The Directors hereby present their 23rd Annual Report together with
the Audited Accounts of the Company for the year ended 31st March,
Year Ended Year Ended
Net Sales and other Income 62673 64049
Operating (Loss)/ Profit (125) 2114
Finance Cost 1790 1627
Cash (Loss)/ Profit (1915) 487
Depreciation & Amortisation 481 701
Exceptional items - (1144)
(Loss)/ Profit before Tax (2396) 930
(Loss)/ Profit after Tax (2225) 944
During the year under review, the Company achieved Net Sales and Other
Income of Rs. 626.73 crores against Rs. 640.49 crores in the previous year.
The Company faced difficult market situation right from the beginning of
the fiscal. The global commodity market went into the turmoil, which
continued throughout the fiscal 2014-15. This not only affected the
international market but also had its impact on the domestic market.
The product prices of Milk Powders, Casein and other dairy commodities
had a sharp decline. On the other hand, the major input cost i.e. Milk
prices stood to its ground and did not soften up in tandem with the
This resulted into Company facing operating loss of Rs. 125 Lacs as
against the operating Profit of Rs. 2114 Lacs, last year.
During the quarter ending 30th June, 2015, the Company has achieved Net
Sales and other Operating Income of Rs. 136.75 crores as against Rs. 163.83
crores during the same period last year. The demand of exports based
products of the Company in the international market and Milk Powders in
the domestic market continued to be weak in this period.
Looking to the changed market scenario the Company has reviewed its
working, product mix and focus to meet the market challenges. The
Company has realigned
its business strategy by adding more remunerative product mix and has
decided to focus on marketing and distribution of fresh dairy products
like Milk in sachets, Dahi, Lassi etc. in its own brand. We have
started introducing these products in the neighbouring markets and have
encouraging response. These initiatives are expected to yield better
As the members are aware that the Company has fled a Special Leave
Petition with the Hon''ble Supreme Court of India against the judgment
of Hon''ble Punjab & Haryana High Court challenging imposition of Milk
Cess by the Govt. of Haryana. The Hon''ble Supreme Court on 7th
September, 2012, directed an interim stay of the High Court judgment
and order subject to the Company''s depositing 50% of the cess levied
and demanded by the Government of Haryana which has been deposited with
the Department within the stipulated time. The matter is expected to
come up before the Hon''ble Supreme Court for hearing shortly.
OPTIONALLY CONVERTIBLE DEBENTURES
In terms of the CDR rework package Optionally Convertible Debentures
were allotted by the Company to the lenders on 3rd April, 2013.
The lenders have exercised their option for conversion of OCDs into
equity. Your Company has conveyed to the lenders that it cannot allot
shares at a price less than Rs. 60 per share. The matter is under
consideration and discussion with the lenders.
The Company is in discussions with the Lenders to find out a workable
solution to the present financial difficulties of the Company.
QUALITY, FOOD SAFETY & ENVIRONMENT STANDARDS
The Company is committed to maintain best of the management practices
in its plant. In pursuit of its commitment, the Company''s systems have
been certified by DNV Netherlands for Quality Management Systems, Food
Safety Systems and Environment Management Systems. The manufacturing
facilities continue to maintain ISO 9001:2008, ISO 14001:2004, HACCP
Certification and Food Safety Systems certification i.e. FSSC 22000 :
2011. Further FSSC:22000 has been upgraded to the latest version of
combining ISO:22000:2005 and ISO/TS 22002/1 in July 2014.
Pursuant to the provisions of the Companies Act, 2013 and the Articles
of Association of the Company, Dr. Renu Vig was appointed as an
Additional Independent Non Executive Director w.e.f. 1st July, 2015 by
the Board of Directors of the Company and she shall hold Office up to
the date of the ensuing Annual General Meeting. The Company has
received notice in writing from a member proposing Dr. Renu Vig for
appointment as an Independent Director.
Mr. Krishan Kumar Goyal, Chairman & Mg. Director of the Company shall
retire by rotation at the ensuing Annual General Meeting and being
eligible has offered himself for reappointment.
During the year, four Board Meetings were convened and held, the
details of which are given in the Corporate Governance Report
DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors have given a declaration under
sub-section (7) of section 149 of the Companies Act, 2013 that they
meet the criteria of independence as laid down under section 149 (6) of
the Companies Act, 2013 and Clause 49 of the Listing Agreement.
BOARD DIVERSITY AND REMUNERATION POLICY
The Company has a policy for formation of the Board to have Executive
Directors and Independent Directors of diverse background to maintain
the independence of the Board. As on 31st March, 2015, the Board
consists of seven members out of which two are Executive Directors, two
Nominee Directors and three are independent directors. The Board
periodically evaluates the need for change in its composition and size.
We affirm that the remuneration paid to the Directors is as per the
terms approved by the Nomination and Remuneration Committee of the
In the 22nd Annual General meeting held on 24th September, 2014, M/s.
Walker Chandiok & Co LLP, Chartered Accountants were appointed as
Statutory Auditors of the Company to hold Office till the conclusion of
AGM to be held in the year 2019, subject to the ratification by the
members at every Annual General Meeting.
Accordingly the matter of ratification of the appointment of M/s.
Walker Chandiok & Co LLP as statutory auditors of the Company for the
FY 2015-2016 shall be placed before the members. The Statutory Auditors
have confirmed their eligibility to the effect that their appointment,
if made would be within the prescribed limits under the Companies Act,
2013 and that they are not disqualified.
The Board of Directors have approved the appointment and remuneration
of M/s. Aggarwal Vimal & Associates as Cost Auditors of the Company to
conduct the cost audit for the year 2015-16 on the recommendations of
the Audit Committee subject to the ratification of the remuneration by
the Shareholders. The Board has appointed M/s. Sharma Sarin &
Associates, Company Secretaries, to conduct Secretarial Audit for the
Financial Year 2014-15. The Secretarial Audit Report in Form MR-3 for
the Financial Year ended 31st March, 2015 is annexed herewith as
Annexure ''A'' to this report.
All the comments of the Statutory Auditors on the Annual accounts are
self explanatory and require no further explanation.
A detailed review of business risks and the Company''s plan to mitigate
them is presented to the Audit Committee and Board. The Company has
been taking steps to mitigate foreseeable business risks. Business risk
evaluation and management is an ongoing and continuous process within
the Company and regularly updated to the Audit Committee and Board.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with
reference to the Financial Statements. During the year, such controls
were tested and no reportable material weakness was observed in the
design or implementation.
MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING FINANCIAL POSITION
OF THE COMPANY
There are no adverse material changes or commitments occurring after
31st March, 2015, which may affect the financial position of the
Your Company did not invite or accept any fixed deposit pursuant to
provisions of Chapter 5 of the Companies Act, 2013, during the year.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Loans, guarantees and investments covered under section 186 of the
Companies Act, 2013 form part of the Notes to the Financial Statements
provided in this Annual Report.
RELATED PARTY TRANSACTIONS
All contracts or arrangements entered into by the Company with Related
Parties have been done at an arm''s length and are in the ordinary
course of business. Pursuant to Section 134 of the Companies Act, 2013
read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the
particulars of such transactions are provided in Form AOC-2 which is
annexed as Annexure B to this report. Related Party disclosures as
per AS-18 have been provided in the Notes to the Financial Statement.
CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS
A separate report on Corporate Governance and Management Discussion &
Analysis is attached to this report.
Harmonious employee relations prevailed throughout the year. Your
Directors place on record their appreciation for all categories of
employees for their hard work and dedication.
There were no employees employed throughout the financial year or part
thereof drawing remuneration as prescribed under Rule 5 of Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014.
EXTRACT OF ANNUAL RETURN
The extract of annual return as provided under section 92(3) is annexed
herewith as annexure ''C''.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO.
Information as per section 134(3) of the Companies Act, 2013, read with
Rule 8 of the Companies (Accounts) Rules 2014, is given in the Annexure
''D'' and forms part of this report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to section 134(5) of the Companies Act, 2013,
your Directors confirm that:
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed
(b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at 31st March, 2015 and of the loss of the Company for
(c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
(d) the annual accounts are prepared on a going concern basis;
(e) they had laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and were
(f) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
Your Directors wish to place on record their sincere appreciation for
the continued support from its business associates and stakeholders of
For & on behalf of the Board
Place: Chandigarh Krishan Kumar Goyal
Dated: 8th August, 2015 Chairman & Mg. Director