|BSE: 503776||Sector: Industrials|
|NSE: MODIPON||ISIN Code: INE170C01019|
|BSE 12:55 | 19 Jan||34.00||
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
Modipon Ltd. (MODIPON) - Director Report
Company director report
To the Shareholders
Your Directors have pleasure in presenting the 49th Annual Report with AuditedFinancial Statements for the financial year ended 31st March 2016.
CLOSURE OF MANUFACTURING OPERATIONS
As reported earlier the industrial undertaking of the Company had been permanentlyclosed down after seeking requisite permission from Government of uttar pradesh under theprovisions of the uttar pradesh Industrial Disputes Act 1947. The Company is nowexploring other possibilities so as to have optimal utilization of its real estate andother business activity.
EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS
Subsequent to the date of financial statements Punjab National Bank has beenconsidering assignment of the residual dues of the company to an Asset ReconstructionCompany.
CURRENT STATUS OF OPERATIONS
Since the Company owns substantial real estate in its endeavour to rehabilitate theCompany and to tap its resources to augment finances so as to be able to liquidate itshuge liabilities and to utilize the surplus for taking up new business activity in theCompany as authorized by the Memorandum of Association of the Company the Board ofDirectors of the Company had approved to commence Real Estate business. The Companyproposes to commence Real estate business at an opportune time.
The Board of Directors met 4 times during the period of 12 months from 1st April 2015to 31st March 2016. The Directors met on 28th May 2015 1st August 2015 10th November2015 and 12th February 2016.
In view of the Losses suffered by the Company in the past your Directors are unable torecommend any Dividend on equity and preference Share Capital.
During the year under review the Company registered total revenue of Rs. 325.18 lacsfrom sale of old stocks etc. and has incurred a Loss after tax of Rs. 637.06 lacs aftertaking into account exceptional income.
PREFERENTIAL ISSUE OF SHARES
To clear the settled oTS dues of punjab national Bank the Company had availed a loanfrom M/s Modi Intercontinental p. ltd. (a related party). The loan was repayable withinone year. However the Company could not repay the loan as yet. therefore the Companyproposes to make a preferential allotment of 3738632 equity shares of the Company at arate to be worked out as per SEBI Regulations to discharge the loan liability of ModiIntercontinental p. ltd.
DIRECTORS & KEY MANAGERIAL PERSONNEL
The Board of Directors of the Company at present has six members. After the last AnnualGeneral Meeting of the Company during the year there has been no change in the Board ofDirectors.
Mr. Manish K. Modi is the Managing Director of the Company. He was appointed for aperiod of five years with effect from 1st June 2013 and the appointment as ManagingDirector was duly approved by the Central Government for a period of five years.
In order to comply with the requirement of Section 149(4) & (5) of the CompaniesAct 2013 two Independent Directors were appointed by the members at the AGM of theCompany held on 30.09.2014 for a period of five years. The terms of appointment of theseIndependent Directors were issued by the Managing Director of the Company. The abovereferred terms & conditions of the letter are available for viewing on the website ofthe Company viz. www.modipon.net.
KEY MANAGERIAL PERSONNEL
In pursuance of requirement of Section 203 of the Companies Act 2013 Mr. Manish K.Modi Managing Director Mr. A.K. Goel Company Secretary and Mr. Narayan C. Rout ChiefFinancial Officer were designated as Key Managerial personnel of the Company. Mr. SushilKumar Gupta the CFo appointed earlier had resigned from the service of the Company inDecember 2015. The Board appointed Mr. Narayan Chandra Rout as Chief Financial Officerw.e.f. 1st June 2016. Form DIR-12 in this regard was filed with the Registrar ofCompanies on 26.07.2016 vide SRN G08022451.
DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
As required under Section 149(7) all the Independent Directors on the Board of theCompany have issued their annual declaration stating that they meet all the criteria ofindependence as required under the Act.
STOCK EXCHANGE LISTING
The Securities of the Company are listed with the Bombay Stock Exchange.
COMMITTEES OF THE COMPANY
A. AUDIT COMMITTEE
In compliance with Section 177 of the Companies Act 2013 and Clause 49 (III) of theListing Agreement an Audit Committee consisting of two Independent Directors and twoNon-executive Director has been constituted. Mr. Gaurav Sekhri is the Chairman of the saidCommittee with Mr. Vivek Gupta Dr. M. K. Modi and Mr.Manoj Singh being other members ofthe said Committee. The said Committee met on 28th May 2015 1st August 2015 10thnovember 2015 and 12th February 2016.
There were no occasions during the year where the Board of Directors did not accept therecommendations of the Audit Committee.
B. NOMINATION AND REMUNERATION COMMITTEE
In compliance with Section 178(4) and Clause 49(IV) of the listing Agreement theCompany has constituted a nomination & Remuneration Committee consisting of twoIndependent Directors and two Non-executive Directors. Mr. Gaurav Sekhri is the Chairmanof the said Committee with Mr. Vivek Gupta Dr. M.K. Modi and Mr.Manoj Singh as Members ofthe Committee.-
the said Committee met on 1st August 2015.
the said Committee laid down the policy on Remuneration stating therein the positiveattributes required for the Managing Director Independent Directors and Key Managerialpersonnel. The said policy also states the modus operandi for determining the remunerationto the above said personnel. The policy on remuneration of the Company can be viewed onthe Company's website www.modipon.net.
C. STAKEHOLDERS' RELATIONSHIP COMMITTEE
In compliance with Section 178(5) of the Companies Act 2013 the Company has aStakeholders' Relationship Committee consisting of three members. Dr. M. K. Modi is theChairman of the said Committee with Mrs. Aditee Modi and Gaurav sekhri as Members of theCommittee.
The said Committee met on 12th February 2016.
D. RISK MANAGEMENT COMMITTEE
In compliance with the requirement of Clause 49 of the listing Agreement the Companyhas also constituted a Risk Management Committee consisting of three members. Dr. M. K.Modi is the Chairman of the said Committee with Mr. Vivek Gupta and Mrs. Aditee Modi asMembers of the Committee.-
the said Committee met on 12th February 2016.
the said Committee laid down the policy on Risk Management stating therein theobjectives and purpose of the said policy. The main objective of this policy is to ensuresustainable business growth with stability and to promote a pro-active approach inreporting evaluating and resolving those risks which are material in nature and areassociated with the business. In order to achieve the key objective the policyestablishes a structured and disciplined approach to Risk Management in order to guidedecisions on material risk related issues.
RISK MANAGEMENT POLICY
The Risk Management policy of the Company can be viewed on the Company's websitewww.modipon.net.
In compliance with Section 177 (9) of the Companies Act 2013 and Clause 49 (VIII) (H)(2) of the listing Agreement the Company has set up a whistleblower policy which can beviewed on Company's website www.modipon.net. In terms of the said policy the Directors andemployees are given direct access to the Chairman of the Audit Committee to report onalleged wrongdoings.
On account of closure of the manufacturing operations of the Company there has notbeen any export during the year. The FOB value of exports during the previous financialyear was nil.
WHISTLE BLOWER POLICY:
The Company has a Whistle Blower policy including vigil mechanism to report genuineconcerns of grievances providing direct access to the Chairperson of the Audit Committeein appropriate and exceptional cases. The Whistle Blower Policy has been posted on thewebsite of the Company www.modipon.net.
INTERNAL FINANCIAL CONTROL:
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no material weaknesswas observed by the internal auditor of the Company. Even though the Company has in placeadequate internal audit system which is commensurate with the operations of the Companythe testing and evaluation of internal financial control over financial reporting asmentioned in the guidance note of the Institute of Chartered Accountants of India is yetto be undertaken.
NOMINATION & REMUNERATION POLICY:
Nomination & Remuneration policy of the company as formulated and approved bynomination and Remuneration Committee in its meeting held on 1st August 2015 governsDirectors' appointment including criteria for determining their qualifications positiveattributes their independence and remuneration for the Directors KMps and otheremployees. The nomination and Remuneration policy is posted on Company's websitewww.modipon.net.
PARTICULARS OF LOAN GUARANTEES OR INVESTMENTS:
Details of loan(s) guarantee and investments are given in the notes to FinancialStatements.
Rule 5 of the Companies (Appointment and Remuneration of Managerial personnel) Rules2014 is applicable on listed companies.
The Company had only 1 employee as on 31.03.2016.
Subsequent to the closure of the Manufacturing Operations of the Company all issues ofex-workmen/employees have been amicably resolved. The total dues of theseworkmen/employees (other than 5 workmen who have not yet collected their payment) havebeen paid. These 5 ex-workmen/employees had approached DRT-II New Delhi seeking order forpayment of dues in excess of the legal dues as paid to the other workmen/employees.Hon'ble DRT had directed them to approach the Labour Commissioner for adjudication oftheir dues. None has approached the labour Commissioner as directed by DRT however asdirected by DRT the Company had deposited the amount payable to them with DRT which in theabsence of any claim by these workmen has been released by DRT to pNB.
Details as required pursuant to MCA Notification G.S.R. 646(E) dated 30th June 2016Rule 5(2) of the Companies (Appointment and Remuneration of Managerial personnel) Rules2014 none of the employee was in receipt of remuneration of Rs. one Crore and Two lacs ormore per year throughout the year or Rs. Eight lacs and Fifty Thousand per month for thepart of the year.
Further none of the employees holds by himself or along with his spouse and dependentchildren not less than 2% of equity shares of the Company.
It is hereby affirmed that the remuneration paid is as per the Remuneration policy ofthe Company.
Particulars about Key Managerial Personnel
a. pursuant to the Rule 5(1) Companies (Appointment and Remuneration of Managerialpersonnel) Rules 2014 the information required to be disclosed by every listed Companiesin its Board Report are as follows:-
* The remuneration are within permissible limits as approved by MCA. There is noincrease in remuneration during the year. Ratio calculated on basic salary.
** Appointed also as CS (KMp) w.e.f. 14th August 2014 remuneration paid to himincludes EpF and Medical Reimbursement. During the year an increament of 4% was granted tohim as a CS.
*** Appointed also as CFo (KMp) w.e.f. 14th August 2014 remuneration taken as aboveis for a period of 9 months. No increase was granted to him as a CFo.
b. The Median remuneration (based on basic salary) of employees of the Company duringthe financial year 2015-16 was Rs. 636000/-.
c. The percentage increase in the median remuneration (based on basic salary) ofemployees in the financial year 2015-16 was 4%.
d. Variations in the market capitalization of the company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the company in comparisonto the rate at which the company came out with the last public offer in case of listedcompanies and in case of unlisted companies the variations in the net worth of thecompany as at the close of the current financial year and previous financial year;
Company's shares are not being regularly and actively traded since long in the stockexchange where the shares are listed hence no details are available.
e. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
Since Company is a non-operational company and in view of losses nominal increase wasmade in the managerial remuneration while no increase is approved by the MCA in theremuneration of Managing Director.
f. The key parameters for any variable component of remuneration availed by thedirectors: No variable component of remuneration was availed by the Directors of theCompany.
g. The ratio of the remuneration of the highest paid Director to that of the employeeswho are not Directors but receive remuneration in excess of the highest paid Directorduring the year:
The highest paid Director in the Company is Mr. Manish Kumar Modi with annualremuneration of Rs. 18 lac as per Shareholders' approval. There is no employee receivingremuneration in excess of the Director.
h. It is hereby affirmed that the remuneration paid is as per the Remuneration policyof the Company.
At the beginning of the financial year the balance on account of Fixed Depositsaccepted from the Public and Members stood at Rs. nil. There was no deposit liable to betransferred to the credit of Investors' Education and protection Fund.
The Company has not accepted any deposits during the year as envisaged under Sections73 74 & 76 of the Companies Act 2013.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN Exchange EARNINGS AND OUTGO
In view of the permanent closure of the Manufacturing operations provisions relatingto furnishing of the details of (i) Conservation of energy (ii) Research &Development and Technology Absorption and (iii) Foreign Exchange Earning and Outgo inaccordance with the Companies (Disclosure of particulars in the Report of the Board ofDirectors) Rules 1988 are not applicable.
After the last Annual General Meeting of the Company during the year there has been nochange in the Board of Directors.
AUDITORS AND AUDIT REPORT
At the last Annual General Meeting M/s. S.R. Dinodia & Co. LLp CharteredAccountants new Delhi (Firm Regn. No.001478N/ N500005) were appointed as StatutoryAuditors of the Company for a term of five years i.e. from the conclusion of 47th AnnualGeneral Meeting until the conclusion of the 52nd Annual General Meeting of the Company ata fee of Rs. 200000/- plus applicable Service Tax etc. M/s S.R. Dinodia & Co.Chartered Accountants have vide their letter dated 5th August 2016 conveyed theirunwillingness to continue as Auditors of the Company for the next year due to professionalpre-occupation.
The Board of Directors have accordingly appointed M/s B.M. Chatrath & Co.Chartered Accountants Noida (Firm Regn. No. 301011E) as Company's auditors to hold officeuntil the conclusion of the Fifty Fourth Annual General Meeting.
With reference to the qualifications contained in the Auditors' Report the Directorswish to state that the Notes on Accounts and Significant Accounting Policies referred toby the Auditors in their Report are self-explanatory and hence do not call for any furthercomment.
In view of permanent closure of operations the Company had applied for exemption fromthe requirement of Cost Audit. Accordingly appointment of Cost Auditor is not envisaged.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Directors of your Companydeclare as under:
(i) that in the preparation of the Annual Accounts the applicable Accounting Standardshad been followed along with proper explanation relating to material departures;
(ii) that the Directors had selected such Accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the State of Affairs of the Company at the end of theFinancial year and of the Profit of the Company for that period;
(iii) that the Directors had taken proper and sufficient care for the maintenance ofadequate Accounting Records in accordance with the provisions of the Companies Act 1956for safeguarding the Assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) that in view of the permanent closure of the Manufacturing operations of theCompany the Directors had not prepared the Annual Accounts on a going concern basis.
(v) that the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;
(vi) that the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
The Company does not have any Subsidiary Company.
EXTRACT OF THE ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014 the Extract of the Annual Return of theCompany made up as at the end of the Financial Year i.e. 31st March 2016 is attached byway of Annexure - 1 in Form MGT-9 to this report.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and Rules madethereunder the Company had appointed M/s. Ranjeet Verma & Associates. practicingCompany Secretary (FCS No. 6814 Cp No.7463) of New Delhi as Secretarial Auditors of theCompany for the period from 1st April 2015 to 31st March 2016.
M/s. Ranjeet Verma & Associates. have submitted their Secretarial Audit Report andhave issued their certificate as per the prescribed format in MR-3 to the shareholders ofthe Company which is annexed to this Report as Annexure -2. They have confirmed that theCompany has proper board processes a compliance mechanism in place and has also compliedwith the relevant statutes rules and regulations applicable to the Company. they havealso confirmed that the Company has complied with the necessary secretarial standards asapplicable.
For the Financial Year 2016-17 also Company has appointed M/s. Ranjeet Verma &Associates Vaishali (Ghaziabad) as Secretarial Auditors of the Company.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS
During the year under review there have been no significant and material orders passedby any regulators/courts/tribunals that could impact the Company's operations in future.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the period under review the Company has not made any loan to any third party asenvisaged under Section 186 of the Companies Act 2013.
The Company has not given any guarantee during the year.
RELATED PARTY TRANSACTIONS
As required under Section 188 of the Companies Act 2013 and Clause 49 (VII) &(VIII) of the Listing Agreement the Company places before the Audit Committee the list ofrelated parties with
Whom arrangements have been made for sharing of expenses of maintaining of Office andtransactions of loan etc. The Audit Committee accords its omnibus approval for suchrelated party transactions on an annual basis. The updates on the transactions with therelated parties are placed before the audit committee on a quarterly basisThe details arealso placed before the Board of Directors for its information.
As required under Clause 49 of the listing Agreement the Company has formulated apolicy on related party transactions and the same was approved by the Audit Committee andthe Board of Directors. The said policy has been uploaded on Company's website
All the transactions with the related parties entered into during the period underreview have been in the ordinary course of business and at arms' length basis. there havebeen no material related party transactions entered into during this period which requiredthe approval of the shareholders by way of special resolution. The details of relatedparty transactions pursuant to Clause (h) of sub-section (3) of Section 134 of the Act isenclosed in form no. AOC 2 as Annexure - 3.
FORMAL ANNUAL EVALUATION
As required under Section 134 (p) of the Companies Act 2013 and Clause 49 (2) (B) (5)of the listing Agreement the Board of Directors approved the evaluation criteria forevaluating the performance of the Board of Directors its Committees and the performanceof Independent Directors.
Accordingly as required under Schedule IV of the Companies Act 2013 and Clause 49(II) (B) (6) of the listing Agreement the Independent Directors evaluated performance ofthe nonindependent Directors and the Board as a whole. they also reviewed the performanceof the Chairman of the Company and also assessed the quality quantity and timelines offlow of information between the Company Management and the Board that was necessary forthe Board to effectively and reasonably perform their duties.
Also as required under Clause 49 of the listing Agreement the Board assessed theperformance of the Independent Directors as per the criteria laid down and haverecommended their continuation on the Board of the Company.
The Board of Directors assessed the performance of the individual Directors on theBoard based on parameters such as relevant experience and skills ability and willingnessto speak up focus on shareholder value creation governance standards knowledge ofbusiness processes and procedures followed openness of discussion/ integrityrelationship with management impact on key management decisions etc. The members of theCommittee of Audit nomination & Remuneration and Stakeholders Relationship were alsoassessed on the above parameters and also in the context of the Committee's effectivenessvis-a-vis the Act and the listing requirements.
The Report on Corporate Governance together with the Statutory Auditors' Certificatethereon are annexed hereto and forms part of this Report. The Management Discussion andAnalysis Report is annexed hereto and forms part of this Report.
The Company has also adopted the mandatory policy on Sexual Harassment of Women atWorkplace (prevention prohibition & Redressal) Act 2013. Employees have beensensitized on the provisions of this enactment and the Company has also constituted aninternal complaints committee with effect from 28th May 2015 to deal with complaints ifany under the said Act. there was no complaint received during the year to report.
ADEQUACY OF INTERNAL CONTROLS
Your Company has in place adequate internal control systems combined with delegation ofpowers and periodic review of the process. The control system is also supported byinternal audits and management reviews with documented policies and procedures.
ISSUE OF SHARES
During the year under review the Company has not issued any
SWEAT equity shares or shares with differential rights or under Employee Stock OptionScheme nor did it buy-back any of its shares.
None of the Directors are disqualified under the provisions of Section 164(2) of theCompanies Act 2013. The Directors have made the requisite disclosures as required underthe provisions of the Companies Act 2013 and Clause 49 of the Listing Agreement.
Your Directors would like to express their sincere appreciation to the variousDepartments of the Central and State Governments upSIDC's nominee directors and Investorsfor their continued valuable support and assistance. Your Directors also wish to thank allthe Officers and Staff of the Company at all levels for their contribution support andcontinued co-operation throughout the year.
For and on behalf of the Board