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Notes to Accounts of Hatsun Agro Products Ltd.

Mar 31, 2023

1) Includes ''0.33 relating to 1,30,000 shares included in share capital of fully paid up shares and which were forfeited.

2) . And ''0.05 relating to 6,334 forfeited shares which were included in partly paid up shares.

13.2 Rights attached to Equity Shares

The Company has only one class of equity shares having par value of Re.1 per share (March 31, 2022 - Re.1/-). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

During the year ended March 31, 2023, the amount of per share dividend recognised as distributions to equity shareholders was ''6.00 /- (March 31, 2022: ''6.00). Also Refer Note 34

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

13.5 There are no shares reserved for issue under any options.

13.6 Pursuant to the approval of the Board of Directors of the Company at its Meeting held on September 19, 2022 approving the Issue of Equity Shares under Rights Issue for an amount not exceeding ''40,000.00 the Rights Issue Committee of the Board, approved the Issue of 71,85,444 Equity Shares of the Company for an amount aggregating to ''30,107.02 at its Meeting held on December 03, 2022. Based on the number of valid applications, the Rights Issue Committee, at its Meeting held on January 14, 2023 approved the basis of allotment and allotted 71,84,945 Rights Equity Shares to the eligible Shareholders out of the total issued Rights Shares aggregating to 71,85,444. The balance of 499 Rights Equity Shares are kept in abeyance as the determination of the ownership of these equity shares are under Court proceedings.

Secured cash credit facility is secured by a first charge on all the current assets and pari-passu first charge over selected fixed assets by the Company. Further, this facility has been personally guaranteed by the Chairman.

Unsecured/Secured cash credit carries an interest ranging from 7.25% to 9.25% (March 31, 2022 - 7.20% to 8.50%).

Secured short term loans are secured by charge on plant and equipment, land and building, inventories, trade receivable and other current assets of the Company. Further, these facilities have been personally guaranteed by the Chairman and the Managing Director. Interest rate on secured short term loans range from 4.35% to 7.68% (March 31, 2022 - 4.05% to 7.40%) during the year.

Unsecured short term loans obtained from various bank carries an interest rate ranging from 4.00% to 8.50% (March 31,2022 - 3.83% to 9.60% ) during the current year.

The Company had not committed any default in the repayment of loan or payment of interest.

Note: 22.1 Disaggregated revenue information

Based on the management approach as defined in IND AS 108 - Operating Segments, the Chief Operating Decision Maker (CODM) evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by business segments. The Company had hitherto identified Milk and milk products as its reportable segment and others primarily consisted of Cattle Feed and Ready to Eat (RTE) product segments. Consequent to the discontinuance of RTE business during the quarter ended March 31, 2022, the CODM of the Company, effective April 01, 2022, has combined the feed business with Milk and milk products in the review of Company''s operations. Accordingly, the Company operates in single segment viz., Milk and milk products.

Note: 22.2 Trade Receivables and Contract Balances

A receivable is a right to consideration that is unconditional upon passage of time. The company sells goods on advance payment terms. In case of customers with certain nature of products where the credit is allowed, the same is disclosed in Note 9 - Trade Receivables.

Note 22.3 Transaction price allocated to the remaining performance obligation

Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining performance obligation related disclosures for contracts where the revenue recognised corresponds directly with the value to the customer of the entity''s performance completed to date, typically those contracts where invoicing is on time and material basis.

Note 22.4 Information about major customers

Company has no single customer from whom the revenue is not more than 10 % of the revenue from external customers of the Company.

Note: The tax rate used for the year ended March 31, 2023 and March 31, 2022 reconciliations above is the corporate tax rate of 25.17 % payable by corporate entities in India on book profits under Indian Income Tax Laws. Pursuant to Taxation Laws (Amendment) Ordinance, 2019 issued on September 20, 2019, corporate assesses have been given an option to apply a lower income tax rate with effect from April 1, 2019, subject to certain conditions specific therein. The Company had opted for the lower income tax rate in the previous year with effect from April 1, 2021 and impact of deferred tax has been considered accordingly.

Note:

1. During the year ended March 31,2022, the Company has received order demanding penalty u/s 271G of the Income tax Act 1961 for Rs.3,587.72 from the Income tax department on the grounds that the Company has failed to keep, maintain and furnish the information or documents as required by sub-section 3 of section 92D of the Income Tax Act, 1961 r.w sub-rules (1)(e), (g), (h) and (j) of Rule 10D of the Income Tax Rules 1962. Subsequent to the year ended March 31,2022, the Company has made an appeal to the CIT(Appeals) requesting absolute stay of demand.

Based on the professional advice obtained, the Company believes that they maintain adequate information/ documentation which can be furnished and hence have a good case and the chances of favorable outcome is high. Further, during the year the Company has paid Rs.179.38 as payment and the Principal Commissioner of Income tax has given six months stay of demand.

2. During the year the Company has received order from the GST Department in the state of Tamil Nadu with regard to classification and GST rates of certain products sold by the company for an amount of Rs.1,282.34 (including interest and penalty). Further the Company has also received the show cause notices on similar matter in certain other states. The Company has filed an appeal with Commissioner (Appeals) against the order received. The Company has paid an amount of Rs.706.79. The Company based on professional advise contends that the amount has been paid out of abundant caution and without prejudice to the Company''s position that the products were hitherto appropriately classified and should therefore be subject to lower rates of tax.

3. The Company has received a notice us 143(1a) on September 22, 2022 from Income Tax Department for the AY 21-22 seeking a demand of Rs.641.35 on wrong assumption of ICDS calculation, TDS credit mismatch and interest calculation us 234A, B and C. The company has submitted for a rectification petition with the department on October 13, 2022 which is pending further action from the department. Based on the professional advice obtained, the Company believes that they maintain adequate information/documentation which can be furnished and hence have a good case and the chances of favorable outcome is high.

4. (i) The Company received a for demand for Rs.5,101.97 on the grounds that the Company has availed and utilised ineligible ITC for FY 2021-22 which has been blocked under the provisions of TNGST Act 2017. The Company strongly contends the demand and based on the professional advice, the Company believes that the Company has good case and the chance of favorable outcome is high. The Company is in the process of filing the writ in the Honorable High Court of Madras.

(ii) The Company has received notices during the year from Customs department for differential duty on import of Ice cream machinery for Rs.1,238.34. The Company has filed an appeal with Honorable High Court of Madras and obtained interim stay order. Based on the professional advice, the Company maintain adequate information/documentation which can be furnished and hence have a good case and the chances of favorable outcome is high.

36. Employee benefits

(a) Gratuity benefits provided by the Company

In accordance with applicable Indian laws, the Company has a defined benefit plan which provides for gratuity payments (the "Gratuity Plan") and covers certain categories of employees in India. The Gratuity Plan provides a lump sum gratuity payment to eligible employees at retirement or termination of their employment. The amount of the payment is based on the respective employee''s last drawn salary and the years of employment with the Company. Liabilities in respect of the Gratuity Plan are determined by an actuarial valuation, based upon which the Company makes contributions to the Gratuity Fund maintained with Life Insurance Corporation of India (LIC).

These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. When there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit. Currently, for these plans, investments are made in government securities, debt instruments, short term debt instruments, equity instruments and Asset Backed, Trust Structured securities as per notification of Ministry of Finance.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s investments.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

(b) Provident Fund benefits

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards provident fund, which is defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue. The amount recognised as an expense towards contribution to provident fund for the year aggregated to Rs.1,108.05 (March 31, 2022: Rs.1,080.50) and is included in "contribution to provident and other funds".

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Employee State Insurance, which is defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue. The amount recognised as an expense towards contribution to Employee state Insurance for the year aggregated to Rs.186.32 (March 31,2022: Rs.193.13) and is included in "Staff Welfare Expenses".

b) Foreign currency sensitivity:

The Company is mainly exposed to fluctuations in US Dollar and EURO. The following table details the Company''s sensitivity to a 5% increase and decrease against the US Dollar and EURO. 5% is the sensitivity used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only net outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by 5% against the US Dollar, EURO. For a 5% weakening against the US Dollar,EURO,there would be a comparable impact on the profit or equity.

40. SEGMENT INFORMATION

1. Products from which reportable segments derive their revenues

The management assessed that trade receivables, cash and cash equivalents, borrowings, trade payables and other liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

42. Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

43. Financial risk management objective and policiesThe Company''sprincipal financial liabilities, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance its operation. The Company''s principal financial assets include trade and other receivables, cash and cash equivalents and bank balances that are derived directly from its operation. The Company also holds FVTOCI investments and enters into derivative transactions.

The Company''s activities are expose to a variety of financial risks, like credit risk, market risk and liquidity risk. The Company''s primary risk management focus is to minimise potential adverse effects of market risk on its financial performance. The Company''s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Board of Directors and the Audit Committee is responsible for overseeing the Company''s risk assessment and management policies and processes.

a. Credit riskCredit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses of "both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, derivative financial instruments, cash and cash equivalents, bank deposits and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk.

Trade and other receivablesThe Company sells goods on advance payment terms. In cases of customers with certain nature of products where credit is allowed, the average credit period on such sale of goods ranges from 1 day to 45 days depending on the nature of the product. The customer credit risk is managed by the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on the individual credit limits are defined in accordance with this assessment and outstanding customer receivables are regularly monitored. The Company''s receivables turnover is quick and historically, there was no significant defaults on account of those customer in the past.

Ind AS requires an entity to recognise in profit or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised in accordance with Ind AS 109. The Company assesses at each date of statements of financial position whether a financial asset or a group of financial assets is impaired. Expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. Currently the Company has not provided any provision in the books as per Ind AS 109 due to the fact that there are no historical credit losses observed in the past.

Exposure to credit risk:The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk is INR. 780.15 and 777.81 as of March 31, 2023 and March 31, 2022 being the total of the carrying amount of balances with trade receivables.

b. Liquidity riskLiquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company has established an appropriate liquidity risk management framework for it''s short term, medium term and long term funding requirement.

The following tables detail the Company''s remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

c. Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes.

i) Foreign Currency risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company, as per its risk management policy, uses derivative instruments primarily to hedge foreign exchange wherever applicable. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in line with its risk management policies.

44. Capital management

The Company manages its capital to ensure that it is able to continue as a going concern while maximising the return to the stakeholders through the optimisation of the debt and equity balance. The Company determines the amount of capital required on the basis of an annual budgeting exercise, future capital projects outlay etc. The funding requirements are met through equity, internal accruals and borrowings (short term/long term).

1. Represents contribution to HAP Sports trust to support promotion of Sports.

47. Other Statutory Information

(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company reviewed the status of all its customers and vendors Company, as at March 31, 2023 and March 31, 2022, in MCA portal, and observed that the Company does not have any transaction or outstanding with struckoff Companies under Section 248 of Companies Act, 2013 or Section 560 of Companies Act,1956.

(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the

statutory period.

(iv) The Company has not been declared wilful defaulter by any bank or financial institution or other lender.

v) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(vi) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with any oral or written understanding that the Intermediary shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(vii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with any oral or written understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(viii) The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(ix) During the Financial year, the Company has not revalued any of its Property, Plant and Equipment, Right of Use Asset and Intangible Assets

(x) The Company does not have any investment properties as at March 31,2023 and March 31,2022 as defined in

Ind AS 40.

(xi) The Company has not granted any loans or advance in the nature of loans to promoters, directors, Key Managerial Personnel and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person.

48. In connection with the preparation of the financial statements for the year ended March 31, 2023, the Board of Directors have confirmed the propriety of the contracts/agreements entered into by/on behalf of the Company and the resultant revenue earned/expenses incurred arising out of the same after reviewing the levels of authorisation and the available documentary evidences and the overall control environment. Further, the Board of Directors have also reviewed the realisable value of all the current assets of the Company and have confirmed that the value of such assets in the ordinary course of business will not be less than the value at which these are recognised in the financial statements. In addition, the Board has also confirmed the carrying value of the non-current assets in the financial statements. The Board, duly taking into account all the relevant disclosures made, has approved these financial statements in its meeting held on May, 09 2023 in accordance with the provisions of Companies Act, 2013.

49. Previous year''s figures have been regrouped/reclassified wherever applicable to facilitate comparability.

Mar 31, 2022

No trade or other receivables are due from directors or other officers of the Company either severally or jointly with any other person, nor from firms or private companies respectively in which any director is a partner, a director or a member. Trade receivables are non-interest bearing.

The Company sells goods on advance payment terms. In cases of customers with certain nature of products where credit is allowed, the average credit period on such sale of goods ranges from 1 day to 45 days depending on the nature of the product. The Company''s receivables turnover is quick and historically, there was no significant defaults on account of those customer in the past.

13.2 Rights attached to Equity Shares

The Company has only one class of equity shares having par value of Re.1 per share ( March 31, 2021 - Re.1/-). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

During the year ended March 31, 2022, the amount of per share dividend recognised as distributions to equity shareholders was Rs 6.00 /-(March 31, 2021: Rs.8.00/-and Rs 6.40/- for partly paid up shares ). Also Refer Note 34

Unsecured/Secured cash credit carries an interest ranging from 7.20% to 8.50% (March 31, 2021 - 7.30% to 8.80%).

Secured short term loans are secured by charge on plant and machinery, land and building, inventories, receivable and other current assets of the Company. Further, these facilities have been personally guaranteed by the Chairman and the Managing Director. Interest rate on secured short term loans ranged from 4.05% to 7.40% (March 31, 2021 - 5.75% to 8.25%) during the year.

Unsecured short term loans obtained from various bank carries an interest rate ranging from 3.83% to 9.60% (March 31,2021 -5.80% to 8.20% ) during the current year

The Company had not committed any default in the repayment of loan or payment of interest.

Note: 22.1 Disaggregated revenue information

Based on the management approach as defined in IND AS 108 â Operating Segments, the Chief Operating Decision Maker (CODM) evaluates the Companyâs performance and allocates resources based on an analysis of various performance indicators by business segments. Accordingly, the Company has identified Milk & Milk products as its reportable segment. Others primarily comprises Cattle feed . Ready to eat products (RTE) are shown in discontinued operations . Refer Note 40

Note: 22.2 Trade Receivables and Contract Balances

Note 22.3 Transaction price allocated to the remaining performance obligation

Applying the practical expedient as given in IND AS 115, the Company has not disclosed the remaining performance obligation related disclosures for contracts where the revenue recognised corresponds directly with the value to the customer of the entityâs performance completed to date, typically those contracts where invoicing is on time and material basis.

Note 22.4 Information about major customers

Company has no single customer from whom the revenue is not less than 10 % of the revenue from external customers of the company

32. Discontinued Operations

At the Board Meeting held on February 18,2022, the Directors decided to discontinue the Ready to Eat (RTE) Business carried on under the brand name Oyalo and to sell the assets to a prospective buyer. On identification of the buyer, the Board at its Meeting held on March 9, 2022 approved the Sale of Assets of RTE business by entering into an agreement for Sale with the identified buyer. The Company has received an advance of Rs.500 Lakhs as at 31st March 2022 and subsequently received Rs. 1,871 Lakhs based on the assets that are expected to be taken over. Accordingly these assets totalling to Rs. 2,371 Lakhs are classified as held for sale and the sales expected to be completed by June 30, 2022.

Note: The tax rate used for the year ended March 31, 2022 and March 31, 2021 reconciliations above is the corporate tax rate of 25.17% and 34.94% respectively payable by corporate entities in India on book profits under Indian Income Tax Laws.

Pursuant to Taxation Laws (Amendment) Ordinance, 2019 issued on 20 September 2019, corporate assessee have been given an option to apply a lower income tax rate with effect from 1st April, 2019, subject to certain conditions specific therein. The Company has opted for the lower income tax rate in the current year with effect from 1st April 2021 and impact of deferred tax has been considered accordingly.

1. During the quarter and year ended 31 March 2022, the Company has received order demanding penalty u/s 271G of the Income tax Act 1961 for ''3,587.72 Lakh from the Income tax department on the grounds that the Company has failed to keep, maintain and furnish the information or documents as required by sub-section 3 of section 92D of the Income Tax Act, 1961 r.w sub-rules (1)(e), (g), (h) and (j) of Rule 10D of the Income Tax Rules 1962. Subsequent to the year ended 31 March 2022, the Company has made an appeal to the CIT(Appeals) requesting absolute stay of demand.

2. The Company has been issued show cause notices (SCN) and summons with regard to the classification and Goods and Services tax (GST) rates of certain products sold by the Company. During the year ended 31 March 2022, the Company paid ''706.79 Lakh to GST authorities against possible liability on account ofthe above SCN. The Company based on professional advice contends that the amount has been paid out of abundant caution and without prejudice to the Companyâs position that the products were hitherto appropriately classified and should therefore be subject to lower rates of tax

36. Employee Benefits

(a) Gratuity benefits provided by the Company

In accordance with applicable Indian laws, the Company has a defined benefit plan which provides for gratuity payments (the âGratuity Planâ) and covers certain categories of employees in India. The Gratuity Plan provides a lump sum gratuity payment to eligible employees at retirement or termination of their employment. The amount of the payment is based on the respective employeeâs last drawn salary and the years of employment with the Company. Liabilities in respect of the Gratuity Plan are determined by an actuarial valuation, based upon which the Company makes contributions to the Gratuity Fund maintained with Life Insurance Corporation of India (LIC).

These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. When there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit. Currently, for these plans, investments are made in government securities, debt instruments, Short term debt instruments, Equity instruments and Asset Backed, Trust Structured securities as per notification of Ministry of Finance.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the planâs investments.

(b) Provident fund benefits

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards provident fund, which is defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue. The amount recognised as an expense towards contribution to provident fund for the year aggregated to Rs. 1,080.50 (March 31, 2021: Rs. 933.72) and is included in âcontribution to provident and other fundsâ.

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Employee State Insurance, which is defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue. The amount recognised as an expense towards contribution to Employee state Insurance for the year aggregated to Rs. 193.13 (March 31,2021: Rs. 158.17 ) and is included in âStaffWelfare Expensesâ.

1. The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key management personnel.

2. Actuarial valuation based provision with respect to gratuity have not been included as these are computed for the company as a whole.

39. Hedging Activities And Derivatives

The Company uses foreign currency denominated borrowings and interest rate swap contracts to manage some of its transaction exposures. The interest rate swap contracts are designated as cash flow hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions.

b) Foreign currency sensitivity:

The Company is mainly exposed to fluctuations in US Dollar and EURO The following table details the Companyâs sensitivity to a 5% increase and decrease against the US Dollar. 5% is the sensitivity used when reporting foreign currency risk internally to key management personnel and represents managementâs assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only net outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by 5% against the US Dollar, EURO. For a 5% weakening against the US Dollar, EURO, there would be a comparable impact on the profit or equity.

40. SEGMENT INFORMATION

l.Products from which reportable segments derive their revenues

Based on the management approach as defined in IND AS 108 â Operating Segments, the Chief Operating Decision Maker (CODM) evaluates the Companyâs performance and allocates resources based on an analysis of various performance indicators by business segments. Accordingly, the Company has identified Milk & Milk products as its reportable segment. Others primarily comprised of Cattle feed. Ready to eat products (RTE) are shown in discontinued operations. Refer Note 32

Note:

Segment assets relating to Cattle Feed for Rs 16,876.52 Lakh and Ready to eat product segments for Rs 7,367.44 aggregating to Rs.24,243.96 Lakh, previously included under Milk & Milk Products has been correctly included under Others and discontinued operations for the comparable year ended March 31, 2021.

Geographical Segment

The Company''s secondary segment is the geographic distribution of activities. Revenue and receivables are specified by location of customers while the other geographic information is specified by location of the assets. The following table present revenue, expenditure and certain asset information regarding the company''s geographical segments:

42. Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table provides the fair value measurement hierarchy of the Company''s assets and liabilities.

43. Financial risk management objective and policies

The Companyâs principal financial liabilities, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance its operation. The Company''s principal financial assets include trade and other receivables, cash and cash equivalents and bank balances that are derived directly from its operation. The Company also holds FVTOCI investments and enters into derivative transactions.

The Companyâs activities are exposed to a variety of financial risks, like credit risk, market risk and liquidity risk. The Companyâs primary risk management focus is to minimise potential adverse effects of market risk on its financial performance. The Companyâs risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Companyâs activities. The Board of Directors and the Audit Committee is responsible for overseeing the Companyâs risk assessment and management policies and processes.

a. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, derivative financial instruments, cash and cash equivalents, bank deposits and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk.

Trade and other receivables

The Company sells goods on advance payment terms. In cases of customers with certain nature of products where credit is allowed, the average credit period on such sale of goods ranges from 1 day to 45 days depending on the nature of the product. The customer credit risk is managed by the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on the individual credit limits are defined in accordance with this assessment and outstanding customer receivables are regularly monitored. The Companyâ receivables turnover is quick and historically, there was no significant defaults on account of those customer in the past.

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forwardlooking information. Currently the Company has not provided any provision in the books as per Ind AS 109 due to the fact that there are no historical credit losses observed in the past.

Exposure to credit risk:

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk is INR. 777.81 Lakh and INR. 907.41 Lakh as of March 31, 2022 and March 31, 2021 being the total of the carrying amount of balances with trade receivables.

b. Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company has established an appropriate liquidity risk management framework for itâs short term, medium term and long term funding requirement.

c. Market risk

i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. In order to optimise the Companyâs position with regards to interest income and interest expenses and to manage the interest rate risk, management performs a comprehensive corporate interest risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

ii) Foreign Currency Risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company, as per its risk management policy, uses derivative instruments primarily to hedge foreign exchange. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in line with its risk management policies.

44. Capital management

47. Estimation uncertainty during COVID-19 outbreak

The Company has considered internal and certain external sources of information including credit reports, economic forecasts and industry reports up to the date of approval of the financial statements in determining the impact on various elements of its financial statements. The Company has used the principles of prudence in applying judgments, estimates and assumptions including sensitivity analysis and based on the current estimates, the Company expects to fully recover the carrying amount of Trade receivables, Inventories, Other financial assets, Other current assets. The eventual outcome of impact of the global health pandemic may be different from those estimated as on the date of approval of these financial statements.

Mar 31, 2021

13.2 Rights attached to Equity Shares

The Company has only one class of equity shares having par value of Re.1 per share ( March 31, 2020 - Re.1/-). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

During the year ended March 31, 2021, the amount of per share dividend recognised as distributions to equity shareholders was Rs 8.00 /-and Rs 6.40/- for partly paid up shares (March 31, 2020: ^6.00/-and Rs 4.80/- for partly paid up shares ). Also Refer Note 33

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

13.5 There are no shares reserved for issue under any options.

13.6.The Company received the Rights Call Money on 1064 partly paid up Rights Equity Shares during the quarter ended December 2020 and the same were converted in to fully paid up Equity Shares. The total number of partly paid up Rights Equity Shares converted in to fully paid up Equity Shares (out of the Rights Issue of 9510519 Equity Shares - partly paid up - made in the year 2018) was 9504185 shares. Thus, the balance number of partly paid up Rights Equity Shares amounting to 6334 were forfeited by the Board at its Meeting held on 19.10.2020. All the fully paid up Rights Equity Shares have been listed on the Stock Exchanges. The Company has completed all the formalities as per the provisions of Articles of Association (AoA) and as required under the SEBI(LODR) regulation 2015 with respect to forfeiture of partly paid up Rights Equity Shares.

Unsecured/Secured cash credit carries an interest ranging from 7.30% to 8.80% (March 31, 2020 - 7.65 % to 10.25 % ).

Secured short term loans are secured by charge on plant and machinery, land and building, inventories, receivable and other current assets of the Company. Further, these facilities have been personally guaranteed by the Managing Director and Chairman. Interest rate on secured short term loans ranged from 5.75 % to 8.25 % (March 31, 2020 - 7.80 % to 8.80 %) during the year.

Unsecured short term loans included commercial paper obtained from various banks carried an interest rate ranging from 5.80 % to 8.20 % (March 31, 2020 - 7.10 % to 10.10 % ) during the current year.

The Company had not committed any default in the repayment of loan or payment of interest.

Note: 22.1 Disaggregated revenue information

Note 22.3 Transaction price allocated to the remaining performance obligation

Note 22.4 Information about major customers

Company has no single customer from whom the revenue is not less than 10 % of the revenue from external customers of the company.

Note: The tax rate used for the year ended March 31, 2021 and March 31, 2020 reconciliations above is the corporate tax rate of 34.944 % and 34.944 % respectively payable by corporate entities in India on book profits under Indian Income Tax Laws.

(c) During the year ended March 31, 2021, the Company has paid dividend to its shareholders. This has resulted in payment of dividend distribution tax (DDT) to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of the shareholders. Hence, DDT paid is charged to equity.From financial year 2020-21 DDT has been removed and hence no DDT charge

35. EMPLOYEE BENEFITS

(a) Gratuity benefits provided by the Company

These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. When there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit. Currently, for these plans, investments are made in government securities, debt instruments, Short term debt instruments, Equity instruments and Asset Backed, Trust Structured securities as per notification of Ministry of Finance.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s investments.

(b) Provident fund benefits

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards provident fund, which is defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue. The amount recognised as an expense towards contribution to provident fund for the year aggregated to INR. 933.72 (March 31, 2020: INR. 866.46) and is included in "contribution to provident and other funds".

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Employee State Insurance, which is defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue. The amount recognised as an expense towards contribution to Employee State Insurance for the year aggregated to INR. 158.17 (March 31,2020: INR. 150.31 ) and is included in "Staff Welfare Expenses".

b) Foreign currency sensitivity:

The Company is mainly exposed to fluctuations in US Dollar and EURO The following table details the Company''s sensitivity to a 5 % increase and decrease against the US Dollar. 5 % is the sensitivity used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only net outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5 % change in foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by 5 % against the US Dollar, EURO. For a 5 % weakening against the US Dollar, EURO, there would be a comparable impact on the profit or equity.

39. SEGMENT INFORMATION1. Products from which reportable segments derive their revenues

41. Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

42. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

The Company''s principal financial liabilities, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance its operation. The Company''s principal financial assets include trade and other receivables, cash and cash equivalents and bank balances that are derived directly from its operation. The Company also holds FVTOCI investments and enters into derivative transactions.

The Company''s activities are exposed to a variety of financial risks, like credit risk, market risk and liquidity risk. The Company''s primary risk management focus is to minimise potential adverse effects of market risk on its financial performance. The Company''s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Board of Directors and the Audit Committee is responsible for overseeing the Company''s risk assessment and management policies and processes.

a. Credit risk

Trade and other receivables

The Company sells goods on advance payment terms. In cases of customers with certain nature of products where credit is allowed, the average credit period on such sale of goods ranges from 1 day to 45 days depending on the nature of the product. The customer credit risk is managed by the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on the individual credit limits are defined in accordance with this assessment and outstanding customer receivables are regularly monitored. The Company'' receivables turnover is

quick and historically, there was no significant defaults on account of those customer in the past.

Exposure to credit risk:

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk is INR. 907.41 Lakhs and 1,246.89 Lakhs as of March 31, 2021 and March 31, 2020 being the total of the carrying amount of balances with trade receivables.

b. Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company has established an appropriate liquidity risk management framework for it''s short term, medium term and long term funding requirement.

c. Market risk

i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. In order to optimise the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, management performs a comprehensive corporate interest risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

ii) Foreign Currency Risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company, as per its risk management policy, uses derivative instruments primarily to hedge foreign exchange. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in line with its risk management policies.

43. Capital management

45. Estimation uncertainty during COVID-19 outbreak

Mar 31, 2018

1.1 CORPORATE INFORMATION

Hatsun Agro Product Limited (the Company or HAPL) is principally engaged in the business of processing and marketing of milk, milk products and ice cream. The Company is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on National Stock Exchange of India Limited (NSE) and BSE Limited. The registered office of the Company is located at Karapakkam, Chennai. The Company has plants across various locations in India.

1.2 APPLICATION OF NEW AND REVISED IND AS

All the Indian Accounting Standards issued and notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) read with Section 133 of the Companies Act, 2013 till the financial statements are authorised have been considered in preparing these financial statements. There are no other Indian Accounting Standards that has been issued as of date but was not mandatorily effective.

1.2.1 RECENT STANDARDS NOTIFIED BUT NOT EFFECTIVE: Ind AS 115 - âRevenue from Contracts with Customersâ:

On 28 March 2018, the Ministry of Corporate Affairs (MCA), notified Ind AS 115, Revenue from Contracts with Customers, as part of the Companies (Indian Accounting Standards) Amendment Rules, 2018. The new standard is based on IFRS 15, Revenue from Contracts with Customers. The standard is effective for the accounting periods commencing on or after 1 April 2018.

Ind AS 115 replaces Ind AS 11 Construction contracts and Ind AS 18 Revenue. The core principle of Ind AS 115 is that an entity recognises revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This core principle is delivered in a five-step model framework:

- Identify the contract(s) with a customer - assess whether the contract is within the scope of Ind AS 115. âCustomerâ has now been defined.

- Identify the performance obligations in the contract - determine whether the goods and services in a contract are distinct.

- Determine the transaction price - transaction price will include fixed, variable and non cash considerations.

- Allocate the transaction price to the performance obligations in the contract - allocation based on a stand-alone selling price basis using acceptable methods.

- Recognise revenue when (or as) the entity satisfies a performance obligation - i.e. recognise revenue at a point in time or over a period of time based on performance obligations.

The Company is currently evaluating the requirements of the standards, and the transition effects on the financial statements.

1.2.2 Standards yet to be notified: Ind AS 116 - âLeasesâ:

On 18 July 2017, the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI) issued an Exposure Draft (ED) of Ind AS 116, Leases. Ind AS 116 is largely converged with IFRS 16. When notified, Ind AS 116 will replace Ind AS 17 Leases.

Ind AS 116 sets out a comprehensive model for identification of lease arrangements and their treatment in the financial statements of the lessor and lessee. Ind AS 116 applies a control model for the identification of leases, distinguishing between leases and service contracts on the basis of whether there is an identified asset controlled by the customer. The Company is evaluating the requirement of the standard and the effect on the financial statements upon notification.

2. BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS

2.1 Statement of Compliance

On 16 February 2015, the Ministry of Corporate Affairs notified the Companies (Indian Accounting Standards) Rules, 2015. The Rules specify the Indian Accounting Standards (Ind AS) to certain class of companies and sets out the date of applicability. Hatsun Agro Product Limited, being a listed Company with net worth of less than Rs. 500 Crores, for whom Ind AS is applicable in Phase II as defined in the said notification, is required to apply the standards as specified in the Companies (Indian Accounting Standards) Rules, 2015.

As stated above, the Company has adopted Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from 1 April 2016. Upto the year ended 31 March 2017, the Company prepared its financial statements in accordance with the requirements of previous GAAP, which includes standards notified under the Companies (Accounting Standards) Rules, 2006. These are the Companyâs first Ind AS financial statements. The date of transition to Ind AS is 1 April 2016. Previous year figures in the financial statements have been restated to Ind AS. In accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards, the Company has presented a reconciliation from the presentation of financial statements under Accounting Standards notified under Companies (Accounting Standards) Rules, Rules, 2006 (âprevious GAAPâ) to Ind AS Shareholderâs equity as at 31 March 2017 and 1 April 2016 and of the Other Comprehensive Income for the year ended 31 March 2017. Refer Note 45 and 46.

2.2 Basis of preparation and presentation

The financial statements have been prepared on accrual basis under the historical cost convention except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on above basis, except for lease transactions that are within the scope of Ind AS 17 - Leases, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 - Inventories or value in use in Ind AS 36 - Impairment of Assets

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

- Level 3 inputs are unobservable inputs for the asset or liability

2.3 Critical Accounting judgements and Key sources of Estimation Uncertainty

Inherent in the application of many of the accounting policies used in preparing the Financial statements is the need for Management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual outcomes could differ from the estimates and assumptions used.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods are affected.

In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial information are included in the following notes:

(i) Useful lives of property, plant and equipment (Refer Note f )

(ii) Assets and obligations relating to employee benefits (Refer Note m)

(iii) Valuation and measurement of income taxes and deferred taxes (Refer Note e )

(iv) Provisions for disputed tax liabilities (Refer Note t )

Determination of functional currency:

Currency of the primary economic environment in which the Company operates (âthe functional currencyâ) is Indian Rupee (INR) in which the company primarily generates and expends cash. Accordingly, the Management has assessed its functional currency to be Indian Rupee (INR).

The cost of inventories recognised as an expense during the year in respect of continuing operation was INR. 308,374.85 (for the year ended March 31, 2017: INR. 304,897.99)

The cost of inventories recognised as an expense includes INR. 61.16 (during 2016-17: INR. NIL) in respect of write downs of inventory to net realisable value, and has been increased by INR. NIL (during 2016-17: INR. 2252.00) in respect of reversal of such write-downs.

No trade or other receivables are due from directors or other officers of the Company either severally or jointly with any other person nor from firms or private companies respectively in which any director is a partner, a director or a member. Trade receivables are non-interest bearing.

The Company sells goods on advance payment terms. In cases of customers with certain nature of products where credit is allowed, the average credit period on such sale of goods ranges from 1 day to 45 days depending on the nature of the product. The Companyâ receivables turnover is quick and historically, there was no significant defaults on account of those customers in the past.

3.1 Rights attached to Equity Shares

The Company has only one class of equity shares having par value of Re.1 per share ( March 31, 2017 - Re.1/-). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

During the year ended March 31, 2018, the amount of per share dividend recognized as distributions to equity shareholders was Re 1.00 /-(March 31, 2017: Rs.1.00/- and April 01, 2016: INR. 4.00/-). Also Refer Note 34

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

3.2 There are no shares reserved for issue under any options.

Unsecured/Secured cash credit carries an interest ranging from 7.80% to 10.40% (March 31, 2017 - 9.52% to 10.60% and April 01, 2016 - 10.60%).

Secured short term loans are secured by charge on plant and machinery, land and building, inventories, receivable and other current assets of the Company. Further, these facilities have been personally guaranteed by the Managing Director. Interest rate on secured short term loans ranged from 7.10% to 8.35% (March 31, 2017 - 8.00% to 9.50% and April 01, 2016 - 9.00% to 10.00%) during the year.

Unsecured short term loans included commercial paper obtained from various banks carried an interest rate ranging from 7.25% to 7.40% (March 31, 2017 - 7.25% to 9.35% and April 01, 2016 - 8.25% to 10.05%) during the current year.

There have been no overdue amounts payable to Micro and Small Enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 based on information available with the Company? Further, the Company? has not paid any? interest to any? Micro and Small Enterprises during the year ended March 31, 2017 and March 31, 2016.

Note: The tax rate used for the year ended March 31, 2018 and March 31, 2017 reconciliations above is the corporate tax rate of21.342% payable by corporate entities in India on book profits under Indian Income Tax Laws.

(c) During the year ended March 31, 2017, the Company has paid dividend to its shareholders. This has resulted in payment of dividend distribution tax (DDT) to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of the shareholders. Hence, DDT paid is charged to equity.

Proposed dividend on equity shares are subject to approval at the annual general meeting and are not recognised as a liability (including DDT thereon) as at 31 March 2018 and 31 March 2017.

4. EMPLOYEE BENEFITS

(a) Gratuity benefits provided by the Company

These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. When there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit. Currently, for these plans, investments are made in government securities, debt instruments, Short term debt instruments, Equity instruments and Asset Backed, Trust Structured securities as per notification of Ministry of Finance.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the planâs investments.

(b) Provident fund benefits

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards provident fund, which is defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue. The amount recognised as an expense towards contribution to provident fund for the year aggregated to INR. 800.22 (March 31, 2017: INR. 681.79) and is included in âcontribution to provident and other fundsâ.

(c) Employee State Insurance benefits

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Employee State Insurance, which is defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue. The amount recognised as an expense towards contribution to Employee State Insurance for the year aggregated to INR. 195.50 (March 31,2017: INR. 126.66) and is included in âStaff Welfare Expensesâ.

5. LEASES

(i) Operating lease commitments â Company as lessee

The Company has entered into operating leases for operating its corporate office. These leases have a non-cancellable period of 5 years with an option to renew the contract for a further period of 5 years. There are no restrictions placed upon the Company by entering into these leases. The lease payment are escalated to 10% once in 2 years, over the life of the lease. The Company has paid INR 197.93 Lakhs (31 March 2017: INR 190.43 Lakhs ) during the year towards minimum lease payment.

(iii) Operating lease commitments â Company as lessor

The Company has leased out freezers to distributors on operating lease arrangement. The lease term is generally for 5 to 10 years. The Company as well as the distributors have an option of terminating this lease arrangement any time during the tenure of the lease as per the provisions of the lease agreement. Lease income recognised from the above lease arrangement (included under Revenue from operations Note 23) - Rs. 171.73 Lakhs (PY- Rs. 236.83 Lakhs)

The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key management personnel. Actuarial valuation based provision with respect to gratuity have not been included as these are computed for the company as a whole.

6. HEDGING ACTIVITIES AND DERIVATIVES

The Company uses foreign currency denominated borrowings and interest rate swap contracts to manage some of its transaction exposures. The interest rate swap contracts arc designated as cash flow hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions.

a) The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are as under -

b) Foreign currency sensitivity:

The Company is mainly exposed to fluctuations in US Dollar, EURO and GBP. The following table details the Companyâs sensitivity to a 5% increase and decrease against the US Dollar. 5% is the sensitivity used when reporting foreign currency risk internally to key management personnel and represents managementâs assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only net outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by 5% against the US Dollar, EURO, GBP For a 5% weakening against the US Dollar, EURO, GBP there would be a comparable impact on the profit or equity.

NOTE 7. SEGMENT INFORMATION

1. Products from which reportable segments derive their revenues

Based on the management approach as defined in Ind AS 108 - Operating Segments, the Chief Operating Decision Maker (CODM) evaluates the Companyâs performance and allocates resources based on an analysis of various performance indicators by business segments. Accordingly, the Company has identified Milk & Mlk products as its reportable segment. Others primarily comprises Cattle feed and Ready to eat products segments.

2. Segment revenues and results

Geographical Segment

The companyâs secondary segment is the geographic distribution of activities. Revenue and receivables are specified by location of customers while the other geographic information is specified by location of the assets. The following table present revenue, expenditure and certain asset information regarding the companyâs geographical segments:

Information about major customers:

Company has no single customer from whom the revenue is not less than 10 % of the revenue from external customers of the company

8. Fair Value Hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table provides the fair value measurement hierarchy of the Companyâs assets and liabilities.

9. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

The Companyâs principal financial liabilities, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance its operation. The Companyâs principal financial assets include trade and other receivables, cash and cash equivalents and bank balances that are derived directly from its operation. The Company also holds FVTOCI investments and enters into derivative transactions.

a. Credit risk

Trade and other receivables

The Company sells goods on advance payment terms. In cases of customers with certain nature of products where credit is allowed, the average credit period on such sale of goods ranges from 1 day to 45 days depending on the nature of the product. The customer credit risk is managed by the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on the individual credit limits are defined in accordance with this assessment and outstanding customer receivables are regularly monitored. The Companyâ receivables turnover is quick and historically, there was no significant defaults on account of those customer in the past.

Exposure to credit risk:

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk is INR. 705.16 million, 4095.51 million and 1491.26 million as of March 31, 2018, March 31, 2017 and April 01, 2016 respectively, being the total of the carrying amount of balances with trade receivables.

b. Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company has established an appropriate liquidity risk management framework for its short term, medium term and long term funding requirement.

The following tables detail the Companyâs remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

The following table details the Companyâs expected maturity for its financial assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on financial assets is necessary in order to understand the Companyâs liquidity risk management as the liquidity is managed on a net asset and liability basis.

c. Market risk

i) Interest rate risk

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of borrowings affected, after the impact of hedge accounting. With all other variables held constant, the Companyâs profit before tax is affected through the impact on borrowings, as follows:

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.

ii) Foreign Currency Risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company, as per its risk management policy, uses derivative instruments primarily to hedge foreign exchange. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in line with its risk management policies.

10. CAPITAL MANAGEMENT

11. FIRST-TIME ADOPTION OF IND AS

These financial statements, for the year ended 31 March 2018, are the first time the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013.

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2018, together with the comparative period data as at and for the year ended 31 March 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs opening balance sheet was prepared as at 1 April 2016, the Companyâs date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2016 and the financial statements as at and for the year ended 31 March 2017.

Optional exemptions :

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

Deemed cost for property, plant and equipment and intangible assets

The Company has elected to continue with the carrying value of all of its plant and equipment and intangible assets recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

Business Combination:

In accordance with Ind AS 101, the Company has elected not to restate business combinations that occurred before the date of transition i.e. April 01, 2016. In view of the same, the Indian GAAP carrying amounts of assets and liabilities, that are required to be recognised under Ind AS, is their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is in accordance with respective Ind AS.

Mandatory exceptions :

a) Estimates

The estimates at 1 April 2016 and at 31 March 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

- Impairment of financial assets based on expected credit loss model

- FVTOCI - Unquoted equity shares

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1 April 2016, the date of transition to Ind AS and as of March 31, 2017 and March 31, 2018.

b) Classification and measurement of financial assets:

The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist at the date of transition to IND-AS.

c) Hedge accounting:

The Company uses derivative financial instruments such as forward currency contracts and interest rate swaps to hedge its foreign currency risks an interest rate risks respectively. Under previous GAAP, there is no mandatory standard that deals comprehensively with hedge accounting, which has resulted in the adoption of varying practices. All the hedges designated under IGAAP are of types which qualify for hedge accounting in accordance with Ind AS 109 also. Moreover, the Company, before the date of transition to Ind AS, has designated a transaction as hedge and also meets the conditions for hedge accounting in Ind AS 109. Consequently, the Company continues to apply hedge accounting after the date of transition to Ind AS.

Under Ind AS, interest free or below market rate of interest deposits need to be measured at fair value on initial recognition using the market rate of return. The difference between the principal amount (transaction value) and the fair value of the deposits needs to be treated as an prepaid rent and would be amortised on a straight line basis over the lease term. Correspondingly, interest income will be accreted on the initial fair value based on market rate of interest. Accordingly, the net impact is INR. (17.11) as on March 31, 2017.

Note 2 : Impact of EIR on loans

Under previous GAAP, transaction costs incurred towards origination of borrowings were amortised during the tenure of the loan. Under Ind AS these transaction costs are to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Accordingly, borrowings as at March 31, 2017 have been reduced by INR. 0.04 with a corresponding adjustment to retained earnings. The total equity increased by an equivalent amount. The profit for the year ended March 31, 2017 reduced by Rs. 0.04 as a result of the additional interest expense.

Note 3 : Reversal of goodwill amortisation

Under Ind AS, the goodwill arising on account of business combination has to be tested for impairment annually and therefore all the goodwill amortised after the transition date i.e. April 01, 2016 has to be added back to the profit & loss account, Accordingly the net impact of goodwill amortisation is INR. 273.00 as on March 31, 2017.

Note 4 : Employee benefit liabilities

Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to the statement of profit and loss. Under Ind AS, re-measurements (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability) are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus the employee benefit cost is reduced by INR. (51.13) and re-measurement gains/losses on defined benefit plans has been recognised in the OCI, net of tax. Due to change in the actuarial assumption under Ind AS, the net asset movement of the fund has increased by INR. 40.33 in March 31, 2017 and therefore retained earnings has been adjusted by INR. 40.33 due to this favourable movement.

Note 5 : Impact of Deferred taxes on Ind AS Adjustments

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity. Accordingly, the net impact on deferred tax is INR. (70.15) Lakhs as on March 31, 2017 and as on April 01, 2016 is of INR. 77.32 Lakhs.

Note 6 : Other comprehensive income

Under previous GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or profit or loss as per Ind AS. Further, previous GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

Note 7 : Statement of cash flows

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Note 8: Excise Duty

Under previous GAAP, revenue from sale of products was presented net of excise duty under revenue from operations. Whereas, under Ind AS, revenue from sale of products includes excise duty. The corresponding excise duty expense is presented separately on the face of the standalone statement of profit and loss. The effect of this is increase in revenue from operations by Rs. 782.36 Lakhs for the year ended March 31, 2017 but there is no impact on profit or loss for the year ended March 31, 2017.

12. RIGHTS ISSUE

The Board of Directors at its meeting held on December 6, 2017 considered and approved the raising of funds by way of issue of securities to the existing equity shareholders of the Company on a rights basis and Rights Issue Committee at its meeting held on February 21, 2018, approved the Draft Letter of Offer, with respect to the issue of partly paid-up Equity Shares to the existing equity shareholders of the Company, as on the record date, on a rights basis (âRights Issueâ) for an amount aggregating up to INR 550 Crores in accordance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended and all other applicable laws, subject to applicable statutory and regulatory approvals.

13. INCOME TAX RELATING TO EARLIER YEARS

During the year, Assistant Commissioner of Income Tax (ACIT) has issued Order dated 30 November 2017 giving effect to the Order of the Settlement Commission dated 14 November 2017 with respect to the Assessment Years 2008-09 to 2014-15. Based on the orders received, Rs. 207.54 Lakhs (net) has been paid towards full and final settlement of the tax dues and Rs. 205.36 Lakhs (net) has been provided as additional tax relating to prior periods.

14. PREVIOUS YEAR FIGURES

As stated in Note 2.1, the Company has adopted Indian Accounting Standards with effect from 1 April 2017 with date of transition to Ind AS being 1 April 2016. Accordingly, previous year figures in the financial statements have been restated to Ind AS. Further, previous yearâs figures have been regrouped/reclassified wherever necessary to correspond with the current yearâs classification/disclosure.

Mar 31, 2017

1. BASIS OF PREPARATION, PRESENTATION AND DISCLOSURE OF FINANCIAL STATEMENTS

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (the âIndian GAAPâ). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013 (âthe Actâ), read together with paragraph 7 of the Companies (Accounts) Rules 2014 and Companies (Accounting Standards) Amendment Rules, 2016. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

2. NET DIVIDEND REMITTED IN FOREIGN EXCHANGE

There are no dividend remittance in foreign currency during the year. (March 31, 2016 - Nil) .Dividends remitted to non-resident shareholders in INR in their bank accounts maintained in India arc considered.

3.1 As required by AS 20 â Earnings per share, weighted average number of equity shares used in calculating basic and diluted EPS for the year ended March 31,2016 includes 434,76,659 equity shares issued as bonus shares during the year ended March 31,2017.

4. GRATUITY

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy for employees.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the gratuity plan.

The fund is 100% administered by Life Insurance Corporation of India (âLICâ). The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the year over which the obligation is to be settled.

The estimates of future salary increases and rate of attrition considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

5. SEGMENT INFORMATION Primary segment

The Company has identified milk & milk products and renewable energy segments as reportable business segments. Milk & Milk products segments mainly deals with sale of milk, milk products and ice cream. Renewable energy segments mainly deals with generating and supply of wind power to the Milk & Milk products segment for its captive consumption.

6.DETAILS OF SPECIFIED BANK NOTES (SBN)

Summary of specified bank notes and other denomination notes held by the Company as on November 8, 2016 and December 30, 2016 and transacted during the period from November 8, 2016 to December 30, 2016 as required under the MCA notification G.S.R.308 (E) dated March 31, 2017 is given below.

7. PREVIOUS YEAR FIGURES

Previous year figures have been regrouped/reclassified, where necessary, to conform to this yearâs classification.

Mar 31, 2015

1. Basis of preparation, presentation and disclosure of financial statements

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013 (Âthe Act'), read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year except the change in accounting policy explained below

2. Terms/Rights attached to Equity shares

The Company has only one class of equity shares having par value of Re.1 per share(March 31, 2014 - Re.1/-). Each holder of equityshares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

During the year ended March 31, 2015, the amount of per share dividend recognised as distributions to equity shareholders was Rs. 1.80/-(March 31, 2014: Rs. 2.50/-).

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

(All amounts arc in lakhs of Indian Rupees unless otherwise stated)

3. Details of shareholders holding more than 5% shares in the Company

Particulars March 31, 2015 March 31, 2014

Nos. %Holding Nos. %Holding

Equity shares of Re. 1/- each (March 31, 2014 : Re. 1/- each) fully paid

Mr. Chandramogan 62,628,622 57.62 62,371,279 57.92 R G

Mr. Sathyan C 10,142,236 9.33 10,072,237 9.35

As per the records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

4.CONTINGENT LIABILITIES

Claims made against the Company not acknowledged as debts in respect of income tax matters

Income tax matters

a. In connection with the search proceeding under Income Tax Act, the Company has filed Income Tax returns for financial year 2007-08 to financial year 2012-13 in response to the notice under section 153A of Income Tax Act from Income Tax Department, returning the same income as was returned in the original return of the Company for the respective years. The proceedings are in progress. The Company is of the opinion that its tax positions will likely to be upheld and accordingly, no additional provision for tax expense is considered necessary in the financial statements.

b. The Company has a pending litigation at Honourable Madras High Court relating to an income tax demand aggregating Rs.150 lakhs relating to financial year 1995-96. The Company has made provision for the same in the previous year.

Operating Lease

The Company has entered into operating leases for operating its corporate office. These leases have a non cancellable period of five years with an option to renew the contracts for a further period of four years. There are no restrictions placed upon the Company by entering into these leases. The lease payments are escalated at the rate of 10% once in two year, over the life of the lease.

5. GRATUITY

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy for employees.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the gratuity plan.

Net employee benefit expense (recognised in Personnel Expenses)

The fund is 100% administered by Life Insurance Corporation of India ("LICÂ). The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the year over which the obligation is to be settled.

The estimates of future salary increases and rate of attrition considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

6. SEGMENT INFORMATION Primary segment

The Company's operations predominantly relate to manufacture and sale of milk, milk products and ice cream and this is the only primary reportable segment.

Geographical segment

The Company's secondary segment is the geographic distribution of activities. Revenue and receivables are specified by location of customers while the other geographic information is specified by location of the assets. The following tables present revenue, expenditure and certain asset information regarding the company's geographical segments:

7. During the previous year, the Company had acquired the dairy business from Jyothi Dairy Private Limited ("JDPL") having net asset value of Rs. 3,764.60 lakhs for a consideration of Rs.5,129.60 lakhs.

8. Expenditure on Corporate Social Responsibility (CSR)

For the year ended March 31, 2015 the Company has incurred expenditure of Rs. Nil as compared to expenditure required to be spent under section 135 of the Act of Rs. 113.61 lakhs resulting in a shortfall of Rs. 113.61 lakhs.

9. Previous year figures

Previous year figures have been regrouped/reclassified, where necessary, to conform to this year's classification.

Mar 31, 2013

1. Basis of preparation, presentation and disclosure of financial statements

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India {Indian GAAP).The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, {as amended) and the relevant provisions of the Companies Act, 1956. The accounting policies adopted In the preparation of financial statements are consistent with those of previous year.

2. Contingent Liabilities

Claims made against the Company not acknowledged as debts in respect of sates tax and income tax matters

Income tax matters (Refer note ft) below) 150.00 150.00

Sales tax matters - 452

The Company has imported certain items at concessional rates of customs duty under the Export Promotion Capital Goods Scheme (EPCG). As at the Balance Sheet date, total Export Obligations under the EPCG Scheme is USD 380-86 lakhs [Rs. 20,714.96} [(March 31, 2012; USD 375.91 lakhs (Rs, 19,230,41)] which is to be fulfilled over a period of eight years from the date of the licenses, As at March 31,2013, the Company has fulfilled Export Obligations amounting to USD 372,02 lakhs (Rs. 20,233,63) [(March 31,2012: USD 321.85 lakhs (Rs. T 6,464.79)]and has outstanding Export Obligation of USD 8,85 lakhs {Rs. 48118) [(March 31,2012: USD 54.05 lakhs (Rs. 2,765.62),

The Company''s duty liability, ft the same is not fuelled, will amount to Rs,70,59 (March 31,2012: Rs. 405.66).The Company is confident that it wiJI fulfill the obligation under the EPCG Scheme and accordingly no provision for liability has been recognized in the financial statements,

Note; (i) ; In respect of the Income tax assessment year 1996-1997, the Company''s claim for deduction towafds non-compete fees of Rs 400 was disallowed by the Income tax Assessing Officer. The Commissioner of Income tax (Appeals) ruled in favour of the Company. However, the Income tax Appellate Tribunal has upheld the disallowance of the aforesaid expenditure and the Company has filed an appeal in the High Court of Judicature, Madras, Management''s estimate of the tax impact of such disallowance is Rs.150 (including estimated interest but excluding penalties etc, if any). The Company has been advised by its legal counsel that it is possible, but not probable, the action will succeed and accordingly no provision for liability has been recognized in the financial statements,

3. EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equfty shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per sharer the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. Potential equity shares with anti-dilutive effects are not considered for calculating diluted earnings per share*

4 GRATUITY

The Company has a defined benefit gratuity plan, Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy for employees.

The following tables summarise the components of net benefit expense recognised in the profit and toss account and the funded status and amounts recognfsed in the balance sheet for the gratuity plan.

5.The Company has a centralized treasury function where all the term loans and other borrowings in addition to the cash generated from operations are pooled through common bank accounts to optimally use funds and reduce the interest cost to the Company. During the year, the Company has used funds raised on short term basis from banks and others to purchase certain fixed assets aggregating to Rs, 1,739.45 (March 31,2012 - Rs. 6,230.24). Most of the short term loans with interest advantage have been in the nature of being rolled over long term. As the Company generates better profits, the long term - short term mismatch wili come down substantially,

6. SEGMENT INFORMATION Primary segment

The Company''s operations predominantly relate to manufacture and sale of milk, milk products and ice cream and this rs the only primary reportable segment.The Company primarily operates only In one geographical segment, since income is predominantly derived from goods sold in India.

7. SUBSEQUENT EVENTS

On May 1,2013F there was a fire in the Company''s plant at Salem, Tamil NaduThere was no loss of Me or human injury,The management estimates a loss of Rs.500 due to loss of inventory and other assets which is fuKy recoverable from the insurer. There has been no significant disruption in the flow of distribution on account of the accident,

The above events have not been recognised as these do not represent a condition existing at the Balance Sheet date,

8. PREVIOUS YEAR FIGURES

Previous year figures have been regrouped/ reclassified, where necessary, to conform to this year''s classification.

Mar 31, 2012

A. Terms/ Rights attached to Equity shares

The Company has only one class of equity shares having par value of Re.1/- per share ( March 31, 2011 - Rs.2/-). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31 March 2012, the amount of per share dividend recognized as distributions to equity shareholders was Rs.1.30 (31 March 2011: Rs.1.10).

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

Secured short term loan has been availed from Yes Bank Limited and is secured by exclusive charge on unencumbered plant and machinery to the extent of Rs.2,000. The facility has been personally guaranteed by Managing Director. Further, shares aggregating to1.5 times of the loan amount has been pledged by the Managing Director.

Cash credit facility has been availed from State Bank of India and is secured by a first charge on all the current assets and pari-passu first charge with ICICI Bank Limited over existing fixed assets of the Company pertaining to Salem, Kanchipuram and Belgaum locations. Further, this facility has been personally guaranteed by Managing Director and his spouse.

Note : There are no overdue amounts payable to Micro and Small Enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 based on information available with the Company. Further, the Company has not paid any interest to any Micro and Small Enterprises during the year ended March 31, 2012 and March 31, 2011.

1. Other disclosures

a. Contingencies

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

Claims made against the Company not acknowledged as debts in respect of sales tax and income tax matters

- Income tax matters (Refer note (i) and (ii) below) 150.00 410.92

- Sales tax matters (Refer note (iii) below) 4.52 9.32

Export obligations:

The Company has imported certain items at concessional rates of customs duty under the Export Promotion Capital Goods Scheme (EPCG). As at the Balance Sheet date, total Export Obligations under the EPCG Scheme is USD 375.91 lakhs (March 31, 2011: USD 375.91 lakhs) which is to be fulfilled over a period of eight years from the date of the licenses. As at March 31, 2012, the Company has fulfilled Export Obligations amounting to USD 321.85 lakhs (March 31, 2011: USD 317.79 lakhs) and has outstanding Export Obligation of USD 54.06 lakhs (March 31, 2011: USD 58.12 lakhs).

The Company is confident that it will fulfill the obligation under the EPCG Scheme.

Note (i) : In respect of the Income tax assessment year 1996-1997, the Company's claim for deduction towards non-compete fees of Rs.400 was disallowed by the Income tax Assessing Officer. The Commissioner of Income tax (Appeals) ruled in favour of the Company. However, the Income tax Appellate Tribunal has upheld the disallowance of the aforesaid expenditure and the Company has filed an appeal in the High Court of Judicature, Madras. Management's estimate of the tax impact of such disallowance is Rs.150 (including estimated interest but excluding penalties etc, if any). Based on the expert advice, the management believes that the Company has strong case and hence, no provision and consequential adjustments, if any for such disputed amount have been considered in the financial statements.

Note (ii) : Contingent liabilities relating to income tax matters of previous year includes Rs.260.92 (includes Rs.50 paid under protest) relating to financial year 2007-08 due to disallowance of certain sales promotion expenses and interest expense. During the current year, the Company has obtained a favourable order relating to this dispute. Further, the Company had received income tax demand aggregating Rs.123.14 on same issues as described above, for the financial year 2008-09. Considering the favourable order obtained by the Company on these issues for financial year 2007-08, the Management believes that the tax exposure for the financial year 2008-09 to be remote.

Note (iii) : The Company had made an application under Samadhan Scheme and has paid an amount of Rs.4.80 (gross tax amount is Rs.9.32) towards the full settlement of the liability. The Company is yet to receive the orders from the Sales Tax department.

b. Segment Information Primary segment

The Company's operations predominantly relate to manufacture and sale of milk, milk products and ice cream and this is the only primary reportable segment. The Company primarily operates only in one geographical segment, since income is predominantly derived from goods sold in India.

The Company has closed its rural retail operations during the previous year. The same was disclosed as "others" segment during the previous year.

c. Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. Potential equity shares with anti-dilutive effects are not considered for calculating diluted earnings per share.

d. Employee Benefits

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with LIC in the form of a qualifying insurance policy.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

e. The Company has a centralized treasury function where all the term loans and other borrowings in addition to the cash generated from operations are pooled through common bank accounts to optimally use funds and reduce the interest cost to the Company. During the year, the Company has used funds raised on short term basis from banks and others to purchase certain fixed assets aggregating to Rs.6,230.24 (March 31, 2011 - Rs.7,280). During the year 2011-12, the Company has raised long term loan for Rs.7,900 from ICICI Bank to narrow down the short term and long term mismatch. Most of the short term loans with interest advantage have been in the nature of being rolled over long term. As the Company generates better profits, the long term - short term mismatch will come down substantially.

f. Till the year ended March 31, 2011, the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to current year's classification.

Mar 31, 2010

A. Capital commitments and contingencies

As at As at Particulars March 31, 2010 March 31, 2009

(i) Estimated amount of contracts remaining to be executed on capital account (net of capital advances) and not provided for 107,055 487,366

(ii) Claims made against the Company not acknowledged as debts in respect of sales tax and income tax matters 15,932 15,932

(iii) In respect of the Income tax assessment year 1996-97, the Companys claim for deduction towards non- compete fees of 40,000 was disallowed by the Income tax Assessing Officer. The Commissioner of Income tax (Appeals) ruled in favour of the Company. However, the Income tax Appellate Tribunal has upheld the disallowance of the aforesaid expenditure and the Company has filed an appeal in the High Court of Judicature, Madras. Managements estimate of the tax impact of such disallowance is 15,000 (including estimated interest but excluding penalties etc, if any). Based on the expert advice, the management believes that the Company has strong case and hence, no provision and consequential adjustments, if any for such disputed amount have been considered in the financial statements.

b. Export obligations

The Company has imported certain items at concessional rates of customs duty under the Export Promotion Capital Goods Scheme (EPCG). As at the Balance Sheet date, total Export Obligations under the EPCG Scheme is USD 37,558,353 (March 31, 2009, USD 35,083,658) which is to be fulfilled over a period of eight years from the date of the licenses. As at March 31, 2010, the Company has fulfilled Export Obligations amounting to USD 14,788,088 (March 31, 2009 USD 8,749,730) and has outstanding Export Obligation of USD 22,770,245 (March 31, 2009 USD 26,333,928). The Company is confident that it will fulfill obligations under the EPCG scheme.

c. Managerial remuneration

As at As at

Particulars March 31, 2010 March 31, 2009

Salaries and allowances 9,000 9,000

Contribution to provident and other funds 308 308 Other perquisites or benefits including medical expenses reimbursement and car facility provided 315 315

Total 9,623 9,623

The Chairman and Managing Director and other Whole-time directors are covered under the Companys leave encashment policy and group gratuity scheme along with other employees of the Company. As the future liability for gratuity is provided on an actuarial basis for the Company as a whole, the amount pertaining to the directors is not ascertainable and, therefore, not included above.

d. Auditors remuneration (included under Miscellaneous expenses)

As at As at

Particulars March 31, 2010 March 31, 2009

(i) As auditor

(a) For statutory audit; 2,125 1,600

(b) For limited review of quarterly results 375 375 (ii) As adviser, or in any other capacity, in respect of

(a) Taxation matters; - -

(b) Company law matters: - -

(c) Management services; and - - (iii) In any other manner

(a) Out of pocket expenses 15 10

Total 2,515 1,985

e. Segment information

The Companys operations predominantly relate to manufacture and sale of milk and milk products and ice creams and others. Accordingly, business segments comprise the primary basis of segmental information set out in these financial statements. Secondary segment reporting is made on the basis of the geographical location of customers. Business (primary) segments of the Company are:

a) Milk and milk products; and

b) Others

o. There are no overdue amounts payable to Micro, Small and Medium Enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 based on information available with the Company. Further, the Company has not paid any interest to any Micro, Small and Medium Enterprises during the current year.

f. Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. Potential equity shares with anti-dilutive effects are not considered for calculating diluted earnings per share.

During the year, the Company has issued 6% Unsecured Compulsorily Convertible Debentures as discussed in Note 1(k) of this schedule. These debentures have anti - dilutive effect to the earnings per share in the current year and hence are ignored for the purposes of computing diluted earnings per share. These debentures may have dilutive effect on earnings per share in the future periods.

g. Employee Benefits

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with LIC in the form of a qualifying insurance policy.

Reconciliation of opening and closing balances of the present value of defined benefit obligation

The fund is 100% administered by Life Insurance Corporation of India ("LIC"). The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the year over which the obligation is to be settled.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

h. Subsequent events

On April 30, 2010, there was a fire in the Companys plant at Kancheepuram, Tamil Nadu. There was no loss of life or human injury. The management estimates a loss of 25,000 due to loss of inventory and other assets which is fully recoverable from the insurer. There has been no significant disruption in the flow of distribution on account of the accident.

The above events have not been recognised as these do not represent a condition existing at the Balance Sheet date.

i. Previous year comparatives have been regrouped wherever necessary to conform to current year classification.

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