modern india ltd Directors report

Dear Members,

Your Directors are pleased to present the 89thAnnual Report along with Audited Statement of Accounts for the Financial Year ended 31st March, 2023.

The Company has various business verticals inter alia Real Estate and Infrastructure Development, Power Generation, Background Verification, Commodities Trading, International procurement solutions amongst others. The shares of the company were delisted and the trading of the Companys securities ceased from 14th June, 2021.

We are the pleased to inform you that in month of January, 2023 the Company achieved the certification of Best Place to Work.

The year under review has been an eventful year, though overall the economic situation kept changing due to the international crises, be it the Ukraine Russia war or the meltdown in certain economies of the developed world consequent to this war and over scare of Covid making a comeback.

The GDP during 2022-23 is estimated at 7.2 percent as compared to a 8.9 percent estimated earlier. Indias exports of both goods and services have been exceptionally strong in 2022-23.

With regard to the Companys Subsidiaries are doing well wherein Modern International(ASIA) Limited has recorded a profit of US$ 125182 and the Business of the Verifacts Services Pvt ltd has continued to show upside and has recorded a profit of Rs 88.93 Lakhs.

The Company had entered into an Agreement with M/s. K. Raheja Corp Private Limited for redevelopment of property situated at Keshavrao Khadye Marg (Clerk Road) Mahalaxmi, Mumbai and in continuation of the said arrangement and being in requirement of funds to carry out the said development the Company had availed financial assistance from HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC LTD) to the tune of Rs. 250,00,00,000/- (Rupees

Two Hundred and Fifty crores Only) for the purpose of financing construction of its residential / commercial project on such terms and conditions as mutually agreed between the Company and HDFC Ltd, the said project is progressing as per plan and a soft launch of the same was done in November 2022.

The company has successfully received the accreditation of ISO 2009 : 2015

Along with development of plot D1 (earlier plot D) it had been decided to begin and complete the rehabilitation of the Chawls at Mahalaxmi. Company has decided to take the services of KRC as Project Management Company to advise, manage and implement development of rehabilitation portion of plot E. Currently talks are in progress with the chawl occupants and its expected that the PAAA will be signed soon and post that the work on redevelopment of the said site will also commence subject to obtaining necessary approvals from authorities and all the stake holders.

Subsequent to the reporting, small investors of the NSEL have been paid by the competent authority as per the orders of division bench of Bombay High Court.

Rs 1345.77 lacs is dues from NSEL the case continues to be sub-judiced

The 3 MW plant is fully operational and it Continues to generate power as per schedule.

During the year under review our Company has subscribed to the non-cumulative redeemable preference shares of Candescent Properties Private Limited, Verifacts Estates Private Limited, Ignatius Developers Private Limited, Alcyone Realtors Private Limited.

There are no changes in the nature of Business during the year under review.

No other material events occurred subsequent to the date of Financial Statements

The Company has earned profits this year under review and the Company wishes to share the happiness with shareholder of the Company therefore the Company recommends the Dividend at the rate of 100%(being 50% for the year 2022-23 and 50% for celebration of the Company completing 90years) on 37542750 shares of Rs.2/- each for the fully paid up for the year ended March 31, 2023."

During the year four Meetings of Board were held viz; on 30th May, 2022, 03rd August, 2022, 14th November, 2022, 10th February, 2023, and the gap between two Board meetings did not exceed 120 days.

The information pertaining to attendance of each director at the Board Meetings and at the last Annual General Meeting (AGM) and the number of companies and committees where he/she is a director/committee member are as under:

The Companies Act, 2013 requires that the Independent Directors of the Company meet at least once a year without the presence of Executive Directors, the Non-Executive Director or the Management or the Promoters of the Company.

The Independent Directors of our Company met once during the year on 29.03.2023

The Nomination and Remuneration Committee and the Board of Directors have carried out the annual performance evaluation of all the Directors including Independent Directors, Non-executive non-Independent Directors, Executive Directors and Chairman and Managing Director and the Board as a whole.

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013

The Companies Act, 2013 provides for the formation and duties of various committees of the Board, the Company in compliance with the Act, already has the following Committees in existence as on 31st March, 2023 and all the committees have specific roles, duties and responsibilities.

The following are the various Committees of the Board viz.

Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee and Investment and Finance Committee.

The Audit Committee was constituted in January, 2001 and has been reconstituted from time to time. The current strength of the Audit Committee is four members. All the members of the Audit Committee are Non-Executive Directors. Two-thirds of the members of the Committee are Independent Directors. All the members of Audit Committee are financially literate and possess accounting and related financial management expertise.

The Audit Committee consists of:

Shri. Anand Didwania Chairman

Shri. Pradip Kumar Bubna Member

Shri. S. D. Israni Member

Shri. Kaiwan Kalyaniwalla Member

The Chairman & Managing Director of the Company is a permanent Invitee of the Audit Committee. At the invitation of the Committee, representatives from various divisions of the Company, Internal auditors, Statutory Auditors and Chief Financial Officer also attend the Audit Committee meetings to respond to queries raised at the Committee meetings. Shri. Parind Badshah, SR. VP - CS & LEGAL acts as the Secretary to the Audit Committee.

During the year under review four meetings were held on 30th May, 2022, 03rd August, 2022, 14th November, 2022, 10th February, 2023 The meeting was attended by all the members of the Committee.

The Nomination and Remuneration Committee was constituted in April, 2002 and has been reconstituted from time to time. The Committee currently comprises of four directors where majority are Independent Directors. The Nomination and Remuneration Committee comprises:

Shri. S D Israni Chairman

Shri. Vijay Kumar Jatia Member

Shri. Anand Didwania Member

Shri. Kaiwan Kalyaniwala Member

The terms of reference of the Nomination and Remuneration Committee include reviewing and recommending the terms of remuneration payable to the Executive Directors, the Key Managerial Personnel (KMPs) based on the evaluation of their performance and senior management personnel including executives holding office of profit. The Committee also evaluates the performance of the Board of Directors. Shri. Parind Badshah, SR. VP - CS & LEGAL acts as the Secretary to the Nomination and Remuneration Committee.

The Company has Remuneration Policy for Directors, Key Managerial Remuneration and other employee formulated by the Committee for determining Qualification, Positive Attributes and Independence of a Director and others which is available on the website of the Company www.modernindia.co.in

During the year under review two meetings were held on 30th May, 2022 and 10th February, 2023. The meeting was attended by all the members of the Committee.

According to the provisions of section 178(5) of the Companies Act, 2013 and the Companies (Meetings of Board and its Powers) Rules, 2014, every company having more than 1000 shareholders/ debenture holders/ deposit holders and any other security holders is required to have a "Stakeholders Relationship Committee". The committee was constituted in June, 2002.

The Stakeholders Relationship Committee considers and resolves the grievances of security holders of the Company. The Committee consists of the following directors:

Shri. Anand Didwania Chairman

Shri. Vijay Kumar Jatia Member

Shri. Pradip Kumar Bubna Member

During the year, the Committee met once, on 14thNovember, 2022. The meeting was attended by all the members of the Committee.

The Company has formed a risk management committee (though not mandated) constituted in October, 2014, to evaluate the various risk factors faced by the organization and how the same can be mitigated. The Committee comprises of the following directors:

Shri. S. D. Israni Chairman

Shri. Vijay Kumar Jatia Member

Shri. Kaiwan Kalyaniwalla Member

During the year, the Committee met once, on 30thMay, 2022. The meeting was attended by all the members of the Committee.

The Investment and Finance Committee was constituted in August, 2017. The Committee currently comprises of five directors of the Company. The Investment and Finance Committee comprises:

Shri. Vijay Kumar Jatia Chairman and Managing Director

Smt. Gauri Jatia Director

Shri. Pradip Kumar Bubna Director

Shri. Sidhant Jatia Executive Director

Shri. Mudit Jatia Executive Director

The terms of reference of the said Committee is to exercise powers of investment as per limits approved by the Board of Directors of the Company, review the Companys financial policies, risk assessment and minimization procedures, approve opening and operation of Investment Management Accounts with Banks, Financial Institutions, PMS, etc., Approve Opening, Closing and changes in signatories of the regular accounts with the banks for the purpose of carrying out business operations of the Company, exercise powers to borrow fund as per limits approved by the Board of Directors for the purpose of working capital requirements and strategic investments, Review regularly and give recommendations about changes to the charter of the Committee, to delegate Authority from time to time to the executives/ Authorized personnel to implement the Committees decision, carry out any other functions as is mandated by the Board from time to time and/or enforced by any statutory notification, amendment or modifications as may be applicable.

All members of the committee attended the meeting which were held on weekly basis.

The Company earlier had a CSR Committee which was later dissolved as per the rules and regulations applicable to the company. It may also be noted that the Company currently does not fall under the criteria of Section 135(1) of the Companies Act, 2013 read with the Companies (CSR Policy) Rules, 2014 which mandates that CSR is applicable to the company satisfying any of the following criteria during the immediately preceding financial year: (i) net worth of rupees five hundred crore or more, or (ii) turnover of rupees one thousand crore or more, or (iii) net profit of rupees five crore or more. However, The year under review saw the company earning profits, whereby the Company has fallen under the purview of the Section 135 of the Companies, Act, 2013. Therefore the Board of Directors of the Company in its meeting held on 05.06.2023, Constituted a Corporate Social Responsibility Committee with following Members-

As the company was not earning profits and as per the notification of the Govt, the earlier CSR committee was dissolved and as there were no profits, there was no sum / amount available for carrying out CSR activities as prescribed under the Law. Therefore for the year under review NIL CSR Report is attached herewith as Annexure 3 The Company has also adopted the Policy on Corporate Social Responsibility

The Companies Act, 2013 envisages a Vigilance Mechanism and accordingly keeping in view the above a Whistle Blower Policy ("the Policy") has been formulated with a view to provide a mechanism for employees of the Company to approach

and report the Violation to :-

All complaints / reports under this Policy will be promptly and appropriately investigated, and all information disclosed during the course of the investigation will remain confidential, except as necessary to conduct the investigation and take any remedial action, in accordance with applicable law.

To reinforce the Companys position as an equal opportunity employer and in the light of the increasing gender diversity it was felt necessary to articulate the Companys commitment by providing a workplace free of sexual harassment and therefore Company has adopted a policy statement on prevention of sexual harassment which is in Compliance with the Sexual harassment (Prevention, Prohibition and Redressal) Act, 2013 and Supreme Court Directives.

The Internal Complaints Committee which was reconstituted by the Board of Directors of the Company in its meeting held on 14.11.2022, comprises of the following members :

Smt. Rani Mahey Presiding Officer

Smt. Renu Kapoor External Member

Smt. Pooja Maurya Member

Shri. Parind Badshah Member

The Committee organizes awareness programmers within the organization.

Detailed note on Internal Financial Control is given in the Management Discussion Analysis which a part of this report. The Statutory Auditors M/s. M. L. Sharma and Company., Chartered Accountants also carry out the Audit of Internal Financial Controls over Financial Reporting as required under the Act and the Auditors have given their report to the Board and based on which the Directors have stated in their Directors Responsibility Statement that the Internal Financial Control have been followed by the Company and that such Internal Financial Controls are adequate and are operating effectively.

With reference to the amount of‘ Rs 1345.77 Lakhs (net of Rs 107.35 lakhs recovered till date) is outstanding as trade receivables in respect of commodity trading transactions on NSEL, considering the uncertainties involved in making any reliable estimate of amount recoverable, provision, if any, will be considered at an appropriate time, other basis of resultant outcome. Until then the dues are considered good.

Modern International (Asia) Limited [MIAL] is actively involved in the B2B segment Business. MIAL sources products viz textile, machinery, furniture, luggage, building /construction material, gift articles etc. primarily from China and other Countries and exports it to its clientele in other countries. Impact of the pandemic took its toll on the revenue of the Company and the hesitancy of dealing with China continues hence trade took a hit however the Company has managed to do well by increasing its turnover.

The Company achieved sales/ turnover of USD11,656,653 for the year 2022-23 as against USD11,137,297 for the year 2021-22. The Company made a profit after tax of USD125182 as against a profit of USD96554 in the previous financial year Efforts are being made to further increase the turnover in the coming year. The Company will continue to monitor the situation closely and take appropriate action as per regulatory guidelines.

As informed earlier, Modern International (Vietnam) Company Ltd was incorporated on 17th October 2019 and it became step down subsidiary of our Company. Business is slowly picking up and it is expected that the Vitenam company will soon achieve its targeted potential.

The Company achieved revenues from sales of goods and rendering of services of VND345000000 for the year 2022-23 as against VND 12,00,00,000 for the year 2021-2022

Verifacts Services Private Limited, a wholly- owned subsidiary of Modern India Limited is a human resources consulting company providing background/ antecedents verification services. The Business continued to show an upside trend and looked positive, however in the middle of the year especially from the third quarter onward the business was hit by a downturn as the IT companies decided to trim their work forces and they delayed fresh recrutiments which in turn led to a drop in volume, however the Management is tackling this issue by also concerntrating on offering its services to various other industries

There were 857 Clients active on VIBE and 34 clients are using the system actively. 60 Vendors are also active on VIBE. The ISO 27001 Surveillance audit was completed in November with no major observations

Attrition was a cause of concern, it was high due to work pressure and better opportunities, but the challenges on this front are being met.

Steps have been taken to bring more efficiency in the system. Significant positive outcome from these initiatives and efforts would be reflected in the coming years.

During the year Chennai branch and Kolkatta branch has been expanded / enlarged to meet the demands of growth in these regions

Details of the Companies which have become / ceased to be its Subsidiary/ JV/ Associate Company.

During the year no other company became / ceased to be the subsidiary / JV / Associate Company. The company now has only two wholly owned subsidiary and one step down subsidiary.

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Sr No. Information in respect of each subsidiary

Modern International Verifacts Services Private (Asia) Limited(in USD) Limited (in Rs Lakhs)

the case of foreign subsidiaries

Vijay Kumar Jatia

Chairman and Managing Director DIN:00096977

M/S .Khandelwal Jain & Co. Chartered Accountants (FRN105049W ) the existing Statutory Auditor of the Company were appointed as auditor by the Members to hold office from conclusion of 88th Annual General Meeting until conclusion of 93rdAnnual General Meeting.

Report on Secretarial Audit for the year 2022-23 conducted by M/s. Parikh & Associates, Practicing Company Secretaries is annexed to this Report as an ANNEXURE -2.

In compliance with the provisions of Section 134 read with Companies (Accounts) Rules, 2014, a statement giving requisite information is given in ANNEXURE ‘A forming part of this Report.

FIXED DEPOSITS: During the year under review, the Company has neither accepted nor renewed any Fixed Deposits, under Section 73 & 74 of the Companies Act, 2013.

There are no significant and material orders passed by the regulators or Court or Tribunals impacting the going concern status and the Companys operations in future.

The Company have duly complied with the Provision of the Companies Act, 2013 and the Company has taken / given

Secured Borrowings (Non-Current): 78.96 Lakhs

Secured Borrowings (Current): 10630.81 Lakhs

unsecured Borrowings (Current): NIL secured current maturities of

long –term debt: 44.73 Lakhs

SECURED LOANS (Given): NIL

UNSECURED LOANS (given): 113.13 Lakhs

CURRENT INVESTMENTS: NIL

NON CURRENT INVESTMENTS: 17989.42 Lakhs

GUARANTEES: Corporate Guarantee for USD 5 million given to Indian Overseas Bank for credit facility availed by overseas Subsidiary Modern International (Asia) Limited.

Note: Corporate Guarantee of Rs 450 Crore given by Modern India Ltd to HDFC Ltd on behalf of K Raheja Corp Ltd.

Corporate guarantee received by the Company from K Raheja Corp Ltd of Rs 250 Crore for Credit Facility taken by the Company from HDFC Ltd.

SECURITIES EXTENDED: The guarantees are secured against Land and flats to be constructed and for other borrowings, the same is secured by Hypothecation of investments in units of Mutual Fund and land situated at Plot D1, Mahalaxmi, Mumbai

Risk is an integral and unavoidable component of business and the Management is committed to managing the risk in a proactive and effective manner. The Board of Directors in its Meeting held on 18.05.2015 constituted the "Risk Management Committee" and adopted the Risk Management Policy. The objective is to identify and mitigate the risk. The Company has adopted a systematic approach to mitigate risk associated with accomplishment of objective, operations, revenues and regulations.

The Board of Directors pursuant to Section 134 (3)(p) of the Companies Act, 2013 conducts an evaluation of the Board as a whole, its Committees as well as the performance of each individual director in the first meeting of the Board in the new financial year. The Independent directors at their meeting held in March 2015 had laid down the criteria / parameters for conducting the said evaluation which was accepted by the Board and thereafter the evaluation was conducted. The performance of the Directors and their role and the performance of the Committees were found satisfactory and in turn the overall performance of the Board was also satisfactory.

Cost Audit is not Applicable to the Company.

The Directors of the Board receive sitting fees for attending the meeting of the Board and its various Committees. Shri Vijay Kumar Jatia who is the Chairman and Managing Director of the Company pursuant to Section 196, 197 and the Amended Schedule V of the Companies Act, 2013, the remuneration of Rs 1.68 Crore per annum plus other perquisites as approved by the members of the Company. During the year Shri. Vijay Kumar Jatia drew a total remuneration of Rs 16210280/-.

In view of this, only one ratio of remuneration of the director (Managing Director) with the median of the employees is possible which is enclosed as ANNEXURE- 5.

The Company has not issued any sweat equity shares/Issue of Shares with Differential Rights/Issue of Shares under Employees stock option scheme during the year under review.

The Company has neither purchased nor given any loan to anyone for purchase of its shares.

The Company has not considered any proposal for buyback of shares during the year under review.

The Management Discussion and Analysis of the events, though not applicable to the Company but as a good governance, the management is of the view that the same needs to be disclosed and forms part of the Annual Report and is annexed to this Report as ANNEXURE - B

Your Company has taken the initiative of going green and minimizing the impact on the environment. The Company has been circulating the copy of the Annual Report in electronic format to all those Members whose email addresses are available with the Company. Your Company would encourage other Members also to register themselves for receiving Annual Report in electronic form.

Your directors wish to place on record their sincere thanks to the Valued Customers, Suppliers, Bankers, Central Government, State Governments and various Consultants and Business Associates for their continued support, co-operation and guidance during the year under review. Your directors also wish to thank their employees and executives at all levels for their valuable contributions.

Mumbai

Date:05.06.2023