Modern Dairies Ltd Directors Report

Dear Members,

Your Directors hereby present their 34th Annual Report together with the Audited Financial Statements of Modern Dairies Limited for the year ended 31st March, 2026.

Rs. in Lacs

FINANCIALS	Year Ended 31.03.2026	Year Ended 31.03.2025
Net Sales and other Income	3,41,22	3,48,92
Operating Profit	11,11	14,77
Finance Cost	1,11	1,83
Cash Profit	10,00	12,94
Depreciation & Amortization Expenses	3,26	3,15
Profit before Exceptional Items	6,74	9,79

PERFORMANCE

Your company during this Financial Year under review has achieved a revenue of Rs. 3,41,22 Lacs as against Rs. 3,48,92 Lacs over the previous year. The operating profit this year was Rs. 11,11 Lacs as against Rs. 14,77 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. The companys operating team is working relentlessly to achieve better performance.

This year the prices of milk continued to remain on the higher side than the last year. The increase in the Milk Prices could not be passed to the customers, resulting into lower margins.

In the Current fiscal availability of milk has improved which augurs well for Dairy Sector.

DIVIDEND

In view of requirements of funds for operations, your Directors are unable to recommend any dividend for the Financial Year ended on 31st March, 2026.

MILK CESS

As the members are aware that the Company had filed a Special Leave Petition before the Honble 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 Honble 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 the last demand notice dated 1.1.2024 issued by Govt. of Haryana upto December quarter 2023 stand Rs. 544.31 Crore, which includes Milk Cess and interest thereon. The Company as an abundant caution is providing for the Milk Cess in the accounts. As on 31st March 2026, the total Milk Cess provision amount is Rs. 21.89 Crore, out of which Rs. 9.91 Crore (Rs. 5.91 Crores + Rs. 4.00 Crores) has been already deposited as per Honble Supreme Courts and Honble Punjab & Haryana High Courts order.

The final decision is pending before the Honble Supreme Court of India.

QUALITY, FOOD SAFETY & ENVIRONMENT STANDARDS

Quality, food safety, and environmental responsibility are paramount to the Company. We follow stringent quality control and inspection processes in accordance with industry best practices, including Good Manufacturing Practices (GMP) and Good Hygienic Practices (GHP). These systems ensure that our diversified range of products consistently meet high standards of quality, safety, and nutrition.

The Company has implemented a Quality Management System certified by DNV GL, Netherlands, in accordance with the latest applicable versions of ISO 9001, FSSC 22000, and ISO 14001.

In its pursuit of excellence, the Companys manufacturing facility has also obtained Good Manufacturing Practices (GMP) certification from the World Health Organization (WHO) for its Pharmaceutical-grade Lactose Monohydrate.

Our facilities are approved and registered with USFDA and Export Inspection Agency (EIA) enabling us to supply our products to both domestic and international markets. In addition, several leading multinational food companies operating in India have approved our manufacturing operations as suitable for the supply of our products, reflecting our commitment to stringent quality, food safety, and regulatory standards.

SHARE CAPITAL

The Company has Authorised Share Capital of Rs. 35,00,00,000/- (Rupees Thirty Five Crore only) divided into 3,50,00,000 (Three Crore Fifty Lakhs) equity shares of Rs. 10/- (Rupees Ten). The Paid up Equity Share Capital is Rs. 28,41,98,610/- (Rupees Twenty Eight Crore Forty One Lakhs Ninety Eight Thousand Six Hundred Ten only) as on 31st March, 2026.

Raising of funds by issuance of Warrants convertible into Equity Shares through Preferential Issue on a private placement basis

Members are aware that in the fiscal year ending 31.03.2025, the Company got approval from BSE Ltd for allotment of 86,00,000 warrants convertible into equity shares of the Company (“Convertible Warrants”) of face value Rs. 10/- each at Rs. 50/- each (including premium of Rs. 40/- per share) as determined in accordance with Chapter V of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("SEBI ICDR Regulations"), by way of preferential issue on a private placement basis to the persons forming part of Promoters and Promoter group.

Conversion of Warrants into Equity Shares of Company on exercise of option attached with convertible Warrants

This is to inform the Honble members that, 51,00,000 Warrants out of the above said 86,00,000 Warrants have been converted to the equivalent number of Equity Shares of the Company (i.e. 51,00,000 Equity Shares) on exercise of the right of conversion by the Allottees. The same are also listed on BSE Ltd.

Utilization of funds

In pursuance to Regulation 32(7A) of SEBI (Listing Obligations & Disclosure Requirement) Regulations, 2015, this is to inform that the Company in the financial year ended 31.03.2026 raised through conversion of warrants to the equity shares of the Company the total funds of Rs. 1050 Lacs out of which Rs. 794.46 Lacs has been utilized for the operations of the Company upto the end of the year.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the period under review, the details of Directors and Key Managerial Personnel are as follows:

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 2025-26, 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 sub section (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 of Schedule II 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, 2026 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 five 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

• Allotment Committee

• Corporate Social Responsibility 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, Stakeholders Relationship Committee, Allotment Committee and Corporate Social Responsibility Committee. Further, the provisions of Companies Act mandating constitution of Risk Management Committee is not yet applicable to the Company.

AUDITORS

Statutory Auditors

M/s. APT & Co. LLP, Chartered Accountants, (Registration No. 014621C/N500088) were appointed as Statutory Auditors of the Company at 32nd Annual General Meeting held on 27th September, 2024 for a period of two years till the conclusion of the 34th Annual General Meeting to be held in the year 2026 at a remuneration mutually agreed between the Board of Directors of the Company and the Statutory Auditors, whose tenure is going to expire at this ensuing Annual General Meeting.

The Board of Directors pursuant to Section 139 and 142 and other applicable provisions of Companies Act, 2013, if any and the rules framed thereunder and subject to approval of Shareholders approved appointment of M/s. Sanjeev Sharma & Associates, Chartered Accountants (Firm Registration No. 12326N) as Statutory Auditors of Company for a period of One (1) year to hold office from this ensuing Annual General Meeting till the conclusion of the Annual General Meeting to be held in the year 2027 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 re-appointment and remuneration of M/s. K.K. Sinha & Associates, Cost Accountants as Cost Auditors of the Company to conduct the cost audit for the year 2026-27 on the recommendations of the Audit Committee subject to the ratification of the remuneration by the shareholders.

Secretarial Auditors

The Board of Directors and the shareholders in its Annual General Meeting held in the year 2025 pursuant to Section 204 and the rules framed thereunder approved appointment of M/s. Sanger & Associates, Company Secretaries (Sole Proprietorship) as Secretarial Auditors of Company for a period of three (3) years to hold office till the conclusion of the Annual General Meeting to be held in the year 2028 at a remuneration and on such terms as mutually agreed between the Board of Directors of the Company and the Secretarial Auditors.

AUDITORS REPORT

Statutory Auditors Report

The Statutory Auditors of the Company M/s. APT & Co LLP, Chartered Accountants, has submitted the Auditors Report on standalone financial statements for the period ended March 31, 2026 which do not contain any qualification, reservation or adverse remark or disclaimer. The notes to the accounts referred to in the Auditors Report are self-explanatory and therefore, do not call for any further comments. The Auditors have also not reported any matter under section 143(12) of the Companies Act, 2013.

Secretarial Auditors Report

The Secretarial Auditor M/s. Sanger & Associates, Company Secretaries has submitted the Secretarial Audit Report for the Financial Year 2025-26 in Form No. MR-3 and forming part of this Directors Report annexed as “ANNEXURE-A”.

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 2025-26, no complaint was 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.

MDLs 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 Companys internal control over financial reporting (as defined in Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015) as of 31st March, 2026. The assessment involved self- review and external audit.

M/s. APT & Co. LLP, Chartered Accountants, the Statutory Auditors of MDL have audited the financial statements included in this annual report and have 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, 2026, 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, 2026 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 2025-26.

EXTRACT OF ANNUAL RETURN

In terms of requirement of section 134 (3) (a) read with Section 92(3) of the Companies Act, 2013, the Annual return of the Company has been placed on the Companys website and can be accessed 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-B” 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 were applicable to the Company for the period under review.

As per the applicable provisions, the Company has to spend at least two per cent of the average net profits of the company made during the three immediately preceding financial years, i.e. FY 22-23, FY 23- 24 & FY 24-25 which came to Rs. 41.67 Lacs. The Company is happy to inform that the total amount spent by the Company during the year was Rs.41.76 Lacs on the CSR activities. The Annual Report on CSR activities in the prescribed Form is attached as “Annexure-C” 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 2025-26 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 arms length and are in the ordinary course of business. Related Party disclosures as per IND AS- 24 have been provided in the Notes to the Financial Statements.

During financial year 2025-26, your company has entered into material contract/ arrangement/ transaction with related parties in accordance with its Policy on Materiality of Related Party Transactions. The details of material related party transactions are reported in Form AOC-2 and attached as “Annexure-D” to this report.

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 Companys 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 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 complaint was received during financial year 2025-26.

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.

DIRECTORS 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, 2026 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, 202	6 DIN:00482035