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Kohinoor Foods
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Download Annual Report PDF Format 2013 | 2012 | 2011 | 2010
Directors Report Year End : Mar '13    Mar 12
The Directors have pleasure in presenting the --- Annual Report and
 the Audited Annual Accounts of the Company for the financial year ended
 31st March, 2013.
 
 Financial Overview
 
 The year under review has been quite promising and challenging for the
 Company, with an Overall Turnover growth of 13% (approx) and the Export
 Sales grew by 22% (approx) vis-a-vis last year''s performance. The
 financial highlights for the year ending 31st March, 2013 are as under:
 
 
 Particulars                           FY''13          FY''12
 
 Total Turnover                     10896.62       9,649.11
 
 Profit Before Interest, 
 Depreciation                        1164.63         240.22 
 and Tax (PBIDT)
 
 Profit/(Loss) Before 
 Exceptional and                      160.04        (761.15) 
 Extra-Ordinary
 Items
 
 Exceptional and 
 Extra Ordinary Items                   0.00        2997.79
 
 Profit Before Tax                    160.04        2236.64
 
 Less: Tax Expense                     62.65         404.14
 
 Profit after Tax                      97.40        1832.50
 
 Figures in Rs. Million
 
 Operations:
 
 For the year under review, the company has exhibited positive growth in
 the Export market As shown below the Export Sales grew by 21.91%
 amounting to Rs. 6,849 million against Rs. 5,618 million in previous
 year while the Domestic Sales stood at Rs. 4,026 million as against Rs.
 3,983 million in the previous year.
 
 This year the major contributors towards the company''s growth were:
 
 Focus on Middle East: The year saw increased growth of Basmati Rice
 sales that includes private label as well in the Middle East markets
 comprising of Iran, Bahrain, Iraq, Israel, Jordan, Kuwait, Lebanon,
 Syria & Yemen. The company embarked on major brand promotion campaign
 in Iraq especially. in Kurdistan (above the line activity) in the first
 quarter of the year that consists of Television, Print & Radio for its
 flagship brand Kohinoor. Tremendous consumer awareness was generated
 through successful media campaign and Kohinoor was able to distinguish
 itself from the other available brands and emerge as a respectable name
 for basmati rice in the Iraqi market. In Saudi Arabia, we have given
 Kohinoor a solid foundation and our products are present in all the
 leading supermarkets viz., Panda, Carrefour, Danube, Bin Dawood, Lulu,
 Nesto, Tammimi and Star Markets besides other Retail Chains. In Kuwait,
 Bahrain, Oman & Lebanon, the company undertook promotional programs and
 consistent initiative in these markets to drive long-term value to our
 customers.
 
 New Clients added: In rice business, new clients were added some of
 the prestigious ones from countries like Benin, Cyprus, Germany, Iran,
 Israel, Italy, Jordan, Kuwait, Lebanon, Maldives, New Zealand, Poland,
 Reunion & Saudi Arabia.
 
 New markets added: Some of the highlights of the company''s export
 business comprised addition of new markets such as Benin, Tanzania,
 Ivory Coast, Algeria, & Ukraine. The company is focused on spreading
 its foot prints across the globe and reaching out to new customers.
 Plan to identify and add new fast growing markets in the next financial
 year to increase our width of distribution in both Food & Rice
 products.
 
 Growth across continents: Basmati rice business grew in almost all
 geographies globally that we are present in e.g., Asia Pacific, Middle
 East, Africa, United Kingdom & Europe.
 
 Launch of New Products: In our endeavor to offer to new products to
 our consumers, your company launched Kohinoor Pure Ghee in the select
 markets of Zambia, Oman, Bahrain, USA, Hong Kong, Kuwait, Australia,
 New Zealand & Singapore to a positive response. In future this product
 is expected to contribute to the sales revenue of Food Business
 Division. In addition to the pure ghee, your company launched Instant
 Mixes, Namkeens (Indian Savories), Indian Sweets in the select market
 globally. Besides we continue to focus on Ambient Range- Cooking Paste,
 Cooking Sauces & Ready to Eat to cater to the varying tastes and
 requirements of our consumers across the globe.
 
 Subsidiaries: Exports of Basmati Rice to our wholly owned subsidiary in
 United Kingdom- Indo European Foods Limited have recorded an increase
 in revenue by 17%. We are available in major super markets across
 United Kingdom such as Booker Cash & Carry, Tesco, Lidl, Sainsbury,
 Morrisons & Kerry Foods. Our export to USA subsidiary- Kohinoor Foods
 USA Inc has posted a decline in revenues due to various challenges
 being faced by Indian exporters.  However, we are reaching close to
 their expectations but still not there yet, the issue has driven the
 import cost by almost 12-15% more.
 
 EXPORTMARKETS Export- Basmati Rice
 
 This year, in the Export of Basmati Rice, the company did the business
 of around Rs. 5,178 million as against Rs. 3,692 million in the
 previous financial year. Though the company did business in more than
 60 countries this year and recorded a growth of 40.26% in comparison to
 the last year business. Some of the countries which recorded
 significant growth in Basmati Rice exports were Australia, Reunion,
 Angola, Iran, Iraq, Jordan, Israel & United Kingdom.
 
 Postal Ballot
 
 A Notice dated 12th July, 2013 was circulated to the Shareholders
 seeking approval under section 81(1A) of the Companies Act, 1956 for
 allotment of 20% equity Shares to Al Dahra International Investment
 LLC, Abu Dhabi with such other term and condition as may be stipulated
 and also for consent under Section 293(1)(a) & 293(1)(d) of the
 Companies Act, 1956 by way of voting through postal ballot process in
 terms of Section 192Aof the Companies Act, 1956 read with the rules
 made there under.
 
 Mr. Vinod Aggarwal, Practicing Company Secretary was appointed as the
 Scrutinizer for conducting the postal ballot process.
 
 In terms of the report dated 22nd August, 2013 submitted by Mr. Vinod
 Aggarwal, Scrutinizer, the Chairman declared that the consent of the
 Shareholders has been obtained with, requisite majority.
 
 Dividend
 
 Your Directors do not recommend any dividend for the financial
 year2012-13.
 
 Re-Appointment / Appointment / Resignation of Directors
 
 In accordance with the provisions of the Companies Act, 1956, Mr. Vijay
 Burman and Mr. Sandeep Kohli, Directors retire by rotation at the
 ensuing Annual General Meeting and being eligible offer themselves for
 reappointment. Your Directors recommend their re-appointment.
 
 Mr. Maharaj Kishen Trisal was appointed as an Additional Director by
 the Board at its meeting held on 10th November, 2012.  According to the
 provisions of Section 260 of the Companies Act, 1956, he hold that
 office up to the date of this Annual General Meeting.  As required by
 Section 257 of the Act, a notice has been received from a member
 signifying his intention to propose his appointment as a Director,
 along with deposit of rupee five hundred.
 
 Your Directors recommend this resolution for approval of the members.
 
 Mr. Satish Chander Gupta was appointed as an Additional Director by the
 Board at its meeting held on 14th August, 2013.  According to the
 provisions of Section 260 of the Companies Act, 1956, he hold that
 office up to the date of this Annual General Meeting.  As required by
 Section 257 of the Act, a notice has been received from a member
 signifying his intention to propose his appointment as a Director,
 along with a deposit of rupee five hundred.
 
 Your Directors recommend this resolution for approval of the members.
 
 Mr. Vijay Prakash Agarwal, Independent Directorof the company has
 resigned from the post of Directorship w.e.f. 13th February, 2013, the
 board has accepted the same and appreciated his effort for providing
 great contribution to the company for past so many years.
 
 Compliance with Section 212:
 
 As required under the Listing Agreements with the stock exchanges, a
 Consolidated Financial Statement of the Company and all its
 subsidiaries is attached. The Consolidated Financial Statements have
 been prepared in accordance with the relevant Accounting Standards as
 prescribed under Section 211(3C) of the Companies Act, 1956 (Act).
 These financial statements disclose the assets, liabilities, income,
 expenses and other details of the Company, its subsidiaries and
 associate companies.
 
 Pursuant to the provision of Section 212(8) of the Act, the Ministry of
 Corporate Affairs vide its circular dated February 8, 2011 has granted
 general exemption from attaching the Balance Sheet, Profit and Loss
 Account and other documents of the Subsidiary Companies with the
 Balance Sheet of the Company. A statement containing brief financial
 details of the Company''s subsidiaries for the financial year ended March
 31,2012 is included in the Annual Report. The annual accounts of these
 subsidiaries and the related detailed information will be made
 available to any member of the Company/its subsidiaries seeking such
 information at any point of time and are also available for inspection
 by any member of the Company/its subsidiaries at the
 registered/Corporate office of the Company. The annual accounts of the
 said subsidiaries will also be available for inspection, as above, 
 at the head
 office/registered offices of the said respective subsidiary companies.
 The Company shall furnish a copy of details of annual accounts of
 subsidiaries to any member on demand.
 
 Internal Control System
 
 Your Company has well established Internal Control Procedures across
 its various locations, commensurate with its size and nature of
 operations to ensure that financial and Operating Reporting Systems are
 reliable and that all material risks are evaluated. The Internal audit
 function is adequately resourced and reports independently to the Audit
 Committee ofthe Board. In the opinion of the management and the
 internal auditors, there exists adequate safeguard against fraud and
 negligence within the company.
 
 Listing at Stock Exchange
 
 The Equity Shares of the Company are listed with Bombay Stock Exchanges
 Ltd. and National Stock Exchange of India Ltd. The annual listing fee
 for the year 2013-14 has been paid to the Exchanges.
 
 Corporate Governance
 
 Your company has taken adequate steps to ensure compliance with the
 provisions of Corporate Governance as stipulated by the Stock
 Exchanges. A separate report on Corporate Governance and its compliance
 by the company is attached as Annexure ''A'' to this report. The Company
 has also taken Auditors Certificate on its Compliance and the same is
 attached with its Annual Report.
 
 Auditors
 
 The Board on the recommendation of the Audit Committee has considered
 the appointment of M/s Rajender Kumar Singal & Associates, Chartered
 Accountants, New Delhi ( Firm Registration No. 016379N), as a Statutory
 Auditors of the Company at the ensuing Annual General Meeting.
 
 The Board recommends the appointment of M/s Rajender Kumar Singal &
 Associates, Chartered Accountants, New Delhi, who have given their
 consent and a certificate to the effect that their appointment, if
 made, will be within the limit specified under Section 224(1B) of the
 Companies Act, 1956.
 
 M/s. Nath Ahuja & Co., Statutory Auditors of the Company has resigned
 from the Company effective at the conclusion of forthcoming Annual
 General Meeting of the Company. The Board hereby record appreciation for
 the service rendered by them during their tenure.
 
 Auditors Report
 
 The Company has received the Auditors Report duly signed by M/s Nath
 Ajuja & Co., and took note on the same. Further as mentioned in the
 Auditors Report attention is drawn to Note No. 11(c) & 39(a)(i) to the
 financial statement, the board discussed the contention of the Auditor
 and is of the view that the losses incurred by the wholly owned
 subsidiary is not going to affect the company''s investment in long run.
 Further as per advice received from legal experts and on the basis of
 merit of the case, there is a high probability that the income tax order
 will be set aside and the demand will be quashed. Accordingly,
 management is of the view that no provision in respect of the above
 demand is required to be made in the books of accounts.
 
 Cost Auditors
 
 The Cost Auditor M/s H. Tara & Associates, appointed as Cost
 Accountants of the Company for the year 2012-13, has completed the audit
 of the cost record of the company and will submit his report within 180
 days from the close of Financial Year.
 
 The Board has appointed M/s Cheena and Associates, Cost Accountants, as
 Cost Auditors of the Company as required under Section 233B of the
 Companies Act, 1956 for the Financial Year 2013-14 for conducting the
 audit of the Cost Records of the company.
 
 Secretarial Audit Report
 
 As a measure of good corporate governance practice, the Board of
 Directors of the company appointed M/s Vinod Aggarwal and Associates,
 Company Secretaries to conduct Secretarial Audit of the company. The
 Secretarial Audit Report as received from the Practicing Company
 Secretary, for the Financial Year ended March, 31,2013 is annexed to
 the Annual Report. As per the Secretarial Audit Report the company has
 complied with all the applicable acts, laws, rules and regulations.
 
 Fixed Deposits
 
 Your company has not accepted any deposit from Public during the year
 under review.
 
 Share Capital of the Company
 
 In the last Annual General Meeting of the Company, the authorized share
 capital has been increased from Rs. 50 crores to 75 crores. The Company
 has paid the Stamp Duty and all the Statutory Compliances in this
 regard has been completed.
 
 STATUS OF PENDING LITIGATIONS BEFORE VARIOUS COURT/AUTHORITIES
 
 1.The Company has preferred an appeal before the Income Tax Appellate
 Tribunal, New Delhi against the impugned Income Tax Assessment Order in
 respect of Assessment years 2002-03 to 2008-09 in which additional
 income tax of Rs. 63.32 Cr ( Pr. Yr. 64.04 Cr.) along with interest of
 Rs. 31.55 Cr. (Pr. Yr.-Rs.31.73 Cr.) has been demanded. As per the
 advice received from legal experts and on the basis of merit of the
 case, there is a high probability that the impugned order will be set
 aside and the demand will be deleted. Accordingly, management is of the
 view that no provision in respect of the above demand is required to be
 made in the books of accounts. However during the current financial
 year the company has deposited Rs. 6.00 Cr. Under Protest against the
 above pending demand.
 
 2.The company has filed a suit for declaration, and mandatory
 injunction against the Reserve Bank of India and Punjab National Bank
 before the Hon''ble High Court, New Delhi for loss of Rs. 27.49 crores
 arising out of forex derivative transactions.
 
 3.The company has filed a suit for declaration and mandatory injunction
 against the Reserve Bank of India and HDFC Bank before the Hon''ble High
 Court, New Delhi for loss of Rs. 39.50 crores (previous year 39.22
 crores) arising out of forex derivative transactions. An Application
 has also been filed by the HDFC Bank Ltd., before DRT Mumbai, for
 recovery of dues amounting to Rs. 8.69 crores (previous year Rs. 72.84
 lakhs). Against the aforesaid order the company has filed an appeal
 with DRAT.
 
 4.The Board of Trustee ofthe port of Mumbai has filed a money suit for
 recovery of Rs. 9.63 crores towards alleged outstanding demurrage
 charges against which the company has filed its counter claim of Rs.
 10.88 crores towards the financial losses, interest on the investment,
 refund of the license fees, refund of the demurrage charges,
 compensation and damages etc.
 
 5.There are few more cases which are pending before the various
 authorities and the same have been duly disclosed under Notes to the
 Account.
 
 Information Regarding Conservation of Energy etc.
 
 Information required under Section 217 (1) (e) of the CompaniesAct,
 1956 read with the Companies (Disclosure of particulars in the report
 of Board of Directors) Rules, 1988 as amended from time to time is
 given in Annexure ''B'' forming part of this report.
 
 Information regarding Employees
 
 In terms of the provisions of Section 217(2A) of the Companies Act, 1956
 read with the companies (Particulars of Employee) Rules 1975 the names
 and other particulars of Employees are given as under:
 
 i) Name of the Employees, Designation/Nature of Duties, Gross
 Remuneration, Qualification, Age, Total Experience (in years), employed
 part of the year and in receipt of remuneration of Rs. 60,00,000/- or
 more per annum are as under:
 
 a) Shri Jugal Kishore Arora, Whole time Director designated as
 Chairman, Rs. 73,11,144/-, Graduate, 70 years, 27 years, 27th
 September, 2012 and he is the promoter of the company.
 
 b) Shri Satnam Arora, designated as Joint Managing Director, Rs.
 72,49,427/-, Post Graduate, 64 years, 27 years, 271 September, 2012
 and he is the promoter of the company.
 
 c) Shri Gurnam Arora, designated as Joint Managing Director, Rs.
 77,80,398/-, Graduate, 63 years, 27 years, 27th September, 2012 and he
 is the promoter of the company.
 
 ii) Employed part of the year and in receipt of remuneration of Rs.
 5,00,000/- or more per month during any part of the year under
 consideration.: Nil
 
 Directors'' Responsibility Statement
 
 Pursuant to Section 217 (2AA) of Companies Act, the Directors confirm
 that:
 
 a) in the preparation of the annual accounts, the applicable accounting
 standards have been followed and that there are no material departures;
 
 b) appropriate accounting policies have been selected and applied
 consistently and judgments and estimates made are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the company at the end of the financial year and of the profit of the
 Company for that period;
 
 c) proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the company and for
 preventing and detecting fraud and other irregularities;
 
 d) the annual accounts have been prepared on a going concern basis
 
 Awards & Recognitions
 
 Kohinoor Foods is no stranger to Awards & Recognitions. Since its
 inception, the company has been earning awards and recognition like
 consumer validated Super Brand Award (thrice in series), Reader''s
 Digest Most Trusted Brand award (4 times in a row), Power Brand Award,
 Guinness Book of World Record (for making World''s Largest Biryani),
 National award for Export Excellence, Brand Equity Award &
 Many APED Aawards.
 
 Corporate Social Responsibility
 
 Kohinoor also envisions to improve lives in communities we live around,
 protect workplace rights, respect people, support missions that help
 people have a better life, provide good jobs, world class quality
 products and a healthy environment to all of us around.
 
 At Workplace, Kohinoor Foods maintain high standards for fair and
 dignified treatment of all the people who work for our company. For all
 of its employees, it is not just a place to work, but like another home
 and everybody in it like a big family, closely bonded with each other.
 
 Kohinoor Foods also believes that a company is as good as the people
 who work for it - their combined talents; skills, knowledge, experience
 and passion make a company what it is. Hence, company''s continuous goal
 is to inspire and motivate its people to hone their talents, increase
 their knowledge & skills and achieve extraordinary results at their
 workplace. In this endeavor we have offered subsidized meals to our
 employees at a very nominal cost.
 
 The company also considers it as its responsibility to support the
 community that we live in. Kohinoor Foods supports ''Maitri'' an NGO
 working for widows on Vrindavan to make difference in their lives. It
 also supports''Smt. Nagendram Nandi Nelayam Trust'', the non-governmental
 organization working for animals, environment and education. We have
 supported the needy girl child''s education at Him Jyoti School,
 Dehradun and have initiated for distribution of blankets and bed sheets
 during winters for under privileged & homeless people to help them with
 basic necessities of life on regular basis.
 
 Being environmentally conscious company and as part of Go Green
 campaign, we have put up water treatment plant in our rice factory
 (Murthal), where treated water is used for watering the lawn, garden
 and irrigate the fields.
 
 Adherence to global human rights standards, No minor labour, Fairtrade
 practices, complete Medical facilities for its people, Safe & sound
 working environment are the things that Kohinoor Foods take utmost care
 about.
 
 Acknowledgment
 
 Your Directors acknowledge with gratitude, the commitment and
 dedication of the employees at all levels that has contributed to the
 growth and success of the company. Your Directors also put on record
 their appreciation and thanks to the Authorities and millions of
 consumers who have reposed faith in the products of your company.
 
 For and on Behalf of the Board 
 
 
 Sd/-
 
 Jugal Kishore Arora                    New Delhi
 
 Chairman                               September 6th, 2013
Source : Dion Global Solutions Limited
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