To the Shareholders
Your Directors have pleasure in presenting the 50th Annual Report with AuditedFinancial Statements for the financial year ended 31st March 2017.
|FINANCIAL HIGHLIGHTS ||2016-17 ' Lacs ||2015-16 ' Lacs |
|Turnover ||- ||- |
|Other Income ||1.79 ||325.18 |
|Gross Profit (Loss) before Dep. ||(487.92) ||(242.69) |
|Depreciation ||1.27 ||0.62 |
|Profity(Loss) after Depreciation ||(489.19) ||(243.31) |
|Add/(Less) Exceptional Income/ (Losses) ||271.87 ||815.38 |
|Profit (Loss) before Tax ||(217.32) ||572.07 |
|Less/ (Add) : || || |
|Provision for Taxation- Fringe Benefit Tax ||- ||- |
|Extra Ordinary item Taxes for earlier Year ||- ||(64.99) |
|Net Profity(Loss) after Tax ||(217.32) ||637.06 |
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/NBFC.
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 5 times during the period of 12 months from 1st April 2016to 31st March 2017. The Directors met on 28th May 2016 1st September 2016 17thOctober 2016 and 3rd November 2016 and 7th February 2017.
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. 1.79 lacsfrom sale of old stocks etc. and has incurred a loss after tax of Rs. (217.31) 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 Private Limited (a related party). The loan was repayablewithin one year. However the Company could not repay the loan as yet. Therefore theCompany expressed its inability to repay the loan taken accordingly the acquirer optedfor conversion of certain portion of the said loan amount of Rs. 60000000/- ( RupeesSix Crores) into 3738632 equity shares of the Company. Pursuant to this on 01.09.2016the Board of Directors in its meeting considered and approved the preferential allotmentof 3738632 equity shares representing 32.29% of Rs. 10/- each of the expanded equityshare capital of the Company i.e. 11576689 equity shares of Rs. 10 each at a price ofRs. 10/- to the Acquirer as per SEBI Regulations to discharge the partly loan liability ofModi Intercontinental Private Limited.
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 certain change in the Boardof Directors of the Company.
|Name of Director ||Category ||Date of Appointment |
|1. Mr. Hemant Kumar Singh ||Independent Director ||07.02.2017 |
|2. Mr. Amit Kumar Ghosh ||Independent Director ||22.08.2016 |
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. Vineet Kumar Thareja Company Secretary and Mr. Vikas BhatiaChief Financial Officer were designated as Key Managerial Personnel of the Company. TheBoard appointed Mr. Vikas Bhatia as chief financial officer w.e.f. 20.07.2017.
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 Regulation 18 of SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015 an Audit Committeeconsisting of three Independent Directors and one Nonexecutive Director has beenconstituted. Mr. Hemant Kumar Singh is the Chairman of the said Committee with Mr. VivekGupta Dr. M. K. Modi and Mr. Ranvir Prasad being other members of the said Committee.The said Committee met on 28th May 2016 1st September 2016 3rd November 2016 and 7thFebruary 2017.
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 Regulation 19 of SEBI (Listing Obligations andDisclosures Requirements) Regulation 2015 the Company has constituted a Nomination
& Remuneration Committee consisting of two Independent Directors and oneNon-executive Directors. Mr. Vivek Gupta is the Chairman of the said Committee with Dr.M.K. Modi and Mr. Hemant Kumar Singh as Members of the Committee.-
The said Committee met on 7th February 2017.
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 Mr. Hemant Kumar Singh as Membersof the Committee.
The said Committee met on 7th February 2017.
D. RISK MANAGEMENT COMMITTEE
The Company has also constituted a Risk Management Committee consisting of threemembers. Dr. M. K. Modi is the Chairman of the said Committee with Mr. Vivek Gupta andMrs. Aditee Modi as Members of the Committee.-
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 Regulation 22 of SEBI(Listing obligations and Disclosures Requirements) Regulation 2015 the Company has setup a whistleblower policy which can be viewed on Company's website www.modiponnet. Interms of the said policy the Directors and employees are given direct access to theChairman of the Audit Committee to report on alleged 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.
During the year the Company could not appoint an Internal Auditor because of acutefinancial position and closure of operations of the Company.
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 has 5 (Five) No. of employee as on 31.03.2017.
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 inthe absence 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:-
|Name of Director/ KMP and Designation ||Remuneration of Directors/ KMPs for FY 2016-17 ||% age increase in remuneration in FY 2016-17 ||Ratio of Remuneration to the median remuneration of employee ||Comparison of the remuneration of the KMP against the performance of the company |
|Mr. Manish Kumar Modi - Managing Director* ||Rs.1876000 ||NIL ||2.92* ||The Company incurred a loss after tax of Rs. 217.32 lac during 2016-17 as against profit after tax of Rs. 637.06 during 2015-16. |
|Mr. Vineet Kumar Thareja - Company Secretary ** ||Rs.103700 ||N.A.** ||0.16 |
|Mr. Narayan Chandra Rout -Chief Financial Officer*** ||Rs.1343280 ||N.A*** ||2.09 |
* The remuneration is 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. 07th February 2017 remuneration paid to himincludes Medical Reimbursement.
*** Appointed also as CFO (KMP) w.e.f. 01.06.2016 remuneration taken as above is for aperiod of (10) Ten Months.
Note:The remuneration of the ex-company Secretary of the Company named Mr. A. K.Goel was paid Rs. 1226160/- for the period of nine months i.e. 01.04.2016 to 31.12.2016.
* Mr. Vikas Bhatia has been appointed as new chief financial officer from 20.07.2017
b. The Median remuneration (based on basic salary) of employees of the Company duringthe financial year 2015-16 was Rs. 642000/-.
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. 18.76 Lac as per Shareholders' approval. There is only one employeereceiving remuneration 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.
AUDITORS AND AUDIT REPORT
M/s B.M. Chatrath & Co. Chartered Accountants Noida (Firm Regn. No.301011E) wereAppointed as the statutory auditors for a period of Five (5) years in the last AnnualGeneral Meeting held on 30th September 2016. In pursuant to the provisions of Section139(2) of the Companies Act 2013 their tenure to act as statutory auditors needs to beratified by the members of the Company at ensuing Annual General Meeting (AGM). TheCompany has received a consent & eligibility certificate from the said statutoryauditors to the effect that if their appointment is ratified it would be in accordancewith the provisions of Section 141 of the Companies Act 2013.
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 2013for 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 2017 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 madethere under 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 from1st April 2016 to 31st March 2017.
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 2017-18 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 Regulation 23 of SEBI(Listing Obligations and Disclosures Requirements) Regulation 2015 the Company placesbefore the Audit Committee the list of related parties with whom arrangements have beenmade for sharing of expenses of maintaining of Office and transactions of loan etc. TheAudit Committee accords its omnibus approval for such related party transactions on anannual basis. The updates on the transactions with the related parties are placed beforethe audit committee on a quarterly basis. The details are also placed before the Board ofDirectors for its information.
As required under the LODR 2015 the Company has formulated a policy on related partytransactions and the same was approved by the Audit Committee and the Board of Directors.The said policy has been uploaded on Company's website www.modipon.net.
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. However norelated party transaction the context of Section 188 of the Companies Act 2013 andRegulation 23 of SEBI (Listing Obligations and Disclosures Requirements) Regulation 2015has been entered during the year under review. Pursuant to Clause (h) of sub-section (3)of Section 134 of the Act Form no. AOC-2 showing NIL details of related partytransactions for the Financial Year 2016-17 is enclosed as Annexure - 3.
FORMAL ANNUAL EVALUATION
As required under Section 134 (p) of the Companies Act 2013 and Regulation 19 of SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015 and read with part Dof SEBI (Listing obligation and disclosures requirement) regulations 2015 the Board ofDirectors approved the evaluation criteria for evaluating the performance of the Board ofDirectors its Committees and the performance of Independent Directors.
Accordingly as required under Schedule IV of the Companies Act 2013 and Regulation 19of SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015 and read withpart D of SEBI(Listing obligation and disclosures requirement) regulations
2015 the Independent Directors evaluated performance of the non-independent Directorsand the Board as a whole. They also reviewed the performance of the Chairman of theCompany and also assessed the quality quantity and timelines of flow of informationbetween the Company Management and the Board that was necessary for the Board toeffectively and reasonably perform their duties.
Also as required the Board assessed the performance of the Independent Directors asper the criteria laid down and have recommended their continuation on the Board of theCompany.
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 are 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 orshares with differential rights or under Employee Stock Option Scheme nor did it buy-backany 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.
Your Directors would like to express their sincere appreciation to the variousDepartments of the Central and State Governments UPSIDC's directors and Investors fortheir continued valuable support and assistance. Your Directors also wish to thank all theOfficers 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
|Place : New Delhi ||(Manish K. Modi) ||(M. K. Modi) |
|Dated : 30th August 2017 ||Managing Director ||Chairman |