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Directors Report of Lakshmi Energy & Foods Ltd.

Mar 31, 2015

Dear Members,

The Board of your Company is immensely delighted in presenting its 24th Report. The Report is being presented along with the Audited Financial Statements for the Financial Year ended March 31,2015.

Financial Results

(Rupees in Million)

Standalone

Particulars Year ended 18 months 31-03-2015 ended 31-03-2015

Sale of products 6162.44 18492.41

Other Income 60.88 62.60

Total Revenue 6223.32 18555.01

Profit before Interest, 1031.60 1406.16

Depreciation and Tax

Finance Cost 1177.64 963.80

Depreciation 328.72 639.12

Exceptional items-

Loss on valuation of inventories 2953.32 -

Profit before tax (3428.08) (196.76)

Tax Expense

- Current tax - -

- Deferred Tax (64.11) (162.51)

Profit after tax (3363.97) (34.25)

Add: Balance of Profit brought 4921.27 4909.05 forward

Add: Excess provision of tax of - 46.47 earlier years

Profit available for appropriation 1557.30 4921.27

Appropriations

Provision for dividend (inc. of - - tax)

Transfer to General Reserve - -

Balance carried to Balance Sheet 1557.30 4921.27

Earning per share

- Basic (50.59) (0.53)

- Diluted (50.59) (0.52)



Consolidated

Particulars Year ended 18 months 31-03-2015 ended 31-03-2015

Sale of products 6165.48 19068.79

Other Income 62.80 75.04

Total Revenue 6228.28 19143.83

Profit before Interest, 925.50 1437.21

Depreciation and Tax

Finance Cost 1178.10 964.17

Depreciation 330.78 641.63

Exceptional items-

Loss on valuation of inventories 2953.32 -

Profit before tax (3536.70) (168.59)

Tax Expense

- Current tax - 0.32

- Deferred Tax (64.26) (162.46)

Profit after tax (3472.44) (6.45)

Add: Balance of Profit brought 4920.70 4880.59 forward

Add: Excess provision of tax of - 46.47 earlier years

Profit available for appropriation 1448.26 4920.70

Appropriations

Provision for dividend (inc. of - - tax)

Transfer to General Reserve - -

Balance carried to Balance Sheet 1448.26 4920.70

Earning per share

- Basic (51.76) (0.53)

- Diluted (51.76) (0.52)



Financial & Performance Review

During the year ended 31st March, 2015, your company recorded Sales of Rs.6162.44 million as compared to Rs. 18492.41 million during the period ended 31-03-2014, registering a decline of 50.01% over the last year on annualized basis. PBT has recorded a deficit of Rs.3428.08 millions which is mainly due to loss on valuation of inventories. Whereas, PAT reflects deficit of Rs.3363.97 million.

However, there was sharp fall in the market prices of basmati 1121, 1509, DP, sugandha and traditional basmati paddy as well as rice during 2014-15.The prices of Basmati paddy 1121, 1509 which were hovering around Rs.45,000/- per MT during 2013-14, fell down sharply to Rs.30,000/- (approx) per MT during Oct-Dec 2014 and further came down to Rs.22,000/-(approx) per MT during Jan-March 2015. Basmati DP Paddy prices, which at one point of time, during 2013-14 were about Rs.40,000/- per MT, fell down to Rs.24,000/- (approx) per MT during 2014-15 and Prices of sugandha paddy fell down to Rs.16,000/- (approx) per MT from Rs.32,000/- per MT. Traditional Basmati Paddy price which was about Rs.60,000/- per MT during 2013-14, fell down to Rs.32,000/- (approx) per MT during 2014-15.

Similarly, average price of basmati rice which used to be Rs.80,000/- per MT in 2013-14, came down to Rs.60,000/-per MT (approx) during Oct-Dec 2014 and further came down to Rs. 48,000 - 50,000 per MT during Jan-March 2015, the downward trend continued thereafter also.

Hence, market price of paddy and rice has plummeted by about 40% from the beginning of the season and upto 50% down with comparison to last year. The fall in prices is mainly attributed to higher (almost double) production of basmati coupled with tepid international demand particularly due to import restrictions by countries like Iran. All institutions including Banks, government, APEDA, Agricultural Marketing Boards and Agricultural Produce Market Committee (APMCs) of different States and export organizations are well aware of the phenomenon of downward trend in prices of paddy/rice. The Prevailing reduced prices of rice international will encourage the consumption of basmati in domestic market and in turn will add the sale of rice. The international market will also be encouraged to increase the import of Indian basmati due to very competitive price in international market. These prices can be considered as stable with respect to farming pattern as well as consumer pattern. Per hectare income of farmer is more in case of basmati with respect to non basmati on MSP.

Reduction in market price of paddy/rice as stated above led to substantial fall in the valuation of Inventory resulting into net loss suffered by the company for the year ended 31-03-2015. Consequently, there was shortfall in DP in respect of CC/PC limits availed from different Banks in consortium. During the course of series of consortium / joint lenders forum (JLF) meetings 'restructuring of debt' emerged as the only acceptable corrective action plan by consensus. A scheme for restructuring of debt was proposed by the company to the lenders in the consortium. The restructuring scheme entails carving out of the outstanding balances in cash credit and packing credit accounts, over and above the DP and conversion of the same into WCTL. The said WCTL is envisaged to be repaid over a period of eight years in structured installments with moratorium of two years of repayment of interest and installments, with funding of interest during moratorium. To ascertain the techno-economic viability of the proposed debt restructuring scheme a study was carried out by M/s Dun & Brad street who after a detailed study of the production units of the company viewed that the said debt restructuring scheme was techno - economically viable. The final report of the restructuring scheme alongwith reports of independent Bank's empanelled valuers, as approved by the lenders, was subjected to evaluation by Independent Evaluation Committee (IEC) as per RBI guidelines, which has been approved.

The Company is in the business of the agro processing, grain marketing and electricity power generation. The Company is primarily engaged in the handling, storage, and transportation of foodgrains. In the process, the prime motive is to preserve and store the food grains. Warehousing infrastructure and packing plays key role in process efficiency and profitability as also earn the benefits under the tax laws. Your Company's USP is excellent quality, strategic procurement & marketing and increasing export base. Your Company's presence is all pervasive starting from grass root level of farmers,mandi yards through representatives, procurement, transportation, warehousing, paddy processing, generating other by-products like rice bran-oil, de-oiled cakes and using husk for power plant.

A detailed discussion on the business performance and future outlook has been given in 'Management Discussion and Analysis' (MDA).

Consolidated financial statements

Further pursuant to Accounting Standard -21 (AS- 21) issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented in this Annual Report include financial information of the subsidiary companies i.e Punjab Greenfield Resources Limited, M/s Lakshmi Green Power Limited and M/s Green Energy and Foods Pte. Ltd, Singapore.

Change in nature of Business

During the year under review, there was no change in the nature of Business.

Expansion & Modernization

During the period under review, the company has taken the following expansion/modernization activities:

* To improve the efficiency of various departments, there was a need to build a new administration block at the Works of the Company at Khamanon. The Company has started building state of art modern office to meet the current and future need of the administration office.

* To improve the quality and implement the quality surveillance requirements, the Company has added Sortex Unit within the works at Khamanon.

Performance of Subsidiaries

The following may be read in conjunction with the Consolidated Financial Statements prepared in accordance with Accounting Standard 21. Shareholders desirous of obtaining the report and accounts of your Company's subsidiaries may obtain the same upon request. Further, the report and accounts of the subsidiary companies will also be available on Company's website, www.lakshmigroup.in, in a downloadable format.

Punjab Greenfield Resources Limited, a wholly owned subsidiary company presently acts as a sales and marketing arm of LEAF and has been engaged in buying the finished rice varieties from LEAF, warehousing them and distributing them in various parts of the country using its network of brokers, dealers and distributors.

M/s Lakshmi Green Power Limited and M/s Green Energy and Foods Pte. Ltd, Singapore are subsidiary Companies incorporated in 2010. On being operational, these companies shall significantly contribute to generate power, improve logistics and mobilize additional exports.

Pan Gulf Foods and Industries FZ Co - The company could not commence its operations and the process of Winding up and de- registration and lease & license termination of "Pan Gulf Foods and Industries FZCO" Jebel Ali , Dubai UAE was done in May 2015.

There is no associate company and joint venture of the company.

Material Subsidiaries - The Board of Directors of the Company in its meeting approved the policy for determining Material Subsidiaries. At present the Company does not have any Material Subsidiary. The Policy on Material Subsidiary has been posted on the website of the Company at the following link: http://lakshmigroup.in/downloads/ Policy on material subsidiaries.pdf

The statement containing the salient feature of the financial statement of a company's subsidiaries as per first proviso to sub-section (3) of section 129 in Form AOC-1 is attached as Annexure-1 and forms part of Annual Report.

Transfer to Reserves

The company has not transferred any amount in the General Reserve during the period year under review.

Dividend

Taking into account loss incurred by the company, Board of directors of the company did not recommend any dividend for the year ended 31st March, 2015.

Directors

Mr. Janak Raj Singh was reappointed as Joint Managing Director of the Company in the Board meeting held on 26th March, 2015, for a period of three years with effect from 27th March, 2015. The Board recommends the Special Resolution (regarding reappointment of Mr. Janak Raj Singh as Joint Managing Director) for the approval by the Shareholders of the Company at the ensuing Annual General Meeting.

The shareholders have reappointed Mr. Balbir Singh Uppal as Chairman & Managing Director of the company for a further period of 3 (three) years w. e. f. 1st September, 2014 at the 23rd Annual General Meeting of the Company held on 24th September, 2014.

Mr. I. S. Gumber ceased to be Executive Director on 28th February, 2015 pursuant to end of his term; He continues on Board as non-executive director. Mr. I. S. Gumber retires by rotation at the ensuing Annual General Meeting of the Company.

Due to his pre-occupation, Mr. I.S.Gumber has not offered himself for re-appointment. Since no proposal has been received for filling up the vacancy, it is decided not to appoint any director in place of Mr. I.S.Gumber. Mr. Kanwaljit Singh Jolly resigned from the Board w.e.f.1st April 2015 due to health reasons. The Board of Directors records their appreciation of the good work done by Mr. I.S.Gumber and Mr. Kanwaljit Singh Jolly and acknowledges their contribution to the growth and prosperity of the Company during their tenure as Directors.

Mr. Amarjit Singh, Mr.Nirdosh Bali, Mr.V.K.Mishra and Mr. Kanwaljit Singh Jolly were appointed by the Members with effect from 24th September, 2014 as Independent Directors of the Company under Section 149 of the Companies Act, 2013.

Brief resume/details of the Directors, who are to be appointed/re-appointed as mentioned above have been furnished alongwith the Explanatory Statement to the Notice of the ensuing Annual General Meeting.

Mr. Sukhdeep Singh has been designated as Chief Financial Officer of the Company on 14th November, 2014 pursuant to provisions of Section 203 of the Companies Act, 2013.

Declaration of Independence u/s 149(6)

The Board has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Act, and in the opinion of the Board they fulfils the conditions specified in the Act and the Rules made thereunder and are Independent of the management.

Number of Board Meetings

During the year ended 31st March, 2015, eight meetings of the Board were held on April 11,2014, May 30, 2014, August 12, 2014, August 23, 2014, November 14, 2014, February 13, 2015, March 26, 2015 and March 30, 2015.

Annual Evaluation - Board and its Committees

The Nomination and Remuneration ("NR") Committee has laid down proper criteria and procedure to evaluate and scrutinize performance of the Chairperson, each director (including Executive, Non-Executive and Independent directors), of the Board as a whole and its Committee.

The criteria include different aspects covered under Administrative, Strategic, Operational and Compliance headings.

As per laid down procedure, the Independent Directors held a separate meeting to review the performance of the Chairperson of the Company after taking into account the views of Executive and Non Executive Directors. The substantial, and continuing, contribution of the Chairperson in the growth of the Company has been highly commended. The Independent Directors also reviewed performance of every Executive and Non Executive Director of the Board. The performance evaluation of each Independent Director was done by the entire Board (except the Independent Directors being evaluated).

The performance of each committee has been evaluated by its members and found to be highly satisfactory.

On the basis of this exercise, the NR Committee and the Board, after recognising the important contribution being made by each Independent Directors have decided that all Independent Directors should continue to be on the Board.

Familiarisation programme for Independent Directors

During FY 2014-15, the Board including all Independent Directors were explained about their roles, rights, responsibilities in the Company through detailed presentations on the changes in backdrop of the Companies Act, 2013 and Listing Agreement.

The Board including all Independent Directors was provided with relevant documents, reports and internal policies to enable them to familiarise with the Company's procedures and practices from time to time besides regular briefing by the members of the Senior Leadership Team.

The Familiarisation programme for Independent Directors is posted on the website www.lakshmigroup.in and can be viewed at the following link - http://lakshmigroup.in/downloads/FAMILIARIZATIONPROGRAMFORINDEPENDENT DIRECTORS.pdf.

Remuneration Policy

Your Company has set up a Nomination and Remuneration ('NR') Committee pursuant to Section 178 of the Act which has formulated a policy for Directors' Appointment and remuneration for Directors, KMP and other employees. They have also developed the criteria for determining qualifications, positive attributes and independence of a Director including making payments to Non-Executive Directors.

NR Committee takes into consideration the best remuneration practices being followed in the industry while fixing appropriate remuneration packages. Further the compensation package for Directors, Key Managerial Personnel, Senior Management and other employees are designed based on the following set of principles:

* Aligning key executive and board remuneration with the longer term interests of the Company and its shareholders;

* Minimise complexity and ensure transparency;

* Link to long term strategy as well as annual business performance of the Company;

* Promotes a culture of meritocracy and is linked to key performance and business drivers; and

* Reflective of line expertise, market competitiveness so as to attract the best talent.

Your directors affirm that the remuneration paid to employees, KMP and Directors is as per the Remuneration Policy of the Company. The Remuneration Policy of the Company is posted on the website www.lakshmigroup.in and can be viewed at the following Link http://lakshmigroup.in/Investor.html

Directors' Responsibility Statement

Your Directors make the following statement in terms of Section 134(3)(c) & (5) of the Act, which is to the best of their knowledge and belief and according to the information and explanations obtained by them:

1. that in the preparation of the annual accounts for the Financial Year ended March 31,2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. that appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the State of Affairs as at March 31, 2015 and of the Profit of your Company for the Financial Year ended March 31,2015;

3. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

4. that the annual accounts for the Financial Year ended March 31,2015 have been prepared on a going concern basis;

5. that the Directors have laid down Internal Financial Controls which were followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

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

Management Discussions and Analysis Report

Management Discussions and Analysis Report as required under Clause 49 of the Listing Agreement is given as a separate statement in the Annual Report and forms part of this Report.

Corporate Governance

The company has complied with the Corporate Governance requirements, as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges. A separate section on Corporate Governance alongwith a certificate from the Auditors of the company confirming the compliance is annexed and forms part of this Report.

The Board has also evolved and adopted a Code of Conduct based on the principles of Good Corporate Governance and best management practices being followed globally. The Code is available on the website of the Company www.lakshmigroup.in.

Transfer to Investor Education & Protection Fund

During the year under review, there was no amount of unpaid / unclaimed dividend due to be transferred to "Investor Education and Protection Fund" (IEPF) established by the Central Government.

Hereunder are the details of Dividends paid by the Company and their respective due dates of transfer of unpaid or unclaimed dividends to IEPF:

Dividend for the year Date of Declaration Due date for of Dividend transfer to IEPF

2007- 08 (Final Dividend) 27/03/2009 02/05/2016

2008- 09 (Final Dividend) 27/03/2010 02/05/2017

2009- 10 (Final Dividend) 26/03/2011 01/05/2018

2010- 11 (Final Dividend) 28/03/2012 03/05/2019

2011- 12 (Final Dividend) 28/03/2013 03/05/2020

2012- 14 (Interim Dividend) 03/05/2013 08/06/2020

Material Changes and commitments

Save as mentioned elsewhere in this Report, no material changes and commitments affecting the financial position of the company have occurred between the end of the financial year of the company - 31st March, 2015 and the date of this Report.

Changes in Capital Structure

Non exercise of option to convert the warrants into equity shares

As per the approval granted by the members of the Company at the 22nd Annual General Meeting held on 28th March, 2013, the Company on receipt of the requisite Stock Exchange Approvals had issued 34,80,000 warrants of series-2 at Rs. 22/- per warrant to Mr.Balbir Singh Uppal (a part of Promoters' Group) with an entitlement to convert into/exchange with the equal number of Equity Shares of Rs.2/- each of the Company. Since the Warrant holder did not exercise the conversion option within 18 months from the date of their allotment, so the entitlement of conversion has lapsed and 25% up-front amount of Rs.1,91,40,000/- received by the company on such warrants has been forfeited as per terms.

Except the above matter, there has not been any change in capital structure. Authorised Capital of the company is Rs.20,00,00,000 and paid up capital is Rs.13,29,80,000/-.

Particulars of loans, guarantees and investments u/s 186

The details of the investments made by the Company are in Note No. 14 of the audited financial statements. The Company has not made any loans to any persons within the meaning of Section 186 and has also not given any guarantees within the meaning of that section.

Related Party Transactions

All related party transactions pursuant to Section 188(1) of the Act that were entered into during the Financial Year were on an arm's length basis and in the ordinary course of business. There were no materially significant related party transactions made by your Company with its Promoters, Directors, Key Managerial Personnel or other designated persons which might have a potential conflict with the interest of the Company at large.

Related Party Transactions were placed before the Audit Committee for its approval. There was no matter requiring approval of the Board therefore no detail is required to be provided in AOC-2. Your Company has developed Standard Operating Procedures for the purpose of identification of Related Party Transactions and monitoring on a regular basis. Related party transactions were disclosed to the Board on a regular basis as per AS-18.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website at www. lakshmigroup.in and can be viewed at the following link: http://lakshmigroup.in/downloads/Relatedpartytransactionpolicy.pdf

None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company except the remuneration received by respective Directors.

Risk Management System

Your Company follows a comprehensive system of Risk Management and has adopted a procedure for risk assessment and its minimisation. It ensures that all the risks are timely defined and mitigated in accordance with the Risk Management Process, including identification of elements of risk which might threaten the existence of the Company. During FY 2014- 15, your Company has also constituted a Risk Management Committee which intensely monitors the Risk Management Process in the Company and the same is periodically reviewed by the Board.

Vigil Mechanism/ Whistle Blower Policy

Your Company has in place a well formulated Vigil Mechanism/ Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The policy enables the employees, Directors and other stakeholders to raise their concern. There was no incident when the access to the Audit Committee was denied to any employees with respect to vigil mechanism. The policy is posted on the website of the Company at www. lakshmigroup.in at the following link: http://lakshmigroup.in/ downloads/VIGIL MECHANISM.pdf

Corporate Social Responsibility (CSR)

With the introduction of Section 135 of the Act, which came into effect during this financial year, the Company has constituted a Corporate Social Responsibility ("CSR") Committee. The Committee manages and overviews the CSR projects of your Company. The CSR activities are based on the CSR policy approved by the Board which is available on the Company's website www.lakshmigroup.in under the section Investor Information.

The CSR initiatives of the Company are identified in consultation with the management, social experts, community and other stakeholders. The implementation strategy is planned in a way so as to give sustainable and scalable solutions. The identified focus areas for the Company are: i) Eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available safe drinking water: ii) Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects; iii) Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups; iv) Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water; v) Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts; vi) Measures for the benefit of armed forces veterans, war widows and their dependents; vii) Training to promote rural sports, nationally recognised sports, paralympic sports and Olympic sports; viii) Contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women; ix) Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government; x) Rural development projects; xi) Such other activities as may be recognized by the Committee/ Board or as may be required/ permissible under prevailing law(s).

As on 31st March, 2015, Corporate Social Responsibility Committee consisted of the following directors:

1. Mr. Balbir Singh Uppal, CMD - Chairman

2. Mr. Nirdosh Bali, Independent director - Member

3. Mr. Kanwaljit Singh Jolly, Independent director - Member

Mr. V.K.Mishra has been inducted as member of CSR committee w.e.f 29th May, 2015 in place of Mr. Kanwaljit Singh Jolly who has resigned as Director wef 1st April 2015.

The Company has actively supported various initiatives in the areas of providing housing and promoting education to children from needy and poor families over the years. The Annual Report on Corporate Social Responsibility Activities is annexed herewith as Annexure-2 and forms an integral part of this report.

Audit Committee

The Audit Committee of the Company comprises of the following Non-Executive and Independent Directors:

1. Mr. Nirdosh Bali - Chairperson

2. Mr.V.K.Mishra - Member

3. Mr. Amarjit Singh - Member

The details about Audit Committee and its terms of reference etc. have been given in Corporate Governance Report.

During the Year under review there was no such recommendation of the Audit Committee which was not accepted by the Board.

Auditors

M/s. SMPS & Co., Chartered Accountants, New Delhi, Statutory Auditors of the Company were appointed for 4 (four) consecutive years from the date of the 23rd Annual General Meeting (AGM) for a term up to the conclusion of 27th AGM of the Company (subject to ratification of the appointment by the members at every AGM held after this AGM). At the ensuing AGM, their appointment is proposed to be ratified. The Company has received an eligibility letter from the auditors to the effect that the ratification of their appointment, would be in accordance with Sections 139 and 141 of the Act. The Board recommends the ratification of their appointment.

Auditors' Report

The observations of Auditors in their Report, read with the relevant notes to accounts are self explanatory and therefore do not require further explanation pursuant to Section 134(3)(f)(i). There is emphasis of matter in Auditor's report relating to note no. 29(1) of financial statement. Yours directors clarify that the said note no. 29(1) of financial statement is self explanatory and is a matter of record.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and rules made thereof, your Company has appointed M/s. A. Arora & Co., Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the Financial Year ended March 31,2015 is annexed herewith as Annexure-3. The Secretarial Auditor has neither qualified the Secretarial Audit Report nor given any adverse remark for which explanation may be required to be given in the Director's Report.

The observations of Secretarial Auditor in the Report are self explanatory and therefore do not require further explanation.

Internal Control Systems and their Adequacy

The Company has a proper and adequate system of internal controls. This ensures that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorised, recorded and reported correctly. An extensive programme of internal audits and management reviews supplements the process of internal control. Properly documented policies, guidelines and procedures are laid down for this purpose. The internal control system has been designed to ensure that the financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets. The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

Insider Trading Code

In compliance with the SEBI regulation on prevention of insider trading, the Company had instituted a comprehensive Code of Conduct for regulating, monitoring and reporting of trading by Insiders. The said Code laid down guidelines, which advised them on procedures to be followed and disclosures to be made, while dealing with shares of the Company and cautioned them on consequences of non-compliances.

Further, the Company has put in place a Code of practices and procedures of fair disclosures of unpublished price sensitive information. Both the aforesaid Codes are in lines with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

Deposits from Public

The Company has not accepted any deposits from public during the year and as such no amount on account of Principal or interest on public deposits was outstanding as on the date of balance sheet.

Stock Exchange Listing

The shares of the company are presently listed on the following Stock Exchanges:

1. National Stock Exchange of India Limited;

2. BSE Limited;

During the year, Ludhiana Stock Exchange (LSE) voluntarily surrendered its recognition and exited as Stock Exchange and SEBI de-recognized Delhi Stock Exchange (DSE) as Stock Exchange during the year. Consequently, shares of the company are no more listed on LSE and DSE.

Personnel

As on March 31,2015, the total numbers of employees on the records of the Company were 287. Directors place on record their appreciation for the significant contribution made by all employees, who through their competence, dedication, hard work, co-operation and support have enabled the Company to cross new milestones on a continual basis.

Particulars of Employees

The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure-4 forming part of this Report.

Extract of Annual Return

The details forming part of the extract of the Annual Return pursuant to Sections 92(2) and 134(3)(a) of the Act and rules made thereof in form MGT 9 is annexed herewith as Annexure-5.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo.

Information required under Section 134(3)(m) of the Act, read with rules made thereof is given hereunder.

(A) Conservation of Energy:

(i) The steps taken or impact on conservation of energy

In pursuit of continual improvement towards energy conservation and compliance with environmental regulations, many initiatives have been underway such as:

a. The maintenance of the Boiler and Turbine generator is carried out regularly with optimum care with the help of the technical professionals and modern equipments.

b. Most of the traditional lights are being converted into CFL/EFL.

c. Installation of variable frequency drives on high pressure boiler deed water pumps, ID fans, FD fans and fuel feeders.

d. Installation of soft starter at grading point.

e. AC drive on cooling fans.

f. Capacitator panel for enhancing power factor.

g. Interlocking of motor operation to reduce the idle running hours of the motor in terms of power saving and safety.

h. Schedule cleaning of condenser in power plant and heat exchanger of various plants is being carried out to increase the heat transfer.

i. An O2 analyzer is used for monitoring and controlling flue gas of the boiler.

j. Use of ETP treated water for horticulture.

k. Use of condensate steam/water in boiler for power generation.

l. Air compressor with latest technology is installed to reduce power consumption at low load mode.

m. Additional air dryers provided in compressor air system to avoid zero moisture to Sortex machines. Compressor air pipe lines are changed with Aluminum pipes to maintain the quality of air entering Sortex machines.

n. Captive husk based co-generation of power, reducing consumption from main grid utilization.

o. Usage of other biomass fuel like rice/paddy straw, wheat straw to reduce the consumption of rice husk.

p. Development of greenery all over the plant.

The above energy conservation measures would result in reduction in energy consumption and effectively saving in drawal of power from the State Grid upto 5 to 10%.

(ii) The steps taken by the Company for utilizing alternate sources of energy :- The company is contemplating to install solar power plant.

(iii) The capital investment on energy conservation equipments:-

Further energy conservation is planned through replacement of and modification of inefficient equipments and by providing automatic controls to reduce idle running of equipments.

(B) Technology Absorption:

(i) the efforts made towards technology absorption and;

(ii) the benefits derived like product improvement, cost reduction, product development or import substitution;

The Company is taking caring of latest developments and advancements in technology and all steps are being taken to adopt the same. The Process equipments installed in the plant are of from world class manufacturers with latest technology like Satake -Japan, Schmidt Seager - Germany, Shin Nippon Machinery Co. Ltd, Japan, Toyo Denki Power systems , Thermax, Sullair - US,ABB, Schneider, AREVA, Forbes Marshal etc. The company's technical team is in process of exploring the opportunities & updating new technology for sophisticated equipments with latest technology.

(iii) Technology imported (imported during the last three years reckoned from the beginning of the financial year)- None

(a) the details of technology imported;N.A

(b) the year of import; N.A

(c) whether the technology been fully absorbed:Yes

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; N.A

(iv) the expenditure incurred on Research and Development: The company is yet to carry out R & D on product genes cultivation which could be predominantly back end process.

(C) Foreign Exchange Earnings and Outgo:

i) Export Activities/Initiatives to Increase Exports/Development of New Export Markets / Export Plans

EXPORT INITIATIVES 2014-15

During the period under review, your company focused on the export of PUSA basmati 1121 rice and exported rice amounting to Rs.696.24 million to Saudi Arabia and USA (previous year- Rs. 1157.95 million). Your company is very active in exploring the new markets.

EXPORT PLAN FOR 2015-16

* Focus on existing international market for business growth

* Explore the possibility of export to other international markets.

* Opening of new overseas offices to improve customer touch points.

During the year under review, the earning on account of foreign exchange (export sale) was Rs.714.30 million (Previous year Rs. 1132.86 million), and the outgo in foreign exchange was Rs.237.31 million (Previous year - Rs.12.23 million).

Cost Auditors

The Board had appointed M/s Anil Sharma & Co., Cost Accountants, Chandigarh, as the Cost Auditors of the Company in accordance with Section 148 of the Companies Act, 2013 for the financial year 2014-15. But, as per Cost Audit Rules-2014, Cost Audit is not applicable to our company during 2014-15; so, Cost Audit Report for the year ended 31st March 2015 is not required. However, Cost Auditors' Report for the period 31st March, 2014 was forwarded to the Central Government in pursuance of the provisions of the Companies Act, 2013.

Statutory Disclosures

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. Deposit from the public falling within the ambit of Section 73 of the Act and rules made thereof.

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

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

4. Neither the Managing Director(s) nor the Whole-time Director(s) 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.

6. The Company has in place a Prevention of Sexual Harrassment in line with the requirements of the Sexual Harassment of Women at the workplace (Prevention, Prohibition and Redressal) Act, 2013. An internal complaints committee has been set up to redress, complaints received regarding sexual harrassment.All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year 2014-2015, no complaints were received by the Company related to sexual harrassment.

Acknowledgement

Directors wish to convey their sincere appreciation for the co-operation and excellent assistance the company has received from Banks, central/state government(s) and various ministries, departments of the central/state government(s), dealers and valued business associates without which it would not have been possible to achieve all round progress and growth of the company. The Board also places on record its appreciation to shareholders for their continued trust and support. The Board also places on record its appreciation for the continuous patronage of the customers of the company.

For and on Behalf of the Board

Sd/- Place: Chandigarh Balbir Singh Uppal Date: 13-08-2015 Chairman and Managing Director DIN: 00064718


Mar 31, 2014

Dear Members

The directors are pleased to present the 23rd Annual Report and the company''s audited accounts for the 18 months ended 31st March, 2014.

Financial Results

The summarised financial results of the Company for the 18 months ended 31st March, 2014 as compared to the preceding year are as under:

(Rupees in Million) Standalone Consolidated Particulars Current Previous Current Previous Period Year Period Year Ended Ended Ended Ended 31-03-2014 30-09-2012 31-03-2014 30-09-2012

Sale of products 18492.41 12100.40 19068.79 15466.90

Other Income 62.60 9.05 75.04 17.98

Total Revenue 18555.01 12109.45 19143.83 15484.87

Profit before Interest, Depreciation and Tax 1406.16 1753.72 1437.21 1741.08

Finance Cost 963.80 1345.90 964.17 1346.03

Depreciation 639.12 398.88 641.63 399.54

Profit before tax (196.76) 8.94 (168.59) (4.49)

Tax expense

- Current tax - 1.79 0.32 -

- Deferred Tax (162.51) 100.51 (162.46) (100.16)

Profit after tax (34.25) 107.66 (6.45) 95.67

Add: Balance of Profit brought forward 4909.05 4816.98 4880.59 4802.27

Add: Excess provision of earlier years 46.46 - 46.46 -

Add: MAT credit entitlement - 1.79 -

Profit available for appropriation 4921.26 4926.43 4920.70 4897.97

Appropriations

Provision for dividend (inc. of tax) - 14.69 - 14.69

Transfer to General Reserve - 2.69 - 2.69

Balance carried to Balance Sheet 4921.26 4909.05 4920.70 4880.59

Financial & Performance Review

Your company''s USP is excellent quality, strategic procurement & marketing and increasing export base. Your company''s presence is all pervasive starting from grass root level of farmers, mandi yards through representatives, procurement, transportation, warehousing, paddy processing, generating other by-products like rice bran oil, de-oiled cakes and using husk for power plant.

During the 18 months ended 31st March, 2014, your company recorded Sales of Rs. 18492.41 million as compared to Rs. 12100.40 million in year 2011-12, registering a growth of 1.88% over the last year on annualized basis. PBT has recorded a deficit of Rs. 196.76 millions which is mainly due to foreign exchange fluctuation. Whereas PAT reflects deficit of Rs.34.25 million. However, your company is effectively taking steps to mitigate losses out of forex fluctuation.

Change in FinancialY ear

The Board of Directors of the Company approved change in the financial year of the Company from October-September to April-March effective April 1, 2014. In view of this, the current financial year is for a period of 18 months i.e. October 1, 2012 to March 31, 2014.

Expansion & Modernization

The Company is primarily engaged in the transportation, handling and storage of food grains. In the process, the prime motive is to preserve and store the foodgrains. Warehousing infrastructure and packing plays key role in process efficiency and profitability as also earn tax benefits under the tax laws.

During the period under review, the company has taken the following measures for expansion/modernization:

- Installed new Sella Plant and balancing equipment.

- Extended the warehousing capacity within the factory premises.

- Set up Mumbai Office

- Added machinery in the existing Power Plant Transfer to Reserves

The company has not transferred any amount in the General Reserve during the period year under review.

Dividend

During the period under review, Interim dividend of Rs.0.30 per share was paid in May, 2013 Taking into account profitability and interim dividend already paid, Board of directors of the company did not recommend final dividend for the period ended 31st March, 2014.

Changes in Capital Structure

Board of Directors of the company in its meeting held on April 22, 2013, had allotted 67,80,000 warrants convertible into equal number of equity shares of Rs.2/- each at an issue price of Rs.22/- each (including premium of Rs.20/- per share) to Mr. Balbir Singh Uppal, Promoter, on preferential basis as per details given below, in accordance with the Chapter VII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and in terms of In-Principle approvals received from NSE and BSE.

Series-1 Series-2 Total

Convertible Warrants allotted 33,00,000 34,80,000 67,80,000

Issue Price (Rs./share) 22 22 22

On 5th July, 2013, the company allotted 33,00,000 equity shares of Rs.2/- each at a premium of Rs.20/- per share to Mr.Balbir Singh Uppal on conversion of 33,00,000 Convertible Warrants of Series-1.

Authorised Capital of the company is Rs.20,00,00,000 and paid up capital is Rs.13,29,80,000 after the aforesaid allotment.

TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND

During the period under review, the Company has transferred unpaid / unclaimed dividend for the FY 2005-06 (interim & final) and FY 2006-07 (interim) amounting to Rs.13,06,302/- to "Investor Education and Protection Fund" (IEPF) established by the Central Government within the stipulated time period.

Hereunder are the details of Dividends paid by the Company and their respective due dates of transfer of unpaid or unclaimed dividends to IEPF:

Dividend for the year Date of Declaration of Due date for transfer to Dividend IIEPF

2007-08 (Final Dividend) 27/03/2009 02/05/2016

2008-09 (Final Dividend) 27/03/2010 02/05/2017

2009-10 (Final Dividend) 26/03/2011 01/05/2018

2010-11 (Final Dividend) 28/03/2012 03/05/2019

2011-12 (Final Dividend) 28/03/2013 03-05-2020

2012-14 (Interim Dividend) 03/05/2013 08-06-2020

Material Changes and commitments

Save as mentioned elsewhere in this Report, no material changes and commitments affecting the financial position of the company have occurred between the end of the financial year of the company - 31st March, 2014 and the date of this Report.

Management Discussions and Analysis Report

Management Discussions and Analysis Report as required under Clause 49 of the Listing Agreement is given as a separate statement in the Annual Report and forms part of this Report.

Fixed Deposits

The Company has not invited / received any fixed deposits during the period.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo.

a. Conservation of Energy & Technology Absorption:

i & ii Energy Conservation Measures taken and Additional Investments / Proposals, if any, being implemented for reduction of consumption of energy:

In pursuit of continual improvement towards energy conservation and compliance with environmental regulations, many initiatives have been underway such as:

a. The maintenance of the Boiler and Turbine generator is carried out regularly with optimum care with the help of the technical professionals and modern equipments.

b. Most of the traditional lights are being converted into CFL/EFL.

c. Installation of variable frequency drives on high pressure boiler deed water pumps, ID fans, FD fans and fuel feeders.

d. Installation of soft starter at grading point.

e. AC drive on cooling fans.

f. Capacitator panel for enhancing power factor.

g. Interlocking of motor operation to reduce the idle running hours of the motor in terms of power saving and safety.

h. Schedule cleaning of condenser in power plant and heat exchanger of various plants is being carried out to increase the heat transfer.

i. An O2 analyzer is used for monitoring and controlling flue gas of the boiler.

j. Scale Ban Equipment (non-chemical treatment equipment) is installed at Power Plant Condenser inlet to reduce chemical consumption in cooling tower and reduce water blow down.

k. Use of ETP treated water for horticulture.

l. Using fuel additives in boiler to increase the combustion efficiency.

m. Use of condensate steam/water in boiler for power generation.

n. Air compressor with latest technology is installed to reduce power consumption at low load mode.

o. Compressor air pipe lines are changed with Aluminum pipes to maintain the quality of air entering Sortex machines.

p. Captive husk based co-generation of power, reducing consumption from main grid utilization.

q. Usage of other biomass fuel like rice/paddy straw, wheat straw to reduce the consumption of rice husk.

r. Development of greenery all over the plant.

iii Impact of i & ii above for reduction of energy consumption

The above energy conservation measures would result in reduction in energy consumption and effectively saving in drawal of power from the State Grid upto 5 to 10%.

iv. Total Energy consumption and Energy consumption per unit of production as per Form ''A The additional information as required under the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 are given as Annexure-I to this report and forms part of it.

b. Technology Absorption: The Company is taking caring of latest developments and advancements in technology and all steps are being taken to adopt the same. The Process equipments installed in the plant are of from world class manufacturers with latest technology like Satake -Japan, Schmidt Seager - Germany, Shin Nippon Machinery Co. Ltd, Japan, Toyo Denki Power systems , Thermax, Sullair - US,ABB, Schneider, AREVA, Forbes Marshal etc. The company''s technical team is in process of exploring the opportunities & updating new technology for sophisticated equipments with latest technology. However, the company is yet to carry out R & D on product genes cultivation which could be predominantly back end process.

c. Foreign Exchange Earnings and Outgo:

i) Export Activities/Initiatives to Increase Exports/Development of New Export Markets / Export Plans

EXPORT INTIATIVES 2012-14

During the period under review, your company focused on the export of PUSA basmati 1121 rice and exported rice amounting to Rs.1157.95 million to gulf countries, Australia and USA (Previous year - Rs. 1292.56 milling).Your company is very active in exploring the new markets.

EXPORT PLAN FOR 2014-15

- Focus on existing international market for business growth

- Explore the possibility of export to other international markets.

- Opening of new overseas offices to improve customer touch points.

During the year under review, the earning on account of foreign exchange (export sale) was Rs.1132.86 million (Previous year Rs. 1320.99 million), and the outgo in foreign exchange was Rs.12.23 million (Previous year - Rs. 132.51 million).

Particulars of Employees

Details and information of employees of the company who were in receipt of remuneration as prescribed under section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 is given in the Annexure-II to this Report.

Directors

During the year under report, Mr. Vilas Unavane resigned from the directorship of the company. The Directors place on record their appreciation of the valuable services rendered and guidance received from him during his tenure as member of the board.

At the ensuing annual general meeting, Mrs. Vijay Luxmi will retire by rotation and being eligible, offer herself for re- appointment. Your directors recommend her re-appointment at the ensuing annual general meeting.

Your Board recommends the re-appointment of Mr. Balbir Singh Uppal as Chairman and Managing Director of the Company for a period of three years with effect from 1st September, 2014. Board also recommends Mr. Janak Raj Singh as Joint Managing Director of the Company for a period of three years with effect from 27th March, 2015.

Further in terms of the provisions of the Companies Act, 2013, Mr. Amarjit Singh, Mr. Nirdosh Bali, Mr. V.K.Mishra and Mr. Kanwaljit Singh Jolly, Non-Executive and Independent Directors of the Company whose office are liable to determination by retirement of Directors by rotation have been appointed as Independent Directors in terms of Sections 149 and 152 of the Companies Act, 2013 for 5 (five) consecutive years from the date of the 23rd Annual General Meeting. The Board has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and who in the opinion of the Board fulfils the conditions specified in the Act and the rules made thereunder and are Independent of the management. Thus, the Board recommends their appointment as Independent Directors.

Brief resume/details of the Director, who is/are to be appointed/re-appointed as mentioned herein above has been furnished in the Notice of AGM.

Human Resource Development

During the year under review, your company''s commitment to building harmonious employee relations was evident from the successful and smooth running of its operations at its works. The collaborative spirit of partnership across all sections of employees and their sense of ownership and commitment has sustained the culture of excellence, learning and readiness to change. The collective dedication of the employees is helping your company in delivering superior customer and shareholder value. Your company salutes the unflinching commitment of its dedicated team of employees. Industrial relations have been cordial.

Corporate Governance

The company has complied with the Corporate Governance requirements, as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges. A separate section on Corporate Governance alongwith a certificate from the Auditors of the company confirming the compliance is annexed and forms part of this Report.

Subsidiary Companies

Punjab Greenfield Resources Limited, a wholly owned subsidiary company presently acts as a sales and marketing arm of LEAF and has been engaged in buying the finished rice varieties from LEAF, warehousing them and distributing them in various parts of the country using its network of brokers, dealers and distributors.

M/s Lakshmi Green Power Limited and M/s Green Energy and Foods Pte. Ltd, Singapore are subsidiary companies incorporated in 2010. On being operational, these companies shall significantly contribute to generate power, improve logistics and mobilize additional exports.

Pan Gulf Foods and Industries FZ Co- The company has ventured into setting up its subsidiary company in Dubai. This company will process, package and distribute LEAF''s basmati rice brands in GCC countries, Iran, Kingdom of Saudi Arabia, Yemen, Iraq and North Africa, this Company is yet to start its operations.

A statement pursuant to section 212 of the Companies Act, 1956, relating to subsidiary companies is attached to the accounts. In terms of the approval granted by the Central Government vide letter No. 47/718/2010–CL–III dated December 28, 2010 under Section 212(8) of the Companies Act, 1956, the audited accounts and Reports of Board of Directors and Auditors of the Company''s subsidiaries have not been annexed to this Annual Report. The Company will make available the Annual Accounts of the subsidiaries to any of the member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiaries will also be kept open for inspection at the Registered Office of the Company.

Consolidated financial statements

Further pursuant to Accounting Standard -21 (AS- 21) issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented in this Annual Report include financial information of the subsidiary companies i.e Punjab Greenfield Resources Limited, M/s Lakshmi Green Power Limited and M/s Green Energy and Foods Pte. Ltd, Singapore.

Auditors

During the period under review, M/s. S. Kumar Gupta & Associates, Chartered Accountants and M/s B.K.Nayar & Co. Chartered Accountants, had resigned as Statutory Auditors of the company. In the Extra Ordinary General Meeting held on 17th May, 2014, M/s. SMPS & Co., Chartered Accountants, New Delhi were appointed as Statutory Auditors of the Company to conduct the Statutory Audit for the period ended 31st March, 2014. M/s. SMPS & Co., Chartered Accountants hold office until the conclusion of the ensuing annual general meeting and are recommended for re-appointment for 4 (four) consecutive years from the date of the 23rd Annual General Meeting (AGM) for a term upto the conclusion of 27th AGM of the Company in the Calendar year 2018 (subject to ratification of the appointment by the members at every AGM held after this AGM). The company has obtained a certificate from M/s. SMPS & Co., Chartered Accountants to the effect that their proposed re-appointment, if made, would be in accordance and conformity with the limits as specified in that section.

Auditors'' Report

The observations of Auditors in their Report, read with the relevant notes to accounts are self explanatory and therefore do not require further explanation.

Cost Auditors

The Board has re-appointed M/s Anil Sharma & Co., Cost Accountants, Chandigarh, as the Cost Auditors of the Company in accordance with Section 148 of the Companies Act, 2013 for the financial year 2014-15. The Cost Auditors'' Report for the period 31st March, 2014 will be forwarded to the Central Government in pursuance of the provisions of the Companies Act, 2013 or any enactment thereof.

Internal Control Systems and their Adequacy

The Company has a proper and adequate system of internal controls. This ensures that all assets are safeguarded and protected against loss from unauthorised use or disposition and those transactions are authorised, recorded and reported correctly.

An extensive programme of internal audits and management reviews supplements the process of internal control. Properly documented policies, guidelines and procedures are laid down for this purpose. The internal control system has been designed to ensure that the financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets.

The Company also has an Audit Committee, comprising of 3 Directors including 2 Non-Executive & Independent professionally qualified Directors, who interact with the Statutory Auditors, Internal Auditors, Cost Auditors and Auditees in dealing with matters within its terms of reference. The Committee mainly deals with accounting matters, financial reporting and internal controls. During the period under review, the Audit Committee met seven times.

Directors'' Responsibility Statement

Your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956, which is to the best of their knowledge and belief and according to the information and explanations obtained by them:

1. that in the preparation of the annual accounts for the period ended March 31, 2014, the applicable accounting standards have been followed;

2. that appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs as at March 31, 2014 and of the Profit of the Company for the period ended March 31, 2014;

3. that 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; and

4. that the annual accounts for the period ended March 31, 2014 have been prepared on a going concern basis.

Corporate Social Responsibility (CSR)

Your company is taking active part in promoting education to children from needy and poor families. Necessary funds have been allocated and disbursed towards the same.

Stock Exchange Listing

The securities of the company are presently listed on the following Stock Exchanges:

1. National Stock Exchange of India Limited;

2. Bombay Stock Exchange Limited;

3. Ludhiana Stock Exchange Limited;

4. Delhi Stock Exchange Limited

The company has paid the listing fees for the financial year 2013-14 to all the Stock Exchanges wherein the equity shares of the company are presently listed.

The Companies Act, 2013

During the current FY the Companies Act, 1956 has been replaced by Companies Act, 2013 and became applicable for every company from April 1, 2014. Your Company has been regular in keeping pace with the fast changes that has become applicable and initiated necessary actions accordingly. Some of the important initiatives are as under:

a) Modification in terms of Audit Committee;

b) Modification in terms of Nomination and Remuneration Committee;

c) Modification in terms of Stakeholders Relationship Committee;

d) Appointment of Secretarial Auditors;

e) Setting up of Vigil Mechanism;

f ) Constitution of Corporate Social Responsibility Committee;

g) Identification of Related parties as per new Act.

Acknowledgement

Your company''s board and employees are inspired by their vision of sustaining LEAF''s position as one of India''s most significant company in the food segment through world class performance creating enduring value for all shareholders and the Indian society.

Your directors wish to convey their sincere appreciation for the co-operation and excellent assistance the company has received from Banks, central/state government(s) and various ministries, departments of the central/state government(s), dealers and valued business associates without which it would not have been possible to achieve all round progress and growth of the company. The Board also places on record its appreciation to shareholders for their continued trust and support and also for the devoted services of all the employees of the company for their outstanding contribution to the operations during the year under review. The Board also places on record its appreciation for the continuous patronage of the customers of the company.

For and on Behalf of the Board

Sd/- Place: Chandigarh Balbir Singh Uppal Date: 30.05.2014 Chairman and Managing Director


Sep 30, 2012

Dear Members

The directors are pleased to present the 22nd Annual Report of your company together with the Audited Annual Accounts for the year ended 30th September, 2012.

Financial Results

The summarised financial results of the Company for the year ended 30th September, 2012 as compared to the preceding year are as under:

(Rupees in Million)

Particulars Current Year Previous Year (2011-12) (2010-11)

Sales 12100.40 10370.88

Other Income 9.05 9.70

Total Income 12109.45 10380.58

Profit before Interest, Depreciation and Tax 1753.72 1483.93

Financial Expenses 1345.90 1057.70

Depreciation 398.88 386.03

Profit before tax 8.94 40.20

Less: Tax expense

- Current Tax 1.79 8.01

- Deferred Tax (100.51) (91.09)

Profit after tax 107.66 123.28

Add: MAT credit entitlement 1.79 8.01

Add: Balance of Profit brought forward 4816.98 4703.56

Profit available for appropriation 4926.43 4834.85

Appropriations

Provision for dividend (inc. of tax) 14.69 14.79

Transfer to General Reserve 2.69 3.08

Balance carried to Balance Sheet 4909.05 4816.98

Financial & Performance Review

Your company''s USP in terms of excellent quality, strategic procurement & marketing and sustaining export base, has helped your company successfully navigate steady growth during year inspite of economic challenges such as increasing gap of CAD, sluggish GDP, inflation, forex volatility and season based agri-product.

Your company''s presence is all pervasive starting from grass root level of farmers, mandi yards through representatives, procurement, transportation, warehousing, paddy processing, generating other by-products like rice bran oil, de-oiled cakes and using husk for power plant.

During the year, your company recorded Sales of Rs. 12100.40 million as compared with Rs. 10370.88 million in 2010-11, registering a growth of 16.68% over the last year. Profit before tax was recorded at Rs.8.94 million during the year showing decline in profitability in comparison with last year''s profit of Rs.40.20 million. However, PBT was recorded after adjusting non-recurring forex fluctuation deficit of Rs.388.58 million. The PBT without adjustment of said forex deficit would be Rs.397.52 million. Whereas PAT reflects Rsl07.66 million post adjustment forex loss. Please refer alongside chart for the comparison.

In order to mitigate losses out of forex fluctuation, your company has adopted robust Risk Management Policy compatible to business process. Risk Management Committee has been formed to regularly analyse and recommend action points. Furthermore, separate team of experts is contemplated to review company''s approach and to optimize financial cost.

However, the current year''s performance has brought positivity and good opportunity to improve the performance as the rice prices have picked up smartly in domestic and overseas markets. New storage capacity has been created by the company that will help it to reduce the cost of godown rentals substantially.

Expansion & Modernization

The Company is primarily engaged in the transportation, handling and storage of food grains. In the process, the prime motive is to preserve and store the food grains. Warehousing infrastructure & packaging plays key role in process efficiency and profitability as also earn tax benefits under the tax laws. In consonance with growth, your company has taken preemptive steps to augment warehousing capacity to the tune of 1 million sq.feet within factory premises. Hence, cumulative covered warehousing capacity exceeded 1.50 million sq.feet in addition to 1 million sq.feet of open storage.

During the year, a new Automated Packaging Unit line was also installed to enhance capacity & quality of packaging.

Transfer to Reserves

The company has transferred Rs. 2.69 millions in the General Reserve during the year under review in pursuance to the provisions of Companies (Transfer of Profits to Reserves) Rules, 1975.

Dividend

Having due regard to the profit of the year, Board of directors have recommended a dividend of Rs. 0.20 per share (10%) for the year ended 30th September, 2012.

EQUITY SHARE CAPITAL

During the year under review, the company has not issued any equity share. The Authorised Capital of the company is Rs.20,00,00,000 and paid up capital is Rs.12,63,80,000.

TRANSFERTO INVESTOR EDUCATION & PROTECTION FUND

In terms of Section 205A (5) and 205C of the Companies Act, 1956, the Company has deposited Rs.3,98,369/- (on 13/03/2012) being un-claimed 2nd interim dividend for the year 2004-05 and Rs.3,69,053/- (on 26/11/2012) being un- claimed interim dividend for the year 2005-06 in the "Investor Education and Protection Fund" established by the Central Government.

Hereunder are the details of Dividends paid by the Company and their respective due dates of transfer of unpaid or unclaimed dividends to the designated fund to the Central Government:

Dividend for the year Date of Declaration of Due date for transfer to Dividend Investor Education and Protection Fund

2005-06 (Final Dividend) 22/09/2006 28/10/2013

2006-07 (Interim Dividend) 15/02/2007 24/02/2014

2007-08 (Final Dividend) 27/03/2009 02/05/2016

2008-09 (Final Dividend) 27/03/2010 02/05/2017

2009-10 (Final Dividend) 26/03/2011 01/05/2018

2010-11 (Final Dividend) 28/03/2012 03/05/2019

Material Changes and commitments

Save as mentioned elsewhere in this Report, no material changes and commitments affecting the financial position of the company have occurred between the end of the financial year of the company - 30th September, 2012 and the date of this Report.

Management Discussions and Analysis Report

Management Discussions and Analysis Report as required under Clause 49 of the Listing Agreement is given as a separate statement in the Annual Report and forms part of this Report.

Public Deposits

During the year under review, your company did not accept any deposits from the public in terms of the provisions of Section 58A of the Companies Act, 1956.

Conservation of Energy,Technology Absorption, Foreign Exchange Earnings and Outgo.

a. Conservation of Energy &Technology Absorption:

I & ii Energy Conservation Measures taken and Additional Investments / Proposals, if any, being implemented for reduction of consumption of energy:

In pursuit of continual improvement towards energy conservation and compliance with environmental regulations, many initiatives have been underway. Such as:

a. The maintenance of the Boiler and Turbine generator is carried out regularly with optimum care with the help of the technical professionals and modern equipments.

b. Most of the traditional lights are being converted into CFL/EFL.

c. Installation of variable frequency drives on high pressure boiler deed water pumps, ID fans and fuel feeders.

d. Installation of soft starter at grading point.

e. AC drive on cooling fans.

f. Capacitator for enhancing power factor.

g. Interlocking of motor operation to reduce the idle running hours of the motor.

h. Schedule cleaning of condenser in power plant and heat exchanger of various plants is being carried out to increase the heat transfer.

I. An O2 analyzer is used for monitoring and controlling flue gas of the boiler.

j. Scale Ban Equipment (non-chemical treatment equipment) is installed at Power Plant Condenser inlet to reduce chemical consumption in cooling tower and reduce water blow down.

k. Use of ETP treated water for horticulture.

l. Using fuel additives in boiler to increase the combustion efficiency.

m. Use of condensate steam/water in boiler for power generation.

n. New compressor with latest technology is installed to reduce power consumption at low load mode.

o. Compressor air pipe lines are changed with Aluminum pipes to maintain the quality of air entering Sortex machines.

p. Captive husk based co-generation of power, reducing consumption from main grid utilization.

q. Usage of other biomass fuel like rice/paddy straw, wheat straw to reduce the consumption of rice husk.

iii Impact of i & ii above for reduction of energy consumption

The above energy conservation measures would result in reduction in energy consumption and effectively saving in drawal of power from the State Grid upto 5 to 10%.

iv. Total Energy consumption and Energy consumption per unit of production as per Form ''A''

The additional information as required under the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 are given as Annexure-I to this report and forms part of it.

b. Technology Absorption: The Company is taking care of latest developments and advancements in technology and all steps are being taken to adopt the same. The process equipments installed in the plant are from world class manufactures with latest technology like Satake-Japan, Schmidt Seager- Germany, Shin Nippon Machinery Co. Ltd., Japan, Toyu Denki Power Systems, Thermax, Sullair-US, ABB, Schneider, AREVA, Forbes Marshal etc. The Company''s technical team is in process of exploring the opportunity & updating new technology for sophisticated equipments with latest technology. However, the company is yet to carry out R&D on product genes cultivation which could be predominantly back end process.

c. Foreign Exchange Earnings and Outgo:

i) Export Activities/Initiatives to Increase Exports/Development of New Export Markets / Export Plans

EXPORT INITIATIVES 2011-12

During the year under review, your company focused on the export of PUSA basmati 1121 rice and exported the goods amounting to Rs.1320.99 million to gulf countries, Africa and USA. Your company is very active in exploring the new markets.

EXPORT PLAN FOR 2012-13

Focus on existing international market for business growth

Explore the possibility of export to other international markets.

Opening of new overseas offices to improve customer touch points.

During the year under review, the earning on account of foreign exchange (export sale) was Rs. 1320.99 million (Previous year Rs. 3470.09 million), and the outgo in foreign exchange was Rs. 132.51 million (Previous year - Rs. 58.05 million).

Particulars of Employees

Details and information of employees of the company who were in receipt of remuneration as prescribed under section 2l7(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 is given in the Annexure-II to this Report.

Directors

During the year under report, Maj.Gen.A.L.Suri and Mr. Harwant Singh resigned from the directorship of the company.The Directors place on record their appreciation of the valuable services rendered and guidance received from them during their tenure as members of the board.

Mr.Vilas P. Unavane was appointed as an Additional Director in the category of Non-Executive and Independent Director with effect from IstAugust, 20I2.The Directors extend their warm welcome to the new member on the Board and wish him a successful and fruitful tenure with the company.

At the ensuing annual general meeting, Mr. I.S.Gumber, Mr.V.K.Mishra and Mr. Kanwaljit Singh Jolly will retire by rotation and being eligible, offer themselves for re-appointment. Your directors recommend their re-appointment at the ensuing annual general meeting.

Human Resource Development

During the year under review, your company''s commitment to building harmonious employee relations was evident from the successful and smooth running of its operations at its works.The collaborative spirit of partnership across all sections of employees and their sense of ownership and commitment has sustained the culture of excellence, learning and readiness to change. The collective dedication of the employees is helping your company in delivering superior customer and shareholder value.Your company salutes the unflinching commitment of its dedicated team of employees. Industrial relation have been cordial.

Corporate Governance

The company has complied with the Corporate Governance requirements, as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges.A separate section on Corporate Governance alongwith a certificate from the Auditors of the company confirming the compliance is annexed and forms part of this Report.

Subsidiary Companies

Punjab Greenfield Resources Limited (PGRL) a wholly owned subsidiary company presently acts as a sales and marketing arm of LEAF and has been engaged in buying the finished rice varieties from LEAF, warehousing them and distributing them in various parts of the country using its network of brokers, dealers and distributors.

M/s Lakshmi Green Power Limited (LGPL) and M/s Green Energy and Foods Pte. Ltd, Singapore (GEFPL) are subsidiary companies incorporated in 2010. On being operational, these companies shall significantly contribute to generate power, improve logistics and mobilize additional exports.

A statement pursuant to section 212 of the Companies Act, 1956, relating to subsidiary companies is attached to the accounts. In terms of the approval granted by the Central Government vide letter No. 47/7I8/20I0-CL-III dated December 28, 20I0 under Section 2I2(8) of the Companies Act, I956, the audited accounts and Reports of Board of Directors and Auditors of the Company''s subsidiaries have not been annexed to this Annual Report. The Company will make available the Annual Accounts of the subsidiaries to any of the member of the Company who may be interested in obtaining the same.The annual accounts of the subsidiaries will also be kept open for inspection at the Registered Office of the Company.

Consolidated financial statements

Further pursuant to Accounting Standard -2I (AS- 2I) issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented in this Annual Report include financial information of the subsidiary companies i.e PGRL, LGPL and GEFPL.

Auditors

M/s. S. Kumar Gupta & Associates, Chartered Accountants, Statutory Auditors of the company hold office until the conclusion of the ensuing annual general meeting and are recommended for re-appointment to audit the accounts of the company for the financial year 2012-13. As required under the provisions of Section 224(1B) of the Companies Act, 1956, the company has obtained a certificate from M/s. S. Kumar Gupta & Associates, Chartered Accountants to the effect that their proposed re-appointment, if made, would be in accordance and conformity with the limits as specified in that section.

Further, the Auditors have represented that they hold a valid Peer Review Certificate issued by the ''Peer Review Board'' of ICAI.

Auditors'' Report

The observations made by the Statutory Auditors in the Auditors'' Report are self-explanatory and do not require any further clarification.

Cost Auditors

During the year under review, Cost Audit Branch, Ministry of Corporate Affairs (MCA) issued a notification no. 52/26/CAB-2010 dt. 02.05.2011 wherein it has been directed to conduct cost audit of the cost records in respect of Electricity Generated and to maintain cost records under Cost Accounting Records (Electricity Industry) Rules 2011, from the F/Y 2011-12.

Accordingly, the Board in its meeting held on 14-11-2011 had appointed M/s Anil Sharma & Co., Cost Accountants, Chandigarh as Cost Auditors of the Company for the financial year ending 30th September, 2012 and the necessary approval in regard to their appointment has been granted by the Ministry of Corporate Affairs (MCA) vide its communication dated January 10, 2012. The Cost Auditors'' Report for 2011-12 will be forwarded to the Central Government/MCA in pursuance of the provisions of the CompaniesAct, 1956.

Internal Control Systems and theirAdequacy

Entire Supply Chain Management of your company''s product is classic example of Batch mode cum Sequential processing. Hence, its important to integrate pilferage and process control at vital stages.This also includes Accounting, Inventory and Fund Management. Your company believes that internal control is a necessary concomitant of the principle of governance that freedom of management should be exercised within a framework of appropriate checks and balances.Your company remains committed to ensuring an effective internal control environment that provides assurances on the efficiency of the operations and security of the assets.

Adequate steps have been taken such as:

a. Reviewing ERP System with emphasis on real time accounting.

b. Robust Internal Audit with mandate of Reporting process/functional gaps, if any, and suggesting rectification thereof.

c. Improved MIS/DeviationAnalysis reporting.

d. Automated system based cross checks.

Directors'' Responsibility Statement

In terms of the provisions of section 217(2AA) of the Companies Act, 1956, and to the best of their knowledge and belief and according to the information and explanations obtained by them and save as mentioned elsewhere in this Report, the attached Annual Accounts and the Auditors'' Report thereon, your directors confirm that:

a. in preparation of the annual accounts, the applicable accounting standards have been followed;

b. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 30th September, 2012 and of the profit of the company for the year ended on that date;

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

d. the directors have prepared the Annual Accounts on a going concern basis.

Corporate Social Responsibility (CSR)

Your company is taking active part in promoting education to children from needy and poor families. Necessary funds have been allocated and disbursed towards the same. This is in addition to 110 houses allotted to people below poverty line in Punjab in association with Government of Punjab who has provided the land free of cost during previous year.

Stock Exchange Listing

The securities of the company are presently listed on the following Stock Exchanges:

1. National Stock Exchange of India Limited

2. Bombay Stock Exchange Limited

3. Ludhiana Stock Exchange Limited

4. Delhi Stock Exchange Limited

The company has duly paid the listing fees for the financial year 2012-13 to all the Stock Exchanges wherein the equity shares of the company are presently listed.

Acknowledgement

Your company''s board and employees are inspired by their vision of sustaining LEAF''s position as one of India''s most significant company in the food segment through world class performance creating enduring value for all shareholders and the Indian society.

Your directors wish to convey their sincere appreciation for the co-operation and excellent assistance the company has received from Banks, central/state government(s) and various ministries, departments of the central/state government(s), dealers and valued business associates without which it would not have been possible to achieve all round progress and growth of the company. The Board also places on record its appreciation to shareholders for their continued trust and support and also for the devoted services of all the employees of the company for their outstanding contribution to the operations during the year under review. The Board also places on record its appreciation for the continuous patronage of the customers of the company.

For and on Behalf of the Board

Sd/-

Place: Chandigarh Balbir Singh Uppal

Date: 14.02.2013 Chairman and Managing Director


Sep 30, 2010

The directors have the pleasure in presenting and submitting the 20th Annual Report of your company together with the Audited Annual Accounts for the financial year ended September 30,2010.

Financial Highlights

Particulars For the year ended

30th September 2010 30th September 2009 (Rs. million) (Rs. million)

Sales 11676.61 6914.40

Other Income 24.84 9.77

Total Income 11701.45 6924.17

Profit before Interest, Depreciation and Tax 2059.00 2182.51

Financial Expenses 734.11 681.67

Depreciation 367.00 347.09

Profit before tax 957.89 1153.75

Provision for tax

- Income tax 195.35 196.00

- Fringe benefit tax - 0.45

Deferred Tax Assets/(Liabilities) 68.77 (41.70)

Profit after tax 831.31 915.60

Add: Excess Provisions of tax in earlier years 214.38 -

Add: MAT Credit entitlement 346.66 -

Less: Previous years adjustments - 0.14

Add: Balance of Profit brought forward 3346.78 2561.27

Profit available for appropriation 4739.13 3476.73

Appropriations

Dividend tax paid of earlier years - 1.42

Provision for dividend (inc.of tax) 14.79 36.97

Transfer to General Reserve 20.78 91.56

Balance carried to Balance Sheet 4703.56 3346.78

The Audited statement of accounts for the year ended September 30,2010 is attached along with the Report.

Business Performance

During the year under review, Sales of the company was Rs. 11676.61 million as against Rs. 6914.40 million in the previous year. The company was able to earn a profit before tax of Rs. 957.89 million during the current financial year as against a profit before tax of Rs. 1153.75 million in the previous year. There was increase of 68.87% in the sales but PBT has gone down by 16.98%. Profit after tax was Rs. 831.31 million as compared to Rs. 915.60 million in the previous year, registering a decline of 9.20%.

While continuing to expand the export market for PUSA 1121 Basmati rice initiated by us last year, in view of dcline in procurement of rice by FCI on account of storage and quality in state of Punjab, we have changed our business strategy during the year. The company has shifted its focus to sale of PUSA 1121 Basmati rice in the Exports and Domestic market. The PUSA 1121 Basmati rice has been very well accepted in the Middle East countries which are major buyer of Indian Rice. Company has launched its branded packaged PUSA 1121 Basmati rice under Lakshmi Foods. PerceptH (Indias largest entertainment, media and communication group) is assiting us in Brand building, design and packaging etc for launching Lakshmi Foods brand Basmati Rice in domestic market. Deloitte Touche Tohmatsu India Private Limited is also advising the company in retail strategy.

Expansion and Diversification

Your company continued to pursue the policy of strengthening its presence in its strategic markets by judicious timely expansion and diversification of its business operations.

Paddy/Rice processing

After commissioning a 20 MT/hr capacity state of the act Rice processing Plant (alongwith Sortex, Graders & Polishers) last year, we have added the balancing equipment/facilities in terms of RO Plant, efficient boilers and packaging units during the year to cater to the requirement of manufacturing Premium Quality Branded Rice for the domestic and export market. Your company started erecting two Par-boiling Plants of 400 MT/day capacity each. One Plant has been commissioned and other is nearing completion.

In view of the covered storage capacity required for paddy and finished Basmati Rice, your company has embarked upon expanding its modern warehousing capacity by one lac Sq. Yards on 20 Acres land (approx.) within the factory premises to support companys PUSA 1121 Basmati Rice export and domestic branded rice operations which shall also reduce the storage cost in future. These warehouses are adjacent to the Chandigarh-Ludhiana railway line being laid by the Government and this proximity will be helpful to the company for transporting raw material/finished goods through railways.

The company has started revamping entire infrastructure to make it more modern, functional and efficient. Besides converting old plinth area meant for open storage into covered warehouses, company has incurred Capex towards purchase of land, modernization of old STAKE Paddy Milling Plants, by adding more Optical Sortex Machines, Graders and storage/Silos within the milling units, fully automatic packaging system to cater to the branded domestic export markets. The company has also started erecting new power saving instruments and other civil works for the modern entrance with weigh bridges and staff quarters.

Your company has set up a Wholly Owned Subsidiary (WOS) Green Energy and Foods Pte. Ltd., Singapore to expand its export market to the South-East Asian countries. The WOS would also facilitate the parent company for its import requirements infuture, if any.

Transfer to Reserves

The company has transferred Rs 20.78 million in the General Reserve during the financial year under review in pursuance to the provisions of Companies (Transfer of Profits to Reserves) Rules, 1975.

Dividend

Your directors now recommend a final dividend of Rs0.20/-pershare(10%)fortheyearended September 30,th,2010.

Material Changes and commitments

Save as mentioned elsewhere in this Report, no material changes and commitments affecting the financial position of the company have occurred between the end of the financial year of the company- September 30th, 2010 and the date of this Report.

Management Discussions and Analysis Report

Management Discussions and Analysis Report as required under Clause 49 of the Listing Agreement is given as a separate statement in the Annual Report and forms part of this Report.

Public Deposits

During the year under Report, your company did not accept any deposits from the public in terms of the provisions of Section 58A of the Companies Act, 1956.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo.

a. Conservation of Energy &Technology Absorption:

i. Energy Conservation Measures taken: In pursuit of continual improvement towards energy conservation and compliance with environmental regulations many initiatives have been taken and implemented in the year under review. The company is aware about energy consumption and environmental issues related with it and is, therefore, continuously making sincere efforts towards conservation of energy. The maintenance of the Boiler and Electrical Equipments is carried out regularly with optimum care with the help of the technical professionals and modern equipments. New equipments such as pumps are being purchased considering efficient performance to conserve energy. Most of the traditional lights are being replaced with CFL.

The company is, in fact, engaged in the continuous process of further energy conservation through improved operational and maintenance practices.

ii. Additional Investments I Proposals, if any, being implemented for reduction of consumption of energy: During the year, the company has made substantial progress in installing the state of the art equipments which are highly efficient and consume less energy for the same productivity.

With the present resources, the company had taken overall measures to reduce the consumption of energy. This was rendered possible through proper maintenance, on regular intervals, of Plant & Machinery and other electrical installed in the manufacturing / processing unit of the company as well as replacing low energy consuming electrical items in place of old ones.

iii. Impact of, & ii above for reduction of energy consumption: The above energy conservation measures would result in reduction in energy consumption and effectively saving" in withdrawal of power from the State Grid. With the commissioning of husk based power plant, the company has captive power and has become a net exporter of energy.

iv. Total Energy consumption and Energy consumption per unit of production as per Form A: The additional information as required under the provisions of Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 are given as Annexure-I to this report and forms part of it.

b. Technology Absorption: The Company is taking care of latest developments and advancements in technology and all steps are being taken to adopt the same. The company is using latest technology which is well established the world over. The company has installed / is installing new equipments with latest technology for the purpose of rice processing. However, the company has not carried any R&D and has not incurred any expenditure during the year on this account as the same was not needed and not possible in-house for improvement of the process.

c. Foreign Exchange Earnings and Outgo:

i) Export Activities / Initiatives to Increase Exports / Development of New Export Markets / Export Plans EXPORT INTIATIVES 2009-10

During the year under review, your company focused on the export of PUSA basmati 1121 rice and exported amounting to Rs. 2103.60 million of rice into gulf countries and USA. Your company is also considering the proposal for development of new markets.

Star Export House

Your company has been issued a Certificate of Recognition as Star Export House by Ministry of Commerce and Industry in accordance with the provisions of the Foreign Trade Policy, 2009-2014.

EXPORT PLAN FOR 2010-11

- Concentrate on existing Middle-East market for business growth Explore the possibility of export to other international markets also.

During the year under review, the earning on account of foreign exchange (export sale) was Rs. 1326.69 million (Previous year Rs. 949.75 million) and the outgo in foreign exchange on account of spare parts, capital goods and traveling was Rs. 13.17 million (Previous year - Rs. 111.88 million).

Particulars of Employees

Details and information of employees of the company who were in receipt of remuneration as prescribed under section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 is given in the Annexure-ll to this Report.

Directors

During the year under report, Mr. Sanjeev Sood resigned from the directorship of the company. The Directors place on record their appreciation of the valuable services rendered and guidance received from Mr.Sanjeev Sood during his tenure as member of board.

Mr. Kanwal Jit Singh Jolly and Mr. V.K.Mishra were appointed as an Additional Directors in the category of Non- Executive and Independent Directors with effect from 29th April 2010. The Directors extend their warm welcome to the new members on the Board and wish them a successful and fruitful tenure with the company.

At the ensuing annual general meeting, Mr. I.S.Gumber, Ms. Vijay Luxmi and Mr. Amarjit Singh will retire by rotation and being eligible, offer themselves for re-appointment. Your directors recommend their re-appointment at the ensuing annual general meeting.

Human Resource Development

During the year under review, your companys commitment to building harmonious employee relations was evident from the successful and smoothful running of its operations at its works. The collaborative spirit of partnership across all sections of employees and their sense of ownership and commitment has sustained the culture of excellence, learning and readiness to change. The collective dedication of the employees of the company is helping your company in delivering superior customer and shareholder value. Your company salutes the unflinching commitment of its dedicated team of employees.

Corporate Governance

The company has complied with the Corporate Governance requirements, as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges. A separate section on Corporate Governance alongwith a certificate from the Auditors of the company confirming the compliance is annexed and forms part of this Report.

Subsidiary Companies Accounts

Punjab Greenfield Resources Limited (PGRL) a wholly owned subsidiary undertook only limited work during the year under review. The company has been selling the non-branded rice and now, it envisages entering the retail market of branded basmati rice besides other agri/food products.

During the year, M/s Lakshmi Green Power Limited, Chandigarh (LGPL) and M/s Green Energy and Foods Pte.Ltd, Singapore (GEFPL) have been incorporated as subsidiaries.

A statement under Section 212 of the Companies Act, 1956, relating to subsidiary companies is enclosed with this Report.

Further pursuant to Accounting Standard -21 (AS- 21) issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the company includes financial information of PGRL but do not include figures in respect of LGPLandGEFPLas they are yet to start their operations.

Auditors

M/s. S. Kumar Gupta & Associates, Chartered Accountants, Statutory Auditors of the company hold office until the conclusion of the ensuing annual general meeting and are recommended for re-appointment to audit the accounts of the company for the financial year 2010-11. As required under the provisions of Section 224(1B)ofthe Companies Act, 1956, the company has obtained a certificate from M/s. S. Kumar Gupta & Associates, Chartered Accountants to the effect that their proposed re-appointment, if made, would be in accordance and conformity with the limits as specified in that section.

AuditorsReport

The observations made by the Statutory Auditors in the Auditors Report are self-explanatory and do not require any further clarification.

Internal Control Systems and their Adequacy

Your company believes that internal control is a necessary concomitant of the principle of governance that freedom of management should be exercised within a framework of appropriate checks and balances. Your company remains committed to ensuring an effective internal control environment that provides assurances on the efficiency of the operations and security of the assets.

Group for inter-se transfer of shares

As required under Clause 3 (1) (e) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, persons constituting Group (within the meaning as defined in the Monopolies and Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulation 10 to 12 of aforesaid SEBI Regulations, are given herein below:

i M/s. Punjab Greenfield Resources Limited

ii M/s. LOIL Health Foods Limited

iii M/s. LOIL Continental Foods Limited

iv M/s. LOIL Overseas Foods Limited

v M/s. Ganeshay Overseas Industries Limited

vi M/s. Victor Foods India Limited

viiMr.BalbirSinghUppal

viii Mr. Janak Raj Singh

ix Mrs.Vijay Luxmi

Directors Responsibility Statement

In terms of the provisions of section 217(2AA) of the Companies Act, 1956, and to the best of their knowledge and belief and according to the information and explanations obtained by them and save as mentioned elsewhere in this Report, the attached Annual Accounts and the Auditors Report thereon, your directors confirm that:

a. in preparation of the annual accounts, the applicable accounting standards have been followed;

b. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 30th September, 2010 and of the profit of the company for the year ended on that date;

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

d. the directors have prepared the Annual Accounts on a going concern basis.

Corporate Social Responsibility (CSR)

In association with Government of Punjab who has provided the land free of cost, the company is constructing 110 houses in Punjab for people below poverty line at the cost of Rs.3 crores (apprx). Each house has two rooms, kitchenette and a bathroom. Nearly 72 houses have been built with proper landscaping for providing good living conditions.

Stock Exchange Listing

The securities of the company are presently listed on the following Stock Exchanges:

1. National Stock Exchange of India Limited

2. Bombay Stock Exchange Limited

3. Ludhiana Stock Exchange Limited

4. Delhi Stock Exchange Limited

The company has duly paid the listing fees for the financial year 2010-11 to all the Stock Exchanges wherein the equity shares of the company are presently listed.

Consolidated Financial Statement

In accordance with Accounting Standard AS-21 on Consolidated Financial Statements, LEAF Group accounts form part of this Report & Accounts. These Group accounts also incorporate the Accounting Standard AS-23 on Accounting for Investments in Associates in Consolidated Financial Statements issued by the Institute of Chartered Accountants of India. These Group accounts have been prepared on the basis of audited financial statements received from the subsidiary company viz. PGRL, as approved by its Board.

Other information

The Certificate of the Auditors of the company viz. M/s. S. Kumar Gupta & Associates, Chartered Accountants, Statutory Auditors of the company confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges in India, is annexed.

Acknowledgement

Your directors wish to convey their sincere appreciation for the co-operation and excellent assistance the company has received from Banks, central / state government(s) and various ministries, departments of the central / state government(s), dealers and valued business associates without which it would not have been possible to achieve all round progress and growth of the company. The Board also places on record its appreciation to shareholders for their continued trust and support and also for the devoted services of all the employees of the company for their outstanding contribution to the operations during the year under review. The Board also places on record its appreciation for the continuous patronage of the customers of the company.

For and on Behalf of the Board

Sd/-

Balbir Singh Uppal

Chairman and Managing Director

Place: Chandigarh Date : 14-02-2011


Sep 30, 2009

The directors have the pleasure in presenting and submitting the 19th Annual Report of your company together with the Audited Annual Accounts for the financial year ended September , 2009.

Financial Highlights of the Company

Particulars For the year ended

30th September 2009 30th September 2008 (12 months) (18 months)

Sales 6914.40 15401.93

Other Income 9.77 28.22

Total Income 6924.17 15430.14

Profit before Interest, Depreciation and Tax 2182.51 3222.56

Financial Expenses 681.67 487.97

Depreciation 347.09 335.02

Profit before tax 1153.75 2399.57

Provision for tax

- Income tax 196.00 271.87

- Fringe benefit tax 0.45 1.93

Deferred Tax Liabilities 41.70 527.99

Profit after tax 915.60 1597.79

Add: Excess Provisions of tax in earlier years 0.28

Less: Previous year adjustments 0.14 0

Add: Balance of profit brought forward 2561.27 1158.53

Profit available for appropriation 3476.73 2756.59

Appropriations

Dividend Tax Paid 1.42 0.00

Provision for Dividend (inclusive of tax) 36.97 35.54

Transfer to General Reserve 91.56 159.78

Balance carried to Balance Sheet 3346.78 2561.27

The Audited statement of accounts for the year ended September 30, 2009 is attached along with the Report.

Business Performance

During the year under review, Sales of the company was Rs. 6914.40 million as against Rs. 15401.93 million in the previous period of 18 months. The company was able to earn a profit before tax of Rs1153 75 million during the current financial year as against a profit before tax of Rs 2399.57 million in the previous period of 18 months. There was decline of 32.66% and 27.88% in turnover and profitability respectively on annualized basis. Profit after tax was Rs.915.60 million as compared to Rs. 1597.79 million in the previous period of 18 months, registering a decline of 14.04% on annualized basis. However, Net Profit margin increased to 13.24% as compared to 10.37% of last year. The decline in sales (in absolute terms) is due to less procurement of rice by FCI due to issues relating to storage and quality in the State of Punjab. Despite lower sales, the profit margins improved due to sale of power at good rates and export market for basmati rice tapped by the company.

Expansion & Diversification

Your company continued to pursue the policy of strengthening its presence in its strategic markets by judicious expansion of its business operations.

Paddy/Rice processing

During the year, a state of the art rice processing plant (alongwith Sortex, Graders and Polishers) with capacity of 20 MT/hour was erected. The old plant capacity is being phased out by replacing the same with modern and efficient milling plants being sourced with Sortex and Polishers from Satake, Japan and Graders from Schmidt Seeger, Germany. The balancing equipment/facilities in terms of RO Plant, efficient boilers, steaming & par boiling units and packaging units will also be added to increase our capacity to manufacture premium rice for domestic and export market.

Power project

During the year, second phase of 15 MW biomass based power plant came into production making the total capacity of 30 MW.

The company will expand further in renewable energy by way of setting up upto five biomass based Power Plants at different locations in Punjab integrated with smaller paddy processing mills of 2 lac MT each.

Transfer to Reserves

The company has transferred Rs. 91.56 million in the General Reserve during the financial year under review in pursuance to the provisions of Companies (Transfer of Profits to Reserves) Rules, 1975.

Dividend

Your directors now recommend a final dividend of Rs. 0.50/- per share for the year ended September 30th, 2009.

Material Changes and Commitments

Save as mentioned elsewhere in this Report, no material changes and commitments affecting the financial position of the company have occurred between the end of the financial year of the company September 30th, 2009 and the date of this Report.

Management Discussions and Analysis Report

Management Discussions and Analysis Report as required under Clause 49 of the Listing Agreement is given as a separate statement in the Annual Report and forms part of this Report.

Public Deposits

During the year under Report, your company did not accept any deposits from the public in terms of the provisions of Section 58A of the Companies Act, 1956.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo.

a. Conservation of Energy & Technology Absorption:

i. Energy Conservation Measures taken:

In pursuit of continual improvement towards energy conservation and compliance with environmental regulations, many initiatives have been taken and implemented in the year under review. The company is aware about energy consumption and environmental issues related with it and is, therefore, continuously making sincere efforts towards conservation of energy. The maintenance of the Boiler and Electrical Equipments is carried out regularly with optimum care with the help of the technical professionals and modern equipments.

The company is in fact engaged in the continuous process of further energy conservation through improved operational and maintenance practices.

ii. Additional Investments / Proposals, if any, being implemented for reduction of consumption of energy During the year, the company has made substantial progress in installing the state of the art equipments which are highly efficient and consume less energy for the same productivity. It has also commissioned a second phase of husk based power plant of 15 MW making a total capacity of 30MW.

With the present resources, the company had taken overall measures to reduce the consumption of energy. This was rendered possible through proper maintenance, on regular intervals, of Plant & Machinery and other electrical installed in the manufacturing / processing unit of the company as well as replacing low energy consuming electrical items in place of old ones.

iii. Impact of i & ii above for reduction of energy consumption

The above energy conservation measures would result in reduction in energy consumption and effectively saving in withdrawal of power from the State Grid. With the commissioning of husk based power plant, the company has captive power and has become a net exporter of energy.

iv. Total Energy consumption and Energy consumption per unit of production as per Form A

The additional information as required under the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 are given as Annexure-I to this report and forms part of it.

b. Technology Absorption: The Company is taking care of latest developments and advancements in technology and all steps are being taken to adopt the same. The company is using latest technology which is well established the world over. The company has installed / is installing new equipments with latest technology for the purpose of rice processing. However, the company has not carried any R&D and has not incurred any expenditure during the year on this account as the same was not needed and not possible in-house for improvement of the process.

c. Foreign Exchange Earnings and Outgo:

Export Activities / Initiatives to Increase Exports / Development of New Export Markets / Export Plans

EXPORT INITIATIVES 2008-09

During the year under review, your company focused on the export of basmati rice and exported amounting to Rs. 1512.81 million of rice into gulf countries. Your company is also considering the proposal for development of new markets. The earning on account of foreign exchange was Rs.949.75 million (Previous year Rs. 226.66 million) and the outgo in foreign exchange on account of spare parts, capital goods and travelling was Rs. 111.88 million (Previous year Rs.215.14 million).

EXPORT PLAN FOR 2009-10

- Concentrate on existing international market for business growth.

- Explore the possibility of export to other international markets also.

Particulars of Employees

Details and information of employees of the company who were in receipt of remuneration as prescribed under section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 is given in the Annexure-II to this Report.

Directors

During the year under report, Mr. Varinder Kumar resigned from the directorship of the company.The Directors place on record their appreciation of the valuable services rendered and guidance received from Mr.Varinder Kumar during his tenure as member of board.

At the ensuing annual general meeting, Mr. A.L.Suri, Mr.Nirdosh Bali and Mr.Rajendra Sharma will retire by rotation and being eligible, offer themselves for re-appointment.

Mr. Janak Raj Singh who is presently acting as Executive Director of the company is being appointed as joint Managing Director. Mr. I.S. Gumber is being re-appointed as Executive Director of the company w.e.f 01 03.2010. Mr. Harwant Singh is being appointed as Executive Director of the company and Mr. Anil Sarin is being appointed as Independent Director at the ensuing annual general meeting.

Human Resource Development

During the year under review, your companys commitment to building harmonious employee relations was evident from the successful and smoothful running of its operations at its works. The collaborative spirit of partnership across all sections of employees and their sense of ownership and commitment has sustained the culture of excellence, learning and readiness to change. The collective dedication of the employees of the company is helping your company in delivering superior customer and shareholder value. Your company salutes the unflinching commitment of its dedicated team of employees. The company has retained M/s Deloitte Touche Tohmatsu India Pvt. Ltd. for inter alia drafting and recommending HR policies based on the best market practices that the company gets quality staff from the market and is able to retain the same for future growth.

Sustainability

Your company believes in long term sustainability initiatives in the interest of its various stakeholders. Your companys strategies to become carbon positive have yielded rewards and in future will result in significant saving in the energy costs.

Corporate Governance

The company has complied with the Corporate Governance requirements, as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges. A separate section on Corporate Governance alongwith a certificate from the Auditors of the company confirming the compliance is annexed and forms part of this Report.

Subsidiary Companies Accounts

Punjab Greenfield Resources Limited (PGRL) a wholly owned subsidiary undertook only limited work during the year under review.

A statement under Section 212 of the Companies Act, 1956, relating to PGRL is enclosed with this Report.

Further pursuant to Accounting Standard -21 (AS- 21) issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the company includes financial information of PGRL, a subsidiary of the company.

Auditors

M/s. S. Kumar Gupta & Associates, Chartered Accountants, Statutory Auditors of the company hold office until the conclusion of the ensuing annual general meeting and are recommended for re-appointment to audit the accounts of the company for the financial year 2009-10. As required under the provisions of Section 224(1B) of the Companies Act, 1956, the company has obtained a certificate from M/s. S. Kumar Gupta & Associates, Chartered Accountants to the effect that their proposed re- appointment, if made, would be in accordance and conformity with the limits as specified in that section.

Auditors Report

The observations made by the Statutory Auditors in the Auditors Report are self-explanatory and do not require any further clarification.

Internal Control Systems and their Adequacy

Your company believes that internal control is a necessary concomitant of the principle of governance that freedom of management should be exercised within a framework of appropriate checks and balances. Your company remains committed to ensuring an effective internal control environment that provides assurances on the efficiency of the operations and security of the assets.

Group for inter-se transfer of shares

As required under Clause 3 (1) (e) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, persons constituting Group (within the meaning as defined in the Monopolies and Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulation 10 to 12 of aforesaid SEBI Regulations, are given in the table along side.

S. NO. NAME

i. M/s. Punjab Greenfield Resources Limited

ii. M/s. LOIL Health Foods Limited

iii. M/s. LOIL Continental Foods Limited

iv. M/s. LOIL Overseas Foods Limited

v. M/s. Ganeshay Overseas Industries Limited

vi. M/s. Victor Foods India Limited

vii. Mr. Balbir Singh Uppal

viii. Mr. Janak Raj Singh

ix. Mrs. Vijay Luxmi

Directors Responsibility Statement

In terms of the provisions of section 217(2AA) of the Companies Act, 1956, and to the best of their knowledge and belief and according to the information and explanations obtained by them and save as mentioned elsewhere in this Report, the attached Annual Accounts and the Auditors Report thereon, your directors confirm that:

a. in preparation of the annual accounts, the applicable accounting standards have been followed;

b. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 30th September, 2009 and of the profit of the company for the year ended on that date;

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

d. the directors have prepared the Annual Accounts on a going concern basis.

Stock Exchange Listing

The securities of the company are presently listed on the following Stock Exchanges:

1. National Stock Exchange of India Limited;

2. Bombay Stock Exchange Limited;

3. Ludhiana Stock Exchange Association Limited; and,

4. Delhi Stock Exchange Association Limited

The company has duly paid the listing fees for the financial year 2009-10 to all the Stock Exchanges wherein the equity shares of the company are presently listed.

Consolidated Financial Statement

In accordance with Accounting Standard AS-21 on Consolidated Financial Statements, LEAF Group accounts form part of this Report & Accounts. These Group accounts also incorporate the Accounting Standard AS-23 on Accounting for Investments in Associates in Consolidated Financial Statements issued by the Institute of Chartered Accountants of India. These Group accounts have been prepared on the basis of audited financial statements received from the subsidiary company viz. PGRL, as approved by its Board.

Other information

The Certificate of the Auditors of the company viz. M/s. S. Kumar Gupta & Associates, Chartered Accountants, Statutory Auditors of the company confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges in India, is annexed.

Acknowledgment

Your companys board and employees are inspired by their vision of sustaining LEAFs position as one of Indias most valuable company in the food segment through world class performance creating enduring value for all shareholders, including the shareholders and the Indian society.

The vision of enlarging your companys contribution to the Indian economy is manifest in the creation of unique business models that foster competitiveness of not only its business but also the entire value chain of which it is a part. Inspired by this Vision, driven by Values and powered by internal Vitality, your directors look forward to the future with confidence.

Your directors wish to convey their sincere appreciation for the co-operation and excellent assistance the company has received from Banks, central / state government(s) and various ministries, departments of the central / state government(s), dealers and valued business associates without which it would not have been possible to achieve all round progress and growth of the company. The Board also places on record its appreciation to shareholders for their continued trust and support and also for the devoted services of all the employees of the company for their outstanding contribution to the operations during the year under review. The Board also places on record its appreciation for the continuous patronage of the customers of the company.

For and on Behalf of the Board

Sd/- Place: Chandigarh Balbir Singh Uppal Date : 16.02.2010 Chairman and Managing Director

 
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