petron engineering construction ltd Directors report

To

The Members,

Petron Engineering Construction Limited,

1. INITIATION OF CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP)

The Honble National Company Law Tribunal (‘NCLT), Mumbai Bench, on 23rd March, 2018, admitted the application made by M/s. Kohinoor Crane Service and M/s. Industrial Gas Distributors, the Operational Creditors under Section 9 of the Insolvency and Bankruptcy Code, 2016 ("Code") and pronounced the commencement of the Corporate Insolvency Resolution Process (‘CIRP) of PETRON ENGINEERING CONSTRUCTION LIMITED and appointment of Mr. Rajeev Mannadiar as the Interim Resolution Professional (‘IRP) vide its order dated 23rd March,2018 in CP No. 1374/IBC/NCLT/MB/MAH/2017 & CP No. 1526/IBC/NCLT/ MB/MAH/2017.

On admission, the provisions of Moratorium as prescribed under Section 14 of the Code became operative with effect from the date of the Order. Section 14 of the Code prohibits institution of any suits before a Court of encumbering any of the assets of the Debtor etc. However, the supply of essential goods or services to the "Corporate Debtor" shall not be terminated during Moratorium period. The Moratorium period will be effective till the completion the Insolvency Resolution Process or until the approval of the Resolution Plan prescribed under section 31 of the Code. At the first meeting of Committee of Creditors (‘CoC) of Petron, the members resolved to appoint Mr. Udayraj Patwardhan as the Resolution Professional (‘RP). Subsequently, he was appointed as the RP pursuant to the Order of the Honble NCLT, Mumbai dated 6th August, 2018.

As per Section 17 read with Section 23 of the Code, from the date of appointment of the Interim Resolution Professional/ Resolution Professional-

(a) The management of the affairs of the company shall vest in the Interim Resolution Professional.

(b) The powers of the Board of Directors of the Company shall stand suspended and be exercised by the Interim Resolution Professional / Resolution Professional.

(c) The officers and managers of the Company shall report to the Resolution Professional and provide access to such documents and records of the Company as may be required by the Interim Resolution Professional / Resolution

Professional.

(d) The financial institutions maintaining accounts of the Corporate Debtor shall act on the instructions of the Interim Resolution Professional in relation to such accounts and furnish all information relating to the Corporate Debtor available with them to the Interim Resolution Professional / Resolution Professional.

The Committee of Creditors (CoC) at its meeting February, 2019 have heldon14 resolved that the Company may be liquidated under liquidation as a "Going Concern". In this regard the Resolution Professional has filed necessary application with the Honble NCLT, Mumbai Bench. The matter is pending before the Honble NCLT, Mumbai Bench.

1. FINANCIAL HIGHLIGHTS

For the year ended March 31, 2019
		(Rupees in Lacs)
Particulars	2018-19	2017-18
Income from Operations	13,363	23,586
Other Income	148	726
Total Income	13,511	24,312
Profit/(Loss) before Interest, Depreciation and Taxes	517	(21,283)
Finance Cost	1308	2,304
Profit/(Loss) before Depreciation and Taxes	(791)	(23,587)
Depreciation	724	777
Profit/(Loss) before Tax	(1515)	(24,364)
Tax Expenses (Including Taxes of Earlier Years)	73	(7,050)
Profit /(Loss) for the year	(1588)	(17,314)

2. DIVIDEND

Your Company has been incurring losses due to which the Company expresses its inability to recommend any dividend for the F Y 2018-19.

However, the register of members and share transfer books shall remain closed from Saturday, 21st September, 2019 to Friday, 27th September, 2019 (both days inclusive).

3. OVERVIEW OF COMPANYS PERFORMANCE

During the financial year, the Company earned revenue from operations of Rs. 13,363 Lacs as against Rs. 23,586 Lacs in the previous year. Other income stood at Rs. 148 Lacs as against Rs. 726 Lacs in the previous year. The loss before tax stood at Rs. 1515 Lacs as compared to Rs. 24,364 Lacs in the previous year. The Company has suffered a net loss of Rs. 1588 Lacs during the financial year 2018-19 primarily due to lower execution of projects and due to external constraints.

4. PUBLIC DEPOSITS

During the year under review, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).

5. CHANGE IN NATURE OF BUSINESS

During the financial year 2018-19, Company has not changed its nature of business and has been continuingwith the same line of business.

6. SHARE CAPITAL

The Paid-up Share Capital as on March 31, 2019 was Rs. 753.84 Lacs. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company.

7. RESERVES

In view of the losses, Company has not transferred any amount to the reserves.

8. HOLDING COMPANY/ SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

There are no Subsidiary & Associate Companies within the meaning of Companies Act, 2013. The Company has not entered into any Joint Ventures during the year under review.

As at the end of financial year March 31, 2019, the Company has below mentioned Holding companies:

Holding Company	KSS Petron Pvt. Ltd.
Ultimate Holding Company	KazStroyService Global BV

9. DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors:

During the year under review, there were no Directors on the Board of the Company as on 31st March, 2019.

Key Managerial Personnel :

During the year under review, there were no Key Managerial Personnel in the Company w.e.f. June 2, 2019.

10. MEETINGS

Five meetings duly conducted by the Resolution Professional. The meetings were held on May 30, 2018, August 14, 2018, November 13, 2018, December 01, 2018 and February 14, 2019 during the year under review.

11. BOARD COMMITTEES

All the Directors of the Company resigned from the Board in the month of February, 2018. Post resignation of all the Directors, the Corporate Insolvency Resolution Process commenced vide Order dated23 rd March, 2018 received from the Honble NCLT, Mumbai Bench and thereafter no meeting of the Board Committees were held.

12. BOARD EVALUATION

As there were no Directors on the Board of the Company and in view of the CIRP, no evaluation of the Board were carried out during the FY 2018-19.

13. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act,2013, the Company hereby state that :

a) In preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) such accounting policies as mentioned in Notes to Financial Statements have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2019 and of the profit/loss of the company for the year ended on that date;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Annual Financial Statements have been prepared on a "going concern" basis;

e) proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f) systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

14. CORPORTE GOVERNANCE

Detailed report on Corporate Governance as stipulatedunder Clause E of Schedule V of the SEBI (LODR) Regulations, 2015 is provided under separate Section and forms part of this Report.

The requisite certificate from Practicing Company Secretaries, confirming under SEBI (LODR) Regulations, 2015 is attached to the Report on Corporate Governance.

The details of remuneration paid to Key Managerial Personnel as per criterias mentioned herein below are given under Annexure I (‘Particulars of Employees) :

i. all elements of remuneration payable such as salary, perquisites, employers contribution to P.F., pension scheme, bonus, stock options, etc.;

ii. details of fixed component and performance linked incentives.

The detailed policy of the Company on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of Directors and other matters is annexedas‘Annexure II.

15. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As stipulated under SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 the Discussion and Analysis is annexed to the Annual Report.

16. PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, disclosures pertaining to remuneration and other details are provided in MGT-9 annexed to this report.

The Information required as per Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure-I forming part of the Report. In terms of the first proviso to Section 136 of the Act, the Report and Accounts are being sent to the Shareholders. Any Shareholder interested in obtaining the same may write to the Resolution Professional at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

There are no employees drawing remuneration exceeding Rupees One Crore and Two Lakhs per annum if employed or rupees Eight Lakhs and Fifty through out the financial Thousand per month if employed for part of the financial year or draws remuneration in excess of Managing Director or Whole time Director or Manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company

17. NOMINATION AND REMUNERATION POLICY

In terms of section 178(3) of the Companies Act, 2013 and Part D of Schedule II Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has framed Nomination and Remuneration Policy. The said policy of the Company on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of Directors and other matters is annexedas ‘Annexure II.

18. AUDITORS AND AUDITORS REPORT STATUTORY AUDITORS

M/s. Lodha & Co., Chartered Accountants, (Registration No. 301051E), New Delhi were appointed as Independent (Statutory) Auditors of the Company at the 39th Annual General Meeting for a period of five years. They have been appointed as Independent Auditors from the conclusion of the 39th Annual General Meeting till the conclusion of the 44 th Annual General Meeting.

In accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting. The appointment of M/s. Lodha & Co., as the Statutory Auditor of the Company shall continue for the Financial . Year 2019-20

SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act, 2013 and Rules thereunder, the Secretarial Audit for the financial year 2018-19 was conducted by M/s. RJM & Associates, Company Secretaries and the Secretarial Audit Report for the Financial Year ended March 31, 2019 is annexed herewith marked as "Annexure III" to this Report.

19. AUDITORS REPORT

The Auditors, M/s. Lodha & Co., Chartered Accountants, New Delhi, in their Report, have drawn attention to Note No. 33, 34(b), 34(d),35, 36, 37, 39, 40, 41, 42, 43, 44, 46(a) and 48 on the following matter:

Auditors Qualification No. 1

Quote:

a) In respect of certain suspended / delayed contracts, as of 31st March 2019, trade receivable of Rs. 246 lakhs (net of mobilization advance and provisions of Rs. 11 lakhs) (trade receivable of Rs. 246 lakhs as of 31st December 2018 and Rs. 331 lakhs as of 31st March 2018 respectively, net of mobilization advance and provisions of Rs. 11 lakhs and Rs. 3 lakhs respectively as at 31st December 2018 and 31st March 2018) are doubtful of recovery and pending for confirmation/ negotiation. We are unable to comment about the status of amount receivables / payables on the reported profit for the quarter and loss for the year ended 31st March, 2019 and its corresponding impact on assets / liabilities as at that date.

Unquote

The Companys response with regard to above qualifications is as under:

Quote:

The Company is making various efforts to recover the outstanding Trade receivable and is hopeful of recovery. The reconciliation of accounts and negotiations are in progress.

Unquote

Auditors Qualification No. 2

Quote: b) Various claims submitted by the financial creditors {including claims filed by ArcelorMittal India Private Limited (AMIPL) as stated in note no. 6(b)}, operational creditors, other creditors and employees of the Company to the Resolution Professional(RP) pursuant to the Insolvency and Bankruptcy Code, 2016 are currently under reconciliation. Pending reconciliation by the Company, we are unable to comment on the consequential impact, if any, on the reported profit for the quarter and loss for the year ended 31stMarch 2019 and its corresponding impact over state of affairs as on that date.

Unquote

The Companys response with regard to above qualification is as under:

Quote:

The Company is in the process of reconciling the accounts with the parties concerned. Accounting effect, if any, to the same would be made after completing the final reconciliation with the said creditors. The claims accepted by Resolution Professional may not directly have an effect on the balances reflected in the books of accounts.

Unquote

Auditors Qualification No. 3

Quote: c) Balances of certain trade receivable (including from related parties), unbilled revenue, trade payables (including MSME and interest payable thereon), secured loans (including Banks and NBFC), bank guarantees and unsecured loans (including from related parties), bank balances, current liabilities, other liabilities (including statutory dues and returns thereof) and loan & advances (read with para (b) above) are subject to confirmation/reconciliation, where we are unable to comment on the same and its corresponding impact over reported profit for the for the year ended 31st March 2019 and related components of financial statements as on date

Unquote

The Companys response with regard to above qualification is as under:

Quote:

Because of the CIRP many of the creditors have referred their claims as on the Insolvency commencement date, i.e.23rd March, 2018 which can be construed as balance confirmations. Wherever there is a difference between the books and the creditors claim, reconciliation work is under way. As far as the receivable is concerned the balances concerned . reflects mostly the certified invoices by the client concerned.

Unquote

Auditors Qualification No. 4

Quote:

d) No provision against overdue Trade Receivables outstanding for more than six months amounting to Rs. 9,606 lakhs (net of mobilisation advances of Rs. 301 lakhs and excluding of unbilled revenue of Rs. 1,486 lakhs and excluding performance guarantee encashed by certain parties) (Rs. 8,995 lakhs as of 31st December 2018) (net of mobilisation advances of Rs. 232 lakhs and excluding of unbilled revenue of Rs. 1,864 lakhs and excluding performance guarantee encashed by certain parties) have been made, which are doubtful for recovery considering non confirmation of outstanding balances, short closure of running projects, encashment of performance bank guarantee and demand raised for counter claim /liquidated damages by the parties (customers).

Unquote

The Companys response with regard to above qualification is as under:

Quote: of We are following up with all the parties balances.

Unquote

Auditors Qualification No. 5

Quote:

e) Liability /provision against performance guarantee encashed by certain parties amounting to during the quarter Rs. Nil (Rs. 3,635 lakhs till nine months period ended 31st December 2018) has not been provided for in the books, where the management is confident about settlement in its favour.

Unquote

The Companys response with regard to above qualification is as under:

Quote:

We are in process of initiating arbitration procedure / process in the matter of Bank guarantees hopeful of positive outcome in favour of the Company.

Unquote

Auditors Qualification No. 6

Quote:

f) Certain expenses {including finance costs (refer note no.10 of financial results)}/ liabilities/employee benefit expenses have been accounted for as approved by the management based on vouchers and for which contracts, supporting records and agreements could not be made available to the auditors for verification as the same are under process of compilation/updation. As per the management, expenses were incurred for business purposes only. Further, in respect of certain contract sites, the Company is in process of compiling / updating the records with respect to employees/labour, where we are unable to comment on the same and its corresponding impact over reported profit for the quarter and loss for the year ended 31st March 2019 and related components of financial statements as on date.

Unquote

The Companys response with regard to above qualification is as under:

Quote: and Head Offices have left their services of Inview of the liquidity constraints, many of the staffs at sites Offices company. This has resulted in delay in compiling information. However, the Company is in the process of taking steps for completing the reconciliation and compiling the records.

Unquote

Auditors Qualification No. 7

Quote:

g) Regarding non provision against carry over Deferred tax assets as on 31st March 2019 of Rs. 5,991 lacs for the reasons stated in the said note that sufficient future taxable income will be available deferred tax asset (net) can be realized and our inability to comment thereon.

Unquote

The Companys response with regard to above qualification is as under:

Quote:

The CoC has recommended liquidation as a going concern. In case of any applicant being successful, the Company will change hands accordingly. Thus, it is expected that the Company would be in a position to avail set-off of tax losses against expected taxable profit in the future years as per the provisions of Income Tax Act 1961.

Unquote

Auditors Qualification No.8

Quote:

h) Regarding delays in payment of certain statutory dues and non- submission /delay in filing of certain statutory returns (including PF, ESIC, TDS, GST etc.), statutory dues written off and pending reconciliation between books and returns filed, where we are unable to comment on the impact of the same on profit for the quarter and loss for the year ended 31st March 2019 and state of affairs.

Unquote

The Companys response with regard to above qualification is as under:

Quote:

There may be slight delay due to cash flow problem.

Unquote

Auditors Qualification No. 9

Quote:

i) Regarding all the directors (including Woman Director) and Company Secretary resigned by 31st March 2018. Further CFO also resigned during the year. Consequently, all committees of Directors (including Nomination and Remuneration Committee, Audit Committee etc.) were not present during the year in compliance to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended). Regarding non-availability of secretarial forms (including application for extension of Annual General Meeting) and compliances thereof and our inability to comment on related party transactions, compliances related to appointment /resignationofDirectors, compliances w.r.t. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended), Corporate Governance , submission of annual return with the appropriate authorities and other related regulations and our inability to comment thereon.

Unquote

The Companys response with regard to above qualification is as under:

Quote:

As all the directors have resigned and new directors can be appointed only by the shareholders at an AGM/EGM. At present there is no Company Secretary hence required documents could not be prepared and submitted. As all the directors have resigned, hence the Company couldnt file the e-forms with the Registrar of Companies w.r.t. resignation of Directors, Company Secretary, Chief Executive Officer and CFO. However, we are in process of updating required registers /forms which shall be submitted in due course. Subsequently the RP has informed the Holding Company M/s KSS Petron Private Limited for compliance of provisions of Section 168(3) of the Companies Act, 2013.

Unquote

Auditors Qualification No. 10

Quote:

j) Regarding pending adjustment of impact of physical verification of property, plant and equipment (PPE) in the financial books and reconciliation of the same with the books& records with respect to certain sites, where we are unable to comment on the same. In view of the management impact of final adjustment shall not be material over result for the quarter and year ended 31st March 2019.

Unquote

The Companys response with regard to above qualification is as under:

Quote:

The PMD team at respective sites have carried out the verification process. No discrepancy has been found by the said team. Physical verification w.r.t. closed sites is in process.

Unquote

Auditors Qualification No. 11

Quote: k) Certain pending/ delayed projects estimated costs to completion are based upon management estimates and where the management is confident that there will not be any material impact on completion of work in future.

Unquote

The Companys response with regard to above qualification is as under:

Quote:

Most of the project are on the verge of completion and adequate margins are available to absorb any contingency. In view of this, management do not expect any material variation cost of completion.

Unquote

Auditors Qualification No. 12

Quote: l) Regarding the matter stated in para (a) to (k) above and otherwise internal controls needs to be further strengthened to be commensurate with the size of the company and nature of its business.

Unquote

The Companys response with regard to above qualification is as under:

Quote:

The Company has an internal control system in existence and is in the process of further strengthening the same.

Unquote

Auditors Qualification No. 13

Quote:

m) Regarding preparation of the financial statements on ‘going concern basis notwithstanding Company is having negative net worth, continuous losses, lower level of operations effecting concern, short closure in certain projects, current liabilities are in excess of current assets and default in repayment of loan installments and payment of due interest, both on term loans and working capital. These conditions indicate the existence of material uncertainty that may cast significant doubt about the Companys ability to continue as a going concern. As company is under corporate insolvency resolution process (CIR process) (as stated in Note no. 1 of the accompanying statement of audited financial results). The Committee of Creditors (CoC) at its meeting have resolved that the Company may be liquidated under liquidation as a "Going Concern". In this regard the Resolution Professional has filed necessary application with the NCLT Court, Mumbai and final decision is pending before the NCLT. The management and the RP have continued its practice to prepare financial statements on going concern basis.

Unquote

The Companys response with regard to above qualification is as under:

Quote:

Net worth is not a singular measure of deciding as a ‘going concern. The Company has a good brand name in the industry and during its last 40 years has already established its position as a reliable EPC contractor. Considering the same, it is expected that it will, in due course of time, be in a position to receive a viable Resolution Plan for the approval of CoC and NCLT. Currently the Company is executing few contracts which are able to run on its own by using the cash inflows from these projects. In view of the above, the Company has prepared its accounts on a going concern basis. The CoC has recommended liquidation as going concern. In appropriate treatment will be given in the books of account.

Unquote

20. RISKS & CHALLENGES

Construction Companies are facing challenges due to adverse market conditions, increased inflation, increase, fluctuating supply of feed-stocks, cost overruns due to the delay in Government approvals, land acquisition etc. Clients and consultants are also adopting the ‘Wait and Watch situation and have become averse to take risky decisions due to the dynamic environment.

The Company manages / monitors the principal risks and uncertainties that can impact its ability to achieve its objectives. The Companys management systems organizational structures, code of conduct governs the business of the Company and takes view of risks and put efforts to achieve risk mitigation through Internal Control Systems.

Further, the Company was under CIRP and the CoC at its meeting held on 14th February, 2019 resolved to liquidate the Company as a "Going Concern" and hence the Company has to face various risks and challenges with regard to availing of working capital facilities (NFB) and also bagging new projects.

21. INTERNAL FINANCIAL CONTROL

As per explanation to Section 134 of the Companies Act, 2013, the Internal Financial Controls (IFC) are reviewed by your management and key areas are subject to statutory audits. The review of the IFC, inter alia, consists of the optimum utilization and safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and adherence to applicable accounting standards, and the timely preparation with applicable of reliable financial laws, regulations and management policies; and an effective management information system.

22. INTERNAL CONTROL SYSTEMS AND ADEQUACY

The Company has appropriate internal control system for business processes with regards to its operations, financial reporting and compliance with applicable laws and regulations. There are defined and documented procedures, policies and authority guidelines for each function in the Company.

23. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

Details of loan, investments and guarantees given are provided in the notes accompanying the financial statements.

24. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF COMPANIES ACT, 2013

During the year under review there were related party transactions, however the Company has adopted a Policy to approve the Related Party Transactions and dealings with the Related Parties.

None of the transactions with Related Parties fall under the scope of 188(1) of the Act. The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form AOC 2, appended as "Annexure IV".

25. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF FINANCIAL YEAR AND DATE OF REPORT

During the period from the end of the Financial Year till date of the report following material changes took place:

Mr. Himanshu Mohapatra has resigned from the post of Chief Financial Officer w.e.f June 02, 2018;

Initiation of Corporate Insolvency Resolution Process of the Company vide Order of the Honble National Company Law Tribunal (NCLT), Mumbai Bench dated 23rd March, 2018 ;

26. EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in Form MGT-9 is appended as "Annexure V" to the Directors report.

27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

(A) Conservation of Energy

i) Steps taken for energy conservation, inter alia, include the following:

• Office Air conditioning comfort temperature optimization

• Electricity Consumption reduction by daily monitoring and control

• Operational control of HVAC system (air conditioning) in winding premises

• Compressed air pressure reduction in non-use time

• Closing of unwanted opening from air conditioned premises reducing cooling loss

Access control on air conditioning. Installation of remote control switch in office optimizing operating temperature

Put in system to switch off the HVAC, AC, Lights, Fans when not required

ii) Steps taken by the Company for utilizing alternate sources of energy:

Open the blinds/curtains in offices to use natural lights

iii) Capital investment on energy conservation equipments: NIL

(B) Technology Absorption: Not Applicable

Expenditure incurred on Research and Development: NIL

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars with regard to foreign exchange earnings and outgo are given below:

Total Foreign Exchange used and earned:

i) Value of Imports on CIF basis	: Nil
ii) Expenditure in Foreign Currency	: Nil
iii) Foreign Exchange earned	: Nil

28. MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT INCLUDING NUMBER OF PERSONS EMPLOYED

Though the Company is passing through a challenging period due to financial constraints including cash-flow problems, your Companys relation with its staff / workers year . has remained cordial during the The Company is having 172 employees as on 31st March, 2019.

29. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

The Company has formulated CSR Policy. The same may be accessed on the Companys website. The contents of the policy along with the annexure specified in Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014 is annexed herewith as ‘Annexure VI.

30. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy, to provide a formal Vigil Mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct or ethics policy. The policy provides for adequate safeguards against victimization of employees who avail of the mechanism. The Whistle Blower Policy may be accessed on the Companys website www.petronengineering.com.

31. POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE

The Company has zero tolerance for Sexual Harassment at workplace and has adopted a policy on Prevention, Prohibition and Redressal of Sexual Harassment at work place, in line with the provisions of Sexual Harassment of Women at work place (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and or matters connected or incidental thereto with the objective of providing a safe working environment, where women employees can feel secure. The Company has constituted a Committee which has got the powers to enquire into the complaints of sexual harassment and recommend appropriate action.

The Company has not received any complaint of sexual harassment during the Financial Year 2018-19.

32. GENERAL INFORMATION

Your Company is continuing to execute the contracts related to fabrication, installation of Plant, Machinery and Equipments for cement, refinery, petrochemicals, power, fertilizer plants etc. It is also continuing to execute Turnkey / Composite Construction Projects.

Over a period of time, your Company has developed the capabilities of executing vertical construction contracts across all sectors, which will be preferred mode of execution of future contracts and multiple project execution simultaneously.

33. TRANSFER OF UNPAID DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of the provisions of Section 124 of the Companies Act, 2013, dividends remaining unpaid/ unclaimed for a period of seven years have to be statutorily transferred to the Investor Education and Protection Fund (IEPF) Central Government. To ensure maximum disbursement of unclaimed dividend, the Company regularly sends reminder to the relevant investors.

Unclaimed Dividend in respect of the financial year 2011-12 will be due for transfer to IEPF on September 7, 2019 in terms of Section 124 of the Companies Act, 2013. Members who have not encashed their Dividends for the Financial Year ended 31st March, 2012 or any subsequent year(s) are requested to lodge their claims with the Company immediately.

34. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

The Company has received order vide C.P. No. 1374/IBC/NCLT/MB/MAH/2017 dated March 23, 2018 with respect to commencement of Corporate Insolvency Resolution Process and CA Rajeev Mannadiar having Registration No. IBBI/IPA- 001/IP-P00212/2018-19/10412 was appointed as Interim Resolution Professional to conduct the Corporate Insolvency Resolution Process. meeting of Committee of Creditors (‘CoC) of the Company, the members of the CoC resolved to appoint Mr.At the first Udayraj Patwardhan as the Resolution Professional (‘RP). Order of the Honble NCLT, Mumbai dated 6th August, 2018 in M.A. No. 500 of 2018.

Process of the Company for a further period of 90 days was An order for extension of the Corporate In solvency Resolution passed on 3rd October, 2018, in MA 1030/2018 in C.P.(IB)-1732/9/(MB)/2017.

Further, at the meeting held on 14th February, 2019, the CoC has resolved to liquidate the Company as a "Going Concern" and accordingly the Resolution Professional has filed necessary application with the Honble NCLT, Mumbai Bench. The said application is pending for hearing.

35. ACKNOWLEDGEMENTS

Your Company would like to express its sincere appreciation for the assistance and co-operation received from the bankers, clients, dealers, vendors, Committee of Creditors and members for their support and confidence placed in the Company. The Company also wishes to place on record its deep sense of appreciation for committed services by the companys executives, staff and workers at all levels for their unstinted efforts as well as their collective contribution to the Companys performance.

The Company would also like to offer its sincere thanks to the shareholders, bankers, customers, dealers, suppliers and all other business associates for their unstinted support during this Corporate Insolvency Resolution Process period and continued confidence in the Company.

For Petron Engineering Construction Limited

Resolution Professional

Date : August 13, 2019

Place: Mumbai

Form No. MR-3