To the Members
The Directors have pleasure in presenting the 23rd Annual Report and AuditedAccounts of the Company for the year ended 31st March 2016.
| || ||(Rs. in Lac) |
| ||2015-16 ||2014-15 |
|Revenue from Operations ||18898 ||25114 |
|Profit before Finance Cost and Depreciation (PBIDT) ||1516 ||1661 |
|Profit before Depreciation and ||1454 ||1561 |
|Profit before Tax (PBT) ||1152 ||1298 |
|Profit after Tax (PAT) ||750 ||851 |
|Surplus brought forward ||1448 ||926 |
|Total amount available for appropriation ||2198 ||1777 |
|APPROPRIATIONS: || || |
|Capital Redemption Reserve ||100 ||- |
|General Reserve ||300 ||65 |
|Dividend (Incl. Tax) ||265 ||264 |
|Surplus carried forward ||1533 ||1448 |
The Directors are pleased to recommend a dividend of 20% on equity shares.
The Revenue from operations decreased to Rs 18898 Lac during the year as compared toRs 25114 Lac in the previous year even though production of products increased by 3% -from 10289 MTs in 2014-15 to 10588 MTs in 2015-16. Significantly lower internationalprices of milk and as a consequence of Skimmed Milk Powder made Indian exports ofSkimmed Milk Powder unviable. This resulted in over supply of Skimmed Milk Powder indomestic market and un-remunerative prices. To counter the situation Company took aconscious decision to cut sale of commodity products like Skimmed Milk Powder and Ghee andgo for value added Job Work for other companies. This proved more remunerative and theCompany could maintain production levels with marginal decline in Profitability. As aresult operating profit (PBIDT) stood at Rs.1516 lac compared to Rs.1661 lac in theprevious year.
Company was able to retain its market share in Dairy Creamer segment with its brandsWHITE MAGIK DAIRY TOP & MILK STAR. Dairy Top continues to maintain its leadership inthe mid segment of dairy creamers. Single serve sachets of 3 and 5 gms of White Magik havefound greater acceptance by Hospitality HORECA segment and Institutional buyers like JetAirways Indian Railways and Defence Services.
Test Marketing of Doodz Flavoured Milk in upcountry markets in the previous year gotencouraging response. Company has widened its supply base to a number of States in Eastand North-East. Company maintained its leadership position in Pre-Mix for tea and coffeevending machines.
Company continued to invest in updating its Plant and R&D facilities. Progress onputting up a captive power generation Plant is on track. Commercial production is likelyto take place in beginning of July 2016. This will significantly lower power and fuelcosts besides ensuring uninterrupted power supply to the Plant.
Company plans to increase production capacity of Drying Plant from present 4.5 laclitres per day to 5.5 lac litres per day. Increased capacity is likely to be available forcommercial production from October/November 2016.
Liquid Milk Plant
Your Company operates and manages a facility owned by another Company to process andpack Liquid Milk in poly pouches for Mother Dairy under a long term agreement. Capacityutilization improved to 93.7% from 89.6% in 2014-15.
INDUSTRY SCENARIO DAIRY INDUSTRY IN INDIA
India continues to be the top producer of milk globally. It is expected that India willcontinue with its leadership position - milk production in India is growing on a fasterclip than global growth. Currently Indian share in global milk production is 18.5% whichis expected to go up to 21% in 2020. In 2014-15 Indian milk production stood at 146.3 MMTsagainst 137.69 MMTs during 2013-14 a growth of nearly 6%. Historically milkproduction during last two decades has been growing at a rate of 3.5 to 4%. (Source:Economic Survey 2014-15 by Government of India Ministry of Agriculture and FarmerWelfare)
All over the world people fulfill approximately 13% of their protein requirement frommilk and milk products. Since ancient times milk has been considered in India as an elixirfor good health. Overall consumption of milk and milk products is projected to growconsistently value added dairy products are currently growing at 15 to 16% and thistrend is expected to continue. Commodity products are expected to grow 5 to 6%.
Contribution of dairy industry to Indias agricultural GDP is highest amongst allagricultural products and stood at 22%. India has the largest bovine population in theworld with a large capacity to process 98.3 million litres of milk per day. Figures showthat out of every rupee spent by consumer on milk farmer gets about 70/ 75 paise. This issignificantly higher than what it is in countries like US Europe and New Zealand wherethe share of milk producer is less than 40% of the consumer spend.
OPPORTUNITIES AND THREATS
(i) With presence of large foreign dairies in India demand of value added milkproducts has gone up. Growth in milk demand is currently reckoned at 6% YOY compared toearlier 4%. This pace seems to be sustainable.
(ii) With some large corporates entering dairy segment structure of dairy industry ismoving from unorganized sector to organized sector. According to Rabo Bank Study nearlyRs.15000 crores is likely to be invested in India in next 5 years.
(iii) Milk is a preferred source of protein in India. Younger generation looks forprotein rich food. Milk and milk products are therefore likely to play a significantrole to meet this demand.
(iv) India is the largest producer of buffalo milk which is a preferred variety of milkfor making certain type of cheese. It offers a good export opportunity for Indian cheesemade of buffalo milk.
(v) From every litre of milk processed nearly 40% is fat - butter and ghee. Recentstudies in US & Europe show that contrary to common belief that ghee consumption addsto obesity and consequently cardio-vascular and neurological diseases it is beneficial tohealth if taken in light quantity. Cholesterol is no more considered a risk factor forheart diseases. This is likely to spur consumption of butter and ghee in a significantmanner.
(i) With pressure on available land from food crops urbanization andindustrialization there is hardly any scope of increasing cultivation of cattle feed.
(ii) With increase in education level of young farmers there is a tendency among theyoung folk to prefer white collar jobs over conventional dairy farming profession.
(iii) Due to fragmented dairy farming in India traceability is an issue with importersfrom USA and EU.
(iv) Present embargo by Govt. of India on import of high milk yielding cows acts as adeterrent to improve productivity of milch cows.
Both milk production as well as demand is growing at a healthy pace of about 6% YOY.Higher rate of growth is likely to be witnessed in value added products (about 15%).Commodity is expected to grow at about 5% YOY. Greater shift is likely to be seen infavour of Western Dairy Products and Packaged Milk. Packaged milk will progressivelyreplace loose milk. A pre-requisite to building an attractive product portfolio is to havea strong supply backbone based on direct procurement of milk from farmers.
EXPANSION AND MODERNIZATION PLANS
Company wishes to become a significant player in Dairy space.
Besides modernization of Plant and R&D facilities Company is planning to expandproduction facility of Drying Plant from present 4.5 lac litres per day to 5.5 lac litresper day. Expanded capacity is likely to be operative by October/ November 2016.
Company is also planning to launch some new products. Work on this exercise isprogressing satisfactorily and some of the products should hit the market in the firsthalf of FY 2016-17.
RISKS & CONCERNS
(i) Government - both Central and States have increased their focus on ensuringsafe food products including milk products to the consumer. This is a step in rightdirection. However due to impractical view taken by Food Inspectors as also lack ofadequate testing equipments in Government Laboratories lot of fear and confusion has beencreated in the minds of Industry as well as consumers. This has to be addressed byGovernment by taking pragmatic approach. FSSAI seems to be alive to the problem and haverecently taken some steps which are likely to address the problem.
(ii) Nearly 50% space is occupied by co-operative sector for whom profit making is notthe objective. Opposite this Private sector has to service capital employed.
(iii) Due to fragmented nature of dairy farming in India milk cannot be guaranteed tobe free from anti-biotics and pesticides.
RAW MATERIAL SECURITY
Company is sanguine about the fact that to sustain a value added product portfolio itis highly imperative to have captive milk bank where milk is collected direct from thefarmers. As it is Company is one of the few ones who have more than two decades oldvillage level collection system under which milk is collected from nearly 300 villagescomprising of about 12000 farmers.
HUMAN RESOURCE MANAGEMENT/ INDUSTRIAL RELATIONS
The Company recognizes the contribution and importance of its employees in todayshighly competitive environment and has been systematically developing their skills andempowering its employees. People are encouraged to take on new roles and expand theirhorizons. Training needs at different levels are identified through Performance AppraisalSystem and need based training programmes are regularly organized for all level ofemployees. In order to encourage leadership and problem solving qualities among workmenthe Company has helped establish Quality Circles. A number of job rotations are done toenhance employees skills as well as to enrich their work experience.
Industrial Relations remained cordial throughout the year under review.
INTERNAL CONTROL SYSTEM
Internal audit by corporate audit team consisting of Chartered Accountants as well asan external firm of Chartered Accountants is in place and carries out their job atpredetermined frequency. Their task is toauditinternalcontrolsystemsfinancialtransactions and statutory compliances. Findings/audit reports along with the action taken reports are reviewed by the Audit Committee. TheAudit Committee also reviews the effectiveness of Companys internal controls andregularly monitors implementation of audit recommendations.
The Company has in place adequate internal controls commensurate with the size andnature of its operations.
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return as on 31st March 2016 in the prescribed form MGT-9 isattached as Annexure-1 to this Report and forms part of it.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The particulars of loans guarantees or securities and investments covered under theprovisions of Section 186 of the Companies
Act 2013 are given in the financial statements.
RELATED PARTY TRANSACTIONS
During the financial year ended 31st March 2016 all the contracts orarrangements or transactions entered into by the Company with the Related Parties were inthe ordinary course of business and on arms length basis and were in compliance withthe applicable provisions of the Companies Act 2013 and SEBI (Listing Obligations &Discloure Requirements) Reguations 2015. Further the Company has not entered into anycontract or arrangement or transaction with the Related Parties which could be consideredmaterial in accordance with the Policy of the Company on materiality of Related PartyTransactions. In view of the above disclosure in FORM AOC-2 is not applicable.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Smt. Sharda Devi Singhania was appointed as Non Executive Director of the Company bythe Members at the Annual General Meeting (AGM) of the Company held on 29th September2015. She retires by rotation and being eligible offers herself for re-appointmentat the ensuing AGM.
Shri R.L. Saha who was the Independent Director of the Company passed away on 15thAugust 2015. Shri R.L. Saha was highly knowledgeable and guided the Company in variousmatters and took keen interest in the development and progress of the Company. TheDirectors placed on record their profound grief on the passing of Shri R.L. Saha.
Shri Milan Wahi ceased to be Chief Executive Officer of the Company on the close ofwork on 7th August 2015. Consequent upon his resignation the Company has appointed Shri C.Venugopal Chief Executive Officer of the Company w.e.f. 18th January 2016.
Shri Gaurav Kumar Kanodia ceased to be Company Secretary of the Company on the closeof work on 30th January 2016. Consequent upon his resignation the Company has appointedShri Pankaj Kamra Company Secretary of the Company w.e.f. 11th February 2016.
Shri R.C. Jain is proposed to be reappointed as Independent Director of the Company fora period of five years by the Members at the ensuing AGM of the Company.
CORPORATE SOCIAL RESPONSIBILITY
The Company has requisite Corporate Social Responsibility (CSR) Policy in accordancewith the provisions of the Companies Act 2013 and rules made there under. The contents ofthe CSR Policy are disclosed on the website of the Company.
A detailed report on Companys CSR activities along with the annual report on theCSR activities undertaken by the Company during the financial year under review in theprescribed format is annexed to this Report as Annexure-2.
(a) Statutory Auditors and their Report
M/s Lodha & Co. Chartered Accountants have been appointed as Auditors of theCompany to hold the office from the conclusion of the 21st AGM held on 22ndSeptember 2014 until the conclusion of the 24th AGM to be held in year 2017subject to ratification of the appointment by the members at the respective AGMs.Accordingly matter relating to the appointment of the Auditors will be placed forratification by members at the forthcomingAGM. The observations of the Auditors in theirreport on Accounts and the Financial Statements read with the relevant notes are selfexplanatory.
(b) Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act 2013 the Board ofDirectors appointed Shri Namo Narain
Agarwal Company Secretary in Practice as Secretarial Auditor to carry out SecretarialAudit of the Company for the financial year 2015-16. The Report given by him for thesaidfinancialyear in the prescribed format is annexed to this Report as Annexure-3. TheSecretarial Audit Report does not contain any qualification reservation or adverse remark
(c) Cost Auditor and Cost Audit Report
The Cost audit for the year ended 31st March 2016 is being conducted by M/sSanjay Kumar Garg & Associates Cost Accountants and the report will be submitted tothe Ministry of Corporate Affairs Government of India.
M/s Sanjay Kumar Garg & Associates Cost Accountants have been appointed as CostAuditors of the Company to conduct cost audit of cost records for the financialyear2016-17 subject to ratification of their remuneration at the forthcoming AGM of theCompany.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the financial year under review there were no significant
Tribunals which would impact the going concern status of the Company and its futureoperations.
CONSERVATION OF ENERGY ETC.
The details as required under Section 134(3)(m) read with the Companies (Accounts)Rules 2014 is annexed to this Report as Annexure-4 and forms part of it.
PARTICULARS OF REMUNERATION
Disclosure of the ratio of the remuneration of each director to the medianemployees remuneration and other requisite details pursuant to Section 197 (12) ofthe Companies Act 2013 read with Rule 5 (1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended is annexed to this Report asAnnexure-5. Further during the year under review there were no employees pursuant toSection 197 (12) of the Companies Act 2013 read with Rule 5 (2) & (3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended.
Corporate Governance - including details pertaining to Board Meetings Nomination andRemuneration Policy Performance Evaluation Risk Management Audit Committee and VigilMechanism:
Your Companyreaffirmsits commitment to the highest standards of corporate governancepractices. Pursuant to Regulation 34 (3) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a Management Discussion and Analysis CorporateGovernance Report and Auditors Certificate regarding compliance of part of this Report.
The Corporate Governance Report which forms part of this Report also covers thefollowing:
a) Particulars of the Four Board Meetings held during the financial year under review.
b) Policy on Nomination and Remuneration of Directors Key Managerial Personnel andSenior Management including inter alia the criteria for performance evaluation ofDirectors.
c) The manner in which formal annual evaluation has been made by the Board of its ownperformance and that of its Committees and individual Directors.
d) The details with respect to composition of Audit Committee and establishment ofVigil Mechanism.
e) Details regarding Risk Management.
The Company has not taken any deposits from the public.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Companies Act 2013 your Directors statethat:-
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(b) the accounting policies have been selected and applied consistently and judgmentsand estimates made are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the profit of theCompany for that period;
(c) proper and sufficientcare has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the said Act for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis; the Company
(e) have theinternalfinancial been laid down and that such internal financialcontrols are adequate and were operating effectively; and (f) the proper systems to ensurecompliance with the provisions of all applicable laws have been devised and that suchsystems were adequate and operating effectively.
Management Discussion and Analysis Report contains forward looking statements which maybe identified by the use of words in that direction or connoting the same. All statementsthat address expectations or projections about the future including but not limited tostatements about the Companys strategy for growth product development marketposition expenditures and financial results are forward looking statements.
These are based on certain assumptions and expectations of future events. The Companycannot guarantee that these assumptions and expectations are accurate or will be realized.The Companys actual results performance or achievement could thus differ materiallyfrom those projected in any such forward looking statements. The Company assumes noresponsibility to publicly amend modify or revise such forward looking statements on thebasis of any subsequent development information or events.
The Directors wish to thank its Customers Shareholders Banks Dealers Suppliers andGovernment Authorities for their continued support.
The Board also places on record its sincere appreciation of the hard work put in bythe employees at all levels during the period under report.
| || ||On behalf of the Board of Directors |
|Place : New Delhi ||D.B. DODA ||R.C. Periwal |
|Date : 03rd August 2016 ||(Director) ||(Director) |
CORPORATE SOCIAL RESPONSIBILITY REPORT
1. Companys CSR Philosophy and Belief
Umang Dairies endeavours to create communities that are economically viable andsocially inclusive. Our CSR programmes are thus a participatory exercise designed toprovide better livelihood opportunities. We also support all National Programs that areaimed at uplifting the status of women livelihood support through micro enterprisesenabling access to healthcare sanitation and education.
2. CSR Policy
The Company has been focussing on inclusive growth and it has been undertakingactivities aimed at welfare of the society in the areas pertaining to Dairy InterestsGroups 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 Act2013. The details of the CSR Policy has been posted on the website of the Company and theweb-link for the same is http://www.umangdairies.com/ CSRPolicy.pdf
3. ANNUAL REPORT ON THE CSR ACTIVITIES UNDERTAKEN BY THE COMPANY DURING THEFINANCIAL YEAR ENDED
31 ST MARCH 2016
The CSR at UDL is focussed on creating economic and social well being of thecommunities around our plant in Gajraula milk farming traditionally has been a vitalcomponent of the local economy and has been a major source of income for the poor &landless.
The CSR strategy thus identified two key interventions: a) provide services forsuperior animal breeding & nutritional feeds that generate higher yields per animaland enhanced milk producing life cycle. b) enable formation of women DIGs anintervention that not only creates income opportunities but also empowers them socially.
The company also continued with its traditional interventions like Adult Educationorganizing health & blood donation camps for the general population tree plantationetc.
UDL also sponsored an event- International Womens Day 2016- organized by anothercompany. It distributed 100ml of Umang Ghee to more than 1100 women who participated inthis event.
Specific Highlights in each of the activities are provided below:
Dairy Interest Groups
75 DIGs comprising 775 women were formed (this includes 15 in the previousyear).
Villages covered 20.
45 DIGs were linked to the banks.
20 DIGs were provided with first training on five important aspects ofgroup formation viz. why DIG monthly meeting book keeping bank & credit linkage& role of DIG leaders.
15 DIGs were made eligible for revolving fund & their documentssubmitted.
4 DIGs comprising of more than 40 women exposed to milk processing througha factory visit.
Meeting with DDM NABARD for a partnership with UDL to expand and strengthen theDIG footprint in the villages that
UDL is working in.
298 women were enrolled
247 successfully completed the course.
One new center opened at village Akhtyarpur.
Vaccination camp organized with government hospital to prevent HS disease.
Healthcare & Sanitation
3 general health camps were organized.
Awareness & advocacy meetings with women on sanitation & hygieneroutinely undertaken.
Going forward plans to double the number of DIGs to 150 in FY 2016-17 inpartnership with NABARD & NRLM have been firmed up.
4. The Composition of the CSR Committee:
The CSR Committee comprises of the following Directors:
Shri R. C. Periwal (Chairman of the Committee) Independent Director
Shri R. C. Jain Independent Director
Shri D. B. Doda Non-independent Director
5. Average Net Profit of the Company for last three financial years: Rs. 674Lac.
6. Prescribed CSR Expenditure (two percent of the amount as in item 5 above):
Rs. 13.48 Lac
7. Details of CSR spent during the financial year a. Total amount to be spent forfinancial year : Rs. 13.74 Lac b. Amount unspent if any : Nil c. Manner in which theamount spent during the financial year is detailed below:
|1 ||2 ||3 ||4 ||5 ||6 ||7 ||8 |
|Sl. No. ||CSR Project or Activity identified ||Sector in which the project is covered ||Projects or programs (1) Local area or other (2) Specify the State and district where projects or programs was undertaken ||Amount outlay (budget) project or programs wise (Rs. in Lac) ||Amount spent on the projects or programs Sub-heads: (1) Direct expenditure on projects or programs. (2) Overheads: (Rs. in Lac) ||Cumulative expenditure upto the reporting period. (Rs. in Lac) ||Amount spent: Direct or through implementing agency |
|1 ||Initiative for Employability & Livelihood enhancement activities (DIGs) ||Promoting education including special education and employment enhancing vocational skills especially among children women elderly and the differently abled and livelihood enhancement projects; ||Gajraula Uttar Pradesh ||9.94 ||9.94 ||9.94 ||Implementing Agency |
|2 ||International Womens Day ||Promoting education including special education and employment enhancing vocational skills especially among children women elderly and the differently abled and livelihood enhancement projects; ||Gajraula Uttar Pradesh ||1.74 ||1.74 ||1.74 ||Direct |
|3 ||Adult Literacy ||Promoting education including special education and employment enhancing vocational skills especially among children women elderly and the differently abled and livelihood enhancement projects; ||Gajraula Uttar Pradesh ||1.58 ||1.58 ||1.58 ||Direct |
|4 ||Miscellaneous Expenses ||Promoting education including special education and employment enhancing vocational skills especially among children women elderly and the differently abled and livelihood enhancement projects; ||Gajraula Uttar Pradesh ||0.22 ||0.48 ||0.48 ||Direct |
| || ||Total || ||13.48 ||13.74 ||13.74 || |
8. The CSR Committee confirms that the implementation and monitoring of CSRPolicy is in compliance with CSR objectives and Policy of the Company.
| ||(D. B. Doda) ||(R. C. Periwal) |
|Date : 12 th May 2016 ||Director ||Chairman CSR Committee |
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016
[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
Umang Dairies Limited
Gajraula-Hasanpur Road Gajraula 244235 Dist. Amroha Uttar Pradesh
I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Umang Dairies Limited(hereinafter called the Company). Secretarial Audit was conducted in a mannerthat provided me a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing my opinion thereon.
Based on my verification of the Companys books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit I hereby report that in my opinion the Company has duringthe audit period covering the financial year endedon 31st March 2016 (AuditPeriod) complied with the statutory provisions listed hereunder and also that the Companyhas proper Board-processes and compliance-mechanism in place to the extent in the mannerand subject to the reporting made hereinafter:
I have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31 st March2016 according to the provisions of:
(i) The Companies Act 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act 1956 (SCRA) and the rulesmade thereunder;
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;
(v) The following Regulations and Guidelines Prescribed Under the Securities andExchange Board of India Act 1992 ('SEBI Act') :
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;
(d) The Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014 - (Not applicable to the Company during the Audit Period);
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008- (Not applicable to the Company during the Audit Period);
(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009- (Not applicable to the Company during the Audit Period)
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998- (Not applicable to the Company during the Audit Period); and (i) The Securities andExchange Board of India (Listing Obligations and Disclosures Requirements) Regulations2015.
(vi) Management has identified and confirmed the following laws as being specificallyapplicable to the company and complied with:- - UP Milk Act 1976 - UP Milk and MilkProducts Order 1977 - Water (Prevention and Control of Pollution) Cess Act 1977
- UP Krishi Utpadan Mandi Samiti Adhiniyam 1964 - Food Safety and Standards Act 2006
- Agricultural and Processed Food Products Export Act 1986 - Agricultural Produce(Grading and Marketing) Act 1937
I have also examined compliance with the applicable clauses of the following:
(i) Mandatory Secretarial Standard 1 and Secretarial Standard 2 issued by the Instituteof Company Secretaries of India
(ii) The Listing Agreement(s) entered into by the Company with the Stock Exchanges.
During the period under review the Company has complied with the provisions of theActs Rules Regulations Guidelines Standards etc. as mentioned above.
I further report that:
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors one of whom is anOccupier. The changes in the composition of the Board of Directors that took place duringthe period under review were carried out in compliance with provisions of the Act.Adequate Notice is given to all directors to schedule the Board Meetings. Agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the Meeting.
All decisions at Board Meetings and Committee Meetings are carried out unanimously asrecorded in the Minutes of the Meetings of the Board of Directors or Committee of theBoard as the case may be.
I further report that based on review of compliance mechanism established by theCompany and on the basis of compliance certificates issued by the Company Executives andtaken on record by the Board of Directors and Audit Committee at their meetings there areadequate systems and processes in the Company commensurate with the size and operations ofthe Company to monitor and ensure compliance with applicable laws rules regulations andguidelines.
I further report that during the audit period the Company had the Listing of itsEquity shares on National Stock Exchange w.e.f. 2 December 2015
| ||Namo Narain Agarwal |
|Place: New Delhi ||Secretarial Auditor |
|Date : 11th May 2016 ||FCS No. 234 CP No. 3331 |
This report is to be read with our letter of even date which is annexed as AnnexureA and forms an integral part of this report.
Umang Dairies Limited
Gajraula-Hasanpur Road Gajraula 244235 Dist. Amroha Uttar Pradesh
My report of even date on Secretarial audit for the financial year ended 31stMarch 2016 is to be read along with this letter stating that -
1. Maintenance of secretarial record is the responsibility of the management of thecompany. My responsibility is to express an opinion on these secretarial records based onmy audit.
2. I have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. I believe that the processes and practices I followed provide areasonable basis for my opinion.
3. I have not verified the correctness and appropriateness of financial records andBooks ofAccounts of the company.
4. Where ever required I have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. My examination was limited tothe verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.
| ||Namo Narain Agarwal |
|Place: New Delhi ||Secretarial Auditor |
|Date : 11th May 2016 ||FCS No. 234 CP No. 3331 |
Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings & Outgo in terms of section 134 (3) (m) of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 and forming part of Directors Report to the membersfor the year ended 31st March 2016.
A) CONSERVATION OF ENERGY:
(i) The steps taken or impact on conservation / alternate source of energy:-
(a) Variable Frequency Drive (VFD): VFD has been fitted with screw compressor (KC 6) tosave electrical power. (Saved
154800 KWH annually).
(b) High Mast tower: High mast tower light installed in power plant (Savings 6950 KWHannually).
(c) Conveying system for Flavoured Milk: SS Slat and Belt conveying installed forPacking Material and Finished Goods Stock conveyer. (Savings 31764 KWH annually).
(d) Air curtain automation: Air curtain automation done (Savings 20500 KWH annually).
B) TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION:-
Following projects have been initiated and completed during Financial Year 2015-16:-
1. New powder packing machine :
New high speed powder packing machine (Nichrome) commissioned. This will reduce thepacking cost.
2. Packing speed increased :
Packing speed of two packing machines (RT-12 Ghee packing) and (RT-50 Powder packing)increased by 40% and 25% respectively.
3. ETP flow meter and Camera installation:
Online Flow meter and camera installation completed for better monitoring and also tomeet CPCB guidelines.
C) Research & Development
The Company spent Rs. 1.36 Lac on R&D during the year.
In our R & D Wing we are working on development of new products to enhance ourProduct Basket in the market and also on value engineering for quality improvement andcost reduction in existing product basket. During the year the following products havebeen developed in different categories:-
1. New Variants in Flavoured Milk.
2. Water Beverages Jaljeera & Aampana.
3. Rabri - Milk based sweet
4. Sterilized Paneer in Tin Packet
The team is also working on some new products like Gulab Jamun Mix Sugar free dairywhitener and Fruit Juices.
D) Foreign Exchange Earnings and Outgo
| ||(Rs. in Lac) |
|Foreign Exchange earned ||640.81 |
|Foreign Exchange used ||9.35 |
Disclosure pursuant to Section 197(12) of the Companies Act 2013 read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended vide MCA Notification dated 30th June 2016 for the Financial Year2015-16 ended 31st March 2016:
A. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year 2015-16.
|SI. No. ||Directors ||Ratio to median Remuneration* |
|1. ||Shri R.C. Periwal ||1.78 |
|2. ||Shri D.B.Doda ||1.42 |
|3. ||Shri R.C.Jain ||1.29 |
|4. ||Shri R.L.Saha** ||0.26 |
|5. ||Smt. Sharda Devi Singhania ||0.15 |
* Only sitting fee paid to Directors.
** Shri R.L. Saha Independent Director passed away on 15.08.2015.
B. The percentage increase in remuneration of each director chief financial officercompany secretary or manager in the financial year 2015-16 - The increase in theFinancial Year 2015-16 in remuneration of Sh. R. C. Periwal No Increase; Sh. D. B. DodaNo Increase; Sh. R. C. Jain 7.14%; Sh. Milan Wahi Chief Executive Officer NotApplicable (Ceased w.e.f. 07th August 2015); Sh. C. Venugopal Chief ExecutiveOfficer Not Applicable (Appointed w.e.f. 18th January 2016); Sh. N.C. BahetiManager 23.05%; Sh. Gaurav Jain Chief Financial Officer 16.97%; Sh. Gaurav KumarKanodia Company Secretary12.04% (Resigned w.e.f. 30th January 2016) and Sh.Pankaj Kamra Company Secretary Not Applicable (Appointed w.e.f. 11th February2016). Information pertaining to Shri R.L. Saha Director and Smt. Sharda Devi SinghaniaDirector is for part of the year and the same is not comparable. The Remuneration paid toDirectors and KMP is available at para VI of Form MGT-9 annexed to this report.
C. The percentage increase in the median remuneration of employees in the financialyear:16%
D. The number of permanent employees on the rolls of Company as on 31st March2016: 246
E. Average percentage increase made in the salaries of employees other than themanagerial personnel in the financial year 2015-16 was 11.30% whereas the increase in themanagerial remuneration for the same financial
The said increase was due to usual annual increment in the remuneration of themanagerial personnel.
F. We affirm that the remuneration paid during the year 2015-16 is as per theRemuneration Policy for Directors Key
Managerial Personnel and Senior Management of the Company.