MIRA INFORM REPORT

Report Date :

16.11.2011

IDENTIFICATION DETAILS

Name :	KOHINOOR FOODS LIMITED (w. e. f. 29.01.2008)
Formerly Known As :	SATNAM OVERSEAS LIMITED
Registered Office :	201, VIPPS Center, Masjid Moth, Greater Kailash – II, New Delhi – 110048
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	26.07.1989
Com. Reg. No.:	55-037097
Capital Investment / Paid-up Capital :	Rs.281.932 Millions
CIN No.: [Company Identification No.]	L52110DL1989PLC037097
TAN No.: [Tax Deduction & Collection Account No.]	DELS20513D
PAN No.: [Permanent Account No.]	AAACS2470D
Legal Form :	A Public Limited Liability company. The company’s Shares are Listed on the Stock Exchange.
Line of Business :	Manufacturing and Exporting of Basmati Rice, Spices, Pickles, Papad, Cook-in-Sauces, Curry Pastes, etc.
No. of Employees :	300 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (48)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 6910000
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is an established and reputed company having satisfactory track. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are reported to be usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office :	201, VIPPS Center, Masjid Moth, Greater Kailash – II, New Delhi – 110048, India
Tel. No.:	91-11-41635757 (10 Lines)
Fax No.:	91-11-41638586/87
E-Mail :	info@kohinoorfoods.in
Website :	www.kohinoorfoods.in
Corporate Office :	Greater Kailash II, New Delhi – 110048, Delhi, India
Factory 1 :	50 – 51 Milestone, G. T. Road Murthal, District Sonepat, Haryana, India
Factory 2 :	71, Libaspur, Bahalgarh, District Sonepat, Haryana, India

DIRECTORS

As on 31.03.2011

Name :	Mr. Jugal Kishore Arora
Designation :	Chairman – Executive
Name :	Mr. Satnam Arora
Designation :	Joint Managing Director – Executive
Name :	Mr. Gurnam Arora
Designation :	Joint Managing Director – Executive
Name :	Mr. Vijay Burman
Designation :	Independent Director – Non-Executive
Name :	Mr. Vijay Prakash Agarwal
Designation :	Independent Director – Non-Executive
Name :	Mr. Anil Bhatia
Designation :	Independent Director – Non-Executive

KEY EXECUTIVES

Name :	Mr. Rama Kant
Designation :	Company Secretary
AUDIT COMMITTEE :
Name :	Mr. Vijay Burman
Designation :	Chairman
Name :	Mr. Vijay Prakash Agarwal
Designation :	Member
Name :	Mr. Anil Bhatia
Designation :	Member
REMUNERATION COMMITTEE :
Name :	Mr. Vijay Burman
Designation :	Chairman
Name :	Mr. Vijay Prakash Agarwal
Designation :	Member
Name :	Mr. Anil Bhatia
Designation :	Member
SHAREHOLDER GRIEVANCES COMMITTEE :
Name :	Mr. Vijay Prakash Agarwal
Designation :	Chairman
Name :	Mr. Stanam Arora
Designation :	Member
Name :	Mr. Vijay Burman
Designation :	Member

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2011

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	13644998	48.40
Sub Total	13644998	48.40
(2) Foreign	--	--
Total shareholding of Promoter and Promoter Group (A)	13644998	48.40
(B) Public Shareholding
(1) Institutions
Financial Institutions / Banks	176141	0.62
Foreign Institutional Investors	17500	0.06
Sub Total	193641	0.69
(2) Non-Institutions
Bodies Corporate	4474249	15.87
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	6095260	21.62
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	3561694	12.63
Any Others (Specify)	223382	0.79
Non Resident Indians	223382	0.79
Sub Total	14354585	50.92
Total Public shareholding (B)	14548226	51.60
Total (A)+(B)	28193224	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued
(1) Promoter and Promoter Group	--	--
(2) Public	--	--
Sub Total	--	--
Total (A)+(B)+(C)	28193224	100.00

BUSINESS DETAILS

Line of Business :	Manufacturing and Exporting of Basmati Rice, Spices, Pickles, Papad, Cook-in-Sauces, Curry Pastes, etc.
Products :	· Rice · Pulses · Foodstuff · Spices · Frozen · Ready to Eat

PRODUCTION STATUS AS ON 31.03.2011

Particulars	Unit	Installed Capacity	Actual Production
Rice	M.T.P.H	60	64063
Ready to Eat	M.T	12000 Pouches/ Bottles/ Trays/ Day	3348.72
Frozen Foods	M.T	20 M.T/Day	235.99

GENERAL INFORMATION

No. of Employees :

300 (Approximately)

Bankers :

· Oriental Bank of Commerce, Corporate Branch, New Delhi, India

· Axis Bank Limited

· Punjab National Bank

· Corporation Bank

· State Bank of India

· HSBC Limited

· Standard Chartered Bank

· Allahabad Bank

· Indusland Bank

· HDFC Bank Limited

· ICICI Bank Limited

· IDBI Bank Limited

· Bank of India

· Corporation Bank

· Kotak Mahindra Bank Limited

· Yes Bank

· Deutsche Bank

Facilities :

Secured Loan	As on 31.03.2011 (Rs. in Millions)	As on 31.03.2010 (Rs. in Millions)
Working Capital Loans :
Pre-Shipment	3477.585	4063.403
Post-Shipment	1209.565	732.459
Working Capital Demand Loan	1051.000	586.500
Cash Credit	859.550	446.250
Term Loans :
Term Loan for Fixed Assets	144.740	100.937
Corporate Loan	77.263	171.134
Long Term Working Capital Loan	820.963	55.400
Short Term Loan	600.000	546.770
Vehicle Loan	18.721	0.000
Long Term Supplier’s Credit	223.692	89.243
Total	8483.080	6792.097
- Working capital loan from banks are secured by hypothecation of inventory, book debts and other current assets of the company both present and future and the first charge on fixed assets of the company (exclusive of specific assets charged to term lending banks) and further, guaranteed by the promoter directors restricted to the extent of the their stake in immovable property at Amritsar. - Term Loan for Fixed Assets are secured by hypothecation of specific assets - Corporate Loan are secured by way of first parri passu charge on fixed assets of Murthal Factory - Long term working capital loan is secured by property belonging to promoters and/or subservient charge on current assets - Short term loan is secured by extension of charge as in case of working capital or subservient charge - Vehicle loans are secured against hypothecation of Vehicels
Unsecured Loan	As on 31.03.2011 (Rs. in Millions)	As on 31.03.2010 (Rs. in Millions)
Unsecured Loans from Banks	364.000	115.000
Total	364.000	115.000

Banking Relations :	--
Auditors :
Name :	Nath Ahuja and Company Chartered Accountants
Wholly Owned Subsidiaries :	· Sachdeva Brothers Private India Limited · Kohinoor Foods USA Inc. · Indo European Foods Limited, UK
Joint Venture :	· Rich Rich Raisers Factory LLC - Dubai
Enterprise over which key managerial personnel exercise significant influence :	· Satnam Overseas (Exports) – Partnership Firm of Promoter Directors

CAPITAL STRUCTURE

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
50000000	Equity Shares	Rs.10/- each	Rs.500.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
28193224	Equity Shares	Rs.10/- each	Rs.281.932 Millions

Of the above 720000 equity shares have been issued to promoter group on preferential basis on conversion of share warrants).

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		281.932	281.932	281.932
2] Share Warrants		0.000	0.000	74.276
3] Reserves & Surplus		1446.080	1810.927	1654.412
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1728.012	2092.859	1936.344
LOAN FUNDS
1] Secured Loans		8483.080	6792.097	5216.046
2] Unsecured Loans		364.000	115.000	309.189
3] Foreign Currency Convertible Bonds		0.000	302.907	341.669
TOTAL BORROWING		8847.080	7210.004	5866.904
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		10575.092	9302.863	7877.524
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		527.256	489.057	524.567
Capital work-in-progress		385.680	152.186	5.435
INVESTMENT		585.088	585.088	348.112
DEFERREX TAX ASSETS		118.998	30.485	55.254
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	7689.500	6391.457	5120.967
	Sundry Debtors	1915.604	1518.012	1118.561
	Cash & Bank Balances	115.732	157.594	52.503
	Other Current Assets	18.175	13.551	10.774
	Loans & Advances	912.843	904.622	1277.042
Total Current Assets		10651.853	8985.236	7579.847
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	1236.098	496.361	154.796
	Other Current Liabilities	140.673	130.791	192.515
	Provisions	317.012	331.987	312.013
Total Current Liabilities		1693.783	959.139	659.324
Net Current Assets		8958.070	8026.097	6920.523
MISCELLANEOUS EXPENSES		0.000	19.950	23.633
TOTAL		10575.092	9302.863	7877.524

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	9062.619	7727.984	6357.645
		Other Income	13.032	20.503	38.603
		TOTAL (A)	9075.651	7748.487	6396.248
Less	EXPENSES
		Cost of goods sold	6476.331	5191.095	4122.536
		Employees Remuneration and Benefits	175.899	144.939	126.311
		Administrative Expenses	131.199	134.545	273.363
		Selling and Distribution Expenses	491.034	437.546	422.616
		Loading and Unloading Charges	31.664	26.734	20.357
		Clearing Forwarding Import	9.367	32.745	2.357
		Packing Materials Consumed	376.947	330.350	263.163
		Wages and Salaries	26.965	27.158	17.069
		Processing Charges	32.018	39.331	1.968
		Repair to Machinery	26.174	35.409	27.371
		Consumables and Stores Consumed	15.562	14.193	0.000
		Power and Fuel	102.541	99.675	79.288
		Brokerage and Commission	21.042	24.367	18.482
		Freight and Octroi	62.154	52.920	52.830
		Extra Ordinary Items	540.545	290.744	500.089
		TOTAL (B)	8519.442	6881.753	5927.800
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		556.209	866.734	468.448
Less	FINANCIAL EXPENSES (D)		799.482	657.469	530.915
	PROFIT/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(243.273)	209.265	(62.467)
Less/ Add	DEPRECIATION/ AMORTISATION (F)		79.924	102.116	107.187
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)		(323.197)	107.149	(169.654)
Less	TAX (H)		(88.370)	24.909	(61.678)
	PROFIT/ (LOSS) AFTER TAX (G-H) (I)		(234.827)	82.240	(107.976)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		82.240	0.000	0.000
Less	APPROPRIATIONS
		Transfer to General Reserve	0.000	0.000	(107.976)
	BALANCE CARRIED TO THE B/S		(152.587)	82.240	NA
	EARNINGS IN FOREIGN CURRENCY
		FOB value of Direct Export of goods	3842.319	4184.082	3296.992
	TOTAL EARNINGS		3842.319	4184.082	3296.992
	IMPORTS
		Raw Materials	9.100	6.900	3.875
		Finished Products	782.000	433.600	--
		Capital Goods	176.100	106.007	17.609
		Packaging material	19.100	33.300	31.387
	TOTAL IMPORTS		986.300	579.700	52.871
	Earnings/ (Loss) Per Share (Rs.)		(8.33)	2.92	(4.08)

QUARTERLY RESULTS

PARTICULARS	30.06.2011 1^st Quater
Net Sales	1963.400
Total Expenditure	1681.100
PBIDT	282.300
Other Income	4.700
Operating Profit	287.000
Interest	195.500
PBDT	91.500
Depreciation	19.000
Profit Before Tax	72.500
Tax	10.500
Provisions and contingencies	0.000
Profit After Tax	62.000
Extra Ordinary Items	(19.800)
Prior Period Expenses	0.000
Other Adjustments	0.000
Net Profit	42.200

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	2.58	1.06	(1.69)
Net Profit Margin (PBT/Sales)	(%)	3.56	1.39	(2.67)
Return on Total Assets (PBT/Total Assets}	(%)	2.89	1.13	(2.09)
Return on Investment (ROI) (PBT/Networth)		0.18	0.05	(0.09)
Debt Equity Ratio (Total Liability/Networth)		6.099	3.90	0.64
Current Ratio (Current Asset/Current Liability)		6.28	9.36	11.50

LOCAL AGENCY FURTHER INFORMATION

Financial Overview

The year has been quite promising and challenging for the Company. With an Overall Turnover growth of 17.3% vis-a-vis last year’s performance. The Company’s EBIDTA margin (Earnings before Interest, Depreciation, Tax and Amortization) has been 12.1% of the turnover in FY’11 compared to 14.98% in the previous year.

Operations

For the year, the Company has shown positive growth in the Domestic market, while the growth dipped a little in the Export markets vis-a-vis last year’s results. As shown below, the Domestic Sales grew by 48.42%, amounting to Rs.5123.000 Millions as against Rs.3452.000 Millions in the previous year while the Export Sales came down by 7.88%, amounting to Rs.3939.000 Millions as against Rs.4276.000 Millions in the previous year.

The contribution made by the Basmati Rice to the Company’s business was Rs.7557.000 Millions as against Rs.6513.000 Millions in the previous year, while the Food business contributed only Rs.425.000 Millions as against Rs.450.000 Millions in the previous year.

This year, the major contributors towards the Company’s growth were:

1. Company’s focus on Kohinoor Platinum, Gold and Silver –

Kohinoor Platinum, Gold and Silver (PGS) has been one of the strongest moves that the Company took in the last few years. During this year, the Company focused on Kohinoor PGS in all possible areas in both, the Domestic and the Export market, especially in those areas like Saudi Arabia, Kuwait, United Kingdom, USA in the Export markets and Tamil Nadu, Andhra Pradesh, West Bengal, Kamataka, Gujarat, Maharashtra and Kerala in the Domestic market. Not only did this generate significant numbers for the Company, but it also built a strong equity for the Company’s brand in all the markets.

2. Deeper and Broader Penetrations of Kohinoor products –

With focus on Kohinoor PGS, the Company this year also invested its efforts in increasing the level of penetrations in both Domestic and the Export markets.

Some new private label clients were added to the list - from countries like UAE, Saudi Arabia, USA, Kuwait, Canada, New Zealand, Jordan, Seychelles and Germany. Similarly, in the Domestic market, the availability of Kohinoor products have increased in areas like Tamil Nadu, Andhra Pradesh, Kerala, West Bengal, etc.

3. Introduction of Kohinoor Limited Edition in the market –

Limited Edition was a new introduction that happened this year. Though this was introduced in the later part of the year, but with its presence, it has already started adding onto the equity that Kohinoor enjoys in all the markets worldwide.

4. Acceptance of Heat and Eat products –

Though this is more valid for the Domestic market, but the new healthy range of India on Platter (lOP) enjoyed a good acceptance in lot of markets where Kohinoor is present as a brand. The range gained good numbers, especially in the Domestic market.

5. Stronger New Avenues –

Some of the new avenues that were opened last year, did get the Company good numbers in terms of sales. Supplying Kohinoor range of products to Defence and CSD Canteens brought in concrete numbers this year to the Domestic market’s Food business.

Factors that pulled down the Company’s growth in export were:

Unrest in the Middle East Countries –

The factor that changed the future of some of the countries also affected their business. On a broader perspective, the unrest in the Middle East made enough buyers a little skeptical about the businesses that they have been doing in their countries all this while. It did not stop their growth, but it did pull the growth down by few percentages. In an ideal scenario, had it not been this unrest, the Company would have recorded good numbers this year.

Stiff competition from Pakistani Basmati Rice –

Though a common phenomena, but this year, Pakistani Basmati Rice was being offered at a very competitive rates in almost all the countries. It usually doesn’t affect the sales of Indian Basmati Rice, but when the rates end up being very competitive, buyers do tend to fall for the Pakistani version of the Basmati Rice.

Skepticism for Iran –

Though a high potential country, especially for Basmati Rice, but because of uncertainty on payments, this year, the Company did not gain a lot from this part of the world. In spite of this uncertainty, the Company is still trying its level best to explore this highly potential market.

EXPORT MARKETS

Exports - Basmati Rice

This year, in the Export of Basmati Rice, the Company did business of around Rs.3185.000 Millions as against Rs.3363.000 Millions in the previous year. Though the Company did business in more than 45 countries this year, but recorded a downfall of 5.29% in comparison to last year’s business. Some of the countries that recorded positive growth in both Branded and Private Label business were UAE, UK, Saudi Arabia, USA, Kuwait, Bahrain, Australia, Canada, etc.

Exports - Food

This year, the export of food products of Kohinoor recorded a business of Rs.350 Millions only as against Rs.422 Millions in the previous year. The downfall was majorly because of inconsistent orders from some of the Company’s Private Label clients. However, this downfall has been balanced this year with two of the very big private label clients that the Company has added in its list. Hopefully, the current year would score good numbers by the end of the year.

DOMESTIC MARKETS

Domestic Market - Basmati Rice

In the Domestic market, the Company recorded a strong growth of 40.90% with a value of Rs.4273 millions in this financial year as against Rs.3033.000 Millions in the previous year, vis-a-vis last year’s results that Company did fairly well in the Domestic market. Not only did it established its lead brands Kohinoor Platinum, Gold and Silver in the Indian market, but it also gained good numbers from it. Major factors contributing to this growth were - Focus on Kohinoor Platinum, Gold and Silver, In-depth penetrations in the potential markets, Increase in market coverage, Focus in Potential markets, Growth in the business through Modern Trade, Consequential contribution from the business through Institutions, etc.

Domestic Market - Food

In the Domestic market, the Company did fairly well in the Food business. The Company achieved a growth of 164.29% over the previous year’s figure with Rs.74.000 Millions during this year as against Rs.28.000 Millions in the previous. The major contributor towards this growth has been the supplies of Heat and Eat products to the Defence and CSD Canteens and the business generated through products under Kohinoor India on Platter range.

USA Operations

The United States of America is a huge potential market for Indian food products. Not only the ethnic consumers, but even the mainstream consumers have a taste for Indian cuisines.

To capture this demand of Indian food in the USA, the Company has its wholly owned subsidiary based in New Jersey, Kohinoor Foods USA, Inc. that caters to the US and the Canada market. Through this subsidiary the Company has demonstrated its presence in both the Ethnic and the Mainstream segment of the business. Presently the Company has been supplying to all the Stand Alone Ethnic stores and to mainstream stores like Whole Foods, Costco, Walmart, etc. The subsidiary also works towards the gaining Pvt. Label business for both Indian Rice and Food products available in big chains.

UK Operations

Indian food is hugely popular in the United Kingdom and enjoys strong mainstream acceptance. With the help of Company’s wholly owned subsidiary, lndo European Food Limited, based in London, the Company has been supplying Kohinoor products to Multiple Retail Stores like Tesco, ASDA, Morrison, etc., Wholesale and Cash and Carry like Booker, Costco, TRS, Wani’s, etc., Discounters like TJ Morris, Lidi, etc. and more than 3000 Independent Ethnic Stores nationwide. The subsidiary also owns a rice processing facility at the port city of Felixstowe. The subsidiary also caters to the neighboring European countries.

In the last few years, this subsidiary of Company has achieved new heights and has played a very active role in shaking the competition in this market. In times to come, this position is only going to get better.

Dubai Operations

Rich Rice Raisers Factory LLC (RRR) was established as a joint venture Company in the financial year 2001 in Dubai to augment its marketing strengths in the middle-east region. RRR has a small rice processing facility in Dubai besides a full-fledged marketing office. RRR presently supplies Kohinoor range of basmati rice and other food products in mainstream stores like Carrefour, Lulu’s Chain and Geant Stores. Kohinoor Foods also caters to the Iranian market from its Dubai base.

Overview- Food Processing Industry

The Indian market offers a huge potential for the food processing industry - more so because of the fact that it promotes two main growing factors of their Indian Economy - Industry and Agriculture.

During the last one decade, India moved from a position of scarcity to surplus in Food. Given the trade in production of food commodities, the Food Processing Industry in India is on an assured track of growth and profitability. It is expected to attract phenomenal investment in capital, human, technological and financial areas. The total food production of India is estimated to double in the next ten years. A reason why the Food Processing Industry sector in India has been accorded high priority by the Government of India, with a number of fiscal relief and incentives, to encourage commercialization and value addition. As per a study conducted by McKinsey and Confederation of Indian Industry (CII), the turnover of the total food market is approximately Rs.2500000.000 Millions, out of which value-added food products comprise Rs.800000.000 Millions.

Basmati Rice

Like any other commodity business, Basmati Rice is a category which is little complex and widely unorganized. With an estimated consumption of around 1.5 millions tonnes of Basmati Rice in India, this is one category which has grown by almost 8 times in the last 5 years. And this is expected to grow further in India with an estimated consumption of almost 60% of the total Basmati Rice production in times to come.

Though majorly unorganized, but year on year this category is experiencing good number of conversions from unbranded to branded packaged Basmati Rice in terms of consumptions in India. In the current state, almost 24% of the consumption in India is through branded products. More and more people every year have been opting for not buying the loose packs available in the market. Among the branded packaged ones, to a consumer, a good quality Basmati Rice is available at around Rs. 120-150 for a kilo. Eating rice is common habit in most of the Indian households and it is usually a part of one of the 3 meals cooked everyday. Geographically, the consumption of Basmati is higher in the Northern and Western part of the country while culturally, its consumption is quite high in the Punjabi and Gujarati families. With the view of serving the best to their customers and employees, Basmati’s consumption is also higher in well recognized hotels and large institutions. The consumption of branded packaged Basmati Rice is also being driven by the modern retail that allows every consumer to select what they want.

Ambient- Ready Meals

With an estimated value of around Rs.1400 millions, Ready Meals, is a category which is growing at an average value of around 15% every year. Largely this category is still at a growing stage, but the factors that has so far contributed to sales of Ready Meals have been Growing consumer base of working people who have less time to spend on cooking, Eating out of home becoming a common phenomena every week and weekend, Growth of Modem trade, the Convenience of making exotic Vegetarian and Non-vegetarian dishes in just a few minutes, etc. As this category grows, Innovative value additions to products with Health and Nutrition is expected to become an important aspect of it.

Contingent Liabilites :

(Rs. In Millions)

Contingent liabilities	31.03.2011	31.03.2010
Claims against the company, not acknowledged as debt
Sales tax	12.200	12.200
Excise duty	4.291	4.291
TDS/ TCS*	0.474	0.000
Service tax	0.000	1.114
HRDF demand of Market Committee**	3.969	0.000
Corporate Guarantee given by the Company***	833.430	812.160
Surety bonds issued to government agencies	179.959	127.427
Duty foregone against capital goods imported and procured from the domestic market for export oriented unit	45.561	44.413
Customs Duty saved against advance Licenses	3.282	14.313
Total	1083.166	1015.917

*Nature of contingent liability regarding Taxation matters

(Rs. In Millions)

Particulars	Forum where matter is pending	Amount
Sales Tax	Commissioner of Sales Tax	12.200
Excise Duty	CESTAT	4.291
TDS/TCS	CIT Appeals (TDS/TCS ward)	0.474

** The assessing authority of notified Market Area committee under APMC Act has imposed a penalty of Rs.5.292 Millions during the year. The company has deposited Rs.1.323 Millions under protest and has filed SLP against this order in the supreme court.

***Corporate guarantees are given by the company for subsidiaries as follows :

(Rs. In Millions)

Name of Beneficiary	Guarantee issued to	Amount
Indo European Foods Limited	Punjab National Bank, U. K.	431.580
Kohinoor Foods USAINC	Punjab National Bank, Hong Kong	401.850

Fixed Assets:

· Land

· Factory building

· Office building

· Plant and Machinery

· Office Equipment

· Vehicles

· Vehicles – solar

· Wooden, plastic creates and tarpaulins

· Computers

· Other Machinery

· Furniture and Fixture

BUSINESS DESCRIPTION

Subject is a global food company. The Company is engaged in the manufacturing, trading and marketing of the food products. The products manufactured by the Company include rice, pulses, wheat flour, spices, frozen and ready to eat products. The Company has launched a range of products in the frozen foods category including frozen curries, frozen biryanis and pulses, frozen snacks and breads. The Company has also done a range of frozen desserts, such as kheer and phirni. The wholly owned subsidiaries of the Company are Sachdeva Brothers Limited, Kohinoor Foods USA Inc. and Indo European Foods Limited. The Company has entered into a joint venture with Rich Rice Raisers Factory LLC. For the fiscal year ended 31 March 2010, The Company revenues increased 15% to Rs8.54B. Net loss decrease 59% to Rs70.2M. Revenues reflect increased income from operations and higher other income. Lower loss reflects a decrease in depreciation, lower administrative expenses, a fall in legal and professional charges, decreased vehicle maintenance cost, a decrease in foreign exchange gain and lower rent expenses.

BOARD OF DIRECTORS

Mr. Jugal Kishore Arora (Executive Chairman of the Board)

Mr. Jugal Kishore Arora is Executive Chairman of the Board. He is associated with the Organisation since its inception. He has been looking after and is in-charge of Production. His experience of more than three decades in the rice industry, together with a sharp eye for detail, have reaped dividends. In fact, they have been largely responsible for the wide acceptance that he company’s Basmati Brands enjoy all over the World today.

Mr. Anil Bhatia (Non-Executive Independent Director)

Mr. Anil Bhatia is Non-Executive Independent Director. He is a post graduate in English Literature with over 36 years experience in the Construction industry.

Mr. Vijay Burman (Non-Executive Independent Director)

Mr. Vijay Burman is Non-Executive Independent Director. He is a Science Graduate with over 40 years experience in Textile Industry.

Mr. Gurnam Arora (Joint Managing Director, Whole Time Director)

Mr. Gurnam Arora is Joint Managing Director, Whole Time Director

. He has over thirty three years of experience in rice industry. Mr. Gurnam Arora has been looking after Domestic Marketing, Purchase, Administration, Quality Control and Corporate Affairs of the Company. Mr. Gurnam Arora’s broad vision helped the company increase in domestic share. The Sales in domestic market have increased manifolds.

Mr. Satnam Arora (Joint Managing Director, Whole Time Director)

Mr. Satnam Arora is Joint Managing Director, Whole Time Director. He has experience in marketing the rice in overseas market. Mr. SatnamArora has been looking after Export Marketing and Finance.

Significant Developments

McCormick and Company, Inc. announced that it has signed an agreement to form a joint venture with Kohinoor Foods Limited (KFL) to market and sell its basmati rice and food products in India. The completion of the agreement is expected to occur later in 2011 subject to regulatory and other approvals in India. Kohinoor Foods Limited manufactures and distributes naturally flavored rice as well as other convenience food products in India through a 350,000 retailer network. McCormick has agreed to form a joint venture with KFL to be named Kohinoor Speciality Foods India Private Limited. The new joint venture will market and sell Kohinoor brand rice and food products in India. A modern factory for packaged food products and 275 employees will also transfer to the joint venture. McCormick will invest a total of $115 million for this transaction which will include McCormick holding an 85% interest in the new joint venture, the transfer of certain trademarks and non-compete undertakings from KFL and the Arora family entities. The new joint venture will enter into an exclusive agreement with KFL to source, process and package branded basmati rice through KFL's existing facility.

PRESS RELEASES

US food major McCormick and Kohinoor Foods join hands for Indian market

New Delhi, Nov. 8 -- US food giant McCormick today announced its joint venture with Kohinoor Speciality Foods for evolving the Indian partner into a rice to food major and bring to India passion of flavour in cooking ingredients and convenience food categories. Announcing the 85:15 partnership, McCormick Chairman, President and CEO Alan Wilson said, Our mission is not only to grow Kohinoor s basmati rice business but also to expand it further in a big way through other food categories that deliver flavour like cooking ingredients and convenience food. The 3.3 billion dollar food major has invested 150 million dollar in India along with its Power of People philosophy through its over 100 year association with India, he said, adding the businesses in India are expected to be important contributors for the future success. India is a top priority market for McCormick and is in line with our emerging market growth strategy. We foresee India to be a significant business for McCormick in 10 years and are committed to invest in this fast growing market, said Mr Wilson, while adding that McCormick expects sales revenue of about 85 million dollars in its first year of operation. Informing that the Indian packaged food industry was estimated about ten billion dollar and growing along with people s rising disposable income, Mr Wilson said this itself made the joint venture an attractive proposition for participation by McCormick. We aim to make McCormick a leading player in the Indian food industry by enabling cooks to prepare better tasting food helped by McCormick s Passion for Flavour, he added. Managing Director of the joint venture Satish Rao said the strategic holding of hands will see convenient food reach the consumer at affordable prices while strengthening the Kohinoor s logo to a total food brand, adding It will help Kohinoor grow from rice to a food brand, while bringing tasty, innovative food solutions for the discerning Indian . Commenting on the new venture he said, This is an exciting strategic initiative and enables McCormick to expand its flavour business into India. Key growth drivers for this business are distribution expansion, product innovation and brand building investment. On the future steps the joint venture would take turnovers to newer heights, Mr Rao said launching McCormick s sauces and pastes and convenient foods like ready-to-eat, ready-to-cook and frozen foods in India would be the partnership s next level. McCormick is also evaluating the launch of products from its global portfolio of flavour brands into India. Market research in this area is underway. McCormick plans to bring in the latest food technologies and global best practices to serve Indian consumers through their favourite Kohinoor brands, he said. Mr Rao said McCormick expects to retain and grow all the current assets of Kohinoor foods in India and distribute Kohinoor products through its exclusive agreement with Kohinoor Foods Limited to source and manufacture Basmati rice through their existing facilities.

Kohinoor Foods targets 43 pc more basmati rice export in FY'12

New Delhi, November 08, 2011 (PTI) -- Rice company Kohinoor Foods today said it expects to export one lakh tonnes of basmati rice in this fiscal, which is 43 per cent more than previous year.

"We expect to ship one lakh tonnes of basmati rice in this fiscal as well as sell another one lakh tonnes in the country," Kohinoor Foods Joint Managing Director Gurnam Arora told reporters here. The company had exported about 70,000 tonnes of basmati rice in last fiscal, he added. While Kohinoor Foods will be responsible for the exports of basmati rice, the sales in the domestic market would be handled by Kohinoor Speciality Foods India -- a joint venture between US spice maker McCormick and Company and Kohinoor Foods. Arora noted that exports volume would grow because of fall in prices of basmati rice in the domestic market by about 15-20 per cent. In September, Kohinoor Foods had announced completion of the Rs.5200.000 Millions deal with US based spice maker McCormick to set up a JV firm 'Kohinoor Speciality Foods' for marketing basmati rice and other food products in India. McCormick has 85 per cent stake in the JV.

India exported 2.2 million tonnes of basmati rice to more than 100 countries in the 2010-11 fiscal against a shipment of 2.02 million tonnes overseas in the 2009-10 financial year.

McCormick raising prices in face of higher costs

Sept. 29--McCormick and Company plans to raise prices in response to continuing increases in the costs of raw materials and packaging, company officials said Wednesday.

Still, the performance of the Sparks spicemaker has been on target, said Alan D. Wilson, its chairman and chief executive.

"We're navigating through a period of pretty steep cost escalation and continuing to meet objectives," he said.

Net profits in the quarter that ended August 31 fell 10 percent to $92 million, or 69 cents per share, the company reported, compared with $102.4 million, or 76 cents per share, during the same period last year.

Joyce Brooks, McCormick's vice president of investor relations, said the 2010 earnings reflected a one-time, favorable tax reversal of $14 million.

Sales grew 11 percent in the third quarter, better than the 5 percent recorded in the first half of the year, even though prices rose by 5 percent on average.

The company increased its investment in brand marketing support by 27 percent.

The company expects to cut $50 million in costs this year, up from earlier estimates of $45 million.

Agricultural commodity cost increases are expected to continue through 2012, Wilson said. As a result, McCormick raised prices for its products in the first quarter and plans to do so again in the fourth.

They will be the first fourth-quarter price increase in more than a decade, Wilson said. He said increases will be low on products such as extracts but could reach double-digit percentages on spices such as black pepper.

An estimated $10 million of the increased sales reported in the third quarter reflected advance purchases in anticipation of the fourth-quarter price rises, he said.

McCormick acquired Ohio-based Kitchen Basics, a brand of shelf-stable liquid stock, for $38 million in July. The company concluded its acquisitions of Kamis SA, a Polish manufacturer of spices and seasonings, and a joint venture with Kohinoor Foods Limited, an Indian maker of basmati rice, in September.

McCormick also has expanded the range of products being sold at warehouse stores nationally, Wilson said. The company had had a full distribution line in warehouse clubs in the Mid-Atlantic region for several years, he said, and is adding baking items such as gravy mixes and flavor extracts.

INDIA'S KOHINOOR FOODS FORMS JV WITH US SPICE MAKER MCCORMICK

NEW DELHI, Sept 15 Asia Pulse - Indian rice exporter Kohinoor Foods (BSE:5121559) said it has completed the Rs.5200.000 Millions (US$109 million) deal with US-based spice maker McCormick to set up a joint venture for marketing basmati rice and other food products in India.

In the joint venture Kohinoor Speciality India, McCormick has 85 per cent stake and rest is with Kohinoor Foods.

"McCormick today completed the formation of joint venture with Kohinoor Foods to market and sell basmati rice and food product in India. The venture was announced in June 2011 and will now be named as Kohinoor Specialty Foods India Private Limited," McCormick said in a statement Wednesday.

"McCormick had invested a total of Rs. 5200.000 Millions (US$113 million) in the deal and thus commands an 85 per cent interest in Kohinoor Specialty Foods India," it added.

McCormick expects the joint venture sales to be about US$85 million in the first year. Satish Rao, who has been associated with McCormick for the past 16 years, will act as the Managing Director of the JV.

The joint venture will have about 275 employees and a modern production facility at Bahalgarh in Haryana, which has been transferred from Kohinoor Foods into the JV.

With more than US$3 billion in annual sales, McCormick manufactures, market and distributes spices, seasoning mixes, condiments and other flavorful products to the entire food industry.

Through this JV, McCormick plans to develop and launch new products, penetrate potential and under-served markets and thereby expand in the food service channel in India.

"The joint venture is a part of McCormick's strategic business plan to expand sales in emerging markets. Including India, McCormick expects emerging markets to contribute about 12 per cent of total sales by 2015," the statement said.

This is the McCormick's third investment in India. It first joined with AV Thomas Group in 1994. In 2010, McCormick acquired a 26 per cent stake in Eastern Condiments Ltd, which has become a leading brand of spices, seasonings and other related food products in India and the Middle East.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.50.56
UK Pound	1	Rs.80.30
Euro	1	Rs.68.79

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		48

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.