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Notes to Accounts of Flex Foods Ltd.

Mar 31, 2017

Explanations for reconciliation of Balance Sheet as previously reported under IGAAP to Ind AS

A. Inventories

The Company has valued its Inventory of Fresh Mushroom in accordance with the provisions contained in Ind As 41- Agriculture produce harvested from an entity’s biological assets are measured at its fair value less costs to sell at the point of harvest. Accordingly, the value of inventory has been increased by Rs. 10.79 Lacs with corresponding adjustment to retained earnings.

B(i). Other Equity

1. The Cumulative Impact of Total Comprehensive Income of Rs.402.34 Lacs resulting into the increase in Other Equity to that extent.

2. In accordance with the Ind AS; Proposed Dividend are recognized as a liability when it is approved by the Shareholders. Accordingly, Rs.374.61 Lacs In respect of proposed dividend including dividend distribution tax of Rs.63.36 Lacs has been derecognized with corresponding adjustment to Provisions.

B(ii).Provisions

Adjustments reflect dividend (including corporate dividend tax), declared and approved post reporting period.

C. Deferred tax Liability

Adjustment reflect Deferred tax Liability due to increase in inventory valuation as per Ind AS 41-Agriculture Produce. Accordingly, deferred tax liability has been increased by Rs. 3.74 Lacs with corresponding adjustment to retained earnings.

D. other current assets

As per Ind As-12 Income Taxes, Unused Tax Credits are treated as deferred tax assets. Accordingly, Unused Tax Credits amounting to Rs. 45.87 Lacs has been reduced from the other current assets with corresponding adjustment to deferred tax assets.

Explanation for reconciliation of total Comprehensive Income

A. Revenue form operations

As per Ind As-18 Revenue, Commission on sales are treated as an adjustment to the revenue. Accordingly, Commission amounting to Rs. 17.80 Lacs has been reduced from the sales value and also the same amount has been reduced from the Administration & Selling expenses and it is only presentation.

B. Changes in inventories of Finished Goods & Work-In-Progress

As per Ind As 41- Agriculture produce harvested from an entity’s biological assets are measured at its fair value less costs to sell at the point of harvest. Accordingly the value of inventory has been increased by Rs.10.79 Lacs which results into increase in total comprehensive income by Rs.10.79 Lacs.

C. Employee benefit expenses

As per Ind As 19- Employee Benefits, actuarial gains and losses are recognized in other comprehensive income and not reclassified to profit and loss in a subsequent period. Accordingly, the amount of Rs. 1.32 Lacs has been reclassified from the employee benefits to other comprehensive income having no impact on total comprehensive income.

D. Current Tax

Tax component on actuarial gains and losses which is transferred to other comprehensive income under Ind AS with corresponding adjustment to deferred tax liability. Accordingly, the amount of Rs. 0.46 Lacs has been reclassified from the deferred tax liability to other comprehensive income having no impact on total comprehensive income.

E. deferred tax liability

Adjustment reflect Deferred tax Liability due to increase in inventory valuation as per Ind AS 41-Agriculture Produce. Accordingly, deferred tax liability has been increased by Rs. 3.74 Lacs with corresponding adjustment to retained earnings.

F. Mat Credit Entitlement

As per Ind As-12 Income Taxes, Unused Tax Credits are treated as deferred tax assets. Accordingly, Unused Tax Credits amounting to Rs. 45.87 Lacs has been adjusted from deferred tax liability.

(iii) Rights, preferences and restrictions attached to shares Equity Shares

The Company has one class of equity shares having a par value of Rs.10/- each. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

Notes:

These loans are secured on first pari passu charge basis (a) by way of hypothecation of movable fixed assets of the company and (b) by mortgage of immovable properties of the Company; situated at Lal Tappar Industrial Area and Chak Jogiwala (Chidderwala), Dehradun (Uttarakhand). These loans are also collaterally secured (a) by way of second pari passu charge on stocks & book debts of company and (b) by personal guarantee of one of the Director of the company.

# Out of the total outstanding of Rs.135.13 Lacs, Rs.31.36 Lacs has been paid in quarterly installments and the balance amount of Rs. 103.77 Lacs has been adjusted from the Debt Service Reserve account as stated in note no.6 of the financial statements. This loan has been fully repaid & charge satisfied.

1 RELATED PARTY TRANSACTION

Following disclosures are made, as per the definition of Related Parties defined in Indian Accounting Standard-24 “ Related Party Disclosures “ and Section 2(76) of the Companies Act,2013.

(A) List of Related Parties

i) Enterprise for which Reporting Enterprise is an Associate:

Uflex Limited

ii) Individual owning indirect interest in voting power of the company:

Shri.Ashok Chaturvedi ,Chairman (and his relatives)

iii) Key Management Personnel:

1) Shri S.K. Kaushik, Whole-time Director (and his relatives)

2) Shri Bhagwati Prashad Sharma, Manager (ceased w.e.f. 05.07.2016 (and his relatives)

3) Shri Rajesh Dheer, Company Secretary (and his relatives)

4) Shri Naval Duseja, Chief Financial Officer (and his relatives)

* For the purposes of this clause, the term ‘Specified Bank Notes'' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.

2. In the opinion of the board and to the best of their knowledge, value of realization of assets, other than property, plant & equipment in the ordinary course of the business, would not be less than the amount at which they are stated in the balance sheet.

3. Necessary disclosures under Micro, Small and Medium Enterprises Development Act 2006, could not be considered for previous years as the relevant information to identify the suppliers who were covered under the said Act were not received from such parties during the previous years.

4. Balances of some of the parties are subject to reconciliation & confirmations.

5. Due to change in power tariff of mushroom cultivation farm from rate schedule which was applicable for light and heavy industries to rate schedule applicable on agriculture allied activities, for the same refund from Uttarakhand Power Corporation Limited is receivable amounting to Rs. 242.74 Lacs pertains to the financial year 2015-16 & 2016

6. Out of which Rs. 96.18 Lacs pertains to the financial year 2015-16 has been recognized as income under the statement of profit & loss and balance amounting to Rs. 146.56 Lacs pertains to the financial year 2016-17 has been adjusted from power & fuel cost in current financial year.

7. Due to out break of Fire in the Factory premises of the Company situated at “Lal Tappar Industrial Area, P.O. Resham Majri, Haridwar Road, Dehradun “ on 24th April,2016; property, plant & equipment and Stock of the Company amounting to Rs. 42.56 Lacs & Rs. 248.79 Lacs respectively were destroyed, which is fully covered under the Insurance Policies undertaken by the Company. The Company has already filed the claim for the same with the Insurance Company.

8 The Board of Directors of the company has recommended a final dividend of Rs. 2.50 (Previous Year Rs. 2.50) per share aggregating to Rs.374.61 Lacs (Previous Year Rs. 374.61 Lacs) (including the dividend distribution tax of Rs.63.36 Lacs) ( Previous Year Rs. 63.36 Lacs)) for the Financial Year ended 31st March 2017 subject to the approval of the shareholder in the ensuing Annual General Meeting.

Financial Risk Management :

In the course of business, amongst others, the Company is exposed to several financial risks such as Credit Risk, Liquidity Risk, Interest Rate Risk, Exchange Risk & Commodity Price Risk. These risks may be caused by the internal and external factors resulting into impairment of the assets of the Company causing adverse influence on the achievement of Company''s strategies, operational and financial objectives, earning capacity and financial position.

The Company has formulated an appropriate policy and established a risk management framework which encompass the following process.

- identify the major financial risks which may cause financial losses to the company

- assess the probability of occurrence and severity of financial losses

- mitigate and control them by formulation of appropriate policies, strategies, structures, systems and procedures

- monitor and review periodically the adherence, adequacy and efficacy of the financial risk management system.

The Company enterprise risk management system is monitored and reviewed at all levels of management, Internal Auditors, Statutory Auditors, Audit Committee and the Board of Directors from time to time.

Credit Risk:

Credit Risk refers to the risks that arise on default by the counter party on its contractual obligation resulting into financial loss to the company. The company may carry this Risk on Trade and other receivables, liquid assets and some of the non current financial assets.

In case of Trade receivables, the company has framed appropriate policy for extending credits period & limit to each customer based on their profile, financial position and their external rating etc. The collections of trade dues are strictly monitored . In case of Export customers, even credit guarantee insurance is also obtained.

Company''s exposure to Credit Risk is also influenced by the concentration of risk from top five customers. The details in respect of the % of sales generated from the top customer and top five customers are given hereunder.

The credit risk on cash, cash equivalent and fixed deposit are insignificant as counter parties are public sector banks. The non current financial assets include security deposit with Govt. body, hence no associated credit risk

Liquidity Risk

Liquidity Risk arises when the company is unable to meet its short term financial obligations as and when they fall due.

The company maintains adequate liquidity in the system so as to meet its all financial liabilities timely. In addition to this, the company''s overall financial position is very strong so as to meet any eventuality of liquidity tightness.

Interest Rate Risk :

Generally market linked financial instruments are subject to interest rate risk. The company does not have any marked linked financial instrument both on the asset or liability side. Hence no interest rate risk.

In case of the borrowings by the company, the company is subject to interest rate risk on account of any fluctuation in the base rate fixed by the banks. Every fluctuation in the base rate of the bank either on the higher or lower side will result into financial loss or gain to the company

The borrowings of the company amounting to Rs. 3644.05 Lacs as on 31.03.2017, which is linked with the Base Rate of the Banks.

Based on the structure of debt as at year end, a one percentage point increase in the debt would cause an additional expense in the net financing cost of Rs. 36.44 Lacs.

Foreign Exchange Risk :

The company is exposed to the foreign currency risk from transactions. Transactional exposures are arising from the transactions entered into foreign currency. Management keeps a close watch of the maturity of the financial assets in foreign currency and payment obligations of the financial liabilities.

The company imported goods for insignificant amounts on trade account. Approximately 75% of revenue were earned in foreign currency due to nature of business being exports. In a way, Company is a net foreign exchange earner.

The Company did not undertake hedging to cover exchange risk and kept its foreign exchange exposure open mainly due to its supplies to customers overseas which were on Credit and it recoursed to discounting of such supply bills with its bankers. In this situation, the Exchange rate was crystallized on the date of discounting & did not remain open ended till the date of realization of Export proceeds. This measure also mitigated the Exchange Rate Risk.

Based on one percentage point variations in the exchange rate, the profit for the year based on the foreign currency transaction entered during the period will be effected by 4.97%.

Commodity Price Risk :

Raw materials which company procures from the open market are agricultural products, production of which is directly effected by weather conditions and pricing is linked to the prevailing demand & supply conditions of the products. Company mitigate this risk by bulk buying during season for off season use.

The company has been operating in a global competitive environment due to its dependence mainly on Exports. The competition has been becoming more fierce and it has been subject to major competition from other Asian Countries largely China which has been causing pressure on the product prices & volumes resulting into drop in the selling prices and profit margins.

In order to combat this situation, the Company formulated manifold plans and strategies to develop new customers, focus on newer product developments to increase its product portfolio and also accelerate its efforts to develop domestic market for its products. In addition to this, it has also been focusing on improvement in products quality and productivity of operations. With these measures, company expects to counter the commodity price risk.


Mar 31, 2016

1. RELATED PARTY TRANSACTION

Following disclosures are made, as per the definition of Related Parties defined in Accounting Standard-18 " Related Party Disclosures and Section 2(76) of the Companies Act,2013.

(A) List of Related Parties

i) Enterprise for which Reporting Enterprise is an Associate:

Uflex Limited

ii) Individual owning indirect interest in voting power of the company:

Shri.Ashok Chaturvedi ,Chairman (and his relatives)

iii) Key Management Personnel:

1) Shri S.K. Kaushik, Whole-time Director w.e.f. 1st March,2016 (and his relatives)

2) Shri Bhagwati Prashad Sharma, Manager (and his relatives)

3) Shri Rajesh Dheer, Company Secretary ( and his relatives)

4) Shri Naval Duseja ,Chief Financial Officer (and his relatives)

iv) Enterprises in which person referred in clause A(ii) along with their relatives exercise significant influence:

2. In the opinion of the board and to the best of their knowledge, value of realization of assets, other than fixed assets in the ordinary course of the business, would not be less than the amount at which they are stated in the balance sheet.

3. Necessary disclosures under Micro, Small and Medium Enterprises Development Act 2006, can only be considered once the relevant information to identify the suppliers who are covered under the said Act are received from such parties.

4 Figures have been rounded off to the nearest thousands.

5. These financial statements have been prepared in the format prescribed by the Schedule III to the Companies Act 2013. Previous Year figures have been recanted/ restated to conform to the classification of the Current Period.

6. Due to outbreak of Fire in the Factory premises of the Company situated at “Lal Tappar Industrial Area, P.O. Resham Majri, Haridwar Road, Dehradun “ on 24th April,2016; Fixed Assets and Stock of the Company estimating to be of Rs.

7. Lacs & Rs. 250 Lacs respectively were destroyed, which is fully covered under the Insurance Policies undertaken by the Company. The Company has already filed the claim with the Insurance Company.

8. The Company is now availing benefits under the EPCG Scheme of the Foreign Trade Policy 2015-20; after exit from the EOU Scheme as per the Final Debonding Letter received on 28th August, 2015.


Mar 31, 2015

(i) Rights, Preferences and Restrictions attached to Shares Equity Shares

The Company has one class of equity shares having a par value of Rs.10/- each. Each shareholder is eligible for one vote per share held. The Dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

Notes:

1) Term loans from Canara Bank are secured on first charge basis (a) by way of hypothecation of movable fixed assets of the Company and (b) by mortgage of immovable properties of the Company; situated at Lal Tappar Industrial Area and Chak Jogiwala (Chidderwala), Dehradun (Uttarakhand). These loans are collaterally secured (a) by way of first charge on stocks & book debts of Company and (b) by personal guarantee of one of the Director of the Company.

2) Term loan from Allahabad Bank is secured on first Pari passu charge basis (a) by way of hypothecation of movable fixed assets of the company and (b) by mortgage of immovable properties of the Company; situated at LalTappar Industrial Area and ChakJogiwala (Chidderwala) , Dehradun (Uttarakhand), (Mortgage yet to be created). This loan is collaterally secured (a) by way of second pari passu charge on the current assets of the Company and (b) by personal guarantee of one of the Director of the Company.

3 DEFERRED TAX LIABILITIES (NET)

In accordance with Accounting Standard-22(AS-22) "Accounting for Taxes on Income" as notified by the Companies Accounting Standard (Rules) 2006, the Cumulative Tax effects of significant timing differences, that resulted in Deferred Tax Asset and Liabilities and description of item thereof that creates these differences are as follows:

Notes:

Working Capital facilities from Canara bank are secured on first charge basis (a) by way of hypothecation of stock and book debts of the company; and collaterally secured on first charge basis; (a) by way of hypothecation of fixed assets; (b) by mortgage of immovable properties of the company situated at lal Tappar Industrial Area and Chak Jogiwala (Chidderewala), Dehradun (Uttarakhand) and (c) by personal guarantee of one of the Director of the Company.

4 GRATUITY & POST EMPLOYMENT BENEFIT

The Employees' Group Gratuity Scheme is managed by Life Insurance Corporation of India. The present value of obligation for Gratuity & other Post Employment benefit (i.e. Leave encashment) are determined based on actuarial valuation using the Projected Unit Credit Method. The additional disclosure in terms of Accounting Standards- 15(AS-15) "Employees Benefits" issued by The Institute of Chartered Accountants of India and as notified by Companies (Accounting Standards) Rules, 2006 is as under:

(Rs. in Lacs) Particulars As at 31.03.2015 As at 31.03.2014

5 CONTINGENT LIABILITIES AND COMMITMENTS

a) contingent Liabilities

i) Claims against the company not acknowledged as debt:

- Legal case pending with Doon Ghati Special Area - 2.86 Development Authority.

- Demands raised by the Income Tax department, 21.57 21.57 which are under appeal

- Show Cause notice received for the differential excise 81.46 379.19

duty & service tax from Customs & Central Excise Department not accepted by the company and are contested /replied (If liability arises it would be paid along with Interest & penalty.)

- Demand raised by Customs & Central Excise Department which are contested by the company. 595.58 698.61 - 421.62

ii) Guarantees Issued by the Bank ( Net of Margin) 11.48 11.79

iii) Import Duty Obligations on Outstanding Export 323.45 311.86

Commitments under EPCG

Total (a) 1033.54 745.27

b) commitments Estimated amount of contracts remaining to be executed on capital account (Net of Advances) and not provided for 784.39 25.37

Total (b) 784.39 25.37

6 RELATED PARTY TRANSACTION

Following disclosures are made, as per Accounting Standard-18 (As-18), regarding, "Related Party Disclosures" as notified by the Companies Accounting Standard (Rules) 2006:

(A) List of Related Parties

i) Enterprise for which Reporting Enterprise is an Associate:

Uflex Limited

ii) Individual owning indirect interest in voting power of the company:

Shri. Ashok Chaturvedi, Chairman (and his relatives)

iii) Key management Personnel:

1) Shri Bhagwati Prashad Sharma, Manager (and his relatives)

2) Shri Rajesh Dheer, Company Secretary (and his relatives)

3) Shri Naval Duseja,Chief Financial Officer (and his relatives)

iv) Enterprises in which person referred in clause A(ii) along with their relatives exercise significant influence:

1) Ultimate Flexipack Ltd., 2) Club One Airways Pvt. Ltd., 3) Flex Industries Pvt. Ltd., 4) AC Infratech Pvt. Ltd., 5) RC Properties Pvt. Ltd., 6) A to Z Infratech Pvt. Ltd., 7) AKC Investments Pvt. Ltd., 8) Ganadhipati Investments Pvt. Ltd., 9) Ultimate Prepress LLP., 10) Utech Developers Ltd., 11) AKC Retailers Ltd., 12) Ultimate Enterprises Pvt. Ltd., 13) Flex International Pvt. Ltd., 14) Anshika Investments Private Ltd., 15) Anant Overseas Pvt. Ltd., 16) Apoorva Extrusion Pvt. Ltd., 17) Anshika Consultants Pvt. Ltd., 18) A.R.Leasing Private Ltd., 19) Cinflex Infotech Pvt. Ltd., 20) Bundelkhand Projects Pvt.Ltd., 21) AR Infrastructure & Projects P Ltd., 22) AC Infrastructures Pvt. Ltd., 23) Ultimate Infratech Pvt. Ltd., 24) Flex Middle East FZE , 25) Uflex Europe Ltd., 26) Flex Americas S.A de C.V.Mexico , 27) Flex P. Films Egypt S.A.E, 28) Flex Films Europa Sp. Z.o.o.,Poland, 29) Flex Films (USA) Inc.,30) Flex P. Films (Brasil) Commercio De Films Plasticos LTDA ,31) First Flexipack Corporation , 32) Uflex Packaging Inc. (USA) , 33) UPET Holding Ltd.,Mauritius, 34) UPET (singapore) pte.Ltd.,35) SD Buildwell Pvt Ltd., 36) USC Holograms Pvt.Ltd. , 37) Kaya Kalpa Medical Services Pvt. Ltd.38) Niksar Finvest Pvt. Ltd., 39) Refex Energy ( Rajasthan) Pvt. Ltd., 40) Aone Infratech Pvt.Ltd.,41) Ganadhipati Infrapoject Pvt. Ltd., 42) Nirman Overseas Pvt. Ltd., 43) Holofix Urban Infrastructures Pvt. Ltd., 44) Laurel Real Estates Pvt. Ltd., 45) Sungrace Products (India) Pvt. Ltd., 46) AR Airways Pvt.Ltd., 47) Virgin Infrastructures Pvt. Ltd., 48) Vendee Builders Pvt. Ltd., 49)

7 Necessary disclosures under Micro, Small and Medium Enterprises Development Act 2006, can only be considered once the relevant information to identify the suppliers who are covered under the said Act are received from such parties.

8 Figures have been rounded off to the nearest thousand.

9 These financial statements have been prepared in the format prescribed by the Schedule III to the Companies Act 2013. Previous Year figures have been recasted/ restated to confirm to the classification of the Current Period.

10 Normal depreciation on all Fixed Assets except Land & Intangible Assets is charged on SLM Basis as per the Lifes specified in Schedule II of the Companies Act, 2013 after retaining 5% of the original cost as residual value. Further the carrying amount of the Assets whose remaining useful life is Nil as on 1st April,2014 ,amounting to Rs. 49.33 lacs has been adjusted from the Opening Reserves & Surplus after retaining 5% of the Original Cost as Residual Value. As a result of these changes, the depreciation charged for the year ended 31st March,2015 of Rs. 438.48 Lakhs is higher by Rs. 56.74 Lakhs and the effects relating to period prior to 1st April,2014 is Rs. 33.51 Lakhs has been adjusted from opening Reserves & Surplus. Accordingly Depreciation and Amortisation Expense for the Year ended 31st March, 2015 aggregates to 389.15 Lakhs.

11 During the year the Company has surrendered it's 100% Export Oriented Unit status and applied for Export Promotion Capital Goods Scheme under Para 6.18(d) of Foreign Trade Policy 2009-14 and subsequently has to complete exit formalities till 30th June, 2015.

Note : Signatories to Notes 1 to 44


Mar 31, 2014

COMPANY PROFILE

Flex Foods Ltd. was incorporated on 5th February, 1990 with the Registrar of Companies under the provisions of Companies Act 1956, having Corporate Identification Number (CIN) L15133UR1990PLC023970. The Registered office of Company is situated at Lal Tappar Industrial Area, P. O. Resham Majri, Haridwar Road, Dehradun (Uttarakhand).

Flex Foods Ltd., a 100% Export Oriented Unit, is engaged mainly in the business of cultivation and processing of Mushrooms, Herbs, Fruits & Vegetables in Freeze Dried, Air Dried and Individually Quick Frozen form.The world class state-of-the art facilities are located at Dehradun in the state of Uttarakhand. Flex Foods Ltd. has been selling its products mainly to the European and US markets, and has gained respectable status in the international market.

1. SHARE CAPITAL

Rights, Preferences and Restrictions attached to Shares

Equity Shares

The Company has one class of equity shares having a par value of Rs.10/- each. Each shareholder is eligible for one vote per share held. The Dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

2. Long Term Borrowings Secured

Notes:

Term loans from Canara Bank are secured on first charge basis (a) by way of hypothecation of movable fixed assets of the company and (b) by mortgage of immovable properties of the Company; situated at Lal Tappar Industrial Area and Chak Jogiwala (Chidderwala), Dehradun (Uttarakhand). These loans are collaterally secured (a) by way of first charge on stocks & book debts of company and (b) by personal guarantee of one of the Director of the company.

3. Short Term Borrowings

Working Capital facilities from Canara Bank are secured on first charge basis (a) by way of hypothecation of stock and book debts of the company; and collaterally secured on first charge basis; (a) by way of hypothecation of fixed assets; (b) by mortgage of immovable properties of the company situated at Lal Tappar Industrial Area and Chak Jogiwala (Chidderwala), Dehradun (Uttarakhand) and (c) by personal guarantee of one of the Director of the Company.

4. Fixed Assets

Notes

* Other Adjustments includes Interest of Rs.0.99 Lacs Capitalized as per Accounting Standard-16 (Borrowing Cost)

** Other Adjustments includes Interest of Rs.34.46 Lacs Capitalized as per Accounting Standard -16 ( Borrowing Cost) and Rs.(34.13 Lacs) towards Foreign Exchange Fluctuations Gain as per Accounting Standard-11 on Capital Transactions.

*** Other Adjustments includes Interest of Rs.1.79 Lacs Capitalized as per Accounting Standard-16 (Borrowing Cost)

5. GRATUITY

The Employees'' Group Gratuity Scheme is managed by Life Insurance Corporation of India. The present value of obligation for Gratuity & other Post Employment benefit (i.e. Leave encashment) are determined based on actuarial valuation using the Projected Unit Credit Method. The additional disclosure in terms of Accounting Standards-15 (AS- 15) "Employees Benefits" issued by The Institute of Chartered Accountants of India and as notified by Companies (Accounting Standards) Rules, 2006 is as under:

6. CONTINGENT LIABILITIES AND COMMITMENTS

As at 31.03.2014 As at 31.03.2014

a) Contingent Liabilities

i) Claims against the company not acknowledged as debt :-

* Legal case pending with Doon Ghati Special Area Development Authority. 20.86 20.86

* Demands raised by the Income Tax department, which are under appeal 21.57 187.75

* Show Cause notice received for the differential excise duty & service tax from Customs & Central Excise Department not accepted by the company and are contested/replied (If liability arises it would be paid along with Interest & penalty.) 379.19 -

* Demand raised by Customs & Central Excise Department which are contested by the company. - 421.62 23.91 232.52

ii) Bank Guarantee Outstanding (Net of Margin) 11.79 12.00 iii) Amount of Custom Duty (including CVD) payable in respect of import of capital goods by the company against bond in case of non- fulfillment of conditions imposed on 100% Export Oriented Unit 311.86 121.81

Total (a) 745.27 366.33

b) Commitments Estimated amount of contracts remaining to be executed on capital account (Net of Advances) and not provide for 25.37 563.96

Total (b) 25.37 563.96

7. RELATED PARTY TRANSACTION

Following disclosures are made, as per Accounting Standard-18 (As-18), regarding, "Related Party Disclosures" as notified by the Companies Accounting Standard (Rules) 2006:

(A) List of Related Parties

i) Enterprise for which Reporting Enterprise is an Associate:

Uflex Limited

ii) Individual owning indirect interest in voting power of the company:

Shri.Ashok Chaturvedi,Chairman (and his relatives)

iii) Key Management Personnel:

1. Shri Madan Mohan Varshney (and his relative ) - "Manager" under The Companies Act 1956 - Upto 05.07.2013

2. Shri Bhagwati Prashad Sharma (and his relative) ("Manager" under The Companies Act 1956) - From 05.07.2013

iv) Enterprises in which person referred in clause A(ii) along with their relatives exercise significant influence:

1) Ultimate Flexipack Ltd., 2) Club One Airways Pvt. Ltd., 3) Flex Industries Pvt. Ltd., 4) AC Infratech Pvt. Ltd., 5) RC Properties Pvt. Ltd., 6) A to Z Infratech Pvt. Ltd., 7) AKC Investments Pvt. Ltd., 8) Ganadhipati Investments Pvt. Ltd., 9) Ultimate Prepress LLP., 10) Utech Developers Ltd., 11) AKC Retailers Ltd., 12) Ultimate Enterprises Pvt. Ltd., 13) Flex International Pvt. Ltd., 14) Anshika Investments Private Ltd., 15) Anant Overseas Pvt. Ltd., 16) Apoorva Extrusion Pvt. Ltd., 17) Anshika Consultants Pvt. Ltd., 18) A.R.Leasing Private Ltd., 19) Cinflex Infotech Pvt. Ltd., 20) AR Aerotech Pvt. Ltd., 21) AR Infrastructure & Projects P Ltd., 22) AC Infrastructures Pvt. Ltd., 23) Ultimate Infratech Pvt. Ltd.,24) Flex Middle East FZE, 25) Uflex Europe Ltd., 26) Flex Americas S.A de C.V.Mexico, 27) Flex P. Films Egypt S.A.E, 28) Flex Films Europa Sp. Z.o.o., 29) Flex Films (USA) Inc.,30) Flex P. Films (Brasil) Comercio De Films Plasticos LTDA,31) Flex America Inc. (USA), 32) Uflex Packaging Inc. (USA), 33) UPET Holding Ltd.,Mauritius, 34) UPET (singapore) pte.Ltd.,35) SD Buildwell Pvt Ltd., 36) USC Holograms Pvt.Ltd., 37) Kaya Kalpa Medical Services Pvt. Ltd.38) Niksar Finvest Pvt. Ltd., 39) Refex Energy (Rajasthan) Pvt. Ltd., 40) A-One Infratech Pvt.Ltd.,41) Ganadhipati Infraproject Pvt. Ltd., 42) Nirman Overseas Pvt. Ltd., 43) Holofix Urban Infrastructures Pvt. Ltd., 44) Laurel Real Estates Pvt. Ltd., 45) Sungrace Products (India) Pvt. Ltd., 46) AR Airways Pvt.Ltd., 47) Virgin Infrastructures Pvt. Ltd., 48) Vendee Builders Pvt. Ltd., 49) Ultimate Energy Ltd., 50) Modern Info Technology Pvt.Ltd., 51) Liberal Advisory Pvt.Ltd., 52) Saga Realtors Pvt.Ltd., 53) Genius Infratech Pvt Ltd., 54) Naveli Collections Pvt.Ltd.

8. In the opinion of the board and to the best of their knowledge, value of realisation of assets, other than fixed assets in the ordinary course of the business, would not be less than the amount at which they are stated in the balance sheet.

9. Necessary disclosures under Micro, Small and Medium Enterprises Development Act 2006, can only be considered once the relevant information to identify the suppliers who are covered under the said Act are received from such parties.

10. Figures have been rounded off to the nearest thousand.

11. These financial statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act 1956. Previous Year figures have been recasted/ restated to confirm to the classification of the Current Period.o


Mar 31, 2013

1 COMPANY PROFILE

Flex Foods Ltd. was incorporated on 5th February, 1990 with the Registrar of Companies under the Indian Companies Act. The Registered Office of Company is situated at Lal Tappar Industrial Area, P. O. Resham Majri, Haridwar Road, Dehradun (Uttarakhand).

Flex Foods Ltd. a 100% export oriented unit, is engaged mainly in the business of cultivation and processing of Mushrooms, Herbs, Fruits & Vegetables in Freeze Dried, Air Dried and Individually Quick Frozen form. The world class state-of-the art facilities are located at Dehradun in the state of Uttarakhand. Flex Foods Ltd. has been selling its products mainly to the European and US markets, and has gained respectable status in the international market.

(i) Rights, preferences and restrictions attached to shares Equity Shares

The Company has one class of equity share having a par value of Rs.10/- each. Each shareholder is eligible for one vote per share held. The Dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

Notes:

1 Term Loan from Canara Bank is secured on first charge basis (a) by way of hypothecation of movable fixed assets of the company and (b) by mortgage of immovable properties of the Company; situated at Lal Tappar Industrial Area and Chak Jogiwala (Chidderwala), Dehradun (Uttarakhand). This loan is collaterally secured (a) by way of first charge on stocks & book debts of Company and (b) by personal guarantee of one of the Director of the Company.

2 Term Loan is bearing Interest at Base Rate 3.25%; and repayable in twenty eight equal quarterly installments commenced from 15th July 2012.

2 RELATED PARTY TRANSACTION

Following disclosures are made, as per Accounting Standard-18 (As-18), regarding, "Related Party Disclosures" as notified by the Companies Accounting Standard (Rules) 2006:

(A) List of Related Parties

i) Enterprise for which Reporting Enterprise is an Associate:

UFlex Limited

ii) Individual owning indirect interest in voting power of the Company:

Shri.Ashok Chaturvedi (Chairman)

iii) Key Management Personnel:

Shri Madan Mohan Varshney ("Manager" under The Companies Act 1956)

iv) Enterprises in which person referred in clause A(ii) along with their relatives exercise significant influence:

1) Ultimate Flexipack Ltd., 2) Club One Airways Pvt. Ltd., 3) Flex Industries Pvt. Ltd., 4) AC Infratech Pvt. Ltd., 5) RC Properties Pvt. Ltd., 6) A to Z Infratech Pvt. Ltd., 7) AKC Investments Pvt. Ltd., 8) Ganadhipati Investments Pvt. Ltd., 9) Ultimate Prepress LLP., 10) Utech Developers Ltd., 11) AKC Retailers Ltd., 12) Ultimate Enterprises Pvt. Ltd., 13) Flex International Pvt. Ltd., 14) Anshika Investments Private Ltd., 15) Anant Overseas Pvt. Ltd., 16) Apoorva Extrusion Pvt. Ltd., 17) Anshika Consultants Pvt. Ltd., 18) A.R.Leasing Private Ltd., 19) Cinflex Infotech Pvt. Ltd., 20) AR Aerotech Pvt. Ltd., 21) AR Infrastructure & Projects Pvt.Ltd., 22) AC Infrastructures Pvt. Ltd., 23) Ultimate Infratech Pvt. Ltd., 24) Flex Middle East FZE , 25) Uflex Europe Ltd., 26) Flex Americas S.A de C.V.Mexico , 27) Flex P. Films Egypt S.A.E, 28) Flex Films Europa Sp. Z.o.o., 29) Flex Films (USA) Inc.,30) Flex P. Films (Brasil) LTDA ,31) Flex America Inc.(USA) , 32) Uflex Packaging Inc. (USA) , 33) UPET Holding Ltd.,Mauritius, 34) UPET (Singapore) Pte.Ltd.,35) SD Buildwell Pvt Ltd., 36) Tflex Americas LLC , 37) Kaya Kalpa Medical Services Pvt. Ltd.38) Niksar Finvest Pvt. Ltd., 39) Refex Energy ( Rajasthan) Pvt. Ltd., 40) A-One Infratech Pvt.Ltd.,41) Ganadhipati Infraproject Pvt. Ltd., 42) Nirman Overseas Pvt. Ltd., 43) Holofix Urban Infrastructures Pvt. Ltd., 44) Laurel Real Estates Pvt. Ltd., 45) Sungrace Products (India) Pvt. Ltd., 46) AR Airways Pvt.Ltd., 47) Virgin Infrastructures Pvt. Ltd., 48) Vendee Builders Pvt. Ltd., 49) Ultimate Energy Ltd., 50) Modern Info Technology Pvt.Ltd., 51) Liberal Advisory Pvt.Ltd., 52) Saga Realotors Pvt.Ltd.

3 Necessary disclosures under Micro, Small and Medium Enterprises Development Act 2006, can only be considered once the relevant information to identify the suppliers who are covered under the said Act are received from such parties.

4 Figures have been rounded off to the nearest thousand.

5 These Financial Statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act 1956. Previous Year figures have been recasted/ restated to confirm to the classification of the Current Period. Note : Signatories to Notes 1 to 40


Mar 31, 2012

1. COMPANY PROFILE

Flex Foods Ltd. was incorporated on 5th February, 1990 with the Registrar of Companies under the Indian Companies Act. The Registered Office of Company is situated at Lal Tappar Industrial Area, P. O. Resham Majri, Haridwar Road, Dehradun (Uttarakhand).

Flex Foods Ltd., a 100% Export Oriented Unit, is engaged mainly in the business of cultivation and processing of Mushrooms, Herbs, Fruits & Vegetables in Freeze Dried, Air Dried and Individually Quick Frozen form. The world class state-of-the art facilities are located at Dehradun in the state of Uttarakhand. Flex Foods Ltd. has been selling its products mainly to the European and US markets, and has gained respectable status in the international market.

(i) Rights, preferences and restrictions attached to shares Equity Shares

The Company has one class of equity share having a par value of Rs.10/- each. Each shareholder is eligible for one vote per share held. The Dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

Notes:

1 Term loan from Canara Bank is secured on first charge basis (a) by way of hypothecation of movable fixed assets of the company and (b) by mortgage of immovable properties of the Company situated at Lal Tappar Industrial Area and Chak Jogiwala (Chidderwala), Dehradun (Uttarakhand). This loan is collaterally secured (a) by way of first charge on stocks & book debts of company and (b) by personal guarantee of one of the Director of the company.

2 Term Loan is bearing Interest at Base Rate 3.25%; and repayable in twenty eight equal quarterly installments commencing from 15th July 2012.

Working Capital facilities from Canara Bank are secured on first charge basis (a) by way of hypothecation of stock and book debts of company; and collaterally secured on first charge basis; (a) by way of hypothecation of fixed assets; (b) by mortgage of immovable properties of the Company situated at Lal Tappar Industrial Area and Chak Jogiwala (Chidderwala), Dehradun (Uttarakhand). and (c) by personal guarantee of one of the Director of the company.

2. GRATUITY

The Employees' Group Gratuity Scheme is managed by Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

3. CONTINGENT LIABILITIES AND COMMITMENTS

(Amount in Rupees)

Particulars As at As at 31.03.2012 31.03.2011

Percentage Amount Percentage Amount a) Contingent Liabilities

i) Claims against the company not acknowledged as debt :-

Legal case pending with Doon Ghati Special Area 2,086,422 2,086,422 Development Authority.

Outstanding demand under appeal before Income Tax 6,578,241 8,664,663 4,321,341 6,407,763

Authorities

ii) Bank Guarantee Outstanding ( Net of Margin) 1,244,804 1,161,466

iii) Amount of Custom Duty (including CVD) payable in 13,737,499 16,958,943 (Amount in Rupees)

Particulars As at As at 31.03.2012 31.03.2011

Percentage Amount Percentage Amount

respect of import of capital goods by the company against bond in case of non-ful fillment of conditions imposed on 100% Export Oriented Unit

Total (a) 23,646,966 24,528,172

b) Commitments

Estimated amount of contracts remaining to be executed on 2,437,670 31,953,568 capital account (Net of Advances) and not provided for

Total (b) 2,437,670 31,953,568

4. RELATED PARTY TRANSACTION

Following disclosures are made, as per Accounting Standard-18 (As-18), regarding, "Related Party Disclosures" as notified by the Companies Accounting Standard (Rules) 2006:

(A) List of Related Parties

i) Enterprise for which Reporting Enterprise is an Associate:

UFlex Limited

ii) Individual owning indirect interest in voting power of the company:

Shri.Ashok Chaturvedi (Chairman)

iii) Key Management Personnel:

Shri Madan Mohan Varshney ("Manager" under The Companies Act 1956)

Shri Prabir Ghatak (Chief Executive Officer) till 31.01.2012

5. Necessary disclosures under Micro, Small and Medium Enterprises Development Act 2006, can only be considered once the relevant information to identify the suppliers who are covered under the said Act are received from such parties.

6. Figures have been rounded off to the nearest rupee.

7. These financial statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act 1956. Previous Year figures have been recasted/ restated to confirm to the classification of the Current Period.

8. There is no separate reportable segment as required under "Accounting Standard -17" as notified by the Companies Accounting Standard (Rules) 2006.


Mar 31, 2010

(1) In the opinion of the Board of Directors, the Current Assets, Loans and Advances shown in the Balance Sheet have a value on realization in the ordinary course of business, at least equal to the amount stated therein. The provisions for all known liabilities have been made and are adequate.

(2) Contingent Liabilities: -

As at As at

31-03-2010 31-03-2009 (Rupees) (Rupees)

(a) Amount of Custom Duly (including CVD) payable in respect of import of capital goods by the Company against bond in case cf non fulf illment of conditions imposed on 100% Export Oriented Unit. 5,01,76,899 5,13,40.900

(b) Bank Guarantees Outstanding (Net of Margin) 14,49,732 14,64.547

(c) Legal Case pending with Doon Gfiati Special Area Development Authority 20,86,422 20,86.422

(d) Outstanding Demand under Appeal before Income Tax Authorities. 26.00.890 33,25,732



(3) Necessary disclosures under Micro, Small and Medium Enterprises Development Act, 2006. can only be considered once the relevant information to identify the suppliers who are covered under the said Act are received from such parties.

(4) Following disclosures are made, as per Accounting Standard-18 (As-t8), regarding, "Related Party Disclosures" issued by The Institute of Chartered Accountants of India:

(A) List of Related Parties

i) Enterpnse for which Reporting Enterpnse is an Associate: UFlex Limited.

ii) Individual owning indirect interest in voting power of the Company: Shri Ashok Chaturvedi (Chairman)

iii) Key Management Personnel:

i) Shri Prabir Ghatak (Chief Executive Officer)

ii) Shri Madan Mohan Varshney ("Manager" under The Companies Act 1956).

iv) Enterprises in which person referred in clause A (ii) along with their relatives exercise significant influence:

a) Ultimate Flexipack Ltd.

b) Club One Airways Pvt, Ltd

c) Flex Industries Pvt. Ltd,

d) AC Infratech Pvt. Ltd.

e) RC Properties Pvt. Ltd.

f) AtoZ Infratech Pvt. Ltd.

g) Ultimate Infratech Pvt. Ltd.

h) Ffex International Pvt. Ltd.

i) Anshika Investments Pvt. Ltd,

j) Anant Overseas Pvt. Ltd.

k) A.R. Leasing Private Ltd.

I) Apoorva Extrusion Pvl. Ltd.

m) Anshika Consultants Pvt. Ltd.

n) Ultimate Enterprises Pvt. Ltd.

o) Kaya Kalpa Medical Services Pvt, Ltd.

p) A.R. Infrastructure & Projects Pvt. Ltd.

q) ARAerotech Pvt. Ltd.

r) AC Infrastructures Pvt. Ltd

s) AKC Developers Lid,

t) Cinftex Infotecti Pvt. Ltd.

u) UTech Developers Ltd.

v) UTech Retailers Lid.

Note: Figures in brackets represent previous years amount,

(5) Gratuity

The employees Group Gratuity Schema is managed by Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

(6) Balances of some of the parties are subject to reconciliation and /or confirmations,

(7) Additional information pursuant to the provisions of Part-ll of Schedule VI of the Companies Act, 1956 to the extent applicable -

Note: Previous yea* figures have been given in brackets.

*As certified by the Management but not verified by the Auditors being a technical matter,

(b) Information in respect of production, sales, opening & closing stocks of goods produced.

Note : Above figures are net of goods manufactured for captive use and rejections.

(8) Figures have been rounded off to the nearest rupee.

(9) Previous year figures have been regrouped / recasted wherever considered necessary.

(10) There is no separate reportable segment as required under Accounting Standard -17 issued by The Institute of Chartered Accountants of India.

Notes . Signatories to Schedule 1 to 21

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