The Directors present their Forty Sixth Annual report on the business and operations ofthe Company along with the Audited Statements of Accounts for the financial year endedMarch 312020.
1. FINANCIAL RESULTS
The highlights of the Financial Results are as under:
| ||2019-20 ||2018-19 |
|Revenue from operations ||38726.63 ||29484.54 |
|Other Operating Income ||137.14 ||142.67 |
|Total Income ||38863.77 ||29627.21 |
|Profit before financial expenses depreciation and tax ||768.20 ||552.96 |
|Less: Financial Expenses ||269.74 ||174.43 |
|Depreciation / Amortization ||137.70 ||128.79 |
|Profit before tax ||360.76 ||249.75 |
|Tax expense ||(101.81) ||160.36 |
|Profit after tax for the year ||462.57 ||89.39 |
|Other Comprehensive Income ||4.78 ||12.25 |
|Total Comprehensive Income ||467.35 ||101.64 |
|EPS (face value of Rs.10/- each) || || |
|Basic ||3.69 ||0.83 |
|Diluted ||3.69 ||0.83 |
No dividend is proposed for the financial year ended March 31 2020.
3. TRANSFER TO RESERVES
No amount is proposed to be transferred to reserves.
4. REVIEW OF OPERATIONS
Refer the Management Discussion and Analysis Report for the detailed information on theoperations of the Company.
5. EXTRACT OF ANNUAL RETURN
As per the requirements of Section 92(3) of the Act and Rules framed thereunder theextract of the annual return for 2019-20 in the prescribed Form No. MGT-9 which is a partof this report. The same is also available on www.modinaturals.org.
6. RELATED PARTY TRANSACTIONS
All related party transactions that were entered during the financial year were onarm's length basis and in the ordinary course of business and are in compliance with theapplicable provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. All related party transactions were placedbefore the Audit Committee and also for the Board approval wherever required.
There were no materially significant related party transactions made by the Companyduring the year that required shareholders' approval under Regulation 23 of the ListingRegulations. None of the transactions entered with related parties falls under the scopeof Section 188(1) of the Act. There are no transactions that are required to be reportedin Form AOC-2 hence said form does not form part of this report. However the details ofrelated party transactions are provided in Note 35 to the Financial Statements inaccordance with the Accounting Standards.
The Policy on RPTs as approved by the Board is uploaded on the Company's websitewww.modinaturals.com
7. AUDITORS AND AUDITORS' REPORT
Statutory Auditors : M/s Kashyap & Co. Chartered Accountants (Firm RegistrationNo. 011355C) the statutory auditors of the Company have been appointed at the 43rdannual general meeting held on September 29 2017 for a period of 5 years from theconclusion of 43rd Annual General Meeting upto the conclusion of 48thAnnual General Meeting to be held in the year 2022.
The statutory audit report for the year 2019-20 is annexed hereto and forms part of theAnnual Report. There are no qualifications made by the Auditors in their Report whichrequires any explanation from the Board of Directors of the Company. The Notes to Accountsreferred to in the Auditors' Report are self-explanatory and do not call for any furthercomments.
Secretarial Auditors : Pursuant to the provisions of Section 204 of the Companies Act2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014Mr. Deepak Bansal of M/s Deepak Bansal & Associates Company Secretaries wasappointed to undertake the Secretarial Audit of the Company for the financial year endedMarch 31 2020. The Report of Secretarial Auditor for the year ended March 31 2020 isannexed to the Directors' Report.
The said secretarial audit report does not contain any qualification reservation oradverse remarks or disclaimer made by the Secretarial Auditor and it is self-explanatory.Thus there is no need to give any further explanation or comment by the Board.
Cost Auditors : Pursuant to Section 148 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 the Board at its meeting held on 16.07.2020on the Audit Committee's recommendation approved the appointment of M/s. Manisha &Associates Cost Auditors (Firm Registration Number-000321) to audit the cost accounts ofthe Company for the financial year ending March 31 2021 at a remuneration of Rs. 60000/-plus applicable taxes and out of pocket expenses. Resolution seeking Member's ratificationfor the remuneration payable to M/s. Manisha & Associates Cost Auditors for thefinancial year 2020-21 is included at Item No.3 of the Notice convening the Annual GeneralMeeting.
The company is maintaining the Cost Records and is in the process to file the CostAudit Report for the financial year 201920 to the Central Government within the stipulatedtime. (i.e. within 180 days from the end of reporting year)
8. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars pursuant to section 134 (m) of the Companies Act 2013 is attached withthis report as Annexure-A.
9. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
During the year under review the shareholders at their meeting held on 30.09.2019approved the reappointment of Mr. Anil Modi as Managing Director w.e.f. 01.01.2020 Mr.Akshay Modi as Joint Managing Director w.e.f. 14.12.2019 and appointment of Mrs. AditiGupta as Whole-Time Director w.e.f. 14.08.2019.
Pursuant to the provisions of section 152 of the Companies Act 2013 Mr. Anil Modiretires by rotation and being eligible offers himself for re-appointment.
During the year under review Seven Board meetings were held and have been wellattended by the Directors. The details of board and its committees' meetings are providedunder the Corporate Governance Report which forms part of the Annual Report.
Pursuant to the provisions of Section 149 of the Act the Independent Directors havesubmitted declarations that each of them meet the criteria of independence as provided inSection 149(6) of the Act along with Rules framed thereunder and Regulation 16(1 )(b) ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("SEBI Listing Regulations"). There has been nochange in the circumstances affecting their status as Independent Directors of theCompany. Pursuant to Clause VII (1) of Schedule IV of the Companies Act 2013 theIndependent Directors had a separate meeting on February 12 2020.
During the year under review the Non-Executive Directors of the Company had nopecuniary relationship or transactions with the Company other than sitting feescommission and reimbursement of expenses incurred by them for the purpose of attendingmeetings of the Board/Committee of the Company.
The information as required to be disclosed under regulation 36(3) of the SEBI ListingRegulations 2015 in case of appointment /re-appointment of the directors is provided inthe Notice of the ensuing annual general meeting.
Key Managerial Personnel
Pursuant to provisions of Section 203 of the Companies Act 2013 the Key ManagerialPersonnel (KMP) of the Company are Mr. Anil Modi Chairman & Managing Director Mr.Akshay Modi Joint Managing Director and Mr. Pradeep Kapoor Chief Financial Officer andMr. Ankit Agarwal Company Secretary.
10. DIRECTORS' RESPONSIBILITY STATEMENT
As required under clause (c) of sub-section (3) of section 134 of the Companies Act2013 the board of directors to the best of their knowledge and ability state that:
i. in the preparation of the annual accounts for the financial year ended March 312020 the applicable accounting standards have been followed with proper explanationrelating to 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 ended onMarch 312020 and of the profit of the Company for the year ended on that date.
iii. the directors have 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. the directors have prepared the annual accounts on a going concern basis.
v. the directors have laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and operating effectively.
vi. the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
11. PARTICULARS ON REMUNERATION
Details as required under Section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedare attached with this report as Annexure-B.
The details of remuneration paid to the directors including executive directors of theCompany are given in Form MGT-9 forming part of this Report.
There was no employee during the year drawing remuneration exceeding the limits asprescribed under Rule 5(2) of the (Appointment and Remuneration of Managerial Personnel)Rules 2014. Hence the information under Rule 5(2) & 5(3) is not applicable.
12. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate Internal Control System consistent with the nature of businessand size of the operations to effectively provide for safety of its assets reliabilityof financial transactions with adequate checks and balances adherence to applicablestatues accounting policies approval procedures and to ensure optimum use of availableresources. These systems are reviewed and improved on a regular basis. It has acomprehensive budgetary control system to monitor revenue and expenditure against approvedbudget on an ongoing basis.
The Internal Auditor the Audit Committee as well as the Board of Directors conductfrom time to time an evaluation of the adequacy and effectiveness of the system ofinternal controls for financial reporting with respect to financial statements.
Details of internal financial controls and its adequacy are included in the ManagementDiscussion and Analysis Report which forms part of the Annual Report.
13. RISK MANAGEMENT
The Risk Management Policy of the company enables the company to proactively take careof the internal and external risks of the company and ensures smooth business operations.The company's risk management policy ensures that all its material and compliance riskexposures are properly covered and the company's business growth and financial stabilityis assured. Necessary information is provided under Management Discussion and AnalysisReport which forms part of the Annual Report.
14. PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code.
15. CORPORATE GOVERNANCE
Pursuant to SEBI Listing Regulations 2015 a separate chapter titled CorporateGovernance' has been included in this Annual Report along with the reports on ManagementDiscussion and Analysis and General Shareholder Information.
All Board members and Senior Management personnel have affirmed compliance with theCode of Conduct for the year 2019-20. A declaration to this effect signed by the ManagingDirector (CEO) of the Company is annexed to this Report.
The Managing Director and CFO have certified to the Board regarding the financialstatements and other matters as required under regulation 17 (8) of the SEBI ListingRegulations 2015.
The Certificate from the Company Secretaries in Practice of the Company regardingcompliance of conditions of corporate governance is annexed to this Report. Additionallyas required under Part C of Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended from time to time the Certificate from aCompany Secretary in practice that none of the directors on the Board of the Company havebeen debarred or disqualified from being appointed or continuing as Directors of Companiesby the Board / Ministry of Corporate Affairs or any such statutory authority is annexed tothis Report.
16. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY
The provisions of the Companies Act 2013 relating to Corporate Social Responsibilityare not applicable on the Company.
17. ANNUAL EVALUATION OF THE PERFORMANCE OF BOARD ITS COMMITTEES CHAIRPERSON &INDIVIDUAL DIRECTORS
The Company has laid down a process for evaluation of the Board and Committees of Boardas also evaluation of the performance of each of the Directors. The evaluation criteriainclude inter-alia structure of the Board qualifications experience and competency ofDirectors diversity in Board effectiveness of the Board process information andfunctioning Board culture and dynamics quality of relationship between the Board andmanagement meetings of the Board including regularity and frequency discussion anddissent corporate culture and values governance and compliance evaluation of riskamongst others. The criteria is based on the Guidance Note on Board Evaluation issued bythe Securities and Exchange Board of India on January 5 2017. The evaluation process isconducted and monitored by the Chairperson Nomination & Remuneration Committee (NRC)in consultation with the members of the committee. The Chairperson NRC on the basis ofthe feedback received from each of the Directors has one to one meeting with them.Thereafter briefs the Chairman of the Board on the outcome which in turn is discussed inthe Board meeting. The performance of the Independent Directors are also reviewed at theBoard meeting. For the year 2019-20 the Board evaluation has been conducted as per theprocess mentioned above.
18. REMUNERATION POLICY
Information regarding Directors' Remuneration Policy and criteria for determiningqualifications positive attributes independence of a director and other matters providedunder sub-section (3) of section 178 are provided in the Corporate Governance Report. TheRemuneration Policy is placed on the Company's website at www.modinaturals.com
19. WHISTLE BLOWER POLICY (VIGIL MECHANISM)
Your Company has established a "Vigil Mechanism" for its employees andDirectors enabling them to report any concerns of unethical behavior suspected fraud orviolation of the Company's Code of Conduct'. To this effect the Board has adopted aWhistle Blower Policy' (WBP) which is overseen by the Audit Committee. The policyprovides safeguards against victimization of the Whistle Blower. Employees and otherstakeholders have direct access to the Chairperson of the Audit Committee for lodgingconcerns if any for review.
During the year there were no instances of unethical behaviour fraud or violation ofthe company's code of conduct or ethics policy and no personnel have been denied access tothe audit committee. The details of establishment of such mechanism are disclosed on thewebsite of the Company at www.modinaturals.com.
20. PREVENTION OF SEXUAL HARASSMENT
We have zero tolerance for sexual harassment at workplace and have adopted a Policy onprevention prohibition and redressal of sexual harassment at workplace in line with theprovisions of the Sexual Harassment of Women at the Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules thereunder for prevention and redressal of complaintsunder the above Act. During the year under review the Company has Internal ComplaintsCommittee and no compliant was received from any employee under the said Policy.
There was no change in the nature of business of your Company during the year.
There are no loans guarantees and investments made by the Company u/s 186 ofthe Companies Act 2013 during the year under review. Your Company has neither acceptednor renewed any deposit during the year under review. There are no material changes andcommitments affecting the Company's financial position between the end of the financialyear to which this financial statement relates and the date of this report.
Neither the Statutory Auditors nor the Secretarial Auditors have brought to thenotice of the Audit Committee or the Board of Directors or the Central Government theoccurrence or brewing of any fraud in the Company.
There are no significant material orders passed by the regulators or courts ortribunals impacting the going concern
status and Company's operations in future. However Members attention is drawn to thestatement on contingent
liabilities commitments in the notes forming part of the Financial Statements.
The Company has complied with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.
The Company does not have any Subsidiary/Joint Venture/Associate Company.
Your Directors wish to thank employees customers partners suppliers and above allour shareholders and investors for their continued support and co-operation.
| ||For and on behalf of the Board |
| ||Sd/- |
| ||Anil Modi |
| ||Chairman and Managing Director |
|New Delhi September 02 2020 ||DIN:00187078 |