To the members
1. Your Directors are pleased to present the 32nd Annual Report and the AuditedStatement of Accounts of the Company for the year ended March 31 2018.
2. Financial Results
| || |
|Description ||current Year ||Previous Year |
|Revenue from operations and other Income ||79.35 ||136.19 |
|Profit / (Loss) for the year Before Tax ||(11.09) ||(3.07) |
|Add / (Less) : Provision for Tax (including Deferred Tax) ||(0.24) ||(0.47) |
|Profit / (Loss) After Tax ||(10.85) ||(2.60) |
|Other Comprehensive Income ||(3.56) ||7.18 |
|Total Comprehensive Income / (Loss) ||(14.41) ||4.58 |
|Earnings Per Share in Rs. ||(8.63) ||(2.07) |
(Previous year figu res re-grouped in line with Ind AS) The Company adopted IndianAccounting Standards (Ind AS) from April 1 2017. the transitional date for adoption ofInd AS for your Company is April 1 2016. The annual financial statements are the firstfinancial statement of the Company under Ind AS. Impact of such first-time adoption of IndAS as compared to previous GAAP is given in the annexed Financial Statements.
The Directors do not recommend any dividend on equity shares on account of lossincurred during the financial year ended March 31 2018.
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 atRs.79.35 Cr as compared to Rs.136.19 Cr in the previous year.
5.2 Engineering The Revenue from engineering operation during the year was Rs.70Cr as against Rs.127 Cr in previous year. During the year execution of many projectsparticularly Electrical Projects of BHEL and NTPC were prolonged as synchronization ofpower plants was delayed due to reasons attributable to clients. Further due to delay incompletion cost has increased. The Company has lodged claims for cost and time overrunswhich are under active consideration. As per the policy of the Company these will beconsidered for revenue recognition only on acceptance by client.
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. The Management expects to close these projects in all respects byfirst half of the current financial year i.e. F.Y. 2018-19 and to expedite the escalationclaims which on realization will reflect the positive results.
5.3 Infotech - Revenue from Infotech Segment during the year was Rs.5.88 Cr as comparedto Rs.5.40 Cr. in the previous year.
6. 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. Deposits accepted during theyear amounted toRs.1.62 Crs re-paid during the year amounted to Rs.1.75 Crs and matured& unclaimed deposits as at the end of the year were Rs.0.18 Crs. The Company hadRs.17.53 Crs as outstanding Fixed Deposit as of March 31 2018. There has been no defaultin repayment of deposits or payment of interest thereon during the year. There are nodeposits which are not in compliance with the requirements of Chapter V of the CompaniesAct 2013.
7. Corporate Governance Report
Pursuant to Regulation 34 of SEBI (Listing Obligations and Disclosures Requirement)Regulations 2015 ("LODR Regulations 2015") a report on Corporate Governance
AnnexureiV along with Auditor's Certificate regarding compliance ofconditions of Corporate Governance and Management Discussion and Analysis is separatelygiven in this Report as Annexure- I.
8. 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 12th August 2015 appointed M/s K.K.Mankeshwar & Co Chartered Accountants
Auditor Mumbai (Firm Registration No. 106009W) as Statutory Auditors of the Companyfrom the conclusion of 29th Annual General Meeting till the conclusion of 34th AnnualGeneral Meeting for five consecutive years subject to by the Members at each interveningAnnual General Meeting.
In view of the amendment to the said section 139 through the Companies (Amendment) Act2017 notified on 7th May 2018 of Auditors' appointment is no longer required. Howeverunder Section 142 of the Companies Act 2013 a proposal is put up for approval of Membersfor authorizing the Directors of the Company to fix Auditors' remuneration for thefinancial year 2018-19 and thereafter. The Members are requested to approve the same.
9. Extract of Annual Return
An extract of the Annual Return as provided under sub-section (3) of section 92 of theCompanies Act 2013 in the prescribed Form MGT 9 is annexed to this report as Annexure ii and forms integral part of the Report.
10. 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. Detailed information is given in the Corporate GovernanceReport. The Company has complied with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.
11 . Details in respect of frauds reported by auditors under section 143(12) ofthe companies 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.
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 giveninAnnexure-VI.
13. Particulars of Loans Guarantees and investments
The particulars of loans guarantee or investments given or made by the Company undersection 186 of the Companies Act 2013 are disclosed in the financial statements.
14. Vigil Mechanism
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.
15. Board evaluation
Pursuant to the provisions of the Companies Act 2013 and 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 and Stakeholders Relationship Committee of the Board. The IndependentDirectors met separately on February 14 2018 to discuss the following: i) review theperformance of Non-Independent Directors and the Board as a whole; ii) review theperformance of the Chairman of the Company taking into account the views of Non-ExecutiveDirectors; iii) assess the quality quantity and timeliness of flow of information betweenthe Company Management and the Board that is necessary for the Board to effectively andreasonably perform their duties.
All the Independent Directors were present at the Meeting and discussed the above andexpressed their satisfaction.
16. other information
16.1 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.
16.2. During the year under review there were no foreign exchange earnings butexpenditure incurred in foreign currency amounted to Rs.14.71 Cr.
16.3 There are no employees covered under Section
197 (12) read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
16.4 None of the Directors is paid any Remuneration other than sitting fees forattending Board /other Committee meetings of the Company.
16.5 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 2013 these particulars will bemade available to a Shareholder on request.
16.6 The paidup equity share capital as on March 31 2018 is Rs.12.58 Cr. Duringthe year under review the Company has neither issued Shares with differential votingrights nor has granted stock options/sweat equity.
16.7 There were no significant and material orders passed by the regulators or courtsor tribunal during the year under review which would impact the going concern status ofthe Company and its future operations.
16.8 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.
16.9 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
17. 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 and Audit Committee.
18. 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 accountsfor the year ending March 31 2018 the applicable accounting standards have been followedalong with proper explanation relating to material departures; b) the Directors haveselected such accounting policies and applied them consistently and made judgments andestimated that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year and of the loss of the Companyfor 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 withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
19. 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 Mr. Niraj Bajaj (DIN:00028261) Director of the Company will retire in the ensuing Annual General Meeting andbeing eligible offers himself for re-appointment. The Board of Directors recommends hisre-appointment.
(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.
(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.
20. Related Party transactions
There were 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 were material RPT which got covered as material RPT's under Regulation 23of LODR 2015.
During the year 2017-18 pursuant to Section 177 of the Companies Act 2013 andRegulation 23(3) of LODR 2015 all RPT's were placed before Audit Committee for its prior/ omnibus approval. The disclosure regarding the same in Form AOC-2 is furnished in Annexureiii.
The Related Party Transaction Policy as approved by Board is available on the websiteof the Company www.mukandengineers.com.
21. 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.
22. Familiarisation Programme forindependent 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 2015. The particulars of familiarization programme for Independent Directorcan be accessed through the website of the Company www.mukandengineers.com.
23. indian Accounting Standards 2015
The annexed financial statements comply in all material aspects with IndianAccounting Standards (Ind AS) notified under section 133 of the Companies Act 2013 (theAct) Companies (Indian Accounting Standards) Rules 2015 as amended from time to timeand other relevant provisions of the Act.
24. Auditors' Report
The Auditors report do not contain any qualification adverse remark or reservationwhich requires any explanation / comments by the Board.
25. Secretarial Auditors and Secretarial Audit Report
The Board has appointed M/s. Ragini Chokshi & Co (C.P.No1436) Company Secretariesin whole-time practice to carry out Secretarial Audit under the provisions of Section 204of the Companies Act 2013 for the financial year 2017-18. The report of the SecretarialAuditors is annexed to this Report as Annexure-V. The report does not contain anyqualification adverse remark or reservation which requires any explanation / comments bythe Board.
The Board of Directors thank the Banks Financial
Institutions Central and State Government Authorities Shareholders CustomersSuppliers Employees and Business Associates for their continued co-operation and supportto the Company.
For and on behalf of the Board of Directors
Rajesh V. Shah chairman
Mumbai May 28 2018
Directors Report - Annexure - III
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third provisionthereto:
1. Details of contracts or arrangements or transactions not at arm's lengthbasis:
|(a) Name(s) of the related party and nature of relationship: ||NIL |
|(b) Nature of contracts/arrangements/transactions: ||NIL |
|(c) Duration of the contracts / arrangements/transactions: ||NIL |
|(d) Salient terms of the contracts or arrangements or transactions including the value if any: ||NIL |
|(e) Justification for entering into such contracts or arrangements or transactions ||NIL |
|(f) Date(s) of approval by the Board: ||NIL |
|(g) Amount paid as advances if any: ||NIL |
|(h) Date on which the Special Resolution was passed in General Meeting as required under first provision to section 188 ||NIL |
2. Details of material contracts or arrangement or transactions at arm's lengthbasis:
|(a) Name(s) of the related party and nature of relationship: ||Mukand Limited Mukand Global Finance Limited (wholly owned subsidiary of Mukand Limited) Mukand Sumi Metal Processing Limited and Mukand Sumi Special Steel Limited (subsidiaries of Mukand Limited) |
|(b) Nature of contracts/arrangements transactions: ||Contract Execution - Design Erection Commissioning & Transportation Consultancy Service PMS Contract Execution Maintenance Service - Maintenance of EDP System- Commission on Corporate Guarantee - Supplies of Traded Material Purchase of Cranes & Maintenance Rent and Management fess Fixed Deposit SAP up-gradation services - ICD with Interest - Commission on Bank Guarantee. |
|(c) Duration of the contracts / arrangements/ transactions: ||As per Contract entered into for each transaction. |
|(d) Salient terms of the contracts or arrangements or transactions including the value if any: ||Arm's length basis and credit period as per terms of contracts. |
|(e) Date(s) of approval by the Board if any: ||Omnibus Approval and In the quarterly meetings of the Board. |
|(f) Amount paid as advances if any: ||Nil |
|For and on behalf of the Board of Directors |
|Rajesh V. Shah |
|(Din 00033371) |
|Mumbai May 28 2018 |
DIRECTORS REPORT- ANNEXURE-VI
Company's policies on I) Directors Appointment and Remuneration determining criteriafor qualification/ independence II) Remuneration for Directors and Key ManagerialPersonnel III) performance evaluation of the Board Committees and Directors IV)Materiality of Related Party Transactions V) Risk Management VI) for DeterminingMaterial Subsidiaries and VII) Whistle Blower/Vigil Mechanism.
i) Policy on Directors appointment and Remuneration determining criteria forqualification/independence etc.
i) The Policy on the Board Diversity' is formulated by the Nomination &Remuneration Committee of the Board of Directors of the Company ii) The Committee whilerecommending the appointment of Directors is required to keep in view that the personsbeing recommended are persons of eminence having diverse experience and skills in areassuch as profession business industry finance law administration research etc. addvalue to the strategic needs of the Company and serve the governance. iii) Independence ofIndependent Directors: An Independent Director to meet the requirements of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (SEBI LODR 2015) concerning independence of Directors.
ii) Remuneration Policy for Directors Key Managerial Personnel and other employees i)independent Directors (iDs)
IDs are paid a) a sitting fee of Rs.20000 for every meeting of the Board orAudit Committee thereof attended by them as a Member; and b) a sitting fee of Rs.10000for attending every meeting of Committee of the Board other than that of Audit CommitteeMeeting. ii) Key Managerial Personnel & other employees
The objective of the Remuneration Policy is directed towards having a compensationphilosophy and structure that will reward and retain talent.
The Company does not have stock option plans and hence such instruments do not formpart of the remuneration package. Remuneration to Key Managerial Personnel and SeniorManagement involves a balance between fixed and incentive pay reflecting short and longterm performance objectives appropriate to the working of the Company and its goals.
iii) Performance evaluation
The criteria for evaluation of performance of the Board its Directors and Committeesare formulated by the Nomination & Remuneration Committee of the Board of Directors ofthe Company are as under:
For Board & Committees of the Board;
a. The Board will have requisite number of Independent Directors including a WomanDirector as required under Companies Act 2013;
b. Frequency and Quality of Meetings and attendance thereat;
c. Discharge of the key functions and other responsibilities prescribed under Law; d.Monitoring the effectiveness of corporate governance practices;
e. Ensuring the integrity of the company's accounting and financial reporting systemsindependent audit internal audit and risk management systems (for Board and AuditCommittee);
f. Reviewing Management's Performance
a. Pro-active and positive approach with regard to Board and Senior Managementparticularly the arrangements for management of risk and the steps needed to meetchallenges from the competition;
b. Acting in good faith and in the interests of the Company as whole;
c. Capacity to effectively examine financial and other information on operations of theCompany and the ability to make positive contribution thereon.
iV) Policy on Materiality of Related Party transactions
All Related Party Transactions (RPT's) of the Company covered under the Companies Act2013 and Regulation 23 of LODR 2015 are to be approved by the Audit Committee of theBoard from time to time.
Consent of the Board and the Shareholders would be taken in respect of all RPT'sexcept in following cases: a. Where the transactions are below the threshold limitsspecified in the Companies Act 2013 & Rules framed thereunder or the LODR 2015 asmay be applicable; or b. Where the transactions are entered into by the Company in itsordinary course of business and are on an arms' length basis; or c. Where the transactionsto be entered into individually or taken together with previous transactions during afinancial year does not exceed ten percent of the annual consolidated turnover of theCompany as per the last audited financial statements of the Company.
Dealing with Related Party Transactions shall be in accordance with the Companies Act2013 and Rules thereunder LODR 2015 and other applicable provisions for the time beingin force.
The weblink for the policy is as mentioned below http://www.mukandengineers.com/report/Untitled%20attachment%2000136.pdf
V) Risk Management Policy of the company.
The process of identification and evaluation of various risks inherent in the businessenvironment and the operations of the Company and initiation of appropriate measures forprevention and/or mitigation of the same are dealt with by the concerned operational headsunder the overall supervision of the Chairman of the Company.
The Audit Committee/Board periodically reviews the adequacy and efficiency of theoverall risk management system.
Vi) Policy for determining Material Subsidiaries
"Material non listed Indian subsidiary" shall mean a subsidiary whose incomeor net worth exceeds 20% of the consolidated income or net worth respectively of theCompany and its subsidiaries in the immediately preceding accounting year. The Companydoes not have any Meterial Subsidiary. The web link for the policy is as mentioned belowhttp://www.mukandengineers. com/report/MEL_Policy_on_Determining__Meterial_Subsidiary__11.02.2016.pdf
Vii) Whistle Blower Policy/Vigil Mechanism
The Director/Employee to address the complaint to any Member of the EnforcementCommittee along with the available details and evidence to the extent possible. In casethe complaint is received by a person other than an enforcement committee Member thesame is required to be forwarded by him to the Enforcement Committee.
The Whistle Blower is to be protected from any kind of discrimination harassmentvictimization or any other unfair employment practice.
The Enforcement Committee to investigate and decide the case and recommend actionwithin four weeks to the Chairman. The final action to be taken will be decided by theChairman.
The Director in all cases and employee in appropriate or exceptional cases to havedirect access with the Chairman of the Audit Committee of the Board of Directors of theCompany.
The Enforcement Committee to report to the Chairman.
For and on behalf of the Board of Directors
Rajesh V. Shah chairman
Mumbai May 28 2018