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Umang Dairies Ltd.

BSE: 500231 Sector: Agri and agri inputs
BSE 00:00 | 03 Oct 60.90 1.10






NSE 00:00 | 03 Oct 60.80 0.30






OPEN 60.70
52-Week high 90.00
52-Week low 44.55
Mkt Cap.(Rs cr) 134
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 60.70
CLOSE 59.80
52-Week high 90.00
52-Week low 44.55
Mkt Cap.(Rs cr) 134
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Umang Dairies Ltd. (UMANGDAIRY) - Director Report

Company director report



To the Members

The Directors have pleasure in presenting the 29th Annual Report along with AuditedFinancial Statements of the Company for the financial year ended 31st March 2022.


(Rs in crore)

Particulars 2021-22 2020-21
Revenue from Operations 208.08 248.95
Profit/(Loss) before Finance Cost and Depreciation (PBIDT) (10.23) 14.62
Profit/(Loss) before Tax (PBT) (19.69) 6.09
Profit/(Loss) after Tax (PAT) (14.25) 4.10
Surplus brought forward 40.73 37.73
Total amount available for appropriation 26.47 41.83
General Reserve 0.00 0.00
Dividend (Incl. Tax) 1.10 1.10
Surplus carried forward 25.37 40.73


In view of losses the Directors have not recommended any dividend for the financialyear 2021-22 on equity shares.


The Revenue from Operations was Rs 208.08 crore during the year as compared to Rs248.95 crore in the previous year.

The 2nd wave of COVID-19 jolted the confidence of customers pushing down the overalldemand for consumer products. Your Company's Dairy Creamer business suffered badly in thefirst half of the year because of significant price reduction by competition. Afteraggressive marketing and promotion initiatives sales of consumer products startedrecovering from second half.

Though overall market started improving in second half of 2021-22 input pricesremained high due to poor milk availability especially in the flush season. Margins thusremained under pressure in the second half with price increases lagging input costincreases.

Your Company's products have been well accepted in Institutions and Hotel andRestaurant segments (HORECA) and your Company is working on various value-added productcategories to enhance our offerings. Your Company has also added new customers in thecategory of Institution and HORECA and continues its efforts to further expand itscustomer base.

Your Company also launched 2 new products based on changing demand patterns andconsumer research. All the products garnered good response in the market. In the comingyear your Company stands committed to rebound the business and continuously buildconsumer institutional and bulk business.

Milk Procurement / Raw Material Security

Rural India being not untouched from the impact of second wave of COVID-19 lockdownled to unemployment among casual labour and millions slipped into poverty last year due tojob losses. Shrinking farmer margins led to low investment on cattle and dairy. Thisresulted in low availability of milk during second half of 2021-22 (flush season) andsteep increase in milk prices.

Your Company has enhanced its milk procurement capabilities at the village leveladding new collection centres and BMCs. Your Company is helping farmers to have moresustainable business and providing support to get low-cost fodder veterinary support andempowering farmers by providing literacy training programs like development of clean milketc.

Food Safety

Food Safety and Quality always remained the key focus area for your Company during FY2021-22.

We upgraded our plant to further amendments of FSSC 22000 version 5.0 GMP and QualityManagement System as per ISO: 9001 - 2015. 20 Certified Internal Auditors continued theirsupport for compliances across functions at the plant site as well as the front end.

Good Manufacturing Practices (GMP) Prevention of Food Fraud Food Threats andIntegrated Pest Management System remained the most important compliance practices.

Your Company successfully cleared GMP & Food Safety Audits conducted by the fourrenowned brands in FY 2021-22. This covers infrastructure and systems in the dairyprocessing plant for food safety compliance. In-house capability of QA lab is maintainedand enhanced the systems and processes.

COVID Protocol compliance played a key role during the pandemic and all the staffsreceived FASSAI approved COVID prevention training with an aim of Food Safety Complianceon shop floor and benefit to individuals.



India remained the largest producer and consumer for dairy products. However COVID-19slowed down the pace of milk production due to constrained investment lead to lowproductivity per bovine and less improvement in the population of milch animals. On theother hand it helped farmers to get better milk prices during the year while bringing innew investment opportunities in Dairy Farming.

Liquid milk remained the largest segment within the Indian dairy industry. The growthof some value-added product categories witnessed significant growth due to health andhygiene concerns with recommended higher protein intake due to COVID-19.



i. COVID-19 converted "out of home consumption" trend into "orderonline". As the consumer intent to shop online continues to increase it will createmore opportunities for the value added dairy product category.

ii. Participation of start-ups in the dairy industry will support significantinfrastructure investment across processing chilling logistics cattle feed etc.

iii. Product engineering in the value added category and introduction of innovativeproducts as per the specific requirements of the customers will bring growth in thecoming years.


i. Growth in milk production is not in line with the demand because of stagnancy in thepopulation of bovine milch animals and availability of Artificial Intelligencetechnologies to only 50% of the farmers.

ii. Less yield from milch animals due to less feed and heat stress owing to climatechange and shortening of growing seasons.


Indian Dairy industry witnessed a steady recovery after the COVID-19. Most of thevalue-added product categories are expected to deliver a double digit growth in the comingyears. Rapid urbanisation and population growth will help in robust growth of the liquidmilk market which is estimated to grow by 2.5 times in the next 5 years.


Dairy analogues adulteration and plant-based products pose a major challenge andthreat to the dairy industry and specially to value added product category.


Employees are considered as key stakeholders in the progress of organisation andvarious initiatives are being taken to upgrade their skills through internal and externaltraining. Job rotation opportunities are encouraging people to take on new roles andmaximize their learning and work experience. "Reward and Recognition" schemeshave been introduced to develop a competitive and performance-oriented work culture.Automation of HR functions helps in building speed accuracy and improve employeeexperience. In order to encourage leadership and problem-solving qualities among workmenyour Company has established cross Functional Team projects. Your Company provides variousCommunication platforms with Senior Leadership to ensure open and transparent feedbackfrom employees.

Industrial Relations remained cordial throughout the year under review.


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

There is a Corporate Internal Audit team consisting of qualified professionals. Inaddition services of external Audit firm is also availed to further strengthen itseffectiveness. Regular internal audits are conducted to review the internal controlsystems and compliance thereof as per the annual audit plan approved by Audit Committee ofthe Board. The findings of the Audit team are reviewed by the Audit Committee andcorrective actions are initiated where necessary. In addition the Company also follows aCompliance monitoring software tool to capture status of all applicable statutorycompliances online.

DETAILS OF SIGNIFICANT CHANGES (i.e. change of 25% or more compared to the immediateprevious financial year)

S ..' Particulars No. UOM 2021-22 2020-21 % Change Definition Remark for variation
1 Debtors Turnover Ratio Days 15.72 21.05 25.30% Sales/Average Trade Receivables Better Sales Realization
2 Interest Coverage Ratio Times -2.37 3.91 -160.75% EBITDA/Finance Cost Due to Losses
3 Debt Equity Ratio Times 1.14 0.58 -97.19% Gross Debt/Equity Due to Losses
4 Operating Profit Margin % -5% 6% -184.99% EBITDA/Net Sales Due to Losses
5 Net Profit Margin % -6.99% 1.65 -522.64% PAT/Net Sales Due to Losses
6 Return on Net Worth % -30% 6% -571.12% PAT/Equity Due to Losses


During the year under review there has been no change in the Authorised and Paid-upshare capital of the Company. As on 31st March 2022 the Authorised Share Capital of theCompany was Rs 21 crore and Paid Up Share Capital was Rs 11 crore. Umang Dairiesmaintained its Long Term Rating and Short Term Rating as CRISIL BBB. CRISIL has notrevised the credit rating of the Company during the financial year 2021-22.


Pursuant to the provisions of the Companies Act 2013 (‘the Act') the AnnualReturn of the Company is available on the website of the Company and can be accessed at


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


During the financial year ended 31st March 2022 all the contracts or arrangements ortransactions entered into by the Company with the Related Parties were in the ordinarycourse of business and on arm's length basis and were in compliance with the applicableprovisions of the Act and SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 (‘the Listing Regulations').

Further the Company has not entered any contract or arrangement or transaction withthe Related Parties which could be considered material in accordance with the Policy ofthe Company on materiality of Related Party Transactions. In view of the above disclosurein Form AOC-2 is not applicable.

SEBI vide its Notification dt. 9th November 2021 has amended the provisions relating toRelated Party and Related Party Transactions effective from 1st April 2022. Accordinglyamended Policy on Materiality of Related Party Transactions and on Dealing with RelatedParty Transactions is available on the website of the Company.


Shri Rajiv Sheopuri (DlN:03450185) was appointed as an Independent Director of theCompany for a term of three consecutive years w.e.f. 19th August 2021 by the Members atthe Annual General Meeting (AGM) of the Company held on 16th September 2021. The Board isof the opinion that Shri Rajiv Sheopuri has high integrity and relevant experience.

Shri Desh Bandhu Doda (DlN:00165518) has been re-designated and appointed asIndependent Director of the Company for a term of three consecutive years w.e.f. 19thAugust 2021 by the Members at AGM of the Company held on 16th September 2021.

Also pursuant to SEBI (Listing Obligations and Disclosure Requirements) (ThirdAmendment) Regulations 2021 which was effective from 1st January 2022 Shri A.S. Mehta(DIN:00030694) an Independent Director of the Company was re-designated and appointed asdirector liable to retire by rotation w.e.f. 1.10.2021 and Shri V. Kumaraswamy(DIN:02443804) who was appointed as Additional Director (Independent) w.e.f. 18.5.2021has been re-designated and appointed as director liable to retire by rotation w.e.f. 19thAugust 2021 by the Members at the AGM of the Company held on 16th September 2021.

Shri Virupakshan Kumaraswamy (DIN: 02443804) retires by rotation and being eligibleoffers himself for re-appointment at the forthcoming AGM of the Company.

Shri Ratan Chand Jain (DIN:00165590) Independent Director on the Board of the Companypassed away on 23rd April 2021 and Shri Vinit Marwaha (DIN:00051403) ceased to beIndependent Director of the Company w.e.f. 16th September 2021 pursuant to abovementionedamendment in Listing Regulations. The Board places on record its appreciation for theservices rendered by them during their tenure as Directors of the Company.

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

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


Your Company considers community as its key stakeholder and endeavours to createeconomically viable and socially inclusive. CSR programmes of the Company are aimed atinclusive development and welfare of the community by providing livelihood opportunitiesthrough micro enterprises healthcare sanitation education empowering women throughadult literacy and other means.

The Company has a Corporate Social Responsibility (CSR) Policy in accordance with theprovisions of the Act. CSR Policy of the Company is displayed on the website of theCompany.

During the year under review the Company has spent Rs 12.42 lac under various CSRactivities.

Annual Report on the CSR activities undertaken by the Company during the financial yearended 31st March 2022 in the prescribed format is annexed to this Report as Annexure-1and forms part of it.


(a) Statutory Auditors

In accordance with the provisions of the Act and Rules made thereunder M/s Singhi& Co. Chartered Accountants were appointed as Auditors of the Company to hold officefrom the conclusion of the 24th Annual General Meeting (AGM) held in the year 2017 tillthe conclusion of 29th AGM of the Company to be held in the year 2022. Accordingly theterm of office of said Auditors shall expire at the conclusion of the forthcoming AGM.

In terms of the provisions of Section 139 of the Act and the Rules made thereunderyour Directors have recommended re-appointment of M/s Singhi & Co. CharteredAccountants as Statutory Auditors of the Company for another term of five consecutiveyears from conclusion of the forthcoming AGM of the Company till the conclusion of the34th AGM of the Company to be held in the year 2027 for approval of Members of theCompany. M/s Singhi & Co. have given their consent to act as Statutory Auditors of theCompany and have further confirmed that their appointment if made at the forthcoming AGMshall be in accordance with conditions specified in the Act.

The observations of the Auditors in their report on Accounts and the FinancialStatements read with the relevant notes are self-explanatory. The Auditor's Report doesnot contain any qualification reservation adverse remark or disclaimer.

(b) Secretarial Auditor

The Board of Directors had appointed Shri Namo Narain Agarwal Company Secretary inPractice as Secretarial Auditor to carry out Secretarial Audit of the Company for thefinancial year 2021-22. The Report given by him for the said financial year in theprescribed format pursuant to the provisions of Section 204 of the Act and Regulation 24Aof the Listing Regulations is annexed to this Report as Annexure-2 and forms part of it.The Secretarial Audit Report does not contain any qualification reservation adverseremark or disclaimer.

(c) Cost Auditor

In accordance with the provisions of Section 148(1) of the Act the Company hasmaintained cost accounts and records. The Cost Audit for the financial year ended 31stMarch 2021 was conducted by M/s Sanjay Kumar Garg & Associates Cost AccountantsDelhi and the Cost Audit Report was duly filed with the Ministry of Corporate AffairsGovernment of India. The Audit of the Cost Records for the financial year ended 31st March2022 is being conducted by the said firm and the Report will also be filed with theMinistry of Corporate Affairs Government of India.


During the year under review there were no significant and material orders passed bythe Regulators or Courts or Tribunals which would impact the going concern status of theCompany and its future operations. Further during the year under review no applicationswere made or no proceedings were pending as at the end of the year under the Insolvencyand Bankruptcy Code 2016.


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


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


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


Disclosure of the ratio of the remuneration of each Director to the median employee'sremuneration and other requisite details pursuant to Section 197(12) of the Act read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed to this Report as Annexure-4 and forms part of it. Further Particularsof Employees pursuant to Rule 5(2) & (3) of the above Rules also form part of thisBoard Report. However in terms of provisions of Section 136 of the

Act the Annual Report for the financial year 2021-22 is being sent to all the membersof the Company and others entitled thereto excluding the said particulars of employees.Any member interested in obtaining such particulars may write to the Company Secretary.The said information is also available for inspection at the Registered Office of theCompany on working days during working hours.


Your Company reaffirms its commitment to the highest standards of corporate governancepractices. Pursuant to Regulation 34 read with Schedule V of the Listing RegulationsManagement Discussion and Analysis Corporate Governance Report and Auditors Certificateregarding compliance of conditions of Corporate Governance are made part of this AnnualReport.

The Corporate Governance Report which forms part of this Annual Report also covers thefollowing:

a) Particulars of the five Board Meetings held during the financial year under review.

b) Policy on Nomination and Remuneration of Directors Key Managerial Personnel 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.

f) Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.


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


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


As required under Section 134(3)(c) of the Act your Directors state that:-

a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures; if any;

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 sufficient care 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;

e) the proper internal financial controls to be followed by the Company have been laiddown and that such internal financial controls are adequate and were operatingeffectively; and

f) the proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems 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 Company's strategy for growth product development market positionexpenditures and

financial results are forward looking statements. These are based on certainassumptions and expectations of future events. The Company cannot guarantee that theseassumptions and expectations are accurate or will be realized. The Company's actualresults performance or achievement could thus differ materially from those projected inany such forward looking statements. The Company assumes no responsibility to publiclyamend modify or revise such forward looking statements on the basis of any subsequentdevelopment 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 (A.S. Mehta) (R.C. Periwal)
Date: 20th May 2022 Director Director