Note 1: STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES

1. General:

The financial statements are brpared in accordance with the Indian Generally Accepted Accounting Principles (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013 under the historical cost convention on the accounting principles of Going Concern and the Company follows mercantile system of accounting and recognizes income and expenditure on accrual basis except those with significant uncertainties.

The brparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities , revenues and expenses and disclosure of contingent liabilities on the date of financial statements. The recognition, measurement, classification or disclosure of an item or information in the financial statements are made relying on these estimates. Any revision to accounting estimates is recognized prospectively.

2. Fixed Assets : TANGIBLE ASSETS:

Fixed Assets are stated at cost of acquisition and subsequent improvement hereto including taxes, duties , freight and other incidental expenses related to acquisition and installation. In accordance with AS 28, where there is any indication of impairment of the Company's assets related to cash generating unit, carrying amount of such assets are reviewed at Balance Sheet date.

Capital Work-In- Process is carried at cost, comprising direct cost, related incidental expenses, if any to the extent they relate to the period till assets are ready for intended use.

3. Debrciation : TANGIBLE ASSETS:

Debrciation has been provided based on useful life assigned to each asset in accordance with Schedule II of the Companies Act, 2013 as per rates brscribed according to the Straight Line Method.

4. Revenue Recognition and Sales:

Revenue on sale of goods is recognized on transfer of risks and reward which generally coincide with dispatch of goods to the parties. Sales are net of value added tax.

5. Inventories :

a. Finished Goods are valued at the lower of cost and net realizable value. Cost for this purpose includes direct cost and an appropriate portion of allocable overheads.

b. W.I.P. is valued at cost. Cost for this purpose includes direct cost and attributable overheads.

c. In case of stores and spares and packing material and raw material, 'Specific Identification' method and for other inventories, FIFO method is used.

5. Employee Benefits:

a. Provident Fund:

Provident Fund is a defined contribution scheme and the Company's contributions are charged to the Profit and Loss Account during the period in which the employee renders the related services.

b. Gratuity and Leave Encashment entitlement:

The company's liability towards the Gratuity and Leave Encashment is accounted for on the basis of actuarial valuation done at the year end and is charged to Statement of Profit and Loss.

7. TAXATION

Income Tax expenses comprise current tax (i.e. amount of tax for the year determined in accordance with the Income Tax Laws). Deferred Tax on assets are recognized and carried forward only if there is a virtual/ reasonable certainty of realization of such assets in near future and are reviewed for their appropriateness of respective carrying value at Balance Sheet date.

8. Provisions, Contingent Liabilities and Contingent assets:

Provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent liabilities are disclosed in the notes to accounts and are determined based on the management perception that these liabilities are not likely to materialize. Contingent assets are not recognized or disclosed in the financial statements.  

Note 22: ADDITIONAL NOTES TO FINANCIAL STATEMENT

1. Contingent Liabilities and commitments: Contingent Liabilities not acknowledged as debts:

a) regarding excise duty on unbranded French fries Rs.0.59lacs (brvious Rs.0.59) - Matters under appeal hence interest on such demand not provided for.

b) regarding Income Tax approx. Rs. 129.84 lacs (Previous Year Rs. 129.84 Lacs)

2. The confirmation, reconciliation and adjustment of balances pertaining to trade receivables and payables, loans and advances and capital advances is an ongoing process. As regards the outstanding trade receivables, loans and advances and capital advances, the significant portion of these are independently verified and the company is of the opinion that the same are fully recoverable and consequential adjustments and provisioning , if any, are not likely to be material given the nature ad size of its operation.

3. In the absence of any possibility of taxable profits in the near future, the company has not provided for Deferred Tax Asset as per AS-22. The company is not recognizing deferred tax assets in respect of huge unabsorbed debrciation and carried forward losses and other deferred tax assets as there is no certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

4. The company had raised invoice claims on Lamb Weston Inc. amounting to Rs.12.17 lacs during earlier years towards renting of cold storage, testing charges, custom duty and freight charges which are outstanding as at March 31,2015 . These amounts are recoverable in foreign currency and are doubtful of recovery. Accordingly, provision for these amounts had already been made in these accounts in 1997-98.

5. Disclosure pursuant to Accounting Standard -29: Rs. In lacs

Provisions for doubtful debts Debtors Loans and Advances

Opening balance as on 01.04.14 5.47 5.71

Provided /Utilised/ Reversed during the year NIL NIL

Closing balance as on 31.03.2015 5.47 6.71

5. The company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act.

2006. There are no micro and small enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2015. The above information pertaining to micro and small enterprises has been determined to the extent such parties have been identified on the basis of the information available with the Company. This has been relied upon by the auditors.

7. In respect of Accounting Standard 17 on "Segment Reporting", the Company is a single segment Company dealing in fresh, frozen and canned foods in accordance with the criteria for identification of reportable segment specified in the said standard

9. Interest on secured term loans (IDBI Bank and IFCI Ltd.) with the secured lenders have not been provided for in the books of accounts as the company had entered into negotiated settlement with the Secured Lenders - Financial Institutions in 2009-10. The company made a payment of Rs. 1 crore towards the said settlement in earlier years as part of the settlement but defaulted in the payment of further installments. Both of the secured lenders have revoked the negotiated settlement but the company has approached them again for resettlement of the matter and is hopeful of settlement in the near future. Current provision of Interest of Rs. 28.99 crs. due to the secured lenders along with Principal amount of Rs. 3.40 crs. as per Books of Accounts is more than the settlement amount discussed with these lenders and in view of this, there is no fresh provision of interest made for the year under review in the Books of Accounts.

10. The company has entered into One Time Settlement with one of its secured creditors- International Asset Reconstruction Company Pvt. Ltd. (assigned by Standard Chartered Bank ) for Rs.40 Lacs and has completely satisfied their charge. The interest on term loan provided but not paid amounting to Rs.1.08 Crs has been written back and is shown under the head- Extra- Ordinary Items.

11. The net worth of the company is negative as at the Balance Sheet date. However accounts of the company have been brpared on going concern basis since the company is taking necessary steps for its revival. In case the company is unable to continue as going concern in future, the resultant adjustments, if any are brsently not ascertainable.

12. Liabilities recognized in the Balance Sheet as on 31st March, 2015 with respect to gratuity is Rs. 9.39 Lacs (Previous year Rs. 8.77 lacs) and with respect to leave encashment/ entitlements Rs. 0.87 Lacs (Previous Year Rs. 1.19 lacs) as per the Actuarial Valuation. The following table set out the status of the Gratuity plan as required under AS-15. Reconciliation of the opening and closing value of the defined benefit obligation.

14. The Company suffered loss on account of deterioration of stocks arising out of break down in Generating set and earthquake damages to the cold store building. Company had filed insurance claim with National Insurance Co. in 2001 for deterioration of stocks, machinery break down, for generator set and cold store building which are all pending till date.

15. The company has filed a case in Delhi High Court in 2004 for losses on account of damages to the cold store, deterioration of stocks, machinery break down. The case has been admitted and the evidences are being taken up.

16. The company has been served with a statutory notice under section 13 (2) of Securitization and Reconstruction of the Financial assets and Enforcement of Securities Interest Act, 2002, by IDBI Bank Ltd. in 2007.

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