Notes to Accounts of Milk Specialities Ltd.

Mar 31, 2012

1.1 The company has only one class of shares refered to as equity shares having a par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share.

1.2 The details of Shareholders holding more than 5% shares:

2.1 Term Loan referred above is secured by way of equitable mortgage/charge on the immovable properties situated at village GhollumajraTehsil Derrabassi Distt Mohali Punjab and is further secured by personal guarantees of private three promoter Directors of the company. The entireterm loan has been repaid during the year.

3.1 Working Capital loans are secured by hypothecation of present and future stock of raw material, stock-in-process , finished goods, stores and spares, book debts, recievables etc. The loan is further secured by way of equatable mortgage /charge on the immovables properties situated at village Ghollumajra Tehsil Derrabassi Distt Mohali Punjab and personal guarantees of private three promoter directors of the company . The loan is further secured by mortgage of land and corporate guarantee of interrelated party/company.

4. All Trade Recievables are unsecured and considered good. Trade Recievables includes Rs. 88.77 lacs (Rs.91.81 lacs) outstanding for more than six months.

5. Expenditure and Earnings in Foreign Currency is Rs. Nil ,

6. The Company's primary business segment is sellipg'milk and milk products . As company's business activities fall with in a single business segment, the disclosure requirement of AS-17 in this regard are not applicable.

7. No Assets were identified as impaired during the year.

8. RELATED PARTY DISCLOSURES

a. Name of related party and nature of related party relationship where control exists

i) Holding Company NIL

ii) Subsidiary Company NIL

b. Name of related party and nature of related party relationship other than those referred to in (a) above in transaction with the company:

i. Joint venture etc. : NIL

ii. Key Management Personnel : Mr. Jagjeet Singh

Mrs. SukhwinderKaur

Mr. Charan Singh

iii. Relative of Key Management Paersonnel :

Mr. Aman Sachdev

Ms. Riya Sachdev

c. Related Parties:

i. MSL Finance Pvt. Ltd.

ii. C.D. Leasing & Investment Pvt. Ltd.

iii. Crux Credit & Portfolio Pvt. Ltd.

iv. Canon Marketing Pvt. Ltd.

v. Abridge Credit & Portfolio Pvt. Ltd.

vi. Uprise Marketing Ltd.

vii. Vaman Portfolio Management Services Pvt. Ltd.

viii. Antartic Services Pvt. Ltd.

ix. Seasons Markting Ltd.

x. Bestbuy Marketing Ltd.

xi. MSL Marketing Ltd.

9. CONTINGENT LIABILITIES

9.1 The Income Tax assessments of the company has been completed upto the Assessment Year 2008-09. The disputed addition outstanding upto the said Assessment Year is Rs. 63.62 Lacs. Based on the decision of the Applellate authorities and the interpretations of other relevant provisions, the company is of the opinion that the demand to be calculated on this addition is likely to be either deleted or substantially reduced and accordingly no provision has been made.

9.2 The Sale Tax assessments of the company has been completed upto the Financial Year 2007-08. The disputed demand outstanding up to the said Financial Year is Rs. 132.53 Lacs. Based on the interpretations of other relevant provisions, the company is of the opinion that the demandis likely to be either deleted or substantially reduced and accordingly no provision has been made.

10. Depreciation on Electrical Installation, Computers and Vehicles has not been provided since their Gross Block has already been depreciated upto 95%.

11. Unsecured Loan has been classified as Long Term Liability since these are not to be repaid during currency of Credit Facilities from banks.

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Mar 31, 2010

1. Balance in respect of Sundry Creditors, Sundry Debtors and Loans and advances are subject to confirmation and taken as per books of accounts.

2. The previous year figures have been regrouped/re-arranged wherever necessary. The figures have been rounded off nearest to rupee.

3. Schedule 1 to 11 form an integral part of Balance Sheet and Profit and Loss Accounts

Notes:

- No Licence is required, since it falls under exempted category.

- Installed Capacity can not be given for each product, being a composite Dairy Plant.

4. During the year the company entered into transactions with the related parties. The company consignee goods worth Rs. 294.90 lacs to MSL Marketing Ltd. and purchased goods worth Rs.3549.15 lacs from Seasons Marketing Ltd.

5. The Companys primary business segment is selling milk and milk products. As companys business activities fall with in a single primary business segment, the disclosure requirement of AS-17 in this regard are not applicable.

6. No asset were identified as impaired during the year.