TO THE MEMBERS
1. Your Directors are pleased to present the 33rd Annual Report and theAudited Statement of Accounts of the Company for the year ended March 31 2019.
2. Financial Results
|Description ||current Year ||Previous Year |
|Revenue from operations and other Income ||55.03 ||79.35 |
|Profit / (Loss) for the year Before Tax ||(22.63) ||(11.09) |
|Add / (Less) : Provision for Tax (including Deferred Tax) ||(0.50) ||(0.24) |
|Profit / (Loss) After Tax ||(22.13) ||(10.85) |
|Other Comprehensive Income ||(0.24) ||(3.56) |
|Total Comprehensive Income / (Loss) ||(22.37) ||(14.41) |
|Earnings Per Share in ' ||(17.61) ||(8.63) |
The Directors do not recommend any dividend on equity shares on account of lossincurred during the financial year ended March 312019.
4. Transfers to Reserves
I n 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 ' 55.03 Cr ascompared to ' 79.35 Cr in the previous year.
5.2 Engineering -
The Revenue from engineering operations during the year was ' 47 Cr as against ' 70 Crin previous year. During the year execution of many projects particularly ElectricalProjects of BHEL and NTPC were prolonged as synchronization of power plants were delayeddue to reasons attributable to Clients. Further due to delay in completion cost hasincreased. The Company has lodged claims for cost and time overrun which are under activeconsideration. As per the policy of the Company these will be considered for revenuerecognition only on acceptance by client.
The Company has also lodged claims for reimbursement of establishment cost. As per thepolicy of the Company these will be considered only on acceptance by client. TheManagement expects to close major of the projects during current financial year i.e. F.Y.2019-2020 and to expedite the escalation claims.
5.3 Infotech -
Revenue from Infotech Segment during the year was ' 6.73 Cr as compared to ' 5.88 Cr.in the previous year.
6. Fixed Deposits
The Company is authorized to accept Fixed Deposits upto 35% of the aggregate of thepaid-up share 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 ' 0.15 Crs re-paid during the year amounted to ' 4.23 Crs and matured& unclaimed deposits as at the end of the year were ' 0.13 Crs. The Company held'13.46 Crs as Fixed Deposit as of March 312019. There has been no default in repayment ofdeposits or payment of interest thereon during the year. There are no deposits which arenot in compliance with the requirements of Chapter V of the Companies Act 2013.
7. Statutory Auditor
Pursuant to the provisions of section 139 of the Companies Act 2013 the Members atthe Annual General Meeting of the Company held on August 12 2015 appointed M/s K.K.Mankeshwar & Co. Chartered Accountants Mumbai (Firm Registration No. 106009W) asStatutory Auditors of the Company from the conclusion of 29th Annual GeneralMeeting (AGM) till the conclusion of 34th Annual General Meeting for fiveconsecutive years subject to ratification by the members at each intervening AnnualGeneral Meeting.
Pursuant to the amendments made to Section 139 of the Companies Act 2013 by theCompanies (Amendment) Act 2017 effective from May 7 2018 the requirement of seekingratification of the Members for the appointment of the Statutory Auditors has beenwithdrawn from the Statute. Hence the resolution seeking ratification of the Members forcontinuance of their appointment at this AGM is not being sought.
8. Corporate Governance Report
Pursuant to Regulation 34 of SEBI (Listing Obligations and Disclosures Requirement)Regulations 2015 ("Listing Regulations") a report on Corporate Governance Annexure-IValong with Auditor's Certificate regarding compliance of conditions of CorporateGovernance and also Management Discussion and Analysis is separately given in this Reportas Annexure-I.
A Certificate of the "Manager" as per Companies Act 2013 and Chief FinancialOfficer of the Company in terms of Listing Regulations inter alia confirming thecorrectness of the financial statements and cash flow statements adequacy of the internalcontrol measures and reporting of matters to the Audit Committee is also annexed.
9. Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is annexed as Annexure - II whichforms an integral part of this Report and is also available on the Company's website viz. www.mukandengineers.com.
10. Meetings of the Board and its committees
During the year under review 5 (Five) 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.
11. Details in respect of frauds reported by auditors under section 143(12) ofthe Companies Act 2013
There was no instance of fraud reported during the year under review which requiredthe Statutory Auditors to report to the Audit Committee and / or Board under Section143(12) of Act and Rules framed thereunder.
12. 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 www.mukandengineers.com. The brief about the policies are given in Annexure-VI.
13. 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.
14. 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.
15. 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 was revised effective fromApril 1 2019 in line with the amendments made to the Listing Regulations 2015. ThePolicy has been uploaded on the Company's website viz www.mukandengineers.com.
16. Performance Evaluation of the 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.
17. Composite Scheme of Amalgamation
During the year under review on recommendation of the Audit Committee the Board ofDirectors of the Company on July 16 2018 has considered and approved the Scheme ofAmalgamation amongst Adore Traders and Realtors Private Limited ("Adore")Mukand Global Finance Limited ("MGFL") Mukand Engineers Limited("MEL") and Mukand Limited ("Mukand") and their respectiveShareholders and Creditors as per the provisions of Section 230 to 232 read with Section52 and other applicable provisions of the Companies Act 2013 ("Scheme"). TheScheme inter alia provides for amalgamation of Adore with MGFL and then amalgamation ofMGFL (post merger of Adore) and MEL with Mukand. The Appointed Date for the amalgamationis April 1 2019.
Observation Letters with no adverse observations have been received from BSE Limitedand National Stock Exchange of India Limited by Mukand and MEL in respect of the scheme.On receipt of observation letter MEL along with Mukand MGFL and Adore had filed theCompany Scheme Application with National Company Law Tribunal Mumbai Bench("NCLT") and the same is pending before NCLT. The Scheme is subject to requisiteapprovals of respective shareholders creditors NCLT and other Statutory or Regulatoryauthorities as may be applicable.
18. Details of Significant and Material Orders passed by the Regulators or Courts orTribunal impacting the going concern status and Company Operations in Future
During the year under review observation Letters with no adverse observations havebeen received from BSE Limited and National Stock Exchange of India Limited by Mukand andthe Company in respect of the scheme. Other approvals and formalities in respect of theaforesaid amalgamation are under process.
19. Other information
19.1 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.
19.2. During the year under review there were no foreign exchange earnings butexpenditure in foreign currency incurred amounting to ' 3.88 Crores.
19.3 There are no employees covered under Section 197 (12) read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
19.4 None of the Directors is paid any Remuneration other than sitting fees forattending Board /other Committee meetings of the Company.
19.5 Details relating to remuneration of Key Managerial Personnel (KMP) is available inMGT-9 Annexure-II. As per provision of Section 136(1) of the Companies Act 2013these particulars will be made available to a shareholder on request.
19.6 The paid-up equity share capital as on March 312019 is ' 12.58 Cr. During theyear under review the Company has neither issued shares with differential voting rightsnor has granted stock options/sweat equity.
19.7 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 upto the date of this report.
19.8 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.
19.9 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.
19.10 A Cash Flow Statement for the year 2018-19 is attached to the Balance Sheet.
20. 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.
21. Directors' Responsibility Statement
To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section134(3)(c) of the Companies Act 2013:
a) t hat in the preparation of the annual accounts for the year ending March 31 2019the applicable accounting standards have been followed along with proper explanationrelating to material departures;
b) t hat the Directors have selected such accounting policies and applied themconsistently and made judgments and estimated that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for that period;
c) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
d) that the Directors have prepared the annual accounts on a going concern basis;
e) that 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) that the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
22. 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 Shri Rajesh V. Shah (DIN:00021752) Director of the Company will retire in the ensuing Annual General Meeting andbeing eligible offers himself for re-appointment. The Board recommends his reappointmentfor the consideration of the Members of the Company at the forthcoming Annual GeneralMeeting. Brief profile of Shri Rajesh V. Shah has been given in the Notice convening theAnnual General Meeting.
(b) Independent Directors
Shri Prakash V. Mehta Shri N. Ramanathan and Shri R.Sankaran were appointedIndependent Directors at the 28th Annual General Meeting (AGM) held on August13 2014 for a period of five years. Based on the recommendation of the Nomination andRemuneration Committee there re-appointment for a second term of five years is proposedat the ensuing Annual General Meeting for the approval of the Members by way of SpecialResolution.
All Independent Directors of the Company have given declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 16(1) (b) of the Listing Regulations 2015. In the opinion of the Board theIndependent Directors fulfill the conditions of independence specified in Section 149(6)of the Companies Act 2013 and Regulation 16(1) (b) of the Listing Regulations 2015. TheIndependent Directors have also confirmed that they have complied with the Company's Codeof 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 www.mukandengineers.com. None of the KMPs of the Company hasresigned during the year under review.
23. Related Party Transactions
There was no Related Party Transactions (RPT) entered into by the Company during thefinancial year which attracted the provisions of section 188 of Companies Act 2013.However there was material RPT which got covered as material RPT's under Regulation 23of Listing Regulations.
During the financial year 2018-19 pursuant to Section 177 of the Companies Act 2013and Regulation 23 of the Listing Regulations all RPTs were placed before Audit Committeefor its prior / omnibus approval. The requisite disclosure in Form AOC-2 is furnished in Annexure-III.
The Related Party Transaction Policy as approved by Board is available on the websiteof the Company www.mukandengineers.com.
24. 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.
25. 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 Listing Regulations 2015. The particulars of familiarization programme forIndependent Director can be accessed through the website of the Company www.mukandengineers.com.
26. 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.
27. Secretarial Auditors and Secretarial Audit Report
The Board has appointed M/s. Ragini Chokshi & Co (C.P.No 1436) Company Secretariesin wholetime practice to carry out Secretarial Audit under the provisions of Section 204of the Companies Act 2013 for the financial year 2018-19. The report of the SecretarialAuditors is annexed to this Report as Annexure-V. The observation of theSecretarial Auditors in their report are self-explanatory and therefore in the opinion ofthe Director do not call for any further explanation.
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
Mumbai May 20 2019.