dodla dairy ltd share price Directors report


Dear Members,

Your Directors are pleased to present the 28th Annual Report on the business and operations of Dodla Dairy Limited ("the Company/your Company") together with the Audited Financial Statements (Standalone and Consolidated) for the year ended 31 March 2023.

FINANCIAL HIGHLIGHTS

(Amount (Rs.) in million)

Consolidated

Standalone

Particulars

2022-23 2021-22 2022-23 2021-22

Total Income

28,349.80 22,570.54 26,080.43 21,290.10

EBITDA

1,913.22 2,107.28 1,498.26 1,861.65

Finance Cost

12.10 65.18 11.99 64.93

Depreciation, Amortisation, Impairment

612.27 523.53 576.19 488.57

Profit Before Tax

1,518.36 1,655.60 1,149.27 1,633.41

Current Tax

413.91 434.61 296.40 385.81

Deferred Tax charge

(118.39) (107.14) (96.98) (118.57)

Interim Dividend Paid (T /Share)

0 0 0 0

Paid up Equity Share Capital

594.93 594.93 594.93 594.93

Basic Earnings per Equity Share (in T)

20.55 22.43 15.97 23.07

Reserves

9,127.40 7,836.68 8,236.41 7,278.96

OVERVIEW OF COMPANYS FINANCIAL PERFORMANCE

On consolidated basis, the revenue from operations for FY 2023 was Rs.28,120.29 Million, higher by 25.35% over the previous years revenue of Rs.22,433.51 Million. The profit after tax (PAT) attributable to shareholders for FY 2023 and FY 2022 was Rs.1,222.84 Million and Rs.1,328.13 Million, respectively.

On a standalone basis, the revenue from operations for FY 2023 was Rs.25,841.24 Million, higher by 23.26% over the previous years revenue of Rs.20,964.84 Million in FY 2022. The profit after tax (PAT) attributable to shareholders for FY 2023 and FY 2022 was Rs.949.85 Million and Rs.1,366.17 Million, respectively.

There was no change in nature of business of the Company. There were no significant or material orders passed by regulators, courts or tribunals impacting the Companys operations in future.

TRANSFER TO RESERVES

There is no amount proposed to be transferred to reserves for Financial Year 2022-23.

DIVIDEND

Keeping in view the future expansion plans, your Board of Directors do not recommend any dividend for Financial Year 2022-23.

DIVIDEND DISTRIBUTION POLICY

The Company has adopted the Dividend Distribution Policy to determine the distribution of dividend in accordance with the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "Listing Regulations"). The Dividend Distribution Policy is available on the Companys website at: https://www.dodladairv.com/ static/investors/code-of-policv/Dividend%20Distribution%20Policv.pdf

UNCLAIMED DIVIDEND AND SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 124 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 and rules made thereunder there is no unclaimed / unpaid amounts or shares were transferred to the Investor Education and Protection Fund (IEPF).

UTILISATION OF IPO PROCEEDS

Dodla Dairy Limited has raised funds through Initial Public Offer (IPO) aggregating up to Rs.5,201.77 million ("offer"). The offer comprises an offer for sale of 10,985,444 equity shares aggregating up to Rs.4,701.77 million ("offer for sale") and a fresh issue of 1,168,224 equity shares aggregating up to 500 million (1,168,224 equity shares of Rs. 428/-) with the object of utilization of net proceeds to fulfil the repayment and/ or pre-payment, in full or part, of certain borrowings availed by our Company from ICICI Bank Limited, the Hongkong and Shanghai Banking Corporation Limited and HDFC Bank Limited, Funding incremental capital expenditure requirements of our Company and General corporate purposes.

The Company has fully utilized the fresh issue of IPO proceeds to fulfil the repayment and/ or pre-payment, in full or part, of certain borrowings availed by our Company from ICICI Bank Limited, the Hongkong and Shanghai Banking Corporation Limited and HDFC Bank Limited, Funding incremental capital expenditure requirements of our Company and General corporate purposes.

SHARE CAPITAL

During the year under review there was no change in the authorised or paid-up share capital of the Company.

The Authorised share Capital of the Company as on 31 March 2023 is Rs. 75,00,00,000 divided into 7,50,00,000 Equity Shares of Rs. 10 each fully paid up. The Paid-up Share Capital of the Company as on 31 March 2023 is Rs. 59,49,27,350 divided into 5,94,92,735 Equity Shares of Rs. 10 each fully paid up.

LISTING OF EQUITY SHARES

The Companys equity shares are listed on the following Stock Exchanges:

(i) BSE Limited, Phiroze JeeJeebhoy Towers, Dalai Street, Mumbai - 400 001, Maharashtra, India; and

(ii) National Stock Exchange of India Limited, Exchange Plaza, Floor 5, Plot No. C/1, G Block, Bandra- Kurla Complex, Bandra (East), Mumbai - 400051, Maharashtra, India.

The Company has paid the Annual Listing Fees to the said Stock Exchanges for the Financial Year 2023-24.

SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES

During the year the company incorporated a wholly owned subsidiary of the company in Kenya i.e. Country Delight Dairy Limited, Date of Registration 22 November 2022, Company Number: PVT-DLULG7LZ .

Country Delight Dairy Limited main object is to carry out production, processing of milk, milk products and distribution of dairy and other products.

The Company has invested KES 1,000,000.00 (1000 ordinary shares each KES 1,000.00) in Country Delight Dairy Limited, which is equivalent to 100 % of its issued and paid-up equity share capital.

The Company has 5 subsidiaries (i.e., Dodla Holdings Pte. Limited, Lakeside Dairy Limited, Dodla Dairy Kenya Limited, Country Delight Dairy Limited and Orgafeed Private Limited) and 1 associate company (i.e., Global Vetmed Concepts India Private Limited) as on 31 March 2023. There are no joint venture companies. There has been no material change in the nature of the business of the subsidiaries and associates.

The Subsidiary Companies situated in India and Outside India continue to contribute to the overall growth in revenues and overall performance of the Company.

As per the provisions of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the Financial Statements of the Subsidiary Companies/ Associate Companies/Joint Ventures in Form AOC-1 is annexed to this Boards Report as Annexure - I.

The detailed policy for determining material subsidiaries as approved by the Board is uploaded on the Companys website and can be accessed at the Web-link: https://www. dodladairv.com/static/investors/code-of-policv/Policv%20 for%20Determining%20Material%20Subsidiarv.pdf

PERFORMANCE AND CONTRIBUTION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

As per Rule 8 of Companies (Accounts) Rules, 2014, a Report on the Financial performance of Subsidiaries, Associates and Joint Venture Companies along with their contribution to the overall performance of the Company during the Financial Year ended 31 March 2023 is appended to this Report as Annexure - II.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements are prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013.

The Consolidated Financial Statements for the Financial Year ended 31 March 2023 forms part of the Annual Report.

As per the provisions of Section 136 of the Companies Act, 2013, the Company has placed separate Audited accounts of its Subsidiaries on its website https://www.dodladairy. com/Financial statements of subsidiary companies and a copy of separate Audited Financial Statements of its Subsidiaries will be provided to shareholders upon their request.

DETAILS OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

During the Financial Year 2022-23, no company ceased to be subsidiary and associates of the company and your company does not have any joint ventures

KEY MANAGERIAL PERSONNEL & DIRECTORS

The appointment and remuneration of Directors are governed by the Policy devised by the Nomination, Remuneration and Compensation Committee of your Company. The detailed Nomination and Remuneration Policy on its website of the company: https://www. dodladairy.com/codes and polices

Key Managerial Personnel (KMP)

During the year under review, there was no change in the Key Managerial Personnel of the Company.

Following are the KMPs of the Company in terms of Sec 203 of the Act

Dodla Sunil Reddy

: Managing Director (MD)

Ambavaram Madhusudan Reddy

: Whole time Director (WTD)

B V Krishna Reddy

: Chief Executive Officer (CEO)

Anjaneyulu Ganji

: Chief Financial Officer (CFO)

Surya Prakash Mungelkar

: Company Secretary & Compliance officer (CS & CO)

Directors

Dodla Sesha Reddy, Director, is liable to retire by rotation and being eligible for re-appointment.

The board of directors of the company proposed to change designation of Mr. Akshay Tanna from Nominee Director to Non-Executive - Non-Independent and the same is being placed before the shareholders of the Company in this 28th Annual General Meeting for their approval.

During the year under review, there was no change in Composition of the Board of the Company.

Composition of the Board

Dodla Sesha Reddy

: Chairman

Dodla Sunil Reddy

: Managing Director

A Madhusudhana Reddy

: Whole Time Director

Akshay Tanna

: Nominee Director

Dr. Raja Rathinam

: Independent Director

Rampraveen Swaminathan

: Independent Director

Tallam Puranam Raman

: Independent Director

Vinoda Kailas

: Independent Director

None oi the directors oi the company are disqualified under the provisions of the Companies Act 2013.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

During the year, the Board met 5 (Five) times i.e., on 16 May 2022, 02 August 2022, 22 October 2022,19 November 2022 and 21 January 2023.

Details of the attendance of the Directors at the Board meetings held during the year ended 31 March 2023 are as follows:

Number of Board Meetings

Name of the Director

Held Attended

Dodla Sesha Reddy

5 5

Dodla Sunil Reddy

5 5

A Madhusudhana Reddy

5 5

Akshay Tanna

5 4

Rampraveen Swaminathan

5 2

Tallam Puranam Raman

5 5

Dr.Raja Rathinam

5 5

Vinoda Kailas

5 5

DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT, 2013

Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directors Responsibility Statement, the Board of Directors of the Company hereby confirms:

i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

ii) that the Directors 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 on 31 March 2023 and Profit and Loss Account of the Company for that period;

iii) that the Directors 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;

iv) that the Directors have prepared the Annual Accounts for the Financial Year ended 31 March 2023 on a going concern basis;

v) that the Directors have laid down internal Financial controls to be followed by the Company and that such internal Financial controls are adequate and were operating effectively; and

vi) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DECLARATION FROM INDEPENDENT DIRECTORS

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

COMPOSITION OF THE COMMITTEES AND ITS MEETINGS

Audit Committee

The Audit Committee comprises of following Directors:

Name of the Director

Position

Designation on Board

Tallam Puranam Raman

Chairman

Independent Director

Rampraveen Swaminathan

Member

Independent Director

Dr. Raja Rathinam

Member

Independent Director

Dodla Sunil Reddy

Member

Managing Director

During the period, the Audit Committee met 4 (Four) times on 16 May 2022, 02 August 2022, 22 October 2022 and 21 January 2023.

Details of the attendance of the Audit Committee held during the year ended 31 March 2023 are as follows:

Number of Audit Committee Meetings

Name of the Director

Held Attended

Tallam Puranam Raman

4 4

Rampraveen Swaminathan

4 4

Dr. Raja Rathinam

4 4

Dodla Sunil Reddy

4 4

Nomination, Remuneration and Compensation Committee

The Nomination, Remuneration and Compensation Committee comprises of the following Directors:

Name of the Director

Position

Designation

Rampraveen Swaminathan

Chairman

Independent Director

Raman Tallam Puranam

Member

Independent Director

Dodla Sesha Reddy

Member

Non Executive Non-Independent Director

During the period the Nomination, Remuneration and Compensation Committee met 2 (Two) times on 16 May 2022 and 21 January 2023.

Details of the attendance of the Nomination, Remuneration and Compensation Committee held during the year ended 31 March 2023 are as follows:

Name of the Director

Number of Nomination, Remuneration and Compensation Committee Meetings

Held Attended

Rampraveen Swaminathan

2 2

Raman Tallam Puranam

2 2

Dodla Sesha Reddy

2 2

Stakeholders Relationship Committee

The Stakeholders Relationship Committee comprises of following Directors:

Name of the Director

Designation

Position on the Committee

Raman Tallam Puranam

Independent Director

Chairman

Dodla Sunil Reddy

Managing Director

Member

Akshay Tanna

Nominee Director

Member

During the period the Stakeholders Relationship Committee met 1 (One) time on 21 January 2023.

Details of the attendance of the Stakeholders Relationship Committee held during the year ended 31 March 2023 are as follows:

Stakeholders Relationship Committee Meetings

Name of the Director

Held Attended

Raman Tallam Puranam

1 1

Dodla Sunil Reddy

1 1

Akshay Tanna

1 0

Corporate Social Responsibility (CSR) Committee

The Corporate Social Responsibility (CSR) Committee comprises of the following Directors:

Name of the Director

Position on the Committee

Designation

Dodla Sesha Reddy

Chairman

Non-Executive Non-Independent Director

Akshay Tanna

Member

Nominee Director

Vinoda Kailas

Member

Independent Director

During the period Corporate Social Responsibility (CSR) Committee met 2 (Two) time i.e., on 16 May 2022 and 21 January 2023.

Details of the attendance of the Corporate Social Responsibility (CSR) Committee held during the year ended 31 March 2023 are as follows:

Name of the Director

Number of Corporate Social Responsibility (CSR) Committee Meetings

Held Attended

Dodla Sesha Reddy

2 2

Akshay Tanna

2 1

Vinoda Kailas

2 2

Risk Management Committee

The Risk Management Committee consists of the following Directors:

Name of the Director

Position on the Committee

Designation

Dr. Raja Rathinam

Chairman

Independent Director

Akshay Tanna

Member

Nominee Director

Madhusudhana Reddy Ambavaram

Member

Whole-time Director

During the period Risk Management Committee met 2 (Two) time i.e., on 02 August 2022 and 21 January 2023.

Details of the attendance of the Risk Management Committee held during the year ended 31 March 2023 are as follows

Name of the Director

Number of Corporate Social Responsibility (CSR) Committee Meetings

Held Attended

Dr. Raja Rathinam

2 2

Akshay Tanna

2 1

Madhusudhana Reddy Ambavaram

2 2

The Company has adopted the development and implementation of risk management policy and analysis. The brief detail about this policy may be accessed on the Companys website at the weblink:

https://www.dodladairv.com/static/investors/code-of-policv/Risk-Management-Policv.pdf

The Brief description of the terms of reference of Audit Committee, Nomination, Remuneration and Compensation, Stakeholders relationship committee and Risk Management Committee is part of Corporate governance report forming part of this report

MEETING OF INDEPENDENT DIRECTORS

A separate meeting of the Independent Directors was held on 09 March 2023, inter-alia, to discuss evaluation of the performance of Non-Independent Directors, the Board as a whole, evaluation of the performance of the Chairman, taking into account the views of the Executive and Non- Executive Directors and the evaluation of the quality, content and timeliness of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

The Independent Directors expressed satisfaction with the overall performance of the Directors and the Board as a whole.

DIRECTORS AND OFFICERS INSURANCE (‘D&O)

As per the requirements of Regulation 25(10) of the SEBI Listing Regulations, the Company has taken Directors and Officers Insurance (D&O) for all its Directors and members of the Senior Management.

BOARD PROCESSES, PROCEDURES AND PRACTICES

The company believes that the effectiveness of the board is reinforced by its structures and the processes and procedures it follows. It has in place robust practices and processes that contribute to the effective and efficient performance of the board. Board systems and procedures broadly comprise convening the meetings, contents of the agenda, conducting the meetings, decision making at the meetings, adequacy of minutes and working of board committees.

Decisions relating to the policy and operations of the company are arrived at meetings of the board held periodically. Meetings of the board enable discussions on matters placed before them and facilitate decision making based on collective judgment of the board. The company follows the best practices in convening and conducting meetings of the board and its committees. These include:

Frequency of meetings

A minimum of four board meetings is held each year with the time gap between any two successive meetings not exceeding 120 days. Meetings of the committees are also planned and scheduled to be held along with the board meetings.

Board agenda

It strikes a fine balance between the reviews of the past performance and forward-looking issues. The agenda is structured such that routine and administrative matters do not consume too much board time. The agenda is made available to the directors along with supporting documents sufficiently in advance of the meetings.

Decision making process

The board follows a culture of openness and debate by facilitating effective contribution of all directors and ensuring constructive relations among the directors. Constructive discussions are facilitated leading to effective decision making. The chairman ensures that adequate time is available for discussion of all agenda items in particular strategic issues.

Availability of information to the board

The board should be supplied in a timely manner with information in a form and of a quality appropriate to enable it to discharge its duties. Under the advice and direction of the chairman, the company secretarys responsibility includes ensuring good information flows within the board as well as between senior management and non-executive directors.

The following information, inter alia, is provided to the directors of the company:

• Annual operating plans and budgets and any updates.

• Capital budgets and any updates.

• Quarterly results for the company

• Minutes of meetings of audit committee and other committees of the board

• General notices of interest received from directors.

• Show cause, demand, prosecution notices and penalty notices which are materially important.

• Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems

• Any material default in Financial obligations to and by the company

• Any issue, which involves possible public or product liability claims of substantial nature, including any judgment or order which, may have passed strictures on the conduct of the company.

• Non-compliance of any regulatory, statutory duty

• Legal compliance reports and details of payment of statutory dues

Role of the Chairman

The chairman is responsible for leadership of the board and ensuring its effectiveness on all aspects of its role. The role includes:

• Making certain that an effective decision-making process is in place in the board, and that the boards committees are properly structured with appropriate terms of reference

• Encouraging the active engagement of all board members in board and committee meetings, drawing fully on their skills, experience, knowledge and, where appropriate, independence;

• Building effective relationships founded on mutual respect and open communication - both inside and outside the boardroom - between the non-executive directors and executive team, in particular with regard to the identification and oversight of significant risks.

Role of Managing Director

The Managing Director (MD) lives and upholds the highest standards of integrity and probity inside and outside the boardroom, through setting clear expectations in terms of culture and values, as well as in terms of the style and tone of board discussions. The MD encourages directors to express their views frankly and challenge constructively in order to improve the standard of discussion in the boardroom. The MD appreciates that constructive challenge from non-executive directors is an essential aspect of good governance and encourage the nonexecutive colleagues to probe proposals, especially when issues of judgement are concerned. The role includes:

• Setting a board agenda which is primarily focused on business, strategy, accountability, competitive performance and value creation;

• ensuring that issues relevant to this objective are reserved for board consideration, including determining the nature and extent of the significant risks the board is willing to embrace in the implementation of its strategy;

• developing, in particular, a productive working relationship with the CEO, providing support and advice while respecting executive responsibility;

• consulting the senior independent director on board matters consistent with regulations;

• ensuring effective processes are established relating to succession planning and the composition of the board, having regard to the benefits of diversity;

Role of CEO

The CEO is vested with operational responsibility for delivering the companys strategy. The CEOs relationship with the chair and MD is the key dynamic that underpins the effectiveness of the board. The CEO, with the support of the executive team, has primary responsibility for communicating to the people working within the business the expectations of the board in relation to the companys culture, values and behaviours.

He has the most intimate knowledge of the company and its capabilities. This is evidenced when making proposals and exercising judgement, particularly on matters of strategy.

Role of CFO

The Chief Financial Officer (CFO) is a key position within the company and is responsible for overseeing Financial activities and providing strategic Financial guidance. The CFO is responsible for developing and executing the companys Financial strategy and analyzing data and market trends to make informed decisions that maximize profitability and shareholder value, Financial planning and analysis, producing accurate forecasts, and collaborating with other departments to achieve Financial goals. Additionally, the CFO plays a key role in risk management, identifying and mitigating Financial risks to ensure the stability and success of the business.

The CFO is also responsible for maintaining accurate and transparent Financial reporting and ensuring compliance with accounting standards and regulations. They control the companys capital structure by making financing and investment decisions in order to optimize capitalization and liquidity. The CFO also acts as a liaison between the company and external stakeholders, providing information on Financial performance and establishing Financial controls. Their knowledge and leadership skills contribute to the companys Financial health and success.

Role of Company Secretary in overall governance process

The company secretary has a key role to play in facilitating the effective functioning of the board through the timely presentation of board information which - by being accurate, clear and comprehensive - assists high-quality decision making.

Under the direction of the Chairman and MD, the company secretarys responsibilities include ensuring accurate information flows within the board and its committees, between senior management and non-executive directors, as well as facilitating induction and assisting with professional development. All directors have access to the advice and services of the company secretary who is responsible to the Board for ensuring that Board procedures are complied with. In addition, the Company Secretary discharges the functions prescribed under the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Besides, the company secretary acts as secretary of the Board and its committees thereof.

The Company Secretary ensures transparency of information among all the stakeholders, He also updates Board with regular updates on Various statues which has significant impact on the operations of the Company , Board and Committees.

Decision making at the Board.

Effective and good decision-making at the board is facilitated by:

• ensuring that directors are afforded adequate time to prepare for meetings;

• allowing time for debate and challenge, especially for complex, contentious or business-critical issues;

• achieving timely closure on decisions taken; and

• providing clarity for executives on the actions required.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance and that of its committees as well as performance of the Directors individually. Feedback was sought by way of a structured questionnaire covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution, and performance of specific duties, obligations and governance and the evaluation was carried out based on responses received from the Directors.

The evaluation is performed by the Board, Nomination, Remuneration and Compensation Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.

The Board and the Nomination, Remuneration and Compensation Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

At the board meeting that followed the meeting of the independent directors and meeting of Nomination, Remuneration and Compensation Committee, the performance of the Board, its committees, and individual directors was also discussed. Performance evaluation of independent directors was done by the entire Board, excluding the independent director being evaluated.

FAMILIARIZATION PROGRAMMES

The Members of the Board of the Company have been provided opportunities to familiarize themselves with the Company, its Management, and its operations. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its various operations, and the industry in which it operates.

All the Independent Directors of the Company are made aware of their roles and responsibilities at the time of their appointment through a formal letter of appointment, which also stipulates various terms and conditions of their engagement.

Key management personnel of the Company presents to the Board Members on a periodical basis, briefing them on the operations of the Company, plans, strategy, risks involved, new initiatives, etc., and seek their opinions and suggestions on the same. In addition, the Directors are briefed on their specific responsibilities and duties that may arise from time to time.

The Statutory Auditors and Internal Auditors of the Company presents to the Board of Directors on Financial Statements and Internal Controls including presentation on regulatory changes from time to time.

The detail policy on the familiarisation programme is available on the website at www.dodladairv.com

CODE OF CONDUCT

The Company has laid down a which has been effectively adopted by the Board Members and Senior Management Code of Conduct Personnel of the Company.

The detail policy on the Code of Conduct is available on the website at www.dodladairv.com

EMPLOYEES STOCK OPTION PLAN

During the year 2018-19, your Company adopted an Employees Stock Option Plan named as "Dodla Dairy Limited Employees Stock Option Plan 2018" ("ESOP Scheme").

The options to acquire shares by way of ESOP plan shall be granted to the eligible employees who are in the permanent employment of the Company working in India or outside including directors of the Company whether whole time or not (excluding independent directors).

As per the ESOP plan 2018 dated 23 March 2018 and as amended by 1st Amendment to ESOP 2018, the aggregate number of Options which may be issued by the Company under ESOP Plan is 13,91,800 options and as per the revised grant letter dated 19 July 2018 issued by the Company under ESOP Plan is 8,35,074 options each option shall entitle the option holder to One Equity Share in the Company.

During the year 2020-21 and until the date of this report, the Company approved vesting of KRA based, and time based Options of 8,35,074 to BVK Reddy, CEO of the Company.

As per Rule 12 of the "Companies (Share Capital and Debenture) Rules, 2014" and SEBI regulations the declaration is as follows:

Sl. No

Particulars

Details

a.

Options granted

8,35,074

b.

Options vested

8,35,074

c.

Options exercised

NIL

d.

The total number of shares arising as a result of exercise of option

NIL

e.

Options lapsed

NiL

f.

The exercise price

213.3929

g.

Variation of terms of options

NIL

h.

Money realized by exercise of options

NIL

i.

Employee wise details of options granted:

(i) Key Managerial Personnel:

Sr. no. Name of the employee

Employee code No. of options

1 Venkat Krishna Reddy Busireddy

0002 8,35,074

(ii) any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year - Nil

(iii) identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant - Nil

PARTICULARS OF LOANS, GUARANTEES, SECURITIES OR INVESTMENTS UNDER SECTION 186

Details of loans, guarantee and investments are given in Note no. 8, 9,15, 20 and 25 to the Financial Statements attached.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

ALL the Related party transactions that were entered into during the Financial year were on an arms length basis and were in the ordinary course of business. There are no materially significant Related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel, or other designated persons which may have a potential conflict with the interest of the Company at Large. All the Related party transactions are approved by the Audit Committee and Board of Directors.

The Company has adopted a PoLicy on Related Party Transactions for the purpose of identification and monitoring of such transactions.

The particulars of contracts or arrangements with Related parties referred to in sub section (1) of Section 188 entered by the Company during the Financial Year ended 31 March 20223 in prescribed Form AOC-2 is appended to this Report as Annexure - III.

The poLicy on Related Party Transactions as approved by the Board is upLoaded on the website of the Company and the web Link is https://www.dodladairv.com/static/investors/code-of-policv/Policv%20on%20Related%20Partv%20 Transactions.pdf

STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL

DiscLosures pertaining to remuneration and other detaiLs as required under Section 197(12) of the Act read with RuLe 5 of the Companies (Appointment and Remuneration of ManageriaL PersonneL) RuLes, 2014 are annexed to this Boards Report as Annexure - IV.

ANNUAL RETURN

In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at the web-link : https:// www.dodladairv.com/annual return

CORPORATE SOCIAL RESPONSIBILTY POLICY

The brief outline of the corporate social responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year is appended to this Report as Annexure - V in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

A detail policy is available on the website of the Company at the weblink: https://www.dodladairv.com/static/

investors/code-of-policv/CSR%20%20Policv.pdf

THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO PURSUANT TO THE PROVISIONS OF SECTION 134(3) (M) OF THE COMPANIES ACT, 2013 (ACT) READ WITH THE COMPANIES (ACCOUNTS) RULES, 2014

Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3) (m) of the Act read with Companies (Accounts) Rules, 2014 is appended to this Report as Annexure - VI.

DEPOSITS

The Company has not accepted any deposits from the public in terms of Chapter V of the Companies Act, 2013. Hence, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

MAINTENANCE OF COST RECORDS SPECIFIED BY THE CENTRAL GOVERNMENT UNDER SECTION 148 OF THE COMPANIES ACT, 2013

The provisions relating to maintenance of Cost Records as specified by the Central Government under Section 148 of the Companies Act, 2013 is not applicable to the Company.

DISCLOSURE ABOUT COST AUDIT

During the Financial year under review, your Company has not crossed the threshold limits prescribed for appointment of Cost Auditor as per provisions of Section 148 of the Companies Act, 2013 and rules made thereunder.

AUDITORS, AUDIT QUALIFICATIONS AND BOARDS EXPLANATIONS

Statutory Auditors

As per Section 139 of the Companies Act, 2013, read with your Companies (Audit and Auditors) Rules, 2014, the members of the Company in 27 Annual General Meeting of the Company (27 AGM) approved the appointment of M/s. S.R. Batliboi & Associates LLP, Chartered Accountants (ICAI Firm Registration No. 101049W/E300004) as the Statutory Auditors of the Company for a term of five consecutive years i.e. from the conclusion of 27 AGM till the conclusion of 32 AGM.

The Report given by M/s. S.R. Batliboi & Associates LLP on the Financial Statements of your Company for the Financial year 2023 is part of the Annual Report. The Notes on the Financial Statements referred to in the Auditors Report are self-explanatory and do not call for any comments. The Auditors Report does not contain any qualification, reservation, adverse remark or disclaimer. During the year, the Auditors had not reported any matter under Section 143 (12) of the Act, therefore, no detail is required to be disclosed under Section 134 (3) (ca) of the Act.

Secretarial Auditors Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of SEBI Listing Regulations, m/s. MNM & Associates, Practising Company Secretaries had been appointed as Secretarial Auditor, to undertake Secretarial Audit of the Company for the FY 2022-23. The report of the Secretarial Auditor in the prescribed Form MR-3 is annexed to this report as Annexure- VII.

Internal Auditors

The Board of Directors of the Company has appointed M/s. BDO India LLP as Internal Auditors to conduct Internal Audit of the Company for the Financial Year ended 31 March 2023.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Statutory Auditors, Internal Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Directors or Officers or Employees to the Audit Committee under section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.

VIGIL MECHANISM (WHISTLE BLOWER POLICY)

The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is implemented through the Companys Whistle Blower Policy.

The Company has adopted a Whistle Blower Policy establishing a formal vigil mechanism for the Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and provides direct access to the Chairperson of the Audit Committee in exceptional cases. It is affirmed that no personnel of the Company have been denied access to the Audit Committee. The policy of vigil mechanism is available on the Companys website.

The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. All employees of the Company are covered under the Whistle Blower Policy.

The brief detail about this mechanism may be accessed on the Companys website at the weblink: https://www. dodladairv.com/static/investors/code-of-policv/Risk-Management-Policv.pdf

PREVENTION OF SEXUAL HARASSMENT

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has not received any complaints during the year.

The Company regularly conducts awareness programs for its employees.

The following is a summary of sexual harassment complaints received and disposed off during the year:

S. No.

Particulars

Status of the No. of complaints received and disposed off

1

Number of complaints on Sexual harassment received

Nil

2

Number of Complaints disposed off during the year

Not Applicable

3

Number of cases pending for more than ninety days

Not Applicable

4

Number of workshops or awareness programme against sexual harassment carried out

The Company regularly conducts necessary awareness programs for its employees.

5

Nature of action taken by the employer or district officer

Not Applicable

Constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has constituted an Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has not received any complaints during the year.

NOMINATION, REMUNERATION AND COMPENSATION POLICY

In pursuance of the Companys policy to consider human resources as its invaluable assets, to pay equitable remuneration to all Directors, Key Managerial Personnel (KMP) and Employees of the Company, to harmonize the aspirations of human resources consistent with the goals of the Company and in terms of the provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015 as amended from time to time, the policy on nomination and remuneration of Directors, Key Managerial Personnel and Senior Management has been formulated.

The said policy of the Company is available on the Companys website at: https://www.dodladairv.com/static/investors/ code-of-policy/N-R-Committee-Charter.pdf

STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is part of this Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India.

PREVENTION OF INSIDER TRADING CODE

As per SEBI (Prohibition of Insider Trading) Regulation, 2015, the Company has adopted a Code of Conduct for Prevention of Insider Trading. The Company has appointed Surya Prakash M , Company Secretary as Compliance Officer from 22 October 2021, who is responsible for setting forth procedures and implementing of the code for trading in Companys securities. During the year under review, there has been due compliance with the said code.

MANAGEMENT DISCUSSION AND ANALYSIS

In terms of the provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 as amended from time to time, the Managements Discussion and Analysis as Annexure - VIII.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Business Responsibility and Sustainability Report (BRSR) of your Company for the year ended 31 March 2023 forms part of this Annual Report as required under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as Annexure - IX.

CORPORATE GOVERNANCE

The Company has a rich legacy of ethical governance practices and committed to implement sound corporate governance practices with a view to bring about transparency in its operations and maximize shareholder value.

A Report on Corporate Governance along with a Certificate from the Secretarial Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report as Annexure - X.

THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

There have been no significant material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

During the year under review, no application was made or any proceedings pending against the Company under the Insolvency and Bankruptcy Code, 2016.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the Financial position of the Company which occurred between the Financial Year ended 31 March 2023 to which the Financial Statements relates and the date of signing of this report.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has laid down internal Financial controls, through a combination of Entity level controls, Process level controls and IT General controls inter-alia to ensure orderly and efficient conduct of business, including adherence to the Companys policies and procedures, accuracy and completeness of accounting records and timely preparation and reporting of reliable Financial statements/ information, safeguarding of assets, prevention and detection of frauds and errors. The evaluations of these internal Financial controls were done through the internal audit process and were also reviewed by the Statutory Auditors. Based on their view of these reported evaluations, the directors confirm that, for the preparation of Financial statements for the Financial year ended 31 March 2023, the applicable Accounting Standards have been followed and the internal Financial controls are generally found to be adequate and were operating effectively & that no significant deficiencies were noticed.

INTERNAL AUDIT & CONTROL SYSTEMS

Your Company has a well-defined and documented internal control system, which is adequately monitored. Checks & balances and control systems have been established to ensure that assets are safe guarded, utilized with proper authorization and recorded in the books of account. The Internal control systems are improved and modified continuously to meet the changes in business conditions, statutory and accounting requirements.

These are supplemented by internal audit of your Company carried out by reputed firms of Chartered Accountants across India. Your Company has an Audit Committee consisting of Four Directors in which one is Executive and three are Non-executive independent Directors. The Audit Committee of the Board of Directors are periodically apprised of the internal audit findings and corrective actions taken. The Audit Committee of the Board of Directors reviews the adequacy and effectiveness of internal control system and suggests improvements if any for strengthening them. Your Company has a robust Management Information System which is an integral part of the control mechanism.

INSURANCE

ALL properties and insurable interests of the Company have been fully insured.

CREDIT RATING

Given below are the ratings given to the Company by ICRA Limited during the Financial Year ended 31 March 2023:

Facilities

Rating

Long Term Scale on Bank limits

[ICRA]AA- (Stable)

Short-Term Scale on Bank limits

[ICRA]A1 +

Cash Credit / Short term Loan on Bank limits

[ICRA]AA- (Stable) / [ICRA]A1 +

Instrument Rated (NCD)

[ICRA]AA- (Stable) Withdrawn

QUALITY

The company has established stringent quality control measures right from the milk collection level at a village to the consumers at the urban level, which include screening for various adulterants such as sugar, salt, urea, vegetable oil, detergents, maltodextrin etc. More than 95% of raw milk is being procured directly from the farmers. Recently, we have started checking Standard Plate Count (SPC) across all our Chilling Centers and Plants, which contributed for improvement in quality of raw milk. All our plants are certified with either FSSC 22000 V5.1 or ISO 22000:2018. We have deployed advanced FT machines at our major processing plants to check quality of incoming raw milk and finished products. We are continuously driving awareness programs on clean milk production to our farmers and vendors. We use the most advanced technologies for maintaining highest standards of quality. Since inception, Quality has been our top priority and we are committed to it.

BRANDING

As Dodla celebrates 25 years of successfully serving its consumers, we remain committed to delivering best quality milk and milk products packed with highest standards of hygiene at our state-of-the-art plants. At the same time, Dodla has undertaken a 360-degree approach to build brand equity by reaching out to consumers through different media like TV, Print, Digital, out-of-home. Dodla is also dialling up its presence in new age channels like E-Commerce to build salience with millennials. Dodla aims to become the most preferred dairy brand through continuous consumer engagement.

AWARDS AND RECOGNITIONS

During the Financial year 2022-23 the Company has received the following awards:

"CII award for food safety 2022 - Commendation Certificate for Significant Achievement in Food Safety" award from CIIs Food and Agriculture Centre of Excellence (FACE) in "Dairy Products Large Business" for two of our units i.e. Gundrampally and Chendurthi. "National Safety Council of India Safety Awards - 2022" in manufacturing sector awarded to Dodla Dairy Limited, Nellore Plant, Andhra Pradesh.

INITIATIVES FOR STAKEHOLDER AND CUSTOMER RELATIONSHIP

The Company has an effective Investor Relations Program ("IR") through which the Company continuously interacts with the investor community across various channels (Periodic Earnings Calls, Individual Meetings, Participation in One-on- One interactions and group meetings). The Company ensures that critical information about the Company is available to all the investors by submitting all such information to the Stock Exchanges and also uploading the information on the Companys website under the Investors Corner.

The Company strives to adopt emerging best practices in IR and building a relationship of mutual understanding with investors and analysts.

We place our customers at the centre of everything we do, aiming to provide food products effortlessly through world class process and systems. Development of robust customer relationship management is the top priority of the Organisation. Dodla has, therefore, taken great care in recognising the processes and frameworks that require attention to stringent checks and process for all its dairy products. It requires us to spend significant management time but at the same time, leads to better business and a better brand.

Customer satisfaction is the most important measure of success in our industry. All the effort we put in everyday gets translated into our high Customer retention and repeat customer volume. We reach out our customers to get their feedback about our products. In addition, we seek inputs on their future roadmap and priorities. This helps us measure the health of our relationships with our customers and what we can do to add value.

ENVIRONMENT, HEALTH AND SAFETY

The Company is committed to provide a safe and healthy work environment for the well-being of all our Stakeholders. We regularly provide our employees with required EHS Related training programmes enabling them to avoid accidents at all levels of workplace. We have created a safe and healthy environment by installing safety guards for all the machinery with regular maintenance. We consistently monitor our Environment, Safety & Health activities and continue to implement the risk reduction programmes that are aimed at reducing hazards at workplace by infusing latest technology and sustainable planning. Over the decade the company has adopted recycling of water, rain harvesting, solar panel installation and this has been continuous process at all our plants. We are conducting annual medical camps for all employees and workers across all locations. The company has no manual involvement from source to final product i.e., this makes all the employees and workers safe at awork place. We are providing personal accident insurance to milk collection agents. We are also using electric vehicles for milk procurement and distribution of milk products at few locations currently.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Company believes that providing a congenial environment is a critical success factor for the organization growth and sustenance. The Company has taken all necessary steps through various policies and procedures to ensure good, safe and healthy environment across all locations. Also, Human resource development has been taken up as prime agenda and number of leadership development initiatives have been rolled out during the FY 2022-23 to ensure the people preparedness to handle the future growth. Many of the HR activities has been digitalized to enable employees to get all services on their fingertips. We have conducted many employee engagement programs/ activities, which improved the cross functional teamwork at all locations and among the departments. We have upgraded our PMS evaluation process and created methodical approach for clear cut identification of each employee contribution during the entire year through automation. This has enabled us to identify the potential people on whom the organization should invest time and energy while ensuring their growth path in the organization.

With regard to industrial relations, we have initiated a grievance redressal mechanism policy at all locations by installing grievance boxes at all plants, ccs and sales offices and encouraging all the employees and workers to raise their concerns/ challenges/ issues in writing. We have constituted grievance redressal committee at all locations to address and resolve the issues/ concerns raised. We have Safety Committee, Canteen Committee and Emergency Response Team at all plants constituting equal number of members from employees and workers.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to express their sincere gratitude to the Government of India, Government of Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, Maharashtra and other States, Registrar of Companies - Telangana, farmers, Distributors, lenders including bankers and most importantly consumers for support, your Company has been privileged to receive.

Your directors thank the shareholders for the confidence reposed in the Company and for their continued support and co-operation. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

On behalf of the Board of Directors

For Dodla Dairy Limited

Dodla Sunil Reddy

Dodla Sesha Reddy

Place: Hyderabad

Managing Director

Director

Date: 20 May 2023

DIN:00794889

DIN:00520448

Note: Except as otherwise stated, all the numbers in the Directors Report are on standalone basis