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Parag Milk Foods Ltd.

BSE: 539889 Sector: Agri and agri inputs
BSE 00:00 | 22 Apr 241.90 -2.40






NSE 00:00 | 22 Apr 241.60 -2.60






OPEN 244.50
VOLUME 25726
52-Week high 414.95
52-Week low 197.00
P/E 18.91
Mkt Cap.(Rs cr) 2,035
Buy Price 240.30
Buy Qty 48.00
Sell Price 244.50
Sell Qty 13.00
OPEN 244.50
CLOSE 244.30
VOLUME 25726
52-Week high 414.95
52-Week low 197.00
P/E 18.91
Mkt Cap.(Rs cr) 2,035
Buy Price 240.30
Buy Qty 48.00
Sell Price 244.50
Sell Qty 13.00

Parag Milk Foods Ltd. (PARAGMILK) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the Twenty Sixth Annual Report ofthe Company together with the Audited Financial Statements

(Standalone and Consolidated) for the financial year ended 31 March2018.


The comparable financial performance of the Company (Standalone &Consolidated) for the Financial year ended 31 March 2018 is summarized as under:

(Rs In Million)




FY 2017-18

FY 2016-17

FY 2017-18

FY 2016-17

Revenue from Operations





Other Income





Total Income





Profit before Tax before exceptional items





Exceptional Items





Profit from ordinary activities before tax





Less:- Tax expenses





Profit After Tax (PAT)





Dividend on equity shares(including tax on dividend)





Earnings per Share










Figures for FY 2016-17 have been restated as per Ind AS and thereforemay not be comparable with financialsfor FY 2016-17 approved by the Directors anddisclosed in the financial statement of previous year.


The Ministry of Corporate Affairs (MCA) on 16 February 2015 notifiedthat Indian Accounting Standards (Ind AS) are applicable to certain classes of companiesfrom 1 April 2017 with a transition date of 1 April 2016. Ind AS has replaced theprevious Indian IGAAP prescribed under Section 133 of the Companies Act 2013 ("theAct") read with Rule 7 of the Companies (Accounts) Rules 2014. Ind AS is applicableto the Company from 1 April 2017. The effect of the transition from IGAAP and Ind AS hasbeen explained by way of a reconciliation in the standalone financial statements andconsolidated financial statements.


The Highlights of the Company's Performance (Standalone) for theYear Ended 31 March 2018 are as under:

Revenue from operations increased by 12.76% to Rs 19181.18 millionfrom Rs 17010.85 million in previous year. Profit before Tax was Rs 1076.23 million ascompared to a loss of Rs 94.26 million in the previous year. Profit after Tax was Rs784.80 million in comparison to a loss of Rs 17.63 million in the previous year.

Financial Performance Review and Analysis (Consolidated)

The Company achieved a consolidated turnover of Rs 19545.06 millionfor the year ended 31 March 2018 resulting in an increase of 12.90% as compared to Rs

17307.39 million in the previous year. Increase in revenue isprimarily on account of growth in value added products and product mix. Profit after taxon consolidated basis was Rs 870.56 in comparison to Rs 47.56 million in the previous yearon account of gross margin expansion and operational efficiency.


The Board of Directors is pleased to recommend a final dividend of Rs0.75/- per equity share of face value of Rs 10/- each for the financial year ended 31March 2018 payable to those Member's whose names appear in the register of Membersas on the Record date amounting to Rs 75.85 million (inclusive of dividend distributiontax of Rs 12.93 million.

The final dividend is subject to the approval of Members at the ensuingAnnual General Meeting (AGM).


The Company did not transfer any sum to the General Reserve for thefinancial year under review.


Parag Milk Foods Limited (PMFL) is India's leading manufacturerand marketer of branded dairy foods and beverages based on 100% cow milk. The Companystarted off with collection and distribution of milk in 1992 and over the years it hasevolved as India's largest dairy FMCG player by developing a large portfolio of dairyand value-added products with a strong focus on health and nutrition. The Company hasdiverse range of products like cheese ghee fresh milk whey proteins paneer curdyoghurt milk powder and dairy based beverages targeting a wide range of consumer groupsunder the brands Gowardhan Go Topp Up Pride of Cows Avvatar Milkrich and Slurp.

Innovation has been an essential driver of the Company's progress.It has transformed the way the Company meets the consumer demands by consistentlyintroducing innovative categories. Besides products that it has have re-definingalso brought in innovation across its integrated business value chain strengtheningCompany's competitiveness. The Company has built a strong portfolio of value-addedproducts to stay in sync with the evolving consumer preferences. The financial year2017-18 was ruled by several innovative and new product launches line extensionsconsumer engagement supply chain enhancements brand building and most importantly anenhanced focus on health and nutrition segment. To strengthen the company's presencein north region we have introduced fresh dahi. With this launch we have expanded ourgeographical reach and have entered into Rs 1500 cr curd market of Delhi. The Northernregion contributes ~33% of curd consumption in India. We have also launched Mishti Doiwhich is nutritionally rich in protein. We believe the addition of Mishti Doi to ourproduct portfolio will further build up the Gowardhan Dahi category. This traditionalBengali dessert is a delicious way to end every meal. We have launched Gowardhan Paneer asa fresh paneer category with a shelf life of 75 days and is made from 100 % cows'milk. It is a rich source of proteins and vitamins. Being the 1st mover we intend tocreate Branded category of fresh Paneer and rule the market as category leader. It isunadulterated and despite of 75 days of shelf life it is free from preservatives andadditives. This is the only product which has used ESL technology.

As we call ourselves "The Cheese People" and innovation is inour DNA. We have helped in developing and expanding the cheese market through the launchof several one-of-its-kind products like Cheese slices in the flavours of Green chutney(Mint leaves) Schezwan Piri-Piri Cheese spreads in the flavours of Smoked PaprikaHerbs and Olives Garlic Spice and Gourmet cheese amongst others in the past. Tocontinue the legacy this year we have launched G0 Cheese Cubes and Go Chocolate Cheesethis year. Go chocolate cheese is the unique variant - a product that combines the tasteof chocolate in the form of cheese.

With a mix of tasty and healthy Go Chocolate Cheese is a distinctiveproduct specially introduced to satiate the consumers' changing preferences while atthe same time to provide nutrition to kids. ‘Go Cheese Cubes' are creamy tastyand are all natural with no preservatives making it suitable even for health consciousconsumers. It is a rich in calcium and milk protein. With the launch of ‘Go CheeseCubes' our aim is to cater to the growing retail segment by providing amass-consumption item like cheese cubes which is versatile in terms of applications. Weare confident that this product will help us strengthen our distribution network in tierII & tier III markets where the penetration of cheese is increasing rapidly In thewhey protein segment the Company widened its product offerings under the Avvatar brand bylaunching Advance Muscle Gainer. Advanced Muscle Gainer is the 1st Gainer in India to getInformed-Sports certification from WADA approved lab in UK confirming that it is bannedsubstance free making it a perfect product for consumers and athletes.It is a healthybalance of freshest blend of protein and carbohydrates to help consumer gain lean musclemass. Each 60g scoop offers highest protein (25.5g) in mass gainer segment along with 24gcarbohydrates and naturally occurring 5.7g BCAA and 4.3g glutamic acid. It is a rightblend of Protein-Carb Matrix Whey Protein Concentrate and Isolate Casein Maltodextrinand Dextrose specially designed for Indian consumers understanding Indian diet patterns.It has No added sugar which ensures that all the required calories comes from good qualityProtein-Carb matrix. It is enriched with 21 vital vitamins and minerals to support overallwell-being and growth To strengthen the presence in north we have acquired themanufacturing unit of Danone Foods and Beverages India Pvt Ltd. the local entity ofFrench dairy firm Danone SA. The acquisition will strengthen the Company'sdistribution of fresh category products like milk dahi paneer yogurt in the Northernand Eastern regions of India which is largely dominated by buffalo milk consumption. Thismove will bring us closer to the end consumer and will give us an edge to understand theconsumer preferences in northern India. The plant is spread across 5500 square meters onthe outskirts of Delhi NCR. Its current milk processing capacity is 0.75 LLPD (lakh litreper day) along with curd processing capacity of 15 tonne. We aim to educate farmers onbest practices and help enhance their income. Initially we have associated with over 2000farmers (to procure cows milk) and we will keep on adding to these numbers going forward.

During the year the Company laid strong emphasis on enhancing thesupply-chain management and distribution network. The Company also appointed a consultinggroup to optimise its distribution model through the concept of

‘Theory of Constraints'. It allowed the Company to improvethe distribution reach with lower stock outs reducing non-moving inventory and betterrationalisation of inventory at dealers retailers and the company level. The roll out ofSFA (sales force automation) and DMS (distribution management system) will furtherstrengthen the distribution network. We have also strengthened our leadership team withstrategic hirings and created new positions including Chief Operations

Officer and Chief Commercial Officer (CCO). All these senior executivesare seasoned professionals with long stints in the FMCG sector. As a strategy we arefocusing on becoming a strong national FMCG dairy company and putting more emphasis ongrowing our consumer business. With the support of the new senior leadership team we areaiming at a double digit growth this fiscal.

Export Market

PMFL enjoys a strong reputation and brand recall across severalgeographies through its exports across UAE Singapore Oman Kuwait Mauritius NewZealand Australia Congo Seychelles Iraq Hong Kong Philippines Sri Lanka UAE andBangladesh. During the year the Company recorded an export turnover of was 596.43 millionas against 568.22 million last year increasing ~5% during the year.

Bhagyalaxmi Dairy Farm Pvt. Ltd.

Bhagyalaxmi is India's first modern approximately 2500 HolsteinFrieisan cows equipped with state-of-the-art technology for feeding milking andprocessing of fresh milk. It is PMFL's subsidiary with a production capacity ofapproximately 30000 LPD. It produces "Farm- to-Home" premium milk under thebrand name of "Pride of Cows" (POC). Over the years the brand has gained demandfrom the markets due to its unique characteristics like fresh untouched and unadulteratedmilk. Being fully automated without any human intervention the quality and safety of themilk has been accepted by our 20000 households in Mumbai Pune and Surat. The farm alsooperates as a R&D centre for dairy farming in India that educates farmers on bestpractices in animal feeding rearing and milking for improving their cows'productivity. PMFL also created a bioscience division with the aim of converting wasteinto developing cattle feed and organic manure for farmers.

Future Prospects

The Company enjoys strong partnerships with top institutional buyers inthe country and will continue to deliver quality-consistent customised productrequirements.

The Company is bullish about its prospects in the health and nutritionsegment. With the launch of its first 100% natural immunity booster called ‘GO ColoPower' in July 2018 the Company has further strengthened its offerings in the health& nutrition segment which further reiterates its leadership in the value-addedproducts category.

Colo Power is made from the first milk of cows just after calving andis enriched with immunoglobulins and probiotics and has the same goodness equivalent tothat of a mother's first milk. The colostrum helps to build long-term immunity andimproves and strengthens the digestive system. With the ongoing investments in solidifyingthe supply chain management the Company is hopeful of expanding its distribution reach tothe untapped markets as well as improve existing distribution efficiency and productivity.


During the year under review there was no change in the Equity ShareCapital of the Company.

The Authorised Share Capital of the Company is Rs 1000000000/- madeup of 100000000 Equity Shares of Rs 10/- each and the Issued Subscribed and Paid UpShare Capital remains Rs 841145820/- made up of 84114582 Equity Shares ofRs 10/- each.The Company has not issued shares with differential voting rights nor granted any stockoptions or sweat equity during the year under review. None of the Directors of the Companyhold instruments convertible into equity shares of the Company. Material Changes andCommitments affecting the Financial Position of the Company which have occurred Betweenthe end of the Financial Year of the Company to which Date the

Financial Statement relate and Date of the Report. farm consistingof I.During the year the Company sought approval of Members by way of Special Resolutionsthrough Postal Ballot as required pursuant to Section 110 of the Act read with Rule 22 ofthe Companies (Management and Administration) Rules 2014 (the "Act") for thefollowing Special Resolutions.

1. Re-classification of IRIS Business Solutions Private

Limited from Promoter Category to Public Category; and

2. Increase of Investment Limit by Non-Resident Individuals to 24% ofthe Paid up Equity Capital of the Company.

The resolutions were approved by the requisite majority and were deemedto have been passed on Monday 9 April 2018. II. Acquisition of manufacturing plant fromDanone Foods and Beverages India Private Limited ("the Seller") which is part ofthe global food products multinational corporation headquartered in Paris (hereinafterreferred to as "Danone). The Company has acquired Danone's factory situated atPlot No. 2266-2268 Food Park Phase -2 HSIIDC Industrial Estate- Rai SonipatHaryana-131029

; and proposes to spend additional capex for further expansion to becarried out in it.


As on 31 March 2018 the Company has one Wholly Owned Subsidiarycalled Bhagyalaxmi Dairy Farms Private Limited (BDFPL) which is located at Manchar Pune.BDFPL which is fully automated cow farm housing over 2500 Holstein Friesian cows withsuperior quality yield. BDFPL was established with the aim to educate farmers about bestpractice of breeding feeding animal management and improving productivity. BDFPL'stotal revenue Stood atRs 832.45 Mn in FY 17-18 in comparison to Rs 517.98 Mn in FY 16-17.BDFPL made Profit Rs 85.78 Mn After Tax of for FY 17-18 in comparison to Rs 65.19 Mn in FY16-17.

The accounts of the Subsidiary are also uploaded on the website of theCompany at www. Pursuant to the provisions of Section 129 of theCompany's Act 2013 read with Rule 5 of the Companies (Accounts) Rules 2014 aseparate statement containing the salient features of the financial statements of theSubsidiary Company in the prescribed format

AOC-1 is appended as Annexure - I to this Report.


The Consolidated Financial Statements of the Company for the

FY 2017-18 are prepared in accordance with the requirements of IndianAccounting Standards AS 110 (read with IND AS 28) issued by Central Government undersection 133 of the Companies Act 2013 read with the Companies (Indian AccountingStandards) Rules 2015 the Listing regulations the

Audited Consolidated Financial Statements of the Company forms a partof this Annual Report.


Retirement by rotation and subsequent re-appointment

Pursuant of the provisions of Section 152 of the Act Mr. B.M.VyasNon-Executive Director (DIN-00043804) is liable to retire by rotation at the ensuing AGMand being eligible offers himself for re-appointment. i. Mr. Bharat Kedia resigned w.e.f10 July 2017 as Chief Financial Officer (Key Managerial Personnel) of the Company.Pursuant to the recommendation of the Nomination and Remuneration Committee and AuditCommittee Mr Vimal Agarwal has been appointed as Chief Financial Officer (Key ManagerialPersonnel) of the Company w.e.f 21 December 2017. ii. Mr. Pritam Shah (DIN- 01127247) hasbeen re- appointed as Managing Director and Mr. Devendra Shah (DIN-01127319) has beenre-appointed as Whole-time Director respectively for a further term of 5 yearsw.e.f 1 April 2018 to 31 March 2023 subject to the approval by the Members in theensuing AGM. iii. Mrs. Rachana Sanganeria is the Company Secretary and Compliance Officerof the Company as on 31 March 2018 Pursuant to Regulation 36(3) of the ListingRegulations the brief profile of the Directors eligible for re-appointment forms part ofthe Notice of the AGM.


Pursuant to Section 134(3)(d) of the Act the Company has receiveddeclaration from all the Independent Directors confirming that they meet the criteria ofIndependence as laid down under Section 149(6) of the Companies Act 2013 read with theSchedules and Rules issued thereunder as well as

Regulation 16(1)(b) of the Listing Regulations.


Appointment and Remuneration of Directors is in accordance with theNomination and Remuneration Policy formulated in accordance with Section 178 of theCompanies Act 2013 and Regulation 19 of the Listing Regulations (including any statutorymodification(s) or re-enactment(s) thereof for the time being in force is available on thewebsite of the Company at

The information required under Section 197 of the Companies Act 2013read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014(including any statutory modifications(s) thereof in respect of Directors/ employees ofthe Company is set out in this report. No commission was paid during the year to theManaging Director/Whole Time Director from the Company or from its subsidiary company.


Pursuant to the provisions of the Companies Act 2013 read with Rulesthereunder and the Corporate Governance requirements as prescribed under ListingRegulations the Board has carried out an annual evaluation of its own performance andthat of its committees as well as the performance of the Directors individually.

The performance of the Board and individual Directors was evaluated bythe Board seeking inputs from all the Directors. The performance of the Committees wasevaluated by the Board seeking inputs from the Committee Members. The Nomination andRemuneration Committee reviewed the performance of the individual Directors . A separatemeeting of Independent Directors was held on 24 March 2018 chaired by Mr. Ramesh ChandakIndependent Director pursuant to Schedule IV of the Act and the Listing Regulations.This was followed by the Board Meeting that discussed the performance of the Board itsCommittees and the Individual Directors.

The criteria for performance evaluation of the Board includedcomposition and structure of the Board & Committee(s) attendance of Directors atBoard and committee meetingsparticipation at meetings domain knowledge cohesion in theBoard's meeting awareness and observance of governance constructive contributionand inputs in the meetings and decision making process and effectiveness of Boardprocesses etc.


In compliance with the requirements of the Listing Regulations theCompany has put in place familiarization programme for the Independent Directors tofamiliarize them with their role rights and responsibility as Directors the working ofthe Company nature of the industry in which the Company operate business model etc. Thefamiliarisation programme for Independent Directors in terms of provisions of Regulation46(2)(i) of Listing Regulations is uploaded on the website of the Company


The Board of Directors met 5(five) times in the FY 2017-2018. Thedetails of the Board Meetings and the attendance of the Directors are provided in theCorporate Governance Report which forms part of this Annual Report. Further the Board hasalso dealt with certain items through circular resolutions which were confirmed by theDirectors at the subsequent

Board Meeting.


There are currently 4 (Four) Statutory Committees of the Board and 1(one) Non-mandatory committee as follows: I. Audit Committee; II. Stakeholders'Relationship Committee; III. Nomination and Remuneration Committee; IV. Corporate SocialResponsibility Committee; and V. Finance Committee.

During the Financial Year under review the Board re-constituted someof the Committees in accordance with the Act and the

Listing Regulations. Details of all the Committees along with theirterms of reference composition and meetings of each Committee held during the FinancialYear are provided in the Corporate Governance Report annexed to the Annual Report and onthe website of the Company at


The composition of the Audit Committee is covered under the CorporateGovernance Report which forms a part of the report.

The Board has accepted all the recommendations made by the

Audit Committee during the year under review.

Buy Back

The Company has not bought back any of its securities during theFinancial Year ended 31 March 2018.

Directors Responsibility Statements

Pursuant to the requirements under Section 134 of the Companies Act2013 with respect to the Director's

Responsibility Statements the Board of Directors of the

Company hereby confirms: a) that in the preparation of the annualaccounts for the

Financial Year ended 31 March 2018 the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures; b) that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of theFinancial Year and of the profit and loss of the Company for the Financial Year ended 31March 2018. c) that the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d) that the Directors had prepared the annual accounts for theFinancial Year ended 31 March 2018 on a going concern basis; and e) that the Directorshad devised proper systems to ensure compliance with the provisions of all applicable lawsand that such systems were adequate and operating effectively


The Company had instituted the ESOP Trust in the name of

"Parag Milk Foods Employees Stock Option Trust" and the"Parag Milk Foods Limited- Employee Stock Option Scheme 2015" (ESOS 2015) duringthe Per-IPO period. The ESOS 2015 is in accordance with the SEBI Regulations and therelevant provisions of the Companies Act 2013 along with the Rules made there underincluding any amendments made there to or notifications thereof.

There is no material change in the ESOS 2015 during the year underreview and the scheme is in line with the SEBI (Share Based Employee Benefits)Regulations 2014.

The ESOS 2015 is administered by the ESOP Trust. 227000 Equity Shareswere allotted to the ESOP Trust on 3 September 2015. The Options were granted to theeligible employees pursuant to the Nomination & Remuneration Committee Meeting on 04September 2015. The Nomination & Remuneration Committee on 24 June 2016 approvedvesting of the options in accordance with the ESOS 2015 and conditions of grant based onthe Company's performance during the FY 2015- 2016 and subject to the continuedemployment of the eligible employees till 3 September 2016 and that the right to exercisewould extinguish on 3 September 2018. Details required to be provided under Section 62 ofthe Companies Act 2013 and Rule 12(9) of Companies (Share Capital and Debenture Rules2014) andSEBI (Share Based Employee Benefits)Regulations 2014 are set out asAnnexureII to this report.

As the aforesaid ESOS 2015 scheme was formulated in the pre-IPO periodthe Company is seeking to ratify the existing ESOS 2015 scheme by the Members in theensuing AGM.


The Company's internal control systems are commensurate with thenature of its business and the size and complexity of its operations. These are routinelytested and certifiedby the Statutory Auditors as well as Internal Auditors and cover alloffices factories and key business areas.

M/s. KPMG (In India) Chartered Accountants Pune appointed as

Internal Auditors of the Company conducted Internal Audit for the

FY 2017-18 as per the provisions of Section 138 of the Companies Act2013 read with Rule 13 of the Companies (Accounts) Rules 2014. Their reports werereviewed by the Audit Committee and follow-up measures taken wherever necessary.

The Audit Committee reviews the adequacy and effectiveness of theCompany's internal control system and the risk management policies and systems. TheAudit Committee reviews the risks faced by the Company on periodic basis and submits itsperiodical report to the Board about the measures taken for mitigation of Risk in theorganization.

The risks faced by the Company and the various measures taken by theCompany are detailed in Management Discussion and Analysis section.


The Company has established a vigil mechanism in form of Whistle BlowerPolicy for Directors and employees to report their genuine concerns about unethicalbehavior actual or suspected fraud or violation of the Company's Code of Conduct orethics policy details of which are provided in the Corporate Governance Report whichforms part of this Annual Report. The Policy provides for adequate safeguards againstvictimization of Directors/employees who avail of the mechanism and also provides fordirect access to the Chairman of the Audit Committee.

The Whistle Blower Policy has been placed on the website of the Companyat


The details of the Corporate Social Responsibility Committee has beenprovided in the Corporate governance section of this Annual Report.

The report as per Section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility Policy) on the CSR activities is annexed tothis report as "Annexure III".


All contracts/arrangements/transactions entered by the Companycompliance with during the financial year with related parties were in ordinary course ofbusiness and on arm's length basis.

During the year the Company had not entered into any contract/arrangement / transaction with related parties which could be considered material inaccordance with the Policy of the Company on materiality of related party transactions.

The Policy on materiality and dealing with related party transactionsas approved by the Board is uploaded on the Company's website and can be accessed atthe website at :

Members may refer to Note 30 to the standalone financial statementwhich sets out related party disclosures pursuant to

Ind AS.


The particulars of Investments Loans Guarantees covered under theProvisions Section 186 of the Companies Act 2013 read with rules made thereunder formpart of the notes to the

. financial


During the year under review the Company has not accepted any depositwithin the meaning of Section 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014 (including any statutory modification(s) orre-enactment(s) thereof for the time being in force). The

Company has neither accepted nor renewed any deposits during theFinancial Year ended 31 March 2018.



As per the requirement of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 [‘POSH Act'].

The Company has zero tolerance for sexual harassment at workplace andhas adopted 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 the Rules thereunder for preventionand redressal of complaints of sexual harassment at workplace. The objective of thispolicy is to lay clear guidelines and provide right direction in case of any reportedincidence of sexual harassment across the Company's offices and take appropriatedecision in resolving such issues. During the FY 2017-18 the Company has not received anycomplaint on sexual harassment.


The Company is committed to maintain the highest standards of CorporateGovernance and adhere to the Corporate Governance requirements set out by the Securitiesand Exchange Board of India (SEBI). The Company has also implemented several bestCorporate Governance practices as prevalent globally. The report on Corporate Governanceas stipulated under Regulation 34(4) read with Schedule V of the Listing Regulationstogether with certificate received from Company Secretaries in Practice confirmingthe conditions of Corporate Governance is attached to the Report on Corporate Governance.


Management's Discussion and Analysis Report for the year underreview as stipulated under the Listing Regulations is presented in a separate sectionforming part of the Annual

Report and provides details of the overall industry structuredevelopments performance and state of affairs of the Company's various businessalong with internal controls and their adequacy Risk Management Systems and othermaterial developments during the financial


Pursuant to Section 134(3)(m) of the Act read with Rule 8(3) ofCompanies (Accounts) Rules 2014 the particulars relating to conservation of energytechnology absorption foreign exchange earnings and outgo as required to be disclosedunder the Act are annexed as "Annexure IV" to this report.


Pursuant to the provisions of Section 134(3)(a) and 92(3) of the Actand Rule 12(1) of the Companies (Management and Administration) Rules 2014 Extract ofAnnual Return of the Company as on 31 March 2018 in the prescribed Form MGT-9 is annexedto this report as "Annexure V".


Disclosure pertaining to remuneration as per Section 197(12) of theCompanies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel)

Rules 2014 as amended from time to time the disclosures pertaining tothe remuneration and other details are annexed as "Annexure VI" to thisReport.

Details of employee remuneration as required under provisions ofSection 197 of the Companies Act 2013 and Rule 5(2) and(3) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 drawing in excess of the limits set outin these Rules forms part of this Annual Report. In terms of Section 136 of the Act thisreport is being sent to the Members and others entitled thereto excluding the aforesaidinformation. The said information shall be available for inspection by the Members at theRegistered Office of the Company during the business hours on all working days (Monday toFriday) upto the date of the ensuing AGM. The said information shall also be provided toany Member of the Company who sends a written request to the Company.


There are no significant/material orders passed by the

Regulators or Courts or Tribunals impacting the going concern status ofthe Company and its operations in future.


During the year under review the Company has complied with theapplicable Secretarial Standards i.e.SS-1 and SS-2 relating to "Meetings of theBoard of Directors" and "General Meetings" respectively issued by TheInstitute of Company Secretaries of India.


In accordance with the provisions of Companies Act 2013 at the AnnualGeneral Meeting held on 26 June 2015 the shareholders had appointed M/s Haribhakti &Co LLP Chartered Accountants Pune (Firm Registration No. 103523W / W100048) asStatutory Auditors of the Company for a period of 5 years i.e. upto the conclusion of theAnnual General Meeting to be held for the FY 2019-2020.

Pursuant to the notification issued by the Ministry of CorporateAffairs on 7 May 2018 amending Section 139 of the Companies Act 2013 the mandatoryrequirement for ratification of Auditors by the Members at every AGM has been omitted andhence your Company has not proposed ratification of appointment of M/s. Haribhakti &Co. LLP Chartered Accountants at the forthcoming AGM.

There is no qualification There is no incident of fraud requiringreporting by the auditors under Section 143(12) of the Companies Act 2013.


The Board of Directors of the Company in its Board Meeting held on 09May 2018 on recommendations made by the Audit Committee have reappointed M/s. HarshadDeshpande & Associates Cost Accountants Pune (Firm Registration Number: 00378) asthe Cost Auditors of the Company to conduct the cost records for the FY 2018

-2019. In terms of the provisions of Section 148(3) of the CompaniesAct 2013 read with Companies (Audit and Auditors) Rules 2014 as amended theremuneration payable to the Cost Auditors has to be ratified by the Members of Company.Accordingly recommends to the Members the restitution as stated in Item No. 6 of theNotice convening the ensuing AGM.

The Company has received consent from M/s. Harshad Deshpande &Associates Cost Accountants to act as Cost Auditors of the Company for FY 2018-19 alongwith confirming their independence and arm's length relationship.


Pursuant to the provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed M/s. N. L. Bhatia & Associates a firm of Company Secretaries in Practiceto undertake the Secretarial Audit of the Company for the financial year 2017-18. TheSecretarial Audit Report in Form MR-3 is annexed as "Annexure – VII"to this Report. The Secretarial Audit Report for the financial year ended 31 March 2018does not contain any qualification reservation adverse remark in their report.


Your Directors wish to place on record their sincere appreciation forthe assistance and support extended by the employees shareholders customers financialvendors dealers the Central and State Governments and others associated with theactivities of the Company. We look forward to their continued support in future. YourCompany takes pride in its highly motivated employees workers staff and wishes to placeon record its deep sense of appreciation for their committed services and bestcontribution towards growth and success of your Company.

remark in Auditors' report.

For and on behalf of the Board of Directors

Devendra Shah

Executive Chairman (DIN: 01127319)

Place: Mumbai Date: 9 May 2018