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Directors Report of Tarai Foods Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 25th Annual Report, together with the audited statement of accounts of the Company for the year ended 31st March, 2015.

1. Statement of Company Affairs:

a. Financial Results & Performance:

The performance of the Company for the financial year ended 31st March, 2015 is summarized below:

Particulars Financial Year ended 31st March, 2015 Financial Year ended

31st March,2014

(Rs. In lacs) (Rs. In lacs)

Gross Revenue 211 196

Operating Profit before Interest, Financial (13) (6) Charges and Depreciate

Less: Interest and Finance Charges 0.07 0.10

Profit/(Loss) before Depreciation (13) (6)

Less Depreciation 49 51

Profit/(Loss) for the year (62) (57)

Exceptional Items (10) 0.00

Net Profit/(Loss) for the year (72) (57)

Less provision 0.00 0.00 for Tax Extra Ordinary Income (net of tax expense 1084 0.00

Net Profit/(Loss) after Taxation 1012 (57)

The Company was in its Twenty Fifth year of operations. During the period under review, the Company recorded an increase in the Gross revenue from Rs. 196 Lacs to Rs. 210 Lacs. However, the losses before the exceptional and extra-ordinary items increased from 57.21 lacs to 61.69 lacs. The directors are hopeful of better performance in the next year.

Transfer to Reserves:

The company has not transferred any amount to Reserves of the Company during the financial year under review.

Dividend:

No dividend is recommended on the equity shares of the Company for the year ended 31st March, 2015 as the financial position of the company does not allow it to do so.

Material changes and commitments subsequent to the Balance sheet:

Dr. Ram ply are Singh was re-appointed as Whole time Director of the Company for a period of 5 years w.e.f. 1st July, 2015. His appointment is subject to approval by the members in the ensuing Annual General Meeting of the Company except this there was no changes occurred in the Company subsequent the closing off financially ear till the signing of the Board' report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT, REVIEW OF OPERATIONS DURING THE YEAR & FUTURE PLANS

(i) Industry structure and developments.

Indian food processing industry is widely recognized as a sunrise industry, having huge potential for uplifting agricultural economy, creating of large scale processed food manufacturing and food chain facilities and the resultant generation of employment and export earnings. Indian food industry is expected to growth US$ 280 billion by 2015 and generate an additional employment for approximately8.2 million people.

Mushroom farming is practiced in more than 100 countries and its production is increasing at an annual rate of 6-7% presently. World production of mushroom is over 25 million tons as per claims of Chinese Association of edible mushrooms. Indoor cultivation of mushrooms utilizes the vertical space and is regarded as the highest protein producer per unit area and time – almost 100 times more than the conventional agriculture and animal husbandry. This high tech horticulture venture has a promising scope to meet the food shortages without undue pressure on land . In India, mushroom production shot up from near 5000 tons in 1992 over 1 lac tons in 2010. India produces about 600 million tons of agricultural waste annually and a major part of it are left out to decompose naturally for burnt in citu. This can effectively be utilized to produce highly nutritive food unlike mushrooms and spent mushroom substrate can be converted into organic manure for field crops. Mushroom growing is highly labour oriented venture and two factors, i.e, availabilities of raw material and labour make mushroom growing economically profitable in India. On the export front also, for the first time during 1994 India not only figured in the US imports but emerged as the IInd largest exporter of the canned mushrooms replacing Taiwan. Now a few commercial mushroom units are exporting canned mushrooms to the Americans, European and other countries regularly.

(ii) Opportunities and Threats. Opportunities

Foods and vegetables -fast growing sector

Fruits and vegetables are one of the most important and fast growing sub-sectors of the food processing industry. Over the last few years, there has been a positive growth in ready-to-serve beverages, fruit juices and pulps, dehydrated and frozen fruits and vegetable products, tomato products, pickles, convenience veg spice pastes, processed mushrooms and curried vegetables. The demand has increased because of the factors like consumption by nuclear families, working women, students and single employees staying alone. There are abundant opportunities in expanding the export market because of good international demand for certain fruits and vegetable products. The Indian food processing industry is primarily export oriented. India's geographical situation gives it the unique advantage of connectivity to Europe, the Middle East, Japan, Singapore, Thailand, Malaysia and Korea.

Macro-economic as well as industry specific (FMCG and Packaged Food) indications point to enduring buoyancy in the domestic market, while the international geographies in which your Company operates are likely to be stable as well. Changing demographics (young, higher disposable income, experimental, urbanization, willingness to spend) further fuelled by trends like a greater awareness of health and nutrition on one hand and more hedonism (especially the new' affluent' generation) is rapidly enlarging the opportunity.

Mushrooms:

Development trends of Mushroom industry is based on the increasing consumer consciousness and demand for nutritious quality and organic products in domestic and international market. Increasing interest in protection of environment from the industrial pollution and environment friendly progress in mushroom production and processing technologies resulting in tremendous growth in the productivity and production of mushrooms.

Strength:-

Mushrooms are grown seasonally as well as state-of-art environment controlled Crop room in the commercial units. It is highly labour oriented venture and labour availability is no constraint in the vicinity of Tarai Foods and two factors that is availabilities of raw materials and labour make mushroom growing economically profitable in this region. Moreover, Tarai foods Ltd. Rudrapur is located in the bowl of raw materials like Wheat Straw, Sugar cane Bagasse & Chicken Manure required for composting. Besides, the moderate climate of the Tarai region is well suited to mushroom production as temperature does not as high alike other parts of the country.

Awareness about food and medicinal values of mushrooms increasing quantitative use of mushrooms in the country thus creating better market for a product like fresh and processed mushrooms. There is increasing market for post harvest products like pickles or soup powder of mushrooms.

Threats

- Uncontrolled price structure

When there is a glut in the market, the price of certain food items falls down considerably but as the demand increases or there is shortage of those food items in the market the price rises up with a vast variation. Thus there is always an uncertainty in market prices of most of the food items which reduces the amount of net profit and this discourages the manufacturers/ producers of these food items. This problem gets aggravated during peak production months, also because there is no minimum support price from the Govt.

- High transportation charges:

Although, agro and animal wastes are available in plenty in India but their availability are not evenly distributed. Due to diversified climate and topography of land, different kinds of crops are raised in different parts of the Country and production/ manufacture have to pay heavy transport charges. The hike in diesel/petrol prices from time to time aggravates this problem.

- Commercial rate of electricity tariff:

Similarly, both small and big production/ manufacture have to pay electricity charges at commercial rate, although mushroom farming is an agricultural activity. It has been highlighted by the concerned scientific community during scientific gatherings, seminars, meetings etc. many times, but no relief has been given. This has led to high cost of production due to increased capital as well as recurring expenditure on production/manufacturing affecting its competitiveness in world markets.

- Competition: e.g. –Availability of canned Chinese mush roomatlower price.

- High cost of energy tariff for year round production though the mushrooms have been included as one of the agricultural crops.

- Unorganized production and sale particularly by seasonal farmers resulting in glut in market during winter months. This results in price cut in the period.

- Lack of modern facilities to produce quality compost, casing material spawn and processed products. TFL is going to improve its facilities in this regard.

To address these risks, the Company has a single point source supplier of Frozen/IQF (Individually Quick Frozen products to the customers as per their requirements with high quality products at a lower cost. Though the competition is fierce, the goodwill and the quality of the products offered by the Company are great plus factors and the Company expects to overcome the competition. The Company had expanded its product line both horizontally as well as vertically.

(iii) Segment wise & Product' Wise performance:

The Company operates in a single segment. The product wise performance is as under:

Processed Foods

- Fresh Mushrooms

- Frozen Peas

- Mushroom Spawn

- Frozen sweet corn

Product - wise performance Sale of Finished Goods

Description Current Year Previous Year

Qty.(in MTs) Value Qty. (in Rs. Value in lacs>

Fresh Mushrooms 153.65 177.77 88.32 96.91

Frozen Peas 61.27 19.01 230.12 82.66

Frozen sweet corn_ 10.63 04.79 15.38 07.04

Mushroom Spawn 8.73 05.45 5 04.06

The company has completely diversified in Mushroom growing in artificially controlled temperature setting. It has been successful in creating capacities of – toady for Mushroomand is hopeful of expanding it to 1tonadayinnearfuture.

The overall current year's production and realizations in Frozen Vegetable category has increased. The Company hopes to continue with the increasing trends.

(iv) Outlook:

Food Processing Industry is of enormous significance for India's development because of the vital linkages and synergies that it promotes between the two pillars of the economy, namely Industry and Agriculture. The growth potential of this sector is enormous and it is expected that the food production will double in the next 5 years and the consumption of value added food products will also grow at a fast pace. This growth of the Food Processing Industry will be of immense benefits to the economy raising agricultural yields, meeting productivity creating employment and raising the standard of very large number of people throughout the Country, specially, in the rural areas. Economic liberalization and rising consumer prosperity is opening up new opportunities for diversification in food processing sector.

The nature of the Indian food processing market and the experiences of successful Indian and MNC players indicate that this sector will grow substantially in future because of the following reasons:

1. Effective distribution network and supply chain

2. Product range that is customized to suit local market requirements.

3.Superior processing technology

4. Brand building and marketing

Management is consistently keeping close watch on the changing market scenario and the business strategy is reviewed regularly for achieving a consistent growth by meeting the tough international competition successfully.

(v) Risks and concerns:

Every business has inherent risks involved in it operations, which may be either external or internal. The external factors are market competition, availability of cheaper substitute products, Government policies regarding power tariffs and ongoing political and economic changes in the importing Country. The Company may not have much control over such factors; however it is important to address these risks & concerns to mitigate their overall impact on the business. Formal risk assessment and Management approach along with the regular monitoring mechanism in the Company ensures that these risks are duly addressed and well managed. High focus on safety of plant, its premises and people continuity and proactive Management of related business environment are essential for the risk management in the overall supply chain and business in general.

(vi) Internal control systems and their adequacy.

The Company has an adequate system of internal controls to ensure that all activities are monitored and controlled as well as transactions are authorized, recorded and reported correctly. The Company ensures adherence to all internal control policies and procedures as well as compliance with all regulatory guidelines, which are supplemented by internal audit regularly. The Audit Committee of the Board meets on quarterly basis and reviews the internal control systems as well as financial statements.

(vii) Discussion on financial performance with respect to operational performance:

The Company has diversified its operations into Mushroom growing in artificially controlled temperature setting and offers a wide range Frozen and IQF (Individually Quick Frozen) product range of peas, fruits/ vegetables as per the requirements of the customers, meeting strict quality & hygiene standards. Canned peas in various shapes and sizes are also available as per the customer requirement. The Company is a single point source of supplier of Frozen, IQF products to the customers as per their requirements.

(viii) Material developments in Human Resources / Industrial Relations front, including number of people employed The Company lays due emphasis on sound Human Resource Management practices and appraisal systems with focus on cordial employee relations to ensure higher level of productivity and operational efficiency. Adequate efforts have been made to strengthen and develop its human resources as a key strength through continuous straining inputs and focused development plan. son 31st March 2015,the total numbers of permanent employees in the Company were_13.

The belief that 'great people create great organizations' has been at the core of the Company's approach to its people. We continued to make significant investments for training in the areas of marketing excellence, customer service and building capabilities for organized retail trade.

b. Key Changes during the year:

1. Changes in the Nature of business: N

2. Changes during the year in Directors and KMP:

Dr. Ram pyare Singh was appointed as Chief Financial Officer of the Company w.e.f. 30th May, 2014 and Mr. Gurprit Singh Sandhu, Managing Director was re-designated as Key Managerial Personnel of the Company w.e.f. 14th February, 2015.

In accordance with the provisions of Section 152 of the Companies Act, 2013 Mr. Gurprit Singh Sandhu, retires by rotation at the ensuing Annual General Meeting of the Company and being eligible offer himself for the re-appointment.

3. Changes in the Subsidiaries, Joint Venture and Associate Company: The Company did not make any subsidiaries, Joint Ventures and Associate Company during the financially ear under review.

4. Details of the order passed by the Regulators/ Courts/ Tribunals: No order has been passed by the regulators, courts or tribunals impacting the going concern status and company's operation in future.

2. Directors:

The Board of Directors of the Company is duly constituted. During the year under review no director resigned from the directorship of the Company.

a. Composition and Meetings of the Board:

The Board Comprises of Mr. G.S Sandhu, Ms. Kiran Sandhu, Mr. Ram Pyare Singh, Mr. Vijay Jolly, Mr. Melvinder Singh Garewal and Mr. Hakam Singh Saini as on 31st March, 2015. The Board of Directors duly met Five times on 30/05/2014,14/08/2014,14/11/2014,14/02/2015 and 02/03/2015 in respect of which meetings proper notices were given and the proceedings were properly recorded. The details of the directors who attended the meetings are given separately in the Corporate Governance report annexed separately. The Board has adopted all the recommendations of Audit Committee.

b Composition and Meeting of Audit Committee:

The Audit Committee is duly constituted. The Audit Committee comprises of Mr. Vijay Jolly, Ms. Kiran Sandhu, Mr. Melvinder Singh Garewal and Mr. Hakam Singh Saini as the members of the Committee. The Audit Committee duly met Four (4) times on 30/05/2014,14/08/2014,14/11/2014 and 14/02/2015 during the financial year. The details of the Members who attended the meetings are given separately in the Corporate Governance report annexed separately.

c. Composition and Meeting of Nomination and Remuneration Committee:

The Nomination and Remuneration Committee comprises of Mr. VijayJolly, Ms. Kiran Sandhu, Mr. Melvinder Singh Garewal and Mr. Hakam Singh Saini as the members of the Committee. The Nomination and Remuneration Committee duly met twice (2) on 30/05/2014 and 14/08/2014 during the financial year. The details of the Members who attended the meetings are given separately in the Corporate Governance report annexed separately.

d. Composition and meeting of Stakeholders Relationship Committee:

The Stakeholders Relationship Committee comprises of Mr. Vijay Jolly, Ms. Kiran Sandhu, Mr. Melvinder Singh Garewal and Mr. Hakam Singh Saini as the members of the Committee. The Stakeholders Relationship Committee duly met once on 14/08/2014 during the financial year. The details of the Members who attended the meetings are given separately in the Corporate Governance report annexed separately.

e. Declaration by Independent Directors and their meeting:

The Company has received the requisite declarations under section 149(7) of the Companies Act, 2013 from each of the Independent directors at the time of their appointment stating that they meet the criteria of independence as mentioned under Section 149(6) of the Act. During the year under review, the Independent Directors of the Company met once on 14th August, 2014.

Training of Independent Directors:

The Company had provided suitable training to all the independent directors of the Company to familiarize them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company etc.

f. Policy on Director's appointment and remuneration:

The current policy is to have an appropriate mix of executive & non-executive and independent directors to maintain the independence of the board and separate it's functions of governance and management. The policy of the Company on Directors appointment and remuneration including the criteria for determining the qualifications, positive attributes, independence of a Director and other matters as provided under Section 178(3) of the Companies Act, 2013 is as per the terms laid down in the Nomination & Remuneration policy of the Company. The Nomination & remuneration Policy of the Company is annexed as Annexure1.

3. Auditors:

a. Statutory Audit: M/s Rattan Anil & Co., Chartered Accountants,, A-90, Gali No. 6,1st Floor, Madhu Vihar Market, PatparGanj Bus Depot., Delhi, Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible have offered themselves for re- appointment as Statutory Auditors of the Company to hold from the conclusion of 25th Annual General Meeting until the conclusion of 31st Annual General Meeting of the Company. The Company has also received the written consent of the auditor and certificate from them to the effect that their appointment, if made, would be in accordance with the provisions of Section 139 read with Section 141 of the Companies Act, 2013.

Board's explanation and Comments:

Auditor's Responsibility Statement read with Clause 13 on Note 22: The company has been repairing the plant on regular basis depending on the liquidity position as per the need of the hour. Extensive repairs are made to the plant and plant & machineries every year. The company has also filed a case with the High Court on Insurance Company towards this claim.

Auditor's responsibility Statement read with Clause 9 on Note 22: The company had entered into settlement with secured lenders and part payments have already been made to these lenders as per the terms ofthe settlement in the earlier years. Although all the secured lenders have already revoked the sanctioned Settlement. But the company has approached them again and is hopeful to clear the default as per the negotiated settlement. As per the discussions on the settlements, the interest are not payable to them on the original liability and Current provision of Interest due to the secured lenders along with Principal amount due to them at Rs. 2.40 Crs. (after taking into consideration the payment made towards the negotiated settlement) as per Books of Accounts is more than the settlement amount discussed with these lenders and in view of this, there is no fresh provision of interest made for the year under review in the Books of Accounts. Complete details have been provided in the clause 09 on note 22 which is self explanatory.

Auditor's responsibility Statement read with Clause 11 on Note 22: The company has approached the secured lenders for resettlement. Term Loan of IARC has been settled in full and final during the year under review. A payment of Rs. 1 cr. was made in earlier years to the secured lenders towards the negotiated settlement which stand revoked as on date. On fully settling the dues of these secured lenders as per the settlement, the company will be able to come out ofthe negative networth and also revive its operations fully. The company has also diversified in the field of Mushroom, growing it in artificially controlled temperature and is hopeful of revival of its operations fully.

Point No. (vii) (a) to the Annexure to the Auditor's Report:

The company has defaulted in depositing the dues with the Provident Fund Authorities due to the adverse financial condition but it has approached the Provident Fund Authorities to work out the plans so that the payments can be made to them in installments. It has already started making the payment to clear the Provident Fund dues. The company is hopeful to clear the entiredues in the near future The company has outstanding dues of around Rs. 8.37 lacs towards the sales tax demand. The company has taken up the steps to approach the relevant Authorities (including filing of appeal) for cancellation of demand of Rs. 5.11 lacs. Rest ofthe Sales Tax demand of Rs. 3.26 lacs has not been paid due to adverse liquidity position. The company is hopeful to clear the dues soon. Other points are self explanatory as given in various clauses on Note 22.

b. Secretarial Audit:

The Board has appointed M/s Santosh Ku. Pradhan, Practising Company Secretary as the Secretarial Auditor for the Financial Year 2014-15. The secretarial audit report as required under section 204 of the Companies Act, 2013 is annexed as Annexure 2 and forms part of this report.

Board's explanation and Comments:

The Company has tried to take on roll services of a Company Secretary as Key Managerial Personnel. However, since the company is going through severe liquidity crunch, it is difficult to persuade the applicants to work on a reasonable salary. However, the company is committed to employ Company secretary in near future.

4. Annual Return:

The extract of Annual return as provided under sub-section (3) of Section 92 is annexed as Annexure 3 and forms part of this report.

5. Vigil Mechanism: (Whistle Blower Policy)

A Vigil Mechanism / Whistle Blower Policy, pursuant to the provisions of Section 177(9) of the Companies Act, 2013 was approved by the Board. The vigil mechanism shall provide for adequate safeguards against victimization of employees and directors who avail of the vigil mechanism and also provide for direct access to the Chairperson ofthe Audit Committee, in exceptional cases.

Mr. Manjit Singh, Plant Manager was appointed as the Vigilance Officer to hear the grievances ofthe employees with any person in the company and takestepstoresolvetheissuesamicablyand report thesameto the Managing Director of the Companyand offences of serious nature maybe brought to the attention Mr. Vijay Jolly, Chairman of the Audit Committee of the Company who shall after hearing the concerned person award appropriate punishment to the offender.

6. Deposits:

During the year under review, your company has not accepted any public deposits in terms of the provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014.

7. Loans, Guarantees or investments:

The Company has not given any loan or provided anyGuarantees and has not made any investments during the financial year under review.

8. Contracts and arrangements with related parties:

The particulars of Contractsand arrangements with related parties referred to in sub section (1) of Section 188 in AOC-2 isannexed as Annexure'4 and forms part ofthisreport.

9. Corporate Social Responsibility:

The provisionsof Corporate Social Responsibility are notapplicable on theCompany.

10. Risk Management Policy:

Every business has inherent risks involved in it operations, which may be either external or internal. The external factors are market competition, availability of cheaper substitute products, Government policies regarding power tariffs and ongoing political and economic changes in the importing Country. The Company may not have much control over such factors; however it is important to address these risks & concerns to mitigate their overall impact on the business. Formal risk assessment and Management approach along with the regular monitoring mechanism in the Company ensures thattheserisksaredulyaddressed and well managed. High focus on safety of plant, its premisesand peoplecontinuityand proactive Management of related business environment are essential for the risk management in the overall supplychain and business in general.

11. Internal Financial controls:

The Company has an adequate system of internal controls to ensure that all activities are monitored and controlled as well as transactions are authorized, recorded and reported correctly. The Company ensures adherence to all internal control policies and procedures as well as compliance with all regulatory guidelines, which are supplemented by internal audit regularly. The Audit Committee of the Board meets on quarterly basis and reviews the internal control systems as well as financial statements.

12 Share Capital:

The Company has only one kind of Shares i.e. Equity shares with same voting rights. The Company has not issued any sweat equity shares during the financial year under review. The Company has not issued any further shares during the financial year under review. Further, during the year under review, the Company has not made any offer to buy back its shares.

13 Particulars of Employees:

Information in accordance with the provisions of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 isannexed as Annexure 5 and forms part of this report.

14. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

Information in accordance with the provisions of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 regarding conservation of energy, technologyabsorption and Foreign exchange earning & outgo of theCompany were given as per Annexure 6 to this report.

15. Corporate Governance report:

A Comprehensive report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report. Your Company has obtained a certificate from the Statutory Auditor regarding the compliance of conditions of Corporate Governance as Stipulated in the Clause 49 of the Listing Agreement and the same is annexed.

16. Formal Annual Evaluation of Board of its own performance and that of its Committees and Directors:

Our Company has prescribed required parameters to evaluate the performance of the Board and it's committees. It is always recognized that the Board comprises appropriatelyqualified and professional people with broad range of experience.

17. Disclosure under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013:

The details are as follows:

1. Number of Complaints of Sexual Harassment received in the year: Nil

2. Number of Complaints disposed during the year:N.A

3. No.of case spending for more than ninety days:Nil

4. No. of workshops or awareness programme against Sexual harassment carried out: Nil

5. Nature of action taken by the employee or District officer: N.A

18. Directors' Responsibility Statement:

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

1. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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

3. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of thisActfor safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

4. The Directors had prepared theannual accountson a 'goingconcern' basis;and

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

6. 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.

APPRECIATION:

We wish to convey our sincere thanks to the Shareholders and various agencies of the Central Government, State Governments, Financial Institutions, Company's Banker and Business Associates for their continued cooperation extended to the Company. We also wish to record our deep appreciation of the contribution made by the employeesat all levels.

By Order of the Board Tarai Foods Limited

Sd/-

Place: Rudrapur

Date: 14th August, 2015 Mr. G.S. Sandhu

Chairman

DIN: 00053527

Address: 118, Madan Lal Block,

Asian Games Village, New Delhi' 110049.


Mar 31, 2014

Dear Members,

Dear Members,Your Directors present the 24th Annual Report together with the Audited Financial Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS:

Particulars For the period For the period ended 31-03-2014 ended 31-03-2013 (Rupees in Lacs)

Gross Revenue 196 168

Operating Profit before Interest, (6) 20 Financial Charges and Depreciation

Less: Interest and Finance 0.20 0.17 Charges

Profit/(Loss) before (6) 20 Depreciation

Less: Depreciation 51 55

Profit/(Loss) for the year (57) (35)

Extra Ordinary Items 0 598

Net Proftt/(lLoss) for the year (57) 564

Less: Provision for Tax 0 0.00

Net Profit/!Loss) after Taxation (57) 564

REVIEW OF OPERATION:

The company has incurred the net loss of Rs. 57 lacs as compared to the loss of Rs. 35 Lacs incurred during the previous year. However, the gross revenue of the Company has increased to Rs. 196 Lacs as compared to Rs. 168 Lacs in the previous year. The Mushroom sales went down as compared to previous years sale but Frozen Peas turnover showed improvement.

In the year under review, the company has diversified into Mushroom growing in artificially controlled temperature setting. This year the company has processed 56 tonnes of Frozen Peas, processed small quantities of Frozen sweet corn to cater to the Institutional Market. Your Directors are hopeful of expanding the Mushroom capacities in near future to nearly 1 ton a day and also capture the mushroom market in a big way.

STATUS OF MAJOR LITIGATION:

During the year under review, IFCI Ltd. has filed winding up petition in Delhi High Court u/s433 (e) and 434 of the Companies Act, 1956 which is being contested by the Company. A counter claim of Rs. 55.33 Crores has been filed by the company against IFCI Ltd.

DIVIDEND:

The Company has incurred losses during the year under review and no dividend is recommended for declaration for the year ended 31st March, 2014,

AUDITORS:

M/s. Rattan Anil & Co, Chartered Accountants, A-90, Gall No. 6,1st Floor, Madhu Vihar Market, PatparGanj Bus Depot., Delhi, Chartered Accountants, Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and offer themselves for re-appointment.

The Company has received a written consent to act as the auditor and Certificate from the Auditors to the effect that their reappointment, if made, would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

DIRECTORS COMMENT ON AUDITOR'S QUALIFICATION:

Auditor's Responsibility Statement read with Clause 12 on Note 22: The company has been repairing the plant on regular basis depending on the liquidity position as per the need of the hour. Extensive repairs are made to the plant and plant & machineries every year. The company has also filed a case with the High Court on Insurance Company towards this claim.

Auditor's responsibility Statement read with Clause 9 on Note 22:The company had entered into settlement with secured lenders and part payments have already been made to these lenders as per the terms of the settlement in the earlier years. Although all the secured lenders have already revoked the sanctioned Settlement, But the company has approached them again and is hopeful to clear the default as per the negotiated settlement. As per the discussions on the settlements, the interest are not payable to them on the original liability and Current provision of Interest due to the secured lenders along with Principal amount due to them at Rs. 4,26,314,829/- (after taking into consideration the payment made towards the negotiated settlement) as per Books of Accounts is more than the settlement amount discussed with these lenders and in view of this, there is no fresh provision of interest made for the year under review in the Books of Accounts. Complete details have been provided in the clause 09 on note 22 which is self explanatory.

Auditor's responsibility Statement read with Clause 10 on Note 22: The company has approached the secured lenders for resettlement and payment of Rs. 2,05,70,000/-was made in earlier years to these secured lenders towards the negotiated settlement which stand revoked as on date. On fully settling the dues of the secured lenders as per the settlement, the company will be able to come out of the negative net worth and also revive its operations fully, The company has also diversified in the field of Mushroom growing in artificially controlled temperature and is hopeful of revival of its operations fully.

Point No. 9 to the Annexure to the Auditor's Report:

The company has defaulted in depositing the dues with the Provident Fund Authorities due to the adverse financial condition but it has approached the Provident Fund Authorities to work out the plans so that the payments can be made to them in installments. It has already started making the payment to clear the Provident Fund dues. The company is hopeful to clear the entire dues in the near future.

The company has outstanding dues of around Rs. 8.18 lacs towards the sales tax liabilities (excluding those with have been appealed against), out which sales tax demand of Rs. 7.30 lacs has been raised on account of late issue of Form F by the VAT Authorities at the branch. The company has take up the steps to approach the relevant Authorities (including filing of appeal) for cancellation of this demand. Rest of the Sales Tax demand of Rs. 3.26 lac has not been paid due to adverse liquidity position. The company is hopeful to clear the dues soon.

Other points are self explanatory as given i n various clauses on Note 22.

COST AUDITORS:

The Board of Directors of the Company has appointed M/s. Neeraj Sharma & Co., Cost Accountants having FRN 100466 In place of M/s. V.K. Dubey Company, Cost Accountants, as the Cost Auditor for conducting the Cost Audit of the Company for the financial year 2014-15. The Audit Committee the company have recommended for their appointment in accordance with Cost Audit Rules 2011 and relevant notification issued by the Ministry Corporate Affairs.

DIRECTORS:

The Board of Directors of the Company is duly constituted. During the year under review Mr. Hakam Singh was appointed as an Additional Director of Company w.e.f. 13th January, 2014 and is proposed to be regularized in the ensuing Annual General Meeting of the Company.

Ms. Kiran Sandhu, who has been appointed as Director of the Company retires by rotation and being eligible, offers herself for the re-appointment.

Mr. R.P. Singh was appointed as a whole time director of the Company effective from 1st July, 2013 in the board meeting held on 25th June, 2013. Forth he was also appointed as the Chief Financial Officer (CFO) of the Company in the board meeting held on 30th May, 2014.

FIXED DEPOSITS:

The Company has not accepted any fixed deposits in terms of Section 58 A of the Companies Act, 1956.

BUY BACK OF SHARES:

The Company has not made any offer of Buy Back of its shares during the period under review.

EMPLOYEES:

There are no employees whose particulars have to be submitted in accordance with provisions of Section 217(2A) of the Companies Act, 1956 read the Companies (Particulars of Employees) Rules, 1975.

CAPITAL STRUCTURE & STOCK EXCHANGE LISTING:

As on 31st March, 2014 the Company has the Authorised Share Capital of Rs. 335,000,000/- and the paid up share capital of Rs. 143,381,200/- your Company are presently listed at The Bombay Stock Exchange, Phironze Jeejeebhoy Towers, Dalai Street, Mumbai-400001. The Company has up-to-date listing fee to the Bombay Stock Exchange.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS & OUTGO:

The details of conservation of energy, technology absorption & foreign exchange earning & outgo of the Company were given as per Annexure 1 to report:

CASH FLOW ANALYSIS:

Incompliance with the provisions of Clause 32 of the Listing agreement, the Cash Flow Statement for the year ended 31st March, 2014 is annexed here

CORPORATE GOVERNANCE:

A Comprehensive report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

Your Company has obtained a certificate from the Statutory Auditor regarding the compliance of conditions of Corporate Governance as stipulated Clause 49 of the Listing Agreement and the same is annexed.

DIRECTORS' RESPONSIBILITY STATEMENT UNDER SEC. 217(2AA):

Your Directors hereby state that:

1. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating material departures;

2. Such accounting policies had been selected and applied consistently and judgments and estimates are reasonable and prudent so as to give a the and fair view of the profit or loss of the Company at the end of the financial year and of the profit or loss of the company for the that period;

3. Proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of Company Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The annual accounts had been prepared on a going concern basis.

APPRECIATION:

We wish to convey our sincere thanks to the Shareholders and various agencies of the Central Government, State Governments, Financial Institute Company's Banker and Business Associates for their continued cooperation extended to the Company. We also wish to record our deep appreciation the contribution made by the employees at all levels.

For and on behalf of the Board of Directors

Sd/- Place: Rudrapur Dr. R.P. Singh (Executive) Whole Time Director Date: 14/08/2014 DIN: 03615102 Add: 1/3/3 Phoolbagh, Pant Nagar, Udham Singh Nagar, 263145, Uttarakhand.

Sd/- Vijay Jolly (Director) DIN: 00080354 Add:180, Dayan and Vihar, New Delhi, 110092


Mar 31, 2013

Dear Members,

The Directors present the 23rd Annual Report together with the Audited Financial Accounts for the year ended 31st March, 2013. Financial Results

Particulars For the period ended For the period ended 31-03-2013 31-03-2012

Gross Revenue 168 14-3

Operating Profit before Interest, 20 (45)

Financial Charges and Depreciation

Less: Interest and Finance 0.17 0.14

Charges

Profit/(Loss) before 20 (45)

Depreciation

Less: Depreciation 55 55

Profit/(Loss) for the year (35)

Extra Ordinary Items 598

Net Profit/(Loss) for the year 564

Less: Provision for Tax

Net Profit/(Loss) after Taxation 564 (100)

The company has made a net profit (after the extra ordinary items) of Rs. 564 Lacs as compared to a loss of Rs. 100 Lacs during the previous year. Also, the gross revenue of the Company has Increased to Rs. 168 Lacs as compared to Rs. 143 Lacs in the previous year.

The Extra Ordinary items consisted of Liability of Rs. 1 cr., no longer payable along with provision of Interest of Rs. 4,99,10,283/- not payable on the working capital facilities from State Bank of Travancore written off on full and final settlement of the loan amount.

In the year under review, the company has diversified into Mushroom growing in artificially controlled temperature setting.

This year the company has processed 327 tonnes of Frozen Peas, processed small quantities of Frozen sweet corn to cater to the Institutional Market. Your Directors are hopeful of expanding the Mushroom capacities in near future to nearly 1 ton a day and also capture the mushroom market in a big way.

STATUS OF MAJOR LITIGATION:

During the year under review, IFCI Ltd. has served a notice dtd 15th February, 2013 through their advocates u/s 433 (e) and 434 of the Companies Act, 1956 for winding up of the company.

DIVIDEND

No dividend is recommended for declaration for the year ended 31st March, 2013.

AUDITORS

M/s. Rattan Anil & Co, Chartered Accountants, A-90, Gali No. 6,1st Floor, Madhu Vihar Market, PatparGanj Bus Depot., Delhi, Chartered Accountants, Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and offer themselves for re-appointment.

The Company has received a Certificate from the Auditors to the effect that their reappointment, if made, would be in accordance with the provisions of Section 224(1-B) of the Companies Act, 1956.

DIRECTORS COMMENTON AUDITOR''S QUALIFICATION

Point 3 (1) read with Clause 14 on Note 22: The company has been repairing the plant on regular basis depending on the liquidity position as per the need of the hour. Extensive repairs are made to the plant and plant & machineries every year. The company has also filed a case with the High Court on Insurance Company towards this claim.

Point 3 (2) read with Clause 11 on Note 22: The company had entered into settlement with secured lenders and part payments have already been made to these lenders as per the terms of the settlement in the earlier years. Although all the secured lenders have already revoked the sanctioned Settlement. But the company has approached them again and is hopeful to clear the default as per the negotiated settlement. As per the discussions on the settlements, the interest are not payable to them on the original liability and Current provision of Interest due to the secured lenders along with Principal amount due to them at Rs. 4,26,314,829/- (after taking into consideration the payment made towards the negotiated settlement) as per Books of Accounts is more than the settlement amount discussed with these lenders and in view of this, there is no fresh provision of interest made for the year under review in the Books of Accounts. Complete details have been provided in the clause lion note 22 which is self explanatory.

Point 4 read with Clause 11 on Note 22: The company has approached the secured lenders for resettlement and payment of Rs. 2,05,70,000/-was made in earlier years to these secured lenders towards the negotiated settlement which stand revoked as on date. On fully settling the dues of the secured lenders as per the settlement, the company will be able to come out of the negative networth and also revive its operations fully. The company has also diversified in the field of Mushroom growing in artificially controlled temperature and is hopeful of revival of its operations fully. Point No. 9 to the Annexure to the Auditor''s Report:

The company has defaulted in depositing the dues with the Provident Fund Authorities due to the adverse financial condition but it has approached the Provident Fund Authorities to work out the plans so that the payments can be made to them in installments. It has already started making the payment to clear the Provident Fund dues. The company is hopeful to clear the entire dues in the near future.

The company has outstanding dues of around Rs. 10.56 lacs towards the sales tax liabilities, out of which sales tax demand of Rs. 7.30 lacs has been raised on account of late issue of Form F by the VAT Authorities at the branch. The company has taken up the steps to approach the relevant Authorities for cancellation of this demand. Rest of the Sales Tax demand of Rs. 3.26 has not been paid due to adverse liquidity position. The company is hopeful to clear the dues soon. Other points are self explanatory as given in various clauses on Note 22.

CostAuditors:The Board of Directors of the Company have appointed M/sV.K. Dubey& Company, Cost Accountants, holding valid certificate of practice no. 00343 as the Cost Auditor for conducting the Cost Audit of the Company for the financial year 2013-14. The Audit Committee of the company have recommended for their appointment in accordance with Cost Audit Rules 2011 and relevant notification issued by the Ministry of Corporate Affairs. DIRECTORS

Mr. Ram Pyare Singh who was appointed an additional director of the Company w.e.f 10th April, 2012 was regularized as Director in the Annual General Meeting held on 29th September, 2012 and was further appointed as Whole Time Director w.e.f. 1st July, 2013.

Mr. Melvinder Singh Garewal who was appointed as an Additional Director of the Company w.e.f. 13th March, 2013 and is proposed to be regularized in the ensuing Annual General Meeting.

Mr. G.S. Sandhu was re-appointed as Managing Director of the Company for a period of 5 years w.e.f. 26th June, 2013. Mr. Vijay Jolly, who has been appointed as Director of the Company retires by rotation and being eligible, offers himself for re- appointment.

FIXED DEPOSITS

The Company has not accepted any fixed deposits in terms of Section 58A of the Companies Act, 1956.

BUYBACK OF SHARES:

The Company has not made any offer of Buy Back of its shares.

EMPLOYEES

There are no employees whose particulars have to be submitted in accordance with provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

STOCK EXCHANGE LISTING

The shares of your Company are presently listed at The Stock Exchange, Phironze Jeejeebhoy Towers, Dalai Street, Mumbai- 400 001. The Company has paid the up-to-date listing fee to the Mumbai Stock Exchange. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS & OUTGO:

The details of conservation of energy, technology absorption & foreign exchange earning & outgo of the Company were given as per Annexure 1 to this report:

CORPORATE GOVERNANCE

A Comprehensive report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

Your Company has obtained a certificate from the Statutory Auditor regarding the compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement and the same is annexed.

DIRECTORS'' RESPONSIBILITY STATEMENT UNDER SEC. 217(2AA)

Your Directors hereby state that:

1. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relatingto material departures;

2. Such accounting policies had been selected and applied consistently and judgments and estimates are reasonable and prudent so as to give a true and fair view of the profit or loss of the Company at the end of the financial year and of the profit or loss of the company for the that period;

3. Proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The annual accounts had been prepared on a going concern basis. APPRECIATION

We wish to convey our sincere thanks to the Shareholders and various agencies of the Central Government, State Governments, Financial Institutions, Company''s Banker and Business Associates for their continued cooperation extended to the Company. We also wish to record our deep appreciation of the contribution made by the employees at all levels.

For and on behalf of the Board of Directors

Sd/- Sd/-

Dr. R.P.Singh Vijay Jolly

Executive Director Whole Time Director

DIN: 00080354

Place: Rudrapur DIN: 03615102

Date: 26th August, 2013


Mar 31, 2011

The Directors present the 21st Annual Report together with the Audited Financial Accounts for the year ended 31st March, 2011

Financial Results

Particulars For the period For the period ended ended 31-03-2011 31-03-2010

Gross Revenue 169 330

Operating Profit before Interest, (46) 19 Financial Charges and Depreciation

Less: Interest and Finance 0.07 0.35 Charges

Profit/(Loss) before (46) 18 Depreciation

Less: Depreciation 55 55

Profit/(loss) for the year (101) (37)

Extra Ordinary Items 6 - (PROVISIONS REVERSED)

Net Profit/(Loss) for the year (95) (37)

Less: Provision for Tax - -

Net Profit/(Loss) after Taxation (95) (37)

The company had suffered a loss of Rs. 101 Lacs as compared to a loss of Rs. 37 Lacs during the previous year. Also, the gross revenue of the Company has reduced to Rs. 169 Lacs as compared to Rs. 330 Lacs in the previous year. Your Directors are hopeful of better performance in the coming year.

DIVIDEND

Due to the losses incurred by your Company, no dividend is recommended on the equity shares of the Company.

AUDITORS

M/s. Rattan Anil & Co, Chartered Accountants, A-90, Gali No. 6, 1st Floor, Madhu Vihar Market, Patpar Ganj Bus Depot., New Delhi, Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and offer themselves for re- appointment. The Company has received a Certificate from the Auditors to the effect that their reappointment, if made, would be in accordance with the provisions ofSection224(l-B)of the Companies Act, 1956.

Comments on Auditors Remarks:

Point 3 (1) read with Note 6 (b) to Schedule 19: The financial position of the company is not well and hence the company is not in a position to spend on actuarial valuation of gratuity as on the Balance Sheet date. Point 3 (2) read with Note 5 on Schedule 20: The company has written to the Banker to the Issue to transfer the unclaimed application money to the Investor Education and Protection Fund as per the procedure.

Point 3 (3) read with Note 13 on Schedule 20: The company has been repairing the plant on regular basis depending on the liquidity position as per the need of the hour. Extensive repairs are made to the plant and plant & machineries every year before the main pea season. The company has also filed a case with the High Court on Insurance Company towards this claim.

Point 3 (4) read with Note 10 on Schedule 20 : The company had entered into settlement with secured lenders and part payments have already been made to these lenders as per the terms of the settlement. Although IFCI Ltd. and Standard

Chartered Bank have already revoked the sanctioned Settlement. But the company is hopeful to clear the default as per the negotiated settlement and reinstate the settlement terms again. As per the terms of the settlements, the interest are not payable to them on the original liability and hence the interest has not been provide for.Point 4 read with note 11 on schedule 20: The company has entered into the negotiated settlement with the lenders and has already made a payment of around Rs. 2 crores to them. On fully settling the dues of the secured lenders as per the settlement, the company will be able to come out of the negative networth and also revive its operations fully.

DIRECTORS

Pursuant to Section 256 of the Companies Act 1956, Mrs. Kiran Sandhu, Director of the Company retires by rotation and being eligible, offers herself for re-appointment.

FIXED DEPOSITS

The Company has not accepted any fixed deposits in terms of Section 58A of the Companies Act, 1956.

BUY BACK OF SHARES:

The Company has not made any offer of Buy Back of its shares.

EMPLOYEES

There are no employees whose particulars have to be submitted in accordance with provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

STOCK EXCHANGE LISTING

The shares of your Company are presently listed at The Stock Exchange, Phiroze Jeejeebhoy Towers, Dalai Street, Mumbai- 400 001. The Company has paid the up-to-date listing fee to the Mumbai Stock Exchange.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS & OUTGO:

The details of conservation of energy, technology absorption & foreign exchange earning & outgo of the Company are given as per Annexure 1 to this report:

CORPORATE GOVERNANCE

A Comprehensive report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

Your Company has obtained a certificate from the Statutory Auditor regarding the compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement and the same is annexed.

DIRECTORSRESPONSIBILITY STATEMENT UNDER SEC. 217(2AA)

Your Directors hereby state that:

1. In the preparation of the annual accounts, except wherever mentioned in the notes to the accounts or elsewhere, the applicable accounting standards had been followed along with proper explanation relating to material departures;

2. Such accounting policies had been selected and applied consistently and judgments and estimates are reasonable and prudent so as to give a true and fair view of the profit or loss of the Company at the end of the financial year and of the profit or loss of the company for the that period;

3. Proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The annual accounts had been prepared on a going concern basis..

APPRECIATION

We wish to convey our sincere thanks to the Shareholders and various agencies of the Central Government, State Governments, Financial Institutions, Companys Banker and Business Associates for theircontinued cooperation extended to the Company. We also wish to record our deep appreciation of the contribution made by the employees at all levels.



For and on behalf of the Board of Directors

Sd/- G.S. Sandhu Managing Director

Place: Rudrapur Date : 30/05/2011


Mar 31, 2010

The Directors present the 20 Annual Report together with the Audited Financial Accounts tor the year ended 31st March, 2010.

Financial Results (Rupees in lacs)

Particulars For the period For the period

ended 31-03-2010 ended 31-03-2009

Gross Revenue 330 263

Operating Profit before

Interest finance charges and Depreciation 18 48

Less: Interest & Finance Charges 0.35 808

Profit/{Loss) before Depreciation 18 (760)

Less : Depreciation 55 55

Net Profit (Loss) for the year (37) (815)

Less: Prior Year adjustments - -

Net Profit/(Loss) for the year (37) (815)

Less: Provision for Taxation - 0.19

Net Profit/(Loss) after Taxation (37) (816)



MANAGEMENT DISCUSSION & ANALYSIS REPORT, REVIEW OF OPERATIONS DURING THE YEAR & FUTURE PLANS :

Although the future of the (food processing industry is very bright but it is facing problems of poor infrastructural facilities at the moment viz. inadequate cold storage and refrigerated vehicles, erratic supply of electricity etc. There is high cost of transportation through refrigerated vehicles and demand for limited frozen vegetables and fruits have also made the products commercially unviable

Despite these conditions, in the year under review, the company could successfully increase its sale in LLP. and Delhi. The net turnover increased from Rs. 54.73 lacs to Rs. 112.35 lacs. However, the operating profit has reduced because of the increased power and fuel cost and major repairs of the plant and machineries. Currently, the focus of the company is to increase the turnover In the Institutional market.

The company has entered into negotiated settlement with the secured lenders. During the year under review, it could make a payment of around Rs . 143 Lacs to them. It defaulted in the further payments to them as per the schedule but is trying its best to honor the commitments. The settlements have not yet been revoked by the lenders.

Your company has been served with a notice dtd. 30.06.10 u/s 20 (1) of the Sick Industrial Companies (Special Provisions) Act, 1985 and BIFR Regulations, 1987 for Proposed winding up of the company. The promoter directors and the company is trying its best to come up with the funds and honor the commitments of settlement with the lenders.

DIVIDEND

Due to the losses incurred by your company, no dividend is recommended on the equity shares of the company.

AUDITORS

M/s. Jolly & Oberoi, 13, Hanuman Road, Connaught Place, New Delhi, Chartered Accountants, Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and they have expressed their unwillingness to continue as the statutory auditor of the Company and M/s. RATTAN ANIL & CO., A-90, Gall No.-6,1st Floor, Madhu Vihar Market, Patpar Ganj Bus Depot., New Delhi offer themselves for appointment as the statutory auditor of the Company to hold office from the conclusion of this Annual General Meeting till the next Annual General Meeting of the Company. The Company has received a Certificate from the Auditors to the effect that their reappointment, if made, would be in accordance with the provisions of Section 224 (1-B) of the Companies Act, 1956.

The remarks of the Auditors in their report read with notes attached to the accounts are self explanatory and therefore do not call tor any further comments.

COMMENTS ON AUDITORS REMARKS/ QUALIFICATIONS:

Point 3 (1) read with note 5 on schedule 20:

The Company has written to the Banker to the issue to transfer the unclaimed application money to the Investor Education and Protection Fund as per the procedure.

Point 3 (2) read with note 13 on schedule 20:

The company has been repairing the plant on regular basis depending on the liquidity position as well as as per the need of the hour. Since the main season of the company is from December to march, extensive repairs are made to the plant and the plant and machineries every year before that. The company has also filed a case with the High Court on Insurance company to settle the Insurance Claim.

Point 3 (3) read with note 10 on Schedule 20:

The company has already entered into settlement with the secured lenders and hence interest amounting to Rs. 6.09 crores has not been provided for till the date of settlement as according to the terms of settlements, these interest are not payable to them and also these settlements have not yet been revoked.

Point No. 9 (a) in Auditors Report :

The company is passing through a severe liquidity crunch. However, the efforts are being made to regularize the payment towards the provident Fund deposits with the PF Authorities. The company has already made some payment to the PF Authorities after the Balance Sheet date. Similary the company has also approached Sales Tax Authorities and is trying to settle the demand of Rs. 3.25 lacs still outstanding.

Point No. 4 read with note 11 on Sechedule 20:

The company has entered into negotiated settlement with the lenders and has already made a payment of around Rs. 2 crores to them. On fully settling the dues to the secured lenders as per the settlement, the company will be able to come out of negative networth and also revive its operations fully.

DIRECTORS

Pursuant to Section 256 of the Companies Act 1956. Mr. Narendra Kumar Bharti, Director of the Company retire by rotation and being eligible, offer himself for re-appointment.

FIXED DEPOSITS

The Company has not accepted any fixed deposits in terms of Section 58A of the Companies Act, 1956.

EMPLOYEES

There are no employees whose particulars have to be submitted in accordance with provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

STOCK EXCHANGE LISTING

The shares of your Company are presently listed at The Stock Exchange, Phiroze Jeejeebhoy Towers, Dalai Street, Mumbai-400 001.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS & OUTGO

The details of conservation of energy, technology absorption & foreign exchange earning & outgo of the Company are given as per Annexure 1 to this report :

CORPORATE GOVERNANCE

A Comprehensive report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

Your Company has obtained a certificate from the Statutory Auditor regarding the compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement and the same is annexed.

DIRECTORS RESPONSIBILITY STATEMENT UNDER SEC. 217(2AA) Your Directors hereby state that:

1. In (he preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

2. Such accounting policies had been selected and applied consistently and judgments and estimates are reasonable and prudent so as to give a true and fair view of the profit or loss of the Company at the end of the financial year and of the profit or loss of the company for that period;

3. Proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The annual accounts had been prepared on a going concern basis.

APPRECIATION

We wish to convey our sincere thanks to the Shareholders and various agencies of the Central Government, State Governments, Financial Institutions, Companys Banker and Business Associates for their continued cooperation extended to the Company. We also wish to record our deep appreciation of the contribution made by the employees at all levels.

For and on behalf of the Board of Directors

sd/-

Place: Rudrapur G. S. Sandhu

Date: 13/08/2010 Managing Director





 
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