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Notes to Accounts of Heritage Foods Ltd.

Mar 31, 2015

1. Contingent Liabilities

Contingent liabilities are identified and disclosed as per the requirements of "Accounting Standard AS-29"

Note: 2 Contingent liabilities and commitments (to the extent not provided for) (Rs. in lakhs)

As at March 31,2015 As at March 31, 2014

A. Contingent Liabilities

i. Claims against the company not acknowledged as debt :

a) Tax matters in appeal :

Income Tax 475.68 475.68

Sales Tax 166.38 141.29

The Andhra Pradesh VAT Act 201.89 201.89

b) Others 16.20 17.45

ii. Guarantees 373.99 372.86

iii. Other money for which the company is contingently liable forms under collection 379.30 82.50

(Against all the above Rs. 171.21 lakhs (Previous year : 151.21 lakhs )was paid under protest) It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of A(i) pending resolution of the respective proceedings.

B. Commitments

i. Estimated amount of contracts remaining to be executed on capital account and not 780.82 664.02

provided for (net of advances)

ii. Other commitments :

- Export obligation upto the year 2022-23 against import of capital goods under 4280.49 3247.83

EPCG scheme

Note: 2 Confirmation of balances for Trade Receivables / Payables, Loans and advances and others have been received from many parties. Wherever conformation of balances have not been received, they are subject to adjustment and reconciliation, if any.

Note.3 In the opinion of Board of Directors the assets other than fi xed assets and non-current investments have value on realization in the ordinary course of business atleast equal to the amount at which they are stated.

Note: 4 The financial statements for the year ended March 31, 2015 are prepared as per Schedule III of the Companies Act, 2013 and in or form as near as thereto.

Note: 5 Previous year figures are regrouped / reclassified, wherever necessary.

Note: 6 The amounts in the financial statements are presented in Indian Rupees in lakh


Mar 31, 2014

1. Rights, preferences and restrictions attached to equity shares

The Company has only one class of Issued, subscribed and paid up equity shares having a par value of Rs. 10/- each per share. Each holder of equity shares 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 the approval of the shareholders in the Annual General Meeting.

70,000 Equity Shares allotted as fully paid up Sweat Equity Shares for consideration other than cash to an employee of the Company during the financial year ended March 31, 2013 and 70,000 Equity Shares issued as bonus Shares during the year against these Sweat Equity Shares shall be locked in for a period of 3 years from the date of allotment.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the share holders.

Deferred Payment Liabilities

Deferred Payment Liabilities represent sales tax collected under deferrment scheme of State Government of Andhra Pradesh and is being repaid as per the sales tax deferrment scheme. The Company availed scheme for Gokul, Narketpalle and Bayyavaram Dairy plants. Sales Tax deferred in a year should be repaid at the end of 14th year for Gokul and Bayyavaram plants and 10th year for Narketpalle plant without interest and is secured by fixed assets of the respective dairy plants.

Short Term Loans from Banks

1 The short term loan outstanding as on March 31, 2014 is 999.58 lakhs (sanction limit : Rs. 1000 lakhs) (Previous year : Rs. Nil) from Kotak Mahindra Bank carries interest rate @ base rate plus 1.5% repayable in three installments on 25th day of 4th,5th and 6th month from the date of disbursement and is secured by second charge by way of extension of equitable mortgage on the property belonging to Executive Director of the Company and extension of mortgage of industrial property belonging to Vice Chairperson & Managing Director of the Company and personal guarantees of Vice Chairperson & Managing Director, Executive Director and Non-Executive Director.

2. The short term loan outstanding as on March 31, 2014 is 1185.79 lakhs (Sanction limit: Rs. 3000 lakhs) (Previous year : Rs. Nil) from Andhra Bank carries interest rate @ base rate plus 2.75% repayable in three equal monthly installments commencing from the end of fourth month from the date of disburse- ment and is secured by first pari passu charge on the current assets of the Company and extension of first pari passu charge on net fixed assets of the Company as a collateral security alongwith consortium banks.

3. The Company has overdraft facility outstanding as on March 31, 2014 of Rs. 40.77 lakhs (Previous year: Rs. 94.50 lakhs) (Sanction limit: Rs. 100 lakhs) from Kotak Mahindra Bank carrying interest @ 12.50% and secured by exclusive mortgage of property belonging to Executive Director of the Company and personal guarantees of Vice Chairperson & Managing Director, Executive Director and one of the Non-Executive Director.

Contingent liabilities and commitments (to the extent not provided for)

(Rs. in lakhs) As at As at March 31, 2014 March 31, 2013

A. Contingent Liabilities

i. Claims against the company not aknowledged as debt :

a) Tax matters in appeal :

Income Tax 475.68 423.24 Sales Tax 141.29 150.06 The Andhra Pradesh VAT Act 201.89 127.07 Excise duty - 0.85

b) Others 17.45 29.88

ii. Guarantees 372.86 276.56

iii. Other money for which the company is contingently liable ''C'' forms under collection 82.50 59.27

B. Commitments

i. Estimated amount of contracts remaining 664.02 609.11 to be executed on capital account and not provided for (net of advances)

ii. Other commitments :

- Export obligation upto the year 2022-23 against import of capital goods 3247.83 3913.69 under EPCG scheme

* Managerial remuneration of 180.44 lakhs provided during the year 2012-13 to the Executive Director has exceeded the limits specified by the Central Government by Rs. 112.33 lakhs. The same has been paid during the year 2013-14 with the approval .

* Confirmation of balances for Trade Receivables / Payables, Loans and advances and others have been received from many parties. Wherever conformation of balances have not been received, they are subject to adjustment and reconciliation, if any.

* The financial statements for the year ended March 31, 2014 are prepared as per revised Schedule VI of the Companies Act, 1956 and in or form as near as thereto. The items which are not applicable as per revised Schedule VI are not disclosed.

* Previous year figures are regrouped / reclassified, wherever necessary.

* The amounts in the financial statements are presented in Indian Rupees in lakhs.


Mar 31, 2013

Note: 1

Managerial remuneration provided during the year 2012-13 is Rs.180.44 lakhs to the Executive Director has exceeded the limits specified by the Central Government by Rs.112.33 lakhs. The Company has filed the application to the Central Government seeking its clarification for the remuneration provided over the limits earlier specified. However the said excesss remuneration is payable subject to the approval of the Central Government.

Note: 2

M/s SKIL Raigaim Power (India) Limited is an associate of the Company as on March 31, 2013 (It ceased to be subsidiary of the Company on March 27, 2012 and became an associate).

Note: 3 Confirmation of balances for Trade Receivables/Payables, Loans and advances and others have been received from many parties. Wherever conformation of balances have not been received, they are subject to adjustment and reconciliation, if any.

Note: 4 The financial statements for the year ended March 31, 2013 are prepared as per revised Schedule VI of the Companies Act, 1956 and in or form as near as thereto. The items which are not applicable as per revised Schedule VI are not disclosed.

Note: 5 Previous year figures are regrouped/reclassified, wherever necessary.

Note: 46 The amounts in the financial statements are presented in Indian Rupees in lakhs.


Mar 31, 2012

A) Rights, preferences and restrictions attached to equity shares

The Company has only one class of Issued, subscribed and paid up equity shares having a par value of Rs.10/- each per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the share holders.

Term Loan from Banks (Secured) inlcudes :

a) Bank of Baroda :

i) Foreign Currency Term Loan(FCTL) of Rs.6285.99 lakhs (outstanding as on March 31,2012 :Rs.1542 lakhs (Previous year: Rs.2570 lakhs)) from the Bank carries the interest @ 200 bps over 6 months US$ LIBOR (Previous year: 200 bps over 6 months US$ LIBOR). The loan is repayable in 24 quarterly installments commencing from December 2007. The loan is secured by first Pari Pasu charge on all present and future fixed assets of the Company, second pari pasu charge on current assets of the Company.

ii) Foreign Currency Non-Resident (B) Loan (FCNRB) of Rs.3206 lakhs (outstanding as on March 31,2012 :Rs.798.84 lakhs (Previous Year (rupee loan): Rs.1334 lakhs))from the Bank carries the interest @ 625 bps over 6 months US$ LIBOR (Previous year: 625 bps over 6 months US$ LIBOR). The loan is repayable in 24 quarterly installments commencing from December 2007. The loan is secured by first Pari Pasu charge on all present and future fixed assets of the Company, second pari pasu charge on current assets of the Company.

iii) Rupee Term Loan of Rs.1435 lakhs (outstanding as on March 31,2012 :Rs.704.03 lakhs (Previous year: Rs.991.03 lakhs) from the Bank carries the interest @ base rate plus 4% (Previous year: base rate plus 4%). The loan is repayable in 20 quarterly installments commencing from May 2009 . The loan is secured by first Pari Pasu charge on all present and future fixed assets of the Company, second pari pasu charge on current assets of the Company.

b) Andhra Bank :

i) Rupee term loan of Rs.2500 lakhs (outstanding as on March 31,2012 :Rs.850.15 lakhs (Previous year: Rs.1271.52 lakhs)) carries the interest @ BMPLR minus 1 plus 0.25 for Dairy and Agri divisions (Previous year :interest @ BMPLR minus 1 plus 0.25 ) @ BMPLR for Retail division (Previous year : @BMPLR ). Loan is repayabe in 24 quarterly installments commencing from April, 2008. The loan is secured by first Pari Pasu charge on entire fixed assets (present and future) of the Company along with consortium bankers.

c) ICICI Bank

i) Rupee term loan of Rs.3000 lakhs (outstanding as on March 31,2012 :Rs.1439.96 lakhs (Previous year:Rs.2080 lakhs))carries the interest @ 1.75% per annum below the sum of I-BAR and term premia prevailing on the date plus applicable interest tax or other statutory levy, if any (Previous year :interest @ 1.75% per annum below the sum of I-BAR and term premia prevailing on the date plus applicable interest tax or other statutory levy, if any). Loan is repayabe in 21 quarterly installments commencing from April,2009. The loan is secured by first Pari Pasu charge on fixed assets of the Company and Second charge on current assets of the Company.

ii) Rupee term loan of Rs.500 lakhs (outstanding as on March 31,2012 :Rs.325 lakhs (Previous year:Rs.425 lakhs)) carries the interest @ 8 % per annum (Previous year: 8% per annum). Loan is repayabe in 20 quarterly installments commencing from August 2010. The loan is secured by first charge on fixed assets both immovable and movable excluding entire stocks of raw materials, work-in-progress, semi finished and finished goods, consumable stores and spares and such other movables including book debts, bills whether documentary or clean both present and future of the Company.

iii) Rupee term loan of Rs.1300 lakhs (outstanding as on March 31,2012 :Rs.1 137.50 lakhs (Previous year:Rs.1300 lakhs))carries the fixed rate interest @ 9.5% per annum for five years and after five years the interest rate shall be 3.20% per annum above the IBASE (Previous year: interest @ 9.5% per annum for five years and after five years the interest rate shall be 3.20% per annum above the IBASE). Loan is repayabe in 24 quarterly installments commencing from August, 2010. The loan is secured by first paripasu charge on both movable and immovable fixed assets of the Company, second charge on current assets, present and future of of the Company, along with other term lenders.

iv) Rupee term loan of Rs.2500 lakhs ( sanctioned with FCNR(B) sub-limit of Rs.2500 lakhs) (outstanding as on March 31,2012 :Rs.2500 lakhs (Previous year:Rs.Nil)) carries the rate of interest a) IBASE and spread per annum plus applicable interest tax or other statutory levy if any (Previous year: Nil ) b) For sub-limit of FCNR(B) the rate of interest 8.80% plus six months USD LIBOR (Previous year: Nil ) . Loan is repayabe in 16 quarterly installments commencing from December, 2012. The loan is secured by first paripasu charge on both movable and immovable fixed assets of the Company, second charge on current assets, present and future of other Company, along with other term lenders.

Deferred Payment Liabilities

Deferred Payment Liabilities represents sales tax collected under defferment scheme of State Government of Andhra Pradesh and is being repaid as per the sales tax defferment scheme. The Company availed scheme for Gokul, Narketpalle and Bayyavaram Dairy plants. Sales Tax deffered in a year should be repaid at the end of 14 /10th year without interest and is secured by fixed assets of the respective dairy plants.

Loans and advances from related parties

The loan carries interest @ 9% and is repayable in September, 2016 (with a role over for every 360 days).

Working Capital Loans from Banks :

The working capital loan disbursements are based on the terms of consortium lead banker i.e., Bank of Baroda. The working capital loans are secured by first pari pasu charge on current assets of the Company by way of hypothetication of raw materials, work-in-progress, finished goods, packing materials,spares, stores, with Andhra Bank and ICICI Bank Ltd., Extention of first pari pasu charge on the fixed assets of the Company to secure the working capital limits of Bank of Baroda, Andhra Bank and on second charge basis to secure the working capital limits of ICICI Bank Ltd., The total working capital limits of Rs.7500 lakhs (inlcudes FCNR(B) sub-limit from ICICI Bank Ltd., of Rs.3000 lakhs) are shared between Bank of Baroda 40%, Andhra Bank 20%, and ICICI Bank 40%. The rate of interest on working capital loan is base rate plus 2.50% for Bank of Baroda, for Andhra Bank : Base rate plus 2.75% and for ICICI Bank: IBASE plus plus spread plus applicable interest tax or other statutory levy, if any. Outstanding as on March 31, 2012 Rs.6058.44 lakhs (Previous year: Rs.6181.81 lakhs)

Short Term Loans from Banks

1. The short term working capital loan of Rs.1000 lakhs from Axis Bank Limited carries interest rate @ base rate plus 1.5% repayable after 180 days from the date of disbursement and is secured by second charge by way of extention of equitable mortgage on the commercial land of Vice Chairperson & Managing Director of the Company and personal guarantee given by Vice Chairperson & Managing Director of the Company.

2. The Company has overdraft facility of Rs. 100 lakhs from Kotak Mahindra Bank carries interest @ 12.50% which is secured by exclusive mortgage of property belonging to spouse of Executive Director of the Company and by personal guarantees of Vice Chairperson & Managing Director, Executive Director and spouse of Executive Director.

Note: 1 Contingent liabilities and commitments (to the extent not provided for)

(Rs.in lakhs)

As at As at March 31,2012 March 31,2011

A. Contingent Liabilities

i. Claims against the company not aknowledged as debt :

a) Tax matters in appeal :

Income Tax 367.68 342.28

Sales Tax 141.29 165.46

The Andhra Pradesh VAT Act * 127.07 114.00

Excise duty 3.99 Nil

b) Others 16.50 24.43

ii. Other money for which the company is contingently liable Nil

'C' forms under collection 64.22 79.18

B. Commitments

i. Estimated amount of contracts remaining to be executed on capital 489.11 825.42 account and not provided for (net of advances)

ii. Other commitments :

- Export obligation upto the year 2021-22 against import of capital goods 3956.58 4315.58 under EPCG scheme

Counter guarantees given by the Company in respect of Bank guarantees of Rs. 433.32 lakhs(Previous year: Rs.363.13 lakhs) are not treated as contingent liability.

Note: 2

M/s SKIL Raigaim Power (India) Limited, a subsidiary of the Company ceased to be subsidiary on March 27, 2012 and it continues to be an associate as on March 31, 2012.

Note: 3 Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

The particulars of outstanding (for more than 45 days) to Micro, Small and Medium Scale business enterprises are given below

Note: 4 Confirmation of balances for Trade Receivables / Payables, Loans and advances and others have been received from many parties. Wherever conformation of balances have not been received, they are subject to adjustment and reconciliation, if any.

Note: 5 There are no extra ordinary items during the year 2011 - 12.

Note: 6 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 notificaiton under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per revised Schedule VI and in or form as near as thereto. Accordingly, the previous year figures have also been reclassified to conform to the current year's classification.

Note: 7 The amounts in the financial statements are presented in Indian Rupees in lakhs


Mar 31, 2010

As at As at 1. Particulars 31.03.2010 31.03.2009 Rs. Rs. A. Contingent Liabilities not provided for (a) Tax matters in appeal : i) Income Tax 34227781 26649931 ii) Sales Tax 12669000 12669000 iii) The Andhra Pradesh VAT Act 11399898 11399898 (b) Bank Guarantees 29098547 15731047 (c) C Forms under collection 10419000 8773812

B. Estimated amount of Contracts remaining to be executed on 26630336 37404493 capital account and not provided for (Net of Advances) C. Claims not acknowledged as debts Nil 71015

2. SECURED LOANS

Term Loan: The term loan includes Rs.16.88 crores from Andhra Bank and Rs.18.73 crores from Bank of Baroda under FCNR(B) Loan and Rs.35.98 Crores from Bank of Baroda under FCTL and Rs.32.20 crores from ICICI Bank and Rs.12.78 Crores from Bank of Baroda under Rupee Term Loan fully secured by first Pari Pasu charge on the present and future fixed assets of the Company and second Pari Pasu charge on currrent assets of the Company. The loan availed from ICICI Bank of Rs.30 Crores is further secured by pledging part of the shares of promoters.

Working Capital Loan: The Company has availed working capital facilities from Bank of Baroda, Andhra Bank and ICICI Bank of Rs.58.95 Crores (Previous year : Rs.50.79 Crores) secured by hypothecation of stocks and book debts on pari pasu basis and for Bank of Baroda and Andhra Bank also secured by equitable mortgage of fixed assets.

3. UNSECURED LOANS :

Amount shown under the head Unsecured Loans represents sales tax collected under deferment scheme of State Government of Andhra Pradesh Rs.8.92 crores (Previous year Rs.7.59 crores) and is being repaid as per the Sales Tax Deferment Scheme.

4. Warrants money forfeited: Out of 16,00,000 warrants alloted to promoters, 539500 warrants were converted into equity shares during the financial year 2007-08. The remaining warrants of 10,60,500 were not converted within the specified time and hence the money collected of Rs.3,18,68,800 towards 10% of value of warrants alloted was forfeited during the current financial year.

5. As per the Accounting Standards AS-15 -"Employee Benefits" the disclosures of the Employee benefits as defined in the Accounting Standard are given below

6. IMPAIRMENT OF ASSETS :In accordance with AS-28 the Company has identified and accounted for loss on assets impaired to the extent of Rs.69734/-

7. Confirmation of balances from Sundry Debtors/ Creditors, Loans and advances and others have been received from many parties. Wherever confirmation of balances have not been received, they are subject to adjustment and reconciliation if any.

8. There are no extraordinary items incurred by the company during the year 2009-10.

9. Paise is rounded off to the nearest Rupee.

10. The company has presented the financial results as per schedule VI of Companies Act,1956 and in or form as near as thereto. The items which are not applicable as per schedule VI are not disclosed.

11. Previous Year figures are regrouped wherever necessary.

 
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