herman milkfoods ltd Directors report

HERMAN MILKFOODS LIMITED ANNUAL REPORT 2008-2009 DIRECTORS REPORT To The Members Dear Members, Your Directors have great pleasure in presenting the 18th Annual Report together with Audited Accounts of the company for the financial year ended on 31st March 2009. FINANCIAL RESULTS: Rs. In lacs 2008-09 2007-08 Sales Turnover & Other Income 7781.22 4873.60 Operating Profit 219.88 175.21 Interest 7.39 15.36 Depreciation 75.80 72.16 Profit before tax 144.08 103.04 Provision for tax including for: - Current year NIL NIL - Earlier years NIL NIL - Deferred tax NIL NIL Net profit after tax 144.08 103.04 Appropriations: Proposed Dividend NIL NIL Transfer to General Reserves NIL NIL In view of the inadequate profits, your Directors are not in a position to recommend any dividend for the year. BUSINESS OPERATIONS: The sales turnover and other income during the financial year was Rs.7781.00 lacs resulting in net profit of Rs 144.08 lacs. During the year 2008-09, the company has entered into an agreement with The Ambala Coop. Milk Producers Union Ltd., Ambala, Haryana, The Bihar State Coop. Milk Producers Federation Ltd., The H.P. State Coop. Milk Producers Federation Ltd., Totu, Shimla and The Nestle India Ltd., Moga for processing of milk into various milk products. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT: 1. Outlook for the Industry: The Dairy Industry in India has the cooperative sector on the one hand which have an excellent milk procurement network. These companies are now becoming more market savvy and are launching new products and expanding their market. On the other hand the role of the private sector is also important and MNCs and large Indian companies co-exist side by side. With the government placing more emphasis on the agriculture sector the domestic dairy industry is keenly waiting for the government policy on this front. 2. Future Prospects: The company has been able to develop a strong marketing and distribution network for selling its products to The Nestle India Ltd., Moga, COMPFED, Patna and under the HERMAN BRAND name consisting of 200 distributors and 1000 retailers in various states. However the profit margin has continued to be squeezed due to competitive market conditions in the domestic dairy industry. Further, the Company has also set up a marketing Controlling office at New Delhi which controls the entire marketing in India and abroad. The Company receiving enormous Orders from abroad. The Company has already applied for the various requisite licenses with the concerned authorities. 3. Operational vis-a-vis Financial Performance: The company manufactures quality dairy products and certified as ISO- 9001:2000 and HACCP certified Company. The intense competition among private manufacturers to procure quality milk at a very high price had an adverse effect on Dairy Industries performance in the last few years. 4. Material Development in Human Resources / Industrial Relations Front: The team of people in the organization has been working with dedication, diligence, devotion, determination, dynamism, discipline and direction. The company believes that motivated employees are its most important resource and asset to the Company. Industrial relations during the year were cordial, cooperative, concerted and peaceful. As a result no labor disputes are pending with the Company in any Court of Law. DIRECTORS: Mrs. Rachna Garg and Mr. Virsa Singh Sidhu, Directors of the company are retiring by rotation at the forthcoming Annual General Meeting and being eligible have offered themselves for re-appointment. AUDITORS: M/s Taranjeet & Associates, Chartered Accountants, Chandigarh, the retiring auditors of the Company will hold office till the conclusion of the next Annual General Meeting and are recommended for reappointment. The Company has received certificate from Auditors for their reappointment. DEPOSITS: The company has not accepted any deposit within the meaning of section 58 A of the Companies Act, 1956 and rules made there under for the period under review. PARTICULARS OF EMPLOYEES: None of the employee was in receipt of the remuneration over and above the limits prescribed u/s 217(2A) of the Companies Act, 1956 read with Companies (Particular of Employees) Rules, 1975 as amended. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO: The information required under section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 with respect to the conservation of energy, technology absorption and foreign exchange earning and outgo is attached. BIFR STATUS: The Management feels pleasure in informing the shareholders that Honble BIFR has discharged the Company from the purview of the SICA/BIFR on 15.01.2009. Hence, the Company is no more a sick industrial company u/s 3(1) (o) of the SICA Act, 1985. AUDITORS REPORT: The observations in the Auditors report have been dealt with in notes to accounts and same being self explanatory, do not requires further clarification. LISTING AGREEMENT: The Company is regularly filing all the quarterly/annual reports required to be submitted under Listing Agreement to the Bombay Stock Exchange/ Ludhiana Stock Exchange. Further, the management is making all efforts to revoke the suspension of trading of shares of the company which is still in process. DIRECTORS RESPONSIBILITY STATEMENT: As required under section 217 (2AA) of the Companies Act, 1956 the Directors state that: i) In preparation of annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures. ii) The Directors had 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 at the end of the financial year and of the profit or loss of the company for that period. iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. The Directors have prepared the annual accounts on going concern basis. ACKNOWLEDGEMENT: The Directors, place on record their appreciation for the support and assistance received from banks and government authorities for their valuable support. Your directors also wish to place on record their gratitude to the valued shareholders of the company. The Board also records their appreciation to the contribution of their dedicated milk suppliers, dealers, employees and all concerned during the year. Date : 01.09.2009 For and on behalf of the Board Place : Chandigarh HERMAN MILKFOODS LIMITED. Sd/- (RACHANA GARG) CHAIRPERSON