KMG Milk Food Ltd Directors Report.

Dear Member

On behalf of the Board of Directors, hereby present the 28th Annual Report on the business and operations of the Company containing Audited statements of Accounts together with Auditors Report for the year ended March 31, 2020.

01. FINANCIAL HIGHLIGHTS

(Rs. In lacs)
Particulars For the Year Ended 31.03.2020 For the Year Ended 31.03.2019
Total Revenue 19.47 82.08
Total Expenditure excluding Depreciation, Amortization Expenses and Financial Charges 108.96 190.38
Depreciation and Amortization Expenses 24.56 29.60
Financial Charges 19.35 13.02
Profit/(Loss) before Extraordinary Item -120.03 -149.14
Extraordinary Item - -
Profit/(Loss) before Tax -120.03 -149.14
Tax Expenses 1.30 7.59
Net Profit/(Loss) after Tax -121.33 -141.55

02. PERFORMANCE

During the period under report the Company achieved a turnover of Rs. 19.47 lacs as compared to Rs. 82.08 lacs for the previous year.

Your Company performed good as industry position during the year. However, your Directors are of the opinion that the company has the immense potential and adequate resources to achieve the rapid rate of growth in the coming years.

Keeping in view of the future expansion plan, the company needs working capital funds. Your Board is planning for infusion of funds by way of equity and also planning for some bank financing.

03. DIVIDEND AND RESERVES

As per the working capital requirements in the Company, your Directors do not recommend any dividend for the period under report and reserves as per Financial Statement.

04. CAPITAL STRUCTURE

There was no change in the companys issued, subscribed and paid up equity share capital during the period under the review.

05. CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business carried on during the financial year under the review.

06. NUMBER OF MEETINGS

The detail of the number of Board and Audit Committee Meetings of your Company are set out in the Corporate Governance Report which forms part of this Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

07. PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS

Your Company has not given any loan, guarantee or made any investment in any other body corporate as per the provision of Section 186 the Companies Act 2013, except as disclosed in the attached accounts.

08. INTERNAL FINANCIAL CONTROL

Your company has in place adequate internal financial controls in accordance to the size of the company and with reference to financial statement. The internal financial controls have been regularly reviewed by the auditors of your company and no reportable material weakness in the design or operation was observed.

09. DECLARATION BY INDEPENDENT DIRECTOR

Your Company has received declaration from all the independent directors that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 read with Schedule and Rules issued thereunder and also in accordance to Securities and Exchange Board of India (Listing Obligation and Disclosure Requirement) Regulation, 2015.

10. NOMINATION AND REMUNERATION COMMITTEE

The Details Pertaining to the Composition of the Nomination and Remuneration Committee is included in the corporate governance report, which forms part of this Report.

11. STATE OF COMPANY AFFAIRS

Your company is a going concern. The shares of your company are listed on Bombay Stock Exchange Limited. Your company is engaged in the production of Diary products.

12. DETAILS OF SIGNIFICANT AND MATERIAL ORDER

No significant or materials order have been passed by any regulators or court or tribunals impacting the going concern status and future operation of your company.

13. MATERIAL CHANGES AND COMMITMENTS

No significant changes and commitment affecting the financial position of your company from the financial year ending on 31st March, 2020 till the date of this report.

14. AUDIT COMMITTEE

The detail of the Audit Committee including its composition and terms of reference mentioned in the Corporate Governance Report form part of Directors Report.

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Re-appointment of Directors

In accordance with the requirements of the Companies Act, 2013 and the Companys Articles of Association,Directors seeking Appointment/ Re-appointment:

1. Mrs. Mithlesh Garg,(DIN: 00185942) Director of the Company, retires by rotation and being eligible offers herself for reappointment.

2. Re-appointment of Shri Basudev Garg, as the Whole Time Director of the Company, for a further period of five years w.e.f. 25.05.2020 to 24.05.2025.

Your directors solicit your approval for the reappointment of the director.

Brief resume of Directors proposed to be re-appointed, nature of their experience in their specific functional areas, name of the companies in which they hold directorship and membership/chairmanship of the Board Committees, shareholding forms part of the notice.

Change in Key Managerial Personnel

Mr. Rahul Garg, Director expressed his inability to continue on the Board as a Director due to some personal occupation. The resignation was effective from 08.07.2019.

Mr. M S Venkteswaran, Director expressed his inability to continue on the Board as a Director due to some personal occupation. The resignation was effective from 20.09.2019.

16. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with the Rule, 8 of The Companies (Accounts) Rules, 2014.

A. CONSERVATION OF ENERGY

Energy conservation is a very important part of energy planning and its management. This is not only saves energy resources for future but also avoids wasteful utilization of energy. Energy conservation initiatives provide solution to the energy crisis, environmental degradation and pollution. The Company is taking measures to achieve more efficiency in power and fuel consumption. The quality of coal used is being monitored to bring down consumption level.

B. TECHNOLOGY ABSORPTION/RESEARCH AND DEVELOPMENT

Efforts, in brief, made towards technology absorption, adaption and innovation. The Company as a matter of policy exposes its technical staff to latest technological developments by encouraging them to participate in domestic as well as global technical seminars and expositions; this helps them to further improve their knowledge and skills, which in turn results in better quality products and increased productivity.

Benefits derived as a result of the above efforts Product innovation and renovation, improvement in yield, product quality, input substitution, cost effectiveness and energy conservation as the major benefits.

C. FOREIGN EXCHANGE EARNING AND OUTGO: NIL

17. RISK MANAGEMENT POLICY

Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Your company already has "Risk Management Policy" in writing which is also uploaded on the website of the Company. The policy is regularly updated taking in to consideration the changes place in the business environment. Your company manages monitors and reports on the principal risks and uncertainties that can impact its abilities to achieve its strategic objectives. The detail of the policy is set out in the Corporate Governance which forms part of this Report.

18. PARTICULARS OF EMPLOYEES

During the year under report, none of the employee of the Company was in receipt of remuneration equal to/ exceeding the limit prescribed under section 197 of the Companies Act, 2013.

19. DIRECTORS RESPONSIBILITY STATEMENT

As required under section 134 sub section 5 of the Companies Act, 2013 regarding the Directors Responsibility Statement it is hereby stated:

a) that in the preparation of the annual accounts for the year ended 31.03.2020, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b) that the Directors have selected and applied such accounting policies consistently and the Directors have 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 as at 31.03.2020 and of the profit or loss of the company for the year ended 31.03.2020.

c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

d) that the Directors have prepared the annual accounts on a going concern basis.

e) that the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f) that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

20. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed M/s AMJ & Associates, Practising Company Secretary to undertake the Secretarial Audit of the Company.

21. SECRETARIAL AUDITORS REPORT

The Secretarial Auditors Report of the Company for the Year ended March 31, 2020 are self explanatory and requires no comments. The Report of the Secretarial Auditor is annexed to the Report as per Annexure "A"

22. STATUTORY AUDITORS

The Auditors, M/s. Manoj & Associates, Chartered Accountants (Firm Registration No. 012867N), be appointed as statutory auditors of the Company to hold office from the conclusion of 25th Annual General Meeting (AGM) until the conclusion of the 30th Annual General Meeting of the Company and offer them for re-appointment. Certificate received from the Auditors has been received to the effect that their ratification, if made, would be within the limits prescribed under the Companies Act.

23. AUDITORS REPORT

The Auditors Report on the Annual Accounts of the Company for the Year ended March 31, 2020 are self explanatory and requires no comments. There is no qualification or adverse remarks on the stand-alone financials of the Company.

24. INTERNAL AUDITORS

The Board of Directors of your Company has appointed Internal Auditors pursuant to the provisions of Section 138 of the Companies Act, 2013.

25. LISTING

The securities of the Company are listed at BSE Limited. The Shares of the Company have been traded at BSE trading platform.

26. EXTRACT OF ANNUAL RETURN

The detail forming part of the extract of the Annual Return in Form MGT-9 in accordance with the provision of Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 are set out herewith as Annexure B to this report.

27. BOARD EVALUATION

Pursuant to the Provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out an Annual Performance Evaluation of its own performance and the Directors individually. The manner of evaluation of Non-Independent Directors, Chairman and the Board as a whole was done at a separate meeting held by Independent Directors.

28. RELATED PARTY TRANSACTION

None of the transactions with any of related parties were in conflict with the Companys interest. Suitable disclosure as required by the Accounting Standards (AS-18) has been made in the notes to the Financial Statements.

29. CORPORATE GOVERNANCE

The Company has implemented the mandatory requirements of Corporate Governance provisions of Chapter IV of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 voluntarily however the Provisions of Schedule V of SEBI (LODR) Regulations, 2015 regarding Disclosure of Corporate Governance Report are not applicable to Company. The Report of the Corporate Governance is annexed to the Report as per Annexure C.

30. VIGIL MECHANISM

Your company is committed to high standards of ethical, moral and legal business conduct. Accordingly your company has established the Whistle Blower Policy which is in compliance with the provision of Section 177(10) of Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligation and Disclosure Requirement) Regulation 2015 for directors and employees of the Company to report genuine concerns or grievances. The vigil mechanism provides the safeguard against the victimization of person who uses such mechanism. The Company has framed the Whistle Blower Policy, which is periodically reviewed by the Audit Committee and the Board.

During the financial year 2019-2020, all the directors and employee had full access to approach the vigil mechanism officer. No complaint was received during the year 202019-2020 of any sort from any directors and employee of your company.

31. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis, forming part of this report, as required under Regulation 34(2)(e) of SEBI (LODR) Regulations, 2015 is attached separately to this Annual Report as per Annexure "D".

32. DETAILS OF SUBSIDIARIES, JOINT VENTURE OR ASSOCIATE COMPANIES

None of the Company has become or ceased to become the subsidiary, joint venture or associate of your Company during the financial year 2019-2020.

KMG Milk Food LLP was incorporated as an associate entity. During the Year the Associate Entity does not start any business activities.

33. GREEN INITIATIVE IN THE CORPORATE GOVERNANCE

In view of the Green Initiative in Corporate Governance introduced by the Ministry of Corporate Affairs vide its circular no. 17/2011 dated 21st April 2011, all members who are holding shares of the Company in physical mode, are requested to register their e-mail IDs with the Company, so as to enable the company to send all notices/ reports/documents/ intimations and other correspondences etc. through e-mails, in the electronic mode instead of receiving physical copies of the same.

34. DEPOSIT

During the year under review, your company has not accepted any deposits from the Public under Section 73 of the Companies Act, 2013 and rules made thereunder.

35. CORPORATE SOCIAL RESPONSIBILITY

The provision of section 135(1) of the Companies Act, 2013 i.e. Corporate Social Responsibility is not applicable on your Company as the net profit of the Company below Rs. 5 Crore. Therefore your Company has not constituted CSR committee for this purpose.

36. PERSONNEL

Labour Management relations were cordial during the period under report. Your Directors wish to place on record their appreciation of the valuable contribution made by all the employees to the business and operations of the company during the period under report.

37. INVESTOR GRIEVANCES

The Company and investors relation has been cordial during the period under report and there are no complaints pending for Redressal.

38. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 Company has adopted a policy for prevention of Sexual Harassment of Women at workplace. During the year Company has not received any complaint of harassment.

39. FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTOR

Your Company has organized a familiarization programme for the independent directors as per the requirement of the Companies Act, 2013 along with the requirement of SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015.

40. ACKNOWLEDGEMENT

The Board of Directors acknowledge and place on record their support and cooperation extended to the Company by the Government of India and other Authorities, Financial Institutions, Banks, Distributors and Suppliers etc.

Your Directors also recognize and appreciate the untiring efforts and contributions made by the employees to ensure excellent all round performance of your Company.

For & On Behalf of Board of Directors
Of KMG Milk Food Limited
Sd/-
Basudev Garg
Chairman cum Whole Time Director
DIN: 00282038
R/o: B-2, Friends Colony West
Mathura Road, New Delhi-110065
Date: 03.09.2020
Place: Kurukshetra (Haryana)