The Members of
Modison Metals Ltd
The Directors have pleasure in presenting before you the Thirty Fourth Annual Report ofthe Company together with the Audited Statements of Accounts for the year ended 31stMarch 2017.
| || ||(Rupees in Lakhs) |
| ||2016-17 ||2015-16 |
|Revenue from operation & other income ||19131.85 ||16921.05 |
|Gross Profit before Finance Cost & Depreciation/Amortisation ||3101.06 ||2690.79 |
|Less: Finance Cost ||269.39 ||334.76 |
|Less: Depreciation/Amortisation ||639.76 ||637.36 |
|Profit before Exceptional items ||2191.91 ||1718.67 |
|Exceptional items ||- ||- |
|Profit before taxation ||2191.91 ||1718.67 |
|Less: Provision for Taxation Current tax ||790.00 ||626.50 |
|Less: Taxation adjustment of previous year ||12.04 ||(14.47) |
|Less: Deferred tax ||(17.92) ||18.23 |
|Profit after taxation ||1407.79 ||1088.41 |
|Add: Balance brought forward from the previous year ||8767.10 ||8069.25 |
|Profit available for appropriation ||10174.89 ||9157.66 |
|Interim Dividend ||324.50 ||324.50 |
|Corporate Dividend Tax on Interim Dividend ||66.06 ||66.06 |
|Balance carried over to Balance Sheet ||9784.33 ||8767.10 |
The Board of Directors has declared and paid the interim dividend of Rs.1/- per Equityshare of Re.1 each for the Financial Year ended 31st March 2017
Your Directors do not recommend any final dividend for the financial year ended on 31stMarch 2017 & decided that the interim dividend which is already declared and paid isthe final dividend.
TRANSFER TO RESERVES
The Company has not transferred any amount to Reserves for the Financial Year ended 31stMarch 2017.
During the year under review the Company has achieved the turnover of Rs. 19131.85Lakhs as compared to Rs. 16921.05 Lakhs during previous year. The turnover is increasedby 13.07% i.e; by Rs.2210.80 Lakhs Profit before tax increased by 27.54% i.e; byRs.473.24 Lakhs & Net Profit after tax increased by 29.34% i.e; by Rs.319.39 Lakhs.
The Exports (FOB) including export in INR during the year amounts to Rs.2622.21 Lakhsas against Rs. 2553.98 Lakhs achieved in the previous year. The export is increased by2.67% i.e; by Rs.68.23Lakhs.
The paid up equity capital as on 31st March 2017 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 & not made any provisionfor purchase of its own shares. During the year the Company has increased the authorizedshare capital from Rs.32500000/- to Rs.100000000/-
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 2016 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
The Company has not accepted any deposits from the public during the year.
LOANS GUARANTEES AND INVESTMENTS
The company had given short term loan to a company for their working capitalrequirements and the same has been received back during the year. The rate of interestcharged was 15%.
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 the Annual Return in form MGT 9 is annexedherewith as Annexure II.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiative under Corporate Social Responsibility (CSR) thecompany has mainly focused on education and health. The projects for which contributionhas been made are as under.
The company has contributed Rs.25 lakhs towards construction of 6 class rooms 8toilets borewell and water tank for the benefit of students at large. The company hasalso contributed Rs. 1.25 lakhs to a school for corpus fund.
The company has contributed Rs.11 lakhs towards dwelling facilities being constructedfor relatives of cancer patients and has also contributed Rs.1 lakh towards 5 beds forunderprivileged persons.
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 part ofthis Report of the Directors.
Mr. Rajkumar Modi and Mr. Suresh Mody Directors of the Company who retires by rotationat the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment to the Board.
During the year there was sad demise of the Company's Chairman and IndependentDirector Mr. Ranjan Dasgupta.
The details of the Directors being recommended for re-appointment are contained in theaccompanying notice of the ensuing Annual General Meeting.
KEY MANAGERIAL PERSONNEL
There is no change in the Key Managerial Personnel during the year.
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 weblink ishttp://www.modison.com/pdf/financial/2017/april/Details-of-familarization-programme-2016-17.pdf.
The Board of Directors duly met 5 times during the financial year from 1 April 2016 to31 March 2017. The dates on which the meetings were held are as follows :
26 May 2016 9 August 2016 14 November 2016 9 February 2017 and 17 February2017.
A separate report on Corporate Governance includes the detailed particulars of Board& Committee Meetings is annexed and forms 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 AND CO LLP (formerly known as M.L. Bhuwania & Co.) CharteredAccountants having firm registration No. 141484W/W100197 who are the statutory auditorsof the Company and retiring at the ensuing Annual general meeting pursuant to therequirement of rotation of Auditors under Section 139 of the Companies Act 2013.
Your Directors recommends for the appointment of M/s. Kanu Doshi and Associates LLPChartered Accountants as the statutory auditors of the Company at the ensuing AnnualGeneral Meeting to hold the office for a period of three years. The auditors haveconfirmed their eligibility and qualification for appointment as per the section 141 ofthe Companies Act 2013
ii) Audit Report
The report of the auditor's on Financial Statements for the Period ended 31stMarch 2017 issued by M L BHUWANIA AND CO LLP Chartered Accountants having firmregistration No. 141484W/W100197 contains emphasis of matter relating to inventoryvaluation which is selfexplanatory and does not contain any qualification.
iii) 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 2018 by the Boardof Directors
iv) Secretarial Auditor
Secretarial Audit was conducted during the year by the Secretarial Auditor RaginiChokshi & Co Practicing Company Secretary Mumbai in accordance with provisions ofSection 204 of the Companies Act 2013. The Secretarial Auditor's Report is enclosed andforms a part of this Directors Report. There are no qualifications or observations orremarks 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.
In the year 2014-2015 your company acquired M/s. Modison Contacts Private Limited forthe purpose 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 weblink ishttp://www.modison.com/pdf/financial/Material-Subsidiaries-Policy-MML.pdf. The subsidiarycompany has recorded a profit of Rs.92358/- during the Financial Year 2016-17.During theyear the Board of Directors reviewed the affairs of the subsidiary. In accordance withSection 129(3) of the Companies Act2013 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 Act 2013 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 the annual accounts the applicable accounting standards hasbeen followed along with proper explanation relating to material departures if any;
ii) appropriate accounting policies have been selected 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 as at 31st March 2017 and ofthe profit and loss of the Company for the said period;
iii) proper and sufficient care has been taken 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 annual accounts have been prepared on a going concern basis;
v) the internal financial controls to be followed by the company and that such internalfinancial controls are adequate and were operating effectively; and
vi) there is a proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and 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 Risk Management (BRM) framework to identify evaluate businessrisks and opportunities. This framework seeks to create transparency minimize adverseimpact on the business objectives and enhance the Company's competitive advantage. Thebusiness 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.
VIGIL MECHANISM/WHISTLE BLOWER 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 2016-17.
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.
During the year the company has appointed Mr. Sarvesh Shenoy Chartered Accountant asInternal 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
| ||G.L. MODI ||SURESH MODY |
|Mumbai 17 May 2017 ||Managing Director ||Director |
ANNEXURE I TO DIRECTORS' REPORT
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 onsmaller batch lots is not made thereby decreasing power consumption. Mainly with respectto Heat Treatment 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 ||41.43 |
| Recurring ||87.39 |
| T otal ||128.82 |
| Total R&D Expenses as a percentage of total T urnover ||0.67% |
C.FOREIGN EXCHANGE EARNINGS AND OUTGO :
a) Activities Relating To Exports:
The Company is contributing towards imports substitution in Electrical &Switchgear Industries and making the country self reliant in this regard.
|b) Total Foreign Exchange Used and ||Rs. In Lakhs |
|Earned (2016-2017) || |
|i) CIF Value of Imports: ||1718.50 |
|ii) Expenditure in Foreign Currency: ||138.19 |
|iii) Foreign Exchange earned: ||2586.18 |