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.