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M K Proteins Ltd.

BSE: 538420 Sector: Industrials
NSE: MKPL ISIN Code: INE964W01013
BSE 00:00 | 28 Mar 10.04 0
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NSE 00:00 | 22 Apr 70.80
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OPEN 10.04
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VOLUME 24
52-Week high 10.04
52-Week low 0.00
P/E 2.94
Mkt Cap.(Rs cr) 4
Buy Price 10.35
Buy Qty 1400.00
Sell Price 0.00
Sell Qty 0.00
OPEN 10.04
CLOSE 10.04
VOLUME 24
52-Week high 10.04
52-Week low 0.00
P/E 2.94
Mkt Cap.(Rs cr) 4
Buy Price 10.35
Buy Qty 1400.00
Sell Price 0.00
Sell Qty 0.00

M K Proteins Ltd. (MKPL) - Director Report

Company director report

To The Members

Your directors have pleasure in presenting the 6th Annual Reporttogether with the Audited Statements of Accounts of the Company for the financial yearended 31st March 2018:

1. Financial Highlights:

2017-18 2016-17
Revenue from Operations 17164.36 16453.49
Operating Expenditure 16612.86 15966.03
Other Income (Net) 5.59 5.46
Earning before interest tax depreciation and amortization
(EBITDA) 557.09 492.92
Finance Costs 214.32 220.42
Depreciation and amortization expenses 122.42 121.18
Profit before exceptional item and tax 220.35 151.32
Exceptional item 0.00 0.00
Profit Before Tax (PBT) 220.35 151.32
Tax Expenses 77.69 52.71
Profit After Tax (PAT) 142.66 98.61
Add: Balance Brought forward from previous year 154.76 259.31
Less: Amount Utilized/Capitalized for issuance of fully paid-
up Bonus Equity Shares 0.00 203.16
Less: Income Tax for earlier years adjusted (0.04) 0
Amount of Surplus available for appropriation 297.46 154.76

2. Operations State of Company s affairs and Future Outlook:

Our Company is a manufacturing and trading organization having its production/refiningplant of Edible Oils. Our manufacturing process involves refining of Crude Oils to obtainRefined Rice Bran Oil Canola Oil Soya Bean Oil Sunflower Oil and Rice Bran BleachedOil. During the refining process certain by-products are also manufactured such as RiceBran Fatty Acid Oil Rice Bran Wax Gums and Spent Earth which are also saleable. Furtherit also imports crude oils process them and sell the finished product and trade in bothedible and non-edible oils. In the current year 2017-18 the Company has earned the totalrevenue from operation Rs.17164.36 Lacs against the previous year Rs.16453.49 whichreflects the growth of 4.32%. The overall growth of the Company is encouraging and samewill further improve in the ensuing years the product of the Company has demand sinceits nature of human consumption in the ensuing financial year and years to come. The netprofit after tax of the company is Rs.72.22 Lacs Rs.98.61 Lacs and Rs.142.66 Lacs in theyear 2015-16 2016-17 and 2017-18 respectively. We further inform that there is no changein the business activities of the company in the current financial year.

3. Dividend:

No dividend has been recommended by the Directors this year and consequently no amountshave been transferred to general reserves.

4. Transfer to Reserves:

The board of the Company has decided not to transfer any fund to general reserve out ofthe amount available for appropriation and an amount of surplus Rs.297.46 Lacs to beretained in the profit and loss account.

5. Change in Share Capital if any

In the Share Capital of the Company following changes took place during the financialyear 2017-18:

Initial Public offer and Listing of shares:

Pursuant to Initial Public Offering (IPO) 1462000 Equity Shares of face value ofRs.10/- per share allotted on dated April 12 2017 at a premium of Rs.60/- per shareaggregating to Rs.1023.40 Lacs. Out of which 74000 Equity Shares reserved for subscriptionby Market Maker to the issue and balance 1388000 shares offered to the Public. The Companyhas incurred expenses of Rs.4182639.00 (net of service tax) relating to fresh issue ofequity shares which has been adjusted to securities premium in terms of Section 52 of theCompanies Act 2013. After public issue the changed paid up share capital of the Companyhas been Rs.41708000.00 (i.e. 4170800 Equity Shares of Rs.10/- each fully paid-up). Theequity shares have been listed on the Emerge SME Platform of the National Stock Exchangeof India Limited w.e.f. 18 April 2017.

6. Initial Public Offering and Deployment of Funds:

Your Directors are pleased to inform you that the Initial Public Offering (IPO) of theCompany was opened on dated March 31 2017 and closed on April 07 2017 and same wassuccessfully completed. The company entered the capital market with its maiden initialpublic offering (IPO) of 1462000 equity shares of face value of Rs.10/- each fully paid upfor cash at a price of Rs.70/- each (Including share premium of Rs.60/- per equity share)aggregating Rs.1023.40 Lacs. Out of which 74000 Equity Shares reserved for subscription byMarket Maker to the issue and balance 1388000 shares offered to the Public. The equityshares have been listed on the Emerge SME Platform of the National Stock Exchange of IndiaLimited w.e.f. 18 April 2017.

Details of utilization of IPO Proceeds are as under:

Category wise Utilization As Stated in Prospectus Actual Utilization Deviation
1. Working Capital Requirement 973.40 981.57 (8.17)
2. IPO Expenses 50.00 41.83 8.17

The IPO proceeds of Rs.1023.40 Lacs were fully utilized as per terms of prospectus. Thedeviations in utilization of proceeds were adjusted among various heads internally.

7. Listing of Shares

The shares of the Company were listed on the Emerge SME Platform of the National StockExchange of India Limited w.e.f. 18 April 2017. Applicable listing fees have been paid upto date. The shares of the Company have not been suspended from trading at any time duringthe year by the concerned Stock Exchange.

8. Deposits:

The company has not accepted any deposits from the public during the year and as suchno amount on account of principal or interest on deposits from public was outstanding ason the date of the balance sheet.

9. Directors:

As per the provisions of Section 152 of the Companies Act 2013 Sh. Parvind KumarDirector of the Company retires by rotation at the forthcoming Annual General Meeting andbeing eligible offered himself for re-appointment. The Board recommends hisre-appointment.

The notice convening the Annual General Meeting includes the proposal for appointmentof Director.

Further your Company has also received declarations from all the Independent Directorsof the Company confirming that they meet with the criteria of Independence as prescribedunder the Act and as per Listing Agreement with the Stock Exchanges.

10. Board Evaluation:

Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out the annual performance evaluation of its ownperformance the Directors individually as well as the valuation of the working of itsvarious committees as per the criteria of evaluation provided in the NominationRemuneration and Evaluation Policy adopted by the Company. The performance evaluation ofIndependent Directors was carried out by the entire Board and the performance evaluationof the Chairman and the Board as a whole was carried out by the Independent Directors.

11. Meetings of the Board:

The Board of Directors of your company met 8 times during 2017-18. Themeetings were held on 12/04/2017 23/05/2017 10/07/2017 24/08/2017 28/09/201714/11/2017 23/01/2018 and 24/03/2018. The intervening gap between the meetings waswithin the period prescribed under the Companies Act 2013.

12. Particulars of Loan given Investment made Guarantee given and Securitiesprovided:

No loans were given investment made guarantee given and securities provided by theCompany under Section 186 of the Companies Act 2013 during the year under review exceptshort term loan given to M/s Saatvik Green Energy Private Limited in which one of theDirector Sh. Parmod Kumar was interested as director and same has duly been repaid withinterest within short duration. The maximum amount involved during the year wasRs.7700000.00 and the year end balance of loans granted to such parties was Nil (Previousyear Nil).

13. Extract of Annual Return:

As provided under Section 92(3) of the Act the extract of annual return is given in AnnexureI in the prescribed Form MGT-9 which forms part of this report.

14. Subsidiary Joint Ventures and Associate Concerns:

The Company does not have any Subsidiary Joint Ventures or Associate Concerns as on 31stMarch 2018.

15. Corporate Governance:

Pursuant to SEBI (Listing obligation and Disclosure Requirements) Regulations 2015 asapplicable with regard to Corporate Governance the company has implemented the code ofCorporate Governance during the year. The reports on Corporate Governance together withCompliance Certificate on the same are attached to this report.

16. Management s Discussion and Analysis Report

Management year under review as stipulated under SEBI (Listing obligation andDisclosure Requirements) Regulations 2015 as applicable is presented in a separatesection forming part of the Annual Report.

17. Directors Responsibility Statement:

In accordance with the provisions of Section 134(5) of the Companies Act 2013 thedirectors hereby confirm that: i) in the preparation of the annual accounts for thefinancial year ended 31st March 2018 the applicable accounting standard havebeen followed and there are no material departures; ii) they have selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2018 and of the profit of the Company for the periodfrom 1st April 2017 to 31st March 2018; iii) they have taken properand sufficient care for the maintenance of adequate accounting records in accordance withthe provisions of the Companies Act 2013 for safeguarding the assets of the company andfor preventing and detecting fraud and other irregularities;

iv) they have prepared the annual accounts on a going concern basis;

v) they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively; and

vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

18. Contract and arrangements with Related Parties:

The Company transactions has been formulated and amended from time to time. Allcontracts/arrangements/ transactions entered by the Company during the financial year withrelated parties were in the ordinary course of business and on the arm basis. There are nomaterially significant related party transactions made by the company with promotersdirectors key managerial personnel or other designated persons which may have apotential conflict with the interest of the company at large. Your Directors drawattention of the members to Note 29(g) to the financial statements which set out relatedparty disclosures pursuant to listing agreement. Information on transactions with relatedparties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies(Accounts) Rules 2014 are given in Annexure II in Form AOC-2 and the sameforms part of this report.

19. Auditor and Auditors Report:

M/s Jayant Bansal & Co. Chartered Accountants Ambala Cantt Statutory Auditors ofthe company holds office till the conclusion of the ensuing Annual General Meeting andare eligible for ratification and approval of their appointment for the financial yearending 31st March 2019.

M/s Jayant Bansal & Co. Chartered Accountants Ambala Cantt who were appointed asStatutory Auditors for a period of 4 years from 31st March 2016 to 31st March2019 being eligible for ratification and approval of their appointment at this AnnualGeneral Meeting have agreed to act Statutory Auditors to the Company for the financialyear ending 31st March 2019.

As required under the provisions of section) of the Companies Act 2013 the companyhas received a written consent from M/s Jayant Bansal & Co. Chartered Accountant totheir appointment and a certificate to the effect that their re-appointment if madewould be in accordance with the Act and the Rules framed there under and that they satisfythe criteria provided in section- 141 of Companies Act 2013. The Board recommends theirappointment for the financial year 2018-19.

The report of Statutory Auditors (appearing elsewhere in this Annual Report) isself-explanatory having no adverse comments. There were no instances of fraud reported bythe Statutory Auditors to the Central Government or to the Audit Committee of the Companyas indicated under the provisions of Section 143(12) of the Companies Act 2013.

Further auditor ed 31st March 2018 is given as an annexure which forms partof this report.

20. Secretarial Auditors:

Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s J. P. Jagdev & Co. Ambala City a firm of Company Secretaries inpractice to conduct Secretarial Audit for the financial year 2017-18. The SecretarialAudit Report for the financial year ended 31st March 2018 is annexed herewithas Annexure III to this Report. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.

21. Corporate Social Responsibility (CSR):

The Company is not required to constitute a Corporate Social Responsibility Committeeas it does not fall within purview of Section 135(1) of the Companies Act 2013 and henceit is not required to formulate policy on corporate social responsibility.

22. Risk Management:

The board of the Company has formed a risk management committee to frame implementand monitor the risk management plan for the Company. The Committee is responsible forreviewing the risk management plan and ensuring its effectiveness. The audit committee hasadditional oversight in the area of financial risks and controls. Major risks identifiedby the businesses and functions are systematically addressed through mitigating actions ona continuing basis.

23. Internal Control System and their adequacy:

The Company th the size of the company and the nature of its business. These have beendesigned to provide reasonable assurance with regard to recording and providing reliablefinancial and operational information complying with applicable statutes safeguardingassets from unauthorized use executing transactions with proper authorization andensuring compliance of corporate policies. The company has an audit committee the detailsof which are provided in the Corporate Governance Report. The audit committee reviews theinternal control system and follows up on the implementation of corrective actions ifrequired. The committee also meets the company interalia their views on the adequacy ofinternal control system in the Company and keeps the Board of Directors informed of itsmajor observations from time to time. The management also regularly reviews theutilization of fiscal resource compliance with law efficiencies so as to ensure optimumutilization of resources and achieve better efficiencies. Based on its evaluation (asdefined in section 177 of Companies Act 2013) our audit committee has concluded that asof March 31 2018 our internal financial controls were adequate and operatingeffectively.

24. Vigil Mechanism Policy:

The Company has a vigil mechanism policy which also incorporates a whistle blowerpolicy in line with the provisions of the Section 177(9) and (10) of the Companies Act2013 and regulation 22 of the Listing Regulations which deals with the genuine concernsabout unethical behaviour actual or suspected fraud and violation of the Company ofConduct and ethics.

25. Committees of Board:

The Board of Directors of your Company had already constituted various committees incompliance with the provisions of the Companies Act 2013 and Listing Agreement viz. AuditCommittee Nomination and Remuneration Committee Shareholder s/Investor ManagementCommittee. All decisions pertaining to the constitution of committees appointment ofmembers and fixing the terms of reference / role of the Committees are taken by the Boardof Directors. Detail of the role and composition of Committees including the number ofmeetings held during the financial year and attendance at meetings are provided in theCorporate Governance Report section of the Annual Report which forms part of this report.

26. Conservation of Energy Technology absorption and foreign exchange earning andoutgo:

Information required under Section 134(3) (m) of Companies Act 2013 read withCompanies (Accounts) Rules 2014 is given as under:

(A) Conservation of energy:

(i) The steps taken or impact on conservation of energy: The Company is usingGovernment supply of electricity and own generation by its generators.

(ii) The steps taken by the company for utilizing alternate sources of energy: Thereare no alternate sources of energy with the Company.

(iii) The capital investment on energy conservation equipments: Investment on energyconservation equipments is made wherever it is possible mostly it is NIL.

(B) Technology absorption:

(i) The efforts made towards technology absorption: Plant and machinery areindigenous and no machinery and technology has been imported by the Company

(ii) The benefits derived like product improvement cost reduction product developmentor import substitution: Indigenous machinery is state of Art and the company derivesbenefits on cost reduction of production.

(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)- : No technology has been imported by theCompany.

(iv) The expenditure incurred on Research and Development: No specific expenditure isincurred on Research and Development.

(C) Foreign exchange earnings and Outgo:

The Company vegetable edible oils. The Company has achieved Export Turnover of Rs.Nil during the year under report 2017-18 as compared to Rs. Nil in theprevious year 2016-17. However the Company has incurred expenditure in foreigncurrency for import of material. The details of the same are given below: -

Particulars 2017-18 2016-17
Total Foreign Exchange Received (F.O.B. Value of Export) NIL NIL
Total Foreign Exchange used:
i) Raw Materials & Consumable Stores 60066006.48 379947640.89
ii) Capital Goods NIL NIL
iii) Foreign Travels NIL NIL
iv) Others (Traded Goods) NIL 51559100.00

27. Nomination Remuneration and Evaluation Policy:

The Nomination Remuneration and Evaluation Policy recommended by the Nomination andRemuneration Committee is duly approved by the Board of Directors of the Company and thesame are provided in the Corporate Governance Report section of the Annual Report whichforms part of this report.

28. Human Resources:

Your Company treats its its most important assets and has taken continuous efforts toset up and maintain an efficient work force. The company is continuously taken stepstowards maintaining a low attrition rate which it believes shall be achieved by investingin learning and development programmes for employees competitive compensation creating acompelling work environment empowering employees at all levels as well as awell-structured reward and recognition mechanism.

29. Particulars of Employees:

I) The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:

a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:

Executive Director Ratio to median Remuneration
1 Sh. Vinod Kumar (Managing Director) 0.20:1
2. Sh. Raj Kumar (Whole Time Executive Director) 0.20:1

Note: The Company has not given any remuneration/benefits tonon-executive/independent directors of the company during the year 2017-18 exceptdirectors Non-executive Independent directors.

b. The percentage increase in remuneration of each director chief executive officerchief financial officer company secretary in the financial year:

Directors Company Secretary and Financial Officer % increase in remuneration in the financial year
1 Sh. Vinod Kumar (Managing Director) NIL
2. Sh. Raj Kumar (Whole Time Executive Director) NIL
3. Ms. Shipra Anand (Company Secretary) NIL
4. Sh. Nipun Garg (Financial Officer) NIL

c. The percentage increase in the median remuneration of employees in the financialyear: 3%

d. The number of permanent employees on the rolls of Company: 32 Employees as on31st March 2018.

e. The explanation on the relationship between average increase in remuneration andCompany performance: The performance of the Company for the current financial year isbetter than the previous year. The Company has minor increase in remuneration to ExecutiveDirector/key managerial personnel. However at Middle & Junior level management theproper increment was given in accordance with the inflation rate and at workmen and stafflevel.

f. Comparison of the remuneration of the key managerial personnel against theperformance of the Company: Remuneration to Managing and Whole Time directors werepaid as per the scale approved by the members of the company. The head (Corporate Finance)was promoted to the position of Financial Officer hence he was given an increase as apart of promotion and salary adjustment.

g. Variations in the market capitalization of the Company price earnings ratio asat the closing date of the current financial year and previous financial year:

Particulars March 31 2018 March 31 2017 % Change
Market Capitalization 3330.38 NIL -
(Rs. In Lacs)

Note: The equity shares have been listed on the Emerge SME Platform of the NationalStock Exchange of India Limited w.e.f. 18 April 2017 hence figure of marketcapitalization as at March 31 2017 is not available.

h. Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the Last public offer:

Particulars March 31 2018 At the time of Last Public offer % Change
Market Price (NSE) 79.85 70.00 14.07%
(Average Price)

i. Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

Proper increments at both managerial and staff/worker level has been given in financialyear 2017-18.

j. Comparison of each remuneration of the key managerial personnel against theperformance of the Company: The head (Corporate Finance) was promoted to the positionof Financial Officer hence he was given an increase as a part of promotion and salaryadjustment.

k. The key parameters for any variable component of remuneration availed by thedirectors: No such variable component is included in the remuneration paid todirectors. l. The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year: Sh. Raj Kumar (Whole Time Director): 0.20:1

m. Affirmation that the remuneration is as per the remuneration policy of theCompany: The Company affirms remuneration is as per the remuneration policy of theCompany.

II. There was no employee on the roll of the company who drew remuneration in excess ofthe limits prescribed by the provisions of Section 197(12) of the Companies Act 2013 readwith Rules 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 hence this relevant information is not applicable to the Company.

30. Disclosure under sexual harassment of women at workplace (PreventionProhibition & Redressal) Act 2013:

In order to prevent sexual harassment of women at work place a new act The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen notified on 9th December 2013. Under the said Act every company is required to setup an Internal Complaints Committee to look into complaints relating to sexual harassmentat work place of any women employee. Company has adopted a policy for prevention of SexualHarassment of Women at workplace and has set up Committee for implementation of saidpolicy. During the year Company has not received any complaint of harassment.

31. Other Disclosures:

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

i) No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company tions in future.

ii) No Material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which these financial statements relateand the date of this Report.

2. The provisions of Section 125(2) of the Companies Act 2013 related with transfer ofunclaimed dividend to Investor Education and Protection Fund do not apply to the Companyas there was no dividend declared and paid in previous years and there is no unclaimeddividend.

3. Equity Shares:

No issue of equity shares with differential rights as to dividend voting or otherwiseduring the year under review.

The Company has not bought back any of its securities during the year under review.

No issue of shares (including sweat equity shares) to employees of the Company underStock option Scheme during the year under review.

No Shares outstanding under the head Shares Suspense Account/Unclaimed Suspense

Account at the beginning and end of the year under review.

32. Acknowledgements:

Your directors wish to place on record their gratitude for the valued support andassistance extended to the Company by the Shareholders Banks and Government Authoritiesand look forward to their continued support. Your directors also express theirappreciation for the dedicated and sincere services rendered by the Executives Officersand Employees of the Company.

By Order of the Board of Directors
Place: Ambala
Dated: 28-08-2018
(VINOD KUMAR)
Managing Director
DIN: 00150507