DIRECTOR'S REPORT

TO

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

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. Operations

4.1. General -

The income from operations and other income during the year was at Rs. 112 Crores as compared to Rs. 141 Crores in the previous year.

4.2 Engineering -

4.2.1 The income from Engineering operation during the year was Rs. 106 Crores as against Rs. 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 Rs. 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 Rs. 5.40 Crores as compared to Rs. 5.04 Crores in the previous year

. Fixed Deposits

The Company held Rs. 14.51 Crores as Public Deposits as of March 31, 2016 out of which deposits aggregating to Rs. 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.

Extract of Annual Return

An extract of the Annual Return as provided under sub­Section (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

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 Information

12.1 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 2015­16 and percentage increase in remuneration over last Financial Year

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 Rs. 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 Personnel 14(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

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 up to 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

Place : Mumbai,

date : May 20, 2016.