46th Annual Report 2011-2012 - Bombay Stock Exchange€¦ · Company’s Registrar M/s.Integrated...

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46th Annual Report 2011-2012

BOARD OF DIRECTORS

Mr. K.L. RAMACHANDRA CHAIRMAN

Mr. K.L. SRIHARI VICE CHAIRMAN &MANAGING DIRECTOR

Mr. K.L.A. PADMANABHASA JOINT MANAGING DIRECTOR

Mr. K.L. SWAMY EXECUTIVE DIRECTOR

Mr. K.R. NITHYANAND DIRECTOR

Mr. K.H. GURUNATH DIRECTOR

Mr. K.S. GIRIDHAR DIRECTOR

Prof. L.R. VAGALE INDEPENDENT DIRECTOR

Major Gen. (Retd.) M.K. PAUL INDEPENDENT DIRECTOR

Mr. B.K. RATNAKAR RAO INDEPENDENT DIRECTOR

Mr. SUDHAKAR SHETTY INDEPENDENT DIRECTOR

Mr. P.R. ANANDA MURTHY INDEPENDENT DIRECTOR

Mr. D.V. SATHYANARAYANA INDEPENDENT DIRECTOR

Mr. D. PRABHAKARA RAO INDEPENDENT DIRECTOR

Mr. R. VENKAT SUBRAMANYAN COMPANY SECRETARY

M/s. RANGARAJU & ASSOCIATES AUDITORChartered Accountants

Bangalore

CANARA BANK BANKERSPUNJAB NATIONAL BANK

DHANALAKSHMI BANK

‘‘Brewery House’’ REGISTERED OFFICE7th Mile, Kanakapura Road

Bangalore - 560 062

M/s Integrated Enterprises (I) Ltd REGISTRAR & SHARE TRANSFER AGENTS

No:30, “Ramana Residency”4th Cross, Sampige Road,

Malleswaram, Bangalore-560 003Tel : 080- 23460815 -18

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KHODAY INDIA LIMITED

NOTICE

Notice is hereby given that the Forty Sixth Annual General Meeting of the members of Khoday India Limited,will be held on Tuesday the 30th October 2012 at 12.00 Noon at Shravanthi Kalyana Mantapa,Doddakallasandra, Kanakapura Main Road, Bangalore-560 062, to transact the following business:

Ordinary Business:

1) To receive, consider and adopt the audited Balance Sheet as at 31st March 2012, the Statement of Profitand Loss for the year ended on that date and the Reports of the Board of Directors and Auditors thereon.

2) To appoint a Director in place of Mr.Sudhakar Shetty who retires by rotation and being eligible, offershimself for re-appointment.

3) To appoint a Director in place of Mr.K.S.Giridhar who retires by rotation and being eligible, offers himselffor re-appointment.

4) To appoint auditors and fix their remuneration and in this regard to consider and if thought fit, to passwith or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED that M/s Rangaraju & Associates, Chartered Accountants, Bangalore be and are herebyappointed as Auditors of the Company, to hold office from the conclusion of this Annual General Meetinguntil the conclusion of the next Annual General Meeting of the Company on such remuneration as will befixed by the Board of Directors.”

Special Business:

5) To consider, if thought fit to pass with or without modification(s) the following resolution as a SpecialResolution:

“RESOLVED that Mr. Puranic Ramachar Ananda Murthy, appointed as Director in casual vacancy causedby the demise of Mr.D.V.Tikekar, pursuant to Article 30 of the Articles of Association of the Company andwho holds office until this Annual General Meeting in accordance with Section 262 of the Companies Act,1956, be and is hereby appointed as Director of the Company liable to retire by rotation.”

6) To consider, if thought fit to pass with or without modification(s) the following resolution as an OrdinaryResolution:

“RESOLVED that Mr. Khoday Ramachandra Nithyanand, who was appointed as an Additional Directorunder Article 30 of the Articles of Association of the Company and who holds office until this AnnualGeneral Meeting be and is hereby appointed as Director of the Company liable to retire by rotation.”


“RESOLVED that Mr. Gurunath Srihari Khoday, who was appointed as an Additional Director under Article30 of the Articles of Association of the Company and who holds office until this Annual General Meetingbe and is hereby appointed as Director of the Company liable to retire by rotation.”


“RESOLVED that Mr. Dowray Prabhakara Rao, who was appointed as an Additional Director under Article 30of the Articles of Association of the Company and who holds office until this Annual General Meeting be andis hereby appointed as Director of the Company liable to retire by rotation.”

By order of the Boardfor Khoday India Limited

Place: Bangalore (R. Venkat Subramanyan)Date : 22nd September 2012 Company Secretary

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Notes:

A. A member entitled to attend and vote at the Annual General Meeting (the ‘‘Meeting’) is entitled to appointa proxy to attend and vote on a poll instead of himself and a proxy need not be a member of theCompany.

B. A blank Proxy Form and Attendance Slip are enclosed. The instrument appointing the proxy shouldhowever, be deposited at the Registered office of the Company not less than 48 hours before thecommencement of the Meeting. Members/Proxies are requested to bring the attendance slip alongwith their copy annual report to the Meeting.

C. An explanatory statement pursuant to Section 173 (2) of the Companies Act, 1956, relating to theSpecial Business to be transacted at the Meeting is annexed herein.

D. Members who hold shares in dematerialized form are requested to write their Client ID / DP ID Nos.and those who hold shares in Physical Form are requested to write their Folio No. in the Attendanceslip.

E. In accordance with Article 37 (A) of the Articles of Association of the Company, Mr.Sudhakar Shetty andMr.K.S.Giridhar, Directors, retire by rotation at the ensuing Annual General Meeting and being eligibleoffer themselves for re-appointment. Further, It is also proposed to appoint Mr. Puranic RamacharAnanda Murthy, Mr.Khoday Ramachandra Nithyanand, Mr.Gurunath Srihari Khoday and Mr.DowrayPrabhakara Rao, as Directors liable to retire by rotation, pursuant to Section 257 of the Companies Act,1956. The particulars of these Directors as stipulated under Clause 49 of Listing Agreement with theStock Exchanges are provided in the Corporate Governance Report forming part of the Annual Report.The Board of Directors of the Company commend their respective re-appointments / appointments.

F. Members holding shares in electronic form are requested to intimate immediately of any change intheir address to their Depository Participants (DPs) with whom they maintain demat accounts. Membersholding shares in physical form are requested to advise any change of address immediately to theCompany’s Registrar M/s.Integrated Enterprises (India) Limited, 30, “Ramana Residency, 4th Cross,Malleswaram, Bangalore – 560 003.

G. The Securities and Exchange Board of India (SEBI) has mandated the submission of Income TaxPermanent Account Number (PAN) by evey participant in the securities market. Members holdingshares in electronic form are, therefore, requested to submit copy of PAN card to their DP. Membersholding shares in physical form can submit copy of PAN card to M/s Integrated Enterprises (India)Limited.

H. Members holding shares in physical form under more than one folio are advised to have all suchshares consolidated into a single folio by sending a request letter to M/s.Integrated Enterprises (India)Limited, together with the original share certificates in respect of such multiple folios.

I. The Register of Members and Share Transfer Books of the Company will remain closed from Mondaythe 22nd October 2012 to Tuesday the 30th October 2012 (both days inclusive).



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EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956

Item No: 5

Appointment of Mr. Puranic Ramachar Ananda Murthy:

Mr. Puranic Ramachar Ananda Murthy who was appointed as Director in the casual vacancy causedby the demise of Mr.D.V.Tikekar, at the meeting of the Board of Directors of the Company held on 23rd

September 2011, pursuant to Article 30 of the Articles of Association of the Company, holds office onlyup to the ensuing Annual General Meeting under Section 262 of the Companies Act, 1956. Mr. AnandaMurthy has expressed his willingness to continue in office and the Company has also received anotice under Section 257 of the Companies Act, 1956, from a member of the Company along with adeposit of Rs.500/- proposing the candidature of Mr. Ananda Murthy for the office of Director. Thedetailed profile of Mr.Ananda Murthy is given in the Corporate Governance Report.

Your Board recommends the adoption of resolution for the appointment of Mr. Puranic RamacharAnanda Murthy .

None of the Directors except Mr. Puranic Ramachar Ananda Murthy is directly or indirectly concernedor interested in the resolution concerning his appointment.

Item Nos: 6, 7 & 8:

Mr.Khoday Ramachandra Nithyanand, Mr.Gurunath Srihari Khoday and Mr.Dowray Prabhakara Rao,who were appointed as Additional Directors at the meeting of the Board of Directors of the Companyheld on 15th May 2012, pursuant to Article 30 of the Articles of Association of the Company, hold officeonly up to the ensuing Annual General Meeting under Section 260 of the Companies Act, 1956.Mr.Nithyanand, Mr.Gurunath & Mr.Prabhakara Rao have expressed their willingness to continue inoffice and the Company has also received three separate notices under Section 257 of the CompaniesAct, 1956, from the members of the Company along with a deposit of Rs.500/- each proposing thecandidature of Mr.Nithyanand, Mr.Gurunath & Mr.Prabhakara Rao respectively for the office of Director.The detailed profile of each of the above persons are given in the Corporate Governance Report.

Your Board recommends the adoption of resolutions for the appointments of Mr. Khoday RamachandraNithyanand, Mr.Gurunath Srihari Khoday and Mr.Dowray Prabhakara Rao.

None of the Directors excepting the appointee directors viz., Mr. Nithyanand, Mr. Gurunath &Mr. Prabhakara Rao, and the Promoter directors Mr.K.L. Ramachandra, Mr. K.L. Srihari, Mr. K.L.A.Padmanabhasa, K.L. Swamy, K.S. Giridhar and are directly or indirectly concerned or interested inthe resolutions.



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REPORT OF THE DIRECTORS TO THE SHAREHOLDERSYour Directors present the 46th Annual Report on the working of your Company and the Audited Statement ofAccounts for the year ended 31st March 2012:

FINANCIAL HIGHLIGHTS (Standalone) : (Rs. in Lakhs)Particulars 2011-2012 2010-2011

1. Revenue from operations 16477.40 13743.10

Other Income 176.17 331.16

2. Total Revenue 16653.57 14074.26

3. Profit /(Loss) before Tax 1926.26 (1292.42)

4. Provision for Taxation

Current Tax 343.00 -

5. Profit/(Loss)after Tax 1583.26 (1292.42)LESS: Income Tax for the earlier years 0.48 37.00LESS: Prior year adjustments 2.50 3.50

6. Net Profit/(Loss)for the year 1580.28 (1332.92)

7. AppropriationDividend – –Dividend Tax – –

8. Balance carried forward 1580.28 (1332.92)

9. EPS – Basic & Diluted 4.20 (3.55)

REVIEW OF PERFORMANCE:

Your Directors note with satisfaction that the Company’s net revenue has registered an increase ofabout Rs.25.79 Crores over the previous year.

Your Directors are pleased to announce that the Company has successfully made a turn around andregistered a net profit of Rs.15.80 Crores for the year.

Your Directors hope that the Company will continue to improve its performance and maximize shareholdervalue.

DIVIDEND:

Though the Company has earned an after tax profit of Rs.15.80 Crores, in view of the scarce availabilityas well as the increasing cost of funds in the current scenario and the consequent need to improvecash position of the Company, the Management has decided to plough back the entire profit earnedfor improving business operations and shareholder value. Hence your Directors do not propose anydividend for the year.

DIRECTORS:

i) In accordance with Article 37(A) of the Articles of Association of the Company, Mr. SudhakarShetty and Mr. K.S. Giridhar, Directors retire by rotation and being eligible have offered to bere-appointed.

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ii) Mr. Puranic Ramachar Ananda Murthy who was appointed as Director in the casual vacancycaused by the demise of Mr.D.V.Tikekar, at the meeting of the Board of Directors of the Companyheld on 23rd September 2011, pursuant to Article 30 of the Articles of Association of the Company,holds office only up to the ensuing Annual General Meeting under Section 262 of the CompaniesAct, 1956. Mr. Ananda Murthy has expressed his willingness to continue in office and theCompany has since received a notice under Section 257 of the Companies Act, 1956, from amember proposing the candidature of Mr.Ananda Murthy for the office of Director.

iii) Mr.Khoday Ramachandra Nithyanand, Mr.Gurunath Srihari Khoday and Mr.Dowray PrabhakaraRao were appointed as Additional Directors by the Board of Directors at its meeting held on 15th

May 2012, pursuant to Article 30 of the Articles of Association of the Company. The said threeAdditional Directors hold office only up to the ensuing Annual General Meeting under Section260 of the Companies Act, 1956, and they have expressed their willingness to continue in office.The Company has since received three separate notices under Section 257 of the CompaniesAct, 1956, from the members proposing the candidature of Mr.Khoday Ramachandra Nithyanand,Mr.Gurunath Srihari Khoday and Mr.Dowray Prabhakara Rao for the office of Director.

AUDITORS :

M/s Rangaraju & Associates, Chartered Accountants, retire at the ensuing Annual General Meetingand are eligible for re-appointment.

The Company has received a letter from them to the effect that their reappointment, if made, would bewithin the prescribed limits u/s 224(1B) of the Companies Act 1956, and that they are not disqualifiedfor such reappointment within the meaning of Section 226 ibid.

REMARKS OF AUDITORS :

Delay in payment of statutory dues and default in timely repayment of principal and interest dues tobanks.

COMMENTS ON REMARKS OF AUDITORS :

The delay in remittances towards Professional Tax, Employees State Insurance & Provident Fund andthe default in timely repayment of principal and interest dues to bank, occurred due to unavoidablecircumstances.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGSAND OUTGO, IF ANY:

The information required to be furnished Under Section 217(1)(e) of the Companies Act, 1956, is atAnnexure ‘A’.

PARTICULARS OF EMPLOYEES UNDER THE COMPANIES (PARTICULARS OF EMPLOYEES)RULES, 1975, AS AMENDED:

No employee of the Company was in receipt of remuneration exceeding Rs.5 Lakhs per month orRs.60 Lakhs per annum, during the financial year.

INDUSTRIAL RELATIONS:

Industrial Relations were cordial throughout the year under review. Your Directors appreciate thededicated services and co-operation of employees at all levels.

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CORPORATE GOVERNANCE:

A separate section on Corporate Governance is included in the Annual Report. The Company hascomplied with the requirements of Corporate Governance as stipulated in clause 49 of the ListingAgreement. The Certificate obtained from the Company’s Auditors on compliance with CorporateGovernance requirements is annexed thereto.

Exemption from attaching the balance sheet of Company’s wholly owned subsidiary M/s. KhodayProperties Private Limited.

The Company has availed exemption from attaching to its own balance sheet, the balance sheet ofCompany’s wholly owned subsidiary M/s. Khoday Properties Private Limited pursuant to GeneralCircular 02/2011 dated 08th February 2011 issued by the Ministry of Corporate Affairs under Section212 of the Companies Act, 1956. In compliance therewith, your directors undertake to provide suchinformation as may be sought by the Company’s shareholders about the accounts of Khoday PropertiesPrivate Limited for the financial year 2011-12 .Copies of the audited balance sheet of Khoday PropertiesPrivate Limited as at 31st March 2012 and statement of profit and loss for the year ended on that datehave been kept for inspection by the Company’s shareholders, both at the Registered Office of theCompany and that of Khoday Properties Private Limited.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Your Directors further report that:-

i. in the preparation of the annual accounts, the applicable accounting standards have been followedand that there were no material departures;

ii. the accounting policies selected by them were applied consistently, judgments and estimatesthat are reasonable and prudent have been made so as to give a true and fair view of the state ofaffairs of the Company as at 31st March 2012 and of the profit of the Company for the periodended 31st March 2012;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting recordsin accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENTS:

Your Directors thank the customers, vendors, investors, bankers, financial institutions, Central andState Governments for their continued support and co-operation extended to the Company.

for and on behalf of the Board of Directorsfor KHODAY INDIA LIMITED

Date : 22nd September 2012 K.L. RAMACHANDRAPlace: Bangalore CHAIRMAN

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Annexure ‘‘A’’ to Directors’ Report Information pursuant to Section 217(1)(e) of the Companies Act, 1956

FORM – A (See Rule 2)

1. Conservation of Energy :-

� Optimum plant load factor was ensured during the manufacturing cycle resulting in considerablesavings in energy costs.

� Fans, lights and other electrical devices were switched off when not in use thereby achievingenergy saving to a considerable extent. Regular lighting is increasingly being switched to CFLs.

� Replacement of capacitors resulted in better power factor and the resultant savings in powercosts.

� The other disclosures of particulars in Form ‘A’ are not applicable, as the production is company’sglass manufacturing unit ceased w.e.f. 01-07-2010.

FORM – B (See Rule 2)

2. RESEARCH AND DEVELOPMENT EFFORTS :

No Research and Development activities were undertaken by the Company during the year.

3. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION :

The Company did not introduce any new technology in its manufacturing process during the year.

4. Foreign Exchange Earnings & Out Go [in Rs. 000s]

PARTICULARS 31-03-2012 31-03-2011

A. FOREIGN EXCHANGE OUT GO 9321 11192

B. FOREIGN EXCHANGE EARNINGS 6436 5303

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ANNEXURE TO DIRECTORS’ REPORT

MANAGEMENT DISCUSSION AND ANALYSIS

Industry structure and developments: The alcoholic beverages Industry in India is made up of Indian MadeForeign Liquor (IMFL), Beer, Wine, Country Liquor and imported alcoholic beverages. The IMFL segment ofthe Industry recorded a growth of about 8.5% during the year and your Company’s aggregate volume ofsales recorded a growth of about 6.5 %. However, the premium brands of IMFL such as “Peterscot”, “RedKnight Select” and “Red Knight Reserve” brands of whisky carved out a market share of about 7.5 %. Theproduct distribution in most states is managed through the respective State Beverages Corporation.

Opportunities and threats: The projected GDP growth of 5.5% to 6% for 2012-13, though modest, presentsan opportunity for increased consumer spends on alcoholic beverages. However, the continuing increase intaxes which constitute nearly 2/3rds of shelf price of the premium brands, the absence of uniform rates oftaxes and the diverse policies of the state governments on marketing and the restriction on advertising inboth the print and electronic media are the major dampeners for higher rates of growth. The consistentreduction in custom duties on imported spirits resulting in easy availability of multinational brands constitutesanother challenge for the Company.

Segment wise/ product wise performance:

The revenue for the Company was generated through business operations in the product segments ofLiquor, Glass, Contract, Systems and “Others” comprising miscellaneous activities. The Liquor segmentgenerated a revenue of Rs. 296.22 crores but posted a loss of Rs.10.98 crores. The Glass segmentgenerated a revenue of 1.11 crores but posted a loss of Rs. 62.43 lakhs. The Contract segment registereda revenue of Rs. 40.69 crores and a profit of Rs. 39.94 crores. The Systems segment generated a revenueof Rs. 4.41 crores and but posted a loss of Rs. 2.50 crores. The “Others” segment registered a revenue ofRs. 4.46 crores and a profit of Rs. 76.61 lakhs.

Outlook: The IMFL segment of the industry in particular is expected to register a growth of about 13% andyour Company has plans to improve sales volumes during 2012-13 by around 12%.

Business risks and mitigatory efforts: The business risks for the Company could be broadly classified asfollows:

(i) Raw material procurement :– The risk of non-availability of extra neutral alcohol in adequate quantitiesis managed through forward contracts for uninterrupted supplies.

(ii) Timely and adequate availability of working capital:- The Company faces the twin risk of timelyavailability of funds in adequate measure as also the steep interest rates charged by the banks, whichare managed through a close monitoring of the working capital needs and timely borrowing throughhard negotiations with the lenders by the top management on a regular basis.

(iii) Product prices and competition :- The Company operates in a highly competitive business environmentcharacterized by availability of various products both domestically produced and imported, at differentprice points. The risk from competitive product pricing is managed through adherence to high qualitystandards and product differentiation.

(iv) Regulatory issues :- The high incidence of taxes and the absence of the uniform regulatory regime fortaxation and distribution through out the country, impedes the Company’s efforts to improve its salesvolumes. These issues are regularly being taken up with the Government through the industryAssociations of which the Company is an active Member.

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Internal Control System : The Company follows a system of internal controls to ensure effectivenessand efficiency of operations, safeguard of assets, the reliability of financial reporting and compliance withapplicable laws and regulations.

Financial performance vis-à-vis Operational performance :

Despite the challenging environment, the Company’s net income has registered an increase of aboutRs.25.79 Crores over the previous year and also made a successful turnaround by registering a net profit ofRs.15.80 Crores for the year.

The satisfactory performance has contributed to an increase in net worth which stands at Rs. 75.06 Crores.

Material development in human resources / industrial relations front: The Company’s efforts are directedat improving employee output across all levels through operational efficiency and higher levels of motivation.The industrial relations in all the units of the company remained cordial throughout the year.

Cautionary statement: Statements in the Management Discussion and Analysis prescribing the Company’sobjectives, projections, estimates, expectations may be “forward-looking statements” within the meaning ofapplicable security laws and regulations. Actual results could differ materially from those expressed orimplied. Important factors that could make a difference to the Company’s operations include, among others,economic conditions affecting demand/supply and price conditions in the markets in which the Companyoperates, changes in the Government Regulations, Tax Laws and other statues and incidental factors.

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CORPORATE GOVERNANCE REPORT

1. COMPANY’S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE:The Company believes that good governance is essential to achieve long term Corporate goals and enhanceshareholders’ value and accordingly has established transparency of procedures and reporting systemsfor dealing, dissemination of information with due disclosures, strict adherence to statutory and regulatoryprescription and increasing accountability to its shareholders, bankers and customers. All matters of strategy,significant developments etc. are routinely placed before the Board. The 2 committees of the Board viz., AuditCommittee and Share Transfer & Investors’ Grievances Committee meet regularly to transact business inrespect of all matters entrusted to them. The Company has also constituted a Remuneration Committee forthe purpose of payment of remuneration to Directors.

2. BOARD OF DIRECTORS:The Board of Directors along with its Committees provide leadership and guidance to the Company’smanagement and directs, supervises and controls the performance of the Company.

Composition :The Board presently comprises 14 Directors of whom 3 are Executive Promoter Directors, 4 areNon-executive Promoter Directors and 7 are Independent Non-executive Directors. The Company has aNon-executive Chairman.Both the Executive & Non-executive Directors were not paid any remuneration during the year other thanSitting Fees paid to the Non-Executive Directors for attending the Meetings of the Board and Committeesthereof.The details of attendance of the Directors at the Board Meetings & last Annual General Meeting anddirectorships in other companies are as under:-

Name of Directors Designation Category

No. ofBoard

Meetingsattended

Attendanceat the last

AGMheld on

28-10-2011

No. ofdirectorships

in publiccompaniesother than

Khoday IndiaLimited

No. ofmember

ships heldin

Committeesof the

Board ofKhoday

IndiaLimited

Mr. K.L. Ramachandra Chairman Promoter- 5 Present 8 1-MemberNon-Executive

Mr. K.L.Srihari Vice Promoter- 4 Present 10 1-MemberChairman & ExecutiveManagingDirector

Mr. K.L.A. Padmanabhasa Joint Promoter- 5 Present 9 -Managing ExecutiveDirector

Mr. K.L.Swamy Executive Promoter- 5 Present 8 1-MemberDirector Executive

Prof.L.R.Vagale Director Independent- 3 - - 1-ChairmanNon Executive 1-Member

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Maj. Gen. (Retd.) M.K. Paul Director Independent- 5 Present - 1-ChairmanNon Executive 1-Member

Mr. Khoday Director Promoter- 5 Present 1 1-ChairmanSwamy Giridhar Non Executive

Mr. Bangra Kulur Director Independent- 3 - - -Ratnakar Rao Non Executive

Mr. Sudhakar Shetty Director Independent – 5 Present 1 2- MemberNon Executive

Mr. Damam Vittalsa Director Independent- 3 Present - -Sathyanarayana Non Executive

Mr. Puranic Ramachar Director Independent- 3 Present - -Ananda Murthy Non Executive

Name of Directors Designation Category

No. ofBoard

Meetingsattended

Attendanceat the last

AGMheld on

30-09-2010

No. ofdirectorships

in publiccompaniesother than

Khoday IndiaLimited

No. ofmember

ships heldin

Committeesof the

Board ofKhoday

IndiaLimited

The Board at its meeting held on 15th May 2012, appointed Mr.Khoday Ramachandra Nithyanand, Mr.GurunathSrihari Khoday and Mr.Dowary Prabhakara Rao as Additional Directors.

During the financial year 2011-2012, 5 Board meetings were held viz., on 13-05-2011, 16-8-2011,23-09-2011, 15-11-2011 & 06-02-2012.

Note: The directors are not on the committee of the Board of any company other than Khoday India Limited.

Disclosures concerning Directors retiring by rotation and proposed to be re-appointed

(i) Mr.Khoday Swamy Giridhar, a Scion of the Khoday Family has been a Non-executive Directorof the Company since his appointment on 30th December 2008. Aged 39 years, Mr.Giridharholds a Diploma in Civil Engineering and has been actively associated with the various facetsof the business in the Khoday Group. Mr.Giridhar holds 72,000 equity shares of the Company inhis name as on 31st March 2012 as well as on 22nd September 2012.

(ii) Mr. Sudhakar Shetty has been an Independent Director of the Company since his appointmenton 30th December 2008. Aged 63 years, Mr.Shetty holds a Degree in Science as well as Law &is qualified as a Certified Accountant of the Indian Institute of Bankers during his long careerspanning over 23 years in a public sector bank. He has rich experience in commercial andinvestment banking operations. Mr.Shetty is the Managing Director of M/s. Sheshanka FinancialServices Private Limited, for the past 19 years, providing corporate advisory services to manyleading Corporates. Mr.Shetty is also the Promoter Director of M/s Sheshanka Securities Ltdwhich is a Corporate Member of National Stock Exchange of India Ltd., Bangalore Stock Exchange,OTC Exchange and Sub-broker of Bombay Stock Exchange. Further, Mr.Shetty is the PromoterDirector of M/s. S Mart Limited which is distributor of Insurance and Mutual Fund Products.

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Mr. Shetty does not hold any shares in the Company as on 31st March 2012 as well as on 22nd

September 2012.

Disclosures concerning the appointment of Directors:-

a) Mr.Puranic Ramachar Ananda Murthy

Mr. P.R. Ananda Murthy was appointed as an Independent Director of the Company on 23rd

September 2011 in the casual vacancy caused by the demise of Mr.D.V.Tikekar. Aged 77 years,Mr.Ananda Murthy, has a rich and varied experience in the Corporate Management field for over5 decades. He has worked as Group President of Khoday Group of Companies for over 20years i.e. during the period from 1987 to 2008. Prior to joining the Khoday Group, Mr.AnandaMurthy held the position of Chairman & Managing Director of National Textile Corporation,Bangalore. He is the past Chairman of Indo American Chamber of Commerce.

Mr. Ananda Murthy is a Science graduate from Central College, Bangalore and is a fellowmember of the Institute of Cost & Works Accountants of India, Kolkata. He also holds Diplomafrom Indian Institute of Science, Bangalore as well as from Indira Gandhi National OpenUniversity, New Delhi and Masters’ Degree in International Affairs from Annamalai University.

Mr. Ananda Murthy has actively associated himself with espousing corporate management andenvironmental issues and he is involved in Rotary service, social service and creative writing.

Mr. Ananda Murthy holds one equity share in the Company as on 31st March 2012 as well as on22nd September 2012.

b) Mr. Khoday Ramachandra Nithyanand,

Mr. K.R. Nithyanand son of Mr. K.L. Ramachandra Chairman, belongs to the fourth generation ofthe illustrious Khoday family. Mr.Nithyanand was earlier a Director of Khoday India Limitedduring the period from June 1986 to March 2002, when he resigned to assume charge of day-to-day manufacturing operations at Khodays Breweries Limited. Mr.Nithyanand has played akey role in bagging the contract for manufacture and bottling of the well known “Australian Max”Brand of Beer, by Khodays Breweries Ltd.

Aged about 54 years, Mr.Nithyanand is a graduate in science. He has actively associated withthe various facets of business in the Khoday Group of Industries. Mr.Nithyanand holds 72,007equity shares of Khoday India Limited in his name. Mr.Nithyanand is also a Director of 6 otherpublic companies and 13 private companies in the Khoday Group.

c) Mr. Gurunath Srihari Khoday,

Mr.K.H.Gurunath son of Mr. K.L.Srihari, Vice-Chairman and Managing Director, belongs to thefourth generation of the illustrious Khoday family. Mr.Gurunath was earlier a Director of KhodayIndia Limited during the period from June 1986 to March 2002, when he resigned to assumecharge of day-to-day manufacturing operations at the Company’s plant at Kannayakana Agrahara,Bangalore.

Aged about 49 years, Mr.Gurunath is a Graduate in Science. Being an Industrialist, he is activelyassociated with the various facets of business in the Khoday Group of Industries. Mr.Gurunathis also a Director of 6 Public Companies and a Private Company in the Khoday Group.Mr.Gurunath holds 35,964 equity shares of Khoday India Limited in his name.

d) Mr.Dowray Prabhakara Rao

Mr. D. Prabhakara Rao is of 67 years age. He holds Bachelor’s Degree in both Commerce andLaw and has gained rich experience in the field of audit and taxation by working for over four

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decades in two different Firms of Chartered Accountants in Bangalore, viz., M/s Dandekar andCompany and M/s M.L.Srinath and Company.

Mr. Prabhakar Rao possesses varied experience in audit work relating to Income Tax and SalesTax of businesses in diverse industries such as building construction, entertainment, alcoholicbeverages manufacture and other whole sale businesses. He is also well acquainted in thelegalities relating to acquisition and disposal of immovable properties.

During the year 1997, Mr.Prabhakar Rao was a Director of M/s Trinity Corp India Private Limited,a Company set up by its principals in United Kingdom, to establish power projects at Karwar inKarnataka and at Cuddalore in Tamilnadu.

Mr.Prabhakar Rao does not hold any shares in the Company.

3. AUDIT COMMITTEE:

The Audit Committee of the Board of Directors was constituted during the year 1991 itself and has beenmeeting regularly ever since, long before the introduction of Sec.292A of the Companies Act, 1956 byCompanies (Amendment ) Act 2000 vide which public companies with a paid up capital of not less than Rs.5Crores are required to constitute an Audit Committee. The Committee oversees the Company’s financialreporting process and the disclosure of its financial information to ensure correctness of such reporting anddisclosure. The Committee ensures compliance with requirements as to the audited annual financialstatements & un-audited quarterly financial statements furnished to the stock exchanges under the ListingAgreement. Statutory payments by the Company to various authorities are also reviewed by the Committee.

The Audit Committee presently comprises 4 members viz., Mr.K.L.Ramachandra – Non-Executive Director,and other 3 Independent Non-Executive Directors viz., Prof.L.R.Vagale, Maj.Gen.(Retd.)M.K.Paul &Mr. Sudhakar Shetty. The Company Secretary acts as the Secretary to the Committee. The Committeeelected Prof. L.R.Vagale, to act as its Chairman. The Audit Committee Meetings were held on 13-05-2011,16-8-2011, 23-09-2011, 15-11-2011 & 06-02-2012.

No. of AuditName of Members Designation Category Committee

Meetings attended

Mr. K.L. Ramachandra Member Promoter- 5Non-Executive

Prof. L.R. Vagale Chairman Independent- 3Non Executive

Maj. Gen. (Retd.) M.K.Paul Member Independent- 5Non Executive

Mr. Sudhakar Shetty Member Independent - 5Non Executive

4. REMUNERATION COMMITTEE:-

The ‘Remuneration Committee’ constituted to consider fixing and payment of remuneration to the ExecutiveDirectors, comprises the three Independent Non-executive Directors viz., Maj.Gen.(Retd.) M.K.Paul,Prof.L.R.Vagale & Mr.Sudhakar Shetty.

15


AGM Financial year Venue Date Time Specialended Resolution

45th 31-3-2011 Sharavanti Kalyana 28-10-2011 12.00 Noon Yes, Passed forMantapa re-appointmentBangalore of Vice-Chairman

and ManagingDirector & JointManaging Director

44th 31-3-2010 Hotel Vaishnavi 30-09-2010 10.30 a.m. Yes, Passed forResidency, commencementBangalore and undertaking

of new businessactivitiesspecified in theMemorandum ofAssociation.

43rd 31-3-2009 Hotel Vaishnavi 30-09-2009 11.00 a.m. NoResidency,Bangalore

5. SHAREHOLDERS’/ INVESTORS’ GRIEVANCE COMMITTEE:

The Share transfer Cum Investors’ Grievance Committee is constituted to consider and approve transfer,transmission of shares and other incidental aspects. It comprises of 3 Directors viz. Mr. K.S.Giridhar, theNon-Executive Director is the Chairman of the Committee and Mr.K.LSrihari & Mr.K.L.Swamy are the othertwo members. Mr.R.Venkat subramanyan, Company Secretary functions as the Compliance Officer.

During the year, the Committee met 20 times. The Company received 2 complaints from shareholders bothof which were redressed to the satisfaction of shareholders within 30 days of receipt.

5. GENERAL BODY MEETINGS:

Particulars of last three Annual General Meetings held:

POSTAL BALLOT:

No resolution was passed through postal ballot, at the previous Annual General Meeting held on 28th

October 2011. So also, no special resolution is proposed to be considered through postal ballot at theensuing Annual General Meeting scheduled to be held on 30th October 2012.

DISCLOSURES:

(i) Attention of the Members is drawn to the disclosures of transactions with related parties as setout in Note No. 35 of Notes on Accounts forming part of this Annual Report. The Company’srelated party transactions are generally with other companies in the Khoday Group and thetransactions are entered in to based on considerations of business exigencies. All related partytransactions are negotiated on arms length basis, intended only to further the interests of theCompany.

The Company has consistently followed and applied the Accounting treatment in respect ofvarious transactions, as prescribed in the Accounting Standards, without any deviation.

16


(ii) Remuneration to Directors:

(a) None of the Directors under both the Executive and Non-executive category have been paidany remuneration by the Company during the year, excepting Sitting Fees paid to the IndependentNon-executive Directors for attending the Meetings of the Board and the Committees thereof, asdetailed below.

Sl.No. Name of the Director (Non-Executive) Sitting Fees paid during the year

1. Prof. L.R. Vagale Rs. 12,250/-

2. Maj. Gen. (Retd.) M .K. Paul Rs. 19,250/-

3. Mr. Bangra Kulur Ratnakar Rao Rs. 5,250/-

4. Mr. Sudhakar Shetty Rs. 19,250/-

5. Mr. D.V. Sathyanarayana Rs. 5,250/-

6. Mr. P.R. Ananda Murthy Rs. 5,250/-

Note: 1) The sitting fees paid as above is well within the prescribed limit. 2) No sitting fees was paid to any of the Promoter Directors.

b) Details of Shareholding of Non-Executive Directors of the Company:

Of the eleven Non-Executive Directors, Mr.K.L.Ramachandra who is also the Chairman holds 61,45,899shares of the Company. Mr.K.S.Giridhar holds 72,000 shares, Mr.K.R.Nithyanand holds 72,007 shares,Mr.K.H.Gurunath holds 35,964 shares and Mr.P.R.Ananda Murthy holds 1 share of the Company in theirname respectively. The other Non-Executive Directors viz., Prof.Vagale, Maj.Gen(Retd.) M.K.Paul, Mr.BangraKulur Ratnakar Rao, Mr.Sudhakar Shetty, Mr.D.V.Sathyanarayana and Mr.D.Prabhakara Rao do not hold anyshares of the Company in their name.

iii) The Company has complied with the requirements of regulatory authorities on capital marketsand no penalties/strictures have been imposed during the last three years.

iv) CEO/CFO Certification: The Managing Director has Certified to the Board of Directors, inter-alia,the accuracy of financial statements and adequacy of internal controls for financial reportingpurpose as required under Clause 49 (V) of the Listing Agreement for the year ended31-03-2012.

Compliance with mandatory requirements under Clause 49:-

The mandatory requirements as per Clause 49 of the Listing Agreement have been complied with by theCompany.

Non-mandatory requirements under Clause 49 of the Listing Agreement:

i) The Chairman is a Non-Executive Director. The Company has not reimbursed any expenses incurred formaintenance of his office or in the performance of his duties.

ii) The Company has constituted the ‘Remuneration Committee’ for the purpose of considering payment ofremuneration to Whole-time Directors.

iii) The Director’s comments on the remarks of Auditors in their Report, are contained in page no. 8 of thisAnnual Report

17


7. MEANS OF COMMUNICATION:

i. The statements of quarterly financial results are furnished to the Stock Exchanges through facsimiletransmission (fax) immediately after conclusion of the Board Meeting and also through courier incompliance with the requirement under the Listing Agreement.

ii. The un-audited financial results are published in the English daily “Financial Express” andKannada daily “Samyukta Karnataka”.

iii. Consequent to the discontinuance of EDIFAR website of the Stock Exchanges, action is beingtaken to host on the Company’s website, the quarterly un-audited financial statements, auditedbalance sheet, shareholding pattern of the Company to comply with the requirement specified bySEBI.

iv. The Company’s Balance Sheet and the un-audited quarterly financial results will be posted onthe Company’s website “khodayindia.com” which is being redesigned.

v. The Company’s Annual Report containing inter-alia Directors’ Report, Auditor’s Report, AuditedAnnual Accounts and other important information is circulated to the Members and others entitledthereto.

vi. Printed copies of the Chairman’s Address are distributed among the Members attending theAnnual General Meeting.

8. GENERAL SHAREHOLDER INFORMATION:

i. The 46th Annual General Meeting is scheduled to be held on Tuesday the 30th October 2012at Shravanthi Kalyana Mantapa, Doddakallasandra, Kanakapura Main Road, Bangalore-560 062(No resolution through postal ballot is proposed to be passed at the AGM).

ii. Financial year : 1st April 2011 to 31st March 2012

iii. Book Closure Date : 22-10-2012 to 30-10-2012(both days inclusive).

iv. Dividend Payment Date : No dividend payment is proposed.

v. Shares of the Company Listed at :-

a. BSE Ltd,Phiroze Jeejeebhoy Towers,Dalal Street, Mumbai-400 001Phone No: 022-22721233 / 34

b. Bangalore Stock Exchange LtdStock Exchange Towers,51, 1st Cross, J C RoadBangalore-560 027Phone No: 080-41575234 / 35

c. Madras Stock Exchange Ltd“Exchange Building”11, Second Line BeachChennai-600 001Phone No: 044-25228951

The Annual Listing Fee for the year 2012-13 has been paid to all the 3 Stock Exchanges.

vi. Company’s Stock Code : 507435 (BSE)

18


April-11 54.00 38.85 19811.14 18976.19

May-11 42.80 37.30 19253.87 17786.13

June-11 41.70 33.20 18873.39 17314.38

July-11 43.85 36.20 19131.70 18131.86

Aug-11 43.50 29.60 18440.07 15765.53

Sept-11 37.00 30.50 17211.80 15801.01

Oct-11 38.00 30.15 17908.13 15745.43

Nov-11 36.85 25.05 17702.26 15478.69

Dec-11 32.00 24.65 17003.71 15135.86

Jan-12 36.40 22.50 17258.97 15358.02

Feb-12 75.60 29.05 18523.78 17061.55

Mar-12 65.00 47.05 18040.69 16920.61

MonthShare Price

High Low

BSE Sensex

High Low

viii. Registrar and Share Transfer Agent:

M/s. Integrated Enterprises (India) Limited,(formerly: Alpha Systems Private Limited)30, Ramana Residency,4th Cross, Sampige Road,Malleswaram, Bangalore-560 003Tel: 080-23460815 to 18Fax No: 080-23460819

ix(a). Share Transfer System:

The requests for transfer, transmission etc in respect of shares held in the physical mode areprocessed by the Registrar M/s. Integrated Enterprises (India) Limited who forward to the Companyonce every 15 days, a Memorandum containing details of the proposed transfers, transmission etc. forCompany’s approval. The said Memorandum and the concerned documents are scrutinized andapproved by the Share Transfer Cum Investor Grievances Committee of the Board of Directors. Uponconveying of the said approval, the share certificates are endorsed with share transfer / transmissiondetails and despatched by the Registrar to the transferees / beneficiaries within 1 month of receipt ofthe documents as required under Clause 3 (c) of the Listing Agreement with the Stock Exchanges.Requests for dematerialization of shares are processed and the confirmation in that regard are conveyedto Depositories within 15 days of receipt. All routine correspondence connected with share transfers/ transmissions etc. are attended to by the Registrar. The Company representative periodically visitsthe Registrar’s office to monitor the work entrusted..

vii. Stock Market Price Data (BSE) & performance vis-à-vis BSE Sensex:

19


ix(b). Secretarial Audit:

• Pursuant to Clause 47 (c) of the Listing Agreement with the Stock Exchanges, Certificates on halfyearly basis, issued by the Company Secretary in Practice for due compliance of Share transferformalities by the company are forwarded to the Stock Exchanges as prescribed.

• The Practicing Company Secretary carried out the Secretarial Audit to reconcile the total admittedcapital with National Securities Depositories Limited (NSDL) & Central Depository SecuritiesLimited (CDSL) and the total issued and listed capital. The Audit confirms that the total issue /paid-up capital is in agreement with the aggregate of the total number of shares in physical formand the total number of shares in dematerialized form.

• Pursuant to SEBI (Depositories & Participants) Regulations 1996, Certificates have also beenreceived from a Practicing Company Secretary for dematerialization of the Company’s sharesand for conducting a Secretarial Audit on a quarterly basis for reconciliation of the share capital ofthe Company.

x) Distribution of Shareholding:-

a) Shareholding Pattern as on 31st March 2012:-

CategoryNo.of No. of % ofShare holders Shares held Shareholding

Individuals (including NRIs) 16074 3699189 9.84Companies 194 199368 0.53Promoters and AssociatedCompanies 48 33660216 89.54FII/Foreign Nationals 0 0 0Mutual Funds, FIs, Banks 8 4477 0.01NSDL/CDSL Clearing Member 50 27987 0.07

Total 16374 37591237 100.00

b) Distribution of shareholding by size as on 31st March 2012 :

Range of No. of % of No. of % of Shares Share holders Share holders Shares Held Share-holding

1 - 500 15490 94.60 1865029 4.96

501 - 1000 422 2.58 329309 0.88

1001 - 2000 199 1.22 303185 0.81

2001 - 3000 69 0.42 169078 0.45

3001 - 4000 33 0.20 117697 0.31

4001 - 5000 36 0.22 161296 0.43

5001 -10000 45 0.27 325568 0.87

10001 &ABOVE 80 0.49 34320075 91.30

Total 16374 100.00 37591237 100.00

20


xi. Dematerialization of shares and liquidity

Equity shares of the company being in the compulsory dematerialized segment, their trading is facilitatedthrough both the Depository Systems in India, viz., NSDL and CDSL. The International Securities IdentificationNumber (ISIN) allotted for the Company’s shares under the Depository System is INE687B01014-KIL. Theaggregate number of shares held in dematerialized form is 5565108 as on 31st March 2012. Shareholdersholding shares in dematerialized form are required to enter into correspondence with the concerned DepositoryParticipants. 12,75,283 No. of shares were traded on BSE during the year.

xii. There are no outstanding warrants or any convertible instruments issued by the Company.

Plant Location: No:54, Kannayakana AgraharaAnjanapura Post,Bangalore - 560 062.

xiii. Address for correspondence: Khoday India Limited“Brewery House”,7th Mile, Kanakapura Road,Bangalore-560 062.

21


Auditor’s Certificate on Corporate Governance

ToThe Members ofKhoday India Limited.

We have examined the compliance of conditions of Corporate Governance by Khoday India Limited for theyear ended 31st March 2012 as stipulated in Clause 49 of the Listing Agreement of the said Company withstock exchange(s).

The compliance of conditions of Corporate Governance is the responsibility of the Management. Ourexamination was limited to a review of the procedures and implementations thereof, adopted by the Companyfor ensuring the compliance of the conditions of the Corporate Governance as stipulated in the said clause.It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and based onthe representations made by the Directors and the Management, We certify that the Company has compliedwith the conditions of Corporate Governance as stipulated in the above mentioned listing agreement.

We state that, as at 31st March 2012, no investor’s grievances were pending for a period exceeding onemonth against the Company as per the records maintained by the Company and produced for our verification.

We further state that such compliance is neither an assurance as to the future viability of the Company northe efficiency or effectiveness with which the management has conducted the affairs of the Company.

Place : Bangalore For Rangaraju & AssociatesDate : 22-09-2012 Chartered Accountants

(Firm Regn No.6912S)

Krishnan RangarajuPartner

Membership No. 18457

22


To the Members of Khoday India Limited

1. We have audited the attached Balance Sheet of Khoday India limited as at 31st March 2012, the State-ment of Profit and Loss and also the Cash Flow statement for the year ended on that date, annexedthereto. These financial statements are the responsibility of the Company’s management. Our respon-sibility is to express an opinion on these financial statements based on our audit.

2. We have 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 aboutwhether the financial statements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government interms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure astatement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

a. We have obtained all the information and explanations, which to the best of our knowledge andbelief were necessary for the purpose of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far asappears from our examination of those books.

c. The Balance Sheet, Statement of Profit & Loss and Cash Flow statement dealt with by this report arein agreement with the books of account.

d. In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash flow Statement dealt with bythis report comply with the applicable Accounting Standards referred to in Sub-Section (3C) ofSection 211 of the Companies Act, 1956.

e. On the basis of written representations received from the Directors, as on 31st March 2012 andtaken on record by the Board of Directors, we report that none of the Directors are disqualified as on31st March 2012 from being appointed as Director in terms of clause (g) of sub-section (1) of section274 of the Companies Act, 1956.

5. In our opinion, and to the best of our information and according to the explanations given to us, the saidBalance Sheet and the Statement of Profit & Loss read together with the notes thereon and AccountingPolicies give the information required by the Companies Act, 1956, in the manner so required and givea true and fair view in conformity with the accounting principles generally accepted in India;

a. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012,b. In the case of the Statement of Profit & Loss, of the Profit for the year ended on that date, andc. In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

For Rangaraju & AssociatesChartered Accountants(Firm Regn No.6912S)

Krishnan RangarajuPlace : Bangalore PartnerDate : 22.09.2012 Membership No. 18457

REPORT OF THE AUDITOR

23


i. (a) The Company has maintained proper records showing full particulars including quantitative detailsand situation of fixed assets.

(b) We have been informed that the fixed assets of the Company are physically verified by the Managementaccording to a phased program designed to cover all the items over a period of three years, which in ouropinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuantto the program, physical verification was carried out during the year and to the best of our knowledge nomaterial discrepancies were noticed.

(c) The fixed assets disposed off during the year were not substantial so as to affect the going concernstatus of the Company.

ii. (a) As explained to us, Inventories have been physically verified by the management at reasonableintervals during the year. The stocks in possession of the third parties have been confirmed by them.

(b) In our opinion and according to the information and explanations given to us, the procedures ofphysical verification of inventories followed by the Management are reasonable and adequate in relationto the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company hasmaintained proper records of inventories and we have been informed that no material discrepancieswere noticed on physical verification.

iii. (a) The Company has not granted any Loans, secured or unsecured to Companies, firms or otherparties covered in the Register maintained under Section 301 of the Companies Act, 1956. As theCompany has not granted any loans, Clauses (iii) (b), (iii) (c) and (iii) (d) of paragraph 4 of the Companies(Auditors Report) order, 2003 are not applicable to the Company.

(b) The Company has not taken loans, secured or unsecured, from companies and firms which havebeen listed in the register maintained under section 301 of the Companies Act, 1956

However, the Company has taken unsecured Interest free loan from four Directors’ of the Company andthe maximum amount outstanding at any time during the year is Rs. 76,584 Thousands and the yearend balance of such loan is Rs. 75,315 Thousands.

(c) In our opinion, according to the information and explanations given to us, the loan taken from theDirectors are interest free, and the terms and conditions are not, prima facie, prejudicial to the interestof the Company.

(d) Since there is no stipulation as to the repayment of principal and interest, we are of the opinion thatthere is no irregularity in the repayment of these loans.

iv. In our opinion and according to the information and explanations given to us, there is adequate internalcontrol system commensurate with the size of the Company and the nature of its business with regardto purchase of inventory, fixed assets and for the sale of goods and services. During the course of ouraudit, we have neither come across nor have we been informed of any continuing failure to correct majorweaknesses in the aforesaid internal control system.

v. (a) In our opinion and according to the information and explanations given to us, the particulars ofcontracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be enteredinto the register maintained under that section have been so entered.

ANNEXURE TO THE AUDITOR’S REPORT.(Referred to in Para 3 of our report of even date)

24


Name of the Nature of Dues & Amount Forum where disputeStatute related Period (Rs. in Thousands) is pending.

Karnataka Sales Tax Sales tax, Entry Tax and 2,096 Joint Commissioner ofAct, 1957 penalty for F.Y. 2002-03 Commercial Taxes (Appeal)

Bangalore.

Karnataka Sales Tax Sales tax, Entry Tax and 12 Joint Commissioner ofAct, 1957 penalty for F.Y. 2005-06 Commercial Taxes (Appeal)

Bangalore.

Income Tax Act, 1961 Income tax for the 10,910 Commissioner ofAY-2008-09 Income Tax (Appeals)

Employees Provident EPF for the F.Y. 2006-07 2,616 Employees Provident FundFund Act, 1952 and 2007-08 Tribunal, New Delhi

(b) In our opinion and according to the information and explanations given to us, the transactions madein pursuance of such contracts or arrangements entered in the register maintained under section 301of the Companies Act, 1956 and exceeding the value of Rs. 5 lakhs in respect of each party have beenmade at prices which are prima facie reasonable having regard to the prevailing market prices at therelevant time, where the market price is available.

vi. In our opinion and according to the information and explanations given to us, the Company has notaccepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act1956 and the rules framed there under.

vii. In our opinion, the Company has an internal Audit system commensurate with its size and nature ofbusiness.

viii. We have broadly reviewed the books of accounts maintained by the Company pursuant to the Companies(Cost Accounting Records) Rules, 2011 prescribed by the Central Government for the maintenance ofcost records under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima faciethe prescribed accounts and records have been made and maintained.

ix. (a) (i) According to the information and explanations given to us and as per our verification of the recordsof the Company, in our opinion, the company is generally regular in depositing undisputed statutorydues including Income Tax, Service Tax, Value Added Tax/Sales Tax, Wealth Tax, Customs Duty, ExciseDuty and Cess, except certain amounts towards Professional Tax, Employees State Insurance andProvident Fund.

(ii) According to the information and explanations given to us, excepting for Rs.16,640/- towardsProfessional Tax, Rs.31,157/- towards Employees State Insurance & Rs.74,532/- towards ProvidentFund, there are no other undisputed amounts payable in respect of statutory dues which haveremained outstanding as at 31st March 2012 for a period of more than six months from the date theybecame payable. However, the entire dues have been paid subsequently.

(b) According to the information and explanations given to us and as per records of the Company, thefollowing are the particulars of dues on account of Sales Tax, Income Tax and Employees ProvidentFund which have not been deposited on account of dispute before the forum mentioned there against.

x. The Company does not have any accumulated losses at the end of the financial year. The Company hasnot incurred cash loss during the financial year, but has incurred cash loss during the immediatelypreceding financial year.

25


For Rangaraju & AssociatesChartered Accountants(Firm Regn No.6912S)

Krishnan RangarajuPlace : Bangalore PartnerDate : 22-09-2012 Membership No. 18457

xi. The Company has defaulted in timely repayment of principal and interest dues to banks. The details ofwhich are given below:

xii. According to the information and explanations given to us, the Company has not granted any loans andadvances secured by pledge of shares, debentures and other securities.

xiii. In our opinion, the Company is not a chit fund or a nidhi or a mutual fund society. Therefore the provisionof clause 4 (xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and otherinvestments. Accordingly the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003are not applicable to the Company.

xv. According to the information and explanations given to us, the Company has not given any guarantee forthe loans taken by others from banks or financial institutions.

xvi. In our opinion, and according to information and explanations given to us, term loans have been appliedfor the purposes for which they were raised.

xvii. Based on the information and explanations given to us and overall examination of the Balance sheet ofthe Company, in our opinion, there are no funds raised on a short term basis which have been used forlong term investment.

xviii. According to the information and explanations given to us, the Company has not made any preferentialallotment of shares to parties and companies covered in the Register maintained under Section 301 ofthe Companies Act, 1956 during the year.

xix. According to the information and explanations given to us, the Company has not issued any debenturesduring the year.

xx. The Company has not raised any money by way of public issue during the year.

xxi. According to the information and explanations given to us, no fraud on or by the company has beennoticed or reported during the course of our audit.

S.No Term LoanAmount of Default

Period of default Paid on(Rs. In thousands)

1 Canara Bank 8,411 Interest for 17th April 2012February 2012and March 2012

2 Dhanalakshmi Bank 3,292 Installments due 24th May 2012on 31st March2012.

26


BALANCE SHEET AS AT 31ST MARCH, 2012[Rupees in Thousands]

P A R T I C U L A R S NoteAs at As at

31-03-2012 31-03-2011

EQUITY AND LIABILITIES1. SHARE HOLDERS’ FUNDS

[a] Share Capital 1 375,912 375,912[b] Reserves & Surplus 2 713,281 574,777

1,089,193 950,6892. NON - CURRENT LIABILITIES

[a] Long - Term Borrowings 3 277,093 236,134[b] Other Long - Term Liabilities 4 10,129 13,825[c] Long - Term Provisions 5 30,548 38,526

317,770 288,4853. CURRENT LIABILITIES

[a] Short -Term Borrowings 6 709,086 738,685[b] Trade Payables 7 235,637 234,566[c] Other Current Liabilities 8 514,913 741,326[d] Short -Term Provisions 9 33,434 5,121

1,493,070 1,719,698

T O T A L :- 2,900,033 2,958,872

ASSETS1. NON-CURRENT ASSETS

[a] Fixed Assets 10 [i] Tangible Assets 487,043 513,305

[ii] Capital Work in Progress 9,523 11,134[b] Non - Current Investments 11 616,001 617,320[c] Long -Term Loans and Advances 12 71,488 106,991[d] Other Non-Current Assets 13 23,848 24,945

1,207,903 1,273,6952. CURRENT ASSETS

[a] Inventories 14 953,031 859,011[b] Trade Receivables 15 421,132 376,840[c] Cash & Cash Equivalents 16 17,805 120,538[d] Short -Term Loans & Advances 17 285,711 312,143[e] Other Current Assets 18 14,451 16,645

1,692,130 1,685,177

T O T A L :- 2,900,033 2,958,872

Significant Accounting Policies A

Notes on Accounts 1 - 44The Notes referred to above form an integral part of the Balance Sheet

For and Behalf of the Board As per our report of even date

K. L. RAMACHANDRA K. L. SRIHARI for Rangaraju & AssociatesChairman Vice - Chairman & Chartered Accountants

Managing Director Firm Regn. No. 6912S

Place: Bangalore R. VENKAT SUBRAMANYAN KRISHNAN RANGARAJUDate : 22.09.2012 Company Secretary Partner


27


STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2012[Rupees in Thousands]

P A R T I C U L A R S NoteFor the year ended For the year ended

31-03-2012 31-03-2011

I N C O M E :Revenue from Operations 19 1,647,740 1,374,310Other Income 20 17,617 33,116

T O T A L R E V E N U E:- [A] 1,665,357 1,407,426

E X P E N S E S :-Cost of raw materials consumed and purchaseof goods for resale 21 678,132 706,529Changes in inventories of finished goods andWork-In-Progress 22 (104,524) (3,262)Employees benefit expenses 23 142,978 146,733Finance costs 24 225,142 215,406Depreciation: 10

Depreciation for the year 55,186 56,161Less: Transferred from Revaluation reserve 5,554 7,599

49,631 48,562Impairment loss for the year (Refer Note 39) 1,991 -Other expenses 25 479,381 422,700

T O T A L E X P E N S E S :- [B] 1,472,731 1,536,668

PROFIT / (LOSS) BEFORE TAXATION [A - B] 192,626 (129,242)

Provision for Taxation - Current Income Tax 34,300 -PROFIT/ (LOSS) AFTER TAXATION 158,326 (129,242)

Income Tax relating to earlier years - (Net) 48 3,700Prior year adjustments 250 350NET PROFIT/ (LOSS) FOR THE YEAR 158,028 (133,292)

Basic and Diluted Earnings Per Share (in Rupees) Refer Note-37 4.20 (3.55)Significant Accounting Policies ANotes on Accounts 1 - 44The Notes referred to above form an integral part of Statement of Profit & Loss

for and behalf of the Board As per our report of even date



Place: Bangalore R. VENKAT SUBRAMANYAN KRISHNAN RANGARAJUDate : 22-09-2012 Company Secretary Partner


28


NOTES ON BALANCE SHEET AND STATEMENT OF PROFIT & LOSS FOR YEAR ENDED 31-03-2012[Rupees in Thousands]

As at As atP A R T I C U L A R S31-03-2012 31-03-2011

NOTE - 1SHARE CAPITAL

AUTHORISED4,50,00,000 (Previous year 4,50,00,000) Equity Shares of Rs.10/- each 450,000 450,000

ISSUED3,75,91,237 (Previous year 3,81,34,237) Equity Shares of Rs 10/- each 375,912 381,342

RECONCILIATION OF NUMBER OF SHARES [Rupees in Thousands]As at As at

31-03-12 31-03-11Balance as at the beginning of the year(Number of Shares: 3,81,34,237; PY-3,81,34,237) 381,342 381,342

LESS: Cancellation of Shares issued but not subscribedu/s 94 of the Companies Act 1956.(Number of Shares: 5,43,000; PY-Nil) 5,430 -

Balance as at the end of the year(Number of Shares: 3,75,91,237; PY-3,81,34,237) 375,912 381,342

SUBSCRIBED AND PAID UP3,75,91,237 (previous year: 3,75,91,237)Equity Shares of Rs.10 each fully paid up 375,912 375,912TERMS/RIGHTS ATTACHING TO EQUITY SHARESThe Company has only one class of equity shares havinga par value of Rs.10/- per share with voting rightsDETAILS OF SHAREHOLDERS HOLDING MORE THAN 5% SHARES IN THE COMPANY

Name of the Shareholder Number of Shares and % of holdingsAs at 31.03.2012 As at 31.03.2011

K.L. Ramachandra (H.U.F) 58,11,839 (15.46%) 58,11,839 (15.46%)K.L. Srihari (H.U.F) 58,15,795 (15.47%) 58,15,795 (15.47%)K.L.A. Padmanabhasa (H.U.F) 58,11,580 (15.45%) 58,11,580 (15.45%)K.L. Swamy (H.U.F) 58,01,122 (15.43%) 58,01,122 (15.43%)Gayathri Holdings Pvt Ltd 23,42,150 (6.23%) 23,42,150 (6.23%)

As per the records of the Company, including its register of shareholders/members,the above shareholding represents both legal and beneficial ownership of shares

T o t a l . . . 375,912 375,912

NOTE - 2RESERVES AND SURPLUS

CAPITAL RESERVEAs per last Balance Sheet { A } 216,186 216,186CAPITAL REDEMPTION RESERVEAs per last Balance Sheet { B } 531 531SHARE PREMIUM ACCOUNTAs per last Balance Sheet { C } 115,463 115,463GENERAL RESERVEAs per last Balance Sheet { D } 184,379 184,379

29


NOTE - 3 : LONG - TERM BORROWINGS:SECURED LOANS :a. Term Loans

i - From Banks 342,820 251,249

ii - From Others – 1,669

Less: Current Maturities of long term debt (Refer note 8a) 152,282 101,387

{ A } 190,538 151,531

b. Long Term Maturities of Finance Lease Obligations - Hire Purchase 18,456 14,954Less: Current maturities of Finance Lease Obligations (Refer note 8b) 7,216 6,935

{ B } 11,240 8,019UNSECURED:a. Loans & Advances from Related Parties { C } 75,315 76,584

T o t a l . . . { A + B + C } 277,093 236,134

(a) (i) Term Loans from banks include

REVALUATION RESERVEAs per last Balance Sheet 141,392 148,991Less : Transferred to Profit & Loss Statement 5,554 7,599Less : Transferred on Account of Impairment of Assets 13,970 –

As at the end of the financial year { E } 121,868 141,392

SURPLUS IN THE STATEMENT OF PROFIT & LOSS:As per last Balance Sheet (83,175) 50,117Add: Profit /(Loss ) for the year 158,028 (133,292)

As at the end of the financial year { F } 74,854 (83,175)

T o t a l . . . { A + B + C + D +E + F } 713,281 574,777

SECURED BYTERMS OF DEFAULT

REPAYMENT (If any)

(1) Rs. 131,491 thousands (PY: Rs. 219,384 thousands)secured by hypothecation of Maturation stock andfurther secured by first charge by way of mortgage ofLand & Building of the Company, Residential Propertyof some Directors, immovable properties of a trust inwhich some Directors are Trustees, and further securedby personal guarantee of some of the Directors & eightShareholders and Corporate Guarantee of Firms andTrust in which some of the Directors are Partners andTrustees respectively.

(2) Rs.188,581 thousands (PY: Rs. 24,211thousands) secured by Pari Passu 1st Charge onMaturation stock and further secured by first charge

Repayable in twelvei n s t a l m e n t scommencing fromApril 2012 along withinterest at 14.75% p.a(BPLR + 2.25%)

Repyable in 36i n s t a l m e n t scommencing from

Interest of Feb 12'and Mar 12' Amount-ing to Rs 41.70Lakhs have beensubsequently paid inthe month of April2012.(PY: NIL)

Interest of Feb 12'and Mar 12' Amount-ing to Rs. 42.42



30



REPAYMENT (If any)

by way of mortgage of Land and Building of theCompany and immovable properties of firms in whichsome Directors are Partners, and further secured bypersonal guarantee of some Directors & eight shareholdersand Corporate Guarantee of Firms and Trust in whichsome Directors are Partners and Trustees respectively.

(3) Rs. 19,455 thousands (PY: NIL) secured byhypothecation of Cars of the Company.

(4) Rs. 3,293 thousands (PY: 7,654 thousands) issecured by a property of the Company and furthersecured by Properties of a Private Limited, Trust &Firm in which some Directors are Directors/Trustees/Partners are interested.

March 2013 alongwith interest at 14%p.a (BR + 4.5% +0.5%)

Repayable in 36I n s t a l m e n t scommencing fromApril 2012 along withinterest at 25% p.a

Repayable on 31stMarch 2012 alongwith interest at17.50% p.a

lakhs have beensubsequently paid inthe month of April2012.(PY: NIL)

-NIL-(PY: NIL)

Instalment for thequarter ended March2012 amounting toRs.32.92 lakhs hasbeen subsequentlypaid in the month ofMay 2012.(PY: NIL)

(b) Long Term Maturities of Finance Lease Obligations include

Rs. 18,456 thousands (PY: Rs.14,953thousands) secured by hypothecation of Cars ofthe company .

Payments of EquatedMonthly Instalmentscommencing from themonth subsequent totaking the lease.

-NIL-(PY: NIL)

a. Unsecured Loans & Advances from Related parties

Rs. 75,315 thousands (PY: Rs. 76,584thousands) taken from Directors

Repayable aftertwelve months fromApril 2012 withoutinterest.

-NIL-(PY: NIL)



NOTE - 4 : OTHER LONG -TERM LIABILITIES:

a.Trade payables* 9,776 11,973b.Trade Deposits & Advance from Customers 353 1,852

T o t a l . . . 10,129 13,825

*As per the information available with the company, there are no outstandingdues under Long Term Trade payables that are required to be furnished undersection 22 of Micro, Small and Medium Enterprise Development Act, 2006.

31




NOTE - 5 : LONG -TERM PROVISIONS:a. Provisions for Employee Benefits 30,548 38,526

T o t a l . . . 30,548 38,526

NOTE - 6 : SHORT -TERM BORROWINGS:SECURED LOANS:a. Loans repayable on demand

From Banks- Cash Credit 709,086 738,685

T o t a l . . . 709,086 738,685

a. Loans Repayable on demand (cash credit) from Banks is secured by

SECURED BY DEFAULT (If any)

(1) First charge by way of Hypothecation of stock of Raw Materials, SemiFinished, Finished Goods, other packing materials, Bills Receivables, BookDebts, other movable properties and certain Fixed Deposits of Distillery Divisionon Pari Passu basis.(2) Equitable mortgage of properties of the company, of a private limited company,trust and firms in which some of the Directors are interested/ trustees/ partners.(3) Further secured by the Immovable property of some of the Directors andtheir relatives.(4) By personal guarantee of some of the Directors, Shareholders and theirrelatives and corporate guarantees of some entities in which directors areinterested.

-NIL-(PY: NIL)

NOTE - 7 : TRADE PAYABLES:a. Micro, Small and Medium Enterprises 4,517 8,074b. Others 231,120 226,492

T o t a l . . . 235,637 234,566

NOTE - 8 : OTHER CURRENT LIABILITIES:

a. Current maturities of Long Term Debt (Refer Note 3a) 152,282 101,386b. Current maturities of Finance Lease Obligations (Refer Note 3b) 7,216 6,935c. Interest Accrued and Due on Borrowings - 6,488d. Unpaid Dividends 657 659e. Employee Benefits payable 57,351 25,692f. Trade Deposits and Advance from Customers 266,049 242,230g. Statutory Dues payable 11,546 14,941h. Dues to Related Parties 18,336 330,761i. Other Payables 1,476 12,234

T o t a l . . . 514,913 741,326

NOTE - 9 : SHORT -TERM PROVISIONS:

a. For Excise Duty 5,925 5,121b. For Income Tax ( Net of Advance Tax Rs 34,891 thousands, PY: Nil ) 27,509 -

T o t a l . . . 33,434 5,121

32


NOTE - 10 :

FIXED ASSETS SCHEDULE AS ON 31-03-2012

SL PARTICULARSNo.

GROSS BLOCK DEPRECIATION NET BLOCK

1 L a n d 24 ,105 24 ,105 24 ,105 24 ,105

2 Buildings 429 ,745 429 ,745 168 ,120 15 ,558 3 8 0 184 ,058 245 ,687 261 ,625

3 Plant & Machinery 556 ,650 24 ,901 581 ,551 449 ,897 15 ,901 13 ,845 479 ,642 101 ,908 106 ,753

4 Furniture & Fixtures 389 ,604 3 ,356 392 ,960 297 ,739 14 ,251 1 2 5 312 ,116 80 ,844 91 ,864Other Office Equipments

5 Vehicles 134 ,671 15 ,421 5 ,083 145 ,008 105 ,714 9 , 4 7 5 4 , 6 7 8 1 1 0 , 5 1 1 3 4 , 4 9 8 2 8 , 9 5 7

Tota l 1 ,534 ,775 43 ,678 5 ,083 1,573,369 1,021,469 55 ,186 4 ,678 3 8 0 13 ,970 1,086,327 487 ,043 513 ,305

Previous Year 1 ,464,222 99 ,142 28 ,590 1,534,775 992 ,607 56 ,161 27 ,299 – – 1,021,469 513 ,305 471 ,615

6 Capital Work-in-Progress 11 ,134 – – 11 ,134 – – – 1 ,611 – 1 ,611 9 ,523 11 ,134

7 Previous Year 72 ,129 2 ,643 63 ,638 11 ,134 – – – – – – 11 ,134 72 ,129

As on01.04.2011

AdditionsAs on

01.04.2011For the

yearAs on

31.03.2012As on

31.03.2012As on

31.03.2012With

drawnSale /

TransferAs on

31.03.2011



Impairment losscharged to

Profit &Loss

RevaluatonReserve

NOTE - 11 :NON-CURRENT INVESTMENTS

(Long - Term Investments)A. TRADE INVESTMENTSi. EQUITY INSTRUMENTS (QUOTED) Face Value Number of SharesParticulars of each share 2011-12 2010-11

Excell Glass Limited 1 500 500 1 5United Spirits ltd 10 282 282 2 2United Breweries Limited 1 230 230 5 5United Breweries (Holdings) Ltd. 10 562 562 3 3

Sub Total .... { A } 10 15

ii. EQUITY INSTRUMENTS (UNQUOTED) Face ValueParticulars of each share 2011-12 2010-11

Shreno Limited 100 33 33 4 4Arthos Breweries Limited 10 225 225 2 2Castle Breweries Limited 10 300 300 3 3Pilsener Breweries Limited 10 100 100 2 2Punjab Breweries Limited 10 250 250 3 3Himalaya Distilleries Ltd 10 12500 12500 125 125United Glass Bottles Mfg Co Ltd 10 13650 13650 137 137Khoday Industries Pvt Ltd 1000 480 480 480 480Panchakala Malt Limited 10 100 100 1 1

Sub Total .... { B } 757 757

33




iii. INVESTMENT IN SUBSIDIARIES (UNQUOTED)Face Value

Number of Shares

Particulars of each share 2011-12 2010-11

Khoday Properties Pvt Ltd 10 10000 10000 100 100

T o t a l { C } 100 100

B. NON - TRADE INVESTMENTSi. EQUITY INSTRUMENTS (QUOTED) Face ValueParticulars of each share 2011-12 2010-11

Gulf Oil Corporation Limited 10 12635 12635 114 114

Sub Total .... { D } 114 114


Graviss Hospitality Limited 2 4500 4500 5 5Kasturi Foods & Chemicals Limited 10 5000 5000 50 50MOI Engineering Limited 10 1400 1400 10 10Metal Box India Limited 10 365 365 4 4Modern Syntex (India) Ltd 10 400 400 12 12

Sub Total .... { E } 81 81

iii. INVESTMENT IN PARTNERSHIP FIRMLakshmi Estate 614,844 616,102

Name of the Partners Share of Partners Total Capital (Rs.In thousands)2011-12 2010-11 2011-12 2010-11

Khoday India Limited 75.00% 75.00% 614,844 616,102K.L. Ramachandra - HUF 6.25% 6.25% 50,462 50,567K.L. Srihari - HUF 6.25% 6.25% 50,462 50,567K.L.A. Padmanabhasa - HUF 6.25% 6.25% 50,462 50,567K.L. Swamy - HUF 6.25% 6.25% 53,388 53,592

T o t a l { F } 614,844 616,102

iv. OTHERSInvestment in Government Securities 153 155

T o t a l { G } 153 155

TOTAL OF NON-CURRENT INVESTMENTS {A to G} 616,059 617,324

Less: Aggregate Provision for Diminution in the Value of Non-Current Investments 58 4

TOTAL NON - CURRENT INVESTMENTS ( Net of Provision) 616,001 617,320

AGGREGATE AMOUNT OF QUOTED INVESTMENTS 124 128AGGREGATE MARKET VALUE OF QUOTED INVESTMENTS 1,284 1,512AGGREGATE AMOUNT OF UNQUOTED INVESTMENTS 615,935 617,196

34




NOTE - 12: LONG - TERM LOANS AND ADVANCES

(Unsecured & Considered Good)a. Capital Advances 34,807 55,137b. Security Deposits 21,111 26,184c. Advance Income Tax (Net of Provisions: CY - NIL, PY - Rs 28,100 thousands) - 5,857d. Other Loans and Advances - Trade 15,570 19,813

T o t a l . . . 71,488 106,991

NOTE - 13: OTHER NON-CURRENT ASSETS

(Unsecured & Considered Good)a. Trade Receivables 14,398 15,899b. Earnest Money Deposits 9,450 9,046(Unsecured & Considered Doubtful)a. Trade Receivables - 928Less: Provision for Doubtful Debts - (928)

T o t a l . . 23,848 24,945

NOTE - 14 : INVENTORIES

Valued at lower of Cost and NRVa. Raw Materials 103,694 115,154b. Work-in-Progress 727,741 645,168c. Finished Goods 73,664 51,714d. Stock -in-trade 505 1,267e. Stores, Spares and Packing Material 22,127 20,408f. Other stock in trade - Land 25,300 25,300

T o t a l . . 953,031 859,011

NOTE - 15 : TRADE RECEIVABLES

(Unsecured & Considered Good)

a. Outstanding for a period exceeding six monthsfrom the date they are due for payment 92,081 95,250

b. Others 252,677 281,590

c. Dues from Related Parties 76,374 -

T o t a l . . 421,132 376,840

35


NOTE - 16: CASH AND CASH EQUIVALENTS

a. Balance with Banks

- In Current Accounts 5,013 17,606

- In Deposit Accounts as Margin Money 9,055 51,944

- In Unpaid Dividend Account 657 659

b. Cheques and Drafts on Hand 1,062 3,647

c. Cash on hand 2,018 46,682

T o t a l . . 17,805 120,538

NOTE - 17: SHORT - TERM LOANS AND ADVANCES


a. Lease Deposit with Related Party* 123,626 200,000

b. Dues from related parties 48,398 -

c. Loans and Advances to Employees 4,656 4,344

d. Trade Advances 76,979 81,433

e. Advance for Option of Land Development 10,000 -

f. Balances with Govt. Authorities 22,052 26,366

* Lease Deposit with a firm in which some of the Directors are partners.

T o t a l . . 285,711 312,143

NOTE - 18: OTHER CURRENT ASSETS

a. Interest Accrued on Fixed Deposits 1,717 2,073

b. Prepaid Expenses 12,734 14,572

T o t a l . . 14,451 16,645

NOTE - 19 : REVENUE FROM OPERATIONS

Sale of IML 2,962,280 3,174,584

Sale of Glass 472 20,717

Contract Income 406,916 6,303

Sale of Services 3,577 1,351

Sales - Others* 42,006 27,046

3,415,251 3,230,001Less: Excise Duty 1,767,511 1,855,691*Includes sale of spirits, flavouring materials and refractories.

T o t a l . . 1,647,740 1,374,310



36




NOTE - 20 : OTHER INCOME

Interest Income from Fixed deposits 1,005 2,422

Dividend Income from Non - Current investments 28 19

Rebate Income received 5,200 -

Miscellaneous Income 2,681 3,534

Profit on Sale of Fixed assets 495 4,823

Profit on Foreign Currency Transactions & Translation - 53

Sundry Credit balances Written Back 8,208 22,265

T o t a l . . 17,617 33,116

NOTE - 21 : COST OF RAW MATERIALS CONSUMED AND

GOODS PURCHASED FOR RESALE

OPENING STOCK

Raw Materials and goods purchased for resale 116,421 88,895

Power and Fuel 141 4,781

Stores,Spares and Packing Materials 20,268 20,491

Less : Obsolete Stock of Raw Material written off 25,709 -

T o t a l . . { A } 111,120 114,167

ADD: PURCHASES


Power and Fuel 76,821 72,038


T o t a l . . { B } 693,338 729,192

LESS: CLOSING STOCKRaw Materials and goods purchased for resale 104,199 116,421Power and Fuel 1,232 141Stores,Spares and Packing Materials 20,896 20,268

T o t a l . . { C } 126,326 136,829

Consumption of Raw Materials and Purchased for resale. [A+B-C]




Cost of Raw Material Consumed and goods purchased for resale 678,132 706,529

37


NOTES ON BALANCE SHEET STATEMENT OF PROFIT & LOSS FOR YEAR ENDED 31-03-2012[Rupees in Thousands]


NOTE - 22 : CHANGES IN INVENTORIES OF FINISHED GOODS AND WORK-IN-PROGRESS

CLOSING STOCK :-Finished Goods 73,664 51,715Work-In-Progress 727,741 645,167

T o t a l . . { A } 801,406 696,882

OPENING STOCK :-Finished Goods 51,715 82,868Work-In-Progress 645,167 610,752

T o t a l . . { B } 696,882 693,620

Increase / (Decrease) in Stock [A - B] 104,524 3,262

NOTE - 23 : EMPLOYEES BENEFITS

Salaries, Wages, Gratuity, Bonus and leave encashment 121,421 123,802

Staff Welfare Expenses 14,691 14,986Contribution to P.F. and Other Funds 6,866 7,945

T o t a l . . 142,978 146,733

NOTE - 24 : FINANCE COST

Interest On Term Loan 47,994 53,726

On Others 172,131 155,420Bank Charges 5,017 6,260

T o t a l . . 225,142 215,406

38




NOTE - 25 : OTHER EXPENSES

Manufacturing Expenses:Power & Lighting Charges 20,557 30,452Repairs & Maintenance : - Buildings 1,701 3,267 - Plant & Machinery 14,629 11,957 - Electrical 1,944 1,701

T o t a l { A } 38,831 47,377

Administrative and Selling Expenses:Rent 14,289 12,919Rates & Taxes 39,399 34,883Insurance 2,479 2,034Repairs & Maintenance : - Vehicles 13,690 14,965 - Others 5,041 4,650Freight, Octroi & Storage Expenses 62,518 61,351Lease Rent 4,609 2,118Travelling & Conveyance 32,313 34,175Printing & Stationery 3,298 3,682Telephone, Postage & Telegram 5,935 6,796Books & Periodicals 323 223Security Service Charges 7,460 7,647Legal & Professional Charges 42,740 39,755Directors Sitting Fees 67 75Payments to Auditor - As Auditor 552 552Cost Audit Fees 20 20Donation 2,773 1,596Commission & Discount on Sales 54,475 49,916Sales Promotion 74,609 72,728Advertisement 9,151 4,024Service Charges 4,762 5,079Miscellaneous Expenses 13,394 13,819Share of Loss in Partnership Firm 1,258 1,105Loss on Foreign Currency Transactions & Translation 548 -Obsolete Stock written off 25,709 -Provision for Diminution on Non-Current Investments 54 -Irrecoverable advances written off 19,086 1,211

T o t a l { B } 440,550 375,323

T o t a l . . { A+ B } 479,381 422,700

39


A. Significant Accounting Policies

(a) Accounting Convention:

The Financial Statements have been prepared under the Historical Cost Convention except forcertain assets which are revalued in accordance with the Generally Accepted Accounting Practicesin India.

(b) Basis of Preparation:

The financial statements have been prepared to comply with material aspects regarding allaccounting standards notified by Companies (Accounting Standard) rules, 2006 and the relevantprovisions of the Companies Act, 1956.

(c) Estimates and Assumptions:

Preparation of Financial Statements require management to make estimates and assumptionsthat affect the reported amounts of assets and liabilities, and disclosure of contingent liabilitiesat the date of the Balance Sheet and the reported amounts of income and expenses during thereporting period. Examples include provision for doubtful debts, useful life of assets, etc. Actualresults may differ from these estimates.

(d) Inventories:

Inventory of raw material, stores, spares, materials in transit, work in progress, finished goods –both manufactured and traded are valued at lower of cost and net realizable value.

The cost is calculated on First-in First-Out basis and comprises of expenditure incurred in thenormal course of business in bringing such inventory to its present location, and includes theborrowing cost that are attributable to maturation stocks which has been considered for valuationof semifinished goods wherever applicable, and allocation of appropriate overheads based onnormal level of activity.

Stock in Trade – Land is valued at the value on the date of conversion from capital asset to stockin Trade or the current market value, whichever is lower.

(e) Cash Flow Statements:

Cash Flow Statement has been prepared under “Indirect Method” as prescribed by AccountingStandard–3. Cash and cash equivalents comprise Cash in Hand, Current and other accounts(Including Fixed Deposit) held with Banks.

(f) Events occurring after the Balance Sheet Date:

Assets and Liabilities are adjusted for events occurring after the balance sheet date that provideadditional evidence to assist the estimation of amounts related to conditions existing at thebalance sheet date.

(g) Net Profit or Loss for the period, prior period Items and Changes in Accounting Policies:

� Net Profit for the period:

All the items of income and expenses in the period are included in the determination of net

Notes forming part of Balance Sheet and Statement of Profit and Loss for the Year Ended 31.3.2012Significant Accounting Policies & Notes on Financial Statements [Rupees in Thousands]

P A R T I C U L A R S 31.03.2003 31.03.2002

40


Profit / Loss for the period, unless specifically mentioned elsewhere in the financialstatements or is required by an Accounting Standard.

� Prior Period item:

Income / Expenditure are disclosed in Prior Year Adjustments only when the value exceedsRupees One Lakh in each case.

� Extra Ordinary items:

Extraordinary items, if any are disclosed separately in accordance with AccountingStandard - 5.

(h) Depreciation Accounting:

Depreciation has been provided on fixed assets at the rates prescribed in Schedule XIV to theCompanies Act 1956, on written down value method except for Plant & Machinery and Building ofDistillery Division acquired prior to 31st March 1999 and the assets of Paper Division where thedepreciation has been provided on straight line basis. Depreciation on Oakwood barrels hasbeen provided on written down value method @ 20%, based on technical evaluation. Depreciationis provided on pro-rata basis on additions and deletions from the date the assets were put to useand up to the date of sale / transfer, respectively. Plant & Machinery costing Rs.5,000/- and less isdepreciated in full.

Certain Fixed Assets has been revalued during the year 1998-99. The depreciation charged onsuch Revalued assets is transferred from Revaluation reserve to the Profit & Loss Account.

(i) Revenue Recognition:

� Sales are recognized when the significant risks and rewards of ownership of the goodshave passed to the buyer which coincides with the dispatch of goods to the customers.Sales are net of returns; sales tax collected and tax collected at source are not included insales. Sales include excise duty and additional excise duty.

� Dividend on Investments is accounted in the year in which the right to receive is established.

� Income from services is recognized in accordance with the terms of the contract.

(j) Accounting for Tangible Fixed Assets:

Tangible Fixed Assets are stated at cost of acquisition and subsequent improvements thereto,and includes inward freight, duties and taxes and incidental expenses related to acquisition andimprovements. In respect of major projects involving construction, related pre-operationalexpenses form part of the value of assets capitalized. Expenses capitalized also include applicableborrowing costs till the date of commencement of production.

Assets acquired under hire purchase are capitalized to the extent of the principal value.

In case of Revaluation of Tangible Assets, the difference between the written up value of the Assetrevalued and the carrying amount in books are transferred to Revaluation reserve.


P A R T I C U L A R S 31.03.2003 31.03.2002

41


(k) Accounting for Effect in Foreign Exchange Rates:

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date oftransaction. Foreign currency monetary assets and liabilities on the balance sheet date aretranslated at year end exchange rates. Exchange difference arising on settlement of foreignexchange transactions and translation of monetary items is recognized as income or expense inthe year in which they arise.

(l) Accounting for Investments:

� Long term investments are valued at cost. Provision is made to recognize a diminutionother than temporary, in the value of each long-term investment.

� Current Investments are stated at lower of cost and quoted/fair value.

(m) Accounting for Employee benefits:

� Short term benefits

Short term employee benefits expected to be paid in exchange for the services rendered bythe employees is recognized during the period when the employee renders the services.

� Provident Fund

Provident fund is a defined contribution scheme as the Company pays fixed contribution atpre-determined rates. The obligation of the Company is limited to such fixed contribution.The contributions are charged to Profit & Loss Statement.

� Gratuity

The company provides for gratuity, a defined benefit retirement plan covering eligibleemployees. Liabilities with regard to the Gratuity are determined by actuarial valuation as atthe balance sheet date.

� Leave Encashment

The company provides for Leave Encashment, a defined benefit retirement plan coveringall the employees. Liabilities with regard to the Leave Encashment are determined byactuarial valuation as at the balance sheet date.

(n) Borrowing Cost:

Borrowing costs attributable to acquisition and construction of assets are capitalized as part ofthe cost of such asset up to the date when such asset is ready for its intended use. Borrowingcosts attributable to ‘Maturation stocks’ has been considered for valuation of semi-finished, asthese stocks require a substantial period of time to bring them to saleable condition. OtherBorrowing Costs are treated as revenue expenditure.

(o) Segment Reporting:

The company has considered business segment as reporting segment and accordingly identifiedLiquor, Glass, Contract and Systems as reporting business segments. Secondary segmentalreporting is performed on the basis of the geographical location of the customers and accordinglysegmental revenue is reported as revenue from India and from outside India.


P A R T I C U L A R S 31.03.2003 31.03.2002

42


(p) Related Party Transactions:

The related party relationships have been classified under the heads Subsidiary, Key ManagementPersonnel, relatives of Key Management Personnel and Entities over which Key ManagementPersonnel and / or their relatives are able to exercise significant influence

(q) Lease:

� Finance Lease Payments are apportioned between Finance Charges and reduction oflease liability as per the relevant agreements.

� Operating Lease payments are recognized in the Statement of Profit and Loss over thelease term.

(r) Earning per Share:

� Basic earning per share has been computed with reference to Weighted Average numberof Shares outstanding at monthly rests.

� Diluted Earnings per share has been computed based on the basic earnings adjusted forall dilutive potential equity shares.

(s) Accounting for Taxes on Income:

Tax expense comprises of current and deferred tax. Current income-tax is measured at theamount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961.Deferred income-tax reflects the impact of timing difference between taxable income andaccounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the Tax Laws and rates that have been enacted or substantivelyenacted at the Balance Sheet date. Deferred tax assets are recognized on brought forwardunabsorbed depreciation and brought forward losses only if there is a virtual certainty supportedby convincing evidence that such deferred tax assets can be realized against future taxableprofits. Deferred tax asset of earlier years is reassessed and recognized to the extent that it hasbecome reasonably certain that future taxable income will be available against which, suchdeferred tax assets can be realized.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right toset off the recognized amounts and there is an intention to settle the asset and the liability on anet basis. Deferred tax asset and deferred tax liabilities are offset when there is a legallyenforceable right to set off assets against liabilities representing current tax and where thedeferred tax assets and deferred tax liabilities relate to taxes on income levied by same governingtaxation laws.

Minimum Alternate Tax (MAT) Credit recognized as an asset only when and to the extent there isconvincing evidence that the company will pay normal income tax during the specified period.Such asset is reviewed at each balance sheet date and the carrying amount of MAT credit assetis written down to the extent there is no longer convincing evidence to the effect that the companywill pay normal income tax during the specified period.


P A R T I C U L A R S 31.03.2003 31.03.2002

43


(t) Impairment of Asset:

An asset is treated as impaired when the carrying cost of the assets exceeds its recoverablevalue. An impairment loss is charged to the Statement of Profit and Loss in the year in which theasset is identified as impaired, unless the asset is carried at revalued amount, in which case anyimpairment loss of a revalued asset is treated as a decrease in Revaluation Reserve. Theimpairment Loss recognized in prior accounting periods is reversed if there has been an increasein the estimate of recoverable value.

(u) Provision , Contingent Liabilities and Contingent Assets:

� A present obligation, as a result of past events which could be reliably estimated, is providedin the accounts, if it is probable that there will be an outflow of resources.

� Contingent liabilities are not recognized, but are disclosed at their estimate value by way ofnotes in the Financial Statements.

� Contingent Assets are neither recognized nor disclosed in the financial statements.

(v) Trade Receivables and Loans & Advances:

Trade receivables and Loans and Advances are stated after making adequate provision for thosedoubtful of recovery.

(w) Expenditure:

Expenses are accounted on accrual basis and provision is made for all known losses andliabilities.

(x) Excise Duty:

Excise duty recovered is included in the sale of products. Excise duty paid on dispatches and inrespect of finished goods lying at factory premises are shown separately as an item of exciseduty in the Statement of Profit and Loss and included in the valuation of Finished Goods.

26 The Financial statements for the year ended 31st March 2011 had been prepared as per the thenapplicable, Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised ScheduleVI under the Companies Act, 1956, the financial statements for the year ended 31st March 2012 areprepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassifiedto conform to this year’s classification.

27 Contingent Liabilities

1. Claims against the company not acknowledged as debts 26,983 17,742

2. Disputed Sales Tax not provided 4,427 2,108

3. Disputed Income Tax not provided 10,910 20,825

S.No. Particulars 2011-12 2010-11


P A R T I C U L A R S 31.03.2003 31.03.2002

44


28 Winding up petition filed by a party in the Previous Year is still pending adjudication before the KarnatakaHigh Court. The Company is of the view that the debt claimed to be due by the petitioner is time barredand hence the winding up petition is not maintainable.

29 CIF Value of ImportsRaw Materials 7,517 7,392

30 Consumption of Imported and Indigenous Materials and Components

Particulars In % In Value In % In Value

Imported 0.59% 4,009 1.02% 7,185Indigenous 99.41% 674,123 98.98% 699,344

Total Materials Consumed 678,132 706,529

31 Expenditure in Foreign CurrencyFor Travel 2,666 8,474For Consulting Services 5,856 2,718For Others 799 –

32 Earnings in Foreign Currency

FOB Value of Exports 2,859 3,952

Export of Service 3,577 1,351

33 Employee Benefits

As per Accounting Standard 15 “Employee Benefits”, the disclosures of Employee benefits as definedin the Accounting Standard are given below:

Defined Contribution Plan

Contribution to defined contribution plan recognized as an expense for the year.

Employer’s Contribution to Provident Fund 5,432 5,878

Defined Benefit Plan

In case of Gratuity, the present value of obligation is determined based on actuarial valuation using the

Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit ofemployee benefit entitlement and measures each unit separately to build up the final obligation. Theobligation for leave encashment is recognized in the same manner as gratuity. In line with the account-ing policy and as per the Accounting Standard – 15(R), the summarized position of post employment

benefits is recognized in the Statement of Profit & Loss and Balance Sheet as under:


P A R T I C U L A R S 2011-12 2010-11

45


A. Changes in the present value of the obligations

Present Value of defined benefit obligation 36,698 1,828 32,081 1,727

Interest Cost 2,936 146 2,566 138

Current service cost 734 36 (3,466) (552)

Add / (Less)

Benefits Paid (5,798) -

Actuarial loss/ (gain) on obligations (5,776) (255) 5,516 515

Present value of defined benefit obligation 28,793 1,755 36,698 1,828

Particulars Gratuity Leave Gratuity Leave(Unfunded) Encashment (Unfunded) Encashment

(Unfunded) (Unfunded)

2011-12 2010-11

C. Expenses recognized in the Statement of Profit & Loss


Interest cost 2936 146 2,566 138

Add / (Less)

Net Actuarial loss/(gain) recognized in the year (5,776) (254) 5,516 515

Net benefit expense (2,107) (72) 4,616 101

B. Amount recognized in Balance Sheet


Add / (Less)

Unrecognized past service cost - - - -

Unrecognized transitional liability - - - -

Unfunded net liability / (asset)recognized in Balance Sheet 28,793 1,755 36,698 1,828


Breakup of accrued liability

Non Current Liability 28,793 1,755 36,698 1,828


P A R T I C U L A R S 31.03.2003 31.03.2002

46


34 Segment ReportingSegment Reporting is presented in the Consolidated Financial Statements in terms of the Account-ing Standard -17 - Segment Reporting.

35 Related Party DisclosuresThe List of related parties as identified by the Management is as underSubsidiary :1. Khoday Properties Private LimitedKey Management Personnel :1. K L Ramachandra ( Non Executive Chairman)2. K L Srihari (Managing Director)3. K L A Padmanabhasha (Joint Managing Director)4. K L Swamy ( Executive Director)5. K S Giridhar (Non Executive Director)Relatives of Key Management Personnel :1. K H Gurunath2. K H Radheshyam3. K.H. Srinivas4. Estate of Late K L Narayanasa5. K P Ganashayam6. K R Dayanand7. K R Nithyanand8. K S Brijmohan

Notes forming part of Balance Sheet and Statement of Profit and Loss for the Year Ended 31.3.2012Significant Accounting Policies & Notes on Financial Statements

D. Principal Actuarial assumption at the Balance sheet date

Discount rate 8% 8% 8% 8%

Rate of escalation in salary 5% 5% 5% 5%

Mortality rate LIC 1994-96 LIC 1994-96 LIC 1994-96 LIC 1994-96Ultimate Ultimate Ultimate Ultimate

Expected Average Remaining 15 15 14 14working lives of Employees

Method used PUCM PUCM PUCM PUCM

Date of Actuarial Report 1st June 2012 1st June 2012 7th July 2011 7th July 2011



2011-12 2010-11

47


9. Rajalakshmi Srihari10. Gulab P Khoday11. Lalitha Swamy Khoday12. Padma N Khoday13. Meera Bai14. Dhanalakshmi

Entities over which Key Management Personnel and/or their relatives are able to exercise significantinfluence

1. K L Ramachandra – HUF2. K L A Padmanabhasha – HUF3. K L Srihari – HUF4. K L Swamy – HUF5. Acqua Borewells Private Limited6. Blendwell bottlers Private Limited7. Cassonava Distilleries Private Limited8. Coconut Groves & Holiday Resorts Pvt Limited9. Daatha Builders Private Limited10. Elkay Farm11. Elkay Tradings Corporation Private Limited12. Five Brothers Marketing Private Limited13. Forest Resort (Bandipur) Limited14. Gayathri Foundation15. Gayathri Holdings Private Limited16. General mining and minerals17. Hercules Construction Company Pvt Limited18. Honeywell Business Private Limited19. Ingo Property Developers Private Limited20. Jay Pee Shoes Private Limited21. K Lakshmana & Company22. Kankapura Trading Private Limited23. Khoday Brothers24. Khoday Breweries Limited25. Khoday Business Private Limited26. Khoday Control Systems Private Limited27. Khoday Eshawarsa and Sons28. Khoday Hotels Private Limited29. Khoday Industires (Kuppam) Private Limited30. Khoday Industries (Hyderabad) Private Limited31. Khoday Industries Pvt Limited32. Khodays Brothers International Limited


P A R T I C U L A R S 31.03.2003 31.03.2002

48


33. Khodays Technologies Limited34. Kilara Power Limited35. L.K Polyfibre Limited36. L.K Power Corporation Limited37. L.K Trust38. Lakshmi Estate39. Macdonald Tradings Private Limited40. Mc Donald Distilleries Private Limited41. Murugan enterprises42. National Distilleries Limited43. North India Distillers Private Limited44. Panchaganga Tradings Private Limited45. Panchakalyani Tradings Private Limited46. Parsan Holiday Resorts Private Limited47. Peterscot Tradings Private Limited48. Ram Mohan & Company Private Limited49. Ransh Coffee Estate50. River Resorts Limited51. Saraswathi Estate52. Sovereign Hotels53. Spring Borewells Company Private Limited54. Sree Gurunath Panels55. Sri Gurunath Tradings Private Limited56. Sri Narmada Distilleries Private Limited57. Surya Watch Industries Private Limited58. The Distillers Company Private Limited59. Thiruvonam Wines60. Tiger Breweries Limited61. Trishul Wineries & Distilleries Private Limited62. United Glass Bottles Manufacturing Company Limited63. Universal Business Concepts Private Limited64. Universal Trading Company65. Vaishnavi Communications Private Limited66. Vindhya Distilleries67. Vyjayanthi Tradings Private Limited68. Wesco Power Generation Limited69. West India Distilleries Private Limited70. Yajaman Enterprises


P A R T I C U L A R S 31.03.2003 31.03.2002

49


* - includes Personal guarantee obtained from entities over which key management personnel are able toexercise significant influence, Key management Personnel and their related parties.

NOTE: No Amount has been written back or written off during the year in respect of amounts due to or fromrelated parties.


A. Income

Sales - - - 22,866 - - - 11,838

B. Expenses

Purchase of Goods /Services - - - 1,347 - - - 9,252

Leasing arrangement / Rent - 90 990 2,005 - 90 990 1,456

Traveling,Sales promotionand others - - - 4,299 - - - 8,998

Sales of Fixed Assets - - - - - - - 193

Purchase of Fixed Assets - - - - - 171 - -

Closing Balance - 75,315 11,296 231,358 - 76,584 1,296 1,29,615(Credit) (Credit) (Debit) (Credit) (Credit) (Credit)

C. Investment in

Subsidiary 100 100 - - -

Partnership firm 614,844 - - - 616,102

D. Others - - - -

Guarantee andCollateral obtainedfrom* 1,070,362 - - 954,030 -

2011-12 2010-11

ParticularsSubsid-

iary

KeyManage-

mentPersonnel

Entities overwhich Key

ManagementPersonnel

and / or theirrelatives are

able toexercise

significantinfluence

Relatives ofKey

Manage-ment

personnel

Subsid-iary

KeyManage-

mentPersonnel


ManagementPersonnel


able toexercisesignificantinfluence

Relativesof Key

Manage-ment

personnel

50


38 Deferred TaxIn accordance with the Accounting Standard - 22 “Accounting for Taxes on Income” the company reviewedthe deferred tax assets and liabilities. As a measure of prudence, this net deferred tax asset has notbeen recognized in the financial statement. The details are as below:-

Deferred Tax - Liabilities:On Depreciation differences 7,350 9,132On Prepaid Licence Fees 7,150 10,570

TOTAL [A] 14,500 19,702

Deferred Tax – AssetsOn provision for Entry Tax / Sales Tax 160 73On Employees Benefits 20,998 19,312On unabsorbed tax losses and depreciation 41 60,897

TOTAL [B] 21,199 80,282

Net Deferred Tax Liabilities / [Assets] [A - B] (6,699) (60,580)

36 LeasesThe Company has taken certain assets on operating lease and certain assets on Finance Lease. Theamounts of further minimal lease payments are stated below:

Operating Lease:

Less than 1 year 1,562 662

Later than 1 year & not later than 5 years Nil Nil

Later than 5 years Nil Nil

Finance Lease:

Less than 1 year 7,216 6,935

Later than 1 year & not later than 5 years 11,240 8,019


Profit/(Loss) after Taxation as per Statement ofProfit and Loss A 158,028 (133,292)

Weighted Average Number of Equity Shares B 37,591,237 37,591,237

Earnings per Share - Basic (in Rs.) {A/B} 4.20 (3.55)

Earnings per Share - Diluted (in Rs.) {A/B} 4.20 (3.55)

Face Value per Share (in Rs.) 10 10

37 Earnings Per Share


P A R T I C U L A R S 2011-12 2010-11

51


39 During the year, the company has identified certain impairable fixed assets, being Building, CapitalWork-in-Progress(Civil), Office equipments and Plant & Machinery aggregating to Rs. 15,961 thousands,employed in the Paper division which have been written down to their recoverable amount of Rs. NIL.The Impairment Loss to the tune of Rs. 13,970 thousands has been adjusted against RevaluationReserve of the assets impaired and balance amounting to Rs. 1,991 thousands has been transferredto Profit and Loss account.

40 Payments made or provided for Directors

Director’s sitting fees 67 75

Managerial Remuneration * *

* Remuneration to Managerial personnel has not been provided

41 Part of Land belonging to the Distillery Division identified on a systematic basis has been revalued on2nd April 2009 and converted to stock in trade. The increase in the book value arising on such revaluationamounts to Rs. 15,988 thousands.

42 Income from operations includes Rs.40 Crores arising from a contract with a firm for making over therisk and rewards of a project.

43 Certain confirmation of balances for Trade Payables (Current and Non-Current), Trade Deposits andAdvances, Capital Advances, Deposits, Other Loans & Advances and Trade Receivables are awaited.The accounts’ reconciliations of some parties where confirmation have been received are in progress.Adjustments for differences, if any, arising out of such confirmations/ reconciliations would be made inthe accounts on receipt of such confirmations and reconciliations thereof. The Management is of theopinion that the impact of adjustments, if any, is not likely to be significant. In the opinion of the Managementall current assets, loans and advances including advances in capital accounts would be realized at thevalues at which these are stated in the accounts, in the ordinary course of business.

44 Fixed Assets includes a building with a WDV of Rs. 12,028 thousands (Previous Year: Rs. 12,661thousands) the title of which is under dispute before the Debt Recovery Tribunal / City Civil Court.Pending resolution of this dispute, the company continues to reckon the Building as an asset in itsfinancial statement.







P A R T I C U L A R S 2011-12 2010-11

52


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2012

P A R T I C U L A R S 2011-2012 2010-2011

A. Cash flow from Operating Activities

Net Profit Before Tax 192,626 (129,242)

Adjusted for:

Depreciation 49,631 48,562

Impairment of Assets 1,991 -

Diminution in value of Investments 54 -

Reduction in face value of Investment 5 -

Loss/(Profit) on sale Fixed Assets (495) (4,823)

Interest Income (1,005) (2,422)

Dividend Income (28) (19)

Interest & Bank Charges 225,142 215,406

Sundry Credit balance written back (8,208) (22,265)

Irrecoverable advances written off 19,086 1,211

Loss from Lakshmi Estate (Partnership Firm) 1,258 1,105

Unrealised Foreign Exchange Fluctuation 107 (5)

Operating Profit Before Working Capital Changes 480,164 107,508

Adjusted for:

Trade and other Receivables 1,890 81,626

Inventories (94,020) (25,792)

Trade and other payables (234,946) 293,885

Cash Generated from operations 153,088 457,227

Net prior year adjustments (250) (350)

Taxes paid (Current and relating to Previous years) (48) (9,833)

Net Cash from / (Used in) Operating Activities [A] 152,790 447,044

[Rupees in Thousands]

53


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2012

P A R T I C U L A R S 2011-2012 2010-2011


B. Cash Flow from Investing activities

Purchase of Fixed Assets (43,678) (99,142)

Sale of Fixed Assets 900 6,113

Capital Work In Progress (WIP) - 60,995

Purchase of Investments - (107)

Proceeds from sale of investment 3 -

Interest Income (Gross) 1,005 1,642

Dividend Income 28 19

Net Cash from / (Used in) Investing Activities [B] (41,742) (30,479)

C Cash flow from Financial Activities

Proceeds from Borrowings 149,281 5,504

Repayment of Borrowings (137,922) (161,683)

Interest & Bank Charges (225,142) (215,106)

Net Cash flow from/(Used in) Financing Activities [C] (213,781) (371,285)

Net Cash Flows during the year {A+B+C} (102,733) 45,280

Cash & Cash Equivalents(Opening Balance) 120,538 75,260

Cash & Cash Equivalents (Closing Balance) 17,805 120,538

Increase / (Decrease) in Cash & Cash equivalents (102,733) 45,278

Unrealised (Profit) / Loss on Foreign Currency held in Hand (USD) 25 1

Net Increase / (Decrease) in Cash & Cash equivalents (102,758) 45,280

54


I. Registration Details

Registration No. : State Code :

Balance Sheet DateDate Month Year

II CAPITAL RAISED DURING THE YEAR (Amount in Rs.thousands)

Public Issue Rights Issue

Bonus Issue Private Placement

III POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs.thousands)Total Liabilities Total Assets

A. Sources of Funds

Paid-up Capital Reserves & Surplus

Secured Loans Unsecured Loans Deferred Tax

B. Application of Funds

Net fixed Assets Capital Work In Progress

Investments Net Current Assets

Miscellaneous Expenditure Accumulated Losses

BALANCE SHEET ABSTRACT AND COMPANY’SGENERAL BUSINESS PROFILE

0 0 0 1 5 9 0

3 1 0 3 2 0 1 2

0 8

N I L

N I L

2 9 0 0 0 3 3

9 5 2 3

1 9 9 0 6 0

N I L

N I L

N I L

2 9 0 0 0 3 3

3 7 5 9 1 2

1 0 7 0 3 6 2

4 8 7 0 4 3

6 1 6 0 0 1

N I L

7 1 3 2 8 1

N I L7 5 3 1 5

55


IV PERFORMANCE OF THE COMPANY (Amount in Rs. Thousands)

Turnover Total Expenditure

Profit/(Loss) Before Tax Profit/(Loss) After Tax

Earning Per Share (Rs. Ps.) Earning Per Share (Rs. Ps.) Dividend Rate %

(Basic) (Diluted)

V GENERIC NAMES OF THREE PRINCIPAL PRODUCTS / SERVICES

Product Discription Item code No. (ITC Code)

I M L

P A P E R(Uncoated Paper & Paper Boards)

1 4 7 2 7 3 1

1 5 8 3 2 6

3 4 1 5 2 5 1

1 9 2 6 2 6

N I L4 . 2 0 4 . 2 0

2 2 0 8 2 0 . 0 2

4 8 0 2

K. L. RAMACHANDRA K. L. SRIHARIChairman Vice - Chairman &

Managing Director

Place: Bangalore R. VENKAT SUBRAMANYANDate : 22-09-2012 Company Secretary

56


Statement pursuant to Section 212 (1) (e) of the Companies Act, 1956, relating to SubsidiaryCompany.

1. Name of the Subsidiary Khoday Properties Private Limited

2. Date on which control was acquired 24th April 2008

3. Financial year ended 31st March 2012

4. Holding Company’s interest in the Subsidiary 10,000 Equity shares of Rs.10 each (100%)

5. Net aggregate amount of the losses of theSubsidiary not dealt with in the HoldingCompany’s accounts

a) For the financial year of the Rs. 39,999/-Subsidiary Company

b) For the previous financial years since it Rs. 26,16,301/-became a Subsidiary Company

6. Net aggregate amount of the Profits\Losses

of the Subsidiary dealt with in the HoldingCompany’s accounts

a) For the financial year of the NilSubsidiary Company

b) For the previous financial years since it Nil

became a Subsidiary Company

K. L. RAMACHANDRA K. L.SRIHARI R . VENKAT SUBRAMANYANChairman Vice - Chairman & Company Secretary

Managing Director

57


To the Board of Directors of Khoday India Limited

1. We have audited the attached Consolidated Balance Sheet of Khoday India Limited (‘theCompany’) and it’s Subsidiary (collectively called ‘the Group’) as at 31st March 2012, theConsolidated Statement of Profit and Loss and also the Consolidated Cash Flow Statement forthe year ended on that date, annexed thereto. These financial statements are the responsibility ofthe Company’s management. Our responsibility is to express an opinion on these financialstatements 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 aboutwhether the financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We believe thatour audit provides a reasonable basis for our opinion.

3. We report that the consolidated financial statements have been prepared by the Company’smanagement in accordance with the requirements of Accounting Standard (AS) 21, ConsolidatedFinancial Statements prescribed in the Companies (Accounting Standards) Rules, 2006.

4. In our opinion and to the best of our information and according to the explanations given to us, thesaid accounts give a true and fair view in conformity with the accounting principles generallyaccepted in India:

a. In the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31stMarch 2012,

b. In the case of the Consolidated Statement of Profit and Loss, of the profit of the Group for theyear ended on that date, and

c. In the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for theyear ended on that date.

REPORT OF THE AUDITOR

for Rangaraju & AssociatesChartered Accountants(Firm Regn No.6912S)

KRISHNAN RANGARAJUPlace : Bangalore PartnerDate : 22-09-2012 Membership No. 18457

58

KHODAY INDIA LIMITED (Consolidated Financial Statement)

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2012[Rupees in Thousands]

P A R T I C U L A R S NoteAs at As at

31-03-2012 31-03-2011

EQUITY AND LIABILITIES1. SHARE HOLDERS’ FUNDS

[a] Share Capital 1 375,912 375,912[b] Reserves & Surplus 2 710,624 572,160

1,086,536 948,0722. NON - CURRENT LIABILITIES

[a] Long - Term Borrowings 3 277,093 236,134[b] Other Long - Term Liabilities 4 10,129 13,825[c] Long - Term Provisions 5 30,548 38,526

317,770 288,4853. CURRENT LIABILITIES

[a] Short -Term Borrowings 6 709,086 738,685[b] Trade Payables 7 235,983 234,955[c] Other Current Liabilities 8 518,421 744,751[d] Short -Term Provisions 9 33,434 5,121

1,496,924 1,723,512

T O T A L :- 2,901,230 2,960,069

ASSETS1. NON-CURRENT ASSETS

[a] Fixed Assets 10 [i] Tangible Assets 487,043 513,305 [ii] Capital Work in Progress 9,523 11,134[b] Goodwill on Consolidation 818 818[c] Non - Current Investments 11 615,901 617,220[d] Long -Term Loans and Advances 12 71,489 106,991[e] Other Non-Current Assets 13 23,848 24,945

1,208,622 1,274,4132. CURRENT ASSETS

[a] Inventories 14 953,031 859,011[b] Trade Receivables 15 421,132 376,840[c] Cash & Cash Equivalents 16 17,965 120,699[d] Short -Term Loans & Advances 17 285,761 312,193[e] Other Current Assets 18 14,719 16,913

1,692,608 1,685,656

T O T A L :- 2,901,230 2,960,069

Significant Accounting Policies ANotes on Accounts 1 - 45The Notes referred to above form an integral part of the Balance Sheet




Place: Bangalore R. VENKAT SUBRAMANYAN KRISHNAN RANGARAJUDate : 22.09.2012 Company Secretary Partner


59


CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2012[Rupees in Thousands]

P A R T I C U L A R S NoteFor the year ended For the year ended

31-03-2012 31-03-2011

I N C O M E :Revenue from Operations 19 1,647,740 1,374,310Other Income 20 17,617 33,116

T O T A L R E V E N U E:- [A] 1,665,357 1,407,426

E X P E N S E S :-Cost of raw materials consumed and purchaseof goods for resale 21 678,132 706,529Changes in inventories of finished goods andWork-In-Progress 22 (104,524) (3,262)Employees benefit expenses 23 142,995 147,278Finance costs 24 225,142 215,406Depreciation: 10

Depreciation for the year 55,186 56,161Less: Transferred from Revaluation reserve 5,554 7,599

49,631 48,562Impairment loss for the year (Refer Note 40) 1,991 -Other expenses 25 479,403 422,750

T O T A L E X P E N S E S :- [B] 1,472,771 1,537,264

PROFIT / (LOSS) BEFORE TAXATION [A - B] 192,586 (129,838)

Provision for Taxation - Current Income Tax 34,300 -PROFIT/ (LOSS) AFTER TAXATION 158,286 (129,838)

Income Tax relating to earlier years - (Net) 48 3,700Prior year adjustments 250 350NET PROFIT/ (LOSS) FOR THE YEAR 157,988 (133,888)

Basic and Diluted Earnings Per Share (in Rupees) Refer Note-38 4.20 (3.56)Significant Accounting Policies ANotes on Accounts 1 - 45The Notes referred to above form an integral part of Statement of Profit & Loss

for and behalf of the Board As per our report of even date





60


Notes on Consolidated Balance Sheet and Statement of Profit & Loss for the Year Ended 31-03-2012[Rupees in Thousands]

P A R T I C U L A R SAs at As at

31-03-2012 31-03-2011

NOTE - 1SHARE CAPITAL

AUTHORISED4,50,00,000 (Previous year 4,50,00,000) Equity Shares of Rs.10/- each 450,000 450,000

ISSUED3,75,91,237 (Previous year 3,81,34,237) Equity Shares of Rs 10/- each 375,912 381,342

RECONCILIATION OF NUMBER OF SHARES [Rupees in Thousands]As at As at

31-03-12 31-03-11Balance as at the beginning of the year(Number of Shares: 3,81,34,237; PY-3,81,34,237) 381,342 381,342

LESS: Cancellation of Shares issued but not subscribedu/s 94 of the Companies Act 1956.(Number of Shares: 5,43,000; PY-Nil) 5,430 -

Balance as at the end of the year(Number of Shares: 3,75,91,237; PY-3,81,34,237) 375,912 381,342

SUBSCRIBED AND PAID UP3,75,91,237 (previous year: 3,75,91,237)Equity Shares of Rs.10 each fully paid up 375,912 375,912TERMS/RIGHTS ATTACHING TO EQUITY SHARESThe Company has only one class of equity shares havinga par value of Rs.10/- per share with voting rightsDETAILS OF SHAREHOLDERS HOLDING MORE THAN 5% SHARES IN THE COMPANY

Name of the Shareholder Number of Shares and % of holdingsAs at 31.03.2012 As at 31.03.2011

K.L. Ramachandra (H.U.F) 58,11,839 (15.46%) 58,11,839 (15.46%)K.L. Srihari (H.U.F) 58,15,795 (15.47%) 58,15,795 (15.47%)K.L.A. Padmanabhasa (H.U.F) 58,11,580 (15.45%) 58,11,580 (15.45%)K.L. Swamy (H.U.F) 58,01,122 (15.43%) 58,01,122 (15.43%)Gayathri Holdings Pvt Ltd 23,42,150 (6.23%) 23,42,150 (6.23%)

As per the records of the Company, including its register of shareholders/members,the above shareholding represents both legal and beneficial ownership of shares

T o t a l . . . 375,912 375,912

NOTE - 2RESERVES AND SURPLUS

CAPITAL RESERVEAs per last Balance Sheet { A } 216,186 216,186CAPITAL REDEMPTION RESERVEAs per last Balance Sheet { B } 531 531SHARE PREMIUM ACCOUNTAs per last Balance Sheet { C } 115,463 115,463GENERAL RESERVEAs per last Balance Sheet { D } 184,379 184,379

61


NOTE - 3 : LONG - TERM BORROWINGS:

SECURED LOANS :a. Term Loans

i - From Banks 342,820 251,249

ii - From Others – 1,669

Less: Current Maturities of long term debt (Refer note 8a) 152,282 101,387

{ A } 190,538 151,531

b. Long Term Maturities of Finance Lease Obligations - Hire Purchase 18,456 14,954Less: Current maturities of Finance Lease Obligations (Refer note 8b) 7,216 6,935

{ B } 11,240 8,019UNSECURED:a. Loans & Advances from Related Parties { C } 75,315 76,584

T o t a l . . . { A + B + C } 277,093 236,134

(a) (i) Term Loans from banks include

REVALUATION RESERVEAs per last Balance Sheet 141,392 148,991Less : Transferred to Profit & Loss Statement 5,554 7,599Less : Transferred on Account of Impairment of Assets 13,970 –

As at the end of the financial year { E } 121,868 141,392

SURPLUS IN THE STATEMENT OF PROFIT & LOSS:As per last Balance Sheet (85,791) 48,097Add: Profit /(Loss ) for the year 157,988 (133,888)As at the end of the financial year { F } 72,197 (85,791)

T o t a l . . . { A + B + C + D +E + F } 710,624 572,160


REPAYMENT (If any)

(1) Rs. 131,491 thousands (PY: Rs. 219,384 thousands)secured by hypothecation of Maturation stock andfurther secured by first charge by way of mortgage ofLand & Building of the Company, Residential Propertyof some Directors, immovable properties of a trust inwhich some Directors are Trustees, and further securedby personal guarantee of some of the Directors & eightShareholders and Corporate Guarantee of Firms andTrust in which some of the Directors are Partners andTrustees respectively.

(2) Rs.188,581 thousands (PY: Rs. 24,211thousands) secured by Pari Passu 1st Charge onMaturation stock and further secured by first charge

Repayable in twelvei n s t a l m e n t scommencing fromApril 2012 along withinterest at 14.75% p.a(BPLR + 2.25%)

Repyable in 36i n s t a l m e n t scommencing from

Interest of Feb 12'and Mar 12' Amount-ing to Rs 41.70Lakhs have beensubsequently paid inthe month of April2012.(PY: NIL)

Interest of Feb 12'and Mar 12' Amount-ing to Rs. 42.42



31-03-2012 31-03-2011

62



REPAYMENT (If any)

(b) Long Term Maturities of Finance Lease Obligations include

Rs. 18,456 thousands (PY: Rs.14,953thousands) secured by hypothecation of Cars ofthe company .

Payments of EquatedMonthly Instalmentscommencing from themonth subsequent totaking the lease.

-NIL-(PY: NIL)

a. Unsecured Loans & Advances from Related parties

Rs. 75,315 thousands (PY: Rs. 76,583thousands) taken from Directors

Repayable aftertwelve months fromApril 2012 withoutinterest.

-NIL-(PY: NIL)

NOTE - 4 : OTHER LONG -TERM LIABILITIES:

a. Trade payables* 9,776 11,973

b. Trade Deposits & Advance from Customers 353 1,852

T o t a l . . . 10,129 13,825

*As per the information available with the company, there are no outstandingdues under Long Term Trade payables that are required to be furnished undersection 22 of Micro, Small and Medium Enterprise Development Act, 2006.

by way of mortgage of Land and Building of theCompany and immovable properties of firms in whichsome Directors are Partners, and further secured bypersonal guarantee of some Directors & eight shareholdersand Corporate Guarantee of Firms and Trust in whichsome Directors are Partners and Trustees respectively.

(3) Rs. 19,455 thousands (PY: NIL) secured byhypothecation of Cars of the Company.

(4) Rs. 3,293 thousands (PY: 7,654 thousands) issecured by a property of the Company and furthersecured by Properties of a Private Limited, Trust &Firm in which some Directors are Directors/Trustees/Partners are interested.

March 2013 alongwith interest at 14%p.a (BR + 4.5% +0.5%)

Repayable in 36I n s t a l m e n t scommencing fromApril 2012 along withinterest at 25% p.a

Repayable on 31stMarch 2012 alongwith interest at17.50% p.a

lakhs have beensubsequently paid inthe month of April2012.(PY: NIL)

-NIL-(PY: NIL)

Instalment for thequarter ended March2012 amounting toRs.32.92 lakhs hasbeen subsequentlypaid in the month ofMay 2012.(PY: NIL)



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63


NOTE - 5 : LONG -TERM PROVISIONS:a. Provisions for Employee Benefits 30,548 38,526

T o t a l . . . 30,548 38,526

NOTE - 6 : SHORT -TERM BORROWINGS:SECURED LOANS:a. Loans repayable on demand

From Banks- Cash Credit 709,086 738,685

T o t a l . . . 709,086 738,685

a. Loans Repayable on demand (cash credit) from Banks is secured by

SECURED BY DEFAULT (If any)

(1) First charge by way of Hypothecation of stock of Raw Materials, SemiFinished, Finished Goods, other packing materials, Bills Receivables, BookDebts, other movable properties and certain Fixed Deposits of Distillery Divisionon Pari Passu basis.(2) Equitable mortgage of properties of the company, of a private limited company,trust and firms in which some of the Directors are interested/ trustees/ partners.(3) Further secured by the Immovable property of some of the Directors and theirrelatives.(4) By personal guarantee of some of the Directors, Shareholders and theirrelatives and corporate guarantees of some entities in which directors are interested.

-NIL-(PY: NIL)



31-03-2012 31-03-2011

NOTE - 7 : TRADE PAYABLES:a. Micro, Small and Medium Enterprises 4,517 8,074b. Others 231,466 226,881

T o t a l . . . 235,983 234,955

NOTE - 8 : OTHER CURRENT LIABILITIES:a. Current maturities of Long Term Debt (Refer Note 3a) 152,282 101,386b. Current maturities of Finance Lease Obligations (Refer Note 3b) 7,216 6,935c. Interest Accrued and Due on Borrowings - 6,488d. Unpaid Dividends 657 659e. Employee Benefits payable 57,412 25,753f. Trade Deposits and Advance from Customers 266,049 242,230g. Statutory Dues payable 11,546 14,941h. Dues to Related Parties 18,336 330,761i. Other Payables 4,923 15,598

T o t a l . . . 518,421 744,751

NOTE - 9 : SHORT -TERM PROVISIONS:a. For Excise Duty 5,925 5,121b. For Income Tax ( Net of Advance Tax Rs 34,891 thousands, PY: Nil ) 27,509 -

T o t a l . . . 33,434 5,121

64




31-03-2012 31-03-2011

NOTE - 10 :

FIXED ASSETS SCHEDULE AS ON 31-03-2012

SLPARTICULARSNo.

GROSS BLOCK DEPRECIATION NET BLOCK

1 L a n d 24 ,105 24 ,105 24 ,105 24 ,105

2 Buildings 429 ,745 429 ,745 168 ,120 15 ,558 3 8 0 184 ,058 245 ,687 261 ,625

3 Plant & Machinery 556 ,650 24 ,901 581 ,551 449 ,897 15 ,901 13 ,845 479 ,642 101 ,908 106 ,753

4 Furniture & Fixtures 389 ,604 3 ,356 392 ,960 297 ,739 14 ,251 1 2 5 312 ,116 80 ,844 91 ,864Other Office Equipments

5 Vehicles 134 ,671 15 ,421 5 ,083 145 ,008 105 ,714 9 , 4 7 5 4 , 6 7 8 1 1 0 , 5 1 1 3 4 , 4 9 8 2 8 , 9 5 7

Tota l 1 ,534 ,775 43 ,678 5 ,083 1,573,369 1,021,469 55 ,186 4 ,678 3 8 0 13 ,970 1,086,327 487 ,043 513 ,305

Previous Year 1 ,464,222 99 ,142 28 ,590 1,534,775 992 ,607 56 ,161 27 ,299 – – 1,021,469 513 ,305 471 ,615

6 Capital Work-in-Progress 11 ,134 – – 11 ,134 – – – 1 ,611 – 1 ,611 9 ,523 11 ,134

7 Previous Year 72 ,129 2 ,643 63 ,638 11 ,134 – – – – – – 11 ,134 72 ,129

As on01.04.2011

Additions As on01.04.2011

For theyear

As on31.03.2012

As on31.03.2012

As on31.03.2012

Withdrawn

Sale /Transfer

As on31.03.2011

Impairment losscharged to

Profit &Loss

RevaluatonReserve

NOTE - 11 :NON-CURRENT INVESTMENTS

(Long - Term Investments)A. TRADE INVESTMENTSi. EQUITY INSTRUMENTS (QUOTED) Face Value Number of SharesParticulars of each share 2011-12 2010-11

Excell Glass Limited 1 500 500 1 5United Spirits ltd 10 282 282 2 2United Breweries Limited 1 230 230 5 5United Breweries (Holdings) Ltd. 10 562 562 3 3

Sub Total .... { A } 10 15


Shreno Limited 100 33 33 4 4Arthos Breweries Limited 10 225 225 2 2Castle Breweries Limited 10 300 300 3 3Pilsener Breweries Limited 10 100 100 2 2Punjab Breweries Limited 10 250 250 3 3Himalaya Distilleries Ltd 10 12500 12500 125 125United Glass Bottles Mfg Co Ltd 10 13650 13650 137 137Khoday Industries Pvt Ltd 1000 480 480 480 480Panchakala Malt Limited 10 100 100 1 1

Sub Total .... { B } 757 757

65




31-03-2012 31-03-2011

B. NON - TRADE INVESTMENTS

i. EQUITY INSTRUMENTS (QUOTED) Face Value Number of Shares


Gulf Oil Corporation Limited 10 12635 12635 114 114

Sub Total .... { C } 114 114

ii. EQUITY INSTRUMENTS (UNQUOTED) Face Value


Graviss Hospitality Limited 2 4500 4500 5 5

Kasturi Foods & Chemicals Limited 10 5000 5000 50 50

MOI Engineering Limited 10 1400 1400 10 10

Metal Box India Limited 10 365 365 4 4

Modern Syntex (India) Ltd 10 400 400 12 12

Sub Total .... { D } 81 81

iii. INVESTMENT IN PARTNERSHIP FIRMLakshmi Estate 614,844 616,102

Name of the Partners Share of Partners Total Capital (Rs.In thousands)

2011-12 2010-11 2011-12 2010-11Khoday India Limited 75.00% 75.00% 614,844 616,102

K.L. Ramachandra - HUF 6.25% 6.25% 50,462 50,567

K.L. Srihari - HUF 6.25% 6.25% 50,462 50,567

K.L.A. Padmanabhasa - HUF 6.25% 6.25% 50,462 50,567

K.L. Swamy - HUF 6.25% 6.25% 53,388 53,592

T o t a l { E } 614,844 616,102

iv. OTHERSInvestment in Government Securities 153 155

T o t a l { F } 153 155

TOTAL OF NON-CURRENT INVESTMENTS {A to F} 615,959 617,224

Less: Aggregate Provision for Diminution in the Value of Non-Current Investments 58 4

TOTAL NON - CURRENT INVESTMENTS ( Net of Provision) 615,901 617,220

AGGREGATE AMOUNT OF QUOTED INVESTMENTS 124 128

AGGREGATE MARKET VALUE OF QUOTED INVESTMENTS 1,284 1,512

AGGREGATE AMOUNT OF UNQUOTED INVESTMENTS 615,835 617,096

66




31-03-2012 31-03-2011

NOTE - 12: LONG - TERM LOANS AND ADVANCES

(Unsecured & Considered Good)a. Capital Advances 34,808 55,137b. Security Deposits 21,111 26,184c. Advance Income Tax (Net of Provisions: CY - NIL, PY - Rs 28,100 thousands) - 5,857d. Other Loans and Advances - Trade 15,570 19,813

T o t a l . . . 71,489 106,991

NOTE - 13: OTHER NON-CURRENT ASSETS

(Unsecured & Considered Good)a. Trade Receivables 14,398 15,899b. Earnest Money Deposits 9,450 9,046(Unsecured & Considered Doubtful)a. Trade Receivables - 928Less: Provision for Doubtful Debts - (928)

T o t a l . . 23,848 24,945

NOTE - 14 : INVENTORIES

Valued at lower of Cost and NRVa. Raw Materials 103,694 115,154b. Work-in-Progress 727,741 645,168c. Finished Goods 73,664 51,714d. Stock -in-trade 505 1,267e. Stores, Spares and Packing Material 22,127 20,408f. Other stock in trade - Land 25,300 25,300

T o t a l . . 953,031 859,011

NOTE - 15 : TRADE RECEIVABLES


a. Outstanding for a period exceeding six monthsfrom the date they are due for payment 92,081 95,250

b. Others 252,677 281,590

c. Dues from Related Parties 76,374 -

T o t a l . . 421,132 376,840

67




31-03-2012 31-03-2011

NOTE - 16: CASH AND CASH EQUIVALENTS

a. Balance with Banks

- In Current Accounts 5,109 17,702

- In Deposit Accounts as Margin Money 9,055 51,944

- In Unpaid Dividend Account 657 659

b. Cheques and Drafts on Hand 1,062 3,647

c. Cash on hand 2,082 46,747

T o t a l . . 17,965 120,699

NOTE - 17: SHORT - TERM LOANS AND ADVANCES


a. Lease Deposit with Related Party* 123,626 200,000

b. Dues from related parties 48,398 -

c. Loans and Advances to Employees 4,706 4,394

d. Trade Advances 76,979 81,433

e. Advance for Option of Land Development 10,000 -

f. Balances with Govt. Authorities 22,052 26,366

* Lease Deposit with a firm in which some of the Directors are partners.

T o t a l . . 285,761 312,193

NOTE - 18: OTHER CURRENT ASSETS

a. Interest Accrued on Fixed Deposits 1,717 2,073

b. Prepaid Expenses 12,734 14,572

c. Preliminery Expenses to the extent not written off 268 268

T o t a l . . 14,719 16,913

NOTE - 19 : REVENUE FROM OPERATIONS

Sale of IML 2,962,280 3,174,584

Sale of Glass 472 20,717

Contract Income 406,916 6,303

Sale of Services 3,577 1,351

Sales - Others* 42,006 27,046

3,415,251 3,230,001Less: Excise Duty 1,767,511 1,855,691*Includes sale of denatured spirits, flavouring materials and refractories.

T o t a l . . 1,647,740 1,374,310

68




31-03-2012 31-03-2011

NOTE - 20 : OTHER INCOME

Interest Income from Fixed deposits 1,005 2,422

Dividend Income from Non - Current investments 28 19

Rebate Income received 5,200 -

Miscellaneous Income 2,681 3,534

Profit on Sale of Fixed assets 495 4,823

Profit on Foreign Currency Transactions & Translation - 53

Sundry Credit balances Written Back 8,208 22,265

T o t a l . . 17,617 33,116

NOTE - 21 : COST OF RAW MATERIALS CONSUMED AND

GOODS PURCHASED FOR RESALE

OPENING STOCK


Power and Fuel 141 4,781


Less : Obsolete Stock of Raw Material written off 25,709 -

T o t a l . . { A } 111,120 114,167

ADD: PURCHASES




T o t a l . . { B } 693,338 729,192

LESS: CLOSING STOCKRaw Materials and goods purchased for resale 104,199 116,421Power and Fuel 1,232 141Stores,Spares and Packing Materials 20,896 20,268

T o t a l . . { C } 126,326 136,829

Consumption of Raw Materials and Purchased for resale. [A+B-C]




Cost of Raw Material Consumed and goods purchased for resale 678,132 706,529

69




31-03-2012 31-03-2011

NOTE - 22 : CHANGES IN INVENTORIES OF FINISHED GOODS AND WORK-IN-PROGRESS

CLOSING STOCK :-Finished Goods 73,664 51,715Work-In-Progress 727,741 645,167

T o t a l . . { A } 801,406 696,882

OPENING STOCK :-Finished Goods 51,715 82,868Work-In-Progress 645,167 610,752

T o t a l . . { B } 696,882 693,620

Increase / (Decrease) in Stock [A - B] 104,524 3,262

NOTE - 23 : EMPLOYEES BENEFITS

Salaries, Wages, Gratuity, Bonus and leave encashment 121,438 123,348

Staff Welfare Expenses 14,691 14,985Contribution to P.F. and Other Funds 6,866 7,945

T o t a l . . 142,995 147,278

NOTE - 24 : FINANCE COST

Interest On Term Loan 47,994 53,726

On Others 172,131 155,420Bank Charges 5,017 6,260

T o t a l . . 225,142 215,406

70




31-03-2012 31-03-2011

NOTE - 25 : OTHER EXPENSES

Manufacturing Expenses:Power & Lighting Charges 20,557 30,452Repairs & Maintenance : - Buildings 1,701 3,267 - Plant & Machinery 14,629 11,957 - Electrical 1,944 1,701

T o t a l { A } 38,831 47,377

Administrative and Selling Expenses:Rent 14,289 12,919Rates & Taxes 39,400 34,884Insurance 2,479 2,034Repairs & Maintenance : - Vehicles 13,690 14,994 - Others 5,041 4,650Freight, Octroi & Storage Expenses 62,518 61,351Lease Rent 4,609 2,118Travelling & Conveyance 32,313 34,175Printing & Stationery 3,298 3,682Telephone, Postage & Telegram 5,935 6,806Books & Periodicals 323 223Security Service Charges 7,460 7,647Legal & Professional Charges 42,752 39,755Directors Sitting Fees 67 75Payments to Auditor - As Auditor 562 562Cost Audit Fees 20 20Donation 2,773 1,596Commission & Discount on Sales 54,475 49,916Sales Promotion 74,609 72,728Advertisement 9,151 4,024Service Charges 4,762 5,079Miscellaneous Expenses 13,394 13,819Share of Loss in Partnership Firm 1,258 1,105Loss on Foreign Currency Transactions & Translation 548 -Obsolete Stock written off 25,709 -Provision for Diminution on Non-Current Investments 54 -Irrecoverable advances written off 19,086 1,211

T o t a l { B } 440,572 375,373

T o t a l . . { A+ B } 479,403 422,750

71


A. Significant Accounting Policies

(a) Accounting Convention:

The Financial Statements have been prepared under the Historical Cost Convention except forcertain assets which are revalued in accordance with the Generally Accepted Accounting Practicesin India.

(b) Basis of Preparation:

The financial statements have been prepared to comply with material aspects regarding allaccounting standards notified by Companies (Accounting Standard) rules, 2006 and the relevantprovisions of the Companies Act, 1956.

(c) Estimates and Assumptions:

Preparation of Financial Statements require management to make estimates and assumptionsthat affect the reported amounts of assets and liabilities, and disclosure of contingent liabilitiesat the date of the Balance Sheet and the reported amounts of income and expenses during thereporting period. Examples include provision for doubtful debts, useful life of assets, etc. Actualresults may differ from these estimates.

(d) Inventories:

Inventory of raw material, stores, spares, materials in transit, work in progress, finished goods –both manufactured and traded are valued at lower of cost and net realizable value.

The cost is calculated on First-in First-Out basis and comprises of expenditure incurred in thenormal course of business in bringing such inventory to its present location, and includes theborrowing cost that are attributable to maturation stocks which has been considered for valuationof semifinished goods wherever applicable, and allocation of appropriate overheads based onnormal level of activity.

Stock in Trade – Land is valued at the value on the date of conversion from capital asset to stockin Trade or the current market value, whichever is lower.

(e) Cash Flow Statements:

Cash Flow Statement has been prepared under “Indirect Method” as prescribed by AccountingStandard–3. Cash and cash equivalents comprise Cash in Hand, Current and other accounts(Including Fixed Deposit) held with Banks.

(f) Events occurring after the Balance Sheet Date:

Assets and Liabilities are adjusted for events occurring after the balance sheet date that provideadditional evidence to assist the estimation of amounts related to conditions existing at thebalance sheet date.

(g) Net Profit or Loss for the period, prior period Items and Changes in Accounting Policies:

� Net Profit for the period:

All the items of income and expenses in the period are included in the determination of net

Notes forming part of Balance Sheet and Statement of Profit and Loss for the Year Ended 31.3.2012Significant Accounting Policies & Notes on Consolidated Financial Statements [Rupees in Thousands]

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Profit / Loss for the period, unless specifically mentioned elsewhere in the financialstatements or is required by an Accounting Standard.

� Prior Period item:

Income / Expenditure are disclosed in Prior Year Adjustments only when the value exceedsRupees One Lakh in each case.

� Extra Ordinary items:

Extraordinary items, if any are disclosed separately in accordance with AccountingStandard - 5.

(h) Depreciation Accounting:

Depreciation has been provided on fixed assets at the rates prescribed in Schedule XIV to theCompanies Act 1956, on written down value method except for Plant & Machinery and Building ofDistillery Division acquired prior to 31st March 1999 and the assets of Paper Division where thedepreciation has been provided on straight line basis. Depreciation on Oakwood barrels hasbeen provided on written down value method @ 20%, based on technical evaluation. Depreciationis provided on pro-rata basis on additions and deletions from the date the assets were put to useand up to the date of sale / transfer, respectively. Plant & Machinery costing Rs.5,000/- and less isdepreciated in full.

Certain Fixed Assets has been revalued during the year 1998-99. The depreciation charged onsuch Revalued assets is transferred from Revaluation reserve to the Profit & Loss Account.

(i) Revenue Recognition:

� Sales are recognized when the significant risks and rewards of ownership of the goodshave passed to the buyer which coincides with the dispatch of goods to the customers.Sales are net of returns; sales tax collected and tax collected at source are not included insales. Sales include excise duty and additional excise duty.

� Dividend on Investments is accounted in the year in which the right to receive is established.

� Income from services is recognized in accordance with the terms of the contract.

(j) Accounting for Tangible Fixed Assets:

Tangible Fixed Assets are stated at cost of acquisition and subsequent improvements thereto,and includes inward freight, duties and taxes and incidental expenses related to acquisition andimprovements. In respect of major projects involving construction, related pre-operationalexpenses form part of the value of assets capitalized. Expenses capitalized also include applicableborrowing costs till the date of commencement of production.

Assets acquired under hire purchase are capitalized to the extent of the principal value.

In case of Revaluation of Tangible Assets, the difference between the written up value of the Assetrevalued and the carrying amount in books are transferred to Revaluation reserve.


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(k) Accounting for Effect in Foreign Exchange Rates:

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date oftransaction. Foreign currency monetary assets and liabilities on the balance sheet date aretranslated at year end exchange rates. Exchange difference arising on settlement of foreignexchange transactions and translation of monetary items is recognized as income or expense inthe year in which they arise.

(l) Accounting for Investments:

� Long term investments are valued at cost. Provision is made to recognize a diminutionother than temporary, in the value of each long-term investment.

� Current Investments are stated at lower of cost and quoted/fair value.

(m) Accounting for Employee benefits:

� Short term benefits

Short term employee benefits expected to be paid in exchange for the services rendered bythe employees is recognized during the period when the employee renders the services.

� Provident Fund

Provident fund is a defined contribution scheme as the Company pays fixed contribution atpre-determined rates. The obligation of the Company is limited to such fixed contribution.The contributions are charged to Profit & Loss Statement.

� Gratuity

The company provides for gratuity, a defined benefit retirement plan covering eligibleemployees. Liabilities with regard to the Gratuity are determined by actuarial valuation as atthe balance sheet date.

� Leave Encashment

The company provides for Leave Encashment, a defined benefit retirement plan coveringall the employees. Liabilities with regard to the Leave Encashment are determined byactuarial valuation as at the balance sheet date.

(n) Borrowing Cost:

Borrowing costs attributable to acquisition and construction of assets are capitalized as part ofthe cost of such asset up to the date when such asset is ready for its intended use. Borrowingcosts attributable to ‘Maturation stocks’ has been considered for valuation of semi-finished, asthese stocks require a substantial period of time to bring them to saleable condition. OtherBorrowing Costs are treated as revenue expenditure.

(o) Segment Reporting:

The company has considered business segment as reporting segment and accordingly identifiedLiquor, Glass, Contract and Systems as reporting business segments. Secondary segmentalreporting is performed on the basis of the geographical location of the customers and accordinglysegmental revenue is reported as revenue from India and from outside India.


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(p) Related Party Transactions:

The related party relationships have been classified under the heads Subsidiary, Key ManagementPersonnel, relatives of Key Management Personnel and Entities over which Key ManagementPersonnel and / or their relatives are able to exercise significant influence

(q) Lease:

� Finance Lease Payments are apportioned between Finance Charges and reduction oflease liability as per the relevant agreements.

� Operating Lease payments are recognized in the Statement of Profit and Loss over thelease term.

(r) Earning per Share:

� Basic earning per share has been computed with reference to Weighted Average numberof Shares outstanding at monthly rests.

� Diluted Earnings per share has been computed based on the basic earnings adjusted forall dilutive potential equity shares.

(s) Principles of consolidation:

The consolidated financial statements include the financial statements of Khoday India Limitedand it’s only wholly owned Indian subsidiary, M/s Khoday Properties Private Limited. The financialstatements of Khoday India Limited and its Subsidiary have been combined on a line-by-linebasis by adding together the book values of all items of assets, liabilities, incomes and expensesafter eliminating all inter company balances/transactions and resulting unrealized gain/lossfrom the date the parent company acquired control of the subsidiary. The consolidated financialstatements are prepared using uniform accounting policies for similar transactions and otherevents in similar circumstances.

(t) Accounting for Taxes on Income:

Tax expense comprises of current and deferred tax. Current income-tax is measured at theamount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961.Deferred income-tax reflects the impact of timing difference between taxable income andaccounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the Tax Laws and rates that have been enacted or substantivelyenacted at the Balance Sheet date. Deferred tax assets are recognized on brought forwardunabsorbed depreciation and brought forward losses only if there is a virtual certainty supportedby convincing evidence that such deferred tax assets can be realized against future taxableprofits. Deferred tax asset of earlier years is reassessed and recognized to the extent that it hasbecome reasonably certain that future taxable income will be available against which, suchdeferred tax assets can be realized.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right toset off the recognized amounts and there is an intention to settle the asset and the liability on anet basis. Deferred tax asset and deferred tax liabilities are offset when there is a legally


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enforceable right to set off assets against liabilities representing current tax and where thedeferred tax assets and deferred tax liabilities relate to taxes on income levied by same governingtaxation laws.

Minimum Alternate Tax (MAT) Credit recognized as an asset only when and to the extent there isconvincing evidence that the company will pay normal income tax during the specified period.Such asset is reviewed at each balance sheet date and the carrying amount of MAT credit assetis written down to the extent there is no longer convincing evidence to the effect that the companywill pay normal income tax during the specified period.

(u) Impairment of Asset:

An asset is treated as impaired when the carrying cost of the assets exceeds its recoverablevalue. An impairment loss is charged to the Profit and Loss Account in the year in which the assetis identified as impaired, unless the asset is carried at revalued amount, in which case anyimpairment loss of a revalued asset is treated as a decrease in Revaluation Reserve. Theimpairment Loss recognized in prior accounting periods is reversed if there has been an increasein the estimate of recoverable value.

(v) Provision , Contingent Liabilities and Contingent Assets:

� A present obligation, as a result of past events which could be reliably estimated, is providedin the accounts, if it is probable that there will be an outflow of resources.

� Contingent liabilities are not recognized, but are disclosed at their estimate value by way ofnotes in the Financial Statements.

� Contingent Assets are neither recognized nor disclosed in the financial statements.

(w) Trade Receivables and Loans & Advances:

Trade receivables and Loans and Advances are stated after making adequate provision for thosedoubtful of recovery.

(x) Expenditure:

Expenses are accounted on accrual basis and provision is made for all known losses andliabilities.

(y) Excise Duty:

Excise duty recovered is included in the sale of products. Excise duty paid on dispatches and inrespect of finished goods lying at factory premises are shown separately as an item of exciseduty in the Statement of Profit and Loss and included in the valuation of Finished Goods.

27 The Financial statements for the year ended 31st March 2011 had been prepared as per the thenapplicable, Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised ScheduleVI under the Companies Act, 1956, the financial statements for the year ended 31st March 2012 areprepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassifiedto conform to this year’s classification.


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1. Claims against the company not acknowledged as debts 26,983 17,7422. Disputed Sales Tax not provided 4,427 2,1083. Disputed Income Tax not provided 10,910 20,825

S.No. Particulars 2011-12 2010-11

29 Winding up petition filed by a party in the Previous Year is still pending adjudication before the KarnatakaHigh Court. The Company is of the view that the debt claimed to be due by the petitioner is time barredand hence the winding up petition is not maintainable.

30 CIF Value of ImportsRaw Materials 7,517 7,392

31 Consumption of Imported and Indigenous Materials and Components

Particulars In % In Value In % In Value

Imported 0.59% 4,009 1.02% 7,185Indigenous 99.41% 674,123 98.98% 699,344

Total Materials Consumed 678,132 706,529

32 Expenditure in Foreign CurrencyFor Travel 2,666 8,474For Consulting Services 5,856 2,718For Others 799 –

33 Earnings in Foreign Currency

FOB Value of Exports 2,859 3,952

Export of Service 3,577 1,351

34 Employee BenefitsAs per Accounting Standard 15 “Employee Benefits”, the disclosures of Employee benefits as definedin the Accounting Standard are given below:

Defined Contribution PlanContribution to defined contribution plan recognized as an expense for the year.

Employer’s Contribution to Provident Fund 5,432 5,878

Defined Benefit Plan

In case of Gratuity, the present value of obligation is determined based on actuarial valuation using theProjected Unit Credit Method, which recognizes each period of service as giving rise to additional unitof employee benefit entitlement and measures each unit separately to build up the final obligation. Theobligation for leave encashment is recognized in the same manner as gratuity. In line with the accountingpolicy and as per the Accounting Standard – 15(R), the summarized position of post employmentbenefits is recognized in the Statement of Profit & Loss and Balance Sheet as under:

28 Contingent Liabilities


P A R T I C U L A R S 31.03.2003 31.03.2002

77



P A R T I C U L A R S 31.03.2003 31.03.2002

A. Changes in the present value of the obligations

Present Value of defined benefit obligation 36,698 1,828 32,081 1,727

Interest Cost 2,936 146 2,566 138


Add / (Less)

Benefits Paid (5,798) -

Actuarial loss/(gain) on obligations (5,776) (255) 5,516 515




2011-12 2010-11

B. Amount recognized in Balance Sheet


Add / (Less)

Unrecognized past service cost - - - -

Unrecognized transitional liability - - - -

Unfunded net liability / (asset)recognized in Balance Sheet 28,793 1,755 36,698 1,828


Breakup of accrued liability

Non Current Liability 28,793 1,755 36,698 1,828

C. Expenses recognized in the Statement of Profit & Loss


Interest cost 2936 146 2,566 138

Add / (Less)

Net Actuarial loss/(gain) recognized in the year (5,776) (254) 5,516 515

Net benefit expense (2,107) (72) 4,616 101

78



P A R T I C U L A R S 31.03.2003 31.03.2002

Discount rate 8% 8% 8% 8%

Rate of escalation in salary 5% 5% 5% 5%

Mortality rate LIC 1994-96 LIC 1994-96 LIC 1994-96 LIC 1994-96Ultimate Ultimate Ultimate Ultimate

Expected Average Remaining 15 15 14 14working lives of Employees

Method used PUCM PUCM PUCM PUCM

Date of actuairal Report 1st June 2012 1st June 2012 7th July 2011 7th July 2011

Particulars

D. Principal Actuarial assumptions at the Balance Sheet date

Gratuity(Unfunded)

LeaveEncashment(Unfunded)

2010-112011-12

Gratuity(Unfunded)

LeaveEncashment(Unfunded)

79


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81


36 Related Party Disclosures

The List of related parties as identified by the Management is as under:

Relatives of Key Management Personnel1. K H Gurunath2. K H Radheshyam3. K.H. Srinivas4. Estate of Late K L Narayanasa5. K P Ganashayam6. K R Dayanand7. K R Nithyanand8. K S Brijmohan9. Rajalakshmi Srihari10. Gulab P Khoday11. Lalitha Swamy Khoday12. Padma N Khoday13. Meera Bai14. Dhanalakshmi

Entities over which Key Management Personnel and/or their relatives are able to exercise significantinfluence

1. K L Ramachandra – HUF2. K L A Padmanabhasha – HUF3. K L Srihari – HUF4. K L Swamy – HUF5. Acqua Borewells Private Limited6. Blendwell bottlers Private Limited7. Cassonava Distilleries Private Limited8. Coconut Groves & Holiday Resorts Pvt Limited9. Daatha Builders Private Limited10. Elkay Farm11. Elkay Tradings Corporation Private Limited12. Five Brothers Marketing Private Limited13. Forest Resort (Bandipur) Limited14. Gayathri Foundation15. Gayathri Holdings Private Limited16. General mining and minerals17. Hercules Construction Company Pvt Limited18. Honeywell Business Private Limited19. Ingo Property Developers Private Limited20. Jay Pee Shoes Private Limited21. K Lakshmana & Company22. Kankapura Trading Private Limited23. Khoday Brothers24. Khoday Breweries Limited25. Khoday Business Private Limited


P A R T I C U L A R S 31.03.2003 31.03.2002

82


26. Khoday Control Systems Private Limited27. Khoday Eshawarsa and Sons28. Khoday Hotels Private Limited29. Khoday Industires (Kuppam) Private Limited30. Khoday Industries (Hyderabad) Private Limited31. Khoday Industries Pvt Limited32. Khodays Brothers International Limited33. Khodays Technologies Limited34. Kilara Power Limited35. L.K Polyfibre Limited36. L.K Power Corporation Limited37. L.K Trust38. Lakshmi Estate39. Macdonald Tradings Private Limited40. Mc Donald Distilleries Private Limited41. Murugan enterprises42. National Distilleries Limited43. North India Distillers Private Limited44. Panchaganga Tradings Private Limited45. Panchakalyani Tradings Private Limited46. Parsan Holiday Resorts Private Limited47. Peterscot Tradings Private Limited48. Ram Mohan & Company Private Limited49. Ransh Coffee Estate50. River Resorts Limited51. Saraswathi Estate52. Sovereign Hotels53. Spring Borewells Company Private Limited54. Sree Gurunath Panels55. Sri Gurunath Tradings Private Limited56. Sri Narmada Distilleries Private Limited57. Surya Watch Industries Private Limited58. The Distillers Company Private Limited59. Thiruvonam Wines60. Tiger Breweries Limited61. Trishul Wineries & Distilleries Private Limited62. United Glass Bottles Manufacturing Company Limited63. Universal Business Concepts Private Limited64. Universal Trading Company65. Vaishnavi Communications Private Limited66. Vindhya Distilleries67. Vyjayanthi Tradings Private Limited68. Wesco Power Generation Limited69. West India Distilleries Private Limited70. Yajaman Enterprises


P A R T I C U L A R S 31.03.2003 31.03.2002

83



A. Income

Sales - - - 22,866 - - - 11,838

B. Expenses

Purchase of Goods /Services - - - 1,347 - - - 9,252

Leasing arrangement / Rent - 90 990 2,005 - 90 990 1,456

Traveling,Sales promotionand others - - - 4,299 - - - 8,998

Sales of Fixed Assets - - - - - - - 193

Purchase of Fixed Assets - - - - - 171 - -

Closing Balance - 75,315 11,296 227,912 - 76,584 1,296 132,979(Credit) (Credit) (Debit) (Credit) (Credit) (Credit)

C. Investment in

Subsidiary 100 100 - - -

Partnership firm 614,844 - - - 616,102

D. Others - - - -

Guarantee andCollateral obtainedfrom* 1,070,362 - - 954,030 -

* - includes Personal guarantee obtained from entities over which key management personnel are able toexercise significant influence, Key management Personnel and their related parties.

NOTE: No Amount has been written back or written off during the year in respect of amounts due to or fromrelated parties.

2011-12 2010-11

ParticularsSubsid-

iary

KeyManage-

mentPersonnel


ManagementPersonnel


able toexercise

significantinfluence

Relatives ofKey

Manage-ment

personnel

Subsid-iary

KeyManage-

mentPersonnel


ManagementPersonnel


able toexercisesignificantinfluence

Relativesof Key

Manage-ment

personnel

84


39 Deferred TaxIn accordance with the Accounting Standard - 22 “Accounting for Taxes on Income” the group reviewed thedeferred tax assets and liabilities. As a measure of prudence, this net deferred tax asset has not beenrecognized in the financial statement. The details are as below:-

Deferred Tax - Liabilities:On Depreciation differences 7,350 9,132On Prepaid Licence Fees 7,150 10,570

TOTAL [A] 14,500 19,702

Deferred Tax – AssetsOn provision for Entry Tax / Sales Tax 160 73On Employees Benefits 21,0174 19,331On unabsorbed tax losses and depreciation 1,114 61,958

TOTAL [B] 22,291 81,362

Net Deferred Tax Liabilities / [Assets] [A - B] (7,791) (61,660)


P A R T I C U L A R S 2011-12 2010-11

37 LeasesThe company has taken certain assets on operating lease and certain assets on Finance Lease. Theamounts of further minimal lease payments are stated below:

Operating Lease:

Less than 1 year 1,562 662

Later than 1 year & not later than 5 years Nil Nil


Finance Lease:

Less than 1 year 7,216 6,935

Later than 1 year & not later than 5 years 11,240 8,019


Profit/(Loss) after Taxation as per Statement ofProfit and Loss A 157,988 (133,888)

Weighted Average Number of Equity Shares B 37,591,237 37,591,237

Earnings per Share - Basic (in Rs.) {A/B} 4.20 (3.56)

Earnings per Share - Diluted (in Rs.) {A/B} 4.20 (3.56)

Face Value per Share (in Rs.) 10 10

38 Earnings Per Share

85







40 During the year, the company has identified certain impairable fixed assets, being Building, CapitalWork-in-Progress(Civil), Office equipments and Plant & Machinery aggregating to Rs. 15,961 thousands,employed in the Paper division which have been written down to their recoverable amount of Rs. NIL.The Impairment Loss to the tune of Rs. 13,970 thousands has been adjusted against RevaluationReserve of the assets impaired and balance amounting to Rs. 1,991 thousands has been transferredto Profit and Loss account.

41 Payments made or provided for Directors

Director’s sitting fees 67 75

Managerial Remuneration * *

* Remuneration to Managerial personnel has not been provided

42 Part of Land belonging to the Distillery Division identified on a systematic basis has been revalued on2nd April 2009 and converted to stock in trade. The increase in the book value arising on such revaluationamounts to Rs. 15,988 thousands.

43 Income from operations includes Rs.40 Crores arising from a contract with a firm for making over therisk and rewards of a project.

44 Certain confirmation of balances for Trade Payables (Current and Non-Current), Trade Deposits andAdvances, Capital Advances, Deposits, Other Loans & Advances and Trade Receivables are awaited.The accounts’ reconciliations of some parties where confirmation have been received are in progress.Adjustments for differences, if any, arising out of such confirmations/ reconciliations would be made inthe accounts on receipt of such confirmations and reconciliations thereof. The Management is of theopinion that the impact of adjustments, if any, is not likely to be significant. In the opinion of the Managementall current assets, loans and advances including advances in capital accounts would be realized at thevalues at which these are stated in the accounts, in the ordinary course of business.

45 Fixed Assets includes a building with a WDV of Rs. 12,028 thousands (Previous Year: Rs. 12,661thousands) the title of which is under dispute before the Debt Recovery Tribunal / City Civil Court.Pending resolution of this dispute, the company continues to reckon the Building as an asset in itsfinancial statement.


P A R T I C U L A R S 2011-12 2010-11

86


Consolidated Cash Flow Statement for the Year Ended 31st March 2012

P A R T I C U L A R S 2011-2012 2010-2011


A. Cash flow from Operating Activities

Net Profit Before Tax 192,586 (129,838)

Adjusted for:

Depreciation 49,631 48,562

Impairment of Assets 1,991 -

Diminution in value of Investments 54 -

Reduction in face value of Investment 5 -

Loss/(Profit) on sale Fixed Assets (495) (4,823)

Interest Income (1,005) (2,422)

Dividend Income (28) (19)

Interest & Bank Charges 225,142 215,406

Sundry Credit balance written back (8,208) (22,265)

Irrecoverable advances written off 19,086 1,211

Loss from Lakshmi Estate (Partnership Firm) 1,258 1,105

Unrealised Foreign Exchange Fluctuation 82 (5)

Operating Profit Before Working Capital Changes 480,138 106,912

Adjusted for:

Trade and other Receivables 1,890 81,626

Inventories (94,020) (25,792)

Trade and other payables (234,906) 294,481

Cash Generated from operations 153,062 457,227

Net prior year adjustments (250) (350)

Taxes paid (Current and relating to Previous years) (48) (9,833)

Net Cash from / (Used in) Operating Activities [A] 152,764 447,044

87


Consolidated Cash Flow Statement for the Year Ended 31st March 2012

P A R T I C U L A R S 2011-2012 2010-2011


B. Cash Flow from Investing activities

Purchase of Fixed Assets (43,678) (99,142)

Sale of Fixed Assets 900 6,113

Capital Work In Progress (WIP) - 60,995

Purchase of Investments - (107)

Proceeds from sale of investment 3 -

Interest Income (Gross) 1,005 1,642

Dividend Income 28 19

Net Cash from / (Used in) Investing Activities [B] (41,742) (30,479)

C Cash flow from Financial Activities

Proceeds from Borrowings 149,281 5,504

Repayment of Borrowings (137,922) (161,683)

Interest & Bank Charges (225,142) (215,106)

Net Cash flow from/(Used in) Financing Activities [C] (213,781) (371,285)

Net Cash Flows during the year {A+B+C} (102,759) 45,280

Cash & Cash Equivalents(Opening Balance) 120,669 75,421

Cash & Cash Equivalents (Closing Balance) 17,965 120,669

Increase / (Decrease) in Cash & Cash equivalents (102,734) 45,278

Unrealised (Profit) / Loss on Foreign Currency held in Hand (USD) (25) 2

Net Increase / (Decrease) in Cash & Cash equivalents (102,759) 45,280

88


Details Regarding the Subsidiary Company to be furnishedin the Annual Report of the Holding Company as per exemption

provided in Section 212(8) of the Companies Act, 1956

KHODAY PROPERTIES PRIVATE LIMITED(Subsidiary of Khoday India Limited)

1. Share Capital – Rs.1,00,000 divided in to 10,000 equity shares of Rs.10/- each.The entire share capital is held by the holding company – Khoday India Limited.

2. Reserves – NIL

3. Total Assets:� Fixed Assets – NIL� Current Assets , Loans & Advances – Rs.4,78,249/-

4. Total Liabilities – Rs.38,53,233/-

5. Details of Investments – NIL

6. Turnover – NIL

7. Profit before Taxation – Loss Rs.39,999/-

8. Provision for Taxation – NIL

9. Profit after Taxation – Loss Rs.39,999/-

10. Proposed Dividend – NIL

89

46th Annual Report 2011-2012KHODAY INDIA LIMITEDRegd. Off. : ‘‘Brewery House’’, 7th Mile, Kanakapura Road,Bangalore - 560 062.

Name & address of the Share holder / proxy

Attendance slipForty Sixth

Annual General Meeting30th October 2012 at 12 Noon

At Shravanthi Kalyana MantapaDoddakallasandra

Kanakapura Main RoadBangalore - 560 062

Folio No.

Client ID No.

DP ID No.

No. of shares held

Signature of Member / proxy

KHODAY INDIA LIMITEDRegd. Off. : ‘‘Brewery House’’, 7th Mile, Kanakapura Road,Bangalore - 560 062.

Proxy FormFolio No.

Client ID No.

Proxy No. DP ID No.

Date of Receipt No. of Shares

I/Weof...............................................................................................in the district of.......................................................beinga member / members of Khoday India Limited hereby appoint..............................................................of....................................................................in the district of............................................................................or failinghim.............................................................of..............................................................in the district of.................................asmy / our proxy to attend and vote for me/us on my/our behalf at the Annual General Meeting of the Company to beheld at Shravanthi Kalyana Mantapa, Doddakallasandra, Kanakapura Main Road, Bangalore - 560 062 on Tuesday the 30thOct. 2012 at 12 Noon and at any adjournment thereof.

Date :The Proxy form duly completed must reach theRegistered Office atleast 48 hours before thecommencement of the meeting.Signature of member

�

�

Shareholders may kindly note that no gift will be given at the meeting

46th Annual Report 2011-2012 - Bombay Stock Exchange€¦ · Company’s Registrar M/s.Integrated...

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Transcript of 46th Annual Report 2011-2012 - Bombay Stock Exchange€¦ · Company’s Registrar M/s.Integrated...