1. Contingent Liabilities
a) Claims against the Company not acknowledged as debts: Rs.
1,073,042/-(Previous Year: Rs. 6,851,986/-).
b) Counter guarantees given to a bank on account of guarantees given by
them to Value Added Tax authorities: Rs. 2,884,453/- (Previous Year
c) Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 60,000,000/-
(Previous Year Rs. NIL).
2. Capital Reserve
Capital Reserve includes Rs. 146,000,000/ (Previous Year Rs. 962,500)
being the amount of warrant application money forfeited on 7,300,000
(Previous Year 275,000) warrants in respect of which the warrant holder
did not exercise their conversion option.
3. Convertible Warrants
In the previous year, the company had allotted 7,300,000 convertible
warrants during the year, including 300,000 warrants allotted to the
Directors of the company, on 11th August, 2008. Each warrant was
convertible into one equity share of the company, fully paid up, at a
conversion price of Rs. 200 per share. The option was required to be
exercised within the stipulated period from the date of allotment. The
warrant holders had paid 10% of the conversion price at the time of
allotment, which stands forfeited and credited to the Capital Reserves
Account, since the options were not exercised within the stipulated
Certain warrant holders who were allotted 7,300,000 warrants (Previous
year 900,000 warrants in November, 2006), did not exercise their rights
to convert the warrants into shares in respect of 7,300,000 outstanding
warrants (Previous Year 275,000 outstanding warrants), and on the
expiry of the conversion period, the application money of Rs.
146,000,000/- (Previous Year Rs. 962,500) paid in respect of the
outstanding warrants were forfeited to the Company and credited to the
Capital Reserve Account.
4. Formalities for updating information relating to increase in
Authorised Share Capital of the Company on the portal of Ministry of
Corporate Affairs are in progress.
The company had revalued as at 31st March, 2007, leasehold land,
building and plant and machinery assets situated at Jejuri plant based
on the report by an independent chartered valuer. The valuation
resulted in net increase in the value of the said assets by Rs.
81,082,224/- and corresponding increase in revaluation reserve by like
During the year, the company carried out a second revaluation as at
22nd July, 2009 of plant and machineries located at Jejuri and Sonepat
plants by an independent chartered valuer. The valuation resulted in a
net increase in the value of the said assets by Rs. 126,871,462/- and
corresponding increase in revaluation reserve by like amount.
6. General Reserves:
During the year, Company transferred Rs. 2,613,173/- to General
Reserves, the amount of Special Capital Incentive Rs. 2,500,000/- and
Subsidy from Government Rs. 113,173/-, since the said reserves became
free on fulflling the conditions relating thereto.
7. Secured Loans:
Pre/Post Shipment Credit Facility and the Working Capital Demand Loan
are secured by charge on the current assets of the company, both
present and future, charge on the immovable and movable assets, present
and future, and Corporate Guarantee by the Promoter Company (Venture
Business Advisors Pvt. Ltd.).
Working Capital Loan from Punjab National Bank is secured by first pari
passu charge on current assets, present and future, charge on all
movable fixed assets both present and future and Corporate Guarantee
given by the Promoter.
Cash Credit facility from United Bank of India is secured by first
charge on current assets, both present and future, charge on plant &
machineries, both present and future and Corporate Guarantee given by
Overdraft facility from Yes Bank is secured by hypothecation of the
Fixed Deposit Receipt.
Factoring Facility with SBI Global Factors Ltd. is secured by charge on
fixed Assets, receivables, charge on immovable properties, pledge of
the shares of the Company held by the Promoter and Corporate Guarantee
given by the Promoter.
Margin Funding Facilities are secured by the pledge of the shares of
the company which have been acquired by utilising the facilities and,
in certain cases, by the pledge of the shares of the Company held by
Vehicle loans from Tata Capital Ltd. and Reliance Capital Ltd. are
secured by hypothecation of the specific vehicles.
8. Segment Reporting:
The disclosure requirement in respect of Accounting Standard 17 on
Segment Reporting is as under:
a) Primary Segment
The company is a single segment company dealing in fresh and frozen
foods in accordance with the criteria for identification of reportable
segment specified in the said standard.
9. Employee Benefits:
The disclosures pursuant to Accounting Standard (AS) 15 (Revised) on
Employee Benefits are as follows:
a) Defined Contribution Plan
Contribution to Defined Contribution Plan recognised as an expense and
included in Personnel Cost – Schedule 13 in the Proft and Loss
Account is as under:
- Employers contribution to Provident Fund and Other Funds– Rs.
1,345,629/- (Previous year: Rs. 1,666,654/-).
c) The company has an Employees Group Gratuity Scheme with the Life
Insurance Corporation of India (LIC), to fund the defined benefit plan
for the qualified employees. The Scheme provides for lump sum payment
to employees on retirement, death while in employment or termination of
employment of an amount equivalent to 15 days salary for every
completed year of service or part thereof in excess of six months,
provided the employee has completed fve years in service.
The said policy has not been renewed by the company. In view of the
above, LIC has not given the detailed disclosure required under AS-15.
The disclosure in the notes to accounts is based on the renewal notice
received from LIC which in the opinion of the company satisfies the
requirements relating to disclosure of gratuity liability as per AS-15.
Since in the opinion of the company the opening provision in the books
is in excess of the accrued gratuity liability at the year end as
disclosed in the renewal notice of LIC, the difference has been written
back as income.
10. Extraordinary Item
The Company incurred loss of Rs. 119,589,019/- during the year
(Previous Year: 25,191,443/-) on sales of shares of Kohinoor Foods
Limited, which has been disclosed as an Extraordinary Item.
11. Related Party Disclosures:
The disclosure requirements in respect of Accounting Standard 18 on
Related Party Disclosures are as under:
a) Relationships :
i) For the Financial year 2009-10
a) Company under same Management Venture Business Advisors Pvt. Ltd.
Delika Foods Pvt. Ltd.
b) Wholly Owned Subsidiary
Company Temptation Foods International
British Virgin Islands
c) Subsidiary Company Temptation Foods FZE,
d) Key Management Personnel Mr. Vinit Kumar, CMD
ii) For the Financial year
a) Company under the same
management Venture Business Advisors Pvt.
b) Wholly owned Subsidiary Company Temptation Foods International
Limited, British Virgin Islands.
c) Key Management Personnel Mr.Vinit Kumar, CMD
12. Deferred Taxation:
a) In compliance with the Accounting Standard 22 on Accounting for
Taxes on Income, the Company has recognized deferred tax on timing
differences; being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods.
13. Impairment of Assets
As required by Accounting Standard 28 on Impairment of Assets, the
Company has reviewed the potential generation of economic benefts from
fixed assets and concluded that the fixed assets employed in the
business will generate adequate economic returns over their useful
lives. Consequently, no provision for impairment loss is required.
14. Regrouping / Reclassification:
Figures for the previous year have been regrouped / reclassified
wherever necessary to make them comparable with those of the present