Mar 31, 2018
Notes:
1. Refer note 39 for information on property, plant and equipment pledged as security.
2. Refer note 23 for information on borrowing costs capitalised.
3. Refer note 29 for information on contractual commitments for acquisition of property, plant and equipment.
4. The Company has elected to measure the items of property, plant and equipment at previous GAAP carrying value as deemed cost on the date of transition (i.e. 1st April, 2016). Accordingly the gross block reflecting above as at 1st April, 2016 is based upon the net written down value of previous GAAP as of 1st April, 2016. The below are the details of gross block, accumulated depreciation and net written down value as on 1st April, 2016.
Notes:
1. Refer note 39 for information on property, plant and equipment pledged as security.
2. The Company has elected to measure the items of intangible assets at previous GAAP carrying value as deemed cost on the date of transition (i.e. 1st April, 2016). Accordingly the gross block reflecting above as at 1st April, 2016 is based upon the net written down value of previous GAAP as of 1st April, 2016. The below are the details of gross block, accumulated amortisation and net written down value as on 1st April, 2016.
(ii) Rights, preferences and restrictions attached to the equity shareholders:
The Company has only one class of equity shares having par value of Rs.10/- per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders at the ensuing Annual General Meeting. Further, the Board of Directors may also announce an interim dividend which would need to be confirmed by the shareholders at the forthcoming Annual General Meeting. In the event of liquidation, the shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholdings.
(i) Upto last year, the Excise Department had raised a demand against the Company amounting to Rs.11,719 lakhs on account of excise duty payable on the products of the Company and the Company had disclosed it in contingent liability. As per reclassification of the products filed by the Company, Nil excise duty is leviable on its products from 1st December, 2007. The Excise Department had contested the reclassification filed by the Company. The Commissioner of Excise Duty (Appeals) had upheld the reclassification in favour of the Company. Further, the Excise Department had filed an appeal with Custom, Excise and Service Tax Appellate Tribunal against the order of Commissioner of Excise Duty (Appeals). During the year, Central Excise and Service Tax Appealate Tribunal (CESTAT) has dismissed the appeal filed by the department. Based on the favourable order by CESTAT during the year, the Excise department (Commissioner) has passed orders for dropping their demand notices. Based on the above orders of CESTAT, the Company has Nil contingent liability as on 31st March, 2018.
1. Employee benefits
i) Defined contribution plans
The Company makes contribution towards employees'' provident fund and employees'' state insurance plan scheme. Under the schemes, the Company is required to contribute a specified percentage of payroll cost, as specified in the rules of the schemes, to these defined contribution schemes. The Company recognized H136 lakhs (31st March, 2017 H136 lakhs) as provident fund and H18 lakhs (31st March, 2017 H18 lakhs) as employees'' state insurance plan during the year as expense towards contribution to these plans.
ii) Defined benefit plans Gratuity scheme
The amount of gratuity has been computed based on respective employee''s salary and the years of employment with the Company. Gratuity has been accrued based on actuarial valuation as at the Balance Sheet date, carried out by an independent actuary. The amount is funded through trusts'' group gratuity schemes managed by Life Insurance Corporation of India. The Company is contributing to trusts towards the payment of premium of such group gratuity schemes.
(G) The plan assets are maintained with LIC of India Gratuity Scheme. The details of investment maintained by LIC are not available and have therefore not been disclosed.
(H) The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
(I) The employer''s best estimate of contributions expected to be paid in next financial year is not ascertained and hence not disclosed above.
(J) The average expected future working life of members of the defined benefit obligation as at 31st March, 2018 is 23.44 years (as at 31st March, 2017: 23.51 years)
2 Segment reporting
Based on the guiding principles given in Ind AS 108 on " Operating Segments" the Company''s business activity falls within a single operating segment, namely Snack Foods, the disclosure requirements in terms of Ind AS 108 on operating segment are not applicable.
3 Long-term contracts
The Company does not have any long term contracts including derivative contracts for which there is any material foreseeable losses as at 31st March, 2018.
4. Share based payments
The Compensation Committee of Board of Directors of the Company has granted options to the employees pursuant to DFM Foods Employee Stock Option Plan-2014 (''the plan'') on 31st July, 2014. These options were granted at Rs.291.00, being the latest available closing market price prior to the date of grant of options in accordance with SEBI guidelines. The quoted price of share on grant and the exercise price of option were Rs.335.30 and Rs.291.00 respectively. The Company is following fair value method to amortise the compensation expense and accordingly recognised an expense of Rs.32 lakhs for the year ended 31st March, 2018 (Previous year Rs.14 lakhs).
In respect of options granted under the Employees Stock Option Plan-2014 in accordance with Indian Accounting Standard (IND AS 102) employee share-based payments, the details of Options outstanding is as under:
Fair value of share options:
The weighted average fair value of stock options granted is Rs.194.96. The fair value at grant date is determined using the Black-Scholes valuation method which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. The following tables list the inputs used for fair valuation of options for the ESOP plans:
*The decision of Compensation committee w.r.t. vesting of 20,000 options for the year 2017-18 is pending.
#The Compensation committee in its meeting decided that no option be vested for financial year 2016-17, the options so lapsed may be clubbed in subsequent vesting based upon the cumulative performance in the subsequent years and accordingly will be recognized as expense in the year in which the performance achieved.
Notes:
1. Vesting of options is a function of achievement of performance criteria or any other criteria as specified by the Nomination and Remuneration Committee and communicated in the grant letter.
2. During the year ended 31st March, 2018, the weighted average share price of the options exercised at the date of exercise was H1616.95.
5 Capital management
The Company endeavours to optimize debt and equity balance and provide adequate strength to the Balance Sheet. The Company monitors capital on the basis of debt equity ratio.
6 Financial risk management
The Company''s activities expose it to various financial risks : Credit risk, Liquidity risk and Market risk.
7 Credit risk management
The Company has negligible credit risk as it follows policy of sale against advance payments only, the credit risk is only limited to advance to capital goods vendors and security deposits . The Company continuously reviews and monitors the same and there is no write - off or provisions against advances and deposits.
8. Liquidity risk management
(a) The Company manages liquidity by ensuring control on its working capital which involves adjusting production levels and purchases to market demand and daily sales of production and advances from customers. It also ensures adequate credit facilities sanctioned from banks to finance the peak estimated funds requirements. The working capital credit facilities are continuing facilities which are reviewed and renewed every year.
(c) Sensitivity
With respect to the above unhedged exposure the impact of sensitivity is insignificant.
Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2 Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly Level 3 Inputs are unobservable inputs for the asset or liability.
9 Transition to Ind AS - Principle and reconciliation
These financial statements for the year ended 31st March, 2018, are the Company''s first annual financial statements prepared in accordance with Ind AS. The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31st March, 2018, comparative information presented in these financial statements for the year ended 31st March, 2017 and in the preparation of an opening Ind AS Balance Sheet as at 1st April, 2016 (the date of transition). In preparing its opening Ind AS Balance Sheet, the Company has adjusted/reclassified the amounts reported previously in financial statements prepared in accordance with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (The Act) and other relevant provisions of the Act (Previous GAAP) to comply with Ind AS. An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following notes.
10. Exemptions on first time adoption of Ind AS 101 (i) Share-based payment transactions
The Company has opted not to apply Ind AS 102 "Share-based Payment" to equity instruments that vested before date of transition to Ind ASs.
(ii) Property, plant and equipment, intangible assets and investment property at deemed cost
The Company has opted to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value and use that carrying value as its deemed cost.
11. The major reasons for adjustments in Previous GAAP numbers are as under
(i) Forward exchange contracts/derivative instruments
As per Ind AS 109, the Company has fair valued all forward contracts on transition date and difference between the fair value of such contracts and previous GAAP carrying amount have been recognised in the retained earnings in the opening Ind AS Balance Sheet.
(ii) Borrowings
Under previous GAAP, transaction costs incurred in connection with borrowings were charged to profit or loss as and when incurred. Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in profit or loss over the tenure of the borrowings as part of interest expense using effective interest rate method.
(iii) Investment in mutual funds
As per Ind AS 109, the Company has fair valued investment in mutual funds on transition date and difference between the fair value of such investment and previous GAAP carrying amount have been recognised in the retained earnings in the opening Ind AS Balance Sheet.
(iv) Share based payments
As per Ind AS 102, the Company has amortised the expense for share based payment based on fair value method and vesting period wise on transition date and difference between the expense as per Ind AS 102 and expense as per previous GAAP have been recognised in the retained earnings in the opening Ind AS Balance Sheet.
(v) Export promotion capital goods scheme
Under previous GAAP, the Company was disclosing export obligation as commitment in notes to accounts. Under Ind AS, the Company has reversed the benefit of EPCG by way of grossing up the Property, Plant and Equipments balance (net of accumulated depreciation) on transition date and recognition of deferred government grant to the extent of obligation not yet fulfilled.
(vi) Deferred tax
Deferred tax on account of Ind AS adjustments on transition date are recognised in the retained earnings in the opening Ind AS Balance Sheet.
(vii) Proposed dividend on equity shares and dividend tax thereon
Under previous GAAP, dividend proposed by the Board of directors after the Balance Sheet date but before the approval of the financial statements were considered as adjusting events and accordingly, it was recognised as provision in the books of account. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the Annual General Meeting. Accordingly, proposed dividend earlier recognised in the same financial year is reversed and recognised in the year of approval by the shareholders in the Annual General Meeting.
(viii) Actuarial gains/losses on defined benefit obligation
The Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under previous GAAP, the actuarial gains and losses on gratuity are charged to the statement of Profit and Loss. Under Ind AS, such actuarial gains or losses are required to be recognised in other comprehensive income. Accordingly, actuarial losses for financial year 2016-17 amounting to H30 lakhs are re-classified from Statement of Profit and Loss to ''other comprehensive income''. There is no impact on total equity as a result of this adjustment.
(ix) Leasehold land
Under previous GAAP, the leasehold land was considered as part of fixed asset and amortized over the period of the lease. As per Ind AS17, leasehold land has now been considered as operating lease and the premium paid on leasehold land is amortized over the period of the lease and unamortized amount is classified as prepayments.
(x) Government loan at a below-market rate of interest
The benefit of a Government loan at a below-market rate of interest is treated as a Government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises finance cost on loan for which the grants are intended to compensate.
12 Standards issued but not yet effective
Appendix B to Ind AS 21, Foreign Currency transactions and advance consideration: On 28th March, 2018, Ministry of Corporate Affairs ("MCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign Currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from 1st April, 2018. The Company has evaluated the effect of this on the financial statements and noted that the impact is not material to the Company.
Ind AS 115- Revenue from Contract with Customers: On 28th March, 2018, Ministry of Corporate Affairs ("MCAâ) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers.
The standard permits two possible methods of transition:
- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors
- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (cumulative catch - up approach)
The effective date for adoption of Ind AS 115 is financial periods beginning on or after 1st April, 2018. The Company will adopt the standard on 1st April, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ended 31st March, 2018 will not be retrospectively adjusted. The Management is of the view that the effect on adoption of Ind AS 115 is expected to be insignificant.
13 Previous year''s figures
Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/ disclosure.
Mar 31, 2017
1. During the year, the Excise Department has raised a demand against the Company amounting to Rs. 446 Lakhs (Previous Year Rs. 4,904 Lakhs) on account of excise duty payable on the products of the Company. The total demand outstanding as on 31st March, 2017 is Rs. 11,719 Lakhs (Previous year Rs. 1 1,273 Lakhs). As per reclassification of the products filed by the Company, Nil excise duty is livable on its products from 1st December, 2007. The Excise Department had contested the reclassification filed by the Company. The Commissioner of Excise Duty (Appeals) had upheld the reclassification in favour of the Company. Further, the Excise Department has filed an appeal with Custom, Excise and Service Tax Appellate Tribunal against the order of Commissioner of Excise Duty (Appeals) which has been dismissed by Central Excise and Service Tax Appealate Tribunal (CESTAT) subsequent to year end of which final judgment order is awaited. Based on the favourable judgment by Commissioner (Appeals) and on legal advice with reference to Supreme Court''s judgment on the similar matter, the Company has not created any provision in the books of accounts and has treated these amounts as contingent liability as on 31st March, 2017. Accordingly, CENVAT credit for the year amounting to Rs. 1,055 Lakhs (Previous year Rs. 864 Lakhs) has also not been claimed as a credit by the Company and has been charged as a part of purchase cost/expense for the year. Had the Company claimed the unveiled CENVAT credit, the balance of cenvat credit would be of Rs. 5,247 Lakhs (Previous year Rs. 4,192 Lakhs) as on 31st March, 2017 and thus the net liability of the Company after availing CENVAT credit would be Rs. 6,472 Lakhs (Previous Year Rs. 7,081 Lakhs).
2. Related party disclosures
3. Names of related parties and nature of relationship:
4. Enterprise that exercise significant influence over the Company :
The Delhi Flour Mills Co. Ltd.
5. Other related parties where transactions have taken place during the year:
6. Key managerial personnel
7. Mr. Mohit Jain (Managing Director)
8. Mr. Rohan Jain (Dy. Managing Director)
9. Enterprise over which key managerial personnel is able to exercise significant influence
10. Shri Vardhman Educational Society - Mr. Mohit Jain is member in society
11. Leases
The Company has operating lease arrangements for office premises and depots. The lease arrangements are cancellable in nature by giving notice in writing. The rent charged to Statement of Profit and Loss relating to operating leases aggregating to Rs. 391 Lakhs (Previous year Rs. 379 Lakhs).
12. Segment reporting
As the Company''s business activity falls within a single business segment, namely Snacks Food, the disclosure requirements in terms of Accounting Standard (AS) 17 on segment reporting are not applicable.
13. Long-term contracts
The Company does not have any long term contracts including derivative contracts for which there is any material foreseeable losses as at 31st March, 2017.
14. Employee share based payments
The Compensation Committee of Board of Directors of the Company has granted options to the employees pursuant to DFM Foods Employee Stock Option Plan 2014 (''the plan'') on 31st July, 2014. These options were granted at Rs. 291, being the latest available closing market price prior to the date of grant of options in accordance with SEBI guidelines. The quoted price of share on grant and the exercise price of option were Rs. 335.30 and Rs. 291 respectively. The Company is following intrinsic value of method to amortize the compensation expense and accordingly recognized an expense of Rs. 5 Lakhs for the year ended 31st March, 2017 (Previous year Rs. 9 Lakhs).
In respect of options granted under the DFM Foods Employee Stock Option Plan 2014 in accordance with Guidance Note on Accounting for Employee Share-based Payment issued by the Institute of Chartered Accountants of India, the details of Options outstanding is as under:
15. Proposed Dividend
The Board of Directors has recommended a dividend of Rs. 5/- per equity share of face value of Rs.10/- each i.e. 50% for the year ended 31st March, 2017 subject to the approval of the shareholders at the Annual General Meeting of the Company. Pending approval of the shareholders, the effect of the same has not been considered in the financial statements based on the provisions of Accounting Standard 4 - Contingencies and events occurring after the Balance sheet date.
16. Previous year''s figures
Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.
Mar 31, 2016
Note:
a) Defined contribution plans
The Company makes contribution towards employees'' provident fund and
employees'' state insurance plan scheme. Under the schemes, the Company
is required to contribute a specified percentage of payroll cost, as
specified in the rules of the schemes, to these defined contribution
schemes. The Company recognized Rs. 108 Lakhs (31st March, 2015 Rs. 92
Lakhs) as provident fund and Rs. 15 Lakhs (31st March, 2015 Rs. 17
Lakhs) as employees'' state insurance plan during the year as expense
towards contribution to these plans.
b) Defined benefit plans Gratuity scheme
The amount of gratuity has been computed based on respective employee''s
salary and the years of employment with the Company. Gratuity has been
accrued based on actuarial valuation as at the balance sheet date,
carried out by an independent actuary. The amount is funded through
trusts'' group gratuity schemes managed by Life Insurance Corporation of
India. The Company is contributing to trusts towards the payment of
premium of such group gratuity schemes.
Compensated absences
Compensated absences represent earned leaves. Long term compensated
absences have been provided on accrual basis based on year end
actuarial valuation and short term compensated absences on actual
basis.
(i) During the year, the Excise Department has raised a demand against
the Company amounting to Rs. 4,904 Lakhs (Previous Year Rs. 2,214
Lakhs) on account of excise duty payable on the products of the
Company. The total demand outstanding as on 31st March, 2016 is Rs. 1
1,273 Lakhs (Previous year Rs. 6,369 Lakhs). As per reclassification of
the products filed by the Company, Nil excise duty is leviable on its
products from 1st December, 2007. The Excise Department had contested
the reclassification filed by the Company. The Commissioner of Excise
Duty (Appeals) had upheld the reclassification in favour of the
Company. Further, the Excise Department has filed an appeal with
Custom, Excise and Service Tax Appellate Tribunal against the order of
Commissioner of Excise Duty (Appeals). Based on the favourable judgment
by Commissioner (Appeals) and on legal advice with reference to Supreme
Court''s judgement on the similar matter, the Company has not created
any provision in the books of accounts and has treated these amounts as
contingent liability. Accordingly, CENVAT credit for the year amounting
to Rs. 864 Lakhs (Previous year Rs. 920 Lakhs) has also not been claimed
as a credit by the Company and has been charged as a part of purchase cost/
expense for the year. Had the Company claimed the unavailed CENVAT
credit, the balance of cenvat credit would be of Rs. 4,192 Lakhs
(Previous year Rs. 3,328 Lakhs) as on 31st March, 2016 and thus the net
liability of the Company after availing CENVAT credit would be Rs. 7,081
Lakhs (Previous Year Rs. 3,041 Lakhs).
1. Exceptional Item
During the previous year, the commercial tax department had raised a
demand of Rs. 358 lakhs (including interest of Rs. 42 lakhs) on account of
difference in VAT rates against the classification of products. The
demand pertains to the period September, 2012 till December, 2014. The
Company had estimated the tax liability till 31st March, 2015 of Rs. 406
lakhs and charged it as an exceptional item in statement of profit and
loss during the previous year.
2. Leases
The Company has operating lease arrangements for office premises and
depots. The lease arrangements are cancellable in nature by giving
notice in writing. The rent charged to Statement of Profit and Loss
relating to operating leases aggregating to Rs. 379 Lakhs (Previous
year Rs. 356 Lakhs).
3. Segment reporting
As the Company''s business activity falls within a single business
segment, namely Snacks Food, the disclosure requirements in terms of
Accounting Standard (AS) 17 on segment reporting are not applicable.
4. Long-term contracts
The Company does not have any long term contracts including derivative
contracts for which there is any material foreseeable losses as at 31st
March, 2016.
5. Employee share based payments
The Compensation Committee of Board of Directors of the Company has
granted options to the employees pursuant to DFM Foods Employee Stock
Option Plan-2014 (''the plan'') on 31st July, 2014. These options were
granted at Rs. 291 per share, being the latest available closing market
price prior to the date of grant of options in accordance with SEBI
guidelines. The quoted price of share on grant date and the exercise
price of option were Rs. 335.30 and Rs. 291 respectively. The Company
is following intrinsic value of method to amortise the compensation
expense and accordingly recognised an expense of Rs. 9 lakhs for the
year ended 31st March, 2016.
6. Previous year''s figures
Previous year''s figures have been regrouped / reclassified wherever
necessary to correspond with the current year''s classification /
disclosure.
Mar 31, 2014
NOTE 1 : CORPORATE INFORMATION
DFM FOODS LIMITED (''the Company'') is a public limited company
incorporated under the provisions of the Companies Act, 1956 on March
17, 1993. The shares of the Company are listed on Bombay Stock Exchange
(BSE). The Company is engaged in manufacturing and sale of Snack Foods.
The Company has manufacturing facilities in India and sells its
products under the brand name "CRAX" & "NATKHAT".
As at As at
March 31, 2014 March 31, 2013
NOTE 2 : CONTIGENT LIABLITIES
In respect of claims not
acknowledged as debts
(i) Sales Tax 2 2
(ii) Excise Duty ** 41,55 17,40
Total 41,57 17,42
** During the year, the Excise Department has raised a demand against
the Company amounting to Rs. 2414 lacs (Previous Year Rs. 400.32 lacs)
on account of excise duty payable on the products of the Company. The
total demand outstanding as on 31.03.2014 is Rs. 4155 lacs (Previous
year Rs. 1740 lacs). As per reclassification of the products filed by
the Company, nil excise duty is leviable on its products from
01.12.2007. The Excise Department had contested the reclassification
filed by the Company. The Commissioner of Excise Duty (Appeals) had
upheld the reclassification in favour of the Company. The Excise
Department has raised the abovementioned demand and filed an appeal
with Custom, Excise and Service Tax Appellate Tribunal. Based on the
favourable judgment by Commissioner (Appeals) and on legally advice,
the Company has not created any provision in its accounts and has
treated these amounts as contingent liability. Accordingly, CENVAT
credit for the year amounting to Rs. 842.04 lacs (Previous year Rs.
615.72 lacs) has also not been claimed as a credit by the Company, but
has been charged as part of purchase cost/expense for the year. The
balance unavailed CENVAT credit as on 31.03.2014 is Rs. 2407.52 lacs
(Previous year Rs. 1565.48 lacs). The net liability of the Company
after availing CENVAT credit would be Rs.1747.48 lacs (Previous Year
Rs. 174.52 lacs).
NOTE 3 : RELATED PARTY DISCLOSURES_
1. Names of related parties and nature of relationship:
a) Enterprise where control exists : Enterprise that controls the
Company
The Delhi Flour Mills Co. Ltd.
b) Other related parties where transactions have taken place during the
year: (i) Key managerial personnel
(a) Shri R. P. Jain (Chairman - ceased with effect from November 8,
2013)
(b) Shri Mohit Jain (Managing Director)
(c) Shri Rohan Jain (Whole time Director)
NOTE 4: SEGMENT REPORTING_
As the Company''s business activity falls within a single business
segment, namely Snacks Food, the disclosure requirements in terms of
Accounting Standard (AS) 17 on segment reporting are not applicable.
NOTE 5 : TRANSFER PRICING
The Company is in the process of establishing a comprehensive system of
maintenance of information and documents as required by the transfer
pricing legislation under Sections 92-92F of the Income Tax Act, 1961.
Since the law requires existence of such information and documentation
to be contemporaneous in nature, the Company is in the process of
updating the documentation for the domestic transactions entered into
with the associated enterprises during the financial year and expects
such records to be in existence latest by the due date as required
under law. The management is of the opinion that its domestic
transactions with associated enterprises are at arm''s length and the
transfer pricing legislation under Section 92-92F of the Income Tax
Act, 1961 will not have any impact on the financial statements,
particularly on the amount of tax expense and that of provision of
taxation, if any.
NOTE 6 : PREVIOUS YEAR''S FIGURES
Previous year''s figures have been regrouped/ reclassified wherever
necessary to correspond with the current year''s classification/
disclosure.
Mar 31, 2013
NOTE 1 : CORPORATE INFORMATION
DFM FOODS LIMITED is engaged in the manufacture and sale of Snack
Foods. The Company has manufacturing facilities in India and sells its
products under the brand name "CRAX" & "NATKHAT". The Company is a
public limited company incorporated under the provisions of the
Companies Act, 1956. It is listed on the Bombay Stock Exchange (BSE).
Year ended Year ended
March 31, 2013 March 31, 2012
NOTE 2 : CONTINGENT
LIABILITIES
Contingent liabilities not
provided for in respect of :
a) Counter Guarantees
given against Bank
Guarantees 21 21
b) In respect of claims
not acknowledged as debts
(i) Sales Tax 2 2
(ii)Excise Duty ** 17,40 13,40
Total 17,63 13,63
A) PROVIDENT FUND: Provident Fund for all the employees is deposited
with "The Delhi Flour Mills Co. Ltd. Employees Provident Fund Trust"
The Provident Fund Trust is managed in line with the Employees''
Provident Funds & Miscellaneous Provisions Act, 1952. The plan
guarantees interest at the rate notified by the Provident Fund
Authorities. The contribution by the employer and the employee together
with the interest accumulated thereon are payable by the Trust to
employees at the time of their separation from the Company or
retirement, whichever is earlier. The benefits vest immediately on
rendering of the services by the employee.
B) GRATUITY: The Company operates a gratuity plan through the " DFM
Foods Ltd. Gratuity Trust ". Every employee is entitled to a benefit
equivalent to fifteen days of the salary last drawn for each completed
year of service in line with the Payment of Gratuity Act, 1972. The
same is payable by the trust at the time of separation from the Company
or retirement, whichever is earlier. The benefits vest after five years
of continuous service.
C) LEAVE ENCASHMENT : The present value of obligation of leave
encashment is determined based on actuarial valuation using the
Projected Unit Credit Method, which recognizes each period of service
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation for
leave encashment. Short term liability is ascertained in respect of the
following year and based on respective emoluments and encashment.
NOTE 3 : PREVIOUS YEAR FIGURES
The previous year figures have been regrouped/ reclassified, wherever
necessary to conform to this year''s
Mar 31, 2012
Corporate Information
DFM FOODS LIMITED is engaged in the manufacture and sale of Snack
Foods. The Company has manufacturing facilities in India and sells its
products under the brand name"CRAX"&"NATKHAT".The Company is a public
limited company incorporated under the provisions of the Companies Act,
1956. It is listed on the Bombay Stock Exchange (BSE).
Terms / Rights attached to Equity Shares
The Company has only one class of equity shares having a par value of
Rs. 10/- per share. Each holder of equity shares is entitled to one
vote per share. The 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, equity share holders are eligible to
receive the remaining assets in proportion to their shareholding.
* Out of above deposits, Rs. 80.34 lacs are guaranteed by a Director
(March 31, 2011 Rs. 41.80 lacs) ** Vehicle Loans are secured by
hypothecation of vehicles.
There are no amounts due for payment to the Investor Education and
Protection Fund as at the year end * In pursuance with Accounting
Standard 26 on Intangible Assets the Company is of the view that the
Trade Marks held by the Company are not less than the value at which
they are stated in the Balance Sheet.The Company on the basis of
working and the calculations of future economic benefits, is of the
opinion that the value of these trade marks should not be amortised, as
the value has appreciated since their purchase by the Company.
Therefore, the Company has not charged any depreciation on these
assets.
NOTE 1
CONTINGENT LIABILITIES
Claims against the Company not acknowledged as debts
Year ended
March 31,2012 March 31,2011
Sales Tax (Entry Tax) 2 2
Excise Duty ** 13,40 8,76
Total 13,42 8,78
** During the year, the Excise Department has raised a demand against
the Company amounting to Rs. 463.53 lacs (Previous Year Rs. 347.59
lacs), on account of excise duty payable on the products of the
Company. The total demand outstanding as on 31.03.2012 is Rs. 1340 lacs
(Previous year Rs. 876.46 lacs). As per reclassification of the
products filed by the Company, nil excise duty is leviable on its
products from 01.12.2007. The Excise Department had contested the
reclassification filed by the Company. Commissioner of Excise Duty
(Appeals) had upheld the reclassification in favour of the Company. The
Excise Department has raised the abovementioned demand and filed an
appeal with Custom, Excise and Service Tax Appellate Tribunal. The
Company has not created any provision in its accounts and has treated
these amounts as contingent liability. Accordingly, CENVAT credit for
the year amounting to Rs. 321.50 lacs (Previous year Rs. 278.55 lacs)
has also not been claimed as a credit by the Company, but has been
charged as part of purchase cost for the year. The balance unavailed
CENVAT credit as on 31.03.2012 is Rs. 843.49 lacs (Previous year Rs.
521.99 lacs). The net liability of the Company after availing CENVAT
credit would be Rs. 496.51 lacs (Previous Year Rs. 354.47 lacs)
As per Accounting Standard 15 "Employee Benefits", the disclosures as
defined in the Accounting Standard are given below:
A) PROVIDENT FUND: Provident Fund for all the employees is deposited
with "The Delhi Flour Mills Co. Ltd. Employees Provident Fund Trust".
The Provident Fund Trust is managed in line with the
Employees'Provident Funds & Miscellaneous Provisions Act, 1952. The
plan guarantees interest at the rate notified by the Provident Fund
Authorities. The contribution by the employer and the employee together
with the interest accumulated thereon are payable by the Trust to
employees at the time of their separation from the Company or
retirement, whichever is earlier. The benefits vest immediately on
rendering of the services by the employee.
B) GRATUITY: The Company operates a gratuity plan through the" DFM
Foods Ltd. Gratuity Trust". Every employee is entitled to a benefit
equivalent to fifteen days of the salary last drawn for each completed
year of service in line with the Payment of Gratuity Act, 1972.The same
is payable by the trust at the time of separation from the Company or
retirement, whichever is earlier. The benefits vest after five years of
continuous service.
The estimates of rate of escalation in salary considered in actuarial
valuation, take into account inflation, seniority, promotion and other
relevant factors including supply and demand in the employment
market.The above information is certified by the actuary.
* Amount is below the rounding off norm adopted by the Company
Note: Previous year's figures have been given in brackets. *Amount is
below the rounding off norm adopted by the Company.
PREVIOUS YEAR FIGURES
The Financial Statements for the year ended March 31, 2011 had been
prepared as per the then applicable, pre- revised Schedule VI to the
Companies Act, 1956. Consequent to the notification of Revised Schedule
VI under the Companies Act, 1956, the Financial Statements for the year
ended March 31, 2012 are prepared as per Revised Schedule VI.
Accordingly, the previous year figures have also been reclassified to
conform to this year's classification. The adoption of Revised
Schedule VI for previous year figures does not impact recognition and
measurement principles followed for preparation of Financial
Statements.
Mar 31, 2011
1. Contingent Liabilities
Current Year Previous Year
(Rs.OO0's) (Rs. OO0's)
i) Claims against the Company
not acknowledged as debts
a) Sales Tax (Entry Tax) 2,41 2,41
b) Excise Duty 8,76,46 5,28,87
ii) Counter Guarantees given
for Bank Guarantees issued by
bank 17,45 17,45
iii) Estimated amount of contracts
remaining to be executed on capital
account (net of advances) are 28,47,15 62,24
iv) Liability for export obligation
under Export Promotion Credit
Guarantee 7,55,02 7,55,02
2. During the year Company has invested Rs. 50.00 lacs (Previous Year
Nil) in HSBC Mutual fund under Regular income plan. Income from such
investment has been accounted for in the Profit & Loss account.The
difference between the purchase price and the market price as on
31.03.2011 is Rs. 2.66 lacs (Previous Year Nil) has been debited to the
Profit & Loss Account.
3. During the year Company has issued 30,000 equity shares of Rs. 10/-
each at a premium of Rs. 86.20 per share to a non promoter on a
preferential basis.
4. In pursuance with Accounting Standard 26 on Intangible Assets, the
company is of the view that the Trade Marks held by the Company are not
less than the value at which they are stated in the Balance Sheet. The
Company on the basis of working and the calculations of future economic
benefits, is of the opinion that the value of these trade marks should
not be amortised, as the value has appreciated since their purchase by
the Company. Therefore, Company has not charged any depreciation on
these assets.
5. During the year, the Excise Department has raised demand against
the company amounting to Rs. 347.59 lacs (Previous Year Rs.118.61
lacs), on account of excise duty payable on the products of the
company. The total demand outstanding as on 31.03.2011 is Rs. 876.46
lacs (Previous Year Rs. 528.87 lacs). As per reclassification of the
products filed by the company, nil excise duty is leviable on its
products from 01.12.2007. The excise department had contested the
reclassification filed by the company. Commissioner of Excise Duty
(Appeals) had upheld the reclassification in favour of the company. The
excise department has raised the above mentioned demand and filed an
appeal with Custom, Excise and Service Tax Appellate Tribunal. The
company has not created any provision in its accounts and has treated
these amounts as contingent liability. Accordingly CENVAT credit for
the period/year amounting to Rs. 278.55 lacs (Previous Year Rs. 98.72
lacs) has also not been claimed as a credit by the Company but has been
charged as part of purchase cost for the year. The balance unavailed
CENVAT credit as on 31.03.2011 is Rs. 521.99 lacs (Previous year Rs.
243.43 lacs).
6. RELATED PARTY DISCLOSURE
(1) Relationships
(a) Where Control Exists : The Delhi Flour Mills Co. Ltd.
(b) Key Management Personnel : (i) Shri R.P.Jain, Chairman
(ii) Shri Mohit Jain (Whole-time
Director)
(iii) Shri Rohan Jain
(Executive Director)
(c) Fully Owned Subsidiary
Company : Achilles Retail Ventures Pvt. Ltd.
(For part of the year)
7. On the basis of confirmation obtained from suppliers who have
registered themselves under the Micro Small Medium Enterprises
Development Act, 2006 (MSMED Act, 2006) and based on the information
available with the Company, the balance due to Micro & Small
Enterprises as defined under the MSMED Act, 2006 is Rs. 204.05 lacs
(Previous Year Rs. 141.07 lacs). Further, no interest during the year
has been paid or is payable under the terms of the MSMED Act, 2006.
8. SECURED LOANS
a) Term Loans and Working Capital facility granted by Punjab & Sind
Bank are secured by an equitable mortgage of Company's property at
C-40, Meerut Road Industrial Area, Ghaziabad and hypothecation of all
the Immovable / Movable fixed assets, present and future, of the
Company. The above are also guaranteed by the Managing Director.
b) Term Loan of HDFC bank is secured by first and exclusive charge on
the Land and building acquired by the Company. This is also guaranteed
by the Managing Director.
c) No guarantee commission or any other benefits have been paid to the
Managing Director for personal guarantee given by him.
9. The Company has hedged its foreign exchange liability payable with
respect to the acquisition of the Capital goods.The exchange rate
variation as on 31.03.2011 has been adjusted to the Profit & Loss
Account. Exchange loss for the year worked out to Rs. 39.83 lacs
(Previous year Rs. 25.55 lacs) which has been debited to Profit & Loss
Account.
10. The disclosures required under Accounting Standard 15 "Employee
Benefits" notified in the Companies (Accounting Standards) Rules, 2006
are given below:
Provident Fund
The Company as per the provisions of Employee's Provident Fund and
Miscellaneous Provisions Act, 1952 as an employer makes good the
deficiency, if any, in its Provident Fund Trust on a year to year
basis.
Gratuity
The employees'gratuity fund scheme is managed by a trust through
Metlife Company Limited. The valuation is undertaken by the insurance company
and the shortfall of liability is paid as premium for the year and is
written off as an expense in the profit and loss account for the year.
Leave encashment
The present value of obligation of leave encashment is determined based
on actuarial valuation using the Projected Unit Credit Method, which
recognizes each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build
up the final obligation for leave encashment Short term liability is
ascertained in respect of the following year and based on respective
emoluments and encashment.
Mar 31, 2010
1. Contingent Liabilities
Current Year Previous Year
Contingent liabilities not provided for in respect of:- (Rs. 000s)
(Rs. 000s) i) Claims against the Company not acknowledged as debts
a) Sales Tax (Entry Tax) 2,41 2,41
b) Excise Duty 5,28,87 4,10,25
c) Income Tax 70 --
ii) Counter Guarantees given
for Bank Guarantees issued by bank 17,45 --
iii) Estimated amount of contracts
remaining to be executed on
capital account (net of
advances) are 62,24 4,33,69
2. In pursuance with Accounting Standard 26 on Intangible Assets, the
company is of the view that the Trade Marks held by the Company are not
less than the value at which they are stated in the Balance Sheet. The
Company on the basis of working and the calculations of future economic
benefits, is of the opinion that the value of these trade marks should
not be amortised, as the value has appreciated since their purchase by
the Company. Therefore Company has not charged any depreciation on
these assets.
3. During the year, the Excise Department has raised demand against
the company amounting to Rs. 118.61 lacs (Pr. Year Rs. 286.33 lacs), on
account of excise duty payable on the products of the company. The
total demand outstanding as on 31.03.2010 is Rs. 528.87 Lacs (Pr. year
Rs. 410.25 Lacs). As per reclassification of the products filed by the
company, nil excise duty is leviable on its products from 01.12.2007.
The excise department had contested the reclassification filed by the
company. Commissioner of Excise Duty (Appeals) had upheld the
reclassification in favour of the company. The excise department has
raised the abovementioned demand and filed an appeal with Custom,
Excise and Service Tax Appellate Tribunal. The company has not created
any provision in its accounts and has treated these amounts as
contingent liability. Accordingly CENVAT credit for the period/year
amounting to Rs. 98.72 lacs (Pr. year Rs. 109.82 lacs) has also not
been claimed as a credit by the Company but have been charged as part
of purchase cost for the year. The balance unavailed CENVAT credit as
on 31.03.2010 is Rs. 243.43 lacs (Pr. year Rs. 144.71 lacs).
4. RELATED PARTY DISCLOSURE
(1) Relationships
(a) Where Control Exists : The Delhi Flour Mills Co. Ltd.
(b) Key Management Personnel : (i) Shri R.P. Jain, Chairman
(ii) Shri Mohit Jain (Whole-time Director) (iii) Shri Rohan Jain
(Executive Director)
(c) Fully Owned Subsidiary Company : Achilles Retail Ventures Pvt. Ltd.
(For part of the year)
5. On the basis of confirmation obtained from suppliers who have
registered themselves under the Micro Small Medium Enterprises
Deelopment Act, 2006 (MSMED Act, 2006) and based on the information
available with the Company, the balance due to Micro & Small
Enterprises as defined under the MSMED Act, 2006 is Rs. 1,41,06,816/-
(Previous Year Rs. 71,65,135). Further, no interest during the year has
been paid or is payable under the terms of the MSMED Act, 2006.
6. SECURED LOANS
a) During the year , a term loan was sanctioned by HDFC Bank for
purchase of Land & Building at Roshanara
Road , Delhi and it is secured by first and exclusive charge on the
land and building acquired by the company. The above was also
guaranteed by the Managing Director of the company.
b) Term loan of Punjab & Sind Bank, are secured by first and exclusive
charge on the fixed assets acquired through the said term loan and it
is also guaranteed by Managing Director of the company.
c) No guarantee commission or any other benefits have been paid to the
Managing Director for personal guar- antee given by him.
d) Out of the total amount of term loan sanctioned by Punjab & Sind
Bank, the Bank has issued Letter of Comfort amounting to Rs. 5.77
Crores ( Previous year - Nil) to Standard Chartered Bank-Singapore for
the foreign exchange paid/payable by it in respect of Letter of Credits
opened for purchase of Plant & Machinery under buyer credit scheme.
7. During the year Company sold 10,000 equity shares of Rs.10/- each
of Achilles Retail Ventures Pvt. Ltd. at par. These were purchased by
the Company on 31st August, 2009. Achilles Retail Ventures Pvt. Ltd.
was a sub- sidiary company for a part of year. There was no profit /
loss on purchase / sale of this investment.
8. The Company has hedged its foreign exchange liability payable with
respect to the acquisition of the Capital goods. The exchange rate
variation as on 31.03.2010 (Previous year Rs. Nil) has been adjusted to
the Profit & Loss Account . Lxchange loss for the year worked out to
Rs. 25.55 lacs ( Previous year Nil) which has been debited to Profit &
Loss Account.
9. Previous year figures have been regrouped & reclassified, wherever
necessary.