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Notes to Accounts of Milkfood Ltd.

Mar 31, 2016

(B) ADDITIONAL NOTES TO ACCOUNTS

i. Contingent liabilities:

Claims not acknowledged as debts Rs.99 Lac (Previous year Rs.95Lac) and guarantee / obligations of Rs.400 Lac. (Previous year 400 Lac ).

ii. Estimated amount of contracts remaining to be executed on capital account is Rs.18 Lac and not provided for (Net of Advances) (Previous year Rs. 5 Lac).

(vi) Related Party Disclosers:

A. Details of related parties with whom the Company had transactions during the year.

Description of relationship Names of related parties

(a) Enterprises over which KMP, major shareholder Jagatjit Industries Ltd.

is able to exercise significant influence MFL Trading Private Ltd (Wholly Owned Subsidiary)

(b) Key Management Personnel Ms Roshini Sanah Jaiswal (CEO/ Directors and their relatives) Mr. Sudhir Avasthi

Ms Asha Gadi Mr. Anil Girotra Mr. Amarjeet Kapoor Mr. K. K. Kohli Mr. Sanjeev Kothiala Mr. Rakesh Thakur

Note: Figures in bracket relates to the previous year

No amounts have been written off / provided for or written back during the year in respect of amounts receivable from or payable to related parties.

(vii) Segment Reporting

The company is operating under a single segment i.e., “Dairy Products- comprising Ghee, Milk Powder, Casein, Whey powder and Dairy whitener” and therefore there are no reportable segments as per AS-17"Segment Reporting” issued by The Institute of Chartered Accountants of India.

Notes:-

Term Loans From Banks:

1 (a) Rupee Loan from Canara Bank of Rs.955 lacs at interest rate of 13.65% and 13.70% p.a is payable at monthly rests as

detailed hereunder :-

Rs.800 lacs (From April''2016 to January ‘2022) Refer Note No.9.1 (a)

Rs.155 lacs (From April''2016 to Nov''2016)

(b) This Loans sanctioned by Canara Bank are secured by the exclusive charge on fixed assets to the extent of Rs.19.50 Crores and exclusive charge on plant and machineries purchased for the fresh loan of Rs.8.00 Cr and pari-passu 1st charge with State Bank of Patiala on balance fixed assets. As per MCA 21charge registered with Canara bank is of Rs.20 Crores.

2 Vehicle Loan of Rs.4 Lac from ICICI Bank Ltd is repayable in monthly instalments by May''2017 and carry interest of 10.50%. Refer Note no. 9.1 (b).

3 Vehicle Loans of Rs. 61 Lac (Two in number) from HDFC Bank Limited is repayable in monthly instalments by Dec''2017 and carry interest of 10.25%. (Refer note no. 9 (a).

4 Rupee Loan from State Bank of Patiala of Rs. 1313 lacs at interest rate 11.95% p.a is payable at monthly installment by July, 2021

5 Vehicle loans are secured against hypothecation of respective vehicles.

(a) Vehicle Loans of Rs.187 Lac from Kotak Mahindra Prime Limited are repayable in monthly instalments of varied amounts and repayable by June'' 2017 and carry interest rate of 14.15% p.a . Refer Note No.9.1(b)

(b) Vehicle Loans of Rs.253 Lac from Kotak Mahindra Prime Limited are repayable in monthly instalments of varied amounts and repayable by Mar ‘ 2019 and carry interest rate of 9.95% to 11.89% p.a . Refer Note No.9.1(b)

(c) Vehicle Loans of Rs.38 Lac from Kotak Mahindra Prime Limited are repayable by Feb''2017 and carry interest of 14.91% . (Refer note no. 9.1(b)).

(d) Total No.of vehicles financed by Kotak Mahindra Prime Limited: 64.

6 Term Loans from Kotak Mahindra Bank Ltd as detail hereunder :-

(a) Rupee Loan from Kotak Mahindra Bank Ltd of Rs.154 lacs at interest rate of 15.25% p.a is payable at monthly rests and to be paid by Feb''2018. Refer note no.9.1(c).

(b) Rupee Loan from Kotak Mahindra Bank Ltd of Rs.73 lacs at interest rate of 15.25% p.a is payable at monthly rests and to be paid by Aug ‘2017. Refer note no.9.1(c).

(c) Rupee Loan from Kotak Mahindra Bank Ltd of Rs.99 lacs at interest rate of 15.00% p.a is payable at monthly rests and to be paid by Feb ‘2017. Refer note no.9.1(c).

7 Unsecured Loans

(a) Rupee Loan from Magma Fincorp Ltd of Rs.84 lacs at interest rate of 15.00% p.a is payable at monthly rests and to be paid by Oct ‘2018. Refer note no.9.1(c)

(b) Rupee Loan from Bajaj Finance Ltd of Rs.33 lacs at interest rate of 15.00% p.a is payable at monthly rests and to be paid by Oct ‘2018. Refer note no.9.1(c)

(c) Rupee Loan from Tata Capital Financial Service Ltd of Rs.33 lacs at interest rate of 15.00% p.a is payable at monthly rests and to be paid by Oct ‘2018. Refer note no.9.1(c)

8 During the year intercorporate deposit of Rs. 325 lakh from Win win traders (P) Ltd has been transferred to security deposit

account and Rs.175 Lac has been adjusted in supplier account. Refer note 5.1.

9 Public deposits matured but unclaimed amounting to Rs 19 lacs (Previous Year 10 lacs).

Footnote:

10 Security Deposits are confirmed by Suppliers payable after 31.03.2017 and have been accordingly classified.

11 (a) Security Deposits are confirmed by Consignees payable after 31.03.2017 and have been accordingly classified.

(b) Includes sum of Rs.79 Lacs which is repayable beyond twelve months from the reporting date, as certified by the

management.

12 Includes Rs 9 Lac towards Public Deposit interest payable (to be transferred to investor education fund in future years) and Rs. 1 lac payable to ex-employee pending final decision of court.

13 Provision for Gratuity and leave encashment has been made in terms of AS-15 (Revised). For Gratuity Liability has been determined as on 31.03.2016 and for Leave Encashment Liability it is determined on calender year basis. Also Refer Note No.10.

14 Cash Credit sanctioned by state Bank of Patiala/Canara Bank are secured by charge on pari passu basis on all present & future Current Assets (excluding vehicles) but including stocks and book debts and extension of charge on pari-passu basis on the fixed assets of the company, equitable mortgage of Land & Building at Gurgoan owned by Ispace Developers Private Limited and exclusive charge on company''s Brand “MILKFOOD”.

The State Bank of Patiala has also extended supplier''s line of credit to the extent of Rs.400 Lac covered in the charge created by the company in its overall limits. Refer Note 4.1(b).

Note:-

15. As per information available with the company there is no party registered under Micro, Small and Medium Enterprises Development Act, 2006.

16.(A) (i) There is no impairment of assets as per AS 28 of ICAI as the company has a composite plant with production facilities capable of interchangeable use for manufacture of casein and milk powder. All assets had been put to use for manufacture of milk powder.

(ii) Includes intangible assets of Rs. 597 lacs written down value of Rs. 173 lacs. In accordance with AS-26 expenses incurred on Intangible Asset and is amortized over a period of 10 years. The amount amortized during the year is Rs. 60 lacs ( Previous Year Rs.60 lacs).

(iii) Company has capitalized the opening work in progress and the additions made during the year at the close of the year at patiala unit and accordingly charged the depreciation.

(iv) In respect of Plant & Machinery, company is consistently following the policy of charging depreciation over 20 years for assets purchased before 01.04.2014 on the basis of certificate given by Govt. approved valuer (Chartered Engineer) of the useful life of more than 35 years. Similarly for additions in Plant & Machinery after 01.04.2014, company has estimated useful life of 20 years (as against 15 years specified in schedule II of the companies Act 2013) based upon the certificate of suppliers/manufacturers of Plant & Machinery.

(v) Interest of Rs 6.64 Lacs incurred prior to assets are put to use is capitalized in Plant & Machinery (PY Rs.38 Lac) as per AS -16.

17. (B) (a) Estimated amount of capital contracts remaining to be executed is Rs.18 Lac (PY Rs.5.08Lac).

(b) Includes Rs.148 Lac for Plant & Machinery & Rs.7 Lac for building.

Note:-

18. Pledged with Government Authorities towards fulfillment of statutory obligations.

19. Advances, security deposits and advances to employees are considered good for recovery as certified by the Management.(Refer Note No 18a). During the year company has realised Rs.15 lakh from non moving advances of earlier years. Amount is being realised as stipulated.

20. Deposit with Sales Tax Authorities represents the amount deposited as a condition for the appeal and considered good for recovery as certified by the management.

21. Pertains to earlier years and reconcilation is in process.

Notes:-

22. Includes Rs. 7 lakh due from government departments outstanding for a period exceeding 3 Years. Management certifies that these are good for recovery. Necessary adjustment, if any, will be effected in FY 2016-17

23. Reclassified as inventory (Refer Note 15.2)

24. Company has incurred Rs. 951.44 Lacs on advertisement of dairy creamer which has been launched during the year. This amount is being amortized in four years and accordingly Rs. 237.86 Lacs has been amortized during the year. An amount of Rs. 733.81 is being carried forward to subsequent years, out of which Rs. 237.86 Lacs has been shown as current and Rs 475.72 Lacs as non current assets.

Note:-

25. In accordance with guidance note issued by the Institute of Chartered Accountants of India, (ICAI) Certified Emission

Reduction (CER) units obtained under Clean Development Mechanism (CDM) are treated as inventory on credit by the United Nations Framework Convention on Climate Change (UNFCCC). CER''s are valued at lower of cost or Net Realisable Value (NRV- certified by the consultant) as per AS-2 of ICAI. Total cost incurred is Rs. 25.82 Lacs (Nil in current year) for CDM project being lower than NRV of 128919 CER Units. Company is confident of sale of these CER units in the FY 2016-17.

26. During the year company has accounted for income for Rs. 67.67 Lacs under exceptional item''s representing cost of trees and Plantations on account of expenses incurred on Power & Fuel and labour for irrigation of the plants in earlier years. In Absence of separate identifiable cost attributable to irrigation, the same has been estimated on the basis of opinion taken from the Agriculture Scientist. Further Expert has given an opinion that these trees have acquired sufficient growth for sale as at 31.03.2016. Based upon the opinion, company has classified the expenses under inventory.

Footnote:-

27.. Classified as Short Term loans as certified by the Management.

28. (1) Amortized on account advertisement expenses incurred on the launch of new product “Dairy Whitener”.

29.A (2) Includes amounts written back on account of expenses incurred in earlier years on trees & plantation (Refer Note 15.2), security deposit and other balances written back which are no longer payable, as certified by the management. (Refer Note 5.1)

30.(a) Provision for Gratuity and Leave encashment has been made during the year in terms of AS-15 (Revised).

(b) Includes provision of minimum bonus of Rs. 14.25 lacs ( Previous year Rs.6.33 lacs) under the payment of Bonus Act 1965.

(c) Includes Rs.156 Lac paid to related party subject to approval by the shareholders in the AGM.

(d) Includes Rs 11.45 Lacs reimbursed to Ex- MD of the company towards medical expenses.

31 Interest of Rs 6.64 Lacs (PY Rs.38 Lac) capitalized towards Plant & Machinery installed during the year. (Refer Note 11 A (v)).

32 (a) Includes reimbursement of Rs 2.39 Lacs to Ex-MD of the company.

(b) Includes Rs 195 Lacs of Carbon Credit written off based on the opinion of the consultant.

33. While computing the Deferred tax liability /assets, benefit of brought forward losses has been taken on the basis of returned income (loss) instead of assessed income (loss) with regards to matters preferred in appeal (s).


Mar 31, 2015

1. Related Party Disclosers:

A. Details of related parties with whom the Company had transactions during the year.

Description of relationship Names of related parties

(a) Enterprises over which KMP, Jagatjit Industries Ltd. major shareholder is able to MFL Trading Private Ltd exercise significant influence (Wholly Owned Subsidiary) Triputi Infrastructure Private Ltd

(b) Key Management Personnel Ms Roshini Sanah Jaiswal (CEO/ Directors and their Mr. Sudhir Avasthi relatives) Ms Asha Gadi Mr. Suresh Alipuria Mr. Anil Girotra Mr. Amarjeet Kapoor Mr. K. K. Kohli Mr. Sanjeev Kothiala Ms. Rishbha Ahluwalia Mr. Rakesh Thakur

2. Term Loans From Banks:

i. Rupee Loan from Canara Bank of Rs.395 lacs at interest rate of 13.70% p.a is payable at monthly rests in equal instalments of Rs.20 Lac each, detailed hereunder:-

Rs.240 lacs ( From April'2015 to March'2016) Refer Note No.9(a)

Rs.155 lacs ( From April'2016 to Nov'2016)

ii. Term Loans sanctioned by Canara Bank are secured by the exclusive charge on fixed assets to the extent of Rs.19.50 Crores and pari-passu 1st charge with State Bank of Patiala on balance fixed assets.As per MCA 21charge registered with Canara bank is of Rs.27 Crores. Company has vide letter dated 20.02.2015 written to the bank for satisfaction of charge of Rs.15 Crores which is pending.

3. Vehicle loans are secured against hypothecation of respective vehicles.

i. Vehicle Loans of Rs.315 Lac from Kotak Mahindra Prime Limited are repayable in monthly instalments of varied amounts and repayable by June' 2017 and carry interest rate of 14.15% p.a . Refer Note No.9(b)

ii. Vehicle Loans of Rs.117 Lac from Kotak Mahindra Prime Limited are repayable in monthly instalments of varied amounts and repayable by Sep' 2018 and carry interest rate of 9.95% to 11.38% p.a . Refer Note No.9(b)

iii. Vehicle Loans of Rs.201Lac from Kotak Mahindra Prime Limited are repayable by Feb'2017 and carry interest of 14.91% .(Refer note no. 9 (b))

(a)Total No.of vehicles financed by Kotak Mahindra Prime Limited: 47.

iv. Vehicle Loan of Rs.8 Lac from ICICI Bank Ltd is repayable in monthly instalments by June'2017 and carry interest of 10.50%. Refer Note no. 9 (b).

5. Vehicle Loans of Rs.94 Lac (Two in number) from HDFC Bank Limited is repayable in monthly instalments by Dec'2017 and carry interest of 10.25%. (Refer note no. 9 (a).

6. Vehicle loan of Rs.4 Lac from Magma Fincorp Ltd is repayable in monthly instalments by Jan'2016 and carry interest of 12.33%. (Refer note no. 9 ( b).

4. Rupee Loan from Kotak Mahindra Bank Ltd of Rs.193 lacs at interest rate of 15.00% p.a is payable at monthly rests and to be paid by Feb'2017. Refer note no. 7 b (1.2)

5. Inter Corporate Deposit of Rs.500 Lac from M/S Win Win Traders P Ltd is payable by 31st March'2017 as certified by the Management.

6. Public Deposits:-

i. Public deposits are repayable as under:

(a) Rs.331 lacs Payable by March 2016 and carry interest of 11% to 11.5%.(Refer note no. 9 (c))

(b) Rs.225 lacs Payable by March 2017 and carry interest of 11% to 11.5%

ii. Public deposits guaranteed by Directors Rs.183 lacs/-

iii. Public deposits matured but unclaimed amounting to Rs 10 lacs (Previous Year 9 lacs ).

7. Security Deposits are confirmed by suppliers payable after 31.03.2016 and have been accordingly classified.

a. Includes Rs.2542 Lac as security deposit from the consignees and payable after 31.03.2016 as certified.

b. Includes sum of Rs.650 Lac which is repayable beyond twelve months from the reporting date, as certified by the management.

c. Includes Rs 6 Lac towards Public Deposit interest payable (to be transferred to investor education fund in future years) and Rs. 1 lac payable to ex-employee pending final decision of court.

8.a Cash Credit sanctioned by State Bank of Patiala/Canara Bank are secured by charge on pari passu basis on all present & future Current Assets (excluding vehicles) but including stocks and book debts and extension of charge on pari-passu basis on the fixed assets of the company, equitable mortgage of Land & Building at Gurgoan owned by Ispace Developers Private Limited and exclusive charge on company's Brand "MILKFOOD".

The State Bank of Patiala has also extended supplier's line of credit to the extent of Rs.400 Lac covered in the charge created by the company in its overall limits. Refer Note 1.2 of Note 4.

b. Rupee Loan from Kotak Mahindra Bank Ltd of Rs.193 lacs at interest rate of 15.00% p.a is payable at monthly rests and to be paid by Feb'2017. (Refer Note no. 4 (3)

9.(i) There is no impairment of assets as per AS 28 of ICAI as the company has a composite plant with production facilities capable of interchangeable use for manufacture of casein and milk powder. All assets had been put to use for manufacture of milk powder.

(ii) Includes intangible assets of Rs. 597 lacs written down value of Rs. 233 lacs. In accordance with AS-26 expenses incurred on Intangible Asset and is amortized over a period of 10 years . The amount amortized during the year is Rs. 60 lacs ( Previous Year Rs.60 lacs).

a. Company has capitalized the opening work in progress and the additions made during the year at the close of the year and accordingly charged the depreciation.

b. In accordance with Schedule II of the Companies Act 2013, the management has reassessed the remaining useful life of Plant & Machinery with effect from 1st April 2014. As a result of the above, depreciation of Rs.26.64 Lac has been charged to Statement of Profit & Loss Account and Rs.3.36 Lac has been adjusted with opening retained earnings (i.r.o.assets of which useful life is exhausted.) for twelve months ended 31st March, 2015. In respect of Plant & Machinery, company is consistently following the policy of charging depreciation over 20 years , notwithstanding certification by the Govt. approved valuer (Chartered Engineer) of the useful life of Plant & Machinery is more than 35 years. This is in pursuance of proviso to sub clause (i) of clause 3 of Schedule ii of Companies Act 2013. Similarly for additions of Plant & Machinery during the year company has estimated the useful life of 20 years (as against 15 years specified in schedule ii) based upon the certificate of suppliers/ manufacturers of Plant & Machinery.

c. Interest of Rs.38 Lac have been capitalized in Plant & Machinery in accordance with As-16 as certified by the management.

10. In accordance with guidance note issued by the Institute of Chartered Accountants of India, (ICAI) Certified Emission Reduction (CER) units obtained under Clean Development Mechanism (CDM) are treated as inventory on credit by the United Nations Framework Convention on Climate Change (UNFCCC). CER's are valued at lower of cost or Net Realisable Value (NRV- certified by the consultant) as per AS-2 of ICAI. Total cost incurred is Rs.25.82 Lac. (Rs.21.90 Lac pertaing to earlier years and Rs.3.92 Lac of current year) for CDM project being lower than NRV of 128,919 CER units.

11.i) Classified as Short Term loans as certified by the Management.

ii. Includes Rs.700 Lac due from a Promoter company towards the sale of Milkfood brand ( ealier year ) pending no objection from the lending bank who hold the charge. Amount is recoverable within one year from the reporting date as certified by the Management.

iii. Represents the realizable value of 97000 CER's (PY 97000 Units) as certified by the consultant. The amount has been accounted for as income in ealier years and is classified as short term as company is of the view that the units are likely to be sold in the FY 2015-16. Adjustments if any shall be effected on disposal of the units.

12. Expenses are net of interest received of Rs.91 Lac from M/S Triputi Infrastructure Private Ltd. (P Y Nil). Further interest of Rs.38 Lac (P Y Nil) has been capitalized in Plant & Machinery installed during the year on the premise that the Plant & Machinery was put to use beyond one year of its acquisition.


Mar 31, 2014

I. The Contingent liabilities:

Claims not acknowledged as debts Rs.152 Lac. (Previous year Rs.516 Lac).

ii. Estimated amount of contracts remaining to be executed on capital account is Rs.23 Lac and not provided for (Net of Advances) (Previous year Nil).

iii. Exceptional items represents Profit/(Loss) on Carbon Credits written off, Security deposit written off, Abnormal wastage of Husk and Packing material, provision for gratuity and leave encashment including prior period and on sale of vehicles.

Notes:-

1 Term Loans From Banks:

(1.1) Rupee Loan from Canara Bank of Rs.188 lacs at interest rate of 15.00% p.a is payable in quarterly instalments as follows:-

Rs.188 lacs (From April''2014 to June''2014) Refer Note No.9(a)

(1.2) Rupee Loan from Canara Bank of Rs.635 lacs at interest rate of 13.70% p.a is payable at monthly rests,the details are as follows:-

Rs.240 lacs (From April''2014 to March''2015) Refer Note No.9(a)

Rs.395 lacs (From April''2015 to Nov''2016)

(1.3) Term Loans sanctioned by Canara Bank are secured by the exclusive charge on fixed assets to the extent of Rs.19.50 Crores and rank pari-passu with State Bank of Patiala on all present and future current assets(excluding vehicles) and fixed assets including Plant & Machinery/ immovable properties situated at Bahadurgarh & Moradabad together with all Building and structures thereon, equitable mortgage of Land & Building at Gurgaon in the name of Ispace Developers Pvt Ltd and exclusive charge on Company''s Brand "MILKFOOD".

2. Vehicle loans are secured against hypothecation of respective vehicles.

(2.1) Vehicle Loans of Rs.426 Lac (Twenty Nine in number) from Kotak Mahindra Prime Limited are repayable in monthly instalments of varied amounts and repayable by June'' 2017 and carry interest rate of 14.15% p.a. Refer Note No.9(b)

(2.2) Vehicle Loans of Rs.74 Lac (Nine in number) from Kotak Mahindra Prime Limited are repayable in monthly instalments of varied amounts and repayable by Sep'' 2018 and carry interest rate of 9.95% to 11.38% p.a. Refer Note No.9(a)

(2.3) Vehicle Loans of Rs.6 Lac from Volkswagen Finance Private Limited are repayable in monthly instalments by May'' 2016 and carry interest of 10.50%. (Refer note no. 9 (b)).

(2.4) Vehicle Loans of Rs.47 Lac from HDFC Bank Limited is repayable in monthly instalments by April'' 2016 and carry interest of 10.25%. (Refer note no. 9 (a)).

(2.5) Vehicle Loan of Rs.8.22 Lac from Magma Fincorp Ltd is repayable in monthly instalments by January'' 2016 and carry interest of 12.33%. (Refer note no. 9 (a)).

3. Intercorporate Deposits are repayable by September2015 and carry interest @14% on net basis.

4. Public Deposits:-

(4.1) Public deposits are repayable as under:

(a) Rs. 535 lacs Payable by March 2015 and carry interest of 10.50% to 11.5%.(Refer note no. 9 (c)).

(b) Rs. 553 lacs Payable by March 2016 & 2017 and carry interest of 11% to 11.5%

(4.2) Public deposits guaranteed by Directors Rs. 290 lacs.

(4.3) Public deposits matured but unclaimed amounting to Rs. 9 lacs (Previous Year 9 lacs).

5.Note:-

1. Security Deposits are confirmed by suppliers payable after 31.03.2015 and have been accordingly classified.

2. (i) Includes a sum of Rs. 961 lacs which is repayable beyond twelve months from the reporting date, as certified by the management.

(ii) Includes Rs.2176 lacs confirmed by the creditors payable after 12 months from the reporting date.Including Rs.83 lacs due to customer on account of sales return. Amount will be adjusted after expiry of limitation period.

3. Includes Rs. 4 lacs towards Public Deposit interest payable (to be transferred to investor education fund in future years) and Rs. 1 lacs payable to ex-employee pending final decision of court.

6. Provision of Rs.173 lacs has been made towards gratuity and leave encashment in terms of AS-15 (Revised). Refer Note No.10 and 21.3

Note:-

7 Cash Credit sanctioned by State Bank of Patiala/Canara Bank are secured by first charge on pari passu basis on all present & future current assets (excluding vehicles) and fixed assets including Plant & Machinery/ immovable properties situated at Bahadurgarh & Moradabad together with all Building and structures thereon, equitable mortgage of Land & Building at Gurgoan in the name of Ispace Developers Pvt Ltd and exclusive charge on company''s Brand "MILKFOOD". The State Bank of Patiala has also extended supplier''s line of credit to the extent of Rs.400 Lac covered in the charge created by the company in its overall limits. Refer Note 1.3 of Note 4.

8 Rupee Loan from Kotak Mahindra Bank Ltd of Rs.168 lacs at interest rate of 16.00% p.a is payable at monthly rests and to be paid by Jan''2015.

Note:

9 (a) As per information available with the company there is no amount due to any party registered under Micro, Small and Medium Enterprises Development Act, 2006.

(b) Refer Note 5(1).

10 Notes:-

1 (i) There is no impairment of assets as per AS 28 of ICAI as the company has a composite plant with production facilities capable of interchangeable use for manufacture of casein and milk powder. All assets had been put to use for manufacture of milk powder for domestic and exports owing to better realization.

(ii) Includes intangible assets of Rs. 597 lacs written down value of Rs. 292 lacs. In accordance with AS-26 expenses incurred on Intangible Asset and is amortized over a period of 10 years . The amount amortized during the year is Rs. 60 lacs ( Previous Year Rs.60 lacs).

2. The company has computed depreciation in respect of plant & machinery as per the prescribed rates under schedule XIV of the Company''s Act 1956 on straight line method since 1.4.1988 and prior to that as per section 205 and other applicable provisions of the Company''s Act 1956. This has resulted into an excess depreciation of Rs.252 Lac at Patiala unit and Rs.48 Lac in Moradabad unit. The excess depreciation charged of Rs.300 Lac as certified by management is shown net of short depreciation charged of Rs.83 Lac in the previous FY 2012-13.

3. Company has capitalized the opening work in progress and the additions made during the year (including substantial renovation) at the close of the year and accordingly charged the depreciation.

11 Note:

1. Due to closure of business of the investee company the entire amount is written off and charged to extra ordinary items - Refer Note No.21.3

2. Pledged with Government Authorities towards fulfillment of statutory obligations.

12 Notes:

1. Advances, security deposits and advances to employees are considered good for recovery as certified by the Management. Refer Note No. 19 b

1.1 Deposit with Sales Tax Authorities represents the amount deposited as a condition for the appeal and considered good for recovery as certified by the management.

13 Notes:

1. Excludes Rs 4.89 lacs on account of issue of cheques (stale) against payment of interest.

14 Note:

1 (i) Includes Rs.700 Lac due from a Promoter company towards the sale of Milkfood brand pending no objection from the lending bank who hold the charge.

(ii) Includes Rs.468 Lac due from suppliers of Milk. Management is of the view that the same will be recovered within 12 months from the reporting date.

2. Represents the realizable value of Carbon credits as certified by the consultant. During the year company has charged off Rs.225 Lac against Extra ordinary income. (Refer Note 21.3). It is certified by the management that the amount would be realized within a year from the reporting date.

15 Note:

(a) Provision for Gratuity and Leave encashment of Rs.173 Lac has been made during the year in terms of AS-15 (Revised) and charged of as exceptional items. (Refer Note No. 21.3)

(b) Includes provision of minimum bonus of Rs. 7.41 lacs (Previous year Rs.10 lacs) under the payment of Bonus Act 1965.

1. Excludes Rs.13.51 Lac capitalized in Tangible Assets.

2. Excludes Rs. 162 Lac (Refer Note No. 21.3)

3. Excludes Rs. 104 Lac (Refer Note No. 21.3)

4. Includes Prior period expenses of Rs.7.15 Lac, Misc balances written off Rs.18.15 Lac and income Tax on perquisites Rs.13.35 Lac.

16 Note:

While computing the Deferred tax liability /assets , benefit of brought forward losses has been taken on the basis of returned income(loss) instead of assessed income (loss) with regards to matters preferred in appeal (s).


Mar 31, 2013

I. Contingent liabilities:

Claims not acknowledged as debts Rs.516 Lacs net of tax u/s 115 JB Rs.415 Lacs. (Previous year Rs.594 Lacs net of tax u/s 115 JB Rs.476 Lacs).

ii. Estimated amount of contracts remaining to be executed on capital account is nil and not provided for (Net of Advances) (Previous year Rs.212 Lacs).

iii. Exceptional items represents Proft/(Loss) on sale of vehicle.

Note: Figures in bracket relates to the previous year

No amounts have been written off / provided for or written back during the year in respect of amounts receivable from or payable to related parties.

Term Loans From Banks:

(1.1) Rupee Loan from Canara Bank of Rs.875 lacs at interest rate of 15.00% p.a is payable in quarterly instalments as follows:- (a) Rs.688 lacs ( From April''2013 to March''2014) Refer Note No.9(a)

(b) Rs.188 lacs ( From April''2014 to June 2014).

(1.2) Cash Credit and Term Loans sanctioned by State Bank of Patiala/Canara Bank are secured by frst and exclusive charge on all present and future current assets (excluding vehicles) and fxed assets including Plant & Machinery/ immovable properties situated at Bahadurgarh & Moradabad together with all Building and structures thereon, equitable mortgage of Land & Building at Gurgaon in the Name of Ispace Developers Pvt Ltd and exclusive charge on company''s Brand "MILKFOOD". The State bank of Patiala has also extended supplier''s line of credit to the extent of Rs. 400 lacs covered in the charge created by the company in its overall limits.

2. Vehicle loans are secured against hypothecation of respective vehicles.

(2.1) Vehicle Loans (fve in number) from ICICI Bank are repayable in monthly instalments of varied amount and repayable by February 2015 and carry interest rate of 10.49% to 12% p.a based upon terms & conditions of respective Loans.

(2.2) Vehicle loan from BMW Financial Services is payable in 5 years monthly instalments and is repayable by September 2016 and carry interest rate of 12% p.a. (Refer note no. 9 (a))

(2.3) Vehicle Loans (fve in number) from Kotak Mahindra Prime Ltd are repayable in monthly instalments of varied amount and are repayable by December 2015 and carry different rates of interest in range of 10.55% to 11.94%. (Refer note no. 9 (a))

3. Loan from Religare Finvest limited carry foating rate of Interest of 16% in respect of both the loan of Rs. 700 lacs & of Rs.1500 lacs. Both the loans are on equated monthly of Rs. 11 lacs and Rs.17 lacs respectively and are repayable by 1st March 2018. (Refer note no. 9 (a))

4. Intercorporate Deposits are repayable by September 2014 and carry interest @ 14% p.a. on net basis.

5. Public Deposits:-

(5.1) Public deposits are repayable as under:

(a) Rs. 539 lacs Payable by March 2014 and carry interest of 10.50% to 11.50%. (Refer note no. 9 (a))

(b) Rs. 555 lacs Payable by March 2015 & 2016 and carry interest of 11% to 11.50% (5.2) Public deposits guaranteed by Directors Rs.281 lacs/- (5.3) Public deposits matured but unclaimed amount to Rs. 9 lacs (Previous Year 10 lacs).

1. Addition represents stamp duty/ charges paid on registration of Moradabad land in favour of the company.

2 (i) Operations of Casein Plant (Patiala) remained suspended till December''2012 because of ban on export of casein, which had been partially lifted in August''

2012. Company obtained the license during the year and has manufactured and exported 140 MT and 119 MT respectively. Company is very optimistic about the future and has made the projections of cash fow of 5 years considering that it will be able to manufacture and sell 1200MT of casein during the FY2013-14 based upon the orders in hand of 544 MT.and at incremental growth @5% for subsequent years. . In confrmity with Accounting Standard AS- 28 issued by the ICAI, the total carrying amount of assets including intangible Assets is Rs.3432 lacs of Casien Plant. and the present value of the future cash fow discounted @ 12% is Rs3467 lacs. Since present value of Rs 3467 lacs exceeds the carrying amount , no impairment of Asset is recognised.

(ii) Includes intangible assets of Rs. 597 lacs written down value of Rs. 352 lacs. In accordance with AS-26 expenses incurred on development/defning the manufacturing process of any product to meet the required standard is recognized as Intangible Asset and is amortized over a period of 10 years. The amount amortized during the year is Rs. 60 lacs ( Previous Year Rs.60 lacs).

3 Assets at Gurgaon:

(a) Plant and Machinery and furniture and fxtures held for disposal have been depreciated at the rates prescribed under Schedule XIV of the Companies Act. The aggregate written down value of such assets is Rs.17.75 Lacs (Previous year Rs.21.09 lacs). Plant and Machinery and furniture and fxtures held for disposal have been depreciated at the rates prescribed under Schedule XIV of the Companies Act. The aggregate written down value of such assets is Rs.15 lacs under Schedule XIV of the Companies Act. The aggregate written down value of such assets is Rs.15 lacs (Previous year Rs.18 lacs).

4 (i) Based upon technical evaluation about life of assets Company has charged depreciation on Plant & Machinery at the rate 3.17% instead at 4.75% prescribed in schedule XIV of the Companies Act 1956.As a result depreciation charged is less by Rs.84 lacs during the year. Company has made an application for approval of lower rates than prescribed in schedule XIV of the Companies Act 1956. Approval from Ministry of Corporate Affairs is awaited.

(ii) Addition to plant and machinery at Patiala Unit of Rs 870 lacs includes expenses of Rs 100 lacs being proportionate overheads capitalized at the close of the year and depreciation provided accordingly.

5. Company has capitalized the opening work in progress and the additions made during the year (including substantial renovation) at the close of the year and accordingly charged the depreciation.

1. In the earlier years company had invested Rs.425 lacs in the preference share capital of M/s Grand Regency Hospitalities (P) Ltd. The investee company had stopped the business due to termination of lease of premises. More than 50% of net worth of investee company is eroded due to losses. However Company is of the view that there is no need for creating any provision for diminution in the value of investments considering the estimated fair value of the Brand of investee company.

2. Pledged with Government Authorities towards fulfllment of statutory obligations.

1. (a) Stocks on consignment of Rs.31 lacs (Previous year Rs 25 lacs ) remains unconfrmed at the year end.

(b) Includes stock of Whey Powder (By-product) of Rs. 27 lacs (previous year Rs 69 lacs).

(c). Includes Rs.35 lacs towards unutilized Input Credit . Management is of the opinion that the same will be utilized in the next fnancial year.

1 Include Rs.200 lacs paid by the company to the respondents on the directions of Hon''ble Supreme Court for admitting the Special Leave Petition against the order of High Court of Patna confrming the payment of Rs.328 lacs (Shown as Contingent Liability) Hon''ble supreme court has ruled that Delhi High court holds the jurisdiction . Management believes that the matter will be decided within 12 months of the reporting date.

2. Represents amount deposited in earlier years on a demand raised by the authorities. Identical matter is pending in appeal before Supreme Court. Management believes that the same is likely to be decided in the coming year.

3. Includes Rs.19 lacs pertaining to earlier years for disputed matters pending in appeals.

4. Represents balance due on account of VCS certifcates at the close of the year. In the opinion of management and as certifed by the consultant that in view of the improved international prices the remaining VCS certifcates will be sold by next fnancial year and the amount realized will not be less than the amount recorded in books.

1 Based upon technical evaluation about life of assets Company has charged depreciation on Plant & Machinery at the rate 3.17% instead at 4.75% prescribed in schedule XIV of the Companies Act 1956. As a result depreciation charged is less by Rs.84 lacs during the year. Company has made an application for approval of lower rates than prescribed in schedule XIV of the Company Act 1956. Approval from Ministry of Corporate affairs is awaited.

2. Refer note 3 of Note 11 A

1 While computing the Deferred tax liability /assets , beneft of brought forward losses has been taken on the basis of returned income(loss) instead of assessed income (loss) with regards to matters preferred in appeal (s).


Mar 31, 2012

I. Contingent liabilities:

Claims not acknowledged as debts Rs.594.43 lacs net of tax u/s 115 JB Rs.475.50 Lacs. (Previous year Rs.766.56 lacs net of tax Rs.613.98 lacs).

ii. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) Rs.211.82 lacs (Previous year Rs. 58.87 lacs).

iii. Exceptional items represents Profit/(Loss) on sale of vehicles.

iv. Extra ordinary items represent miscellaneous income arising on account of recovery made from contractual obligations of earlier years.

Note:- Figures in bracket relates to the previous year

No amounts have been written off / provided for or written back during the year in respect of amounts receivable from or payable to related parties.

Notes:-

1 Term Loans From Banks:

(1.1) Rupee Loan from Canara Bank of Rs.1500 lacs at interest rate of 15.50% p.a is payable in quateriy instalments as follows:-

(a) Rs. 62.50 lacs from September 2011 to June 2012

(b) Rs. 125.00 lacs from September 2012 to June 2013

(c) Rs. 187.50 lacs from September 2013 to June 2014.

(1.2) Rupees Loan from State Bank of Patiala are repayable in equated monthly instalments of Rs.35.90 lacs and Rs. 8.50 lacs upto a period of 5 years from the date of respective loan. Loan is repayable by 30th August, 2012 and carry interest of 15.25% & 15.75% p.a.

(1.3) Cash Credit and Term Loans sanctioned by state Bank of Patiala/Canara Bank are secured by first and exclusive charge on all present and future current assets and fixed assets including Plant & Machinary/ immovable properties situated at Bahadurgarh & Moradabad together with all Building and structures thereon, equitable mortagage of Land & Building at Gurgaon in the Name of Ispace Developers Pvt Ltd and exclusive charge on company's Brand “MILKFOOD’. The State bank of Patiala has also extended supply line of credit to the extent of Rs. 8 crore against which company has created a charge on its immovable assets.

2. Vehicle loans are secured against hypothecation of respective vehicles.

(2.1) Term Loans (Vehicle) from ICICI Bank are repayable in monthly instalments of varied amount and repayable by February 2015 and carry interest rate of 6.66% to 12% p.a based upon terms & conditions of respective Loans.

(2.2) Vehicle loan from BMW Financial Services is payable in 5 years monthly instalments and is repayable by September 2016 and carry interest rate of 12% p.a.

(2.3) Vehicle Loans (thirty three in number) from Kotak Mahindra Prime Ltd are repayable in monthly instalments of varied amount and are repayable by March 2013 and carry different rates of interest.

3. Loan from Religare Finvest limited carry floating rate of Interest of 15.5 to 16% (in respect of loan of Rs.7.00 crores & of Rs.15.00 crores). Loan of Rs.7 crores is repayable in equaled monthly instalment of Rs. 10,45,176/- and repayable by 1.11.2021. Similarly loan of Rs.15 crore is payable in Equal monthly instalements of Rs.16,50,461/- is repayable by 1st March 2021.

4. Intercorporate Deposits are repayable by September 2014 and carry interest @ 12% p.a. on net basis.

5. Public Deposits:-

(5.1) Public deposits are repayable as under:

(a) Rs. 4,31,40,000 Payable by March 2013 and carry interest of 10-11.50%

(b) Rs .3,64,16,000 Payable by march 2014 & 2015 and carry interest of 10-11.5%

(5.2) Public deposits guaranteed by Directors Rs.1,26,58,000/-

(5.3) Public deposits matured but unclaimed amount to Rs 9.78 lacs (Previous Year 5.38 lacs).

Note:-

1. No provision for Gratuity liability as on 31st March, 2012 amounting to Rs.196.59 lacs (Previous year Rs. 220.57 lacs) calculated in accordance with acturial valuation as per AS-15 (Revised), of which (Rs.23.98 lacs) relates to current year (Previous year Rs.35.85 lacs) has been made in these accounts.

Notes:-

1. Land purchased at Moradabad includes Land valued at Rs.85.09 lacs (previous year Rs.85.09 lacs) for which agreement to purchase has been entered and steps are being taken to register the land in the name of the company. The company is in full control and possession of the land and the same is used for the business purposes.

2. (i) Operations of Casein Plant (Patiala) remained suspended during the year under Audit due to ban on export of casein, which has been partially lifted with condition of obtaining licence from DGFT. Company is in the process of making an application for obtaining licence. Total carrying amount of fixed assets including intangible assets is Rs. 3632 lacs (Previous Year Rs. 3787 Lacs) as at close of the year. Interest of Rs. 75.41 lacs has been debited to Plant & Machinery Casein Plant. In pursuance of requirement of AS-28 Company is in the process of computing the projections of cash flow and present value, considering the global economic scenario. Management has utilized portion of Assets of Casein plant for its dairy business considering the facts as stated. Management is of view that there is no impairment of Assets within the meaning of AS-28 and hence no provision as such is made during the year.

(ii) Includes intangible assets of Rs. 59677 (thousands) written down value of Rs. 41207 (thousand). In accordance with AS-26 - expenses incurred on development/defining the manufacturing process of any product to meet the required standards is recognized as Intangible Asset and is amortized over a period of 10 years. The amount amortized during the year is Rs.59.67 lacs (Previous Year Rs. 59.67 Lacs).

3. Assets at Gurgaon:

Plant and Machinery and furniture and fixtures held for disposal have been depreciated at the rates prescribed under Schedule XIV of the Companies Act. The aggregate written down value of such assets is Rs.17.75 lacs (Previous year Rs. 21.09 lacs).

Note:-

1. Includes Rs. 47993 thousands capitalised during the year in respect of expenses incurred in earlier years through erstwhile subsidiary company. No depreciation has been charged during the year under audit.

Notes:-

1. In the earlier years company had invested Rs. 425 lacs in the preference share capital of M/s Grand Regency Hospitalities (P) Ltd. The investee company had stopped the business due to termination of lease of premises. More than 50% of net worth of investee company is eroded due to losses. However Company is of the view that there is no need for creating any provision for dimunition in the value of investments considering the estimated fair value of the Brand of investee company.

2. Pledged with Government Authorities towards fulfilment of statutory obligations.

Notes:-

1. Refer Note 19(4).

2. Is receivable in three financial years i.e by 2014-15

3. Refer Note No. 19(2).

4. Refer Note No. 19(3).

Note:-

1. (a) Stocks on consignment of Rs.24.83 lacs (Rs.200 lacs ) remains unconfirmed at the year end.

(b) Closing stocks includes stock of Whey Powder (By-product) of Rs. 68.87 lacs (previous year Rs. 425 lacs). Net realizable value of Rs.100/- per kg is estimated by the Management on the basis of net realizable value of the final product.

Notes:-

1. Loans & Advances include Rs. 2.00 crores paid by the company to the respondents on the directions of Hon'ble Supreme Court for admitting the Special Leave Petition against the order of high Court of Patna confirming the payment of Rs. 3,28,35,000/-. As the matter is subjudice no amount has been charged to Statement of Profit & Loss .

2. Loans and advances includes Rs. 59.27 lacs deposited in earlier years against the demand raised by the Punjab State Electricity Board. Identical matter in third party case is pending before the Supreme Court hearing of which is fixed in the last week of October, 2012. Company is reasonably hopeful that the matter will be decided against PSEB and Company will be entitled to refund from PSEB. Therefore amount is retained as recoverable till the matter is finally decided by the Supreme Court. Keeping in view the facts as stated the amount is expected to be realized with in 12 months.

3. Balance with sales tax authorites is considered to be realizable within a period of 12 months as it is pending appeals will be decided in favour of company with in 12 months of reporting date.

4. Under United Nation Framework Convention on Climate Change (UNFCCC) Company's project for 1.60MW Bundled Rice Husk Based co-generation plant at factory premises Patiala & Moradabad has been approved by the Host Country. As per certificate of consultant 69683 VCS Per Year have been approved and same have been registered with VCS Registry NYSE BLUE. Similarly the CDM project of company has been registered w.e.f 14.02.2012 with UNFCCC after due validation process Carbon reduction (CER's) are 69692 per annum and applicable till 23.02.2022. Further consultant has certified that on conservative basis company must realise a minimum of Rs. 818 lacs by sale of carbon credits that company has earned for two calender years 2009-10 and for a period up to 31.05.2011.

1. A sum of Rs.4.00 lacs has been charged to Statement of Profit and Loss on account of reduction in estimated realizable value in respect of general stores of Rs.32.79 lacs (previous year Rs.36.79 lacs)


Mar 31, 2011

1. Contingent liabilities:

Claims not acknowledged as debts Rs.766.56 Lacs net of tax u/s 115 JB Rs.613.98 Lacs. (Previous year Rs.755.93 Lacs net of tax Rs.627.46 lacs).

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) Rs.58.87 Lacs (Previous year Rs. 1.51 Lacs)

3. Equity shares capital include 30,10,225 Equity Shares (Previous year 30,10,225) allotted by way of Bonus Shares by capitalisation of General Reserve/Share Premium Account.

4 (i) Cash Credit, Term Loan and other term loans sanctioned by State Bank of Patiala/Canara Bank are secured by first and exclusive charge on all present and future current assets and fixed assets including Plant & Machinery/immovable properties situated at Bahadurgarh & Moradabad together with all Buildings and structures thereon, equitable mortgage of land & building at Gurgaon in the name of Ispace Developers Pvt Ltd and exclusive charge on company's Brand 'milkfood'. The State Bank of Patiala has also extended supply line of credit to the extent of Rs.8 Crores against which company has created a charge on its immovable assets.

(ii) Vehicles Loans are secured against hypothecation of vehicles.

(iii) Term Loans payable within one year are Rs.1169.15 Lacs (Previous Year 859.00 Lacs).

5. Schedule 3 Unsecured Loans include deposits of Rs.5.38 Lacs (Previous year - Rs.3.13 Lacs) matured but not claimed. Deposits for Rs.3.68 Lacs have since been renewed/repaid.

6a. Schedule 9 - Loans and advances includes amount due from Directors of the Company as at 31st March, 2011 Rs.0.22 Lacs (Previous Year Rs.0.24 lacs). Maximum amount due at any time during the year Rs.3.68 lacs (Previous year Rs.4.07 lacs).

6b. Schedule - 10 Current Liabilities includes Rs.0.06 lacs due to directors of the Company (Previous Year Rs.0.11 lacs). Maximum amount due during the year Rs.0.11 lacs.

7. No provision for gratuity liability as on 31st March, 2011 amounting to Rs.220.57 Lacs (Previous year Rs. 184.72 Lacs) calculated in accordance with actuarial valuation as per AS-15 (Revised), of which Rs.35.85 Lacs relates to current year (Previous year Rs.NIL Lacs) has been made in these accounts.

8. Schedule 9 - Loans and advances include Rs.498 Lacs recognized in current year (For Previous Year Rs.320 Lacs) pending registration and sale of carbon credits, is based on UNFCCC validator's report.

9. There is no amount due to any party under Micro, Small and Medium Enterprises Development Act, 2007.

10. Land at Moradabad of Rs.85.09 Lacs (previous year Rs.85.09 Lacs) purchased through an Associate Company, for which steps have been taken to register the same in the name of the company. The company is in full control and possession of the land and the same is used for the business purposes.

11. Assets at Gurgaon:

(a) Plant and Machinery and furniture and fixtures held for disposal have been depreciated at the rates prescribed under Schedule XIV of the Companies Act. The aggregate written down value of such assets is Rs.21.09 Lacs (Previous year Rs.26.44 Lacs).

(b) A sum of Rs.4.00 Lacs has been charged to Profit and Loss Account on account of reduction in estimated realizable value in respect of general stores of Rs.36.79 Lacs (previous year Rs.40.79 Lacs).

12. The Company had invested Rs.425 lacs in the preference share capital of M/s Grand Regency Hospitality Private Ltd. The investee company has stopped the business as the lease of the premises occupied by it could not be renewed. The investee company is finalizing new lease and other options to carry on the business. Considering the estimated fair value of the brand of the investee company and other net realizable value of the assets, the company is of the view that no provision is required in this year as the diminution in the value of investment due to suspension of business by the investee company is temporary in nature.

13. (i) Stocks on consignment of Rs.2 Crores is pending comfirmation at the year end.

(ii) Miscellaneous receipts includes Rs.66.08 Lakhs representing differential amount on account of revision of rates of export sales.

14. In conformity with Accounting Standard AS-28 issued by the ICAI, the total carrying amount of assets including intangible assets is Rs. 3787 Lacs. In pursuance of projections made for the financial year 2010-11. Company has registered sale of casein (including Whey Powder of Rs.1223 Lacs) against projected sales of Rs.3948 Lacs. At present, export of Casein is banned. However, Management is hopeful that the ban will be lifted in the near future. Considering the entire current and likely economic scenario (Global & domestic) Company has revised projections and has estimated the present value at Rs.4241.00 Lacs. Projections of 10 years includes sale of Whey Powder in domestic market. While making the projections, Management has duly considered the factors in the past and consciously has made the projection on most conservative basis. Therefore in the opinion of Management there is no impairment of assets within the meaning of AS-28.

15. Loans & Advances include Rs.8.75 Lacs recoverable on account of Sales Tax of earlier years which are outstanding from earlier years:

16. During the year M/S Ispace Developers Pvt. Ltd. has ceased to be the subsidiary of the company. M/S MFL Trading Private Limited has become the wholly owned subsidiary of the company.

17. Related Party Disclosures

In accordance with the requirements of Accounting Standard 18 on the Related Party Disclosures, the transactions and Related Parties with whom transactions have taken place during the year are as follows:

(A) Related parties and transactions with them as identified by the management are given below:

List of related parties with whom transactions have taken place.

(a) Enterprises over which Major shareholders, Key Management Personnel and their relatives have significant influence -

- Jagatjit Industries Ltd. (Associate Concern)

- Ispace Developers Pvt. Ltd. (Wholly owned subsidiary)

(b) Key Management Personnel (Directors) and their relatives

(a) Mr. Umesh Saxena (Managing Director)

(b) Ms. Asha Gadi

(c) Mr. Suresh Alipuria

(d) Mr. Amarjeet Kapoor

(e) Mr. K.K. Kohli

(f) Mr. Nitin Saxena (son of Mr. Umesh N. Saxena)

(g) Mr. Udit Saxena (son of Mr. Umesh N. Saxena)

22. Capacities, production, sales, opening and closing stocks

*A As per Notification No.477 (E) dated 25-07-91 issued under the Industries (Development and Regulation) Act, 1951.

*B Installed capacity, being a technical matter, is as certified by Management on which Auditors have relied upon.

*C This comprises Weaning Food, Milk Powder, Infant Milkfood, Condensed Milk and Cheese.

*D The products are manufactured in integrated plant; hence, installed capacity cannot be given.

*E Captive consumption is not included.

18. Previous Years figures have been recast /regrouped where ever necessary in order to conform to the current years' presentation.


Mar 31, 2010

1. Contingent liabilities:

Claims not acknowledged as debts Rs. 755.93 lacs net of tax Rs. 670.28 lacs (Previous year Rs. 736.68 lacs net of tax Rs. 653.21 lacs).

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) Rs. 1.51 lacs (Previous year Rs. 39.52 lacs)

3. Equity shares capital include 30,10,225 Equity Shares (Previous year 30,10,225) allotted by way of Bonus Shares by capitalisation of General Reserve/Share Premium Account.

4 (i) Cash Credit, Term Loan and other term loans sanctioned by State Bank of Patiala is secured by first and exclusive charge on all present and future current assets and fixed assets including Plant & Machinery/immovable properties situated at Bahadurgarh & Moradabad together with all Buildings and structures thereon, equitable mortgage of land & building at Gurgaon in the name of Ispace Developers Pvt Ltd and exclusive charge on companys Brand milkfood. The Bank has also extended supply line of credit to the extent of Rs. 8 crores against which company has created a charge on its immovable assets.

(ii) Vehicles Loans are secured against hypothecation of vehicles.

(iii) Term Loans payable within one year are Rs. 859 lacs (Previous Year 1016.27 lacs).

5. Unsecured Loans (Schedule 3) include deposits of Rs. 3.13 lacs (Previous year - Rs. 0.70 lacs) matured but not claimed. Deposits for Rs. 2.23 lac have since been renewed.

6. Loans and advances (Schedule 9) includes amount due from Directors of the Company as at 31st March, 2010 Rs. 0.24 lacs (Previous Year Rs. 1.39 lacs). Maximum amount due at any time during the year Rs. 4.07 lacs (Previous year Rs. 3.95 lacs). Current Liabilities (Schedule 10) includes Rs. 0.11 lacs due to directors of the Company (Previous Year Rs. 1.20 lacs). Maximum amount due during the year Rs. 0.11 lacs.

7. Loans and Advances/sales include Rs. 3.20 crores towards sale of Carbon credits under clean development mechanism (CDM) of Kyoto Protocol pending final registration with UNFCCC and actual sales in the International market.

8. No provision for gratuity liability as on 31st March, 2010 amounting to Rs. 184.72 lacs (Previous year Rs. 213.67 lacs) calculated in accordance with actuarial valuation as per AS-15 (Revised), of which Rs. NIL relates to current year (Previous year Rs. 46.03 lacs) has been made in these accounts. Above calculations are based upon the limit of Gratuity of Rs. 3.5 lakhs instead of revised limit of Rs. 10.00 lakhs per employee under the payment of Gratuity Act, 1972.

9. As per information available with the company there is no amount due to any party under Micro, Small and Medium Enterprises Development Act, 2007.

10. Land purchased at Moradabad includes Land valued at Rs. 85.09 lacs (previous year Rs. 85.09 lacs) for which agreement to purchase has been entered and steps are being taken to register the land in the name of the company.

11. Assets at Gurgaon:

(a) Plant and Machinery and furniture and fixtures held for disposal have been depreciated at the rates prescribed under Schedule XIV of the Companies Act. The aggregate written down value of such assets is Rs. 26.44 lacs (Previous year Rs. 31.78 lacs).

(b) A sum of Rs. 4.00 lacs has been charged to Profit and Loss Account on account of reduction in estimated realizable value in respect of general stores of Rs. 40.79 lacs (previous year Rs. 44.79 lacs).

12. The Company had invested Rs. 425 lacs in the preference share capital of M/s Grand Regency Hospitality Pvt Ltd. The investee company has stopped the business as the lease of the premises occupied by it could not be renewed. The investee company is finalizing new lease and other options to carry on the business. Considering the estimated fair value of the brand of the investee company and other net realizable value of the assets, the company is of the view that no provision is required in this year as the dimunition in the value of investment due to suspension of business by the investee company is temporary in nature.

13. (i) Stocks on consignment of Rs. 1.08 crores remains unconfirmed at the year end.

(ii) Miscellaneous receipts includes Rs. 17.70 lacs representing differential amount on account of revision of rates of sales.

14. In conformity with Accounting Standard AS-28 issued by the ICAI, the total carrying amount of assets including intangible assets is Rs. 4027 lacs of Casein Plant. The Company in the year 2008-09 had projected the future cash inflow of 4 years from the said plant and calculated the present value @12% of Rs. 5646 lacs. Company has made sales of Rs. 6.77 crores during the financial year 2009-10 against the projected sales of Rs. 35.17 crores. Company has reprojected the future cash flow of 10 years based upon the current and likely economic scenario and has recalculated the present value @ 12% of Rs. 4844 lacs against the carrying amount of Rs. 4027 lacs. Therefore in the opinion of Management there is no impairement of assets within the meaning of AS-28.

15. Current Liabilities includes Rs. 9.00 crores received from a Company as interest free deposit for short term purposes.

16. Loans & Advances include Rs. 8.75 lacs recoverable on account of Sales Tax of earlier years which are outstanding from earlier years: -

17. Deferred Tax

As per Accounting Standard (AS-22), "Accounting for Taxes on Income" issued by the ICAI, Deferred Tax Asset (Net) for the year has been accounted for at Rs. 121.42 lacs as income (Previous Year Rs. 223.91 Lacs as income) in the Profit & Loss Account.

Deferred Tax Liability (Net) as at 31st March 2010 is net of deferred tax asset in respect of unabsorbed depreciation of Rs. 2620.47 lacs (Previous Year Rs. 1844.01 lacs). Deferred Tax Asset has been recognized in cases where the company has been allowed relief in first appeal in respect of addition/disallowances made in assessment proceedings of Income Tax.

18. Related Party Disclosures

In accordance with the requirements of Accounting Standard 18 on the Related Party Disclosures, the transactions and Related Parties with whom transactions have taken place during the year are as follows:

(A) Related parties and transactions with them as identified by the management are given below:

List of related parties with whom transactions have taken place.

(a) Enterprises over which Major shareholders, Key Management Personnel and their relatives have significant influence-

- Jagatjit Industries Ltd. (Associate Concern)

- Ispace Developers Pvt. Ltd. (Wholly owned subsidiary)

(b) Key Management Personnel (Directors) and their relatives Dr. Umesh N. Saxena

Ms. Asha Gadi

Mr. Suresh Alipuria

Mr. Amarjeet Kapoor

Mr. K.K. Kohli

Mr. Nitin Saxena (son of Dr. Umesh N. Saxena)

Mr. Udit Saxena (son of Dr. Umesh N. Saxena)

26. Previous Years figures have been recast /regrouped where ever necessary in order to conform to the current years presentation.

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