1. The Directors present the 31st Annual Report and the Audited Statement of Accounts of the Company for the year ended March 31, 2017.
2. Financial Results:
(Rs. in Crores)
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Description
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Current
Year
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Previous
Year
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Revenue from operation & other Income
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118.60
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112.03
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Profit / Loss for the year before tax
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(155)
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(6.93)
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Add/(Less) : Provision for tax (including deferred tax)
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-
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0.25
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Profit / Loss after tax
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(1.55)
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(6.68)
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Add/(Less): Balance brought forward from previous year.
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16.41
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23.09
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Balance available for appropriations.
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14.86
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16.41
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3. Dividend
The Directors do not recommend any dividend on equity shares on account of loss incurred during the financial year ended 31st March, 2017.
4. Transfers to Reserves:
In view of inadequate profits for the year under review, no amount has been transferred to the Reserves.
5. Operations 5.1. General -
The Revenue from operations and other income during the year was at Rs.119 Cr as compared to Rs.112 Cr in the previous year.
5.2 Engineering -
5.2.1 The Revenue from engineering operations during the year was Rs.110 Cr as against Rs.106 Cr in previous year. During the year execution of many projects particularly Electrical Projects of BHEL and NTPC were prolonged as synchronization of power plants unit was deferred. Further due to delay in completion has increased the cost. The Company has lodged claims for cost and time overruns which are under active consideration. As per the policy of the Company, these will be considered for revenue recognition only on acceptance by client.
5.2.2 During the year Company received an order of Rs.26.66 Cr for Electrical Erection and Commissioning works for 2 Nos. 600 MW Units at KMPCL, Chattisgarh from SEPCO, a Chinese Company.
5.3 Infotech -
Revenue from Infotech Segment during the year remained at Rs. 5.40 Cr same as in the previous year.
6. Fixed Deposits
The Company can accept Fixed Deposits up to 35% of aggregate of the paid 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 the year amounted to Rs.8.73 Crs, re-paid during the year amounted to Rs.5.55 Crs and matured & unclaimed deposits as at the end of the year were Rs.0.30 Crs. The Company held Rs.17.66 Crs as Fixed Depoist as of March 31, 2017.There has been no default in repayment of deposits or payment of interest thereon during the year. There are no deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.
7. Corporate Governance
Pursuant to Regulation 27(2)(b) of SEBI (Listing Obligations and Disclosures Requirement), Regulations 2015 (“ LODR Regulations , 2015”)a report on Corporate Governance (Annexure-IV), along with Auditor’s Certificate regarding compliance of conditions of Corporate Governance and Management Discussion and Analysis is separately given in this Report as Annexure-I.
8. Extract of Annual Return
An extract of the Annual Return as provided under sub-section (3) of section 92 of the Companies Act, 2013 in the prescribed Form MGT - 9 is annexed to this report. Refer Annexure - II.
9. Meetings of the Board and its Committees.
During the year under review 4 (four) Meetings of the Board of Directors of the Company were convened and held. The relevant details, including composition of the Board, date of meetings, attendance and composition of various Committees of the Board are given in the Corporate Governance Report forming part of this report. The details regarding the composition of various committees are also available on the Company’s website www.mukandengineers.com
10. Disclosure Regarding Company’s policies under Companies Act, 2013 and (LODR) Regulations, 2015.
The Company has framed various policies as per LODR Regulations, 2015 & Companies Act, 2013; viz i) Remuneration ii) Determining material subsidiary iii)Performance evaluation of the Board, Committees and Directors, iv) Materiality of Related Party transactions, 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 of the Company www.mukandengineers.com.
11. Particulars of Loans, Guarantees and Investments
The particulars of loans, guarantee or investments given or made by the Company under section 186 of the Companies Act, 2013 are disclosed at Note No.28 of the financial statements.
12. Vigil Mechanism
The purpose of the policy is to provide a framework to promote responsible and secure Whistle Blowers and to protect Directors/employees wishing to raise a concern about serious irregularities within the Company. During the year under review, no reporting under Vigil Mechanism was made by any employee or Director of the Company.
13. Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and LODR Regulations, 2015 structured questionnaire was prepared after taking into consideration the various aspects of the Board’s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The Board of Directors expressed its satisfaction with the evaluation process.
14. Other Information
14.1 As the Company does not own an undertaking where manufacturing operations are carried out, the requirement of information to be furnished under Section 134(3)(m) of the Companies Act, 2013 is not applicable.
14.2 Details as required under Section 134(3)(h) and Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form No. AOC-2 is attached as Annexure-III.
14.3 During the year under review there were neither any foreign exchange earnings nor expenditure in foreign currency incurred.
14.4 There are no employees covered under Section 197 (12) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
14.5 None of the Directors is paid any Remuneration other than sitting fees for attending Board /other Committee meetings of the Company.
14.6 Details relating to remuneration of Key Managerial Personnel (KMP) is available in MGT-9 (Annexure-II). As per provision of Section 136(1) of the Companies Act, 2013 these particulars will be made available to a Shareholder on request.
14.7 The paid-up equity share capital as on March 31, 2017 is ' 12.58 Cr. During the year under review, the Company has neither issued shares with differential voting rights nor has granted stock options/sweat equity.
14.8 There were no significant and material orders passed by the regulators or courts or tribunal during the year under review which would impact the going concern status of the Company and its future operations.
14.9 There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and up to the date of this report.
15. Risk Management
Risk management is embedded in your Company’s operating framework. Your Company believes that managing risks helps in maximizing returns. The Company’s approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating and reporting mechanism of such risks. The risk management framework is reviewed periodically by the Board & Audit Committee.
16. Directors’ Responsibility Statement
As required by Section 134 (5) of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that:
a) In the preparation of the annual accounts for the year ending March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimated that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets 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 the Company and that such internal financial controls are adequate and were operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively
17. Directors and Key Managerial Personnel
(a) Directors retiring by Rotation
In accordance with the provisions of Section 152 and other applicable provisions of the Companies Act, 2013 and Articles of Association of the Company, Ms Anna Usha Abhram (DIN: 07072268), Director of the Company, will retire in the ensuing Annual General Meeting and being eligible, offers herself for re-appointment. The Board of Directors recommends her re-appointment.
(b) Independent Directors
The Independent Directors have submitted their Declaration of Independence, for the current year as required pursuant to Section 149(7) of the Companies Act, 2013, stating that they meet the criteria of independence as provided in sub-section 149 (6) of the Companies Act, 2013.
(c) Key Managerial Personnel (KMP)
During the year under review the Company has complied with the provisions of Section 203 of the Companies Act, 2013 and the information of the KMP is available on the website of the Company
www.mukandengineers.com.
18. Related Party Transactions
There were no Related Party Transactions (RPT) entered into by the company during the financial 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 23 of LODr Regulations, 2015.
During the year 2016-17, pursuant to Section 177 of the Companies Act, 2013 and Regulation 23(3) of LODR Regulations,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 Annexure Ill.
19. Details in respect of Internal Financial controls with reference to financial statements:
Adequate systems for internal controls provide assurances on the efficiency of operations, security of assets, statutory compliance, appropriate authorization, reporting and recording of transactions. The scope of the audit activity is broadly guided by the annual audit plan approved by the top management and audit committee. The Internal Auditor prepares regular reports on the review of the systems and procedures and monitors the actions to be taken.
20. Familiarization Programme for Independent Directors:
The Company familiarizes not only the Independent Directors but any new appointee on the Board, with a brief background of the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, operations of the Company, etc. They are also informed of the important policies of the Company, including the Code of Conduct for Board Members and Senior Management Personnel and the Code of Conduct to Regulate, Monitor and Report Trading in securities by Insiders, etc. The particulars of familiarization programme for Independent Director can be accessed through the website of the Company
www.mukandengineers.com.
21. Statutory Auditors
M/s. K. K. Mankeshwar & Co., Chartered Accountants, Auditors, Mumbai, (Registration No.106009W) were appointed as Auditors of the Company from the conclusion of 29th Annual General Meeting held on August 12, 2015 until the conclusion of 34th Annual General Meeting. This appointment is subject to ratification by the Members at each Annual General Meeting. M/s. K. K. Mankeshwar & Co., Chartered Accountants, Auditors, Mumbai, are eligible for re-appointment for the Financial Year 2017-18.
22. Auditor’s Report
The notes referred to in the Auditor’s Report are self-explanatory and hence, do not call for any comments under Section 134 of the Companies Act, 2013.
23. Secretarial Auditors and Secretarial Audit Report
The Board has appointed M/s. Ragini Chokshi &Co, (C.P.No1436) Company Secretaries in whole-time practice, to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2016-17. The report of the Secretarial Auditors is annexed to this Report as Annexure-V. The report does not contain any qualification.
24. Acknowledgement:
The Board of Directors thanks the Banks, Central and State Government Authorities, Shareholders, Customers, Suppliers, Employees and Business Associates for their continued co-operation and support to the Company.
For and on behalf of the Board of Directors
Rajesh V. Shah
Chairman
DIN: 00033371
Mumbai, May 24, 2017
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