BOARD OF DIRECTORS. Shri Navrsinh Pathusingabhai Parmar. Shri Girdhar Gopal Saboo. Director (Executive) (w.e.f ) Director (Executive)

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2 Page No. 1. Board of Directors 1 2. Notice 2 3. Directors' Report 8 4. Report on Corporate Governance Certificate by CEO/CFO Report of the Audit Committee Auditor's Report Annexure to the Auditors Report Balance Sheet Profit & Loss Account Accounting Policies Statement of Cash Flow Attendance Slip & Proxy Form 45

3 BOARD OF DIRECTORS Shri Girdhar Gopal Saboo Shri Atul Kharbanda Director (Executive) (w.e.f ) Director (Executive) Director (Non- Executive) Shri Navrsinh Pathusingabhai Parmar COMPLIANCE OFFICER Director (Non- Executive) Mr. Rohit Pareek Statutary Auditors N.Kataria & Associates Chartered Accountants 710, Paris Point, Collectorate Circle Bani Park,Jaipur Corporate Advisors Naredi Vinod & Associates Company Secretaries, Jaipur Tower, M.I.Road Jaipur Registered Office L-5, B II, Krishna Marg, C-Scheme, Jaipur , (RAJASTHAN) Bankers HDFC Bank Ltd State Bank of Bikaner & Jaipur Registrar & Share Transfer Agent Beetal Financial & Computer Services (P) Ltd rd Beetal House, 3 floor, 99, Madangir, Behind Local Shopping Centre Near Dada Harsukhdas Mandir, New Delhi Tel: /82 Fax:

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11 During the financial year , Shri Anuj Kumar Samdhani ceased to be Director of the Company w.e.f by tendering his resignation to the Board of Directors of the Company LITIGATION CLAUSE Suit has been filed in company law board against Shri Anuj Kumar Samdhani. Thereby proceedings are going for the same. 9

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36 BALANCE SHEET AS AT 31st MARCH, 2013 As at As at Note (in Rs.) (in Rs.) I. EQUITY AND LIABILITIES Shareholders Fund Share Capital 2 37,965,500 37,965,500 Share Application Money 14,372,500 Reserve & Surplus 3 144,898 37,690 52,482,898 38,003,190 Non-current Liabilities Long Term Borrowings 4 19,113,936 13,503,904 19,113,936 13,503,904 Current Liabilities Trade Payables 5 2,270,380 2,871,415 Other Current Liabilities 6 412,292 83,660 Short Term Provisions 7 100, ,988 2,782,672 3,192,063 Total Laibilities 74,379,506 54,699,157 II. ASSETS Non-current Assets Fixed Assets Tangible Assets 8 10,333,003 6,662,514 10,333,003 6,662,514 Non Current Investments 9 12,227,285 9,917,300 Long Term Loans & Advances , ,458 Other Non-current Assets 11 1,039,449 Current Assets Inventories 12 8,671,200 2,380,400 Deffered Revenue Expenditure 341,060 Trade Receivables ,510 Cash & Cash Equivalents 14 15,913,258 30,324,484 Short Term Loans & Adavnces 15 25,475,231 4,699,491 50,400,749 37,931,885 Total Assets 74,379,506 54,699,157 As per our report of even date attached For N. Kataria & Associates For and on behalf of the Board Chartered Accountants Nikhilesh Kataria, FCA Proprietor Atul Kharbanda Director Girdhar Gopal Saboo Director Place: Jaipur Date:

37 PROFIT & LOSS ACCCOUNT FOR THE YEAR ENDING 31ST MARCH 2013 Year Ended Year Ended Note (in Rs.) (in Rs.) Revenue from operations ,500 5,192,185 Other Income 17 2,462,649 8,934,143 Total Revenue 2,685,149 14,126,328 Expenses: Purchase of stock-in-trade 18 6,522,500 7,087,155 Changes in inventories of finished goods, work-in-progress and stock-intrade Employee benefit expense , , (6,290,800) 4,931,300 Financial costs 21 28,546 42,416 Depreciation and amortization expense - - Auditor's Remuneration 22 15,000 15,000 Other expenses 23 1,758, ,859 Total Expenses 2,411,953 12,910,871 Profit and Loss before tax 273,196 1,215,458 Short/ (Excess) Provision for Earlier Year 65,988 Tax expense: Current tax (Provision) 100, ,000 Total Current Tax Expenses 100, ,000 Profit and Loss after Tax for the Period 107, ,458 Earning per equity share: 24 Basic Diluted Accounting Policies & Notes to the Accounts 1 As per our report of even date attached For N. Kataria & Associates For and on behalf of the Board Chartered Accountants Nikhilesh Kataria, FCA Atul Kharbanda Girdhar Gopal Saboo Proprietor Director Director Place: Jaipur Date:

38 Notes 1 To 25 annexed to and forming integral part of the accounts for the year ended 31st March, 2013 Note 1 : Accounting Policies & Notes on Accounts 1.1) Basis of Preparation of Financial Statement These financial statements are prepared in accordance with Indian General Accepted Accounting Principles (GAAP) under historical cost convention on the accrual basis. The Indian GAAP comprises mandatory Accounting Standards as prescribed under the Companies (Accounting Standards) Rules, 2006 and the provision of the Companies Act, The accounting policies not specifically referred to otherwise, are consistent and in consonance with Indian GAAP issued by the Institute of Chartered Accountants of India, provisions of the Companies Act, 1956 & Securities and Exchange Board of India. 1.2) Revenue Recognition Revenue is primarily derived from sale of iodized salt. Revenues are recognized on accrual basis when the substantial risks and reward of ownership in the goods are transferred to the buyer upon supply of the goods. Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities except disputed claims & demands and discounts, rebates etc., which are accounted for on cash basis as per consistent practice. Further, profit & loss in trading of shares and future & options have been shown on net basis. Though no such trading has taken place during the year under consideration. 1.3) Fixed Assets & Impairment Thereof Fixed assets are stated at their cost of acquisition including all direct cost attributable to the installation less accumulated depreciation. Impairment loss, if any, is provided wherever the carrying value of the assets exceeds the recoverable amount. Assessment is done at the each balance sheet date by the management to ascertain if there is any indication of impairment loss in any carrying value of fixed assets. 1.4) Depreciation& Amortization Depreciation, if any, on fixed assets has been provided on the basis of written down value method as per rates provided in Schedule XIV of the Companies Act, ) Inventories Inventories are valued on the weighted-average basis and taken at the lower of the cost or net realizable value. Unserviceable raw material, if any, is valued at net realizable value. The cost of finished goods includes material cost determined on weighted-average basis and also includes an appropriate portion of allocable overheads. However, it does not include interest and administrative overheads which are indirect in nature. There is no change in the valuation method followed by the Company. 1.6) Provisions and Contingent Liabilities Provisions and contingent liabilities as defined under the relevant accounting standard are provided on the basis of information made available from the management. These are reviewed each year end date and adjusted to reflect the best current estimate. 1.7) Investments Investments, if any, are classified into current and long term investments. Current investments are stated at lower of cost or fair value. Long term investments are stated at cost. Investments which are readily realizable and are intended to be held for not more than one year as on the date of the balance sheet are classified as current investment 1.8) Retirement & Post Retirement Benefits The company is not providing for retirement and post retirement benefits in the form of gratuity, pension, leave encashment etc. and to this extent AS-15 not stood complied with, however, impact on profit is not ascertainable. The impact not expected to be substantial no qualification of the audit report is made. 36

39 1.9)Segment Reporting In the year under consideration, there is only one visible segment of the company i.e. sale of salt and as such no separate reporting is needed on segment basis. 1.10) Taxation a. Current tax is the provision made for income tax liability, if any, on the profits calculated in accordance with the provisions of the Income Tax Act b. Deferred tax is recognized subject to the consideration of prudence on timing differences being the difference between the taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Brought forward losses are considered only when there is visible certainty that the company will be able to utilize the brought forward losses to reduce its tax liability. 1.11)Earnings Per Share Basic earnings per share is calculate by dividing the net profit for the period attributable to equity shareholders by the equity shares outstanding at the end of the year. For the purposes of calculating diluted earnings per share, all potential equity shares have been taken into consideration including convertible warrants Note 2 : Share Capital and Application Money (in Rs.) (in Rs.) A : Share Capital a) Authorized : equity shares of Rs. 10/- each 70,000,000 70,000,000 (previous Year- no change) 70,000,000 70,000,000 b) Issued Capital: equity shares of Rs. 10/- each 64,045,000 64,045,000 (previous Year- no change) 64,045,000 64,045,000 c ) Subscribed & Paid Up Capital: equity shares of Rs. 10/- each 64,045,000 64,045,000 (previous Year- no change) Less: Forfeited Shares 41,288,000 41,288,000 ( Partly paid Equity Shares of Rs 10 each Forfeited on ) 22,757,000 22,757,000 Add: Forfeited Shares to the extent of Paid Up 15,208,500 15,208,500 37,965,500 37,965,500 B : Share Application Money (see note 2.1) Fortress Hotels & Resorts (P) Ltd. 1,790,400 Girdhar Shaboo 896,950 Tiger Salts Pvt. Ltd 5,408,600 Nawa Hotels & Resorts Private Limited 2,242,375 Rajasthan Mega Developers Private Ltd 2,240,275 Saboo Damodar Ropeways Pvt Ltd 1,793,900 14,372,500 37

40 Note 2.1: Shri Girdhar Saboo is director in the company. In all the other companies, one or more director/ shareholder is common having substantial interest of more than 10% in this company and the other company The details of shareholder holding in excess of 5% shares are as under: Name of Shareholder As at As at % of shares No. of Shares % of shares No. of Shares Girdhar Saboo ,178, ,133, Nawa Hotels & Resorts Pvt Ltd , , Tiger Salts Pvt. Ltd , , Note 3 : Reserve and Surplus Profit & Loss Account Balance from Previous Year 37,690 (952,768) Add: Profit During the Year 107, , ,898 37,690 Note 4 : Long Term Borrowings Secured Loan SBI 19,020,032 Unsecured Loan Bikas Kumar Lakhotia & Co 93,904 93,904 Tiger Salts Pvt Ltd - 13,410,000 19,113,936 13,503,904 CURRENT LAIBILITIES Note 5 : Trade Payables Creditors for Goods 2,270,380 2,871,415 2,270,380 2,871,415 Note 6 : Other Current Liabilities Imprest - 5,000 Audit Fees Payable 59,578 49,660 TDS Payable 218,121 Advance Form Customers 100,000 Staff Security Deposit 29,000 29,000 Service tax payable 5, ,292 83,660 Note 6.1 : Out of the above amount, Rs. nil pertain to the Micro, Small and Medium Enterprises (MSME) as defined under Micro, Small and Medium Enterprises Development Act, 2006 based on the information available with the Company. There is no interest payable to such parties as at March 31, 2013 (March 31, 2012 :Rs. NIL ) Note 7 : Short Term Provisions Provision For Expenses - 11,988 Provision for Taxation 100, , , ,988 38

41 Note 8 : Fixed Assets PARTICULARS As at Addition During the year Gross Block Net Block Deletion During the year As at As at As at Land & Site Development Building Machinery Angles Total Note 9 : Non Current Investments Share - Saboo Sodium Chloro Ltd ,100,100 Share - Silktex 13,500 13,500 Ras Kmk 29,250 29,250 Uniworth EQ Indian Hotel 697, ,880 Other Investments - 50,000 Prima Plastic 81,030 81,030 Vogue Tex 4,960 4,960 ANG Exports 13,530 13,530 Saboo Engitech Pvt. Ltd. 5,396,000 5,396,000 Fortress Hotels & Resorts Pvt. Ltd. 530, ,750 12,227,285 9,917,300 Note 10 : Long Term Loans & Advances (Unsecured considered good) TDS & Advance Tax 369, ,733 Security Deposit 9,725 9, , ,458 Note 11 : Other Non Current- Unamortised Expenses Preliminary Expenses Note 11.1: The preliminary expenses are related to a new project at Falodi (Raj.). The project is still in progress and yet to be commissioned CURRENT ASSETS Note 12 : Inventories Finished Goods 8,671,200 2,380,400 8,671,200 2,380,400 Note 13 : Deffered revenue Expenditure Sales Promotion Expenses 341, ,060-39

42 Note: 13.1: No sale is materialized from certain expenses incurred in the month of March'2013 and as such the expenses is deferred for the succeding year Note 14 : Trade Receivables (unsecured and considered good) More than 6 Months - 87,177 Others - 440, ,510 Note 15 : Cash And Cash Equivalents Cash In hand 342, ,132 STDR- With SBI 10,000,000 Balances with HDFC Bank 5,570,927 30,136,352 15,913,258 30,324,484 Note 16 : Short Term Loan And Advances (Unsecured considered good) Archana Saboo 75,000 Pradeep kumar Saxena 52,077 42,477 Mech Tech Machinery 1,075,000 Sunil Saxena 11,000 H.R. Contrectros 1,077,511 Religare Securities Ltd SRV Fans 90,000 Theramax Ltd 350,000 Saboo Sodium Chloro Ltd. 10,746,843 4,581,993 Nawa Hotels & Resorts Pvt Ltd 4,361,400 Nawa Salts Pvt Ltd 7,711,400 25,475,231 4,699,491 Note 14.1 : Director of Saboo Sodium Chloro Ltd is having substantial shareholding above 10% in the company and is also director in the company. In case of Nawa Hotels & Resorts Pvt. Ltd. and Nawa Salts Pvt. Ltd. the director of the company is shareholder having substantial interest of more than 10%. All these advances are interest free Note 16 : Income From Operations Products Sales Salt 222,500 5,192, ,500 5,192,185 Note 17 : Other Income Interest Received 2,034, ,272 Dividend Received 10,049 Profit on Sale of Fixed Assets 8,781,672 Balance Written Off 199 Rebate and Discount 418,000-2,462,649 8,934,143 40

43 Note 18 : Purchases Purchase- Salt 6,522,500 6,745,000 Loss on share Trading - 342,155 6,522,500 7,087,155 Note 19 : Changes in Inventoris of Finished Goods, WIP & Stores Opening Stock Salt 2,380,400 7,311,700 2,380,400 7,311,700 Closing Stock Salt 8,671,200 2,380,400 8,671,200 2,380,400 (6,290,800) 4,931,300 Note 20 : Employees Benefit Expenses Salary Expenses 375, ,776 Stipend to Apprentice 3,000 36, , ,140 Note 21 : Financial Costs Interest On Share Funding 5,097 41,970 Interest Paid - Interest on term loan 20,032 Bank comm. & Charges 3, ,546 42,416 Note 22 : Auditor's Remuneration Statutory Audit Fees 8,500 8,500 Tax Audit Fees 6,500 6,500 15,000 15,000 Note 23 : OTHER EXPENSES Administrative Expenses Advertisement and Publicity 1,057 - Annual Custodial Fees 6,741 13,236 Annual Listing Fees 51,752 16,545 Bad debts written off 81,397 Conveyance Expenses 17,693 18,817 Discount Allowed - Income Tax Demand 62,470 Investments written off 50,000 Legal Expenses 108,433 29,755 Miscellaneous Exp 18, Office maintanance Exp - Printing & Stationery Expenses 9,923 Processing Fees - Professional Service Exp 57,500 7,500 Repair and Maintainance - Others 5,891 Rating Exp - Rent Rate and Taxes 1,200,000 Share Transfer Exp 34,318 19,713 Sales Promotion Exp - 7,800 Selling and Distribution Exp 19,034 Service Tax 5,593 - Telephone Exp. 112, ,003 Travelling Exp 26,470 Water and Electricity Charges 12,247 10,791 Security Transaction Tax & DP Charges 1,070-1,758, ,859 41

44 Note 24: Basic & Diluted EPS Basic Earnings Per Share 31-Mar Mar-12 Net Profit/Loss (after tax) No. of Share Face Value (Per Share) EPS-Basic Diluted Earnings Per Share Net Profit/Loss (after tax) No. of Share (including ) Face Value (Per Share) EPS- Diluted Note 25: Related Party Disclosures Key Management Personnel Vijay Kumar Verma Atul Kharbanda Girdhar Saboo *Other Related Parties Saboo Sodium Chloro Ltd Fortress Hotels & Resorts (P) Ltd. Girdhar Shaboo Tiger Salts Pvt. Ltd Nawa Hotels & Resorts Private Limited Rajasthan Mega Developers Private Ltd Saboo Damodar Ropeways Pvt Ltd * on the basis of information provided by the management Disclosure of Transation Name of Party Nature of Transaction Amount (Rs.) in lacs* Saboo Sodium Chloro Ltd. Purchases of raw material Fortress Hotels & Resorts (P) Ltd. Share application money Girdhar Shaboo Share application money 8.94 Tiger Salts Pvt. Ltd Share application money Nawa Hotels & Resorts Private Limited Share application money Rajasthan Mega Developers Private Ltd Share application money Saboo Damodar Ropeways Pvt Ltd Share application money Saboo Sodium Chloro Ltd. Interest free loans & advances Nawa Hotels & Resorts Pvt Ltd Interest free loans & advances Nawa Salts Pvt Ltd Interest free loans & advances Girdhar Shaboo Rent paid * All amounts are closing balances 42

45 PARTICULARS A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before Tax and extraordinary items 273,196 1,215,458 Adjustments for : - - Depreciation and amortization - - Interest Received (2,034,600) (152,272) Interest Paid 25,129 41,970 Profit On sale of Tangible Fixed Assets - - Operating Profit before Working Capital Changes (1,736,275) (7,676,517) Adjustments for : STATEMENT OF CASH FLOW FOR THE YEAR ENDED 31ST MARCH,2013 Decrease / (Increase) in Trade & Other Receivables 527, ,469 Decrease / (Increase) in Inventories (6,290,800) 4,931,300 Decrease / (Increase) in Other Assets (341,060) 1,207,318 Increase / (Decrease) in Current Liability (319,391) (1,419,430) Preliminary Exp. Not Written Off (1,039,449) Cash Generated From Operations (9,199,465) 19,214,378 Income Tax (255,987) (225,000) NET CASH FROM OPERATING ACTIVITIES (9,455,452) (1,644,430) B. CASH FLOW FROM INVESTING ACTIVITIES (Purchase) / sale of Fixed Assets (3,670,489) (6,662,514) Receipt on Sale of Fixed Assets - 10,000,000 Interest Received 2,034,600 15,272 Decrease (Increase) in Loans & Advances (20,967,302) 39,378,679 (Purchase)/ Sale of Investments (2,309,986) (1,114,264) Net Cash from Investing Activities (24,913,177) (41,754,173) C. CASH FLOW FROM FINANCING ACTIVITIES Proceed from Share Capital/ Share Application Money 14,372,500 - Proceeds/(Repayment) of Long Term Borrowings 5,610,032 (11,070,200) Proceed/(Repayment) of short Term Borrowings - - Proceed of State Capital Investment Subsidy - - Interest paid (25,129) (41,970) 43

46 Net Cash used in Financing Activities 19,957,403 (11,112,170) Net Increase (Decrease) in Cash and Cash Equivalents (14,411,226) 28,997,574 Cash and Cash Equivalents at the Beginning of the year 30,324,484 1,326,910 Cash and Cash Equivalents at the end of the year 15,913,258 30,384,484 As per our report of even date attached For N. Kataria & Associates Chartered Accountants For and on behalf of the Board Nikhilesh Kataria, FCA Proprietor Place: Jaipur Date: Atul Kharbanda Director Girdhar Gopal Saboo Director 44

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48 If Undelivered Please return to : SPECTRUM FOODS LIMITED L-5, B-II, Krishna Marg, C-Scheme, JAIPUR BOOK-POST PRINTED MATTER Printed by : GANESH ART PRINTERS, J-51, Krishna Marg, C-Scheme, Jaipur Ph. : ,

49 *r!-r----l FORM A Fofirldt of covering lettet dthe dnnuol oudit rcport to be filed with the stock exchanges 1 Name of the.company: Spectrum Foods Limited 2 An n u al fi n an c i al st ate m ents for the yeat ended 31't March Type of Audit obsenation Matter of Emphasis 1. As per point no.(xvii) of the CARO repoft, it is obsened that the term loans were not utilized for the purpose for which these were abtained 4 Freque ncy af observation First tine 5 To be signed by- D CEO/Managing Director tr cfo tl Auditor of the company L) AUCltl OOmmltee Chairman '?,J 7 {*"tp*.q"-.* /M

50 FORM B Fomdt ofcovefing letter ofthe dnnuol oudit rcpott to be filed with the stock exahonqes 1 Name of the Company: Spectrum Foods Limited 2 Annualfinancial statements for the year ended 3 Type of Audit qualification 4 Frequency of qualification 5 Drcw attentian to relevant notes in the 315tMarch 2013 As per Form A Fitst tine 1. point no.(xvil) of the CARA repolt statements and management response to the qualification in the directors repoft 6 Additional camments from the board/audit commit'tee chair: 7 To be signed by-! CEO/Managing Director ll cfo r-.1 Auditor of ihe company a Audit Committee Chairman There were certain delays in insta lation of new projects and as such the borrowed funds remained idle. Therefore, in the best interest of the company, the company has made short terrn advances to earn interest income for this idle period. ln any case, the amount is to be utilized for the purposes it were obtained in the subsequent financialyears as and when the projects were lmplejnented