DIRECTORS REPORT FOR THE FINANCIAL YEAR 2014-2015

To,

 The Members,

Tasty Dairy Specialities Limited

Your directors are pleased to present their report and audited financial statements for the year ended 31st March, 2015.

Your companys vision is aligned with the social needs for food and nutrition and its approach to business is to create shared value. Your company is embarked on an ambitious journey of reshaping itself and its products portfolio towards its vision to be the recognized of nutrition, health and wellness in India. Your Directors believe that your Company can make a significant difference in improving the quality of life of the population. These along with the other strengths that your Company has developed will prove to be the competitive advantages in the emerging scenario. The food processing sector 23 has the potential to make substantial contributions in this area and your Company is optimistic that the food processing industry will be supported in its efforts.

1.      Financial Highlights (Standalone)

During the year under review, performance of your company as under:

2.      State of Companys Affairs and Future Outlook

The revenue during the year was Rs. 31035.32 Lakhs which is a 23.38% increase from last year. The net profit after tax during the year was Rs. 442.16 Lakhs which is declined by 18.82 % from previous years profit.   However, your Directors are continuously looking for growth/expansion plan in the industry.

3.      Change in nature of business, if any

There was no change in the nature of the main business carried on by the company during the period under review. However, your directors looking forward on the business model which would not be a substitute but a complementary to the current business model.

4.      Dividend

Your Directors are continuously looking for growth and expansion plans in the industry therefore with a view to conserve the resources of company for future growth and expansion plans the directors are not recommending any dividend.

5.      Amounts Transferred to Reserves

The Board of the company has proposed to carry Rs. 250.00 Lakhs to its reserves.

6.      Changes in Share Capital

During the Financial Year 2014-15, there is no change in the share capital of the Company.

Disclosure regarding Issue of Equity Shares with Differential Rights pursuant to Rule 4(4) of Companies (Share Capital and Debenture Rules, 2014)

During the period under review the Company had not issued Equity Shares with Differential Rights.

Disclosure regarding issue of Employee Stock Options pursuant to Rule 12(9) of Companies (Share Capital and Debenture Rules, 2014)

During the period under review the Company had not issued Employees Stock Options to the employees.

Disclosure regarding issue of Sweat Equity Shares pursuant to Rule 8(13) of Companies (Share Capital and Debenture Rules, 2014)

During the period under review the Company had not issued Employees Stock Options to its directors or employees at a discount or for consideration other than cash.

Extract of Annual Return

The extract of Annual Return, in format MGT -9, for the Financial Year 2014-15 has been enclosed with this report.

Number of Board Meetings

The Board meets at regular intervals to review, discuss and decide on Company policy and strategy apart from other Board business.  

The notices of Board meetings were given well in advance to all the Directors. Meetings of the Board are held in Kanpur. The Agenda of the Board / Committee meetings is circulated at least a week prior to the date of the meeting. The Agenda for the Board meetings includes detailed notes on the items to be discussed at the meeting to enable the Directors to take an informed decision.

The Board met Eight times in financial year 2014-15 viz., on 30.04.2014, 07.06.2014, 23.06.2014, 02.09.2014, 09.12.2014, 30.12.2014, 22.01.2015 and 20.03.2015. The maximum interval between any two meetings did not exceed 120 days.

Particulars of Loan, Guarantees and Investments under Section 186

Details of Loans

During the Financial year loans were made by the Company as follows:

Details of Investments

During the Financial year no Investments were made by the Company

Details of Guarantee / Security Provided

During the Financial year no Guarantee/Security was made by the Company

Particulars of Contracts or Arrangements with Related Parties

The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act 2013 for the Financial Year 2014-15 in the prescribed format, AOC-2 has been enclosed with the report.

Material Changes Affecting the Financial Position of the Company, occurring after the Balance Sheet Date

There were no 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 statements relate and the date of the report.

Conservation of Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo

Since the Company owns a manufacturing facility, the Particulars relating to conservation of energy and technology absorption stipulated in the Companies (Accounts) Rules, 2014 are applicable, so the following are the details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:-

The particulars regarding foreign exchange earnings and outgo appear are as follows:

Details of Subsidiary, Joint Venture or Associates

There is no Subsidiary, Joint Venture or Associate Company of the Company.

 Risk Management Policy

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These risks are discussed at the meetings of the Board of Directors of the Company and are systematically addressed by the Board of Directors through mitigating actions. It is further stated that the Board of Director had not identified any element of risk which in the opinion of the Board may threaten the existence of the company.

Details of Directors and Key Managerial Personnel

During the period under review there was no change in the Board of Directors of the Company. However, CS Shalini Aggrawal has been appointed as whole time company secretary on 15th January, 2015.

 Details of significant & material orders passed by the regulators or courts or tribunal

There was no significant and material order passed by the regulators, Tribunal or Courts.

 Statement in Respect of Adequacy of Internal Financial Control with Reference to the Financial Statements

The Company maintains appropriate systems of internal control, including monitoring procedures, to ensure that all assets are safeguarded against loss from unauthorized use or disposition. Company policies, guidelines and procedures provide for adequate checks and balances and are meant to ensure that all transactions are authorized, recorded and reported correctly. The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations.

 Deposits

The Company had not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

 Receipt of any commission by MD / WTD from Company or for receipt of commission / remuneration from it holding or subsidiary

No commission has been paid to MD/WTD.

 Declaration by Independent Director

In the financial year 2014-15, Company had identified the suitable individuals for position of Independent director but the formalities for appointment were executed in year financial year 2015-16. Two Independent directors were appointed on 28.05.2015.

 'All the Independent Directors of the Company have furnished a declaration to the effect that they meet the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013.'

 Re-appointment of Statutory Auditor

 The Statutory Auditors, M/s Atul Garg and Associates, Chartered Accountants, Kanpur having FRN: 01544C hold office up to the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

 The Board recommends their re-appointment for a term of one (1) year from the conclusion of this Twenty Third Annual General Meeting up to the conclusion of next Annual General Meeting.

 The Company has received letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment.

 Explanation to Qualification, reservation or adverse remark or disclaimer made by Statutory Auditor in his Audit Report.

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s Atul Garg and Associates, Chartered Accountants, Kanpur Statutory Auditors of the Company, in their report and moreover the Auditors Report is self explanatory.

 Fraud Reporting to the Central Government

During the period under review no fraud was noticed by the Statutory Auditors of the Company.

 Details in respect of frauds reported by Auditors

During the period under review no fraud was noticed by the Statutory Auditors of the Company.

 Secretarial Audit Report

As per section 204 of the Companies Act, 2013 a Secretarial Audit report has been attached. Annexure-1.

 Explanation to Qualification, reservation or adverse remark or disclaimer made by Company Secretary in practice in Secretarial Audit Report.

Qualification 1:           During the year, the Company had in house Internal Audit Department but it has not complied with the provisions of Section 138(1) of the Companies Act, 2013 and has not filed requisite form under rule 8(4) of Companies (Meeting of Board and its Powers) Rules, 2014.

Explanation: Company has Internal Audit System. The Internal Audit is carried out by in House Staff. In Board Meeting dated 20.06.2015, Shri Vineet Saxena is appointed as the Internal Auditor of the Company.

Qualification 2: The Company has not complied with the provisions of Section 177 of Companies Act, 2013.

Explanation: As per section 177, Company has to constitute an Audit committee in financial year 2014-15 which requires the composition of at least two Independent directors. However, Company had identified the suitable individuals for position of Independent director but the formalities for appointment were executed in year financial year 2015-16. Independent directors were appointed on 28.05.2015, after appointment done, company has constituted Audit committee in the Board meeting held on 29th June, 2015. 

Qualification 3: The Company has not complied with the provisions of Section 178 of Companies Act, 2013.

Explanation: As per section 178, Company has to constitute a Nomination and Remuneration committee in financial year 2014-15 which requires the composition of three or more non-executive directors out of which not less than one-half shall be Independent directors. However, Company had identified the suitable individuals for position of Independent director but the formalities for appointment were executed in year financial year 2015-16. Independent directors were appointed on 28.05.2015, after appointment done, company has constituted Nomination and Remuneration committee in the Board meeting held on 29th June, 2015.

Qualification 4: The Company has not complied with the provisions of Section 149(4) of Companies Act, 2013 and Rule 4 of Companies (Appointment and Qualification of Directors) Rules, 2014 with respect to appointment of Independent Directors.

Explanation: Company had identified the suitable individuals for position of Independent director but the formalities for appointment were executed in year financial year 2015-16. Two Independent directors were appointed on 28.05.2015.

Qualification 5: The Company has not complied with the provisions of Section 135(1) of Companies Act, 2013 with respect to constitution of Corporate Social Responsibility Committee.

Explanation: As per section 135(1), Company has to constitute a Corporate Social Responsibility Committee in financial year 2014-15 which requires the composition of at least one Independent director.

However, Company had identified the suitable individuals for position of Independent director but the formalities for appointment were executed in year financial year 2015-16.

Independent directors were appointed on 28.05.2015, after appointment done, company has constituted Corporate Social Responsibility Committee in the Board meeting held on 29th June, 2015.

Qualification 6: The Company has not complied with the provisions of Section 184(1) of the Companies Act, 2013 w.r.t disclosure of interest of directors in first board meeting held in financial year 2014-15. However, it has taken on record at the Third board meeting held on 23.06.2014.

Explanation: Declaration (MBP-1) on disclosure of interest has been received from all directors in third board meeting held on 23.06.2014 and taken on record.

Corporate Social Responsibility (CSR) Policy

The Company's vision is to be a global benchmark in value creation and corporate citizenship and the Companys long-term Corporate Social Responsibility (CSR) objective, is to improve the quality of life of the communities through long-term value creation for all stakeholders.

During the financial year 2014-15, net Profit of the Company was more than Rs. 5.00 Crore therefore section 135 of the Companies Act, 2013 is applicable. As the Company is already engaged in Corporate Social Responsibility activities and doing CSR activities for welfare of the society as per the schedule VII of the Companies Act, 2013. Company has made a provision of Rs. 7, 98, 000 for expenditure to be made on Corporate Social Responsibility. In 2014-15, company could not appoint Independent Director, CSR committee had not been constituted. However, the Corporate Social Responsibility Committee has been constituted in the Board meeting held on 29.06.2015. 

The Annual Report on CSR initiatives is attached as per Annexure 1.

Audit Committee

As per section 177, Company has to constitute an Audit committee in financial year 2014-15 which requires the composition of at least two Independent directors. However, Company had identified the suitable individuals for position of Independent director but the formalities for appointment were executed in year financial year 2015-16.

Independent directors were appointed on 28.05.2015, after appointment done, company has constituted Audit committee in the Board meeting held on 29th June, 2015. 

Statement Indicating the Manner in which Formal Annual Evaluation has been made by the Board of its own Performance, its Directors, and that of its Committees

Since the paid up capital of the company is less than Rs 25 crore therefore section 134(3)(p) is not applicable.

Disclosure on Establishment of a Vigil Mechanism

Since the company had not accepted public deposits and the borrowings from the  from banks and public financial institutions are less than Rs. 50 Crore, therefore section 177(9) of the Companies Act, 2013 is not applicable on the Company.

Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

During the period under review no case under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 was filed.

Directors Responsibility Statement

In accordance with the provisions of Section 134(5) of the Companies Act 2013, your directors confirm that:

a) in the preparation of the annual accounts for the financial year ended 31st March, 2015, 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 as  at 31st March, 2015 and of the profit /loss of the  Company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

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.

Policy relating to the remuneration for Directors, KMPs and other employees

The Company considers human resources as its invaluable assets. This policy on nomination and remuneration of Directors, Key Managerial Personnel (KMPs) and other employees has been formulated in terms of the provisions of the Companies Act, 2013.

Nomination and Remuneration Policy is attached in Annexure-2.

Acknowledgment

The Directors express their sincere appreciation to the valued shareholders, bankers and clients for their support.

For and on behalf of the Board of Directors

Tasty Dairy Specialities Limited

Mahendra Kumar Singh                                             Atul Mehra

Director                                                                        Whole Time Director

1 H-1, Dabauli,                                                            7/76B, Tilak Nagar,

Kanpur-208002                                                           Nawabganj, Kanpur-208002

DIN: 02727150                                                                      DIN: 00811607

Place: Kanpur   

Date: 29.06.2015

                                                                                                                           Annexure-1

FORMAT FOR THE ANNUAL REPORT ON CSR ACTIVITIES TO BE INCLUDED IN THE BOARD'S REPORT

1. 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.

2. The Composition of the CSR Committee.

   (a).Mr. Atul Mehra                                       Whole time director

   (b).Mr. Neeraj Kanodia                               Independent Director

   (c). Mr. Narendra Shankar Sathe                Independent Director

3. Average net profit of the company for last three financial years: Rs. 3,98,17,125.13/-.

4. Prescribed CSR Expenditure (2% of the amount as in item 3 above): Rs. 7,98,000/-.

5. Details of CSR spent during the financial year.

(a) Total amount to be spent for the financial year; Rs. 798000/-.

(b) Amount un-spent, if any; Rs. 798000/-.

(c) Manner in which the amount spent during the financial year is detailed below.

Form No. MGT-9

EXTRACT OF ANNUAL RETURN

as on the financial year ended on March 31st, 2015

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies

(Management and Administration) Rules, 2014]

 II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

 IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

(ii)  Shareholding of Promoters

 (iii)  Change in Promoters Shareholding (please specify, if there is no change)

 (i)                 Shareholding Pattern of top ten  Shareholders (other than Directors, promoters and holders of GDRs and ADRs):

 (ii)              Shareholding of Directors and Key Managerial Personnel:

 V.           INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment (In Rs. Lakhs)

VI.         REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A.    Remuneration to Managing Director, Whole Time Director and/or Manager:

B. Remuneration to other Directors

C.  REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

VII         PENALTIES/PUNISHMENTS/COMPOUNDING OF OFFENCES:

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto

 For and on behalf of the Board of Directors

Tasty Dairy Specialities Limited

Mahendra Kumar Singh                                             Atul Mehra

Director                                                                        Whole Time Director

1 H-1, Dabauli,                                                            7/76B, Tilak Nagar,

Kanpur-208002                                                           Nawabganj, Kanpur-208002

DIN: 02727150                                                                      DIN: 00811607

Place: Kanpur   

Date: 29.06.2015