ECONOMIC OVERVIEW
The Russia-Ukraine war impacted global output and escalated inflation.
The pandemic also impacted manufacturing activity, which in turn led to supply shortages,
release of pent-up demand and high inflation in many emerging and developing economies.
India is amongst the worlds largest populated Country. Over the past decade, the
Countrys integration into the global economy has been accompanied by economic growth
and it has now emerged as a global player. The Government and Reserve Bank of India took
several monetary and fiscal policy measures to support and safeguard against the adverse
impact of the crisis on the economy.
INDUSTRY STRUCTURE, OUTLOOK AND DEVELOPMENT
India has become the highest milk producer in the world and is leading
producer and consumer of dairy products worldwide with a sustained growth in the
availability of milk and milk products. Dairy activities form an essential part of the
rural Indian economy, serving as an important source of employment and income. The economy
is expected to remain resilient and benefit from the recovery in consumption supported by
increasing normalisation of activity, higher rural income and the boost from pentup
household savings in addition to continued emphasis on infrastructure spending by the
government.
There are many opportunities and challenges in the Indian Dairy
Industry. Dairy products are a major source of cheap and nutritious food to millions of
people in India and the only acceptable source of animal protein for a large vegetarian
segment of the Indian population. Dairying has been considered as one of the activities
aimed at alleviating the poverty and unemployment, especially in the rural areas in the
rain-fed and drought-prone regions.
The laws regulating the safety and quality of food are in existence
since 1899. The number of legislations and quality standards has also increased
substantially with the passage of time and growth of the industry. The food sector in
India is governed by a multiplicity of laws under different Ministries. The "Food
Safety and Standards Act, 2006", aims to integrate the food safety laws in the
country in order to systematically and scientifically develop the food processing industry
and shift from a regulatory regime to self-compliance.
Organized dairy sector is growing and investor interest in dairy
industry is also quite high.
The main aim of the Indian Dairy Industry is to enhance milk production
and upgrade milk processing system by using innovative technologies.
OPPORTUNITIES AND THREATS
Opportunities
(i) With increased income levels, demand of milk products has gone up. This would mean
higher consumption of conventional milk products as also introduction of new milk based
products.
(ii) Milk is a preferred source of protein by Indian populace. Milk and milk products
are therefore likely to get preference from consumers who look for protein rich food.
(iii) India is the largest producer of buffalo milk which is a preferred variety of
milk for making certain type of cheese. It offers a good export opportunity for Indian
cheese made of buffalo milk.
(iv) Huge Employment generation & opportunities for Self-employment.
Threats
(i) Milk prices are expected to increase due to lower supply of milk resulting into
higher cost.
(ii) Production of milk in India is very widely scattered in rural areas and at vast
distances from the places of consumption i.e. urban areas.
(iii) The trend of adulterated Ghee continues to plague the market which is a serious
health risk for the consumers.
(iv) With increase in education level of young farmers, there is a tendency among the
young folk to prefer white collar jobs over conventional dairy farming profession.
(v) Stiff competition from the established big cooperatives operating in organized
sector and small scale producers which are large in numbers.
GROWTH OUTLOOK
The Indian economy is the fastest growing major economy and is projected to grow faster
in the coming years.
Rapid urbanization has led to a major increase in the demand for
packaged/processed foods, favorably impacting the dairy industry in the country. In the
era of digitization and increased access to actionable information, the Indian populace is
becoming health and product quality conscious, which has led to the improved variety of
food products available in the country. The increase in working population is leading to
increased demand for convenient healthy and tasty products by the consumers. Milk
production as well as production of milk products by organized sector is expected to grow
at a robust pace. Higher rate of growth is expected in value added dairy products. Western
dairy products, which currently occupy a small space, are likely to grow on a faster clip.
Packaged milk and products are likely to progressively replace loose milk and products.
The Company strives to leverage these opportunities and create innovative products that
meet diverse consumer requirements.
EXPANSION PLANS
Company holds on to its long term vision of becoming a significant
player in Dairy industry.
RISKS & CONCERNS
With rise in education level of rural population, young generation of
farmers is showing apathy for their ancestral profession. There is a tendency in them to
prefer white collar jobs over dairy farming in its present form.
Government - both Central and State - have increased their focus on
ensuring safe food products including milk products to the consumer. However, due to the
lack of adequate testing equipments in Government labs, lot of fear and confusion has been
created in the minds of industry as well as consumers.
The Company has been able to mitigate such risks by working upon
strengthening its supply chain and increasing its customer base.
SEGMENT WISE /PRODUCT WISE REPORTING
The Company is operating in the single segment and engaged in the
manufacture and sales of dairy products i.e. pure ghee, skimmed milk powder, whole milk
powder. Therefore, segment wise information has not been disclosed.
INTERNAL CONTROL SYSTEM
The Company has structured the internal control system. In view of the
large size of the business and to enforce highest levels of transparency, the Company has
appointed an independent firm of Chartered Accountants, M/s. Rajeev Pankaj and Associates,
to act as the internal auditor of the Company covering nearly all aspects related to the
working of the Company. The Company has paid particular attention on proper maintenance of
equipments to ensure that they are operated at the rated capacities. The Company has taken
the effective steps for the reduction of cost and to improve the quality of the product.
The Company has in place adequate internal controls commensurate with
the size and nature of its operations.
The integrated financial accounting system supported by inbuilt
controls ensures reliable and timely financial and operational reporting.
The management has taken the stringent steps to give better milk
products to the consumer.
FINANCIAL PERFORMANCE
Financial performance of the Company has been given separately in the
Directors Report.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
Employees are considered as key stakeholders in the progress of
organization and various initiatives are being taken to upgrade their skills. It goes
without saying that human resource is of primary importance to any productive activity.
Manpower in the form of labour, supervisors and management personnel
are properly selected and deployed to have optimum output and to carry out operations
smoothly. Company has laid high emphasis on suitable policies and strategies to up keep
the high level of human motivation towards the plant operations. Company is aimed to
establish the atmosphere that all human resource from labours to managers behaves in the
context of the organizational objectives.
Industrial Relations remained cordial throughout the year under review.
KEY FINANCIAL RATIOS
In accordance with the SEBI (Listing Obligations and Disclosure
Requirements 2018) (Amendment) Regulations, 2018, the Company is required to give details
of significant changes (i.e. change of 25% or more as compared to the immediately previous
financial year) in key financial ratios.
| S. No. Particulars |
2022-23 |
2021-22 |
|
% Change Remarks |
| I Debtors Turnover Ratio |
10.31 |
7.25 |
42.28 |
Ratio of debtors to sales has gone up despite increase in the
turnover. |
| II Inventory Turnover Ratio |
10.19 |
9.29 |
9.64 |
NA |
| III Interest Coverage Ratio |
2.87 |
3.19 |
-10.03 |
NA |
| IV Current Ratio |
1.32 |
1.37 |
-4.13 |
NA |
| V Debt Equity Ratio |
0.90 |
0.59 |
52.47 |
Due to significant increase in debt in proportion to equity. |
| VI Operating Profit Margin % |
5.91 |
5.11 |
15.66 |
NA |
| VII Net Profit Margin % |
2.09 |
1.10 |
89.70 |
Due to significant increase in turnover |
| VIII Return on Net Worth |
0.07 |
0.03 |
133.33 |
Due to increase in turnover and margin. |
*Previous year ratios have been revised based on the disclosure
requirements under ‘Additional Regulatory Information (ARI) pursuant to amendment to
Schedule III of the Companies Act, 2013 vide MCA Notification No. GSR 207(E) dated
24.03.2021 w.e.f. 01.04.2021.
DISCLAIMER STATEMENT
Statements made in the Report describing the current industry
structure, development are based on certain assumptions and expectations. The Company
cannot guarantee that these assumptions and expectations are accurate.
| For and on behalf of the Board |
|
|
|
Sd/- |
Sd/- |
| Place : New Delhi |
Sudhir Avasthi |
Harmesh Mohan Sood |
| Date : 20.07.2023 |
Managing Director |
Director |
|
DIN:00152375 |
DIN:07951620 |
+91-9892691696
