mukat pipes ltd share price Directors report


Dear Members,

Your Directors present their 36 Annual Report together with the Audited Statement of Accounts of

your Company for the Financial Year ended 31 March, 2023.

FINANCIAL RESULTS:

Particulars Current year Previous year
(2022-23) (2021-22)
(Rs. in Lacs) (Rs. in Lacs)
Sales (Including Excise) 330.79 612.17
Other Income from operations 41.62 42.86
Total 372.41 655.03
Profit/(Loss) before Interest, Depreciation & Tax 14.78 15.80
Less: Interest 14.39 14.15
Less: Depreciation 12.88 13.15
Profit/(Loss) before Tax (12.49) (11.50)
NIL NIL
Taxation (Earlier Years) Prior period Adjustment
(Income/(Expenses):
Extra-ordinary/Exceptional Items NIL NIL
Income/ (Expenditure)
Profit after Tax (12.49) (11.50)
Tax for Earlier year/Others (14.47) NIL
Balance of Profit/(Loss) brought forward (1628.86) (1617.36)
Balance of Profit/(Loss) carried to Balance Sheet (1655.83) (1628.86)

The Company does not have working capital due to losses over a period of time. Therefore, the company is doing job work. The total production during the year is 2294.311 MT. Out of this 1198.063 is by way of Job work. The profitability from the operation of job work is comparatively low. The risk management of borrowing working capital funds is very high and has an implication of financial cost. This decreases the cost competitiveness. This is a point of appreciation for the company that it has been doing operations just below the breakeven point and keeping the company as a going concern.

DIVIDEND:

In view of losses during the year and accumulated losses, the Board decided not to recommend any dividend for the year underreview.

CAPITAL AND RESERVES:

During the year under review, your Company did not transfer any amount to the Reserves. The company has not issued and type of equity during the year.

OPERATION:

The annual production of the Company is 2294.311 MT. Out of this 1198.063 is by way of Job work. The Company is operating at just below breakeven point.

FUTURE OUTLOOK:

The demand for all types of steel products has increased as the global markets gradually recovered from COVID-19 Pandemic. Steel consumption in developed countries decreased as a result of supply chain issues in industrial sector, rising inflationary pressure and the Russia-Ukraine crisis situation. The Global economic scenario is not settled and it is uncertain due to Ukrain Russia War. The Investors of steel market are expecting fall of prices and postponing their investment decisions. The per capita consumption of steel is low in India. The future of the steel market is positive. The Large dia M.S. Pipes sector has a promising future for the growth of this sector. The steel pipe sector is going to receive new & sufficient orders for its growth.

The Central government has planned to make considerable investments in infrastructure such as roads, railroads and defence manufacturing which is expected drive demand for steel in India.

ANNUAL RETURN:

The Company has placed a copy of annual return on its website at https://mukatpipes.com/index.php/information/annual-return

BOARD OF DIRECTORS AND KEY MANAGERIAL:

The Board of Directors, along with its committees provides leadership and guidance to the Companys Management and directors, supervises and controls the activities of the Company. The size of the Company commensurate with its size and business operations. The Board strength is six Directors comprising two Executive Directors, one Non-Executive Director and three Independent Directors.

Composition of the Board of the Company:

Name of the Director(s) Category
Mr. Rupinder Singh Chairman (Executive Director)
Mrs. Sandeep Kaur Ahluwalia Whole Time Director

Mrs. Mandeep Ahluwalia Pahwa

Non-Executive Director

Mr. Kamal Jain

Independent Director
Independent Director

Mr. Amrik Singh Grewal

Mr. Atul Rajkumar Bali Independent Director

DETAILS ABOUT DIRECTORS AND KMPs WHO WERE APPOINTED/ RESIGNED DURING THE FINANCIAL YEAR:

There was no change in the KMPs during the period under review.

Mrs. Sandeep Kaur Ahluwalia (DIN: 01355454) was re-appointed as Whole Time Director (WTD) of the Company on 25/09/2020 and her tenure is upto 30.09.2023. Pursuant to the recommendation of Audit Committee and Nomination & Remuneration Committee and subject to approval of members the Board at its meeting held on 18/05/2023 approved the re-appointment of and payment of remuneration to Mrs. Sandeep Kaur Ahluwalia (DIN: 01355454) as WTD for a further period of three (3) years w.e.f. 01.10.2023 till 30.09.2026. Accordingly, approval of members is being sought for her re-appointment at the ensuing AGM by way of a Special Resolution.

Further, taking into consideration the expertise and efforts in running the company, and pursuant to the recommendation of Audit Committee and Nomination & Remuneration Committee and subject to approval of members, the Board at its meeting held on 18/05/2023 approved the appointment of and payment of Remuneration to Mr. Rupinder Singh (DIN: 01239483), Chairman of the Company as WTD to be designated as Chairman cum Executive Director for a period of three (3) years w.e.f. 01.07.2023 till 30.06.2026. Accordingly, approval of members is being sought for his appointment at the ensuing AGM by way of a Special Resolution.

DIRECTOR RETIRING BY ROTATION:

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.

NUMBER OF MEETINGS OF THE BOARD:

During the year, 4 (FOUR) Board Meetings were duly convened and held. These were held on 17-05-2022, 10-08-2022, 10-11-2022 & 09-02-2023. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

Names of the Directors Number of Board Meetings Attended
Mr. Rupinder Singh 4

Mrs. Sandeep Kaur Ahluwalia

4
4

Mrs. Mandeep Ahluwalia Pahwa

Mr. Kamal Jain 4
Mr. Amrik Singh Grewal 4
Mr. Atul Rajkumar Bali 4

COMMITTEES

I) Audit Committee:

Being a listed Company, the Company had already constituted its Audit Committee consisting of Mr. Kamal Jain (DIN: 02229015), Mr. Amrik Singh Grewal(DIN: 01239180) and Mr. Rupinder Singh (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 4
Mr. Kamal Jain 4

II) Nomination and Remuneration Committee:

Being a listed Company, the Company had already constituted its Nomination and Remuneration Committee consisting of Mr. Kamal Jain (DIN: 02229015), Mr. Amrik Singh Grewal (DIN: 01239180) and Mr. Atul Rajkumar Bali (DIN: of the Company.

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. Atul RajKumar Bali 1
Mr. Kamal Jain 1

III) Stake holders Relationship Committee:

Being a listed Company, the Company had already constituted its Stakeholders Relationship Committee consisting of Mr. Kamal Jain (DIN: 02229015), Mr. Amrik Singh Grewal (DIN: 01239180) and Mr. Rupinder Singh (DIN: 01239483).

During the year under review one (1) Meeting was held of Stakeholder Relationship Committee.

Names Number of Stakeholder Relationship Committee.
Meetings Attended
Mr. Amrik Singh Grewal 1
Mr. Kamal Jain 1
Mr. Rupinder Singh 1

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed that:

(a) In the preparation of the annual financial statements for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) 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 and of the loss of the Company for that period;

(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the Company and that such internal financial controls are adequate and were operating effectively; and

(f) The directors have devised proper systems to ensure compliance with the provisions of 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 of independence pursuant to Section 149(6) of the Companies Act, 2013 and Regulation 16(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:

The familiarization program seeks to update the Directors on the roles, responsibilities, rights and duties under the Act and other statutes. The Company has framed a policy on familiarization program for Independent Directors.

COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors and Senior Management Personnel and their remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of section 178 relating to the remuneration for the Directors, key managerial personnel, and other employees. As required by Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the prescribed details are annexed as "Annexure 1"to this report.

INFORMATION IN TERMS OF RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:

During the year under review, no employee was employed who was in receipt of aggregate remuneration exceeding Rupees One Crore and Two Lakh for the year or exceeding Rupees Eight 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 the employees of the Company and other details in terms of Sub-Section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this Report and is annexed as "Annexure 2" to this Report.

ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE:

Pursuant to the provisions of the Companies Act, 2013 the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration committee by filling a structured questionnaire.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

During the year, the Company has not given any loans or guarantees or has made any investments 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 are strictly done on arms length basis and in the ordinary course of business. The Company presents full details of transactions of all related party before the Audit Committee, specifying the nature, value and terms & conditions of the transactions. Transactions with related parties are conducted in a transparent manner with the interest of the Company and stakeholders at utmost priority.

The details of material transaction with related party in Form AOC-2 is annexed herewith as

"Annexure 3"

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 were implemented across the organization. The appointment of internal auditor is done as per norms of Company Act, 2013.The Audit Reports of the internal auditor on quarterly basis has been evaluated and assessed. The Audit Committee reviews adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations on regular basis. The audit function maintains its independence and objectivity while carrying out assignments. It evaluates on a continuous basis, the adequacy and effectiveness of internal control mechanism. The function also proactively recommends improvement in policies and processes, suggests streamlining of controls against various risks. Your Company has laid down set of standards, processes and structure, which enables it to implement internal financial control across the Company and ensure that the same are adequate and operating effectively.

CORPORATE GOVERNANCE:

Pursuant to Regulation 15(2) of the SEBI (Listing Obligations and Disclosure Requirements) 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 the Company, as the Companys Paid up share capital & Net worth is below the limits specified.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

No material changes have occurred between the end of the financial year of the company to 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 8 of the Companies (Accounts) Rules,2014, is annexed as "Annexure 4" to this report.

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY:

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 mitigate various risks to key business objectives. Major risks identified by the businesses and functions are deteriorating profitability, low scale production and sluggish demand for the products of the company. The company is continuously making efforts to address the said risk.

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:

The Company has not developed and implemented any Corporate Social Responsibility Policy pursuant to the Provisions of Section 135 of the Companies Act 2013 and relevant Rules framed there under as the said provisions were not applicable to the Company as the Company had incurred losses during the relevant period.

PUBLIC DEPOSITS:

During the year under review, the Company has not accepted any deposit pursuant to Section 73 and Section 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

STATUTORY AUDITORS AND STATUTORY AUDIT REPORT:

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. Gurpreet Kaur & Associates, Chartered Accountants, Patiala (FRN:nd015358N) were appointed as Statutory Auditors of the Company for a 2 term of 5 years i.e. from the conclusion of 35 AGM until the conclusion of 40 AGM.

RESERVATION AND QUALIFICATION ON AUDITOR REPORT:

The qualification/ remarks made by the Statutory Auditors in their Report under the head 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 the Auditor.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS PURSUANT TO SECTION 143(12) OF THE COMPANIESACT, 2013:

During the year under review there were no incidences of fraud reported by Auditors.

SECRETARIAL AUDITOR AND 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 has appointed Ms. Yogita of M/s. Yogita & Associates, Company Secretaries, Rajpura Town, Patiala to undertake the Secretarial Audit of the Company. The Secretarial Audit Report in Form No. MR-3 is annexed as "Annexure 5" to this report.

EXPLANATION ON REMARKS OR DISCLAIMER MADE BY SECRETARIAL AUDITOR IN HER REPORT :

Auditors qualifications, reservations or adverse remarks in the Secretarial Audit Report Directors comments on qualifications, reservations or adverse remarks of the Secretarial Auditor

The Statutory Chartered Accountant does not have Peer Review Certificate.

The Statutory Chartered Accountant of the Company is in the process of taking Peer Review Certificate from the ICAI.

The company has yet to transfer Rs. 11.41 Lacs on account of unpaid dividend to Investor Education and Protection Fund under section 124 of the Company Act, 2013. Out of 11.41 Lacs an amount of Rs. 8.80 Lacs has already been transferred to deaf account of RBI by Punjab National Bank. An amount of Rs. 333450/- is outstanding in Dividend Account No. 111511001114 with Dena Bank Branch (DP-ID IN 300386), Capital Market Branch, 17, Horniman Circle, Mumbai -23 (Now Bank of Baroda). Inspite of reminders Investor Education Protection Fund (IEPF) Authorities has not responded.

SECRETARIAL STANDARDS:

The Company has complied with the applicable Secretarial Standards viz. SS-1 and SS-2during the year.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has adopted the code of conduct for employees and directors for the highest degree of transparency, integrity, accountability and corporate social responsibility. Any actual or potential violation of the Code would be a matter of serious concern for the Company. The Company also has Whistle Blower Policy to deal with instance of fraud and mismanagement, if any.

Employees of the Company are encouraged to use guidance provided in the Policy for reporting all allegations of suspected improper activities.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report as required under Companies Act, 2013, Regulation 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 in this Annual Report for the year under review and is annexed as "Annexure 6" to this report.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:

The Company had filed two appeals in suit of M/s. Modern Construction Co. v/s Mukat Pipes Limited against the Order passed by the Civil Court, Gujarat in the Honble Gujarat High Court. Both the appeals are pending for decision. The company has filed appeal against order of Commissioner

Excise before CSTAT and the same is pending for decision. The Income Tax department has passed an order to re-assess the return of income for the A.Y. 2012-2013. The company has applied rectification proceedings in the matter which is still under process.

MAINTENANCE OF COST RECORDS:

During the year under review the Company was not required to maintain the Cost records as specified by the Central Government under Section 148 of the Companies Act, 2013.

COMPANYS POLICY FOR PREVENTION OF SEXUAL HARASSMENT:

The Company has zero tolerance for sexual harassment at workplace and accordingly due care is always taken in respect of prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual harassment of Women at Workplace (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 of the said Act including constitution of Internal Complaints Committee as referred in the said Act.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016:

During the year under review there was no application made or pending proceeding under the Insolvency and Bankruptcy Code, 2016.

DETAILS OF THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS (FI) DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS:

During the year under review the company has not taken any loan from the Bank or FI, hence there was no such valuation done.

APPRECIATION

Your Directors place on record their appreciation for the co-operation of all the Staff and Officers, Shareholders of the Company, Bankers and look forward to their continued co-operation in future.