bs_march-2008.pdf

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ANNUAL REPORT

BOARD OF DIRECTORSChairman & Managing Director

Mr. Krishan Kumar Goyal

Dr. Bhupendra Nath Mathur

Mr. Amarjit Goyal

Mrs. Alka Goyal

Mr. Satish Tandon

Prof. Satish Kapoor

Mr. Hardyal Sehrawat (Nominee Director)

Mr. Harvinder Singh Oberoi, Director (Operations)

COMPANY SECRETARYMs. Anubha Garg

AUDITORSM/s A. Goel & AssociatesChartered Accountants

BANKERSPunjab National BankState Bank of IndiaCanara Bank

CORPORATE OFFICESCO 98-99, Sub City Centre,Sector 34, Chandigarh-160 022

REGISTERED OFFICE & WORKS136 KM, G.T. Road,Karnal - 132 001 (Haryana)

REGISTRARS & SHARE TRANSFER AGENTSMCS LimitedSrivenkatesh Bhawan, W-40, Okhla Industrial Area,Phase II, New Delhi - 110 020

CONTENTS

Notice ------------------------------------------------ 2

Directors Report -------------------------------- 14

Corporate Governance Report -------------- 19

Auditors Report --------------------------------- 29

Balance Sheet ----------------------------------- 32

Profit & Loss Account -------------------------- 33

Cash Flow Statement -------------------------- 34

Schedules ---------------------------------------- 35

MODERN DAIRIES LIMITED

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NOTICENotice is hereby given that the 16th Annual GeneralMeeting of the members of Modern Dairies Limited willbe held at its Registered Office at 136 KM, G.T. Road,Karnal 132 001 (Haryana) on Monday, the29th September, 2008 at 11:00 a.m. to transact thefollowing business:

AS ORDINARY BUSINESS:1. To consider and adopt the Audited Balance Sheet

as at 31st March, 2008, the Profit & Loss Accountof the Company for the year ended on that date andthe reports of the Directors and Auditors thereon.

2. To appoint a Director in place of Dr. Bhupendra NathMathur, who retires by rotation, and being eligibleoffers himself for re-appointment.

3. To appoint a Director in place of Mr. Satish Tandon,who retires by rotation, and being eligible offershimself for re-appointment.

4. To consider and if thought fit to pass with orwithout modification(s), the followingresolution as an ORDINARY RESOLUTION:RESOLVED that subject to the provisions of Section224, 225 and other applicable provisions, if any, ofthe Companies Act, 1956, M/s S.R. Batliboi & Co.,Chartered Accountants, be and are herebyappointed as Statutory Auditors of the Company tohold office from the conclusion of this AnnualGeneral Meeting upto the conclusion of the nextAnnual General Meeting of the Company, in place ofthe retiring Auditors M/s. A. Goel & Associates,Chartered Accountants, to examine and audit theaccounts of the Company for the financial year2008-09, at such remuneration as may be mutuallyagreed between the Board of Directors of theCompany and the Auditors.

AS SPECIAL BUSINESS:5. To consider and if thought fit to pass with or

without modification(s), the followingresolution as a SPECIAL RESOLUTION.RESOLVED that pursuant to section 31 & otherapplicable provisions of the Companies Act, 1956including any statutory modification or re-enactmentthereof, the Articles of Association of the Companybe and are hereby altered in the following manner:

(i) That in the existing Article 1 (Interpretation), thefollowing definitions be inserted in alphabetical orderas follows:

Accounting Standards means Indian GenerallyAccepted Accounting Principles, (Indian GAAP)issued by the Institute of Chartered Accountantsof India (ICAI), together with its pronouncementsthereon from time to time, and applied on a consistentbasis;Affiliate means (i) with respect to any personbeing an entity, any person directly or indirectlycontrolling, controlled by or under common controlwith, that person; and (ii) with respect to any naturalperson, any Family Member of that person;AGM means the annual general meeting of theCompanys shareholders;Applicable Law means all applicable statutes,laws, ordinances, rules and regulations, includingbut not limited to, the Act, any license, permit orother governmental Authorization, in each case asin effect from time to time;Authority means any national, regional or localgovernment or governmental, administrative, fiscal,judicial, or government-owned body, department,commission, authority, tribunal, agency or entity, orcentral bank (or any Person, whether or notgovernment owned and howsoever constituted orcalled, that exercises the functions of a centralbank), or stock exchange;Authorizations means any consent, registration,filing, notarization, certificate, license, approval,permit, authority or exemption from, by or with anyAuthority, including without limitation all corporate,creditors and shareholders approvals or consents;Authorized Representative means any naturalperson who is duly authorized by the Company toact on its behalf for the purposes specified in, andwhose name and a specimen of whose signatureappear on, the Certificate of Incumbency andAuthority most recently delivered to IFC;Business means production and distribution ofdairy and related products;Chairman means the chairman of the Board ofDirectors of the Company appointed from time totime in accordance with Article 117;Change in Control means any Transfer that wouldresult in the Sponsor Group collectively holding lessthan forty-five percent (45%) of the Shareholdingof the Company;

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Charter means the Memorandum of Association,the Articles of Association and the By-Laws ofthe Company;Company Offering means a public offering andsale of shares or Share Equivalents for theCompanys account or any offering of shares orShare Equivalents, public or private, for the accountof other security holders, including, but not limitedto, an offering of shares or Share Equivalentssponsored, placed or facilitated by the Companyon behalf of such other security holders;Control means the possession, directly orindirectly, by a Person of the power to direct orcause the direction of the management and policiesof another Person through the ownership of votingsecurities or otherwise; provided that the direct orindirect ownership of fifty-one (51%) or more ofthe voting share capital of a Person is deemed toconstitute control of that Person;Country means the Republic of India;Distribution means (i) the transfer of cash orother property without consideration, whether byway of dividend or otherwise, or (ii) the purchaseof shares or redemption of shares or ShareEquivalents of the Company for cash or property;Dollar or $ means the lawful currency of theUnited States of America;EGM means the extraordinary general meetingof the Companys shareholders;Equity Share means an equity share in theCompany with a nominal value of Rs. 10 each;Exercise Period has the meaning as set forth inArticle 190B (b) (i);Financial Year means the accounting year of theCompany commencing each year on April 1 andending on the following March 31, or such otherperiod as the Company, upon thirty (30) days priornotice to IFC, from time to time designates as itsaccounting year;Fully Diluted Basis means with respect to anycalculation of the number of outstanding sharesof the Company, calculated as if all ShareEquivalents outstanding on the date of calculationhave been exercised or exchanged for orconverted into Equity Shares;General Meeting means either an EGM or an AGM;Independent Director means a director of theCompany who: (i) has not been employed by the

Company or its Affiliates in the past five years, (ii)is not, and is not affiliated with a company that isan advisor or consultant to the Company or itsAffiliates, (iii) is not affiliated with a significantcustomer or supplier of the Company or itsAffiliates, (iv) has no personal service contractswith the Company, its Affiliates, or its seniormanagement, (v) is not a Member of the immediatefamily of an individual who is, or has been duringthe past five years, employed by the Company orits Affiliates as an executive officer; and (vi) is nota Controlling Person of the Company (or Memberof a group of individuals and/or entities thatcollectively exercise Control over the Company);IFC means International Finance Corporation;IFC Shares means the Shares to be subscribedor, as the case may be, subscribed by IFC pursuantto the IFC Subscription;IFC Subscription means the subscription forShares by IFC on terms and conditions agreed towith the Sponsor Group;Key Subsidiary means any Subsidiary of theCompany that meets any of the followingconditions: (i) the Companys and its otherSubsidiaries investments in and advances to suchSubsidiary exceed fifty percent (50 %) of the totalassets of the Company and its Subsidiaries,consolidated as of the end of the most recentlycompleted fiscal year of the Company, (ii) suchSubsidiarys share of the total assets (after inter-company eliminations) of the Company and itsSubsidiaries exceeds fifty percent (50%) of suchassets, consolidated as of the end of the mostrecently completed fiscal year of the Company, or(iii) such Subsidiarys share in the income fromcontinuing operations before income taxes,extraordinary items and cumulative effect of achange in accounting principles of the Companyand its Subsidiaries exceeds fifty percent (50%)of such income, consolidated as of the end of themost recently completed fiscal year of theCompany;Lien means any mortgage, pledge, charge,assignment, hypothecation, security interest, titleretention, preferential right, trust arrangement, rightof set-off, counterclaim or bankers lien, privilegeor priority of any kind having the effect of security,any designation of loss payees or beneficiaries orany similar arrangement under or with respect to


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any insurance policy or any preference of onecreditor over another arising by operation of law;MDFL means Modern Dairy Farms Limited, acompany incorporated under the laws of India andhaving its registered office at 136 KM, G.T. Road,Karnal -132001, Haryana;Observer has the meaning set forth in Article191 (1);Offer Securities means all or any portion of theEquity Shares issued or issuable to IFC from totime and proposed by IFC to be included in aCompany Offering;Offering Expenses means any and all reasonableout-of-pocket expenses incurred in connectionwith the Company Offering, including, but not limitedto, the reasonable fees and disbursements of onefirm of counsel (other than in-house counsel)retained by IFC in connection with such CompanyOffering, but excluding customary underwritingdiscounts and commissions;Operations means the operations, activities andfacilities of the Company and the Subsidiaries(including the design, construction, operations,maintenance, management and monitoring thereofas applicable) in the Country;Overriding Articles means Articles 189 to 189B,190 to 190 F , 66(4)-(6), 68, 69, 73,191, 115, 117,118, 124 and 192 are the Overriding Articles;Person means any natural person, corporation,company, partnership, firm, voluntary association,joint venture, trust, unincorporated organization,Authority or any other entity whether acting in anindividual, fiduciary or other capacity;Related Party means any Person that: (i) is anAffiliate of another specified Person; (ii) servesas a director, officer, employee, partner, executor,or trustee of such specified Person; (iii) in whichsuch specified Person holds a material interest,including by way of holding any shares; or (iv)that holds a material interest in such specifiedPerson. With respect to an individual, RelatedParty shall include any individual who is Memberof such individuals Family Members, and anyPerson who is a Related Party of that FamilyMember. For the purpose of this definition, materialinterest shall mean a direct or indirect ownershipof voting shares representing at least 20% of theoutstanding voting power or equity of a Person;

Required Liquidity means an average tradingvolume of the Companys Shares of at least 70,000Shares per trading day. The Required Liquidityshall in respect of a relevant date, be determinedby taking the average trading volume of theCompanys Shares on the stock exchange(s)where the Companys Shares are listed, asmeasured over a period of 6 months prior to suchrelevant date;Selling Shareholder has the meaning set forth inArticle 190B(a);Shares means the Equity Shares of all classes ofthe Company;Share Capital means the total paid up share capitalof the Company determined on a Fully Diluted Basis;Share Equivalents means preference shares,bonds, loans, warrants, options or other similarinstruments or securities which are convertible intoor exercisable or exchangeable for, or which carrya right to subscribe for or purchase, Equity Shares;Shareholdersrefers to any Person holdingShares or Share Equivalents of the Company andShareholder shall refer to any one of them, asthe context may require;Shareholding the number or the percentage (asthe context may require) of Shares held by aShareholder on a Fully Diluted Basis, unlessexpressly provided otherwise, in relation to thetotal number of Shares held by all the Shareholders;Sponsor Group means Krishan Kumar Goyal, acitizen of the Republic of India currently residing at67, Sector 7, Panchkula, Haryana, Alka Goyal,Amarjit Goyal, Aditya Goyal, Sonam Goyal,Chandigarh Finance Private Limited, BhanuInvestments and Commerce Limited, Shree GaneshInvestments and Industries Limited, Nabha FinancePrivate Limited, Bharat Forgings Private Limited,Krishan Kumar Goyal (HUF) and Amarjit Goyal (HUF)(collectively the Sponsor Group);Subsidiary means with respect to the Company,an Affiliate over fifty percent (50%) of whose capitalis owned, directly or indirectly, by the Company;Trade Sale means (i) any amalgamation, merger,consolidation, reconstitution, restructuring, sale ofShares or similar transaction that results in aChange in Control of the Company or any of itsKey Subsidiaries, or (ii) the sale or Transfer of allor substantially all of the business, operations or

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assets of the Company or of any of its KeySubsidiaries;Transfer means to transfer, sell, convey, assign,pledge, hypothecate, create a security interest inor Lien on, place in trust (voting or otherwise),transfer by operation of law or in any other waysubject to any encumbrance or dispose of,whether or not voluntarily;Transfer Notice has the meaning set forth inArticle 190B(b) (i);World Bank means the International Bank forReconstruction and Development, an internationalorganization established by Articles of Agreementamong its Member countries;

(ii) That in the existing Article 1 (Interpretation), thefollowing definitions be substituted for the existingdefinitions, as follows:Auditors means the independent auditors of theCompany, acceptable to IFC, appointed from timeto time, in accordance with the terms of theseArticles;Director means a director of the Companynominated and elected from time to time inaccordance with Article 191;

(iii) That the words Subject to the provisions of theseArticles be inserted prior to second paragraph ofArticle 4 (Division of Capital).

Substitutions/deletions:-(iv) That the existing Article 38 be substituted with the

following new clause:38. TRANSFERABILITY OF SHARESSubject to the provisions of section 111 A of theAct, and other provisions of these Articles, includingArticles 190B and 190E, the Shares or debenturesand any interest therein of the Company shall befreely transferable.

(v) That the existing Article 41 be substituted with thefollowing new clause:41. NOTICE OF REFUSAL TO REGISTER TRANSFERIf the Board refuses to register the transfer of orthe transmission by operation of law of the right toany share in accordance with Article 35, theCompany shall within one month from the date onwhich the instrument of transfer or the intimationof such transmission, as the case may be, waslodged with the Company, send to the transfereeand the transferor or to the person giving intimation

of such transmission, as the case may be, noticeof the refusal.

(vi) That the words Subject to the provisions of theseArticles be inserted at the beginning of Article 53(Power to Sub-divide and consolidate shares),Article 56 (Power to modify rights) and Article 186(Winding Up).

(vii) That the existing Article 61 be substituted with thefollowing new clause:61. TRANSFERABILITY OF DEBENTURESSubject to the provisions of section 111 A of theAct the debentures of the Company shall be freelytransferable.

(viii)That in existing Article 66, the following newclauses (4) to (6) be inserted as follows:(4) The notice shall include an agenda/explanatorystatement setting out the business proposed to betransacted at the General Meeting and the text ofany resolutions proposed to be passed at suchmeeting. No business (other than the mattersspecified in the notice for the General Meeting)shall be transacted at any General Meeting.(5) A General Meeting may be convened at a shorternotice with consent of such majority ofShareholders as prescribed by the Act, providedthat IFC should have consented to such shorternotice period.(6) The Board shall provide the Companys previousfinancial years audited financial statements to allShareholders at least thirty (30) days before theAGM is held to approve and adopt such auditedfinancial statements.

(ix) That the existing Articles 68, 69 and 73 be deletedand substituted with the following clauses:68. QUORUM TO BE PRESENT WHEN BUSINESSCOMMENCEDNo business shall be transacted at any generalmeeting unless a quorum of members is present atthe time when the meeting proceeds to business.The quorum for a General Meeting shall beShareholders holding a majority of the Shares thenoutstanding.69. WHEN QUORUM IS NOT PRESENT, MEETINGTO BE DISSOLVED AND TO BE ADJOURNED.In the absence of a valid quorum at a GeneralMeeting, duly convened and held, the meeting shallbe adjourned to the same day in the next week, atthe same time and place or to such other day and


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at such other time and place as the Board maydetermine.73. HOW QUESTIONS TO BE DECIDED ATMEETINGS. CASTING VOTEEvery question submitted to a meeting shall bedecided, in the first instance by a show of hands,and in the case of an equality of votes, both on ashow of hands and on a poll. The Chairman of themeeting shall not have a casting vote.

(x) That the existing Article 115 be deleted andsubstituted with the following clause:115. MEETING OF DIRECTORS(a) The Board shall meet at least once every fiscalquarter (i.e., once every three (3) months), subjectto an annual schedule and confirmation of the dateof the next Board meeting at the previous Boardmeeting. Meetings of the Board shall be held inChandigarh at the corporate office of the Companyor at such other place as may be reasonablydetermined by the Board of Directors.(b) Written notice of each meeting of the Board ora committee shall be given to the Directors, anyObserver, and their alternates, if any, at theaddress notified from time to time by the Directors,any Observer, and their alternates, at least fifteen(15) days in advance of such meeting, providedthat a shorter period of notice may be given withthe written approval of a majority of the Directors,including the IFC Director.(c) An agenda setting out in detail the items ofbusiness proposed to be transacted at a meetingof the Board or committee together with necessaryinformation and supporting documents shall becirculated to each of the Directors, any Observer,and their respective alternates at least fifteen (15)days prior to the date of the relevant meeting,provided that a shorter period of notice may begiven with the written approval of a majority of theDirectors, including the IFC Director.(d) The reasonable costs incurred by the IFCDirector and/or an IFC Alternate Director or theObserver in attending a meeting of the Board orcommittee or a General Meeting (including thereasonable costs of travel and attendance of theObserver) shall be reimbursed by the Company.

(xi) That the existing Articles 117, 118, 120 and 124 bedeleted and substituted with the following clauses:

117. CHAIRMANThe Board shall appoint a Chairman of its meetingsand determine the period for which he is to holdoffice. The Chairman shall preside at all meetingsof the Board and at all General Meetings. If no suchChairman is appointed or if at any meeting of theBoard, the Chairman is not present within fifteenminutes after the time appointed for holding thesame, the Directors present shall close some oneof their numbers to be the Chairman of suchmeeting. The Chairman shall not have a casting orsecond vote at any meeting of the Board or anycommittee in the event of an equality of votes.118. QUORUM(a) The quorum for a meeting of the Board, dulyconvened and held, shall be a majority of theDirectors.(b) In the absence of a valid quorum at a meeting ofthe Board, duly convened, the meeting shall beadjourned to the same time and place not earlierthan ten (10) days but no later than twenty-one(21) days thereafter as the Chairman maydetermine. The quorum requirements as set out inArticle 118 (a) above shall also be applicable atsuch adjourned meeting of the Board.(c) Subject to Applicable Law, any Director shall beentitled to participate in a meeting of the Board inwhich he or she is not physically present, bytelephone or video conference or similar electronicmeans and the Chairman of such meeting shallrecord such Directors observations in the minutesof such meeting.120.OMITTED124.RESOLUTION BY CIRCULATION OR WRITTENCONSENTNo resolution shall be deemed to have been dulypassed by the Board or a committee by circulationor written consent, unless the resolution has beencirculated in draft, together with the informationrequired to make a fully-informed good faith decisionwith respect to such resolution and appropriatedocuments required to evidence passage of suchresolution, if any, to all Directors (including anyObservers) or to all Members of the committee,and to all other Directors (including any Observers)or Members at their usual address, and has beenunanimously approved in writing by such of themas are entitled to vote on the resolution.

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Insertions :-(xii) That after the existing Article 188, the following

new Articles be inserted:189. IFC CONSENT RIGHTS(a) Notwithstanding anything to the contrary, theCompany, and where applicable, its KeySubsidiaries shall not take the following decisionsand actions without the prior written consent ofIFC:(i) amend or make any change in the Charter of theCompany in any way which may alter or changethe rights, privileges or preferences of the IFCShares;(ii) make or enable any change in the designations,powers, rights, preferences or privileges, or thequalifications, limitations or restrictions of any IFCShares, including by issuance or authorization ofany securities having a structural or legalpreference over the IFC Shares with respect toany matter, including, without limitation, dividendrights, voting rights or liquidation preference;(iii) authorize or undertake any Trade Sale;(iv) authorize or undertake any reduction of capital;(v) proceed with any liquidation, winding up orbankruptcy, reorganization or other analogousinsolvency proceeding of the Company or any KeySubsidiary;(vi) change the nature of Business of the Companyor commence any new business;(vii) amend any of the terms and conditions of thelong-term milk supply agreement entered betweenthe Company and MDFL;(viii) deregister or delist the Company, or any of itslisted Shares or Share Equivalents; and(ix) create a new Subsidiary; and(x) issue any new Shares at a per share pricebelow Rs. 60.189A. SPECIAL MAJORITY CONSENT RIGHTSNotwithstanding anything to the contrary, theCompany, and where applicable, its KeySubsidiaries shall not take the following decisionsand actions without the prior written consent ofthe majority of the Board of Directors, includingthe IFC Director (if appointed by IFC) and theunanimous consent of the Independent Directorsof the Company:(i) undertake any transactions with any Related

Party of the Company (including any Director,employee, officer or an Affiliate of the Company),or any Related Party of any Key Subsidiary orRelated Party of the Sponsor Group, other than onarms length basis;(ii) change the Companys Auditor (except as maybe required by IFC under the terms of these Articles)or change the Financial Year of the Company;(iii) declare or make any payment of any Distributioninconsistent with the Charter or dividend policy ofthe Company.189B. INFORMATION RIGHTS(a) As long as IFC holds any of the Shares in theCompany, the Company shall deliver to IFC thefollowing information:Quarterly unaudited financial statements andaudited annual financial statements for theCompany (on a consolidated basis) prepared inaccordance with the Accounting Standards andcertified by the Auditors;Provided that, the Company shall not be requiredto deliver any information described in this Article189B(a) to IFC, (A) if such delivery would be inviolation of Applicable Law or (B) following adetermination by the Board of Directors that theCompany has a substantial and bona fide businessreason not to disseminate such information andsuch delay or failure to disseminate suchinformation does not violate Applicable Law (andonly for so long as such substantial and bona fidebusiness reason continues). The Company shallensure that all Shareholders of the Company(including IFC and the Sponsor Group) have fairand timely access to all material information relatedto the Company on an equitable basis; it beingunderstood that if any information is provided to aDirector in his capacity as Director and is nototherwise required to be provided or disclosed tothe Shareholders, and if the possession of suchinformation would prohibit IFC from trading in thesecurities of the Company (e.g., unpublished pricesensitive information), then unless otherwisedetermined by the Board of Directors for substantialand bona fide business reasons, the Companyshall promptly publish such information.(b) The Company shall promptly provide to IFC suchinformation as IFC from time to time requests withregard to any material developments in or affecting


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the Companys Business and/or Operations.(c) Upon IFCs request, and with reasonable priornotice to the Company, permit representatives ofIFC during normal business hours to visit theprincipal facility of the Company, to discuss theaffairs, finances and accounts of the Companyand its Key Subsidiaries with the appropriateofficers of the Company.190. OWNERSHIP AND SHARE RETENTIONThe Sponsor Group shall, for so long as IFC is aShareholder, collectively maintain an aggregatevoting and economic interest (which interest shallinclude the right to vote and the right to receive aproportionate share of dividends, profits, liquidationproceeds and other similar amounts distributed bythe Company) in the Company equal to at least45% of the Equity Shares issued and outstandingfrom time to time, such that the Sponsor Group asa group shall for such time be the single largestShareholder of the Company.190A. PRE-EMPTIVE RIGHT(a) IFC shall have the right to purchase its pro ratashare of New Securities (as defined below), as ofimmediately prior to the issuance of the NewSecurities.(b) If the Company proposes to issue NewSecurities, it shall give IFC written notice of itsintention, describing the New Securities, their priceand their general terms of issuance and specifyingIFCs pro rata share of such issuance. IFC shallhave thirty (30) days after any such notice is mailedor delivered to agree to purchase up to its pro ratashare of the New Securities for the price and onthe terms specified in such notice.(c) New Securities shall mean any shares orShare Equivalents of the Company; provided thatthe term New Securities does not include:(i) Equity Shares (or options to purchase EquityShares) issued or issuable to officers, directorsand employees of the Company pursuant to theCompanys employee stock option plan;(ii) Equity Shares issuable upon the exercise orconversion of Share Equivalents issued; and(iii) Equity Shares issuable in a Company Offering(not being a private placement of Equity Shares).190B. TAG-ALONG RIGHTS(a) If any of the Sponsor Group (each, a SellingShareholder and all of them, collectively, the

Selling Shareholders) proposes to Transfer(directly or indirectly) any Shares or ShareEquivalents to a third party Transferee (a Buyer)(being a Person other than any other Sponsor) andif such Transfer would result in the shareholdingof the Sponsor Group falling below 45%, then IFCshall have the right, but not the obligation, toparticipate in such Transfer in accordance withthis Article.(b) (i) The Selling Shareholders will promptly, but inany case not later than thirty (30) days prior to theproposed date of closing of any such Transfergive notice (the Transfer Notice) to IFC. TheTransfer Notice shall describe in reasonable detailthe proposed Transfer, including but not limited tothe number of Shares to be Transferred, theconsideration to be paid, other material terms andconditions of the proposed Transfer, and the nameand address of each Transferee. IFC shall havethe right to participate in the proposed Transfer bynotifying the Selling Shareholders within a periodof twenty five (25) days from IFCs receipt of theTransfer Notice (the Exercise Period) of thenumber of Shares it wishes to Transfer.(ii) IFC shall ordinarily be entitled to Transfer thenumber of Shares obtained by multiplying thenumber of the Shares to be transferred by theSelling Shareholders by a fraction, the numeratorof which shall be (A) the number of Shares thenheld by IFC and the denominator of which shall be(B) the aggregate number of Shares then held bythe Selling Shareholders and IFC. However, if theproposed Transfer would result in the shareholdingof the Sponsor Group falling below 26%, or iffollowing the proposed Transfer of the Shares heldby IFC would account for less than five percent(5%) of the Shares then outstanding, IFC mayTransfer up to all of the Shares held by IFC inpreference to any other Shareholder, including theSelling Shareholder.(iii) Any Transfer by IFC shall be made onsubstantially the same terms and conditions asdescribed in the Transfer Notice. However, IFC shallnot be required to make any representation orwarranty to the Buyer, other than as to good title toany Shares that IFC proposes to Transfer, absenceof material Liens with respect to such Shares, andcustomary representations concerning IFCspower and authority to undertake the proposed

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Transfer, and the validity and enforceability of IFCsobligations in connection with it.(c) The Selling Shareholders shall have a periodof thirty (30) days from the expiration of theExercise Period in which to Transfer to the Buyerthe Shares proposed to be Transferred (including,if applicable, any Shares to be Transferred byIFC), upon terms and conditions (includingconsideration for the Transfer) no more favorablethan those specified in the Transfer Notice. If theSelling Shareholders do not complete the Transferwithin such period, IFCs tag-along rights shall beapplicable to any subsequent proposed Transferby the Selling Shareholders.(d) To the extent that any Buyer refuses topurchase Shares from IFC (upon exercise of itstag-along rights) hereunder, the Sell ingShareholders shall not Transfer to that Buyer anyof their Shares unless, prior to or simultaneouslywith such Transfer, the Selling Shareholdersacquire from IFC the Shares that IFC wishes toTransfer in accordance with this Article.190C. OFFERING RIGHTS(a) Right to Participate in an Overseas CompanyOffering. If the Company proposes to undertakean offering/ listing of its Shares on any stockexchange other than an Indian Stock Exchange(Overseas Company Offering), the Company shallgive notice to IFC promptly of its intention to do so,specifying the other material terms of suchproposed Overseas Company Offering. Upon therequest of IFC delivered to the Company withinthirty (30) days after receipt of the Companysnotice, the Company shall include in such OverseasCompany Offering all of the offer securitiesspecified by IFC in a request delivered to theCompany within twenty (20) days after the dateof the Companys notice.(b) Trading. If the Company lists its Shares on anysecurities exchange or other trading market (otherthan an Indian Stock Exchange), the Company shall,to the fullest extent permitted by law, take all suchactions as may be necessary or appropriate to listall Shares, or Shares issued or issuable in respectof Shares owned by IFC, such that such Shareswill be freely tradable by IFC on such market. Foravoidance of doubt it is clarified that if consequentupon a listing of its Shares on any stock exchangeor other trading market (other than an Indian Stock

Exchange), the IFC Shares will be automaticallylisted and tradable on such stock exchange, thenthis Article 190C(b) shall not be applicable.(c) Cut-backs. If an Overseas Company Offering(as referred to in Article 190C(a)) is anunderwritten offering, and the managingunderwriter advises the Company that, in itsopinion, the number of Shares and/or securitiesproposed to be included in such Company Offeringshould be limited due to market conditions, then theCompany shall so advise IFC, and the number ofShares and/or securities to be included in suchCompany Offering shall be allocated (i) first, to theCompany for securities being sold for its ownaccount, (ii) second, to IFC, and (iii) finally, to otherSelling Shareholders of such Shares or securities,if any.Notwithstanding any such limitation, if the Companylists its Shares on any non-Indian securitiesexchange or other trading market, the Companyshall, to the fullest extent permitted by law, take allsuch actions as may be necessary or appropriateto list all Shares, or Shares issued or issuable inrespect of Share Equivalents owned by IFC, suchthat such Shares will be freely tradable by IFC onsuch market.(d) Costs. The Company shall pay all OfferingExpenses incurred in connection with eachCompany Offering (as referred to in Article190C(a)), including but not limited to any costsreasonably incurred by IFC in connection with itsparticipation or proposed participation in any suchoffering (other than customary underwriterdiscounts).(e) Underwritten Offerings. If an OverseasCompany Offering (as referred to in Article190C(a)) involves an underwritten offering, andIFC has elected to participate in such offering, IFCshall sell the Offer Securities to be included in suchoffering to the underwriters selected by theCompany on the same terms and conditions asapply to the Company or the relevant Sponsor.However, IFC shall not be required to make anyrepresentation or warranty to any Person inconnection with such offering except (i) that it hasgood title to and that there are no material Liens onthe Offer Securities or other securities, as the casemay be, to be sold by IFC, and (ii) its authority toenter into, and the validity and binding effect of,


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any agreements made by IFC in connection withsuch offering and such other disclosures as maybe required under Applicable Law. If anyregistration statement in connection with anyCompany Offering refers to IFC by name orotherwise as the holder of any securities of theCompany, then IFC shall have the right to require (i)the insertion therein of language, in form andsubstance satisfactory to IFC to the effect that theholding by it of such securities is not to beconstrued as a recommendation by it of theinvestment quality of the Companys securitiescovered thereby and that such holding does notimply that IFC will assist in meeting any futurefinancial requirements of the Company, or (ii) in theevent that such reference to IFC by name orotherwise is not required by the applicablesecurities laws, the deletion of the reference toIFC.(f) Indemnification. To the extent permitted by law,the Company will indemnify and hold harmless IFC,and its officers, directors, employees andconsultants, and legal advisers, from and againstany loss, claim or liability (and any actions,proceedings or settlements in respect thereof)arising out of or based on (i) any untrue statementof a material fact contained in any prospectus,offering circular, or other offering document, (ii)any failure to state therein a material fact necessaryto make the statements therein not misleading, and(iii) any violation of Applicable Law (including butnot limited to, securities laws and exchangerequirements applicable to such CompanyOffering); provided, that the Company shall not beliable under this Article to the extent that any suchloss, claim or liability is based on any writtenstatement furnished by IFC to the Companyexpressly for inclusion in such offering document.(g) IFC Not a Promoter. IFC shall not be deemed tobe a promoter of the Company and the Sharesheld by IFC shall not be subject to any statutory orregulatory moratorium imposed on promotershareholdings, nor shall any declaration orstatement be made, either directly or indirectly, infilings with any Authority, offer documents orotherwise, with a view to ensure that restrictionsunder Applicable Law (including, the Guidelines, ifapplicable) to promoters do not apply to IFC, whichis a financial investor in and not promoter of theCompany.

The Company shall at its own cost make any andall applications to statutory and regulatoryAuthorities that may be required to obtain anynecessary Authorization or exemption.190D. TRANSFERABILITY OF IFC SECURITIESSave and except as expressly provided in theseArticles and subject to provisions of ApplicableLaw, the IFC Shares shall be freely transferable.190E. RIGHT OF FIRST OFFER(a) If at any time IFC wishes to sell a portion or all ofthe IFC Shares, as the case may be, constitutingsuch percentage of the Share Capital of theCompany which exceeds 4.5% (but without therequirement of having received a purchase offerfor those Shares from a third party) (OfferShares), it shall notify the Sponsor Group of itsdesire to sell and provide each of the individuals/entities of the Sponsor group a right of first offerover the Offer Shares, by making the Sponsor Groupan offer of sale of the Offer Shares (Right of FirstOffer).(b) The Sponsor Group shall have thirty (30) daysfrom the date of notification by IFC (Offer Notice),to express its desire to purchase, either directly orappoint a merchant banker to identify a third party topurchase, the Offer Shares at a price specified bythe Sponsor Group (Offer Price) by sending anotice in this regard to IFC (Sponsor Notice).(c) If the Offer Price set out in the Sponsor Notice isacceptable to IFC then IFC may within (15) daysfrom the date of notification by the Sponsor Groupeither confirm its willingness to sell the Offer Sharesat the Offer Price to the Sponsor Group or the thirdparty identified by the merchant banker(Acceptance Notice) or decline the offer so madeby the Sponsor Group.(d) Subject to obtaining applicable Authorizations,within forty-five (45) days of the receipt of theAcceptance Notice from IFC (which forty-five dayperiod may be extended as necessary if anygovernmental Authorizations are required to beobtained), the Transfer of the Offer Shares at theOffer Price to the Sponsor Group or the third partyidentified by the merchant banker shall be completed.(e) If the Sponsor Group or the third party identifiedas aforesaid abstains from responding to the OfferNotice within the required time period, or if the OfferPrice is not acceptable to IFC and consequently IFCdeclines the Sponsor Group/identified third party

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offer, the Sponsor Groups offer, IFC shall be freeto offer for sale, within five (5) months of the lapseof the fifteen (15) day period referred to in Article190E(c) above, any or all of its Shares thereafter toany Person on terms similar to, or better for IFC,than terms of the original Sponsor Group/identifiedthird party offer. At the expiry of such five monthperiod, in the event IFC wishes to sell any Sharesconstituting such percentage of the Share Capitalof the Company exceeding 4.5%, the procedureset out in this Article 190E shall again be followed.190F. PUT OPTIONThe Sponsor Group have granted to IFC an option,exercisable upon the occurrence of events mutuallyagreed to between them, to sell to the SponsorGroup, all or a portion of the IFC Shares on termsmutually agreed to between them (Put Option).191. BOARD COMPOSITION(1) For so long as IFC holds at least five per cent(5%) shareholding in the Company, IFC shall havethe right, but not the obligation, to appoint one director(the IFC Director) to the Board of Directors of theCompany, which shall include any alternate director(the IFC Alternate Director) or a non-votingobserver (the Observer) nominated by IFC in his/her place) to the Board. The IFC Director shall notbe required to hold qualification shares nor be liableto retire by rotation.(2) Upon the appointment of each IFC Director andeach IFC Alternate Director, the Company shallensure compliance with the provisions of the Act,including by filing all necessary forms with theRegistrar of Companies.(3) The IFC Director/Observer shall be entitled to: (i)receive notice of any meeting of the Board (whichnotice shall be accompanied by all documentsprovided to other Directors, in accordance withArticle 115 (c)) and (ii) attend all the meetings of theBoard, including any committee thereof.(4) The Board shall constitute an audit committee(the Audit Committee) and any other committeeconsistent with good corporate practice and theregulatory requirements in the Country in force fromtime to time. The Observer shall have the right toattend any meetings of the Audit Committee. Anyfinancial audit of the Company must be approvedby the Audit Committee. IFC shall have the right tohave the IFC Director appointed to any committees

formed by the Board.(5) To the maximum extent permitted by ApplicableLaw, the Company shall fully indemnify each of theIFC Director (and IFC Alternate Director, as may beapplicable) and the Observer against all liability (civilor criminal) incurred by him by virtue of being aDirector or the Observer, including advancement ofexpenses.192. OVERRIDING ARTICLESIn the event of any inconsistency between theprovisions of the Overriding Articles and any otherprovisions of these Articles, the terms of theOverriding Articles shall apply.

By order of the Board

Place : Chandigarh Anubha GargDated: 26th August, 2008 Company Secretary

NOTES:(i) A member entitled to attend and vote at the meeting

is entitled to appoint a proxy to attend and vote (ona poll) instead of himself/herself and the proxy neednot be a member of the Company. Proxy in order tobe effective must be received by the Company notless than 48 hours before the meeting. A blank proxyform is enclosed. A proxy so appointed shall nothave any right to speak at the meeting.

(ii) The explanatory statement u/s173(2) of theCompanies Act, 1956 regarding item no. 4 & 5 of thenotice is annexed hereto.

(iii) The Register of Members and share transfer booksof the Company will remain closed from22nd September, 2008 to 29th September, 2008(both days inclusive) for Annual General Meetingpurpose.

(iv) Members holding shares in the dematerialised modeare requested to intimate all changes with respectto their addresses, bank details, mandate etc., totheir respective Depository Participant (DP). Thesechanges will be automatically reflected inCompanys records, which will help the Companyto provide efficient and better services to themembers.

(v) Members who wish to obtain any information onthe Company or view the Accounts for the financial


12

year ended 31st March, 2008, may send theirqueries at least 10 days before the Annual GeneralMeeting to the Company Secretary at CompanysOffice at SCO 98-99, Sub-City Centre, Sector 34,Chandigarh - 160 022.

(vi) Details under Clause 49 of the Listing Agreementwith the Stock Exchange in respect of Directorsseeking appointment/re-appointment at the AnnualGeneral Meeting, is annexed hereto.



EXPLANATORY STATEMENT PURSUANT TO SECTION173 (2) OF THE COMPANIES ACT, 1956 ITEM NO. 4M/s A Goel & Associates, Statutory Auditors of theCompany who hold office till the conclusion of thisAnnual General Meeting, have informed the Companythat they do not wish to seek re-appointment as StatutoryAuditors of the Company for the financial year 2008-09.In view of the above, and based on the recommendationsof the Audit Committee, the Board of Directors, has, atits meeting held on 26th August, 2008 proposed theappointment of M/s S.R. Batliboi & Co., CharteredAccountants as the Statutory Auditors of the Companyin place of M/s. A. Goel & Associates for the financialyear 2008-09.The Company has received a special notice from aMember of the Company, in terms of the provisions ofthe Companies Act,1956, signifying his intension topropose the appointment of M/s. S.R. Batliboi & Co.,Chartered Accountants as the Statutory Auditors of theCompany from the conclusion of this Annual GeneralMeeting till the conclusion of the next Annual GeneralMeeting of the Company. M/s. S.R. Batliboi & Co.,

Chartered Accountants have expressed their willingnessto act as Statutory Auditors of the Company, if appointed,and have further confirmed that the said appointmentwould be in conformity with the provisions ofSection 224(1B) of the Companies Act, 1956.TheMembers approval is being sought for the appointmentof M/s. S.R. Batliboi & Co., Chartered Accountants as theStatutory Auditors of the Company for the year 2008-09.The Directors commend the resolution at item no. 4 forapproval of the Members.None of the Directors of the Company is concerned orinterested in the resolutionITEM NO. 5The Company and its Promoter group has entered intoSubscription Agreement (the SSA), ShareholdersAgreement (the SHA) and the Put Option Agreement(collectively referred to as the Agreements) all datedJuly 1, 2008 with the International Finance Corporation-Washington, DC-USA whereby IFC has subscribed to46,50,000 Equity Shares of Rs. 10/- each of the Companyat a price of Rs. 60/- per share aggregating toRs. 279 million. One of the conditions of the saidAgreements is to incorporate certain rights of IFC in theArticles of Association of the Company. Hence the SpecialResolution as set out in Item No.5 of the notice is placedbefore the members for approval.The said Agreements are available for inspection by anymember at the Registered Office of the Company on anyworking day between 11 A.M. and 1.00 P.M. upto andincluding the date of meeting.The Directors commend the resolution at item no. 5 forapproval of the Members.None of the Directors of the Company is concerned orinterested in the resolution.



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INFORMATION REGARDING DETAILS OF THEDIRECTORS SEEKING APPOINTMENT /REAPPOINTMENT IN ANNUAL GENERAL MEETINGFIXED ON 29TH SEPTEMBER, 2008 PURSUANT TOCLAUSE 49 OF THE LISTING AGREEMENT

1. Name of Director : Dr.Bhupendra Nath MathurDate of Birth : 17.10.1943Date of Appointment : 18.08.1993Expertise in Specific Functional Area: Dr. Mathurhas over 40 years of experience in dairy field. He hasserved as Director of National Dairy Research Institute,Karnal and has retired as Director of National Academyof Agricultural Research and Management, Hyderabad.He possesses a vast experience in Management andAdministration.Qualification: PhD in Dairy Technology from NDRI,KarnalList of other Directorships held: NILChairman/Member of the Committee of theBoard of Directors of the Company :Audit Committee - MemberRemuneration Committee - ChairmanChairman/Member of the Committee ofDirectors of other companies - NILHolding in Company: As on 31.03.2008,Dr. Mathur holds Nil Equity Shares of the Company.

2. Name of Director : Mr. Satish TandonDate of Birth : 13.04.1946Date of Appointment : 30.12.2005Expertise in Specific Functional Area: Mr. Tandonhas got over 40 years of experience in manufacturing

and commercial areas and had served as ManagingDirector in Alfa Laval (India) Ltd. for 8 years.Qualification: Bachelor of Engineering (ChemicalEngineering) from IIT Delhi and Post Graduate Diplomain Marketing and Sales Management from FMS, DelhiUniversity.List of other Directorships held:(i) ESAB India Limited(ii) Kolte Patil Developers Limited(iii) Precision Pipes and Profiles Co. Ltd.Chairman/Member of the Committee of theBoard of Directors of the Company :Audit Committee - MemberInvestors Grievances Committee - MemberRemuneration Committee - MemberAllotment Committee - MemberChairman/Member of the Committee ofDirectors of other companies :ESAB India LimitedAudit Committee - MemberInvestors Grievances Committee - MemberKolte Patil Developers LimitedAudit Committee - MemberInvestors Grievances Committee - MemberPrecision Pipes and Profiles Co. Ltd.Audit Committee - MemberInvestors Grievances Committee - MemberHolding in Company: As on 31.03.2008, Mr. Tandonholds 4190 Equity Shares of the Company.


14

DIRECTORS REPORTDear Members,Your Directors have pleasure in presenting the 16th

Annual Report together with the Audited Accounts ofthe Company for the year ended 31st March, 2008.

FINANCIAL HIGHLIGHTS(Rs. in Lacs)

Year Ended Year Ended31.03.2008 31.03.2007

Net Sales and other Income 41360 17365Operating Profit 2784 794Interest 1150 188Cash Profit 1634 606Depreciation 566 190Profit before Tax 1069 416Net Profit 660 285

PERFORMANCEDuring the year under review the Companys operationsgot a quantum jump due to successful implementation ofits ongoing Modernization-cum-Expansion plan. The netsales and other income is Rs.413.60 crores as againstRs.173.65 crores in previous year. The operating profithas also gone up to Rs. 27.84 crores this year asagainst Rs. 7.94 crores last year and profit before tax isRs.10.69 crores as compared to Rs.4.16 crores duringthe previous year.EXPORTSThe companys exports, under its Nulife brand, increasedto new heights and achieved Rs. 126.59 crores asagainst Rs. 18.22 crores in the previous year. Inrecognition, the Company has been given the status ofStar Export House by the Govt. of India.INVESTMENT IN RURAL DAIRY INFRASTRUCTURETo continue with the Companys focus on developmentof its own milk collection from the villages, Modern Dairies,has extended its reach to more than 1500 villages ofHaryana, Punjab and Rajasthan by installing bulk milkcoolers and milk chilling centres. This is also in line withthe Companys commitment towards economic and socialprosperity of the dairy farmers.EQUITY INVESTMENT BY IFC (INTERNATIONALFINANCE CORPORATION, WASHINGTON, DC -USA)Your directors are pleased to report that IFC (privatefinancing arm of the World Bank) has made an Equity

investment in the Company on private placement basis inJuly, 2008. This shows their long term commitment andconfidence in the future growth, which augurs well forthe Company.

CHANGES IN CAPITAL STRUCTUREThe following changes took place in the capital structureof the Company during the year: -(i) 8753100 Bonus equity shares in the ratio of 1:1

were allotted by the Board of Directors in October2007 to the shareholders holding shares as on theRecord Date.

(ii) To part finance the ongoing Modernization-cum-Expansion plan, the Company allotted 46,50,000equity shares to International Finance Corporation Washington, DC-USA (a private financing arm ofthe World Bank) at the price of Rs.60 per share(including premium of Rs.50 per share) on privateplacement basis in July, 2008.

(iii) In November 2007, the Promoter & Promoter groupwere allotted 30,00,000 warrants, on preferentialbasis, convertible into equity shares at a price ofRs.81 per share to be converted within a period of18 months from the date of allotment, of which11,63,661 warrants were converted into equityshares in July, 2008.

Post aforesaid changes the total paid up share capital ofthe Company stands at Rs.2,33,588,610 with InternationalFinance Corporation holding 19.94% and Promoter &Promoter group holding 45.69% of the total issued sharecapital of the Company.

EXTERNAL COMMERCIAL BORROWING (ECB)To part finance the ongoing project, the Company hasalso entered into a Loan Agreement with InternationalFinance Corporation (IFC) for a loan of US Dollar 8.5million by way of External Commercial Borrowing (ECB)subject to Companys obtaining RBI and other necessaryapprovals in this regard.PROJECTThe ongoing Modernization-cum-Expansion project hasbeen estimated at Rs.171 crore. The commercialproduction from the 2nd Casein Manufacturing Line hasstarted in October 2007. The other project work tostrengthen Milk Procurement Infrastructure, Manufactureof Pharmaceutical Grade Lactose and Co-generation ofPower etc. is in progress. It is expected to completewithin this financial year except the co-generation ofpower which is expected to complete in the next financialyear.

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LAND FOR NEW PROJECTThe Company has purchased an industrial plot for itsfuture expansion in the milk rich belt located at IndapurIndustrial Area on the National Highway, Distt. Pune,Maharashtra.CURRENT OPERATIONSThe current year has started with new challenges asthe Government of India has withdrawn incentivesavailable for the export of dairy products. Your Companyis affected due to Governments decision to withdraw9% DEPB benefits on the Casein exports and 5% VKGUYon export of other dairy products from 17th April 2008.

In the first quarter of the current year, the Company hasachieved a higher turnover of Rs.127.65 crores ascompared to Rs.76.76 crores, previous year. But it hasearned a profit before tax of Rs. 2.01 crores ascompared to Rs.3.39 crores in the same quarter,previous year.

TECHNOLOGY DEVELOPMENTYour Company has continuous focus on processdevelopment, technology innovation, suitable for itscustomers. After successfully launching Edible GradeAcid Casein, the focus was to develop Rennet Caseinfrom cow-buffalo mixed milk available in our milk shed.Our team has successfully developed a process,suitable for the production of Edible Grade Rennet Caseinof international standards to be used for manufactureof Analogue Cheese and Imitation Cheese.Further, after supplying international quality Edible GradeLactose in the market, your Company has successfullystandardised and adopted an innovative process forthe industrial production of Refined Grade Edible Lactoseand Pharma Grade Lactose.

QUALITY, FOOD SAFETY & ENVIRONMENTSTANDARDS(ISO 9001:2000, ISO 14001 and HACCP Certifications)Your Companys manufacturing facilities continue tomaintain the prestigious ISO 9001:2000, ISO 14001 andHACCP Certification by DNV Netherlands, a leadingInternational Certification Company. It is an indicator ofthe Companys commitment for quality, food safety andmaintaining environmental standards.DIRECTORSDr. Bhupendra Nath Mathur and Mr. Satish Tandon,Directors of the Company shall retire by rotation at theensuing Annual General Meeting and being eligible have

offered themselves for re-appointment.AUDITORSM/s. A. Goel & Associates, Chartered Accountants whoare the Statutory Auditors of the Company hold office, inaccordance with the provisions of the Companies Act,1956, upto the conclusion of the forthcoming AnnualGeneral Meeting. M/s. A. Goel & Associates havecommunicated that they do not wish to seekre-appointment at the ensuing Annual General Meeting.Your management puts on record their sincereappreciations for the excellent work done byM/s. A. Goel & Associates during their tenure sinceinception of the Company.The Board recommends the appointment ofM/s. S.R. Batliboi & Co., Chartered Accountants, as theStatutory Auditors of the Company from the conclusionof the ensuing Annual General Meeting until theconclusion of the next Annual General Meeting. M/s.S.R. Batliboi & Co. has also expressed their willingnessto act as auditors of the Company, if appointed and haveconfirmed their eligibility. In this regard, attention of themembers is invited to item no. 4 of the Notice conveningthe forthcoming Annual General Meeting.Your Directors have appointed M/s V. Kumar &Associates as Cost Auditors of the Company for theyear 2008-09 to conduct the cost audit subject to theapproval of the Central Government.

AUDITORS REPORTAll the comments of Statutory Auditors on the Annualaccounts are self explanatory and require no furthercomments.

FIXED DEPOSITSThe outstanding deposits at the end of the fiscal yearunder review amount to Rs.1801.14 Lacs (Previous yearRs.1918.62 Lacs). There are no overdue deposits.

CORPORATE GOVERNANCE AND MANAGEMENTDISCUSSION & ANALYSISA separate report on Corporate Governance andManagement Discussion & Analysis is attached to thisreport.HUMAN RESOURCESHarmonious employee relations prevailed throughout theyear. Your Directors place on record their appreciationfor all categories of employees for their hard work anddedication.The statement showing particulars of employees as


16

required under Section 217 (2A) of the Companies Act,1956 read with the Companies (Particulars of Employees)Rules, 1975 as amended is enclosed as Annexure Aand forms part of this report.

CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION, FOREIGN EXCHANGE EARNINGSAND OUTGO.Information as per Section 217 (1) (e) of the CompaniesAct, 1956 read with Companies (Disclosure of particularsin the report of Board of Directors) Rules 1988, is givenin the Annexure B and forms part of this report.DIRECTORS RESPONSIBILITY STATEMENTPursuant to Section 217(2AA) of the CompaniesAct,1956,your Directors confirm that:(i) In the preparation of the annual accounts for the

financial year ended 31st March, 2008, theapplicable accounting standards have beenfollowed and that there were no materialdepartures.

(ii) The accounting policies selected by them havebeen applied consistently, and they have madejudgments and estimates that are reasonable andprudent so as to give a true and fair view of thestate of the Company as on 31st March 2008 andprofit of the Company for the year ended 31stMarch 2008.

(iii) They have taken proper and sufficient care for themaintenance of adequate accounting records inaccordance with the provisions of the CompaniesAct, 1956 for safeguarding the assets of theCompany and for preventing and detecting fraudsand other irregularities.

(iv) The annual accounts have been prepared on agoing concern basis.

APPRECIATIONYour Directors wish to place on record their sincereappreciation to International Finance Corporation-Washington, DC - USA for the confidence reposed bythem in the Company and also to the Companys bankersand all business associates of the Company for theircontinued support.

For & on behalf of the Board

Place: Chandigarh Krishan Kumar GoyalDated: 26th August, 2008 Chairman & Mg. Director

MANAGEMENT DISCUSSION AND ANALYSISINDUSTRY STRUCTURE & DEVELOPMENTSThe dairy industry in India is growing at a rapid pace.With India maintaining its status as the largest producerof milk in the World and annual growth rate of 3-4%, thedairy industry in India is poised for major development.Of the total milk produced in the country it is estimatedthat only 18% to 20% is processed by the organizedsector. The remaining balance milk is consumed throughunorganized channels. With the growth of organizedsector which is providing regular and remunerative marketto the producer, this share is expected to go up at a fastrate. This will ensure a regular availability of raw materialto the industry.Globally, the demand for nutritional products is growingand a great potential is available for the growing dairyindustry in India to meet this demand. Your Company hasalready undertaken Expansion and Diversification projectfor production of value added products like Edible GradeCasein, Whey Protein Concentrates and Edible GradeLactose / Pharma Grade Lactose etc.

OPPORTUNITIES AND THREATSThe world milk production is growing at the rate ofabout 1.5% where as the demand for milk products aregrowing at about 2.4%. This difference in demand andsupply is likely to be available to India which is growingat 3.5 - 4%. The prices of milk in the developed countriesare going up due to phasing out of subsidies and thisprovides a competitive edge to Indian producers in theInternational Market. With the current growth rate ofmilk production, India is going to be a major force in theGlobal Trade of dairy products in the International Market.

The Indian Milk Industry is still facing technical barriers totrade like restriction on exports of Edible Grade DairyProducts from India into the European nations. Thereare other countries too like Russia, Mexico, Malaysia,Brazil, where Indian products can not be exported dueto non availability of Mutual Trade Agreement betweenIndia and respective Governments.

RISK & CONCERNLike any agro based industry, the dairy industry is alsodependent on the vagaries of nature which affect theproduction of milk.

INTERNAL CONTROL SYSTEMS AND THEIRADEQUACYModern Dairies Limited has a proper and adequate systemof internal controls to ensure that transactions are

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properly recorded, authorized and reported.The Company has in place well documented andstructured systems and procedures in line with the bestof practices and well defined roles and responsibilitiesfor people in all functions at various levels. The Companyis certified as ISO 9001:2000 (Quality System), ISO 14001(Environment System) and HACCP (Food Safety System)by DNV, Netherlands.

There is adequate Management Information System.Management review meetings are held periodically tomonitor and control functions of the Company. Internalaudit on regular basis is carried out to ensure propercontrol.FINANCIAL PERFORMANCE AND RESULTS OFOPERATIONSDuring the year under review the Company achievednet sales and other income of Rs.413.60 crores asagainst Rs.173.65 crores in previous year. It has earnedprofits before tax of Rs.10.69 crores as compared toRs.4.16 crores during the previous year. The Companyexported products worth Rs. 126.59 crores during theyear under review as compared to Rs.18.22 croresduring the last year.

HUMAN RESOURCESThe Company regards its employees as the mostvaluable asset and continuously reviews and evolvespolicies and procedures to attract and retain its pool oftechnical and managerial personnel through a conducivework environment.

CAUTIONARY STATEMENTThe Management Discussion and Analysis report maycontain statements that might be considered forwardlooking. These statements are subject to certain risksand uncertainties. Actual results may differ materiallyfrom those expressed in the statement as importantfactors could influence the Companys operations suchas Government policies, local, political and economicdevelopment, risk inherent to the Companys growth andsuch other factors.


Place: Chandigarh Krishan Kumar GoyalDated: 26th August, 2008 Chairman & Mg. Director

Annexure A to Directors ReportStatement pursuant to section 217(2A) of the Companies Act, 1956 and the

Companies (Particulars of Employees) Rules, 1975S. Name Age Designation/ Gross Qualification Total Date of PreviousNo (Years) Nature of Remune- Experi- Commence employment/

Duties ration ence -ment of position held(Rs.) (Years) Employment

1 Mr. Krishan Kumar 51 Chairman & 42,07,189 B.Com.,LLB 28 22.04.92 Managing DirectorGoyal Mg. Director & CEO

Modern Steels Ltd.

Notes: (1) Gross remuneration comprises salary, allowances, monetary value of perquisites, and the Companys contributionsto Provident and Superannuation Funds but excludes contribution to Gratuity Fund on the basis of actuarial valuationas separate figures are not available. Mr. Goyal is also Mg. Director & CEO of Modern Steels Limited.

(2) The nature of employment is contractual


Place : Chandigarh Krishan Kumar GoyalDated : 26th August, 2008 Chairman & Managing Director


18

Annexure B to Directors ReportInformation as per section 217(1)(e) read with Companies (Disclosure of particulars in the Report of Board ofDirectors) Rules, 1988 and forming part of the Directors Report for the year ended 31st March, 2008.FORM AA) POWER AND FUEL CONSUMPTION

Current year Previous Year2007-08 2006-07

POWERa) Electricity PowerPurchase Units (Kwh) 1,59,51,034 52,77,920Total Amount (Rs.) 6,79,39,027 2,19,56,149Rate per Unit (Rs.) 4.26 4.16b) Other GenerationThrough Diesel GeneratorUnit (Kwh) 34,34,648 18,21,010Total Amount (Rs.) 3,20,04,743 1,74,52,013Unit per litre of Diesel Oil 3.23 3.25Cost / Unit (Rs.) 9.32 9.58FUELQuantity (MT) 35,706 15,696Total Amount (Rs.) 7,54,32,984 2,91,55,157Rate / Unit (Rs.per MT) 2,112.61 1,857.49

B) CONSUMPTION PER UNIT OF PRODUCTIONProducts :Liquid Milk, Skimmed Milk Powder, Whole Milk Powder,Dairy Whitener, Pure Ghee, Butter, Casein,WPC, Lactose etc.Unit per 1000 kgs. of milk processedElectricity (kwh) 68.97 55.96Fuel Quantity (Kgs.) 154.43 123.73

NOTE :As the Company manufactures several products, it is impracticable to apportion the utilities to different products.However, consumption of electricity and fuel has been given per thousand kgs. of milk processed.FORM B1. RESEARCH AND DEVELOPMENT (R&D)

The Company is in the production of Edible Grade Acid Casein since last year. It was working on developmentof Rennet Casein. But the challenge was how to use commercially available cow-buffalo mixed milk for themanufacture of Rennet Casein of international standards.The Company has now developed a process utilizing commercially available cow-buffalo mixed milk forindustrial production of Rennet Casein conforming to international standards suitable for the manufacture ofAnalogue Cheese and Imitation Cheese.

2. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATIONThe Company has successfully standardised the process for production of Rennet Casein, adopting theprocess developed by it.The Company has successfully standardised and adopted an innovative process for the industrial productionof Refined Grade Edible Lactose and Pharma Grade Lactose.

3. FOREIGN EXCHANGE EARNINGS AND OUTGOParticulars with regard to Foreign Exchange earnings and outgo appear on the relevant Schedule of theBalance Sheet.

For & on behalf of the BoardPlace : Chandigarh Krishan Kumar GoyalDated : 26th August, 2008 Chairman & Mg. Director

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CORPORATE GOVERNANCE REPORTIn line with the requirement for providing a Report on Corporate Governance as per Clause 49 of the revised ListingAgreement of the Stock Exchange as applicable, given below is a report on Companys Corporate Governancenorms.COMPANYS PHILOSOPHY ON CODE OF CORPORATE GOVERNANCEModern Dairies Limited is committed in adopting the best practices of Corporate Governance. The Company endeavoursto act on the principles of transparency, accountability, trusteeship and integrity. The ultimate objectives being ofrealising long term shareholder value, while taking into account the interest of other stakeholders.1 BOARD OF DIRECTORS

A. Composition of the Board of DirectorsA list of directors including the Chairman of the Board and their status as executive / non-executive andindependent / non-independent for the year ended 31st March, 2008 is set out below:-

Name of the Category of the Director No of No of other No. of LastDirector Board Directorships Committee AGM

meetings in Public positions in attendedattended Company public cos

Chairman Member

Mr.Krishan Kumar Chairman & Managing 6 3 - 1 YesGoyal Director- Non Independent

(Promoter) Director

Dr. Bhupendra Non Executive 5 - - 1 YesNath Mathur Independent Director

Mr. Amarjit Goyal Non Executive 6 1 - - YesNon Independent(Promoter) Director

Mrs. Alka Goyal Non ExecutiveNon Independent 2 1 - - No(Promoter) Director

Mr.Satish Tandon Non Executive 5 3 - 7 YesIndependent Director

Prof. Satish Kapoor Non Executive 5 - 2 - YesIndependent Director

Mr. P.K.Bansal* Non ExecutiveIndependent (Nominee) 5 - - 1 YesDirector

Mr. H.S.Oberoi Executive Non Independent 6 - - 1 YesDirector (Operations)

* Mr. Hardyal Sehrawat replaced Mr. P.K. Bansal as nominee director of Govt. of Haryana w.e.f. 25.04.2008.


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B. Board Meeting and AttendanceDuring the financial year ended 31st March, 2008, Six meetings of Board of Directors were held. The details ofBoard Meetings held during the year are as under:-

Date of Board Meeting Boards Strength No of Directors Present

30th April, 2007 8 6

23rd July, 2007 8 8

27th August, 2007 8 7

26th October, 2007 8 5

21st November, 2007 8 7

30th January, 2008 8 7

C. Boards Processes

It has always been the Companys policy and practice that apart from matters requiring Boards approval bystatute, all major decisions including quarterly results of the Company, financial restructuring, capitalexpenditure proposals, collaborations, material investment proposals in joint venture/promoted companies,sale and acquisition of material nature of assets, mortgages, guarantees, donations etc, are regularly placedbefore the Board. This is in addition to information with regard to actual operations, major litigation feed backreports, information on Senior Level appointments just below the Board Level and minutes of all CommitteeMeetings.The information as required under Corporate Governance is being made available to the Board as and whenapplicable.

2. COMMITTEES OF THE BOARDA. Audit Committeea. (i) The Company has Audit Committee as per provisions of the Listing Agreement and under section 292A

of the Companies Act, 1956, which consist of Independent and non executive Directors namelyProf. Satish Kapoor, Dr. Bhupendra Nath Mathur and Mr. P. K. Bansal*.

(ii) The Chairperson of the Audit Committee, Prof. Satish Kapoor is a non executive independent Director.(iii) All of the above Directors are financially literate and have accounting and related financial management

expertise.(iv) The Chairperson was present at the last Annual General Meeting to answer the Shareholders queries.(v) The Company Secretary of the Company, namely, Ms. Anubha Garg is the Secretary of the Audit

Committee.* Mr. Satish Tandon, who is a non executive independent director, replaced Mr. P.K. Bansal as amember of the Audit Committee w.e.f. 25.04.2008.

b. The Committee met five times during the year on 30th April 2007, 23rd July 2007, 27th August 2007,26th October 2007and 30th January 2008. The status of attendance of members at the Audit Committeewas as under:

Name of Director No. of Meetings attended during 2007-2008

Prof. Satish Kapoor 4

Dr. Bhupendra Nath Mathur 4

Mr. P. K. Bansal 4

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ANNUAL REPORT

c. Powers of Audit Committee The Audit Committee has the following powers as amended from timeto time:-1. To investigate any activity within its terms of reference.2. To seek any information from any employee.3. To obtain outside professional legal advice.4. To secure attendance of outsiders with relevant expertise, if considered necessary.

d. Role of Audit Committee1. Oversight of the Companys financial reporting process and the disclosure of its financial information

to ensure that the financial statement is correct, sufficient and credible.

2. Recommending to the Board, the appointment, reappointment and, if required, the replacement orremoval of the Statutory Auditor and the fixation of audit fee

3. Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors.

4. Reviewing, with management, the annual financial statements before submission to the Board forapproval with particular reference to:

a. Matters required to be included in the Directors Responsibility statement to be included in theBoards Report in terms of clause (2AA) of Section 217 of the Companies Act, 1956.

b. Changes, if any, in accounting policies and practices and reasons for the same.

c. Major accounting entries involving estimates based on the exercise of judgement by management.

d. Significant adjustments made in the financial statements arising out of audit findings

e. Compliance with Listing and other legal requirements relating to financial statements.

f. Disclosure of any related party transactions i.e. transactions of the Company of material nature,with promoters or the management, their subsidiaries or relatives etc., that may have potentialconflict with the interests of Company at large.

g. Qualifications in draft audit report.

5. Reviewing with the management, the quarterly financial statements before submission to the Boardfor approval.

6. Reviewing with the management, performance of the statutory and internal auditors, adequacy ofinternal control systems.

7. Reviewing the adequacy of internal audit function, if any, including the structure of the internal auditdepartment, staffing and seniority of the official heading the department, reporting structure coverageand frequency of internal audit.

8. Discussion with internal auditors on any significant findings and follow-up thereon.

9. Reviewing the findings of any internal investigations by the internal auditors into matters wherethere is suspected fraud or irregularity or a failure of internal control system of a material natureand reporting the matter to the Board.

10. Discussion with Statutory Auditors before the audit commences, about the nature and scope ofaudit as well as post-audit discussion to ascertain any area of concern.

11. To look into the reasons for substantial defaults in the payment to the depositors, debentureholders, shareholders (in case of non payment of declared dividends) and creditors.

12. To review the functioning of Whistle Blower mechanism, in case the same is existing.


22

13. Carrying out any other function, which may be specified as a role of the Audit Committee underamendments, if any, from time to time as per the Listing Agreement, Companies Act, 1956, and otherstatutes.

e. Review of information by Audit Committee

The Audit Committee has the power to mandatorily review the following information:-1. Management discussion and analysis of financial conditions and results of operations,

2. Statement of significant related party transaction (as defined above), as submitted by management,

3. Management letters/ letters of internal control weakness issued by the Statutory Auditors,

4. Internal Audit Reports relating to internal control weakness and

5. The appointment, removal and terms of remuneration of the chief internal auditors shall be subjectto review by the Audit Committee.

B. Remuneration Committee

The Company has a Remuneration Committee to review and recommend payment of annual salaries, commission,service agreements and other employment conditions of the Executive Directors comprising Managing Director/Director (Operations). The Committee fixes the remuneration after taking into consideration remunerationpractices followed by Companies of similar size and standing in the industry. The Committee periodicallyreviews and recommends suitable revision in remuneration package of Executive Directors to the Board.

Remuneration Committee comprises of three Directors as its members. All members of the Committee are nonexecutive and persons of repute and have sound knowledge of management practices.

Chairman of the Committee Dr. Bhupendra Nath Mathur is a non executive independent director nominated bythe Board. The power and role of the Remuneration Committee is as per guidelines set out in the ListingAgreement. The constitution of the Remuneration Committee is as under:

Name of the Director Status of Member

Dr. Bhupendra Nath Mathur Independent Chairman

Prof. Satish Kapoor Independent Member

Mr. Satish Tandon Independent Member

During the year one meeting of the Remuneration Committee was held on 23rd July, 2007.

Remuneration Policy

The Managing Director and Director (Operations) are paid remuneration as per the terms approved by theBoard of Directors and confirmed by the shareholders of the Company. Service contracts are entered into interms of regulations governing their appointment and terms of remuneration. The remuneration is fixed consideringvarious factors such as qualification, experience, expertise, prevailing remuneration in the competitive industries,financial position of the Company etc. The remuneration structure comprises Basic Salary, Perquisites andallowances, contribution to Provident Fund and other funds in accordance with various related provisions ofthe Companies Act, 1956.

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ANNUAL REPORT

Details of Remuneration paid to the Directors during the Financial year ended 31st March, 2008(Amount in Rs.)

Name of the Director Salary Perquisites Performance Stock Option Sitting Total& other bonus/ Feebenefits commission

Mr. Krishan Kumar Goyal* 38,90,000 3,17,189 - NIL - 42,07,189

Dr. Bhupendra Nath Mathur - - - NIL 50,000 50,000

Mr. Amarjit Goyal - - - NIL 30,000 30,000

Mrs.Alka Goyal - - - NIL 10,000 10,000

Mr. Satish Tandon - - - NIL 40,000 40,000

Prof Satish Kapoor - - - NIL 85,000 85,000

Mr.P.K.Bansal - - - NIL 45,000 45,000

Mr. H.S. Oberoi 10,02,903 5,77,671 - NIL - 15,80,574

* The Company has provided remuneration of Chairman & Mg. Director Mr. Krishan Kumar Goyal amounting toRs. 42.07 lacs which requires Central Government approval, which is pending, in view of the fact that he isdrawing remuneration from Modern Steels Limited also. As per appointment terms the remuneration permissible isRs. 35.10 lacs taking into account the minimum remuneration permissible in Modern Steels Limited amounting toRs. 21.07 lacs.C. Shareholders/Investors Grievances Committee

The Company has formed a Shareholders/Investors Grievances Committee under the Chairmanship of a non-executive Director. The list of present member and the chairman of the Committee is as follows:Name of the Director Member/ChairmanProf . Satish Kapoor Chairman

Mr. Satish Tandon Member

Mr. H.S. Oberoi MemberThe Committee looks into the redressing of shareholders and investors complaints like transfer of shares, non-receipt of balance sheet, change of address etc. Meetings of this Committee were held on 23rd July 2007,26th October 2007 and 30th January, 2008.The functioning and terms of reference of the Committee are as prescribed under the Listing Agreement withthe Stock Exchange with particular reference to transfer, dematerialization, complaints of shareholders etc.The Company attends to the investors grievances/ correspondence expeditiously and usually a reply is sentwithin 10 days of receipt of letter, except in cases that are constrained by dispute or legal impediment.

D. Share Transfer CommitteeFor the expeditious disposal of the share transfer and allied services Company has formed a Share TransferCommittee to look into and decide matters pertaining to transfer, duplicate share certificates and relatedmatters.

E. Allotment CommitteeThe Board in its meeting held on 21st November, 2007 constituted an Allotment Committee of Directors comprisingof Prof. Satish Kapoor and Mr. H.S. Oberoi as its members to approve the allotment of Securities i.e Shares /Debentures / Warrants etc. from time to time. A meeting of this committee was held on 29th November, 2007. Thecommittee was reconstituted on 28th May, 2008 by the Board of Directors by addition of two new members tothe Committee namely Mr. Satish Tandon and Mr. Krishan Kumar Goyal.


24

F. Banking & Finance CommitteeThe Board in its meeting held on 21st November, 2007 constituted a Banking & Finance Committee of Directorscomprising of Mr Krishan Kumar Goyal, Prof. Satish Kapoor and Mr. H.S. Oberoi as its members.

Prof. Satish Kapoor is the Chairman of the Committee. The Terms of reference of the Banking & FinanceCommittee are as under:

To exercise all powers to borrow moneys (otherwise than by issue of debentures), from time to time, such thatthe amount of all such borrowings including bonds / debentures, but excluding temporary loans obtained fromthe bankers in the ordinary course of business outstanding at any time shall not exceed Rs.100 Crore andtaking necessary actions connected therewith including refinancing for optimization of borrowing costs.

To open & close Bank Account(s) in the name of the Company and to authorise/withdraw authorization ofvarious officers of the Company to operate the Bank Account(s) of the Company.

Giving of guarantees/issuing letter of comfort/providing securities within the limits approved by the Board.

To provide corporate guarantee/performance guarantee by the Company within the limits approved by theBoard.

To carry out any other function as is mandated by the Board from time to time and/or enforced by any statutorynotification, amendment or modification as may be applicable.

Other transactions or financial issues that the Board may desire to have them reviewed by the Banking &Finance Committee.

Delegate authorities from time to time to the Executives /Authorised persons to implement the decisions of theCommittee.

Regularly review and make recommendations about changes to the Charter of the Committee

Three meetings of the Committee were held on 30th November 2007, 14th January 2008 and 16th February, 2008during the year.

3. Ms. Anubha Garg, Company Secretary is the Compliance Officer of the Company.4. Details of last three Annual General Meetings (AGMs)Financial Year Location Date Time

2004 - 05 Registered office : 136 KM., G.T. Road, Karnal 132 001 (Haryana) 17.06.2005 11.00 A.M.



During the year an Extraordinary General Meeting of the Company was held on 21st November 2007 at 11:00 a.m. atRegistered office: 136 KM., G.T. Road, Karnal 132 001 (Haryana)Special Resolutions passed in previous three AGMs:

(i) In the 13th AGM dated 17.06.2005, Special Resolution passed for approval of remuneration of Chairman &Managing Director, Mr. Krishan Kumar Goyal for the period from 02.11.2005 to 01.11.2007.

(ii) In the 15th AGM dated 27.08.2007, Special Resolution passed for approval of appointment & remunerationof Chairman & Managing Director, Mr. Krishan Kumar Goyal for the period from 02.11.2007 to 01.11.2012.

(iii) In the 15th AGM dated 27.08.2007, Special Resolution passed for approval of issue of Bonus shares in theratio of 1:1.

The Company passed no resolution through postal ballot during the year.

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ANNUAL REPORT

5. DISCLOSURES1. None of the transactions with any of the related parties were in conflict with the interests of the

Company at large. Transaction with related parties are disclosed in Note No. 8 of Schedule XV to theAccounts in the Annual Report.

2. There has been no non-compliance penalties/strictures imposed on the Company by Stock Exchange(s)or SEBI or any other statutory authority, on any matter related to capital markets, during the last threeyears.

3. The Company has complied with the above Mandatory Requirements of Corporate Governance & theCompany has not adopted any Non Mandatory Requirements of Corporate Governance exceptRemuneration Committee, Allotment Committee and Banking & Finance Committee.

6. MEANS OF COMMUNICATIONThe quarterly /half yearly/ yearly results of the Company and information relating to Annual General Meeting,Book Closures is published in The Economic Times/ The Hindustan Times/ The Financial Express (all editions)/Financial World and Dainik Jagran / Hari Bhoomi i.e in English and regional language newspapers and is alsonotified to the Stock Exchange as required under the Listing Agreement. In addition, the Company also filesquarterly results , shareholding pattern etc. in such form so as to enable Stock Exchange to put it on theirwebsite.

Management Discussion and Analysis forms part of the Annual Report, which is posted to theshareholders.

GENERAL SHAREHOLDER INFORMATION1. Annual General Meeting:-

Day, Date & Time : Monday the 29th September, 2008 at 11.00 a.m.Venue : 136 KM, G.T.Road, Karnal 132 001 (Haryana)

2. Financial Calendar for :-Adoption of Quarterly Results Ended:- In the Month of (tentative)30th June, 2008 25th July, 2008 (already held)30th September, 2008 October, 2008 (last week)31st December, 2008 January, 2009 (last week)31st March, 2009 May, 2009 (last week)Annual General Meeting By September, 2009

3. Book Closure Date :-From 22nd September, 2008 to 29th September, 2008 (both days inclusive)

4. Listing on Stock Exchanges :-Your Company is listed at Bombay Stock Exchange Ltd.

5. Stock Code :-BSE : 519287ISIN No. in NSDL & CDSL : INE617B01011


26

6. Stock Data :-

Month MODERN DAIRIES LTD. ON BSE BSE SENSEXHigh Low Close Volume High Low Close(Rs.) (Rs.) (Rs.)

2007

April 26.10 19.40 23.00 130367 14,383.72 12,425.52 13,872.37

May 26.05 20.55 26.05 198106 14,576.37 13,554.34 14,544.46

June 30.60 22.90 30.60 330019 14,683.36 13,946.99 14,650.51

July 62.50 26.65 62.50 995035 15,868.85 14,638.88 15,550.99

August 109.95 56.30 109.95 2146294 15,542.40 13,779.88 15,318.60

September 212.15 92.50 97.00 1871266 17,361.47 15,323.05 17,291.10

October* 112.20 70.50 109.40 650149 20,238.16 17,144.58 19,837.99

November 114.85 72.80 85.60 868056 20,204.21 18,182.83 19,363.19

December 101.55 82.00 85.90 1323952 20,498.11 18,886.40 20,286.99

2008

January 97.50 53.25 54.90 1054675 21,206.77 15,332.42 17,648.71

February 53.85 43.00 49.75 363886 18,895.34 16,457.74 17,578.72

March 50.75 33.05 41.10 346323 17,227.56 14,677.24 15,644.44 * The Company declared Bonus in the ratio of 1:1. The share price is ex-bonus w.e.f. 28th September, 2007 .7. Registrars and Share Transfer Agent (For Physical as well as for Demat Segment):-

M/s. MCS Limited,Srivenkatesh Bhawan W-40, Okhla Industrial Area, Phase-II, New Delhi 110 020.Tel. No. : 91-11- 41406149, Fax No.: 91-11- 41709881, E-mail : [email protected]: www.mcsdel.comAll shareholders of the Company can avail online services from our Registrars & Share Transfer AgentsM/s. MCS Limited, with regard to Investors Grievances. Please log in on the site of MCS Limitedwww.mcsdel.com and click on Investors Services and you can register your queries/grievances anddetails as required by you. The registered queries/grievances on the site will be responded by M/s. MCSLimited on priority basis.

8. Shareholding Pattern of the Company as on 31st March, 2008:-

Category No. of shares held %age of shareholding

1. Promoters & Promoter Group 9491118 54.22

2. Mutual Funds and UTI 10400 0.06

3. Foreign Institutional Investors 393762 2.25

4. Bodies Corporate (not included above) 1123659 6.42

5. Indian Public 6203448 35.43

6. NRIs/OCBs 283813 1.62

TOTAL 17506200 100.00

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ANNUAL REPORT

9. Distribution of Shareholding as on 31st March, 2008:-

SHAREHOLDING (IN RS.) SHAREHOLDERS NO OF SHARES

From To Number % of total No. of Shares % of total

Upto 5000 11790 87.86 2722118 15.55

5001 10000 1067 7.95 826163 4.72

10001 20000 289 2.15 453486 2.59

20001 30000 64 0.48 160

bs_march-2008.pdf

Documents

auditors report

statutory auditors

directors report

company tohold office

place ofthe

thefollowing business

special business

ordinary business