MUKAND SUMI METAL PROCESSING LIMITED

Transcription

1 MUKAND SUMI METAL PROCESSING LIMITED CIN: U27300MH2012PLC th ANNUAL REPORT Board of Directors Mr. Rajesh V. Shah -- Chairman Mr. Arvind M. Kulkarni Mr. Vipul M. Mashruwala Ms. Anna Abraham Mr. Kenji Setogawa Mr. Shinobu Nakada -- upto 16 th May, 2016 Mr. Masaki Sasamoto Mr. Kosuke Okamoto -- w.e.f. 16 th May, 2016 Mr. N. C. Sharma Mr. R. Sankaran Key Managerial Personnel Mr. Arvind M. Kulkarni - Manager Mr. S. B. Jhaveri - Chief Financial Officer upto 4 th November, 2015 Mr. Shingo Mizuho - Chief Financial Officer w.e.f. 10 th November, 2015 Mr. K. J. Mallya - Company Secretary Auditors M/s. Haribhakti & Co., LLP Chartered Accountants 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 Tel: Fax:

2 MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) Directors Report Dear Members, Your Directors take pleasure in presenting the Fourth 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 31 st March, 2016 is summarised below: Particulars 1 Rs. in Million Total Income Earnings before Interest, Depreciation & Tax Profit/(Loss) Before Taxation Profit / (Loss) After Taxation Earnings Per Share (Rs.) Review of Operations During the financial year under review, sales was Rs.5,130 Million compared to Rs.4,968 Million in the previous year, i.e., an increase of 3%. The increase in sales was lower due to reduction in selling price. In Quantitative terms, sales were 59,521 MT compared to 57,275 in the previous year, i.e. an increase of 4%. 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, for automobile companies. The Company plans to increase the sales both in terms of new products and by exploring new market segments. 4. Subsidiaries/ Associates / Joint Venture The Company does not have any subsidiaries, associates and joint ventures.

3 MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) 5. Dividend The Directors have not recommended dividend in order to conserve the resource for capital expenditure in coming years. 6. Finance During the year under review, the company has availed fund based and nonfund based limits, is Rs Million. 7. Transfer to Reserves No amount has been transferred to Reserves during the year under review. 8. 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. 9. Share Capital The paid up Equity Share Capital of the Company was Rs. 273 Million as on 31 st March 2016 which is same as in the previous year as on 31 st March 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. 11. 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. 12. 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: 2

4 MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) 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, 2016 and of the profit of the Company for the said period; 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. 14. 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. 15. Board of Directors & Key Managerial Personnel A. Board of Directors: 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 non-executive 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. Masaki Sasamoto Non Executive 7 Mr. Shinobu Nakada Non Executive 8 Mr. N. C. Sharma Non Executive & Independent 9 Mr. R. Sankaran Non Executive & Independent 3

5 MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) Mr. A M Kulkarni, Executive Director and Mr. Kenji Setogawa, 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: During the year under review:- i. Mr. S. B. Jhaveri ceased to be Chief Financial Officer (CFO) w.e.f. 4 th November, ii. Mr. Shingo Mizuho was appointed as the Chief Financial Officer (CFO) with effect from 10 th November, 2015 as per the provisions of Section 203 of the Companies Act, Mr. Arvind M. Kulkarni, Manager and Mr. K. J. Mallya, Company Secretary of the Company are employees of Mukand Limited, the holding company and are deputed as Key Managerial Personnel of the Company and no remuneration is drawn by them separately from the Company. None of the Directors draws any remuneration from the Company, except that Independent Directors are paid sitting fees of Rs. 20,000/- per Board Meeting and Rs. 10,000/- per Committee meeting and meeting of Independent Directors attended by them. 16. 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. 17. Board Meetings The Board of Directors met 4 times during the financial year ended 31 st March, 2016 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 12 th February, No other Directors or Key Managerial participated in the said meeting. 18. Committees of Board A. Audit Committee: Pursuant to the Section 177 of the Companies Act, 2013, the Board has constituted an Audit Committee of the Board comprising the following Members: 4

6 i. Mr. R. Sankaran - Chairman ii. Mr. N. C. Sharma - Member iii. Mr. Kenji Setogawa - Member B. Nomination and Remuneration Committee: MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) Pursuant to the Section 178 of the Companies Act, 2013, the Board has constituted a Nomination and Remuneration Committee of the Board comprising 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 19. Corporate Social Responsibility Pursuant to the provisions of Section 135 of the Companies Act, 2013 every company having net profit of Rs. 5 crore or more during any financial year is required to constitute Corporate Social Responsibility(CSR) Committee of the Board consisting of 3 or more directors out of which at least one director shall be an independent director. Since the net profit before tax of the Company for the year under review is more than Rs. 5 crore, steps will be taken for constitution of CSR Committee and for compliance of other related provisions of the Act applicable to the Company. 20. 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. 21. 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 has periodically assessed by the Audit Committee and the Board of Directors. 22. 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 5

7 6 MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) committee. The Internal Auditor prepares regular reports on the review of the systems and procedures and monitors the actions to be taken. 23. 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 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 satisfaction with the evaluation process. 24. 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(3)(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, 2016 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 capitalized & commissioned a New Wire Drawing machine fitted with On-Line ECT machine from Japan. This is a state of the art technology. The Company has started production of import substitute products (Wires) which would be used by component manufacturers for producing auto components. c) Foreign Exchange: Foreign Exchange earnings for the year were Rs Million (Rs Million for FY 15); and the Foreign exchange outgo was Rs Million (Rs Million for FY 15). B. Particulars of Employees There were no employees employed throughout or part of the year whose remuneration was within the purview of the limits/criteria 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, 2014.

8 MUKAND SUMI METAL PROCESSING LIMITED (CIN: U27300MH2012PLC234000) 25. Presentation of Financial Results The financial results of the Company for the financial year ended 31 st March, 2016 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 W) were appointed by the shareholders at the 3 rd Annual General Meeting (AGM) to hold office until the conclusion of the 4 th 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 reappointment of the said Auditors is included in the Notice of 4 th 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 held on 16 th May, 2016 has appointed CMA Sangita Kulkarni, Cost Accountant as the Cost Auditors of the Company for the financial year on a remuneration of Rs. 30,000/- 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 be ratified by the shareholders. In this regard, the necessary resolution for ratification of remuneration to the Cost Auditor is included in the Notice of 4 th AGM for seeking approval of the members. 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 7 th August, 2015, had appointed, DKM & Associates, Practicing Company Secretaries, (Membership No: FCS 6102), to conduct the Secretarial Audit of 7

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10 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, 2016 [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. 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 Sr. No. Name and Description of Main Products/ Services NIC Code Of The Product /Service % to total turnover of the Company 1 Manufacture of Alloy & Stainless Steel Bright Bars & Wires % 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

11 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, 2015) No. of shares held of the end of the year (31st March, 2016) % 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 Rs. 1 lakh ii. Individual shareholders holding nominal share capital in excess of Rs. 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 GDRs & ADRs 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 1 Mukand Limied along with its Nominees Sumitomo Corporation, Japan Sumitomo Corporation India Pvt. Ltd TOTAL Sr. No. No. of shares held of the beginning of the year (1st April, 2015) iii) Change in Promoters' Shareholding (please specify, if there is no change) Shareholding at the beginning of the year (1st April, 2015) / at the end of the year (31st March, 2016) Cumulative Shareholding during the year No. of shares held of the end of the year (31st March, 2016) % Change in shareholding during the year 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.) NIL NIL NIL NIL At the end of the year

12 Sr. No. iv) Shareholding pattern of top ten shareholders (other than Directors, Promoters and Holders of GDRs and ADRs) Shareholding at the beginning of Shareholding at the end of the year the year (1st April, 2015) (31st March, 2016) 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, 2015) / at the end of the year (31st March, 2016) 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 Key Managerial Personnel 1 Arvind M. Kulkarni* Manager 2 S. B. Jhaveri** Chief Financial Officer /09/ /09/ Shingo Mizuho^ Chief Financial Officer 3 K. J. Mallya* Company Secretary /09/ /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. S. B. Jhaveri ceased to be Chief Financial Officer with effect from 4th November, 2015 ^Mr. Shingo Mizuho was appointed as Chief Financial Officer with effect from 10th November, 2015

13 V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/ accrued but not due for payment (Rs. 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 The Company has neither invited nor *Addition renewed any *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 Rs.) Mr. Rajesh V. Shah Mr. Arvind M. Kulkarni Mr. Vipul M. Mashruwala Ms. Anna Abraham Name of Directors Mr. Kenji Setogawa Mr. Makoto Horie Mr. Shinobu Nakada Mr. N. C. Sharma Mr. R. Sankaran Total Amount 1 Independent Directors Fee for attending Board Meetings , , ,60, Committee Meetings , , ,40, Commission Others, please specify Independent Directors Meeting , , , TOTAL (1) ,60, ,60, ,20, Other Non-Executive Directors Fee for attending Board Meetings Committee Meetings - Commission Others, please specify TOTAL (2) TOTAL (B) = (1+2) ,60, ,60, ,20, Total Managerial Remuneration Overall Ceiling as per the Act 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 Sr No Particulars Of Remuneration (in Rs.) Gross Salary (a) Salary as per provisions contained in section 17(1) of the Income tax Act, 1961 (b)value of perquisites u/s.17(2) of Income tax Act, 1961 (c) Profits in liue of salary under section 17(3) Income tax Act, 1961 Stock Option Sweat Equity Commission - as % of profit - other, specify Others, please specify TOTAL Key Managerial Personnel Mr. Shingo Mizuho**, CFO 7,79,333 1,62, ,41,900 *Mr. S. B. Jhaveri ceased to be Chief Financial Officer with effect from 4th November, 2015 **Mr. Shingo Mizuho was appointed as Chief Financial Officer with effect from 10th November, 2015

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15 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 Rs. 20,000/- for every meeting of the Board, attended by them; and ii) a sitting fee of Rs. 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. The Remuneration to others will be such as to ensure that the relationship of remuneration to performance is clear and meets appropriate performance benchmarks.

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