TO THE MEMBERS
The Directors present their 45th Report together with Audited Financial Statements of the Company for the financial year ended 31st March, 2018.
1. FINANCIAL RESULTS
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(Rs./Lacs)
2017-18
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(Rs./Lacs)
2016-17
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Profit/(Loss) after charging all expenses before depreciation and amortization
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1605
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528
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Deduct: Depreciation and amortization expenses
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635
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536
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Profit/(Loss) before tax
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970
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(8 )
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Current Tax
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189
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0
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Deferred Tax
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(35)
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92
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Total tax expenses/ (credit)
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154
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92
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Profit/ (Loss) for the period
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816
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(100)
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Other Comprehensive income
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(25)
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(14)
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Transfer to General Reserve
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791
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(114)
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2. OPERATIONS
During the period under Report, the Company's sales and other income are Rs. 49113 lacs and cash profit is Rs.1605 lacs as compared to last year's figures of Rs.38932 lacs and cash profit of Rs.528 lacs respectively. After depreciation and amortisation, the profit for the year is Rs.816 lacs as compared to the loss of Rs. 100 lacs in the previous year, as the figure of the previous year have been regrouped/ rearranged and reclassified where ever necessary to make them comparable with the current year as required under Ind AS.
3. DIVIDEND
The Board of Directors of your Company proposes to retain the profits for use in the business 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 11 unpaid/unclaimed fixed deposits with the Company amounting to Rs.2.45 Lacs as at the end of the year;
(c) There has not been any default in repayment of deposits or payment 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 the wholly owned subsidiary company of the Company.
In compliance with provisions of Section 129(3) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has prepared consolidated financial statements as per the Accounting Standards on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India. The audited consolidated financial statements 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 the Subsidiary. Further, a statement containing the salient features of the financial statements 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 financial statements, including the consolidated financial statements and related information of the Company and audited financial statements of its subsidiary, are available on the Company's website at www.milkfoodltd.com.
The Company has no material subsidiary company but in order to comply with the Listing Regulations, the Company has adopted a Policy on Material Subsidiary Companies and has uploaded 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 or investment in terms of provisions of Section 186 of the Companies Act, 2013.
7. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY
No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which these financial statements relate and the date of this Report.
There is no change in the nature of the Company's business during the year under review.
8. DIRECTORS
No Director is liable to retire by rotation at this Annual General Meeting.
Mr.Harmesh Mohan Sood and Mrs.PreetiMathur were appointed as the Additional Directors of the Company in the Board meeting held on 29th September, 2017 in the category of Non Executive Non Independent Directors.
Mr.AmarjeetKapoor, Director, has vacated the office from the Directorship of the Company w.e.f. 29th September, 2017, under section 167 of the Companies Act, 2013 due to the disqualification incurred by him under section 164(2)(a) of the Companies Act, 2013.
Mrs.SushmaSagar has resigned from the Board of Directors of the Company w.e.f. 15th May, 2017. The Board places on record its sincere appreciation for the useful services rendered by Mrs.SushmaSagar during her tenure of services with the Company.
Mrs.AshaGadi and Mrs. Gita Bawa continue to hold the office as the Independent Directors of the Company.
9. DECLARATION OF INDEPENDENCE
All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
10. FORMAL LETTER OF APPOINTMENT TO INDEPENDENT DIRECTORS
The Company has issued the formal letter of appointment to all the independent directors in the manner as provided under the Companies Act, 2013 and the terms and conditions 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 separate meeting of the Independent Directors were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.
12. FAMILIARIZATION PROGRAMMES FOR INDEPENDENT DIRECTORS
The Company has a policy of conducting familiarization programmes for Independent Directors in order to familiarize them with the Company, their roles, rights, responsibilities in the Company and nature of the industry in which the Company operates etc. The details of such Policy has been given on the website of the Company at www.milkfoodltd.com.
13. COMMITTEES
As per the provisions of Section 177, 178 and 135 of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted an Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee. The Composition of these Committees and details of their meetings are given in the Corporate Governance Report.
14. KEY MANAGERIAL PERSONNEL
During the year under review, Mr.SudhirAvasthi, Chief Executive Officer, Mr.SanjeevKothiala, Chief Financial Officer and Mr.Rakesh Kumar Thakur, Company Secretary and Compliance Officer continue to be the Key Managerial Personnel of the Company in accordance with the provisions of Section 2(51) and Section 203 of the Act read with Companies (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 Directors confirm that:
(a) in the preparation of Annual Accounts for the year ended March 31, 2018, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts of the Company on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
16. AUDITORS
16.1 STATUTORY AUDITORS
The Members at the 44th Annual General Meeting (AGM) of the Company held on 26th September, 2017 had appointed M/s V. P. Jain & Associates, Chartered Accountants (ICAI Firm Registration Number 015260N), as the statutory Auditors of the Company to hold office for a term of five years i.e. from the conclusion of the said AGM until the conclusion of the 49th AGM to be held in the year 2022, subject to ratification of their appointment by the members of the Company at every subsequent AGM of the Company.
The Ministry of Corporate Affairs vide its Notification dated 7th May 2018, has dispensed with the requirement of ratification of Auditor's appointment by the shareholders, every year. Hence, the resolution relating to ratification of Auditor's appointment 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 adverse remarks. Notes to accounts are self explanatory and form an integral part of Financial Statements.
16.3 SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with corresponding Rules framed thereunder, Ms.Kamlesh Gupta, Company Secretary has been appointed as the Secretarial Auditors of the Company to carry out the Secretarial Audit of secretarial and related records of the Company for the financial year ended on March 31, 2018.
A Secretarial Audit Report submitted by the Secretarial Auditors in Form No. MR-3 forms part of this report and is annexed herewith as Annexure-2.
16.4 INTERNAL AUDITORS
M/s Lalit Kumar & Co., Chartered Accountants, continues to be the Internal Auditors of 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 cost accounts of the Company relating to Milk Powder for the financial year 2018-19.
As required under the Companies Act, 2013, resolutions seeking members' approval for the ratification of remuneration payable to the Cost Auditors forms part of the Notice convening the ensuing Annual General Meeting.
17. NOMINATION AND REMUNERATION POLICY
The Board on the recommendations of the Nomination & Remuneration Committee has framed a Policy for the selection and appointment of directors, key managerial personnel and also for determining the criteria of their remuneration. The Remuneration Policy has been stated in the Corporate Governance Report and is uploaded on the Company's website at http://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 a Risk Management Policy. The Company is aware of the risks associated with the business of the Company. It regularly analyses and takes corrective actions for managing / mitigating the risks.
At present, the Company has not identified any element of risks which may threaten the existence of the Company.
19. PERFORMANCE EVALUATION
In terms of the requirements of the Act and Listing Regulations, a separate exercise was carried out to evaluate the performance of all the individual Directors on the Board who were evaluated on parameters such as level of engagement, contribution and independence of judgment thereby safeguarding the interest of the Company. The performance evaluation of the Independent Directors was carried out by the entire Board (excluding the Directors being evaluated). The performance evaluation of the Non Independent Directors was carried out by the Independent Directors. The Board also carried out annual performance evaluation of the working of its Audit Committee, Nomination and Remuneration Committee as well as the Stakeholders Relationship Committee. The Directors expressed their 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 (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti Sexual Harassment Policy in line in accordance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaint has been received during the year under review.
21. CORPORATE SOCIAL RESPONSIBILITY
The Management and the Board of Directors of the Company are of strong opinion that Corporate Social Responsibility is strongly connected with the principles of sustainability and taking care of the society at large.
In terms of provisions of Section 135 of the Companies Act, 2013, the Corporate Social Responsibility Committee (“CSR Committee”) is in existence to monitor the Corporate Social Responsibility Policy of the Company as approved by the Board and the said policy is available on website of the Company i.e. http://www.milkfoodltd.com/img/downloads/ Milkfood_Corporate_Social_Responsibility_Policy.pdf.
During the financial year 2017-18, the provisions of Section 135 of the Companies Act, 2013 were not applicable on the Company since the Company does not fall under the conditions necessary for complying with CSR provisions. Hence, no amount was required to be spent during the year.
22. CORPORATE GOVERNANCE REPORT
A detailed Report on Corporate Governance forms an integral part of Annual Report and is set out as a separate section therein. A certificate from the Practicing Company Secretary, regarding the compliance with the conditions of corporate governance as stipulated in the Securities and Exchange Board of India (Listing Obligations and Disclosure 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 Discussion and Analysis Report have been given separately and forms part of this Report.
24. INFORMATION UNDER THE SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
The shares of your Company are listed at the BSE Ltd. vide Stock Code: 507621. The listing fee for the financial year 201819 has been paid.
25. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are annexed herewith as “Annexure-3”.
26. EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act, 2013, the details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as “Annexure-4”.
27. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report is being sent to all members and others entitled thereto, excluding the aforesaid information and the said particulars are available for inspection by the members at the Registered Office of the Company during the business hours on all the working days of the Company. The members interested in obtaining such particulars may write to the Company Secretary.
Disclosures pertaining to remuneration and other details as required u/s 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of the Managerial Personnel) Rules, 2014 are provided as per “Annexure-5”.
28. RELATED PARTY TRANSACTIONS
All related party transactions which were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with the interest of the Company at large. A disclosure in form AOC-2 is annexed with this Report as Annexure-6.
All related party transactions have been disclosed in Note 34 to the Accounts.
All Related Party Transactions are placed before the Audit Committee and also the Board for approval.
The policy on Related Party Transactions as approved by the Board is uploaded on the Company'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 create new green initiatives, electronic copy of the Annual Report 2018 and Notice of the 45th AGM 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 email addresses, physical copies of the Annual Report 2018 and the Notice of the AGM are being sent by the permitted mode. Members requiring physical copies can send a request to the Company Secretary.
The Annual Report 2018 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 has adopted a Code of Conduct for the prevention of insider trading with a view to regulate the trading in the securities of Company by the Directors and Designated Employees of the Company on the basis of unpublished price sensitive information available to them by virtue of their position in the Company.
The Code under SEBI (Prohibition of Insider Trading) Regulations, 2015 is available on the 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, 2013, Vigil Mechanism for directors and employees to report their genuine concerns such as unethical behavior, actual or suspected fraud, violation of the Company's Code of Conduct, has been adopted. The Vigil Mechanism Policy has been uploaded on the website of the Company 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 from losses, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting the financial statements. The Internal Auditor of the Company checks and verifies the internal control and monitors them in accordance with the policy adopted by the Company.
33. COMPLIANCE WITH SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
The Company is fully compliant with the applicable mandatory requirements under the Securities 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 Secretarial Standards 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 or Courts or Tribunals which impact the going concern status and the Company's Operations in future.
36. ACKNOWLEDGEMENT
Your Company and its Board of Directors would like to express their sincere appreciation for the assistance, support and cooperation received from Government, regulatory authorities, stakeholders, customers, vendors, investors, financial institutions, bankers and members during the year. We place on record our appreciation for the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.
For and on behalf of the Board
Sd/- Sd/-
Place: New Delhi Harmesh Mohan Sood AshaGadi
Date :25th May, 2018 Director Director
DIN:07951620 DIN:00110734
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