Directors Report of Mukat Pipes Ltd.

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 27th Annual Report & Audited Accounts of your Company for the year ended 31st March 2014.

FINANCIAL HIGHLIGHTS

The salient features of the Company''s working are as under:-

Particulars Current year Previous Year (2013-14) (2012-13) (Rs. in lacs) (Rs. in lacs)

Sales (Including Excise) 498.32 642.82

Other Income from operations 54.58 46.92

Total 552.90 689.74

Profit/(Loss) before Interest, Deprecation & Tax 69.00 (48.24)

Less: Interest 28.88 29.33

Less: Depreciation 96.18 95.22

Profit/(Loss) before Tax (56.06) (172.79)

Taxation (Earlier Years) / Prior period Adjustment (Income/(Expenses): (12.35) (11.28)

Extra-ordinary/Exceptional Items (Expenditure) (74.97) -

Profit after Tax (143.39) (184.07)

Tax for Earlier year - (10.69)

Balance of Profit/(Loss) brought forward (1514.87) (1320.11)

Balance of Profit/(Loss) carried to Balance Sheet (1658.26) (1514.87)

FINANCIAL AND OPERATIONAL REVIEW

The Company successfully completed a Job Work order of 15152 MT of M/s. Welspun Corp Limited. An Extra-Ordinary expenditure was incurred on account of payment of Rs.74.97 Lacs to the Director General Foreign Trade, Mumbai on account of settlement of export obligation against advance Licences No. 0003030886, 0310061733 & 0310093657 under the policy of Ministry of Finance, Department of Revenue, Central Board of Excise & Customs, New Delhi for option to close cases of default in Export Obligation. The management of the Company made hard and sincere work and efforts to take out the operations of the Company above the break even point.

In addition to in-house orders, the Company has procured at sites two job work orders, 4500 MT for Kudgi (Karnataka) and 3650 MT for Chhabra (Rajasthan), from M/s. L & T. The Company is adopting diversification of its production through at site job works. These orders will definitely strengthen the viability of the production operations and promote the growth of the company in the coming years.

REHABILITATION OF THE COMPANY UNDER THE AEGIS OF BIFR:

The company is a sick industrial company duly declared sick by the Hon''ble Board for Industrial and Financial Reconstruction (BIFR) for its rehabilitation. The Hon''ble BIFR circulated the Draft Rehabilitation Scheme (DRS) vide its order dated 31.01.2014 for revival of the Company and heard "Objections/Suggestions" on DRS in the hearings held on 13.05.2014 and 04-06-2014 and has reserved its order for sanction of the Revival Scheme.

FUTURE PROSPECTS OF THE COMPANY:

There has been a prolonged slump in the Indian Economy. The GDP growth of Indian Economy was 4.7% and the Industrial output growth contracted to 1.4% (the worst since 1991) in the year 2013-2014. The moderate inflation, fiscal consolidation, comfortable level of foreign exchange reserves, positive policy changes and excitement of investment cycle through restoration of confidence of the investors for the over-hauling of the collapsing infrastructure of Indian Economy are early signs of economic recovery during the year 2014-2015. The production of the company is positively related with the growth of the infrastructure sector. The growth of Indian economy needs quick decisions and speedier implementation for the present pending and coming infrastructure projects. Our company has immense scope from this scenario.

DIVIDEND

In view of the accumulated losses, your Directors do not recommend any dividend for the year under review.

FIXED DEPOSITS

Your Company has neither accepted nor renewed any fixed deposits from the Public during the year under review.

BOARD OF DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, Mrs. Sandeep Kaur Ahluwalia Director retires by rotation and being eligible offers herself for re-appointment.

As per the provisions of Section 149, 150, 152 and other applicable provisions, if any, of the Companies Act, 2013 read with Schedule IV of the Companies Act, 2013 (including any statutory modification(s) or re-enactment thereof for the time being in force), the Board recommends appointment of Mr. Kamal Jain, who retires by rotation at the ensuing Annual General Meeting, Mr. Amrik Singh Grewal and Mr. Rajkumar Bali, whose offices are liable to determination by retirement of directors by rotation, as the Independent Directors of the Company for a period of 5 years from 01.10.2014. The above Directors being eligible have offered themselves for re-appointment and the Company has also received requisite notices in compliance with the provisions of Section 160 of the Companies Act, 2013, proposing Mr. Kamal Jain, Mr. Amrik Singh Grewal and Mr. Rajkumar Bali as the Independent Directors of the Company.

The Company has received declarations from all the proposed Independent Directors of the Company confirming that they meet with the criteria of independence as provided in Section 149(6) of the Companies Act, 2013.

AUDITORS

M/s. R.P. Bhambri & Co., Chartered Accountants, Patiala, (FRN:001312N) retire as Auditors of the Company at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. In terms of provisions of Section 139 of the Companies Act, 2013, read with Rules made thereunder, it was proposed to re-appoint Auditors for a term of three (3) years subject to ratification by Members at every Annual General Meeting of the Company. The Company has received written consent from the Auditors indicating their willingness to act as the Auditors of the Company and also an eligibility certificate to the effect that they fulfill the conditions of Appointment as mentioned in Rule 4 of the Companies (Audit and Auditors) Rules, 2014.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Your Directors confirm that;

i. In the preparation of the Annual Accounts for the Financial Year ended March 31,2014, the Applicable Accounting Standards have been followed along with the proper explanation relating to material departures;

ii. The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31/03/2014 and of the Profit and Loss Account for that period;

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in 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 have prepared the Accounts for the Financial Year ended March 31, 2014 on a ''going concern'' basis.

AUDIT QUALIFICATION

The Company has already sent credit/debit confirmation letters to parties.

The matter of books of accounts of Baramati Unit, which have already been sold under BIFR process, is being taken to procure the same.

The other qualifications/remarks of the Auditors, if any, have been duly clarified either in their Report or in the Notes to the Accounts and the same are self explanatory.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, is annexed as Annexure "A" to this report.

PARTICULARS OF EMPLOYEES AND INDUSTRIAL RELATIONS

The Company does not have any employee drawing salary in excess of the limits specified under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975, as amended

CORPORATE GOVERNANCE

Your Company is committed to follow the best of the Corporate Governance Practices and follows the same while conducting the affairs of the Company. A Report on Corporate Governance along-with a certificate from Auditors of the Company has been incorporated as a part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed analysis of the Company''s performance is mentioned in the Management Discussion and Analysis Report, which forms part of this Annual Report.

IMPLEMENTATION OF COMPANY ACT, 2013:

The company is taking steps and measures to implement the applicable provisions of the Company Act, 2013.

APPRECIATION

The Directors wish to express their gratitude for the support and co-operation extended to the Company by its investors, Government Agencies, Bankers and Financial Institutions during the year under review. Your Directors would also like to place on record their appreciation for the commitment, co-operation and contribution extended by all the employees of the Company.

FOR AND ON BEHALF OF THE BOARD, PLACE : RAJPURA DATE : 21-08-2014 (Rupinder Singh Ahluwalia) CHAIRMAN DIN:01239483

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Mar 31, 2013

To the Members,

The Directors have pleasure in presenting the 26th Annual Report & Audited Accounts of your Company for the year ended 31st March 2013.

FINANCIAL HIGHLIGHTS

The salient features of the Company''s working are as under:-

Particulars Current year Previous Year (2012-13) (2011-12) (Rs. in lacs) (Rs. in lacs) Sales (Including Excise) 642.82 1267.29

Other Income from operations 46.92 3.55

Total 689.74 127084

Profit/(Loss) before Interest, Deprecation & Tax (48.24) (153.09)

Less: Interest 29.33 27.07

Less: Depreciation 95.22 96.56

Profit/(Loss) before Tax (172.79) (276.72)

Taxation (Earlier Years) Prior period Adjustment (Income/(Expenses): (11.28) (31.14)

Extra-ordinary/Exceptional Items (Income) 2779.98

Profit after Tax (184.07) 2472.12

Balance of Profit/(Loss) brought forward (1320.11) (3792.24)

Balance of Profit/(Loss) carried to Balance Sheet (1504.18) (1320.12)

FINANCIAL AND OPERATIONAL REVIEW

The financial data for the current year should not be compared with the previous year (2011-2012) as there was an exceptional income of Rs. 2779.98 Lacs from the non business items. Although the current years figures are influenced by lower economic growth, persistent high inflation, global economic slow down and high fiscal deficit which have significantly impacted domestic industrial production, foreign investment inflows and overall market sentiments yet the current year results have a little improvement in the reduction of operational loss. The emerged industrial structure of our unit is financially challenging. The increasing cost and decreasing revenue has badly effected the profitability and cost competitiveness.

REHABILITATION OF THE COMPANY UNDER THE AEGIS OF BIFR:

The OA (SASF) has submitted the Revised DRS to the Hon''ble BIFR. The examination of the DRS by the office of the BIFR is still under process & thereafter It shall be circulated as per laid down procedure of BIFR.

FUTURE PROSPECTS OF THE COMPANY:

We can foresee the coming public private investments in the infrastructure sector to drive out the slowed down Indian economy. The structure of our industry has a positive co-relation with the growth of infrastructure. The channelization of scarce resources for the development activities carrying, storage circulation and distribution of scarce natural water to alternative uses is on the preferred agenda for the economic development of the country. From this, we have reason to deduce that our industry has a good future inspite of present slow down by domestic and global factors.

DIVIDEND

In view of the accumulated losses, your Directors do not recommend any dividend for the year under review.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits from the Public during the year under review.

BOARD OF DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, Mr. Rupinder Singh & Mr. Raj Kumar Bali, Directors retire by rotation and being eligible offer themselves for reappointment.

AUDITORS

M/s. R.P. Bhambhri & Co., Chartered Accountants, Patiala, retire as Auditors of the Company at the conclusion of the ensuing Annual General meeting and being eligible, offered themselves for reappointment.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Your Directors confirm that;

i. In the preparation of the Annual Accounts for the Financial Year ended March 31, 2013, the Applicable Accounting Standards have been followed along with the proper explanation relating to material departures;

ii. The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31/03/2013 and of the Profit and Loss Account for that period;

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in 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 Accounts for the Financial Year ended March 31, 2013 on a going concern'' basis.

AUDIT QUALIFICATION

The company has already sent credit/debit conformation letters to parties.

The matter of books of accounts of Baramati Unit, which have already been sold under BIFR process, is being taken to procure the same.

The other qualifications/remarks of the Auditors, if any, have been duly clarified either in their Report or in the Notes to the Accounts and the same are self explanatory.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, is annexed as Annexure "A" to this report.

PARTICULARS OF EMPLOYEES AND INDUSTRIAL RELATIONS

The Company does not have any employee drawing salary in excess of the limits specified under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975, as amended.

CORPORATE GOVERNANCE

Your Company is committed to follow the best of the Corporate Governance Practices and follows the same while conducting the affairs of the Company. A Report on Corporate Governance along-with a certificate from Auditors of the Company has been incorporated as a part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed analysis of the Company''s performance is mentioned in the Management Discussion and Analysis Report, which forms part of this Annual Report.

APPRECIATION

The Directors wish to express their gratitude for the support and co-operation extended to the Company by its investors, Government Agencies, Bankers and Financial Institutions during the year under review. Your Directors would also like to place on record their appreciation for the commitment, co-operation and contribution extended by all the employees of the Company.

For and on behalf of the Board,

Place : RAJPURA

Date : 21st October, 2013 RUPINDER SINGH AHLUWALIA

CHAIRMAN

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Mar 31, 2012

To the Members,

The Directors have pleasure in presenting the 25th Annual Report & Audited Accounts of your Company for the year ended 31st March 2012.

FINANCIAL HIGHLIGHTS

The salient features of the Company's working are as under:-

Particulars Current year Previous Year (2011-12) (2010-11) (Rs. in lacs) (Rs. in lacs)

Sales (Including Excise) 1267.29 1617.84

Other Income from operations 3.55 22.75

Total 1270.84 1640.58

Profit/(Loss) before Interest, Deprecation & Tax (153.09) (7.16)

Less: Interest 27.07 10.40

Less: Depreciation 96.56 177.74

Profit/(Loss) before Tax (276.72) (195.30)

Taxation (Earlier Years) Prior period Adjustment (Income/(Expenses): (31.14) (38.25)

Extra-ordinary/Exceptional Items (Income) 2779.98 0

Profit after Tax 2472.12 (233.55)

Balance of Profit/(Loss) brought forward (3792.24) (3558.69)

Balance of Profit/(Loss) carried to Balance Sheet (1320.12) (3792.24)

FINANCIAL AND OPERATIONAL REVIEW

During the year under review, sales have declined to Rs.1267.29 lacs as compared Rs.1617.84 lacs during the previous year, which has resulted in increase in loss before interest & depreciation to Rs 153.09 lacs from the loss of Rs.7.16 lacs during the previous year. However, the net loss after interest and depreciation has been Rs.276.72 lacs during the current year as against net loss of Rs.195.30 lacs during the previous year. The company has suffered losses during the year, because, there is an approx. 22% fall in sales turnover over the previous year.

Extra-ordinary & exceptional items of income during the year under review includes substantial waivers granted by Financial Institutions/Banks on account of settlement of their dues on the basis of negotiated one time settlement (OTS), profit on sale of Baramati unit, write back of some creditors/liabilities no longer payable etc., which have contributed a lot to improve net worth of the company and would ultimately help in its revival.

The Company caters to infrastructure sector and due to slow down in developmental expenditure in this sector; the sales of the Company have declined considerably due to lack of orders. This has been a challenging year. The operational business of your Company has also been adversely effected by increasing cost and falling revenue from the sale of the products of the company. The fall in GDP, especially in manufacturing and infrastructure sectors; recession in domestic & international markets has generated a cascading effect to squeeze the demand for the business of the Company.

SALE OF BARAMATI UNIT:

Baramati unit located in the state of Maharashtra was sold during the year under the directions of the Board for Industrial and Financial Reconstruction (BIFR) as one of the measures of rehabilitation of the Company. The sales proceeds were utilized in full and final settlement of the dues of Stressed Assets Stabilisation Fund (SASF) (Assignee of IDBI) and Assets Reconstruction Company of India Ltd. (ARCIL) (Assignee of OBC).

INDUCTION OF STRATEGIC LENDER FOR REVIVAL OF THE COMPANY:

During the year under review, the Company has inducted a Strategic Lender, namely, Silver Business Opportunities Pvt. Ltd. (for short, SBOPL) to make full and final settlement of the dues of Punjab National Bank (PNB) for the purpose of revival of the Company. The Strategic Lender has directly paid Rs.240 lacs to PNB in full and final settlement of their dues under the assignment agreement entered in to with them and stepped in the shoes of PNB, whereby PNB has assigned all their all underlying security, charges, interests, lien etc. in favour of the said Strategic Lender.

REHABILITATION OF THE COMPANY UNDER THE AEGIS OF BIFR:

The Company is under the process of revival under the aegis of the Board for Industrial and Financial Reconstruction (BIFR). The Company has submitted a fully tied up draft rehabilitation scheme duly revised and updated on various occasions to SASF, operating agency (OA) as appointed by the BIFR to examine and formulate a revival scheme for the company. The revival scheme is further under modifications and updation as per the directions of the Hon'ble BIFR and the same will be submitted to the OA in due course of time. The process for approval of the revival scheme is thus going on.

FUTURE PROSPECTS OF THE COMPANY:

Your Company is making all out efforts to procure the orders, whether the orders are for direct supply or job work /lease basis in order to utilize optimum capacity utilization of production and achieve better sales realization. With these efforts the order book position of the company has improved. The story of infrastructure development in the country is intact and Government spending in this sector has to catch up momentum for GDP growth. As the Govt. spending in this sector increases, the order inflow to the company shall also increase. Keeping these factors in view, the future prospects and outlook of the Company appear to be promising and bright.

DIVIDEND

In view of the accumulated losses, your Directors do not recommend any dividend for the year under review.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits from the Public during the year under review.

BOARD OF DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, Mrs. Mandeep Ahluwalia Pahwa & Mr. Amrik Singh Grewal, Directors retire by rotation and being eligible offer themselves for reappointment.

Mrs. Sandeep Kaur Ahluwalia, wife of late Rajinder Singh Ahluwalia (the Chief Promoter of the Company), has been appointed as whole time director of the company with the designation as Director (Administration) for a period of 3 years we.f. 1st October, 2011. Necessary application has been made to the Central Government for approval for the salary and perks of Mrs. Sandeep Kaur Ahluwalia.

AUDITORS

M/s. R.P. Bhambri & Co., Chartered Accountants, Patiala, retire as Auditors of the Company at the conclusion of the ensuing Annual General meeting and being eligible, offered themselves for reappointment.

DIRECTORS' RESPONSIBILITY STATEMENT:

Your Directors confirm that;

i. In the preparation of the Annual Accounts for the Financial Year ended March 31, 2012, the Applicable Accounting Standards have been followed along with the proper explanation relating to material departures;

ii. The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31/03/2012 and of the Profit and Loss Account for that period;

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in 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 Accounts for the Financial Year ended March 31, 2012 on a `going concern' basis.

AUDIT QUALIFICATION

The company has already sent credit/debit conformation letters to parties.

The matter of books of accounts of Baramati Unit, which have already been sold under BIFR process, is being taken to procure the same.

The other qualifications/remarks of the Auditors, if any, have been duly clarified either in their Report or in the Notes to the Accounts and the same are self explanatory.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, is annexed as Annexure "A” to this report.

PARTICULARS OF EMPLOYEES AND INDUSTRIAL RELATIONS

The Company does not have any employee drawing salary in excess of the limits specified under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975, as amended

REVOCATION OF TRADING IN EQUITY SHARES OF THE COMPANY

At the 24th AGM, the Chairman assured about the Revocation of the Suspension of Trading in Equity Shares of the Company. We have the pleasure to inform you that the suspension had already been revoked w.e.f. 26th April, 2012.

CORPORATE GOVERNANCE

Your Company is committed to follow the best of the Corporate Governance Practices and follows the same while conducting the affairs of the Company. A Report on Corporate Governance along-with a certificate from Auditors of the Company has been incorporated as a part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed analysis of the Company's performance is mentioned in the Management Discussion and Analysis Report, which forms part of this Annual Report.

APPRECIATION

The Directors wish to express their gratitude for the support and co-operation extended to the Company by its investors, Government Agencies, Bankers and Financial Institutions during the year under review. Your Directors would also like to place on record their appreciation for the commitment, co-operation and contribution extended by all the employees of the Company.

For and on behalf of the Board,

Place : RAJPURA

Date : 20-10-2012

Rupinder Singh Ahluwalia)

CHAIRMAN