Lactose (India) Ltd Directors Report.

To,

The Members,

Your Directors are presenting the 30th Annual Report of the Company together with the Audited Statement of the Accounts for the Financial year ended on 31st March, 2021.

FINANCIAL STATEMENT:

(Rs. In Lakhs)

Particulars 2020-2021 2019-2020
Operating and other Income 3,527.64 4,034.39
Expenditure 3,854.68 4,024.46
Profit before Tax (327.04) 9.94
Provision for Current Tax - 1.55
Deferred Tax (84.20) 0.82
Taxation of Earlier Years 4.89 0.37
After Tax (242.21) 3.60

DIVIDENDS:

The Board of Directors of your Company do not recommend any Dividend on equity shares for the FY 2020-2021.

REVIEW OF OPERATIONS:

During the year under review, revenue of the Company was decreased to Rs. 3,527.64 lakhs as compared to Rs. 4,034.39 lakhs in the corresponding previous year. The Company incurred a loss of Rs. 242.21 lakhs as compared to profits of Rs. 3.60 lakhs in the corresponding previous year.

TRANSFER TO RESERVE:

The Company has not transferred any amount to reserves during the Financial Year 2020-21.

DEPOSITS:

The details of deposits as covered under Chapter V of the Act are as under:

(a) Deposits accepted during the year Nil
(b) Remained unpaid or unclaimed as at the end of the year Nil
(c) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved: (i) At the beginning of the year (ii) Maximum during the year (iii) At the end of the year Nil
(d) The details of deposits which are not in compliance with the requirements of Chapter Nil

NATURE OF BUSINESS:

The company is engaged in the business of manufacturers, manufacturers representatives, producers, processors, refiners, consignors, consignees factors, agents, exporters, importers and distributors of all classes, kinds, types and nature of:

I. Foods whether finished, semi-finished, processed and unprocessed.

II. Milk cream ice-cream, curd, butter milk, paneer, cheese, sweetmeats, choclates and other diary products.

III. Pharmaceuticals, drugs bulk drugs, medicines.

IV. Chemicals, chemical products, chemical compounds, derivaties and intermediates.

DETAILS OF SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES:

The Company has no subsidiary, Joint Venture and Associate companies.

No company has become or ceased to be the Companys subsidiaries, joint ventures or associate companies during the year under review.

COMPLIANCE WITH SECRETARIAL STANDARDS:

The Board of Directors affirm that the Company has complied with the applicable Secretarial Standards ("SS") issued by the Institute of Company Secretaries of India relating to the meetings of the Board and its committees as well as the general meetings (SS-1 and SS-2) respectively, which have mandatory application during the year under review.

SHARE CAPITAL:

The details of Share capital of the Company is as under:

Particulars As at 31st March, 2021 As at 31st March, 2020
Number of Shares (Rs.in Lakhs) Number of Shares (Rs in Lakhs)
Authorised Capital: Equity Shares of Rs 10/- each 1,50,00,000 1500.00 1,20,00,000 1200.00
Issued ,Subscribed & Paid-Up Capital: Equity Shares of Rs 10/- each 1,14,37,000 1143.70 1,01,89,000 1018.90

During the year under review, the Company had allotted 24,00,000 Convertible warrants convertible into equity shares on preferential basis to Promoters and Promoter Group.

Further, the company had converted 12,48,000 equity shares on conversion of convertible warrants (out of 24,00,000 convertible warrants in the Board meeting held on 24th February, 2021 in the following manner:

Sr. No Name of the Allottee(s) No. of Equity Shares
1 Mr. Shyamsunder Toshniwal 2,14,500
2 Mrs. Madhubala Toshniwal 2,14,500
3 Mr. Atul Maheshwari 2,14,500
4 Mrs. Sangita Maheshwari 2,14,500
5 SST Private Family Trust 3,90,000
TOTAL 12,48,000

The Company has neither issued any shares with differential rights as to dividend, voting or otherwise nor issued any sweat equity shares during the year under review.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

At the 30th Annual General Meeting ("AGM") of the Company and in accordance with the applicable provisions of Section 152 of the Act and the Articles of Association of the Company, Mr. Shyamsunder Toshniwal (DIN: 01223515) is liable to retire by rotation and being eligible, offers himself - for re-appointment as Director- of the Company.

Necessary resolution- for his re-appointment is included in the Notice of 30th AGM for seeking approval of the members of the Company.

DECLARATION BY AN INDEPENDENT DIRECTOR(S)

All 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 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

FORMAL ANNUAL BOARD EVALUATION

The annual evaluation process of the Board of Directors, individual Directors and Committees was conducted in accordance with the provision of the Act and the SEBI Listing Regulations.

The Board evaluated its performance after seeking inputs from all the directors on the basis of criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the Committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are as provided in the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.

The evaluation was done in accordance with the framework and criteria laid down by the NRC. Further, at a separate meeting, the Independent Directors evaluated performance of Non-Independent Directors, Board as a whole and of the Chairman of the Board.

MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Management Discussion and Analysis of financial condition, including the results of operations of the Company for the year under review as required under Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is provided as a separate section forming part of the Annual Report.

BOARD MEETINGS:

During the FY 2020-21, 08 (Eight) Board Meetings were conveyed and held by the Company. 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.

SEPARATE MEETING OF INDEPENDENT DIRECTORS:

Pursuant to Schedule IV of the Companies Act, 2013 and the Rules made thereunder and Regulation 25 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate meeting of Independent Directors was held on 11th February,2021 during the financial year 2020-21, without the attendance of Non-Independent Directors and Members of the Management.

The Independent Directors reviewed performance of NonIndependent Directors, Chairman of the Company and the performance of the Board as a whole. The Independent Directors also discussed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The feedback of the Meeting was shared with the Chairman of the Company.

NOMINATION AND REMUNERATION POLICY:

Pursuant to Provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and on the recommendation of the Nomination & Remuneration committee the Board has adopted policy for selection and appointment of Directors, Senior Management and their remuneration. The details of Remuneration Policy is stated in the Corporate Governance Report. The Nomination and Remuneration Policy is posted on the website of the Company. The web link for the same is: https://www.lactoseindialimited.com/policy.php.

STATUTORY AUDIT:

At the Annual General Meeting of the Company held on 09th August, 2017, C A S & Co., Chartered Accountants Mumbai (Firm Registration Number 111075W), were appointed as statutory auditors of the Company for a term of five years [i.e., till the conclusion of Annual General Meeting to be held in FY 2022-2023], subject to ratification of their appointment by Members at very AGM, if do required under the Act. The requirement to place the matter relating to appointment of auditors for ratification by members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from 07th May, 2018. Accordingly, no resolution is being proposed for ratification of appointment of Statutory auditors at the ensuing AGM.

The Notes on Accounts referred to in the Auditors Report are self-explanatory and do not call for any further comments.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. Jajodia and Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year ended 31st March, 2021. The Report of the Secretarial Audit is annexed as "Annexure A" to this Boards Report.

The Secretarial Audit Report does not contain any qualification, reservation, adverse remarks and disclaimer.

The Company is in compliance with the Secretarial Standards specified by the Institute of Company Secretaries of India.

INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Act introduced regulations with focus on control and compliance requirements, in light of which, the Company has laid down internal financial controls across various processes prevalent in the organization. These controls have been established at the entity as well as process level and are designed to ensure compliance to internal control requirements, regulatory compliance and enable appropriate recording of financial and operational information. The Company has reviewed the effectiveness of its internal financial controls by adopting a systematic approach to assess the design and its operating effectiveness.

During the financial year 2020-2021, such controls were tested and no reportable material weakness in the design or operation was observed. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Company has a vigil mechanism to deal with instance of fraud and mismanagement, if any. The policy is placed the on the website of the Company. The web link for the same is:- http://www.lactoseindialimited.com/policy.php

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:

The information required under Section 134 (3) (m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, with respect to conservation of energy, technology absorption and foreign exchange earnings/outgo is given hereto and forms a part of this report as an "Annexure B".

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

Energy conservation is not only a national priority but also a key value driver for your Company. Employees are also encouraged to give suggestion that will result in energy saving.

As prescribed under the Section 134 (3) (m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is not applicable, as there is no technology absorption, adaptation and innovation made by your Company. However, it has been the endeavor of the Company to continuously upgrade & standardize its products.

FOREIGN CURRENCY EARNING AND OUTGO

Sr No. Particulars Rs. In Lakhs
i) CIF Value of Imports 259.14
ii) Expenditure in foreign currency 7.28
iii) Foreign Exchange earned 245.50

PARTICULARS OF EMPLOYEES:

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report and is marked as "Annexure C" to this Report.

EXTRACT OF ANNUAL RETURN:

Pursuant to Section 92 of the Companies Act, 2013 ("Act") read with Rule 12 of The Companies (Management and Administration) Rules, 2014 and Section 134 (3) (a), the copy of Annual Return can be accessed on the website of the Company at www.lactoseindia.com

RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY UNDER SECTION 186:

The details of Loan, Guarantees and Investments made by the Company under the provisions of Section 186 of the Companies Act, 2013 are provided in the notes to the Financial Statements.

SAFETY, HEALTH AND ENVIRONMENT:

Your Company recognizes its role in health and safety, as well as its responsibility towards environment and society. Infact, your Companys goals are: no accidents, no injuries to people and no damage to environment. Safety and security of personnel, assets and environmental protection are also on top of the agenda of the Company at its manufacturing facilities.

Clean environment and sustainable development integrated with the business objective is the focus of operations of the Company. The projects and activities are planned and designed with environment protection as an integral part to ensure a safe and clean environment for sustainable development.

DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134(3)(c) OF THE COMPANIES ACT 2013:

To the best of knowledge and belief and according to the information and explanation obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Act.

(a) That in the preparation of the annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) That such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgments have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2021 and of the profit or loss of the company for the year ended on that date;

(c) That proper and sufficient care has been taken 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) That the annual financial statements have been prepared on a going concern basis;

(e) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

(f) That systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE:

As per the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 the Company has prepared a report on Corporate Governance together with a certificate from the Companys Auditors confirming Compliance is set out in the "Annexure D" forming the part of this Annual Report.

DISCLOSURES:

AUDIT COMMITTEE

The Audit Committee comprises Independent Directors namely Mr. G. K. Sarda (Chairman), Mr. Pramod Kalani and

Mr. Mahendra Singhi Omprakash as other members. The Audit Committee played an important role during the year. It co-ordinated with the Statutory Auditors, Internal Auditors and other key personnel of the Company and has rendered guidance in the areas of internal audit and control, finance and accounts. All the recommendations made by the Audit Committee were accepted by the Board. During the FY 202021,05 (Five) Audit Committees Meetings were conveyed and held by the Company. The details of which are given in the Corporate Governance Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE:

During the FY 2020-21, 4 (Four) Stakeholders Relationship Committees Meetings were conveyed and held by the Company. The details of which are given in the Corporate Governance Report. With the compulsory dematerialization of the Companys shares and electronic mode of transfers, postal dispatches which led to usual complaints, have been minimized.

NOMINATION & REMUNERATION COMMITTEE:

During the FY 2020-21,01 (One) Nomination & Remuneration Committees Meetings were conveyed and held by the Company. The details of which are given in the Corporate Governance Report. The Nomination and Remuneration Committee recommends to the Board the suitability of candidates for appointment as Key Managerial Personnel, Directors and the remuneration packages payable to them and other employees.

CORPORATE SOCIAL RESPONSIBILITY ("CSR"):

During the FY 2020-21, Corporate Social Responsibility is not applicable to the company.

SEXUAL HARASSMENT POLICY

The Company has in place Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the 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.

The following is a summary of sexual harassment complaints received and disposed of during the year 2020-21:

a) No of complaints received: Nil

b) No of complaints disposed of: N.A.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

Industrial Relations continued to be harmonious throughout the year under review. Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programs which have helped the Organization achieve higher productivity levels.

MATERIAL CHANGES:

During the financial year 2020-21 under review, the company had allotted 12,48,000 equity shares pursuant to conversion of convertible warrant on 24th February, 2021.

Further, there are no other material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company

i.e. 31st March, 2021 to which these financial statements relate and date of this report.

RISK MANAGEMENT POLICY:

As per the Act, and as part of good corporate governance the Company has constituted the Risk Management Committee. The Committee has laid down the procedures to inform to the Board about the risk assessment and minimization procedures and the Board shall be responsible for framing, implementing and monitoring the risk management plan and policy for the Company.

The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.

The Committee reviewed the risk trend, exposure and potential impact analysis carried out by the management. It was specifically confirmed to the Committee by the MD and the CFO that the mitigation plans are finalised and up to date, owners are identified and the progress of mitigation actions are monitored.

CODE OF CONDUCT:

Your Company has established a Code of Conduct and Code of Fair Disclosures for Prohibition of Insider Trading ("Code of Conduct" or "Code") which is applicable to the Employees, Directors, designated persons, immediate relatives of designated persons and connected persons of the Company. The Code lays down the standard of conduct, which is expected to be followed by the Directors and employees in their business dealings, and in particular, on matters relating to integrity in the work place, dealing with stakeholders and in business practices. All the Board Members and the Senior Management employees have confirmed compliance with the Code.

The Code is available on website of the Company at www. lactoseindia.com.

SIGNIFICANT OR MATERIAL ORDERS AGAINST COMPANY

No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and your Companys operation in future

APPRECIATION:

Your Directors take this opportunity to convey their deep sense of gratitude for valuable assistance and Co-operation extended to the Company by all valued customers and bankers of the Company.

Your Directors also wish to place on record their sincere appreciation for the valued contribution, unstinted efforts by the employees at all levels which contributed, in no small measure, to the progress and the high performance of the Company during the year under review.

For and on behalf of the Board
For Lactose (India) Limited
Sd/- Sd/-
(Atul Maheshwari) (Sangita Maheshwari)
Managing Director Whole-time Director & CFO
DIN No: 00255202 DIN:00369898
Date: 30.08.2021
Place : Mumbai