annual report 2011-2012...along with the audited financial results for the year ended 31st march...
TRANSCRIPT
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REI AGRO LIMITED
Annual Report 2011-2012
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
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Contents
Corporate Information ........................................................................... 1
Directors’ Report ..................................................................................... 2
Management Discussion and Analysis .................................................. 7
Corporate Governance ............................................................................ 13
Auditors’ Report ....................................................................................... 25
Financials ................................................................................................... 28
Consolidated Financial Statements ........................................................ 53
Disclaimer
In this Annual Report we have disclosed forward-looking statements to enable investors to comprehend our prospects and take informed investment
decisions.This report and other statements- written and oral that we periodically make contain forward-looking statements that set out anticipated results
based on the management’s plans and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipate’,
‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’ and words of similar substance in connection with any discussion of future performance.
We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in our assumptions. The achievement
of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialse, or should underlying
assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should bear this in mind. We
undertake no obligation to publicly update any forward looking statements, whether as a result of new information, future events or otherwise.
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BOARD OF DIRECTORS
Shri Sanjay Jhunjhunwala Chairman
Shri Sandip Jhunjhunwala Vice Chairman cum Managing Director
Dr. ING N. K. Gupta
Shri A. Chatterjee Independent Non-Executive Directors
Shri K. D. Ghosh
COMPANY SECRETARY cum COMPLIANCE OFFICER
Shri Mandan Mishra
REGISTERED OFFICE
“ Everest House”
46C, Chowringhee Road,
15th fl oor, Room No. 15-B
Kolkata - 700071
CORPORATE OFFICE
311, B, C & D, 2nd Floor
DLF South Court, Saket
New Delhi-110017
AUDITORS
P. K. Lilha & Co.
Chartered Accountants
INTERNAL AUDITORS
S. Jaykishan
Chartered Accountants
PRINCIPAL BANKERS
UCO Bank
IDBI Bank Limited
Indian Overseas Bank
Corporation Bank
Allahabad Bank
State Bank of Bikaner & Jaipur
United Bank of India
Axis Bank
INDUSIND Bank
Dena Bank
Union Bank of India
State Bank of Patiala
Bank of Maharashtra
State Bank of Travancore
State Bank of India
Karur Vysya Bank
Central Bank of India
Infrastructure Development Finance Company Ltd.
Indian Renewable Energy Development Agency Ltd.
ICICI Bank, Hong Kong Branch
Dhanlaxmi Bank Limited
Lakshmi Vilas Bank Limited
Bank of Baroda
ING Vysya Bank Limited
The Jammu & Kashmir Bank Limited
REGISTRAR & SHARE TRANSFER AGENTS
Maheshwari Datamatics Pvt. Ltd
6th Mangoe lane, 2nd Floor,
Kolkata - 700001
Tel: + 91 33 22482248/22435029
Fax: +91 33 2248 4787
Email: [email protected]
Corporate information
}
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
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Dear Members,
Your Directors have pleasure in presenting the 18th Board Report
along with the Audited Financial Results for the year ended 31st
March 2012.
1 FINANCIAL PERFORMANCE (` In Lacs)
Particulars 2011-2012 2010-2011
Sales 422,548 372,435
Other Income 320 386
Total 422,868 372,821
Profi t Before Interest and
Depreciation and Amortisation
(PBIDTA)
83,572 77,575
Less: Interest 51,380 33141
Less: Depreciation 3,879 2,212
Profi t Before Taxation (PBT) 28,313 42,222
Provision for Current Taxation 5,650 13,975
Prior Period Tax Payments 40 1
Profi t after Taxation (PAT) 22,623 28,247
FINANCIAL REVIEWDuring the year under review your Company has achieved a
turnover of ` 4225 Crore as against ` 3724 Crores in the previous
year. An increase of 13.48% over the last year. However during
the year, net profi t of the Company is reduced to ` 226 Crores
in comparison to net profi t of 282 Crores in the previous year.
We have managed to increase our top line but due to increase in
interest cost bottom line was slightly pressed. The highlights of
the performance of each of the segments of your company are
highlighted later in this report.
2. DIVIDENDFor the year under review, the Board of Directors of the Company
have proposed and recommended a dividend of 50% i.e., Re. 0.50
on face value of Re. 1 each equity share, aggregating to ` 4789.92
lacs. In addition, Board of Directors have also proposed and
recommended a dividend @ 4%, i.e. ` 4/- each on the preference
share having face value of ` 100/- each to the preference
shareholders aggregating to `160 lacs for the fi nancial year 2011-
12. The fi nal dividend, if approved, will be paid within 30 days of
its declaration.
3. UNCLAIMED / UNPAID DIVIDEND (TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND)Pursuant to Section 205A read with Section 205C of the
Companies Act, 1956, unclaimed dividend which remains unpaid
for a period of seven years shall be transferred to Investor
Education & Protection Fund. Accordingly, the Company has
transferred all unclaimed dividend for the year 2003-2004 to the
said fund. Unclaimed dividend for the year 2004-05 (` 2,89,633)
shall be transferred to the said fund before the due date.
It may be noted that upon the transfer of dividend to Investor
Education & Protection Fund, members lose their right to claim
such dividend. Therefore Members are requested to claim the
amount of Unpaid/unclaimed dividend for the year 2004-2005
onwards.
4. TRANSFER TO GENERAL RESERVE Your Company proposed to transfer ` 14 Crore to General
Reserves out of the amount available for appropriation.
5. CONSOLIDATED FINANCIAL STATEMENTREI Agro group has reported a consolidated revenue of `
5382 crores for the fi nancial year ended on 31st March, 2012,
Consolidated profi t before tax stood at ` 445 crores and
consolidated Profi t after tax stood at ` 388 Crores. There have
been no consolidated fi gures available for the previous year as all
the subsidiary companies have started their business operations in
year 2011-12.
In accordance with the Accounting Standard AS-21 on
Consolidated Financial Statement read with Accounting Standard
AS-23 on Accounting for investment in Associates, your Directors
provide the Consolidated Audited Financial Statement in the
Annual Report.
However, in accordance with the general circular No. 2/2011
dated 8th Feb, 2011, issued by the Ministry of Corporate affairs,
Directors’ Report
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Government of India, the Balance Sheet, Profi t and Loss account
and other documents of the Subsidiary companies are not being
attached with balance sheet of the Company. However the
fi nancial information’s of the subsidiary Companies is disclosed in
the Annual report in compliance with the said circular. Company
will make available the said annual accounts and other related
information’s of the subsidiary companies upon request of any
member of the Company or its subsidiary company and same will
also be kept open for inspection by any member at the registered
offi ce of the Company and at subsidiary Company.
6. SUBSIDIARY COMPANIES Your Company has incorporated four (100 %) wholly owned
foreign subsidiary Companies in Dubai and Mauritius. Out of
which one wholly owned subsidiary is incorporated at Dubai Multi
Commodities Centre ( DMCC) Dubai in the name of REI Agro
Traders JLT, However later on name of the said subsidiary was
changed to “Ammalay Commoditiess JLT”. Other three 100 %
wholly owned subsidiaries were incorporated at Mauritius, namely;
Holy Stars Ltd, Auckland Holdings Ltd and Orient Agro (M) Ltd.
All the above subsidiary Companies have started their business
operations in the year under review.
7. BUSINESS SEGMENTSCompany operate in two Business segments i.e. Basmati Rice
Processing and Wind Power Generation. However, the Company
has discontinued the separate segment reporting for wind power
generation because the total revenue, profi t or the capital employed
in the wind power generation is less than 10 per cent threshold
limits of revenue, result, and assets, which is required for separate
reportable segment as provided in Accounting Standard 17 (AS
17 – Segment Reporting) issued by ICAI / Company (Accounting
Standards) Rules, 2006.
7.1 OPERATIONAL PERFORMANCE
During the fi nancial year 2011-2012, there was an increase in
sales of food product to ` 4200 Crore from ` 3702 Crore in the
immediately preceding previous year. An 13.45% increase over the
last year.
Due to continue efforts for modernizing and urge of expansion,
Company has reached the installed capacity of 118 TPH during
the year in comparison of 103 TPH in the previous year. With the
successful implementation of modernizing processes, we expect
substantial improvement in the overall operational effi ciency.
Exports performance
During the year under review, export sales of the Company
stood at ` 233 Crores. The company has taken several measures
to increase the export sales like incorporation several subsidiaries
in Dubai and Mauritius as direct presence will help us capitalize
on the opportunities in the international market. As you can see
there has been a shortfall in the export of the company during FY
2012. The shortfall in the export fi gure is primarily on account of
expedition of international launch of our brand. We have launched
Raindrops in the domestic markets and it has already emerged as
one of the largest brands in the organized space. Encouraged by
the performance of the Raindrops brand in the domestic market,
we have planned to expedite the international launch of the brand.
In order to prepare the market for the launch we had discontinued
the private label (Buyers brand) sale of our rice towards the end
of the fi nancial year. This has resulted in a reduction in our export
sales; however, with the launch of our brand in the current year
and the commencement of shipments on private label basis we are
confi dent of increasing our export.
7.2 WIND POWER PERFORMANCE
Company has its wind power generations farms in the States of
Rajasthan, Maharashtra, Tamil Nadu and Gujarat, having total
installed capacity of 46.1 MW. During the fi nancial year 2011-2012,
revenue from the wind power generation was of ` 23.64 Crore.
Wind power generation farm at Rajasthan, registered with UNFCC
and has earned revenue of ` 1.34 crores through sale of Carbon
Credits. Further the Company is in the process of registration
of its wind power generation farms situated at Tamil Nadu and
Maharashtra with UNFCC and will be able to earn signifi cant
number of carbon credits once these projects get registered.
8. CREDIT RATINGCredit and Analysis Research Ltd. (CARE) has upgrade the rating
as CARE “A+”(Single A Plus) assigned to( long term facilities)
Non Convertible Debentures (NCDs) issued by the Company.
Further Credit and Analysis Research Ltd. (CARE) has also issued
PR1+ ( PR One Plus) rating to the short term credit facilities of
the Company.
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9. MANAGEMENT DISCUSSION AND ANALYSIS REPORTA report on the management discussion and analysis is annexed
hereto and forms part of this report.
10. CORPORATE GOVERNANCEYour 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 certifi cate from the auditors of the company confi rming
compliances with the conditions of corporate governance as
stipulated under clause 49, is attached to this report.
11. ENVIRONMENTAL ASPECT AND SOCIAL RESPONSIBILITYThe 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 offi ce premises. We pay full attention
to promote, improve and maintain our responsibility to the society.
The Company is also setting up a rice husk based power plant
and Wind power generation farm of the Company situated at
Rajasthan, registered with UNFCC and the Company is also in the
process of registration of its other wind power generation farms
situated at Tamil Nadu and Maharashtra with UNFCC.
12. DIRECTORSIn accordance to the section 255 of the Companies Act, 1956
and Article 95 of the Article of Association of Company, Shri
Sanjay Jhunjhunwala and Shri A. Chatterjee, Directors of the
Company, will retire by rotation and being eligible offer themselves
for re-appointment at the ensuing Annual General Meeting. Your
Directors recommend their re-appointment.
A brief resume of the Directors seeking re-appointment, their
expertise etc. is given in the notice to the ensuing Annual General
Meeting.
13. AUDITORSM/s P.K.Lilha & Co., Chartered Accountants, Statutory Auditors
of the Company, holds offi ce 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 fi xed.
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 STATEMENTPursuant to requirement under Section 217 (2AA) of the
Companies Act, 1956, with respect to Directors’ Responsibility
Statement, it is hereby confi rmed 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 fi nancial year and of the profi t or loss of the Company
for that period.
• The Directors have taken proper and suffi cient care for the
maintenance of adequate accounting records in accordance
with the provision of the Companies Act for safeguarding
the assets of the Company and for preventing and detecting
the fraud and other irregularities.
• The Directors have prepared the annual accounts on a going
concern basis.
15. PUBLIC DEPOSITSThe Company has neither invited nor accepted any public deposits
during the year under review.
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16. PARTICULARS OF EMPLOYEESIn terms of the provisions of Section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975 as amended, the names and the other information’s
are set out in the annexure to the Directors report. However
having regards to the provisions of Section 219(1)(b)(iv) of the
said Act, the Annual Report excluding the aforesaid information(
annexure) is being sent to all the members of the Company and
others entitled thereto. Statement of particulars of employees and
other documents, if any, which are not annexed to this Report,
will be open for inspection for the shareholders at registered offi ce
of the Company during working hours for a period of 21 days
before the date of annual general meeting. Any member interested
in obtaining such particulars may write to the Company Secretary
of the Company.
17. SECRETARIAL AUDIT• Pursuant to Clause 47(c) of the Listing Agreement with
the Stock Exchanges, certifi cates, 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 confi rms 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 OUTGOYour 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. ACKNOWLEDGMENTThe Board acknowledge the assistance provided to the Company
by its bankers and also place on record their appreciation for
the assistance and co-operation received from our bankers,
government authorities, employees, stakeholders, vendors and
members during the year under review. Your Directors are quite
optimistic for support to be extended by all in the years to come.
For and on behalf of Board of Directors
(Sandip Jhunjhunwala) (A. Chatterjee)
Vice Chairman & Managing Director Director
Place: Kolkata
Date: 30 May, 2012
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ANNEXURE AConservation of energy: Review of business process and close coordination with plants has resulted in energy conservation. Some of the energy conservation measures taken during the year 2011-12 in the different areas are as under: i) Boiler effi ciency test has been carried out to ascertain the
boiler performance. Boiler feed pumps, FD and ID fans have been tested upon to arrive at energy savings.
ii) The lighting inventory has been collected and lighting load taken for a full day to ascertain the light load trend.
iii) Company has installed a rice Husk Based Turbine (cogeneration Power Unit) for captive use having 3 MW and 2.5 MW power generation capacities at unit I & II respectively, of the Company.
Form- AParticulars F.Y- 2011-12 F.Y- 2010-11
1. Electricity (A) Purchased
Unit (in KWH) 17,743,734 9,450,769Total Amount (in Rs.) 97,803,202 50,980,776Rate/Unit 5.51 5.39
(B) Own Generation (i) Through Diesel Generator
Unit (in KWH) 962,653 1,425,857Unit per Ltr of Diesel Oil 3.47 3.37Cost/Unit 11.26 10.60
(ii) Through Steam Turbine (Husk Based Turbine) Unit (in KWH) 3,903,930 1,614,480Husk/Unit/Unit (in KG) 1.54 1.42Cost/Unit 4.63 4.96
2. Coal (specify quantity and where used) Quantity (tonnes) Nil NilTotal Cost Nil NilAverage Rate Nil Nil
3. Furnance Oil Nil NilQuantity Nil NilTotal Cost Nil NilAverage Rate Nil Nil
4. Other/internal Generation Nil NilQuantity Nil NilTotal Cost Nil NilRate/ Unit Nil Nil
Technology absorption: i) Specifi c Areas in which R & D was carried out by the
Company: The company has its own laboratory for improving the quality
of its product and effi ciency of the processes. The Company is using nitrogen fl ushed packaging system to provide longer shelf life to its products.
ii) Benefi ts derived as a result of the above efforts: The company expects to decrease the percentage of broken
rice and get fi nished rice grains with better gloss and fi nish resulting in increased marketability.
iii) Future plan of action: It is proposed to continue to strengthen the in-house R & D
facilities. Technology absorption, adaptation and innovation efforts in brief, made towards improvement of quality and quantity of the product: The Company is constantly striving to improve the process, so as to reduce input costs and upgrade the quality of its product.Form ‘B’Technology Absorption 20121. Specifi c Area in Which R & D
carried out by the CompanyRice and Paddy Testing Laboratory
2. Benefi ts derived as a result of above R & D
Improvement in Quality
3. Future Plan of Action - 4. Expenditure on R & D (Rs. In Lacs)
2011-12 2010-11 a. Capital Nil Nilb. Recurring 15 18c. Total 15 18d. Total R & D 15 18
Expenditure as %
Of total Turnover
0.003% 0.005%
Benefi ts derived as a result of the above efforts:The Company has been able to improve the quality of its product.Foreign exchange earnings and outgo:*Total foreign exchange earned and used: Amount. (` In Lacs)Foreign exchange earned (Export of goods and interest earned)
22431.44
Foreign exchange outgo 3761.17Net foreign exchange earned 18610.26
* A detailed discussion on the export and international opportunities has been included in the Management Discussion Analysis.
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MANAGEMENTDISCUSSION AND ANALYSIS
I. ECONOMY OVERVIEW.The past year has registered some weakness in the economy;
the tone sets a rather positive view for the coming years, with
economic activity having ‘bottomed out’ and ‘a gradual upswing
being imminent’. However the recovery has been affected by
several factors in emerging markets, especially those in Asia, while
the advanced economies continue to face several challenges such
as high levels of unemployment and fi scal strains and natural
calamities.
On the domestic front managing growth and price stability has
been a prime concern in policy formulation. While agriculture
and services sector have provided support to overall growth,
weakening industrial activity (against monetary tightening causing
borrowing costs to rise and investments to fall) has pulled down
economic performance.
Simultaneously, the global economic environment has been
tenuous through the year, particularly turning adverse post-
September 2011, against the Euro-zone crisis, downgrades of
sovereign credit rating of euro-zone and other advanced countries
(including the US), followed by political unrests, currency wars
and the more recent oil crisis.
II. PERFORMANCE HIGHLIGHTSFY 2012 has been a remarkable year for the company with the
successful implementation of the capacity expansion, launch
of raindrops in the domestic markets and setting up of the
distribution network in the international markets. It has all been
exciting for the company and it is indeed befi tting that we have
completed the year with the food industry in general and the
basmati rice industry in particular getting into a phase where there
is a growing concern on the supply situation.
We are happy to report that compared to 2011, EBIDTA, and
Cash fl ow before fi nancing activities has improved. The revenue
for the year increased by 13.44% from ` 3728 crore in FY 2011 to
` 4229 crore in FY 2012. The bottom line for the year stood at `
226 crores compared to profi t of ` 282 crores.
III. INDUSTRY OVERVIEW. The ground level situation is that there is concern on the
availability of food products across the globe. In fact some feel
that we are in the danger of getting into 2008 like situation as far
as food supply is concerned. The bottomline is that we seem to be
eating more than that what we have been producing.
The total food production in India is expected to double in the
next ten years and there is ample opportunity for huge investments
in food and food processing technologies, skills and equipments.
The food processing industry in India stands at US$ 135 billion
and is projected to grow with a compound annual growth rate
(CAGR) of 10 per cent to reach US$ 200 billion by 2015. India
is one of the fastest growing food markets in the world, where
the organised eating-out market is estimated at US$ 2 billion and
growing at a CAGR of 25 per cent. With massive scope for value
addition, growing trend in the consumption pattern of processed
food products in India and many fi scal incentives being planned
by the Government, this sector is capable of maintaining the
growth momentum in the future.
By the end of the Tenth Plan, India could achieve a total food
grains production of 217.28 million tonnes. As a result of good
monsoon performance for four consecutive years 2005-06 to
2008-09 and focused promotional efforts backed by remunerative
price policy support, food grains production recorded an
increasing trend touching a record level of 234.47 million tonnes
in 2008-09. In 2009-10, due to severe drought in various parts of
the country, the total food grains production sharply declined to
218.11 million tonnes. However, during 2010-11, the food grain
production has increased to 244.78 million tonnes and during
2011-12 it is estimated at 250.42 million tonnes, an all time high
so far.
Rice is the staple food for more than half of the world population,
a good source of vitamins and minerals such as thiamine, niacin,
iron, ribofl avin, vitamin D, calcium and fi ber and providing more
than one fi fth of the calories consumed worldwide by the human
species India is one of the original centres of rice cultivation, with
the rice harvesting area in India being the world’s largest. The
world market for rice has been growing modestly since 2005. Rice
is cultivated in over 100 countries and in every continent except
Antarctica; however basmati can only be grown by 2 countries
in the world i.e. India and Pakistan due to the agro-climatic
conditions. India and Pakistan have been growing basmati rice
for many centuries and enjoy IPR protection for the use of the
term ‘Basmati’ worldwide. Consequently, the two countries enjoy
exclusivity in this business which helps them command a greater
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price from the global market.
Due to the challenge of feeding our vast population soon after
independence and the experience of food shortages in the pre-
independence era, ‘self reliance’ in food grains has been the
cornerstone of our policies in the last 60 years. Food grains
dominate the share of total crop output though their relative share
has decreased from 42 percent in TE 1990-1991to 34 per cent
in TE 2009-2010. India has made substantial progress in terms
of overcoming national food insecurity by giving priority to self-
suffi ciency in food grain production by following an agricultural
strategy well known by the name ‘green revolution’. As a result of
the new strategy, the food grain production increased from 82.02
million tonnes in 1960-61 to 250.42 million tonnes (2nd advance
estimate) in 2011-12.
INDIABasmati Rice is the king of rice and has been growing rapidly
with farmers preferring to grow basmati rice. However, in the
crop year 2011-12 the production of basmati rice is estimated
about 4 Mn MT. Basmati is a variety of long grain rice that can
be grown only in certain parts of India and Pakistan and which is
notable for its fragrance, non sticky nature and delicate, nuanced
fl avour. The grains of basmati rice are also longer than most
other types of rice. It is estimated that India presently accounts
for a lion’s share of approximately 80% of the global basmati rice
production, while Pakistan accounts for the balance 20%.
With high export demand, India’s rice varieties export prices
gained almost 30-35%, especially that of basmati rice. Meanwhile,
the retail price of the commodity in the domestic market has not
shown any signifi cant changes. According to analysts, despite the
bumper harvest in 2011-12, the prices have picked up on high
export demand especially from Gulf Countries.
India is a major producer of basmati rice and accounts for almost
80% of the world production and nearly two-third of the country’s
produce is exported. Major consumers of Indian basmati rice are
Saudi Arabia, UAE and Kuwait. The demand for Basmati rice has
grown in line with the supply from India and Pakistan, i.e. the
incremental supply from these two countries is easily absorbed
by the market and global Basmati consumption has increased as
basmati production increased. However, the share of basmati rice
consumption as a percentage of total rice consumption stands at
mere 1%. We believe that basmati rice has a huge latent demand
and has signifi cant room to grow.
The Year under Review
As a result of various initiatives taken by the Government of
India in the implementation of a number of Crop Development
Schemes, the productivity of rice has increased from 1984 kg per
hectare in 2004-05 to 2314 kg per hectare in 2011-12.
The production of rice has shown an upward trend during the
period 2005-06 to 2008-09 and it reached a record level of 99.18
million tonnes in 2008-09. The production of rice which declined
to 89.09 million tonnes in 2009-10 due to long spells of drought
has increased to 102.75 million tonnes in 2011-12, the highest
ever.
Of the 102.75 Mn Mt of production, about 4 Mn Mt was basmati
rice, accounting for 80% of the total world production while
balance 20% was contributed by Pakistan.
The annual growth rate of yield of rice has shown a growth of 1.47
per cent per annum during 2000-01 to 2010-11 compared to 1.36
per cent during 1990-91 to 1999-2000. The turnaround seems to
be in the eastern belt where the government is implementing the
‘Bringing Green Revolution to Eastern India’ (BGREI) scheme
since 2010-11.
IV. OPPORTUNITIES AND THREATSRice is the 2nd most important food grain in the world and feeds
50% of the world population.
Indian Basmati rice production for 2012 stood at approximately
4 mn mt. Though Basmati consumption has increased, the share
of Basmati rice as a percentage of total rice is a mere 1%, and we
believe there is signifi cant room for growth.
Exports are also enjoying greater traction as newer markets are
developed increasing international demand and prices. On the
supply side, Indian farmers are increasingly shifting the focus
from non-basmati paddy to basmati paddy due to the favourable
cost benefi t dynamics and an assured demand.
However, the industry at large and the Company in particular face
certain threats. As the Company operates in only one segment,
any adverse policy for Basmati rice, may have a negative impact
on company`s performance.
Basmati requires ageing of 18-24 months before milling and
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
9
selling which requires huge inventory and in turn large working
capital for which the company has to bear substantial fi nancing
cost.
V. RISKS AND CONCERNSWe are exposed to various risks and uncertainties in the normal
course of our business that can cause variations in our results
from operations and affect our fi nancial condition. We view
effective risk management as an integral part of delivering of
superior returns to shareholders. Principal risks and uncertainties
facing the business are as below:
1) Any change in the consumption pattern of Basmati
rice or reduction in demand or change in the price
could adversely affect our company’s operations and
profi tability.
A signifi cant portion of our company’s revenues are generated
from the sale of basmati rice. Out of the total income of `
3731.80 Crore recorded during 2011-12, the sale of basmati
rice accounted for 88% of total revenues. Any change in
the consumption pattern of Basmati rice or any reduction
in demand for Basmati rice processed by us could adversely
affect our company’s operations. Further there is generally
a long period following the procurement of Paddy before
which the basmati rice is sold in the market. The price of
Basmati will depend on the quality and maturity of Basmati
rice. Currently we have no means or methods of hedging the
price risk associated with our Basmati rice products.
2) Rice cultivation is seasonal in nature. Anomalies in
the weather condition during that period can have
signifi cant impact on the crop, and in turn affect our
operating performance.
Basmati Rice cultivation in India is done only during the
Kharif season. Though Basmati rice is not as dependent
on rainfall as non basmati rice, any unpredictable weather
conditions during that period or anomalies in the weather
pattern can either seriously damage the crop or reduce the
harvest. In addition, the availability and price of paddy can
be affected by plant disease, which can result in crop failures
and reduced harvests.
Our business is directly dependent upon the availability
of Basmati paddy which is cultivated by the farmers. Any
decrease in the area of cultivation by the farmers or by them
shifting towards non-Basmati rice of other crops could affect
the supply. Reduced supply could also limit our ability to
process, transport, store and merchandise the product in an
effi cient manner.
Should this occur, we face the possibility of reduced revenue
during that season without the opportunity to recover until
the following season.
3) We are subject to economic downturns, political
instability and other risks of doing business globally
which could adversely affect the Company’s operating
results.
Our operations are principally in India, but we exports our
products to many countries in the Gulf. The Gulf countries
could be subject to volatile economic, political and market
conditions. Such conditions may have a negative impact
on our ability to execute the business strategies and on its
operating results.
4) Our inability to obtain and / or maintain suffi cient
cash fl ow, credit facilities and other sources of funding
in a timely manner or at all to meet our requirements of
working capital or pay our debts could adversely affect
our operations, fi nancial conditions and profi tability
Our operations require a substantial amount of working
capital. We require to obtain and/or maintain adequate cash
fl ows and or credit facilities from time to time in order to
fi nance the purchase, storing, processing and marketing of
Basmati. Our inability to obtain or maintain cash fl ows can
have a material adverse impact on our operations, fi nancial
conditions and profi tability.
5) Other risks faced by the industry at large include farmer
economics, governmental policies, and access of credit
and build-up of inventories in distribution channels.
6) We are exposed to foreign exchange fl uctuations and
other exchange control risks.
Export contract payments are executed on exchange rates at
the time of exports. We have material exposure to foreign
exchange related risks since a portion of our revenue
earnings, expenses and loans are in foreign currencies.
Any appreciation or depreciation of the Indian Rupee
against foreign currencies can impact the profi tability of the
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
10
business. We may from time to time be required to make
provisions for foreign exchange fl uctuation in accordance
with accounting standards. Devaluation or depreciation of
the Rupee against other currencies may increase the cost of
our borrowings and repayment of indebtedness and reduce
our net income. Further, we have experienced and can be
expected to continue to experience foreign exchange losses
and gains on obligations denominated in foreign currencies
in respect of our borrowings.
VI. FINANCIAL PERFORMANCEI. Results of Operations
a. Income
Income from operations
Our income from operations represents sales from Basmati
Rice both domestically and in the export markets. It also
includes a small portion of export incentives, duty claim
and income received from sale of energy.
During the year under review, the total sales increased to
` 4225.45 Crore from ` 3724.35 Crore. The Net profi t
reduced to ` 226.23 crores in the fi nancial year ended
March 2012 compared to a profi t of ` 282.45 in the
previous year.
Other income
Other income includes dividend from long term
investments, insurance claims, interest, miscellaneous
receipts and foreign exchange fl uctuation. Other income
are stood at ` 3.20 Crore in the year under review
compared to ` 3.86 Crore in the previous year.
b. Expenditure
Operating expenses includes manufacturing expenses,
employee costs and administration and selling expenses.
The total operating expenses during the year under
review stood at ` 146.08 Crore compared to ` 124.38
Crore in previous review.
c. Depreciation
Depreciation charge has increased to ` 38.79 Crore
in the year under review from ` 22.12 Crore in the
previous year due to expansion and modernisation of
capacity.
d. Interest
The interest expenditure for the year under review stood
at ` 513.80 crore compared to ` 331.41 crore in the
previous year. The increase in interest expenditure for
the year under review is a result of increase in interest
rate.
e. Income tax expense
Income tax expense comprises of tax on income from
operations in India and foreign tax jurisdictions. Income
tax payable in India is determined in accordance with
the provisions of the Income Tax Act, 1961.
The provision for income tax stood at ` 56.90 Crore in
the year under review as compared to ` 139.77 Crore in
the previous year.
II. Financial Condition
a. Share Capital
We have authorised share capital of ` 200 Crore as
on March 31, 2012. The issued, subscribed and paid
up capital was ` 135.79 Crore which is comprised of
` 95.79 Crore of equity shares of Re. 1 each and 40
Lacs Redeemable Preference shares of ` 100 each as on
March 31, 2012.
b. Reserves & Surplus
The reserves & surplus increased to ` 2357.95 crore
in the year under review from ` 2225.38 Crore in the
previous year.
c. Fixed Assets
The Gross block of fi xed assets as on March 31, 2012
was ` 1417.27 Crore (` 526.13 Crore as on March 31,
2011) and depreciation amounted to ` 156.48 Crore
(` 119.54 Crore as on March 31, 2011). Additions to
fi xed assets made during the year were ` 896.82 Crore
(` 96.92 Crore during the previous year) comprising of
land, building, plant & machinery, offi ce equipment,
computer vehicles and furniture & fi xture. In addition,
capital work in progress as on March 31, 2012 amounted
to ` 593.92 Crore (` 565.25 Crore as on March 31,
2011).
d. Investments
Investment represents the amount are invested in equity
shares of other Companies amounting to ` 133.54
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
11
Crores as compared to previous year which stood at `
132.50 Crores.
e. Sundry Debtors
The debtor days has 115 days as on March 31, 2012 from
110 days as on March 31, 2011. ` 0.47 Crore has been
provided for doubtful debts in the year under review.
f. Cash and Bank Balance
The cash and bank balances decreased to ` 274.76
Crore as on March 31, 2012 from ` 352.48 Crore as
on March 31, 2011. Of this, ` 252.35 Crore represents
FCCB proceeds that have been parked abroad pending
utilization of the same. We had ` 18.79 Crore (previous
year ` 21.09 Crore) held with scheduled banks and with
other banks.
g. Loans and Advances
Loans and advances represent the amount paid by the
Company in advance for value of goods and services to be
received. These increased to ` 880.95 Crore as on March
31, 2012 from ` 652.81 Crore as on March 31, 2011.
h. Current Liabilities
As on March 31, 2012 the current liabilities were `
748.10 Crores (` 390.57 Crore for previous year) which
includes sundry creditors of ` 562.31 Crore payable to
vendors for supply of goods and services.
i. Provisions
Provisions for gratuity and leave encashment, taxes and
dividend as on March 31, 2012 amounted to ` 115.76
Crore as compared to ` 165.34 Crore in previous year.
Provision for dividend and tax on dividend was ` 57.53
Crore (` 24.13 Crore for previous year), provision for
taxes was ` 56.50 Crore (` 139.75 Crore in previous
year) and employee benefi ts was ` 1.73 Crore. (` 1.46
Crore in previous year).
III. Subsidairy Operations
We have made several strategic investments during the last year
aimed at procuring business benefi ts and operational benefi ts to
us. Your Company has incorporated four 100 % Wholly owned
foreign subsidiaries in Dubai and Mauritius. In Dubai M/s
Ammalay Commoditiess JLT, Dubai Multi Commodities Centre
(DMCC) Dubai (earlier known as REI Agro Traders JLT) and
in Mauritius three 100% Wholly owned foreign subsidiaries
namely M/s Holy Stars Ltd, M/s Auckland Holdings Ltd and
M/s Orient Agro (M) Ltd.
Financial Performance:
During the fi nancial year M/s Ammalay Commoditiess JLT
recorded total revenue of ` 103812.13 Lacs and PAT of `
15870.64 lacs.
The fi nancial performance describes the successful penetration
into the market of the island nation (Mauritius) by recording
the total revenue of ` 6903.29 lacs and ` 3725.72 lacs and `
1250.51 lacs by M/s Holy Stars Ltd., M/s Auckland Holdings
Ltd. and M/s Orient Agro (M) Ltd. but due to huge burden
on the cost of raw material the bottom line records PAT of `
27.03 lacs, ` 363.01 lacs and ` 9.31 lacs respectively.
IV. Export
Major portion of exports of Basmati Rice are to Saudi Arabia
& UAE and we already have a strong presence in these
markets. Our customers majorly are spread in these regions.
REI Agro Limited has existing business relationship in the
Gulf Co-operative Council (GCC) countries. We have also
set up four wholly owned subsidiaries in Dubai & Mauritius.
A direct presence in the international market will open a host
of opportunities.
These subsidiaries are working towards building a strong
distribution network for distribution of the company’s
product to rest of the world. It will encash the opportunities
in the international market in terms of selling Basmati Rice
produced by the Company. The company has started regular
shipments of Rice to European Union, Africa and USA,
the company has also made shipments of brown rice to
European Union.
In line with our branding initiative and presence in the
international market, we have undertaken the exercise in
right earnest. We have a vision to create a truly Global Brand
for Basmati rice. Our strategy is focused on increasing the
visibility of our brands and to increase the availability of
the brand by developing motivated channels of distribution.
We believe that an increased availability coupled with our
unmatched quality will increase the off take. Our vision is
to build brand awareness and an understanding for our
consumers. The key in this regard for us would be the quality
of our products, innovative marketing and engagement of all
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
12
the stakeholders in the brand.
V. Trade Marks
Company has a rich portfolio of famous Trademarks,
which has gained substantial popularity in Domestic as well
as in overseas market. Following are the major Brands i.e.
RAINDROPS, REAL MAGIC, KASAUTI, HANGAMMA,
MEHRAB, NAUSHEEN, MR. MILLER, HUNGAMA,
IKON , HANSRAJ, BAWAL, EUREKA etc.
Under the philosophy of Sharing and caring, during the last
year, Company has taken a unique school contact program
to fulfi ll the corporate social responsibility of the Company
where company distributed rice samples in 300 schools in 4
major cities of India. Under this program, Company with the
help of several NGOs invited children’s from several social
and economic backward areas and school children’s share
their lunch, prepare by the samples distributed by Company
with the children’s so invited through NGOs.
VII. MATERIAL DEVELOPMENT IN HUMAN RESOURCESOne of the key pillars of the Company’s success is its people.
We have always recognised the importance of human capital and
valued it highly. Lot’s of emphasis and efforts are made to create
a working environment that will encourage innovation, enhance
work satisfaction and build a merit driven organisation. Our
human resource vision is to create a committed workforce through
people enabling processes and knowledge sharing practices based
upon its value system.
VIII. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACIESWe have established and maintained adequate internal control
over its processes and systems. Our well defi ned organisational
structure, documented policy guidelines, defi ned authority matrix
and internal controls ensure effi ciency of operations, compliance
with internal policies and applicable laws and regulations as well
as protection of resources. Moreover, we continuously upgrade
these systems in line with the best available practices. The internal
control system is supplemented by extensive internal audits by
an independent fi rm of Chartered Accountants. However, all
internal control systems, no matter how well designed, have
inherent limitations and can provide only reasonable assurance
that the objectives of the internal control system are being met.
IX. CAUTIONARY STATEMENTStatement in the Management Discussion and Analysis describing
the Company’s objectives, projections, estimates, expectations
may be ‘forward looking statements’ within the meaning of
applicable securities laws and regulations. Actual results could
differ materially from those expressed or implied. Important
factors that could infl uence the Company’s operations include
economic developments within the country, demand and supply
conditions in the industry, input prices, changes in government
regulations, tax laws and other factors such as litigation and
industrial relations.
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
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Report on Corporate Governance
In accordance with Clause 49 of the Listing Agreement entered
by Company with Bombay Stock Exchange Limited and
National Stock Exchange India Limited and the best practices
followed internationally on Corporate Governance, the report
contains the details of governance systems and processes at
REI Agro Ltd.
[A] THE COMPANY`S PHILOSOPHY ON CODE OF GOVERNANCE The Company is committed to the adoption of best governance
practices and its adherence in the true spirit, at all times. Our
governance practices stem from an inherent desire to improve and
innovate and to refl ect the culture of trusteeship that is deeply
ingrained in our value system and form part of the strategic
thought process.
The Company’s philosophy on Corporate Governance is founded
upon a rich legacy of fair, ethical and transparent governance
practices, many of which were in place even before they were
mandated by adopting highest standards of professionalism,
honesty, integrity and ethical behaviour.
We are committed to meeting the aspirations of all our
stakeholders. This is demonstrated in shareholder returns, high
credit ratings, governance processes and performance focused
work environment. Our employee satisfaction is refl ected in the
stability of senior management of the company and low attrition
rate at various levels and higher productivity.
Our governance philosophy rests on fi ve basic tenets, viz., Boards’
accountability to the Company and shareholders, strategic guidance
and effective monitoring by the Board, protection of minority
interests and rights, equitable treatment of all shareholders as well
as transparency and timely disclosure.
Traditional views of governance as a regulatory and compliance
requirement have given way to adoption of governance tailored
to the specifi c needs of the Company. Clause 49 has set the
benchmark compliance rules for a listed Company and our
Company is in full compliance with the requirements of Corporate
Governance under the same Clause of the Listing Agreement with
the Indian Stock Exchanges.
[B] BOARD OF DIRECTORSThe Company is managed by the Board of Directors, who
formulates strategies, policies and reviews its performance
periodically in order to ensure the effectiveness of its business
decisions and the implementation of the same.
Composition of Board of Directors: The Board of Directors
comprises of fi ve Directors, Chaired by Non Executive Director.
Three of the Board members are Non-Executive Independent
Directors. The Composition of the Board of Directors during
the year was in conformity with the Clause 49 of the Listing
Agreements. Shri Sanjay Jhunjhunwala, Chairman of the
Company and Shri Sandip Jhunjhunwala, Managing Director of
the Company are relatives.
The details of composition of Board, other Directorship and
Committee Chairmanship/Membership of the Members of the
Board and their attendance at the Board Meeting and Annual
General Meeting of the Company are as under : -
Name of the director Category ** No.
of other
Directorship
No. of Membership /
Chairmanship of other
Board Committees
No. of Board
Meetings
attended
Attendance at
last AGM of
the CompanyShri Sanjay Jhunjhunwala Non-Executive Chairman Nil Nil Nil* AbsentShri Sandip Jhunjhunwala Vice-Chairman &
Managing Director
2 2 6 Present
Dr ING N.K. Gupta Independent Non-
Executive Director
3 1 3 Absent
Shri A. Chatterjee Independent Non-
Executive Director
6 4 8 Present
Shri K.D. Ghosh Independent Non-
Executive Director
1 2 3 Present
* Leave of absence was granted for not attending the meeting.
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** Number of Directorships/Memberships held in other
companies excludes Directorship/Membership in private limited
companies, foreign companies, membership of various committees
of various chambers/bodies and Companies under Section 25 of
the Companies Act, 1956 and Alternate Directorship whereas the
Membership or Chairmanship of any committee includes Audit
Committee and Shareholders’/Investors’ Grievance Committees
only.
DETAILS OF BOARD MEETINGS HELD:During the Financial Year ended 31st March 2012, Eight (8)
Board Meetings were held, whose details are given as:–
Sl.
No.
Date
(FY:2011-12)
Board
strength
No. of Directors
present
1 21.05.2011 5 3
2 12.08.2011 5 3
3 11.11.2011 5 3
4 21.11.2011 5 2
5 04.01.2012 5 2
6 09.01.2012 5 2
7 14.02.2012 5 3
8 13.03.2012 5 2
[C] AUDIT COMMITTEEThe Audit Committee of the Company comprises of Three Non-
Executive Independent Directors. All these directors possess
knowledge of corporate fi nance, accounts and company law. The
Chairman of the committee is an independent and non-executive
director nominated by the Board. The Company Secretary of the
Company acts as Secretary to the Committee.
Terms of reference : The Audit Committee of the Company
is responsible for overseeing the Company’s fi nancial reporting
process; recommending the Board of Directors on the
appointment, re-appointment etc. and fi xation of remuneration
of the Statutory Auditors and Internal Auditors; reviewing with
the management annual and quarterly fi nancial statement before
submission to the Board for approval; reviewing the management
discussion and analysis of fi nancial condition and result of
operations, Statement of related party transactions, Internal audit
report relating to internal control weaknesses and review of the
fi nancial statements of subsidiary companies and internal control
and weaknesses.
During the year 2011-12, the Committee met on 21.05.11,
12.08.11, 11.11.2011 and 14.02.12 .The constitution and
particulars of meetings attended by members of the Committee
are given below:
Sl.
No
Name of the Director Status No. of meetings
attended
1 Shri A. Chatterjee Chairman 4
2 Dr. ING N. K. Gupta Member 3
3 Shri K.D. Ghosh* Member 1
* Leave of absence was granted for not attending the meeting.
[D] REMUNERATION OF DIRECTORS The Details of Remuneration and sitting fees paid to Directors for
the year ended 31st March 2012 is as follows:
(Amount. in `)
Name of the Director Sitting
Fees
Salary &
Perquisites
Commission
Shri Sanjay Jhunjhunwala NIL NIL 2,50,00,000
Shri Sandip Jhunjhunwala NIL 2,33,40,000 NIL
Dr. ING N.K. Gupta 60,000 NIL NIL
Shri A. Chatterjee 1,20,000 NIL NIL
Shri K.D. Ghosh 40000 NIL NIL
The details of Equity Shares held by the Directors as on 31st
March 2012 are as follows:
Name of Director No. of shares
held
Nominal value
of shares (`)
Shri Sanjay Jhunjhunwala 7650360 7650360
Shri Sandip Jhunjhunwala 7661160 7661160
Dr. ING N.K. Gupta NIL NIL
Shri A. Chatterjee NIL NIL
Shri K.D. Ghosh NIL NIL
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[E] SHAREHOLDERS’/INVESTORS’ GRIEVANCE COMMITTEE The Company has constituted Shareholders’/Investors’ Grievance
Committee to look into and redress shareholders’ and investors’
complaints such as transfer of shares, non-receipt of shares, non-
receipt of dividends, issue of duplicate shares etc. The committee
comprises of Shri A. Chatterjee (Chairman, Independent
Director), Shri K.D. Ghosh (Member, Independent Director).
During the year, several Investors’ complaints were received by
the Company and no complaints were pending at the end of the
year. During the year, fi ve meetings were held on 21.04.2011,
12.08.2011, 16.11.2011, 12.03.2012, and 22.03.2012 respectively.
The Company Secretary of the Company acts as Secretary to the
Committee.
Name and designation of Compliance Offi cer (Contact Person)
The Board has appointed Shri Mandan Mishra, Company Secretary
as compliance offi cer of the Company, under the Securities and
Exchange Board of India (SEBI) notifi cations.
Compliance Offi cer : Shri Mandan Mishra
Company Secretary
Address : Unit No. 311 B, C and D,
2nd Floor, DLF South Court Mall,
Saket, New Delhi- 110017
Phone No. : +91-11-49218000
Fax No. : +91-11-49218045
E-mail : [email protected]
Website : www.reiagro.com
Pursuant to new Clause 47(f) of the Listing Agreement the
Company’s e-mail ID for grievance redressal purpose is
[email protected] where complaints can be lodged
by the investors.
Share Transfer Committee and Share Transfer System
The Board of the Company has constituted a Share Transfer
Committee. The Committee regularly meets to approve transfer
of shares and issue of duplicate share certifi cates. The committee
comprises of Shri K.D. Ghosh (Chairman, Independent Director)
and Shri A. Chatterjee (Member, Independent Director). The
Company Secretary of the Company acts as Secretary to the
Committee.
Shareholders can address their request for share transfer and
duplicate share certifi cate etc. to Company’s RTA at the below
mentioned address.
Maheshwari Datamatics Pvt. Ltd.
6, Mangoe Lane, 2nd Floor, Kolkata -700 001.
Phone no. 033-2248-2248, 2243-5029/5809
Fax : 033-2248-4787
[F] GENERAL BODY MEETINGSDetails of the last three Annual General Meetings of the Company
are as under: -
VENUE FINANCIAL
YEAR
DATE & TIME
The Institution of
Engineers (India),
Sir R.N. Mukherjee Hall,
8, Gokhale Road,
Kolkata - 700 020
2008-09 23rd September,
2009
9:30 A.M.
The Sangit Kala Mandir
Trust, Kala Kunj,
48, Shakespeare Sarani,
Kolkata - 700 017
2009-10 27th September,
2010 at 2:30 P.M.
Mini Auditorium,
Science City, J.B.S Haldane
Avenue, Kolkata – 700046
2010-11 29th September,
2011 at
11:30 AM.
During the last three fi nancial years the Company has passed the
following Special Resolution in its Annual General Meeting and
Extra ordinary General Meetings.
Date of
resolution
Meeting Subject matter of
resolutions
19th January,
2009
Extra Ordinary
General
Meeting
Alteration of Clause V
of Memorandum of
Association of the company
by splitting the face value of
one equity share of ` 10/-
each into Ten Equity shares
of Re. 1/- each.
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
16
Date of
resolution
Meeting Subject matter of
resolutions
19th June,
2009
Extra Ordinary
General
Meeting
Further Issue of Securities
u/s 81 (1A) of the
Companies Act, 1956.
23rd
September,
2009
Annual
General
Meeting
Enhancement of FII Limit
up to 40% of the Paid up
Capital of the Company.
11th February,
2010
Extra Ordinary
General
Meeting
Enhancement of FII Limit
up to 75% of the Paid up
Capital of the Company.
22nd May,
2010
Extra Ordinary
General
Meeting
Reservation of Equity
Shares in the Rights issue
for the FCCB Holders
27th
September,
2010
Annual
General
Meeting
Extension of redemption
period of 4% Non
Convertible Redeemable
Preference Shares
29th
September,
2011
Annual
General
Meeting
Payment of Commission
on the net profi ts to the
Chairman of the Company
Company has not passed any special Resolution through Postal
Ballot during last three years.
[G] DISCLOSURES (i) Related party transactions
During the year under review, there were no transactions of a
material nature with the directors or the management or the
Company’s subsidiary or relatives of the directors that could have
potential confl ict with the interests of the Company. The Register
of Contracts containing the transactions in which Directors are
interested is placed before the Board regularly.
(ii) Accounting treatment
During the year under review, the Company has, while preparing
the Financial Statement followed the Accounting Standard so
as to give true and fair view of the profi ts and/or losses of the
company.
(iii) Compliance by the Company
During the year, the Company has complied with all the provisions
of the Listing Agreement including Clause 49, SEBI notifi cation
and other matters related to Capital Market and there is no instance
of non-compliance by the Company.
(iv) Whistle blower policy
The Company has not put in place the Whistle Blower Policy
as yet. However, during the year under review, no employee has
been denied access to the audit Committee or the Management to
report any kind of irregularity in the Company’s functioning.
(v) Code of Conduct
The Board of Directors has adopted a Model Code of Conduct for
its Directors and senior management/functional heads as required
under Clause 49 of Listing Agreement. The Company has received
affi rmation from all the Board members and senior management
personnel as to compliance of the Code of Conduct. A declaration
to this effect signed by Managing Director is annexed and forms
part of this Report.
(vi) Risk Management
The Company has laid down procedures to inform Board members
about the risk assessment and minimization procedures, which are
periodically reviewed.
[H] MEANS OF COMMUNICATION The Company timely informs its investor and statutory authorities
of all the price sensitive and critical information’s. Quarterly
Results are sent to the Stock Exchanges on regular and timely
basis and also published in English leading Newspaper as well as
Regional language Newspaper of the State where the Company
is registered. All the key information provided to the Stock
Exchanges are regularly published in the newspapers. Important
information is also displayed on the web site of the Company at
www.reiagro.com.
The shareholders are provided with the necessary information
with notices sent for the Annual General Meeting / Extraordinary
General Meeting. Any other information sought by shareholders is
being provided on request. As per the requirement of Clause 47(f)
of the Listing Agreement, the Company has notifi ed an e-mail
id ([email protected]) for the purpose of investor
grievance and other queries of the investors.
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
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[I] GENERAL SHAREHOLDERS’ INFORMATION(i) Details of the ensuing AGMDate & Time Saturday, 29th September 2012
11.30 a.m.Venue Rotary Children’s Welfare Trust,
Rotary Sadan, 94/2, Chowringhee
Road, Kolkata - 700020Book Closure Date 26th September, 2012 to 29th
September, 2012 (both days
inclusive)
(ii) Registrar & Share Transfer Agents (RTA)
Maheshwari Datamatics Pvt. Ltd.
6, Mangoe Lane, 2nd Floor, Kolkata -700 001.
Phone no. 033-22482248, 22435029/5809
Fax : 033-22484787
[J] DIVIDEND AND FINANCIAL YEAR INFORMATION(i) Transfer of dividend 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 the unclaimed dividend for the year 2003-2004 to
the said fund. Unclaimed dividend for the year 2004-05 (` 289633
) shall be transferred to the said fund before the due date.
It may be noted that upon the transfer of dividend to Investor
Education & Protection Fund, members lose their right to claim
such dividend. Therefore Members are requested to claim the
amount of Unpaid/unclaimed dividend for the year 2004-2005
onwards.
(ii) Final Dividend for the Year 2011-12
For the year under review, the Board of Directors of the Company
have proposed and recommended a fi nal dividend of 50% i.e., Re.
0.50 per equity share having face value of Re. 1 each equity share,
aggregating to ` 4789.92 lacs. In addition, Board of Directors
have also proposed and recommended a dividend @ 4%, i.e. `
4/- each on preference share having face value of ` 100/- each
to the preference shareholders aggregating to `160 lacs for the
fi nancial year 2011-12.
(iii) Financial year:
The fi nancial year of the Company starts with 1st April 2011 and
ends on 31st March 2012.
(iv) Financial Calendar (Tentative)Sl.
No.
Approval/Adoption of On or before
1. 1st Qtr. Financial Result ending on
30th June, 2012
14th August 2012
2. 2nd Qtr. and half year Financial
Result ending on 30th September,
2012
14th November,
2012
3. 3rd Qtr. Financial Result ending on
31st December, 2012
14th February,
20134. Audited Financial Result for year
ending 31st March, 2013
30th May, 2013
5. Next Annual General Meeting 30th September,
2013
[K] LISTING OF SECURITIES AND OTHER INFORMATION’S (i) Listing of Securities at Stock Exchanges:Equity Shares : ISIN : INE385B01031Bombay Stock Exchange
Limited (BSE) Phiroz
Jeejeebhoy Towers, Dalal
Street, Mumbai-400001
National Stock Exchange
of India Limited (NSE)
“Exchange Plaza”, Bandra-
Kurla Complex, Bandra (E),
Mumbai- 400051Scrip Code: 532106 Trading Symbol:
REIAGROLTDFCCBs
Singapore Stock Exchange
(SGX) Code: 4BQB and
4BPB
ISIN-US74948PAA21 and
USY7253SAB61
GDRs
London Stock Exchange
(LSE)
Code: REAA & REA
DEBT INSTRUMENTS
Non-convertible Debentures issued by the Company on private
placement basis are listed at Bombay Stock Exchange Limited
at its Wholesale Debt Market (WDM) segment under various
ISIN Nos.
DEBENTURE TRUSTEES: IDBI Trusteeship Services
Limited and IL&FS TRUST COMPANY LIMITED
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
18
(ii) Payment of Listing Fees:
The Company has paid the listing fees to BSE & NSE and other Exchanges and no other due are payable by the company to any Stock
Exchange.
(iii) Market Price Data
The Monthly high and low prices of the Equity Shares of the Company at Bombay Stock Exchange Limited (BSE) and National Stock
Exchange of India Limited during fi nancial year 2011-2012 are as follows: BSE NSE
Month High Price Low Price High Price Low Price
(`) (`) (`) (`)April 2011 28.65 25.55 28.60 25.30May 2011 27.90 24.85 27.90 24.75June 2011 27.55 24.65 27.60 24.60July 2011 30.40 25.25 30.20 25.30August 2011 29.65 22.30 29.75 22.25September 2011 27.25 23.90 29.50 23.95October 2011 24.80 20.00 26.00 20.00November 2011 24.00 18.50 23.85 18.80December 2011 22.00 14.00 22.30 14.90January 2012 17.50 13.70 17.50 13.35February 2012 17.05 14.01 17.00 13.95March 2012 15.70 12.05 15.95 12.05
(iv) Performance in Comparison to Stock Indices
A chart showing the performance of equity shares of the Company in comparison to BSE Sensex also with NSE Nifty during the year
ended on March 31, 2012 is given as under.
Chart One: Both BSE (Sensex) and REI Agro Share prices are indexed to 100 based on closing prices of April, 2011.
REI Agro Ltd.
BSE SENSEX
200
150
100
50
0
Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12
Chart Two: Both NSE (Nifty) and REI Agro Share prices are indexed to 100 based on closing prices of April, 2011.
200
150
100
50
0Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12
REI Agro Ltd.
NSE Nifty
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
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(v) Distribution of Shareholding
The Shareholding distribution of equity shares as on 31st March, 2012 is given below: -
Sl. No Shares Holding No. of Share Holders % of Share Holders No. of Shares % of Shareholding
1. 1 to 500 31531 70.75 5980555 0.63
2. 501 to 1000 6229 13.98 5204921 0.54
3. 1001 to 2000 3270 7.34 5134908 0.54
4. 2001 to 3000 1203 2.7 3188723 0.33
5. 3001 to 4000 510 1.14 1858036 0.19
6. 4001 to 5000 466 1.05 2221127 0.23
7. 5001 to 10000 678 1.52 5029528 0.53
8. 10000 & above 677 1.52 929367156 97.01
Total 44564 100 957984954 100
(vi) Shareholding Pattern of the Company as on 31st March, 2012S.
No.
Category of shareholder Number
of share-
holders
Total number
of shares
Number of
shares held in
dematerialized
form
Total shareholding as a
percentage of total number
of shares
Shares pledged or
otherwise encumbered
As a
percentage
of (A+B)
As a
percentage of
(A+B+C)
Shares As a %
(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX)=
(VIII)/
(IV)*100(A) Shareholding of
Promoter and Promoter
Group(1) Indian(a) Individuals/Hindu
Undivided Family
7 17465220 17465220 1.85 1.82 N i l N i l
(b) Bodies corporate 12 439533406 439533406 46.66 45.88 221579611 50.41Sub-total (A)(1) 19 456998626 456998626 48.51 47.70 221579611 48.49
A (2) Foreign 0 0 0 0 0 0 0Sub-total (A)(2) 0 0 0 0 0 0 0Total shareholding of
Promoter and Promoter
Group (A)=(A)(1)+(A)(2)
19 456998626 456998626 48.51 47.70 221579611 48.49
(B) Public shareholding(1) Institutions(a) Financial Institutions/
Banks
2 311310 311310 .03 .03 0 0
(b) Insurance companies 1 1261305 1261305 .13 .13 0 0
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
20
S.
No.
Category of shareholder Number
of share-
holders
Total number
of shares
Number of
shares held in
dematerialized
form
Total shareholding as a
percentage of total number
of shares
Shares pledged or
otherwise encumbered
As a
percentage
of (A+B)
As a
percentage of
(A+B+C)
Shares As a %
(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX)=
(VIII)/
(IV)*100(c) Foreign institutional
investors
81 385024787 385024787 40.87 40.19 0 0
Sub-total (B)(1) 84 386597402 386597402 41.04 40.36 0 0(2) Non-institutions(a) Bodies corporate 751 51737873 51737273 5.49 5.40 0 0(b) Individuals -
i. Individual shareholders
holding nominal share
capital up to ` 1 lakh.
42887 34465340 34132342 3.66 3.60 0 0
ii. Individual shareholders
holding nominal share
capital in excess of ` 1
lakh.
6 2098196 2098196 0.22 0.22 0 0
(c) Any other- NRIs 721 9447689 2372489 1.00 0.99 0 0(d) Trust 2 1360 1360 0.00 0.00 0 0(e) Foreign National 4 3000 3000 0.00 0.00 0 0(f) Clearing Member 88 630568 630568 0.07 0.07 0 0
Sub-total (B)(2) 44459 98384026 90975228 10.44 10.27 0 0Total public shareholding
(B)= (B)(1)+(B)(2)
44543 484981428 477572630 51.49 50.63 0 0
TOTAL (A)+(B) 44562 941980054 934571256 100.00 98.33 0 0(C) Shares held by custodians
and against which
depository receipts have
been issued
2 16004900 16004900 --- 1.67 0 0
Grand total (A)+(B)+(C) 44564 957984954 950576156 100.00 221579611 23.13
(vii) Dematerialization of shares and liquidity:
The Shares of the Company are compulsorily traded in dematerialized form and are available for trading under both the depository
systems in India - NSDL (National Securities Depository Ltd.) and CDSL (Central Depository Services (India) Ltd). The International
Securities Identifi cation Number (ISIN) allotted to the Company’s equity shares under depository system is INE385B01031.
NSDL / CDSL / Physical summary report as on March 31, 2012.
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
21
No. Of Share Holders No. of shares % of Shareholding
1. Physical 90 7408798 0.77
2. NSDL 28375 824106388 86.03
3. CDSL 16099 126469768 13.20
Total 44564 957984954 100.00
The following chart depicts the percentage of shareholdings of abovementioned summary report
% of Shareholding
Physical NSDL CDSL
1.0013.00
86.00
[L] AUTHORISED AND PAID UP CAPITAL OF THE COMPANY(i) Authorized Share capital
Authorized Share capital of the Company is ` 2,000,000,000
(Rupees Two Hundred Crore) divided into 1,600,000,000(One
Hundred Sixty Crore) Equity Shares of Re.1/- each and 40,00,000
(Forty Lacs) Preference Shares of ` 100/- each.
[M] ISSUE / ALLOTMENT OF OTHER SECURITIES:
(i) Global Depository Receipts:
The Company had also issued 37,70,000 Global Depository
Receipts (GDRs) at a price of US $ 8.00 each aggregating
US $ 30.16 Million. Each GDR represents two equity shares;
consequently the Company has issued 75,40,000 underlying equity
shares to Depository Bank. The Company has reduced its paid
up capital under the Scheme of Arrangement approved by High
Court of Kolkata on 27th August, 2008, becoming effective from
8th September, 2009. After the scheme of arrangement become
effective the paid value of underlying equity shares was reduced
and 45,24,000 equity shares were issued in place of 75,40,000.
The Company has sub divided the face value of its one equity
shares of `10/- each into ten equity shares of Re. 1/- each and
consequently the company has issued 4,52,40,000 equity shares
in place of existing 45,24,000 equity shares. However Board of
Directors in their meeting held on 14th January, 2011, changed the
GDR to Equity ratio, now each GDR represents 20 equity shares
of the company. The Company has not been reported as to receipt
of request for redemption of GDRs and releasing of underlying
shares in favour of non-resident investor. As on 31st March 2012,
800245 GDR were outstanding.
(ii) Foreign Currency Convertible Bonds (FCCBs) issued during
2009-2010
During the fi nancial year 2009-10, Company has issued 105000
number of 5.5% Foreign Currency Convertible Bonds (FCCBs)
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
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of US $ 1,000 each aggregating US $ 105.00 million to overseas
investors. These outstanding bonds are due for redemption on
November 13, 2014. As on 31st March 2012, out of 105000
Bonds, 350 bonds stand converted into equity shares up as per
following details. Date of
conversion
Number of
Bonds converted
Number of equity
shares allotted on
conversion*13.02.2010 100 1,00,68511.03.2010 250 2,51,713
* Conversion rate of Bonds was fi xed at ` 46.70 per share as per
the terms of Offer Circular.
(N) PLANT LOCATIONS (MANUFACTURING UNITS)(1) Plot No. 691 to 696, Sector-2, 94, K.M. Mile Stone,
Delhi-Jaipur Road, NH-8, Bawal Growth Centre,
Distt. Rewari, Haryana.
(2) Plot No 180D,E, F, G, H, I, J, &181A, Sector –3,
94, KM Milestone, Delhi–Jaipur Road,
Bawal Growth Centre, Distt. Rewari, Haryana.
3. Plot No. 126, Sector-6, HSIIDC, Bawal Growth Centre,
Distt. Rewari, Haryana
WIND MILLS1. Village: Soda – Mada, Dist- Jaisalmer, Rajasthan.
2. Village: Dhulia, Titane & Brahmanwel, Dist. Dhule,
Maharashtra.
3. Village : Udyathur, Radhapuram, Muppandal, Dist.
Tirunelveli, Tamilnadu
4. Village : Surajbari, Dist. Kutch, Gujarat
(O) ADDRESS FOR CORRESPONDENCEShareholders may address all their correspondence at the below
mentioned address.
Registered offi ce : Everest House, 46C, Chowringhee Road,
15th Floor R. No.15B, Kolkata-700071.
Corporate offi ce : 311 B, C and D, 2nd Floor, DLF South
Court, Saket, New Delhi-110017.
Shareholders are requested to notify immediately any change in
their address, bank mandate and nomination to the Company.
Members holding shares in electronic form are requested to
notify any change in address and bank details, nominations etc.
to the depository participants (DP) with whom they are having
account for effecting necessary updations. Any intimation made to
the Company without effecting the necessary updations with the
depository participants will not be considered.
Certifi cate
The Company has obtained the Certifi cate from M/s P. K. Lilha
& Co., Chartered Accountants regarding compliance of Corporate
Governance as stipulated in Clause 49 of the Listing Agreement
and the same is annexed.
All material requirements with respect to Corporate Governance
as stipulated in the Listing Agreement have been complied with.
Secretarial Audit
• Pursuant to Clause 47(c) of the Listing Agreement with
the Stock Exchanges, certifi cates, 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 confi rms 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).
Cautionary Statement:
Details given in above relating to various activities and future
plans may be ‘forward looking statements’ within the meaning of
applicable laws and regulations. The actual performance may differ
from those expressed or implied.
For and on behalf of the Board of Directors
A. Chatterjee Sandip Jhunjhunwala
Director Vice-Chairman & Managing Director
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
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CEO’S CERTIFICATION AS TO COMPLIANCE WITH CODE OF CONDUCT(IN PURSUANCE TO CALUSE 49(1)(D) OF THE LISTING AGREEMENT
The Company had adopted a model Code of Conduct that has been made effective from January 1, 2006. The said Code of Conduct is
applicable and binding on the Directors and Senior Management Personnel / Functional Heads of the Company. During the year under
review, all the Directors and Senior Management Personnel / Functional Heads of the Company have affi rmed as to compliance with the
said Code. Further, no instance of non-compliance with any part of the Code of Conduct has been reported by any of its Directors or
Senior Management Personnel / Functional Heads.
For and on behalf of the Board of Directors
Sandip Jhunjhunwala
Vice-Chairman &Managing Director
Corporate Governance Certifi cate
ON COMPLIANCE OF CLAUSE 49 OF THE LISTING AGREEMENT
To,
The Members
REI AGRO LIMITED
We have examined the compliance of conditions of Corporate Governance by M/s REI AGRO LIMITED (“the Company”) for the year
ended on 31st March, 2012 as stipulated in clause 49 of the Listing Agreement of the said Company with Stock Exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to
procedures and implementation thereof, adopted by the Company for ensuring the compliance of conditions of Corporate Governance.
It is neither an audit for an expression of opinion on the fi nancial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied
with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.
We have been explained that no investor grievance are pending for a period exceeding one month as at 31st march,2012 against the
Company.
We further state such Compliance is neither an assurance as to future viability of the Company nor the effi ciency or effectiveness with
which the management has conducted the affairs of the Company.
For P. K. Lilha & Co.,
Chartered Accountants
Firm Reg. No.: 307008E
(P. K. Lilha)
Partner
Place: Kolkata M. No.11092.
Date : 30th May, 2012
Annexure to Report on Corporate Governance
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CEO and CFO Certifi cation
To,
The Board of Directors
REI Agro Limited
Kolkata
We, Sandip Jhunjhunwala, Vice Chairman and Managing Director and Ranjan Majumder, Cheif Financial Offi cer of REI Agro Limited,
to the best of our knowledge and belief, shall certify that:
1. We have reviewed the Balance Sheet and Profi t and Loss account (Standalone and consolidated), including fi nancial statements and
all the schedules and notes on accounts, as well as the cash fl ow statements and the Directors report
2. Based on our knowledge and information, these statements do not contain any untrue statement or omit to state any material fact
or contain statements that might be misleading.
3. Based on our knowledge and information. these statements together present a true and fair view of the company’s affairs and are in
compliance with existing accounting standards, applicable laws and regulations.
4. To the best of our knowledge and belief, there are no transactions entered into by the company during the year which are fraudulent,
illegal or violative of the company’s code of conduct and ethics.
5. We accept the responsibility for establishing and maintaining internal controls and procedures for fi nancial reporting and that we have
evaluated the effectiveness of internal control systems of the company pertaining to fi nancial reporting.
6. We have disclosed , based on our recent evaluation, wherever applicable , to the Company’s auditors and the audit committee of the
Company`s board of directors (* and persons performing the equivalent functions);
a. There were no defi ciencies in the design or operations of the internal control, that could adversely affect the company`s ability
to record, process, summarizes and report fi nancial data and there have been no material weakness in the internal control .\
b. There were no signifi cant changes in the internal controls during the year covered by this report.
c. All signifi cant changes in accounting policies during the year, if any, and that the same have been disclosed in the notes to the
fi nancial statements.
d. There were no instances of fraud of which we are aware, that involve the Management or other employees who have a
signifi cant role in the Company’s internal control system.
7. We further declare that all the Directors and Senior Management Personnel / Functional Heads of the Company have affi rmed
compliance with the Code of conduct and ethics.
Note :
During the year under review, there have not been any signifi cant changes in the accounting policies and also there are no instances of
signifi cant fraud which we became aware and the involvement therein, if any, of the management or an employee having a signifi cant role
in the company’s internal control system over fi nancial reporting.
Sandip Jhunjhunwala Ranjan Majumder
Managing Director Chief Financial Offi cer
Place: Kolkata
Date : 30th May, 2012
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AUDITORS’ REPORTTo THE MEMBERS OF
REI AGRO LIMITED
1. We have audited the attached Balance Sheet and Statement of
Profi t and Loss of REI AGRO LIMITED as at 31st March,
2012 also the Cash Flow Statement for the year ended on
that date annexed thereto. These Financial Statements are
the responsibility of the Company’s management. Our
responsibility is to express an opinion on these Financial
Statements based on our audit.
2. We conducted our audit in accordance with the Auditing
Standards generally accepted in India. Those Standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the fi nancial statements are free
of material misstatement. An audit includes examining on
test basis evidence supporting the amounts and disclosures
in the fi nancial statements. An audit also includes assessing
the accounting principles used and signifi cant estimates made
by management, as well as evaluating the overall fi nancial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by Companies (Auditor’s Report) Order, 2003,
(as amended) issued by the Central Government of India
in terms of Section 227(4A) of the Companies Act, 1956,
and we enclose in the Annexure a statement on the matters
specifi ed in paragraphs 4 and 5 of the said Order, to the
extent applicable to the Company.
4. Further to our comments in the Annexure referred to in
paragraph 3 above, we report that:
a) We have obtained all the information and explanations,
which to the best of our knowledge and belief were
necessary for the purpose of our audit;
b) In our opinion, proper books of accounts as required
by law have been kept by the Company so far as appears
from our examination of those books;
c) The Balance Sheet, Statement of Profi t and Loss and
Cash Flow Statement dealt with by this report are in
agreement with the books of account;
d) In our opinion, the Balance Sheet, Statement of Profi t
and Loss and Cash Flow Statement dealt with by this
report comply with the Accounting Standards referred
to in Section 211(3C) of the Companies Act, 1956;
e) On the basis of written representations received from
the directors as on 31st March, 2012 and taken on
record by the Board of Directors, we report that none
of the directors is disqualifi ed as on 31st March, 2012
from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies
Act, 1956;
f) In our opinion and to the best of our information
and according to the explanations given to us, the said
accounts read together with the Signifi cant Accounting
Policies as per Notes 1 & 2 and others, give the
information required by the Companies Act, 1956, in
the manner so required and give a true and fair view
in conformity with the accounting principles generally
accepted in India;
1) in the case of the Balance Sheet, of the state of
affairs of the Company as at 31st March, 2012;
2) in the case of Statement of Profi t and Loss, of the
Profi t of the Company for the year ended on that
date, and
3) in the case of the Cash Flow Statement, of the
cash fl ows for the year ended on that date.
For P.K.LILHA & CO.
Chartered Accountants
Firm Reg. No.: 307008E
(CA. P.K. LILHA)
Partner
M. No. 011092
Place : Kolkata
Date : 30.05.2012
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
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ANNEXURE TO THE AUDITORS’ REPORT(Referred to in paragraph 3 of our report of even date)
i. In respect of its Fixed Assets:
(a) The Company has maintained proper records showing
full particulars, including quantitative details and
situation of fi xed assets.
(b) In our opinion, the company has a regular programme
of physical verifi cation of fi xed assets which, in our
opinion, is reasonable having regards to the size of the
company and nature of its assets. In accordance with
this programme, fi xed assets were physically verifi ed by
the management during the year and that no material
discrepancies were noticed on verifi cation.
(c) There was no substantial disposal of its fi xed assets
during the year, which may have any impact on the
going concern nature of the Company.
ii. In respect of its Inventories:
(a) As explained to us the Inventories have been physically
verifi ed by the management at reasonable intervals. In
our opinion the frequency of verifi cation is reasonable.
(b) The procedures of physical verifi cation of inventories
followed by the management are reasonable and
adequate in relation to the size of the Company and the
nature of its business.
(c) The Company has maintained proper records of its
inventories and no material discrepancies were noticed
on physical verifi cation of Inventories as compared to
the book records.
iii.
(a) The company has given loan to one subsidiary. In
respect of said loan the maximum amount outstanding
at any time during the year and the year end balance was
` 1476.86 Lacs including interest thereon.
(b) In our opinion and according to the information and
explanation given to us, the rate of interest and other
terms & condition of the loans given by the company,
are not prima facie prejudicial to the interest of the
company.
(c) The principal amount are repayable on demand
including interest.
(d) In respect of the said loans and interest thereon, there
are no overdue amount.
(e) The Company has not taken any loans secured or
unsecured from companies covered in the register
maintained under Section 301 of the Companies Act,
1956.
iv. In our opinion and according to the information and
explanations given to us, there are adequate internal control
systems commensurate with the size of the Company and
the nature of its business with regards to the purchase of
inventories, fi xed assets and for the sale of goods. There is
no sale of services. During the course of our audit no major
weakness has been noticed in the internal control system in
respect of these areas.
v.
(a) According to the information and explanations given
to us, we are of the opinion that the particulars of
contracts or arrangements referred to in section 301 of
the Companies Act, 1956 that need to be entered into
the register have been so entered.
(b) In our opinion and according to the information and
explanations given to us, the transactions made in
pursuance of contracts or arrangements entered in the
register maintained under section 301 of the Companies
Act, 1956 and exceeding the value of Rupees Five Lacs
in respect of any party were made at prices which were
reasonable having regard to the prevailing market prices
at the relevant times.
vi. The company has not accepted any deposits from the public
during the year. Hence the provisions of clause 4 (vi) of the
order are not applicable.
vii. In our opinion, the company has an internal audit system
commensurate with the size of the company and nature of
its business.
viii. We have broadly reviewed the Books of Accounts maintained
by the Company in respect of generation of electricity from
wind power where pursuant to the rules made by the Central
Government of India, the maintenance of Cost Records
have been prescribed U/s 209(1)(d) of the Act and are of the
opinion that prima-facie, the prescribed accounts and records
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
27
have been made and maintained. We have not, however,
made a detailed examination of the records with a view to
determine whether they are accurate or complete.
ix.
(a) On the basis of examination of records of the Company,
undisputed statutory dues including Provident fund,
Employee’s State Insurance, Investor Education and
Protection Fund, Income Tax, Wealth Tax, Service Tax,
Sales tax, Custom Duty, Excise, Cess and any other
material statutory dues have been generally regularly
deposited with the appropriate authorities during the
year.
(b) No undisputed amounts payable were outstanding at
the year end, for a period of more than six months from
the date they became payable.
(c) According to information and explanation given to us
and the records of the company examined by us, there
are no undisputed amount of statutory dues which have
not been deposited.
x. The Company has no accumulated losses as at the end of the
year and it has not incurred cash losses during the current
and in the immediately preceding fi nancial year.
xi. Based on our audit procedures and on the basis of information
and explanations given to us, we are of the opinion that the
company has not defaulted in the repayment of dues to any
fi nancial institution, or Bank, or debenture holders.
xii. According to the information and explanations given to us,
the company has not granted any loans or advances on the
basis of security by way of pledge of shares, debentures and
other securities, accordingly paragraph 4 (xii) of the Order is
not applicable.
xiii. The company is not a Chit Fund/Nidhi/Mutual Benefi t
Fund/Society. Therefore the provisions of Paragraph 4 (xiii)
of the Order are not applicable to the company.
xiv. The Company has in our opinion maintained proper records
and contract notes with respect to its investments and timely
entries have been made therein. All investments at the close
of the year are held in the name of the Company.
xv. The Company has given guarantees for loans taken by two
subsidiary companies from banks and fi nancial institutions.
According to the information and explanations given to us,
we are of the opinion that the terms and condition thereof
are not prima facie prejudicial to the interest of the Company.
xvi. In our opinion and according to the information and
explanation given to us, the term loans were applied for the
purpose for which these were raised.
xvii. According to the Cash Flow Statement and other records
examined by us and the information and explanations given
to us, on an overall basis, funds raised on short term basis
have, prima facie, not been used during the year for long term
investment.
xviii. The Company has not made any preferential allotment of
shares during the year to parties or companies covered in the
Register maintained under Section 301 of the Companies
Act, 1956.
xix. The Company has issued during the year secured non
convertibles debentures amounting to ` 343.5 crores and has
created securities / charges in respect of secured debentures
issued.
xx. The Company has not raised any money by way public issued
during the year.
xxi. In our opinion and according to our information and
explanation given by the management, we report that no
material fraud on or by the Company has been noticed or
reported during the course of our audit.
For P.K.LILHA & CO.
Chartered Accountants
Firm Reg. No.: 307008E
(CA. P.K. LILHA)
Partner
M. No. 11092
Place : Kolkata
Date : 30.05.2012
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
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BALANCE SHEET AS AT 31ST MARCH, 2012 (Amount in `)
Notes As at
March 31, 2012
As at
March 31, 2011 I. EQUITY AND LIABILITIESShareholders’ FundsShare Capital 3 1,357,984,954 1,357,984,954 Reserves and Surplus 4 23,579,545,052 22,253,847,717 Sub Total - Shareholders Fund 24,937,530,006 23,611,832,671 Non-current liabilitiesLong Term Borrowings 5 13,919,096,395 7,915,813,270 Deferred Tax Liabilities (net) 6 1,128,166,697 799,852,527 Long Term Provisions 7 16,573,145 14,168,810 Sub Total - Non-current Liabilities 15,063,836,237 8,729,834,607 Current liabilitiesShort Term Borrowings 8 33,484,541,669 30,115,964,766 Trade Payables 9 5,623,121,860 3,061,004,460 Other Current Liabilities 10 1,857,866,845 844,685,960 Short Term Provisions 7 1,140,993,908 1,639,208,888 Sub Total - Current Liabilities 42,106,524,282 35,660,864,074 TOTAL - EQUITY AND LIABILITIES 82,107,890,525 68,002,531,352 II. ASSETSNon current assetsFixed assets 11 Tangible assets 12,605,573,584 4,062,327,215 Intangible assets 2,410,646 3,619,098 Capital work-in-progress 1,154,504,056 2,340,287,147 Non-current investments 12 1,335,372,705 1,325,026,932 Long term loans and advances 13 4,828,385,882 3,446,111,358 Sub Total - Non Current Assets 19,926,246,873 11,177,371,750 Current assetsInventories 14 37,340,732,432 35,710,744,884 Trade receivables 15 13,302,362,864 11,190,755,655 Cash and cash equivalents 16 2,747,564,543 3,523,618,725 Short term loans and advances 13 8,765,868,909 6,394,183,848 Other current assets 17 25,114,904 5,856,490 Sub Total - Current Assets 62,181,643,652 56,825,159,602 TOTAL - ASSETS 82,107,890,525 68,002,531,352 Signifi cant accounting policies 2Notes on Financial Statements 3 to 33 - -
In terms of our attached report of even date
For P. K. Lilha & Co. For and on behalf of the Board
Chartered Accountants
Firm Reg. No.: 307008E
Sandip Jhunjhunwala K. D. Ghosh
CA. P. K. Lilha Managing Director Director
Partner
M No.: 11092 Ranjan Majumder Mandan Mishra
Chief Financial Offi cer Company Secretary
Place : Kolkata
Dated : 30th May, 2012
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
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(Amount in `)Notes For the year ended For the year ended
31.03.2012 31.03.2011
INCOME
Revenue from operations 18 42,254,844,351 37,243,525,792
Other Income 19 31,953,433 38,646,985
Total Revenue (I) 42,286,797,784 37,282,172,777
EXPENSES
Cost of Raw Materials Consumed 20 37,052,219,934 19,712,015,899
Purchases of Stock In Trade 21 5,462,634,004 6,826,689,752
(Increase)/decrease in inventories of Finished Goods 22 (10,046,084,944) 1,742,150,844
Employee benefi ts expenses 23 221,061,469 172,039,560
Finance costs 24 5,138,040,214 3,314,069,377
Depreciation & Amortization expenses 25 387,876,917 221,217,853
Other expenses 26 1,239,723,267 1,071,791,587
Total Expenses (II) 39,455,470,861 33,059,974,872
Profi t Before Tax ( I - II ) 2,831,326,923 4,222,197,905
Tax expenses
Current tax 565,007,231 1,397,507,749
Prior Period Tax Payment 4,019,446 143,220
Total Tax Expenses 569,026,677 1,397,650,969
Profi t for the year after tax 2,262,300,246 2,824,546,936
Earnings per equity share (nominal value) Re. 1/- each)
Basic 2.34 3.49
Diluted 2.11 3.08
Signifi cant accounting policies 2
Notes on Financial Statements 3 to 33
In terms of our attached report of even date
For P. K. Lilha & Co. For and on behalf of the Board
Chartered Accountants
Firm Reg. No.: 307008E
Sandip Jhunjhunwala K. D. Ghosh
CA. P. K. Lilha Managing Director Director
Partner
M No.: 11092 Ranjan Majumder Mandan Mishra
Chief Financial Offi cer Company Secretary
Place : Kolkata
Dated : 30th May, 2012
PROFIT & LOSS ACCOUNT FOR YEAR ENDED 31ST MARCH, 2012
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
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(Amount in `)
2011-2012 2010-2011
A) CASHFLOW FROM OPERATING ACTIVITIES
Net Profi t Before Tax as per Profi t and Loss account 2,831,326,923 4,222,197,905
Adjusted for:
Depreciation / Amortization 387,876,917 221,217,853
Finance Costs 5,138,040,214 3,314,069,377
Dividend Income (7,385,044) (7,267,046)
Interest Received (20,714,824) (16,326,680)
Loss on Sale/Discard of Fixed Assets (Net) 24,658,162 4,142,801
5,522,475,425 3,515,836,305
Operating Profi t before in working capital changes 8,353,802,348 7,738,034,210
Adjusted for:
Decrease/ (increase) in Inventories (1,629,987,548) (3,309,818,450)
Decrease/ (increase) in Trade Receiveables (2,111,607,209) (2,830,302,961)
Decrease/ (increase) in Loan & Advances (2,977,786,174) (728,940,296)
Decrease/ (increase) in Other Current Assets (19,258,414) 33,046,614
Increase/(Decrease) in Trade Payables 2,562,117,400 2,605,928,783
Increase/(Decrease) in Other Liabilities and Provisions 924,857,617 (70,193,752)
(3,251,664,328) (4,300,280,062)
Cash Generated from operations 5,102,138,020 3,437,754,148
Direct Taxes paid (705,213,364) (1,282,917,709)
Net Cash from/(used in) Operating Activities ( A ) 4,396,924,656 2,154,836,439
B) CASH FLOW FROM INVESTMENT ACTIVITIES
Purchase of Fixed Assets (8,968,174,430) (969,177,533)
Capital Work in Progress 1,185,783,091 (1,485,162,462)
Advances for Capital Expenditure (1,472,487,244) (3,071,602,030)
Investments in Shares/Mutual Fumds (10,345,773) (217,099,650)
Subsidy Received on Fixed Assets 11,000,000 -
Proceeds from sale of Fixed Assets 2,601,434 6,980,546
Dividend Received 7,385,044 7,267,046
Interest Received 20,714,824 16,326,680
Net Cash from/(used in) Investing Activities ( B ) 9,223,523,054) (5,712,467,403)
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012
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(Amount in `)
2011-2012 2010-2011
C) CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Issue of Right Equity Shares (Net of Expenses) - 12,245,040,968
Proceeds from/(Repayment) of Long Term Borrowings :-
~ Issueof Non Convertible Redemable Debenture (Net of Expenses ) 3,402,003,892 953,875,975
~ Repayment of Term Loans (223,849,399) (255,057,236)
~ Proceeds from Corporate Loans 2,202,222,222 (345,800,000)
~ Forex Loss on FCCB Outstanding 680,905,225 -
Proceeds from Unsecured Loans (Net of Expenses) - (4,020,278,500)
Proceeds from/(Repayments) of Short Term Borrowings 3,368,576,903 (2,457,058,259)
Finance Costs (5,138,040,214) (3,314,069,377)
Dividend & Dividend Tax Paid (241,274,413) (353,785,684)
Net Cash from/(used in) Financing Activities ( C ) 4,050,544,216 2,452,867,887
NET INCREASE/(DECREASE) IN CASH ( A+B+C) (776,054,182) (1,104,763,077)
CASH AND CASH EQUIVALENTS(OPENING BALANCE) 3,523,618,725 4,628,381,803
CASH AND CASH EQUIVALENTS(CLOSING BALANCE) 2,747,564,543 3,523,618,725
Notes:
1) The above Cash Flow Statement has been prepared using the Indirect Method set out in Accounting Standard (AS - 3) on Cash Flow
Statements Issued by The Institute of Chartered Accountants of India 2) Cash and Cash Equivalents includes :-
a) Current a/c balances of ` 42,33,100 represented by unpaid dividend
b) Fixed Deposit with Bank ` 1,55,50,000/- are pledged with Banks against Letter of Guarantee, etc
c) Margin Money deposit of ` 4,03,929 are pledged with Banks against Guarantee issued by them
d) Balances with other Banks, ICICI Bank (London Br.) and PICTET & CIE, London are lying abroad for purposes as defi ned
under ECB guidelines issued by RBI 3) Figures in Bracket indicate Cash outfl ows. 4) Previous Year’s fi gures have been reclassifi ed and re stated, wherever required to confi rm with current period’s presentation.
In terms of our attached report of even date
For P. K. Lilha & Co. For and on behalf of the Board
Chartered Accountants
Firm Reg. No.: 307008E
Sandip Jhunjhunwala K. D. Ghosh
CA. P. K. Lilha Managing Director Director
Partner
M No.: 11092 Ranjan Majumder Mandan Mishra
Chief Financial Offi cer Company Secretary
Place : Kolkata
Dated : 30th May, 2012
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1) CORPORATE INFORMATION:
REI Agro Limited was incorporated in 1994 and today it is a leader in the processing of Basmati rice in the world. The company
follows an integrated model of operations right from procurement, maturing, processing, packaging, branding and distribution of
rice. The company procures its raw material from mandis across the states of Haryana, Punjab, Western UP and Uttarakhand. The
company matures its products to ensure a high quality for all its products. The company has set up state of the art processing facilities
with a capacity of producing 10,33,680 MTPA. The company sells its products both in the domestic and the international markets.
In the domestic markets the company's products have a presence in the organised and unorganised retail. The company launched its
"Raindrops" brand in the domestic market and is fast emerging as a leading brand in India.
2) SIGNIFICANT ACCOUNTING POLICIES:
a) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The Financial Statements have been prepared and presented under the historical cost convention using the accrual basis of
accounting and comply with all mandatory Accounting Standards {AS} as specifi ed in the Companies (Accounting Standard)
Rules 2006 , the relevant provisions of Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of
India (SEBI). Accounting Policies have been consistently applied except where a newly issued accounting standard is initially
adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
b) USE OF ESTIMATES:
The preparation of Financial Statements is in conformity with the Generally Accepted Accounting Principles {GAAP}
requires management to make estimates and assumptions that affects the amounts reported in the fi nancial statements and
accompanying notes. Although these estimates are based on management’s best knowledge of current events and actions
the Company may undertake in future, actual results ultimately may differ from the estimates. Any revision to the accounting
estimates is recognized in current and future periods.
c) FIXED ASSETS:
a) Free Hold Land / Lease Hold Land is stated at cost of acquisition inclusive of incidental expenses thereto.
b) Fixed Assets are recorded at cost of acquisition or construction inclusive of inward freight, duties, taxes and other directly
attributable incidental expenses relating thereto less accumulated depreciation.
c) Capital Work-in-Progress includes Advances paid to acquire Fixed Assets and the cost of Fixed Assets together with
incidental Expenses and attributable interest on borrowed Fund for the purpose of acquiring these assets that were not
put to use for their intended use.
d) When assets are sold or discarded, their cost and accumulated depreciation are removed from fi xed asset and any gain/loss
resulting therefrom is refl ected in Profi t & Loss account.
d) INTANGIBLE ASSETS
Acquired Intangible Assets represented Software is recorded at its acquisitions price and related expenses thereon is amortised
over its estimated useful life on straight-line basis, commencing from the date, the asset is available for its use. The Management
has estimated the useful life for such software as 3 {Three} Years. The useful life of the Assets shall be reviewed by the
management at each Balance Sheet Date.
e) DEPRECIATION / AMORTISATION
a) Cost of Lease Hold land is amortized over the period of the lease on Straight-Line Method.
b) Depreciation is provided on the Straight Line Method (SLM) as per rates specifi ed in Schedule XIV of the Companies Act,
1956 (as amended).
f) INVESTMENTS:
Investments are either classifi ed as current or long term based on Management’s intention at the time of purchase. Current
Investments are carried at the lower of cost and fair value of each investment individually. Cost of Overseas investments
comprises the Indian Rupees value of the consideration paid for the investment translated at the exchange rate prevalent at
the date of investment. Long Term Investments are carried at cost after deducting provision, if any, for diminution in value
considered to be other than temporary in nature.
NOTES FORMING PART OF FINANCIAL STATEMENTS
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g) INVENTORIES:
Inventories are valued as under:
a) Raw Materials are valued at lower of cost computed on FIFO basis and net realizable value less VAT where applicable.
b) Finished goods are valued at cost (less realizable value of by-products) or net realizable value whichever is lower.
c) Stores & Spares, Packing Material etc, are valued at cost less VAT wherever applicable.
d) By-Products are valued at estimated realizable value.
h) REVENUE RECOGNITION:
a) Domestic sale is recognized on dispatch to customers and are recorded net of trade discounts, rebates, etc. Export sale is
recognized on the date, Company ships the goods as evidenced by their bill of lading. Sale of energy is accounted on actual
net billing plus claims for short generation wherever applicable and includes income from Lease Rent of WTG.
b) Export incentives are recognized when the right to receive credit as per the terms of incentive is established in respect
of Export made and when there is no signifi cant uncertainty regarding the ultimate collection of the relevant Export
Proceeds.
c) Sale of Certifi ed Emission Reduction (CER) is recognized as income on the delivery of the CER to the customer’s account
as evidenced by the receipt of confi rmation of execution of delivery instructions.
d) Other items of revenue are recognized in accordance with the Accounting Standard (AS-9). Accordingly, wherever there
are uncertainties in the ascertainment / realization of income, the same is accounted when it is measured with certainty.
e) Interest income is recognized on time proportion base taking into account the amount outstanding and the rates applicable.
f) Profi t / Loss on sale of investments is booked on the basis of contract notes/delivery of shares.
g) Dividend income is recognized when the right to receive Dividend is established.
h) Income from Operating Lease is recognized as rentals, as accrued during the year.
i) GOVERNMENT GRANTS:
a) Government Grants and subsidies from the Government are reconginsed when there is reasonable certainty that the
grant/subsidy will be received and all attaching conditions will be complied with.
b) Capital Grant/subsidy against specifi c fi xed assets is set off against the cost of those fi xed assets.
j) FOREIGN CURRENCY TRANSACTIONS:
a) Foreign currency transactions are recorded by applying the relevant exchange rates. Exchange differences arising on foreign
currency transactions settled during the year are recognized in the Profi t & Loss account for the year.
b) All foreign currency denominated monetary Assets & Liabilities are translated at the Exchange rates prevailing on the
Balance Sheet date. The resultant exchange differences are recognized in the Profi t & Loss Account for the year.
c) The Company uses Derivative fi nancial instruments such as forward exchange contracts to hedge its risk associated with
foreign currencies fl uctuations. Profi t / loss on derivatives and fi nancial instruments such as forward exchange contracts
and interest rate swap to hedge risks associated with foreign currency fl uctuations and interest rates are considered as
revenue items on maturity of the contracts.
d) Gain or Loss on restatement of forward exchange contracts for hedging underlying outstanding if any, at the Balance Sheet
date are recognized for the year in which it occurs. The Premium or Discounts on such contracts is recognized in the Profi t
& Loss account over the period of the contract.
k) ACCOUNTING OF CLAIMS:
a) Insurance claims receivable are accounted at the time when certainty of receivable is established.
b) Claims raised by the Government Authorities regarding taxes & duties which are disputed by the company are accounted
based on the merits of each claim.
l) BORROWING COST:
Borrowing costs are recognized as an expense in the year in which they are incurred, except cost that are directly attributable
to the acquisition, construction or installation of qualifying assets which are either kept in Capital work in progress or being
capitalized as part of the cost of the asset.
NOTES FORMING PART OF FINANCIAL STATEMENTS
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m) SECURITIES ISSUE EXPENSE:
Right Issue, & Debenture issue expenses incurred are adjusted against the Securities Premium Account in the year in which they
are incurred in terms of Section 78 (2) of the Companies Act, 1956.
n) IMPAIRMENT OF ASSETS:
The company tests on annual basis the carrying amount of the asset for impairment so as to determine -
a) The provision for impairment loss, if any, or
b) The reversal, if any, required on account of impairment loss recognized in previous periods.
o) EMPLOYEE BENEFITS:
a) Short Term Employee Benefi ts:
The undiscounted amount of short term employee benefi t expected to be paid in exchange for the services rendered by
employee is recognized during the year when the employee remain under the service. This benefi t includes salary, wages,
short term compensatory absences and bonus.
b) Long Term Employee Benefi ts:
i) Defi ned Contribution Scheme- This benefi t includes contribution to Employee’s State Insurance Corporation {ESI}
and Provident Fund Contribution {PF} to the Regional Provident Fund Commissioner. These contributions are
defi ned as an expense in the Profi t & Loss account as and when such contributions are due.
ii) Defi ned Benefi t Scheme- For Gratuity and compensated leave- The Company records its liability for Gratuity and
compensated leave to its employees based on actuarial valuation as at the balance Sheet date, using the projected unit
credit method. Effects of changes in actuarial valuations are immediately recognized in the Profi t & Loss account.
The retirement benefi t obligation recognized in the balance sheet represents value of defi ned benefi t obligation as
reduced by the fair value of planned assets. Actuarial gains/losses are recognized in full during the year in which they
occur.
p) PROPOSED DIVIDEND:
Dividend proposed by the Board of Directors is adjusted in Statement of Profi t & loss under the head Reserve & Surplus,
pending approval at the Annual General Meeting.
q) CASH FLOW STATEMENT:
Cash fl ows are reported using the indirect method, whereby Profi t Before Tax (PBT) is adjusted for the effects of transactions
of a non–cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of income or
expenses associated with investing or fi nancing cash fl ows. The cash fl ow from operating, investing and fi nancing activities of
the company is segregated.
r) TAXATION:
Current Tax is determined on the profi t of the year in accordance with the provisions of Income Tax Act, 1961. Deferred tax is
calculated at the tax rates and laws that have been enacted or substantively enacted by the Balance sheet date and is recognised
on timing differences that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax
assets, subject to consideration of prudence, are recognized and carried forward only to the extent that they can be realized.
s) PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS:
a) Provision is created when there is present obligation as a result of past events that probably requires an outfl ow of
resources and a reliable estimate can be made of the amount of obligation.
b) Contingent Liability is disclosed, unless the possibility of an outfl ow of resources embodying the economic benefi t is
remote.
c) Contingent Assets are neither recognized nor disclosed in Financial Statements.
t) EARNING PER SHARE:
Basic Earning Per Share (EPS) is computed by dividing, the net profi t for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the period. Diluted Earnings Per Share are computed after
adjusting the effects of all dilutive potential equity shares, if any.
NOTES FORMING PART OF FINANCIAL STATEMENTS
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(Amount in `) As At
March 31, 2012
As At
March 31, 20113) SHARE CAPITAL
Authorised Shares Capital 1,600,000,000 Equity shares of ` 1/- each 1,600,000,000 1,600,000,000
(1,600,000,000) 4,000,000 Preference shares of ` 100/- each 400,000,000 400,000,000
(4,000,000) 2,000,000,000 2,000,000,000
Issued, Subscribed and paid-up 957,984,954 Equity shares of ` 1/- each fully paid up 957,984,954 957,984,954
(957,984,954) 4,000,000 4% Non Convertible Redeemable Preference shares of ` 100/- each
(4,000,000) fully paid up 400,000,000 400,000,000 Total 1,357,984,954 1,357,984,954
A) Notes to Equity Share Capital3.1 29,945,550 Equity Shares of Re. 1/- each issued through QIP in FY 2009-10
(29,945,550)3.2 352,398 Equity shares of Re. 1/- each issued against conversion of 350 FCCB of USD ($) 1,000/- each in FY 2009-10
(352,398)3.3 638,656,636 Equity shares issued as right shares of Re. 1/- each during the FY 2010-11
(638,656,636)3.4 16,004,900 Equity Shares of Re. 1/- each representing 800,245 ( 13,56,315) Global Depository Receipt in the ratio of 20
(27,126,300) Equity Shares for each GDR
B) Reconciliation of no of shares is setout below 1 EQUITY SHARE CAPITAL
2011-12 2010-11 No of Shares ` No of Shares `
At the beginning of the year 957,984,954 957,984,954 319,328,318 319,328,318 Add: Increased by Right Issue - - 638,656,636 638,656,636 Outstanding at the end of the year 957,984,954 957,984,954 957,984,954 957,984,954
2 4% Preference Shares 2011-12 2010-11
No of Shares ` No of Shares `
At the beginning of the year 4,000,000 400,000,000 4,000,000 400,000,000 Outstanding at the end of the year 4,000,000 400,000,000 4,000,000 400,000,000
C) Details of shareholders holding more than 5% shares Name of Shareholders As at March 31, 2012 As at March 31, 2011
No. of shares % holding No. of shares % holding Aspective Vanijya Private Limited 128,595,663 13.42% 119,365,663 12.46%Shree Krishna Gyanodaya Flour Mills Pvt Ltd 126,858,763 13.24% 88,219,706 9.21%Snehapushp Barter Pvt Ltd 65,336,400 6.82% 65,336,400 6.82%Subhchintak Vancom Pvt Lld 54,774,000 5.72% 54,774,000 5.72%REI Steel & Timber Pvt Ltd 51,934,680 5.42% 51,934,680 5.42%Wellington Management Co LLP A/c Bay Pond BMD MB 78,881,617 8.23% 78,377,514 8.18%
As per records of the company, including its register of shareholders/ members and other declarations received from shareholders
regarding benefi cial interest, the above shareholding represents both legal and benefi cial ownerships of shares.
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D) Notes to Preference Share Capital
4% Non Convertible Redemmable Preference shares allotted on 30.06.2003 were redeemable at par at any time after a period of 12
years from the date of their allotment. Since then the redemption period has been extended to 30.06.2022 in the Annual General
Meeting held on 27.09.2010.
(Amount in `)
As at
March 31, 2012
As at
March 31, 2011
4) RESERVE AND SURPLUS
A ) Securities Premium Account
Balance as per the last fi nancial statements 15,162,546,807 3,527,717,962
Add: On issue of Right Shares - 11,815,147,766
Less: Debenture Issue Expenses (32,996,108) (36,124,025)
Less: Right Issue Expenses (208,763,434)
Less: Deferred Tax Assets/(Liabilities) (Net) (328,314,171) 64,568,538
T O T A L ( A ) 14,801,236,528 15,162,546,807
B) Debenture Redemption Reserve
Balance as per the last fi nancial statements 153,000,000 23,000,000
Add: Amount of Reserve Created during the Year 175,000,000 130,000,000
T O T A L ( B ) 328,000,000 153,000,000
C) General Reserve
Balance as per the last fi nancial statements 6,100,000,000 4,700,000,000
Add: Amount of Reserve Created during the Year 1,400,000,000 1,400,000,000
T O T A L ( C ) 7,500,000,000 6,100,000,000
D) Surplus in the statement of profi t and loss
Balance as per last fi nancial statements 838,300,910 45,375,237
Profi t for the year 2,262,300,246 2,824,546,936
Less: Appropriations
Transfer to General Reserve (1,400,000,000) (1,400,000,000)
Transfer to Debenture Redemption Reserve (175,000,000) (130,000,000)
Short Provision for Dividend and Dividend Tax - (148,637,422)
Interim Dividend on Equity Shares - (95,798,495)
Dividend Tax on Interim Dividend - (15,910,933)
Proposed Dividend (494,992,477) (207,596,991)
Dividend Tax on Proposed Dividend (80,300,155) (33,677,422)
Total (2,150,292,632) (2,031,621,263)
T O T A L ( D ) 950,308,524 838,300,910
Total ( A + B + C + D ) 23,579,545,052 22,253,847,717
Notes
4.1) During the previous year Securities Premium amounting to ` 1,18,151 Lacs increased on account of issue of 63,86,56,636 Equity
Shares on Right basis at a premium of ` 18.50 per share.
4.2) The Hon’ble Kolkata High Court vide its order has allowed the company to utilize the Securities Premium Account towards
meeting Deferred Tax Liability computed as per the Accounting Standard (AS-22) “ Accounting of Taxes on Income” prescribed
by The Institute of Chartered Accountants of India. Accordingly the Securities Premium Account has decreased by adjustment
of Net Deferred Tax Liabilities of `32,83,14,171/- for the year (Previous Year ` 6,45,68,538/-).
Notes to fi nancial statements as at March 31, 2012
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(Amount in `) NON CURRENT CURRENT ( Refer Note 10)
As at
March 31,2012
As at
March 31,2011
As at
March 31,2012
As at
March 31,20115) LONG TERM BORROWINGS
SecuredA) Non Convertible Debentures 5,825,000,000 2,390,000,000 - - B) Term Loans
B.1) From BanksAllahabad Bank - - - 1,710,000 External Commercial Borrowing (ICICI Bank, London) - 86,962,270 88,672,270 67,826,146 ICICI Bank 2,574,616 - 392,131 - B.2) From Others Infrastructure Development Finance Company
Limited
287,277,500 407,027,500 119,750,000 94,950,000
Indian Renewal Energy Developments Agency
[IREDA]
145,161,000 209,201,000 64,040,000 64,040,000
Total Term Loans 435,013,116 703,190,770 272,854,401 228,526,146 C) Corporate Loans
C.1) From Banks~ State Bank of India (Formerly State Bank of Indore) - 150,000,000 150,000,000 150,000,000 ~ ICICI Bank ( Formerly bank of Rajasthan ) - - - 120,000,000 ~ Jammu & Kashmir Bank Limited 1,500,000,000 - ~ Dhanlaxmi Bank Limited 305,555,554 166,666,668 ~ Lakshmi Vilas Bank Limited 500,000,000 - - - Total Corporate Loans 2,305,555,554 150,000,000 316,666,668 270,000,000 Total Secured Loans 8,565,568,670 3,243,190,770 589,521,069 498,526,146 UnsecuredA) Foreign Currency Convertible Bonds 5,353,527,725 4,672,622,500 - - Total 13,919,096,395 7,915,813,270 589,521,069 498,526,146
5.1 Notes to Non Convertible Debentures
A) Further issue of Debentures: During the year company has issued 935 Secured NCDs @ ` 10 lacs each divided into 10
'Separately Transferable Redemable Principle Part' (STRPP) of ` 1 lacs each and 2500 Secured NCDs @ ` 10 lacs each.
B) Security Coverage :-
a) 11.75% Non-Convertible Debenture:- ` 140 Crores Secured by way of mortagage / charge on the immovable property
situated at Maharajpura , Dist. Mehsana, Gujarat and secured by way of pari passu fi rst charge on fi xed assets of the rice
mill division and Sub servient charge on the total assets of the company to maintain assets coverage 1.25 times.
b) 11.75% Non-Convertible Debenture:- ` 99 Crores Secured by way of mortagage / charge on the immovable property
situated at Maharajpura , Dist. Mehsana, Gujarat and secured by way of pari passu fi rst charge on fi xed assets of the rice
mill division and Sub servient charge on the total assets of the company to maintain assets coverage 1.25 times.
c) 13.00% Non-Convertible Debenture:- ̀ 93.50 Crores Secured by way of mortagage / charge on the immovable property
situated at Maharajpura, Dist. Mehsana, Gujarat and secured by way of pari passu fi rst charge on fi xed assets of the rice
mill division and Sub servient charge on the total assets of the company to maintain assets coverage 1.25 times.
d) 12.00% Non-Convertible Debenture:- ` 250 Crores Secured by way of mortagage / charge on the immovable property
situated at Maharajpura, Dist. Mehsana, Gujarat and secured by way of pari passu fi rst charge on fi xed assets of the rice
mill division and Sub servient charge on the total assets of the company to maintain assets coverage 1.25 times.
Notes to fi nancial statements as at March 31, 2012
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C) Maturity Profi le and rate of interest are set out as follows :-
(Amount in `) Rate of Interest Debenture
Amounts
2013-14 2014-15 2015-16 2016-17
11.75% 1,400,000,000 560,000,000 840,000,000 - - 11.75% 990,000,000 198,000,000 495,000,000 297,000,000 - 13.00% 935,000,000 - 187,000,000 467,500,000 280,500,000 12.00% 2,500,000,000 - 820,000,000 840,000,000 840,000,000
5,825,000,000 758,000,000 2,342,000,000 1,604,500,000 1,120,500,000 5.2 Notes on Term Loans
a) Outstanding amount of loans ̀ 20.92 cr ( ̀ 27.32 cr) to Indian Renewal Enegry and Development Agency (IREDA) is guranteed by promoters of the company
b) Security Coverage:b.1) Allahabad Bank Secured by creation of fi rst charge on 1 WTG (Suzlon Make) at Jaislamer,Rajasthan and Sundry Debtors
thereonb.2) External Commercial Borrowing (ICICI bank, London) Secured by creation of fi rst charge on 17 WTGs (RRB Make) at
Surajbari, Gujarat and with Sundry Debtors thereon.b.3) Vehicle Loan from ICICI Bank has been secured by hypothcation of Vehicle. b.4) Infrastructure Development Finance Company Ltd Secured by creation of fi rst charge on 6 WTG’s( VESTAS Make) at Dhule,
Maharashtra and 12 WTGs (RRB Make) at Tirunelveli, Tamilnadu and Sundry Debtors thereonb.5) Indian Renewal Energy Development Agency : Secured by fi rst charge on 5 WTGs at Jaislamer, Rajasthan and 10 WTGs
(Suzlon Make) at Dhule, Maharashtra and Sundry Debtors thereon together with personal guarantee of some of the directors5.3 Notes on Corporate Loans Security Coverage:
a) State Bank of India ( Formerly State Bank of Indore ) secured by fi rst Pari-Passu charge on the fi xed assets of the Rice Division of the Company and second Pari-Passu charge on the Current Assets of the Rice Division of The Company.
b) ICICI Bank ( Formerly Bank of Rajasthan) secured by fi rst Pari-Passu charge on the fi xed assets of the Rice Division of the Company and second Pari-Passu charge on the Current Assets of the Rice Division of The Company and additional security of the company’s share by promoters.
c) Jammu and Kashmir Bank secured by residual charge on the companies total assets present and future with minimum coverage 1.25 times.
d) Dhanlaxmi Bank secured by fi rst Pari-Passu charge on entire fi xed assets of the Rice Division of the Company and Subservient charge over the entire assets of the Rice Division of the company with minimum assets coverage of 1.25.
e) Lakshmi Vilas Bank secured by fi rst Pari-Passu charge on the fi xed assets of the Rice Division of the Company and Subservient charge over the current assets of the Rice Division of the company both present and future with minimum assets coverage 1.25 times.
5.4 Maturity Profi le of Secured and Unsecured Loans
(Amount in `)Term Loans 2013-14 2014-15 2015-16 2016-17
Secured Loans~ ICICI Bank 438,426 490,182 548,054 1,097,954 ~ Infrastructure Development Finance Company Limited 119,750,000 119,750,000 47,777,500 - ~ Indian Renewal Energy Development Agency 64,040,000 64,040,000 17,081,000 - Corporate Loans~ The Jammu & Kashmir Bank Limited 125,000,000 500,000,000 500,000,000 375,000,000 ~ Dhanlaxmi Bank Limited 166,666,668 138,888,886 - - ~ Lakshmi Vilas Bank Limited 250,000,000 250,000,000 - -
725,895,094 1,073,169,068 565,406,554 376,097,954 Unsecured Loans Foreign Currency Convertible Bonds - 5,353,527,725 - - Grand Total 725,895,094 6,426,696,793 565,406,554 376,097,954
Notes to fi nancial statements as at March 31, 2012
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5.5 5.5% Unsecured Foreign Currency Convertible Bonds The Company issued on 13.11.2009, 5.5% 105000 Foreign Currency Convertible Bonds (FCCB) of US $ 1000 each aggregating US
$105 million [` 493.71 Crores] at par. The bonds are redeemable on 13th November, 2014 unless previously converted; these bonds
are convertible into equity shares at an initial conversion price of ` 46.70 per equity share with existing fi xed rate of exchange on
conversion @ ` 47.02 = US $ 1.00 at the option of the bond holder at any time on or after 22nd December, 2009 and prior to the close of business on 13th November, 2014. The outstanding 104,650 bonds when fully converted would result in issue of additional
105,367,088 equity shares of ` 1/-each. Apart from this, FCCB holders retain the right to subscribe in Equity Shares to the extent of 210,734,176 Equity Shares of the Company as per Letter of Offer issued by the Company for Issue of Right Equity Shares in the
ratio of 2:1 at a price of ` 19.50 (Including Share Premium of ` 18.50 per share) at the time of conversion into Equity Shares on or before 13th November, 2014.
6) DEFERRED TAX LIABILITY (NET)
(Amount in `) As at
March 31, 2012
As at
March 31, 2011 Deferred Tax Liability Timing difference in Depreciable assets 1,358,195,616 806,118,693
Deferred Tax AssetsExpenses allowable against taxable income in future years ~ On MAT carried forward 222,895,934 - ~ On Gratuity & Leave encashment 5,602,340 4,735,521 ~ On Provision for doubtful debts 1,530,645 1,530,645
230,028,919 6,266,166 DEFERRED TAX LIABILITY (NET) 1,128,166,697 799,852,527
7) PROVISIONS (Amount in `) Non Current Current
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011Provision for Employee Benefi ts ~ Gratuity 14,003,624 11,785,923 670,022 413,494 ~ Leave encashment 2,569,521 2,382,887 24,023 13,231
16,573,145 14,168,810 694,045 426,725 Provision for Taxation 565,007,231 1,397,507,750 Provision for Proposed Dividend 494,992,477 207,596,991 Provision for Dividend Tax on Proposed Dividend 80,300,155 33,677,422 TOTAL 16,573,145 14,168,810 1,140,993,908 1,639,208,888
8) SHORT TERM BORROWINGS
(Amount in `) As at
March 31, 2012
As at
March 31, 2011SecuredA) Working Capital Loans from Banks
a) Rupee Denominated Loans Cash Credit/ WCDL/Short Term Loans 25,415,771,886 26,832,408,464 b) Foreign Currency Loans PCFC 3,418,769,783 183,556,302
B) Commercial Papers 4,650,000,000 3,100,000,000 Total 33,484,541,669 30,115,964,766
Notes to fi nancial statements as at March 31, 2012
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8.1 Notes to Working Capital Loans
A) Security Coverage :-
a) Working Capital Loans are secured by creation of fi rst charge on pari passu basis on hypothecation of stocks of Rice,
Paddy, Book Debts & Stores,etc, both Present and Future of the Rice Division and by second charge on all Fixed Assets
both Present and future of the Rice Division.
b) Commercial Papers are secured by earmarking of working capital limits
B) Maximum Balance outstanding in case of Commercial Papers during the year ` 735 crores (previous year ` 420 crores)
9) TRADE PAYABLE
(Amount in `)
As at
March 31, 2012
As at
March 31, 2011
Acceptances 999,978,104 -
Creditors for Others 4,623,143,756 3,061,004,460
5,623,121,860 3,061,004,460
Notes
1) Trade Payables are due in respect of goods purchases or services received ( including from employees, professionals and
others under contracts) in the normal course of business
2) Based on the information available with the company there are no dues payable to Micro, Small and Medium Enterprises as defi ned
in The Micro, Small and Medium Enterprises Development Act 2006.
This has been determined to the extent such parties have been identifi ed on the basis of information available with the Company.
This has been relied upon by the Auditors.
10) OTHER CURRENT LIABILITIES
(Amount in `)
As at
March 31, 2012
As at
March 31, 2011
A) Current Maturities of Long Term Borrowings ( refer Note 5 ) 589,521,069 498,526,146
B) Interest accrued and due on
Term Loans - 80,032
Corporate Loans 1,655,560 2,873,577
Short Term Borrowings 160,680,782 7,232,780
C) Interest accrued but not due on borrowings 194,438,203 99,817,371
D) Advance from customers 51,692,040 -
E) Payable for Capital expenditures 827,565,312 181,939,114
F) Statutory Dues 28,080,779 49,963,750
G) Investor Education and Protection fund:
Unpaid dividends 4,233,100 4,253,190
1,857,866,845 844,685,960
Notes to fi nancial statements as at March 31, 2012
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21
918
,986
,399
Win
dfar
m G
ener
ator
s 2
,373
,069
,544
-
- 2
,373
,069
,544
6
58,7
85,1
75
125
,298
,072
-
784
,083
,247
1
,588
,986
,297
1
,714
,284
,369
Offi
ce E
quip
men
t 2
,492
,478
1
7,00
0 -
2,5
09,4
78
792
,405
1
19,1
43
- 9
11,5
48
1,5
97,9
30
1,7
00,0
73
Tube
wel
l 4
68,8
50
- -
468
,850
2
25,4
98
22,
270
- 2
47,7
68
221
,082
2
43,3
52
Com
pute
r 5
,081
,777
8
30,2
25
- 5
,912
,002
3
,695
,280
8
33,0
42
- 4
,528
,322
1
,383
,680
1
,386
,497
Vehi
cles
11,
201,
039
4,3
35,5
39
1,8
32,2
32
13,
704,
346
4,4
43,1
76
1,2
07,2
86
412
,742
5
,237
,720
8
,466
,626
6
,757
,863
Furn
iture
& F
ixtu
res
4,6
70,5
10
76,
525
- 4
,747
,035
1
,704
,070
2
97,4
63
- 2
,001
,533
2
,745
,502
2
,966
,440
Tota
l 5
,257
,708
,781
8
,968
,174
,430
5
6,76
8,67
5 14
,169
,114
,536
1
,195
,381
,566
3
86,6
68,4
65
18,
509,
079
1,5
63,5
40,9
52
12,6
05,5
73,5
84
4,0
62,3
27,2
15
Inta
ngib
le A
sset
s -
Com
pute
r Sof
twar
e 3
,625
,720
-
- 3
,625
,720
6
,622
1
,208
,452
-
1,2
15,0
74
2,4
10,6
46
3,6
19,0
98
Tota
l 5
,261
,334
,501
8
,968
,174
,430
5
6,76
8,67
5 14
,172
,740
,256
1
,195
,388
,188
3
87,8
76,9
17
18,
509,
079
1,5
64,7
56,0
26
12,6
07,9
84,2
30
4,0
65,9
46,3
13
Prev
ious
Yea
r Tot
al 4
,316
,713
,863
9
69,1
77,5
33
24,
556,
895
5,2
61,3
34,5
01
987
,603
,883
2
21,2
17,8
53
13,
433,
548
1,1
95,3
88,1
88
4,0
65,9
46,3
13
Not
e :-
1.
Sale
s/A
djus
tmen
ts in
Pla
nt &
Mac
hine
ry r
epre
sent
s G
ovt
Gra
nts/
Sub
sidy
rece
ived
by
the
com
pany
dur
ing
the
year
` 1
,10,
00,0
00 r
ecei
ved
from
Gov
t of
Har
yana
thr
ough
Har
yana
Rene
wab
le E
nerg
y D
evel
opm
ent A
genc
y (H
RED
A) f
or se
tting
up
BIO
MA
SS (R
ice
Hus
k) C
o-ge
nera
tion
proj
ect f
or c
aptiv
e U
se
2.
Incl
udes
Add
ition
to F
reeh
old
Land
` 6
7,65
,000
/- a
t Baw
al (h
arya
na) f
or w
hich
Reg
istra
tion
in th
e na
me
of th
e C
ompa
ny is
yet
to b
e ex
ecut
ed
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
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12) NON-CURRENT INVESTMENTS (Long Term Investments)
Non-Trade Investments* (Amount in `)Number of Shares Company Face value
Per Share
(`)
As at
March 31, 2012
As at
March 31, 2011
A) In Equity Shares -Quoted, Fully paid up 35,000 (35,000) Allahabad Bank 10 2,870,000 2,870,000 10,000 (10,000) Jyoti Structure Ltd 2 546,155 546,155
398 (398) Punjab National Bank 10 155,220 155,220 5,500 (5,500) Reliance Capital Ltd 10 2,255,907 2,255,907
5,827,282 5,827,282 B) In Mutual Funds-Fully paid up
1,000,000 (1,000,000) Reliance Alternative Investments 10 10,000,000 3,500,000 Funds, Private Equity Scheme-I**
C) In Equity Shares, Fully paid up (In Associate Companies) Un-Quoted
5,256,277 (5,256,277) Varrsana Ispat Limited 10 1,245,699,650 1,245,699,650 Quoted
35,000,000 (35,000,000) REI Six Ten Retail Ltd 2 70,000,000 70,000,000 1,315,699,650 1,315,699,650
D) In Equity Shares of Wholly Owned Overseas Subsidiary Companies (Unquoted)300 - Ammalay Commoditiess JLT, UAE AED 1,000 3,679,669 -
(Previously known as REI Agro Traders JLT)10 - Auckland Holdings Ltd, Mauritius $100 55,267 - 10 - Holy Stars Ltd, Mauritius $100 55,267 - 10 - Orient Agro (M) Ltd, Mauritius $100 55,570 -
3,845,773 - Total Non-Current Investments (A+B+C+D) 1,335,372,705 1,325,026,932 Aggregate Value of Quoted Investments 75,827,282 75,827,282 Market Value of Quoted Investments 427,326,100 1,556,067,230 Aggregate Value of Un-Quoted Investments 1,259,545,423 1,249,199,650
* Diminution in the value of Investments if any, has not been recognised as in the opinion of Management the fall is not permanent in nature.
** During the year ` 65,00,000/- has been paid to make them fully paid up
13) LOANS AND ADVANCES (Unsecured, considered good)
Long Term Short Term
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011Advance against Capital Expenditure 4,784,706,429 3,312,219,185 - - Loans to Subsidiary Company - 139,391,000 - Share Application Money to Subsidiary Companies 243,149,473 - Security Deposits 43,679,453 133,892,173 - - Other Advances - - 7,565,110,596 5,081,601,549 Advance Income Tax - - 562,046,926 1,256,081,188 Balance With Govt Deptt. Income Tax Deptt - - 16,224 248,867 Sales Tax Deptt - - - 2,547,923 Service Tax Deptt - - 395,776 - DEPB Receivables - - - 6,429,010 Prepaid expenses - - 255,758,914 47,275,311 Total 4,828,385,882 3,446,111,358 8,765,868,909 6,394,183,848
Notes to fi nancial statements as at March 31, 2012
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13.1 Notes to Loans and Advances to Related parties
(Amount in `)
As at
March 31, 2012
As at
March 31, 2011
a) Disclosure as per clause 32 of the listing agreement
Loans to 100% Subsidiary company - Ammalay Commoditiess JLT, UAE 139,391,000 -
(Previously known as REI Agro Traders JLT)
Loans given to subsidiary is re-payable on demand including interest.
b) Share Application Money Paid to Wholly owned Subsidiary companies at Mauritius
i) Auckland Holdings Ltd for 1880 shares @ $ 100 each fully paid, Alloted on 18-04-12 9,435,199 -
ii) Orient Agro (M) Ltd for 11770 shares @ $ 100 each fully paid, to be alloted on or
before 30-06-12
60,284,741 -
iii) Holy Stars Ltd for 34610 shares @ $ 100 each fully paid, 23610 alloted on 18-04-12
and balance 11,000 to be alloted on or before 30-06-12
173,429,533 -
243,149,473
14) INVENTORIES
(Valued at lower of cost and net realizable value)
(Amount in `)
As at
March 31, 2012
As at
March 31, 2011
Raw Materials 24,571,581,724 32,984,884,572
Finished Goods 12,751,620,103 2,705,535,159
Stores, Spares and Packing Materials 17,530,605 20,325,153
Total 37,340,732,432 35,710,744,884
15) TRADE RECEIVABLES
(Amount in `)
Non Current Current
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
Unsecured
Debt outstanding for a period exceeding six months
~ Considered Good - - 54,649,339 686,007,636
~ Considered Doubtful 4,717,660 4,717,660 - -
4,717,660 4,717,660 54,649,339 686,007,636
Less: Provision for doubtful Trade Receivables (4,717,660) (4,717,660) - -
- - 54,649,339 686,007,636
Other Receivables
~ Considered Good - - 13,247,713,525 10,504,748,019
Total - - 13,302,362,864 11,190,755,655
Notes to fi nancial statements as at March 31, 2012
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
44
16) CASH AND BANK BALANCES
(Amount in `)
Current
March 31, 2012 March 31, 2011
Cash and cash equivalents
Cash in hand ( as certifi ed ) 36,186,456 6,263,283
Balances with Schedule Banks:
On Current Accounts 42,443,787 102,551,732
On Unclaimed Dividend Account 4,233,100 4,258,835
Fixed Deposit with Banks [ Including deposit of ` 10 Lacs
(Previous year ` 10 Lacs) with Maturity of More than 12 months ]
140,800,328 101,564,739
Margin money Deposit ( Against Guarantee ) 403,929 2,531,500
187,881,144 210,906,806
Balances with Other Banks *
On current accounts [ ICICI Bank, London ] 17,599,167 15,360,762
Deposits with PICTET & CIE, London 2,505,897,776 3,291,087,874
2,523,496,943 3,306,448,636
Total 2,747,564,543 3,523,618,725
Maximum Balance outstanding
ICICI Bank , London 17,599,167 178,268,783
PICTET & CIE, London 3,291,087,874 4,074,263,635
* The above balances are available for purposes as defi ned under ECB Guidelines issued by RBI
17) OTHER CURRENT ASSETS
(Unsecured, considered good )
Interest Accrued on Fixed Deposits 10,819,997 1,185,599
Interest Accrued on Loans to Subsidiary * 8,294,907 -
Interest Receivable on Advances - 4,670,891
Subsidy Receivable from HAREDA 6,000,000 -
Total 25,114,904 5,856,490
* Represents Interest receivable from Wholly owned Subsidiary Ammalay Commoditiess JLT, UAE (Previously known as REI Agro
Traders JLT)
Notes to fi nancial statements as at March 31, 2012
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
45
Notes to fi nancial statements for the year ended March 31, 2012
18) REVENUE FROM OPERATIONS
(Amount in `) 2011-12 2010-11
Revenue from operations Sale of Products 42,004,965,394 37,027,657,678 Sale of Energy (Including lease rent) 236,445,015 215,868,114 Sales of Carbon Credit 13,433,942 -
42,254,844,351 37,243,525,792 18.1) Particulars of Sale of Products
a) Rice SegmentRice/Paddy 37,307,993,316 37,009,856,052 Food Grain Items 4,695,032,085 - Scrap 1,939,992 17,801,626
42,004,965,393 37,027,657,678 b) Windmill Segment
Sales of Electricity (WTG) 198,367,035 177,790,145 Lease Rent 38,077,980 38,077,969
236,445,015 215,868,114
18.2) Based On The Guiding Principles In The Accounting Standards On Segment Reporting (As – 17) The Company Is Primarily
In The Business Of Manufacturing Of Rice And Energy Generation From Windfarm. Since The Revenue, Results And Assets
From Windfarm Is Less Than 10% Of These Criterian, Windfarm Energy Has Not Been Considered As Separate Segment. The
Companies Business Activity Falls Within A Single Geographical And Business Segment Rice And Windfarm Energy And It Has No
Other Primary Reportable Segment.
19) OTHER INCOME
(Amount in `) 2011-12 2010-11
Interest onFixed Deposit with Banks 12,419,917 16,326,680 Loans and Advances 8,294,907 - (From Subsidiary Company)
Dividend Income from Long Term Investments 7,385,044 7,267,046 Profi t on Sales of Long Term Investments 15,004,000 Insurance Claim 937,001 49,259 Other Non Operating Income 2,916,564 -
31,953,433 38,646,985
20) COST OF RAW MATERIALS CONSUMED (Indigenious)
(Amount in `) 2011-12 2010-11
Inventory at the beginning of the year 32,984,884,572 27,933,000,464 Add: Purchases 28,638,917,086 24,763,900,007
61,623,801,658 52,696,900,471 Less: Inventory at the end of the year 24,571,581,724 32,984,884,572 Cost of Raw Material Consumed 37,052,219,934 19,712,015,899
Notes:
a) Purchases of Raw Materials consist of Paddy and Rice.
b) The cost of raw materials of consumed shown above is computed on basic value after adjusting excess and shortages,discount
received if any, etc. plus all expenses directly related with the purchase of raw materials.
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46
(Amount in `) 2011-12 2010-11
21) PURCHASES OF STOCK IN TRADE
Food Grain Items 4,501,951,681 - Rice / Paddy 960,682,323 6,826,689,752
5,462,634,004 6,826,689,752 22) CHANGES IN INVENTORIES OF FINISHED GOODS
Closing Stock of Finished Goods 12,751,620,103 2,705,535,159 Opening Stock of Finished Goods 2,705,535,159 4,447,686,003
(10,046,084,944) 1,742,150,844 23) EMPLOYEE BENEFITS EXPENSES
Salary and wages 201,009,690 151,968,746 Contribution to provident & other funds 6,346,963 4,968,283 Gratuity 2,892,703 5,284,949 Leave Encashment Expenses 4,766,390 4,487,746 Staff Welfare Expenses 6,045,723 5,329,836 Total 221,061,469 172,039,560
23.1) Notes to Employee Benefi ts Expenses
a) Gratuity and leave encashment expenses includes provision of ` 26,71,655/- for the year ended March 31 ‘2012.
b) Disclosures pursuant to Accounting Standard-15 (Revised) ‘Employees Benefi ts’:
i) Defi ned Contribution Plans
In accordance with the Accounting Standard 15 on employee benefi ts issued by The Institute of Chartered Accountants
of India, the company makes payment of its contribution to Recognized Provident Fund Commissioner (RPFC).
ii) Defi ned Benefi t Plans
In keeping with the company Gratuity scheme (Defi ned Benefi t Plan) eligible employees are entitled to gratuity benefi ts
at one and half month’s eligible salary for each completed year of service on Retirement / Death / Termination. Vesting
occurs upon completion of 5 years of service subject to the payment of Gratuity Act, 1972. The present value of obligation
is determined based on actuarial valuation using the ‘projected unit credit method’. Obligation for the leave encashment
is recognized in the same manner as Gratuity. Following are the further particulars with respect to Gratuity & Leave
Encashment.2011-12 2010-11
Gratuity
(` in lacs)
Leave
Encashment
(` in lacs)
Gratuity
(` in lacs)
Leave
Encashment
(` in lacs) Changes in Defi ned Benefi t ObligationsPresent value of obligation at the beginning of the year 121.99 23.96 70.55 14.98 Service Cost 16.22 4.34 20.01 7.65 Interest Cost 10.75 2.00 7.70 1.56 Actuarial (Gain)/Loss 1.96 41.32 25.13 35.67 Benefi t Paid (4.18) (45.69) (1.40) (35.90)Present Value of obligation at the end of the year 146.74 25.93 121.99 23.96 Change in Plan AssetsPlan Assets at the beginning of the year - - - - Actual return on plan Assets - - - - Contribution by the Company 4.18 45.69 1.40 35.90 Actual Benefi ts paid (4.18) (45.69) (1.40) (35.90)Actuarial (Gain)/ Loss - - - - Plan Asset at the end of year - - - -
Notes to fi nancial statements for the year ended March 31, 2012
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47
2011-12 2010-11
Gratuity
(` in lacs)
Leave
Encashment
(` in lacs)
Gratuity
(` in lacs)
Leave
Encashment
(` in lacs)
Present value of the obligation at the end of the year
Reconciliation of the present value of defi ned obligation and
fair value of planned Assets
146.74 25.93 121.99 23.96
Fair value of plan Assets at the end of the year - - - -
Liability / (Asset) recognized in the Balance Sheet 146.74 25.93 121.99 23.96
Expenses Charged to profi t & Loss Account:
Current Service Cost 16.22 4.34 20.01 7.65
Interest Cost 10.75 2.00 7.70 1.56
Expected return on Plan Assets - - - -
Actuarial (Gain ) / Loss 1.96 41.32 25.13 35.67
Total Expenses charged/(to be charged) in Profi t & Loss A/c on
accrual
28.93 47.66 52.84 44.88
Actuarial Assumption
Discount rate Per Annum compound 8% 8% 8% 8%
Rate of Increase in Salary 5% 5% 5% 5%
Rate of Return on Plan Assets 0% 0% 0% 0%
24) FINANCE COSTS
(Amount in `)
2011-12 2010-11
Interest expense* 4,883,093,203 3,224,673,816
Other Borrowing Costs
~ Bank Charges 3,423,968 18,720,654
~ Processing fee and Commitment charges 60,364,186 51,008,070
~ Loss on Foreign Exchange Fluctuation (Net) 174,682,459 9,621,599
Interest on Delay payment of Income Tax/Dividend Tax/TDS 16,476,398 10,045,238
Total 5,138,040,214 3,314,069,377
*Interest Expenses is net of Interest Received on Advances/Deposit ` NIL ( Previous Year 334.94 Lacs)
25) DEPRECIATION AND AMORTIOSATION EXPENSES
2011-12 2010-11
Depreciation of Tangible Assets 386,668,465 221,211,231
Amortization of intangible assets 1,208,452 6,622
387,876,917 221,217,853
Notes to fi nancial statements for the year ended March 31, 2012
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
48
26) OTHER EXPENSES
(Amount in `)
2011-12 2010-11
Stores, Spares & Packing Material Consumed (100% indigneous) 240,329,173 313,080,236
Power & Fuel 113,774,334 77,963,493
Security Charges 16,900,361 13,947,700
Hire Charges 3,235,211 1,967,754
Repairs & Maintenance
~ Plant & Machinery 12,957,062 5,988,077
~ Buildings 4,429,327 1,755,929
~ Windfarms 49,974,641 40,633,050
~ others 1,771,389 1,187,970
Rent 122,610,089 26,557,736
Rates & Taxes 20,599,053 38,183,213
Key Man Insurance 1,211,306 1,211,306
Insurance 15,389,526 20,669,236
ECGC Premium 7,712,705 10,372,951
Postage & Telephone 4,053,623 4,658,225
Auditors' Remuneration 2,466,667 3,089,961
Commission to a Director 25,000,000 -
Directors' Sitting Fees 220,000 220,000
Filing Fees 15,000 22,998
Travelling & Conveyance 19,120,401 25,068,336
Miscellaneous Expenses 101,234,622 180,698,860
Bad Debts Written off 106,534,737 -
Carriage Outward and Clearing Charges, etc 293,191,145 248,617,222
Advertisement 6,737,249 2,823,772
Brokerage & Selling Expenses 42,020,011 6,585,835
Purchase /Sales Tax 3,577,473 42,344,926
Loss on sale of Fixed Assets 24,658,162 4,142,801
1,239,723,267 1,071,791,587
26.1) Auditors Remuneration Includes
(Amount in `)
2011-12 2010-11
Audit fee 1,300,000 1,300,000
Tax Audit Fees 200,000 200,000
For Certifi cation, Right (QIP/ FCCB) issue 500,000 1,050,000
For Service tax 206,000 262,650
For Re-imbursement of Expenses 260,667 277,311
2,466,667 3,089,961
Notes to fi nancial statements for the year ended March 31, 2012
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
49
27) A) EARNING PER SHARE ( EPS )
(Amount in `)
As at
31st Mar 12
As at
31st Mar 11
Profi t After Tax 2,262,300,246 2,824,546,936
Less: Preference Dividend Holders Right
Preference Dividend @ 4% on 40 cr (16,000,000) (16,000,000)
Tax on Preference Dividend @ 16.2225% (2,595,600) (2,595,600)
Profi t for Equity Shareholders 2,243,704,646 2,805,951,336
Weighted No of Equity Shares 957,984,954 804,672,891
Effective No of Equity shares on Conversion of $ 104650000 FCCB
[ 104650000 x 47.02 / 46.7 ] 105,367,088 105,367,088
Grand Total Weighted No of Equity Shares 1,063,352,042 910,039,979
Basic EPS 2.34 3.49
Diluted EPS 2.11 3.08
B) Contingent Liabilities and Commitments (to the extend not provided for)
(` in Lacs)
As at
31st Mar 12
As at
31st Mar 11
Contingent Liabilities
i) Outstanding Guarantees and counter guarantees to IndusInd Bank in respect of guarantees
given by the Bank in favour of Govt Authorities and Others (Deposit held ` 70 Lacs)
570 78
ii) The company has given Corporate Guarantee as Holding Co. to the banks for its subsidiary
companies against which outstanding as on 31.03.2012
5,932 -
Commitments
Estimated amounts of unexecuted capital contracts 8,022 3,476
( Net of Advances and Deposit )
28) Operating Lease
The Company has given on Operating Lease 17 Wind Turbine Generator (WTG) having capacity of 10.2 MW situated at Kutch,
Gujarat. Disclosures required as per Accounting Standards-19 issued by the ICAI are given below:
As at
31st Mar 12
As at
31st Mar 11
i) Gross Block of Fixed Assets
a) Free hold Land 10,200,000
b) Cost of 17 WTG ( Including Interest, etc) 522,433,161 532,633,161 532,633,161
131,734,838 104,150,367
ii) Accumulated Depreciation
iii) Future Lease Rent Receivables
a) Not later than one year 42,000,000 42,000,000
b) Later than one year and not later than fi ve year 168,000,000 168,000,000
c) Later than fi ve year - 42,000,000
Notes to fi nancial statements for the year ended March 31, 2012
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29) Related Party Disclosure
In accordance with Accounting Standard 18 on Related Party Disclosure issued by the Institute of Chartered Accountants of India,
the company has complied with the required information as per details given below:
A) List of Related Parties
i) Key Management Personnel
a) Mr. Sanjay Jhunjhunwala (Chairman)
b) Mr. Sandip Jhunjhunwala (Managing Director)
ii) Name of Companies, where control exist (either individually or with others)
a) Aspective Vanijya Pvt. Ltd.
b) Jagadhatri Tracon Pvt. Ltd.
c) REI Steel & Timber Pvt. Ltd.
d) Snehapusph Barter Pvt. Ltd.
e) Subh Chintak Vancom Pvt. Ltd.
f) Shree Krishna Gyanodaya Flour Mills Pvt. Ltd.
g) Dr. ING N.K. Gupta Technical Consultants (P) Ltd.
iii) Director's Relatives
a) Mr. Kailash Chandra Jhunjhunwala
b) Mrs. Koushalya Devi Jhunjhunwala
c) Mrs. Sangita Jhunjhunwala
d) Mrs. Suruchi Jhunjhunwala
e) Mr. Akshay Jhunjhunwala
f) Mr. Ambuj Jhunjhunwala
g) Mr. Arnav Jhunjhunwala
h) Mr. Shreyans Jhunjhunwala
iv) Wholly owned Subsidiary Companies
a) Ammalay Commoditiess JLT, UAE
b) Auckland Holdings Ltd, Mauritius
c) Holy Stars Ltd, Mauritius
d) Orient Agro (M) Ltd, Mauritius
v) Associates Companies
a) REI Six Ten Retail Limited
b) Varrsana Ispat Limited
B) Transaction with Related Parties
Sl
No
Transactions Control
Exists
Key Management
Personnel (KMP)
Relative of
KMP
Subsidiary
1 Dividend Paid 87,906,681 3,062,304 430,740 - ~ on Equity Shares (104,823,913) (4,593,456) (646,110) -
2 Interest Receivables - - - 8,294,907 ~ Ammalay Commoditiess JLT, UAE - - - ( NIL ) (Previously known as REI Agro TradersJLT)
3 Managerial Remuneration - 50,377,340 - - - (23,844,916) - -
4 Sale of Rice~ REI Six Ten Retail Ltd 3,192,807,282 - - -
(3,697,424,732) - - -
Notes to fi nancial statements for the year ended March 31, 2012
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Sl
No
Transactions Control
Exists
Key Management
Personnel (KMP)
Relative of
KMP
Subsidiary
5 Trade Receivables~ REI Six Ten Retail Ltd 1,525,977,994 - - -
(3,246,287,108) - - - 6 Investment in Shares
~ REI Six Ten Retail Ltd 70,000,000 - - - (70,000,000) - - -
~ Varrsana Ispat Ltd 1,245,699,650 - - - (1,245,699,650) - - -
~ Ammalay Commoditiess JLT, UAE - - - 3,679,669 (Previously known as REI Agro Traders JLT) - - - ( NIL )~ Auckland Holdings Ltd, Mauritius - - - 55,267
- - - ( NIL )~ Holy Stars Ltd, Mauritius - - - 55,267
- - - ( NIL )~ Orient Agro (M) Ltd, Mauritius - - - 55,570
- - - ( NIL )7 Share Application Money Paid
~ Auckland Holdings Ltd, Mauritius 9,435,199( NIL )
~ Holy Stars Ltd, Mauritius 173,429,533( NIL )
~ Orient Agro (M) Ltd, Mauritius 60,284,741( NIL )
8 Loans Given~ Ammalay Commoditiess JLT, UAE - - - 139,391,000 ( Previously known as REI Agro Traders JLT) - - - ( NIL )
9 Professional Fee Paid ~ Dr. ING N.K. Gupta Technical Consultants
(P) Ltd.
3,309,000 - - -
(2,206,000) - - -
30) DETAILS OF FOREIGN CURRENCY TRANSACTIONS
(Amount in `) 2011-12 2010-11
30.1) FOB value of Finished Goods Export 2,243,144,208 4,185,440,239 30.2) CIF Value for Capital Goods Import 13,731,241 449,292,782
Expenditure in Foreign Currency Foreign Traveling 8,646,411 16,266,928 Registration Fees 234,787 482,288 Interest Payment On FCCB 324,018,002 297,553,870 On ECB 3,083,726 4,230,884 Rating Charges 6,966,261 - Listing Fees 696,768 1,316,220 Sale Promotion Expenses 618,129 1,104,565 Right Issue Expenses - 8,326,257
Notes to fi nancial statements for the year ended March 31, 2012
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2011-12 2010-11
30.3) Amounts remitted on a/c of Didivend to FII/Non-Resident Shareholders
On Equity Shares 2,122,560 2,122,560
On Preference Shares 16,000,000 16,000,000
30.4) No of Non-Resident Share holders
On Equity Shares 4 4
On Preference Shares 4 4
30.5) No of shares held by Non-Resident Share holders
On Equity Shares 7,075,200 7,075,200
On Preference Shares 4,000,000 4,000,000
31) The year end foreign currency exposures that have not been hedged by a derivative instruments or otherwise is given
below:
2011-12
Receivables/ (Payable)
2010-11
Receivables/ (Payable)
(in `) (in $ ) (in `) (in $ )
On PCFC Facilities (3,418,769,783) (66,829,626) 183,556,302 (4,111,003)
FCCB ( Net of Deposit abroad ) (2,830,030,782) (55,321,040) 1,366,173,864 (30,597,399)
External Commercial Borrowings (88,672,271) (1,733,353) (154,788,416) (3,466,706)
Trade Receivable ( For Export ) 1,094,256,146 21,390,364 935,733,702 20,957,082
32) Previous year’s fi gures have been regrouped/re-arranged wherever considered necessary
33) Figures in brackets in Notes denote previous year’s fi gure
In terms of our attached report of even date
For P. K. Lilha & Co. For and on behalf of the Board
Chartered Accountants
Firm Reg. No.: 307008E
Sandip Jhunjhunwala K. D. Ghosh
CA. P. K. Lilha Managing Director Director
Partner
M No.: 11092 Ranjan Majumder Mandan Mishra
Chief Financial Offi cer Company Secretary
Place : Kolkata
Dated : 30th May, 2012
Notes to fi nancial statements for the year ended March 31, 2012
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TO THE MEMBERS OF
REI AGRO LIMITED
1. We have audited the attached Consolidated Balance Sheet
of REI AGRO LIMITED (THE Holding Company) and
its subsidiaries (collectively referred to as “the Group”) as at
31st March, 2012 and Consolidated Profi t & Loss Account
and Consolidated Cash Flow Statement for the period
ended on that date annexed thereto. These Consolidated
Financial Statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on
these Financial Statements based on our audit.
2. We conducted our audit in accordance with the Auditing
Standards generally accepted in India. Those Standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the fi nancial statements are free of
material misstatement. An audit includes examining on test
basis evidence supporting the amounts and disclosures in
the fi nancial statements. An audit also includes assessing the
accounting principles used and signifi cant estimates made by
the management, as well as evaluating the overall fi nancial
statement presentation. We believe that our audit and the
report of other auditors provide a reasonable basis for our
opinion.
3. Financial Statements of an associate in which the share of
profi t of the Group is ` 7.58 lacs has been audited by us.
4. We did not audit the fi nancial statement of one subsidiary
company whose fi nancial statements refl ect total assets of
` 25,379.69 lacs as at 31st March, 2012, total revenue of `
1,03,812.14 lacs and net cash fl ows of ` 2,388.28 lacs for the
period ended on that date. The fi nancial statement of the
subsidiary was audited by other auditor, for the purpose of
consolidation, whose report has been furnished to us, and in
our opinion, in so far as it relates to the amounts included in
respect of this subsidiary, is based solely on the report of the
other auditors.
5. We have relied on the unaudited fi nancial statements of
certain subsidiaries whose fi nancial statements refl ect total
assets of ̀ 16,598.77 lacs as at 31st March, 2012, total revenue
of ` 11,879.53 lacs, cash fl ow amounting to ` 4,097.87 lacs
for the period then ended and on the unaudited fi nancial
statements of an associate in which the share of profi t of the
Group is ` 231.17 lacs. These unaudited fi nancial statements
as approved by the respective Board of Directors of these
companies have been furnished to us by the Management
and our report in so far as it relates to the amounts included
in respect of the subsidiaries and associate is based solely on
such approved unaudited fi nancial statements.
6. We report that :
a) The Consolidated Financial Statements have been
prepared by the Company in accordance with
the requirements of Accounting Standard (AS)-
21 on “Consolidated Financial Statements”, AS-
23, “Accounting for Investments in Associates in
Consolidated Financial Statements”, as notifi ed by the
Companies (Accounting Standards) Rules, 2006 and,
b) In our opinion, based on our audit and the report of
other auditor on separate fi nancial statements, the
Consolidated Financial Statements referred to above
give a true and fair view as at 31st March, 2012 and of
the results of their operations for the period/year then
ended in conformity with generally accepted accounting
principles in India :
1) in the case of the Consolidated Balance Sheet, of
the consolidated state of affairs as at 31st March,
2012;
2) in the case of Consolidated Statement of Profi t
and Loss Account, of the consolidated results of
operations for the period/year ended on that date,
and
3) in the case of the Consolidated Cash Flow
Statement, of the cash fl ows for the year ended on
that date.
For P.K.LILHA & CO.
Chartered Accountants
Firm Reg. No.: 307008E
(CA. P.K. LILHA)
Partner
M. No. 011092
Place : Kolkata
Date : 30.05.2012
AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS
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Consolidated BALANCE SHEET AS AT 31ST MARCH, 2012 (Amount in `)
Notes As at
March 31, 2012
As at
March 31, 2011 I. EQUITY AND LIABILITIESShareholders' FundsShare Capital 3 1,357,984,954 1,357,984,954 Reserves and Surplus 4 26,014,614,421 22,253,847,717 Sub Total - Shareholders Fund 27,372,599,375 23,611,832,671 Non-current liabilitiesLong Term Borrowings 5 13,919,096,395 7,915,813,270 Deferred Tax Liabilities (net) 6 1,128,166,697 799,852,527 Long Term Provisions 7 16,573,145 14,168,810 Sub Total - Non-current Liabilities 15,063,836,237 8,729,834,607 Current liabilitiesShort Term Borrowings 8 34,077,727,785 30,115,964,766 Trade Payables 9 7,155,345,232 3,061,004,460 Other Current Liabilities 10 1,860,416,743 844,685,960 Short Term Provisions 7 1,140,993,908 1,639,208,888 Sub Total - Current Liabilities 44,234,483,668 35,660,864,074 TOTAL - EQUITY AND LIABILITIES 86,670,919,280 68,002,531,352 II. ASSETSNon current assetsFixed assets 11 Tangible assets 12,605,758,537 4,062,327,215 Intangible assets 2,410,646 3,619,098 Capital work-in-progress 1,154,504,056 2,340,287,147 Non-current investments 12 2,091,390,473 1,325,026,932 Long term loans and advances 13 4,828,385,882 3,446,111,358 Sub Total - Non Current Assets 20,682,449,594 11,177,371,750 Current assetsInventories 14 37,340,732,432 35,710,744,884 Trade receivables 15 16,818,869,805 11,190,755,655 Cash and cash equivalents 16 3,396,180,658 3,523,618,725 Short term loans and advances 13 8,415,692,359 6,394,183,848 Other current assets 17 16,994,432 5,856,490 Sub Total - Current Assets 65,988,469,686 56,825,159,602 TOTAL - ASSETS 86,670,919,280 68,002,531,352 Signifi cant accounting policies 2Notes on Financial Statements 3 to 33 -
In terms of our attached report of even date
For P. K. Lilha & Co. For and on behalf of the Board
Chartered Accountants
[Firm Registration No.: 307008E] Sandip Jhunjhunwala K. D. Ghosh
Managing Director Director
CA. P. K. Lilha
Partner
M No.: 11092 Ranjan Majumder Mandan Mishra
Chief Financial Offi cer Company Secretary
Place : Kolkata
Dated : 30th May, 2012
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(Amount in `)Notes For the year ended For the year ended
31.03.2012 31.03.2011
INCOME
Revenue from operations 18 53,824,011,164 37,243,525,792
Other Income 19 23,827,927 38,646,985
Total Revenue (I) 53,847,839,091 37,282,172,777
EXPENSES
Cost of Raw Materials Consumed 20 37,052,219,935 19,712,015,899
Purchases of Stock In Trade 21 15,318,685,181 6,826,689,752
(Increase)/decrease in inventories of Finished Goods 22 (10,046,084,944) 1,742,150,844
Employee benefi ts expenses 23 221,101,472 172,039,560
Finance costs 24 5,147,795,592 3,314,069,377
Depreciation & Amortization expenses 25 387,892,896 221,217,853
Other expenses 26 1,307,901,641 1,071,791,587
Total Expenses (II) 49,389,511,773 33,059,974,872
Profi t Before Tax ( I - II) 4,458,327,318 4,222,197,905
Tax expenses
Current tax 565,007,231 1,397,507,749
Prior Period Tax Payment 4,019,446 143,220
Total Tax Expenses 569,026,677 1,397,650,969
Profi t for the year after tax 3,889,300,641 2,824,546,936
Share of Profi t /(Loss) of Associate Companies 90,004,384 -
Profi t Transfer to Reserve & Surplus 3,979,305,025 2,824,546,936
Earnings per equity share (nominal value) Re. 1/- each) 27A
Basic 4.13 3.49
Diluted 3.72 3.08
Signifi cant accounting policies 2
Notes on Financial Statements 3 to 33
In terms of our attached report of even date
For P. K. Lilha & Co. For and on behalf of the Board
Chartered Accountants
[Firm Registration No.: 307008E] Sandip Jhunjhunwala K. D. Ghosh
Managing Director Director
CA. P. K. Lilha
Partner
M No.: 11092 Ranjan Majumder Mandan Mishra
Chief Financial Offi cer Company Secretary
Place : Kolkata
Dated : 30th May, 2012
Consolidated PROFIT & LOSS ACCOUNT FOR YEAR ENDED 31ST MARCH, 2012
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(Amount in `)
2011-2012 2010-2011
A) CASHFLOW FROM OPERATING ACTIVITIES
Net Profi t Before Tax as per Profi t and Loss account 4,458,327,318 4,222,197,905
Adjusted for:
Depreciation / Amortization 387,892,896 221,217,853
Finance Costs 5,147,795,592 3,314,069,377
Dividend Income (7,385,044) (7,267,046)
Interest Received (12,589,318) (16,326,680)
Loss on Sale/Discard of Fixed Assets (Net) 24,658,162 4,142,801
5,540,372,288 3,515,836,305
Effect of Foreign Currency Translation 48,205,433 -
Operating Profi t before changes in working capital 10,046,905,039 7,738,034,210
Adjusted for:
Decrease/ (increase) in Inventories (1,629,987,548) (3,309,818,450)
Decrease/ (increase) in Trade Receiveables (5,628,114,150) (2,830,302,961)
Decrease/ (increase) in Loans & Advances (2,627,609,624) (728,940,296)
Decrease/ (increase) in Other Current Assets (11,137,942) 33,046,614
Increase/(Decrease) in Trade Payables 4,094,340,772 2,605,928,783
Increase/(Decrease) in Other Liabilities and Provisions 927,407,515 (70,193,752)
(4,875,100,977) (4,300,280,062)
Cash Generated from operations 5,171,804,062 3,437,754,148
Direct Taxes paid (705,213,364) (1,282,917,709)
Share of Profi t/(Loss) of Associate Companies 90,004,384
Net Cash from/(used in) Operating Activities ( A ) 4,556,595,082 2,154,836,439
B) CASH FLOW FROM INVESTMENT ACTIVITIES
Purchase of Fixed Assets (8,968,375,362) (969,177,533)
Capital Work in Progress 1,185,783,091 (1,485,162,462)
Advances for Capital Expenditure (1,472,487,244) (3,071,602,030)
Investments in Mutual Funds (6,500,000) (217,099,650)
Changes in Value of Investment of Associates on Consolidation (759,863,541)
Capital Reserve on stake in Associate Companies 669,859,157
Subsidy Received on Fixed Assets 11,000,000 -
Proceeds from sale of Fixed Assets 2,601,434 6,980,546
Dividend Received 7,385,044 7,267,046
Interest Received 12,589,318 16,326,680
Net Cash from/(used in) Investing Activities ( B ) (9,318,008,103) (5,712,467,403)
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012
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(Amount in `)
2011-2012 2010-2011
C) CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Issue of Right Equity Shares (Net of Expenses) - 12,245,040,968
Proceeds from/(Repayment) of Long Term Borrowings :-
~ Issueof Non Convertible Redemable Debenture (Net of Expenses ) 3,402,003,892 953,875,975
~ Repayment of Term Loans (223,849,399) (255,057,236)
~ Proceeds from Corporate Loans 2,202,222,222 (345,800,000)
~ Forex Loss on FCCB Outstanding 680,905,225 -
Proceeds from Unsecured Loans (Net of Expenses) - (4,020,278,500)
Proceeds from/(Repayments) of Short Term Borrowings 3,961,763,019 (2,457,058,259)
Finance Costs (5,147,795,592) (3,314,069,377)
Dividend & Dividend Tax Paid (241,274,413) (353,785,684)
Net Cash from/(used in) Financing Activities ( C ) 4,633,974,954 2,452,867,887
NET INCREASE/(DECREASE) IN CASH (A+B+C) (127,438,067) (1,104,763,077)
CASH AND CASH EQUIVALENTS(OPENING BALANCE) 3,523,618,725 4,628,381,803
CASH AND CASH EQUIVALENTS(CLOSING BALANCE) 3,396,180,658 3,523,618,725
Notes:
1) The above Cash Flow Statement has been prepared using the Indirect Method set out in Accounting Standard (AS - 3) on Cash Flow
Statements Issued by The Institute of Chartered Accountants of India 2) Cash and Cash Equivalents includes :-
a) Current a/c balances of ` 42,33,100 represented by unpaid dividend
b) Fixed Deposit with Bank ` 1,55,50,000/- are pledged with Banks against Letter of Guarantee, etc
c) Margin Money deposit of ` 4,03,929 are pledged with Banks against Guarantee issued by them
d) Balances with other Banks, ICICI Bank (London Br.) and PICTET & CIE, London are lying abroad for purposes as defi ned
under ECB guidelines issued by RBI 3) Figures in Bracket indicate Cash outfl ows. 4) Previous Year’s fi gures have been reclassifi ed and re stated, wherever required to confi rm with current period’s presentation.
In terms of our attached report of even date
For P. K. Lilha & Co. For and on behalf of the Board
Chartered Accountants
[Firm Registration No.: 307008E] Sandip Jhunjhunwala K. D. Ghosh
Managing Director Director
CA. P. K. Lilha
Partner
M No.: 11092 Ranjan Majumder Mandan Mishra
Chief Financial Offi cer Company Secretary
Place : Kolkata
Dated : 30th May, 2012
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The consolidated fi nancial statements comprise the fi nancial statements of REI Agro Ltd (hereinafter referred as the Holding Co.) and its
Subsidiary and Associates (hereinafter referred to as The Group).
The list of Subsidiaries and Associates Companies considered for consolidation together with the proportion of shareholding held by the
group is as follows :-
i) Subsidiaries:Sr
No
Name of the subsidiary Country of
Incorporation
%age of
Share Holding
1 Ammalay Commoditiess JLT (Previously Known as REI Agro Traders JLT) U.A.E 100% (Since Incorp)2 Holy Stars Ltd Mauritius 100% (Since Incorp)3 Auckland Holdings Ltd Mauritius 100% (Since Incorp)4 Orient Agro (M) Ltd Mauritius 100% (Since Incorp)
ii) AssociatesSr
No
Name of the Associate Country of Incorporation %age of Share Holding
1 REI Six Ten Retail Ltd India 23.79%2 Varrsana Ispat Ltd India 23.99%
A. PRINCIPLES OF CONSOLIDATION
1) The fi nancial Statements have been prepared to comply in all material respect with the mandatory notifi ed Accounting Standards
by the Companies Accounting Standard Rules 2006 (as Amended) and the relevant provision of the Companies Act 1956. The
fi nancial statements have been prepared under the historical cost convention on accrual basis. These are the fi rst consolidation
and the accounting policies used in the current year will be consistently followed.
2) The consolidated fi nancial statement of the group have been prepared on line by line basis by adding together the book values
of subsidiary companies’ like items of Assets, Liabilities, Income & Expenses, after eliminating Intra Group Balances & the
unrealized Profi t /Losses in intra Group transactions if any.
3) The fi nancial statements of each of the Subsidiaries and Associates drawn upto the same reporting date i.e. at the year ended
31st March, 2012 have been used for the purpose of consolidation.
4) Translation of fi nancial statements of foreign subsidiaries for incorporation in consolidated fi nancial statements has been done
by using the following exchange rates:
a) Assets & Liabilities have been translated using the rates prevailing on the date of balance sheet.
b) Income & Expenditure items have been translated by using the average rate of exchange.
c) Exchange difference arising on translation of fi nancial statements has specifi ed above is recognized in the Foreign
Currency Translation Reserve
5) Investment in associate Companies have been accounted under the Equity Methods as per AS 23: – “Accounting For Investment
In Associates in Consolidated Financial Statements”
6) The Company accounts for its share in change in net assets of the associates, post acquition after eliminating unrealized profi t
and losses resulting from transactions between the Co. and its Associates to the extent of its share, through its statement of
profi t and loss to the extent such change is attributable to the associate’s profi t or loss through its reserves for the balance, based
on available information.
7) The difference between the cost of investment in the associates and the share of net assets at the time of acquitions of shares
in the associates is identifi ed as Goodwill or Capital Reserve as the case may be.
8) As far as possible the consolidated fi nancial statements are prepared using uniform accounting policies for like transactions and
other events in similar circumstances and are presented in the same manner as the companies separate fi nancial statements.
B) Investment other than in subsidiaries and Associates have been accounted as per accounting standards (AS 13 on “Accounting For
Investments”)
C) Other signifi cant Accounting Policies :
These are set out under “Signifi cant Accounting Policies” as given in the companies separate fi nancial statements.
SIGNIFICANT ACCOUNTING POLICIES ON CONSOLIDATED ACCOUNTS
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Notes to Consolidated Financial Statements as at March 31, 2012
(Amount in `) As At
March 31, 2012
As At
March 31, 2011
3) SHARE CAPITAL Authorised Shares Capital
1,600,000,000 Equity shares of ` 1/- each 1,600,000,000 1,600,000,000
(1,600,000,000) 4,000,000 Preference shares of ` 100/- each 400,000,000 400,000,000
(4,000,000) 2,000,000,000 2,000,000,000
Issued, Subscribed and paid-up 957,984,954 Equity shares of ` 1/- each fully paid up 957,984,954 957,984,954
(957,984,954) 4,000,000 4% Non Convertible Redeemable Preference shares of ` 100/- each
(4,000,000) fully paid up 400,000,000 400,000,000 Total 1,357,984,954 1,357,984,954
A) Notes to Equity Share Capital3.1 29,945,550
(29,945,550)
Equity Shares of Re. 1/- each issued through QIP in FY 2009-10
3.2 352,398
(352,398)
Equity shares of Re. 1/- each issued against conversion of 350 FCCB of USD ($) 1,000/- each in FY 2010-11
3.3 638,656,636
(638,656,636)
Equity shares issued as right shares of Re. 1/- each during the FY 2010-11
3.4 16,004,900
(27,126,300)
Equity Shares of Re. 1/- each representing 8,00,245 ( 13,56,315) Global Depository Receipt in the ratio of 20
Equity Shares for each GDR
B) Reconciliation of no of shares is setout below 1 EQUITY SHARE CAPITAL
2011-12 2010-11 No of Shares ` No of Shares `
At the beginning of the year 957,984,954 957,984,954 319,328,318 319,328,318 Add: Increased by Right Issue - - 638,656,636 638,656,636 Outstanding at the end of the year 957,984,954 957,984,954 957,984,954 957,984,954
2 4% Preference Shares 2011-12 2010-11
No of Shares ` No of Shares ` At the beginning of the year 4,000,000 400,000,000 4,000,000 400,000,000 Outstanding at the end of the year 4,000,000 400,000,000 4,000,000 400,000,000
C) Details of shareholders holding more than 5% shares Name of Shareholders As at March 31, 2012 As at March 31, 2011
No. of shares % holding No. of shares % holding Aspective Vanijya Private Limited 128,595,663 13.42% 119,365,663 12.46%Shree Krishna Gyanodaya Flour Mills Pvt Ltd 126,858,763 13.24% 88,219,706 9.21%Snehapushp Barter Pvt Ltd 65,336,400 6.82% 65,336,400 6.82%Subhchintak Vancom Pvt Lld 54,774,000 5.72% 54,774,000 5.72%REI Steel & Timber Pvt Ltd 51,934,680 5.42% 51,934,680 5.42%Wellington Management Co LLP A/c Bay Pond BMD MB 78,881,617 8.23% 78,377,514 8.18%
As per records of the company, including its register of shareholders/ members and other declarations received from shareholders
regarding benefi cial interest, the above shareholding represents both legal and benefi cial ownerships of shares.
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
60
D) Notes to Preference Share Capital
4% Non Convertible Redemmable Preference shares allotted on 30.06.2003 were redeemable at par at any time after a period of 12
years from the date of their allotment. Since then the redemption period has been extended to 30.06.2022 in the Annual General
Meeting held on 27.09.2010.
(Amount in `) As at
March 31, 2012
As at
March 31, 2011 4) RESERVE AND SURPLUSA) Capital Reserve on Consolidation
Balance as per the last fi nancial statements - - Add: Subscription in Associates 669,859,157
T O T A L ( A ) 669,859,157 - B ) Securities Premium Account
Balance as per the last fi nancial statements 15,162,546,807 3,527,717,962 Add: On issue of Right Shares - 11,815,147,766 Less: Debenture Issue Expenses (32,996,108) (36,124,025)Less: Right Issue Expenses (208,763,434)Less: Deferred Tax Assets/(Liabilities) (Net) (328,314,171) 64,568,538
T O T A L ( B ) 14,801,236,528 15,162,546,807 C) Debenture Redemption Reserve
Balance as per the last fi nancial statements 153,000,000 23,000,000 Add: Amount of Reserve Created during the Year 175,000,000 130,000,000
T O T A L ( C ) 328,000,000 153,000,000 D) General Reserve
Balance as per the last fi nancial statements 6,100,000,000 4,700,000,000 Add: Amount of Reserve Created during the Year 1,400,000,000 1,400,000,000
T O T A L ( D ) 7,500,000,000 6,100,000,000 E) FOREIGN CURRENCY TRANSALATION RESERVE 48,205,433.00 - F) Surplus in the statement of profi t and loss
Balance as per last fi nancial statements 838,300,910 45,375,237 Profi t for the year 3,979,305,025 2,824,546,936 Less: AppropriationsTransfer to General Reserve (1,400,000,000) (1,400,000,000)Transfer to Debenture Redemption Reserve (175,000,000) (130,000,000)Short Provision for Dividend and Dividend Tax - (148,637,422)Interim Dividend on Equity Shares - (95,798,495)Dividend Tax on Interim Dividend - (15,910,933)Proposed Dividend (494,992,477) (207,596,991)Dividend Tax on Proposed Dividend (80,300,155) (33,677,422)
Total (2,150,292,632) (2,031,621,263)T O T A L ( F ) 2,667,313,303 838,300,910
Total ( A + B + C + D+E+F ) 26,014,614,421 22,253,847,717
Notes
4.1) During the previous year Securities Premium amounting to ` 1,18,151 Lacs increased on account of issue of 63,86,56,636 Equity
Shares on Right basis at a premium of ` 18.50 per share.
4.2) The Hon’ble Kolkata High Court vide its order has allowed the company to utilize the Securities Premium Account towards
meeting Deferred Tax Liability computed as per the Accounting Standard (AS-22) “ Accounting of Taxes on Income” prescribed
by The Institute of Chartered Accountants of India. Accordingly the Securities Premium Account has decreased by adjustment
of Net Deferred Tax Liabilities of `32,83,14,171/- for the year (Previous Year ` 6,45,68,538/-).
Notes to Consolidated Financial Statements as at March 31, 2012
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
61
Notes to Consolidated Financial Statements as at March 31, 2012
(Amount in `) NON CURRENT CURRENT (Refer Note 10)
As at
March 31,2012
As at
March 31,2011
As at
March 31,2012
As at
March 31,2011 5) LONG TERM BORROWINGS
SecuredA) Non Convertible Debentures 5,825,000,000 2,390,000,000 - - B) Term Loans B.1) From Banks Allahabad Bank - - - 1,710,000 External Commercial Borrowing (ICICI Bank, London) - 86,962,270 88,672,270 67,826,146 ICICI Bank 2,574,616 - 392,131 - B.2) From Others Infrastructure Development Finance Company
Limited
287,277,500 407,027,500 119,750,000 94,950,000
Indian Renewal Energy Developments Agency
[IREDA]
145,161,000 209,201,000 64,040,000 64,040,000
Total Term Loans 435,013,116 703,190,770 272,854,401 228,526,146 C) Corporate Loans C.1) From Banks~ State Bank of India (Formerly State Bank of Indore ) - 150,000,000 150,000,000 150,000,000 ~ ICICI Bank ( Formerly bank of Rajasthan ) - - - 120,000,000 ~ The Jammu & Kashmir Bank Limited 1,500,000,000 - ~ Dhanlaxmi Bank Limited 305,555,554 166,666,668 ~ Lakshmi Vilas Bank Limited 500,000,000 - - - Total Corporate Loans 2,305,555,554 150,000,000 316,666,668 270,000,000 Total Secured Loans 8,565,568,670 3,243,190,770 589,521,069 498,526,146 UnsecuredA) Foreign Currency Convertible Bonds 5,353,527,725 4,672,622,500 - - Total 13,919,096,395 7,915,813,270 589,521,069 498,526,146
5.1 Notes to Non Convertible Debentures
A) Further issue of Debentures: During the year company has issued 935 Secured NCDs @ ` 10 lacs each divided into 10
‘Separately Transferable Redemable Principle Part’ (STRPP) of ` 1 lacs each and 2500 Secured NCDs @ ` 10 lacs each.
B) Security Coverage :-
a) 11.75% Non-Convertible Debenture:- ` 140 Crores Secured by way of mortagage / charge on the immovable property
situated at Maharajpura , Dist. Mehsana, Gujarat and secured by way of pari passu fi rst charge on fi xed assets of the rice
mill division and Sub servient charge on the total assets of the company to maintain assets coverage 1.25 times.
b) 11.75% Non-Convertible Debenture:- ` 99 Crores Secured by way of mortagage / charge on the immovable property
situated at Maharajpura , Dist. Mehsana, Gujarat and secured by way of pari passu fi rst charge on fi xed assets of the rice
mill division and Sub servient charge on the total assets of the company to maintain assets coverage 1.25 times.
c) 13.00% Non-Convertible Debenture:- ` 93.50 Crores Secured by way of mortagage / charge on the immovable property
situated at Maharajpura, Dist. Mehsana, Gujarat and secured by way of pari passu fi rst charge on fi xed assets of the rice
mill division and Sub servient charge on the total assets of the company to maintain assets coverage 1.25 times.
d) 12.00% Non-Convertible Debenture:- ` 250 Crores Secured by way of mortagage / charge on the immovable property
situated at Maharajpura, Dist. Mehsana, Gujarat and secured by way of pari passu fi rst charge on fi xed assets of the rice
mill division and Sub servient charge on the total assets of the company to maintain assets coverage 1.25 times.
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
62
C) Maturity Profi le and rate of interest are set out as follows :- (Amount in `) Rate of Interest Debenture
Amounts
2013-14 2014-15 2015-16 2016-17
11.75% 1,400,000,000 560,000,000 840,000,000 - - 11.75% 990,000,000 198,000,000 495,000,000 297,000,000 - 13.00% 935,000,000 - 187,000,000 467,500,000 280,500,000 12.00% 2,500,000,000 - 820,000,000 840,000,000 840,000,000
5,825,000,000 758,000,000 2,342,000,000 1,604,500,000 1,120,500,000 5.2 Notes on Term Loans
a) Outstanding amount of loans ̀ 20.92 cr ( ̀ 27.32 cr) to Indian Renewal Enegry and Development Agency (IREDA) is guranteed by promoters of the company
b) Security Coverage: b.1) Allahabad Bank Secured by creation of fi rst charge on 1 WTG (Suzlon Make) at Jaislamer,Rajasthan and Sundry Debtors
thereon b.2) External Commercial Borrowing (ICICI bank, London) Secured by creation of fi rst charge on 17 WTGs (RRB Make) at
Surajbari, Gujarat and with Sundry Debtors thereon.b.3) Vehicle Loan from ICICI Bank has been secured by hypothcation of Vehicle. b.4) Infrastructure Development Finance Company Ltd Secured by creation of fi rst charge on 6 WTG’s( VESTAS Make) at
Dhule, Maharashtra and 12 WTGs (RRB Make) at Tirunelveli, Tamilnadu and Sundry Debtors thereonb.5) Indian Renewal Energy Development Agency : Secured by fi rst charge on 5 WTGs at Jaislamer , Rajasthan and 10 WTGs
(Suzlon Make) at Dhule, Maharashtra and Sundry Debtors thereon together with personal guarantee of some of the directors
5.3 Notes on Corporate Loans Security Coverage:
a) State Bank of India ( Formerly State Bank of Indore ) secured by fi rst Pari-Passu charge on the fi xed assets of the Rice Division of the Company and second Pari-Passu charge on the Current Assets of the Rice Division of The Company.
b) ICICI Bank ( Formerly Bank of Rajasthan) secured by fi rst Pari-Passu charge on the fi xed assets of the Rice Division of the Company and second Pari-Passu charge on the Current Assets of the Rice Division of The Company and additional security of the company’s share by promoters.
c) Jammu and Kashmir Bank secured by residual charge on the companies total assets present and future with minimum coverage 1.25 times.
d) Dhanlaxmi Bank secured by fi rst Pari-Passu charge on entire fi xed assets of the Rice Division of the Company and Subservient charge over the entire assets of the Rice Division of the company with minimum assets coverage of 1.25 .
e) Lakshmi Vilas Bank secured by fi rst Pari-Passu charge on the fi xed assets of the Rice Division of the Company and Subservient charge over the current assets of the Rice Division of the company both present and future with minimum assets coverage 1.25 times.
5.4 Maturity Profi le of Secured and Unsecured Loans
(Amount in `) Term Loans 2013-14 2014-15 2015-16 2016-17 Secured Loans ~ ICICI Bank 438,426 490,182 548,054 1,097,954 ~ Infrastructure Development Finance Company Limited 119,750,000 119,750,000 47,777,500 - ~ Indian Renewal Energy Development Agency 64,040,000 64,040,000 17,081,000 - Corporate Loans ~ The Jammu & Kashmir Bank Limited 125,000,000 500,000,000 500,000,000 375,000,000 ~ Dhanlaxmi Bank Limited 166,666,668 138,888,886 - - ~ Lakshmi Vilas Bank Limited 250,000,000 250,000,000 - -
725,895,094 1,073,169,068 565,406,554 376,097,954 Unsecured Loans Foreign Currency Convertible Bonds - 5,353,527,725 - - Grand Total 725,895,094 6,426,696,793 565,406,554 376,097,954
Notes to Consolidated Financial Statements as at March 31, 2012
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
63
5.5 5.5% Unsecured Foreign Currency Convertible Bonds
The Company issued on 13.11.2009, 5.5% 105000 Foreign Currency Convertible Bonds (FCCB) of US $ 1000 each aggregating US
$105 million [` 493.71 Crores] at par. The bonds are redeemable on 13th November, 2014 unless previously converted; these bonds
are convertible into equity shares at an initial conversion price of ` 46.70 per equity share with existing fi xed rate of exchange on
conversion @ ` 47.02 = US $ 1.00 at the option of the bond holder at any time on or after 22nd December, 2009 and prior to the
close of business on 13th November, 2014. The outstanding 104,650 bonds when fully converted would result in issue of additional
105,367,088 equity shares of ` 1/-each. Apart from this, FCCB holders retain the right to subscribe in Equity Shares to the extent
of 210,734,176 Equity Shares of the Company as per Letter of Offer issued by the Company for Issue of Right Equity Shares in the
ratio of 2:1 at a price of ` 19.50 (Including Share Premium of ` 18.50 per share) at the time of conversion into Equity Shares on or
before 13th November, 2014.
6) DEFERRED TAX LIABILITY (NET) (Amount in `) As at
March 31, 2012
As at
March 31, 2011 Deferred Tax Liability Timing difference in Depreciable assets 1,358,195,616 806,118,693 Deferred Tax Assets Expenses allowable against taxable income in future years ~ On MAT carried forward 222,895,934 - ~ On Gratuity & Leave encashment 5,602,340 4,735,521 ~ On Provision for doubtful debts 1,530,645 1,530,645
230,028,919 6,266,166 DEFERRED TAX LIABILITY (NET) 1,128,166,697 799,852,527
7) PROVISIONS (Amount in `) Non Current Current
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011Provision for Employee Benefi ts ~ Gratuity 14,003,624 11,785,923 670,022 413,494 ~ Leave encashment 2,569,521 2,382,887 24,023 13,231
16,573,145 14,168,810 694,045 426,725 Provision for Taxation 565,007,231 1,397,507,750 Provision for Proposed Dividend 494,992,477 207,596,991 Provision for Dividend Tax on Proposed Dividend 80,300,155 33,677,422 TOTAL 16,573,145 14,168,810 1,140,993,908 1,639,208,888
8) SHORT TERM BORROWINGS (Amount in `) As at
March 31, 2012
As at
March 31, 2011 Secured
A) Working Capital Loans from Banksa) Rupee Denominated Loans Cash Credit/ WCDL/Short Term Loans 25,415,771,886 26,832,408,464 b) Foreign Currency Loans PCFC/Short Term Loans 3,809,598,117 183,556,302
B) Commercial Papers 4,650,000,000 3,100,000,000 33,875,370,003 30,115,964,766
UnsecuredA) Working Capital Loans from Financial Institition Foreign Currency Loans 202,357,782 -
Total 34,077,727,785 30,115,964,766
Notes to Consolidated Financial Statements as at March 31, 2012
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
64
8.1 Notes to Working Capital Loans
A) Security Coverage :-
Working Capital Loans are secured by creation of fi rst charge on pari passu basis on hypothecation of stocks of Rice, Paddy,
Book Debts & Stores,etc, both Present and Future of the Rice Division and by second charge on all Fixed Assets both Present
and future of the Rice Division.
Commercial Papers are secured by earmarking of working capital limits
B) Maximum Balance outstanding in case of Commercial Papers during the year ` 735 crores (previous year ` 420 crores)
9) TRADE PAYABLE
(Amount in `)
As at
March 31, 2012
As at
March 31, 2011
Acceptances 999,978,104 -
Creditors for Others 6,155,367,128 3,061,004,460
7,155,345,232 3,061,004,460
Notes :
1) Trade Payables are due in respect of goods purchases or services received (including from employees, professionals and others under
contracts) in the normal course of business
2) Based on the information available with the company there are no dues payable to Micro, Small and Medium Enterprises as defi ned
in The Micro, Small and Medium Enterprises Development Act 2006.
This has been determined to the extent such parties have been identifi ed on the basis of information available with the Company.
This has been relied upon by the Auditors.
10) OTHER CURRENT LIABILITIES
(Amount in `)
As at
March 31, 2012
As at
March 31, 2011
A) Current Maturities of Long Term Borrowings (refer Note 5) 589,521,069 498,526,146
B) Interest accrued and due on
Term Loans - 80,032
Corporate Loans 1,655,560 2,873,577
Short Term Borrowings 160,680,782 7,232,780
C) Interest accrued but not due on borrowings 195,175,473 99,817,371
D) Advance from customers 53,504,668 -
E) Payable for Capital expenditures 827,565,312 181,939,114
F) Statutory Dues 28,080,779 49,963,750
G) Investor Education and Protection fund:
Unpaid dividends 4,233,100 4,253,190
1,860,416,743 844,685,960
Notes to Consolidated Financial Statements as at March 31, 2012
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Directors’ Report Management Discussion and Analysis Corporate Governance Auditors’ Report Financials
65
11
FIX
ED
ASS
ET
S
(Am
ount
in `
)G
ross
Blo
ckDe
prec
iatio
n N
et Bl
ock
Parti
cular
sAs
On
01.04
.2011
Since
Adde
d
Sale
/
Adju
stmen
t
As O
n
31.03
.2012
Upto
01.04
.2011
For T
he
Perio
d
Sale
/
Adju
stmen
t
Upto
31.03
.2012
As O
n
31.03
.2012
As O
n
31.03
.2011
Tang
ible
Asse
tsLa
nd~
Free
Hold
Lan
d 13
1,233
,232
677,7
38,00
0 -
80
8,971
,232
-
-
-
-
808,9
71,23
2 13
1,233
,232
~ Le
ase H
old L
and
27,12
0,000
-
-
27
,120,0
00
6,57
5,324
1,
160,5
89
-
7,73
5,913
19
,384,0
87
20,54
4,676
Bu
ilding
1,36
5,574
,142
2,23
8,678
,624
43,93
6,443
3,
560,3
16,32
3 10
1,349
,828
76,24
3,905
18
,096,3
37
159,4
97,39
6 3,
400,8
18,92
7 1,
264,2
24,31
4 Pl
ant &
Mac
hinery
1,33
6,797
,209
6,04
6,498
,517
11,00
0,000
7,
372,2
95,72
6 41
7,810
,810
181,4
86,69
5 -
59
9,297
,505
6,77
2,998
,221
918,9
86,39
9 W
indfar
m Ge
nerat
ors
2,37
3,069
,544
-
-
2,37
3,069
,544
658,7
85,17
5 12
5,298
,072
-
784,0
83,24
7 1,
588,9
86,29
7 1,
714,2
84,36
9 Of
fi ce E
quipm
ent
2,49
2,478
17
,000
-
2,50
9,478
79
2,405
11
9,143
-
91
1,548
1,
597,9
30
1,70
0,073
Tu
bewe
ll 46
8,850
-
-
46
8,850
22
5,498
22
,270
-
247,7
68
221,0
82
243,3
52
Comp
uter
5,08
1,777
83
0,225
-
5,
912,0
02
3,69
5,280
83
3,042
-
4,
528,3
22
1,38
3,680
1,
386,4
97
Vehic
les 11
,201,0
39
4,33
5,539
1,
832,2
32
13,70
4,346
4,
443,1
76
1,20
7,286
41
2,742
5,
237,7
20
8,46
6,626
6,
757,8
63
Furn
iture
& Fi
xtures
4,67
0,510
76
,525
-
4,74
7,035
1,
704,0
70
297,4
63
-
2,00
1,533
2,
745,5
02
2,96
6,440
Tot
al 5,
257,7
08,78
1 8,
968,1
74,43
0 56
,768,6
75
14,16
9,114
,536
1,19
5,381
,566
386,6
68,46
5 18
,509,0
79
1,56
3,540
,952
12,60
5,573
,584
4,06
2,327
,215
Intan
gibl
e Ass
etsCo
mpute
r Sof
tware
3,62
5,720
-
-
3,
625,7
20
6,62
2 1,
208,4
52
-
1,21
5,074
2,
410,6
46
3,61
9,098
Tot
al 5,
261,3
34,50
1 8,
968,1
74,43
0 56
,768,6
75
14,17
2,740
,256
1,19
5,388
,188
387,8
76,91
7 18
,509,0
79
1,56
4,756
,026
12,60
7,984
,230
4,06
5,946
,313
Prev
ious Y
ear T
otal
4,31
6,713
,863
969,1
77,53
3 24
,556,8
95
5,26
1,334
,501
987,6
03,88
3 22
1,217
,853
13,43
3,548
1,
195,3
88,18
8 4,
065,9
46,31
3
Not
e :-
1.
Sale
s/A
djus
tmen
ts in
Pla
nt &
Mac
hine
ry re
pres
ents
Gov
t Gra
nts/
Sub
sidy r
ecei
ved
by th
e com
pany
dur
ing
the y
ear ̀
1,1
0,00
,000
rece
ived
from
Gov
t of
Har
yana
thro
ugh
Har
yana
Ren
ewab
le
Ene
rgy
Dev
elop
men
t Age
ncy
(HRE
DA
) for
setti
ng u
p BI
OM
ASS
(Ric
e H
usk)
Co-
gene
ratio
n pr
ojec
t for
cap
tive
Use
2.
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Notes to Consolidated Financial Statements as at March 31, 2012
12) NON-CURRENT INVESTMENTS (Long Term Investments)
Non-Trade Investments* (Amount in `)Number of Shares Company Face value
Per Share
(`)
As at
March 31, 2012
As at
March 31, 2011
A) In Equity Shares -Quoted, Fully paid up 35,000 (35,000) Allahabad Bank 10 2,870,000 2,870,000 10,000 (10,000) Jyoti Structure Ltd 2 546,155 546,155
398 (398) Punjab National Bank 10 155,220 155,220 5,500 (5,500) Reliance Capital Ltd 10 2,255,907 2,255,907
5,827,282 5,827,282 2,075,563,191 1,315,699,650
B) In Mutual Funds-Fully paid up 1,000,000 (1,000,000) Reliance Alternative Investments 10 10,000,000 3,500,000
Funds, Private Equity Scheme-I**C) In Equity Shares, Fully paid up (In Associate Companies) Un-Quoted
5,256,277 (5,256,277) Varrsana Ispat Limited 10 1,763,084,443 1,245,699,650 Quoted
35,000,000 (35,000,000) REI Six Ten Retail Ltd 2 312,478,748 70,000,000Total Non-Current Investments (A+B+C+D) 2,091,390,473 1,325,026,932Aggregate Value of Quoted Investments 318,306,030 75,827,282 Market Value of Quoted Investments 427,326,100 1,556,067,230Aggregate Value of Un-Quoted Investments 1,763,084,443 1,245,699,650
* Diminution in the value of Investments if any, has not been recognised as in the opinion of Management the fall is not permanent in nature.
** During the year ` 65,00,000/- has been paid to make them fully paid up
13) LOANS AND ADVANCES (Unsecured, considered good)
Long Term Short Term
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011Advance against Capital Expenditures 4,784,706,429 3,312,219,185 - - Security Deposits 43,679,453 133,892,173 167,269 - Other Advances - - 7,566,873,893 5,081,601,549 Advance Income Tax - - 562,046,926 1,256,081,188 Balance With Govt Deptt. Income Tax Deptt - - 16,224 248,867 Sales Tax Deptt - - - 2,547,923 Service Tax Deptt - - 395,776 - DEPB Receivables - - - 6,429,010 Prepaid expenses - - 286,192,271 47,275,311 Total 4,828,385,882 3,446,111,358 8,415,692,359 6,394,183,848
14) INVENTORIES
(Valued at lower of cost and net realizable value) (Amount in `) As at
March 31, 2012
As at
March 31, 2011Raw Materials 24,571,581,724 32,984,884,572 Finished Goods 12,751,620,103 2,705,535,159 Stores, Spares and Packing Materials 17,530,605 20,325,153 Total 37,340,732,432 35,710,744,884
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Notes to Consolidated Financial Statements as at March 31, 2012
14) INVENTORIES
(Valued at lower of cost and net realizable value) (Amount in `) As at
March 31, 2012
As at
March 31, 2011Raw Materials 24,571,581,724 32,984,884,572 Finished Goods 12,751,620,103 2,705,535,159 Stores, Spares and Packing Materials 17,530,605 20,325,153 Total 37,340,732,432 35,710,744,884
15) TRADE RECEIVABLES (Amount in `) Non Current Current
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011UnsecuredDebt outstanding for a period exceeding six months ~ Considered Good - - 54,649,339 686,007,636 ~ Considered Doubtful 4,717,660 4,717,660 - -
4,717,660 4,717,660 54,649,339 686,007,636 Less: Provision for doubtful Trade Receivables (4,717,660) (4,717,660) - -
- - 54,649,339 686,007,636 Other Receivables ~ Considered Good - - 16,764,220,466 10,504,748,019 Total - - 16,818,869,805 11,190,755,655
16) CASH AND BANK BALANCES Current
March 31, 2012 March 31, 2011Cash in hand ( as certifi ed ) 36,586,124 6,263,283 Balances with Schedule Banks:On Current Accounts 588,347,234 102,551,732 On Unclaimed Dividend Account 4,233,100 4,258,835 Fixed Deposit with Banks [ Including deposit of ` 10 Lacs (Previous year ` 10 Lacs) with 243,113,328 101,564,739 Maturity of More than 12 months ]Margin money Deposit ( Against Guarantee ) 403,929 2,531,500
836,097,591 210,906,806 Balances with Other Banks*On current accounts [ ICICI Bank, London ] 17,599,167 15,360,762 Deposits with PICTET & CIE, London 2,505,897,776 3,291,087,874
2,523,496,943 3,306,448,636 Total 3,396,180,658 3,523,618,725 Maximum Balance outstanding ICICI Banks , London 17,599,167 178,268,783 PICTET & CIE, London 3,291,087,874 4,074,263,635 * The above balances are available for purposes as defi ned under ECB Guidelines issued by RBI
17) OTHER CURRENT ASSETS(Unsecured, considered good )Interest Accrued on Fixed Deposits 10,994,432 1,185,599 Interest Receivable on Advances - 4,670,891 Subsidy Receivable from HAREDA 6,000,000 - Total 16,994,432 5,856,490
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Notes to Consolidated Financial Statements for the year ended March 31, 2012
18) REVENUE FROM OPERATIONS
(Amount in `) 2011-12 2010-11
Revenue from operations Sale of Products 45,159,360,817 37,027,657,678 Sale of Metal and Others 8,414,771,390 Sale of Energy (Including lease rent) 236,445,015 215,868,114 Sales of Carbon Credit 13,433,942 -
53,824,011,164 37,243,525,792 18.1) Particulars of Sale of Products
a) Rice SegmentRice/Paddy 40,462,388,739 37,009,856,052 Food Grain Items 4,695,032,085 - Metal and Others 8,414,771,390 -
Scrap 1,939,992 17,801,626 53,574,132,206 37,027,657,678
b) Windmill SegmentSales of Electricity (WTG) 198,367,035 177,790,145 Lease Rent 38,077,980 38,077,969
236,445,015 215,868,114
18.2) Based On The Guiding Principles In The Accounting Standards On Segment Reporting (As – 17) The Company Is Primarily
In The Business Of Manufacturing Of Rice And Energy Generation From Windfarm. Since The Revenue, Results And Assets
From Windfarm Is Less Than 10% Of These Criterian, Windfarm Energy Has Not Been Considered As Separate Segment. The
Companies Business Activity Falls Within A Single Geographical And Business Segment Rice And Windfarm Energy And It Has No
Other Primary Reportable Segment.
19) OTHER INCOME
(Amount in `) 2011-12 2010-11
Interest onFixed Deposit with Banks 12,589,318 16,326,680
Dividend Income from Long Term Investments 7,385,044 7,267,046 Profi t on Sales of Long Term Investments 15,004,000 Insurance Claim 937,001 49,259 Other Non Operating Income 2,916,564 -
23,827,927 38,646,985
20) COST OF RAW MATERIALS CONSUMED (Indigenious)
(Amount in `) 2011-12 2010-11
Inventory at the beginning of the year 32,984,884,572 27,933,000,464 Add: Purchases 28,638,917,087 24,763,900,007
61,623,801,659 52,696,900,471 Less: Inventory at the end of the year 24,571,581,724 32,984,884,572 Cost of Raw Material Consumed 37,052,219,935 19,712,015,899
Notes:
a) Purchases of Raw Materials consist of Paddy and Rice.
b) The cost of raw materials consumed shown above is computed on basic value after adjusting excess and shortages, discount received
if any, etc. plus all expenses directly related with the purchase of raw materials.
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Notes to Consolidated Financial Statements for the year ended March 31, 2012
(Amount in `)
2011-12 2010-11
21) PURCHASES OF STOCK IN TRADE
Food Grain Items 4,501,951,681 -
Rice / Paddy 3,613,072,670 6,826,689,752
Metal & Others 7,203,660,830
15,318,685,181 6,826,689,752
22) CHANGES IN INVENTORIES OF FINISHED GOODS
Closing Stock of Finished Goods 12,751,620,103 2,705,535,159
Opening Stock of Finished Goods 2,705,535,159 4,447,686,003
(10,046,084,944) 1,742,150,844
23) EMPLOYEE BENEFITS EXPENSES
Salary and wages 201,049,693 151,968,746
Contribution to provident & other funds 6,346,963 4,968,283
Gratuity 2,892,703 5,284,949
Leave Encashment Expenses 4,766,390 4,487,746
Staff Welfare Expenses 6,045,723 5,329,836
Total 221,101,472 172,039,560
23.1) Notes to Employee Benefi ts Expenses
a) Gratuity and leave encashment expenses includes provision of ` 26,71,655/- for the year ended March 31 ‘2012.
b) Disclosures pursuant to Accounting Standard-15 (Revised) ‘Employees Benefi ts’:
i) Defi ned Contribution Plans
In accordance with the Accounting Standard 15 on employee benefi ts issued by The Institute of Chartered Accountants
of India, the company makes payment of its contribution to Recognized Provident Fund Commissioner (RPFC).
ii) Defi ned Benefi t Plans
In keeping with the company Gratuity scheme (Defi ned Benefi t Plan) eligible employees are entitled to gratuity benefi ts
at one and half month’s eligible salary for each completed year of service on Retirement / Death / Termination. Vesting
occurs upon completion of 5 years of service subject to the payment of Gratuity Act, 1972. The present value of
obligation is determined based on actuarial valuation using the ‘projected unit credit method’. Obligation for the leave
encashment is recognized in the same manner as Gratuity. Following are the further particulars with respect to Gratuity &
Leave Encashment.
2011-12 2010-11
Gratuity
(` in lacs)
Leave
Encashment
(` in lacs)
Gratuity
(` in lacs)
Leave
Encashment
(` in lacs)
Changes in Defi ned Benefi t Obligations
Present value of obligation at the beginning of the year 121.99 23.96 70.55 14.98
Service Cost 16.22 4.34 20.01 7.65
Interest Cost 10.75 2.00 7.70 1.56
Actuarial (Gain)/Loss 1.96 41.32 25.13 35.67
Benefi t Paid (4.18) (45.69) (1.40) (35.90)
Present Value of obligation at the end of the year 146.74 25.93 121.99 23.96
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2011-12 2010-11 Gratuity
(` in lacs)
Leave
Encashment
(` in lacs)
Gratuity
(` in lacs)
Leave
Encashment
(` in lacs)
Change in Plan Assets
Plan Assets at the beginning of the year - - - -
Actual return on plan Assets - - - -
Contribution by the Company 4.18 45.69 1.40 35.90
Actual Benefi ts paid (4.18) (45.69) (1.40) (35.90)
Actuarial (Gain)/ Loss - - - -
Plan Asset at the end of year - - - -
Reconciliation of the present value of defi ned
obligation and fair value of planned AssetsPresent value of the obligation at the end of the year 146.74 25.93 121.99 23.96Fair value of plan Assets at the end of the year - - - - Liability / (Asset) recognized in the Balance Sheet 146.74 25.93 121.99 23.96 Expenses Charged to profi t & Loss Account:Current Service Cost 16.22 4.34 20.01 7.65 Interest Cost 10.75 2.00 7.70 1.56 Expected return on Plan Assets - - - - Actuarial (Gain ) / Loss 1.96 41.32 25.13 35.67Total Expenses charged/(to be charged) in Profi t & Loss
A/c on accrual
28.93 47.66 52.84 44.88
Actuarial Assumption Discount rate Per Annum compound 8% 8% 8% 8%Rate of Increase in Salary 5% 5% 5% 5%Rate of Return on Plan Assets 0% 0% 0% 0%
(Amount in `) 2011-12 2010-11
24) FINANCE COSTSInterest expense* 4,885,581,589 3,224,673,816 Other Borrowing Costs ~ Bank Charges 4,015,515 18,720,654 ~ Processing fee and Commitment charges 67,039,631 51,008,070 ~ Loss on Foreign Exchange Fluctuation (Net) 174,682,459 9,621,599 Interest on Delay payment of Income Tax/Dividend Tax/TDS 16,476,398 10,045,238 Total 5,147,795,592 3,314,069,377
*Interest Expenses is net of Interest Received on Advances/Deposit ` NIL (Previous Year 334.94 Lacs)
2011-12 2010-11 25) DEPRECIATION AND AMORTIOSATION EXPENSES
Depreciation of Tangible Assets 386,684,444 221,211,231 Amortization of intangible assets 1,208,452 6,622
387,892,896 221,217,853
Notes to Consolidated Financial Statements for the year ended March 31, 2012
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Notes to Consolidated Financial Statements for the year ended March 31, 2012
(Amount in `)
2011-12 2010-11
26) OTHER EXPENSES
Stores, Spares & Packing Material Consumed( 100% indigneous) 240,329,173 313,080,236
Power & Fuel 113,774,334 77,963,493
Security Charges 16,900,361 13,947,700
Hire Charges 3,235,211 1,967,754
Repairs & Maintenance
~ Plant & Machinery 12,957,062 5,988,077
~ Buildings 4,429,327 1,755,929
~ Windfarms 49,974,641 40,633,050
~ others 1,771,389 1,187,970
Rent 122,786,120 26,557,736
Rates & Taxes 20,599,053 38,183,213
Key Man Insurance 1,211,306 1,211,306
Insurance 17,322,737 20,669,236
ECGC Premium 7,712,705 10,372,951
Postage & Telephone 4,101,572 4,658,225
Auditors' Remuneration 2,672,164 3,089,961
Commission to a Director 25,000,000 -
Directors' Sitting Fees 220,000 220,000
Filing Fees 15,000 22,998
Travelling & Conveyance 19,507,013 25,068,336
Miscellaneous Expenses 146,263,414 180,698,860
Bad Debts Written off 106,534,737 -
Carriage Outward and Clearing Charges, etc 293,191,145 248,617,222
Advertisement 6,737,249 2,823,772
Brokerage & Selling Expenses 62,420,293 6,585,835
Purchase /Sales Tax 3,577,473 42,344,926
Loss on sale of Fixed Assets 24,658,162 4,142,801
1,307,901,641 1,071,791,587
26.1) Auditors Remuneration Includes
Audit fee 1,505,497 1,300,000
Tax Audit Fees 200,000 200,000
For Certifi cation, Right (QIP/ FCCB) issue 500,000 1,050,000
For Service tax 206,000 262,650
For Re-imbursement of Expenses 260,667 277,311
2,672,164 3,089,961
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(Amount in `)
As at
31st Mar 12
As at
31st Mar 11
27)
A) EARNING PER SHARE ( EPS )
Profi t After Tax 3,979,305,025 2,824,546,936
Less: Preference Dividend Holders Right
Preference Dividend @ 4% on 40 cr (16,000,000) (16,000,000)
Tax on Preference Dividend @ 16.2225% (2,595,600) (2,595,600)
Profi t for Equity Shareholders 3,960,709,425 2,805,951,336
Weighted No of Equity Shares 957984954 804672891
Effective No of Equity shares n Conversion of $ 104650000 FCCB
[ 104650000 x 47.02 / 46.7 ] 105367088 105367088
Grand Total Weighted No of Equity Shares 1063352042 910039979
Basic EPS 4.13 3.49
Diluted EPS 3.72 3.08
(` in Lacs)
As at
31st Mar 12
As at
31st Mar 11
B) Contingent Liabilities and Commitments (to the extend not provided for)
Contingent Liabilities
Outstanding Guarantees and counter guarantees to IndusInd Bank in respect of guarantees
given by the Bank in favour of Govt Authorities and Others ( Deposit held ` 70 Lacs )
569.55 77.68
Commitments
Estimated amounts of unexecuted capital contracts
(Net of Advances and Deposit)
8,022.00 3,476.00
28) Operating Lease
The Company has given on Operating Lease 17 Wind Turbine Generator (WTG) having capacity of 10.2 MW situated at Kutch,
Gujarat. Disclosures required as per Accounting Standards-19 issued by the ICAI are given below:
As at
31st Mar 12
As at
31st Mar 11
i) Gross Block of Fixed Assets
a) Free hold Land 10,200,000
b) Cost of 17 WTG ( Including Interest, etc) 522,433,161 532,633,161 532,633,161
131,734,838 104,150,367
ii) Accumulated Depreciation
iii) Future Lease Rent Receivables
a) Not later than one year 42,000,000 42,000,000
b) Later than one year and not later than fi ve year 168,000,000 168,000,000
c) Later than fi ve year - 42,000,000
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29) Related Party Disclosure In accordance with Accounting Standard 18 on Related Party Disclosure issued by the Institute of Chartered Accountants of India,
the company has complied with the required information as per details given below:A) List of Related Parties
i) Key Management Personnel a) Mr. Sanjay Jhunjhunwala ( Chairman ) b) Mr. Sandip Jhunjhunwala ( Managing Director ) ii) Name of Companies, where control exist ( either individually or with others) a) Aspective Vanijya Pvt. Ltd. b) Jagadhatri Tracon Pvt. Ltd. c) REI Steel & Timber Pvt. Ltd. d) Snehapusph Barter Pvt. Ltd. e) Subh Chintak Vancom Pvt. Ltd. f) Shree Krishna Gyanodaya Flour Mills Pvt. Ltd. g) Dr. ING N.K. Gupta Technical Consultants (P) Ltd. iii) Director's Relatives a) Mr. Kailash Chandra Jhunjhunwala b) Mrs. Koushalya Devi Jhunjhunwala c) Mrs. Sangita Jhunjhunwala d) Mrs. Suruchi Jhunjhunwala e) Mr. Akshay Jhunjhunwala f) Mr. Ambuj Jhunjhunwala g) Mr. Arnav Jhunjhunwala h) Mr. Shreyans Jhunjhunwala iv) Associates Companies a) REI Six Ten Retail Limited b) Varrsana Ispat Limited
B) Transaction with Related Parties Sl
No
Transactions Control
Exists
Key Management
Personnel (KMP)
Relative of KMP Subsidiary
1 Dividend Paid 87,906,681 3,062,304 430,740 - ~ on Equity Shares (104,823,913) (4,593,456) (646,110) -
2 Managerial Remuneration - 50,377,340 - - - (23,844,916) - -
3 Sale of Rice ~ REI Six Ten Retail Ltd 3,192,807,282 - - -
(3,697,424,732) - - - 4 Trade Receivables
~ REI Six Ten Retail Ltd 1,525,977,994 - - - (3,246,287,108) - - -
5 Investment in Shares ~ REI Six Ten Retail Ltd 312,478,748 - - -
(70,000,000) - - - ~ Varrsana Ispat Ltd 1,763,084,443 - - -
(1,245,699,650) - - - 6 Professional Fee Paid
~ Dr. ING N.K. Gupta Technical
Consultants (P) Ltd.
3,309,000 - - -
(2,206,000) - - -
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(Amount in `)
2011-12 2010-11
30) DETAILS OF FOREIGN CURRENCY TRANSACTIONS
30.1) FOB value of Finished Goods Export 2,243,144,208 4,185,440,239
30.2) Payment for Capital Goods Import 13,731,241 449,292,782
30.3) Amounts remitted on a/c of Didivend to FII/Non-Resident Shareholders
On Equity Shares 2,122,560 2,122,560
On Preference Shares 16,000,000 16,000,000
30.4) No of Non-Resident Share holders
On Equity Shares 4 4
On Preference Shares 4 4
30.5) No of shares held by Non-Resident Share holders
On Equity Shares 7,075,200 7,075,200
On Preference Shares 4,000,000 4,000,000
31) The year end foreign currency exposures that have not been hedged by a derivative instruments or otherwise is given below:
2011-12 2010-11
Receivables/ (Payable) Receivables/ (Payable)
( in `) ( in $ ) ( in `) ( in $ )
On PCFC Facilities (3,418,769,783) (66,829,626) 183,556,302 (4,111,003)
FCCB ( Net of Deposit abroad ) (2,830,030,782) (55,321,040) 1,366,173,864 (30,597,399)
External Commercial Borrowings (88,672,271) (1,733,353) (154,788,416) (3,466,706)
Trade Receivable ( For Export ) 1,094,256,146 21,390,364 935,733,702 20,957,082
32) Previous year’s fi gures have been regrouped/re-arranged wherever considered necessary
33) Figures in brackets in Notes denote previous year's fi gure
In terms of our attached report of even date
For P. K. Lilha & Co. For and on behalf of the Board
Chartered Accountants
[Firm Registration No.: 307008E] Sandip Jhunjhunwala K. D. Ghosh
Managing Director Director
CA. P. K. Lilha
Partner
M No.: 11092 Ranjan Majumder Mandan Mishra
Chief Financial Offi cer Company Secretary
Place : Kolkata
Dated : 30th May, 2012
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FINANCIAL INFORMATION OF SUBSIDIARY COMPANIES (Amount in `)
Sl
No.
Particulars Ammalay
Commoditiess JLT
Auckland
Holdings Limited
Holy Stars
Limited
Orient Agro
(M) Ltd.
1 Reporting Currency AED $ $ $
2 Country UAE (Dubai) Mauritius Mauritius Mauritius
3 Capital 3,679,669 55,267 55,267 55,570
4 Reserves 1,630,645,850 37,282,687 6,402,742 874,549
5 Total Assets 2,537,968,886 590,400,653 881,469,491 188,007,345
6 Total Liabilities 2,537,968,886 590,400,653 881,469,491 188,007,345
7 Investments - - - -
8 Turnover/Total Income 10,381,213,954 372,572,486 690,498,694 125,051,081
9 Profi t Before Taxation 1,587,064,083 36,301,035 2,703,402 931,876
10 Provision For taxation - - - -
11 Profi t After Taxation 1,587,064,083 36,301,035 2,703,402 931,876
12 Proposed Dividend - - - -
Exchange Rate as on 31.3.2012 : 1AED = ` 13.9391, 1$ = ` 51.1565.
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REI AGRO LIMITED
Registered Office: “Everest House” 46 C, Chowringhee Road, 15th Floor, Room No.-15B, Kolkata-700071