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Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 15
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
DIRECTORS’ REPORT TO THE SHAREHOLDERS
_______________________________________________________________________________________
The Directors are pleased to present before you their Second Annual Report on the operations
of the Company along with the Audited Accounts for the year ended 31st March 2016.
The Company was incorporated on 03rd July 2014 as a Producer Company under the
provisions of Part IXA of the Companies Act, 1956 and the Companies Act, 2013 to the extent
applicable in the State of Andhra Pradesh to undertake the business of pooling, purchasing,
processing of milk of the Members, marketing of the same and to deal in activities that are part
of or incidental to any activity related thereto.
Financial Results
The summarized Financial Results are as under:
Particulars
For the year ended
31st March 2016
(Rs. in Lakh)
For the year ended
31st March 2015
(Rs. in Lakh)
Total Revenue 28,385.32 13,836.92
Total Expenses 28,097.43 13,775.52
Profit/(Loss) for the period before tax 287.89 61.40
Tax expenses 96.38 20.61
Profit/(Loss) for the period after tax 191.51 40.79
(From 3rd July 2014 to 31st March 2015)
We are pleased to inform that during the year under review, the Company has achieved a
turnover of Rs.28,385.32 Lakh as against Rs. 13,836.92 Lakh in the previous year.
During the year under review, the total revenue generated wasRs.28,385.32 Lakh, which
includes other incomes earned of Rs. 43.60 Lakh. The total expenses incurred were Rs.28,097.43
Lakh as against Rs. 13,775.52 Lakh of previous year. Total expenses of Rs. 28,097.43 Lakh
including material expenses of Rs. 26,441.51 Lakh and financial expenses of Rs.109.85 Lakh and
depreciation and amortisation expense of Rs.215.40 Lakh. This has resulted a profit before tax
(PBT) of Rs.287.89 Lakh and net profit after tax (PAT) of Rs.191.51 Lakh.
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 16
Limited Return (Dividend)
The Board of Directors are pleased to recommend limited return (dividend) at the rate of Rs.
10/- (Rupees Ten only) per equity share absorbing Rs. 52.52 Lakh (including Dividend
Distribution Tax of Rs. 8.88 Lakh).The limited return (dividend) will be paid to those members,
whose names appear in the Register of Members of the Company as on 31stMarch 2016.
Transfer to General Reserve
Pursuant to provisions of article no 11.10 of the Articles of Association of the Company read
with Section 581ZI of the Companies Act 1956, the Board proposes to transfer Rs. 139 Lakh to
the credit of General Reserve in the Balance Sheet.
Procurement of Milk
The Company is procuring liquid milk from Chittoor and Anantapur Districts of Andhra Pradesh
covering 2,189 Milk Pooling Points. During the year under review, the Company procured 9.917
Crore Kgs of raw milk (with an average of 2.71 Lakh Kgs per day) from its members. The
Company continues to pay competitive price to its members towards the milk being procured.
Producer Institution Building (PIB)
New member enrolment exercise was initiated during December 2015 and able to enrol more
than 10,000 members. The total no. of Members as on 31st March 2016 is 56,640.
An Interface Workshop was conducted for the Board of Directors and Senior Professionals of
the Company in the Month of December 2015. A Yearly Orientation Programme was conducted
for the Board of Directors in the month of March 2016.Dr. N V Belavadi and Shri Sriram Singh
have facilitated the above workshop and programme.
During the year under report, the PIB department organized Member Awareness Programme,
Quality Clean Milk Production Programme, Producer Awareness Programme, Rural Youth
Awareness Programme, Rural School Awareness Programme, Orientation for Member Relations
Groups (MRGs) and Leadership Development programme in the operational area of the Company
under Village Based Milk Procurement System.
Sub Project Plans (SPP)
The Company had received approval for three Sub Project Plans from National Dairy
Development Board on 22nd April 2015. These three Sub Project Plans are:
1. Village Based Milk Procurement System
2. Ration Balancing Programme
3. Pilot model for viable Artificial Insemination delivery, and
Sub Project Plans are for a period of 2 years viz. FY 2015-16 and 2016-17 with a total grant-
in-aid of Rs. 4,102.26 Lakh.
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 17
Sales & Marketing
The Company launched Poly Packed Milk with the brand of “Shreeja” in 200 ml and 500 ml in
the retail market in October 2015.
Quality Assurance
Quality has played an important role in growth of the Company. The Company had organised
various training programmes for Lab Chemists of the Company to improve and maintain the
quality of Milk. The training programmes covered about the Milk testing methods, FSSAI
norms, Hygiene, Safety, Good Manufacturing Practices, and Clean Milk Production, Cleaning
in Place & Good Lab Practices to enhance the Milk Quality. The Company has put in place a
stringent quality mechanism to ensure safety and credibility.
ERP Implementation
The Company has implemented SAP an Integrated ERP system. The implementation and Go-
live was done on 01 March 2016, with the support of all departments in the Company,
especially the IT Department. The base modules implemented were Milk Procurement, Quality,
Material Management, sales & distribution and Finance. The remaining modules will be
implemented in the following year 2016-17. IMMS milk procurement software was also
implemented and gone live on the same day to complement the milk procurement module of
SAP.
Board of Directors
Appointments
Smt. Geddam Bharathi was inducted as Additional Director on the Board of the Company
effective from 30th June 2016.
Resignations
Smt. Bandapalli Usharani has resigned as a Director with effect from 13th August 2015.The
Board places on record the appreciation of services rendered by her as director of the Company.
Composition of Board of Directors and reappointment of Directors:
The Articles of Association of the Company (article 9.4) provide for the determination of criteria
for categorising members into different classes based on their patronage and representation of
such classes of members on the Board. Since, the Company is in its initial years of its
operations and completed its first full financial year. As per Article 9.5, the Board waived this
requirement for the first 3 years of the operations of the Company.
Smt. Lavanya Kumari Bojja, Smt. Sailaja Kampalle and Smt. Nirmala Thaluri, Directors of the
Company retires by rotation at this ensuing Annual General Meeting, and they being eligible,
offer themselves for Re-appointment. Your Board recommends their re-appointment as
Directors whose office shall be liable to retire by rotation. The necessary resolution is being
placed before the shareholders for their approval.
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 18
Proposed Appointments
Smt. Geddam Bharathi was inducted as Additional Directors on the Board of the Company 0n
30th June 2016. As per the provisions of the Companies Act, Smt. Geddam Bharathi holds office
only up to the date of ensuing Annual General Meeting of the Company. Approval of the
Shareholders is being sought for her appointment as Director at the ensuing Annual General
Meeting of the Company.
Membership/Voting Rights/ Share Capital
As at 31st March 2016, the paid up share capital was Rs.436.33 Lakh, whereas 56,640
members were appearing on the register of members of the Company. During the period under
review there is no cancellation or surrender of shares.
Voting Rights and attendance at AGM:
The ensuing Annual General Meeting is the 3rdAnnual General Meeting of the Company for
Second Financial year i.e., 2015-16. The voting rights shall be based on a single vote for every
member who has poured milk for at least 200 days and 500 litres in the Financial Year 2015-
16.
Directors Responsibility Statement
In accordance with section 217 (2AA) the Board of Directors of the Company informs the
members that:
a) in the preparation of annual accounts, the applicable accounting standards along with
proper explanation have been followed;
b) the directors have selected such accounting policies and applied them consistently and
made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company at the end of the Financial Year and the
profit for that period;
c) the directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the assets
of the company and for preventing and detecting fraud and other irregularities;
d) The directors have prepared the annual accounts on a going concern basis.
Internal Control System
The Company has in place the proper and adequate internal control system, which ensures
that all assets are safeguarded and protected and the transactions are authorized, recorded
and reported correctly. Pursuant to the Section 581ZF of the Companies Act, 1956, M/s. Ernst
& Young LLP, Chartered Accountants, has been appointed as Internal Auditors of the company,
who independently evaluate the adequacy of internal controls, and carry out the audit of
accounts of the company.
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 19
Auditors
M/s S.B. Billimoria& Co., Chartered Accountants, Statutory Auditors retire at the ensuing 3rd
Annual General Meeting and being eligible offers themselves for re-appointment. The
Company has received a certificate from the auditors to the effect that their reappointment if
made, would be in accordance with the provisions of the Companies Act.
Your Directors recommend the re-appointment of M/s S.B. Billimoria& Co., as Statutory
Auditors of the Company at the ensuing 3rd Annual General Meeting.
Particulars of Employees
Pursuant to Sections 217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees) Rules, 1975, none of the employees were in receipt of remuneration which in the
aggregate exceeds Rupees Sixty Lakh per annum or Rupees Five Lakh per month, as the case
may be, during the period under review.
Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange
Earnings and out go.
Particulars required to be furnished pursuant to Section 217(1)(e) of the Companies Act, 1956
read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,
1988:
(i) Part A and B of the Rules pertaining to Conservation of energy and Technology
absorption are presently not applicable to the Company.
(ii) Foreign Exchange earnings and outgo: Earnings – Nil;
Outgo – Nil.
Acknowledgement
The Board of Directors wish to convey their appreciation to members, business associates for
their support and contribution during the period under review. The Directors would also like to
thank bankers, employees, both internal and statutory auditors for their continued support to
the Company.
The Board of Directors acknowledge with gratitude the encouragement and support extended
by National Dairy Development Board, NDDB Dairy Services and Mother Dairy Fruit &
Vegetable Private Limited.
For and on Behalf of the Board of Directors
Place: Tirupati
Date: 05 August, 2016 Chairman
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 20
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of SHREEJA MAHILA MILK
PRODUCER COMPANY LIMITED (“the Company”), which comprise the Balance Sheet as at
31 March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then
ended, and a summary of the significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the
Companies Act, 2013 (“the Act) with respect to the preparation of these financial statements
that give a true and fair view of the financial position, financial performance and cash flows of
the Company in accordance with the accounting principles generally accepted in India,
including the Accounting Standards prescribed under Section 133 of the Act, as applicable.
This responsibility also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgements and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internal financial controls that were
operating effectively for ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial statements that give a true and
fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards
and matters which are required to be included in the audit report under the provisions of the
Act and the Rules made thereunderand the Order under section 143 (11) of the Act.
We conducted our audit of the financial statements in accordance with the Standards on
Auditing specified under Section 143(10) of the Act. Those Standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company’s preparation of the financial
statements that give a true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the appropriateness of the
accounting policies used and the reasonableness of the accounting estimates made by the
Company’s Directors, as well as evaluating the overall presentation of the financial statements.
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 21
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion on the financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us,
the aforesaid financial statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the accounting principles generally
accepted in India, of the state of affairs of the Company as at 31 March, 2016, and its profit and
its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow
Statement dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with the Accounting
Standards prescribed under section 133 of the Act, as applicable.
e) On the basis of the written representations received from the directors as on 31
March, 2016 taken on record by the Board of Directors, none of the
directors is disqualified as on 31March, 2016 from being appointed as a
director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer
to our separate Report in “Annexure A”. Our report expresses an unmodified
opinion on the adequacy and operating effectiveness of the Company’s internal
financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor’s Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in
our opinion and to the best of our information and according to the explanations
given to us:
i. The Company does not have any pending litigations which would impact
its financial position.
ii. The Company did not have any long-term contracts including derivative
contracts for which there were any material foreseeable losses;
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 22
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued
by the Central Government in terms of Section 143(11) of the Act, we give in
“Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the
Order.
3. As required by Section 581ZG of the Part IXA of the Companies Act, 1956 (in terms of
section 465 of the Companies Act, 2013, provisions of part IXA of the Companies Act are
applicable to a producer company in a manner as if the Companies Act, 1956 has not
been repealed), we give in “Annexure C” a statement on the matters specified in that
Section.
For S. B. BILLIMORIA & CO.
Chartered Accountants
(Firm Registration No. 101496W)
JitendraAgarwal
Partner
(Membership No. 87104)
Place: Gurgaon
Date: 05 August, 2016
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 23
ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ of
Our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-
section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over financial reporting of Shreeja Mahila Milk
Producer Company Limited (“the Company”) as of 31 March, 2016 in conjunction with our
audit of the financial statements of the Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Company’s management is responsible for establishing and maintaining internal financial
controls based on the internal control over financial reporting criteria established by the
Company considering the essential components of internal control stated in the Guidance Note
on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of
Chartered Accountants of India. These responsibilities include the design, implementation and
maintenance of adequate internal financial controls that were operating effectively for
ensuring the orderly and efficient conduct of its business, including adherence to company’s
policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the
accuracy and completeness of the accounting records, and the timely preparation of reliable
financial information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over
financial reporting based on our audit. We conducted our audit in accordance with the
Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the
“Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards
on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent
applicable to an audit of internal financial controls. Those Standards and the Guidance Note
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether adequate internal financial controls over financial
reporting was established and maintained and if such controls operated effectively in all
material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the
internal financial controls system over financial reporting and their operating effectiveness.
Our audit of internal financial controls over financial reporting included obtaining an
understanding of internal financial controls over financial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to providea
basis for our audit opinion on the Company’s internal financial controls system over financial
reporting.
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 24
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting
principles. A company's internal financial control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in
accordance with authorisations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorised acquisition,
use, or disposition of the company's assets that could have a material effect on the financial
statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting,
including the possibility of collusion or improper management override of controls, material
misstatements due to error or fraud may occur and not be detected. Also, projections of any
evaluation of the internal financial controls over financial reporting to future periods are
subject to the risk that the internal financial control over financial reporting may become
inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the
Company has, in all material respects, an adequate internal financial controls system over
financial reporting and such internal financial controls over financial reporting were operating
effectively as at March 31, 2016, based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated in
the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by
the Institute of Chartered Accountants of India.
For S. B. BILLIMORIA & CO.
Chartered Accountants
(Firm Registration No. 101496W)
Place: Gurgaon
Date: 05 August, 2016
(JitendraAgarwal)
Partner
(Membership No. 87104)
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 25
ANNEXURE “B”TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 2under ‘Reports on Other Legal and Regulatory Requirements’ section of our
report of even date)
i. In respect of its fixed assets :
a. The Company has maintained proper records showing full particulars, including
quantitative details and situation of the fixed assets.
b. The fixed assets were physically verified during the year by the Management in
accordance with a regular programme of verification which, in our opinion, provides for
physical verification of all the fixed assets at reasonable intervals. According to the
information and explanation given to us, no material discrepancies were noticed on such
verification.
c. According to the information and explanations given to us and the records examined by
us, the Company has constructed buildings on land taken on lease and the lease
agreements are in the name of the Company.
ii. Management at reasonable intervals and no material discrepancies were noticed on physical
verification.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited
Liability Partnerships or other parties covered in the register maintained under section 189
of the Companies Act, 2013.
iv. The Company has not granted any loans, made investments or provided guarantees and
hence reporting under clause (iv) of the CARO 2016 is not applicable.
v. According to the information and explanations given to us, the Company has not accepted
any deposits from the public, and hence reporting under clause (v) of the CARO 2016 is not
applicable.
vi. Having regard to the nature of the Company’s business / activities, reporting under clause
(vi) of CARO 2016 is not applicable.
vii. According to the information and explanations given to us, in respect of statutory dues:
a. The Company has generally been regular in depositing undisputed statutory dues
including Provident Fund, Employee’s State Insurance, Income Tax, Sales Tax,
Service Tax, Value Added Tax, Cess and other material statutory dues applicable to
it with the appropriate authorities. We are informed that the operations of the
Company during the year did not give rise to any liability for Customs Duty and
Excise Duty.
b. There are no undisputed amounts payable in respect of Provident Fund, Employee’s
State Insurance, Income Tax, Sales Tax, Value Added Tax, Service Tax, Customs
Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31 March,
2016 for a period of more than six months from the date they became payable.
c. There are no dues of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty
and Value Added Tax as on 31March 2016 on account of disputes.
viii. In our opinion and according to the information and explanations given to us, the Company
has not defaulted in the repayment of loans or borrowings to banks, financial institutions
and government. The Company has not issued any debentures.
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 26
ix. The Company has not raised moneys by way of initial public offer or further public offer
(including debt instruments) or term loans and hence reporting under clause (ix) of the
CARO 2016 Order is not applicable.
x. To the best of our knowledge and according to the information and explanations given to us,
no fraud by the Company and no material fraud on the Company by its officers or employees
has been noticed or reported during the year.
xi. The Company is a private company and hence the provisions of section 197 of the Companies
Act, 2013 do not apply to the Company.
xii. The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO
2016 Order is not applicable.
xiii. In our opinion and according to the information and explanations given to us the Company is
in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all
transactions with the related parties and the details of related party transactions have been
disclosed in the financial statements etc. as required by the applicable accounting standards.
xiv. The Company is registered under Chapter IXA of the Companies Act, 1956 and hence
reporting under clause (xiv) of CARO 2016 is not applicable.
xv. In our opinion and according to the information and explanations given to us, during the
year the Company has not entered into any non-cash transactions with its directors or
persons connected with him and hence provisions of section 192 of the Companies Act, 2013
are not applicable.
xvi. The Company is not required to be registered under section 45-I of the Reserve Bank of India
Act, 1934.
For S. B. BILLIMORIA & CO.
Chartered Accountants
(Firm Registration No. 101496W)
Place: Gurgaon
Date: 05 August, 2016
(JitendraAgarwal)
Partner
(Membership No. 87104)
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 27
ANNEXURE “C”TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 3 under ‘Reports on Other Legal and Regulatory Requirements’ section of our
report of even date)
i. The amount of debts due from sale of goods and services are as disclosed in note 16 to the
financial statements. According to the information and explanations given to us no debts are
considered as doubtful of recovery.
ii. According to the information and explanations given to us, cash on hand as at year-end has been
physically verified by the management and no discrepancies were noticed on such verification.
According to the information and explanations given to us, the Company does not hold any
investment securities.
iii. The details of assets and liabilities as at 31 March, 2016 are as per the financial statements of
the Company as at and for the year ended 31 March, 2016.
iv. In our opinion and according to the information and explanations given to us, the Company has
not done any transaction which appears to be contrary to the provisions of part IXA of the
Companies Act, 1956.
v. According to the information and explanations given to us, the Company has not granted any
loan to its directors.
vi. According to the information and explanations given to us, the Company has not given any
donations or subscriptions during the year.
For S. B. BILLIMORIA & CO.
Chartered Accountants
(Firm Registration No. 101496W)
Place: Gurgaon
Date: 05 August, 2016
(Jitendra Agarwal)
Partner
(Membership No. 87104)
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 28
SHREEJAMAHILA MILK PRODUCER COMPANY LIMITED
Notes forming part of the financial statements
1. Corporate information
Shreeja Mahila Milk Producer Company Limited (“the Company”) was incorporated on 3 July, 2014
under Part IXA of the Companies Act, 1956.
The Company has started the procurement operations in the state of Andhra Pradesh from 15
September, 2014. The Company procures milk directly from milk producers through Milk Pooling Points
in Districts of Chittoor and Ananthapur of Andhra Pradesh and sells to Mother Dairy Fruit and
Vegetable Private Limited. The Company also trades in cattle feed.
2. Significant accounting policies
The significant accounting policies are as follows:
a. Basis of accounting
The financial statements of the Company have been prepared in accordance with the
Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the
Accounting Standards specified under Section 133 of the Companies Act, 2013 and the
relevant provisions of the Companies Act, 2013 (“the 2013 Act”) / Companies Act, 1956 (“the
1956 Act”)as applicable. MCA has clarified that the provisions of part IXA of the Companies
Act, 1956 shall be applicable to a producer company in the manner as if the Companies Act,
1956 has not been repealed. The financial statements are prepared on accrual basis under
the historical cost convention. The accounting policies adopted in the preparation of the
financial statements are consistent with those followed in the previous year.
b. Use of estimates
The preparation of financial statements in conformity with Indian GAAP requires
management to make estimates and assumptions considered in the reported amounts of
assets and liabilities (including contingent liabilities) and the reported income and expenses
during the year. The management believes that the estimates used in the preparation of the
financial statements are prudent and reasonable. Future results could differ due to these
estimates and the differences between the actual results and the estimates are recognized in
the period in which results are known/materialize.
c. Cash and cash equivalents (for the purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-
term balances (with an original maturity of three months or less from the date of
acquisition), highly liquid investments that are readily convertible into known amounts of
cash and which are subject to insignificant risk of changes in value.
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 29
d. Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before
extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and
any deferrals or accruals of past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are segregated based on the
available information.
e. Revenue recognition
Sales are recognized, net of returns and trade discounts, on transfer of significant risk and
rewards of ownership to the buyers, which generally coincides with the delivery of goods to
customers.
f. Other income
Interest income on deposits is recognized on accrual basis.
g. Fixed assets (Tangible/Intangible)
Fixed assets are carried at cost less accumulated depreciation / amortization and impairment
losses, if any. The cost of fixed assets comprises its purchase price net of any trade discounts
and rebates, any import duties and other taxes (other than those subsequently recoverable
from the tax authorities), any directly attributable expenditure on making the asset ready for
its intended use, other incidental expenses and interest on borrowings attributable to
acquisition of qualifying fixed assets up to the date the asset is ready for its intended use.
Subsequent expenditure on fixed assets after its purchase is capitalized only of such
expenditure results in an increase in the future benefits from such asset beyond its previous
assessed standard of performance.
h. Capital work-in-progress
Assets which are not ready for their intended use are carried at cost, comprising direct cost,
related incidental expenses and attributable interest.
i. Depreciation and amortization
Depreciation on tangible and intangible fixed assets has been provided on straight line
method as per the useful life of the assets assessed as under based on technical advice,
taking into account the nature of asset, the estimated usage of assets, the operating
condition of the asset, past history of replacements, anticipated technological changes,
manufactured warranties and maintenance support etc.
The useful life considered for charging depreciation is as follows:
Description Useful life (in years)
Building 12
Plant and equipment
10
Furniture and fixtures
Computers and software
15
3
Office equipment 10
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 30
Depreciation is provided pro-rata from the date of addition.
All assets costing Rs. 5,000 or less individually are fully depreciated in the year of
capitalization.
j. Inventories
Inventories comprise raw material, finished goods and stores and spares. Inventories are
valued at lower of cost and net realizable value after providing for obsolescence and other
losses, where considered necessary. Cost is determined using weighted average method. Cost
includes all charges incurred in bringing the inventories to their present location and
condition. Finished goods include appropriate proportion of overheads.
k. Grants
Government grants and subsidies are recognized when there is reasonable assurance that
the Company will comply with the conditions attached to them and the grants / subsidies will
be received. Government grants related to depreciable fixed assets are treated as deferred
grants which is recognized in the statement of profit and loss on a systematic and rational
basis over the useful life of the asset, i.e., depreciation charge on assets procured from such
grants is appropriated from Deferred Grant and recognized in the Statement of Profit and
Loss by way of reduced depreciation charge.
Revenue government grants and subsidies are recognized as income over the periods
necessary to match them with the costs for which they are intended to compensate, on a
systematic basis and are deducted in reporting the related expense.
l. Employee benefits
Employee benefits include Provident Fund, Employee State Insurance scheme, Gratuity and
compensated absences.
a. Defined contribution plans
The Company’s contributions to provident fund and employees state insurance
scheme is considered as defined contribution plan and are charged to the Statement
of Profit and Loss based on the amount of contributions required to be made as and
when services are rendered by the employees.
b. Defined benefit plans
Gratuity is considered as defined benefit plan. Gratuity is provided based on
actuarial valuation carried out at the balance sheet date. The incremental liability
based on an actuarial valuation as per the ‘Projected Unit Credit’ method, as at the
reporting date, is charged to the Statement of Profit and Loss Account. Actuarial
gains and losses are recognized in the Statement of Profit and Loss.
c. Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be paid in
exchange for the services rendered by employees are recognized during the year
when the employees render the services. These benefits include performance
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 31
incentives and compensated absences which are expected to occur within twelve
months after the end of the period in which the employee renders the related
services.
d. Long-term employee benefits
Compensated absences which are not expected to occur within twelve months after
the end of the period in which the employee renders the related services are
recognized as a liability at the present value of the defined benefit obligation as at
the balance sheet date on the basis of actuarial valuation.
m. Earnings per share
Basic earnings per share are computed by dividing the net profit after tax by weighted
average number of equity shares outstanding during the year. Diluted earnings per share is
computed by dividing the net profit after tax by the weighted average number of equity
shares outstanding during the year as adjusted to the effects of all dilutive potential equity
shares, except where results are anti-dilutive.
n. Taxes on income
Income tax comprises current tax and deferred tax. Current tax is the amount of tax payable
on the taxable income for the year as determined in accordance with the applicable tax rates
and the provisions of Income Tax Act, 1961 and other applicable tax laws.
Deferred tax is recognized on timing differences; being the difference between taxable
incomes and accounting income that originate in one period and are capable of reversal in
one or more subsequent periods. Deferred tax is measured using the tax rates and the tax
laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are
recognized for all timing differences. Deferred tax assets are recognized for timing differences
of items other than unabsorbed depreciation and carry forward losses only to the extent that
reasonable certainty exists that sufficient future taxable income will be available against
which these can be realized. However, if there are unabsorbed depreciation and carry
forward losses, deferred tax assets are recognized only if there is virtual certainty that there
will be sufficient future taxable income available to realize such assets. Deferred tax assets
and liabilities are offset if such items relate to taxes on income levied by the same governing
tax laws and the Company has a legal enforceable right for such set off.
o. Borrowing cost
Borrowing costs includes interest and ancillary costs incurred. Borrowing costs that are
directly attributable to the acquisition or construction of a qualifying asset, pertaining to the
period from commencement of activities relating to construction/development of qualifying
asset up to the date of capitalization of such asset, are capitalized as part of the cost of that
asset. All other borrowing costs are recognized as an expense in the statement of profit and
loss in the year in which they are incurred.
p. Impairment of assets
At each balance sheet date, the Company reviews the carrying values of its fixed assets to
determine whether there is any indication that those assets suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the higher of an assets net
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 32
selling price and value in use. In assessing value in use the estimated future cash flows
expected from the continuing use of the asset and from its disposal are discounted to their
present value using a pre-discount rate that reflects the current market assessments of time
value of money and the risks specific to the asset.
Reversal of impairment loss is recognized as income in the statement of profit and loss.
q. Provisions and contingencies
A provision is recognized when the Company has present obligation as a result of past event
and it is probable that an outflow of resources will be required to settle the obligation, in
respect of which a reliable estimate can be made. Provisions (excluding employee benefits)
are not discounted to their present value and are determined based on best estimate required
to settle the obligation at the balance sheet date. These are reviewed at each balance sheet
date and adjusted to reflect the current best estimates. Contingent Assets are not recognized
in the financial statements. Contingent liabilities are disclosed in the notes to accounts.
Contingent assets are not recognized in the financial statements.
r. Leases
Lease arrangements where the risks and rewards incident to ownership of an asset
substantially vest with the lessor are recognized as operating leases. Lease rent under
operating leases are recognized in the statement of profit and loss account on straight line
basis.
s. Material events
Material events occurring after the Balance Sheet date are taken into cognizance.
t. Operating Cycle
Based on the nature of products / activities of the Company and the normal time between
acquisition of assets and their realization in cash or cash equivalents, the Company has
determined its operating cycle as 12 months for the purpose of classification of its assets and
liabilities as current and non-current.
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 33
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
BALANCE SHEET AS AT 31 MARCH, 2016
___________________________________________________________________________________
Note No. As at 31
March, 2016
As at 31
March,2015
Rupees Rupees
A EQUITY AND LIABILITIES
1. Shareholders’ funds
(a) Share capital 3 43,633,700 20,344,400
(b) Reserves and surplus 4 16,753,780 2,854,236
60,387,480 23,198,636
2. Share application money pending
allotment
- 151,600
3 Deferred grant 5 115,105,684 -
4 Non - current liabilities
(a) Long - term borrowings 6 124,769,000 -
(b) Long - term provisions 7 1,744,800 414,187
126,513,800 4,14,187
5. Current liabilities
(a) Short term borrowings 8 489,509,523 -
(b) Trade payables
(i) Total outstanding dues of
micro and small enterprises
- -
(ii) Total outstanding dues of
creditors other than micro
and small enterprises
9
115,996,085
100,505,711
(c) Other current liabilities 10 48,703,265 109,059,487
(d) Short - term provisions 11 8,656,351 5,165,009
662,865,224 214,730,207
Total
964,872,188 238,494,630
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 34
B. ASSETS
1. Non - current assets
(a) Fixed assets
(i) Tangible assets 12a 250,241,827 90,058,575
(ii) Intangible assets 12b 10,125,975 -
(iii) Capital work in progress 7,603,308 -
(b) Deferred tax asset 13 2,663,801 3,078,927
(c) Long-term loans and advances 14 19,23,420 -
272,558,331 93,137,502
2. Current assets
(a) Inventories 15 7,967,970 10,282,682
(b) Trade receivables 16 509,220,894 51,574,781
(c) Cash and cash equivalents 17 166,533,330 82,515,658
(d) Short - term loans and advances 18 7,383,308 439,664
(e) Other current assets 19 1,208,355 544,343
692,313,857 145,357,128
Total
964,872,188 238,494,630
See accompanying notes forming part of the financial statements 1
In terms of our report attached For and on behalf of the Board of Directors
For S.B. BILLIMORIA & CO.
Chartered Accountants
Lavanya Kumari Bojja Sailaja Kampalle
Chairman Director
JITENDRA AGARWAL Dr. K. V. Prasad V. Nanda Kumar
Partner Director & Chief Executive Chief Financial Officer
N. Amarendra Babu
Company Secretary
Place:
Date:
Gurgaon Place: Tirupati
05 August, 2016 Date: 05 August, 2016
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 35
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2016
_________________________________________________________________________________
Note
No.
Year ended 31
March, 2016
Period ended 31
March 2015
Rupees Rupees
1. Revenue from operations 20 2,834,172,143 1,380,922,954
2. Other income 21 4,360,441
______________
2,768,673
______________
3. Total revenue (1+2)
2,838,532,584 1,383,691,627
4. EXPENSES
(a) Cost of materials
consumed
22
62,704,295
-
(a) Purchases of stock-in-
trade
23
2,532,582,726
1,286,196,391
(b) Changes in inventories
of stock-in-trade
24
3,752,808
(6,517,126)
(c) Employee benefits
expense
25
45,111,509
18,279,414
(d) Finance costs 26 10,985,053 697,861
(e) Depreciation and
amortisation expense
12c
21,540,072
12,755,407
(f) Other expenses 27 133,066,805
_____________
66,140,071
_____________
Total expenses
2,809,743,268 1,377,552,017
5. Profit before tax (3-4)
28,789,316 6,139,610
6. Tax expense:
(a) Current tax
9,223,000 5,140,000
(b) Deferred tax
charge/(credit)
415,126
_________
(3,078,927)
_________
Net tax expense
9,638,126 2,061,073
___________ __________
7. Profit for the year/period (5-6)
19,151,190 4,078,537
8. Earnings per equity share:
(Nominal value Rs. 100 per
share)
(a) Basic 31 78.41 35.26
(b) Diluted 31 78.41 35.24
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 36
See accompanying notes forming part of the financial statements
In terms of our report
attached
For and on behalf of the Board of Directors
for
S.B.BILLIMORIA & CO.
Lavanya Kumari Bojja
Sailaja Kampalle
Chartered Accountants Chairman Director
Dr. K. V. Prasad V.Nandakumar
Director & Chief Executive Chief Financial
Officer
JITENDRA AGARWAL
Partner
N. Amarendra Babu
Company Secretary
Place : Gurgaon
Date : 05 August, 2016
Place : Tirupati
Date : 05 August, 2016
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 37
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2016
__________________________________________________________________________________________________
Year ended 31 March, 2016
__________________________
Period ended 31 March 2015
__________________________
Rupees Rupees
A. CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax 28,789,316 6,139,610
Adjustments For :
Depreciation and amortization expense 21,540,072 12,755,407
Provision for employee benefits 1,593,244 414,187
Finance costs 10,887,749 361,035
Interest income (2,756,775) (604,670)
Operating Profit before working capital changes 60,053,606 19,065,569
Adjustments for movement in working capital:
Decrease/(increase) in inventories 2,314,712 (10,282,682)
(Increase) in trade receivables (457,646,113) (51,574,781)
(Increase) in short term loans and advances (6,943,644) (439,664)
(Increase) in long term loans and advances (1,923,420) -
Increase in trade payables 15,490,374 100,505,711
Increase in current liabilities 22,756,215 6,345,010
_________________ ________________
Cash generated from/(used in) operations (365,898,270) 63,619,163
Net income tax (paid) (10,278,366) (1,560,327)
Net cash flow from/(used in) operating activities - (A) (376,176,636) 62,058,836
B. CASH FLOW FROM INVESTING ACTIVITIES:
Bank balances not considered as Cash and cash
equivalents
(16,018,864)
(20,030,000)
Capital expenditure on fixed assets (net of capital
grant)
(183,715,681)
(99,505)
Interest received 2,092,763 60,327
Net cash flow (used in) investing activities - (B) (197,641,782) (20,069,178)
C. CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issue of equity share capital 23,137,700 20,344,400
Share application money received - 151,600
Proceeds from issue of long term borrowings 134,769,000 -
Net increase/ (decrease) in short term borrowings 489,509,523 -
Finance costs paid (5,390,715) -
Dividend paid (1,200) -
Tax on dividend (207,081) -
Net cash flow from financing activities - (C) 641,817,227 20,496,000
Net increase in Cash and cash equivalents (A+B+C) 67,998,808 62,485,658
Cash and cash equivalents at beginning of the
year/period 62,485,658
-
Cash and Cash equivalents at the end of the year 130,484,466 62,485,658
Cash and cash equivalents comprises:
Cash in hand 217,158 106,169
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 38
Balances with banks:
- in current accounts 120,267,308 62,379,489
- in deposits of original maturity of less than 3
months 10,000,000
-
Cash and cash equivalents as per Cash Flow
Statement 130,484,466
62,485,658
See accompanying notes forming part of the financial statements
In term of our report attached For and on behalf of the Board of Directors
For S.B. BILLIMORIA & CO.
Chartered Accountants Lavanya Kumari Bojja Sailaja Kampalle
Chairman Director
Jitendra Agarwal
Dr. K. V. Prasad V. Nandakumar
Partner Director & Chief Executive Chief Financial Officer
N. Amarendra Babu
Company Secretary
Place: Gurgaon Place: Tirupati
Date: 05 August, 2016 Date: 05 August, 2016
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 39
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
Notes Forming Part Of The Financial Statements
_________________________________________________________________________________________________
Note 3: Share Capital
As at 31 March, 2016 As at 31 March, 2015
Number of Amount Number of Amount
Shares
______________
Rupees
________________
Shares
________
Rupees
_____________
(a) Authorised share capital 2,000,000 200,000,000
2,000,000 200,000,000
Equity Shares of Rs. 100 each
(b) Issued, subscribed and fully paid up
share capital 436,337 43,633,700 203,444 20,344,400
Equity Shares of Rs. 100 each
Refer Notes (i) to (iii) below
Notes:
(i) Rights, preferences and restrictions attached to shares
The Company has issued one class of equity shares having face value of Rs. 100 each. Each member is entitled to one vote.
Members are entitled to limited return (dividend) and bonus in accordance with Article of Association of the Company.
(ii) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the year/period:
As at and for year ended 31 March
2016
As at and for period ended 31
March 2015
Number of Amount Number of Amount
Shares
___________
Rupees
____________
Shares
____________
Rupees
______________
Shares outstanding at the beginning of
the year/period
203,444
20,344,400 - -
Shares issued during the year/ period 232,893 23,289,300 203,444 20,344,400
Shares outstanding at the end of the year/
period 436,337 43,633,700 203,444 20,344,400
(iii) The Company is registered under Part IXA of the Companies Act, 1956 as 'Producer Company' and none of the members holds
5% or more of the share capital of the Company.
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 40
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
Notes forming part of the financial statements
________________________________________________________________________________
As at 31
March, 2016
As at 31 March,
2015
Rupees Rupees
Note 4 - Reserves and surplus
(a) General reserve
Opening balance 2,854,236 -
Add: Transferred from surplus in Statement of Profit
and Loss
13,899,544
__
2,854,236
__ _______
Closing balance 16,753,780 2,854,236
(b) Surplus in Statement of Profit and Loss
Opening Balance - -
Profit for the year/period 19,151,190 4,078,537
Less:
(i) Proposed limited return (dividend) 4,363,370 1,017,220
to members Rs. 10 per share (previous period
Rs.5 per share)
(ii) Tax on proposed limited return (dividend) 888,277 207,081
(iii) Transferred to General reserve 13,899,544 2,854,236
Closing balance - -
Total (a+b) 16,753,780 2,854,236
Note 5- Deferred Grant
(a) Capital grant utilised during year 138,676,964 -
(b)
Less: Depreciation pertaining to assets acquired
from grant
23,571,280
____________ -
(c) Closing balance 115,105,684 -
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 41
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
Notes forming part of financial statements
_______________________________________________________________________________________________
As at 31 March, 2016 As at 31March, 2015
Rupees Rupees
Note 6: Long-term borrowings
Secured
(a)
Term loan from National Dairy
Development Board (NDDB) 74,769,000 -
(b) Term loan from NDDB Dairy
Services 60,000,000 -
134,769,000 -
Less: current maturity of long term
borrowings 10,000,000 -
(see note 10) 124,769,000 -
(i) Details of Security provided in respect of secured long-term borrowings is as under:
(a)
Term Loan from National Dairy Development Board
First Charge on the entire fixed assets of the company present and future by way of hypothecation
including the immovable properties/fixed assets.
(b)
Term Loan from NDDB Dairy Services
First Charge on the fixed assets comprising data processor and milk collection centres of the company
present and future by way of hypothecation.
(ii) Details of terms of repayment for the long term borrowings is as under:
(a)
Term loan from National Dairy Development Board
The company has been sanctioned the loan of Rs.9,78,00,000 for 7 years with a moratorium period on
principal repayment of 2 years. The loan carries interest at 9% per annum. Loan is to be repaid in 60
equal monthly installments. Of the said loan, Rs. 7,47,69,000 has been disbursed during the current
year.
(b) Term loan from NDDB Dairy Services
The term loan is for a period of 4 years with moratorium on principal repayment of 1 year. The loan
carries interest at 9% per annum. Loan is repayable in 24 equal monthly installments. Note 7 - Long term provisions
(a) Provision for employee benefits
(i) For compensated absences 922,402
168,310
(ii) For gratuity 822,398
245,877
1,744,800
414,187
Note 8 - Short term borrowings
(a) Unsecured
(i) Bill discounting from banks 489,509,523
-
489,509,523
-
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 42
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
Notes forming part of financial statements
____________________________________________________________________________________________________
As at 31 March, 2016 As at 31March, 2015
Rupees
_______________
Rupees
Note 9 - Trade payables
(a) Trade Payables (other than acceptances) 115,996,085
100,505,711
(see note 35) 115,996,085
100,505,711
Note 10 - Other current liabilities
(a)
Current maturity on long term borrowings
(see note below)
10,000,000 -
(b)
Application money received for allotment of
security and due for refund
293,800 -
(c) Advances received from customers 515,295
-
(d) Interest accrued but not due on borrowings 5,240,303
-
(e)
Grant received ( net of utilisation) ( see Note
33) 9,069,493
-
(f) Trade security deposits received 17,712,195
5,620,429
(g) Others:
(i) Payable on purchase of fixed assets 3,345,720
102,714,477
(ii)
Statutory remittances ( Contribution
to PF, ESI, Service tax etc)
1,510,439
724,581
(h) Unclaimed/Unpaid dividends 1,016,020
-
48,703,265
109,059,487
Note: For details of security, refer to Note 6
Note 11 - Short term provisions
(a) Provision for employee benefits
(i) For compensated absences 139,588
-
(ii) For gratuity 123,043
-
(b)
Provision for income tax (net of advance tax
of 3,142,073
3,940,708
Rs.63,37,658 ; previous period Rs.15,60,327)
(c) Provision – others
(i) Provision for proposed limited return
(dividend) 4,363,370
1,017,220
(ii) Provision for tax on proposed limited
return 888,277
207,081
8,656,351
5,165,009
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 43
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
Notes forming part of the financial statements
________________________________________________________________________
Note 12 - Fixed assets
Amount in Rupees
Particulars Gross block Accumulated depreciation Net block
As at April 1,
2015
Additions As at 31
March, 2016
As at April 1,
2015
For the year/
period
As at 31
March, 2016
As at 31
March, 2016
As at 31 March, 2015
(a)
Tangible
assets
(owned)
Building
1,159,960 -
1,159,960
96,663 96,757
193,420
966,540 1,063,297
(-)
(1,159,960)
(1,159,960) (-) (96,663)
(96,663)
(1,063,297) (-)
Plant and
equipment
99,496,089
152,268,972
251,765,061
12,567,369 30,274,005
42,841,374
208,923,687
86,928,720
(-)
(99,496,089)
(99,496,089) (-) (12,567,369)
(12,567,369)
(86,928,720) (-)
Furniture
and fixtures
177,985
6,168,083
6,346,068
6,800 3,970,706
3,977,506
2,368,562 171,185
(-)
(177,985)
(177,985) (-) (6,800)
(6,800)
(171,185) (-)
Computers
1,024,854
40,547,337
41,572,191
68,577 7,733,603
7,802,180
33,770,011 956,277
(-)
(1,024,854)
(1,024,854) (-) (68,577)
(68,577)
(956,277) (-)
Office
equipment
955,094
3,778,451
4,733,545
15,998 504,520
520,518
4,213,027 939,096
(-)
(955,094)
(955,094) (-) (15,998)
(15,998)
(939,096) (-)
Total
102,813,982
202,762,843
305,576,825
12,755,407 42,579,591
55,334,998
250,241,827 90,058,575
Previous
period (-)
(102,813,982)
(102,813,982) (-) (12,755,407)
(12,755,407)
(90,058,575) (-)
(b)
Intangible
assets
(other than
internally
generated)
Computer
software
-
12,657,736
12,657,736
- 2,531,761
2,531,761
10,125,975 -
(-) (-) (-) (-) (-) (-) (-) (-)
Total
-
12,657,736
12,657,736
- 2,531,761
2,531,761
10,125,975 -
Previous
period (-) (-) (-) (-) (-) (-) (-) (-)
Year ended Period ended
(c)
Depreciation and amortization 31 March, 2016 31 March,
2015
Tangible assets
42,579,591
12,755,407
Intangible assets
2,531,761
-
45,111,352
12,755,407
Less: Transferred to capital
reserve
23,571,280
-
21,540,072
12,755,407
Notes:
(i) Figures in brackets relates to previous period
(ii) The details of assets deployed out of capital grant and included in the table above are as below :
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 44
Particulars Gross block Accumulated depreciation Net block
As at 1
April, 2015
Additions As at 31 March ,
2016
As at 1
April, 2015
For the year As at 31
March , 2016
As at 31 March,
2016
As at 31 March, 2015
(D)
Tangible assets
(owned)
Plant and
equipment
-
76,538,868
76,538,868
-
9,506,517
9,506,517
67,032,351 -
Furniture and
fixtures
-
6,168,083
6,168,083
-
3,973,073
3,973,073
2,195,010 -
Computers
-
39,701,468
39,701,468
-
7,259,120
7,259,120
32,442,348 -
Office
equipment
-
3,648,968
3,648,968
-
356,072
356,072
3,292,896 -
Computer
Software
-
12,619,577
12,619,577
-
2,476,498
2,476,498
10,143,079 -
Total
- 138,676,964
138,676,964
-
23,571,280
23,571,280
115,105,684 -
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 45
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
Notes forming part of the financial statements
______________________________________________________________________________________________
As at 31 March, 2016 As at 31 March, 2015
Rupees Rupees
Note 13 - Deferred tax asset
A. Tax effect of items constituting deferred tax
assets
a. Difference between book
balance and tax balance of
fixed assets
1,436,589
1,602,635
b. Provision for compensated absences
and gratuity
663,717
136,942
c. Disallowances under section 35D of
the Income Tax Act
399,888
533,185
d. Disallowances under section 43B of
the Income Tax Act
-
391,555
e. Disallowances under section
40(a)(i)(a) of the Income Tax Act
163,606
414,610
Deferred tax asset 2,663,801 3,078,927
Note 14- Long-term loans and advances
(Unsecured, considered good)
(a) Security deposits 1,923,420 -
1,923,420 -
Note 15 – Inventories
(At lower of cost and net realisable value)
(a) Raw and packing material 2,622,634 -
(b) Stock-in-trade: _____ _______ ___________
(i) Raw milk
966,890
2,890,967
(ii) Cattle feed 1,797,428 3,626,159
Sub-total (b) 2,764,318 6,517,126
(c) Stores and spares 2,581,018 3,765,556
7,967,970 10,282,682
Note 16 - Trade receivables
(Unsecured, considered good)
(a) Outstanding for a period less than six
months from
the date they were due for payment 509,220,894 51,574,781
509,220,894 51,574,781
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 46
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
Notes forming part of the financial statements
_____________________________________________________________________________________________________
As at
31 March, 2016
As at
31 March, 2015
Rupees Rupees
Note 17 - Cash and cash equivalents
(a) Cash on hand 217,158 106,169
(b) Balance with banks:
(i) In current accounts 120,267,308 62,379,489
(ii) In deposit accounts
-original maturity of less than 3
months
10,000,000
-
Cash and cash equivalents as per AS 3 – Cash 130,484,466 62,485,658
flow statement
(d) Other bank balances
(i) In earmarked accounts
- Unpaid dividend accounts 1,016,020 -
(i) In deposit accounts
-original maturity of more than 3
months 35,032,844 20,030,000
166,533,330 82,515,658
Note 18 - Short - term loans and advances
(Unsecured, considered good)
(a) Advances to employees 371,362 -
(b) Prepaid expenses 590,903 397,664
(c) Advances to vendors 6,421,043 42,000
7,383,308 439,664
Note 19 - Other current assets
(Unsecured, considered good)
(a) Interest accrued on bank deposits 1,208,355 544,343
1,208,355 544,343
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 47
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
Notes forming part of the financial statements
__________________________________________________________________________________________________
Year ended 31
March 2016
Period ended 31
March 2015
Rupees
Rupees
Note 20 - Revenue from operations
(a) Sale of products 2,834,172,143
1,380,922,954
(see note (i) below) 2,834,172,143
1,380,922,954
(i) Sale of products comprises:
a. Traded goods
(i) Raw milk 2,675,392,360
1,348,871,579
(ii) Cattle feed 78,026,713
32,051,375
2,753,419,073
1,380,922,954
b. Manufactured
(i) Polypack milk 80,753,070
-
80,753,070
-
2,834,172,143
1,380,922,954
Note 21 - Other income
(a) Interest income
(i) On deposits with banks 2,756,775
604,670
(b) Other non-operating income
(i) Membership fees 757,831
2,114,200
(ii) Miscellaneous income 845,835
49,803
4,360,441
2,768,673
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 48
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
Notes forming part of the financial statements
_____________________________________________________________________________________
Note 22: Cost of materials consumed
Particulars Year ended
31 March, 2016
Period ended
31 March, 2015
Rupees Rupees
Raw and packing material
(a) Opening stock - -
(b) Add: Purchases 65,326,929 -
65,326,929 -
(c) Less: Closing stock
2,622,634
-
62,704,295 -
Note:
(i) Raw and packing material comprises:
a. Raw milk 62,240,861 -
b. Packing material 463,434 -
62,704,295 -
Note 23 - Purchases of stock-in-trade
(a) Raw milk 2,277,319,375 1,167,312,323
(b) Procurement expenses 180,631,229 83,979,537
(c) Cattle feed 74,632,122 34,904,531
2,532,582,726 1,286,196,391
Note 24 - Changes in inventories of stock-in-
trade
(a) Inventories at the beginning of the year/
period 6,517,126 -
(b) Inventories at the end of the year/ period 2,764,318 6,517,126
Net (increase)/decrease 3,752,808 (6,517,126)
Note 25 - Employee benefits expense
(a) Salaries and wages 40,867,567 16,534,581
(b) Contribution to provident fund 2,204,831 956,178
(c) Gratuity expense 699,564 245,877
(d) Staff welfare expenses 1,339,547 542,778
45,111,509 18,279,414
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 49
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
Notes forming part of the financial statements
_____________________________________________________________________________________________________
Year ended 31 March,
2016
Period ended31
March, 2015
Rupees Rupees
Note 26 - Finance costs
(a) Interest expense on:
(i) Borrowings 10,631,018 -
(ii) Delayed payment of income tax 291,096 361,035
(b) Other borrowing costs 62,939 336,826
10,985,053 697,861
Note 27 - Other expenses
(a) Consumption of stores and spare parts 5,574,871 7,420,439
(b) Power and fuel 7,611,328 1,102,396
(c) Rent 13,440,631 810,572
(d) Repair and maintenance - buildings - 11,483
(e) Repair and maintenance - machinery 1,290,040 830,999
(f) Repair and maintenance - others 2,186,516 87,670
(g) Rates and taxes 968,548 120,139
(h) Freight, forwarding and distribution expenses 44,532,079 27,198,048
(i) Advertisement and promotion expenses 2,992,666 -
(j) Legal and professional fees 8,325,807 1,450,407
(k) Auditor's remuneration (see note (i) below) 983,858 570,000
(l) Travelling and conveyance 4,522,043 6,150,689
(m) Communication expenses 1,178,831 558,804
(n) Labour charges 31,150,227 13,043,774
(o) Preliminary expenses written off - 2,015,790
(p) Conversion charges 3,813,555 -
(q) AGM expenses 790,012 -
(r) Miscellaneous expenses 3,705,793 4,768,861
133,066,805 66,140,071
Note:
(i) Auditors' remuneration comprises:
a. Statutory audit fee 700,000 425,000
b. Tax audit fee 100,000 75,000
c. Out of pocket expense 55,771 -
d. Service tax on above 128,087 70,000
983,858 570,000
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 50
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
Notes forming part of the financial statements
____________________________________________________________________________________________________
As at 31 March,
2016
As at 31 March,
2015
Rupees Rupees
Note 28 - Contingent liabilities and commitments (to the
extent not provided for)
A. Contingent Liabilities Nil Nil
B. Commitments
Estimated amount of contracts remaining to be executed
on capital account and not provided for 1,556,447 -
Note 29 - Employee benefit plans:
Defined-Contribution Plans
The Company makes contributions to Provident Fund and Pension Fund for qualifying employees, which are
defined contribution plans. Under the schemes, the Company is required to contribute a specified percentage of the
payroll costs to fund the benefits. The contributions payable by the Company are at rates specified in the rules of
the schemes.
The Company has recognized Rs. 22, 04,831 (Previous Period Rs. 956,178) for Provident Fund contribution in the
statement of profit and loss.
Defined benefit plan
The Company offers its employees defined-benefit plan in the form of a gratuity scheme (a lump sum amount).
Benefits under the defined benefit plan is based on years of service and the employee’s compensation (immediately
before separation). The gratuity scheme covers all regular employees. Actuarial valuation is done based on
“Projected Unit Credit” method. Gains and losses of changed actuarial assumptions are charged to the Statement
of Profit and Loss.
The following tables set out the status of defined benefit scheme in respect of gratuity:
i. Change in defined benefit obligation 31 March, 2016
31 March, 2015
Rupees
Rupees
Present value of obligation at the beginning of year/
period 245,877
-
Current service cost 676,713
245,877
Interest cost 47,783
-
Actuarial (gain)/loss (24,932)
-
Present value of obligations at the end of the year/
period 945,441
245,877
ii. Amount recognised in the Balance Sheet
31 March, 2016
31 March, 2015
Rupees
Rupees
Present value of defined benefit obligations 945,441
245,877
Fair value of plan assets - -
Net liability/(asset) recognised in the balance sheet 945,441
245,877
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 51
The scheme is unfunded, hence plan assets are Nil.
iii. Expense recognised in the Statement of Profit and
Loss
31 March, 2016 31 March, 2015
Rupees
Rupees
Current service costs 676,713
245,877
Interest cost 47,783
-
Net actuarial (gain)/loss recognized during the year/
period (24,932)
-
Expense recognized in the Statement of Profit and Loss 699,564
245,877
iv. Balance Sheet reconciliation 31 March, 2016
31 March, 2015
Rupees
Rupees
Net liability/(asset) at the beginning of the year/ period 245,877
-
Expense as above 699,564
245,877
Net liability at the end of the year/ period 945,441
245,877
v. Principal actuarial assumptions 31 March, 2016 31 March, 2015
Discount rate 8.00% p.a 8.00% p.a
Expected salary escalations 6.00% p.a 5.00% p.a
Expected return on plan assets N.A N.A
Attrition rate
Below 25 Years 8% 8%
26 to 30 Years 7% 7%
31 to 35 Years 6% 6%
36 to 40 Years 5% 5%
41 to 45 Years 4% 4%
46 to 50 Years 3% 3%
51 to 55 Years 2% 2%
Above 56 Years 1% 1%
Mortality table used IALM 2006-08 IALM 2006-08
Ultimate Ultimate
The discount rate is based on prevailing market yields of Government of India securities as at the balance sheet
date for the estimated term of obligation.
The estimates of future salary increases considered, takes into account the inflation, seniority, promotions,
increments and other relevant factors.
vi. Experience adjustment 31 March, 2016 31 March, 2015
Rupees Rupees
Present value of DBO 945,441 245.877 245,877
Fair value of plan assets - -
Funded status 945,441 245,877
(Gain)/loss on obligations (24,932) -
Gain/(loss) on plan assets - -
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 52
Compensated absences
Principal actuarial assumptions 31 March, 2016 31 March, 2015
Discount rate 8.00% p.a 8.00% p.a
Expected salary escalations 6.00% p.a. 5.00% p.a.
Expected return on plan assets N.A N.A
Attrition rate
Below 25 years 8% 8%
26 to 30 years 7% 7%
31 to 35 years 6% 6%
36 to 40 years 5% 5%
41 to 45 years 4% 4%
46 to 55 years 3% 3%
Above 56 years 2% 2%
1% 1%
Mortality table used IALM 2006-08 IALM 2006-08
Ultimate Ultimate
The discount rate is based on prevailing market yields of Government of India securities as at the balance sheet date for
the estimated term of obligation.
The estimates of future salary increases considered, takes into account the inflation, seniority, promotions, increments
and other relevant factors.
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 53
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
Notes forming part of the financial statements
______________________________________________________________________________________
Note 30 - Leasing arrangements
The Company has taken certain properties, equipment and vehicles under operating lease which can be renewed on
mutually agreed terms and conditions. The lease rental expenses of Rs. 13,440,631 (Previous Period Rs. 810,572) in
respect of obligation under operating leases have been recognized in the statement of profit and loss.
Minimum lease payment during the non-cancellable period is as under:
Particulars As at 31 March, 2016 As at 31 March, 2015
(Rupees) (Rupees)
Payable not later than one year 2,086,224 -
Payable later than one year but not later than
five years 2,955,484
-
Note 31 - Earnings per share
Particulars Unit
Year ended 31
March, 2016
Period ended 31
March, 2015
Net profit after tax Rupees 19,151,190
4,078,537
Weighted average number of equity shares
outstanding during year/ period Numbers 244,255 115,664
Nominal Value of Equity Shares Rupees 100
100
Basic Earnings per Share Rupees 78.41
35.26
Effect of allotment against share application
money Numbers -
56
Equity shares used to compute diluted
earnings per share Numbers 244,255
115,720
Diluted Earnings per Share Rupees 78.41
35.24
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 54
SHREEJA MAHILA MILK PRODUCER COMPANY LIMITED
Notes forming part of the financial statements
______________________________________________________________________________________________
Note No. 32 - Related party
disclosures
A. Name of the related party and nature of relationship
Nature of Relationship Name of person
Key Management Personnel: Dr. K V Prasad – Chief Executive
B. The nature and volume of transactions during the year with the above related
party are as follows:
Nature of transactions Amount (Rupees)
Managerial remuneration
2,250,000
(1,280,230)
Note: Figure in bracket represents previous period.
Note No. 33 - Details of grants
Year ended 31 March,
2016
Period ended 31 March,
2015
Details of grants received from
NDDB and its utilization is as
under:
(Rupees) (Rupees)
(a) Grant received during year
189,418,000 -
(b) Utilised during year
(i) For capital assets
138,676,964 -
(ii) For revenue expenses
41,671,543 -
Total utilisations (i)+(ii)
180,348,507 -
(c) Balance carried forward
9,069,493 -
Note:-
Grant utilised for purchase of capital assets has been recorded as deferred grant and revenue grant utilised has
been netted off with respective expense (see note 2k).
Note 34: The disclosures as required under Accounting Standard AS-17 on Segment reporting are not required as the
Company primarily deals in single business segment of Milk and Milk Products and operates in one
geographical area.
Shreeja Mahila Milk Producer Company Limited | Annual Report 2015-16 | 55
Note 35: According to the information available with the Management, on the basis of intimation received from suppliers,
regarding their status under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), there are
no suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) therefore
Company has no amounts due to Micro and Small Enterprises under the said Act.
Note:36
Previous period figures are for the period 03 July 2014 (date of incorporation of company) to 31 March 2015, hence are not
strictly comparable with current year.
Previous period's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's
classification/ disclosure.
For and on behalf of the Board of Directors
Lavanya Kumari Bojja Sailaja
Kampalle
Chairman
Director
Dr. K. V. Prasad
V. Nandakumar
Director & Chief Executive Chief Financial
Officer
N. Amarendra Babu
Company Secretary
Place: Tirupati
Date: 05 August, 2016