ANNUAL REPORT 2002-2003

Shri Ashok Jain, I.A.S. Chairman & Managing Director, RCDF Chairman

Shri Purushottam Agarwal, I.A.S. Secretary (Plan),Govt. of Rajasthan Director

Shri B.L. Arya, I.A.S. Registrar, Co-op. Societies, Govt. of Rajasthan, Director

Shri S.P. Baswal, Special Secretary, AH & DD,Govt. of Rajasthan, Director

Shri B.L. Garg, Dy. Secretary (Finance), Govt. of Rajasthan Director

Shri D.K. Sen, Regional Director (NR), National Dairy Development Board, New Delhi Director

Shri D.C. Gupta, Secretary to the Board

Statutory Auditors A. Kaushik & Associates, P-4, Tilak Marg, 'C' Scheme, Jaipur.

Internal Auditors M/s. L.D. Sharma & Company 202, Guru Kripa Tower, 'C' Scheme, Jaipur.

Bankers Oriental Bank of Commerce "Saras Sankul", J.L.N. Marg, Jaipur.

INFRASTRUCTURE OF RCDF & MILK UNIONS

A. INPUT FACILITIES LOCATION EXOTIC NUCLEUS FARM BASSI FROZEN SEMEN BANK BASSI FODDER SEED FARM ROJARI / BASSI / PAL SEED PROCESSING PLANT BIKANER B. CATTLE FEED PLANTS

(OF 150 MT PER DAY EACH)

ONE EACH AT

AJMER, BIKANER, JODHPUR & NADBAI

C. MILK PROCESSING FACILITIES & TRAINING CENTRES

MILK PROCESSING

MILK DRYING

CHILLING CHILLING CENTRES

ICE FACTORY

TRAINING CENTRE

CAPACITY

UNION

(TLPD) (MTPD) (TLPD) (NOS.) (TLPD) (NOS.) AJMER 100 10 - 1 ALWAR 150 10 - 1 BANSWARA 30 - - BHARATPUR - - - - 30 BHILWARA 150 - - - 30 1 BIKANER 150 5 130 4 1 CHURU 30 - GANGANAGAR 100 10 30 2 20 JALORE 50 10 10 1 20 JAIPUR 300 10 50 1 110 1 JODHPUR 100 5 90 6 1 KOTA 25 - - - 25 PALI 60 - 20 1 20 SIKAR - - - - 30 TONK/SWM 40 - 20 UDAIPUR 60 - - - 10 1 TOTAL 1345 60 330 15 315 7 NOTE :

TLPD : Thousand Litres per day

MTPD : Metric Tonne per day

DIRECTORS' REPORT

Dear Shareholders,

Your Directors are pleased to present the XVIth ANNUAL REPORT of the Federation along with the audited Balance Sheet, Profit & Loss Account and Auditors' Report for the financial year 2002-03.

Financial Results

The Federation's performance in the financial year 2002-03 has substantially improved over the last year. The turnover during the year has registered an increase of 45.30 per cent from Rs.183.74 crores in 2001-02 to Rs.266.97 crores. The gross profit has gone up to Rs.14.17 crores as compared to Rs.12.69 crores for the year 2001-02 registering an increase of around 11.66 per cent. The net profit, however, has declined from Rs.7.50 crores to Rs.5.47 crores in the year 2002-03. The primary reason for decline in net profit has been the fact that the State has witnessed severe draught conditions continuously for the last four years. The effect of this was felt very adversely in the year 2002-03. The conditions became even worse after the failure of monsoon in the year 2002. The RCDF and its Milk Unions had to rise to the occasion to provide cattle feed to the milk producers with minimum margins coupled with higher sale volumes as compared to the previous years.

The accumulated loss as on 31.3.2003 stands at Rs. 42.04 crores showing a decline from the accumulated loss of Rs.47.51 crores as on 31.3.2002.

It may be mentioned that RCDF is not getting any grant from Government of Rajasthan or any other agencies against its current expenditure. The funds are being managed/generated from its own sources.

Dividend

In view of the accumulated loss, Directors express their inability to recommend any dividend to shareholders.

Main Operational Highlights

The year 2002-03 has been a year of all-round growth in all key areas of business.

Strengthening of Co-operative set up

Number of registered Dairy Co-operative Societies has increased to 6961 as against 6461 in the previous year. Approximately 27000 new members have joined the programme during the year 2002-03. This is reflective of producers' faith in the co-operative system.

Milk Procurement

Efforts at all levels resulted in the average milk procurement having gone up to 12.48 lac kgs. per day in the year 2002-03 from 11.04 lac kgs. per day in the year 2001-02, registering an impressive growth of 13 per cent. Members shall be pleased to know that this growth is the second highest increase in milk procurement in the country.

Payment to Producers

Payment to producers has gone up by 18 per cent - from 375.70 crores to 446.04 crores.

Milk Marketing

Saras milk has found great favour with consumers of all age groups by its wholesomeness and quality. The liquid milk sale has increased from 6.14 lac litres per day to 7.18 lac litres per day showing a growth of 16.94 per cent during the year. This growth is the highest amongst the Northern States of the country.

Supply to NMG

Average milk supplies to NMG were at an average level of 5.05 lac kgs. per day, up from a level of 4.25 lac kgs. per day in the previous year.

Cattle Feed Sale

It is very heartening to inform you that Saras cattle feed has gained excellent popularity amongst the milk producers and other farmers on account of consistent high quality and rich contents. The feed is fortified with Vitamin AD3 too.

The sale of cattle feed had gone up to 1,96,580 MT from previous year's level of 1,41,399 MT - a quantum jump of 39 per cent. Members shall be pleased to know that Rajasthan has registered the highest growth amongst the Northern States. Next to Rajasthan is Punjab with about 17 per cent growth.

Integrated development - a hallmark of the year

Rajasthan being an arid zone with limited irrigation facilities, largely depends on sporadic rains for agriculture. Therefore, Animal Husbandry is a primary activity for sustenance of livelihood at the

village level. RCDF plays a vital role in the animal husbandry sector by taking care of the dairy development in the State. The year 2002-03 has been one of great significance for reasons of adopting an integrated approach for development at village level by drawing plans for :

Ø Social security and women empowerment,

Ø Well-being of cattle wealth,

Ø Collective enterprise with transparency and accountability at the level of Dairy Co-operative Societies,

Ø Efficient plant management,

Ø Marketing of milk & milk products with focus on consumer delight.

Social security and women empowerment

Social security through "Saras Surkasha Kavach"

Most of the milk producers hitherto suffered in silence against natural and other calamities. RCDF took initiative in providing a suitable cover to its member producers. A master policy named `Saras Suraksha Kavach' was negotiated with General Insurance Co. to provide cover against calamities like Accident, Fire, Riot, Flood, Earthquake, Burglary, Cash in transit etc.. The premium of Rs.54.00 per member for the policy was shared by RCDF, Milk Union and DCS. Thus the beneficiary contribution was only Rs. 2/- per month. Till date 76175 members have been insured and claims worth Rs. 11.3 lac have been settled.

Natural Death was not covered in the said Insurance and RCDF is now trying to get the policy from LIC/GIC which would cover Natural Death also.

Women Empowerment : Rajasthan Women Dairy Project (WDP):

RCDF, recognising the valuable contribution of women in dairy development had drawn up ambitious project for women and child development. It is heartening to inform that the Ministry of HRD, Department of Women & Child Development and Govt. of India has sanctioned Women Dairy Project to RCDF. So far 19 districts of Rajasthan have been covered. Six Phases of Women Dairy Project covering 11 districts have been completed and two Phases covering 8 districts have been sanctioned now with a total outlay of Rs. 7.12 Crores. Under this, till date 1458 Women Dairy Co-operative Societies have been formed with a registered membership of 1,02,860. The Projects have been evaluated by Vaikunth Mehta National Institute of Co-operative Management, Pune. This project has brought out the managerial potential of women in managing the business of milk in its totality whereby empowering them in the true sense.

Introducing the farmers to scientific vermicomposting :

Under the recent concept of organic farming and to achieve the objective of organic milk and to use the organic waste of dairy plants, RCDF has initiated a programme of Vermicomposting with the help of NGO, Morarka Foundation, Jaipur. RCDF is producing about 200 MT of vermicompost per month. Vermicompost produced is distributed to the farmers at a reasonable price. Training in this regard is also being given to the farmers. Uptill now 239 farmers have been trained. This on one hand augments the income level of the farmers by adopting this as a business activity and on the other hand it will enrich the soil for better agriculture produce.

Well-being of cattle wealth

RCDF realises the importance of taking care of the cattle wealth by providing necessary fodder, balanced feed, breeding facilities and medical treatment of cattle. It has, therefore, drawn various programmes to take care of these aspects.

Fodder development:

Under the recent major input programme the fodder development activities have been taken up by RCDF through which major fodder crops and their seed is grown on Rojari, Bassi and Pal Farms and seed is supplied to the dairy farmers on no profit / no loss basis. The major fodder crops are lucerne, oat, bajra, barseem Sorghum Sudan Grass etc. In the year 2002-03 total 67,285 quintals of fodder seed was sold through which 4656 acres of land was sown to produce 1.18 crore quintals of green fodder.

Balanced Feed

RCDF has maintained that balanced cattle feed enriched with Vitamin AD3 and all other necessary trace minerals should be provided to the milk producers for overall health of their cattle. Mineral mixture containing all vital trace minerals which protect the animals from various diseases, improves fertility and enhances milk production, has been necessarily added in the cattle feed manufactured at all the four plants. So far, RCDF has only one mineral mixture plant at Jodhpur. Another plant will be commissioned soon at Ajmer.

Urea Molasses Bricks (UMB) are produced at Ajmer and Jodhpur. These provide proteins, minerals and carbohydrates to the animals.

Breeding

Artificial Insemination Programme has been undertaken by RCDF and till date a total of 585 AI Centres have been established which cover 1240 DCSs. To supply the frozen semen to the AI Centres of Milk Unions as well as to A.H. Department, a Frozen Semen Station is established at Bassi which supplies the Semen of exotic and native breeds. During the year 2002-03 the Frozen Semen Station at Bassi has produced and sold 6.8 lac doses of semen from Exotic and native breeds.

Medical treatment of cattle

For giving the animal health aid to the milk producers on self sustaining basis a scheme named as "SPARSH" has been formulated at RCDF level for the benefit of the producers on no profit / no loss

basis. SPARSH envisages formation of a Trust at each Union level in which the corporate funds will be provided by RCDF/Milk Union and membership fee will be charged from the milk producers. The producers will get the facilities of animal health, emergency veterinary services, Vaccination, AI facilities etc.

Collective enterprise with transparency and accountability at DCS level

Latest technology at work

The Dairy Co-operative Societies are becoming a model of efficient business centres. The milk collection system at the DCS has been modernised with the installation of Electronic Milko Testers and Auto Milk Collection Stations (AMCS). Many of the Societies are now even going for latest AMCS which incorporate personal computers for excellent management of data and financial statements. The details of milk poured along with its fat contents and amount payable is instantly provided to the milk producers at the DCS level.

The ease with which such modern day gadgets are operated by local people including women with very modest education background speaks volumes of the potential available at village level. Maintaining of account books, auditing, holding management committee meetings and decision making have transformed the lives of people at the village level. This has brought about desired transparency and accountability of those managing the DCS affairs to the entire satisfaction of the member milk producers.

Clean Milk Production

In order to produce quality products comparable with the best in the market Clean Milk Production (CMP) is being effectively taken up right from milking of animals to storage and transportation to the dairy plant. Mass Awareness Programmes among the milk producers about CMP practices are being organised. Milk producers are advised to deliver milk at DCS level in hygienic conditions and in best of its quality. Releasing that maintaining a cold chain from DCS level itself would preserve the quality of milk reaching the dairy plants; Bulk Coolers at DCS level have been setup initially on some of the milk routes which would act as models for others.

Efficient Plant Management

Lot of emphasis is being placed on efficient plant management for conversion of milk into various kinds of milk and milk products. The areas identified include:-

Stream lining the processes for producing consistent quality of milk and milk products. Five Milk unions namely Alwar, Bikaner, Bhilwara, Jaipur & Udaipur have got ISO 9000 and HACCP 15000 as a mark of international certification. Sriganganagar milk union is in the process of obtaining ISO certification.

Cost cutting in all areas like manpower, fuel, power, water, financing etc. is being taken up on a continuous basis so as to produce milk & milk products at a competitive price in order to benefit both the consumers and the milk producers.

Upgradation of knowledge and skills of the plant personnel for efficient working of plant &

machinery as also to train them in the other areas of management.

Marketing of milk & milk products with focus on consumer delight.

Liquid Milk marketing

We have been paying special emphasis on increasing the liquid milk marketing over the years, as a result of which our liquid milk sales rose to 7.18 lac litres per day (LLPD) in the year 2002-03 as against 6.14 LLPD in the previous year, recording a growth of 17 per cent. Our liquid milk sale was the highest among the northern region Co-operatives and the growth rate was also the highest. We are striving to increase our liquid milk marketing further in the days to come. With this aim in mind we have covered a total of 375 townships/suburban agglomerates within the State and its nearby areas through 8375 outlets for sale of milk till October 2003.

Supply to NMG

Our Milk procurement this year grew to an average of 12.48LKGPD from 11.04 LKGPD in the previous year. In the month of September 2002 our milk procurement reached a level of 16.29 LKGPD, which was record milk procurement for transitory season, since inception of RCDF. Due to the same, despite increase in sale of SARAS milk and milk products, we had to supply greater quantity of milk to NMG this year. 5.05 LKGPD of milk was supplied to NMG in the year 2002-03.

Marketing of Milk Products

To strengthen the marketing of Saras Milk & Milk Products, the Federation opened Branch Offices at Guwahati, Indore, Kolkatta, Hyderabad and Delhi and started the sale of Saras Milk & Milk Products in these States/North-Eastern Regions of the country, through the C&F Agents appointed at the above places. A total sale of Rs.1.00 Crore was recorded in these new outside state markets in the year 2002-03. We intend to further push the sale of Saras Products in these new markets in the future and make Saras a national brand.

New Products viz. Flavoured Milk, Ice Cream, Misthi Dahi, Cow Milk in poly pack and Cow Ghee were launched this year. Most of these new value added products received a favourable response from the market. Initially flavoured milk and Ice Cream were got produced and packed from Haryana Milk Federation and Punjab Milk Federation respectively, but looking to the response of flavoured milk, a flavoured milk bottling Plant has been set up in the year 2003-04 at Jaipur Dairy Plant. We intend to give a greater emphasis to the sale of our existing fresh milk products and these newly launched other value added products throughout the state from all our affiliated Milk Unions in the future. Keeping this in mind, a new common packing design for the various existing fresh milk products is being developed and finalized and improvements in packaging are being brought to increase the shelf-life and appeal of the products.

To give a fillip to the sale of milk and milk products, private entrepreneurs have been invited to set up well equipped and aesthetically designed milk parlours in Jaipur City, to start with. These milk parlours

would improve the visibility of our brand and our products. Till date 19 such parlours have been set up in Jaipur City and looking to their sales volume and the encouraging feedback being received from the public, we intend to replicate this model in other cities of the State in the coming years.

Ghee Sales

In the year 2002-03, the Federation has posted a net Ghee sale of 8692MT. Ghee sales last year were of 8637 MT. We could have achieved higher ghee sales this year, but in the later part of the year, we had to cut back on the sales, by higher pricing, because of limited ghee stocks. To further improve the ghee sales we have now taken a decision to sell only Agmarked Ghee under "Saras" brand name and to sell ghee in 15 kg. tins with CFC henceforth.

Tetrapak Milk Sale

You will be pleased to note that your Federation played its part in the service of the country, by meeting the unexpected high demand for Tetra-pack milk of the Armed Forces deployed at the Western Border of the country during the year, fully and in time. We recorded a total TPM sale of 88.41 lac litres in the year 2002-03. Looking to the growth in the market of Tetrapak milk/other products, it has been decided to install new machinery in Tetrapak Plant for packing value added products other than white milk too and to give an impetus to the sale of TPM in civil markets.

Table Butter Sale

It is heartening to bring to your notice that Federation achieved a 121per cent growth in the sales of Table Butter this year. A total of 331MT of Table Butter was sold this year as compared to 150MT sold during the last year. We are working to further increase the sales of Saras Table Butter in the civil markets. We have improved the pack design of the Table Butter. We have increased its availability in the markets in the State and have also launched it in Delhi market. As a result, we have achieved a sale of 347MT of Table Butter this year till October 2003.

SMP / WMP Sales

Over the years SMP/WMP had been sold by your Federation only to Institutional buyers such as Assam Rifles, Ministry of Defence, etc. In the year 2001-02 a decision was taken to enter into civil markets for sale of these SNF based products. Because of the limited availability of these SNF based products with the Federation; we have as yet not stepped up our marketing efforts for these products, except for having a limited presence in the important North-East and West Bengal markets.

Future Plans & Projects

RCDF has drawn up a number of developmental programmes under various schemes of World Bank, Government of India, NDDB and Government of Rajasthan. These various projects have been

dovetailed and synchronised in order to develop a strong infrastructure base and larger coverage of milk producers and farmers of the State. Some of the projects are:-

Perspective Plan 2005 Swaran Jayanti Gram Swarojgar Yojana (SGSY) District Poverty Initiatives Project (DPIP)

Perspective Plan-2005 Under this plan NDDB has approved investment for Milk Unions Bikaner, Hanumangarh, Raniwara, Jodhpur, Pali, Udaipur, Bhilwara and Jaipur. The total outlay for 5 years period is Rs. 6846.92 lacs. Under this plan the handling capacity of milk union Jaipur is being expanded from 2.50 lac litre per day to 5.00lac litre per day at a cost of Rs. 1900.00 lacs. The main activities under approved plans are:-

1. Creation of infrastructure facilities at Dairy Plant.

2. Co-operative Institution Building and Women Development at Village level, Manpower Development at Milk Union as well as at DCS level, Market development for sale of milk and milk products, Milk productivity enhancement in milch cattle and National information network.

Swaran Jayanti Gram Swarojgar Yojana (SGSY)

Under SGSY four projects have been sanctioned by Govt. of India/Govt. of Rajasthan for Bikaner, Bharatpur, Sikar and Ajmer Districts. These projects are being implemented by respective Milk Unions. State share equivalent to 25 per cent of project cost is being funded by beneficiaries/Milk Unions according to the approved plan. The project costs are as under:-

Milk Union Bikaner - 1498.00 Lacs

Milk Union Bharatpur - 1262.00 Lacs

Milk Union Sikar - 1140.00 Lacs

Milk Union Ajmer - 469.75 Lacs

In Bikaner District, number of BPL beneficiaries is 20,064. The amount is to be spent for creation of rural infrastructure e.g. DCS support, 236 AMCS/Auto milk collection units, 500 Animal sheds, 500 Vermicompost units and 59 Bulk Milk Coolers.

In Bharatpur District, number of beneficiaries is 23000 milk producers out of which 10500 are BPL families. The amount is to be spent for creation of rural infrastructure e.g. DCS Support, 200 Milko Testers, 52 Bulk Milk Coolers and 200 Vermicompost Units.

In Sikar District, a dairy plant with milk handling capacity of 60,000 Kg. Per day is being installed at Palsana costing Rs. 800.00 lacs. Rest of the amount is to be spent for creation of rural infrastructure e.g. EMT-60, AMCS-50, Bulk Milk Coolers-2 and 50 Bull purchase etc.

In Ajmer District, the project aims at providing benefit to 10,000 BPL families by taking up dairy development activities. The amount is to be spent for creation of rural infrastructure at DCS level by installation of 75 AMCS, 15 Bulk Coolers, 100 EMTs and other testing equipments. The project also envisages 100 Deep Freezers, 5000 Plastic Crates and other supports for marketing.

District Poverty Initiatives Project (DPIP):

Under this programme, financed by the World Bank, the Government of Rajasthan has selected seven districts viz. Dholpur, Tonk, Rajsamand, Churu, Baran, Jhalawar and Dausa. The dairy development sub sector has been given to RCDF under the contract. Under this a total number of 2060 CIGs will be formed during the project period 2003-2005. A total of 53,400 milch animals will be inducted in the DPIP districts. The objective of DPIP is mainly to build the capabilities of BPL families and to convert CIGs into Milk Co-operative Societies and to link these with Unions for marketing of milk.

Present Scenario

Adverse draught conditions in the last year and before have taken a heavy toll on the cattle wealth and milk production in the current year. Due to low milk production, and delayed calving the procurement has gone down to an average of 8.36 lac litres per day upto October 2003 as against 11.31 lac litres per day in the corresponding period of year 2002-03. Decline in milk production has been widespread covering other States also. Non-availability of milk has led to sky-rocketing prices of ghee and skim milk powder (SMP) especially in the months of August, September & October 2003. Even all time high producer milk price was of no consequence for procurement. SMP had to be purchased at high prices to maintain local sales which had shot up too for reasons of low production of milk. The situation is improving gradually but the yearly performance shall remain subdued. All necessary initiatives are being taken and greater efforts are being put in to further improve the situation.

Future challenges

The Dairy sector is witnessing fierce competition not only from multinationals but also from sister Federations who are vying with one another for capturing a higher market share. WTO threat looms large too.

We are reorienting our strategies to counter these adverse factors and challenges. Special attention is being paid to increase local sales, which has gone up by 22per cent upto October 2003 as compared to corresponding period of the year 2002-03.

To meet the challenges posed by competition, we need to widen our product range and have to step up our advertising and brand-imaging. Rising costs of inputs are making our margins thinner.

Our product range has been widened. All efforts are being made to secure deeper market reach. Milk Parlours are being opened with meticulous design and ambience to provide consumers a convenient

place for enjoying milk & milk products. More and more private entrepreneurs are coming forward to set up such parlours. You shall be pleased to know that Saras brand has established itself as a mark of quality, reliability and total customer satisfaction. We are committed to strengthen the Saras brand more and more.

Acknowledgement

The Directors would like to record their appreciation for the dedicated services rendered by the officers & staff of the Federation, affiliate Milk Unions, Bankers, Auditors, Distributors, Retailers and valued customers.

The Directors also wish to express their gratitude to the department of Animal Husbandry and Dairy Development and various other concerned departments and autonomous bodies of the Government of Rajasthan and Government of India and sister Federation for their co-operation and assistance rendered to the Federation.

AUDITORS' REPORT

We have audited the attached Balance-sheet of Rajasthan Co-operative Dairy Federation Ltd; Jaipur as on 31.03.2003 and the Profit & Loss Account for the year ended on that date. These financial statements are the responsibility of the RCDF's management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

3. In our opinion, proper books of accounts as required have generally been kept by the Federation, so far as it appears from our explanations of these books.

4. Subject to our comments as in Hindi Audit-Report appended herewith, and `Notes on Accounts', the Profit & Loss Account and Balance-Sheet are in agreement with the books of Accounts.

5. We have audited the accounts of RCDF-HQs, Jaipur alongwith the accounts of the following Units:-

i. CFP, Ajmer

ii. CFP, Jodhpur

iii. CFP, Nadbai

iv. CFP, Bikaner

v. FSB, Bassi

vi. ENF, Bassi

vii. Residential Manager's office at Delhi

viii. Rojari Farm, Bikaner

ix. SPP, Bikaner

6. In our opinion and to the best of our information and according to the explanations given to us, the said Accounts, subject to our comments in Hindi Audit-report read with the `Notes on Accounts' as forming part of the Balance-sheet give a true and fair view in conformity with the accounting principles generally accepted in India.

i. In case of Balance-sheet of the state of affairs of the Federation as on 31st March, 2003.

ii. In case of Profit & Loss Account of the profit for the year ended on that date.

For A. Kaushik & Associates

Chartered Accountants

Sd/-

( Arvind Kaushik )

Partner

BALANCE SHEET AS AT 31.3.2003 LIABILITIES SCH. AMOUNT AS AMOUNT AS ASSETS SCH. AMOUNT AS AMOUNT AS ON 31.3.2003 ON 31.3.2002 ON 31.3.2003 ON 31.3.2002 (Rupees) (Rupees) (Rupees) (Rupees) Share Capital (Authorised) 50,000,000.00 50,000,000.00 Cash & Bank

Balances I 193,116,323.74 178,604,148.06

(50000 Equity Shares Of Rs.1000 Each)

(Including F.D.R'S) Investments J 1,582,320.00 1,568,820.00 Issued Subs & Paid Up Capital A 3,591,914.59 1,783,914.59 (At Cost With

Govt.& Others) Reserves & Surplus B 677,704,112.53 676,664,026.53 Deposits K 2,133,026.85 2,058,567.85

Funds In Trust ( Grants, etc. under adjustment)

B-1 126,753,675.98 146,994,468.48 (With Govt.& Others)

Secured Loan C 31,731,574.45 19,623,370.42 Loans And Advances L 649,333,956.42 483,448,270.68

(To Parties, Unions /Units, NDDB etc.)

Unsecured Loans(GOR, BANK etc.)

D 53,025,923.32 10,695,532.02 Sundry Debtors M 146,151,317.87 153,846,148.92

Deposits(S/D,E/M ETC.) E 170,890,178.57 30,411,884.46 Current Assets N 37,289,852.28 28,186,759.85

Fixed Assets O 74,646,983.09 47,047,880.07

Current Liabilities & Provisions F 470,212,117.21 482,596,085.69 Prepaid,Intt,

Receivables,etc P 20,158,355.78 17,891,747.37

Unpaid Intt. & Other Liabilities G 472,853.16 470,997.31

Receivables On A/c Of Transfer Of A/L

Q 0.00 0.00

"Amount Payable On A/C Of H 0.00 8,170,773.34 Misc Exp. And

Losses Q 375,336.21 498,781.21

D/Plant's/APS JPR Losses Retained (Transfer of Assets/Liab.)" Loss on a/c

of Dairy Plant/ R 0.00 0.00

Payables to RCDF Units on Transfer R 10,829,968.72 10,829,968.72

APS JPR Transferred To Unions

Profit & Loss A/C R Profit & Loss A/C R (i) Accumulated Profit 280,746,011.31 201,764,052.19 (i) Accumulated

Losses 755,835,908.86 751,903,782.65

(ii)Current Profit( As per P&L A/C) 57,718,891.61 78,981,959.12 (ii)Current loss (

As Per P & L A/C) 3,053,840.35 3,932,126.21

TOTAL 1,883,677,221.45 1,668,987,032.87 TOTAL 1,883,677,221.45 1,668,987,032.87

Sd/- Sd/- Sd/- Sd/- Sd/-

( RACHANA SHARMA) ( G. L. GARG ) (KAMAL CHHABRA) ( V. K. GUPTA ) (ASHOK JAIN) ASSTT.MGR(F&A) DY.MGR(F&A) MANAGER (F&A) FINANCIAL ADVISOR CMD PLACE: JAIPUR AS REFERRED TO IN OUR REPORT OF EVEN DATE DATE: 24 OCT 2003. FOR A.KAUSHIK & ASSOCIATES CHARTERED ACCOUNTANTS

Sd/- ( ARVIND KAUSHIK )

PARTNER

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31.3.2003 Particulars SCH AMOUNT (RS) AMOUNT (RS) Particulars SCH. AMOUNT (RS) AMOUNT (RS) FOR 2002-2003 FOR 2001-2002 FOR 2002-2003 FOR 2001-2002 Opening Stock(Store /Stationery - HQ) 206,171.29 356,983.42 Gross Profit B / F - 141,677,468.86 126,918,648.61

Administrative Exp. S 68,238,763.20 59,245,605.48 (from MFG & Trading a/c)

Office Expenses T 4,273,539.53 3,098,532.88 Interest on term loan Written back BB 0.00 0.00

after'92 Repair and Maint.of Building and Staff Qtr.

U 1,616,255.98 1,090,262.80

Interest on term loan Written back before'92

BB 0.00 0.00

Repair & Maint.of Vehicle V 894,660.34 676,886.80 General Expenses W 3,838,108.32 2,967,201.74 Interest from

Employee/Bank BB 14,515,525.42 14,119,633.45

Selling & Distribution Exp. X 109,832,892.43 59,830,202.86

Interest from Unions on W&M /OTHER

BB 8,042,631.00 3,488,298.00

Other expenses Y 3,134,468.26 307,745.70 Other Income CC 22,098,279.52 12,319,247.27 Exp Pertaining.to Previous year Z 2,604,550.05 8,306,689.06 Income Pertain.to

Prev year- DD 1,586,836.41 4,262,670.03

Int. on Term Loan written back upto 92 AA 0.00 0.00 RCDF Cess (Milk

Turnover) CC 68,984,043.00 56,559,071.00

Closing Stock(store-HQ) 552,499.47 206,171.29

Interest towards NDDB term loan AA 0.00 588,747.58

NET LOSS transfered to Balance Sheet 3,053,840.35 3,932,126.21

Interest on working capital loan AA 1,141,822.00 0.00 Interest towards OVER DUE term loan

AA 0.00 0.00 Int. on Term Loan written back after 92 AA 0.00 0.00 Interest on Bank OD/CC limit AA 1,200,526.00 372,364.00 Interest towards WAYS & MEANS AA 0.00 0.00 Govt.Guarantee Commission AA 0.00 2,500,000.00 Depreciation AA 5,810,475.02 3,482,684.42 Net Profit Trans. To Balance Sheet 57,718,891.61 78,981,959.12 TOTAL 260,511,124.03 221,805,865.86 TOTAL 260,511,124.03 221,805,865.86 Sd/- Sd/- Sd/- Sd/- Sd/-

( RACHANA SHARMA) ( G. L. GARG ) (KAMAL CHHABRA) ( V. K. GUPTA ) (ASHOK JAIN) ASSTT.MGR(F&A) DY.MGR(F&A) MANAGER (F&A) FINANCIAL ADVISOR CMD PLACE: JAIPUR AS REFERRED TO IN OUR REPORT OF EVEN DATE DATE: 24 OCT 2003. FOR A.KAUSHIK & ASSOCIATES CHARTERED ACCOUNTANTS

Sd/- ( ARVIND KAUSHIK )

PARTNER

MANUFACTURING & TRADING ACCOUNT FOR THE YEAR ENDED 31.03.2003 Particulars SCH. AMOUNT (RS) AMOUNT (RS) Particulars SCH. AMOUNT (RS) AMOUNT (RS) FOR 2002-2003 FOR 2001-2002 FOR 2002-2003 FOR 2001-2002 TO By Opening Stock EE 27,980,588.56 27,668,136.52 Sales(Including LL 2,669,723,607.27 1,837,375,221.03

consignment) Purchases(Including consignment) FF 2,446,036,275.88 1,656,051,951.02 Operational Exp. GG 34,678,754.41 26,198,059.49 Closing Stock MM 36,692,255.54 27,980,588.56

Generator Exp. HH 2,363,401.50 1,914,563.86 Repair & Maint. of Plant II 7,945,371.70 5,329,624.09 Inter Unit Stock

transfer. LL 0.00 0.00

Packing Material KK 40,838,545.55 19,835,405.50 Freight& Cartage(Inw) KK 368,836.35 241,170.50 Gross Loss c/f to

P&L A/c 0.00 0.00

Inter Unit Stock Transfer FF 4,526,620.00 1,198,250.00 Gross Profit Transferred to P&L a/c 141,677,468.86 126,918,648.61

TOTAL 2,706,415,862.81 1,865,355,809.59 TOTAL 2,706,415,862.81 1,865,355,809.59

Sd/- Sd/- Sd/- Sd/- Sd/-

( RACHANA SHARMA) ( G. L. GARG ) (KAMAL CHHABRA) ( V. K. GUPTA ) (ASHOK JAIN) ASSTT.MGR(F&A) DY.MGR(F&A) MANAGER (F&A) FINANCIAL ADVISOR CMD PLACE: JAIPUR AS REFERRED TO IN OUR REPORT OF EVEN DATE DATE: 24 OCT 2003. FOR A.KAUSHIK & ASSOCIATES CHARTERED ACCOUNTANTS

Sd/- ( ARVIND KAUSHIK )

PARTNER