Bs March-2008 PDF

ANNUAL REPORT
16TH
BOARD OF DIRECTORS
Chairman & 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 SECRETARY
Ms. Anubha Garg
AUDITORS
M/s A. Goel & Associates
Chartered Accountants
BANKERS
Punjab National Bank
State Bank of India
Canara Bank
CONTENTS
CORPORATE OFFICE
SCO 98-99, Sub City Centre,
Notice ------------------------------------------------ 2
Sector 34, Chandigarh-160 022
Directors Report -------------------------------- 14

Corporate Governance Report -------------- 19
REGISTERED OFFICE & WORKS

136 KM, G.T. Road,
Auditors Report --------------------------------- 29
Karnal - 132 001 (Haryana)
Balance Sheet ----------------------------------- 32

Profit & Loss Account -------------------------- 33
REGISTRARS & SHARE TRANSFER AGENTS
Cash Flow Statement -------------------------- 34
MCS Limited
Srivenkatesh Bhawan, W-40, Okhla Industrial Area,
Schedules ---------------------------------------- 35
Phase II, New Delhi - 110 020
MODERN DAIRIES LIMITED
NOTICE
Accounting Standards means Indian Generally
Accepted Accounting Principles, (Indian GAAP)
issued by the Institute of Chartered Accountants
of India (ICAI), together with its pronouncements
thereon from time to time, and applied on a consistent
basis;
Affiliate means (i) with respect to any person
being an entity, any person directly or indirectly
controlling, controlled by or under common control
with, that person; and (ii) with respect to any natural
person, any Family Member of that person;
AGM means the annual general meeting of the
Companys shareholders;
Applicable Law means all applicable statutes,
laws, ordinances, rules and regulations, including
but not limited to, the Act, any license, permit or
other governmental Authorization, in each case as
in effect from time to time;
Authority means any national, regional or local
government or governmental, administrative, fiscal,
judicial, or government-owned body, department,
commission, authority, tribunal, agency or entity, or
central bank (or any Person, whether or not
government owned and howsoever constituted or
called, that exercises the functions of a central
bank), or stock exchange;
Authorizations means any consent, registration,
filing, notarization, certificate, license, approval,
permit, authority or exemption from, by or with any
Authority, including without limitation all corporate,
creditors and shareholders approvals or consents;
Authorized Representative means any natural
person who is duly authorized by the Company to
act on its behalf for the purposes specified in, and
whose name and a specimen of whose signature
appear on, the Certificate of Incumbency and
Authority most recently delivered to IFC;
Business means production and distribution of
dairy and related products;
Chairman means the chairman of the Board of
Directors of the Company appointed from time to
time in accordance with Article 117;
Change in Control means any Transfer that would
result in the Sponsor Group collectively holding less
than forty-five percent (45%) of the Shareholding
of the Company;
Notice is hereby given that the 16th Annual General

Meeting of the members of Modern Dairies Limited will
be held at its Registered Office at 136 KM, G.T. Road,
Karnal 132 001 (Haryana) on Monday, the
29th September, 2008 at 11:00 a.m. to transact the
following business:
AS ORDINARY BUSINESS:
1.
To consider and adopt the Audited Balance Sheet

as at 31st March, 2008, the Profit & Loss Account
of the Company for the year ended on that date and
the reports of the Directors and Auditors thereon.
2. To appoint a Director in place of Dr. Bhupendra Nath
Mathur, who retires by rotation, and being eligible
offers himself for re-appointment.
3. To appoint a Director in place of Mr. Satish Tandon,
who retires by rotation, and being eligible offers
himself for re-appointment.
4. To consider and if thought fit to pass with or
without modification(s), the following
resolution as an ORDINARY RESOLUTION:
RESOLVED that subject to the provisions of Section
224, 225 and other applicable provisions, if any, of
the Companies Act, 1956, M/s S.R. Batliboi & Co.,
Chartered Accountants, be and are hereby
appointed as Statutory Auditors of the Company to
hold office from the conclusion of this Annual
General Meeting upto the conclusion of the next
Annual General Meeting of the Company, in place of
the retiring Auditors M/s. A. Goel & Associates,
Chartered Accountants, to examine and audit the
accounts of the Company for the financial year
2008-09, at such remuneration as may be mutually
agreed between the Board of Directors of the
Company and the Auditors.
AS SPECIAL BUSINESS:
5. To consider and if thought fit to pass with or
without modification(s), the following
resolution as a SPECIAL RESOLUTION.
RESOLVED that pursuant to section 31 & other
applicable provisions of the Companies Act, 1956
including any statutory modification or re-enactment
thereof, the Articles of Association of the Company
be and are hereby altered in the following manner:
(i) That in the existing Article 1 (Interpretation), the
following definitions be inserted in alphabetical order
as follows:
ANNUAL REPORT
Charter means the Memorandum of Association,
the Articles of Association and the By-Laws of
the Company;
Company Offering means a public offering and
sale of shares or Share Equivalents for the
Companys account or any offering of shares or
Share Equivalents, public or private, for the account
of other security holders, including, but not limited
to, an offering of shares or Share Equivalents
sponsored, placed or facilitated by the Company
on behalf of such other security holders;
Control means the possession, directly or
indirectly, by a Person of the power to direct or
cause the direction of the management and policies
of another Person through the ownership of voting
securities or otherwise; provided that the direct or
indirect ownership of fifty-one (51%) or more of
the voting share capital of a Person is deemed to
constitute control of that Person;
Country means the Republic of India;
Distribution means (i) the transfer of cash or
other property without consideration, whether by
way of dividend or otherwise, or (ii) the purchase
of shares or redemption of shares or Share
Equivalents of the Company for cash or property;
Dollar or $ means the lawful currency of the
United States of America;
EGM means the extraordinary general meeting
of the Companys shareholders;
Equity Share means an equity share in the
Company with a nominal value of Rs. 10 each;
Exercise Period has the meaning as set forth in
Article 190B (b) (i);
Financial Year means the accounting year of the
Company commencing each year on April 1 and
ending on the following March 31, or such other
period as the Company, upon thirty (30) days prior
notice to IFC, from time to time designates as its
accounting year;
Fully Diluted Basis means with respect to any
calculation of the number of outstanding shares
of the Company, calculated as if all Share
Equivalents outstanding on the date of calculation
have been exercised or exchanged for or
converted into Equity Shares;
General Meeting means either an EGM or an AGM;
Independent Director means a director of the
Company who: (i) has not been employed by the
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Company or its Affiliates in the past five years, (ii)

is not, and is not affiliated with a company that is
an advisor or consultant to the Company or its
Affiliates, (iii) is not affiliated with a significant
customer or supplier of the Company or its
Affiliates, (iv) has no personal service contracts
with the Company, its Affiliates, or its senior
management, (v) is not a Member of the immediate
family of an individual who is, or has been during
the past five years, employed by the Company or
its Affiliates as an executive officer; and (vi) is not
a Controlling Person of the Company (or Member
of a group of individuals and/or entities that
collectively exercise Control over the Company);
IFC means International Finance Corporation;
IFC Shares means the Shares to be subscribed
or, as the case may be, subscribed by IFC pursuant
to the IFC Subscription;
IFC Subscription means the subscription for
Shares by IFC on terms and conditions agreed to
with the Sponsor Group;
Key Subsidiary means any Subsidiary of the
Company that meets any of the following
conditions: (i) the Companys and its other
Subsidiaries investments in and advances to such
Subsidiary exceed fifty percent (50 %) of the total
assets of the Company and its Subsidiaries,
consolidated as of the end of the most recently
completed fiscal year of the Company, (ii) such
Subsidiarys share of the total assets (after intercompany eliminations) of the Company and its
Subsidiaries exceeds fifty percent (50%) of such
assets, consolidated as of the end of the most
recently completed fiscal year of the Company, or
(iii) such Subsidiarys share in the income from
continuing operations before income taxes,
extraordinary items and cumulative effect of a
change in accounting principles of the Company
and its Subsidiaries exceeds fifty percent (50%)
of such income, consolidated as of the end of the
most recently completed fiscal year of the
Company;
Lien means any mortgage, pledge, charge,
assignment, hypothecation, security interest, title
retention, preferential right, trust arrangement, right
of set-off, counterclaim or bankers lien, privilege
or priority of any kind having the effect of security,
any designation of loss payees or beneficiaries or
any similar arrangement under or with respect to

any insurance policy or any preference of one
creditor over another arising by operation of law;
MDFL means Modern Dairy Farms Limited, a
company incorporated under the laws of India and
having its registered office at 136 KM, G.T. Road,
Karnal -132001, Haryana;
Observer has the meaning set forth in Article
191 (1);
Offer Securities means all or any portion of the
Equity Shares issued or issuable to IFC from to
time and proposed by IFC to be included in a
Company Offering;
Offering Expenses means any and all reasonable
out-of-pocket expenses incurred in connection
with the Company Offering, including, but not limited
to, the reasonable fees and disbursements of one
firm of counsel (other than in-house counsel)
retained by IFC in connection with such Company
Offering, but excluding customary underwriting
discounts and commissions;
Operations means the operations, activities and
facilities of the Company and the Subsidiaries
(including the design, construction, operations,
maintenance, management and monitoring thereof
as 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 an
individual, fiduciary or other capacity;
Related Party means any Person that: (i) is an
Affiliate of another specified Person; (ii) serves
as a director, officer, employee, partner, executor,
or trustee of such specified Person; (iii) in which
such specified Person holds a material interest,
including by way of holding any shares; or (iv)
that holds a material interest in such specified
Person. With respect to an individual, Related
Party shall include any individual who is Member
of such individuals Family Members, and any
Person who is a Related Party of that Family
Member. For the purpose of this definition, material
interest shall mean a direct or indirect ownership
of voting shares representing at least 20% of the
outstanding voting power or equity of a Person;
Required Liquidity means an average trading

volume of the Companys Shares of at least 70,000
Shares per trading day. The Required Liquidity
shall in respect of a relevant date, be determined
by taking the average trading volume of the
Companys Shares on the stock exchange(s)
where the Companys Shares are listed, as
measured over a period of 6 months prior to such
relevant date;
Selling Shareholder has the meaning set forth in
Article 190B(a);
Shares means the Equity Shares of all classes of
the Company;
Share Capital means the total paid up share capital
of the Company determined on a Fully Diluted Basis;
Share Equivalents means preference shares,
bonds, loans, warrants, options or other similar
instruments or securities which are convertible into
or exercisable or exchangeable for, or which carry
a right to subscribe for or purchase, Equity Shares;
Shareholders refers to any Person holding
Shares or Share Equivalents of the Company and
Shareholder shall refer to any one of them, as
the context may require;
Shareholding the number or the percentage (as
the context may require) of Shares held by a
Shareholder on a Fully Diluted Basis, unless
expressly provided otherwise, in relation to the
total number of Shares held by all the Shareholders;
Sponsor Group means Krishan Kumar Goyal, a
citizen of the Republic of India currently residing at
67, Sector 7, Panchkula, Haryana, Alka Goyal,
Amarjit Goyal, Aditya Goyal, Sonam Goyal,
Chandigarh Finance Private Limited, Bhanu
Investments and Commerce Limited, Shree Ganesh
Investments and Industries Limited, Nabha Finance
Private 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 capital
is owned, directly or indirectly, by the Company;
Trade Sale means (i) any amalgamation, merger,
consolidation, reconstitution, restructuring, sale of
Shares or similar transaction that results in a
Change in Control of the Company or any of its
Key Subsidiaries, or (ii) the sale or Transfer of all
or substantially all of the business, operations or
ANNUAL REPORT
assets of the Company or of any of its Key
Subsidiaries;
Transfer means to transfer, sell, convey, assign,
pledge, hypothecate, create a security interest in
or Lien on, place in trust (voting or otherwise),
transfer by operation of law or in any other way
subject to any encumbrance or dispose of,
whether or not voluntarily;
Transfer Notice has the meaning set forth in
Article 190B(b) (i);
World Bank means the International Bank for
Reconstruction and Development, an international
organization established by Articles of Agreement
among its Member countries;
(ii) That in the existing Article 1 (Interpretation), the
following definitions be substituted for the existing
definitions, as follows:
Auditors means the independent auditors of the
Company, acceptable to IFC, appointed from time
to time, in accordance with the terms of these
Articles;
Director means a director of the Company
nominated and elected from time to time in
accordance with Article 191;
(iii) That the words Subject to the provisions of these
Articles be inserted prior to second paragraph of
Article 4 (Division of Capital).
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of such transmission, as the case may be, notice

of the refusal.
(vi) That the words Subject to the provisions of these
Articles 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 the
following new clause:
61. TRANSFERABILITY OF DEBENTURES
Subject to the provisions of section 111 A of the
Act the debentures of the Company shall be freely
transferable.
(viii)That in existing Article 66, the following new
clauses (4) to (6) be inserted as follows:
(4) The notice shall include an agenda/explanatory
statement setting out the business proposed to be
transacted at the General Meeting and the text of
any resolutions proposed to be passed at such
meeting. No business (other than the matters
specified in the notice for the General Meeting)
shall be transacted at any General Meeting.
(5) A General Meeting may be convened at a shorter
notice with consent of such majority of
Shareholders as prescribed by the Act, provided
that IFC should have consented to such shorter
notice period.
(6) The Board shall provide the Companys previous
financial years audited financial statements to all
Shareholders at least thirty (30) days before the
AGM is held to approve and adopt such audited
financial statements.
(ix) That the existing Articles 68, 69 and 73 be deleted
and substituted with the following clauses:
68. QUORUM TO BE PRESENT WHEN BUSINESS
COMMENCED
No business shall be transacted at any general
meeting unless a quorum of members is present at
the time when the meeting proceeds to business.
The quorum for a General Meeting shall be
Shareholders holding a majority of the Shares then
outstanding.
69. WHEN QUORUM IS NOT PRESENT, MEETING
TO BE DISSOLVED AND TO BE ADJOURNED.
In the absence of a valid quorum at a General
Meeting, duly convened and held, the meeting shall
be adjourned to the same day in the next week, at
the same time and place or to such other day and
Substitutions/deletions:(iv) That the existing Article 38 be substituted with the

38. TRANSFERABILITY OF SHARES
Subject to the provisions of section 111 A of the
Act, and other provisions of these Articles, including
Articles 190B and 190E, the Shares or debentures
and any interest therein of the Company shall be
freely transferable.
(v) That the existing Article 41 be substituted with the
41. NOTICE OF REFUSAL TO REGISTER TRANSFER
If the Board refuses to register the transfer of or
the transmission by operation of law of the right to
any share in accordance with Article 35, the
Company shall within one month from the date on
which the instrument of transfer or the intimation
of such transmission, as the case may be, was
lodged with the Company, send to the transferee
and the transferor or to the person giving intimation

at such other time and place as the Board may
determine.
117. CHAIRMAN
The Board shall appoint a Chairman of its meetings
and determine the period for which he is to hold
office. The Chairman shall preside at all meetings
of the Board and at all General Meetings. If no such
Chairman is appointed or if at any meeting of the
Board, the Chairman is not present within fifteen
minutes after the time appointed for holding the
same, the Directors present shall close some one
of their numbers to be the Chairman of such
meeting. The Chairman shall not have a casting or
second vote at any meeting of the Board or any
committee in the event of an equality of votes.
118. QUORUM
(a) The quorum for a meeting of the Board, duly
convened and held, shall be a majority of the
Directors.
(b) In the absence of a valid quorum at a meeting of
the Board, duly convened, the meeting shall be
adjourned to the same time and place not earlier
than ten (10) days but no later than twenty-one
(21) days thereafter as the Chairman may
determine. The quorum requirements as set out in
Article 118 (a) above shall also be applicable at
such adjourned meeting of the Board.
(c) Subject to Applicable Law, any Director shall be
entitled to participate in a meeting of the Board in
which he or she is not physically present, by
telephone or video conference or similar electronic
means and the Chairman of such meeting shall
record such Directors observations in the minutes
of such meeting.
120.OMITTED
124.RESOLUTION BY CIRCULATION OR WRITTEN
CONSENT
No resolution shall be deemed to have been duly
passed by the Board or a committee by circulation
or written consent, unless the resolution has been
circulated in draft, together with the information
required to make a fully-informed good faith decision
with respect to such resolution and appropriate
documents required to evidence passage of such
resolution, if any, to all Directors (including any
Observers) or to all Members of the committee,
and to all other Directors (including any Observers)
or Members at their usual address, and has been
unanimously approved in writing by such of them
as are entitled to vote on the resolution.
73. HOW QUESTIONS TO BE DECIDED AT

MEETINGS. CASTING VOTE
Every question submitted to a meeting shall be
decided, in the first instance by a show of hands,
and in the case of an equality of votes, both on a
show of hands and on a poll. The Chairman of the
meeting shall not have a casting vote.
(x) That the existing Article 115 be deleted and
substituted with the following clause:
115. MEETING OF DIRECTORS
(a) The Board shall meet at least once every fiscal
quarter (i.e., once every three (3) months), subject
to an annual schedule and confirmation of the date
of the next Board meeting at the previous Board
meeting. Meetings of the Board shall be held in
Chandigarh at the corporate office of the Company
or at such other place as may be reasonably
determined by the Board of Directors.
(b) Written notice of each meeting of the Board or
a committee shall be given to the Directors, any
Observer, and their alternates, if any, at the
address notified from time to time by the Directors,
any Observer, and their alternates, at least fifteen
(15) days in advance of such meeting, provided
that a shorter period of notice may be given with
the written approval of a majority of the Directors,
including the IFC Director.
(c) An agenda setting out in detail the items of
business proposed to be transacted at a meeting
of the Board or committee together with necessary
information and supporting documents shall be
circulated 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 be
given with the written approval of a majority of the
Directors, including the IFC Director.
(d) The reasonable costs incurred by the IFC
Director and/or an IFC Alternate Director or the
Observer in attending a meeting of the Board or
committee or a General Meeting (including the
reasonable costs of travel and attendance of the
Observer) shall be reimbursed by the Company.
(xi) That the existing Articles 117, 118, 120 and 124 be
deleted and substituted with the following clauses:
ANNUAL REPORT
Insertions :(xii) That after the existing Article 188, the following
new Articles be inserted:
189. IFC CONSENT RIGHTS
(a) Notwithstanding anything to the contrary, the
Company, and where applicable, its Key
Subsidiaries shall not take the following decisions
and actions without the prior written consent of
IFC:
(i) amend or make any change in the Charter of the
Company in any way which may alter or change
the rights, privileges or preferences of the IFC
Shares;
(ii) make or enable any change in the designations,
powers, rights, preferences or privileges, or the
qualifications, limitations or restrictions of any IFC
Shares, including by issuance or authorization of
any securities having a structural or legal
preference over the IFC Shares with respect to
any matter, including, without limitation, dividend
rights, 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 or
bankruptcy, reorganization or other analogous
insolvency proceeding of the Company or any Key
Subsidiary;
(vi) change the nature of Business of the Company
or commence any new business;
(vii) amend any of the terms and conditions of the
long-term milk supply agreement entered between
the Company and MDFL;
(viii) deregister or delist the Company, or any of its
listed Shares or Share Equivalents; and
(ix) create a new Subsidiary; and
(x) issue any new Shares at a per share price
below Rs. 60.
189A. SPECIAL MAJORITY CONSENT RIGHTS
Notwithstanding anything to the contrary, the
Company, and where applicable, its Key
Subsidiaries shall not take the following decisions
and actions without the prior written consent of
the majority of the Board of Directors, including
the IFC Director (if appointed by IFC) and the
unanimous consent of the Independent Directors
of the Company:
(i) undertake any transactions with any Related
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Party of the Company (including any Director,

employee, officer or an Affiliate of the Company),
or any Related Party of any Key Subsidiary or
Related Party of the Sponsor Group, other than on
arms length basis;
(ii) change the Companys Auditor (except as may
be 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 Distribution
inconsistent with the Charter or dividend policy of
the Company.
189B. INFORMATION RIGHTS
(a) As long as IFC holds any of the Shares in the
Company, the Company shall deliver to IFC the
following information:
Quarterly unaudited financial statements and
audited annual financial statements for the
Company (on a consolidated basis) prepared in
accordance with the Accounting Standards and
certified by the Auditors;
Provided that, the Company shall not be required
to deliver any information described in this Article
189B(a) to IFC, (A) if such delivery would be in
violation of Applicable Law or (B) following a
determination by the Board of Directors that the
Company has a substantial and bona fide business
reason not to disseminate such information and
such delay or failure to disseminate such
information does not violate Applicable Law (and
only for so long as such substantial and bona fide
business reason continues). The Company shall
ensure that all Shareholders of the Company
(including IFC and the Sponsor Group) have fair
and timely access to all material information related
to the Company on an equitable basis; it being
understood that if any information is provided to a
Director in his capacity as Director and is not
otherwise required to be provided or disclosed to
the Shareholders, and if the possession of such
information would prohibit IFC from trading in the
securities of the Company (e.g., unpublished price
sensitive information), then unless otherwise
determined by the Board of Directors for substantial
and bona fide business reasons, the Company
shall promptly publish such information.
(b) The Company shall promptly provide to IFC such
information as IFC from time to time requests with
regard to any material developments in or affecting

the Companys Business and/or Operations.
(c) Upon IFCs request, and with reasonable prior
notice to the Company, permit representatives of
IFC during normal business hours to visit the
principal facility of the Company, to discuss the
affairs, finances and accounts of the Company
and its Key Subsidiaries with the appropriate
officers of the Company.
190. OWNERSHIPAND SHARE RETENTION
The Sponsor Group shall, for so long as IFC is a
Shareholder, collectively maintain an aggregate
voting and economic interest (which interest shall
include the right to vote and the right to receive a
proportionate share of dividends, profits, liquidation
proceeds and other similar amounts distributed by
the Company) in the Company equal to at least
45% of the Equity Shares issued and outstanding
from time to time, such that the Sponsor Group as
a group shall for such time be the single largest
Shareholder of the Company.
190A. PRE-EMPTIVE RIGHT
(a) IFC shall have the right to purchase its pro rata
share of New Securities (as defined below), as of
immediately prior to the issuance of the New
Securities.
(b) If the Company proposes to issue New
Securities, it shall give IFC written notice of its
intention, describing the New Securities, their price
and their general terms of issuance and specifying
IFCs pro rata share of such issuance. IFC shall
have thirty (30) days after any such notice is mailed
or delivered to agree to purchase up to its pro rata
share of the New Securities for the price and on
the terms specified in such notice.
(c) New Securities shall mean any shares or
Share Equivalents of the Company; provided that
the term New Securities does not include:
(i) Equity Shares (or options to purchase Equity
Shares) issued or issuable to officers, directors
and employees of the Company pursuant to the
Companys employee stock option plan;
(ii) Equity Shares issuable upon the exercise or
conversion 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 Selling
Shareholder and all of them, collectively, the
Selling Shareholders) proposes to Transfer

(directly or indirectly) any Shares or Share
Equivalents to a third party Transferee (a Buyer)
(being a Person other than any other Sponsor) and
if such Transfer would result in the shareholding
of the Sponsor Group falling below 45%, then IFC
shall have the right, but not the obligation, to
participate in such Transfer in accordance with
this Article.
(b) (i) The Selling Shareholders will promptly, but in
any case not later than thirty (30) days prior to the
proposed date of closing of any such Transfer
give notice (the Transfer Notice) to IFC. The
Transfer Notice shall describe in reasonable detail
the proposed Transfer, including but not limited to
the number of Shares to be Transferred, the
consideration to be paid, other material terms and
conditions of the proposed Transfer, and the name
and address of each Transferee. IFC shall have
the right to participate in the proposed Transfer by
notifying the Selling Shareholders within a period
of twenty five (25) days from IFCs receipt of the
Transfer Notice (the Exercise Period) of the
number of Shares it wishes to Transfer.
(ii) IFC shall ordinarily be entitled to Transfer the
number of Shares obtained by multiplying the
number of the Shares to be transferred by the
Selling Shareholders by a fraction, the numerator
of which shall be (A) the number of Shares then
held by IFC and the denominator of which shall be
(B) the aggregate number of Shares then held by
the Selling Shareholders and IFC. However, if the
proposed Transfer would result in the shareholding
of the Sponsor Group falling below 26%, or if
following the proposed Transfer of the Shares held
by IFC would account for less than five percent
(5%) of the Shares then outstanding, IFC may
Transfer up to all of the Shares held by IFC in
preference to any other Shareholder, including the
Selling Shareholder.
(iii) Any Transfer by IFC shall be made on
substantially the same terms and conditions as
described in the Transfer Notice. However, IFC shall
not be required to make any representation or
warranty to the Buyer, other than as to good title to
any Shares that IFC proposes to Transfer, absence
of material Liens with respect to such Shares, and
customary representations concerning IFCs
power and authority to undertake the proposed
ANNUAL REPORT
Transfer, and the validity and enforceability of IFCs
obligations in connection with it.
(c) The Selling Shareholders shall have a period
of thirty (30) days from the expiration of the
Exercise Period in which to Transfer to the Buyer
the Shares proposed to be Transferred (including,
if applicable, any Shares to be Transferred by
IFC), upon terms and conditions (including
consideration for the Transfer) no more favorable
than those specified in the Transfer Notice. If the
Selling Shareholders do not complete the Transfer
within such period, IFCs tag-along rights shall be
applicable to any subsequent proposed Transfer
by the Selling Shareholders.
(d) To the extent that any Buyer refuses to
purchase Shares from IFC (upon exercise of its
tag-along rights) hereunder, the Selling
Shareholders shall not Transfer to that Buyer any
of their Shares unless, prior to or simultaneously
with such Transfer, the Selling Shareholders
acquire from IFC the Shares that IFC wishes to
Transfer in accordance with this Article.
190C. OFFERING RIGHTS
(a) Right to Participate in an Overseas Company
Offering. If the Company proposes to undertake
an offering/ listing of its Shares on any stock
exchange other than an Indian Stock Exchange
(Overseas Company Offering), the Company shall
give notice to IFC promptly of its intention to do so,
specifying the other material terms of such
proposed Overseas Company Offering. Upon the
request of IFC delivered to the Company within
thirty (30) days after receipt of the Companys
notice, the Company shall include in such Overseas
Company Offering all of the offer securities
specified by IFC in a request delivered to the
Company within twenty (20) days after the date
of the Companys notice.
(b) Trading. If the Company lists its Shares on any
securities exchange or other trading market (other
than an Indian Stock Exchange), the Company shall,
to the fullest extent permitted by law, take all such
actions as may be necessary or appropriate to list
all Shares, or Shares issued or issuable in respect
of Shares owned by IFC, such that such Shares
will be freely tradable by IFC on such market. For
avoidance of doubt it is clarified that if consequent
upon a listing of its Shares on any stock exchange
or other trading market (other than an Indian Stock
16TH
Exchange), the IFC Shares will be automatically

listed and tradable on such stock exchange, then
this Article 190C(b) shall not be applicable.
(c) Cut-backs. If an Overseas Company Offering
(as referred to in Article 190C(a)) is an
underwritten offering, and the managing
underwriter advises the Company that, in its
opinion, the number of Shares and/or securities
proposed to be included in such Company Offering
should be limited due to market conditions, then the
Company shall so advise IFC, and the number of
Shares and/or securities to be included in such
Company Offering shall be allocated (i) first, to the
Company for securities being sold for its own
account, (ii) second, to IFC, and (iii) finally, to other
Selling Shareholders of such Shares or securities,
if any.
Notwithstanding any such limitation, if the Company
lists its Shares on any non-Indian securities
exchange or other trading market, the Company
shall, to the fullest extent permitted by law, take all
such actions as may be necessary or appropriate
to list all Shares, or Shares issued or issuable in
respect of Share Equivalents owned by IFC, such
that such Shares will be freely tradable by IFC on
such market.
(d) Costs. The Company shall pay all Offering
Expenses incurred in connection with each
Company Offering (as referred to in Article
190C(a)), including but not limited to any costs
reasonably incurred by IFC in connection with its
participation or proposed participation in any such
offering (other than customary underwriter
discounts).
(e) Underwritten Offerings. If an Overseas
Company Offering (as referred to in Article
190C(a)) involves an underwritten offering, and
IFC has elected to participate in such offering, IFC
shall sell the Offer Securities to be included in such
offering to the underwriters selected by the
Company on the same terms and conditions as
apply to the Company or the relevant Sponsor.
However, IFC shall not be required to make any
representation or warranty to any Person in
connection with such offering except (i) that it has
good title to and that there are no material Liens on
the Offer Securities or other securities, as the case
may be, to be sold by IFC, and (ii) its authority to
enter into, and the validity and binding effect of,

any agreements made by IFC in connection with
such offering and such other disclosures as may
be required under Applicable Law. If any
registration statement in connection with any
Company Offering refers to IFC by name or
otherwise as the holder of any securities of the
Company, then IFC shall have the right to require (i)
the insertion therein of language, in form and
substance satisfactory to IFC to the effect that the
holding by it of such securities is not to be
construed as a recommendation by it of the
investment quality of the Companys securities
covered thereby and that such holding does not
imply that IFC will assist in meeting any future
financial requirements of the Company, or (ii) in the
event that such reference to IFC by name or
otherwise is not required by the applicable
securities laws, the deletion of the reference to
IFC.
(f) Indemnification. To the extent permitted by law,
the Company will indemnify and hold harmless IFC,
and its officers, directors, employees and
consultants, and legal advisers, from and against
any loss, claim or liability (and any actions,
proceedings or settlements in respect thereof)
arising out of or based on (i) any untrue statement
of a material fact contained in any prospectus,
offering circular, or other offering document, (ii)
any failure to state therein a material fact necessary
to make the statements therein not misleading, and
(iii) any violation of Applicable Law (including but
not limited to, securities laws and exchange
requirements applicable to such Company
Offering); provided, that the Company shall not be
liable under this Article to the extent that any such
loss, claim or liability is based on any written
statement furnished by IFC to the Company
expressly for inclusion in such offering document.
(g) IFC Not a Promoter. IFC shall not be deemed to
be a promoter of the Company and the Shares
held by IFC shall not be subject to any statutory or
regulatory moratorium imposed on promoter
shareholdings, nor shall any declaration or
statement be made, either directly or indirectly, in
filings with any Authority, offer documents or
otherwise, with a view to ensure that restrictions
under Applicable Law (including, the Guidelines, if
applicable) to promoters do not apply to IFC, which
is a financial investor in and not promoter of the
Company.
The Company shall at its own cost make any and

all applications to statutory and regulatory
Authorities that may be required to obtain any
necessary Authorization or exemption.
190D. TRANSFERABILITY OF IFC SECURITIES
Save and except as expressly provided in these
Articles and subject to provisions of Applicable
Law, 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 of
the IFC Shares, as the case may be, constituting
such percentage of the Share Capital of the
Company which exceeds 4.5% (but without the
requirement of having received a purchase offer
for those Shares from a third party) (Offer
Shares), it shall notify the Sponsor Group of its
desire to sell and provide each of the individuals/
entities of the Sponsor group a right of first offer
over the Offer Shares, by making the Sponsor Group
an offer of sale of the Offer Shares (Right of First
Offer).
(b) The Sponsor Group shall have thirty (30) days
from the date of notification by IFC (Offer Notice),
to express its desire to purchase, either directly or
appoint a merchant banker to identify a third party to
purchase, the Offer Shares at a price specified by
the Sponsor Group (Offer Price) by sending a
notice in this regard to IFC (Sponsor Notice).
(c) If the Offer Price set out in the Sponsor Notice is
acceptable to IFC then IFC may within (15) days
from the date of notification by the Sponsor Group
either confirm its willingness to sell the Offer Shares
at the Offer Price to the Sponsor Group or the third
party identified by the merchant banker
(Acceptance Notice) or decline the offer so made
by the Sponsor Group.
(d) Subject to obtaining applicable Authorizations,
within forty-five (45) days of the receipt of the
Acceptance Notice from IFC (which forty-five day
period may be extended as necessary if any
governmental Authorizations are required to be
obtained), the Transfer of the Offer Shares at the
Offer Price to the Sponsor Group or the third party
identified by the merchant banker shall be completed.
(e) If the Sponsor Group or the third party identified
as aforesaid abstains from responding to the Offer
Notice within the required time period, or if the Offer
Price is not acceptable to IFC and consequently IFC
declines the Sponsor Group/identified third party
10
ANNUAL REPORT
offer, the Sponsor Groups offer, IFC shall be free
to offer for sale, within five (5) months of the lapse
of the fifteen (15) day period referred to in Article
190E(c) above, any or all of its Shares thereafter to
any Person on terms similar to, or better for IFC,
than terms of the original Sponsor Group/identified
third party offer. At the expiry of such five month
period, in the event IFC wishes to sell any Shares
constituting such percentage of the Share Capital
of the Company exceeding 4.5%, the procedure
set out in this Article 190E shall again be followed.
190F. PUT OPTION
The Sponsor Group have granted to IFC an option,
exercisable upon the occurrence of events mutually
agreed to between them, to sell to the Sponsor
Group, all or a portion of the IFC Shares on terms
mutually 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 have
the right, but not the obligation, to appoint one director
(the IFC Director) to the Board of Directors of the
Company, which shall include any alternate director
(the IFC Alternate Director) or a non-voting
observer (the Observer) nominated by IFC in his/
her place) to the Board. The IFC Director shall not
be required to hold qualification shares nor be liable
to retire by rotation.
(2) Upon the appointment of each IFC Director and
each IFC Alternate Director, the Company shall
ensure compliance with the provisions of the Act,
including by filing all necessary forms with the
Registrar of Companies.
(3) The IFC Director/Observer shall be entitled to: (i)
receive notice of any meeting of the Board (which
notice shall be accompanied by all documents
provided to other Directors, in accordance with
Article 115 (c)) and (ii) attend all the meetings of the
Board, including any committee thereof.
(4) The Board shall constitute an audit committee
(the Audit Committee) and any other committee
consistent with good corporate practice and the
regulatory requirements in the Country in force from
time to time. The Observer shall have the right to
attend any meetings of the Audit Committee. Any
financial audit of the Company must be approved
by the Audit Committee. IFC shall have the right to
have the IFC Director appointed to any committees
16TH
formed by the Board.

(5) To the maximum extent permitted by Applicable
Law, the Company shall fully indemnify each of the
IFC Director (and IFC Alternate Director, as may be
applicable) and the Observer against all liability (civil
or criminal) incurred by him by virtue of being a
Director or the Observer, including advancement of
expenses.
192. OVERRIDING ARTICLES
In the event of any inconsistency between the
provisions of the Overriding Articles and any other
provisions of these Articles, the terms of the
Overriding Articles shall apply.
By order of the Board
Place : Chandigarh
Dated: 26th August, 2008
Anubha Garg
Company Secretary
NOTES:
(i) A member entitled to attend and vote at the meeting
is entitled to appoint a proxy to attend and vote (on
a poll) instead of himself/herself and the proxy need
not be a member of the Company. Proxy in order to
be effective must be received by the Company not
less than 48 hours before the meeting. A blank proxy
form is enclosed. A proxy so appointed shall not
have any right to speak at the meeting.
(ii) The explanatory statement u/s173(2) of the
Companies Act, 1956 regarding item no. 4 & 5 of the
notice is annexed hereto.
(iii) The Register of Members and share transfer books
of the Company will remain closed from
22nd September, 2008 to 29th September, 2008
(both days inclusive) for Annual General Meeting
purpose.
(iv) Members holding shares in the dematerialised mode
are requested to intimate all changes with respect
to their addresses, bank details, mandate etc., to
their respective Depository Participant (DP). These
changes will be automatically reflected in
Companys records, which will help the Company
to provide efficient and better services to the
members.
(v) Members who wish to obtain any information on
the Company or view the Accounts for the financial
11

year ended 31st March, 2008, may send their
queries at least 10 days before the Annual General
Meeting to the Company Secretary at Companys
Office at SCO 98-99, Sub-City Centre, Sector 34,
Chandigarh - 160 022.
(vi) Details under Clause 49 of the Listing Agreement
with the Stock Exchange in respect of Directors
seeking appointment/re-appointment at the Annual
General Meeting, is annexed hereto.
Chartered Accountants have expressed their willingness

to act as Statutory Auditors of the Company, if appointed,
and have further confirmed that the said appointment
would be in conformity with the provisions of
Section 224(1B) of the Companies Act, 1956.The
Members approval is being sought for the appointment
of M/s. S.R. Batliboi & Co., Chartered Accountants as the
Statutory Auditors of the Company for the year 2008-09.
The Directors commend the resolution at item no. 4 for
approval of the Members.
None of the Directors of the Company is concerned or
interested in the resolution
ITEM NO. 5
The Company and its Promoter group has entered into
Subscription Agreement (the SSA), Shareholders
Agreement (the SHA) and the Put Option Agreement
(collectively referred to as the Agreements) all dated
July 1, 2008 with the International Finance CorporationWashington, DC-USA whereby IFC has subscribed to
46,50,000 Equity Shares of Rs. 10/- each of the Company
at a price of Rs. 60/- per share aggregating to
Rs. 279 million. One of the conditions of the said
Agreements is to incorporate certain rights of IFC in the
Articles of Association of the Company. Hence the Special
Resolution as set out in Item No.5 of the notice is placed
before the members for approval.
The said Agreements are available for inspection by any
member at the Registered Office of the Company on any
working day between 11 A.M. and 1.00 P.M. upto and
including the date of meeting.
The Directors commend the resolution at item no. 5 for
approval of the Members.
None of the Directors of the Company is concerned or
interested in the resolution.

Place : Chandigarh
Anubha Garg
Company Secretary
EXPLANATORY STATEMENT PURSUANT TO SECTION

173 (2) OF THE COMPANIES ACT, 1956
ITEM NO. 4
M/s A Goel & Associates, Statutory Auditors of the
Company who hold office till the conclusion of this
Annual General Meeting, have informed the Company
that they do not wish to seek re-appointment as Statutory
Auditors of the Company for the financial year 2008-09.
In view of the above, and based on the recommendations
of the Audit Committee, the Board of Directors, has, at
its meeting held on 26th August, 2008 proposed the
appointment of M/s S.R. Batliboi & Co., Chartered
Accountants as the Statutory Auditors of the Company
in place of M/s. A. Goel & Associates for the financial
year 2008-09.
The Company has received a special notice from a
Member of the Company, in terms of the provisions of
the Companies Act,1956, signifying his intension to
propose the appointment of M/s. S.R. Batliboi & Co.,
Chartered Accountants as the Statutory Auditors of the
Company from the conclusion of this Annual General
Meeting till the conclusion of the next Annual General
Meeting of the Company. M/s. S.R. Batliboi & Co.,
Place : Chandigarh
12
Anubha Garg
Company Secretary
ANNUAL REPORT
INFORMATION REGARDING DETAILS OF THE
DIRECTORS
SEEKING
APPOINTMENT
/
REAPPOINTMENT IN ANNUAL GENERAL MEETING
FIXED ON 29TH SEPTEMBER, 2008 PURSUANT TO
CLAUSE 49 OF THE LISTING AGREEMENT
1. Name of Director
Date of Birth
and commercial areas and had served as Managing

Director in Alfa Laval (India) Ltd. for 8 years.
Qualification: Bachelor of Engineering (Chemical
Engineering) from IIT Delhi and Post Graduate Diploma
in Marketing and Sales Management from FMS, Delhi
University.
: Dr.Bhupendra Nath Mathur

: 17.10.1943
List of other Directorships held:

(i) ESAB India Limited
(ii) Kolte Patil Developers Limited
Date of Appointment : 18.08.1993

Expertise in Specific Functional Area: Dr. Mathur
has over 40 years of experience in dairy field. He has
served as Director of National Dairy Research Institute,
Karnal and has retired as Director of National Academy
of Agricultural Research and Management, Hyderabad.
He possesses a vast experience in Management and
Administration.
Qualification: PhD in Dairy Technology from NDRI,
Karnal
List of other Directorships held: NIL
(iii) Precision Pipes and Profiles Co. Ltd.

Chairman/Member of the Committee of the
Board of Directors of the Company :
Audit Committee
Member
of
Holding in Company:
As on 31.03.2008,
Dr. Mathur holds Nil Equity Shares of the Company.
2. Name of Director
: Mr. Satish Tandon
Date of Birth
: 13.04.1946
Investors Grievances Committee -
Member
Remuneration Committee
Allotment Committee
Member
Member
Chairman/Member of the Committee of

Directors of other companies :
ESAB India Limited
Chairman/Member of the Committee of the

Board of Directors of the Company :
Audit Committee
Member
Chairman
Chairman/Member of the Committee
Directors of other companies - NIL
16TH
Audit Committee
Member
Member
Kolte Patil Developers Limited

Audit Committee
Member
Member
Precision Pipes and Profiles Co. Ltd.

Audit Committee
Member
Investors Grievances Committee Member
Holding in Company: As on 31.03.2008, Mr. Tandon
holds 4190 Equity Shares of the Company.
Date of Appointment : 30.12.2005

Expertise in Specific Functional Area: Mr. Tandon
has got over 40 years of experience in manufacturing
13

investment in the Company on private placement basis in
July, 2008. This shows their long term commitment and
confidence in the future growth, which augurs well for
the Company.
DIRECTORS REPORT
Dear Members,
Your Directors have pleasure in presenting the 16th
Annual Report together with the Audited Accounts of
the Company for the year ended 31st March, 2008.
CHANGES IN CAPITAL STRUCTURE

The following changes took place in the capital structure
of the Company during the year: (i) 8753100 Bonus equity shares in the ratio of 1:1
were allotted by the Board of Directors in October
2007 to the shareholders holding shares as on the
Record Date.
(ii) To part finance the ongoing Modernization-cumExpansion plan, the Company allotted 46,50,000
equity shares to International Finance Corporation
Washington, DC-USA (a private financing arm of
the World Bank) at the price of Rs.60 per share
(including premium of Rs.50 per share) on private
placement basis in July, 2008.
(iii) In November 2007, the Promoter & Promoter group
were allotted 30,00,000 warrants, on preferential
basis, convertible into equity shares at a price of
Rs.81 per share to be converted within a period of
18 months from the date of allotment, of which
11,63,661 warrants were converted into equity
shares in July, 2008.
Post aforesaid changes the total paid up share capital of
the Company stands at Rs.2,33,588,610 with International
Finance Corporation holding 19.94% and Promoter &
Promoter group holding 45.69% of the total issued share
capital of the Company.
FINANCIAL HIGHLIGHTS
(Rs. in Lacs)
Year Ended Year Ended
31.03.2008 31.03.2007
Net Sales and other Income
41360
17365
2784
794
Interest
1150
188
Cash Profit
1634
606
Operating Profit
Depreciation
Profit before Tax
Net Profit
566
190
1069
416
660
285
PERFORMANCE
During the year under review the Companys operations
got a quantum jump due to successful implementation of
its ongoing Modernization-cum-Expansion plan. The net
sales and other income is Rs.413.60 crores as against
Rs.173.65 crores in previous year. The operating profit
has also gone up to Rs. 27.84 crores this year as
against Rs. 7.94 crores last year and profit before tax is
Rs.10.69 crores as compared to Rs.4.16 crores during
the previous year.
EXPORTS
The companys exports, under its Nulife brand, increased
to new heights and achieved Rs. 126.59 crores as
against Rs. 18.22 crores in the previous year. In
recognition, the Company has been given the status of
Star Export House by the Govt. of India.
EXTERNAL COMMERCIAL BORROWING (ECB)

To part finance the ongoing project, the Company has
also entered into a Loan Agreement with International
Finance Corporation (IFC) for a loan of US Dollar 8.5
million by way of External Commercial Borrowing (ECB)
subject to Companys obtaining RBI and other necessary
approvals in this regard.
INVESTMENT IN RURAL DAIRY INFRASTRUCTURE

To continue with the Companys focus on development
of its own milk collection from the villages, Modern Dairies,
has extended its reach to more than 1500 villages of
Haryana, Punjab and Rajasthan by installing bulk milk
coolers and milk chilling centres. This is also in line with
the Companys commitment towards economic and social
prosperity of the dairy farmers.
PROJECT
The ongoing Modernization-cum-Expansion project has
been estimated at Rs.171 crore. The commercial
production from the 2nd Casein Manufacturing Line has
started in October 2007. The other project work to
strengthen Milk Procurement Infrastructure, Manufacture
of Pharmaceutical Grade Lactose and Co-generation of
Power etc. is in progress. It is expected to complete
within this financial year except the co-generation of
power which is expected to complete in the next financial
year.
EQUITY INVESTMENT BY IFC (INTERNATIONAL

FINANCE CORPORATION, WASHINGTON, DC USA)
Your directors are pleased to report that IFC (private
financing arm of the World Bank) has made an Equity
14
ANNUAL REPORT
LAND FOR NEW PROJECT
The Company has purchased an industrial plot for its
future expansion in the milk rich belt located at Indapur
Industrial Area on the National Highway, Distt. Pune,
Maharashtra.
16TH
offered themselves for re-appointment.

AUDITORS
M/s. A. Goel & Associates, Chartered Accountants who
are the Statutory Auditors of the Company hold office, in
accordance with the provisions of the Companies Act,
1956, upto the conclusion of the forthcoming Annual
General Meeting. M/s. A. Goel & Associates have
communicated that they do not wish to seek
re-appointment at the ensuing Annual General Meeting.
Your management puts on record their sincere
appreciations for the excellent work done by
M/s. A. Goel & Associates during their tenure since
inception of the Company.
The Board recommends the appointment of
M/s. S.R. Batliboi & Co., Chartered Accountants, as the
Statutory Auditors of the Company from the conclusion
of the ensuing Annual General Meeting until the
conclusion of the next Annual General Meeting. M/s.
S.R. Batliboi & Co. has also expressed their willingness
to act as auditors of the Company, if appointed and have
confirmed their eligibility. In this regard, attention of the
members is invited to item no. 4 of the Notice convening
the forthcoming Annual General Meeting.
Your Directors have appointed M/s V. Kumar &
Associates as Cost Auditors of the Company for the
year 2008-09 to conduct the cost audit subject to the
approval of the Central Government.
CURRENT OPERATIONS
The current year has started with new challenges as
the Government of India has withdrawn incentives
available for the export of dairy products. Your Company
is affected due to Governments decision to withdraw
9% DEPB benefits on the Casein exports and 5% VKGUY
on export of other dairy products from 17th April 2008.
In the first quarter of the current year, the Company has
achieved a higher turnover of Rs.127.65 crores as
compared to Rs.76.76 crores, previous year. But it has
earned a profit before tax of Rs. 2.01 crores as
compared to Rs.3.39 crores in the same quarter,
previous year.
TECHNOLOGY DEVELOPMENT
Your Company has continuous focus on process
development, technology innovation, suitable for its
customers. After successfully launching Edible Grade
Acid Casein, the focus was to develop Rennet Casein
from cow-buffalo mixed milk available in our milk shed.
Our team has successfully developed a process,
suitable for the production of Edible Grade Rennet Casein
of international standards to be used for manufacture
of Analogue Cheese and Imitation Cheese.
AUDITORS REPORT
All the comments of Statutory Auditors on the Annual
accounts are self explanatory and require no further
comments.
Further, after supplying international quality Edible Grade

Lactose in the market, your Company has successfully
standardised and adopted an innovative process for
the industrial production of Refined Grade Edible Lactose
and Pharma Grade Lactose.
FIXED DEPOSITS
The outstanding deposits at the end of the fiscal year
under review amount to Rs.1801.14 Lacs (Previous year
Rs.1918.62 Lacs). There are no overdue deposits.
QUALITY, FOOD SAFETY & ENVIRONMENT

STANDARDS
CORPORATE GOVERNANCE AND MANAGEMENT

DISCUSSION & ANALYSIS
A separate report on Corporate Governance and
Management Discussion & Analysis is attached to this
report.
(ISO 9001:2000, ISO 14001 and HACCP Certifications)

Your Companys manufacturing facilities continue to
maintain the prestigious ISO 9001:2000, ISO 14001 and
HACCP Certification by DNV Netherlands, a leading
International Certification Company. It is an indicator of
the Companys commitment for quality, food safety and
maintaining environmental standards.
HUMAN RESOURCES
Harmonious employee relations prevailed throughout the
year. Your Directors place on record their appreciation
for all categories of employees for their hard work and
dedication.
The statement showing particulars of employees as
DIRECTORS
Dr. Bhupendra Nath Mathur and Mr. Satish Tandon,
Directors of the Company shall retire by rotation at the
ensuing Annual General Meeting and being eligible have
15

MANAGEMENT DISCUSSION AND ANALYSIS
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 A
and forms part of this report.
INDUSTRY STRUCTURE & DEVELOPMENTS

The dairy industry in India is growing at a rapid pace.
With India maintaining its status as the largest producer
of milk in the World and annual growth rate of 3-4%, the
dairy industry in India is poised for major development.
Of the total milk produced in the country it is estimated
that only 18% to 20% is processed by the organized
sector. The remaining balance milk is consumed through
unorganized channels. With the growth of organized
sector which is providing regular and remunerative market
to the producer, this share is expected to go up at a fast
rate. This will ensure a regular availability of raw material
to the industry.
CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO.
Information as per Section 217 (1) (e) of the Companies
Act, 1956 read with Companies (Disclosure of particulars
in the report of Board of Directors) Rules 1988, is given
in the Annexure B and forms part of this report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies
Act,1956,your Directors confirm that:
(i) In the preparation of the annual accounts for the
financial year ended 31st March, 2008, the
applicable accounting standards have been
followed and that there were no material
departures.
(ii) The accounting policies selected by them have
been applied consistently, and they have made
judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the
state of the Company as on 31st March 2008 and
profit of the Company for the year ended 31st
March 2008.
(iii) They have taken proper and sufficient care for the
maintenance of adequate accounting records in
accordance with the provisions of the Companies
Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting frauds
and other irregularities.
(iv) The annual accounts have been prepared on a
going concern basis.
Globally, the demand for nutritional products is growing

and a great potential is available for the growing dairy
industry in India to meet this demand. Your Company has
already undertaken Expansion and Diversification project
for production of value added products like Edible Grade
Casein, Whey Protein Concentrates and Edible Grade
Lactose / Pharma Grade Lactose etc.
OPPORTUNITIES AND THREATS
The world milk production is growing at the rate of
about 1.5% where as the demand for milk products are
growing at about 2.4%. This difference in demand and
supply is likely to be available to India which is growing
at 3.5 - 4%. The prices of milk in the developed countries
are going up due to phasing out of subsidies and this
provides a competitive edge to Indian producers in the
International Market. With the current growth rate of
milk production, India is going to be a major force in the
Global Trade of dairy products in the International Market.
The Indian Milk Industry is still facing technical barriers to
trade like restriction on exports of Edible Grade Dairy
Products from India into the European nations. There
are other countries too like Russia, Mexico, Malaysia,
Brazil, where Indian products can not be exported due
to non availability of Mutual Trade Agreement between
India and respective Governments.
APPRECIATION
Your Directors wish to place on record their sincere
appreciation to International Finance CorporationWashington, DC - USA for the confidence reposed by
them in the Company and also to the Companys bankers
and all business associates of the Company for their
continued support.
For & on behalf of the Board
Place: Chandigarh
RISK & CONCERN

Like any agro based industry, the dairy industry is also
dependent on the vagaries of nature which affect the
production of milk.
INTERNAL CONTROL SYSTEMS AND THEIR
ADEQUACY
Krishan Kumar Goyal

Chairman & Mg. Director
Modern Dairies Limited has a proper and adequate system

of internal controls to ensure that transactions are
16
ANNUAL REPORT
properly recorded, authorized and reported.
16TH
HUMAN RESOURCES
The Company regards its employees as the most
valuable asset and continuously reviews and evolves
policies and procedures to attract and retain its pool of
technical and managerial personnel through a conducive
work environment.
The Company has in place well documented and

structured systems and procedures in line with the best
of practices and well defined roles and responsibilities
for people in all functions at various levels. The Company
is certified as ISO 9001:2000 (Quality System), ISO 14001
(Environment System) and HACCP (Food Safety System)
by DNV, Netherlands.
CAUTIONARY STATEMENT
The Management Discussion and Analysis report may
contain statements that might be considered forward
looking. These statements are subject to certain risks
and uncertainties. Actual results may differ materially
from those expressed in the statement as important
factors could influence the Companys operations such
as Government policies, local, political and economic
development, risk inherent to the Companys growth and
such other factors.
There is adequate Management Information System.

Management review meetings are held periodically to
monitor and control functions of the Company. Internal
audit on regular basis is carried out to ensure proper
control.
FINANCIAL PERFORMANCE AND RESULTS OF
OPERATIONS
During the year under review the Company achieved
net sales and other income of Rs.413.60 crores as
against Rs.173.65 crores in previous year. It has earned
profits before tax of Rs.10.69 crores as compared to
Rs.4.16 crores during the previous year. The Company
exported products worth Rs. 126.59 crores during the
year under review as compared to Rs.18.22 crores
during the last year.

Place: Chandigarh
Krishan Kumar Goyal

Annexure A to Directors Report

Statement pursuant to section 217(2A) of the Companies Act, 1956 and the
Companies (Particulars of Employees) Rules, 1975
S. Name
No
Age
(Years)
Designation/
Nature of
Duties
Gross
Remuneration
(Rs.)
Qualification
Total
Experience
(Years)
Date of
Commence
-ment of
Employment
Previous
employment/
position held
51
Chairman &
Mg. Director
42,07,189
B.Com.,LLB
28
22.04.92
Managing Director
& CEO
Modern Steels Ltd.
Mr. Krishan Kumar

Goyal
Notes: (1)
(2)
Gross remuneration comprises salary, allowances, monetary value of perquisites, and the Companys contributions
to Provident and Superannuation Funds but excludes contribution to Gratuity Fund on the basis of actuarial valuation
as separate figures are not available. Mr. Goyal is also Mg. Director & CEO of Modern Steels Limited.
The nature of employment is contractual
Place : Chandigarh
Dated : 26th August, 2008
Krishan Kumar Goyal

17

Annexure B to Directors Report
Information as per section 217(1)(e) read with Companies (Disclosure of particulars in the Report of Board of
Directors) Rules, 1988 and forming part of the Directors Report for the year ended 31st March, 2008.
FORM A
A) POWER AND FUEL CONSUMPTION
Current year
Previous Year
2007-08
2006-07
POWER
a) Electricity Power
Purchase Units (Kwh)
1,59,51,034
52,77,920
Total Amount (Rs.)
6,79,39,027
2,19,56,149
Rate per Unit (Rs.)
4.26
4.16
b) Other Generation
Through Diesel Generator
Unit (Kwh)
34,34,648
18,21,010
Total Amount (Rs.)
3,20,04,743
1,74,52,013
Unit per litre of Diesel Oil
3.23
3.25
Cost / Unit (Rs.)
9.32
9.58
FUEL
Quantity (MT)
35,706
15,696
Total Amount (Rs.)
7,54,32,984
2,91,55,157
Rate / Unit (Rs.per MT)
2,112.61
1,857.49
B) CONSUMPTION PER UNIT OF PRODUCTION
Products :Liquid Milk, Skimmed Milk Powder, Whole Milk Powder,Dairy Whitener, Pure Ghee, Butter, Casein,
WPC, Lactose etc.
Unit per 1000 kgs. of milk processed
Electricity (kwh)
68.97
55.96
Fuel 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 B
1. RESEARCH AND DEVELOPMENT (R&D)
The Company is in the production of Edible Grade Acid Casein since last year. It was working on development
of Rennet Casein. But the challenge was how to use commercially available cow-buffalo mixed milk for the
manufacture of Rennet Casein of international standards.
The Company has now developed a process utilizing commercially available cow-buffalo mixed milk for
industrial production of Rennet Casein conforming to international standards suitable for the manufacture of
Analogue Cheese and Imitation Cheese.
2. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
The Company has successfully standardised the process for production of Rennet Casein, adopting the
process developed by it.
The Company has successfully standardised and adopted an innovative process for the industrial production
of Refined Grade Edible Lactose and Pharma Grade Lactose.
3. FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars with regard to Foreign Exchange earnings and outgo appear on the relevant Schedule of the
Balance Sheet.
Place : Chandigarh
Krishan Kumar Goyal
18
ANNUAL REPORT
16TH
CORPORATE GOVERNANCE REPORT

In line with the requirement for providing a Report on Corporate Governance as per Clause 49 of the revised Listing
Agreement of the Stock Exchange as applicable, given below is a report on Companys Corporate Governance
norms.
COMPANYS PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE
Modern Dairies Limited is committed in adopting the best practices of Corporate Governance. The Company endeavours
to act on the principles of transparency, accountability, trusteeship and integrity. The ultimate objectives being of
realising long term shareholder value, while taking into account the interest of other stakeholders.
1 BOARD OF DIRECTORS
A. Composition of the Board of Directors
A list of directors including the Chairman of the Board and their status as executive / non-executive and
independent / non-independent for the year ended 31st March, 2008 is set out below:Name of the
Director
Category of the Director
No of
Board
meetings
attended
No of other
Directorships
in Public
Company
No. of
Committee
positions in
public cos
Chairman
Last
AGM
attended
Member
Mr.Krishan Kumar Chairman & Managing

Goyal
Director- Non Independent
(Promoter) Director
Yes
Dr. Bhupendra
Nath Mathur
Non Executive
Independent Director
Yes
Mr. Amarjit Goyal
Non Executive
Non Independent
(Promoter) Director
Yes
Mrs. Alka Goyal
Non Executive
Non Independent
(Promoter) Director
No
Non Executive
Yes
Prof. Satish Kapoor Non Executive

Yes
Yes
Yes
Mr.Satish Tandon
Mr. P.K.Bansal*
Non Executive
Independent (Nominee)
Director
Mr. H.S.Oberoi
Executive Non Independent

Director (Operations)
* Mr. Hardyal Sehrawat replaced Mr. P.K. Bansal as nominee director of Govt. of Haryana w.e.f. 25.04.2008.
19

B. Board Meeting and Attendance
During the financial year ended 31st March, 2008, Six meetings of Board of Directors were held. The details of
Board Meetings held during the year are as under:Date of Board Meeting
Boards Strength
No of Directors Present
30th April, 2007
rd
th
th
st
th
23 July, 2007
27 August, 2007
26 October, 2007
21 November, 2007
30 January, 2008
C. Boards Processes
It has always been the Companys policy and practice that apart from matters requiring Boards approval by
statute, all major decisions including quarterly results of the Company, financial restructuring, capital
expenditure proposals, collaborations, material investment proposals in joint venture/promoted companies,
sale and acquisition of material nature of assets, mortgages, guarantees, donations etc, are regularly placed
before the Board. This is in addition to information with regard to actual operations, major litigation feed back
reports, information on Senior Level appointments just below the Board Level and minutes of all Committee
Meetings.
The information as required under Corporate Governance is being made available to the Board as and when
applicable.
2.
COMMITTEES OF THE BOARD

A. Audit Committee
a.
(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 namely
Prof. 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 a
member 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 Committee
was as under:
Name of Director
No. of Meetings attended during 2007-2008
Prof. Satish Kapoor
Mr. P. K. Bansal
20
ANNUAL REPORT
c.
Powers of Audit Committee The Audit Committee has the following powers as amended from time
to time:1. To investigate any activity within its terms of reference.
2. To seek any information from any employee.
3.
d.
16TH
To obtain outside professional legal advice.
4. To secure attendance of outsiders with relevant expertise, if considered necessary.

Role of Audit Committee
1.
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 or
removal 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 for
approval with particular reference to:
a. Matters required to be included in the Directors Responsibility statement to be included in the
Boards 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 potential
conflict 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 Board
for approval.
6.
Reviewing with the management, performance of the statutory and internal auditors, adequacy of
internal control systems.
7.
Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit
department, staffing and seniority of the official heading the department, reporting structure coverage
and 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 where
there is suspected fraud or irregularity or a failure of internal control system of a material nature
and reporting the matter to the Board.
10. Discussion with Statutory Auditors before the audit commences, about the nature and scope of
audit 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, debenture
holders, 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.
21

13. Carrying out any other function, which may be specified as a role of the Audit Committee under
amendments, if any, from time to time as per the Listing Agreement, Companies Act, 1956, and other
statutes.
e. Review of information by Audit Committee
The Audit Committee has the power to mandatorily review the following information:-
B.
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 subject
to review by the Audit 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 remuneration
practices followed by Companies of similar size and standing in the industry. The Committee periodically
reviews 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 non
executive 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 by
the Board. The power and role of the Remuneration Committee is as per guidelines set out in the Listing
Agreement. 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 the
Board of Directors and confirmed by the shareholders of the Company. Service contracts are entered into in
terms of regulations governing their appointment and terms of remuneration. The remuneration is fixed considering
various 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 and
allowances, contribution to Provident Fund and other funds in accordance with various related provisions of
the Companies Act, 1956.
22
ANNUAL REPORT
16TH
Details of Remuneration paid to the Directors during the Financial year ended 31st March, 2008
(Amount in Rs.)
Salary
Mr. Krishan Kumar Goyal*
38,90,000
Perquisites Performance
& other
bonus/
benefits
commission
3,17,189
Stock Option
NIL
Sitting
Fee
-
Total
42,07,189
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
NIL
45,000
5,77,671
NIL
Mr.P.K.Bansal
Mr. H.S. Oberoi
10,02,903
45,000
15,80,574
* The Company has provided remuneration of Chairman & Mg. Director Mr. Krishan Kumar Goyal amounting to
Rs. 42.07 lacs which requires Central Government approval, which is pending, in view of the fact that he is
drawing remuneration from Modern Steels Limited also. As per appointment terms the remuneration permissible is
Rs. 35.10 lacs taking into account the minimum remuneration permissible in Modern Steels Limited amounting to
Rs. 21.07 lacs.
C.
Shareholders/Investors Grievances Committee

The Company has formed a Shareholders/Investors Grievances Committee under the Chairmanship of a nonexecutive Director. The list of present member and the chairman of the Committee is as follows:
Member/Chairman
Prof . Satish Kapoor
Chairman
Mr. Satish Tandon
Member
Mr. H.S. Oberoi
Member
The Committee looks into the redressing of shareholders and investors complaints like transfer of shares, nonreceipt 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 with
the 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 sent
within 10 days of receipt of letter, except in cases that are constrained by dispute or legal impediment.
D.
Share Transfer Committee

For the expeditious disposal of the share transfer and allied services Company has formed a Share Transfer
Committee to look into and decide matters pertaining to transfer, duplicate share certificates and related
matters.
E.
Allotment Committee
The Board in its meeting held on 21st November, 2007 constituted an Allotment Committee of Directors comprising
of 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. The
committee was reconstituted on 28th May, 2008 by the Board of Directors by addition of two new members to
the Committee namely Mr. Satish Tandon and Mr. Krishan Kumar Goyal.
23

F.
Banking & Finance Committee

The Board in its meeting held on 21st November, 2007 constituted a Banking & Finance Committee of Directors
comprising 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 & Finance
Committee are as under:
To exercise all powers to borrow moneys (otherwise than by issue of debentures), from time to time, such that
the amount of all such borrowings including bonds / debentures, but excluding temporary loans obtained from
the bankers in the ordinary course of business outstanding at any time shall not exceed Rs.100 Crore and
taking 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 of
various 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 the
Board.
To carry out any other function as is mandated by the Board from time to time and/or enforced by any statutory
notification, 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 the
Committee.
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, 2008
during 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.
2005 - 06
11.00 A.M.
2006 - 07
11.00 A.M.
st
During the year an Extraordinary General Meeting of the Company was held on 21 November 2007 at 11:00 a.m. at
Registered 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 & remuneration
of 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 the
ratio of 1:1.
The Company passed no resolution through postal ballot during the year.
24
ANNUAL REPORT
16TH
5.
DISCLOSURES
1. 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 the
Accounts 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 three
years.
3. The Company has complied with the above Mandatory Requirements of Corporate Governance & the
Company has not adopted any Non Mandatory Requirements of Corporate Governance except
Remuneration Committee, Allotment Committee and Banking & Finance Committee.
6.
MEANS OF COMMUNICATION
The 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 also
notified to the Stock Exchange as required under the Listing Agreement. In addition, the Company also files
quarterly results , shareholding pattern etc. in such form so as to enable Stock Exchange to put it on their
website.
Management Discussion and Analysis forms part of the Annual Report, which is posted to the
shareholders.
GENERAL SHAREHOLDER INFORMATION

1.
2.
3.
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)
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
Annual General Meeting
By September, 2009
(last week)
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 : 519287

ISIN No. in NSDL & CDSL : INE617B01011
25

6.
Stock Data :-
Month
MODERN DAIRIES LTD. ON BSE
BSE SENSEX
High
(Rs.)
Low
(Rs.)
Close
(Rs.)
Volume
High
Low
Close
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
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
2007
2008
* 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 : admin@mcsdel.com
Website: www.mcsdel.com
All shareholders of the Company can avail online services from our Registrars & Share Transfer Agents
M/s. MCS Limited, with regard to Investors Grievances. Please log in on the site of MCS Limited
www.mcsdel.com and click on Investors Services and you can register your queries/grievances and
details as required by you. The registered queries/grievances on the site will be responded by M/s. MCS
Limited on priority basis.
8.
Shareholding Pattern of the Company as on 31st March, 2008:Category
No. of shares held

9491118
%age of shareholding
1.
Promoters & Promoter Group
2.
Mutual Funds and UTI
3.
Foreign Institutional Investors
4.
Bodies Corporate (not included above)
1123659
6.42
5.
Indian Public
6203448
35.43
6.
NRIs/OCBs
283813
1.62
17506200
100.00
TOTAL
26
54.22
10400
0.06
393762
2.25
ANNUAL REPORT
16TH
Distribution of Shareholding as on 31st March, 2008:-
9.
SHAREHOLDING (IN RS.)
10.
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
160019
0.91
30001
40000
36
0.27
137656
0.79
40001
50000
29
0.22
141088
0.81
50001
100000
65
0.48
506415
2.89
100001
and above
79
0.59
12559255
71.74
TOTAL
13419
100.00
17506200
100.00
Dematerialisation of Shares:The trading in Companys shares is permitted only in dematerialised form. In order to enable the shareholders
to hold their shares in electronic form and to facilitate scripless trading, the Company has enlisted its shares
with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).
Share Dematerialisation record: The following data indicates the extent of Dematerialisation of Companys
shares as on 31st March, 2008.
No. of Shares
1,11,96,575
63.96 % of the total share capital.
11.
12.
Plant Locations of the Company

136 KM, G.T.Road, Karnal 132 001( Haryana), Tel. : 01745-242901-03, Fax : 01745-242900
Investors Correspondence:All queries of investors regarding the Companys shares in Physical / Dmat form may be sent at the following
addresses :
i) Modern Dairies Limited
SCO 98-99, Sub City Centre,
Sector 34, Chandigarh-160 022
Tel.: 0172- 2609001,2609002,2609003,
Fax.: 0172- 2609000
E-mail: secretarial@milkplus.com
Companys Website : www.milkplus.com
ii) 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 : admin@mcsdel.com
Website : www.mcsdel.com
27

Declaration under Clause 49 I (D) (ii) by the Executive Director, of affirmation by the Board of Directors
and Senior Management of compliance with code of conduct.
The Shareholders,
I, Krishan Kumar Goyal, Chairman & Managing Director of the Company do hereby declare that all the Board
members and Senior Management Personnel have affirmed compliance with the Code of Conduct adopted by the
Board of Directors, as applicable to the Board of Directors and Senior Management of the Company.
Sd/Krishan Kumar Goyal

Place : Chandigarh
Date : 26th August, 2008
AUDITORS CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE

GOVERNANCE UNDER CLAUSE 49 OF THE LISTING AGREEMENT
To,
The Members
Modern Dairies Limited
We have examined the compliance of Corporate Governance by the Modern Dairies Limited for the year ended
31st March, 2008, as stipulated in Clause 49 of the Listing Agreement of the said company with Stock Exchange.
The Compliance of conditions of the Corporate Governance is the responsibility of the Management. Our examination
has been limited to the review of the procedures and implementations thereof adopted by the company for ensuring
compliance with the conditions of the certificate of Corporate Governance as stipulated in the said clause. It is
neither an audit nor an expression of opinion on the financial statements of the company.
In our opinion and to the best of our information and according to the explanations given to us and the representations
made by the Directors and the management, We certify that the company has complied with the conditions of
Corporate Governance as stipulated in Clause 49 of the Listing Agreement.
As required by the guidance note issued by the Institute of Chartered Accountants of India, we have to state that no
investor complaint is pending for a period exceeding one month as on 31st March, 2008 against the company, as per
records maintained by the investors grievances committee of the Company.
We further state that such compliance is neither an assurance as to future viability of the company nor of the
efficiency or effectiveness with which the management has conducted the affairs of the Company.
FOR A. GOEL & ASSOCIATES
Place : Chandigarh
Date : 26th August, 2008
ASHOK K. GOEL
M. No. 81342
28
ANNUAL REPORT
AUDITORS REPORT
then result in the Profit after taxation for the year

to be Rs. 664.21 lacs as against the reported figure
of Rs. 659.74 lacs.
The Reserves & Surplus shall be Rs. 1129.35 lacs
as against the reported figure of Rs. 1124.88 lacs.
The Net Current Assets shall be Rs. 6099.44 lacs
The Net Deferred Tax shall be Rs. 682.82 lacs as
against the reported figure of Rs. 680.47 lacs.
Further to our comments in the Annexure referred
to in paragraph 3 & 4 above, we report that:
To
The Members,
Modern Dairies Ltd
KARNAL
Dear Members,
1.
2.
3.
4.
16TH
We have audited the attached Balance Sheet of

st
MODERN DAIRIES LIMITED, KARNAL as at 31
March 2008 and also the Profit & Loss Account
and the Cash Flow Statement for the year ended
on that date annexed there to. These financial
statements are the responsibility of the Companys
management. Our responsibility is to express an
opinion on these financial statements based on
our audit.
We conducted our audit in accordance with
auditing standards generally accepted in India.
Those standards require that we plan and perform
the audit to obtain reasonable assurance about
whether the financial statements are free of
material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An
audit also includes assessing the accounting
principles used and significant estimates made by
management, as well as evaluating the overall
financial statements presentation. We believe that
our audit provides a reasonable basis for our
opinion.
As required by Companies (Auditors Report) order,
2003 issued by the Central Government of India in
term of sub-section (4A) of section 227 of the
Companies Act, 1956 and on the basis of such
checks of the books and records of the Company
as we considered appropriate and according to
the information and explanations given to us, we
enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said order.
We refer to note no. 11 of Schedule XV regarding
managerial remuneration amounting to Rs.42.07
Lacs which is in excess in Rs. 6.97 Lacs over Rs.
35.10 Lacs which is otherwise allowable as per
schedule XIII of the Companies Act, 1956 paid to
the CMD, is subject to approval by the Central
Government.
In the event that the Central Govt. approval is not
received, the provision for remuneration of
Rs. 6.97 Lacs is to be written back. This would
i)
ii)
iii)
iv)
v)
vi)
a)
b)
29
We have obtained all the information &

explanations, which to the best of our
Knowledge and belief were necessary for the
purpose of our audit;
In our opinion, proper books of accounts as
required by law have been kept by the company
so far as appears from our examination of
those books;
The Balance Sheet, Profit & Loss Account and
Cash Flow Statement dealt with by this report
are in agreement with the books of account;
In our opinion, the Balance Sheet, Profit and
Loss Account and Cash Flow Statement dealt
with by this report comply with the applicable
accounting standards referred to in subsection (3C) of Section 211 of the Companies
Act, 1956;
On the basis of written representations
received from the directors, as on 31st March
2008, and taken on record by the Board of
Directors; none of the director is disqualified
as on 31st March 2008 from being appointed
as a director in term of clause (g) of sub-section
(1) of Section 274 of the Companies Act 1956;
In our opinion and to the best of our information
and according to the explanations given to us,
the said accounts read with the Significant
Accounting Policies and other notes thereon
together give the information required by the
Companies Act, 1956, in the manner so
required and give a true and fair view in
conformity with the accounting principles
generally accepted in India.
In the case of the Balance Sheet, of the state
of affairs of the Company as at 31st March,
2008;
In the case of the Profit & Loss Account, of the
profit for the company for the year ended on
c)
that date; and

In the case of the Cash Flow Statement, of the
Act, 1956. The Maximum amount involved during

the year is Rs. 19.20 Crore and year end
outstanding is Rs. 15.68 Crore.
cash flow for the year ended on that date.

c)
For A. Goel & Associates
Place : Chandigarh
ASHOK K. GOEL
M.No. 81342
REFERRED TO PARAGRAPH 3 OF OUR REPORT OF

EVEN DATE
To the best of our knowledge and belief and according
to the information and explanations given to us, we
further report that :1.
4.
a) The company has maintained proper records

to show full particulars including quantative
details & situation of its fixed assets
b) As explained to us, the fixed assets have been
physically verified by the management which
in our opinion is reasonable having regards to
size of the company and nature of its assets.
No material discrepancies have been noticed
during the year.
5.
c) During the year substantial part of fixed assets

have not been disposed off by the company
2. a)
The inventory of the company has been

physically verified by the management during
the year.
b)
In our opinion and according to the information

and explanation given to us, the procedures
of physical verification of inventories followed
by the Management are reasonable and
adequate in relation to the size of the Company
and nature of its business.
c)
The Company has maintained proper records

of its inventories and no material discrepancies
were noticed on physical verification.
3. a)
The Company has not granted any loans,

secured or unsecured to companies, or other
Parties covered in the register maintained
under section 301 of the Companies Act, 1956.
b)
6.
7.
The company has taken unsecured loan from

four companies covered in the register
maintained under sec 301 of the Companies
8.
30
The rate of interest and other terms and

conditions of the unsecured loans taken from
the Companies covered in the Register
maintained under section 301 of the Companies
Act, 1956, are not prima facie prejudicial to the
interest of the Company. The Company has
been regular in the Payment of principal and
interest amount.
In our opinion and according to the information and

explanation given to us, there is adequate internal
control system commensurate with the size of the
Company and the nature of its business for the
purchase of fixed assets, inventory, sale of goods
& services. During the course of our audit , we
have not observed any continuing failure to correct
major weakness in the aforesaid internal control
system.
To the best of our knowledge and belief and
according to the information and explanations given
to us we are of the opinion that the transactions
need to be entered into the register maintained under
section 301 of the Companies Act, 1956 have been
so entered.
explanation given to us the transaction in pursuance
of contracts or arrangements have been made at
prices which are reasonable having regard to
prevailing market prices at the relevant time.
explanations given to us, the Company has complied
with the provisions of Section 58A and 58AA of the
Companies Act, 1956 and the rules framed there
under with regard to the deposits accepted from
the public. No Order has been passed by the
Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or
any other Tribunal.
In our opinion the Companys present internal audit
system is commensurate with its size and nature
of business.
On the basis of records produced to us, we are of
the opinion that prima facie the cost records
ANNUAL REPORT
prescribed by the Central Government of India under
section 209(1)(d) of the Act have been made &
maintained. We have not carried out any detailed
examination of such accounts & records.
9.
12.
(a) According to the books and records as

produced and examined by us in accordance
with generally accepted auditing practices in
India and also based on Management
representations, undisputed statutory dues in
respect of Provident Fund, Income Tax, Wealth
Tax, Service Tax, Cess and other material
statutory dues have generally been regularly
deposited by the Company during the year with
the appropriate authorities in India and there
were no arrear outstanding in respect of above
for a period of more than six month as on
31.03.2008.
13.
14.
15.
(b) According to the information and explanations

given to us, there have been no disputed dues
which have not been deposited in respect of
Income Tax, wealth Tax, Service Tax, Custom
Duty, Sale Tax & Excise Duty except Milk cess
which have not been deposited as on 31st
March 2008 on Account of dispute as given
below:
16.
17.
The demand for cess under The Haryana Murrah,

Buffalo and other Milch Animal Bread Act, 2001
pending before Punjab & Haryana High Court
amounting to Rs. 84.37 lacs for the 2004-05
financial year and Rs. 84.37 lacs of the financial
year 2003-04 and Rs. 22.50 lacs for the financial
year 2002-03.
18.
However the Company has not provided Milk cess

amounting to Rs. 84.38 lacs for the financial year
2005-06 and Rs.118.12 lacs for the F.Y. 2006-07 &
Rs. 118.13 for F.Y. 2007-08. The total amount of
Milk cess amounting to Rs. 320.63 lacs is shown
as contingent liability.
19.
20.
21.
10. The Company has neither accumulated losses as

at 31st March, 2008, nor it has incurred any cash
loss either during the financial year ended on that
date or in the immediately preceding financial year.
11. Based on our audit procedures and according to
the information and explanation given to us, the
company has not defaulted in any repayment of
16TH
dues to financial institution, banks or debenture

holder.
The Company has not granted any loans or
advances on the basis of security by way of pledge
of shares, debentures and other securities.
In our opinion, considering the nature of activities
carried on by the Company during the year, the
provisions of any special / statute applicable to chit
fund / nidhi / mutual benefit fund / societies are not
applicable to it.
According to the information & explanations given
to us, the Company has not dealt or traded in shares,
securities debentures or other investments during
the year.
The Company has not given any guarantee for
loans taken by others from bank or financial
institutions.
In our opinion the term loans have been applied for
the purpose for which they were raised during the
year.
On the basis of review of utilization of funds, which
is based on overall examination of the Balance Sheet
of the Company, related information as made
available to us and as represented to us by the
Management, funds raised on short-term basis have
not been used for long-term investment.
According to the information and explanations given
to us, the Company has not made any preferential
allotment of shares to Parties and companies
covered in the Register maintained under section
301 of the Companies Act , 1956 during the year.
However share warrants have been issued to
parties covered u/s 301 of the Companies Act, 1956.
The Company has not issued any debentures that
were outstanding at any time during the year.
The Company has not raised any money by public
issue during the year.
As per the information and explanation given to us
and on the basis of examination of records, no
material fraud on or by the Company was noticed
or reported during the course of our Audit.
For A. Goel & Associates
Place : Chandigarh
31
ASHOK K. GOEL
M.No. 81342
BALANCE SHEET AS AT 31ST MARCH, 2008

Schedule
I
SOURCES OF FUNDS
1. Shareholders Funds
a) Share Capital
I
b) Share Warrant Application Money
c) Reserves & Surplus
II
2. Loan Funds
a) Secured Loans
III
b) Unsecured Loans
IV
3.
II
1,15,56,37
18,01,14
1,33,57,51
1,12,80,57
3,01,24
1,71,60,38
1,38,01,47
1,01,00,07
9,29,54
VI
1,02,54,62
14,32,15
1,10,29,61
38,16
88,22,47
13,24,45
1,01,46,92
28,16
VII
50,16,80
28,87,94
1,17,33
12,19,81
26,91,30
23,21,12
3,28,08
5,85,01
92,41,88
59,25,51
30,67,28
81,99
22,58,84
40,28
VIII
31,49,27
22,99,12
Net Current Assets
60,92,61
36,26,39
1,71,60,38
1,38,01,47
XV
This is the Balance Sheet referred

to in our Report of even date
Place : Chandigarh
93,61,95
19,18,62
6,80,47
1,20,89,32
19,89,25
Less:
Current Liabilities & Provisions
a) Liabilities
b) Provisions
ASHOK K. GOEL
Partner
For A.GOEL & ASSOCIATES
8,79,21
13,40,45
c) Net Block
d) Capital Work-in-Progress
Investments
Current Assets,
Loans & Advances
a) Inventories
b) Sundry Debtors
c) Cash & Bank Balances
d) Loans & Advances
Significant Accounting Policies

& Notes on Accounts
31st March, 2007

(Rs.'000)
17,54,52
2,43,00
11,24,88
Deferred Tax Liability (Net)
APPLICATION OF FUNDS
1. Fixed Assets
a) Gross Block
b) Less: Depreciation
2.
3.
31st March, 2008

(Rs.'000)
The schedules referred to above form an

integral part of the Balance Sheet
KRISHAN KUMAR GOYAL
BHUPENDRA NATH MATHUR

AMARJIT GOYAL
ALKA GOYAL
MUKESH SEHGAL
HARDYAL SEHRAWAT
General Manager (Corporate Finance)
SATISH KAPOOR
H.S. OBEROI
ANUBHA GARG
Directors
Company Secretary
32
ANNUAL REPORT
16TH
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008
Schedule
I.
Year Ended
31st March, 2007
(Rs.'000)
INCOME
Sales & Other Receipts from Operations
IX
Less : Excise Duty

Other Income
Total
II.
Year Ended
31st March, 2008
(Rs.'000)
4,15,61,78
1,72,97,56
2,25,90
4,13,35,88
42,14
1,72,55,42
23,79
1,09,76
4,13,59,67
1,73,65,18
EXPENDITURE
Material Consumption
XI
3,61,53,60
1,67,10,29
Manufacturing & Other Expenses
XII
43,31,73
15,87,61
Financial Expenses
XIII
12,14,18
2,12,67
(Accretion)/Decretion to the Closing

Stock of Finished Products & Stock in Process
Depreciation
XIV
(19,74,20)
(17,51,32)
5,65,61
1,89,88
4,02,90,92
1,69,49,13
10,68,75
4,16,05
8,98
(29)
1,12,47
42,06
Profit for the Year

Expenses/Income (Net) Related to Previous Years
Provision for Taxation
- Income Tax / Wealth Tax
- Fringe Benefit Tax
14,30
6,16
- Deferred Tax
3,79,22
1,20,05
Add: MAT Tax Assets
1,05,96
36,74
Net Profit for the year after Tax

Earning Per Share (Basic & Diluted) (in Rs.)
& Notes on Accounts
6,59,74
3.77
2,84,81
1.62
XV
This is the Profit & Loss account referred

ASHOK K. GOEL
Partner
Place : Chandigarh
The schedules referred to above form an

integral part of the Profit & Loss Account
KRISHAN KUMAR GOYAL

AMARJIT GOYAL
ALKA GOYAL
MUKESH SEHGAL
HARDYAL SEHRAWAT
SATISH KAPOOR
H.S. OBEROI
ANUBHA GARG
Directors
Company Secretary
33
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH2008

Year Ended
31st March, 2008
(Rs.000)
Particulars
A. Cash Flow from Operating Activities

Net Profit
Adjusted for :
i)
Depreciation
5,65,61
ii) (Profit)/Loss on Sale of vehicle/items Written off
4,62
iii) Interest on Borrowings
11,50,10
iv) Provision for Tax
1,26,77
v) Dividend Received
(10)
vi) (Profit)/ loss on sale of Investment
vii) Interest Received

(3,76)
viii) MAT Tax Assets
(1,05,96)
ix) Deffered Tax Liability
3,79,22
Operating Profit before working Capital Changes
Adjusted for :
i)
Inventories
ii) Trade & Other Receivables
iii) Trade Payable, Liabilities & Provisions
Year Ended
31st March, 2007
(Rs.000)
6,59,74
21,16,50
2,84,81
1,89,88
2,92
1,88,37
48,22
(10,62)
(52,09)
(8,07)
(36,74)
1,20,05
27,76,24
(23,25,50)
(12,01,62)
11,87,03
(23,40,09)
4,41,92
7,26,73
(18,47,40)
(19,67,71)
10,51,49
(27,63,62)
Cash Generated from Operations

Income Tax Paid
4,36,15
91,30
(20,36,89)
76,27
Net Cash generated from Operating Activities (A)
3,44,85
(21,13,16)
(14,55,42)
(3,72,35)
10
3,76
1,05,96
2,51
(10,01)
(51,69,25)
(4,52,41)
10,62
52,09
8,07
36,74
14,84
3,17,74
(17,25,45)
(51,81,56)
2,43,00
(3,41,88)
(4,35,73)
28,51,43
(11,46,97)
(2,60,72)
42,01,36
37,92,55
(1,88,37)
Net Cash in Financing (C)
11,69,85
75,44,82
Net increase/decrease in Cash & Cash Equivalent

Cash & Cash equivalent as on 1st April, 2007
Cash & Cash equivalent as on 31st March, 2008
(2,10,75)
3,28,08
1,17,33
2,50,10
77,98
3,28,08
B. Cash Flow from Investing Activities

i)
Purchase of Fixed Assets
ii) Payable against Capital Goods
iii) Dividend Received
iv) (Profit)/ loss on sale of Investment
v) Interest received
vi) MAT Tax Assets
vii) Sale of vehicle/other items
viii) Investments
Net Cash used in Investing Activities (B)
C. Cash Flow from Financing Activities
Share Application & Warrant Money
Sales Tax Deferment
Term Loan
Cash Credit Limit & Unsecured Loans
Interest Paid
This is the Cash Flow Statement referred

ASHOK K. GOEL
Partner
Place : Chandigarh
For and on behalf of Board

KRISHAN KUMAR GOYAL

AMARJIT GOYAL
ALKA GOYAL
MUKESH SEHGAL
HARDYAL SEHRAWAT
SATISH KAPOOR
H.S. OBEROI
ANUBHA GARG
Directors
Company Secretary
34
16TH
ANNUAL REPORT
SCHEDULES FORMING PART OF THE ACCOUNTS

SCHEDULE : I
SHARE CAPITAL
As at
31st March, 2008
(Rs. '000)
As at
31st March, 2007
(Rs. '000)
30,00,00
30,00,00
Authorised
3,00,00,000 Equity Shares of Rs. 10/- each
Issued, Subscribed and Paid Up

*1,75,06,200 (87,53,100)
Equity Shares of Rs. 10/- each
17,50,62
8,75,31
3,90
3,90
Add : Forfeited Shares (Amount paid up)
17,54,52
8,79,21
17,54,52
8,79,21
*Out of above 87,53,100/- shares of Rs. 10 each

have been alloted as bonus shares by utilization of
undistributed profits
SCHEDULE : II
RESERVES & SURPLUS
1.
Capital Subsidy
2.
Profit & Loss Account

From Last Year
Less : Transfer for Bonus Issue
Addition During the year
13,15,45
8,75,31
6,59,74
35
As at
31st March, 2008
(Rs. '000)
As at
31st March, 2007
(Rs. '000)
25,00
25,00
10,99,88
13,15,45
11,24,88
13,40,45
SCHEDULE : III
SECURED LOANS
As at
31st March, 2008
(Rs. '000)
As at
31st March, 2007
(Rs. '000)
PUNJAB NATIONAL BANK

- Term Loan
24,42,32
25,83,79
- Working Capital Borrowings
32,19,54
22,35,20
3,13
- Term Loan
12,48,30
14,13,01
22,29,77
4,16,11
16,59,42
17,88,98
4,27,83
2,56,92
- Interest Accured & Due

STATE BANK OF INDIA
CANARA BANK
- Term Loan
INTEREST FREE LOAN
3,26,06
6,67,94
1,15,56,37
93,61,95
NOTE : 1. Term Loan from Punjab National Bank, State Bank of India and Canara Bank are secured by way of equitable
mortgage of Land & Building located at Village Shamgarh, Dist. Karnal (Haryana) of the Company &
hypothecation of moveable assets forming part of the Fixed Assets and Capital Work in progress of the
Company on pari-passu moveable assets forming part of the Fixed Assets and Capital Work in progress of
the Company on pari-passu basis and also guranteed by Managing Director of the Company
2. Working Capital borrowings from Banks is secured by hypothecation of stock of Raw Materials, Stock in
Process, Finished Stock, other current assets & Book Debts on pari-pasu basis and also secured by first
charge on fixed assets along with Term Loan on pari-pasu basis and guaranteed by Managing Director of
the Company.
3. The Interest Free Loan from Director of Industries, Haryana is secured by way of Bank Guarantee &
personal sureties provided by the company.
SCHEDULE : IV
UNSECURED LOANS
From Directors
From Corporate Bodies
From Others
36
As at
31st March, 2008
(Rs. '000)
As at
31st March, 2007
(Rs. '000)
1,83,96
2,51,38
15,67,50
16,17,84
49,68
49,40
18,01,14
19,18,62
37
14,28,19
75,05,44
13,24,45
Capital Work-inprogress
PreviousYear (WIP) 36,81,46
75,26,26
18,50,34
27,63,58
1,02,54,62
12,38
14,85
Previous Year
Total
6,87
75,62
Vehicles
Intangible Assets
55,39
Furniture, Fixture &

Office Equipments
15,62,00
Plant & Machinery 84,37,95
Additions
2,61,11
1,89,93
As at
1st
Apr., 2007
98,62,45
18,23,10
35,22
15,64
15,64
13,24,45
9,29,54
1,02,54,62
1,20,89,32
6,87
72,36
70,24
99,99,95
17,49,97
1,89,93
As at
31st
Mar.,2008
B L O C K
Sales/
adjustments
G R O S S
14,88,86
Buildings
Land
PARTICULARS
FIXED ASSETS
SCHEDULE : V
12,59,73
14,32,15
4,86
25,94
20,67
12,46,18
1,34,50
Up to
31st
Mar.,2007
N E T
1,89,88
5,65,61
1,14
8,10
3,67
5,00,96
51,74
17,46
8,51
8,51
87
46,83
45,90
82,52,81
15,63,73
1,89,93
14,32,15
13,24,45
9,29,54
88,22,47
19,89,25 1,01,00,07
6,00
25,53
24,34
17,47,14
1,86,24
During Deductions/
Up to
As at
the Adjustments
31st
31st
year
Mar.,2008 Mar.,2008
D E P R E C I A T I O N
88,22,47
2,01
49,68
34,72
71,91,77
13,54,36
1,89,93
As at
31st
Mar.,2007
B L O C K
(Rs. 000)
ANNUAL REPORT
16TH
SCHEDULE : VI
INVESTMENTS
Long Term Invesments (Non-Trade) at Cost
Equity Shares Fully Paid (Quoted)
Face Value
Quantity (in Nos.)

2007- 08 2006- 07
Cost (in Rs. '000)

2007- 08 2006- 07
Infosys Technologies Limited

Share Purchased during the year NIL (5000)
Share Sold during the year NIL (8500)
500
500
7,84
7,84
Vardhman Textiles Ltd

Share purchased during the year NIL (31000)
Share sold during the year NIL (78020)
10
2000
2000
7,26
7,26
Thermax Ltd.
Share purchased during the year NIL ( 2500 )
Share sold during the year- NIL (1000 )
1500
1500
4,77
4,77
Vardhman Holdings Limited

Share purchased during the year NIL
(NIL)
Share sold during the year NIL (2350)
10
3320
3320
7,53
7,53
27,40
27,40
TOTAL(A)
Figures in brackets are of Previous year
Investment in Equity Funds (Un-quoted)

Face Value
Principal PNB Long Term Equity Fund
3 year plan series II Growth Plan
Units purchased during the year 1,00,000 (NIL)
Quantity (in Nos.)

2007- 08 2006- 07
Cost (in Rs. '000)

2007- 08 2006- 07
10
100000
10,00
Aricent Technologies ( Holdings ) Ltd

10
(Former flextronics software systems ltd.)
Share 132 Flextronics Software System Ltd. converted
in to 1069 shares of Aricent Technolgies (Holding) Ltd
during the year(NIL)
Share sold during the year NIL (2368 )
1069
132
76
76
TOTAL(B)
Figures in brackets are of Previous year
10,76
76
GRAND TOTAL OF INVESTMENTS (A+B)
38,16
28,16
Aggregate cost of Quoted Investment
27,40
27,40
Market Value of Quoted Investment
25,24
32,22
Aggregate cost of Un-Quoted Investment
10,76
76
38
ANNUAL REPORT
16TH
SCHEDULE : VII
CURRENT ASSETS, LOANS & ADVANCES
As at
31st March, 2008
(Rs.'000)
(A)
1.
2.
3.
CURRENT ASSETS
Inventories
Stock-in-hand
a) Raw Materials
b) Stocks in Process
c) Finished Goods
d) Stores & Spares
e) Packing Material
1,55,47
1,37,37
42,29,61
3,45,42
1,48,93
Sundry Debtors
i. Debts Outstanding for period
Exceeding Six Months
a) Unsecured & Considered Good
ii. Other Debts (Unsecured & Considered Good)
35,15
28,52,79
Cash & Bank Balances

a) Cash in hand
b) Bank Balances with scheduled Banks
i) Fixed Deposits
ii) Current Accounts
As at
31st March, 2007
(Rs.'000)
50,16,80
65,69
31,35
23,61,42
1,41,81
91,03
26,91,30
28,87,94
32,17
22,88,95
23,21,12
11,28
41,98
64,07
7,22
1,17,33
3,01,51
19,35
80,22,07
B)
LOANS & ADVANCES

(Unsecured, Considered Good)
a) Advances Recoverable in Cash or
in kind or for Value to be Received/Adjusted
b) Security Deposits
c) MAT Tax Assets
10,30,18
46,93
1,42,70
Total (A+B)
12,19,81
92,41,88
39
3,28,08
53,40,50
5,01,93
46,34
36,74
5,85,01
59,25,51
SCHEDULE : VIII
CURRENT LIABILITIES & PROVISIONS
(a) Current Liabilities

Sundry Creditors
Due to Directors
Security Deposits
Advances from Customers
Creditors against Capital Goods
Other Liabilities
(b) Provisions
Gratuity
Taxation (Net)
Fringe Benefit (Net)
Total (a+b)
As at
As at
31st March, 2008

(Rs.'000)
31st March, 2007

(Rs.'000)
19,88,54
9,54
23,30
1,78,90
2,98,74
5,68,26
10,77,63
6,35
18,11
81,63
6,71,09
4,04,03
30,67,28
22,58,84
38,23
42,26
1,50
31,99
7,49
80
81,99
40,28
31,49,27
22,99,12
SCHEDULE : IX
SALES & OTHER RECEIPTS FROM OPERATIONS
Sales
Raw Milk
Conversion Charges
Export Incentive
Year Ended
Year Ended
31st March, 2008

(Rs.'000)
3,32,73,32
62,52,76
10,44,72
9,90,98
31st March, 2007

(Rs.'000)
1,19,70,40
44,19,55
7,89,81
1,17,80
4,15,61,78
1,72,97,56
SCHEDULE : X
OTHER INCOME
Year Ended
31st March, 2008
(Rs.'000)
Dividend Received from non-trade long-term Investments
10
Net Profit on Sale / redemption of non-trade long Term Investments
Interest from Banks (Gross, Tax deducted Rs. 131085/3,76

previous year Rs. 222331/-)
Sundry Income
19,93
23,79
40
Year Ended
31st March, 2007
(Rs.'000)
10,62
52,09
8,07
38,98
1,09,76
ANNUAL REPORT
16TH
SCHEDULE : XI
MATERIAL CONSUMPTION
Raw Material Cost

Packing Material
Year Ended
31st March, 2008
(Rs. '000)
3,51,09,99
10,43,61
Year Ended
31st March, 2007
(Rs. '000)
1,61,45,83
5,64,46
3,61,53,60
1,67,10,29
Year Ended
31st March, 2008
(Rs. '000)
Year Ended
31st March, 2007
(Rs. '000)
SCHEDULE : XII
MANUFACTURING & OTHER EXPENSES
Stores & Spares Consumed

Power & Fuel
Salaries & Other Benefits
Excise Duty on Accrection/Decretion in Stock
Employers Contribution to Employees PF
Staff Welfare
Other Direct Expenses
Travelling & Conveyance
Rent
Insurance
Rate, Fee & Taxes
Auditors Remuneration
- Statutory Audit Fee
- Tax Audit Fee
- Tax consultancy Fee
- Certification Fee
- Reimbursement Expenses
-Cost Audit Fee
-Cost Audit Expenses
Repair & Maintenance
- Building
- Plant & Machinery
- Vehicles
- Others
Marketing expenses
Loss on Sale/written off of Fixed Assets
Loss on Exchange Fluctuation
Freight, Transport & Distribution
Miscellaneous Expenses
41
5,33,91
17,55,59
4,90,91
39,70
18,83
3,88
2,34,51
1,00,17
6,40
25,40
10,80
1,74,77
6,86,91
2,60,77
3,00
11,46
5,87
1,13,47
48,30
5,54
14,37
5,46
3,37
56
56
48
63
34
6
1,50
25
25
15,84
27,69
8,16
4,36
1,10,68
4,62
1,25,86
4,13,70
3,94,72
6,14
13,47
5,91
1,29
22,70
2,92
9,23
96,84
96,68
43,31,73
15,87,61
33
15
3
SCHEDULE : XIII
FINANCIAL EXPENSES
Year Ended
31st March, 2008
(Rs. '000)
Year Ended
31st March, 2007
(Rs. '000)
90,20
Interest
a) Term Loan
5,69,69
b) Cash Credit
4,53,73
81,72
c) Others
1,26,69
16,45
Bank Charges
64,07
24,30
12,14,18
2,12,67
Year Ended
31st March, 2008
(Rs. '000)
Year Ended
31st March, 2007
(Rs. '000)
SCHEDULE : XIV
(ACCRETION)/DECRETION TO THE CLOSING STOCK
OF FINISHED GOODS &STOCK IN PROCESS
Opening Stock
Finished Goods
Stock in Process
23,61,43
31,35
6,07,16
23,92,78
34,29
6,41,45
Closing Stock
Finished Goods
42,29,61
Stock in Process
1,37,37
Total
23,61,42
43,66,98
(19,74,20)
42
31,35
23,92,77
(17,51,32)
ANNUAL REPORT
16TH
SCHEDULE XV
NOTES ON ACCOUNTS
1.
Accounting Convention
The Financial Statements are prepared under the Historical Cost Convention in accordance with the
applicable accounting standards and relevant presentational requirements of the Companies Act, 1956.
II
Fixed Assets and Depreciation

a) Fixed assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and
other attributable cost including financing cost of borrowed funds attributable to construction or acquisition
of fixed assets for the period upto the date when the assets are put to use. As per Accounting Standard
12 issued by Institute of Chartered Accountant of India, the grant/subsidy received against any fixed asset
has been reduced from the cost stated in respective head. The capital subsidy received has been shown
as Reserve & Surplus. Modvat credit / Service tax & VAT available has been reduced from cost of the
respective assets and Capital Work in Progress.
b) Depreciation on Fixed Assets has been provided on Straight-line Method according to Schedule-XIV of
the Companies Act, 1956.
III
Intangibles and Amortisation

Intangible assets are recognized if it is probable that the future economic benefits attributable to the assets
will flow to the enterprise and cost of the asset can be measured reliably in accordance with Accounting
Standard-26 on Intangibles issued by the Institute of Chartered Accountant of India.
Intangible assets are amortised on straight line basis over their useful lives, which range from 1-5 years,
determined on the basis of expected future economic benefits. The amortization period and method would
be reviewed at the end of each financial year.
IV
V
VI
VII
Inventories
Stocks of Raw materials, Stores & Spares, Packing Materials are valued at cost on FIFO basis exclusive of
VAT. Stock in process is valued at cost including appropriate conversion cost and Finished Goods is valued
at cost or Net realizable value whichever is lower including appropriate conversion cost. Cost includes
appropriate share of production overheads and packing cost & Excise Duty wherever applicable. Excise
Duty on accretion/decretion in stock has been provided in manufacturing expenses.
Investments
Long term investments are stated at cost of acquisition & related expenses
Foreign Exchange Transactions
Transactions in foreign currency are accounted for at the exchange rate prevailing on the date of the
transaction. Exchange difference arising out of their settlement is dealt with in the profit and loss account.
All monetary assets and liabilities denominated in foreign currency are restated at the year end rate and the
exchange difference arising on such translation is recognised in the profit and loss account.
The Company purchases foreign exchange forward contracts to mitigate the risk of changes in foreign
exchange rates associated with receivables denominated in foreign currencies. For forward contracts
associated with underlying outstandings at the balance sheet date, the premium or discount arising at the
inception are amortised as income or expense over the life of the contract.
Forward contracts without an underlying outstanding as at the balance sheet date are marked-to-market
at the year end and resultant loss, if any, is recognised in the Profit & Loss Account.
Revenue Recognisation
Revenues/Incomes and Costs/Expenditures are being generally accounted for on accrual basis, as they
are earned or incurred.
43

Dividend on investments is recognized when the right to receive the same is established.
Sales are inclusive of Excise duty wherever applicable
VIII
Employee Benefits
a) Provident Fund
Employee benefits in the form of Provident Fund whether in pursuance of law or otherwise is accounted
on accrual basis and charged to Profit & Loss account of the year.
b)Gratuity
The retirement benefits in the form of Gratuity Scheme has been provided for the year ended as on 31st
March 2008 in accordance with Accounting Standard 15 (revised 2005).
IX
Borrowing Cost
Interest on borrowings is recognized in the profit and Loss account except interest incurred on borrowings,
specifically raised for projects are capitalized to the cost of the assets until such time that the asset is put
to use for its intended purpose.
Taxation
Provision for Taxation is made on the basis of the Taxable profits computed for the current accounting
period in accordance with the Income Tax Act 1961. Deferred Tax resulting from timing difference between
Book Profits and Tax Profits is accounted for at the applicable rate of Tax to the extent of the timing
differences are expected to crystallize, in case of Deferred Tax Liabilities with reasonable certainty and in
case of Deferred Tax Assets with virtual certainty that there would be adequate future taxable income
against which Deferred Tax Assets can be realised.
XI
Business Segment
The company is engaged in the business of Milk products which in context of Accounting Standards 17
- Segment Report issued by the institute of Chartered Accountants of India is considered the only
business segment. So separate segment reporting is not necessary.
XII
Impairment of Fixed Assets

As at 31st of March 2008, the company has reviewed the future earning of its cash generating unit in
accordance with the Accounting Standards 28 Impairment of Assets issued by the Institute of Chartered
Accountants of India. As the carrying amount of the assets does not exceed the future recoverable amount
consequently, no adjustment is considered necessary by the management.
XIII
Provision for contingent liabilities & contingent Assets

Provision involving substantial degree of estimation in measurement are recognized when there is a
present obligation as a result of past event and it is probable that there will be an outflow of resources.
Contingent liabilities are disclosed by way of notes. Contingent Assets are neither recognized nor disclosed
in the financial statement.
XIV
Accounting policies not specifically referred to above are consistent with generally accepted accounting
practices.
44
ANNUAL REPORT
2.
Contingent Liabilities
a)
b)
c)
d)
e)
f)
g)
3.
As at
31st March,2008
(Rs. in Lacs)
Bank Guarantee
101
Custom Duty in absence of export
Milk Cess
320.63
Capital Commitment
Cenvat credit taken on M.S./ S.S. sheets, Plates ,Angles,

82.40
Channels used in fabrication of Storage Tanks.The claim
for cenvat credit is disputed by the central Excise Deptt.
The amount of Rs. 77.21 Lacs was deposited under protest
along with interest of Rs. 5.19 Lacs on said amount. .
Local Area Development Tax (LADT)
8.60
Erection & Commissioning charges of US$ 100000/40.10
Payment to directors
a)
b)
c)
d)
e)
Year Ended
31st March,2008
(Rs. 000)
57,71
42,51
2,60
22,07
16
Remuneration including perks value

Director Travelling Expenses
Meeting Fee
Interest
Contribution to P.F.
16TH
As at
31st March,2007
(Rs. in Lacs)
117.00
2532.18
202.50
14.99
Year Ended
31st March, 2007
(Rs. 000)
42,53
17,80
2,00
25
70
Provisions for Incremental gratuity liability and leave encashment have not been considered, since the
provisions are based on actuarial basis for the Company as a whole.
4.
In the opinion of the Board, Current Assets, Loans & Advances have a value on realisation in the ordinary
course of business at least equal to the amount at which they are stated
5.
Diminution in the value of quoted investments, if any, on individual basis are not considered to be of a
permanent nature and thus in the opinion of the Management, no provision for the same is necessary to be
made. Moreover the investments made are intended to be held for a long term.
6.
The company was providing for Milk Cess under notification no. 6388-AH-4-2001/16142 dated 09.09.01 up
to financial year 2004-05. As the matter is challenged in the High Court, against levy of such duty, the
Company has not provided for Milk Cess for financial Year 2005-06 amounting to Rs.84.38 Lacs, for
financial year 2006-07 amounting to Rs. 118.12 Lacs & for financial year 2007-08 amounting to Rs. 118.13
Lacs . However the same have been disclosed as contingent liability amounting to Rs. 320.63 Lacs as in
the opinion of the management, the same will not be payable.
7.
Earning Per Share
(Amount in Rs. 000)
PARTICULARS
2007-08
2006-07
Profit after taxation as per Profit & Loss A/c
6,59,74
2,84,81
Weighted average Number of Equity Shares

outstanding
(After 1 : 1 Bonus issue)
17506200
Basic & Diluted earning per share in Rupees

(Face value Rs. 10 per share)
3.77
45
17506200
1.62

Computation of weighted average number of shares
PARTICULARS
2007-08
2006-07
Number of Equity Shares outstanding at the beginning of the year
8753100
8753100
Add : Bonus issue 1:1
8753100
8753100*
Total weighted Average number of Equity Shares
17506200
17506200
Note 1* : Earning per share of financial year 2006-07 is adjusted with bonus issue of 1:1 dated 26th October
2007.
Note 2: The conversion price of Convertible Share warrants is higher than the fair value of equity shares
arrived at by taking the average of last six months prices and is accordingly non-dilutive
8.
As per the Accounting Standards - 18, issued by Institute of Chartered Accountants of India Related Party
Disclosure. In view of this, the company has given the following disclosures for the year.
The company has identified transactions of the related parties during the year, as per detail given below. No
provision for doubtful debts is required to be made as no amount was written off or written back from such
parties:
Disclosure of Transactions with Related Parties
Rs. in Thousands
S.
No.
Particulars
Associates
Key
Relatives of Key
management
management
personnel
personnel & their
enterprises
1.
Remuneration
57,87
2.
Rent Paid
2,70
3.
Interest
5,98
1,17,42
4.
Loan Taken
7,90,00
5.
Loan Repaid
74,00
9,34,00
6.
DEPB / V.K.U.Y Licence/scrap Sold/Ghee Sold
27,79
7.
Purchases of Raw Material
73,41,82
8.
Sharing of Expenses
6,32
9.
Lease Rent Received
2,63
Sr. No Particulars
Nature of the Party
1.
Associates
NIL
2.
Key Management Personnel
Mr. Krishan Kumar Goyal

Mr. H. S. Oberoi
3.
Relatives of Key Management Personnel (KMP)
1. Krishan Kumar Goyal (HUF)

2. Mr. Amarjit Goyal
3. Amarjit Goyal (HUF)
4. Mrs.Rattan Mala Goyal
5. Mrs. Alka Goyal
6. Mr. Aditya Goyal
7. Miss. Sonam Goyal
46
ANNUAL REPORT
16TH
Sr. No Particulars
Nature of the Party
4.
1. Modern Steels Ltd.

2. Chandigarh Finance Pvt.Ltd
3. Mala Builders Pvt. Ltd.
4. Modern Dairy Farms.Ltd
5. Bhanu Investment & Commerce Ltd.
6. Shree Ganesh Investments & Ind. Ltd.
7. Smile Estates (P) Ltd
9.
Enterprises over which KMP and relatives

of such personnel are able to exercise
significant influence
The components of deferred tax balances as on 31.03.2008 are as given below:
Deferred Tax Assets (Net)

Particulars
Rs. in Thousands
Deferred Tax Assets/ Arising Balance as
(Liability) as
during the
at
at 01.04.2007
year
31.03.2008
Deferred Tax Assets

On account of timing Difference in :a) Unabsorbed Depreciation & Business Losses
b) Disallowance under Section 43B of Income Tax Act.
c) Disallowance under Section 40(ia)of Income Tax Act.
d) Provision for Gratuity
Total
2,34,95
(1,47,65)
87,30
68,13
2,87
71,00
9,53
9,53
10,77
2,22
12,99
3,13,85
(1,33,03)
1,80,82
Deferred Tax Liability

On account of timing difference in:a) Depreciation
10.
6,15,09
2,46,20
8,61,29
Total
6,15,09
2,46,20
8,61,29
Net Deferred Tax Liability
3,01,24
3,79,23
6,80,47
The Micro, Small and Medium Enterprises Development Act 2006 has come into force from October 2006
which has repealed the provisions of interest on delayed payment to small scale and ancillary industrial
undertaking Act, 1993.
The company is in communication with its suppliers to ascertain the applicability of this Act. As on the date
of this Balance Sheet, the Company has not received any communication from any of its suppliers regarding
the applicability of this Act to them. This has been relied upon by the Auditors.
11.
The Company has provided remuneration of Chairman & Mg. Director Mr. Krishan Kumar Goyal amounting to
Rs. 42.07 lacs which requires Central Government approval in view of the fact that he is drawing
remuneration from Modern Steels Limited also. As per appointment terms the remuneration permissible is Rs.
35.10 lacs taking into account the minimum remuneration permissible in Modern Steels Limited amounting to
Rs. 21.07 lacs.
In the event that the Central Govt. approval is not received, the provision for remuneration of Rs . 6.97 Lacs
is to be written back. This would then result in the Profit after taxation for the year shall be Rs. 664.21 lacs
The Reserves & Surplus shall be Rs. 1129.35 lacs as against the reported figure of Rs. 1124.88 lacs. The
Net Current Assets shall be Rs. 6099.44 lacs as against the reported figure of Rs. 6092.61 lacs. The Net
Defered Tax Liability shall be Rs. 682.82 lacs as against the reported figure of Rs. 680.47 lacs.
12
Previous years figures have been recasted/regrouped wherever necessary.
47

13.
14.
During the financial year 2007-08 total pre-operative expenses of Rs. 177.81 lacs were incurred out of
which Rs. 102.73 lacs were capitalized and Rs. 75.08 lacs were included in work in progress of Building
& Plant & Machinery. The following amounts have been charge to different heads i.e. capitalized during the
year.
Sr. No.
Particulars
Amt. (Rs. in Lacs)
Interest
109.57
Salaries
25.89
Electricity
13.75
Insurance
6.00
Other
22.60
Total
177.81
Disclosure relating to Employees Benefits.

In accordance with Accounting Standard 15 (revised 2005) actuarial valuation was done in respect of the
aforesaid defined benefit scheme based on the following assumptionsA ASSUMPTIONS:
As on 31.03.2008
Discount Rate
8.00% p.a
Rate of increase in Compensation levels
5.50%p.a
Expected Rate of Return on Plan Assets
Being NIL
Average remaining working lives of employees (years)
22.63
B TABLE SHOWING CHANGES IN PRESENT VALUE OF OBLIGATIONS:
01-04-2007 to 31-3-2008
Present Value of Obligation as at the beginning of the Period
32,30,350
Acquisition adjustment
Nil
Interest Cost
2, 59,136
Past Service Cost
NIl
Current Service Cost
6,36,331
Curtailment Cost/ (Credit)
Nil
Settlement Cost/ (Credit)
Nil
Benefits paid
(2, 15,168)
Actuarial (gain)/loss on obligations
(87,960)
Present Value of Obligation as at the end of the period
38,22,689
C ACTUARIAL GAIN/LOSS RECOGNIZED
Actuarial (gain)/loss for the period Obligations
(87,960)
Actuarial (gain)/loss for the period-Plan Assets
Nil
Total (gain)/loss for the period
(87,960)
Actuarial (gain)/loss recognized in the period
(87,960)
Unrecognized actuarial (gains)/losses at the end of Period
Nil
D THE AMOUNTS TO BE RECOGNIZED IN BALANCE SHEET AND STATEMENTS OF PROFIT AND
LOSSES:
01-04-2007 to 31-03-2008
Present Value of Obligations as at end of the period
38,22,689
Fair Value of Plan Assets at the end of the period
Nil
Funded Status
(38,22,689)
Unrecognized Actuarial (gains)/losses
Nil
Net Assets/(Liability ) Recognized in Balance Sheet
(38,22,689)
48
ANNUAL REPORT
E
15.
EXPENSES RECOGNIZED IN THE STATEMENT OF PROFIT AND LOSSES:

Current Service Cost
Past Service Cost
Interest Cost
Expected Return on Plan Assets
Curtailment Cost/(Credit)
Settlement Cost/(Credit)
Net actuarial (gain) /loss recognized in the period
Expenses Recognized in the statement of Profit & Loss
16TH
6,36,331
Nil
2, 59,136
Nil
Nil
Nil
(87,960)
8,07,507
Additional information pursuant to Provision of paragraphs 3 & 4 (Part - II) of the Schedule VI to the
Companies Act, 1956.
a.
Installed Capacity
i.
The Installed Capacity of the plant in terms of milk processing is 3.50 lacs litres per day on yearly basis.
ii
The products are manufactured in integrated plant. Hence, Product wise Installed Capacity cannot be
given.
iii
Products comprises of Pasteurised Liquid Milk, Pure Ghee, Skimmed Milk Powder, Partially Skimmed Milk
Powder, Whole Milk Powder, Dairy Whitener, Cheese, Flavoured Milk, Table Butter, Casein, Lactose,
Whey Protein Concentrate etc.
b. Capacity, Production, Stock & Sales

Class of Goods
(Qty in Kg. & Value Rs. in Lacs)
Production
Qty.
Closing Stock
Qty.
Value
Qty.
Sales
Value
MILK POWDER
Current Year
Previous Year
4366775
4255280
319107
343554
389.35
383.89
4391222
4141364
6083.42
4971.25
PURE GHEE
Current Year
Previous Year
7626189
2968162
327219
539511
417.53
731.49
7838481
2724580
10974.81
3535.72
LIQUID MILK*
Current Year
Previous Year
66851009
52550776
0
0
0
0
0
0
0
0
BUTTER
Current Year
Previous Year
1613756
1873027
8624
152505
10.46
179.27
1757637
1749378
2025.41
1957.89
MILK PROTEIN FRACTIONS

Current Year
7038500
Previous Year
1014420
1711975
484705
3292.25
1010.01
5811230
529715
12872.94
798.02
OTHERS
Current Year
Previous Year
883482
516548
79287
43763
120.02
56.76
847958
513021
1316.74
707.52
Current Year
Previous Year
88379711
63178213
2446212
1564038
4229.61
2361.42
20646528
9658058
33273.32
11970.40
*Production includes Liquid Milk 66851009 Kgs. (Previous year 52550776 kgs.) for other parties
During this year Raw Milk sold 33653043Kgs. amounting to Rs. 6252.76 Lacs (Previous year 24477627Kgs.
amounting to Rs. 4419.56 Lacs) to other parties
49

(Quantity in Kg. & Value in Lacs.)
Particulars
a.
Raw Material Consumed *

Milk (incl.Sale)
Edible Chemicals
Others
< Current Year >

Quantity
Value
2312.69
*Including Raw Material Sale

b.
c.
35002.12
3.41
104.46
Previous Year
Quantity
Value
1268.58
16061.27
10.49
74.07
35109.99
16145.83
Value of Imports (CIF Basis)

Plant & Machinery
Store & Spares
127.54
124.39
1433.61
5.50
Expenditure in Foreign
Currency:Plant and Machinery & Spares
Foreign travelling
Foreign commission
Ocean Freight
Others
251.93
15.59
36.51
160.64
55.33
1439.11
6.10
4.44
13.15
7.53
12659.11
1822.40
d.
Earning from Export
e.
Value of Raw Material and

Stores & Spares Consumed
Raw Material
Imported
Indigenous
Stores & Spares
Imported
Indigenous
%age
Value
%age
Value
100
35109.99
100
16145.83
23.30
76.70
124.39
409.52
3.15
96.85
5.50
169.27
50
ANNUAL REPORT
16TH
BALANCE SHEET ABSTRACT AND COMPANYS GENERAL BUSINESS PROFILE

State Code
I.
Registration Details
Registration No.
3 2 9 9 8
Balance Sheet Date

II.
3 1
Capital Raised during the year
2 0 0 8
0 3
Public Issue
Right Issue
N I L
N I L
Private Placement
N I L
Bonus Share
8 7 5 3 1
III.
Position of Mobilisation and

Deployment of Funds
(Amount in Rs. Thousand)
Total Liabilities
Source of Funds
Paid-up Capital
Total Assets
2 0 3 0 9 6 5
2 0 3 0 9 6 5
Reserves & Surplus
1 7 5 4 5 2
1 1 2 4 8 8
Secured Loans
1 1 5 5 6 3 7
Unsecured Loans
1 8 0 1 1 4
Convertible Share Warrant
2 4 3 0 0
Deferred Tax Liabilities

6 8 0 4 7
Application of Funds
IV. Performance of Company

(Amount in Rs. Thousand)
+/+
Net Fixed Assets

1 1 0 2 9 6 1
Net Current Assets
6 0 9 2 6
Accumulated Losses
N I
Turnover (Gross Revenue)
4 1 3 5 9 6
Profit /Loss before tax
1 0 6 8 7
Investments
3 8 1 6
Misc. Expenditure
N I L
1
L
7
5
+/+
Earning Per Share in Rs.

3 . 7 7
V.
0 5
Total Expenditure
4 0 2 9 0 9 2
Profit/Loss After Tax
6 5 9 7 4
Dividend Rate %
N I L
Generic Name of Three principle Production / Services of company (as per monetary terms)
Item Code No.(ITC Code)
Product Description
Item Code No.
Product Description
0 4 0 2 1 0 0 1 Item Code No
Skimmed Milk Powder
3 5 0 1 1 0 0 0
Milk Protein Fraction
51
Product Description
0 4 0 5 9 0 0 2
Pure Ghee

ATTENDANCE SLIP

Regd. Office: 136 KM, G.T. Road, Karnal 132 001 (Haryana)
Please complete the attendance slip and handover at the entrance of the Meeting Hall
NAME OF THE SHARE HOLDER(S) / PROXY*
Regd. Folio No. / Client ID No. :
ADDRESS
NO. OF SHARES HELD
I hereby record my presence at the 16th ANNUAL GENERAL MEETING of the Company held on Monday, the 29th
September, 2008 at 11:00 a.m. at the Regd. Office of the Company at 136 KM, G.T. Road, Karnal 132 001 (Haryana).
*Strike out whichever is not applicable
SIGNATURE OF THE SHAREHOLDER/PROXY*
PROXY

Regd. Office: 136 KM, G.T. Road, Karnal 132 001 (Haryana)
Regd. Folio No./ Client I.D. No.
I/We .........................................................................................................................................................................
of ............................................................................................................................ .being a member/ members of
MODERN DAIRIES LIMITED hereby appoint ...............................................................................................................
of ......................................................................................................................................................................... or
failing him ...... .......................................................................................................................................................
of .............................................................................................................................................................................
as my/our proxy to vote for me/us and on my/our behalf at the 16th ANNUAL GENERAL MEETING of the Company held
on Monday, the 29th September, 2008 at 11:00 a.m. at the Regd. Office of the Company at 136 KM, G.T. Road, Karnal
132 001 (Haryana) and at any adjournment thereof.
Signed this.............................day of ..........................................2008.
NOTE: The proxy form must be returned so as to reach the Registered Office of the Company not less than 48
hours before the time for holding the aforesaid meeting. The proxy need not be a member of the Company.
Shareholders are requested to bring their copy of the Annual Report alongwith them at the Annual General
Meeting as copies of the same will not be distributed at the meeting.
52

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ANNUAL REPORT

Sector 34, Chandigarh-160 022

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

REGISTERED OFFICE & WORKS

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

Karnal - 132 001 (Haryana)

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

REGISTRARS & SHARE TRANSFER AGENTS

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

Phase II, New Delhi - 110 020

MODERN DAIRIES LIMITED

Notice is hereby given that the 16th Annual General

To consider and adopt the Audited Balance Sheet

Company or its Affiliates in the past five years, (ii)

MODERN DAIRIES LIMITED

Required Liquidity means an average trading

of such transmission, as the case may be, notice

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

MODERN DAIRIES LIMITED

73. HOW QUESTIONS TO BE DECIDED AT

Party of the Company (including any Director,

MODERN DAIRIES LIMITED

Selling Shareholders) proposes to Transfer

Exchange), the IFC Shares will be automatically

MODERN DAIRIES LIMITED

The Company shall at its own cost make any and

formed by the Board.

MODERN DAIRIES LIMITED

Chartered Accountants have expressed their willingness

By order of the Board

EXPLANATORY STATEMENT PURSUANT TO SECTION

and commercial areas and had served as Managing

: Dr.Bhupendra Nath Mathur

List of other Directorships held:

Date of Appointment : 18.08.1993

(iii) Precision Pipes and Profiles Co. Ltd.

: Mr. Satish Tandon

Investors Grievances Committee -

Chairman/Member of the Committee of

Chairman/Member of the Committee of the

Kolte Patil Developers Limited

Precision Pipes and Profiles Co. Ltd.

Date of Appointment : 30.12.2005

MODERN DAIRIES LIMITED

CHANGES IN CAPITAL STRUCTURE

EXTERNAL COMMERCIAL BORROWING (ECB)

INVESTMENT IN RURAL DAIRY INFRASTRUCTURE

EQUITY INVESTMENT BY IFC (INTERNATIONAL

offered themselves for re-appointment.

Further, after supplying international quality Edible Grade

QUALITY, FOOD SAFETY & ENVIRONMENT

CORPORATE GOVERNANCE AND MANAGEMENT

(ISO 9001:2000, ISO 14001 and HACCP Certifications)

MODERN DAIRIES LIMITED

required under Section 217 (2A) of the Companies Act,

INDUSTRY STRUCTURE & DEVELOPMENTS

CONSERVATION OF ENERGY, TECHNOLOGY

Globally, the demand for nutritional products is growing

RISK & CONCERN

Krishan Kumar Goyal

Modern Dairies Limited has a proper and adequate system

The Company has in place well documented and