Dodla Dairy Ltd
Directors Reports
Dear Members,
Your Directors are pleased to present the 28th Annual Report on the business
and operations of Dodla Dairy Limited ("the Company/your Company") together with
the Audited Financial Statements (Standalone and Consolidated) for the year ended 31 March
2023.
FINANCIAL HIGHLIGHTS
|
|
(Amount (Rs.) in million) |
|
Consolidated |
Standalone |
Particulars |
2022-23 |
2021-22 |
2022-23 |
2021-22 |
Total Income |
28,349.80 |
22,570.54 |
26,080.43 |
21,290.10 |
EBITDA |
1,913.22 |
2,107.28 |
1,498.26 |
1,861.65 |
Finance Cost |
12.10 |
65.18 |
11.99 |
64.93 |
Depreciation, Amortisation, Impairment |
612.27 |
523.53 |
576.19 |
488.57 |
Profit Before Tax |
1,518.36 |
1,655.60 |
1,149.27 |
1,633.41 |
Current Tax |
413.91 |
434.61 |
296.40 |
385.81 |
Deferred Tax charge |
(118.39) |
(107.14) |
(96.98) |
(118.57) |
Interim Dividend Paid (T /Share) |
0 |
0 |
0 |
0 |
Paid up Equity Share Capital |
594.93 |
594.93 |
594.93 |
594.93 |
Basic Earnings per Equity Share (in T) |
20.55 |
22.43 |
15.97 |
23.07 |
Reserves |
9,127.40 |
7,836.68 |
8,236.41 |
7,278.96 |
OVERVIEW OF COMPANY'S FINANCIAL PERFORMANCE
On consolidated basis, the revenue from operations for FY 2023 was Rs.28,120.29
Million, higher by 25.35% over the previous year's revenue of Rs.22,433.51 Million. The
profit after tax (PAT) attributable to shareholders for FY 2023 and FY 2022 was
Rs.1,222.84 Million and Rs.1,328.13 Million, respectively.
On a standalone basis, the revenue from operations for FY 2023 was Rs.25,841.24
Million, higher by 23.26% over the previous year's revenue of Rs.20,964.84 Million in FY
2022. The profit after tax (PAT) attributable to shareholders for FY 2023 and FY 2022 was
Rs.949.85 Million and Rs.1,366.17 Million, respectively.
There was no change in nature of business of the Company. There were no significant or
material orders passed by regulators, courts or tribunals impacting the Company's
operations in future.
TRANSFER TO RESERVES
There is no amount proposed to be transferred to reserves for Financial Year 2022-23.
DIVIDEND
Keeping in view the future expansion plans, your Board of Directors do not recommend
any dividend for Financial Year 2022-23.
DIVIDEND DISTRIBUTION POLICY
The Company has adopted the Dividend Distribution Policy to determine the distribution
of dividend in accordance with the Regulation 43A of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (the "Listing Regulations"). The
Dividend Distribution Policy is available on the Company's website at: https://www.dodladairv.com/
static/investors/code-of-policv/Dividend%20Distribution%20Policv.pdf
UNCLAIMED DIVIDEND AND SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of Section 124 of the Companies Act, 2013 and other
applicable provisions of the Companies Act, 2013 and rules made thereunder there is no
unclaimed / unpaid amounts or shares were transferred to the Investor Education and
Protection Fund (IEPF).
UTILISATION OF IPO PROCEEDS
Dodla Dairy Limited has raised funds through Initial Public Offer (IPO) aggregating up
to Rs.5,201.77 million ("offer"). The offer comprises an offer for sale of
10,985,444 equity shares aggregating up to Rs.4,701.77 million ("offer for
sale") and a fresh issue of 1,168,224 equity shares aggregating up to '500 million
(1,168,224 equity shares of Rs. 428/-) with the object of utilization of net proceeds to
fulfil the repayment and/ or pre-payment, in full or part, of certain borrowings availed
by our Company from ICICI Bank Limited, the Hongkong and Shanghai Banking Corporation
Limited and HDFC Bank Limited, Funding incremental capital expenditure requirements of our
Company and General corporate purposes.
The Company has fully utilized the fresh issue of IPO proceeds to fulfil the repayment
and/ or pre-payment, in full or part, of certain borrowings availed by our Company from
ICICI Bank Limited, the Hongkong and Shanghai Banking Corporation Limited and HDFC Bank
Limited, Funding incremental capital expenditure requirements of our Company and General
corporate purposes.
SHARE CAPITAL
During the year under review there was no change in the authorised or paid-up share
capital of the Company.
The Authorised share Capital of the Company as on 31 March 2023 is Rs. 75,00,00,000
divided into 7,50,00,000 Equity Shares of Rs. 10 each fully paid up. The Paid-up Share
Capital of the Company as on 31 March 2023 is Rs. 59,49,27,350 divided into 5,94,92,735
Equity Shares of Rs. 10 each fully paid up.
LISTING OF EQUITY SHARES
The Company's equity shares are listed on the following Stock Exchanges:
(i) BSE Limited, Phiroze JeeJeebhoy Towers, Dalai Street, Mumbai - 400 001,
Maharashtra, India; and
(ii) National Stock Exchange of India Limited, Exchange Plaza, Floor 5, Plot No. C/1, G
Block, Bandra- Kurla Complex, Bandra (East), Mumbai - 400051, Maharashtra, India.
The Company has paid the Annual Listing Fees to the said Stock Exchanges for the
Financial Year 2023-24.
SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES
During the year the company incorporated a wholly owned subsidiary of the company in
Kenya i.e. Country Delight Dairy Limited, Date of Registration 22 November 2022, Company
Number: PVT-DLULG7LZ .
Country Delight Dairy Limited main object is to carry out production, processing of
milk, milk products and distribution of dairy and other products.
The Company has invested KES 1,000,000.00 (1000 ordinary shares each KES 1,000.00) in
Country Delight Dairy Limited, which is equivalent to 100 % of its issued and paid-up
equity share capital.
The Company has 5 subsidiaries (i.e., Dodla Holdings Pte. Limited, Lakeside Dairy
Limited, Dodla Dairy Kenya Limited, Country Delight Dairy Limited and Orgafeed Private
Limited) and 1 associate company (i.e., Global Vetmed Concepts India Private Limited) as
on 31 March 2023. There are no joint venture companies. There has been no material change
in the nature of the business of the subsidiaries and associates.
The Subsidiary Companies situated in India and Outside India continue to contribute to
the overall growth in revenues and overall performance of the Company.
As per the provisions of Section 129 of the Companies Act, 2013 read with Rule 5 of the
Companies (Accounts) Rules, 2014, a separate statement containing the salient features of
the Financial Statements of the Subsidiary Companies/ Associate Companies/Joint Ventures
in Form AOC-1 is annexed to this Board's Report as Annexure - I.
The detailed policy for determining material subsidiaries as approved by the Board is
uploaded on the Company's website and can be accessed at the Web-link: https://www.
dodladairv.com/static/investors/code-of-policv/Policv%20
for%20Determining%20Material%20Subsidiarv.pdf
PERFORMANCE AND CONTRIBUTION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
As per Rule 8 of Companies (Accounts) Rules, 2014, a Report on the Financial
performance of Subsidiaries, Associates and Joint Venture Companies along with their
contribution to the overall performance of the Company during the Financial Year ended 31
March 2023 is appended to this Report as Annexure - II.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements are prepared in accordance with Indian Accounting
Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified
under Section 133 of the Companies Act, 2013 and other relevant provisions of the
Companies Act, 2013.
The Consolidated Financial Statements for the Financial Year ended 31 March 2023 forms
part of the Annual Report.
As per the provisions of Section 136 of the Companies Act, 2013, the Company has placed
separate Audited accounts of its Subsidiaries on its website https://www.dodladairy.
com/Financial statements of subsidiary companies and a copy of separate Audited
Financial Statements of its Subsidiaries will be provided to shareholders upon their
request.
DETAILS OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES
OR ASSOCIATE COMPANIES DURING THE YEAR
During the Financial Year 2022-23, no company ceased to be subsidiary and associates of
the company and your company does not have any joint ventures
KEY MANAGERIAL PERSONNEL & DIRECTORS
The appointment and remuneration of Directors are governed by the Policy devised by the
Nomination, Remuneration and Compensation Committee of your Company. The detailed
Nomination and Remuneration Policy on its website of the company: https://www.
dodladairy.com/codes and polices
Key Managerial Personnel (KMP)
During the year under review, there was no change in the Key Managerial Personnel of
the Company.
Following are the KMPs of the Company in terms of Sec 203 of the Act
Dodla Sunil Reddy |
: Managing Director (MD) |
Ambavaram Madhusudan Reddy |
: Whole time Director (WTD) |
B V Krishna Reddy |
: Chief Executive Officer (CEO) |
Anjaneyulu Ganji |
: Chief Financial Officer (CFO) |
Surya Prakash Mungelkar |
: Company Secretary & Compliance officer (CS & CO) |
Directors
Dodla Sesha Reddy, Director, is liable to retire by rotation and being eligible for
re-appointment.
The board of directors of the company proposed to change designation of Mr. Akshay
Tanna from Nominee Director to Non-Executive - Non-Independent and the same is being
placed before the shareholders of the Company in this 28th Annual General
Meeting for their approval.
During the year under review, there was no change in Composition of the Board of the
Company.
Composition of the Board
Dodla Sesha Reddy |
: Chairman |
Dodla Sunil Reddy |
: Managing Director |
A Madhusudhana Reddy |
: Whole Time Director |
Akshay Tanna |
: Nominee Director |
Dr. Raja Rathinam |
: Independent Director |
Rampraveen Swaminathan |
: Independent Director |
Tallam Puranam Raman |
: Independent Director |
Vinoda Kailas |
: Independent Director |
None oi the directors oi the company are disqualified under the provisions of the
Companies Act 2013.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the year, the Board met 5 (Five) times i.e., on 16 May 2022, 02 August 2022, 22
October 2022,19 November 2022 and 21 January 2023.
Details of the attendance of the Directors at the Board meetings held during the year
ended 31 March 2023 are as follows:
|
Number of Board Meetings |
Name of the Director |
Held |
Attended |
Dodla Sesha Reddy |
5 |
5 |
Dodla Sunil Reddy |
5 |
5 |
A Madhusudhana Reddy |
5 |
5 |
Akshay Tanna |
5 |
4 |
Rampraveen Swaminathan |
5 |
2 |
Tallam Puranam Raman |
5 |
5 |
Dr.Raja Rathinam |
5 |
5 |
Vinoda Kailas |
5 |
5 |
DIRECTORS' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT,
2013
Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect
to the Directors' Responsibility Statement, the Board of Directors of the Company hereby
confirms:
i) that in the preparation of the Annual Accounts, the applicable accounting standards
have been followed;
ii) that the Directors have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company as on 31 March 2023 and
Profit and Loss Account of the Company for that period;
iii) that the Directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this Act for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) that the Directors have prepared the Annual Accounts for the Financial Year ended
31 March 2023 on a going concern basis;
v) that the Directors have laid down internal Financial controls to be followed by the
Company and that such internal Financial controls are adequate and were operating
effectively; and
vi) that the Directors have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
DECLARATION FROM INDEPENDENT DIRECTORS
The Company has received necessary declaration from each Independent Director under
Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence
laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
COMPOSITION OF THE COMMITTEES AND ITS MEETINGS
Audit Committee
The Audit Committee comprises of following Directors:
Name of the Director |
Position |
Designation on Board |
Tallam Puranam Raman |
Chairman |
Independent Director |
Rampraveen Swaminathan |
Member |
Independent Director |
Dr. Raja Rathinam |
Member |
Independent Director |
Dodla Sunil Reddy |
Member |
Managing Director |
During the period, the Audit Committee met 4 (Four) times on 16 May 2022, 02 August
2022, 22 October 2022 and 21 January 2023.
Details of the attendance of the Audit Committee held during the year ended 31 March
2023 are as follows:
|
Number of Audit Committee Meetings |
Name of the Director |
Held |
Attended |
Tallam Puranam Raman |
4 |
4 |
Rampraveen Swaminathan |
4 |
4 |
Dr. Raja Rathinam |
4 |
4 |
Dodla Sunil Reddy |
4 |
4 |
Nomination, Remuneration and Compensation Committee
The Nomination, Remuneration and Compensation Committee comprises of the following
Directors:
Name of the Director |
Position |
Designation |
Rampraveen Swaminathan |
Chairman |
Independent Director |
Raman Tallam Puranam |
Member |
Independent Director |
Dodla Sesha Reddy |
Member |
Non Executive Non-Independent Director |
During the period the Nomination, Remuneration and Compensation Committee met 2 (Two)
times on 16 May 2022 and 21 January 2023.
Details of the attendance of the Nomination, Remuneration and Compensation Committee
held during the year ended 31 March 2023 are as follows:
Name of the Director |
Number of Nomination, Remuneration and Compensation
Committee Meetings |
|
Held |
Attended |
Rampraveen Swaminathan |
2 |
2 |
Raman Tallam Puranam |
2 |
2 |
Dodla Sesha Reddy |
2 |
2 |
Stakeholders Relationship Committee
The Stakeholders Relationship Committee comprises of following Directors:
Name of the Director |
Designation |
Position on the Committee |
Raman Tallam Puranam |
Independent Director |
Chairman |
Dodla Sunil Reddy |
Managing Director |
Member |
Akshay Tanna |
Nominee Director |
Member |
During the period the Stakeholders Relationship Committee met 1 (One) time on 21
January 2023.
Details of the attendance of the Stakeholders Relationship Committee held during the
year ended 31 March 2023 are as follows:
|
Stakeholders Relationship Committee Meetings |
Name of the Director |
Held |
Attended |
Raman Tallam Puranam |
1 |
1 |
Dodla Sunil Reddy |
1 |
1 |
Akshay Tanna |
1 |
0 |
Corporate Social Responsibility (CSR) Committee
The Corporate Social Responsibility (CSR) Committee comprises of the following
Directors:
Name of the Director |
Position on the Committee |
Designation |
Dodla Sesha Reddy |
Chairman |
Non-Executive Non-Independent Director |
Akshay Tanna |
Member |
Nominee Director |
Vinoda Kailas |
Member |
Independent Director |
During the period Corporate Social Responsibility (CSR) Committee met 2 (Two) time
i.e., on 16 May 2022 and 21 January 2023.
Details of the attendance of the Corporate Social Responsibility (CSR) Committee held
during the year ended 31 March 2023 are as follows:
Name of the Director |
Number of Corporate Social Responsibility (CSR)
Committee Meetings |
|
Held |
Attended |
Dodla Sesha Reddy |
2 |
2 |
Akshay Tanna |
2 |
1 |
Vinoda Kailas |
2 |
2 |
Risk Management Committee
The Risk Management Committee consists of the following Directors:
Name of the Director |
Position on the Committee |
Designation |
Dr. Raja Rathinam |
Chairman |
Independent Director |
Akshay Tanna |
Member |
Nominee Director |
Madhusudhana Reddy Ambavaram |
Member |
Whole-time Director |
During the period Risk Management Committee met 2 (Two) time i.e., on 02 August 2022
and 21 January 2023.
Details of the attendance of the Risk Management Committee held during the year ended
31 March 2023 are as follows
Name of the Director |
Number of Corporate Social Responsibility (CSR)
Committee Meetings |
|
Held |
Attended |
Dr. Raja Rathinam |
2 |
2 |
Akshay Tanna |
2 |
1 |
Madhusudhana Reddy Ambavaram |
2 |
2 |
The Company has adopted the development and implementation of risk management policy
and analysis. The brief detail about this policy may be accessed on the Company's website
at the weblink:
https://www.dodladairv.com/static/investors/code-of-policv/Risk-Management-Policv.pdf
The Brief description of the terms of reference of Audit Committee, Nomination,
Remuneration and Compensation, Stakeholder's relationship committee and Risk Management
Committee is part of Corporate governance report forming part of this report
MEETING OF INDEPENDENT DIRECTORS
A separate meeting of the Independent Directors was held on 09 March 2023, inter-alia,
to discuss evaluation of the performance of Non-Independent Directors, the Board as a
whole, evaluation of the performance of the Chairman, taking into account the views of the
Executive and Non- Executive Directors and the evaluation of the quality, content and
timeliness of flow of information between the management and the Board that is necessary
for the Board to effectively and reasonably perform its duties.
The Independent Directors expressed satisfaction with the overall performance of the
Directors and the Board as a whole.
DIRECTORS AND OFFICERS INSURANCE (‘D&O')
As per the requirements of Regulation 25(10) of the SEBI Listing Regulations, the
Company has taken Directors and Officers Insurance ('D&O') for all its Directors and
members of the Senior Management.
BOARD PROCESSES, PROCEDURES AND PRACTICES
The company believes that the effectiveness of the board is reinforced by its
structures and the processes and procedures it follows. It has in place robust practices
and processes that contribute to the effective and efficient performance of the board.
Board systems and procedures broadly comprise convening the meetings, contents of the
agenda, conducting the meetings, decision making at the meetings, adequacy of minutes and
working of board committees.
Decisions relating to the policy and operations of the company are arrived at meetings
of the board held periodically. Meetings of the board enable discussions on matters placed
before them and facilitate decision making based on collective judgment of the board. The
company follows the best practices in convening and conducting meetings of the board and
its committees. These include:
Frequency of meetings
A minimum of four board meetings is held each year with the time gap between any two
successive meetings not exceeding 120 days. Meetings of the committees are also planned
and scheduled to be held along with the board meetings.
Board agenda
It strikes a fine balance between the reviews of the past performance and
forward-looking issues. The agenda is structured such that routine and administrative
matters do not consume too much board time. The agenda is made available to the directors
along with supporting documents sufficiently in advance of the meetings.
Decision making process
The board follows a culture of openness and debate by facilitating effective
contribution of all directors and ensuring constructive relations among the directors.
Constructive discussions are facilitated leading to effective decision making. The
chairman ensures that adequate time is available for discussion of all agenda items in
particular strategic issues.
Availability of information to the board
The board should be supplied in a timely manner with information in a form and of a
quality appropriate to enable it to discharge its duties. Under the advice and direction
of the chairman, the company secretary's responsibility includes ensuring good information
flows within the board as well as between senior management and non-executive directors.
The following information, inter alia, is provided to the directors of the company:
• Annual operating plans and budgets and any updates.
• Capital budgets and any updates.
• Quarterly results for the company
• Minutes of meetings of audit committee and other committees of the board
• General notices of interest received from directors.
• Show cause, demand, prosecution notices and penalty notices which are materially
important.
• Fatal or serious accidents, dangerous occurrences, any material effluent or
pollution problems
• Any material default in Financial obligations to and by the company
• Any issue, which involves possible public or product liability claims of
substantial nature, including any judgment or order which, may have passed strictures on
the conduct of the company.
• Non-compliance of any regulatory, statutory duty
• Legal compliance reports and details of payment of statutory dues
Role of the Chairman
The chairman is responsible for leadership of the board and ensuring its effectiveness
on all aspects of its role. The role includes:
• Making certain that an effective decision-making process is in place in the
board, and that the board's committees are properly structured with appropriate terms of
reference
• Encouraging the active engagement of all board members in board and committee
meetings, drawing fully on their skills, experience, knowledge and, where appropriate,
independence;
• Building effective relationships founded on mutual respect and open
communication - both inside and outside the boardroom - between the non-executive
directors and executive team, in particular with regard to the identification and
oversight of significant risks.
Role of Managing Director
The Managing Director (MD) lives and upholds the highest standards of integrity and
probity inside and outside the boardroom, through setting clear expectations in terms of
culture and values, as well as in terms of the style and tone of board discussions. The MD
encourages directors to express their views frankly and challenge constructively in order
to improve the standard of discussion in the boardroom. The MD appreciates that
constructive challenge from non-executive directors is an essential aspect of good
governance and encourage the nonexecutive colleagues to probe proposals, especially when
issues of judgement are concerned. The role includes:
• Setting a board agenda which is primarily focused on business, strategy,
accountability, competitive performance and value creation;
• ensuring that issues relevant to this objective are reserved for board
consideration, including determining the nature and extent of the significant risks the
board is willing to embrace in the implementation of its strategy;
• developing, in particular, a productive working relationship with the CEO,
providing support and advice while respecting executive responsibility;
• consulting the senior independent director on board matters consistent with
regulations;
• ensuring effective processes are established relating to succession planning and
the composition of the board, having regard to the benefits of diversity;
Role of CEO
The CEO is vested with operational responsibility for delivering the company's
strategy. The CEO's relationship with the chair and MD is the key dynamic that underpins
the effectiveness of the board. The CEO, with the support of the executive team, has
primary responsibility for communicating to the people working within the business the
expectations of the board in relation to the company's culture, values and behaviours.
He has the most intimate knowledge of the company and its capabilities. This is
evidenced when making proposals and exercising judgement, particularly on matters of
strategy.
Role of CFO
The Chief Financial Officer (CFO) is a key position within the company and is
responsible for overseeing Financial activities and providing strategic Financial
guidance. The CFO is responsible for developing and executing the company's Financial
strategy and analyzing data and market trends to make informed decisions that maximize
profitability and shareholder value, Financial planning and analysis, producing accurate
forecasts, and collaborating with other departments to achieve Financial goals.
Additionally, the CFO plays a key role in risk management, identifying and mitigating
Financial risks to ensure the stability and success of the business.
The CFO is also responsible for maintaining accurate and transparent Financial
reporting and ensuring compliance with accounting standards and regulations. They control
the company's capital structure by making financing and investment decisions in order to
optimize capitalization and liquidity. The CFO also acts as a liaison between the company
and external stakeholders, providing information on Financial performance and establishing
Financial controls. Their knowledge and leadership skills contribute to the company's
Financial health and success.
Role of Company Secretary in overall governance process
The company secretary has a key role to play in facilitating the effective functioning
of the board through the timely presentation of board information which - by being
accurate, clear and comprehensive - assists high-quality decision making.
Under the direction of the Chairman and MD, the company secretary's responsibilities
include ensuring accurate information flows within the board and its committees, between
senior management and non-executive directors, as well as facilitating induction and
assisting with professional development. All directors have access to the advice and
services of the company secretary who is responsible to the Board for ensuring that Board
procedures are complied with. In addition, the Company Secretary discharges the functions
prescribed under the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014. Besides, the company secretary acts as secretary of the Board and its
committees thereof.
The Company Secretary ensures transparency of information among all the stakeholders,
He also updates Board with regular updates on Various statues which has significant impact
on the operations of the Company , Board and Committees.
Decision making at the Board.
Effective and good decision-making at the board is facilitated by:
• ensuring that directors are afforded adequate time to prepare for meetings;
• allowing time for debate and challenge, especially for complex, contentious or
business-critical issues;
• achieving timely closure on decisions taken; and
• providing clarity for executives on the actions required.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual
evaluation of its own performance and that of its committees as well as performance of the
Directors individually. Feedback was sought by way of a structured questionnaire covering
various aspects of the Board's functioning such as adequacy of the composition of the
Board and its Committees, Board culture, execution, and performance of specific duties,
obligations and governance and the evaluation was carried out based on responses received
from the Directors.
The evaluation is performed by the Board, Nomination, Remuneration and Compensation
Committee and Independent Directors with specific focus on the performance and effective
functioning of the Board and Individual Directors.
The above criteria are broadly based on the Guidance Note on Board Evaluation issued by
the Securities and Exchange Board of India.
The Board and the Nomination, Remuneration and Compensation Committee reviewed the
performance of individual directors on the basis of criteria such as the contribution of
the individual director to the board and committee meetings like preparedness on the
issues to be discussed, meaningful and constructive contribution and inputs in meetings,
etc.
At the board meeting that followed the meeting of the independent directors and meeting
of Nomination, Remuneration and Compensation Committee, the performance of the Board, its
committees, and individual directors was also discussed. Performance evaluation of
independent directors was done by the entire Board, excluding the independent director
being evaluated.
FAMILIARIZATION PROGRAMMES
The Members of the Board of the Company have been provided opportunities to familiarize
themselves with the Company, its Management, and its operations. The Directors are
provided with all the documents to enable them to have a better understanding of the
Company, its various operations, and the industry in which it operates.
All the Independent Directors of the Company are made aware of their roles and
responsibilities at the time of their appointment through a formal letter of appointment,
which also stipulates various terms and conditions of their engagement.
Key management personnel of the Company presents to the Board Members on a periodical
basis, briefing them on the operations of the Company, plans, strategy, risks involved,
new initiatives, etc., and seek their opinions and suggestions on the same. In addition,
the Directors are briefed on their specific responsibilities and duties that may arise
from time to time.
The Statutory Auditors and Internal Auditors of the Company presents to the Board of
Directors on Financial Statements and Internal Controls including presentation on
regulatory changes from time to time.
The detail policy on the familiarisation programme is available on the website at www.dodladairv.com
CODE OF CONDUCT
The Company has laid down a which has been effectively adopted by the Board Members and
Senior Management Code of Conduct Personnel of the Company.
The detail policy on the Code of Conduct is available on the website at www.dodladairv.com
EMPLOYEES STOCK OPTION PLAN
During the year 2018-19, your Company adopted an Employees Stock Option Plan named as
"Dodla Dairy Limited Employees Stock Option Plan 2018" ("ESOP
Scheme").
The options to acquire shares by way of ESOP plan shall be granted to the eligible
employees who are in the permanent employment of the Company working in India or outside
including directors of the Company whether whole time or not (excluding independent
directors).
As per the ESOP plan 2018 dated 23 March 2018 and as amended by 1st
Amendment to ESOP 2018, the aggregate number of Options which may be issued by the Company
under ESOP Plan is 13,91,800 options and as per the revised grant letter dated 19 July
2018 issued by the Company under ESOP Plan is 8,35,074 options each option shall entitle
the option holder to One Equity Share in the Company.
During the year 2020-21 and until the date of this report, the Company approved vesting
of KRA based, and time based Options of 8,35,074 to BVK Reddy, CEO of the Company.
As per Rule 12 of the "Companies (Share Capital and Debenture) Rules, 2014"
and SEBI regulations the declaration is as follows:
Sl. No |
Particulars |
Details |
a. |
Options granted |
8,35,074 |
b. |
Options vested |
8,35,074 |
c. |
Options exercised |
NIL |
d. |
The total number of shares arising as a result of exercise of option |
NIL |
e. |
Options lapsed |
NiL |
f. |
The exercise price |
213.3929 |
g. |
Variation of terms of options |
NIL |
h. |
Money realized by exercise of options |
NIL |
i. |
Employee wise details of options granted: |
|
(i) Key Managerial Personnel:
Sr. no. Name of the employee |
Employee code |
No. of options |
1 Venkat Krishna Reddy Busireddy |
0002 |
8,35,074 |
(ii) any other employee who receives a grant of options in any one year of option
amounting to five percent or more of options granted during that year - Nil
(iii) identified employees who were granted option, during any one year, equal to or
exceeding one percent of the issued capital (excluding outstanding warrants and
conversions) of the company at the time of grant - Nil
PARTICULARS OF LOANS, GUARANTEES, SECURITIES OR INVESTMENTS UNDER SECTION 186
Details of loans, guarantee and investments are given in Note no. 8, 9,15, 20 and 25 to
the Financial Statements attached.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
ALL the Related party transactions that were entered into during the Financial year
were on an arm's length basis and were in the ordinary course of business. There are no
materially significant Related party transactions made by the Company with Promoters,
Directors, Key Managerial Personnel, or other designated persons which may have a
potential conflict with the interest of the Company at Large. All the Related party
transactions are approved by the Audit Committee and Board of Directors.
The Company has adopted a PoLicy on Related Party Transactions for the purpose of
identification and monitoring of such transactions.
The particulars of contracts or arrangements with Related parties referred to in sub
section (1) of Section 188 entered by the Company during the Financial Year ended 31 March
20223 in prescribed Form AOC-2 is appended to this Report as Annexure - III.
The poLicy on Related Party Transactions as approved by the Board is upLoaded on the
website of the Company and the web Link is https://www.dodladairv.com/static/investors/code-of-policv/Policv%20on%20Related%20Partv%20
Transactions.pdf
STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL
DiscLosures pertaining to remuneration and other detaiLs as required under Section
197(12) of the Act read with RuLe 5 of the Companies (Appointment and Remuneration of
ManageriaL PersonneL) RuLes, 2014 are annexed to this Board's Report as Annexure - IV.
ANNUAL RETURN
In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies
(Management and Administration) Rules, 2014, the Annual Return of the Company is available
on the website of the Company at the web-link : https:// www.dodladairv.com/annual
return
CORPORATE SOCIAL RESPONSIBILTY POLICY
The brief outline of the corporate social responsibility (CSR) policy of the Company
and the initiatives undertaken by the Company on CSR activities during the year is
appended to this Report as Annexure - V in the format prescribed in the Companies
(Corporate Social Responsibility Policy) Rules, 2014.
A detail policy is available on the website of the Company at the weblink: https://www.dodladairv.com/static/
investors/code-of-policv/CSR%20%20Policv.pdf
THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
PURSUANT TO THE PROVISIONS OF SECTION 134(3) (M) OF THE COMPANIES ACT, 2013 (ACT) READ
WITH THE COMPANIES (ACCOUNTS) RULES, 2014
Information with respect to conservation of energy, technology absorption, foreign
exchange earnings and outgo pursuant to Section 134(3) (m) of the Act read with Companies
(Accounts) Rules, 2014 is appended to this Report as Annexure - VI.
DEPOSITS
The Company has not accepted any deposits from the public in terms of Chapter V of the
Companies Act, 2013. Hence, no amount on account of principal or interest on public
deposits was outstanding as on the date of the balance sheet.
MAINTENANCE OF COST RECORDS SPECIFIED BY THE CENTRAL GOVERNMENT UNDER SECTION 148 OF
THE COMPANIES ACT, 2013
The provisions relating to maintenance of Cost Records as specified by the Central
Government under Section 148 of the Companies Act, 2013 is not applicable to the Company.
DISCLOSURE ABOUT COST AUDIT
During the Financial year under review, your Company has not crossed the threshold
limits prescribed for appointment of Cost Auditor as per provisions of Section 148 of the
Companies Act, 2013 and rules made thereunder.
AUDITORS, AUDIT QUALIFICATIONS AND BOARD'S EXPLANATIONS
Statutory Auditors
As per Section 139 of the Companies Act, 2013, read with your Companies (Audit and
Auditors) Rules, 2014, the members of the Company in 27 Annual General Meeting of the
Company ('27 AGM') approved the appointment of M/s. S.R. Batliboi & Associates LLP,
Chartered Accountants (ICAI Firm Registration No. 101049W/E300004) as the Statutory
Auditors of the Company for a term of five consecutive years i.e. from the conclusion of
27 AGM till the conclusion of 32 AGM.
The Report given by M/s. S.R. Batliboi & Associates LLP on the Financial Statements
of your Company for the Financial year 2023 is part of the Annual Report. The Notes on the
Financial Statements referred to in the Auditor's Report are self-explanatory and do not
call for any comments. The Auditor's Report does not contain any qualification,
reservation, adverse remark or disclaimer. During the year, the Auditors had not reported
any matter under Section 143 (12) of the Act, therefore, no detail is required to be
disclosed under Section 134 (3) (ca) of the Act.
Secretarial Auditors Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and
Regulation 24A of SEBI Listing Regulations, m/s. MNM & Associates, Practising Company
Secretaries had been appointed as Secretarial Auditor, to undertake Secretarial Audit of
the Company for the FY 2022-23. The report of the Secretarial Auditor in the prescribed
Form MR-3 is annexed to this report as Annexure- VII.
Internal Auditors
The Board of Directors of the Company has appointed M/s. BDO India LLP as Internal
Auditors to conduct Internal Audit of the Company for the Financial Year ended 31 March
2023.
REPORTING OF FRAUDS BY AUDITORS
During the year under review, the Statutory Auditors, Internal Auditors and Secretarial
Auditor have not reported any instances of frauds committed in the Company by its
Directors or Officers or Employees to the Audit Committee under section 143(12) of the
Companies Act, 2013, details of which needs to be mentioned in this Report.
VIGIL MECHANISM (WHISTLE BLOWER POLICY)
The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed
thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 is implemented through the Company's Whistle Blower Policy.
The Company has adopted a Whistle Blower Policy establishing a formal vigil mechanism
for the Directors and employees to report concerns about unethical behaviour, actual or
suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate
safeguards against the victimization of employees who avail of the mechanism and provides
direct access to the Chairperson of the Audit Committee in exceptional cases. It is
affirmed that no personnel of the Company have been denied access to the Audit Committee.
The policy of vigil mechanism is available on the Company's website.
The Whistle Blower Policy aims for conducting the affairs in a fair and transparent
manner by adopting highest standards of professionalism, honesty, integrity and ethical
behaviour. All employees of the Company are covered under the Whistle Blower Policy.
The brief detail about this mechanism may be accessed on the Company's website at the
weblink: https://www.
dodladairv.com/static/investors/code-of-policv/Risk-Management-Policv.pdf
PREVENTION OF SEXUAL HARASSMENT
The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace
in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013.
The Company has not received any complaints during the year.
The Company regularly conducts awareness programs for its employees.
The following is a summary of sexual harassment complaints received and disposed off
during the year:
S. No. |
Particulars |
Status of the No. of complaints received and disposed off |
1 |
Number of complaints on Sexual harassment received |
Nil |
2 |
Number of Complaints disposed off during the year |
Not Applicable |
3 |
Number of cases pending for more than ninety days |
Not Applicable |
4 |
Number of workshops or awareness programme against sexual harassment
carried out |
The Company regularly conducts necessary awareness programs for its
employees. |
5 |
Nature of action taken by the employer or district officer |
Not Applicable |
Constitution of Internal Complaints Committee under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has constituted an Internal Complaints Committee under the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The
Company has not received any complaints during the year.
NOMINATION, REMUNERATION AND COMPENSATION POLICY
In pursuance of the Company's policy to consider human resources as its invaluable
assets, to pay equitable remuneration to all Directors, Key Managerial Personnel (KMP) and
Employees of the Company, to harmonize the aspirations of human resources consistent with
the goals of the Company and in terms of the provisions of the Companies Act, 2013 and the
SEBI (LODR) Regulations, 2015 as amended from time to time, the policy on nomination and
remuneration of Directors, Key Managerial Personnel and Senior Management has been
formulated.
The said policy of the Company is available on the Company's website at: https://www.dodladairv.com/static/investors/
code-of-policy/N-R-Committee-Charter.pdf
STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL
Disclosures pertaining to remuneration and other details as required under Section
197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is part of this Report.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with Secretarial Standards issued by the Institute of Company
Secretaries of India.
PREVENTION OF INSIDER TRADING CODE
As per SEBI (Prohibition of Insider Trading) Regulation, 2015, the Company has adopted
a Code of Conduct for Prevention of Insider Trading. The Company has appointed Surya
Prakash M , Company Secretary as Compliance Officer from 22 October 2021, who is
responsible for setting forth procedures and implementing of the code for trading in
Company's securities. During the year under review, there has been due compliance with the
said code.
MANAGEMENT DISCUSSION AND ANALYSIS
In terms of the provisions of SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015 as amended from time to time, the Management's Discussion and Analysis
as Annexure - VIII.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
The 'Business Responsibility and Sustainability Report (BRSR) of your Company for the
year ended 31 March 2023 forms part of this Annual Report as required under Regulation
34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
as Annexure - IX.
CORPORATE GOVERNANCE
The Company has a rich legacy of ethical governance practices and committed to
implement sound corporate governance practices with a view to bring about transparency in
its operations and maximize shareholder value.
A Report on Corporate Governance along with a Certificate from the Secretarial Auditors
of the Company regarding compliance with the conditions of Corporate Governance as
stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 forms part of the Annual Report as Annexure - X.
THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR
TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There have been no significant material orders passed by the Regulators or Courts or
Tribunals which would impact the going concern status of the Company and its future
operations.
During the year under review, no application was made or any proceedings pending
against the Company under the Insolvency and Bankruptcy Code, 2016.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments affecting the Financial position of the
Company which occurred between the Financial Year ended 31 March 2023 to which the
Financial Statements relates and the date of signing of this report.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has laid down internal Financial control's, through a combination of Entity
level controls, Process level controls and IT General controls inter-alia to ensure
orderly and efficient conduct of business, including adherence to the Company's policies
and procedures, accuracy and completeness of accounting records and timely preparation and
reporting of reliable Financial statements/ information, safeguarding of assets,
prevention and detection of frauds and errors. The evaluations of these internal Financial
controls were done through the internal audit process and were also reviewed by the
Statutory Auditors. Based on their view of these reported evaluations, the directors
confirm that, for the preparation of Financial statements for the Financial year ended 31
March 2023, the applicable Accounting Standards have been followed and the internal
Financial controls are generally found to be adequate and were operating effectively &
that no significant deficiencies were noticed.
INTERNAL AUDIT & CONTROL SYSTEMS
Your Company has a well-defined and documented internal control system, which is
adequately monitored. Checks & balances and control systems have been established to
ensure that assets are safe guarded, utilized with proper authorization and recorded in
the books of account. The Internal control systems are improved and modified continuously
to meet the changes in business conditions, statutory and accounting requirements.
These are supplemented by internal audit of your Company carried out by reputed firms
of Chartered Accountants across India. Your Company has an Audit Committee consisting of
Four Directors in which one is Executive and three are Non-executive independent
Directors. The Audit Committee of the Board of Directors are periodically apprised of the
internal audit findings and corrective actions taken. The Audit Committee of the Board of
Directors reviews the adequacy and effectiveness of internal control system and suggests
improvements if any for strengthening them. Your Company has a robust Management
Information System which is an integral part of the control mechanism.
INSURANCE
ALL properties and insurable interests of the Company have been fully insured.
CREDIT RATING
Given below are the ratings given to the Company by ICRA Limited during the Financial
Year ended 31 March 2023:
Facilities |
Rating |
Long Term Scale on Bank limits |
[ICRA]AA- (Stable) |
Short-Term Scale on Bank limits |
[ICRA]A1 + |
Cash Credit / Short term Loan on Bank limits |
[ICRA]AA- (Stable) / [ICRA]A1 + |
Instrument Rated (NCD) |
[ICRA]AA- (Stable) Withdrawn |
QUALITY
The company has established stringent quality control measures right from the milk
collection level at a village to the consumers at the urban level, which include screening
for various adulterants such as sugar, salt, urea, vegetable oil, detergents, maltodextrin
etc. More than 95% of raw milk is being procured directly from the farmers. Recently, we
have started checking Standard Plate Count (SPC) across all our Chilling Centers and
Plants, which contributed for improvement in quality of raw milk. All our plants are
certified with either FSSC 22000 V5.1 or ISO 22000:2018. We have deployed advanced FT
machines at our major processing plants to check quality of incoming raw milk and finished
products. We are continuously driving awareness programs on clean milk production to our
farmers and vendors. We use the most advanced technologies for maintaining highest
standards of quality. Since inception, Quality has been our top priority and we are
committed to it.
BRANDING
As Dodla celebrates 25 years of successfully serving its consumers, we remain committed
to delivering best quality milk and milk products packed with highest standards of hygiene
at our state-of-the-art plants. At the same time, Dodla has undertaken a 360-degree
approach to build brand equity by reaching out to consumers through different media like
TV, Print, Digital, out-of-home. Dodla is also dialling up its presence in new age
channels like E-Commerce to build salience with millennials. Dodla aims to become the most
preferred dairy brand through continuous consumer engagement.
AWARDS AND RECOGNITIONS
During the Financial year 2022-23 the Company has received the following awards:
"CII award for food safety 2022 - Commendation Certificate for Significant
Achievement in Food Safety" award from CII's Food and Agriculture Centre of
Excellence (FACE) in "Dairy Products Large Business" for two of our units i.e.
Gundrampally and Chendurthi. "National Safety Council of India Safety Awards -
2022" in manufacturing sector awarded to Dodla Dairy Limited, Nellore Plant,
Andhra Pradesh.
INITIATIVES FOR STAKEHOLDER AND CUSTOMER RELATIONSHIP
The Company has an effective Investor Relations Program ("IR") through which
the Company continuously interacts with the investor community across various channels
(Periodic Earnings Calls, Individual Meetings, Participation in One-on- One interactions
and group meetings). The Company ensures that critical information about the Company is
available to all the investors by submitting all such information to the Stock Exchanges
and also uploading the information on the Company's website under the Investors Corner.
The Company strives to adopt emerging best practices in IR and building a relationship
of mutual understanding with investors and analysts.
We place our customers at the centre of everything we do, aiming to provide food
products effortlessly through world class process and systems. Development of robust
customer relationship management is the top priority of the Organisation. Dodla has,
therefore, taken great care in recognising the processes and frameworks that require
attention to stringent checks and process for all its dairy products. It requires us to
spend significant management time but at the same time, leads to better business and a
better brand.
Customer satisfaction is the most important measure of success in our industry. All the
effort we put in everyday gets translated into our high Customer retention and repeat
customer volume. We reach out our customers to get their feedback about our products. In
addition, we seek inputs on their future roadmap and priorities. This helps us measure the
health of our relationships with our customers and what we can do to add value.
ENVIRONMENT, HEALTH AND SAFETY
The Company is committed to provide a safe and healthy work environment for the
well-being of all our Stakeholders. We regularly provide our employees with required EHS
Related training programmes enabling them to avoid accidents at all levels of workplace.
We have created a safe and healthy environment by installing safety guards for all the
machinery with regular maintenance. We consistently monitor our Environment, Safety &
Health activities and continue to implement the risk reduction programmes that are aimed
at reducing hazards at workplace by infusing latest technology and sustainable planning.
Over the decade the company has adopted recycling of water, rain harvesting, solar panel
installation and this has been continuous process at all our plants. We are conducting
annual medical camps for all employees and workers across all locations. The company has
no manual involvement from source to final product i.e., this makes all the employees and
workers safe at awork place. We are providing personal accident insurance to milk
collection agents. We are also using electric vehicles for milk procurement and
distribution of milk products at few locations currently.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
The Company believes that providing a congenial environment is a critical success
factor for the organization growth and sustenance. The Company has taken all necessary
steps through various policies and procedures to ensure good, safe and healthy environment
across all locations. Also, Human resource development has been taken up as prime agenda
and number of leadership development initiatives have been rolled out during the FY
2022-23 to ensure the people preparedness to handle the future growth. Many of the HR
activities has been digitalized to enable employees to get all services on their
fingertips. We have conducted many employee engagement programs/ activities, which
improved the cross functional teamwork at all locations and among the departments. We have
upgraded our PMS evaluation process and created methodical approach for clear cut
identification of each employee contribution during the entire year through automation.
This has enabled us to identify the potential people on whom the organization should
invest time and energy while ensuring their growth path in the organization.
With regard to industrial relations, we have initiated a grievance redressal mechanism
policy at all locations by installing grievance boxes at all plants, ccs and sales offices
and encouraging all the employees and workers to raise their concerns/ challenges/ issues
in writing. We have constituted grievance redressal committee at all locations to address
and resolve the issues/ concerns raised. We have Safety Committee, Canteen Committee and
Emergency Response Team at all plants constituting equal number of members from employees
and workers.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to express their sincere gratitude to the
Government of India, Government of Andhra Pradesh, Telangana, Karnataka, Tamil Nadu,
Maharashtra and other States, Registrar of Companies - Telangana, farmers, Distributors,
lenders including bankers and most importantly consumers for support, your Company has
been privileged to receive.
Your directors thank the shareholders for the confidence reposed in the Company and for
their continued support and co-operation. We place on record our appreciation of the
contribution made by our employees at all levels. Our consistent growth was made possible
by their hard work, solidarity, cooperation and support.
|
On behalf of the Board of Directors |
|
For Dodla Dairy Limited |
|
|
Dodla Sunil Reddy |
Dodla Sesha Reddy |
Place: Hyderabad |
Managing Director |
Director |
Date: 20 May 2023 |
DIN:00794889 |
DIN:00520448 |
Note: Except as otherwise stated, all the numbers in the Director's Report are on
standalone basis
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