Shivamshree Businesses Ltd Management Discussions.

We submit herewith the "Management Discussion and Analysis Report" on the business of the Company as applicable to the extent relevant.



Over the years, India has emerged as one of the worlds biggest producers of milk, with the total milk production rising from 122 Million Metric Tons in 2010 to 200 Million Metric Tons in 2019.

Despite this, the majority of the dairy industry in India is still highly unorganized dominated by small and marginal dairy farmers. As the industry possesses huge untapped opportunities, it has attracted a number of private companies and investors. In addition, the Indian government has also been taking initiatives towards the development of the dairy sector by providing support to the milk cooperatives and rural milk producers.

Moreover, the sustained growth of the Indian economy has led to a rise in the spending power of consumers, rapid urbanization as well as changes in the dietary patterns. With an increase in the working population, hectic lifestyles and increasing health consciousness among the consumers, there has been a shift towards healthy and ready-to-eat dairy products. Apart from this, a large number of affluent consumers who prefer value-added and premium dairy products, have further facilitated the growth of the organized dairy sector.


India is the biggest player in the league when it comes to the dairy industry. Along with being the largest producer, the Indian dairy industry has also started exporting milk now. The value of milk is more than the combined value of wheat and rice in the agriculture and food sector. The country is the worlds largest milk producer with more than 13% of the worlds total milk production. India is also globally the largest milk producing country since 1997. Out of the total milk production, 48 % milk is either consumed at the producer level or sold to non-producers in the rural area. The balance 52 % of the milk is a surplus available for sale to consumers in urban areas. Out of the marketable surplus, it is estimated that about 40 % of the milk sold is handled by the organized sector and the remaining 60 % by the unorganized sector. (Source - Department of Animal Husbandry & Dairying)

A typical Indian phenomenon is the unorganized sector of milkmen, vendors who collect the milk from local producers and sell the milk in urban and rural areas. The produce amounted to around 65-70% of the national milk production.The Indian ice cream industry is one of the fastest growing segments of the dairy or food processing industry. Currently the ice cream market in India is estimated to be over INR 6,000 crores, and is growing at a rate of 15-20% year-on-year.

Last year, India produced close to 146.31 million tonnes of milk, 50% more than the US and three times as much as China. India also produces the biggest almanack of any world dairy industry indias Export of Dairy products was 1,13,721.70 MT to the world during 2018-19. Its monetary worth was Rs. 2422.85 Crores/ 345.71 USD Millions during the year 2018-19. The dairy industry is contributing around 26% to total agriculture GDP. (Source - Agricultural & Processed Food Products Export Development Authority)

A recent CRISIL report foresees a 50% faster growth in the value-added products sector in the next few years. It also suggests that such products would contribute 14-15% to an annual growth over the next three fiscal years.

It is expected that the Asia Pacific cheese market will double its present size of USD 8.3 billion to reach approximately USD 15.5 billion by the year 2021. India and China are the two countries in this region with a fast growing cheese market.

After four years of slackening, Indias dairy exports have revived to accomplish the second-best show ever in the financial year 2018-19 due to supply deficit-led global rate the increase in skimmed milk powder (SMP) and other milk derivatives including ghee and butter. (Source - Agricultural and Processed Food Products Export Development Authority)

The most significant fact is, the dairy industry is expected to take over the information technology sector as the biggest employment generator. In the recent interim budget for 2019-20, proposals related to the dairy industry are going to aid in the increase in farmers incomes.

Indian Dairy Industry is booming and it is surely going to take the agri-economy up a notch.

Analysts believe that the cheese sector in India is set for rapid growth. Utilizing the benefits of an integrated sales and distribution system and employing diversified sourcing is the way forward in the sector. The value added dairy industry segment is expected to attract investments and entry of new players in the coming years. Players are emphasizing on offering the consumer better quality differentiated products. Consumers are looking for more and more healthy dairy options and introducing such cheese options will see traction in the market. It has been projected that the Indian cheese market will grow at a CAGR of approximately 31% during 2015-2020, in terms of sales values.


Some of the key changes in the industry unfavorable to the company are:

• Entry of Multinational Companies manufacturing dairy products in the domestic market.

• Increasing chemical contaminants as well as residual antibiotic in milk.

• Poor microbiological quality of milk.

• Deficiency of molasses, a rich source of energy and binding agent in feed industry and constituent of urea molasses mineral lick.

• Extinction of the indigenous breeds of cattle due to indiscriminate use of crossbreeding programme to enhance milk production.


Solar power in India is a fast developing industry. The countrys solar installed capacity reached 23 GW as of 30 June 2018. India expanded its solar-generation capacity 8 times from 2,650 MW on 26 May 2014 to over 20 GW as on 31 January 2018. The 20 GW capacity was initially targeted for 2022 but the government achieved the target four years ahead of schedule. The country added 3 GW of solar capacity in 2015-2016, 5 GW in 2016-2017 and over 10 GW in 2017-2018, with the average current price of solar electricity dropping to 18% below the average price of its coal-fired counterpart.

In January 2015 the Indian government expanded its solar plans, targeting US$100 billion in investment and 100 GW of solar capacity (including 40 GW from rooftop solar) by 2022. Indias initiative of 100 GW of solar energy by 2022 is an ambitious target, since the worlds installed solar-power capacity in 2017 is expected to be 303 GW. The improvements in solar thermal storage power technology in recent years has made this task achievable as the cheaper solar power need not depend on costly and polluting coal/gas/nuclear based power generation for ensuring stable grid operation.

In addition to its large-scale grid-connected solar PV initiative, India is developing off-grid solar power for local energy needs. Solar products have increasingly helped to meet rural needs; by the end of 2015 just fewer than one million solar lanterns were sold in the country, reducing the need for kerosene. That year, 118,700 solar home lighting systems were installed and 46,655 solar street lighting installations were provided under a national program; just over 1.4 million solar cookers were distributed in India.

In January 2016, Prime Minister Narendra Modi and French President Franois Hollande laid the foundation stone for the headquarters of the International Solar Alliance (ISA) in Gwal Pahari, Gurgaon. The ISA will focus on promoting and developing solar energy and solar products for countries lying wholly or partially between the Tropic of Cancer and the Tropic of Capricorn. The alliance of over 120 countries was announced at the Paris COP21 climate summit. One hope of the ISA is that wider deployment will reduce production and development costs, facilitating the increased deployment of solar technologies to poor and remote regions.

A report published by the Institute for Energy Economics and Financial Analysis (IEEFA) found that India installed 10 GW of solar in 2017, almost double its record in 2016. Crucially, Indias "Scheme for Development of Solar Parks" has proven successful at attracting foreign capital toward construction of the worlds largest ultra-mega solar parks.


The land is scarce in India, and per-capita land availability is low. Dedication of land for the installation of solar arrays must compete with other needs. The amount of land required for utility-scale solar power plants is about 1 km2 (250 acres) for every 40 60 MW generated. One alternative is to use the water-surface area on canals, lakes, reservoirs, farm ponds and the sea for large solar-power plants. These water bodies can also provide water to clean the solar panels. Highways and railways may also avoid the cost of land nearer to load centers, minimizing transmission-line costs by having solar plants about 10 meters above the roads or rail tracks. Solar power generated by road areas may also be used for in-motion charging of electric vehicles, reducing fuel costs. Highways would avoid damage from rain and summer heat, increasing comfort for commuters.

The architecture best suited to most of India would be a set of rooftop power-generation systems connected via a local grid. Such an infrastructure, which does not have the economy of scale of mass, utility-scale solar-panel deployment, needs a lower deployment price to attract individuals and family-sized households. Photo voltaic are projected to continue their cost reductions, becoming able to compete with fossil fuels.

Greenpeace recommends that India adopt a policy of developing solar power as a dominant component of its renewable-energy mix, since its identity as a densely-populated country in the tropical belt of the subcontinent has an ideal combination of high insulation and a large potential consumer base. In one scenario India could make renewable resources the backbone of its economy by 2030, curtailing carbon emissions without compromising its economic-growth potential. A study suggested that 100 GW of solar power could be generated through a mix of utility-scale and rooftop solar, with the realizable potential for rooftop solar between 57 and 76 GW by 2024.

During the 2015-16 fiscal year NTPC, with 110 MW solar power installations, generated 160.8 million kWh at a capacity utilization of 16.64 percent (1,458 kWh per kW) more than 20 percent below the claimed norms of the solar-power industry.

It is considered prudent to encourage solar-plant installations up to a threshold (such as 7,000 MW) by offering incentives. Otherwise, substandard equipment with overrated nameplate capacity may tarnish the industry. The purchaser, transmission agency and financial institution should require capacity utilization and long-term performance guarantees for the equipment backed by insurance coverage in the event that the original equipment manufacturer ceases to exist. Alarmed by the low quality of equipment, India issued draft quality guide lines in May 2017 to be followed by the solar plant equipment suppliers conforming to Indian standards.


The financial statements have been prepared in accordance with the requirements of the Companies Act, 2013 and applicable accounting standards issued by the Institute of Chartered Accountants of India. The details of the financial performance of the Company are appearing in the Balance Sheet, Statement of Profit & Loss Accounts and other financial statements forming part of this annual report.


Given the magnitude and nature of its business, the Company has maintained sound and commercial practice with an effective internal control system. The system ensures that all transactions are authorized, recorded and reported correctly to safeguard the assets of the Company and protect them from any loss due to unauthorized use or disposition. The adequate internal information system is in place to ensure proper information flow for the decision-making process. The Company also has well-established processes and clearly defined roles and responsibilities for people at various levels. The control mechanism also involves well documented policies, authorization guidelines commensurate with the level of responsibility and standard operating procedures specific to the respective businesses, adherence to which is strictly ensured. Internal audit is carried out frequently to create awareness and to take corrective actions on the respective units or areas, which need rectification. These reports are then reviewed by the management team and the Audit Committee for follow-up action.


The Company regards its human resources as amongst its most valuable assets and proactively reviews policies and processes by creating a work environment that encourages initiative, provides challenges and opportunities and recognizes the performance and potential of its employees attracting and retaining the best manpower available by providing high degree of motivation.

Your Company believes in trust, transparency & teamwork to improve employees productivity at all levels.


The management discussion and analysis report containing your Companys objectives, projections, estimates and expectation may constitute certain statements, which are forward looking within the meaning of applicable laws and regulations. The statements in this management discussion and analysis report could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operation include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in the governmental regulations, tax regimes, forex markets, economic developments within India and the countries with which the Company conducts business and other incidental factors.

On behalf of the Board of Directors
For ShivamShree Businesses Ltd
PrafulBhai ParshottamBhai Bavishiya
Date: 04/09/2019 (DIN: 01908180)
Place: Ahmedabad Managing Director