Modern Dairies Ltd Management Discussions

INDUSTRY STRUCTURE & DEVELOPMENTS

India has a large, growing and increasingly sophisticated dairy consuming population. Demand for dairy products is growing at a fast rate.

Dairy development programmes have eventually transformed India from a milk-deficient nation into the worlds largest milk producer. Our world leading agritech and dairy technology could make a huge difference to Indias agricultural productivity and dairy production efficiency. Today, India contributes one-fourth of the global milk output alone. The dairy companies not only provide nutritious milk and milk products at affordable prices to consumers but also provide livelihoods to crores of dairy farmers across the country.

Further, Dairy Industry strengthens the rural economy, develop the ecosystem of self-employment and small entrepreneurship, increase social inclusion, and increase opportunities to set new standards in innovation and research.

OPPORTUNITIES AND THREATS OPPORTUNITIES

• The primary catalyst for the expansion of Indias dairy sector is the surge in consumption and consumer base, driven by population increase and rising income.

• Increased disposable money has allowed more people to purchase nutritious foods, notably dairy products, which is a key component of traditional Indian diet.

• Rising demand for nutrition-rich dairy products, including proteins, vitamins and minerals is anticipated to propel market expansion.

• Dairy companies are responding by offering a variety of cultured products such as dahi, lassi, flavored yoghurts, fortified milk and probiotic drinks that cater to health conscious consumers.

• With all these factors the dairy industry is all set for a bright future and growth in value added dairy products segment.

THREATS

• Intense competition exists in various product segments, with companies constantly innovating to offer differentiated products.

• While the dairy market in India is growing, competition for market share remains fierce due to the presence of established brands and new entrants.

• The export of Milk Products from the country are in direct competition from the global markets. It is imperative that our milk production cost is also competitive against global supply chain.

RISK AND CONCERN

Milk is the primary raw material for the Dairy industry. Climate challenges, such as droughts or excessive heat can adversely affect feed and fodder dynamics, resulting in reduced milk production, straining milk procurement. This can adversely affect the performance of the Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

To provide reasonable assurance that assets are safeguarded against loss or damage and that accounting records are reliable for preparing financial statements, management maintains a system of accounting and controls including an internal audit process. Internal controls are supported by management reviews.

The Board of Directors have an Audit Committee that is chaired by an Independent Director. The Committee meets periodically with Management, Internal Auditor, Statutory Auditors to review the Companys program of internal controls, audit plans and results, recommendations of the auditors and managements responses to those recommendations.

FINANCIAL PERFORMANCE AND RESULTS OF OPERATIONS

Your company during this Financial Year under review earned revenue of ? 3,48,92 Lacs as against ? 3,62,04 Lacs over the previous year. The operating profit this year was ?14,77 Lacs as against ?22,19 Lacs in the previous year.

The focus of the company continues to be in the fresh dairy, cultured products, cheese and milk nutritional ingredient business. It is a growing market segment and your company has also achieved growth in these segments. This year the prices of raw milk remained on the higher side than the last year which resulted in reduced margins particularly on the sale of fresh dairy and cultured products.

HUMAN RESOURCES

The Company regards its employees as valuable asset and continuously reviews and evolves policies and procedures to attract and retain its pool of technical and managerial personnel through a conducive work environment.

As at 31^st March, 2025, the Company had a total workforce of 453 persons.

CAUTIONARY STATEMENT

The Management Discussion and Analysis Report may contain statements that might be considered forward looking. These statements are subject to certain risks and uncertainties. Actual results may differ materially from those expressed in the statement as important factors could influence the Companys operations such as Government policies, political and economic developments and such other factors are risk inherent to the Companys growth.