Home  »  Company  »  Kwality  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Kwality Ltd.

Mar 31, 2018

1. Nature of principal activities

Kwality Limited (“the Company”) a public company limited by shares was incorporated under the provisions of the Companies Act, 1956 on 21 August 1992 and domiciled in India. The Company is engaged in manufacturing/processing and sale of milk, milk products and dairy products. The Company is listed both on Bombay Stock Exchange and National Stock Exchange. The Company has manufacturing facilities at Uttar Pradesh, Haryana and Rajasthan. The Company operates both in domestic and international markets. The registered office of the Company is situated at KDIL House, F-82, Shivaji Place, Rajouri Garden, New Delhi 110027, India.

2. General information and statement of compliance with Ind AS

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards as notified under section 133 of the Companies Act 2013 read with the Companies (Indian Accounting Standards) Rules 2015 as amended from time to time. The Company has uniformly applied the accounting policies during the periods presented.

The standalone financial statements are presented in Indian rupees (‘INR’) and all values are rounded to two decimal places of lakhs, except when otherwise indicated.

The financial statements for the year ended 31 March 2018 were authorized and approved for issue by the Board of Directors on 28 May 2018.

3. Basis of accounting

The financial statements have been prepared on going concern basis under the historical cost basis except for the following -

- Certain financial assets and financial liabilities which are measured at fair value; and

- Share based payments which are measured at fair value of the options;

4. Standards issued but not yet effective and have not been adopted early by the Company

Information on new standards, amendments and interpretations that are expected to be relevant to the financial statements is provided below.

Ind AS 115 ‘Revenue from Contracts with Customers’ (Ind AS 115)

The new standard on revenue recognition overhauls the existing revenue recognition standards and will replace Ind AS 18 - Revenue and Ind AS 11 - Construction contracts. The new standard provides a control-based revenue recognition model and provides a five steps application principle to be followed for revenue recognition:

^Identification of the contracts with the customer

ii. Identification of the performance obligations in the contract

iii. Determination of the transaction price

iv. Allocation of transaction price to the performance obligations in the contract (as identified in step ii)

v. Recognition of revenue when the Company satisfies a performance obligation.

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:

On March 28, 2018, Ministry of Corporate Affairs (“MCA”) 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 April 1, 2018.

The effective date of the new standards has been notified by the MCA as 1 April 2018. The management is yet to assess the impact of these new standards on the Company’s financial statements.

In the previous year the allottees at Sr.no.1 & 2 exercised their right to convert the Convertible Warrants into equity shares after paying the balance amount and accordingly 51,81,347 equity shares each were issued to Mr Sidhant Gupta and Sidhant and Sons HUF for an aggregate consideration of INR 2,500 each.

During the year the allottees at Sr.no.3 exercised their right to convert the Convertible Warrants into equity shares after paying the balance amount and accordingly 21,69,762 equity shares were issued to Bennett, Coleman and Company Limited for an aggregate consideration of INR 2500.

Utilisation of proceeds of Convertible Warrants converted: The balance amount of INR 1875 received during the year against Convertible Warrants has been utilised towards advertisement in print & non-print media.

(i) Nature and purpose of other reserves

Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with provisions of the Companies Act, 2013.

Share application money pending allotment

Share application money pending allotment represents amount received from employees for issue of shares under employee stock option plan.

Other comprehensive income

Remeasurements gains/losses on post employment benefits are recorded in the other comprehensive income.

Employee’s stock option reserve

The reserve is used to recognise the grant date fair value of the options issued to employees under Company’s employee stock option plan.

Debenture Redemption Reserve

The reserve is created out of profits for the purpose of redemption of debenture as per requirement under Company ActRs. 2013.

Note - 36 Capital management

(a) Risk management

The Company’s objectives when managing capital are to:

- Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- Maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. Consistent with others in the industry, the Company monitors capital on the basis of the following gearing ratio.

(i) Loan covenants

Under the terms of the major borrowing facilities, the group is required to comply with following financial covenants:

- the gearing ratio must be not more than 50% and

- the ratio of net finance cost to EBITDA coverage must be not less than 2 times considering Company capitalisation phase.

The Company has complied with these covenants throughout the reporting period. As at 31 March 18 the ratio of net finance cost to EBITDA was 2.16 ( 31 March 17- 2.50)

These assumptions were developed by management with the assistance of independent actuarial appraisers. Discount factors are determined close to each year-end by reference to government bonds of relevant economic markets and that have terms to maturity approximating to the terms of the related obligation. Other assumptions are based on management’s historical experience.

Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972, as amended. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employee’s last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. Gratuity plan is a non-funded plan.

These assumptions were developed by management with the assistance of independent actuarial appraisers. Discount factors are determined close to each year-end by reference to government bonds of relevant economic markets and that have terms to maturity approximating to the terms of the related obligation. Other assumptions are based on management’s historical experience.

The estimates of future salary increases, inflation, seniority, promotion and other relevant factors, considered in actuarial valuation such as supply and demand in the employment market. The rate used to discount post employment benefit obligations (both funded and unfunded) should be determined by reference to market yields at the balance sheet date on government bonds. The currency and term of the government bonds should be consistent with the currency and estimated term of the post employment benefit obligations.

Note 5

Share based payments

Company has reserved issuance of 1,00,00,000 (Previous Year: 1,00,00,000) Equity Shares of INR 1 each for offering to the eligible employees of the Company and its subsidiaries under Employees Stock Option Plan 2014 (ESOP 2014). During the year the Company has granted 27,36,000 (Grant IV) Options at a price of INR 50 and 5,00,000 Options (Grant V) at a price of INR 10 per option (Previous Year 43,000 option at a price of INR 38 per option) plus all applicable taxes. The options would vest over a period of 1 year. Once vested, the options remains exercisable for a period of 5 years. The other disclosure in respect of the ESOP Scheme are as under:

The Company’s risk management is carried out by a central treasury department (of the group) under policies approved by the board of directors. The board of directors provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity.

A Credit Risk

Credit risk is the risk that counter party will not meet it’s obligation under a financial instrument or customer contract, leading to a financial loss. Credit risk arises from cash and cash equivalents, trade receivables, investments carried at amortised cost and deposits with banks and financial institutions.

Credit risk management

The finance function of the Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.

A: Secured, negligible B: Partly secured C: Unsecured D: Doubtful

The risk parameters are same for all financial assets for all period presented. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an on-going basis throughout each reporting period. In general, it is presumed that credit risk has significantly increased since initial recognition if the payments are more than 30 days past due. A default on a financial asset is when the counterparty fails to make contractual payments when they fall due. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.

Credit risk exposure

Provision for expected credit losses

The Company provides for expected credit loss based on lifetime expected credit loss mechanism for loans, deposits and other investments —

B Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities. Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Maturities of financial liabilities

The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is insignificant.

C Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of change in market price. Market risk comprises three type of risk: Interest rate risk, foreign currency risk and price risk.

Foreign exchange risk

The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions (imports of materials), primarily with respect to the US Dollar, Euro etc. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company’s functional currency. The Company does not hedge its foreign exchange receivables/payables.

Interest rate risk

The Company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

The Company’s variable rate borrowing is subject to interest rate. Below is the overall exposure of the borrowing:

Under the company risk management policy, the management closely monitor the viable options and accordingly currently discontinued the interest rate SWAP agreement as it became loss scenario.

Price risk

The Company does not have any price risk as it does not hold any material investment.

Note - 6

Fair value measurements

(i) Fair value hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for financial instruments.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data rely as little as possible on entity specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(ii) Financial assets and financial liabilities measured at fair value — recurring fair value measurements

(iii) Financial instruments measured at amortised cost

- The carrying amounts of trade receivables, trade payables, capital creditors and cash and cash equivalents are considered to be the same as their fair values, due to their short-term nature.

- The fair value of security deposits were calculated based on cash flows discounted using current lending rate which is not materially different from the rates at which they were initially measured. Therefore the carrying value is considered to be fair value of the security deposits.

- The fair value of non-current borrowings are based on discounted cash flows using current borrowing rate which is not materially different from the rates at which they were initially measured. Therefore the carrying value is considered to be fair value of the non-current borrowings.

(iv)Valuation process and technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

(a)The use of quoted market prices or dealer quotes for similar instruments

(b)The fair value of the remaining financial instruments is determined based on adjusted net assets method.

-Risk adjustments specific to the counterparties (including assumptions about credit default rates) are derived from credit risk grading determined by the Company’s internal credit risk management group.

All of the resulting fair value estimates are included in level 2.

Note 1 :

The fair value of derivative financial instrument pertains to upside interest payable to lenders of the Company has been certified by a practicing chartered accountant. The fair value of derivative financial instruments is based on quoted prices and inputs that are directly or indirectly observable in the marketplace.

Note - 7

The Company is primarily engaged in the business of processing, manufacturing and trading of milk, milk products & dairy products, which as per Indian Accounting Standard — 108 on ‘Operating Segments’ is considered to be the only reportable business segment.

B The Company does not have revenue transactions with a single external customer amounting to 10 percent or more of Company’s reported revenues.

C The total of non-current assets other than financial instruments, investments accounted for using equity method and deferred tax assets, broken down by location of the assets, is shown below:

Note - 8

The matter between Hindustan Unilevel Limited (HUL) and Company regarding entry into each others business areas under the brand name involving the word ‘ Kwality’ is sub judice in Kolkata High Court. The subject matter took place after the Balance Sheet date.

Note - 9

The Company has in past couple of years invested in development of new manufacturing facility for production of ‘Value Added Products’ at Softa (Palwal).

In view of the said expansion and to part fund the working capital requirements there has been a delay in payment of Income Tax and interest thereon.

Note - 10

Trade payables includes foreign currency balances INR 2,54,86,696 outstanding for a more than six months from the date of goods receipt note (GRN).

Similarly Trade receivables includes foreign currency balances INR 87,81,77,366 which is pending for collection more than nine months from the date of the invoices. The Company believes that there will be no significant penalty on account of foreign exchange payable and receivable delay.

Note - 11

Income Tax search u/s 132 of Income Tax Act, 1961 was conducted on 22 August 2017. Subsequently, Company has received notices u/s 148 and 153A. Further the proceedings in this matter are yet to start. At this point of time it is not possible to predict the outcome or ascertain the demand of Tax, if any from the Income Tax Department accordingly no adjustments have been recorded in the financial statements. In addition to above notices, Company has also received two notices under section 276 (2) and 277 of Income tax Act,1961 for Assessment year 2016-17 and 2017-18 dated 12 March 2018 and 27 March 2018 for penalty on non- payment of taxes for aforesaid assessment years. However, at this stage no penalty has been imposed by department, therefore, it is not possible to predict the outcome in near future.

Note - 12

Having regard to enhanced production facility and planned funding, management is confident of meeting all its liabilities accordingly the financial statements have been prepared on a ‘going concern’ basis.

Note - 13

The figures for the previous year have been regrouped/ rearranged wherever necessary


Mar 31, 2017

1. Nature of principal activities

Kwality Limited (“The Company”) was incorporated on 21 August 1992. The Company is engaged in manufacturing/ processing and sale of milk, milk products and dairy products. The Company is listed both on Bombay Stock Exchange and National Stock Exchange. The Company is having manufacturing facility at Uttar Pradesh, Haryana and Rajasthan. The Company operates both in domestic and international markets. The registered office of the Company is situated at KDIL House, F-82, Shivaji Place, Rajouri Garden, New Delhi 110027, India.

2. General information and statement of compliance with Ind AS

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards as notified under section 133 of the Companies Act 2013 read with the Companies (Indian Accounting Standards) Rules 2015 (by Ministry of Corporate Affairs (‘MCA’)). The Company has uniformly applied the accounting policies during the periods presented.

For all periods up to and including the year ended 31 March 2016, the Company has prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP). These financial statements for the year ended 31 March 2017 are the first year for which the Company has prepared in accordance with Ind AS (see note 46 for explanation for transition to Ind AS). For the purpose of comparatives, standalone financial statements for the year ended 31 March 2016 are also prepared under Ind AS. The standalone financial statements are presented in Indian rupees (‘INR’) and all values are rounded to two decimal places of lakhs, except when otherwise indicated.

The financial statements for the year ended 31 March 2017 were authorized and approved for issue by the Board of Directors on 26 May 2017

3. Basis of accounting

The financial statements have been prepared on going concern basis under the historical cost basis except for the following -

- Certain financial assets and financial liabilities which are measured at fair value; and

- Share based payments which are measured at fair value of the options;

4. Standards issued but not yet effective and have not been adopted early by the Company

Information on new standards, amendments and interpretations that are expected to be relevant to the financial statements is provided below.

Ind AS 115 ‘Revenue from Contracts with Customers’ (Ind AS 115)

The new standard on revenue recognition overhauls the existing revenue recognition standards and will replace Ind AS 18 - Revenue and Ind AS 11 - Construction contracts. The new standard provides a control-based revenue recognition model and provides a five steps application principle to be followed for revenue recognition:

i. Identification of the contracts with the customer

ii. Identification of the performance obligations in the contract

iii. Determination of the transaction price

iv. Allocation of transaction price to the performance obligations in the contract (as identified in step ii)

v. Recognition of revenue when the Company satisfies a performance obligation.

The effective date of the new standard has not yet been notified by the MCA. The management is yet to assess the impact of this new standard on the Company’s financial statements.

(i) Nature and purpose of other reserves

Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with provisions of the Companies Act, 2013.

Share application money pending allotment

Share application money pending allotment represents amount received from employees for issue of Shares under ESOP. Other comprehensive income

Remeasurements gains/losses on post employment benefits are recorded in the other comprehensive income.

Employee’s stock option reserve

The reserve is used to recognise the grant date fair value of the options issued to employees under Company’s employee stock option plan.

*Secured loans:-

i Security details for Non Convertible debenture:

The Non - Convertible debentures are secured by way of first pari - passu charge on new project assets of the Company . It is further secured by way of equitable mortgage on the immovable property in the name of JTPL Private Limited and pledge of shares of Kwality Limited owned by Mr. Sanjay Dhingra, Managing Director of the Company and exclusive charge by way of hypothecation of the specified accounts. These debentures are also secured by personal guarantee of Mr. Sanjay Dhingra, Managing Director of the Company. Present coupon rate of debentures varies from 12.50 % p.a. to 19.20% p.a.

ii Security details for vehicle loans:

Vehicle loans from bank & others are secured by hypothecation of Vehicles. Rate of Interest varies between 10.25% to12.75%. Period of maturity for loans varies between 3 year to 5 year and number of repayment instalments is ranging between 36 to 60 months.

iii Security details for external commercial borrowings:

External Commercial Borrowings (ECB) taken from Union Bank of India (U.K) Limited amounting to USD 14 million(‘9,043.07 Lacs) (31 March 2016 USD 9 million (Rs.5,935.84 lacs.)) (01 April 2015 USD Nil). The loan is secured by way of entire project assets including project land of the Company and personal guarantee of Mr Sanjay Dhingra, Managing Director of the Company. Till the creation of the charge ,the Company has provided additional security in form of pledge of shares of Kwality Limited in the name of Mr Sanjay Dhingra . Present rate of Interest on loan is 3 months LIBOR plus 425bps.

iv Security details for term loan from others:

The Term Loan from others include loan from KKR Financial Services Private Limited. The loan is secured by way of first pari -passu charge on new project assets of the Company. It is further secured by equitable mortgage on the immovable property in the name of JTPL Private Limited and pledge of shares of Kwality Limited owned by Mr. Sanjay Dhingra, Managing Director of the Company and exclusive charge by way of hypothecation of the specified accounts. This loan is also secured by personal guarantee of Mr. Sanjay Dhingra, Managing Director of the Company. Present rate of loan varies from 12.50%p.a. to 19.20% p.a.

**Unsecured loans:

v Security details for term loan from banks:

a Term Loan from banks includes loans taken from IDBI Bank Limited which has been fully paid during the period under review(31 March 2016: Rs.1330.25 lacs; 1 April 2015: Rs.1992.74 lacs). The loan was secured by way of exclusive charge on Immovable property held in the name of directors & other party situated at Golden Park, Rampura Road, Basai Darapur, New Delhi and the land / properties held in the name of JTPL Private Limited situated at JTPL City, Sector-115 Mohali (Punjab). The loan was further secured by personal / corporate guarantee of Mr.Sanjay Dhingra, Managing Director of Company and property owners. Rate of Interest on loan was 11.50% p.a.

b Term Loan from Bank includes loan taken from Karur Vysya Bank Limited Rs.2,751.48 (31 March 2016: Rs.2,927.55 lacs; 1 April 2015: ‘ NIL),. The loan is secured by way of Equitable Mortgage on land/ properties in the name of JTPL Private Limited situated at JTPL City, Sector-115 Mohali (Punjab). The loan is further secured by personal guarantee of Mr.Sanjay Dhingra, Managing Director of Company and corporate guarantee of JTPL Private Limited. Present rate of Interest on loan is 12%.

vi Security details for term loan from other parties:

Term Loans from Other party are from IFCI Ltd Rs.7,486.55 (31 March 2016: Rs.9,976.09 lacs; 1 April 2015: Rs.9,974.73 lacs), from DMI Finance Pvt Ltd ‘ NIL (31 March 2016: Rs.3,049.37 lacs; 1 April 2015: Rs.3,490.22 lacs), from Aditya Birla Finance Limited ‘2,953.40 (31 March 2016: Rs.3279.62 lacs; 1 April 2015: ‘NIL), Hero Fincorp Limited Rs.2,756.87(31 March 2016: Rs.3,306.17 lacs; 1 April 2015:’ NIL) and from Mahindra & Mahindra Financial Services Limited ‘1,644.35 (31 March 2016: ‘ NIL; 1 April 2015: ‘ NIL)

a Loan from IFCI Limited is secured by way of equitable mortgage on the immovable property in the name of JTPL Private Limited situated at JTPL City, Sector-115 Mohali (Punjab) and pledge of shares of Kwality Limited in the name of Mr. Sanjay Dhingra and further secured by personal guarantee of Mr.Sanjay Dhingra, Managing Director of Company and Corporate Guarantee of JTPL Private Limited. The present rate of Interest on loan is 12.50 %p.a.

b Loan from DMI Finance Pvt Ltd was secured by way of pledge of equity shares of Kwality Limited in the name of Mr. Sanjay Dhingra. Also the loan was secured by personal guarantee of Mr.Sanjay Dhingra, Managing Director of Company. Rate of interest on loan was 14.60% p.a.

c Loan from Aditya Birla Finance Limited is secured by way of equitable mortgage on land/ property in the name of JTPL Private Limited situated in Mohali (Punjab), and further secured by personal guarantee of Mr. Sanjay Dhingra, Managing Director of company and corporate guarantee of JTPL Private Limited. The rate of Interest on loan is ranging from 12.50% to 12.75%.

d Loan from Hero Fincorp Limited is secured by way of equitable mortgage on immovable property in the name of JTPL Private Limited situated at JTPL City, Sector-115 Mohali (Punjab) and personal guarantee of Mr. Sanjay Dhingra, Managing Director of the Company and corporate guarantee of JTPL Private Limited. Rate of interest on loan is 12.75% p.a.

e Loan from Mahindra & Mahindra Financial Services Limited is secured by way of mortgage of land and building at Sector 115, Mohali, Punjab owned by JTPL Private Limited and pledge of equity shares of Kwality Limited held in the name of Mr. Sanjay Dhingra. Moreover it is further secured by personal guarantee of Mr. Sanjay Dhingra, Managing Director of the Company and corporate guarantee of JTPL Private Limited. Rate of interest on loan is 12.50%.

i Security details for short-term borrowings:

Loans from Bank towards cash credit limits are secured by way of :-

a) First pari passu charge on the entire current assets of the company.

b) First pari passu charge on entire movable and immovable fixed assets including equitable mortgage of factory land and building of the company situated at village Softa ,Palwal ( Haryana) and at Village Mumrejpur, Tehsil Dibai, District-Bulandsahar (U.P).

c) First pari passu charge on entire fixed assets of Pashupati Dairies Private Limited including Equitable mortgage of Land and Building situated at village Kumarhera, Saharanpur (UP).

d) First pari pasu charge by way of equitable mortgage on immovable property in the name of JTPL Private Limited situated at JTPL City, Sector-115 Mohali (Punjab).

e) Corporate guarantee of Pashupati Dairies Private Limited.

f) Personal guarantee of Mr. Sanjay Dhingra, Managing Director of the Company and corporate guarantee of JTPL Private Limited.

g) 10% Cash margin for LC in the form of Fixed Deposits.

h) The outstanding Buyer’s credit facility amounting to USD Nil (31 March 2016 USD 1,35,402.25; 01 April 2015 USD NIL) is against 100% margin from Corporation Bank.

ii Other Terms and Conditions

a) Negative lien for non disposal/ non transfer of 51 % of equity share held by Mr. Sanjay Dhingra.

Earnings per share (EPS)

Company’s Earnings per Share (“EPS”) is determined based on the net profit attributable to the shareholders’ of the Company. Basic earnings per share is computed using the weighted average number of shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the year including share options (using the treasury stock method for options), except where the result would be anti-dilutive.

For the purpose of calculating the weighted average number of shares, the weighted average effect of changes in treasury share transactions during the year has also been considered. No other transaction involving Equity shares or potential Equity shares is there between the reporting date and the date of authorisation of these financial statements.

Capital management

(a) Risk management

The Company’s objectives when managing capital are to:

- Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- Maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. Consistent with others in the industry, the Company monitors capital on the basis of the following gearing ratio.

Operating leases - lessee

The Company has taken various premises on operating leases and lease rent of Rs.327.68 (31 March 2016: Rs.267.95) in respect of the same has been charged to statement of profit and loss for the year ended 31 March 2017. The underlying agreements are executed for a period generally ranging from three to five years, renewable on mutual consent and are cancellable in some cases, by either party giving notice generally of 30 to 90 days. There are no restrictions imposed by such leases and there are no subleases. The minimum lease rentals payable in respect of such operating leases are as under

These assumptions were developed by management with the assistance of independent actuarial appraisers. Discount factors are determined close to each year-end by reference to government bonds of relevant economic markets and that have terms to maturity approximating to the terms of the related obligation. Other assumptions are based on management’s historical experience.

Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employee’s last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. Gratuity plan is a non-funded plan.

These assumptions were developed by management with the assistance of independent actuarial appraisers. Discount factors are determined close to each year-end by reference to government bonds of relevant economic markets and that have terms to maturity approximating to the terms of the related obligation. Other assumptions are based on management’s historical experience.

The estimates of future salary increases, inflation, seniority, promotion and other relevant factors, considered in actuarial valuation such as supply and demand in the employment market. The rate used to discount post employment benefit obligations (both funded and unfunded) should be determined by reference to market yields at the balance sheet date on government bonds. The currency and term of the government bonds should be consistent with the currency and estimated term of the post employment benefit obligations.

Note - 5

Share based payments

Company has reserved issuance of 1,00,00,000 (Previous Year: 1,00,00,000) Equity Shares of Rs.1 each for offering to the eligible employees of the Company and its subsidiaries under Employees Stock Option Plan 2014 (ESOP 2014). During the year the Company has granted 43,000 (Previous Year 19,87,000) Options at a price of ‘38 per option plus all applicable taxes. The options would vest over a period of 1 years. The other disclosure in respect of the ESOP Scheme are as under:

The Company’s risk management is carried out by a central treasury department (of the group) under policies approved by the board of directors. The board of directors provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity.

A Credit risk

Credit risk arises from cash and cash equivalents, trade receivables, investments carried at amortised cost and deposits with banks and financial institutions.

Credit risk management

The finance function of the Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.

A: Secured, negligible B: Partly secured C: Unsecured D: Doubtful

The risk parameters are same for all financial assets for all period presented. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an on-going basis throughout each reporting period. In general, it is presumed that credit risk has significantly increased since initial recognition if the payments are more than 30 days past due. A default on a financial asset is when the counterparty fails to make contractual payments when they fall due. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.

Credit risk exposure Provision for expected credit losses

The Company provides for expected credit loss based on lifetime expected credit loss mechanism for loans, deposits and other investments -

B Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.

Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Maturities of financial liabilities

The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is insignificant.

C Market risk

Foreign exchange risk

The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions (imports of materials), primarily with respect to the US Dollar, Euro etc. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company’s functional currency. The Company does not hedge its foreign exchange receivables/payables.

Interest rate risk

The Company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Fair value measurements

(i) Fair value hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for financial instruments.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data rely as little as possible on entity specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(ii) Financial assets and financial liabilities measured at fair value - recurring fair value measurements

(iii) Financial instruments measured at amortised cost

- The carrying amounts of Trade receivables, Trade payables, capital creditors and cash and cash equivalents are considered to be The same as their fair values, due to their short-term nature

- The fair value of security deposits were calculated based on cash flows discounted using current lending rate which is not materially different from the rates at which they were initially measured. Therefore the carrying value is considered to be fair value of the security deposits.

- The fair value of non-current borrowings are based on discounted cash flows using current borrowing rate which is not materially different from the rates at which they were initially measured. Therefore the carrying value is considered to be fair value of the non-current borrowings.

(iv) Valuation process and technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

(a) The use of quoted market prices or dealer quotes for similar instruments

(b) The fair value of the remaining financial instruments is determined based on adjusted net assets method.

- Risk adjustments specific to the counterparties (including assumptions about credit default rates) are derived from credit risk grading determined by the Company’s internal credit risk management group.

All of the resulting fair value estimates are included in level 2.

Note 1 :

The fair value of derivative financial instrument pertains to upside interest payable to lenders of the Company has been certified by a practising chartered accountant. The fair value of derivative financial instruments is based on quoted prices and inputs that are directly or indirectly observable in the market place

Note - 6

First time adoption of Ind AS

These are the Company’s first 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 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS balance sheet at 1 April 2015 (the Company’s date of transition). 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 tables and notes.

A Ind AS optional exemptions

1 Deemed cost for property, plant and equipment and intangible assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets and investment property at their previous GAAP carrying value.

2 Leases

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material.

The Company has elected to apply this exemption for such contracts/arrangements.

3 Share based payments

Ind AS 102 Share based payments requires an entity to record the options on their fair value instead of intrinsic value. Ind AS 101 permits a first time adopter to ignore such requirement for the options already vested as on transition date that is 31 March 2015. The Company has elected to apply this exemptions for such vested options.

4 Investment in subsidiary

Ind AS 101 permits a first-time adopter to choose the previous GAAP carrying amount at the entity’s date of transition to Ind AS to measure the investment in the subsidiary as the deemed cost. Accordingly, the Company has opted to measure its investment in subsidiary at deemed cost i.e., previous GAAP carrying amount.

B Ind AS mandatory exemptions 1 Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

a) Investment in equity instruments carried at FVTPL or FVOCI

b) Impairment of financial assets based on expected credit loss model.

2 Classification and measurement of financial assets and liabilities

The classification and measurement of financial assets will be made considering whether the conditions as per Ind AS 109 are met based on facts and circumstances existing at the date of transition.

Financial assets can be measured using effective interest method by assessing its contractual cash flow characteristics only on the basis of facts and circumstances existing at the date of transition and if it is impracticable to assess elements of modified time value of money i.e. the use of effective interest method, fair value of financial asset at the date of transition shall be the new carrying amount of that asset. The measurement exemption applies for financial liabilities as well.

Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so. It is impracticable to apply the changes retrospectively if:

a) The effects of the retrospective application or retrospective restatement are not determinable;

b) The retrospective application or restatement requires assumptions about what management’s intent would have been in that period;

The retrospective application or retrospective restatement requires significant estimates of amounts and it is impossible to distinguish objectively information about those estimates that existed at that time.

3 De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

C Notes to first time adoption

1 Deferred tax

Previous GAAP required deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under previous GAAP. In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity. The net impact on deferred tax assets is of ‘50.62 lakhs on 1 April 2015 and ‘31.80 lakhs lacs on 31 March 2016.

2 Other comprehensive income

Both under previous GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised to retained earnings through OCI. Thus, remeasurements gains of Rs.16.91 lakhs has been reduced from the net profit of the FY 2015-16 and has been recognised in OCI at Rs.16.91 lakhs. This has no resulting impact on equity.

3 MAT reclassification

Ind AS 12 requires classification of MAT credit as Deferred tax asset. Accordingly, the Company has reclassified MAT credit amounting to ‘4,404.41 lakhs to Deferred tax asset as at the transition date. Further, MAT credit as at 31 March 2016 amounting to ‘1,410.81 lakhs has been reclassified as Deferred tax asset. This has no resulting impact on equity or net profit.

4 Reclassifications

The Company has reclassified certain items of assets and liabilities to comply with the requirements of Ind AS. This has no resulting impact on equity and net profit.

5 Cash flows

The transition from previous GAAP to Ind AS has not made a material impact on the statement of cash flows.

D Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

Note - I

i) Borrowings

A 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 the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method.

Under previous GAAP, these transaction costs were charged to profit or loss or capitalised to capital work in progress as and when incurred. Accordingly, borrowings as at 31 March 2016 have been reduced by Rs.120.50 lacs (1 April 2015 -Rs.61.41 lacs) with a corresponding adjustment to relevant head in capital work in progress, statement of profit and loss and retained earnings respectively. The total equity increased by an equivalent amount. The profit for the year ended 31 March 2016 reduced by ‘91.89 lacs as a result of the additional interest expense.

B Under the previous GAAP, the Company had recognised the entire processing fee paid on working capital loans whereas the facility period remained unexpired as at the balance sheet date. Therefore prepaid expense of ‘ Nil (1 April 2015 Rs.84.86 lacs) has been recognised with a corresponding adjustment to relevant head in statement of profit and loss and retained earnings respectively. Total equity has decreased by an equivalent amount. The profit for the year ended 31 March 2016 reduced by Rs.84.86 lacs as a result of additional processing fee.”

ii) Amortised cost instrument

Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent. Consequent to this change, the amount of security deposits decreased by Rs.8.00 lacs as at 31 March 2016 (1 April 2015 - Rs.1.65 lacs). The prepaid rent increased by Rs.8.17 lacs as at 31 March 2016 (1 April 2015 - Rs.1.58 lacs). Total equity decreased by Rs.0.20 lacs as on 1 April 2015. The profit for the year and total equity as at 31 March 2016 decreased by Rs.0.41 lacs due to amortisation of the prepaid rent of ‘1.43 lacs which is partially off-set by the notional interest income of ‘1.02 recognised on security deposits

iii) Proposed dividend

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend of Rs.281.97 as at 31 March 2016 (1 April 2015 - Rs.263.26 lacs) included under provisions has been reversed with corresponding adjustment to retained earnings.

iv) Prior period expenses

Under the previous GAAP, the Company has recognised certain expenses in the financial year subsequent to the year to which the expenses pertain as prior period expenses. Under Ind AS, those expenses have been recognised in the year to which it pertains with a corresponding adjustment to relevant head in statement of profit and loss and retained earnings respectively. Total equity has decreased by an equivalent amount. The profit for the year ended 31 March 2016 reduced by Rs.576.40 lacs as a result of additional processing expensed off and interest on income relating to previous years.

v) Employee stock option expense

Under the previous GAAP, the cost of equity-settled employee share-based plan were recognised using the intrinsic value method. Under Ind AS, the cost of equity settled share-based plan is recognised based on the fair value of the options as at the grant date. Consequently, the amount recognised in share option outstanding account increased by Rs.309.25 lacs as at 31 March 2016 (1 April 2015- ‘Nil). The profit for the year ended 31 March 2016 decreased by Rs.309.25 lacs. There is no impact on total equity.

vi) Deferred tax

Retained earnings has increased by Rs.31.80 lacs as at 31 March 2016 (1 April 2015- decreased by Rs.50.62 lacs) has been adjusted consequent to the above Ind AS transition adjustments with corresponding impact to deferred tax.

vii) Retained earnings

Retained earnings as at 1 April 2015 has been adjusted consequent to the above Ind AS transition adjustments.

viii) Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes re-measurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP

Note - 7

The Company is primarily engaged in the business of processing, manufacturing and trading of milk, milk products & dairy products, which as per Indian Accounting Standard - 108 on ‘Operating Segments’ as specified under Section 133 of the Companies Act, 2013 read with Rule 7 of Companies (Accounts) Rules, 2014 (as amended) is considered to be the only reportable business segment.

B The Company does not have revenue transactions with a single external customer amounting to 10 percent or more of Company’s reported revenues.


Mar 31, 2016

Notes:

1) Vehicle loans taken from various banks are secured by hypothecation of Vehicles. Rate of Interest varies between 10.25% to 12.75%. Period of maturity for loans varies between 3 year to 5 year and number of repayment installments is ranging between 36 to 60 months. The repayment obligation in future of above loans is as under:-

2) External commercial Borrowings (ECB) taken from Union Bank of India (U.K) Limited amounting to USD 9 million (§ 5969.96 lacs). The loan is secured by way entire project assets of the Company and personal guarantee of Mr Sanjay Dhingra Managing Director of the Company. It is further collaterally secured by way of first pari passu charge on existing land 3.195 acres at Palwal on which the proposed project is located and additional 1.88 acres adjacent to the existing unit at Palwal (Haryana). Till the creation of the charge, the Company has provided additional security in form of pledge of shares of Kwality Limited in the name of Mr Sanjay Dhingra to the extent that market value of the Equity shares will be USD 4.5 millions. Present rate of Interest on loan is 3 months LIBOR plus 450 bps. The repayment obligation in future of above loans is as under:-

3 a) Term Loan from Bank includes loan taken from IDBI Bank Limited. The loan is secured by way of exclusive charge on Immovable property held in the name of director & other party situated at Golden Park, Rampura Road, Basai Darapur, New Delhi and the land / properties held in the name of JTPL Townships Pvt Ltd situated at JTPL City, Sector-115 Mohali (Punjab). The loan is further secured by personal / Corporate guarantee of Mr.Sanjay Dhingra, Managing Director of Company and property owners. Present rate of Interest on loan is 11.5%.

4 b) Term Loan from Bank includes loan taken from Karur Vysya Bank Limited. The loan is secured by way of fresh Equitable Mortgage on land/ properties in the name of JTPL Townships Pvt Ltd situated at JTP City, Sector-115 Mohali (Punjab). The loan is further secured by personal / Corporate guarantee of Mr.Sanjay Dhingra, Managing Director of Company and property owners. Present rate of Interest on loan is 12%.

5) Term Loans from Other party are from IFCI Ltd '' 10000.00 lacs (previous year '' 10000.00 lacs), from DMI Finance Pvt Limited '' 3080.00 lacs (previous year '' 3500.00 lacs), from Aditya Birla Finance Limited '' 3500.00 lacs (previous year '' Nil) and Hero Fincorp Limited '' 3500.00 lacs (previous year '' Nil).

a) Loan from IFCI Limited is secured by way of Exclusive mortgage on the immovable property in the name of JTPL Townships Pvt Limited. situated at JTPL City, Sector-115 Mohali (Punjab) and pledge of shares of Kwality Limited in the name of Mr. Sanjay Dhingra and further secured by personal guarantee of Mr. Sanjay Dhingra, Managing Director of Company and Corporate Guarantee of JTPL Townships Pvt Limited. The present rate of Interest on loan is 13.25%.

b) Loan from DMI Finance Pvt Limited is secured by way of pledge of equity shares of Kwality Limited in the name of Mr. Sanjay Dhingra. Also the loan is secured by personal guarantee of Mr. Sanjay Dhingra, Managing Director of Company. Rate of interest on loan is 14.60%.

c) Loan from Aditya Birla Finance Limited was secured by way of equitable mortgage on land/ property in the name of JTPL Townships Pvt Limited. situated in Mohali (Punjab), and further secured by personal guarantee of Mr. Sanjay Dhingra, Managing Director of company and corporate guarantee of JTPL Townships Pvt Limited. The rate of Interest on loan is ranging from 12.50% to 12.75%.

d) Loan from Hero Fincorp Limited was secured by way of pledge of shares of Kwality Limited held in the name of Mr. Sanjay Dhingra. Loan was further secured by exclusive charge over residential/commercial plots situated in Chandigarh and personal guarantee of Mr. Sanjay Dhingra, Managing Director of Company and corporate guarantee of JTPL Townships Pvt Limited. Rate of interest on loan was 12.75%.

Note.-6

Loans from Bank towards working capital are secured by way of :-

a) First pari passu charge on the entire current assets of the company.

b) 1st paripassu charge on entire movable and immovable fixed assets including equitable mortgage of factory land and building of the company situated at village Softa ,Palwal ( Haryana) and at Village Mumrejpur, Tehsil Dibai, District- Bulandsahar (U.P).

c) 1st paripassu charge on entire fixed assets of M/s Pashupati Dairies Pvt. Limited. including Equitable mortgage of Land and Building situated at village Kumarhera, Saharanpur (UP).

d) Corporate guarantee of M/s Pashupati Dairies Pvt Limited.

e) Negative lien for non disposal/ non transfer of 51 % of equity share held by Mr. Sanjay Dhingra.

f) Personal guarantee of Mr. Sanjay Dhingra, Managing Director of Company .

g) 10% Cash margin for LC in the form of Fixed Deposits.

h) The outstanding Buyers credit facility amounting to USD 1,35,402.25 is against 100% margin from Corporation Bank

7 RELATED PARTY DISCLOSURES

As per Accounting Standard 18 disclosures of transactions with the related parties are given below: Relationships

1 Subsidiary Company Kwality Dairy Products FZE

2 Key managerial personnel (KMP) Rattan Sagar Khanna

Sanjay Dhingra Manjit Dahiya

S.K. Bhalla Sidhant Gupta

Arun Srivastava

Pinky Singh(Upto 23/01/2016)

Ankita Mehrotra Sunit Shangle

Deepa Kapoor (Upto 16/05/2015) Pradeep Kumar Srivastava

3 Enterprises on which Key Managerial person having significant JTPL Townships Pvt Limited influence Pashupati Dairies Pvt Limited

Kwality Dairy Investments Pvt Limited Sahyogi Foundation

4 Relative of Key Managerial Person Kanika Dhingra

Ved Parkash Gupta Sonika Gupta Sidhaant and Sons (HUF)

The estimates of future salary increases, inflation, seniority, promotion and other relevant factors, considered in actuarial valuation such as supply and demand in the employment market. The rate used to discount post employment benefit obligations (both funded and unfunded) should be determined by reference to market yields at the balance sheet date on government bonds. The currency and term of the government bonds should be consistent with the currency and estimated term of the post employment benefit obligations.

An amount of Rs,63.05 Lacs /- (PY. Rs,74.44 Lacs) as contribution towards defined contribution plan is recognized as expense in the Profit & Loss Statement

8. CSR EXPENDITURE

During the year, the company spent Rs, 297.90 lakhs (previous year Rs, 283.36 lacs) toward CSR under section 135 of the companies act 2013 and rules there under in terms of policy framed Board of Directors.

9. OTHER NOTES

a) Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchanges

Loans and advances in the nature of loans given to subsidiaries, associates and others and investment in shares of the Company by such parties:

b) Previous year figure have been regrouped/reclassified wherever necessary to correspond with the current year classification/ disclosure.


Mar 31, 2014

1) Contingent Liabilities and other Commitments:

Particulars As At 31 March, As At 31 March, 2014 2013 (INR In Lacs) (INR In Lacs)

Contingent liabilty (to the extent not provided for) Claim against the company not acknowledged as debts Milk cess disputed by the company relating to issue of applicability against which the company has preferred an SLP against the order 1,193.03 1,166.03 of Punjab & Haryana High Court before Hon''ble Supreme Court of India. A liablity of Cess principal amounting Rs. 326.59 lacs (from which a sum of Rs. 131.96 lacs (pre. Yr Rs. 98.06 lacs) deposited under protest ) and a sum of Rs. 866.44 lacs on account of interest liability raised by Semen Bank officer, of Haryana Livestock Development Board for which the matter is already before Hon''ble Supreme Court.

A civil recovery suit has been filed by M/s S.M. Milkose Ltd. 156.97 156.97 regarding dispute in supply of material which is disputed by the Co. & is pending before The Hon''ble High Court of Delhi.

Sales Tax Matters in Appeallate 175.72 0.00 Authorities

Contingent Liability for Bills 0.00 67.97 Discounted

Contingent Liability under 922.18 511.07 Bank Guarantee

Contingent Liability under 315.42 3,597.54 Letter of Credit

Contingent Liability under 99.58 0.00 EPCG Licence

Corporate Gurantee given on behalf 16,226.95 5,438.93 of wholly owned subsidiary

Commitments

Estimated amount of Contracts 965.56 1,114.43 remaining to be executed on capital account and not provided for

2) The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid / payable under this Act have not been given.

3) RELATED PARTY DISCLOSURES

As per Accounting Standard 18 disclosures of transactions with the related parties are given below: Relationships

1 Subsidiary Company Kwality Dairy Products FZE

2 Key managerial personnel (KMP) Sh. Sanjay Dhingra Sh. Sidhant Gupta

3 Enterprises on which Key Managerial JTPL Townships Pvt Ltd person having significant influence Pashupati Dairies Pvt Ltd Kwality Dairy Investments Pvt Ltd.

4 Relative of Key Managarial Person Ms. Kanika Dhingra Dr Ved Parkash Gupta

4) EMPLOYEE BENEFITS :

Employee Benefits

The Company has made provisions for employee benefits in accordance with the Accounting Standard (AS) 15 "Employee Benefits". During the year, the Company has recognised the following amounts in its financial statements based on actuarial valuation done as per Projected Unit Credit Method.

The estimates of future salary increases, inflation, seniority, promotion and other relevant factors, considered in actuarial valuation such as supply and demand in the employment market. The rate used to discount post employment benefit obligations (both funded and unfunded) should be determined by reference to market yields at the balance sheet date on government bonds. The currency and term of the government bonds should be consistent with the currency and estimated term of the post employment benefit obligations.

An amount of Rs.22.08 Lacs /-(PY. - Rs. 30.80 Lacs) as contribution towards defined contribution plan is recognized as expense in the Profit & Loss Statement


Mar 31, 2013

1.1).The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid / payable under this Act have not been given.


Mar 31, 2012

1) The Loan from related party is unsecured and there is no interest payable on the loan The loan is payable within 3 to 5 year.

2) The Loan from other party is unsecured and there is no interest payable on the loan The loan is payable within 3 to 5 year.

3) Contingent Liabilities : (Rs. In Lacs)

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

Claim against the company not acknowledged as debts

Milk Cess disputed by the company relating to issue of applicability, against which the company has filed an appeal with Supreme Court 271.81 246.60 of India (A sum of Rs.79.22 lacs(Previous.Yr. Rs.72.96 Lacs) deposited under protest)

Demand by Dy. Excise and Taxation Commissioner relating to Sales Tax A/at exemption /deferment with interest, against which company has filed an appeal before Joint Excise and Taxation 32.73 Nil Commissioner (Appeals), Faridabad.

A civil suit filed by M/s S.M. Milkose Ltd. for disputed supply of 156.97 156.97 material aginst Co. pending before Delhi High Court.

Contingent Liability for Bills Discounted Nil 1,701.47

Liability under Bank Guarantee 147.05 13.46

Estimated amount of Contracts remaining to be executed on 84.83 77.83 capital account and not provided for

4)The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid / payable underthis Act have not been given.

5) Related Party Disclosures

As per Accounting Standard 18 disclosures of transactions with the related parties are given below: Relationships

1 Subsidiary Company Kwality Dairy Products FZE

2 Key managerial personnel (KMP) Sh. Sanjay Dhingra

Sh. Sidhant Gupta

3 Significant Influence(SI) Ms. Kanika Dhingra

4 Enterprises on which Key Managerial JTPL Pvt Ltd

person having significant influence Pashupati Dairies Pvt Ltd

5 Relative of Key Managerial Person Ms. Kanika Dhingra

Dr. Ved Parkash Gupta

The revised Schedule VI has become effective from April 1,2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year figure have been regrouped/reclassified wherever necessary to correspond with the current year classification/disclosure.

During the year ended March 31,2012 the company has promoted a wholly owned subsidiary Kwality Dairy Products FZE in free trade zone of Dubai in UAE. The total amount contributed on account of capital and interest free loan of Rs.199.54 lacs equivalent to AED1 Million and AED 393,393 respectively.


Mar 31, 2010

1 Contingent Liabilities:

Current Year Previous Year Rs. in Lacs Rs. in Lacs

a) Claim against the company not acknowledged as debts

i) Milk Cess disputed by the company relating to issue of applicability, against which the company has filed an appeal with High Court, Punjab & Haryana 221.39 196.18

(A sum of Rs. 72.96 lacs (Pre. Yr. Rs. 62.10 Lacs) deposited under protest)

ii) Other matters 156.97 156.97

b) Contingent Liability for Bills Discounted 3,508.23 4,163.44

c) Liability under Bank Guarantee 44.85 44.85

d) Estimated amount of Contracts remaining to be executed on capital account and not provided for 124.16 227.79

2 Segment Reporting

The Company is primarily engaged in the business of manufacture, purchase and sale of ghee, skimmed milk powder, Lactose and milk ("Dairy Products"). The other activities of the company comprise pasteurising and packing of fresh milk on job work basis and manufacturing of curd.

The income from these activities and export of dairy products is not material (less than 10%) in financial terms. Accordingly segment information as per AS-17 has not been disclosed.

3 The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid / payable under this Act have not been given.

4 As required by Accounting Standard- AS 18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India is as follows :

List of Related Parties :

a) Key managerial personnel

- Sh. Sanjay Dhingra

b) Major Shareholders

- Sh. Sanjay Dhingra

- Sh. Gulshan Kumar

- Sh. Kishan Dhingra

- Sh. Naresh Dhingra

c) Relatives of Major Shareholders/Key managerial personnel

- Ms. Seema Dhingra

- Ms. Pinki Dhingra

d) Enterprises of Major Shareholder/Key Management Personnel or their relatives

- JMD Proteins Pvt. Ltd.

- Super Veg Oils Pvt Ltd

- JMD Oils Pvt Ltd

- JMD Veg Oils Pvt Ltd

- JTPL Townships Pvt Ltd

5 Detail of Security given against :

a) Secured Loans availed : Short term / Working Capital Loans from banks are secured against hypothecation of stock, book-debts, plant & Machinery and additionally secured by equitable mortgage of factory land & building. The said loans are further secured by way of personal guarantee of major shareholders and corporate guarantee of M/s. Super Veg Oils Pvt Ltd & M/s. JTPL Townships Pvt Ltd( Refer Note 10 e )

b) Unsecured Loan : Sales Tax Deferment Loan Secured by Bank Guarantee ofRs. 15.97 lacs and Surety Bond by Director of the Company.

c) Contingent Liability for Bills Discounted and Sundry Creditors (Under Trade Finance Facility) include the sum ofRs. 2750.00 Lacs and Rs. 2350.00 Lacs respectively , secured against equitable mortgage of land owned by JTPL Townships Pvt Ltd, (Refer Note 10 d )

6 In accordance with the provisions of the AS-28 issued by Institute of Chartered Accountants of India on Impairment of Assets, the Company has carried out an impairment test in respect of all assets. On the basis of such exercise the company has determined that for the year ended 31st March 2010, no impairment / reversal of loss is required.

7 Previous Years figures have been reworked, rearranged, reclassified and regrouped where considered necessary to make them comparable with the current years figure.

Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X