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Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 15

SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED

DIRECTORS’ REPORT TO THE SHAREHOLDERS

_______________________________________________________________________________________

The Directors are pleased to present before you their Second Annual Report on the operations

of the Company along with the Audited Accounts for the year ended 31st March 2016.

The Company was incorporated on 03rd July 2014 as a Producer Company under the

provisions of Part IXA of the Companies Act, 1956 and the Companies Act, 2013 to the extent

applicable in the State of Andhra Pradesh to undertake the business of pooling, purchasing,

processing of milk of the Members, marketing of the same and to deal in activities that are part

of or incidental to any activity related thereto.

Financial Results

The summarized Financial Results are as under:

Particulars

For the year ended

31st March 2016

(Rs. in Lakh)

For the year ended

31st March 2015

(Rs. in Lakh)

Total Revenue 28,385.32 13,836.92

Total Expenses 28,097.43 13,775.52

Profit/(Loss) for the period before tax 287.89 61.40

Tax expenses 96.38 20.61

Profit/(Loss) for the period after tax 191.51 40.79

(From 3rd July 2014 to 31st March 2015)

We are pleased to inform that during the year under review, the Company has achieved a

turnover of Rs.28,385.32 Lakh as against Rs. 13,836.92 Lakh in the previous year.

During the year under review, the total revenue generated wasRs.28,385.32 Lakh, which

includes other incomes earned of Rs. 43.60 Lakh. The total expenses incurred were Rs.28,097.43

Lakh as against Rs. 13,775.52 Lakh of previous year. Total expenses of Rs. 28,097.43 Lakh

including material expenses of Rs. 26,441.51 Lakh and financial expenses of Rs.109.85 Lakh and

depreciation and amortisation expense of Rs.215.40 Lakh. This has resulted a profit before tax

(PBT) of Rs.287.89 Lakh and net profit after tax (PAT) of Rs.191.51 Lakh.


Limited Return (Dividend)

The Board of Directors are pleased to recommend limited return (dividend) at the rate of Rs.

10/- (Rupees Ten only) per equity share absorbing Rs. 52.52 Lakh (including Dividend

Distribution Tax of Rs. 8.88 Lakh).The limited return (dividend) will be paid to those members,

whose names appear in the Register of Members of the Company as on 31stMarch 2016.

Transfer to General Reserve

Pursuant to provisions of article no 11.10 of the Articles of Association of the Company read

with Section 581ZI of the Companies Act 1956, the Board proposes to transfer Rs. 139 Lakh to

the credit of General Reserve in the Balance Sheet.

Procurement of Milk

The Company is procuring liquid milk from Chittoor and Anantapur Districts of Andhra Pradesh

covering 2,189 Milk Pooling Points. During the year under review, the Company procured 9.917

Crore Kgs of raw milk (with an average of 2.71 Lakh Kgs per day) from its members. The

Company continues to pay competitive price to its members towards the milk being procured.

Producer Institution Building (PIB)

New member enrolment exercise was initiated during December 2015 and able to enrol more

than 10,000 members. The total no. of Members as on 31st March 2016 is 56,640.

An Interface Workshop was conducted for the Board of Directors and Senior Professionals of

the Company in the Month of December 2015. A Yearly Orientation Programme was conducted

for the Board of Directors in the month of March 2016.Dr. N V Belavadi and Shri Sriram Singh

have facilitated the above workshop and programme.

During the year under report, the PIB department organized Member Awareness Programme,

Quality Clean Milk Production Programme, Producer Awareness Programme, Rural Youth

Awareness Programme, Rural School Awareness Programme, Orientation for Member Relations

Groups (MRGs) and Leadership Development programme in the operational area of the Company

under Village Based Milk Procurement System.

Sub Project Plans (SPP)

The Company had received approval for three Sub Project Plans from National Dairy

Development Board on 22nd April 2015. These three Sub Project Plans are:

1. Village Based Milk Procurement System

2. Ration Balancing Programme

3. Pilot model for viable Artificial Insemination delivery, and

Sub Project Plans are for a period of 2 years viz. FY 2015-16 and 2016-17 with a total grant-

in-aid of Rs. 4,102.26 Lakh.


Sales & Marketing

The Company launched Poly Packed Milk with the brand of “Shreeja” in 200 ml and 500 ml in

the retail market in October 2015.

Quality Assurance

Quality has played an important role in growth of the Company. The Company had organised

various training programmes for Lab Chemists of the Company to improve and maintain the

quality of Milk. The training programmes covered about the Milk testing methods, FSSAI

norms, Hygiene, Safety, Good Manufacturing Practices, and Clean Milk Production, Cleaning

in Place & Good Lab Practices to enhance the Milk Quality. The Company has put in place a

stringent quality mechanism to ensure safety and credibility.

ERP Implementation

The Company has implemented SAP an Integrated ERP system. The implementation and Go-

live was done on 01 March 2016, with the support of all departments in the Company,

especially the IT Department. The base modules implemented were Milk Procurement, Quality,

Material Management, sales & distribution and Finance. The remaining modules will be

implemented in the following year 2016-17. IMMS milk procurement software was also

implemented and gone live on the same day to complement the milk procurement module of

SAP.

Board of Directors

Appointments

Smt. Geddam Bharathi was inducted as Additional Director on the Board of the Company

effective from 30th June 2016.

Resignations

Smt. Bandapalli Usharani has resigned as a Director with effect from 13th August 2015.The

Board places on record the appreciation of services rendered by her as director of the Company.

Composition of Board of Directors and reappointment of Directors:

The Articles of Association of the Company (article 9.4) provide for the determination of criteria

for categorising members into different classes based on their patronage and representation of

such classes of members on the Board. Since, the Company is in its initial years of its

operations and completed its first full financial year. As per Article 9.5, the Board waived this

requirement for the first 3 years of the operations of the Company.

Smt. Lavanya Kumari Bojja, Smt. Sailaja Kampalle and Smt. Nirmala Thaluri, Directors of the

Company retires by rotation at this ensuing Annual General Meeting, and they being eligible,

offer themselves for Re-appointment. Your Board recommends their re-appointment as

Directors whose office shall be liable to retire by rotation. The necessary resolution is being

placed before the shareholders for their approval.


Proposed Appointments

Smt. Geddam Bharathi was inducted as Additional Directors on the Board of the Company 0n

30th June 2016. As per the provisions of the Companies Act, Smt. Geddam Bharathi holds office

only up to the date of ensuing Annual General Meeting of the Company. Approval of the

Shareholders is being sought for her appointment as Director at the ensuing Annual General

Meeting of the Company.

Membership/Voting Rights/ Share Capital

As at 31st March 2016, the paid up share capital was Rs.436.33 Lakh, whereas 56,640

members were appearing on the register of members of the Company. During the period under

review there is no cancellation or surrender of shares.

Voting Rights and attendance at AGM:

The ensuing Annual General Meeting is the 3rdAnnual General Meeting of the Company for

Second Financial year i.e., 2015-16. The voting rights shall be based on a single vote for every

member who has poured milk for at least 200 days and 500 litres in the Financial Year 2015-

16.

Directors Responsibility Statement

In accordance with section 217 (2AA) the Board of Directors of the Company informs the

members that:

a) in the preparation of annual accounts, the applicable accounting standards along with

proper explanation have been followed;

b) the directors have selected such accounting policies and applied them consistently and

made judgments and estimates that are reasonable and prudent so as to give a true and

fair view of the state of affairs of the Company at the end of the Financial Year and the

profit for that period;

c) the directors have taken proper and sufficient care for the maintenance of adequate

accounting records in accordance with the provisions of this Act for safeguarding the assets

of the company and for preventing and detecting fraud and other irregularities;

d) The directors have prepared the annual accounts on a going concern basis.

Internal Control System

The Company has in place the proper and adequate internal control system, which ensures

that all assets are safeguarded and protected and the transactions are authorized, recorded

and reported correctly. Pursuant to the Section 581ZF of the Companies Act, 1956, M/s. Ernst

& Young LLP, Chartered Accountants, has been appointed as Internal Auditors of the company,

who independently evaluate the adequacy of internal controls, and carry out the audit of

accounts of the company.


Auditors

M/s S.B. Billimoria& Co., Chartered Accountants, Statutory Auditors retire at the ensuing 3rd

Annual General Meeting and being eligible offers themselves for re-appointment. The

Company has received a certificate from the auditors to the effect that their reappointment if

made, would be in accordance with the provisions of the Companies Act.

Your Directors recommend the re-appointment of M/s S.B. Billimoria& Co., as Statutory

Auditors of the Company at the ensuing 3rd Annual General Meeting.

Particulars of Employees

Pursuant to Sections 217(2A) of the Companies Act, 1956 read with the Companies (Particulars

of Employees) Rules, 1975, none of the employees were in receipt of remuneration which in the

aggregate exceeds Rupees Sixty Lakh per annum or Rupees Five Lakh per month, as the case

may be, during the period under review.

Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange

Earnings and out go.

Particulars required to be furnished pursuant to Section 217(1)(e) of the Companies Act, 1956

read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,

1988:

(i) Part A and B of the Rules pertaining to Conservation of energy and Technology

absorption are presently not applicable to the Company.

(ii) Foreign Exchange earnings and outgo: Earnings – Nil;

Outgo – Nil.

Acknowledgement

The Board of Directors wish to convey their appreciation to members, business associates for

their support and contribution during the period under review. The Directors would also like to

thank bankers, employees, both internal and statutory auditors for their continued support to

the Company.

The Board of Directors acknowledge with gratitude the encouragement and support extended

by National Dairy Development Board, NDDB Dairy Services and Mother Dairy Fruit &

Vegetable Private Limited.

For and on Behalf of the Board of Directors

Place: Tirupati

Date: 05 August, 2016 Chairman


INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF


Report on the Financial Statements

We have audited the accompanying financial statements of SHREEJA MAHILA MILK

PRODUCER COMPANY LIMITED (“the Company”), which comprise the Balance Sheet as at

31 March, 2016, 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

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 prescribed under Section 133 of the Act, as applicable.

This responsibility also includes maintenance of adequate accounting records in accordance

with the provisions of the Act for safeguarding the assets of the Company and for preventing

and detecting frauds and other irregularities; selection and application of appropriate

accounting policies; making judgements 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.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

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 thereunderand the Order under section 143 (11) of the Act.

We conducted our audit of the financial statements 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.

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 control 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. 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.


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

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 31 March, 2016, and its profit and

its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (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 purposes 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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow

Statement 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 prescribed under section 133 of the Act, as applicable.

e) On the basis of the written representations received from the directors as on 31

March, 2016 taken on record by the Board of Directors, none of the

directors is disqualified as on 31March, 2016 from being appointed as a

director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial

reporting of the Company and the operating effectiveness of such controls, refer

to our separate Report in “Annexure A”. Our report expresses an unmodified

opinion on the adequacy and operating effectiveness of the Company’s internal

financial controls over financial reporting.

g) 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. The Company does not have any pending litigations which would impact

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.

2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued

by the Central Government in terms of Section 143(11) of the Act, we give in

“Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the

Order.

3. As required by Section 581ZG of the Part IXA of the Companies Act, 1956 (in terms of

section 465 of the Companies Act, 2013, provisions of part IXA of the Companies Act are

applicable to a producer company in a manner as if the Companies Act, 1956 has not

been repealed), we give in “Annexure C” a statement on the matters specified in that

Section.

For S. B. BILLIMORIA & CO.

Chartered Accountants

(Firm Registration No. 101496W)

JitendraAgarwal

Partner

(Membership No. 87104)

Place: Gurgaon

Date: 05 August, 2016


ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ of

Our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-

section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Shreeja Mahila Milk

Producer Company Limited (“the Company”) as of 31 March, 2016 in conjunction with our

audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial

controls based on the internal control over financial reporting criteria established by the

Company considering the essential components of internal control stated in the Guidance Note

on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of

Chartered Accountants of India. These responsibilities include the design, implementation and

maintenance of adequate internal financial controls that were operating effectively for

ensuring the orderly and efficient conduct of its business, including adherence to company’s

policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the

accuracy and completeness of the accounting records, and the timely preparation of reliable

financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over

financial reporting based on our audit. We conducted our audit in accordance with the

Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the

“Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards

on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent

applicable to an audit of internal financial controls. Those Standards and the Guidance Note

require that we comply with ethical requirements and plan and perform the audit to obtain

reasonable assurance about whether adequate internal financial controls over financial

reporting was established and maintained and if such controls operated effectively in all

material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the

internal financial controls system over financial reporting and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining an

understanding of internal financial controls over financial reporting, assessing the risk that a

material weakness exists, and testing and evaluating the design and operating effectiveness of

internal control based on the assessed risk. The procedures selected depend on the auditor’s

judgement, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to providea

basis for our audit opinion on the Company’s internal financial controls system over financial

reporting.


Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide

reasonable assurance regarding the reliability of financial reporting and the preparation of

financial statements for external purposes in accordance with generally accepted accounting

principles. A company's internal financial control over financial reporting includes those

policies and procedures that (1) pertain to the maintenance of records that, in reasonable

detail, accurately and fairly reflect the transactions and dispositions of the assets of the

company; (2) provide reasonable assurance that transactions are recorded as necessary to

permit preparation of financial statements in accordance with generally accepted accounting

principles, and that receipts and expenditures of the company are being made only in

accordance with authorisations of management and directors of the company; and (3) provide

reasonable assurance regarding prevention or timely detection of unauthorised acquisition,

use, or disposition of the company's assets that could have a material effect on the financial

statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting,

including the possibility of collusion or improper management override of controls, material

misstatements due to error or fraud may occur and not be detected. Also, projections of any

evaluation of the internal financial controls over financial reporting to future periods are

subject to the risk that the internal financial control over financial reporting may become

inadequate because of changes in conditions, or that the degree of compliance with the policies

or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the

Company has, in all material respects, an adequate internal financial controls system over

financial reporting and such internal financial controls over financial reporting were operating

effectively as at March 31, 2016, based on the internal control over financial reporting criteria

established by the Company considering the essential components of internal control stated in

the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by

the Institute of Chartered Accountants of India.




Place: Gurgaon


(JitendraAgarwal)

Partner



ANNEXURE “B”TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2under ‘Reports on Other Legal and Regulatory Requirements’ section of our

report of even date)

i. In respect of its fixed assets :

a. The Company has maintained proper records showing full particulars, including

quantitative details and situation of the fixed assets.

b. The fixed assets were physically verified during the year by the Management in

accordance with a regular programme of verification which, in our opinion, provides for

physical verification of all the fixed assets at reasonable intervals. According to the

information and explanation given to us, no material discrepancies were noticed on such

verification.

c. According to the information and explanations given to us and the records examined by

us, the Company has constructed buildings on land taken on lease and the lease

agreements are in the name of the Company.

ii. Management at reasonable intervals and no material discrepancies were noticed on physical

verification.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited

Liability Partnerships or other parties covered in the register maintained under section 189

of the Companies Act, 2013.

iv. The Company has not granted any loans, made investments or provided guarantees and

hence reporting under clause (iv) of the CARO 2016 is not applicable.

v. According to the information and explanations given to us, the Company has not accepted

any deposits from the public, and hence reporting under clause (v) of the CARO 2016 is not

applicable.

vi. Having regard to the nature of the Company’s business / activities, reporting under clause

(vi) of CARO 2016 is not applicable.

vii. According to the information and explanations given to us, in respect of statutory dues:

a. The Company has generally been regular in depositing undisputed statutory dues

including Provident Fund, Employee’s State Insurance, Income Tax, Sales Tax,

Service Tax, Value Added Tax, Cess and other material statutory dues applicable to

it with the appropriate authorities. We are informed that the operations of the

Company during the year did not give rise to any liability for Customs Duty and

Excise Duty.

b. There are no undisputed amounts payable in respect of Provident Fund, Employee’s

State Insurance, Income Tax, Sales Tax, Value Added Tax, Service Tax, Customs

Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31 March,

2016 for a period of more than six months from the date they became payable.

c. There are no dues of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty

and Value Added Tax as on 31March 2016 on account of disputes.

viii. In our opinion and according to the information and explanations given to us, the Company

has not defaulted in the repayment of loans or borrowings to banks, financial institutions

and government. The Company has not issued any debentures.


ix. The Company has not raised moneys by way of initial public offer or further public offer

(including debt instruments) or term loans and hence reporting under clause (ix) of the

CARO 2016 Order is not applicable.

x. To the best of our knowledge and according to the information and explanations given to us,

no fraud by the Company and no material fraud on the Company by its officers or employees

has been noticed or reported during the year.

xi. The Company is a private company and hence the provisions of section 197 of the Companies

Act, 2013 do not apply to the Company.

xii. The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO

2016 Order is not applicable.

xiii. In our opinion and according to the information and explanations given to us the Company is

in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all

transactions with the related parties and the details of related party transactions have been

disclosed in the financial statements etc. as required by the applicable accounting standards.

xiv. The Company is registered under Chapter IXA of the Companies Act, 1956 and hence

reporting under clause (xiv) of CARO 2016 is not applicable.

xv. In our opinion and according to the information and explanations given to us, during the

year the Company has not entered into any non-cash transactions with its directors or

persons connected with him and hence provisions of section 192 of the Companies Act, 2013

are not applicable.

xvi. The Company is not required to be registered under section 45-I of the Reserve Bank of India

Act, 1934.




Place: Gurgaon


(JitendraAgarwal)

Partner



ANNEXURE “C”TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 3 under ‘Reports on Other Legal and Regulatory Requirements’ section of our

report of even date)

i. The amount of debts due from sale of goods and services are as disclosed in note 16 to the

financial statements. According to the information and explanations given to us no debts are

considered as doubtful of recovery.

ii. According to the information and explanations given to us, cash on hand as at year-end has been

physically verified by the management and no discrepancies were noticed on such verification.

According to the information and explanations given to us, the Company does not hold any

investment securities.

iii. The details of assets and liabilities as at 31 March, 2016 are as per the financial statements of

the Company as at and for the year ended 31 March, 2016.

iv. In our opinion and according to the information and explanations given to us, the Company has

not done any transaction which appears to be contrary to the provisions of part IXA of the

Companies Act, 1956.

v. According to the information and explanations given to us, the Company has not granted any

loan to its directors.

vi. According to the information and explanations given to us, the Company has not given any

donations or subscriptions during the year.




Place: Gurgaon


(Jitendra Agarwal)

Partner



SHREEJAMAHILA MILK PRODUCER COMPANY LIMITED

Notes forming part of the financial statements

1. Corporate information

Shreeja Mahila Milk Producer Company Limited (“the Company”) was incorporated on 3 July, 2014

under Part IXA of the Companies Act, 1956.

The Company has started the procurement operations in the state of Andhra Pradesh from 15

September, 2014. The Company procures milk directly from milk producers through Milk Pooling Points

in Districts of Chittoor and Ananthapur of Andhra Pradesh and sells to Mother Dairy Fruit and

Vegetable Private Limited. The Company also trades in cattle feed.

2. Significant accounting policies

The significant accounting policies are as follows:

a. Basis of accounting

The financial statements of the Company have been prepared in accordance with the

Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the

Accounting Standards specified under Section 133 of the Companies Act, 2013 and the

relevant provisions of the Companies Act, 2013 (“the 2013 Act”) / Companies Act, 1956 (“the

1956 Act”)as applicable. MCA has clarified that the provisions of part IXA of the Companies

Act, 1956 shall be applicable to a producer company in the manner as if the Companies Act,

1956 has not been repealed. The financial statements are prepared on accrual basis under

the historical cost convention. The accounting policies adopted in the preparation of the

financial statements are consistent with those followed in the previous year.

b. Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires

management to make estimates and assumptions considered in the reported amounts of

assets and liabilities (including contingent liabilities) and the reported income and expenses

during the year. The management believes that the estimates used in the preparation of the

financial statements are prudent and reasonable. Future results could differ due to these

estimates and the differences between the actual results and the estimates are recognized in

the period in which results are known/materialize.

c. Cash and cash equivalents (for the purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-

term balances (with an original maturity of three months or less from the date of

acquisition), highly liquid investments that are readily convertible into known amounts of

cash and which are subject to insignificant risk of changes in value.


d. Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before

extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and

any deferrals or accruals of past or future cash receipts or payments. The cash flows from

operating, investing and financing activities of the Company are segregated based on the

available information.

e. Revenue recognition

Sales are recognized, net of returns and trade discounts, on transfer of significant risk and

rewards of ownership to the buyers, which generally coincides with the delivery of goods to

customers.

f. Other income

Interest income on deposits is recognized on accrual basis.

g. Fixed assets (Tangible/Intangible)

Fixed assets are carried at cost less accumulated depreciation / amortization and impairment

losses, if any. The cost of fixed assets comprises its purchase price net of any trade discounts

and rebates, any import duties and other taxes (other than those subsequently recoverable

from the tax authorities), any directly attributable expenditure on making the asset ready for

its intended use, other incidental expenses and interest on borrowings attributable to

acquisition of qualifying fixed assets up to the date the asset is ready for its intended use.

Subsequent expenditure on fixed assets after its purchase is capitalized only of such

expenditure results in an increase in the future benefits from such asset beyond its previous

assessed standard of performance.

h. Capital work-in-progress

Assets which are not ready for their intended use are carried at cost, comprising direct cost,

related incidental expenses and attributable interest.

i. Depreciation and amortization

Depreciation on tangible and intangible fixed assets has been provided on straight line

method as per the useful life of the assets assessed as under based on technical advice,

taking into account the nature of asset, the estimated usage of assets, the operating

condition of the asset, past history of replacements, anticipated technological changes,

manufactured warranties and maintenance support etc.

The useful life considered for charging depreciation is as follows:

Description Useful life (in years)

Building 12

Plant and equipment

10

Furniture and fixtures

Computers and software

15

3

Office equipment 10


Depreciation is provided pro-rata from the date of addition.

All assets costing Rs. 5,000 or less individually are fully depreciated in the year of

capitalization.

j. Inventories

Inventories comprise raw material, finished goods and stores and spares. Inventories are

valued at lower of cost and net realizable value after providing for obsolescence and other

losses, where considered necessary. Cost is determined using weighted average method. Cost

includes all charges incurred in bringing the inventories to their present location and

condition. Finished goods include appropriate proportion of overheads.

k. Grants

Government grants and subsidies are recognized when there is reasonable assurance that

the Company will comply with the conditions attached to them and the grants / subsidies will

be received. Government grants related to depreciable fixed assets are treated as deferred

grants which is recognized in the statement of profit and loss on a systematic and rational

basis over the useful life of the asset, i.e., depreciation charge on assets procured from such

grants is appropriated from Deferred Grant and recognized in the Statement of Profit and

Loss by way of reduced depreciation charge.

Revenue government grants and subsidies are recognized as income over the periods

necessary to match them with the costs for which they are intended to compensate, on a

systematic basis and are deducted in reporting the related expense.

l. Employee benefits

Employee benefits include Provident Fund, Employee State Insurance scheme, Gratuity and

compensated absences.

a. Defined contribution plans

The Company’s contributions to provident fund and employees state insurance

scheme is considered as defined contribution plan and are charged to the Statement

of Profit and Loss based on the amount of contributions required to be made as and

when services are rendered by the employees.

b. Defined benefit plans

Gratuity is considered as defined benefit plan. Gratuity is provided based on

actuarial valuation carried out at the balance sheet date. The incremental liability

based on an actuarial valuation as per the ‘Projected Unit Credit’ method, as at the

reporting date, is charged to the Statement of Profit and Loss Account. Actuarial

gains and losses are recognized in the Statement of Profit and Loss.

c. Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in

exchange for the services rendered by employees are recognized during the year

when the employees render the services. These benefits include performance


incentives and compensated absences which are expected to occur within twelve

months after the end of the period in which the employee renders the related

services.

d. Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after

the end of the period in which the employee renders the related services are

recognized as a liability at the present value of the defined benefit obligation as at

the balance sheet date on the basis of actuarial valuation.

m. Earnings per share

Basic earnings per share are computed by dividing the net profit after tax by weighted

average number of equity shares outstanding during the year. Diluted earnings per share is

computed by dividing the net profit after tax by the weighted average number of equity

shares outstanding during the year as adjusted to the effects of all dilutive potential equity

shares, except where results are anti-dilutive.

n. Taxes on income

Income tax comprises current tax and deferred tax. Current tax is the amount of tax payable

on the taxable income for the year as determined in accordance with the applicable tax rates

and the provisions of Income Tax Act, 1961 and other applicable tax laws.

Deferred tax is recognized on timing differences; being the difference between taxable

incomes and accounting income that originate in one period and are capable of reversal in

one or more subsequent periods. Deferred tax is measured using the tax rates and the tax

laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are

recognized for all timing differences. Deferred tax assets are recognized for timing differences

of items other than unabsorbed depreciation and carry forward losses only to the extent that

reasonable certainty exists that sufficient future taxable income will be available against

which these can be realized. However, if there are unabsorbed depreciation and carry

forward losses, deferred tax assets are recognized only if there is virtual certainty that there

will be sufficient future taxable income available to realize such assets. Deferred tax assets

and liabilities are offset if such items relate to taxes on income levied by the same governing

tax laws and the Company has a legal enforceable right for such set off.

o. Borrowing cost

Borrowing costs includes interest and ancillary costs incurred. Borrowing costs that are

directly attributable to the acquisition or construction of a qualifying asset, pertaining to the

period from commencement of activities relating to construction/development of qualifying

asset up to the date of capitalization of such asset, are capitalized as part of the cost of that

asset. All other borrowing costs are recognized as an expense in the statement of profit and

loss in the year in which they are incurred.

p. Impairment of assets

At each balance sheet date, the Company reviews the carrying values of its fixed assets to

determine whether there is any indication that those assets suffered an impairment loss. If

any such indication exists, the recoverable amount of the asset is estimated in order to

determine the extent of impairment loss. Recoverable amount is the higher of an assets net


selling price and value in use. In assessing value in use the estimated future cash flows

expected from the continuing use of the asset and from its disposal are discounted to their

present value using a pre-discount rate that reflects the current market assessments of time

value of money and the risks specific to the asset.

Reversal of impairment loss is recognized as income in the statement of profit and loss.

q. Provisions and contingencies

A provision is recognized when the Company has present obligation as a result of past event

and it is probable that an outflow of resources will be required to settle the obligation, in

respect of which a reliable estimate can be made. Provisions (excluding employee benefits)

are not discounted to their present value and are determined based on best estimate required

to settle the obligation at the balance sheet date. These are reviewed at each balance sheet

date and adjusted to reflect the current best estimates. Contingent Assets are not recognized

in the financial statements. Contingent liabilities are disclosed in the notes to accounts.

Contingent assets are not recognized in the financial statements.

r. Leases

Lease arrangements where the risks and rewards incident to ownership of an asset

substantially vest with the lessor are recognized as operating leases. Lease rent under

operating leases are recognized in the statement of profit and loss account on straight line

basis.

s. Material events

Material events occurring after the Balance Sheet date are taken into cognizance.

t. Operating Cycle

Based on the nature of products / activities of the Company and the normal time between

acquisition of assets and their realization in cash or cash equivalents, the Company has

determined its operating cycle as 12 months for the purpose of classification of its assets and

liabilities as current and non-current.



BALANCE SHEET AS AT 31 MARCH, 2016

___________________________________________________________________________________

Note No. As at 31

March, 2016

As at 31

March,2015

Rupees Rupees

A EQUITY AND LIABILITIES

1. Shareholders’ funds

(a) Share capital 3 43,633,700 20,344,400

(b) Reserves and surplus 4 16,753,780 2,854,236

60,387,480 23,198,636

2. Share application money pending

allotment

- 151,600

3 Deferred grant 5 115,105,684 -

4 Non - current liabilities

(a) Long - term borrowings 6 124,769,000 -

(b) Long - term provisions 7 1,744,800 414,187

126,513,800 4,14,187

5. Current liabilities

(a) Short term borrowings 8 489,509,523 -

(b) Trade payables

(i) Total outstanding dues of

micro and small enterprises

- -

(ii) Total outstanding dues of

creditors other than micro

and small enterprises

9

115,996,085

100,505,711

(c) Other current liabilities 10 48,703,265 109,059,487

(d) Short - term provisions 11 8,656,351 5,165,009

662,865,224 214,730,207

Total

964,872,188 238,494,630


B. ASSETS

1. Non - current assets

(a) Fixed assets

(i) Tangible assets 12a 250,241,827 90,058,575

(ii) Intangible assets 12b 10,125,975 -

(iii) Capital work in progress 7,603,308 -

(b) Deferred tax asset 13 2,663,801 3,078,927

(c) Long-term loans and advances 14 19,23,420 -

272,558,331 93,137,502

2. Current assets

(a) Inventories 15 7,967,970 10,282,682

(b) Trade receivables 16 509,220,894 51,574,781

(c) Cash and cash equivalents 17 166,533,330 82,515,658

(d) Short - term loans and advances 18 7,383,308 439,664

(e) Other current assets 19 1,208,355 544,343

692,313,857 145,357,128

Total

964,872,188 238,494,630

See accompanying notes forming part of the financial statements 1

In terms of our report attached For and on behalf of the Board of Directors

For S.B. BILLIMORIA & CO.


Lavanya Kumari Bojja Sailaja Kampalle

Chairman Director

JITENDRA AGARWAL Dr. K. V. Prasad V. Nanda Kumar

Partner Director & Chief Executive Chief Financial Officer

N. Amarendra Babu

Company Secretary

Place:

Date:

Gurgaon Place: Tirupati

05 August, 2016 Date: 05 August, 2016



STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2016

_________________________________________________________________________________

Note

No.

Year ended 31

March, 2016

Period ended 31

March 2015

Rupees Rupees

1. Revenue from operations 20 2,834,172,143 1,380,922,954

2. Other income 21 4,360,441

______________

2,768,673

______________

3. Total revenue (1+2)

2,838,532,584 1,383,691,627

4. EXPENSES

(a) Cost of materials

consumed

22

62,704,295

-

(a) Purchases of stock-in-

trade

23

2,532,582,726

1,286,196,391

(b) Changes in inventories

of stock-in-trade

24

3,752,808

(6,517,126)

(c) Employee benefits

expense

25

45,111,509

18,279,414

(d) Finance costs 26 10,985,053 697,861

(e) Depreciation and

amortisation expense

12c

21,540,072

12,755,407

(f) Other expenses 27 133,066,805

_____________

66,140,071

_____________

Total expenses

2,809,743,268 1,377,552,017

5. Profit before tax (3-4)

28,789,316 6,139,610

6. Tax expense:

(a) Current tax

9,223,000 5,140,000

(b) Deferred tax

charge/(credit)

415,126

_________

(3,078,927)

_________

Net tax expense

9,638,126 2,061,073

___________ __________

7. Profit for the year/period (5-6)

19,151,190 4,078,537

8. Earnings per equity share:

(Nominal value Rs. 100 per

share)

(a) Basic 31 78.41 35.26

(b) Diluted 31 78.41 35.24


See accompanying notes forming part of the financial statements

In terms of our report

attached

For and on behalf of the Board of Directors

for

S.B.BILLIMORIA & CO.

Lavanya Kumari Bojja

Sailaja Kampalle

Chartered Accountants Chairman Director

Dr. K. V. Prasad V.Nandakumar

Director & Chief Executive Chief Financial

Officer

JITENDRA AGARWAL

Partner

N. Amarendra Babu

Company Secretary

Place : Gurgaon

Date : 05 August, 2016

Place : Tirupati

Date : 05 August, 2016



CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2016

__________________________________________________________________________________________________

Year ended 31 March, 2016

__________________________

Period ended 31 March 2015

__________________________

Rupees Rupees

A. CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax 28,789,316 6,139,610

Adjustments For :

Depreciation and amortization expense 21,540,072 12,755,407

Provision for employee benefits 1,593,244 414,187

Finance costs 10,887,749 361,035

Interest income (2,756,775) (604,670)

Operating Profit before working capital changes 60,053,606 19,065,569

Adjustments for movement in working capital:

Decrease/(increase) in inventories 2,314,712 (10,282,682)

(Increase) in trade receivables (457,646,113) (51,574,781)

(Increase) in short term loans and advances (6,943,644) (439,664)

(Increase) in long term loans and advances (1,923,420) -

Increase in trade payables 15,490,374 100,505,711

Increase in current liabilities 22,756,215 6,345,010

_________________ ________________

Cash generated from/(used in) operations (365,898,270) 63,619,163

Net income tax (paid) (10,278,366) (1,560,327)

Net cash flow from/(used in) operating activities - (A) (376,176,636) 62,058,836

B. CASH FLOW FROM INVESTING ACTIVITIES:

Bank balances not considered as Cash and cash

equivalents

(16,018,864)

(20,030,000)

Capital expenditure on fixed assets (net of capital

grant)

(183,715,681)

(99,505)

Interest received 2,092,763 60,327

Net cash flow (used in) investing activities - (B) (197,641,782) (20,069,178)

C. CASH FLOW FROM FINANCING ACTIVITIES:

Proceeds from issue of equity share capital 23,137,700 20,344,400

Share application money received - 151,600

Proceeds from issue of long term borrowings 134,769,000 -

Net increase/ (decrease) in short term borrowings 489,509,523 -

Finance costs paid (5,390,715) -

Dividend paid (1,200) -

Tax on dividend (207,081) -

Net cash flow from financing activities - (C) 641,817,227 20,496,000

Net increase in Cash and cash equivalents (A+B+C) 67,998,808 62,485,658

Cash and cash equivalents at beginning of the

year/period 62,485,658

-

Cash and Cash equivalents at the end of the year 130,484,466 62,485,658

Cash and cash equivalents comprises:

Cash in hand 217,158 106,169


Balances with banks:

- in current accounts 120,267,308 62,379,489

- in deposits of original maturity of less than 3

months 10,000,000

-

Cash and cash equivalents as per Cash Flow

Statement 130,484,466

62,485,658

See accompanying notes forming part of the financial statements

In term of our report attached For and on behalf of the Board of Directors

For S.B. BILLIMORIA & CO.

Chartered Accountants Lavanya Kumari Bojja Sailaja Kampalle

Chairman Director

Jitendra Agarwal

Dr. K. V. Prasad V. Nandakumar

Partner Director & Chief Executive Chief Financial Officer

N. Amarendra Babu

Company Secretary

Place: Gurgaon Place: Tirupati

Date: 05 August, 2016 Date: 05 August, 2016



Notes Forming Part Of The Financial Statements

_________________________________________________________________________________________________

Note 3: Share Capital

As at 31 March, 2016 As at 31 March, 2015

Number of Amount Number of Amount

Shares

______________

Rupees

________________

Shares

________

Rupees

_____________

(a) Authorised share capital 2,000,000 200,000,000

2,000,000 200,000,000

Equity Shares of Rs. 100 each

(b) Issued, subscribed and fully paid up

share capital 436,337 43,633,700 203,444 20,344,400

Equity Shares of Rs. 100 each

Refer Notes (i) to (iii) below

Notes:

(i) Rights, preferences and restrictions attached to shares

The Company has issued one class of equity shares having face value of Rs. 100 each. Each member is entitled to one vote.

Members are entitled to limited return (dividend) and bonus in accordance with Article of Association of the Company.

(ii) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the year/period:

As at and for year ended 31 March

2016

As at and for period ended 31

March 2015

Number of Amount Number of Amount

Shares

___________

Rupees

____________

Shares

____________

Rupees

______________

Shares outstanding at the beginning of

the year/period

203,444

20,344,400 - -

Shares issued during the year/ period 232,893 23,289,300 203,444 20,344,400

Shares outstanding at the end of the year/

period 436,337 43,633,700 203,444 20,344,400

(iii) The Company is registered under Part IXA of the Companies Act, 1956 as 'Producer Company' and none of the members holds

5% or more of the share capital of the Company.




________________________________________________________________________________

As at 31

March, 2016

As at 31 March,

2015

Rupees Rupees

Note 4 - Reserves and surplus

(a) General reserve

Opening balance 2,854,236 -

Add: Transferred from surplus in Statement of Profit

and Loss

13,899,544

__

2,854,236

__ _______

Closing balance 16,753,780 2,854,236

(b) Surplus in Statement of Profit and Loss

Opening Balance - -

Profit for the year/period 19,151,190 4,078,537

Less:

(i) Proposed limited return (dividend) 4,363,370 1,017,220

to members Rs. 10 per share (previous period

Rs.5 per share)

(ii) Tax on proposed limited return (dividend) 888,277 207,081

(iii) Transferred to General reserve 13,899,544 2,854,236

Closing balance - -

Total (a+b) 16,753,780 2,854,236

Note 5- Deferred Grant

(a) Capital grant utilised during year 138,676,964 -

(b)

Less: Depreciation pertaining to assets acquired

from grant

23,571,280

____________ -

(c) Closing balance 115,105,684 -



Notes forming part of financial statements

_______________________________________________________________________________________________

As at 31 March, 2016 As at 31March, 2015

Rupees Rupees

Note 6: Long-term borrowings

Secured

(a)

Term loan from National Dairy

Development Board (NDDB) 74,769,000 -

(b) Term loan from NDDB Dairy

Services 60,000,000 -

134,769,000 -

Less: current maturity of long term

borrowings 10,000,000 -

(see note 10) 124,769,000 -

(i) Details of Security provided in respect of secured long-term borrowings is as under:

(a)

Term Loan from National Dairy Development Board

First Charge on the entire fixed assets of the company present and future by way of hypothecation

including the immovable properties/fixed assets.

(b)

Term Loan from NDDB Dairy Services

First Charge on the fixed assets comprising data processor and milk collection centres of the company

present and future by way of hypothecation.

(ii) Details of terms of repayment for the long term borrowings is as under:

(a)

Term loan from National Dairy Development Board

The company has been sanctioned the loan of Rs.9,78,00,000 for 7 years with a moratorium period on

principal repayment of 2 years. The loan carries interest at 9% per annum. Loan is to be repaid in 60

equal monthly installments. Of the said loan, Rs. 7,47,69,000 has been disbursed during the current

year.

(b) Term loan from NDDB Dairy Services

The term loan is for a period of 4 years with moratorium on principal repayment of 1 year. The loan

carries interest at 9% per annum. Loan is repayable in 24 equal monthly installments. Note 7 - Long term provisions

(a) Provision for employee benefits

(i) For compensated absences 922,402

168,310

(ii) For gratuity 822,398

245,877

1,744,800

414,187

Note 8 - Short term borrowings

(a) Unsecured

(i) Bill discounting from banks 489,509,523

-

489,509,523

-



Notes forming part of financial statements

____________________________________________________________________________________________________

As at 31 March, 2016 As at 31March, 2015

Rupees

_______________

Rupees

Note 9 - Trade payables

(a) Trade Payables (other than acceptances) 115,996,085

100,505,711

(see note 35) 115,996,085

100,505,711

Note 10 - Other current liabilities

(a)

Current maturity on long term borrowings

(see note below)

10,000,000 -

(b)

Application money received for allotment of

security and due for refund

293,800 -

(c) Advances received from customers 515,295

-

(d) Interest accrued but not due on borrowings 5,240,303

-

(e)

Grant received ( net of utilisation) ( see Note

33) 9,069,493

-

(f) Trade security deposits received 17,712,195

5,620,429

(g) Others:

(i) Payable on purchase of fixed assets 3,345,720

102,714,477

(ii)

Statutory remittances ( Contribution

to PF, ESI, Service tax etc)

1,510,439

724,581

(h) Unclaimed/Unpaid dividends 1,016,020

-

48,703,265

109,059,487

Note: For details of security, refer to Note 6

Note 11 - Short term provisions

(a) Provision for employee benefits

(i) For compensated absences 139,588

-

(ii) For gratuity 123,043

-

(b)

Provision for income tax (net of advance tax

of 3,142,073

3,940,708

Rs.63,37,658 ; previous period Rs.15,60,327)

(c) Provision – others

(i) Provision for proposed limited return

(dividend) 4,363,370

1,017,220

(ii) Provision for tax on proposed limited

return 888,277

207,081

8,656,351

5,165,009




________________________________________________________________________

Note 12 - Fixed assets

Amount in Rupees

Particulars Gross block Accumulated depreciation Net block

As at April 1,

2015

Additions As at 31

March, 2016

As at April 1,

2015

For the year/

period

As at 31

March, 2016

As at 31

March, 2016

As at 31 March, 2015

(a)

Tangible

assets

(owned)

Building

1,159,960 -

1,159,960

96,663 96,757

193,420

966,540 1,063,297

(-)

(1,159,960)

(1,159,960) (-) (96,663)

(96,663)

(1,063,297) (-)

Plant and

equipment

99,496,089

152,268,972

251,765,061

12,567,369 30,274,005

42,841,374

208,923,687

86,928,720

(-)

(99,496,089)

(99,496,089) (-) (12,567,369)

(12,567,369)

(86,928,720) (-)

Furniture

and fixtures

177,985

6,168,083

6,346,068

6,800 3,970,706

3,977,506

2,368,562 171,185

(-)

(177,985)

(177,985) (-) (6,800)

(6,800)

(171,185) (-)

Computers

1,024,854

40,547,337

41,572,191

68,577 7,733,603

7,802,180

33,770,011 956,277

(-)

(1,024,854)

(1,024,854) (-) (68,577)

(68,577)

(956,277) (-)

Office

equipment

955,094

3,778,451

4,733,545

15,998 504,520

520,518

4,213,027 939,096

(-)

(955,094)

(955,094) (-) (15,998)

(15,998)

(939,096) (-)

Total

102,813,982

202,762,843

305,576,825

12,755,407 42,579,591

55,334,998

250,241,827 90,058,575

Previous

period (-)

(102,813,982)

(102,813,982) (-) (12,755,407)

(12,755,407)

(90,058,575) (-)

(b)

Intangible

assets

(other than

internally

generated)

Computer

software

-

12,657,736

12,657,736

- 2,531,761

2,531,761

10,125,975 -

(-) (-) (-) (-) (-) (-) (-) (-)

Total

-

12,657,736

12,657,736

- 2,531,761

2,531,761

10,125,975 -

Previous

period (-) (-) (-) (-) (-) (-) (-) (-)

Year ended Period ended

(c)

Depreciation and amortization 31 March, 2016 31 March,

2015

Tangible assets

42,579,591

12,755,407

Intangible assets

2,531,761

-

45,111,352

12,755,407

Less: Transferred to capital

reserve

23,571,280

-

21,540,072

12,755,407

Notes:

(i) Figures in brackets relates to previous period

(ii) The details of assets deployed out of capital grant and included in the table above are as below :


Particulars Gross block Accumulated depreciation Net block

As at 1

April, 2015

Additions As at 31 March ,

2016

As at 1

April, 2015

For the year As at 31

March , 2016

As at 31 March,

2016

As at 31 March, 2015

(D)

Tangible assets

(owned)

Plant and

equipment

-

76,538,868

76,538,868

-

9,506,517

9,506,517

67,032,351 -

Furniture and

fixtures

-

6,168,083

6,168,083

-

3,973,073

3,973,073

2,195,010 -

Computers

-

39,701,468

39,701,468

-

7,259,120

7,259,120

32,442,348 -

Office

equipment

-

3,648,968

3,648,968

-

356,072

356,072

3,292,896 -

Computer

Software

-

12,619,577

12,619,577

-

2,476,498

2,476,498

10,143,079 -

Total

- 138,676,964

138,676,964

-

23,571,280

23,571,280

115,105,684 -




______________________________________________________________________________________________

As at 31 March, 2016 As at 31 March, 2015

Rupees Rupees

Note 13 - Deferred tax asset

A. Tax effect of items constituting deferred tax

assets

a. Difference between book

balance and tax balance of

fixed assets

1,436,589

1,602,635

b. Provision for compensated absences

and gratuity

663,717

136,942

c. Disallowances under section 35D of

the Income Tax Act

399,888

533,185

d. Disallowances under section 43B of

the Income Tax Act

-

391,555

e. Disallowances under section

40(a)(i)(a) of the Income Tax Act

163,606

414,610

Deferred tax asset 2,663,801 3,078,927

Note 14- Long-term loans and advances

(Unsecured, considered good)

(a) Security deposits 1,923,420 -

1,923,420 -

Note 15 – Inventories

(At lower of cost and net realisable value)

(a) Raw and packing material 2,622,634 -

(b) Stock-in-trade: _____ _______ ___________

(i) Raw milk

966,890

2,890,967

(ii) Cattle feed 1,797,428 3,626,159

Sub-total (b) 2,764,318 6,517,126

(c) Stores and spares 2,581,018 3,765,556

7,967,970 10,282,682

Note 16 - Trade receivables


(a) Outstanding for a period less than six

months from

the date they were due for payment 509,220,894 51,574,781

509,220,894 51,574,781




_____________________________________________________________________________________________________

As at

31 March, 2016

As at

31 March, 2015

Rupees Rupees

Note 17 - Cash and cash equivalents

(a) Cash on hand 217,158 106,169

(b) Balance with banks:

(i) In current accounts 120,267,308 62,379,489

(ii) In deposit accounts

-original maturity of less than 3

months

10,000,000

-

Cash and cash equivalents as per AS 3 – Cash 130,484,466 62,485,658

flow statement

(d) Other bank balances

(i) In earmarked accounts

- Unpaid dividend accounts 1,016,020 -

(i) In deposit accounts

-original maturity of more than 3

months 35,032,844 20,030,000

166,533,330 82,515,658

Note 18 - Short - term loans and advances


(a) Advances to employees 371,362 -

(b) Prepaid expenses 590,903 397,664

(c) Advances to vendors 6,421,043 42,000

7,383,308 439,664

Note 19 - Other current assets


(a) Interest accrued on bank deposits 1,208,355 544,343

1,208,355 544,343




__________________________________________________________________________________________________

Year ended 31

March 2016

Period ended 31

March 2015

Rupees

Rupees

Note 20 - Revenue from operations

(a) Sale of products 2,834,172,143

1,380,922,954

(see note (i) below) 2,834,172,143

1,380,922,954

(i) Sale of products comprises:

a. Traded goods

(i) Raw milk 2,675,392,360

1,348,871,579

(ii) Cattle feed 78,026,713

32,051,375

2,753,419,073

1,380,922,954

b. Manufactured

(i) Polypack milk 80,753,070

-

80,753,070

-

2,834,172,143

1,380,922,954

Note 21 - Other income

(a) Interest income

(i) On deposits with banks 2,756,775

604,670

(b) Other non-operating income

(i) Membership fees 757,831

2,114,200

(ii) Miscellaneous income 845,835

49,803

4,360,441

2,768,673




_____________________________________________________________________________________

Note 22: Cost of materials consumed

Particulars Year ended

31 March, 2016

Period ended

31 March, 2015

Rupees Rupees

Raw and packing material

(a) Opening stock - -

(b) Add: Purchases 65,326,929 -

65,326,929 -

(c) Less: Closing stock

2,622,634

-

62,704,295 -

Note:

(i) Raw and packing material comprises:

a. Raw milk 62,240,861 -

b. Packing material 463,434 -

62,704,295 -

Note 23 - Purchases of stock-in-trade

(a) Raw milk 2,277,319,375 1,167,312,323

(b) Procurement expenses 180,631,229 83,979,537

(c) Cattle feed 74,632,122 34,904,531

2,532,582,726 1,286,196,391

Note 24 - Changes in inventories of stock-in-

trade

(a) Inventories at the beginning of the year/

period 6,517,126 -

(b) Inventories at the end of the year/ period 2,764,318 6,517,126

Net (increase)/decrease 3,752,808 (6,517,126)

Note 25 - Employee benefits expense

(a) Salaries and wages 40,867,567 16,534,581

(b) Contribution to provident fund 2,204,831 956,178

(c) Gratuity expense 699,564 245,877

(d) Staff welfare expenses 1,339,547 542,778

45,111,509 18,279,414




_____________________________________________________________________________________________________

Year ended 31 March,

2016

Period ended31

March, 2015

Rupees Rupees

Note 26 - Finance costs

(a) Interest expense on:

(i) Borrowings 10,631,018 -

(ii) Delayed payment of income tax 291,096 361,035

(b) Other borrowing costs 62,939 336,826

10,985,053 697,861

Note 27 - Other expenses

(a) Consumption of stores and spare parts 5,574,871 7,420,439

(b) Power and fuel 7,611,328 1,102,396

(c) Rent 13,440,631 810,572

(d) Repair and maintenance - buildings - 11,483

(e) Repair and maintenance - machinery 1,290,040 830,999

(f) Repair and maintenance - others 2,186,516 87,670

(g) Rates and taxes 968,548 120,139

(h) Freight, forwarding and distribution expenses 44,532,079 27,198,048

(i) Advertisement and promotion expenses 2,992,666 -

(j) Legal and professional fees 8,325,807 1,450,407

(k) Auditor's remuneration (see note (i) below) 983,858 570,000

(l) Travelling and conveyance 4,522,043 6,150,689

(m) Communication expenses 1,178,831 558,804

(n) Labour charges 31,150,227 13,043,774

(o) Preliminary expenses written off - 2,015,790

(p) Conversion charges 3,813,555 -

(q) AGM expenses 790,012 -

(r) Miscellaneous expenses 3,705,793 4,768,861

133,066,805 66,140,071

Note:

(i) Auditors' remuneration comprises:

a. Statutory audit fee 700,000 425,000

b. Tax audit fee 100,000 75,000

c. Out of pocket expense 55,771 -

d. Service tax on above 128,087 70,000

983,858 570,000




____________________________________________________________________________________________________

As at 31 March,

2016

As at 31 March,

2015

Rupees Rupees

Note 28 - Contingent liabilities and commitments (to the

extent not provided for)

A. Contingent Liabilities Nil Nil

B. Commitments

Estimated amount of contracts remaining to be executed

on capital account and not provided for 1,556,447 -

Note 29 - Employee benefit plans:

Defined-Contribution Plans

The Company makes contributions to Provident Fund and Pension Fund for qualifying employees, which are

defined contribution plans. Under the schemes, the Company is required to contribute a specified percentage of the

payroll costs to fund the benefits. The contributions payable by the Company are at rates specified in the rules of

the schemes.

The Company has recognized Rs. 22, 04,831 (Previous Period Rs. 956,178) for Provident Fund contribution in the

statement of profit and loss.

Defined benefit plan

The Company offers its employees defined-benefit plan in the form of a gratuity scheme (a lump sum amount).

Benefits under the defined benefit plan is based on years of service and the employee’s compensation (immediately

before separation). The gratuity scheme covers all regular employees. Actuarial valuation is done based on

“Projected Unit Credit” method. Gains and losses of changed actuarial assumptions are charged to the Statement

of Profit and Loss.

The following tables set out the status of defined benefit scheme in respect of gratuity:

i. Change in defined benefit obligation 31 March, 2016

31 March, 2015

Rupees

Rupees

Present value of obligation at the beginning of year/

period 245,877

-

Current service cost 676,713

245,877

Interest cost 47,783

-

Actuarial (gain)/loss (24,932)

-

Present value of obligations at the end of the year/

period 945,441

245,877

ii. Amount recognised in the Balance Sheet

31 March, 2016

31 March, 2015

Rupees

Rupees

Present value of defined benefit obligations 945,441

245,877

Fair value of plan assets - -

Net liability/(asset) recognised in the balance sheet 945,441

245,877


The scheme is unfunded, hence plan assets are Nil.

iii. Expense recognised in the Statement of Profit and

Loss

31 March, 2016 31 March, 2015

Rupees

Rupees

Current service costs 676,713

245,877

Interest cost 47,783

-

Net actuarial (gain)/loss recognized during the year/

period (24,932)

-

Expense recognized in the Statement of Profit and Loss 699,564

245,877

iv. Balance Sheet reconciliation 31 March, 2016

31 March, 2015

Rupees

Rupees

Net liability/(asset) at the beginning of the year/ period 245,877

-

Expense as above 699,564

245,877

Net liability at the end of the year/ period 945,441

245,877

v. Principal actuarial assumptions 31 March, 2016 31 March, 2015

Discount rate 8.00% p.a 8.00% p.a

Expected salary escalations 6.00% p.a 5.00% p.a

Expected return on plan assets N.A N.A

Attrition rate

Below 25 Years 8% 8%

26 to 30 Years 7% 7%

31 to 35 Years 6% 6%

36 to 40 Years 5% 5%

41 to 45 Years 4% 4%

46 to 50 Years 3% 3%

51 to 55 Years 2% 2%

Above 56 Years 1% 1%

Mortality table used IALM 2006-08 IALM 2006-08

Ultimate Ultimate

The discount rate is based on prevailing market yields of Government of India securities as at the balance sheet

date for the estimated term of obligation.

The estimates of future salary increases considered, takes into account the inflation, seniority, promotions,

increments and other relevant factors.

vi. Experience adjustment 31 March, 2016 31 March, 2015

Rupees Rupees

Present value of DBO 945,441 245.877 245,877

Fair value of plan assets - -

Funded status 945,441 245,877

(Gain)/loss on obligations (24,932) -

Gain/(loss) on plan assets - -


Compensated absences

Principal actuarial assumptions 31 March, 2016 31 March, 2015

Discount rate 8.00% p.a 8.00% p.a

Expected salary escalations 6.00% p.a. 5.00% p.a.

Expected return on plan assets N.A N.A

Attrition rate

Below 25 years 8% 8%

26 to 30 years 7% 7%

31 to 35 years 6% 6%

36 to 40 years 5% 5%

41 to 45 years 4% 4%

46 to 55 years 3% 3%

Above 56 years 2% 2%

1% 1%

Mortality table used IALM 2006-08 IALM 2006-08

Ultimate Ultimate

The discount rate is based on prevailing market yields of Government of India securities as at the balance sheet date for

the estimated term of obligation.

The estimates of future salary increases considered, takes into account the inflation, seniority, promotions, increments

and other relevant factors.




______________________________________________________________________________________

Note 30 - Leasing arrangements

The Company has taken certain properties, equipment and vehicles under operating lease which can be renewed on

mutually agreed terms and conditions. The lease rental expenses of Rs. 13,440,631 (Previous Period Rs. 810,572) in

respect of obligation under operating leases have been recognized in the statement of profit and loss.

Minimum lease payment during the non-cancellable period is as under:

Particulars As at 31 March, 2016 As at 31 March, 2015

(Rupees) (Rupees)

Payable not later than one year 2,086,224 -

Payable later than one year but not later than

five years 2,955,484

-

Note 31 - Earnings per share

Particulars Unit

Year ended 31

March, 2016

Period ended 31

March, 2015

Net profit after tax Rupees 19,151,190

4,078,537

Weighted average number of equity shares

outstanding during year/ period Numbers 244,255 115,664

Nominal Value of Equity Shares Rupees 100

100

Basic Earnings per Share Rupees 78.41

35.26

Effect of allotment against share application

money Numbers -

56

Equity shares used to compute diluted

earnings per share Numbers 244,255

115,720

Diluted Earnings per Share Rupees 78.41

35.24




______________________________________________________________________________________________

Note No. 32 - Related party

disclosures

A. Name of the related party and nature of relationship

Nature of Relationship Name of person

Key Management Personnel: Dr. K V Prasad – Chief Executive

B. The nature and volume of transactions during the year with the above related

party are as follows:

Nature of transactions Amount (Rupees)

Managerial remuneration

2,250,000

(1,280,230)

Note: Figure in bracket represents previous period.

Note No. 33 - Details of grants

Year ended 31 March,

2016

Period ended 31 March,

2015

Details of grants received from

NDDB and its utilization is as

under:

(Rupees) (Rupees)

(a) Grant received during year

189,418,000 -

(b) Utilised during year

(i) For capital assets

138,676,964 -

(ii) For revenue expenses

41,671,543 -

Total utilisations (i)+(ii)

180,348,507 -

(c) Balance carried forward

9,069,493 -

Note:-

Grant utilised for purchase of capital assets has been recorded as deferred grant and revenue grant utilised has

been netted off with respective expense (see note 2k).

Note 34: The disclosures as required under Accounting Standard AS-17 on Segment reporting are not required as the

Company primarily deals in single business segment of Milk and Milk Products and operates in one

geographical area.


Note 35: According to the information available with the Management, on the basis of intimation received from suppliers,

regarding their status under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), there are

no suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) therefore

Company has no amounts due to Micro and Small Enterprises under the said Act.

Note:36

Previous period figures are for the period 03 July 2014 (date of incorporation of company) to 31 March 2015, hence are not

strictly comparable with current year.

Previous period's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's

classification/ disclosure.

For and on behalf of the Board of Directors

Lavanya Kumari Bojja Sailaja

Kampalle

Chairman

Director

Dr. K. V. Prasad

V. Nandakumar

Director & Chief Executive Chief Financial

Officer

N. Amarendra Babu

Company Secretary

Place: Tirupati


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