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Parag Milk Foods Ltd.

BSE: 539889 Sector: Agri and agri inputs
BSE LIVE 15:40 | 18 Aug 235.90 0.10






NSE 15:48 | 18 Aug 235.75 -0.10






OPEN 235.00
VOLUME 29610
52-Week high 354.00
52-Week low 203.00
P/E 73.95
Mkt Cap.(Rs cr) 1,984
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 235.00
CLOSE 235.80
VOLUME 29610
52-Week high 354.00
52-Week low 203.00
P/E 73.95
Mkt Cap.(Rs cr) 1,984
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Parag Milk Foods Ltd. (PARAGMILK) - Director Report

Company director report

Your Directors are pleased to present the Twenty Fourth Annual Report of your Companytogether with the Audited Statement of Accounts and the Auditors’ Report of yourCompany for the financial year ended March 31 2016. The summarised results for Standalone& Consolidated accounts for the year ended March 31 2016 are as under.


The comparable financial performance of the Company (Standalone & Consolidated) forthe Financial 2015-2016 is summarized as under:

[Rs. in Million]




FY 2015-2016 FY 2014-2015 FY 2015-2016 FY 2014-2015
Total Revenue 16243.85 14270.45 16467.49 14456.69
Earnings before interest Depreciation and Tax 1498.56 1078.08 1492.19 1087.18
Less :- Depreciation 317.25 254.17 333.89 275.33
Less:- Interest 481.84 454.34 490.41 469.20
Profit before Tax 699.47 369.57 667.89 342.65
Less:- Tax expenses 174.38 3.93 194.71 20.56
Profit After Tax (PAT) 525.09 365.64 473.18 322.09
Balance brought forward from previous year 1068.56 719.65 959.38 655.16
Less:- Appropriations - - - -
a) Proposed Dividend (including tax on dividend) - - - -
b) Transfer to General Reserve - - - -
c) Accumulated Depreciation - (3.22) - (4.44)
d) Transfer to Debenture Redemption reserve (4.50) (13.50) 4.50 (13.50)
e) Bonus share issued (341.35) - (341.35) -
f) Minority Interest - - - 0.07
Balance carried forward to Balance-Sheet 1247.80 1068.56 1086.70 959.38
Earnings per Share
-Basic 8.01 6.29 7.22 5.54
-Diluted 8.01 5.30 7.22 4.67


In the current economic environment wherein revenue growth in the FMCG sector hasslowed down your Company achieved a sales growth of 13.84% during the year; your Companyregistered a total income of Rs.16243 Million in the Financial Year 2015 -2016 ascompared to Rs.14270 Million of the previous year. The Company has made Profit before tax(PBT) of Rs.699.47 Million on standalone basis for the year under review as compared toRs.369.57 Million for the previous year registering an increase of 89.26% this was mainlydue to increased sale of value added products and favourable raw material price whichenhanced the margins despite the pressure of reduction in selling price of Skimmed MilkPowder (SMP).

Your Company has successfully listed itself on BSE Limited (BSE) and National StockExchange of India Limited on 19th May 2016 and raised Rs.3000 Million through freshissue of 136.99 Million equity shares which will be mainly utilized towards CAPEXamounting to Rs.1500.0 Million and Rs.1000 Million will be utilized for part repaymentof working capital facilities taken from the existing bankers. Your Company has issuedshares based on the Issue price given below.

1. Issue price for HNIs and QIBs (excluding anchor investors): Rs.215 per Equity Shareincluding a share premium of Rs.205 per Equity Share (the "Issue Price");

2. Issue price for eligible employees: Rs.203 per Equity Share (post discount of Rs.12to the Issue Price) including a share premium of Rs.193 per Equity Share;

3. Issue price for retail individual investors: Rs.203 per Equity Share (post discountof Rs.12 to the Issue Price) including a share premium of Rs.193 per Equity Share; and

4. Anchor investor issue price: Rs.227 per Equity Share including a share premium ofRs.217 per Equity Share


Your Company is a leading manufacturer and marketer of dairy-based branded foods inIndia. Your Company commenced business in 1992 with collection and distribution of milkand has now developed into a dairy based branded consumer products Company with anintegrated business model manufacturing a diverse range of products including cheeseghee fresh milk whey proteins paneer curd yoghurt milk powder and dairy basedbeverages targeting a wide range of consumer groups through several brands under theflagship brands "GOWARDHAN" "GO" "TOPP UP" and "PRIDEOF COWS".

Our manufacturing facilities are strategically located at Manchar in the Pune districtof Maharashtra and Palamaner in the Chittoor district of Andhra Pradesh which have a highpopulation of dairy cows with milk processing capacities of 1.2 million litres per dayand 0.8 million litre per day respectively.

During the year your Company focused on product innovations brand building anddistribution to grow faster than the market. Your Company’s brands have become iconicover time due to combination of superior products and enduring communication. Your Companyhas good supply chain network which includes procurement from 29 districts acrossMaharashtra Andhra Pradesh Karnataka and Tamil Nadu through over 3400 village levelmilk collection centres. The Company procures milk from milk farmers and through chillingcentres and bulk coolers. The average daily milk procurement for the financial year2015-2016 is 10.40 lakhs litres. We have an extensive sales and distribution network whichcovers 15 depots 104 super-stockists and over 3000 distributors as on 31st March 2016spread across most states and union territories in India. We also have dedicated sales andmarketing team comprising more than 500 personnel based in the key distribution centres.Some of our leading institutional customers include leading restaurant and caf chainssuch as ‘Yum’! Restaurant (for ‘Pizza Hut’ ‘Taco Bell’ and‘KFC’) Jubilant Foodworks Limited (for ‘Domino’s Pizza’) andSankalp Recreation Private Limited (for ‘Sam’s Pizza’).

Your Company’s new capabilities and robust pipeline of innovations resulted in newlaunches in the form of "GO Badam Milk" "GO Cheese Chutney Slice" and"Go Almette" and other innovative products. Coupled with leading edge route tomarket strategy while building brand differentiation and relevance.


In order to conserve resources for working capital and new projects yourDirectors’ do not recommend any dividend for the Financial Year 2015-2016.


No amount has been transferred to general reserves for the Financial Year 2015-2016.


The Paid Up Capital of the Company as on 31st March 2016 stood at Rs.704158870.During the year your Company has issued new Compulsorily Convertible Debentures andconverted all Compulsorily Convertible Debentures into Equity Shares. The Company issued227000 equity shares of Rs.10/- each aggregating to Rs.56.75 Million under the EmployeeStock Option Plan during the year in addition your Company has issued 42135038 bonusshares of Rs.10/- each to the existing shareholders of the Company in the proportion oftwo (2) shares for every one(1) share held in accordance with the provisions of section 63of the Companies Act 2013 read with Rule 14 of the Companies (Share Capital andDebentures) Rules 2014


The following commitments material changes occurred subsequent to close of thefinancial year and the date of this report

1. The Company successfully came out with its Initial Public Offer (IPO) and raisedRs.3000.00 Million by way of fresh issue of equity shares and Rs.4505.37 Million throughoffer for sale (OFS). The Paid up capital of the company as on date is Rs.841145820/-

2. The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip codeNo. 539889 and on the National Stock Exchange of India Limited (NSE) with scrip code ofPARAGMILK. The Company confirms that the annual listing fees to both the stock exchangesfor the financial year 2016–17 have been paid.


Your Company has significantly enhanced the built up capacity by way of capitalexpenditure in plant and machinery at Manchar and Palamaner plant from time to time.Additions made during the year amounted to Rs.891.26 Million as on March 31 2016 asagainst additions of Rs.761.73 Million in the previous year ended March 31 2015.

Your Company has made a significant capital expenditure over the period of 5 years inPlant & Machinery:


Pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act 2013the Directors hereby confirm that;

(a) in the preparation of the annual accounts for the financial year ended March 312016 the applicable accounting standards had been followed along with proper explanationrelating to material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the Company for the year ended March 31 2016 ;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts for the financial year ended March31 2016 on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.


Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the performance evaluation of the Boardits Committees and Individual Directors and Independent Directors conducted and the samewas based on questionnaire and feedback from all the Directors on the Board as a Wholeits Committees and self-evaluation.

The Chairperson of the Nomination and Remuneration Committee (NRC) held separatediscussion with each of the Director’s of the Company and obtained their feedback onoverall Board effectiveness as well as on each of the other Director.

Based on the Questionnaires and feedback the performance of the every Director wasevaluated by the NRC.

Some of the key criterias for the performance evaluation as laid down by the NRC wereas follows:-

Contribution at Board / Committee meetings

Guidance / Support to Management outside Board/ Committee Meetings.

Performance evaluation of Board and Committees:

Board Structure and Composition

Degree of Fulfillment of key responsibilities

Establishment and delineation of responsibilities to Committees

Effectiveness of Board Process Information and Functioning

Board Culture and Dynamics

Quality of relationship between the Board and Management

Eflcacy of Communication with External Stakeholders

Committees- strengths and areas of improvement


A separate meeting of the Independent Directors ("Annual ID Meeting) was convenedon June 24 2016 which reviewed the performance of the Board (as a whole) thenon-independent director and the Chairman. Post the Annual ID Meeting the Collectivefeedback of each of the Independent Directors was discussed by the Chairperson of NRC withthe Board covering performance of the Board as a whole performance of thenon-independent directors and performance of the Board Chairman.


Your Company has presence in the international markets like UAE Hong Kong SingaporeOman Kuwait Mauritius New Zealand Australia Congo Iraq. Company has extensive Cheesedemand from international market and supplies bulk Cheese to Philippines Sri Lanka UAEand Bangladesh. During the year the Company’s export of consumer products decreasedby 36.70% as compared to the year 2014-15. The total export sale for financial year wasRs.318.09 Million against Rs.467.38 Million last year. The drop in export sale was due toalmost no sale of SMP as the prices of SMP fell in international market making Indian SMPnon-competitive.

Company’s UHT facility at Palamner plant is now approved by Export InspectionAgency (EIA) which enables the Company to export UHT to international Markets.


The distribution expansion plans have been prepared with focus on quality ofdistribution in top 25 cities and distribution expansion with focus in North and SouthIndia. The route to market (RTM) strategy focuses on building capability distributionalong with strengthening of the sales team.

In terms of brand building holistic 360 degree approach which was initiated last yearwith Cheese (Make it Amazing – with world cuisines) will be the way forward. In brandmarketing higher degree of focus is planned in social media marketing. Capabilitybuilding of the regional sales team will be focus for building distribution strength.

The Company has not only continued its efforts in developing more and more products forthe Indian ethnic community abroad but also targeted the local population in the targetmarkets.

The above initiatives being dovetailed with focus on operational efficiencies beingbuilt at plant level marketing initiatives to build brands and focus on qualitydistribution expansion and capability building of the sales team would help build theconsumer business with accelerated pace.


Bhagyalaxami Dairy Farms Private Limited (BDFPL) is wholly owned subsidiary of theCompany. Which is located at Manchar Pune District BDFPL which is a fully automated cowfarm housing over 2000 Holstein breed cows with superior quality yield. BDFPL wasestablished with the aim to educate farmers about best practice of breeding feedinganimal management and improving productivity.

The Gross Revenue of the BDFPL for FY 2016 stood at Rs.442.05 Million (Previous YearRs.844.55 Million). The company incurred a loss of Rs.52.76 Million (Previous Year:Rs.42.70 Million).

Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 the statement containing salient features of the financialstatements of the Company’s subsidiary in Form - AOC-1 is attached as Annexure 1.

Bhagyalaxmi produces "Farm-to-Home" premium quality milk under brand name of"Pride of Cows" with sales at Pune and Mumbai the pride of cow dairy is fullyautomated without any human intervention to ensure quality and purity of milk.

As required under Rule 8(1) of the Companies (Accounts) Rules 2014 the Board’sReport has been prepared on standalone financial statements and a report on performanceand financial position of its Subsidiary Company is included in the financial statements

Your Company has prepared Consolidated Financial Statements in accordance withAccounting Standard 21 (AS 21) issued by the Institute of Chartered Accountants of India.The Consolidated Statements reflect the results of the Company and those of its SubsidiaryCompany. The Audited Consolidated Financial Statements are provided in the Annual Report.


The Company has received resignation of Mr. Ramesh Chandak from Directorship as NomineeDirector on behalf of IDFC Alternatives. The Company has pursuant to Section 149 and 152of Companies Act 2013 received notice and declaration of Independence from Mr. RameshChandak (DIN.00026581) towards his appointment as Independent Director of the Company.The Board has appointed Mr. Ramesh Chandak as Additional Independent Director for a termof five consecutive years with effect from 24th June 2016 subject to confirmation by themembers in the forthcoming Annual General Meeting of the Company. The Board recommendsyour approval to the above appointment in the forthcoming Annual General Meeting.

During the Financial Year 2015-2016 Mr. Vishal Tulsyan- Nominee Director resigned witheffect from July 28 2015 and Mr. Girish Nadkarni Nominee Director resigned with effectfrom August 14 2015 and Dr. Thorat Nominee Director resigned with effect from September8 2015. The Board placed on record their sincere appreciation for the valuablecontribution made by them during their tenure as Directors with the Company. Ms. RadhikaPereira (DIN: 00016712) and Mr. Narendra Ambwani (DIN: 00236658) and Mr. Sunil Goyal (DIN:00503570) were appointed as Independent Directors with effect from May 26 2015 and Mr.Nitin Dhavalikar (DIN: 07239870) was appointed as an Independent Director with effect fromJuly 28 2015 and Mr. Ramesh Chandak (DIN.00026581) was appointed as Nominee Director onSeptember with effect from September 9 2015.

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Mr. Bharat Kedia has been appointed as the Chief Financial Officer of the Companyw.e.f. January 01 2015. Further Mr. Pritam Shah as the Managing Director of the Companyand Ms. Rachana Sanganeria as the Company Secretary are Key Managerial Personnel of theCompany as on March 31 2016.


Risks are events situations or circumstances which may lead to negative consequenceson the Company’s businesses. Risk management is a structured approach to manageuncertainty. A formal enterprise wide approach to Risk Management is being adopted by theCompany and key risks will now be managed within a unitary framework.

The Company has appointed M/s. KPMG in India as Internal Auditor. The Company has inplace an elaborate internal control system commensurate with the size and nature of itsbusiness and size and complexity of its operations. The primary objective of the Internalcontrol systems comprising of policies and procedures are designed to ensure reliabilityof financial reporting timely feedback on achievement of operational and strategic goalscompliance with policies procedures applicable laws and regulations to ensure properauthorization and accounting of transactions as also for safeguarding and protectingCompany’s assets and that all assets and resources are acquired economically usedefficiently & adequately protected to prevent any revenue leakage and losses to theCompany. The internal auditors’ reports are periodically reviewed by the managementand the Audit Committee and necessary corrective actions are taken from time to time.


The Board meets at regular intervals to discuss and decide on Company business policiesand strategy apart from other Board businesses. A notice of the Board Meeting iscirculated well in advance with the agenda which includes the detailed annexure/ notes tobe discussed to enable the Board to take an informed decision. The Board met 8 (eight)times during the year the details of which are given in the Corporate Governance Report.The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013 and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 (hereinafter referred as "SEBI (LODR)Regulations 2015".

Audit committee:

Audit Committee comprises of

1. Mr. Sunil Goyal - Chairman

2. Mr. Pritam Shah - Member

3. Mr. Nitin Dhavalikar - Member

4. Mr. Narendra Ambwani - Member

5 (Five) Audit Committee Meetings were held during the financial year under review andthe gap between two Meetings did not exceed 120 days. These Meetings were held on May 262015 July 28 2015 August 6 2015 December 23 2015 and March 21 2016 the details aregiven in the Corporate Governance Report.

Nomination and Remuneration Committee

Nomination and Remuneration Committee comprises of

1. Mr. Nitin Dhavalikar - Chairman

2. Mr. Devendra Shah - Member

3. Mrs. Radhika Pereira - Member

4. Mr. Ramesh Chandak - Member

2 (Two) Nomination and Remuneration Committee Meetings were held during the financialyear under review. These Meetings were held on May 26 2015 and September 4 2015 detailsof which are reproduced in the appropriate section of the Corporate Governance Report.

Stakeholders’ Relationship Committee

The Stakeholders Relationship Committee was constituted by the Board of Directors attheir meeting held on July 28 2015

The Composition of the Stakeholders’ Relationship Committee is as follows:

1. Mr. Narendra Ambwani - Chairman

2. Mr. Pritam Shah - Member

3. Mr. Sunil Goyal - Member

4. Mr. B.M. Vyas - Member


The Company has instituted ESOP Trust in the name of "Parag Milk Foods EmployeesStock Option Trust" and the "Parag Milk Foods Limited - Employee Stock OptionScheme 2015" (ESOS 2015) in April 2015 pursuant to resolutions dated February 272015 and April 21 2015 passed by the Board of Directors and the resolutions dated April3 2015 and May 16 2015 passed by the Shareholders. The ESOS 2015 is compliant with theSEBI (Share Based Employee Benefits) Regulations 2014 and the relevant provisions of theCompanies Act 2013 along with the Rules made thereunder including any amendments madethereto or notifications thereof. The purpose of the ESOS 2015 was to inter alia enablethe company to attract retain and reward appropriate human talent.

The ESOS 2015 is administered by the ESOP Trust 227000 Equity Shares were allotted tothe ESOP Trust on September 3 2015. The Options were granted to the eligible employeespursuant to the Nomination & Remuneration Committee meeting held on 4th September2015. The vesting of the options granted will be in the Financial Year 2016-2017.


The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in AnnexureII and is attached to this Report.


The particulars of Loans guarantees or investments made under Section 186 arefurnished in Annexure III and is attached to this report.


The Company has adopted a Whistle Blower Policy and has established the necessary vigilmechanism as defined under Section 177(9) of the Companies Act 2013 and Regulation 22 ofthe SEBI (LODR) Regulations 2015 for employees to report genuine concerns or grievances.The Whistle Blower Policy has been posted on the website of the Company.


The Board of Directors have framed a policy in accordance with Section 178 of theCompanies Act 2013 and SEBI

Listing Regulations which lays down a framework in relation to remuneration ofDirectors Key Managerial Personnel and Senior Management of the Company. This policy alsolays down criteria for selection and appointment of Board Members Key ManagerialPersonals and Senior Management. The Remuneration and Nomination policy has been uploadedon the website of the Company.


The company has zero tolerance policy in case of sexual harassment at workplace and hasadopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at workplace(Prevention Prohibition and Redressal) Act 2013 and rules there under. The company alsohas an anti sexual harassment committee which carries out its functions with greatdiligence. During the year under review no complaint on sexual harassment was received.


The company is operating its plant in a manner which endeavors protection of health/safety of workers and environment. All necessary measures are taken in relation to safetyand sanitation drinking water quality of food provided in the canteen etc for employeesand workers of the company. "Eco friendly green" initiatives are taken by thecompany at its plant to ensure safety. The company is in compliance with all labour andenvironmental laws.


All related party transactions that were entered into during the financial year 2015-16were in the ordinary course of business and at an arm’s length basis. All RelatedParty Transactions are placed before the Audit Committee and the Board as also to theBoard for approval. Omnibus approval was obtained for transactions which are of repetitivenature. Further there are no material related party transactions during the year underreview with the Promoters Directors or Key Managerial Personnel.

The particulars of contracts or arrangements with related parties referred to inSection 188(1) as prescribed in Form AOC - 2 of the rules prescribed under Chapter IXrelating to Accounts of Companies under the Companies Act 2013 is appended as AnnexureIV.

The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company.


Parag Milk Foods Limited has been leveraging the Information Technology and IT enabledservices for business process automation and transformation across various functionsinternal and external stakeholders.


Your company always believed in and worked towards "inclusive growth’-improving the quality of life of the people we touch and in the communities where weoperate. The CSR committee was constituted by the Board of Directors of the Company at itsmeeting held on 23rd June 2014 and re-constituted on 26th May 2015 and 28th July 2015.The CSR Committee of the Board of Directors of the Company Consists of the followingMembers viz.

1. Mr. Devendra Shah - Chairman

2. Mr. B. M. Vyas - Member

3. Mrs. Radhika Pereira - Member

4. Mr. Girish Nadkarni - resigned on August 14 2015

The following CSR Activities have been conducted during the financial year: 2015-16.

Corporate Social Responsibility (CSR) activities for the financial year 2015-16

1 A brief outline of the Company’s CSR Policy including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR Policy and projects or programs and the Composition of CSR Committee. CSR Policy is Available for inspection by Members of the Company
2 Average net profit of the Company for last three financial years 257.62 Million
3 Prescribed CSR expenditure (two percent of the amount mentioned in item 2 above) 2%
4. Details of CSR spent during the financial year: 0.72 Million
Total amount to be spent for the financial year 5 5.15 Million
6 Amount unspent- 4.43 Million

Details of amount spent on CSR Activities during the Financial Year 2015-16

Sr. No. CSR Projected or Activity Identified Sector in which the projects is covered Project of Program Amount outlay (Budget) project wise (Rs. In Million) Amount spent on the projects of programs (Rs. In Million) Cumulative Expenditure up to the Reporting period i.e. FY 15-16 (Rs. in Million) Amount spend direct or through implementing agency
1 Medical camp organized at Manchar Health Care Maharashtra 0.72 0.72 0.72 Direct

The Company had already budgeted to spend Rs.5.15 Million towards health care medicalcamp organized at Manchar-village and has already spent Rs.0.72 Million and the balanceamount of Rs.4.43 Million has been carried forward in the current year 2016-17 for thebudgeted spend.


Pursuant to Regulation 34 read with Schedule V of the SEBI (LODR) Regulations 2015detailed review of operations performance and future outlook of the Company is coveredseparately in this Annual Report.


As per Regulation 34 (3) read with Schedule V of the SEBI (LODR) Regulations 2015 aseparate section on corporate governance practices followed by the Company together witha certificate obtained from N.L. Bhatia & Associates a firm of Company Secretaries inPractice confirming compliance forms an integral part of this Report


The information required under Section 134(3)(m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure V. TheCompany was awarded a state level award for excellence in Energy Conservation andManagement by the Maharashtra Energy Development Agency on February 18 2016.


The Company has neither accepted nor renewed any deposits during the year ended 31stMarch 2016.


The Company has not bought back any of its securities during the year ended 31st March2016.


No significant material orders have been passed by the Regulators or courts ortribunals which would impact the going concern status of the Company and its futureoperations.


Information as required under the provisions of Section 197(12) of the Companies Act2013 read together with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is appended herewith as Annexure VI to this report. Theinformation required pursuant to Section 197(12) of the Companies Act 2013 read withRules 5(2) & 5(3) of the Companies (Appointed and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company is appended herewith asAnnexure forming part of this Report.

No commission was paid during the year to the Managing Director/Whole Time Directorfrom the Company or from its subsidiary company.


There are no qualifications reservations or adverse remarks made by the Auditors intheir report.


The Statutory Auditor M/s Haribhakti & Co LLP Chartered Accountants Pune (FirmRegistration No. 103523W) who were appointed to hold office from the conclusion of thisAnnual General Meeting until the conclusion of the Annual General Meeting of the Companyto be held in the FY 2019-2020 subject to ratification by members at every Annual GeneralMeeting. The Company has received under Section 139(1) of the Companies Act 2013 and theRules framed thereunder a certificate of their eligibility and consent forre-appointment. Accordingly the appointment of M/s Haribhakti & Co. LLP CharteredAccountants as Statutory Auditors of the Company is placed for ratification by theMembers.


M/s Harshad S. Deshpande & Associates Cost Accountants were appointed as the CostAuditors of the Company for the year ending March 31 2016. On recommendation of the AuditCommittee the Board of Directors propose the appointment of M/s. Harshad S. Deshpande asthe Cost Auditors of the Company for the Financial Year 2016 -2017. The Cost Auditors haveconfirmed that they are not disqualified for such re-appointment within the meaning ofSection 148 of the Companies Act 2013.


Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhad appointed M/s. N.L. Bhatia & Associates a firm of Company Secretaries in Practiceto undertake the Secretarial Audit of the Company for the Financial Year 2015-16. TheSecretarial Audit Report is given as Annexure VII forming part of this Report.


Your company takes pride in its highly motivated employees who have been contributingtheir best for the success and growth of your Company to aspire to achieve new heightsYour Directors thank and express their gratitude for the support and co-operation receivedfrom State Government / regulatory authorities and stakeholders vendors FinancialInstitutions Banks Investors and service providers.

The Directors thank the Company’s valued and esteemed customers for theircontinued patronage.

Place: Mumbai CHAIRMAN
Date: June 242016 DIN: 01127319