Dear Members,
Your Directors hereby present their 31st Annual Report together with the
Audited Financial Statements of Modern Dairies Limited for the year ended 31st
March, 2023.
| FINANCIALS |
|
Rs. in Lacs |
|
Year Ended |
Year Ended |
|
31.03.2023 |
31.03.2022 |
| Net Sales and other Income |
2,18,76 |
2,42,17 |
| Operating Profit |
18,09 |
11,47 |
| Finance Cost |
2,58 |
8 |
| Cash Profit |
15,51 |
11,39 |
| Depreciation & Impairment Loss |
3,35 |
6,44 |
| Profit for the year |
12,16 |
4,95 |
PERFORMANCE
During this Financial Year the industry witnessed improved demand of Dairy products.
The prices of milk started rising after Q1 of F.Y. 2022-23 and remained high throughout
the year. The CompanyRs.s operating team worked relentlessly which resulted in operating
profits of Rs. 18,09 Lacs this year against Rs. 11,47 Lacs previous year.
CURRENT OPERATIONS
With the beginning of the current fiscal year the milk availability has improved and
the prices of milk and milk products have also softened. Apart from Fresh Dairy products,
the Company has also focused on the milk nutritional ingredients business, which is a
growing market segment. The efforts have shown a better performance in the current
yearRs.s first quarter with operating profit of Rs. 4,12 Lacs against last yearRs.s first
quarter operating profit of Rs. 3,51 Lacs.
This year Monsoon is expected to be good which augers well for the agriculture and
dairy sector.
MILK CESS
As the members are aware that the Company had filed a Special Leave Petition before the
HonRs.ble Supreme Court against the decision dated 28th May, 2010 of Punjab
& Haryana High Court with regard to the levy of milk cess under the Haryana Murrah
Buffalo and other Animal Breed Act, 2001. The said SLP was filed by the Company in the
year 2010 and admitted in the
Supreme Court in 2012. The HonRs.ble Supreme Court had granted interim stay upon
payment of 50% of milk cess levied and demanded by Govt. of Haryana in favour of the
Company. As per demand notice issued by Govt. of Haryana at the year end stand Rs. 455.07
Crore, which includes Milk Cess and interest thereon from the Company. The Company as an
abundant caution is providing for the Milk Cess in the accounts. As on 31st
March, 2023, the total Milk Cess provision amount is Rs. 20.12 Crore, out of which Rs.
5.91 Crore has been already deposited as per HonRs.ble Supreme CourtRs.s order, The matter
is pending before the HonRs.ble Supreme Court of India.
PLEDGE OF PROMOTER SHAREHOLDING
The shareholding of promoter and promoter group aggregating to 10654779 shares, being
45.69% of the entire share capital of the Company is pledged in favour of Punjab National
Bank and other consortium members.
STATUS OF COMPANYRs.S ACCOUNTS WITH LENDERS
The companyRs.s lender Punjab National Bank has revived the old OTS and has extended
the time period for repayment of dues. The debt of Edelweiss ARC Ltd. (earlier State Bank
of India) has been restructured. The OTS and Restructuring Scheme is under implementation.
QUALITY, FOOD SAFETY & ENVIRONMENT STANDARDS
The Company has always followed the best practices of the industry in respect of Good
Management Practices (GMP) and Good Hygienic Pratices (GHP). The CompanyRs.s Quality
Management System has been certified by DNVGL Netherlands for updated version of ISO 9001,
FSSC 22000 and ISO 14001. The facilities are approved and registered with USFDA, Export
Inspection Agency, APEDA and HALAL for supply of its products in the domestic and
international market. Most of the leading Multinational Food Companies in India have
approved our operations as suitable for supplies of companyRs.s products to them.
SHARE CAPITAL
The paid up equity share capital as on March 31, 2023 is Rs. 23,35,89,000/- divided
into 2,33,58,900 equity shares of Rs. 10/- each and there was no change in capital
structure during the financial year 2022-23.
DIVIDEND
In view of requirements of regular funds for operations, your directors are unable to
recommend any dividend for the Financial Year ended on March 31,2023.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the period under review, the details of directors and Key Managerial Personnel
were as follows:
The Shareholders of the Company approved reappointment of Mr. Krishan Kumar Goyal (DIN:
00482035), who was liable to retire by rotation at the last Annual General Meeting held on
30th September, 2022.
Mr. Ashwani Kumar Aggarwal (DIN: 00486430), Executive (Whole-Time) Director of the
Company was appointed for a period of three consecutive years w.e.f 1st April,
2020 and is to be further reappointed with effect from 1st April, 2023 till the
conclusion of Annual General Meeting to be held in year 2026 in terms of the provisions of
Companies Act, 2013.
The Shareholders of the Company approved reappointment of Mr. Krishan Kumar Goyal in
the AGM in the year 2020 for the period of 5 years along with the remuneration as per the
provisions of Schedule V of the Companies Act 2013 which was for 3 years. But, keeping in
mind the financial constraints suffered by the Company, Mr. Krishan Kumar Goyal had not
drawn remuneration in this three yearsRs. period. During this year, the Board considered
the approval of remuneration for the remaining two years term in accordance with the
provisions of Sections 196, 197, 200 and 203 read with Schedule V and all other applicable
provisions of the Companies Act, 2013 and the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 (including any statutory modification(s) or reenactment
thereof for the time being in force), subject to the approval of the lenders and
shareholders of the Company w.e.f. 1st April, 2023 for two years as per
provisions of the Companies Act, 2013 and Articles of Association of the Company on a
remuneration as recommended by the Nomination & Remuneration Committee in their
Meeting.
Dr. Sanjay Kaushik, Dr. Meena Sharma and Mr. Ajay Kumar Sharma, who were appointed as
Additional Directors of the Company, has been regularized by shareholders at last Annual
General Meeting held on 30th September, 2022 as Non- Executive Independent
Directors of the Company.
Pursuant to the provisions of Section 149 of the Companies Act, 2013, Prof. Satish
Kapoor, Dr. Avtar Krishan Vashisht and Dr. Renu Vig were appointed as Independent
Directors of the Company and were further re-appointed for their second term which has
expired at the last Annual General Meeting held on 30th September, 2022.
Therefore, on completion of the tenure, the above said Directors ceased to be the
Independent Directors of Company w.e.f. 30.09.2022. The Board placed on record its
appreciation for the valuable contribution and the services rendered by Prof. Satish
Kapoor, Dr. Avtar Krishan Vashisht and Dr. Renu Vig during their respective tenure as
Director. The Board expressed its gratitude for their valuable guidance during their
association with the Company.
In pursuance of Section 152 of the Companies Act, 2013, at-least two-thirds of the
Directors (excluding Independent Directors) shall be subject to retirement by rotation.
One-third of such Directors must retire from office at each AGM and a retiring director is
eligible for re-appointment. Accordingly, Mr. Ashwani Kumar Aggarwal, Executive Director
(DIN: 00486430), is liable to retire by rotation at ensuing Annual General Meeting and
being eligible, offers himself to be reappointed at this AGM. In view of his considerable
experience, Board of Directors recommends his reappointment as Director of Company.
The following are the Key Managerial Personnel of your Company in accordance with the
provisions of Section 2(51), 203 of the Companies Act, 2013 read with Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014:
1. Mr. Krishan Kumar Goyal (Chairman and Managing Director)
2. Mr. Ashwani Kumar Aggarwal (Whole time Director)
3. Mr. Mukesh Sehgal (Chief Financial Officer)
4. Ms. Shruti Joshi (Company Secretary)
BOARD MEETINGS
During the financial year 2022-23, 5 (Five) meetings of the Board of Directors were
held. The details of the meetings of the Board are furnished in the Corporate Governance
Report which is attached to this Report.
ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
In pursuance of Section 134 (3) (p) of the Companies Act, 2013 read with rules made
thereunder, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, the Board of
Directors carried out the performance evaluation of the Board as a whole, its
Committees and individual directors. The evaluation was carried out using individual
questionnaires covering composition of Board, conduct as per Company values & beliefs,
contribution towards development of strategy & business plan, risk management, receipt
of regular inputs and information, codes & policies for strengthening governance,
functioning, performance & structure of Board Committees, skill set, knowledge &
expertise of Directors, preparation & contribution at Board meetings, leadership etc.
As part of the evaluation process, the performance of Non Independent Directors, the
Chairman and the Board was conducted by the Independent Directors. The performance
evaluation of the respective Committees and that of Independent and Non Independent
Directors was done by the Board excluding the Director being evaluated.
The Board of your Company formed an opinion that the Independent Directors of our
Company are maintaining high standard of integrity and possessing expertise, requisite
qualifications and relevant experience for performing their role as an Independent
Directors.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received the necessary declaration from each Independent Director in
accordance with Section 149(7) of the Companies Act, 2013 read with the rules made
thereunder and Regulation 25 (8) of the SEBI (Listing Obligations and Disclosure
Requirements) (Amendment) Regulations, 2018, that they meet the criteria of independence
as laid out in Subsection (6) of Section 149 of the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
BOARD DIVERSITY AND REMUNERATION POLICY
The Board has, on recommendation of the Nomination & Remuneration Committee of the
Company in accordance with Para A of Part D and Regulation 19 of Listing Regulations has
framed Nomination & Remuneration Policy for appointment and remuneration of Directors,
Key managerial Personnel and Senior Management Employees, which includes the criteria for
determining qualification, positive attributes, independence of a Director and other
matters provided under sub-section 3 of section 178 of the Companies
Act, 2013. As on 31st March, 2023 the Board consists of five members out of
which two are Executive Directors and three are independent directors.
The Board periodically evaluates the need for change in its composition and size.
We affirm that the remuneration paid to the Directors is as per the terms approved by
the Nomination and Remuneration Committee of the Company. COMMITTEES OF THE BOARD OF
DIRECTORS Your Company has the following three Board Level Committees established by
the Board in compliance with the requirements of the business and relevant provisions of
applicable laws and statutes:
• Audit Committee
• Nomination & remuneration Committee
• Stakeholders Relationship Committee
The details regarding composition, terms of reference, number of meetings held, etc. of
the above Committees are included in the Report of Corporate Governance, which forms parts
of the Annual Report. There has been no instance where the board has not accepted
recommendation of Audit Committee, Nomination & remuneration Committee and
Stakeholders Relationship Committee. Further, the provisions of Companies Act mandating
constitution of Risk Management Committee is not yet applicable to the Company.
AUDITORS Statutory Auditors
Pursuant to Section 139 and 142 and other applicable provisions of Companies Act, 2013,
if any and the rules framed thereunder, M/s. APT & Co. LLP, Chartered Accountants
(Registration No. 014621C/N500088) were appointed as Statutory Auditors of Company at 30th
Annual General Meeting for a period of two (2) years to hold office till the conclusion of
the Annual General Meeting to be held in the year 2024 at a remuneration mutually agreed
between the Board of Directors of the Company and the Statutory Auditors.
Cost Auditors
Pursuant to Section 148 and other applicable provisions of Companies Act, 2013, if any
and the rules framed thereunder, the Board of Directors have approved the appointment and
remuneration of M/s. K.K. Sinha & Associates, Cost Auditors as Cost Auditors of the
Company to conduct the cost audit for the year 2023-24 on the recommendations of
the Audit Committee subject to the ratification of the remuneration by the
shareholders.
M/s. K.K. Sinha & Associates, Cost Auditors confirmed eligibility to be appointed
as Cost Auditors of the Company and expressed his willingness by written consent for
appointment for the financial year 20232024.
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with rules
made thereunder, the Board of Directors had appointed M/s. Sanger & Associates,
Company Secretaries as Secretarial Auditor of the Company for the financial year 2022-23
for conducting the Secretarial Audit as required under the provisions of Companies Act,
2013.
The Secretarial Audit Report issued by M/s. Sanger & Associates, Company
Secretaries in Form MR-3 for the Financial Year ended 31st March, 2023 is
annexed herewith as "ANNEXURE-A" to this report.
Further, M/s. Sanger & Associates, Company Secretaries being eligible for
re-appointment expressed his willingness to act as Secretarial Auditor of Company for
Financial Year 2023-24, the Board of Directors on recommendation of Audit Committee
approved the re-appointment of M/s. Sanger & Associates as Secretarial Auditors of the
Company for Financial Year 2023-24.
AUDITORRs.S REPORT Statutory AuditorsRs. Report
The Statutory Auditors of the Company, M/s. APT & Co. LLP, Chartered Accountants,
have submitted the AuditorRs.s Report forming part of Financial Statements in this Annual
Report which has observation on Standalone Financial Statements for the period ended March
31,2023.
AuditorRs.s Qualifications/ Observations
DirectorRs.s remuneration is not admissible as prescribed in Sec-197 of companies Act,
2013 except in accordance with the provision of Schedule V and if it is not able to comply
with such provisions, the prior approval of lenders is required.
The Company is not eligible to pay director remuneration for non-compliance of
conditions prescribed in schedule V of the companies Act, 2013. During the year, the
company has given the director
remuneration to Mr. Ashwani Kumar Aggarwal (Executive Director) amounting to Rs.
35,81,520/- (for current quarter Rs.8,95,380/-).
Apart from the managerial remuneration for year ended 31st March, 2023, as
mentioned above the company has paid director remuneration of Rs. 2,50,01,962/- till date
without complying the provisions of Schedule V of the Companies Act, 2013.
ManagementRs.s Reply:
The company has paid Managerial Remuneration amounting to Rs.35,81,520/-, to director
for which the company is yet to receive approval from the competent authority/agency.
Management undertakes that in case the approval is not received from the competent
authority/agency, they shall refund the remuneration paid to them by the company.
Profitability of the company shall affect to the same extent.
Secretarial AuditorsRs. Report
The Secretarial Auditor M/s. Sanger & Associates, Company Secretaries has submitted
the Secretarial Audit Report for the Financial Year 2022-23 in Form No. MR-3 and forming
part of this Directors, Report annexed as "ANNEXURE-A"
Secretarial AuditorsRs. Qualification in Secretarial Audit Report
1. The Company also not Complied with Section 197 of Companies Act 2013 in respect of
remuneration paid to Managerial Personnel of the Company.
2. The Company has generally complied with the provisions of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, except filing of Compliance Certificate
for the quarter ended on September 30, 2022 and December 31, 2022 as per BSE Circular No.
20221028-15 dated October 28, 2022. However, the Company has maintained the Structured
Digital Database (SDD)as per the requirements of Reg 3(5) and 3(6) of SEBI (PIT)
Regulations, 2015 and company has also complied with all the applicable provisions of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015.
ManagementRs.s Reply:
The company has paid Managerial Remuneration to director for which the company is yet
to receive approval from the competent authority/agency. Management undertakes that in
case the approval is not received from the competent authority/agency,
they shall refund the remuneration paid to them by the company. Profitability of the
company shall affect to the same extent.
There was delay in filing of the certificates for the quarter ended September 2022 and
December 2022.
RISK MANAGEMENT
The Company recognises that risk is an internal and unavoidable component of business
and is committed to managing the risk in a proactive and efficient manner. The Company has
formulated Risk Management Policy to identify and then manage threats / risks that could
have impact on the goals and objectives of the Company. The Audit Committee of the Company
periodically reviews and evaluates the adequacy of risk management system. The actual
identification, assessment and mitigation of risks is however done by the executives of
the Company.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Your Company is committed to highest standards of ethical, moral and legal business
conduct. Accordingly, the Board of Directors have formulated Vigil Mechanism/Whistle
Blower Policy which provides a robust framework for dealing with genuine concerns and
grievances of Employees, Directors and Senior Executives. Your Company has an ethics
hotline which can be used by employees, Directors, senior executives, suppliers, dealers
etc. to report any violations to the Code of Conduct. Specifically, employees can raise
concerns regarding any discrimination, harassment, victimization, any other unfair
practice being adopted against them or any instances of fraud by or against your Company.
During financial year 2022-23, no complaints were received.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
MDL (Modern Dairies Limited) has aligned its current system of internal financial
control with the requirement of Companies Act, 2013.
MDLRs.s internal controls commensurate with its size and nature of its operations.
These have been designed to provide reasonable assurance with regard to recording and
providing reliable financial and operational information, complying with applicable
statutes, safeguarding assets from unauthorized use, executing transactions with proper
authorization and ensuring compliance of corporate policies.
The management assessed the effectiveness of the CompanyRs.s internal control over
financial reporting (as defined in Regulation 17 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015) as of 31st March, 2023. The
assessment involved selfreview and external audit.
M/s. APT & Co. LLP, Chartered Accountants, the Statutory Auditors of MDL has
audited the financial statements included in this annual report and has issued an
attestation report on our internal control over financial reporting (as defined in Section
143).
The Audit Committee reviews reports submitted by the management and audit reports
submitted by internal auditors and Statutory Auditors. Suggestions for improvement are
considered and the Audit Committee follows up on corrective action.
Based on its evaluations (as defined in Section 177 of Companies Act, 2013 and
Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015), the Audit Committee has concluded that, as of 31st March, 2023, the
internal financial controls were adequate and operating effectively.
MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING FINANCIAL POSITION OF THE COMPANY
There are no adverse material changes or commitments occurred after 31st
March, 2023 till the date of this report, which may affect the financial position of the
Company.
DEPOSITS
The Company has neither accepted nor invited any deposit from the public and hence
directives issued by Reserve Bank of India and the provisions of Chapter V (Acceptance of
deposits by Companies) of the Companies Act, 2013 and rules framed there under are not
applicable for the year.
TRANSFER TO RESERVES
Considering the financial position of the Company and requirements of regular funds for
operations, no amount has been transferred to the General Reserves of the Company during
Financial Year 2022-23.
EXTRACT OF ANNUAL RETURN
In compliance with Section 92(3), Section 134 (3)
(a) and Rule 12 of the Companies (Management and Administration) Rules, 2014 the
extract of the annual return in Form No. MGT-9 is annexed as
"ANNEXURE-B" forming part of this report and also available on the
website of the Company at www.moderndairies.com.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption, foreign exchange
earnings and outgo as per Section 134(3)(m) of the Companies Act, 2013, read with Rule 8
of the Companies (Accounts) Rules 2014, is given in the "ANNEXURE-C" and
forms part of this report.
CORPORATE SOCIAL RESPONSIBILITY
The provisions regarding Corporate Social Responsibility ("CSR") as
enumerated under section 135 of the Companies Act 2013 are applicable to the Company for
the period under review.
However, the liability to spend at least two per cent of the average net profits of the
company made during the three immediately preceding financial years is not applicable on
our company for the current financial year, since the company is having average net loss
instead of profits during the three immediately preceding financial years.
The Annual Report on CSR activities in the prescribed Form is attached as "Annexure-D"
to this report. The CSR Policy is available on the website of the Company at
www.moderndairies.com.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The details of Loans, guarantees and investments, if any covered under the provisions
of Section 186 of the Companies Act, 2013 for Financial Year 2022-23 forms part of the
notes to the financial statements.
RELATED PARTY TRANSACTIONS
All contracts or arrangements entered into by the Company with Related Parties have
been done at an armRs.s length and are in the ordinary course of business. Related Party
disclosures as per AS-18 have been provided in the Notes to the Financial Statements.
During financial year 2022-23, your company has not entered into any contract/
arrangement/transaction with related parties which could be considered Rs.materialRs. in
accordance with its Policy on Materiality of Related Party Transactions. Thus, there are
no transactions required to be reported in Form AOC-2.
CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS
A separate report on Corporate Governance & Management Discussion & Analysis is
attached to this report.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts or
tribunals impacting the going concern status and CompanyRs.s operations in future.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION,
PROHIBITION & REDRESSAL) ACT, 2013
Your Company has in place a policy on Prevention of Sexual Harassment at workplace.
This policy is in line with the requirements of The Sexual Harassment of Women at the
Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees whether
permanent, contractual, temporary and trainees are covered under this Policy.
As per the said Policy, an Internal Complaints Committee is also in place to redress
complaints received regarding sexual harassment. No complaints were received during
financial year 2022-23.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company is compliant with the applicable Secretarial Standards (SS) viz. SS-1 &
SS-2 on Meetings of the Board of Directors and General Meetings respectively.
DIRECTORSRs. RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, your Directors confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards have
been followed;
(b) they have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company as at 31st March, 2023 and of the profit
of the Company for the year;
(c) they have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts are prepared on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and
that such internal financial controls are adequate and were operating effectively;
(f) they have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.
APPRECIATION
Your Directors wish to place on record their sincere appreciation for the continued
support from its business associates and stakeholders of the Company.
By order of the Board of Directors For Modern Dairies Limited
| Krishan Kumar Goyal |
| Place: Chandigarh Chairman & Managing Director |
| Date: 11th August, 2023 DIN: 00482035 |
+91-9892691696
