CONTENTS BOARD OF DIRECTORS Managing Director Directors Brig.(Dr.) Kapil Mohan, Shri Vinay Mohan...

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1 CONTENTS Board of Directors 2 Directors’ Report 3 Ten Years’ Highlights 24 Sources & Uses of Funds 25 Auditors’ Report 26 Balance Sheet 30 Profit & Loss Account 31 Cash Flow Statement 32 Schedules Annexed to the Accounts 34

Transcript of CONTENTS BOARD OF DIRECTORS Managing Director Directors Brig.(Dr.) Kapil Mohan, Shri Vinay Mohan...

Page 1: CONTENTS BOARD OF DIRECTORS Managing Director Directors Brig.(Dr.) Kapil Mohan, Shri Vinay Mohan VSM(Retd.) Ph.D. Shri L.K. Malhotra Deputy Managing Director Shri Hemant Mohan Shri

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CONTENTS

Board of Directors 2

Directors’ Report 3

Ten Years’ Highlights 24

Sources & Uses of Funds 25

Auditors’ Report 26

Balance Sheet 30

Profit & Loss Account 31

Cash Flow Statement 32

Schedules Annexed to the Accounts 34

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BOARD OF DIRECTORS

Managing Director Directors

Brig.(Dr.) Kapil Mohan, Shri Vinay Mohan

VSM(Retd.) Ph.D.

Shri L.K. Malhotra

Deputy Managing Director

Shri Hemant Mohan Shri J.K. Jain

Financial Director Shri Swaraj Suri

Shri P.D. Goswami, F.C.A., F.C.S.

Shri D.S.Yadava

Secretary

Shri H.N. Handa, Shri M. Nandagopal

B.Com., F.C.A., F.C.S., A.M.C.I.A.(London)

Statutory Auditors Bankers:

A.F. Ferguson & Co., Punjab National Bank

Chartered Accountants,

New Delhi. Advocates & Barristers:

Koura & Company,

New Delhi.

Registered Office: Registrar & Transfer Agents:

Solan Brewery P.O. M/s. Beetal Financial & Computer

(Shimla Hills) Services (P) Ltd.,

Himachal Pradesh Beetal House, 3rd floor, 99, Madangir,

Pin-173214. Behind Local Shopping Centre,

Near Dada Harsukhdas Mandir,

New Delhi-110062.

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DIRECTORS’ REPORT :

TO THE MEMBERS :

The Directors present their 76 th Annual Report on the business and operations of the Company with theAudited Statement of Accounts for the year ended 31st March, 2010 together with the report of Auditors,Messrs. A.F. Ferguson & Co.

FINANCIAL RESULTS:

Year ended Year endedMarch 31, 2010 March 31, 2009

Rs. Rs.

Total sales and other Income 3,95,09,35,761 4,43,98,35,689*

Less: Excise duty 84,25,01,891 1,38,91,22,285

Net Sales & other income 3,10,84,33,870 3,05,07,13,404

Less: Total Expenditure excluding interest and depreciation 3,02,74,86,829 2,91,78,08,793

Profit/(Loss) for the year before depreciation,

Interest and tax: 8,09,47,041 13,29,04,611

Depreciation 4,65,48,119 4,40,33,367

Profit/(Loss) for the year before interest and tax 3,43,98,922 8,88,71,244

Interest 7,95,65,274 8,25,84,070

Profit/(Loss) for the year before tax (4,51,66,352) 62,87,174

Provision for - Current tax - 19,00,000- deferred tax charge (credit) (1,17,43,805) (39,52,238)

- fringe benefit tax - 44,75,719

Profit/(Loss) for the year after tax (3,34,22,547) 38,63,693

Excess provision for taxation relatingto earlier years written back (net) (23,06,176) 2,91,949

Profit/(Loss) for the year (3,11,16,371) 35,71,744

Balance brought forward from previous year 24,85,66,439 24,49,94,695

Profit/(Loss) available for appropriation 21,74,50,068 24,85,66,439

APPROPRIATIONS:

1. Proposed Dividend - -

2. Tax on proposed Dividend - -

3. Balance carried to Balance Sheet 21,74,50,068 24,85,66,439

21,74,50,068 24,85,66,439

* Other income includes profit on sale of Fixed Assets.

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RESULTS:

Although the net Sales and other income of the Companystood higher at Rs.3,10,84,33,870 during the year underreport, as compared to Rs.3,05,07,13,404 during previousyear, there has been loss of Rs.4,51,66,352 for the yearbefore tax.

The Company had to introduce Voluntary RetirementScheme at its Lucknow Distillery for its employees sinceit was incurring heavy losses and consequently had topay Rs.5.62 crores inclusive of additional liabilitiestowards leave encashment, gratuity etc., and amortisedamount arising pursuant to the said VRS, which hasmainly contributed to the loss during the year underreport.

However, various measures undertaken to strengthenoperations, cost reduction to improve bottom lineincluding the Voluntary Retirement Scheme introducedfor the employees shall result in improvement in profit inthe near future.

DIVIDEND:

No dividend is recommended for the year ended31.3.2010.

DIRECTORS:

In accordance with provisions of the Companies Act, 1956and the Company’s Articles of Association, Shri SwarajSuri and Shri D.S. Yadava Directors of the Company retireby rotation and being eligible offer themselves for re-appointment. We recommend their re-appointments astheir advice from time to time has proved beneficial in theinterest of the Company.

RE-APPOINTMENT OF FINANCIAL DIRECTOR:

The term of appointment of Financial Director Shri P.D.Goswami will expire on 9th September, 2010. Keeping inview his vast experience, the Board has recommendedhis re-appointment for a further period of 2 years on certainterms and conditions w.e.f. 10th September, 2010 andthe proposal for his re-appointment is being placed inthe forthcoming Annual General Meeting of the Company,for its approval.

AUDITORS:

Messrs A.F. Ferguson & Co., Chartered Accountants,will retire at the conclusion of the forthcoming AnnualGeneral Meeting. They being eligible offer themselvesfor re-appointment.

Messrs Mohan & Co., Chartered Accountants, for the

audit of accounts of the Company’s Lucknow Branchwill also retire at the conclusion of the forthcoming AnnualGeneral Meeting. They being eligible, offer themselvesfor re-appointment.

ANNEXURE TO THE AUDITORS’ REPORT:

The observations made by the Auditors, have alreadybeen fully explained in the notes attached to the Accountsand therefore do not call for any further comments underSection 217(3) of the Companies Act, 1956.

COST AUDIT:

The Cost Audit in respect of Industrial Alcoholmanufactured by the Company was ordered to be carriedout every year by the Central Government since 1989which the company has been doing since then. Asproduction of Industrial Alcohol at Lucknow Distillery hasbeen stopped w.e.f. 7th January, 2009, the Company hasmoved the Central Government for withdrawal of its orderfor carrying out the Cost Audit. M/s. K.S. Bhatnagar &Associates, Cost Auditors, appointed by the Companyand approved by the Central Government, to carry outcost audit, have submitted their NIL Report for the yearended 31st March, 2010 to the Company and the CentralGovernment.

FIXED DEPOSITS:

As on March 31, 2010 the total number of Fixed DepositAccounts numbering 282 amounting to Rs.63,20,000/-have become due for payment but the depositors havenot claimed or sent instructions for renewal.

TRANSACTIONS WITH NATIONAL CEREALSPRODUCTS LIMITED:

The purchases made by the Company during the yearincluded purchases aggregating to Rs.7,49,60,862/- madefrom National Cereals Products Ltd., which has beenmanufacturing the bulk requirements of barley malt forthe last more than five decades. The Company holds341352 shares (approx.26%), while the Mohan Familyholds 366310 shares (approx. 28%) (including 48,536shares (3.69%) held by Brig.(Dr.) Kapil Mohan, VSM(Retd.) Ph.D., Managing Director) of the total shares ofNational Cereals Products Ltd., Mrs. Comilla Mohan,Sister-in-law of Brig.(Dr.) Kapil Mohan, VSM (Retd.)Ph.D., is the Managing Director of National CerealsProducts Limited.

INSURANCE:

The Company’s assets have been adequately insured.

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PARTICULARS OF EMPLOYEES AS REQUIREDUNDER SECTION 217(2A) OF THE COMPANIES ACT,1956 AND RULES MADE THEREUNDER:

The particulars of employees required to be furnishedunder Section 217(2A) of the Companies Act, 1956, readwith the Rules thereunder, forms part of this Report.However, as per the provisions of Section 219(1)(b)(iv) ofthe Companies Act, 1956, the Report and Accounts arebeing sent to all the Shareholders of the Companyexcluding the statement of particulars of employees. AnyShareholder interested in obtaining a copy may write tothe Company Secretary at the Registered Office of theCompany.

The Cash Flow Statement for the year 2009-2010 isattached to the Balance Sheet.

ENERGY CONSERVATION TECHNOLOGYABSORPTION & FOREIGN EXCHANGE:

Information pursuant to Section 217 (1)( e ) of theCompanies Act, 1956 read with the Companies(Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988 is given in Annexure forming partof this Report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 217(2AA) of theCompanies Act, 1956, and based on the representationsreceived from the operating management and after dueenquiry the Directors hereby confirm that:

a) In the preparation of the Annual Accounts, theapplicable Accounting Standards have beenfollowed.

b) They have selected such accounting policies inconsultation with the statutory auditors and appliedthem consistently and made judgments andestimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of theCompany at the end of the financial year and of theLoss of the Company for the financial year.

c) They have taken proper and sufficient care to thebest of their knowledge and ability for themaintenance of adequate accounting records inaccordance with the provisions of the CompaniesAct, 1956. They confirm that there are adequatesystems and controls for safeguarding the assetsof the Company and for preventing and detectingfraud and other irregularities; and

d) They have prepared the Annual Accounts on agoing concern basis.

CORPORATE GOVERNANCE:

As required by Clause 49 of the Listing agreement,separate report on the Corporate Governance andManagement Discussion and Analysis is attached asa part of this Annual Report.

Certificate of Practising Company Secretary regardingcompliance of the conditions of Corporate Governanceas stipulated in Clause 49 of the Listing Agreement ofthe Stock Exchanges is also attached and forms a partof the Annual Report.

CURRENT TREND:

The sales of the Company’s products for the first quarterof the current year are lower by 2.25 % as compared tothe corresponding period of the year under review. TheCompany is taking all necessary steps to increase itssales and it is expected that the measures being takenwill bring the desired results barring unforeseencircumstances.

INDUSTRIAL RELATIONS:

Management employees relation throughout the yearhave been very cordial as has been the case for the lastmany years. Except one, all the Units of the Companyfunctioned smoothly and without interruption. Thecontinuous healthy relationship is due to far-sighted policyof your Managing Director Brig. (Dr) Kapil Mohan, VSM(Retd.) Ph.D.

Brig.(Dr) Kapil Mohan Managing Director

VSM (Retd.)Ph .D.

Shri Hemant Mohan Deputy Managing Director

Shri P.D. Goswami Financial Director

Shri J.K. Jain Director

Shri Sawraj Suri Director

Shri D.S. Yadava Director

Shri L.K.Malhotra Director

Shri M. Nandagopal Director

Mohan Nagar12th August, 2010.(Ghaziabad) U.P.

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Annexure Forming part of the Directors’ Report

Particulars under Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, forthe year ended March 31, 2010

Conservation of energy

(a) Energy conservation measures taken :Mohan Nagar1. Breakfast Food Unit1.1 New generation Maize Grits Cooker has been erected and commissioned. This will reduce

steam consumption and electricity consumption. That means the specific steamconsumption in K.Cal/ Kg. of grits cooked and specific electrical energy in Kwh / Kg. ofgrits cooked will be reduced.

1.2 High Capacity Cooked Grits Dryer has been erected and commissioned. This will reducethe Specific Thermal Energy in K.Cal/ Kg and Specific Electrical Energy in Kwh/ Kg gritsdried.

2. Brewery Unit2.1 Two numbers of Stainless Steel Cylindro Conical Type unit tanks have been installed and

commissioned. This will reduce the specific refrigeration load per HL of Beer fermented interms of Specific Electrical energy consumed in Kwh/ Ton of refrigeration and indirectly theenergy consumed for cooling in terms of specific electrical energy consumed in Kwh/ HLof Beer fermented.

2.2 Four numbers of jacketed Beer Bottling Tanks (BBT) have been erected and commissioned.Earlier BBT Hall used to be cooled and kept at 1 to 2 Degree C by using Cooled Air tomaintain temperature of Beer in BBTs. The Electrical Energy consumption was very highin this case. By installing Jacketed BBTs, the Electrical Energy consumed in terms specificelectrical energy consumed in Kwh / HL of beer for cooling and maintaining the temperatureof Beer in BBTs has been reduced.

(b) Additional investment and proposals, if any, being implemented for reduction of consumption ofenergy

1. Breakfast Food Unit1.1 Quotations are being procured for the following equipment for reduction of energy consumed

of Grits Drying, flaking of grits and Toasting of raw flakes.1.1.1 Horizontal Grits Dryer with exhaust air recycling for drying of cooked grits.1.1.2 High efficiency Flaker for flaking of grits.1.1.3 Horizantal Toaster with exhaust air recycling for toasting of Raw Flakes.

By installing the above mentioned equipment there will be considerable reduction in the specificfuel (thermal energy) and electrical energy consumption could be achieved in grits drying flakingand toasting by installing energy efficient and high capacity Dryers, Flakes and Toasters.After obtaining the quotations for these equipment, decision will be taken for procuring and installingthem.

(c) Impact of (a) & (b)

1. The above measures taken will result in the reduction of energy consumed and consequently in thecost of production of finished goods.

2. There will be saving due to reduction in the energy consumption on the completion of the abovemeasures which will result in reducing the production of finished goods.

(d) Total energy consumption per unit of product has been given in prescribed Form ‘A’.

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FORM ‘A’

Form for disclosure of particulars with respect to consumption of energy

(A) POWER AND FUEL CONSUMPTION:Glass Juice & Canned Maize Rice, Cold Storage

Bottles Products Corn Flakes &Wheat Porridge

1. Electricity

a) PurchasedUnits (KWH) 44,89,639 15,967 6,60,929 3,21,116

(-) (-) (-) (1,09,770)Total amount (Rs.) 1,88,86,000 70,095 29,01,478 14,79,781

(-) (-) (-) (4,78,630)Rate/unit (Rs.) 4.21 4.39 4.39 4.61

(-) (-) (-) (4.36)

b) Own generationThrough Generator (H.S.D./L.D.O./F.O.)Units (KWH) 17,29,460 5,750 2,48,594 1,00,171

(66,75,218) (23,230) (10,18,100) (3,04,325)Units per Litre of Oil 2.81 2.60 2.60 2.82

(3.17) (3.05) (3.05) (3.11)Cost/Unit (Rs.) 8.45 9.47 9.47 8.85

(8.11) (9.48) (9.48) (9.33)

2. L.D.O. Quantity (K.Ltrs.) - - - -

(10.345) (-) (-) (-) Total cost (Rs.) - - - -

(3,28,413) (-) (-) (-) Average rate per k.ltrs (Rs.) - - - -

(31,746) (-) (-) (-)

3. Furnace Oil Quantity (K.Ltrs.) - - - -

(108.762) (-) (-) (-) Total cost (Rs.) - - - -

(19,78,070) (-) (-) (-) Average rate per k.ltrs (Rs.) - - - -

( 18,187) (-) (-) (-)

4. L.P.G. Quantity (Tonnes) - - - -

(19.305) (-) (7.860) (-) Total cost (Rs.) - - - -

(5,36,226) (-) (2,32,188) (-) Averege rate per tonne (Rs.) - - - -

(27,777) (-) (29,540) (-)

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Glass Juice & Maize Rice, ColdBottles Canned Corn Flakes & Storage

Products Wheat Porridge

5. Natural Gas

Quantity (Cubic Meters) 54,79,280 - 7,21,533 -

(52,87,810) (-) (8,00,104) (-)

Total cost (Rs.) 7,80,61,512 - 1,03,31,531 -

(6,96,62,382) (-) (1,04,31,154) (-)

Average rate per cubic meter (Rs.) 14 - 14 -

(13) (-) (13) (-)

6. Steam Used from the Main Boiler House +

Total Cost (Rs.) - 11,33,760 98,49,104 -

(-) (14,50,168) (1,09,56,139) (-)

(B) CONSUMPTION PER UNIT OF PRODUCTION:

Standard Per tonne Per kl Per tonne Per tonne

(if any)

Electricity- units (KWH) - 232 38 255 -

(-) (249) (44) (295) (-)

L.D.O. (KL) - - - - -

(-) (0.00039) (-) (-) (-)

Furnace Oil (KL) - - - - -

(-) (0.00405) (-) (-) (-)

L.P.G. (Tonne) - - - - -

(-) (0.00072) (-) (0.0023) (-)

Natural Gas (Cubic Meters) - 204 - 202 -

(-) (197) (-) (232) (-)

Notes: (i) + The unit wise consumption of Coal, HSD and Natural Gas is not available as the steam has been

supplied to various production division from main boiler house.

(ii) The L.D.O., Furnace Oil and L.P.G. has been used only when the natural gas was available in scarcity.

(iii) Previous year figures are in brackets and modified wherever necessary.

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FORM ‘B’

Disclosure of particulars with respect to Technology Absorption and Technology Development

RESEARCH & DEVELOPMENT:

(a) The new grits making plant has been installed and commissioned successfully. It has been observed fromthe trials that the new grits making plant can be used for manufacturing grits from flat hybrid maize for CornFlakes production; however some modifications have to be carried out for optimizing the quality and yieldof grits of improving the quality of Corn Flakes produced.

(b) The study for producing sugar coated, fruits flavours coated and chocolate coated Corn Flakes has beensuccessfully carried out. The quotation from the indigenous plant fabricators have been obtained. The costof complete Plant & Machinery quoted by foreign suppliers were enormously high and therefore, we had tosearch for finding Indian Manufactures of the Plant for manufacturing coated flakes. After evaluating thetechnical capability of Indian Plant & Machinery Manufactures, it will be procured and installed and coatedCorn Flakes will be manufactured.

(c) Wheat Flakes have been manufactured at commercial level and marketed. The market reaction is beingstudied.

(d) Un-cooked Wheat Dalia has been successfully launched in the market. It has been well accepted byconsumers. The production and marketing is being carried out for the last one year and marketing is beingcontinued.

(e) The study has been completed for manufacturing malt extract from high percentage of rice, wheat and lowpercentage of malt. This will reduce the cost of production of malt extract further down ward. Later on, wehave been able to identify alterative raw materials and new technologies for manufacturing Malt Extract atreduced cost. The study for the optimizing the new process and use of alternative raw material is beingperused.

1. Technology absorption, adaptation and innovation:

Efforts which are being made towards technology absorption, adoption and innovation are:

(a) It has been possible to adopt technologies and processes successfully because the company hasexperienced Scientists and Engineers and also technical facilities for scaling up the processes tocommercial scale production.

(b) Study of flat maize varieties for manufacturing Corn Flakes has been completed. Corn flakes weremanufactured using flat maize for more than 8 months with the New Grits Mill. Although the production ofCorn Flakes with grits produced with flat maize using new grits mill was possible; however, problems ofyield and quality of Corn Flakes were observed. In the light of the observations and data collected from thetrials, the grits mill is being modified to obtain grits of proper quality and also to obtain optimum yield ofgrits of 5 mm and 4 mm size.

(c) Study is being continued to procure grits of 5 mm and 4 mm size from Maize Millers. This will help toproduce Corn Flakes directly from grits by eliminating in house milling of maize. The study on this projectis being continued.

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2. Benefit derived as a result of the above efforts:

(a) Increase of yield of Corn flakes.

(b) Improvement of quality of Corn flakes.

(c) Producing Corn flakes from flat hybrid maize.

(d) Possibility of producing Corn flakes of uniform size.(e) Reduction of cost of malt extract using high percentage of alternate raw materials instead of rice / wheat

with new type of additives and process.

3. Foreign exchange earnings and outgo:

The Company continues to treat exports as major thrust area. There has been 5% growth in terms of quantityand value. The demand of our product is continuously increasing and new customers are added to the list.

Total Foreign Exchange used and earned for current year in Rupees –- Foreign Exchange earned 7,79,83,337

- Foreign Exchange utilized

w On Import of Raw material, and Store & Spares 2,70,11,244

w On Business Travel 2,98,314 2,73,09,558

ANNEXURE TO THE DIRECTOR'S REPORT

CORPORATE GOVERNANCE REPORT:

1. CORPORATE GOVERNANCE PHILOSOPHY:

Your Company is committed to good Corporate Governance and endeavours to implement the Code of CorporateGovernance in its true spirit.

The Company firmly believes in transparency, professionalism, accountability, risk management and code of ethics,which are fundamental principles of Corporate Governance. The Company will constantly endeavour to improve onthese aspects on an ongoing basis.

Details of implementation of the Code as per amended Clause 49 follow in the paragraphs below .

2. BOARD OF DIRECTORS:

The Composition of the Board is in conformity with Clause 49 of the Listing Agreement. The Chairman of the Boardis the Managing Director who is an Executive Director and more than 50% total number of Directors are independent.The number of non-executive Directors is more than 50% of the total number of Directors. The Management of theCompany is entrusted in the hands of the Key Management Personnel of the Company and is headed by theManaging Director and the Chief Executive Officer who operates under the supervision and control of the Board. TheBoard reviews and approves policies/strategies and oversees the actions and results of Management to ensure thatthe long-term objectives of enhancing stakeholders values are met.

a) Number of Board Meetings:

The Board of Directors meets at-least once a quarter to review the Company’s performance and financial resultsand more often, if necessary, to transact other business. During the year ended 31st March, 2010 six BoardMeetings were held as against the minimum requirement of four Meetings. The dates on which the Meetingswere held are as follows:

13th April, 2009, 27th June, 2009, 30th July, 2009, 26th September, 2009, 28th October, 2009 and 29th January,2010.

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Name Status i.e. No. of Board Meetings Number of Membership Whetherpromoters, of the Company in other Boards or other attendedexecutive, Committees as a member the lastnon-executive, or chairperson AGMindependentnon-executive,nominee of Held Attended Board Committeefinancial during duringinstitution the year the year

Brig.(Dr.)Kapil Managing 6 6 4 2 as Member YesMohan, Director-VSM(Retd.)Ph.D Promoter

Shri Hemant Dy.Managing 6 4 1 - YesMohan Director-

Promoter

Shri P.D. Financial 6 4 - - YesGoswami Director

Shri Vinay Promoter 6 6 5 - YesMohan Non-Executive

Director

Shri L.K. Independent 6 3 9 1 as Member YesMalhotra Non-Executive

Director

Shri J.K. Jain Independent 6 5 5 2 as Member YesNon-Executive 1 as ChairmanDirector

Shri Swaraj Suri Independent 6 4 - - NoNon-ExecutiveDirector

Shri D.S.Yadava Independent 6 6 1 - YesNon-ExecutiveDirector

Shri M.Nandagopal Independent 6 4 12 1 as Chairman YesNon-Executive 1 as MemberDirector

b) Composition, Status, Attendance at the Boards Meetings and at the Last A.G.M.

As on 31st March, 2010 Company’s Board comprised of 9 members. The Chairman & Managing Director is anexecutive of the Company and two other members are Executive Directors, and out of the remaining 6 members,5 are independent non-Executive Directors. The names and categories of Directors, their attendance at theBoard Meetings held during the year and at the last Annual General Meeting are given below:

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1. There is no nominee director.

2. The Non-Executive Directors have no pecuniary relationship or transactions with the Company in their personalcapacity during the year 2009-2010 (other than the sitting fees for Board/Committee meetings).

3. As mandated by Clause 49, none of the Director is a member of more than ten Board level Committees nor isany of them a Chairman of more than five Committees in which they are members. The number of Directorshipsand Committee positions held by them in public companies are given above.

c) Board Procedure:

A detailed Agenda folder is sent to each Director in advance of Board and Committee Meeting. To enable theBoard to discharge its responsibility effectively , the Managing Director & Chief Executive of the Company briefsthe Board at every Meeting on the overall performance of the Company. A detailed operations Report is alsopresented at every Board Meeting. Amongst other things, the Board also reviews strategy and business plan,annual operating and capital expenditure budgets, remuneration of non-executive Directors, Compliance withstatutory/regulatory requirements and review of major legal issues, adoption of quarterly/half yearly/annualresults, risk management policy, investor’s grievances and minutes, major accounting provisions and write-offs, Corporate re-structuring , Minutes of Meeting of the Audit Committee and other Committees of Directors ofthe Board, etc.

3. Board Committees :

Standing Committees :

The Company has the following standing Committees of the Board :

(i) Audit Committee:

The Board of the Company has constituted an Audit Committee, comprising of three Independent Non-executive Directors.

The terms of reference of the Committee are in accordance with the requirements of Clause 49 of theListing Agreement as Section 292A of the Companies Act, 1956 is not applicable to the Company.

The Audit Committee has been granted powers as prescribed under Clause 49 II (C) of the Listing Agreement.Generally all items listed in Clause 49 II(D) are covered in the terms of reference and inter-alia include:

w Overview of the company’s financial reporting process and the disclosure of its financial information toensure that the financial statement is correct, sufficient and credible.

w Recommending to the Board, the appointment, re-appointment and, if required, the replacement orremoval of the statutory auditors and the fixation of their fees.

w Review of the internal control systems with the management, internal auditors and statutory auditors.

w Review with the management, the annual financial statements before submission to the Board forapproval, with special emphasis on accounting policies and practices, compliance and other legalrequirements concerning financial statements.

w Review the adequacy of internal audit function, significant internal audit findings and follow-ups thereon.

w Review Management Discussion and Analysis.

w Review Material Individual Transactions with related parties not in normal course of business or whichare not on an arms length basis.

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During the financial year ending 31st March, 2010, four meetings of the Audit Committee were held andattended by the committee members as under:

Name of Member Status No. of meetings attended

Shri L.K. Malhotra Chairman 2

Shri J.K. Jain Member 4

Shri Swaraj Suri Member 4

The Financial Director is permanent invitee and the Statutory Auditors, Main Internal Auditors and the CostAuditor are regularly invited to attend the Audit Committee meetings. The Company Secretary functions asthe Secretary of the Committee.

All the members of Audit Committee possess strong accounting/financial management knowledge.

(ii) Remuneration Committee :

Although it is not mandatory to set up a Remuneration Committee as per clause 49 Annexure 3 of theListing Agreement, yet for the sake of good corporate governance and transparency, the Board of Directorsformed a Remuneration Committee comprising of three members – all Independent Non-executive Directorsnamely Shri L.K. Malhotra, Shri Swaraj Suri and Shri D.S.Yadava. The terms of reference of the RemunerationCommittee, inter-alia, consists of the determination of the remuneration payable to the Executive Directors,recommendation for appointment/re-appointment of the Executive Directors, revision in the remunerationof the existing Executive Directors of the Company from time to time.

Remuneration of employees largely consists of basic remuneration/perquisites. The total remunerationvary for different cadres and are governed by industry pattern, qualifications and experience of the employees,responsibilities handled, individual performance etc. the objectives of the remuneration policy are tomotivate employees to excel in their performance, recognize their contribution, retain talent in the Organizationand reward merit.

During the year 2009-10 one meeting of the Remuneration Committee was held on 30.7.2009 which wasattended by the Committee Members as under :-

Name of Member Status No. of meetings attended

Shri L.K. Malhotra Chairman 1

Shri D.S. Yadava Member 1

Shri Swaraj Suri Member 1

Details of Directors’ remuneration paid for the year ended 31.03.2010 are as follows:

(a) Executive Directors:

Managing Director/Whole Salary Commission Perquisites Retirement-Time Director benefits

Rs. Rs. Rs. Rs.

Brig. (Dr). Kapil Mohan, 18,60,000 - 3,06,710.00 2,23,200VSM (Retd.)Ph.D.(re-appointed w.e.f.01.04.2010 for 3 years)

Shri Hemant Mohan 15,60,000 - 7,01,510.06 1,87,200(re-appointed w.e.f. 01.04.2010for 3 years)

Shri P.D. Goswami 8,73,500 - 5,84,297.00 1,04,820(appointed w.e.f. 10.09.2007for 3 years)

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1. Notice period for termination of appointment of Managing Director/Whole-Time Directors is six monthson either side.

2. No severance pay is payable on termination of appointment.

3. Your Company presently does not have a scheme for grant of stock options.

4. No sitting fee is paid to the Executive Directors for attending the Board Meeting or a Committee thereof.

(b) Non-Executive Directors:

The Company paid sitting fees to all the Non-executive Directors at the rate of Rs. 5,000/- for attending eachmeeting of the Board and/or Committee thereof. The sitting fees paid for the year ended 31st March, 2010are as follows and the No. of shares held by each of them as on that date is indicated against their names:

Name Sitting Fee No. of Shares

Shri Vinay Mohan Rs. 30,000 2,17,777Shri L.K. Malhotra Rs. 40,000 5,000Shri J.K. Jain Rs. 80,000 500Shri Swaraj Suri Rs. 45,000 450Shri D.S. Yadava Rs. 55,000 456Shri M. Nandagopal Rs. 20,000 500

However, no commission is payable due to inadequacy of profits during the year under report.

(iii) Shareholders’ Grievance Committee:

(a) Composition:

The Board of the Company has constituted a Shareholders’/Investors’ Grievance Committee, comprising ofthree Independent Non-executive Directors.

(b) Terms of reference:

The Committee, inter alia, approves issue of duplicate share certificates and oversees and reviews all mattersconnected with the securities transfers. The Committee also looks into redressal of shareholders’ complaintslike transfer/transmission of shares, non-receipt of balance sheet/dividends/interest, and any other relatedmatter. The Committee also oversees the performance of the Registrar and Transfer Agents, and recommendsmeasures for overall improvement in the quality of investor services. The transfer of shares is signed by any oneof the Directors and the Company Secretary and is subsequently approved in the next Board Meeting.

Insider Trading:In compliance with the SEBI regulation on prevention of insider trading, the Company has instituted acomprehensive Code of Conduct for Prevention of Insider Trading for its designated employees. The Codelays down guidelines, which advises them on procedures to be followed and disclosures to be made whiledealing with shares of the Company and cautioning them of the consequences of violations.

Shri H.N. Handa, Company Secretary is the Compliance Officer for complying with the requirements of theSecurities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and in his absenceShri R.C. Jain, Addl. Secretary of the Company is the Compliance Officer.

During the year, the Committee had four meetings which were attended by the Committee members as under:

Name of the Member Status No. of meetings attendedShri L.K. Malhotra Chairman 2Shri J.K. Jain Member 4Shri D.S. Yadava Member 4

The total number of complaints received and replied to the satisfaction of shareholders during the year underreview, were 15. Outstanding complaint as on 31st March, 2010 was 1. No request for transfer was pendingas on 31.3.2010.

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(c) General Body Meeting:

Location and time for last 3 Annual General Meetings were as follows :

Financial year Date Time Place

2006-2007 29.9.2007 11 A.M. Solan Brewery (H.P.)2007-2008 27.9.2008 11 A.M. Solan Brewery (H.P.)2008-2009 26.9.2009 11 A.M. Solan Brewery (H.P.)

Special Resolutions passed in last 3 Annual General Meetings:

The shareholders of the Company have passed the following special resolutions in the last 3 Annual GeneralMeetings:

73rd Annual General Meeting held on 29th September, 2007:

Re-appointment of Shri P.D. Goswami as Financial Director of the Company.

74th Annual General Meeting held on 27th September, 2008:

No Special Resolution was passed at the 74th Annual General Meeting.

75th Annual General Meeting held on 26th September, 2009:

1. Re-appointment of Brig. (Dr) Kapil Mohan, VSM (Retd.) Ph.D., as Managing Director of the Company.

2. Re-appointment of Shri Hemant Mohan, as Deputy Managing Director of the Company.

No Extra-ordinary General Meeting (EGM) was held during the last three years except the EGM through PostalBallot held on 11.4.2008.

No special resolutions were required to be put through postal ballot last year.

No special resolutions on matters requiring postal balloting are being placed for shareholders’ approval atthe forthcoming 76th Annual General Meeting.

(d) Disclosures:

1. There is no subsidiary Company.

2. During the financial year 2009-10, there were no materially significant transactions entered into betweenthe Company and its Promoters, Directors or the Management, subsidiaries or relatives etc., that mayhave potential conflict with the interest of the Company at large. Further details of related party transactionsare presented in the Notes to the Accounts No13 Para 11(B) appended in the Annual Accounts of theAnnual Report.

3. There has not been any non-compliance, penalties or strictures imposed on the Company by the StockExchanges, SEBI or any other Statutory authority on matters related to Capital Markets, during last threeyears.

4. No Director is related to any other Director on the Board except Shri Hemant Mohan and Shri Vinay Mohanwho are brothers and are also nephews (brother’s sons) of Brig. (Dr) Kapil Mohan, VSM (Retd. )Ph.D.

Whistle Blower Policy:

The Company promotes ethical behaviour in all its business activities.Employees are free to report anyviolation of Laws, Rules, Regulations or Un-ethical conduct to their superiors. The Managing Director andthe other Executive Directors maintain confidentiality of such reporting and the persons reporting areprotected and not subjected to any discriminatory practices and it is affirmed that no personnel has beendenied access to the Audit Committee.

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(e) Disclosure of Accounting Treatment:

The financial statements are prepared under the historical cost convention in accordance with GenerallyAccepted Accounting Principles in India, the Accounting Standards issued by the Institute of CharteredAccountants of India and the provisions of the Companies Act, 1956.

(f) Means of Communication:

Quarterly, half-yearly and yearly results are published in the national dailies, i.e. The Indian Express(English) and The Dainik Tribune (Hindi) circulating in the region where the Registered Office of the Companyis located.

So far the Company’s results could not be made available on the Web-site. There is no practice of theCompany to send half-yearly report to the shareholders. The Company does not display official newsreleases and no presentations are made to Institutional Investors.

Management’s Discussion and Analysis forms part of the Annual Report which is being mailed to theshareholders of the Company.

4. General shareholders information:

1. 76th Annual General Meeting is proposed to be held on 30th September, 2010 at the Registered Office ofthe Company at Solan Brewery at 11 A.M.

2. Financial Calendar: (Tentative and subject to change)

Accounting year April – MarchAnnual results of previous year End MayMailing of Annual Reports End AugustAnnual General Meeting 30th September, 2010Payment of Dividend Within the statutory time limit of 30 days subject to

Shareholders approval.*First quarter results Mid August*Second quarter results Mid November*Third quarter results Mid February* Annual results (Audited) End May

*The above calendar is effective from 1st April, 2010 as per amended clause of the Listing Agreement.

3. Listing of equity shares on Delhi Stock Exchange Association Ltd., (Stock Code DSE: 00032) andCalcutta Stock Exchange Association Ltd., (Stock Code CSE: 10023333).

Listing Fee for 2009-10: The annual Listing Fee has been paid to both the Stock Exchanges.

4. Stock Market Data for the year 2009-2010:

Mohan Meakin shares are quoted on Delhi and Calcutta Stock Exchanges:

During the period from 1.4.2009 to 31.3.2010 no quotations were received and the Company did not receiveany response to its letters about the trading of shares for the financial year ending 31st March, 2010 fromthe Delhi Stock Exchange Association Ltd., Delhi. However, in reply to the letter the Company had writtento Calcutta Stock Exchange Association Ltd., Kolkata where the shares of the Company are listed, theyhave sent computerized statement showing trade details of the equity shares of the Company, where therate of Company’s shares was quoted at Rs.31.50 per share of Rs.5.00 each.

Depositories National Securities Depository Ltd.Central Depository Services (I) Ltd.

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Registrar and Share Transfer Agent:

M/s. Beetal Financial & Computer Services (P) Ltd., Beetal House, 3rd Floor, 99, Madangir, Behind Local

Shopping Centre, Near Dada Harsukhdas Mandir, New Delhi-110 062 are the Company’s Registrar and Share

Transfer Agent (R&TA) . The aforesaid R&TA acknowledges and executes transfer of securities, arranges for

issue of dividend warrants etc.

The aforesaid R&TA deals with and resolves complaints of shareholders.They also dispatch the Annual Balance

Sheet to all the Shareholders.

Share Transfer System:

Shares which are received in physical form are processed, transferred and returned within a period of 10 to 15

days from the date of receipt, subject to the documents being valid and complete in all respects. The Company

has, as per SEBI guidelines with effect from 26th March, 2001 offered the facility of transfer cum demat also. As

on date there are no pending share transfers pertaining to the year under review.

Distribution of shareholding as on 31st March, 2010:

No. of shares No. of % of share- Share- % of share-

Shareholders holders holdings holdings

Upto 1000 6136 93.20 541086 6.36

1001-2000 210 3.19 157437 1.85

2001-4000 86 1.31 130789 1.54

4001-6000 45 0.68 116212 1.37

6001-8000 14 0.21 48799 0.57

8001-10000 12 0.18 57032 0.67

10001-20000 24 0.36 167651 1.97

20001 and above 57 0.87 7289473 85.67

6584 100.00 8508479 100.00

Shareholding pattern as on 31st March, 2010:

Category No. of shares held % of shareholdings

Promoters holding 56,05,846 65.89

Banks, financial institutions,

Insurance Companies, Central/State Govts.,

Mutual Funds & UTI etc. 7,34,993 8.64

Private Corporate Bodies 5,12,891 6.03

NRI/OCBs 3,83,184 4.50

General Public 12,71,565 14.94

85,08,479 100.00

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Dematerialisation of shares :

As on 31st March, 2010, 43.67% of the Company’s total shares representing 3715275 shares were held indematerialized form and the balance 56.33% representing 47,93,204 shares in paper form.

The Company has not issued any GDRs/ADRs warrants or non-convertible instruments, which are pendingfor conversion.

Secretarial Audit:As stipulated by the Securities and Exchange Board of India (SEBI) and the Stock Exchanges a qualifiedpracticing Company Secretary carries out the secretarial audit and provides a report to reconcile the totaladmitted capital with the National Securities Depository Limited (NSDL) and Central Depository Services (India)Limited (CDSL) and the total issued and listed capital. This audit is carried out every quarter and the reportthereon is submitted to the Stock Exchanges.

Plant locations :

The Company’s plants are located at Solan Brewery (H.P.), Mohan Nagar, Ghaziabad (U.P.), Lucknow(U.P.), Mohangram, Bhankarpur (Punjab) and Kasauli (H.P.)

Address for Correspondence :

The Shareholders may correspond with the Company at its registered office at Mohan Meakin Ltd., SolanBrewery, P.O., 173214 (H.P.)

and/or with the Registrar & Share Transfer Agents at

M/s. Beetal Financial & Computer Services (P) Ltd.,Beetal House, 3rd Floor,99, Madangir, Behind Local Shopping Centre,Near Dada Harsukhdas Mandir, New Delhi-110 062.Phone No. 29961281-82Fax: 29961284

Shareholders holding shares in electronic mode should address all their correspondence to their respectiveDepository Participants (DPs).

5. Compliance with Clause 49 :

i) Mandatory Requirements.As on 31st March, 2010, the Company is fully compliant with all applicable mandatory requirements ofthe revised Clause 49.

ii) Non-mandatory RequirementsThe Company has set up the Remuneration Committee of the Board of Directors, the details of whichhave been provided under the section “Committees of Board”. The Financial statements of the Companyare unqualified.

The Company has not adopted the following non-mandatory requirements.

a. The Chairman of the Board is the Managing Director who is an Executive Director.b. As the financial performance of the Company is well publicized by publishing its quarterly/half-yearly

results in the Newspapers, individual communication of half yearly results is not being sent to theshareholders.

c. During the year under report the Company has not passed any resolution requiring approval of theshareholders by postal ballot, as none of the items recommended in the annexure to Clause 49 falls there-under.

d. No specific tenure has been specified for the independent Directors.As regards the other non-mandatory requirements, the Board has taken cognizance of the same and shallconsider adopting the same as and when necessary.

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6. Transfer of unclaimed amounts to Investor Education and Protection Fund :

As per the provisions of Section 205A read with Section 205C of the Companies Act, 1956, the Company isrequired to transfer unpaid dividends, matured deposits, redeemed debentures and interest accrued thereonremaining unclaimed and unpaid for a period of 7 years from the due date to the Investor Education andProtection Fund set up by the Central Government. The Company has been complying with the provisions ofthe Companies Act, 1956 in this regard. It may be noted that no claims will lie against the Company nor theIEPF in respect of the said unclaimed amounts transferred to the Fund.

During the year under review the Company has credited a sum of Rs. 1,26,515.00 to the Investor Education andProtection Fund pursuant to Section 205C of the Companies Act, 1956 and the Investor Education and ProtectionFund (awareness and protection of investors) Rules, 2001.

7. Risk Management :

The Company has laid down procedure to inform Board Members about the risk assessment and minimizationprocedures. These procedures are periodically reviewed to ensure that executive management controls riskthrough means of a properly defined framework.

8. CEO/CFO Certificate :

Certificate from Brig. (Dr.) Kapil Mohan, VSM (Retd.) Ph.D., Managing Director and Chief Executive Officer andShri P.D. Goswami, Chief Financial Officer (Financial Director) in terms of Clause 49(v) of the Listing Agreementwith Delhi and Calcutta Stock Exchanges, for the financial year ended 31st March, 2010 was placed beforethe Board of Directors of the Company in its Meeting held on 29th May, 2010.

9. Code of Business Conduct and Ethics for Directors and Senior Management :

The Board at its Meeting held on 29th October, 2005 has adopted the Code of Business Conduct and Ethics forDirectors and Senior Management (‘the Code”). This Code is a comprehensive Code applicable to all, Directors,Executive as well as Non Executive as well as members of Senior management. The Code has been circulatedto all the members of the Board and Senior Management and the compliance of the same has been affirmed bythem.

Declaration on Code of Conduct.

As required by Clause 49 of the Listing Agreement the Declaration for Code of conduct is given below:

To

The Members of Mohan Meakin Ltd.

I, Brig.(Dr.) Kapil Mohan, VSM (Retd.)Ph.D., Managing Director & Chief Executive Officer of the Companydeclare that all Board Members and Senior Management of the Company have affirmed compliance withthe Code of Conduct.

For Mohan Meakin Ltd.

Brig.(Dr.) Kapil Mohan, VSM(Retd.)Ph.D.,

Managing Director & Chief Executive Officer

10. Certificate of Practising Company Secretary on Corporate Governance :

As required by Clause 49 of the Listing Agreement, Certificate from the Practising Company Secretary isgiven as Annexure to the Directors’ Report.

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CERTIFICATE ON CORPORATE GOVERNANCE

To The Members

MOHAN MEAKIN LIMITED

We have examined the compliance of conditions of Corporate Governance by Mohan Meakin Ltd., for the yearended March 31,2010, as stipulated in Clause 49 of the Listing Agreements of the said Company with the StockExchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examinationhas been limited to the procedures and implementation thereof, adopted by the Company for ensuring the complianceof the conditions of Corporate Governance as stipulated on the said clause. It is neither an audit nor an expressionof opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that theCompany has complied with the conditions of Corporate Governance as, stipulated in Clause 49 of the abovementioned listing agreements.

We further state that no investor grievance is pending for a period exceeding one month against the Company asper record maintained by the Company and Registrars & Share Transfer Agents.

We further state that such compliance is neither an assurance as to future viability of the Company nor of theefficiency or effectiveness with which the management has conducted the affairs of the Company.

For Tuli Pradeep & AssociatesCOMPANY SECRETARIES

Place : Solan Pradeep Kumar TuliDated : August 12, 2010 Proprietor

C.P. NO. 3914FCS-1850

ANNEXURE TO THE DIRECTORS’ REPORT TO THE SHAREHOLDERS:

MANAGEMENT DISCUSSION AND ANALYSIS:

In line with the Indian Practice, Mohan Meakin Limited (MML) has been reporting consolidated results taking intoaccount the results of its established branches and the results of sale of its products by the collaborators/bottlersspread throughout the country, with whom the Company has Manufacturing, Usership and Technical Know-howAgreements. This discussion, therefore, covers the financial results and other developments during the year ended31st March, 2010 in respect of the Company as a whole. Some statements in this discussion describing theprojections, estimates, expectations or outlook may be forward looking. Actual results may, however, differ materiallyfrom those stated on account of various factors such as changes in government regulations, tax regimes, economicdevelopments in different States in the country where your Company conducts its business and interest ratesfluctuation, impact of competition, demand and supply constraints etc.

1. Industry Structure and Development:

Mohan Meakin Ltd., (formerly known as E. Dyer & Co., Dyer Meakin & Co. Ltd., Dyer Meakin Breweries Ltd.,and Mohan Meakin Breweries Ltd.) was established as far back as 1855 for manufacture of Beer and IMFSpirits.

The Company is manufacturing Beer of all types and prestigious brands of IMFS, besides blended MaltWhiskies, including Rum, Gin and Vodka etc. In addition to its main products of Beer and Whisky theCompany is manufacturing juices and canned products, Corn Flakes, Wheat Porridge, Malt Extract, GlassBottles, etc. At present the Company has following manufacturing centres besides other Breweries andDistilleries established under collaboration arrangements in various other places in India :

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Solan Brewery (H.P.) Brewery for manufacture of Beer and Bottling Plant for bottling of IMFL.

Kasauli Distillery (H.P.) Distillery producing Malt Spirit.Mohan Nagar (Ghaziabad) Brewery, Distillery, Malt Extract, Breakfast Foods, Glass Factory, Fruit(U.P.) Products Factory, Engineering Works & Foundry.

Mohangram Bottling Plant for bottling of IMFL.Bhankarpur (Punjab)

Lucknow (U.P.) Distillery - Production stopped for the time being.

The Company’s products are quite famous in the Market and are well received by the customers being qualityproducts. Some of the well known brands of Whisky are Col. Special, Solan No.1, Diplomat Deluxe, BlackKnight, Old Monk Gold Reserve Rum, and that of Beer are Golden Eagle Lager Beer, Golden Eagle SuperStrong Beer, Meakin’s 10000 Beer, Old Monk Super 10000 Beer. The Company’s Products like GoldenEagle Lager Beer, Golden Eagle Super Strong Beer, Old Monk Super 10000 Beer, Meakin-10000 Beer andOld Monk Gold Reserve Rum, Old Monk Rum and Solan No.1 Whisky, as also Mohun’s Corn Flakes areexported to various countries like U.S.A., U.A.E., Singapore, Italy, Germany, Australia, Hong Kong, Canada,Japan, Qutar, Estonia and Mauritius. Old Monk Rum produced by the Company as per certain Worldpublication is rated as the largest selling brand of Rum. The Company’s revenue streams are from 3 areasof activities i.e. –

a) Manufacture and Sale of alcoholic products,

b) Manufacture and Sale of non-alcoholic products, and

c) Royalty and Technical Know-how.

Net sales and other income of the Company has slightly increased during the year under review and thecomplete details of the licensed capacity and actual production and sales appear in the Annual Report.

With the liberalization by the Central government although all other major industries were taken out of theumbrella of Industries Development & Regulation Act, yet the liquor industry still remains within the ambit ofthe Central Government’s licensing policy. Over and above, the State Governments formulate their ownexcise policies, which are changed every year and the control of production, sale and distribution of Beer andIMFS rests with the State Governments.

The recent trend of various State Governments shows that they do not allow free flow of Beer and Whiskymanufactured outside the States by putting restrictions and imposing exorbitant import fee as a result theliquor industry established outside the State cannot compete with the importing State. Moreover, due tounabated rise in oil prices, the lorry freight has gone up tremendously with the result that sending the goodsfrom one corner of the country to the other has become a costly affair and is un-remunerative and economicallyunviable. Therefore to overcome these obstacles most of the leaders in the liquor Industry have opted forcollaboration, technical know-how and bottling arrangements in various other States and our Company is oneof them.

Moreover, the restrictions imposed by the Central Government on liquor industry by way of licensed andinstalled capacity should be removed so that the Indian Companies can compete freely with the multi-nationals.Certain States have now liberalized the sale of Beer and Whisky by allowing retail distribution to privateparties as well as opening of Pubs etc., and this will naturally effect and increase the sales of liquor. Thesesteps are in the right direction.

In respect of the lease hold land at Salempur Industrial Area, Hathras, Uttar Pradesh, purchased from theU.P. State Industrial Development Corporation Limited (UPSIDC) on installment payment basis, physicalpossession of 330 acres (approximately) of land out of the total 830 acres is yet to be received from UPSIDC.Although the possession letter for the entire piece of land has been issued by UPSIDC, in view of claims on330 acres of land costing Rs.35,662,397 (including Rs.14,091,309 lying under capital work in progress) byForest Department and certain farmers, the Company has not paid the installments due to UPSIDC, for whichUPSIDC has served a notice to terminate the lease deed and forfeit the amount already paid. The Company

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filed a writ petition in the High Court of Allahabad challenging the said notice along with waiver of interestclaimed by UPSIDC as only part possession of land had been given. The High Court vide its order datedSeptember 4,2009 has disposed off the petition with a direction to UPSIDC to take a final decision on theobjections raised by the Company in accordance with the law and the matter is presently pending withUPSIDC. The Management is confident that the matter would be rescinded in favour of the Company.

2. Opportunities and Threats:

We operate in a highly competitive and rapidly changing market.

Due to stiff competition and restricted excise and sales-tax policies of State Governments, the business ofBeer and IMFS has almost become a localized affair. However, the Company has been successful inmaking technical collaboration arrangements at various places in the country looking to the sales potentialof Beer and IMFS. In this way to some extent the Company has been able to overcome the restrictionsimposed by the State Governments and has been able to earn income by way of royalty.

However, with the steady growth in demand and several initiatives being taken to improve efficiency inoperations, the Company is confident to increase its capacity utilization and market share.

The only threat the liquor industry has been facing is the continuous illicit liquor trade throughout thecountry whereby not only the industry is suffering but also the State Governments are losing heavily onaccount of excise duty, sales tax etc. In the rural and semi-urban areas the illicit liquor is making itspresence almost every-where and there is no foolproof system to check this illicit trade.

3. Segment-wise/product-wise performance:

The Company’s business activities broadly fall in two segments i.e. alcoholic products (includes beers,whiskies, brandies, gins and rums etc.) and non-alcoholic products (includes juice, vinegar, mineral water,breakfast foods and extracts etc.). For details regarding segment assets and liabilities, revenue and expenses,unallocated expenses and segment revenue, profit etc. segment-wise, please refer to the Notes on Accountsfor the year ending 31st March, 2010. Despite tough competition the product-wise performance is satisfactory.The Company is taking all possible steps to achieve better product-wise performance. As far as the manufactureand sale of Company’s main products (alcoholic) are concerned, they are governed by excise policies of theState Government and the manufacturers cannot exceed the licensed/installed capacities.

4. Outlook, Risks and concerns:

This Section discusses the various aspects of enterprise-wide risk management. Readers are cautioned thatthe risk related information outlined here is not exhaustive and is for information purpose only. The discussionmay contain statements, which may be forward-looking in nature. Our business model is subject to uncertaintiesthat could cause actual results to differ materially from those reflected in the forward-looking statements.Readers are requested to exercise their own judgment in assessing the risks associated with the Company.

Apart from normal risk as are applicable to an industrial undertaking, the Company does not foresee anyother areas of concern. The compliance of norms prescribed by the Pollution Control Board and otherGovernment Agencies are strictly complied with and adhered to. The Company’s operations have historicallyshown significant resilience to the normal ups and downs of the economic and industry cycles, with demandfor most of its key products continuing to grow at healthy rate. However, the mounting losses at Company’sLucknow Distillery not only eroded the Company’s finances but also exhausted its borrowing capacity.Pending decision on a further course of action, the Company has, with a view to minimize losses of LucknowDistillery, ceased manufacturing operations at Lucknow Distillery w.e.f. 1.4.2009. Moreover, the CentralGovernment drastically reduced custom duty on the import of Beer, Whisky and Wine from Foreign Countries,which may have impact on the Company’s Trade.

However, with the change in the H.P. Excise Policy we are hopeful to perform better as far as productionand sale of Beer at Company’s Solan Brewery H.P. Unit is concerned.

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5. Internal control systems and their adequacy:

The Company has a proper, strong, independent and adequate system of internal control procedurescommensurate with its size and nature of business to ensure that all assets are safeguarded, and protectedagainst loss from unauthorized use or disposition, and that transactions are authorized, recorded and reportedcorrectly. An extensive programme of internal audits, reviews by management, and documented policies,guidelines and procedures, supplements the internal control systems. The internal control systems aredesigned to ensure that the financial and other records are reliable for preparing financial statements andother data, and for maintaining accountability of assets.

The Company has strong and independent internal audit system covering on a continuous basis, the entiregamut of operations and services spanning all locations, businesses and functions. The top managementand the Audit Committee of the Board review internal audit findings and recommendations. Six firms ofChartered Accountants are appointed annually as Internal Auditors to carry out internal audit of all the Unitsof the Company.

6. Discussion on financial performance with respect to operational Performance :

The details of the financial performance of the Company are appearing in the Balance sheet, Profit & LossAccount and other financial statements attached with these accounts. Also please refer to 10 years highlightappearing just after Management Discussion and Analysis Report in the printed Balance Sheet.

7. Human Resources/industrial relations:

Your Company’s constant endeavour has been to attract, retain and nurture human potential by developingculture of family and human values. The purpose of human potential development is to enable Associates tomanage in a manner that brings in a sense of belonging and feeling of ownership. From the date Brig.(Dr.)Kapil Mohan, VSM (Retd.)Ph.D., took over the command of the Company, the industrial relations have beencordial throughout.

8. Forward-looking statement – cautionary statement:

This Section contains forward-looking statements that involve risk and uncertainties . Our actual resultscould differ materially from those anticipated in these statements as a result of certain factors.

The following lists our outlook, risks and concerns:s Our revenues and expenses are difficult to predict and can vary significantly from period to period which

could cause our profitability to decline. We may not be able to sustain our profit margins or levels ofprofitability.

s Intense competition in the market could affect our cost advantages, which could reduce our share ofbusiness and decrease our revenue.

s In the event the State Governments changed its tax policies in a manner that is adverse to us, our taxexpense may materially increase, reducing our productivity/profitability.

The statement in this management discussion and analysis report may be forward looking statement withinthe meaning of applicable laws and regulations.

Forward-looking statements are based on certain assumptions and expectations of future events. The Companycannot guarantee that these assumptions and expectations are accurate or will be realized by the Company.Actual results could differ materially from those expressed or implied. Important factors that could make adifference to the Company’s operations include demand, supply conditions, changes in the Governments’excise policies, tax regimes and such other factors. The Company assumes no responsibility to publiclyamend, modify or revise any forward-looking statement on the basis of any subsequent developments, informationor events.

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TEN YEARS’ HIGHLIGHTS

(Rs.in lacs)________________________________________________________________________________________________________________________________

YEAR 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010________________________________________________________________________________________________________________________________

Funds Employed 5974 6839 7733 8043 8318 9598 9959 10168 11087 12027

Represented by:

Net Fixed Assets andInvestments 1646 1792 2233 2205 2279 3562 3562 3583 3654 3325

Net Current Assets 4328 5047 5500 5838 6039 6036 6397 6585 7433 8702

Turnover 24882 29271 34343 35661 36062 36153 41705 40042 42307 38489

Profit/(Loss) before tax 323 628 501 538 401 102 160 152 63 (452)

Tax for the year 315 172 197 215 175 5 8 85 19 -

Minimum Alternate Tax (MAT)credit entitlement - - - - - (5) (8) - - -

Deferred tax - 48 (17) (14) (29) 31 51 (15) (40) (117)

Fringe benefit tax - - - - - 41 36 44 45 -

Profit for the year after tax 8 408 321 337 255 30 73 38 39 (335)

Adjustment & Balanceof Profit & Loss A/c* 1012 1009 1441 1756 2127 2363 2401 2447 2447 2509

Available for distribution toShareholders 1020 1417 1762 2093 2381 2393 2474 2485 2486 2174

Profit retained in business 974 1374 1714 2045 2333 2364 2439 2450 2486 2174

Dividend 43 43 43 43 43 26 30 30 - -

Tax on proposed dividend 4 - 5 5 5 3 5 5 - -

Salaries, Wages & Bonus 2836 2981 3050 3052 3010 2875 2925 3238 3100 2844

Number of Shareholders asat close of financial year 6708 6528 6528 6512 6486 6861 6803 6681 6625 6584

________________________________________________________________________________________________________________________________

*These figures include previous year’ tax adjustments, Debenture Redumption Reserve written backand balance of Profit and Loss Account.

Figure for the previous year have been regrouped wherever necessary to make them comparable tothose of the current year.

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SOURCES AND USES OF FUNDS

(Rs. in lacs)

2006 2007 2008 2009 2010

SOURCES OF FUNDS :

Internal Sources

Reserve & SurplusGeneral & Other Reserves 3330 3406 3214 3249 2938

Provision :Depreciation 4134 4378 4612 5028 5358

Taxation less advancepayments 877 653 24 - -

Provision for fringe benefit tax 41 77 7 4 -

Provision for gratuity - - 332 392 236

Proposed dividend 26 30 30 - -

Corporate dividend tax 4 5 5 - -

Leave encashment on retirement 149 145 144 126 139

External Sources

Paid-up Capital 425 425 425 425 425

Borrowings 5748 5983 6503 7412 8664

Trade Dues & Other CurrentLiabilities 5028 7056 7510 7224 6808

Deferred tax liabilities (net) 94 145 26 (14) (131)

19856 22303 22832 23846 24437

USES OF FUNDS :

Fixed Assets (Gross)

Land, Buildings, Plant & Machinery, etc. 7647 7906 8161 8640 8641

Investments 49 34 34 41 41

Current Assets :

Stores & Spares, Loose Toolsand Stock-in-Trade 4323 4800 5110 5167 5067

Sundry Debtors 4190 5015 5773 6106 6948

Cash & Bank Balances 561 1437 1131 673 517

Loans & Advances 3086 3111 2623 3016 3223

Miscellaneous Expenditure - - - 203 -

19856 22303 22832 23846 24437

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AUDITORS’ REPORT

TO THE MEMBERS OFMOHAN MEAKIN LIMITED

1. We have audited the attached balance sheet ofMohan Meakin Limited ("the Company") as atMarch 31, 2010 the Profit and Loss Account for theyear ended on that date, annexed thereto, in both ofwhich are incorporated the returns from the LucknowDistillery Branch audited by other auditors and thecash flow statement for the year ended on that date.These financial statements are the responsibility ofthe Company’s Management. Our responsibility isto express an opinion on these financial statementsbased on our audit.

2. We conducted our audit in accordance with theauditing standards generally accepted in India. Thosestandards require that we plan and perform the auditto obtain reasonable assurance about whetherthe financial statements are free of materialmisstatements. An audit includes examining, on atest basis, evidence supporting the amounts anddisclosures in the financial statements. An audit alsoincludes assessing the accounting principles usedand significant estimates made by the Management,as well as evaluating the overall financial statementpresentation. We believe that our audit provides areasonable basis for our opinion.

3. We did not audit the financial statements of theLucknow Distillery Branch of the Company, whosefinancial statements reflect total assets of Rs.8,28,36,881 as at March 31, 2010, and total revenuesof Rs. 1,14,25,730 for the year ended on that date.These financial statements have been audited byother auditors.

4. As required by the Companies (Auditor's Report)Order, 2003 issued by the Central Government interms of Section 227 (4A) of the Companies Act,1956, we give in the Annexure a statement on thematters specified in paragraphs 4 and 5 of the saidOrder.

5. Further to our comments in the Annexure referred toin paragraph 4 above, we report that:

(i) we have obtained all the information andexplanations, which to the best of our knowledgeand belief were necessary for the purposes of ouraudit;

(ii) in our opinion, proper books of account as requiredby law have been kept by the Company so far as itappears from our examination of those books and

proper returns adequate for the purposes of our audithave been received from the Lucknow DistilleryBranch audited by other auditors;

(iii) the reports on the accounts of the Lucknow DistilleryBranch audited by other auditors has been forwardedto us and has been dealt with by us in preparing thisreport;

(iv) the Balance Sheet, the Profit and Loss Account andCash Flow Statement dealt with by this report are inagreement with the books of account and the auditedBranch Returns;

(v) in our opinion, the Balance Sheet, the Profit andLoss Account and the Cash Flow Statement dealtwith by this report are in compliance with theAccounting Standards referred to in sub-Section211(3C) of the Companies Act, 1956;

(vi) in our opinion and to the best of our information andaccording to the explanations given to us, the saidaccounts give the information required by theCompanies Act, 1956, in the manner so required andgive a true and fair view in conformity with theaccounting principles generally accepted in India;

(a) in the case of the Balance Sheet, of the state ofaffairs of the Company as at March 31, 2010;

(b) in the case of the Profit and Loss Account, of theloss of the Company for the year ended on that date;and

(c) in the case of Cash Flow Statement, of the cashflows of the Company for the year ended on that date.

6. On the basis of the written representations receivedfrom the Directors as on March 31, 2010 and takenon record by the Board of Directors, we report thatnone of the Directors is disqualified as on March 31,2010 from being appointed as a director in terms ofSection 274 (1) (g) of the Companies Act, 1956

For A. F. FERGUSON & CO.Chartered Accountants

(Registration No. 112066W)

Jitendra Agarwal Partner

Membership No. : 87104

Place : New DelhiDate : 29 May, 2010

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ANNEXURE TO THE AUDITORS' REPORT(Referred to in paragraph 4 of our report of even date)

Having regard to the nature of the Company's business/activities and results for the year, clauses 4 (xiii) and(xiv) of Companies (Auditor's Report) Order, 2003 (hereinafter referred to as the Order) are not applicable.

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details andsituation of the fixed assets.

(b) The Management has carried out a physical verification of most of its fixed assets during the year. In ouropinion, the frequency of physical verification is reasonable having regard to the size of the Company andthe nature of its fixed assets. The discrepancies noticed on such verification were not material and havebeen properly dealt with in the books of account.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of thefixed assets of the Company and such disposal has, in our opinion, not affected the going concern statusof the Company.

(ii) (a) During the year, the inventories have been physically verified by the management. In our opinion, thefrequency of the verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physicalverification of inventories followed by the management are reasonable and adequate in relation to the sizeof the Company and the nature of its business.

(c) On the basis of our examination of the records of inventories, we are of the opinion that, the Company hasmaintained proper records of inventories. The discrepancies noticed on physical verification ofinventories as compared to book records were not material and have been properly dealt with in thebooks of account.

(iii) (a) According to the information and explanations given to us, the Company has, during the year, not grantedany loan, secured or unsecured to companies, firms and other parties covered in the register maintainedunder Section 301 of the Companies Act, 1956. Accordingly, paragraphs 4 (iii) (b), (c) and (d) of the Orderare not applicable.

(b) According to the information and explanations given to us, the Company has, not taken any loan, securedor unsecured from companies, firms and other parties covered in the register maintained under Section301 of the Companies Act, 1956, other than unsecured loans aggregating Rs.115.35 lacs taken fromdirectors covered in the register maintained under Section 301 of the CompaniesAct, 1956. The maximumamount due during the year was Rs.115.35 lacs and the year end balance of loans taken was Rs.115.35lacs.

(c) In our opinion, the rate of interest and other terms and conditions of unsecured loans taken by theCompany are, prima facie, not prejudicial to the interest of the Company.

(d) According to the information and explanations given to us, the Company is regular in payment of theprincipal amount and interest thereon.

(iv) In our opinion and according to the information and explanations given to us, having regard to the explanationsthat some of the items purchased are of special nature and suitable alternative sources are not readily availablefor obtaining comparable quotations, there is an adequate internal control system commensurate with the sizeof the Company and the nature of its business with regard to purchases of inventory and fixed assets and thesale of goods and services. During the course of our audit, we have not observed any major weakness in suchinternal control system.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of theCompanies Act, 1956, to the best of our knowledge and belief and according to the information and explanationsgiven to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in theRegister maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs. 5 lakhs in respect of any party, the transactions havebeen made at prices which are prima facie reasonable having regard to the prevailing market prices at therelevant time except in the case of items stated to be of specialized nature for which as informed there areno alternate sources of suppply to enable a comparison of the prices paid / charged.

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(vi) In our opinion and according to the information and explanations given to us, the Company has complied withthe provisions of section 58A, section 58AA or any other relevant provisions of the Companies Act, 1956 andthe Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public.As per information and explanations given to us, no order under the aforesaid sections has been passed bythe Company Law Board or Reserve Bank of India or any Court or any other Tribunal on the Company.

(vii) In our opinion, the internal audit function carried out during the year by firms of Chartered Accountants appointedby the Management have been commensurate with the size of the Company and the nature of its business.

(viii) Pursuant to the Rules made by the Central Government, the maintenance of cost records has been prescribedunder section 209(1)(d) of the Companies Act, 1956 in respect of manufacture of industrial alcohol at one ofthe branches of the Company i.e. Lucknow Distillery. The Branch Auditors have reported that they havebroadly reviewed the cost records being maintained and are of the opinion that prima-facie the cost accountsand records have been maintained but they have not made a detailed examination of the records with a view todetermine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and records of the Company examined by us,the Company has generally been regular in depositing undisputed statutory dues including provident fund,investor education and protection fund, employees' state insurance, wealth tax, income-tax, sales taxservice tax, customs duty, excise duty, cess and other applicable material statutoty dues. We are informedthat there are no undisputed statutory dues as at the year end outstanding for a period of more thansix months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined byus, there are no disputed dues of wealth tax, and cess.According to the information and explanations given to us and the records of the Company examined byus, the details of disputed dues not deposited/deposited under protest of sales/trade tax, customs duty,service tax, excise duty and income tax dues are as follows:

Name of Nature of the Forum where dispute is Amount* Amount paid Period to which thethe Statute dues pending (Rs. lacs) under protest amount relates

(Rs.lacs)

Sales tax Sales tax Appellate authority up to 50.76 1.10 1975-76, 1977 to 1979,laws Commissioner's level 1987 to 1989, 1999-2000,

2007-2008, 2008-2009

Sales tax Appellate Tribunal 14.76 - 1991 to 1993,1994 to 1996,1997 to 1999

High Court 11.29 - 1984 to 1986

Trade tax Appellate authority up to 79.47 - 2005 to 2008Commissioner's level

Appellate Tribunal 0.17 - 1994 to 1996

High Court 20.40 - 1984 to 1986, 1987to 1989,1990 to 1993

State Excise Excise duty High Court 149.30 31.31 1978 to 1981,laws 1983 to 1986,

1988 to 2002

Central Excise Excise duty Appellate authority up to 26.53 - 2005 to 2007laws Commissioner's level

Service tax Service tax Appellate authority up to 100.92 - 2004 to 2008laws Commissioner's level

Custom laws Custom duty CESTAT 61.03 - 1994 to 2004

Income tax Income tax Income tax Appellate 423.95 389.95 2002 to 2006laws Tribunal

* Amount as per demand orders, including interest and penalty wherever quantified in the order.

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The following matters, which have been excluded from the table above, have been decided in favour of the Companybut the concerned authorities have preferred appeals at higher levels:

Name of the Nature Forum where pending Amount Period to which theStatute (Rs. lacs) amount relates

Sales tax laws Sales tax Sales tax appellate Tribunal 358.08 1987 to 1989, 1990 to 1993

State Excise Excise duty Supreme Court 118.61 1988 to 2002laws

Central Excise Excise duty Supreme Court 39.06 2003-2004laws

(x) The Company does not have accumulated losses at the end of the financial year March 31, 2010. Further, theCompany has not incurred any cash losses during the financial year ended March 31, 2010 and in theimmediately preceding financial year ended March 31, 2009.

(xi) According to the records of the Company examined by us and on the basis information and explanations givento us, the Company has not defaulted in repayment of dues to banks during the year. The Company has nottaken any loans from financial institutions and has not issued debentures during the year.

(xii) In our opinion and according to the information and explanations given to us, the Company has not grantedany loans and advances during the year on the basis of security by way of pledge of shares, debentures andother securities.

(xiii) According to the information and explanations given to us, the Company has not given any guarantees duringthe year for loans taken by others from banks or financial institutions.

(xiv) In our opinion and according to the information and explanations given to us, the term loans have been appliedfor the purposes for which they were obtained.

(xv) According to the information and explanations given to us and on an overall examination of the balance sheetof the Company, we report that short term funds have not been used to finance long term investments.

(xvi) The Company has not made any preferential allotment of shares during the year, paragraph 4 (xviii)of the Order is not applicable.

(xvii) As the Company has not issued any debentures during the year, paragraph 4 (xix) of the Order is not applicable.

(xviii) Since the Company has not raised any money by way of public issue during the year, paragraph 4 (xx) of theOrder is not applicable.

(xix) To the best of our knowledge and according to the information and explanations given to us, no fraud by theCompany and no fraud on the Company has been noticed or reported during the year.

Place : New Delhi,Date : 29, May 2010 For A. F. FERGUSON & CO.

Chartered Accountants(Registration No. 112066 W)

Jitendra AgarwalPartner

Membership No. : 87104

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BALANCE SHEETas at March 31, 2010

As at As atSchedule March 31, 2010 March 31, 2009

Rs. Rs.

Sources of FundsShareholders' funds :

Share capital 1 4,25,42,395 4,25,42,395Reserves and surplus 2 29,38,16,959 32,49,33,330

33,63,59,354 36,74,75,725Loan funds : 3

Secured loans 64,02,86,321 53,89,37,509Unsecured loans 22,61,04,099 20,23,23,297

86,63,90,420 74,12,60,806

Total 1,20,27,49,774 1,10,87,36,531

Application of FundsFixed assets : 4

Gross block 80,08,23,614 76,97,38,899Less : Depreciation 53,58,44,018 50,27,73,838Net block 26,49,79,596 26,69,65,061Capital work-in-progress 6,33,94,648 9,42,40,837

32,83,74,244 36,12,05,898Investments 5 41,09,962 41,46,472

Deferred tax assets (net) 6 1,31,36,693 13,92,888

Current assets, loans and advances : 7Inventories 50,66,92,297 51,66,86,321Sundry debtors 69,47,57,407 61,06,14,838Cash and bank balances 5,17,19,428 6,73,46,293Loans and advances 32,22,82,383 30,15,49,227

1,57,54,51,515 1,49,61,96,679Less : Current liabilities and provisions : 8

Current Liabilities 68,07,71,238 72,23,88,861Provisions 3,75,51,402 5,21,56,708

71,83,22,640 77,45,45,569

Net current assets 85,71,28,875 72,16,51,110

Miscellaneous expenditure (to the extent not

adjusted or written off) 9 - 2,03,40,163

Total 1,20,27,49,774 1,10,87,36,531Notes to the accounts 13

In terms of our report attached BRIG. (Dr.) KAPIL MOHAN, VSM (Retd.) Ph.D. Managing DirectorFor A. F. FERGUSON & CO. HEMANT MOHAN Dy. Managing DirectorChartered Accountants P.D. GOSWAMI Financial Director

J.K. JAIN DirectorH.N. HANDA SWARAJ SURI Director

Jitendra Agarwal Secretary D.S. YADAVA DirectorPartner L.K. MALHOTRA Director

M. NANDAGOPAL DirectorNEW DELHI,MAY 29, 2010

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PROFIT AND LOSS ACCOUNTfor the year ended March 31, 2010

Year ended Year endedSchedule March 31, 2010 March 31, 2009

Rs. Rs.

IncomeSales 3,84,88,99,852 4,23,06,84,517Less: Excise duty 84,25,01,891 1,38,91,22,285Sale of products (Net) 3,00,63,97,961 2,84,15,62,232Other income 10 10,20,35,909 20,91,51,172

3,10,84,33,870 3,05,07,13,404Expenditure

Manufacturing and other expenses 11 3,02,74,86,829 2,91,78,08,793Profit for the year before depreciation,interest and tax 8,09,47,041 13,29,04,611Depreciation on: Fixed assets 4 4,65,47,609 4,40,32,831 Investment in immovable properties 510 536Profit for the year before interest and tax 3,43,98,922 8,88,71,244Interest 12 7,95,65,274 8,25,84,070Profit(loss) for the year before tax (4,51,66,352) 62,87,174Provision for - current tax - 19,00,000

- deferred tax charge/(credit) (1,17,43,805) (39,52,238)- fringe benefit tax - 44,75,719

Profit/(loss) for the year after tax (3,34,22,547) 38,63,693Provision for taxation relating to earlier years (23,06,176) 2,91,949Profit/(loss) for the year (3,11,16,371) 35,71,744Balance brought forward from previous year 24,85,66,439 24,49,94,695Balance carried to balance sheet 21,74,50,068 24,85,66,439

Earnings/(losses) per share - basic / diluted (Rs.)(Face value - Rs. 5 per share)(Refer note 10 in schedule 13) (3.66) 0.42

Notes to the accounts 13

In terms of our report attached BRIG. (Dr.) KAPIL MOHAN, VSM (Retd.) Ph.D. Managing DirectorFor A. F. FERGUSON & CO. HEMANT MOHAN Dy. Managing DirectorChartered Accountants P.D. GOSWAMI Financial Director

J.K. JAIN DirectorH.N. HANDA SWARAJ SURI Director

Jitendra Agarwal Secretary D.S. YADAVA DirectorPartner L.K. MALHOTRA Director

M. NANDAGOPAL DirectorNEW DELHI,MAY 29, 2010

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CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010

Year ended Year endedMarch 31, 2010 March 31, 2009

Rs. Rs.

A. CASH FLOWS FROM OPERATING ACTIVITIES

Net profit/(loss) before tax (4,51,66,352) 62,87,174

Adjustments for :

Depreciation 4,65,48,119 4,40,33,367

Fixed assets written off : 32,26,104 10,61,739

Interest expense 7,95,65,274 8,25,84,070

VRS amortised during the year 5,25,44,704 1,01,68,000

Dividend from long term trade investments (1,05,729) (1,19,535)

Interest income (31,33,101) (58,58,461)

Rent from long term investments in immovable property (1,33,560) (1,33,660)

Profit on sale of fixed assets (16,01,408) (12,00,10,951)

Loss on sale of fixed assets 24,935 -

Operating profit before working capital changes 13,17,68,986 1,80,11,743

Adjustments for:

Trade and other receivables (8,09,18,763) (1,53,70,597)

Inventories 99,94,024 (57,18,092)

Trade and other payables (5,53,60,482) (2,50,11,555)

Cash generated from operations 54,83,765 (2,80,88,501)

Taxes paid (1,27,70,427) (2,56,16,762)

Expenditure pursuant to Voluntary Retirement Scheme (3,22,04,541) (3,05,08,163)

NET CASH FROM/(USED) OPERATING ACTIVITIES (A) (3,94,91,203) (8,42,13,426)

B. CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of fixed assets (2,08,41,498) (5,17,22,299)

Sale of fixed assets 53,91,746 12,01,96,953

Sale / (Purchase) of long term trade investments 36,000 (7,19,760)

Dividend received 1,05,729 1,19,535

Interest received 37,43,823 53,66,457

Rent from immovable property 1,33,560 1,33,660

NET CASH FROM / (USED) IN INVESTING ACTIVITIES (B) (1,14,30,640) 7,33,74,546

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Year ended Year ended

March 31, 2010 March 31, 2009

Rs. Rs.

C. CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from long term borrowings 7,17,37,738 9,60,54,489

Repayment of long term borrowings (6,30,14,554) (4,10,42,948)

Changes in cash credit 10,99,67,393 2,95,23,155

Interest paid (7,29,45,816) (7,61,47,702)

Dividend paid (1,29,627) (28,58,607)

Corporate dividend tax - (5,06,106)

NET CASH FROM / (USED) IN FINANCING ACTIVITIES (C) 4,56,15,134 50,22,281

NET DECREASE IN CASH AND

CASH EQUIVALENTS (A + B + C) (53,06,709) (58,16,599)

CASH AND CASH EQUIVALENTS AS AT OPENING

Cash and bank balances 5,13,53,229 5,71,69,828

CASH AND CASH EQUIVALENTS AS AT CLOSING

Cash and bank balances* 4,60,46,520 5,13,53,229

* excludes Rs. 56,72,908; (previous year Rs. 1,59,93,064) held as margin money and in dividend accounts.

In terms of our report attached BRIG. (Dr.) KAPIL MOHAN, VSM (Retd.) Ph.D. Managing DirectorFor A. F. FERGUSON & CO. HEMANT MOHAN Dy. Managing DirectorChartered Accountants P.D. GOSWAMI Financial Director

J.K. JAIN DirectorH.N. HANDA SWARAJ SURI Director

Jitendra Agarwal Secretary D.S. YADAVA DirectorPartner L.K. MALHOTRA Director

M. NANDAGOPAL DirectorNEW DELHI,MAY 29, 2010

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SCHEDULES 1 TO 13 ANNEXED TO AND FORMING PART OF THE ACCOUNTS:

(1) Share capital As at As atMarch 31, 2010 March 31, 2009

Rs. Rs.

AUTHORISED

2,00,00,000 (previous year 2,00,00,000)

Equity shares of Rs.5 each 10,00,00,000 10,00,00,000

ISSUED AND SUBSCRIBED

85,08,479 (previous year 85,08,479) Equity sharesof Rs.5 each fully paid-up (of the above,1,62,000 shares areallotted as fully paid-up pursuant to a contractwithout payment being received in cash and 81,03,310 sharesare allotted as fully paid-up by way of bonusshares; bonus shares issued:- 80,22,277 shares bycapitalisation of reserves and 81,033 shares by capitalisationof share premium) 4,25,42,395 4,25,42,395

(2) Reserves and surplusAs at Additions Deletions As at

March 31, 2009 March 31, 2010

Rs. Rs. Rs. Rs.

Share premium account 4,349 - - 4,349

General reserve 7,63,62,542 - - 7,63,62,542

Profit and loss account 24,85,66,439 - 3,11,16,371 21,74,50,068

32,49,33,330 - 3,11,16,371 29,38,16,959

Previous year 32,13,61,586 35,71,744 - 32,49,33,330

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(3) LoansAs at As at

March 31, 2010 March 31, 2009Rs. Rs.

SECURED

From banks :

Cash credit 11,18,63,434 3,18,39,343

Working capital demand loan 34,40,00,000 31,60,00,000

Cash credit and working capital demand loan are secured byway of hypothecation of goods and book debts and collateralysecured by way of second charge on entire block assets of theCompany (both present and future)

Term loans are secured by first charge on entire block assetsand second charge on entire current assets of the Company(both present and future) (Due within one year Rs. 59,14,280;previous year Rs. 59,14,280) 2,56,28,580 3,15,42,860

Term loans are secured by first charge on fixed / block assetsof the Company (both present and future) (Due within one yearRs. 3,99,50,000; previous year Rs. 2,71,50,000) 8,03,13,047 8,82,88,951

Term loan are secured by hypothecation of specific vehicles(Due within one year Rs.15,52,495; previous year Rs.7,87,216) 33,59,170 25,83,302

From others :Instalments payable to UPSIDC Limited towards land atSalempur Industrial Area, Hathras (U.P.), are to be securedby first charge on such land and buildings and machinesthereon (Due within one year Rs.4,29,26,909; previous yearRs.4,29,26,909) # 4,29,26,909 4,29,26,909

Interest accrued and due thereon # 3,21,95,181 2,57,56,144

64,02,86,321 53,89,37,509UNSECURED:

Fixed deposits * 11,99,47,500 9,87,49,000Security deposits 9,87,16,487 9,80,77,487Short term loans and advances : from banks 74,40,112 54,96,810

22,61,04,099 20,23,23,297

# Refer note 5 in schedule 13.

* Fixed deposits include Rs.1,15,35,000; (previous year Rs.15,35,000) from Directors. Fixed deposit does not include any amount required to be credited to Investor Education and Protection Fund.

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(4) Fixed assets

GROSS BLOCK (COST) DEPRECIATION NET BLOCK

As at Additions Deductions As at As at For On As at As at As atMarch 31, March 31, March 31, the year Deductions March 31, March 31, March 31,

2009 2010 2009 2010 2010 2009Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Freehold land 25,17,923 - - 25,17,923 - - - - 25,17,923 25,17,923

Leasehold land # 5,42,88,195 - - 5,42,88,195 - - - - 5,42,88,195 5,42,88,195

Buildings 6,50,30,247 6,29,564 - 6,56,59,811 5,28,56,479 10,59,804 - 5,39,16,283 1,17,43,528 1,21,73,768

Roads 4,64,103 - - 4,64,103 4,03,805 3,276 - 4,07,081 57,022 60,298

Plant, machinery and

laboratory equipment 58,09,66,161 4,64,41,257 1,41,34,713 61,32,72,705 39,41,72,108 4,22,20,128 80,89,436 42,83,02,800 18,49,69,905 18,67,94,053

Computers 94,20,122 6,69,674 1,55,880 99,33,916 85,67,858 5,74,782 1,44,934 89,97,706 9,36,210 8,52,264

Vehicles 4,36,51,440 33,40,610 61,54,090 4,08,37,960 3,51,77,977 22,71,319 51,88,531 3,22,60,765 85,77,195 84,73,463

Furniture and fittings 1,33,94,503 5,22,416 74,123 1,38,42,796 1,15,95,611 4,18,300 54,528 1,19,59,383 18,83,413 17,98,892

Livestock 6,205 - - 6,205 - - - - 6,205 6,205

76,97,38,899 5,16,03,521 2,05,18,806 80,08,23,614 50,27,73,838 4,65,47,609 1,34,77,429 53,58,44,018 26,49,79,596

Previous year 73,47,17,053 3,87,32,208 37,10,362 76,97,38,899 46,12,03,628 4,40,32,831 24,62,621 50,27,73,838 26,69,65,061

Capital work in progress # 6,33,94,648 9,42,40,837

32,83,74,244 36,12,05,898

# Refer note 5 in schedule 13.

(5) Investments

As at As at

March 31, 2010 March 31, 2009

Rs. Rs. Rs. Rs.

Long Term Investments :

At cost unless otherwise stated:

GOVERNMENT SECURITIES

(Including Rs. 4,08,238; previous year

Rs. 4,44,238; lodged as security deposits)

Unquoted :

4% Loan 1980 5,006 5,006

4 3/4% Loan 1989 36,882 36,882

5 3/4% M.P. Development Loan 1980 2,450 2,450

4 1/2% Ten Year Defence Deposit Certificates 10,000 10,000

12 Year National Plan Certificates 20,000 20,000

12 Year National Defence Certificates 5,100 5,100

7 Year National Savings Certificates 2,37,400 2,37,400

6 Year National Savings Certificates 96,500 1,32,500

Carried forward 4,13,338 4,49,338

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(5) Investments (contd.) As at As at

March 31, 2010 March 31, 2009Rs. Rs. Rs. Rs.

Brought forward 4,13,338 4,49,338

TRADEQuoted :Equity shares of Re.1/- each fully paid:3,66,364 shares of National CerealsProducts Limited 45,751 45,751

Equity shares of Rs.10/- each fully paid:52,197 shares ofThe Indian Hotels Company Limited 7,35,190 7,35,190

48,650 shares of John Oakey & Mohan Limited 4,86,500 4,86,50030,000 shares of Tai Industries Limited 3,00,000 3,00,00018,738 shares of Artos Breweries Limited 1,69,486 17,36,927 1,69,486 17,36,927

Unquoted :Equity shares of Rs.10/- each fully paid:5,000 shares of Associated Journals Limited(at book value) 1 189,000 shares of Mohan RockySpringwater Breweries Limited 8,90,000 8,90,00076,000 shares of Mohan GoldwaterBreweries Limited 7,60,000 7,60,00022,500 shares of Mohan Carpets (India)Limited (at book value) 1 130,000 shares of Mohan Closures Limited 3,00,000 3,00,00029,50,400 shares of Macdonald MohanDistillers Limited, a company underliquidation (at book value) 1 19,50,003 1 19,50,003

41,00,268 41,36,268

NON-TRADE

Unquoted :Equity shares of Rs.10/- each fully paid:1,00,000 shares of Maruti Limited (at book value) 1 183,300 shares of Sideco MohanTools Kerala Limited (at book value) 1 1Equity shares of Rs.100/- each fully paid:150 shares of Fabron Textile & General IndustriesPrivate Limited (at book value) 1 116,366 ordinary shares of 100 Nepalese Rupeeseach of Himalayan Brewery LimitedCost : Rs. 11,28,688Less : Provision for diminution in value Rs. 11,28,687 1* 1** at book value 4 4

41,00,272 41,36,272

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(5) Investments (contd.) As at As at

March 31, 2010 March 31, 2009Rs. Rs. Rs. Rs.

Aggregate book value of quoted investments(Market value Rs. 70,72,681;previous year Rs. 39,57,629) 17,36,927 17,36,927

Aggregate book value of unquoted investments 23,63,345 23,99,345

41,00,272 41,36,272

IMMOVABLE PROPERTIES

(At written down value):Freehold land and buildings

Cost per last balance sheet 1,02,414 1,02,414Less: Depreciation to date 92,724 9,690 92,214 10,200

41,09,962 41,46,472

(6) Deferred tax

Deferred tax assets on

Provision for doubtful debts and advances 1,05,08,905 1,21,75,088

Accrued expenses deductible on payment 1,28,74,119 1,87,07,412

Unabsorbed depreciation 6,75,876 -

Others 1,46,38,465 13,82,158

3,86,97,365 3,22,64,658

Less :

Deferred tax liabilities on

Accumulated depreciation 2,26,36,443 2,80,55,126

Others 29,24,229 28,16,644

2,55,60,672 3,08,71,770

Deferred tax assets (net) 1,31,36,693 13,92,888

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(7) Current assets, loans and advancesAs at As at

March 31, 2010 March 31, 2009Rs. Rs. Rs. Rs.

CURRENT ASSETS :

INVENTORIES

Packing materials, Stores and Spares(at cost or under) 14,37,96,665 11,83,10,482Loose Tools (at cost or under) 1,80,488 1,93,286Stock-in-Trade (at lower of cost and netrealisable value)Finished goods * 30,59,47,518 33,69,18,859Stock in process 2,26,75,992 2,15,15,907Raw materials 3,40,91,634 3,97,47,787

36,27,15,144 39,81,82,553

50,66,92,297 51,66,86,321*Finished goods include Rs.14,82,98,824;(previous year Rs.15,62,78,097) in respectof bulk spirit, which is the raw material/process stock for products, as theCompany’s industrial licences are formanufacture of spirit in bulk litres.

SUNDRY DEBTORS :

Debts outstanding for a period exceedingsix months:

Secured- considered good 17,21,260 27,72,141

Unsecured :

Considered good 10,97,31,180 9,72,05,323

Considered doubtful 1,94,21,584 2,19,61,636

Less: Provision for doubtful debts (1,94,21,584) (2,19,61,636)

11,14,52,440 9,99,77,464

Other debts :Secured- Considered good 4,25,92,494 4,80,57,368

Unsecured- Considered good # 54,07,12,473 46,25,80,006

58,33,04,967 51,06,37,374

69,47,57,407 61,06,14,838

# Includes amount of Rs. 2,71,39,678; (previous year Rs.1,57,81,110) due from a private company in whichDirector is a Director

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(7) Current assets, loans and advances (Contd.)As at As at

March 31, 2010 March 31, 2009Rs. Rs. Rs. Rs.

CASH AND BANK BALANCES:

Cash on hand 9,22,548 38,32,179

Cheques in hand 49,46,177 35,55,173

Bank balances with scheduled banks :

Current accounts 2,42,40,365 2,90,59,324

Fixed deposits (including Rs. 2,22,652;previous year Rs.2,08,181; margin againstguarantees and Rs. 38,30,128; previous yearRs.1,40,35,128; lodged/pledged as security) 2,15,51,280 3,08,40,559

Margin deposits 1,250 1,250

Savings bank account (employees’ securitydeposits) 808 808

Deposits with Post Office, on savingsbank account. Lodged as securitywith government authorities. Maximumbalance during the year Rs. 57,000;(previous year Rs. 57,000) 57,000 57,000

5,17,19,428 6,73,46,293LOANS AND ADVANCES:

Secured and considered good:Advances recoverable in cash or in kind 63,76,439 88,66,361Unsecured and considered good,unless otherwise specified :Advances recoverable in cash or in kind orfor value to be received :Considered good * 22,29,93,926 22,19,56,946Considered doubtful 1,22,15,069 1,38,57,983Less : Provision for doubtful advances (1,22,15,069) (1,38,57,983)Duty paid permits in hand 4,85,040 11,26,800Balances with excise authorities on current account 3,06,40,137 2,24,67,482Advance payment against current taxes (net ofprovisions of Rs.7,45,65,832; previous yearRs. 7,58,39,003) 6,15,56,984 4,68,93,829Advance payment against fringe benefit tax (net ofprovisions of Rs.1,68,38,641; previous yearRs.1,64,25,800) 14,000 -Interest accrued on Investments 2,15,857 32,22,82,383 2,37,809 30,15,49,227

1,57,54,51,515 1,49,61,96,679

* Includes amount of Rs. 4,52,09,834; (previous year Rs.5,06,27,207) due from a private company in which Director is a Director

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(8) Current liabilities and provisions

As at As atMarch 31, 2010 March 31, 2009

Rs. Rs.

CURRENT LIABILITIES :

Acceptances 41,59,198 55,11,712

Sundry creditors:

Total outstanding dues of creditors other than micro

and small enterprise (Refer note 6 of schedule 13)* 67,12,88,001 71,16,46,011

Unclaimed dividends # 15,61,070 16,90,697

Dividends payable on unclaimed shares of

National Cereals Products Limited # 5,273 7,516

Interest accrued but not due on loans 37,57,696 35,32,925

68,07,71,238 72,23,88,861

PROVISIONS :

Fringe benefit tax (net of payments of

Rs. 1,68,52,641; previous year Rs.1,64,25,800) - 3,99,449

Gratuity 2,36,42,416 3,92,00,756

Compensated absences 1,39,08,986 1,25,56,503

3,75,51,402 5,21,56,708

* Sundry creditors include Rs. 12,28,082; (previous year Rs.9,81,785) due to Directors

# Does not include any amounts outstanding as on March 31, 2010 which are required to be credited to Investor Education and Protection Fund.

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Year ended Year endedMarch 31, 2010 March 31, 2009

Rs. Rs.(9 ) Miscellaneous expenditure (to the extent not adjusted or written off)

Voluntary Retirement Scheme (VRS)

Opening balance 2,03,40,163 -

Expenditure incurred during the year - 3,05,08,163

Less : Amortised during the year 2,03,40,163 1,01,68,000

Closing balance - 2,03,40,163

(10) Other income

Royalty and technical know-how 2,93,20,394 2,52,99,375

Charges for use of land, buildings, machinery and recoveriesfor services, etc., provided to other companies 1,23,75,000 93,83,160

Customs and excise drawbacks, rebates and incentives,etc. on exports 9,55,774 13,13,838

Cold storage 22,29,566 11,27,264

Dividend from long term trade investments 1,05,729 1,19,535

Interest received * 31,33,101 58,58,461

Rent from long term investments in immovable properties 1,33,560 1,33,660

Other rent 44,51,815 57,23,830

Profit on sale of fixed assets # 16,01,408 12,00,10,951

Non compete fees 1,50,00,000 1,69,33,520

Liabilities / Provisions no longer required written back 2,78,24,970 1,61,34,035

Miscellaneous income 49,04,592 71,13,543

10,20,35,909 20,91,51,172

* Income tax deducted at source Rs. 1,89,190; (Previous year Rs. 11,01,365)

# Includes profit on sale of freehold land Rs. Nil (Previous year Rs. 11,99,85,461)

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(11) Manufacturing and other expensesYear ended Year ended

March 31, 2010 March 31, 2009Rs. Rs. Rs. Rs. Rs. Rs.

Raw materials consumed 44,26,91,187 41,28,17,683

Movement of finished goods and stock in process:

Opening stocks : Finished goods 33,69,18,859 32,75,56,593 Stock in process 2,15,15,907 35,84,34,766 2,20,76,805 34,96,33,398

Add:Purchases of finished goods 98,00,00,668 88,03,28,241

1,33,84,35,434 1,22,99,61,639Less: Closing stocks: Finished goods 30,59,47,518 33,69,18,859 Stock in process 2,26,75,992 32,86,23,510 1,00,98,11,924 2,15,15,907 35,84,34,766 87,15,26,873

Increase/(Decrease) in exciseduty on finished goods andcaptive consumption 91,02,815 78,90,276

Payments to and provisionsfor employees :

Salaries, wages, bonus, etc.(excluding allocation toother accounts) 23,07,96,920 25,66,79,871

Company’s contribution toprovident, pension fundsand ESI etc. 2,54,25,837 3,06,17,989

Gratuity 1,94,41,660 1,25,25,627

Staff welfare 87,64,469 28,44,28,886 1,01,78,932 31,00,02,419

Stores and spares consumed(excluding allocation toother accounts) 2,22,06,179 3,02,32,012

Packing material consumed 45,03,68,075 48,63,33,874

Power & Fuel 25,21,90,073 31,36,00,035

Repairs to : Buildings 2,25,49,081 2,72,80,724 Plant & Machinery 4,29,10,644 4,12,05,925 Others 72,35,404 7,26,95,129 1,08,41,466 7,93,28,115

Carried forward 2,54,34,94,268 2,51,17,31,287

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(11) Manufacturing and other expenses (contd.)Year ended Year ended

March 31, 2010 March 31, 2009Rs. Rs.

Brought forward 2,54,34,94,268 2,51,17,31,287

Breakages, leakages, samples, cash discountsand other allowances 93,27,071 61,80,544

Commission to :

Selling agents 3,37,19,267 2,75,91,004

Others 6,52,996 5,28,831

Insurance 71,88,153 71,06,448

Rent (including lease rent for land taken onlease Rs. 5,000 ; previous year Rs.5,000) 37,31,617 37,11,565

Rates and taxes 3,15,71,221 3,20,92,847

Legal and professional charges 78,92,342 81,32,185

Octroi 4,65,054 4,90,736

Bad debts / claims and advances written off 2,40,640 6,96,950

Provision for doubtful debts and advances - 2,16,643

Travelling and conveyance 1,30,30,172 1,51,82,958

Advertisement, sales promotion and publicity 2,08,94,561 3,50,07,379

Freight and cartage 11,36,88,447 8,84,41,866

Directors’ sitting fees 2,70,000 2,40,000

Voluntary retirement scheme expenses 3,22,04,541 -

Amortisation of voluntary retirement schemeexpenses incurred upto March 31, 2009 # 2,03,40,163 1,01,68,000

Fixed assets written off 32,26,104 10,61,739

Loss on sale of fixed assets 24,935 -

Depot operation charges/ Selling expenses 9,74,98,031 9,34,32,476

Manufacturing and miscellaneous works expenses 3,64,32,425 2,94,07,703

Miscellaneous expenses 5,53,12,899 4,94,11,093

3,03,12,04,907 2,92,08,32,254Less: Cost of own manufacturedmoulds, machinery, etc. capitalised (37,18,078) (30,23,461)

3,02,74,86,829 2,91,78,08,793

# (Refer note 1 (o) schedule 13)

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(12) Interest onYear ended Year ended

March 31, 2010 March 31, 2009Rs. Rs.

Term loans 2,11,36,706 1,96,66,551

Fixed deposits * 1,18,55,855 1,00,24,332

Others 4,65,72,713 5,28,93,187

7,95,65,274 8,25,84,070

* Includes interest of Rs. 7,11,250 ; (previous year Rs. 1,50,000) related to Managing Director.

(13) Notes to the accounts

1. Significant Accounting Policies

(a) Accounting conventionThe financial statements are prepared under the historical cost convention in accordance with applicable mandatoryaccounting standards and relevant presentational requirements of the Companies Act, 1956.

(b) Use of estimatesThe preparation of financial statements in conformity with generally accepted accounting principles requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent liabiities at the date of the financial statements and the reported amounts of revenueand expenses during the reporting period. Examples of such estimates include provision for doubtful debts,employee benefits, assessment of income taxes and useful lives of fixed assets. Actual results could differ fromthose estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions toaccounting estimates are recognised in the period in which the estimate is revised if the revision affects onlythat period or in the period of the revision and future periods if the revision affects both current and futureperiods.

(c) Fixed assetsFixed assets are stated at cost less accumulated depreciation. Cost of acquisition/construction includesfreight, duties, taxes and incidental expenses incurred until installation/commissioning of the asset.

(d) DepreciationFixed assets are depreciated on the written down value method except for additions from April 1, 1983 of plant,machinery and electrical installation at one of the unit which are depreciated on the straight line method.Depreciation is charged at the rates specified in schedule XIV to the Companies Act, 1956. Depreciation iscalculated on a pro-rata basis, except in the case of assets costing upto Rs. 5000 each, where each suchasset is fully depreciated in the year of purchase. No amortisation is made in respect of leasehold land being along lease.

(e) InvestmentsThe Investments are long term investments and are stated at cost less provision for permanent diminution, ifany. Immovable properties held as investments are depreciated on the written down value method at the ratesspecified in schedule XIV to the Companies Act, 1956.

(f) InventoriesStores, spares and loose tools are valued at cost or under. Stock-in-trade is valued at the lower of cost and netrealisable value. Cost is arrived at on the weighted average basis. Appropriate share of labour and overheads areadded in the case of stock in process and finished goods.

(g) State excise duty

The state excise duty payable on finished goods is accounted for on the clearance of goods from the factory

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(13) Notes to the accounts (Contd.)

premises or bonded warehouses. The amount of state excise duty payable on finished goods not cleared fromthe factory premises and bonded warehouses as at the year end is not determinable as it varies according tothe places to which the goods will be despatched. However, non-provision of this liability does not affect theprofit for the year.

(h) Employee benefits

Company’s contributions paid/ payable during the year to provident fund, employee pension scheme andemployees’ state insurance corporation are recognized in the profit and loss account. For the Provident FundTrust administered by the Company, the Company is liable to meet the shortfall, if any, in payment of interest atthe rates declared by the Central Government, such shortfall being recognized in the year of determination thereof.

Provision for gratuity and compensated absences are determined on an actuarial basis at the end of the yearand are charged to revenue each year. Actuarial gains and losses are recognised in full in the profit and lossaccount in the year in which they occur.

(i) Research and developmentCapital expenditure on research and development is included in fixed assets and treated accordingly. Revenueexpenses are charged to the respective revenue heads in the year in which they are incurred.

(j) Revenue recognition

- Sales are recognised on dispatch of goods to customers, unless the contract provides otherwise.- Rents and royalties are recognised on accrual basis in accordance with the terms of the agreements.- Dividends are accounted for as and when the Company’s right to receive payment is established.- Export incentives are accounted for on accrual basis.

(k) Foreign currency transactions

Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transactions.Monetary items (assets and liabilities) denominated in foreign currency are translated into rupees at the exchangerates prevailing on the balance sheet date. Exchange differences in translation of foreign currency assets andliabilities and realized gains and losses on settlement of foreign exchange transactions are recognized in theprofit and loss account.

(l) Borrowing costBorrowing costs that are directly attributable to the acquisition or construction of a qualifying asset is capitalizedas a part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in whichthey are incurred.

(m) Taxation

Provision for current taxation is ascertained on the basis of assessable profits computed in accordance with theprovisions of the Income-tax Act, 1961.Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the differencebetween taxable income and accounting income that originate in one period and are capable of reversal in oneor more subsequent periods. Deferred tax assets are recognised on unabsorbed depreciation and carriedforward of losses based on virtual certainty that sufficient future taxable income will be available against whichsuch deferred tax assets can be realised.

(n) Provisions and contingent liabilities

Provisions involving substantial degree of estimation in measurement are recognised when there is a presentobligation as a result of past events and it is probable that there will be an outflow of resources. Contingentliabilities are not recognised but are disclosed in the notes.

(o) Miscellaneous expenditure

Payments made under the Voluntary Retirement Scheme upto March 31, 2009, including the additional liabilitiestowards leave encashment and gratuity, arising pursuant to Voluntary Retirement Scheme, are amortised on apro-rata basis over the residual period upto March 31, 2010.

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(14) Notes to the accounts (Contd.)As at As at

March 31, 2010 March 31, 2009Rs. Rs.

2. Contingent liabilities not provided for *In respect of

(a) Excise, customs duty, service tax and penalty/Interest demands 3,26,13,082 1,97,62,941

(b) Income-tax and surtax matters(excluding for those matterswhere a favourable order isavailable for other years) 4,23,94,875 4,75,76,069

(c) Sales tax matters 7,92,40,303 7,05,74,820

(d) Claims against the company not acknowledged as debts 3,05,96,767 2,34,09,704

* all the above matters are subject to legal proceedings in the ordinarycourse of business. The legal proceedings, when ultimately concludedwill not, in the opinion of management, have a material effect on resultsof operations or financial position of the Company.

3. Estimated amount of contracts remaining to be executed on capitalaccount (net of capital advances of Rs.Nil; previous yearRs.3,00,000 shown under the head loans and advances) and notprovided for

4. Excise duty attributable to finished goods sold during the year is reducedfrom Sales in the Profit and Loss Account. Increase/ (decrease) inexcise duty on finished goods has been shown under the headManufacturing and other expenses in schedule 11.

5. In respect of the lease hold land at Salempur Industrial Area, Hathras,Uttar Pradesh, purchased from the U.P. State Industrial DevelopmentCorporation Limited (UPSIDC) on installment payment basis, physicalpossession of 330 acres (approximately) of land out of the total 830acres is yet to be received from UPSIDC. Although the possessionletter for the entire piece of land has been issued by UPSIDC, in view ofclaims on 330 acres of land costing Rs.35,662,397 (includingRs.14,091,309 lying under capital work in progress) by ForestDepartment and certain farmers, the Company has not paid theinstallments due to UPSIDC, for which UPSIDC has served a notice toterminate the lease deed and forfeit the amount already paid. TheCompany had filed a writ petition in the High Court of Allahabadchallenging the said notice along with waiver of interest claimed byUPSIDC as only part possession of land has been given. The HighCourt vide its order dated September 4, 2009 has disposed off thepetition with a direction to UPSIDC to take a final decision on theobjections raised by the Company in accordance with the law and thematter is presently pending with UPSIDC. The Management is confidentthat the matter would be rescinded in favour of the Company.

- 5,71,922

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(14) Notes to the accounts (Contd.)

Year ended Year endedMarch 31, 2010 March 31, 2009

Rs. Rs.6. Based on the information available with the Company the balance

due to Micro, Small and Medium Enterprises as defined under

the "The Micro, Small and Medium Enterprises Development

Act, 2006" is Rs.Nil; (previous period Rs.Nil). Further, no interest

during the year has been paid / payable under the terms of the

"Micro, Small and Medium Enterprises Development Act, 2006".

7. Donations made directly by the Company

Mohan Free Canteen 43,181 29,912

Others 43,328 1,20,092

Charity 1,48,765 1,10,365

8. Auditors’ remuneration (including for branch auditors and

also including service tax)

a) As auditors

i) Audit fees 22,61,000 22,61,000

ii) Reimbursement of expenses 1,59,419 1,46,229

b) In other capacity

i) Fees for limited reviews, special reports,

certificates,etc. 11,20,440 9,83,646

ii) Tax audit fees 10,000 10,000

9. Managerial remuneration

Salaries and allowances 42,93,500 41,13,500

Contribution to provident funds 5,15,220 4,93,620

Perquisites 25,92,517 26,12,193

Directors sitting fees 2,70,000 2,40,000

76,71,237 74,59,313

Provision for incremental gratuity liability in respect of a whole

time Director has not been considered above, since the provision

is based on an acturial basis for the Company as a whole.

Computation of net profit in accordance with section 198 of the

Companies Act, 1956 has not been given as in view of

inadequancy of profits, remuneration has been paid in

accordance with schedule XIII to the Companies Act, 1956.

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(14) Notes to the accounts (Contd.)

10. Earnings/(losses) per share

Year ended Year endedMarch 31, 2010 March 31, 2009

Rs. Rs.

Profit/(loss) for the year, per profit and loss account (3,11,16,371) 35,71,744

Weighted average number of equity shares (Nos.) 85,08,479 85,08,479

Basic and diluted earnings/(losses) per share in rupees(face value - Rs. 5 per share) (3.66) 0.42

11. Related party disclosures under Accounting Standard-18

A. Name of related party and relationship

i) Associate Companies : National Cereals Products Limited

(NCPL), Mohan Closures Limited (MCL), Himalayan Brewery

Limited (HBL)

ii) Key Managerial Personnel: Brig. (Dr.) Kapil Mohan,

Mr. Hemant Mohan and Mr. P.D.Goswami.

iii) Relatives of Key Managerial Personnel : Mrs. Pushpa Mohan

(Wife of Brig. (Dr.) Kapil Mohan), Mrs. Seema Bakshi (Daughter

of Brig. (Dr.) Kapil Mohan), Mrs. Usha Mohan (Mother of Mr.

Hemant Mohan), Mrs. Poonam Narang (Sister of Mr. Hemant

Mohan), Mr. Vinay Mohan (Brother of Mr. Hemant Mohan), Mrs.

Molina Chandra (Sister of Mr. Hemant Mohan), Mrs. Satya

Goswami (Wife of Mr. P.D.Goswami) and Mrs.Veena Malik

(Daughter of Mr. P.D Goswami)

iv) Enterprises over which Key Managerial Personnel and/or their

relatives exercise significant influence : Mohan Rocky Springwater

Breweries Limited (Brig. (Dr.) Kapil Mohan and Mr. Vinay Mohan

are Directors), Seema Polutry Farm, Mohan Dairy Farm and

New Dairy Farm (proprietory concerns of Brig. (Dr.) Kapil

Mohan), Modern Dairy Farm (proprietory concern of Mrs. Pushpa

Mohan), Trade Links Private Limited (Mr. Vinay Mohan is a

whole time Director), Mohan Shakti Trust (Brig. (Dr.) Kapil

Mohan is Chairman, Mr. Hemant Mohan and Mr. P.D. Goswami

are Trustee) and Narinder Mohan Foundation (Brig. (Dr.) Kapil

Mohan is Chairman and Mr. Hemant Mohan is Trustee)

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(14) Notes to the accounts (Contd.)

11 . Related party disclosures under Accounting Standard-18 (contd.)

B. Transactions with related parties referred to in - (A)Year ended Year ended

March 31, 2010 March 31, 2009Rs. Rs.

i) Transactions with Associate Companies

Particulars

Sales (NCPL) - 99,840Sales (MCL) 15,713 21,281Purchases - NCPL 7,50,31,428 5,01,56,277

- MCL 1,16,34,540 98,80,200

Charges for use of buildings and recoveries for services, etc. - NCPL 34,64,264 49,72,164

Rent income - NCPL 24,00,000 24,00,000

- MCL 1,20,000 1,20,000Expenses recovered (NCPL) 5,20,405 3,01,747Expenses recovered (MCL) 4,04,171 1,84,927Expenses incurred on Company's behalf reimbursed to - NCPL 13,08,821 2,87,278Interest incurred on Company's behalf reimbursed to - NCPL 28,59,865 17,82,077Balances outstanding as at the year endPayable - NCPL 8,11,68,388 4,28,08,224 - MCL 14,03,996 21,05,245Receivable - HBL 7,79,582 7,79,582 Provision for doubtful debts (HBL) (7,79,582) (7,79,582)

ii) Transactions with Key Managerial Personnel

Interest on fixed deposit taken 7,14,525 1,53,500Remuneration - (Refer note 9) 74,01,237 72,19,313Balances outstanding as at the year end Payable 12,28,082 9,81,785 Fixed deposits taken 1,15,30,000 15,30,000

iii) Transactions with relatives of Key Managerial Personnel

Particulars

Interest on fixed deposit taken 2,83,611 2,64,650Sitting fees to a non-working director 30,000 25,000

Balances outstanding as at the year end Fixed deposits taken 26,44,500 26,44,500

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(14) Notes to the accounts (Contd.)

11 . Related party disclosures under Accounting Standard-18 (contd.)Year ended Year ended

March 31, 2010 March 31, 2009Rs. Rs.

iv) Transactions with enterprises over which Key Managerial Personnel

and / or their relatives exercise significant influence

Purchases of finished goods

- Mohan Rocky Springwater Breweries Limited 68,96,83,137 59,11,72,185

Purchases of services

- Narinder Mohan Foundation 9,34,906 10,63,648

Sales

- Mohan Rocky Springwater Breweries Limited 2,00,02,373 1,56,93,990

- Trade Links Private Limited 18,25,82,035 17,59,68,023

Sale of Land to Narinder Mohan Foundation - 12,00,00,000

Commission to a selling agent

- Trade Links Private Limited 1,95,22,954 1,82,59,105

Breakage allowance to a selling agent

- Trade Links Private Limited 86,23,955 74,51,218

Rent income 1,38,400 1,10,400

Expenses recovered

- Narinder Mohan Foundation 20,684 20,314

- Mohan Rocky Springwater Breweries Limited 3,952 99,726

- Trade Links Private Limited 23,90,145 24,70,244

- Others 2,49,492 64,800

Expenses incurred on company's behalf reimbursed

- Mohan Rocky Springwater Breweries Limited 73,18,913 44,30,492

- Trade Links Private Limited 5,90,52,748 2,69,36,862

Balances outstanding as at the year end

Receivable

- Mohan Rocky Springwater Breweries Limited 5,85,38,228 6,44,82,918

- Trade Links Private Limited 7,23,49,512 6,64,08,317

Payable

- Mohan Shakti Trust 1,60,00,325 1,46,68,784

- Narinder Mohan Foundation 30,69,881 26,55,659

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(13) Notes to the accounts (Contd.)

12. Segment reporting

A. Business segments

Based on the guiding principles given in Accounting Standard (AS) - 17 'Segment Reporting' notified by theCompanies (Accounting Standard) Rules, 2006, the Company's business segments include : Alcoholic products(including whiskies, brandies, gins, beers, rums and glass bottles etc.) and Non-alcoholic products (includingjuice, vinegar, mineral water, breakfast foods and malt extract etc.).

B. Geographical segments

Since the Companies activities / operations are primarily within the country and considering the nature ofproducts / services it deals in, the risks and returns are same and as such there is only one geographicalsegment.

C. Segment accounting policies

In addition to the significant accounting policies applicable to the business segment as set out in note 1 ofSchedule 13 'Notes to the Accounts', the accounting policies in relation to segment accounting are asunder :

a. Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of operatingcash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as directoffsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally ofcreditors and accrued liabilities. Segment assets and liabilities do not include investments, share capital,reserves and surplus, loan funds, dividends payable, income-tax (current, deferred and fringe benefit tax)and certain other assets and liabilities not allocable to the segments on a reasonable basis. While mostof the assets/liabilities can be directly attributed to individual segments, the carrying amount of certainassets / liabilities pertaining to two or more segments are allocated to the segments on a reasonable basis.

b. Segment revenue and expenses

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All othersegment revenue and expenses are directly attributable to the segments.

c. Unallocated expenses

Unallocated expenses represents general administrative expenses, head-office expenses and otherexpenses that arise at the Company level and relate to the Company as a whole. As such, theseexpenses have not been considered in arriving at the segment results.

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53

(13) Notes to the accounts (Contd.)

12. Segment reporting (Contd.)

Year ended March 31, 2010 Year ended March 31, 2009

PARTICULARS ALCOHOLIC NON-ALCOH. TOTAL ALCOHOLIC NON-ALCOH. TOTALRs. Rs. Rs. Rs. Rs. Rs.

Segment revenue

External sales (includingexcise duty) 3,52,08,80,741 32,80,19,111 3,84,88,99,852 3,92,98,42,349 30,08,42,168 4,23,06,84,517Other income (excludinginterest income) 7,88,61,751 63,46,185 8,52,07,936 5,85,40,616 1,13,58,782 6,98,99,398

Total 3,59,97,42,492 33,43,65,296 3,98,83,82,965 31,22,00,950

Unallocated other income 1,36,94,872 13,33,93,313

Total revenue 3,94,78,02,660 4,43,39,77,228

Segment results 2,67,23,468 4,56,30,529 7,23,53,997 (4,00,77,946) 3,92,17,503 (8,60,443)

Unallocated expenses (4,10,88,176) 8,38,73,226(net of income)Interest income 31,33,101 58,58,461

Profit for the year before interest and tax 3,43,98,922 8,88,71,244

Interest expense (7,95,65,274) (8,25,84,070)

Profit/(loss) for the year before tax (4,51,66,352) 62,87,174

Provision for - current tax - 19,00,000 - deferred tax (1,17,43,805) (39,52,238) - fringe benefit tax - 44,75,719

Profit/(loss) for the year after tax (3,34,22,547) 38,63,693Provision for taxation relatingto earlier years (net) (23,06,176) 2,91,949

Profit/(loss) for the year (3,11,16,371) 35,71,744

Other informationSegment assets 1,71,33,45,966 6,89,71,805 1,78,23,17,771 1,70,29,76,880 7,13,24,234 1,77,43,01,114Unallocated assets 13,87,54,643 10,89,80,986

Total assets 1,92,10,72,414 1,88,32,82,100

Segment liabilities 60,40,15,465 5,26,40,225 65,66,55,690 65,05,76,430 6,09,54,635 71,15,31,065Share capital and reserves 33,63,59,354 36,74,75,725Secured and unsecured loans 86,63,90,420 74,12,60,806Unallocated liabilities 6,16,66,950 6,30,14,504

Total liabilities 1,92,10,72,414 1,88,32,82,100

Capital expenditure 1,15,57,585 42,09,210 1,57,66,795 4,35,18,154 17,31,808 4,52,49,962Depreciation 4,03,89,000 28,29,764 4,32,18,764 3,87,41,109 17,37,364 4,04,78,473Non cash expenses otherthan depreciation 31,33,591 2,74,035 34,07,626 12,95,542 6,79,103 19,74,645

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(13) Notes to the accounts (Contd..)

13. Employee Benefits.

The Company has recognised the various employee benefits provided to employees as under

i) Employee plansYear ended Year ended

March 31, 2010 March 31, 2009Rs. Rs.

Employers' contribution to

a) Provident fund 85,20,831 95,26,451b) Pension scheme 85,28,309 1,10,44,221c) Employee's state insurance corporation 59,72,955 77,24,913

ii) Defined benefit plans

a) Gratuityb) Compensated absences – Earned leave

In accordance with AS - 15 (revised 2005), acturial valuation was done in respect of the aforesaid definedbenefit plans and details of the same are given below

Amount in Rs.

Gratuity Compensated absences(Funded) (Unfunded)

Particulars Year ended Year ended Year ended Year endedMarch 31, 2010 March 31, 2009 March 31, 2010 March 31, 2009

Principal Assumptions

Discount rate (per annum) 7.5% 7% 7.5% 7%

Future salary increase 5% 4.5% 5% 4.5%

Expected rate of return on plan assets 9.30% 9.30% - -

In service mortality LIC (1994-96) LIC (1994-96) LIC (1994-96) LIC (1994-96)duly modified duly modified duly modified duly modified

I. Expense recognised inprofit and loss account

Current service cost 49,36,060 49,32,261 8,79,998 8,18,482

Interest cost 87,74,140 88,73,287 9,41,738 10,05,536

Expected return on plan assets (72,34,263) (86,91,773) - -Net actuarial (gain)/loss recognised in the year 1,29,65,723 67,83,461 (4,69,253) (7,75,900)

Total expense * 1,94,41,660 * 1,18,97,236 13,52,483 10,48,118

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(13) Notes to the accounts (Contd..)

13. Employee Benefits. (Contd.)

Gratuity Compensated absences(Funded) (Unfunded)

Particulars Year ended Year ended Year ended Year endedMarch 31, 2010 March 31, 2009 March 31, 2010 March 31, 2009

II. Net asset/(liability) recognisedin the balance sheet

Present value of Defined benefit obligation 11,63,66,808 11,69,88,531 1,39,08,986 1,25,56,503

Fair value of plan assets 9,27,24,392 7,77,87,775 - -

Funded status {surplus/(deficit)} (2,36,42,416) (3,92,00,756) (1,39,08,986) (1,25,56,503)

Net asset/(liability) (2,36,42,416) (3,92,00,756) (1,39,08,986) (1,25,56,503)

III. Change in the present value ofobligation during the year

Present value of obligation as at thebeginning of the year 11,69,88,531 12,67,61,236 1,25,56,503 1,43,59,405

Interest cost 87,74,140 88,73,287 9,41,738 10,05,536

Current service cost 49,36,060 49,32,261 8,79,998 8,18,482Benefits paid (2,72,97,646) (2,94,71,713) - (28,51,020)

Actuarial (gains) / losses on obligation 1,29,65,723 58,93,460 (4,69,253) (7,75,900)

Present value of obligation as at theend of the year 11,63,66,808 11,69,88,531 1,39,08,986 1,25,56,503

IV. Change in the fair value of planassets during the year

Fair value of plan assets as at thebeginning of the year 7,77,87,775 9,34,89,924 - -Expected return of plan assets 72,34,263 86,91,773 - -

Actuarial gains / (losses) - (8,87,001) - -

Contribution * 3,50,00,000 * 59,64,792 - -

Benefits paid (2,72,97,646) (2,94,71,713) - -

Fair value of plan assets as at the endof the year 9,27,24,392 7,77,87,775 - -

V. Best estimate of contribution expectedto be paid to plan during next year 36,87,154 (4,91,554) - -

VI. Detail of plan assets :- Funded with LIC #

* Excluding premium of Rs. NIL; (previous year Rs.6,28,391) paid to LIC for additional benefits.# The plan assets are maintained with Life Insurance Corporation of India Gratuity Scheme. The details of

investments maintained by the LIfe Insurance Corporation are not made available to the Company and havetherefore not been disclosed.

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(13) Notes to the accounts (Contd..)

13. Employee Benefits (Contd..)

Amount in Rs.

Gratuity Compensated absencesParticulars (Funded) (Unfunded)

Year ended Year ended Year ended Year ended Year ended Year endedMarch 31, March 31, March 31, March 31, March 31, March 31,

2010 2009 2008 2010 2009 2008

VII.

Present value of Defined benefitobligation as at the end of the year 11,63,66,808 11,69,88,531 12,67,61,236 1,39,08,986 1,25,56,503 1,43,59,405

Fair value of plan assets asat the end of the year 9,27,24,392 7,77,87,775 9,34,89,924 - - -

Funded status [surplus/(deficit)]as at the end of the year (2,36,42,416) (3,92,00,756) (3,32,71,312) (1,39,08,986) (1,25,56,503) (1,43,59,405)

Actuarial (gains) / losses ondefined benefit obligation 1,29,65,723 58,93,460 67,06,304 (4,69,253) (7,75,900) (3,55,607)

Actuarial gains / (losses) on planassets - (8,87,001) (5,97,776) - - -

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(13) Notes to the accounts (Contd.)

14.(a) Licensed capacity, installed capacity and actual production___________________________________________________________________________________________________________________________

Product Unit Licensed capacity Installed capacity(a) ProductionAs per available licencesYear ended Year ended As at As at Year ended Year ended

March 31, March 31, March 31 March 31, March 31, March 31,2010 2009 2010 2009 2010 2009

___________________________________________________________________________________________________________________________

Beer (Net) KL 12,006 12,006 48,500 48,500 25,169 21,871

Spirit LPL 1,66,19,468(b) 1,66,19,468(b) 1,81,86,679 1,81,86,679 5,32,809 13,58,393

Juices and canned products KL 3,000 3,000 3,000 3,000 579 532

Maize, rice and corn flakes MT 700 700

Wheat flakes MT 350 350 3,942 3,942 3,458 3,389

Pearl barley MT 200 200 - - - -

White oats MT 200 200 - - - -

Wheat porridge MT No licence No licence 150 150 115 57

Yeast (Different types) MT 842 842 - - - -

Liquid and dry Co2 gas MT 772 772 789 789 - 2(c)

Malt extract MT 1,800 1,800 1,800 1,800 - -

Apple cider KL 272(e) 272(e) - - - -

Glass bottles MT 22,500 22,500 40,880 40,880 26,816(d) 26,826(d)

Ice MT No licence No licence 17,000 17,000 - -

Mineral water and mineral water soda KL 3,250 3,250 8,250 8,250 - -

Castings MT 500 500 240 240 28(d) 29(d)

___________________________________________________________________________________________________________________________

(a) As certified by the officials of the Company and accepted by the Auditors without verification, being atechnical matter.

(b) Includes 17,43,000 LPL transferred to Macdonald Mohan Distillers Limited, a joint venture company which isunder liquidation.

(c) Includes production for captive consumption but does not include 302 MT (previous year 256 MT) producedas a by-product in one unit and consumed by the same unit.

(d) Includes production for captive consumption.

(e) Within overall licensed capacity of beer.

} }

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(14) Notes to the accounts (Contd.)

14.(b) Particulars in respect of opening and closing stocks and sales.

_____________________________________________________________________________________________________________________

Product Unit Opening stock Closing stock Sales (including excise duty)

Quantity Value Quantity Value Quantity Value Rs. Rs. Rs.

_________________________________________________________________________________________________________________________

Beer KL 1,470 3,33,61,265 1,355 3,62,64,332 29,931 1,25,30,84,860

(1,197) (2,87,36,290) (1,470) (3,33,61,265) (24,837) (1,02,54,34,565)

Spirit LPL 48,52,475 21,74,83,074 44,70,209 20,34,06,314 1,20,32,350 1,70,38,84,613

(54,11,837) (21,85,95,344) (48,52,475) (21,74,83,074) (1,49,33,585) (2,31,55,36,948)

Juices and canned products KL 68 22,59,754 66 22,06,671 580 2,08,55,602

(49) (17,05,175) (68) (22,59,754) (514) (1,74,21,853)

Maize, rice and corn flakes MT 148 81,40,359 126 71,38,360 3,480 26,88,65,646

(151) (82,35,179) (148) (81,40,359) (3,401) (25,75,01,063)

Wheat porridge MT 7 2,25,459 3 94,411 120 30,23,927

(2) (44,384) (7) (2,25,459) (52) (19,14,352)

Liquid and dry Co2 gas MT 3 13,196 3 12,888 - -

(2) (8,721) (3) (13,196) (1) (12,022)

Glass bottles MT 5,243 7,54,35,752 3,973 5,68,24,542 21,684 36,51,45,232

(5,360) (7,02,31,500) (5,243) (7,54,35,752) (21,375) (36,65,67,037)

Miscellaneous - - - - - 23,40,39,972

- - - - - (24,62,96,677)

–––––––––––––––– ––––––––––––––– ––––––––––––––––––

33,69,18,859 30,59,47,518 3,84,88,99,852

(32,75,56,593) (33,69,18,859) (4,23,06,84,517)

–––––––––––––––– ––––––––––––––– ––––––––––––––––––

Previous year’s figures are indicated in brackets.

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(14) Notes to the accounts (Contd.)

15. Raw materials consumed

Unit Year ended Year endedMarch 31, 2010 March 31, 2009

Particulars Qty. Value (Rs.) Qty. Value (Rs.)

Malt and malt extract MT 4,581 10,64,64,536 4,328 10,48,41,977Barley, maize, wheat, rice flakes, etc. MT 8,786 10,39,04,392 7,508 7,54,17,106Molasses MT - - 2,306 74,51,998Raisins MT 92 20,53,464 94 19,89,709Hops and hop pellets MT 8 1,59,32,832 7 1,99,48,177Sugar MT 1,529 4,82,31,525 1,468 2,86,12,061Soda ash MT 3,836 5,94,84,802 3,696 6,51,77,268Sundry chemicals and essences MT 4,462 1,25,08,056 4,256 1,16,61,287Silica sand MT 12,537 1,97,22,265 11,608 1,64,41,112Cullet # MT 10,126 4,55,55,842 10,663 4,64,55,587Flavouring Material KL 140 2,47,06,469 165 3,23,57,864Other fruits, vegetables, juices, etc MT 269 41,27,004 170 24,63,537

44,26,91,187 41,28,17,683

# In addition 726 MT (previous year 856 MT) was consumed out of own generation.

Year ended Year endedMarch 31, 2010 March 31, 2009

Particulars Value (Rs.) % of total Value (Rs.) % of totalconsumption consumption

16. (i) Value of raw materialsconsumed

Imported 2,33,69,783 5.28 2,68,74,712 6.51Indigenous 41,93,21,404 94.72 38,59,42,971 93.49

44,26,91,187 100.00 41,28,17,683 100.00

(ii) Value of stores and sparesconsumed #

Imported 61,31,121 27.61 16,46,667 5.45Indigenous 1,60,75,058 72.39 2,85,85,345 94.55

2,22,06,179 100.00 3,02,32,012 100.00

# The above figures do not include consumption for repairs, etc. debited to the relevant accounts, as the amountsare not readily ascertainable.

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(14) Notes to the accounts (Contd.)

17. Purchases of finished goods:

Year ended Year endedMarch 31, 2010 March 31, 2009

Particulars Unit Quantity Value Rs. Quantity Value Rs.

Beer KL 4,656 18,35,21,280 3,248 12,66,15,890

Spirit LPL 1,15,67,014 79,64,79,388 1,36,50,712 75,32,20,588

Corn Flakes MT - - 9 4,91,763

98,00,00,668 88,03,28,241

18. CIF value of imports

Raw materials 1,87,74,391 2,29,37,944

Stores and spares 55,17,882 20,68,980Capital Goods - 22,17,790

19. Expenditure in foreign currency on cash basis

Travel 2,98,314 4,45,378

Subscription - 6,420

20. Earnings in foreign exchange

F.O.B. value of goods exports 7,79,83,337 7,44,87,999

21. The details of dues of sales tax, excise duty, customs duty and income tax which have not been deposited/paid under protest on account of dispute as at March 31, 2010 are as follows :-

Name of Nature of the Forum where dispute is pending Amount Amount paid Period to which thethe Statute dues (Rs.)* under protest amount relates

(Rs.)

Sales tax Sales tax Appellate authority up to 50,76,329 1,10,000 1975 to 1976, 1977 to 1979,laws Commissioner's level 1987 to 1989, 1999-2000,

2007-2008, 2008-2009

Sales tax Appellate Tribunal 14,76,370 - 1991 to 1993,1994 to 1996,1997 to 1999

High Court 11,28,829 - 1984 to 1986

Trade tax Appellate authority up to 79,46,556 - 2005 to 2008

Commissioner's level

Appellate Tribunal 16,507 - 1994 to 1996

High Court 20,40,308 - 1984 to 1986, 1987 to 1989,1990 to 1993

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(14) Notes to the accounts (Contd.)

Name of Nature of the Forum where dispute is pending Amount Amount paid Period to which thethe Statute dues (Rs.)* under protest amount relates

(Rs.)

State Excise Excise duty High Court 1,49,30,064 31,30,724 1978 to 1981, 1983 to 1986laws 1988 to 2002

Central Excise Excise duty Appellate authority up to 26,53,110 - 2005 to 2007laws Commissioner's level

Service tax Service tax Appellate authority up to 1,00,92,462 - 2004 to 2008laws Commissioner's level

Custom laws Custom duty CESTAT 61,03,075 - 1994 to 2004

Income tax Income tax Income tax 4,23,94,875 3,89,95,205 2002 to 2006laws Appellate Tribunal

* Amount as per demand orders, including interest and penalty, wherever quantified in the order.

The following matters, which have been excluded from the table above, have been decided in favour of theCompany but the concerned authorities have preferred appeals at higher level

Name of Nature of the Forum where dispute is pending Amount Period to which thethe Statute dues (Rs.) amount relates

Sales tax Sales tax Sales Tax appellate Tribunal 3,58,07,626 1987 to 1989, 1990 to 1993

laws

State Excise Excise duty Supreme Court 1,18,61,246 1988 to 2002laws

Central Excise duty Supreme Court 39,05,533 2003-2004Excise laws

22. Foreign currency exposures that are not hedged by derivative instruments or otherwise is as follows

Particulars As at March 31, 2010 As at March 31, 2009

Amount in Amount Amount in Amountforeign currency (Rs.) foreign currency (Rs.)

Sundry debtors 2,12,300 USD 95,62,415 1,02,365 USD 51,55,265

23. Previous year's figures have been recast, wherever necessary.