MUKAND SUMI METAL PROCESSING LIMITED

Transcription

1 MUKAND SUMI METAL PROCESSING LIMITED CIN: U27300MH2012PLC RD ANNUAL REPORT Board of Directors Mr. Rajesh V. Shah -- Chairman Mr. Arvind M. Kulkarni Mr. Vipul M. Mashruwala Ms. Anna Abraham -- appointed w.e.f. 11 th February, 2015 Mr. Kenji Setogawa Mr. Shinobu Nakada -- appointed w.e.f. 18 th October, 2014 Mr. Makoto Horie -- upto 28 th May, 2015 Mr. Masaki Sasamoto -- appointed w.e.f. 28 th May, 2015 Mr. N. C. Sharma -- appointed w.e.f. 15 th July, 2014 Mr. R. Sankaran -- appointed w.e.f. 11 th February, 2015 Key Managerial Personnel Mr. Arvind M. Kulkarni - Manager Mr. S. B. Jhaveri - Chief Financial Officer Mr. K. J. Mallya - Company Secretary Auditors M/s. Haribhakti & Co., LLP Chartered Accountant Registered Office: Bajaj Bhavan, 3 rd Floor, Jamnalal Bajaj Marg, 226, Nariman Point, Mumbai Tel: Fax: muksumi@mukand.com Project Office: Building No. 65, Thane Belapur Road, Village Dighe, Kalwe, Thane

2 MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) Directors Report Dear Members, Your Directors take pleasure in presenting the Third Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended 31 st March Financial Results The financial performance of the Company, for the financial year ended March 31, 2015 is summarised below: Particulars 1. in Million Total Income EBIDTA Profit/(Loss) Before Taxation Profit / (Loss) After Taxation Ratios: Particulars EBIDTA to SALES 3.28% 2.52% Earnings Per Share (.) Review of Operations During the financial year under review, the Company consolidated manufacturing and commercial operations. The company sold 58,398 MT of bright bars and wires valued at. 4, million, an increase of 28 % over previous year (the operations of the Company started in July 2013). The Company has utilized 89 % of its total capacity. The sale consisted of 47,098 Million Tons ( MT ) of Alloy Steel and 11,263 MT of Stainless Steel ( SS ) products. During the year, the Company has exported a total of 5,576 MT of Bright Bars with FOB value of Million. The sales for FY fell short in SS Bright bars and Alloy Steel Wires. The sale of SS bright bars is mainly to the Seamless Pipe sector, which was severely affected due to sudden drop in Crude Oil prices. The reduction in sales volume in Alloy Steel Wires was primarily due to surge of imports of SAS Wires and Wire

3 MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) rods from China starting October The sales of Alloy Steel Bright Bars was more or less as per the plans. 3. Outlook for Financial Year The Company has already procured a state of the art Wire Drawing Machine fitted with online Eddy Current Tester and a Combined Drawing line. These machines will widen the product range in Bright Bars and Wires, reduce manufacturing costs and also develop import substitute products, hitherto imported by the Automobile companies. The total capacity for sale of products will be enhanced from 66,000 MT to 81,000 MT per year after complete commissioning of the two new machines. The Company has plans to sell 69,000 MT of wires and bright bars (55,500 MT alloy steels and 13,500 stainless steels) for the FY 16, valued at approximately. 5,850 Million. 4. Joint Venture The Company is a joint venture of Mukand Limited, India and Sumitomo Corporation, Japan pursuant to the Master Agreement dated October 29, 2012, executed amongst and between Mukand Limited, Sumitomo Corporation, Sumitomo Corporation Asia & Oceania Pte. Ltd. (formerly known as Sumitomo Corporation Asia Pte. Ltd. ). The Company does not have any subsidiaries, associates or joint venture companies. 5. Dividend With a view to conserve resources, your Directors have thought it prudent not to recommend any dividend for the financial year under review. 6. Finance During the year under review, the company has availed working capital limit sanctioned from Kotak Mahindra Bank Ltd.. The total facility is Million, consisting of. 155 Million of Cash Credit limit,. 50 Million of Bill Discounting,. 100 Million of LC Discounting and. 100 Million of LC for Capex. The facility became operational from October, Transfer to Reserves No amount was transferred to General Reserves at the end of FY Material Changes and Commitments There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and the date of this report. 2

4 MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) 9. Share Capital The paid up Equity Share Capital of the Company was. 273,000,000/- as on 31 st March There was no public issue, rights issue, bonus issue or preferential issue etc. during the year. The Company has not issued any shares with differential voting rights, sweat equity shares nor has it granted any stock options during the year. 10. Deposits The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 ( the Act ) read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Act is not applicable. 11. Disclosure of Orders Passed by Regulators or Courts or Tribunal No orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company s operations in future. 12. Particulars of Loans, Guarantees and Investments The Company has neither given any loans/guarantees to any other entities nor has made any investments during the financial year. 13. Related Party Transactions There were no related party transactions entered into by the Company during the financial year which attracted the provisions of Section 188 of the Companies Act, 2013 as all related party transactions that were entered into by the Company during the year were on an arm s length basis and were in the ordinary course of the Company's business. Hence there are no transactions which are required to be disclosed in Form AOC Director s Responsibility Statement Pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that: i. in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made therefrom; ii. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year ended as at 31 st March, 2015 and of the profit of the Company for the said period; 3

5 MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) iii. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. the directors have prepared the annual accounts on a going concern basis; v. the Company being an unlisted public company, is not required to lay down internal financial controls to be followed by the Company; and vi. the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. 15. Extract of Annual Return The 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 A. 16. Board of Directors & Key Managerial Personnel A. Board of Directors: As per the provisions of Sec 149 of the Companies Act, 2013 read with the Rules made thereunder, the Company is required to have at least two Directors of the total number of directors as independent directors and at least one woman director on its Board. Accordingly, as on 31st March 2015, the Board of Directors of the Company consisted of nine directors, of whom two were non-executive independent and seven were non-executive and non-independent (including one woman director) as per details given in the Table below. The Company has a nonexecutive Chairman. Sr. No. Name of the Director Category 1 Mr. Rajesh V. Shah Chairman, Non Executive 2 Mr. Arvind M. Kulkarni Executive 3 Mr. Vipul M. Mashruwala Non Executive 4 Ms. Anna Abraham Non Executive 5 Mr. Kenji Setogawa Non Executive 6 Mr. Makoto Horie Non Executive 7 Mr. Shinobu Nakada Non Executive 8 Mr. N. C. Sharma Non Executive & Independent 9 Mr. R. Sankaran Non Executive & Independent During the year under review:- i. Mr. Prakash V. Mehta, Independent Director has ceased to be a Director with effect from 2 nd April 2014; 4

6 MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) ii. iii. iv. Mr. N. C. Sharma, was appointed as an Independent Director, pursuant to Section 149 of the Companies Act, 2013, by the members at the Second Annual General Meeting held on 15 th July, 2014, to hold office for period of 5 (Five) consecutive years effective from 15 th July, 2014 or upto Seventh Annual General Meeting, whichever is earlier. Mr. R. Sankaran was appointed as Additional Director of the Company in the category of Independent Director, pursuant to Section 149 of the Companies Act, 2013, for a period of 5 (Five) years, at the meeting of the Board of Directors held on 11 th February, 2015 subject to the shareholders approval in the ensuing Third Annual General Meeting of the Company. Mr. R. Sankaran holds office as such upto the date of the ensuing Annual General Meeting of the Company. Mr. Shinobu Nakada and Ms. Anna Abraham were appointed as Additional Directors of the Company in the category Non-Executive Director at the meeting of the Board of Directors held on 11 th February, 2015 subject to the shareholders approval in the ensuing Third Annual General Meeting of the Company. Mr. Shinobu Nakada and Ms. Anna Abraham hold office as such upto the date of the ensuing Annual General Meeting of the Company. v. Mr. Shota Kajikawa, Non-Executive Director has ceased to be a Director with effect from 18 th October, 2014 and Mr. Umesh V. Joshi, Non-Executive Director has ceased to be a Director with effect from 11 th February, The Board records its appreciation for the contribution made by the aforesaid Directors during their tenure. Mr. R. Sankaran, Mr. Shinobu Nakada and Ms. Anna Abraham are eligible for appointment as Directors of the Company. They have consented to continue to act as Directors of the Company and have offered themselves for reappointment. The Board recommends their appointment. Mr. Rajesh V. Shah, Chairman and Non-Executive Director and Mr. Vipul M. Mashruwala, Non-Executive Director of the Company, retire by rotation and being eligible offer themselves for reappointment. The Board recommends their reappointment. B. Key Managerial Personnel: The Company had already appointed Mr. Arvind M. Kulkarni, as a Manager as per the provisions of the Companies Act, 1956 and thus fulfils the criteria for appointment of Managing Director or a Chief Executive Officer or a Manager or a Whole-time Director as required under the provisions of Section 203 of the Companies Act, Mr. Arvind M. Kulkarni, holds the 5

7 6 MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) office of Manager for a period of 3 (three) years with effect from 21 st September, During the year under review:- i. Mr. Pawan Jain ceased to be a Company Secretary w.e.f. 18 th October, ii. Mr. K. S. Narula ceased to be Chief Financial Officer(CFO) and Mr. S. V. Panse ceased to be a Chief Executive Officer (CEO) w.e.f. 18 th October, iii. iv. Mr. S. B. Jhaveri was appointed as the Chief Financial Officer (CFO) of the Company as per the provisions of Section 203 of the Companies Act, Mr. K. J. Mallya was appointed as the Company Secretary (CS) of the Company as per the provisions of Section 203 of the Companies Act, None of the Directors or Key Managerial Personnel draws any remuneration from the Company, except that Independent Directors are paid sitting fees of. 20,000/- per Board Meeting and. 10,000/- per Committee meetings and meeting of Independent Directors attended by them. 17. Declaration of Independence The Independent Directors of the Company have submitted their Declaration of Independence, as required under the provisions of Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in Section 149(6) of the said Act. 18. Board Meetings The Board of Directors met 4 times during the financial year ended 31 st March, 2015 in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. As per the provisions of Code for Independent Directors as laid down in Schedule IV of the Companies Act, 2013, a separate meeting of Independent Directors was duly held on 31 st March, No other Directors or Key Mangerial participated in the said meeting. 19. Committees of Board A. Audit Committee: Pursuant to the Section 177 of the Companies Act, 2013, an Audit Committee was re-constituted by the Board at its meeting held on 11 th February, 2015 with the following members: i. Mr. R. Sankaran - Chairman ii. Mr. N. C. Sharma - Member iii. Mr. Kenji Setogawa - Member

8 B. Nomination and Remuneration Committee: 7 MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) Pursuant to the Section 178 of the Companies Act, 2013, a Nomination and Remuneration Committee was constituted by the Board at its meeting held on 11 th February, 2015 with the following members: i. Mr. N. C. Sharma - Chairman ii. Mr. R. Sankaran - Member iii. Mr. Vipul M. Mashruwala - Member iv. Mr. Kenji Setogawa - Member 20. Corporate Social Responsibility The Company has not crossed the threshold limits as specified in Section 135 of the Companies Act, Hence, the provisions of Section 135 of the Companies Act, 2013 relating to CSR initiatives which need to be undertaken by a Company are not applicable to the Company. 21. Directors Remuneration Policy & Criteria for Matters under Section 178 Information on the Company's policy on director's appointment and remuneration including the criteria for determining the qualifications, positive attributes and independence of a director and other matters provided under Section 178(3) are given in the statement annexed to this report as Annexure B. 22. Risk Management Policy The process of identification and evaluation of various risks inherent in the business environment and the operations of the Company and initiation of appropriate measures for prevention and/or mitigation of the same are dealt with by the concerned operational heads under the overall supervision of the Board of Directors of the Company. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews, adequacy of which are periodically assessed by the Audit Committee and the Board of Directors. 23. Adequacy of Internal Financial Controls Adequate systems for internal controls provide assurances on the efficiency of operations, security of assets, statutory compliance, appropriate authorization, reporting and recording transactions. The scope of the audit activity is broadly guided by the annual audit plan approved by the top management and audit committee. The Internal Auditor prepares regular reports on the review of the systems and procedures and monitors the actions to be taken. 24. Performance Evaluation of the Board Pursuant to the provisions of the Companies Act, 2013, a separate exercise was carried out to evaluate the performance of individual directors, including the Chairman of the Board who were evaluated on parameters such as level of engagement, contribution, openness to new ideas, risk management compliances, independence of judgement, and safeguarding the interests of the

9 8 MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) Company. The performance evaluation of the Independent directors was carried out by the entire Board. The performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors. The Board also carried out annual performance evaluation of the working of the Audit and Nomination & Remuneration Committees. The directors have expressed satisifaction with the evaluation process. 25. A. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo Information relating to energy conservation and technology absorption and Foreign exchange, as required to be disclosed under Section 134(1)(m) of the Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014 for the financial year ended 31 st March, 2015 is as under: a) Energy Consumption: The major manufacturing of the company is vendored out to Mukand Ltd. Hence, there is nothing to report in this clause. b) Technology Absorption: The Company has imported a New Wire Drawing machine fitted with On-Line ECT machine from Japan. This is a state of the art technology. The Company plans to produce import substitute products (Wires) which would be used by component manufacturers for producing auto components mainly for Japanese Auto makers in India. c) Foreign Exchange: Foreign Exchange earnings for the year were Million; and the Foreign exchange outgo was Million. B. Particulars of Employees There were no employees employed throughout or part of the year whose remuneration was within the purview of the limits prescribed under the provisions of Section 197 of the Companies Act, 2013 read with Rule 5(2) and rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, Presentation of Financial Results The financial results of the Company for the financial year ended 31 st March, 2015 have been disclosed as per Schedule III to the Companies Act, Auditors A. Statutory Auditors: Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules made thereunder, the current auditors of the Company, M/s. Haribhakti & Co. LLP, Chartered Accountants (Firm Registration No.

10 9 MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) W) were appointed by the shareholders at the 2 nd Annual General Meeting to hold office until the conclusion of the 3 rd Annual General Meeting, subject to ratification by shareholders at each Annual General Meeting. The Company has received a confirmation from the said Auditors that they are not disqualified to act as the Auditors and are eligible to hold the office as Auditors of the Company. In this regard, the necessary resolution for ratification of appointment of the said Auditors is included in the Notice of 3 rd AGM for seeking approval of the members. The Statutory Audit Report does not contain any qualification, reservation or adverse remark or disclaimer made by the Statutory Auditor. B. Cost Auditors: Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to processes of Special, Alloy Steel and Stainless Steel Bars. The Board of Directors, on the recommendation of the Audit Committee, at their meeting dated 15 th July, 2014 had appointed CMA Sangita Kulkarni, Cost Accountant as the Cost Auditors of the Company for the financial year on a remuneration of. 25,000/- and reimbursement of travelling and other out of pocket expenses plus service tax as applicable. The Board of Directors, on the recommendation of the Audit Committee, at their meeting dated 28 th May, 2015 has appointed CMA Sangita Kulkarni, Cost Accountant as the Cost Auditors of the Company for the financial year on a remuneration of. 25,000/- and reimbursement of travelling and other out of pocket expenses plus service tax as applicable. Further, as per the provisions of Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration to the Cost Auditor, recommended by the Audit committee and approved by the Board, is required to the ratified by the shareholders. Accordingly a resolution seeking members approval for the remuneration payable to the Cost Auditor for the FY and FY forms part of the Notice convening 3 rd Annual General Meeting. C. Secretarial Auditor: As per the provisions of Section 204 of the Companies Act, 2013 and the rules made thereunder, the Board of Directors at their meeting held on 11 th February, 2015, had appointed, DKM & Associates, Practising Company Secretaries, (Membership No: FCS 6102), to conduct the Secretarial Audit of the Company for the Financial Year The Secretarial Audit Report

11 r -_zi. s I ilt}(and Sulif titgr$.ryo '.,SryNc LIMITED, (ClN: U273@tHt01?PLCZ34m0),for, adverse-rerniirk w'di$ctaimer made A.n*sesietinal AtrOts. i'- --, r.bn,[, revtqwido s'sdt csfitain any quatification,.teservation or 'The Seeretariat Audit Rep_ort in Form MR-3 is annexed,to ' tfr*:rcport as Annexure e.. :i.:::. Date: 2&s May, 2015 Ptace: l*tmbai, /\rtr.' u.tkarni ;\az ' \\ ( I 1i.i! 10.',

12 ANNEXURE - A Mukand Sumi Metal Processing Limited CIN: U27300MH2012PLC Form No. MGT-9 EXTRACT OF ANNUAL RETURN as on the financial year ended on 31 st March, 2015 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014] I. REGISTRATION AND OTHERS DETAILS i) CIN U27300MH2012PLC ii) Registration Date 01/08/2012 iii) Name Of The Company MUKAND SUMI METAL PROCESSING LIMITED iv) Category /Sub-Category Of The Company Company having Share Capital v) Address of the Registered office and contact details 3rd Floor, Bajaj Bhawan, Jamnalal Bajaj Marg, 226, Nariman Point, Mumbai, Maharashtra Ph: Fax: vi) Whether Listed Company (Yes/No) No vii) II. Sr. No. Name, Address and Contact details of Registrar and Transfer Agent, if any PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY Not Applicable All the business activities contributing 10 % or more of the total turnover of the company shall be started Name and Description of Main Products/ Services NIC Code Of The Product /Service % to total turnover of the Company 1 Manufacture of hot-rolled and cold-rolled products of steel % III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES Sr. No. Name and Address of the Company CIN / GLN Holding/ Subsidiary/ Associate % of shares held 1 Mukand Limited L99999MH1937PLC Holding (46) Applicable Section

13 IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as Percentage of Total Equity) i) Categary-wise Share Holding Categary of Shareholders No. of shares held of the beginning of the year (1st April, 2014) No. of shares held of the end of the year (31st March, 2015) % change during the year Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares A. Promoters 1. Indian a. Individual/HUF b. Central Govt c. State Govt d. Bodies Corp e. Bank/ FI f. Any Other Sub-Total (A)(1) Foreign - a. NRI- Individuals b. Other Individuals c. Bodies Corporate d. Banks/FI e. Any Other Sub-Total (A)(2) Total Shareholding Of Promoter (A) = (A)(1) + (A)(2) B. Public Shareholding 1. Institutions a. Mutal Funds b. Bank/ FI c. Central Govt d. State Govt(s) e. Venture Capital Funds f. Insurance Companies g. FIIs h. Foreign Venture Capital i. Others (specify) Sub-Total (B)(1) Non- Institutions a. Body Corporate i. Indian ii. Overseas b. Individuals i. Individual shareholders holding nominal share capital upto. 1 lakh ii. Individual shareholders holding nominal share capital in excess of. 1 lakh c. Others (specify) i.clearing members ii.nris iii.trusts (Employee Welfare Funds) iv.non Promoter - Non Public Employee Welfare Funds Sub-Total -B-(2) Total Public Shareholding (B) = (B)(1) + (B)(2) C. Shares held by Custodian for GD & AD Grand Total (A+B+C) ii) Shareholding of Promoters Sr. Shareholder's Name No. No. of Shares % of total shares of the Company % of shares pledged/ encumbered to total shares No. of Shares % of total shares of the Company % of shares pledged/ encumbered to total shares % Change in shareholding during the year 1 Mukand Limied Sumitomo Corporation, Japan Sumitomo Corporation Asia & Oceania Pte Ltd. 4 Sumitomo Corporation India Pvt. Ltd TOTAL Sr. No. No. of shares held of the beginning of the year (1st April, 2014) iii) Change in Promoters' Shareholding (please specify, if there is no change) Shareholding at the beginning of the year (1st April, 2014) Cumulative Shareholding during the year No. of shares held of the end of the year (31st March, 2015) No. of Shares % of total shares of the Company No. of Shares % of total shares of the Company At the begining of the year Date wise increase/ decrease in Promoters # # # # Shareholding during the year specifying the reasons for increase / decrease (e.g. Allotment / transfer/ bonus/ sweat equity etc.) At the end of the year

14 Sr. No. iv) Shareholding pattern of top ten shareholders (other than Directors, Promoters and Holders of GD and AD) Shareholding at the beginning of Shareholding at the end of the year the year (1st April, 2014) (31st March, 2015) For Each of the top 10 Shareholders No. of Shares % of total shares of the Company No. of Shares % of total shares of the Company Not Applicable Sr. No. v) Shareholding of Directors and Key Managerial Personnel Shareholding at the beginning of the year (1st April, 2014) / at the end of the year (31st March, 2015) Date increase/ decrease in shareholding Reason Cumulative Shareholding during the year For Each of the Directors & KMP No. of Shares % of total shares of the Company Directors No. of Shares % of total shares of the Company 1 Rajesh V. Shah - Chairman, Arvind M. Kulkarni* /09/ Vipul M. Mashruwala* /09/ Anna Abraham^^ N. C. Sharma** R. Sankaran^ Kenji Setogawa Shinobu Nakada# Makoto Horie Umesh V. Joshi" /09/ Key Managerial Personnel 1 Arvind M. Kulkarni* Manager /09/ S. B. Jhaveri* Chief Financial Officer /09/ K. J. Mallya* Company Secretary /09/ Note: *Mr. Arvind M. Kulkarni, Mr. Vipul M. Mashruwala, Mr. S. B. Jhaveri and Mr. K. J. Mallya hold shares as nominees of Mukand Limited **Mr. N. C. Sharma was appointed as an Independent Director by the members at the Annual General Meeting held on 15th July, 2015 #Mr. Shinobu Nakada was appointed on the Board with effect from 18th October, 2014 ^Mr. R. Sankaran was appointed as an Independent Director on the Board with effect from 11th February, 2015 ^^Ms. Anna Abraham was appointed on the Board with effect from 11th February, 2015 " Mr. Umesh V. Joshi ceased to be a Director with effect from 11th February, 2015

15 V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/ accrued but not due for payment (. in Crore) Secured Loans excluding deposits Unsecured Loans Deposits Total Indebtedness INDEBTEDNESS AT THE BEGINNING OF THE FINANCIAL YEAR i.principal Amount ii.interest due but not paid iii.interest accrued but not due Total (i+ii+iii) Changes in indebtedness during the financial year *Addition The Company has neither invited nor renewed any 6.17 *Reduction - - Deposits - Net Change INDEBTEDNESS AT THE END OF THE FINANCIAL YEAR i.principal Amount ii.interest due but not paid iii.interest accrued but not due Total (i+ii+iii) VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-Time Directors and /or Manger : The Company has paid no remuneration to Mr. Arvind M. Kulkarni, Manager of the Company Sr No B. Remuneration to other directors: Particulars Of Remuneration (in.) 1 Independent Directors Mr. Rajesh V. Shah Mr. Arvind M. Kulkarni Mr. Vipul M. Mashruwala Ms. Anna Abraham Mr. Umesh V. Joshi Mr. Kenji Setogawa Mr. Makoto Horie Mr. Shinobu Nakada Mr. N. C. Sharma Mr. R. Sankaran Fee for attending Board Meetings , , Committee Meetings , , Commission Others, please specify Independent Directors Meeting , , , TOTAL (1) , , , Other Non-Executive Directors Fee for attending Board Meetings Committee Meetings - Commission Others, please specify TOTAL (2) TOTAL (B) = (1+2) , , , Total Managerial Remuneration Overall Ceiling as per the Act Name of Directors Total Amount C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD: The Company has paid no remuneration to Mr. S. B. Jhaveri, CFO and Mr. K. J. Mallya, Company Secretary

16 VII. PENALTIES/ PUNISHMENT/ COMPOUNDING OF OFFENCES Type Section of the Companies Act A. COMPANY Penalty Punishment Compounding B. DIRECTORS Penalty Punishment Compounding C. OTHER OFFICERS IN DEFAULT Penalty Punishment Compounding Brief Description Details of Penalty/ Punishment/ Compunding fees imposed NIL NIL NIL Authority [RD/ NCLT/ Court] Appeal made, if any (give details)

17 Sr No, N.me 1 ruatono Coqror.tio! Asi. & )ceaale Fte Ltd. fscao) rc Shrehotdiagrtthe begimhg of theyeil (lst Aprll, 2Ol4)/ e! the nd of th yer (31!t MrclL!}rS) No.ofShre % of totalsheiof the Cotrrpey Drte r9 in shareholding Remn Cmuletive Shmholdinc duinc the y u (lst AFil, 2014 to 31rt M.rctL 2Ol5) No, of Shil r o/o of totel sh.g of the Compuy 40750ri, u.q LEl10/701' ( ) Salt U.ql 2 iuattodo Qrporation lidi. \,t. Ud.fscrNl 4/J75r,J, 14.! 7Elt0/zJl, Pwhry 4g75o0o 14.q fots Duin* the ya under rcrie*, SCAOim For lutrrrd Sumi Efefai :.,. For tukrnd Sumiilehl procs3sing LU lr

18 ANNEXURE B MUKAND SUMI METAL PROCESSING LIMITED (I) REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES A. INDEPENDENT DIRECTORS(IDs) IDs are to be paid i) a sitting fee of. 20,000/- for every meeting of the Board, attended by them; and ii) a sitting fee of. 10,000/- for every meeting of Committee of the Board and meeting of Independent Directors, attended by them. The Company has no stock options plans and no payment by way of bonus, pension, incentives etc. is paid to IDs. B. NON-EXECUTIVE DIRECTORS(NEDs) All NEDs being nominees of Joint Venture partners viz. Mukand Limited and Sumitomo Corporation are categorized as Non-Independent and hence no remuneration is paid to them. C. MANAGING DIRECTOR & KEY MANAGERIAL PERSONNEL & OTHER EMPLOYEES The objective of the policy is directed towards having a compensation philosophy and structure that will reward and retain talent. The Remuneration to Managing Director, if any to be paid, shall take into account the Company s overall performance, MDs contribution for the same & trends in the industry in general, in a manner which will ensure and support a high performance culture. The Company has no stock options, plans and hence such instruments do not form part of his remuneration package.

19 The Remuneration to others wilt be such as to ensure that the relatlonship of remuneration to performance is clear and meets appropriate performance benchmarks. Remuneration to Directors, Key Managerial Personnel and Senior Management will involve a balance between fixed and j-ncentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its' goals. (rr) CRTEERTA FOR DETERMTNTNG guatrfiqarrons, POSTET\IE ATTRTBUEES & IIIDEPEIIDENCE OF DIRECEOR A. QUALIFICATIONS OF INDEPENDENT DIRECTOR The Nomination & Remuneration Committee while recommending the appointment, keep in view that an lndependent director shail possess requisite ski11s, experience and knowledge in one or more fields of finance, law, management, 4oa1es, marketing, administration, research, corporate governance, operations or other disciplines related to the company's business. B. POSITIVE ATTRIBUTES OE INDEPENDENT D]RECTORS An independent director shal1 be a person of integrity, who possesses relevant expertise & experience and who shall uphold ethical standards of integrity and probity, act objectively and constructively, exercise his responsibilities in a bona-fide manner in the j-nterest of the eompany; devote sufficient time and attention to his professional obligations for informed and balanced decision making; and assist the company in implementing the best corporate governance practices. C. INDEPENPENCE OF INDEPENDENT.. DIRECTORS An the independent director Companies Act, 201"3 should meet the requirements of fur lfukand Sumi fiiehl Frocessing Ltt tsr ilukand Sumi t*ehl Frocel-sl,r; ' ';tr >lr"l\% Drcdr

20 Mukan Sumi Metal Processing Limited-2015 A. K ful stfussociates Pr acti sing Co mp any S e cr etari es, 3lstg,Navjeevan Commercial Society, Lamington Road, Near Mumbai Central, Mumbai r,,iobite, gsg 46T tbgs / gbgzlz6sg3 AN urxurr- c Form No, MR-3 STCRTTARNL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31't MARCH, 2015 [Pursuant to Section 204 (1) of the companies Act, 2013 and Rule No' 9 of the companies (Appoinanent' ana n"^inr,,tion'of Manag erial Personnel) Rules' 2014) To, The Members, Mukand Sumi Metal Processing Ltd', 2nd Floori Bajaj Bhawan, famnalal Bajaj Marg, 226, Nariman Point, Mumbai I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate piactices by "Mukana Sumi Metal Processing Limited" (hereinafter ialled "the Company"). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon' Based on my veriiication of the Company's books, papers,- minute books, forms and returns filed and other records rfiaintained by the c ompany and also the information provided by the.company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the company has, during the audit p.iiod covering the F inancial Y ear ended on 3i.rt Marci, 2015, 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: I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the Financial Year ended on 31st March, 2015 according to the provisions of: i) The companies Act, 2013 ['the Act') alrcl the rules made thereunder; ii) The securities contracts (Regulation) act, [',SCM',) and the rules made thereunder; tl

21 iii) iv) Mukan Sumi Metal Processing Limited'2l1 5 Foreign Exchange Management Act' Lg99 and the rules and regulations -made thereunder to the extent of Foreign Direct Investment, overseas Direct Investment and External Commercial Borrowings, as applicable to the Company; ' The Company being an unlisted Company' Regulations and Guidelines prescrifed under the Securities and Exchange Board of India Act, 1992 I'SEBI Act') and -Clauses with respect to Listing Agreement, are not applicable' v) TheotherapplicableAct,LawsandRegulationsasapplicable. specifically io the Company are mentioned below:- a) Factories Act, t94b; Ui tnausries (Development & Regulation) Act' 1951;.j t.bour t aws applilable in the State of Maharashtra; djactsprescribedunderpreventandcontrolofpollution; ej Acts prescribed under environmental protection; f; fr"ae Marks Act, 1999 & Copy right Act' 1957; g) Acts as prescribed under strip and Establishment Act of. various local authorities' During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above' ' I further report that: The Board of Directors of the company is duly constituted with properbalanceofnon-executivedirectorsandlndependent Directors.The.hrngu'inthecompositionojtheBoardof Directors that took pi,gu during the period under review were carried out in compliance with Lhe provisions of the Act' Adequate notice is given to all directors to schedule the Board Meetings, agenda,ni dtt'iled notes on agenda were sent at least seven days in advance, and a system -exists for seeking and obtaining further information,r,d clarifications on the agenda items before ttre meeting and for meaningful participation at the meeting. is carried through while the dissenting MajoritY decision are captured and -recorded as part of the members'. views minutes

22 Mukan Sumi Metal Processing Limited'2l I 5 Ifurtherreportt}atthereareadequatesystemsandprocesses. in the company commensurate with the size and operations- of the company t; monitor and ensure compliance with applicable laws,'ruies, regulations and guidelines' Ifurtherreportthatduringtheauditperiodthecompanyhas passed following special,uiolutions which are having bearing on the compan!,s affairs in pursuance of the above referred laws, rules, regulations, guidelines' etc' a)increaseinborrowingpowersoftheboardundersection ' 180[1)[c) of the Companies Act' 2013' r r, ^- ---L-r^-+i^Iltr tho r^rh^lp flt T.nP b) Sell, Lease or Dispose off wh_ole or substantially the whole of the undertaking under section 180[1Xa) of the companies Act, 20L3' For D. K. Meena & Associates Place: Mumbai Date: 26l.nMaY,20tS t (D.I( Meena) FCS No CP No.5976

23 INDEPENDENT AUDITOR S REPORT To the Members of Mukand Sumi Metal Processing Limited Report on the Financial Statements We have audited the accompanying financial statements of Mukand Sumi Metal Processing Limited ( the Company ), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the 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 Statements The 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 that 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 specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 and ensuring their operating effectiveness and 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. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We 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 a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. 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. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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

24 India, of the state of affairs of the Company as at March 31, 2015, its profit and its cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements (1) As required by the Companies (Auditors Report) Order, 2015 ( the Order ) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable. (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 purposes 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, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account; d. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014; f. On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act; h. With respect to the other matters to be included in the Auditor s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: (i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements Refer Note 15 to the financial statements; (ii) The Company did not have any long-term contracts including derivative contracts hence, the question of any material foreseeable losses does not arise; (iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. For Haribhakti & Co.LLP Chartered Accountants ICAI Firm Reg. No W sd/-. Sumant Sakhardande Partner Membership No Mumbai: May 28, 2015

25 ANNEXURE TO INDEPENDENT AUDITOR S REPORT [Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements in the Independent Auditor s Report of even date to the members of Mukand Sumi Metal Processing Limited on the financial statements for the year ended March 31, 2015] (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) During the year, the fixed assets of the Company have been physically verified by the management and as informed, no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. (ii) (a) The inventory (excluding stocks lying with third parties) has been physically verified 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. (b) (c) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. The Company is maintaining proper records of inventory. As informed no material discrepancies were noticed on physical verification carried out during the year. (iii) (iv) As informed, 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. Accordingly, the provisions stated in paragraph 3 (iii)(a) and 3 (iii)(b) of the Order are not applicable. In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company. (v) (vi) (vii) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Sections 73 to 76 of the Act and the rules framed there under. We have broadly reviewed the books of account maintained by the Company in respect of products where the maintenance of cost records has been specified by the Central Government under sub-section (1) of Section 148 of the Act and the rules framed there under and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. (a) The Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, however, there have been slight delay in few cases. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, were outstanding, at the

26 year end, for a period of more than six months from the date they became payable. (b) According to the information and explanation given to us, there are no dues with respect to income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, which have not been deposited on account of any dispute. (c) According to the information and explanations given to us, there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. (viii) (ix) As the Company is registered for a period of less than five years, clause (viii) of paragraph 3 of the Order is not applicable to the Company. According to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institution(s), bank(s) or debenture holder(s). (x) (xi) (xii) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. The Company has not obtained any term loans. 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 fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such instance by the management. For Haribhakti & Co. LLP Chartered Accountants ICAI Firm Regn. No W sd/-. Sumant Sakhardande Partner Membership No Mumbai: May 28, 2015