TO THE MEMBERS
1. Your Directors are pleased to present the 34th Annual Report and the AuditedStatement of Accounts of the Company for the year ended March 312020.
2. Financial Results
(Rs in crores)
|Description ||Current Year ||Previous Year |
|Revenue from operations and other Income ||44.84 ||55.03 |
|Profit / (Loss) for the year Before Tax ||(30.19) ||(22.63) |
|Add / (Less) : Provision for Tax (including Deferred Tax) ||(0.01) ||(0.50) |
|Profit / (Loss) After Tax ||(30.18) ||(22.13) |
|Other Comprehensive Income ||(141) ||(0.24) |
|Total Comprehensive Income / (Loss) ||(31.59) ||(22.37) |
|Earnings Per Share in ' ||(24.01) ||(17.61) |
The Directors do not recommend any dividend on equity shares on account of lossincurred during the financial year ended March 31 2020.
4. Transfers to Reserves
In view of losses for the year under review no amount has been transferred to theReserves.
5.1. General -
The income from operations and other income during the year was at ' 44.84 Cr ascompared to ' 55.03 Cr in the previous year.
5.2 Engineering -
The Revenue from engineering operation during the year was ' 35 Cr as against ' 47 Crin previous year. During the year execution of many projects particularly NMDC and NTPCwere prolonged due to reasons attributable to Clients. Further due to delay in completioncost has increased. The Company has lodged claims for cost and time overruns which areunder active consideration.
The Company has lodged claims for establishment cost and time overruns which are underactive consideration. As per the policy of the Company these will be considered only onacceptance by client.
5.3 Infotech -
Revenue from Infotech Segment during the year was ' 6.72 Cr
6. Note on coVID 19 Pandamic
In March 2020 the World Health Organisation (WHO) declared COVID-19 a global pandemic.Consequent to this Government of India declared nation-wide lockdown on March 24 2020which has impacted normal business operations of the Company and the focus immediatelyshifted to ensuring the health and well-being of all employees. This forced the Company toswitch to work from home wherever possible for office staff employees of the Company. Theproject site work came to a standstill as most of the workers migrated to their hometown.
The Company has issued force majeure intimations to customers in accordance with theterms of the Contracts. At present the Company does not foresee any significant impactdue to the non-fulfilment of its contractual obligations to the customers or any othercounter party arising out of Covid 19 pandemic.
The Company has evaluated the impact of Covid 19 resulting from (i) the possibility ofconstraints to fulfil its performance obligations under the contract with customers; (ii)revision of estimations of costs to complete the contracts because of additional efforts;(iii) termination or deferment of contracts by customers.
The work at project sites are affected due to nonavailability of sufficient SkilledWorkers Engineers and Foreign Experts for commissioning work. With the graded opening ofproject sites and offices the Company is making every effort possible to make up for thelost time due to the pandemic during F.Y. 2020-21. The impact to the Business &future economic conditions of the lockdown disruption will have to be assessed from timeto time and a lot depends on the success of the various pandemic containment efforts beingundertaken by the Respective State Governments Health authorities and Central Government.At this stage it is premature to forecast the future impact with credibility.
7. Human Resource development
Attracting enabling and retaining talent have been the cornerstone of the HumanResource function and the results underscore the important role that human capital playsin critical strategic activities such as growth. A robust Talent Acquisition systemenables the Company to balance unpredictable business demands with a predictable resourcesupply through organic and inorganic growth.
8. Fixed deposits
The Company is authorized to accept Fixed Deposits up to 35 % of aggregate of the paidup share capital free reserves and securities premium account in terms of Companies(Acceptance of Deposits) Rules 2014 only from its Members. The Company has not acceptedany fresh Deposits during the year Fixed deposits repaid during the year amounted to '8.45 Crs and matured & unclaimed deposits as at the end of the year were ' 0.14 Crs.The Company held ' 5.02 Crs as Fixed Deposits as of March 312020. There has been nodefault in repayment of deposits or payment of interest thereon during the year. There areno Fixed deposit which are not in compliance with the requirements of Chapter V of theCompanies Act 2013.
9. Statutory Auditors
As M/s K.K. Mankeshwar & Co Chartered Accountants Mumbai (Firm Registration No.106009W) retire after being Company's Statutory Auditors for a period of 10 consecutiveyears.
The Board of Directors places on record its appreciation to the services rendered byM/s. K.K. Mankeshwar & Co. Chartered Accountants as the Statutory Auditors of theCompany.
Subject to the approval of the Members the Board of Directors of the Company hasrecommended the appointment of M/s. Bhushan Khot & Co. Chartered Accountants (FirmRegistration No. 116888W) as the Statutory Auditors of the Company pursuant to Section 139of the Companies Act 2013.
Accordingly the Board recommends the resolution in relation to appointment ofStatutory Auditors for the approval by the shareholders of the Company.
10. Corporate Governance Report
Pursuant to Regulation 34 of SEBI (Listing Obligations and Disclosures Requirement)Regulations 2015 ("LODR Regulations 2015") a report on Corporate GovernanceAnnexure-iV along with Auditor's Certificate regarding compliance of conditions ofCorporate Governance and Management Discussion and Analysis is separately given in thisReport as Annexure-i.
A Certificate of the "Chief Executive Officer and Chief Financial Officer of theCompany in terms of Listing Regulations inter alia confirming the correctness of thefinancial statements and cash flow statements adequacy of the internal control measuresand reporting of matters to the Audit Committee is also annexed.
11. Extract of annual return
An extract of the Annual Return as provided under subsection (3) of section 92 of theCompanies Act 2013 in the prescribed Form MGT-9 is annexed to this report as Annexure-iiand forms integral part of the Report and is also available on the Company's website atwww.mukandengineers.com
12. Meetings of the Board and its committees
During the year under review 4 (Four) Board Meetings of the Board of Directors of theCompany were convened and held. The intervening gap between the meetings was within theperiod prescribed under the Companies Act 2013 and Listing Regulations 2015. The detailsof the Committees along with their composition number of meetings and attendance at themeetings are provided in the Corporate Governance Report.
13. Details in respect of frauds reported by auditors under section 143(12) of thecompanies act 2013.
During the year under review there were no frauds reported by the Statutory Auditorsto the Audit Committee or the Board under section 143(12) of the Companies Act 2013.
14. disclosure regarding company's policies under companies Act 2013 and (LODR)Regulations 2015
The Company has framed various policies as per LODR Regulations 2015 & CompaniesAct 2013; viz i) Remuneration ii) Determining material subsidiary iii) Performanceevaluation of the Board Committees and Directors iv) Materiality of Related PartyTransactions v) Whistle Blower/Vigil Mechanism vi) Archival Policy for disclosure vii)Board diversity and viii) Code of Conduct for Directors are displayed on the website ofthe Company at www.mukandengineers.com. The brief about the policies are given inAnnexure-Vi.
15. Particulars of Loans Guarantees and investments
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to Financial Statements forming apart of this Annual Report.
16. Vigil Mechanism / Whistle Blower Policy
The purpose of the policy is to provide a framework to promote responsible and secureWhistle Blowers and to protect Directors/Employees wishing to raise a concern aboutserious irregularities within the Company. During the year under review no reportingunder Vigil Mechanism was made by any Employee or Director of the Company. The WhistleBlower Policy has been available on the website of the Company at www.mukandengineers.com.
17. Material Subsidiary
Your Company does not have any material subsidiary as per the thresholds laid downunder the Listing Regulations 2015. The Board of Directors of the Company has approved aPolicy for determining material subsidiaries which is in line with the ListingRegulations 2015 as amended from time to time. The Policy has been uploaded on theCompany's website at www.mukandengineers.com.
18. Performance Evaluation of Board
Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations astructured questionnaire was prepared after taking into consideration the various aspectsof the Board's functioning composition of the Board and its Committees cultureexecution and performance of specific duties obligations and governance.
The performance evaluation of the Directors was completed during the year under review.The performance evaluation of the Chairman and the Non-Independent Directors was carriedout by the Independent Directors and Non-Executive Director. The Board of Directorsexpressed their satisfaction with the evaluation process.
19. Details of Significant and Material Orders passed by the Regulators or Courts orTribunal impacting the going concern status and Company Operations in Future - compositescheme of Amalgamations.
On 16th July 2018 on the recommendation of the Audit Committee the Board of Directorsof the Company had considered & approved the Scheme of Amalgamation amongst AdoreTraders and Realtors Private Limited ("adore") Mukand Global Finance Limited("MGFL") the Company and Mukand Limited ("Mukand") and theirrespective shareholders and creditors as per the provisions of Section 230 to 232 readwith Section 52 and other applicable provisions of the Companies Act 2013("scheme"). The Scheme inter alia provides for amalgamation of Adore with MGFLand then amalgamation of MGFL (post merger of Adore) and the Company with Mukand. TheAppointed Date for the amalgamation is 1st April 2019.
Observation Letters with no adverse observations have been received from BSE Limitedand National Stock Exchange of India Limited by Mukand and the Company in respect of thescheme. On receipt of Observation letter the Company along with Mukand MGFL and Adorehad filed the Company Scheme Application with National Company Law Tribunal Mumbai Bench("NcLT"). Pursuant to the order the NCLT directed for convening meetings of theequity shareholders and unsecured creditors of the Company on November 28 2019. Theshareholders and unsecured creditors of the Company at their respective meetings hadapproved the Scheme of Amalgamation with requisite majority without any modificationtherein. Thereafter the Company had filed Company Scheme Petition seeking sanction of theNCLT Mumbai bench and the same was admitted by NCLT Special Bench Mumbai on 23rd April2020. Final hearing on the petition and approval of the Scheme by NCLT is awaited. TheScheme is also subject to requisite approval of other Statutory or Regulatory authoritiesas may be applicable. On implementation of the Scheme the Company will cease to exist andall the assets and liabilities of the Company will be transferred to Mukand Limited w.e.f.the Appointed Date on a going concern basis without any further act instrument deedmatter or thing by virtue of and in the manner provided in the Scheme.
In view of above these financial statements have been prepared on a going concernbasis.
20. Other information
20.1 As the Company does not own an undertaking where manufacturing operations arecarried out the requirement of information to be furnished under Section 134(3) (m) ofthe Companies Act 2013 is not applicable.
20.2. During the year under review there were no foreign exchange earnings orexpenditure.
20.3 There are no employees covered under Section 197 (12) read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
20.4 None of the Directors is paid any Remuneration other than sitting fees forattending Board/other Committee Meetings of the Company.
20.5 Details relating to remuneration of Key Managerial Personnel is available in MGT-9as Annexure-ii. As per provision of Section 136(1) of the Companies Act 2013 theseparticulars will be made available to a Shareholder on request.
20.6 The paid up equity share capital as on March 31 2020 is ' 12.58 Cr. During theyear under review the Company has neither issued shares with differential voting rightsnor has granted stock options/sweat equity.
20.7 During the year under review no case was reported to the Committee formed underThe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013.
20.8 There have been no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany and up to the date of this report.
20.9 The Company has devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards issued by the Institute of Company Secretaries ofIndia and that such systems are adequate and operating effectively.
20.10 Cash Flow Statement for the financial year 2019-20 is attached to the BalanceSheet.
21. risk Management
Risk management is embedded in your Company's operating framework. Your Companybelieves that managing risks helps in maximizing returns. The Company's approach toaddressing business risks is comprehensive and includes periodic review of such risks anda framework for mitigating and reporting mechanism of such risks. The risk managementframework is reviewed periodically by the Board & Audit Committee.
However as per the Listing Regulation constitution of Risk Management Committee forenforcing Risk Management Policy is not applicable to the Company.
22. Directors' responsibility statement
As required by Section 134 (3) of the Companies Act 2013 the Board of Directors ofthe Company hereby state and confirm that:
a) in the preparation of the annual accounts for the year ending March 31 2020 theapplicable accounting standards have been followed along with proper explanation relatingto their material departures;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimated that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and lossof the Company for that period;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a going concern basis;
e) the Directors have 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 have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
23. Directors and Key Managerial Personnel
a) Directors retiring by Rotation
In accordance with the provisions of Section 152 and other applicable provisions of theCompanies Act 2013 and Articles of Association of the Company Ms. Anna Usha Abraham(DIN: 07072268) Director of the Company will retire in the ensuing Annual GeneralMeeting and being eligible offers herself for re-appointment. The Board recommends herre- appointment for the consideration of the Members of the Company at the forthcomingAnnual General Meeting. Brief profile of Ms. Anna Usha Abraham has been given in theNotice convening the Annual General Meeting.
b) Independent directors
The Independent Directors have submitted their Declaration of Independence for thecurrent year as required pursuant to Section 149(7) of the Companies Act 2013 statingthat they meet the criteria of independence as provided in sub-section 149 (6) of theCompanies Act 2013 and Regulation 16(1) (b) of the Listing Regulations 2015. In theopinion of the Board the Independent Directors fulfill the conditions of independencespecified in Section 149(6) of the Companies Act 2013 and Regulation 16(1) (b) of theListing Regulations 2015. The Independent Directors have also confirmed that they havecomplied with the Company's Code of Conduct & Ethics.
c) Key Managerial Personnel (KMP)
During the year under review the Company has complied with the provisions of Section203 of the Companies Act 2013 and the information of the KMP is available on the websiteof the Company at www.mukandengineers.com. None of the KMP's of the Company has resignedduring the year under review.
24. related Party Transactions in accordance with the provisions of the Companies Act
2013 and Rules framed thereunder as well as Regulation
23 of the LODR Regulations 2015 your Company has in place Related Party TransactionPolicy. All contracts/ arrangements / transactions entered by the Company during thefinancial year with related parties were as per the Related Party Transaction Policy andwere in the ordinary course of business and on arms' lengths basis.
During the financial year 2019-20 pursuant to Section 177 of the Companies Act 2013and Regulation 23 of the LODR Regulations 2015 all RPT's were placed before AuditCommittee for its prior / omnibus approval. The requisite disclosure in Form AOC-2 isfurnished in Annexure-Ni.
The Related Party Transaction Policy as approved by Board is available on the websiteof the Company at www.mukandengineers.com.
25. Details in respect of internal Financial controls with reference to financialstatements
Adequate systems for internal controls provide assurances on the efficiency ofoperations security of assets statutory compliance appropriate authorization reportingand recording of 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.
26. familiarisation 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 regarding Companies Act 2013 and Regulation 7of the LODR Regulations 2015. The particulars of familiarization programme forIndependent Director can be accessed through the website of the Company atwww.mukandengineers.com.
27. Auditor's report
The report given by the Auditors on the Financial statements is a part of this Report.There has been no qualification reservation adverse remark or disclaimer given by theAuditors in their report.
28. Secretarial Auditors and Secretarial Audit Report
The Board has appointed M/s. Ragini Chokshi & Co (C.P.No1436) Company Secretariesin wholetime practice to carry out Secretarial Audit under the provisions of Section 204of the Companies Act 2013 for the financial year 2019-20. The report of the SecretarialAuditors is annexed to this Report as Annexure-V. The observation referred to in theSecretarial Audit Report is self-explanatory and therefore in the opinion of theDirectors do not call for any comments under Section 134 of the Companies Act 2013.
29. Corporate Social Responsibility (CSR)
Pursuant to the provisions of Sec 135 of the Companies Act 2013 and applicable Rulesand recent amendment for the year ended March 31 2020 the Company was not required toconstitute CSR Committee or make any expenditure towards CSR.
30. Cautionary Statement
Statements in the Directors Report and the Management Discussion and Analysisdescribing the Company's objectives expectations or predictions may be forward lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Company's operations include change in global and domestic demand and supplyconditions due to COVID-19 affecting selling prices new capacity additions availabilityof critical materials and their cost changes in government policies and tax lawseconomic development of the country and other factors which are material to the businessoperations of the Company.
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
Rajesh V. shah chairman Din:00021752
Mumbai August 13 2020.