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BOARD OF DIRECTORSRajesh V. Shah, Chairman
Niraj Bajaj –Director
Prakash V. Mehta – Independent Director
N. Ramanathan – Independent Director
R. Sankaran – Independent Director
Anna Usha Abraham – Director
KEY MANAGERIAL PERSONNELK.P. Jotwani - Manager R.G. Golatkar - Chief Financial Officer P.R. Dhruva - Company Secretary upto 17.8.2015.Dhawal J. Vora - Company Secretary w.e.f 17.8.2015.
AUDITORSM/s. K.K. Mankeshwar & Co,Chartered Accountants, Mumbai
REGISTERED OFFICEBajaj Bhawan, Jamnalal Bajaj Marg226, Nariman PointMumbai- 400021Tel: (022) 61216666/6626Fax: (022) 22886663E-mail: [email protected]: www.mukandengineers.comCIN: L45200MH1987PLC042378
BANKERSCentral Bank of India
REGISTRAR AND TRANSFER AGENTSBigshare Services Pvt. Ltd.E-2/3, Ansa Industrial Estate, Saki Vihar Road,Sakinaka, Andheri (East), Mumbai- 400072 Tel.: (022) 28470652 / 0653 / 40430200 Fax : (022) 28475207E-mail: [email protected]: www.bigshareonline.com
A Request:As a measure of economy, copies of Annual Report will not be distributed at the Annual General Meeting. Members are therefore requested to bring their copy of the Report to the meeting.
Cover Picture- Installation and Commissioning of Furnace and Tuyere Shell under modernisation of Blast Furnace # 2 at RINL Visakhapatnam
30th Annual Report 2015-2016
ANNUAL GENERAL MEETINGOn Monday, 8th August, 2016 at 11.30 a.m.
at Kamalnayan Bajaj Hall,Bajaj Bhawan, Jamnalal Bajaj Marg,
226, Nariman Point, Mumbai- 400 021.
CONTENTS Page No.
Notice 1
Directors’ Report 6
Management Discussion and Analysis 9
Corporate Governance 18
Independent Auditors’ Report 28
Balance Sheet 32
Statement of Profit & Loss 33
Cash Flow Statement 34
Notes to the Accounts 36
IMPORTANT COMMUNICATION TO MEMBERS
The Ministry of Corporate Affairs (MCA) has taken a “Green Initiative in the Corporate Governance” by allowing paperless compliances by the companies and has issued circulars stating that service of Notice/ documents including Annual Report can be made by e-mail to their members. To support this green initiative of the Government in full measure, Members who have not registered their e-mail addresses, in respect of electronic holdings with the Depository can register through their concerned Depository Participants. Members who hold shares in physical form are requested to send the above information i.e. e-mail address to the Company at [email protected] OR to the Registrar and Transfer Agents of the Company at [email protected] for registration of their e-mail address.
FINANCIAL HIGHLIGHTS
2015-2016 2014-2015 2013-2014 2012-2013 2011-2012
I CAPITAL ACCOUNTS
A. Share Capital 1,258 1,258 1,258 1,258 1,258
B. Reserves 3,962 4,631 4,554 4,519 4,304
C. Net Worth (A+B) 5,220 5,889 5,812 5,777 5,562
D. Borrowings 4,552 3,972 4,507 4,553 4,152
E. Gross Block 3,092 2,971 3,149 3,136 2,875
F. Net Block 752 722 993 1,065 856
G. Debt-Equity Ratio (D/C) 0.87:1 0.67:1 0.78:1 0.79:1 0.75:1
II REVENUE ACCOUNTS
A. Gross Revenue 11,203 14,136 8,850 7,811 6,866
B. Profit / (Loss) before Taxes (PBT) (693) 137 272 532 534
C. Profit / (Loss) after Taxes (PAT) (668) 178 182 362 329
D. Return on Shareholder’s Fund % (12.80) 3.02 3.13 6.27 5.91
III EQUITY SHAREHOLDERS' EARNINGS
A. Equity Dividend - - 126 126 126
B. Earnings per Equity Share (in `) (5.31) 1.41 1.44 2.88 2.62
C. Dividend per Equity Share (in `) - - 1.00 1.00 1.00
D. Net Worth per Equity Share (in `) 41.53 46.84 46.23 45.95 44.24
(` In Lacs)
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TO THE MEMBERS,NOTICE is hereby given that the 30th ANNUAL GENERAL MEETING of the Members of the Company will be held on Monday, the 8th day of August, 2016 at 11:30 a.m. at Kamalnayan Bajaj Hall, Bajaj Bhavan, Jamnalal Bajaj Marg, 226, Nariman Point, Mumbai - 400021, to transact the following business:-ORDINARY BUSINESS:1. To consider and adopt the Audited Annual Financial
Statements for the year ended March 31, 2016 and the Report/s of the Board of Directors and Auditors’ thereon.
2. To appoint a Director in place of Shri Rajesh V. Shah (DIN: 00033371), who retires by rotation and being eligible, offers himself for re-appointment.
3. To ratify appointment of M/s. K. K. Mankeshwar & Co., Chartered Accountants (Registration No.106009W), as Statutory Auditors of the Company for the financial year 2016-17 at such remuneration as may be agreed upon by the Board of Directors and the Statutory Auditors of the Company.
SPECIAL BUSINESS:4. To consider and if thought fit, to pass the following
Resolution as an Ordinary Resolution:- “RESOLVED THAT pursuant to the provisions of
the Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges and Section 188 of the Companies Act, 2013 read with the Companies (Meeting of Board and its Powers) Rules, 2014 as applicable and any amendments thereto and subject to such other approvals, consents, permissions and sanctions of any authorities as may be necessary, consent of the Company be and is hereby accorded to the Board of Directors to ratify/ approve all existing contracts / arrangements/ agreements entered into / to be entered with Mukand Limited and Mukand Global Finance Limited, (a wholly owned subsidiary of Mukand Limited), a Group Company and hence a related party within the meaning of the aforesaid law, the value of which either singly or all taken together may exceed ten percent of the annual turnover of the Company as per Audited Financial Statements for financial year 2015-16; having following details and more detailed in the Explanatory Statement annexed hereto:
Description of Contract Period of Contract
Total cumulative
contract value with Related
Parties (` in Lacs)
Contract Execution - Design, Erection, Commissioning & Transportation, Consultancy Service – PMS, Contract Execution - Interest on delayed payments, Maintenance Service - Maintenance of EDP System.
April 1 , 2016 to March 31,
2017.
1,621.00
Corporate Guarantee given by Mukand Limited on behalf of the Company for credit facilities.
April 1, 2016 to March 31,
2017.
11,500.00
RESOLVED FURTHER THAT the Board be and is hereby authorized to take such steps as may be necessary for obtaining approvals, statutory or contractual if any, in relation to the above and be authorized to approve aforesaid transactions and the terms & conditions thereof.
RESOLVED FURTHER THAT the Board be and is hereby authorised on behalf of the Company to do all such acts, deeds and things, to sign, execute all such documents, instruments in writing on an ongoing basis as may be required in its absolute discretion pursuant to the above Resolution.”
NOTES FOR MEMBER'S ATTENTION:1. Explanatory Statement pursuant to Section 102 of the
Companies Act, 2013 forms part of this Notice.2. A MEMBER ENTITLED TO ATTEND AND VOTE IS
ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE, INSTEAD OF HIMSELF/HERSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.
A person can act as a Proxy on behalf of members upto and not exceeding Fifty and holding in the aggregate not more than ten percent of the total share capital of the Company carrying voting rights. Further, a member holding more than ten percent of the total share capital of the Company carrying voting rights may appoint a single person as Proxy and such person shall not act as a Proxy for any other person or shareholder. The instrument appointing a Proxy, must be deposited at the registered office of the company not less than 48 (forty-eight) hours before the commencement of the meeting. Members may please note that a Proxy does not have the right to speak at the Meeting and can vote only on poll..
3. Pursuant to the provisions of Section 91 of the Companies Act, 2013, the Register of Members and the Share Transfer Books of the Company will remain closed from Saturday, 30th July, 2016 to Monday, 8th August, 2016 (both days inclusive).
4. As regards the re-appointment of retiring Director Shri Rajesh V. Shah referred to in item no. 2 of the Notice, his brief resume, including shareholding details, have been given in the Report on Corporate Governance which forms part of the Directors’ Report and Members are requested to refer to the same.
5. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules made there under, and in terms of the approval given by the members at the 29th Annual General Meeting of the Company held on 12th August, 2015, the current auditors of the Company, M/s K. K. Mankeshwar & Co., Chartered Accountants (Registration No.106009W), are eligible to hold the office for a period of five years, upto the 34th Annual General Meeting, subject to ratification by members at every subsequent Annual General Meeting. The ratification of appointment of M/s K. K. Mankeshwar & Co., Chartered Accountants as Statutory Auditors from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting along with their remuneration has been put up for the approval of members.
NOTICE
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6. Members desiring any information with regards to Accounts / Reports are requested to write to the Company Secretary at least ten days before the Meeting to enable the Management to keep the information ready at the Meeting.
7. Members who have neither received nor encashed their dividend warrant(s) for any of the Financial Years from 2009-2010 upto 2013-2014, are requested to write to the Registrar and Share Transfer Agents of the Company mentioning the relevant Folio Number(s) / DP ID, for issuance of duplicate dividend warrant(s).
In compliance with the provisions of Section 125 of the Companies Act 2013, the Company has identified the unclaimed and unpaid amounts for the financial year ended 31st March, 2010 to 31st March, 2015 and requisite detailed information was uploaded on the Ministry’s website through e-form 5 INV and also on the Company’s website within the prescribed time limit.
Further the Company has identified the unclaimed amount of dividend upto the financial year ended March 31, 2016 and requisite detailed information will be uploaded on the Ministry’s website through e-form 5 INV and also on the Company’s website within the prescribed time limit.
8. Members holding shares in the dematerialised mode are requested to intimate all changes with respect to their bank details, mandate, nomination, power of attorney, change of address, change in name etc. to their Depository Participant (DP). These changes will be automatically reflected in Company’s records, which will help the Company to provide efficient and better service to the Members.
9. Electronic copy of the 30th Annual Report alongwith proxy form and route map is being sent to all the Members whose E-mail IDs are registered with the Company / Depository Participants(s) for communication purpose and have given positive consent to receive the Annual Report in electronic form, unless any Member has requested for a physical copy of the same. For Members who have not registered their E-mail IDs, physical copies of the 30th Annual Report are being sent in the permitted mode. Notice alongwith proxy form and route map is also available on the Company's website.
10. To avoid fraudulent transactions, the identity/signature of the Members holding shares in electronic/demat form is verified with the specimen signatures furnished by NSDL / CDSL and that of Members holding shares in physical form is verified as per the records of the share transfer agent of the Company (i.e. Bigshare Services Pvt. Ltd). Members are requested to keep the same updated.
11. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every person dealing in securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN to their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to the Company or Bigshare Services Pvt. Ltd.
12. With a view to help us serve the Members better and those who hold shares in identical names and in the same order of names in more than one folio are requested to write to the Company to consolidate their holdings in one folio.
13. Members, who still hold share certificates in physical form are advised to dematerialise their shareholding to avail the numerous benefits of dematerialisation, which include easy liquidity, ease of trading and transfer, savings in stamp duty and elimination of any possibility of loss of documents and bad deliveries.
14. Corporate members are requested to send in advance, duly certified copy of the Board Resolution / Power of Attorney authorising their representative to attend the Annual General Meeting.
15. Please note that for security reasons, no article / baggage will be allowed at the venue of the meeting.
16. Documents referred to in the Notice and the Explanatory Statement shall be open for inspection by the members at the registered office of the Company on all working days (Monday to Friday) from 10.00 a.m. to 1.00 p.m. except holidays, upto the date of meeting
17. The Company has been maintaining, inter-alia, the following Statutory Registers at its Registered Office which are open for inspection in terms of the applicable provisions of the Companies Act, 2013 by members and others as specified below:
a) Register of Contracts or arrangements in which Directors are interested under Section 189 of the Companis Act, 2013 on all working days during business hours. The said Registers shall also be produced at the commencement of the Annual General Meeting of the Company and shall remain open and accessible during the continuance of the meeting to a person having the right to attend the meeting.
b) Register of Directors and Key Managerial Personnel (KMP) and their shareholding under Section 170 of the Companies Act, 2013 on all working days during the business hours. The said Registers shall also be produced at the commencement of the Annual General Meeting of the Company and shall remain open and accessible during the continuance of the meeting to a person having the right to attend the meeting.
18. Pursuant to the provision of Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014, as amended and Regulation 44 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company is offering remote e-voting facility to its members in respect of the business to be transacted at the Annual General Meeting (AGM) scheduled to be held on Monday, August 8, 2016 at 11:30 a.m. with a request to follow the instructions for voting electronically as given hereinbelow:-
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A) The instructions for members for remote e-voting electronically are as under:-
(i) The voting period begins on Thursday, August 4, 2016 at 10.00 a.m. and ends on Sunday, August 7, 2016 at 5.00 p.m. During this period shareholders’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date (record date) of August 1, 2016 may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.
(ii) Log on to the e-voting website www.evotingindia.com
(iii) Click on Shareholders
(iv) Now Enter your User ID
a. For CDSL: 16 digits beneficiary ID,
b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,
c. Members holding shares in Physical Form should enter Folio Number registered with the Company.
(v) Next enter the Image Verification as displayed and Click on Login.
(vi) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier voting of any company, then your existing password is to be used.
(vii) If you are a first time user follow the steps given below:
For Members holding shares in Demat Form and Physical FormPAN Enter your 10 digit alpha-numeric
PAN issued by Income Tax Department (Applicable for both demat shareholders as well as physical shareholders)• Members who have not updated
their PAN with the Company/Depository Participant are requested to use the first two letters of their name and the 8 digits of the sequence number (refer serial no. printed on the name and address sticker/Postal Ballot Form/mail) in the PAN field.
• In case the sequence number is less than 8 digits enter the applicable number of 0’s before the number after the first two characters of the name in CAPITAL letters. E.g. If your name is Ramesh Kumar with serial number 1 then enter RA00000001 in the PAN field.
Dividend Bank Details OR Date of Birth (DOB)
Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded in your demat account or in the company records in order to login.• If both the details are not
recorded with the depository or company please enter the member id / folio number in the Dividend Bank details field as mentioned in instruction (iv).
(viii) After entering these details appropriately, click on “SUBMIT” tab.
(ix) Members holding shares in physical form will then reach directly the Company selection screen. However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.
(x) For Members holding shares in physical form, the details can be used only for e-voting on the Resolutions contained in this Notice.
(xi) Click on the EVSN for the relevant MUKAND ENGINEERS LIMITED on which you choose to vote.
(xii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.
(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.
(xiv) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.
(xv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.
(xvi) You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.
(xvii) If Demat account holder has forgotten the changed password then Enter the User ID and the image verification code and click on Forgot Password & enter the details as prompted by the system.
(xviii) Shareholders can also cast their vote using CDSL’s mobile app m-Voting available for android based mobiles. The m-Voting app can be downloaded from Google Play Store. Apple and Windows phone
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users can download the app from the App Store and the Windows Phone Store respectively on or after 30th June 2016. Please follow the instructions as prompted by the mobile app while voting on your mobile.
(xix) Note for Non–Individual Shareholders and Custodians
l Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required to log on to www.evotingindia.com and register themselves as Corporate.
l A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected].
l After receiving the login details a Compliance User should be created using the admin login and password. The Compliance User would be able to link the account(s) for which they wish to vote on.
l The list of accounts linked in the login should be mailed to [email protected] and on approval of the accounts they would be able to cast their vote.
l A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.
B) In case of members receiving the physical copy:1) Please follow all steps from Sr.no.(i) to
Sr.no.(xix) above to cast vote.
2) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.com under help section or write an email to [email protected].
C ) For members who wish to vote using ballot form:• In addition to the remote e-voting facility as
described above, the Company shall make a voting facility available at the venue of the Annual General Meeting, through polling paper as provided in section 107 of the Companies Act, 2013 read with Rule 20 of the Rules and members attending the meeting who have not already cast their votes by remote e-voting shall be able to exercise their right at the meeting.
• Members who have cast their votes by remote e-voting prior to the meeting may attend the meeting, but shall not be entitled to cast their vote again.
D) General instructions:i. The Board of Directors has appointed M/s. Ragini
Chokshi & Co., Practising Company Secretary (CP No.1436) as the scrutiniser to the e-voting process and voting at the venue of the Annual General Meeting in a fair and transparent manner.
ii. The scrutiniser shall, immediately after the conclusion of voting at the General Meeting, first count the votes cast at the meeting, thereafter unlock the votes through e-voting in the presence of at least two (2) witnesses, not in the employment of the Company and make, not later than three (3) days from the conclusion of the meeting, a consolidated scrutiniser’s report of the total votes cast in favour or against, if any, to the Chairman of the Company, who shall countersign the same.
iii. The scrutiniser shall submit his report to the Chairman, who shall declare the result of the voting. The results declared alongwith the scrutiniser’s report shall be placed on the Company’s and CDSL website. It shall also be communicated to the stock exchanges. The resolution shall be deemed to be passed at the Annual General Meeting of the Company Scheduled to be held on Monday, August 8, 2016.
By Order of the Board For Mukand Engineers Limited
Dhawal J. Vora Company Secretary
Mumbai, May 20, 2016.
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ANNEXURE TO NOTICEEXPLANTORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013
Item No.4 of the NoticePursuant to Section 188 of the Companies Act, 2013 (“the Act”), read with Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014 the Company is required to obtain consent of the Board and prior approval of the Members by way of an Ordinary Resolution in case certain Related Party Transactions exceed such sum as is specified in the rules. The aforesaid provisions are not applicable in respect transactions entered into by the Company in the ordinary course of business and on an arm’s length basis.However, pursuant to Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 approval of the shareholders through Ordinary Resolution is required for all ‘material‘ related party transactions (RPT) even if they are entered into in the ordinary course of business on an arm’s length basis. For this purpose, a RPT will be considered ‘material’ if the transaction / transactions to be entered into individually or taken together with previous transactions during a financial year exceed 10% of the annual consolidated turnover of the Company as per the last audited financial statements of the Company.The following transactions to be entered into by the Company, together with transactions already entered into by the Company with Mukand Limited (“ML”) and Mukand Global Finance Ltd. (a wholly owned subsidiary of Mukand Ltd.), a group Company and therefore a related party, during the current financial year, even though are in the ordinary course of business and on an arm’s length basis, are estimated to exceed 10% of the annual turnover of the Company as per the audited financial statements of the Company for the year ended 31st March, 2016:-
Related Parties Transactions where control / significant influence exists:- Financial Year 2016-2017Sr.No. Name of Party Nature of Work Total ` (In Lacs) Basis for Pricing
A Operations – Income1 Mukand Ltd. Contract Execution - Design, Erection,
Commissioning & Transportation900.00 Bills raised as per contract.
2 Mukand Ltd. Contract Execution - Interest on delayed payments
20.00 Interest charged to Mukand Ltd. on delayed payment against bills. Rate of Interest - 15.50%
3 Mukand Ltd. Maintenance Service - Maintenance of EDP System
600.00 Bills raised as per contract.
Total 1,520.00B. Operations – Expenses1 Mukand Ltd. Rent 45.00 Bills raised as per Agreement for office space.2 Mukand Ltd. Electricity Charges 42.00 Bills raised as per Agreement Electricity consumed3 Mukand Ltd. Bus Service for staff/IT Infrastructure 11.00 Bills raised as per Agreement for office staff.
Total 98.004 Mukand Global Finance Ltd. (a wholly
owned subsidiary of Mukand Ltd.)Management Fees – Fixed Deposit System Management
3.00 Bills raised as per Contract
Total 3.00C. Others- Corporate Guarantee
Corporate Guarantee given by Mukand Limited on behalf of the Company for credit facilities
11,500.00 Corporate Guarantee given by Mukand Limited to Central Bank of India. No Commission charged.
The other particulars of above transactions are as under:-Sr. No. Name of Party Particulars
a. Name of the Related Party Mukand Limited and Mukand Global Finance Limited (a wholly owned subsidiary of Mukand Ltd.)
b. Name of the Director or Key Managerial Personnel who is related, if any:
Shri Rajesh V. Shah- Chairman, Shri Niraj Bajaj- Director & Shri Prakash V. Mehta- Director.
c. Nature of Relationship: Group Companyd. Nature, Material Terms, Monetary Value and Particulars of
the contract or arrangementAs details above
e. Any other information relevant or important for the members to take a decision on the proposed resolution:
The transactions are in the ordinary course of business and on an arm’s length basis.
The above transactions are approved by the Audit Committee as per the provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015.In view the above, it is proposed to seek approval of the Members of the Company through an Ordinary Resolution for the above transactions and the related parties are abstained from voting on the said resolution.None of the Directors, Key Managerial Personnel or their relatives is interested or concerned in the said Resolution except for their holdings in the shares of the Company, if any and to the extent of their memberships and/ or directorships in the subsidiaries and associate companies, if any.Accordingly, your Directors recommend the Resolution mentioned in Item 4 of the Notice for the approval of the Members.
By Order of the Board For Mukand Engineers Limited
Dhawal J. Vora Mumbai, May 20, 2016. Company Secretary
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DIRECTOR’S REPORTTO THE MEMBERS,1. Your Directors present the 30th Annual Report and the
Audited Statement of Accounts of the Company for the year ended March 31, 2016.
2. Financial Results:
(` in Lacs)Description Current Year Previous YearIncome from operation and other Income
11,203 14,136
Profit / (Loss) for the year before tax
(693) 137
Add/(Less) : Provision for tax (including deferred tax)
(25) (41)
Profit / (Loss) after tax (668) 178Add/(Less):Balance brought forward from previous year.
2,309 2,131
Balance available for appropriation
1,641 2,309
3. Dividend The Directors do not recommend any dividend on equity
shares on account of losses incurred during the financial year ended 31st March, 2016.
4. Operations4.1. General - The income from operations and other income
during the year was at ̀ 112 Crores as compared to ` 141 Crores in the previous year.
4.2 Engineering -4.2.1 The income from Engineering operation during the
year was ` 106 Crores as against ` 134 Crores in previous year. During the year Electrical Projects of BHEL and NTPC were not completed due to non availability of fronts as synchronization of power plants unit were deferred, due to which there was increase in the fixed expenses. Further due to stiff competition in the market margins have shrunk.
The Company has lodged claims for cost and time overrun which are under active consideration by the client. As per the policy of the Company these will be considered only on acceptance by client. The Management expects to close these projects in all respects by first half of the current financial year 2016-17 and to expedite the escalation claims which on realization will reflect positive results.
4.2.2 During the year Company received orders of ` 19.35 Crores from NTPC Barh, Patna and BHEL Suratgarh, Rajasthan. The orders on hand will be executed during the Financial Year 2016-17 and beyond.
4.3 Infotech - Income from Infotech Segment during the year was
` 5.40 Crores as compared to ` 5.04 Crores in the previous year.
5. Fixed Deposits The Company held ` 14.51 Crores as Public Deposits as
of March 31, 2016 out of which deposits aggregating to ` 0.34 Crores have matured but remain unclaimed as on that date. The Company sends reminder letters to the Fixed Deposit Holders before the date of Maturity of their Fixed Deposits. According to the provisions of Section 73 of the Companies Act 2013, the Company can accept deposits only from its Members and not from Public. Further Section 74 of the said Act, provides that all deposits accepted and outstanding as on March 31, 2014 under the erstwhile Companies Act, 1956 were required to be repaid latest by March 31, 2015, or such further time as allowed by the Company Law Board (CLB) on application made to it, irrespective of the date/s of maturity. In compliance of the above provisions, the Company is not accepting deposits from the Public and deposits from the Members are being accepted to the extent the limit is available. The Company has also submitted an application to CLB to allow it to retain the deposits accepted under the erstwhile Companies Act, 1956, till their maturity. CLB vide its Order dated May 19, 2015 has granted permission to the Company to repay the Fixed Deposits as per due dates.
6. Corporate Governance Pursuant to Regulation 27(2)(b) of SEBI (Listing
Obligations and Disclosure Requirement), Regulations 2015, SEBI (LODR) Regulations, 2015, a Report on Corporate Governance, alongwith Auditor’s Certificate regarding compliance of conditions of Corporate Governance and Management Discussion and Analysis is separately given in this Report as Annexure-I.
7. 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 as Annexure – II.
8. Meetings of the Board and its Committees. During the year, 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 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.
9. Disclosure Regarding Company’s policies under Companies Act, 2013 and SEBI (LODR) Regulations, 2015.
The Company has framed various Policies as per SEBI (LODR) Regulations, 2015 and Companies Act, 2013; viz Remuneration Policy, Policy on determining material subsidiary, Performance evaluation of the Board, Committees and Directors, Materiality of Related Party transactions, Whistle Blower/Vigil Mechanism, Archival Policy for disclosure, Policy on Board diversity and Code of Conduct for Directors and these policies are displayed on the website of the Company www.mukandengineers.com.
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10. 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 nos. 11 & 28 of the financial statements
11. VIGIL MECHANISM The Board approved Vigil Mechanism of the Company at
its meeting held on 10th November, 2014. The purpose of the policy is to provide a framework to promote a responsible and secure Whistle Blowing 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.
12. Other Information12.1 As the Company does not own an undertaking
where manufacturing operations are carried out, the information to be furnished under Section 134(3)(m) of the Companies Act 2013, is not applicable.
12.2 Details as required under Section 134(3)(h) and Rules 8(2) of the Companies (Accounts) Rules, 2014 in Form No. AOC-2 is attached as Annexure-III
12.3 During the year, there were niether foreign exchange earnings nor any expenditure incurred.
12.4 There are no employees covered under Section 197 (12) read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
12.5 None of the Directors is paid any Remuneration other than sitting fees for attending Board/other Committee meetings of the Company.
Details of remuneration of Key Management Personnel (KMP) as compared to median remuneration of the employees and other details are as under:i) The ratio of the remuneration of each (KMP)
to the median remuneration of the employees of the Company for the Financial Year 2015-16 and percentage increase in remuneration over last Financial Year.
Name and Designation of KMP
Ratio of remuneration of KMP with
respect to median
remuneration of employees
Percentage increase in
remuneration over last Financial
Year
K. P. Jotwani, Manager
7.36:1 11%
R. G. Golatkar,Chief Financial Officer
2.84:6 20%
P. R. Dhruva/Dhawal J. VoraCompany Secretary
2.82:0 -
ii) The percentage increase in the median remuneration of employees in the financial year is 6.6%.
iii) There are 190 permanent employees on the rolls of the Company as on March 31, 2016.
12.6. The paid-up equity share capital as on March 31, 2016 is ` 12.58 Crores. During the year, the Company has neither issued shares with differential votings rights nor has granted stock options / sweat equity.
12.7 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.
13. Director's 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, 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures;
b) the Directors had 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 loss of the Company for that period;
c) the Directors had 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 had prepared the annual accounts on a going concern basis;
e) the Directors, in the case of a listed Company, had 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 had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
14. Directors and Key Managerial Personnel14(a) Directors retiring by Rotation In accordance with the provisions of Section 152
and other applicable provision of the Companies Act, 2013 and Articles of Association of the Company, Shri Rajesh V. Shah (DIN: 00033371), Director of the Company, will retire in the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board of Directors recommends his re-appointment.
8
14(b) Independent Directors The Companies Act, 2013 provides for the
appointment of Independent Directors. Further, Section 149(10) of the Act provides that Independent Directors shall hold office for a term of upto five consecutive years on the Board of a Company; and shall be eligible for re-appointment on passing of a Special Resolution by the Members of the Company. Accordingly, the Board appointed Shri Prakash V. Mehta (DIN:00001366), Shri R. Sankaran (DIN:00381139) and Shri N. Ramanathan (DIN:01566914) as Independent Directors, for a period of five years (not liable to retire by rotation) under Section 149 of the Companies Act, 2013 till the 33rd Annual General Meeting, which was approved by the Shareholders in their Annual General Meeting held on August 13, 2014.
The Independent Directors have submitted their Declaration of Independence, for the current Financial Year as required pursuant to Section 149(7) of the Companies Act, 2013, stating that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013.
14(c) Key Managerial Personnel In accordance with Section 203 of the Companies
Act, 2013 Mr. Dhawal J. Vora was appointed as Company Secretary and Compliance Officer on August 17, 2015 of the Company in place of Shri P.R. Dhruva who got superannuated from the Company.
During the year under review the Company has complied with the provisions of Section 203 of the Companies Act, 2013 which provides for the appointment of Key Managerial Personnel details of which are also available on the website of the Company.
15. Related Party Transactions There were no Related Party Transactions (RPTs) entered
into by the Company during the financial 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 23 of SEBI (LODR) Regulations, 2015.
During the year 2015-16, pursuant to Section 177 of the Companies Act, 2013 and Regulation 23(3) of SEBI (LODR) Regulations, 2015, all RPTs were placed before Audit Committee for its prior / omnibus approval. The disclosure regarding the same in Form AOC- 2 is furnished in Annexure- III.
The policy on RPTs as approved by Board is uploaded on the Company’s website.
16. 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's prepares regular reports on the review of the systems and procedures and monitors the actions to be taken.
17. Statutory Auditors M/s. K. K. Mankeshwar & Co., Chartered Accountants,
Auditors, Mumbai, (Registration No.106009W) were appointed as Auditors of the Company at the 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 every subsequent Annual General Meeting. M/s. K. K. Mankeshwar & Co., Chartered Accountants, Auditors, Mumbai, are eligible for re-appointment for Financial Year 2016-17.
18. Auditor's Report The notes referred to in the Auditors’ Report are self-
explanatory and hence, do not call for any comments under Section 134 of the Companies Act, 2013.
19. Secretarial Auditors and Secretarial Audit Report The Board has appointed M/s. Ragini Chokshi & Co (C.P.
No: 1436), 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 2015-16. The report of the Secretarial Auditors is annexed to this Report as Annexure-IV. The Report does not contain any qualification.
20. Acknowledgement: The Board of Directors thanks the Banks, Financial
Institutions, 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 20, 2016.
9
MANAGEMENT DISCUSSION AND ANALYSIS1 Engineering Construction Division
1.1 Industry Structure and Developments The Capital Goods industry forms the backbone of
the manufacturing sector as it comprises of goods required for manufacturing. Thus it can be said that the capital goods industry has a significant multiplier effect on the overall economic growth as it forms the foundational building blocks for a large number of user industries by providing critical inputs, such as machinery and equipment, necessary for manufacturing.
Your company is in the field of capital goods offering services in the areas of engineering construction including feasibility studies, planning, procurement, construction, erection and commissioning of projects across industries such as heavy electrical equipment, process plant equipment and metallurgical equipment.
Today business of the Company continues mainly in the areas of Supply and Installation of equipments for Power Generation Plants & Integrated Steel Plants. The contracts cover erection of Mechanical Plant and Structural, Piping & Electrical Works. The Company also undertakes Engineering and Project Management jobs for Steel Plants and Electrical works at Power Plants.
1.2 Opportunity and threats During the year under review, the Company booked
new orders valued at ` 19.35 Crores from Power and Steel projects. The existing recessionary trend will not have any significant impact on the performance of the Company in the near term with over ` 200 Crores of order book on hand.
1.3 Future Outlook The outstanding order position as on March 31,
2016 is ` 213 Crores to be executed progressively upto 2018 consisting supply and erection of steel plants, power projects. Due to slow down in the economy, expansion and new capacities are given less priority and that results in delays in completion of projects. With the order book
position, the Company expects executable load over the next 2 years. The Management perceives that with the economy showing signs of revival in the current fiscal, the capital investments in the economic sectors of interest to the company can be reasonably expected. The Company has tendered for jobs in Power, Steel, Cement, Lime Calcination Plants, Waste Gas Heat Recovery Power Plants which are in various stages of finalization.
1.4 Risk Management As the contracts undertaken by the Company are
generally in the Public Sector and in reputed Private Sector companies, the risk of payment defaults by the clients is negligible. The Company evaluates project location environment risks while bidding and before accepting contracts. The provision for escalation in cost due to delays in execution of project is considered while quoting tenders. There are also escalation clauses in the major value contracts from Public Sector.
2 Internal Control System The Company has instituted a system of internal control
to safeguard and protect the assets of the Company. The Company has also appointed a Internal Auditor's whose reports are regularly reviewed by the Management, and guidelines and procedures are formulated and monitored for proper controls.
3 Human Resource Management Initiatives The Company has adequately increased the supervisory
and managerial staff. Further recruitments have been planned at various levels to successfully complete new large orders and improve profitability through systematic training in site operational control and management.
4 Cautionary Statements Statements made herein describing the Company’s
expectations or predictions are “forward-looking statements”. The actual results may differ from those expected or predicted. Prime factors that may make a difference to the Company’s performance include market conditions, input costs, interest costs, Government regulations, economic developments within/outside the country.
ANNEXURE-I
10
ANNEXURE-IIFORM NO. MGT 9
EXTRACT OF ANNUAL RETURN
As on financial year ended on 31st March, 2016.
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014.
I. REGISTRATION & OTHER DETAILS:
1. CIN L45200MH1987PLC042378
2. Registration Date 30th January, 1987
3. Name of the Company MUKAND ENGINEERS LIMITED
4. Category/Sub-category of the Company Public Company / Limited by shares
5. Address of the Registered office & contact details Bajaj Bhavan, Jamnalal Bajaj Marg,226, Nariman Point, Mumbai 400 021.Tel: (022) 61216666/6626Fax: (022) 22886663E-mail: [email protected]: www.mukandengineers.com
6. Whether listed company Yes (Listed on NSE & BSE)
7. Name, Address & Contact details of the Registrar & Transfer Agent, if any.
Bigshare Services Pvt LtdE-2/3, Ansa Industrial Estate, Saki Vihar RoadSakinaka, Andheri East, Mumbai- 400072Tel : (022) 28470652 / 0653 / 40430200.Fax : (022) 28475207E-Mail : [email protected] : www.bigshareonline.com
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10 % or more of the total turnover of the company shall be stated)
Sr. No.
Name and Description of main products / services NIC Code of the Product/service
% to total turnover of the company
1 Engineering & Construction 99542909 95.14
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES - NIL
11
IV.
SH
AR
E H
OLD
ING
PA
TTE
RN
(Equ
ity S
hare
Cap
ital B
reak
up a
s pe
rcen
tage
of T
otal
Equ
ity)
A)
Cat
egor
y-w
ise
Sha
re H
oldi
ng
Cat
egor
y of
Sha
reho
lder
sN
o. o
f Sha
res
held
at t
he b
egin
ning
of t
he
year
[As
on 1
-Apr
il-20
15]
No.
of S
hare
s he
ld a
t the
end
of t
he y
ear
[As
on 3
1-M
arch
-201
6]%
Cha
nge
durin
g th
e ye
arD
emat
Phys
ical
Tota
l%
of T
otal
Sh
ares
Dem
atPh
ysic
alTo
tal
% o
f Tot
al
Shar
esA
. Pro
mot
ers
(1) I
ndia
na)
Indi
vidu
al/ H
UF
7006
030
7006
035.
5770
0603
070
0603
5.57
0.00
b) C
entra
l Gov
t0
00
00
00
00.
00c)
Sta
te G
ovt(s
)0
00
00
00
00.
00d)
Bod
ies
Cor
p.60
5477
60
6054
776
48.1
660
5477
60
6054
776
48.1
60.
00e)
Ban
ks /
FI0
00
00
00
00.
00 f)
Any
oth
er0
00
00
00
00.
00To
tal s
hare
hold
ing
of P
rom
oter
(A)
6755
379
067
5537
953
.73
6755
379
067
5537
953
.73
0.00
B. P
ublic
Sha
reho
ldin
g1.
Inst
itutio
ns0
00
00
00
00.
00a)
Mut
ual F
unds
100
700
800
0.01
070
070
00.
010.
00b)
Ban
ks /
FI65
2318
2383
0.02
6523
1823
830.
020.
00c)
Cen
tral G
ovt
00
00
00
00
0.00
d) S
tate
Gov
t(s)
00
00
00
00
0.00
e) V
entu
re C
apita
l Fun
ds0
00
00
00
00.
00f)
Insu
ranc
e C
ompa
nies
00
00
00
00
0.00
g) F
IIs0
6565
0.00
065
650.
000.
00h)
For
eign
Ven
ture
Cap
ital F
unds
00
00
00
00
0.00
i) O
ther
s (s
peci
fy)
00
00
00
00
0.00
Sub-
tota
l (B
)(1):-
165
3083
3248
0.03
6530
8331
480.
030.
002.
Non
-Inst
itutio
nsa)
Bod
ies
Cor
p.96
8280
4046
210
0874
28.
0210
7835
740
462
1118
819
8.90
0.88
i) In
dian
00
00
00
00
0ii)
Ove
rsea
s0
00
00
00
00
b) In
divi
dual
s0
00
00
00
00
i) In
divi
dual
sha
reho
lder
s ho
ldin
g no
min
al s
hare
ca
pita
l upt
o `
1 la
kh29
1080
934
2467
3253
276
25.8
829
0320
033
5937
3239
137
25.7
6(0
.12)
ii) In
divi
dual
sha
reho
lder
s ho
ldin
g no
min
al s
hare
ca
pita
l in
exce
ss o
f ` 1
lakh
1056
549
010
5654
98.
4011
1979
40
1119
794
8.91
0.51
c) O
ther
s (s
peci
fy)
00
00
00
00
0N
on R
esid
ent I
ndia
ns19
3211
617
1938
281.
5422
8136
617
2287
531.
820.
28O
vers
eas
Cor
pora
te B
odie
s0
00
00
00
00
Fore
ign
Nat
iona
ls0
00
00
00
00
Cle
arin
g M
embe
rs41
280
041
280
0.33
1767
20
1767
20.
14(0
.19)
Trus
ts88
948
1711
5026
0098
2.07
8894
875
089
698
0.71
(1.3
6)Fo
reig
n B
odie
s - D
R0
00
00
00
00
Sub-
tota
l (B
)(2):-
5259
077
5546
9658
1377
346
.24
5436
107
3777
6658
1387
346
.24
0.00
Tota
l Pub
lic S
hare
hold
ing
(B)=
(B)(1
)+ (B
)(2)
5259
242
5577
7958
1702
146
.27
5436
172
3808
4958
1702
146
.27
0.00
C. S
hare
s he
ld b
y C
usto
dian
for G
DR
s &
AD
Rs
00
00
00
00
0G
rand
Tot
al (A
+B+C
)12
0146
2155
7779
1257
2400
100.
0012
1915
5138
0849
1257
2400
100.
000
12
B)
Sha
reho
ldin
g of
Pro
mot
er
Sr.
No.
Sha
reho
lder
’s N
ame
Sha
reho
ldin
g at
the
begi
nnin
g of
the
year
Sha
reho
ldin
g at
the
end
of th
e ye
ar%
cha
nge
in
shar
ehol
ding
du
ring
the
year
No.
of S
hare
s%
of t
otal
S
hare
s of
the
com
pany
% S
hare
s P
ledg
ed /
encu
mbe
red
to
tota
l sha
res
No.
of S
hare
s%
of t
otal
S
hare
s of
the
com
pany
%of
Sha
res
Ple
dged
/ en
cum
bere
d to
to
tal s
hare
s
1.A
nant
Baj
aj2,
550
0.02
%0
2.55
00.
02%
00.
00
2.B
ajaj
Sev
ashr
am P
rivat
e Lt
d94
,800
0.75
%0
94.8
000.
75%
00.
00
3.B
ansr
i Raj
esh
Sha
h5,
838
0.05
%0.
05%
5.83
80.
05%
0.05
%0.
00
4.B
arod
a In
dust
ries
Priv
ate
Lim
ited
2,40
00.
02%
02.
400
0.02
%0
0.00
5.C
zaee
Suk
etu
Sha
h18
50.
00%
018
50.
00%
00.
00
6.Ja
mna
lal S
ons
Priv
ate
Lim
ited
13,8
6,39
511
.03%
013
.86.
395
11.0
3%0
0.00
7.Je
ewan
Lim
ited
14,0
000.
11%
014
.000
0.11
%0
0.00
8.Jy
oti S
hah
99,2
010.
78%
099
.201
0.78
%0
0.00
9.K
aust
ubh
Raj
esh
Sha
h3,
000
0.02
%0.
02%
3.00
00.
02%
0.02
%0.
00
10.
Min
al B
ajaj
19,2
500.
15%
019
.250
0.15
%0
0.00
11.
Muk
and
Lim
ited
45,3
9,78
136
.11%
045
.39.
781
36.1
1%0
0.00
12.
Nira
j Baj
aj1,
050
0.01
%0
1.05
00.
01%
00.
00
13.
Nira
j Baj
aj4,
11,5
003.
27%
04.
11.5
003.
27%
00.
00
14.
Nira
vnay
an B
ajaj
3,00
00.
02%
03.
000
0.02
%0
0.00
15.
Priy
arad
hika
Raj
esh
Sha
h19
,500
0.16
%0.
16%
19.5
000.
16%
0.16
%0.
00
16.
Rah
ulku
mar
Baj
aj12
,675
0.10
%0
12.6
750.
10%
00.
00
17.
Raj
esh
Vire
ndra
kum
ar S
hah
64,2
200.
51%
0.51
%64
.220
0.51
%0.
51%
0.00
18.
She
khar
Baj
aj*
5,85
00.
05%
09.
450
0.08
%0
0.03
19.
She
khar
Baj
aj*
3,60
00.
03%
00
0.00
%0
(0.0
3)
20.
Shr
i San
jivna
yan
Baj
aj19
0.00
%0
190.
00%
00.
00
21.
Sid
ya In
vest
men
ts L
imite
d17
,400
0.14
%0
17.4
000.
14%
00.
00
22.
Suk
etu
Vire
n S
hah
48,3
000.
38%
048
.300
0.38
%0
0.00
23.
Sum
an J
ain
846
0.01
%0
846
0.01
%0
0.00
24.
Sun
aina
Kej
riwal
190.
00%
019
0.00
%0
0.00
T O
T A
L67
,55,
379
53.7
3%0.
74%
67,5
5,37
953
.73%
0.74
%0.
00
Not
e:* 3
,600
Equ
ity S
hare
s of
the
Com
pany
hel
d by
Shr
i She
khar
Baj
aj, a
s K
arta
of R
amkr
ishn
a B
ajaj
(H.U
.F) w
ere
acqu
ired/
trans
ferr
ed o
n ac
coun
t of p
artit
ion
of R
amkr
ishn
a B
ajaj
(H.U
.F) v
ide
Dee
d of
Par
titio
n da
ted
Aug
ust 1
2, 2
015.
13
C) Change in Promoters’ Shareholding (please specify, if there is no change)SN Particulars Shareholding at the
beginning of the yearCumulative Shareholding
during the year
No. of shares% of total
shares of thecompany
No. of shares% of total
shares of thecompany
1. At the beginning of the year
There is no change in Promoters Shareholding during the year except mentioned in
Note to Item no. IV (B).
2. Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer / bonus/ sweat equity etc.):
3. At the end of the yearD) Shareholding Pattern of top ten Shareholders: (Other than Directors, Promoters and Holders of GDRs and ADRs):
Sr. No.
Name of Shareholders Shareholding at the beginning of the year
Cumulative Shareholding during the
year No. of Shares
% of total shares of the
Company
No. of Shares
% of total shares of the
Company1 RAKESH SAJJAN GUPTA
At the beginning of the year as on April 1, 2015 3,13,340 2.49%Date-wise Increase / (Decrease)02-10-2015- Sale -732 -0.01% 3,12,608 2.49%09-10-2015- Sale -6,025 -0.05% 3,06,583 2.44%16-10-2015- Sale -1,00,405 -0.80% 2,06,178 1.64%30-10-2015- Sale -908 -0.01% 2,05,270 1.63%At the end of the year as on March 31, 2016 2,05,270 1.63%
2 SURENDRA BHAICHAND JHAVERIAt the beginning and at the end of the year No change for the financial year ended March 31, 2016
1,87,695 1.49%
3 PRIMUS INVESTMENTS AND FINANCE PRIVATE LIMITEDAt the beginning and at the end of the year No change for the financial year ended March 31, 2016
1,41,600 1.13%
4 KRISHNA KUMAR DHARAMSHI SOMAIYAAt the beginning of the year as on April 1, 2015 86,221 0.69%Date-wise Increase / (Decrease)05-06-2015- Purchase 580 0.00% 86,801 0.69%10-07-2015- Sale -3,800 -0.03% 83,001 0.66%17-07-2015- Sale -3,000 -0.02% 80,001 0.64%30-10-2015- Purchase 6,911 0.05% 86,912 0.69%06-11-2015- Purchase 5,441 0.04% 92,353 0.73%13-11-2015- Purchase 7,965 0.06% 1,00,318 0.80%20-11-2015- Purchase 5,157 0.04% 1,05,475 0.84%27-11-2015- Purchase 1,700 0.01% 1,07,175 0.85%08-01-2016- Purchase 18,576 0.15% 1,25,751 1.00%11-03-2016- Purchase 1,250 0.01% 1,27,001 1.01%At the end of the year as on March 31, 2016 1,27,001 1.01%
5 SASI STAR FINANCE PVT. LTD.At the beginning of the year as on April 1, 2015 1,44,396 1.15%Date-wise Increase / (Decrease)14-08-2015- Purchase 1,300 0.01% 1,45,696 1.16%25-12-2015- Sale -100 0.00% 1,45,596 1.16%08-01-2016- Purchase 3,000 0.02% 1,48,596 1.18%05-02-2016- Purchase 2,000 0.02% 1,50,596 1.20%19-02-2016- Purchase 2,000 0.02% 1,52,596 1.21%At the end of the year as on March 31, 2016 1,52,596 1.21%
14
Sr. No.
Name of Shareholders Shareholding at the beginning of the year
Cumulative Shareholding during the
year No. of Shares
% of total shares of the
Company
No. of Shares
% of total shares of the
Company6 NINJA SECURITIES PVT. LTD.
At the beginning of the year as on April 1, 2015 3,954 0.03%Date-wise Increase / (Decrease)10-04-2015- Purchase 7,511 0.06% 11,465 0.09%19-06-2015- Purchase 108 0.00% 11,573 0.09%26-06-2015- Sale -408 0.00% 11,165 0.09%10-07-2015- Sale -4,800 -0.04% 6,365 0.05%17-07-2015- Sale -483 0.00% 5,882 0.05%24-07-2015- Sale -1,050 -0.01% 4,832 0.04%04-08-2015- Sale -4,832 -0.04% 0 0.00%16-10-2015- Purchase 3,000 0.02% 3,000 0.02%04-12-2015- Sale -250 0.00% 2,750 0.02%18-12-2015- Sale -24 0.00% 2,726 0.02%25-12-2015- Sale -1,000 -0.01% 1,726 0.01%19-02-2016- Purchase 69,039 0.55% 70,765 0.56%04-03-2016- Purchase 896 0.01% 71,661 0.57%11-03-2016- Purchase 9,361 0.07% 81,022 0.64%At the end of the year as on March 31, 2016 81,022 0.64%
7 RAKESH SAJJAN GUPTAAt the beginning of the year as on April 1, 2015 Nil 0.00%Date-wise Increase / (Decrease)16-10-2015- Purchase 80,000 0.64% 80,000 0.64%At the end of the year as on March 31, 2016 80,000 0.64%
8 G S FAMILY TRUSTAt the beginning and at the end of the year No change for the year ended March 31, 2016
60,098 0.48%
9 VEENA K JAGWANIAt the beginning of the year as on April 1, 2015 Nil 0.00%Date-wise Increase / (Decrease)26-06-2015- Purchase 10,000 0.08% 10,000 0.08%10-07-2015- Purchase 15,000 0.12% 25,000 0.20%24-07-2015- Purchase 20,000 0.16% 45,000 0.36%31-07-2015- Purchase 3,000 0.02% 48,000 0.38%21-08-2015- Purchase 10,000 0.08% 58,000 0.46%At the end of the year as on March 31, 2016 58,000 0.46%
10 JYOTI RAKESH GUPTAAt the beginning of the year as on April 1, 2015 37,260 0.30%Date-wise Increase / (Decrease)18-03-2016- Purchase 9,006 0.07% 46,266 0.37%31-03-2016- Purchase 8,885 0.07% 55,151 0.44%At the end of the year as on March 31, 2016 55,151 0.44%
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E) Shareholding of Directors and Key Managerial Personnel:
Sr.No.
Shareholding of each Directors and each Key Managerial Personnel
Shareholding at the beginningof the year
Shareholding at the endof the year
No. of shares% of total
shares of thecompany
No. of shares% of total
shares of thecompany
1. Rajesh V. Shah – Director 64,220 0.511 64,220 0.5112. Niraj Bajaj – Director 4,11,500 3.273 4,11,500 3.2733. N. Ramanathan – Director 200 0.002 200 0.0024. R. Sankaran – Director 438 0.003 438 0.003
(a) Shareholding of all the other Directors - NIL.
(b) Shri K. P. Jotwani (‘Manager under Companies Act, 2013), Shri Rajan G. Golatkar (Chief Financial Officer) and Shri Dhawal J. Vora (Company Secretary), Key Managerial Personnel (KMPs) of the Company do not hold any shares in the Company.
V) INDEBTEDNESS -Indebtedness of the Company including interest outstanding/accrued but not due for payment.(Amount in `)
Particulars
Secured Loans
excluding deposits
Unsecured Loans Fixed Deposits Total
Indebtedness
Indebtedness at the beginning of the financial yeari) Principal Amount 16,72,17,883 6,15,00,000 17,64,88,000 40,52,05,883ii) Interest due but not paid Nil Nil Nil Niliii) Interest accrued but not due 1,03,645 Nil 1,10,09,922 1,11,13,567
Total (i+ii+iii) 16,73,21,528 6,15,00,000 18,74,97,922 41,63,19,450Change in Indebtedness during the financial year
* Addition 8,89,48,430 3,25,00,000 4,45,96,000 16,60,44,430* Reduction 53,56,995 2,65,00,000 7,59,54,000 10,78,10,995
Net Change 8,35,91,435 60,00,000 (3,13,58,000) 5,82,33,435Indebtedness at the end of the financial year
i) Principal Amount 25,08,44,230 6,75,00,000 14,51,30,000 46,34,74,230ii) Interest due but not paid Nil Nil Nil Niliii) Interest accrued but not due 68,733 Nil 78,11,627 78,80,360
Total (i+ii+iii) 25,09,12,963 6,75,00,000 15,29,41,627 47,13,54,590VI . REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL-
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
Sr. No Particulars of Remuneration
Name of the ManagerTotal Amount (`)
K. P. Jotwani1 Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 42,14,252 42,14,252
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 32,400 32,400(c) Profits in lieu of salary under section 17(3) Income- tax Act,
1961 Nil Nil
2 Stock Option Nil Nil3 Sweat Equity Nil Nil4 Commission
- as % of profit - others, specify…
NilNil
NilNil
5 Others, please specify Nil NilTotal (A) 42,46,652 42,46,,652Ceiling as per the Act 5% of the Net Profits of the Company
The Company does not have any Managing Director or Whole time Director.
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B. Remuneration to other directors –
Sr. No Particulars of Remuneration
Name of Directors Total Amount. (`)Prakash V. Mehta N. Ramanathan R. Sankaran
1 Independent DirectorsFee for attending Board meetings 60,000 80,000 80,000 2,20,000Fee for attending Audit Committee meetings 60,000 80,000 80,000 2,20,000Fee for attending Other Committee meetings Nil 30,000 30,000 60,000Commission Nil Nil Nil NilOthers – Independent Directors meeting 10,000 10,000 10,000 30,000Total (1) 1,30,000 2,00,000 2,00,000 5,30,000
2 Other Non-Executive DirectorsFee for attending board committee meetings Nil Nil Nil NilCommission Nil Nil Nil NilOthers, please specify Nil Nil Nil NilTotal (2) Nil Nil Nil NilTotal (B)=(1+2) 1,30,000 2,00,000 2,00,000 5,30,000Total Managerial Remuneration Nil Nil Nil NilOverall Ceiling as per the Companies Act, 2013. Nil Nil Nil Nil
C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD:
Sr. No
Particulars of Remuneration Key Managerial Personnel(Amount in `)
CEO * CS ** CFO Total1 Gross salary
(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961
Nil 24,48,042 12,86,896 37,34,938
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
Nil 1,78,203 32,400 2,10,603
(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961
Nil Nil Nil Nil
2 Stock Option Nil Nil Nil Nil3 Sweat Equity Nil Nil Nil Nil4 Commission Nil Nil Nil Nil
- as % of profit Nil Nil Nil Nil- others, specify… Nil Nil Nil Nil
5 Others, please specify Nil Nil Nil NilTotal Nil 26,26,245 13,19,926 39,45,541
* The Company does not have a CEO
** Includes an amount of ` 16,18,013/- paid to Shri P.R. Dhruva, Ex-Company Secretary of the Company on his attaining superannuation.
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
During the year 2015-16, there were no penalities/punishment/compounding of offences under the Companies Act, 2013.
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Annexure - III
Form No. AOC-2(Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto.
1. Details of contracts or arrangements or transactions not at arm’s length basis:
(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 proviso to Section 188: NIL
2. Details of material contracts or arrangement or transactions at arm’s length basis:
(a) Name(s) of the related party and nature of relationship:
Mukand Limited and Mukand Global Finance Limited (its wholly owned subsidiary of Mukand Limited)
(b) Nature of contracts/arrangements/transactions: Contract Execution – Design, Erection, Commissioning & Transportation, Consultancy Service – PMS,Contract Execution – Interest on delayed payments, Maintenance Service – Maintenance of EDP System.
(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:
Arms length basis and credit period as per terms of contracts.
(e) Date(s) of approval by the Board, if any: 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 Chairman Mumbai, May 20, 2016. DIN: 00033371
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CORPORATE GOVERNANCE REPORTSEBI vide its notification No.SEBI/LAD-NRO/GN/2015-16/013 dated 2ND September 2015 notified the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as (SEBI (LODR) Regulations, 2015.), which were made applicable with effect from 1st December 2015, and repealed the erstwhile Listing Agreement with the stock exchanges.This Report, therefore, states the compliance status as per requirements of Companies Act, 2013 and SEBI (LODR)Regulations, 2015.1. Company’s Philosophy on Code of Corporate
Governance: The Company’s philosophy on Corporate Governance
practices are built on core values, beliefs, and ethics derived through sustained efforts and commitment to the highest standards of Corporate Conduct. The Company believes sound Corporate Governance is critical for enhancing long-term economic value of the Company and sustainable return to its stakeholders by adopting best corporate practices in a fair and transparent manner. Your Company is in full compliance with the norms and disclosures that have to be made from time to time with the requirements of SEBI (LODR) Regulations, 2015.
2. Board of Directors:(a) Composition and size of the Board : The Board of Directors of the Company consists of six
Directors including the Non-Executive Chairman and a Non-Executive Woman Director. All these six Directors are Non-Executive Directors out of which three are Independent Directors. The Company did not have any pecuniary relation or transaction with Non-Executive Directors during the year under review.
(b) Board Meetings : During the year four Board Meetings were held on May 28,
2015, August 12, 2015, November 5, 2015 and February 11, 2016. The Board was presented with the relevant and necessary information. None of the Directors is a member of more than ten Committees or acting as Chairman of more than five Committees across all Companies in which he / she is a Director. The attendance at the Board Meetings during the year and at the last Annual General Meeting and also number of other directorships is given herein below:
Name of the Director Category Attendance Particulars
Number of positions held in other Public Limited Companies
No of shares
held as on 31.03.2016
Board Meetings
Last AGM
Directorships *Committee Memberships
*Committee Chairmanships
Shri Rajesh V. Shah C/NED 3/4 Yes 4 @ 1 - 64,220
Shri Niraj Bajaj NED 3/4 Yes 6 1 1 4,11,500
Shri Prakash V. Mehta NED/ID 3/4 Yes 6 8 2 Nil
Shri N. Ramanathan NED/ID 4/4 Yes 1 1 - 200
Shri R. Sankaran NED/ID 4/4 Yes 5 3 1 438
Smt. Anna Usha Abraham NED 4/4 Yes 1 - - Nil
C: Chairman, NED: Non-Executive Director, ID : Independent Director
* Includes only Audit & Stakeholders Relationship Committee.
@ Excludes Directorship in Foreign Companies.
(c) Information supplied to the Board: The Board of Directors of the Company is presented
with relevant information in advance on various matters related to the working of the Company, especially those that requires deliberation. In addition to items which require approval of the Board or its noting, information is provided on various other items. The information supplied by management to the Board of the Company is in accordance with various Regulations of SEBI (LODR) Regulations, 2015.
(d) Orderly succession to Board and Senior Management The Board of Directors of the Company satisfies itself
about the plans in place for orderly succession for appointments to the Board and to Senior Management.
(e) Review of legal compliance reports During the year, the Board periodically reviewed
compliance reports with respect to the various laws applicable to the Company, as prepared and placed before it by the management.
(f) Maximum tenure of Independent Directors The maximum tenure of Independent Directors is in
accordance with the Companies Act, 2013 and Regulation 25 of SEBI (LODR) Regulations, 2015,
(g) Formal Letter of Appointment to Independent Directors
The company has issued formal letter of appointment to each Independent Directors in the manner as provided in the Companies Act, 2013. The terms and conditions of appointment of Independent Directors are placed on the Company’s website www.mukandengineers.com
(h) Re-appointment of Directors (liable to retire by rotation) :
Shri Rajesh V. Shah, retires by rotation and being eligible offer himself for re-appointment. His brief resume is as under:-
Name of the Director Shri Rajesh V. Shah
Qualification
He is M.A. in Mathematics from Cambridge University, U. K. and MBA from University of California at Berkeley, U.S.A. He has completed programme for Management Development at Harvard Business School, USA.
Date of appointment 23rd October, 1989Expertise in Specific Functional areas
Providing valuable inputs and guidance on matters relating to strategic planning and performance, expansion, diversification, new business decisions of the Company.
List of other Directorships held (in listed Companies)
Mukand Ltd.
Chairman / Member of the Committee of the Board of other Companies in which he is a Director
Chairman: NilMember: Four
Shareholding of Director as on March 31, 2016
64,220 Equity Shares
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3. Audit Committee: The Audit Committee consists of Shri Prakash V. Mehta,
(Chairman of Audit Committee) Shri. Rajesh V. Shah, Shri N. Ramanathan and Shri R. Sankaran as Members, all of whom are Independent Directors except Shri Rajesh V. Shah. The terms of reference of the Audit Committee specified by the Board are as contained in SEBI (LODR) Regulations, 2015. All the members of the Audit Committee are financially literate.
During the year, the Audit Committee met four times on May 28, 2015, August 12, 2015, November 5, 2015 and February 11, 2016. These meetings were also attended by the Statutory Auditors, Internal Auditors, Shri Niraj Bajaj, Director, Smt Anna Usha Abraham, Director, Shri S. B. Jhaveri, Advisor to the Board, Shri K.P. Jotwani, “Manager” and Shri R. G. Golatkar, Chief Financial Officer as invitees whenever required. Company Secretary acts as Secretary to the Audit Committee. Apart from considering unaudited and/or audited financial results for the relevant quarter, half year and the year before submission to the Board for its approval, the Committee focused its attention on other matters which inter-alia included key areas impacting the overall performance of the Company and major accounting policies and practices, review of internal control system, review of current site progress etc.
The attendance at the Audit Committee Meetings during the year is given herein below:
Name of the Director Category **
Nos of Meetings held up to 31.03.2016
Number of Meetings Attended
Shri Prakash V. Mehta C/ID/ NED 4 3Shri Rajesh V. Shah NED 4 3Shri N. Ramanathan ID/ NED 4 4Shri R. Sankaran ID/ NED 4 4
**C: Chairman, NED: Non-Executive Director, ID: Independent Director
4. Nomination and Remuneration Committee: The Company has constituted a Nomination and
Remuneration Committee consisting of Shri R. Sankaran (Chairman of Nomination and Remuneration Committee), Shri N. Ramanathan and Shri Rajesh V. Shah as Members, all of whom are Independent Directors except Shri Rajesh V. Shah. During the year under review, the Nomination and Remuneration Committee met three times on May 28, 2015, August 12, 2015 and November 5, 2015.
Name of the Director Category **
Nos of Meetings held up to 31.03.2016
Number of Meetings Attended
Shri R. Sankaran C/ID/ NED 3 3Shri Rajesh V. Shah NED 3 2Shri N. Ramanathan ID / NED 3 3
**C: Chairman, NED: Non-Executive Director, ID: Independent Director
The decision regarding remuneration of the “Manager” under the Companies Act, 2013 and of the Key Managerial Personnel is recommended by the Committee to the Board subject to such other approvals, if any. The Company does not pay any remuneration to the Non-Executive Directors except payment of sitting fees for attending the Board / Other Committee Meetings etc. details of which are given below. However, Shri Rajesh V. Shah, Chairman Shri Niraj Bajaj, Director and Smt . Anna Usha Abraham, Director of the Company have waived their sitting fees.
Sitting fees (Gross) paid to the Directors for the year ended 31st March, 2016 is as under:
Sr. No.
Name of the Director Amount (`)
1. Shri Prakash V. Mehta 1,30,0002. Shri N. Ramanathan 2,00,0003. Shri R. Sankaran 2,00,000
TOTAL 5,30,000 The Company has not issued stock options to any of its
Directors / Employees.
5. Evaluation of Board’s Performance : During the year, the Board has adopted a mechanism
for evaluating the performance and as well as that of its Committees and Individual Directors, including the Chairman of the Board. The exercise was carried out by the Independent Directors of the Company through an structured evaluation process covering several aspects of functioning of the Board i.e. attendance, contribution at the meetings and otherwise, independent judgments, safeguarding interest of the minority stakeholders, composition of Board / Committees, performance of specific duties and obligations by members of the Board, etc. A Meeting of the Independent Directors was held on February 11, 2016 as per SEBI (LODR) Regulations, 2015.
6. Board Diversity Policy: In compliance with the provisions of the SEBI (LODR)
Regulations, 2015, the Board through its Nomination and Remuneration Committee has devised a Policy on Board Diversity.
The objective of the Policy is to ensure that the Board comprises adequate number of members with diverse experience and skills, such that it best serves the governance and strategic needs of the Company. The Board composition as at present meets with the above objective.
7. Stakeholders’ Relationship Committee (formerly Shareholders / Investors Grievance Committee):
With the commencement of Section 178(5) of Companies Act, 2013, the Company has changed the nomenclature of the ‘Shareholders / Investors Grievance Committee’ as ‘Stakeholders Relationship Committee’. The said Committee consists of Shri R. Sankaran as the Chairman, Shri Rajesh V. Shah and Shri N. Ramanathan as Members, all of whom are Independent Directors except Shri Rajesh V. Shah. The Company Secretary acts as Compliance Officer to the Committee.
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The meeting of the said Committee was held on May 28, 2015 which was attended by all the members. There were no major complaints from the stakeholders. The functions of Stakeholders’ Relationship Committee are to review and redress Stakeholders’ / Investors’ query/grievance/
complaint on matters relating to transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends, etc. Such matters were attended by the Registrar & Transfer Agents within stipulated time and some of the routine complaints were also directly attended by the Company Secretary.
The Committee also oversees the performance of the Registrars and Transfer Agents and recommends measures for overall improvement in the quality of Investors services.
8. Code of Conduct: All Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct for 2015-16 as required
under regulation 26(3) of SEBI (LODR) Regulations, 2015. A declaration to this effect by the Director is given in this Annual Report.
9. Manager and CFO Certification: In accordance with the requirement of Regulation 17(8) of the SEBI (LODR) Regulations, 2015, the 'Manager' under the
Companies Act, 2013 and CFO i.e. Chief Financial Officer have furnished the requisite certificates to the Board of Directors of the Company.
10. Annual General Meetings:(a) The last three Annual General Meetings were held on the following dates, time and venue:
Financial Year Date Time Venue2014-2015 August 12, 2015 11.30 a.m. Kamalnayan Bajaj Hall, Bajaj Bhawan, Jamnalal Bajaj Marg, 226,
Nariman Point, Mumbai 400 0212013-2014 August 13, 2014 11.30 a.m. Kamalnayan Bajaj Hall, Bajaj Bhawan, Jamnalal Bajaj Marg, 226,
Nariman Point, Mumbai 400 0212012-2013 August 13, 2013 11.30 a.m. Kamalnayan Bajaj Hall, Bajaj Bhawan, Jamnalal Bajaj Marg, 226,
Nariman Point, Mumbai 400 021(b) Following Special Resolutions were adopted in the above three Annual General Meetings:
Financial Year Date of Annual General Meeting
Details of Special Resolution Passed
2014-2015 August 12, 2015 1) Appointment of Shri K. P. Jotwani as the “Manager” of the Company, as defined under Section 2(53) of the Companies Act, 2013, for a further period of two years with effect from 1st June, 2015.
2) Adoption of new set of Articles of Association as per the provisions of Section 14 and other applicable provisions , if any, of the Companies Act, 2013.
3) Approval of Related party transactions pursuant to the provisions of the revised Clause 49 (VII) of the Equity Listing Agreement with the Stock Exchanges and Section 188 of the Companies Act, 2013 read with the Companies (Meeting of Board and its Powers) Rules, 2014.
2013-2014 August 13, 2014 1) Partial Modifications in the terms and conditions pertaining to the appointment of Shri K. P. Jotwani as the “Manager” of the Company, pursuant to Sections 196 and 197 and other applicable provisions, if any, of the Companies Act, 2013 read with Chapter XIII –The Companies and Remuneration) of Managerial personnel Rules, 2014.
2) Superseding Resolution under Sec, 180(1) (c ) and other applicable provisions, if any, of the Companies Act, 2013 to borrow money not exceeding ` 150 Crores.
3) Superseding Resolution under Section 180(1) (a) and other applicable provisions, if any, of the Companies Act, 2013 for creating mortgages, charges, hypothecation etc. subject to maximum of ` 150 Crores.
4) To accept / renew/ receive money by way of unsecured / secured deposits or in any other form from Member of the Company under Sections 73 and 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) rules, 2014.
2012-2013 August 13, 2013 Appointment of Shri K. P. Jotwani as the “Manager” of the Company, as defined under Section 2(24) of the Companies Act, 1956, for a further period of two years with effect from June 1, 2013
(c) Postal Ballot:
There were no Resolutions passed through Postal Ballot during the Financial Year ended March 31, 2016.
21
11. Familiarisation Programme: The Company familiarizes not only the Independent
Directors but also 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. The particulars of familiarization programme for Independent Director can be accessed through the website of the company.
12. Related Party Transactions: There were no materially significant related party
transactions made by the Company with its promoters, directors or their relatives during the year, which may have potential conflict with the interest of the Company at large. The details of transactions with related parties are disclosed in the financial statements. The Policy on Materiality of Related Party Transactions in terms of provisions of SEBI (LODR) Regulations, 2015 is uploaded on the website of the Company.
13. Disclosure of Accounting Treatment: In the preparation of the financial statements, the Company
has followed the Accounting Standards referred to in Section 133 of the Companies Act, 2013. The significant accounting policies which are consistently applied are set out in the Notes to the Financial Statements.
14. Disclosures: The Company has complied with the requirements of the
Stock Exchanges, SEBI and other statutory authorities on all matters relating to capital markets during the last three years. No penalties or strictures have been imposed on the Company by the Stock Exchanges, SEBI or other statutory authorities.
No transactions with related parties or others have been entered into which are not at arm’s length basis.
The Company receives professional services in the normal course of business from M/s. Malvi Ranchoddas & Co., a legal firm in which Shri Prakash V. Mehta is a partner. In the opinion of the Board, these transactions do not affect the Independence of the said Director.
The process of identification and evaluation of various risks inherent in the business environment and operations of the Company and initiation of appropriate measures for prevention and / or mitigation of the same is dealt with by the Operational Head under the supervision of the “Manager” who has overall responsibility towards the Board of Directors of the Company.
The Company has also instituted a Code of Conduct for Prevention of Insider Trading in the securities of the Company for its Directors and Key Managerial Personnel as required by SEBI (Prohibition of Insider Trading) Regulations, 2015 as amended. Further, the policies / rules framed by the Company as required under Companies Act, 2013 and SEBI (LODR) Regulations, 2015 are also available of the website of the Company.
Adoption of non-mandatory requirements of Listing Regulation is being reviewed by the Board from time-to- time.
15. Means of Communication: The quarterly un-audited and yearly audited financial
results are published in English and regional language newspapers. The financial results, shareholding pattern and other corporate communication to stock exchanges are filed in compliance with Regulation 30 of SEBI( LODR) Regulations, 2015 and also available on the Website of the Company. Likewise, the said information is also filed electronically with NSE through NSE’s NEAPS portal. The Company has complied with filing submissions through BSE’s BSE Online Portal. The Management Discussion and Analysis is a part of the Annual Report. All financial and other vital information is promptly communicated to the Stock Exchanges where the Company’s shares are listed.
16. General Information for Shareholders:
a. Registered Office Bajaj Bhawan, Jamnalal Bajaj Marg, 226, Nariman Point, Mumbai - 400021
b. Date, Time and Venue of Annual General Meeting
Monday, August 8, 2016 at 11.30 a.m. at Kamalnayan Bajaj Hall, Bajaj Bhawan, 226, Jamnalal Bajaj Marg, Nariman, Point, Mumbai 400021.
c. Reporting in the Financial Calendar 2016-17:•••
June 30 September 30December 31
Within 45 Days from the end of theQuarter
• For the year ending March 31
Within 60 Days from the year end
d. Dates of Book Closure
30th July, 2016 to 8th August, 2016. (Both days inclusive)
e. Listing Details:Pursuant to the SEBI (LODR) Regulations, 2015, the Company has entered into Uniform Listing Agreement with BSE and NSE. For the year 2015-16, the listing fees payable to these stock exchanges have been paid in full.
f. Stock code1. Bombay Stock
Exchange Limited (BSE)
532097
2. National Stock Exchange of India Limited (NSE)
MUKANDENGG
3. ISIN INE 022B010144. Corporate Identity
Number (CIN)L45200MH1987PLC042378
}}
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g. Stock Market Data:
MonthBombay Stock Exchange Ltd. (BSE) (in `) National Stock Exchange of India Ltd. (NSE) (in `)
High Price Low Price High Price Low Price
Apr-2015 33.00 26.40 32.80 26.20
May-2015 31.85 26.00 29.80 26.05
June-2015 30.90 21.05 31.00 21.20
July-2015 37.70 26.00 38.00 25.65
Aug-2015 40.15 26.50 40.10 25.65
Sep-2015 29.80 23.50 28.75 24.00
Oct-2015 29.10 26.00 30.20 25.80
Nov-2015 32.65 23.45 32.90 24.45
Dec-2015 40.50 29.70 40.75 29.15
Jan-2016 37.40 26.10 36.70 26.10
Feb-2016 30.25 21.30 29.90 21.65
Mar-2016 27.90 23.00 26.50 23.20
Comparative Stock Price Performance: The Equity share prices of the Company on BSE in comparison with the BSE Sensex for the period from April 1, 2015 to
March 31, 2016 are given in the following graph:
0
5
10
15
20
25
30
35
40
Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-160
5000
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20000
25000
30000
ME
LS
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Closing Price Sensex
h. Registrar and Transfer Agents(For share transfers and other communication relating to share certificates, dividend and change of address, etc.)
Bigshare Services Pvt. Ltd.E-2/3, Ansa Industrial Estate, Saki Vihar Road, Sakinaka, Andheri (East) Mumbai - 400 072.Tel : (022) 28470652 / 0653 / 40430200. Fax : (022) 28475207E-Mail : [email protected] : www.bigshareonline.com
Our Registrar & Transfer Agents M/s Bigshare Services Private Limited has launched Gen-Next Investor Module i’Boss the most advanced tool to interact with shareholders. Please login into i’Boss (www.bigshareonline.com) and help them to serve you better.
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i. Unclaimed Dividend In terms of the applicable provisions of the Companies Act, 2013, the amount of dividend remaining unclaimed or unpaid for
a period of seven years from the date of transfer to the unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF). Those members who have so far not encashed their Dividend Warrants may claim or approach the Company/Registrars and Share Transfer Agents for the payment thereof.
Details of Unclaimed Dividend and due dates for transfer are as follows as on March 31, 2016:
Sr. No.
Year of Declaration of Dividend
Date of Declaration of Dividend
Unclaimed Amount (`) Due Date for transfer to IEPF Account
1 2008-09 No Dividend Declared N.A. N.A.
2. 2009-10 July 29, 2010 2,32,353 September 03, 2017
3. 2010-11 July 28, 2011 2,65,314 September 02 , 2018
4. 2011-12 August 13, 2012 1,99,217 September 18, 2019
5. 2012-13 August 13, 2013 1,92,777 September 18, 2020
6. 2013-14 August 13, 2014 2,17,047 September 18, 2021
7. 2014-15 No Dividend Declared N.A. N.A.j. Share Transfer System The Share Transfers are approved by a Committee of Directors and are registered within a period of 7 days from the date of
receipt, if the documents are complete in all respect. During the year under review, the Company has followed the guidelines issued by SEBI for dematerialisation of shares sent for transfer by the investors.
Total number of shares transferred in physical category (non-dematerialised) during F.Y. 2015-16 were 1,435 shares (1,010 shares during F.Y. 2014-15).
There were no transfers which remained unattended as of March 31, 2016. The Board in their respective Board Meetings duly takes note of the transfers.
k. Nomination Individual shareholders holding shares singly or jointly in physical form can nominate a person in whose name the shares
shall be transferable in case of death of the registered shareholder(s). Nomination facility in respect of shares held in electronic form is also available with the Depository Participants as per the bye- laws and business rules applicable to NSDL and CDSL. Nomination forms can be obtained from the Company’s Registrar and Share Transfer Agent.
l. Investor Services (Complaints received during the year)
Nature of Complaints / Queries 2015-2016 2014-2015
Relating to Transfer, Transmission, Dividend, Demat & Remat, Change of address and others
Received Cleared Received Cleared287 287 256 256
There were no complaints / queries pending reply as on March 31, 2016
m. Distribution of Shareholding as on:No. of
Equity shares held31st March, 2016 31st March, 2015
No. of Share
holders
% ofShare
Holders
No. of Shares
Held
% ofShare
holding
No. of Share
holders
% ofShare
holders
No. of Shares
held
% ofShare
holding
1-500 22,171 94.18 1363615 10.85 22,422 94.22 1365645 10.86
501-1000 683 2.90 570867 4.54 697 2.93 580004 4.61
1001-2000 335 1.42 525097 4.18 302 1.27 467521 3.72
2001-3000 113 0.48 294698 2.34 128 0.54 329708 2.62
3001-4000 55 0.23 195259 1.55 64 0.27 227425 1.81
4001 - 5000 40 0.17 189666 1.51 37 0.15 175563 1.40
5001-10000 77 0.33 539286 4.29 71 0.30 494367 3.93
10001-above 69 0.29 8893912 70.74 77 0.32 8932167 71.05
Total 23,543 100.00 12572400 100.00 23,798 100.00 12572400 100.00
24
n. Categories of Shareholding as on :Category of
Shareholders31st March, 2016 31st March, 2015
No. of Share
holders
% ofShare
Holders
No. of Shares
held
% ofShare
Holding
No. of Share
holders
% ofShare
holders
No. of Shares
held
% ofShare
HoldingIndividuals 23,112 98.17 4376603 34.81 23,345 98.11 4351105 34.61
Corporate 268 1.14 1118819 8.90 286 1.20 1008742 8.02
Financial Institutions
5 0.02 1335 0.01 5 0.02 1335 0.01
FIIs 1 0.00 65 0.00 1 0.00 65 0.00
NRIs/OCBs 103 0.44 228753 1.82 102 0.43 193828 1.54
Banks 10 0.04 1048 0.01 10 0.04 1048 0.01
Mutual Funds 2 0.01 700 0.01 3 0.01 800 0.01
Trusts 11 0.05 89698 0.71 15 0.06 260098 2.07
Promoters 31 0.13 6755379 53.73 31 0.13 6755379 53.73
Total 23,543 100.00 12572400 100.00 23,798 100.00 12572400 100.00
o. Dematerialisation of Shares and Liquidity
96.97% of outstanding equity shares have been dematerialised up to March 31, 2016. Trading in Equity Shares of the Company on any Stock Exchange is permitted only in the dematerialised form from July 24, 2000 as per Notifications Issued by SEBI
p. Plant Locations
The Company has no plants but carries out jobs at various sites of customers.
q. Investor Correspondence
For any queries, investors are requested to get in touch with the Company’s Registrar and Transfer Agents:
Bigshare Services Pvt. Ltd. E-2/3, Ansa Industrial Estate, Saki Vihar Road, Sakinaka, Andheri (East), Mumbai – 400072.
OR Registered Office of the Company: Bajaj Bhawan, Jamnalal Bajaj Marg, 226 Nariman Point, Mumbai-400021
r. Auditors Certificate of Corporate Governance The Company has obtained a certificate from the Auditors of the Company regarding compliance of conditions of Corporate
Governance as stipulated in the SEBI (LODR) Regulations 2015 with Stock Exchanges. This is annexed to the Directors’ Report.
DECLARATIONCode of Conduct Certificate
This is to confirm that for the Financial Year 2015-16 all Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct of the Company.
For and on behalf of the Board of Directors
Rajesh V. Shah Chairman Mumbai, May 20, 2016. DIN - 00033371
25
Certificate by ‘Manager’ as per Companies Act, 2013 and Chief Financial Officer
We have reviewed the attached financial statements and the cash flow statement of MUKAND ENGINEERS LIMITED for the year ended March 31, 2016 , and certify to the Board:
a) That to the best of their knowledge and belief:
1) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
2) these statements together present a true and fair view of the listed entity’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.
b) That there are, to the best of their knowledge and belief, no transactions entered into by the listed entity during the year which are fraudulent, illegal or violative of the listed entity’s code of conduct.
c) That we accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the listed entity pertaining to financial reporting and we have disclosed to the auditors and the audit committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.
d) That we have indicated to the auditors and the Audit Committee:
1) significant changes in internal control over financial reporting during the year;
2) significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and
3) instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the listed entity’s internal control system over financial reporting.
K. P Jotwani R. G. Golatkar Manager ChiefFinancialOfficer
Mumbai, May 20, 2016.
Auditors’ Certificate regarding compliance of conditions of Corporate GovernanceTo,
The Members Mukand Engineers LimitedWe have examined the compliance of conditions of Corporate Governance by Mukand Engineers Limited (‘the Company’), for the year ended 31st March 2016, as stipulated in Clause 49 of the Listing Agreement (‘Listing Agreement’) of the Company with the stock exchanges for the period 1st April, 2015 to 30th November, 2015 and as per the relevant provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) as referred to in Regulation 15(2) of the Listing Regulations for the period 1st December, 2015 to 31st March 2016.
The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was carried out in accordance with the Guidance Note on Certification of Corporate Governance (as stipulated in Listing Agreement/Listing Regulations) issued by the Institute of Chartered Accountants of India and limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement / Listing Regulations, as applicable.
We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.
GIRISH M. PATHAK
Partner Membership No.102016
For & on behalf of K. K. MANKESHWAR & CO.
Chartered Accountants FRN-106009W
Mumbai, dated the 20th May, 2016.
26
Form No MR-3[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]
FOR THE PERIOD 01-04-2015 TO 31-03- 2016To
The Members MUKAND ENGINEERS LIMITED Bajaj Bhawan, 226 Nariman Point Mumbai- 400 021.
We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by MUKAND ENGINEERS LIMITED (CIN: L45200MH1987PLC042378) (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.
Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended March 31, 2016, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended March 31, 2016 according to the provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act,1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-
a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992.presently (prohibition of Insider Trading) Regulations 2015.
SECRETARIAL AUDIT REPORTc. The Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations, 2009 (Not applicable to the Company during the Audit Period);
d. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (Not applicable to the Company during the Audit Period); presently (share based employees Benefits) Regulations 2014.
e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not applicable to the Company during the Audit Period);
f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client.
g. The Securities and Exchange Board of India (Delisting of equity shares) Regulations, 2009 (Not applicable to the Company during the Audit Period); and
h. The Securities and Exchange Board of India (Buyback of Securities Regulations, 1998 (Not applicable to the Company during the Audit Period).
(vi) We have relied on the certificates obtained by the Company from the Management Committee/Function heads and based on the report received, there has been due compliance of all laws, orders, regulations and other legal requirements of the central, state and other Government and Legal Authorities concerning the business and affairs of the company.
We are of the opinion that the management has complied with the following laws specifically applicable to the Company:-
Sr. No
Compliances under the mentioned laws
1 Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
2 Contract Labour (Regulation and Abolition) Act, 19703 Maternity Benefit Act, 19614 Payment of Bonus Act, 19655 Employee State Insurance Act, 19486 Employee Pension Scheme, 19557 Central Excise Act, 19448 Income Tax Act, 19619 Finance Act, 1994 and Maharashtra Professional Tax
Act, 197510 Central Sales Tax Act, 195611 Payment of Gratuity Act, 197212 Shops and Establishment Act, 194813 Minimum Wages Act, 194814 Workmen Compensation Act, 192315 Industrial Employment (Standing order) Act, 194616 Bombay Stamp Act, 195817 Indian Contract Act, 187218 Negotiable Instruments Act, 1881
ANNEXURE- IV
27
We have also examined compliance with applicable clauses of the following:
a) Secretarial Standards issued by The Institute of Company Secretaries of India.
b) The securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and the Listing Agreements entered into by the Company with Stock Exchanges.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.
We further report that:The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the minutes.
We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
We further report that during the audit period the Company has passed following Special Resolution in pursuance of the above referred Laws, Rules, Regulations, Guidelines, Standards, etc.
• Adoption of new set of Articles of Association of the Company as per Section 14 of the Companies Act, 2013.
For Ragini Chokshi & Co.
Ragini Chokshi (Partner)
C.P.NO. 1436 FCS NO. 2390
Mumbai, April 25, 2016.
28
INDEPENDENT AUDITOR’S REPORTTo the Members Mukand Engineers LimitedReport on the Financial StatementsWe have audited the accompanying financial statements of M/s Mukand Engineers Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial StatementsThe Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards referred to in Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act and the Rules made there under including the Accounting and Auditing Standards and matters which are required to be included in the audit report.
We have conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
OpinionIn our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016 and its Loss and its cash flows for the year ended on that date.Emphasis of MatterWe draw attention to the following matter in notes to Financial Statements:(i) Note No. 28 to the financial statements, relating to
overdue loans, aggregating ` 5,88,00,000/- (Previous Year ` 8,05,50,000/-) and Interest Receivable thereon, aggregating ` 2,92,28,810/- (Previous Year ` 4,29,57,419/-), at the end of the year, that are due from investment companies whose net worth have eroded. The Management’s assessment on the recoverability from the financial assets of these companies is subject to uncertainties and which if do not materialize, could significantly impact the carrying values of the aforesaid loans & interest thereon.
Our report is not modified in respect of the above matter.Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor’s Report) Order,
2016 issued by the Central Government of India in terms of sub-section (11) of the section 143 of the Act (hereinafter referred to as “the Order”), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the “Annexure A”, a statement on the matters specified in paragraph 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:a. We have sought and obtained all the information and
explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e. On the basis of written representations received from the Directors as on March 31, 2016, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2016, from being appointed as a Director in terms of Section 164(2) of the Act.
29
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”.
g. With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2016 on its financial position in its financial statements as referred to in Note 27 to the financial statements.
ii. The Company has made provision as at March 31, 2016 as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts. The
Company has not entered in to any Derivative Contracts during the financial year.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2016.
GIRISH M. PATHAK Partner
Membership No. 102016
For and on behalf of
K.K.MANKESHWAR & CO., Chartered Accountants
FRN- 106009W
Mumbai, dated the 20th May, 2016
ANNEXURE A TO INDEPENDENT AUDITORS’ REPORT(The Annexure referred to in our report to the members of Mukand Engineers Limited (‘the Company’) for the year ended March 31, 2016.)
(i) In respect of its Fixed Assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) As per the explanation given to us, the Fixed Assets were physically verified by the Management in accordance with a regular programme covering all the assets over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, the management during the year has physically verified a portion of the fixed assets and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and nature of is assets.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company does not hold any immovable properties in its name.
(ii) The physical verification of inventory excluding stocks with third parties and contractors has been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.
(iii) In our opinion, and according to information and explanations given to us, the Company has not granted any loans, secured or unsecured, to Companies, firms or other parties covered in the register maintained under Section 189 of the Act during the year. Consequently, clauses (iii) (a), (iii) (b) and (iii) c of paragraph 3 of the Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the Company has not granted any loans or provided any guarantees or security in respect of any loans to any party covered under Section 185 and 186 of the Act. The Company has complied with the provisions of Section 186 of the Act, in respect of investments made in body corporate.
(v) In our opinion and according to the information and explanations given to us, the Company has generally complied with the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014 to the extent notified, with regard to deposits accepted from the public. The Company not being an “Eligible Company” as defined in Companies (Acceptance of Deposits) Rules, 2014, sought and obtained the approval from the Company Law Board for extension in time limit for repayment of Public Deposits outstanding as on March 31 2015 on the respective due dates of maturity.
(vi) The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company.
(vii) In respect of Statutory Dues:
(a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax including Value Added Tax, Service Tax, Entry Tax, Cess and other material statutory dues as applicable to it with the appropriate authorities. As explained to us, there were no dues towards Custom Duty, Wealth Tax and Excise Duty during the year.
According to information and explanations given to us, there were no undisputed amounts payable in respect of Income Tax, Service Tax, Entry Tax, Value Added Tax,
AUDITOR’S REPORT (Contd.)
30
Cess and other material statutory dues in arrears as on 31st March,2016 for a period of more than six months from the date they become payable.
(b) According to information and explanations given to us upon our enquiries in this regard and records of the Company, the following statutory dues in respect of Income Tax, Works Contract Tax, Entry Tax and Service Tax as at 31st March, 2016 have not been deposited by the Company on account of disputes:
Nature of dues
Amount`
Period to which the amount relates
Forum where the dispute is pending
Income Tax 86,22,250 2000-2001, 2001-2002
High Court of Bombay
Income Tax 84,55,448 1999-20002005-2006
Income Tax Appellate Tribunal
Income Tax 20,17,828 2010-2011 to 2012-2013
Commissioner of Income Tax
Income Tax 98,95,634 2002-2003 to 2012-2013
Income Tax Department Authorities
Works Contracts Tax
75,83,974 2001 -2002 and 2002-2003
High Court
Works Contracts Tax
1,15,11,927 2001-2002 to 2004-2005
Sales Tax Department Authorities
Entry Tax 8,11,173 1999-2000 to 2002-2003
High Court, Odisha
Entry Tax 1,27,835 2003-20041999-2000
Asst. Commissioner (Sales Tax)
(viii) According to the records of the Company examined by us and information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank during the year. There are no dues to any debenture holders.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, clause (ix) of paragraph 3 of the Order is not applicable.
(x) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.
(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, clause (xii) of paragraph 3 of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable. The details of related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS)18, related party disclosures as specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with Directors or persons connected with him. Accordingly, clause (xv) of paragraph 3 of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
GIRISH M. PATHAK Partner
Membership No. 102016
For and on behalf of K.K.MANKESHWAR & CO.,
Chartered Accountants FRN- 106009W
Mumbai, 20th May, 2016
AUDITOR’S REPORT (Contd.)
31
ANNEXURE B TO INDEPENDENT AUDITORS’ REPORTReport on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)We have audited the internal financial controls over financial reporting of Mukand Engineers Limited (“the Company”) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management’s Responsibility for Internal Financial ControlsThe Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (“the Act”).
Auditors’ ResponsibilityOur responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial ReportingA Company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and Directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OpinionIn our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
GIRISH M. PATHAK Partner
Membership No. 102016
For and on behalf of K.K. MANKESHWAR & CO.,
Chartered Accountants FRN- 106009W
Mumbai, 20th May, 2016
AUDITOR’S REPORT (Contd.)
32
BALANCE SHEET AS AT 31ST MARCH, 2016
Note No. `
31.03.2016 `
31.03.2015 `
I. EQUITY & LIABILITIES(1) Shareholders' Funds
(a) Share Capital 2 125,797,500 125,797,500(b) Reserves and Surplus 3 396,251,693 463,063,716
522,049,193 588,861,216(2) Non Current Liabilities
(a) Long-term borrowings 4 88,739,073 103,135,285(b) Long-term provisions 6 24,027,697 25,065,364
112,766,770 128,200,649(3) Current Liabilities
(a) Short-term borrowings 7 366,512,113 294,041,515(b) Trade payables 422,237,516 365,103,090(c) Other current liabilities 8 203,915,734 189,802,428(d) Short-term provisions 9 11,113,683 11,718,795
1,003,779,046 860,665,828TOTAL 1,638,595,009 1,577,727,693
II. ASSETS(1) Non-Current Assets
(a) Fixed Assets 10 (i) Tangible assets 73,788,175 70,124,526 (ii) Intangible assets 1,434,642 2,036,705
75,222,817 72,161,231(b) Non-current investments 11 31,866,012 31,866,012(c) Deferred tax Assets / (Liabilities) (Net) 5 10,552,217 8,019,767(d) Long-term loans and advances 12 205,158,350 213,570,259(e) Other non-current assets 13 86,627,502 64,660,594
409,426,898 390,277,863(2) Current Assets
(a) Inventories 14 654,608,893 565,050,602(b) Trade Receivables 15 520,305,464 541,527,939(c) Cash and Cash Equivalent 16 3,853,758 18,006,843(d) Short-term loans and advances 17 13,473,966 13,537,815(e) Other current assets 18 36,926,030 49,326,631
1,229,168,111 1,187,449,830 TOTAL 1,638,595,009 1,577,727,693
Significant Accounting Policies 1
Notes 1 to 40 form an integral part of the financial statementsAs per our attached report of even dateGIRISH M. PATHAK Partner Membership No: 102016
RAJESH V SHAH Chairman
DIN : 00033371
R. SANKARAN Director
DIN : 00381139
For & on behalf of K. K. MANKESHWAR & CO Chartered Accountants Firm Registration No: 106009W
K. P. JOTWANI Manager
R. G. GOLATKAR Chief Financial Officer
Mumbai, May 20,2016D. J. VORA
Company Secretary
33
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2016
Note No. `
2015-2016 `
2014-2015 `
I. Revenue from Operations 19 1,111,213,599 1,392,879,743II. Other Income 20 9,121,004 20,714,368III. Total Revenue (I + II) 1,120,334,603 1,413,594,111
IV. ExpensesContract Execution Costs 21 900,144,346 1,179,792,054Changes in inventories of finished goods, work-in-progress and Stock-in-Trade
22 (95,279,201) (149,616,430)
Employee Benefits Expense 23 194,160,905 196,859,205Finance Costs (Net) 24 63,380,046 59,666,025Depreciation and Amortisation 9,533,507 11,446,650Other Expenses 25 117,739,473 101,778,912Total Expenses 1,189,679,076 1,399,926,416
V. Profit / (Loss) for the year before Exceptional Items and tax (III- IV)
(69,344,473) 13,667,695
VI. Exceptional Items - -
VII. Profit / (Loss) for the year before Tax (V- VI) (69,344,473) 13,667,695
VIII. Tax Expense (1) Current Tax - 16,100,000 (2) Tax of Earlier Years (Credit ) / Charge - (3,961,631) (3) Deferred Tax (Credit) / Charge (2,532,450) (16,229,044)
(2,532,450) (4,090,675)IX. Profit/(Loss) for the year after Tax (VII- VIII) (66,812,023) 17,758,370
X. Earnings per equity share of ` 10 each 26 (1) Basic (5.31) 1.41 (2) Diluted (5.31) 1.41Significant Accounting Policies 1
Notes 1 to 40 form an integral part of the financial statementsAs per our attached report of even dateGIRISH M. PATHAK Partner Membership No: 102016
RAJESH V SHAH Chairman
DIN : 00033371
R. SANKARAN Director
DIN : 00381139
For & on behalf of K. K. MANKESHWAR & CO Chartered Accountants Firm Registration No: 106009W
K. P. JOTWANI Manager
R. G. GOLATKAR Chief Financial Officer
Mumbai, May 20,2016D. J. VORA
Company Secretary
34
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2016
2015-2016 2014-15
` ` `
A. Cash Flow from Operating Activities
Profit / (Loss) before exceptional items and tax (69,344,473) 13,667,695
Add :
a) Depreciation /Amortisation expense 9,533,507 11,446,650
b) Facilities at Customers' sites Written off 6,063,610 2,941,444
c) Loss on Sale of Assets 47,608 1,871,900
d) Interest and Finance charges (Net) 63,380,046 59,666,025
e) Sundry Balances Written-off / Appropriated 13,614,379 1,569,374
92,639,150 77,495,393
Less :
a) Interest Income 5,666,174 14,285,875
b) Dividend on Investments - 52
c) Profit on Sale of Assets 35,057 1,234,877
d) Excess Provision Written Back (Net) 3,249,215 2,710,371
8,950,446 18,231,175
Operating Profit before Working Capital changes 14,344,231 72,931,913
Add / (Less) :
a) (Increase) / Decrease in Long term Bank Deposits (4,150,423) (4,804,878)
b) Increase / (Decrease) in Trade and Other Payables 76,516,611 64,969,588
c) (Increase) / Decrease in Trade and Other Receivables (17,648,470) 109,262,181
d) (Increase) / Decrease in Inventories (89,558,291) (163,278,416)
(34,840,573) 6,148,475
Cash Inflow / (Outflow) generated from Operations (20,496,342) 79,080,388
Less : Direct Taxes Paid - 12,138,369
Net Cash Inflow / (Outflow) from Operating Activities (20,496,342) 66,942,019
35
2015-2016 2014-15
` ` `
B. Cash Flow from Investing ActivitiesInflow :
a) Sale of Assets 237,049 2,232,044 b) Interest Received 18,066,775 14,674,715 c) Dividend on Investments - 52 d) Loans Realised 21,750,000 67,035,224
40,053,825 83,942,035Outflow :
a) Acquisition of Fixed Assets 12,844,692 2,112,983 b) Investments in Shares - - c) Additions to Facilities at Customers' Sites 11,897,773 5,021,884
24,742,465 7,134,867Net Cash Inflow / (Outflow) from Investing Activities 15,311,360 76,807,168
C. Cash Flow from Financing ActivitiesInflow :
Increase/(decrease) in Borrowings (Net) 57,607,345 (53,502,861)
Outflow : a) Dividend Paid 9,664 14,489,691 b) Interest Paid (Net) 66,565,784 60,866,626
66,575,448 75,356,317
Net Cash Inflow / (Outflow) from Financing Activities (8,968,103) (128,859,178)
Net Increase /(Decrease) in Cash / Cash Equivalents (14,153,085) 14,890,009Add: Balance at the beginning of the year 18,006,843 3,116,834Cash & Cash Equivalents at the close of the year 3,853,758 18,006,843
Cash / Cash Equivalents at the close of the year (refer Note No.16)Cash on Hand 156,161 135,119Bank Balances 3,276,597 5,937,724Fixed Deposit Account 421,000 11,934,000
3,853,758 18,006,843
As per our attached report of even dateGIRISH M. PATHAK Partner Membership No: 102016
RAJESH V SHAH Chairman
DIN : 00033371
R. SANKARAN Director
DIN : 00381139
For & on behalf of K. K. MANKESHWAR & CO Chartered Accountants Firm Registration No: 106009W
K. P. JOTWANI Manager
R. G. GOLATKAR Chief Financial Officer
Mumbai, May 20,2016D. J. VORA
Company Secretary
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2016 (Contd.)
36
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
1. SIGNIFICANT ACCOUNTING POLICIES1.1 Basis of Accounting : The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under
the historical cost convention on the accrual basis, in accordance with the applicable mandatory Accounting Standards as prescribed under section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rule, 2014, the provisions of the Act, to the extent notified.
The Company is in to construction / erection business, where, the operating cycle depends upon the completion of the project, which is generally beyond twelve months. However, the Company has considered its operating cycle as 12 months for the purpose of current, non-current classification of assets and liabilities. Where as per the specific terms of the contract, the amounts are due beyond twelve months, the classification of assets and liabilities in to current and non- current is made accordingly.
1.2 Fixed Assets and Depreciation :(i) Fixed Assets : Fixed Assets are stated at cost of acquisition / book value less accumulated depreciation / amortisation. Costs include all
expenses incurred to bring the assets to its present location and condition.
(ii) Depreciation / Amortisation :(a) Depreciation is provided on Straight Line Method, in accordance with Schedule II to the Act. The useful lives of the
assets for computing depreciation are as per Schedule II of the Act.
(b) Cost of Intangibles capitalised is amortised over their useful life.
(c) Cost of ERP Software capitalised is amortised over a period of five years.
(d) Depreciation / Amortisation on additions or on sale/ discard of assets is provided on pro-rata basis from the date of such addition or up to the date of such sale / discard as the case may be. Depreciation on the assets purchased during the year is provided on the basis of individual useful life of the asset, which can Vary with the useful lives Prescribed in Schedule II of the Act.
1.3 Investments : Investments are classified into current and non-current investments. All non-current investments are stated at cost. Diminution,
if any, in the value of investments, other than temporary, is provided for each investment individually. Current investments are stated at lower of cost & market value / net realisable value.
1.4 Inventories :(i) Stores and Spares : Stores and Spares are valued at cost or net realisable value whichever is lower, computed on weighted average basis.
Cost comprises of all costs of purchase and other costs incurred in bringing the inventories to its present location and condition.
(ii) Incomplete Contract Works under Contract Work-in-Progress : “Incomplete Contract Works” are valued by the direct cost method. The direct cost is determined for each contract
separately by considering all direct costs specifically attributable to each contract. However, where the outcome of the contract, based on percentile completion method is ascertained reliably after taking into account all future costs, and revenues, proportionate profit attributable to each contract is considered. The concept of valuation of “Incomplete Contract Works” under “Contract Work-in-Progress” arises only after the stage when direct costs under each contract are not carried forward any further as “Accumulated Direct Costs” as contemplated in policy 1.6(iii) below.
1.5 Amortisation of Facilities at Customers’ site : All facilities in the nature of assets created at the customers’ site and which are to be abandoned at the end of the each contract
are written off / amortised in equal monthly instalments over the period commencing from the month of completion of the individual facility upto the contracted month for completion of the contract plus twelve months. Billable reimbursements against such facilities, if separately identified in a contract, are similarly credited in equal annual instalments against the write-offs over the said period.
1.6 Revenue Recognition : Engineering construction business :
(i) Income by way of revenue arising out of execution of contract work (including supply of materials), is credited as “Income” only after at least 5% / 10% / 15% (depending upon each contract value) of the total estimated contract costs (i.e. direct and indirect costs) in respect of each contract are incurred (on accrual basis). Such revenue is recognised, as the contract
37
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
progresses, by reference to the stage of completion of each contract and the invoices acknowledged by the customer’s authorised representative. Procurement of goods and materials, prior to commencement of the contract activity, is not considered as a progress in the contract activity and hence, no revenue is recognised, although, value of such goods and materials procured, exceeds 5% / 10% / 15% of the estimated contract costs.
(ii) The Company follows the “Percentage of Completion Method” of accounting for execution of contract work. The revenue from the execution of contracts is recognised proportionately with the degree of completion achieved under each contract, matching revenue with expenses incurred and therefore, the invoices raised for claiming periodic payments from customers are not accounted as income and the “Trade Receivables / Advances received against Contracts” are reflected accordingly.
Claims made on account of escalation in costs and on account of variation in contract work approved by the customers, are both, recognised as revenue only when and to the extent of the acceptance / realisation of the amount of the claim or variation.
(iii) Direct costs i.e. all costs related to contracts, which are accounted on accrual basis, are charged to revenue in respect of each contract undertaken, only after at least 5% /10% / 15% of the total estimated all direct and indirect contract costs in respect of each contract are incurred. Till such time, all such direct costs accounted in respect of each contract are carried forward to the next accounting year as “Accumulated Direct Costs” under “Contract Work-in-Progress”. Indirect costs are treated as expenses for the year in which they are incurred on accrual method of accounting and charged to revenue.
Infotech Business :(iv) Income from Infotech services provided is accounted on accrual basis.
Other Income and Expenditure : (v) Other Revenues / Incomes and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.
(vi) Dividend income is accounted in the period in which the right to receive the same is established.
1.7 Use of Estimates : The preparation of financial statements in conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures related to contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Differences between actual results and estimates are recognised in the period in which results are known.
Changes in the estimates, if material, are reflected in the financial statements in the period in which changes are made and their effects are disclosed in the notes to the financial statements.
1.8 Retirement and other Employee Benefits :(i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and
Loss for the year in which the related services are rendered.
(ii) Post employment benefits(a) Defined contribution plans :
Company’s contributions to the superannuation scheme, state governed provident fund scheme are recognised during the year in which the related service is rendered.
(b) Defined benefit plans :
The present value of the gratuity obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognised immediately in the Statement of Profit and Loss. The gratuity liability as per the Payment of Gratuity Act,1972 for Permanent Employees is funded with the Life Insurance Corporation of India and the fair value of the plan assets, is reduced from the gross obligation under the defined benefit plan, to recognise the obligation on a net basis.
(iii) Long term compensated absences which are unfunded are provided on the basis of an actuarial valuation using the Projected Unit Credit Method.
1.9 Foreign Currency Fluctuations :(i) All transactions in foreign currency, are recorded at the rates of exchange prevailing on the dates when the relevant
transactions take place.
(ii) Monetary items in the form of Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet. Resultant gain or loss is accounted during the year.
38
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
1.10 Borrowing Costs : Interest and other borrowing costs attributable to qualifying assets are Capitalised. Other interest and borrowing costs are
charged to revenue.
1.11 Taxation : Income-tax expense comprises Current tax and Deferred tax charge or credit.
(i) Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum Alternate Tax (MAT) eligible for set off in subsequent years, (as per tax laws) is recognized as an asset by way of credit to the Statement of Profit and Loss only if there is convincing evidence of its realisation. At each balance sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realisation.
(ii) The Deferred tax Asset and Deferred tax Liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax Assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax Assets on account of other timing differences are recognised, only to the extent there is a reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of Deferred tax Assets are reviewed to reassure realisation.
1.12 Impairment of Assets : The Company, at each balance sheet date, assesses whether there is any indication that an individual asset or group of assets
constituting a Cash Generating Unit (CGU) may be impaired. Provision for impairment loss is recognised where the recoverable amount of an asset or a CGU, is less than its carrying amount. Provisions for impairment losses recognised in earlier years are further reviewed at each balance sheet date and adjusted for changes in the estimated recoverable amount of asset / CGU.
1.13 Provisions, Contingent Liabilities and Contingent Assets : Provisions involving a substantial degree of estimation in measurement are recognised when there is a present obligation as a
result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the financial statements. Contingent Assets are neither recognised nor disclosed in the financial statements.
1.14 Assets taken on lease : Assets taken on finance lease are accounted in accordance with Accounting Standard 19 on Leases. Lease payments are
apportioned between finance charges and reduction of outstanding liabilities.
1.15 Cash flow statement : Cash flows are reported using the Indirect Method, whereby profit / (loss) before tax is adjusted for the effects of transactions
of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
1.16 Cash and bank balances : Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly
liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.
1.17 Earnings Per Share : Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earning per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
39
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
2. SHARE CAPITAL
Particulars 31.03.2016 31.03.2015
Number of Shares
` Number of Shares
`
a) Authorised
Equity Shares of `10/- each 20,000,000 200,000,000 20,000,000 200,000,000
Preference Shares of `100/- each 500,000 50,000,000 500,000 50,000,000
20,500,000 250,000,000 20,500,000 250,000,000
b) Issued
Equity Shares of `10/- each 12,592,700 125,927,000 12,592,700 125,927,000
12,592,700 125,927,000 12,592,700 125,927,000
c) Subscribed and Paid up
i) Equity Shares of `10/- each fully paid up 11,973,900 119,739,000 11,973,900 119,739,000
ii) Fully paid up pursuant to contract(s) without payment being received in cash
598,500 5,985,000 598,500 5,985,000
iii) Forfeited Shares 20,300 73,500 20,300 73,500
Total 12,592,700 125,797,500 12,592,700 125,797,500
2.1 RECONCILIATION OF NUMBER OF SHARES AND AMOUNT OUTSTANDING :
31.03.2016 31.03.2015
Particulars Equity Shares Equity Shares
Number of Shares
` Number of Shares
`
Equity Shares at the beginning of the year 12,592,700 125,797,500 12,592,700 125,797,500
Add: Shares issued during the year - - - -
Less: Shares bought back during the year - - - -
Equity Shares at the end of the year 12,592,700 125,797,500 12,592,700 125,797,500
2.2 DETAILS OF SHARES HELD BY SHAREHOLDERS HOLDING MORE THAN 5% SHARES :
Name of Shareholder 31.03.2016 31.03.2015
No. of Shares held
% of total holding
No. of Shares held
% of total holding
a) Mukand Ltd 4,539,781 36.11% 4,539,781 36.11%
b) Jamnalal Sons Private Ltd 1,386,395 11.01% 1,386,395 11.01%
Total 5,926,176 47.12% 5,926,176 47.12%
2.3 The Company has issued only one class of shares referred to as equity shares having par value of `10/-. Each holder of equity share is entitled to one vote per share.In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all the preferential amount, in the proportion of the number of equity shares held by each shareholder.
40
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
3. RESERVES AND SURPLUS
Particulars 31.03.2016 31.03.2015
` ` `
(a) Securities Premium Account
As per last Balance Sheet 224,766,229 224,766,229
(b) General Reserve
As per last Balance Sheet 7,356,868 7,356,868
(c) Surplus
Balance as at beginnig of the year 230,940,619 223,274,362
Add (Less): Profit / (Loss) for the year (66,812,023) 17,758,370
Less: Additional depreciation (net of tax ` 48,46,993/-) pursuant to enactment of Schedule II of the Act, (Refer note 39) - (10,092,113)Balance as at end of the year 164,128,596 230,940,619
Total 396,251,693 463,063,716
4. LONG-TERM BORROWINGS
(i) Secured
Long term maturities of Finance lease obligations
From Banks - 3,732,314
From Other Parties (Refer note 4.i and 29) 2,300,073 166,971
2,300,073 3,899,285
(ii) Unsecured
Public Deposits (Refer note 4.ii) 86,439,000 99,236,000
Total 88,739,073 103,135,285
4.i Finance lease obligations are secured against leased assets. Terms of repayment and rates of interest are as under :Finance Lease of ` 2,300,073 Repayable in FY 2017-18 and FY 2018-19 at
11.00% p.a & 12.40% p.a..Installments falling due in respect of the above loans aggregating to ` 48,55,042/- upto 31st March, 2017 have been grouped under "Current maturities of Finance Lease Obligations" (Refer note 8)
4.ii Repayment Schedule of Public Deposits is as under:Public Deposits of ` 41,868,000 Repayable in FY 2017-2018 at Interest rates
ranging from 11.50% to 11.75% p.a.Public Deposits of ` 44,571,000 Repayable in FY 2018-2019 at Interest rate of
11.50% p.a.
41
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
5 DEFERRED TAX ASSET / (LIABILITIES) [NET] 31.03.2016 31.03.2015` ` `
Liabilities:Deferred Tax Liabilities in respect of Depreciation 3,531,458 3,703,930Total 3,531,458 3,703,930Assets:Deferred Tax Assets in respect of Taxes, Duties etc. 1,174,370 1,174,371Deferred Tax Assets in respect of Employee Benefits 9,793,061 8,537,321Deferred Tax Assets in respect of Provision for Doubtful Debts 3,116,244 2,012,005Total 14,083,675 11,723,697Net deferred tax (liability) / Assets 10,552,217 8,019,767
6 LONG-TERM PROVISIONS
Provision for employee benefits (Net)(Refer note 1.8 and 23.2)
23,027,697 24,065,364
Provision for warranties (Refer note 6.1) 1,000,000 1,000,000 Total 24,027,697 25,065,364
6.1 DETAILS OF PROVISION FOR WARRANTIES
Balance as at beginnig of the year 1,000,000 1,000,000Add: Provision for the year - -Less: Payment made during the year - -Less: Released during the year - -Balance as at end of the year 1,000,000 1,000,000
7. SHORT-TERM BORROWINGS
Loan repayable on demand(i) SecuredFrom Bank (Refer note 7(i) 243,689,113 157,996,515Deposits (Unsecured)Public Deposits 55,323,000 74,545,000Inter Corporate Deposits 67,500,000 61,500,000
Total 366,512,113 294,041,515
7(i) Nature of security for short term LoansCash credit facility from Central Bank of India is secured by :(i) Hypothecation of all, present and future, stocks, book debts and fixed assets of the company excluding assets taken on
hire purchase.(ii) Pledge of 681,200 equity shares of Mukand Ltd.(iii) Corporate Guarantee given by a Group Company.
42
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
8. OTHER CURRENT LIABILITIES
Particulars 31.03.2016 31.03.2015
` `
Current Maturities of Finance Lease Obligations 4,855,042 5,322,083
(Refer note 29)
Interest accrued but not due on Public Deposits 7,769,081 10,954,819
Unclaimed Deposits 3,368,000 2,707,000
Advance received against Contracts{Refer note 1.6 (ii)}
71,104,430 88,317,098
Unclaimed Dividend (*) 1,106,708 1,116,372
Other Liabilities ($) 115,712,473 81,385,056
203,915,734 189,802,428
Total 203,915,734 189,802,428
(*) There are no amounts due for payment to Investors Education and Protection Fund as at the year end under section 125 of the Act.($) Includes statutory dues and payable to employees.
9 SHORT-TERM PROVISIONS
Particulars
For Employee Benefits (Refer note 1.8 and 23.2) 11,113,683 11,718,795
Total 11,113,683 11,718,795
10. FIXED ASSETS `
ASSETS
GROSS BLOCK DEPRECIATION / AMORTISATION NET BLOCK
As at 1st April,
2015
Additions/ Adjustments
Deductions/ Adjustments
As at 31st March,
2016
Upto 1st April,
2015
Depreciation For the
Year
Deductions/ Adjustments
Debited to Retained Earning
31st March, 2015 *
Upto 31st March,
2016
As at 31st March,
2016
As at 31st March,
2015
A TANGIBLE ASSETSOwn AssetsPlant and Equipment 51,094,489 7,891,626 231,659 58,754,456 21,173,517 4,456,920 91,123 8,086,643 33,625,957 25,128,499 21,834,329Computers 119,597,875 4,454,026 68,130 123,983,771 112,876,790 634,576 - 5,915,652 119,427,018 4,556,753 805,433Furniture and Fixtures etc. $ 22,873,530 499,040 166,704 23,205,866 10,456,179 1,195,012 224,087 936,812 12,363,916 10,841,950 11,480,539Vehicles 1,079,855 - 242,639 837,216 455,643 94,249 144,322 - 405,570 431,646 624,212Sub-Total 194,645,749 12,844,692 709,132 206,781,309 144,962,129 6,380,757 459,532 14,939,107 165,822,461 40,958,848 34,744,513Assets under Lease #Plant and Machinery 39,810,096 - - 39,810,096 5,205,393 2,394,856 - - 7,600,249 32,209,847 34,604,703Vehicles 1,151,008 - - 1,151,008 375,698 155,831 - - 531,529 619,479 775,310Sub-Total 40,961,104 - - 40,961,104 5,581,091 2,550,687 - - 8,131,778 32,829,326 35,380,013Total (A) 235,606,853 12,844,692 709,132 247,742,413 150,543,220 8,931,444 459,532 14,939,107 173,954,239 73,788,174 70,124,526
B INTANGIBLE ASSETSOwn Assets -Intellectual Property Rights 52,000,000 - - 52,000,000 52,000,000 - - 52,000,000 - -ERP Software 9,487,590 - - 9,487,590 7,450,885 602,063 - 8,052,948 1,434,642 2,036,705Total (B) 61,487,590 - - 61,487,590 59,450,885 602,063 - 60,052,948 1,434,642 2,036,705Total (A+B) 297,094,443 12,844,692 709,132 309,230,003 209,994,105 9,533,507 459,532 234,007,187 75,222,816 72,161,231Previous Year 314,865,746 2,112,980 19,884,283 297,094,444 215,562,672 11,446,650 17,015,217 14,939,107 209,994,105 72,161,231 -
$ - Includes Office Equipments & Air Conditioner# - Refer Note 30* - Refer Note 391) Pursuant to the Companies Act 2013, the Company has apied the useful lives of the fixed assets as specified in Schedule II, except in respect of ERP software, where the amortisation is made as per the policy
consistently followed by the Company in the past. Accordingly, the unamortised carrying values of the fixed assets are being depreciated over the remaining useful lives of the respective assets, after considering the specified residual value of the assets. The written down value of Fixed Assets whose lives have expired as at 1st April 2014, have been adjusted, net of tax, in opening balance of statement of Profit and Loss.
2) Based on an independent technical evaulation, the useful life of containers used at various sites and included in Office Equipment has been estimated 20 years (on a single shift basis), which is different from that prescribed in Schedule II of the Act.
43
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
11 NON-CURRENT INVESTMENTSParticulars 31.03.2016
Nos31.03.2016
`31.03.2015
Nos31.03.2015
`A. Other Investments (Quoted) - At Cost :
Mukand Limited (Associate Company) # 1,362,400 31,342,012 1,362,400 31,342,012 (Equity Shares of ` 10/- each fully paid up)Mukand Limited (Associate) # 52,400 524,000 52,400 524,000 0.01% Cummulative Redeemable Preference Shares of ` 10/- each, fully paid upTotal - Quoted 1,414,800 31,866,012 1,414,800 31,866,012
Particulars Book Value (`) Market Value (`)31.03.2016 31.03.2015 31.03.2016 31.03.2015
Aggregate Quoted Investments 31,866,012 31,866,012 44,027,004 63,967,300
Total - Quoted 31,866,012 31,866,012 44,027,004 63,967,300
B. Other Investments (Unquoted)Particulars 31.03.2016 31.03.2016 31.03.2015 31.03.2015
Nos ` Nos ` Indian Thermal Power Limited (Associate Company) 7,153 71,530 7,153 71,530 Total - Unquoted 7,153 71,530 7,153 71,530
Particulars Book Value (`) Market Value (`)31.03.2016 31.03.2015 31.03.2016 31.03.2015
Aggregate Unquoted Investments 71,530 71,530 - - Less: Provision for Diminution in Value of Investment (71,530) (71,530) - - Total - Unquoted - - - -
# 681,200 Equity Shares fully paid pledged as collateral security against working capital facilities availed from Central Bank of India {Refer note 7.1(ii)}
12. LONG TERM LOANS & ADVANCES
Particulars (`)
31.03.2016 (`)
31.03.2015 (`)
a) Security Deposits
Unsecured, considered good 2,079,886 2,144,229
b) Other loans and advances
Unsecured, considered good
Balance with Revenue Authorities (Net of Provision) 143,838,464 129,876,868
Loans to Companies (Refer note 28 ) 58,800,000 80,550,000
Advance paid to Suppliers, Contractors 440,000 999,162
203,078,464 211,426,030
Total 205,158,350 213,570,259
44
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
13 OTHER NON-CURRENT ASSETSParticulars 31.03.2016 31.03.2015
` ` `a) Long term Trade Receivables
Unsecured, Considered Good ($) 22,218,441 10,236,117b) Facilities at Customers' Site (Refer note 1.5)
Balance as at beginnig of the year 6,060,882 3,980,442 Add : Addition during the year 11,897,773 5,021,884 Less : Written-off during the year 6,063,610 2,941,444 Balance as at end of the year 11,895,045 6,060,882
c) OthersMargin Money with Banks (#) 52,514,016 48,363,595
Total 86,627,502 64,660,594($) - Includes amount receivable where defection period is over as per the terms of contract.(#) - Represents Fixed Deposits with Banks towards margin money for non fund based facilities availed.
14. INVENTORIES (Refer note 1.4)Stores & Spares 23,867,392 29,588,302Contract Work- in-progress Incomplete Contract Works 616,637,831 535,101,562 Accumulated Direct Costs 14,103,670 360,738
630,741,501 535,462,300Total 654,608,893 565,050,602
15. TRADE RECEIVABLESTrade Receivable outstanding for a period exceeding six months : Unsecured, Considered Good 68,819,181 90,327,130 Unsecured, Considered Doubtful 14,729,467 6,201,280 Less: Provision for Doubtful Debts (14,729,467) (6,201,280)
68,819,181 90,327,130Trade Receivable Outstanding for a period of less than six months : Unsecured, Considered Good 451,486,283 451,200,809Total 520,305,464 541,527,939
16. CASH AND CASH EQUIVALENTSI. Cash and cash equivalents
a) Cash on hand 156,161 135,119b) Balances with Banks in Current accounts
2,169,889 4,821,352
II. Other Bank Balances(i) in Unpaid Dividend Accounts 1,106,708 1,116,372(ii) in Deposit Repayment Reserve Account* 421,000 11,934,000
3,853,758 18,006,843Total 3,853,758 18,006,843
* Account pertains to Deposit maintained with Scheduled Bank (SLR) for Repayment of Deposits maturing in the Current Financial Year and next Financial Year as per the requirements of the Act.
45
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
17. SHORT-TERM LOANS AND ADVANCES
Particulars 31.03.2016 31.03.2015
` ` `
Security Deposits
Unsecured, Considered good 2,596,415 2,645,166
Other loans and advances
Unsecured, Considered good
Advance paid to Suppliers,Contractors 3,642,678 2,335,109
Prepaid Expenses 7,234,873 8,557,540
10,877,551 10,892,649
Total 13,473,966 13,537,815
18. OTHER CURRENT ASSETS
Interest Receivable from Companies (Net of Provision) (Refer note 28) 29,228,810 42,957,419
Interest Receivable Others (#) 7,697,220 6,369,212
Total 36,926,030 49,326,631
(#) - Including interest receivable from Banks ` 76,97,220/- (Previous Year - ` 63,69,212/-).
Particulars 2015-16 2014-15
` ` `
19. REVENUE FROM OPERATIONS
Value of contract work executed {Refer note 1.6(i) - 1.6(iii)} - Supply of Materials 767,556,787 934,880,412
- Sale of Services 289,656,812 407,599,331
1,057,213,599 1,342,479,743
Income from Infotech Business 54,000,000 50,400,000
Total 1,111,213,599 1,392,879,743
20. OTHER INCOME
Interest (Gross) 5,666,174 14,069,750
Profit on Sale of Assets (Net) 35,057 1,234,877
Excess Provision Written Back (Net) 3,249,215 2,710,371
Dividend on Investments - 52
Miscellaneous Income 170,558 2,483,193
Interest on Income Tax refund - 216,125
Total 9,121,004 20,714,368
46
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
21. CONTRACT EXECUTION COSTS
Particulars 2015-16 2014-15
` ` `
Sub-contracting Expenses 184,228,351 210,174,518
Cost of Materials Supplied 620,411,427 842,646,929
Stores, Spares and Construction materials consumed (Net) (Indigenous) 24,600,061 59,722,049
Equipment Hire Charges 46,101,707 36,756,221
Facilities at Customers' sites written off (Refer note 1.5) 6,063,610 2,941,444
Other Operational Expenses 18,739,190 27,550,893
Total 900,144,346 1,179,792,054
22. CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK- IN-TRADEParticulars 31.03.2016 31.03.2015
` ` `
Opening Stocks
Incomplete Contract Works 535,101,562 368,436,693
Accumulated Direct Costs 360,738 17,409,177
535,462,300 385,845,870
Closing Stocks
Incomplete Contract Works 616,637,831 535,101,562
Accumulated Direct Costs 14,103,670 360,738
630,741,501 535,462,300
(Increase) / Decrease in Stocks (95,279,201) (149,616,430)
23. EMPLOYEE BENEFITS EXPENSE
Salaries, Wages and Other Payments 172,767,114 172,929,989
Contribution to Provident and Other Funds 18,504,411 22,223,685
Welfare Expenses 2,889,380 1,705,531
Total 194,160,905 196,859,205
23.1 The Company has recognised `14,527,137 /- (Previous Year `14,361,154/-) as contribution towards defined contribution plans as an expense.
47
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
23.2 The disclosures in respect of the Defined Benefit Gratuity Plan to the extent information is available with the Company, are given below :Particulars 31.03.2016 31.03.2015
` `
Changes in present value of obligations :
Present value of Obligations at the beginning of the year 30,711,711 26,832,392
Interest cost 2,444,652 2,414,915
Current service cost 1,988,610 2,184,454
Actuarial Losses / (Gains) (317,438) 3,878,861
Benefits paid (7,385,566) (4,598,911)
Present value of Obligations at the close of the year 27,441,969 30,711,711
Changes in Fair Value of plan assets (Managed by LIC) :
Fair Value of Plan Assets at the beginning of the year 17,276,665 18,201,621
Expected return on Plan Assets 1,375,223 1,592,642
Contributions 3,029,048 2,162,199
Benefits Paid (7,385,566) (4,598,911)
Actuarial gain / (loss) on Plan Assets (154,569) (80,886)
Fair Value of Plan Assets at the close of the year 14,140,801 17,276,665
Reconciliation of Present Value of the Obligation and the Fair Value of Plan Assets and amount recognised in the balance sheet :Present value of Obligations at the close of the year 27,441,969 30,711,711
Fair Value of Plan Assets at the close of the year (14,140,801) (17,276,665)
Net Liability / (Asset) recognised 13,301,168 13,435,046
Amounts recognised in Statement of Profit and Loss :
Current Service Cost 1,988,610 2,184,454
Interest Cost 1,069,429 2,414,915
Expected Return on plan assets - (1,592,642)
Actuarial Loss (162,869) 3,959,748
Expenses recognised 2,895,170 6,966,475
Actuarial Assumptions at the Balance Sheet date :
Discount Rate 8.07% 7.96%
Expected Rate of Return on Plan Assets 8.07% 7.96%
Salary Escalation rate (*) 5.00% 5.00%
Mortality Table IALM-Mortality - Tables (2006-
08)Ultimate
IALM-Mortality - Tables (2006-
08)Ultimate
(*) The estimated salary escalation rate takes into account inflation, seniority, promotion and other relevant factors.
48
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
24. FINANCE COSTSParticulars 2015-2016 2014-2015
` ` ` Interest Expense 66,520,831 67,486,769
Less : Interest on Trade Dues 5,861,314 10,433,104 60,659,517 57,053,665
Other Borrowing Costs Loan Processing Charges 2,720,529 2,612,360Total 63,380,046 59,666,025
25. OTHER EXPENSES Rent 11,503,125 11,366,339 Insurance 882,459 764,681 Repairs to Machinery 44,800 66,323 Repairs - Others 4,679,270 4,230,330
4,724,070 4,296,653 Travelling and Conveyance 16,203,630 15,466,112 Auditor's Remuneration (Refer note 25.1) 961,416 952,950 Directors' Fees 530,000 470,000 Legal and Professional Charges 17,924,722 18,855,253 Loss on Assets Discarded / Sold 47,608 1,871,900 Service Tax and Works Contract Tax 3,012,842 1,255,809 Gain / (Loss) on Exchange Rate Variance - 91,344 Watch & Ward Expenses 7,957,897 7,077,640 Excess / Short Provision Written Off (Net) 4,079,408 7,209,176 Miscellaneous Expenses 27,769,731 24,330,402 Provision for Doubtful Debts / Interest Receivable 11,775,831 6,201,280 Sundry Balances / Interest Written-off / Appropriated (Net) 10,366,735 1,569,373Total 117,739,473 101,778,912
25.1 AUDITOR'S REMUNERATIONFor Audit Fees 600,000 600,000For Taxation Matters 75,000 75,000For Limited Review 1,50,000 1,50,000For Other Services 97,500 1,00,000Reimbursement of Expenses 38,916 27,950Total 961,416 952,950
26. EARNINGS PER EQUITY SHARES (EPS) ` `
Net Profit After Tax as per Statement of Profit and Loss attributable to Equity Shareholders
(66,812,023) 17,758,370
Weighted Average Number of Equity Shares used as denominator for calculating EPS
12,572,400 12,572,400
Basic and Diluted Earnings per share (in `) (5.31) 1.41Face Value per Equity Share (in `) 10 10
49
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
27. Contingent Liabilities not provided for:As at
31.3.2016`
As at 31.3.2015
`(i) Disputed Income Tax Dues 28,991,160 27,478,583(ii) Disputed VAT/Works Contract Tax Dues 20,034,909 24,486,486
(iii)The Company has given performance guarantees and / or guarantees against advances received from clients in the course of its business. Based on the past experience, Company is of the opinion that no liability would arise on this account and as such at present the liability, if any, can not be estimated.
28 The Company has, as at 31st March, 2016 loans aggregating ` 58,800,000/- (Previous Year - ` 80,550,000/-) and interest recoverable thereon aggregating ` 29,228,810/- (net of provision) (Previous Year - ` 42,957,419/-) due from investment companies. The net worth of these companies has eroded. On the basis of undertaking by these companies to pay the principal amount along with interest, (accrued upto 31st March, 2003) the Company had agreed to waive interest on these loans with effect from 1st April, 2003. As a matter of prudence, the Company had already stopped accounting for interest income on these loans with effect from 1st April, 2003. The management, based on its assessment of the estimated realisable values of the financial assets of these companies, believes that the Company would still be able to recover the loans and interest as mentioned above
29. Disclosures in respect of Finance Lease Arrangements
Particulars Not later than one year
`
Later than one year and not later than five years
`
Later than five years
` Minimum Instalments Payable (MIP) 5,222,580 2,303,315 Nil
(58,59,600) (3,906,400) Nil Present Value of Instalments Payable (PVIP) 4,855,042 2,300,073 Nil
(5,322,083) (3,899,285) NilPrevious year’s figures are in brackets.
30. Related Party Disclosures pursuant to Accounting Standards 18:
(i) Relationships :(a) Related parties where control / significant influence exists: (b) Key Management Personnel (KMP) :
1. Mukand Limited (Mukand)2. Mukand Global Finance Limited (MGFL)3. Mukand International Limited, UK4. Mukand International FZE, UAE5. Vidyavihar Containers Limited (VCL)6. Mukand Alloy Steels Private Ltd7. Bombay Forgings Limited8. Stainless India Limited9. Hospet Steels Limited10. Kalyani Mukand Limited11. Jamnalal Sons Private Limited12. Mukand Vini Mineral Limited13. Mukand Sumi Metal Processing Limited.
Note: Related party relationship is as identified by the Company and relied upon by the Auditors.
Mr. K. P. Jotwani – Manager.
50
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
(ii) Transactions with related parties referred in (i) above, in the ordinary course of business:
2015 - 2016`
2014 – 2015`
Nature of Transactions Referred in (i)(a) above
Referred in (i)(b) above
Referred in (i)(a) above
Referred in (i)(b) above
Sales – Mukand Ltd.• Contractsexecuted (including supply of materials)
105,105,944 137,309,573 -
• Interestreceived/receivable-MukandLtd.• InfotechServices
(ExcludingServiceTax)
-54,000,000
8,419,93250,400,000
-
Purchases :Other Payments / Expenditure
330,221,812 814,786,306
• Rent–MukandLtd. 3,628,993 3,134,880 -• Electricity–MukandLtd. 3,433,800 3,470,400 -• ReimbursementofExpenses-MukandLtd. 344,100 735,000 -• Remuneration-KMP 46,01,650 - 41,59,529• LegalandProfessionalCharges-MGFL 240,000 300,000 -• ITInfrastructure-MukandLtd.• Loanrepaymentsreceived–MukandLtd.
600,000-
-54,535,224
-
Outstanding balances at the close of the year :• AsDebtor-MukandLtd.• AsCreditor–MukandLtd.
20,546,228194,402,644
--
977,47,464209,715,563
--
• AsCreditor-MGFL 36,112 - 25,590 -• RentDepositsgiven-MukandLtd. 650,000 - 650,000 -• GuaranteegivenbyMukandLtd.toCentralBank
ofIndiaforCreditFacilities 1,150,000,000 - 850,000,000 -
(iii) Disclosure in respect of material transactions with related parties during the year (included in (ii) above)
Mukand Ltd. 2015-2016`
2014-2015`
SalesIncludingInterest 159,105,944 196,129,505Purchases 330,221,812 814,786,306ExpensesandOtherPayments 8,006,893 7,340,280LoanRepayment _ 54,535,224
51
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
31. SEGMENT INFORMATION
A. BUSINESS SEGMENT – PRIMARY
Particulars Construction Infotech Total2015-2016 2014-2015 2015-2016 2014-2015 2015-2016 2014-2015
Segment RevenueExternal Revenue 1,05,72,13,599 1,34,24,79,743 5,40,00,000 5,04,00,000 1,11,12,13,599 1,39,28,79,743Inter Segment Revenue - - - - - -Total Revenue 1,05,72,13,599 1,34,24,79,743 5,40,00,000 5,04,00,000 1,11,12,13,599 1,39,28,79,743Segment Result before interest and tax
22,90,472 8,25,19,404 1,69,38,229 1,01,88,842 1,92,28,701 9,27,08,246
Add /(Less): Unallocated Income / (Expenses) (Net)
(2,51,93,129) (1,93,74,526)
Interest and Finance charges (Net)
(6,33,80,046) (5,96,66,025)
Deferred Tax Credit / (Charge)
25,32,450 1,62,29,044
Provision for Current Tax
- (1,61,00,000)
Tax of Earlier Years (Credit ) / Charge
- 39,61,631
Net Profit (6,68,12,024) 1,77,58,370Other InformationSegment Assets 1,31,37,47,230 1,20,85,07,891 1,35,10,628 1,25,19,262 1,32,72,57,858 1,22,10,27,153Unallocated Corporate Assets
61,51,19,529 64,13,19,256
Total assets 1,94,23,77,387 1,86,23,46,409Segment Liabilities 66,00,90,390 57,55,72,567 1,33,78,547 91,22,565 67,34,68,936 58,46,95,132Unallocated Corporate Liabilities
74,68,59,259 68,87,90,062
Total liabilities 1,42,03,28,195 1,27,34,85,194Capital ExpenditureSegment Capital Expenditure
83,98,601 20,56,810 42,39,417 - 1,26,38,018 20,56,810
Unallocated Capital Expenditure
2,06,674 56,170
Total capital expenditure
1,28,44,692 21,12,980
DepreciationSegment Depreciation 77,00,618 49,97,626 11,09,207 27,50,015 88,09,825 77,47,641Unallocated Depreciation
7,23,682 33,16,432
Total Depreciation 95,33,507 1,10,64,073Significant Non Cash Expenditure
- -
Notes1. Unallocated income includes interest received ` 5,666,174/- (Previous Year ` 14,069,750/-).2. Unallocated assets mainly relate to loans to Companies, Advance tax and Investments. Unallocated Liabilities mainly relates to
Loan Funds and Tax Liabilities.3. Interest and Finance Cost is net of interest income from Trade Dues.
52
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
B : OTHER DISCLOSURES 1. Segments have been identified in line with the Accounting Standard (AS) 17 on Segment Reporting taking into account the
organisation structure as well as the differential risks and returns of these segments.
2. The Company has disclosed Business Segment as the primary segment.
3. Types of products and services in each business segment :
Business SegmentTypes of Products and Services
a) Construction - Construction and Engineering Activities
b) Infotech - ERP Implementation and Infotech Services
4. The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.
5. Secondary Segment Information - Geographical Segment : The operations of the Company are, at present, only in India within a single Geographical Segment.
32. (A) Details of loans and advances in the nature of loans to associates and shares held by loanees (stipulated under clause 32 of the listing agreement with Stock Exchanges).
Name of the party
Outstanding Amount`
Maximum Balance Outstanding during the year
`As at
31.03.2016As at
31.03.2015 2015-2016 2014-2015
* Mukand Ltd. (Group Company) - - - 545,35,224
* Also a Company in which Directors are interested as Directors.
(B) Shares held by the loanees in the capital of the Company
Name of the Loanee
No. of shares held by Loanee
Maximum no. of shares held by Loanee during the year
As at31.03.2016
As at31.03.2015
2015-2016 2014-2015
Mukand Ltd. (Group Company) 4,539,781 4,539,781 4,539,781 4,539,78133 Disclosure regarding Contracts in Progress
Particulars Year ended31.03.2016
`
Year ended31.03.2015
`Contract Costs incurred and recognized Profits (less recognized losses) 4,98,59,83,805 4,251,624,286Advances received 7,05,83,143 883,62,093The amount of retention (Included in Trade Receivables) 28,72,84,290 263,624,332
34. Trade Payables includes ` NIL (Previous Year - ` NIL) due to Micro Small & Medium Enterprises registered under Micro Small & Medium Enterprises Development Act, 2006 (MSME Act). During the year, no amounts have been paid beyond the appointed day in terms of MSME Act and there are no amounts paid towards interest. Further, there is no interest accrued / payable under the MSME Act at the close of the year.
The disclosure above is based on the information available with the Company regarding the status of suppliers under the said MSME Act.
35. As per section 73 of the Act, read with The Companies (Acceptance of Deposit) Rules, 2014, every Company having net worth less than ` 100 Crores or turnover less than ` 500 Crores, shall repay the deposits, on or before 31st March, 2015, accepted before the commencement of the Act, along with interest due thereon.
Though the Company has not made any default in repayment of deposits which were due on maturity dates, the Company not being an “Eligible Company”, was required to repay the deposits accepted before the commencement of the Act, on or before 31st March, 2015. The Company had preferred an appeal before the Company Law Board for granting permission to repay the deposits along with interest thereon on the respective maturity dates.
53
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2016
The Company Law Board by its order dated 19/05/2015, has granted the said permission to the Company subject to fulfilling of certain conditions therein. In view of the above, the Company has continued to repay its deposits along with its interest thereon, on the respective maturity dates.
36. The provisions of Section 135 of the Act, read together with the rules framed there under relating to CSR initiatives which need to be undertaken by specified companies are at present not applicable to the Company.
37. In the opinion of the Board of Directors, all items of Current Assets, Loans and Advances continue to have a realisable value of at least the amounts at which they are stated in the Balance Sheet, unless otherwise stated.
38. Balances of Trade Receivables, Loans & advances and Trade Payables are subject to confirmation and are as per books of account only. However, in the opinion of management, the reconciliation, if any will not have any material impact on Loss / Net worth of the Company for the year.
39. In accordance with the provision of Schedule II of the Companies Act, effective from April 01, 2014, the Company has charged depreciation based on the remaining useful life of the assets. Due to above, the depreciation charge for the year ended March 31, 2015 was higher by ` 3,500,473/-. Further, based on the transition provision of Schedule II, an amount ` 10,092,113/- (net of deferred tax ` 4,846,993/-) has been recognised in the Retained Earning.
40. Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.
Signatures to Notes 1 to 40
GIRISH M. PATHAK Partner Membership No: 102016
RAJESH V SHAH Chairman
DIN : 00033371
R. SANKARAN Director
DIN : 00381139
K. K. MANKESHWAR & CO Chartered Accountants Firm Registration No: 106009W
K. P. JOTWANI Manager
R. G. GOLATKAR Chief Financial Officer
Mumbai, May 20, 2016D. J. VORA
Company Secretary
54
6866
7811
8850
14136
11203
1,000
3,000
5,000
7,000
9,000
11,000
13,000
15,000
2011-12 2012-13 2013-14 2014-15 2015-16
Financial Year
Income from Operations Including Other Income
`in
La
cs
55625777 5812
5889
5220
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
2011-12 2012-13 2013-14 2014-15 2015-16
`in
Lacs
Net Worth
Financial Year
44.2445.95 46.23 46.84
41.53
10
20
30
40
50
2011-12 2012-13 2013-14 2014-15 2015-16
Net Worth per Equity Share
in`
Financial Year
55
VENUE OF AGM - ROUTE MAP
Mukand Engineers Limited30th Annual General MeetingAugust 8, 2016.
56
Notes
57
ATTENDANCE SLIP
MUKAND ENGINEERS LIMITEDCIN: L45200MH1987PLC042378
Registered Office: Bajaj Bhawan, Jamnalal Bajaj Marg, 226, Nariman Point, Mumbai- 400 021
PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL
Joint Shareholders may obtain additional slip at the venue of the meeting.
I/ We hereby record my/ our presence at the 30th Annual General Meeting of the Company held on Monday, 8th August, 2016 at 11.30 a.m at Kamalnayan Bajaj Hall, Bajaj Bhavan, Jamnalal Bajaj Marg, 226, Nariman Point, Mumbai- 400 021.
*Applicable for investors holding shares in electronic form. Member’s / Proxy’s Signature
DP ID*
Client ID*
Folio No.
No. of shares
EVOTING PARTICULARS
EVSN(Electronic Voting Sequence Number)
USER ID PASSWORD*
160622007 Folio No./ Client ID PAN Number/ Bank Account No./ Date of Birth
Physical Shareholders who does not have PAN should enter No. of Shares they hold as their password if they prefer to exercise e-voting.
The E-Voting facility will be available during the following voting period.
Commencement of E-Voting End of E-Voting
Thursday, 4th August 2016 from 10.00 a.m. (IST) Sunday, 7th August 2016 upto 5.00 p.m.
Note: Please refer the details and instructions mentioned in Part A- The instructions for members for remote e-voting which forms part of the Notice for the Annual General Meeting.
58
Notes
59
PROXY FORM
MUKAND ENGINEERS LIMITED
CIN: L45200MH1987PLC042378
Registered Office: Bajaj Bhawan, Jamnalal Bajaj Marg, 226, Nariman Point, Mumbai- 400 021
(Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014)
Name of the member(s):
Registered address:
E-mail Id:
Folio No/ Client Id:
DP ID:
I/ We, being member(s) of shares of Mukand Engineers Limited, hereby appoint:
1. of having e-mail id or failing him
2. of having e-mail id or failing him
3. of having e-mail id or failing him
and whose signature(s) are appended below as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 30th Annual General Meeting of the Company, to be held on Monday, 8th August, 2016 at 11.30 a.m at Kamalnayan Bajaj Hall, Bajaj Bhawan, Jamnalal Bajaj Marg, 226, Nariman Point, Mumbai- 400 021 and at my adjournment thereof in respect of such resolutions as indicated below:
** I wish my above proxy to vote in the manner as indicated in the box below:
Sr.No. Ordinary Resolutions
1 Adoption of Audited Financial Statements for the year ended 31st March, 2016, and Report of the Board of Directors and Auditors thereon.
2 Re-appointment of Shri. Rajesh V. Shah (DIN: 00033371) as Director, who retires by rotation.
3 Ratification of appointment of Statutory Auditors from the conclusion of this meeting until the conclusion of next Annual General Meeting and fixing their remuneration.
4 Approval of Related Party Transactions u/s 188 of the Companies Act, 2013 and Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Signed this______ day of_________2016
Signature of Shareholder
Signature of Proxy holder(s)
Affix a Re.1/-
Revenue Stamp
Notes:
1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the
Company not less than 48 hours before the commencement of the meeting.
2. A proxy need not be a Member of the Company.
3. A person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than 10% of the total
share capital of the Company carrying voting rights. A member holding more than 10% of the total share capital of the Company
carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or
shareholder.
4. Appointing a proxy does not prevent a member from attending the meeting in person if he so wishes.
5. In case of joint holders, the signature of any one holder will be sufficient, but names of all the joint holders should be stated.
Notes
Notes
