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Annual Report2014-2015

I NDDB DAIRY SERVICES I AnnuAl RepoRt 2014-2015 2

1NDDB DAIRY SERVICES I AnnuAl RepoRt 2014-2015 I

Shri Deepak Tikku Chairman Shri S. Parthasarathy IAS (Retd) Shri Dilip RathMD, NDDB

Smt. Shyamala Gopinath Ex Deputy Governor, RBI Prof. M.S. SriramVisiting Faculty, IIM Bangalore

Shri Sangram Chaudhary ED, NDDB Shri S. NagarajanMD, MDFVPL

Dr. V.A. Srinivasan Advisor, NDDB

Shri Y.Y. PatilGM - Accounts, NDDB

Dr. Omveer Singh MD, NDDB Dairy Services

Shri A.K. KhoslaED, NDDB Dairy Services

Board of Directors

NDDB Dairy Services, a not-for-profit company under Section 25 of the Companies Act, is a wholly-owned subsidiary of the National Dairy Development Board (NDDB).


Contents

What Is a Producer comPany? 5

mIlk Producer comPanIes 6

Women Take Charge in Andhra Pradesh

Facilitating Two Other Milk Producer Companies

Key Indicators of Milk Producer Companies

Support to Milk Producer Companies

ProductIvIty servIces 22

accounts 29

the staff 48


What Is a Producer comPany?

A Producer Company is a private

limited company to which provisions

contained in Part IX A of the

Companies Act 1956 apply. A Producer

Company is a business enterprise run

on the basis of ‘Mutual Assistance

Principles’ – which are broadly similar

to the Cooperative Principles adopted

by the International Cooperative

Alliance for cooperatives.

A Producer Company combines the

institutional and ideological strengths

of cooperatives – ownership limited

to users; limited interest on shares;

no trading of shares; patronage not

capital-based – with the flexibility and

autonomy available under company

law.

There are however a few key enabling

features in a Producer Company’s legal

framework which differentiate it from

cooperatives:

Producer Company vis-à-vis Cooperatives

Producer Company (Act) Cooperative Act

Legal framework Central Act, enabling in nature State Act, restrictive in nature

Area of Operation Not restricted Restricted

Shareholders Only user members can hold shares Non-users can also hold shares

Voting Rights One member, one vote

Members of Producer Company having only Producer Institutions as its members shall have patronage-based voting rights

One member, one vote

Audit Regular audit by a Chartered Accountant as per provisions of the Companies Act

Audit by the Cooperative Audit Department, or in some states, by an auditor from a panel of auditors approved by Government

Even though a Producer Company is a private limited company, there are certain distinct features which differentiate it

from other companies:

Producer Company vis-à-vis Other Companies

Producer Company Other Companies

Only producers can be members/shareholders Anyone can be a shareholder

Owned by user members Owned by investors

One member, one vote or patronage-based voting Voting rights based on shareholding

No trading of shares is permitted. However transfer of shares among members is permitted.

Trading of shares is permitted

Limited dividend No limit on dividend

Patronage-based returns Capital-based returns


mIlk Producer comPanIes

Women Take Charge in Andhra PradeshChittoor in Andhra Pradesh is one of the major milk production districts with

dairying as a major source of income for rural households. By the late ‘90s,

facing increasing competition from private dairies coupled with inadequa-

cies in governance in the Chittoor Milk Union, the Government of Andhra

Pradesh approached NDDB for assistance. NDDB thereupon initiated the

setting up of a New Generation Cooperative (NGC).

The district administration requested that the area of operation be extended

to more villages so as to benefit a larger number of milk producers. The

District Rural Development Agency (DRDA) financed 52 Bulk Milk Chilling

Units (BMCUs) which were managed by the Mandal Mahila Samakhyas,

while an additional 56 BMCUs were funded by NDDB.


By 2013-14, about 2,300 Milk Pooling

Points (MPPs) were organised. NDDB

Dairy Services (NDS) then decided

to facilitate the setting up of a Milk

Producer Company (MPC) with only

women members.

Prior to incorporation, NDS organised

village meetings in Chittoor and

Anantapur districts to discuss the

concepts and features of an MPC.

Twenty-seven milk producers

from a pool of women producers

agreed to be the ‘First Subscribers’

and expressed their willingness to

collectively contribute the requisite

Rs. 1 lakh as minimum paid-up capital

for incorporation of a company.

NDS conducted a two-day orientation

programme for the First Subscribers,

on the provisions of the Memorandum

of Association (MoA) and Articles

of Association (AoA). Five of the

subscribers were identified as First

Directors of the Producer Company.

The subscribers decided on the

name ‘Shreeja Mahila Milk Producer

Company’ and the Company was

incorporated in July 2014. The Head

Office of the Company is located in

the famous temple city of Tirupati.

Post-incorporation, NDS assisted the

Shreeja Mahila Milk Producer Compa-

ny (Shreeja MMPC) in the recruitment

of key manpower. Orientation and

awareness programmes were held

to explain the concept of Producer

Companies to the field staff. There-

after, field teams conducted group

discussions in the villages to enrol

milk producers and identify Sahay-

aks to manage the milk procurement

functions at MPPs.


Training programmes were organised

for the Shreeja milk procurement

staff and for the Sahayaks. The staff

of the BMCUs owned and managed

by Shreeja MMPC and BMCUs

managed by the Mandal Mahila

Samakhyas were familiarised with

the Standard Operating Procedures

(SOP) developed by NDS. The

Shreeja staff was also trained in

the use of Information Technology

applications to ensure transparency

in procurement and payment

transactions.

The membership enrolment drive led

to about 30,400 women becoming

members and Shreeja MMPC being

operationalised in September 2014.

Producers enrolled themselves as

members of the Shreeja MMPC

for a number of reasons: A woman

member found that the transparency

in Shreeja’s milk testing procedures

was a striking feature – with results

being displayed immediately and a

printed acknowledgement receipt of

the value of the milk being provided

– when she compared these to

other private dairies operating in her

village. This in fact was cited as one

of the main reasons by a number of

members for joining Shreeja MMPC.

Another member appreciated Shreeja

MMPC’s practice of depositing her

milk payment directly into her bank

account. Yet another appreciated the

various awareness programmes being

carried out by Shreeja MMPC which

she said were being conducted in her

village for the first time.


Facilitating Two Other Milk Producer Companies

During the year, NDDB Dairy Services

(NDS) also assisted milk producers in

Punjab and Uttar Pradesh to set up

Milk Producer Companies (MPCs).

To start with, more than 500 Milk

Pooling Points (MPPs) were set up in

Punjab. NDS organised village meet-

ings in eight districts of Punjab

(Barnala, Bathinda, Faridkot, Firo-

zpur, Mansa, Moga, Muktsar, and

Sangrur) to explain the features

of an MPC. Out of the 16 milk pro-

ducer 'First Subscribers', six 'First

Directors' were identified. The ‘Baani

Milk Producer Company’ was in-

corporated in August 2014 with its

Registered Office in Patiala.

Post-incorporation, NDS facilitated

the Baani MPC field staff to carry

out a member enrollment drive and

about 22,000 members were enrolled.

Training programmes were organised

for the MPC milk procurement and

chilling centre staff and Sahayaks.

Baani MPC was operationalised in

November 2014.

In Uttar Pradesh, initially about 3,150

MPPs were set up in 20 districts.

Subsequently, NDS organised village

meetings in 10 districts of the State

(Agra, Aligarh, Budaun, Etah, Etawah,

Firozabad, Hathras, JP Nagar, Mainpuri,

and Moradabad). Out of the 14 milk

producer 'First Subscribers', five 'First

Directors' were identified. The ‘Saahaj

Milk Producer Company’ (HQ Agra)

was incorporated in October 2014.

With assistance from NDS, a member

enrolment drive was undertaken by

the Saahaj MPC staff – which took

the membership to about 35,000.

Operations of the Saahaj MPC

commenced in December 2014.


Key Indicators of Milk Producer Companies

By March 2015, five large Milk Producer

Companies (MPCs) incorporated and

operationalised with assistance from

NDDB Dairy Services in Rajasthan

(Paayas), Gujarat (Maahi), Andhra

Pradesh (Shreeja), Punjab (Baani) and

Uttar Pradesh (Saahaj), had enrolled

around 2.67 lakh milk producers as

members, of whom about 36 per cent

were women. About 52 per cent of

the members enrolled were small

and marginal milk producers. The

five companies combined procured

about 18 lakh kg of milk per day

during the year. The members of these

five companies raised about Rs. 500

million towards share capital.

Paayas and Maahi Milk Producer

Companies continued operations

during the year. Saahaj, Baani and

Shreeja however, were in operation

for about four to seven months of the

year. Key indicators of the five MPCs

as on 31st March 2015 were:

Membership

Share Capital Contribution by Members

Num

ber o

f Mem

bers

Women Members

Paayas Maahi Shreeja Baani Saahaj

1,00,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

Shar

e Ca

pita

l Con

trib

uted

by

Mem

bers

(in

mill

ion

Rs.)


37%

20%

100%22%

12%

300

250

200

150

100

50

0

154.1

262.2

20.3 13.822.2


5,995

9,858

1,384871

1,587

12,000

10,000

8,000

6,000

4,000

2,000

0 Paayas Maahi Shreeja Baani Saahaj

Average Milk Procurement Per Day

Turnover

Note:1. Shreeja had operations for only

7 months in 2014-15

2. Baani had operations for only 5 months in 2014-15

3. Saahaj had operations for only 4 months in 2014-15

Milk

Pro

cure

men

t (in

lakh

kg/d

ay)


6

5

4

3

2

1

0

4.12

2.36

1.7

4.25

Turn

over

(in

mill

ion

Rs.)

5.36


Support to Milk Producer Companies

During the year, NDDB Dairy Services’ (NDS) professionals continued to assist the Milk Producer Companies (MPCs) in

various ways.

Training & Capacity Building

MPCs have a range of stakeholders

who require training to expand their

knowledge base and raise their

behavioural and skill levels. NDS

organised training programmes for

these stakeholders and also carried

out train-the-trainer programmes.

For Board Members and Senior Professionals NDS organised Business Orientation

Programmes for the Board of Directors

of the Shreeja and Saahaj MPCs in

Tirupati and Aligarh respectively.

The programmes put across the


Values, Vision, and Mission of an

MPC and covered the company’s key

priority areas for the next five years.

Discussions were held on the roles and

responsibilities of the MPC Board and

the Chief Executives.

NDS organised three-day workshops

on ‘Leadership through Policy

Governance’ for Producer-Member

Directors and Chief Executives of both

Paayas and Maahi MPCs. Participants

were taken through the concept

of Policy Governance, the process

of formulating policies, the ‘policy

calendar’ and the importance of

monitoring these.

As part of a concerted effort to

improve leadership skills, a new

learning and development initiative,

‘I Excel I Lead’, was organised for

the senior management teams

(Chief Executives and departmental

heads) of the MPCs. The programme

focused on understanding leadership

in conjunction with spirituality, and

included yoga and meditation

techniques to imbibe positive values

and to de-stress.


For MembersAbout nine Train-the-Trainer pro-

grammes were conducted by NDS

for the MPCs’ Producer Institution

Building (PIB) teams to enable them

conduct awareness programmes for

members and other residents in the

village.

MPCs have set up informal groups

namely Member Relations Groups

(MRGs) and Village Contact Groups

(VCGs) to help strengthen the

relationship between members and

their company, and to promote

effective two-way communication.

NDS developed various training mod-

ules for the VCG and MRG members

and also trained the identified train-

ers so that they could take up these

training programmes in the villages.

A Leadership Development Pro-

gramme was organised for selected

MRG and VCG members of the MPC

with a view to groom them for lead-

ership roles. It covered topics such

as ‘Importance of Values’, ‘Vision and

Mission of the MPC’, ‘Importance

of Communication and Teamwork

at the Village Level’, and ‘Role of

Leaders and Leadership Qualities’.

Experience Sharing

The annual meet of the Producer

Institution Building (PIB) teams was

held in Delhi to provide all the MPCs

with the opportunity to share their

institution-building experiences. The

two-day workshop was attended by

the CEOs, PIB teams and Heads of

Procurement of the five MPCs.

Functional heads from the five MPCs

in the key areas of Quality Assurance,

Finance, and Purchase also shared

their experiences at similar such other

workshops.


Extension & CommunicationNDS has developed communica-

tion materials – awareness posters,

pamphlets, information booklets (on

Balanced Feeding, Artificial Insemina-

tion, etc.) which are being used by

the MPCs in their extension activities.

A short video film was also produced

on the concept of an MPC, member-

ship criteria, benefits and responsi-

bilities of members, etc. The film is

used both in awareness-raising pro-

grammes and also for reorientation

of existing MPC members.

A film made on Artificial Insemination

(AI) provides technical information for

the use of MPC Mobile AI Technicians.

Information TechnologyA Pourer Relationship and Input

Services Management (PRISM)

software was developed for MPCs

to manage member milk supplies,

input services and member payments.

During the year, it was implemented

at Shreeja MMPC and a start was

made at Baani and Saahaj MPCs.

NDS is in the process of assisting

Paayas and Maahi MPCs in:

• Implementing a comprehensive

ERP (Enterprise Resource Planning)

system covering all the major

business activities of an MPC such as

Finance, Purchase, Sales, Inventory,

Fixed Assets, and Human Resources.

•Setting up a data centre for hosting

the various IT applications. The cen-

tre is co-located at the premises of a

professionally-managed outsourced

entity.

•Setting up a secured Multiprotocol

Label Switching (MPLS) network

connecting the Head Office with

the cluster-level offices.


Quality Assurance

NDDB Dairy Services (NDS) assisted

Shreeja, Baani and Saahaj Milk Pro-

ducer Companies (MPCs) in putting in

place practices to meet the standards

laid down by the Food Safety and

Standards Authority of India (FSSAI).

The NDS team also trained members

of Quality Assurance teams in all

the MPCs in Good Manufacturing

Practices, Regulatory Compliance

Requirements, and use of the

e-Quality MIS Reporting System.


Marketing

NDS facilitated consumer feedback

surveys covering more than 500

respondents including retailers,

consumers and non-consumers of

products of Paayas and Maahi MPCs.

To understand consumer behaviour

and milk-buying patterns, a market

study was also conducted for Maahi

MPC. In select cities of Punjab, a

market survey was carried out for

Baani MPC to assess the market

potential for liquid milk as well as

value-added products.

NDS conducted training programmes

on ‘Advanced Selling Techniques’ for

the sales teams of Paayas and Maahi

MPCs, the objective being to enable

the sales staff to build and improve

collaboration with channel partners,

and communicate with customers.

Under National Dairy Plan I (NDP I),

the different Sub-Project Plans i.e.

Village-based Milk Procurement

System, Pilot Model for Viable Door-

step AI Delivery Services, Ration

Balancing Programme, and Fodder

Development, have in-built strategies

for environment and social manage-

ment to minimize or mitigate adverse

environmental impact and enhance

their positive social impact. NDS

assisted the MPCs in project imple-

mentation.

Environment & Social Management


Increasing the productivity of milch animals to meet the rapidly-growing demand for milk, calls for both genetically

improving the animals, and feeding them a balanced ration. Genetic improvement can be accomplished through the use

of quality semen of high genetic merit bulls and increased coverage of Artificial Insemination of milch animals. Balanced

rations are necessary to realise the genetic potential of milch animals.

ProductIvIty servIces

Increasing Semen Production

NDDB Dairy Services (NDS) manages the two largest semen stations in the

country – Sabarmati Ashram Gaushala in Bidaj (Gujarat) and Animal Breeding

Centre in Salon (Uttar Pradesh) – which together produced over 22.4 million

frozen semen doses during the year.

Two new semen stations at Alamadhi in Tamil Nadu and Rahuri in Maharashtra

are also being established.

Sabarmati Ashram Gaushala, Bidaj Producing 14.2 million semen doses

in 2014-15, the Sabarmati Ashram

Gaushala continued to maintain its

top position in the country. Its sale

of semen touched 14.2 million doses

which was a growth of 14% over the

previous year.


Animal Breeding Centre, SalonThe Animal Breeding Centre, the

second largest semen-producing

station in the country, produced 8.2

million semen doses of which it sold

7.9 million doses, a 20% increase over

the previous year.

Alamadhi Semen StationWork was completed on a semen

station over 350 acres of land

allotted by the Govt. of India at

the Central Cattle Breeding Farm

located at Alamadhi in Tamil Nadu.

The procurement of high genetic

merit bulls was also completed.

The semen station has a capacity

to produce about 10 million semen

doses in a year and is expected to be

operationalised early next year.

Rahuri Semen StationWork is progressing satisfactorily in

setting up the Rahuri Semen Station

over 250 acres of land allotted by

the Govt. of Maharashtra - Mahatma

Phule Krishi Vidyapeeth at Rahuri. The

Rahuri Semen Station has facilities

similar to those at the Alamadhi

station, and a capacity to produce 10

million semen doses in a year.


Artificial Insemination (AI) ensures

rapid genetic improvement of the

bovine population. NDDB Dairy

Services (NDS) continued to support

Milk Producer Companies (MPCs) in

providing AI services to farmers at

their doorstep.

NDS facilitated the recruitment

and training of key manpower for

the MPCs, training of mobile AI

technicians, and field distributors in

the proper handling of frozen semen

doses and liquid nitrogen containers.

NDS organised basic AI training for

about 450 AI technicians from Paayas

and Maahi MPCs.

Training programmes on managing

AI operations and handling of Frozen

Semen Doses were also organised for

the AI Delivery service managerial

teams of Paayas and Maahi MPCs.

NDS assisted the MPCs in monitor-

ing their AI operations through the

observations captured in the Infor-

mation Network for Animal Produc-

tivity & Health (INAPH) by mobile AI

technicians using internet-enabled

netbooks.

Under NDDB’s Assam Dairy Develop-

ment Plan, NDS supported the West

Assam Milk Union Ltd (WAMUL) in the

implementation of the World Bank-

funded AI project in Nagaon district

of Assam.

Artificial Insemination Delivery Services


Breed-improvement programmes

need to be supported by feeding

milch animals a balanced ration so

that they produce milk commensurate

with their genetic potential.

NDDB Dairy Services assisted the MPCs

in implementing Ration Balancing

and Fodder Development Projects to

obtain higher milk production levels.

NDS’ support extended to establishing

delivery mechanisms for compound

cattle feed, area-specific mineral

mixture, and fodder seeds.

In 2014-15, NDS facilitated the training

of a total of 1,768 Local Resource

Persons (LRPs), including 187 women,

who were deployed in Paayas and

Maahi MPCs to cover a large number

of milch animals. NDS assisted in

the monitoring of the programme,

through field visits and analysis of data

captured in INAPH.

NDS assisted in organising 97 silage

and 178 mower demonstrations con-

ducted for 6,675 farmers in the villages

of Paayas and Maahi MPCs. NDS also

assisted in creating awareness among

dairy farmers on crop-residue conser-

vation and biomass management, be-

sides the construction of six biomass

storage silos. NDS facilitated the sale

of cattle feed and mineral mixture by

MPCs for their members. The Maahi

MPC provided improved fodder seeds

to their members in about 450 villages.

Animal Nutrition Services


Dairy Farm Services

A pilot project to improve farm-

management practices is being im-

plemented, covering eight producer

members of the Shreeja Mahila Milk

Producer Company in Andhra Pradesh.

The number of lactating cows with

these producer members ranges

from three to nine and the landhold-

ing from one to five acres. Once the

best practices are established they

will be developed as models of learn-

ing centres where farmer members

can witness good farm-management

practices. The improved management

practices will cover:

Heat detection and calving: Use of a

Breeding Calendar for identification

of standing heat and timely insemi-

nation and pregnancy diagnosis.

Housing and heat stress manage-

ment: Improved practices such as

increased access to feed and wa-

ter, controlling temperature and

humidity, and doing away with

tethering animals all the time.


Soil and water resource manage-

ment: Treating soil and water af-

ter testing can increase fodder

yield. Promoting silage-making in

small bags (50 to 100 kg) for use

throughout the year will reduce

dependence on rain for fodder

production.

Minimising sickness: i.e. preventive

health care by early detection of

mastitis, metritis, contagious dis-

eases, parasite-borne diseases, etc.

Dairy unit economics: Maintain-

ing regular records of income and

expenditure which would lead to

planning for improved productivity

based on actual data.

Calf and heifer care: Feeding colos-

trum to improve the immunity, use

of milk replacers, calf starters and

monitoring calf growth, leading

ultimately to reduced age at first

calving.


Chartered Accountants 7th Floor, Building 10, Tower B DLF Cyber City Complex DLF City Phase-ll Gurgaon - 122 002, Haryana India

Tel: + 91 (124) 679 2000 Fax: + 91 (I24) 679 2012

I N D E P E N D E N T A U D I T O R S ’ R E P O R T

TO THE MEMBERS OF NDDB Dairy Services

Report on the Financial StatementsWe have audited the accompanying financial statements of NDDB Dairy Services (“the Company”), which comprise the Balance Sheet as at 31st March, 2015, the Income and Expenditure Account, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial StatementsThe Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards Specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

Deloitte Haskins & Sells


Deloitte Haskins & Sells

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March, 2015, and its excess of Income over Expenditure and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements 1. As the Company is registered under Section 8 of the Act, it is not required to enclose a statement on the matters specified

in paragraphs 3 and 4 of the Companies (Auditor’s Report) Order, 2015 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act.

2. As required by Section 143(3) of the Act, we report that:(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were

necessary for the purposes of our audit.(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from

our examination of those books.(c) The Balance Sheet, the Income and Expenditure Account, and the Cash Flow Statement dealt with by this Report are in

agreement with the books of account.(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133

of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. (e) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the

Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164(2) of the Act.

(f ) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements –

Refer to Note 19 to the financial statements. ii. The Company did not have any long-term contracts including derivative contracts for which there were any material

foreseeable losses. iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the

Company

For DELOITTE HASKINS & SELLS Chartered Accountants (Registration No. 015125N)

Jitendra Agarwal Partner Place: Gurgaon (Membership No. 87104)Date: June 16, 2015


N D D B D a i r y S e r v i c e S

B A L A N c E S H E E T A S A T 3 1 M A R c H , 2 0 1 5

Particulars Note No. As at 31 March, 2015 As at 31 March, 2014Rupees Rupees

I EQUITY AND LIABILITIES

1 Shareholder’s funds (a) Share capital 3 2,000,000,000 2,000,000,000 (b) Reserves and surplus 4 75,212,775 29,553,940

2,075,212,775 2,029,553,940

2 Non-current liabilities

(a) Long-term borrowings 5 483,926,250 123,710,000 (b) Long-term provisions 6 11,159,867 5,967,300

495,086,117 129,677,300 3 Current liabilities

(a) Trade payables 7 14,342,328 14,500,717 (b) Other current liabilities 8 102,263,044 83,027,053 (c) Short-term provisions 9 641,736 576,123

117,247,108 98,103,893

Total 2,687,546,000 2,257,335,133

II ASSETS1 Non-current assets

(a) Fixed Assets 10(i) Tangible assets 25,351,065 10,844,950 (ii) Intangible assets 2,761,344 1,953,206 (iii) Capital work-in-progress 519,823,362 62,387,807 (iv) Intangible assets under development 736,903 -

(b) Long-term loans and advances 11 164,502,931 155,865,788 713,175,605 231,051,751

2 Current assets(a) Cash and cash equivalents 12 1,959,404,428 2,007,057,573 (b) Short-term loans and advances 13 9,298,121 2,036,283 (c) Other current assets 14 5,667,846 17,189,526

1,974,370,395 2,026,283,382

Total 2,687,546,000 2,257,335,133

See accompanying notes forming part of the financial statements

In terms of our report attached

For Deloitte Haskins & Sells For and on behalf of the Board of DirectorsChartered Accountants

Jitendra Agarwal Deepak Tikku Omveer Singh Partner Chairman Managing Director Place: GurgaonDate: June 16, 2015 K.S. Mehta Tapash Chakravarty Head Legal & Company Secretary Practice Head Finance & Accounts

Place: New Delhi Date: June 16, 2015



I N c O M E & E x P E N D I T U R E A c c O U N T f O R T H E y E A R E N D E D 3 1 M A R c H , 2 0 1 5

Particulars Note No.

For the Year ended 31 March, 2015


Rupees Rupees

1. Other Income 15 189,391,865 185,304,911

2. Total revenue 189,391,865 185,304,911

3. Expenses

(a) Employee benefits expense 16 89,400,138 74,359,629

(b) Depreciation and amortisation expense 10 5,476,392 1,926,746

(c) Other expenses 17 48,856,500 90,407,687

Total expenses 143,733,030 166,694,062

4. Excess of income over expenditure before tax (2-3)

45,658,835 18,610,849

5. Tax expense:

(a) Current tax expense - -

6. Excess of income over expenditure (4-5) 45,658,835 18,610,849

7. Surplus per equity share: (Face value - Rs. 10 per share)

18

(a) Basic 0.23 0.09

(b) Diluted 0.23 0.09




Jitendra Agarwal Deepak Tikku Omveer Singh Partner Chairman Managing Director Place: GurgaonDate: June 16, 2015 K.S. Mehta Tapash Chakravarty Head Legal & Company Secretary Practice Head Finance & Accounts




c A S H f L O w S T A T E M E N T f O R T H E y E A R E N D E D 3 1 M A R c H , 2 0 1 5

For the Year ended

31 March, 2015

For the Year ended

31 March, 2014

Rupees Rupees

A. CASH FLOW FROM OPERATING ACTIVITIES

Net surplus before tax 45,658,835 18,610,849

Adjustments for:

Depreciation and amortisation expense 5,476,392 1,926,746

Interest income (188,634,056) (185,291,969)

Provision for employee benefits 5,258,180 2,711,617

Loss/(Profit) on sale of fixed assets (net) 32,126 (12,942)

Operating surplus/(deficit) before working capital changes (132,208,523) (162,055,699)

Changes in working capital:

Adjustment for (increase)/decrease in operating assets:

Short term loans and advances (7,261,838) (7,845)

Long term loans and advances (664,483) (2,500)

Adjustment for increase/(decrease) in operating liabilities:

Trade payables (158,389) 2,381,771

Other current liabilities (49,801,785) 35,289,528

Cash generated from/(used in) operations (190,095,018) (124,394,745)

Advance WCT paid (13,750)

Net income tax (paid) (including demand paid under protest) / refund (net) (13,770,685) (12,862,288)

Net cash flow from/(used in) operating activities [A] (203,879,453) (137,257,033)

B. CASH FLOW FROM INVESTING ACTIVITIES

Decrease/(increase) in bank deposits not considered as cash and cash equivalents

5,1922,004 (78,715,670)

Capital expenditure on fixed assets including capital advances (452,661,154) (141,096,409)

Proceeds from sale of fixed assets 159,726 33,972,859

Interest received 200,155,736 198,365,607

Net cash flow from/(used in) investing activities [B] (200,423,688) 12,526,387

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from long-term borrowings 408,572,000 123,710,000

Net cash flow from/(used in) financing activities [C] 408,572,000 123,710,000

Net increase /(decrease) in cash and cash equivalents [A+B+C] 4,268,859 (1,020,646)

Cash and cash equivalents at the beginning of the year 27,296,446 28,317,092

Cash and cash equivalents at the end of the year 31,565,305 27,296,446


For the Year ended

31 March , 2015

For the Year ended

31 March, 2014

Rupees Rupees

Components of Cash and Cash equivalents:

a) Balances with banks:

- In current/Savings accounts 8,565,305 4,296,446

- In deposit accounts 23,000,000 23,000,000

(maturity less than 3 months)

Cash and Cash equivalents as per Cash Flow Statement 31,565,305 27,296,446

b) Other Bank balances

- In deposit accounts (maturity more than three months)

1,927,200,000 1,979,200,000

- Deposits under lien 639,123 561,127

Cash and cash equivalents as per Balance Sheet 1,959,404,428 2,007,057,573

(see note 12)




Jitendra Agarwal Deepak Tikku Omveer Singh Partner Chairman Managing Director

Place: GurgaonDate: June 16, 2015 K.S. Mehta Tapash Chakravarty Head Legal & Practice Head Company Secretary Finance & Accounts



N O T E S f O R M I N g P A R T O f T H E f I N A N c I A L S T A T E M E N T S

1. Corporate Information NDDB Dairy Services (‘the Company’) was incorporated on 12 October, 2009 as a wholly owned subsidiary of

National Dairy Development Board (NDDB), a body corporate formed under the National Dairy Development Act, 1987. Thereafter, the Company obtained license under Section 25 of the Companies Act, 1956 on 10 March, 2010. The Company has been set up to promote operations related to enhancement of livestock production and productivity, to promote cooperative strategy by carrying out facilities relating to milk procurement, processing, transportation, marketing and quality assurance by itself and through dairy and other cooperatives, producer companies (new generation cooperatives) and other entities by providing technical, managerial and financial support.

2. Significant Accounting Policies The significant accounting policies are as follows:

a. Basis of accounting The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting

Principles in India (Indian GAAP) to comply with the Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 (“the 1956 Act”) (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 (“the 2013 Act”) / the Companies Act, 1956 (“the 1956 Act”), as applicable in terms of General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the 2013 Act. The financial statements have been prepared on accrual basis under the historical cost convention.

b. Use of estimates The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and

assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the period in which results are known/materialize.

c. Cash and cash equivalents (for purposes of Cash Flow) Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original

maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

d. Cash flow statement Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted

for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

e. Revenue recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the

revenue can be reliable measured and there is no material uncertainty as to its ultimate recovery.

Revenue from services are recognized when services are rendered and related costs are incurred.

Interest income on Investments/deposits and Income from rent and hire charges is recognized on accrual basis.

f. Fixed Assets (Tangible / Intangible) Fixed assets are carried at cost less accumulated depreciation / amortisation and impairment losses, if any. The cost of

fixed assets comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalised and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure on fixed assets after its purchase / completion is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realisable value and are disclosed separately.



Capital work-in-progress:

Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

g. Depreciation Depreciation on tangible is provided on straight line method on the basis of useful life of the assets as specified in

Schedule II to the Companies Act 2013, except in respect of Mobile Phones. The estimated life of assets for charging depreciation is as follows:

Description Useful life (in Years)

Plant and Machinery 15

Office equipment 5

Computers 3

Furniture and fixtures 10

Mobile Phones 3

Vehicles 8

Depreciation is provided pro-rata from the date of addition.

Assets costing less than Rs. 5000 each are fully depreciated in the year of purchase.

Intangible assets are amortised over the estimated useful life on straight line method as follows:

Description Useful life (in Years)

Software 6

Trademarks 4

h. Employee Benefits Employee benefits include provident fund, gratuity and compensated absences. Employee benefits are accrued in

accordance with Accounting Standard – 15 (Revised) “Employee Benefits”

i. Defined-contribution plans The Company’s contribution to provident fund is considered as defined contribution plans and is charged as an expense

based on the amount of contribution required to be made and when services are rendered by the employees.

ii. Defined Benefit Plans For defined benefit plans in the form of gratuity, the cost of providing benefits is determined using the Projected Unit Credit

method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested.

iii. Short Term Employee benefits The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by

employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service.

The cost of short-term compensated absences is accounted as under:

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur.

iv. Long Term Employee benefits Compensated absences which are not expected to occur within twelve months after the end of the period in which the

employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the balance sheet date.



i. Foreign currency transactions and translations Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the

transaction. Monetary items denominated in foreign currency and outstanding at the balance sheet date are translated at the exchange rate ruling on that date.

Exchange differences arising on translation of monetary assets and liabilities and realised gains and losses on settlement of foreign currency transactions are recognised in the Income and Expenditure Account.

j. Earnings per share The Company reports basic and diluted surplus per share in accordance with Accounting Standard 20 on ‘Earnings per

Share’ prescribed by the Companies (Accounting Standards) Rules, 2006. Basic surplus per share are computed by dividing the Excess of Income over Expenditure for the year by weighted average number of equity shares outstanding during the year. Diluted surplus per share is computed by dividing the Excess of Income over Expenditure for the year by the weighted average number of equity shares outstanding during the year as adjusted to the effects of all dilutive potential equity shares, except where results are anti dilutive.

k. Taxes on Income Tax expense comprises current tax and deferred tax. Current tax is the amount expected to be paid for the year as

determined in accordance with the provisions of Income Tax Act, 1961. Deferred tax assets and liabilities are recognized for future tax consequences of timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods, subject to the consideration of prudence. Deferred tax assets and liabilities are measured using the tax rate enacted or substantively enacted at the balance sheet date.

l. Impairment At each balance sheet date, the Company reviews the carrying amount of its fixed assets to determine whether there is

any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an assets net selling price and value in use. In assessing value in use the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-discount rate that reflects the current market assessments of time value of money and the risks specific to the asset.

m. Borrowing costs Borrowing costs include interest and amortisation of ancillary costs incurred. Costs in connection with the borrowing of

funds to the extent not directly related to the acquisition of qualifying assets are charged to the Income and Expenditure Account over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset are added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Income and Expenditure Account during extended periods when active development activity on the qualifying assets is interrupted.

n. Lease Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are

recognised as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis over the lease term.

o. Material Events Material events occurring after the Balance Sheet date are taken into cognizance.

p. Provisions and Contingent Liabilities: A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow

of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent Assets are neither recognized nor disclosed in the financial statements. Contingent liabilities are disclosed by way of notes.

q. Operating cycle Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their

realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.



Note No. 3 - Share Capital

Particulars As at March 31, 2015 As at March 31, 2014

Number of shares

Amount Rupees

Number of shares

Amount Rupees

Authorised share capitalEquity Shares of Rs. 10 each

200,000,000 2,000,000,000 200,000,000 2,000,000,000

Issued, Subscribed and Paid up capitalEquity Shares of Rs. 10 each fully paid up

200,000,000 2,000,000,000 200,000,000 2,000,000,000

(i) Reconciliation of number of shares and amount outstanding at the beginning and at the end of the year:

Particulars Year ended March 31, 2015 Year ended March 31, 2014

Number of shares

Amount Rupees

Number of shares

Amount Rupees

Shares outstanding at the beginning of the year

200,000,000 2,000,000,000 200,000,000 2,000,000,000

Shares issued during the year - - - -

Shares outstanding at the end of the year 200,000,000 2,000,000,000 200,000,000 2,000,000,000

(ii) Rights, preferences and restrictions attached to sharesThe Company has issued one class of equity shares having face value of Rs. 10 each. Each shareholder is entitled to one vote per share. As per the license issued by Ministry of Corporate Affairs under Section 25 of Companies Act, 1956, no portion of income derived shall be paid or transferred, directly or indirectly by way of dividend, bonus or otherwise by way of profit, to person who at any time are or have been members of the company. In the event of winding-up or dissolution of the Company, the remaining assets after satisfaction of all debts and liabilities shall be given or transferred to some other Company registered under Section 25 of the Companies Act, 1956 having objects similar to the objects of the Company, to be determined in accordance with clause X of the Memorandum of Association of the Company.

(iii) Shares held by holding company, ultimate holding company, their subsidiaries and associates


Number of shares

Amount Rupees

Number of shares

Amount Rupees

National Dairy Development Board, the Holding entity and its nominees

200,000,000 2,000,000,000 200,000,000 2,000,000,000

200,000,000 2,000,000,000 200,000,000 2,000,000,000

(iv) Shareholder holding more than 5 percent shares:


No. of Shares held

% of Holding No. of Shares held

% of Holding

National Dairy Development Board and its nomi-nees

200,000,000 100 200,000,000 100

Particulars As at 31 March, 2015 As at 31 March, 2014

Rupees Rupees

Note No. 4 - Reserves and Surplusa. Surplus/(Deficit) in Income and Expenditure Account

(i) Opening balance 29,553,940 10,943,091

(ii) Add: Surplus for the year 45,658,835 18,610,849

75,212,775 29,553,940




Rupees Rupees

Note No. 5 - Long-term borrowingsSecured

a. Term loans from holding entity 532,282,000 123,710,000

Less: current maturity of long term borrowings 48,355,750 -

(see note 8) 483,926,250 123,710,000

Notes:(i) Term loans from National Dairy Development Board (NDDB) are obtained for the purpose of setting up a large frozen semen

station at Alamadhi, Tamil Nadu and Rahuri, Maharashtra. Term loans are secured by first charge on all the assets created under the setting up of semen stations by hypothecation of assets.

(ii) Interest and terms of repayment:

Total Loans sanctioned - Rs. 1,547,384,000. Loans Disbursed till March 31, 2015 - Rs. 532,282,000.

Term loans from NDDB are free of interest. However, any income earned on unutilised balance of loans is to be repaid to NDDB.

Term loans are to be repaid over a period of 10 years in 16 equal half yearly installments after the end of the initial moratorium period of 2 years from the date of first deemed disbursement i.e. 1 January, 2014 for Alamadhi Semen Station Loan and 1st October, 2014 for Rahuri Semen Station.

Note No. 6 - Long-term provisionsa. Provisions for employee benefits

(i) For compensated absences 6,883,935 3,543,971

(ii) For gratuity 4,275,932 2,423,329

11,159,867 5,967,300

Note No: 7 - Trade payablesa. Trade Payables (Other than acceptances)

(See Note 20) 14,342,328 14,500,717

14,342,328 14,500,717

Note No. 8 - Other current liabilitiesa. Current maturities on long term borrowings (see note below) 48,355,750 -

b. Payables on purchase of fixed assets 48,292,383 27,610,357

c. Statutory dues (Contribution to P.F., Withholding Tax, VAT etc.) 4,465,566 4,365,942

d. Security deposits received 129,210 55,000

e. Due to related parties (See note 24) 1,020,135 50,995,754

102,263,044 83,027,053

Note: For details of security of current maturities of long term borrowings - refer to note 5

Note No. 9 - Short-term provisionsa. Provisions for employee benefits (i) For compensated absences 641,736 576,123

641,736 576,123


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Rupees Rupees

Note No. 11 - Long-term loans and advances a. Capital advances

(i) Secured, considered good 83,262,870 82,720,000

(ii) Unsecured, considered good 9,265,048 15,619,693

b. Security deposits (Unsecured, considered good) 726,983 62,500

c. Advance income tax (net of provisions Rs. Nil) (unsecured, considered good)

42,163,280 57,463,595

d. Tax demand paid under protest (Unsecured, considered good) {see note 19 (c)}

29,071,000 -

e. Advance WCT (unsecured, considered good) 13,750 -

164,502,931 155,865,788

Note No. 12 - Cash and cash equivalentsa. Cash and cash equivalents

(i) Cheques in Hand - -

(ii) Balances with banks

- In current/savings accounts 8,565,305 4,296,446

- In deposit accounts (original maturity less than 3 months)

23,000,000 23,000,000

Cash and cash equivalents as per As-3 -Cash Flow Statement 31,565,305 27,296,446

b. Other bank balances

(i) In deposit accounts (original maturity more than 3 months)

1,927,200,000 1,979,200,000

(ii) Balances held as margin money 639,123 561,127

1,959,404,428 2,007,057,573

Note:(i) Balances with banks include deposits amounting to Rs. 796,500,000 (previous year Rs. 575,650,602) which have maturity of more

than 12 months from the balance sheet date.

Note No. 13 - Short-term loans and advances (Unsecured, considered good)

a. Loans and advances to related parties (refer note 24) 7,329,574 56,324

b. Loan and advances to employees 7,364 48,690

c. Prepaid expenses 611,308 414,723

d. Advances to vendors 957,941 1,516,546

e. Others 391,934 -

9,298,121 2,036,283

Note No. 14 - Other current assetsa. Accruals

(i) Interest accrued on bank deposits 5,667,846 17,189,526

5,667,846 17,189,526



Particulars For the Year ended 31 March, 2015


Rupees Rupees

Note No. 15 - Other income a. Interest income

- Bank deposits 185,253,160 185,291,969

- Income tax refund 3,380,896 -

b. Lease rent 755,367 -

c. Miscellaneous income 2,442 12,942

189,391,865 185,304,911

Note No. 16 - Employee benefits expensea. Salaries and wages 82,808,127 68,807,386

b. Gratuity expense (see note 23) 1,852,603 1,446,731

c. Contribution to provident fund (See note 23) 4,202,091 3,646,086

d. Staff welfare expenses 537,317 459,426

89,400,138 74,359,629

Note No. 17 - Other expensesa. Financial support to New Generation Co-operatives - 47,795,263

b. Power and fuel 2,414,986 1,916,642

c. Security expenses 2,001,867 1,843,853

d. Recruitment expenses 587,544 705,048

e. Retainership and contractual expenses 3,325,105 3,019,065

f. Rent 12 12

g. Rates and taxes 14,146 11,236

h. Repairs and maintenance:

- building 503,578 679,817

- others 1,377,169 1,408,517

i. Meeting and conference expense 549,255 1,441,617

j. Communication expenses 2,823,471 2,319,663

k. Loss on sale of fixed assets 32,126 -

l. Travelling and conveyance 16,183,009 18,199,119

m. Auditor's remuneration (See note below) 483,148 1,963,125

n. Legal and professional charges 11,093,337 3,511,410

o. Bank charges 24,976 31,521

p. Printing and stationery 995,588 410,831

q. Insurance expenses 765,936 605,281

r. Training, awareness and incentives to milk producers 4,897,693 3,869,931

s. Miscellaneous expenses 783,554 675,736

48,856,500 90,407,687



Particulars For the Year ended 31 March, 2015


Rupees Rupees

Note:

(i) Auditors' remuneration comprises: Statutory audit fee 350,000 350,000

Tax audit fee 75,000 75,000

Taxation matters - 1,275,000

Reimbursement of expenses 5,000 47,174

Service tax on above 53,148 215,951

483,148 1,963,125

Note No. 18 - Surplus Per Equity ShareUnit 31 March, 2015 31 March, 2014

Excess of Income over expenditure Rupees 45,658,835 18,610,849

Weighted average number of equity shares outstanding during the year

Numbers 200,000,000 200,000,000

Nominal Value of Equity Shares Rupees 10.00 10.00

Basic surplus/(deficit) per Share Rupees 0.23 0.09

Equity shares used to compute diluted surplus per share Numbers 200,000,000 200,000,000

Diluted surplus/(deficit) per Share Rupees 0.23 0.09

Note No. 19 - Contingent Liabilities and Commitments (to the extent not provided for)Particulars As at 31 March, 2015 As at 31 March, 2014

Rupees Rupees

(a) Contingent Liabilities

(i) Outstanding bank guarantees 639,123 561,127

(ii) Income Tax Demand for the Assessment year 2011-12 - 28,151,835

(see note (c) below)

(iii) Income Tax Demand for the Assessment year 2012-13 76,695,230 -

(see note (d) below)

(b) Commitments

(i) Estimated amount of contracts remaining to be executed on capital account (net of advances of Rs. 92,527,918)

319,287,447 273,815,372

(c) Income Tax Officer vide its Assessment Order dated 31.1.2014 had raised demand of Rs. 28,151,835 in respect of Assessment Year 2011-12 which was further revised to Rs. 30,049,751 vide its order dated 30.6.2014.The Company deposited an amount of Rs. 29,071,000 under protest and filed an appeal against the Assessment Order. The Commissioner of Income Tax (Appeals) vide its order dated 29.12.2014 has granted relief to the Company against the said demand by directing the Assessing Officer to apply the provisions of section 11 and 12 of the IT Act to grant the benefits as per the laid down provisions.

(d) The Income Tax Officer has raised a demand of Rs. 76,695,230 vide its Assessment Order dated 13.03.2015 in respect of Assessment Year 2012-13. An appeal against the assessment order has been filed before the Commissioner of Income Tax (Appeals). The Company does not expect any outflow of economic resources in respect of this demand and therefore no provision is considered necessary.



Note No. 20 - MSMED disclosureAccording to the records available with the Company, there were no dues payable to entities that are classified as Micro and Small Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 during the year. Hence disclosures, if any, relating to amounts unpaid as at the year end together with the interest paid / payable as required under the said Act have not been given.

Note No. 21 - DepreciationDuring the year, the Company has revised the estimated useful life of some of its tangible assets to align the useful life with those specified in Schedule II of the Companies Act, 2013. The carrying amount of fixed assets as at 1 April, 2014 is depreciated over the revised remaining useful life. The details of previously applied depreciation rates/useful life and revised useful life are as follows:

Asset Previous deprecia-tion rate / useful life

Revised useful life

Tangible assets

Plant and machinery 9.50%/10 years 15 years

Office equipment 4.75%/20 years 5 years

Furniture and fixtures 10%/10 years 10 years

Computers 20%/5 years 3 years

Vehicles 9.50%/10 years 8 years

Mobile phones 33.33%/3 years 3 years

Due to change in estimated useful life of the assets, the depreciation charge for the year is higher by Rs. 1,753,092

Note No: 22 - Expenditure in foreign currencyParticulars Year ended

31 March , 2015Year ended

31 March, 2014

Rupees Rupees

a. Conference Fees - 732,381

b. Travelling expenses - 1,982,398

- 2,714,779

Note No. 23 - Employee benefit plans i. Defined-contribution plan The Company’s Provident Fund Scheme is a defined contribution plan. The Company has recognised Rs. 4,202,091 (previous year

Rs.3,646,086) for Provident Fund contributions in Income and Expenditure Account. ii. Defined benefit plan The Company’s Gratuity Scheme is a defined benefit plan. The following table sets out the status of defined benefit obligations

and amount recognised in the financial statements.

Particulars 31 March, 2015 31 March, 2014

Rupees Rupees

I Change in present valuation of obligation

Present value of obligation at the beginning of the year 2,423,329 976,598

Interest cost 189,020 86,429

Current Service cost 1,628,918 1,255,064

Actuarial (gain)/ loss on obligation 34,665 105,238

Present value of obligation at end of year 4,275,932 2,423,329

Note: The Company’s obligation are unfunded



Particulars 31 March, 2015 31 March, 2014

Rupees Rupees

II Expense recognized in the Income and Expenditure Account

Current Service Cost 1,628,918 1,255,064

Interest Cost 189,020 86,429

Net Actuarial (gain)/ loss recognized 34,665 105,238

Expense recognized in the Income and Expenditure Account 1,852,603 1,446,731

III Liability recognized in the Balance Sheet

Present value of obligation at the end of the year 4,275,932 2,423,329

Funded status - -

Net liability recognized in the balance sheet 4,275,932 2,423,329

IV Balance Sheet reconciliation

Present value of obligation as at the beginning of the year 2,423,329 976,598

Expense as above 1,852,603 1,446,731

Benefits paid - -

Amount recognised in the balance sheet 4,275,932 2,423,329

The actuarial calculations used to estimate defined benefit commitments and expenses are based on the following assumptions, which if changed, would affect the defined benefit commitment’s size, funding requirements and expense.

V Assumptions 31 March, 2015 31 March, 2014

Discount Rate 7.80% 8.85%

Salary Growth rate 10.00% 10.00%

Mortality IAL 2006-08 Ultimate IAL 2006-08 Ultimate

Withdrawal rate 5.00% 5.00%

Notes:1. The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the

estimated term of obligations. 2. The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant

factors.3. Actuarial assumptions used to measure liability for compensated absences are same as above.

VI Experience adjustments 31.03.2015 31.03.2014 31.03.2013 31.03.2012 31.03.2011

Rupees Rupees Rupees Rupees Rupees

Present value of obligation 4,275,932 2,423,329 976,598 1,018,282 261,173

Experience gain/(loss) on plan liabilities

(34,665) (105,238) 734,900 30,233 -



Note No. 24 - Related party disclosuresDisclosures as required by the Accounting Standard (AS) 18 – “Related Party Disclosures” are as below:

A. Name of the related parties and nature of relationship (With whom the Company has transactions during the year):

Nature of Relationship Name of Entity

Holding Entity National Dairy Development Board (NDDB)

Fellow Subsidiaries IDMC Limited (IDMC) Indian Immunologicals Limited (IIL) Mother Dairy Fruit and Vegetable Private Limited (MDFVL)

Associates Maahi Milk Producer Company Limited (MMPCL) Paayas Milk Producer Company Limited (PMPCL)

Key Management Personnel Mr. Deepak Tikku (Whole-time Director, Chairman) Mr. Ajit Singh Parmar (Chief Operating Officer & Director) ceased to be Director on 15th July, 2014 Dr. Omveer Singh (Managing Director) joined on 8th September, 2014 Mr. Ajay Khosla (Whole-time Director)

B. Details of balances and transactions during the year with related partiesAmount in Rupees

Particulars Holding Company

Fellow Subsidiaries Associates Key Managerial Personnel

Total

MDFVPL IDMC IIL MMPCL PMPCL

Transactions during the Year

Lease income - 478,142 - - - - - 478,142

(-) (-) (-) (-) (-) (-) (-) (-)

Reimbursement of expenses by the Company

5,920 6,911,328 15,182 600 27,687 22,849 - 6,983,566

(1,512,630) (55,091) (63,790) (132,181) (-) (-) (-) (1,763,692)

Reimbursement of expenses to the Company

28,409 1,893,510 - - 509,780 - - 2,431,699

(221,369) (2,024,696) (-) (14,050) (-) (-) (-) (2,260,115)

Professional fees (expense) - - - - - -

(4,044,960) (-) (-) (-) (-) (-) (-) (4,044,960)

Purchase of fixed assets - - - - - - - -

(206,402) (4,562,245) (-) (-) (-) (-) (-) (4,768,647)

Financial support - - - - - - - -

(-) (47,795,263) (-) (-) (-) (-) (-) (47,795,263)

Long term borrowings taken 408,572,000 - - - - - 408,572,000

(123,710,000) (-) (-) (-) (-) (-) (-) (123,710,000)

Managerial remuneration:

- Mr. Deepak Tikku - - - - - - 2,588,448 2,588,448

(-) (-) (-) (-) (-) (-) (2,435,280) (2,435,280)

- Mr. Omveer Singh - - - - - - 2,433,374 2,433,374

(-) (-) (-) (-) (-) (-) (-) (-)

- Mr. Ajay Khosla - - - - - - 4,658,855 4,658,855

(-) (-) (-) (-) (-) (-) (4,429,682) (4,429,682)

- Mr. Ajit Singh Parmar - - - - - - 1,481,036 1,481,036

(-) (-) (-) (-) (-) (-) (3,400,714) (3,400,714)

Note: Figures in brackets represents previous year’s comparatives



Particulars Holding Company

Fellow Subsidiaries Associates Key Managerial Personnel

Total

MDFVPL IDMC IIL MMPCL PMPCL

Balance outstanding at the end of the year

Other current liabilities 1,020,135 - - - - 1,020,135

(5,225,186) (45,770,566) (-) (-) (-) (-) (-) (50,995,752)

Long term borrowings 532,282,000 - - - - - - 532,282,000

(123,710,000) (-) (-) (-) (-) (-) (-) (123,710,000)

Short-term advances - 7,329,574 - - - - - 7,329,574

(-) (-) (-) (56,324) (-) (-) (-) (56,324)

Note: Figures in brackets represents previous year’s comparatives

Note No. 25The Company is registered under Section 12A of the Income Tax Act and has also complied with the required provisions of Section 12A, accordingly Company’s income is exempt from Income tax in terms of the said section. Therefore, no provision for current tax/deferred tax is required.

Note No. 26Previous year’s figures have been regrouped/reclassified wherever necessary to correspond with the current year’s classification /disclosure.

For and on behalf of the Board of Directors

Deepak Tikku Omveer Singh Chairman Managing Director

K.S. Mehta Tapash Chakravarty Head Legal & Practice Head Company Secretary Finance & Accounts



The STaff

Chairman Deepak Tikku

Managing Director Dr. Omveer Singh

Executive Director Ajay Khosla

COMPANY SECRETARY, LEGAL & ADMINISTRATIONK.S. Mehta, Pratice Head BCom, CS

R. Balakrishna, Senior Analyst BA, PGD (PM & IR)

Harmeet Negi, Analyst BCom, CS, LLB

PRODUCER INSTITUTION BUILDINGSriram Singh, Practice Head BTech, PGDRM, CFA

R. Mariappan, Senior Associate BSc

Brajesh Narain Singh, Senior Associate BA (Hons), DCM

Alok Kumar Gupta, Associate BSc, MBA

Rachana Deodhar Goel, Analyst BSc, PGDRM

Gargi Pragya Vaicaknavi, Analyst BBA, PGDM

Ravi Ranjan, Analyst BCom, PGDM

Swati Keshari, Management Trainee BSc, PGDM

Dhruv Kumar Sharma, Management Trainee BBA, MBA-RM

PRODUCTIVITY ENHANCEMENT SERVICESDr. C.P. Devanand, Practice Head MVSc (Liv. Prod. Mgmt), MBA

Dr. K. Durairaj, Specialist MVSc (Animal Genetics & Breeding)

Dr. Ashis Roy Burman, Specialist BVSc & AH

Dr. Raghu Mallegowda, Senior Associate MVSc (Vet. Gynaecology and Obstetrics)

Dr. Manvir Singh, Associate MVSc (Animal Nutrition)

R. Ilamurgan, Site Engineer BE

Dr. Rajesh Roshan, Analyst BVSC & AH, MBA-RM

Dr. Navin Kumar Bansal, Analyst BVSC & AH

Dr. Mohammad Tarique, Analyst MVSc (Vet. Medicine)

Dr. Ibni Ali, Management Trainee MVSc (Vet. Physiology)

DAIRY VALUE CHAIN Vinod Kaushik, Practice Head BSc (Hons), PGDRM

Ashok Jawa, Specialist BSC, MBA (Agri Business)

Basant Choudhary, Associate BSC, MBA (Marketing)

Debashree Adhikary, Senior Analyst BA (Hons), PGDBM

Dr. Cijo K. Joseph, Analyst MVSc (Liv. Prod. Mgmt), PGDRM

Dr. Jayverdhan Tiwari, Analyst BVSC & AH, PGDRM

Anshumani Pandey, Analyst BSc, PGDM-RM

Mukesh Pratap Singh, Analyst M.Tech (Dairy Technology)

Gursharn Singh, Management Trainee MTech (Dairy Engineering)

Ketan Shete, Management Trainee MTech (Dairy Engineering)

QUALITY ASSURANCEDr. S.K. Bhalla, Advisor MSc, PhD (Microbiology)

Ashwani Sharma, Analyst BSc, PG (Food Technology)

Neeraj Kumar Mongia, Analyst BTech, MBA (Agri Business)

Sari T.P, Analyst MTech (Dairy Chemistry)

Priti Chaudhary, Analyst MSc (Dairy Chemistry)

Sandip Rathod, Management Trainee MTech (Dairy Engineering)

INFORMATION TECHNOLOGYJai Narain, Practice Head BA, MCA

Rohit Rajput, Associate BTech, MBA

Sachin Jain, Senior Analyst BE, MBA

Ashish Gupta, Analyst BSc, MCA

Prateek Agarwal, Analyst BE, MBA (Marketing)

BUSINESS EXCELLENCE Dr. Rajeev Krishnan, Senior Associate MVSc (Vet. Pathology), PGDABM

Nishant Aggarwal, Analyst Dip (Mechanical), PGDBA (Operations)

FARM SERVICESDr. C.S. Thomas, Senior Associate MSc, PhD (Animal Sciences)

Budh Prakash Kanoujia, Management Trainee BTech, PGDFM

FINANCE & ACCOUNTSTapash Chakravarty, Practice Head BCom (Hons), CA (Inter), ICWAI

Surya Prakash Gupta, Associate BCom, CA, CS

Harsh Kumar, Analyst BCom (Hons), CA

HUMAN RESOURCESVenkata Ramana Gullanki, Practice Head MA (Politics), MHRM

Shwet Awasthi, Associate BCom, PGDBM

Anjali Bhardwaj, Senior Analyst BSc (Hons), MCA

Abhimanyu Singh, Analyst BA, MBA, LLB

Govind Kumar Mishra, Analyst BCom, MBA

PURCHASEB. Dutta Biswas, Specialist BTech, PGD (High Polymer Engineering)

Hari Ome Choudhary, Analyst MTech (Agri Engineering), MBA (Agri Business)

Kumar Saurabh, Management Trainee BTech, PGDM (Finance)

AcknowledgementNational Dairy Development Board, Anand

Mother Dairy Fruit & Vegetable Pvt Ltd, DelhiEdit,

Des

ign,

Prin

t: IM

AGIN

E

NDDB House, Safdarjung Enclave, New Delhi 110 029

INDIA

Phone: (011) 49883000 / 49883088www.nddbdairyservices.com

email: [email protected]

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