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Directors Report of REI Agro Ltd.

Mar 31, 2016

To the Members,

We are presenting the 22nd Board report along with the Audited Financial Results for the year ended 31st March 2016.

1. FINANCIAL AND PERFORMANCE REVIEW

Your Company''s integrated models of operations right from procurement, maturing, processing, packaging, branding and distribution, had help the Company to offer a wide range of quality products to its consumers at the very competitive Prices. Your Company is a trusted name in the organized retail and unorganized retail markets. “Raindrops” flag ship brand of the Company is one of popular and trusted brand in FMCG Sector in India. However during last few years Company has faced financial liquidity crunch and due to shortage of working capital funds , processing units of the company were running with marginal capacity and the production was suspended in majority of the plants during the year under review due to which company has incurred substantial losses.

Rs. in Lacs)

Particulars

2015-16

2014-15

Sales

52,179.67

1,85,576.61

Other Income

85.71

44.15

Total

52,265.38

1,85,620.76

Profit Before Interest and Depreciation and Amortization (PBIDTA)

(74,616.66)

(4,79,989.44)

Less: Interest

18,539.46

31,498.87

Less: Depreciation

10,496.70

10,501.39

Profit Before Tax and Exceptional items ( PBT)

(1,03,652.82)

(5,21,989.70)

Less: Exceptional items

10,020.81

2,74,40.15

Profit Before Tax ( PBT)

(1,13,673.63)

(5,49,429.85)

Less: Provision for Current Tax

-

-

Less: Prior Period Tax Payments

(6,060.12)

(-)

Profit after Tax (PAT)

(1,07,613.51)

(5,49,429.85)

During the financial year under review, turnover on standalone basis of the Company was of Rs. 52,179 lacs against turnover of Rs. 185,576 lacs in the immediate previous year. During the year under review, the Company has incurred loss of Rs. 107,613 lacs in comparison to the loss of Rs. 549,429 lacs in previous year.

MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY AND SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERTATIONS IN FUTURE.

During the year under review, The Company has faced acute shortage of working capital funds, shortage of raw material at the manufacturing units and shutdown of the production units are some of the major challenges faced by the Company due to which the Company failed to utilized its capacity of its processing units even up to a breakeven level. Several banks started actions against the company under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI ACT”). Beside these, below are the major happenings during the year under review.

CORPORATE DEBT RESTRUCTURING (CDR) SCHEME OF THE COMPANY

Various events had led the Company to face the financial difficulties and liquidity crunch in past years, which have been primarily the result of steep rise in the price of raw material coupled with reduction in sales volume, higher competition in the industry, overdue in debtor’s realization, and economic slowdown etc.

Due to financial distress, Company has defaulted in payment of its obligations in respect of Banks/Financial Institutions/NCD holders, and almost all the bank accounts of your Company were declared NPAs. A Joint lender forum comprising all lenders of the Company was formed, led by UCO Bank. Thereafter a draft Corrective Action Plan (CAP) was submitted for consideration by the lenders and as required, the same was also sent to CDR Cell. Initially it was decided by a majority of lenders that restructuring of debts of your Company be undertaken to support your Company to come out of the present financial distress in accordance with the Reserve Bank of India'' (RBI''s) Special Mention Accounts (SMA) guidelines dated 26th February, 2014.

Your Company submitted a proposal for restructuring of its debts and it adhered to all parameters laid down by the lenders to test the need and efficacy of any proposal for restructuring of debts and the Company was hopeful and confident of support of the lender Banks but it came as a surprise to the Company when the lenders unilaterally decided that the debts of the Company could not be restructured and rejected the proposal submitted by the Company

PETITION BEFORE DEBT RECOVERY TRIBUNAL BY BANKS

Your Company had availed various working capital and term loan facilities from various banks. However, due to financial liquidity crunch being faced by the company from past few years, Company has defaulted in payment of its obligations in respect of Banks/Financial Institutions/NCD holders. Therefore, to recover the loans advanced by them to the Company, UCO Bank, J and K Bank Limited and IFCI Limited has filed petition to Debt recovery Tribunal (DRT) against the Company, which are being contested by your Company.

NOTICES FROM BANKS AND FINANCIAL INSTITUTIONS UNDER PROVISIONS OF THE SECURITIZATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002 (“SARFAESI ACT”) Your Company has also received several demand and recall notices under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI ACT”) from several lending Banks calling upon your Company to forthwith pay the entire alleged principal and all accrued interest in respect of the various facilities aggregating to Rs. 5579.93 crores, failing which they would initiate steps for recovery.

Your Company also received Notices from Lenders under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI ACT”), calling upon your Company to discharge the alleged outstanding liability, failing which they would exercise their rights under Section 13(4) of the SARFAESI Act with respect to the secured assets. Your Company has challenged the legality and validity of these notices and is in consultation with its legal advisers to take other steps as may be advised by the legal advisors to protect your Company’s interests. However, State Bank of Bikaner and Jaipur, Karur Vysya Bank Limited and Andhra Bank has declared your company as wilful defaulter.

WINDING UP PETITION AGAINST THE COMPANY: United Bank of India (UBI) and Jammu and Kashmir Bank Limited has filed winding up petition against the Company upon the failure of the Company to repay their advances on due dates. Your Company is contesting the winding up petition and the matter is pending in the honourable High Court.

UBI is also a part of Joint Lender Forum and have also signed the

JLF Agreement on 24.06.2014.We believe that filing of winding up petition by UBI and the Jammu and Kashmir Bank Limited are against the spirit of restructuring .

REFERENCE TO THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR):

Upon erosion of entire net worth of your Company, your Company had become a Sick Industrial Company as per the provisions of Sick Industrial Companies (Special Provision) Act 1985 (SICA). Accordingly, Company has filed a Reference with the Board for Industrial and Financial Reconstruction (BIFR) which has since been registered as Case No. 85/2015 by the Hon’ble BIFR for adopting measures for the rehabilitation and revival of the Company. Reference of the Company is still pending with BIFR for preparation of a viable Scheme of the revival of the Company. Board for Industrial and Financial Reconstruction has special powers to deal with the sick units, therefore your company has also filed various Misc. Applications with Hon’ble BIFR

2. DIVIDEND

Your company has the legacy of paying dividends to its shareholders continuously for 14 years. However, during last few years, company has incurred losses and facing liquidity crunch, therefore Board of Directors has not recommended any dividend for the financial year 2015-16.

3. UNCLAIMED / UNPAID DIVIDEND (TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND)

Pursuant to Section 124 read with Sub Section (1) of section 125 of the Companies Act, 2013 , unclaimed dividend which remains unpaid for a period of seven years shall be transferred to Investor Education & Protection Fund. Accordingly, your Company has transferred all unclaimed dividend upto the year 2007-2008 to the said fund. Unclaimed dividend for the year 2008-2009 (Rs. 453,460.50) shall be transferred to the said fund before the due date.

It may be noted that upon the transfer of the unpaid/unclaimed dividend to the Investor Education & Protection Fund, members lose their right to claim such dividend. Therefore, Members are requested to claim the amount of Unpaid/unclaimed dividend for the year 2008-2009 and onwards.

4. TRANSFER TO RESERVE

During the year , your Company has not transferred any sum to any Reserves of the company

5. SUBSIDIARY/ ASSOCIATE COMPANIES AND CONSOLIDATED FINANCIAL STATEMENT

During the year under review, there were no companies, which have become or ceased to be the subsidiaries, associates or joint ventures of your company.

PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARY COMPANIES

As on 31st March 2016, your Company had 5 (Five) wholly owned foreign subsidiaries namely; Ammalay Commoditiess JLT, UAE, Ammalay International PTE Ltd, Singapore and Holy Stars Ltd, Auckland Holdings Ltd and Orient Agro (M) Ltd., based in Mauritius,

Further, the Companies Act 2013 under the provisions of section 129(3) provides that where a Company has one or more subsidiaries, it shall, in addition to its financial statement, prepare a Consolidated Financial Statement of the Company and of all the subsidiaries in the same form and manner that of its own which shall also be laid before the Annual General Meeting of the Company.

However, the above said subsidiary companies have not submitted their financial statements for the year ended 31st March, 2016 which are required for the finalization of Consolidated Financial Statements of REI Agro Limited for the year ended 31st March, 2016. Due to this, REI Agro Limited has not been able to finalize/ prepare its Consolidated Financial Statements for the year ended 31st March, 2016. The delay in preparation of Consolidated Financial Statements is beyond the control of the Management.

Company will make available the said annual accounts and other related information of the subsidiary companies as and when available from these subsidiaries.

ASSOCIATE COMPANY AND JOINT VENTURES

As on 31st March 2016, your Company do not have any joint venture with any company, however it had only 2 (Two) Associate Companies, namely M/s Varrsana Ispat Limited and M/s Anagi Constructions Private Limited. A separate sheet containing the salient features of the financial statements of the subsidiaries and associate companies as required under section 129 of the Companies Act, 2013 in prescribed form is attached herewith as an Annexure “A” which forms part of this report

6. BUSINESS SEGMENTS

Your Company operates in two Business segments i.e. business of processing, trading and marketing of agro products and Generation of power through Wind farm generators. However, your Company is not providing segment reporting for wind power generations as the total revenue, assets, profit or the capital employed in the wind power generation is less than 10 per cent threshold limits of revenue, result, and assets, which is required for reportable segment as provided in Accounting Standard 17 (AS 17)“Segment Reporting” issued by the Institute of Chartered Accountants of India (ICAI) / Company (Accounting Standards) Rules, 2006.

6.1 AGRO PRODUCTS

During the financial year 2015-16, revenue from sale of agro products was of Rs. 502.99 Crores as compared to revenue of Rs. 1832.25 Crores in the immediately preceding previous year from the sale of agro products.

During the stressful last year under review, in which the Company has faced severe liquidity crunch, shortage of raw material and lack of working capital funds, the Company was not able to utilize the installed capacity of its plants, export sales of the Company were reduced to Rs. 89 lacs against export sales of Rs. 9902 lacs during the immediately previous year. Though the export during the year are lower than the immediately preceding years, we believe that the consistent quality, better consumer engagements in past has earned a reputation to the Company and as and when our plants start running , we will regain our customers and provide momentum to the growth of the Company through quality exports.

6.2 WIND POWER PERFORMANCE

Your Company has its wind farms for power generation in the States of Rajasthan, Maharashtra, Tamil Nadu and Gujarat with a total installed capacity of 46.1 MW. During the financial year 2015-16, revenue from the wind power generation was of Rs. 18.52 Crores.

All the Wind power generation farms are registered with United Nations Framework Convention on Climate Change (UNFCC) and expected to generate revenue through sale of Certified Emission Reduction (CER/Carbon Credits) in the future.

7. CREDIT RATING

In view of your company’s default in meeting its financial obligations, Credit and Analysis Research Ltd. (CARE) has revised the ratings, at present it has assigned “CARE D” rating to the long term and short term Instruments/ facilities of the Company.

8. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A report on the management discussion and analysis as required under the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 is annexed hereto and forms part of this report

9. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance.

A report on Corporate Governance as stipulated under the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report. Requisite certificate from Practicing Company Secretary, confirming compliances with the conditions of corporate governance as stipulated under the Listing Regulations, is attached to this report.

10. ENVIRONMENTAL ASPECT AND SOCIAL RESPONSIBILITY

Your Company continues to show its commitment for sustainable use of natural and non-renewal resources and for improvement in all aspects of the environment. Company pays special emphasis for plantation and preservation of trees. We use state of art technology in our plants to reduce waste and emissions of environment pollutants. To Promote optimum utilization of available resources, Company has a rice husk based power plant for captive use thereby reducing dependence on Coal, oil etc. as fuel. The husk based power generation facilities are registered for Renewable Energy Certificates (REC). It is also to mention here again that the company has set up Wind Farms for power generation situated at Rajasthan, Maharashtra, Tamil Nadu and Gujarat, with a capacity of 46.1 MW which are registered with United Nations Framework Convention on Climate Change (UNFCC) and are capable of generating revenue through sale of Certified Emission Reduction (CER/ Carbon Credits).

QUALITY SAFETY, HEALTH

Your Company gives top most priority to the Quality of its products and Health and Safety of Consumers. Processing units of the Company are certified ISO 9001-2008 for the Quality Management Systems and ISO 22000- 2005 for milling of paddy, processing and packing of rice under Food Safety Management Systems.

Manufacturing and processing facilities of the Company are registered with U.S. Food and Drug Administration pursuant to the Federal Food Drug and Cosmetic Act as amended by the Bioterrorism Act of 2002 and FDA food safety modernization Act, which indicates high standard in relation food quality and safety matters followed by the company.

11. BOARD OF DIRECTORS

At the beginning of the financial year under review, your Company has 5 (Five) Directors on its board, having a combination of Independent Non executive and Executive Directors which constitute a competent Board in accordance with the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and applicable provisions of the Companies Act,2013. However, during the year under review, due to sudden demise of one of Independent Non-Executive Director i.e. Sh. A. Chatterjee (DIN.- 00266151) on 04th August,2015 and resignations of Ms. Anishrava Agrawal (DIN: 00976083), Independent Non-Executive Woman Director of the Company we.f. 25th April,2015 and Dr. ING N.K Gupta (DIN no. 00032956), Independent Non-Executive Director w.e.f. 23rd November,2015, your Company had left with only two Directors on the Board of Directors of the Company, consisting of one independent non-executive Director and one Executive Chairman cum Managing Director at the end of the financial year ended on 31st March,2016

Further, after the registration of the reference of the Company with Hon’ble BIFR, the company has filed a “Misc. Application” with Hon''ble BIFR to allow the Company to carry on its business and operations , including taking all decision in the matters of dealings and affairs of the Company with the existing Directors only

KEY MANAGERIAL PERSONNEL

During the year under review, there is no change (appointment or cessation) in the office of KMP.

DECLARATION BY INDEPENDENT DIRECTORS

The company has received declarations from all the Independent directors confirming that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015

DIRECTOR RETIRE BY ROTATION

Pursuant to Section 149, 152 and other applicable provisions of the Companies Act, 2013, one-third of such of the Directors as are liable to retire by rotation, shall retire every year and, if eligible, offer themselves for re-appointment at every AGM.

The Company is not retiring any Executive Director on retirement on rotation basis in the ensuing Annual General Meeting and the Company has filed a application with Honable BIFR seeking their approval for maintaining the status quo on the position of Directors and to exempt the directors of the company, liable to retire by rotation till the Company is under BIFR.

a) BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations , the Board of Directors required to carry out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees. However at present situation company has not carried out any evaluation of Board of Directors, but directors at several meeting discussed and frame polices for the working of the Board of Directors of the Company.

b) REMUNERATION POLICY

The Board of Directors of the Company on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment including criteria for determining qualifications, of Independent Directors, Senior Management and their remuneration. Details of the remuneration and sitting fees paid to the directors are provided in Corporate Governance Report. Further, pursuance to Section 134(3)(e), the Nomination & Remuneration policy framed and recommended by the committee is attached herewith as an “Annexure-B” which forms part of this report

c) MEETINGS

During the year under review, 9 ( Nine) Meetings of Board of Directors and 1(One) Meeting of Independent Directors’ were held. The Details of which are given in Corporate Governance Report. The provisions of Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 were adhered to while considering the time gap between two meetings.

12. COMMITTEES OF THE BOARD

Your Company has constituted various committees in accordance with the requirements under provision of Companies Act, 2013 and Listing Regulations of the Stock Exchanges where shares are listed, However during the year under review, due to the resignations of the few Independent Directors from the Board of the Company, Company is left with only two Directors on the

Board of Directors of the Company, as a result no. of Directors on the Board of the Company falls below the minimum numbers required to constitute a competent Board of Directors and formation of Audit, and Nomination and Remuneration and Corporate Social Responsibility Committees as required under Companies Act and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. In this regard, the Company has filed a Miscellaneous Application with the Hon’ble BIFR for exempting and allowing the Company to continue its working with two Directors only till the time Company is under BIFR or as may be directed by the Hon’ble BIFR.

Below are the Committees constituted by the Company:

a. Audit Committee

b. Nomination and Remuneration Committee

c. Share Transfer Committee

d. Shareholders’/Investors’ Grievance Committee (Stakeholders’ Relationship Committee)

e. Corporate Social Responsibility Committee

f. Risk Management Committee

The details with respect to the compositions, powers, duties etc of the above mentioned committees are mentioned in the Corporate Governance Report which forms part of this Annual Report.

13. RISK MANAGEMENT POLICY

Your Company has laid down procedures to inform members about the risk assessment and minimization procedures, which are periodically, review.

14. VIGIL MECHANISM

The Company has put in place a codified system, which welcomes suggestions from employees at all levels who have access to the audit Committee members, and the Senior Management of the Company to report any kind of irregularity in the Company’s functioning or any unethical behavior or any kind of harassment or unequal treatment given to them. Company has always believed in conducting its affairs in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethics. Further, the whistle blower policy as framed by the company is disseminated on the company’s website: www. reiagro.com

15. LOAN, GUARANTEE AND INVESTMENTS IN SECURITIES

During the financial year under review, the Company has not entered into any transaction in relation to Loans, Guarantees and Investments under the provision of Section 186 of the Companies Act, 2013.

16. CONTRACTS OR ARRANGEMENTS WITH THE RELATED PARTY

During the year under review, Your Company has not entered into any contracts and arrangements with related parties as mentioned under Section 188(1) of the Companies Act, 2013,

Further, During the year, the company had not entered into any contract or arrangement with related parties which could be considered ‘material’ (i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements entered into individually or taken together with previous transactions during the financial year) according to the policy of the Company on materiality of Related Party Transactions.

Accordingly, there are no transactions that are required to be reported in form AOC-2.

However, you may refer to Related Party transactions, as per the Accounting Standards, in the Notes to the Financial Statements attached herewith.

17. AUDITORS

A. STATUTORY AUDITORS

Pursuant to the provisions of section 139, 141 and other applicable provisions of Companies Act, 2013, M/s P.K. Lilha & Co, Chartered Accountants, Kolkata were appointed as Statutory Auditors of the Company for a period of three years in the Annual General Meeting held on 30/09/2014. However, as per the provision of section 139 of the Companies Act, 2013, the appointment of auditors is required to be ratified by the members of the Company at every Annual General Meeting.

Therefore, the Board of Directors of the Company seeks consent of the members of the Company in the ensuing Annual General Meeting of the Company for the same.

AUDITORS’ REPORT

The Statutory Auditors of the Company for the financial statements of the Company for year ended on 31st March,2016 has issued a Audit report with qualified opinion for some transactions of the Company , below mentioned are the clarification issued by the Board of Directors to the Auditors in regard to their qualified opinion

1. During the year under review, Mr. Asoke Kumar Chatterjee one of the Independent Director of the Company expired on 04.08.2015 and subsequently another Independent Director Dr Ing Narpinder Kumar Gupta resigned on 23.11.2015. Thus the number of Directors on the Board of the Company reduced to Two {2} Directors only, which is not a Competent Board. Therefore, In this regard the Company has filed “Misc. Application” with Hon''ble BIFR seeking their approval to allow the Company to act with only two existing Directors till the Company is in BIFR or per the order of Hon''able BIFR. Further Company has also submitted that it will get review all the results as placed before two Directors will be placed before the competent Board as and When Constituted.

2. Company has been facing financial crunch due to various reasons for the last two years and due to financial problems faced by the Company, it has failed to pay principal and interest due thereon to Banks / Financial Institutions on due dates, some of the Bankers thereafter have issued notices under provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Further due to severe liquidity crunch faced by the Company, company has failed to get insurance to its assets.

3. Majority of the Loan accounts of the Company has turned NPA, As per banking regulations, banks are not charging any interest on NPA accounts hence the Company has not accounted the interest on said accounts, but qualified the same by way of Notes to reflect the present status.

4. Board of Directors submit that total strength of the employees of the Company has been reduced by more than 90% from the peak number of employees; therefore company used the estimation method for calculation for gratuity and leave encashment.

5. The company had provided Corporate Guarantee to the lenders for the borrowings by its wholly owned foreign Subsidiary Company, i. e. Ammalay Commodities JLT and has shown in the contingent liabilities in the financial statements of the Company and in case the lenders fail to recover the amount from subsidiary by realizing their assets, the Company will make suitable provision for the liabilities towards the corporate guarantees.

6. As majority of the loan accounts of the Company has turned NPA, no such balance confirmation and /or Bank Statement were provided by the banks to the Company, in absence of which, the Company has not been in position to provide such statements to the Auditors.

7. The net worth of the company has been fully eroded and the Company filed a reference in terms of the provisions of section 15(1) of SICA with the Board for Industrial and Financial Reconstruction (BIFR) on 28th April, 2015 to study the reasons of Sickness and determination of measures to be adopted for revival of the Company, which as accepted by Hon''ble BIFR vide its letter dated 3rd July,

2015 and same has been registered a case no. 85/2015 under the provisions of SICA. The revival and rehabilitation scheme for the Company is under process which outlines the measures for the revival and rehabilitation for continue the business of the Company as going concern.

B. SECRETARIAL AUDITORS

Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 , Your Company has appointed Mr. Astik Mani Tripathi, Practicing Company Secretary, Proprietor of M/s Astik Tripathi and Associates to undertake the Secretarial Audit of the Company.

SECRETARIAL AUDIT REPORT

Secretarial Auditors of the Company, in their Audit report has mentioned the following observations In this regard, Board of Directors of the Company gave the following clarifications:

1. The Woman Director of the company has resigned from the Company during the Audit Period, however company has not appointed the Women Director after that during the audit period as per the provisions of section 149(1) of the Companies Act, 2013.

In this regard, Board clarified that during the year under review, Company has appointed Ms. Anishrava Agrawal (DIN no. 00976083) as an Independent Non-Executive Woman Director on the Board. However, due to some personal and unavoidable reasons, she was unable to continue and tendered her resignation during the year under review. Since then, Company is looking for the suitable candidates to fill the respective vacancy.

2. The company has not appointed Chief financial officer (CFO) during the audit period as per the provisions of section 203(1) of the Companies Act, 2013 and rule 8 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

In this regard, Board clarified that the Company is in search of suitable candidate for the post of Chief Financial Officer of the Company

3. The Company has still not filed DIR-12 of Mr. NK Gupta as DIR-11 has been filed earlier for the purpose of resignation.

In this regard, Board clarified that due to resignation of Dr. ING N.K Gupta, Independent Non-Executive Director of the Company, number of Directors on the Board falls below the minimum statutory limit as prescribed under Companies Act, 2013 and therefore the Company is unable to file E-form DIR-12 with ROC

The Secretarial Audit Report for the FY 2015-16 is annexed herewith as “Annexure C”.

18. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to requirement under Section 134(5) of the Companies Act, 2013 , with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

- In preparation of the annual accounts, the applicable accounting standards had been followed along with the proper explanations relating to material departures.

- 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 the affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period.

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

- The Directors have prepared the annual accounts of the Company on a ‘going concern’ basis.

- The Directors had laid down the internal financial control that is followed by the company and these internal financial controls are adequate and were operating effectively. Internal Financial controls means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to Companies policies, the safeguarding of it s assets, the prevention and detections of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of financial information.

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

19. PUBLIC DEPOSITS

During the year under review, your Company has not accepted or renewed any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

20. LISTING AGREEMENT

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 was notified on September 2, 2015, with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective from December 1, 2015. Accordingly, all listed entities were required to enter into the Listing Agreement within six months from the effective date. The Company has entered into Listing Agreement with Bombay Stock Exchange Ltd and the National Stock Exchange of India Ltd.

21. PARTICULARS OF EMPLOYEES

The information showing names and particulars of employees of the Company pursuant to rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. However, In terms of Section 136 of the Act, the Annual Report of the company are being sent to the members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by the members at the Registered office of the company during business hours on working days of the company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the company secretary in advance.

The ratio of the remuneration of each director to the median employee’s remuneration and other details in terms of subsection 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as an “Annexure D. ”

22. SHARE CAPITAL AUDIT

- Pursuant to SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 , certificates, on half-yearly basis, have been issued by a Company Secretary-in-Practice for due compliance of share transfer formalities by the Company.

- A Company Secretary-in-Practice, on a quarterly basis, carried out a Reconciliation of Share Capital Audit to reconcile the total admitted capital with NSDL and CDSL and the total issued and listed capital. The audit confirms that the total issued/paid up capital is in agreement with the aggregate of the total number of shares in physical form and the total number of shares in dematerialized form (held with NSDL and CDSL).

23. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Your company strives hard to take all measures to conserve energy and use the latest technology. The particulars relating to energy conservation, technology absorption, foreign exchange as required to be disclosed under section 134(3)(m) of the Companies Act,2013 read with Rule 8(3) of the Companies (Accounts) Rule,2014 are annexed as an Annexure ‘E’ and forms part of this Report.

24. CORPORATE SOCIAL RESPONSIBILITY

Your Company continues its legacy of working towards betterment of the weaker section and in its quest to serve the weaker section of the society pursued several initiatives for different sections of society to foster the feeling of sharing and caring.

In accordance with the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, Your Company has already constituted Corporate Social Responsibility Committee and also has framed a CSR policy in accordance to the Companies Act, 2013. Details of composition and working are provided in the relevant section on the Corporate Governance Report..However Your Company has suffered huge losses during last two years and as per the provisions of the Companies Act, 2013, Your Company is not require to spent any amount towards corporate social responsibility during the year under review.

25. EXTRACTS OF THE ANNUAL RETURN

Extract of Annual Return Pursuant to the Section 92(3) of the Companies Act, 2013 is annexed to this report as “Annexure F”

26. ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Companies Act, 2013 re-emphasizes the need for an effective Internal Financial Control system in the Company which should be adequate and shall operate effectively. Rule 8(5) of Companies (Accounts) Rules, 2014 requires the information regarding adequacy of Internal Financial Controls with reference to the financial statements to be disclosed in the Board''s report.

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business including adherence to the company’s policies, safeguarding of its assets, the prevention and detection of the frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of the reliable financial information

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the statutory and secretarial auditors and external consultants, financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company’s internal financial controls were adequate and effective during FY 2015-16.

27. AWARDS AND RECOGNITION

During last Few years your Company have won many awards including the Global CSR Excellence& Leadership Award endorsed by World CSR Congress and Asian Confederations of Business for the best use of CSR practices in FMCG sector and was also been awarded the Asia Best CSR Activity award endorsed by Asian Confederations of Business in 2012-13 and during the year 2013-14 Raindrops, was awarded as No. 1 brands in Basmati rice category in Asia by Ibrands 360.

28. ACKNOWLEDGMENT

The Board place on record their appreciation for the assistance and co-operation received from various government authorities, stakeholders, bankers, vendors and members during the year under review. Directors also wish to thank all the employees for their contribution commitment, support and co-operation.

For and on behalf of Board of Directors

Sd/- Sd/-

(Sandip Jhunjhunwala) (K. D. Ghosh)

Chairman & Managing Director Director

Place: Kolkata

Date: 29th August, 2016


Mar 31, 2014

To the Members,

We would like to present the 20th Board report along with the Audited Financial Results for the year ended 31st March 2014.

1. FINANCIAL AND PERFORMANCE REVIEW

Over the years your Company has developed an integrated model of operations right from procurement, maturing, processing, packaging, branding and distribution, which help the Company to offer a wide range of quality products to its consumers. Your Company sells several popular brands through organised retail sector."Raindrops" fag ship brand of the Company is one of popular and trusted brand in FMCG Sector in India. (Rs. In Lacs) Particulars 2013-2014 2012-13

Sales 452,324 508,909

Other Income 4,500 1,186

Total 456,824 510,095

Profit Before Interest and Depreciation 67,807 93,306

and Amortisation (PBIDTA)

Less: Interest 64,912 60,926

Less: Depreciation 6,858 6,406

Profit Before Taxation( PBT) (3,964) 25,974

Provision for Current Taxation - 7,096

Prior Period Tax Payments (129) (2,223)

Profit after Taxation(PAT) (3,835) 21,101

The market for rice Industry was modest during the year. The high cost of fnancing with rising interest costs and general slowdown in the economy has resulted in pressure on the bottom line of most corporates especially in working capital intensive industries.

The last financial year turned out to be the weakest years in recent times. Total turnover of the Company was Rs. 452,324 lacs on a standalone basis as against Rs. 508,909 lacs in the previous year. The companyRs.s Profit before Interest and Depreciation was Rs. 6,7807 lacs during the year. However, after providing Rs. 64,912 lacs towards finance cost and Rs. 6,858 lacs for depreciation, the company suffered a loss of Rs. 3,835 lacs during the year.

Your company has also been facing a tight liquidity position and has not been able to meet all its financial obligations thereby requiring corrective steps to be taken with the support of its lenders. The position of the company in this regard and the reason for the performance as above are highlighted later in this report.

CORPORATE DEBT RESTRUCTURING (CDR)

Our Company operates in a highly working capital intensive industry. Access of capital and its cost of funds has a major impact on the industry. The recent years has seen an increase in the interest cost in India. This has had a negative impact on the industry with many participants facing pressure on their cash flows. This has resulted in a reduction in margins and a slowdown in receivables for the company resulting into a liquidity crunch.

The Company has defaulted on its payment obligation in respect of certain Banks/Financial Institutions/NCD holders, As a result thereof all the Working Capital Banks, Term Lenders and NCD Holders have initiated the Corrective Action Plan (CAP), In accordance with the Reserve Bank of IndiaRs. (RBIRs.s) Special Mention Accounts (SMA) guidelines dated 26th February , 2014.

And as required by the SMA guidelines, our lenders consortium has formed a Joint Lenders forum(JLF) led by UCO Bank and signed a Joint Lender Forum Agreement (JLF Agreement) on 24.06.2014 and asked the Company to present a Revival Plan including the detailed Corrective Action Plan (CAP) and also formed a steering Committee of the Lender banks to guide the way forward.

WINDING UP PETITION AGAINST THE COMPANY

Your Company has taken working capital and term loan facilities from several Banks and institutions. Your company had working capital facilities from 20 lenders who formed a consortium for fnancing of your company''s requirements. United Bank of India(UBI) is also a member of the consortium with a facility of Rs. 215 crores out of a total working capital finance of Rs. 4000 crores. Your company has defaulted in some of its obligations towards UBI. The bank has fled a Winding up petition in the Honourable High Court of Calcutta. Your company has contested the Winding up petition pending a final decision from the Court.

UBI is also a part of Joint Lender Forum, as discussed above, and have also signed the JLF Agreement on 24.06.2014.We believe that fling of winding up petition by UBI is against the spirit of ongoing restructuring and JLF Agreement and its terms.

TEMPORARY CLOSURE OF THE PLANT

The Company has been facing a facing a liquidity crunch resulting in shortage of raw material thereby lower capacity utilisation and partial shut down of one of its units.

2. DIVIDEND

Your company has paid dividends to its shareholders for the last 14 years. However, considering the companyRs.s financial position and performance for the year under review, Board of Directors, has not recommended any dividend on equity shares and the preference share of the Company for the financial year 2013-14.

3. UNCLAIMED / UNPAID DIVIDEND (TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND)

Pursuant to Section 205A read with Section 205C of the Companies Act, 1956, unclaimed dividend which remains unpaid for a period of seven years shall be transferred to Investor Education & Protection Fund. Accordingly, the Company has transferred all unclaimed dividend for the year 2005-2006 to the said fund. Unclaimed dividend for the year 2006-07 (Rs.8602) shall be transferred to the said fund before the due date.

It may be noted that upon the transfer of dividend to Investor Education & Protection Fund, members lose their right to claim such dividend. Therefore, Members are requested to claim the amount of Unpaid/unclaimed dividend for the year 2006-2007 and onwards.

4. TRANSFER TO GENERAL RESERVE

During the year, your Company has not transferred any sum to the General Reserves Account. However,during the year under review, your Company has transferred Rs. 33.20 Crores to Debenture Redemption Reserves Account.

5. CONSOLIDATED FINANCIAL STATEMENT

During the year 2013-14, Indian Economy experienced relatively muted growth and world economy also performed weakly. Despite the pressure at the macro levels, business matrix has helped the Company across the regions.

During the year under review, your Company has reported consolidated revenue of Rs. 1,0155 crores for the financial year ended 31st March, 2014 against consolidated revenue of Rs. 9,548 crores for the previous year ended 31st March, 2013. During the year, Company has maintain the momentum but due to high cost

of raw material consumed and increased financed cost bottom line has been under pressure. Consolidated Profit after tax stood at Rs. 427 Crores against Consolidated Profit after tax for previous year of Rs. 700 Crores .

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statement read with Accounting Standard AS-23 on Accounting for investment in Associates, your Directors provide the Consolidated Audited Financial Statement in the Annual Report.

As per section 212 of the Companies Act, 1956, we are required to attach the, Balance sheet, statement of Profit and Loss and other documents of our subsidiaries. Ministry of Corporate affairs, vide its circular dated 8th February, 2011, has granted general exemption from attaching the Balance sheet, statement of Profit and Loss and other documents of the subsidiary companies with the balance sheet of the company.

Board of Directors of the Company in its meeting held on 30th May, 2014 consented for not attaching the balance sheet of the subsidiary companies. A statement containing brief financial details of the companyRs. s subsidiaries for the financial year ended March 31, 2014 is included in the Annual report. Company will make available the said annual accounts and other related information of the subsidiary companies upon request by any member of the Company or its subsidiary company and the same will also be kept open for inspection by any member at the registered office of the Company and its subsidiary Companies.

6. SUBSIDIARY COMPANIES

Your Company has 5 (Five) wholly owned foreign subsidiaries namely; Ammalay Commoditiess JLT, UAE, Ammalay International PTE Ltd, Singapore and Holy Stars Ltd, Auckland Holdings Ltd and Orient Agro (M) Ltd all based at Mauritius.

Total revenue from Subsidiary Companies stood at Rs. 5915 Crores for the financial year ended 31st March, 2014 against total revenue of Rs. 4487 Crores for the previous year ended 31st March, 2013, an increase of 32%(approx.) over the last year. During the year under review, aggregate Profit after tax of the subsidiary companies was Rs. 481 Crores against Rs. 489 Crores in the previous year, thereby Even there was a upward movement in the top line, the bottom line from the subsidiaries was low due to increase in the finance costs of subsidiary companies. The subsidiaries have also seen a slowdown of its receivables resulting in a tight liquidity position.

7. BUSINESS SEGMENTS

Your Company operates in two Business segments i.e. business of manufacturing, trading and marketing of agro products and Power Generation through Winds farms. However, the Company has discontinued the segment reporting for wind power generations as the total revenue, assets, Profit or the capital employed in the wind power generation is less than 10 per cent threshold limits of revenue, result, and assets, which is required for reportable segment as provided in Accounting Standard 17 (AS 17)"Segment Reporting" issued by the Institute of Chartered Accountants of India (ICAI) / Company (Accounting Standards) Rules, 2006.

7.1 AGRO PRODUCTS

During the financial year 2013-2014, revenue from sale of agro products was ofRs. 4,500 Crores as compared to Rs. 5,063 Crores in the immediately preceding previous year During the year under review, export sales of the Company has stood at Rs. 466 crores against export of Rs. 493 Crores during the previous year. Though the export during the year are less than the immediately preceding years, we hope the consistent quality, commitment, innovation and consumer engagements along with support of our lenders will add value to consumers and provide momentum.

7.2 WIND POWER PERFORMANCE

Your Company has its wind farms for power generation in the States of Rajasthan, Maharashtra, Tamil Nadu and Gujarat with a total installed capacity of 46.1 MW During the financial year 2013-2014, revenue from the wind power generation was of Rs. 22.11 Crores.

Wind power generation farms at Rajasthan, Tamil Nadu, Maharashtra and Gujarat are registered with United Nations Framework Convention on Climate Change (UNFCC) and expected to earn revenue from sale of certified Emission Reduction (CER/Carbon Credits)in the future.

8. CREDIT RATING

In view of your company''s default in meeting its financial obligations, Credit and Analysis Research Ltd. (CARE) has revised the ratings, at present it has assigned CARE D to the long term Instruments/ facilities of the Company and CARE D rating to the short term instruments/ facilities of the Company.

9. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A report on the management discussion and analysis is annexed hereto and forms part of this report

10. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance.

A report on Corporate Governance as stipulated under clause 49 of the Listing Agreement entered with the Stock Exchanges forms part of the Annual Report. Requisite certifcate from the auditors of the company confirming compliances with the conditions of corporate as stipulated under clause 49, is attached to this report.

11. ENVIRONMENTAL ASPECT AND SOCIAL RESPONSIBILITY

Your Company continues to show its commitment for sustainable use of natural and non-renewal resources and for improvement in all aspects of the environment. Company pays special emphasis for plantation and preservation of trees. It ensures state of art technology along with consistent efforts to reduce waste and emissions. To Promote optimum utilisation of available resources, Company has set up a rice husk based power plant thereby reducing dependence on Coal,oil etc. as fuel. The husk based power generation facilities are registered for Renewable Energy Certifcates (REC). As mentioned above, the company has set up Wind Farms for power generation situated at Rajasthan, Maharashtra, Tamil Nadu and Gujarat, with a capacity of 46.1 MW which are registered with United Nations Framework Convention on Climate Change (UNFCC) .

QUALITY SAFETY, HEALTH

Your Company accords high priority to Quality of its products, Health and Safety of consumers. Processing units of the Company are certified ISO 9001-2008 for the Quality Management Systems and ISO 22000- 2005 for milling of paddy, processing and packing of rice under Food Safety Management Systems.

Manufacturing and processing facilities of the Company are registered with U.S. Food and Drug Administration pursuant to the Federal Food Drug and Cosmetic Act as amended by the Bioterrorism Act of 2002 and FDA food safety modernization Act, which indicates high standard in relation food quality and safety matters followed by the company.

12. DIRECTORS

Shri Sanjay Jhunjhunwala (DIN-00174701) has resigned from the Chairmanship and Directorship of the Company w.e.f. 30th May 2014.

Shri Sandip Jhunjhunwala (DIN-00174885) was appointed as Managing Director of the Company for a period of 5 years with effect from 30th June, 2013 and his appointment was not subject to retirement by rotation during his tenure as Managing Director. He was also appointed as the Chairman of the Company in the meeting held on 30.05.2014. To meet the requirement of the Companies Act 2013, it is proposed to change his appointment as a Director liable to retire by rotation. Directors of the Company requested to accord your consent to change the terms of appointment of Shri Sandip Jhunjhunwala to meet the requirement of the Companies Act, 2013.

There are three Independent Directors on the Board of the Company as per the Listing Agreement requirements viz., Shri A. K. Chatterjee (DIN -00266151), Dr. N. K. Gupta (DIN- 00032956) and Shri K.D. Ghosh (DIN-02489190). All these Independent Directors had been appointed vide member''s resolution in terms of the provisions of the Companies Act, 1956 as Directors'' whose period of office is liable to determination by retirement by rotation.

The Company has received declarations from all the above Independent Directors stating that they meet With the criteria of Independence as prescribed under sub- section (6) of Section 149 of the Companies Act, 2013.

The Board of Directors of your Company, after reviewing the declarations submitted by the above Independent Directors is of the opinion that the said Directors meet the criteria of Independence as per Section 149(6) of the Companies Act, 2013 and the rules made there under and also meet with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, for being the Independent Directors on the Board of the Company and are also independent of the management. Of the above Independent Directors, Shri A. K. Chatterjee, Dr. N. K. Gupta and Shri K.D. Ghosh , retire by rotation at the ensuing Annual General Meeting and being eligible and offering them self for appointment, are proposed to be appointed as Independent Directors of the Company under the Companies Act, 2013 to hold office for 3 (three) consecutive years for a term upto the conclusion of the 23rd Annual General meeting of the Company in the calendar year 2017.

Details under Clause 49 of the Listing Agreement with the Stock Exchanges in respect of Directors seeking appointment at the Annual General Meeting are provided in the Corporate Governance Report and in the Explanatory Statement to the Notice.

The Directors seeking appointment have furnished the requisite declarations.

Board of Directors seeks your approval to the terms of their re- appointment.

13. AUDITORS

M/s P.K.Lilha & Co., Chartered Accountants, Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and being eligible for reappointment, they have indicated their willingness to accept re-appointment. As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from M/s P.K.Lilha & Co, to such appointment and also a certifcate to the effect that their appointment, if made, would be in accordance with Section 139(1) of the Companies Act, 2013 and the rules made there under, as may be applicable.

In terms of Section 139 of the Companies Act, 2013 and the Rules made thereunder, their re-appointment needs to be approved by the members and their remuneration has to be fixed.

AUDITORS'' REPORT

The Notes on Accounts referred to the Auditors'' Report are self explanatory and do not call for any further comments.

14. DIRECTORS'' RESPONSIBILITY STATEMENT

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

- In preparation of the annual accounts, the applicable accounting standards had been followed along with the proper explanations relating to material departures, if any.

- 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 the affairs of the Company at the end of the financial year and of the Profit or loss of the Company for that period.

- The Directors have taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act for safeguarding the assets of the Company and for preventing and detecting the fraud and other irregularities.

- The Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

15. PUBLIC DEPOSITS

During the year under review the Company has not accepted any deposits from public within the meaning of Section 58A and 58AA of the Companies Act, 1956, and read with the Companies (Acceptance of Deposit) Rules, 1975.

16. PARTICULARS OF EMPLOYEES

The information required under Section 217(2A) of the Companies Act, 1956 and the Rules made there under is given in the Annexure to this Report and forms part of the Report. However, in terms of Section 136(1) of the Companies Act, 2013, the Report and Accounts are being sent to the members excluding the aforesaid Annexure. Any member interested in obtaining copy of the same may write to the Company Secretary at the Registered office of the Company.

17. SHARE CAPITAL AUDIT

- Pursuant to Clause 47(c) of the Listing Agreement with the Stock Exchanges, certifcates, on half-yearly basis, have been issued by a Company Secretary-in-Practice for due compliance of share transfer formalities by the Company.

- A Company Secretary-in-Practice carried out a Reconciliation of Share Capital Audit to reconcile the total admitted capital with NSDL and CDSL and the total issued and listed capital. The audit confirms that the total issued/paid up capital is in agreement with the aggregate of the total number of shares in physical form and the total number of shares in dematerialized form (held with NSDL and CDSL).

18. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Your company strives hard to take all measures to conserve energy and use the latest technology. The particulars relating to energy conservation, technology absorption, foreign exchange as required to be disclosed under section 217(1)(e) of the Companies Act,1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors ) Rules,1988 are annexed as

Annexure ''A'' and forms part of this Report.

19. CORPORATE SOCIAL RESPONSIBILITY

Your Company continues its legacy of working towards betterment of the weaker section and in its quest to serve the weaker section of the society pursued several initiatives for different sections of society to foster the feeling of sharing and caring.

In accordance with the provisions of Companies Act, 2013, all Companies having Net Worth of Rs. 500 Crores or more, or Turnover of Rs. 1,000 Crores or more or a Net Profit of Rs. 5 Crores or more during any Financial Year will be required to constitute a Corporate Social Responsibility (CSR) Committee of the Board of Directors comprising three or more Directors, at least one of whom will be an Independent Director. Aligning with the guidelines, we have constituted Corporate Social Responsibility Committee on 29th May, 2014. The composition of the Corporate Social Responsibility Committee is as under:

Shri Sandip Juhnjhunwala- Chairman

Shri A. Chatterjee – Member

Shri K.D. Ghosh- Member

20. AWARDS AND RECOGNITION

Your company was awarded the Global CSR Excellence & Leadership Award endorsed by World CSR Congress and Asian Confederations of Business for the best use of CSR practices in FMCG sector and was also been awarded the Asia Best CSR Activity award endorsed by Asian Confederations of Business in 2012-13.During the year 2013-14 Raindrops, was awarded as No. 1 brands in Basmati rice category in Asia by Ibrands 360.

21. ACKNOWLEDGMENT

The Board place on record their appreciation for the assistance and co-operation received from various government authorities, stakeholders, bankers, vendors and members during the year under review. Directors also wish to thank all the employees for their contribution commitment, support and co-operation.

For and on behalf of Board of Directors

(Sandip Jhunjhunwala) (A. Chatterjee) Chairman & Managing Director Director

Place: New Delhi Date: 14th August, 2014


Mar 31, 2012

The Directors have pleasure in presenting the 18th Board Report along with the Audited Financial Results for the year ended 31st March 2012.

1 FINANCIAL PERFORMANCE

(Rs. In Lacs)

Particulars 2011-2012 2010-2011

Sales 422,548 372,435

Other Income 320 386

Total 422,868 372,821

Profit Before Interest and 83,572 77,575

Depreciation and Amortisation (PBIDTA)

Less: Interest 51,380 33141

Less: Depreciation 3,879 2,212

Profit Before Taxation (PBT) 28,313 42,222

Provision for Current Taxation 5,650 13,975

Prior Period Tax Payments 40 1

Profit after Taxation (PAT) 22,623 28,247

FINANCIAL REVIEW

During the year under review your Company has achieved a turnover of Rs. 4225 Crore as against Rs. 3724 Crores in the previous year. An increase of 13.48% over the last year. However during the year, net profit of the Company is reduced to Rs. 226 Crores in comparison to net profit of 282 Crores in the previous year. We have managed to increase our top line but due to increase in interest cost bottom line was slightly pressed. The highlights of the performance of each of the segments of your company are highlighted later in this report.

2. DIVIDEND

For the year under review, the Board of Directors of the Company have proposed and recommended a dividend of 50% i.e., Re. 0.50 on face value of Re. 1 each equity share, aggregating to Rs. 4789.92 lacs. In addition, Board of Directors have also proposed and recommended a dividend @ 4%, i.e. Rs. 4/- each on the preference share having face value of Rs. 100/- each to the preference shareholders aggregating to Rs.160 lacs for the financial year 2011- 12. The final dividend, if approved, will be paid within 30 days of its declaration.

3. UNCLAIMED / UNPAID DIVIDEND (TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND)

Pursuant to Section 205A read with Section 205C of the Companies Act, 1956, unclaimed dividend which remains unpaid for a period of seven years shall be transferred to Investor Education & Protection Fund. Accordingly, the Company has transferred all unclaimed dividend for the year 2003-2004 to the said fund. Unclaimed dividend for the year 2004-05 C 2,89,633) shall be transferred to the said fund before the due date.

It may be noted that upon the transfer of dividend to Investor Education & Protection Fund, members lose their right to claim such dividend. Therefore Members are requested to claim the amount of Unpaid/unclaimed dividend for the year 2004-2005 onwards.

4. TRANSFER TO GENERAL RESERVE

Your Company proposed to transfer Rs. 14 Crore to General Reserves out of the amount available for appropriation.

5. CONSOLIDATED FINANCIAL STATEMENT

REI Agro group has reported a consolidated revenue of Rs. 5382 crores for the financial year ended on 31st March, 2012, Consolidated profit before tax stood at Rs. 445 crores and consolidated Profit after tax stood at Rs. 388 Crores. There have been no consolidated figures available for the previous year as all the subsidiary companies have started their business operations in year 2011-12.

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statement read with Accounting Standard AS-23 on Accounting for investment in Associates, your Directors provide the Consolidated Audited Financial Statement in the Annual Report.

However, in accordance with the general circular No. 2/2011 dated 8th Feb, 2011, issued by the Ministry of Corporate affairs, Government of India, the Balance Sheet, Profit and Loss account and other documents of the Subsidiary companies are not being attached with balance sheet of the Company. However the financial information's of the subsidiary Companies is disclosed in the Annual report in compliance with the said circular. Company will make available the said annual accounts and other related information's of the subsidiary companies upon request of any member of the Company or its subsidiary company and same will also be kept open for inspection by any member at the registered office of the Company and at subsidiary Company

6. SUBSIDIARY COMPANIES

Your Company has incorporated four (100 %) wholly owned foreign subsidiary Companies in Dubai and Mauritius. Out of which one wholly owned subsidiary is incorporated at Dubai Multi Commodities Centre ( DMCC) Dubai in the name of REI Agro Traders JLT, However later on name of the said subsidiary was changed to "Ammalay Commodities JLT". Other three 100 % wholly owned subsidiaries were incorporated at Mauritius, namely; Holy Stars Ltd, Auckland Holdings Ltd and Orient Agro (M) Ltd. All the above subsidiary Companies have started their business operations in the year under review.

7. BUSINESS SEGMENTS

Company operate in two Business segments i.e. Basmati Rice Processing and Wind Power Generation. However, the Company has discontinued the separate segment reporting for wind power generation because the total revenue, profit or the capital employed in the wind power generation is less than 10 per cent threshold limits of revenue, result, and assets, which is required for separate reportable segment as provided in Accounting Standard 17 (AS 17 — Segment Reporting) issued by ICAI / Company (Accounting Standards) Rules, 2006.

7.1 OPERATIONAL PERFORMANCE

During the financial year 2011-2012, there was an increase in sales of food product to Rs. 4200 Crore from Rs. 3702 Crore in the immediately preceding previous year. An 13.45% increase over the last year.

Due to continue efforts for modernizing and urge of expansion, Company has reached the installed capacity of 118 TPH during the year in comparison of 103 TPH in the previous year. With the successful implementation of modernizing processes, we expect substantial improvement in the overall operational efficiency Exports performance

During the year under review, export sales of the Company stood at Rs. 233 Crores. The company has taken several measures to increase the export sales like incorporation several subsidiaries in Dubai and Mauritius as direct presence will help us capitalize on the opportunities in the international market. As you can see there has been a shortfall in the export of the company during FY 2012. The shortfall in the export figure is primarily on account of expedition of international launch of our brand. We have launched Raindrops in the domestic markets and it has already emerged as one of the largest brands in the organized space. Encouraged by the performance of the Raindrops brand in the domestic market, we have planned to expedite the international launch of the brand. In order to prepare the market for the launch we had discontinued the private label (Buyers brand) sale of our rice towards the end of the financial year. This has resulted in a reduction in our export sales; however, with the launch of our brand in the current year and the commencement of shipments on private label basis we are confident of increasing our export.

7.2 WIND POWER PERFORMANCE

Company has its wind power generations farms in the States of Rajasthan, Maharashtra, Tamil Nadu and Gujarat, having total installed capacity of 46.1 MW During the financial year 2011-2012, revenue from the wind power generation was of Rs. 23.64 Crore. Wind power generation farm at Rajasthan, registered with UNFCC and has earned revenue of Rs. 1.34 crores through sale of Carbon Credits. Further the Company is in the process of registration of its wind power generation farms situated at Tamil Nadu and Maharashtra with UNFCC and will be able to earn significant number of carbon credits once these projects get registered.

8. CREDIT RATING

Credit and Analysis Research Ltd. (CARE) has upgrade the rating as CARE "A "(Single A Plus) assigned to( long term facilities) Non Convertible Debentures (NCDs) issued by the Company. Further Credit and Analysis Research Ltd. (CARE) has also issued PR1 ( PR One Plus) rating to the short term credit facilities of the Company

9. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A report on the management discussion and analysis is annexed hereto and forms part of this report.

10. CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance. A report on Corporate Governance as stipulated under clause 49 of the Listing Agreement entered with the Stock Exchanges forms part of the Annual Report. Requisite certificate from the auditors of the company confirming compliances with the conditions of corporate governance as stipulated under clause 49, is attached to this report.

11. ENVIRONMENTAL ASPECT AND SOCIAL RESPONSIBILITY

The Company continues to show its commitment for improvement in all aspects of the environment and pays special emphasis for plantation and preservation of trees, development of gardens in the vicinity of the factory and office premises. We pay full attention to promote, improve and maintain our responsibility to the society. The Company is also setting up a rice husk based power plant and Wind power generation farm of the Company situated at Rajasthan, registered with UNFCC and the Company is also in the process of registration of its other wind power generation farms situated at Tamil Nadu and Maharashtra with UNFCC.

12. DIRECTORS

In accordance to the section 255 of the Companies Act, 1956 and Article 95 of the Article of Association of Company, Shri Sanjay Jhunjhunwala and Shri A. Chatterjee, Directors of the Company, will retire by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting. Your Directors recommend their re-appointment.

A brief resume of the Directors seeking re-appointment, their expertise etc. is given in the notice to the ensuing Annual General Meeting.

13. AUDITORS

M/s PK.Lilha & Co., Chartered Accountants, Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. They have indicated their willingness to accept re-appointment. In terms of Section 224A of the Companies Act, 1956, their re-appointment needs to be approved by the members and their remuneration has to be fixed.

AUDITORS' REPORT

The Notes on Accounts referred to the Auditors' Report are self explanatory and do not call for any further comments.

14. DIRECTORS' RESPONSIBILITY STATEMENT

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

- In preparation of the annual accounts, the applicable accounting standards had been followed along with the proper explanations relating to material departures, if any.

- 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 the affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.

- The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act for safeguarding the assets of the Company and for preventing and detecting the fraud and other irregularities.

- The Directors have prepared the annual accounts on a going concern basis.

15. PUBLIC DEPOSITS

The Company has neither invited nor accepted any public deposits during the year under review.

16. PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and the other information's are set out in the annexure to the Directors report. However having regards to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information( annexure) is being sent to all the members of the Company and others entitled thereto. Statement of particulars of employees and other documents, if any, which are not annexed to this Report, will be open for inspection for the shareholders at registered office of the Company during working hours for a period of 21 days before the date of annual general meeting. Any member interested in obtaining such particulars may write to the Company Secretary of the Company

17. SECRETARIAL AUDIT

- Pursuant to Clause 47(c) of the Listing Agreement with the Stock Exchanges, certificates, on half-yearly basis, have been issued by a Company Secretary-in-Practice for due compliance of share transfer formalities by the Company.

- A Company Secretary-in-Practice carried out a Reconciliation of Share Capital Audit to reconcile the total admitted capital with NSDL and CDSL and the total issued and listed capital. The audit confirms that the total issued/paid up capital is in agreement with the aggregate of the total number of shares in physical form and the total number of shares in dematerialized form (held with NSDL and CDSL).

18. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Your company strives hard to take all measures to conserve energy and use the latest technology. The particulars relating to energy conservation, technology absorption, foreign exchange as required to be disclosed under section 217(1)(e) of the Companies Act,1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors ) Rules,1988 are annexed as Annexure 'A' and forms part of this Report.

19. ACKNOWLEDGMENT

The Board acknowledge the assistance provided to the Company by its bankers and also place on record their appreciation for the assistance and co-operation received from our bankers, government authorities, employees, stakeholders, vendors and members during the year under review. Your Directors are quite optimistic for support to be extended by all in the years to come.

For and on behalf of Board of Directors

(Sandip Jhunjhunwala) (A. Chatterjee)

Vice Chairman & Managing Director Director

Place: Kolkata

Date : 30 May, 2012


Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the 17th Board Report along with the Audited Financial Results for the year ended 31st March 2011.

Summarised Financial Results:

(Rs. in Lacs)

Particulars 2010-11 2009-10

Sales 372,388 369,323

Other Income 386 970

Total 372,774 370,293

Profit Before Interest and

Depreciation 77,291 61,147

Less: Interest 32,757 34,825

Less: Depreciation 2,212 2,139

Profit Before Taxation 42,322 24,183

Provision for Current Taxation 13,975 8,402

Provision for Fringe Benefit Tax

Prior Period Tax Payments 102 65

Profit after Taxation 28,245 15,717

Add- Balance Brought Forward 454 309

Amount Available for

Appropriation 28,699 16,026

Less - Interim Dividend on

Equity Share 958 319

Less - Dividend Tax on

Interim Dividend 159 54

Less - Proposed Dividend 2,076 799

Less - Dividend Tax on above 337 136

Less - Short Provision for

Dividend & Dividend Tax 1486 35

Less - Transfer to Debenture

Redemption Reserve 1,300 230

Less - Transfer to General Reserve 14,000 14,000

Balance Carried to Balance Sheet 8,383 453

FINANCIAL PERFORMANCE

During the year under review your Company has achieved a turnover of Rs.3724 Crore as against Rs.3693 Crores in the previous year. During the financial year ended on 31 st March 2011, we have achieved a net profit of Rs.282.45 crores as compared to a profit of Rs.157.17 crores in the previous year, an increase of about 80% over the previous year. We have managed to increase our bottom line not only in absolute terms but also in terms of net profit margin

which has moved to 7.58% up from 4.26% in the previous year.The increase in the margins is a result of the growing strength of your company in the basmati rice industry. The highlights of the performance of each of the segments of your company are highlighted later in this report.

DIVIDEND

During the year under review, the company has declared and distributed interim dividend of 10 % on the equity share, i.e. Rs.0.10 on each share of the face value of Rs.1 each aggregating to Rs.957.98 lacs. In addition to the interim dividend the Board has proposed and recommended a final dividend of 20% i.e., Rs.0.20 on face value of bleach, aggregating to Rs.1915.96 lacs. Hence, the total dividend for the financial year ended 31st March, 2011 stands Rs.0.30 per equity share aggregating to Rs.2873.94 lacs. In addition, Board of Directors has also proposed and recommended a dividend @ 4%, i.e. Rs.4/- each on the preference share having face value of Rs.100/- each to the preference shareholders aggregating to Rs.160 lacs for the financial year 2010-11.

UNCLAIMED/UNPAID DIVIDEND

Pursuant to Section 205A read with Section 205C of the Companies Act, 1956, unclaimed dividend which remains unpaid for a period of seven years from the date of its transfer to unpaid Dividend account of the Company shall be transferred to Investor Education & Protection Fund (IEPF). Accordingly, the Company has transferred all unclaimed dividend for the year upto 2002-2003 to the said fund. Unclaimed dividend for the year 2003-04 (Rs.2,32,472) shall be transferred to the said fund before the due date.

It may be noted that upon the transfer of dividend to Investor Education & Protection Fund, members lose their right to claim such dividend. Members are requested to claim the amount of unclaimed dividend for the year 2004-2005 onwards on or before the due date failing which the said amount shall be transferred to the above mentioned fund.

BASMATI RICE SEGMENT

During the financial year 2010-2011, the sales of basmati rice increased to Rs.3702 Crore from Rs.3668 Crore in the immediately preceding previous year.

The Company is currently undergoing an expansion and modernization plan. At the beginning of the financial year the Company had a total installed capacity of 103 TPH including the leased capacity of 42 TPH, which was phased out during the year. The company is modernizing and expanding its existing installed capacity of 37TPH.

Further the company has already installed new capacity of 22 TPH which has started commercial production w.e.f. 01.10.2010. The balance capacity is expected to start commercial production during the current financial year i.e., 2011-12. With the successful implementation of these projects, we expect to substantially improve the operational efficiency.

WIND POWER SEGMENT

Your Company has wind farms in the States of Rajasthan, Maharashtra, Tamilnadu and Gujarat and its installed aggregate capacity is 46.1 MW. During the Financial year 2010-2011, revenue from the segment was Rs.22.60 Crorc.

PAYMENT OF COMMISSION ON THE NET PROFITS TO SHRI SANJAYJHUNJHUNWALA, CHAIRMAN OF THE COMPANY.

Under the Provisions of section 309 of the Companies Acts, 1956 and clause 86 of the Articles of Association of the Company, the Company is willing to pay the commission to the chairman of the Company on the net profits of the Company to be computed in the manner laid down under section 349 of the Companies Act, 1956 as remuneration to him for his valuable services to the Company.

Accordingly, Board of Director of the Company in their meeting held on 21st May, 2011 has accorded their approval for payment of commission ot an amount not exceeding .1% of the net profits of the Company to the chairman subject to approval of the shareholders of the Company; a requisite resolution has been put in the notice of the ensuing Annual General Meeting for approval of the Members of the Company seeking approval of the shareholders of the Company.

CREDIT RATING

Credit and Analysis Research Ltd. (CARE) has issued rating of CARE "A"(Single A) to long term facilities and short term banking facilities. Further CARE has assigned a rating of "PRl "to short term debt (including CP, Mibor Linked Bonds) for an amount of Rs.1400 crores in addition to rating of "CARE A" to the Non Convertible Debentures.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A report on the management discussion and analysis is annexed hereto and forms part of this report.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of. Corporate Governance. A report on Corporate Governance as stipulated under clause 49 of the Listing Agreement entered with the Stock Exchanges forms part of the Annual Report. A certificate to that effect has been obtained from Statutory Auditors of the Company and is annexed to this Report.

ENVIRONMENTAL ASPECT AND SOCIAL RESPONSIBILITY

The Company continues to show its commitment for improvement in all aspects of the environment and pays special emphasis for plantation and preservation of trees, development of gardens in the vicinity of the factory and office premises. We pay full attention to promote, improve and maintain our responsibility to the society. The Company is also setting up a rice husk based power plant to avail carbon credits

DIRECTORS

Dr. ING N.K. Gupta and Shri K.D. Ghosh, Directors of the Company, will retire by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting. A brief resume of the Directors seeking re-appointment, their expertises etc. are given in the notice to the ensuing Annual General Meeting.

AUDITORS

M/s P.K. Lilha & Co., Chartered Accountants, Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.They have indicated their willingness to accept re-appointment. In terms of Section 224A of the Companies Act, 1956, their re- appointment needs to be approved by the members and their remuneration has to be fixed.

AUDITORS' REPORT

The Notes on Accounts referred to the Auditors' Report are self explanatory and do not call for any further comments.

DIRECTORS'RESPONSIBILITYSTATEMENT

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

I. In preparation of the annual accounts, the applicable accounting standards have been followed along with the proper explanations relating to material departures, if any.

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

III. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act for safeguarding the assets of the Company and for preventing and detecting the fraud and other irregularities.

IV. The Directors have prepared the annual accounts on a going concern basis.

PUBLIC DEPOSITS

The Company has neither invited nor accepted any public deposits during the year under review.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and the other informations are set out in annexure to the Directors' report. However having regards to the provisions of Section 219(l)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary of the Company.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Your company strives hard to take all measures to conserve energy and use the latest technology. The particulars relating to energy conservation, technology absorption, foreign exchange as required to be disclosed under section 217(l)(e) of the Companies Act,1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988 are annexed as Annexure A and forms part of this Report.

ACKNOWLEDGMENT

Your Directors would like to thank all the stakeholders and also place on record their appreciation for the assistance and co- operation received from our bankers, government authorities, employees, vendors and members during the year under review. Your Directors are quite optimistic for support to be extended by all in the years to come.

For and on behalf of Board of Directors

(Sandip Jhunjhunwala) (A. Chatterjee)

Vice Chairman &Managing Director Director

Place: New Delhi

Date: 21 May, 2011


Mar 31, 2010

The Directors have plcasure in presenting the 16th Board Report along with the Audited Financial Results for the year ended 31st March 2010.

Summarised Financial Results: (Rs.in Lasc)

Particulars 2009-2010 2008-2009

Sales 369,323 244,823

Other Income 970 386

Total 370,293 245,209

Profit Before Interest and Depreciation 61,147 44,944

Less: Interest 34,825 33,283

Less: Depreciation 2,139 2,129

Profit Before Taxation 24,183 9,532

Provision for Current Taxation 8,402 3,360

Provision for Fringe Benefit Tax - 8

Prior Period Tax Payments 65 71

Profit after Taxation 15,717 6,093

Add- Balance Brought Forward 309 1,742

Amount Available for Appropriation 16,026 7,835

Less - Interim Dividend on Equity Share 319 76

Less-DividendTaxonlnterimDividcnd 54 -

Less - Proposed Dividend 799 449

Less - Dividend Tax on above 136 76

Less - Short Provision for Dividend & 35 -

Dividend Tax

Less - Transfer to Debenture 230 -

Redemption Reserve

Less - Transfer to General Reserve 14,000 7,000

Balance Carried to Balance Sheet 454 309



FINANCIAL PERFORMANCE

During the year under review your Company has achieved a turnover of Rs. 3693 Crore as against Rs. 2448 Crore in previous vear thereby registering an overall growth of over 51% in the year. This was a result of increased volumes and realizations in the basmati rice segment in domestic market as well as in international market. The segment wise performance of the company are highlited below.

BASMATI RICE SEGMENT

During the financial vear 2009-2010, there was an increase in sales of basmati rice to Rs. 3668 Crore from Rs. 2425 Crore in the immediately preceding previous year thereby registering a growth of 51%.

During the vear, the Company increased its basmati rice processing capacity from 79TPH to 103TPH by acquiring on lease basis a processing capacity of 24TPH in Punjab. The Company is in process of modernising and expanding rice processing capacity at unit no. 1 in Bawal. We are also setting up our third unit at Bawal. We expect to substantially improve the operational efficiency.

WIND POWER SEGMENT

Your Company has wind farms in the States of Rajasthan, Maharashtra, Tamilnadu and Gujarat and its installed aggregate capacity is 46.1 MW

During the financial year 2009-2010, this segment showed an increase in revenue by 8.69% i.e. Rs. 25 Crore from Rs. 23 Crore in the immediately preceding year.

DIVIDEND

During the vear under review, the company declared and distributed interim dividend of 10 %, i.e. Re. 0.10 on face value of Re. 1 each aggregating to Rs. 318.97 lacs. In addition to the interim dividend the Board proposed and recommended a final dividend of 20% i.e., Re. 0.20 on face value of Re. 1 each. Further on 29th July, 2010, Company has issued/allotted 63,86,56,636 equity shares under the rights issue of the Company to the existing equity shareholders of the Company, thus total final divided comes to Rs. 1915.96 lacs, and the total dividend for the financial year ended on 31st March, 2010 comes to @30% i.e. Re. 0.30 per share is Rs. 2234.93 lacs. In addition to dividend to equity shareholders, Board of Directors have also proposed and recommended a dividend @ 4%, i.e. Rs. 4/- each on the preference share having face value of Rs. 100/- each to the preference shareholders aggregating to Rs.160 lacs for the financial year 2009-10.

UNCLAIMED / UNPAID DIVIDEND

Pursuant to the provision of Section 205A read with Section 205C of the Companies Act, 1956, if any dividend remains unpaid / unclaimed for a period of seven years from the date of its declaration, the same shall be transferred to "Investor Education & Protection Fund" established by the Central Government. It is to be noted that once the dividend is transferred to this fund,

the shareholder loses his right of claim over it. The Company has during the year under review transferred a sum of Rs. 22498/- as unclaimed dividend for the year 2002-2003 to the said fund. Members are requested to claim the amount of Unpaid/unclaimed dividend for the year 2003-2004 onwards on or before the due date failing which the said amount shall be transferred to the above mentioned fund.

EXTENSION OF REDEMPTION PERIOD OF 4% NON CONVERTIBLE REDEEMABLE PREFERENCE SHARES

The Company had issued 40,00,000, 8% Non Convertible Redeemable Preference Shares of Rs. 100 each on 30.06.2003 for a period of 12 years. Redemption of the Preference Shares was due on 30.06.2015. The Board of Directors of the Company in their meeting held on 27th October, 2003 had reduced the rate of interest of Non Convertible Redeemable Preference Shares from 8% to 4 % with effect from date of allotment of Preference Shares.

The Board of Directors of Company have received written consent from all the holders of Preference Shares for extension of redemption period of Preference Shares from 30.06.2015 to 30.06.2022. The Board of Directors of the Company have recommended to the equity Shareholders of the Company to give their approval for extension of redemption of Preference Shares. The resolution to this effect is incorporated in the Notice of the ensuing Annual General Meeting for approval of the members of the company.

CREDIT RATING

Credit and Analysis Research Ltd. (CARE) has issued CARE "A"(Single A) rating to Non Convertible Debentures (NCDs) issued by the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A report on the management discussion and analysis is annexed hereto and forms part of this report.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance. A report on Corporate Governance as stipulated under clause 49 of the Listing Agreement entered with the Stock Exchanges forms part of the Annual Report. A certificate to that effect has been obtained from Statutory Auditors of the Company and is annexed to this Report.

ENVIRONMENTAL ASPECT AND SOCIAL RESPONSIBILITY

The Company continues to show its commitment for improvement in all aspects of the environment and pays special emphasis for plantation and preservation of trees, development of gardens in the vicinity of the factory and office premises. We pay full attention to promote, improve and maintain our responsibility to the society. The Company is also setting up a rice husk based power plant to avail the carbon credits.

DIRECTORS

Shri Sanjay Jhunjhunwala and Shri A. Chatterjee, Directors of the Company will retire by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting. A brief resume of the Directors seeking re-appointment, their expertise etc. are given in the notice to the ensuing Annual General Meeting.

INCREASE IN THE REMUNERATION PAYABLE TO SHRI SANDIP JHUNJHUNWALA, MANAGING DIRECTOR OF THE COMPANY.

During the year upon the recommendation of Remuneration Committee of the Company, Board of Directors had recommended to the Shareholders of the Company to increase the Remuneration payable to Sh. Sandip Jhunjhunwala, Managing Director of the Company from Rs. 60,00,000 per annum CTC to Rs. 3,00,00,000 per annum CTC (inclusive of all perquisites) w.e.f. 1st February, 2010 for remaining period of his tenure i.e. till 29th June, 2013. The Company has taken necessary approval from Shareholders of the Company and filed necessary e-forms with Ministry of Corporate affairs.

AUDITORS

M/s P.K.Lilha & Co., Chartered Accountants, Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. They have indicated their willingness to accept re-appointment. In terms of Section 224A of the Companies Act, 1956, their re-appointment needs to be approved bv the members and their remuneration has to be fixed.

AUDITORS REPORT

The Notes on Accounts referred to the Auditors Report are self explanatory and do not call for any further comments.

DIRECTORS RESPONSIBILITY STATEMENT

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

- In preparation of the annual accounts, the applicable accounting standards had been followed along with the proper explanations relating to material departures, if any.

- 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 the affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.

- The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act for safeguarding the assets of the Company and for preventing and detecting the fraud and other irregularities.

- The Directors have prepared the annual accounts on a going concern basis.

PUBLIC DEPOSITS

The Company has neither invited nor accepted any public deposits during the year under review.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and the other informations are set out the annexure to the Directors report. However having regards to the provisions of Section 219(l)(b) (iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary of the Company.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Your company strives hard to take all measures to conserve energy and use the latest technology. The particulars relating to energy conservation, technology absorption, foreign exchange as required to be disclosed under section 217(l)(e) of the Companies Act,1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors ) Rules,1988 are annexed as Annexure A and forms part of this Report.

ACKNOWLEDGMENT

Your Directors would like to thank all the stakeholders and also place on record their appreciation for the assistance and co- operation received from our bankers, government authorities, employees, vendors and members during the year under review. Your Directors are quite optimistic for support to be extended by all in the years to come.

For and on behalf of Board of Directors

(Sandip Jhunjhunwala) (A. Chatterjee) Vice Chairman & Managing Director Director

Place: New Delhi Date: 19 August, 2010

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