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Directors Report of Umang Dairies Ltd.

Mar 31, 2018

To the Members,

The Directors have pleasure in presenting the 25th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2018.

FINANCIAL RESULTS

(Rs. in Lakhs)

	2017-18	2016-17
Revenue from Operations	24,576	21,076
Profit before Finance Cost and Depreciation (PBIDT)	1,343	733
Profit before Depreciation and Tax (PBDT)	969	588
Profit before Tax (PBT)	610	249
Profit after Tax (PAT)	527	165
Surplus brought forward	2,958	3,211
Total amount available for appropriation	3,485	3,376
APPROPRIATIONS:
Capital Redemption Reserve	151	108
General Reserve	50	45
Dividend (Incl. Tax)	-	265
Surplus carried forward	3,284	2,958

DIVIDEND

The Directors are pleased to recommend a dividend of 5% on equity shares.

OPERATIONS

The Revenue from Operations increased to Rs 24,576 Lakhs during the year as compared to Rs 21,076 Lakhs in the previous year, clocking a growth of 16.61%. The capacity utilization for the year stood at 48% compared to 29% in the previous year. The Company is continuing to invest behind retail distribution expansion and up-gradation of distribution infrastructure. This will help in driving sales and distribution for the consumer products.

Company has been able to retain its market share in Dairy Creamer segment with its brands JK WHITE MAGIK, JK DAIRY TOP & MILK STAR. JK Dairy Top continues to maintain its leadership in the mid segment of dairy creamers. Single serve sachets of 3gm and 5 gm of White Magik have found greater acceptance by Hospitality, HORECA segment and Institutional buyers.

The Company has also developed a market for Bulk products including SMP and Ghee. These products are being sold in retail and consumer markets.

Company continued its focus in Pre-Mix powders for tea and coffee vending machines. Company continued its good business and relations with institutional clients like Coca Cola, Walmart etc.

Significant effort was also made during the year to increase efficiency at plant by focusing on utility costs and manpower productivity to gain efficiency resulting in better profitability.

For the year 2017-18 the milk prices remained volatile and high throughout the year. For year 2018-19 we expect Milk prices to be soft which will reduce the prices of raw material significantly. This is also likely to create excess availability of powders and ghee in the industry effectively pushing down prices for the commodities.

LIQUID MILK PLANT

Your Company operates and manages a facility owned by another Company to process and pack Liquid Milk in poly pouches for Mother Dairy, under a long term agreement. Capacity utilization for the year was at 88%.

The Curd Chhach facility started during the year stabilized production and we were able to supply the finished goods to Mother Dairy of required quality and capacity. We expect the capacity utilization of this plan to be as per budgeted volumes for 2018-19.

EXPANSION AND MODERNIZATION PLANS

Company wishes to become a significant player in Dairy & Foods space. The Company has set up a small plant for Paneer manufacturing which is under stabilization process and expected to start commercial production from Q1 onwards 2018-19.

Besides modernization of Plant and R&D facilities, Company is planning to expand production facility of Drying Plant by removing the bottlenecks and modification in the dryer. The Company is planning to invest resources behind expanding distribution of the recently launched products of Cow Ghee, Canned Paneer, UHT Milk to gain Market Share.

Company is also working on developing new value added products which are under different stages of development at R&D.

RAW MATERIAL SECURITY

Company is sanguine about the fact that to sustain a value added product portfolio, it is highly imperative to have captive milk bank where milk is collected direct from the farmers. As it is, Company is one of the few ones who have more than two decades old village level collection system under which milk is collected from nearly 525 villages comprising of about 18500 farmers.

The company will continue its efforts to expand the Village level collection system in the vicinity to ensure quality milk supplies. We also have a panel of contractors who can supply good quality milk at short notice as and when required.

ADULTERATION & FOOD SAFETY

Umang Dairies Ltd has FSSAI License, in addition to this all our Milk Chilling Centers and Warehouses are also covered under FSSAI.

The company has always focused on Good Manufacturing Practices(GMP) and Hygienic Practices as part of its culture. All incoming Milk Consignments are being screened for Adulteration as per the Guideline of FSSAI to maintain purity of Milk and resultant products.

Recently, National Dairy Development Board (NDDB) has awarded most coveted Quality Marks for Packing Operation of Poly Pack Milk under Mother Dairy Brand.

Our units have been successfully audited for quality and GMP practices by companies like Coke, Nuflower, Walmart, Spar on GMP & Food Safety for Business Continuation.

EXTRACT OF ANNuAL RETuRN

An extract of the Annual Return as on 31st March 2018 in the prescribed form MGT -9 is attached 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 the provisions of Section 186 of the Companies Act, 2013 are given in the financial statements.

related party TRANSACTIONS

During the financial year ended 31st March 2018, all the contracts or arrangements or transactions entered into by the Company with the Related Parties were in the ordinary course of business and on armâs length basis and were in compliance with the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

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

DIRECTORS AND Key Managerial pERSONNEL

Smt. Sharda Devi Singhania retires by rotation and being eligible offers herself for re-appointment at the ensuing AGM.

All the Independent Directors of the Company have given requisite declarations that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and also Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Shri N. C. Baheti, ceased to be Manager under Companies Act, 2013 on 10th May, 2017.

corporate SOCIAL RESpONSIBILITY

The Company has framed Corporate Social Responsibility (CSR) Policy in accordance with the provisions of the Companies Act 2013 and rules made thereunder.

A detailed report on Companyâs CSR activities along with the annual report on the CSR activities undertaken by the Company during the financial year under review, in the prescribed format is annexed to this Report as Annexure-2.

AuDITORs

(a) Statutory Auditors and their Report

M/s Singhi & Co., Chartered Accountants, have been appointed as Auditors of the Company to hold the office from the conclusion of the 24th Annual General Meeting held on 27th September 2017 until the conclusion of the 29th Annual General Meeting to be held in year 2022, subject to ratification of the appointment by the members at the respective AGMs. Accordingly, matter relating to the appointment of the Auditors will be placed for ratification by members at the forthcoming AGM. The observations of the Auditors in their report on Accounts and the Financial Statements, read with the relevant notes are self explanatory.

(b) Secretarial Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors appointed Shri Namo Narain Agarwal, Company Secretary in Practice as Secretarial Auditor to carry out Secretarial Audit of the Company for the financial year 2017-18. The Report given by him for the said financial year in the prescribed format is annexed to this Report as Annexure-3. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

The Cost audit for the year ended 31st March 2018 is being conducted by M/s Sanjay Kumar Garg & Associates, Cost Accountants and the report will be submitted to the Ministry of Corporate Affairs, Government of India.

significant and material orders passed by the regulators OR courts OR TRIBuNALs

The Company was forced to temporarily shut down its plant at Gajraula w.e.f. 28th April, 2017 since the Honâble National Green Tribunal (âNGTâ), ordered closure of certain units of Gajraula including that of the Company, for suspected disposal of effluents. Upon submission, NGT later passed an order permitting the operations w.e.f. 16th May 2017 at our plant at Gajraula.

The Company is equipped with a state-of-the-art effluent treatment plant with RO and has a âzero liquid dischargeâ operation status.

There were no other significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

The Company is environmentally conscious and operates its plant in Gajraula (U.P.), with zero discharge and is in compliance with all applicable environmental norms and laws including previous consents from NGT and State Pollution Control Board.

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 median employeeâs remuneration and other requisite details 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, is annexed to this Report as Annexure-5. Further, Particulars of Employees pursuant to Rule 5(2) & (3) of the above Rules, form part of this Report, However, in terms of provisions of Section 136 of the said Act, the Report and Accounts are being sent to all the members of the Company and others entitled thereto, excluding the said particulars of employees. Any member interested in obtaining such particulars may write to the Company Secretary. The said information is available for inspection at the Registered Office of the Company during working hours.

corporate governance

Corporate Governance - including details pertaining to Board Meetings, Nomination and Remuneration Policy, Performance Evaluation, Risk Management, Audit Committee and Vigil Mechanism:

Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance are made a part of this Report.

The Corporate Governance Report which forms part of this Report, also covers the following:

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 and Senior Management including, inter alia, the criteria for performance evaluation of Directors.

c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors.

d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.

e) Details regarding Risk Management.

DEPOSITS

The Company has not taken any deposits from the public.

DIRECTORSâ RESPONSIBILITY STATEMENT

As required under Section 134(3)(c) of the Companies Act, 2013, your Directors state that:-

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

(b) the accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts have been prepared on a going concern basis;

(e) the internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively; and

(f) the proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

cautionary statement

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

These are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Companyâs actual results, performance or achievement could thus differ materially from those projected in any such forward looking statements. The Company assumes no responsibility to publicly amend, modify or revise such forward looking statements, on the basis of any subsequent development information or events.

acknowledgement

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

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

On behalf of the Board of Directors

Place : New Delhi D.B. DODA R.C. Periwal

Date : 3^rd May 2018 (Director) (Director)

Mar 31, 2016

DIRECTORS'' REPORT AND MANAGEMENT DISCUSSIONS AND ANALYSIS

To the Members,

The Directors have pleasure in presenting the 23^rd Annual Report and Audited Accounts of the Company for the year ended 31^st March, 2016.

FINANCIAL RESULTS

(Rs. in Lac)

	2015-16	2014-15
Revenue from Operations	18,898	25,114
Profit before Finance Cost and Depreciation (PBIDT)	1,516	1,661
Profit before Depreciation and Tax (PBDT)	1,454	1,561
Profit before Tax (PBT)	1,152	1,298
Profit after Tax (PAT)	750	851
Surplus brought forward	1,448	926
Total amount available for appropriation	2,198	1,777
APPROPRIATIONS:
Capital Redemption Reserve	100	-
General Reserve	300	65
Dividend (Incl. Tax)	265	264
Surplus carried forward	1,533	1,448

DIVIDEND

The Directors are pleased to recommend a dividend of 20% on equity shares.

OPERATIONS

The Revenue from operations decreased to Rs 18,898 Lac during the year as compared to Rs 25,114 Lac in the previous year, even though production of products increased by 3% - from 10,289 MTs in 2014-15 to 10,588 MTs in 2015-16. Significantly lower international prices of milk and, as a consequence, of Skimmed Milk Powder made Indian exports of Skimmed Milk Powder unviable. This resulted in over supply of Skimmed Milk Powder in domestic market and un-remunerative prices. To counter the situation, Company took a conscious decision to cut sale of commodity products like Skimmed Milk Powder and Ghee and go for value added Job Work for other companies. This proved more remunerative and the Company could maintain production levels with marginal decline in Profitability. As a result operating profit (PBIDT) stood at Rs.1516 lac compared to Rs.1661 lac in the previous year.

Company was able to retain its market share in Dairy Creamer segment with its brands WHITE MAGIK, DAIRY TOP & MILK STAR. Dairy Top continues to maintain its leadership in the mid segment of dairy creamers. Single serve sachets of 3 and 5 gms of White Magik have found greater acceptance by Hospitality, HORECA segment and Institutional buyers like Jet Airways, Indian Railways and Defence Services.

Test Marketing of Doodz Flavoured Milk in upcountry markets in the previous year got encouraging response. Company has widened its supply base to a number of States in East and North-East. Company maintained its leadership position in Pre-Mix for tea and coffee vending machines.

Company continued to invest in updating its Plant and R&D facilities. Progress on putting up a captive power generation Plant is on track. Commercial production is likely to take place in beginning of July 2016. This will significantly lower power and fuel costs, besides ensuring uninterrupted power supply to the Plant.

Company plans to increase production capacity of Drying Plant from present 4.5 lac litres per day to 5.5 lac litres per day. Increased capacity is likely to be available for commercial production from October/November 2016.

Liquid Milk Plant

INDUSTRY SCENARIO

DAIRY INDUSTRY IN INDIA

India continues to be the top producer of milk globally. It is expected that India will continue with its leadership position - milk production in India is growing on a faster clip than global growth. Currently Indian share in global milk production is 18.5% which is expected to go up to 21% in 2020. In 2014-15 Indian milk production stood at 146.3 MMTs against 137.69 MMTs during 201314 - a growth of nearly 6%. Historically, milk production 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 Farmer Welfare)

All over the world, people fulfill approximately 13% of their protein requirement from milk and milk products. Since ancient times milk has been considered in India as an elixir for good health. Overall consumption of milk and milk products is projected to grow consistently - value added dairy products are currently growing at 15 to 16% and this trend is expected to continue. Commodity products are expected to grow 5 to 6%.

Contribution of dairy industry to India''s agricultural GDP is highest amongst all agricultural products and stood at 22%. India has the largest bovine population in the world with a large capacity to process 98.3 million litres of milk per day. Figures show that out of every rupee spent by consumer on milk, farmer gets about 70/ 75 paise. This is significantly higher than what it is in countries like US, Europe and New Zealand where the share of milk producer is less than 40% of the consumer spend.

OPPORTUNITIES AND THREATS

Opportunities

(i) With presence of large foreign dairies in India, demand of value added milk products has gone up. Growth in milk demand is currently reckoned at 6% YOY compared to earlier 4%. This pace seems to be sustainable.

(ii) With some large corporates entering dairy segment, structure of dairy industry is moving from unorganized sector to organized sector. According to Rabo Bank Study, nearly Rs.15,000 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 for protein rich food. Milk and milk products are, therefore, likely to play a significant role to meet this demand.

(iv) India is the largest producer of buffalo milk which is a preferred variety of milk for making certain type of cheese. It offers a good export opportunity for Indian cheese made of buffalo milk.

(v) From every litre of milk processed nearly 40% is fat - butter and ghee. Recent studies in US & Europe show that contrary to common belief that ghee consumption adds to obesity and consequently cardio-vascular and neurological diseases, it is beneficial to health if taken in light quantity. Cholesterol is no more considered a risk factor for heart diseases. This is likely to spur consumption of butter and ghee in a significant manner.

Threats

(i) With pressure on available land from food crops, urbanization and industrialization, 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 the young folk to prefer white collar jobs over conventional dairy farming profession.

(iii) Due to fragmented dairy farming in India, traceability is an issue with importers from USA and EU.

(iv) Present embargo by Govt. of India on import of high milk yielding cows acts as a deterrent to improve productivity of milch cows.

GROWTH OUTLOOK

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 in favour of Western Dairy Products and Packaged Milk. Packaged milk will progressively replace loose milk. A pre-requisite to building an attractive product portfolio is to have a 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 expand production facility of Drying Plant from present 4.5 lac litres per day to 5.5 lac litres per 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 is progressing satisfactorily and some of the products should hit the market in the first half of FY 2016-17.

RISKS & CONCERNS

(i) Government - both Central and States - have increased their focus on ensuring safe food products, including milk products to the consumer. This is a step in right direction. However, due to impractical view taken by Food Inspectors as also lack of adequate testing equipments in Government Laboratories, lot of fear and confusion has been created in the minds of Industry as well as consumers. This has to be addressed by Government by taking pragmatic approach. FSSAI seems to be alive to the problem and have recently 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 not the objective. Opposite this, Private sector has to service capital employed.

(iii) Due to fragmented nature of dairy farming in India, milk cannot be guaranteed to be free from anti-biotics and pesticides.

RAW MATERIAL SECURITY

HUMAN RESOURCE MANAGEMENT/ INDUSTRIAL RELATIONS

The Company recognizes the contribution and importance of its employees in today''s highly competitive environment and has been systematically developing their skills and empowering its employees. People are encouraged to take on new roles and expand their horizons. Training needs at different levels are identified through Performance Appraisal System and need based training programmes are regularly organized for all level of employees. In order to encourage leadership and problem solving qualities among workmen, the Company has helped establish Quality Circles. A number of job rotations are done to enhance 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 as an external firm of Chartered Accountants is in place and carries out their job at predetermined frequency. Their task is to audit internal control systems, financial transactions and statutory compliances. Findings/ audit reports along with the action taken reports are reviewed by the Audit Committee. The Audit Committee also reviews the effectiveness of Company''s internal controls and regularly monitors implementation of audit recommendations.

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

EXTRACT OF ANNUAL RETURN

An extract of the Annual Return as on 31st March 2016 in the prescribed form MGT-9 is attached 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 the provisions of Section 186 of the Companies Act, 2013 are given in the financial statements.

RELATED PARTY TRANSACTIONS

During the financial year ended 31^st March 2016, all the contracts or arrangements or transactions entered into by the Company with the Related Parties were in the ordinary course of business and on arm''s length basis and were in compliance with the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Smt. Sharda Devi Singhania, was appointed as Non Executive Director of the Company by the Members at the Annual General Meeting (AGM) of the Company held on 29th September 2015. She retires by rotation and being eligible offers herself for re-appointment at the ensuing AGM.

Shri R.L. Saha who was the Independent Director of the Company, passed away on 15th August, 2015. Shri R.L. Saha was highly knowledgeable and guided the Company in various matters and took keen interest in the development and progress of the Company. The Directors 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 of work 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 close of work on 30th January, 2016. Consequent upon his resignation the Company has appointed Shri 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 for a 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 accordance with the provisions of the Companies Act 2013 and rules made there under. The contents of the CSR Policy are disclosed on the website of the Company.

A detailed report on Company''s CSR activities along with the annual report on the CSR activities undertaken by the Company during the financial year under review, in the prescribed format is annexed to this Report as Annexure-2.

AUDITORS

(a) Statutory Auditors and their Report

M/s Lodha & Co., Chartered Accountants, have been appointed as Auditors of the Company to hold the office from the conclusion of the 21^st AGM held on 22^nd September 2014 until the conclusion of the 24^th AGM to be held in year 2017, subject to ratification of the appointment by the members at the respective AGMs. Accordingly, matter relating to the appointment of the Auditors will be placed for ratification by members at the forthcoming AGM. The observations of the Auditors in their report on Accounts and the Financial Statements, read with the relevant notes are self explanatory.

(b) Secretarial Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors appointed Shri Namo Narain Agarwal, Company Secretary in Practice as Secretarial Auditor to carry out Secretarial Audit of the Company for the financial year 2015-16. The Report given by him for the said financial year in the prescribed format is annexed to this Report as Annexure-3. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

The Cost audit for the year ended 31^st March 2016 is being conducted by M/s Sanjay Kumar Garg & Associates, Cost Accountants and the report will be submitted to the Ministry of Corporate Affairs, Government of India.

M/s Sanjay Kumar Garg & Associates, Cost Accountants have been appointed as Cost Auditors of the Company to conduct cost audit of cost records for the financial year 2016-17 subject to ratification of their remuneration at the forthcoming AGM of the Company.

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

During the financial year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

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 median employee''s remuneration and other requisite details 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, as amended is annexed to this Report as Annexure-5. Further, during the year under review, there were no employees pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended.

CORPORATE GOVERNANCE

Corporate Governance - including details pertaining to Board Meetings, Nomination and Remuneration Policy, Performance Evaluation, Risk Management, Audit Committee and Vigil Mechanism:

Your Company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to Regulation 34 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Management Discussion and Analysis, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance are made a part of this Report.

The Corporate Governance Report which forms part of this Report, also covers the following:

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 and Senior Management including, inter alia, the criteria for performance evaluation of Directors.

c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors.

d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.

e) Details regarding Risk Management.

DEPOSITS

The Company has not taken any deposits from the public.

DIRECTORSâ RESPONSIBILITY STATEMENT

As required under Section 134(3)(c) of the Companies Act, 2013, your Directors state that:-

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(d) the annual accounts have been prepared on a going concern basis;

(e) the internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively; and

(f) the proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems were adequate and operating effectively.

CAUTIONARY STATEMENT

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

These are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company''s actual results, performance or achievement could thus differ materially from those projected in any such forward looking statements. The Company assumes no responsibility to publicly amend, modify or revise such forward looking statements, on the basis of any subsequent development information or events.

ACKNOWLEDGEMENT

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

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

On behalf of the Board of Directors

Place : New Delhi D.B. DODA R.C. Periwal

Date : 03^rd August 2016 (Director) (Director)

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 21st Annual Report and Audited Accounts of the Company for the year ended 31st March 2014.

FINANCIAL RESULTS

(Rs. in Lac)

2013-14 2012-13

Revenue from Operations and Other Income 21,665 17,436

Operating Profit (PBIDT) 1,068 1,829

ProfitbeforeDepreciation(PBDT) 1,014 1,806

Profit before Tax 865 1,617

Profit after Tax 596 1,230

Surplus brought forward 632 (343)

Total amount available for appropriation 1228 887

APPROPRIATIONS:

General Reserve 45 62

Dividend (Incl. Tax) 257 193

Surplus carried to Balance Sheet 926 632

DIVIDEND

Your Directors are pleased to recommend a dividend of 20% on equity shares.

OPERATIONS Drying Plant:

Company launched two new products during the year Doodz flavoured milk in NCR and JK Milk poly pouched milk in Lucknow. Company spent significant amount of money in sales promotion, brand building and advertisements. Both the products have been well received in the market place. Sales are steadily growing. Company has been able to retain its market share in consumer pack dairy creamers. Its mainstay brands are WHITE MAGIK, DAIRY TOP and UMANG GHEE.

Despite lower production of milk in North India and consequently lesser availability of raw milk, Company could maintain the production levels. As a corollary to lower milk production, milk prices during the year increased sharply March 2014 milk price was nearly 45% higher than March 2013 price. Increased milk cost could not be fully passed on in selling price of end products.

Consequent upon large spend on promotion and advertisement of new products as well as inability to pass on, fully, increased cost of milk, profitability declined. However, Company hopes to get the benefit of ad spend on new products in coming years.

Cost compression measures involving significant capex continued to get adequate attention.

Company increased its volumes in export of Skimmed Milk Powder.

The Company continued to maintain its leadership position in Premixes for Tea & Coffee vending machines.

Liquid Milk Packaging Plant:

Under a long term agreement, your Company is operating and managing a facility to process and pack Liquid Milk in poly pouches for Mother Dairy. Capacity of the plant was 5 lac litres of milk/day. Effective 1st February 2013, plant capacity was raised to 6 lac litres of milk/day. Capacity utilization stays at a healthy 86.60%. Operational efficiencies were maintained at optimum level.

Awards :

During the year, your Company received following major awards:-

1. Chairmans People Management Award for highest betterment in People management related issues amongst all JK Group Companies - 2nd year in succession.

2. Awards received from Mother Dairy:-

i) Process Innovation Leader National Level

ii) Best PGI Award North Region PPM

iii) First Runner up National Level Champion PPM

Growth Plans:

Company aspires to be a significant player in Dairy segment. To achieve this goal, Company''s R&D Deptt., constantly works on several new products to expand its product portfolio. Progress on some of the products has made significant headway. Company has examined several acquisition targets but could not find a right fit so far. Efforts on this are continuing.

Industrial relations remained cordial. No man-days lost on account of IR issues. HRD continued to get the desired attention. Training programmes in house and outside at different levels of employees were pursued on projected lines.

AUDITORS

M/s Lodha & Co., Chartered Accountants, the Auditors of the Company, retire and are eligible for re-appointment at the ensuing Annual General Meeting. The observations of the Auditors in their report on accounts read with the relevant notes are self-explanatory. DIRECTORS RESPONSIBILITY STATEMENT

As required under section 217(2AA) of the Companies Act, 1956, your Directors state that:

i) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

ii) the Accounting Policies selected and applied are consistent and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the Profit & Loss of the Company for that period;

iii) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) the Annual Accounts have been prepared on a going concern basis.

DIRECTORS

Shri D. B. Doda, Director retires by rotation and being eligible offer himself for re-appointment at the ensuing Annual General Meeting.

Shri R. L. Saha, Shri R. C. Jain and Shri R. C. Periwal, whose period of office are liable to determination by retirement of Directors by rotation, are proposed to be appointed as Independent Directors of the Company to hold office for a term of 1 year, 2 con- secutive years and 5 consecutive years respectively, from the date of their appointment at the ensuing Annual General Meeting. The Company has also received declarations from the said Directors about their independence pursuant to Section 149 of the Companies Act, 2013.

The Board recommends the appointments as aforesaid.

COST AUDIT

The Cost Audit Report for the financial year ended 31st March 2013 was tiled by the Cost Auditor with the Ministry of Corporate Affairs, Government of India, on 26.09.2013.

The Cost audit for the year ended 31st March 2014 will be conducted by M/s. Sanjay Garg & Associates, Cost Accountants and the reports will be submitted to the Ministry of Corporate Affairs, Government of India.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussions and Analysis, Corporate Governance Report and Auditors'' Certificate regarding compliance of the conditions of Corporate Governance are made a part of this Annual Report.

PARTICULARS OF EMPLOYEES

During the year under review, there were no employees covered under the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

CONSERVATION OF ENERGY

Details of energy conservation along with the other information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 are annexed.

ACKNOWLEDGEMENTS

The Directors wish to thank the Customers, Dealers, Vendors, Bankers, Financial Institutions, Government Authorities and Shareholders for their continued support. They also place on record their appreciation of the hard work put in by the employees at all levels during the period under report.

On behalf of the Board

Place : New Delhi R.C. Periwal Date : 13th May 2014 Director (Chairman of this meeting)

Mar 31, 2013

To the Members

The Directors have pleasure in presenting the 20th Annual Report and Audited Accounts of the Company for the year ended 31 st March 2013.

FINANCIAL RESULTS

(Rs. in Lac)

2012-13 2011-12

Revenue from Operations and Other Income 17,436 15,042

Operating Profit (PBIDT) 1,829 1,574

Profit before Depreciation (PBDT) 1,806 1,551

Profit before Tax 1,617 1,383

Profit after Tax 1,230 1,383

Surplus brought forward (343) (1,726)

Total amount available for appropriation 887 (343)

APPROPRIATIONS:

General Reserve 62

Dividend (Incl.Tax) 193

Surplus carried to Balance Sheet 632 (343)

DIRECTORS

Your Directors express their profound grief and sorrow on the sad demise of Shri Hari Shankar Singhania, President, J.K. Organisation, and Chairman of major J.K. Group Companies, on 22nd February 2013. Shri Singhania, who learnt the ropes of business under his illustrious father late Lala Lakshmipatji, was actively involved with J.K. Organisation since 1951, from the young age of 18 years, and held various positions, before he assumed the Chairmanship of various Companies. Shri Singhania not only took keen interest in the progress of your Company but also in the growth of industrialization and economic development of India for which he received numerous prestigious Indian & International awards and recognitions. Your Directors pay their respectful homage and tribute to this extraordinary human being, a great leader, an iconic industrialist and a leading statesman.

Shri R.C. Jain, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. DIVIDENDS

In view of better performance during the year, your Directors are pleased to recommend a maiden dividend of 15% on equity shares. OPERATIONS

The Company continues to improve its performance on production, value and volume sales and process cost. Revenue increased by 16% and Profit before Tax by 17% over the previous year.

Drvina Plant:

The Plantoperated uninterruptedly throughout the year and capacity utilization improved to 56.60%, which is considered satisfactory fora seasonal industry like Dairy. By adding certain balancing equipments effective capacity of the Plant has increased to 4.5 lac litres/ day of milk against the nameplate capacity of 3 lac litres/ day.

Towards expanding product portfolio, Company has created, during the year, facilities to make white/ yellow butter. Product will be initially addressed to institutional buyers. Company has also created a facility to make flavoured milk in liquid form. The product is scheduled for launch during early part of 1st quarter of the financial year 2013-14.

Product mix enrichment continued to get increased focus. Reach of its mainstay brands WHITE MAGIK and DAIRY TOP in Dairy Creamers and UMANG in consumer pack Ghee increased by deeper penetration in existing markets as well as entering new geographies. Currently, your Company is selling 6 million sachets per month of its branded Dairy Creamers and is the 3rd largest seller of it in India, after Amul and Nestle.

Cost compression measures continued to get adequate attention during year.

Export ban on Skimmed Milk Powder was lifted by Government of India in June 2012. Your company exported 375 MTs of Skimmed Milk Powder during the year.

The Company continued to maintain its leadership position in Premixes for Tea & Coffee vending machines.

Liquid Milk Packaging Plant:

Under a long term agreement, your Company is operating and managing a facility to process and pack Liquid Milk in poly pouches for Mother Dairy. Capacity of the plant was 5 lac litres of milk/day. Effective 1st February 2013, plant capacity has been raised to 6 lac litres of milk/day.

Capacity utilization stood at 101 % as compared to 87% in the previous year. Operational efficiencies were maintained at optimum level.

Awards :

During the year, your company received two major awards.

1. Chairman''s People Management Award for highest betterment in People management related issues amongst all JK Group Companies.

2. National Quality Award - Champion from Mother Dairy Fruits & Vegetables Pvt. Ltd. for best operated plant amongst a dozen of Mother Dairy co-packers and Mother Dairy owned plants for liquid milk processing & poly pouching.

Growth Plans:

Company aspires to be a significant player in Dairy segment. To achieve this, Company is working on several new products to expand its product portfolio.

Industrial relations remained cordial. HRD continued to get the desired attention. Training programmes - in-house and outside

- at different levels of employees were pursued on projected lines.

AUDITORS

M/s Lodha & Co., Chartered Accountants, the Auditors of the Company, retire and are eligible for re-appointment at the ensuing Annual General Meeting. The observations of the Auditors in their report on accounts read with the relevant notes are self-explanatory. DIRECTORS'' RESPONSIBILITY STATEMENT

As required under section 217(2AA) of the Companies Act, 1956, your Directors state that:

i) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

ii) the Accounting Policies selected and applied are consistent and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the Profit & Loss of the Company for that period;

iii) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) the Annual Accounts have been prepared on a going concern basis.

COST AUDIT

The Cost Compliance Report for the financial year ended 31st March 2012 was filed by the Cost Auditor with the Ministry of Corporate Affairs, Government of India, on 07.01.2013.

The Cost audit for the year ended 31 st March 2013 will be conducted by M/s. Sanjay Garg & Associates, Cost Accountants and the reports will be submitted to the Ministry of Corporate Affairs, Government of India.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussions and Analysis, Corporate Governance Report and Auditors'' Certificate regarding compliance of the conditions of Corporate Governance are made a part of this Annual Report.

PARTICULARS OF EMPLOYEES

During the year under review, there were no employees covered under the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

CONSERVATION OF ENERGY

Details of energy conservation along with the other information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 are annexed.

ACKNOWLEDGEMENTS

The Directors wish to thank the Customers, Dealers, Vendors, Bankers, Financial Institutions, Government Authorities and Shareholders for their continued support. They also place on record their appreciation of the hard work put in by the employees at all levels during the period under report.

On behalf of the Board Place : New Delhi R.C. Periwal

Date :4th May 2013 Director

Mar 31, 2012

The Directors present the 19th Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2012.

FINANCIAL RESULTS

(Rs. in Lac)

2011-12 2010-11

Revenue from Operations and Other Income 15,041.83 10,235.55

Operating Profit/(Loss) (PBIDT) 1,574.20 523.16

Profit/(Loss) before Depreciation (PBDT) 1,550.73 491.77

Net Profit/(Loss) 1,383.02 331.37

OPERATIONS

Drying plant:

The Company turned out significantly improved results in its operations. Higher capacity utilization, improved product blend, higher volume and value sale resulted in better top and bottom line. Capacity utilization stood at 55% as compared to 39% in the previous year.

Company took several cost compression measures during the years 2009-10 and 2010-11. Full benefit of the measures got reflected in the year under review.

Milk prices continued their upward trend during the first half of the year but showed a significant decline during later part of the year. According to industry estimates, milk production during the year increased by about 4.6% against last decade's average growth of 3.8%.

Ban on export of SMP continued during the year but the Company was able to place its volumes in domestic market.

The Company continued to maintain its leadership position in Premixes for Tea & Coffee vending machines.

Company received "Supplier of the Year" Award 2011 - Private Brands category from Bharti Wal-Mart.

LIQUID MILK PACKAGING PLANT:

Capacity utilization during the year stood at 87% as compared to 60% in the previous year. Operational efficiencies were maintained at optimum level.

Industrial relations remained cordial. HRD continued to get the desired attention. Training programmes - in-house and outside - at different levels of employees were pursued on projected lines.

AUDITORS

M/s Lodha & Co., Chartered Accountants, the Auditors of the Company, retire and are eligible for re-appointment at the ensuing Annual General Meeting. The observations of the Auditors in their report on accounts read with the relevant notes are self-explanatory.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under section 217(2AA) of the Companies Act, 1956 your Directors state that:

i) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed alongwith proper explanation relating to material departures;

ii) the Accounting Policies selected and applied are consistent and judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company;

iii) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) the Annual Accounts have been prepared on a going concern basis.

DIRECTORS

Shri R. C. Periwal, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussions and Analysis, Corporate Governance Report and Auditors' Certificate regarding compliance of the conditions of Corporate Governance are made a part of this Annual Report.

PARTICULARS OF EMPLOYEES

During the year under review, there were no employees covered under the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

CONSERVATION OF ENERGY

Details of energy conservation alongwith the other information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 are annexed.

ACKNOWLEDGEMENTS

The Directors wish to thank the Customers, Dealers, Vendors, Bankers, Financial Institutions, Government Authorities and Shareholders for their continued support. They also place on record their appreciation of the hard work put in by the employees at all levels during the period under report.

On behalf of the Board

Place : New Delhi R.C. Periwal

Date : 5th May 2012 Director

(Chairman of this meeting)

Mar 31, 2011

To the Members

The Directors present the 18th Annual Report together with the Audited Accounts of the Company for the year ended 31 st March 2011.

FINANCIAL RESULTS

(Rs. in Lacs)

2010-11 2009-10

Sales and Other Income 10236.46 5061.04

Operating ProfitALoss) (PBIDT) 523.16 (27.83)

Profit/(Loss) before Depreciation (PBDT) 491.77 (58.26)

Net ProfitALoss) 331.37 (202.38)

OPERATIONS

The Company showed significant improvement in its operations by better capacity utilization of the Drying Plant capacity utilization stood at 39.75% as compared to 21.22% in the previous year.

The operations of Liquid Milk Packaging Plant also improved significantly. Capacity utilization during the year stood at 60% as compared to 39.12% in the previous year.

Notwithstanding the ban on export of Milk powder, the price of milk continued to rise and is expected to further go up over the medium term because of the substantial demand-supply mismatch. Milk production has been growing at a steady rate of 3.5 to 4% per year against which the domestic demand of milk is growing at over 6% per year; hence shortage of milk and higher price. However, the Company was able to pass on the major part of increase in milk cost in the selling price of end-products. According to food inflation numbers, the milk prices have gone up by 22% during the year 2010-11.

The Company continues to maintain its leadership position in Premixes for Tea & Coffee vending machines.

Industrial relations remained cordial. HRD continued to get the desired attention. Training programmes - in-house and outside - at different levels of employees were pursued on projected lines.

AUDITORS

M/s Lodha & Co., Chartered Accountants, the Auditors of the Company, retire and are eligible for re-appointment at the ensuing Annual General Meeting. The observations of the Auditors in their report on Accounts read with the relevant notes are self- explanatory.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under section 217(2AA) of the Companies Act, 1956 your Directors state that:

i) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed alongwith proper explanation relating to material departures;

ii) the Accounting Policies selected and applied are consistent and judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company;

iii) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) the Annual Accounts have been prepared on a going concern basis.

DIRECTORS

Shri R. L. Saha, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re- appointment.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussions and Analysis, Corporate Governance Report and Auditors' Certificate regarding compliance of the conditions of Corporate Governance are made a part of this Annual Report.

PARTICULARS OF EMPLOYEES

During the year under review, there were no employees covered under the provisions of Section 21 7(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rides, 1975.

CONSERVATION OF ENERGY

Details of energy conservation alongwith the other information in accordance with the provisions of Section 21 7(1 Me) of the Companies Act, 1956 are annexed.

ACKNOWLEDGEMENTS

The Directors wish to thank the Customers, Dealers, Vendors, Bankers, Financial Institutions, Government Authorities and Shareholders for their continued support. They also place on record their appreciation of the hard work put in by the employees at all levels during the period under report.

On behalf of the Board

Place : New Delhi R.C. Periwal Date : 25th May 2011 Director (Chairman of this meeting)

Mar 31, 2010

The Directors present the 1 7th Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2010.

The Company is observing this year as the Birth Centenary Year to pay humble respects to late Lala Lakshmipat Singhania (1910-1976), who had been a great Visionary and a Key Architect of JK Organisation. He believed in the philosophy of inclusive growth encompassing all sections of the Society.

FINANCIAL RESULTS

(Rs. in Lacs)

2009-10 2008-09

Sales and Other Income 5061.04 3344.37

Operating Profit/(Loss) (PBIDT) (27.83) (97.44)

Profit/(Loss) before Depreciation (PBDT) (58.26) (122.96)

Net Profit/(Loss) (202.38) (253.41)

Under Sick Industrial Companies (Special Provisions) Act, 1985, the Company was referred to Board for Industrial and Financial Reconstruction (BIFR) in the year 2002. A Rehabilitation Package was sanctioned by BIFR on 03.08.2009. Most of the long term lenders of the Company were settled and paid off by promoter group companies. In respect of 2 lenders, BIFR froze the liability and prescribed a payment schedule.

OPERATIONS

Due to delayed and deficit monsoon in Northern India and consequent draught conditions, milk production in Northern India was short by about 5% as compared to previous year. As a consequence, availability of milk was less and prices were higher by about 20%. However, the Company was able to pass on the major part of increase in milk cost in the selling price of end-products.

Lower production and availability of milk also adversely affected Companys sale of liquid milk - sales dropped by about 64%, which effected the profitability.

Better capacity utilization during the year, however, helped the Company in reducing its losses as compared to previous year.

The Company continues to maintain its leadership position in Premixes for Tea & Coffee vending machines.

During the year, Company collaborated with M/s LVP Foods Pvt. Ltd. to put up a facility to process and pack liquid milk in poly pouches. Commercial production commenced on 11th September 2009. Plant is running satisfactorily. Capacity Utilization at year end is about 50%.

Industrial relations remained cordial. HRD continued to get the desired attention. Training programmes - in-house and outside - at different levels of employees were pursued on projected lines.

AUDITORS

M/s Lodha & Co., Chartered Accountants, the Auditors of the Company, retire and are eligible for re-appointment at the ensuing Annual General Meeting. The observations of the Auditors in their report on Accounts read with the relevant notes are self-explanatory.

DIRECTORS RESPONSIBILITY STATEMENT

As required under section 217(2AA) of the Companies Act, 1956 your Directors state that:

i) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed alongwith proper explanation relating to material departures;

ii) the Accounting Policies selected and applied are consistent and judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company;

iii) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) the Annual Accounts have been prepared on a going concern basis.

DIRECTORS

Shri D.B. Doda, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussions and Analysis, Corporate Governance Report and Auditors Certificate regarding compliance of the conditions of Corporate Governance are made a part of this Annual Report.

PARTICULARS OF EMPLOYEES

During the year under review, there were no employees covered under the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

CONSERVATION OF ENERGY

Details of energy conservation alongwith the other information in accordance with the provisions of Section 21 7(1 )(e) of the Companies Act, 1956 are annexed.

ACKNOWLEDGEMENTS

The Directors wish to thank the Customers, Dealers, Vendors, Bankers, Financial Institutions, Government Authorities and Shareholders for their continued support. They also place on record their appreciation of the hard work put in by the employees at all levels during the period under report.

On behalf of the Board

Place: New Delhi R.C. Periwal

Date : 28th May 2010 Director

(Chairman of this meeting)

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