The Members of Modison Metals Limited
The Directors have pleasure in presenting before you the Thirty Third Annual Report ofthe Company together with the Audited Statements of Accounts for the year ended 31stMarch 2016.
(Rupees in Lakhs)
| ||2015-16 ||2014-15 |
|Revenue from operation & other income ||16921.05 ||17181.33 |
|Gross Profit before Finance Cost & ||2690.79 ||1674.63 |
|Depreciation/Amortisation || || |
|Less: Finance Cost ||334.76 ||347.39 |
|Less: Depreciation / Amortisation ||637.36 ||662.70 |
|Profit before Exceptional items ||1718.67 ||664.54 |
|Exceptional items ||- ||- |
|Profit before taxation ||1718.67 ||664.54 |
|Less: Provision for Taxation ||626.50 || |
|Current tax || ||217.50 |
|Less: Taxation adjustment of previous year ||(14.47) ||0.36 |
|Less: Deferred tax ||18.23 ||(13.62) |
|Profit after taxation ||1088.41 ||460.30 |
|Add: Balance brought forward from the previous year ||8069.25 ||7901.87 |
|Profit available for appropriation ||9157.66 ||8362.17 |
|Interim & Proposed Dividend ||324.50 ||243.38 |
|Corporate Dividend Tax on Interim & Proposed ||66.06 ||49.54 |
|Dividend || || |
|Transfer to General Reserve ||- ||- |
|Balance carried over to Balance Sheet ||8767.10 ||8069.25 |
Your Directors do not recommend any final dividend for the financial year ended on 31stMarch 2016 & decided that the interim dividend which is already declared & paid isthe final dividend.
The Board of Directors in March 2016 has declared and paid the interim dividend ofRe.1/- per Equity share of Re.1 each for the Financial Year ended 31st March2016.
TRANSFER TO RESERVES :
The Company has not transferred any amount to Reserves for the Financial Year ended 31stMarch 2016.
During the year under review the Company has achieved the turnover of Rs.16921.05Lakhs as compared to Rs.17181.33 Lakhs during previous year. The turnoverreduced by 1.51% i.e; by Rs.260.28 Lakhs Profit before tax increased by 158.63% i.e; byRs.1054.13 Lakhs & Net Profit after tax increased by 136.46 % i.e; by Rs. 628.12Lakhs.
Earnings per share for the year 2015-16 is Rs.3.35. Book value now stands at Rs.32.04per equity share of Re.1 each.
The Exports (FOB) including export in INR during the year amounts to Rs.2553.98Lakhs as against Rs.2504.82 Lakhs achieved in the previous year. The export increasedby 1.96% & i.e; Rs. 49.16 Lakhs.
The paid up equity capital as on 31st March 2016 stood at Rs. 32450000.During the year under review the Company has not issued equity share with differentialvoting rights sweat equity shares employee's stock options & made any provision forpurchase of its own shares.
RESEARCH AND DEVELOPMENT :
A state-of-the-art recognized R & D Division set up by the Company in FinancialYear 2002-2003 got renewed in April 2013 from Department of Science & TechnologyIndustrial Research New Delhi. The R & D Division is working for development of newproduct as well as improvement in existing products. The company invested approximately 1%of its revenue in its R&D efforts towards new product development and capabilitybuilding.
PUBLIC DEPOSITS :
The Company has not accepted any deposits from the public during the year.
LOANS GUARANTEES AND INVESTMENTS :
The Company has not given any loans and guarantee during the year under consideration.
CHANGE IN NATURE OF BUSINESS:
There being no change in the nature of business of the company during the year.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
As required under Regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Management Discussion andAnalysis Report is enclosed as a part of this report.
PARTICULARS OF CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO :
Information required under Section 134 of the Companies Act2013 read with Rule 8 ofCompanies(Accounts) Rules2014 regarding conservation of energy technology absorptionand foreign exchange earnings and outgo is given in the Annexure I.
EXTRACT OF ANNUAL RETURN :
The details forming part of the extract of Annual Return in form MGT 9 is annexedherewith as Annexure II.
CORPORATE SOCIAL RESPONSIBILITY :
As part of its initiatives under "Corporate Social Responsibility" (CSR) theCompany run Mohanlal Modi Hospital through Trust. The Company supported various socialcauses extended medical aid to the needy and even contributed significantly to thehospitals. Scholarships have been given out to deserving candidates to help them progressand to see them through initial limitations of progress. The group has also committed tofight TB by donating towards the treatment and 5 beds for underprivileged people everyyear.
These projects are largely in accordance with Schedule VII of the Companies Act 2013.The details of Committee and its terms of reference are set out in Corporate GovernanceReport.
The Annual Report on CSR activities is attached as Annexure III and forms a partof this Report of the Directors.
Mr. Kumar Jay Modi and Mr. B.B.Singh Directors of the Company who retires by rotationat the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment to the Board.
Mr. Ashok Jatia and Mr. Rakesh Singh were appointed as an Additional Director of theCompany with effect from 2nd November 2015 under Section 161 (1) of the Act.Mr. Ashok Jatia and Mr.Rakesh Singh hold office upto the date of forthcoming AnnualGeneral Meeting and to be regularised in the ensuing Annual General Meeting.
Your Directors state that Mr. Ashok Jatia Director of the Company vides his letterdated 2nd November 2015 informed that consequent upon the requirements of theCompanies Act 2013 he had met the criteria prescribed in Section 149 (6) of the saidAct. Accordingly Mr. Ashok Jatia is to be confirmed as an Independent Director in theensuing Annual General Meeting.
Also Mr. Rakesh Singh is to be confirmed as a Whole time Director in the ensuingAnnual General Meeting.
The details of the Directors being recommended for appointment and re-appointment arecontained in the accompanying notice of the ensuing Annual General Meeting.
KEY MANAGERIAL PERSONNEL :
Ms. Deepashree Makarand Dadkar is appointed as Company Secretary w.e.f. 01.04.2015.
DECLARATION FROM INDEPENDENT DIRECTORS :
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with criteria of independence as laid down under Section 149(6)of the Companies Act 2013.
ANNUAL PERFORMANCE EVALUATION :
Pursuant to the provisions of the Act and Regulation 17(10) of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the Board has carried out an annual performance evaluation of the performance. Aseparate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board. The performance evaluation of the IndependentDirector was carried out by the entire Board except concerned Independent Directors. Theperformance evaluation of the Chairman and the Non Independent Directors was carried outby the Independent Directors. The Directors expressed their satisfaction with evaluationprocess.
FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS :
A familiarization program for independent directors as approved by the Board anddetails for the same is available on the Company's website. The web link ishttp://www.modison.com/pdf/financial/Familiarization-Program-for-Independent-Directors-MML.pdf
BOARD MEETINGS :
The Board of Directors duly met 5 times during the financial year from 1stApril 2015 to 31st March 2016. The dates on which the meetings were held areas follows: 27th May 2015 10th August 2015 2thNovember 2015 3rd February 2016 and 9th March2016. A separatereport on Corporate Governance includes the detailed particulars of Board & CommitteeMeetings is annexed and forms a part of this Report of the Directors.
COMPANY'S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION :
A Nomination and Remuneration Policy on the recommendation of the Nomination &Remuneration Committee as approved by the Board is available on the Company's website.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197(12) read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act thereports and accounts are being sent to the members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the membersat the Registered office of the company during business hours on working days of thecompany up to the date of ensuing Annual General Meeting. If any member is interested ininspecting the same such member may write to the company secretary in advance.
i) Statutory Auditors :
M/s M.L. Bhuwania & Co Chartered Accountants are re-appointed as the StatutoryAuditors of the Company to hold the office from the conclusion of this Annual GeneralMeeting till the conclusion of the next Annual General Meeting.
The Auditors have confirmed that their appointment is as per Section 139 of the saidAct be and is within the limits prescribed under Companies Act 2013 and that they are notdisqualified. There are no qualifications or observations or remarks made by the Auditorsin their Report.
ii) Cost Auditors :
M/s. N. Ritesh & Associates Cost Accountants are appointed as Cost Auditors forauditing the cost records of your Company for the year ended 31st March 2017 by the Boardof Directors.
iii) Secretarial Audit :
A Secretarial Audit was conducted during the year by the Secretarial Auditor M/sRagini Chokshi & Co Practicing Company Secretaries Mumbai in accordance withprovisions of Section 204 of the Companies Act 2013. The Secretarial Auditor's Report isenclosed and forms a part of this Directors Report. There are no qualifications orobservations or remarks made by the Secretarial Auditor in their Report.
MATERIAL CHANGES & COMMITMENTS :
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company and thedate of the report.
Last Year your company has acquired M/s. Modison Contacts Private Limited for thepurpose of expansion of business which is now the subsidiary of your Company. Thesubsidiary is not a material subsidiary company. The material subsidiaries policy isavailable on Company's website and the web link ishttp://www.modison.com/pdf/financial/Material-Subsidiaries-Policy-MML.pdf. The subsidiarycompany has recorded a loss of Rs.23404/- during the Financial Year 2015-16. During theyear the Board of Directors reviewed the affairs of the subsidiary. In accordance withSection 129(3) of the Companies Act 2013 we have prepared consolidated financialstatements of the Company which forms part of this Annual Report. Further a statementcontaining the salient features of the financial statement of our subsidiary is annexed asAnnexure IV. In accordance with Section 136 of the Companies Act2013 the auditedfinancial statements including the consolidated financial statements and relatedinformation of the Company and audited accounts of subsidiary is available on our websitewww.modison.com.
Your Company has taken adequate steps to adhere to all the stipulations laid down inRegulation 34 (3) read with Schedule V of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015. A report on CorporateGovernance is included as a part of this Annual Report. The Auditor's Certificate on itscompliance form part of this Report and is annexed hereto.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) read with Section 134 (5) of the Act on the basis ofinformation placed before them the Directors state that: i. in the preparation of theannual accounts the applicable accounting standards have been followed along with properexplanation relating to material departures if any; ii. appropriate accounting policieshave been selected and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as at 31stMarch 2016 and of the profit and loss of the Company forthe said period; iii. proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;iv. the annual accounts have been prepared on a going concern basis; v. the internalfinancial controls to be followed by the company and that such internal financial controlsare adequate and were operating effectively; and vi. there are proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively.
RELATED PARTY TRANSACTIONS
All transactions entered with related parties for the year under review were on arm'slength basis and in the ordinary course of business and that the provisions of Section 188of the Companies Act 2013 are not attracted. Thus disclosure in form AOC-2 is notrequired. Further there are no material related party transactions during the year underreview with the promoters Directors or Key Managerial Personnel. All related partytransactions are placed before the Audit Committee as also to the Board for approval.Omnibus approval was obtained for transactions which are of repetitive nature. The policyon Related Party Transactions as approved by the Board is available on the Company'swebsite www.modison.com.
The Company is exposed to the risk of price fluctuation of silver (raw material). TheCompany proactively manages this risk through hedging inventory management. The Company'sreputation for quality with robust marketing existence mitigates the impact of price riskon finished goods.
The Company has a robust Business Risk Management (BRM) framework to identify evaluatebusiness risks and opportunities. This framework seeks to create transparency minimizeadverse impact on the business objectives and enhance the Company's competitive advantage.The business risk framework defines the risk management approach across the enterprise atvarious levels including documentation and reporting.
INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has adequate system of internal financial control to safeguard and protectfrom loss unauthorized use or disposition of its assets. All the transactions areproperly authorized recorded and reported to the Management. The Company is following allthe applicable Accounting Standards for properly maintaining the books of accounts andreporting financial statements.
WHISTLE BLOWER/ VIGIL MECHANISM POLICY
In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Whistle Blower Policy for directors and employees to deal with instance of fraud andmismanagement if any has been established. The Whistle Blower Policy has been uploadedon the website of the Company at www.modison.com.
PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE
As per the requirements of the Sexual Harassment of Women at Workplace ( PreventionProhibition & Redressal) Act2013 (Act') and Rules made thereunder your Companyhas adopted a policy for prevention of sexual harassment at work place and has constitutedan Complaint Redressal Committee. During the year the Company has not received anycomplaints on sexual harassment under the said Act.
The Company's equity shares are listed at BSE Limited. The Company confirms that it haspaid the Annual Listing Fees for the year 2015-16.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators or Courts thatwould impact the going concern status of the Company and its future operations.
Mr. Ajay Jain Chartered Accountant is the Internal Auditor of the Company.
Your Directors place on record their appreciation for the assistance and supportextended by all Government Authorities Financial Institutions Banks ConsultantsSolicitors and Shareholders of the Company. The Directors express their appreciation forthe dedicated and sincere services rendered by the employees of the Company at all levels.
| ||For and on behalf of the Board of Directors |
|Mumbai 26 May 2016 ||G.L MODI |
| ||Managing Director |
Particulars Required Under Section 134 Of The Companies Act 2013 Read With Rule 8 OfCompanies(Accounts) Rules2014
A. CONSERVATION OF ENERGY
a) Energy Conservation Measures:-
Strict adherence of reasonable batch size production so that consumption on smallerbatch lots is not made thereby decreasing power consumption. Mainly with respect to HeatTreatment and Melting furnaces.
b) Additional Investments & Proposals for reduction of energy:
c) Impact of the above measure:
Since the energy consumption is comparatively marginal the impact on cost ofproduction is difficult to ascertain.
d )Total Energy Consumption and Energy Consumption Per Unit Of Production:
Not furnished as the Company is not covered in the list of specified industries.
B.TECHNOLOGY ABSORPTION :
Research & Development
a) Specific areas in which R&D carried out by the company:
Dispersion strengthened copper
Copper Chromium contacts disc for vacuum interrupters
Eutectic Brazing alloy for vacuum interrupters.
High performance current carrying parts.
b) Benefits derived as a result of above R & D:-
Foray into identified segment of MV business
More cost competitive products made available.
c) Future Plan of action:
Development of Beryllium Copper
Development of Percussion Welded parts.
Development of Fully Automatic Horizontal Welding Line.
|d) Expenditure in R&D: ||Rs. In Lakhs |
|Capital ||14.41 |
|Recurring ||40.27 |
|Total ||54.68 |
|Total R&D Expenses as a percentage of total Turnover ||0.32% |
C.FOREIGN EXCHANGE EARNINGS AND OUTGO :
a) Activities Relating To Exports:
The Company is contributing towards imports substitution in Electrical & SwitchgearIndustries and making the country self reliant in this regard.
|b) Total Foreign Exchange Used and Earned (2015-2016) ||Rs. In Lakhs |
|i) CIF Value of Imports: ||1857.55 |
|ii) Expenditure in Foreign Currency: ||173.60 |
|iii) Foreign Exchange earned: ||2528.99 |