M K Proteins Ltd Directors Report.

To The Members,

Your directors have pleasure in presenting the 8th Annual Report together with the Audited Statements of Accounts of the Company for the financial year ended 31st March, 2020:

1. Financial Highlights:

2019-20 2018-19
Revenue from Operations 19412.26 15677.30
Operating Expenditure 18933.16 15180.00
Other Income (Net) 31.50 7.26
Earning before interest tax, depreciation and amortization (EBITDA) 510.60 504.56
Finance Costs 149.18 153.70
Depreciation and amortization expenses 117.10 122.35
Profit before exceptional item and tax 244.32 228.51
Exceptional item 0.00 0.00
Profit Before Tax (PBT) 244.32 228.51
T ax Expenses 62.63 64.19
Profit After T ax (PAT) 181.69 164.32
Add: Balance Brought forward from previous year 461.78 297.46
Less: Income Tax for earlier years adjusted 1.26 0.00
Amount of Surplus available for appropriation 642.19 461.78

2. Operations, State of Companys affairs and Future Outlook:

Our Company is a manufacturing and trading organization having its production/refining plant of Edible Oils. Our manufacturing process involves refining of Crude Oils to obtain Refined Rice Bran Oil, Canola Oil, Soya Bean Oil, Sunflower Oil and Rice Bran Bleached Oil. During the refining process certain by-products are also manufactured such as Rice Bran Fatty Acid Oil, Rice Bran Wax, Gums and Spent Earth which are also saleable. Further, it also imports crude oils, process them and sell the finished product and trade in both edible and non-edible oils. In the current year 2019-20, the Company has earned the total revenue from operation Rs.19412.26 Lacs against the previous year Rs.15677.30, which reflects growth of 23.82% w.r.t. previous year. The net profit after tax of the company is also increased from Rs.164.32 Lacs to Rs.181.69 Lacs in the year 2019-20. The management of the Company expect better results in the ensuing year because the product of the Company has demand since, its nature of human consumption in the ensuing financial year and years to come. We further inform that there is no change in the business activities of the company in the current financial year.

Effect of COVID - 19 on Business operation of the Company: In the last month of FY 2020, the COVID-19 pandemic developed rapidly into a global crisis, forcing governments to enforce lockdowns of all economic activity except "essential activity", severely restricted travel, mandated extreme ‘social distancing measures to prevent the rapid rise of infections. The Company is engaged in manufacturing of essential commodities i.e. Refined Oil, hence, the operations was partly impacted due to nationwide lockdown. The crisis has affected, and continues to impact, our key stakeholders - employees, clients, customers and the communities that we operate in. In responding to this crisis, the primary objective of the company is to ensure the safety of our employees, and on minimizing disruption to services for all our customers at different area through out country. The Company has considered the possible impact of the outbreak of COVID - 19 pandemic on business operations and carrying amounts of current and non-current assets of the Company. In developing the assumptions relating to the possible future uncertainties in the economic environment because of this pandemic, the Company, as at the date of approval of these financial statements has used internal and

external sources of information including credit reports and related information, economic forecasts. The Company has concluded that the carrying amount of these assets will be recovered no adjustments are required in the financial statements as it does not impact the current financial year. However, the situation with COVID-19 is evolving and various preventive measures taken are still in force, leading to highly uncertain economic environment and its impact on the Companys business operation also. Due to these circumstances, the managements assessment of the impact on the subsequent period is dependent upon the circumstances as they evolve and Companys financial statements may differ from that estimated as at the date of approval of these financial statements.

3. Dividend:

No dividend has been recommended by the Directors this year and consequently no amounts have been transferred to general reserves.

4. Transfer to Reserves:

The board of the Company has decided not to transfer any fund to general reserve out of the amount available for appropriation and an amount of surplus Rs.642.19 Lacs to be retained in the profit and loss account.

5. Change in Share Capital, if any

There has been no change in Share Capital of the Company during the financial year 2019-2020.

6. Listing of Shares

The shares of the Company are listed on the Emerge SME Platform of the National Stock Exchange of India Limited w.e.f. 18 April, 2017. Applicable listing fees have been paid up to date. The shares of the Company have not been suspended from trading at any time during the year by the concerned Stock Exchange.

7. Deposits:

The company has not accepted any deposits from the public during the year and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

8. Directors:

As per the provisions of Section 152 of the Companies Act, 2013, Sh. Parmod Kumar, Director of the Company retires by rotation at the forthcoming Annual General Meeting and being eligible, offered himself for re-appointment. The Board recommends his re-appointment.

The notice convening the Annual General Meeting includes the proposal for appointment of Director.

Mr. Chatter Singh has already attained the age of seventy five (75) years. Pursuant to Regulation 17(1A) of the Listing Regulations, the Special Resolution for continuation of his directorships with effect from April 1, 2019 up to March 3, 2022, being the date of expiry of their current term of office, will be required to be passed and Board recommend passing of same.

Further, your Company has also received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed under the Act and as per Listing Agreement with the Stock Exchanges.

9. Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the valuation of the working of its various committees as per the criteria of evaluation provided in the Nomination, Remuneration and Evaluation Policy adopted by the Company. The performance evaluation of Independent Directors was carried out by the entire Board and the performance evaluation of the Chairman and the Board as a whole was carried out by the Independent Directors.

10. Meetings of the Board:

The Board of Directors of your company met 09 times during 2019-20. The meetings were held on 30/04/2019, 08/05/2019, 30/05/2019, 27/06/2019, 27/08/2019, 25/09/2019, 14/11/2019, 23/12/2019 and 20/03/2020. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

11. Particulars of Loan given, Investment made, Guarantee given and Securities provided:

There were no loans given, investment made, guarantee given and securities provided by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

12. Extract of Annual Return:

As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure I in the prescribed Form MGT-9, which forms part of this report.

13. Subsidiary, Joint Ventures and Associate Concerns:

The Company does not have any Subsidiary, Joint Ventures or Associate Concerns as on 31st March, 2020.

14. Corporate Governance:

The Company has been exempt from reporting on Corporate Governance as per Regulation 15 of the SEBI (Listing Obligation and Disclosure requirements) Regulation 2015. Therefore, Corporate Governance Report is not provided.

15. Managements Discussion and Analysis Report

Managements Discussion and Analysis Report for the year under review, as stipulated under SEBI (Listing obligation and Disclosure Requirements) Regulations, 2015, as applicable, is presented in a separate section forming part of the Annual Report.

16. Directors Responsibility Statement:

In accordance with the provisions of Section 134(5) of the Companies Act, 2013, the directors hereby confirm that:

i) in the preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable accounting standard have been followed and there are no material departures;

ii) they 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 as at 31st March 2020 and of the profit of the Company for the period from 1st April 2019 to 31st March 2020;

iii) they 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;

iv) they have prepared the annual accounts on a going concern basis;

v) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and

vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

17. Contract and arrangements with Related Parties:

The Companys policy on dealing with related party transactions has been formulated and amended from time to time. All contracts/arrangements/ transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on the arms length basis. 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. Your Directors draw attention of the

members to Note 29(h) to the financial statements which set out related party disclosures pursuant to listing agreement. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure II in Form AOC-2 and the same forms part of this report.

18. Auditor and Auditors Report:

M/s Jayant Bansal & Co., Chartered Accountants, Ambala Cantt, Statutory Auditors of the company, holds office till the conclusion of the ensuing Annual General Meeting and are eligible for appointment and ratification and approval of their appointment for the financial year ending 31st March, 2021.

M/s Jayant Bansal & Co., Chartered Accountants, Ambala Cantt, who were appointed as Statutory Auditors for a period of 3 years from 31st March, 2020 to 31st March 2022 being eligible for appointment and approval at this Annual General Meeting have agreed to act Statutory Auditors to the Company for the financial years ending 31st March, 2020 to 31st March, 2022.

As required under the provisions of section - 139(1) of the Companies Act, 2013, the company has received a written consent from M/s Jayant Bansal & Co., Chartered Accountant to their appointment and a certificate, to the effect that their re-appointment, if made, would be in accordance with the Act and the Rules framed there under and that they satisfy the criteria provided in section- 141 of Companies Act, 2013. The Board recommends ratification of their appointment for the financial years ending 31st March, 2021.

The report of Statutory Auditors (appearing elsewhere in this Annual Report) is self-explanatory having no adverse comments. There were no instances of fraud reported by the Statutory Auditors to the Central Government or to the Audit Committee of the Company as indicated under the provisions of Section 143(12) of the Companies Act 2013.

Further auditors report for the financial year ended 31st March, 2020 is given as an annexure which forms part of this report.

19. Secretarial A uditors:

Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed M/s J. P. Jagdev & Co., Ambala City, a firm of Company Secretaries in practice to conduct Secretarial Audit for the financial year 2019-20. The Secretarial Audit Report for the financial year ended 31st March, 2020 is annexed herewith as Annexure III to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

20. Corporate Social Responsibility (CSR):

The Company is not required to constitute a Corporate Social Responsibility Committee as it does not fall within purview of Section 135(1) of the Companies Act, 2013 and hence it is not required to formulate policy on corporate social responsibility.

21. Risk Management:

The board of the Company has formed a risk management committee, to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

22. Internal Control System and their adequacy:

The Companys internal controls are commensurate with the size of the company and the nature of its business. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance of corporate policies. The company has an audit committee, the details of which are provided in the Corporate Governance Report. The audit committee reviews the internal control

system and follows up on the implementation of corrective actions, if required. The committee also meets the companys statutory auditors to ascertain, interalia their views on the adequacy of internal control system in the Company and keeps the Board of Directors informed of its major observations from time to time. The management also regularly reviews the utilization of fiscal resource, compliance with law, efficiencies, so as to ensure optimum utilization of resources and achieve better efficiencies. Based on its evaluation (as defined in section 177 of Companies Act 2013), our audit committee has concluded that, as of March 31, 2020, our internal financial controls were adequate and operating effectively.

23. Vigil Mechanism Policy:

The Company has a vigil mechanism policy which also incorporates a whistle blower policy in line with the provisions of the Section 177(9) and (10) of the Companies Act, 2013 and regulation 22 of the Listing Regulations, which deals with the genuine concerns about unethical behaviour, actual or suspected fraud and violation of the Companys Code of Conduct and ethics.

24. Committees of Board:

The Board of Directors of your Company had already constituted various committees in compliance with the provisions of the Companies Act, 2013 and Listing Agreement viz. Audit Committee, Nomination and Remuneration Committee and Shareholders/Investors Relationship Committee. All decisions pertaining to the constitution of committees, appointment of members and fixing the terms of reference / role of the Committees are taken by the Board of Directors. Detail of the role and composition of Committees, including the number of meetings held during the financial year and attendance at meetings, are provided in annexure - IV, which forms part of this report.

25. Conservation of Energy, Technology absorption and foreign exchange earning and outgo:

Information required under Section 134(3) (m) of Companies Act, 2013 read with Companies (Accounts) Rules, 2014 is given as under:

(A) Conservation of energy:

(i) The steps taken or impact on conservation of energy: The Company is using Government supply of electricity and own generation by its generators.

(ii) The steps taken by the company for utilizing alternate sources of energy: There are no alternate sources of energy with the Company.

(iii) The capital investment on energy conservation equipments: Investment on energy conservation equipments is made wherever it is possible mostly it is NIL.

(B) Technology absorption:

(i) The efforts made towards technology absorption: Plant and machinery are indigenous and no machinery and technology has been imported by the Company

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution: Indigenous machinery is state of Art and the company derives benefits on cost reduction of production.

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - : No technology has been imported by the Company.

(iv) The expenditure incurred on Research and Development: No specific expenditure is incurred on Research and Development.

(C) Foreign exchange earnings and Outgo:

The Companys main line of business is processing of vegetable edible oils. The Company has not earned and spent foreign exchange during the current and previous year.

26. Nomination, Remuneration and Evaluation Policy:

The Nomination, Remuneration and Evaluation Policy recommended by the Nomination and Remuneration Committee is duly approved by the Board of Directors of the Company and the same are provided in annexure - IV, which forms part of this report.

27. Human Resources:

Your Company treats its "human resources" as one of its most important assets and has taken continuous efforts to set up and maintain an efficient work force. The company is continuously taken steps towards maintaining a low attrition rate which it believes shall be achieved by investing in learning and development programmes for employees, competitive compensation, creating a compelling work environment, empowering employees at all levels as well as a well-structured reward and recognition mechanism.

28. Particulars of Employees:

I) The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Executive Director Ratio to median Remuneration
1 Sh. Vinod Kumar (Managing Director) 0.20:1
2. Sh. Raj Kumar (Whole Time Executive Director) 0.20:1

Note: The Company has not given any remuneration/benefits to non-executive/independent directors of the company during the year 2019-20 except directors sitting fee Rs.250000.000 to Non-executive Independent directors.

b. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year:

Directors, Company Secretary and Financial Officer % increase in remuneration in the financial year
1 Sh. Vinod Kumar (Managing Director) NIL
2. Sh. Raj Kumar (Whole Time Executive Director) NIL
3. Ms. Prerna Mehta (Company Secretary) NIL
4. Sh. Nipun Garg (Financial Officer) NIL

c. The percentage increase in the median remuneration of employees in the financial year:

2%

d. The number of permanent employees on the rolls of Company: 39 Employees as on 31st March, 2020.

e. The explanation on the relationship between average increase in remuneration and Company performance: The performance of the Company for the current financial year is better than the previous year. The Company has minor increase in remuneration to Executive Director/key managerial personnel. However, at Middle & Junior level management, the proper increment was given in accordance with the inflation rate and at workmen and staff level.

f. Comparison of the remuneration of the key managerial personnel against the performance of the Company: Remuneration to Managing and Whole Time directors were paid as per the scale approved by the members of the company. The head (Corporate Finance) was promoted to the position of Financial Officer, hence he was given an increase as a part of promotion and salary adjustment.

g. Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year:

Particulars March 31, 2020 March 31, 2019 % Change
Market Capitalization (Rs. In Lacs) 2977.95 3107.25 -6.70

h. Percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the Last public offer:

Particulars March 31, 2019 March 31, 2019 % Change
Market Price (NSE) 71.40 (Average Price) 73.55 (Average Price) -2.15

i. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: Proper increments at both managerial and staff/worker level has been given in financial year 2019-20.

j. Comparison of each remuneration of the key managerial personnel against the performance of the Company: The head (Corporate Finance) was promoted to the position of Financial Officer, hence he was given an increase as a part of promotion and salary adjustment.

k. The key parameters for any variable component of remuneration availed by the directors:

No such variable component is included in the remuneration paid to directors.

l. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the

year: Sh. Raj Kumar (Whole Time Director): 0.20:1

m. Affirmation that the remuneration is as per the remuneration policy of the Company: The

Company affirms remuneration is as per the remuneration policy of the Company.

II. There was no employee on the roll of the company who drew remuneration in excess of the limits prescribed by the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, hence this relevant information is not applicable to the Company.

29. Disclosure under sexual harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013:

The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (114) of 2013.

30. CFO Certification:

In compliance with Regulation 17(8) of the Listing Regulations, a declaration by CFO was placed before the Board, certifying the accuracy of Financial Statements and the adequacy of internal controls pertaining to Financial Reporting for the year ended 31st March, 2019 is attached herewith as per Annexure - V.

31. Auditors Certificate on Corporate Governance:

As per Regulation 15 of the SEBI (Listing Obligation And Disclosure Requirement) Regulations, 2015, the compliance with the Corporate Governance provisions shall not apply in respect of (a) listed entity having paid up equity share capital not exceeding ten crore and net worth not exceeding rupees twenty five crore as on the last day of previous year (b) the listed entity which has listed its specified securities on the SME Exchange. Hence, Auditors Certificate on Corporate Governance is not provided.

32. Code of Conduct::

The Board of Directors has an important role in ensuring good Corporate Governance and has laid down the Code of Conduct for Directors and Senior Management of the Company. The Code has also been posted on the website of the Company. All Directors and Senior Management personnel have affirmed the compliance thereof for the year ended March 31, 2020.

Declaration

I hereby declare that pursuant to Schedule V (Part D) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company have adopted a Code of Conduct for the Board members and Senior Management of the Company and the same has also been posted in the Companys website and that all the Board members and Senior Management personnel to whom this Code of Conduct is applicable have affirmed the compliance of the said Code of Conduct during the year 2019-20.

Ambala Vinod Kumar

4th September 2020 (Managing Director)

33. Other Disclosures:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

i) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

ii) No Material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of this Report.

2. The provisions of Section 125(2) of the Companies Act, 2013 related with transfer of unclaimed dividend to Investor Education and Protection Fund do not apply to the Company as there was no dividend declared and paid in previous years and there is no unclaimed dividend.

3. Equity Shares:

• No issue of equity shares with differential rights as to dividend, voting or otherwise during the year under review.

• The Company has not bought back any of its securities during the year under review.

• No issue of shares (including sweat equity shares) to employees of the Company under Stock option Scheme during the year under review.

• No Shares outstanding under the head Shares Suspense Account/Unclaimed Suspense Account at the beginning and end of the year under review.

34. Acknowledgements:

Your directors wish to place on record their gratitude for the valued support and assistance extended to the Company by the Shareholders, Banks and Government Authorities and look forward to their continued support. Your directors also express their appreciation for the dedicated and sincere services rendered by the Executives, Officers and Employees of the Company.

By Order of the Board of Directors

Place: Ambala
Dated: 04-09-2020 Sd/-
(VINOD KUMAR)
Managing Director
DIN: 00150507