1. CORPORATE INFORMATION

Hindustan Foods Ltd ('the Company") was incorporated in the year 1984 and is engaged in the business of manufacturing Cereal Based Foods with its domicile brsence in Goa.

2. SIGNIFICANT ACCOUNTING POLICIES :

i) Accounting Conventions:

The Financial Statements of the Company have been brpared and brsented under the historical cost convention on accrual basis and in accordance with Generally Accepted Accounting Principles in India (Indian GAAP) and comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013.

The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of financial statements are consistent with those followed in the brvious year.

ii) Fixed Assets and Debrciation :

Fixed Assets are stated at cost of acquisition or construction, less accumulated debrciation. Debrciation is provided on straight line method at the rates and in the manner specified in Part 'C' of Schedule II of the Companies Act, 2013.

iii) Inventories :

Inventories are valued at lower of cost or the net realizable value.

iv) Revenue Recognition :

Revenue from Sales is recognized on dispatch of goods from the factory.

Revenue from Processing Charges is recognized on production of processed goods for the Principal.

v) Employee Benefits :

a) Short Term Employee Benefits:

Short term employee benefits including accumulated compensated absences determined as per company's policy/scheme are recognized as expense based on expected obligation on undiscounted basis.

b) Defined Contributions:

Fixed contributions to the Superannuation Fund which is administered and managed by Life Insurance Corporation of India and Fixed contributions to Employees State Insurance Corporation (ESIC) are charged to profit and loss account.

The Company also contributes to a government administered Provident and Pension Fund on behalf of its employees, which are charged to profit and loss account.

c) Defined Benefits :

The Liability for Gratuity to employees as at Balance sheet date is determined on the basis of actuarial valuations and is funded to a Gratuity Fund administered and managed by Life Insurance Corporation of India. The Liability thereof is paid and absorbed in the accounts.

Contributions to Provident Fund are charged to profit and loss accounts and are remitted to an approved exempted trust.

d) Long Term Compensated Absences :

In respect of long term portion of compensated absences (Leave benefits), the liability is determined on the basis of actuarial valuation and is provided for accordingly.

vi) Borrowing Costs :

Borrowing Costs on specific loans attributable to the acquisition or construction of asset are capitalized. All other borrowing costs are accounted in Profit & Loss Account.

vii) Taxes on Income:

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred Tax is recognized on timing differences arising between taxable income and accounting income computed using the tax rates and the tax laws that have been enacted or substantively enacted as of the Balance Sheet date. Deferred tax assets are recognized only if there is a virtual certainty that they will be realized and reviewed for the appropriateness of their carrying values at each balance sheet date.

viii) Miscellaneous Expenditure not w/off :

Product Launch Expenditure incurred for new products that are yet to be launched are capitalized and shall be amortised over a period of 5 years.

ix) Provision, Contingent Liabilities and Contingent Assets:

A provision is recognized when the Company has a brsent 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 reasonable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their brsent value and are determined based on best estimate required to settle the obligation at the balance sheet date. Contingent liability is disclosed for (i) possible obligation which will be confirmed only by future events not wholly within the control of the Company or (ii) brsent obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are neither recognized nor disclosed in the financial statements.

x) Impairment of Assets :

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds the recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their brsent value at the weighted average cost of capital.

2. Contingent Liabilities

Claims against the Company by Excise Department, disputed and not accepted - Rs. 27,15,489/-(Previous Year - Rs. 27,15,489/-).

Bank Guarantees issued by bankers on behalf of the Company Rs.38,85,000/-(Previous Year-Rs. 28,35,000/-). Bank Guarantees for Rs. 25,00,000/- are secured by pledge of fixed deposits of M/s. V S Dempo Holdings Private Limited of equivalent amount.

3. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) is Nil (Previous Year - Rs. 25 lacs).

4. Loan from M/s. V S Dempo Holdings Private Limited is secured by charge on Fixed Assets of the Company.

5. Cash Credit Rs. 20 Lacs from Bank of Maharashtra is secured by hypothecation of stock and book debts.

Cash Credit of Rs. 50 Lacs from Bank of Maharashtra is secured by pledge of fixed deposits of M/s. V S Dempo Holdings Private Limited.

6. Deposit with Banks includes Rs.12,98,789/- under lien towards guarantees given on behalf of the Company (Previous Year - Rs.6,98,789/-).

7. To comply with the requirement of the Micro, Small And Medium Enterprises Development Act 2006, which became effective from 2nd October, 2006, the Company requested its suppliers to confirm whether they are covered as Micro , Small or Medium enterprise as is defined in the said Act. As the Company did not receive any communication from its suppliers informing their coverage as such enterprise, it is considered that none of them are covered as such enterprise under the said Act.

7. No provision for Income Tax (current) has been made in the absence of taxable income for the year.

8. The Company manufactures intermediates/finished cereal based foods for itself and for third parties which constitutes single business segment. Accordingly there are no business/ geographical segments to be reported under Accounting standard (AS) 17 issued by the Institute of Chartered Accountants of India.

9. Previous year's figures have been regrouped wherever necessary, to confirm with current year's disclosures.

As per our Report of even date annexed hereto For and on behalf of Board of Directors

For R. Sundararaman & Co.,

Chartered Accountants

S. SRIRAM

Partner

Membership No : 202813

Ganesh T. Argekar

Executive Director DIN:06865379

Beena M. Mahambrey

Company Secretary

Shashi K. Kalathil

Director

DIN : 02829333

Kedarnath Swain

Chief Financial Officer

Place : Panjim

Date : 26th May, 2016