The Board of Directors of your Company ('Board’) is pleased to
share with the valued stakeholders the Integrated Annual Report
for financial year 2024-2025 ('Integrated Annual Report’/ Annual
Report’) comprising of Audited Standalone and Consolidated
Financial Statements of Parag Milk Foods Limited ('Parag’ or
'Company’ or 'Your Company’) for the financial year ('FY’) ended
March 31, 2025. The consolidated performance of the Company
and its subsidiaries has been referred to wherever required.

In Compliance with the applicable provision of the Companies
Act, 2013 ('Act’) and the Securities and Exchange Board of India
('SEBI’) (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ('Listing Regulations’), this Board’s Report is
prepared based on the financial statements of the Company
for the year under review, with respect to the Company and its
subsidiary companies. The consolidated entity has been referred
to as 'Parag Group’ or 'Group’ in this report.

OVERVIEW OF FINANCIAL PERFORMANCE

Key highlights of Standalone and Consolidated Financial Results of the Company for the financial year ended March 31, 2025, are
summarized as under:

FINANCIAL PERFORMANCE AND STATE OF
COMPANY’S AFFAIRS

Standalone

At Standalone level, the total Revenue from operations for
FY 2024-25 increased by 8.98% to H3,36740 Crore against
H3,089.83 Crore in the Previous Year 2023-24. The Standalone
Profit Before Tax for FY 2024-25 increased to H134.84 Crore
against H82.86 Crore in the Previous Year 2023-24. The
Standalone Profit after Tax for FY 2024- 25 increased to H123.54
Crore against H91.95 Crore reported in the Previous Year 2023-24.
The Operations and Financial Results of the Company are further

elaborated in the Management Discussion and Analysis Report,
which forms part of the Integrated Annual Report.

Consolidated

Consolidated Revenue from Operations for FY 2024-25 stood
at H3,432.21 Crore reporting a growth of 9.35% as compared
to H3,138.70 Crore in FY 2023-24, driven by improvement in
core categories of mainly Ghee, Cheese and Paneer which
have witnessed a volume growth of 17% for FY 2024-25. The
Consolidated Profit Before Tax for FY 2024-25 increased to
H132.59 Crore from H85.86 Crore in the Previous Year 2023-24.

The Consolidated Profit After Tax for FY 2024-25 stood at H118.79
Crore as compared to H90.59 Crore in the Previous Year 2023-24.

PERFORMANCE ANALYSIS, BUSINESS OUTLOOK
AND HIGHLIGHTS

Parag demonstrated a robust performance in FY 2024-25, with
a 10% year-on-year volume growth, driven by strong momentum
in its core dairy categories-Ghee, Cheese and Paneer which
collectively recorded 17% growth during the year.

Despite ongoing fluctuations in milk procurement prices, the
Company effectively optimized its cost structure and improved
Gross Profit Margins by 130 basis points, reaching 25.8%,
supported by premium product mix, operational efficiency and
strategic pricing.

According to the IMARC Report 2024:

• Gowardhan Ghee maintained its leadership in the branded
cow ghee segment with a 22% market share.

• Go Cheese continued as the second-largest cheese brand
in India, with a 35% share, reflecting consumer trust and
category strength.

New-Age Business Growth:

• Avvatar (Parag’s performance nutrition brand) recorded
significant growth, strengthening its leadership in India’s
sports and active nutrition category through innovation and
clean-label offerings.

• Pride of Cows expanded its product range and deepened its
reach through quick commerce platforms and premium retail,
accelerating the Company’s premiumization strategy

Company-wide growth was further supported by ongoing
investments in distribution and channel expansion,
reinforcing presence across general trade, modern retail and
digital commerce.

INNOVATION AND PRODUCT EXPANSION

The year was marked by strategic innovation across all brands,
aligned with evolving consumer demand for nutritious, indulgent
and functional foods. Key launches included:

• Gowardhan: Crunchy Chikki (Sesame and Peanut) made
with pure cow ghee - offering a wholesome, nostalgic snack.

• Go: Fruit Yogurt - a vibrant, on-the-go product that blends
taste and nutrition for urban consumers.

• Pride of Cows: Low-Fat High-Protein Paneer, Greek
Yogurt and Bocconcini - all designed for health-conscious,
premium consumers.

• Avvatar: High-protein bars (Chocolate and Coffee Wafer)-
a clean-label snacking innovation aimed at fitness-
focused individuals.

BRAND BUILDING AND MARKETING INITIATIVES

Parag elevated its brand strategy through a holistic, multi¬
channel approach to storytelling, product visibility and consumer
engagement. The goal is to position the Company not just as a
dairy provider but as a partner in health, taste and lifestyle.

1. Multi-Platform Campaigns and Media Integrations

To drive top-of-mind recall, the Company executed strategic

brand integrations on national and regional platforms:

• Go Cheese partnered with Bigg Boss under the
campaign “Har Tasty Cheese, Mein Go Cheese”,
reaching a wide consumer base.

• Presence across Kaun Banega Crorepati, MTV Roadies
and Maharashtrachi Hasya Jatra enhanced emotional
connection with Hindi and regional viewers.

• Branded content initiatives included Chef Ajay Chopra
for Go Cheese, a Curly Tales special with Kamiya Jani
for Pride of Cows and YouTube chef collaborations for
Avvatar-positioning the brands as lifestyle companions.

2. Influencer and Creator Collaborations

• Avvatar Performance Whey was launched with over
100 fitness and lifestyle influencers, spotlighting
India’s 80% protein deficiency and building credibility
as a homegrown, science-backed alternative to
global brands.

• Pride of Cows received organic amplification from
premium lifestyle bloggers and chefs, boosting brand
perception among affluent urban consumers.

• Gowardhan Ghee’s purity was emphasized through
influencer conversations amidst rising concerns over
food adulteration, reinforcing trust and transparency

3. Launch Communication and Product Campaigns

Each new product launch was accompanied by

tailored campaigns:

• Go Fruit Yogurt: “Taste Meets Nutrition-positioning the
product as a nutritious indulgence for busy urban families.

• Gowardhan Chikki: Presented as a healthy festive treat,
rooted in tradition yet modern in convenience.

• Pride of Cows: Focused on clean-label, high-protein,
single-origin dairy options for discerning consumers.

• Avvatar Protein Bars: Launched with a digital-first
campaign under “Snack Strong”, merging convenience,
performance and flavor.

4. On-Ground and Trade Activation

To support retail conversion and in-store traction:

• Go Cheese conducted sampling and bundling in modern
trade, timed around festive seasons and cricket events.

• Pride of Cows ran tasting sessions in premium housing
societies and cafes, reinforcing its boutique, high-
quality identity

• Recipe contests and chef events were organized for
Avvatar and Go Cheese, engaging culinary communities
and fitness enthusiasts alike.

5. Sharpened Brand Positioning

Each brand further refined its voice and identity:

• Gowardhan leaned into its “Garv se Gowardhan”
positioning, reflecting purity, trust and tradition-
especially relevant during the festive period.

• Go Cheese emphasized innovation, variety and fun
targeting families and young adults.

• Pride of Cows reinforced its single-origin, with elevated
packaging and messaging.

• Avvatar strengthened its leadership as India’s own
performance nutrition brand, rooted in clean ingredients,
functional benefits and transparent labeling.

Together, these initiatives solidified Parag’s positioning as a
future-ready dairy and nutrition powerhouse, committed to
meeting modern lifestyle needs while staying true to its roots in
purity, health and trust.

EXPANSION / INCORPORPATION OF SUBSIDIARY

The Company is expanding its wholly owned subsidiary ('WOS’),
Bhagyalakshmi Dairy Farms Private Limited ('Bhagyalaxmi’),
which supplies exclusively to our brand “Pride of Cows” and is
expected to reach about 15,000 cows in coming five years.

The Company has incorporated a wholly owned foreign subsidiary
in Dubai, UAE, named Parag Milk Foods Middle East FZE to
expand its reach and build seamless supply chain operations
worldwide to cater the international market.

REVIEW OF OPERATIONS

The details of review of operations are elaborated in the
Management Discussion and Analysis, which forms part of the
Integrated Annual Report.

BRAND BUILDING: STRATEGY

The Company’s foremost strategic priority is to be one of the best
performing, most trusted and respected dairy FMCG Companies
across stakeholders and become a global nutrition provider that
emphasizes health and nutrition to consumers through quality
and innovation.

EXPORT MARKET

The Company continues to enjoy its presence and brand recall
of Go and Gowardhan brands across several geographies
through its exports to UAE, Singapore, Mauritius, Oman, Kuwait,
Bahrain, Hong Kong, Philippines, Sri Lanka, Bangladesh, Maldives,
Indonesia, Malaysia, USA, Nepal, Bhutan etc. It had also started
expanding its reach in UK, Germany and other European countries
through Sweet export. Our export sales has contributed 2.68% to
the overall revenues.

PHILANTHROPIC ACTIVITIES

The company has actively contributed to philanthropic efforts
benefiting the broader community, with continued focus in the
following areas:

• Promotion of education

• Animal health and social welfare

• Rural Development

DIVIDEND AND RESERVES
Policy on Dividend Distribution

The Company has adopted Dividend Distribution Policy in terms
of the requirements of Regulation 43A of the Listing Regulations
and any amendments thereto for bringing transparency in the
matter of declaration of dividend and for protecting the interest
of investors.

The Company intends to maintain similar or better levels of
dividend payout in future. However, the actual dividend payout in
each year will be based on the profits and investment opportunities
of the Company.

The policy is available on the website of the Company at https://
www.paragmilkfoods.com/policy. php?id=52

Dividend

The Board at its Meeting held on May 2, 2025, recommended a
final dividend of H1 per equity share i.e. 10% of face value of H10
each for the financial year ended March 31, 2025, subject to
approval of the shareholders at the ensuing 33^rd Annual General
Meeting ('AGM’).

If approved, the dividend would result in a cash outflow of H11.94
Crore payable to all Beneficial Owners in respect of shares held
in dematerialized form as per the data as may be made available
by the Depositories as on the Cut-off / Record Date. The total
dividend payout works out to 9.66% of the Company’s standalone
net profit. In view of the amendment in the Income Tax Act, 1961
through the Finance Act, 2020, imposition of Dividend Distribution
Tax (DDT) has been abolished. The dividend, if declared, at the
ensuing AGM will be taxable in the hands of the Members of the
Company and the Company is required to deduct tax at source
(TDS) from dividend paid to the Members at prescribed rates as
per the Income Tax Act, 1961.

The Dividend declared/recommended is in accordance with
the Company’s Dividend Distribution Policy, which has been
disclosed on the Company’s website, www.paragmilkfoods.com,
as required under Regulation 43A of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, as amended.

Unclaimed dividends

Details of outstanding and unclaimed dividends previously
declared and paid by the Company are elaborated in the
Corporate Governance Report, which forms part of the Integrated
Annual Report.

Transfer to Reserve

During FY 2024-25, there was no amount proposed to be
transferred to the Reserves.

SHARE CAPITAL

During FY 2024-25, the Authorised Share Capital of the Company
is H200 Crore divided into 20 Crore Equity Shares of Face Value
of H10 each.

Further, Paid-up Equity Share Capital is H119.38 Crore.

MATERIAL CHANGES AND COMMITMENTS
AFFECTING THE COMPANY

Strong investor confidence was reflected in the recent H161
Crore capital raise (April 2025) via convertible share warrants.
The round included participation from the prominent investors,
Mr. Utpal Sheth and senior company leadership. Funds will be
used to optimize debt, strengthen working capital and support
strategic growth.

Except for the above-mentioned issuance, there have been
no such material changes or commitments that have affected
the financial position of the Company between the close of
FY 2024-25 and the date of signing of this report.

There has been no change in the nature of the business of
your Company.

SUBSIDIARIES, ASSOCIATES AND JOINT
VENTURES

The Company has two Wholly Owned Subsidiaries namely
Bhagyalaxmi Dairy Farms Private Limited and Parag Foods
Middle East FZE as on March 31, 2025. There were no material
changes in the nature of the business of the subsidiaries. During
FY 2024-25, Parag Foods Middle East FZE was incorporated as
wholly owned foreign subsidiary of the Company. The Company
does not have any associate company, nor has it entered into a
joint venture with any other company.

Pursuant to the provisions of Section 129(3) of the Act, a
statement containing salient features of financial statements
of the Company’s Subsidiaries in Form AOC-1, is enclosed as
Annexure I to this report.

Pursuant to Listing Regulations, the Company has formulated
a policy for determining its 'material subsidiaries’ and the same
can be accessed on the Company’s website at https://www.
paragmilkfoods.com/policy.php?id=13.

Performance highlights of the Bhagyalaxmi Dairy Farms
Private Limited for FY 2024-25 is given below:

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the provisions of Section 129 of the Act and the
Companies (Accounts) Rules, 2014, the Consolidated Financial
Statements of the Company and its subsidiary have been
prepared in the same form and manner as mandated by Schedule
III to the Act and shall be laid before the forthcoming 33^rd AGM of
the Company.

The Audited / Unaudited Financial Results of the Company as
submitted with Stock Exchanges and Financial Statements of
subsidiary are available under the 'Financial Performance’ tab
under Investors section on the website of the Company at www.
paragmilkfoods.com. Further a copy of the Audited Financial
Statements of the subsidiary shall be made available for inspection
at the registered office of the Company during business hours on
any working day upto the date of AGM. According to Section 136 of
the Companies Act, 2013, any shareholder interested in obtaining
a copy of separate Financial Statements of the subsidiary shall
make a specific request in writing to the Company Secretary at
investors@parag.com.

CREDIT RATING

During FY 2024-25, ICRA Limited, on April 8, 2024, reaffirmed
the credit rating previously assigned to the Company on May 8,
2023, as disclosed in the previous annual report of the Company
for FY 2023-24.

In addition to the above credit rating, the Company obtained
a credit rating from India Ratings and Research Pvt. Ltd.
The same can be accessed on the Company’s website at
https://www.paragmilkfoods.com/parag_uploads/images/
pdfs/4hduZP4PdT0XI4O20oIa.pdf.

Subsequent to FY 2024-25, following the issuance of convertible
warrants on preferential basis by the Company, ICRA Limited
issued a revised credit rating report on the debt instruments
of the Company and simultaneously it withdrew the ratings on
Company’s bank facilities at the request of the Company and
based on NOCs received from the lenders and in accordance with
the ICRA’s policy on withdrawal. The same can be accessed on
Company’s website at https://www.paragmilkfoods.com/parag_
uploads/images/pdfs/BfsDgyiNrtdDSadFSRQF.pdf.

BOARD OF DIRECTORS

During the year under review, the composition of the Board
consists of 8 Directors comprising of 4 Independent Directors,
1 Non-Executive Director and 3 Executive Directors, details
thereof are elaborated in the Corporate Governance Report,
which forms part of the Integrated Annual Report.

In terms of the requirement of the Listing Regulations, the Board
has identified core skills, expertise and competencies of the
Directors in the context of the Company’s businesses for effective
functioning. The list of key skills, expertise and core competencies
of the Board are elaborated in the Corporate Governance Report,
which forms part of the Integrated Annual Report.

In the opinion of the Board, all the directors, possess the requisite
qualifications, experience and expertise and hold high standards
of integrity.

Appointment / Re-appointment of Directors:

At the 32^nd AGM held during FY 2024-25, Mr. Nikhil Vora whose
term was liable to retire by rotation, was re-appointed pursuant
to provisions of the Act. Other than this, no appointment / re¬
appointment of Directors were made during FY 2024-25.

In terms of the provisions of the Companies Act, 2013, Ms. Akshali
Shah, Executive Director of the Company, retires by rotation at the
ensuing AGM and being eligible, offers herself for re-appointment.
A resolution seeking the re-appointment of Ms. Shah, forms part
of the Notice convening the ensuing AGM. The profile along with
other details of Ms. Shah is provided in the annexure to the Notice
of the AGM.

Changes in the Board subsequent to financial year
ended March 31, 2025:

Appointments:

The Board at its meeting held on May 2, 2025 had appointed
Ms. Namrata Garud as an Additional Non-Executive Independent
Director with effect from May 2, 2025.

Cessations:

Mr. Narendra Ambwani, Ms. Radhika Dudhat would cease to
be the Independent Directors of the Company with effect from
May 26, 2025 and Mr. Nitin Dhavalikar would cease to be the
Independent Directors of the Company with effect from July 27,
2025 due to completion of their term of appointment of 10 (Ten)
consecutive years.

The Board places on record its sincere appreciation to the
outgoing directors viz. Mr. Narendra Ambwani, Ms. Radhika
Dudhat and Mr. Nitin Dhavalikar for their leadership, guidance and
invaluable contributions made over the years.

Declarations by Independent Directors:

All Independent Directors of the Company have given declarations
that they meet the criteria of independence as laid down under
Section 149(6) of the Act and Regulation 16(1)(b) of the Listing
Regulations. In the opinion of the Board, the Independent Directors
fulfill the conditions of independence specified in Section 149(6)
of the Act and Regulation 16(1)(b) of the Listing Regulations.
The Independent Directors have also confirmed that they have
complied with the Code for Independent Directors prescribed
in Schedule IV to the Act and Company’s Code of Conduct for
Directors and Senior Management Personnel. The Independent
Directors of the Company have confirmed that they have
registered their names in the data bank of Independent Directors
maintained with the Indian Institute of Corporate Affairs in terms
of Section 150 of the Act read with Rule 6 of the Companies
(Appointment and Qualification of Directors) Rules, 2014.

In the opinion of the Board, there has been no change in the
circumstances which may affect their status as Independent
Director of the Company and the Board is satisfied with the
integrity, expertise and experience (including proficiency in terms
of Section 150(1) of the Act and applicable rules thereunder) of all
Independent Directors on the Board.

KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 2(51) and Section 203 of the
Act read with Rules framed thereunder, the followings are the Key
Managerial Personnel of the Company as on March 31, 2025:

MEETINGS OF THE BOARD OF DIRECTORS AND
ITS COMMITTEES

The Board of the Company met 4 (four) times during FY 2024-25.
The details of composition of the Board and its Committees, their
Meetings held during FY 2024-25 and the attendance of the
Directors / Committee Members at the respective Meetings are
elaborated in the Corporate Governance Report, which forms
part of the Integrated Annual Report.

The Board evaluates the recommendations made by the Audit
Committee and seeks further information as they may require.
During the year under review, the Board accepted all the
recommendations made by the Audit Committee.

Committees of the Board

The Board has the following Committees as on March 31, 2025:

(1) Audit Committee

(2) Nomination and Remuneration Committee ('NRC’)

(3) Stakeholders’ Relationship Committee

(4) Corporate Social Responsibility ('CSR’) Committee

(5) Risk Management Committee ('RMC’)

(6) Finance Committee

(7) Management Committee

The details of the Committees along with their composition,
number of Meetings held and attendance at the Meetings are
elaborated in the Corporate Governance Report, which forms
part of the Integrated Annual Report.

AUDIT COMMITTEE

The details pertaining to the composition of the Audit Committee
are included in the Corporate Governance Report, which forms
part of the Integrated Annual Report.

BOARD EVALUATION

Pursuant to the provisions of the Act and Regulation 17(10) of Listing
Regulations and as prescribed in the stated policy of the Board,
the Board has carried out an annual performance evaluation of

(i) the Directors (Independent and non-Independent);

(ii) Board itself (as a whole); (iii) Committees and (iv) fulfillment of
Independence criteria. The Board performance was evaluated
based on inputs received from the Board Members after
considering criteria such as Board composition and structure,
effectiveness of Board / Committee processes and information
provided to the Board etc. The evaluation process at the
Company is conducted through structured questionnaires which

covers various aspects of the Board’s functioning prepared
after circulating the draft forms, covering various aspects
such as structure of the Board, qualifications, experience and
competency of Directors, diversity in Board, effectiveness of the
Board processes, among others.

The performance of the Executive Chairman was evaluated after
seeking the inputs from all the Directors other than the Chairman
on the basis of the criteria such as Chairman competency,
value addition, leadership qualities, ease of communication,
risk handling and mitigation, stakeholder relationship, personal
attributes etc.

In terms of the requirements of the Act, a separate Meeting of the
Independent Directors was held during the year. The Independent
Directors at their Meeting held on March 18, 2025 reviewed the
performance of the Chairman, Non-Independent Directors of the
Company and overall performance of the Board and Committees
as mandated by Schedule IV of the Act and Listing Regulations.

Following the above evaluation carried out at the Independent
Directors’ meeting, the Board and NRC at its meetings held on May
2, 2025 discussed the performance of the Board, its Committees,
and Individual Directors. Performance evaluation of Independent
Directors was done by the entire Board, excluding the Individual
Director being evaluated.

The Company also acted on feedback received from the
previous year’s evaluation process. For more details on the Board
Evaluation Process, please refer the 'Performance Evaluation’
section in the Corporate Governance Report, which forms part of
the Integrated Annual Report.

Familiarisation Programme for Independent Directors

All Independent Directors are familiarised with the operations
and functioning of the Company at the time of their appointment
and on an ongoing basis. The Company already has an elaborate
familiarization programme in place for effective induction of
Independent Directors. The Board acknowledged this and
reiterated the importance of rigorous execution of the induction
process to ensure a smooth transfer and seamless integration of
the new Board Member.

The Board is regularly briefed on relevant legal and regulatory
matters, emerging geo-political and macro-economic
scenarios, governance developments or changes, best practice
developments and other risk factors, etc.

Pursuant to Regulation 25(7) and 46 of the SEBI Listing
Regulations, the details of the familiarisation programme imparted
to the Directors are elaborated in the Corporate Governance
Report, which forms part of the Integrated Annual Report and are
also available on the Company’s website i.e. www.paragmilkfoods.
com under 'Investors’ tab.

Policy on Appointment and Remuneration of
Directors, Key Managerial Personnel and Senior
Management Personnel

The Board has formulated a Nomination and Remuneration
Policy in terms of the provisions of sub-section (3) of Section 178
of the Act and Regulation 19 of the Listing Regulations dealing

with appointment and remuneration of Directors, Key Managerial
Personnel and Senior Management Personnel.

The policy covers criteria for determining qualifications, positive
attributes, independence and remuneration of its Directors, Key
Managerial Personnel and Senior Management Personnel.

The Nomination and Remuneration Policy is available on the
website of the Company and the web-link of the same is https://
www.paragmilkfoods.com/policy.php?id=38

DIRECTORS’ RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and
compliance systems established and maintained by the
Company, work performed by the Internal, Statutory, Cost and
Secretarial Auditors including the audit of internal financial
controls over financial reporting by the statutory auditors and
the reviews performed by the Management and the relevant
Board Committees including the Audit Committee, the Board is
of the opinion that the Company’s internal financial controls were
adequate and operating effectively during FY 2024-25.

Pursuant to the requirements under Section 134(3)(c) of the Act
with respect to the Directors’ Responsibility Statements, your
Directors make the following statements:

a) that in the preparation of the annual financial statements
for the Financial Year ended March 31, 2025, the applicable
accounting standards have been followed along with proper
explanation relating to material departures, if any;

b) 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 at
the end of the Financial Year and of the profit and loss of the
Company for the Financial Year ended March 31, 2025;

c) 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;

d) that the directors have prepared the annual financial
statements for the Financial Year ended March 31, 2025 on a
going concern basis;

e) that proper internal financial controls were in place and that
the financial controls were adequate and were operating
effectively; and

f) that systems to ensure compliance with the provisions of
all applicable laws were in place and were adequate and
operating effectively.

DISCLOSURE REGARDING ISSUE OF EMPLOYEE
STOCK OPTIONS

There has been no change in the Employee Stock Option Scheme
(ESOP scheme) during the current financial year.

Information as required under Regulation 14 read with Part F of
Schedule I of the SEBI (Share Based Employee Benefits and

Sweat Equity) ('SBEB’) Regulations, 2021, has been uploaded
on the Company’s website and can be accessed under 'Annual
Reports’ tab at https://www.paragmilkfoods.com/investors.php.

A certificate received from M/s. N. L. Bhatia and Associates,
Secretarial Auditors of the Company, confirms that the ESOP
Scheme of the Company is in compliance with the SBEB
Regulations and that the Company has complied with the
provisions of the Act.

INTERNAL FINANCIAL CONTROL SYSTEMS AND
THEIR ADEQUACY

The Company’s internal control systems are commensurate
with the nature of its business and the size and complexity of
its operations and such internal financial controls concerning
the Financial Statements are adequate. The Audit Committee
comprises of professionally qualified Directors, who interact
with the statutory auditors, internal auditors and management in
dealing with matters.

Internal Financial Control is an integrated part of the risk
management process which in turn is a part of Corporate
Governance addressing financial reporting risks. The Internal
Financial Controls have been documented and embedded in the
business processes. Your Company’s approach on Corporate
Governance is elaborated in the Corporate Governance Report,
which forms part of the Integrated Annual Report.

The Board reviews the internal processes, systems and the internal
financial controls and accordingly, the Directors’ Responsibility
Statement contains confirmation as regards to adequacy of the
internal financial controls.

Assurances on the effectiveness of Internal Financial Controls
are obtained through management reviews, self-assessment,
continuous monitoring by departmental heads as well as testing
of the internal financial control systems by the internal auditors
during the course of their audits.

The Audit Committee and the Board are of the opinion that the
Company has sound Internal Financial Control and it is operating
effectively and no material weaknesses exist during FY 2024-25.
The details with respect of internal financial control and their
adequacy are elaborated in the Management Discussion and
Analysis, which forms part of the Integrated Annual Report.

RISK MANAGEMENT GOVERNANCE

The Board has an overall responsibility for governance of
Company’s risk management.

The Board approves the Company’s risk policies and oversees
management in the designing, implementation and monitoring of
risk management systems. It also has the authority to approve any
deviation in risk management policies or any breach of risk limits.

The Risk Management Committee constituted by the Board
assists the Board in monitoring and reviewing the risk management
for business operations, implementation of the risk management
framework of the Company and such other functions as Board
may deem fit.

The Risk Management Framework covers all the Key Categories
for Risk Classification i.e. Strategic and Reputational Risks,
Financial and Fraud Risks, Governance and Compliance Risks,
Extended Enterprise Risks, Cyber Risk and Information Security
and Operational Risks, etc.

During the year under review, Deloitte, the Internal Auditors
of the Company, addressed the top key risks relevant to the
Company and has also supported in the implementation of its
Risk Management Policy of the Company. The risk identified are
being systematically addressed through mitigating actions on an
ongoing basis.

The detailed terms of reference and the composition of RMC are
set out in the Corporate Governance Report, which forms part of
the Annual Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company promotes ethical behaviour in all its business
activities and is in line with the best governance practices. The
Company has a Whistle Blower Policy and has established
the necessary vigil mechanism for employees, Directors and
stakeholders in confirmation with the provisions of Section 177(9)
of the Act and Regulation 22 of SEBI Listing Regulations, to report
concerns about unethical behaviour.

The Company did not receive any complaints from the employees
regarding violation of Code of Conduct or other matters during the
year under review.

The functioning process of this mechanism has been more
elaborately mentioned in the Corporate Governance Report
forming a part of the Integrated Annual Report. The Whistle
Blower Policy can be accessed on the Company’s website at
https://www.paragmilkfoods.com/policy.php?id=42

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility
Committee and details of the composition are given separately
in the Corporate Governance Report, which forms part of
the Integrated Annual Report. The Company has undertaken
the CSR activities in accordance with the CSR Policy of the
Company adopted in accordance with Schedule VII of the Act.
The Company’s CSR Policy can be accessed on the Company’s
website at https://www.paragmilkfoods.com/policy.php?id=53.

The brief outline of the CSR Philosophy, CSR policy, salient
features of and the initiatives undertaken by the Company on CSR
activities during the year under review are set out in this report
in the format prescribed under Rule 9 of Companies (Corporate
Social Responsibility Policy) Rules, 2014 under Annexure II to
this Report.

RELATED PARTY TRANSACTIONS

During the year under review, all transactions that were entered
into with the related parties were in ordinary course of business
and at arms’ length basis with prior Audit Committee approval.
Therefore, the disclosure of Related Party Transactions as
required under Section 134(3)(h) of the Companies Act w.r.t.
contracts or arrangements with related parties under Section

188(1) in Form AOC-2 is not applicable to the Company for
FY 2024- 25 and hence, the same is not provided. The details
of the transactions with related parties during FY 2024-25 are
provided in the accompanying financial statements. There were
no materially significant related party transactions entered into by
the Company with the promoters, key management personnel or
other designated persons that may have potential conflict with the
interests of the Company at large.

The Audit Committee grants omnibus approval for the
transactions that are in the ordinary course of business and
repetitive in nature. For other transactions, the Company obtains
specific approval of the Audit Committee before entering into any
such transactions. All related party transactions are placed before
the Audit Committee on a quarterly basis. The same are also
placed before the Board for seeking their approval.

In line with the requirements of the Act and the Listing Regulations,
the Company has formulated a Policy on Related Party
Transactions and the same can be accessed on the Company’s
website at https://www.paragmilkfoods.com/policy.php?id=40.

PARTICULARS OF LOANS, GUARANTEE AND
INVESTMENTS BY THE COMPANY

The loans given, investments made, guarantees given and
securities provided during the year under review are in compliance
with the provisions of Section 186 of the Act and the Rules
thereunder and the details are provided in the Note No 6 and 7
to the Standalone Financial Statements, which forms part of the
Integrated Annual Report.

BUY BACK

The Company has not bought back any of its securities during the
Financial Year ended March 31, 2025.

DEPOSITS FROM PUBLIC

The Company has not accepted any deposits from the public
within the meaning of Sections 73 and 74 of the Act read with the
Companies (Acceptance of Deposits) Rules, 2014, as amended,
during the year under review.

No amount on account of principal or interest on deposits from the
public was outstanding as on March 31, 2025.

PREVENTION OF SEXUAL HARASSMENT OF
WOMEN AT WORKPLACE

In accordance with the provisions of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013 ('POSH Act’) and the rules made thereunder, the Company
has adopted a Policy (Prevention of Sexual Harassment Policy
a.k.a POSH Policy).

To build awareness on the subject, the Company has been
carrying out online Induction/ refresher programmes on a
periodical basis. All employees (permanent, contractual,
temporary, trainees) are covered under this Policy. As per the
requirement of the POSH Act and Rules made thereunder, the
Company has constituted Internal Complaint Committee(s) to
redress complaints received regarding sexual harassment. All
employees are covered under this Policy. Following is a summary

of sexual harassment complaints received and disposed off
during the year under review:

• No. of complaints received : NIL

• No. of complaints disposed off : NIL

• No. of complaints pending : NIL

MANAGEMENT DISCUSSION AND ANALYSIS,
CORPORATE GOVERNANCE REPORT
AND BUSINESS RESPONSIBILITY AND
SUSTAINABILITY REPORT

In terms of Regulation 34 of SEBI Listing Regulations, a separate
section on Management Discussion and Analysis, Business
Responsibility and Sustainability Report and Corporate
Governance Report together with a certificate from a Practicing
Company Secretary confirming compliance with the Regulations
relating to Corporate Governance of Listing Regulations are set
out and forms part of the Integrated Annual Report.

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

The Company is continuously making efforts to reduce and
optimize the energy consumption at its manufacturing facilities/
offices all over India. Particulars relating to conservation of energy,
technology absorption, foreign exchange earnings and outgo
as required to be disclosed under Section 134(3)(m) of the Act
read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are
provided in the prescribed format and are annexed as Annexure III
and forms an integral part of this Report.

ANNUAL RETURN

Pursuant to Section 134(3)(a) of the Act, the Annual Return of the
Company prepared as per Section 92(3) of the Act for the financial
year ended March 31,2025, is available on the Company’s website
and can be accessed under 'Annual Reports’ tab at https://www.
paragmilkfoods.com/investors.php.

In terms of Rules 11 and 12 of the Companies (Management and
Administration) Rules, 2014, the Annual Return shall be filed with
the Registrar of Companies, within prescribed timelines.

PARTICULARS OF EMPLOYEES AND RELATED
DISCLOSURES

The ratio of remuneration of each Director to the median
employees’ remuneration as per Section 197(12) of the Act read
with Rule 5(1) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, are annexed as Annexure
IV and forms an integral part of this Report.

In terms of the provisions of Section 197(12) of the Act, read
with Rule 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, a statement
showing the names and other particulars of employees drawing
remuneration in excess of the limits set out in the said rules are
provided in this Integrated Annual Report. In terms of Section 136
of the Act, this report is being sent to the Members and others
entitled thereto, excluding the aforesaid annexure. Any Member

desirous of obtaining a copy of the said annexure may write to the
Company Secretary at investors@parag.com.

Details of top ten employees in terms of the remuneration and
employees in receipt of remuneration as prescribed under rule
5(2) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, as amended, containing
details prescribed under rule 5(3) of the said rules, which form part
of the Directors’ Report, will be made available to any member on
request, as per provisions of section 136(1) of the Act.

SIGNIFICANT AND MATERIAL ORDERS PASSED
BY THE REGULATORS OR COURTS

During the year under review, there were no significant and material
orders passed by the Regulators / Courts that would impact the
going concern status of the Company and its future operations.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review and in terms of Section 118(10) of
the Act, the Company has complied with Secretarial Standards
on Meetings of the Board of Directors (SS-1) and on General
Meetings (SS-2) as amended and issued from time to time by the
Institute of Company Secretaries of India.

AUDITORS

Statutory Auditors

At the 28^th AGM held on September 29, 2020, the Members
approved appointment of M/s. Sharp and Tannan, Chartered
Accountants, Mumbai (Firm Registration No.109982W), as
Statutory Auditors of the Company to hold office for a period of
five years from the conclusion of the 28^th AGM till the conclusion
of the ensuing 33^rd AGM.

The Board, based on the recommendation of Audit Committee,
has proposed re-appointment of M/s. Sharp and Tannan,
Statutory Auditor for another period of 5 years as their current
tenure is valid upto the ensuing AGM. Accordingly, a resolution
seeking members’ approval for the re-appointment of M/s. Sharp
and Tannan as the Statutory Auditor of the Company forms part of
the Notice of the ensuing AGM.

As required under Regulation 33(1)(d) of Listing Regulations,
M/s. Sharp and Tannan, have confirmed that they hold a valid
certificate issued by the Peer Review Board of the Institute of
Chartered Accountants of India. The Statutory Auditors have
further confirmed that they are not disqualified from continuing as
auditors of the Company.

The Auditor’s Report for the financial year ended March 31, 2025
on the financial statements of the Company forms part of the
Integrated Annual Report. The said report was issued by the
Statutory Auditor with an unmodified opinion and does not contain
any qualification, reservation, adverse remark or disclaimer.
During the year under review, the Auditors have not reported any
fraud under Section 143(12) of the Act and therefore no details are
required to be disclosed under Section 134(3)(ca) of the Act.

Internal Auditors

Pursuant to provisions of Section 138 of the Companies Act, 2013
and the rules made thereunder, on the recommendation of the
Audit Committee, the Board at its Meeting held on August 5, 2023
appointed M/s. Deloitte Touche Tohmatsu India LLP, as Internal
Auditors of the Company for FY 2023-24 and FY 2024-25.

At the beginning of each Financial Year, an audit plan is rolled out
after approval of the Audit Committee. The audit plan is aimed
at evaluation of the efficacy and adequacy of internal control
systems in the Company and compliance thereof with the same as
well as robustness of internal processes, policies and accounting
procedures and compliance with laws and regulations. Based
on the reports of internal auditor, the functional heads undertake
corrective action in their respective areas.

Cost Auditors

In accordance with Section 148 of the Act, the Company is required
to maintain the accounts and cost records. It is hereby confirmed
that the Company has maintained the cost records pursuant to
provisions of the said section and accordingly such accounts and
records are prepared and maintained by the Company.

Further, as per the requirements of Section 148 of the Act read
with Rule 14 of the Companies (Cost Records and Audit) Rules,
2014, the cost records are required to be audited by a qualified
Cost Accountant. During FY 2024-25, the Company filed the Cost
Audit Report for FY 2023-24 issued by M/s. Harshad Deshpande
and Associates, Cost Accountants, Pune (Firm Registration
Number: 00378) with the Ministry of Corporate Affairs on August
21, 2024 which did not contain any qualification, reservation,
adverse remark or disclaimer. No frauds were reported by the Cost
Auditors to the Company in the said Report under sub-section
(12) of Section 143 of the Act. Therefore, no detail is required to be
disclosed under Section 134(3)(ca) of the Act.

The Board, upon the recommendation of the Audit Committee,
has re-appointed M/s. Harshad Deshpande and Associates,
Cost Accountants, Pune (Firm Registration Number: 00378) to
conduct audit of the cost records of the Company for FY 2025-26.
Accordingly, the Board of Directors recommends to the Members
the resolution seeking their approval for ratifying the remuneration
payable to the Cost Auditors for FY 2025-26, is provided in the
Notice of the ensuing AGM.

Secretarial Auditor

The Secretarial Audit Report for FY 2024-25 in Form MR-3
is annexed as Annexure V and forms an integral part of this
Report. The said Secretarial Audit Report does not contain any
qualifications, reservations or adverse remarks and no frauds
were reported by the Secretarial Auditors to the Company under
sub-section (12) of Section 143 of the Act therefore no detail is
required to be disclosed under Section 134 (3)(ca) of the Act.

In compliance with Regulation 24A of the SEBI Listing
Regulations and Section 204 of the Act, the Board at its meeting
held on May 2, 2025, has approved the appointment of M/s. N.
L. Bhatia and Associates, Practicing Company Secretaries (UIN:

P1996MH055800) as Secretarial Auditors of the Company for a
term of five consecutive years commencing from FY 2025-26 till
FY 2029-30, subject to approval of the Members’ at the ensuing
AGM. Accordingly a resolution seeking Members’ approval for
the re-appointment of M/s. N. L. Bhatia and Associates as the
Secretarial Auditor of the Company forms part of the Notice of the
ensuing AGM.

OTHER DISCLOSURES

• No application has been made under the Insolvency and
Bankruptcy Code, 2016. Hence, the requirement to disclose

the details of the application made or any proceeding pending
under the said Code during the year along with their status as
at the end of the financial year is not applicable.

• The requirement to disclose the details of the difference
between the amount of the valuation done at the time of
one-time settlement and the valuation done while taking a
loan from the Banks or Financial Institutions along with the
reasons thereof, is not applicable.

• No shares with differential voting rights and sweat equity
shares have been issued during the year under review.

COMPARISON OF SHAREHOLDING DATA AS AT THE END OF FY 2024-25 AND PREVIOUS FY 2023-24

CHANGE IN THE SHAREHOLDING OF TOP TEN EQUITY SHAREHOLDERS OF THE COMPANY AS ON
MARCH 31, 2025:

ACKNOWLEDGEMENTS

The Directors wish to place on record their deep sense of
appreciation for the committed services by the Company’s
employees. The Directors acknowledge with gratitude, the
encouragement and support extended by its valued shareholders.
The Directors also place on record their appreciation for the
support and co-operation which the Company has been receiving

from its suppliers, distributors, retailers, business partners and
others associated as its trading partners.

The Directors also take this opportunity to thank all the Farmers,
Consumers, Employees, Shareholders, Clients, Vendors, Banks,
Government and Regulatory Authorities and Stock Exchanges,
for their continued support.

For and on behalf of the Board of
Parag Milk Foods Limited

Devendra Shah

Mumbai Chairman

May 2, 2025 (DIN: 01127319)