Megastar Foods Ltd

The Directors are pleased to present the 13^th Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended 31 March 2024.

GENERAL OUTLOOK OF THE COMPANY

Our Company is having state of the art modern machinery at its wheat processing plant in Punjab, India, with an installed capacity of 200000 MT. It has been our constant endeavour at all the levels to ensure processing of wheat with quality, undertaking testing and exploring new possibilities by our team of highly skilled people. It has been our hallmark in our organization to strictly follow the Good Manufacturing Practices (GMP), Good Laboratory Practices (GLP) to ensure the high standards of food safety, quality & hygiene. At present we are catering primarily to MNC's in India and also exporting some of our products to United Nations Organization, Europe, United States & Middle East.

Our company's main aim is to maintain and deepen relationships with our customers to which we can serve successfully by providing them a point of difference, adding value and ultimately, providing profitable growth for both parties. Our customers are supported by a highly skilled, enthusiastic, cando culture team throughout the whole business. Our endeavour is to maintain an efficiently sound business in order to provide a secured future to our fellow employees while stressing on the continual improvement of our highly ranked products for a constantly enhanced customer satisfaction.

For the financial year ended on 31 March 2024 the company has earned a net profit of Rs. 616.33 Lakhs as compared to the net profit of Rs. 961.71 Lakhs, for the previous year ended on 31 March 2023.

1. FINANCIAL PERFORMANCE

The financial position of the company for the financial year ended on 31 March 2024 is summarised below:

(Rs. in Lacs, except as stated)

Standalone

Revenue from operations for the year ended March 31, 2024 stood at Rs. 25,405.82 Lakhs as against Rs. 26,752.86 Lakhs for the previous year. Profit after tax for the year ended March 31, 2024 amounts to Rs. 616.33 Lakhs and EPS is Rs. 6.03 per share as against a net profit and EPS of Rs. 961.71 Lakhs and Rs. 9.61 per share, respectively for the previous year.

Consolidated

On Consolidated basis, the Revenue from operations for the year ended March 31, 2024 stood at Rs. 27,493.21 Lakhs as against Rs. 30,420.31 Lakhs for the previous year. Profit after tax for the year ended March 31, 2024 was Rs. 632.25 Lakhs and EPS is Rs. 6.19 per share as against a net profit and EPS of Rs. 1008.20 Lakhs and Rs. 10.08 per share respectively for the previous year.

3. DIVIDEND

Your directors have decided to plough back the earnings in the growth of business and for this reason, have decided, not to recommend any Dividend for the year under review.

The provisions of regulation 43A (2) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 regarding establishment of a Dividend Distribution Policy are not applicable to the company.

4. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

During the financial year ended 31 March 2024, no entity became or ceased to be the Subsidiary, Joint Venture or Associate of the Company.

5. TRANSFER TO RESERVES

Entire amount of Net Profit of Rs. 616.33 Lakhs for the financial year 2023-24, has been transferred to Profit and Loss Surplus account, which appears under the head "Reserves and Surplus." No amount has been transferred to any other reserves.

6. SHARE CAPITAL

The authorised share capital of the company at the end of the Financial Year 2023-24 was Rs. 15,00,00,000 comprising of 1,50,00,000 equity shares of Rs. 10/- each and the paid-up capital was Rs. 11,29,37,000 divided into 1,12,93,700 equity shares of Rs. 10/- each.

7. CHANGES IN SHARE CAPITAL

8. PREFERENTIAL ALLOTMENT OF EQUITY SHARES TO PROMOTE AND PROMOTER GROUP

Subsequent to approval accorded by way of Special Resolution passed in the Extra-Ordinary General Meeting held on December 23, 2023, the Company issued and allotted 12,90,000 Equity Shares on Preferential Issue basis, to subscribers inter alia including the Promoter and Promoter Group individuals, at an Issue price of ? 326 (Rupees Three Hundred Twenty-Six Only) per equity shares including Securities premium of ? 316 (Rupees Three Hundred and Sixteen Only) per equity share, aggregating up to ? 42,05,40,000. The proceeds of the Preferential Issue were utilized for prepayment of borrowings of the Company, meeting funding requirements, working capital and other general corporate purposes of the Company.

9. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTTNG THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relates and till the date of this Report.

10. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There is no change in nature of business of the Company during the financial year 2023-24.

11. CASH FLOW STATEMENT

The Cash Flow Statement for the financial year ended 31 March 2024 prepared in accordance with accounting standard -3, ‘Statement of Cash Flows' is attached and forming part of the financial statements of the Company.

12. FAMIIJARIZATION PROGRAMME FORINDEPENDENT DIRECTORS

Pursuant to Regulation 25(7) of the SEBI Listing Regulations, the Company familiarizes its Independent Directors about their role and responsibilities at the time of their appointment through a formal letter of appointment. Presentations are regularly made at the meetings of the Board and its various committees on the relevant subjects. All efforts are made to keep Independent Directors informed. The familiarization programme of Independent Directors may be accessed on the Company's website https://www.megastarfoods.com/

13. SUBSIDIARY COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS

The Company has One Wholly owned Subsidiary, Megapacific Ventures Private Limited. There is no Associate Company within the meaning of Section 2(6) of the Companies Act, 2013. Further there has been no material change in the nature of business of the Subsidiaries during the financial year 2023-24.

The Consolidated Financial Statements of the Company for the financial year 2023-24 are prepared in compliance with applicable provisions of the Companies Act, 2013, read with the Rules issued thereunder, applicable Indian Accounting Standards (Ind-As) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Consolidated Financial Statements have been prepared by consolidating the audited Financial Statements of the Company and its Subsidiaries. Further, pursuant to the proviso of sub section (3) of section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 a separate statement containing the salient features of the financial statements of Subsidiaries in the prescribed form AOC-1 is attached as ‘Annexure -1' and forms part of this report. The Financial Statements of the Subsidiary Companies and related information is also available for inspection by the members at the Registered Office of the Company during business hours on all days except Sunday and holiday upto the date of Annual General Meeting ("AGM") as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company at the Registered Office/ Corporate Office of the Company. The Financial Statements including the Consolidated Financial Statements, Financial Statements of Subsidiaries and all other documents are also available on the Company's website https://www.megastarfoods.com/ under the link Investor Relations.

14. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL Board Composition

As on March 31, 2024, the Company's Board has a strength of 6 (Six) Directors including 1 (One) Woman Director. The Chairman of the Board is an Executive Promoter Director. The composition of the Board is as below: -

The detailed section on ‘Board of Directors' is given in the ‘Report on Corporate Governance' forming part of the Annual Report.

During the year, Mr. Amit Mittal ceased to be a Non-Executive Independent Director of the Company effective from 03.04.2023, upon completion of his term as an Independent Director.

Mr. Rajiv Kathuria was appointed as an Additional Director designated as Non-Executive Independent Director of the Company with effect from 03.04.2023.

Further, He was regularised and appointed as a Non-Executive Independent Director of the Company for a term of 5 years, with effect from 03.04.2023, with the approval of the shareholders vide Postal Ballot dated June 23, 2023.

Optimum Composition of the Board of Directors of the Company in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013 has been maintained throughout the year.

Pursuant to the provisions of Section 149(13) of the Companies Act, 2013 and Articles of Association of the Company all Directors except Independent Directors are liable to retire by rotation. The Independent Directors of Company are appointed for terms upto 5 years each in compliance with the provisions of Companies Act, 2013 and the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

Declaration by Independent Directors

All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. In the opinion of the Board, the Independent Directors, fulfil the criteria of independence specified in Section 149(6) of the Act and Regulation 16(1) (b) of the SEBI Listing Regulations. The Independent Directors have also confirmed that they have complied with the Company's Code of Business Conduct & Ethics laid down for the Board of Directors, Senior Management Personnel and Other Employees.

Re-appointment of Independent Non-Executive Directors for a second term of 5 (five) consecutive years

The first terms of office of Mr. Prabhat Kumar, and Mrs. Savita Bansal, Independent Directors of the company expired on 3^rd April 2023. The Nomination and Remuneration Committee and the Board of Directors at their respective meetings held on 12^th August 2022 recommended their re-appointments as Non- Executive Independent Directors of the Company for second terms of 5 (five) consecutive years each, subject to the approval of the members by way of special resolution. Pursuant to the provisions of Section 149(13) of the Companies Act, 2013 and Articles of Association of the Company all directors except Independent Directors are liable to retire by rotation.

Accordingly, the members in the 11^th Annual general meeting of the company held on 26^th September, 2022 passed special resolutions for the re-appointment of both Mr. Prabhat Kumar, and

Mrs. Savita Bansal as Independent Directors of the company for their respective second terms of 5 years each w.e.f. 4^th April, 2023.

Retirement by rotation and subsequent re-appointment

Pursuant to the provisions of Section 149(13) of the Companies Act, 2013 and Articles of Association of the Company all directors except Independent Directors are liable to retire by rotation. Accordingly, Mr. Vikas Gupta (DIN: 05123386), Whole-time Director of the Company, being the longest in the office amongst the directors liable to retire by rotation, retire from the Board by rotation this year and being eligible, has offered his candidature for re-appointment. This shall not constitute a break in his office as the Whole-time Director of the Company.

Re-appointment of Executive Directors for a period of 5 (five) years

The previous tenures of Mr. Vikas Goel (DIN: 05122585) as Chairman & Managing Director, Mr. Vikas Gupta (DIN: 05123386) as a Whole Time Director and Mr. Mudit Goyal (DIN: 08099543) as Whole Time Director of the Company expired on 3^rd April, 2023.

Upon the recommendation of Nomination and Remuneration Committee, the Board of Directors in its meeting held on 12^th August 2022 accorded its approval for re-appointment of Mr. Vikas Goel (DIN: 05122585) as Chairman & Managing Director and Mr. Vikas Gupta (DIN: 05123386) and Mr. Mudit Goyal (DIN: 08099543) as Whole Time Directors of the company, for a further period of five years w.e.f. 04 April 2023 to 03 April 2028, subject to the approval of shareholders.

Accordingly, the members in the 11^th Annual general meeting of the company held on 26^th September, 2022 passed special resolutions for the re-appointment of Mr. Vikas Goel (DIN: 05122585) as Chairman & Managing Director and Mr. Vikas Gupta (DIN: 05123386) and Mr. Mudit Goyal (DIN: 08099543) as Whole Time Directors of the company, for a further period of five years w.e.f. 04 April 2023 to 03 April 2028.

Brief Resume of the Directors being appointed/re-appointed

As required under Regulation 36 of the SEBI Listing Regulations, the brief resume of the Director being re-appointed at the ensuing AGM, the nature of their expertise in specific functional areas, names of Companies in which they have held Directorships, Committee Memberships/ Chairmanships, their shareholding, etc. are forming part of the Notice calling AGM of the Company.

KEY MANAGERIAL PERSONNELS

The details of Key Managerial Personnel's (KMPs) of the Company in accordance with the provisions of Section 2(51) and Section 203 of the Companies Act, 2013, read with rules framed thereunder, are as follows: -

15. AUDIT COMMITTEE

In compliance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI Listing Regulations, as on 31^st March 2024, the Audit Committee of Megastar Foods Limited comprises of following 3 (Three) Members, 2 (Two) Members are Independent Non- Executive Directors and 1 (One) is Executive Director: -

*Mr. Amit Mittal ceased to be a member & chairman of the Audit Committee w.e.f. 03.04.2023.

*Mr. Prabhat Kumar ceased to be a member of the Audit Committee w.e.f. 03.04.2023.

*Mrs. Savita Bansal induced as the Chairperson of the Audit Committee w.e.f. 03.04.2023 *Mr. Rajiv Kathuria induced as a member of the Audit Committee w.e.f. 03.04.2023.

The recommendation made by the Audit Committee from time to time was accepted by the Board of Directors. The details of the terms of reference, meetings held during the year, attendance of Audit Committee members at such meetings etc. are provided in the Report on Corporate Governance forming part of this Annual Report.

16. POLICY ON REMUNERATION OF DIRECTORS, KMPs, SENIOR MANAGEMENT PERSONNEL AND OTHER EMPLOYEES

The remuneration paid to the Executive Directors is in accordance with the Nomination and Remuneration Policy of Megastar Foods Limited formulated in accordance with Section 134(3)(e) and Section 178(3) of the Companies Act, 2013 read with Regulation 19 of SEBI Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force). The salient aspects covered in the Nomination and Remuneration Policy have been outlined below:

• To identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management level and recommend to the Board his / her appointment

• To formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy relating to the remuneration for the directors, key managerial personnel, Senior Management Personnel of the Company.

• To formulate the criteria for evaluation of performance of independent directors and the board of directors.

• To evaluate the performance of the Members of the Board and provide necessary report to the Board for further evaluation of the Board and to determining whether to extend or continue the term of appointment of the Independent Director, on the basis of the report of performance evaluation of Independent Directors.

• To recommend to the Board on all remuneration in whatever form, payable to the Directors, KMPs and S?nior Management.

• To develop a succession plan for the Board and to regularly review the plan.

• To assist the Board in fulfilling responsibilities.

The Nomination and Remuneration policy of Megastar Foods Limited is available on the website of the Company at the weblink http://megastarfoods.com/assets/pdf/NOMINATION- REMUNERATION-AND-BOARD-DIVERSITY-POLICY.PDF

17. NUMBER OF BOARD MEETINGS AND COMMITTEE MEETINGS

During the year under review, 11 (Eleven) Board meetings, 4 (Four) Audit Committee meetings, 2 (Two) Stakeholders Relationship Committee meetings, 2 (Two) Nomination & Remuneration Committee meetings, and 2 (Two) Corporate Social Responsibility Committee meetings were convened and held. Details and attendance of such Board & Committees meetings are mentioned in Corporate Governance Report.

Pursuant to clause VII (1) of Schedule IV of the Companies Act, 2013, a separate meeting of the Independent Director of the company was also held.

18. PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

As the ultimate responsibility for sound governance and prudential management of a Company lies with its Board, its imperative that the Board remains continually energized, proactive and effective.

The Board evaluated the effectiveness of its functioning and that of the Committees and of individual Directors by seeking their inputs on various aspects of Board/Committee Governance.

The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in the long-term strategic planning and the fulfilment of Directors' obligations and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee meetings.

The Companies Act, 2013, not only mandates Board and Director Evaluation, but also requires the evaluation to be formal, regular and transparent. Subsequently, SEBI Listing Regulations has also contained the provisions regarding requirement of performance evaluation of Independent Directors by the entire Board of Directors.

The Independent Directors of the Company met separately without the presence of Non-Independent Directors and inter-alia reviewed the performance of the Members of Management, Non-Independent Directors, Board as a whole, performance of the Chairman of the Company and the Committees, after taking into consideration the views of Executive and Non-Executive Directors.

In compliance with the provisions of SEBI Listing Regulations, the Board of Directors has also carried out evaluation of every Independent Director's performance during the financial year.

19. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions under Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, the Directors confirm: -

• In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

• Such accounting policies have been selected and applied consistently and the Directors have made 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 as at 31 March 2024 and of the Profit and Loss of the Company for the year ended on that date;

• Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

• The annual accounts of the Company have been prepared on a going concern basis;

• Internal Financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

• Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

20. ENERGY CONSERVATION, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to provisions of Section 134 (3) (m) of the Companies Act, 2013 read with rules framed thereunder, the details of activities in the nature of Energy Conservation, Research and Development, Technology Absorption and Foreign Exchange Earnings and Outgo is attached as ‘Annexure-2' and forms part of this report.

21. PARTICULARS OF REMUNERATION OF DIRECTORS AND KMPs

A statement containing the details of the Remuneration of Directors and KMPs as required under Section 197(12) of the Companies Act, 2013 read with rules framed thereunder, is attached as ‘Annexure-3.' and forms part of this Report.

22. ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https://www.megastarfoods.com/annual-return

23. AUDITORS AND AUDITORS' REPORT

I.) STATUTORY AUDITORS

In terms of the provisions of Section 139 of the Companies Act, 2013, M/s. Nitin Mahajan & Associates Chartered Accountants (Firm Registration No. 019837N), were appointed as the Statutory Auditors of the Company by the Shareholders in the 12th AGM of the Company held on September 27, 2023 for a further term of 5 (Five) years from the Financial Year 2023-24 to Financial Year 2027-28. The requirement to place the matter relating to ratification of appointment by members at every AGM has been done away by the Companies (Amendment) Act, 2017 w.e.f. 07 May 2018. The notes on Financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. During the financial year, there have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of Companies Act, 2013 read with rules framed thereunder, either to the Company or to the Central Government.

II. ) SECRETARIAL AUDITORS

As required under Section 204(1) of the Companies Act, 2013 read with rules framed thereunder, the Company has appointed Mr. Kanwaljit Singh Thanewal, Practicing Company Secretary (M. No. 5901 & C.P. No. 5870), to conduct the Secretarial Audit for the financial year 2023-24.

The Secretarial Audit Report submitted by Mr. Kanwaljit Singh Thanewal in the prescribed form MR- 3, together with the Management Replies to the comments made by the Secretarial Auditor, is attached as ‘Annexure - 4' and forms part of this Report.

III. ) COST AUDIT

As per the provisions of Section 148 read with the Cost Audit Rules, the provisions regarding Cost Audit is not applicable to the Company.

24. CORPORATE GOVERNAN CE

At Megastar Foods Limited, it is our firm belief that the quintessence of Good Corporate Governance lies in the phrase ‘Your Company'. It is ‘Your Company' because it belongs to you-the Stakeholders. The Chairman and Directors are ‘Your' fiduciaries and trustees.

Your Company has evolved and followed the corporate governance guidelines and best practices sincerely to not just boost long-term Shareholder value, but to also respect minority rights. We consider it our inherent responsibility to disclose timely and accurate information regarding our financials and performance, as well as the leadership and governance of the Company.

Your Company is devoted to benchmarking itself with global standards for providing Good Corporate Governance. The Companies Act, 2013 and SEBI Listing Regulations have strengthened the governance regime in the Country. Your Company is in compliance with the governance requirements provided under SEBI Listing Regulations.

The Board has also evolved and implemented a Code of Conduct based on the principles of Good Corporate Governance and best management practices being followed globally. The Code is available on the Company's website at https://www.megastarfoods.com/

A sep?rate section titled ‘Report on Corporate Governance' has been included in this Annual Report along with Secretarial Auditors Certif?cate on Corporate Governance.

25. INTERNAL FINANCIAL CONTROL SYSTEM

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate and commensurate with the size, scale and complexity of its operation. The internal controls are tested for adequacy, efficiency and effectiveness through audits by the in- house internal audit department and the observations, corrective and preventative actions are reviewed by the management and Audit committee of the Board of Directors.

During financial year under review, no material or serious observation has been received from the Internal Auditors of the Company for inadequacy or ineffectiveness of such controls.

26. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Companies Act, 2013, re-emphasizes the need for an effective Internal Financial Control System in the Company. The system should be designed and operated effectively. Rule 8(5)(viii) of Companies (Accounts) Rules, 2014, requires the information regarding adequacy of Internal Financial Controls with reference to the financial statements to be disclosed in the Board Report.

To ensure effective Internal Financial Controls, the Company has laid down the following measures:

• The Company's books of accounts are maintained in ERP and transactions are executed through ERP setups to ensure correctness/effectiveness of all transactions, integrity and reliability of reporting.

• The Company is having in place a Risk Management framework.

• The Company is having in place a well-defined Vigil Mechanism (Whistle Blower Policy).

• Compliance of Secretarial functions is ensured by way of Secretarial Audit.

• Compliance relating to Internal Control System of the Company is ensured by way of Internal Audit.

27. RISK MANAGEMENT

The primary objective of risk management is to protect the Company against risks to the value of the business, its capital and its continuity. In order to achieve the objective and for better governance, the Company has adopted a formal Risk Management Policy and also posted on the Company website: https://www.megastarfoods.com/ . The Policy sets out key risk areas - financial risks (including risk to assets), legislative and regulatory risks, environmental risks (including natural disasters), operational risks (markets, production, technology, etc.), risks relating to employment and manpower, and individual large transactional risks.

The Chairman & Managing Director of the company identifies and proposes action in respect of all risks through his management team as and when any are perceived or foreseen or inherent in operations; analyses these, and then recommend it to Audit Committee for its review and further mitigation measures.

28. CREDIT RATING

The Company has not been subject to credit rating during the year under review.

29. DISCLOSURE ON DEPOSITS UNDER CHAPTER V

The Company has neither accepted nor renewed any Deposits during the Financial Year 2023-24 in terms of Chapter V of the Companies Act, 2013. Further, the Company is not having any Unpaid or Unclaimed Deposits at the end of the Financial Year.

30. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

Your Company has zero tolerance policy in case of sexual harassment at workplace and is committed to provide a healthy environment to each and every employee of the Company. The Company has in place ‘Policy for Prevention and Redressal of Sexual Harassment' in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (hereinafter referred "as the said act") and Rules made there under. As per the provisions of Section 4 of the said Act, the Board of Directors has constituted the Internal Complaints Committee (‘ICC') at the Registered Office, Works to deal with the Complaints received by the Company pertaining to gender discrimination and sexual harassment at workplace.

Further, as per the provisions of Section 21 & 22 of the said Act, the Report on the details of the number of cases filed under Sexual Harassment and their disposal for the financial year under review, is as under:-

31. DEPOSITORY SYSTEMS

The Company's shares are compulsorily tradable in electronic form. As on 31 March 2024, 100% of the Company's Paid-up Equity Share Capital are in dematerialized form with both the Depositories.

The Company has established connectivity with both Depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

The Company has appointed M/s Skyline Financial Services Private Limited, its Registrar and Share Transfer Agent.

32. PARTICULARS OF LOAN(S), GUARANTEE(S) OR INVESTMENT(S) UNDER SECTION 186 OF THE COMPANIES ACT, 2013

As on March 31, 2024, the company has not made any investments. There were no instances of guarantee given or securities provided for the loans availed by any other party. During the period under review, the company has extended loan to its wholly owned subsidiary company M/s Megapacific Ventures Private Limited with the requisite approvals and at the prevailing interest rates for its regular business operations in ordinary course of its business and the same has been repaid by M/s Megapacific Ventures Private Limited.

The details of the loan given and the amounts outstanding thereof have been provided in the Financial Statements which forms part of the Annual Report.

33. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188(1) OF THE COMPANIES ACT, 2013

In line with the requirements of the Companies Act, 2013 and amendment to the Listing Regulations, your Company has formulated a revised ‘Policy on Related Party Transactions', which is also available on the Company's website at https://www.megastarfoods.com/policies-codes-related- documents . The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. All transactions entered into with related parties as defined under the Companies Act, 2013 read with Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, during the year, were in the ordinary course of business and at arm's-length price.

There was no materially significant related party transaction entered into by the Company with its promoters, directors or key managerial personnel which may have potential conflict with the interest of the Company at large or which warrants the approval of the members.

Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013, for all the transactions covered therein, in Form AOC-2 is for the financial year ended 31 March, 2024 forms part of this report enclosed as Annexure-5.

Details of related party transactions entered into by the Company, in terms of IND AS-24 are disclosed in the financial statements for the financial year ended 31^st March, 2024. All related party transactions were placed before the audit committee for prior approval and review on a quarterly basis and prior omnibus approval of the audit committee was obtained for the transactions which were of a repetitive nature.

34. CORPORATE SOCIAL RESPONSIBILITY

During the financial year, the provision of Section 135 of the Companies Act, 2013 regarding Corporate Social Responsibility, were applicable to the company. Keeping with Company's core value of Good Corporate Citizenship, your Company is committed to its social responsibility by taking various initiatives that would benefit society. In line with the Company's CSR Policy and CSR thrust areas, your Company's CSR efforts continue to be directed towards education, including vocational skills training, public health, environment and community welfare.

The company has constituted a CSR Committee with the following composition:

@Mr. Amit Mittal ceased to be a member & chairman of the CSR Committee w.e.f. 03.04.2023.

@ Mr. Prabhat Kumar ceased to be a member of the CSR Committee w.e.f. 03.04.2023.

@Mrs. Savita Bansal induced as the Chairperson of the CSR Committee w.e.f. 03.04.2023 @Mr. Rajiv Kathuria induced as a member of the CSR Committee w.e.f. 03.04.2023.

During the year, the Board of Directors, with the recommendation of the CSR Committee approved and adopted an Annual Action Plan on CSR activities. The CSR Policy and other relevant details of CSR Activities carried out during the Financial year are available on the website of the company https://www.megastarfoods.com/.

The Annual Report on CSR activities is annexed as "Annexure-6" to this report.

35. DISCLOSURE ON VIGIL MECHANISM (WHISTLE BLOWER POLICY)

The Company has in place a Vigil Mechanism/ Whistle Blower Policy, in terms of provisions of Section 178(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its powers) Rules, 2014 which was approved by the Board of Directors. The Company's personnel have direct access to the chairman of the Audit Committee to report concerns about unethical behaviour (actual or suspected), frauds and other grievances. No personnel of the Company have been denied access to the Audit Committee. Adequate safeguards are being provided against victimization of whistle blowers availing of such mechanism.

Whistle Blower Policy of the Company is posted on the website of the Company at the weblink: https://www.megastarfoods.com/whistle-blower

36. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERNS STATUS AND COMPANY'S OPERATIONS IN FUTURE

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company's operations in future.

37. SECRETARIAL STAND ARDS

The Company has complied with the applicable Secretarial Standards - 1 and Secretarial Standards - 2 issued by the Institute of Company Secretaries of India and approved by the Central Government.

38. COMPLIANCE WITH THE SEBI (LISTING OBLIGATIONS & DISCLOSURE REQUIREMENTS) REGULATIONS 2015

The company's equity shares were listed on the BSE Limited and National Stock Exchange of India Limited (NSE) which has nationwide trading terminals. The company has paid the Annual Listing Fees to BSE and NSE for the Financial Year 2024-25. All compliances with respect to the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 have been duly made by the company.

39. CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

In accordance with the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015, Megastar Foods Limited is having the Code of Conduct to Regulate, Monitor and Report Trading by Insiders. The said Code is available on the website of the Company at https://www.megastarfoods.com/policies-codes-related-documents .

40. INDUSTRIAL RELATIONS

Industrial relations and work atmosphere remained cordial throughout the year with sustained communication and engagement with workforce through various forums.

41. SAFETY. HEALTH AND ENVIRONMENT

The Company continues to demonstrate strong commitment to safety, health and environment which have been adopted as core organizational values. The Company assures safety and facilities in accordance with statutory and regulatory requirements. Employees are continuously made aware of hazards / risks associated with their job and their knowledge and skills are updated through requisite training to meet any emergency. Medical and occupational check-ups of employees and eco-friendly activities are promoted. The Company does not produce any kind of hazardous waste.

42. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Act and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Annual Audited Consolidated Financial Statements for the Financial year ended 31 March 2024, together with Report of Auditors' thereon, forms part of this annual report.

43. MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of the operations, performance and future outlook, major events occurred during the year as well as state of company's affairs is given in the Management Discussion and Analysis, which forms part of this report.

44. ANNUAL SECRETARIAL COMPLIANCE REPORT

Mr. Kanwaljit Singh Thanewal, Practicing Company Secretary, have issued Secretarial Compliance Report for the year ended 31^st March 2024 confirming compliance of SEBI Regulations / guidelines / circulars issued thereunder and applicable to the Company.

45. BUSINESS RESPONSIBILITY REPORT

Regulation 34(2) (f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 was not applicable to the Company during the year under review, based on the market capitalisation.

46. TRANSFER OF UNCLAIMED DIVIDEND TO IEPF

Pursuant to the provisions of Section 124 of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 read with the relevant circulars and amendments thereto ('IEPF Rules'), the amount of dividend remaining unpaid or unclaimed for a period of seven years from the due date is required to be transferred to the Investor Education and Protection Fund (IEPF), constituted by the Central Government.

During the FY 2023-24, there is no such amount with respect to Unclaimed Dividend, which is required to be transferred to Investor Education and Protection Fund (IEPF).

47. TRANSFER OF SHARES TO IEPF

Pursuant to the provisions of IEPF Rules, all shares in respect of which dividend has not been paid or claimed for seven consecutive years shall be transferred by the Company to the designated Demat Account of the IEPF Authority ('IEPF Account').

During FY 2023-24, there were no shares which are required to be transferred to IEPF Account.

48. GENERAL DISCLOSURE During the year under review: -

• The Company has not made any provisions of money or has not provided any loan to the employees of the Company for purchase of shares of the Company pursuant to the provisions of Section 67 of Companies Act, 2013 and Rules made thereunder.

• The Company has not bought back its shares, pursuant to the provisions of Section 68 of Companies Act, 2013 and Rules made thereunder.

• The company has made timely payments to micro and small enterprises and payments to micro and small enterprise suppliers does not exceed forty-five days from the date of acceptance or the date of deemed acceptance of the goods or services as per the provisions of section 9 of the Micro, Small and Medium Enterprises Development Act, 2006.

• The company is not paying any commission to its directors. Only the Non-Executive Independent Directors are entitled to the payment of setting fees for attending the meetings.

• There was no revision of financial statements and Board Report of the company during the year under review.

• During the year, the Company has not made any application and there are no proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016).

• There were no instances of any one-time settlement executed between the company or any of its lenders, henee there is no requirement of disclosing the difference between amount of valuation done at the time of one-time settlement and the valuation done while taking loans from banks and Financial institutions along with the reasons thereof.

49. ACKNOWLEDGEMENT

Employee relations throughout the Company were harmonious. The Board wishes to place on record its appreciation to all employees in the Company, for their sustained efforts and immense contribution to the good levels of performance and growth that the Company has achieved during the financial year under review.

Your directors also place on record their sincere thanks and appreciation for the continuing support and assistance received from the financial institutions, banks, Government as well as non- government authorities, customers, vendors, and members during the financial year under review.