Your Directors present their 30th Annual Report together with the Audited Statement ofAccounts of your Company for the Financial Year ended 31st March 2017.
|Particulars ||Current year ||Previous Year |
| ||(2016-17) ||(2015-16) |
| ||(Rs. in lacs) ||(Rs. in lacs) |
|Sales (Including Excise) ||624.44 ||672.33 |
|Other Income from operations ||55.44 ||4.12 |
|Total ||679.88 ||713.53 |
|Profit/(Loss) before Interest Depreciation & Tax ||8.14 ||25.61 |
|Less: Interest ||17.54 ||2.87 |
|Less: Depreciation ||11.79 ||12.42 |
|Profit/(Loss) before Tax ||(21.19) ||10.32 |
|Taxation (Earlier Years) Prior period Adjustment (Income/(Expenses): ||- ||- |
|Extra-ordinary/Exceptional Items (Expenditure) ||- ||- |
|Profit after Tax ||(21.19) ||10.32 |
|Add: Reduction in Share Capital ||- ||391.50 |
|Tax for Earlier year/Others ||(15.05) ||(18.23) |
|Balance of Profit/(Loss) brought forward ||(1462.03) ||(1845.62) |
|Balance of Profit/(Loss) carried to Balance Sheet ||(1498.27) ||(1462.03) |
There is no significant growth in the business of the Company. There is inadequacy ofworking capital and shortage of orders in the market. The terms of trade in the market arenot much favourable. The cost competitiveness for us is very tight and challenging for oursurvival and to face the market forces.
1310600 shares of Promoters have been transferred to Smt. Sandeep Kaur Ahluwalia underthe purview of Compromise Deed dated. 05-01-2011 recorded in the Hon'ble Supreme CourtOrder dated. 12-05-2011.
In view of inadequate profit and accumulated losses the Board decided not to recommendany dividend for the year under review.
AMOUNT CARRIED TO RESERVES:
During the year under review your Company did not transfer any amount to the Reserves.
The annual production of the Company is 1811.81 MT. Out of this 1033.16 MT is by way ofJob work. The Company is still operating below break even point. The demand for theproducts of the Company is inadequate viz-a-viz the installed capacity.
The steel sector market has a surplus installed capacity. The demand is sluggish in themarket. There is a shortage of orders. There is a optimism in the market for the comingyears. It is expected that there will be a rise in the public and private investment. Thebudget allocation for 2017-2018 for the development of infrastructure is a greatexpectation for the recovery of the steel sector.
REHABILITATION UNDER AEGIS OF BIFR:
The Board of Directors of the Company has approved the implementation of the sanctionedBIFR scheme dated19-02-2015 vide Hon'ble BIFR Order dated. 13-04-2015. The BIFR and AAIFRhave since been dissolved and replaced by NCLT and NCLAT. The sanctioned BIFR scheme underpara 11.3 envisages leasing of surplus land and building to garner supplementary incomefor the survival of the Company. The Board of Directors of the Company has approved thedraft of the Lease deed. Accordingly Land measuring 2.27 Acres with building constructedon it is being leased for 35 years with monthly lease rent of Rs. 300000/- (Rupees Threelakhs only) on market rate to Mukat Educational Trust (Related Party) with a securityamount of Rs. 4 Crores (Rupees Four Crores only) for the performance of the leasecontract. The security amount does not bear interest and refundable on the termination ofthe lease deed.
EXTRACT OF THE ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT-9 is annexedas Annexure 1 to this report.
NUMBER OF MEETINGS OF THE BOARD:
During the year 5 (Five) Board Meetings were convened and held. These were held on16.05.2016 12.08.2016 08.11.2016 10.02.2017 30.03.2017. The intervening gap betweenthe Meetings was within the period prescribed under the Companies Act 2013.
|Names of the Directors ||Number of Board Meetings Attended |
|Mr. Rupinder Singh Ahluwalia ||5 |
|Mrs. Sandeep Kaur Ahluwalia ||5 |
|Mrs. Mandeep Ahluwalia Pahwa ||5 |
|Mr. R.K.Bali ||5 |
|Mr. Kamal Jain ||2 |
|Mr. Amrik Singh Grewal ||5 |
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:
(a) in the preparation of the annual financial statements for the year ended March 312017 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
(b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the at the end of the financial year and of the lossof the Company for that period;
(c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) The directors have prepared the annual accounts on a going concern basis;
(e) The directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) The directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
All Independent Directors have given declarations that they meet the criteria ofIndependence pursuant to Section 149(6) of the Companies Act 2013 and Regulation 16(1) ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
As the Paid up Share Capital of the Company is less than Rs. 10 Crores and Net Worthbeing less than 25 Crores Corporate Governance is not applicable to the Company. Howeverfollowing details/ particulars are furnished w.r.t proposed reappointment of Whole timeDirector:
The Board of Directors at its meeting held on 26.05.2017 approved the appointment ofMrs. Sandeep Kaur Ahluwalia (DIN: 01355454) as a Whole time Director for a period of threeyears w.e.f 01.10.2017 Accordingly the disclosures pursuant to Schedule V of the CompaniesAct 2013 are as follows:
(i) All elements of remuneration package such as salary benefits bonuses stockoptions pensions etc. of all the Directors: Mrs. Sandeep Kaur Ahluwalia draws a salary ofRs. 1800000 Lakhs p.a and Mr. Rupinder Singh Ahluwalia draws a salary of Rs. 474845p.a.
(ii) Details of fixed component and performance linked incentives along withperformance criteria: NA
(iii) Service Contracts notice period severance fees: NA
(iv) Stock option details if any and whether the same has been issued at a discountas well as the period over which accrued and over which excisable: NA.
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors and Senior Management Personneland their remuneration including criteria for determining qualifications positiveattributes independence of a Director and other matters provided under sub-section (3) ofsection 178 relating to the remuneration for the Directors key managerial personnel andother employees. As required by Rule 5 of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 the prescribed details are annexed as Annexure - 2 tothis report.
INFORMATION IN TERMS OF RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014:
During the year under review no employee was employed who was in receipt of aggregateremuneration exceeding Rupees One Crore and two Lakh for the year or exceeding RupeesEight Lakhs and Fifty thousand per month for any part of the year.
The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company and other details in terms of Sub-Section 12 of Section 197 ofthe Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 are forming part of this Report and is annexed as "Annexure3" to this Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013:
During the year the Company has not given any loans or guarantees or has made anyinvestments u/s 186 of the Companies Act 2013.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All the Transactions entered with Related Parties for the year under review arestrictly done on arm's length basis and in the ordinary course of business. The Companypresents full details of transactions of all related party before the Audit CommitteeSpecifying the nature value and terms & conditions of the transactions. Transactionswith related parties are conducted in a transparent manner with the interest of theCompany and stakeholders at utmost priority.
The details of transaction with related party in Form AOC-2 is annexed herewith as "Annexure4"
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:
The Company does not have any Subsidiary Joint venture or Associate Company.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
In order to attain the corporate objectives strict internal controls systems wereimplemented across the organisation. The appointment of internal auditor is done as pernorms of Company Act 2013. The Audit Reports of the internal auditor on quarterly basishas been evaluated and assessed. The Audit Committee reviews adequacy and effectiveness ofthe Company's internal control environment and monitors the implementation of auditrecommendations on regular basis. The audit function maintains its independence andobjectivity while carrying out assignments. It evaluates on a continuous basis theadequacy and effectiveness of internal control mechanism. The function also proactivelyrecommends improvement in policies and processes suggests streamlining of controlsagainst various risks. Your Company has laid down set of standards processes andstructure which enables it to implement internal financial control across the Company andensure that the same are adequate and operating effectively.
DETAILS ABOUT DIRECTORS AND KMPs WHO WERE APPOINTED/ RESIGNED DURING THE FINANCIALYEAR:
During the year under review none of the Directors and KMPs were appointed orresigned.
Pursuant to Regulation 15(2) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Provisions of Regulation 17 to 27 and Clauses (b) to(i) of Regulation 46(2) and Para C D and E of Schedule V is not applicable to theCompany as the Company's Paid up share capital & Net worth is below the limitsspecified.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
The sanctioned BIFR scheme under para 11.3 envisages leasing of surplus land andbuilding to garner supplementary income for the survival of the Company. Accordingly Landmeasuring 2.27 Acres with building constructed on it is being leased for 35 years withmonthly lease rent of Rs. 300000/- (Rupees Three lakhs only) on market rate to MukatEducational Trust (Related Party) with a security amount of Rs. 4 Crores (Rupees FourCrores only) for the performance of the lease contract.The Lease deed is under the processof execution.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule 8of the Companies (Accounts) Rules 2014 is annexed as Annexure "5" tothis report.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY:
The Board of Directors of the Company has not designed any Risk Management Policy.However the Company has in place mechanism to identify assess monitor and mitigatevarious risks to key business objectives. Major risks identified by the businesses andfunctions are systematically addressed through mitigating actions on a continuing basis.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:
The Company has not developed and implemented any Corporate Social ResponsibilityPolicy pursuant to the Provisions of Section 135 of the Companies Act 2013 and relevantRules framed thereunder as the said provisions were not applicable to the Company as theCompany had incurred losses during the relevant period.
During the year under review the Company has not accepted any deposit pursuant toSection 73 and section 76 of the Companies Act 2013 read with Companies (Acceptance ofDeposits) Rules 2014.
ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE:
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Audit Nomination & Remuneration committee byfilling a structured questionnaire.
SECRETARIAL AUDIT REPORT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Ms. Yogita Practicing Company Secretaries Rajpura Town Patiala to undertakethe Secretarial Audit of the Company. The Secretarial Audit Report is annexed as "Annexure6" to this report.
EXPLANATION ON REMARKS OR DISCLAIMER MADE BY SECRETARIAL AUDITOR IN HER REPORT:
Looking at the Company's size and continuous losses for past few years no one wasinterested in joining as CFO and Company Secretary. The Company is in process of complyingwith the said requirements.
Further the company was facing financial crunches and Working Capital requirementwhich led to arrears as on 31st March 2017 w.r.t. Service Tax TDS and Employees StateInsurance. However the same has been paid after 31.03.2017 except for Service Tax whichis under process of payment. The amount of unpaid dividend pertains to earlier year(s) andthe company is compiling data/records for the same. The other observations made by theSecretarial Auditor in her Report are self explanatory and do not require any furtherclarification.
Pursuant to the Provisions of the Companies Act 2013 Mrs. Sandeep Kaur Ahluwalia(DIN: 01355454) retires by rotation and being eligible offers herself for re-appointment.
The Board of Directors at its meeting held on 26.05.2017 approved the appointment ofMrs. Sandeep Kaur Ahluwalia (DIN: 01355454) as a Whole time Director for a period of threeyears w.e.f 01.10.2017 subject to approval of Members. Accordingly approval of Membersis being sought for her appointment at the ensuing AGM by way of a Special Resolution.
M/s R.P. Bhambri & Co. Chartered Accountants Rajpura FRN (001312N) StatutoryAuditors of the Company were appointed at the 27th Annual General Meeting to hold officeupto 30th Annual General Meeting. However pursuant to Section 139 of the Companies Act2013 such appointment is subject to ratification by members at every subsequent GeneralMeeting. As they will be completing their full term of 3 years in terms of the provisionsof the Companies Act 2013 they would not be eligible to be appointed. Your Companyproposes to appoint M/s.Gurpreet Kaur & Associates Chartered Accountants PatialaFRN (01538N) as the Statutory Auditors for a period of 5 years from the conclusion of30th Annual General Meeting until the conclusion of 35th Annual General Meeting. The AuditCommittee and the Board had received the consent and eligibility certificate from M/sGurpreet Kaur & Associates pursuant to section 141 of the Companies Act 2013 hasapproved their appointment and have recommended their appointment to the members of theCompany. The resolution recommending their appointment will be placed before theshareholders in the ensuing Annual General Meeting.
RESERVATION AND QUALIFICATION ON AUDITOR REPORT:
As per Note No. 29 In the absence of confirmation letter of balances from DebtorsCreditors and other parties balances are taken as per book of accounts.
The Company is in the process to send the balance confirmation letter to Creditors andDebtors.
As per Note No. 28 The Company has not produced books of accounts and other relevantrecord in respect of Baramati unit which has since been sold as such the balances aretaken as per audited balance sheet as on 31-03-2008. The impact of transactions enteredinto by the Company at Baramati unit after 31-03-2008 will be considered when the relevantdocuments are produced.
The Company has already sold the Baramati unit under the process of BIFR. Efforts arebeing made to procure the desired information.
As per Note No. 34 The Company has yet to transfer Rs. 12.13 Lakhs on account of unpaiddividend to Investor Education and Protection Fund.
The Company has taken up the matter with Banks for remitting the amount. The Company isyet to receive details from the Banks.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS PURSUANT TO SECTION 143(12) OF THECOMPANIES ACT 2013:
During the year under review there were no incidences of fraud reported by Auditors.
I) Audit Committee:
Being a listed Company the Company had already constituted its Audit Committeeconsisting of Mr. Kamal Jain (DIN: 02229015) Mr. Amrik Grewal(DIN: 01239180 ) and Mr.Rupinder Singh Ahluwalia (DIN: 01239483).
During the year under review Four (4) Meetings were held of Audit committee.
|Names ||Number of Audit Committee Meetings Attended |
|Mr. Amrik Singh Grewal ||4 |
|Mr. Rupinder Singh Ahluwalia ||4 |
|Mr. Kamal Jain ||2 |
II) Nomination and Remuneration Committee:
Being a listed Company the Company had already reconstituted its Nomination andRemuneration Committee consisting of Mr. Kamal Jain (DIN: 02229015) Mr. Amrik Grewal(DIN: 01239180) and Raj Kumar Bali (DIN: 02227210) During the year under review One (1)Meeting was held of Nomination and Remuneration Committee.
|Names ||Number of Nomination and Remuneration Committee Meetings Attended |
|Mr. Amrik Singh Grewal ||1 |
|Mr. Raj Kumar Bali ||1 |
|Mr. Kamal Jain ||- |
III) Stakeholders Relationship Committee:
Being a listed Company the Company had already constituted its StakeholdersRelationship Committee consisting of Mr. Kamal Jain (DIN: 02229015) Mr. Amrik Grewal(DIN: 01239180) and Mr. Rupinder Singh Ahluwalia (DIN: 01239483).
During the year under review one (1) Meeting was held of Stakeholder RelationshipCommittee.
|Names ||Number of Stakeholder Relationship Committee. Meetings Attended |
|Mr. Amrik Singh Grewal ||1 |
|Mr. Raj Kumar Bali ||1 |
|Mr. Rupinder Singh ||1 |
IV) Independent Directors Meeting:
Being a listed Company the Meeting of Independent Directors of the Company was dulyheld and report thereof was submitted to the Chairman.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has adopted the code of conduct for employees and directors for the highestdegree of transparency integrity accountability and corporate social responsibility. Anyactual or potential violation of the Code would be a matter of serious concern for theCompany. The Company also has Whistle Blower Policy to deal with instance of fraud andmismanagement if any.
Employees of the Company are encouraged to use guidance provided in the Policy forreporting all allegations of suspected improper activities.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE.
The Company had filed two appeals against the Order passed by the Civil Court Gujaratin the Hon'ble Gujarat High Court. Both the appeals are pending for the preparation ofPaper Book i.e. the Record and the Proceedings of Lower Court - City Civil CourtAhmedabad and it shall be listed in due course of time
COMPANY'S POLICY FOR PREVENTION OF SEXUAL HARASSMENT:
The Company is committed to provide a safe and conducive work environment to all womenemployees. During the year under review Company had not received any Complaints in respectof Sexual Harassment.
Your Directors place on record their appreciation for the co-operation of all the Staffand Officers Shareholders of the Company Bankers and look forward to their continuedco-operation in future.
| ||For MUKAT PIPES LIMITED |
|Registered Office: || |
|Flat No. 39 Parag Apartments ||Sd/- |
|7th FloorJ.P. Road Versova ||(RUPINDER SINGH AHLUWALIA) |
|Andheri (West)Mumbai 400 061 ||Chairman |
| ||(DIN:01239483) |
|Place: Rajpura || |
|Date: 26-05.2017 || |