam Arora Jt.Mg.Director

Mr. Gurnam Arora Jt.Mg.Director

Mr. Nitin Arora Son of Mr. Jugal Kishore Arora

Mr. Amit Arora Son of Mr. Satnam Arora

Mr. Ankush Arora Son of Mr.Gurnam Arora

Mr. Nishant Arora Son of Mr.Gurnam Arora

iv) Enterprise over which key managerial personnel exercise significant influence

- Satnam Overseas (Exports) - Partnership Firm of Promoter directors

The company has entered into operating lease agreements that are renewable on a periodic basis and cancelable at company''s option.

The company has not entered into sublease agreements in respect of these leases.

Nature of contingent liabilities and other particulars are as given below:-

i 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. During the current financial year the company has deposited Rs. 6.00 Cr. "Under Protest" against the above pending demand.

ii An appeal before the Sales Tax Commissioner - Appeals, New Delhi is lying pending in respect of Sales Tax demand on sale of REP Licenses made in earlier years.

iii 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. 450.41 Lacs 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. 26.84 Lacs after completing the assessment for AY 2011-12 against which appeal has been filed.

iv An appeal before 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 duly demanded by the Excise department in connection of dispute over classification of goods - food product produced at Bahalgarh Factory- as per the Central Tariff Act. As the matter is still pending before the Tribunal, no provision in the books of accounts have been made.

v An appeal before the Appellate Tribunal is lying pending against the order received from the office of Service Tax Commissionerate,New Delhi demanding the service tax & penalty Rs. 2.59 Cr in respect of certain services provided in earlier years. As per the advice received from the legal experts and on the basis of merit of the case, management is of the view that no provision in respect of the above demand is required to be made in the books of accounts. Subsequently, the company has deposited Rs.20 Lacs "Under Protest" as per the directions given in the stay order granted by Appellate Tribunal in this regard.

vi 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.

vii 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.

viii 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 ofthe demurrage charges, compensation and damages etc.

6. During the year no amount of Dividend has been remitted in foreign currency to Non Resident outside India.

7. Some of the balances of Debtors and Creditors are subject to confirmation.

8. Prior Period Items

There is no material prior period items included in profit & loss account required to be disclosed as per Accounting Standard - 5, prescribed by the Companies (Accounting Standard) Rules, 2006.

9. Corresponding figures for the previous year have been regrouped/rearranged, wherever necessary to confirm to current year classification.


Mar 31, 2012

1 During the year no amount of Dividend has been remitted in foreign currency to Non Resident out side India.

2. Extra Ordinary Items

The company has entered into forward exchange contracts to hedge the foreign exchange fluctuation risk. The losses amounting to Rs. 3,619.83 lacs (Previous Year: Rs. 5,405.45 lacs) suffered in foreign exchange transactions are shown as Extra ordinary items.

Nature of contingent liabilities and other particulars are as given below:-

i The company has received the Income Tax Assessment Order in respect of Assessment years 2002-03 to 2008-09 in which additional income tax of Rs. 64.04 Cr. alongwith interest Rs.31.73 Cr. has been demanded. Company has preferred an appeal before the Income Tax Appelatte Tribunal, New Delhi against the impugned order. 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.

ii An appeal before the Sales Tax Commissioner - Appeals, New Delhi is lying pending in respect of Sales Tax demand on sale of REP Licences made in earlier years.

iii The company has received the Order from Excise and Taxation Deptt.,Punjab in respect of Year 2009-10 and 2010-11 demanding a sum of Rs. 4.50 Cr towards the cess imposed by the State Govt. on exports. The company has preferred an appeal before the Dy. Excise & Taxation Commissioner-Appeal challenging the valididty of imposition of cess on export as the same is not permissible under article 286 of the Consitution of India.

iv An appeal before before the Customs, Excise & Service Tax Appellate Tribunal, New Delhi is lying pending against the order of Commisioner of Central Excise (Appeals), Delhi -III in respect of additional excise duly demanded by the Excise department in connection of dispute over classification of goods - food product produced at Bahalgarh Factory- as per the Central Tarrif Act. As the matter is still pending before the Tribunal, no provision in the books of accounts have been made

v The company has received an order from the office of Service Tax Commissionerate,New Delhi demanding the service tax

& penalty Rs. 2.59 Cr in respect of certain services provided in earlier years. The company is in the process of filing the appeal before the Appellate Tribunal against the impunged order. As per the advice received from the legal experts and on the basis of merit of the case, management is of the view that no provision in respect of the above demand is required to be made in the books of accounts.

vi The assessing authority of notified Market Area committee under APMC Act has imposed a penalty of Rs. 52.92 lacs during the year. The company has deposited Rs. 13.23 lacs under protest and has filed SLP against this order in the supreme court.

vii 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.

viii 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 Rs. 39.22 crores towards mark to market losses arising under the said transactions, a petition has also been filed by the HDFC Bank Ltd. with DRT against the company and the DRT directed the company to pay to the applicant a sum of INR 72.84 lakhs, out of the said transaction. Against the aforsaid order the company has filed an appeal with the DRAT.

3. Investment in the wholly owned subsidiary companies/ joint venture company have been stated at cost. No provisions for losses suffered by the subsidiaries / joint venture company have been made in the accounts. However consolidated financial statements have been prepared in accordance with AS-21 prescribed by the Companies (Accounting Standard) Rules, 2006.

4. Expenses incurred during the year on registration of trade mark amounting to Rs.14.03 lacs (Previous year: Rs 6.24 lacs has been charged to profit/loss a/c and has not been recognized as an Intangible asset as per Accounting Standard 26

5. Segment Reporting

The Company is primarily engaged in the business of manufacturing, trading & marketing of food products which is a single segment, as per Accounting Standard (AS) 17 issued by the Institute of Chartered Accountants of India.

6. Disclosure in respect of employee benefits under Accounting Standard (AS) - 15 (Revised) "Employee Benefits" prescribed by the Companies (Accounting Standards) Rules, 2006.

a) Defined Contribution Plans: Amount of Rs.76.40 lacs (previous year Rs. 84.68 lacs) pertaining to employers' contribution to Provident Fund and Employees State Insurance is recognized as an expense and included in "Employees cost " in Note No. 22.

b) The disclosures for gratuity cost is given below:

* Included in the "Employee Costs" in Schedule O

(vi) Principal actuarial assumptions at the balance sheet date are as follows:

A. Economic Assumptions

The principal assumptions are the discount rate and salary growth rate. The discount rate is generally based upon the market yield available on the Government bonds at the accounting date with a term that matches that of the liabilities and the salary growth rate takes account of inflation, seniority, promotion and other relevant factors on long term basis.

(vii) General description of gratuity plan:

Gratuity Plan (Defined benefit plan)

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to 15 days basic salary last drawn for each completed year of service. The same is payable on termination of service, or retirement, or death whichever is earlier. The benefits vests after five years of continuous service. The Company has set a limit of Rs. 10.00 lacs (previous year Rs.10.00 lacs) per employee.

7. RELATED PARTIES DISCLOSURES UNDER ACCOUNTING STANDARD 18 39.1 List of related parties

i) Wholly Owned Subsidiaries of the Company

- Sachdeva Brothers Pvt Ltd. India

- Kohinoor Foods USA Inc.,

- Indo European Foods Ltd, U.K

ii) Joint Venture of the Company

- Rich Rice Raisers Factory LLC.- Dubai

iii) Key Managerial Personnel and their relatives

Mr. Jugal Kishore Arora Chairman

Mr. Satnam Arora Jt.Mg.Director

Mr. Gurnam Arora Jt.Mg.Director

Mr. Nitin Arora Son of Mr. Jugal Kishore Arora

Mr. Amit Arora Son of Mr. Satnam Arora

Mr. Ankush Arora Son of Mr.Gurnam Arora

Mr. Nishant Arora Son of Mr.Gurnam Arora

iv) Enterprise over which key managerial personnel exercise significant influence - Satnam Overseas (Exports) - Partnership Firm of Promoter directors

8. The schedule of provisions as required to be disclosed in compliance with Accounting Standard 29, "Provisions, Contingent Liabilities and Contingent Assets" is as under:

Provision relating to Opening Created during Withdrawals Closing balance balance as at the year as at 1 April 2011 31 March 2012

Gratuity 147.70 59.34 72.12 134.93

Income Tax 2,927.00 3,850.00 - 6,777.00

Wealth Tax 1.42 2.00 1.42 2.00

9. Some of the balances of Debtors and Creditors are subject to confirmation.

10. Prior Period Items

There is no material prior period items included in profit & loss account required to be disclosed as per Accounting Standard - 5, prescribed by the Companies (Accounting Standard) Rules, 2006.

11. Corresponding figures for the previous year have been regrouped/rearranged, wherever necessary to confirm to current year classification.

12. Figures in ( ) are related to previous year.


Mar 31, 2011

(Rs. In Lacs)

1 Contingent Liabilities Current Year Previous Year

a) Claims against the company, not acknowledged as debt

Sales Tax* 122.00 122.00

Excise Duty* 42.91 42.91

TDS/TCS* 4.74 -

Service Tax - 11.14

HRDF demand of Market Committee** 39.69 -

b) Corporate Guarantee given by the Company.*** 8,334.30 8,121.60

c) Surety Bonds issued to Govt. Agencies under EPCG scheme 1,799.59 1,274.27

d) Duty foregone against Capital Goods for 100% EOU 455.61 444.13

e) Customs Duty saved against advance Licenses. 32.82 143.13

10,831.66 10,159.17

*Nature of contingent liability regarding Taxation matters.

Particulars Forum where matter is pending Amount

Sales Tax Commissioner of Sales Tax 122.00

Excise Duty CESTAT 42.91

TDS/TCS CIT Appeals (TDS/TCS ward) 4.74

**The assessing authority of notified Market Area committee under APMC Act has imposed a penalty of Rs. 52.92 lacs during the year. The company has deposited Rs. 13.23 lacs under protest and has filed SLP against this order in the supreme court.

*** Corporate guarantees are given by the company for subsidiaries As follows:-

Name of Beneficiary Guarantee issued to Amount

i) Indo European Foods Ltd Punjab National Bank, U.K 4,315.80

ii) Kohinoor Foods USA INC Punjab National Bank, Hong Kong 4,018.50

2 Petition seeking Compounding of offences under the provisions of Companies Act, 1956:

During October 2008 to February 2009, 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).

Pursuant to the aforesaid, the Company and its Directors have filed Petitions seeking compounding of the alleged offences/irregularities under the following provisions of the Act:

(i) Section 300(4) in respect of violation of Section 300(1) of the Act during the year 2007-08 - Pending before the Regional Director, Northern Region.

(ii) Section 629A of the Act in respect of violation under Section 224(8) of the Act regarding non- fixation of remuneration of The Auditors for the year 2006-07-Pending before Company Law Board, New Delhi Bench.

2 Securities Premium

The management has taken the view, based on expert opinion that the redemption premium on conversion of FCCB is to be charged against security premium account as permitted by Section 78 of the Companies Act, 1956. Therefore, premium payable on redemption of FCCB is provided for by charge to the Securities Premium Account During the year Rs.1,100.71lacs (Previous years Rs. NIL) has been utilized out of the securities premium account towards premium on redemption of FCCB's.

3 Loan and Advances includes capital advances amounting to Rs.463.76 lacs (Previous Year: Rs.469.93 lacs)

4 Sundry debtors include an amount of Rs. 113.77 Lacs(Previous Year: Rs. 114.27Lacs) in respect of which cases are pending in the court for recovery, however no provision has been considered necessary by the management with respect to such amount.

5 Expenses incurred during the year on registration of trade mark amounting to Rs.6.24 lacs (Previous year: Rs 34.69 lacs) has been charged to profit/loss a/c and has not been recognized as an Intangible asset as per Accounting Standard 26.

6 Charity & Donation includes Rs. NIL (Previous Year Rs. 2.00 lacs) paid to political party and this contribution is not exceeding 5% of company's average net profits of the three immediately preceding financial years computed in accordance with provision of the Company Act, 1956.

7 Quantitative Information in respect of Capacity, Opening Stock, Production, Sales and Closing Stock (As certified by the management)

8 Foreign Currency Convertible Bonds

During the yearthe company has redeemed the outstanding 6747 FCCB of USD 1000 each and there is no FCCB outstanding as on 31.03.2011.

9 Extra Ordinary Items

The company has entered into forward exchange contracts to hedge the foreign exchange fluctuation risk. The losses amounting to Rs. 5,405.45 lacs (Previous Year: Rs. 2,907.46 lacs ) suffered in foreign exchange transactions are shown as Extra ordinary items.

10 Segment Reporting

The management view is that there are no segments within the meaning ofAS-17, on "Segment Reporting". The product dealt in are classified in the category of Food Products only and therefore further classification would be redundant.

Geographically the production facilities are mainly located in one state and hence no breakup is warranted.

11 Disclosure in respect of employee benefits under Accounting Standard (AS) - 15 (Revised) "Employee Benefits" prescribed by the Companies (Accounting Standards) Rules, 2006. a) "Defined Contribution Plans: Amount of Rs.84.68 lacs (previous year Rs. 70.42 lacs) pertaining to employers' contribution to Provident Fund and Employees State Insurance is recognized as an expense and included in ""Employees cost"" in Schedule O."

(vi) Principal actuarial assumptions at the balance sheet date are as follows:

A. Economic Assumptions

The principal assumptions are the discount rate and salary growth rate. The discount rate is generally based upon the market yield available on the Government bonds at the accounting date with a term that matches that of the liabilities and the salary growth rate takes account of inflation, seniority, promotion and other relevant factors on long term basis.

(vii) General description of gratuity plan:

Gratuity Plan (Defined benefit plan)

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to 15 days basic salary last drawn for each completed year of service. The same is payable on termination of service, or retirement, or death whichever is earlier. The benefits vests after five years of continuous service. The Company has set a limit of Rs. 10.00 lacs (previous year Rs. 10.00 lacs) per employee.

12 RELATED PARTIES DISCLOSURES UNDER ACCOUNTING STANDARD 18

12.1 List of related parties

i) Wholly Owned Subsidiaries of the Company

- Sachdeva Brothers Pvt Ltd. India

- Kohinoor Foods USA Inc.,

- Indo European Foods Ltd, U.K

ii) Joint Venture of the Company

- Rich Rice Raisers Factory LLC- Dubai

iii) Key Managerial Personnel and their relatives

Mr. JugalKishoreArora Chairman

Mr. SatnamArora Jt.MG.Director

Mr. GumamArora Jt.MG.Director

Mr. NitinArora Son of Mr. JugalKishoreArora

Mr.AmitArora Son of Mr. SatnamArora

Mr.Ankush Arora Son of Mr.GumamArora

Mr. NishantArora Son of Mr.GumamArora

iv) Enterprise over which key managerial personnel exercise significant influence - Satnam Overseas (Exports) - Partnership Firm of Promoter directors

13 During the financial year 2009-2010 the loan given to the subsidiary company "Kohinoor Foods USA Inc." amounting to USD 50,00,000 (Rs. 2,369.77 lacs) was converted into 80000 redeemable preference shares of USD 62.50 each fully paid up.

14 Some of the balances of Debtors and Creditors are subject to confirmation.

15 The borrowing cost amounting to Rs. 90.17 lacs attributable to acquisition or construction of qualifying assets is capitalized as a part of those assets in accordance with AS-16.

16 Change in Accounting Policy:

Till March 31, 2010 the company was charging off the cost of Consumables and stores & spares to the profit and loss account in the year of purchase. In current year, in order to present the true and fair view of its accounts and better accounting practices, the company has changed its policy of charging Consumables and stores & Spares in the year of purchase and started showing it on consumption basis. This change has resulted in the recognition of yearend inventory which has been duly recognized in the balance sheet.

Had the Company continued to use the earlier basis of accounting for Consumables and Stores & Spares, the charge to the Profi t and Loss Account before tax for the current period would have been higher by Rs. 1.23 Crores, the year end value of inventories would have been lower by Rs. 1.23 Crores and general reserve would have been lower by Rs. 1.23 Crores.

17 Prior Period Items

There is no material prior period items included in profit & loss account required to be disclosed as per Accounting Standard - 5, prescribed by the Companies (Accounting Standard) Rules, 2006.

18 Corresponding figures for the previous year have been regrouped/rearranged, wherever necessary to confirm to current year classification.

19 Figures in ( ) are related to previous year.


Mar 31, 2010

1 Earning per share

Basic and diluted earning per share is calculated by dividing net profit/loss for the year attributable to equity share holder by weighted average number of equity share outstanding during the year.

2 Securities Premium

The management has taken the view, based on expert opinion that the redemption premium on conversion of FCCB is to be charged against security premium account as premitted by Section 78 of the Companies Act, 1956. Therefore, premium payable on redemption of FCCB is provided for by charge to the Securities Premium Account During the year Rs.Nil (Previous years Rs. 610.77 Lacs) has been utilised out of the securities premium account towards cost of issuance of shares against warrants, FCCB conversion expenses and premium on redemption of FCCBs.

3 Sundry debtors include an amount of Rs. 114.27 Lacs (Previous Year: Rs. 125.92 Lacs) in respect of which cases are pending in the court for recovery, however no provision has been considered necessary by the management with respect to such amount. Sundry Debtors also include receivables of Rs. 4782.85 Lacs (Previous Year: Rs. 1694.32 Lacs) from wholly owned subsidiaries and Rs. 2346.27 Lacs (Previous Year: Rs.4560.12 Lacs) from Joint venture company.

4 Expenses incurred during the year on registration of trade mark amounting to Rs. 34.69 Lacs (Previous year: Rs 6.11 Lacs) has been charged to profit/loss a/c and has not been recognised as an Intangible asset as per Accounting QtanHarH OP.

5 Charity & Donation includes Rs. 2.00 Lacs (Previous Year Rs. 10.00 Lacs) paid to political party and this contribution is not exceeding 5% of companys average net profits of the three immediately preceding financial year computed in accordance with provision of the Company Act, 1956.

6 Quantitative Informations in respect of Capacity, Opening Stock, Production, Sales and Closing Stock (As certified by the management)

7 Share Warrants

The company had on 11th March 2008 alloted 1,02,00,000 warrants convertible into equity shares at a later date on preferential basis to the promoters/promoter group of the company, after payment of advance of 10% of the issue price. The whole amount received on allotment of warrants has been deployed towards expansion of Business activities.

During the previous year the Warrant Holders converted 7,20,000 warrants into Equity Shares at a conversion price of Rs. 78.35. The total Outstanding warrants as on 31 st March 2009 were 94,80,000. The balance amount of Rs. 742.76 Lacs standing against allotment of warrants has been forfeited during the current year as the holders of 94,80,000 warrants did not exercise their option to convert the warrants during the validity period.

8 Extra Ordinary Items

The company has entered into forward exchange contracts to hedge the foreign exchange fluctuation risk.The losses amounting to Rs. 2907.46 Lacs (Previous Year: Rs. 5000.89 Lacs) suffered in foreign exchange transactions are shown as Extra ordinary items.

9 Segment Reporting

The management view is that there are no segments within the meaning of AS-17, on Segment Reporting. The products dealt in are classified in the category of Food Products only and therefore further classification would be redundant.

Geographically the production facilities are mainly located in one state and hence no breakup is warranted.

26 RELATED PARTIES DISCLOSURES UNDER ACCOUNTING STANDARD 18

26.1 List of related parlies

i)Wholly Owned Subsidiaries of the Company

-Sachdeva Brothers Pvt Ltd.India

-Kohinoor Foods USA Inc.

Indo European Foods Ltd,U.K

ii)Joint Ventu re of the Company

Rich Rice Raisers Factory LLC-Dubai

iii)Directors

Mr.Jugal Kishore Arora Chairman Mr.Satnam Arora Jt.MG.Director Mr.Gurnam Arora Jt.MG,Director Mr.Anil Bhatia Director Mr.VijayBurman Director Mr.Vijay Parkash Aggarwal Director





 
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