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Modern Dairies

BSE: 519287|ISIN: INE617B01011|SECTOR: Food Processing
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Modern Dairies is not listed on NSE
Mar 14
Notes to Accounts Year End : Mar '15
NOTE: 1.
 
 The Company has incurred a net loss of M 22,25.46 lacs for the year
 ended 31st March, 2015 and as of that date, the Company''s total
 liabilities exceeded its total assets by M 33,68.65 lacs. In the
 opinion of the management, the unjust levy of milk cess and other
 related operating factors has eroded the net worth of the Company. The
 uncertainty of the outcome of litigation in connection with milk cess
 and other related operating factors has cast doubts about the Company''s
 ability to continue as going concern. In the opinion of the management,
 as the litigation currently stands sub-judice with the Hon''ble Supreme
 Court of India, the management is hopeful that such milk cess imposed
 by the Government of Haryana shall be waived off along with interest
 and other dues there on. The Company is in the process of formulating
 its revised business plans and negotiating with stakeholder so as to
 ensure continuity of operations of the Company and is hopeful of
 turning around and expects that the net worth of the Company shall
 become positive in near future.
 
 NOTE: 2.
 
 SEGMENT INFORMATION Primary segment
 
 The Company is primarily engaged in the business of
 manufacturing/processing of milk and milk products like Casein,
 Lactose, Skimmed milk powder, Cheese, Butter, Pure Ghee, Premix etc.,
 management considers the risk and rewards associated with these
 products to be similar in nature. Accordingly, the entire operations of
 the company are governed by the same set of risk and rewards and thus,
 it operates in a single primary segment.
 
 Secondary segment
 
 The Company''s business is organized into two key geographic segments.
 Revenues are attributable to individual geographic segments based upon
 the location of customers.
 
 Other information
 
 The accounting policies consistently used in the preparation of
 financials statements are also applied to revenues and expenditure of
 individual segments.
 
 Segment information disclosures as required under Accounting
 Standard-17  Segment Reporting issued by Companies (Accounting
 Standard) Rules, 2006 as prescribed by Institute of Chartered
 Accountant of India.
 
 NOTE: 3.
 
 LEASES
 
 The Company has leased facilities under cancellable operating leases
 arrangements with a lease term ranging from one to three years, which
 are subject to renewal at mutual consent thereafter. The cancellable
 arrangements can be terminated by either party after giving due notice.
 The lease rent expenses recognized during the year amounts to M 22.16
 lacs (Previous year M 16.41 lacs).
 
 NOTE: 4.
 
 The Company through its internal control processes identified an
 instance of one of the employees colluding with a vendor for supply of
 raw milk and found him issuing incorrect lab test results, thereby
 rating the milk to be of superior quality as opposed to its actual
 quality. The management has fled a first information report against the
 said employee and the vendor involved in this matter, stating an
 estimated loss incurred of M 0.79 lacs, however, as the case is
 sub-judice and under investigation, management is in the process of
 quantifying its impact on the financial statements and believes that
 such amount is not expected to be material to the financial statements.
 Pending resolution of the matter, the management has terminated the
 services of such employee, discontinued business with such vendor and
 has initiated necessary steps, including pursuing the legal cases
 against the employee and the vendor for ensuring appropriate
 recoveries.
 
 NOTE: 5.
 
 Pursuant to the reference fled by the Company with Board for Industrial
 and Financial Reconstruction (BIFR) under section 15(1) of the Sick
 Industrial Companies (Special Provisions) Act, 1985 the BIFR vide its
 order dated 8th February, 2012 declared the Company as sick and
 appointed Punjab National Bank being the Lead Bank as Operating Agency
 (OA) to formulate rehabilitation plan for the Company. As per the
 meeting held on 15th April, 2013 Company has submitted Debt
 Restructuring Scheme (DRS) on 25th February, 2013. During the year, the
 matter came up for hearing on 28th May, 2014, and the Hon''ble BIFR
 Board observed that in the light of the Milk Cess matter being pending
 before the Supreme Court, the DRS of the Company could not be
 formulated, the Hon''ble Bench directed the Company and the Haryana
 Livestock Development Board to keep the BIFR Board updated. Thereafter
 the matter is yet to come up for hearing.
 
 NOTE: 6.
 
 In the opinion of the board of directors, current assets, loans and
 advances have a value on realization in the ordinary course of business
 at least equal to the amounts at which they are stated and provision
 for all knows liabilities have been made in accounts.
 
 NOTE: 7.
 
 Previous year figures have been regrouped /recasted, wherever considered
 necessary to make them comparable with those of the current year.
Source : Dion Global Solutions Limited
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