Parag Milk Foods Ltd. के निदेशक की रिपोर्ट

Mar 31, 2025

The Board of Directors of your Company (''Board’) is pleased to
share with the valued stakeholders the Integrated Annual Report
for financial year 2024-2025 (''Integrated Annual Report’/ Annual
Report’) comprising of Audited Standalone and Consolidated
Financial Statements of Parag Milk Foods Limited (''Parag’ or
''Company’ or ''Your Company’) for the financial year (''FY’) ended
March 31, 2025. The consolidated performance of the Company
and its subsidiaries has been referred to wherever required.

In Compliance with the applicable provision of the Companies
Act, 2013 (''Act’) and the Securities and Exchange Board of India
(''SEBI’) (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (''Listing Regulations’), this Board’s Report is
prepared based on the financial statements of the Company
for the year under review, with respect to the Company and its
subsidiary companies. The consolidated entity has been referred
to as ''Parag Group’ or ''Group’ in this report.

OVERVIEW OF FINANCIAL PERFORMANCE

Key highlights of Standalone and Consolidated Financial Results of the Company for the financial year ended March 31, 2025, are
summarized as under:

Particulars	Standalone FY 2024-25 FY 2023-24		Consolidated FY 2024-25 FY 2023-24
Revenue from Operations	3,367.40	3,089.83	3,432.21	3,138.70
Other Income	26.60	8.56	40.25	25.01
Total Income	3,394.00	3,098.39	3,472.46	3,163.71
Earnings before Depreciation, Finance Costs, Exceptional Items and Taxation	279.59	210.14	292.93	225.51
Less :- Depreciation and Amortisation Expense	59.68	55.71	67.22	60.25
Less:- Finance Costs	85.07	71.57	93.12	79.40
Profit before Tax and Exceptional Items	134.84	82.86	132.59	85.86
Exceptional Items	-	-	132.59	-
Profit / (Loss) before Tax	134.84	82.86		85.86
Less:- Tax expense
(1) Current Tax:	-	-	-	-
(2) MAT (Credit) / Reversal	-	-	-1.19	0.82
(3) Deferred Tax:	11.30	-9.09	14.99	-5.55
(4) Tax adjustment in respect of earlier years	-	91.95	118.79	-
Profit for the Year After Tax	123.54			90.59
Earnings per Share
Basic	10.36	7.83	9.97	7.71
Diluted	9.89	7.58	9.51	7.47

FINANCIAL PERFORMANCE AND STATE OF
COMPANY’S AFFAIRS

Standalone

At Standalone level, the total Revenue from operations for
FY 2024-25 increased by 8.98% to H3,36740 Crore against
H3,089.83 Crore in the Previous Year 2023-24. The Standalone
Profit Before Tax for FY 2024-25 increased to H134.84 Crore
against H82.86 Crore in the Previous Year 2023-24. The
Standalone Profit after Tax for FY 2024- 25 increased to H123.54
Crore against H91.95 Crore reported in the Previous Year 2023-24.
The Operations and Financial Results of the Company are further

elaborated in the Management Discussion and Analysis Report,
which forms part of the Integrated Annual Report.

Consolidated

Consolidated Revenue from Operations for FY 2024-25 stood
at H3,432.21 Crore reporting a growth of 9.35% as compared
to H3,138.70 Crore in FY 2023-24, driven by improvement in
core categories of mainly Ghee, Cheese and Paneer which
have witnessed a volume growth of 17% for FY 2024-25. The
Consolidated Profit Before Tax for FY 2024-25 increased to
H132.59 Crore from H85.86 Crore in the Previous Year 2023-24.

The Consolidated Profit After Tax for FY 2024-25 stood at H118.79
Crore as compared to H90.59 Crore in the Previous Year 2023-24.

PERFORMANCE ANALYSIS, BUSINESS OUTLOOK
AND HIGHLIGHTS

Parag demonstrated a robust performance in FY 2024-25, with
a 10% year-on-year volume growth, driven by strong momentum
in its core dairy categories-Ghee, Cheese and Paneer which
collectively recorded 17% growth during the year.

Despite ongoing fluctuations in milk procurement prices, the
Company effectively optimized its cost structure and improved
Gross Profit Margins by 130 basis points, reaching 25.8%,
supported by premium product mix, operational efficiency and
strategic pricing.

According to the IMARC Report 2024:

• Gowardhan Ghee maintained its leadership in the branded
cow ghee segment with a 22% market share.

• Go Cheese continued as the second-largest cheese brand
in India, with a 35% share, reflecting consumer trust and
category strength.

New-Age Business Growth:

• Avvatar (Parag’s performance nutrition brand) recorded
significant growth, strengthening its leadership in India’s
sports and active nutrition category through innovation and
clean-label offerings.

• Pride of Cows expanded its product range and deepened its
reach through quick commerce platforms and premium retail,
accelerating the Company’s premiumization strategy

Company-wide growth was further supported by ongoing
investments in distribution and channel expansion,
reinforcing presence across general trade, modern retail and
digital commerce.

INNOVATION AND PRODUCT EXPANSION

The year was marked by strategic innovation across all brands,
aligned with evolving consumer demand for nutritious, indulgent
and functional foods. Key launches included:

• Gowardhan: Crunchy Chikki (Sesame and Peanut) made
with pure cow ghee - offering a wholesome, nostalgic snack.

• Go: Fruit Yogurt - a vibrant, on-the-go product that blends
taste and nutrition for urban consumers.

• Pride of Cows: Low-Fat High-Protein Paneer, Greek
Yogurt and Bocconcini - all designed for health-conscious,
premium consumers.

• Avvatar: High-protein bars (Chocolate and Coffee Wafer)-
a clean-label snacking innovation aimed at fitness-
focused individuals.

BRAND BUILDING AND MARKETING INITIATIVES

Parag elevated its brand strategy through a holistic, multi¬
channel approach to storytelling, product visibility and consumer
engagement. The goal is to position the Company not just as a
dairy provider but as a partner in health, taste and lifestyle.

1. Multi-Platform Campaigns and Media Integrations

To drive top-of-mind recall, the Company executed strategic

brand integrations on national and regional platforms:

• Go Cheese partnered with Bigg Boss under the
campaign “Har Tasty Cheese, Mein Go Cheese”,
reaching a wide consumer base.

• Presence across Kaun Banega Crorepati, MTV Roadies
and Maharashtrachi Hasya Jatra enhanced emotional
connection with Hindi and regional viewers.

• Branded content initiatives included Chef Ajay Chopra
for Go Cheese, a Curly Tales special with Kamiya Jani
for Pride of Cows and YouTube chef collaborations for
Avvatar-positioning the brands as lifestyle companions.

2. Influencer and Creator Collaborations

• Avvatar Performance Whey was launched with over
100 fitness and lifestyle influencers, spotlighting
India’s 80% protein deficiency and building credibility
as a homegrown, science-backed alternative to
global brands.

• Pride of Cows received organic amplification from
premium lifestyle bloggers and chefs, boosting brand
perception among affluent urban consumers.

• Gowardhan Ghee’s purity was emphasized through
influencer conversations amidst rising concerns over
food adulteration, reinforcing trust and transparency

3. Launch Communication and Product Campaigns

Each new product launch was accompanied by

tailored campaigns:

• Go Fruit Yogurt: “Taste Meets Nutrition-positioning the
product as a nutritious indulgence for busy urban families.

• Gowardhan Chikki: Presented as a healthy festive treat,
rooted in tradition yet modern in convenience.

• Pride of Cows: Focused on clean-label, high-protein,
single-origin dairy options for discerning consumers.

• Avvatar Protein Bars: Launched with a digital-first
campaign under “Snack Strong”, merging convenience,
performance and flavor.

4. On-Ground and Trade Activation

To support retail conversion and in-store traction:

• Go Cheese conducted sampling and bundling in modern
trade, timed around festive seasons and cricket events.

• Pride of Cows ran tasting sessions in premium housing
societies and cafes, reinforcing its boutique, high-
quality identity

• Recipe contests and chef events were organized for
Avvatar and Go Cheese, engaging culinary communities
and fitness enthusiasts alike.

5. Sharpened Brand Positioning

Each brand further refined its voice and identity:

• Gowardhan leaned into its “Garv se Gowardhan”
positioning, reflecting purity, trust and tradition-
especially relevant during the festive period.

• Go Cheese emphasized innovation, variety and fun
targeting families and young adults.

• Pride of Cows reinforced its single-origin, with elevated
packaging and messaging.

• Avvatar strengthened its leadership as India’s own
performance nutrition brand, rooted in clean ingredients,
functional benefits and transparent labeling.

Together, these initiatives solidified Parag’s positioning as a
future-ready dairy and nutrition powerhouse, committed to
meeting modern lifestyle needs while staying true to its roots in
purity, health and trust.

EXPANSION / INCORPORPATION OF SUBSIDIARY

The Company is expanding its wholly owned subsidiary (''WOS’),
Bhagyalakshmi Dairy Farms Private Limited (''Bhagyalaxmi’),
which supplies exclusively to our brand “Pride of Cows” and is
expected to reach about 15,000 cows in coming five years.

The Company has incorporated a wholly owned foreign subsidiary
in Dubai, UAE, named Parag Milk Foods Middle East FZE to
expand its reach and build seamless supply chain operations
worldwide to cater the international market.

REVIEW OF OPERATIONS

The details of review of operations are elaborated in the
Management Discussion and Analysis, which forms part of the
Integrated Annual Report.

BRAND BUILDING: STRATEGY

The Company’s foremost strategic priority is to be one of the best
performing, most trusted and respected dairy FMCG Companies
across stakeholders and become a global nutrition provider that
emphasizes health and nutrition to consumers through quality
and innovation.

EXPORT MARKET

The Company continues to enjoy its presence and brand recall
of Go and Gowardhan brands across several geographies
through its exports to UAE, Singapore, Mauritius, Oman, Kuwait,
Bahrain, Hong Kong, Philippines, Sri Lanka, Bangladesh, Maldives,
Indonesia, Malaysia, USA, Nepal, Bhutan etc. It had also started
expanding its reach in UK, Germany and other European countries
through Sweet export. Our export sales has contributed 2.68% to
the overall revenues.

PHILANTHROPIC ACTIVITIES

The company has actively contributed to philanthropic efforts
benefiting the broader community, with continued focus in the
following areas:

• Promotion of education

• Animal health and social welfare

• Rural Development

DIVIDEND AND RESERVES
Policy on Dividend Distribution

The Company has adopted Dividend Distribution Policy in terms
of the requirements of Regulation 43A of the Listing Regulations
and any amendments thereto for bringing transparency in the
matter of declaration of dividend and for protecting the interest
of investors.

The Company intends to maintain similar or better levels of
dividend payout in future. However, the actual dividend payout in
each year will be based on the profits and investment opportunities
of the Company.

The policy is available on the website of the Company at https://
www.paragmilkfoods.com/policy. php?id=52

Dividend

The Board at its Meeting held on May 2, 2025, recommended a
final dividend of H1 per equity share i.e. 10% of face value of H10
each for the financial year ended March 31, 2025, subject to
approval of the shareholders at the ensuing 33^rd Annual General
Meeting (''AGM’).

If approved, the dividend would result in a cash outflow of H11.94
Crore payable to all Beneficial Owners in respect of shares held
in dematerialized form as per the data as may be made available
by the Depositories as on the Cut-off / Record Date. The total
dividend payout works out to 9.66% of the Company’s standalone
net profit. In view of the amendment in the Income Tax Act, 1961
through the Finance Act, 2020, imposition of Dividend Distribution
Tax (DDT) has been abolished. The dividend, if declared, at the
ensuing AGM will be taxable in the hands of the Members of the
Company and the Company is required to deduct tax at source
(TDS) from dividend paid to the Members at prescribed rates as
per the Income Tax Act, 1961.

The Dividend declared/recommended is in accordance with
the Company’s Dividend Distribution Policy, which has been
disclosed on the Company’s website, www.paragmilkfoods.com,
as required under Regulation 43A of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, as amended.

Unclaimed dividends

Details of outstanding and unclaimed dividends previously
declared and paid by the Company are elaborated in the
Corporate Governance Report, which forms part of the Integrated
Annual Report.

Transfer to Reserve

During FY 2024-25, there was no amount proposed to be
transferred to the Reserves.

SHARE CAPITAL

During FY 2024-25, the Authorised Share Capital of the Company
is H200 Crore divided into 20 Crore Equity Shares of Face Value
of H10 each.

Further, Paid-up Equity Share Capital is H119.38 Crore.

MATERIAL CHANGES AND COMMITMENTS
AFFECTING THE COMPANY

Strong investor confidence was reflected in the recent H161
Crore capital raise (April 2025) via convertible share warrants.
The round included participation from the prominent investors,
Mr. Utpal Sheth and senior company leadership. Funds will be
used to optimize debt, strengthen working capital and support
strategic growth.

Except for the above-mentioned issuance, there have been
no such material changes or commitments that have affected
the financial position of the Company between the close of
FY 2024-25 and the date of signing of this report.

There has been no change in the nature of the business of
your Company.

SUBSIDIARIES, ASSOCIATES AND JOINT
VENTURES

The Company has two Wholly Owned Subsidiaries namely
Bhagyalaxmi Dairy Farms Private Limited and Parag Foods
Middle East FZE as on March 31, 2025. There were no material
changes in the nature of the business of the subsidiaries. During
FY 2024-25, Parag Foods Middle East FZE was incorporated as
wholly owned foreign subsidiary of the Company. The Company
does not have any associate company, nor has it entered into a
joint venture with any other company.

Pursuant to the provisions of Section 129(3) of the Act, a
statement containing salient features of financial statements
of the Company’s Subsidiaries in Form AOC-1, is enclosed as
Annexure I to this report.

Pursuant to Listing Regulations, the Company has formulated
a policy for determining its ''material subsidiaries’ and the same
can be accessed on the Company’s website at https://www.
paragmilkfoods.com/policy.php?id=13.

Performance highlights of the Bhagyalaxmi Dairy Farms
Private Limited for FY 2024-25 is given below:

Sr. No.	Particulars	FY 2024-25	FY 2023-24
1.	Total Revenue	142.10	116.20
2.	Profit before Interest, Tax	(2.24)	4.47
	and Depreciation
3.	Profit after Tax	(4.74)	0.11

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the provisions of Section 129 of the Act and the
Companies (Accounts) Rules, 2014, the Consolidated Financial
Statements of the Company and its subsidiary have been
prepared in the same form and manner as mandated by Schedule
III to the Act and shall be laid before the forthcoming 33^rd AGM of
the Company.

The Audited / Unaudited Financial Results of the Company as
submitted with Stock Exchanges and Financial Statements of
subsidiary are available under the ''Financial Performance’ tab
under Investors section on the website of the Company at www.
paragmilkfoods.com. Further a copy of the Audited Financial
Statements of the subsidiary shall be made available for inspection
at the registered office of the Company during business hours on
any working day upto the date of AGM. According to Section 136 of
the Companies Act, 2013, any shareholder interested in obtaining
a copy of separate Financial Statements of the subsidiary shall
make a specific request in writing to the Company Secretary at
[email protected].

CREDIT RATING

During FY 2024-25, ICRA Limited, on April 8, 2024, reaffirmed
the credit rating previously assigned to the Company on May 8,
2023, as disclosed in the previous annual report of the Company
for FY 2023-24.

In addition to the above credit rating, the Company obtained
a credit rating from India Ratings and Research Pvt. Ltd.
The same can be accessed on the Company’s website at
https://www.paragmilkfoods.com/parag_uploads/images/
pdfs/4hduZP4PdT0XI4O20oIa.pdf.

Subsequent to FY 2024-25, following the issuance of convertible
warrants on preferential basis by the Company, ICRA Limited
issued a revised credit rating report on the debt instruments
of the Company and simultaneously it withdrew the ratings on
Company’s bank facilities at the request of the Company and
based on NOCs received from the lenders and in accordance with
the ICRA’s policy on withdrawal. The same can be accessed on
Company’s website at https://www.paragmilkfoods.com/parag_
uploads/images/pdfs/BfsDgyiNrtdDSadFSRQF.pdf.

BOARD OF DIRECTORS

During the year under review, the composition of the Board
consists of 8 Directors comprising of 4 Independent Directors,
1 Non-Executive Director and 3 Executive Directors, details
thereof are elaborated in the Corporate Governance Report,
which forms part of the Integrated Annual Report.

In terms of the requirement of the Listing Regulations, the Board
has identified core skills, expertise and competencies of the
Directors in the context of the Company’s businesses for effective
functioning. The list of key skills, expertise and core competencies
of the Board are elaborated in the Corporate Governance Report,
which forms part of the Integrated Annual Report.

In the opinion of the Board, all the directors, possess the requisite
qualifications, experience and expertise and hold high standards
of integrity.

Appointment / Re-appointment of Directors:

At the 32^nd AGM held during FY 2024-25, Mr. Nikhil Vora whose
term was liable to retire by rotation, was re-appointed pursuant
to provisions of the Act. Other than this, no appointment / re¬
appointment of Directors were made during FY 2024-25.

In terms of the provisions of the Companies Act, 2013, Ms. Akshali
Shah, Executive Director of the Company, retires by rotation at the
ensuing AGM and being eligible, offers herself for re-appointment.
A resolution seeking the re-appointment of Ms. Shah, forms part
of the Notice convening the ensuing AGM. The profile along with
other details of Ms. Shah is provided in the annexure to the Notice
of the AGM.

Changes in the Board subsequent to financial year
ended March 31, 2025:

Appointments:

The Board at its meeting held on May 2, 2025 had appointed
Ms. Namrata Garud as an Additional Non-Executive Independent
Director with effect from May 2, 2025.

Cessations:

Mr. Narendra Ambwani, Ms. Radhika Dudhat would cease to
be the Independent Directors of the Company with effect from
May 26, 2025 and Mr. Nitin Dhavalikar would cease to be the
Independent Directors of the Company with effect from July 27,
2025 due to completion of their term of appointment of 10 (Ten)
consecutive years.

The Board places on record its sincere appreciation to the
outgoing directors viz. Mr. Narendra Ambwani, Ms. Radhika
Dudhat and Mr. Nitin Dhavalikar for their leadership, guidance and
invaluable contributions made over the years.

Declarations by Independent Directors:

All Independent Directors of the Company have given declarations
that they meet the criteria of independence as laid down under
Section 149(6) of the Act and Regulation 16(1)(b) of the Listing
Regulations. In the opinion of the Board, the Independent Directors
fulfill the conditions of independence specified in Section 149(6)
of the Act and Regulation 16(1)(b) of the Listing Regulations.
The Independent Directors have also confirmed that they have
complied with the Code for Independent Directors prescribed
in Schedule IV to the Act and Company’s Code of Conduct for
Directors and Senior Management Personnel. The Independent
Directors of the Company have confirmed that they have
registered their names in the data bank of Independent Directors
maintained with the Indian Institute of Corporate Affairs in terms
of Section 150 of the Act read with Rule 6 of the Companies
(Appointment and Qualification of Directors) Rules, 2014.

In the opinion of the Board, there has been no change in the
circumstances which may affect their status as Independent
Director of the Company and the Board is satisfied with the
integrity, expertise and experience (including proficiency in terms
of Section 150(1) of the Act and applicable rules thereunder) of all
Independent Directors on the Board.

KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 2(51) and Section 203 of the
Act read with Rules framed thereunder, the followings are the Key
Managerial Personnel of the Company as on March 31, 2025:

1.	Mr. Devendra Shah	- Chairman and Whole time Director
2.	Mr. Pritam Shah	- Managing Director and Interim Chief Financial Officer (CFO)
3.	Ms. Akshali Shah	- Executive Director
4.	Mr. Virendra Varma	- Company Secretary and Compliance Officer

MEETINGS OF THE BOARD OF DIRECTORS AND
ITS COMMITTEES

The Board of the Company met 4 (four) times during FY 2024-25.
The details of composition of the Board and its Committees, their
Meetings held during FY 2024-25 and the attendance of the
Directors / Committee Members at the respective Meetings are
elaborated in the Corporate Governance Report, which forms
part of the Integrated Annual Report.

The Board evaluates the recommendations made by the Audit
Committee and seeks further information as they may require.
During the year under review, the Board accepted all the
recommendations made by the Audit Committee.

Committees of the Board

The Board has the following Committees as on March 31, 2025:

(1) Audit Committee

(2) Nomination and Remuneration Committee (''NRC’)

(3) Stakeholders’ Relationship Committee

(4) Corporate Social Responsibility (''CSR’) Committee

(5) Risk Management Committee (''RMC’)

(6) Finance Committee

(7) Management Committee

The details of the Committees along with their composition,
number of Meetings held and attendance at the Meetings are
elaborated in the Corporate Governance Report, which forms
part of the Integrated Annual Report.

AUDIT COMMITTEE

The details pertaining to the composition of the Audit Committee
are included in the Corporate Governance Report, which forms
part of the Integrated Annual Report.

BOARD EVALUATION

Pursuant to the provisions of the Act and Regulation 17(10) of Listing
Regulations and as prescribed in the stated policy of the Board,
the Board has carried out an annual performance evaluation of

(i) the Directors (Independent and non-Independent);

(ii) Board itself (as a whole); (iii) Committees and (iv) fulfillment of
Independence criteria. The Board performance was evaluated
based on inputs received from the Board Members after
considering criteria such as Board composition and structure,
effectiveness of Board / Committee processes and information
provided to the Board etc. The evaluation process at the
Company is conducted through structured questionnaires which

covers various aspects of the Board’s functioning prepared
after circulating the draft forms, covering various aspects
such as structure of the Board, qualifications, experience and
competency of Directors, diversity in Board, effectiveness of the
Board processes, among others.

The performance of the Executive Chairman was evaluated after
seeking the inputs from all the Directors other than the Chairman
on the basis of the criteria such as Chairman competency,
value addition, leadership qualities, ease of communication,
risk handling and mitigation, stakeholder relationship, personal
attributes etc.

In terms of the requirements of the Act, a separate Meeting of the
Independent Directors was held during the year. The Independent
Directors at their Meeting held on March 18, 2025 reviewed the
performance of the Chairman, Non-Independent Directors of the
Company and overall performance of the Board and Committees
as mandated by Schedule IV of the Act and Listing Regulations.

Following the above evaluation carried out at the Independent
Directors’ meeting, the Board and NRC at its meetings held on May
2, 2025 discussed the performance of the Board, its Committees,
and Individual Directors. Performance evaluation of Independent
Directors was done by the entire Board, excluding the Individual
Director being evaluated.

The Company also acted on feedback received from the
previous year’s evaluation process. For more details on the Board
Evaluation Process, please refer the ''Performance Evaluation’
section in the Corporate Governance Report, which forms part of
the Integrated Annual Report.

Familiarisation Programme for Independent Directors

All Independent Directors are familiarised with the operations
and functioning of the Company at the time of their appointment
and on an ongoing basis. The Company already has an elaborate
familiarization programme in place for effective induction of
Independent Directors. The Board acknowledged this and
reiterated the importance of rigorous execution of the induction
process to ensure a smooth transfer and seamless integration of
the new Board Member.

The Board is regularly briefed on relevant legal and regulatory
matters, emerging geo-political and macro-economic
scenarios, governance developments or changes, best practice
developments and other risk factors, etc.

Pursuant to Regulation 25(7) and 46 of the SEBI Listing
Regulations, the details of the familiarisation programme imparted
to the Directors are elaborated in the Corporate Governance
Report, which forms part of the Integrated Annual Report and are
also available on the Company’s website i.e. www.paragmilkfoods.
com under ''Investors’ tab.

Policy on Appointment and Remuneration of
Directors, Key Managerial Personnel and Senior
Management Personnel

The Board has formulated a Nomination and Remuneration
Policy in terms of the provisions of sub-section (3) of Section 178
of the Act and Regulation 19 of the Listing Regulations dealing

with appointment and remuneration of Directors, Key Managerial
Personnel and Senior Management Personnel.

The policy covers criteria for determining qualifications, positive
attributes, independence and remuneration of its Directors, Key
Managerial Personnel and Senior Management Personnel.

The Nomination and Remuneration Policy is available on the
website of the Company and the web-link of the same is https://
www.paragmilkfoods.com/policy.php?id=38

DIRECTORS’ RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and
compliance systems established and maintained by the
Company, work performed by the Internal, Statutory, Cost and
Secretarial Auditors including the audit of internal financial
controls over financial reporting by the statutory auditors and
the reviews performed by the Management and the relevant
Board Committees including the Audit Committee, the Board is
of the opinion that the Company’s internal financial controls were
adequate and operating effectively during FY 2024-25.

Pursuant to the requirements under Section 134(3)(c) of the Act
with respect to the Directors’ Responsibility Statements, your
Directors make the following statements:

a) that in the preparation of the annual financial statements
for the Financial Year ended March 31, 2025, the applicable
accounting standards have been followed along with proper
explanation relating to material departures, if any;

b) that the Directors have selected such accounting policies
and applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company at
the end of the Financial Year and of the profit and loss of the
Company for the Financial Year ended March 31, 2025;

c) that the Directors have taken proper and sufficient care
for the maintenance of adequate accounting records in
accordance with the provisions of this Act for safeguarding
the assets of the Company and for preventing and detecting
fraud and other irregularities;

d) that the directors have prepared the annual financial
statements for the Financial Year ended March 31, 2025 on a
going concern basis;

e) that proper internal financial controls were in place and that
the financial controls were adequate and were operating
effectively; and

f) that systems to ensure compliance with the provisions of
all applicable laws were in place and were adequate and
operating effectively.

DISCLOSURE REGARDING ISSUE OF EMPLOYEE
STOCK OPTIONS

There has been no change in the Employee Stock Option Scheme
(ESOP scheme) during the current financial year.

Information as required under Regulation 14 read with Part F of
Schedule I of the SEBI (Share Based Employee Benefits and

Sweat Equity) (''SBEB’) Regulations, 2021, has been uploaded
on the Company’s website and can be accessed under ''Annual
Reports’ tab at https://www.paragmilkfoods.com/investors.php.

A certificate received from M/s. N. L. Bhatia and Associates,
Secretarial Auditors of the Company, confirms that the ESOP
Scheme of the Company is in compliance with the SBEB
Regulations and that the Company has complied with the
provisions of the Act.

INTERNAL FINANCIAL CONTROL SYSTEMS AND
THEIR ADEQUACY

The Company’s internal control systems are commensurate
with the nature of its business and the size and complexity of
its operations and such internal financial controls concerning
the Financial Statements are adequate. The Audit Committee
comprises of professionally qualified Directors, who interact
with the statutory auditors, internal auditors and management in
dealing with matters.

Internal Financial Control is an integrated part of the risk
management process which in turn is a part of Corporate
Governance addressing financial reporting risks. The Internal
Financial Controls have been documented and embedded in the
business processes. Your Company’s approach on Corporate
Governance is elaborated in the Corporate Governance Report,
which forms part of the Integrated Annual Report.

The Board reviews the internal processes, systems and the internal
financial controls and accordingly, the Directors’ Responsibility
Statement contains confirmation as regards to adequacy of the
internal financial controls.

Assurances on the effectiveness of Internal Financial Controls
are obtained through management reviews, self-assessment,
continuous monitoring by departmental heads as well as testing
of the internal financial control systems by the internal auditors
during the course of their audits.

The Audit Committee and the Board are of the opinion that the
Company has sound Internal Financial Control and it is operating
effectively and no material weaknesses exist during FY 2024-25.
The details with respect of internal financial control and their
adequacy are elaborated in the Management Discussion and
Analysis, which forms part of the Integrated Annual Report.

RISK MANAGEMENT GOVERNANCE

The Board has an overall responsibility for governance of
Company’s risk management.

The Board approves the Company’s risk policies and oversees
management in the designing, implementation and monitoring of
risk management systems. It also has the authority to approve any
deviation in risk management policies or any breach of risk limits.

The Risk Management Committee constituted by the Board
assists the Board in monitoring and reviewing the risk management
for business operations, implementation of the risk management
framework of the Company and such other functions as Board
may deem fit.

The Risk Management Framework covers all the Key Categories
for Risk Classification i.e. Strategic and Reputational Risks,
Financial and Fraud Risks, Governance and Compliance Risks,
Extended Enterprise Risks, Cyber Risk and Information Security
and Operational Risks, etc.

During the year under review, Deloitte, the Internal Auditors
of the Company, addressed the top key risks relevant to the
Company and has also supported in the implementation of its
Risk Management Policy of the Company. The risk identified are
being systematically addressed through mitigating actions on an
ongoing basis.

The detailed terms of reference and the composition of RMC are
set out in the Corporate Governance Report, which forms part of
the Annual Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company promotes ethical behaviour in all its business
activities and is in line with the best governance practices. The
Company has a Whistle Blower Policy and has established
the necessary vigil mechanism for employees, Directors and
stakeholders in confirmation with the provisions of Section 177(9)
of the Act and Regulation 22 of SEBI Listing Regulations, to report
concerns about unethical behaviour.

The Company did not receive any complaints from the employees
regarding violation of Code of Conduct or other matters during the
year under review.

The functioning process of this mechanism has been more
elaborately mentioned in the Corporate Governance Report
forming a part of the Integrated Annual Report. The Whistle
Blower Policy can be accessed on the Company’s website at
https://www.paragmilkfoods.com/policy.php?id=42

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility
Committee and details of the composition are given separately
in the Corporate Governance Report, which forms part of
the Integrated Annual Report. The Company has undertaken
the CSR activities in accordance with the CSR Policy of the
Company adopted in accordance with Schedule VII of the Act.
The Company’s CSR Policy can be accessed on the Company’s
website at https://www.paragmilkfoods.com/policy.php?id=53.

The brief outline of the CSR Philosophy, CSR policy, salient
features of and the initiatives undertaken by the Company on CSR
activities during the year under review are set out in this report
in the format prescribed under Rule 9 of Companies (Corporate
Social Responsibility Policy) Rules, 2014 under Annexure II to
this Report.

RELATED PARTY TRANSACTIONS

During the year under review, all transactions that were entered
into with the related parties were in ordinary course of business
and at arms’ length basis with prior Audit Committee approval.
Therefore, the disclosure of Related Party Transactions as
required under Section 134(3)(h) of the Companies Act w.r.t.
contracts or arrangements with related parties under Section

188(1) in Form AOC-2 is not applicable to the Company for
FY 2024- 25 and hence, the same is not provided. The details
of the transactions with related parties during FY 2024-25 are
provided in the accompanying financial statements. There were
no materially significant related party transactions entered into by
the Company with the promoters, key management personnel or
other designated persons that may have potential conflict with the
interests of the Company at large.

The Audit Committee grants omnibus approval for the
transactions that are in the ordinary course of business and
repetitive in nature. For other transactions, the Company obtains
specific approval of the Audit Committee before entering into any
such transactions. All related party transactions are placed before
the Audit Committee on a quarterly basis. The same are also
placed before the Board for seeking their approval.

In line with the requirements of the Act and the Listing Regulations,
the Company has formulated a Policy on Related Party
Transactions and the same can be accessed on the Company’s
website at https://www.paragmilkfoods.com/policy.php?id=40.

PARTICULARS OF LOANS, GUARANTEE AND
INVESTMENTS BY THE COMPANY

The loans given, investments made, guarantees given and
securities provided during the year under review are in compliance
with the provisions of Section 186 of the Act and the Rules
thereunder and the details are provided in the Note No 6 and 7
to the Standalone Financial Statements, which forms part of the
Integrated Annual Report.

BUY BACK

The Company has not bought back any of its securities during the
Financial Year ended March 31, 2025.

DEPOSITS FROM PUBLIC

The Company has not accepted any deposits from the public
within the meaning of Sections 73 and 74 of the Act read with the
Companies (Acceptance of Deposits) Rules, 2014, as amended,
during the year under review.

No amount on account of principal or interest on deposits from the
public was outstanding as on March 31, 2025.

PREVENTION OF SEXUAL HARASSMENT OF
WOMEN AT WORKPLACE

In accordance with the provisions of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013 (''POSH Act’) and the rules made thereunder, the Company
has adopted a Policy (Prevention of Sexual Harassment Policy
a.k.a POSH Policy).

To build awareness on the subject, the Company has been
carrying out online Induction/ refresher programmes on a
periodical basis. All employees (permanent, contractual,
temporary, trainees) are covered under this Policy. As per the
requirement of the POSH Act and Rules made thereunder, the
Company has constituted Internal Complaint Committee(s) to
redress complaints received regarding sexual harassment. All
employees are covered under this Policy. Following is a summary

of sexual harassment complaints received and disposed off
during the year under review:

• No. of complaints received : NIL

• No. of complaints disposed off : NIL

• No. of complaints pending : NIL

MANAGEMENT DISCUSSION AND ANALYSIS,
CORPORATE GOVERNANCE REPORT
AND BUSINESS RESPONSIBILITY AND
SUSTAINABILITY REPORT

In terms of Regulation 34 of SEBI Listing Regulations, a separate
section on Management Discussion and Analysis, Business
Responsibility and Sustainability Report and Corporate
Governance Report together with a certificate from a Practicing
Company Secretary confirming compliance with the Regulations
relating to Corporate Governance of Listing Regulations are set
out and forms part of the Integrated Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTFLOW

The Company is continuously making efforts to reduce and
optimize the energy consumption at its manufacturing facilities/
offices all over India. Particulars relating to conservation of energy,
technology absorption, foreign exchange earnings and outgo
as required to be disclosed under Section 134(3)(m) of the Act
read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are
provided in the prescribed format and are annexed as Annexure III
and forms an integral part of this Report.

ANNUAL RETURN

Pursuant to Section 134(3)(a) of the Act, the Annual Return of the
Company prepared as per Section 92(3) of the Act for the financial
year ended March 31,2025, is available on the Company’s website
and can be accessed under ''Annual Reports’ tab at https://www.
paragmilkfoods.com/investors.php.

In terms of Rules 11 and 12 of the Companies (Management and
Administration) Rules, 2014, the Annual Return shall be filed with
the Registrar of Companies, within prescribed timelines.

PARTICULARS OF EMPLOYEES AND RELATED
DISCLOSURES

The ratio of remuneration of each Director to the median
employees’ remuneration as per Section 197(12) of the Act read
with Rule 5(1) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, are annexed as Annexure
IV and forms an integral part of this Report.

In terms of the provisions of Section 197(12) of the Act, read
with Rule 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, a statement
showing the names and other particulars of employees drawing
remuneration in excess of the limits set out in the said rules are
provided in this Integrated Annual Report. In terms of Section 136
of the Act, this report is being sent to the Members and others
entitled thereto, excluding the aforesaid annexure. Any Member

desirous of obtaining a copy of the said annexure may write to the
Company Secretary at [email protected].

Details of top ten employees in terms of the remuneration and
employees in receipt of remuneration as prescribed under rule
5(2) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, as amended, containing
details prescribed under rule 5(3) of the said rules, which form part
of the Directors’ Report, will be made available to any member on
request, as per provisions of section 136(1) of the Act.

SIGNIFICANT AND MATERIAL ORDERS PASSED
BY THE REGULATORS OR COURTS

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

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review and in terms of Section 118(10) of
the Act, the Company has complied with Secretarial Standards
on Meetings of the Board of Directors (SS-1) and on General
Meetings (SS-2) as amended and issued from time to time by the
Institute of Company Secretaries of India.

AUDITORS

Statutory Auditors

At the 28^th AGM held on September 29, 2020, the Members
approved appointment of M/s. Sharp and Tannan, Chartered
Accountants, Mumbai (Firm Registration No.109982W), as
Statutory Auditors of the Company to hold office for a period of
five years from the conclusion of the 28^th AGM till the conclusion
of the ensuing 33^rd AGM.

The Board, based on the recommendation of Audit Committee,
has proposed re-appointment of M/s. Sharp and Tannan,
Statutory Auditor for another period of 5 years as their current
tenure is valid upto the ensuing AGM. Accordingly, a resolution
seeking members’ approval for the re-appointment of M/s. Sharp
and Tannan as the Statutory Auditor of the Company forms part of
the Notice of the ensuing AGM.

As required under Regulation 33(1)(d) of Listing Regulations,
M/s. Sharp and Tannan, have confirmed that they hold a valid
certificate issued by the Peer Review Board of the Institute of
Chartered Accountants of India. The Statutory Auditors have
further confirmed that they are not disqualified from continuing as
auditors of the Company.

The Auditor’s Report for the financial year ended March 31, 2025
on the financial statements of the Company forms part of the
Integrated Annual Report. The said report was issued by the
Statutory Auditor with an unmodified opinion and does not contain
any qualification, reservation, adverse remark or disclaimer.
During the year under review, the Auditors have not reported any
fraud under Section 143(12) of the Act and therefore no details are
required to be disclosed under Section 134(3)(ca) of the Act.

Internal Auditors

Pursuant to provisions of Section 138 of the Companies Act, 2013
and the rules made thereunder, on the recommendation of the
Audit Committee, the Board at its Meeting held on August 5, 2023
appointed M/s. Deloitte Touche Tohmatsu India LLP, as Internal
Auditors of the Company for FY 2023-24 and FY 2024-25.

At the beginning of each Financial Year, an audit plan is rolled out
after approval of the Audit Committee. The audit plan is aimed
at evaluation of the efficacy and adequacy of internal control
systems in the Company and compliance thereof with the same as
well as robustness of internal processes, policies and accounting
procedures and compliance with laws and regulations. Based
on the reports of internal auditor, the functional heads undertake
corrective action in their respective areas.

Cost Auditors

In accordance with Section 148 of the Act, the Company is required
to maintain the accounts and cost records. It is hereby confirmed
that the Company has maintained the cost records pursuant to
provisions of the said section and accordingly such accounts and
records are prepared and maintained by the Company.

Further, as per the requirements of Section 148 of the Act read
with Rule 14 of the Companies (Cost Records and Audit) Rules,
2014, the cost records are required to be audited by a qualified
Cost Accountant. During FY 2024-25, the Company filed the Cost
Audit Report for FY 2023-24 issued by M/s. Harshad Deshpande
and Associates, Cost Accountants, Pune (Firm Registration
Number: 00378) with the Ministry of Corporate Affairs on August
21, 2024 which did not contain any qualification, reservation,
adverse remark or disclaimer. No frauds were reported by the Cost
Auditors to the Company in the said Report under sub-section
(12) of Section 143 of the Act. Therefore, no detail is required to be
disclosed under Section 134(3)(ca) of the Act.

The Board, upon the recommendation of the Audit Committee,
has re-appointed M/s. Harshad Deshpande and Associates,
Cost Accountants, Pune (Firm Registration Number: 00378) to
conduct audit of the cost records of the Company for FY 2025-26.
Accordingly, the Board of Directors recommends to the Members
the resolution seeking their approval for ratifying the remuneration
payable to the Cost Auditors for FY 2025-26, is provided in the
Notice of the ensuing AGM.

Secretarial Auditor

The Secretarial Audit Report for FY 2024-25 in Form MR-3
is annexed as Annexure V and forms an integral part of this
Report. The said Secretarial Audit Report does not contain any
qualifications, reservations or adverse remarks and no frauds
were reported by the Secretarial Auditors to the Company under
sub-section (12) of Section 143 of the Act therefore no detail is
required to be disclosed under Section 134 (3)(ca) of the Act.

In compliance with Regulation 24A of the SEBI Listing
Regulations and Section 204 of the Act, the Board at its meeting
held on May 2, 2025, has approved the appointment of M/s. N.
L. Bhatia and Associates, Practicing Company Secretaries (UIN:

P1996MH055800) as Secretarial Auditors of the Company for a
term of five consecutive years commencing from FY 2025-26 till
FY 2029-30, subject to approval of the Members’ at the ensuing
AGM. Accordingly a resolution seeking Members’ approval for
the re-appointment of M/s. N. L. Bhatia and Associates as the
Secretarial Auditor of the Company forms part of the Notice of the
ensuing AGM.

OTHER DISCLOSURES

• No application has been made under the Insolvency and
Bankruptcy Code, 2016. Hence, the requirement to disclose

the details of the application made or any proceeding pending
under the said Code during the year along with their status as
at the end of the financial year is not applicable.

• The requirement to disclose the details of the difference
between the amount of the valuation done at the time of
one-time settlement and the valuation done while taking a
loan from the Banks or Financial Institutions along with the
reasons thereof, is not applicable.

• No shares with differential voting rights and sweat equity
shares have been issued during the year under review.

COMPARISON OF SHAREHOLDING DATA AS AT THE END OF FY 2024-25 AND PREVIOUS FY 2023-24

Sr.	Category	As on March 31, 2025		As on March 31, 2024		Change
No.		No. of shares held	% of share holding	No. of shares held	% of share holding	%
A	Promoters and Promoter Group Holding:
1	Indian
	Individual	5,08,61,435	42.61%	5,08,61,435	42.61%	-
	Bodies corporate	-	-	-	-
	Sub-total	5,08,61,435	42.61%	5,08,61,435	42.61%	-
2	Foreign	-	-	-	-
	Sub-total (A)	5,08,61,435	42.61%	5,08,61,435	42.61%	-
B	Non-Promoters Holding
1	Institutional investors
	Alternate Investment Funds / Mutual Funds	81,67,245	6.84%	1,00,48,760	8.42%	(1.58)%
	NBFCs registered with RBI	89,282	0.07%	2,62,782	0.22%	(0.14)%
	Foreign Portfolio Investors Category I	88,99,715	7.46%	85,73,090	7.18%	0.28%
	Foreign Portfolio Investors Category II	11,96,723	1.00%	21,09,021	1.77%	(0.77)%
	Sub-Total (B)(1)	1,83,52,965	15.37%	2,09,93,653	17.59%	(2.21)%
2	Non-institution
	Directors and their relatives (excluding independent directors and nominee directors)	3,10,700	0.26%	3,10,700	0.26%	-
	Key Managerial Personnel	10	-	10	-	-
	Investor Education and Protection Fund (IEPF)	1,944	-	-	-	-
	Resident Individuals holding nominal share capital up to H2 Lakh	2,53,78,916	21.26%	2,25,34,392	18.88%	2.38%

Sr.	Category	As on March 31, 2025		As on March 31, 2024		Change
No.		No. of	% of share	No. of	% of share	%
		shares held	holding	shares held	holding
	Resident Individuals holding nominal share capital in excess of H2 Lakh	99,15,413	8.31%	70,32,766	5.89%	2.41%
	Non Resident Indians (NRIs)	16,73,929	1.40%	14,17721	1.19%	0.21%
	Body Corporates	1,12,63,442	9.44%	1,05,20,533	8.81%	0.62%
	Foreign Companies	-	-	41,99,018	3.52%	(3.52)%
	Clearing Members	846	-	1,129	-	-
	Trusts	-	-	1,000	-	-
	HUF	14,45,226	1.21%	13,27,469	1.11%	0.10%
	Sub-total (B2)	4,99,90,426	41.88%	4,73,44,738	39.66%	2.22%
	Total B (B1 B2)	6,83,43,391	57.25%	6,83,38,391	57.25%	-
C	Non Promoter, Non Public Shareholding	1,71,015	0.14%	1,76,015	0.15%	(0.01)%
	GRAND TOTAL (A B C)	11,93,75,841	100%	11,93,75,841	100%	-

CHANGE IN THE SHAREHOLDING OF TOP TEN EQUITY SHAREHOLDERS OF THE COMPANY AS ON
MARCH 31, 2025:

	Shareholders	As on March 31, 2025 Total Shares % of Holding		As on March 31, 2024 % Total Shares % of Holding Change
1	Mr. Devendra Prakash Shah	2,02,06,400	16.93%	2,02,06,400	16.93%	-
2	Ms. Netra Pritam Shah	1,38,67,027	11.62%	1,38,67,027	11.62%	-
3	Mr. Pritam Prakash Shah	91,59,888	7.67%	91,59,888	7.67%	-
4	Sixth Sense India Opportunities III	81,67,245	6.84%	81,67,245	6.84%	-
5	Peanence Commercial Pvt Limited	58,60,780	4.91%	34,60,981	2.90%	2.01%
6	Multitude Growth Funds Limited (Formerly known as AG Dynamic Funds)	54,33,150	4.55%	54,33,150	4.55%	-
7	Mr. Poojan Devendra Shah	32,95,000	2.76%	32,95,000	2.76%	-
8	Ms. Priti Devendra Shah	22,22,820	1.86%	22,22,820	1.86%	-
9	India Insight Value Fund	21,00,000	1.76%	20,70,000	1.73%	0.03%
10	Ms. Akshali Devendra Shah	20,00,000	1.68%	20,00,000	1.68%	-

ACKNOWLEDGEMENTS

The Directors wish to place on record their deep sense of
appreciation for the committed services by the Company’s
employees. The Directors acknowledge with gratitude, the
encouragement and support extended by its valued shareholders.
The Directors also place on record their appreciation for the
support and co-operation which the Company has been receiving

from its suppliers, distributors, retailers, business partners and
others associated as its trading partners.

The Directors also take this opportunity to thank all the Farmers,
Consumers, Employees, Shareholders, Clients, Vendors, Banks,
Government and Regulatory Authorities and Stock Exchanges,
for their continued support.

For and on behalf of the Board of
Parag Milk Foods Limited

Devendra Shah

Mumbai Chairman

May 2, 2025 (DIN: 01127319)

---

Mar 31, 2024

The Board of Directors (Board) is pleased to present the 32^nd Annual Report along with the summary of Audited Standalone and Consolidated Financial Statements of Parag Milk Foods Limited (Parag or Company or your Company) for the financial year (FY) ended March 31, 2024. The consolidated performance of the Company and its subsidiary has been referred to wherever required.

In Compliance with the applicable provision of the Companies Act, 2013 (the Act) and the Securities and Exchange Board of India (SEBI) (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations), this Board''s Report is prepared based on the Financial Statements of the Company for the year under review, with respect to the Company and its Subsidiary Company. The consolidated entity has been referred to as "Parag Group" or "Group" in this report.

OVERVIEW OF FINANCIAL PERFORMANCE

The key highlights of Standalone and Consolidated Financial Results of the Company for the financial year ended March 31, 2024, are summarized as under:

(f in Million)

Particulars	Standalone		Consolidated
	FY 2023-24	FY 2022-23	FY 2023-24	FY 2022-23
Revenue from Operations	30,898.26	28,532.00	31,387.00	28,926.20
Other Income	87.55	351.62	252.09	451.57
Total Income	30,985.81	28,883.62	31,639.09	29,377.77
Earnings before Interest, Depreciation and Tax	2,073.71	1,741.17	2,223.47	1,634.93
Less :- Depreciation	557.05	540.73	602.53	572.75
Less:- Interest	688.19	528.57	762.38	551.56
Profit before Tax and Exceptional Items	828.47	671.87	858.56	510.62
Exceptional Items	-	-	-	-
Profit / (Loss) before tax	828.47	671.87	858.56	510.62
Less:- Tax expense
(1) Current Tax:	-	-	8.23	-
(2) MAT (Credit) / Reversal	-	-	-	-
(3) Deferred tax:	(90.88)	(13.04)	(55.50)	(21.92)
(4) Tax adjustment in respect of earlier years	-	-	-	-
Profit for the Period / Year After Tax (PAT)	919.35	684.91	905.83	532.54
Earnings per Share
Basic	7.83	6.52	7.71	5.07
Diluted	7.58	6.34	7.47	4.96

Note: Due to rounding off, numbers presented in the above table may not add up precisely to the totals provided in Financial Statements.

FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS

Standalone

At Standalone level, the total Revenue from operations for FY 2023-24 increased by 8.29% to f30,898.26 Million against f28,532 Million in the Previous Year 2022-23. The Standalone Profit Before Tax for FY 2023-24 increased to f828.47 Million against f671.87 Million in the Previous Year 2022-23. The Standalone Profit after Tax for FY 202324 increased to f919.35 Million against f684.91 Million reported in the Previous Year 2022-23. The Operations and Financial Results of the Company are elaborated in the Management Discussion and Analysis Report, which forms part of the Annual Report.

Consolidated

Consolidated Revenue from Operations for FY 2023-24 stood at f31,387.00 Million reporting a growth of 8.51% as compared to f28,926.20 Million in FY 2022-23, driven by improvement in core categories of Ghee and Cheese which reported 3.5% growth. The Consolidated Profit Before Tax for FY 2023-24 increased to f858.56 Million from f510.62 Million in the Previous Year 2022-23. The Consolidated Profit After Tax for FY 2023-24 stood at f905.83 Million as compared to f532.54 Million in the Previous Year 2022-23.

PERFORMANCE ANALYSIS, OUTLOOK & BUSINESS HIGHLIGHTS

The Company started FY 2023-24 on a positive note with Consolidated income from operations stood at ^7,495.86 Million as compared to ^6,909.34 Million in Q1 FY 202223 growing by 8.5% YOY driven by strategic investment in marketing and brand building. Gross Profit, EBIDTA and Profit After Tax were higher compared on a quarter on quarter basis. The share of value-added Products for Q1 FY 2023-24 was 68.3% of total revenue, while that of liquid milk was 9.2%, for Skimmed Milk Powder was 18.8% and for New Age Business was 3.7% respectively. For Q2 FY 202324; the festive momentum started strong with healthy demand across the segments. Despite the high festive base of the last year, the core categories continued to post healthy volume and value growth driven by innovative branding and expanded distribution base. Consolidated Revenue from Operations for Q2 FY 2023-24 stood at ^7,981.58 Million as compared to ^6,648.40 Million in Q2 FY 2022-23 growing by 20.1% YOY. The share of value-added Products for Q2 FY 2023-24 was 66.6% of total revenue, while that of liquid milk was 9.4%, for Skimmed Milk Powder was 19.9% and for New Age Business was 4.1% respectively. The innovative brand integration with Kaun Banega Crorepati (KBC) had enabled PMFL to gain strong consumer connect and expand distribution reach.

For Q3 FY 2023-24; the consolidated revenue from operations grew by 8.8% on a YOY basis, at f8,008.4 Million. The growth came on the back of healthy growth in the ghee and the protein category. The softness in the milk prices coupled with improving product mix resulted in sharp expansion in the gross profit margin for the Company. The Gross profit for Q3 FY 2023-24 stood at f2,107.5 Million as against ^1,556.10 Million in Q3 FY 2022-23. The share of new age business was 8%, while for liquid milk being 9.1% and value-added products at 64% of total revenue, while that for Skimmed Milk Powder was 18.9% respectively. The core categories of Ghee and Cheese have seen continuous traction throughout the period and have posted a growth of 11.1% Y-o-Y.

Overall, the year posted a very strong momentum on demand across business verticals and FY 2023-24 posted consolidated revenue of ^31,387.00 Million. The outstanding performance was driven by widespread distribution reach, coupled with Brand building initiatives, premium pricing in flagship products and significant growth of new age business i.e. Brand Avvatar.

During the year under review, core categories of Ghee and Cheese have seen continuous traction throughout the year and have posted a growth of 3.5% Y-o-Y.

The protein portfolio consisting of the Premium Brand Avvatar, has been consistently growing at 100% CAGR for two years in a row. The overall protein portfolio has continued to record market share gains.

For FY 2023-24, the General Trade, Modern trade & E-commerce posted a growth of 3% Y-o-Y, 6% Y-o-Y, respectively.

The Company has bolstered its abilities in the rapidly growing new-age channels like Modern Trade and E-commerce, both of which have contributed to the overall growth of the Business of the Company. The Company has capitalized on the benign milk prices and expanded its gross margin profile along with premiumization and improvement in the value-added product portfolio. The Company continues to invest in brand building with the overall advertising & promotion spends at 4.2% for FY 2023-24 vs 2.5% in FY 2022-23.

BRAND BUILDING INITIATIVES & MARKETING HIGHLIGHTS

GOWARDHAN: The Company has strengthened its brand equity reach by adopting unique content-led impact marketing and branding campaigns. Continuing the momentum on the marketing innovation; the Company continued its effective collaboration with Kaun Banega Crorepati (KBC) for the second time. The association has enabled the Company to increase its consumer connect and strengthened the brand equity.

Further, the Company has forward integrated into traditional sweet segment under the brand ''Gowardhan''. Currently it has seven delectable sweets range namely Kaju Katli, Malai Pedha, Kesar Pedha, Kaju Pista Roll, Mawa Gujiya, Mysore Pak, and Malai Modak. With an estimated branded market size of ^7000-8000 crore, the Indian sweets market presents vast opportunities for growth and innovation.

GO CHEESE: The Company has strengthened its brand equity reach by adopting unique content-led impact marketing and branding campaigns. Continuing the momentum of marketing innovation; the Company collaborated with StarPlus on IPL to enhance visibility and awareness for Go Cheese. Here the brand was displayed every time the batsman played a four and the band displayed "Har Four mein Go Cheese."

AVVATAR: The Company expanded the Avvatar portfolio with an addition of Mango Flavour - Avvatar Mango Rush.

OTHER INITIATIVES: The Company had also introduced various new products- Masala tadka chass, plain and mango lassi in pouches under fresh categories at pocket-friendly price points of f10-15 only.

EXPANSION OF SUBSIDIARY

The Company is expanding its Wholly Owned Subsidiary (WOS), Bhagyalakshmi Dairy Farms Private Limited (Wholly Owned Subsidiary / Bhagyalaxmi), which supplies exclusively to our brand "Pride of Cows" and is expected to reach over 15,000 Cows by FY 2026-27.

The Company also plans to incorporate a Foreign Wholly Owned Subsidiary (WOS) in Dubai, UAE. This will help the company to expand its reach and build seamless supply chain operations worldwide to cater the International Market.

REVIEW OF OPERATIONS

Strong network and steady relationship with 5 lakh farmers and more than 300 Bulk Milk Coolers (BMC) across India has helped our Company to stand strong during year under review. During the year, our Plant procurement purchase increased by 20% from 1.4 Million liters a day to 1.8 Million liters a day. The Company is built on the backbone of a robust network comprising of 29 strategically located Depots, 500 Super Stockists, 4500 Distributors. 4.6 lakh pan-India retail touch points which are expected to reach 13-15 lakh touch points by 2026-27.

The Company is optimizing its productivity to drive growth whereby:

• More than 70% of GT Business has been covered in sales force automation

• Leveraging vendors, re-negotiations, reverse auctions, office consolidation

• Depot & Cold Storage restructuring

• Beat planning in opportunity markets

The expansion would be driven by:

• Increasing distribution dominance in < 1 lakh towns

• Building Depots and infrastructure across India

• Aggressive outlet expansion

There was no change in the nature of business of the Company during the year under review.

BRAND BUILDING: STRATEGY

The Company''s foremost strategic priority is to be one of the best performing, most trusted and respected dairy FMCG Companies across stakeholders.

EXPORT MARKET

Parag Milk Foods Limited continues to enjoy its presence and brand recall of Go and Gowardhan brands across several geographies through its exports to UAE, Singapore, Mauritius, Oman, Kuwait, Bahrain, Congo, Hong Kong, Philippines, Sri Lanka, Bangladesh, Maldives, Indonesia, USA, Nepal, Bhutan etc. It had also started expanding its reach in Qatar, Saudi Arabia, Malaysia. Our export sales has contributed 1.21% to the overall revenues.

PHILANTHROPIC ACTIVITIES

The Company has been efficacious in philanthropic activities for the Community as a whole and has continued to work in the following areas viz:

• Promoting Education i.e. Apprenticeship initiative through TeamLease Foundation

• Animal health and welfare

In addition to the above-mentioned areas, the Company has also undertaken certain impromptu efforts in the following areas during the year under review:

• Festival Feast Distribution & National Day Feeding Program;

• Hospital Food Relief Program;

• Essential Supplies Relief Initiative;

• Educational Plant Tour for Students; and

• Youth-focused IT courses.

DIVIDEND & RESERVES Dividend Distribution Policy

The Company has formulated Dividend Distribution Policy in accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and any amendments thereto for bringing transparency in the matter of declaration of dividend and for protecting the interest of investors.

The Company intends to maintain similar or better levels of dividend payout in future. However, the actual dividend payout in each year will be based on the profits and investment opportunities of the Company.

The policy is available on the website of the Company at https://www.paragmilkfoods.com/policy.php?id = 52

Dividend

The Board of Directors at its Meeting held on May 18, 2024, recommended a final dividend of f0.50/- per equity share i.e. 5% of face value of f10/- each for the financial year ended March 31, 2024, subject to approval of the shareholders at the ensuing 32^nd Annual General Meeting (AGM).

If approved, the dividend would result in a cash outflow of f59.69/- Million payable to those Shareholders whose names appear in the Register of Members as on the Book Closure / Record Date. The total dividend payout works out to 6.49% of the Company''s standalone net profit. In view of the amendment in the Income Tax Act, 1961 through the Finance Act, 2020, imposition of Dividend Distribution Tax (DDT) has been abolished. The dividend, if declared, at the ensuing AGM will be taxable in the hands of the Members of the Company and the Company is required to deduct tax at source (TDS) from dividend paid to the Members at prescribed rates as per the Income Tax Act, 1961.

The Dividend declared/recommended is in accordance with the Company''s Dividend Distribution Policy, which has been disclosed on the Company''s website, www. paragmilkfoods.com, as required under Regulation 43-A of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, as amended.

Unclaimed dividends

Details of outstanding and unclaimed dividends previously declared and paid by the Company are elaborated in the Corporate Governance Report, which forms part of the Annual Report.

Transfer to Reserves

During FY 2023-24, there was no amount proposed to be transferred to the Reserves.

SHARE CAPITAL

During FY 2023-24, the Authorised Share Capital of the Company was increased from f1,200 Million divided into 120 Million Equity Shares of Face Value of f10/- each to f2,000 Million divided into 200 Million Equity Shares of Face Value of f10/- each for the purpose of accommodating future issuance of securities by the Company.

Further, Paid-up Equity Share Capital increased from ^1,173.76 Million to ^1,193.76 Million consequent to allotment of 2 Million Equity Shares on February 14, 2024, to Ms. Akshali Shah, Member of Promoter Group pursuant to conversion of equal number of share warrants at a price of f93.75/- for each share warrant aggregating to f187.50 Million out of which f140.62 Million representing 75% had been received on exercise of option to convert these share warrants into Equity Shares.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE COMPANY

There have been no material changes or commitments that have affected the financial position of the Company between the close of FY 2023-24 and the date of signing of this report.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company has one Wholly Owned Subsidiary i.e. Bhagyalaxmi Dairy Farms Private Limited as on March 31, 2024. There were no material changes in the nature of the business of the subsidiary. During FY 2023-24, no new subsidiary was incorporated / acquired. The Company does not have any associate company, nor has it entered into a joint venture with any other company.

The Board of Directors at its Meeting held on May 18, 2024 approved the incorporation of a wholly owned subsidiary in Dubai, United Arab Emirates with a goal to increase Company''s product distribution to new markets, diversify the customer base and to ensure seamless supply chain operations worldwide.

Bhagyalaxmi Dairy Farms Private Limited

Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of Financial Statements of the Company''s Subsidiary in Form AOC-1, is enclosed as ''Annexure I'' to this report.

Pursuant to Listing Regulations, the Company has formulated a policy for determining its ''material subsidiaries'' and the same can be accessed on the Company''s website at https://www.paragmilkfoods. com/policy.php?id=13.

Performance highlights of the Subsidiary for FY 2023-24 is given below:

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the provisions of Section 129 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, the Consolidated Financial Statements of the Company and its Subsidiary has been prepared in the same form and manner as mandated by Schedule III to the Companies Act, 2013 and shall be laid before the forthcoming 32^nd Annual General Meeting (AGM) of the Company.

The Audited / Unaudited Financial Results of the Company as submitted with Stock Exchanges and Financial Statements of Subsidiary are available under the ''Financial Performance'' tab under Investors section on the website of the Company at www.paragmilkfoods. com. Further a copy of the Audited Financial Statements of the Subsidiary shall be made available for inspection at the registered office of the Company during business hours on any working day upto the date of Annual General Meeting. According to Section 136 of the Companies Act, 2013, any shareholder interested in obtaining a copy of separate Financial Statements of the Subsidiary shall make a specific request in writing to the Company Secretary at [email protected].

CREDIT RATING

The Company was given revised rating once during FY 2023-24 by the Credit Rating Agency, ICRA Limited (ICRA) in the month of May, 2023. ICRA Limited downgraded the credit rating for the credit facilities availed by the Company, for the Long-term Rating to [ICRA] BBB-(Negative) from [ICRA] BBB (Negative) and for Shortterm Rating to [ICRA]A3 from [ICRA]A3 and in case of Non-Convertible Debentures, the rating stood at Longterm Rating of [ICRA]BBB-(Negative) from [ICRA] BBB (Negative), on announcement of Financial Results for quarter and financial year ended March 31, 2023.

Sr. No.	Particulars	FY 2023-24	FY 2022-23
1.	Total Revenue	1,161.94	902.83
2.	Profit before Interest, Tax and Depreciation	164.40	(106.17)
3.	Profit after Tax	1.12	(167.03)

The Board of the Company is comprised of eminent persons with proven competence and integrity. Besides the experience and their leadership qualities, they have a significant degree of commitment towards the Company and they devote adequate time to the Meetings and its preparation.

During the year under review and as on the date of the report, the composition of the Board consists of 8 Directors comprising of 4 Independent Directors, 1 NonExecutive Directors and 3 Executive Directors, details thereof are elaborated in the Corporate Governance Report, which forms part of the Annual Report.

In terms of the requirement of the Listing Regulations, the Board has identified core skills, expertise and competencies of the Directors in the context of the Company''s businesses for effective functioning. The list of key skills, expertise and core competencies of the Board of Directors are elaborated in the Corporate Governance Report, which forms part of the Annual Report.

In the opinion of the Board, all the directors, possess the requisite qualifications, experience and expertise and hold high standards of integrity.

Appointment / Re-appointment of Directors:

At the 31^st AGM held during FY 2023-24, Mr. Devendra Shah (DIN: 01127319) whose term is liable to retire by rotation, was re-appointed pursuant to provisions of the Companies Act, 2013. Other than this, no appointment / re-appointment of Directors was made during the FY2023-24.

In terms of the provisions of the Companies Act, 2013, Mr. Nikhil Vora (DIN: 05014606), Non-Executive (NonIndependent) Director of the Company, retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. A resolution seeking the re-appointment of Mr. Vora, forms part of the Notice convening the ensuing Annual General Meeting. The profile along with other details of Mr. Vora is provided in the annexure to the Notice of the Annual General Meeting.

Declarations by Independent Directors:

All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. In the opinion of the Board, the Independent Directors fulfill the conditions of independence specified in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with the Code for Independent Directors prescribed in Schedule IV to the Act and Company''s Code of Conduct for Directors and Senior Management Personnel. The Independent Directors of the Company have confirmed that they have registered their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of

Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014.

In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Director of the Company and the Board is satisfied with the integrity, expertise and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board.

KEY MANAGERIAL PERSONNEL (KMP)

Pursuant to the provisions of Section 2(51) and Section 203 of the Act read with Rules framed thereunder, the following are the Key Managerial Personnel of the Company as on March 31, 2024:

1.	Mr. Devendra Shah	- Chairman & Whole Time Director
2.	Mr. Pritam Shah	- Managing Director & Interim Chief Financial Officer (CFO)
3.	Ms. Akshali Shah	- Executive Director
4.	Mr. Virendra Varma	- Company Secretary (CS) & Compliance Officer

Mr. Pritam Shah was provided with added responsibility of the office of Interim Chief Financial Officer and consequently his designation changed to Managing Director & Interim Chief Financial Officer w.e.f. April 29, 2023. In view of change in designation of Mr. Pritam Shah as Managing Director (MD) & Interim CFO, Mr. Surendra Malaviya was released from the office of Interim Chief Financial Officer w.e.f. April 28, 2023.

MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES

The Board of Directors of the Company met four (4) times during the FY 2023-24. The details of composition of the Board and its Committees, their Meetings held during the FY 2023-24 and the attendance of the Directors / Committee Members at the respective Meetings are elaborated in the Corporate Governance Report, which forms part of the Annual Report.

During the financial year under review, the Board accepted all the recommendations made by the Audit Committee. The Board evaluates the recommendations made by the Audit Committee and seeks further information as they may require. There were no instances where the Board has not accepted any recommendation from the Audit Committee.

Committees of the Board

The Board of Directors has the following Committees as on March 31, 2024:

(1) Audit Committee

(2) Nomination and Remuneration Committee (NRC)

(3) Stakeholders'' Relationship Committee (SRC)

(4) Corporate Social Responsibility Committee (CSR)

(5) Risk Management Committee (RMC)

(6) Finance Committee

(7) Management Committee

During the financial year under review, the Board at its Meeting held on August 5, 2023 constituted Management Committee comprising of following Directors of the Company:

(1) Ms. Akshali Shah - Executive Director (Chairperson);

(2) Mr. Devendra Shah - Executive Director (Member); and

(3) Mr. Pritam Shah, Managing Director & Interim CFO (Member).

The details of the Committees along with their composition, number of Meetings held and attendance at the Meetings are elaborated in the Corporate Governance Report, which forms part of the Annual Report.

BOARD EVALUATION

The Company believes in value for its shareholders through ethical processes & integrity. The purpose of Board feedback is to identify opportunities for enhancing the effectiveness of the Board as a whole. The Evaluation Policy and Criteria is duly approved by NRC. This process at the Company is conducted through structured questionnaires which covers various aspects of the Board''s functioning prepared after circulating the draft forms, covering various aspects such as structure of the Board, qualifications, experience and competency of Directors, diversity in Board, effectiveness of the Board processes, among others.

Evaluation plays a very important role in ensuring that the Company''s progress is monitored and timely inputs are given to enhance its performance and set the right direction for profitable growth fully complying with relevant regulatory requirements.

Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-Independent); (ii) Board itself (as a whole); (iii) Committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on inputs received from the Board Members after considering criteria such as Board composition and structure, effectiveness of Board/ Committee processes and information provided to the Board etc.

The performance of the Executive Chairman was evaluated after seeking the inputs from all the Directors other than the Chairman on the basis of the criteria such

as Chairman competency, value addition, leadership qualities, ease of communication, risk handling & mitigation, stakeholder relationship, personal attributes etc.

In terms of the requirements of the Act, a separate Meeting of the Independent Directors was held during the year. The Independent Directors at their Meeting held on March 21, 2024 reviewed the performance of the Chairman, Non-Independent Directors of the Company and overall performance of the Board and Committees as mandated by Schedule IV of the Act and Listing Regulations.

The Company also acted on feedback received from the previous year''s evaluation process. For more details on the Board Evaluation Process, please refer the ''Performance Evaluation'' section in the Corporate Governance Report, which forms part of the Annual Report.

Familiarisation Programme for Independent Directors

All Independent Directors are familiarised with the operations and functioning of the Company at the time of their appointment and on an ongoing basis. The Company already has an elaborate familiarization programme in place for effective induction of Independent Directors. The Board acknowledged this and reiterated the importance of rigorous execution of the induction process to ensure a smooth transfer and seamless integration of the new Board Member.

Pursuant to Regulation 25(7) and 46 of the SEBI Listing Regulations, the details of the familiarisation programme imparted to the Directors are elaborated in the Corporate Governance Report, which forms part of the Annual Report and are also available on the Company''s website i.e. www.paragmilkfoods.com under ''Investors'' tab.

Policy on Appointment and Remuneration of Directors, Key Managerial Personnel and Senior Management Personnel

The Board of Directors has formulated a Nomination and Remuneration Policy in terms of the provisions of subsection (3) of Section 178 of the Act and Regulation 19 of the Listing Regulations dealing with appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Personnel.

The policy covers criteria for determining qualifications, positive attributes, independence and remuneration of its Directors, Key Managerial Personnel and Senior Management Personnel.

The Nomination & Remuneration Policy is available on the website of the Company and the web-link of the same is https://www.paragmilkfoods.com/policy. php?id=38

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors including the audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by the Management and the relevant Board Committees including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and operating effectively during the FY 2023-24.

Pursuant to the requirements under Section 134(3) (c) of the Companies Act, 2013, with respect to the Director''s Responsibility Statements, your Directors make the following statements:

a) that in the preparation of the annual financial statements for the Financial Year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) t hat the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit and loss of the Company for the Financial Year ended March 31, 2024;

c) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that the directors had prepared the annual financial statements for the Financial Year ended March 31, 2024 on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS

The Board at its Meetings held on April 29, 2023 and August 5, 2023 and further the Members at the Annual General Meeting held on September 27, 2023, approved the followings by passing the required resolutions:

• I imiting the maximum number of Employee Stock Options (Stock Options) to be granted per employee in aggregate in any year, which shall not exceed 1,00,000 Stock Options;

• I ncrease the existing ESOP Pool and Equity Shares under Parag Milk Foods Limited Employee Stock Option Plan 2022 (ESOP 2022) from existing 5,00,000 (Five Lakh) Employee Stock Options to 25,00,000 (Twenty Five Lakh) Employee Stock Options; and

• Grant of Stock Options to the Employees of the subsidiary Company of the Company under ''Parag Milk Foods Limited - Employee Stock Option Plan 2022''.

Further, the Nomination and Remuneration Committee of the Company at its Meeting held on February 7, 2024, had approved the grant of 50,000 Stock Options to the eligible employees of the Company pursuant to Parag Milk Foods Limited - Employee Stock Option Plan 2022.

The details of the Stock Options granted under ESOP 2022 and the disclosures in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI SBEB Regulations) are annexed as ''Annexure II'' to this Report.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company''s internal control systems are commensurate with the nature of its business, and the size and complexity of its operations and such internal financial controls concerning the Financial Statements are adequate. The Audit Committee comprises of professionally qualified Directors, who interact with the statutory auditors, internal auditors and management in dealing with matters.

Internal Financial Control is an integrated part of the risk management process which in turn is a part of Corporate Governance addressing financial reporting risks. The Internal Financial Controls have been documented and embedded in the business processes. Your Company''s approach on Corporate Governance is elaborated in the Corporate Governance Report, which forms part of the Annual Report.

The Board reviews the internal processes, systems and the internal financial controls and accordingly, the Directors'' Responsibility Statement contains confirmation as regards to adequacy of the internal financial controls.

Assurances on the effectiveness of Internal Financial Controls are obtained through management reviews, self-assessment, continuous monitoring by departmental heads as well as testing of the internal financial control systems by the internal auditors during the course of their audits.

The Audit Committee and the Board are of the opinion that the Company has sound Internal Financial Control and it is operating effectively and no material weaknesses exist during the FY 2023-24. The details with respect of internal financial control and their adequacy are elaborated in the Management Discussion and Analysis, which forms part of the Annual Report.

RISK MANAGEMENT GOVERNANCE

The Board has an overall responsibility for governance of Company''s risk management.

The Board approves the Company''s risk policies and oversees management in the designing, implementation and monitoring of risk management systems. It also has the authority to approve any deviation in risk management policies or any breach of risk limits.

The Company has ensured the development and implementation of a risk management policy for identification of elements of various risks within and outside the organization, if any, which in the opinion of the Board may threaten the existence of the Company and for the effective mitigation of risk.

The Risk Management Committee constituted by the Board assists the Board in monitoring and reviewing the risk management for business operations, implementation of the risk management framework of the Company and such other functions as Board may deem fit.

During the year under review, the Company has appointed M/s. Deloitte Touche Tohmatsu India LLP (Deloitte), Internal Auditors of the Company, for Enterprise Risk Management (ERM) on the terms and conditions as per the Engagement Letter executed with them.

The Risk Management Framework covers all the Key Categories for Risk Classification i.e. Strategic and Reputational Risks, Financial and Fraud Risks, Governance and Compliance Risks, Extended Enterprise Risks, Cyber Risks and Information Security & Operational Risks, etc.

The key activities which would be covered by Deloitte during ERM is to develop ERM Framework and Policy, Risk Identification, Assessment and Prioritization, Risk Response Planning and Training & Capability Development.

The detailed terms of reference and the composition of RMC are set out in the Corporate Governance Report, which forms part of the Annual Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a robust vigil mechanism in place in the form of Code of Conduct (COC) which enables its stakeholders to report concerns about unethical or inappropriate behaviour, actual or suspected fraud, leak of unpublished price sensitive information, unfair or unethical actions or any other violation of the COC.

The Company has adopted a ''Whistle-Blower Policy'' / ''Vigil Mechanism'' for Directors and Employees of the Company. The vigil mechanism of the Company provides for adequate safeguards against victimization of directors, employees and third parties who avail the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. The provisions of this policy are in line with the

provisions of Section 177 (9) of the Act and the SEBI Listing Regulations.

The Company did not receive any complaints from the employees regarding violation of Code of Conduct or other matters whatsoever.

The functioning process of this mechanism has been more elaborately mentioned in the Corporate Governance Report forming a part of the Annual Report. The Whistle Blower Policy can be accessed on the Company''s website at https://www.paragmilkfoods. com/policy.php?id=42

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has constituted a Corporate Social Responsibility Committee and details of the composition are given separately in the Corporate Governance Report, which forms part of the Annual Report. The Company has undertaken the CSR activities in accordance with the CSR Policy of the Company adopted in accordance with Schedule VII of the Act. The Company''s CSR Policy can be accessed on the Company''s website at https:// www.paragmilkfoods.com/policy.php?id=53.

The brief outline of the CSR Philosophy, CSR policy, salient features of and the initiatives undertaken by the Company on CSR activities during the year under review are set out in this report in the format prescribed under Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 under ''Annexure III'' to this Report.

RELATED PARTY TRANSACTIONS

During the year under review i.e. 2023-24, all Transactions that were entered into with the related parties were in ordinary course of business and at arms'' length basis with prior Audit Committee approval. Therefore, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act w.r.t. contracts or arrangements with related parties under Section 188(1) in Form AOC-2 is not applicable to the Company for the FY 2023- 24 and hence, the same is not provided. The details of the transactions with related parties during FY 2023-24 are provided in the accompanying financial statements. There were no materially significant related party transactions entered into by the Company with the promoters, key management personnel or other designated persons that may have potential conflict with the interests of the Company at large.

The Audit Committee grants omnibus approval for the transactions that are in the ordinary course of business and are repetitive in nature. For other transactions, the Company obtains specific approval of the Audit Committee before entering into any such transactions. All related party transactions are placed before the Audit Committee on a quarterly basis. The same are also placed before the Board for seeking their approval.

In line with the requirements of the Act and the Listing Regulations, the Company has formulated a Policy

on Related Party Transactions and the same can be accessed on the Company''s website at https://www. paragmilkfoods.com/policy.php?id=40.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS BY THE COMPANY

The loans given, investments made and guarantees given & securities provided during the year under review are in compliance with the provisions of Section 186 of the Companies Act, 2013 and the Rules made thereunder and the details of the same are provided in the Notes to the Standalone Financial Statements, which forms part of the Annual Report.

BUY BACK

The Company has not bought back any of its securities during the Financial Year ended March 31, 2024.

DEPOSITS FROM PUBLIC

The Company has not accepted any deposits from the public within the meaning of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014, as amended, during the year under review.

No amount on account of principal or interest on deposits from the public was outstanding as on March 31, 2024.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

In accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and the rules made there under, the Company has adopted a Policy (Prevention of Sexual Harassment Policy a.k.a POSH Policy).

To build awareness in this area, the Company has been carrying out online Induction/ refresher programmes on a periodical basis. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. As per the requirement of the POSH Act and Rules made thereunder, the Company has constituted Internal Committees to redress complaints received regarding sexual harassment. Following is a summary of sexual harassment complaints received and disposed off during the year under review:

• No. of complaints received : NIL

• No. of complaints disposed off : NIL

MANAGEMENT DISCUSSION AND ANALYSIS, CORPORATE GOVERNANCE REPORT AND BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

In terms of Regulation 34 of SEBI Listing Regulations, a separate section on Management Discussion and Analysis, Business Responsibility & Sustainability Report and Corporate Governance Report together with a certificate from a Practicing Company Secretary

confirming compliance with the Regulations relating to Corporate Governance of Listing Regulations are set out and forms part of the Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTFLOW

The Company is continuously making efforts to reduce and optimize the energy consumption at its manufacturing facilities/ offices all over India. Particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are provided in the prescribed format and are annexed as ''Annexure IV'' and forms an integral part of this Report.

ANNUAL RETURN

Pursuant to Section 134(3)(a) of the Act, the Annual Return of the Company prepared as per Section 92(3) of the Act for the financial year ended March 31, 2024, is available on the Company''s website and can be accessed under ''Annual General Meeting'' tab at https:// www.paragmilkfoods.com/investors.php.

In terms of Rules 11 and 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return shall be filed with the Registrar of Companies, within prescribed timelines.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The ratio of remuneration of each Director to the median employees'' remuneration as per Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed as ''Annexure V'' and forms an integral part of this Report.

In terms of the provisions of Section 197(12) of the Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said rules are provided in this Annual Report. In terms of Section 136 of the Act, this report is being sent to the Members and others entitled thereto, excluding the aforesaid annexure. Any Member desirous of obtaining a copy of the said annexure may write to the Company Secretary at [email protected].

Details of top ten employees in terms of the remuneration and employees in receipt of remuneration as prescribed under rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, containing details prescribed under rule 5(3) of the said rules, which form part of the Directors'' Report, will be made available to any Member on request, as per provisions of section 136(1) of the Act.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review and in terms of Section 118(10) of the Act, the Company has complied with Secretarial Standards on Meetings of the Board of Directors (SS-1) and on General Meetings (SS-2) as amended and issued from time to time by the Institute of Company Secretaries of India.

AUDITORS

• Statutory Auditors

At the 28^th AGM held on September 29, 2020, the Members had approved appointment of M/s. Sharp & Tannan, Chartered Accountants, Mumbai (Firm Registration No. 109982W), as Statutory Auditors of the Company to hold office for a period of five years from the conclusion of the 28^th AGM till the conclusion of the 33^rd AGM.

As required under Regulation 33(1)(d) of Listing Regulations, M/s. Sharp & Tannan, have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The Statutory Auditors have further confirmed that they are not disqualified from continuing as Auditors of the Company.

The Auditor''s Report for the financial year ended March 31, 2024 on the financial statements of the Company forms part of the Annual Report. The said report was issued by the Statutory Auditor with an unmodified opinion and does not contain any qualification, reservation, adverse remark or disclaimer. During the year under review, the Auditors have not reported any fraud under Section 143(12) of the Act and therefore no details are required to be disclosed under Section 134(3)(ca) of the Act.

• Internal Auditors

Pursuant to provisions of Section 138 of the Companies Act, 2013 and the rules made thereunder, on the recommendation of the Audit Committee, the Board of Directors at its Meeting held on August 5, 2023 had appointed M/s. Deloitte Touche Tohmatsu India LLP, as Internal Auditors of the Company for the FY 2023-24 and FY 2024-25.

At the beginning of each Financial Year, an audit plan is rolled out after approval of the Audit Committee. The audit plan is aimed at evaluation of the efficacy and adequacy of internal control systems in the Company and compliance thereof with the same as well as robustness of internal processes, policies

and accounting procedures and compliance with laws and regulations. Based on the reports of Internal Auditors, the functional heads undertake corrective action in their respective areas.

• Cost Auditors

In accordance with provisions of Section 148 of the Act, the Company is required to maintain the accounts and cost records. It is hereby confirmed that the Company has maintained the cost records pursuant to provisions of the said section and accordingly such accounts & records are prepared & maintained by the Company.

Further, as per the requirements of Section 148 of the Act read with Rule 14 of the Companies (Cost Records and Audit) Rules, 2014, the cost records are required to be audited by a qualified Cost Accountant. During FY 2023-24, the Company filed the Cost Audit Report for the FY 2022-23 issued by M/s. Harshad Deshpande & Associates, Cost Accountants, (Firm Registration Number: 00378) with the Ministry of Corporate Affairs on September 1, 2023 which did not contain any qualification, reservation, adverse remark or disclaimer. No frauds were reported by the Cost Auditors to the Company in the said Report under sub-section (12) of Section 143 of the Act. Therefore, no detail is required to be disclosed under Section 134(3)(ca) of the Act.

The Board of Directors, upon the recommendation of the Audit Committee, has re-appointed M/s. Harshad Deshpande & Associates, Cost Accountants, (Firm Registration Number: 00378) to conduct audit of the cost records of the Company for the FY 2024-25. Accordingly, the Board of Directors recommends to the Members the resolution seeking their approval for ratifying the remuneration payable to the Cost Auditors for FY 2024-25, details of this resolution are provided in the Notice of the ensuing Annual General Meeting.

• Secretarial Auditors

The Secretarial Audit Report for FY 2023-24 in Form MR-3 is annexed as ''Annexure VI'' and forms an integral part of this Report. The said Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks and no frauds were reported by the Secretarial Auditors to the Company under sub-section (12) of Section 143 of the Act therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

Pursuant to the provisions of Section 204 of the Act and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. N. L. Bhatia & Associates, Practicing Company Secretaries (UIN: P1996MH055800), as the Secretarial Auditor of the Company to conduct audit of the secretarial records of the Company for the FY ending March 31, 2025.

COMPARISON OF SHAREHOLDING DATA AS AT THE END OF FY 2023-24 AND PREVIOUS FY 2022-23

The Category wise shareholding of the Company for the FY 2023-24 (From April 1, 2023 to March 31, 2024) is given below for reference of shareholders:

		As on March 31, 2024		As on March 31, 2023		%
CATEGORY CODE	CATEGORY OF SHAREHOLDER	TOTAL NO OF SHARES	% OF TOTAL SHARES	TOTAL NO OF SHARES	% OF TOTAL SHARES	CHANGE DURING YEAR
		HELD		HELD
(I)	(II)	(III)	(IV)	(V)	(VI)	(VII)
(A)	PROMOTER AND PROMOTER GROUP
(1)	INDIAN
(a)	Individual / HUF	50861435	42.61	48861435	41.63	0.98
(b)	Central Government / State Government(s)	0	0.00	0	0.00	0
(c)	Bodies Corporate	0	0.00	0	0.00	0
(d)	Financial Institutions / Banks	0	0.00	0	0.00	0
(e)	Others	0	0.00	0	0.00	0
Sub-Total A(1):		50861435	42.61	48861435	41.63	0.98
(2)	FOREIGN
(a)	Individuals (NRIs / Foreign Individuals)	0	0.00	0	0.00	0
(b)	Bodies Corporate	0	0.00	0	0.00	0
(c)	Institutions	0	0.00	0	0.00	0
(d)	Qualified Foreign Investor	0	0.00	0	0.00	0
(e)	Others	0	0.00	0	0.00	0
Sub-Total A(2):		0	0.00	0	0.00	0
Total A=A(1) A(2)		50861435	42.61	48861435	41.63	0.98
(B)	PUBLIC SHAREHOLDING
(1)	INSTITUTIONS
(a)	Mutual Funds / UTI / AIFs	10048760	8.42	4504503	3.84	4.58
(b)	Financial Institutions /Banks	0	0.00	0	0.00	0
(c)	Central Government / State Government(s)	0	0.00	0	0.00	0
(d)	Venture Capital Funds	0	0.00	0	0.00	0
(e)	NBFC Registered with RBI	262782	0.22	185250	0.16	0.06
(f)	Foreign Institutional Investors	10682111	8.95	12007842	10.23	(1.28)
(g)	Foreign Venture Capital Investors	0	0.00	0	0.00	0
(h)	Qualified Foreign Investor	0	0.00	0	0.00	0
(i) Others		0	0.00	0	0.00	0
Sub-Total B(1):		20993653	17.59	16697595	14.23	3.36
(2)	NON-INSTITUTIONS
(a)	Bodies Corporate	10520533	8.81	12968039	11.05	(2.24)
(b)	Foreign Corporate Bodies	4199018	3.52	6756756	5.76	(2.24)
(c)	Directors and their relatives (excluding independent directors and nominee directors)	310700	0.26	310700	0.26	0
(d)	Key Managerial Personnel	10	0	10	0	0
(e)	Individuals
	(i) Individuals holding nominal share capital	22534392	18.88	17924279	15.27	3.61
	upto f2 lakh
	(ii) Individuals holding nominal share capital	7032766	5.89	8964934	7.64	(1.75)
	in excess of f2 lakh

CATEGORY CATEGORY OF SHAREHOLDER CODE	As on March 31, 2024		As on March 31, 2023 %
	TOTAL NO OF SHARES HELD	% OF TOTAL SHARES	TOTAL % OF CHANGE NO OF TOTAL DURING SHARES shares year
(I) (II)	(III)	(IV)	(V) (VI) (VII)
(f) Others
Clearing Members	1129	0.00	2051683 1.75 (1.75)
Non-Resident Indians	1014266	0.85	1037740 0.88 (0.03)
Non-Resident Indians Non-Repatriation	403455	0.34	263591 0.22 0.12
Trusts	1000	0.00	1000 0 0
HUF	1327469	1.11	1362064 1.16 (0.05)
(g) Qualified Foreign Investor	0	0	0 0.00 0
Sub-Total B(2):	47344738	39.66	51640796 43.99 (4.33)
Total B=B(1) B(2):	68338391	57.25	68338391 58.22 (0.97)
(c) NON PROMOTER NON PUBLIC
Employee Benefit Trust	176015	0.14	176015 0.15 (0.01)
Sub-Total C:	176015	0.14	176015 0.15 (0.01)
Total (A B C)	119375841	100.00	117375841 100.00 0
GRAND TOTAL (A B C):	119375841	100.00	117375841 100.00 0

CHANGE IN THE SHAREHOLDING OF TOP TEN EQUITY SHAREHOLDERS OF THE COMPANY AS ON MARCH 31, 2024:

Shareholders		As on March 31, 2024		As on March 31, 2023		%
		Total Shares	% of Holding	Total Shares	% of Holding	Change
1 Devendra Prakash Shah		20206400	16.93	20206400	17.22	(0.29)
2	Netra Pritam Shah	13867027	11.61	13867027	11.81	(0.20)
3	Pritam Prakash Shah	9159888	7.67	9159888	7.80	(0.13)
4	Sixth Sense India Opportunities III	8167245	6.84	2702702	2.30	4.54
5	AG Dynamic Funds Limited	5433150	4.55	7392250	6.30	(1.75)
6	International Finance Corporation	4199018	3.52	6756756	5.76	(2.24)
7	Peanence Commercial Private Limited	3460981	2.90	0	0	2.90
8	Poojan Devendra Shah	3295000	2.76	3295000	2.80	(0.04)
9	VLS Finance Ltd	2634826	2.21	2010000	1.71	0.50
10	Priti Devendra Shah	2222820	1.86	2222820	1.89	(0.03)

ACKNOWLEDGEMENTS

The Directors wish to place on record their deep sense of appreciation for the committed services by the Company''s employees. The Directors acknowledge with gratitude, the encouragement and support extended by its valued shareholders. The Directors also place on record their appreciation for the support and co-operation which the Company has been receiving from its suppliers, distributors, retailers, business partners and others associated as its trading partners.

The Directors also take this opportunity to thank all the Farmers, Consumers, Employees, Shareholders, Clients, Vendors, Banks, Government and Regulatory Authorities and Stock Exchanges, for their continued support.

For Parag Milk Foods Limited

Sd/-

Devendra Shah

Place: Mumbai Chairman

Date: May 18, 2024 DIN: 01127319

---

Mar 31, 2023

Directors'' Report

To,

The Members,

Parag Milk Foods Limited

Your Board of Directors ("Board") takes pleasure in
presenting the 31^st Annual Report along with the Audited
Standalone and Consolidated Financial Statements
of Parag Milk Foods Limited ("Parag" or "Company" or
"your Company") for the financial year ("FY") ended
March 31, 2023. The consolidated performance of the
Company and its subsidiary has been referred to
wherever required.

In Compliance with the applicable provision of the
Companies Act, 2013 ("Act") and the Securities and
Exchange Board of India ("SEBI") (Listing Obligations
& Disclosure Requirements) Regulations, 2015 ("Listing
Regulations"), this report covers the financial results
and other developments during the financial year

from April 1, 2022 to March 31, 2023, with respect
to the Company and its Subsidary Company. The
consolidated entity has been referred to as "Parag
Group" or "Group" in this report.

FINANCIAL SUMMARY - HIGHLIGHTS

The Standalone and Consolidated Financial Statements
of the Company for the Financial Year ended March 31,
2023, have been prepared in accordance with the Indian
Accounting Standards (Ind AS) notified under Section
133 of the Companies Act, 2013 and Companies (Indian
Accounting Standards) Rules, 2015 and other relevant
provisions of the Act. The summarized Financial Results
of the Company (Standalone & Consolidated) for the
Financial Year ended March 31, 2023 are presented below:

	Standalone		Consolidated
Particulars	Year ended	Year ended	Year ended	Year ended
	March 31, 2023	March 31, 2022	March 31, 2023	March 31, 2022
Revenue from Operations	28,532.00	20,256.07	28,926.20	20,717.54
Other Income	351.62	89.61	451.57	210.40
Total Income	28,883.62	20,345.68	29,377.77	20,927.94
Earnings before interest, Depreciation and Tax	1741.17	(4,197.65)	1,634.93	(4,173.51)
Less :- Depreciation	540.73	509.31	572.75	537.44
Less:- Interest	528.57	470.36	551.56	509.59
Profit before Tax and exceptional items	671.87	(5,177.32)	510.62	(5,220.54)
Exceptional Items	-	--	-	--
Profit / (Loss) before tax	671.87	(5,177.32)	510.62	(5,220.54)
Less:- Tax expense
(1) Current Tax:
(2) MAT (Credit) / Revesal	-	-	-	-
(3) Deferred tax:	(13.04)	79.16	(21.92)	69.34
(4) Tax adjustment in respect of ealier years	-	35.07	-	35.07
Profit for the Period / Year After Tax (PAT)	684.91	(5,291.55)	532.54	(5,324.95)
Dividend on equity shares (including tax on dividend)	Nil	Nil	Nil	Nil
Earnings per Share
Basic	6.52	(56.56)	5.07	(56.91)
Diluted	6.34	(55.19)	4.96	(55.54)

FINANCIAL PERFORMANCE AND STATE OF
COMPANY''S AFFAIRS

Standalone

At Standalone level, the total Revenue from operations
for FY 2022-23 increased by 41% to ^28,532.00 Million
against ^20,256.07 Million in the Previous Year
2021-22. The Standalone Profit Before Tax for FY 2022-23
increased to f671.87 Million against f(5,177.32) Million in
the Previous Year 2021-22. The Standalone Profit after
Tax for FY 2022-23 increased to f684.91 Million against
f(5291.55) Million reported in the Previous Year 2021-22.
The Operations and Financial Results of the Company
are elaborated in the Management Discussion and
Analysis Report.

Consolidated

Consolidated Revenue from Operations for FY 2022-23
stood at ^28,926.20 Million reporting a growth of 39.60%
as compared to ^20,717.54 Million in FY 2021-22 driven
by improvement in core categories which reported
43.50% growth. The Consolidated Profit Before Tax for
FY 2022-23 increased to f510.62 Million from f(5220.54)
Million in the Previous Year 2021-22. The Consolidated
Profit After Tax for FY 2022-23 stood at f532.54 Million
as compared to f(5324.95) Million in the Previous Year
2021-22.

PERFORMANCE ANALYSIS, OUTLOOK & OUR
BUSINESS

The Company had started on a positive note and had
delivered record revenue for the 1^st Quarter ended June
30, 2022. Consolidated income from operations stood
at ^6,909.34 Million registering a growth of 57.6% Y-o-Y
and 22.9% Q-o-Q driven by robust volume and value
growth across categories. Gross Profit, EBIDTA and
Profit After Tax were lower compared on a quarter on
quarter basis. The share of value-added Products for
Q1 FY 2022-23 was 61.8% of total revenue, while that of
liquid milk was 12.8% and the same for Skimmed Milk
Powder was 25.4%.

For Q2 FY 2022-23; the overall festive buoyancy being
felt across all product categories, resulting in healthy
demand growth. Decent volume growth in core
product categories of ghee, cheese and paneer was
reported. Consolidated total income from operations
of ^6,648.40 Million registering a growth of 24.9% Y-o-Y
driven by robust volume and value growth across
categories. The share of value-added Products for
Q2 FY 2022-23 was 74.5% of total revenue, while that
of liquid milk was 12% and the same for Skimmed Milk
Powder was 13.5% respectively.

The Company associated with national shows like
Kaun Banega Crorepati ("KBC") and Super Singer for
Gowardhan Ghee and Go Cheese respectively. E-
commerce business grew by 76% Y-o-Y in Q2 FY 2022¬
23. Company also commenced the Lactose Value
Added Plant and was working on cold-room facilities
across India.

For Q3 FY 2022-23; the Company registered an all time
quarterly high revenue at ^7358.90 Million recording a
robust growth of 36.6% Y-o-Y at consolidated level. The
growth was broad-based with all distribution channels
of General Trade, Modern Trade, Ecommerce and
HORECA contributing to the growth. Gross Profit stood
at f1556.1 Million as compared to f1507.5 Million in Q3 FY
2021-22. The share of new age business was 3.8%, while
for liquid milk being 8.1% and value-added products
at 74.8% of total revenue, while that for Skimmed Milk
Powder was 12.5% respectively.

Core categories of Ghee and Cheese had seen
continuous traction throughout the year and posted a
growth of457% Y-o-Y and 14.1% Q-o-Q for Q3 FY2022-23.

Overall, the year posted a very strong momentum
on demand across business verticals and FY 2022¬
23 posted highest revenue of ^28,926.20 Million; led
by volume, value, and product mix. The outstanding
performance was driven by extensive distribution
reach and outlet coverage, coupled with impact led
marketing and branding campaigns and premium
pricing in flagship products. The share of new age
business was 3.3% while liquid milk took 9.4% and
value-added Products at 69.3% of total revenue.
Skimmed Milk Powder was 18% Y-o-Y.

During the year under review, core categories of Ghee
and Cheese have seen continuous traction throughout
the year and have posted a growth of 43.5% Y-o-Y, led
by volume growth of 21.5% YoY.

The protein portfolio consisting of the Premium Brand
Avvatar, continued its momentum and recorded
robust 123% growth Y-o-Y, led by 69% volume growth
Y-o-Y.

The overall business growth was broad-based with all
distribution channels contributing to performance.

E-commerce business has grown by ~2.2x on a Y-o-Y
basis.

For FY 2022-23, the General Trade, Modern Retail
and HORECA verticals posted a growth of 37% Y-o-Y,
42% Y-o-Y and 35% Y-o-Y respectively. The overall
retail presence expanded by 30% Y-o-Y to reach
4.6 lacs retail touchpoints.

BRAND BUILDING INITIATIVES & MARKETING
HIGHLIGHTS

GOWARDHAN: The Company has strengthened its
brand equity reach by adopting unique content led
impact marketing and branding activities. Some
of the recent activities include association with the
national show "Kaun Banega Crorepati (KBC)" - a
campaign promising 100 Cr Eyeballs which enabled
the Company to widen its reach in tier 2 and tier 3
cities through strong brand messaging ''Garv Se
Gowardhan''. Gowardhan had India''s best Brand
Integration.

GO CHEESE: Our Company also associated with
"SUPER SINGER" for promotion of GO Cheese. There
were Outdoor campaigns with 1000 Sites on display;
focusing on Pune, Ahmedabad, Udaipur Jaipur,
Kolkata, Nagpur, Lucknow, Indore, Surat, Chandigarh,
Jalandhar, Amritsar and Bhopal.

Retaining its core theme "Make it amazing" the brand
Go Cheese has participated in one of the most popular
show "Anupama", enabling the Company to gain
strong consumer connect.

AVVATAR: Pa rag Milk Foods is the only Indian
Company to manufacture Whey Protein in India.

The Company undertook brand activation drive for its
premium protein brand "Avvatar" in IHFF (International
Health, Sports & Fitness) festival associating with the
health and fitness icon - The Great Khali. The event
had a massive footfall of 1 Lakh visitors garnering
strong brand equity.

PRIDE OF COWS: Company associated & curated
experiences with one of India''s leading concerts
(Singer-Arijit Singh) and Christmas activations
(Hamleys).

The Company is providing consistent media support
to all of its brands with investments of 80% of media
spends in AIR and Building brands over new age
influencers content strategy.

Our impact led marketing campaigns coupled with an
aggressive distribution drive continue to strengthen
our brand equity.

EXPANSION OF SUBSIDIARY

The Company is expanding its wholly owned subsidiary
("WOS") "Bhagyalakshmi Dairy Farm Private Limited"

("Wholly Owned Subsidiary" / "Bhagyalaxmi"), which
supplies exclusively to our brand "Pride of Cows" and
is expected to reach over 15,000 cows by FY 2026-27.

REVIEW OF OPERATIONS

Strong network and steady relationship with 5 lakh
farmers and more than 300 Bulk Milk Coolers ("BMC")
across India has helped our Company to stand strong
in the fluctuating situations throughout the year
including turmoil in the dairy industry due to exponential
rise in export of butter, skimmed milk powder, lumpy
cow disease and heavy monsoons. During the year our
Plant procurement purchase increased by 20% from 14
lac liters a day to 18 lac liters a day. The Company is
built on the backbone of a robust network comprising
of 29 Depots, 300 Super Stockists, 3000 Distributors
and 4.6 Lakh Retail touch points.

The Company is optimizing its productivity to drive
growth whereby:

• More than 70% of GT Business has been covered in
sales force automation

• Leveraging vendors, re-negotiations, reverse
auctions, office consolidation

• Depot & Cold Storage restructuring

• Beat planning in opportunity markets The aim of
the Company is to reach 5 Lakh retail touch points
by FY 2024-25 and 13-15 Lakh Touch Points by FY
2026-27. The expansion would be driven by:

- Increasing distribution dominance in < 1 lakh
towns

- Building Depots and infrastructure across India

- Aggressive outlet expansion

There was no change in the nature of business of the
Company.

BRAND BUILDING: STRATEGY

The Company''s foremost strategic priority is to be one
of the best performing, most trusted and respected
dairy FMCG companies across stakeholders.

There are 5 Major Strategic Priorities of the Company
as under:

1. Strengthening and accelerating core categories

2. Brand Building & Innovation

3. Evolving a route to market

4. Strengthening New Age business

5. Optimizing Productivity to drive growth

EXPORT MARKET

Parag Milk Foods Limited continues to enjoy a strong
presence and brand recall of Go and Gowardhan
brands across several geographies through its exports
to UAE, Singapore, Mauritius, Oman, Kuwait, Saudi
Arabia, Congo, Hong Kong, Philippines, Sri Lanka,
Bangladesh, Maldives, USA, Thailand, Nepal, Bhutan etc.

Our export sales has contributed 1.09% to the overall
revenues. Our products received good recognition in
key markets of Middle East, South East Asia, Africa and
Indian subcontinents.

PHILANTHROPIC ACTIVITIES

The Company has been efficacious in philanthropic
activities for the community as a whole whereby even
during the onset of the Second Wave of COVID-19
pandemic, the Company has continued to work on the
following areas viz:

• Food & Water facilities - Providing three nutritious
meals to Covid Patients and Hospital staff on
daily basis

• Healthcare - Provided health kit to Corona Warriors
on a consistent basis

• Education

• Animal Welfare

• Sanitation

In conjunction with State Government of Maharashtra,
Company developed the JUMBO COVID hospital
to provide necessary medical support for the local
residents of Manchar.

DIVIDEND DISTRIBUTION POLICY

The Company has formulated Dividend Distribution
Policy in accordance with Regulation 43A of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015 and any amendments thereto for
bringing transparency in the matter of declaration of
dividend and for protecting the interest of investors.

Your Company intends to maintain similar or better
levels of dividend payout in future. However, the actual
dividend payout in each year will be based on the
profits and investment opportunities of the Company.

The policy is available on the website of the Company
at https://www.paragmilkfoods.com/policy.php?id=52

TRANSFER TO RESERVE

During the Financial Year 2022-23, there was no
amount proposed to be transferred to the Reserves.

DIVIDEND

The Board of Directors at its meeting held on April
29, 2023, decided not to recommend dividend for
the financial year ended March 31, 2023 in order to
conserve the resources of the Company and for long
term requirement of funds.

The dividend payout has always been in accordance
with the Company''s Dividend Distribution Policy which
has been adopted in accordance with Regulation 43A
of Listing Regulations as available on the website of
the Company at www.paragmilkfoods.com and which
also forms part of this Annual Report.

SHARE CAPITAL

During FY 2022-23, the Company''s paid-up Equity
Share Capital increased from f953.76 Million to ^1,173.76
Million consequent to the allotment of 1,10,00,000
(One Crore Ten Lakh) Equity Shares of f10/- (Rupees
Ten only) each fully paid-up on preferential basis to
AG Dynamic Funds Limited (Investor) and 10,00,000/-
(Ten Lakh) Equity Shares of f10/- (Rupees Ten only) each
fully paid-up on preferential basis to Pivotal Business
Managers LLP (Investor). Also, 20,00,000 Warrants of
face value f10/- (Rupees Ten only) each were allotted to
Ms. Akshali Shah belonging to Promoter group entitling
her for the subscription of equivalent number of equity
shares of f10/- (Rupees Ten Only) each.

Further, during the year, the Company converted
1,00,00,000 Convertible Share Warrants into 1,00,00,000
equity shares of face value of f10/- (Rupees Ten only)
each allotted to Promoter and Promoter group viz
Mr. Devendra Prakash Shah and Mrs. Netra Pritam Shah.

As on March 31, 2023, Ms. Akshali Shah - Member of
Promoter Group & Executive Director holds 20,00,000
Warrants convertible into 20,00,000 equity shares of
face value of f10/- each.

MATERIAL CHANGES AFFECTING THE COMPANY

Some material changes and commitments affecting
the financial position of the Company occurred
between April 1, 2023 till the date of signing this report.

Mr. Pritam Shah, Managing Director of the Company
was provided with added responsibility of the office
of Interim Chief Financial Officer (CFO) w.e.f. April 29,
2023 and consequent to that Mr. Surendra Malaviya
was released from the office of Interim CFO w.e.f.
April 28, 2023. Currently, Mr. Pritam Shah bears dual
responsibility as the Managing Director and Interim
CFO of the Company.

The Company has over the years, advanced funds
to M/s. Bhagyalaxmi Dairy Farms Pvt. Ltd. (''Wholly
Owned Subsidiary'' / ''Bhagyalaxmi'') towards supply of
materials to the Company. Out of the said advances,
an amount of f300 Million was converted into short¬
term loan as on March 31, 2023 with a provision of
interest @8.75% per annum, in order to utilize the said
funds by the Wholly Owned Subsidiary for its working
capital needs, expansion and general corporate
purposes. The Company further, invested f419.6 Million
including conversion of the said amount of short¬
term loan of f300 Million towards infusion in the equity
shares of Face Value of f10/- per share of Bhagyalaxmi
at later stage.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company has one Wholly Owned Subsidiary as
on March 31, 2023. There were no material changes
in the nature of the business of the subsidiary. During
FY 2022-23, no new subsidiary was incorporated /
acquired. The Company does not have any associate
company, nor has it entered into a joint venture with
any other company.

Bhagyalaxmi Dairy Farms Private Limited:

Pursuant to the provisions of Section 129(3) of the Act a
statement containing the salient features of financial
statements of the Company''s Subsidary in Form No.
AOC-1 is enclosed as Annexure I to this report.

Pursuant to Listing Regulations, the Company has
formulated a policy for determining its ''material
subsidiaries''. The said Policy is uploaded on the website
of the Company at www.paragmilkfoods.com.

Performance highlights of the subsidiary is given
below:

Sr. Particulars No.	FY 2022-23 FY 2021-22
1. Total Revenue	902.83	808.46
2. Profit/(Law) before	(106.17)	24.13
Interest, Tax and
Depreciation
3. Profit Profit/(Law) after Tax	(167.03)	(33.41)

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the provisions of Section 129 of the Companies
Act, 2013 and the Companies (Accounts) Rules, 2014, the
Consolidated Financial Statements of the Company and
its subsidiary have been prepared in the same form and
manner as mandated by Schedule III to the Companies
Act, 2013 and shall be laid before the forthcoming
31^st Annual General Meeting ("AGM") of the Company.

The Audited Financial Statements of the Company
and subsidiary are available on the website of the
Company at www.paragmilkfoods.com. Further a copy
of the Audited Financial Statements of the subsidiary
shall be made available for inspection at the registered
office of the Company during business hours on any
working day upto the date of Annual General Meeting.
As per Section 136 of the Companies Act, 2013, any
shareholder interested in obtaining a copy of separate
Financial Statements of the subsidiary shall make
specific request in writing to the Company Secretary.

CREDIT RATING

The Company was given revised ratings twice during
the FY 2022-23 by the Credit Rating Agency, ICRA
Limited ("ICRA") in July and December 2022. Ratings
were further revised by ICRA in May 2023.

In July 2022, ICRA revised and downgraded its rating
assigned to the Company for the long-term Rating to
[ICRA] BBB (Negative) from [ICRA] A (Stable)and for
short-term Rating to [ICRA]A2 from [ICRA]A2 . In case
of rating for Non-Convertible Debentures the rating
was Long-term Rating of [ICRA] BBB (Negative) from
[ICRA] A (Stable) due to the announcement of the Q4
FY 2021-22 results.

In December 2022, the ratings assigned to Company
were revised and downgraded for the long¬
term Rating to [ICRA] BBB (Negative) from [ICRA]
BBB (Negative) and for short-term Rating to [ICRA]A3
from [ICRA] A2. In case of rating for Non-Convertible
Debentures the rating was Long-term Rating of [ICRA]
BBB (Negative) from [ICRA] BBB (Negative) due to the
announcement of the Q2 FY 2022-23 results.The overall
ratings were downgraded due to expectation that the
financial profile/ performance of Company was likely
to weaken owing to ongoing pressure on profitability
margins and higher borrowing levels, leading to
moderation in the Company''s debt protection metrics.

Further, in May 2023, ICRA Limited had downgraded
the credit rating for the credit facilities availed by
the Company, for the Long-term Rating to [ICRA]
BBB-(Negative) from [ICRA] BBB (Negative) and for
Short-term Rating to [ICRA]A3 from [ICRA]A3 . In
case of Non-Convertible Debentures, the rating was
Long-term Rating of [ICRA]BBB-(Negative) from [ICRA]
BBB (Negative) due to Q4 & FY 2022-23 Results.

BOARD OF DIRECTORS AND KEY MANAGERIAL
PERSONNEL

Appointment / Re-appointment of Directors:

On recommendation of Nomination and Remuneration
Committee, the Board of Directors of the Company,

approved the appointment of Ms. Akshali Shah (DIN:
06575079) as Executive Director at its meeting held on
June 30, 2022 w.e.f. the date of shareholders'' approval.
Further, the Board at its meeting held on November
14, 2022 approved the appointment of Mr. Dnyanesh
Darshane (DIN: 08515431) as an Independent Director
of the Company w.e.f. the date of shareholders''
approval. The Shareholders vide Postal Ballot process
on December 25, 2022, approved appointments of Mr.
Dnyanesh Darshane (DIN: 08515431) as Independent
Director and Ms. Akshali Shah (DIN: 06575079) as
Executive Director on the Board of the Company.

Mr. Devendra Shah - Chairman & Whole-time Director
and Mr. Pritam Shah, Managing Director were re¬
appointed for a further period of 3 (three) years from
April 1, 2023 to March 31, 2026. These re-appointments
were approved by shareholders at the 30^th AGM held
on September 30, 2022 and the term of office of Mr.
Devendra Shah - Chairman & Whole-time Director
shall be liable to retire by rotation.

During the year, two Directors ceased to be associated
with the Company viz, Mr. B. M. Vyas (Non-Executive
Director) resigned from the Board w.e.f. June 29,
2022 due to old age health reasons. Also, Mr. Ramesh
Chandak (Independent Director) resigned from the
Board w.e.f. August 12, 2022 on account of personal
commitment and other professional commitments
which may lead to conflict of interest. It is further
confirmed that there were no other material reason for
the resignation other than those mentioned above.

Declarations by Independent Directors

All Independent Directors of the Company have
given declarations that they meet the criteria of
independence as laid down under Section 149(6) of the
Act and Regulation 16(1) (b) of the Listing Regulations.
In the opinion of the Board, the Independent Directors
fulfill the conditions of independence specified in
Section 149(6) of the Act and Regulation 16(1) (b) of the
Listing Regulations. The Independent Directors have
also confirmed that they have complied with the Code
for Independent Directors prescribed in Schedule IV to
the Act and Company''s Code of Conduct for Directors
and Senior Management Personnel. The Independent
Directors of the Company have confirmed that they
have registered their names in the data bank of
Independent Directors maintained with the Indian
Institute of Corporate Affairs in terms of Section
150 of the Act read with Rule 6 of the Companies
(Appointment & Qualification of Directors) Rules, 2014.

Further, the Board affirms the highest levels of integrity,
expertise and experience of the Independent Directors
appointed during the year.

KEY MANAGERIAL PERSONNEL (KMP)

Pursuant to the provisions of Section 2(51) and Section
203 of the Act read with Rules framed thereunder,
the following are the Key Managerial Personnel of the
Company as on March 31, 2023:

1.	Mr. Devendra Shah -	Chairman & Whole time
		Director
2.	Mr. Pritam Shah -	Managing Director
3.	Ms. Akshali Shah -	Executive Director
4.	Mr. Virendra Varma -	Company Secretary (CS)
		& Compliance Officer
5.	Mr. Surendra Malaviya -	Interim CFO

During the year, Mr. Surendra Malaviya was appointed
as Interim Chief Financial Officer from June 30,
2022 subsequently upon the appointment of Mr.
Krishnamurthy Suryanarayan as the Whole time Chief
Financial Officer on October 18, 2022, Mr. Malaviya
ceased to hold the office of Interim Chief Financial
Officer. On November 13, 2022, Mr. Suryanarayan
resigned from the post of Whole time CFO and
Mr. Malaviya was re-appointed as the Interim Chief
Financial Officer on November 13, 2022.

Ms. Rachana Sanganeria resigned from the post
of Company Secretary & Compliance Officer w.e.f.
September 30, 2022 and Mr. Virendra Varma was
appointed as Company Secretary & Compliance
Officer w.e.f. October 18, 2022.

Mr. Pritam Shah was provided with added responsibility
of the office of Interim Chief Financial Officer and
consequently his designation changed to Managing
Director & Interim Chief Financial Officer w.e.f. April
29, 2023. Mr. Surendra Malaviya was released from
the office of the Interim Chief Financial Officer
w.e.f. April 28, 2023.

MEETINGS OF THE BOARD OF DIRECTORS AND ITS
COMMITTEES

The Board of Directors of the Company met seven
(7) times during the financial year. The details of
composition of the Board and its Committees, their
meetings held during the year under review and the
attendance of the Directors/ Committee Members at
the respective meetings are provided in the Corporate
Governance Report section of this Annual Report.

During the year under review, the Board accepted all
the recommendations made by the Audit Committee.
The Board evaluates the recommendations made by
Audit Committee and seeks further information as
they may require. There were no instances where the
Board has not accepted any recommendation of Audit
Committee.

Committees of the Board

The Board of Directors has the following Committees
as on March 31, 2023:

1. Audit Committee

2. Nomination and Remuneration Committee ("NRC");

3. Stakeholders'' Relationship Committee ("SRC");

4. Corporate Social Responsibility Committee ("CSR");

5. Risk Management Committee ("RMC"); and

6. Finance Committee

The details of the Committees along with their
composition, number of meetings held and attendance
at the meetings are provided in the Corporate
Governance Report.

BOARD EVALUATION

The Company believes in value for its shareholders
through ethical processes & integrity. The purpose of
Board feedback is to identify opportunities for enhancing
the effectiveness of the Board as a whole. The Evaluation
Policy and Criteria is duly approved by NRC. This process
at the Company is conducted through structured
questionnaires which covers various aspects of the
Board''s functioning prepared after circulating the draft
forms, covering various aspects such as structure of the
Board, qualifications, experience and competency of
Directors, diversity in Board, effectiveness of the Board
processes, among others.

Evaluation plays a very important role in ensuring
that the Company''s progress is monitored and timely
inputs are given to enhance its performance and set
the right direction for profitable growth fully complying
with relevant regulatory requirements.

Pursuant to the provisions of the Act and Regulation 17(10)
of Listing Regulations and as prescribed in the stated
policy of the Board, the Board has carried out an annual
performance evaluation of (i) the Directors (Independent
and non-Independent); (ii) Board itself (as a whole); (iii)
Committees and (iv) fulfillment of Independence criteria.
The Board performance was evaluated based on inputs
received from the Board members after considering
criteria such as Board composition and structure,
effectiveness of Board/ Committee processes and
information provided to the Board etc.

The performance of the Executive Chairman was
evaluated after seeking the inputs from all the
Directors other than the Chairman on the basis of
the criteria such as chairman competency, value
addition, leadership qualities, ease of communication,
risk handling & mitigation, stakeholder relationship,
personal attributes etc.

In terms of the requirements of the Act, a separate
meeting of the Independent Directors was also
held during the year. The Independent Directors at
their meeting held on March 28, 2023 reviewed the
performance of the Chairman, Non-Independent
Directors of the Company and overall performance of
the Board and Committees as mandated by Schedule
IV of the Act and Listing Regulations.

The evaluation exercise highlighted the key areas
requiring improvisation in order to strengthen the
performance and the effectiveness of the Board and
Committee Meetings held by the Company.

Familiarisation Programme for Independent Directors

The Company already has an elaborate familiarization
programme in place for effective induction of
Independent directors. The Board acknowledged this
and reiterated the importance of a rigorous execution
of the induction process to ensure a smooth transfer
and seamless integration of the new Board Members.

Pursuant to Regulation 25(7) and 46 of the SEBI
Listing Regulations, the details of the familiarisation
programme imparted to the Directors are explained
in the Report on Corporate Governance and are
also available on the Company''s website i.e.
www.paragmilkfoods.com under ''Investors'' tab.

Policy on Appointment and Remuneration of
Directors, Key Managerial Personnel and Senior
Management Personnel

The Board of Directors has formulated a Nomination
and Remuneration Policy in terms of the provisions of
sub-section (3) of Section 178 of the Act and Regulation
19 of the Listing Regulations dealing with appointment
and remuneration of Directors, Key Managerial
Personnel and Senior Management Personnel.

The policy covers criteria for determining qualifications,
positive attributes, independence and remuneration
of its Directors, Key Managerial Personnel and Senior
Management Personnel.

The Nomination & Remuneration Policy is available
on the website of the Company and the web-link of
the same is https://www.paragmilkfoods.com/policy.
php?id=38

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(3)
(c) of the Companies Act, 2013, with respect to the
Director''s Responsibility Statements, your Directors
make the following statements:

a) that in the preparation of the annual financial
statements for the Financial Year ended March
31, 2023, the applicable accounting standards
have been followed along with proper explanation
relating to material departures, if any;

b) that the Directors had selected such accounting
policies and applied them consistently and made
judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the Financial
Year and of the profit and loss of the Company for
the Financial Year ended March 31, 2023;

c) that the Directors had taken proper and sufficient
care for the maintenance of adequate accounting
records in accordance with the provisions of this
Act for safeguarding the assets of the Company
and for preventing and detecting fraud and other
irregularities;

d) that the directors had prepared the annual
financial statements for the Financial Year ended
March 31, 2023 on a going concern basis;

e) that proper internal financial controls were in place
and that the financial controls were adequate and
were operating effectively; and

f) that systems to ensure compliance with the
provisions of all applicable laws were in place and
were adequate and operating effectively.

DISCLOSURE REGARDING ISSUE OF EMPLOYEE
STOCK OPTIONS

At the AGM held on September 30, 2022, the
Shareholders approved the ''Parag Milk Foods Limited
- Employee Stock Option Plan 2022'' ("ESOP 2022"/
"Plan") authorizing the Board and the NRC to create,
issue and grant in one or more tranches subject to
maximum 5,00,000 (Five Lakh) stock options to such
persons working exclusively with the Company and
its subsidiary.

The said 5,00,000 (Five Lakh) stock options shall be
exercisable into not more than 5,00,000 (Five Lakh)
equity shares ("Shares") of face value of f10/-
(Rupees Ten) each fully paid-up, out of which 3,23,985
(Three Lacs Twenty-Three Thousand Nine Hundred
Eighty-Five) Shares to be sourced from primary issue
by the Trust from the Company and 1,76,015 (One Lac
Seventy-Six Thousand Fifteen) Shares through the
existing irrevocable employee welfare trust of the
Company namely ''Parag Milk Foods Employees Stock
Option Trust'' ("Trust").

Details required to be provided under Section 62 of the
Act and Rule 12(9) of Companies (Share Capital and
Debenture Rules, 2014) and Regulation 14 of SEBI (Share
Based Employee Benefits) Regulations, 2021 read
with SEBI Circular dated June 16, 2015 are provided in
Annexure II. The certificate issued by the Secretarial
Auditors for the compliance under Regulation 13 of SEBI
(Share Based Employee Benefits) Regulations, 2021
shall be placed before the Members at the 31^st AGM.

Further, the Company at its 31^st AGM shall place the
amendments which were approved by the Board at its
meetings held on April 29, 2023 and August 5, 2023 for
shareholders'' approval.

The details of the same are provided in the explanatory
statement annexed with the notice of the 31^st AGM. A
brief of the proposed amendments/ approvals to be
placed are as follows:

• to limit the maximum number of Options to be
granted per employee and in aggregate in any
year shall not exceed 1,00,000 stock options

• to transfer the unused 10,00,000 stock options
under ESOP 2019 to ESOP 2022 i.e. 10,00,000 Options
convertible into 10,00,000 Equity Shares having
face value of f10/- each and to revise the total
ESOP pool from existing 5,00,000 stock options to
25,00,000 stock options under the ESOP 2022

• grant of options to employees of the Company or
its Subsidiary.

INTERNAL FINANCIAL CONTROL SYSTEMS AND
THEIR ADEQUACY

The Company has an Internal Control System, in line
with the size, scale and complexity of its operations.
Audit Committee, comprises of professionally
qualified Directors, who interact with the statutory
auditors, internal auditors and management in
dealing with matters.

Internal Financial Controls are an integrated part
of the risk management process which in turn is a
part of Corporate Governance addressing financial
reporting risks. The Internal Financial Controls have
been documented and embedded in the business
processes. Your Company''s approach on Corporate
Governance has been detailed out in the Corporate
Governance Report.

The Board reviews the internal processes, systems
and the internal financial controls and accordingly,
the Directors'' Responsibility Statement contains a
confirmation as regards to adequacy of the internal
financial controls.

Assurances on the effectiveness of Internal Financial
Controls are obtained through management
reviews, self-assessment, continuous monitoring by
departmental heads as well as testing of the internal
financial control systems by the internal auditors
during the course of their audits.

The Audit Committee and the Board are of the opinion
that the Company has sound Internal Financial Control
commensurate with the nature and size of its business
operations and operating effectively and no material
weaknesses exist during the financial year 2022-23.

The details in respect of internal financial control and
their adequacy are included in the Management
Discussion and Analysis, which forms part of the
Annual Report.

RISK MANAGEMENT GOVERNANCE

The Board has an overall responsibility for governance
of the Company''s risk management. The Board
approves the Company''s risk policies and oversees
management in the designing, implementation
and monitoring of risk management systems. It also
has the authority to approve any deviation in risk
management policies or any breach of risk limits.

The Company has ensured the development and
implementation of a risk management policy for
identification of elements of various risks within and
outside the organisation, if any, which in the opinion of
the Board may threaten the existence of the Company
and for the effective mitigation of risk.

The RMC constituted by the Board assists the Board
in monitoring and reviewing the risk management
for business operations, implementation of the risk
management framework of the Company and such
other functions as Board may deem fit.

The Risk Management framework, inter alia, includes
identification of internal and external risks, including
financial, operational, sectoral, information, cyber
security, strategic or any other risk as may be
determined by the Risk Management Committee and
the measures for risk mitigation.

The detailed terms of reference and the composition of
RMC are set out in the Corporate Governance Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a robust vigil mechanism in place
in the form of Code of Conduct ("COC") which enables
its stakeholders to report concerns about unethical or
inappropriate behaviour, actual or suspected fraud,
leak of unpublished price sensitive information, unfair
or unethical actions or any other violation of the COC.

The Company has adopted a ''Whistle-Blower Policy'' /
''Vigil Mechanism'' for Directors and Employees. The vigil
mechanism of the Company provides for adequate
safeguards against victimization of directors, employees
and third parties who avail of the mechanism and also
provides for direct access to the Chairman of the Audit
Committee in exceptional cases. The provisions of this
policy are in line with the provisions of the Section 177 (9)
of the Act and the SEBI Listing Regulations.

The Company did not receive any complaints from the
employees regarding violation of Code of Conduct or
other matters whatsoever.

The functioning process of this mechanism has
been more elaborately mentioned in the Corporate
Governance Report forming a part of this Annual
Report. The Whistle Blower Policy has been uploaded
on the Company''s website and which can be accessed
at https://www.paragmilkfoods.com/policy.php?id=42

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has constituted a Corporate Social
Responsibility Committee and details of the
composition are given separately as part of the
Corporate Governance Report. The Company has
undertaken the CSR activities in accordance with the
CSR Policy of the Company adopted in accordance
with Schedule VII of the Act. The Company''s CSR
Policy can be accessed on the Company''s website at
www.paragmilkfoods.com under ''Investors'' tab.

The brief outline of the CSR Philosophy, CSR policy,
salient features of and the initiatives undertaken by
the Company on CSR activities during the year under
review are set out in this report in the format prescribed
under Rule 9 of Companies (Corporate Social
Responsibility Policy) Rules, 2014 and are annexed as
Annexure III and forms an integral part of this Report.

RELATED PARTY TRANSACTIONS

During the year under review i.e. 2022-23, all
Transactions that were entered into with the related
parties were in ordinary course of business and
at arms'' length basis with prior Audit Committee
approval. Therefore, the disclosure of Related Party
Transactions as required under Section 134(3)(h) of
the Companies Act w.r.t. contracts or arrangements
with related parties under Section 188(1) in Form
AOC-2 is not applicable to the Company for the FY 2022¬
23 and hence, the same is not provided. There were
no materially significant related party transactions
entered into by the Company with the promoters, key
management personnel or other designated persons
that may have potential conflict with the interests of
the Company at large.

The Audit Committee grants omnibus approval for the
transactions that are in the ordinary course of business
and repetitive in nature. For other transactions, the
Company obtains specific approval of the Audit
Committee before entering into any such transactions.
All related party transactions are placed before the
Audit Committee on a quarterly basis. The same are
also placed before the Board for seeking their approval.
Further, the Company has not entered into any
transaction of a material nature with the Promoters,
subsidiary of the Company, Directors, Key Managerial
Personnel or their relatives etc. that may have potential
conflict with the interests of the Company.

In line with the requirements of the Act and the
Listing Regulations, the Company has formulated a
Policy on Related Party Transactions and the same
can be accessed on the Company''s website i.e.
www.paragmilkfoods.com ''Policies'' tab under Investors
Section.

PARTICULARS OF LOANS GRANTED, GUARANTEE
PROVIDED AND INVESTMENTS MADE PURSUANT
TO THE PROVISIONS OF SECTION 186 OF THE
COMPANIES ACT, 2013

The loans given, investments made and guarantees
given & securities provided during the year under
review, are in compliance with the provisions of
Section 186 of the Companies Act, 2013 and the Rules
thereunder and the details are provided in the Notes
to the Standalone Financial Statements, forming part
of this Report.

BUY BACK

The Company has not bought back any of its securities
during the Financial Year ended March 31, 2023.

DEPOSITS

There were no outstanding deposits within the
meaning of Sections 73 and 74 of the Act read with the
Companies (Acceptance of Deposits) Rules, 2014, as
amended, at the end of the financial year 2022-23 or
the previous financial year.

Your Company did not accept any deposits during
financial year 2022-23.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN
AT WORKPLACE

In accordance with the provisions of the Sexual
Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 ("POSH Act")
and the rules made there under, your Company has
adopted a Policy (Prevention of Sexual Harassment
Policy a.k.a "POSH Policy").

To build awareness in this area, the Company has been
carrying out online Induction/ refresher programmes
on a periodical basis. All employees (permanent,
contractual, temporary, trainees) are covered under
this Policy. As per the requirement of the POSH Act and
Rules made thereunder, the Company has constituted
Internal Committees to redress complaints received

regarding sexual harassment. All employees are
covered under this Policy and the Policy is gender
neutral. Following is a summary of sexual harassment
complaints received and disposed off during the year:

No. of complaints received : NIL

No. of complaints disposed off : NIL

During the FY 2022-23, the Company has not received
any complaint on sexual harassment.

MANAGEMENT DISCUSSION AND ANALYSIS
REPORT, CORPORATE GOVERNANCE REPORT AND
BUSINESS RESPONSIBILITY & SUSTAINABILITY
REPORT

In terms of Regulation 34 of SEBI Listing Regulations,
a separate section on Management Discussion and
Analysis, Business Responsibility & Sustainability
Report and Corporate Governance Report together
with a certificate from a Practicing Company Secretary
confirming compliance with the Regulations relating
to Corporate Governance of Listing Regulations are set
out and form part of this Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE EARNINGS
AND OUTFLOW

Company continues its efforts to reduce and optimize
the energy consumption at its manufacturing facilities/
offices all over India. Particulars relating to conservation
of energy, technology absorption, foreign exchange
earnings and outgo as required to be disclosed under
Section 134(3)(m) of the Companies Act, 2013 read
with Rule 8(3) of the Companies (Accounts) Rules, 2014
are provided in the prescribed format and is enclosed
as Annexure IV.

ANNUAL RETURN

A copy of the annual return as provided under section
92(3) of the Act, in the prescribed form, which will
be filed with the Registrar of Companies ("ROC")/
Ministry of Corporate Affairs ("MCA"), is hosted on
the Company''s website and it can be accessed
under ''Annual and Compliance Report'' Tab at
https://www.paragmilkfoods.com/investors.php.

PARTICULARS OF EMPLOYEES AND RELATED
DISCLOSURES

The ratio of remuneration of each Director to the
median employees'' remuneration as per Section
197(12) of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014, as amended is disclosed in
"Annexure V" to this report.

In terms of the provisions of Section 197(12) of the
Act, read with Rule 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014, a statement showing the
names and other particulars of employees drawing
remuneration in excess of the limits set out in the said
rules are provided in this Annual Report. In terms of

Section 136 of the Act, this report is being sent to the
Members and others entitled thereto, excluding the
aforesaid annexure. Any Member desirous of obtaining
a copy of the said annexure may write to the Company
Secretary or email to [email protected].

Details of top ten employees in terms of the
remuneration and employees in receipt of
remuneration as prescribed under rule 5(2) of the
Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, as amended,
containing details prescribed under rule 5(3) of the
said rules, which form part of the Directors'' Report, will
be made available to any member on request, as per
provisions of section 136(1) of the Act.

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE
REGULATORS

There were no significant and material orders passed
by the Regulators/Courts that would impact the
going concern status of the Company and its future
operations.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review and in terms of Section
118(10) of the Act, the Company has complied with
Secretarial Standards on meetings of the Board of
Directors ("SS-1") and on General Meetings ("SS-2") as
amended and issued from time to time by The Institute
of Company Secretaries of India.

AUDITORS

• STATUTORY AUDITORS

At the 28^th AGM held on September 29, 2020, the
Members approved appointment of M/s. Sharp &
Tannan, Chartered Accountants, Mumbai (Firm
Registration No.109982W), as Statutory Auditors
of the Company to hold office for a period of five
years from the conclusion of the 28^th AGM till the
conclusion of the 33^rd AGM.

As required under Regulation 33(1) (d) of Listing
Regulations, M/s. Sharp & Tannan, have confirmed
that they hold a valid certificate issued by the
Peer Review Board of the Institute of Chartered
Accountants of India. The Statutory Auditors
have confirmed they are not disqualified from
continuing as auditors of the Company.

The Auditor''s Report for the financial year ended
March 31, 2023 on the financial statements of the
Company forms part of the Annual Report. The
said report was issued by the Statutory Auditor
with an unmodified opinion and does not contain
any qualification, reservation, adverse remark
or disclaimer. During the year under review, the
Auditors have not reported any fraud under
Section 143(12) of the Act and therefore no details
are required to be disclosed under Section 134(3)
(ca) of the Act.

• INTERNAL AUDITORS

Pursuant to provisions of Section 138 of the
Companies Act, 2013 and the rules made
thereunder, on the recommendation of the
Audit Committee the Board of Directors have
appointed M/s. Grant Thornton India, Chartered
Accountants, as Internal Auditors of the Company
for the Financial Year 2022-23. Further, The Board
at its meeting held on August 5, 2023 approved the
appointment of M/s. Deloitte Touche Tohmatsu
India LLP as Internal Auditors of the Company for
FY 2023-24 and FY 2024-25.

At the beginning of each Financial Year, an audit
plan is rolled out after approval of the Audit
Committee. The audit plan is aimed at evaluation
of the efficacy and adequacy of internal control
systems in the Company and compliance thereof
with the same as well as robustness of internal
processes, policies and accounting procedures
and compliance with laws and regulations. Based
on the reports of internal auditor the functional
heads undertake corrective action in their
respective areas.

• COST AUDITORS

As per the requirements of the Section 148 of the
Act read with Rule 14 of the Companies (Cost
Records and Audit) Rules, 2014 as amended from
time to time, the cost records are required to be
audited by a qualified Cost Accountant.

Further, it is hereby confirmed that the Company
has maintained the cost records under Section
148 of Companies Act, 2013 and accordingly such
accounts & records are prepared & maintained by
the Company.

The Board of Directors, upon the recommendation
of the Audit Committee, has re-appointed
M/s. Harshad Deshpande & Associates, Cost
Accountants, Pune (Firm Registration Number:
00378) to conduct audit of the cost records of
the Company for the FY 2023-24. Accordingly, the
Board of Directors recommends to the Members
and the resolution seeking approval of the
members for ratifying the remuneration payable
to the Cost Auditors for FY 2023-24 is provided in
the Notice of the ensuing Annual General Meeting.

During FY 2022-23, the Company has filed the Cost
Audit Report for the FY 2021-22 with the Ministry
of Corporate Affairs on August 17, 2022. The Cost
Auditor''s Report does not contain any qualification,
reservation, adverse remark or disclaimer and no
frauds were reported by the Cost Auditors to the
Company under sub-section (12) of Section 143
of the Act. Therefore, no detail is required to be
disclosed under Section 134 (3)(ca) of the Act.

• SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Act
and Rule 9 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules,
2014, the Company has appointed M/s. N. L. Bhatia
& Associates, Practicing Company Secretaries
(UIN: P1996MH055800), as the Secretarial Auditor
of the Company to conduct audit of the secretarial
records of the Company for the financial year
ending March 31, 2024. The Company has received
consent from Mr. Bhaskar Upadhyay to act as such.

The Secretarial Audit Report for FY 2022-23 in Form
MR-3 is annexed as “Annexure VI" to this Report.

The said Secretarial Audit Report does not contain
any qualifications, reservations or adverse remarks
and no frauds were reported by the Secretarial
Auditors to the Company under sub-section (12) of
Section 143 of the Act therefore no detail is required
to be disclosed under Section 134 (3)(ca) of the Act.
However, the Secretarial Auditors had specified in
their audit report that there was a delay in filing
the Financial Results for FY 2021-22 whereby
Company had paid fine of f0.155 Million to each
Stock Exchange. The response of the Directors was
that the Company had made an application for
waiver of penalty with the Stock Exchange and the
response was still awaited.

COMPARISON OF SHAREHOLDING DATA AS AT THE END OF FY 2022-23 AND PREVIOUS FY 2021-22

The comparison of Category wise shareholding of the Company at the end of FY 2022-23 and FY 2021-22 is given
below for reference of shareholders:

CATE-		AS ON MARCH 31, 2023		AS ON MARCH 31, 2022		% CHANGE DURING YEAR
GORY CODE	CATEGORY OF SHAREHOLDER	TOTAL NO OF SHARES HELD	% OF TOTAL SHARES	TOTAL NO OF SHARES HELD	% OF TOTAL SHARES
(I)	(II)	(III)	(IV)	(V)	(VI)	(VII)
(A)	PROMOTER AND PROMOTER GROUP
(1)	INDIAN
(a)	Individual /HUF	48861435	41.63	38861435	40.75	0.88
(b)	Central Government/State Government(s)	0	0.00	0	0.00	-
(c)	Bodies Corporate	0	0.00	0	0.00	-
(d)	Financial Institutions / Banks	0	0.00	0	0.00	-
(e)	Others	0	0.00	0	0.00	-
Sub-Total A(1) :		48861435	41.63	38861435	40.75	0.88
(2)	FOREIGN
(a)	Individuals (NRIs/Foreign Individuals)	0	0.00	0	0.00	-
(b)	Bodies Corporate	0	0.00	0	0.00	-
(c)	Institutions	0	0.00	0	0.00	-
(d)	Qualified Foreign Investor	0	0.00	0	0.00	-
(e)	Others	0	0.00	0	0.00	-
Sub-Total A(2) :		0	0.00	0	0.00	-
Total A=A(1) A(2)		48861435	41.63	38861435	40.75	0.88
(B)	PUBLIC SHAREHOLDING
(1)	INSTITUTIONS
(a)	Mutual Funds /UTI/ AIFs	4504503	3.84	4511363	4.73	(0.89)
(b)	Financial Institutions /Banks	0	0.00	0	0.00	-

CATE-		AS ON MARCH 31, 2023		AS ON MARCH 31, 2022		% CHANGE DURING YEAR
GORY CODE	CATEGORY OF SHAREHOLDER	TOTAL NO OF SHARES HELD	% OF TOTAL SHARES	TOTAL NO OF SHARES HELD	% OF TOTAL SHARES
(c)	Central Government / State Government(s)	0	0.00	0	0.00	-
(d)	Venture Capital Funds	0	0.00	3133534	3.29	(3.29)
(e)	NBFC Registered with RBI	185250	0.16	500	-	0.16
(f)	Foreign Institutional Investors	12007842	10.23	4260655	4.47	5.76
(g)	Foreign Venture Capital Investors	0	0.00	0	0.00	-
(h)	Qualified Foreign Investor	0	0.00	0	0.00	-
(i) Others		0	0.00	0	0.00	-
Sub-Total B(1) :		16697595	14.23	11906052	12.49	1.74
(2)	NON-INSTITUTIONS
(a)	Bodies Corporate	12968039	11.05	6997454	7.34	3.71
(b)	Foreign Corporate Bodies	6756756	5.76	6756756	7.08	(1.32)
(c)	Individuals
(i) Individuals holding nominal share capital upto Rs.2 lakh		17924289	15.27	17686427	18.54	(3.27)
(ii) Individuals holding nominal share capital in excess of f2 lakh		9275634	7.90	11053267	11.59	(3.69)
(c)	Others
Clearing members		2051683	1.75	456061	0.48	1.27
Non Resident Indians		1037740	0.88	1161747	1.22	(0.34)
Non Resident Indians Non-Repatriation		263591	0.22	319627	0.34	(0.12)
Trusts		1000	0.00	1000	0.00	-
HUF		1362064	1.16	-	-	1.16
(d)	Qualified Foreign Investor	0	0.00	0	0.00	-
Sub-Total B(2) :		51640796	43.99	44432339	46.58	(2.59)
Total B=B(1) B(2) :		68338391	58.22	56338391	59.07	(0.85)
(C)	NON PROMOTER NON PUBLIC
Employee Benefit Trust		176015	0.15	176015	0.18	(0.03)
Sub-Total C :		176015	0.15	176015	0.18	(0.03)
Total (A B C) :		117375841	100.00	95375841	100	-
GRAND TOTAL (A B C) :		117375841	100.00	95375841	100	-

CHANGE IN THE SHAREHOLDING OF TOP TEN EQUITY SHAREHOLDERS OF THE COMPANY AS ON
MARCH 31. 2023:

	Shareholders	As on March 31, 2023		As on March 31, 2022
		Total Shares	% Of Holding	Total Shares	% Of Holding	% Change
1	Devendra Prakash Shah	20206400	17.22	15206400	15.94	1.28
2	Netra Pritam Shah	13867027	11.81	8867027	9.30	2.51
3	Pritam Prakash Shah	9159888	7.80	9159888	9.60	(1.8)
4	AG Dynamic Funds Limited	7392250	6.30	-	-	6.30
5	International Finance Corporation	6756756	5.76	6756756	7.08	(1.32)
6	Poojan Devendra Shah	3295000	2.80	3295000	3.45	(0.65)
7	Sixth Sense India Opportunities III	2702702	2.30	2702702	2.83	(0.53)
8	IDFC Trustee Co. Ltd A/C IDFC Infrastructure Fund	2416569	2.06	3133534	3.29	(1.23)
9	India Insight Value Fund	2265000	1.93	2328000	2.44	(0.51)
10	Priti Devendra Shah	2222820	1.89	2222820	2.33	(0.44)

ACKNOWLEDGEMENTS

Your Directors wish to place on record their deep sense of appreciation for the committed services by your Company''s
employees. Your Directors acknowledge with gratitude, the encouragement and support extended by our valued
shareholder

Your directors place on record their appreciation for the support and co-operation the Company has been receiving
from its suppliers, distributors, retailers, business partners and others associated with it as its trading partner The
Company looks upon them as partners in its progress and has shared with them the rewards of growth.

The Board of Directors also take this opportunity to thank all farmers, consumers, employees, Shareholders, Clients,
Vendors, Banks, Government and Regulatory Authorities and Stock Exchanges, for their continued support.

For Parag Milk Foods Limited

Sd/-

Devendra Shah

Place: Mumbai Chairman

Date: August 5, 2023 (DIN: 01127319)

---

Mar 31, 2018

Dear Members,

The Directors are pleased to present the Twenty Sixth Annual Report of the Company together with the Audited Financial Statements (Standalone and Consolidated), for the financial year ended 31 March, 2018.

FINANCIAL HIGHLIGHTS

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

(Rs. In million)

Particulars	Standalone		Consolidated
	FY 2017-18	FY 2016-17	FY 2017-18	FY 2016-17
Revenue from Operations	19,181.18	17,010.85	19,545.06	17,307.39
Other Income	56.30	86.28	119.98	128.90
Total Income	19,237.48	17,097.13	19,665.04	17,436.29
Profit before Tax before exceptional items	1,076.23	99.58	1,189.58	182.62
Exceptional Items	-	(193.84)	-	(193.84)
Profit from ordinary activities before tax	1,076.23	(94.26)	1,189.58	(11.22)
Less:- Tax expenses	291.43	(76.63)	319.02	(58.78)
Profit After Tax (PAT)	784.80	(17.63)	870.56	47.56
Dividend on equity shares(including tax on dividend) Earnings per Share	75.85	50.62	-	-
Basic	9.36	(0.21)	10.38	0.58
Diluted	9.33	(°.21)	10.35	0.58

Figures for FY2016-17 have been restated as per Ind AS and therefore may not be comparable with financials for FY2016-17 approved by the Directors and disclosed in the financial statement of previous year.

INDIAN ACCOUNTING STANDARD

The Ministry of Corporate Affairs (MCA) on 16 February, 2015, notified that Indian Accounting Standards (Ind AS) are applicable to certain classes of companies from 1 April, 2017 with a transition date of 1 April, 2016. Ind AS has replaced the previous Indian IGAAP prescribed under Section 133 of the Companies Act, 2013 (“the Act”) read with Rule 7 of the Companies (Accounts) Rules, 2014. Ind AS is applicable to the Company from 1 April, 2017.

The effect of the transition from IGAAP and Ind AS has been explained by way of a reconciliation in the standalone financial statements and consolidated financial statements.

RESULTS OF OPERATIONS AND THE STATE OF COMPANY’S AFFAIRS

The Highlights of the Company’s Performance (Standalone) for the Year Ended 31 March, 2018 are as under:

Revenue from operations increased by 12.76% to Rs.19,181.18 million from Rs.17,010.85 million in previous year.

Profit before Tax was Rs.1,076.23 million as compared to a loss of Rs.94.26 million in the previous year.

Profit after Tax was Rs.784.80 million in comparison to a loss of Rs.17.63 million in the previous year.

Financial Performance Review and Analysis (Consolidated)

The Company achieved a consolidated turnover of Rs.19,545.06 million for the year ended 31 March, 2018, resulting in an increase of 12.90%, as compared to Rs.17,307.39 million in the previous year. Increase in revenue is primarily on account of growth in value added products and product mix. Profit after tax on consolidated basis was Rs.870.56 in comparison to Rs.47.56 million in the previous year on account of gross margin expansion and operational efficiency.

DIVIDEND

The Board of Directors is pleased to recommend a final dividend of Rs.0.75/- per equity share of face value of Rs.10/- each for the financial year ended 31 March, 2018 payable to those Member’s whose names appear in the register of Members as on the Record date amounting to Rs.75.85 million (inclusive of dividend distribution tax of Rs.12.93 million.

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

TRANSFER TO RESERVES

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

BUSINESS OVERVIEW

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

Innovation has been an essential driver of the Company’s progress. It has transformed the way the Company meets the consumer demands by consistently introducing innovative products that have re-defining categories. Besides, it has also brought in innovation across its integrated business value chain, strengthening Company’s competitiveness. The Company has built a strong portfolio of value-added products to stay in sync with the evolving consumer preferences.

The financial year 2017-18 was ruled by several innovative and new product launches, line extensions, consumer engagement, supply chain enhancements, brand building and most importantly, an enhanced focus on health and nutrition segment.

To strengthen the company’s presence in north region, we have introduced fresh dahi. With this launch, we have expanded our geographical reach and have entered into Rs.1,500 cr curd market of Delhi. The Northern region contributes ~33% of curd consumption in India.

We have also launched Mishti Doi which is nutritionally rich in protein. We believe the addition of Mishti Doi to our product portfolio will further build up the Gowardhan Dahi category. This traditional Bengali dessert is a delicious way to end every meal.

We have launched Gowardhan Paneer as a fresh paneer category with a shelf life of 75 days and is made from 100 % cows’ milk. It is a rich source of proteins and vitamins. Being the 1st mover, we intend to create Branded category of fresh Paneer and rule the market as category leader. It is unadulterated and despite of 75 days of shelf life, it is free from preservatives and additives. This is the only product which has used ESL technology.

As we call ourselves “The Cheese People” and innovation is in our DNA. We have helped in developing and expanding the cheese market through the launch of several one-of-its-kind products like Cheese slices in the flavours of Green chutney (Mint leaves), Schezwan, Piri-Piri, Cheese spreads in the flavours of Smoked Paprika, Herbs and Olives, Garlic, Spice and Gourmet cheese, amongst others in the past. To continue the legacy, this year, we have launched G0 Cheese Cubes and Go Chocolate Cheese this year. Go chocolate cheese is the unique variant - a product that combines the taste of chocolate in the form of cheese.

With a mix of tasty and healthy, Go Chocolate Cheese is a distinctive product specially introduced to satiate the consumers’ changing preferences, while at the same time to provide nutrition to kids.

‘Go Cheese Cubes’ are creamy, tasty, and are all natural with no preservatives, emulsifiers, artificial colours or flavours, making it suitable even for health conscious consumers. It is a rich in calcium and milk protein. With the launch of ‘Go Cheese Cubes’, our aim is to cater to the growing retail segment by providing a mass-consumption item like cheese cubes, which is versatile in terms of applications. We are confident that this product will help us strengthen our distribution network in tier II & tier III markets where the penetration of cheese is increasing rapidly

In the whey protein segment, the Company widened its product offerings under the Avvatar brand by launching Advance Muscle Gainer. Advanced Muscle Gainer is the 1st Gainer in India to get Informed-Sports certification from WADA approved lab in UK confirming that it is banned substance free making it a perfect product for consumers and athletes.It is a healthy balance of freshest blend of protein and carbohydrates to help consumer gain lean muscle mass. Each 60g scoop offers highest protein (25.5g) in mass gainer segment along with 24g carbohydrates and naturally occurring 5.7g BCAA and 4.3g glutamic acid. It is a right blend of Protein-Carb Matrix - Whey Protein Concentrate and Isolate, Casein, Maltodextrin and Dextrose, specially designed for Indian consumers understanding Indian diet patterns. It has No added sugar which ensures that all the required calories comes from good quality Protein-Carb matrix. It is enriched with 21 vital vitamins and minerals to support overall well-being and growth

To strengthen the presence in north we have acquired the manufacturing unit of Danone Foods and Beverages India Pvt Ltd., the local entity of French dairy firm Danone SA. The acquisition will strengthen the Company’s distribution of fresh category products like milk, dahi, paneer, yogurt in the Northern and Eastern regions of India, which is largely dominated by buffalo milk consumption. This move will bring us closer to the end consumer and will give us an edge to understand the consumer preferences in northern India. The plant is spread across 5,500 square meters on the outskirts of Delhi NCR. Its current milk processing capacity is 0.75 LLPD (lakh litre per day) along with curd processing capacity of 15 tonne. We aim to educate farmers on best practices and help enhance their income. Initially we have associated with over 2,000 farmers (to procure cows milk) and we will keep on adding to these numbers going forward.

During the year, the Company laid strong emphasis on enhancing the supply-chain management and distribution network. The Company also appointed a consulting group to optimise its distribution model through the concept of ‘Theory of Constraints’. It allowed the Company to improve the distribution reach with lower stock outs, reducing non-moving inventory and better rationalisation of inventory at dealers, retailers and the company level. The roll out of SFA (sales force automation) and DMS (distribution management system) will further strengthen the distribution network.

We have also strengthened our leadership team with strategic hirings and created new positions including Chief Operations Officer and Chief Commercial Officer (CCO). All these senior executives are seasoned professionals with long stints in the FMCG sector. As a strategy, we are focusing on becoming a strong national FMCG dairy company and putting more emphasis on growing our consumer business. With the support of the new senior leadership team, we are aiming at a double digit growth this fiscal.

Export Market

PMFL enjoys a strong reputation and brand recall across several geographies through its exports across UAE, Singapore, Oman, Kuwait, Mauritius, New Zealand, Australia, Congo, Seychelles, Iraq, Hong Kong, Philippines, Sri Lanka, UAE and Bangladesh.

During the year, the Company recorded an export turnover of was ? 596.43 million as against ? 568.22 million last year, increasing ~5% during the year.

Bhagyalaxmi Dairy Farm Pvt. Ltd.

Bhagyalaxmi is India’s first modern dairy farm consisting of approximately 2,500 Holstein Frieisan cows, equipped with state-of-the-art technology for feeding, milking and processing of fresh milk. It is PMFL’s subsidiary with a production capacity of approximately 30,000 LPD. It produces “Farm- to-Home” premium milk under the brand name of “Pride of Cows” (POC). Over the years the brand has gained demand from the markets due to its unique characteristics like fresh, untouched and unadulterated milk. Being fully automated without any human intervention the quality and safety of the milk has been accepted by our 20,000 households in Mumbai, Pune and Surat. The farm also operates as a R&D centre for dairy farming in India that educates farmers on best practices in animal feeding, rearing and milking for improving their cows’ productivity. PMFL also created a bioscience division with the aim of converting waste into developing cattle feed and organic manure for farmers.

Future Prospects

The Company enjoys strong partnerships with top institutional buyers in the country and will continue to deliver quality-consistent, customised product requirements.

The Company is bullish about its prospects in the health and nutrition segment. With the launch of its first 100% natural immunity booster called ‘GO Colo Power’ in July 2018, the Company has further strengthened its offerings in the health & nutrition segment, which further reiterates its leadership in the value-added products category.

Colo Power is made from the first milk of cows just after calving and is enriched with immunoglobulins and probiotics and has the same goodness equivalent to that of a mother’s first milk. The colostrum helps to build long-term immunity and improves and strengthens the digestive system.

With the ongoing investments in solidifying the supply chain management, the Company is hopeful of expanding its distribution reach to the untapped markets as well as improve existing distribution efficiency and productivity.

SHARE CAPITAL

During the year under review, there was no change in the Equity Share Capital of the Company.

The Authorised Share Capital of the Company is Rs.1,000,000,000/made up of 100,000,000 Equity Shares of Rs.10/- each, and the Issued, Subscribed and Paid Up Share Capital remains Rs.841,145,820/- made up of 84,114,582 Equity Shares of Rs.10/- each.

The Company has not issued shares with differential voting rights nor granted any stock options or sweat equity during the year under review. None of the Directors of the Company hold instruments convertible into equity shares of the Company.

Material Changes and Commitments affecting the Financial Position of the Company which have occurred Between the end of the Financial Year of the Company to which Date the Financial Statement relate and Date of the Report.

I. During the year, the Company sought approval of Members by way of Special Resolutions through Postal Ballot as required pursuant to Section 110 of the Act read with Rule 22 of the Companies (Management and Administration) Rules, 2014 (the “Act”) for the following Special Resolutions.

1. Re-classification of IRIS Business Solutions Private Limited from Promoter Category to Public Category; and

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

The resolutions were approved by the requisite majority and were deemed to have been passed on Monday, 9 April, 2018.

II. Acquisition of manufacturing plant from Danone Foods and Beverages India Private Limited (“the Seller”) which is part of the global food products multinational corporation headquartered in Paris (hereinafter referred to as “Danone”). The Company has acquired Danone’s factory situated at Plot No. 2266-2268, Food Park Phase -2 HSIIDC Industrial Estate- Rai, Sonipat, Haryana-131029, and proposes to spend additional capex for further expansion to be carried out in it.

SUBSIDIARY COMPANY

As on 31 March, 2018, the Company has one Wholly Owned Subsidiary called Bhagyalaxmi Dairy Farms Private Limited (BDFPL) which is located at Manchar, Pune. BDFPL which is fully automated cow farm, housing over 2,500 Holstein Friesian cows with superior quality yield. BDFPL was established with the aim to educate farmers about best practice of breeding, feeding, animal management and improving productivity.

BDFPL’s total revenue Stood at Rs.832.45 Mn in FY 17-18 in comparison to Rs.517.98 Mn in FY 16-17. BDFPL made Profit After Tax of Rs.85.78 Mn for FY 17-18 in comparison to Rs.65.19 Mn in FY 16-17.

The accounts of the Subsidiary are also uploaded on the website of the Company at www.paragmilkfoods.com

Pursuant to the provisions of Section 129 of the Company’s Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the Subsidiary Company in the prescribed format AOC-1 is appended as Annexure - I to this Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company for the FY 2017-18 are prepared in accordance with the requirements of Indian Accounting Standards AS 110 (read with IND AS 28), issued by, Central Government under section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, the Listing regulations, the Audited Consolidated Financial Statements of the Company forms a part of this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Retirement by rotation and subsequent re-appointment

Pursuant of the provisions of Section 152 of the Act, Mr. B.M.Vyas, Non-Executive Director (DIN-00043804) is liable to retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.

i. Mr. Bharat Kedia resigned w.e.f 10 July, 2017, as Chief Financial Officer (Key Managerial Personnel) of the Company. Pursuant to the recommendation of the Nomination and Remuneration Committee and Audit Committee, Mr. Vimal Agarwal has been appointed as Chief Financial Officer (Key Managerial Personnel) of the Company w.e.f 21 December, 2017.

ii. Mr. Pritam Shah (DIN- 01127247) has been reappointed as Managing Director and Mr. Devendra Shah (DIN-01127319) has been re-appointed as Whole-time Director respectively for a further term of 5 years w.e.f 1 April, 2018 to 31 March, 2023, subject to the approval by the Members in the ensuing AGM.

iii. Mrs. Rachana Sanganeria is the Company Secretary and Compliance Officer of the Company as on 31 March, 2018.

Pursuant to Regulation 36(3) of the Listing Regulations, the brief profile of the Directors eligible for re-appointment forms part of the Notice of the AGM.

DECLARATION OF INDEPENDENCE FROM INDEPENDENT DIRECTORS:

Pursuant to Section 134(3)(d) of the Act, the Company has received declaration from all the Independent Directors confirming that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Regulation 16(1)(b) of the Listing Regulations.

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT.

Appointment and Remuneration of Directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force is available on the website of the Company at www.paragmilkfoods.com.

The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modifications(s) thereof in respect of Directors/ employees of the Company is set out in this report.

No commission was paid during the year to the Managing Director/Whole Time Director from the Company or from its subsidiary company.

ANNUAL EVALUATION OF BOARD’S PERFORMANCE

Pursuant to the provisions of the Companies Act, 2013 read with Rules thereunder and the Corporate Governance requirements as prescribed under Listing Regulations, the Board has carried out an annual evaluation of its own performance and that of its committees as well as the performance of the Directors individually.

The performance of the Board and individual Directors was evaluated by the Board seeking inputs from all the Directors. The performance of the Committees was evaluated by the Board seeking inputs from the Committee Members. The Nomination and Remuneration Committee reviewed the performance of the individual Directors .

A separate meeting of Independent Directors was held on 24 March, 2018 chaired by Mr. Ramesh Chandak, Independent Director, pursuant to Schedule IV of the Act and the Listing Regulations,. This was followed by the Board Meeting that discussed the performance of the Board, its Committees and the Individual Directors.

The criteria for performance evaluation of the Board included composition and structure of the Board & Committee(s), attendance of Directors at Board and committee meetings,participation at meetings, domain knowledge, cohesion in the Board’s meeting, awareness and observance of governance, constructive contribution and inputs in the meetings and decision making process and effectiveness of Board processes etc.

FAMILIARIZATION PROGRAMMES FOR THE INDEPENDENT DIRECTORS

In compliance with the requirements of the Listing Regulations, the Company has put in place familiarization programme for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operate business model etc,. The familiarisation programme for Independent Directors in terms of provisions of Regulation 46(2)(i) of Listing Regulations, is uploaded on the website of the Company at www.paragmilkfoods.com.

MEETINGS OF THE BOARD

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

COMMITTEES OF THE BOARD

There are currently 4 (Four) Statutory Committees of the Board and 1 (one) Non-mandatory committee, as follows:

I. Audit Committee;

II. Stakeholders’ Relationship Committee;

III. Nomination and Remuneration Committee;

IV. Corporate Social Responsibility Committee; and

V. Finance Committee.

During the Financial Year under review, the Board re-constituted some of the Committees in accordance with the Act and the Listing Regulations. Details of all the Committees along with their terms of reference, composition and meetings of each Committee held during the Financial Year are provided in the Corporate Governance Report annexed to the Annual Report, and on the website of the Company at www.paragmilkfoods.com.

AUDIT COMMITTEE

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

The Board has accepted all the recommendations made by the Audit Committee during the year under review.

Buy Back

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

Directors Responsibility Statements

Pursuant to the requirements under Section 134 of the Companies Act, 2013, with respect to the Director’s Responsibility Statements, the Board of Directors of the Company hereby confirms:

a) that in the preparation of the annual accounts for the Financial Year ended 31 March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) t hat the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit and loss of the Company for the Financial Year ended 31 March, 2018.

c) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that the Directors had prepared the annual accounts for the Financial Year ended 31 March, 2018 on a going concern basis; and

e) that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS

The Company had instituted the ESOP Trust in the name of “Parag Milk Foods Employees Stock Option Trust” and the “Parag Milk Foods Limited- Employee Stock Option Scheme 2015” (ESOS 2015) during the Per-IPO period. The ESOS 2015 is in accordance with the SEBI Regulations and the relevant provisions of the Companies Act, 2013 along with the Rules made there under including any amendments made there to or notifications thereof.

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

The ESOS 2015 is administered by the ESOP Trust. 2,27,000 Equity Shares were allotted to the ESOP Trust on 3 September, 2015. The Options were granted to the eligible employees pursuant to the Nomination & Remuneration Committee Meeting on 04 September, 2015. The Nomination & Remuneration Committee on 24 June, 2016 approved vesting of the options in accordance with the ESOS 2015 and conditions of grant based on the Company’s performance during the FY 2015- 2016 and subject to the continued employment of the eligible employees till 3 September, 2016 and that the right to exercise would extinguish on 3 September, 2018.

Details required to be provided under Section 62 of the Companies Act, 2013 and Rule 12(9) of Companies (Share Capital and Debenture Rules, 2014) and SEBI (Share Based Employee Benefits) Regulations, 2014 are set out as Annexure II to this report.

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

RISK & INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company’s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by the Statutory Auditors as well as Internal Auditors and cover all offices, factories and key business areas.

M/s. KPMG (In India), Chartered Accountants, Pune, appointed as Internal Auditors of the Company, conducted Internal Audit for the FY 2017-18 as per the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014. Their reports were reviewed by the Audit Committee and follow-up measures taken wherever necessary.

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

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

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established a vigil mechanism in form of Whistle Blower Policy for Directors and employees to report their genuine concerns about unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct or ethics policy.

The Policy provides for adequate safeguards against victimization of Directors/employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee.

The Whistle Blower Policy has been placed on the website of the Company at www.paragmilkfoods.com

CORPORATE SOCIAL RESPONSIBILITY

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

The report as per Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) on the CSR activities is annexed to this report as “Annexure III”.

CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in ordinary course of business and on arm’s length basis.

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

The Policy on materiality and dealing with related party transactions as approved by the Board is uploaded on the Company’s website and can be accessed at the website at : www.paragmilkfoods.com.

Members may refer to Note 43 to the standalone financial statement which sets out related party disclosures pursuant to Ind AS.

PARTICULARS OF INVESTMENTS, LOANS, AND GUARANTEES

The particulars of Investments, Loans, Guarantees covered under the Provisions Section 186 of the Companies Act, 2013 read with rules made thereunder form part of the notes to the financial statements provided in the Annual Report.

DEPOSITS

During the year under review, the Company has not accepted any deposit within the meaning of Section 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force). The Company has neither accepted nor renewed any deposits during the Financial Year ended 31 March, 2018.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

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

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. The objective of this policy is to lay clear guidelines and provide right direction in case of any reported incidence of sexual harassment across the Company’s offices, and take appropriate decision in resolving such issues.

During the FY 2017-18, the Company has not received any complaint on sexual harassment.

CORPORATE GOVERNANCE

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

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under the Listing Regulations is presented in a separate section, forming part of the Annual Report and provides details of the overall industry structure, developments, performance and state of affairs of the Company’s various business along with internal controls and their adequacy, Risk Management Systems and other material developments during the financial year ended 31 March, 2018.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 134(3)(m) of the Act read with Rule 8(3) of Companies (Accounts) Rules, 2014, the particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act are annexed as “Annexure IV” to this report.

EXTRACT OF ANNUAL RETURN

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

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosure pertaining to remuneration as per Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, the disclosures pertaining to the remuneration and other details are annexed as “Annexure VI” to this Report.

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

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review , the Company has complied with the applicable Secretarial Standards i.e.SS-1 and SS-2, relating to “Meetings of the Board of Directors” and “General Meetings", respectively, issued by The Institute of Company Secretaries of India.

STATUTORY AUDITORS

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

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

There is no qualification or adverse remark in Auditors’ report. There is no incident of fraud requiring reporting by the auditors under Section 143(12) of the Companies Act, 2013.

COST AUDITORS

The Board of Directors of the Company in its Board Meeting held on 09 May, 2018, on recommendations made by the Audit Committee have reappointed M/s. Harshad Deshpande & Associates, Cost Accountants, Pune (Firm Registration Number: 00378) as the Cost Auditors of the Company to conduct the cost records for the FY 2018 -2019. In terms of the provisions of Section 148(3) of the Companies Act, 2013, read with Companies (Audit and Auditors) Rules, 2014, as amended, the remuneration payable to the Cost Auditors has to be ratified by the Members of Company. Accordingly, recommends to the Members, the resolution as stated in Item No. 6 of the Notice convening the ensuing AGM.

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

SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. N. L. Bhatia & Associates, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company for the financial year 2017-18. The Secretarial Audit Report in Form MR-3 is annexed as “Annexure - VII” to this Report.

The Secretarial Audit Report for the financial year ended 31, March, 2018 does not contain any qualification, reservation, adverse remark in their report.

ACKNOWLEDGMENTS

Your Directors wish to place on record their sincere appreciation for the assistance and support extended by the employees, shareholders, customers, financial institutions, banks, vendors, dealers, the Central and State Governments and others associated with the activities of the Company. We look forward to their continued support in future. Your Company takes pride in its highly motivated employees, workers, staff and wishes to place on record its deep sense of appreciation for their committed services and best contribution towards growth and success of your Company.

For and on behalf of the Board of Directors

Devendra Shah

Place: Mumbai Executive Chairman

Date: 9 May, 2018 (DIN: 01127319)

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Mar 31, 2017

Dear Members,

The Directors are pleased to present the Twenty Fifth Annual Report on the business and operations of your Company together with the Audited Financial Statements for the year ended March 31, 2017.

FINANCIAL HIGHLIGHTS

The comparable financial performance of the Company (Standalone & Consolidated) for the Financial year 2016-201 7 is summarized as under:

(Rs, In Millions)

Particulars	Standalone		Consolidated
	FY 2016-2017	FY 201 5-2016	FY 2016-2017	FY 201 5-2016
Total Revenue	17,078.09	16,243.85	17,417.26	16,467.49
Earnings before interest, Depreciation and Tax	1,078.26	1 503.87	1191.51	1497.49
Less :- Depreciation	472.63	317.25	489.63	333.88
Less - Interest	328.06	487.15	332.76	495.72
Profit before Tax	277.57	699.47	369.12	667.89
Less - Tax expenses	(16.46)	174.38	4.02	194.71
Profit After Tax (PAT)	100.19	525.09	171.26	473.18
Balance brought forward from previous year	1,247.80	1,068.56	1,086.70	959.38
Less:- Appropriations
a) Transfer to Debenture Redemption reserve	(4.50)	(4.50)	(4.50)	(4.50)
b) Bonus share issued	-	(341.35)	-	(341.35)
c) Minority Interest	-	-	-	-
Balance carried forward to Balance-Sheet	1,343.49	1,247.80	1,253.46	1,086.70
Earnings per Share
- Basic	1.22	8.01	2.08	7.22
- Diluted	1.22	8.01	2.08	7.22

OVERVIEW OF COMPANY PERFORMANCE

In the current economic environment despite demonetization and subdued rural demand where in business had slowed down, your company achieved a sales growth of 5.14% during the year; your Company registered a total income of Rs, 1 7,078.09 Million in the Financial Year 2016 -201 7 as compared to Rs, 16,243.85 Million of the previous year. The Company has made Profit before tax (PBT) of Rs, 277.57 Million on standalone basis for the year under review as compared to Rs, 699.47 Million for the previous year, the decrease was mainly on account of increase in raw material prices which the Company was partially able to pass to the customers.

DIVIDEND AND RESERVES

Your Directors are pleased to recommend a dividend at a Rs, 0.50 per equity share of face value of Rs, 10/- (i.e. 5%) out of the profits of the financial year ended March 31, 2017 on 841,14,582 of Rs, 10/- each fully paid up equity shares, if approved by the members in the ensuing Annual General Meeting.

During the year under review, your Company transferred a sum of Rs, 4.50 Million to the Debenture Redemption Reserve.

During the year under review, no amount from profit was transferred to General Reserve.

BUSINESS OVERVIEW

Your Company is a leading manufacturer and marketer of dairy-based branded food products in India commencing business in 1992 with collection of milk and distribution of milk.

Your Company''s focus is now in transforming itself into a "Dairy FMCG Company" with focus on "Health and Nutrition" and this will be through a multi brand strategy. Your Company''s integrated business model gives it a strong edge over dairy companies, with diverse manufacturing capabilities of products like cheese, ghee, fresh milk, whey proteins, paneer, curd, yoghurt, milk powder and dairy based beverages targeting a wide range of consumer groups through several brands under the flagship brands "GOWARDHAN" "GO" "TOPP UP" " MILK RICH" and "PRIDE OF COWS"

Your Company''s focus has been product innovations and towards that effect we expanded our cheese slice range last year with flavours like Piri Piri, chutney cheese, Kachha Aam, Schezwan and Acchari and other product categories like Pre-mix with Go Easy Shake and relaunched our dairy whitener under Milk Rich brand name Continuing our Endeavour of strengthening our brand communication, we launched the new communication for Ghee with the theme of "Pyar ka Rang Sunhera" with the philosophy of owning the golden colour of cow ghee. The high point of the campaign was the Mother''s Day video which created new records in terms of viewership.

Gowardhan Ghee has for the 2^nd year in succession been awarded the most trusted brand in ghee category with "Brand Trust" and has infact moved 132 notches up in the overall ranking of brands across categories.

Your Company''s focus on Cheese category continues and towards that Endeavour we launched a new campaign with 5 new films with Celebrity Vir Das with focus on the new flavours of Cheese Slice.

"Cheese Lover''s Day" is one more property that we have created and started owning the same with specific campaign led by social media and print which has helped in enrolling newer consumers to the category of cheese.

Our distribution expansion continues as per plan with 4 new depot locations being added and super stockiest up to 120 catering to over 3000 distributors who in turn cater to more than 2.5 lakh outlets directly.

Your company''s Route to Market strategy is further strengthened with beverages business focus on point of consumption outlets and expansion of Horeca segment at a rapid pace.

During the year, your company has also expanded distribution of fresh milk in upcountry Tamil Nadu market.

Our manufacturing facilities are being further strengthened with capacity expansion in Cheese and Paneer as per plan in Manchar.

Your Company''s building new capabilities and robust pipeline of innovations resulted in new launches in the form of "GO Easy Shake", "GO Cheese Slice" in new flavors suited for Indian palate and "Milk Rich" and other innovative products coupled with leading edge route to market strategy, while building brand differentiation and relevance.

Export Market

Your Company has presence in the international markets like UAE, Singapore, Oman, Kuwait, Mauritius, New Zealand, Australia,

Congo, Seychelles, Iraq. Company has extensive Cheese demand from international market and supplying bulk Cheese to Philippines, Sri Lanka, UAE and Bangladesh. During the year the Company''s Export of consumer products increased by 79 % as compared to the year 2015 - 16. The total export sale for financial year was Rs, 568 Million against Rs, 318 Million last year.

Company has participated in Overseas Exhibitions Gulfood 2017 and Food Moscow in year 2016 -17. Your company has extended its market in new Territories including USA, Qatar, Saudi Arabia, etc.

Future Prospects

The distribution expansion focus now shifts to building cold chain distribution in top 100 cities with focus on Paneer and Cheese.

The distribution capabilities are being further enhanced with roll out of SFA (Sales force automation) and DMS (Distribution management system) which will help with real time data on secondary sales.

This coupled with our association with a consulting firm "Vector Consulting" will help build supply chain and logistics capabilities at the back end and distribution capabilities in the front end. This project is specifically based on the concept of "Theory of Constraints" and will help in driving efficiencies in the entire system.

With our core objective of building our business around "Health & Nutrition" we are working on new horizon categories like sports nutrition where your company is launching "Avvatar" whey powder.

Along with this, we are working on launching protein powders for the mass and whey drinks as well.

One more category where your company wants to focus is the fruit drink market but with a differentiated product offering. Your company is entering this market with a new brand "Slurp" which is a mango fruit based beverage with a dash of milk.

Our marketing approach towards brand building with 360-degree approach continues with focus on digital medium and that''s the new way of working for your company and it is yielding results reflected in the brand health scores that we track on our brands.

The above initiatives being dovetailed with focus on operational efficiencies being built at plant level, marketing initiatives to build brands and focus on quality distribution expansion and capability building of the sales team would help build the consumer business with accelerated pace.

SHARE CAPITAL

The Paid Up Capital of the Company as on March 31, 2017 stood at '' 841,145,820/-. Your Company had during the year raised '' 3,000 Million through fresh issue of 136.99 Million equity shares. The Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity during the year under review. None of the Directors of the Company hold instruments convertible into equity shares of the Company.

DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS

The Company had instituted the ESOP Trust in the name of" Parag Milk Foods Employees Stock Option Trust" and the "Parag Milk Foods Limited- Employee Stock Option Scheme 2015" (ESOS 2015) in April, 2015 pursuant to resolutions dated February 27,

2015 and April 21, 2015 passed by the Board of Directors and the resolutions dated April 3, 2015 and May 16, 2015 passed by the Shareholders. The ESOS 2015 is compliant with the SEBI (Share Based Employee Benefits) Regulations, 2014 and the relevant provisions of the Companies Act 2013 along with the Rules made there under including any amendments made there to or notifications thereof.

The ESOS 2015 is administered by the ESOP Trust, 227,000 Equity shares were allotted to the ESOP Trust on September 3, 2015. The Options were granted to the eligible employees pursuant to the Nomination & Remuneration Committee meeting on September 04, 201 5. The Nomination & Remuneration Committee on June 24, 2016 approved vesting of the options in accordance with the ESOS 2015 and conditions of grant based on the Company''s performance during the financial year 2015

2016 and subject to the continued employment of the eligible employees till September 03,2016 and that the right to exercise would extinguish on September 03, 2018. Details required to be provided under section 62 of the Companies Act, 2013 and Rule 12(9) of Companies (Share Capital and Debenture Rules, 2014) and SEBI (Share Based Employee Benefits) Regulations, 2014 are set out in the Annexure - II to this report

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENT RELATE AND THE DATE OF THE REPORT

There are no material changes and commitments affecting the financial position of the Company which have occurred subsequent to close of the financial year and the date of this report

FIXED ASSETS & CAPITAL EXPENDITURE

Your Company has significantly enhanced the capacity built up by way of capital expenditure in plant and machinery at Manchar and Palamaner plant from time to time. The Company has made additions amounting to '' 588.39 Million as on March 31, 2017 as against additions of '' 891.26 Million as on March 31, 2016 in the Gross block of Fixed Assets for the year ended March 31, 2017.

RESPONSIBILITY STATEMENT

Pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the Directors hereby confirm that;

(a) i n the preparation of the annual accounts for the financial year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for the year ended March 31, 2017.

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts for the financial year ended March 31, 2017 on a going concern basis; and

(e) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

BOARD EVALUATION & INDEPENDENT DIRECTORS MEETING

Pursuant to the provisions of the Companies Act, 2013 read with the Rules issued there under, Regulation 17 (10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "Listing Regulations") a structured questionnaire was prepared after taking into consideration the various aspects of the Board''s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of the Board, its Committees, Independent Directors, Chairman and Individual Directors was conducted and the same was based on questionnaire and feedback from all the Directors on the Board as a Whole, its Committees and self-evaluation.

Based on the Questionnaire and feedback, the performance of every Director was evaluated by the Nomination and Remuneration Committee (NRC). The Board of Directors expressed their satisfaction with the evaluation process.

A separate meeting of the Independent Directors ("Annual ID Meeting) was convened on March 20, 201 7, which reviewed the performance of the Board (as a whole), the non-independent director and the Chairman. Post the Annual ID Meeting, the Collective feedback of each of the Independent Directors was discussed by the Chairperson of NRC with the Board covering performance of the Board as a whole, performance of the no independent directors and performance of the Chairman.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company are prepared in accordance with relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India and forms an integral part of this Report.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries/Associate Companies/Joint Ventures is given in Annexure-I in Form AOC-1 and forms an integral part of this Report.

SUBSIDIARY COMPANY

As on March 31, 2017 the Company has one Wholly Owned Subsidiary called Bhagyalaxmi Dairy Farms Private Limited (BDFPL) which is located at Manchar, Pune District BDFPL which is fully automated cow farm housing over 2000 Holstein breed cows with superior quality yield. BDFPL was established with the aim to educate farmers about best practice of breeding, feeding, animal management and improving productivity.

The total revenue was '' 517.98 Million in FY 16-17 in comparison to '' 442.05 Million in FY 15-16 projecting a rise by 17.2%, Company made profit with a PAT of '' 71.05 Million for FY 16-17 in comparison to a loss in the previous year.

Bhagyalaxmi produces "Farm- to- Home" premium milk under the brand name of "Pride of Cows" (POC). The farm is equipped with the finest international technology for feeding, milking and processing, being fully automated without any human intervention, ensuring quality and safe milk. POC is premium milk, fresh, untouched, unadulterated milk, catering to three cities Mumbai, Pune and Surat.

Bhagyalaxmi Bioscience Division has introduced certified organic fertilizers through the commercialization of cow manure and cow urine into value added products. Bhagyalaxmi has launched the following products during the year under review.:

1. MicroRich - Organic slurry released as a by-product from the Biogas plant which is 100% organic and natural and rich in plant nutrients, increases resistance against pests & diseases.

2. Agrifeed - prepared from pure cow dung -increases the moisture storage capacity of the soil and makes the soil smooth & healthy, reduces cost of fertilization useful for all kinds of crops, improves soil fertility & soil productivity, safe for soil micro flora.

3. Goldmine - produced by co-composting high-grade phosphate rock with organic waste.

4. Nutricane - Helps to improve the production and productivity of the sugarcane crop. Improves water and nutrients uptake, reduces the use of chemical fertilizers

In compliance with Section 129 of the Companies Act 129 of the Companies Act, 2013 and Rule 8(1) of the Companies (Accounts) Rules, 2014, the Board''s Report has been prepared on standalone financial statements and a report on performance and financial position of its subsidiary company is included in the financial statements

DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP)

Your Board currently comprises of 8 Directors including 5 Independent Directors, 2 Executive Directors and 1 Non- Executive Director. Independent Directors provide their declaration both at the time of appointment and annually confirming that they meet the criteria of independence as prescribed under Sec 149 and 152 of Companies Act, 2013.

Pursuant to Sections 196, 197, 198 and Schedule V of the Companies Act 2013 shareholders'' approval by special resolution is sought at this AGM for revision of remuneration of Mr. Devendra Shah Chairman and Mr. Pritam Shah Managing Director of the Company pursuant to schedule V as amended of the Companies Act, 2013.

In accordance with Section 152 of the Companies Act 2013 and the Articles of Association, Mr. Devendra Shah, Chairman of the Company retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends his re-appointment for consideration of the Members of the Company at the ensuing Annual General Meeting.

All Independent Directors have given declarations that they meet the Criteria of independence as laid down under Section 149(6) of the Companies Act 2013 and Regulation 16 of the Listing Regulations.

The Following continue to be the "Key Managerial Personnel" pursuant to the provisions of section 203 of the Companies Act 2013.

Mr. Devendra Shah as Chairman and Whole Time Director

Mr. Pritam Shah as the Managing Director

Mr. Bharat Kedia as Chief Financial Officer

Ms. Rachana A. Sanganeria as Company Secretary and

Compliance Officer

RISK MANAGEMENT & INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company recognizes that risk is an integral component of business and is committed to managing the risk in a proactive and effective manner.

The Company recognizes the importance of maintaining a good system of risk management and internal controls to safeguard shareholders'' investment and the Company''s assets. The Board acknowledges its overall responsibility for reviewing the adequacy and integrity of the Company''s system of risk management and internal control, identifying principal risks and establishing an appropriate control environment and framework to manage risks and evaluating the Company''s operational effectiveness and efficiency. Pursuant to section 134 (3) (n) of the Companies Act, 2013, the Company has in place an Enterprise Risk Management policy.

1. To ensure that all the current and future material risk exposures of the Company are identified, assessed, quantified, appropriately mitigated, minimized and managed i.e. to ensure adequate systems for risk management.

2. To establish a framework for the company''s risk management process and to ensure its implementation.

3. To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices.

4. To assure business growth with financial stability.

5. Safeguard the Company''s property, interests, and interest of all stakeholders.

6. Evolve the culture, processes and structures that are directed towards the effective management of potential opportunities and adverse effects, which the business and operations of the Company are exposed to.

7. Balance between the cost of managing risk and the anticipated benefits.

8. To create awareness among the employees to assess risks on a continuous basis & develop risk mitigation plans in the interest of the Company.

9 Provide a system for setting of priorities when there are competing demands on limited resources.

The objective of this policy is also to manage the risks involved in all activities of the Company to maximize opportunities and minimize adversity. This policy is intended to assist in decision making processes that will minimize potential losses, improve the management of uncertainty and the approach to new opportunities, thereby helping the Company to achieve its objectives.

Pursuant to Section 134(5)(e) of The Companies Act, 2013 the Company has in place an elaborate internal control system commensurate with the size and nature of its business and size and complexity of its operations. The primary objective of the Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations to ensure proper authorization and accounting of transactions as also for safeguarding and protecting Company''s assets and that all assets and resources are acquired economically, used efficiently & adequately protected and to prevent any revenue leakage and losses to the Company against loss. Pursuant to Section 138 of the Companies Act, 2013 the Company has appointed M/s. KPMG (in India) as Internal Auditors of the Company The internal auditors'' reports are periodically reviewed by the management and the Audit Committee and necessary corrective actions are taken from time to time The Audit Committee submits its periodical report to the Board about the measures taken for mitigation of Risk in the organization.

NUMBER OF MEETINGS OF THE BOARD:

The Board meets at regular intervals to discuss and decide on Company''s business policies and strategy apart from other Board businesses. A notice of the Board Meeting is circulated well in advance with the agenda which includes the detailed annexure/ notes to be discussed to enable the Board to take an informed decision. The Board met four times during the year, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the Listing Regulations.

COMMITTEES OF THE BOARD

The Board of Directors has the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee (NRC)

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee (CSR)

5. Finance Committee

The details of the Committees along with the composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.

UTILIZATION OF IPO PROCEEDS

The Company had come out with an IPO and was listed in May 201 6,wherein the Company had raised Rs, 3000 million. As per the terms set out in the prospectus filed with the Registrar of Companies, Pune, the Company proposed to utilize the net proceeds to meet (i) the capital expenditure requirement in relation to expansion and modernization of existing manufacturing facilities of the Company at Manchar and Palamaner and improving the marketing/distribution infrastructure for both Manchar and Palamaner plant, (ii) to invest in the wholly owned Subsidiary of the Company Bhagyalaxmi Dairy Farms Pvt. Ltd, for financing the capital expenditure requirements in relation to the expansion and modernization of the Bhagyalaxmi Dairy Farms

(iii) to make partial repayment of the Working Capital Consortium Loan of Rs, 1000 Million, which has been repaid as on March 31, 2017 and (iv) for General corporate purposes.

Please refer note 44 to the notes to accounts to financial statements as annexed to the report for details in relation to utilisation of IPO proceeds.

The unutilized amount of the issue as at March 31, 2017 has been temporarily been deployed in fixed deposits with banks.

DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL

The Sales Tax Authorities had pursuant to section 64 of MVAT Act, conducted an investigation at the offices of M/s. Parag Milk Foods Limited ("the Company") at the Registered office at Pune, Company''s Plant at Manchar and the Corporate Office at Nariman Point. The Sales Tax Authorities have conducted inspection starting from financial year 2012-2013 and identified some transactions in relation to the consignment agent which were made by the Company for interstate transfer of goods and suggested the Company to reclassify the said transactions of goods under local sales.

The Company has provided the fullest co-operation to the Department to complete the enquiry and provided the information sought by them. The Company had filed revised returns and agreed to pay the additional tax liability on reclassification as suggested by the authorities. There was no implication on the continued operations of the Company as a result of this visit.

There are no significant and material orders passed by the Regulators/ Courts that would impact the going concern status of the Company and its future operations.

EXTRACT OF THE ANNUAL RETURN

The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure-V and is attached to this Report.

PARTICULARS OF INVESTMENTS, LOANS, AND GUARANTEES

The particulars of Investments, Loans, Guarantees covered under the Provision Section 186 of the Companies Act, 2013 read with rules made there under are given in the Note No. 14, 20 and 31 of Standalone Financial Statements..

POLICIES OF THE COMPANY

The Company is committed to good corporate governance and has consistently maintained its organizational culture as a remarkable confluence of high standards of professionalism and building shareholder equity with principles of fairness, integrity and ethics.

The Board of Directors of the Company have from time to time framed and approved various Policies as required by the Companies Act, 2013 read with the Rules issued there under and the Listing Regulations. These Policies and Codes are reviewed by the Board and are updated, if required. Some of the key policies adopted by the Company are as follows:

Sr. No	Policies
1. Policy on Determination of materiality of events/ information
2.	Code of Conduct for Board Members and Senior Management Personnel
3.	Policy on Preservation and Archival of Documents
4.	Prevention of Insider Trading Policy
5.	Whistle Blower Policy
6.	Policy on Related Party Transactions
7.	Policy on Materiality of Subsidiaries
8.	Policy on Nomination & Remuneration
9.	Policy on Board Diversity
10.	Policy on Familiarization Programme of Independent Directors
11. Corporate Social Responsibility Policy
12.	Policy on Prevention of Sexual harassment policy

The above mentioned policies are also available on the website of the Company www.paragmilkfoods.com.

CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES- SECTION 188 OF THE COMPANIES ACT 2013

All transactions entered with Related Parties for the year under review were on arm''s length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 and the Rules made there under are not attracted. Thus, disclosure in form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. The Company has proper systems for the purpose of identification and monitoring of such Related Party Transactions.

All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. Omnibus approval was obtained on a yearly basis for transactions which are of repetitive nature. Transactions entered into pursuant to omnibus approval are placed before the Audit Committee and the Board for review and approval on a quarterly basis.

The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company viz www.paragmilkfoods.com

INFORMATION TECHNOLOGY

Parag Milk Foods has been leveraging the Information Technology and IT enabled services for business process automation and transformation across various functions, internal and external stakeholders. Modern Technology is used at every stage to give advantage to Business by process of exchange of information in a faster and safer way.

Information Technology is used for collection the Milk even at Remote village level and data is updated on Real Time basis to Central System which is used for planning purpose. Production is managed through Programmable Logic controllers which are used to control and Monitor the process flow, giving the correct information of right mix helping in maintaining quality of the products.

Enterprise Resource Planning System is used to control and monitor all the Business transactions. Sales Force Automation and Distributor Management System are also used to manage the Sales Force and provide better visibility of the Market to Management.

Parag Milk Foods Limited is Progressing in a planned manner to promote more usage of system and automating the processes and thus processing towards paperless movement and enabling Greener Future.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your company always believed in and worked towards "inclusive growth''- improving the quality of life of the people we touch and in the communities where we operate. The CSR committee was constituted by the Board of Directors of the Company at its meeting held on June 23, 2014 and re-constituted on May 26, 2015, July 28, 201 5 and November 09, 201 7.

The CSR Committee of the Board of Directors of the Company Consists of 3 Members viz.

1. Mr. B.M. Vyas- Non-Executive Director - Chairman

2. Mr Devendra Shah-Executive Chairman - Member,

3. Ms. Radhika Pereira-Independent Director - Member,

4. Mr. Narendra Ambani - Independent Director - Member, was appointed in Board Meeting held on November 09, 201 7.

The following CSR Activities have been conducted during: 2016-17.

(Rs, In Million)

1.	A brief outline of the Company''s CSR Policy including overview of Projects or programs proposed to be undertaken and a reference to the web-link to the CSR Policy and projects or programs and the Composition of CSR Committee.	CSR Policy is available for inspection by Members of the Company
2.	Average net profit of the Company for last three financial years	399.26
3.	Prescribed CSR expenditure (two percent of the amount mentioned in item 2 above)	7.99
4.	Details of CSR spent during the financial year.	12.38
5.	Total amount to be spent for the financial year	7.99

MANAGEMENT''S DISCUSSION AND ANALYSIS

Sr. No.	CSR Projected or Activity Identified	Sector in which the projects is covered	Project of Program	Amount outlay (Budget) project or wise (Rs, In Mn)	Amount spent on the projects of programs (Rs, In Mn)	Cumulative Expenditure up to the Reporting period i.e. FY 16-17 (Rs, In Mn)	Amount spend direct or through implementing agency
1.	Designing & construction of toilets, women rehabilitation & empowerment, adding Advasi, children, students, weaker section, senior citizen providing medical & educational help, sanitation, health program,community development etc	Health Care, education., empowerment of women	Maharashtra	11.50	11.50	11.50	Through Gurukrupa Vikas Sanstha a nonprofit voluntary organisation
2.	Medical camp organized at Manchar	Health Care	Maharashtra	0.88	0.88	0.88	Direct

The Management Discussion and Analysis Report on the operations of the Company, as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in a separate section and forms an integral part of this Report.

CORPORATE GOVERNANCE

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on corporate governance practices followed by the Company, together with a certificate from the Practicing Company Secretary confirming compliance forms an integral part of this Report

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure III.

DEPOSITS

During the year under review, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force); The Company has neither accepted nor renewed any deposits during the year ended March 31, 2017.

BUY BACK

The Company has not bought back any of its securities during the year ended March 31, 2017.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) amendment(s) / re-enactment thereof, for the time being in force) is furnished in an Annexure IV which forms part of this Report.

Particulars of employee''s remuneration, as required under section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, are not attached with this report since there was no employee who was in receipt of remuneration in excess of aggregate of '' 12 million during the year if employed throughout the financial year of '' 0.85 million per month in the aggregate if employed for part of the year.

No commission was paid during the year to the Managing Director/Whole Time Director from the Company or from its subsidiary company.

Indian Accounting Standards (Ind AS)

The Company has adopted Indian Accounting Standards (Ind AS) with effect from 1st April, 2017 pursuant to Ministry of Corporate affairs notification of the Companies (Indian Accounting Standards) Rules , 2015.

AUDITORS'' REPORT

There are no qualifications, reservations or adverse remarks made by the Auditors in their report.

STATUTORY AUDITORS

The Statutory Auditor, M/s Haribhakti & Co, LLP, Chartered Accountants, Pune (Firm Registration No. 103523W / W100048) who hold office till the conclusion of the ensuing Annual General Meeting and on recommendation of the Audit Committee and Board are recommended for re-appointment to hold office from the conclusion of this Annual General Meeting until the conclusion of Annual General Meeting of the Company for FY 2019-2020, subject to ratification by members at every Annual General Meeting. The Company has received under Section 139(1) of the Companies Act, 2013 and the Rules framed hereunder, a certificate of their eligibility and consent for re-appointment.

COST AUDITORS

M/s Harshad Deshpande & Associates, Cost Accountants were appointed as the cost auditors of the Company for the year ended March 31, 2016. On recommendation of the Audit Committee the Board of Directors propose the appointment of M/s. Harshad Deshpande & Associate, Cost Accountant as the Cost Auditors of the Company for the Financial Year 201 7 -2018. The Cost Auditors have confirmed that they are not disqualified for such re-appointment within the meaning of Section 148 of the Companies Act 2013.

SECRETARIAL AUDIT

In terms of Section 204 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. N.L. Bhatia & Associates, a firm of Company Secretaries in Practice as the Secretarial Auditor to undertake the secretarial audit, for the financial year 2017-18.

The Secretarial Audit Report for the financial year ended March 31, 2017 is set out in the Annexure VI to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

None of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143 (12) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

ACKNOWLEDGEMENTS

Your Company and its Board of Directors would like to express their sincere appreciation for the assistance, support and cooperation received from Government, regulatory authorities, stakeholders, vendors, financial institutions, banks, investors, customers, service providers and members during the year. Your Company takes pride in its highly motivated employees, workers, staff and wishes to place on record its deep sense of appreciation for their committed services and best contribution towards growth and success of your Company,

FOR AND ON BEHALF OF THE BOARD

Sd/-

DEVENDRA SHAH

CHAIRMAN

Place: Mumbai

Date: May 29, 201 7

---

Mar 31, 2016

The Directors are pleased to present the Twenty Fourth Annual Report of your Company together with the Audited Statement of Accounts and the Auditors'' Report of your Company for the financial year ended March 31, 2016. The summarized results for Standalone & Consolidated accounts for the year ended March 31, 2016 are as under.

FINANCIAL HIGHLIGHTS

The comparable financial performance of the Company (Standalone & Consolidated) for the Financial 2015-2016 is summarized as under:

(Rs. In millions)

Particulars	Standalone		Consolidated
	FY 2015-2016	FY 2014-2015	FY 2015-2016	FY 2014-2015
Total Revenue	16,243.85	14,270.45	16,467.49	14,456.69
Earnings before interest, Depreciation and Tax	1,498.56	1,078.08	1492.19	1087.18
Less :- Depreciation	317.25	254.17	333.89	275.33
Less:- Interest	481.84	454.34	490.41	469.20
Profit before Tax	699.47	369.57	667.89	342.65
Less:- Tax expenses	174.38	3.93	194.71	20.56
Profit After Tax (PAT)	525.09	365.64	473.18	322.09
Balance brought forward from previous year	1,068.56	719.65	959.38	655.16
Less:- Appropriations	-	-	-	-
a) Proposed Dividend (including tax on dividend)	-	-	-	-
b) Transfer to General Reserve	-	-	-	-
c) Accumulated Depreciation	-	(3.22)	-	(4.44)
d) Transfer to Debenture Redemption reserve	(4.50)	(13.50)	4.50	(13.50)
e) Bonus share issued	(341.35)	_	(341.35)	-
f) Minority Interest	-	-	-	0.07
Balance carried forward to Balance-Sheet	1247.80	1068.56	1086.70	959.38
Earnings per Share
-Basic	8.01	6.29	7.22	5.54
-Diluted	8.01	5.30	7.22	4.67

OVERVIEW OF COMPANY PERFORMANCE

In the current economic environment, wherein revenue growth in the FMCG sector has slowed down, your Company achieved a sales growth of 13.84% during the year; your Company registered a total income of Rs.16, 243 Million in the Financial Year 2015 -2016 as compared to Rs.14, 270 Million of the previous year. The Company has made Profit before tax (PBT) of Rs.699.47 Million on standalone basis for the year under review as compared to Rs.369.57 Million for the previous year registering an increase of 89.26%, this was mainly due to increased sale of value added products and favorable raw material price which enhanced the margins despite the pressure of reduction in selling price of Skimmed Milk Powder (SMP).

Your Company has successfully listed itself on BSE Limited (BSE) and National Stock Exchange of India Limited on 19th May, 2016 and raised Rs.3, 000 Million through fresh issue of 136.99 Million equity shares, which will be mainly utilized towards CAPEX amounting to Rs.1, 500.0 Million and Rs.1, 000 Million will be utilized for part repayment of working capital facilities taken from the existing bankers. Your Company has issued shares based on the Issue price given below.

1. Issue price for HNIs and QIBs (excluding anchor investors): Rs.215 per Equity Share, including a share premium of Rs.205 per Equity Share (the "Issue Price");

2. Issue price for eligible employees: Rs.203 per Equity Share (post discount of Rs.12 to the Issue Price), including a share premium of Rs.193 per Equity Share;

3. Issue price for retail individual investors: Rs.203 per Equity Share (post discount of Rs.12 to the Issue Price), including a share premium of Rs.193 per Equity Share; and

4. Anchor investor issue price: Rs.227 per Equity Share, including a share premium of Rs.217 per Equity Share

BUSINESS OVERVIEW

Your Company is a leading manufacturer and marketer of dairy-based branded foods in India. Your Company commenced business in 1992 with collection and distribution of milk and has now developed into a dairy based branded consumer products Company with an integrated business model, manufacturing a diverse range of products including cheese, ghee, fresh milk, whey proteins, paneer, curd, yoghurt, milk powder and dairy based beverages targeting a wide range of consumer groups through several brands under the flagship brands "GOWARDHAN" "GO" "TOPP UP" and "PRIDE OF COWS".

Our manufacturing facilities are strategically located at Manchar in the Pune district of Maharashtra and Palamaner in the Chittoor district of Andhra Pradesh, which have a high population of dairy cows, with milk processing capacities of 1.2 million litres per day and 0.8 million litre per day, respectively.

During the year, your Company focused on product innovations, brand building and distribution to grow faster than the market. Your Company''s brands have become iconic over time due to combination of superior products and enduring communication. Your Company has good supply chain network which includes procurement from 29 districts across Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu, through over 3400 village level milk collection centre’s. The Company procures milk from milk farmers and through chilling centers’ and bulk coolers. The average daily milk procurement for the financial year 2015-2016 is 10.40 lakhs litres. We have an extensive sales and distribution network which covers 15 depots, 104 super-stockists and over 3000 distributors as on 31st March, 2016, spread across most states and union territories in India. We also have dedicated sales and marketing team comprising more than 500 personnel based in the key distribution centre. Some of our leading institutional customers include leading restaurant and cafe chains such as ''Yum''! Restaurant, (for ''Pizza Hut'', ''Taco Bell'' and ''KFC'') Jubilant Food works Limited (for ''Domino''s Pizza'') and Sankalp Recreation Private Limited (for ''Sam''s Pizza'').

Your Company''s new capabilities and robust pipeline of innovations resulted in new launches in the form of "GO Badam Milk", "GO Cheese Chutney Slice" and "Go Almette" and other innovative products. Coupled with leading edge route to market strategy, while building brand differentiation and relevance.

DIVIDEND

In order to conserve resources for working capital and new projects your Directors'' do not recommend any dividend for the Financial Year 2015-2016.

TRANSFER TO RESERVES

No amount has been transferred to general reserves for the Financial Year 2015-2016.

SHARE CAPITAL

The Paid Up Capital of the Company as on 31st March 2016 stood at Rs.704,158,870. During the year your Company has issued new Compulsorily Convertible Debentures and converted all Compulsorily Convertible Debentures into Equity Shares. The Company issued 227,000 equity shares of Rs.10/- each aggregating to Rs.56.75 Million under the Employee Stock Option Plan during the year, in addition your Company has issued 42,135,038 bonus shares of Rs.10/- each to the existing shareholders of the Company in the proportion of two (2) shares for every one(1) share held in accordance with the provisions of section 63 of the Companies Act, 2013 read with Rule 14 of the Companies (Share Capital and Debentures), Rules 2014

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENT RELATE AND THE DATE OF THE REPORT

The following commitments material changes occurred subsequent to close of the financial year and the date of this report

1. The Company successfully came out with its Initial Public Offer (IPO) and raised Rs.3,000.00 Million by way of fresh issue of equity shares and Rs.4,505.37 Million through offer for sale (OFS). The Paid up capital of the company as on date is Rs.841,145,820/

2. The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip code No. 539889 and on the National Stock Exchange of India Limited (NSE) with scrip code of PARAGMILK. The Company confirms that the annual listing fees to both the stock exchanges for the financial year 2016-17 have been paid.

FIXED ASSETS & CAPITAL EXPENDITURES

Your Company has significantly enhanced the built up capacity by way of capital expenditure in plant and machinery at Manchar and Palamaner plant from time to time. Additions made during the year amounted to Rs.891.26 Million as on March 31, 2016 as against additions of Rs.761.73 Million in the previous year ended March 31, 2015.

Your Company has made a significant capital expenditure over the period of 5 years in Plant & Machinery:

RESPONSIBILITY STATEMENT

Pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the Directors hereby confirm that;

(a) in the preparation of the annual accounts for the financial year ended March 31, 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the Company for the year ended March 31, 2016 ;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts for the financial year ended March 31, 2016 on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

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

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the performance evaluation of the Board, its Committees and Individual Directors and Independent Directors conducted and the same was based on questionnaire and feedback from all the Directors on the Board as a Whole, its Committees and self-evaluation.

The Chairperson of the Nomination and Remuneration Committee (NRC) held separate discussion with each of the Director''s of the Company and obtained their feedback on overall Board effectiveness as well as on each of the other Director.

Based on the Questionnaires and feedback, the performance of the every Director was evaluated by the NRC.

Some of the key criteria’s for the performance evaluation, as laid down by the NRC were as follows:-

Contribution at Board / Committee meetings Guidance / Support to Management outside Board/ Committee Meetings.

Performance evaluation of Board and Committees:

Board Structure and Composition Degree of Fulfillment of key responsibilities Establishment and delineation of responsibilities to Committees

Effectiveness of Board Process, Information and Functioning

Board Culture and Dynamics

Quality of relationship between the Board and

Management

Efficacy of Communication with External Stakeholders

- Committees- strengths and areas of improvement

INDEPENDENT DIRECTOR

A separate meeting of the Independent Directors ("Annual ID Meeting) was convened on June 24, 2016, which reviewed the performance of the Board (as a whole), the non-independent director and the Chairman. Post the Annual ID Meeting, the Collective feedback of each of the Independent Directors was discussed by the Chairperson of NRC with the Board, covering performance of the Board as a whole, performance of the non-independent directors and performance of the Board Chairman.

EXPORT MARKET

Your Company has presence in the international markets like UAE, Hong Kong, Singapore, Oman, Kuwait, Mauritius, New Zealand, Australia, Congo, Iraq. Company has extensive Cheese demand from international market and supplies bulk Cheese to Philippines, Sri Lanka, UAE and Bangladesh. During the year the Company''s export of consumer products decreased by 36.70% as compared to the year 2014-15. The total export sale for financial year was Rs.318.09 Million against Rs.467.38 Million last year. The drop in export sale was due to almost no sale of SMP, as the prices of SMP fell in international market making Indian SMP non-competitive.

Company''s UHT facility at Palamner plant is now approved by Export Inspection Agency (EIA), which enables the Company to export UHT to international Markets.

FUTURE PROSPECTS

The distribution expansion plans have been prepared with focus on quality of distribution in top 25 cities and distribution expansion with focus in North and South India. The route to market (RTM) strategy focuses on building capability, distribution along with strengthening of the sales team.

In terms of brand building, holistic 360 degree approach which was initiated last year with Cheese (Make it Amazing

- with world cuisines) will be the way forward. In brand marketing, higher degree of focus is planned in social media marketing. Capability building of the regional sales team will be focus for building distribution strength.

The Company has not only continued its efforts in developing more and more products for the Indian ethnic community abroad but also targeted the local population in the target markets.

The above initiatives being dovetailed with focus on operational efficiencies being built at plant level, marketing initiatives to build brands and focus on quality distribution expansion and capability building of the sales team would help build the consumer business with accelerated pace.

SUBSIDIARY COMPANY & CONSOLIDATED FINANCIAL STATEMENTS

Bhagyalaxami Dairy Farms Private Limited (BDFPL) is wholly owned subsidiary of the Company. Which is located at Manchar, Pune District, BDFPL which is a fully automated cow farm, housing over 2000 Holstein breed cows with superior quality yield. BDFPL was established with the aim to educate farmers about best practice of breeding, feeding, animal management and improving productivity.

The Gross Revenue of the BDFPL for FY 2016 stood at Rs.442.05 Million (Previous Year Rs.844.55 Million). The company incurred a loss of Rs.52.76 Million (Previous Year: Rs.42.70 Million).

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014 the statement containing salient features of the financial statements of the Company''s subsidiary in Form - AOC-1 is attached as Annexure 1.

Bhagyalaxmi produces "Farm-to-Home" premium quality milk under brand name of "Pride of Cows" with sales at Pune and Mumbai, the pride of cow dairy is fully automated without any human intervention to ensure quality and purity of milk.

As required under Rule 8(1) of the Companies (Accounts) Rules, 2014, the Board''s Report has been prepared on standalone financial statements and a report on performance and financial position of its Subsidiary Company is included in the financial statements

Your Company has prepared Consolidated Financial Statements in accordance with Accounting Standard 21 (AS 21) issued by the Institute of Chartered Accountants of India. The Consolidated Statements reflect the results of the Company and those of its Subsidiary Company. The Audited Consolidated Financial Statements are provided in the Annual Report.

DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP)

The Company has received resignation of Mr. Ramesh Chandak from Directorship as Nominee Director on behalf of IDFC Alternatives. The Company has pursuant to Section 149 and 152 of Companies Act, 2013 received notice and declaration of Independence from Mr. Ramesh Chandak, (DIN.00026581) towards his appointment as Independent Director of the Company. The Board has appointed Mr. Ramesh Chandak as Additional Independent Director for a term of five consecutive years with effect from 24th June, 2016 subject to confirmation by the members in the forthcoming Annual General Meeting of the Company. The Board recommends your approval to the above appointment in the forthcoming Annual General Meeting.

During the Financial Year 2015-2016 Mr. Vishal Tulsyan-Nominee Director resigned with effect from July 28, 2015 and Mr. Girish Nadkarni Nominee Director resigned with effect from August 14, 2015 and Dr. Thorat Nominee Director resigned with effect from September 8, 2015. The Board placed on record their sincere appreciation for the valuable contribution made by them during their tenure as Directors with the Company. Ms. Radhika Pereira (DIN: 00016712) and Mr. Narendra Ambwani (DIN: 00236658) and Mr. Sunil Goyal (DIN: 00503570) were appointed as Independent Directors with effect from May 26, 2015 and Mr. Nitin Dhavalikar (DIN: 07239870) was appointed as an Independent Director with effect from July 28, 2015 and Mr. Ramesh Chandak (DIN.00026581) was appointed as Nominee Director on September with effect from September 9, 2015.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Mr. Bharat Kedia has been appointed as the Chief Financial Officer of the Company w.e.f. January 01, 2015. Further, Mr. Pritam Shah as the Managing Director of the Company and Ms. Rachana Sanganeria as the Company Secretary are Key Managerial Personnel of the Company as on March 31, 2016.

RISK MANAGEMENT & INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Risks are events, situations or circumstances which may lead to negative consequences on the Company''s businesses. Risk management is a structured approach to manage uncertainty. A formal enterprise wide approach to Risk Management is being adopted by the Company and key risks will now be managed within a unitary framework.

The Company has appointed M/s. KPMG in India, as Internal Auditor. The Company has in place an elaborate internal control system commensurate with the size and nature of its business and size and complexity of its operations. The primary objective of the Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, applicable laws and regulations, to ensure proper authorization and accounting of transactions as also for safeguarding and protecting Company''s assets and that all assets and resources are acquired economically, used efficiently & adequately protected to prevent any revenue leakage and losses to the Company. The internal auditors'' reports are periodically reviewed by the management and the Audit Committee and necessary corrective actions are taken from time to time.

MEETINGS OF THE BOARD:

The Board meets at regular intervals to discuss and decide on Company business policies and strategy apart from other Board businesses. A notice of the Board Meeting is circulated well in advance with the agenda which includes the detailed annexure/ notes to be discussed to enable the Board to take an informed decision. The Board met 8 (eight) times during the year, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as "SEBI (LODR) Regulations, 2015".

Audit committee:

Audit Committee comprises of

1. Mr. Sunil Goyal - Chairman,

2. Mr. Pritam Shah - Member

3. Mr. Nitin Dhavalikar - Member

4. Mr. Narendra Ambwani - Member

5 (Five) Audit Committee Meetings were held during the financial year under review and the gap between two Meetings did not exceed 120 days. These Meetings were held on May 26, 2015, July 28, 2015, August 6, 2015 December 23, 2015 and March 21, 2016, the details are given in the Corporate Governance Report.

Nomination and Remuneration Committee

Nomination and Remuneration Committee comprises of

1. Mr. Nitin Dhavalikar - Chairman,

2. Mr. Devendra Shah - Member

3. Mrs. Radhika Pereira - Member

4. Mr. Ramesh Chandak - Member

2 (Two) Nomination and Remuneration Committee Meetings were held during the financial year under review. These Meetings were held on May 26, 2015 and September 4, 2015, details of which are reproduced in the appropriate section of the Corporate Governance Report.

Stakeholders'' Relationship Committee

The Stakeholders Relationship Committee was constituted by the Board of Directors at their meeting held on July 28, 2015

The Composition of the Stakeholders'' Relationship Committee is as follows:

1. Mr. Narendra Ambwani - Chairman

2. Mr. Pritam Shah - Member

3. Mr. Sunil Goyal - Member

4. Mr. B.M. Vyas - Member

EMPLOYEE STOCK OPTION SCHEME, 2015 ("ESOS 2015")

The Company has instituted ESOP Trust in the name of "Parag Milk Foods Employees Stock Option Trust" and the "Parag Milk Foods Limited - Employee Stock Option Scheme 2015" (ESOS 2015) in April, 2015 pursuant to resolutions dated February 27,

2015 and April 21, 2015 passed by the Board of Directors and the resolutions dated April 3, 2015 and May 16, 2015 passed by the Shareholders. The ESOS 2015 is compliant with the SEBI (Share Based Employee Benefits) Regulations, 2014 and the relevant provisions of the Companies Act, 2013 along with the Rules made there under including any amendments made thereto or notifications thereof. The purpose of the ESOS 2015 was to inter alia, enable the company to attract, retain and reward appropriate human talent.

The ESOS 2015 is administered by the ESOP Trust 227,000 Equity Shares were allotted to the ESOP Trust on September 3, 2015. The Options were granted to the eligible employees pursuant to the Nomination & Remuneration Committee meeting held on 4th September, 2015. The vesting of the options granted will be in the Financial Year 2016-2017.

EXTRACT OF THE ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure II and is attached to this Report.

LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION-186 OF THE COMPANIES ACT 2013

The particulars of Loans, guarantees or investments made under Section 186 are furnished in Annexure III and is attached to this report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy and has established the necessary vigil mechanism as defined under Section 177(9) of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations, 2015 for employees to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the Company.

REMUNERATION AND NOMINATION POLICY

The Board of Directors have framed a policy in accordance with Section 178 of the Companies Act, 2013 and SEBI Listing Regulations which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members, Key Managerial Personals and Senior Management. The Remuneration and Nomination policy has been uploaded on the website of the Company.

PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE

The company has zero tolerance policy in case of sexual harassment at workplace and has adopted a policy on prevention, prohibition, and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules there under. The company also has an anti sexual harassment committee which carries out its functions with great diligence. During the year under review no complaint on sexual harassment was received.

HEALTH SAFETY AND ENVIRONMENT PROTECTION

The company is operating its plant in a manner which endeavors protection of health/ safety of workers and environment. All necessary measures are taken in relation to safety and sanitation, drinking water, quality of food provided in the canteen etc for employees and workers of the company. "Eco friendly green" initiatives are taken by the company at its plant to ensure safety. The company is in compliance with all labour and environmental laws.

CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES- SECTION 188 OF THE COMPANIES ACT 2013

All related party transactions that were entered into during the financial year 2015-16 were in the ordinary course of business and at an arm''s length basis. All Related Party Transactions are placed before the Audit Committee and the Board as also to the Board for approval. Omnibus approval was obtained for transactions which are of repetitive nature. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel.

The particulars of contracts or arrangements with related parties referred to in Section 188(1), as prescribed in Form AOC - 2 of the rules prescribed under Chapter IX relating to Accounts of Companies under the Companies Act, 2013, is appended as Annexure IV.

The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company.

INFORMATION TECHNOLOGY

Parag Milk Foods Limited has been leveraging the Information Technology and IT enabled services for business process automation and transformation across various functions, internal and external stakeholders.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your company always believed in and worked towards "inclusive growth''- improving the quality of life of the people we touch and in the communities where we operate. The CSR committee was constituted by the Board of Directors of the Company at its meeting held on 23rd June, 2014 and re-constituted on 26th May, 2015 and 28th July, 2015.

The CSR Committee of the Board of Directors of the Company Consists of the following Members viz.

1. Mr. Devendra Shah - Chairman

2. Mr. B. M. Vyas - Member

3. Mrs. Radhika Pereira - Member

4. Mr. Girish Nadkarni - resigned on August 14, 2015

The following CSR Activities have been conducted during the financial year: 2015-16.

Corporate Social Responsibility (CSR) activities for the financial year 2015-16

1	A brief outline of the Company''s CSR Policy including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR Policy and projects or programs and the Composition of CSR Committee.	CSR Policy is Available for inspection by Members of the Company
2	Average net profit of the Company for last three financial years	257.62 Million
3	Prescribed CSR expenditure (two percent of the amount mentioned in item 2 above)	2%
4.	Details of CSR spent during the financial year:	0.72 Million
5	Total amount to be spent for the financial year	5.15 Million
6	Amount unspent-	4.43 Million

The Company had already budgeted to spend Rs.5.15 Million towards health care, medical camp organized at Manchar-village and has already spent Rs.0.72 Million and the balance amount of Rs.4.43 Million has been carried forward in the current year 2016-17 for the budgeted spend.

Details of amount spent on CSR Activities during the Financial Year 2015-16

Sr. No.	CSR Projected or Activity Identified	Sector in which the projects is covered	Project of Program	Amount outlay (Budget) project wise (Rs. In Millions)	Amount spent on the projects of programs (Rs. In Millions)	Cumulative Expenditure up to the Reporting period i.e. FY 15-16 (Rs. in Millions)	Amount spend direct or through implementing agency
1	Medical camp organized at Manchar	Health Care	Maharashtra	0.72	0.72	0.72	Direct

MANAGEMENT''S DISCUSSION AND ANALYSIS

Pursuant to Regulation 34 read with Schedule V of the SEBI (LODR) Regulations, 2015, detailed review of operations, performance and future outlook of the Company is covered separately in this Annual Report.

CORPORATE GOVERNANCE

As per Regulation 34 (3) read with Schedule V of the SEBI (LODR) Regulations, 2015, a separate section on corporate governance practices followed by the Company, together with a certificate obtained from N.L. Bhatia & Associates a firm of Company Secretaries in Practice confirming compliance forms an integral part of this Report

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure V. The Company was awarded a state level award for excellence in Energy Conservation and Management by the Maharashtra Energy Development Agency on February 18, 2016.

DEPOSITS

The Company has neither accepted nor renewed any deposits during the year ended 31st March 2016.

BUY BACK

The Company has not bought back any of its securities during the year ended 31st March 2016.

DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL:

No significant material orders have been passed by the Regulators or courts or tribunals which would impact the going concern status of the Company and its future operations.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

Information as required under the provisions of Section 197(12) of the Companies Act, 2013 read together with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended herewith as Annexure VI to this report. The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rules 5(2) & 5(3) of the Companies (Appointed and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is appended herewith as Annexure forming part of this Report.

No commission was paid during the year to the Managing Director/Whole Time Director from the Company or from its subsidiary company.

AUDITORS'' REPORT

There are no qualifications, reservations or adverse remarks made by the Auditors in their report.

STATUTORY AUDITORS

The Statutory Auditor, M/s Haribhakti & Co, LLP, Chartered

Accountants, Pune (Firm Registration No. 103523W) who were appointed to hold office from the conclusion of this Annual General Meeting until the conclusion of the Annual General Meeting of the Company to be held in the FY 20192020, subject to ratification by members at every Annual General Meeting. The Company has received under Section 139(1) of the Companies Act, 2013 and the Rules framed there under, a certificate of their eligibility and consent for re-appointment. Accordingly, the appointment of M/s Haribhakti & Co. LLP, Chartered Accountants as Statutory Auditors of the Company is placed for ratification by the Members.

COST AUDITORS

M/s Harshad S. Deshpande & Associates, Cost Accountants were appointed as the Cost Auditors of the Company for the year ending March 31, 2016. On recommendation of the Audit Committee the Board of Directors propose the appointment of M/s. Harshad S. Deshpande as the Cost Auditors of the Company for the Financial Year 2016 -2017. The Cost Auditors have confirmed that they are not disqualified for such re-appointment within the meaning of Section 148 of the Companies Act 2013.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. N.L. Bhatia & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the Financial Year 2015-16. The Secretarial Audit Report is given as Annexure VII forming part of this Report.

ACKNOWLEDGEMENTS

Your company takes pride in its highly motivated employees who have been contributing their best for the success and growth of your Company to aspire to achieve new heights Your Directors thank and express their gratitude for the support and co-operation received from State Government / regulatory authorities and stakeholders, vendors, Financial Institutions, Banks, Investors and service providers.

The Directors thank the Company''s valued and esteemed customers for their continued patronage.

FOR AND ON BEHALF OF THE BOARD

Sd/-

DEVENDRASHAH

Place: Mumbai CHAIRMAN

Date: June 24,2016 DIN: 01127319