Your Directors present their 33rdAnnual Report together with the AuditedStatement of Accounts of your Company for the Financial Year ended 31st March2020.
|Particulars ||Current year (2019-20) ||Previous Year (2018-19) |
| ||(Rs. in lacs) ||(Rs. in lacs) |
|Sales (Including Excise) ||447.71 ||796.84 |
|Other Income from operations ||38.86 ||47.68 |
|Total ||486.57 ||844.52 |
|Profit/(Loss) before Interest Depreciation & Tax ||21.17 ||(7.85) |
|Less: Interest ||12.78 ||13.83 |
|Less: Depreciation ||13.21 ||12.95 |
|Profit/(Loss) before Tax ||(4.82) ||(34.63) |
|Taxation (Earlier Years) Prior period Adjustment (Income/(Expenses): ||NIL ||NIL |
|Extra-ordinary/Exceptional Items Income/(Expenditure) ||NIL ||NIL |
|Profit after Tax ||(4.82) ||(34.63) |
|Tax for Earlier year/Others ||NIL ||NIL |
|Balance of Profit/(Loss) brought forward ||(1603.12) ||(1568.49) |
|Balance of Profit/(Loss) carried to Balance Sheet ||(1607.94) ||(1603.12) |
The company is engaged in job work. The figures for sales is not the correct indicatorfor the performance of the copy. The accounting of job work do not reflect the cost of rawmaterial consumed. The company operated its production at below break even point. There isa under utilization of installed capacity of production due to sluggish demand for theproduct of the company. There is a still challenge for profitable production and financialresults need more improvement. The financial health of the company is not at the desiredlevels due to continuous losses over the year.
In view of losses during the year and accumulated losses the Board decided not torecommend any dividend for the year underreview.
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 2370.584 MT. Out of this 1838.191MT is by wayof Job work. The Company is operating just below breakeven point.
There is a weak aggregate demand in the Indian Economy. The demand for our products isalso not adequate to utilize the full installed capacity of the unit. The product of thecompany is an intermediary
good and is used in water circulation projects like mini hydro power plants thermalpower plants and other water circulatory projects. The demand for product of the companyis derived by State and Central Govt. expenditure allotted for the above said projects.The Covid-19 has very badly impacted the fiscal resources of the State & CentralGovernments. However the monetary policy of the Government /RBI is very supportive forthe said projects. We can hope a good demand for our products in the financial year2020-2021 due to monetary support.
The spread of Covid-19 has severely impacted the economy world over. The Impactassessment of Covid-19 is a continuing process given the uncertainties associated with itsnature the company has taken suitable measures to tackle this challenge.
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. The same is placed on Company's website athttp://www.mukatpipes.com.
NUMBER OF MEETINGS OF THE BOARD:
During the year 5 (FIVE) Board Meetings were convened and held. These were held on23-05-2019 1306-2019 07-08-2019 05-11-2019 & 06-02-2020. The intervening gapbetween the Meetings was within the period prescribed under the Companies Act 2013.
|Names of the Directors ||Number of Board Meetings Attended |
|Mr. Rupinder Singh Ahluwalia ||4 |
|Mrs. Sandeep Kaur Ahluwalia ||5 |
|Mrs. Mandeep Ahluwalia Pahwa ||5 |
|Mr. Raj Kumar Bali ||4 |
|Mr. Kamal Jain ||4 |
|Mr. Amrik Singh Grewal ||4 |
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 312020 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 Company at the end of the financial year and ofthe loss of 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.
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 178relating 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 COMPANIESACT2013:
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 organization. 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 your company has appointed Company Secretary and CFO inorder to comply with Provisions of the Companies Act 2013. Further none of the Directorsresigned during the year.
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 THECOMPANYWHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHEFINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
No material changes have occurred between the end of the financial year of the companyto which the financial statements relate and the date of the report.'
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 OFTHECOMPANY:
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 deteriorating profitability low scale production and sluggish demand forthe products of the company. The company is continuously making efforts to address thesaid risk.
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 there under 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 of Yogita & Associates Company Secretaries Rajpura TownPatiala to undertake the Secretarial Audit of the Company. The Secretarial Audit Report isannexed as "Annexure 6" to this report.
EXPLANATION ON REMARKS OR DISCLAIMER MADE BY SECRETARIAL AUDITOR IN HER REPORT:
The Statutory Auditor has informed the company that they have already applied peerreview certificate to ICAI.
As per B (3) para the company has yet to transfer Rs. 11.41 Lacs on account of unpaiddividend to Investor Education and Protection Fund under section 124 of the Company Act2013. Out of 11.41 Lacs and amount of Rs. 8.80 Lacs has already been transferred to deafaccount of RBI by Punjab National Bank. An amount of Rs. 333450/- is outstanding inDividend Account No.111511001114 with Dena Bank Branch (DP-ID-IN 300386 Capital MarketBranch 17 Horniman Circle Mumbai -23 (Now Bank of Baroda).
The company does not have record of share holders to whom the unpaid dividend amountbelongs to. The company has several times approached Investor Education Protection Fund(IEPF) through emails to know the procedure to transfer the above said unpaid dividendamount to IEPF in the absence of names of share holders and other concerned records neededin the matter. We have not received any response from the IEPF authority. The company willpursue the matter with the IEPF authority to expedite the matter.
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 21.08.2020 approved the re-appointment ofMrs. Sandeep Kaur Ahluwalia (DIN: 01355454) as a Whole Time Director for a further periodof three years w.e.f. 01.10.2020 till 30.09.2023 subject to approval of Members.Accordingly approval of Members is being sought for her appointment at the ensuing AGM byway of a Special Resolution.
FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:
The familiarization program seeks to update the Directors on the rolesresponsibilities rights and duties under the Act and other statutes. The Company hasframed a policy on familiarization program for Independent Directors.
The Company's Auditors M/s.Gurpreet Kaur & Associates Chartered AccountantsPatiala FRN (01538N) were appointed as Statutory Auditors at 30th AGM for aperiod 5 (Five) years i.e. from the conclusion of 30thAnnual General Meetinguntil the conclusion of 35thAnnual General Meeting subject to ratification ofMembers at every subsequent Annual General Meeting. M/s. Gurpreet Kaur & Associates(FRN 01538N) have provided their consent and eligibility pursuant to Section 141 of theCompany Act 2013 to act as Auditors of the Company. Your Directors recommend ratificationof their appointment to enable them to continue as Statutory Auditors of the company forthe Financial Year2020-2021.
RESERVATION AND QUALIFICATION ON AUDITOR REPORT:
The qualification/ remarks made by the Statutory Auditors in their Report under thehead Key audit matters and the management response thereto have been fully clarified/explained in the Auditors Report and does not require any further explanation/clarification
Save and except above there is no qualification and reservation pointed out by theAuditor.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS PURSUANT TO SECTION 143(12) OF THECOMPANIESACT 2013:
During the year under review there were no incidences of fraud reported by Auditors.
The Company has complied with the applicable Secretarial Standards viz. SS-1 andSS-2during the year.
I) Audit Committee:
Being a listed Company the Company had already constituted its Audit Committeeconsisting of Mr. Kamal Jain (DIN: 02229015) Mr. Amrik Singh Grewal (DIN: 01239180) andMr. 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 ||4 |
II) Nomination and Remuneration Committee:
Being a listed Company the Company had already constituted its Nomination andRemuneration Committee consisting of Mr. Kamal Jain (DIN: 02229015) Mr. Amrik SinghGrewal (DIN: 01239180) and Raj Kumar Bali (DIN: 02227210)
During the year under review One (1) Meeting was held of Nomination and RemunerationCommittee.
|Names ||Number of Nomination and Remuneration Committee Meetings Attended |
|Mr. Amrik Singh Grewal ||1 |
|Mr. Raj Kumar Bali ||0 |
|Mr. Kamal Jain ||1 |
III) Stakeholders Relationship Committee:
Being a listed Company the Company had already constituted its StakeholdersRelationship Committee consisting of Mr. Kamal Jain (DIN: 02229015) Mr. AmrikSingh 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. Kamal Jain ||1 |
|Mr. Rupinder Singh Ahluwalia ||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 integrityaccountability and corporate social responsibility. Anyactual or potential violation of the Code would be a matter of seriousconcern for theCompany. The Company also has Whistle Blower Policy to deal with instance of fraud andmismanagement ifany.
Employees of the Company are encouraged to use guidance provided in the Policy forreporting all allegations of suspectedimproper activities.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report as required under Companies Act 2013Regulation 34(2)(e)read with Schedule-V of Securities and Exchange Board of India (SEBI)(Listing Obligations and Disclosure Requirements) Regulations 2015 (LODR) is given inthis Annual Report for the year under review and is annexed as "Annexure 7"to this report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:.
The Company had filed two appeals in suit of M/s. Modern Construction Co. v/s MukatPipes Limited against the Order passed by the Civil Court Gujarat in the Hon'ble GujaratHigh Court. Both the appeals are pending for decision. The company has filed appealagainst order of Commissioner Excise before CSTAT and the same is pending for decision.The Income Tax department has passed an order to reassess the return of income for the A.Y2012-2013. The company has applied rectification proceedings in the matter which is stillunder process.
MAINTENANCE OF COST RECORDS:
During the year under review the Company was not required to maintain the Cost recordsas specified by the Central Government under Section 148 of the Companies Act 2013.
COMPANY'S POLICY FOR PREVENTION OF SEXUAL HARASSMENT:
The Company has zero tolerance for sexual harassment at workplace and accordingly duecare is always taken in respect of prevention prohibition and redressal of sexualharassment at workplace in line with the provisions of the Sexual harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and Rules framed thereunder.
No complaints were received during the year.
Further necessary steps are being taken by the Board for complying with provisions ofthe said Act including constitution of Internal Complaints Committee as referred in thesaid Act.
Your Directors place on record their appreciation for the co-operation of all the Staffand Officers Shareholders of theCompany Bankers and look forward to their continuedco-operation in future.
|For MUKAT PIPES LIMITED || |
|Sd/- || |
|(RUPINDER SINGH AHLUWALIA) || |
|Chairman || |
|(DIN:01239483) || |
|Registered Office: || |
|Flat No. 39 Parag Apartments || |
|7th FloorJ.P. Road Versova ||Place: Rajpura |
|Andheri (West) Mumbai 400 061 ||Date: 21-08-2020 |