Riverdale Foods Ltd. के अकाउंट के लिये नोट

Mar 31, 2012

1. Corporate Information

Riverdale Foods Limited (the 'Company') has registered office and the manufacturing facility at Somatne Village, Talegaon Dabhade, Pune, Maharashtra, India.The Company could not operate its plant in a stabilized manner since financial year 2001-02. It had accumulated losses and the net worth was fully eroded. The Company was declared a sick industrial company in 2003 by the Board for Industrial and Financial Restructuring ("BIFR")as constituted under the provisions of Sick Industrial Company (Special Provisions) Act, 1985 by the Government of India.

A rehabilitation scheme for the revival of the Company was formulated. The scheme was sanctioned on July 2, 2010 which is under implementation. In accordance with the Rehabilitation Scheme sanctioned by the Hon'ble Board for Industrial and Financial Reconstruction:

i) All the liabilities of the Company not disclosed in the financial statements as of March 31,2007, as filed with the BIFR, will be the sole responsibility of the then existing promoters of the Company, and the said promoters shall be considered to have constructively pledged their shareholding in the Company to secure the Strategic Investor, namely, ANC Holdings LLC (a limited liability company registered in the Emirate of Dubai, United Arab Emirates), against any un-disclosed liability.

ii) The Hon'ble BIFR vide its order has exempted the Company from observing the procedures prescribed under Section 100 of the Companies Act, 1956. The equity share capital of the Company has been reduced from Rs.4,80,80,000 to Rs. 2,40,40,000 (i.e. the nominal and paid up value of one equity share of Rs.10 each has been reduced to Rs.5 each). Consequently, Rs.2,40,40,000 were adjusted against the accumulated losses of the Company.

iii) The authorised capital of the Company of Rs.5,00,00,000 were re-classified from 50,00,000 equity shares of Rs. 10/- each to 1,00,00,000 equity shares of Rs. 51- each. The Company is exempted from passing resolution for reclassification of authorised share capital from the face value of Rs. 10 per share to Rs.5 per share and thereafter the authorised share capital was increased to Rs. 9,70,00,000 (1,94,00,000 equity shares of Rs. 5/-each).

iv) The Sanctioned Rehabilitation Scheme envisaged induction of fresh equity of Rs.721,20,000 by issue of 1,44,24,000 equity shares of Rs.5/-each fully paid up, to ANC Holdings LLC, the strategic investor, thereby increasing their its shareholding to 75% of the equity capital of the Company. This issue of shares was to be made within 90 days of sanction of scheme.

v) Till date 51,92,000 shares of Rs. 51- each aggregating to Rs. 2,59,60,000 have been allotted in favor of ANC Holdings LLC (a limited liability company registered in the Emirate of Dubai, United Arab Emirates), the Strategic Investor. ANC Holdings LLC holds 51.92 % equity capital of the Company as such the Company is a subsidiary of ANC Holdings LLC, Dubai. The Share Application Money pending allotment of shares to ANC Holdings LLC as at March 31,2012was Rs. 16,629,801 .The shares held by the Strategic Investor are subject to lock-in of 3 years and form part of Promoter group shareholding.

a) Terms/rights attached to equity shares

The Company has only one class of equity share having a par value of Re. 5 per share. Each shareholder of equity share is entitled to one vote per share. The Company declares and pays dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

b) Number of equity shares held by holding company

5,192,000 (5,192,000) equity shares being 51.92 % (51.92 %) of total equity shares of the Company are held by ANC Holdings LLC, the holding company.

a) The land acquired by the Company was earlier standing in the names of the former and some of the present Directors. Out of said land a major part on which factory building and other structures are constructed has been transferred in the name of the Company vide Sale Deed executed and lodged for registration with the Sub-Registrar, Vadgaon Maval on 14th May, 1997. The Directors had undertaken to transfer the balance vacant land in the name of the company after completion of necessary legal and procedural formalities. The same are still continuing in the names of such Directors of the Company.

b) In the best estimates and in the opinion of Board of Directors of the Company, there is no impairment in the value of tangible assets during the year.

Share Application Money of Rs.16,229,801 (Previous Year Rs.99,03,990/-) pertains to inward remittance received from non resident Holding Company for allotment of equity shares of the Company. This amount is non refundable and no interest is payable for the period pending allotment.

The Company has to issue 3,245,960 equity shares of Rs. 5 each to the holding Company in terms of the rehabilitation scheme sanctioned by Hon'ble BIFR.

The company has sufficient authorised capital to cover the share capital amount resulting from allotment of shares out of such share application money.

In accordance with the RBI notification no. FEMA170/2007-RB notified vide G.S.R. 737 (E) dated 29th November 2007, 180 days have elapsed since the receipt of funds and the equity instruments have not been issued till date. The Company is in the process of meeting the necessary compliances as specified by the regulator.

In terms with the sanctioned rehabilitation scheme, the outstanding government loan is to be repaid in three equal annual interest free instalments. The balance of government loan is subject to confirmation and subsequent reconciliation with the Sales Tax Department. The Company expects that it will be able to settle the liability as per the sanctioned rehabilitation scheme.

The Company could not retrieve the individual -wise details of pre strategic investor's liability despite best efforts which stood at Rs. 9,393,245 as at April 1, 2011. During the year, the company paid off Rs. 3,140,000 to such creditors on reconciliation/ confirmation of their claims. The balances of such creditors of Rs. 6,253,345 as at March 31 2012 are subject to confirmation and subsequent reconciliation.

There is no information available with the Company of the amounts payable to micro, small and medium enterprises as defined in section 7(1)of the Micro, Small and Medium Enterprises Development Act, 2006.

The issue of equity share against share application money pending allotment (potential equity shares) will be at price in terms of sanctioned rehabilitation scheme on the date of issue, and if taken into consideration for calculation of diluted EPS, will result in reducing loss per share and therefore conversion of potential equity share for computing diluted EPS is considered as anti-dilutive.

2. The Company is primarily engaged in the business of processed chicken and related products. It operates from single geographical location. Accordingly, there are no reportable segments as defined in Accounting Standard 17on "Segment Reporting" issued by the Institute of Chartered Accountants of India.

3. Pursuant to Accounting Standard (AS18) - "Related Party Disclosure" issued by Institute of Chartered Accountants of India, following parties are to be treated as related parties along with their relationship:

List of Related Parties -

ANC Holdings LLC, Dubai UAE- holding company Featherland Farms Private Limited-associate company Nehawa Farms (Private Limited- associate company Riverdale Farms Private Limited-associate company Riverdale Hatcheries Private Limited-associate company Key Management and Directors -

Mr. G.M. Harianwala- Managing Director Mr. R. Karnam - Director

Mr.A.M. Harianwala - Director Mr. T.K. Rao-Director.

Mr.Vivek Gupta-Director Mr.Densil Quadros-Director

Transactions with Associated Companies as Related Parties: During the year, the ANC Holdings LLC, Dubai, UAE infused Rs. 6,325,811 (as at March 31 2011 Rs.3,58,63,990), as Share Application Money towards allotment of equity shares of the Company, in accordance with the sanctioned Rehabilitation Scheme anctioned by the Hon'ble BIFR. Against the same, the Company has not allotted any equity shares during the year (Year ended March 31, 2011, it allotted 51,92,000 equity shares aggregating to Rs. 2,59,60,000}. The remaining amount is held as Share Application Money, pending allotment. Besides the above, there were no transactions with the related parties, during the year (Previous year Rs. NIL).

4. In view of the Accumulated Losses of the Company and the absence of virtual certainty over its realization, Deferred Tax Asset has not been recognized. The relief and concessions from various Government Authorities, when confirmed to the Company will provide correct determination of deferred tax.

5. The registered office of the Company where from the day to day working of the Company was being carried on earlier is situated in the premises of Riverdale Farms Private Limited, a Company belonging to the erstwhile promoters group. In the absence of access to the aforesaid office, whereat all the books of account and records of the Company are stored, the financial statements have been drawn on the basis of current year books and records in possession of the Company.

6. Figures and words in brackets pertain to previous year unless otherwise specified.

7. Figures have been rounded off to the nearest Rupee.

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Mar 31, 2011

A) In accordance with the Rehabilitation Scheme sanctioned by the Hon'ble Board for Industrial and Financial Reconstruction (BIFR):

i) All the liabilities of the Company not disclosed in the financial statements as of March 31, 2007, as filed with the BIFR, will be the sole responsibility of the then existing promoters of the Company, and the said promoters shall be considered to have constructively pledged their shareholding in the Company to secure the Strategic Investor, namely, ANC Holdings LLC (a limited liability company Registered in the Emirate of Dubai, United Arab Emirates), against any un-disclosed liability.

ii) (a) The Hon'ble BIFR vide its order has exempted the Company from observing the procedures prescribed under Section 100 of the Companies Act, 1956. As per the sanctioned scheme, the equity share capital of the Company has been reduced from Rs.4,80,80,000 to Rs. 2,40,40,000 ( i.e. the nominal and paid up value of one equity share of Rs. 10 each has been reduced to Rs.5 each). Consequently, Rs.2,40,40,000 has been adjusted against the Accumulated Losses of the Company.

(b) The authorised capital of the Company of Rs.5,00,00,000 was re-classified from 50,00,000 equity shares of Rs. 10/- each to 1,00,00,000 equity shares of Rs. 5/- each. The Company is exempted from passing resolution for reclassification of authorised share capital from the face value of Rs. 10 per share to Rs.5 per share and thereafter the authorised share capital was increased to Rs. 9,70,00,000 (1,94,00,000 equity shares of Rs. 5/- each).

iii) Till date 51,92,000 shares of Rs. 5/- each aggregating to Rs. 2,59,60,000 have been allotted in favor of ANC Holdings LLC (a limited liability company registered in the Emirate of Dubai, United Arab Emirates), the Strategic Investor. ANC Holdings LLC holds 51.92 % equity capital of the Company as such the Company is a subsidiary of ANC Holdings LLC, Dubai. As per the sanctioned rehabilitation scheme, the Strategic Investor is expected to infuse further funds into the Company to increase its shareholding to 75% of the equity capital of the Company. The Share Application Money pending allotment of shares introduced by ANC Holdings LLC as at March 31, 2011 was Rs. 99.04 lacs, and the aggregate share application money pending allotment, as of this date is Rs. 143.08 Lac. The shares held by the Strategic Investor are subject to lock-in of 3 years and form part of Promoter group shareholding.

iv) The dues of Bank of India settled on One time settlement basis at Rs. 3,25,00,000, has been paid, and the concession of Rs. 8,62,70,068.25 granted by the Bank has been accounted in the income statement for the year as an Extraordinary Item. "No Dues" certificate has been obtained from the bank. The entire interest, penal interest, liquidated damages and other charges have been waived by the Bank. All charges held by bank over the assets of the Company have been vacated and guarantees of its promoters/directors stand released. The Bank had filed recovery proceedings against the Company in the Debt Recovery Tribunal, Pune ("the DRT") for recovery of its dues. Since the account with bank is settled now, the bank has withdrawn the recovery proceedings initiated by it before the DRT.

b) The payables are subject to confirmation and further reconciliation.

c) The Company's Accumulated Losses as on March 31, 2011 amount to Rs. 6,06,85,941 (Previous Year Rs. 13,67,01,718) against the Paid up Capital and non refundable Share Application Money aggregating to Rs.5,99,03,990 (Previous Year Rs 4,80,80,000). In accordance with the sanctioned Rehabilitation Scheme, sanctioned by the Hon'ble BIFR, the Holding Company is committed to financially support the operations and the fund requirements of the Company for refurbishment of existing Plant and Machinery, the requisite Capital Expenditure and arrange for the necessary working capital fund requirement for the operations of the Company. The management its the view that despite the erosion in the net worth, the Company will continue as a 'going concern' and be able to discharge its liabilities in the normal course of business.

d) Share Application Money of Rs.99,03,990/- (Previous Year Rs. Nil ) pertains to inward remittance received from non resident Holding Company for purchase of equity shares of the Company. In accordance with the RBI notification no. FEMA170/2007-RB notified vide G.S.R. 737 (E) dated 29th November 2007,180 days have elapsed since the receipt of funds and the equity instruments have not been issued till date. The Company is in the process of meeting the necessary compliances as specified by the regulator.

e) Receivables and Advances aggregating to Rs. 2,75,33,851/-, outstanding for recovery from the period prior to investment by the Strategic Investor, have been written off.

f) Prior period items represent financial implication of changes/alterations pertaining to financial years 2007-08, 2008-09 & 2009-10, as the same came to light in the current year and have been charged to the Income Statement for the year under consideration.

g) The land acquired by the Company was earlier standing in the names of the former and some of the present Directors. Out of said land a major part on which factory building and other structures are constructed has been transferred in the name of the Company vide Sale Deed executed and lodged for registration with the Sub-Registrar, Vadgaon Maval on 14th May, 1997. The Directors had undertaken to transfer the balance vacant land in the name of the company after completion of necessary legal and procedural formalities. The same are still continuing in the names of such Directors of the Company.

h) In view of the Accumulated Losses of the Company and the absence of virtual certainty over its realization, Deferred Tax Asset has not been recognized. The relief and concessions from various Government Authorities, when confirmed to the Company will provide correct determination of Deferred tax.

i) Expenditure incurred on employees who

a. If employed throughout the year, were in receipt of remuneration for that year which f in aggregate was not less than Rs. 24,00,000/- or;

b. If employed for part of that year, were in receipt of remuneration at a rate which in aggregate was not less than Rs. 2,00,000/-per month. Current Year: Rs. Nil (Previous Year: Rs. Nil).

j) Details of Managing Director's Remuneration:

Current year Salary Nil (Previous year Salary Nil). As no remuneration was paid to Managing Director and no commission is paid to the Directors, hence, determination of profit under Section 349 of the Companies Act, 1956 is not done.

k) Pursuant to de-rating and subsequent reclassification of equity shares, in terms of the sanctioned rehabilitation scheme, EPS for the year ended March 31, 2010 has been calculated on per share paid up value of Rs. 10/- and the EPS for the year ended March 31, 2011 has been calculated on per share paid up value of Rs. 5/-. EPS is calculated by dividing the profit attributable to the equity shareholders by the weighted average of the number of equity shares outstanding during the year. Numbers used for calculation basic and diluted earnings per equity share are as stated below:

l) The Company has not employed a whole time Company Secretary during the year.

m) There is no information available with the Company of small scale industries to whom the company owes a sum exceeding Rs. 1,00,0007- which is outstanding for more than 30 days at the Balance Sheet date.

n) In the absence of any taxable income the provision for taxation is not required to be made as per the provisions of I ncome tax Act, 1961.

o) The Company is primarily engaged in the business of processed chicken and related products. It operates from single geographical location. Accordingly, there are no reportable segments as defined in Accounting Standard 17 on "Segment Reporting" issued by the Institute of Chartered Accountants of India.

p) There are no claims against the Company which are acknowledged as debts. Transactions with Associated Companies as Related Parties: During the year, the ANC Holdings LLC, Dubai, UAE infused Rs, 3,58,63,990/-, as Share Application Money towards allotment of equity shares of the Company, in accordance with the sanclfcned Rehabilitation Scheme sanctioned by the Hon'ble BIFR. Against the same, the Company has allotted 51,92,000 equity shares of Rs.5/- each aggregating to Rs. 2,59,60,000/-. The remaining amount is held as Share Application Money, pending allotment. Besides the above, there were no transactions with the related parties during the year (Previous Year Rs. Nil).

q) The previous year's figures have been regrouped and recast wherever considered necessary to make them comparable with the current year's figures.

r) Additional information under part IV of the Schedule VI of the Companies Act, 1956, Balance Sheet abstract and general business profile:

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Mar 31, 2008

A. The statement of accounts are prepared on the basis of previous years balance sheet (which was presented by a director of Riverdale Foods Ltd. without proper notice) and transactions effected in Bank of India, J.M. Road Branch, Pune as available in the bank statement. The financial implication of the effect of changes/alterations would be taken at the material time, as and when they come to light and as may be considered necessary, and in case it necessitates revision of accounts of the related period, it would be so done.

b. The rehabilitation scheme submitted by the Company got the approval/sanction of the Hon'ble Board for Industrial and Financial Reconstruction vide its order issued on July 02, 2010. The sanctioned rehabilitation scheme envisages induction of fresh equity to the tune of Rs.721.20 Lac and allotment of 1,44,24,000 equity shares of Rs.5/- each fully paid up to ANC Holdings LLC, Dubai, the strategic investor. The waivers and concessions granted as per the scheme, will be accounted at the material time in the year in which the liabilities will be actually discharged by the Company.

c. ANC Holdings LLC Dubai, the Strategic Investor has, through its subsidiary Freshly Frozen Foods L.L.C, Dubai (FFF) negotiated with the Bank of India to settle their outstanding dues on OTS basis for Rs.325.00 Lac and has also placed a short term GBP deposit of equivalent amount with the Queen Victoria Street, London, United Kingdom branch of Bank of India, to be appropriated by the Bank towards the full and final settlement of the outstanding dues of the Company, in terms of the rehabilitation scheme sanctioned by the Hon'ble BIFR.

d. The Balances of Debtors, Creditors, Loans and advances are subject to confirmation and further reconciliation.

e. Expenditure incurred on employees who

a. If employed throughout the year, were in receipt of remuneration for that year which in aggregate was not less than Rs. 24,00,000/- or;

b. If employed for part of that year, were in receipt of remuneration at a rate which in aggregate was not less than Rs. 2,00,000/-per month.

Current Year: Rs. Nil (Previous Year: Rs. Nil).

f. Details of managing Director's Remuneration:

31.03.08 Salary Rs. Nil.

31.03.07 Salary Rs. Nil.

As no remuneration was paid to Managing Director and no commission is paid to the Directors, hence, determination of profit under Section 349 of the Companies Act, 1956 is not done.

h. The Company is unable to have whole time Company Secretary in its employment.

i. There are no small scale industries to whom the company owes a sum exceeding Rs. 1,00,000/- which is outstanding for more than 30 days at the Balance Sheet date. The above information has been furnished on the basis of the information available with the company.

j. Debts outstanding for more than six months and the old trade advances have not been provided for in the books of account.

k. The bank has re-called the term loan and working capital facilities granted to the Company. The bank has filed an application with Hon'ble Debt Recovery Tribunal, Pune for recovery of dues from the company and its guarantors. Post settlement and payment of dues to the bank, in terms of the sanctioned rehabilitation scheme, the application shall stand withdrawn.

l. The financial impact of the waivers of Term Loan, Working Capital granted by the bank and the interest accrued thereon, as per the sanctioned rehabilitation scheme, has not been accounted for in the books of account, of the year under consideration, as the same will be done at the material time when the liability is discharged by the Company.

m. The company is primarily engaged in the business of processed chicken and related products. It operates from single geographical location. Accordingly, there are no reportable segments as defined in Accounting Standard 17 on "Segment Reporting" issued by the Institute of Chartered Accountants of India.

n. Loans and advances include an amount of Rs. 9,99,238.65 (Previous Year Rs. 9,99,238.65) (Maximum amount outstanding at any time during the year Rs. 9,99,238.65) being the amount of trade advances given against the purchases to Private Companies in which directors of the Company are interested as Directors.

o. There are no claims against the company which are acknowledged as debts.

p. The disclosures of information with related parties and transactions with them as required by Accounting Standard 18:

List of Related Parties

a. Nehawa Farms Private Limited.

b. Riverdale Farms Private Limited.

c. Featherland Farms Private Limited

d. Riverdale Hatcheries Private Limited.

Key Management and Directors

a. Mr. G.M. Harianwalla Director.

b. Mr.A.M. Harianwalla Director.

c. Mr. R. Karnam Director.

d. Mr.T.K.Rao Director.

Transactions with Associated Companies as Related Parties:

a. Purchase of Raw Material and Other purchases Rs. Nil (Previous Year Rs. Nil).

b. Purchases of consumables Rs. Nil (Previous Year Rs. Nil).

c. Sale of By-Products Rs. Nil (Previous Year Rs. Nil).

d. Reimbursement of Expenses Rs. Nil (Previous Year Rs. Nil).

e. Recovery of Expenses Rs. Nil (Previous Year Rs. Nil).

r. The previous year's figures have been regrouped and recast wherever considered necessary to make them comparable with the current year's figures.