Mahaan Foods Limited (MFL) is an ISO 9001/2000 & HACCUP certified company which was incorporated in 1987. The Company is engaged in manufacturing of dairy products and pharma nutritional products.

Note 2. Share Capital

a) Rights, preferences and restrictions attached to Shares

Equity Shares:

The Company has only one class of equity shares having a par value of Rs.10 per share. Each Shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company

Note 3 Contingent Liabilities:

Particulars                          As at 31st             As at 31st
                                     March, 2015            March, 2014

Sales Tax                            53,17,872              53,17,872

Entry tax                            5,31,614               5,31,614

Some of balance of debtors, creditors and loans and advances are subject to confirmation from" respective parties. No significant impact is expected on the Profit and loss account on this account." The effect of the same if any which is not likely to be material will be adjusted at the time of confirmation."

Note- 5 Employee Benefit's :

Defined Contribution Plans :

The Company charged Rs.NIL (Previous year Rs. 2,15,447.00) for provident fund contribution to the profit and loss account. The contributions towards these schemes by the Company are at rates specified in the rules of the schemes.

Defined Benefit Plans :

Liability for Gratuity and Privilege leaves is determined on actuarial basis.

Gratuity Scheme provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion of five years of service, except death while in employment.

The basis for determination of liability is as under :

Note- 6 Related Party Disclosures as per Accounting Standard 18.

Names of related party and nature of related party relationship:

Associates

Zeon Life sciences Ltd (Previously known as Mahaan Dairies Ltd)., Mahaan Proteins Ltd., Lactomalt Foods Pvt., Ace International. Healthy India Nutritional Products Pvt. Ltd. Best Milk Foods Pvt. Ltd.

Key Management Personnel: Mr. Sanjeev Goyal, Managing Director and Mrs. Saloni Goyal, Director

Key Management Personnel's relatives: M/s Rajiv Goyal HUF (HUF of Mr. Rajiv Goyal), Mr. Amar Nath Goyal ( Father of Mr. Sanjeev Goyal), M/s A N Goyal HUF( HUF of father of Mr. Sanjeev Goyal), Mr.Rajiv Goyal ( Brother of Mr. Sanjeev Goyal), Mrs. Shashi Goyal (Mother of Mr. Sanjeev Goyal), Mr.Suresh Garg, Mr.Dalip Chand Garg (Father of Mr. Suresh Garg), Mr.Dalip Chand Garg HUF (HUF of Mr. Suresh Garg's Father),Rani Garg (wife of Mr. Suresh Garg)

The following transactions were carried out with the related parties in the ordinary course of business :

Note 7 Exceptional Item (Transfer of Assets & Liabilities under family settlement )

Mahaan group company initially started the business in the year 1987 with equal contribution and participation of Mr. A.N. Goyal and Mr. Suresh Garg.Mr. Rajeev Goyal(son of Mr. A.N. Goyal), Mr. Sanjeev Goyal (son of Mr. A.N. Goyal) and the member of the family thereafter jointly established and promoted the Mahaan Group constituting the various companies referred to as

(a) Mahaan Proteins Ltd.

(b) Zeon Life science Ltd.

(c ) Mahaan food Ltd. (Consisting further 2 unites Mahaan Bioysis and Mahaan Nutritions)

(d) Ace International

And the promoters groups are reffered to as

(a) Mr. A N Goyal as ANG Group

(b) Mr. Suresh Garg as Garg Group

(c) Mr. Saneev Goyal as SG Group

(d) Mr. Rajeev Goyal as RG Group

All the parties enjoyed good relationship and jointly carried on the business of the Mahaan group for more than 2 decades. However with the passage of time, certain disputed and differences arose between the parties and in order to resolve these disputes and differences, The parties decided to re- arrange the ownership of the companies and to divide the assets and liabilities of the Mahaan Group In order to give effect to the family settlement they entered in to the Memorandum of Family Settlement (MOFS) dated 31.08.2010

Broad settlement amongst the groups is as under:-

(a) The Ownership, Management and control of Zeon Lifesience Ltd. and Mahaan Biosys & Mahaan Nutrition both unit of MFL has been decided to be accorded to Mr. Suresh Garg( Garg Group)

(b) The Ownership, Management and control of Mahaan Proteins Ltd has been decided to be accorded to Mr. Rajeev Goyal (RG Group)

(c) The Ownership, Management and control of ACE International and Dairy division of MFL has been decided to be accorded to Mr, Sanjeev Goyal (SG Group)

(d) Payment of 6.8 Crore by Mr. Suresh Garg to other promoters group.

(e) Mr. A.N. Goyal Expressed his desire to retire from active business.

(f) Transfer of Loan liabilities (All secured liabilities towards loans and interests outstanding) of Mahaan Food Ltd. by Garg Group

(g) Transfer of 1 /4th share of property at Greater Kailash by Garg Group in favour of SG Group

(h) Exchange of Shareholding inter se.

Till November 2011 nothing could be executed amongst the groups due to disagreements on various issues in the settlement. Finally application under Section 9 of Arbitration and Conciliatrion Act 1996 was moved by SG Group before the Hon'ble Delhi High Court for expeditious execution of MOFS.

Obligation completed during Financial Year 2012-13

In terms of court order dated 30-5-2012 following compliances were made

1. Garg Group made a part payment of Rs 145 lacs to RG Group

2. Garg Group made payment of Rs. 200 lacs to ANG Group

3. Garg Group , RG Group & ANG Group exchange their respective shareholdings.

Obligation completed during Financial Year 2013-14

In terms of court order dated 10-5-2013 one compliance was made i.e.

1. Garg Group acquired two units of Mahaan Foods Limited namely MB and MN along with assets and liabilities

Pending obligations as on 31.03.2014

Obligation mentioned at serial no. (d), (g), (h) above are pending as on date

Pending obligations as on 31.03.2015

Obligation mentioned at serial no. (d), (g), (h) above are pending as on date

The net difference between the book balances relating to various assets and loans/liabilities taken over by Garg Group and its assumed \ agreed values has been shown as "Exceptional Item". In previous year. Few book balances are yet to be squared up in view of obligations\transactions which are pending under MOFS as on the date of Balance Sheet.

Note - 8 segment reporting

There are no reportable segments as per Accounting standard standard 17 on segment reporting

Note - 9 Additional information pursuant to the provision of part-ll of Schedule III to the Companies Act, 2013 (Figures in brackets are in respect of previous year.)

Note: Goods manufactured for others:

Complan: The production during the year was NIL MT (Previous Year 899 MT )

B. Licensed Capacity:

Not applicable, as per notification No. 477(E) dated 25.7.91 issued under the Industries (Development & Regulation) Act, 1956.

C. Installed Capacity:

The products are manufactured in integrated plant, hence product wise installed capacity cannot be given. However, as certified by the Management, the installed capacity is 3,900 MT (Previous year 3,900 MT) for Base Proteins/ Maltodextrine and 6600 MT (Previous year 6,600 MT) for Energy Drinks.

The products viz. Dairy Creamer and Pure Ghee are manufactured in an integrated plant taken on lease, hence product wise installed capacity cannot be given. However, as certified by the Management, the installed capacity is 5000 MT (Previous year 5000 MT) per annum for various types of Milk powders, 2000 MT (Previous year 2000) per annum for Ghee.

Note 10 General

a. Figures have been rounded off to nearest rupee.

b. Previous year's figures have been regrouped and/or rearranged wherever considered necessary.