| 1. Background:
MPF Systems Limited (previously known as Mather and Platt Fire Systems
Limited) ('the Company') was formed as a result of a demerger of Mather
and Platt (India) Limited on 18 April 2001. Consequently the business
of fire systems was transferred to the Company. Pursuant to the Share
Purchase Agreement dated July 01, 2014, the Company has taken on record
the transfer of 1,887,697 equity shares of Rs. 10 each held by Wilo Se
(the erstwhile holding company), representing 55.48% of the issued,
subscribed and paid-up equity share capital of the Company, to Royal
Nirman Private Limited; resulting in change of control in the Company.
The Company is primarily engaged in the business of design,
development, installation and servicing of Fire Securities systems. The
Company has its corporate office at Chinchwad (E), Pune. Currently
there are no commercial operations carried out by the Company.
2. Going concern
The Company has incurred loss during the year and the total accumulated
losses at that date amounting to INR 34,542,585 indicate a complete
erosion in the Company's net worth as of 31 December 2014. However
management believes that the Company will be able to continue
operations on a going concern basis and meet all its liabilities as
they fall due for payment in the foreseeable future on the basis of the
financial support from the Holding Company, Royal Nirman Private
Limited. The Holding company has agreed to provide necessary financial
support to meet the liabilities of the Company till 31 December 2015.
In this regard, the Company has received a letter dated 27 February
2015 from the Parent Company confirming that they will provide the
necessary financial support till 31 December 2015.
Accordingly, these financial statements do not include any adjustments
relating to the recoverability and classification of the carrying
amount of assets or the amount and classification of liabilities that
might result should the Company be unable to continue as a going
concern.
3. Rights, preferences and restrictions attached to equity shares
The Company has only one class of shares referred to as equity shares
having a par value of Rs. 10. Each holder of equity shares is entitled
to one vote per share. Accordingly, all equity shares rank equally with
regards to dividends and shares in the Company's residual assets. On
winding up of the Company, the holders of equity shares will be
entitled to receive the residual assets of the Company after
distribution of all preferential amounts in proportion to the number of
equity shares held.
Sub Note : Pursuant to the resolution passed by the Board of directors
in their meeting held on October 26, 2013, the Company had sold its
intangible fixed assets comprising copyrights, knowhow, qualification
rights and trademarks pertaining to Fire and Security Engineering
Division of Mather and Platt (India) Limited which were initially
transferred to the Company pursuant to Scheme of Arrangement with
Mather and Platt (India) Limited as approved by the Honorable High
Court of Bombay vide its order dated April 18, 2001. These intangible
assets were at Nil value in the books.
The consideration for sale of these intangible assets is based on
valuation made by an independent valuer.
4. Contingent liabilities
a) Claims against the Company not
acknowledged as debts 3,778,847 3,778,847
b) Sales tax and Works Contract tax* 7,432,727 7,432,727
11,211,574 11,211,574
*Excluding Interest leviable, if any, on Conclusion of the matter.
5. Creditors scheme of arrangement
The Company's Scheme of Arrangement with its Unsecured creditors had
been approved by the Honorable High Court of Judicature at Bombay vide
Order dated 30th April, 2007. Unsecured Creditors had exercised the
options for settlement of their claims and the Company has disbursed
all the installments to creditors covered under the scheme. However,
certain cheques amounting to Rs. 860,233 had been returned back and
balance equivalent to cheques returned back had been maintained in a
bank account with a scheduled bank. Reduction of principal value of
liabilities arising out of the compromise/ arrangement under the scheme
credited to Capital Reserve, had been set off against the loss in the
previous years, in accordance with accounting treatment prescribed
under clause 5 of the Scheme of Arrangement as approved by the Hon'ble
High Court of Judicature at Bombay vide Order dated 30 April 2007.
6. Compliance with Micro, Small and Medium Enterprises Development
Act, 2006 ('the MSMED Act')
The Company has not received any intimation from its suppliers
regarding their status under the Micro, Small and Medium Enterprises
Development Act, 2006 and hence disclosures, if any relating to amounts
unpaid as at the period end together with interest paid / payable as
required under the Act are not applicable.
7. Segmental Information
The Company is primarily engaged in the business of design,
development, manufacture, installation of fire securities systems. As
such, there is no separate reportable segment as per the Accounting
Standard - 17 "Segment Reporting". All the activities of the Company
are carried out in India.
8. Deferred taxation
As at the year end, the Company has assessed the realisability of the
deferred tax assets on carry forward loss for the year and has
determined that there is no virtual certainty supported by convincing
evidence that sufficient future taxable income will be available
against which such deferred tax asset can be realized and therefore it
has not created any deferred tax asset.
9. Disclosure of related parties / related party transactions:
a) List of related parties where control exists
Sr. No. Name of the Related Party Relationship
1 WILO SE , Germany * Holding Company - upto 30
June 2014
2 Royal Nirman private limited* Holding Company - from 1
July 2014
* The holding company holds more than one-half in nominal value of the
equity share capital.
b) Notes to related party transactions:
(i) Orders, invoicing and other matters relating to the operations of
the Company, are being presently done / dealt with in the name of
Mather and Platt (India) Ltd. wherefrom the Company demerged, pending
completion of various formalities in this regard.
(ii) The Company had no staff, and the operations of the Company were
supported by Wilo Mather and Platt Pumps Private Limited (previously
known as Mather and Platt Pumps Limited) upto 30th June 2014, free of
charge.
10. Company Secretary
The financial statements have not been authenticated by a whole time
secretary as required under Section 215 (1) of the Companies Act, 1956,
as the Company has not appointed a whole time Company Secretary.
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