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Directors Report of REI Agro Ltd.

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, 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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