To the Members
Your Directors are pleased to present the 42nd Annual Report and Audited Accounts ofthe Company for the financial year ended March 31 2016.
1. Financial highlights
The summarised financial results for the year ended March 31 2016 and for the previousyear ended March 31 2015 are as follows: -
|Particulars ||2015-16 ||2014-15 |
|Revenue from Operations / Net Sales ||26930.35 ||23194.87 |
|Other Income ||243.09 ||199.81 |
|Profit before interest depreciation and tax ||886.24 ||421.64 |
|Profit before exceptional item and tax ||419.23 ||14.52 |
|Profit before tax ||419.23 ||14.52 |
|Tax expense || || |
|-Current Tax ||94.00 ||7.58 |
|-Deferred Tax ||128.34 ||(8.84) |
|Profit after tax ||196.88 ||15.78 |
|EPS (face value of Rs.10/- each) || || |
|-Basic & Diluted ||1.77 ||0.14 |
The Company achieved gross turnover including other income of Rs 27173.44 Lacs andposted net profit of Rs.196.88 Lacs for the financial year ended on 31st March 2016 asagainst gross turnover including other income of Rs. 23394.68 Lacs and net profit of Rs.15.78 Lacs in the previous financial year.
2. State of company affairs and future outlook
In the current financial year the company continues to focus on growth of its brandedbusiness and is confident that the consumer business will continue its steady growthwhich is in line with our medium to long term strategy: The flagship brand where thecompany is seeing a growing leadership position is:
Oleev - olive oils and healthy oils
Other than that we have developed the following value added products:
Rizolo - India's Finest - Rice Bran Oil
Miller - Canola Oil with low absorption technology
Olivana Wellness - massage oils.
Whilst Rizolo and Miller have a direct fit in the edible oil stable Olivana Wellnessis the company's foray into the personal care segment of FMCG. With the launch of the newbrands of packaged edible oils the focus is slowly tilting more towards enhancing valuethrough well branded consumer focused products. The Company is also creating niche brandsin edible oils and blended oils which have various health benefits and thereby commandinga premium in the marketplace.
By increasing its foothold across all major distribution platforms like wholesalemodern retail ecommerce etc. the Company is poised to strengthen its brand presenceacross the country. The Company has launched its largest advertisement campaign until nowto strengthen its brand presence and improving brand recall.
In the years to come Modi Naturals visualizes itself as a major contributor to theIndian FMCG sector and primarily the branded edible oil industry
3. Change in nature of business
The Company is engaged in the business of manufacturing and marketing of Edible oil andDe-oiled cake. There was no change in the nature of business of your company during theyear.
No dividend is proposed for the financial year ended March 31 2016.
5. Transfer to reserves
No amount is proposed to be transferred to reserves.
6. Change in Share Capital
Your Company has neither issued any equity shares with differential rights nor grantedany employees stock options / sweat equity shares to the directors officers or employeesof the Company during the year.
7. Deposits from public
During the year your Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014 and there is no outstanding amount of deposits at the end of thefinancial year.
8. Extract of Annual Return
As provided under Sections 134(3) (a) and 92(3) of the Companies Act 2013 and Rule12(1) of the Companies (Management and Administration) Rules 2014 the extract of annualReturn in Form MGT-9 is given in "Annexure-1" which forms part of thisreport.
9. Number of Board Meetings
During the financial year ended March 312016 the Company had ten (10) Board meetingson April 10 2015 May 30 2015 August 12 2015 September 2 2015 October 15 2015November 14 2015 November 30 2015 January 27 2016 February 3 2016 and March 302016 respectively.
10. Particulars of loans guarantees and investments
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Note no. 14 and 19 to the FinancialStatements.
11. Particulars of contracts or arrangements with related parties
All related party transactions that were entered into during the year were on arm'slength basis and were in the ordinary course of the business. There are no materiallysignificant related party transactions made by the Company with Promoters Key ManagerialPersonnel or other designated persons which may have potential conflict with interest ofthe Company at large. The details of related party transactions are provided in Note no.34 to the Financial Statements.
During the year pursuant to Section 177 of the Companies Act 2013 and erstwhileClause 49 of the Listing Agreement and/ or Regulation 23 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 all related party transactions were placedbefore the Audit Committee and also for the Board approval wherever required.
12. Auditors and Auditors' Report Statutory Auditors'
Pursuant to the provisions of Section 139 of the Act and the rules framed there underMessrs K. K. Jain & Co. Chartered Accountants were appointed as statutory auditorsof the Company from the conclusion of the 40th annual general meeting (AGM) of the Companyheld on August 19 2014 till the conclusion of the 43rd Annual General Meeting subject toratification of their appointment at every Annual General Meeting. In terms of the firstproviso to Section 139 of the Companies Act 2013 the appointment of the auditors shallbe placed for ratification at every Annual General Meeting. Accordingly the appointmentof Messrs K. K. Jain & Co Chartered Accountants as statutory auditors of theCompany is placed for ratification by the shareholders at the 42nd Annual General Meetingof the Company. In this regard the Company has received a certificate from the auditorsto the effect that if they are reappointed it would be in accordance with the provisionsof Section 141 of the Companies Act 2013.
There are no qualifications made by the Auditors in their Report which requires anyexplanation from the Board of Directors of the Company The Notes to Accounts referred toin the Auditors' Report are self-explanatory and d o not call for any further comments.
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 hasappointed M/s Deepak Bansal & Associates Company Secretaries to undertake theSecretarial Audit of the Company The Secretarial Audit Report is annexed herewith as "Annexure2".
The said Secretarial Audit Report has no qualification reservation or adverse remarksand it is self-explanatory: Thus there is no need to give any further explanation orcomment by the Board.
Based on the Audit Committee's recommendations at its meeting held on August 8 2016and subject to approval by the Central Government the Board recommends the appointment ofM/s. Manisha & Associates as the Cost Auditors of the Company for the year ended onMarch 2016-17 at a remuneration of Rs. 60000/- plus traveling lodging and boardingexpenses. The remunerationpayable to the Cost Auditors for the financial year 2016-17requires ratification by the members at the ensuing annual general meeting.
The cost audit report for the financial year 2014-15 has been filed to the CentralGovernment vide SRN S42517854 dated 28.10.2015. The Cost Audit Report for the financialyear 2015-16 prescribed under Cost Audit Rules 2014 is due to be filed with MCA on orbefore 30.09.2016 (being within 180 days from the end of reporting year).
13. Material changes affecting the financial position of the company
There are no material changes affecting the financial position of the Company.
14. Conservation of energy technology absorption foreign exchange earnings and outgo
The Particulars with regard to Conservation of Energy Technology Absorption andForeign Exchange Earnings & Outgo are given below:
A. Conservation of energy:
i) Steps taken or impact on conservation of energy:
ii) The steps taken by the company for utilizing alternate sources of energy
Your Company has taken adequate measures to ensure optimum use of all equipments so asto conserve energy:
iii) Capital Investment on energy conservation equipments: Nil
B. Technology absorption adaption and innovation:
The company strives continuously to upgrade its technology adopted in all itsoperations.
C. Foreign exchange earnings and outgo
a) Earnings - Nil
b) Outgo - Rs. 486105
16. Details of subsidiary joint venture or associates
The Company does not have any Subsidiary/Joint Venture/Associate Company
17. Risk management
The Audit Committee has additional oversight in the area of financial risks andcontrols. Major risks identified by the businesses and functions are systematicallyaddressed through mitigating actions on a continuing basis.
18. Directors and key managerial personnel (KMP)
Ms. Purva Satija Company Secretary and Compliance Officer of the Company resigned on30.04.2015. On the basis of recommendation of Nomination and Remuneration Committee theBoard of Directors at its meeting held on 15th October 2015 has appointed to Mr. AnkitAgarwal as Company Secretary from 15th October 2015 in terms of pro vision of theCompanies Act 2013 and rules made thereunder.
Pursuant to Section 152 and other applicable provisions if any of the Companies Act2013 Mr. Ani l Modi Director of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment in accordance withthe provisions of the said Act.
The Board of Directors in their meeting held on 08th August 2016 has recommended tore-appoint Mr. Akshay Modi as Executive Non-Independent Director within the meaning ofSection 196 197 and 203 of the Companies Act 2013 read with Schedule IV thereto andRules made there under for a further period of 3 (three) years from December 15 2016commencing immediately after the expiry of his current tenure on December 14 2016subject to retirement by rotation.
The Nomination and Remuneration Committee of the Board in its meeting held on 08thAugust 2016 has considered and recommended the aforesaid re-appointments of Mr. Anil Modiand Mr. Akshay Modi to the Board for thei r approval.
The Board has considered that the presence of Mr. Anil Modi and Mr. Akshay Modi asDirectors on the Board would be of immense benefit to the Company and has decided torecommend their reappointment for the approval of members of the Company at the ensuingannual general meeting of the company.
A brief resume of the Directors being appointed/ re-appointed are furnished in theexplanatory statement to the notice of the ensuing AGM.
19. Details of significant & material orders passed by the regulators or courts ortribunal
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
20. Internal financial controls
Your Company has a proper and adequate system of internal financial controls. Thisensures that all assets are safeguarded and protected against loss from unauthorised useor disposition and the transactions are authorised recorded and reported correctly. Theinternal financial control system has been designed to ensure that the financial and otherrecords are reliable for preparing financial and other statements and for maintainingaccountability of assets.
Audit Committee periodically reviews the performance of internal audit function anddiscusses internal audit reports with the Internal Auditor
Neither the Statutory Auditors nor the Secretarial Auditors have brought to the noticeof the Audit Committee or the Board of Directors or the Central Government the occurrenceor brewing of any fraud in the Company.
22. Code of conduct for regulating and reporting trading by insiders and for fairdisclosure 2015
Your Company has adopted the "Code of Conduct for regulating & reportingtrading by insiders and for fair disclosure 2015" which inter alia prohibitspurchase or sale of securities of the Company by Directors employees and other connectedpersons while in possession of unpublished price sensitive information in relation to theCompany.
23. Disclosure of ratio of remuneration of directors and key managerial personnel
As required under Section 197(12) read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the details of the ratio of theremuneration of each director to the median employee's remuneration and such other detailsas prescribed therein are given in "Annexure-3 which is attached hereto andforms a part of the Directors' Report.
24. Particulars of employees
The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 names and otherparticulars in respect of employees of the Company are required to be attached to theDirectors' Report. In terms of Section 136 of the Act the reports and accounts are beingsent to the members and other entitled thereto excluding the information on employees'particulars required to be disclosed in this report. The said information is available forinspection at Registered Office of the Company during the working hours and any memberinterested in obtaining such information may write to the Company Secretary
Your Company aims to be a preferred employer in the industry and remains committed todeveloping its employees to meet the current and future challenges of the business.
26. Code of conduct
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and Senior Management Personnel in the course of day to day businessoperations of the Company. The Code has been posted on the Company's website(www.modinaturals.com).
27. Audit committee
The details pertaining to composition of Audit Committee are included in the CorporateGovernance Report which forms part of this report.
28. Corporate governance
Your Company has complied with the requirements and disclosures that have to be madeunder the Code of Corporate Governance as required under Regulation 27(2) of the SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015. Pursuant toSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("SEBI Listing Regulations") the Company has executed freshListing Agreement(s) with the Stock Exchange(s).
As a listed company necessary measures are taken to comply with the Listing Agreementwith the Stock Exchange. A report on Corporate Governance along with a certificate ofcompliance from the Statutory Auditors forms part of this Annual Report. The Chairman& Managing Directors' declaration regarding compliance with 'Modi Naturals' Code ofConduct for Board Members and Senior Management' is attached to the Corporate GovernanceReport.
29. Corporate social responsibility (CSR) policy
The provisions of the Companies Act 2013 relating to Corporate Social Responsibilityare not applicable on the Company
30. Annual evaluation of board committees & directors' performance
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Audit Nomination & Remuneration and otherCommittees. The manner in which the evaluation has been carried out has been explainedhereunder.
A structured questionnaire was prepared after taking into consideration inputs receivedfrom the Directors covering various aspects of the Board's functioning such as adequacyof the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance.
In a separate meeting of independent Directors performance of non-independentdirectors performance of the board as a whole and performance of the Chairman wasreviewed taking into account the views of executive directors and nonexecutive directorsof the company.
Declaration from Independent Directors
As required by Section 149 (7) of the Companies Act 2013 All Independent Directors ofthe Company have made declaration to the effect that they meet the criteria ofindependence as stipulated under Section 149(6) of the Act.
31. Remuneration policy
The Nomination and Remuneration Committee recommend the appointment of Director andtheir appointment or reappointment based on their qualifications professionalexperience positive attributes view points skills and area of expertise andindependence. The Company follows a policy on remuneration of Directors and SeniorManagement employees details of the same are given in the Corporate Governance Report.The Remuneration Policy has been posted on the Company's website (www.modinaturals.com ).
32. Whistle blower / vigilance policy
Your Company has established a whistle blower policy/vigil mechanism for the Directorsemployees of the company to report genuine concerns calling the attention of the AuditCommittee to some wrong doing occurring within an organization. Your Company has alsoprovided adequate safeguards against victimization of whistleblowers who express theirconcerns against such wrongdoings occurring in the organization. The Company has alsoprovided direct access to the chairman of the Audit Committee in exceptionalcircumstances.
During the financial year 2015-16 there were no instances of unethical behaviourfraud or violation of the company's code of conduct or ethics policy and no personnel havebeen denied access to the audit committee. The details of establishment of such mechanismare disclosed on the website of the Company viz. (www.modinaturals.com).
33. Disclosure under sexual harassment of women at workplace (prevention prohibition& redressal) act 2013
Your company did not come across any complaints by any employee during the year underreview relating to the sexual harassment.
34. Directors' responsibility statement
Pursuant to Section 134(5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability; confirm that:
i. in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
ii. the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;
iii. the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv. the directors had prepared the annual accounts on a going concern basis;
v the directors had laid down internal financial controls to be followed by the Companyand such internal financial controls are adequate and operating effectively;
vi. the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively
The Board of Directors take this opportunity to thank all its Shareholders valuedcustomers banks Government and Statutory Authorities Investors and the Stock Exchangefor their continued support to the Company Your Directors also wish to place on recordtheir deep sense of appreciation for the committed services by your Company's employees.Your Directors acknowledge with gratitude the encouragement and support extended by ourvalued Shareholders and the Promoters of the Company.
| ||On behalf of the board of directors |
| ||Sd/- |
| ||Anil Modi |
|Place: New Delhi ||Chairman and Managing Director |
|Date: 08th August 2016 ||DIN No.: 00187078 |