Modi Rubber Ltd.
|BSE: 500890||Sector: Auto|
|NSE: MODIRUBBER||ISIN Code: INE832A01018|
|BSE 16:01 | 27 Mar 2018||Modi Rubber Ltd|
|NSE 05:30 | 01 Jan 1970||Modi Rubber Ltd|
|BSE: 500890||Sector: Auto|
|NSE: MODIRUBBER||ISIN Code: INE832A01018|
|BSE 16:01 | 27 Mar 2018||Modi Rubber Ltd|
|NSE 05:30 | 01 Jan 1970||Modi Rubber Ltd|
Your Directors present the 42nd Annual Report together with the AuditedStatement of Accounts of the Company for the year ended 31st March 2015.
IMPLEMENTATION STATUS OF BIFR SCHEME
Your Company was discharged by BIFR vide its order dated 23. 02. 2010 which states asunder "The unimplemented provisions of the SS-08 for the unexpired period for thescheme would be implemented by the concerned agencies and their implementation would bemonitored by the Company". Further BIFR in a miscellaneous application No.
In this respect rehabilitation for Modinagar Tyre Factory (MTF) could not be achievedas yet. The matter for possession of MTF Plant is pending with Honble Allahabad HighCourt. The Plant continues to be in possession of the OL appointed by the Allahabad HighCourt in Modi Export Processors Limiteds (MEPL) winding up proceedings. Litigationis also pending with 3-4 creditors who have till date not accepted the dues as per schemesanctioned by the BIFR.
Your Company has been following up with Govt agencies/authorities/ department/Creditorsto provide relief and concessions and to accept settlement as per scheme sanctioned by theBIFR.
The Company has taken new initiatives to improve its long term prospects andperformance. These include: -
1. Your Company has been very vigorously taking actions to get re-possession ofCompanys properties which were occupied by illegal occupants/Ex- Employees. Effortsinclude legal recourse and also settlement as per BIFR Scheme wherever possible.
2. Company is taking several steps to utilize its real- estate resources and whereverpossible to put them to generate revenue.
3. Your company is also exploring additional avenues of investment in new projects injoint ventures.
During the year under review your company has recorded a net profit after tax Rs119.89 Lacs as compared to Rs 124. 21 Lacs in previous year on a total income of Rs 2540. 92Lacs as compared to 2278. 32 Lacs in the previous year. Income of your company is mainlyfrom guest house operations Interest & dividend.
Since there is no adequate profit; your Board does not recommend any dividend.
Your Company has not accepted any fixed deposits from public during the year underreview.
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORTS
Your Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements as set out by SEBI.
A detailed Management Discussion & Analysis Report and a Corporate GovernanceReport along with certificate from the statutory auditors of the Company in pursuance withcompliance Clause 49 of the Listing Agreement are attached and form part of this AnnualReport of the Company.
BOARD OF DIRECTORS
A) Appointment/Re-appointment of Directors
According to section 149 and other applicable provisions of the Companies Act 2013your Board is seeking appointment of Shri. Sanjiwan Sahni (DIN 01050255) as IndependentDirectors and he shall hold office for a term of 5 (five) consecutive years up to May 282020.
In accordance with the Companies Act 2013 Shri. Vinay Kumar Modi retires by rotationat the ensuing Annual General Meeting and being eligible has offered himself forre-appointment. Your Board has recommends his re-appointment.
B) Key Managerial Personnel
The Board of Directors of your Company has appointed Mr. Kamal Gupta as the ChiefFinancial Officer of the Company with effect from September 01 2014.
The Board of Directors of your Company has appointed Ms. Piya Modi as theWhole-Time-Director of the Company for a period of 3 years with effect from October 012014.
C) Meeting of the Board of Directors
During the financial year ended on March 31 2015 4 (four) Board Meetings and 1 (one)meeting of Independent Directors was held and the maximum time gap between any two Boardmeetings was less then 120 days. Further details of the meetings of the Board and itsCommittees are given in Corporate Governance Report forming part of the Annual Report.
D) Declaration by Independent Director(s)
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both undersub-section (6) of Section 149 of the Companies Act 2013 and under Clause 49 of theListing Agreement with the Stock Exchanges.
E) Board Evaluation
The Company has formulated a policy on performance evaluation of the Directors Boardand its Committees and other individual Directors which shall be based on inter aliacomponents like attendance effective participation domain knowledge access tomanagement outside Board Meetings and Compliance with the Code of Conduct vision andstrategy and benchmark to peers.
On the basis of policy for performance evaluation of Independent Directors BoardCommittees and other individual directors a process of evaluation was carried out.
The Company make presentations to the Board of Directors in order to familiarize themwith their roles rights responsibilities in the Company nature of the Industry in whichit operates Business models of the Company and related matters. Details of suchpresentations are available on companys website.
SUBSIDIARIES / JOINT VENTURES/ ASSOCIATE COMPANIES
The performance and financial information of the subsidiary companies /Joint Ventures / Associate Companies is disclosed in theConsolidated Financial Statement for the financial year ended March 31 2015.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the provisions of the Companies Act 2013 read with Clause 32 of theListing Agreement and Accounting Standard AS-21 on Consolidated Financial Statement AS-23on Accounting for Investments in Associates and AS-27 on financial reporting of interestsin joint ventures the audited consolidated financial statement for the year ended March31 2015 is provided in the Annual Report.
The details of the Audit Committee including its composition and terms of referencementioned in the Corporate Governance Report forms part of Annual Report.
All the recommendations made by the Audit Committee were accepted by the Board.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors Responsibility Statement it is hereby confirmed that:
i) in the preparation of the annual accounts for the financial year ended March 312015 the applicable Accounting Standards read with the requirements set out underSchedule III to the Companies Act 2013 have been followed and there are no materialdepartures from the same;
ii) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and pursuant to as to give a true andfair view of the state of affairs of the Company as at March 31 2015 and of the loss ofthe Company for the year ended on that date;
iii) the Directors have taken proper and sufficient care for maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv) the Directors have prepared the annual accounts of the Company for the financialyear ended March 31 2015 on a going concern basis;
v) the Directors have laid down internal financial control to be followed by theCompany and that such internal financial control are adequate and were operatingeffectively; and
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.
RISK ASSESSMENT/ MANAGEMENT
The Company has formulated and adopted a Risk Management Policy. Board of Directors ofthe Company is responsible for the direction and establishment of internal control tomitigate material business risks. The policy is framed to identify element of risks likemisstatement frauds etc and their mitigation for achieving its business objective and toprovide reasonable assurance.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted a CSR Committee to inter alia promote a comprehensive andintegrated development through social and economic transformation and the detailed Policyfor achieving this objective is available on Companys website.
During the year under review Company did not undertake any initiative due torehabilitation of unimplemented portion of revival scheme sanction by the BIFR. HoweverBoard is hopeful to carry out some initiative during the year.
The applicable disclosures as stipulated under the Companies (Corporate SocialResponsibility Policy) Rules 2014 is provided in Annexure I to this Report.
The Company promotes ethical behavior in all its business activities. Towards thisendeavor the Company has adopted a policy on vigil mechanism and whistle blower. Companyhas developed a Mechanism where any violation can be report to the Chairman of the AuditCommittee for appropriate resolution. The confidentiality of such reporting will bemaintained and they are not subjected to any discriminatory practice or victimization. TheAudit Committee shall overseas the Vigil Mechanism. The policy on vigil mechanism andwhistle blower is available on Companys website.
RELATED PARTY TRANSACTIONS
The contracts/ arraignment/ transitions by the company during the year under reviewwith related parties were in the ordinary course of business and on arms length basis anddo not attract the provisions of section 188 of the companies Act 2013.
During the year the Company had not entered into any contract/ arrangement/transactions with related parties which could be considered material in accordance withthe policy of the Company on materiality of related party transactions.
Suitable disclosure as required by the Accounting Standards has been made in the Notesto the Financial Statement. The policy on Related Party Transaction and determiningmaterial Subsidiaries as approved by the Board is uploaded on the companys website.
PARTICULARS OF LOAN GUARANTEES SECURITY OR INVESTMENTS
Details of Loans Guarantee Securities and Investments during the year under revieware given in the Notes to the financial statements pursuant to requirement of underSection 186 of the Companies Act 2013.
AUDITOR & AUDITORS REPORT
The Statutory Auditors M/s. PDM and Company Chartered Accountants (Firm RegistrationNo 007966N) New Delhi were appointed as Auditors of the Company for a period of threeyears at the 41th Annual General Meeting held on September 30 2014 and theappointment was subject to ratification at each Annual General Meeting. The Company hasreceived letter from them to the effect that their ratification of appointment ifconsidered will be within the prescribed limits under Section 141(3)(g) of the CompaniesAct 2013 and that they are not disqualified for holding the office of the Auditors.Accordingly the Board recommends ratification of their appointment as Statutory Auditorsof the Company by the Shareholders at the ensuing Annual General Meeting of the Company.
Auditors observations in their Report have been elaborately dealt with in theAuditors Report / Notes on Accounts. The same are selfexplanatory and do not need any more information/explanation.
Cost Accounting Record Rules and Cost Audit Report Rules are not applicable due to nonfunctional of MTF Plant.
SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
In terms of Section 204 of the Companies Act 2013 the Board of Directors of theCompany appointed M/s Sanjay Grover and Associates to conduct the Secretarial Audit. TheSecretarial Audit Report for the financial year ended March 31 2015 in the prescribedformat is attached and marked as Annexure II with this report. The Secretarial AuditReport is self-explanatory and do not call for any further comments. The SecretarialAuditors Report does not contain any qualification reservation or adverse remark.
The information required in terms of the provisions of Section 197(12) of the CompaniesAct 2013 read with Rules 5 (1) (2) and (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms part of this Report.(Annexure-III)
EXTRACT OF ANNUAL RETURN
Extracts of the Annual Return in the prescribed format is attached with this report andmarked as Annexure IV.
Since there was no production there is no information required to be given for energyconservation technology absorption fuel consumption etc. u/s 134(3) (m) of the CompaniesAct 2013. Information about foreign exchange earnings is nil and outgo is Rs 34. 15 Lacsduring the year under review
Your Directors place on record their sincere thanks for support and co- operation fromthe Honble BIFR/AAIFR Banks UP Government and other Government Authorities andshareholders during the year period review. Your Directors also appreciate services ofexecutives and staff of the Company for unstinted support in revival of the Company.
Annual Report on Corporate Social Responsibility (CSR) activities for the financialyear 2014-15.
The implementation and monitoring of the CSR Policy is in compliance with the CSRobjectives and policy of the Company.
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED 31st MARCH 2015
[Pursuant to section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
Modi Rubber Limited
Modi Nagar Uttar Pradesh - 201204
We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Modi Rubber Limited(hereinafter called the Company). Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing our opinion thereon.
The Company was declared as a Sick Industrial Undertaking within the provisions of SickIndustrial Companies ( Special Provisions) Act 1985 (SICA) by the Board of IndustrialFinancial Reconstruction (BIFR) on May 17 2006 as the net worth of the Company wasnegative as on March 31 2003. Thereafter BIFR appointed State Bank of India as OperatingAgency to formulate Rehabilitation Scheme for the revival of the Company. BIFR sanctionedthe Rehabilitation Scheme April 8 2008. Thereafter upon substantial implementation ofRehabilitation Scheme and on the basis of Audited Balance Sheet as on March 31 2009 BIFRvide its Order dated February 23 2010 discharged the Company from the purview of SICA anddirected that the unimplemented provisions of Rehabilitation Scheme would be implementedby the Company and the Company has been generally filing Status Reports with the BIFR onunimplemented portion of the Rehabilitation Scheme.
We report that
a) Maintenance of secretarial records is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
b) We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the secretarial records. Theverification was done on test basis to ensure that correct facts are reflected in thesecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.
c) We have not verified the correctness and appropriateness of the financial statementsof the Company.
d) Where ever required we have obtained the Management representation about thecompliances of laws rules and regulations and happening of events etc.
e) The compliance of the provisions of the Corporate and other applicable laws rulesregulation standards is the responsibility of the management. Our examination was limitedto the verification of procedures on test basis.
f) The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.
Based on our verification of the Companys books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of Secretarial Audit we hereby report that in our opinion the company hasduring the audit period covering the financial year ended on 31 st March 2015("Audit Period") complied with the statutory provisions listed hereunder andalso that the Company has proper Board processes and compliance mechanism in place to theextent in the manner and subject to the reporting made hereinafter:
We have examined the books papers minute books forms and returns filed and otherrecords maintained by the company for the financial year ended on 31st March2015 according to the provisions of:
(i) The Companies Act 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act 1956 (SCRA) and the rulesmade thereunder;
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act): -
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;
(c) *The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;
(d) *The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines. 1999;
(e) *The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;
(f) *The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993;
(g) *The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; and
(h) *The Securities and Exchange Board of India (Buyback of Securities) Regulations1998;
*No event under these regulations took place during the Audit period.
We have also examined compliance with the applicable clauses of the Listing Agreemententered into by the Company with BSE Limited.
During the audit period under review the Company has complied with the provisions ofthe Act Rules Regulations and Guidelines to the extent applicable as mentioned above.
(vi) As informed by the Management the Company was engaged in manufacture ofautomotive tyre tube & flaps and other allied products in its plants set-up in 1974at Modipuram Meerut and Modinagar. Pursuant to the BIFR Scheme Modinagar plant continuedto be with the Company for carrying out its Industrial activities. However ModinagarPlant of the Company is under the Seal of Official Liquidator (OL) attached to theAllahabad High Court appointed by Allahabad High Court pursuant to CP No. 7 of 2005 in"Punjab National Bank Vs Modi Export Processors Ltd " as the Company had takenIndustrial Shed and land on perpetual lease from Modi Export Processors Ltd on whichCompany had installed its Plant & Machinery for Modinagar Plant. The Company has filedSpecial Appeal No. 1917 of 2008 with the Allahabad High Court for re-possession from theOL which is pending for final adjudication before the Honble High Court. As theCompany is under rehabilitation scheme and all the manufacturing units of the Company areclosed there is no worker in the Company.
Presently the Company generates its income/revenue from rentals on real estate andGuest House at Modipuram Income from Fund Management/Investments and also dividend fromJoint Venture companies in which Company have Management & Equity Collaborations. Asinformed by the Management though there is no sector specific law applicable on theCompany but the provisions of Sick Industrial Companies (Special Provisions) Act 1985 areapplicable to the Company as it is under implementation of the provisions of theRehabilitation Scheme and the Company has been generally filing Status Reports with theBIFR on unimplemented portion of the Rehabilitation Scheme.
We further report that the Board of Directors of the Company is duly constituted withproper balance of Executive Directors Non Executive Directors and Independent Directors.The changes in the composition of the Board of Directors that took place during the periodunder review were carried out in compliance with the provisions of the Act.
Advance seven days notice is given to all directors to schedule the Board Meetings.Agenda and detailed notes on agenda are sent in advance of the meetings and a systemexists for seeking and obtaining further information and clarifications on the agendaitems before the meeting for meaningful participation at the meeting.
Board decisions are carried out with unanimous consent and therefore no dissentingviews were required to be captured and recorded as part of the minutes.
We further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
We further report that during the audit period there were no instances of:
(i) Public/Rights/Preferential issue of shares/sweat equity.
(ii) Redemption/Buy Back of securities.
(iii) Decisions by the Members in pursuance to section 180 of the Act.
(v) Foreign technical collaborations.
DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIESACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014
(i) The percentage increase in remuneration of each Director Chief Financial Officerand Company Secretary during the financial year 201415 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2014-15 and the comparison of remuneration of each Key Managerial Personnel (KMP) againstthe performance of the Company are as under:
*Sitting fees are Rs. 10000/- For attending each board meetingand Rs. 5000/- For attending each committees meeting
**For the period October 1 2014 to March 31 2015
***For the period September 1 2014 to March 31 2015
(ii) The median remuneration of employees of the Company during the financial year wasRs 5 45 248;
(iii) In the financial year 2014-15 the median remuneration of employees increased by9. 56%;
(iv) There were 24 permanent employees on the rolls of Company as on March 31 2015;
(v) Variations in the market capitalisation of the Company: The market capitalisationas on March 31 2015 was Rs. 7286. 79 lacs. and Rs. 4594. 94 lacs as on March 31 2014;
(vi) Average percentage increase made in the salaries of employees other than themanagerial personnel in the last financial year i. e. 2014-15 and comparison with thepercentage increase in managerial remuneration: 9. 91% Vs 12. 68%
(vii) It is hereby affirmed that the remuneration paid is as per Policy for DirectorsKey Managerial Personnel Senior Management and other Employees.