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Megastar Foods Ltd.

BSE: 541352 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE00EM01016
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NSE 05:30 | 01 Jan Megastar Foods Ltd
OPEN 27.50
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VOLUME 6000
52-Week high 86.95
52-Week low 25.00
P/E 8.43
Mkt Cap.(Rs cr) 29
Buy Price 27.00
Buy Qty 4000.00
Sell Price 29.00
Sell Qty 2000.00
OPEN 27.50
CLOSE 29.00
VOLUME 6000
52-Week high 86.95
52-Week low 25.00
P/E 8.43
Mkt Cap.(Rs cr) 29
Buy Price 27.00
Buy Qty 4000.00
Sell Price 29.00
Sell Qty 2000.00

Megastar Foods Ltd. (MEGASTARFOODS) - Director Report

Company director report

TO THE MEMBERS

The Directors are pleased to present the 9th Annual Report on the businessand operations of the Company together with the Audited Accounts for the financial yearended March 31 2020.

GENERAL OUTLOOK OF THE COMPANY

Our Company is having state of the art modern machinery at its wheat processing plantin Punjab India with an installed capacity of 84000 MT. It has been our constantendeavour at all the levels to ensure processing of wheat with quality undertakingtesting and exploring new possibilities by our team of highly skilled people. It has beenour hallmark in our organization to strictly follow the Good Manufacturing Practices(GMP) Good Laboratory Practices (GLP) to ensure the high standards of food safetyquality & hygiene. At present we are catering primarily to MNC's in India and alsoexporting some of our products to United Nations Organization Europe United States &

Middle East.

Our company's main aim is to maintain and deepen relationships with our customers towhich we can serve successfully by providing them a point of difference adding value andultimately providing profitable growth for both parties. Our customers are supported by ahighly skilled enthusiastic can-do culture team throughout the whole business. Ourendeavour is to maintain an efficiently sound business in order to provide a securedfuture to our fellow employees while stressing on the continual improvement of our highlyranked products for a constantly enhanced customer satisfaction.

For the financial year ended on March 31 2020 the company has earned a net profit ofRs. 340.39 Lakhs as compared to the net profit of Rs. 242.56 Lakh for the previous yearended on March 31 2019.

FINANCIAL PERFORMANCE

The financial position of the company for the financial year ended on March 31 2020issummarised below:

PARTICULARS STANDALONE CONSOLIDATED
2019-20 2018-19 2019-20 2018-19*
Revenue from Operations 16296.64 14232.38 16315.96 --
Other Income 8.89 4.15 6.34 --
Total Revenue 16305.53 14236.53 16322.31 --
Profit Before Tax Depreciation and Finance Cost and 925.21 751.63 922.68 --
extraordinary items
Finance Cost (325.22) (311.15) (325.22) --
Depreciation and Amortization expenses (126.26) (98.25) (126.26) --
Prior period expenses (0.14) (2.31) (0.14) --
Profit before Tax 473.59 339.92 471.06 --
Tax (133.20) (97.35) (133.20) --
Profit After Tax 340.39 242.56 337.85 --
Earnings Per Share:
Basic 3.44 2.55 3.41 --
Diluted 3.44 2.55 3.41 --

*there is no such consolidated figures for FY 2018-19 as M/s Megapacific VenturesPrivate Limited was incorporated on April 23 2019

OPERATIONS Standalone

Revenue from operations for the year ended March 31 2020 stood at Rs. 16296.64 Lakhsas against Rs. 14232.38 Lakhs for the previous year. Profit after tax for the year endedMarch 31 2020 was Rs. 340.39 Lakhs and EPS is Rs. 3.44/- per share as against a netprofit and EPS of Rs. 242.56 Lakhs and Rs. 2.55/- per share respectively for the previousyear.

Consolidated

During the financial year Megapacific Ventures Private Limited was incorporated as theWholly Owned Subsidiary of Megastar Foods Limited on April 23 2019 Based on theapplicable provisions of the Companies Act 2013 and the applicable accounting standardsthe company has consolidated the financial statements of Megapacific Ventures PrivateLimited (WOS) with Megastar Foods Limited (Holding Company) for the FY 2019-20 for thefirst time.

The consolidated Revenue from operations for the year ended March 31 2020 stood at Rs.16315.96Lakhs.

In the preparation of Financial Statements the provisions of the Companies Act 2013(the "Act") read with the

Companies (Accounts) Rules 2014 applicable Accounting Standards and Securities andExchange Board of India

(Listing Obligations and Disclosure Requirements) Regulations 2015 (the "ListingRegulations") have been followed.

DIVIDEND

Your Directors have decided to plough back the earnings in the growth of business andfor this reason have decided not to recommend any Dividend for the year under review.

CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statement up to and for the year ended March 31 2020 wasprepared in accordance with the Companies (Accounting Standards) Rules 2006 (previousGAAP) notified under Section 133 of the Act and other relevant provisions of the Act isseparately disclosed in the Annual Report.

As per the requirements of Section 129 of the Act read with Rule 5 of the Companies(Accounts) Rules 2014 a statement containing salient features of the financialstatements of the subsidiary company in Form AOC-1 is attached as ANNEXURE-1

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion & Analysis Report for the year under review which also coversthe performance of the company is presented in a separate section and forms a part of thisAnnual Report.

CORPORATE GOVERNANCE

The compliance with the corporate governance provisions as specified in SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 are not applicable to yourCompany as the Company is listed on BSE SME exchange. However the company hasvoluntarily adopted majority of the provisions of the said regulations as a part of itsendeavour towards good corporate governance practice. A report on Corporate Governance hasbeen submitted by the company as a part of this report.

INDUSTRIAL RELATIONS

Industrial relations and work atmosphere remained cordial throughout the year withsustained communication and engagement with workforce through various forums.

CREDIT RATING

The Company enjoys a credit rating provided by Brickwork BWR BBB- for long term and BWRA3 for short term which is assured to be substantially improved on the basis of currentresults. The Company has not defaulted in payment of its obligations to any financialinstitutions during FY 2019-20.

SAFETY HEALTH AND ENVIRONMENT

The Company continues to demonstrate strong commitment to safety health andenvironment which have been adopted as core organizational values. The Company assuressafety and facilities in accordance with statutory and regulatory requirements. Employeesare continuously made aware of hazards / risks associated with their job and theirknowledge and skills are updated through requisite training to meet any emergency. Medicaland occupational check-ups of employees and eco-friendly activities are promoted. TheCompany does not produce any kind of hazardous waste.

FINANCE

Increase in sales and elongated working capital cycle during the year are the majorcauses for an increased finance cost during the year. The finance cost for the year endedon March 31 2020 was Rs. 325.22 lakhs. The Company managed to procure enough lines ofcredit to ensure a smooth flow of operations. The free reserve of the Company as on 31stMarch 2020 increased from Rs. 880.21 lakhs to 1220.59 lakhs.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the financial year 2019-20 the company had the following directors and KeyManagerial Personnel:

S. No. NAME DESIGNATION DATE OF APPOINTMENT
1. Mr. Vikas Goel Chairman cum Managing Director (CMD)(KMP) 28/11/2011
2. Mr. Vikas Gupta Whole Time Director (WTD) 28/11/2011
3. Mr. Mudit Goyal Whole Time Director (WTD) 31/03/2018
4. Mr. Amit Mittal Non-Executive Independent Director (NEID) 04/04/2018
5. Mr. Prabhat Kumar Non-Executive Independent Director (NEID) 04/04/2018
6. Ms. Savita Bansal Non-Executive Independent Director (NEID) 04/04/2018
7. Mr. Robin Kumar Company Secretary (KMP) 27/02/2019
8. Mr. Manisha Gupta Chief Financial Officer (KMP) 12/02/2020
9. Mr. Vijay Sharma Chief Financial Officer (KMP) 31/03/2018

The independent Directors are entitled to hold office for a term of 5 years and are notliable to retire by rotation.

Mr. Vikas Goel (DIN: 05122585) Chairman and Managing Director of the Company retires byrotation at the ensuing 9th Annual General Meeting of the company and beingeligible offers himself for reappointment. Though such determination of office byretirement and then re-appointment if approved by the members at the ensuing AnnualGeneral Meeting would not constitute a break in his tenure of service as the Chairman andManaging Director of the Company.

Ms. Manisha Gupta was appointed as the Chief Financial Officer w.e.f. 12.02.2020 inplace of Mr. Vijay Sharma who resigned from the office of CFO w.e.f. 12.02.2020

None of the Directors of your Company is disqualified under the provisions of Section164(2)(a) and (b) of the Companies Act 2013. During the period under review none of theNon- Executive Directors of the Company had any pecuniary relationship or transactionswith the Company. Further none of the Non-Executive Directors of the company have anyshareholding in the company.

The details of the Directors being recommended for appointment/ re-appointment arecontained in the Notice convening the forthcoming Annual General Meeting of the Company

DECLARATION OF INDEPENDENCE

All the independent Directors have given declaration to the Company that they meet thecriteria of 'independence' set out in the SEBI (LODR) Regulations 2015 and the CompaniesAct 2013. The Board is of the opinion that the Independent Directors of the Company holdhighest standards of integrity and possess requisite expertise and experience required tofulfil their duties as Independent Directors.

In terms of Section 150 of the Companies Act 2013 read with the Rules framed thereunder Independent Directors of the Company have confirmed to the Company that they haveregistered themselves with the databank maintained by the Indian Institute of CorporateAffairs (IICA).

SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

During the year under review M/s Megapacific Venture Private Limited was incorporatedas a Wholly Owned Subsidiary (WOS) of Megastar Foods Limited on April 23 2019 Apart fromthis; Company has no Joint Venture or Associate Company in the Financial Year 2019-20.

SUBSIDIARIES

Megapacific Ventures Private limited wholly owned subsidiary of the Company is havingmain object of manufacturing co- manufacturing including production and processingtrading buying selling dealing importing exporting all types of packaging materialsincluding but not restricted to cartons boxes and cases wholly or partly made of papersthermocol boards wood glass plastic rubber metals tin or otherwise and glassbottles glass jars flasks casks and glass containers of every description and packingrequisite of every kind.

Megapacific Ventures Private Limited is planning to commence its business operationsoon as the Company could not start its operation in the Financial year 2019-20 due tochanges in government policy related to the packaging industry. The stakeholders may notethat the construction of the company's office building and manufacturing unit at Derabassiwas in progress and then was put on hold to evaluate the options of establishing the unitat

Derabassi or at Ropar by examining all pros and cons involved at both the locationsso that the appropriate decision may be made at the earliest keeping in mind the best ininterest of both the Companies.

The revenue of Megapacific Ventures Private limited for the year ended March 31 2020was Rs. 19.32 Lakhs. The Profit before tax for the year was Rs. 0.01 Lakhs.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management andAdministration) Rules 2014 the extract of Annual Return in Form MGT-9 is attached as ANNEXURE-2.

Further a copy of the said extracts of Annual Return is also available on thecompany's website at the weblink:https://www.megastarfoods.com/Other-stock-exchange-compliances

PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES

All related party transactions entered into during FY 2019-20 were on an arm's lengthbasis and in the ordinary course of business. During FY 2019-20 the Company has notentered into any material related party transaction and Particulars of contracts orarrangements with related parties referred to in section 188 (1) of the Companies Act2013 in the prescribed Form AOC-2 is appended as ANNEXURE- 3 to the Board'sReport.

The Company has formulated a policy on dealing with related party transactions which isposted on the website of the Company at the web linkhttps://www.megastarfoods.com/assets/pdf/Policy-on-related-party-transactions.pdf

NUMBER OF BOARD MEETINGS AND COMMITTEE MEETINGS

During the year under review 04 (Four) Board meetings 5 (Five) Audit Committeemeetings 4 (Four) Stakeholders Relationship Committee meetings 3 (three) Nomination& Remuneration Committee meetings 1 (One) Corporate Social responsibility Committeemeeting and 08 (Eight) Finance and Investment Committee were convened and held. Detailsand attendance of such Board & Committees meetings are mentioned in CorporateGovernance Report.

Pursuant to clause VII (1) of Schedule IV of the Companies Act 2013 the IndependentDirectors had a separate meeting on 24.05.2019.

PROGRAMME FOR FAMILIARISATION OF INDEPENDENT DIRECTORS

The details of programme for familiarization of independent directors of the Companytheir roles rights responsibilities in the Company nature of the industry in which theCompany operates business model of the

Company and related matters are put up on the website of the Company's websitewww.megastarfoods.com

PARTICULARS OF LOANS/ ADVANCES/ INVESTMENTS MADE DURING THE FINANCIAL YEAR

Particulars of loans guarantees investments and securities provided during thefinancial year under review covered under the provisions of Section 186 of the CompaniesAct 2013 have been provided in the Financial Statements which forms part of the AnnualReport.

RESERVES

Entire amount of Net Profit of Rs. 340.39 Lakhs for the financial year 2019-20 hasbeen transferred to Profit and

Loss Surplus account which appears under the head "Reserves and Surplus." Noamount has been transferred to any other reserves.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING FINANCIAL POSITION OF THE COMPANYFROM THE END OF FINANCIAL YEAR AND TILL THE DATE OF THIS REPORT

No material changes and commitments which could affect the Company's financial positionhave occurred since the close of the financial year on March 31 2020 till the date ofthis Board's Report. Further it is hereby confirmed that there has been no change in thenature of business of the Company during the financial year 2019-20.

SUSTAINABILITY INITIATIVE

Your Company is conscious of its responsibility towards preservation of naturalresources and continuously takes initiatives to reduce consumption of electricity andwater.

RISK MANAGEMENT

The primary objective of risk management is to protect the Company against risks to thevalue of the business its capital and its continuity. In order to achieve the objectiveand for better governance the Company has adopted a formal Risk Management Policy andalso posted on the Company website: www.megastarfoods.com. The Policy sets out key riskareas - financial risks (including risk to assets) legislative and regulatory risksenvironmental risks (including natural disasters) operational risks (markets productiontechnology etc.) risks relating to employment and manpower and individual largetransactional risks.

The Chairman-cum-Managing Director of the company identifies and proposes action inrespect of all risks through his Management team as and when any are perceived or foreseenor inherent in operations; analyses these and then recommend it to Audit Committee forits review and further mitigation measures.

CHANGE IN THE NATURE OF BUSINESS

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

SHARE CAPITAL

The authorised share capital of the company at the end of the Financial Year 2019-20was Rs. 150000000/- comprising of 15000000 equity shares of Rs. 10/- each and thepaid up capital was 99037000 divided into 9903700 equity shares of Rs. 10/- each.There were no changes in the share capital of the company during the financial year2019-20. There were no instance of bonus issue right issue ESOP buy back of share orissue of shares with differential voting rights during the year.

DEPOSITS

The Company has neither accepted nor renewed any fixed deposits from the public or theMembers within the meaning of Section 73 of the Companies Act 2013 read with Chapter Vof the Companies Act 2013 and the Companies Acceptance of Deposits) Rules 2014 duringthe financial year 2019-20 and as such no amount of principal or interest on depositsfrom public or the Members was outstanding as of the Balance Sheet date.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL

There are no significant and/or material orders passed by the Regulator(s) or Court(s)or Tribunal(s) impacting the going concern status of the Company and its businessoperations in near future.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO

The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in ANNEXURE-4 and is attached to this report.

HUMAN RESOURCES AND EMPLOYEE RELATIONS

There is an on-going emphasis on building a progressive Human Resources culture withinthe Organisation. Structured initiatives to nurture talent and create a workingenvironment that fosters motivation team-work and result orientation continue to beaddressed. Productivity level continued to be subject to continuous monitoring.

Employee strength as on March 31 2020 was 99 as compared to 83 in the previous year.

DISCLOSURE OF INTERNAL FINANCIAL CONTROLS

The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate and commensurate with the size scale andcomplexity of its operation. The internal controls are tested for adequacy efficiency andeffectiveness through audits by the in- house internal audit department and theobservations corrective and preventative actions are reviewed by the management and Auditcommittee of the Board of Directors.

During financial year under review no material or serious observation has beenreceived from the Internal Auditors of the Company for inadequacy or ineffectiveness ofsuch controls.

VIGIL MECHANISM POLICY

The Company has in place a Vigil Mechanism/ Whistle Blower Policy in terms ofprovisions of Section 178(9) of the Companies Act 2013 read with Rule 7 of the Companies(Meetings of Board and its powers) Rules 2014 which was approved by the Board ofDirectors on 4th April 2018. The Company's personnel have direct access to thechairman of the Audit Committee to report concerns about unethical behaviour (actual orsuspected) frauds and other grievances. No personnel of the Company have been deniedaccess to the Audit Committee. Adequate safeguards are being provided againstvictimization of whistle blowers availing of such mechanism.

Whistle Blower Policy of the Company is posted on the website of the Company at theweblink: http://megastarfoods.com/whistle-blower

CERTIFICATIONS

Your company is having following certificates: BRC FOOD INDIA ORGANIC NPOP/NAB/002HALAL INDIA and SEDEX (enabling responsible supply chains) for its quality managementsystems and supplies employed at every level of the organization.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

Your Company has zero tolerance policy in case of sexual harassment at workplace and iscommitted to provide a healthy environment to each and every employee of the Company. TheCompany has in place ‘Policy for

Prevention and Redressal of Sexual Harassment' in line with the requirements ofSexual Harassment of Women at Workplace (Prevention Prohibition & Redressal) Act2013 (hereinafter referred "as the said act") and

Rules made there under. As per the provisions of Section 4 of the said Act the Boardof Directors has constituted the Internal Complaints Committee (‘ICC') at theRegistered Office Works to deal with the Complaints received by the Company pertaining togender discrimination and sexual harassment at workplace.

Further as per the provisions of Section 21 & 22 of the said Act the Report onthe details of the number of cases filed under Sexual Harassment and their disposal forthe financial year under review is as under:

Sr. No. of cases pending as on the No. of complaints filed during No. of cases pending as on
No. beginning of the financial year the financial year under review the end of the financial year
under review under review
NIL

SECRETARIAL STANDARDS

The Company has duly complied with the applicable Secretarial Standards on Meeting ofBoard of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of CompanySecretaries of India (ICSI).

DIRECTOR'S RESPONSIBILITY STATEMENT

In terms of Section 134(3) (c) read with Section 134(5) of the Companies Act 2013 theBoard of Directors hereby confirms that: a. In the preparation of the annual accounts theapplicable accounting standards have been followed along with proper explanation relatingto material departures; b. Such accounting policies have been selected and appliedconsistently and the Directors have made judgements and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as atMarch 31 2020 and of the Profit and Loss of the Company for the year ended on that date;c. Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of this act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities; d. The annualaccounts of the Company have been prepared on a going concern basis; e. Internal financialcontrols have been laid down to be followed by the Company and that such internalfinancial controls are adequate and were operating effectively; f. Proper systems havebeen devised to ensure compliance with the provisions of all applicable laws and that suchsystems were adequate and operating effectively.

ALTERATION OF MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION

During the financial year under review the company has not carried out any amendmentto the Memorandum of Association and Articles of Association of the company.

MEETINGS OF THE BOARD

Four Board meetings were held during the year as detailed in the Corporate GovernanceReport which forms part of this report.

AUDIT COMMITTEE

The Audit Committee comprises of three independent Directors Mr. Prabhat Kumar asChairman Mr. Amit Mittal and Ms. Savita Bansal. All the recommendations made by the AuditCommittee during the year were accepted by the Board. The details of meeting andattendance are provided in Corporate Governance report which forms part of the AnnualReport.

COMMITTEES OF BOARD OF DIRECTORS

The Board of directors have the following statutory committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee

4. Corporate Social Responsibility Committee

Apart from above the Board has constituted 1 (non-statutory) committee namely Financeand Investment Committee.

The Composition terms of reference and number of meetings of the Committees during theperiod under review is covered in the enclosed Corporate Governance Report.

STATUTORY AUDITOR AND THEIR REPORT

M/s Avnish Sharma & Associates (Firm Reg. No. 009398N) Chartered AccountantsChandigarh were Re- appointed in the 8th the Annual General Meeting held on 16thSeptember 2019 for a further term of 4 (Four) years to hold officer upto the 12thAnnual General Meeting.

The comments of the auditor being self-explanatory require no further comments from theDirectors. Further there are no reservations qualifications adverse remarks or Modifiedopinion in the Audit Reports issued by them in respect of Financial Statements of theCompany for the Financial Year 2019-20.

HUMAN RESOURCES DEVELOPMENT

It is a proud statement in itself that your Company continues to be an Employer ofchoice for a host of workforce. Value based HR programs unleashed by the Company from timeto time have enabled the company's HR team to contribute substantially to the overallgrowth of the Company. In order to keep pace with the ever evolving demands of theexisting business and the gamut of activities in Digital space HR has been placingtremendous focus on capability building in newer areas with an objective to predictdiagnose and take actions that will improve business performance. Further discussion onthis subject is included in the Management Discussion and Analysis Report forming part ofthis report.

NOMINATION &REMUNERATION POLICY AND BOARD EVALUATION

Pursuant to the requirement of Section 134(3)(e) and Section 178(3) of the CompaniesAct 2013 the Board has on the recommendation of the Nomination and RemunerationCommittee framed a policy on appointment of Directors including criteria for determiningqualifications positive attributes independence of a Director and the policy onremuneration of Directors KMP and other senior management. Remuneration policy in theCompany is designed to create a high performance culture. It enables the Company toattract retain and motivate employees to achieve results. Our Business Model promotescustomer centricity and requires employee mobility to address project needs. Theremuneration policy supports such mobility through pay models that are compliant toapplicable rules and regulation.

The Company pays remuneration by way of salary benefits perquisites and allowancesand commission if approved by the Board to its Managing Director and the Whole TimeDirectors. Annual increments are decided by the Nomination and Remuneration Committeewithin the salary scale approved by the members and are effective April 1 each year. TheNomination and Remuneration Committee decides on the commission payable to the ManagingDirector and the Whole Time Directors out of the profits for the financial year and withinthe ceilings prescribed under the Act based on the performance of the Company as well asthat of the Managing Director and each Whole Time Director. The copy of the Nomination andRemuneration Policy of the company is attached as

ANNEXURE- 7

Managerial Remuneration: a. Remuneration of Chairman & Managing Director andWhole Time Directors

The details of remuneration paid to Chairman & Managing Director and Whole TimeDirectors of the Company for the financial year 2019-20 are as under:

PARTICULARS Mr. Vikas Goel Mr. Vikas Gupta Mr. Mudit Goyal
Salary (In Lakhs) 41.80 41.80 21.10
Contribution to PF & Other Funds
Total(In Lakhs) 41.80 41.80 21.10

b. Non-Executive Independent Directors (NEIDs):

During the year the NEIDs were neither paid any remuneration nor granted any loans oradvances. The Non-Executive Directors were eligible for sitting fees for each meeting ofthe Board attended by him/her of such sum as may be approved by the Board of Directorswithin the overall limits prescribed under the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. A Non-Executive Director is alsoeligible for reimbursement the expenses incurred by him for attending the Board and / orCommittee of Board meetings. There were no materially significant related partytransactions pecuniary transactions or relationships between the Company and itsDirectors except those disclosed in the financial statements for the year ended on March31 2020.

The details of sitting fees paid to the Non-Executive Directors during the financialyear 2019-20 are given below:

S. No. Name of the Non- Executive Director Sitting Fees (in Rs.)
1. Mr. Prabhat Kumar 17000
2. Mr. Amit Mittal 22000
3. Ms. Savita Bansal 22000
Total 61000

c. Details of shares of the Company held by the Directors as on March 31 2020 aregiven below:

S. No. Name of the Director No. of Equity Shares Held
1. Mr. Vikas Goel 2492660
2. Mr. Vikas Gupta 2139900
3. Mr. Mudit Goyal 181500
4. Mr. Prabhat Kumar Nil
5. Mr. Amit Mittal Nil
6. Ms. Savita Bansal Nil

DISCLOSURE PERTAINING TO MANAGERIAL REMUNERATION

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided as per ANNEXURE- 5.

SECRETARIAL AUDITOR AND AUDIT REPORT

The Board had appointed Mr. Kanwaljit Singh Thanewal Practicing Company Secretary (M.No. 5901 & C.P. No. 5870) as Secretarial Auditor to conduct the secretarial audit ofthe company for the financial year 2019-20 pursuant to the provisions of Section 204 ofthe Companies Act 2013. The Report of the Secretarial Auditor forms part of the Board'sReport as ANNEXURE- 6. The said report of the Secretarial Auditor contains noqualifications or adverse remarks.

REPORTING OF FRAUDS

There has been no frauds reported by the Auditors under sub section (12) of Section143 of the Companies Act 2013 (including amendments) during the financial year underreview to the Board of Directors and hence as such there is nothing to report by theBoard under Section 134(3)(ca) of the Companies Act 2013.

COST AUDIT

As per the provisions of Section 148 read with the Cost Audit Rules the provisionsregarding Cost Audit is not applicable to the Company.

AMOUNTS DUE TO MICRO SMALL AND MEDIUM ENTERPRISES

During the Financial Year 2019-20 there being no amount outstanding for more than 45days as per the provisions prescribed in The Micro Small and Medium EnterprisesDevelopment (MSMED) Act 2006.

FORMAL ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act 2013 and Listing Regulationsperformance evaluation of the Board and its Committees and all the Directors has beencarried out and the details are covered in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) Committee was constituted in May 2019 with twoindependent Directors - Prabhat Kumar as Chairman and Mr. Amit Mittal as member and oneExecutive Directors - Mr. Vikas Goel Managing Director as Members. On the recommendationsof the Committee the Board has adopted Company's policy on CSR with key thrust areasdefined as - Capacity building skill development training and employment generationPreventive health care Sanitation Environmental Sustainability and Poverty alleviationetc.

During the year under review provisions of section 135 of Companies Act 2013 is notmandatorily applicable to the company however company is voluntarily spending the amountfor the betterment of the society where it operates

DISCLOSURE OF PROCEEDINGS UNDER IBBI REGULATIONS

During the Financial Year 2019-20 no proceeding was initiated by and against thecompany.

TRANSFER OF UNCLAIMED DIVIDEND TO IEPF

Pursuant to the provisions of Section 124 of the Companies Act 2013 and InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 read with the relevant circulars and amendments thereto ('IEPF Rules') the amount ofdividend remaining unpaid or unclaimed for a period of seven years from the due date isrequired to be transferred to the Investor Education and Protection Fund (IEPF)constituted by the Central Government.

During the FY 2019-20 there is no such amount with respect to Unclaimed Dividendwhich is required to be transferred to Investor Education and Protection Fund (IEPF)

TRANSFER OF SHARES TO IEPF

Pursuant to the provisions of IEPF Rules all shares in respect of which dividend hasnot been paid or claimed for seven consecutive years shall be transferred by the Companyto the designated Demat Account of the IEPF Authority ('IEPF Account').

During FY 2019-20 there were no shares which are required to be transferred to IEPFAccount.

ACKNOWLEDGEMENT

Employee relations throughout the Company were harmonious. The Board wishes to place onrecord its appreciation to all employees in the Company for their sustained efforts andimmense contribution to the good levels of performance and growth that the Company hasachieved during the financial year under review.

Your Directors also place on record their sincere thanks and appreciation for thecontinuing support and assistance received from the financial institutions banksGovernment as well as non- government authorities customers vendors and members duringthe financial year under review.

Date: 28.08.2020 for and on behalf of
Place: Chandigarh MEGASTAR FOODS LIMITED
VIKASGOEL VIKAS GUPTA
Chairman-cum-Managing Director Whole Time Director
DIN:05122585 DIN: 05123386

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