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Milton Industries Ltd.

BSE: 535025 Sector: Others
NSE: MILTON ISIN Code: INE376Y01016
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Milton Industries Ltd. (MILTON) - Director Report

Company director report

To

The Members

Milton Industries Ltd.

Ahmedabad.

Your Directors have pleasure in presenting their 32nd Annual Report together withAudited Statement of Accounts for the year ended 31st March 2018.

FINANCIAL RESULTS (Rs. in Lacs)
PARTICULARS 2017-18 2016-17
Net Sales 3787.27 4285.12
Profit before Interest Depreciation & Tax 491.16 486.24
Interest and Financial Charges 231.00 229.05
Depreciation 126.69 126.92
Profit Before Tax 133.47 130.26
Less: Provision for Taxation :
Current Tax & FBT 30.00 27.00
Deferred Tax (27.50) 8.88
Short/Excess Provisions of Earlier Years 1.06 -
Mat Credit - -
Net Profit after Tax carried to Balance-sheet 129.92 94.38

FUTURE OUTLOOK:

Milton Industries Ltd being the pioneer in the Laminates industry started operations in1985 having not only created a niche within the market but also diversified into variousproducts that are of the highest quality and ever evolving mix of technology and design.

Manufacturers and exporter of premium quality high-pressure laminates industriallaminates laminated board flooring laminates artificial leather cloth GFRE sheets andother allied products we are striving to grow our multiple production units everyday withthe best of technology there is available.

Milton Industries takes pride in being associated with the Indian Railways and iscommitted to the idea of bringing state of the art technology and design to Indian railcoaches that is being used across the globe. Being one of their most trusted and reliablesuppliers of PVC cloth and laminates board for many years our further collaboration withthe Indian Railways will take Milton Industries to severe heights.

In the year 2018-2019 Milton Industries Ltd is launching 3 new products speciallycatered for the Indian Railways. The registration and approval of the products hassuccessfully taken place and we had already started production and supplying theseproducts.

One of the revolutionary products that we are invested in manufacturing is a Pillarassembly with honeycomb partition in SCN coaches for the First time in Indian Railways.The company is pleased to inform that company have 150 coaches order in hand for thepillar assemble honeycomb partitions DGFRP GFRE and other product. The new developmentby the company in Honeycomb partition frame is that they stand as per EN standard and areset to make a real change in the efficiency and safety of coaches taking Indian Railwaysto new heights and reduce the weight of the coach .The Company is approved and supplier ofHoneycomb Partition for Two Tier & Three Tier AC coaches and for the above 150 coachesthe material's cost will be about Rs. 25 Cr approximately.

DGFRP is a product supplied by our company with different thickness & for differentapplication for the 1st time in Indian Railways keeping in mind the safety of thepassenger as per EN standards and company have already supplied this product for more than110 coaches and have orders in hand of DGFRP and GFRE of about Rs. 3 cr.

NAFTC is Natural & Artificial Fibre Thermoset Composite which has been successfullydeveloped this product is also as per EN standards where there is no need for painting onthe roofs of the coaches the life of the product is too long to avoid often replacementof NFTC. The company have more than 25000 sheets order in hand directly or indirectlywhich cost around Rs. 7 cr.

The company has also developed still superior product which have more life may beequal to the life of the coach named as GFRE which is also used to cover the roof of thecoaches and there is no need to replace the same even throughout the life of the coach. Itcan be easily washed with water its self colored; it has very good mechanical &electrical properties. The company has order of more than 10000 sheets which isapproximately above Rs. 5 Cr. in hand. During the current financial year and moreorders are expected to come.

The company has specially designed Lavatory doors for Indian Railways and alreadysupplied about more than 500 and have order of more than 1000 doors in hand which costabout Rs. 2 cr.

We are also planning to go for Apply & Supply FRP panels for Indian Railways withcollaboration which is under negotiation which will increase the sales of the company maybe the sales will double of 17-18.

The Company is also under negotiation for FRP moulder Toilets for Indian Railways withthe rise in demand Indian Railways is committed to changing the seat and birth in allclasses eventually changing the face and experience of rail travel. Milton Industries isdelighted to be in business with an organization that's working for the betterment of ourcountry and its people your directors are pleased to inform that the company is planningfor put up a separate line for Seat & Birth with the aim to reach new heights withthis collaboration and to meet the aggressive demand this year.

In Unit – 1 we are manufacturing Decorative/Industrial laminates sheets. We are inprocess for the further development of the domestic market & we are hoping to increasethe sales share in the domestic market.

In unit – 2 we are doing only Government & Semi Government supplies thoughthere are very unfair competition still our company trying to overcome all thedifficulties & trying to makeup sales.

DIVIDEND:

The board of directors has decided to plough back the profit to meet with capitalexpenditure and to meet with working capital requirement; therefore your Directors do notrecommend any dividend for the year under review.

RESERVES:

The company has during the year under review has transferred an amount equivalent tothe requirement for issue of bonus shares.

PERFORMANCE:

Your Directors inform you that during the year under review the Company has net salesof Rs. 3787.27 Lacs as against Rs. 4285.12 Lacs in the previous year. During the yearunder review the Company has earned net profit after tax amounting to Rs. 129.92 Lacs asagainst the net profit after tax of Rs. 94.38 Lacs in the previous year. Barringunforeseen circumstance your Directors are hopeful to achieve better financialperformance in the coming years.

DEPOSITS:

The company has not accepted deposits from the public during the financial year underreview within the meaning of Section 73 of the Act of the Companies Act 2013 read withCompanies (Acceptance of Deposits) Rules 2014

ALTERATION OF MEMORANDUM OF ASSOCIATION:

The Company has after obtaining necessary approval of the Members at the Annual GeneralMeeting held on 14th July 2017 and necessary government approval altered theobject clause in the Memorandum of Association.

ADOPTION OF NEW SET OF ARTICLES OF ASSOCIATION:

The Company has after obtaining necessary approval of the Members at the Annual GeneralMeeting held on 14th July 2017 and necessary government approval adopted newset of Articles of Association.

INCREASE IN AUTHORIZED SHARE CAPITAL:

The company during the year under review has increased its Authorized capital from Rs.55000000/- divided into 5500000 equity shares of Rs. 10 each to Rs. 170000000/-divided into 17000000 equity shares of Rs. 10 each.

ALLOTMENT OF SHARES UNDER BONUS ISSUE:

During the year under review the company has allotted 6250000 equity shares of Rs.10/- each during the year under review as Bonus share in the proportion of 5 (Five) fullypaid up Equity Share of Rs. 10/- each against every 4 (four) Equity Shares of Rs. 10/-each held by the existing shareholders of the company by passing special resolution in theAnnual general meeting of the members of the company held on the 14th of July2017

SUCCESSFUL INITIAL PUBLIC OFFERING:

During the year under review after obtaining necessary approvals and after complyingprovisions and guidelines under the Companies Act 2013 SEBI (ICDR) & SEBI (LODR)Regulations The Equity Shares of the Company are listed on SME Emerge Platform of NSELimited w.e.f. 14th July 2017. The company after finalizing the basis ofallotment in consultation with NSE-SME have allotted 4200000 Equity Shares of Rs. 10/-each at an issue price of Rs. 34/- per share including premium of Rs. 24/- per share tothe public through Initial Public Offer (IPO. The post Initial Public Offering Paid upshare capital of the company is Rs. 154500000/- divided into 15450000 equity sharesof Rs. 10 each. The IPO was a huge success and the resulting shares have been listed onthe NSE emerge platform of NSE Mumbai.

PARTICULARS OF EMPLOYEES IN TERMS OF 197 OF THE COMPANIES ACT 2013:

The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company forms part of this report as ‘Annexure A'. However aspermitted in terms of Section 136 of the Act this Annual Report is being sent to all themembers and others entitled thereto excluding the said annexure. Members who areinterested in obtaining these particulars may write to the Company Secretary at theRegistered Office of the Company. The aforesaid annexure is also available for inspectionby members at the Registered Office of the Company 21 days before the 32ndAnnual General Meeting and up to the date of Annual General Meeting during business hourson working days.

FORMAL EVALUATION BY BOARD OF ITS OWN PERFORMANCE:

Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirement) Regulations 2015 the Board shall carry out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of Audit and Nomination & Remuneration Committees based onthe criteria and framework adopted by the Board.

INDUSTRIAL RELATION:

Employee's relations have remained cordial throughout the year. Your Directors place onrecord their appreciation for significant contribution made by the employees through theirCompetence hard work sustained efforts Co-operation and support.

INTERNAL FINANCIAL CONTROL SYSTEM:

The Company has placed an adequate Internal Financial Controls with reference toFinancial Statements. The Board has inter alia reviewed the adequacy and effectiveness ofthe Company's internal financial controls relating to its financial statements.

During the year no reportable material weakness in the design or operation wereobserved.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with theCompanies (Disclosures of Particulars in the Report of Board of Directors) Rules 2014relating Conservation of Energy Technology Absorption and Foreign Exchange earnings andoutgo in is given in "Annexure-B" forming part of this report.

SUBSIDIARIES ASSOCIATES AND JOINT VENTURES:

The company does not have any subsidiary Joint venture and Associate.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

During the year under review the company has in the ordinary course of its businessand complying with the provisions of section 186 of the companies Act 2013 entered intotransaction relating to giving of loan or Guarantee. The members are requested to referthe notes to the financial statement which are forms the part of the Annual Report fordetailed information

RELATED PARTY TRANSACTIONS:

There was no Contract or Arrangement made with Related Parties pursuant to section 188of the companies Act 2013.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There are no significant and material orders passed by the Regulators/Courts/Tribunalwhich would impact the going concern status of the Company and its operations in future.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURRED BETWEEN THE END OF FINANCIAL YEAR (MARCH 31 2018) AND THE DATE OF THEREPORT:

There is no material changes and commitments affecting the financial position of thecompany have occurred between the end of the financial year of the company to which thefinancial statements relate and the date of this report

DECLARATIONS BY THE INDEPENDENT DIRECTORS:

The Company has received declaration from all the Independent Directors of the Companyconfirming that they meet the criteria of the Independence as provided in Section 149(6)of the Companies Act 2013.

COMMITTEES OF THE BOARD:

The company listed its equity shares on NSE SME emerge portal during the year.Consequent upon listing of its Equity Shares the Company has formed various Committeesas required under the provisions of Companies Act 2013 read with SEBI (Listing Obligationand Disclosure Requirement) Regulations 2015. The details of the committee are providedherein below:

Presently the board has Three (3) committees i.e. Audit Committee Nomination andRemuneration Committees Stakeholders Relationship Committee constitution of which aregiven below.

A. Audit Committee * :

Name of the Director Status in Committee Designation
Mr. Ajaykumar Brijmohan Tola Chairman Non Executive-independent director
Mr. Ankur Ashokkumar Agarwal Member Non Executive-independent director
Mr. Vijay Pal Jain Member Managing Director
Mr. Keyur Parekh Secretary Company Secretary

The term of reference of Audit Committee is as below:

Recommendation for appointment remuneration and terms of appointment ofauditors of the company.

Review and monitor the auditor's independence and performance andeffectiveness of audit process.

Examination of the financial statement and auditor's report thereon.

Approval or any subsequent modification of transactions of the company withrelated parties.

Scrutiny of inter-corporate loans and investments.

Valuation of undertakings or assets of the company wherever it isnecessary.

Evaluation of internal financial controls and risk management systems.

Monitoring the end use of funds raised through public offers and relatedmatters.

The Audit Committee may call for the comments of the auditors about internalcontrol system the scope of audit including the observations of the auditors and reviewof the financial statement before their submission to the Board and may also discuss anyrelated issue with the internal and statutory auditors and the management of the company.

The Audit Committee shall have authority to investigate into any matter inrelation to the items specified above in (i) to (iv) or referred to it by the Board andfor this purpose shall gave power to obtain professional advice from external sources andhave full access to information contained in the records of the company.

The auditors of a company and the key managerial personnel shall have aright to be heard in the meetings of the Audit Committee when it considers the auditor'sreport but shall not have the right to vote.

The Board's report under sub-section (3) of section 134 shall disclose thecomposition of Audit Committee and where the Board had not accepted any recommendation ofthe Audit Committee the same shall be disclosed in such report along with the reasonsthereof.

The victims/persons who use vigil mechanism can direct access to thechairperson of the Audit Committee in appropriate or exceptional cases.

B. Nomination and Remuneration Committees * :

Name of the Director Status in Committee Designation
Mr. Maheshbhai Samatbhai Patel Chairman Non Executive-Independent Director
Mr. Ankur Ashokkumar Agarwal Member Non Executive-Independent Director
Mr. Ajaykumar Brijmohan Tola Member Non Executive-Independent Director
Mr. Keyur Parekh Secretary Company Secretary

The term of reference of Nomination & Remuneration Committee is as below:

To identify persons who are qualified to become Directors and who may beappointed in senior management in accordance with the criteria laid down recommend to theBoard their appointment and removal and shall carry out evaluation of every Director'sperformance.

To formulate the criteria for determining qualifications positiveattributes and independence of a Director and recommend to the Board a policy relating tothe remuneration for the Directors Key Managerial Personnel and other employees.

The Nomination and Remuneration Committee shall while formulating thepolicy ensure that:

1) the level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully;

2) Relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and

3) Remuneration to Directors Key Managerial Personnel and senior management involves abalance between fixed and incentive pay reflecting short and long-term performanceobjectives appropriate to the working of the company and its goals:

Regularly review the Human Resource function of the Company.

Discharge such other function(s) or exercise such power(s) as may bedelegated to the Committee by the Board from time to time.

Make reports to the Board as appropriate.

Review and reassess the adequacy of this charter periodically and recommendany proposed changes to the Board for approval from time to time.

Any other work and policy related and incidental to the objectives of thecommittee as per provisions of the Act and rules made there under.

C. Stakeholders Relationship Committee * :

Name of the Director Status in Committee Nature of Directorship
Mr. Ishwar Singh Chairman Non Executive-Independent Director
Mr. Rakesh Mehtani Member Non Executive-Independent Director
Mr. Vijay Pal jain Member Managing Director
Mr. Keyur Parekh Secretary Company Secretary

* The committees were formed by means of a resolution passed at a meeting of theBoard of directors dated 09/09/2017.

VIGIL MACHANISM/ WHISTLE BLOWER:

During the year under review the Company has established Vigil Mechanism. Accordinglythe Company has adopted a Vigil Mechanism Policy to provide a formal mechanism to theDirectors and employees to report their concerns about unethical behavior actual orsuspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policyprovides for adequate safeguards against victimization of employees who avail of themechanism. The policy for vigil mechanism is available on the website of the company.

DISCLOSURE UNDER SEXUAL HARASSEMENT OF WOMAN AT WORKPLACE (PREVENTION PROHIBITION& REDRESAL) ACT 2013:

There was no case filled during the year under the sexual harassment of women atworkplace (Prevention Prohibition & Redresser) Act 2013. Further Company ensuresthat there is a healthy and safe atmosphere for every women employee at the workplace andmade the necessary policies for safe and secure environment for women employee.

CORPORATE SOCIAL RESPONSIBILITY:

The provision of Section 135 of Companies Act 2013 is not applicable to the company ascompany is not matching with the criteria specified in the said section.

RISK MANAGEMENT POLICY:

The Company has a robust Risk Management policy. The Company through a SteeringCommittee oversees the Risk Management process including risk identification impactassessment effective implementation of the mitigation plans and risk reporting. Atpresent the company has not identified any element of risk which may threaten theexistence of the company.

NUMBER OF BOARD MEETINGS:

During the financial year 17 (Seventeen) Board Meetings were held respectivelyon 20.06.2017 13.07.2017 14.07.2017 08.08.2017 11.08.2017 16.08.2017 29.08.201708.09.2017 9.9.2017 11.9.2017 18.9.2017 22.9.2017 25.9.201712.10.2017 16.10.201713.2.2018 and 28.03.2018.

EXTRACT OF ANNUAL RETURN:

An extract of Annual Return in Form MGT-9 as on March 31 2018 is attached as "Annexure-C"to this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the year under review the constitution of the Board of director changed.

Following Directors were appointed in the company as an Additional Independent Directoron 8th September 2017. Mr. Ajay Tola Mr. Mahesh Patel Mr. Rakesh MehtaniMr. Ishwar Singh Mr. Ajay Lodha and Mr. Ankur Agarwal. Mr. Saket Jain whole timedirector of the company also appointed as an Chief Financial Officer of the company. Inaccordance with Section 152(6) of the Companies Act 2013 read with the Articles ofAssociation of the Company Mr. Vikas Jain (DIN: 00301277) Mr. Ajay Jain (DIN: 01287154)retire by rotation and is being eligible offer himself for re-appointment at the ensuingAnnual General Meeting.

DIRECTOR RESPONSIBILITY STATEMENT:

In terms of provisions of section 134 (5) of the companies Act 2013 your Directorsconfirm: -

a) That in the preparation of the annual accounts for the year ended March 31 2018 theapplicable Accounting Standards had been followed along with proper explanation relatingto material departures.

b) That the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the Profit of the Company for the year ended March 31 2018.

c) That the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.

d) That the directors had prepared the annual accounts on a "going concern"basis.

e) That the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

MANAGEMENT DISCUSSION & ANALYSIS:

In compliance with Regulation 34(3) read with Schedule V(B) of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (‘Listing Regulations') Management Discussion and Analysis forms an integralpart of the Directors' Report is given in ‘Annexure-D'

SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s Jigar Trivedi & Co. Company Secretaries to undertake theSecretarial Audit functions of the Company. The Secretarial Audit Report is Annexed tothis Report as ‘Annexure- E'. There is no qualification reservations ordisclaimers in report.

AUDITORS:

M/s. Sapan Vasa & Co Chartered Accountants (Firm Reg. No. 120693W) proposedto be appointed as the statutory auditors of your Company hold office until theconclusion of the upcoming Annual General Meeting to be held in the year 2019. Acertificate from M/s. Sapan Vasa & Co has been received to the effect thattheir appointment if made would be within the prescribed limits under Section 139 of theCompanies Act 2013. The Report of the Auditors read with the notes to accounts as annexedare self-explanatory and therefore do not require any further explanations.

ACKNOWLEDGEMENT:

Your Board wishes to place on record its deep appreciation of Directors of your companyfor their immense contribution by way of strategic guidance sharing of knowledgeexperience and wisdom which help your company take right decisions in achieving itsbusiness goals.

Your Board acknowledges with thanks the support given by suppliers customers BankersGovernment Authorities Shareholders and Employees of the Company at all levels and looksforward for their continued support.

Date: 30.05.2018. For and on behalf of the Board of Directors
Place: Ahmedabad. M/S. MILTON INDUSTRIES LIMITED.
CHAIRMAN