Dear Members,

Your Directors hereby present their 33^rd Annual Report together with the Audited Financial Statements of Modern Dairies Limited for the year ended 31^st March, 2025.

Rs. in Lacs

PERFORMANCE

Your company during this Financial Year under review earned revenue of ? 3,48,92 Lacs as against ? 3,62,04 Lacs over the previous year. The operating profit this year was ?14,77 Lacs as against ?22,19 Lacs in the previous year.

The focus of the company continues to be in the fresh dairy, cultured products, cheese and milk nutritional ingredient business. It is a growing market segment and your company has also achieved growth in these segments. This year the prices of raw milk remained on the higher side than the last year which resulted in reduced margins particularly on the sale of fresh dairy and cultured products.

The new fiscal has started with increased availability of milk and the general forecast of good monsoon this year further augurs well for the agriculture and dairy sector.

DIVIDEND

In view of requirements of funds for operations, your directors are unable to recommend any dividend for the Financial Year ended on 31^st March, 2025.

MILK CESS

As the members are aware that the Company had filed a Special Leave Petition before the Hon'ble Supreme Court against the decision dated 28^th May, 2010 of Punjab & Haryana High Court with regard to the levy of milk cess under the Haryana Murrah Buffalo and other Animal Breed Act, 2001. The said SLP was filed by the Company in the year 2010 and admitted in the Supreme Court. In 2012, the Hon'ble Supreme Court had granted interim stay upon payment of 50% of milk cess levied and demanded by Govt. of Haryana in favour of the Company.

As per the last demand notice dated 1.1.2024 issued by Govt. of Haryana upto December quarter 2023 stand Rs. 544.31 Crore, which includes Milk Cess and interest thereon. The Company as an abundant caution is providing for the Milk Cess in the accounts. As on 31^st March 2025, the total Milk Cess provision amount is Rs. 21.30 Crore, out of which Rs. 9.91 Crore (Rs. 5.91 Crores + Rs. 4.00 Crores) has been already deposited as per Hon'ble Supreme Court's and Hon'ble Punjab & Haryana High Court's order.

The Company's legal counsels are regularly following and the final decision is pending before the Hon'ble Supreme Court of India.

PLEDGE RELEASE OF PROMOTER SHAREHOLDING

The shareholding of Promoters and Promoter group aggregating to 10654779 Equity Shares was pledged in favour of Punjab National Bank and other consortium members.

However, the Lenders on 13.01.2025 have released the pledge on above said shares (i.e. 10654779 Equity Shares) of Promoters and Promoter group on full settlement and payment of Debts by the Company.

STATUS OF COMPANY'S ACCOUNTS WITH LENDERS

It is informed to the Hon'ble members that Punjab National Bank had approved the One Time Settlement (OTS) of all its debts in 2022. The Company has paid all its dues as per the schedule. Further upon payment, PNB has issued No Dues Certificate to the Company.

The Canara Bank had approved its OTS towards full and final settlement of all its debts in financial year 2024-25. The Company duly paid the dues of the Bank and the Canara Bank has issued its No Dues Certificate to the Company.

Accordingly, all the charges of the bankers have been satisfied from the Registrar of Companies.

QUALITY, FOOD SAFETY & ENVIRONMENT STANDARDS

Quality and safety are paramount for the company. The company adheres to stringent quality control and inspection processes, following best practices of the industry with respect to Good Management Practices (GMP) and Good Hygienic Practices (GHP). This ensures the company's diversified products have high standards for quality, safety and nutrition. The company has adopted a very robust quality management system which has been certified by DNVGL Netherlands for updated version of ISO 9001, FSSC 22000 and ISO 14001.

In its pursuit for excellence, the Company facility has got Good Manufacturing Practices (GMP) certificate from World Health Organization (WHO) for its Pharma Grade Lactose.

The facilities are approved and registered with USFDA, Export Inspection Agency & APEDA for supply of its products in the domestic and international market. Most of the leading Multinational Food Companies in India have approved our operations as suitable for supplies of company's products to them.

SHARE CAPITAL

The Company has Authorised Share Capital of Rs. 35,00,00,000/- (Rupees Thirty Five Crore only) divided into 3,50,00,000 (Three Crore Fifty Lakhs) equity shares of Rs. 10/- (Rupees Ten). The Paid up Equity Share Capital is Rs. 25,65,88,610- (Rupees Twenty Five Crore Sixty Five Lakhs Eighty Eight Thousand Six Hundred Ten only) as on 31^st March, 2025.

Raising of funds by issuance of Warrants convertible into Equity Shares through Preferential Issue on a private placement basis

Members are aware that in the fiscal year ending 31.03.2025, the Company got approval from BSE Ltd for allotment of 86,00,000 warrants convertible into equity shares of the Company ("Convertible Warrants") of face value Rs. 10/- each at Rs. 50/- each (including premium of Rs. 40/- per share) as determined in accordance with Chapter V of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("SEBI ICDR Regulations"), by way of preferential issue on a private placement basis to the persons forming part of Promoters and Promoter group.

Conversion of Warrants into Equity Shares of Company on exercise of option attached with convertible Warrants

This is to inform the Hon'ble members that, 23,00,000 Warrants out of the above said 86,00,000 Warrants have been converted to the equivalent number of Equity Shares of the Company (i.e. 23,00,000 Equity Shares) on exercise of the right of conversion by the Allottees. The same are also listed on BSE Ltd.

Utilization of funds

In pursuance to Regulation 32(7A) of SEBI (Listing Obligations & Disclosure Requirement) Regulations, 2015, this is to inform that the Company in the financial year ended 31.03.2025 raised through above said preferential issue the total funds of Rs. 19,37,50,000/- (Rupees Nineteen Crore Thirty Seven Lakhs Fifty Thousand only) out of which Rs. 13,22,19,824 (Rupess Thirteen Crore Twenty Two Lacs Nineteen Thousand Eight Hundred Twenty Four only) has been utilized for the operations of the Company upto the end of the year.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the period under review, the details of Directors and Key Managerial Personnel are as follows:

Mr. Krishan Kumar Goyal (DIN: 00482035) was appointed as Managing Director of the Company for a period of five consecutive years w.e.f. 01^st April, 2020 and is to be further reappointed subject to approval of shareholders with effect from 01^st April, 2025 till the conclusion of Annual General Meeting to be held in year 2030 in terms of the provisions of Companies Act, 2013.

Dr. Surinder Kumar (DIN: 11032078) was appointed as Non-Executive Independent Director on 01^st April, 2025 for a period of three (3) years. He will hold office as an Additional Independent Director upto the ensuing Annual General Meeting. After the confirmation from the Shareholders in the ensuing AGM, he will be confirmed as an Independent Director upto the conclusion of AGM to be held in 2028.

In pursuance of Section 152 of the Companies Act, 2013, at-least two-third of the Directors (excluding Independent Directors) shall be subject to retirement by rotation. One-third of such Directors must retire from office at each AGM and a retiring Director is eligible for re-appointment. Accordingly, Mr. Ashwani Kumar Aggarwal, Executive Director (DIN: 00486430), is liable to retire by rotation at ensuing Annual General Meeting and being eligible, offers himself to be reappointed at this AGM. In view of his considerable experience, Board of Directors recommends his reappointment as Director of Company.

Pursuant to the provisions of Section 149 and 152 of the Companies Act, 2013, Prof. Sanjay Kaushik was appointed as Non-Executive Independent Director of the Company w.e.f. 30^th September, 2022 for a period of three years till the conclusion of Annual General Meeting to be held in the year 2025 and is to be further reappointed for a second term of five consecutive years commencing from this Annual General Meeting till the conclusion of Annual General Meeting to be held in year 2030 in terms of the provisions of Companies Act, 2013.

Pursuant to the provisions of Section 149 and 152 of the Companies Act, 2013, Mr. Ajay Kumar Sharma was re-appointed as Non-Executive Independent Director of the Company for a second term of three consecutive years commencing from the date of Annual General Meeting i.e. 27^th September, 2024 till the conclusion of Annual General Meeting to be held in year 2027. However, we report with regret that due to sad & sudden demise of Mr. Ajay Kumar Sharma, he had ceased to be a Director of the Company w.e.f. 02.01.2025.

The following are the Key Managerial Personnel of your Company in accordance with the provisions of Section 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

1. Mr. Krishan Kumar Goyal (Chairman and Managing Director)

2. Mr. Ashwani Kumar Aggarwal (Whole time Director)

3. Mr. Mukesh Sehgal (Chief Financial Officer)

4. Ms. Shruti Joshi (Company Secretary)

BOARD MEETINGS

During the financial year 2024-25, 5 (Five) meetings of the Board of Directors were held. The details of the meetings of the Board are furnished in the Corporate Governance Report which is attached to this Report.

ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

In pursuance of Section 134 (3) (p) of the Companies Act, 2013 read with rules made thereunder, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors carried out the performance evaluation of the Board as a whole, its Committees and individual Directors. The evaluation was carried out using individual questionnaires covering composition of Board, conduct as per Company values & beliefs, contribution towards development of strategy & business plan, risk management, receipt of regular inputs and information, codes & policies for strengthening governance, functioning, performance & structure of Board Committees, skill set, knowledge & expertise of Directors, preparation & contribution at Board meetings, Leadership etc.

As part of the evaluation process, the performance of Non-Independent Directors, the Chairman and the Board was conducted by the Independent Directors. The performance evaluation of the respective Committees and that of Independent and Non Independent Directors was done by the Board excluding the Director being evaluated.

The Board of your Company formed an opinion that the Independent Directors of our Company are maintaining high standard of integrity and possessing expertise, requisite qualifications and relevant experience for performing their role as an Independent Directors.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received the necessary declaration from each Independent Director in accordance with Section 149(7) of the Companies Act, 2013 read with the rules made thereunder and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, that they meet the criteria of independence as laid out in sub section (6) of Section 149 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

BOARD DIVERSITY AND REMUNERATION POLICY

The Board has, on recommendation of the Nomination & Remuneration Committee of the Company in accordance with Para A of Part D of Schedule II and Regulation 19 of Listing Regulations has framed Nomination & Remuneration Policy for appointment and remuneration of Directors, Key managerial Personnel and Senior Management Employees, which includes the criteria for determining qualification, positive attributes, independence of a Director and other matters provided under sub-section 3 of section 178 of the Companies Act, 2013. As on 31^st March, 2025 the Board consists of four members out of which two are Executive Directors and two are Independent Directors.

The Board periodically evaluates the need for change in its composition and size. We affirm that the remuneration paid to the Directors is as per the terms approved by the Nomination and Remuneration Committee of the Company.

COMMITTEES OF THE BOARD OF DIRECTORS

Your Company has the following four Board Level Committees established by the Board in compliance with the requirements of the business and relevant provisions of applicable laws and statutes:

• Audit Committee

• Nomination & Remuneration Committee

• Stakeholders Relationship Committee

• Allotment Committee

The details regarding composition, terms of reference, number of meetings held, etc. of the above Committees are included in the Report of Corporate Governance, which forms parts of the Annual Report. There has been no instance where the board has not accepted recommendation of Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Allotment Committee. Further, the provisions of Companies Act mandating constitution of Risk Management Committee is not yet applicable to the Company.

AUDITORS

Statutory Auditors

M/s. APT & Co. LLP, Chartered Accountants, (Registration No. 014621C/N500088), were reappointed for their second term as Statutory Auditors of the Company at the last Annual General Meeting held on 27^th September, 2024 for a period of two years till the conclusion of the Annual General Meeting to be held in the year 2026 at a remuneration mutually agreed between the Board of Directors of the Company and the Statutory Auditors.

Cost Auditors

Pursuant to Section 148 and other applicable provisions of Companies Act, 2013, if any and the rules framed thereunder, the Board of Directors have approved the re-appointment and remuneration of M/s. K.K. Sinha & Associates, Cost Accountants as Cost Auditors of the Company to conduct the cost audit for the year 2025-26 on the recommendations of the Audit Committee subject to the ratification of the remuneration by the shareholders.

Secretarial Auditors

The Board of Directors pursuant to Section 204 and the rules framed thereunder and subject to approval of Shareholders approved appointment of M/s. Sanger & Associates, Company Secretaries (Sole Proprietorship) as Secretarial Auditors of the Company for a period of three (3) years to hold office from this ensuing Annual General Meeting till the conclusion of the Annual General Meeting to be held in the year 2028 at a remuneration and on such terms as mutually agreed between the Board of Directors of the Company and the Secretarial Auditors.

AUDITOR'S REPORT

Statutory Auditors' Report

The Statutory Auditors of the Company, M/s. APT & Co. LLP, Chartered Accountants, have submitted the Auditor's Report forming part of Financial Statements in this Annual Report which has observation on Standalone Financial Statements for the period ended 31^st March, 2025.

Auditor's Qualification/ Observation

Director's remuneration is not admissible as prescribed in Sec-197 of companies Act, 2013 except in accordance with the provision of Schedule V and if it is not able to comply with such provisions, the prior approval of lenders is required.

The Company is not eligible to pay director remuneration for non-compliance of conditions prescribed in schedule V of the companies Act, 2013. During the year, the company has given the director remuneration to Mr. Ashwani Kumar Aggarwal

(Executive Director) & Mr. Krishan Kumar Goyal (Managing Director) amounting to Rs. 65,80,797/- for the period from 1st April, 2024 to 31st December, 2024.

Including the above mentioned remuneration, the company has paid total managerial remuneration of Rs. 4,09,41,407/-, till date, without complying the provisions of Schedule V of the companies Act, 2013.

Management Reply

This is to inform the Hon'ble members that in the preceding period, remuneration had been paid to Mr. Krishan Kumar Goyal as Chairman & Managing Director and Mr. Ashwani Kumar Aggarwal as Executive Director (Whole Time), aggregating to Rs. 4,09,41,407/- (Rupees Four Crore Nine Lakhs Forty-One Thousand Four Hundered Seven only) which was in the due course of Company's operations. The remuneration approved by the Board of Directors and Shareholders was well within the limits as prescribed under schedule to the Companies Act 2013 in case of loss or inadequacy of profit, but since the accounts of the company with lenders had gone NPA and as per the provisions of Companies Act, the Lenders approval was required and our Company's request was under their consideration.

In the meanwhile, the Company's lenders have been paid by OTS Debt Settlement. The entire settlement amount has been paid to the respective Lenders. They have issued their No Dues Certificates to the Company. The Managerial remuneration to Mr. Krishan Kumar Goyal and Mr. Ashwani Kumar Aggarwal was paid in the due course of operations of the Company. In the light of the above the Board considered and recommended to the Shareholders for ratification of past remuneration already paid.

Secretarial Auditors' Report

The Secretarial Auditor M/s. Sanger & Associates, Company Secretaries has submitted the Secretarial Audit Report for the Financial Year 2024-25 in Form No. MR-3 and forming part of this Directors Report annexed as "Annexure-A".

Secretarial Auditors' Qualification in Secretarial Audit Report

Director's remuneration is not admissible as prescribed in Sec-197 of companies Act, 2013 except in accordance with the provision of Schedule V and

if it is not able to comply with such provisions, the prior approval of lenders is required. The Company is not eligible to pay director remuneration for noncompliance of conditions prescribed in schedule V of the companies Act, 2013

Management Reply

This is to inform the Hon'ble members that in the preceding period, remuneration had been paid to Mr. Krishan Kumar Goyal as Chairman & Managing Director and Mr. Ashwani Kumar Aggarwal as Executive Director (Whole Time), aggregating to Rs. 4,09,41,407/- (Rupees Four Crore Nine Lakhs Forty-One Thousand Four Hundered Seven only) which was in the due course of Company's operations.

The remuneration approved by the Board of Directors and Shareholders was well within the limits as prescribed under schedule to the Companies Act 2013 in case of loss or inadequacy of profit, but since the accounts of the company with lenders had gone NPA and as per the provisions of Companies Act, the Lenders approval was required and our Company's request was under their consideration.

In the meanwhile, the Company's lenders have been paid by OTS Debt Settlement. The entire settlement amount has been paid to the respective Lenders. They have issued their No Dues Certificates to the Company. The Managerial remuneration to Mr. Krishan Kumar Goyal and Mr. Ashwani Kumar Aggarwal was paid in the due course of operations of the Company. In the light of the above the Board considered and recommended to the Shareholders for ratification of past remuneration already paid.

RISK MANAGEMENT

The Company recognises that risk is an internal and unavoidable component of business and is committed to managing the risk in a proactive and efficient manner. The Company has formulated Risk Management Policy to identify and then manage threats / risks that could have impact on the goals and objectives of the Company. The Audit Committee of the Company periodically reviews and evaluates the adequacy of risk management system. The actual identification, assessment and mitigation of risks is however done by the executives of the Company.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated Vigil Mechanism/Whistle Blower Policy which provides a robust framework for dealing with genuine concerns and grievances of Employees, Directors and Senior Executives. Your Company has an ethics hotline which can be used by employees, Directors, senior executives, suppliers, dealers etc. to report any violations to the Code of Conduct. Specifically, employees can raise concerns regarding any discrimination, harassment, victimization, any other unfair practice being adopted against them or any instances of fraud by or against your Company. During financial year 2024-25, no complaints were received.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

MDL (Modern Dairies Limited) has aligned its current system of internal financial control with the requirement of Companies Act, 2013.

MDL's internal controls commensurate with its size and nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance of corporate policies.

The management assessed the effectiveness of the Company's internal control over financial reporting (as defined in Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015) as of 31^st March, 2025. The assessment involved selfreview and external audit.

M/s. APT & Co. LLP, Chartered Accountants, the Statutory Auditors of MDL have audited the financial statements included in this annual report and have issued an attestation report on our internal control over financial reporting (as defined in Section 143).

The Audit Committee reviews reports submitted by the management and audit reports submitted by internal auditors and Statutory Auditors. Suggestions for improvement are considered and the Audit Committee follows up on corrective action.

Based on its evaluations (as defined in Section 177 of Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015), the Audit Committee has concluded that, as of 31^st March, 2025, the internal financial controls were adequate and operating effectively.

MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no adverse material changes or commitments occurred after 31^st March, 2025 till the date of this report, which may affect the financial position of the Company.

DEPOSITS

The Company has neither accepted nor invited any deposit from the public and hence directives issued by Reserve Bank of India and the provisions of Chapter V (Acceptance of deposits by Companies) of the Companies Act, 2013 and rules framed there under are not applicable for the year.

TRANSFER TO RESERVES

Considering the financial position of the Company and requirements of regular funds for operations, no amount has been transferred to the General Reserves of the Company during Financial Year 2024-25.

EXTRACT OF ANNUAL RETURN

In terms of requirement of section 134 (3) (a) read with Section 92(3) of the Companies Act, 2013, the Annual return of the Company has been placed on the Company's website and can be accessed on the website of the Company at www.moderndairies.com.

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

The information on conservation of energy, technology absorption, foreign exchange earnings and outgo as per Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules 2014, is given in the "Annexure-B" and forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

The provisions regarding Corporate Social Responsibility ("CSR") as enumerated under Section 135 of the Companies Act 2013 were applicable to the Company for the period under review.

As per the applicable provisions, the Company has to spend at least two per cent of the average net profits of the company made during the three immediately preceding financial years, i.e. FY 21-22, FY 22-23 & FY 23-24, which came to Rs. 34.22 Lacs. The Company is happy to inform that the total amount spent by the Company during the year was Rs.34.29 Lacs on the CSR activities. The Annual Report on CSR activities in the prescribed Form is attached as "Annexure-C" to this report.

The CSR Policy is available on the website of the Company at www.moderndairies.com.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of Loans, Guarantees and Investments, if any covered under the provisions of Section 186 of the Companies Act, 2013 for Financial Year 2024-25 forms part of the notes to the financial statements.

RELATED PARTY TRANSACTIONS

All contracts or arrangements entered into by the Company with Related Parties have been done at an arm's length and are in the ordinary course of business. Related Party disclosures as per IND AS-24 have been provided in the Notes to the Financial Statements.

During financial year 2024-25, your company has entered into material contract/ arrangement/ transaction with related parties in accordance with its Policy on Materiality of Related Party Transactions. The details of material related party transactions are reported in Form AOC-2 and attached as "Annexure-D" to this report.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS

A separate report on Corporate Governance & Management Discussion & Analysis is attached to this report.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

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

Your Company has in place a policy on Prevention of Sexual Harassment at workplace. This policy is in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees are covered under this Policy.

As per the said Policy, an Internal Complaints Committee is also in place to redress complaints received regarding sexual harassment. No complaints were received during financial year 2024-25.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is compliant with the applicable Secretarial Standards (SS) viz. SS-1 & SS-2 on Meetings of the Board of Directors and General Meetings respectively.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(b) they 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 as at 31^st March, 2025 and of the profit of the Company for the year;

(c) they 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) the annual accounts are prepared on a going concern basis;

(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

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

APPRECIATION

Your Directors wish to place on record their sincere appreciation for the continued support from its business associates and stakeholders of the Company.