TO THE MEMBERS
The Directors present their 46th Report together with Audited FinancialStatements of the Company for the financial year ended 31st March 2019.
1. FINANCIAL RESULTS
| ||(Rs./Lacs) ||(Rs./Lacs) |
| ||2018-19 ||2017-18 |
|Revenue from Operations & Other Income ||53090 ||49113 |
|Profit before Finance cost Depreciation & amortisation and Tax ||2808 ||2652 |
|Less: Finance Cost ||788 ||1047 |
|Profit before Depreciation & amortisation and Tax ||2020 ||1605 |
|Less: Depreciation & amortisation Expenses ||683 ||635 |
|Profit /(Loss) before Tax ||1337 ||970 |
|Tax Expenses (credit/ (net) || || |
|- Current Tax ||295 ||189 |
|- Earlier year Tax expenses ||17 ||- |
|- MAT Credit recognition ||(322) ||- |
|- Deferred Tax ||323 ||(35) |
|Total Tax Expenses / (Credit) ||313 ||154 |
|Profit /Loss for the period ||1024 ||816 |
|Other Comprehensive income ||(15) ||(25) |
|Transfered to General Reserves ||1009 ||791 |
During the period under Report the Company's sales and other income are Rs.53090 lacsand cash profit is Rs.2020 lacs as compared to last year's figures of Rs.49113 lacs andcash profit of Rs.1605 lacs respectively. After depreciation and amortisation the profitfor the year is Rs.1337 lacs as compared to the previous year profit of Rs. 970 lacsrespectively.
The Board of Directors of your Company proposes to retain the profits for use in thebusiness expansion programs. Accordingly no dividend is recommended by the Directors.
4. FIXED DEPOSITS
The details relating to Deposits covered under Chapter V of the Act:
(a) Accepted during the year - Nil;
(b) There were 7 unpaid/unclaimed fixed deposits with the Company amounting to Rs. 1.65Lacs as at the end of the year;
(c) There has not been any default in repayment of deposits or payment of interestthereon during the year.
5. SUBSIDIARY COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS
During the year under review M/s. MFL Trading Private Limited continues to be thewholly owned subsidiary company of the Company.
In compliance with provisions of Section 129(3) of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 and the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has prepared consolidated financialstatements as per the Accounting Standards on Consolidated Financial Statements issued bythe Institute of Chartered Accountants of India. The audited consolidated financialstatements along with the Auditors' Report thereon forms part of this Annual Report.
During the year the Board of Directors (the Board) has reviewed the affairs of theSubsidiary. Further a statement containing the salient features of the financialstatements of subsidiary in the prescribed format AOC-1 is appended as "Annexure1" to the Board's Report.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited financial statements of its subsidiary are available on the Company'swebsite at www.milkfoodltd.com.
The Company has no material subsidiary company but in order to comply with the ListingRegulations the Company has adopted a Policy on Material Subsidiary Companies and hasuploaded on the Company's website at www.milkfoodltd.com.
6. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the period under review the Company has not made any loan guarantee orinvestment in terms of provisions of Section 186 of the Companies Act 2013.
7. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY
No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year to which these financial statementsrelate and the date of this Report.
There is no change in the nature of the Company's business during the year underreview.
Mrs. Preeti Mathur Director (DIN: 07951647) retires by rotation and being eligibleoffer herself for reappointment as the Director of the Company. The Board recommends herreappointment.
Mr. Harmesh Mohan Sood and Mrs. Preeti Mathur were appointed as the AdditionalDirectors of the Company in the Board meeting held on 29th September 2017 inthe category of Non Executive Non Independent Directors. Their appointment was regularizedby the members in the Annual General Meeting held on 26th September 2018.
Pursuant to the provisions of the Companies Act 2013 ("the Act") and Clause49 of the erstwhile Listing Agreement Mrs. Asha Gadi (DIN: 00110734) was appointed as anIndependent Director by the shareholders in the 41st Annual General Meeting (AGM) of theCompany held on 27th September 2014 for a term of 5 (Five) years and her term of officeexpires at this Forty Sixth Annual General Meeting. She is eligible for reappointment asthe Independent Director for another term of five consecutive years.
Pursuant to the provisions of the Act based on the recommendations of the Nominationand Remuneration Committee the Board recommends the members the reappointment of Mrs.Asha Gadi as the Independent Director at the ensuing Annual General Meeting for a secondterm of 5 (five) years to hold office upto the date of Annual General Meeting of theCompany to be held in the calendar year 2024." Profile and other information of theaforesaid Directors as required under Regulation 36 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and Secretarial Standard - 2 are annexed in theCorporate Governance Report.
Mrs. Gita Bawa continues to hold the office as the Independent Director of the Company.
9. DECLARATION OF INDEPENDENCE
All the Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(b) of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.
10. FORMAL LETTER OF APPOINTMENT TO INDEPENDENT DIRECTORS
The Company has issued the formal letter of appointment to all the independentdirectors in the manner as provided under the Companies Act 2013 and the terms andconditions of their appointment have been disclosed on the website of the Company at www.milkfoodltd.com.
11. MEETINGS OF THE BOARD OF DIRECTORS
During the year under review Nine Board meetings and One separatemeeting of the Independent Directors were convened and held. The details of which aregiven in the Corporate Governance Report. The intervening gap between the meetings waswithin the period prescribed under the Companies Act 2013.
12. FAMILIARIZATION PROGRAMMES FOR INDEPENDENT DIRECTORS
The Company has a policy of conducting familiarization programmes for IndependentDirectors in order to familiarize them with the Company their roles rightsresponsibilities in the Company and nature of the industry in which the Company operatesetc. The details of such Policy has been given on the website of the Company at www.milkfoodltd.com.
As per the provisions of Section 177 178 and 135 of the Companies Act 2013 and theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasconstituted an Audit Committee Nomination & Remuneration Committee StakeholdersRelationship Committee and Corporate Social Responsibility Committee. The Composition ofthese Committees and details of their meetings are given in the Corporate GovernanceReport.
14. KEY MANAGERIAL PERSONNEL
During the year under review Mr. Sudhir Avasthi Chief Executive Officer Mr. SanjeevKothiala Chief Financial Officer and Mr. Rakesh Kumar Thakur Company Secretary andCompliance Officer continue to be the Key Managerial Personnel of the Company inaccordance with the provisions of Section 2(51) and Section 203 of the Act read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
15. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) read with Section 134 (5) of the Act your Directorsconfirm that:
(a) in the preparation of Annual Accounts for the year ended March 31 2019 theapplicable Accounting Standards have been followed along with proper explanation relatingto material departures;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the Directors have prepared the annual accounts of the Company on a going concernbasis;
(e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
16.1 STATUTORY AUDITORS
The Members at the 44th Annual General Meeting (AGM) of the Company held on26th September 2017 had appointed M/s V. P. Jain & Associates CharteredAccountants (ICAI Firm Registration Number 015260N) as the statutory Auditors of theCompany to hold office for a term of five years i.e. from the conclusion of the said AGMuntil the conclusion of the 49th AGM to be held in the year 2022subject to ratification of their appointment by the members of the Company at everysubsequent AGM of the Company.
The Ministry of Corporate Affairs vide its Notification dated 7th May 2018has dispensed with the requirement of ratification of Auditor's appointment by theshareholders every year. Hence the resolution relating to ratification of Auditor'sappointment is not included in the Notice of the ensuing Annual General Meeting.
16.2 AUDITORS' REPORT
The Auditors' Report does not contain any qualifications/reservation or adverseremarks. Notes to accounts are self explanatory and form an integral part of FinancialStatements.
16.3 SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act 2013 read withcorresponding Rules framed thereunder Ms. Kamlesh Gupta Company Secretary has beenappointed as the Secretarial Auditors of the Company to carry out the Secretarial Audit ofsecretarial and related records of the Company for the financial year ended on March 312019.
A Secretarial Audit Report submitted by the Secretarial Auditors in Form No. MR-3 formspart of this report and is annexed herewith as "Annexure-2".
A Secretarial Compliance Report for the financial year ended 31st March 2019 oncompliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunderwas obtained from Ms. Kamlesh Gupta Company Secretary Secretarial Auditors andsubmitted to the stock exchange.
16.4 INTERNAL AUDITORS
M/s Lalit Kumar & Co. Chartered Accountants continue to be the Internal Auditorsof the Company to perform the functions of internal audit.
16.5 COST AUDITORS
On the recommendations of Audit Committee M/s R. J. Goel & Co. Cost Accountants(Firm Registration No.000026) have been appointed as the Cost Auditors to audit the costaccounts of the Company relating to Milk Powder for the financial years 2019-20.
As required under the Companies Act 2013 resolution seeking members' approval for theratification of remuneration payable to the Cost Auditors forms part of the Noticeconvening the ensuing Annual General Meeting.
17. NOMINATION AND REMUNERATION POLICY
The Board on the recommendations of the Nomination & Remuneration Committee hasframed a Policy for the selection and appointment of directors key managerial personneland also for determining the criteria of their remuneration. The Remuneration Policy hasbeen stated in the Corporate Governance Report and is uploaded on the Company's website athttp://www.milkfoodltd.com/img/downloads/Milkfood_Nomination_Remuneration_Policy.pdf
18. RISK MANAGEMENT POLICY
Pursuant to Section 134(3)(n) of the Companies Act 2013 the Company has formulated aRisk Management Policy. The Company is aware of the risks associated with the business ofthe Company. It regularly analyses and takes corrective actions for managing / mitigatingthe risks.
At present the Company has not identified any element of risks which may threaten theexistence of the Company.
19. PERFORMANCE EVALUATION
In terms of the requirements of the Act and Listing Regulations a separate exercisewas carried out to evaluate the performance of all the individual Directors on the Boardwho were evaluated on parameters such as level of engagement contribution andindependence of judgment thereby safeguarding the interest of the Company. The performanceevaluation of the Independent Directors was carried out by the entire Board (excluding theDirectors being evaluated). The performance evaluation of the Non Independent Directorswas carried out by the Independent Directors. The Board also carried out annualperformance evaluation of the working of its Audit Committee Nomination and RemunerationCommittee as well as the Stakeholders Relationship Committee. The Directors expressedtheir satisfaction with the evaluation process.
Some of the key criteria for the performance evaluation are as follows
Performance evaluation of Directors:
1. Attendance at the Board/Committee meetings.
2. Contribution at the Board/Committee meetings.
3. Guidance/support to management outside Board/Committee meetings.
Performance evaluation of Board and Committees:
1. Degree of fulfillment of key responsibilities.
2. Board Structure and Composition.
3. Quality of relationship between Board and Management.
4. Efficacy of communication with external shareholders.
5. Effectiveness of Board process information and functioning.
20. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has in place an Anti Sexual Harassment Policy in line in accordance withthe requirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. No complaint has been received duringthe year under review.
21. CORPORATE SOCIAL RESPONSIBILITY
The brief outline of the corporate social responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in "Annexure-3" of this report in the format prescribed in theCompanies (Corporate Social Responsibility Policy) Rules 2014. For other detailsregarding the CSR Committee please refer to the Corporate Governance Report which is apart of this report. The policy is available on http://www.milkfoodltd.com/img/downloads/Milkfood_Corporate_Social_Responsibility_Policy.pdf.
22. CORPORATE GOVERNANCE REPORT
A detailed Report on Corporate Governance forms an integral part of Annual Report andis set out as a separate section therein. A certificate from the Practicing CompanySecretary regarding the compliances with the conditions of corporate governance asstipulated in the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 is annexed to the Directors' Report.
23. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of provisions of Regulation 34 of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 Management Discussionand Analysis Report have been given separately and forms part of this Report.
24. INFORMATION UNDER THE SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONSAND DISCLOSURE REQUIREMENTS) REGULATIONS 2015
The shares of your Company are listed at the BSE Ltd. vide Stock Code: 507621. Thelisting fee for the financial year 2019-20 has been paid.
25. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134(3)(m) of the Companies Act 2013read with Rule 8 of the Companies (Accounts) Rules 2014 are annexed herewith as "Annexure-4".
26. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of section 92(3) of the Companies Act 2013 and rule 12(1)of the Companies (Management and Administration) Rules 2014 an extract of annual returnin form MGT 9 is enclosed as "Annexure 5" to this annual reportand also available on the website of the Company at www.milkfoodltd.com.
27. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) read with Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company will be provided upon request. In terms of Section 136 of theAct the Report is being sent to all members and others entitled thereto excluding theaforesaid information and the said particulars are available for inspection by the membersat the Registered Office of the Company during the business hours on all the working daysof the Company. The members interested in obtaining such particulars may write to theCompany Secretary.
Disclosures pertaining to remuneration and other details as required u/s 197(12) of theAct read with Rule 5(1) of the Companies (Appointment and Remuneration of the ManagerialPersonnel) Rules 2014 are provided as per "Annexure- 6".
28. RELATED PARTY TRANSACTIONS
All related party transactions which were entered into during the financial year wereon arm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the Company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict withthe interest of the Company at large. A disclosure in form AOC-2 is annexed with thisReport as "Annexure-7".
All related party transactions have been disclosed in Note 33 to the Accounts.
All Related Party Transactions are placed before the Audit Committee and also the Boardfor approval.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website at http://www.milkfoodltd.com/img/downloads/Milkfood_Policy_on_related_party_transactions.pdf
29. GREEN INITIATIVES
In commitment to keep in line with the Green Initiative and going beyond it to createnew green initiatives electronic copy of the Annual Report 2019 and Notice of the 46thAGM are being sent to all members whose email addresses are registered with the Company/RTA/ Depository Participant(s). For members who have not registered their emailaddresses physical copies of the Annual Report 2019 and the Notice of the AGM are beingsent by the permitted mode. Members requiring physical copies can send a request to theCompany Secretary.
The Annual Report 2019 is also available on our website www.milkfoodltd.com.
30. PREVENTION OF INSIDER TRADING
Pursuant to SEBI (Prohibition of Insider Trading) Regulations 2015 the Company hasadopted a Code of Conduct for the prevention of insider trading with a view to regulatethe trading in the securities of Company by the Directors and Designated Employees of theCompany on the basis of unpublished price sensitive information available to them byvirtue of their position in the Company.
The Code under SEBI (Prohibition of Insider Trading) Regulations 2015 is available onthe website of the Company at www.milkfoodltd.com.
31. VIGIL MECHANISM
In pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013Vigil Mechanism for directors and employees to report their genuine concerns such asunethical behavior actual or suspected fraud violation of the Company's Code of Conducthas been adopted. The Vigil Mechanism Policy has been uploaded on the website of theCompany at http://www.milkfoodltd.com/img/downloads/Milkfood_WHISTLEBLOWER_POLICY.pdf
32. INTERNAL CONTROL SYSTEM AND ITS ADEQUACY
The Company has an adequate system of internal control to safeguard and protect fromlosses unauthorized use or disposition of its assets. All the transactions are properlyauthorized recorded and reported to the Management. The Company is following all theapplicable Accounting Standards for properly maintaining the books of accounts andreporting the financial statements. The Internal Auditor of the Company checks andverifies the internal control and monitors them in accordance with the policy adopted bythe Company.
33. COMPLIANCE WITH SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS ANDDISCLOSURE REQUIREMENTS) REGULATIONS 2015
The Company is fully compliant with the applicable mandatory requirements under theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.
34. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS
During the financial year your Company has complied with applicable SecretarialStandards issued by the Institute of Company Secretaries of India.
35. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant or material orders which were passed by the Regulators orCourts or Tribunals which impact the going concern status and the Company's Operations infuture.
36. REPORTING OF FRAUD BY AUDITORS
During the year under review none of the Auditors have reported to the Audit Committeeor to the Board under Section 143(12) of the Companies Act 2013 any instances of fraudcommitted against the Company by its officers or employees.
Your Company and its Board of Directors would like to express their sincereappreciation for the assistance support and cooperation received from Governmentregulatory authorities stakeholders customers vendors investors financialinstitutions bankers and members during the year. We place on record our appreciation forthe contribution made by our employees at all levels. Our consistent growth was madepossible by their hard work solidarity cooperation and support.
For and on behalf of the Board
| ||Sd/- ||Sd/- |
|Place : New Delhi ||Harmesh Mohan Sood ||Asha Gadi |
|Date : 24th May 2019 ||Director ||Director |
| ||DIN:07951620 ||DIN:00110734 |