CORPORATE GOVERNANCE REPORT
A. COMPANY'S PHILOSOPHY
Your Company firmly believes in and continues to practice good Corporate Governance. The Company continuously endeavors to improve transparency, professionalism and accountability on an ongoing basis.
B. BOARD OF DIRECTORS
Modipon's Board as on 31st March, 2014 comprises of Four Directors, out of which one is Chairman and one is Managing Director and two Non-Executive Directors. The Company has a Whole-time Chairman and therefore one half of the Board should comprise of Independent Directors. Directors are appointed/ re-appointed with the approval of the Shareholders for a period of three years at a time and are eligible for re-appointment in terms of Article 105 of the Articles of Association of the Company. Out of two Non-Executive Directors, one Director is Managing Director of UPSIDC Limited and other Director is a Chartered Accountant and do not have any material pecuniary relationship with the Company. Keeping in view the criteria of Independent Director, i.e. material pecuniary relationships with the Promoters etc. and looking to the independent position held by the Managing Director of UPSIDC Limited and the Chartered Accountant, the Board considered them as Independent Directors as they satisfied the requirements of being independent in terms of amended Clause 49 of the Listing Agreement. Accordingly, the Composition of the Board is 75% of Non-Executive Directors to total number of Directors and 50% of Independent Directors to total number of Directors and therefore confirms to the requirement of Clause 49 of the Listing Agreement.
MEETINGS AND ATTENDANCE
During the year ended 31st March, 2014 four Board Meetings were held on 17.05.2013, 20.07.2013, 08.11.2013 and 14.02.2014. The last Annual General Meeting was held on 27.09.2013. Dr. M. K. Modi presided over the Annual General Meeting. The Attendance of the Directors was as under:
C. AUDIT COMMITTEE
Pursuant to revised Clause 49 of the Listing Agreement, the Audit Committee of the Board of Directors was reconstituted and now comprised of 2 Non-Executive Independent Directors, namely, (1) Mr. Manoj Singh, as Chairman; (2) Mr. O. P. Makkar, as Member & Mr. Manish K. Modi, as Member and Mr. A. K. Goel as Secretary of the Committee. The quorum of the Audit Committee is two Members or one-third of the strength of the Audit Committee, whichever is higher. Besides the Committee Members, Chairman of the Company, Group Head-Corp. Affairs and Partner/other Representatives of the Firms of Statutory Auditors also attend the Meetings on the invitation of the Chairman of the Committee. The scope of the Audit Committee includes the following:
- Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.
- Recommending to the Board, the appointment, reappointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees.
- Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
- Reviewing with the Management, the annual financial statements before submission to the Board for approval, with primary focus on the Matters required to be included in the Directors' Responsibility Statement; Changes, if any, in accounting policies and practices and reasons thereof; Major accounting entries; Significant adjustments; Compliance with listing and other legal requirements relating to financial statements; Disclosure of any related party transactions; Qualifications in the draft audit report.
- Reviewing, with the Management, the quarterly financial statements before submission to the Board for approval.
- Reviewing, with the Management, performance of statutory and internal auditors, adequacy of the internal control systems.
- Reviewing the adequacy of internal audit function, if any, including the structure of the Internal Audit Department, staffing and seniority of the Official heading the Department, reporting structure,coverage
the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control system of a material nature and reporting the matter to the Board.
- Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.
- To look into the reasons for substantial defaults in the payment to the depositors, debentureholders, shareholders (in case of non payment of declared dividends) and creditors.
- To review the functioning of the Whistle Blower mechanism, in case the same is existing.
- Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
During the year ended 31st March, 2014 four Meetings were held on 17.05.2013, 20.07.2013, 08.11.2013 and 14.02.2014
D. REMUNERATION COMMITTEE
The Remuneration Committee as reconstituted comprises of Mr. Manoj Singh as Chairman, Mr. O.P. Makkar and Mr. Manish K. Modi, as Members and Mr. A. K. Goel as Secretary of the Committee. The Non-Executive Directors are not paid any Commission or other Remuneration except Sitting Fees of Rs.5,000/- for each Meeting of the Board or Committee of the Board attended by them.
E. SHAREHOLDERS' GRIEVANCE COMMITTEE
The Shareholders'/Investors' Grievance Committee as reconstituted comprises of Dr. M. K. Modi and Mr. O. P. Makkar as Members and Mr. A. K. Goel as Secretary of the Committee. All Shareholders' Complaints received through SEBI/Stock Exchange and other Authorities have been resolved to the satisfaction of the Shareholders and none remained outstanding at the end of the year ended 31.03.2014 under report. Mr. A. K. Goel, Secretary of the Company is the Compliance Officer under Clause 49 of the Listing Agreement. The status of the Shareholders' Complaints are reported to the Board Members at every Board Meeting by the Compliance Officer.
(a) Directors' Interest in the Company:
Directors make full disclosures to the Board of Directors regarding the nature of their interest in the Companies in which they are Directors or Members. The Company's contracts with the Companies in which some of the Directors of the Company are interested as Director or Member are in the ordinary course of the Company's business without giving any specific weightage to them and full particulars of such contracts entered into with the Companies are entered in the Register of Contracts maintained under Section 184 of the Companies Act, 2013 and the same are placed in every Board Meeting forthe noting by the Directors.
In terms of Accounting Standard 18, the details of Related Party Transactions during the year have been set out at Note 16 of Schedule 18 annexed to the Balance Sheet and Profit & Loss Account. However, these are not having any potential conflict with the interest of the Company at large.
(b) Statutory Compliance:
There have been neither any instances of non-compliance by the Company nor any penalties or strictures imposed on the Company by the Stock Exchange, SEBI or any other Statutory Authorities on any matter related to capital markets during the last three years.
The Company is in compliance with all the mandatory requirements of revised clause 49 of the Listing Agreement.
(C) Non-mandatory requirements:
1. Chairman of the Board
The Company has a Chairman.
2. Remuneration Committee
The Company has constituted a Remuneration Committee, the details ofwhich are provided in this Report.
3. Shareholders' Rights
Half-yearly Financial Results including summary of the significant events are presently not being sent to Shareholders of the Company.
4. Audit Qualifications
Efforts are being made towards a regime of unqualified Financial Statements.
5. Training of Board Members
Considering the nature and risk profile of the Business of the Company vis-a-vis professional standing/business experience of the Board Members, they are eminently competent to discharge their duties.
6. Mechanismforevaluation of Non-Executive Board Members
There is no policy framed for evaluation of Non-Executive Directors.
7. Whistle Blower Policy
The question of instituting a formal policy in this respect may be considered after considering all relevant aspects, including the General Corporate Practice in India and also elsewhere. However, no personnel has been denied
close of the quarter. The Quarterly/Half Yearly Financial Results are generally published in the Newspapers, namely, Financial Express and BPN Times.
(b) Company's Results and Official News release are being uploaded on the Company's
website - www.modipon.net .
I. GENERAL SHAREHOLDER INFORMATION
1. Annual General Meeting
DateandTime : 30.09.2014at01.00P.M.
Venue : Alok Park Club, Alok Park, Modinagar-201 204
2. Financial Year
The Company follows April-March Financial Year. The Results for every Quarter beginning from April are generally declared within 45 days of the close of the Quarter as required under the Listing Agreement.
3. Book Closure
24th September, 2014 to 30th September, 2014 (both days inclusive).
4. Unpaid/Unclaimed Dividend
Pursuant to Section 205A of the Companies Act, 1956, Unclaimed Dividend for the Accounting years upto 31st December, 1993 have been transferred to the General Revenue Account of the Central Government with the Registrar of Companies, U. P., Kanpur and the Unclaimed Dividend for the Financial year ended 31st March, 1995 have been transferred to the Investors' Education and Protection Fund of the Central Government established under Section 205C (1) of the Companies Act, 1956 in February, 2003.
5. Listing of Equity Shares on Stock Exchanges and Payment of Listing Fees
Modipon's Shares are listed on the Bombay Stock Exchange Limited, Mumbai. The Company has paid the Listing Fees to the Bombay Stock Exchange Limited for the year 2014-15.
Stock Code (BSE) : 503776
Demat ISIN No. in NSDL & CDSL : INE170C01019
The quantity of shares transacted at the Stock Exchange after deleting the transfers inter se amongst the Promoters/ Shareholders is negligible.
6. Share Transfer System
As per the directions of SEBI, all Share Registry Work in respect of both Physical and Demat segments is being handled by a single Common Agency, i.e. Messrs MAS Services Limited, T-34, 2nd Floor, Okhla Indl. Area, Ph-II, New Delhi - 110 020, as the Registrar and Share Transfer Agent (RTA), for all aspects of Investors' servicing relating to Shares.
All transfers, transmissions etc. were processed and registered within the stipulated time. As on 31st March, 2014 no Shares were pending for transfer for more than 15 days. Pursuant to Clause 47(c) of the Listing Agreement with the Stock Exchange, Certificates on half-yearly basis have been received from a Company Secretary-in-Practice for due compliance of Share transfer formalities by the Company. Certificates have also been received from a Company Secretary-in-Practice for timely dematerialisation of the Shares of the Company and conducting a Secretarial Audit on a quarterly basis in respect of reconciliation of the Equity Share Capital of the Company
7. Dematerialisation of Shares
There were 3,267 Shareholders holding 69,20,019 shares in dematerialised form, which constitutes 88.29% of the Paid up Equity Share Capital of the Company as on 31st March, 2014. As the Trading in the Shares of the Company is permitted only in dematerialised form, it is advisable that the Shareholders who have shares in physical form get their shares dematerialised.
8. Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, their Conversion Dates and Iikely Impact on Equity
No GDRs/ADRs were issued by the Company and hence not outstanding.
9. Code of Conduct
The Company has framed the Code of Conduct for Members of the Board and Senior Management of the Company which is intended to focus the areas of ethical risk, provide guidance and mechanisms to report unethical conduct and help foster a culture of honesty and accountability. The Code of Conduct is available on the Company's Website.
The Company has also framed the Code of Conduct for Prevention of Insider Trading in the Securities of the Company by its Directors and designated Employees pursuant to SEBI (Insider Trading) Regulations, 1992. The Code, inter-alia, prohibits Purchase/ Sale of Shares of the Company by the Directors and designated Employees while in possession of unpublished price sensitive information in relation to the Company. Trading Window was closed four times during the year under report.
10. CEO/CFO Certification
Certificate in compliance with Clause 49(V) of the Listing Agreement signed by Dr. M. K. Modi, Chairman and Group Head-Corp. Affairs in respect of Modipon Limited was placed before the Board of Directors at its Meeting held on 14th August, 2014.
11. Plant Locations
Hapur Road, Modinagar- 201 204 (U. P.) (Manufacturing operations closed permanently)
12. Address for Correspondence
To contact RTA for all matters relating: to Equity Shares, i.e. Demat, Remat, Consolidation, Transmission, Issue of Duplicate Share Certificates, Change of Address, etc.
MAS Services Limited
T-34, Okhla Indl. Area, Ph-II, New Delhi - 110 020
Tel. 011-26387281-83 Fax 011-26387384
For Fixed Deposits and any other matters or in case of ,any query on Annual Report
Group Head-Corp. Affairs, ModiponLimited Modinagar - 201 204
Tel. 01232-661800, 661900 Fax 01232-661888