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

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

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

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

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

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

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

a) Terms/rights attached to equity shares

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

b) Number of equity shares held by holding company

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

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

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

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

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

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

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

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

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

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

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

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

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

List of Related Parties -

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

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

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

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

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

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

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

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

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