NEHA INTERNATIONAL LIMITED
ANNUAL REPORT 2009-2010
NOTES ON ACCOUNTS
Significant Accounting Policies and notes to accounts forming part of the
accounts for the year ended 30th June 2010.
A. ACCOUNTING POLICIES
1. The accounts are prepared on the historical cost convention and on the
accounting principle of a going concern.The accounts are prepared to comply
in all material aspects with the applicable accounting principles in India,
the Accounting Standards issued by the Institute of Chartered Accountants
of India and the relevant provisions of the Companies act, 1956 of India.
2. All Income and expenses to the extent considered receivable and payable
unless specifically stated to be otherwise are accounted for on accrual
basis.
3. Fixed assets are stated at cost less accumulated depreciation. The
expenses related to, and incurred during implementation period have been
capitalized under the appropriate heads.The original cost of fixed assets
is inclusive of Freight.duties, taxes/incidental expenses relating to the
acquisition, cost of installation/erection etc.
4. Depreciation on Fixed assets have been charged on straight-line method
at the rates and in the manner specified in Schedule XIV to the Companies
act, 1956. The cost of the plant materials including re plantation expenses
are capitalized and are being written off over a period of five years.
5. Miscellaneous expenditure: Expenses incurred for the acquisition of
subsidiaries has been capitalized and will be written off in equal
installments over a period of five years.
6. Inventories: Raw materials and consumable stores are valued at cost on
FIFO basis. Finished goods are valued on the lower of cost or net
realizable value.
7. Intangible Assets.The expense incurred on the development of overseas
markets has been recognized as Intangible Assets and will be amortized over
a period of five years.The company is following the practice of writing off
Deferred Revenue Expenses over a period of five years and the same
accounting treatment is consistently followed for the current year also.
Any new deferred revenue expenditure incurred will be written off in the
year of such expenditure as per Accounting Standard 28
8. Gratuity: Provision for Gratuity has been provided for employees who
have completed requisite period of service.
9. Leave Encashment: Leave encashment is being accounted for as and when
payments are made.
10. Provident Fund: Contributions to appropriateAuthorities is charged to
Profit and Loss Account.
11. Lease Rentals: Lease rentals in respect of operating lease accruing as
per the Lease agreement and are charged to Profit and Loss account.
12. DeferredTax: Deferred tax charge reflects the tax effects of timing
difference between accounting income and taxable income for the period.The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using tax rates that have been enacted
or substantially enacted by the balance sheet date. Deferred tax assets are
recognized only to the extent there is reasonable certainty that the assets
can be realized in future; however, where there is unabsorbed depreciation
or carry forward losses, deferred tax assets are recognized only if there
is a virtual certainty of realization of such assets. Deferred tax assets
are reviewed at each balance sheet date and are written-down or written-up
to reflect the amount that is reasonably/virtually certain (as the case may
be) to be realized.
13. Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of the transaction. Net exchange gain or loss
resulting in respect of foreign exchange transactions settled during the
period is recognized in the profit and loss account except for the net
exchange gain or loss on account of imported Fixed assets, which is
adjusted in the carrying amount of the related fixed assets. Foreign
Currency Denominated current assets and current liabilities at period end
are translated at the period end exchange Rates and the resulting net gain
or loss is recognized in the profit and loss account, except for exchange
Differences related to acquisition of fixed assets purchased from foreign
countries is adjusted in the Carrying amount of the related fixed assets.
14. Contingent Liability.There are no contingent liabilities for the
period.
B. NOTES TO ACCOUNTS
1. The Company has prepared its financial statements for a period of Twelve
months i.e. from 1st July 2009 to 30th June 2010.Whereas previous period's
financials were prepared for the period of 15 months i.e. from 1st April
2008 to 30th June 2009.Consequently the figures for the current period are
not comparable with previous period's figures to that extent.
2. In the view of Management, no event has taken place to trigger the need
for testing its assets for impairment. Accordingly, as per the management's
assessment, the carrying values of its assets as at the Balance sheet date
are not higher than their corresponding recoverable amounts.
3. EARNING PER SHARE (EPS)
The numerator and denominator used to calculate Earning per Share:
Period Ended Period Ended
30.06.2009 31.03.2008
Profit attributed to the
Equity Shareholders (Rs) (A) 13719621 9839720
Weighted average number of
Equity Shares
Outstanding during the year (B) 14563318 13763318
Face Value of Equity Shares 10/- 10/-
(Rs)
Basic Earning per share (Rs.) (A/B) 0.94 0.71
Diluted Earning per Share
(Rs.) (A/B) 0.57 0.71
4. SEGMENT REPORTING AS 17
Business Segment: Since the company is into merchandising, trading in
flowers, Machinery and other Agri products in addition to growing of
flowers, the revenues from each operation is also given below.
Geographical Segment: Geographical Segment of the company are
Netherlands, India, Japan, Greece Canada , Switzerland,Oman, United Kingdom
as the company is engaged in business with these countries. Revenue from
these segments is as follows.
Segment wise Revenues:
(in Rs.)
Revenue Cut Flowers Machinery Agri Products Total
Current Year 144349798 34923958 59723242 238996998
Previous Year 191668414 - - 191668414
Segment wise Revenues Operation wise: (In Rs)
Revenue Farm Merchandising Tradings Sales Total
Current Year 21578665 157695091 59723242 238996998
Previous Year 20695453 170972961 - 191668414
GEOGRAPHICAL REVENUES (in Rs)
Geographical Segment REVENUE
Current Period Previous Period
Netherlands 0 5444481
India (Cut Flowers) 81301969 15252411
Japan 117751201 165950159
Greece 1236933 1573289
Canada, Swiss, UK & Oman 3782937 3448074
Ethiopia (Machinery) 34923958 0
USA
Total 238996998 191668414
5. RELATED PARTY DISCLOSURE:
Information regarding Related Party Transactions as per Accounting Standard
18 issued by the ICAI
A. Related Party and their Relationship
I. (A) Subsidiaries (Direct Holding)
M/s Globe agro Holdings, Mauritius
M/s Dream Flowers PLC, Ethiopia
M/s NehaAgricorp PTE Ltd, Singapore
M/s NehaAgriservices PTE Ltd,Singapore
(B) Step Subsidiaries (Indirect Holding)
a. M/s Alliance Flowers PLC, Ethiopia
b. M/s Holetta Roses PLC, Ethiopia
c. M/s OromiaWonders PLC, Ethiopia.
d. M//s NINTAgri PLC, Ethiopia.
e. M/s NehaAgriTanzania Ltd. Tanzania
B. Transactions with Related Parties (Amount in Lakhs)
Particulars Alliance Flowers Neha Agricorp
PTE Ltd
Purchase of Goods 389.15
Payments against material 495.82
Sale of Goods 373.46
Name of the Company Nature of Transaction A B
or Party, Relationship
Mr. Vinod Reddy G, Obtained/repaid 200.80 0.50
Managing Director Unsecured Loan
A = Amount Rs. in lacs
B = Outstanding amounts carried in the Balance Sheet (Rs. in lacs)
6) In compliance with Accounting Standard AS 19'Lease',the following are
the Disclosures:
The Company has entered into an operating lease agreement for its office
premises for a period of 24 months renewable at the option of the lesser
and lessee. Total lease payments for the period charged to P&L account is
Rs. 12,19,582/- (Previous Year - Rs. 12,11,340/-)
7) The Company has recognized MAT Credit of Rs.22,75,690/- in the books in
accordance with 115JAA of the Income tax act, as there is a reasonable
certainty of future taxable profits against which MAT credit can be
realized.
The company has recognized deferred tax liability of Rs. 394,580 in the
books in accordance with AS-22'Accounting for taxes on income'
8) Contingent Liabilities not provided for: Nil
9) Confirmation of balances has not been received from some of the
Creditors, Debtors and for Loans & Advances, which are subject to
reconciliation. Provision for doubtful debts, if any, in respect of the
above and the consequential adjustment, if any, whether of revenue nature
or otherwise, will be dealt accordingly.
10) MANAGERIAL REMUNERATION
Particulars 30.06.2010 30.06.2009
(12 Months) (15 Months)
Salaries and Allowances 14,25,403 15,00,000
Contribution towards
Retirement benefits Nil Nil
Perquisites Nil Nil
Total 14,25,403 15,00,000
11) Auditors Remuneration:
Audit Fees Rs. 130,000 Rs. 130,000
Tax Audit Rs. 20,000 Rs. 20,000
# Exclusive of service tax
13) No amounts are due to SSI units beyond the prescribed limit as on 30th
June 2010.
14) The members of the Company at their Annual General Meeting held on 10th
October, 2007 had approved granting of a maximum of 700000 Options to its
eligible employees by special resolution. Pursuant to this approval, the
Compensation committee at its meeting held on 7th August, 2009 had granted
500000 options to the eligible employees of the company and its overseas
subsidiaries and the same shall be exercised within five years from the
date of vesting as per NEHA ESOP-2007.The employees of the company has
exercised 185,000 options as on date.The company has allotted 185000 equity
shares of Rs. 10/- each at a premium of Rs. 10/- each. FairValue
calculation has been given in the Directors Report
15) The Parent company has further invested $ 1,500,000 in M/s Globeagro
Holdings during the year for the increase in stake in the existing
subsidiaries. It also acquired 50% stake in Ethiopian base Floriculture
company M/s Dream Flowers PLC with Management control. During the year the
company has incorporated two 100% wholly owned subsidiary companies M/s
Neha Agricorp PTE Ltd and M/s NehaAgri Services PTE Ltd in Singapore.The
company has also acquired M/s NINTAgri PLC through the Singapore based
company M/s NehaAgricorpPTELtd.M/sNINTAgri PLC is having 10,000 acres of
land in hand at Ethiopia.
15) During the year the company has disposed off its un-viable floriculture
unit and other related assets located at pune for a total consideration of
Rs 550 lakhs pursuant to the consent give by the shareholders at their
meeting held on 10TH October 2007.The amount realized on sale of farm has
been utilized for investment in Ethiopian floriculture operation. Although
the company has disposed off its unit in Pune, the company continue to
undertake merchandising trade of cut flowers, machinery and other products.
In view of the continuation of the business, the financial statements for
the year are prepared on the basis of going concern concept.
16) Neha international Limited was incorporated in the year 1993 and since
then the company was into the business of floriculture. During the year,
the company has expanded its business activity by venturing into corporate
farming by acquiring an Ethiopian based company called NINTAgri Pic, which
holds 4000 hectors of arable land in Ethiopia.The company has acquired
world class infrastructure development equipments and is in the advance
stage of developing the land for cultivation.
17) Additional information pursuantto part II of schedule VI of the
Companies Act, 1956.
QUANTITATIVE AND OTHER DETAILS
2010 (12 months) 2009 (15 months)
1. Licensed Capacity Cut
Flowers (Roses) 10000000 10000000
2. Installed Capacity 6000000 7500000
3. Production-Stems
(Net of wastage) 3467955 7157246
Information regarding Opening Stock, Closing Stock, Sales etc.,
Opening Stock 2010 2009
Quantity Value (Rs) Quantity Value (Rs)
A. Fertilizers 0.344 MT 15310 0.89 MT 62.367
B. Chemicals &
Pesticides * - 20410 - 20688
C. Packing Materials - 20572 - 24880
D. Finished Goods 278130 stems 411310
Closing Stock:
A. Fertilizers - - 0.344 MT 15310
B. Chemicals &
Pesticides - - - 20410
C. Packing Materials - - - 20572
D. Finished Goods - - 349689 stems 699361
Sales:
A. Export Sales 223612 stems 5444481
B. Local Sales 3817644 Stems 21578665 6862075 stems 15250972
Consumption of
Raw Materials:
A. Fertilizers 16.03 MT 568093 36.68 MT 1346343
B. Chemicals &
Pesticides(*) - 470467 - 1273498
C. Packing
Materials(*) - 154922 - 874964
Value of Imported and indigenous Raw material and chemicals etc.and
percentage of total consumption
% Value % Value
Indigenous.- % 100% 1294169 100% 2619841
Imported: - % 100% NIL 100% NIL
(*)(*)Note: Quantitative details of Chemicals & Pesticides: Fertilizers,
Chemicals & Pesticides, packing materials comprises of large number of
items and are of different units. It is very difficult to compile the data.
Hence not quantified.
The company sold the Floriculture farm in pune and the same has been handed
over on 31st March 2010.
18) In compliance with Accounting Standard (AS 22) 'Accounting for taxes on
Income' issued by the Institute of Chartered Accountants of India, the
company Provided for deferred taxes on timing differences in the books.
2009-10 2008-09
Deferred Tax Liability on Fixed Assets Rs. Rs.
- Opening Balance
- During theYear 3,94,580/-
Deferred Tax Asset 3,94,580/-
Deferred tax Debited to Profit and Loss Account for the current year is
Rs. 3,94,580/-
19) CIFValue of Imports (In Rs.)
For the Period Previous period
a) Capital Equipment's Nil Nil
b) Purchase of Flowers
for trading 389.15 Lakhs 776.89 Lakhs
Purchase of Machinery
for trading 211.05 Lakhs Nil
c) Expenditure in
Foreign Currency:
Commission,
Handlings Freight 793.43 Lakhs 724.58Lakhs
Foreign Travel 11.66 Lakhs 14.89 Lakhs
d) Earning in Foreign
Currency: 1564.20 Lakhs 1010.85 Lakhs
(FOB Value of Exports)
e) Raw Materials Nil Nil
20) During the year, the company was sanctioned Rs.500 lakhs Letter of
credit limits from M/s Indusind BankThis limit is secured by pledge of the
Companie's shares in addition to cash margin.The company had utilized part
of this limit as on 30.06.2010.
21) Previous year's figures have been regrouped, rearranged and
reclassified, wherever necessary to match with the current year's figures.
22) Paise have been rounded off to the nearest rupee.
As per our report of even date
For Tukaram & Co.,
Chartered Accountants
Firm Regn No.004436S
J.Poorna Chandar
Partner
M.No.221627
For and on behalf of the Board
For Neha International Limited
G. Pramod
Director
G. Vinod Reddy
Managing Director
C.N. Bhavani Prasad
Company Secretary
P. Srihari
Vice President (Finance)
Place: Hyderabad
Date : 04.l2.20l0
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