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Modern Dairies Ltd.

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Sep 27, 16:00
9.60 0.24 (2.56%)
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31,097
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27,967
38,073
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    9.36

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    9.36

  • Bid Price (Qty.)

    9.37 (500)

  • Offer Price (Qty.)

    9.51 (1)

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Dec 27, 11:22
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Modern Dairies is not listed on NSE

Annual Report

For Year :
2015 2014 2013 2012 2011 2010 2009 2008 2007

Auditor's Report

1. We have audited the accompanying financial statements of Modern Dairies Limited (the Company), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management''s Responsibility for the Financial Statements 2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the Act) with respect to the preparation of these financial statements, that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules, 2014 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor''s Responsibility 3. Our responsibility is to express an opinion on these financial statements based on our audit. 4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. 5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements. 7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements. Opinion 8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, its loss and its cash fows for the year ended on that date. Emphasis of Matter 9. W e draw attention to Note xxix (b) and xxx to the accompanying financial statements, which describes the uncertainty related to the outcome of the pending litigation in connection with the levy of Milk Cess and interest thereon under the provisions of ''The Haryana Murrah Buffalo and Other Milch Animal Breed (Preservation and Development of Animal Husbandry and Dairy Development Sector) Act, 2001, and indicates that as at 31st March, 2015 the net worth of the Company is fully eroded. These conditions, along with other matters as set forth in Note xxIx (b) and xxx, indicate the existence of a material uncertainty that may cast significant doubt about the Company''s ability to continue as a going concern. Our opinion is not qualified is respect of this matter. Report on Other Legal and Regulatory Requirements 10. As required by the Companies (Auditor''s Report) Order, 2015 (the Order) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order. 11. As required by Section143(3) of the Act, we report that: a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books; c. the financial statements dealt with by this report are in agreement with the books of account; d. in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended); e. on the basis of the written representations received from the directors as on 31st March, 2015 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section164(2) of the Act; f. with respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. as detailed in Note xxIx (a), xxIx (b) and xxIx (c) to the financial statements, the Company has disclosed the impact of pending litigations on its financial position; ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. Annexure to the Independent Auditor''s Report of even date to the members of Modern Dairies Limited, on the financial statements for the year ended 31st March, 2015 Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that: (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The Company has a regular program of physical verification of its fixed assets under which fixed assets are verified in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification. (ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year, except for goods-in-transit and stocks lying with third parties. For stocks lying with third parties at the year-end, written confirmations have been obtained by the management. (b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) The Company is maintaining proper records of inventory and no material discrepancies between physical inventory and book records were noticed on physical verification. (iii) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii) (a) and 3(iii)(b) of the Order are not applicable. (iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fxed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. (v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable. (vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of Company''s products/services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. (vii) (a) Undisputed statutory dues including provident fund, employees'' state insurance, income- tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable. (b) The dues outstanding in respect of income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess on account of any dispute, are as follows: Name of the Nature Amount Amount statute of A in Paid dues lacs Under Protest (A in lacs) The Haryana Milk cess 15,02.99 5,91.00 Murrah Buffalo and Other Milch Animal Breed (Preservation and Development of Animal Husbandry and Dairy Development Sector) Act, 2001 The Haryana Interest on 14,95.87 - Murrah milk cess Buffalo and Other Milch Animal Breed (Preservation and Development of Animal Husbandry and Dairy Development Sector) Act, 2001 Central CENVAT 82.40 82.40 Excise Tax, credit, 1944 interest Central CENVAT 1,78.85 15.00 Excise Tax, credit, 1944 interest Customs Act, Penalty and 10.60 10.60 1962 redemption fine Haryana Tax Entry tax 1,16.50 - on Entry of Goods into Local Areas Act, 2003 Income Tax Income tax 11.41 6.06 Act, 1961 Name of the Period to Forum where statute which the dispute is amount pending relates The Hariyana Murrah 2001-02 to Hon''ble Buffalo and Other 2014-15 Supreme Court Milch Animal Breed of India (Preservation and Development of Amimal Husbandry and Dairy Development Sector)Act,2001 The Hariyana Murrah 2001-02 to Hon''ble Buffalo and Other 2014-15 Supreme Court Milch Animal Breed of India (Preservation and Development of Animal Husbandry and Dairy Development Sector)Act 2001 Central Excise Tax 2005-06 Custom Excise 1944 and Service Tax Appellate Tribunal, New Delhi Central Excise Tax 2007-08 to Custom Excise 2009-10 and Service Tax Appellate Tribunal, New Delhi Customs Act,1962 2011-12 Custom Excise and Service Tax Appellate Tribunal, New Delhi Haryana Tax on Entry 2007-08 to Hon''ble of Goods into Local 2014-15 Supreme Court Areas Act,2003 of India Income Tax Act,1961 AY 2006-07, Income Tax 2008-09 Appellant and Tribunal, New 2009-10 Delhi and Commissioner of Income Tax (CIT), Gurgaon (c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under. Accordingly, the provisions of clause 3(vii) (c) of the Order are not applicable. (viii) In our opinion, the Company''s accumulated losses at the end of the financial year are more than fifty percent of its net worth. The company has incurred cash losses in the current financial year; however, in the immediately preceding financial year the company had not incurred cash losses. (ix) There are no dues payable to financial institutions or debenture-holders. During the year ended 31st March, 2015, the Company has defaulted on timely repayment of principal and payment of interest on term loans and corporate loans to banks. The delay with respect to interest and principal on term loans, upto 30 days amounted to M 95,09,695 and M 26,00,000, respectively; the delay between 31 to 90 days amounted to M 1,16,15,089 and M 1,12,99,614 respectively. The delay with respect to interest and principal on corporate loans, upto 30 days amounted to M 56,04,090 and Nil, respectively; the delay between 31 to 90 days amounted to M 27,61,592 and M 44,77,073 respectively. Apart from above, as at the year end, the interest outstanding on term loans amounting to M 97,96,745 and on corporate loans amounted to M 36,70,170 has not been paid till 31st March 2015. As at the balance sheet date, the periods of delay in these cases were upto 60 days. (x) The Company has not given any guarantees for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 3(x) of the Order are not applicable. (xi) In our opinion, the Company has applied the term loans for the purpose for which these loans were obtained. (xii) According to the information & explanations given to us, no fraud on or by the Company has been noticed or reported during the period covered by our audit except for an instance as detailed in note xxxVII to the financial statements, identified by the management, wherein an employee of the Company was found to be involved in preparing inappropriate report on the quality test carried out by him on raw milk purchased from a vendor. The management is in the process of quantifying its impact, however, as per the information and explanations given to us, such amount is not expected to be material. Further, the management has fled a first information report with Police department against the employee and the vendor, has terminated the services of such employee, discontinued business with such vendor and is in the process of taking necessary steps for ensuring appropriate recoveries. For Walker Chandiok & Co LLP (Formerly Walker, Chandiok & Co) Chartered Accountants Firm''s Registration No.: 001076N/N500013 per Sumit Mahajan Place : Chandigarh Partner Date : 29th May, 2015 M. No.: 504822