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Modern Malleables Ltd.

BSE: 517336 Sector: Infrastructure
NSE: MODERNMAL ISIN Code: INE834C01028
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Modern Malleables Ltd. (MODERNMAL) - Director Report

Company director report

Directors

TO

THE SHAREHOLDERS

Your Directors have pleasure in presenting the 30th Annual Report of the Company forthe year ended 31st March 2014.

(Rs. in Lacs) (Rs. in Lacs)
31.03.2014 31.03.2013
Income 5862.31 7612.94
Profit/(Loss) before interest depreciation & Tax (44.38) 44.36
Finance Cost 0.32 4.57
Depreciation 49.89 38.15
Profit/(Loss) Before Tax (94.59) 1.64
Provision for Taxation - -
Profit/(Loss) After Tax (94.59) 1.64

OPERATIONS AND MANAGEMENT

Your Directors are glad to report that inspite of adverse situation of the overalleconomy and product demands your Company has been able to achieve a turnover to the tuneof Rs. 5862.31 lacs as compared to the previous year Rs. 7612.94 lacs. The revenue showthe net loss of Rs. 94.59 lacs compared to previous year profit of Rs. 1.64 lacs. Thebanks have not come forward to support the Company inspite of payments of their all dues.

The Company is engaged in Power sectors and diversified in Telecommunication works. Thecompany procures business from the utilities in India for Power & Telecom markets.Your Company is making all efforts to achieve its core manufacturing activities in orderto achieve its objectives. The R&D work has been able to achieve the recognition fromGovernment of India Ministry of Scientific and Industrial Research as a Governmentapproved In-house R&D Unit.

The members are aware that the Company had made a reference to Hon'ble Board forIndustrial and Financial Reconstruction (BIFR) under section 15(i) of the Sick Industries(Special Provision) Act 1985 (SICA). The BIFR had passed an order on 28th March 2001declaring the Company as Sick Industrial Company under section 3(i)(o) of the SickIndustries (Special Provision) Act 1985. The State Bank of India was appointed as theOperating Agent for preparation of Rehabilitation Scheme and the Draft RehabilitationScheme prepared by them was circulated to all concerned creditors for their comments andobjection(s). On the final hearing held on 8th April 2003 the Hon'ble Bench of BIFRapproved the Rehabilitation Scheme. Later a Draft Revised Modified Rehabilitation Schemewas also submitted by Operating Agents after the joint meeting of Sundry Creditors andsame was approved by the Hon'ble Bench of BIFR on 5th January 2009. Now a scheme has beensubmitted for extension of rehabilitation period for 3 years. The Hon'ble Bench of BIFRhas periodically reviewed the performance of the Company and appointed a Special Directoron the Board.

DIVIDEND

Your Directors regret that they are unable to recommend any dividend during thefinancial year ended 31st March 2014.

DIRECTORS

The Company had pursuant to the provisions of Clause 49 of the Listing Agreemententered into with Stock Exchanges appointed Mr. A.N. Choudhuri and Mr. M. K. Chowdhury asIndependent Directors of the Company.

As per Sec. 149 (4) of the Companies Act 2013 which come into effect from April 2014every listed public Company is required to have at least one third of the total number ofdirectors as Independent Directors. In accordance with the provisions of Section 149 ofthe Act these Directors are being appointed as Independent Directors to hold office asper their tenure of appointment.

Mr. A. N Choudhuri Director retires by rotation and being eligible has offered himselffor reappointment.

AUDITORS' REPORT

M/s. B. R. Khaitan & Co. Chartered Accountants Statutory Auditors of the Companyhold office till the conclusion of the ensuing Annual General Meeting and are eligible forre-appointment. The Company has received letter from M/s. Khaitan & Co. to the effectthat its re-appointment if made would be within the prescribed limits under Section143(3)(g) of the Companies Act 2013 and that they are not disqualified for reappointment.

COST AUDITORS

As per the order of the Central Government and in pursuance of Section 233B of theCompanies Act 1956 your Company had carried out an audit of the cost accounts of theCompany relating to company's products. The due date for filing of the Cost Audit Reportwith the Ministry of Corporate Affairs for the financial year ended 31s1 March2013 was September 27 2013 and the same was filed. The Board had upon the recommendationof the audit committee appointed M/s. AS & Associates ILA Apartment 102 BanerjeePara Kolkata - 700 031 Cost Accountants (being eligible for the appointment) to auditthe cost accounts of the Company relating to products as may be applicable for thefinancial year ending March 31 2015. In terms of section 148 of the Company's Act 2013read with the Rules thereof the remuneration payable to the Cost Auditors for the yearended March 312015 is being placed for ratification by the shareholders at theforthcoming Annual General Meeting.

SECRETARIAL AUDIT REPORT

As a measure of good corporate governance practice the Board of Directors of theCompany appointed Mr. Dhruba Charan Sahoo Practicing Company Secretary to conduct theSecretarial Audit. The Secretarial Audit Report for the financial year ended March 312014 is provided in the Annual Report.

The Secretarial Audit Report confirms that the Company has complied with all theapplicable provisions of the Companies Act 1956 and provisions of the Companies Act2013 notified vide Ministry of Corporate Affairs Gazette Notification No. S.O. 2754(E)dated September 12 2013 the Securities Contracts (Regulation) Act 1956 DepositoriesAct 1996 the Foreign Exchange Management Act 1999 to the extent applicable to OverseasDirect Investment (ODI) Foreign Direct Investment (FDI) and External CommercialBorrowings (ECB) all the Regulations and Guidelines of SEBI as applicable to the Companyincluding the Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992 the Securities and Exchange Board of India (Employee Stock OptionScheme and Employee Stock Purchase Scheme) Guidelines 1999 the Securities and ExchangeBoard of India (issue and Listing of Debt Securities) Regulations 2008 ListingAgreements with the Stock Exchanges and the Memorandum and Articles of Association of theCompany.

CORPORATE GOVERNANCE DISCLOSURE

Your Directors reaffirm their continued commitment to good corporate governancepractice. Your Company was in compliance with the provisions of Clause 49 of ListingAgreement with the Stock Exchanges relating to corporate governance.

A separate section on corporate governance together with a certificate from theCompany's Statutory Auditors forms a part of Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors hereby confirm :

i. In the preparation of the Annual Accounts applicable accounting standards has beenfollowed alongwith proper explanations relating to material departures if any.

ii. The accounting policies selected have been applied consistently and judgement andestimates are made that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of your Company as at 31st March 2014 and of the profit of yourCompany for the year ended on that date ;

iii. Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safe guarding theassets of your Company and for preventing and detecting frauds and other irregularities;

iv. The Annual Accounts of your Company have been prepared on a going concern basis.

INDUSTRIAL RELATION

Cordial relations were maintained with the employees at all levels during the periodunder review. Directors of your Company wish to place on record their appreciation fordedicated and sincere services rendered by the executives staff and workmen in theactivities of the Company

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act1956 read with the Companies (Particulars of Employees) Rule 1975 as amended is notapplicable to your Company because there was no employee getting more than the limitspecified in the above said sections of the Companies Act 1956

CONSERVATION OF ENERGEY AND TECHNOLOGY ABSORPTION

Information on conservation of energy and technology absorption required to bedisclosed 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) Rule 1988 is given inthe Annexures and forms part of this reports.

ACKNOWLEDGEMENT

The Board express its gratitude to the Company's customers shareholders variousGovernment Authorities and suppliers for their supports and co-operation.

For and on behalf of the Board

B. N. Jhunjhunwala

Chairman & Managing Director

Place : Kolkata

Date : 13th May 2014

ANNEXURE TO THE DIRECTORS' REPORT

DISCLOSURES OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO AS REQUIRED UNDER THE COMPANIES(DISCLOSURES OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULE 1988.

A. CONSERVATION OF ENERGY

Energy conservation is an on-going practice in the Company and wherever possible energyconservation measures have been implemented. The efforts to conserve and optimize the useof energy through improved operational methods and other means will continue.

B. TECHNOLOGY ABSORPTION

(a) Research and Development

Research and Development Facilities are being utilized for development of newtechnologies and better control on quality of input and production process. These effortswill lead to product diversification and attaining international specification on thenewly developed products.

(b) Benefits derived as a result of above Research and Development.

The product know how better quality assurance improved process development of newtechnologies have helped the Company in getting approval of its products in domestic andinternational markets.

(c) Future plans for Action

i) Future plan of action R&D Centre will be further strengthen and updated to carryout improvement in designs of the Company's product enabling it to compete with similarproduct of developed countries.

ii) The contract with M/s. Nuova Elettromeccanica SUD S. p.a of Italy for providingtechnical know how and based on that developed the new product.

(d) Expenditure on Research and Development

Revenue Rs. 19.60 lacs
Total Rs. 19.60 lacs

(e) Absorption Adoption and Innovation

Company has been instrumental in developing the designs the application &manufacture of accessories for the installation of optical fibre cables on overheadtelecom and power distribution lines on existing structures. These developments were doneby the Company's R&D under close interaction with IIT Bombay.

C. FOREIGN EXCHANGE EARNING AND OUTGO

(In lacs)
Foreign Exchange earning NIL
Foreign Exchange outgo 0.15 lacs

For and on behalf of the Board

B. N. Jhunjhunwala

Chairman & Managing Director

Place: Kolkata