IND DAIRYTECH LIMITED ANNOUNCES PLANNED RESTATEMENT OF FINANCIAL RESULTS

VANCOUVER, April 11 /CNW/ - IND DairyTech Limited ("IND" or "the Company") (TSXV: IND) announces that it intends to restate and refile its consolidated annual financial statements and MD&A for the years ended, December 31, 2008 and December 31, 2009. The restatements are a result of a re-assessment of the accounting for certain lease agreements with initial values of $5,817,884 (RMB42,999,980) as at December 31, 2007 for the years ended December 31, 2008 and 2009 that were initially treated as capital leases that the Company has since determined to be operating leases.  The Company has also reviewed the related amounts of due to co-op farms received or receivable in those years and has determined there needs to be restatements of the interest expenses recorded in those years, which will have a material impact on the results of operations for the Company for those years.  These potential restatements were previously disclosed by the Company in its interim financial statements and MD&A for the three and twelve months ended December 31, 2010.

The Company further advises that it is in the process of determining whether a restatement is required relating to the valuation of certain embedded derivative features in the Company's Series A Preferred Share investment agreements with SAIF III Partners L.P. ("SAIF"). Due to the complexity of this derivative valuation, the Company cannot predict at this time what the potential impact, if any, the valuation of the embedded derivatives will have on previous financial results reported by the Company.

Restating the capital leases into operating leases and restating the interests expenses will result in the December 31, 2008 capital lease assets being reduced by $7,203,696, capital lease obligations reduced by $7,718,539, and interest payable reduced by $2,152,046. The loss for the year 2008 will be reduced by $2,320,377 and the loss for the year 2009 will be increased by $2,666,616. The impacts of the possible restatement of the derivatives has not been determined at this moment. If the possible restatements for the derivatives will have material impacts on the December 31, 2009 consolidated financial statements and the 2010 interim consolidated financial statements, such impacts will be incorporated in the restatements for those periods.

The Company is also working with its current auditors for the audit of the year ended March 31, 2011. The restatements are expected to be completed before the release of the audited March 31, 2011 consolidated financial statements.

About IND DairyTech Limited

IND, through its operating subsidiaries, is an emerging raw milk and Holsteins producer in China that is seeking to become a leading provider of high quality raw milk and Holsteins to the Chinese dairy industry. To meet China's increasing demand for dairy products, the Company is using Canadian cattle genetics and North American farming practices to establish and develop its dairy herd in China.

The Company plans to develop its herd in China through the use of advanced breeding techniques employing Canadian Holstein embryos that it intends to use to impregnate surrogate cows. These embryos have been created through in vitro fertilization using sexed semen to achieve an approximate 90% female birth rate. The use of these advanced breeding techniques is expected to allow the Company to rapidly expand its herd. The use of Canadian Holstein embryos also provides a practical solution to China's ban on the import of live Canadian cattle.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

FORWARD LOOKING INFORMATION

Certain information set out in this News Release constitutes forward-looking information. Forward-looking statements (often, but not always, identified by the use of words such as "expect", "may", "could", "anticipate" or "will" and similar expressions) may describe expectations, opinions or guidance that are not statements of fact. Forward-looking statements are based upon the opinions, expectations and estimates of management of the Company as at the date the statements are made and are based on certain assumptions and subject to a variety of known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements.  Factors which could cause results or events to differ from current expectations include, among other things: the timing, impact and outcome of the planned restatement of our previously announced or filed financial results; our ability to meet our filing obligation going forwards; our ability to work with our auditors to arrive at a satisfactory and timely outcome on the restatement of our financial statements; cash flows and compliance with our covenants set out in the investment agreements signed by the Company and its subsidiaries. For additional information with respect to certain of these and other factors, please see the most recent financial statements and MD&A filed by us on SEDAR  In light of the risks  and uncertainties associated with forward-looking statements, readers are cautioned not to place undue reliance upon forward-looking information. Although the Company believes that the expectations reflected in the forward-looking statements set out in this press release or incorporated herein by reference are reasonable, it can give no assurance that such expectations will prove to have been correct. The forward-looking statements of the Company contained in this press release, or incorporated herein by reference, are expressly qualified, in their entirety, by this cautionary statement.  Except as required by applicable laws, the Company hereby disclaims any intention or obligation to update or revise any forward-looking statements.

SOURCE Ind Dairytech Limited

For further information:

Jesse Zhu
Chief Executive Officer
IND DairyTech Limited
604-522-1619
                    Selen Zhou
Corporate Secretary
IND DairyTech Limited
604-522-1619

 

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