Umang Dairies Ltd Merged Directors Report

To the Members,

The Directors have pleasure in presenting the 31st Annual Report along with Audited Financial Statements of the Company for the financial year ended 31st March 2024.

FINANCIAL RESULTS

( in crore)

Particulars	2023-24	2022-23
Revenue from Operations and Other Income	288.57	294.84
Profit/(Loss) before Finance Cost and Depreciation (PBIDT)	11.72	5.51
Profit/(Loss) before Tax (PBT)	1.38	(4.48)
Profit/(Loss) after Tax (PAT)	1.34	(3.26)
Surplus brought forward	22.78	25.57
Total amount available for appropriation	24.12	22.10
APPROPRIATIONS:
General Reserve	0.00	0.00
Dividend (Incl. Tax)	0.00	0.00
Surplus carried forward	23.99	22.78

DIVIDEND

Due to inadequacy of profits and to conserve financials resources for business operations, the Board does not recommend any dividend on equity shares for the financial year ended 31st March 2024.

OPERATIONS

The Revenue from Operations was Rs. 288.57 crore during the year as compared to Rs. 294.84 crore in the previous year.

Raw milk prices eased especially in the second half of the financial year due to good monsoons, and lower fodder cost. This helped your Company in improving margins. Apart from selling milk products under its own brand, your Company also undertakes certain job-work and receive conversion charges on it. These job-work contracts helped the Company in fully utilising its plant capacity thereby achieving economies of scale. The slight decline in sales is due to higher volume of conversion and lower volume of commodity products. The volumes are expected to improve in the coming quarters due to distribution expansion in the new geographies and channels.

There is improvement in the operational parameters of the plant in the last few months of the financial year. This is expected to further improve leading to increase in overall efficiency and competitiveness in the market.

Milk Procurement / Raw Material Security

Your Company has a long procurement network through Village Level Milk Collection Centres/Bulk Milk Cooler (BMC)/Milk Chilling Centres. It is proud to support more than 25,000 farmers. This network helps ensure hygienic and good quality raw milk.

In-house capability of Quality Assurance lab (QA)/infrastructure is maintained to ensure systems and processes are in place for quality compliance from raw milk to finished products. Necessary investment is being done in the entire value chain for securing quality raw material to support the growth plans.

Food Safety

The Company has upgraded its plant to further amendments of FSSC 22000 version 5.1, GMP and Quality Management System as per ISO: 9001 2015. 20 Certified Internal Auditors continued their as well as the front end to ensure quality products reach to the end consumers.

Good Manufacturing Practices (GMP), Prevention of Food Fraud, Food Threats and Integrated Pest Management System and

Training of shop floor people remained the most focused areas of compliance.

INDUSTRY SCENARIO

India is the largest producer and consumer of dairy products with volume of 230 Million MT contributing 23% of the global milk production. Milk is the largest agricultural commodity, and bigger than the next three crops (Rice, Wheat and Sugarcane) put together.

Value-added dairy products have witnessed healthy growth driven mainly by increasing disposal income, growing middle class, increasing working and urban population. The growth is led by both consumer and institutional segment. Subdued commodity prices this year after steep rise in the previous year has also helped in the industry growth.

OPPORTUNITIES & THREATS Opportunities

i. Increasing preference for packed and branded products over loose / unbranded products leading to increase in overall market. ii. Lower fodder prices will improve Indias cost competitiveness in the global dairy landscape. iii. E-commerce and quick commerce channel provide new opportunities for growth.

Threats

i. Dairy analogues, adulteration and plant-based products pose a major challenge and threat to the dairy industry specially to value added product category. ii. Milk price volatility and regional disparities, including subsidies given by some states from time to time. iii. Environmental issues and water scarcity.

GROWTH OUTLOOK

Indian Dairy Industry has shown consistent growth from last few years after COVID in both consumer and institutional demand. The trend is expected to continue this year. Value added Dairy Products are expected to grow in double digit to drive the overall organized dairy category to around 8 lac crore in 2024. There is no major headwind expected on the overall volume growth this year.

RISKS & CONCERNS

Subsidy to farmers by some states in the recent past has disrupted the overall commodity market.

HUMAN RESOURCE MANAGEMENT/ INDUSTRIAL RELATIONS

Employees are considered as key stakeholders in the progress of organisation and various initiatives are being taken to upgrade their skills through internal and external training. Job rotation opportunities are encouraging people to take on new roles and maximize their learning and work experience. Reward and Recognition schemes have been introduced to develop a competitive and performance-oriented work culture. Automation of HR functions helps in building speed, accuracy and improve employee experience. In order to encourage leadership and problem-solving qualities among workmen, your Company has established cross Functional Team projects. Your Company provides various Communication platforms with Senior Leadership to ensure open and transparent feedback from employees.

Industrial Relations remained cordial throughout the year under review.

INTERNAL CONTROL SYSTEM

The Company has in place adequate internal controls commensurate with the size and nature of its operations.

There is a Corporate Internal Audit team consisting of qualified professionals. In addition, services of external Audit firm is also availed to further strengthen its effectiveness. Regular internal audits are conducted to review the internal control systems and compliance thereof as per the annual audit plan approved by Audit Committee of the Board. The findings of the Audit team are reviewed by the Audit Committee and corrective actions are initiated, where necessary. In addition, the Company also follows a Compliance monitoring software tool to capture status of all applicable statutory compliances online.

CAPITAL STRUCTURE

During the year under review, there has been no change in the Authorised and Paid-up share capital of the Company. As on 31st March 2024, the Authorised Share Capital of the Company was Rs. 21 crore and Paid Up Share Capital was Rs. 11 crore. During the year under review, CARE Ratings Limited has assigned rating of BBB+ to Companys Long Term Facilities of Rs. 35 Crore.

SCHEME OF ARRANGEMENT

The Board of Directors of Umang Dairies Limited at its Meeting held on 28th June, 2023 had approved a composite Scheme of Arrangement (the Scheme) amongst Bengal & Assam Company Limited (BACL), Parent Company, Panchmahal Properties Limited (PPL), a Wholly-owned Subsidiary of BACL, and the Company and their respective Shareholders and Creditors, pursuant to the provisions of Sections 230 and 232 of the Companies Act, 2013 (the Act) for (a) Demerger of dairy business of UDL with and into PPL and residual business of UDL into and with BACL, w.e.f. 1st April, 2023 (Appointed Date).

The said Scheme is pending for approval of the Shareholders and Creditors of the Company and BACL. Post approval, the

Scheme will be filed for approval of jurisdictional National Company Law Tribunals, Stock Exchanges and other Regulatory/

Statutory Authorities.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of the Act, the Annual Return of the Company is available on the website of the Company and can be accessed at https://www.umangdairies.com/Annual%20Return%202023-24.pdf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year the Company has not given/made any loans, guarantees/securities and investments in terms of the provisions of Section 186 of the Act.

RELATED PARTY TRANSACTIONS

During the financial year ended 31st March 2024, all the contracts or arrangements or transactions entered into by the Company with the Related Parties were in the ordinary course of business and on arms length basis and were in compliance with the applicable provisions of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (the Listing Regulations). Policy on Materiality of Related Party Transactions and on Dealing with Related Party Transactions is available on the website of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, Ms. Poonam Singh (DlN:07122781) was appointed as Non-Executive Non-Independent Director of the Company w.e.f. 4th August 2023 and the requisite resolution in this regard was passed by the Shareholders at the Annual General Meeting (AGM) held on 11th September 2023. The Board is of the opinion that Ms. Poonam Singh has high integrity and relevant experience.

During the year under review, Ms. Pooja Gurwala (DlN:08663866) resigned from the Directorship of the Company w.e.f. 8th July 2023. The Board wishes to places on record its appreciation for the services rendered by her during her tenure.

Shri Manish Upadhyaya was appointed as Chief Executive Officer designated as Business Head and Whole time Key Managerial

Personnel w.e.f. 19th May 2023 and had resigned from the said position w.e.f. close of business hours on 31st January 2024. Shri Desh Bandhu Doda (DlN:00165518) and Shri Rajiv Sheopuri (DlN:03450185), Independent Directors, who were appointed by the Members at the AGM of the Company held on 16th September 2021, pursuant to the provisions of the Act and Listing Regulations, for a term of three consecutive years w.e.f. 19th August 2021, are proposed to be re-appointed as Independent

Directors of the Company for a further term of five consecutive years w.e.f. 19th August 2024, subject to approval of the Members at the forthcoming AGM of the Company.

Post transfer of Shri Puneet Garg, Chief Financial Officer of the Company to another Company within the group, he ceased to Chief Financial Officer of the Company w.e.f. 7th July 2023 and Shri Raghav Garg was appointed as Chief Financial Officer of the

Company w.e.f. 4th August 2023. Subsequently, Shri Raghav Garg was also appointed as Manager of the Company w.e.f. 29th April 2024 from wherein post organizational restructuring he stepped down as Manager of the Company w.e.f. 22nd May 2024. Shri Satyander Sharma was appointed as Manager of the Company w.e.f. 22nd May 2024, subject to approval of the Members at the ensuing AGM of the Company.

Shri V. Kumaraswamy (DIN: 02443804), retires by rotation and being eligible offers himself for re-appointment at the forthcoming

AGM of the Company.

All the Independent Directors of the Company have given requisite declarations that they meet the criteria of independence as provided under the Act and Listing Regulations.

Except as stated above, there was no other change in Directors and Key Managerial Personnel of the Company, during the year under review.

CORPORATE SOCIAL RESPONSIBILITY

Your Company considers community as its key stakeholder and endeavours to create economically viable and socially inclusive. CSR programmes of the Company are aimed at inclusive development and welfare of the community by providing livelihood opportunities through micro enterprises, healthcare, sanitation, education, empowering women through adult literacy and other means. Though the Company is not statutorily required to contribute for CSR activities, yet as a responsible Corporate it continues to support CSR projects/activities which it had initiated in the past. The Company has a Corporate Social Responsibility (CSR) Policy in accordance with the provisions of the Act. CSR Policy of the Company is displayed on the website of the Company.

Annual Report on CSR activities during the financial year ended 31st March 2024, in the prescribed format, is annexed to this

Report as Annexure-1 and forms part of it.

AUDITORS & THEIR REPORTS (a) Statutory Auditors

In accordance with the provisions of the Act and the Rules made thereunder, M/s Singhi & Co., Chartered Accountants, were reappointed as Statutory Auditors of the Company for their second term of five consecutive years from the conclusion of the

29th AGM till the conclusion of the 34th AGM to be held in the year 2027.

The observations of the Auditors in their report on Accounts and the Financial Statements, read with the relevant notes are self-explanatory. The Auditors Report does not contain any qualification, reservation, adverse remark or disclaimer. During the year under review, the Auditors have not reported any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed.

(b) Secretarial Auditor

The Board of Directors had appointed Shri Namo Narain Agarwal, Company Secretary in Practice, as Secretarial Auditor to carry out Secretarial Audit of the Company for the financial year 2023-24. The Report given by himforthesaidfinancialyear in the prescribed format, pursuant to the provisions of Section 204 of the Act and Regulation 24A of the Listing Regulations, is annexed to this Report as Annexure-2 and forms part of it. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

(c) Cost Auditor

In accordance with the provisions of Section 148(1) of the Act, the Company has maintained cost accounts and records.

The Cost Audit for the financial year ended 31st March 2023 was conducted by M/s Sanjay Kumar Garg & Associates, Cost Accountants, and the Cost Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India. The Audit of the Cost Records for the financial year ended 31st March 2024, is being conducted by the said firm and the Report will also be filed with theCorporateAffairs, Ministry Government of India. of

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the year under review, therewerenosignificantand material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations. Further, during the year under review, no applications were made or no proceedings were pending as at the end of the year under the Insolvency and Bankruptcy Code, 2016.

MATERIAL CHANGES AND COMMITMENTS

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report.

CHANGE IN THE NATURE OF BUSINESS

During the year under review, there was no change in the nature of business of the Company.

CONSERVATION OF ENERGY ETC.

The details as required under Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 is annexed to this Report as Annexure-3 and forms part of it.

PARTICULARS OF REMUNERATION

Disclosure of the ratio of the remuneration of each Director to the median employees remuneration and other requisite details pursuant to Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this Report as Annexure-4 and forms part of it. Further, Particulars of Employees pursuant to Rule 5(2) & (3) of the above Rules, also form part of this Board Report. However, in terms of provisions of Section 136 of the

Act, the Annual Report for the financial year 2023-24 is being sent to all the members of the Company and others entitled thereto, excluding the said particulars of employees. Any member interested in obtaining such particulars may write to the Company

Secretary. The said information is also available for inspection at the Registered Office of the Company on working days during working hours.

CORPORATE GOVERNANCE

Your Company reaffirmsits commitment to the highest standards of corporate governance practices. Pursuant to Regulation

34 read with Schedule V of the Listing Regulations, Management Discussion and Analysis, Corporate Governance Report and

Auditors Certificate regarding compliance of conditions of Corporate Governance are made part of thisAnnual Report.

The Corporate Governance Report which forms part of this Annual Report, also covers the following: a) Particulars of the five Board Meetings held during the financial year under review. b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, the criteria for performance evaluation of Directors. c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors. d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism. e) Details regarding Risk Management. f) Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

DEPOSITS

During the year under review, the Company has not taken any deposits from the public.

COMPLIANCE WITH SECRETARIAL STANDARDS

The applicable Secretarial Standards issued under Section 118 of the Act have been complied with by the Company.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 134(3)(c) of the Act, your Directors state that:-a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; if any; b) the accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; c) proper and sufficientcare has been taken for the maintenance of adequate of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the annual accounts have been prepared on a going concern basis; e) the proper internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively; and f) the proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CAUTIONARY STATEMENT

Management Discussion and Analysis Report contains forward looking statements which may be identified by the use of words in that direction or connoting the same. All statements that address expectations or projections about the future, including, but not limited to statements about the Companys strategy for growth, product development, market position, expenditures and financial results are forward looking statements. These are based on certain assumptions and expectations of future events. The

Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Companys actual results, performance or achievement could thus differ materially from those projected in any such forward looking statements.

The Company assumes no responsibility to publicly amend, modify or revise such forward looking statements, on the basis of any subsequent development, information or events.

ACKNOWLEDGEMENT

The Directors wish to thank its Customers, Shareholders, Banks, Dealers, Suppliers and Government Authorities for their continued support.

The Board also places on record its sincere appreciation of the hard work, put in by the employees at all levels during the period under report.

ANNEXURE-1 ANNUAL REPORT ON CSR ACTIVITIES DURING THE FINANCIAL YEAR ENDED 31ST MARCH 20241

1. Brief outline on CSR Policy of the Company:

Umang Dairies Limited endeavours to create communities that are economically viable and socially inclusive. Our CSR programmes are thus a participatory exercise designed to provide better livelihood opportunities. We also support all National Programmes that are aimed at uplifting the status of women, livelihood support through micro enterprises, enabling access to healthcare, sanitation and education. The Company has been focusing on inclusive growth and it has been undertaking activities aimed at welfare of the society in the areas pertaining to Dairy Interest Groups (DIGs), animal welfare, adult literacy among women, free health check-up camps etc. The Company has framed a CSR Policy as required under Section 135 of the Companies Act 2013 and the Rules made thereunder. The CSR Policy has been posted on the website of the Company.

2. Composition of CSR Committee:

SI. No. Name of Director	Designation/Nature of Directorship	Number of meetings of CSR Committee held during the year	Number of meetings of CSR Committee attended during the year
1 Shri A.S. Mehta	Member, Non-Independent Director	1	1
2 Shri D.B. Doda	Member, Independent Director	1	1
3 Shri V. Kumaraswamy*	Member, Non-Independent Director	1	1

3. Web-link where Composition of CSR committee, CSR Policy and CSR projects approved by the Board are disclosed on the website of the Company; https://www.umangdairies.com/pdf/CSRPolicy.pdf

4. Provide the executive summary along with web-link(s) of Impact Assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8, if applicable. Not Applicable

5. (a) Average Net Profit/(Loss) of the Company as per sub section (5) of section 135;	Rs. (527.46) lac
(b) Two percent of average net profit per of the Company as sub section (5) of section 135(5);	Nil
(c) Surplus arising out of the CSR projects or programmes: or activities of the previous financial years;	Nil
(d) Amount required to be set off for the financial year, if any;	Nil
(e) Total CSR obligation for the financial (d)]: year[(b) +(c)-	Nil
6. (a) Amount spent on CSR Projects (both Ongoing Project and other than Ongoing Projects);	Nil
(b) Amount spent in Administrative Overheads:	Nil
(c) Amount spent on Impact Assessment, if applicable:	Not Applicable
(d) Total amount spent for the Financial Year [(a)+(b)+(c)]:	Nil
(e) CSR amount spent or unspent for the financial year:

Total Amount		Amount Unspent ( in lac)
Spent for the Financial Year.	Total Amount transferred to Unspent CSR Account as per section 135(6).		Amount transferred to any fund specified under Schedule VII as per second proviso to section 135(5).
( in lac)	Amount	Date of transfer	Name of the Fund	Amount	Date of transfer
-	-	-	-	-	-

(f) Excess amount for set off, if any;

Sl. No. Particular	Amount ( in lac)
(1) (2)	(3)
(i) Two percent of average net profit of the company as per sub-section (5) of section 135	-
(ii) Total amount spent for the Financial Year	-
(iii) Excess amount spent for the Financial Year [(ii)-(i)]	-
(iv) Surplus arising out of the CSR projects or programmes or activities of the previous Financial Years, if any	-
(v) Amount available for set off in succeeding Financial Years [(iii)-(iv)]	-

7. Details of Unspent CSR amount for the preceding three financial years:

Preceding Financial Year	Amount transferred to Unspent CSR Account under sub section (6) of section 135 ( in lac)	Balance Amount in Unspent CSR Account under subsection (6) of section 135 ( in lac)	Amount spent in the reporting Financial Year ( in lac).	Amount transferred to a Fund as specified under Schedule VII as per second proviso to subsection (5) of section 135, if any Amount Date of ( in lac) Transfer	Amount remaining to be spent in succeeding Financial Years. ( in lac)	Deficiency, if any
2022-23	-	-	-	- -	-	-
2021-22	-	-	-	- -	-	-
2020-21	-	-	-	- -	-	-

8. Whether any capital assets have been created or acquired through Corporate Social Responsibility amount spent in the Financial Year: No

9. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per sub section ( 5) of section 135: Not Applicable