1. The Directors present the 80th Annual Report and audited Financial Statements ofthe Company for the year ended March 31 2018.
2. Financial Results: Financial Highlights:
| ||2017-18 ||2016-17 |
|Description || || |
| || |
( Rs in Crores)
|Revenue from operations and other operational Income ||3106.65 ||2995.19 |
|Profit/(loss) || || |
|Profit/(loss) before tax ||25.64 ||74.08 |
|Current Tax / Deferred Tax Credit / (charge) (net) ||18.22 ||(62.84) |
|Profit/(Loss) after Tax ||44.06 ||11.24 |
|Other Comprehensive Income (net) ||30.71 ||(21.66) |
|Total Comprehensive Income ||74.77 ||(10.42) |
|Net worth: || || |
|Earnings per Share ||3.12 ||0.79 |
3.1 The total revenue (including other income) during the year was Rs 3407.58crores compared to Rs 3171.45 crores in the previous year. The exports during the yearwere Rs 222 crores compared to Rs 151 crores in the previous year i.e. an increase of47%. The turnover has improved on account of increase in production of alloy steel andstainless steel during the year. The profit before tax for the year is Rs 25.64 crores ascompared to Rs 74.08 crores in the previous year. The previous year's figures of revenueand profits are not comparable on account of Ind-AS adjustments. The margins were affecteddue to increase in input cost which could not be passed on to customers loss on accountof volatility in foreign exchange rates higher interest cost etc.
3.2 The Company adopted Indian Accounting Standards (Ind-AS) from April 1 2017.The figures of previous year are also re-cast / regrouped to be Ind-AS compliant as thetransitional date for adoption of Ind-AS for your Company is April 1 2016. These annualfinancial statements are the first financial statements of the Company under Ind-AS. ofsuch first-time adoption of Ind-AS as compared to previous GAAP is given in the annexedFinancial Statements.
3.3 The performance of the Company is elaborated in the Management Discussion &Analysis annexed to this report.
4. The Directors do not recommend any dividend for the year in the absence ofeligible profit required for distribution in terms of provisions of Section 123 of theCompanies Act 2013 and no amount has been transferred to the Reserves.
5. Transfer of Alloy Steel Rolling and Finishing Business:
5.1 As reported in the previous years the application of Scheme of Arrangement andAmalgamation involving transfer of alloy steel rolling and finishing business of theCompany to its wholly owned subsidiary company viz. MukandAlloy Steel Pvt. Ltd. (MASPL)was filed with National Company Law Tribunal (NCLT). The required approvals fromShareholders Creditors and other competent statutory / regulatory authorities have beenreceived and the Scheme was approved by NCLT (Mumbai Bench) on December 13 2017.
5.2 After close of the year Sumitomo Corporation Japan (SC) as a Joint Venturepartner for the Alloy Steel Rolling and Finishing Business (ASRFB) has invested an amountof Rs1180.99 Crore.
5.3 The amount so received was utilized for payment of debt transferred by yourcompany to MASL and consideration payable to the Company. This will reduce debt of theCompany.
5.4 Upon such investment Company now holds 51% and Sumitomo Corporation 49% inMASL. On infusion of funds by Sumitomo the name of MASL was changed to Mukand SumiSpecial Steel Ltd. (MSSSL). 5.5 Operations under the Joint Venture are expected toprovide focused attention to improve efficiencyof operations widening of the marketingnetwork and for expansion to enhance value for the Company and its Stakeholders.
6. Transfer of Industrial Machinery Division:
Your Board at its meeting held on March 27 2017 had considered and approved a Schemeof Arrangement and Amalgamation amongst the Company and its wholly owned Subsidiariesunder the provisions of Sections 230 to 232 and other applicable provisions of theCompanies Act 2013. The Appointed Date under the Scheme was January 1 2017. On review ofcurrent external business environment management has decided not to proceed with theimplementation of the Scheme at this stage.
7. Joint Venture:
7.1 Mukand Sumi Metal Processing Limited (MSMPL) is a Joint Venture with SumitomoCorporation Japan to carry on the business of cold finished bright bars and wires. Duringthe year under review net revenue from operations was Rs 614.05 Cr. as compared to Rs473.57 Cr in the previous year.
7.2 Mukand Sumi Special Steel Limited (MSSSL) formerly known as Mukand AlloySteel Ltd. (MASL) is a Joint Venture with SC. During the year under review the netrevenue from operations was Rs 1985.13Cr.
Previous year's figures were only for a part of the year and therefore not comparable..
8.1 Share Capital:
The paid-up equity share capital as on March 31 2018 was Rs 141.41 Impact Crore.
8.2 Material Changes & Commitments:
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyand the date of this report except for infusion of capital in the Joint Venture CompanyMukand Sumi Special Steel Ltd. (formerly known as Mukand Alloy Steels Ltd.) by JointVenture Partner Sumitomo Corporation Japan.
8.3 Fixed Deposits:
The Company is authorised to accept fixed deposits upto 35% of aggregate of the paid-upshare capital free reserves and securities premium account in terms of Companies(Acceptance of Deposits) Rules 2014 only from its members. Deposits accepted during theyear amounted to Rs 47.80 Cr re-paid during the year amounted to Rs 2.29 Cr and matured& unclaimed deposits as at the end of the year were Rs 0.60 Cr. There has been nodefault in repayment of deposits or payment of interest thereon during the year. There areno deposits which are not in compliance with the requirements of Chapter V of theCompanies Act 2013.
9. Corporate Social Responsibility (CSR):
9.1 The Company has constituted a CSR Committee of the Board of Directorscomprising of Shri Niraj Bajaj Shri Rajesh V. Shah Shri Suketu V. Shah and ShriDhirajlal S. Mehta pursuant to Section 135 of the Companies Act 2013. As per the relevantprovisions of the Companies Act 2013 the Company is not required to incur anyexpenditure in pursuance of the CSR Policy in view of the aggregate losses during threeimmediately preceding financial years. However the Company has carried out followingactivities under CSR.
9.2 By the Company:
At Steel Plant Ginigera of
The Company participates in the celebrations held in the local schools on Children'sDay. The Company supports the Schools around the Plant by providing full time teachers.During the year it also supported a Government College by providing benches for students.The Company also ensures regular supply of drinking water to the Ginigera village. Duringthe year it contributed towards procurement of drinking water pipeline and pipe weldingworks for a length of about 8 KMs. It contributed towards procurement of tricycles forphysically challenged persons. It also sponsored a Sports person for participation in theVth Asian Beach Games at Vietnam and Cricket tournaments for high school children
At Steel Plant Dighe Thane:
The Company with active support from Janakidevi Bajaj Gram Vikas Sanstha (JBGVS)continues its effort in promoting education of the economically disadvantaged children inShahapur Taluka of Thane district as part of its CSR programme. The villagers schoolauthorities children and parents have acknowledged the Company's and JBGVS's contributionthrough letters and words over the last 2 years. During the year the company supportedmore than 10000 students studying across 44 schools in Shahapur taluka by providing themwith free text books notebooks footwear compass box and sports items. The Company alsoconducts free math classes during non-school hours for girl students studying in classes7 8 and 9 Presently 39 coaching classes across the Taluka are conducted. The Company alsoprovided benches and fans to several schools and built a toilet facility for boys andgirls .The Company also started a vocational training in the basics of tailoring andtrains girls who have passed Class 10 to becomefinanciallyindependent by setting up theirown tailoring units.
9.3 By the Bajaj Group:
In addition to the activities carried out by the Company the Bajaj Group is involvedin a number of CSR projects through various trusts and group companies. The guidingprinciples of spending on these projects are: benefit generations educate forself-reliance and growth promote health encourage for self-help focused approachtargeted towards needy and sustenance of natural resources. These projects are in theareas of rural development education health care economic and environmentaldevelopment social and urban development protection of culture employment enhancingvocation skills and livelihood enhancement particularly for women homes/hostels forwomen education for differently abled children and measures for benefit of armed forcesveterans. The group also manages schools colleges hospitals and a nursing college. Ithelps NGOs Charitable Bodies and Trusts operating at various locations. One of the trustsalso gives awards for outstanding contribution for constructive work for application ofscience technology and upliftment and welfare of women and children along Gandhian lines.Rural and community development activities are also conducted in the villages.
10. Statutory disclosures:
The Statutory Disclosures in accordance with Section 134 read with Rule 8 of Companies(Accounts) Rules 2014 Section 178 Section 197 read with Rule 5 of Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 and Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBI LODR2015).
10.1 Management Discussion and Analysis:
As required under Regulation 34(2) read with Schedule V of SEBI (SEBI LODR 2015) theManagement Discussion and Analysis is enclosed as a part of this report Annexure-1.
10.2 Corporate Governance Report:
The Company has taken necessary steps to adhere to all the requirements of SEBI LODR2015. A report on Corporate Governance together with statutory auditors confirmingcompliance with the thecertificate conditions of Corporate Governance as stipulated inRegulation 34(3) read with Schedule V of SEBI LODR 2015 is included as a part of thisreport. Annexure 2.
10.3 Extract of Annual Return:
An extract of the Annual Return as prescribed under Sub-Section (3) of Section 92 ofthe Companies Act 2013 in Form MGT 9 is annexed to this report Annexure-3.
10.4 Number of meetings of the Board and composition of Audit Committee:
During the year under review five (5)
Directors of the Company were convened and held. The relevant details includingcomposition of the Board dates of meetings attendance and various Committees of theBoard are given in the Corporate Governance Report forming part of this report.
10.5 Directors' Responsibility statement:
Pursuant to Section 134 (3)(c) of the Companies Act 2013 the Directors confirm that:i. In the preparation of the annual accounts the applicable accounting standards havebeen followed; ii. Appropriate accounting policies have been selected and appliedconsistently. Judgments and estimates that are reasonable and prudent have been made so asto give a true and fair view of the state of affairs of the Company as on March 31 2018and of the profit of the Company for the year ended March 31 2018; iii. Proper andsufficient care has been taken for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; iv. TheAnnual Accounts have been prepared on a going concern basis; v. Internal financialcontrolshave been laid down and followed by the
Company and that such controls are adequate and are operating effectively; vi. Propersystems have been devised to ensure compliance with the provisions of all applicable lawsand that such systems are adequate and operating effectively.
10.6 Statement on declaration given by Independent Directors:
The Independent Directors of the Company have submitted their Declaration ofIndependence as required under the provisions of Section 149(7) of the Companies Act2013 stating that they meet the criteria of independence as provided in Section 149 (6) ofthe Act.
10.7 Familiarization programme for Independent Directors:
The Company has held familiarization programme for the Independent Directors by way ofpresentations on various aspects of business and deliberations held on major developmentsin legal and regulatory areas particularly on GST and Ind-AS. The website link on this ishttp://www. mukand.com/images/Familiarisation_Programme.pdf.
10.8 Disclosure regarding Company's policies under Companies Act 2013:
Company's policies on
i) Directors appointment and remuneration determining criteria forqualification/independence ii) Remuneration for Directors Key Managerial Personnel andother employees
iii) Performance evaluation of the Board Committees and Directors iv) Materiality ofRelated Party transactions v) Risk Management vi) Determining Material Subsidiaries and
vii) Whistle Blower/ Vigil Mechanism along with details of web link (in cases where itis prescribed) are given in Annexure-4.
10.9 Particulars of Loans Guarantees and Investments:
The particulars of loans guarantee or investments given or made by the Company underSection 186 of the Act are disclosed in Notes to the Financial Statements.
10.10 Related Parties Transactions:
There were no Related Party Transactions (RPTs) entered into by the Company during thefinancial year which attracted the provisions of Section 188 of Companies Act 2013.However there were material RPTs which got covered as material RPTs under Regulation 23of SEBI LODR 2015.
During the year 2017-18 pursuant to Section 177 of the Companies Act 2013 andRegulation 23 of SEBI LODR 2015 all RPTs were placed before Audit Committee for its priorapproval. The requisite disclosure in Form AOC-2 is furnished in Annexure-5.
The policy on RPTs as approved by board is uploaded on the Company's website.
10.11 Conservation of Energy technology absorption imported technology ForeignExchange earnings and outgo:
Information under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 is provided in
10.12 Report on the subsidiaries associates and joint venture Companies. Names ofCompanies which have become or ceased to be its Subsidiaries Joint Venture or AssociateCompanies:
A report on performance and financial position of each of the subsidiaries associatesand joint venture companies included in the financial statement together with names ofcompanies which have become or ceased to be subsidiaries joint ventures or associatecompanies during the year under review are furnished in Annexure-7. and materialorders passed by the Regulators or 10.13 Significant Courts:
During and material orders were passed by the year no significant any of theRegulators or Courts except for approval of Scheme of Arrangement and Amalgamation by NCLTfor transfer of Company's Alloy Steel Rolling and Finishing Business Undertaking.
10.14 Details of Directors or KMP who are appointed or have resigned during the yearand Directors who are liable to retire by rotation:
Shri Vinod S. Shah who was Director on your Board passed away on April 82018 at theage of 88 . Shri Shah joined the Company in the year 1953 as a young commerce graduate andspent 55 years in the full time service of your Company. After retirement in 2008 he wason your Board as Non-executive Director. He worked closely with two generations of thepromoter families. The Board records its sincere appreciation for the exemplarycontribution support and guidance provided by him during his long tenure with theCompany.
Shri Niraj Bajaj Chairman & Managing Director and Shri Rajesh V. Shah Co-Chairman& Managing Director retire by rotation and are eligible for re-appointment.
Shri Pratap V. Ashar was appointed as an Additional Director and
Whole-time Director with effect from 29th May 2018 for a period of three years. Heshall be liable to retire by rotation. In accordance with the requirements of Sections196197203 read with Schedule V to the Companies Act2013 this appointment andremuneration payable to him are subject to approval of the members at the ensuing GeneralMeeting of Members.
Pursuant to Section 149(4) of the Companies Act 2013 read with Regulation 17(1) ofSEBI LODR 2015 the Board has one half of its directors in the category of independentdirectors in terms of aforesaid Regulation.
During the year there were no changes in Key Managerial Personnel.
10.15 Performance evaluation of the Board:
Pursuant to the provisions of the Companies Act 2013 and SEBI LODR 2015 the Board hascarried out an annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of Audit Nomination &Remuneration Stakeholders' Relationship and Corporate Social Responsibility Committees ofthe Board. The Independent Directors met separately on 14th February 2018 to discuss thefollowing: i) review the performance of non-independent directors and the
Board as a whole;
ii) review the performance of the Chairperson of the Company taking into account theviews of executive directors and non-executive directors; iii) assess the qualityquantity and timeliness of flow of information between the Company Management and theBoard that is necessary for the Board to effectively and reasonably perform their duties.
All Independent Directors were present at the Meeting and discussed the above andexpressed their satisfaction.
10.16 Internal Financial Controls with reference to financial statements:
Adequate systems for internal controls provide assurances on the efficiency ofoperations security of assets statutory compliance appropriate authorization reportingand recording transactions. The scope of the audit activity is broadly guided by theannual audit plan approved by the top management and audit committee. The Internal Auditorprepares regular reports on the review of the systems and procedures and monitors theactions to be taken.
10.17 Details relating to Remuneration of Directors Key Managerial Personnel andemployees:
The information required under Section 197 (read with Rule 5 of Companies Appointmentand Remuneration of Managerial personnel) Rules 2014 in respect of directors andemployees of the Company are furnished in Annexure-8.
The aforesaid annexure includes information relating to relationship between Directorsinter se.
10.18 Safety Health and Environment:
The Company pays utmost importance towards safety and health of employees byimplementing policies procedures and conducting various awareness programmes among theemployees. It conducts many promotional activities among its work force on safetyadherence and developing the community on national and international events related toHealth Safety and Environment. During the year under report celebrations were heldduring National Safety Week and on the Environment Day. All functional Departments work incohesion to a common goal that includes efficiency in energy and in utilizing naturalresources with minimal or no damage to the environment.
10.19 Prevention of Sexual Harassment at Workplace:
During the year under review no case was reported to the Committee formed under"Prevention Prohibition and Redressal of Sexual
Harassment of Women at Workplace Act 2013."
10.20 Consolidated Financial Statements (CFS):
The CFS is prepared by the Company pursuant to Section 129(3) of the Companies Act2013 in accordance with the requirements of Ind AS 110 ConsolidatedFinancial Statements read with other applicable Indian Accounting Standards. Segment-wisedisclosure of revenues results assets and liabilities on the basis of segments areseparately given in a tabular form in the Consolidated Financial Statements.
11.1 In accordance with the provision of section 139 and Rules made thereunderM/s. Haribhakti& Co. LLP Chartered Accountants Mumbai (Firm Registration No.103523W) were appointed as the Statutory
Auditors of the Company to hold office for a period of five consecutive years from theconclusion of 76th Annual General Meeting held on August 13 2014 till the conclusion of81st Annual General Meeting to be held in Calendar Year 2019 subject to ratification bythe members at each intervening Annual General Meeting. In view of the amendment to thesaid section 139 through the Companies (Amendment) Act 2017 notified on 7th May 2018ratification of auditors' appointment is no longer required. However pursuant to provisionof provision of section 142 of the Companies Act 2013 approval of members is sought forauthorising the Board of Directors of the Company to fix remuneration for the year2018-19.
11.2 The Company has appointed Ms. Sangita Kulkarni as Cost Auditor to carry outthe audit of cost records relating to Steel Plants and Industrial Machinery Division ofthe Company for the Financial Year 2017-18.
The Cost Audit Report for the FinancialYear2016-17wasfiledwith the Ministry ofCorporate Affairs on 21st September 2017 before the due date.
11.3 Pursuant to the provisions of Section 204 of the Companies Act 2013 theCompany has appointed M/s. Anant B. Khamankar (Membership No. FCS:3198) a PracticingCompany Secretary to undertake the Secretarial Audit of the Company. Secretarial Auditors'Report of F.Y. 2017-18 does not contain any qualification reservation or adverseremark. Secretarial Auditors' Report is enclosed as Annexure-9.
12. Auditors' Report:
The observations made in the auditors' report read together with the relevant notesthereon are self-explanatory and hence do not call for any comments under Section134(3)(f) of the Companies Act 2013.
13. Disclosure regarding compliance of Secretarial Standards:
The Company has complied with applicable Secretarial Standard during the year.
The Board of Directors thanks the Banks Central and State Government AuthoritiesShareholders Customers Suppliers Employees and Business Associates for their continuedco-operation and support to the Company.
|On behalf of the Board of Directors Auditors || |
|Niraj Bajaj ||Rajesh V. Shah |
|Chairman & Managing Director ||Co-Chairman & Managing Director |
|DIN: 00028261 ||DIN: 00033371 |
|Mumbai May 29 2018 || |