RAJ IRRIGATION PIPES AND FITTINGS LIMITED ANNUAL REPORT 2011-2012 DIRECTOR'S REPORT To The Members, Your Directors present the 28th Annual Report of the Company along with Audited Statement of Accounts for the year ended 30th September, 2012. 1. FINANCIAL RESULTS (Rs. in lakhs) Year ended Year ended Particulars 30.09.2012 30.09.2011 Sales and Other Income 0 0 Administrative Expenses 10.19 8.26 Profit/(Loss) (10.19) (8.26) Add: Prior Period Expenses 0 0 Add: Balance of Loss brought forward from previous year (1093.14) (1101.41) Balance Carried Forward (1111.61) (1101.41) 2. OPERATIONS The Company did not nave any operations during the year. As such the Company did not earn any income during the year. Due to administrative expenses the Company incurred a net loss of Rs 10.19 lakhs. The Company is trying to revive its business and is in the process of crystallizing its future plans. The Management is taking its efforts in this regard. 3. DIVIDEND In the event of the losses during the current financial year your Directors are unable to recommend any dividend. 4. STATUS OF BIFR REFERENCE/SALES TAX MATTER The Company was declared a sick Company under S1CA by the BIFR on 29.05.2002. The Hon'ble AAIFR. New Delhi had remanded the matter to BIFR by its order dated 5th May,2008 directing the Company to submit an OTS based rehabilitation scheme before BIFR. In its order dated 15.3.2010 the BIFR noted that as the secured creditors have taken action under section 13(4) of the SARFESI Act the reference of the Company stands abated under section 15(1) of the SICA. The land, building, plant and machinery, electricals. mould & dies etc of the two manufacturing units at Nagpur and Goa have been taken over / disposed off to pay off one time settlement amounts to Secured Creditors. Bank of India and MSFC. Therefore presently there is no production/sale and there are no employees. There is a contingent liability of Rs.481,82.660 arising out of assessments of Sales Tax Department. Nagpur as the department has charged Sales Tax on intermediate product manufactured and sold during the Exemption period ending on 14.09.1991. These demands have been contested by the Company and stay has been granted by Appellate Authorities. Later, the Sponsoring Authority District Industries Center. Nagpur recommended to the Sales Tax Department that the exemption be granted to the Intermediate Products. However the Sales Tax Department. Nagpur rejected the recommendation and even disregarded the advice of 'Joint Commissioner Sales Tax (HQ) Mumbai to amend the Exemption Certificate. The Company has filed appeal against this rejection before the Sales Tax Tribunal. As stated earlier, the appeals are also pending before the Appellate Authorities. For one of the assessment years, the matter has been referred to the Higher Bench of the Tribunal. The Higher Bench has remanded the matter back to the Bench for proper order. The Company is hopeful to succeed in the Appeals. 5. CORPORATE GOVERNANCE IS ENCLOSED AS ANNEXURE TO THIS REPORT Reports on Corporate Governance and Management Discussions & Analysis are annexed and form part of this report. Also Certificate on Compliance of Corporate Governance issued by M/s D.S. Momaya & Co., Company Secretaries is annexed to the report. 6. PARTICULARS OF EMPLOYEES The particulars of Employees as required under Section 217(2A) of the Companies Act. 1956, is not applicable as the Company does not have any employee. 7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT The particulars as required under the provisions of Section 217(l)(e) of the Companies Act, 1956 in respect of conservation of energy and technology absorption are not required to be furnished considering the fact that the Company has sold its plants and not carrying on any manufacturing activity. 8. FOREIGN EXCHANGE EARNING AND OUTGO The Company has not earned any foreign exchange during the year under review. The Company has not spent any amount in foreign exchange. 9. DIRECTORS In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company. Mr. Damodarlal Nandlal Ladha retires by rotation and is eligible for reappointment. The Board recommends his reappointment. During the year, Mr. Santosh Kamankar, Mr. Vaibhav Malsane and Mr. Vikas Malekar were inducted as Additional Directors of the Company under Section 260 of the Companies Act, 1956 who hold office only upto the date of forthcoming Annual General Meeting. The Company has received notices from some of the shareholders of the Company proposing their candidature for the post of Directors. Your Directors commend their re-appointment as the Directors of the Company liable to retire by rotation. 10. DIRECTORS' RESPONSIBILITY STATEMENT Your Directors hereby declare: i) That in preparation of the annual accounts, the applicable accounting standards have been followed. ii) That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year under review and for the profit or loss of the Company for that period; iii) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records m accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv) That the directors had prepared the annual accounts on a going concern basis. 11. FIXED DEPOSITS: Your Company has not accepted Public Deposits within the meaning of Section 58A of the Companies Act, 1956. 12. AUDITORS AND AUDITORS1 REPORT The Auditors M/s. Bhuchar & Chandak, Chartered Accountants, have expressed their inability to continue as the Auditors of this company and their term expires at the end of this Annual General Meeting. Further, M/s. M G Shouche Chartered Accountants, have expressed their willingness to act as the Statutory Auditors of the company and Company has received a certificate from them stating that their re-appointment will be within the limit prescribed under Section 224(1B) of the Companies Act. The notes to the accounts referred to in the Auditors' Report are self explanatory and therefore, do not call for any further comments. 13. APPRECIATION: The Board of Directors wish to place on record their appreciation for the co-operation and support of the Company's Bankers, and all other intermediaries concerned with the Company's business. Your directors sincerely thank all members for supporting us during the difficult days. We look forward to your continued support and reiterate that we are determined to ensure that the plans are successfully implemented. BY ORDER OF THE BOARD Place: Mumbai. (V.D. SARDA) Date : 31st October. 2012 DIRECTOR Management Discussion And Analysis Overall review, industry Structure and Developments: The Company deals in the business of set-up of HDPE Pipes. PVC Pipes, PVC Fittings & Sprinkler fittings. As of now. India's Irrigation infrastructure is expanding by 1.8 Mha of irrigation potential with a public outlay of Rs 7000 crore per annum. Amidst competition from non-agricultural uses in households, industry and environment, supply of irrigation will have to keep pace with the targeted annual agricultural growth. India's irrigation sector is caught in a vicious cycle. Inadequate funding for O&M over years has resulted in the neglect of maintenance and upkeep of the irrigation system leading to deterioration in the quality of irrigation service. Performance: During the year under review, the company was not able to carry on any business activity. The land, building, plant and machinery, electricals, mould & dies etc of the two manufacturing units at Nagpur and Goa have been taken over / disposed off to pay off one time settlement amounts to Secured Creditors. Bank of India and MSFC. Therefore presently there is no production/sale and there are no employees. The company continues to make efforts to commence its operations once again by locating more fruitful avenues for the business hopeful of Growing the Business. Opportunities and Threat Threats: The challenges faced by irrigation sector in India continue to threat the company's plans of reentering the sector. Opportunities: With the quality management the company is in the process of finding various lucrative avenues for the growth of the business in the Irrigation business. Internal Control Systems: The company has internal control system commensurate to the operations of the company. Financial management and financial performance: During the year under review, there was a loss of Rs. 10.19 Lacs for the financial year. Industrial relations and human resources management: The company is not into core industrial activity. Further, there are no employees in the company at present. Caution: Statements which are based on and describe about management's expectations, estimates, projections, objectives, intentions and assumptions are forward looking statements. Words such as 'expects/' 'anticipates/' 'plans.'' 'believes/' 'scheduled.'' 'estimates' and variations of these words and similar expressions are intended to identify forward-looking statements, which include but are not limited to projections of revenues, earnings, segment performance, cash flows. Forward-looking statements are made pursuant to the Companies Act, 1956. securities laws and all other applicable acts, statues, rules and regulations as amended from time to time. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what was forecasted in forward-looking statements, expressed or implied. The Company does not undertake any obligation to update or publicity release any revisions to forward-looking statements to reflect events, circumstances or changes in expectations after the date of this report. BY ORDER OF THE BOARD Place: Mumbai Date : 31st October 2012 (V D Sarda) Director Regd. Office Address 32/33, Bombay Mutual Bldg.. Dr. D.N. Road, Fort, Mumbai - 400 001