Dear Shareholders,
Your Directors have immense pleasure in presenting the 14th (Fourteenth) Annual Report on the business and operations of the Company together with the Audited Standalone and Consolidated Financial Statements for the financial year ended 31st March 2024. This being the first annual report after the Initial Public Offering (“IPO”) and listing of the equity shares of the Company on BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”), the Board welcomes all the public shareholders and looks forward to your faith and support in times to come.
1. FINANCIAL PERFORMANCE:
The Audited Financial Statements of your Company as on 31st March 2024, are prepared in accordance with the applicable Indian Accounting Standards (“Ind AS”) and Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”) and the provisions of the Companies Act, 2013 (“Act”).
Your Company's performance during the financial year as compared to the previous financial year is summarized as below:
2. STATE OF COMPANY'S AFFAIRS:
As a manufacturer of Fish Protein products, we manufacture and supply fish meal, fish oil and fish soluble paste which is an essential ingredient in the manufacturing of aqua feed (for fish and shrimp), poultry feed (for broiler and layer) and pet food (dog and cat food). Further, fish oil also finds its application in pharmaceutical products (additionally, Omega-3 pills and related products derived from fish oil are gaining importance as high nutrient and
healthy dietary supplements), soap manufacturing, leather tanneries & paint industries. We sell our products domestically and also export them to over 10 countries, including Bahrain, Bangladesh, Chile, Indonesia, Malaysia, Myanmar, Philippines, China, Saudi Arabia, South Korea, Oman, Taiwan and Vietnam. We are also amongst the first few Indian companies to have commercialised insect meal and insect oil (collectively “Insect Protein”) as an ingredient for aqua feed, animal feed and pet food.
The revenue from operations on standalone basis for FY 2023-24 stood at Rs 12,685.43 million as against Rs 10,663.98 million for FY 2022-23, registering a growth of 18.96%. Whereas the profits after tax for FY 2023-24 stood at Rs 627.56 million as against Rs 394.23 million for FY 2022-23.
The revenue from operations on consolidated basis for FY 2023-24 stood at Rs 13,798.29 million as against Rs 11,771.22 million for FY 2022-23, registering a growth of 17.22%. Whereas the profit after tax for FY 202324 stood at Rs 743.05 million as against Rs 475.25 million for FY 2022-23.
During the year under review, there is no change in nature of the business of the Company. The affairs of the Company are conducted in accordance with the accepted business practices and within the purview of the applicable legislations.
3. DIVIDEND:
Pursuant to Regulation 43A of the SEBI Listing Regulations, the Board of Directors have formulated the Dividend Distribution Policy, setting out the broad principles for guiding the Board and the management in matters relating to declaration and distribution of dividend. The Dividend Distribution Policy, in terms of Regulation 43A of the Listing Regulations, can be accessed on the Company's website at https://www.mukkaproteins.com/images/Dividend-Distribution-Policy.pdf. To strengthen the financial position of the Company and to augment working capital the Board does not recommend any dividend for the FY 2023-24.
4. TRANSFER TO RESERVES:
During the period under review, no amount has been transferred to the General Reserve of the Company.
5. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:
During the financial year under review, no amount was required to be transferred to the Investor Education and Protection Fund by the Company.
6. CHANGES IN THE NATURE OF BUSINESS:
During the financial year under review there was no change in the nature of business of the Company.
7. INITIAL PUBLIC OFFERING AND LISTING:
During the period under review, the Company successfully completed its Initial Public Offering (IPO) of 8,00,00,000 equity shares of face value of Rs 1/- each for cash at an issue price of Rs 28/- per equity share (including share premium of Rs 27/- per equity share) aggregating to Rs 2,24,00,00,000 (“the issue”) and got listed on BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”) on 7th March 2024. The proceeds from the issue have been earmarked for funding working capital requirements of our Company, investment in our Associate, viz. Ento Proteins Private Limited, for funding its working capital requirements and other general corporate purposes. The IPO proceeds have bolstered an already strong capital structure even further, significantly enhanced the Company's financial flexibility, and accelerated the Company's ambitious growth plans.
The issue was open to the public from 29th February 2024 and closed on 4th March 2024 and received an overwhelming response, was over-subscribed by 135.78 times (overall). The Anchor Investors Bid/Issue period was one working day prior to the Bid/Issue Opening Date, i.e. 28th February 2024. The allotment was finalized on 5th March 2024. The equity shares of the Company were listed on BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”) w.e.f. 7th March 2024.
Cameo Corporate Services Limited is the Registrar and Share Transfer Agent of the Company.
The annual listing fees for the financial year 2023-24 have been paid to the Stock Exchanges.
8. MATERIAL CHANGES AND COMMITMENTS:
There have been no material changes and commitments, which affect the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of this annual report.
9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act, read along with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed as Annexure-A to this report.
10. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
Your Company had 331 employees (on a standalone basis) as of 31st March 2024.
The disclosure pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-B to this Report.
The disclosure under Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms a part of this Report. However, as per first proviso to Section 136(1) of the Act and second proviso of Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Report and Financial Statements are being sent to the Members of the Company excluding the said statement. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company.
11. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 134(5) of the Act, the Board, to the best of their knowledge and based on the information and explanations received from the management of your Company, confirms that:
a.in the preparation of the Annual Financial Statements, the applicable accounting standards have been followed along with proper explanation and there are no material departures;
b.they have selected such accounting policies and applied them consistently and judgements 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 of the Company for that period;
c.proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d.the annual financial statements have been prepared on a going concern basis;
e.they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and
f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
12. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
As of 31st March 2024, your Company's Board had 8 (Eight) members comprising of 3 (Three) Executive Directors, 2 (Two) Non-Executive Non-Independent Directors including one Woman Director and 3 (Three) NonExecutive Independent Directors. The details of Board and Committee composition, tenure of directors, and other details are available in the Corporate Governance Report, which forms part of this Annual Report.
In the opinion of the Board, all Independent Directors possess requisite qualifications, experience, expertise, proficiency and hold high standards of integrity for the purpose of Rule 8(5)(iiia) of the Companies (Accounts) Rules, 2014. In terms of the requirement of the Listing Regulations, the Board has identified core skills, expertise, and competencies of the Directors in context of your Company's business for effective functioning. The key skills, expertise and core competencies of the Board of Directors are detailed in the Corporate Governance Report, which forms part of this Annual Report.
Appointment/Cessation/Change in Designation of Directors:
During the year under review, following changes took place in the Directorships:
a) Appointment:
During the year under review, there is no change in the composition of the Board of Directors of your Company.
b) Re-appointment of Director(s) retiring by rotation:
In accordance with the provisions of Section 152 of the Act, read with rules made thereunder and Articles of Association of your Company, Mr. Kalandan Mohammad Arif (DIN: 03020564) and Mrs. Umaiyya Banu (DIN: 03051040) are liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offers themselves for re-appointment.
The Board recommends the re-appointment of Mr. Kalandan Mohammad Arif (DIN: 03020564) and Mrs. Umaiyya Banu (DIN: 03051040) as Directors, for your approval. Brief details, as required under Secretarial Standard-2 and Regulation 36(3) of SEBI Listing Regulations, are provided in the Notice of the ensuing AGM.
c) Resignation/Cessation:
During the year under review, there has been no cessation or resignation of any Director.
Board Diversity:
Your Company recognises the benefits of having a diverse Board and sees increasing diversity at Board level as an essential element in maintaining a competitive advantage. Your Company believes that a truly diverse Board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, race and gender, which will ensure that the Company retains its competitive advantage.
Your Company believes that a diverse Board contribute towards driving business results, make corporate governance more effective, enhance quality and responsible decision-making capability, ensure sustainable development and enhance the reputation of the Company.
The Policy on Board Diversity adopted by the Board, in compliance with Regulation 19(4) read with Part D of the Schedule II of SEBI Listing Regulations, sets out its approach to diversity. The Policy on Board Diversity is available on the website of the Company at https://www.mukkaproteins.com/images/Policy-on-Board- Diversitv.pdf.
Declaration from Independent Directors:
Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as SEBI Listing Regulations. The Independent Directors have affirmed compliance to the Code of Conduct for Independent Directors as prescribed in Schedule IV to the Act.
In the opinion of the Board, Independent Directors fulfil the conditions specified in Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as SEBI Listing Regulations and are independent from Management. The Independent Directors are persons of high repute, integrity and possess the relevant expertise and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) in their respective fields. The Independent Directors have also confirmed that they have registered their names in the Independent Directors' databank with the Indian Institute of Corporate Affairs.
None of the Directors of the Company are disqualified as per the provisions of Section 164 of the Act. The Directors of the Company have made necessary disclosures under Section 184 and other relevant provisions of the Act.
Key Managerial Personnel (“KMP”):
As on the date of this report, the following are Key Managerial Personnel (“KMP”) of your Company as per Sections 2(51) and 203 of the Act:
13. BOARD EVALUATION:
The annual evaluation process of the Board of Directors, individual Directors and Committees was conducted in accordance with the provision of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
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 broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.
In a separate meeting of Independent Directors, performance of Non-Independent Directors and the Board as a whole was evaluated. Additionally, they also evaluated the Chairman of the Board, taking into account the views of Executive and Non-Executive Directors in the aforesaid Meeting. The Board also assessed 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 above evaluations were then discussed in the Board Meeting and performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.
14. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:
The Company has adopted a framework, duly approved by the Board of Directors for Familiarization Programmes for Independent Directors. The objective of the framework is to ensure that the Independent Directors have a greater insight into the business of the Company, enabling them to contribute more effectively to decision making.
The details of Familiarization Programme have been uploaded on the website of the Company at https://www. mukkaproteins .com/ images/F amiliarization-Programme-for-Independent-Directors .pdf.
15. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES:
As on 31st March 2024, your Company had following subsidiaries, associates and joint ventures:
A. Subsidiaries:
1) Haris Marine Products Private Limited
2) Atlantic Marine Products Private Limited
3) Ocean Aquatic Proteins LLC, Oman (Foreign Subsidiary)
B. Associates:
1) Ento Proteins Private Limited
2) Ocean Proteins Private Limited
3) MSFI (Bangladesh) Limited*
*The Board of Directors in their meeting held on 13th August 2024 have approved the sale of investment held by the Company in MSFI (Bangladesh) Limited. However, the said disinvestment is subject to necessary approvals as required under the Foreign Exchange Management Act, 1999.
C. Joint Ventures: Nil
There has been no change in the nature of business of these subsidiaries and associates. Your Company does not have any material subsidiaries pursuant to the provisions of Regulation 16(1) (c) of the SEBI Listing Regulations.
A report on the performance and financial position of each of the Subsidiaries, Associates and Joint Ventures and their contribution to the overall performance of the company for the financial year ended 31st March 2024 in prescribed Form AOC - 1 as per the Companies Act, 2013 is set out in Annexure- C and forms an integral part of this Report.
Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries are available on the website of the company at https://www.mukkaproteins.com/Finacials.php.
The Company has formulated a policy for determining material subsidiaries. The said policy is also available on the website of the Company at https://www.mukkaproteins.com/images/Policy-on-Material-Subsidiaries-and- Governance-of-Subsidiaries.pdf.
During the period under review, no Company has become or ceased to be a subsidiary, joint venture or associate of the Company.
Further, below is the brief note on the performance of the Subsidiaries and Associates:
Ocean Aquatic Proteins LLC, Oman: The company has recorded a sales Turnover of Rs 1,280.37 million during the year under review, as against the sales Turnover of Rs 1,159.56 million achieved during the previous year. The company has recorded a Profit After Tax of Rs 78.24 million during the year under review, as against the Profit After Tax of Rs 29.19 million during the previous year.
Haris Marine Products Private Limited: The company has recorded a sales Turnover of Rs 8.01 million during the year under review, as against the sales Turnover of Rs 512.74 million achieved during the previous year. The company has recorded a Profit After Tax of Rs 9.52 million during the year under review, as against the Profit After Tax of Rs 5.66 million during the previous year.
Atlantic Marine Products Private Limited: The company has recorded a sales Turnover of Rs 968.39 million during the year under review, as against the sales Turnover of Rs 961.81 million achieved during the previous year. The company has recorded a Profit After Tax of Rs 26.04 million during the year under review, as against the Profit After Tax of Rs 54.17 million during the previous year.
Ento Proteins Private Limited: The company has recorded a sales Turnover of Rs 64.44 million during the year under review, as against the sales Turnover of Rs 47.22 million achieved during the previous year. The company has recorded a Profit After Tax of Rs 9.93 million during the year under review, as against the Profit After Tax of Rs 6.98 million during the previous year.
Ocean Proteins Private Limited: The company has recorded a sales Turnover ofRs 282.35 million during the year under review, as against the sales Turnover of Rs 267.47 million achieved during the previous year. The company has recorded a Net Loss ofRs 15.77 million during the year under review, as against the Net Loss ofRs 57.04 million during the previous year.
MSFI (Bangladesh) Limited: MSFI (Bangladesh) Limited is not actively engaged in any business operations over the past few years and accordingly, the Board of Directors in their meeting held on 13th August 2024 have approved the sale of investment held by the Company in MSFI (Bangladesh) Limited subject to necessary approvals as required under the Foreign Exchange Management Act, 1999.
16. CONSOLIDATED FINANCIAL STATEMENTS:
The Consolidated Financial Statements required pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 6 of the Companies (Accounts) Rule, 2014 have been prepared in accordance with the relevant accounting standards as per the Companies (Indian Accounting Standard) Rules, 2015. The audited consolidated financial statement is provided along with the Standalone Financial Statement.
17. PUBLIC DEPOSITS:
The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding during the period under review.
18. MEETINGS OF THE BOARD:
The Board met 14 (Fourteen) times during the year under review. The intervening gap between the meetings did not exceed 120 days, as prescribed under the Act and the SEBI Listing Regulations. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report, which forms part of this Annual Report.
19. INDEPENDENT DIRECTORS' MEETING:
During the year under review a separate meeting of the Independent Directors of the Company was held on 28th March 2024, without the presence of Non-Independent Directors and members of Management. The Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole, performance of Chairperson of the Company and assessed the quality, quantity and timeliness of flow of information between the Company management and the Board.
20. COMMITTEES OF THE BOARD:
As required under the Act and the SEBI Listing Regulations, your Company has constituted 5 (Five) committees of the Board, namely:
1) Audit Committee;
2) Nomination and Remuneration Committee;
3) Stakeholders' Relationship Committee;
4) Corporate Social Responsibility Committee; and
5) IPO Committee.
A detailed note on the composition of the Board and its committees, including its terms of reference, is provided in the Corporate Governance Report, which forms part of this Annual Report. The composition and terms of reference of all the Statutory Committee(s) of the Board of Directors of the Company is in line with the provisions of the Act and SEBI Listing Regulations.
21. AUDIT COMMITTEE:
The composition of Audit Committee has been detailed in the Corporate Governance Report, forming part of this Annual Report.
All the recommendations made by the Audit Committee were accepted by the Board of Directors of the Company. The Audit Committee of the Company reviews the reports to be submitted with the Board of Directors with respect to auditing and accounting matters. It also supervises the Company's internal control and financial reporting process and vigil mechanism.
During the period under review the Audit Committee met 7 (Seven) times on 1st May 2023, 7th June 2023, 15th June 2023, 29th September 2023, 23rd December 2023, 16th February 2024 and 28th March 2024.
22. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:
The particulars of loans given, investments made and guarantees given and securities provided by the Company under Section 186 of the Act during the financial year 2023-24 are disclosed in the notes to Financial Statements which forms part of this report.
23. PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:
The Company has in place a robust process for approval of related party transactions and on dealing with related parties. All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions, formulated and adopted by the Board of Directors.
In compliance with the requirements of the Companies Act, 2013 and SEBI Listing Regulations, your Company has formulated a Policy on Related Party Transactions which is also available on Company's website at https://www.mukkaproteins.com/images/Related-Partv-Transactions-Policy.pdf.
The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and its Related Parties. All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions which are of repetitive nature and / or entered in the ordinary course of business and are at arm's length basis.
All related party transactions entered during the year were in ordinary course of the business and at an arm's length basis. No Material Related Party Transaction was entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC-2 is not applicable.
24. NOMINATION AND REMUNERATION POLICY:
In compliance with the provisions of Section 178 of the Companies Act, 2013, the Board has, framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration.
The salient features of the Policy are:
i. To formulate the criteria for determining qualification, competencies, positive attributes and independence for appointment of Directors (Executive and Non-executive) and persons who may be appointed in Senior Management, Key Managerial positions and recommend to the Board policies relating to the remuneration for the Directors, Key Managerial Personnel, Senior Management and other employees;
ii. To lay down criteria for appointment, removal of Directors, Key Managerial Personnel and Senior Management;
iii. To recommend the remuneration of Directors, Key Managerial Personnel (KMP), and Senior Management of the Company involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals; and
iv. To specify the manner for effective evaluation of performance of Board, its committees and individual directors and review its implementation and compliance.
During the year under review, there has been no change to the Policy.
The Nomination and Remuneration Policy of the Company is available on the website of the Company at https://www.mukkaproteins.com/images/Nomination-and-%20-Remuneration-%20Policy.pdf.
25. SUCCESSION PLANNING:
The Company believes that succession planning for the Board members and Senior Management is very important for creating a robust future for the Company. The Nomination and Remuneration Committee plays a pivotal role in identifying successors to the members of the Board, Key Managerial Personnel and Senior Management and invests substantial time with the Managing Director on succession planning.
The Company has a succession planning policy in place which intends to achieve the following:
i. To identify and nominate suitable candidates for the Board's approval to fill the vacancies which arises in the Board of Directors from time to time.
ii. To identify the competency requirements of critical and key positions in the Company, assess potential candidates and develop required competency through planned development and learning initiatives.
iii. To identify the key job incumbents in Senior Managerial positions and recommend whether the concerned individual be granted an extension in term/service or be replaced with an identified internal or external candidate or recruit other suitable candidate(s).
iv. To ensure the systematic and long-term development of individuals in the senior management level to replace the individuals when the need arises due to deaths, disabilities, retirements and other unexpected occurrence.
26. CORPORATE SOCIAL RESPONSIBILITY:
In terms of the provisions of Section 135 of the Act, read with Companies (Corporate Social Responsibility Policy) Rules, 2014, (as amended) the Board has constituted a Corporate Social Responsibility (“CSR”) Committee. The details of the CSR Committee are provided in the Corporate Governance Report, which forms part of this Annual Report. The CSR policy is available on the website of your Company at
https://www.mukkaproteins.com/ima ges/Mukka-CSR-Policy.pdf.
The CSR committee met once during the year under review on 29th September 2023. The company has spent Rs 70,00,000.00 towards the CSR obligation for the present financial year. The Annual Report on CSR activities is annexed and forms part of this report as Annexure- D.
27. ANNUAL RETURN:
Pursuant to the provisions of Sections 134(3)(a) and 92(3) of the Companies Act, 2013, the draft Annual Return for the financial year ended 31st March 2024, is av ailable on the website of the Company at
https://www.mukkaproteins.com/Investors-annual-return.php.
28. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
In terms of Regulation 34(2)(e) read with Part B of Schedule V of the SEBI Listing Regulations, the Management Discussion and Analysis Report (“MD&A”), is presented in a separate section forming part of this Annual Report.
29. SHARE CAPITAL:
Authorised Share Capital:
As on 31st March 2024, the Authorised share capital of the Company was Rs 30,00,00,000/- (Rupees Thirty Crores only) divided into 30,00,00,000 (Thirty Crores only) Equity Shares of Face Value Rs 1/- (Rupee One only) each.
Issued, Subscribed and Paid-up Share Capital:
As on 31st March 2024, the Issued, Subscribed and Paid-up share capital of the Company was Rs 30,00,00,000/- (Rupees Thirty Crores only) divided into 30,00,00,000 (Thirty Crores only) Equity Shares of Face Value Rs 1/- (Rupee One only) each.
During the year under review, the Company raised capital by way of issue of 8,00,00,000 (Eight Crores only) Equity Shares of face value of Rs 1/- (Rupee One only) each through initial public offering. The Equity Shares issued during the year rank pari-passu with the existing Equity Shares of your Company.
Your Company has not issued any sweat equity shares or equity shares with differential rights as to dividend, voting or otherwise.
30. STATUTORY AUDITORS AND AUDITORS' REPORT:
The shareholders in the 9th AGM, approved the appointment of M/s. Shah and Taparia, Chartered Accountants (Firm Registration No. 109463W), as the Statutory Auditors, for a period of 5 (Five) years i.e. from the conclusion of the 9th AGM held on 30th September 2019 till the conclusion of 14th AGM of the Company.
The Auditors' Report for the financial year ended 31st March 2024, does not contain any qualification, reservation or adverse remark. Further the Auditors' Report being self-explanatory does not call for any further comments from the Board of Directors.
As the first term of five consecutive years of M/s. Shah and Taparia, Chartered Accountants as statutory auditors of the Company is about to end at the conclusion of forthcoming 14th Annual General Meeting (AGM), the Board of Directors of the Company on the recommendation of the Audit Committee, subject to approval of Shareholders of the Company, in their meeting held on 13th August 2024, appointed M/s. Shah and Taparia, Chartered Accountants (Firm Registration No. 109463W), as Statutory Auditors for a further period of 5 (Five) consecutive years commencing from the conclusion of the 14th Annual General Meeting till the conclusion of the 19th Annual General Meeting. The Board of Directors recommends the proposed appointment for the approval of Shareholders.
M/s. Shah and Taparia, Chartered Accountants (Firm Registration No. 109463W) have confirmed that they have not been disqualified to act as Statutory Auditors of the Company and that their appointment is within the maximum ceiling limit as prescribed under Section 141 of Companies Act, 2013.
Representatives of the Statutory Auditors of the Company attended the 13th Annual General Meeting of the Company held on 30th September 2023.
31. INTERNAL AUDITORS:
Pursuant to the provisions of Section 138 of the Act read with Companies (Accounts) Rules, 2014, the Board has appointed Mr. Sirajuddin, Chartered Accountant, as Internal Auditor of the Company. The Internal Auditor monitors and evaluates the effectiveness and adequacy of internal control systems in the Company, its compliances with the operating systems, accounting procedure and policies at all locations of the Company and reports to the Audit Committee on a quarterly basis.
32. COST AUDITORS:
Pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, appointment of cost auditor is not applicable to the Company.
33. SECRETARIAL AUDITORS:
Pursuant to Section 204(1) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Chethan Nayak & Associates, Practicing Company Secretaries (Firm Registration Number: P2013KR029100) to undertake Secretarial Audit of the Company for the financial year 2023-24.
The Secretarial Auditors Report for the Financial Year 2023-24, being self-explanatory does not call for any further comments from the board of directors. The Secretarial Audit Report is appended as Annexure-E and forms part of this Annual Report.
34. REPORTING OF FRAUD:
During the year under review, none of the auditors have reported any instances of fraud committed in the Company by its officers or employees as specified under Section 143 (12) of the Act.
35. CODE FOR PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct to regulate, monitor and report trading by designated persons and their immediate relatives as per the requirements under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. The Code, inter alia, lays down the procedures to be followed by designated persons while trading/dealing in Company's shares and sharing Unpublished Price Sensitive Information (“UPSI”). The Code covers Company's obligation to maintain a digital database, mechanism for prevention of insider trading and handling of UPSI, and the process to familiarize with the sensitivity of UPSI. Further, it also includes code for practices and procedures for fair disclosure of unpublished price sensitive information which has been made available on the Company's website at https://www.mukkaproteins.com/images/Code-for%20- Fair-Disclosure-of- Unpublished-Price%20-Sensitive-Information.pdf.
36. CORPORATE GOVERNANCE REPORT:
The Company has complied with the requirements of Corporate Governance as stipulated under Regulation 34 read with Schedule V of the SEBI Listing Regulations, and accordingly, the Corporate Governance Report and the requisite certificate from M/s. Chethan Nayak & Associates, Practicing Company Secretaries, regarding compliance with the conditions of Corporate Governance forms a part of this Report.
Your Company has also been enlisted in the new SEBI compliant redressal system (SCORES) enabling the investors to register their complaints, if any, for speedy redressal.
The Company is committed to pursue and adhere to the highest standard of Corporate Governance as set out by the Securities and Exchange Board of India (SEBI) and the Act.
37. RISK MANAGEMENT:
The Company has a defined Risk Management framework to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. It provides for identification of risk, its assessment and procedures to minimize risk and is being periodically reviewed to ensure that the executive management controls the risk as per decided policy
Since the Company doesn't fall under the top 1000 listed entities and is also not a ‘high value debt listed entity' the provisions of constitution of Risk Management Committee are not applicable to the Company.
38. STATEMENT OF DEVIATION AND VARIATION:
Your Company has appointed ICRA Limited as Monitoring Agency in terms of Regulation 41 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR Regulations”), as amended from time to time, to monitor the utilisation of IPO proceeds and the Company has obtained monitoring reports from the Monitoring Agency from time to time confirming no deviation or variation in the utilisation of proceeds of the IPO from the objects stated in the Prospectus dated 5 th March 2024. The Company has submitted the statement(s) and report as required under Regulation 32 of the Listing Regulations to both the exchanges where the shares of the Company are listed, namely, National Stock Exchange of India Limited and BSE Limited and on timely basis.
39. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY:
Your Company has in place an adequate internal financial control framework with reference to financial and operating controls thereby ensuring orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information and such controls are operating effectively.
The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Audit Committee of the Board of Directors are periodically apprised of the internal audit findings and corrective actions are taken accordingly. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board.
The details in respect of internal controls and their adequacy are included in the Management Discussion and Analysis Report, which forms part of this Annual Report.
40. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:
The Company is committed to providing a safe and conducive work environment to all its employees and associates. The Company has a policy on Prevention of Sexual Harassment (POSH) at Workplace in place, which is available on the Company's website at https://www.mukkaproteins.com/images/Policy-on%20-Prevention-of- %20Sexual%20-Harassment.pdf. The Company has constituted an Internal Complaints Committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, no complaint was received under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
41. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
In Compliance with the provisions of section 177 of the Companies Act, 2013 and Regulation 22 of SEBI Listing Regulations, the Company has in place the Whistle Blower Policy and Vigil Mechanism for Directors, employees and other stakeholders which provides a platform to them for raising their voice about any breach of code of conduct, financial irregularities, illegal or unethical practices, unethical behaviour, actual or suspected fraud. Adequate safeguards are provided against victimization to those who use such mechanism and direct access to the Chairman of the Audit Committee in appropriate cases is provided.
The policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination is made against any person. The Whistle Blower Policy and Vigil Mechanism is available on the Company's website at https://www.mukkaproteins.com/images/Whistle-Blower-%20Policy.pdf.
42. COMPLIANCE WITH SECRETARIAL STANDARDS:
During the year under review, your Company has complied with all the applicable provisions of Secretarial Standard on the Meetings of the Board of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2) as issued and amended from time to time by the Institute of Company Secretaries of India.
43. OTHER DISCLOSURES:
During the financial year under review:
a) There was no issue of equity shares with differential rights as to dividend, voting or otherwise.
b) There was no issue of shares (including sweat equity shares) to employees of the Company under any scheme.
c) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.
d) The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.
e) Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.
f) Except as disclosed in this report, there were no material changes and commitments which occurred after the close of the year till the date of this report, which may affect the financial position of the Company.
g) There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.
h) There was no instance of one-time settlement with any Bank or Financial Institution.
i) The Company does not have any shares in unclaimed suspense demat account.
44. CAUTIONARY STATEMENT:
The Annual Report including those which relate to the Directors' Report, Management Discussion and Analysis Report may contain certain statements on the Company's intent expectations or forecasts that appear to be forward looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company bears no obligations to update any such forward looking statements. Some of the factors that could affect the Company's performance could be the demand and supply for Company's product and services, changes in Government regulations, tax laws, forex volatility etc.
45. ACKNOWLEDGEMENT:
Your Directors would like to express their appreciation for the co-operation and assistance received from the Government authorities, banks and other financial institutions, vendors, suppliers, customers, shareholders and all other stakeholders during the year under review.
Your Directors also wish to place on record their deep sense of appreciation for the committed services of all the employees.