DIRECTORS' REPORT TO THE MEMBERS OF MODISON METALS LIMITED The Directors have pleasure in presenting before you the Thirty Third Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2016 DIVIDEND : Your Directors do not recommend any final dividend for the financial year ended on 31st March 2016 & decided that the interim dividend which is already declared & paid is the final dividend. The Board of Directors in March 2016 has declared and paid the interim dividend of Re.1/- per Equity share of Re.1 each for the Financial Year ended 31st March, 2016. TRANSFER TO RESERVES: The Company has not transferred any amount to Reserves for the Financial Year ended 31st March 2016. OPERATIONS : During the year under review, the Company has achieved the turnover of Rs.16,921.05 Lakhs as compared to Rs.17,181.33 Lakhs during previous year. The turnover reduced by 1.51% i.e; by Rs.260.28 Lakhs, Profit before tax increased by 158.63% i.e; by Rs.1,054.13 Lakhs & Net Profit after tax increased by 136.46 % i.e; by Rs. 628.12 Lakhs. Earnings per share for the year 2015-16 is Rs.3.35. Book value now stands at Rs.32.04 per equity share of Re.1 each. EXPORTS: The Exports (FOB) including export in INR during the year amounts to Rs.2,553.98 Lakhs as against Rs.2,504.82 Lakhs achieved in the previous year. The export increased by 1.96% & i.e; Rs. 49.16 Lakhs. SHARE CAPITAL: The paid up equity capital as on 31st March 2016 stood at Rs. 3,24,50,000. During the year under review, the Company has not issued equity share with differential voting rights, sweat equity shares, employee's stock options & made any provision for purchase of its own shares. RESEARCH AND DEVELOPMENT : A state-of-the-art recognized R & D Division set up by the Company in Financial Year 2002-2003 got renewed in April, 2013 from Department of Science & Technology Industrial Research, New Delhi. The R & D Division is working for development of new product 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 capability building. 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 (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is enclosed as a part of this report. PARTICULARS OF CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO : Information required under Section 134 of the Companies Act,2013 read with Rule 8 of Companies(Accounts) Rules,2014 , regarding conservation of energy, technology absorption and 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 annexed herewith as Annexure II. CORPORATE SOCIAL RESPONSIBILITY : As part of its initiatives under "Corporate Social Responsibility" (CSR), the Company run Mohanlal Modi Hospital through Trust. The Company supported various social causes, extended medical aid to the needy and even contributed significantly to the hospitals. Scholarships have been given out to deserving candidates to help them progress and to see them through initial limitations of progress. The group has also committed to fight TB by donating towards the treatment and 5 beds for underprivileged people every year. 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 Governance Report. The Annual Report on CSR activities is attached as Annexure III and forms a part of this Report of the Directors. DIRECTORS : Mr. Kumar Jay Modi and Mr. B.B.Singh, Directors of the Company who retires by rotation at 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 the Company 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 Annual General Meeting and to be regularised in the ensuing Annual General Meeting. Your Directors state that Mr. Ashok Jatia, Director of the Company vides his letter dated 2nd November, 2015 informed that consequent upon the requirements of the Companies Act, 2013, he had met the criteria prescribed in Section 149 (6) of the said Act. Accordingly, Mr. Ashok Jatia is to be confirmed as an Independent Director in the ensuing Annual General Meeting. Also, Mr. Rakesh Singh is to be confirmed as a Whole time Director in the ensuing Annual General Meeting. The details of the Directors being recommended for appointment and re-appointment are contained 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 Company confirming 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 and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of the performance. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board. The performance evaluation of the Independent Director was carried out by the entire Board except concerned Independent Directors. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with evaluation process. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS : A familiarization program for independent directors as approved by the Board and details for the same is available on the Company's website. The web link is http://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 1st April, 2015 to 31st March, 2016. The dates on which the meetings were held are as follows: 27th May, 2015, 10th August, 2015, 2th November, 2015, 3rd February, 2016 and 9th March,2016. A separate report on Corporate Governance includes the detailed particulars of Board & Committee Meetings 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 employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered office of the company during business hours on working days of the company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the company secretary in advance. AUDITORS : i) Statutory Auditors : M/s M.L. Bhuwania & Co, Chartered Accountants are re-appointed as the Statutory Auditors of the Company to hold the office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting. The Auditors have confirmed that, their appointment, is as per Section 139 of the said Act be and is within the limits prescribed under Companies Act, 2013 and that they are not disqualified. There are no qualifications or observations or remarks made by the Auditors in their Report ii) Cost Auditors : M/s. N. Ritesh & Associates, Cost Accountants are appointed as Cost Auditors for auditing the cost records of your Company for the year ended 31st March, 2017 by the Board of Directors. iii) Secretarial Audit : A Secretarial Audit was conducted during the year by the Secretarial Auditor, M/s Ragini Chokshi & Co, Practicing Company Secretaries, Mumbai, in accordance with provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditor's Report is enclosed and forms a part of this Directors Report. There are no qualifications or observations 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 the Company which have occurred between the end of the financial year of the Company and the date of the report. SUBSIDIARY: Last Year, your company has acquired M/s. Modison Contacts Private Limited for the purpose of expansion of business, which is now, the subsidiary of your Company. The subsidiary is not a material subsidiary company. The material subsidiaries policy is available on Company's website and the web link is <http://www.modison.com/pdf/financial/Material-Subsidiaries-Policy-MML.pdf> The subsidiary company has recorded a loss of Rs.23,404/- during the Financial Year 2015-16. During the year, the Board of Directors reviewed the affairs of the subsidiary. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company, which forms part of this Annual Report. Further, a statement containing the salient features of the financial statement of our subsidiary is annexed as Annexure IV. In accordance with Section 136 of the Companies Act,2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of subsidiary is available on our website www.modison.com CORPORATE GOVERNANCE Your Company has taken adequate steps to adhere to all the stipulations laid down in Regulation 34 (3) read with Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on Corporate Governance is included as a part of this Annual Report. The Auditor's Certificate on its compliance 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 of information placed before them, the Directors state that: i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; ii. appropriate accounting policies have been selected and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31stMarch, 2016 and of the profit and loss of the Company for the said period; iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the 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 internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and vi. there are proper systems to ensure compliance with the provisions of all applicable 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's length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in form AOC-2 is not required. Further, there are no material related party transactions during the year under review with the promoters, Directors or Key Managerial Personnel. All related party transactions 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 policy on Related Party Transactions as approved by the Board is available on the Company's website www.modison.com. RISK MANAGEMENT The Company is exposed to the risk of price fluctuation of silver (raw material). The Company proactively manages this risk through hedging, inventory management. The Company's reputation for quality with robust marketing existence mitigates the impact of price risk on finished goods. The Company has a robust Business Risk Management (BRM) framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY The Company has adequate system of internal financial control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. WHISTLE BLOWER/ VIGIL MECHANISM POLICY In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Whistle Blower Policy for directors and employees to deal with instance of fraud and mismanagement, if any, has been established. The Whistle Blower Policy has been uploaded on 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 ( Prevention, Prohibition & Redressed) Act,2013 ('Act') and Rules made there under, your Company has adopted a policy for prevention of sexual harassment at work place and has constituted an Complaint Redressed Committee. During the year, the Company has not received any complaints on sexual harassment under the said Act. STOCK EXCHANGE The Company's equity shares are listed at BSE Limited. The Company confirms that it has paid 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 that would impact the going concern status of the Company and its future operations. INTERNAL AUDITOR Mr. Ajay Jain, Chartered Accountant is the Internal Auditor of the Company. ACKNOWLEDGEMENT Your Directors place on record their appreciation for the assistance and support extended by all Government Authorities, Financial Institutions, Banks, Consultants, Solicitors and Shareholders of the Company. The Directors express their appreciation for the 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 Managing Director PLACE : Mumbai, DATE 26 May 2016 |