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MRO-TEK Realty Ltd.

BSE: 532376 Sector: Consumer
NSE: MRO-TEK ISIN Code: INE398B01018
BSE 00:00 | 17 Aug 28.70 1.15
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27.30

NSE 00:00 | 17 Aug 28.50 1.15
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OPEN 28.90
PREVIOUS CLOSE 27.55
VOLUME 10370
52-Week high 69.00
52-Week low 18.50
P/E 11.08
Mkt Cap.(Rs cr) 54
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 28.90
CLOSE 27.55
VOLUME 10370
52-Week high 69.00
52-Week low 18.50
P/E 11.08
Mkt Cap.(Rs cr) 54
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

MRO-TEK Realty Ltd. (MRO-TEK) - Director Report

Company director report

To

THE MEMBERS OF MRO-TEK REALTY LIMITED

Your Board of Directors has pleasure in presenting the 33rd

Annual Report and the Audited financial results for the year ended 31stMarch 2017 together with the Independent Auditors' Report and the Secretarial AuditReport.

1. FINANCIAL RESULTS:

Particulars 2016-17 2015-16
(Rs. in Lakhs) (Rs. in Lakhs)
Net Revenue from operations 3774.87 2928.52
Other Income 58.38 24.70
Operation Profit (Loss) before
1050.84 9.29
Interest and Depreciation
Operation Profit (Loss) before
911.85 (109.61)
Interest
Interest and other Finance Costs (210.43) (149.02)
Operation Profit (Loss) before
Taxation and Extraordinary/ 701.42 (258.63)
Exceptional items
Exceptional Items and
(68.89) (1288.97)
Extraordinary items
Profit /(Loss) before Tax 632.53 (1547.60)
Provision for Taxation (Deferred
220.55 (0.88)
Tax Adjustments)
Profit / (Loss) after Taxation 853.08 (1548.48)
Loss from Discontinuing
(23.08) (1320.90)
Operations
Profit/(Loss) for the period 830.00 (2869.38)

PERFORMANCE:

Your Company has earned profits after seven years. At the outset the Management wouldlike to convey gratitude to the

Shareholders for having trust and confidence in the Company and for being continuouslysupporting the Company.

Under the leadership of the new Management and Promoters the Company made turnaroundachieving Rs. 830 Lakhs

for the year 2016-17 as against a loss of Rs. (2869.38)

Lakhs in the previous year.

The brief review of the financials by the Directors is as follows:

The Company has earned Operating Profit of Rs. 1050.84 Lakhs before exceptionalitems / extraordinary items discontinuing operations finance cost and depreciationduring the year 2016-17 as against

Operational Profit of Rs. 9.29 Lakhs during the previous year.

As a result of restructuring measures carried out in the previous year the Companycould reduce manpower cost commensurate to the requirements of business and significantlycontrol outgo from Rs. 842 Lakhs

(previous year 2015-16) to Rs. 198.13 Lakhs (Current year 2016-17). The requiredmanpower resources are being met on need basis by hiring through external agencies.

Chairman and Managing Director of the Company infused Rs. 5.4 Crores till March 312017 as Working Capital for managing day to day operations. The Company has been repayinginterest and principal on existing loans to banks within stipulated time promptly.

The Company could realize Rs. 75 Lakhs from the discontinued operations and is in theprocess of liquidating the assets. The balance amount of Rs. 38 Lakhs is lying in thebooks pending for realization from discontinuing business assets.

During the year the Company has incurred retrenchment related expenditure of Rs. 45Lakhs as against Rs. 353.01 Lakhs during the previous year. The Company has incurred aloss of Rs. 23.08 Lakhs from discontinuing operations of Solar business segment during theyear as against Rs. 1320.90 Lakhs during the corresponding previous year.

The Company has shifted the Registered and Corporate

Offices to rented premises and incurred Rs. 23.88 Lakhs as relocation expenses apartfrom capital expenditure of Rs. 17.92 Lakhs during the year.

The Board of Directors of RAD-MRO Manufacturing Private Limited a Joint VentureCompany proposed to initiate the liquidation proceedings. The total sales turnover of theCompany increased to Rs. 3833.25 Lakhs from Rs. 2953.22 Lakhs as compared to previousyear. Details on segmental revenue and performance are furnished in Para II (g) of Note 26on ‘Additional Notes' to Accounts.

The net worth of the Company has improved to Rs. 618.01 Lakhs as at March 31 2017 asagainst Rs. (212) Lakhs as at March 31 2016. The Bruhat Bengaluru Mahanagara Palike(BBMP) has issued plan approval for the construction of building at Bellary Road Hebbal.

2. SHARE CAPITAL:

The Company has an Authorised share capital of Rs. 150000000/- (Rs. Fifteen CroresOnly) divided into 30000000 (Three crores) Equity Share of Rs. 5/- (Rs. Five only)each. During the year there were no changes in the Company's Paid-up Equity Capital and ason 31st March 2017 it is Rs. 9 34 23010/- (Rs. Nine Crores Thirty FourLakhs Twenty Three Thousand and Ten only) divided into 1 86 84602 Equity Shares of Rs.5/- (Rs. Five only) each.

During the year under review the Company has not issued shares with/withoutdifferential voting rights nor granted Stock Options nor Sweat Equity Shares.

3. CHANGE IN NATURE OF BUSINESS:

There were no changes in the nature of business during the year under review asprescribed in Rule 8(ii) of the Companies (Accounts) Rules 2014.

4. MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THECOMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:

The Members of RAD-MRO Manufacturing Private Limited a Joint Venture Company havegiven their approval for voluntary liquidation of that the Company as on 31st July 2017.

Other than above there are no material changes and commitments between the end of theFinancial Year and the Date of the Report which affect the financial position of theCompany.

5. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

There are no significant events subsequent to the date of financial statements apartfrom the matters mention about point.

6. DIVIDEND:

Your Company has registered profit for the current year after a gap of seven years. Whilstyour Directors understand the sentiments of the investors due to the losses incurredduring the past years the Company's recovery remains work in progress and much more needsto be done and as such this constrains the Board from recommending the dividend.

The Directors will strive hard to bring the Company back to dividend track as soon aspossible and the improving performance of the Company is expected to continue tofacilitate consideration of dividend in the years to come.

7. BOARD MEETINGS:

During the year five (5) meetings of the Board of Directors were held on the followingdates: 05.05.2016 28.05.2016 08.08.2016 09.11.2016 and 03.02.2017 and related detailsincluding that of the various Committees constituted by the Board are made available inthe Report of Directors on Corporate Governance forming part of the Annual report placedbefore the Members.

Committees of the Board:

Currently the Board has three Committees viz. the Audit Committee the Nomination andRemuneration Committee the Stakeholders' Relationship Committee. A detailed note on thecomposition of the Board and its Committees and other related particulars are provided inthe Report on Corporate Governance forming part of this Annual Report.

8. DIRECTORS AND KEY MANANGERIAL PERSONNEL:

Consequent upon the Open Offer and change in Management the compositions of Committeeswere reconstituted on 8th August 2016 and the information on the same are asbelow: Re-constitution of the Board of Directors:

Past Directors:

Mr. S. Narayanan Chairman and Managing Director and Mr. H. Nandi Managing DirectorMr. N. Sivaram Mr. N.K. Rajasekharan and Mr. K. Rajamani as Independent Directors.

New Directors:

Mr. Aniruddha Bhanuprasad Mehta as Chairman and Managing Director Mrs. Gauri A Mehtaas Non Independent Director Mr. S.Radhakrishnan Mr.

Sudhir Kumar Hasija and Mr. M V Sampat Kumar as Independent Directors.

Brief profile of each new Director:

1. Mr. Aniruddha Bhanuprasad Mehta – Chairman & Managing Director : (Age:55years) Mr. Aniruddha Bhanuprasad Mehta entrepreneur and a visionary leader from a familywith generations of tradition in successful businesses has been the iconic figure behindthe success of the Umiya Group. He possesses a wide range of expertise and special skillswhich is instrumental in creating a company committed to develop quality projects withpassion diligence and a burning desire to achieve excellence comparable to globalstandards.

He is a graduate from Mumbai University Mr. Aniruddha Bhanuprasad Mehta possesses keenbusiness acumen that was honed while working with his uncle who also ran a Public Limited

Company and his grandfather in import/export services business. An opportunity thatpresented itself while on a business trip established him in Bangalore.

A small up market residential project saw the birth of Umiya in the year 2000 and theGroup has gone from strength to strength since then. A few more residential projects gaveMr. Mehta the confidence to expand his horizon beyond Bangalore and the first step to hisdream was fulfilled by setting up his business in Goa in the year 2007.

2. Mrs. Gauri Aniruddha Mehta - Non Executive Non

Independent Director : (Age: 52 years)

Mrs. Gauri Aniruddha Mehta born in to a business family graduated in Arts and alandscape architect by passion having vast experience in designing.

3. Mr. Radhakrishnan Seetharaman – Independent Director : (Age:51 years)Controller (Sales Plant) Head of Shared Services; CIO at Nestl India; CharteredAccountant (FCA); Company Secretary (ACS); Mr. Radhakrishnan Seetharaman is a dynamicprofessional having vast experience in the field of Finance and

Accounts; He had worked in different positions in top Management during his entirecareer and contributed in improving efficiency cost and performance.

4. Mr. Sudhir Kumar Hasija – Independent Director: (Age: 60 years)

Mr. Sudhir Kumar Hasija a first generation entrepreneur and pioneer in the field ofelectronics and telecommunication. He is the founder of the well-known mobile brand "KARBONN" which is a Make In India success story – locally designedmanufactured and sold communications devices.

5. Mr. M V Sampath Kumar – Independent Director: (Age:72 years) Mr. M.V. SampathKumar is Bachelor of Engineering Mech. Bangalore University and Post Graduate Diplomafrom IIM-Kolkata has been a successful manager with a proven track record and is nowholding a senior position in a large organization.

He held Management consultant positions in Indonesia - commonwealth – UKPresident / Director in various companies in India Africa

Indonesia with offices in Europe USA Canada and South East Asia.

Your Management has recruited Mr. Barun Pandey a qualified Company Secretary andappointed him as Company Secretary and Compliance officer with effect from August 8 2016.

The newly constituted Board thanks Mr. S Narayanan and Mr. H Nandi who have promotedyour Company and who have been responsible for nourishing the Company for almost 30 years.Your Board places on record its appreciation for the contribution and support extended bythe outgoing Directors.

9. DECLARATIONFROMINDEPENDENTDIRECTORS ON ANNUAL BASIS:

The Company has received necessary declaration from each Independent Director of theCompany under Section 149(6) & 149(7) of the Companies Act 2013 that the IndependentDirectors of the Company meet with the criteria of Independence laid down in Section149(6) (Annexure I).

10. COMPOSITION OF THE COMMITTEE THE NOMINATIONANDREMUNERATIONCOMMITTEE

& THE STAKEHOLDERS' RELATIONSHIP COMMITTEE:

Following are the compositions of various Committees:

Up to 8.8.2016 Post 8.8.2016
i) Audit Committee:
a) Mr. K. Rajamani Mr. S. Radhakrishnan - Chairman
b) Mr. N. Sivaram Mr. Sudhir Kumar Hasija - Member
c) Mr. N K. Rajasekharan Mr. M V Sampath Kumar - Member
d) -- Mrs. Gauri A Mehta - Member
ii) Nomination and Remuneration Committee
a) Mr. K Rajamani Mr. Sudhir kumar Hasija - Chairman
b) Mr. N. Sivaram Mr. S. Radhakrishnan - Member
c) Mr. N K. Rajasekharan Mr. M V Sampath Kumar - Member
d) - Mrs. Gauri A Mehta - Member
iii) Stakeholders' Relationship Committee:
a) Mr. K Rajamani Mr. Sudhir Kumar Hasija - Chairman
b) Mr. N. Sivaram Mr. S. Radhakrishnan - Member
c) Mr. N K. Rajasekharan Mr. M V Sampath Kumar - Member
d) - Mrs. Gauri A Mehta - Member

11. VIGIL MECHANISM:

Your Company has established Whistleblower Policy for Vigil Mechanism (for Directorsand Employees to report genuine concerns) pursuant to the provisions of Section 177(9)& (10) of the Companies Act 2013 and as per Regulation 22 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 which is available on thewebsite of the Company at http://mro-tek.com/pdf/Whistle%20Blower%20Policy. pdf

12. DIRECTORS' RESPONSIBILITY STATEMENT:

In pursuance of Section 134 (5) of the Companies

Act 2013 the Directors hereby confirm that:

(a) In the preparation of the Annual Accounts the applicable Accounting Standards hadbeen followed along with proper explanation relating to material departures; (b) TheDirectors had selected such Accounting Policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitand loss of the company for that period;

(c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities; (d)The Directors had prepared the annual accounts on a going concern basis;

(e) The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and (f) The Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

13. EXTRACT OF ANNUAL RETURN:

As required under Section 92(3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of Annual

Return in Form MGT-9 attached as a part of this Annual Report

(Annexure II).

14. AUDITORS:

The Auditors Messrs K. S. Aiyar and Co Chartered Accountants (registered with ICAIFirm Registration Number is 100186W) retire at the ensuing Annual General Meetingand being eligible offer themselves for reappointment. In terms of the requirement of theCompanies Act 2013 it is proposed to appoint the Auditors for the next 4 years subjectto ratification at every Annual General Meeting of the Company.

The Company has received a certificate under Section 141 of the Companies Act 2013from the said firm that their appointment would be within the limits specified therein.

Your Directors recommend the appointment of Messrs K. S. Aiyar and Co. CharteredAccountants as the Statutory Auditors for a term of 4 years. The Resolution seekingapproval of the Members for appointment of Statutory Auditors and fixation of theirremuneration and authorization to the Board of Directors are included in the noticeconvening the ensuing Annual General Meeting.

15. SECRETARIAL AUDIT:

The Secretarial Audit for the Financial year 2016-17 was conducted as required underSection 204 of the Companies Act 2013 by Mr. Vijayakrishna K T Company Secretaryin terms of Section 204(3) of the Act. The Secretarial Audit report is enclosed tothe Report of the Board of Directors in terms of Section 134(3) (f) read withSection 204 (1) of the Act is annexed to this Report (Annexure III). YourManagement has given their write response upon some of the Observation made bySecretarial Auditor.

16. DISCLOSURE ABOUT COSTAUDIT :

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 dated December 31 2014 issued by the Ministry ofCorporate Affairs (MCA) the cost audit records maintained by such companies as may beprescribed in respect of the products covered as per the above dated notification issuedby the MCA is required to be audited by a Cost Accountant.

However the Company not being a prescribed company as per the rules the Cost Audit isnot applicable for the year under Report.

17. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO: (a)Conservationof Energy:

Your Company is duly certified under ISO 14001:2004 (Environment Management System).Every possible effort is being made / introduced to conserve and avoid wastage of energy.Adequate facilities have been installed for rain water harvesting recycling of usedwater solar-powered energy and maximum usage of natural lighting and ventilation andthus implementing Go Green Policy in its total spirit.

(b) Technology Absorption:

Efforts also continue to maximize utilization of the technological skills in findingstate-of-the-art solutions to provide more effective and revolutionary solutions for allsegments of Networking Products Industry.

During the year no amount was incurred towards Capital Expenditure in this division. Onrevenue account an amount of Rs. 0.30 Crores (Prev. year- Rs. 1.24 Crores) was expendedand absorbed in these accounts in accordance with the applicable Accounting Standards.The in-house technical and commercial teams consistently engage themselves in theirendeavor to indigenize technology and components as well as implementation ofvalue-engineering and cost-saving methods.

(c) Foreign Exchange Earnings and Outgo: Full details of foreign exchange earningsand expenditure are furnished under Para (e) of Note 26 II on ‘Notes on accounts andother explanatory information.

18. DEPOSITS:

Your Company has not invited/accepted/renewed any deposits from the public as definedunder the provisions of the Companies Act 2013 and accordingly there were no depositswhich were due for repayment on or before 31st March 2017.

19. INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY:

The Company continued to maintain high standards of internal control designed toprovide adequate assurance on the effici ency of operations and security of its assets.The adequacy and effectiveness of the internal control across various activities as wellas compliance with laid-down systems and policies are comprehensively and frequentlymonitored by your Company's Management at all levels of the organization. The AuditCommittee which meets at least four times a year actively reviews internal controlrelated to financial reporting and financial disclosures statutory compliances withadequate participation inputs from the Statutory Internal and Corporate SecretarialAuditors.

20. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The Company has not made any Loan Guarantees or Investments of any nature during theyear under review.

21. RISK MANAGEMENT POLICY:

The Company has formulated a Risk Management Policy and has in place a mechanism toinform the Board about risk assessment and minimization procedures and periodical reviewto ensure that executive

Management controls risk by means of a properly designed framework. The policy detailsavailable at this link http://www.mro-tek.com/pdf/MRO-TEK-Risk_ Management_Policy.pdf

22. RISK AND AREA OF CONCERN:

The Company laid down a well defined Risk Management mechanism covering the riskmapping and trending analysis risk exposure potential impact and risk mitigatingprocess. A detail exercise is being carried out to identify evaluate manage and monitorand non business risk. The Audit Committee Risk Management Committee and the Boardperiodically review the risks and suggest steps to be taken to manage/mitigate the same.

During the year a risk analysis and assessment was conducted and no major risks werenoticed which may threaten the existence of the Company.

23. NOMINATION AND REMUNERATION COMMITTEE POLICY:

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and forother employees and their remuneration. The same has been disclosed in the website athttp//www.mro-tek.com /pdf/Nomination_ and_Remuneration_Policy.pdf /

24. CORPORATE SOCIAL RESPONSIBILITY:

The Company has continuously been incurring losses from past three financial years.Hence the Company was not required to incur any CSR Expenditures during the year.

25. RELATED PARTY TRANSACTIONS:

All Related Party Transactions which were entered into during the financial year wereon an arm's length basis and were in the ordinary course of business. There are nomaterially significant Related Party Transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interests of the Company at large.

All Related Party Transactions are placed before the Audit Committee and also the Boardfor approval. Prior omnibus approval of the Audit Committee was obtained on a quarterlybasis for the transactions which are of a foreseen and repetitive nature. The transactionsentered into pursuant to the omnibus approval so granted are audited and a statementgiving details of all Related Party Transactions is placed before the Audit Committee andthe Board of Directors for their approval on a quarterly basis.

The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website. Web link for the same is http://mro-tek.com/pdf/20_5_15_ RPT_Policy.pdfand also Particulars of Contracts or Arrangements with Related parties referred to in

Section 188(1) in Form AOC- 2 is annexed to this report as (Annexure IV).

26. ANNUAL BOARD EVALUATION:

Pursuant to the provisions of the Companies Act 2013 and Regulation 17 (10) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board hascarried out an annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Audit Nomination &Remuneration and Compliance Committees.

27. RATIO OF REMUNERATION TO EACH DIRECTOR:

Details / Disclosures of Ratio of Remuneration to each Director to the medianemployee's remuneration are annexed to this report as (Annexure-V). 28. LISTING WITHSTOCK EXCHANGES:

The Equity shares of the Company continued to be listed on the BSE Limited (BSE) Mumbaiand the

National Stock Exchange of India Ltd. (NSE) Mumbai. The Company confirms that it haspaid the Annual

Listing Fees for the year 2017-2018 to NSE and BSE where the Company's Shares arelisted.

Mr. Barun Pandey Company Secretary has been appointed as Compliance Officer of theCompany. The

Board of Directors has authorized Chairman Managing

Director and the Chief Financial Officer severally for reporting disclosure of thematerial events if any in terms of Regulations 30 of the listing Regulations.

29. CORPORATEGOVERNANCEANDSHAREHOLDERS

INFORMATION:

As required under the Companies Act 2013 your Company has taken adequate steps toadhere to all the stipulations laid down under Regulation 34 read with Schedule V of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. A report onCorporate Governance is included as a part of this Annual Report as (Annexure–VI).

Certificate from a Practising Company Secretary confirming the compliance with theconditions of

Corporate Governance as stipulated under Regulation 33 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 obtained is attached to this report.

30. CAPITAL EXPENDITURE:

As on 31st March 2017 the gross tangible and intangible assets stood at Rs. 21 2153 964/- and the net tangible and intangible assets at Rs. 78684048/-. Additionsduring the year amounted to Rs. 4655318/-. The Company has recognized impairment loss ofRs. 4820 843/- during the year. The Company incurred lease hold improvement expenditureof Rs. 1791515 during the year.

31. JOINT VENTURE:

The Board of the the JV Company viz. RAD-MRO Manufacturing Private Limited Bangaloreproposed the appointment of liquidator to the shareholders and approved the statement ofaffairs dated July 22 2017. The shareholders of Joint Venture Company approved theproposal for liquidation and appointed liquidator to carry out the liquidationproceedings.

The summary of statement of affairs of Joint Venture Company as on June 30 2017 is asfollows:

Rs.
Share Capital: 1 48 00000
Reserves and Surplus: 2 38
01441
Cash and Bank Balances: 3 86 01441

Your Company owns 49% shareholding in the Joint Venture Company.

32. MATERIAL ORDER PASSED BY ANY COURT OR REGULATOR OR TRIBUNALS IMPACTING GOINGCONCERN STATUS OF COMPANY:

No order was passed by any court or regulator or tribunal during the period underreview which in the opinion of the Board affects going concern status of the Company.

33. INDUSTRIAL RELATIONS:

Industrial relations have been cordial and constructive which have helped your Companyto achieve production targets.

34. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:

The Company has in place Anti Sexual Harassment Policy in line with the requirements ofthe Sexual

Harassment of Women at the Workplace (Prevention Prohibition & Redressal) Act2013. Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees

(permanent contractual temporary trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed offduring the year 2016-17: No of complaints received : NIL

No of complaints disposed off: NIL

35. MANAGEMENT DISCUSSION AND ANALYSIS:

The following Management Discussion and Analysis ("MD&A") should be readin conjunction with the financial statements and accompanying notes

("Financial Statements") of MRO-TEK REALTY LIMITED for Financial Year endedMarch 31 2017.

1. Segment wise or Product wise performance

2. Risk and Concerns

3. Internal Control Systems and their adequacy

4. Discussion on financial performance with respect to operational performance

5. Material Developments in Industrial Relations front In addition to the above thefollowing points have been furnished below.

Restructuring and Re-organization

The Company has undertaken serious effort to revive the business during the last twoyears. The Board decided to optimize the existing property situated at

Hebbal by entering into the development agreement with Messrs Umiya Builders andDevelopers on January

1 2016. The construction plan approval has been obtained from BBMP in March 2017. TheCompany discontinued the loss making segment of Solar business on January 14 2016 andreduced the number of employees and workers to the optimum level to run the existing corebusiness of networking products. With this the Company could reduce the overheadsignificantly and improved the cash flow position.

The founder Promoters of the Company opted to exit infavour of a new Management torevive the Company. Chairman of Umiya Group Mr Aniruddha Bhanuprasad Mehta along with itsother promoters Mrs Gauri A Mehta and Umiya Holding Private Limited entered into SharePurchase agreement with founder promoters on May 19 2016. As per the requirements of SASTRegulations Umiya Group made an Open Offer to the Public to acquire 25% of the share fromthe Public apart from the Promoters.

The new Promoter Mr. Aniruddha Bhanuprasad Mehta was appointed as Chairman and ManagingDirector of the Company with effect from August 8 2016. the board inducted threeIndependent Directors having good experience and credentials in the market who cancontribute to the Growth of the Company. The Company's turnaround actions brought thesituation to positive in the year 2016-17 which clearly shows the road map and vision ofthe Company's future. The published financial results for the year

2016-17 is attached here with for your information.

FORWARD LOOKING AND CAUTIONARY STATEMENTS

The statements in this report describing the Company's

Vision Mission objectives estimations expectations or projections outlook etc.may constitute forward looking statements within the meaning of the applicable Rules Lawsand Regulations. Actual results may vary from such expectations projections etc. whetherexpress or implied. These statements are based on certain assumptions and expectations offuture events over which the Company has no direct control.

MISSION STATEMENT:

Create happiness for employees value for stakeholders and partners be a responsiblecorporate citizen. VISION STATEMENT: To be a world class provider of Technologyproducts solutions and services to our customers anywhere at all times.

QUALITYPOLI CY:

To always deliver high quality zero defect high performance products solutions andservices to our customers everywhere.

Industry structure and development Strengths Weakness Opportunities and threatsmajor initiatives undertaken and planned to ensure sustained performanceand growth:

The Government of India introduced a major national initiative designed to facilitateinvestment foster innovation enhance skill development protect intellectual propertyand build best-in-class manufacturing infrastructure under" Make In India".The Indian Manufacturing Companies gets significant opportunity under this scheme. MRO-TEKis a Public Limited Company that is doing its bit to help hold the flag of indigenoustechnology and manufacturing prowess in the networking space for India. Since itsinception in 1984 the Company has been is and will be an indigenous player in the truesense of the word with a roadmap to go global from India. Smart Cities Mission is an urbanrenewal and retrofitting program by the Government of

India with a mission to develop 100 cities all over the country making them citizenfriendly and sustainable. The Union Ministry of Urban Development is responsible forimplementing the mission in collaboration with the State Governments of the respectivecities.

The Company expects to have good opportunity to supply its products and providesolutions for various applications for the accomplishment of smart city projects. Suchprojects create significant opportunities for the company's network technology and presenta valuable revenue opportunity. The Government of India has budget estimates of Rs. 2.62lakh Crores for the year 2017-18 as against revised estimates of Rs. 2.48 lakh Crores forthe year

2016-17. The Company is exploring the opportunities with security solutions to supplyand provide core networking infrastructure and technology and its related areas.

This will have a positive impact on the Company as it gives lot of emphasis on theindigenous development of products. MRO-TEK has always tried to do indigenization ofR&D and manufacture to reduce the cost of the equipments and less dependency on theforeign vendors for spares and other maintenance activities.

During the year the BBMP had issued plan approval for the construction of commercialproperty building at the Company's Hebbal land.

SWOT ANALYSIS MRO-TEK'S Strengths

"MRO-TEK" is a pioneer in the manufacture and trading of last milenetworking access. The Company has very good product brand name "MRO-TEK" in thecountry and is one among very few players in India. "MRO-TEK" being themanufacturer gets significant opportunities under "MAKE IN INDIA"

Scheme.

The Company has its potentiality to participate indirectly in large smart city andsurveillance projects initiated by the Government of India. The opportunities inHomeland and Industrial security sector is significant and the Company has a roadmap ofproducts solutions and technology to exploit these opportunities.

The Company has its own Research and Development unit recognized by Department of

Scientific and Industrial Research.

Since our core strength is Quality Solution Design on time delivery and effective24/7 after sales support across India and hence we are recognized for our brand"MRO-TEK".

MRO-TEK'S Weaknesses

Rapid obsolescence of technology commoditization of products by Chinese clonersvariation in business dynamics of service providers due to their own velocity of business.Over dependence on telecom service providers as major customer segment.

Competitors may enjoy new technology which has just changed

MRO-TEK'S Opportunities

The Government's initiative of Make In India enables the Company to work onIndigenisation of spectrum of networking products.

The Company foresees benefits through participation in Smart City and surveillanceprojects in the coming years.

The Company has good potential to work on security solutions segment.

New technologies increasing consumer base of service providers will force them toincrease the capex which will gives the Company an opportunity to increase business inphysical network infrastructure for 4G/5G roll out as all our products are internetconnectivity oriented this will serve as excellent growth curve and rapidly benefit us inour revenue.

MRO-TEK'S Threats

Rapid rising of labor costs due to quantum jumps in labor wages by the Governmentincreasing competition and increased G Government

Regulations are just a few external threats that can limit the Company's futuresuccess. Threats are outside events or influences that create future hurdles for aCompany.

Increase in non-moving or slow moving inventory situations due to continuousobsolescence of technology.

Lack of adequate Working Capital.

Material Developments in Human Resources

In order to retain the skilled employees the Company made an effort to evaluate theperformances of the employees and accordingly increased the remuneration during the year.

36. CODE OF CONDUCT:

In terms of Regulation 26(3) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 all the Members of the Board and Senior

Management Personnel have affirmed compliance with the Code of Conduct of the Board ofDirectors and Senior Management for the year FY 2016-17. As required under Schedule V (D)of the said Regulations a declaration signed by the Managing Director and

Chief Finance Officer of the Company stating that the

Members of the Board and the Senior Management

Personnel have affirmed compliance of their respective code of Conduct.

37. ACKNOWLEDGEMENTS

Your Directors would like to acknowledge the role of all its Stakeholders vizShareholders Bankers Lenders Customers Vendors and all other acquaintances for theircontinued support to your Company and the confidence and faith that they have alwaysreposed in your Company.

Your Directors acknowledge and appreciate the guidance and support extended by all theGovernmental agencies the Regulatory authorities including the Securities ExchangeBoard of India (SEBI) Ministry of Corporate Affairs (MCA) Registrar of Companies

Karnataka Stock Exchanges BSE/NSE and the NSDL/

CDSL.

For & on behalf of the Board of Directors

Aniruddha Bhanuprasad Mehta

Chairman & Managing Director DIN: 00720504 Place : Bangalore Date : 03.08.2017