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Hatsun Agro Product Ltd Management Discussions

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Aug 6, 2025|12:00:00 AM

Hatsun Agro Product Ltd Share Price Management Discussions

OVERVIEW

Hatsun Agro Product Limited ("HAP" or "the Company"), the largest Private Sector Dairy, in India is in the business of manufacturing and marketing Dairy Products especially Milk and Milk products such as Curd, Ghee, Paneer, SMP etc., Ice Creams and also Cattle Feeds.

HAP is a Listed Company, listed its Equity Shares on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited and having its Registered Office in Chennai, Tamil Nadu, India.

The Financial Statements of the Company are prepared as per the Ind AS (Indian Accounting Standards), the provisions of the Companies Act, 2013 and the guidelines issued by the Securities and Exchange Board of India (SEBI).

GENERAL ECONOMIC SCENARIO & INDUSTRY STRUCTURE

The global economy exhibited steady yet uneven growth across regions in 2024. A notable trend was the slowdown in global manufacturing, especially in Europe and parts of Asia, due to supply chain disruptions and weak external demand. In contrast, the services sector performed better, supporting growth in many economies. Inflationary pressures eased in most economies. However, services inflation has remained persistent. Although commodity prices have stabilised, the risk of synchronised price increase persists. With growth varying across economies and last-mile disinflation proving sticky, central banks may chart varying paths of monetary easing. This will lead to uncertainty over future policy rates and inflation trajectories. This apart, geopolitical tensions, ongoing conflicts, and trade policy risks continue to pose significant challenges to global economic stability. In this global context, India displayed steady economic growth. As per the first advance estimates of national accounts, Indias real GDP is estimated to grow by 6.4 per cent in FY25. Growth in the first half of FY25 was supported by agriculture and services, with rural demand improving on the back of record Kharif production and favourable agricultural conditions. The manufacturing sector faced pressures due to weak global demand and domestic seasonal conditions. Private consumption remained stable, reflecting steady domestic demand. Fiscal discipline and strong external balance supported by a services trade surplus and healthy remittance growth contributed to macroeconomic stability. Together, these factors provided a solid foundation for sustained growth amid external uncertainties.

The growth of dairy industry in India is underpinned by a variety of factors. The industry significantly supports the rural economy of the country. Increasing population and a growing middle class are among the most important aspects, which ultimately increase demand for milk, curd, and other dairy products. A strong rural backbone of millions of small-scale dairy farmers back production and supply chain. The government induces dairy development with incentives and also provides subsidy for dairy farming. New technologies, such as modern dairy farming, automatic milking systems etc., improve efficiency and quality of production. Organised retailing and e-commerce platforms have improved the availability of dairy products. Furthermore, health-conscious consumers are propelling the demand for specialised dairy products like low-fat or organic milk.

Another significant pillar of strength for the Indian dairy industry is its robust production of milk. India has the distinction of being the largest milk producing country in the world. Furthermore, increasing focus on enhancing genetic quality of animals, along with better veterinary care, is improving quantity and quality of milk production. Increased per capita income and changing lifestyles influence the consumer preferences and have created a trend towards packaged, branded and convenience products. Its continuous expansion further derives from diversifications in the industry into niche segments such as flavored milk, cheese and ready-to-drink beverages. With increasing urbanisation and consumer preference turning towards healthier and higher-protein foods, the dairy sector is ready to grow further, benefiting both the economy and nutritional health of the populace.

Dairy industry in India - a Snapshot:

Dairy is a significant part of the human diet across the world. It offers an abundance of nutrients in the form of calcium, minerals, and proteins. Indias journey to the summit of the dairy market started in 1970 under the guidance of Dr. Verghese Kurien. ‘Operation Flood - a massive dairy development program, marked the beginning of Indias transformation from a milk deficient nation to its largest producer. Home to over 61 million milk cows, India produced more than 239 million metric tons of milk in the fiscal year 2024. Unsurprisingly, the country reared nearly thrice the number of milk cows than in the entire European

Union that year. Despite being an important contributor to the countrys economy, the Indian dairy industry is highly unorganised, fragmented, and lacks technological advancements. The unorganised sector consisted of traditional milkmen who sold raw or unprocessed milk to their customers and other vendors. The organised sector, on the other hand, consisted of various private cooperatives and other corporates.

Growing appetite for dairy products

Dairy products are the chief sources of protein for millions of lacto-vegetarians in the country. An even larger part of the population who cannot afford meat rely heavily on dairy for their dietary protein demand. The overall domestic consumption of milk was over 210 million metric tons in

2024. In addition, the daily consumption of milk was equal among men and women. India offers a variety of dairy-based cuisines that are unique to its diverse culture. Paneer, a soft and non-melting kind of cottage cheese, is very popular in the North and used in several dishes. Milk and curd are also indispensable to the many popular Indian beverages, including tea, coffee, and lassi. The Indian dairy market continues to be a vital economic sector that provides livelihood to a million people and contributes substantially to the countrys GDP. The market is poised for considerable growth with continued modernisation and expansion initiatives.

Ice Cream Market- India

The Indian ice cream market has grown four-fold in the last decade and is expected to reach 45,000 Crores in the next three years, according to data from the Indian Ice Cream Manufacturing Association ("IICMA"). Though seasonal in nature, it has witnessed huge growth helped by tailwinds such as rise in disposable incomes, changing consumer preferences, and expanding distribution channels. India has seen a fourfold increase in ice cream consumption over the past ten years. In fact, this sector is projected to reach 45,000 Crores in the next 3 years and more than 90,000 Crores in the next 8 years, said the IICMA statement. Moreover, factors such as stability of prices for essential ingredients, such as milk solids and packaging materials, have enabled the ice cream manufacturers to maintain competitive pricing and enhance profitability. Consumers are increasingly attracted to premium, health-oriented, and innovative flavours, leading brands to launch plant-based, low-sugar, and high-protein ice creams, the association said. Besides, the government is offering incentives on investments in the food processing sector. This strategic approach positions India as an attractive destination for both domestic and international investors looking to capitalise on the growing ice cream market. Rising disposable incomes, urbanisation, and evolving consumer preferences are fuelling demand, especially in tier-1 and tier-2 cities.

Ice Cream Market Key Drivers and Trends:

Rising Disposable Incomes:

As Indians income levels increase, they are spending more on discretionary items like ice cream, contributing to market growth.

Preference for Premium and Indulgent Ice Creams:

Consumers are increasingly seeking out high-quality, unique, and innovative flavors, driving demand for premium ice cream brands.

Expansion of Modern Retail:

The growth of supermarkets, hypermarkets and convenience stores provides wider access to a diverse range of ice cream products, further boosting sales.

Heat Waves and Long Summers:

Indias tropical climate, with long summers and heat waves, leads to increased ice cream consumption as people seek relief from the heat.

Innovative Products and Brands:

Leading ice cream brands are launching new and unique products to cater to evolving consumer preferences and drive market growth.

Health and Wellness Trends:

The increasing demand for organic and vegan products, along with the launch of health-conscious ice cream options, is another factor contributing to market growth.

Highlights of Union Budget 2025-26

Highlights of the Union Budget 2025-26 presented on 01st February, 2025 by the Honourable Finance Minister Mrs. Nirmala Sitaraman are as follows:

In 2025-26, the Department of Animal Husbandry and Dairying, Government of India has been allocated

4,840.40 Crores.

The scheme that received the major budgetary support of 1,980 Crores is the Livestock Health and Disease Control Programme followed by 1,000 Crores for Dairy Development and 800 Crores for National Livestock

Mission. The other major schemes/projects that received major allocation are the Infrastructure Development Fund ( 460 Crores), Livestock Census and Integrated Sample Survey ( 250 Crores) followed by that is Animal Health Institute ( 100 Crores).

Under the Atma Nirbhar Bharat Abhiyan stimulus package, the Animal Husbandry Infrastructure Development Fund (AHIDF) was merged with the Dairy Processing & Infrastructure Development Fund (DIDF) for incentivising investments by individual entrepreneurs, private companies, MSME, Farmers Producers Organisations (FPOs), Section 8 companies and Dairy Cooperatives to establish: (i) Dairy processing and value addition infrastructure, (ii) Meat processing and value addition infrastructure (iii) Animal Feed Plant (iv) Breed improvement technology etc.

The budget provision is also for supporting the working capital requirement of the State Co-operative Dairy Federation (erstwhile Support to State Co-operative Dairy Federations)

Enhanced Credit through KCC: KCC facility is available to the AH & Dairy farmers to meet the short-term credit requirements of rearing animals and birds. The working capital components in Animal Husbandry, as per the scale of finance the recurring cost towards feeding, veterinary aid, insurance of milch animals, labour, water and electricity supply are covered in AH-KCC. The Government of India has extended the benefit of KCC to Animal Husbandry and Dairy Farmers during 2019. As of 15.11.2024, more than 41.66 lakhs fresh KCCs were sanctioned for AHD Farmers. The loan limit under the Modified Interest Subvention Scheme has been enhanced from 3 lakhs to 5 lakhs for loans taken through the KCC in this budget.

The Union Cabinet approved the Revised National Program for Dairy Development (NPDD) with an additional budget of 1,000 Crores with the key objective of improved milk procurement, processing capacity, and quality control, Enhanced market access for farmers and better pricing through value addition and strengthening of the dairy supply chain to increase rural income and development.

The Union Cabinet has also approved the Revised Rashtriya Gokul Mission (RGM) to boost the livestock sector, with an additional outlay of 1,000 Crores.

The Union Budget 2025-26 has emphasized agriculture as the foremost engine of Indias development.

On January 1, 2025, the Union Cabinet approved continuation of the Pradhan Mantri Fasal Bima Yojana and Restructured Weather Based Crop Insurance Scheme till 2025-26.

On January 1, 2025, the Union Cabinet approved the extension of One-time Special Package on Di-Ammonium Phosphate (DAP) for the period from 01.01.2025 till further orders.

The Union Cabinet, on November 25, 2024, approved the launching of the National Mission on Natural Farming (NMNF) with a total outlay of 2,481 Crores.

On October 3, 2024, the Union Cabinet approved the rationalisation ation of all Centrally Sponsored Schemes (CSS) operating under Ministry of Agriculture and Farmers into two-umbrella Schemes viz. Pradhan Mantri Rashtriya Krishi Vikas Yojana (PM-RKVY), and Krishonnati Yojana (KY).

BUSINESS-WISE PERFORMANCE OF THE COMPANY

Milk Procurement and Cattle Care

During the year, Hatsun Agro procured the milk daily from over 5,00,000 farmers across various villages, covering most of the southern states of India and Maharashtra. Active Bulk Coolers (ABCs) have been installed at more than 1,450 locations to ensure freshness and quality, and the milk is tested for Fat and SNF levels. Payments are made directly to farmers bank accounts every 10 days through a dedicated database. The company recorded significant growth in milk procurement in FY25 compared to FY24, supported by strategically located processing and packaging plants in Tamil Nadu, Pondicherry, Andhra Pradesh, Telangana, Karnataka, Maharashtra, and Odisha.

Hatsun Agros cattle monitoring team continued its commitment to helping dairy farmers enhance milk production efficiency and prevent cattle ailments. The company offers an AI-powered service and a comprehensive cattle management system to help farmers improve productivity. Under the SANTOSA brand, Hatsun Agro provided a range of cattle feed and supplements to improve milk yield and quality, ensuring cattle health.

Strategic Acquisition – Milky Moo (Odisha)

Hatsun Agro successfully acquired Milky Moo, a well- established dairy brand, for strengthening its presence in the eastern markets as part of its growth and expansion strategy by way of acquiring the entire Shareholding in the Company Milk Mantra Dairy Private Limited (owning the brand "Milky Moo") at a price of 233 Crores. This acquisition aligns with the companys vision to broaden its footprint across India, enhancing its procurement and distribution capabilities in key regions. Integrating Milky Moos processing facilities, farmer network, and product portfolio will enable Hatsun Agro to serve a broader customer base while reinforcing its commitment to quality, freshness, and innovation in the dairy sector.

Furthermore, the acquisition gives Hatsun Agro a stronger foothold in value-added dairy products, such as curd, paneer, buttermilk, and yoghurt-based items, which have seen rising consumer demand. The Company is focused on seamless integration and operational synergies to maximise the benefits of this strategic move.

Distribution Network

HAP daily Fresh distributes milk, milk products, juice, and cocoa-based confectionery under the brands Arokya, Hatsun, Imiyo, and Hanobar. These products are available in over 3,206+ stores across Tamil Nadu, Pondicherry, Andhra Pradesh, Telangana, Karnataka, Maharashtra, and Goa. The product range included curd, ghee, cooking butter, table butter, lassi, buttermilk, paneer, yoghurt shakes, cheese spread, juice, and cocoa-based confectionery.

HAP daily I Plus distributes Arun Ice Creams and Hatsun dairy products through more than 794+ stores, including HAP ice cream cakes and kulfis.

The company expanded its reach through 4,000+ HAP Daily outlets, which have traditionally been strong in Tamil Nadu, Pondicherry, Karnataka, Andhra Pradesh, and Telangana. The expansion has been undertaken in states and districts and across Maharashtra, Kerala, Odisha, Goa, Chhattisgarh, Madhya Pradesh, West Bengal, Jharkhand, Gujarat, Bihar, and Andaman & Nicobar Islands. ibaco – Premium Ice Cream Outlet ibaco operates over 219 premium outlets, offering a wide range of popular ice cream flavours and exciting new products developed based on positive customer feedback.

Exports – Arun Ice Creams

Arun Ice Creams witnessed strong growth in existing global markets, with increasing consumer preference for its products. The brand took steps to expand its global distribution and explore new markets such as Singapore, Seychelles, Brunei, Maldives, Mauritius, UAE – Ajman, etc.,.

New Product Development

In FY24-25, Hatsun Agro introduced a variety of new products, including ice creams - the slice it range, kulfi flavours, toppings and fermented dairy products such as yoghurt and dairy-based spreads. The company plans to expand its product portfolio further in FY25 -26.

Infrastructure

Hatsun Agro invested significantly in developing advanced infrastructure to support producing high-quality products. The company established cold storage facilities in multiple states to maintain product freshness. Hatsun Agro continues to expand its production capacity to meet the growing consumer demand.

FINANCIAL PERFORMANCE

The financial performance is covered in the Directors Report and can be referred to in the said Report.

DETAILS OF SIGNIFICANT CHANGES (i.e., CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS WITH EXPLANATION:

(i) Debtors Turnover Ratio - This stands at 307.79 compared to the previous years 794.27. There is a change to the extent of 61.25 percent. The main reason for the significant change is on account of increase in closing balance of Debtors.

(ii) Inventory Turnover Ratio - This stands at 7.11 compared to previous years 7.88. There is a change to the extent of 9.80 percent, which is not significant.

(iii) Interest Coverage Ratio - This stands at 1.07 compared to previous years figure of 1.45. The change is (25.97) percent. There is decrease in debt service coverage ratio is due to increased loan repayments (iv) Current Ratio - This stands at 0.64 compared to previous years figure of 0.86. The change is 26.06 Percent. The reason for change is mainly on account of decrease in inventory.

(v) Total Debt to Equity Ratio - This stands at 1.22 compared to previous years figure of 1.44. The change is 15.84 percent, which is not significant.

(vi) Operating Profit Margin (%) - This stands at 4.44 compared to previous years figure of 4.48. The change is 0.04 Percent, which is not significant.

(vii) Net Profit Margin (%) - This stands at 3.29 compared to previous years figure of 3.34. The change is 1.54 percent, which is not significant.

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF.-

During the financial year under review, the Companys paid up Equity Share Capital did not undergo a change. The Paid Up Equity Share Capital stood at 22,27,48,268. The Companys Operations resulted in transfer of Surplus to Reserves which has resulted in increase in the Networth of the Company.

OPPORTUNITIES

Some of the factors that contribute to the growth of the Industry are as follows:

Significant Milk Production Across India Drives the Growth of the India Dairy Market

The dairy industry has been recognised as one of the dynamic sectors in the Indian agricultural industry and has witnessed phenomenal growth in its production and consumption in the last 15 years. The evolution of the dairy sector in India and the remarkable role played by the cooperatives and private dairies further make India the largest milk producer by contributing 23% of global milk production. Furthermore, recent growth in milk production is the changing composition of Indias uniquely structured dairy herd. According to the data from the USDAs report on India Dairy and Products Annual 2021, around half of Indias milk production is from water buffalo, and the other half is from cattle, including indigenous breeds and crossbred animals. Therefore, the huge availability of milk in the country boosts the production of value-added or processed products such as cheese, butter, curd, yogurt, ghee, and paneer. In addition, milk has strong demand in Indian households considering it wholesome food and drives the market growth.

Supportive Government Schemes to Contribute to the Stellar Growth of the Market

Dairy farming is one of the utmost components of agricultural activities in almost every part of the world, including India. The dairy industry in India serves as a tool for socioeconomic development. Thus, the Government of India is extensively working towards maintaining the standards of the industry by introducing different schemes/initiatives across the India market.

The schemes include National Action Plan for Dairy Development (NAPD), National Programme for Dairy Development (NPDD), Interest Subvention on Working Capital Loans for Dairy Sector, Nationwide Artificial Insemination Programme (NAIP), and the National Animal Disease Control Programme. These government schemes have different aims; for example, the NAPD Indian scheme was aimed to increase the national milk production from 254.55 MMT by 2021-22 to 300 MMT by 2023-24.

On the other hand, the NPDD scheme was restructured in July 2021 and focused on strengthening the infrastructure for milk quality testing and primary chilling facilities. The NAIP programme aimed to increase milk production by giving birth to genetically superior male or female bovine breeds. Hence, such new plans further help dairy farmers, cooperatives, and private processors boost milk production. The factors discussed above, throw ample opportunities for the entrepreneurs in the Dairy Industry to scale up their existing capacities to increase their business volumes and offer opportunities to the new entrants in the Dairy business. Also, the above positive factors attract foreign investment in a large scale which benefit the Industry as a whole and the Government in particular. Employment opportunities do expand that too both in Urban and Rural Areas and the economic activity thrives in all the geographical areas and contribute to the overall economic development of the Country and the well being of People and the Cattle at large.

Consumers Rising Health Awareness Related to Milk Boosts the Product Demand

Based on type, the market is segmented into milk, cheese, butter, dairy desserts, milk powder, curd & yogurt, cream, and others. The milk segment holds the highest revenue as it is recognised as an essential component of the diet of billions of people worldwide as it provides important macro and micronutrients. Moreover, with the rising popularity of natural and farm-sourced milk and the growing awareness regarding its health benefits, milk consumption is likely to increase at a higher pace in India. In addition, apart from being consumed normally, milk is the basis for many sweet and savory food preparations such as ice cream, puddings, cheese, cream soups, and milkshakes. Thus, due to the popularity of dairy in India, there have been constant efforts taken by dairy entrepreneurs/startups to develop attractive and indulgent flavors to entice consumers.

Furthermore, several uses of ghee in preparing multiple dishes are considered nutritionally more beneficial than other oils/fats, thus immensely contributing to driving its demand in recent years. Likewise, paneer has also emerged as one of the most popular dairy products in the Indian sub-continent as it contains high amount of protein. Hence, the demand for ghee also increases in the forecast period.

By Distribution Channel Analysis

Online Retail Channels to Witness Strong Growth due to Increasing Preference

Based on distribution channel, the market is segmented into supermarkets/hypermarkets, specialty retailers, online retail stores, and others. Out of all the categories, the others segment, which includes local milk vendors and convenience stores, dominate the market. The increasing number of convenience stores across the country and easy accessibility of dairy products, such as milk, curd, and paneer, at such stores significantly contribute to the segmental growth. Moreover, many consumers prefer milk vendors in India as they provide fresh and raw milk, further promoting the market growth. Factors such as easy affordability and increased profit margins for small-scale vendors are likely responsible for triggering market growth in the coming years.

Furthermore, specialty retailers are also growing swiftly in developing and developed countries, including India. Advantages such as product expertise, unparalleled customer experience, and a wide variety of higher-quality products help promote segmental growth. These stores are specialised in selling a particular product of various brands and would not offer any other product apart from the specific range. Such factors help generate huge profit income and improve sales of dairy and dairy-based products.

Projected Key Trends for 2025 Continued Market Growth:

The Indian dairy market is projected to experience significant growth, driven by factors like increasing disposable incomes and a growing middle class, leading to higher demand for milk and dairy products. The market is expected to reach 57,001.81 Billion by 2033, with a CAGR of 12.35% between

2025 and 2033. This growth is also supported by the industrys strong rural backbone, with millions of small-scale dairy farmers contributing to production and supply chains.

Technological Advancements:

The industry is embracing technological advancements across various areas, including farm management, milk processing, packaging, and supply chain logistics. Automation and digitisation are helping to boost efficiency, enhance product quality, and ensure safety. Cold chain technologies are ensuring that dairy products remain fresh and nutritionally intact during transportation and storage.

Changing Distribution Channels:

A significant trend is the evolution of distribution channels, particularly with the emergence of Business-to-Consumer

(B2C) startups. E-commerce platforms are expanding, providing consumers with easy access to a wide range of dairy products through online channels, further disrupting traditional distribution methods.

Focus on Value-Added Products:

Theres a growing focus on value-added dairy products like cheese, yogurt, flavored milk, and probiotic drinks, which offer higher profit margins and align with changing consumer preferences. Companies are innovating to create new and exciting products, such as camel milk ice cream, to cater to diverse consumer preferences.

Health and Wellness Trends:

Health and wellness are becoming increasingly important for consumers, leading to demand for functional dairy products like protein-enriched milk, lactose-free milk, and probiotic yogurt. Consumers are also seeking clean-label products that are free from artificial additives and preservatives.

Growth of Organic Dairy Products:

The preference for natural and chemical-free food items is driving the demand for organic dairy products like milk, curd, and ghee. Consumers are increasingly prioritising environmental sustainability and health, which is boosting the demand for organic dairy options.

During the financial year 2024 - 25, your Company implemented the required strategies to sustain the profitability by expanding geographical area of its presence, adopting new technologies, online marketing by launching "Daily Moo" App, capital investments, etc., Hatsun Agro remains dedicated to providing quality dairy products to consumers while ensuring fair practices for farmers. The Company expresses gratitude to its stakeholders for their continued support and looks forward to a future of sustained growth and success.

Your Company has the excellent work force to achieve its goals, implement strategies and thus constantly improve its performance and rewarding all its stakeholders. The existing Human Resource is proving to be opportunity to unearth the potential of the Company, achieve the targets/milestones and mitigate the risks due to the unforeseen external negativities like fluctuating weather conditions, competitions, etc.

THREATS Low Productivity:

Limited access to quality feed and fodder, traditional feeding practices, and inadequate veterinary care contribute to low milk yield per animal. Lack of effective breeding programs and poor herd management further exacerbate the issue. Seasonal variations in rainfall and rising temperatures can significantly reduce milk production.

Quality Issues:

Poor hygiene standards during milking and milk handling lead to high microbial counts and spoilage. Adulteration and the use of contaminants like pesticides, heavy metals, and veterinary drugs pose significant risks to public health.

Market Challenges:

Fluctuating market prices and the lack of a minimum support price (MSP) can make dairy farming less viable, particularly for small farmers. The entry of global dairy giants with aggressive pricing strategies and access to economies of scale can pose a threat to local dairy producers. Potential trade deals with countries like the EU could restrict Indias ability to control dairy exports and protect its domestic market.

Climate Change Impacts:

Rising temperatures and erratic rainfall patterns can disrupt fodder production, increase feed costs, and reduce milk yield.

Infrastructure and Logistics:

Inadequate infrastructure, including cold storage facilities and transportation networks, can lead to milk spoilage and inefficient distribution. Lack of access to technology and information can hinder the adoption of efficient dairy farming practices.

Disease Outbreaks:

Outbreaks of diseases like Lumpy Skin Disease can cause significant losses to the dairy sector and impact cattle population.

Consumer Behavior:

A segment of the population may not prioritise milk quality, leading to a lack of willingness to pay for higher-quality products.

Your Company has been leveraging on the improvement given its economies of scale and with its inherent ability to adopt new technologies, which involves large investment in the production and distribution infrastructure affordable only by bigger companies like us.

Your Company enters new markets by expanding geographical areas, launching new product range, adopting new technologies, alternative market channel like online marketing. Your Company focuses on the consistent availability and procurement of quality milk throughout the year by improving the per capital yield of animals by applying scientific methods, genetic improvement, scientific feeding, properly managed animal husbandry practices etc., Your Company constantly educates the farmers on how to maintain quality and improve milk yield by arranging supply of good quality feeds to farmers.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The CEO and CFO certification provided in the CEO and CFO certification section of the Annual Report discusses the adequacy of our internal control systems and procedures.

INFORMATION TECHNOLOGY

Successful implementation of SAP ERP facilitates an effective online MIS system, which helps in centralised control of operations at all the units of the Company. Your Company constantly upgrades and reconfigures this application to effectively monitor the increasing scale of operations of the Company. The hardware and network infrastructure are being constantly reviewed to increase the bandwidth and reduce operational costs. This is an ongoing process and your Company is committed to leverage the benefits of IT to enhance and optimise benefits to itself and its customers. Constant training and guidance has been provided to all the end users.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES /INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

Your Company values its human resource as the most significant asset and the key focus is to attract, retain and develop talent as a resource. Your Company provides a congenial working atmosphere which will foster creative thinking. As part of manpower development and to enhance operational efficiency, training programmes have been organised for employees at all levels, wherever necessary. The HR programmes of the Company focus on building capabilities and engaging employees through various initiatives to help the organisation consolidate and achieve sustainable future growth for the business. Industrial Relations remained cordial at all the manufacturing locations of the Company during the year.

Effective employee communication through various channels ensured that all the employees are kept abreast of the current business situation. This has helped your Company to build mutual trust and confidence with the employees. The total strength of the Company as on 31st March, 2025 was 5,313.

OUTLOOK AND RISKS & CONCERNS ARE COVERED UNDER OPPORTUNITIES AND THREATS

FORWARD LOOKING STATEMENTS

Statements in this report describing the Companys objectives, projections, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws and regulations that involve risks and uncertainties. Such statements represent the intention of the Management and the efforts being put into place by them to achieve certain goals. Actual results might differ materially from those either expressed or implied in the statement depending on the circumstances. Therefore, the investors are requested to make their own independent assessments and judgments by considering all the relevant factors before making any investment decision.

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