mukand ltd share price Directors report

Annexure -6

Annexure to the

FORM NO. AOC-2

[Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014]

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in subsection (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto.

1. Details of contracts or arrangements or transactions not at arms length basis:

The Company has not entered into any contract or arrangements or transactions with its related parties which is not at arms length during the financial year 2022-23

2. Details of contracts or arrangements or transactions at arms length basis:

(a)	Name of related party and nature of relationship	Mukand Sumi Metal Processing Limited, wholly owned subsidiary company	Mukand Sumi Special Steel Limited, promoter group company
(b)	Natureofcontracts/arrangements / transactions	Sales of goods and rendering of services, purchase of goods and receiving services	Sales of goods and rendering of services, purchase of goods and receiving services
(c)	Duration of the contracts/ arrangements / transactions	On quarterly basis	On quarterly basis
(d)	Salient terms of the contracts or arrangements or transactions including the value, if any	Arms length basis and credit period of 7 days. Transactions value for FY 2022- 23 was Rs.712.88 crore	Arms length basis and credit period of 7 days. Transactions value for FY 2022-23 was Rs.2,651.66 crore
(e)	Date(s) of approval by the Board	In the first quarter meeting of the Board	In the first quarter meeting of the Board
(f)	Amount paid as advances, if any	--	--

On behalf of the Board of Directors,

Niraj Bajaj

Chairman & Managing Director DIN: 00028261

Mumbai, May 16, 2023

Annexure -7

Annexure to the Directors Report

Disclosure of particulars with respect to Conversion of Energy, Technology, Absorption and Foreign Exchange Earnings and outgo as required under Companies Act, 2013.

A. Conservation of Energy i) Energy Conservations Measures taken. Steel Plant:

(a) For reduction in consumption of Electrical Energy:

• Installation of Energy Efficient Pumps in Pump House.

• Program modification done for switching OFF Cooling Bed Roller Table when there is no rolling for more than 10 minutes in Wire Rod Mill.

• Upgradation of Electrode Regulation System in Ladle Refining Furnace.

• Automatic Power Factor Controller (2.5 MVAR) implemented.

• Installation of Screw Compressor in place of Reciprocating Compressor done.

• Various steps are taken to increase the productivity of SMS.

(b) Fuel:

Steps taken to reduce Fuel Consumption:

• Fine tuning of 5T SAF done from External Expert.

• Furnace Temperature control done in Mills during Delays.

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

Increase in use of:

- Wind energy

- Solar energy

- Higher pulverized coal injection in mini- Blast Furnace

iii) Capital Investment on Energy Conservation Equipment:

Sr. No.	Description	( in Crore)	Planned for Year	Status
1	Screw Compressor	0.15	2022-23	Completed
2	Automatic Power Factor Controller (2.5 MVAR)	1.00	2022-23	Completed
3	Automatic Power Factor Controller (5 MVAR)	5.00	2023-24	Under Implementation

B. Technology absorption, adoption and Innovation

i) Efforts made towards technology absorption.

• Usage of ESR 2 mm around 20 MT/day in Sinter plant.

• Recycling of plant waste material resulted Cost Benefit of Rs 1.13 Cr in 2022-23

• Direct usage of wet slurry into PMD and sludge which resulted avoiding double handling, pollution free.

• Higher production by 100 -150MT per day (1% O2 enrichment will increase 2.0-2.5% productivity)

• Improvement in BFG calorific value i.e., 850 Kcal/Nm3.

• Improvement in steam generation in boiler & Power generation has increased.

• Installed one side burner in Sinter plant -1, resulted increase in ignition furnace temperature more than 1100 degree centigrade, resulted increase in production (692258 MT total Sinter).

• Increase the rate of oxygen in BF-3 (3800 Nm3) and BF-1 (1700 Nm3) resulted increase in Hot metal production (645066 MT total Hot metal).

• Input material effective sampling & analysis for right input blend (4 times/day) to improve the input quality parameters.

• Ferro alloy usage optimization and cost savings: v Consumption of Aluminium has minimised due to catch carbon improvement in EOF (reduction of aluminium consumption from 1.85 Kg/MT to 1.75 Kg/MT. v Usage of Silicon metal during tapping in EOF which resulted minimization of Aluminium level and Titanium for Spring application grades.

• Established 160x160: 12mtr for smooth casting & control the bend rejection from 4.77 to 0.37% • Various trials conducted to minimize chocking tendency and increase sequence ratio like (Mag filter trial, Argon MBS, Argon in SEN in high S grades)

• As Cast 180 Dia (First Time Right) developed and 1 heat supplied.

• Enhancing Mould tube life increase by replacing from Cr- plating to Ni-Cr- Cobalt plating.

• Usage of Vanadium pentoxide in place of Ferro vanadium which resulted cost reduction in Ferro vanadium.

• Achieved 96.08 % rolling yield FY 2022-23 against 95.98 % yield in FY 2021-22.

• Input length for 165 RCS has been increased from 3.1 metres to 3.25 metres.

• End discard at P-3 for HV Mill Material has been decreased by 50 mm.

• Utilisation improvement in RMS 1 by better planning by rolling family wise sizes in every set.

• Auto flow control of BFG gas in heating zone in RMS1 started.

• New Sizes (128, 98, & 93mm dia) developed for M/s. Varroc, BFL, & KTFL, First time right

• Zero bend in MSSSL cogged material

• Improvement in Pb recovery in leaded heats. (>60%).

• Celox-Oxygen, Carbon measurement @ EOF

• Idle time for cold saw cutting minimized from 8 minutes to 1 minute.

• NDT Inspection 22040 MT (RMS1 + RMS2) (Last achieved 20025 MT in Mar-2021

• SAE 5130M (High Al with Sulphur) Two heats casted with Argon MBS

• Auto UT upto 130mm DIA stabilized.

• Reduction due to melting by minimizing sms process deviations.

• Various cost saving projects executed for minimization of Bloom & Billet grinding: 4.56Cr Annual savings achieved.

• Production of M sand from Energy Optimizing furnace Slag.

ii) Benefits derived as a result of the above efforts:

• 75KW drive installed in dry fog system and saving of 4800 kw/Month.

• Automation of HV Mill TOT CB-1&2 Hydraulic pump operation with pressure interlock provided.

• Electrode regulation system both electronics and hydraulics of LRF1 upgraded.

• 2 strand and 4 strand wire feeding machine PLC upgraded and hooked up with SAP.

• Energy saving by installing VFD for combustion blower at RMS-1 and saving of 9048 kw/Month.

• Energy saving by installing VFD for RHF-2 ejector at RMS-1 and saving of 2250 kw/Month.

• Energy saving by installing VFD for UT de-scaler at RMS-1 and saving of 6960 kw/Month.

• Automation of Hot saw travelling while rolling heavy sections in RMS-2 and saving of 2050 kw/Month.

• Automation of F2 front RT motor during rolling heavy sections in RMS-2 and saving of 1000 kw/month.

• Automation of TOT HPP with pressure during rolling heavy sections in RMS-2 and saving of 2530 kw/month.

• Automation of Griptilter HPP with pressure during rolling heavy sections in RMS-2 and saving of 2450 kw/month.

• As a part of replacement of conventional power 5.74 Cr of renewable power has been consumed to replace conventional power from KPTCL grid and thus reduce CO2 /tcs.

• 220KV incoming breaker upgraded for smooth and reliable operation.

• Installation of new Jominy Hardenability testing with water temperature control.

• Latest XRF - Perform X installed.

New Grade Development

Grade	Customer	Specialty/Application
51B40	KPF	Fastener application export
SAE 8319	GKN	Hypoid ring & Pinion gear
42CrMoS4-AT	M/s. Auto Tech	Bracket application (M/s Scania)
SAE 1035	M/s Ultra Engineers Ltd	Valve application for L& T
70MnVS4	M/s SFL Pvt. Limited.	Connecting rod
VS13111	M/s. Saab Engineering (Mico Bosch) Ltd	ULC, Housing application
19MnB4(M).HC	M/s Daulat Pvt. Ltd.,	Wire rod export order
JSAW 2	M/s. JSL (For ML)-FTR	Seamless tubes for ML
78ACR	M/s. Press Stress Wires Ltd.	Wire rod application
10B33Cr	M/s. KPF	Export order
55SiCr63 (with Low Ti)	M/s. Peng Usha pvt.Ltd	Spring steel with Low Ti.
UNS S32750	M/S Ratnamani Metal & Tubes Ltd.	Seamless Pipes and Tubes
303B	M/S BOSCH	Fuel Injection Pump

New certifications or approvals or recognition received in the year 22-23 for Hospet plant.

• NTN Approved for Hub Bearing Steels v Bosch Approved for 45CRPb.

• SKF Approved for SKFGRD4

• NRB bearings approved for 16MnCr5B (ZF6)

• NABL accreditation of Kalwe Laboratory.

iii) Imported technology:

The Company has not imported any technology during the year under review.

iv) Expenditure on R&D:

Description	2022-23 ( in Crore)	2021-22 ( in Crore)
a) Capital	-	-
b) Recurring	0.53	0.22
Total	0.53	0.22
R&D expenditure as a % of total turnover	0.01	0.01

C. Foreign Exchange Earnings and Outgo:

Sr. Description No.	2022-23 ( in Crore)	2021-22 ( in Crore)
i. Foreign Exchange Earnings	420.99	242.79
ii. CIF value of imports	1,676.89	1,648.48
iii. Expenditure in Foreign Currency	8.55	4.06

Annexure – 8 Annexure to the Directors Report Salient features of Financial Statements of Subsidiaries / Associate Companies / Joint Ventures Form AOC-I

Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts), Rules 2014 Statement containing salient features of the financial statement of Subsidiaries / Associate Companies / Joint Ventures

Part - "A" : Subsidiaries

(Rs. In crore)

Sr. Description	Indian Subsidiaries	Foreign Subsidiary
No	Mukand Sumi Metal Processing Limited*	Mukand International FZE**
1 Reporting period for the subsidiary concerned, if different from the holding companys reporting period	1-4-2022 to 31-03-2023	1-4-2022 to 31-03-2023
2 Reporting currency and Exchange rate as on the last date of the relevant Financial Year in case of foreign subsidiaries	-	-
3 Share Capital	27.30	-
4 Reserves and Surplus	53.68	-
5 Total Assets	187.05	-
6 Total Liabilities	106.07	-
7 Investments	-	-
8 Turnover #	603.37	-
9 Profit/(Loss) before taxation #	(18.81)	(0.19)
10 Provision for Taxation #	(5.80)	-
11 Profit after taxation #	(13.01)	(0.19)
12 Proposed Dividend / Dividend paid	-	-
13 % of shareholding	100.00	-

* In case of foreign subsidiary, translated at average Exchange Rate of USD 1 = 79.57

Notes:

1. Names of Subsidiaries which are yet to commence operations – Nil

2. * Mukand Sumi Metal Processing Ltd a joint venture entity till September 29, 2022, thereafter it is wholly owned subsidiary.

3. ** During the FY 22-23, Mukand International FZE was liquidated and the repatriation proceeds were received on September 19, 2022. Jebel Ali Freezone Authority vide its letter dated December 26, 2022 confirmed the clearance of all cessation formalities.

# Above illustrated Profit and Loss figures are for full year i.e FY 2022-23.

Part "B":

Associates and Joint Ventures Statement pursuant to Section 129(3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

Name of Associates/Joint Ventures		Bombay Forgings Ltd (BFL)	Stainless India Ltd (SIL)	Hospet Steels Ltd (HSL)
		Associate	Associate	JV
1. Latest Audited Balance Sheet date		31.03.2022	31.03.2022	31.03.2023
2. Shares of Associates/Joint Ventures held by the Company on the year end No.		39,800	66,78,600	97,504
Amount of Investment in Associates/Joint Ventures - Rs. In Cr		Nil*	Nil*	Nil*
Extent of Holding %		33.17	48.30	39.00
3. Description of how there is significant influence.		Extent of share holding	Extent of share holding	Extent of share holding
4. Reason why the associate/joint venture is not consolidated		-	-	-
5. Networth attributable to Shareholding as per latest audited Balance Sheet		Nil*	Nil*	Nil*
6. Profit/Loss for the year		-	-	-
i. Considered in Consolidation		-	-	-
ii. Not Considered in Consolidation		-	-	-
	‘* As provision for diminution in value of investments has been considered while consolidating the financial statements.
	‘1. Names of associates or joint ventures which are yet to commence operations - Nil.
	2. Names of associates or joint ventures which have been liquidated or sold during the year - NIL

Report on performance and financial position of each subsidiary, joint ventures / associates

1. Mukand Sumi Metal Processing Limited (MSMPL)

MSMPL is a joint venture with Sumitomo Corporation, Japan to carry on the business of cold finished bars and wires. During the year under review, 1,33,77,000 shares of MSMPL were acquired from Sumitomo Corporation, making it wholly owned subsidiary from September 30, 2022. Revenue from operations is Rs. 603.37 crore as compared to Rs. 491.85 crore (Restated) in the previous year. Loss after tax is Rs.13.01 crore as compared to Rs. 3.83 crore (Restated) in the previous year.

2. Mukand International FZE (MIFZE)

During the FY 22-23, MIFZE was liquidated and the repatriation proceeds amounting Rs.0.88 crore were received on September 19, 2022. Jebel Ali Freezone Authority vide its letter dated December 26, 2022 confirmed the clearance of all cessation formalities.

3. Hospet Steels Ltd (HSL)

HSL is an outcome of a strategical alliance between Kalyani Steels Limited and Mukand Ltd to manage and operate the composite manufacturing facility at Ginigera, Karnataka. Actual expenses incurred by HSL for carrying out its objectives are reimbursed by alliance constituents. In view of the same, no service charges are recovered by HSL. During the year, it claimed reimbursement of Rs.153.13 crore from the constituents and its profit/(loss) for the year after tax was Rs. NIL as against Rs. NIL in the previous year.

On Behalf of the Board of Directors,
Niraj Bajaj	Dhanesh K Goradia	Rajendra Sawant
Chairman & Managing Director	Chief Financial Officer	Company Secretary
Mumbai, May 16, 2023

Annexure-9

Annexure to the Directors Report

Disclosure of Managerial Remuneration under Section 197 of Companies Act, 2013 read with Rule 5(1) and (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

1.1 The ratio of the remuneration of each Director to the median remuneration of the employees of the company for the

Financial Year ending 31.03.2023 and the percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year.

Name & Designation	Ratio of remuneration of Directors with respect to median remuneration of employees	Percentage increase in remuneration over last Financial Year
Managing Directors:
Niraj Bajaj Chairman & Managing Director	17.90:1	0
Whole-time Director:
Arvind M Kulkarni Director & President (appointed as Whole-time Director with effect from June 28, 2022)	16.63:1	22%#
Key Management Personnel:
Umesh V. Joshi, Chief Financial Officer (upto May 31, 2022)	N.A.	128%*
K.J. Mallya, Company Secretary (upto April 30, 2022)	N.A.	26%*
Dhanesh K Goradia Chief Financial Officer (w.e.f. June 01, 2022)	N.A.	N.A**
Rajendra Sawant, Company Secretary (w.e.f. May 17, 2022)	N.A.	N.A**

. * Includes Gratuity and Leave encashment.

** Since appointed during the year comparative remuneration for whole year is not feasible.

# Includes Remuneration in capacity of President as well.

1.2 The percentage increase in the median remuneration of employees in the Financial Year:

The percentage increase in the median remuneration of employees in the Financial Year is 4%. 1.3 The number of permanent employees on the rolls of the Company as on March 31, 2023 - 1,607.

1.4 The average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

- Average percentage increase in the salaries of employees other than the managerial personnel in the last financial year was 23.95% and the percentage increase in the managerial remuneration was at 32% .

- The Companys total revenue was Rs. 6,203.47 crore for the year under review as compared to Rs. 4,676.02 crores in the previous year. Profit after tax was at Rs. 185.48 crore as compared to Rs. 91.62 crore for the previous year.

1.5 The key parameters for any variable component of remuneration availed by the directors:

- There is no variable component of remuneration payable to the Directors.

1.6 Affirmation that the remuneration is as per the remuneration policy of the company:

- It is hereby affirmed that the remuneration to Managerial personnel is as per the Remuneration Policy of the Company.

1.7 Details of top 10 or such employees in terms of remuneration drawn during the year, where employed throughout the financial year, in receipt of remuneration for the year which, in the aggregate, was not less that Rs. 1,02,00,000/- and where employed for any part of the year, at a rate which, in the aggregate, was not less than Rs. 8,50,000/- per month:

S r . No.	Employee Name	Designation	Educational Qualifications	Age	Experience in years	Gross Remuneration in F.Y. 2022-23 (Rs. In crore)	Previous Employment & Designation
(A)	Employed through-out the year
1	Niraj Bajaj	Chairman & Managing Director	B.Com., M.B.A. (Harvard Business School)	68	42	1.28	Executive Trainee - Bajaj Auto Limited
2	Arvind Madhav Kulkarni	President & Director	B.Tech from IIT, Kharagpur	71	48	1.19	Management Trainee – Mukand Limited
(B)	Employed for part of the year
1	Shashibhushan Upadhyay*	President	BE (Metallurgy)	52	30	0.16	Vice President & Resident Director - Jindal Stainless Limited

* w .e.f. February 13, 2023

Except for the above, none of the employees, employed throughout the year were in receipt of remuneration of more than Rs.1.02 crore per annum and employed for part of the year, were in receipt of remuneration of not more than Rs.8.50 lacs per month.

The employees mentioned above have/had permanent contracts with the company. Directors are not related to each other.

Apart from the above, none of the employees are neither relatives of any directors of the Company, nor hold 2% or more share of the paid-up equity share capital of the Company as per Clause (iii) of sub-rule (2) of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

On behalf of the Board of Directors,

Niraj Bajaj

Chairman & Managing Director

Mumbai, May 16, 2023.