TO THE MEMBERS
MIVEN MACHINE TOOLS LIMITED
The Directors present the Thirty Second Annual Report and the Audited FinancialStatements of Miven Machine Tools Limited ("Company") for the Financial Year("FY") ended March 31 2017.
1. FINANCIAL SUMMARY / HIGHLIGHTS
|FINANCIAL RESULTS || ||(Rs. in lakhs) |
| ||Financial Year ended 31-03-2017 ||Financial Year ended 31-03-2016 |
|Revenue from operations ||280.25 ||372.34 |
|Other income ||61.06 ||13.81 |
|Total income ||341.31 ||386.15 |
|Profit (Loss) Before ||(84.57) ||(84.42) |
|Interest & Depreciation || || |
|Interest ||161.03 ||153.06 |
|Depreciation ||15.76 ||17.24 |
|Net Profit / (Loss) ||(261.36) ||(254.72) |
|Loss brought forward ||(1523.24) ||(1268.52) |
|Deficit carried to ||(1784.60) ||(1523.24) |
|Balance Sheet || || |
2. OPERATIONS AND STATUS OF COMPANY'S AFFAIRS
During the year under review your company achieved a revenue from operations ofRs.280.25 lakhs as Rs 372.34 lakhs during the previous year. Company incurred a loss aftertax of Rs 261.36 lakhs as against loss of Rs.254.72 lakhs during the previous financialyear. The machine tools industry has been passing through a prolonged period of recessionand as a result the Company has been incurring losses year after year.
In view of the losses incurred by the Company in FY 2016-17 and in the absence ofdistributable profits the Board of Directors do not recommend any dividend for the year.
4. AMOUNT PROPOSED TO BE CARRIED TO RESERVE:
In view of the losses suffered by the Company during the FY 2016-17 the question ofcarrying any amount to reserve does not arise.
5. Lifting of restrictions on the company promoters and directors by SEBI:
Upon successful completion of the Offer for Sale by the promoters of the Company onOctober 1 2015 the level of public share holding in the company had gone up from 13.81 %to 25 % and thus the Company became compliant with the Minimum Public Shareholding normsas stipulated under Rule 19(2)(b) and Rule 19 A of the Securities Contract (Regulation)Rules 1957 read with Clause 40 A of the erstwhile listing agreement. Company had apprisedthe Securities and Exchange Board of India ("SEBI") and had requested SEBI tolift the restrictions imposed in its order dated June 4 2013 on the promoters andDirectors of the Company. SEBI had processed the application and provided an opportunityfor a personal hearing on January 20 2016. Representatives engaged by the companyappeared before SEBI and highlighted the compliance status. On April 6 2016 SEBI passedfavourable orders acknowledging the compliance status of Minimum Public Shareholdingnorms and revoked the restrictions imposed on the Company promoters and Directors videits earlier order dated
June 4 2013. However since there was a delay in compliance with the minimum publicshareholding
norms SEBI has informed that it is going to start
6. SALE OF LAND NOT EXCEEDING 14 ACRES
After evaluating the feasibility of various of options and with a view to focus andimprove efficiency and reduce the overall debt burden the Board of Directors of thecompany during the previous financial year 2015-16 had decided to sell assign transferand convey the land to the extent of not required for future operations. The Shareholdersof the company had approved the sale of land by means of special resolution through thepostal ballot pursuant to the provisions of Section 180(1)(a) of the Companies Act 2013as under: i) Not exceeding 6.5 acres on March 28 2016; and ii) Not exceeding 7.5 acres onSeptember 19 2016 The Board of Directors will accordingly initiate further steps foroperationalising the approval granted by the shareholders of the company and dispose ofthe 14 acres of land and utilize the proceeds for reducing the debt burden and alsomeeting the working capital requirements and also the day to day expenses.
7. RISK MANAGEMENT
The Company has developed and implemented a Risk Management Policy for the Companyincluding identification therein of elements of risk which in the opinion of the Boardmay threaten the existence of the Company. Company has been making constant efforts tocontinue its status as a going concern.
8. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Directors of the company have laid down internal financial controls in terms of thepolicies and procedures for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information. Such internalfinancial controls are adequate with the size and operations of the Company and wereoperating efficiently.
9. DISCLOSURE AS PERTHESEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has no tolerance for Sexual Harassment at Workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at Workplace("Policy"). The Company has not received any complaints under the Prevention ofSexual Harassment Act for the FY 2016-17.
The Company has established a Vigil Mechanism ("Mechanism") by way of aWhistle Blower Policy for reporting of genuine concerns and/or grievances. The saidMechanism provides adequate safeguards against victimization of persons who use themechanism and also provides direct access to the
Chairman of the Audit Committee in appropriate or
The Company has not accepted any deposits from the public at the beginning of the yearnor has it accepted any public deposits during the year under review.
12.PARTICULARS OF LOANS GUARANTEES AND
During the year under review the Company has not given any loans or guarantees orprovided security in connection with any loan or acquired securities of any other bodycorporate in terms of Section 186 of the Companies Act 2013 ("Act").
In accordance with the provisions of Companies Act 2013 and the Articles ofAssociation of the Company Mrs Vrinda Mantri is liable to retire by rotation at theensuing Annual General Meeting and being eligible offers herself for reappointment. Theterm of office of Mr. Sanjay Baljekar and Mr Jitendra B Divgi the independent Directorsis going to conclude at the ensuing Annual General Meeting upon completion of 3 yearsand it is proposed to reappoint them as Independent Directors for a term of five years atthe ensuing Annual General Meeting. The company has been immensely benefitted by the richexperience and guidance extended by Mr Vikram R Sirur as the Director of the Company inthe management and policy making process throughout his association as the Director of theCompany. In this context the Nomination and Remuneration Committee at its meeting held onApril 14 2017 has recommended the appointment of Mr Vikram R Sirur as the ManagingDirector of the company for a period of 3 years Considering his contribution to theCompany the Board of Directors has appointed Mr Vikram R Sirur as the Managing Directorof the Company for a period of 3 years with effect from April 20 2017 subject to theapproval of the shareholders through a special resolution at the ensuring Annual GeneralMeeting. Accordingly enabling Special resolution in this regard has been placed forconsideration and approval of the shareholders at the ensuring Annual General Meeting.
14.NUMBER OF MEETINGS OF THE BOARD
During the financial year 2016-17 Company held 5 meetings of the Board of Directors.Details of attendance by the Directors at the Board meetings Meeting held during thefinancial year and the previous Annual General Meeting held on September 29 2016 arefurnished below:
|Name of Director ||No of Board Meetings held ||No of Board meetings attended ||Attendance at the last AGM Yes/No |
|1 Mr Vikram R Sirur ||5 ||5 ||No |
|2 Mr Shyam M Sirur ||5 ||5 ||No |
|3 Mr Sanjay B Baljekar ||5 ||3 ||No |
|4 Mr Jitendra B Divgi ||5 ||4 ||No |
|5 Mrs. Vrinda Mantri ||5 ||3 ||No |
15.DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149 OFCOMPANIES ACT 2013
As required under the provisions of Section 149(6) of the Companies Act 2013 Companyhas received declarations from the independent Directors viz. Mr Sanjay Baljekar and MrJitendra B Divgi stating that they meet the criteria of independence. In the opinion ofthe Board Mr Sanjay Baljekar and Mr Jitendra B Divgi fulfilled the conditions specifiedin the Act and rules for appointment as Independent Directors and they are independent ofmanagement of the Company.
16.EVALUATION OF THE BOARD ITS COMMITTEES
AND INDIVIDUAL DIRECTORS
The Board has carried out an evaluation of the performance of individual directorsCommittees constituted by the Board and the Board as a whole during the financial yearunder report through a process of personal discussions followed by a review to determineand enhance the effectiveness of the individual Directors Committees and the Board.
17.POLICY ON APPOINTMENT OF DIRECTORS AND
REMUNERATION POLICY OF THE COMPANY
The Nomination and Remuneration Committee ("NRC") recommends thereconstitution of the Board as and when required. It also recommends to the Board theappointment of Directors having good personal and professional reputation and conductsreference checks and due diligence of all Directors before recommending them to the Board.
In accordance with the provisions of Section 178 of the Act the Board of Directorshave adopted a Policy on Board Diversity and Director Attributes and the RemunerationPolicy. The Policy on Board Diversity and Director Attributes has been framed to encouragediversity of thought experience knowledge perspective age and gender in the Board.
18.KEY MANAGERIAL PERSONNEL
The following persons were appointed as Key
Managerial Personnel of the Company:
1) Mr. S G Gadagkar - Chief Financial Officer
2) Mr. Vikram Sirur as the Managing Director with effect from April 20 2017
3) Mrs. Namrata Singh as Company Secretary with effect from April 20 2017
19.DIRECTORS' RESPONSIBILITY STATEMENT
Based on the internal financial controls and compliance systems of the Company workperformed by the internal statutory and secretarial auditors and the reviews performed byManagement and the relevant Board Committees including the Audit Committee the Board isof the opinion that the Company's internal financial controls were adequate and effectiveduring FY 2016-17.
Accordingly pursuant to the provisions of Section 134(3) and 134(5) of the Act theBoard of Directors to the best of their knowledge and ability confirm that: a) in thepreparation of the annual accounts the applicable accounting standards have been followedand that there are no material departures; b) they have selected such accounting policiesand applied them consistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the company at theend of the financial year and of the loss of the Company for that period; c) they havetaken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; d) they have prepared theannual accounts on a on going concern basis; e) they have laid down internal financialcontrols to be followed by the company and that such internal financial controls wereadequate and operating effectively; and f) they have devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively.
20.EXEMPTIONS TO SMALL COMPANIES FROM
Since the paid up capital of the company is less than Rs 10 crore and the networth isless than Rs 25 crore the Company is exempted from the provisions of Clause 49 of theerstwhile Listing Agreement upto November 30 2015 and from the provisions of corporategovernance as specified in Regulations 17 to 28 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 which came into force from December 1 2015. Inview of the same details relating to compliance with the provisions of CorporateGovernance have not been furnished in this Report.
21.Board and its Committees
Five Board Meetings were held during FY 2016-17.
b. Audit Committee
The Audit Committee of Directors comprising Mr. Sanjay Baljekar Mr Jitendra B Divgiand Mr Shyam Sirur have reviewed the financial statements of the Company for the financialyear 2016-17 and the report of the auditors thereon before they were submitted to theBoard for approval. The composition of the Committee is in line with the provisions ofSection 177 of the Act.
c. Nomination and Remuneration Committee ("NRC")
The NRC comprises Mr. Sanjay Baljekar Mr Jitendra B Divgi and Mr Shyam Sirur. Thecomposition of the Committee is in line with the provisions of Section 178 of the Act.
d. Corporate Social Responsibility Committee As regards the applicable provisionsof the Act and the Rules framed there under the Company is not required to constitute aCorporate Social Responsibility Committee. Sitting fees were paid to Director/Member forattending any Board/ Committee Meeting held during the year under review. No commissionwas paid to any Director for FY 2016-17.
The term of office of M/s B K Ramadhyani & Co LLP as the statutory auditors wouldbe upto the conclusion of the 32nd Annual General Meeting pursuant to the provisions ofSection of the Companies Act2013 read with Companies (Audit and Auditors) Rules 2014.The Audit Committee has recommended appointment of M/s Rao Associates (Firm RegistrationNo 003080S) as the statutory auditors of the Company for a period of 5 years. Company hasreceived a letter from the said auditors to the effect that their appointment if madewould be in accordance with Section 139 of the Act and that they are not disqualified forsuch appointment within the meaning of Section 141 of the Act.
Accordingly it is As per the provisions of the Act read with the Companies (Audit andAuditors) Rules 2014 it is proposed to Appoint. M/s Rao Associates (Firm Registration No003080S) Chartered Accountants as the Statutory Auditors of the Company for a period of 5years at the forthcoming AGM till the conclusion of the 37th AGM of the Company subjectto ratification by the Shareholders at every Annual General Meeting.
23.ACCOUNTING STANDARDS FOLLOWED BY THE
The Financial Statements of the Company have been prepared in accordance with theGenerally Accepted Accounting Principles in India (Indian
GAAP) to comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014.
24.EXPLANATION ON STATUTORY AUDITORS' REPORT
i) Qualified opinion:
Attention of the members are invited to note 21(iii) of the financial statementswherein the Auditors have relied on the representation of the Company that the amount duefrom a customer of Rs.1457586/- is good of recovery. Pending completion of legalproceedings and in view of uncertainties involved we are unable to form any opinion onthe matter and consequential effects on the financial statements are not ascertainable.
The Company has considered an amount of Rs.1457586 due from a customer as good ofrecovery in respect of which the customer has made a counter claim of Rs 7348629.However the said counter claim has been dismissed by Additional District JudgeVijaywada. The customer has moved to High Court of Telangana and Andhra Pradesh. TheCompany has been advised by its legal counsel that the counter claim of the party is notsustainable in law. The Company is in discussion with legal counsel for initiating actionfor recovering all the dues The Company is confident of recovering the dues and that theclaim of the customer will not stand.
ii) Matters of Emphasis:
Without qualifying their opinion the auditors have invited the attention of themembers to note 32 of the financial statements regarding reasons for preparing financialstatements of the Company on going concern basis even though its net worth has beencompletely eroded. The appropriateness of the said basis is inter alia dependent on theCompany's ability to augment its working capital execute sale orders and the support ofthe Company's bankers and holding company. We have also relied on the representation ofthe Company in this respect.
Considering the business plans made by the Company orders on hand reorganisation ofproduct mix and with continued support from the Bankers and the Holding Company theCompany expects to recover from the losses. Considering all the facts including renewalof bank working capital limits and the company's decision to sell surplus land dulyapproved by the shareholders to augment the working capital requirements and reduce debtsthe assumption of 'Going Concern' is not vitiated even though the net worth is eroded.
25.SECRETARIAL AUDITORS AND SECRETARIAL
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors has appointedMr. Umesh P Maskeri Practicing Company Secretary to undertake the Secretarial Audit ofthe Company. The Secretarial Audit Report dated May 29 2017 in Form MR-3 received fromthe said Secretarial auditors is annexed to this report: Explanation to thequalifications reservations and adverse remarks or disclaimers made by Mr.Umesh PMaskeri Practicing Company Secretary in his Report dated May 29 2017 is furnished below:
(1) Appointment of Company Secretary:
Company has been passing through difficult financial conditions as the company has beenincurring losses year after year. However Company has initiated necessary steps toappoint Company Secretary. Company had published advertisement in Deccan Herald on April20 2016 inviting applications from suitable candidates. Since there was no responseCompany published the advertisements again in Hosa Digantha on February 10 2017 and inDeccan Herald on March 24 2017. Company has recently appointed Mrs. Namrata Subhash Singhas the Company Secretary of the company with effect from 20th April 2017.
(2) Appointment of Whole Time Managerial
At the 28th Annual General Meeting of the company held on September 13 2013 theshareholders of the Company had re-appointed Mr Vikram R Sirur as the Executive Chairmanof the Company and had also fixed his remuneration for a period of three years and hisoffice was liable to retire by rotation. Further at the 29th Annual General Meeting heldon September 27 2014 the shareholders of the Company had re-appointed Mr Vikram R Siruras the Director retiring by rotation. Mr Vikram Sirur has not drawn any remuneration forthe last two financial years owing to the difficult financial conditions of the Company.His change of designation as Non Executive Director was taken note by the Board ofDirectors of the company at its meeting held on April 10 2017. Considering hiscontribution to the Company and in terms of the recommendation of the Nomination andRemuneration Committee the Board of Directors has decided to appoint Mr Vikram R Sirur asthe Managing Director of the Company for a period of 3 years with effect from April 202017 subject to the approval by means of a special resolution of the shareholders at theensuring General Meeting. Accordingly enabling Special resolution in this regard has beenplaced for consideration and approval of the shareholders at the ensuring 32nd AnnualGeneral Meeting.
(3) Delay in publication in newspapers
Company has been regular in arranging publication of the matters in the newspapers.However in certain instances although the text of publication in newspapers was releasedin time the advertisement in newspapers was not published owing to the delay in releasingpayment for earlier bills due to constraints of funds in spite of best efforts. Howeverthe required information was filed with BSE and BSE had displayed the information on theirwebsite promptly. In addition to this the information was also displayed on the websiteof the company. Hence the slight delay in publication in newspapers has not adverselyaffected the interest of the public shareholders.
(4) Joint Certificate
Company is in the process of submitting the joint certificate confirming the compliancewith the provisions of Regulation 7(3) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 to BSE on July 26 2017 pertaining to the half year endedSeptember 30 2016 which was missed out inadvertently. However the company has promptlysubmitted the said certificate to BSE for the previous half year ended March 31 2016 andsubsequent half year ended March 31 2017 within the timelines stipulated by BSE in thisregard.
25.INFORMATION ON MATERIAL CHANGES AND COMMITMENTS
Company has appointed Mr Vikram R Sirur as the Managing Director for a period of 3years with effect from April 20 2017 and Mrs Namrata Singh as the Company Secretary witheffect from April 20 2017. Except these appointments no other material changes orcommitments affecting the financial position of the company have occurred between March31 2017 to which the financial statements relate and May 29 2017 being the date of thisreport.
26. RELATED PARTY TRANSACTIONS
During the year the Company has not entered into any transactions with Related Partieswhich are not in its ordinary course of business or not on an arm's length basis and whichrequire disclosure in this Report in terms of the provisions of Section 188(1) of the Act.
However the details of material contracts or arrangements or transactions with RelatedParties on an arm's length basis with respect to transactions covered under Section 188(1)of the Act are attached to this report in the prescribed Form No. AOC-2. Further detailsof Related Party Transactions as required to be disclosed by Accounting Standard - 18 on"Related Party Disclosures" specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014 are furnished in the Notes to theFinancial Statements.
27. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS
During the year under review no significant or material orders were passed by theregulators courts or tribunal impacting the going concern status and company's operationsin future.
28.DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 134(3)(a)
The auditors of the company have not reported any fraud under sub- section (12) ofSection 143 of the Companies Act 2013 whether reportable to the Central Government orotherwise and hence no details are furnished in this regard.
29.CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS & OUTGO
Information required Rules 8 (3)(A) and (B) of the Companies (Accounts) Rules 2014concerning conservation of energy technology absorption and foreign exchange outgo havebeen furnished in Annexure to this report.
30. CHANGE IN THE NATURE OF BUSINESS:
There was no change in the nature of business during the year.
31. DETAILS PERTAINING TO REMUNERATION AND OTHER DETAILS AS REQUIRED UNDER SECTION197(12) OF THE ACT READ WITH RULE
5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
The information stipulated under Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is furnished below:
i) The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2016-17: Not applicable as the company hasbeen incurring losses and further no remuneration was paid to any Director.
ii) The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary - if any in the financial year 2016-17:
There was no increase in remuneration of each Director CFO CS & CEO in thefinancial 2016-17.
iii) The percentage increase in the median remuneration of employees in the financialyear 2016-17:
There was no increase in remuneration of employees during the year.
iv) The number of permanent employees on the roles of the Company: 20
v) The explanation on the relationship between average increase in remuneration andCompany performance:
There was no increase in remuneration and since the company is under loss explanationis not necessary.
vi) Comparison of the remuneration of the key managerial personnel against theperformance of the company:
Since the Company is making loss no comparison is possible.
vii) The key parameters for any variable component of remuneration availed by thedirectors:
viii)The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year:
ix) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the past financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
There was no increase in the salaries of employees other than managerial personnel andalso managerial personnel hence no comparison is possible.
x) During the year under review there was no employee who was in receipt of aremuneration of Rs.500000/- per month or Rs.6000000/- per annum and hence theparticulars of the employees as required in terms of Sub Rule 2 of Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 does not attract.
xi) Variations in the market capitalization of the company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the company in comparisonto the rate at which the company came out with the last public offer in case of listedcompanies.
Until the last financial year 2014-15 there was no trading in the shares of thecompany on the BSE Limited after April 05 2002. During the year 2015-16 transactionshave been effected in the shares of the company on the BSE limited and the last tradedprice on March 31 2016 was Rs 6.96 . During the financial year 2016-17 transactions havebeen effected in the shares of the company. The market capitalization of the company as onMarch 31 2017 was Rs 324.98 lakhs as against Rs 209.04 lakhs on March 31 2016. Since thecompany has been incurring losses the computation of price earnings ratio is notapplicable.
32. EXTRACT OF THE ANNUAL RETURN
An extract of the Annual Return in the prescribed Form MGT-9 is attached as Annexure Aand forms part of this Report.
33.MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management discussion and analysis report as required under Para (B) of Schedule V readwith
Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is attached in Annexure B and forms part of this Report.
34.DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/UNCLAIMED SUSPENSE ACCOUNT
The company does not have any shares in the demat suspense account or unclaimedsuspense account and hence the question of making any disclosure in this regard does notarise.
The Directors place on record their appreciation of the continuing support of thestakeholders of the Company. The Board also records its appreciation of the servicesrendered by the management of the Company.
On behalf of the Board of Directors For Miven Machine Tools Limited
|Shyam M Sirur ||Vikram R Sirur |
|Director ||Managing Director |
|Date: May 29 2017 |
|Registered Office: |
|Tarihal Industrial Area |
|Tarihal Hubli |