TO THE MEMBERS
The Directors present their 48th Report together with Audited FinancialStatements of the Company for the financial year ended 31st March 2021.
1. FINANCIAL RESULTS
| ||Rs./Lakhs ||Rs./Lakhs |
| ||2020-21 ||2019-20 |
|Revenue from Operations & Other Income ||36830 ||55202 |
|Profit before Finance cost Depreciation & amortisation and Tax ||2022 ||2528 |
|Less: Finance Cost ||821 ||840 |
|Profit before Depreciation & amortisation and Tax ||1201 ||1688 |
|Less: Depreciation & amortisation Expenses ||875 ||811 |
|Profit /(Loss) before Tax ||326 ||877 |
|Tax Expenses (credit/ (net) || || |
|- Current Tax ||71 ||213 |
|- Earlier year Tax expenses ||2 ||7 |
|- MAT Credit recognition ||(63) ||(515) |
|- Deferred Tax ||72 ||333 |
|Total Tax Expenses / (Credit) ||82 ||38 |
|Profit /Loss for the period ||244 ||839 |
|Other Comprehensive income ||(9) ||1 |
|Transferred to General Reserves ||235 ||840 |
During the period under Report the Company's sales and other income are Rs. 36830/-lakhs and cash profit is Rs.1201/- lakhs as compared to last year's figures of Rs.55202/-lakhs and cash profit of Rs.1688/- lakhs respectively. After depreciation andamortisation the profit for the year is Rs.326/- lakhs as compared to the previous yearprofit of Rs. 877/- lakhs respectively.
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) Acceptedduring the year - Nil;
(b) There were 4 unpaid/unclaimed fixed deposits with the Company amounting to Rs.1.11Lakh as at the end of the year; (c) There is no default in repayment of deposits orpayment of interest thereon 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 "Annexure-1"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
The outbreak of Covid-19 pandemic has caused significant disturbance and slowdown ofeconomic activities globally. The lockdowns ordered by most of the State Government haveresulted in slowdown in economic activities and also the business operations of theCompany in terms of sales and production. The management has considered the after effectswhich have resulted from the pandemic on the generation of revenue stocks recoverabilityof trade receivables and carrying value of the assets. Based on the current indicators offuture economic conditions and company engaged in dairy business (essential services) themanagement expects to generate sufficient revenue recover the receivables and dispose ofstocks. However the situation with Covid-19 is still evolving and various preventivemeasures taken by the Government of India will help the industry/company to come out ofits after effects.
The management is closely monitoring the situation regarding any material changes infuture economic conditions. There is no change in the nature of the Company's businessduring the year under review.
Mrs. Preeti Mathur Non Executive Non Independent Director (DIN: (07951647) retires byrotation and being eligible offer herself for re-appointment as the Director of theCompany. The Board recommends her re-appointment.
The Board in their meeting held on 20th July 2020 appointed Mr. HarmeshMohan Sood Director (DIN: 07951620) as the Whole-time Director of the Company for aperiod of three years and the same was approved by the members in the Annual GeneralMeeting held on 29th August 2020. Further the Board in their meeting held on28th November 2020 subject to the approval of the members of the Companyappointed Mr. Harmesh Mohan Sood Whole-time Director (DIN: 07951620) as the ManagingDirector of the Company for a period of three years commencing from 28thNovember 2020.
But due to some health issues Mr. Sood has resigned from the post of Managing Directorw.e.f. 30th June 2021 but continuing as the Non Executive Non IndependentDirector of the Company.
The Board in their meeting held on 30th June 2021 has appointed Mr. SudhirAvasthi as the Additional Director of the Company in the category of Executive Directorw.e.f. 1st July 2021.
Further the Board appointed Mr. Sudhir Avasthi as the Managing Director of the Companyfor a period of 5 (Five) years commencing from 1st July 2021 to hold theoffice as such up to 30th June 2026. The Board recommends his appointment. Ms.Gita Bawa (DIN 00111003) Non Executive Independent Director whose first term ofappointment as the Independent Director expires on 29th May 2021 and beingeligible for re-appointment has been re-appointed for the second term of 5 (five)consecutive years to hold office as such upto 29th May 2026. The Boardrecommends her re-appointment as the Independent Director of the Company for the secondterm.
Appropriate resolutions for appointment/re-appointment of Directors seeking yourapproval are included in the Notice of AGM.
During the year under review Mr. Lalit Kumar Non Executive Non Independent Directorhas resigned from the Directorship of the Company with effect from 20thJanuary 2021.
The Board places on record its sincere appreciation for the useful services rendered byMr. Lalit Kumar during his tenure of services with the Company.
Mrs. Asha Gadi Mr. Kewal Krishan Kohli and Mr. Anil Girotra continue to hold theoffice as the Non Executive Independent Directors of the Company.
The Board of Directors of the Company are of the opinion that all the IndependentDirectors of the Company possess relevant expertise and experience required to best servethe interest 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 read withRegulation 16(b) of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015.
The Independent Directors have confirmed the compliances of relevant provisions of Rule6 of the Companies (Appointments and Qualifications of Directors) Rules 2014 as amendedfrom time to time.
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 Fifteen (15) Board meetings and One (1) separate meetingof the Independent Directors were convened and held. The details of these meetings 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 have 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
The following are the Key Managerial Personnel of the Company: a) Mr. Harmesh MohanSood Managing Director resigned as the Managing Director w.e.f. 30th June2021. b) Mr. Sudhir Avasthi Chief Executive Officer (CEO) resigned as CEO w.e.f. 30thJune 2021 and is appointed as the Managing Director of the Company w.e.f. 1stJuly 2021. c) Mr. Sanjeev Kothiala Chief Financial Officer. d) Mr. Rakesh Kumar ThakurCompany Secretary and Compliance Officer.
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 2021 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. CHANGE IN SHARE CAPITAL
There was no change in the Share Capital of the company during the financial year2020-21.
17.1 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 the office for a term of five years i.e. from the conclusion of the saidAGM until the conclusion of the 49th AGM to be held in the year2022 subject to ratification of their appointment by the members of the Company at everysubsequent AGM of the Company.
In accordance with the Companies Amendment Act 2017 enforced on 7th May2018 by the Ministry of Corporate Affairs the appointment of Statutory Auditors is notrequired to be ratified at every Annual General Meeting. In view of the same the matterfor ratification of appointment of Statutory Auditors of the Company has not beenincluded in the notice of the ensuing AGM.
The Statutory Auditors have confirmed that they are not disqualified from beingcontinued as Statutory Auditors of the Company.
17.2 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.
17.3 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 Auditor of the Company to carry out the Secretarial Audit ofsecretarial and related record of the Company for the financial year ended on March 312021.
A Secretarial Audit Report submitted by the Secretarial Auditor in Form No. MR-3 formspart of this report and is annexed herewith as "Annexure-2".
As per the remarks given by the Secretarial Auditor relating to the non compliance ofRegulation 33 of SEBI (LODR) Regulations 2015 the Board's explanation and comments onthe above are as follows: Due to Covid 19 pandemic the financial results for thequarter ended September 2020 could not be submitted within the period prescribed underRegulation 33 of SEBI (LODR) Regulations 2015. However the results of the said quarterwere submitted on 19th November 2020. The Company also deposited the fine ofRs. 11800/- as imposed by the BSE. A Secretarial Compliance Report for the financial yearended 31st March 2021 on compliances of all applicable SEBI Regulations and circulars/guidelines issued thereunder was obtained from Ms. Kamlesh Gupta Company SecretarySecretarial Auditor and submitted to the stock exchange.
17.4 INTERNAL AUDITORS
M/s. Pardeep Sharma & Associates Chartered Accountants (Registration No.029181N) Delhi have been appointed as internal auditors of the Company for the financialyear 2020-21 to perform the functions of internal audit of the Company.
17.5 COST AUDITORS
On the recommendations of Audit Committee M/s HMVN & Associates Cost Accountants(Firm Registration No.000290) have been appointed as the Cost Auditors to audit the costaccounts of the Company relating to Milk Powder for the financial years 2021-22.
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.
18. 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
19. 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.
20. 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 Committees. The Directors expressed theirsatisfaction 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.
21. 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.
22. 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.
23. 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.
24. 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.
25. 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 2021-22 has been paid.
26. 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".
27. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of section 92 of the Companies Act 2013 read with theCompanies (Management and Administration) Rules 2014 the extract of Annual Return of theCompany in Form MGT 9 is available on the website of the Company at www.milkfoodltd.com.
28. 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 pertaining tothe top ten employees in terms of remuneration drawn and their other particulars alsoform part of this report. However the report and the accounts are being sent to themembers excluding the aforesaid annexure. In terms of Section 136 of the Act the saidannexure is open for inspection at the Registered Office of the Company. Any shareholderinterested in obtaining a copy of the same may write to the Company Secretary. Disclosurespertaining to remuneration and other details as required u/s 197(12) of the Act read withRule 5(1) of the Companies (Appointment and Remuneration of the Managerial Personnel)Rules 2014 are provided as per "Annexure-5" .
29. 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 ofinterest with the Company at large. A disclosure in form AOC-2 is annexed with this Reportas "Annexure-6".
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. Omnibus approval was obtained on a yearly basis for transactions which areof repetitive nature. The transactions entered into pursuant to the omnibus approval sogranted and a statement giving details of all Related Party Transactions are placed beforethe Audit Committee for its review on a quarterly basis.
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
30. 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 2021 and Notice of the 48thAGM 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 2021 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 2021 is also available on our website www.milkfoodltd.com.
31. 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.
32. 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
33. 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.
34. 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.
35. 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.
36. 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.
37. 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.
38. SCHEME OF AMALGAMATION
The Board of Directors in its meeting held on 5th October 2020 hasapproved the proposed scheme of Amalgamation between Triputi Infrastructure PrivateLimited (Transferor Company) having its Registered office at Sood's Niwas Ranbir MargPatiala -147001 with the Milkfood Limited (Transferee Company).
For the purpose of amalgamation of Transferor Company into Transferee Company based onthe valuation report of Mr. Siddharth Gupta Chartered Accountant and Registered Valuerdated September 29 2020 being Registered Valuer appointed for the purpose of the schemethe following share entitlement ratio is approved: "69 equity shares of facevalue of Rs. 10 each to be issued against 1000 equity shares of face value of Rs. 10 eachof Transferor Company." The Bombay Stock Exchange (BSE) Limited vide E-LetterNo. DCS/AMAL/SV/R37/1964/2021-22 dated 28th May 2021 has approved the saidScheme and now the Company is in the process of filing the application with HonourableNCLT at Chandigarh.
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 : 30th July 2021 ||Director ||Director |
| ||DIN:07951620 ||DIN:00110734 |