MODI INDUSTRIES LIMITED · Shri Manish Kumar Modi Shri Abhishek Modi Shri Santosh Kumar Aggarwal...

MODI INDUSTRIES LIMITED (1)

MODI INDUSTRIES LIMITED

82ndAnnual Report

andAccounts 2015-16

CONTENTS Page No.

Board of Directors, CFO, CS, 2Bankers, Auditors andRegistered OfficeNotice 3

Directors’ Report 9

Auditors’ Report 45

Accounts 55

Notes to the Accounts 59

Auditors’ Report on Consolidated 89Financial Statements

Consolidated Financial Statements 96

Notes to the Consolidated 100Financial Statements

(2) MODI INDUSTRIES LIMITED

BOARD OF DIRECTORS

MANAGING DIRECTORS Shri Mahendra Kumar ModiShri Umesh Kumar Modi

DIRECTORS Shri Krishan Kumar ModiShri Vinay Kumar ModiShri Rakesh Kumar ModiShri Manish Kumar ModiShri Abhishek ModiShri Santosh Kumar Aggarwal

CHIEF FINANCIAL OFFICER Shri Narayan Prakash Bansal

COMPANY SECRETARY Shri Vimal Prasad Gupta

BANKERS Allahabad BankPunjab National BankState Bank of India

STATUTORY AUDITORS M/s. P.R. Mehra & Co.,Chartered Accountants,(Firm Regn No. 000051N)56, Darya Ganj,New Delhi-110002.

COST AUDITORS M/s. M.K. Singhal & Co.,Cost Accountants(Firm Regn.No. 00074)‘Panchvati’, Opp. M.M. College,Modinagar-201204. (U.P.)

SECRETARIAL AUDITORS M/s. A.N. Jaiswal & Co., Company Secretaries,(CP No. 14629)RZ-38, FF, South Extention Part II,Near Jagaran Chowk, Uttam Nagar (W),New Delhi 110059.

REGISTERED OFFICE ModinagarDistrict Ghaziabad (U.P.)-201204.

NAME OF UNITS Modi Sugar MillsModi Vanaspati Mfg. Co.Modi Paint & Varnish WorksModi Gas & ChemicalsModi DistilleryModi Arc Electrodes Co.Modi Steels


MODI INDUSTRIES LIMITEDCIN - L15429UP1932PLC000469

Regd. Office : Modinagar - 201204. (U.P.)Tel: 01232-231755, 243115

Email : [email protected] : www.modiindustries.net

NOTICE

NOTICE is hereby given that the 82nd Annual General Meeting of Modi Industries Limited will be held on Thursday, the 29th September,2016, at 12:30 P.M., at Modi Industries Transit House (Modi Industries Complex), Modinagar, to transact the following business :

ORDINARY BUSINESS:

1. To receive, consider and adopt:

(a) the Audited Financial Statements of the Company for the financial year ended March 31, 2016, the Reports of the Board of Directorsand the Auditors thereon; and

(b) the Audited Consolidated Financial Statements of the Company for the financial year ended March 31, 2016 and the Auditors Reportthereon.

2. To appoint Directors, who retire by rotation at this Annual General Meeting and being eligible, offer themselves for re-appointment andto consider and, if thought fit, to pass, with or without modification(s), the following resolutions as Ordinary Resolutions:

(a) “RESOLVED that pursuant to Section 152(6) and all other applicable provisions, if any, of the Companies Act, 2013 and the rules madethereunder (including any statutory modification(s) and re-enactment thereof for the time being in force), Shri Vinay Kumar Modi (DIN00274605), who retires by rotation at this Annual General Meeting and is eligible for re-appointment, be and is hereby re-appointedas Director of the Company.”

(b) “RESOLVED that pursuant to Section 152(6) and all other applicable provisions, if any, of the Companies Act, 2013 and the rules madethereunder (including any statutory modification(s) and re-enactment thereof for the time being in force), Shri Rakesh Kumar Modi(DIN 00022386), who retires by rotation at this Annual General Meeting and is eligible for re-appointment, be and is hereby re-appointed as Director of the Company.”

3. To appoint Statutory Auditor and to fix their remuneration and, to consider and, if thought fit, to pass, with or without modification(s), thefollowing resolution as an Ordinary Resolution:

“RESOLVED that pursuant to the provisions of Section 139 and all other applicable provisions, if any, of the Companies Act, 2013 andthe rules made thereunder (including any statutory modification(s) and re-enactment thereof for the time being in force), M/s. P.R. Mehra& Co., Chartered Accountants (FRN 000051N), New Delhi, the retiring Auditors, be and are hereby re-appointed as Statutory Auditorsof the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting,on such remuneration as may be determined by the Board of Directors of the company.”

SPECIAL BUSINESS:

4. To consider and if thought fit, to pass, with or without modification(s), the resolution for approving the remuneration payable to Cost Auditorsas an Ordinary Resolution:

“RESOLVED that pursuant to the provisions of Section 148(3), and all other applicable provisions, if any, of the Companies Act, 2013 andrules made there under, (including any statutory modification(s) or re-enactment thereof for the time being in force), the consent of themembers be and is hereby accorded for payment of total remuneration of Rs. 40,000/- (including all expenses) + applicable Service Taxpayable to M/s. M.K. Singhal & Co., (Firm’s Regn. No. 00074) Cost Accountants, Modinagar, to conduct the audit of Cost Accountsmaintained by Sugar and Distillery units of the Company for the financial year 2016-17.”

5. To consider and if thought fit, to pass, with or without modification(s) the related party transactions & agreements for renewal of rent/lease/hire agreements as an Ordinary Resolution:

“RESOLVED that pursuant to the provisions of Section 188 and all other applicable provisions of the Companies Act, 2013 read with therules made there under (including any statutory modification(s) or re-enactment thereof for the time being in force) the consent of the


members be and is hereby accorded for ratification of the rent/lease/hire agreements and transactions for Cylinders/Flat/D.G. SET asalready entered by the Company exceeding the threshold limits as specified in Rule 15 (3) of the Companies (Meetings of Board and itsPowers) Rules, 2014 with the respective related parties as mentioned herein below:

Sl. Directors / KMP who is related Related Party (RP) Effective date of Rent / AmountNo. and nature of relation Lease / Hire Agreement (` )

1. Shri Manish Kumar Modi is common Weld Excel India Limited Renewed w.e.f. 1st June, 2015 for five 45/- perdirector and Shri Mahendra Kumar years for 2200 Cylinders taken/to be Cylinder perModi as relative of director. taken on operating lease rent against Month.

security deposit @ Rs. 2000/- percylinder.

2. Shri Umesh Kumar Modi and Win Medicare Private Ltd. With effect from 15th March, 2016 8,000/-Shri Abhishek Modi are common for eleven months for lease rent income Per Monthdirectors. of Flat No. A-1, Suresh Park, Modinagar.

3. Shri Umesh Kumar Modi and SBCE Bio Energy Limited. D.G. SET (500KVA/400KW Electric 67,000/-Shri Abhishek Modi are common Generating Set) taken on hire w.e.f. Per Monthdirectors. 2nd November, 2015 for five years.

RESOLVED FURTHER that Shri Mahendra Kumar Modi (DIN-00014594), Managing Director of the company be and is herebyauthorized to execute and/or renew Rent/Lease Agreement as mentioned at Serial No.1 above, further time to time, on same termsand conditions, or cancel the agreement, and to do all acts, deeds, things and to take all such steps as may be necessary.RESOLVED FURTHER that Shri Umesh Kumar Modi (DIN-00002757), Managing Director of the company be and is hereby authorizedto execute and/or renew Rent/Lease/Hire Agreements as mentioned at Serial No. 2 & 3 above, further time to time, on same termsand conditions, or cancel the agreement, and to do all acts, deeds, things and to take all such steps as may be necessary

By Order of the Board of DirectorsFor Modi Industries Limited

Vimal Prasad GuptaCompany Secretary

Place : Delhi (FCS – 6380)Dated: 22nd August, 2016

Regd. Office:Modinagar - 201204. (U.P.)Tel: 01232-231755, 243115CIN - L15429UP1932PLC000469Email : [email protected]: www.modiindustries.net

NOTES :

1 A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE ON POLL ON HIS /HER BEHALF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. Pursuant to Section 105 of the Companies Act, 2013,a person can act as a Proxy on behalf of not more than fifty members holding in aggregate, not more than ten percent of the total sharecapital of the Company. Members holding more than ten percent of the total share capital of the Company may appoint a single personas Proxy, who shall not act as a Proxy for any other Member. The instrument of Proxy, in order to be effective, should be deposited at theRegistered Office of the Company, duly completed and signed, not later than 48 hours before the commencement of the meeting. A ProxyForm is annexed to this Report. Proxies submitted on behalf of limited companies, societies, etc. must be supported by an appropriateresolution/authority, as applicable.

2. SEBI vide its Circular No. CIR/MRD/DSA/5/2015 Dated 17th April, 2015 provides that the exclusively listed companies which fail to obtainlisting in any other nationwide stock exchange will cease to be a listed company and will be moved to the Dissemination Board by theexisting stock exchange. Now your Company has been moved to the Dissemination Board of NSE, hence become/deemed to be unlistedCompany. Therefore the Listing Agreement/Obligations are not mandatorilly applicable to your Company, for the time being till the furtherguidelines are issued by the SEBI in this regard.


3. An Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 relating to the Special Business to be transacted at theAnnual General Meeting is annexed hereto.

4. Brief resume of Directors seeking reappointment at the Annual General Meeting are annexed hereto.

5. The Register of Members of the Company will remain closed from 23rd September, 2016 to 29th September 2016 (both days inclusive).

6. All documents referred to in the accompanying Notice are open for inspection at the Registered Office of the Company on all working days,except Saturday, Sunday and Holidays, between 9.00 A.M. to 11.00 A.M. upto the date of the Annual General Meeting.

7. Shareholders are requested to intimate change in their address, if any, to the company.

8. Share-holders can also register their email ID with the Company for communication through electronic mode.

9. The Securities and Exchange Board of India (SEBI) has mandated submission of Permanent Account Number (PAN) by everyparticipant in securities market. Members holding shares in physical form can submit their PAN details to the Secretarial Department ofthe Company.

10. For convenience of the Members and proper conduct of the meeting, entry to the meeting venue will be regulated by Attendance Slip, whichis enclosed with this Annual Report. Members are requested to sign at the place provided on the Attendance Slip and hand it over at theRegistration Counter at the venue.

11. Members desiring any information relating to the accounts are requested to write to the Company well in advance so as to enable themanagement to keep the information ready.

12. In case of joint holders, attending the meeting, only such joint holder who is higher in the order of names, will be entitled to vote at theMeeting.

13. Pursuant to Section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management and Administration) Rules, 2014, theCompany is pleased to provide the facility to Members to exercise their right to vote on the resolutions proposed to be passed at AGM byelectronic means. The Members, whose names appear in the Register of Members as on Thursday, the 22nd September, 2016, i.e. thedate prior to the commencement of book closure, are entitled to vote on the Resolutions set forth in this Notice. The members may casttheir votes on electronic voting system from place other than the venue of the meeting (remote e-voting). The remote e-voting period willcommence at 9.00 a.m. on Monday, the 26th September, 2016 and will end at 5.00 p.m. on Wednesday, the 28th September, 2016. TheMembers attending the AGM who have not cast their vote by remote e-voting shall be eligible to vote at the AGM. The Company hasappointed Shri Amar Nath Jaiswal, Practicing Company Secretary, to act as the Scrutinizer, to scrutinize the entire e-voting process in afair and transparent manner. The Members desiring to vote through remote e-voting are requested to refer to the detailed procedure givenhereinafter.

PROCEDURE FOR REMOTE E-VOTING:

I. The Company has entered into an arrangement with National Securities Depository Limited (NSDL) for facilitating remote e-votingfor AGM. The instructions for e-voting are as under:

On receipt of the physical copy of the Notice of AGM and Attendance Slip by the Shareholders:

(i) Initial Password is provided, as follows, on the Attendance Slip.

EVEN(Remote E-Voting Event Number) USER ID PASSWORD NO. OF SHARES

(ii) Launch an internet browser and open https://www.evoting.nsdl.com/

(iii) Click on Shareholder - Login.

(iv) Insert ‘User ID’ and ‘Initial Password’ as noted in step (i) above and click on ‘Login’.

(v) Password change menu will appear. Change the Password with a new Password of your choice with minimum 8 digits/charactersor combination thereof. Please keep a note of the new Password. It is strongly recommended not to share your Password withany person and take utmost care to keep it confidential.

(vi) Home page of remote e-voting will open. Click on e-Voting - Active Voting Cycles.


(vii) Select ‘EVEN’ of Modi Industries Limited.

(viii) Now you are ready for remote e-voting as ‘Cast Vote’ page opens.

(ix) Cast your vote by selecting appropriate option and click on ‘Submit’. Click on ‘Confirm’ when prompted.

(x) Upon confirmation, the message ‘Vote cast successfully’ will be displayed.

(xi) Once you have confirmed your vote on the resolution, you cannot modify your vote.

(xii) Institutional shareholders (i.e. other than individuals, HUF, NRI, etc.) are required to send scanned copy (PDF/JPG Format)of the relevant Board Resolution/ Authority Letter, along with attested specimen signature of the duly authorizedsignatory(ies) who are authorised to vote, to the Scrutinizer by an e-mail at [email protected] with a copy marked [email protected].

II. In case of any queries, you may refer to the ‘Frequently Asked Questions’ (FAQs) and ‘ remote e-voting user manual’ available in thedownloads section of NSDL’s remote e-voting website https://evoting. nsdl.com.

III. The voting rights shall be as per the number of equity shares held by the Member(s) as on Thursday, the 22nd September, 2016, beingthe cut off date. Members are eligible to cast vote electronically only if they are holding shares as on that date.

IV. Members who have acquired shares after the dispatch of the Annual Report and before the book closure may obtain the user ID andPassword by sending a request at [email protected] or RTA for e-voting purpose M/s MAS Services Limited.

However, if you are already registered with NSDL for e-voting, then you can use your existing user ID and password for casting yourvote. If you have forgotten your password, you can reset your password by using “Forgot User Details/Password” option availableon www.evoting.nsdl.com or contact NSDL at the following toll free no. 1800-222-990.

V. A member may participate in the AGM even after exercising his right to vote through remote e-voting but shall not be allowed to voteagain at the AGM.

VI. Shri Amar Nath Jaiswal, Practicing Company Secretary (Membership No. ACS-19000 & CP No. 14629) proprietor of M/s A. N. Jaiswal& Co., has been appointed for as the Scrutinizer for providing facility to the members of the Company to scrutinize the voting andremote e-voting process in a fair and transparent manner.

VII. The Chairman shall, at the AGM, at the end of discussion on the resolutions on which voting is to be held, allow voting with theassistance of scrutinizer, by use of “Ballot Paper” for all those members who are present at the AGM but have not cast their votes byavailing the e-voting facility.

VIII. The Scrutinizer shall after the conclusion of voting at the AGM, will first count the votes cast at the meeting and thereafter unblockthe votes cast through remote e-voting in the presence of at least two witnesses not in the employment of the Company and shallmake, not later than three days of the conclusion of the AGM, a consolidated scrutinizer’s report of the total votes cast in favour oragainst, if any, to the Chairman or a person authorized by him in writing, who shall countersign the same and declare the result ofthe voting forthwith.

IX. The Results declared alongwith the report of the Scrutinizer shall be placed on the website of the Company www.modiindustries.netand on the website of NSDL immediately after the declaration of result by the Chairman or a person authorized by him in writing.

INFORMATION OF DIRECTOR RETIRING BY ROTATION SEEKING REAPPOINTMENT AT THIS ANNUAL GENERAL MEETING AREGIVEN HEREUNDER:

BRIEF RESUME, EXPERIENCE AND OTHER DIRECTORSHIP:

ITEM NO. 2(a)

Shri Vinay Kumar Modi

Shri Vinay Kumar Modi (DIN 00274605) has been a director of the Company since 29th April, 1967. He is a first class Bechelor of Technology(Chemical Engineering) from the Indian Institute of Technology, Kanpur. He is a leading industrialist and has vast experience in variousindustries. He holds directorship/ membership of Committees of the Board in the following other Public Limited Companies:

1. Gujarat Guardian Limited.2. Modi Rubber Limited

The Company has received from Shri Vinay Kumar Modi (i) consent in writing to act as Director in Form DIR-2 pursuant to Rule 8 ofCompanies (Appointment & Qualification of Directors) Rules, 2014, (ii) intimation in Form DIR-8 in terms of Companies (Appointment &


Qualification of Directors) Rules, 2014 to the effect that he is not disqualified under sub section (2) of section 164 of the Companies Act,2013.

He holds 25,477 Equity Shares and 8 Redeemable Cumulative Preference Shares of the Company in his name.

None of the Directors, Key Managerial Personnel (KMP) and their relatives except Shri Vinay Kumar Modi (himself) and his real brothersShri Krishan Kumar Modi and Shri Umesh Kumar Modi are, in any way concerned or interested in passing of the said resolution.

On recommendation of Nomination and Remuneration Committee, the Board of Directors commends the resolution, as set out for approvalof the shareholders as an ordinary resolution.

ITEM NO. 2(b)

SHRI RAKESH KUMAR MODI

Shri Rakesh Kumar Modi (DIN 00022386) has been a Director of the Company since 30th January, 1996. He is a Commerce Graduate andhas extensive industry experience. He is not a Director / Committee Member of any other Public Limited Company.

The Company has received from Shri Rakesh Kumar Modi (i) consent in writing to act as Director in Form DIR-2 pursuant to Rule 8 ofCompanies (Appointment & Qualification of Directors) Rules, 2014, (ii) intimation in Form DIR-8 in terms of Companies (Appointment &Qualification of Directors) Rules, 2014 to the effect that he is not disqualified under sub section (2) of section 164 of the Companies Act,2013.

He holds 48901 equity shares and 10 Redeemable Cumulative Preference Shares of the company in his name.

None of the Directors, Key Managerial Personnel (KMP) and their relatives except Shri Rakesh Kumar Modi (himself) are, in any wayconcerned or interested in passing of the said resolution.

On recommendation of Nomination and Remuneration Committee, the Board of Directors commends the resolution, as set out for approvalof the shareholders as an ordinary resolution.

EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESS PURSUANT TO SECTION 102(1) OF THE COMPANIES ACT,2013

ITEM NO. 4

On recommendation of Audit Committee, Board has appointed M/s. M.K. Singhal & Co., (Firm’s Regn. No. 00074) Cost Accountants,Modinagar, as Cost Auditors for the financial year 2016-17 to conduct the audit of Cost Accounts in respect of Sugar and Distillery units ofthe company subject to approval of remuneration by share holders.

Proposed remuneration for the financial year 2016-17 is mentioned below:

Name of the unit Proposed remuneration (including all expenses) PlusService Tax to be paid to Cost Auditors. (`)

(1) (2)

Sugar 25,000.00

Distillery 15,000.00

Total 40,000.00

Pursuant to the provisions of Section 148(3) of the Companies Act, 2013 remuneration of Cost Accountants will be finally determined by themembers of the company in the General Meeting.

Your directors recommend the resolution for your approval as an Ordinary Resolution.

None of the directors of the Company are concerned or interested in the Resolution as set out in item no. 4.

ITEM NO. 5

Section 188(1) of the Companies Act, 2013 read with MCA General Circular No. 30/2014 regarding clarification on related party transactionsand vide Notification GSR 590(E) dated 14-08-2014 provides that the agreement to be entered into with companies, in which Director orRelative of Director are Director or otherwise interested, could be entered into only with the consent of the Board and in some cases withthe approval of the members.


Your directors have approved the lease/rent/hire agreements and transactions in their meeting held on 22nd August, 2016 subject toapproval of the shareholders. Your directors recommend the resolution for your approval as an Ordinary Resolution.

The particulars of the transactions and agreements pursuant to the provisions of Section 188 and the Companies (Meetings of Board andits Powers) Rules, 2014 are given in the resolution no. 5 of the notice. The respective agreements & transactions are entered on arm’slength basis and all factors relevant to the respective agreements & transactions have been considered by the Board.

It is further informed that members who are interested as related parties in the resolution as set out at item no. 5 shall not be entitled to voteon this resolution. Directors recommend the resolution set forth at item no. 5 for approval of the Members.

Except directors as mentioned in the resolution no. 5 and their relatives, no other director or Key Managerial Personnel or their relatives,are concerned or interested, financially or otherwise, in passing of this resolution.

By Order of the Board of DirectorsFor Modi Industries Limited

Vimal Prasad GuptaCompany Secretary

Place : Delhi (FCS – 6380)Dated: 22nd August, 2016

Regd. Office:Modinagar - 201204. (U.P.)Tel: 01232-231755, 243115CIN - L15429UP1932PLC000469Email : [email protected]: www.modiindustries.net


DIRECTORS’ REPORTToThe Members,The Directors of your Company hereby present the 82nd Annual Report together with the Audited Financial Statement of the Companyalong with Auditors’ Report thereon for the year ended on 31st March, 2016.The working results of the year are summarized as under:

( ` in Lac)DESCRIPTION Standalone Consolidated

YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED31.03.2016 31.03.2015 31.03.2016 31.03.2015

Revenue from operations (net of excise duty) 30,872.63 33,779.84 30,872.63 33,779.84Other Income 549.90 640.33 552.13 642.51Total Revenue 31,422.53 34,420.17 31,424.76 34,422.35Loss before Depreciation, Finance Costs,Exceptional Items & Tax 6.78 841.19 17.95 840.14Add:Finance Costs 644.04 1,228.39 644.04 1,228.39Depreciation 334.51 435.92 334.51 435.92Loss before Exceptional Item & Tax 985.33 2,505.50 996.50 2,504.45Exceptional items:(a) Refund of Commission on Sugar cane

purchase for 2012-13. (249.18) - (249.18) -(b) Provision for Diminution in the value of

Long Term Investment. 148.80 - 148.80 -Tax Expenses (Net) - - 0.28 0.28Minority Interest - - (0.02) -Loss for the period 884.95 2,505.50 896.38 2,504.73

DIVIDEND:

Directors regret their inability, in view of the losses, to recommend any dividend for the year.

PERFORMANCE OF THE UNITS FOR THE YEAR UNDER REPORT:

(a) SUGAR UNIT: The cane crushing in the year under review was 58.59 lacs qtls as against 71.40 lacs qtls in previous financial year.Sugar recovery in the year under review increased from 9.469% to 10.178%. Sugar Cane Price remained same as of last Season ofRs.280/- per qtl. Working results of the unit are better as compared to last year on account of sugar price realization and increase insugar recovery.

(b) DISTILLERY UNIT: During the year under review, the production of Rectified Spirit was 3148 Kl. as compared to last year 4328 Kl.In the year under review, there was significant improvement in production of Indian Made Foreign Liquor (IMFL) from 106990 casesto 196740 cases, which has contributed in improvement in profit of the unit.

(c) ELECTRODE UNIT: Our contribution is better in comparison with the previous year, however bottom line is declined. As decision hasbeen taken not to supply material on credit, our sale has declined but we have drastically reduced our over dues. In the long run weare hopeful that cash sale will help us to maintain healthy financial condition.

(d) PAINT UNIT: The unit registered increase in turnover by 15% compared to last year. The EBIDT is better compared to last year.

(e) GAS UNIT: We are managing to keep our figures positive even after the tough competition from the market and with lack of resources.But we still have a scope to do even better than this.

FIXED DEPOSITS:

The deposits of 1184 depositors amounting to ` 75.20 Lac including interest thereon till the date of maturity was claimed, but remainedunpaid as on 31st March, 2016. However, the company made attempts in the past to make payment to all depositors but could not succeedin certain cases, since the depositors were not traceable at the recorded addresses with the Company as were provided by the depositorsthemselves.


The deposits of 160 depositors amounting to ` 9.72 Lac including interest thereon till the date of maturity remained unclaimed as on 31stMarch, 2016.

During the year under review, company has paid ` 0.21 Lac to 3 depositors towards their deposits, this includes interest upto the date ofmaturity as per the conditions laid down in the scheme of acceptance of public deposits. Company has not accepted any fresh depositsduring the year under review,

The Company is a sick industrial company as declared by the Hon’ble BIFR vide their order dated 14th March, 1991 in terms of Section3(1)(o) of SICA. The rehabilitation scheme of the company is still pending and the payment to depositors will be made as per final ordersof Hon’ble BIFR/AAIFR.

With regard to payment of public fixed deposits, as per Section 74 of the Companies Act, 2013, deposits accepted before the commencementof the Act (i.e. 1st April, 2014) shall be repaid within one year from the commencement of the Act. The Company had filed a petition with theCompany Law Board on 31st March, 2015 seeking extension of time for repayment of public fixed deposits. Company Law Board vide itsorder dated 21st April, 2016 dismissed the Company’s petition against which Company has filed an appeal with Hon’ble High Court ofAllahabad on 23rd July, 2016. The matter is still pending before the Hon’ble High Court of Allahabad.

DEBENTURES:

Debentures worth `535.21 Lac are due for payment as on 31st March, 2016. The Company will repay to debenture-holders as per finalorders of Hon’ble BIFR/AAIFR that may be passed.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, in respect of all units of the company, (excluding BalanceSheet of Steel Unit - refer Note 27(4) of Annual Accounts) it is hereby confirmed:

( i) that in the preparation of the annual accounts, the applicable accounting standards have been followed and wherever requiredproper explanations relating to material departures have been given;

( ii) that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and ofthe losses of the company for that period;

(iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) that the annual accounts have been prepared on a going concern basis.

(v) Even though the Company has in place adequate internal audit system which is commensurate with the operations of the Company,the testing and evaluation of internal financial control over financial reporting as mentioned in the guidance note of Institute ofChartered Accountants of India is yet to be undertaken. However no material weakness was observed by the internal auditors of theCompany.

(vi) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systemswere adequate and operating effectively.

DIRECTORS:

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Article 95 of the Company’s Articles of Association,Shri Vinay Kumar Modi (DIN-00274605) and Shri Rakesh Kumar Modi (DIN-00022386), both the directors are due to retire by rotation thisyear and being eligible, offer themselves for re-appointment. On recommendation of Nomination and Remuneration Committee, the Boardhas commended to re-appoint the Directors retiring by rotation. During the year under review no Director has resigned from the Board ofDirectors.

KEY MANAGERIAL PERSONNEL (KMP):

In pursuance of the compliance of Section 203 of the Companies Act, 2013 the following persons were designated as Whole Time KeyManagerial Personnel of the Company:-

1. Shri Mahendra Kumar Modi - Managing Director

2. Shri Umesh Kumar Modi- Managing Director

3. Shri N P Bansal – Chief Financial Officer

4. Shri V P Gupta – Company Secretary

There has been no change in Key Managerial Personnel of your Company during the year under review.


SUBSIDIARY COMPANIES:

The Company have two subsidiaries namely, Your Investment (India) Limited and Own Investment (India) Limited.

In compliance with the Rule 8(1) of the Companies (Accounts) Rules, 2014 the performance and financial position of both the subsidiariesare as under:

(i) Your Investment (India) Limited – The company registered a net loss of ` 5.13 Lac during the year under review (Previous Year- Profitof ` 0.49 Lac).

(ii) Own Investment (India) Limited- The company registered a net loss of ` 6.31 Lac during the year under review (Previous Year- Profitof ` 0.29 Lac).

The annual accounts of the subsidiary companies and the related detailed information shall be made available to the shareholdersof the holding and subsidiary companies seeking such information. The annual accounts of the subsidiary companies shall be keptfor inspection by any shareholders at Registered Office of the holding company and of the subsidiary companies concerned. Astatement containing salient features of the financial statements of your Company’s subsidiaries in Form AOC-1 is attached asAnnexure-‘A’.

CONSOLIDATED FINANCIAL STATEMENTS:

In compliance with the Accounting Standards 21 and 23 issued by the Institute of Chartered Accountants of India and pursuant to SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015, the consolidated financial statements form a part of this AnnualReport.

STOCK EXCHANGE LISTING:

The Securities of the Company were listed with U.P. Stock Exchange Limited*, Kanpur as a Regional Stock Exchange and Delhi StockExchange Limited**, New Delhi.

* SEBI had issued exit order of UPSE on 09th June, 2015.

**SEBI had derecognized the DSE on 19th November, 2014.

SEBI vide its circular No. CIR/MRD/DSA/5/2015 Dated 17th April, 2015 provides that the exclusively listed companies which fail to obtainlisting in any other nationwide stock exchange will cease to be a listed company and will be moved to the Dissemination Board by theexisting stock exchange.

The Listing criteria of nationwide stock exchanges are generally out side the present status/situation of the Company because yourCompany is a sick industrial company as declared by the Hon’ble BIFR vide their order dated 14th March, 1991 in terms of Section 3(1)(o)of SICA. The rehabilitation scheme of the company is still pending. Company has huge losses and negative net-worth.

U.P. Stock Exchange Limited, Kanpur as a Regional Stock Exchange of the Company had referred the Company to the DisseminationBoard of National Stock Exchange of India Limited (NSE) and NSE had also confirmed by its Circular Ref. No. 07/2015 (Download Ref. No.NSE/CML/ 29461) dated 16th April, 2015 to its members.

Therefore your Company is now shifted as per above SEBI Circular in the category of unlisted company.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

In terms of Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion &Analysis Report (MD&AR) forms part of this report and is attached as Annexure- ‘B’.

CORPORATE GOVERNANCE:

As per the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 compliance of Corporate GovernanceReport is not mandatory for the Company, however Corporate Governance Report for the year under review, prepared on the basis of oldClause 49 of the listing agreement and as per applicable provisions of the Companies Act, 2013, is attached as Annexure-‘C’.

All Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct for the year under review.

EXTRACT OF ANNUAL RETURN:

Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, therequired extract of Annual Return in prescribed form MGT-9 is attached as Annexure-‘D’ with this Board Report.

MATERIAL CHANGES AND COMMITMENTS:

No material Changes or commitments affecting the financial position of the Company occurred between the end of the financial year towhich the financial statements relate and the date of the report except the Company had declared lay off in its Sugar Unit w.e.f. 17th June,2015 which was lifted on 31st August, 2015.


NUMBER OF BOARD AND COMMITTEE MEETINGS:

The details of the number of meetings of the Board and its Committees held during the Financial Year 2015-16 are given in report onCorporate Governance attached as mentioned above.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

The provision relating to Corporate Social Responsibility under the Companies Act, 2013 is not applicable to the Company in view ofnegative net-worth and losses etc. hence no CSR Committee is constituted.

BUSINESS RESPONSIBILITY REPORTING:

The Business Responsibility Reporting as required by the Regulation 34(f) of SEBI (Listing Obligations and Disclosure Requirements)Regulations, 2015 is not applicable to the Company for the financial year under review.

WHISTLE BLOWER POLICY:

The Company has a Whistle Blower Policy, including vigil mechanism to report genuine concerns of grievances, providing direct access tothe Chairperson of the Audit Committee in appropriate and exceptional cases. The Whistle Blower Policy has been posted on the websiteof the Company (www.modiindustries.net).

INTERNAL FINANCIAL CONTROL:

Even though the Company has in place adequate internal audit system which is commensurate with the operations of the Company, thetesting and evaluation of internal financial control over financial reporting as mentioned in the guidance note of Institute of CharteredAccountants of India is yet to be undertaken.

ANNUAL EVALUATION:

The Board has carried out the Annual Performance Evaluation of its own, its Committees and individual Directors based on the PerformanceEvaluation Report submitted by the Nomination & Remuneration Committee, as per Performance Evaluation Policy of the Company.

NOMINATION & REMUNERATION POLICY:

Nomination & Remuneration Policy of the company, as formulated and approved by Nomination and Remuneration Committee in itsmeeting held on 14th August, 2014, governs Directors’ appointment including criteria for determining their qualifications, positive attributes,their independence and remuneration for the Directors, KMPs and other employees. The Nomination and Remuneration Policy is attachedas Annexure-‘E’ with this Board Report.

RISK MANAGEMENT POLICY:

The Company has taken out various policies to cover risk against Plant & Machinery, Building, Godowns, Computers, Vehicles, Cash inhand/in transit and to reduce the financial risk etc.. Various units of the company also identify the elements of risk & requirement of policies,if any, related to their units and submits report periodically to the Board.

PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS:

Details of loan(s), guarantee and investments are given in the notes to Financial Statements.

RELATED PARTY DISCLOSURE:

The related party transactions that were entered into during the financial year were generally on an arm’s length basis. These transactionswere generally in the nature of ordinary course of business as per very old set up and structure of the Company except some related partytransactions, as mentioned in this 82nd Annual General Meeting notice, for your approval. There are no materially significant related partytransactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have apotential conflict with the interest of the Company at large.

Since the provisions of the revised Corporate Governance Clause 49 / Regulation of the Listing Agreement/LODR was/is not applicable tothe Company, no policy has been formulated for dealing with related party transactions.

All related party transactions are placed before the Audit Committee and Board of Directors for their approval on quarterly basis.

Your directors draw attention of members to Note No. 27(38) to the standalone financial statements which sets out related party disclosures.

PERSONNEL:

Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is applicable only on listed companieswhile your company has ceased to be a listed company in view of SEBI circular No. CIR/MRD/DSA/5/2015 Dated 17th April, 2015. Your


company has been forwarded by UPSE to the Dissemination Board of the NSE hence presently your Company not comes under thecategory of listed Company, therefore details under above said rule are not being given.

Details as required pursuant to MCA Notification G.S.R. 646(E) dated 30th June, 2016 Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules, 2014, none of the employee was in receipt of remuneration of Rs. One Crore and Two Lakhor more per year throughout the year or Rs. Eighty Lakh and Fifty Thousand per month for the part of the year. Further, none of theemployees is in receipt of remuneration which is in excess of the remuneration drawn by Managing Director or Whole-time Director or anymanager of the Company and holds by himself or along with his/ her spouse and dependent children, not less than 2% of equity shares ofthe Company.

AUDITORS AND THEIR REPORTS:

STATUTORY AUDITORS:

M/s. P.R. Mehra & Co., Chartered Accountants, (FRN 000051N), who are Statutory Auditors of the Company to hold office up to theconclusion of the ensuing Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for thefinancial year 2016-17. As required under the provisions of Section 139 of the Companies Act, 2013. The company has obtained writtenconfirmation from M/s. P.R. Mehra & Co. that their appointment, if made, would be in conformity with the limits specified in the said section.The appointment of auditors has to be done by an Ordinary Resolution.

With reference to the qualifications contained in the Auditors’ Report, the Directors wish to state that the Notes referred to by the auditorsin their report are self-explanatory and hence do not call for any further comments.

COST AUDITORS:

As per the requirement of the Central Government and pursuant to the provisions of Section 148 of the Companies Act, 2013 read with theCompanies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has to get done audit of cost recordsrelating to Sugar and Distillery Units for the financial year 2016-17.

The Board of Directors, on the recommendation of Audit Committee, have appointed M/s. M.K. Singhal & Co., Cost Accountants, (Firm’sRegn. No. 00074) of Modinagar, as Cost Auditors to conduct the audit of Cost Accounts maintained by Sugar and Distillery units of theCompany at a total remuneration of Rs. 40,000/- (including all expenses) + applicable Service Tax payable to them for the financial year2016-17. Members’ approval for the remuneration payable to the Cost Auditors has to be obtained by an Ordinary Resolution.

The Cost Audit Report for the audited accounts for the financial year ended 31st March, 2015 was filed by the Cost Auditors with respectto the sugar, industrial alcohol, and steel (electrode), the products of units of the company, on 30th September, 2015.

SECRETARIAL AUDITORS:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made thereunder, the Company had appointed Shri AmarNath Jaiswal, Practicing Company Secretary (ACS No. 19000, CP No. 14629) of New Delhi, as Secretarial Auditor of the Company. ShriAmar Nath Jaiswal has submitted his Secretarial Audit Report, for the Financial Year 2015-16, which is attached herewith as Annexure–‘F’.

With reference to the observations contained in the Secretarial Auditors Report, the Directors wish to state that the Notes on Accounts areself-explanatory and hence do not call for any further comments.

For the Financial Year 2016-17 Company has appointed M/s A. N. Jaiswal & Co., Practicing Company Secretaries (ACS No. 19000, CP No.14629) of New Delhi, as Secretarial Auditors of the Company.

INTERNAL AUDITORS:

Pursuant to Section 138 of the Companies Act, 2013, Board has appointed Internal Auditors namely M/s. Sarat Jain & Associates, CharteredAccountants, (Firm Regn. No. 014793C) of New Delhi for Sugar & Distillery units & M/s. Makkar & Co., Chartered Accountants, (Firm Regn.No. 005958C) of Delhi for MD Office, Electrode, Paint & Gas units of the Company for the financial year 2016-17 as recommended by theAudit Committee of the Company.

CONSERVATION OF ENERGY:

The Company is a sick industrial unit within the meaning of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985vide BIFR order dated 14th March, 1991.

Since long no modernization of Plant & Machinery of the Units of the Company could be undertaken due to huge losses in the Companyand non-availability of funds from Banks/Financial Institutions. However, the Management is making possible efforts for the conservation ofenergy.

Company has implemented energy conservation measures for saving of quantitative consumption of power & fuel etc. Company hasreplaced some old lighting system with LED etc., adoption of more star rated electronic equipments, timely repairing & maintenance of


electronic items. As a result of this sugar unit of the company Electricity KWH PMT in production reduced this year to 270.52 from 272.77last year.

During the year under review total expenses on power and fuel was Rs. 341.34 lac (in previous year Rs. 467.93 lac).

TECHNOLOGY ABSORPTION:

Requisite information in prescribed form is given in Annexure-‘G’ to this report.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

Your Company earned during the year Foreign Exchange is Nil (previous year – Rs. 35.24 Lac) while Foreign Exchange outgo during theyear amounted to Rs. 295.35 Lac (previous year - Rs. 348.01 Lac).

POLLUTION CONTROL:

Relevant and necessary effluent treatment measures for control of water, air and environmental pollution are in place and steps have beentaken to further strengthen and consolidate pollution control measures.

LABOUR RELATIONS:

The labour management relations generally remained harmonious.

GENERAL:

The Company became a sick industrial company within the meaning of Section 3(1)(o) of Sick Industrial Companies (Special Provisions)Act, 1985 (SICA) due to erosion of its net worth and the Company was declared a sick industrial company by BIFR vide its order dated 14th

March, 1991. The rehabilitation scheme of the company as submitted by the IDBI the Operating Agency (OA) to BIFR is still pending. BIFRhad passed an order dated 28th October, 2013 issuing show cause notice for winding up of the company against which appeals have beenfiled before AAIFR. Matter is stayed by AAIFR and final orders are still pending.

In view of this, no impact is foreseen on the going concern status of the Company and the Company’s operations in future. The matter ispending before the Hon’ble BIFR/AAIFR.

No complaint during the year under review was received by the Company under the Sexual Harassment of Women at Workplace (Prevention,Prohibition and Redressal) Act, 2013.

CAUTIONARY STATEMENT:

The statement in the Director’s report and MD&AR, detailing the Company’s objectives and expectations, may contain ‘forward lookingstatements’ within the meaning of applicable securities laws and regulations. The actual results inter-alia may differ materially from thoseexpressed or implied, depending upon changes in global and Indian demand-supply conditions as well as changes in government regulations,tax regimes, economic and market developments, movements.

ACKNOWLEDGMENT:

The Directors wish to thank the Central Government, Government of Uttar Pradesh, Financial Institutions and the Company’s Bankers forall the help and encouragement they extended to the Company. Your Directors gratefully acknowledge the continued trust and confidence;you have placed in the Company. The Directors also wish to place on record their deep appreciation for the services rendered by theofficers, staff and workers of the Company at all levels and for their dedication and loyalty.

For & on behalf of the Board

Mahendra Kumar Modi Abhishek ModiPlace : Delhi (DIN-00014594) (DIN-00002798)Dated : 22nd August, 2016 Managing Director Director


ANNEXURE-‘A’ TO DIRECTORS’ REPORT

FORM AOC-1

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

Statement containing salient features of the financial statement ofsubsidiaries/associate companies/joint ventures.

Part ‘A’ : Subsidiaries` in lacs

Particulars Name of the SubsidiaryOwn Investment (India) Limited Your Investment (India) Limited

1. Reporting period for the subsidiary concerned,if different from the holding company’s reporting period. Not Applicable Not Applicable

2. Reporting currency and Exchange rate as on thelast date of the relevant Financial Year in the caseof foreign subsidiaries. Not Applicable Not Applicable

3. Share Capital (Paid-up) 13.22 21.47

4. Reserves & Surplus 4.64 11.10

5. Total Assets 18.11 32.90

6. Total Liabilities 0.25 0.33

7. Investments (net) 5.22 14.79

8. Turnover - -

9. Profit before taxation (6.23) (4.93)

10. Provision for taxation 0.08 0.20

11. Profit after taxation (6.31) (5.13)

12. Proposed dividend NIL NIL

13. % of shareholding 99.89 99.93

Part ‘B’ :Associates and Joint Venture

Statement pursuant to Section 129(3) of the Companies Act, 2013related to Associate Companies and Joint Ventures.

(Not applicable)1. There are no subsidiaries / associates / joint ventures which are yet to commence operations.2. There are no subsidiaries / associates / joint ventures which have been liquidated or sold during the year.

For Modi Industries Limited

Mahendra Kumar Modi Rakesh Kumar Modi Manish Kumar Modi Abhishek Modi(DIN 00014594) (DIN 00022386) (DIN 00030036) (DIN 00002798)

Managing Director Director Director Director

N.P. Bansal V P Gupta(PAN AAOPB7869G) (FCS-6380)

Place : Delhi Chief Financial Officer Company SecretaryDated : 22nd August, 2016.


ANNEXURE-‘B’ TO DIRECTORS’ REPORT

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

(a) INDUSTRY SCENARIO:

SUGAR UNIT: India is the second largest producer of sugar in the world. The sugar industry is the largest agro-processing sector inIndia. It is dominated by the co-operative sector in terms of number of units. The industry is regulated by the Central and StateGovernments by way of cane growing area, sugarcane pricing, import-export policy. The major sugarcane producers are UttarPradesh, Maharashtra, Tamilnadu and Karnataka. Sugar cane is the only source of sugar production in India unlike many othercountries, which produce sugar from sugar beet.

The cane price continuously remains closely controlled by the Central and State Governments. The Central Government announcedFair and Remunerative Price (FRP) remains operative in some states like Karnataka, Maharashtra and State Advised Price (SAP) isfollowed in states like Uttar Pradesh & Tamil Nadu. The Sugar production in the country is expected to be 25.6 million tones in thesugar season 2015-16 and domestic consumption of 26.0 million tones, export of 1.5 million tones and closing stock would be 7.0million tones.

The production in 2016-17 is expected to be further down to 24.0 million tones. The consumption of sugar is likely to 26.5 milliontones during 2016-17.

DISTILLERY UNIT: The industry continues to be regulated at various levels by government. The potable alcohol policy of last yearhas been continued by Uttar Pradesh Government. In the policy the whole sale rights of Country Liquor have been given to one party.

ELECTRODE UNIT: There has been no significant change in the economic environment in the current financial year but in thecoming year 2016-17, positive indications are visible in the power, steel production as well as in infrastructure development. Asconsumption of welding consumables is directly linked with steel consumption and Modi Arc is strong in power projects so we feelthat industrial scenario is favorable for Modi Arc in the time to come.

PAINT UNIT: Paint Industry in last year has not shown much growth due to slow down in real estate and housing. The consumptionhowever in domestic market is likely to remain at same pace.

GAS UNIT: Gas business is completely dependent upon industry growth and mainly on steel industry. At present in our area ofbusiness steel industry is facing a downfall due to government policies in Uttar Pradesh. The steel fabrication business is also in badshape because of that many units in our business area have been locked out.

Freight is a major factor in Gas cylinders business and because of that the area of operation gets limited.

(b) OPPORTUNITIES AND THREATS:

SUGAR UNIT:

Opportunities:

Potential to increase cane productivity by varietal change to increase sugar recovery.

Technology up-gradation in sugar and by product utilization.

Higher value by-products.

Threats:

Unfortunately draught in Maharashtra and Karnataka is expected to drag the production by 3.0 million tones.

Rising cane payment arrears may force farmers shifting their preference to other crops or even diverting their cane to other mills/kohlusresulting in lower cane availability.

DISTILLERY UNIT: With the likely decrease in production of sugar output, resulting decrease in production and availability of Molasses,the production of Rectified Spirit will be lesser as compare to last year.

ELECTRODE UNIT: Steel Industries are being modernized/ expended, a large number of new Steel Plants are also coming up indifferent parts of the country based on modern, cost effective, state of the art technologies.

India emerged as the 3rd largest producer of crude steel in the world as per ranking released by the WSA. The country is expected to


become the 2nd largest producer of crude steel in the world soon, provided all requirements for creation of fresh, capacity areadequately met. As consumption of welding consumables are directly linked with the Steel consumption in the country, weldingindustries will have good business opportunity in the time to come.

In power generation sector Government has set 1,18,537 MW power generation capacity addition target for the 12th plan periodending 2016-17. We are well equipped with product range and approvals to supply in the power and steel plants.

Global developments and competitors with international standing continue to focus heavily on the Indian market and this can posechallenges on pricing and margins. Competition from smaller and unorganized players is still a threat to address.

PAINT UNIT: India is the fastest growing market in Asia Pacific.

India’s paint industry size is growing sluggishly due to slump in real Estate.

The decorative paints to industrial paints ratio is 70:30 both in value and volume.

The demand in the paint industry is seasonal to some extent while the demand dips in the monsoon season.

GAS UNIT: We have opportunities in the untapped market like of Uttarakhand and Himachal Pradesh, where we can get good priceand in that particular area lots of industrial development is happening. We have good opportunities in Hydrogen business if we do itat large scale by making some investment for it.

For Gas Business major threat are unorganized dealers and traders. Apart from this LPG is giving us tough competition in market asit is cheap and readily available. Customers who have good consumption of gases are moving toward more convenient option that isVIST (Vacuum Insulated Storage Tank) or Liquid Gaseous Storage tank.

(c) OPERATIONAL PERFORMANCE:

SUGAR UNIT: The cane crushing in the year under review was 58.59 lacs qtls as against 71.40 lacs qtls in previous financial year.Sugar recovery in the year under review increased from 9.469% to 10.178%. Sugar Cane Price remained same as of last Season ofRs.280/- per qtl. Working results of the unit are better as compared to last year on account of sugar price realization and increase insugar recovery.

DISTILLERY UNIT: During the year under review, the production of Rectified Spirit was 3148 Kl. as compared to last year 4328 Kl. Inthe year under review, there was significant improvement in production of Indian Made Foreign Liquor (IMFL) from 106990 cases to196740 cases, which has contributed in improvement in profit of the unit.

ELECTRODE UNIT: Our contribution is better in comparison with the previous year, however bottom line is declined. As decision hasbeen taken not to supply material on credit, our sale has declined but we have drastically reduced our over dues. In the long run weare hopeful that cash sale will help us to maintain healthy financial condition.

PAINT UNIT: The unit registered increase in turnover by 15% compared to last year. The EBIDT is better compared to last year.

GAS UNIT: We are managing to keep our figures positive even after the tough competition from the market and with lack of resources.But we still have a scope to do even better than this.

(d) FUTURE OUTLOOK:

SUGAR UNIT: With an expected carryover stock of 7.0 million tons as on 1st October, 2016 and estimated sugar production of 24million tons in the country during 2016-17 and expected consumption of 26.5 million tones, the closing stock will be 4.5 million tones,which will be equal to approx. 2 months’ consumption, hence there will be need to import sugar in 2016-17.

Sugar analysts opinion that lower-than-average rainfall will adversely affect sugarcane production in 2016-17 in major parts ofMaharashtra and Karnataka. But this shortage is likely to be well compensated by higher production from Uttar Pradesh and TamilNadu. Uttar Pradesh has increased acreage under CO 0238 variety, which gives a much higher yield and sugar recovery.

DISTILLERY UNIT: The molasses production is expected to be lessor in the year 2016-17 which will be resulted in decrease ofproduction of rectified spirit. The operation of scotch blended whisky will further increase in the next year.

In the light of India’s growing fuel demand, the Government of India is keen to promote admixing of ethanol with petrol. Keeping thisin view and the normal growth in the Chemicals and Potable sectors, the demand for alcohol is expected to remain strong in thefuture.

ELECTRODE UNIT: India’s GDP growth is at 7.6% despite slow down in Global economy from 3.4% to 3.1%. Governmental push on


of infrastructure & industrial development through ‘Make in India’ campaign has also got the attention of several infrastructure andengineering multi nationals in the country. The liberalization of industrial policy and other initiatives taken by the Government havegiven a definite impetus for entry, participation and growth of the private sector in the steel industry.

PAINT UNIT: Indian GDP is expected to grow 7-8% annually for next few years. Because of the high correlation between GDP andPaint volume growth, decorative paints are expected to grow on the back of strong economic momentum. Real estate boom in thepast few years will lead to strong demand for repainting.

GAS UNIT: The future for gas business is promising in view of continued industrial development and growth. We are aiming to do tieup with the principal suppliers of Hydrogen so that we can reduce our costing and increase our business. We are aiming to increaseour sales and profitability in this financial year.

(e) RISKS & CONCERNS:

The company is a Sick Industrial Company within the meaning of Section 3(1)(o) of Sick Industrial Companies (Special Provisions)Act, 1985. Hence, fresh funds both for working capital requirement and/or long term requirements are not made available by Banks/Financial Institutions.

Price Risk:

Sugar price is susceptible to fluctuations on account of international demand and supply, government pricing for cane as well assugar, variance in production capacities of peers. Any change may affect the margins of the Company.

(f) INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The key features of the Internal Control Systems are given below :

1. Well defined organization structure, documented policy guidelines, predefined authority levels ensures optimal utilization andprotection of resources.

2. Assets are adequately maintained and protected against Theft, Burglary and other Losses.

3. Transactions are properly recorded and accounted for.

4. Accounting records are maintained complying with all the statutory laws and reflect true and fair view.

5. There are adequate Management reporting systems for control and monitoring of performance.

6. Budgetary control system is in place.

7. Periodical review by the Management is being done.

8. Periodical review of system, procedures and transactions by internal Auditors is conducted.

(g) MATERIAL DEVELOPMENT IN HUMAN RESOURCES/

INDUSTRIAL RELATIONS FRONT:

The underlying rule of company’s policy towards human resource development is that competent and motivated manpower is themost important factor in achieving business goals. The policies in this regard are evolved and pursued to achieve this objective.Industrial relations remained cordial throughout the year.

As on 31st March, 2016 the total number of employees on the payrolls of the company were 885.


ANNEXURE-‘C’ TO DIRECTORS’ REPORTCORPORATE GOVERNANCE REPORT

CORPORATE GOVERNANCE AS REQUIRED BY OLD CLAUSE 49 OF THE LISTINGAGREEMENT AND AS PER APPLICABLE PROVISIONS OF THE COMPANIES ACT, 2013:

1. COMPANY’S PHILOSOPHY:Your company firmly believes in good corporate governance. Towards this end, the company consistently evaluates and defines itsmanagement practices aimed at enhancing its commitment and delivery of the basic tenets of the corporate governance.

2. BOARD OF DIRECTORS:(a) COMPOSITION OF BOARD :

( i) The Board consists of eight directors as on the date of report. Out of these eight directors, six are non-executive directors. TheCompany did not have any material pecuniary relation or transaction with non-executive directors during the year under review.

(ii) Presently the company has not complied with the requirement of independent directors and women director in the compositionof the Board and various Board Committee(s), wherever required. The Company is a sick industrial company within the meaningof Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 as declared by the Hon’ble BIFR vide their orderdated 14th March, 1991. The Hon’ble Supreme Court in SLP (Civil) Nos. 23095 – 23097 of 2010 (M.K. Modi vs. U.K. Modi) haspassed an order dated 27th August, 2010 directing the parties therein to maintain “status quo” with regard to the managementof the company.In view of the above order of Hon’ble Supreme Court, Board of Directors are unable to appoint any new director under provisionsof Companies Act, 2013 and/or Listing Agreement to comply with the composition of Board and/or various Board Committees.

(b) BOARD/ SHAREHOLDERS’ MEETINGS :During the year under review, four Board meetings were held on 18th June, 2015, 14th August, 2015, 14th November, 2015 and 9th

February, 2016. None of the directors is a member of more than ten Committees or acting as Chairman of more than five Committeesacross all companies in which he is a director. The attendance at the Board meetings during the year 2015-16 and at the last 81st

Annual General Meeting held on 29th September, 2015 and also number of other directorship are given herein below:

Name Category No.of Board Attendance No. of Directorship(s) and Committeemeetings at previous Membership(s)/Chairmanship(s) ofAttended AGM other Indian Public Limited Companies

Other Committee CommitteeDirector- Member- Chairman-ship(s) ship(s) $ ship(s) $

Shri Mahendra Kumar Modi MD 4 Yes 3 1 1Shri Umesh Kumar Modi MD 3 Yes 5 - -Shri Krishan Kumar Modi NED 2 No 6 1 1Shri Vinay Kumar Modi NED 2 No 2 1 1Shri Rakesh Kumar Modi NED 4 Yes - - -Shri Manish Kumar Modi NED 3 No 2 - -Shri Abhishek Modi NED 4 Yes 4 - -Shri Santosh Kumar Aggarwal NED 4 No - - -MD: Managing Director,NED: Non-Executive Director$Represents Audit Committee and Stakeholders Relationship Committee.

(c) BOARD PROCEDURE :As per Corporate Policy, statutory and material information is placed before the Board with a view to enable it to discharge efficientlyits responsibilities in formulating the strategies and policies for the growth of the Company. The Agenda and other relevant papersare circulated prior to the scheduled dates of the meetings. The day to day affairs of the Six Units (viz. Electrode, Gas, Paint, Vanaspati,Lantern and Soap Units) and Three Units (viz. Sugar, Distillery and Steel Units) are managed by Shri Mahendra Kumar Modi,Managing Director and Shri Umesh Kumar Modi, Managing Director respectively and Corporate Office by both the Managing Directorssubject to supervision and control of the Board of Directors. Opinion and advice of Non-Executive Directors are considered valuableguidance. For specific matters, the various Committees of the Directors deliberate in detail, analyze situations, information and firmup views and advise the Board on decision making and follow up actions as may be considered appropriate.

(d) RELATIONSHIP AMONGST DIRECTORS :Shri Krishan Kumar Modi, Non-Executive Director, Shri Vinay Kumar Modi, Non-Executive Director and Shri Umesh Kumar Modi,Managing Director are real brothers. Shri Manish Kumar Modi, Non-Executive Director, is son of Shri Mahendra Kumar Modi,Managing Director and Shri Abhishek Modi, Non-Executive Director, is son of Shri Umesh Kumar Modi, Managing Director.


3. AUDIT COMMITTEE:

(a) COMPOSITION:

The ‘Audit Committee’ of the Company, as on the date of report, consists of four Non-Executive Directors, namely, (1) Shri RakeshKumar Modi, (2) Shri Manish Kumar Modi, (3) Shri Abhishek Modi and (4) Shri Santosh Kumar Aggarwal, as members. The CompanySecretary acts as Secretary to the Committee.

During the year, four Audit Committee Meetings were held on 18th June, 2015, 14th August, 2015, 14th November, 2015 and 9th February,2016. All the four meetings were attended by all its members except the meeting held on 14th August, 2015 which was not attendedby Shri Manish Kumar Modi.

(b) ROLE & TERMS OF REFERENCE OF AUDIT COMMITTEE:In terms of Section 177(4) of the Companies Act, 2013, and Regulation 18(3) of SEBI (Listing Obligations and DisclosureRequirements) Regulations, 2015, the Role / Terms of Reference of Audit Committee are defined as under :

The Audit Committee shall have powers, which should include the following:

1. To investigate any activity within its terms of reference.

2. To seek information from any employee.

3. To obtain outside legal or other professional advice.

4. To secure attendance of outsiders with relevant expertise, if it considers necessary.

The role of the Audit Committee shall include the following:

1. Oversight of the company’s financial reporting process and the disclosure of its financial information to ensure that the financialstatement is correct, sufficient and credible;

2. Recommendation for appointment, remuneration and terms of appointment of auditors of the company;

3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors;

4. Reviewing, with the management, the annual financial statements and auditor’s report thereon before submission to the boardfor approval, with particular reference to:

a. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms ofclause (c) of sub-section 3 of section 134 of the Companies Act, 2013

b. Changes, if any, in accounting policies and practices and reasons for the same

c. Major accounting entries involving estimates based on the exercise of judgment by management

d. Significant adjustments made in the financial statements arising out of audit findings

e. Compliance with listing and other legal requirements relating to financial statements

f. Disclosure of any related party transactions

g. Modified Opinion(s) in the draft audit report

5. Reviewing, with the management, the quarterly financial statements before submission to the board for approval;

6. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue,preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus/ notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, andmaking appropriate recommendations to the Board to take up steps in this matter;

7. Reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process;

8. Approval or any subsequent modification of transactions of the company with related parties;

9. Scrutiny of inter-corporate loans and investments;

10. Valuation of undertakings or assets of the company, wherever it is necessary;

11. Evaluation of internal financial controls and risk management systems;

12. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;

13. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing andseniority of the official heading the department, reporting structure coverage and frequency of internal audit;

14. Discussion with internal auditors of any significant findings and follow up there on;

15. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud orirregularity or a failure of internal control systems of a material nature and reporting the matter to the board;

16. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-auditdiscussion to ascertain any area of concern;


17. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case ofnon-payment of declared dividends) and creditors;

18. To review the functioning of the Whistle Blower mechanism;

19. Approval of appointment of Chief Financial Officer after assessing the qualifications, experience and background, etc. of thecandidate;

20. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

The Board has established a vigil mechanism and framed a policy under the name “Whistle Blower Policy” for its Directorsand employees to report genuine concerns or frauds and no personnel has been denied access to the Audit Committee. Thepolicy is uploaded on the website of the Company where full information is provided.

4. NOMINATION AND REMUNERATION COMMITTEE AND REMUNERATION OF DIRECTORS :

The Nomination and Remuneration Committee, as on the date of report, consists of four Non-Executive Directors, namely, (1) Shri RakeshKumar Modi, (2) Shri Manish Kumar Modi, (3) Shri Abhishek Modi and (4) Shri Santosh Kumar Aggarwal, as members. The decisionsregarding remuneration of executive, non-executive directors and Key Managerial Personnel are taken by the entire Board onrecommendation of the Nomination and Remuneration Committee subject to such approvals from the Shareholders or CentralGovernment as may be necessary. The Company does not pay any remuneration to the non-executive directors except payment of SittingFees for attending Board/ Committee meetings.

ROLE AND TERMS OF REFERENCE OF NOMINATION AND REMUNERATION COMMITTEE:In terms of Section 178(2), (3) and (4) of the Companies Act, 2013 and Rules made thereunder and Regulation 19(4) of SEBI (ListingObligations and Disclosure Requirements) Regulations, 2015. The role and terms of Reference of Nomination and RemunerationCommittee are defined as under:

1. Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to theBoard a policy, relating to the remuneration of the directors, key managerial personnel and other employees;

2. Formulation of the criteria for evaluation of performance of Independent Directors and the Board of Directors;

3. Devising a policy on diversity of Board of Directors;

4. Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with thecriteria laid down, and recommend to the Board of Directors their appointment and removal.

5. Whether to extend or continue the term of appointment of the Independent Director, on the basis of the report of performanceevaluation of Independent Directors.

The Committee shall ensure that:

(a) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the qualityrequired to run the Company successfully;

(b) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(c) Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentivepay reflecting short and long term performance objectives appropriate to the working of the company and its goals.

Nomination & Remuneration Policy of the Company forms part of the Annual Report.

Details of remuneration paid to the directors during the year under review are given below: (a) Executive Directors :

No remuneration has been paid to Shri Umesh Kumar Modi, Managing Director during the year under review. The Central Governmenthas accorded its approval for payment of remuneration to Shri Mahendra Kumar Modi as Managing Director for the period from 1st

November, 2014 to 31st October, 2017 and accordingly the Company has made a payment of 18.00 Lacs to him for the period from1st April, 2015 to 31st March, 2016.

(b) Non-Executive Directors :

Name Sitting Fee Shares held(` in thousands) Equity Preference

Shri Krishan Kumar Modi 4.0 9664 8Shri Vinay Kumar Modi 4.0 25477 8Shri Rakesh Kumar Modi 12.0 48901 10Shri Manish Kumar Modi 7.5 22050 -Shri Abhishek Modi 10.5 100 -Shri Santosh Kumar Aggarwal 10.5 100 -


5. STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Stakeholders Relationship Committee, consisting of three members i.e. Shri Mahendra Kumar Modi & Shri Umesh Kumar Modi,Managing Directors, and Shri Rakesh Kumar Modi, Non-Executive Director, has been entrusted with the work of Share/Debenture Transferand dealing with Investors grievances. Shri Rakesh Kumar Modi chaired all meetings of the Committee held during the year under review.The Company Secretary acts as Secretary to the Committee and its Compliance Officer under Clause 49 of the Listing Agreement. Alltransfers, transmissions etc. of Shares and Debentures were effected within the stipulated period by the Company.

All 5 Shareholders / Debentureholders / Investors complaints, received directly from them or through SEBI/Stock Exchanges and otherauthorities during the year under review, have been replied by the company and none remained outstanding at the end of the year underreview. The status of Shareholders/Debentureholders/Investors complaints received during the year under review were reported to theStakeholders Relationship Committee by the Company Secretary.

6. COMMITTEE OF DIRECTORS:

The Committee of Directors, presently consisting of three members i.e. Shri Mahendra Kumar Modi & Shri Umesh Kumar Modi, ManagingDirectors and Shri Rakesh Kumar Modi, Non-Executive Director. During the year under review no meeting of Committee of Directors washeld.

7. GENERAL BODY MEETINGS :

The last three Annual General Meetings were held at Modi Industries Transit House (Modi Industries Complex), Modinagar, Distt.Ghaziabad (U.P.), on the following dates and time:

Financial year Date Time

2014-15 29.09.2015 12.30 P.M.

2013-14 29.09.2014 12.30 P.M.

2012-13 13.11.2013 12.30 P.M.

Special resolutions for re-appointment of Statutory Auditors of the Company were passed in Annual General Meetings of the Companyheld on 13th November, 2013 and 29th September, 2014. However, Special Resolutions for appointment and remuneration payable to ShriMahendra Kumar Modi and Shri Umesh Kumar Modi as Managing Directors of the Company and for renewal of lease agreement in favourof Modi Rubber Limited and for borrowing money from time to time under Section 180(1)(c) of the Companies Act, 2013 were passed inthe Annual General Meeting of the Company held on 29th September, 2014 and special resolution for entering into ‘Manufacturing SubLicensing Agreement’ between Modi Arc Electrode Co. (a unit of Modi Industries Limited) and Weld Excel India Limited (a related party)was passed in the Annual General Meeting of the Company held on 29th September, 2015.

No postal ballot was conducted during the Financial Year 2015-16. There is no immediate proposal for passing any resolution throughPostal Ballot. None of the businesses proposed to be transacted at the ensuing Annual General Meeting require passing a resolutionthrough Postal Ballot.

8. DISCLOSURES :

There were no transactions of the company of material significance with its directors or the management, their subsidiaries or relativesduring the year which may have potential conflict with interest of the company. There was no material non-compliance during the last threeyears by the company on any matters related to capital markets. Consequently, neither any penalties were imposed nor any stricturesorder passed on the company by Stock Exchanges, SEBI or any Statutory Authority. The company has generally complied with almostall the mandatory requirements of old Clause 49 of the listing agreement, till the date of its applicability i.e., upto 30th September, 2014,after that Company is voluntarily complying the old Clause 49 of the listing agreement to the extent possible.

9. MEANS OF COMMUNICATION :

The Quarterly results of the Company are generally published in English and local language news-papers as required under the ListingAgreement. All financial and other vital information are generally communicated to the Stock Exchanges on which company’s shares werelisted. Company’s Financial Results and Shareholding Pattern for each quarter and Annual Accounts of the Company are being uploadedon the Company’s Website – www.modiindustries.net. Management discussion and analysis form a part of annual report and is givenin a separate chapter thereto.


10. GENERAL SHAREHOLDERS’ INFORMATION :

(a) Annual General Meeting :

Date : 29th September, 2016

Time : 12.30 P.M.

Venue : Modi Industries Transit House(Modi Industries Complex)Modinagar, Distt. Ghaziabad (U.P.).

(b) Financial Calendar :

(i) Financial year : April to March

(ii) First quarter results : Upto 14th Aug., 2016

(iii) Second quarter results : Upto 14th Nov., 2016

(iv) Third quarter results : Upto 14th Feb., 2017

(v) Fourth quarter results (Audited) : Upto 30th May, 2017

(vi) Annual General Meeting : End of September, 2017for the year 2016-17.

(c) Date of Book Closure :

23rd September, 2016 to 29th September, 2016 (both days inclusive).

(d) Dividend payment date :

The Directors have not recommended any dividend on shares in view of accumulated losses.

(e) Stock Exchange Listing and Stock Code:

Shares of the Company are/were listed on:

*U.P. Stock Exchange Limited, Kanpur.

(Stock Code Z-493)

**Delhi Stock Exchange Limited, New Delhi.

(Stock Code 013154)

* SEBI had issued exit order of UPSE on 9th June, 2015.

**SEBI had derecognized the DSE on 19th November, 2014.

U.P. Stock Exchange Limited, Kanpur as a Regional Stock Exchange of the Company has referred the Company to the DisseminationBoard of National Stock Exchange of India Limited (NSE) and NSE has also confirmed by its Circular Ref. No. 07/2015 (DownloadRef. No. NSE/CML/29461) dated 16th April, 2015 to its members.

(f) Market Price Data : High/Low during each month in the year 2015-16:

The Company is a Sick Industrial Unit. There have been no transactions of Company’s shares on the Stock Exchanges, where theshares of the Company were listed, since long.

(g) Registrar and Transfer Agents :

Company has not appointed any Registrar for Shares/ Debenture Transfer. All such work is done in-house at Company’s ShareDepartment.

(h) Share Transfer System :

Shares lodged with the Company for transfer are processed and returned to the Shareholders within the stipulated time, providedtransfer documents are complete and valid in all respect.


(i) Distribution of Shareholding as on 31.03.2016 :

Distribution of Number of No. of %age ofshareholding Shareholders Shareholding

Equity shares of Pref. shares of Equity shares Pref. shares Equity Pref.`10 each `100 each shares shares

Upto 500 680401 248 8929 20 20.56 0.61

501 - 1000 95152 - 126 - 2.87 -

1001 - 2000 100655 - 67 - 3.04 -

2001 - 3000 44945 - 18 - 1.36 -

3001 - 4000 19580 3520 6 1 0.59 8.64

4001 - 5000 32294 9005 7 2 0.98 22.10

5001 – 10000 115779 14344 16 2 3.50 35.21

10001 and above 2220408 13624 51 1 67.10 33.44

Total 3309214 40741 9220 26 100.00 100.00

(j) Dematerialisation of Shares and Liquidity :

The Company is a Sick Industrial Company within the meaning of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions)

Act, 1985 and all its shares are held in physical form.

(k) Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, Conversion date and likely impact on Equity :

The Company has no GDRs/ADRs/or any convertible instrument.

(l) Plant Location :

At Modinagar,

District Ghaziabad (U.P.) 201204.

(m) Address for Correspondence :

Modi Industries Limited

Registered Office,

P.O. Modinagar,

District Ghaziabad (U.P.)

Pin 201204.


ANNEXURE-‘D’ TO DIRECTORS’ REPORT

Form No. MGT-9Extract of Annual Return

As on the financial year ended on 31st March, 2016

[Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

(i) CIN L15429UP1932PLC000469

(ii) Registration Date 18.11.1932

(iii) Name of the Company Modi Industries Limited

(iv) Category/Sub-Category of the Company Company Limited by Shares/Indian Non-Government Company

(v) Address of the Registered Office and contact details P.O. Modinagar (U.P.) 201204.

Tel.: 01232-231755, 243115

(vi) Whether listed Company Yes/No*

* Now Ceased as listed Company as per SEBI Circular

No. CIR/MRD/DSA/5/2015 Dated 17th April, 2015

(vii) Name, Address and Contact details of Registrar and Company has not appointed any Registrar for Shares/Debentures

Transfer Agent, if any. transfer. All such work is done in house at Company’s Share

Department (Registered Office of the Company).

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:

All the business activities contributing 10% or more of the total turnover of the Company shall be stated:

Sl. No. Name and Description of main NIC Code of the % to total turnoverproducts / services Product / service of the Company

1. Sugar (manufacture of sugar from sugar cane) 10721 58.98%

2. Distillery (distilling, rectifying & blending of sprits) 11019 26.78%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:

Sl. No. NAME AND ADDRESS CIN/GLN HOLDING/ % of shares held Applicable OF THE COMPANY SUBSIDIARY/ Section

ASSOCIATE

1. Own Investment (India) Limited U74899DL1981 Subsidiary 99.89 2(87)(ii)

PLC012017

2. Your Investment (India) Limited U74899DL1981 Subsidiary 99.93 2(87)(ii)PLC012003


IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity).(i) Category-wise Share Holding:

Category of No. of shares held at the beginning No. of Shares held at the end % changeShareholders of the year (as on 01.04.2015) of the year (as on 31.03.2016) during the

year 2015-16Demat Physical Total % of Demat Physical Total % of

total totalShares Shares

A. Promoters(1) Indian

a) Individual/HUF - 689306 689306 20.83 - 689306 689306 20.83 No changeb) Central Govt. - - - - - - - - -c) State Govt(s) - - - - - - - - -d) Bodies Corporate - 1279329 1279329 38.66 - 1279329 1279329 38.66 No changee) Bank/FI - - - - - - - - -f) Any other ……… - - - - - - - - -Sub Total (A)(1) - 1968635 1968635 59.49 - 1968635 1968635 59.49 No change

(2) Foreigna) NRI’s Individuals - - - - - - - - -b) Other Individuals - - - - - - - - -c) Bodies Corporate - - - - - - - - -d) Bank/FI - - - - - - - - -e) Any other ……….. - - - - - - - - -Sub Total (A)(2) - - - - - - - - -

Total Shareholding of Promoters - 1968635 1968635 59.49 - 1968635 1968635 59.49 No change(A)=(A)(1) + (A)(2)B. Public Shareholdings1 Institutions

a) Mutual Funds - - - - - - - - -b) Bank/FI - 1799 1799 0.05 - 1799 1799 0.05 No changec) Central Govt. - - - - - - - - -d) State Govt(s) - - - - - - - - -e) Venture Capital Funds - - - - - - - - -f) Insurance Companies - 351378 351378 10.62 - 351378 351378 10.62 No changeg) FIIs - - - - - - - - -h) Foreign Venture Capital Funds - - - - - - - - -i) Other (Specify) - - - - - - - - -Sub Total (B)(1) - 353177 353177 10.67 - 353177 353177 10.67 No change

2. Non-Institutionsa) Bodies Corporatei) Indian - 47259 47259 1.43 - 47259 47259 1.43 No changeii) Overseas - - - - - - - - -b) Individualsi) Individual Shareholders holding nominal - 881177 881177 26.63 - 893210 893210 26.99 (+)0.36*

share capital upto Rs.1.00 Lakh.ii) Individual Shareholders holding nominal - 58966 58966 1.78 - 46933 46933 1.42 (-)0.36*

share capital in excess of Rs.1.00 Lakhc) Others (Specify) - - - - - - - - -Sub Total (B)(2) - 987402 987402 29.84 - 987402 987402 29.84 No changeTotal Public Share-holdings - 1340579 1340579 40.51 - 1340579 1340579 40.51 No change (B) = (B)(1) + (B)(2)

C. Shares held by Custodian for GDRs & ADRs - - - - - - - - -Grand Total (A+B+C) - 3309214 3309214 100.00 - 3309214 3309214 100.00 No change

*It is on account of re-grouping.


(ii) Shareholding of Promoters :

Sl.No. Shareholder’s Name Shareholding at the beginning of the year Shareholding at the end of the year % Change(as on 01.04.2015) (as on 31.03.2016) in share

No. of % of total % of Shares No. of % of total % of shares holdingShares shares of pledged/ Shares shares of pledged/ during the

the encumbered the encumbered yearCompany to total Company to total

shares* shares*PROMOTERS/PERSONS HAVING CONTROL OVER THE COMPANY:1. Dr. Mahendra Kumar Modi 21461 0.65 0.65 21461 0.65 0.652. Smt. Veena Modi 37742 1.14 37742 1.143. Shri Manish Kumar Modi 22050 0.67 22050 0.674. Smt. Aparna Goenka 2565 0.08 2565 0.085. Ms. Ruchika Modi 2830 0.09 2830 0.096. Dr. Kedar Nath Modi 140 0.00 0.00 140 0.00 0.007. Dr. Devendra Kumar Modi 17640 0.53 17640 0.538. Smt. Renu Modi 1555 0.05 1555 0.059. Shri Umesh Kumar Modi 104200 3.15 3.15 104200 3.15 3.1510. Smt. Kum Kum Modi 16526 0.50 16526 0.5011. Shri Abhishek Modi 100 0.00 100 0.0012. Shri Krishan Kumar Modi 9664 0.29 0.29 9664 0.29 0.2913. Shri Vinay Kumar Modi 25477 0.77 0.77 25477 0.77 0.7714. Dr. Bhupendra Kumar Modi 18753 0.57 18753 0.5715. Smt. Bina Modi 9947 0.30 9947 0.3016. Smt. Chander Bala Modi 13108 0.40 13108 0.4017. Smt. Abha Rani Modi 20980 0.63 20980 0.6318. Smt. Raj Kumari Agarwal 9555 0.29 9555 0.2919. Smt. Rajesh Gupta 136 0.00 136 0.00

Sub Total (A) 334429 10.11 4.86 334429 10.11 4.86PROMOTER GROUP/PERSONS ACTING IN CONCERT : (Individual)20. Shri Lalit Kumar Modi 24244 0.73 24244 0.7321. Shri Samir Kumar Modi 24244 0.73 24244 0.7322. Shri Alok Kumar Modi 350 0.01 350 0.0123. Smt. Ritika Modi 24671 0.75 24671 0.7524. Shri Karan Modi 17274 0.52 17274 0.5225. Shri Dalip Kumar Modi 3180 0.10 3180 0.1026. Ms. Bindu 125 0.00 125 0.0027. Ms. Anuradha Modi 94 0.00 94 0.0028. Master Prashant Kumar Modi u/g/o

Shri Y.K. Modi 11475 0.35 11475 0.3529. Ms. Anupma Modi 3261 0.10 3261 0.1030. Ms. Prarthana Modi 3261 0.10 3261 0.1031. Master Kapil N. Modi u/g/o Dr. D.K. Modi 12651 0.38 12651 0.3832. Master Manav Kumar Modi u/g/o

Dr. D.K. Modi 10252 0.31 10252 0.3133. Smt. Sunder Devi 427 0.01 427 0.0134. Smt. Lajwanti Devi 846 0.03 846 0.0335. Smt. Kamla Devi 382 0.01 382 0.0136. Shri Rakesh Kumar Modi 48901 1.48 48901 1.48


37. Shri Man Mohan Modi 19338 0.59 19338 0.5938. Shri Mahesh Kumar Modi 30398 0.92 0.04 30398 0.92 0.0439. Smt. Bharti Modi 18482 0.56 18482 0.5640. Smt. Kiran Modi 42900 1.30 0.10 42900 1.30 0.1041. Shri Harmukh Rai Modi 644 0.02 644 0.0242. Shri Suresh Kumar Modi 687 0.02 687 0.0243. Shri Sudarshan Kumar Modi 17346 0.52 17346 0.5244. Smt. Rani Devi Modi 9803 0.30 9803 0.3045. Shri Sanjiv Kumar Modi 5459 0.16 5459 0.1646. Shri Tarun Kumar Modi 4941 0.15 4941 0.1547. Shri Suraj Parkash Modi 870 0.03 870 0.0348. Shri Om Prakash Modi 13 0.00 13 0.0049. Shri Chandra Prakash Modi 60 0.00 60 0.0050. Smt. Kavita Modi 700 0.02 700 0.0251. Smt. Shakuntla Modi 18 0.00 18 0.0052. Shri Aditya Kumar Modi 300 0.01 300 0.0153. Shri Praveen Kumar Modi 100 0.00 100 0.0054. Shri Vijay Modi 18 0.00 18 0.0055. Smt. Sumitra Devi 173 0.01 173 0.0156. Shri Devi Dayal Modi 300 0.01 300 0.0157. Shri Anil Modi 100 0.00 100 0.0058. Smt. Misri Devi 40 0.00 40 0.0059. Smt. Shanti Devi 74 0.00 74 0.0060. Shri Matru Mal Maskara 500 0.02 500 0.0261. Shri Kailash Chand Maskara 5 0.00 5 0.0062. Shri Krishan Gopal Maskara 50 0.00 50 0.0063.. Shri Sharat Prakash 139 0.00 139 0.0064. Shri Kamal Kumar Modi 2593 0.08 2593 0.0865. Shri Jaswant Kumar Modi 1300 0.04 1300 0.0466. Shri Naresh Kumar Modi 151 0.00 151 0.0067. Shri Shiv Kumar Modi 1907 0.06 1907 0.0668. Smt. Anju Modi 20 0.00 20 0.0069. Smt. Prem Modi 100 0.00 100 0.0070 Smt. Prem Modi & Shri Gaurav Modi 108 0.00 108 0.0071. Smt. Manju Modi 100 0.00 100 0.0072. Shri Gaurav Modi 250 0.01 250 0.0173. Shri Pankaj Modi 1166 0.04 1166 0.0474. Smt. Lachhmi Devi 300 0.01 300 0.0175. Birg. S.P.S. Shrikent 100 0.00 100 0.0076. Shri Santosh Kumar Aggarwal 100 0.00 100 0.0077. Shri Krishna Kumar Jain 100 0.00 100 0.00




shares* shares*


78. Modi Charitable Foundation 3204 0.10 3204 0.1079. Shri KK Modi & Smt. Bina Modi 1000 0.03 1000 0.0380. Shri KK Modi & Smt. Bina Modi 1360 0.04 1360 0.0481. Shri KK Modi & Smt. Bina Modi 1300 0.04 1300 0.0482. Shri YK Modi, Dr. BK Modi & Shri Raghunath Rai 500 0.02 500 0.0283. RS Seth Tara Chand Modi Charity Fund 122 0.00 122 0.00

Sub Total ‘B’ 354877 10.73 0.14 354877 10.73 0.14PROMOTER GROUP/PERSONS ACTING IN CONCERT (Bodies Corporate)84. M/s. Rajputana Fertilizers Ltd 1700 0.05 1700 0.0585. M/s. Modi Trading & Industrial

Syndicate Pvt.Ltd. 32022 0.97 32022 0.9786. M/s. Patiala Flour Mills Co. Ltd. 168 0.01 168 0.0187. M/s. Quick Investment India Ltd. 5580 0.17 5580 0.1788. M/s. Spice Corp Ltd. (now known as Spice Enfotainment Ltd.) 30034 0.91 30034 0.9189. M/s. Daisy Investment Pvt. Ltd. 103825 3.14 103825 3.1490. M/s. KK Modi Investment &

Financial Services Pvt.Ltd. 231751 7.00 231751 7.0091. M/s. Laolean Investment Pvt. Ltd. 16407 0.50 16407 0.5092. M/s. Longwell Investment Pvt. Ltd. 5321 0.16 5321 0.1693. M/s. Momentum Investment Pvt. Ltd. 10779 0.33 10779 0.3394. M/s. Motto Investment Pvt. Ltd. 10823 0.33 10823 0.3395. M/s. Mod Fashions & Securities Pvt. Ltd. 54339 1.64 54339 1.6496. M/s. Uniglobe Mod Travels Pvt. Ltd. 32121 0.97 32121 0.9797. M/s. Pink Flower Investment Pvt. Ltd. 2000 0.06 2000 0.0698. M/s. Carefree Merchants Pvt. Ltd. 36115 1.09 36115 1.0999. M/s. Mahavir Export & Import Company Pvt. Ltd. 100 0.00 100 0.00100. M/s. MMB Sales (India) Pvt. Ltd. 9000 0.27 9000 0.27101. M/s. Shubh Credits Pvt.Ltd. 5916 0.18 5916 0.18102. M/s. Status Mark Finvest Ltd. 227844 6.89 6.89 227844 6.89 6.89103. M/s. Utility Holdings Pvt.Ltd. 39339 1.19 39339 1.19104. M/s. Ujala Holding Pvt.Ltd. 12909 0.39 12909 0.39105. M/s. Meghla Investment Pvt. Ltd. 79605 2.40 79605 2.40106. M/s. ABC Holding Pvt. Ltd. 116036 3.51 116036 3.51107. M/s. Chowmukhi Finance & Investment Pvt. Ltd. 1300 0.04 1300 0.04108. M/s. First Choice Enterprises Pvt. Ltd. 77235 2.33 77235 2.33109. M/s. Ashoka Mercantile Ltd. 129455 3.91 129455 3.91110. M/s. Modipon Ltd. 5580 0.17 5580 0.17111. M/s. Net Across Holdings & Investment Pvt. Ltd. 2025 0.06 2025 0.06

Sub Total ‘C’ 1279329 38.66 6.89 1279329 38.66 6.89** Total (A+B+C) 1968635 59.49 11.89 1968635 59.49 11.89

*Undertakings for Non-disposal of Shareholding are given to FIs/Banks.**Number of persons in category of Promoter and Promoter Group are 111 only having 121 folios.




shares* shares*


(iii) Change in Promoters’ Shareholding (please specify, if there is no change):

Sl Shareholding at the beginning of the year Cumulative Shareholding during the yearNo. (as on 1st April, 2015) (as on 1st April, 2015 to 31st March, 2016)

No. of shares % of total shares No. of shares % of total sharesof the Company of the Company

At the beginning of the yearDate wise Increase/Decrease in PromotersShareholding during the year specifyingthe reasons for Increase/Decrease There were no changes in shareholding of promoters during the year 2015-16.(e.g. allotment/ transfer/bonus/sweatequity etc.)At the end of the year.

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

SI. Name Shareholding Date Increase/ Reason Cumulative ShareholdingNo. Decrease in during the year

Shareholding (01-04-2015 to 31-03-2016)No. of Shares % of total No. of % of total

at the beginning shares of the Shares shares of(01-04-2015)/ Company the Company

end of the year(31-03-2016)

1. Life Insurance Corpn of India 159256 4.81 01.04.2015 - Nil movementduring the year.

159256 4.81 31.03.2016 - 159256 4.812. The Oriental Insurance 59555 1.80 01.04.2015 - Nil movement

Company Limited during the year.59555 1.80 31.03.2016 - 59555 1.80

3. General Insurance Corpn of India. 46562 1.41 01.04.2015 - Nil movementduring the year.

46562 1.41 31.03.2016 - 46562 1.414. The New India Assurance Co. Ltd. 45403 1.37 01.04.2015 - Nil movement

during the year.45403 1.37 31.03.2016 - 45403 1.37

5. Shri Mahendra Girdhari Lal 37888 1.14 01.04.2015 - Nil movementduring the year.

37888 1.14 31.03.2016 - 37888 1.146. National Insurance Co. Ltd. 25990 0.79 01.04.2015 - Nil movement

during the year.25990 0.79 31.03.2016 - 25990 0.79

7. United India Insurance Co. Ltd. 14612 0.44 01.04.2015 - Nil movementduring the year.

14612 0.44 31.03.2016 - 14612 0.448. 3A Capital Services Ltd. 13163 0.40 01.04.2015 - Nil movement

during the year.13163 0.40 31.03.2016 - 13163 0.40

9. Shri Shailesh Dolatrai Shah 11325 0.34 01.04.2015 - Nil movementduring the year.

11325 0.34 31.03.2016 - 11325 0.3410 3A Financial Services Ltd. 5529 0.17 01.04.2015 - Nil movement

during the year.5529 0.17 31.03.2016 - 5529 0.17


(v) Shareholding of Directors and Key Managerial Personnel:

SI. Name Shareholding Date Increase/ Reason Cumulative ShareholdingNo. Decrease in during the year

Shareholding (01-04-2015 to 31-03-2016)No. of Shares % of total No. of % of total

at the beginning shares of the Shares shares of(01-04-2015)/ Company the Company

end of the year(31-03-2016)

A. DIRECTORS

1. Mahendra Kumar Modi, 21461 0.65 01.04.2015 - Nil movementManaging Director during the year

21461 0.65 31.03.2016 - 21461 0.65

2. Umesh Kumar Modi, 104200 3.15 01.04.2015 - Nil movementManaging Director during the year

104200 3.15 31.03.2016 - 104200 3.15

3. Krishan Kumar Modi, 9664 0.29 01.04.2015 - Nil movementNon-Executive Director during the year

9664 0.29 31.03.2016 - 9664 0.29

4. Vinay Kumar Modi, 25477 0.77 01.04.2015 - Nil movementNon-Executive Director during the year

25477 0.77 31.03.2016 - 25477 0.77

5. Shri Rakesh Kumar Modi, 48901 1.48 01.04.2015 - Nil movementNon-Executive Director during the year

48901 1.48 31.03.2016 - 48901 1.48

6. Manish Kumar Modi, 22050 0.67 01.04.2015 - Nil movementNon-Executive Director during the year

22050 0.67 31.03.2016 - 22050 0.67

7. Shri Abhishek Modi, 100 0.00 01.04.2015 - Nil movementNon-Executive Director during the yearr

100 0.00 31.03.2016 - 100 0.00

8. Santosh Kumar Aggarwal, 100 0.00 01.04.2015 - Nil movementNon-Executive Director during the year

100 0.00 31.03.2016 - 100 0.00

B. Key Managerial Personnel(KMP’s)

1. Narayan Prakash Bansal, Nil 0.00 01.04.2015 - Nil movementChief Financial Officer during the year

Nil 0.00 31.03.2016 - Nil 0.00

2. Vimal Prasad Gupta, Nil 0.00 01.04.2015 - Nil movementCompany Secretary during the year

Nil 0.00 31.03.2016 - Nil 0.00


V. INDEBTEDNESS:Indebtedness of the Company including interest outstanding/accrued but not due for payment.

(` in thousands)

Indebtedness at the beginning of the financial year Secured Loans Unsecured Loans Deposits Total(as on 01.04.2015) excluding deposits Indebtedness

i) Principal Amount 377303 589967 6436 973706ii) Interest due but not paid 475995 7271 28089 511355iii) Interest accrued but not due 11 6145 - 6156

Total (i+ii+iii) 853309 603383 34525 1491217Change in Indebtedness during thefinancial year● Addition 7345 53236 - 60581● Reduction (2987) (63416) (21) (66424)

Net Change 4358 (10180) (21) (5843)Indebtedness at the end of the financial year

(as on 31.03.2016)i) Principal Amount 383655 581963 6419 972037ii) Interest due but not paid 474003 5095 28085 507183iii) Interest accrued but not due 9 6145 - 6154

Total (i+ii+iii) 857667 593203 34504 1485374

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

( ` in thousands)Sl. No. Particulars of Remuneration Name of Managing Directors Total Amount

Mahendra Kumar Modi Umesh Kumar Modi1. Gross Salary(a) Salary as per provisions contained in Section 17(1) 1500.00 - 1500.00

of the Income Tax Act, 1961.(b) Value of perquisites u/s 17(2) of the I.T.Act, 1961 300.00 - 300.00(c) Profits in lieu of salary u/s 17(3) of the I.T. Act, 1961. - - -

2. Stock Option - - -3. Sweat Equity - - -4. Commission:

- as % of profit - - -- others, specify……… - - -

5. Others, please specify…… - - -Total (A) 1800.00 - 1800.00Ceiling as per Act i. Modi Industries Limited, being a sick Company, has heavy losses. Hence

approval of Central Government is obtained for payment of remuneration to theManaging Director, Shri Mahendra Kumar Modi.

ii. Considering the financial position of the Company Shri Umesh Kumar Modi,re-appointed as Managing Director with remuneration, had requested for waiverof his remuneration. Accordingly the Central Government approved hisappointment as Managing Director without remuneration.


B. Remuneration to other Directors:

Sl. No. Particulars of Remuneration Name of Directors Total Amount

Krishan Kumar Vinay Kumar Rakesh Kumar Manish Kumar Abhishek Santosh KumarModi Modi Modi Modi Modi Aggarwal

1. Independent Directors #Fee for attending board / - - - - - - -committee meetingsCommission - - - - - - -Others, please specify - - - - - - -

Total (1) - - - - - - -2. Other Non-Executive Directors

Fee for attending board / 4.0 4.0 12.0 7.5 10.5 10.5 48.5 committee meetingsCommission - - - - - - -Others, please specify - - - - - - -

Total (2) 4.0 4.0 12.0 7.5 10.5 10.5 48.5Total (B)=(1+2) 4.0 4.0 12.0 7.5 10.5 10.5 48.5Total Managerial Remuneration (A+B) *1848.5Overall Ceiling as per the Act Modi Industries Limited, being a sick Company, has heavy losses. Hence only sitting fees is paid to Non-

Executive Directors.* Total remuneration to Managing Director and other Directors (being the total of A and B)# Presently the Company has no independent directors. The Company is a sick industrial Company within the meaning of Section 3(1)(o) of the Sick Industrial

Companies (Special Provisions) Act, 1985 as declared by the Hon’ble BIFR vide their order dated 14th March, 1991. The Hon’ble Supreme Court in SLP(Civil) Nos. 23095 – 23097 of 2010 (M.K. Modi vs. U.K. Modi) has passed an order dated 27th August, 2010 directing the parties therein to maintain “statusquo” with regard to the management of the Company.In view of the above order of Hon’ble Supreme Court, Board of Directors are unable to appoint any new director under provisions of Companies Act, 2013and Listing Agreement/obligations to comply with the composition of Board and/or various Board Committees.

C. Remuneration to Key Managerial Personnel other than MD:(` in thousands)

Sl. No. Particulars of Remuneration Key Managerial PersonnelChief Financial Officer Company Secretary Total

(Narayan Prakash Bansal) (Vimal Prasad Gupta)1. Gross Salary

(a) Salary as per provisions contained in Section 17(1). 2693.32 1309.10 4002.42 of the Income Tax Act, 1961

(b) Value of perquisites under Section 17(2) of the 368.46 61.63 430.09Income Tax Act, 1961.

(c) Profits in lieu of salary under Section 17(3) of the - - -Income Tax Act, 1961.

2. Stock Option - - -3. Sweat Equity - - -4. Commission -

- as % of profit - - -- others, please specify…….. - - -

5. Others, please specify …………. - - -Total 3061.78 1370.73 4432.51

( ` in thousands)


VII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES:

Type Section of the Brief Details of Authority[RD / Appeal made,Companies Act Description Penalty /Punishment NCLT/ COURT] if any

Compounding/ fees imposed (give Details)

A. COMPANYPenaltyPunishmentCompoundingB. DIRECTORSPenaltyPunishment NILCompoundingC. OTHEROFFICERS INDEFAULTPenaltyPunishmentCompounding


ANNEXURE - ‘E’ TO DIRECTORS’ REPORT

NOMINATION AND REMUNERATION &BOARD DIVERSITY POLICY

Introduction:In compliance with Section 178 of the Companies Act, 2013 (‘Act’) read with the Rules made there under and Clause 49 of the Listing Agreement,the policy known as ‘Nomination and Remuneration & Board Diversity Policy’ for inter-alia setting up the criteria of nomination and policy forremuneration of Directors, Key Managerial Personnel, Senior Management Personnel and other employees has been formulated and approvedby the ‘Nomination and Remuneration Committee’* and initialed by the Chairman of the Committee.* Note:The Company, ‘Modi Industries Limited’, is a sick company within the meaning of Section 3(1)(o) of the Sick Industrial Companies (SpecialProvisions) Act, 1985 declared by the Hon’ble BIFR vide their order dated 14th March, 1991. The Hon’ble Supreme Court in SLP (Civil) Nos. 23095-23097 of 2010 (M.K. Modi Vs. U.K. Modi) has passed an order dated 27th August, 2010 directing the parties therein to maintain “status quo”with regard to the Management of the company. In view of the said order of the Hon’ble Supreme Court, it has been advised to maintain the existingstrength of Directors on the Board and reconstitute the composition of minimum number of members/directors of various Board Committees,from within the existing Directors to comply with the provisions of the Companies Act, 2013 and various Clause(s) of the Listing Agreement.The above policy will always be subject to the final order of Hon’ble Supreme Court and/or Hon’ble BIFR/AAIFR.DefinitionsFor the purpose of this Policy:

‘Act’ shall mean the Companies Act, 2013;‘Board’ shall mean the Board of Directors of MODI INDUSTRIES LIMITED;‘Committee’ shall mean the Nomination and Remuneration Committee (NCR) of the Company, constituted and re-constituted by the Boardfrom time to time;‘Company’ shall mean MODI INDUSTRIES LIMITED;‘Directors’ shall mean the directors of the Company;‘Independent Director’ shall mean a director referred to in Section 149 (6) of the Companies Act, 2013;‘Key Managerial Personnel (KMP)’ shall mean the following:(i) Executive Chairman and / or Managing Director (MD) and/or Manager(ii) Whole-time Director (WTD);(iii) Company Secretary (CS);(iv) Chief Financial Officer (CFO);(v) Such other officer as may be prescribed.‘Senior Management Personnel (SMP)’ shall mean personnel of the company who are members of its core management team excludingthe Board of Directors. This would also include all members of management one level below the executive directors including the functionalheads.

OBJECTIVE & PURPOSEThe objective and purpose of this Policy are as follows:

To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive andNon-Executive) and persons who may be appointed as Senior Management and Key Managerial Personnel (KMP) and to determineremuneration of Directors, KMP and Senior Management Personnel (SMP).To determine remuneration based on the Company’s size and financial position and trends and practices on remuneration prevailing inpeer companies in the same industry.To provide them reward linked directly to their efforts, performance, dedication and achievement relating to the Company’s operations.To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitiveadvantage.

SCOPE OF THE POLICYThe policy shall be applicable to the following in the Company:

DirectorsKey Managerial Personnel (KMP)Senior Management Personnel (SMP)

Other employees of the Company


CONSTITUTIONThe Board of Directors of the Company has constituted the ‘Nomination and Remuneration Committee’ with the following members:-

S. No. Name Designation Profile1 Shri Rakesh Kumar Modi Member Non Executive Director2 Shri Manish Kumar Modi Member Non Executive Director3 Shri Abhishek Modi Member Non Executive Director4 Shri Satosh Kumar Aggarwal Member Non Executive Director

The Board of the Company may re-constitute / make any changes in the Committee from time to time in order to fall in line with the Company’spolicy and / or applicable statutory requirement and / or subject to the final order of Hon’ble Supreme Court and/or Hon’ble BIFR/AAIFR as andwhen necessary.

1. Appointment criteria and qualifications:

A. General

1.1 The Committee shall identify and ascertain the integrity and probity, qualification, expertise and experience for appointment to theposition of Directors, KMPs & SMPs and accordingly recommend to the Board his/her appointment.

1.2 The Director/ Independent Director/ KMP/ SMP shall be appointed as per the procedure laid down under the provisions of theCompanies Act, 2013, rules made thereunder, Listing Agreement or any other enactment for the time being in force.

1.3 The other employees shall be appointed and removed as per the policy and procedure of the Company.

1.4 Letter of appointment shall be issued based on the basis of the guidelines for the same under the Companies Act, 2013 or as per theinternal policy of the Company.

B. Directors

1.5 The Committee shall determine the suitability of appointment of a person to the Board of Directors of the Company by ascertainingthe ‘fit and proper criteria’ of the candidate. The candidate shall, at the time of appointment, as well as at the time of renewal ofdirectorship, fill in such form as approved by the Committee to enable the Committee to determine the ‘Fit and Proper Criteria’. Theindicative form to be filled out is placed as Annexure 1 to this Policy.

1.6 The Company shall not appoint or re-appoint the employment of any person as Managing Director / Whole Time Director who hasattained the age of seventy years, Provided that appointment of a person who has attained the age of seventy years may be madesubject to by passing a special resolution in which case the explanatory statement annexed to the notice for such motion shall indicatethe justification for appointing such person.

1.7 The potential candidate to be appointed as Director/Independent Director/KMPs/ SMPs has not been disqualified under theCompanies Act, 2013, Rules made there under, Listing Agreement or any other enactment for the time being in force.

2. Term / Tenure:

2.1 Managing Director / Whole-time Director:

The Company shall appoint or re-appoint any person as Managing Director, or Whole-time Director with or without remuneration fora term not exceeding five years at a time subject to approval of Central Government, if required.

No re-appointment shall be made earlier than one year before the expiry of term of the Director appointed.

2.2 Independent Director*

An Independent Director shall hold office for a term up to five years on the Board of the Company and will be eligible for re-appointmenton passing of a special resolution by the Company and disclosure of such appointment in the Board’s report.

No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall be eligible forre-appointment in the Company as Independent Director after the expiry of three years from the date of cessation as such in theCompany. The Committee shall take into consideration all the applicable provisions of the Companies Act, 2013 and the relevant rules,as existing or as may be amended from time to time.

2.3 Key Managerial personnel / Senior management or Other Employees.

The Term/ Tenure of the KMP’s/ Senior Management Personnel and other employees shall be as per the companies prevailing internalpolicy.


3 RemovalDue to reasons for any disqualification mentioned in the Companies Act, 2013 and rules made thereunder or under any other applicableAct, rules and regulations, or any other reasonable ground, the Committee may recommend to the Board for removal of a Director, KMPor SMP subject to the provisions and compliance of the Act, rules and regulations.

4 Retirement(a) The Director shall retire as per applicable provisions of the Companies Act, 2013 along with the Rules made thereunder.

(b) The KMPs & SMPs shall retire on attaining the age of 60 (sixty) years or later as may be so decided by the concerned Managing DirectorShri Mahendra Kumar Modi and / or Shri Umesh Kumar Modi for their related units.

(c) Existing KMPs and or SMPs who are of over 60 years of age shall continue in service of the Company till such time as may be decidedby concerned Managing Director Shri Mahendra Kumar Modi and / or Shri Umesh Kumar Modi for their related units.

(d) Any new appointment of KMP(s) and SMP(s) who are 60 years of age or above can be made by the concerned Managing DirectorShri Mahendra Kumar Modi and / or Shri Umesh Kumar Modi for their related units and such person(s) shall retire as may be decidedby the aforesaid MDs.

5 Diversity on the Board of the CompanyThe Company aims to enhance the effectiveness of the Board by diversifying it and obtain the benefit out of it by better and improveddecision making. In order to ensure that the Company’s board room has appropriate balance of skills, experience and diversity ofperspectives that are imperative for the execution of its business strategy, the Company shall consider a number of factors, including butnot limited to skills, industry experience, background, race and gender.

The Policy shall conform with the following two principles for achieving diversity on its Board:

Decisions pertaining to recruitment, promotion and remuneration of the directors will be based on their performance and competence;and

For embracing diversity and being inclusive, best practices to ensure fairness and equality shall be adopted and there shall be zerotolerance for unlawful discrimination and harassment of any sort whatsoever.

In order to ensure a balanced composition of executive, non-executive and independent directors on the Board*, the Company shallconsider candidates from a wide variety of backgrounds, without discrimination based on the following factors:

Gender- The Company shall not discriminate on the basis of gender in the matter of appointment of director on the Board.

Age- Subject to the applicable provisions of Companies Act, 2013, age shall be no bar for appointment of an individual as directoron the Board of the Company.

Nationality and ethnicity - The Company shall promote having a board room comprising of people from different ethnic backgroundsso that the directors may efficiently contribute through their knowledge, sources and understanding for the benefit of Company’sbusiness;

Physical disability - The Company shall not discriminate on the basis of any immaterial physical disability of a candidate forappointment on Company’s Board, if he/she is able to efficiently discharge the assigned duties.

Educational qualification- The proposed candidate shall possess desired team building traits that effectively contribute to his/ herposition in the Company. The Directors of the Company shall have a mix such as of finance, legal and management background, thattaken together, provide the Company with considerable experience in a range of activities including varied industries, education,government, banking, and investment.

6 RemunerationIn discharging its responsibilities the Committee shall have regard to the following Policy objectives:

(a) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, KMPs, SMPs andother employees of the quality, required to run the Company successfully;

(b) The remuneration to Directors, KMPs SMPs & other employees will be by way of fixed pay as per current policy of the Company andas per the provisions of Companies Act, 2013 and rules made there under. Company will introduce incentive pay as and when feasibledepending upon its revival.

The payment structure of remuneration will be as follows:

6.1 Non-Executive / Independent Directors :

The Independent Directors will be paid remuneration by way of sitting fee for attending meeting of the Board or any Committee thereof,provided that such amount shall be subject to the ceiling of the limit as prescribed under the Companies Act, 2013 or Rules madethere under or any other enactment for the time being in force and the same is to be approved by the Board of Directors asrecommended by the Committee.


6.2 Managing Director (MD) / Whole-time Director (WTD) :

The remuneration / compensation payable to MD / WTD shall be governed by the provisions of Companies Act, 2013 and Rules madethere under or any other enactment for the time being in force and will be subject to approval of the Board of Directors, shareholdersand the Central Government wherever required and shall be in compliance with Schedule V of the Companies Act. 2013.

6.3 Key Managerial Personnel (KMP)/Senior Management Personnel (SMP) :

Since the Company is a Sick Industrial Company registered with the Hon’ble Board for Industrial and Financial Reconstruction(“BIFR”) under the provisions of Section 15 (1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (“SICA”), theremuneration policy for KMPs & SMPs has been designed to provide multiple options inter-alia for the purpose of operationalconvenience and requirement.

(a) The existing KMPs & SMPs, if any, shall be eligible for a monthly fixed and/or variable remuneration as per their terms ofemployment.

(b) For any appointment of new KMP/SMP, the remuneration will be as decided by the Board on receipt of recommendation by theNRC. However, Managing Director, Shri Mahendra Kumar Modi and / or Shri Umesh Kumar Modi for their related units, mayapprove the appointment of any new KMP(s)/SMP(s) which shall be done by the Company and such appointment will be intimatedto the Committee for their consideration and recommendation to the Board for their confirmation.

(c) Annual increment will be made by the concerned Managing Director, Shri Mahendra Kumar Modi and / or Shri Umesh KumarModi for their related units and jointly by both the Managing Directors in respect of Corporate Office.

(d) Any increment which is beyond the above increment policy of the Company to the existing remuneration / compensation of theKMPs/SMPs will be recommended by the Committee to the Board for their approval based on performance evaluation.

(e) The above both the MDs shall have power to approve that the Company grants and pays any ex-gratia amount not exceeding100% of any person’s annual remuneration and / or upto 50% increase in the person’s annual remuneration to KMP(s)/SMP(s)depending upon their performance.

(f) The said increment and or ex-gratia approved by the MD beyond the above policy mentioned at point (e) above will be intimatedto the Committee at its subsequent meeting.

6.4 Other Employees

The power to decide / determine structure of remuneration for other employees has been delegated to the concerned ManagingDirector, Shri Mahendra Kumar Modi and / or Shri Umesh Kumar Modi or through their representatives in consultation with theconcerned MD for their related unit.

7 Evaluation

7.1 Criteria for evaluation of Managing Director(s):

(i) The Managing Director(s) shall be evaluated on the basis of targets / Performance of the Company / any other Criteria as maybe given to them by the Board from time to time.

(ii) The Managing Director(s) shall be evaluated by the Independent Directors* in their separate meeting where the performanceof non–independent director(s) and the Board as a whole shall be considered.

7.2 Criteria for evaluation of Non-Executive Directors:

The performance evaluation of Non-Executive Directors and / or Independent Directors* shall be done by the entire Board of Directorsexcluding the Director being evaluated.

The Non-Executive Directors shall be evaluated on the basis of the following criteria i.e. whether they :

(a) act objectively and constructively while exercising their duties;

(b) exercise their responsibilities in a bona fide manner in the interest of the company;

(c) devote sufficient time and attention to their professional obligations for informed and balanced decision making;

(d) do not abuse their position to the detriment of the company or its shareholders or for the purpose of gaining direct or indirectpersonal advantage or advantage for any associated person;

(e) refrain from any action that would lead to loss of his independence

(f) inform the Board immediately when they lose their independence,

(g) assist the company in implementing the best corporate governance practices.

(h) strive to attend all meetings of the Board of Directors, the Committees and the general meetings of the Company;

(i) participate constructively and actively in the committees of the Board in which they are chairpersons or members;


(k) keep themselves well informed about the company and the external environment in which it operates;

(l) do not to unfairly obstruct the functioning of an otherwise proper Board or committee of the Board;

(m) moderate and arbitrate in the interest of the company as a whole, in situations of conflict between management and shareholder’sinterest.

(n) abide by Company’s Memorandum and Articles of Association, Companies Act, rules made thereunder and Listing agreement,company’s policies and procedures including code of conduct, insider trading guidelines etc.

(o) Any other factor that the Independent Director(s) / Board of Directors may consider necessary for such evaluation.

(p) Safeguarded the confidentiality.

7.3 Criteria for evaluating performance of Key Managerial Personnel and Senior Management Personnel:Criteria for evaluating performance of KMP’s and Senior Management Personnel shall be as per the assignments given to them atthe beginning of/during the year by their respective reporting heads.

7.4 Criteria for evaluating performance of Other Employees:The power to decide the criteria for evaluating performance of other employees has been delegated to HR Department/head ofrespective units of the Company.

MINUTES OF COMMITTEE MEETINGProceedings of all meetings must be recorded as minutes and signed by the Chairman of the Committee within the prescribed period, and thesaid Minutes of the Committee meetings will be tabled at the subsequent Board and Committee meeting. The company should prepare the minutesand get it signed in such manner as prescribed in Companies Act, 2013 and Secretarial Standards issued by Institute of Company Secretariesof India.

DISCLOSURE OF THIS POLICYThe policy shall be disclosed in the Annual Report of the Company, as required under Companies Act, 2013, rules made there under and the ListingAgreement, as amended from time to time and as may be required under any other law for the time being in force.

REVIEWThe Committee as and when required shall assess the adequacy of this Policy and make any necessary or required amendments to ensure itremains consistent with the Board’s objectives, current law and best practice.

Annexure to the policyCriteria for determination of the ‘Fit and Proper Criteria’

Name of Company: Modi Industries LimitedDeclaration and Undertaking

I. Personal details of the Candidate/ Directora. Full nameb. Date of Birthc. Educational Qualificationsd. Relevant Background and Experiencee. Permanent Addressf. Present Addressg. E-mail Address/ Telephone Numberh. Permanent Account Number under the Income Tax Acti. Relevant knowledge and experiencej. Any other information relevant to Directorship of the Company.

II. Relevant Relationships of Candidate / Directora. List of Relatives if any who are connected with the Company [w.r.t. the Section

2(76) & 2(77) of the Companies Act, 2013]b. List of entities, if any, in which he/she is considered as being interested

[w.r.t. Section 184 of the Companies Act, 2013]c. Names of other Companies in which he/ she is a member of the Board.

III. Records of professional achievementsa. Relevant Professional achievements


IV. Proceedings, if any, against the Candidate/ Directora. If the person is a member of a professional association/ body, details of

disciplinary action, if any, pending or commenced or resulting in convictionin the past against him/her or whether he/she has been banned from entry ofat any profession/ occupation at any time.

b. Whether the person attracts any of the disqualifications envisaged underSection 164 of the Companies Act, 2013?

c. Whether the person in case of appointment as Managing Director, Whole-time Director attracts any of the disqualification envisaged under ScheduleV of Companies Act, 2013 ?

d. Whether the person at any time come to the adverse notice of a regulatorsuch as SEBI, IRDA, MCA ?

V. Any other explanation/ information in regard to items I to III and other information considered relevant for judging fit andproper.Undertaking1. I confirm that the above information is to the best of my knowledge and belief true and complete. I undertake to keep the Company

fully informed, as soon as possible, of all events which take place subsequent to my appointment/re-appointment which are relevantto the information provided above.

2. I also undertake to execute the deed of covenant required to be executed by all directors of the Company.


ANNEXURE - ‘F’ TO DIRECTORS’ REPORT SECRETARIAL AUDIT REPORT

(FORM NO. MR. 3)FOR THE FINANCIAL YEAR ENDED ON 31st MARCH, 2016

[Pursuant to Section 204(1) of the Companies Act, 2013 and rule No. 9 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules, 2014.]To,The Members,Modi Industries Limited,Modinagar-201204.

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices byModi Industries Limited (hereinafter called the Company or MIL). Secretarial Audit was conducted in a manner that provided me a reasonablebasis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company,the information provided by the Company, its officers, agents and authorised representatives during the conduct of secretarial audit, theexplanations and clarifications given to me and the representations made by the Management, I hereby report that in my opinion, the Companyhas, during the audit period covering the financial year ended on March 31, 2016 generally complied with the statutory provisions listed hereunderand also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to thereporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records made available to me and maintained by the Companyfor the financial year ended on March 31, 2016 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 rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; (to the extent as applicable to the Company during theAudit Period);

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment,Overseas Direct investment and External Commercial Borrowings; (not applicable to the Company during the Audit Period);

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 (from 1st April, 2015 to 14th May, 2015)

and Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (from 15th May, 2015 to 31st March,2016);

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; (not applicable tothe Company during the Audit Period);

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,1999 and The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; (Not applicable to theCompany during the audit period);

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (not applicable to the Companyduring the Audit Period);

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding theCompanies Act and dealing with the clients; (Not applicable to the Company during the audit period);

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (not applicable to the Company duringthe Audit Period) and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998. (not applicable to the Company during theAudit Period).

Other laws which are specifically applicable to the Company and its industrial units or have an impact thereon:

1) Factories Act, 1948.

2) The Payment of Wages Act, 1936.

3) The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

4) Air (Prevention and Control of Pollution) Act, 1981 and the rules and standards made thereunder.

5) Water (Prevention and Control of Pollution) Act, 1974 and Water (Prevention and Control of Pollution) Rules,1975.


6) Environment Protection Act, 1986 and the rules, notifications issued thereunder.

7) Excise Act.

8) Finance Act,1994 ( Service Tax ).

9) State Laws governing Sales Tax/VAT.

10) Food Safety And Standards Act, 2006.

I have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by the Institute of Company Secretaries of India with respect to Board and general meetings and adoptedas per Section 205 of Companies Act, 2013 (as applicable to the Company since 1st July, 2015 during the audit period).

(ii) The Listing Agreements entered into by the Company with U.P. Stock Exchange Limited, (UPSE) Kanpur and Delhi Stock ExchangeLimited, (DSE) New Delhi. SEBI had issued exit order of UPSE on 09th June, 2015 and also SEBI had derecognized the DSE on 19th

November, 2014. SEBI vide its circular No. CIR/MRD/DSA/5/2015 Dated 17th April, 2015 provides that the exclusively listed Companieswhich fail to obtain listing in any other nationwide stock exchange will cease to be a listed Company and will be moved to the DisseminationBoard by the existing stock exchange. However, the Company has tried voluntarily to comply with, to the extent generally possible, thedisclosures norms given in Listing Agreements/Obligations.

(iii) As regards compliance of other general laws, Competition Law, Environmental Laws and Financial Laws like Tax Laws and Customs Act,Intellectual Properties Laws (Patents, Copyright and Trademarks) etc which have impact on/applicable to the Company or its IndustrialUnits. I have relied upon the representation given by the management.

During the period under review and as per the representations and clarifications made, the Company has generally complied with the provisionsof the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above except as specifically pointed out by the Management into the ‘Notesto Accounts’ forming part of Financial Statements of Financial Year 2015-16.

I further report that the Board of Directors of the Company is constituted with composition of Executive Directors & Non-Executive Directors. TheHon’ble Supreme Court in SLP (Civil) No. 23095-23097 of 2010 (M.K. Modi Vs. U.K. Modi) has passed an order dated 27th August, 2010 directingto maintain ‘status quo’ with regard to the management of the Company. In view of this order, the Company could not have appointed independent& women directors and hence could not maintain proper composition of Board of Directors and various Board Committees. The Nomination andRemuneration Committee as well as Audit Committee consists of 4 Non-Executive Directors namely (i) Shri Rakesh Kumar Modi,(ii) Shri ManishKumar Modi, (iii) Shri Abhishek Modi and (iv) Shri Santosh Kumar Aggarwal as members. The decisions regarding nomination and remunerationof executive and non-executive directors are taken by the entire Board on recommendation of Nomination and Remuneration Committee subjectto such approvals from the Shareholders or Central Government as may be necessary.

Adequate notice was given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven daysin advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and formeaningful participation at the meeting. All decisions at Board Meetings and Committee Meetings were carried out unanimously in general andduly recorded in the minutes of the meetings of Board of Directors or Committees thereof, as the case may be.

I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Companyto monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that during the audit period the Company had following events which had bearing on the Company’s affairs in pursuance of theabove referred laws, rules, regulations, guidelines, standards etc.

1. The Company is a Sick Industrial Company as declared by the BIFR vide their order dated 14th March, 1991 in terms of Section 3(1)(o)of Sick Industrial Companies (Special Provisions) Act, 1985. The IDBI was appointed as Operating Agency, who have forwarded draftrehabilitation scheme of the Company to BIFR on 9th July, 2013 for their consideration, which is still pending for approval. On 28th October,2013, Hon’ble BIFR passed an order; inter-alia holding that the Company is not likely to make its net worth positive as a result whereof, itis not likely to become viable on a long term basis. Hence, it would be just, equitable and in public interest that the Company be woundup under Section 20(1) of SICA. Pursuant to the order dated 28th October, 2013, the BIFR published an advertisement on 9th November,2013 in ‘Times of India’ in relation to the Notice under Section 20(1) of the SICA and BIFR Regulations for proposed winding up of theCompany (MIL), thereby inviting shareholders, creditors and others to file respective objections or suggestions. Shri U.K. Modi and ShriM.K. Modi have preferred an appeal before the AAIFR challenging the aforesaid order of BIFR. The AAIFR has granted an unconditionalstay and the Matter is still pending for decision.

2. With regard to payment of Fixed Deposits, as per Section 74 of the Companies Act, 2013, deposits accepted before the commencementof the Companies Act, 2013 (i.e. 1st April, 2014) shall be repaid within one year from the commencement of the Act. The Company has filedan application with Company Law Board on 31st March, 2015 seeking extension of time for repayment of Public Deposits under Section74(2) of the Act.

The Company Law Board in order No. CA10/12/2015 dated 21st April, 2016 have dismissed the aforesaid application and refused toextend the period of repayment of deposits and Interest thereon. The Company has filed an Appeal before the Hon’ble Allahabad High


Court on 23rd July, 2016 against aforesaid Order of the Company Law Board. The matter is referred for hearing by Hon’ble High Court andnext date of hearing is fixed on 30th August, 2016.

This report is to be read with my letter of even date which is annexed and forms an integral part of this report. It is advised that to ensurecompliance of all applicable laws to the Company for good governance and as required by Secretarial Standards on Meetings of Board ofDirectors, a list of Laws applicable to the Company and status of compliance thereof be placed as an item of agenda at the first meeting of theBoard in each of the financial year.

Amar Nath JaiswalCompany Secretary

Place: Delhi (C.P. No. 14629)Dated : 22-08-2016 ( M. No. ACS-19000)

ANNEXURE TO SECRETARIAL AUDIT REPORTTo,The MembersModi Industries Limited

Modinagar-201204.

My Report of even date is to be read along with this letter.

.1 Maintenance of secretarial record is the responsibility of the management of the Company. My responsibility is to express an opinion onthese secretarial records based on my audit.

2. I have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness of the contentsof the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in Secretarial records. I believethat the process and practices, I followed provide a reasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records and books of accounts of the Company.

4. Where ever required, I have obtained the management representation about the compliance of laws, rules and regulations and happeningof events etc.

5. The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility ofmanagement. My examination was limited to the verification of procedure on test basis.

6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with whichthe management has conducted the affairs of the Company.

Amar Nath JaiswalCompany Secretary

Place: Delhi (C.P. No. 14629)Dated : 22-08-2016 ( M. No. ACS-19000)


ANNEXURE - ‘G’ TO DIRECTORS’ REPORTDISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION:

DESCRIPTION PAINT UNIT

RESEARCH & DEVELOPMENT (R & D) :

1. Specific areas in which R&D 1. Development of exterior emulsion basis.carried out by the Company 2. Stoving Enamel for Medium Packaging.

2. Benefits derived as a result Contribution has increased by 1%.of the above R&D.

3. Future Plan of Action 1. Development of exterior emulsion basis.2. Development of Bases for Satina Brand Product.

EXPENDITURE ON R&D :

a. Capital (`) -b. Recurring (`) 21,08,041.44

TOTAL (`) 21,08,041.44c. R&D Expenditure 1.00%

percentage of total turnover

TECHNOLOGY ABSORPTION, ADAPTATION & INNOVATION :

1. Efforts in brief made towards N.A.technology absorption,adaptation and innovation.

2. Benefits derived as a result of N.A.the above efforts e.g. productimprovement cost reduction,product development, importsubstitution etc. .

3. In case of imported technology(imported during the last five yearsreckoned from the beginning of thefinancial year) following informationmay be furnished :a. Technology imported N.A.b. Year of Import N.A.

c. Has Technology been fully absorbed. N.A..

d. If not fully absorbed areas,where this has not taken place,

reasons therefore and future plan of action. N.A.


To the Members ofMODI INDUSTRIES LIMITEDReport on the Standalone Financial Statements(1) We have audited the accompanying standalone financial statements of Modi Industries Limited (“the Company”), which comprise the

Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information. The attached Balance Sheet does not include Assets and Liabilitiesincluding Contingent Liabilities and other additional information of Steel Unit as at 31st March, 2016 but includes balances as on 31st March,1992, except for reduction of: (i) unsecured loan by 323.95Lac in view of write-back of 278.95Lac during the financial year 2004-05and payment of 45Lac during the financial year 2005-06 on account of one-time settlement of dues of a bank and (ii) net fixed assetsby 696.19Lac (Previous year 689.38Lac) on account of provision for depreciation for the period 1st April, 1993 to 31st March, 2016 onfixed assets as stated in Note 27(4)(c) of the standalone financial statements. The Statement of Profit and Loss does not include: (i) certainprovisions as stated in Note 27(4)(f) and (ii) loss, amount unascertained, of the Steel Unit for the year 1992-93 in view of non-incorporationof the financial statements of the Steel Unit for the above year. The Cash Flow Statement, except for certain adjustments made as statedin foot-note 2 of cash flow statement, does not include adjustments for Cash Flows from investing / financing activities and changes inassets and liabilities of Steel Unit in view of non-availability of audited Balance Sheets of the Unit as on 31st March, 2015 and 31st March,2016 {Refer Note 27(4)}.

(2) Management’s Responsibility for the Standalone Financial StatementsThe Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (“the Act”) with respectto the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performanceand cash flows of the Company in accordance with the Accounting principles generally accepted in India, including the AccountingStandards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility includesmaintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financialcontrols, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparationand presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whetherdue to fraud or error.

(3) Auditor’s ResponsibilityOur responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account theprovisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financialstatements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. Theprocedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant tothe Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriatein the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s directors, as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our adverse audit opinion on thestandalone financial statements.

(4) Basis for Adverse Opinion(A) The books of accounts, vouchers and other documents of the Steel Unit for 1992-93 were not made available to us and consequently

audit could not be conducted in respect of the same. {Note 27(4)}. Therefore, as stated in Paragraph 1 above, the attached BalanceSheet, Statement of Profit and Loss and Cash Flow Statement does not include: (a) the financial data / impact of working results andof declaration of closure / post-closure transactions, which includes realization of depot sales / dues from debtors, provision / paymentof final dues of employees and payments to various parties and manufacturing / personnel / administration expenses etc., of the SteelUnit for the year 1992-93 during which the Unit had operated for ten months the exclusion of which, in our opinion, substantially impairsthe presentation of above standalone financial statements of the Company especially in view of the fact that (i) the assets and liabilitiesof Steel Unit constituted 28% and 43% respectively of the total Assets & Liabilities of the Company as at 31st March, 1992 and theIncome & Expenditure of the Steel Unit constituted 30% and 32% respectively of the total Income & Expenditure of the Company forthe said year which resulted in a loss of 787.22Lac for the Unit and (b) impact on assets, liabilities and cash flows on account of non-incorporation of transactions / balance sheets for the years 1993-94 to 2015-16 as stated in Note 27(4)(c).

(B) Further to our comments in paragraphs 1 and 4(A) above and in the Annexure referred to in paragraph 6(i) below, we report that: i. Understatement of accumulated losses on account of non-incorporation of impact of operational / working results / declaration of

INDEPENDENT AUDITOR’S REPORT

`


closure and post closure transactions of Steel Unit for the year 1992-93, amount / impact unascertained. {Refer Note 27(4) andParagraph 4(A) above}.

ii. Though the Company has been incurring huge losses continuously (losses for the five years i.e. 2011-12 to 2015-16 are` 4,276.10Lac, ` 3,489.48Lac, ` 4,289.92Lac, 2,505.50Lac and ` 884.95Lac respectively which aggregates to loss of` 15,445.95Lac for 5 years), accumulated losses of 22,335.47Lac as on 31st March, 2016 are far in excess of paid-up capital& reserves (excluding revaluation reserve) of 1,006.98Lac as on that date and the Company has been declared a sick Companyon 14th March, 1991 and was also issued a show cause notice for winding up by the Board for Industrial & Financial Restructuringon 28th October, 2013 (presently the winding up order has been stayed by the Appellate Authority for Industrial & FinancialRestructuring), the accounts have been prepared by the management on a going concern basis for the reason stated in Note27(17). In our opinion, these events / conditions cast significant doubt on the ability of the Company to continue as a going concernand the appropriateness of the said basis is inter-alia mainly dependent on the vacation of the winding-up order, sanction andimplementation of the rehabilitation scheme, Government support / incentives / subsidy for paying huge amount of farmers duestowards cane purchases for sugar season 2015-16 and waiver off interest liability since sugar seasons 2013-14 to 2015-16 ondues paid / payable to farmers and also the Company’s ability to infuse requisite funds by sale of unproductive assets or otherwisefor meeting substantial financial obligations including dues of farmers towards cane purchases.

iii. Understatement of losses on account of non-provision of interest on loans, obsolete inventories, doubtful debtors / loan andadvances and impairment loss, and not conducting physical verification of inventories and fixed assets etc. in Steel Unit as statedin Notes 27(4)(f)(i) to (vii) and 27(5) of the standalone financial statements. Amount of non-provision not ascertained by themanagement.

iv. Non-provision of impairment loss, amount unascertained by the management, of assets of Sugar and Electrode Units as statedin Note 27(41).

v. Impact of componentization of fixed assets and ascertaining useful life and original cost / estimated value of such componentsas on April 01, 2015, as required by the amended Schedule II of the Companies Act, 2013, is pending. Impact, if any, on thedepreciation expense for the year ended March 31, 2016 is yet to be ascertained by the management. [Note 27(42)].

vi. (1) Non-provision of late payment surcharge / recovery charges 302.66Lac (Previous year 302.66Lac) {Note 27(9)} and Non-provision of demands of U.P. Power Corporation Ltd 1311.49Lac (Previous year 1311.49Lac) {Note 27(4)(f) (viii)(c)};

(2) Non-provision of ESI demand 64.68Lac (previous year 63.51Lac) {Note 27(10)};(3) Non-provision of House-tax demand 188.63Lac (Previous year 188.63Lac) {Note 27(11)};(4) Non-provision of simple, penal and compound interest of 38,164.17Lac (for the year 5,414.65Lac) on term loans /

debentures and public deposits {Note 27(18)(a) and (f)} and interest / bank charges 4,124.37Lac (for the year 596.33Lac)on cash credit from banks {Note 27(18)(d) & (e)};

(5) Non-provision of Wages 27.46Lac (Previous year 27.46Lac) for the lock-out period {Note 27(21)};(6) Non-provision of recovery charges of 413.50Lac (Previous Year 413.50Lac) for sugar season 2007-08 and 1,703.95Lac

(Previous Year Nil) for sugar season 2014-15{Note 27(35)(b) & (g)};(7) Non-provision of interest upto 31st March, 2016 on cane dues for sugar season 2014-15 and 2015-16 amounting to

` 2,010.87Lac and 341.88Lac respectively. {Notes 27(35)(g) & (h)};(8) Accounting for amount recoverable of 1,147.70Lac as on 31st March, 2016 towards financial assistance for sugar season

2015-16 by way of reimbursement of part of sugar cane price by State Govt. whereas the amount to be reimbursed, if any,is yet to be notified by the State Govt. for this purpose. Had the above financial assistance not accounted for in the booksof account, there would be net increase in expenses by 964.10Lac (net of increase in closing stock by 183.60Lac) asstated in Note 27(24} and

(9) Debit advice of 2.63 Lac of Sugar Unit toward certain expenses has not been accounted for in the books of accounts ofother units of the Company as stated in Note 43 resulting in under-statement of expenses / loss and over-statement of debitbalance of inter-unit balances by the same amount. Further, no provision has been made for electricity expenses also bycertain units amounting to 7.43 Lac as stated in Note 43 resulting in under-statement of expenses / loss and liabilities.

(C) Accounting treatment given to the manufacture and sale of Vodka and whisky by the Distillery unit (“Unit”) of Company in its booksof account is not proper even though the same has no impact on the net profit of the Unit for the year in view of the reasons stated inNote 27(16).

(D) Confirmation of Debit / Credit balances of debtors / creditors and of certain banks were not obtained. Impact on the standalonefinancial statements is not ascertainable. {Note 27(27)}.

(E) Our audit observations under sections 143(1) & 186 of The Companies Act, 2013 are as under:The Company had given unsecured interest free security deposits amounting to: (i) 1,100Lac during May 2011 against temporarypossession of 59 houses to Ashoka Mercantile Limited (“AML”), a related party, and (ii) 147.63Lac during the earlier years againsttemporary possession of 9 houses to Modipon Limited (“MPL”), also a related party. The outstanding amounts as on 31st March, 2016in the books of account of the Company are 798.30Lac (43 houses) (Previous year 867.80Lac & 47 houses) and 147.63Lac


(9 houses) (Previous year 147.63Lac for 9 houses) in respect of AML and MPL respectively. These houses are not occupied by anyof the employees of the Company till date. In our opinion, the above unsecured loans given by the Company {i.e. a sick Company asmentioned in Note 27(17)} to two related parties amounting to 945.93Lac (As on 31st March, 2015 1,015.43Lac) have been shownas deposits by the Company since date of payment on which interest @ 8.5% has been charged w.e.f. 1st April, 2014 from AML sinceit expressed its inability to refund the amount and no interest has been charged from MPL since inception. {Refer Note 27(38)(4)(B)and Foot-note 7 of Note 27(38)}.

(F) As stated by the management in Note 27(36), the Electrode Unit of the Company has incurred expenditure for advertisement ofproducts amounting to 115.64Lac (previous year 153.12Lac) by way of advertisement in newspapers through agents. In theabsence of sufficient appropriate audit evidence regarding prevailing market rates / charges paid to newspaper publishers by agents,we are unable to verify and express our opinion on these rates/charges paid by the Company to agents. Observations & suggestionsof Internal Auditors in this regard need to be also looked into & implemented.

(G) (i) As per the bottling contract mentioned in Note 27(16), the Distillery Unit (“the Unit”) of the Company has agreed for blending,manufacturing and bottling of the products for MI Spirit India Private Limited (MI Spirit) and MI Spirit will, either itself or through“Modi Illva India Private Limited (Modi Illva), a Company in which a director of the Company is also a director, market the productsand in case MI Spirit requests the bottler to directly undertake any promotion of the products, then expenses incurred by the bottlerin connection with the promotion of the products shall be reimbursed by MI Spirit, against the debit notes raised by the bottler.

(ii) We note that the Unit has accounted for sale promotion expenses {cost of gift items 805.58Lac and trade scheme amount`183.40Lac which is claimed as reimbursement from the Unit by sale promotion agents (SPAs) on secondary sales i.e. on salemade by the State corporations to their customers} {Previous year: Cost of gifts 250.99Lac & trade scheme amount Nil}. Inview of the facts stated in sub-paragraph (i) above, in our opinion, the accounting for these expenses in the books of account ofthe Unit is not proper since the same is to be debited to MI Spirit and also in view of the opinion given by the Expert advisoryCommittee of the Institute of Chartered accountants of India on the similar arrangement as stated in Note 27(16).Further, we could not verify / audit these expenses as the sale promotion policy, records / supporting documents relating to receiptand / or distribution of these gifts and proof / confirmation of customers for having received gifts and trade scheme amounts (fromSPAs) are not available with the Unit.

(iii) However, the accounting of these sale promotion expenses in the books of account of the Unit had no impact on the net profitof the Unit as the Unit is entitled to only fixed manufacturing margin of 281.90Lac for the year ended March 31, 2016 as per theagreement stated above which is actually represented by way of net profit earned from manufacture and sale of Vodka and whiskyby the Unit as stated in note 27(16) i.e. instead of sale promotion expenses, the trade mark license & marketing fee expenseswould have been accounted for in the books of account of the Unit resulting in no impact on net profit earned by the Unit.

(H) We further report that, without considering items mentioned at 4 (B) (i) to (v), 4(D) to 4(F) above, the possible effects of which couldnot be determined, had the observations made by us in paragraphs 4(B) (vi), and 4(C & G) above been considered, the loss for theyear would have been 50,512.77Lac (as against the reported loss of 884.95Lac), negative balance of Reserves and Surplus inNote 2 would have been 69,315.46Lac (as against the reported negative figure of 19,687.64Lac), current assets would have been` 13,215.70Lac (as against the reported figure of 18,017.97Lac), debit balance of inter-unit balances in Note 17 would have been` 1,026.73Lac (as against the reported figure of 1,029.36Lac), current liabilities would have been 83,450.73Lac (as against thereported figure of ` 35,874.19Lac), long-term borrowings would have been 2,971.75Lac (as against the reported figure of` 5,722.74Lac), gross revenue (including other income) would have been 27,833.70Lac (as against the reported figure of` 36,534.30Lac), trade mark license and marketing fees expense would have been 1,137.35Lac (as against the reported figureof 148.37Lac), discount and sales promotion expense would have been 86.32Lac (as against the reported figure of 1,075.30Lac)and total expenses (including excise-duty) for the year would have been 78,628.37Lac (as against the reported figure of` 37,419.25Lac).

(I) In view of the significance of our audit observations in paragraphs 1 and 4(A) to (H) above and especially in view of the fact that thestate of affairs would change substantially in case the Statement of Profit and Loss for the financial year 1992-93 and Balance Sheetas on 31st March, 2016 of Steel Unit were included, which we are unable to quantify, we are of the opinion that the said standalonefinancial statements DO NOT give a true and fair view: (a) In the case of the Balance Sheet, of the state of affairs of the Company asat 31st March, 2016, (b) in the case of Statement of Profit and Loss, of the loss for the year ended 31st March, 2016 and (c) in the caseof Cash Flow Statement, of the cash flows for the year ended on that date.

5. Emphasis of Matter(i) The Company has not deposited unpaid unclaimed public deposits and interest accrued thereon amounting to 9.72Lac with Investor

Education & Protection Fund. Further, unpaid amount of such unclaimed debentures, if any, as on 31.03.2016 has not been identified.{Note 27(30)}.

(ii) Cars costing 82.62Lac (Previous Year 96.62Lac) purchased in the name of employees / others are yet to be transferred to the nameof the Company. However, these persons have given disclaimer in favor of the Company. (Refer Foot-Note D of Note 10).

(iii) We invite attention to Note 27(33) regarding entering into agreements to sell 215 (previous year 215) residential quarters, Note27(34)(a) regarding entering into lease, including perpetual lease, agreements for 27,954.86 Sq. Meters of factory land & buildingsand Note 27(34)(b) regarding entering into perpetual lease agreement for 1584 Sq. Mtrs. of factory land for which the approvals of


financial institutions, to whom these quarters and factory land & buildings are mortgaged, were not obtained.(iv) We invite attention to Foot-notes 5, 9 & 10 of Note 27(38) regarding post-facto approval of shareholders to be obtained by the Company

in the ensuing annual general meeting for leasing agreements for premises and machinery entered into with related parties whereasall these agreements requires prior approval of shareholders.

(v) We invite attention to Note 27(19)(a) regarding reasons for not making provision for disputed Sales-tax demand of 2,455.78Lacexcluding interest (Previous year 2,455.78Lac) of closed Vanaspati Unit.

(vi) We invite attention to Note 27(35)(a), (c), (e) and (f) regarding demands of recovery charges of 2,659.71Lac (Previous Year 2,659.71Lac) on account of non-payment of cane price / commission / interest as the same are disputed by the Company / obtainedstay order as stated therein. We also invite attention to Note 27(35)(f) regarding issue of notification by the State Government for waiveroff interest for sugar season 2013-14 amounting to 2,138.58Lac which is still awaited.

(vii) We invite attention to Note 27(31) regarding provision made for diminution in market value of one of its long-term investment in a groupCompany of 148.80Lac for the year ended March 31, 2016 in view of the reasons stated in the Note and is disclosed in the Statementof Profit and Loss as an ‘Exceptional Item’.Our opinion is not qualified in respect of the matters mentioned in paragraph 5 above.

6. Report on Other Legal and Regulatory Requirements(i) As required by the Companies (Auditors’ Report) Order, 2016 issued by the Central Government of India in terms of Sub-Section (11)

of Section 143 of the Companies Act, 2013, and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanations given to us,we enclose in Annexure 1 a statement on thematters specified in paragraphs 3 and 4 of the said order except for certain matters relating to Steel Unit of the Company in view ofnon-availability of information / details on account of non-incorporation of: (i) financial statements of the Steel Unit for the year 1992-93 and (ii) balance sheets for the years 1993-94 to 2015-16 as stated in note 27(4)(c) . (See Paragraph 4(A) above).

(ii) As required by section 143(3) of the Act, we report that:a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary

for the purposes of our audit except in respect of Steel Unit as mentioned above and the matters referred in paragraphs 4(F) &(G) above. In case of Steel Unit, no details, information and explanations are available for the opening and closing assets andliabilities as on 1st April, 2015 and 31st March, 2016 respectively and for contingent liabilities and additional information etc. ason 1st April, 2015 and 31st March, 2016 in view of non-incorporation of: (i) the financial statements of Steel Unit for 1992-93 and(ii) Balance Sheets for the years 1993-94 to 2015-16 as stated in note 27(4)(c).{(See paragraphs 1 and 4(A) above};

b. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from ourexamination of those books except: (i) in respect of Steel Unit, where audited balances of opening and closing assets, liabilities,contingent liabilities and additional information etc. as on 1st April, 2015 and 31st March, 2016 respectively were not availableand consequently not incorporated in the books of account and (ii) for the effects of other matters described in the ‘Basis forAdverse Opinion’ paragraph 4 above.

c. The Balance Sheet referred to in this report is in agreement with the books of accounts of all units and accounting centres takentogether, other than Steel Unit, as on 31st March, 2016 as consolidated with the Balance Sheet of Steel Unit as stated in Note27(4) (c) & (d) of the standalone financial statements and hence is not in agreement with the books of account of the Companyas a whole. Further, the Cash Flow Statement for the year ended on that date, which does not include adjustments for Cash Flowsfrom investing / financing activities and changes in assets and liabilities in view of non-availability of audited Balance Sheet ofSteel Unit as on 31st March, 2015 & 31st March, 2016, is also not in agreement with the books of account. (Refer foot-note 2 ofcash flow statement). Except for non-incorporation of Statement of profit and loss of Steel Unit for the year 1992-93, the Statementof Profit and Loss is in agreement with the books of accounts.

d. Subject to our observations in paragraph 4(B) above, in our opinion, the Statement of Profit and Loss and Balance Sheet, so faras they relate to the remaining units i.e. other than Steel Unit, comply with the requirements of the Accounting Standards referredto in Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. However, in view of non-availability andconsequently non-incorporation of audited (i) opening and closing balances as on 1st April, 2015 and 31st March, 2016 respectivelyof assets, liabilities, contingent liabilities and other additional information etc. and (ii) Statement of Profit and Loss for 1992-93of Steel Unit {Refer Paragraph 4(A) above}, the aforesaid standalone financial statements do not comply with the requirementsof Accounting Standards referred to in Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 for theCompany as a whole.

e. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financialstatements, so far as they relate to the remaining Units i.e. other than Steel Unit, give the information required by the Act in themanner so required except for non-disclosure of information relating to micro, small and medium enterprises {Refer note 27(14)}.In the case of Steel Unit, in view of non-incorporation of Balance Sheets of Steel unit as on 31st March, 2016 and 31st March, 2015on account of non-availability and consequently non-incorporation of audited opening balances as on 1st April, 2015 and 1st April,2014 respectively of assets, liabilities, contingent liabilities and other additional information etc., the standalone financialstatements do not give the information required by the Companies Act, 2013 in the manner so required for the Company as awhole. {Refer Note 27(4)}.


f. The matters described in the Basis for Adverse Opinion paragraph above, in our opinion, can have an adverse effect on thefunctioning of the Company.

g. On the basis of the written representations received from the directors as on 31st March, 2016, taken on record by the Board ofDirectors, none of the directors is disqualified, as on 31st March, 2016, from being appointed as a director in terms of Section164(2) of the Act.Further, the Company was legally advised earlier that provisions of Section 274(1)(g) of the Companies Act, 1956, whichcorresponds to section 164(2) of the Companies Act, 2013, are prospective in nature and the defaults made by it prior to 13thDecember, 2000, for non-payment of deposits/interest on deposits on due dates and non-redemption of debentures on due dates,are not covered by Section 274(1)(g) of the Companies Act, 1956, on which we have relied upon.

h. The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the ‘Basis forAdverse Opinion’ paragraph above.

i. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operatingeffectiveness of such controls, refer to Annexure 2.

j. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:i. The Company has various pending litigations which could impact its financial position and the same has been suitably

disclosed under contingent liability / notes to accounts under Note 27.ii. The Company did not have any long-term contracts including derivative contracts for which there were any material

foreseeable losses.iii. An amount of 9.72Lac being unclaimed deposits and interest accrued till date of maturity of deposit are yet to be transferred

to the Investor Education and Protection Fund by the Company. Amount of unclaimed debentures and interest accrued tillmaturity is not yet quantified by the management.

for P.R. MEHRA & CO.,CHARTERED ACCOUNTANTS

( Regn. No. 000051N )

Ramesh Chand GoyalPlace: Delhi PARTNERDated: 22nd August, 2016 Membership No.012628

Annexure 1 to the Independent Auditors’ Report

Annexure referred to in our report of even date to the members of Modi Industries Limited on the financial statements for the year ended March31, 2016

As required by the Companies (Auditors’ Report) Order, 2016 and on the basis of such checks as were considered appropriate and accordingto the information and explanations given to us, we further report as under:

(A) The following matters reported at paragraphs {(B) (iii to v), (vii) a(ii) & b, viii, x and xiii} do not cover matters relating to closed Steel Unit ofthe Company since: (i) the financial statements of the Steel Unit for the year 1992-93 have not been prepared and incorporated andconsequently the audit of which has not been carried out and (ii) the Balance Sheets of Steel Unit for 1993-94 to 2015-16 have not beenincorporated in the respective financial years due to non-availability of audited opening balances as on 1st April,1993. {Refer Note 27(4)and paragraphs 1 & 4(A) of our audit report on standalone financial statements}.

(B) Subject to our comments in paragraph (A) above and paragraphs 4(F & G) in our audit report of even date, we further report as under:

(i) (a) Company’s Sugar Unit since inception and other Units since November, 1968, have generally maintained proper recordsincluding quantitative details and situation of their major fixed assets except for : (i) locations in case of furniture and fixture and(ii) recording of additions / deletions of certain previous years. Fixed asset register of Steel Unit has not been produced to us.

(b) No physical verification of assets has been conducted by the Management since 1989 in Sugar, Steel and Distillery Units andof Corporate Office and since 2001-02 in respect of other units.

(c) We are informed that the original title deeds of immovable properties of the Company are mortgaged with the lenders by depositof these title deeds. Confirmation of lenders stating that the title deeds are held in the name of the Company as on March 31, 2016has been sought by the Company which is yet to be received. Accordingly we are unable to comment on the same.

(ii) The inventory of the Company has been physically verified during the year by the management except for inventory of closed SteelUnit and inventory of stores and spare-parts of all the units. No material discrepancies were noticed. In respect of stocks lying withC&F / consignee agents, these have substantially been confirmed by these parties.

(iii) The Company has not given any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered


in the register maintained under section 189 of the Companies Act, 2013 except for unsecured interest free loan given to a Company,presently a sick Company, of 4.04Lac (net) during the previous financial years. Entire amount is overdue for more than 90 days andthe Company is yet to take steps for its recovery.

Further, as stated in paragraph 4(E) of our audit report, the Company had given unsecured security deposits to related partiesamounting to: (i) 1,100Lac during May 2011 against temporary possession of 59 houses to Ashoka Mercantile Limited (“AML”), arelated party, and (ii) 147.63Lac interest free during the earlier years against temporary possession of 9 houses to Modipon Limited(“MPL”), also a related party. The outstanding amounts as on 31st March, 2016 in the books of account of the Company are 798.30Lac(43 houses) and 147.63Lac (9 houses) in respect of AML and MPL respectively. In our opinion, the above unsecured loans givenby the Company {i.e. a sick Company as mentioned in Note 27(17)} to two related parties amounting to 945.93Lac (As on March31, 2015 1,015.43Lac) are overdue for more than 90 days as on date and reasonable steps for recovery of the principal amountsare yet to be initiated by the Company. {Refer Note 27(38)(4)(B) and Foot-note 7 of Note 27(38)}.

(iv) The Company has not granted any loans or given any guarantee and security to parties covered under Section 185 and 186 of theCompanies Act, 2013 during the current financial year.

(v) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issuedby the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act and theRules framed there under except that the matured/claimed deposits of earlier years of 54.47Lac have not been paid before 31st

March, 2016 and unclaimed deposits and interest due amounting to 9.72Lac outstanding as on 31st March, 2016 have not beendeposited with the Investor Education and Protection Fund. Company Law Board vide its order dated April 21, 2016 has dismissedthe petition filed by the Company seeking extension of time for repayment of principal amount as per the orders which may be passedby BIFR / AAIFR and payment of interest up to date of maturity. The Company has filed a petition against the above order in the Hon’bleAllahabad High Court on July 23, 2016. {Refer paragraph 5 (i) of our audit report and Note 27(30) (b)}.

(vi) The Central Government has prescribed maintenance of cost records by the Company in respect of manufacture of Sugar, Electrodeand Distillery Units and such accounts and records have been made and maintained.

(vii) (a) (i) During the current financial year, the Company was regular in depositing with the appropriate authorities un-disputedstatutory dues except in following cases:

Sugar, Steel and Distillery units of the Company were generally not regular in deposit of Provident Fund (PF) dues throughoutthe year and there were minor delay in deposit of PF dues in Gas unit and M. D. Office. There were also delays in almost allthe months in deposit of FPS dues by the Company.

In respect of excise-duty dues, there have been delays in deposit of dues of 3 months in Sugar Unit and there were few daysdelay in most of the months in deposit of dues in Electrode and Paint units. In respect of tax deducted at source dues, thesehave been deposited in time except for few delays in case of Sugar, Steel, Paint, Gas & Electrode units. In respect of taxcollection at source, there have been few delays in three months in Distillery Unit. In respect of sales-tax/ vat, these havebeen regularly deposited though there has been a slight delay in few cases in certain depots of Gas, Paint & Electrode Units.In respect of service-tax, there have been general delays in deposit till September 2015 in Corporate Office, delays in depositof 2 months dues by Steel Unit, delays in deposit of dues of few months in Gas, Electrode, Sugar and Distillery Units. In respectof entry-tax, there have been minor delays in deposit of dues of certain months by one depot each of Paint and ElectrodeUnits.

(ii) On the basis of such checks as were considered appropriate and according to the information and explanations given to us,Statement of Arrears of unpaid undisputed Statutory Dues (excluding of Steel Unit) outstanding for more than six monthsas on March 31,2016 as per books of account are as under :

Nature of dues ( ` in Lac)

U.P. Trade Tax/CST 1,110.90

FPS 0.06

Service-tax 0.05

Commission on Cane purchases 0.10

Interest on Provident Fund/FPS 101.18

Tax deducted at source/Tax collection source(Including interest on dues) 15.20

Excise-duty including interest 4.28

House-tax 54.89


(b) According to the records of the Company and based on information and explanations furnished to us, the following custom duty,Excise duty, Income-tax and value added tax / sales-tax dues (excluding unascertainable amounts and of Steel Unit for the period1992-93 to 2015-16) were not deposited on account of disputes pending at various forums:

Name of Nature of the dues Amount of Amount deposited Period to which the Forum wherestatute dues under protest amount relates disputes is pending

(` in Lac) (` in Lac)

U.P.VAT VAT Tax, Penalty, Interest, 2584.59 5.98 1987-88, 1990-91 & Allahabad High Court.Act Exemption to New Units. 1991-92, May 91 to

March 96VAT Tax and Penalty @ 345.78 123.04 1982-83 to 1986-87, Commercial Tax

1988-89, 1992-93, 2000-01 Tribunal, Ghaziabadto 2001-02, 2007-08

VAT Tax and Penalty 455.26 254.28 1986-87, 1994-95 to Joint Commissioner (A),99-2000 Ghaziabad.

VAT Tax 0.12 - 2005-06 Deputy Commissioner.(Assessment),Modinagar.

Penalty under VAT Tax 4.37. 0.45 2008-09 Trade Tax Tribunal,Ghaziabad.

Central Central Sales Tax, 162.09 16.10 1985-86, 1988-89, Commercial TaxSales 1992-93, 1999-2000 Tribunal, Ghaziabad.Tax Act & 2000-01

Central Sales Tax 51.04 20.30 1994-95 to 1996-97 Joint CommissionerSales Tax,Ghaziabad

Central Sales Tax 1.01 - 2005-06 Deputy Commissioner(A),Modinagar

State Sales State Tax 10.56 0.20 1992-93 AdditionalTax Act Commissioner, Sales

Tax, Delhi.Sales Tax 5.97 2.00 1985-86, 1997-98, State Tax

2002-03, 2004-05 & 2005-06Sales Tax 0.82 0.05 2014-15 State TaxPenalty (HGST) 0.30 - 1991-92 Tribunal Sales Tax,

Chandigarh.State Tax 15.79 1.79 1989-90 to 1993-94, Deputy Commissioner

1998-99 and 2006-07 (A), StatesCentral Central Sales Tax 1.92 0.29 1988-89 to 1992-93. Appellate Authority/DCSales Tax (Appeals), DelhiAct (States)Central Custom Duty *43.91 - 1.3.2001 to 25.4.2001 Civil CourtExcise & GhaziabadCustom Act

Excise Duty 0.70 - 2002-03 and 2003-04 Supreme Court of IndiaExcise Duty 167.43 50.00 1985-86 Delhi High Court

0.49 0.25 2004-05 Allahabad High Court0.74 0.20 1996-97 Commissioner of

Central Excise,Ghaziabad

**169.17 - February 1981 to CESTATFebruary, 1987, 2002-03to 2010-11

5.00 - Information not available. Information not available.6.34 6.34 2009 onwards Supreme Court of India

Income Tax Penalty 209.59 - 2007-08 and 2008-09 CIT (appeal) New Delhi

@ Provided for 82.60 Lac in the Accounts.*Provided for in the Accounts.**Provided for 32.20 Lac in the Accounts.


(viii) The Company has defaulted in repayment of dues to Financial Institutions, banks and debenture-holders of the Company. The detailsof defaults and period of defaults are as under:

( ` in Lac)Particulars Loan Interest Total Period of default of principal amount

Amount including dues*unprovided

interestLoans from Financial 23.13 22,288.57 22,711.70 Loan amounts due since 1991-92.InstitutionsLoan from banks 40.55 4,141.98 4,182.53 Entire amount due. Refer note 27(18) (c).(Allahabad Bank)Debentures 535.21 19,428.30 19,963.51 ` 53 Lac due since August, 1990, 30 Lac due

since December, 1994 & 452.21 Lacdue since February,1995 to February, 1997.

Total 998.89 45,858.85 46,857.74

# Dues of IFCI, IDBI, ICICI, LIC, GIC and its subsidiaries. Refer Foot-note 1 of Note 8.

* excluding amounts relating to Steel Unit but including dues of IDBI/IFCI relating to other units. Refer Note no. 27(5) regarding assignment of debtsby bank and financial institutions and paragraph (A) above.

(ix) During the current financial year, no money was raised by way of public offer or further public offer (including debt instruments) andterm loans.

(x) According to the information and explanations given to us and as represented by the management and based on our examinationof the books and records of the Company and in accordance with generally accepted auditing practices in India, we have beeninformed that no case of fraud committed by the Company or any fraud on the Company by its officers or employees has been noticedor reported during the year.

(xi) During the current financial year, the managerial remuneration has been paid or provided in accordance with the requisite approvalof the Central Government as mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) The provisions of clause 3 (xii) of the Order regarding “Nidhi Company” are not applicable to the Company.

(xiii) Except for certain transactions reported in paragraph 5(iv) of our audit report on standalone financial statements wherein approvalof shareholders is being sought post-facto in the ensuing annual general meeting of the Company, the Company has complied withthe provisions of Sections 177 and 188 of the Companies Act, 2013 w.r.t. transactions with the related parties, where applicable.Details of the transactions with the related parties have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

(xiv) The Company has not made any preferential allotment or private allotment of shares or fully or partly convertible debentures duringthe current financial year under review. Accordingly, provisions of clause 3 (xiv) of the Order are not applicable to the Company.

(xv) The Company has not entered into any non-cash transactions with the directors or persons connected with him.


( Regn. No. 000051N )

Ramesh Chand GoyalPlace : Delhi PARTNERDated : 22nd August, 2016 Membership No.012628


Annexure 2 referred to in paragraph 6(i) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even dateon the standalone financial statements of Modi Industries limited for the year ended March 31, 2016

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We were engaged to audit the internal financial controls over financial reporting of Modi Industries limited (“the Company”) as of March 31, 2016in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

1. Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control overfinancial reporting criteria established by the Company and the components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuringthe orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the preventionand detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliablefinancial information, as required under the Companies Act, 2013.

2. Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our auditconducted in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”)and the Standards on Auditing, to the extent applicable to an audit of internal financial controls, both issued by the ICAI.

Because of the matter described in Disclaimer of Opinion paragraph below, we were not able to obtain sufficient appropriate audit evidenceto provide a basis for an audit opinion on internal financial controls system over financial reporting of the Company.

3. Meaning of Internal Financial Controls over Financial Reporting

A Company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally acceptedaccounting principles. A Company’s internal financial control over financial reporting includes those policies and procedures that (1) pertainto the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of theCompany; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statementsin accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made onlyin accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effecton the financial statements.

4. Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or impropermanagement override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of anyevaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies orprocedures may deteriorate.

5. Disclaimer of opinion

According to the information and explanations given to us, the Company has neither established nor evaluated its internal financial controlsover financial reporting on criteria based on or considering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Mainly becauseof this reason and also our comments in paragraph 4 of statutory audit report of even date on standalone financial statements of theCompany, we are unable to obtain sufficient appropriate audit evidence to provide a basis for our opinion whether the Company hadadequate internal financial controls over financial reporting and whether such internal financial controls were operating effectively as atMarch 31, 2016.

However, according to the information and explanations given to us and based on our audit of the financial statements, the followingmaterial weaknesses have been noticed as at March 31, 2016 for which remedial action by the management is yet to be initiated:

a) No physical verification of fixed assets has been conducted by the Management since 1989 in Sugar, Steel and Distillery Units andof Corporate Office and since 2001-02 in respect of other units. Fixed asset register needs to be updated for: (i) locations in case offurniture and fixture and (ii) recording of additions / deletions of certain previous years.

b) The inventory of stores and spare-parts of all units during the year and inventory of the closed Steel Unit since the year 1992-93 hasnot been physically verified by the management.


c) The books of accounts, vouchers and other documents of the Steel Unit for 1992-93 were not made available to us and consequentlyaudit could not be conducted in respect of the same. {Note 27(4)}. Therefore, as stated in Paragraph 1 above of audit report of evendate, the attached Balance Sheet, Statement of Profit and Loss and Cash Flow Statement does not include: (a) the financial data /impact of working results and of declaration of closure / post-closure transactions, which includes realization of depot sales / duesfrom debtors, provision / payment of final dues of employees and payments to various parties and manufacturing / personnel /administration expenses etc., of the Steel Unit of the Company for the year 1992-93 during which the Unit had operated for ten monthsthe exclusion of which, in our opinion, substantially impairs the presentation of above standalone financial statements of the Companyand (b) impact on assets, liabilities and cash flows on account of non-incorporation of transactions / balance sheets for the years 1993-94 to 2015-16 as stated in Note 27(4)(c).

d) Accounting treatment given to the manufacture and sale of Vodka and whisky by the Distillery unit (“Unit”) of Company in its booksof account is not in accordance with the opinion given by the Expert Advisory Committee of the Institute of Chartered Accountantsof India even though the same has no impact on the net profit of the Unit for the year in view of the reasons stated in Note 27(16). Inour opinion, the accounting treatment suggested by the Expert Advisory Committee of the Institute of Chartered Accountants of Indiafor accounting only manufacturing margin in the books of account of the Unit should be followed and accordingly, all expenses,revenue, assets and liabilities related to the manufacture and sale of Vodka and whisky by the Unit should not be recorded in the booksof account of the Unit.

e) As stated by the management in Note 27(36), the Electrode Unit of the Company has incurred expenditure for advertisement of productsamounting to 115.64 Lac (previous year 153.12Lac) by way of advertisement in newspapers through agents. In the absence of sufficientappropriate audit evidence regarding prevailing market rates / charges paid to newspaper publishers by agents, we are unable to verifyand express our opinion on these rates/charges paid by the Company to agents. Observations & suggestions of Internal Auditors in thisregard need to be also looked into & implemented.

f) (i) As stated in paragraph 4(G)(i) of our main report, expenses incurred by the Company i.e. bottler in connection with the promotion ofthe products shall be reimbursed by MI Spirit, against the debit notes raised by the bottler. We note that the Unit has accounted forsale promotion expenses {cost of gift items 805.58Lac and trade scheme amount 183.40Lac which is claimed as reimbursementfrom the Unit by sale promotion agents (SPAs) on secondary sales i.e. on sale made by the State corporations to their customers. Inour opinion, the accounting for these expenses in the books of account of the Unit is not proper since the same is to be debited to MISpirit as per the agreement and also in view of the opinion given by the Expert advisory Committee of the Institute of Charteredaccountants of India on the similar arrangement as stated in paragraph (d) above, these expenses should not be accounted for inthe books of account of the Unit.

(ii) Further, we also could not verify / audit these expenses as the sale promotion policy, records / supporting documents relating to receiptand / or distribution of these gifts and proof / confirmation of customers for having received gifts and trade scheme amounts (from SPAs)are not available with the Unit.

g) Confirmation of Debit / Credit balances of debtors / creditors are not being obtained by the Company since long. Impact on the standalonefinancial statements is not ascertainable.

We have considered the disclaimer above in determining the nature, timing and extent of audit tests applied in our audit of the standalonefinancial statements of the Company and the disclaimer has affected our opinion on the financial statements of the Company and we haveissued an adverse opinion on the financial statements.


( Regn. No. 000051N )



Balance Sheet as at 31st March, 2016(` in Lac)

Particulars Note As at As atno. 31.03.2016 31.03.2015

I EQUITY AND LIABILITIES :(1) Shareholders’ funds:

(a) Share Capital 1 371.66 371.42(b) Reserves & Surplus 2 (19,687.64) (18,802.69)

(19,315.98) (18,431.27)(2) Non-current liabilities :

(a) Long term borrowings 3 5,722.74 5,279.61(b) Other long term liabilities 4 1,627.05 1,574.18(c) Long term provisions 5 965.37 1,023.91

8,315.16 7,877.70(3) Current liabilities :

(a) Short term borrowings 6 1,828.97 1,880.53(b) Trade payables 7 21,122.01 23,654.35(c) Other current liabilities 8 12,282.06 12,878.42(d) Short term provisions 9 641.15 679.37

35,874.19 39,092.67TOTAL 24,873.37 28,539.10

II ASSETS(1) Non-current assets

(a) Fixed assets :i) Tangible assets 10 5,897.95 6,165.96ii) Intangible assets 11 1.58 5.20iii) Capital work-in-progress 41.37 38.06

(b) Non-current investments 12 655.48 804.28(c) Long term loans and advances 13 252.12 225.78(d) Other non-current assets (Fixed Tangible) 10 (Foot note G) 6.90 -

6,855.40 7,239.28(2) Current assets

(a) Inventories 14 6,018.66 7,441.79(b) Trade receivables 15 5,635.77 6,010.63(c) Cash and bank balances:-

(i) Cash and cash equivalents 16(i) 600.68 1,345.54(ii) Other bank balances 16(ii) 1,280.71 1,223.35

(d) Short term loans and advances 17 2,779.07 2,821.89(e) Other current assets 18 1,703.08 2,456.62

18,017.97 21,299.82

TOTAL 24,873.37 28,539.10Accounting policies and other notes to financial statements 26 & 27

As per our report of even date attached. For Modi Industries LimitedFor P. R. Mehra & Co.,Chartered Accountants Mahendra Kumar Modi Rakesh Kumar Modi Manish Kumar Modi Abhishek Modi(Regn.No.000051N) (DIN 00014594) (DIN 00022386) (DIN 00030036) (DIN 00002798)


Ramesh Chand GoyalPartner N.P. Bansal V P GuptaMembership No. 012628 (PAN AAOPB7869G) (FCS-6380)Place : Delhi Chief Financial Officer Company SecretaryDate : 22nd August, 2016.





Statement of Profit and Loss for the year ended 31st March, 2016( ` in Lac)

Particulars Note For the year ended For the year endedno. 31.03.2016 31.03.2015

I Revenue from operations 19 35,735.22 36,003.85Less:- Excise duty 4,862.59 2,224.01

30,872.63 33,779.84II Other income 20 549.90 640.33

I I I Total Revenue ( I + II ) 31,422.53 34,420.17IV Expenses:-

Cost of materials consumed 27(44)(ii) 19,119.47 23,666.34Purchases of stock-in-trade 27(44)(iv) 76.35 66.09Changes in inventories of finished goods, 21 1,225.25 2,075.19

work-in-progress and stock-in-tradeEmployee benefits expense 22 3,348.35 3,337.19Finance costs 23 644.04 1,228.39Depreciation and amortization expense 10 & 11 334.51 435.92Other expenses 24 7,659.89 6,116.55

Total expenses 32,407.86 36,925.67

V Loss before exceptional and 985.33 2,505.50extra-ordinary items and tax ( IV-III )

VI Exceptional items:-(a) Refund of Commission on 35 (i) (249.18) -

Sugar Cane Purchase for 2012-13(b) Provision for Dimunition in the value of 31 148.80 -

Long Term InvestmentVII Loss before extra-ordinary items 884.95 2,505.50

and tax ( V+VI )VIII Extra-ordinary items - -IX Loss before tax ( VII+VIII ) 884.95 2,505.50X Tax expenses 27(32) - -XI Loss for the period 884.95 2,505.50XII Loss from continuing operations 681.25 2,373.92XIII Loss from discontinuing operations 27(4)(e) 203.70 131.58XIV Tax expense of discontinuing operations - -XV Loss from discontinuing operations 203.70 131.58

(after Tax) (XIII+XIV)XVI Loss for the period (XII+XV) 884.95 2,505.50XVII Basic /Diluted Earnings per equity share of

` 10 each ( in Rupees) 25 (26.93) (75.90)

Accounting policies and other notes to financial statements 26 & 27


Cash Flow Statement for the year ended 31st March, 2016.(` in Lac)

Particulars 2015-16 2014-15

A. CASH FLOW FROM OPERATING ACTIVITES :

Profit/(Loss) before Tax (884.95) (2,505.50)

Less: Adjustment for :

i) Interest Income 173.16 173.08

ii) Profit on Sale of Fixed Assets 5.01 10.12

iii) Profit on assets held for dosposal 4.13 -

iv) Excess Provision written back 24.11 16.85

v) Unclaimed credit balances W/back 38.42 22.37

vi) Amount written back 17.89 3.21

vii) Depreciation written back 1.96 4.17

viii) Dividend Income 52.50 42.00

317.18 271.80

Add: Adjustments for : (1,202.13) (2,777.30)

i) Depreciation 334.51 435.92

ii) Assets written off/Loss on sale of Assets/Stores 10.13 4.29

iii) Interest Expenses 644.04 1,228.39

iv) Provision for Doubtful Debts & Advances 199.37 119.01

v) Amounts/Claims/Bad Debts written off 8.64 9.46

vi) Provision for obsoleteRaw Material, spare-parts & stores 26.15 5.36

vii) Provision for Dimunition in the value of Long Term Investment 148.80 -

1,371.64 1,802.43

Operating Profit/(Loss) before Working Capital Changes 169.51 (974.87)

Adjustments for :

Trade Receivables 213.34 (1,049.47)

Inventories 1,396.76 1,848.34

Trade Payable (2,645.55) 5,294.99

Loans/Advances and other assets 799.23 (1,915.91)

Other bank balances (57.36) (96.50)

Cash Generated from Operations (124.07) 3,106.58

Interest Paid (Foot-note 1 below) (65.93) (1,338.98)

Income tax paid/ refund (Net) (25.82) (37.99)

Net Cash from Operating Activities (A) (215.82) 1,729.61

(B) CASH FLOW FROM INVESTING ACTIVITIES :

Purchase of Fixed Assets (124.91) (71.87)

Sale of Fixed Assets 26.77 13.16

Interest Received 190.94 102.62

Dividend Received 52.50 42.00

Net Cash Flow from Investing Activities (B) 145.30 85.91


(C) CASH FLOW FROM FINANCING ACTIVITIES :

Secured term borrowings from bank (2.17) (3.93)

Secured borrowings from banks 67.81 45.89

Unsecured Fixed Deposits paid (0.17) (0.62)

Unsecured borrowings from others (net) (80.03) (153.90)

Interest paid on borrowings (619.84) (715.85)

Unsecured Debentures Paid (2.11) -

Net Cash from Financing Activities (C) (636.51) (828.41)

*Inter Unit Balances (Net) (D) (Foot-note 2 below) (37.83) (37.99)

Net Increase/(decrease) in cash and Cash Equivalents (A+B+C+D) (744.86) 949.12

Opening Cash and Cash Equivalents 1,345.54 396.42

Closing Cash and Cash Equivalents 600.68 1,345.54

( ` in Lac)





Foot Notes :1. Interest credited to accounts of suppliers, C & F agents and dealers etc. is treated as paid.2. In view of non availability of audited balance sheet as on 31.03.2016 and 31.03.2015 of Steel Unit, cash flow from investing/financing

activities and changes in current assets & liabilities of steel unit are not included in the Cash Flow Statement except for inclusion ofnet outflow of ` 37.83 Lac on account of net increase in inter unit balances appearing in Note 17 i.e. Short term loans & advances{Refer Note 27(4)}.

3. Figures in brackets represents outflows.4. Previous Year figures have been rearranged/regrouped wherever considered necessary.


Notes forming part of the financial statements for the year ended 31st March, 2016

Note no. 1 : SHARE CAPITALParticulars As at As at

31.03.2016 31.03.2015

Authorised:-40,00,000 Equity shares of ` 10/- each 400.00 400.00

1,00,000 15% Redeemable cumulative 100.00 100.00Preference shares of ` 100/- each

500.00 500.00Issued, subscribed and paid up:-3,309,214 Equity shares of ` 10/- each fully paid-up 330.92 330.92

Less: Calls unpaid (Directors and Officers) - -Less: Calls unpaid (others)* - 0.24

330.92 330.6840,741 15% Redeemable cumulative

Preference shares of ` 100/- each fully paid-up 40.74 40.74

TOTAL 371.66 371.42

* Recovered by way of adjustment from interest payable on debentures held by these shareholders.

Foot notes:(1) (a) Details of equity shares held by each shareholder holding more than 5 percent shares as at the end of financial year are

as under: As at 31.03.2016 As at 31.03.2015

Name of share holder No.of shares Percentage No.of Percentageheld shares held

(i) Status Mark Finvest Limited 227844 6.89 227844 6.89

(ii) K K Modi Investment & Financial Services Pvt. Ltd. 231751 7.00 231751 7.00

(b) Details of preference shares held by each shareholder holding more than 5 percent shares as at the end of financial yearare as under:

As at 31.03.2016 As at 31.03.2015


(i) ICICI Bank 7794 19.13 7794 19.13(ii) The oriental insurance company limited 6550 16.08 6550 16.08(iii) The new india assurance company limited 13624 33.44 13624 33.44(iv) The united india insurance company limited 4093 10.05 4093 10.05(v) General insurance corporation of india 3560 8.74 3560 8.74(vi) National insurance company limited 4912 12.06 4912 12.06

(2) (a) Cumulative Preference Shares were due for redemption on 31st December, 2010. The company moved Misc. Application (MA)u/s 22(3) of the SICA before Hon’ble BIFR, whereby it had sought extension and suspension of obligation in relation to the 15%Preference Shares concerning Preference Shareholders for two years. The Hon’ble BIFR vide its order dated 18th January,2011 dismissed the application of the Company. Consequent to the order, the company had written letters to the InstitutionalPreference Shareholders for settlement and redemption of Preference Shares. Further, negotiations are pending and preferenceshares are overdue for redemption as on 31st March, 2016.

(b) Arrears of dividend on Cumulative Preference Shares amounts to ` 154.28 Lac (upto 31st March, 2015 ` 148.17 Lac)

( ` in Lac)

.


Note no. 2 : RESERVES & SURPLUS( ` in Lac)

Sl.No. Particulars Opening Balance Addition Deduction Closing Balance

(1) Capital Reserve 459.34 - - 459.34(2) Capital Redemption Reserve 25.11 - - 25.11(3) Shares Premium Account 22.57 - - 22.57(4) Debenture Redemption Reserve 113.00 - - 113.00(5) Revaluation Reserve 2,012.51 - - 2,012.51(6) Share options outstanding accounts - - - -(7) Other Reserves/Funds:-

-Storage fund for Molasses Account 10.01 5.29 - 15.30

(8) Surplus i.e. balance in

Statement of Profit and Loss (21,445.23) (884.95) 5.29 (22,335.47)

TOTAL (18,802.69) (879.66) 5.29 (19,687.64)

Previous year (16,189.09) (2,500.77) 112.83 (18,802.69)

Foot-note:-

1. Storage fund for Molasses(` 5.29 lacs (previous year 4.73 lacs) is created @ 1.50 per Qtl. of Molasses sold as per the provision of“The Molasses control (Regulation of fund for erection of storage facilities) order, 1976” and is to be utilised for construction or erectionof storage facilities for Molasses.

2. Deductions in previous year includes 108.10 Lacs being depreciation on assets whose life expired as on 31.03.2014 as per scheduleII of the Companies Act, 2013.

Note no. 3 : LONG TERM BORROWINGS( ` in Lac)

Particulars As at As at31.03.2016 31.03.2015

Secured:-Bonds/debentures - -Term loans from banks (see-foot note below ) 8.10 10.27

Term loans from others - -Loans and advances from related parties - -

Unsecured:-Bonds/debentures - -Term loans from banks - -Term loans from others 2,825.99 2,193.63Deposits - -Loans and advances from related parties-Moderate Leasing & Capital Finance Services Ltd. 2,888.65 3,075.71Long term maturities of finance lease obligations - -

TOTAL 5,722.74 5,279.61

Foot-note:-Secured by hypothecation of vehicles and is repayable in monthly installments. There are no defaults as on 31st March, 2016.


Note no. 4 : OTHER LONG TERM LIABILITIES(` in Lac)


Trade payable - -Others:Security received against houses 890.28 838.03

Security received from others 226.03 229.75Advance received against houses 504.50 504.50{Note 27 (33)}Other liabilities 6.24 1.90

TOTAL 1,627.05 1,574.18

Note no. 5 : LONG-TERM PROVISIONS( in Lac)


Provision for employee benefits:-

Provision for gratuity:-

As per last balance sheet 936.61 1,038.91

Add: Provided during the year (11.33) (77.39)

Less: Paid during the year 40.77 24.91

Sub total (A) 884.51 936.61

Provision for leave encashment:-

As per last balance sheet 87.30 103.13

Add: Provided during the year 6.04 (2.46)


Sub total (B) 80.86 87.30

TOTAL (A+B) 965.37 1,023.91

Note no. 6 : SHORT TERM BORROWINGS( in Lac)


Secured:-Loans repayable on demand:-

-from banks

-Cash credit (including interest 1,498.19 1,498.19

accrued)(see-foot note below)

-overdraft from bank against 285.78 212.34

pledge of FDR’s

-from others - -

Loans and advances from related parties - -

Other loans and advances - -

Note no. 6 : (Contd.)( ` in Lac)


Unsecured:-Loans repayable on demand:--from banks - --from others - -Loans and advances from related parties:--Moderte Leasing & Capital Services Ltd. - 170.00-Weld Excel India Limited 45.00 -Deposits - -Other loans and advances - -

TOTAL 1,828.97 1,880.53

Foot-notes:-1 Cash credit of 1498.19 Lac ( including interest accrued and due

of ` 17.61 Lac ) is secured by hypothecation of Raw Materials,Stock in Progress, Finished Goods, Stores and Spares and BookDebts and guaranteed by a Managing Director.{ Refer note27(5)(i)(a)}.

2 Cash credit of 58.16 Lac from Allahabad Bank is in default since1996 and 1440.03 Lac from PNB is in default since 1992. Interestpayable on cash credit has not been paid since then. { Refer note27(18)( c to e) and note 27(5)(i)(a)}.

Note no. 7: TRADE PAYABLES( in Lac)


Purchase of raw material and store 20,460.13 22,957.20{Note 27 (14)}Customers/ Agents for purchase of goods 661.88 697.15

TOTAL 21,122.01 23,654.35

Note no.8 : OTHER CURRENT LIABILITIES( in Lac)


Current maturities oflong-term debts ( unsecured )-From related parties:-- A to Z Holding Pvt. Ltd. 24.89 24.89- Moderate Leasing & - 400.33Capital Services Ltd. -From others - -Current maturities of longterm debts ( secured )-From banks 2.42 8.05 -From other parties (see foot-note 1) 1,506.85 1,506.85Current maturities of finance 79.05 120.99lease obligations (see foot-note 2)Deferred credits {Note 27 (40)} 35.11 35.11Interest accrued but not due 61.45 61.45on borrowings (unsecured)


Note no.8 : (Contd.)(` in Lac)


Interest accrued but not due 0.09 0.11on borrowings (secured)Interest accrued and due on 1,707.46 1,707.46borrowings ( secured )Interest accrued and due onborrowings (unsecured) -from banks - - -from others 50.95 72.71Income received in advances 0.07 0.13Unpaid matured deposits and interestaccrued thereon( unsecured):-(see foot-note 3)-Fixed deposits 64.19 64.36 -Interest accrued thereon 280.85 280.88Unpaid matured debentures and interestaccrued thereon (secured):-(see foot-note 4) -Debentures (Net calls in arrears) 535.21 537.32 -Interest accrued thereon 3,032.58 3,052.50Other Payable:-Employees dues 963.02 839.27Statutory liabilities 2,048.20 2,442.10Security received from others 76.07 75.77Other liabilities 1,813.60 1,648.14

TOTAL 12,282.06 12,878.42Foot notes:-(1) Others:-

(a) Loans aggregating to 1377.87 Lac (IDBI 627.74 Lac,ICICI 235.00 Lac, IFCI 287.66 Lac, LIC 138.97 Lac,GIC and its subsidiaries 88.50 Lac) are secured againstsecurities as mentioned in 3(b) below. {Refer Note27(5)(i)(b) and 27(5)(ii)}.

(b) Loan of ` 8.08 Lac from Government of Uttar Pradeshunder the Industrial Subsidised Housing Scheme issecured by 1st Mortgage of Land and tenamentsconstructed under the Scheme.Details of default notavailable.

(c) Loan from IDBI under Technical Development FundScheme amounting to ` 74.70 Lac is secured againstElectrolyser and Copper Electrodes Machine.{Refer Note27(5)(i)(b)(i)}.

(d) Loan taken under Equipment Finance Scheme amountingto 46.20 Lac is secured against Effluent treatment plant.{Refer Note 27(5)(i)(b)(ii)} and loan repayment is in defaultprior to year 1996 and interest payable has not been paidsince then.

(2) Finance lease rent of 79.06 Lac is overdue since 1st October2013.

(3) Fixed deposits:-(a) Fixed deposits guaranted by managing directors 22.98

Lac (Previous year 22.98 Lac )(b) Balance outstanding in Fixed deposits and interest payable

on fixed deposits has not been paid since 1989-90 {Alsorefer Note No. 27(30)(b)}.

(4) Debentures:-(a) (i) 2,26,105-12.5% Mortgage Debentures (Non-

Convertible part of 200/- each) redeemable in threeyearly instalments of 65.00, ` 65.00 and ` 70.00respectively commencing from the expiry of seventhyear from the date of allotment i.e. 29th February,1988 and due for payment. Interest not paid since29th February, 1988.

(ii) 30,000-15% Mortgage Debentures of 100/- eachredeemable at 5% premium on the expiry of seventhyear from the date of allotment i.e. 18th December1987 and due for payment. Interest not paid since1987- 88.

(iii) 5,300-15% Mortgage Debentures of 1000/- eachredeemable upto 20th August, 1990 and due forpayment. 1,000 Debentures redeemed during theyear 1998-99 for which discharged debenturecertificates not yet received. Interest not paid since1987- 88.

(b) The above debentures are secured by Joint Mortgage of allfixed assets present and future by hypothecation of thesaid assets and by deposit of title deeds relating tocompany’s immovable properties, floating charges on allmovable/current assets, other than assets referred in footnotes1(b,c,d) and foot note 1 of Note 6.

Note no. 9 : SHORT-TERM PROVISIONS(` in Lac)


Provision for employee benefits:-Provision for gratuity:-As per last balance sheet 284.70 277.52Add: Provided during the year 115.09 108.49Less: Paid during the year 122.96 101.31

Sub total (A) 276.83 284.70

Provision for leave encashment:-As per last balance sheet 11.09 9.60Add: Provided during the year 3.80 8.87Less: Paid during the year 6.15 7.38

Sub total (B) 8.74 11.09

Others:-Provision for Incentive:As per last balance sheet 32.47 26.09Add: Provided during the year 9.23 7.54Less: Paid / ( Recovered ) 3.28 1.16

Sub total 38.42 32.47Provision for excise duty 317.16 351.11

Sub total (C) 355.58 383.58

TOTAL (A+B+C) 641.15 679.37


Not

e no

. 10

: TA

NG

IBLE

ASS

ETS

( in

Lac

)Pa

rtic

ular

s

G

ross

Dep

reci

atio

nO

peni

ngA

dditi

ons

Dis

posa

ls /

Oth

erC

losi

ngO

peni

ngFo

rFo

r the

Oth

erC

losi

ngN

etba

lanc

eW

ritte

n of

f.ad

just

-ba

lanc

eba

lanc

eE

arlie

rye

arad

just

men

tba

lanc

eca

rryi

ngm

ent

Year

amou

nt{N

ote 2

7(42

)}S

old

/ Adj

.A

ddba

ck31

.03.

2016

Land

(A)

2,0

23.5

0 -

- -

2,0

23.5

0 -

- -

- -

- 2

,023

.50

Bui

ldin

gs (

B &

C )

1,3

90.7

2 -

- -

1,3

90.7

2 1

,002

.96

- 2

6.11

- 0

.73

1,0

28.3

4 3

62.3

8P

lant

& E

quip

men

t * 1

1,87

1.83

54.

93 0

.32

168

.48

11,

757.

96 8

,343

.42

- 2

34.5

5 1

60.3

1 5

.59

8,4

12.0

7 3

,345

.89

Furn

iture

& F

ixtu

res

347

.50

1.2

5 2

.28

- 3

46.4

7 2

99.8

9 -

14.

97 1

.97

- 3

12.8

9 3

3.58

Vehi

cles

(D)

481

.22

33.

22 9

4.17

- 4

20.2

7 3

49.2

5 -

39.

43 6

4.12

- 3

24.5

6 9

5.71

Offi

ce E

quip

men

t 3

39.6

9 5

.24

0.2

2 -

344

.71

297

.80

- 1

5.06

0.2

0 0

.04

312

.62

32.

09W

ater

sup

ply

& d

rain

age

59.

85 -

- -

59.

85 5

5.86

- 0

.02

- -

55.

88 3

.97

Oth

ers

15.

62 -

- -

15.

62 1

4.79

- -

- -

14.

79 0

.83

TOTA

L 1

6,52

9.93

94.

64 9

6.99

168

.48

16,

359.

10 1

0,36

3.97

- 3

30.1

4 2

26.6

0 6

.36

10,4

61.1

5 5

,897

.95

Prev

ious

yea

r 1

6,47

9.88

78.

15 2

4.15

3.9

5 1

6,52

9.93

9,8

54.2

0 1

08.1

0 4

26.7

8 2

0.94

4.1

7 10

,363

.97

6,1

65.9

6

Foot

-not

es:-

(A)

Com

pany

’s L

and

at M

odin

agar

& M

eeru

t was

reva

lued

as a

t 31s

t Mar

ch, 1

992

at C

urre

nt R

epla

cem

ent C

ost o

n th

e ba

sis o

f val

uatio

n re

port.

The

app

reci

atio

n on

reva

luat

ion

` 92

4.66

Lac

was

cred

ited

to th

e R

eval

uatio

n R

eser

ve. T

he L

and

was

pre

viou

sly r

eval

ued

as o

n 31

st M

arch

,198

5 an

d th

e ap

prec

iatio

n of

1

087.

85 L

ac o

n su

ch re

valu

atio

nal

so s

tand

s cr

edite

d to

the

Rev

alua

tion

Res

erve

.(B

)B

uild

ings

incl

ude

Land

, Fur

nitu

re, F

ixtu

re &

Fitt

ings

acq

uire

d fo

r a lu

mps

um c

onsi

dera

tion

of

2.2

5 La

c in

the

year

194

7.(C

)In

clud

es a

sum

of

96.

58 L

ac (P

revi

ous

year

9

6.58

Lac

) tow

ards

per

man

ent i

mpr

ovem

ent t

o th

e re

nted

pro

perti

es.

(D)

Incl

udes

Ten

( Pre

viou

s yea

r Tw

elve

) car

s cos

ting

82.

62 L

ac (P

revi

ous y

ear

96.

26 L

ac) W

DV

47

.13

Lac (

Pre

viou

s yea

r 4

9.62

Lac

) pur

chas

ed in

the

nam

e of

Em

ploy

ees

who

hav

e gi

ven

disc

laim

er in

favo

ur o

f the

Com

pany

.(E

)E

xclu

des

depr

ecia

tion

on lo

ose

tool

s 0

.04

Lac

(Pre

viou

s ye

ar

0.0

3 La

c) a

nd

0.7

1 La

c (P

revi

ous

year

0

.72

Lac)

on

addi

tions

to a

sset

s of

Ste

el U

nit.

(F)

Det

ails

of L

and

& B

uild

ing

give

n on

ope

ratin

g le

ase

has

not b

een

disc

lose

d se

para

tely

.(G

)O

ther

adj

ustm

ents

repr

esen

t orig

inal

cos

t of c

erta

in p

lant

and

mac

hina

ry h

avin

g W

DV

of

8.4

2 La

c tra

nsfe

red

to G

as U

nit w

here

in th

ese

are

treat

ed a

nd d

iscl

osed

as

“Non

-C

urre

nt a

sset

s he

ld fo

r Dis

posa

l” ne

t of d

ispo

sal m

ade

durin

g 20

15-1

6 of

an

asse

t hav

ing

WD

V o

f 1

.52

Lac.

* Inc

lude

s 1

5.74

Lac

(Pre

viou

s Ye

ar

24.

50 L

ac) b

eing

the

writ

ten

dow

n va

lue

of A

sset

s of

Van

aspa

ti U

nit w

hich

is ly

ing

clos

ed s

ince

200

2.

Not

e no

. 11

: IN

TAN

GIB

LE A

SSET

S( `

in L

ac)

Part

icul

ars

G

ross

Dep

reci

atio

nN

etO

peni

ngA

dditi

ons

Dis

posa

ls /

Oth

erC

losi

ngO

peni

ngFo

r the

Oth

erC

losi

ngca

rryi

ngba

lanc

eW

ritte

n of

f.ad

just

-ba

lanc

eba

lanc

eye

arad

just

-ba

lanc

eam

ount

men

tm

ent

31.0

3.20

16

Com

pute

r sof

twar

e10

2.52

- -

- 1

02.5

2 9

7.32

3.6

2 -

100

.94

1.5

8

Tota

l10

2.52

- -

- 1

02.5

2 9

7.32

3.6

2 -

100

.94

1.5

8

Pre

viou

s ye

ar10

2.52

- -

- 1

02.5

2 8

8.93

8.3

9 -

97.

32 5

.20


Note no. 12 : NON CURRENT INVESTMENTS( in Lac)


Trade investments - -Other investments(a) Investment in Equity Instruments:-

In subsidiaries:- (unquoted )21,450 fully paid-up shares of` 100/-each in Your investment(India)Ltd. 21.45 21.4513,200 fully paid-up shares of` 100/-each in Own investment(India)Ltd. 13.20 13.20Others :-Unquoted:-10,50,000 fully paid-up sharesof 10/-each in IndofilIndustries Limited 437.43 437.43

1,200 partly paid-up sharesof 10/- each in Vital ChemicalsPrivate Limited.(Transferrefused by the Board-matter indispute before the Court). 0.07 0.07Quoted:-7,00,000 fully paid-up sharesof 10/-each in Modipon Limited. 20.00 20.0019,99,960 fully paid-up sharesof 10/-each in Bihar SpongeIron Limited. {Note 27(31)} 200.00 200.00Less : Provision for Diminutionin value of Shares (148.80) -8,00,000 fully paid-up shares of` 10/-each in Modi Rubber Limited. 80.00 80.0062,755 fully paid-up shares of` 10/-each in Lord Chloro Alkali Limited 6.28 6.284 fully paid-up shares of 10/-eachin Mukund Limited. 0.01 0.01

(b) Investment in preference shares:-( quoted )1 fully-paid preference Share of` 10/-each in Mukund Limited - -

(c) Investment in Government ortrust securities:- ( quoted )*75551.226 fully-paid units in UTIInfrastructure Fund-Growth Plan 25.84 25.84

TOTAL 655.48 804.28

* Corporate lien marked on these infrastructure fund unitsFoot Notes:(1) Carrying amount of quoted

investments 183.33 332.13(2) Market value of quoted investments 529.68 392.01(3) Carrying amount of unquoted

investments 472.15 472.15(4) Aggregate provision for dimunition

in value of investments{ Note 27(31)} 148.80 -

Note no. 13 : LONG TERM LOANS AND ADVANCES( ` in Lac)


Capital advances 30.55 -(unsecured considered good )Doubtful 1.90 1.90Less : Allowances for Doubtful (1.90) (1.90)

Security Deposits:-- Secured, considered good - -- Unsecured, considered good- Related parties:- Weld Excel India Limited 36.66 36.66- Others 164.12 166.79- Doubtful - 1.00Less : Allownaces for Doubtful - (1.00)

Other Loans and Advances:-(Unsecured, considered good)(a) Prepaid expenses 1.33 2.87(b) Amount recoverable 11.46 11.46(c) Loans to employees - -(d) Loans to others 8.00 8.00

TOTAL 252.12 225.78

Note no. 14 : INVENTORIES( ` in Lac)


(a) Raw materials 146.46 495.93(b) Raw materials (in transit) 220.87 60.65(c) Work-in-progress 185.42 335.37(d) Finished goods 4,499.71 5,575.71(e) Stock-in-trade 1.89 1.19(f) Stores and spare parts 939.95 948.67(g) Loose tools 24.36 24.27

TOTAL 6,018.66 7,441.79

Note no. 15 : TRADE RECEIVABLES( ` in Lac)


Trade receivables outstanding

for a period exceeding 6 months:-

-Secured, considered good 4.56 4.54

-Unsecured, considered good 677.21 648.06

-Doubtful 827.89 702.58

Less:-

Allowance for bad and doubtful debts (827.89) (702.58)


Note no. 15 : (Contd.)(` in Lac)


Other Debts:--Secured, considered good 91.08 93.79-Unsecured, considered good 4,862.92 5,264.24-Doubtful 2.54 7.84Less:-Allowance for bad and doubtful debts (2.54) (7.84)

TOTAL 5,635.77 6,010.63

Note no. 16 : CASH AND BANK BALANCES( in Lac)


(i) Cash and cash equivalents:-(a) Balances with banks:

-In Current Accounts 545.78 1,257.99-In FDR’s 2.45 35.01

(b) Cheques, drafts in hand 34.94 37.49(c) Cash on hand 17.51 15.04(d) Others:-

-Postage imprest &stamps in hand - 0.01

TOTAL 600.68 1,345.54

(ii) Other bank balances:-(a) Earmarked balance with

banks/post office:--Saving account(molasses storage fund) 0.36 0.35-Fixed deposits (molassesstorage fund)* 7.67 47.63

(b) Fixed deposits with banks(Pledged with Excise/Sales TaxAuthorities) 81.05 20.49

(c) Fixed deposits with banks(Pledged for tender) 46.42 38.74

(d) Fixed Deposits with Banks(Pledged against overdraft) 310.33 286.51

(e) Balance with banks heldas margin money againstguarantees 330.00 313.26

(f) Bank deposits with upto12 months maturity 35.88 30.37

(g) Bank Deposits with more than12 months maturity 74.00 91.00

(h) Deposits with Bank in-nolien account 395.00 395.00

TOTAL 1,280.71 1,223.35

* These FDR’s are in the joint name of Modi Sugar Mills and SubInspector, Molasses Excise.

Note no. 17 : SHORT-TERM LOANS AND ADVANCES(` in Lac)


(a) Loans and advances to related parties:-(i) -Secured considered good - -

(ii) -Unsecured considered good

-Bihar Sponge Iron Ltd. 1.47 1.36

-Win Medicare Pvt. Ltd. 1.15 1.37

-Modipon Limited 8.69 9.06

-Managing Director

(Mahendra Kumar Modi) * - 0.49

(iii) -Doubtful

-Modi Senator Pvt. Ltd. 0.85 0.85

- Technicast Engineers Ltd. 0.51 0.51

Less:Allowance for doubtful (1.36) (1.36)

(b) Others (unsecured, considered good):-

(i) Unutilized balances of CENVAT/ VAT 93.93 99.87

(ii) Loans & Advances to employees 8.94 12.55

(iii) Prepaid expenses 113.05 109.77

(iv) Amount recoverable 212.56 190.86

(v) Deposits with excise /

sales tax authorties 8.08 8.08

(vi) Others 204.11 189.82

(vii) Unreconciled Inter-unit balances

{ Notes 27 (4) and 43} 1,029.36 992.24

(c) Others (doubtful):-

(i) Loans & Advances to employees 3.00 2.97

(ii) Amount recoverable 24.55 23.99

(iii) Others 95.48 102.16

Less: Allowance for doubtful (123.03) (129.12)

(d) Security Deposits:-

-Secured considered good 18.50 -

-Unsecured considered good 133.30 190.99

-Related parties

(Unsecured consider good) :-

-Ashoka Mercantile Ltd.

{Foot-Note 7 of Note 27(38)} 798.30 867.80

-Modipon Limited 147.63 147.63

-Doubtful 48.84 7.13

Less: Allowance for doubtful (48.84) (7.13)

Total 2,779.07 2,821.89

* Recovered Subsequently.


Note no. 18 : OTHER CURRENT ASSETS( ` in Lac)


Tax deducted at source 111.14 85.32Wealth tax receivable 7.37 7.37Interest accrued on fixeddeposits with banks 39.80 50.65Amount recoverable {Note 27(24)} 1,457.09 2,218.72Interestreceivable on Security depositwith related party {Foot-Note 7 of Note 27(38)} -Ashoka Mercantile Ltd. 64.07 71.00Rent receivables:- -Unsecured, considered good 1.87 1.82 -Doubtful 22.78 22.78Less:-Allowance for bad and doubtful debts (22.78) (22.78)Deferred revenue expenditure 11.07 11.07Stores and spare parts * 10.67 10.67

TOTAL 1,703.08 2,456.62

*Net value of Store & spare parts of Vanaspati Unit which is lyingclosed since 2002.

Note no. 19 : REVENUE FROM OPERATIONS( ` in Lac)

Particulars For the For theyear ended year ended31.03.2016 31.03.2015

Sale of products 35,421.02 35,417.41Sale of services 102.17 47.87Other operating revenue 49.63 64.49Subsidy on Cane Commission 162.40 474.08

TOTAL 35,735.22 36,003.85

Note no. 20 : OTHER INCOME( ` in Lac)


Interest income 173.16 173.08Dividend received (gross) 52.50 42.00Rental income 207.29 216.92Profit on sale of fixed assets 5.01 10.12Profit on sale of non current assets heldfor disposal (Refer foot note (g) of note (10) 4.13 -Excess provision written back 24.11 16.85Unclaimed Credit Balances W/Back 38.42 22.37Amounts written back 17.89 3.21Depreciation Written Back 1.96 4.17Foreign Currency fluctuation gain (Net) - 18.86Other non-operating income 22.92 121.71Miscellaneous Income 2.51 -Claim received on fire (net) - 11.04

TOTAL 549.90 640.33

Note no. 21 : CHANGE IN INVENTORIES OF FINISHEDGOODS , WORK-IN-PROGRESS AND STOCK-IN-TRADE

( ` in Lac)


(A) Finished goods

Opening stock 4,996.84 7,035.65

Less: Closing stock 4,365.36 4,996.84

Sub Total (A) 631.48 2,038.81

(B) Stock in trade

Opening stock 1.19 1.65

Less: Closing stock 1.89 1.19

Sub Total (B) (0.70) 0.46

(C) Goods in process



Sub Total (C) 149.95 104.28

(D) By Product



Sub Total (D) 444.52 (68.36)

Net (Increase) / Decrease

in Stock (A+B+C+D) 1,225.25 2,075.19

Note no. 22 : EMPLOYEE BENEFITS EXPENSES( ` in Lac)


Salary, wages, gratuity &

other allowances 2,876.37 2,833.35

Contribution to provident and

other funds 202.11 206.48

Staff welfare expenses 269.87 297.36

TOTAL 3,348.35 3,337.19


Note no. 23 : FINANCE COSTS(` in Lac)


(a) Interest expenses:- {Note 27(4) (f) (i) & (ii), 27 (5) and 27 (18)}(i) On borrowings 578.13 724.63(ii) On statutory dues 8.83 22.23(iii) On trade payables 47.62 472.92(iv) On security 5.51 5.38(v) On Finance Lease - -(vi) On Loan form Coporate 1.06 -(vii) On car loans taken by

employees / corporate adviser 1.98 2.32(viii) On others 0.91 0.91

(b) Other borrowing costs - -(c) Net gain/loss on foreign currency - -

transactions and translation

TOTAL 644.04 1,228.39

Note no. 24 : OTHER EXPENSES

(` in Lac)


Consumption of stores & spare parts 403.73 406.46

Consumption of packing materials 1,600.38 1,284.78

Power & fuel 341.34 467.93

Packing & Filing Expenses 40.04 -

Repairs to machinery 670.09 678.20

Repairs to building 71.05 46.19

Lease rent 130.56 151.30

Rates & taxes 339.03 252.67

Excise duty on stock 35.89 (18.94)

Insurance 44.39 50.54

Auditor’s remuneration(see foot-note below) 23.54 23.64Service Tax 9.09 -Loss on sale of fixed assets 9.15 0.01Loss on sale of stores - 5.28Stores Written Off 0.19 -Less: Adjustment of provisionfor obsolete stores - (1.16)Donations 0.77 0.97Bad debts written-off 41.51 22.86Less : Adjustment of provision fordoubtful debts (36.74) (13.40)Claims / amounts written-off 11.88 10.58

(` in Lac)


Less : Adjustment of provisionfor doubtful (8.01) (10.58)Fixed assets written-off 0.79 0.16Provision for obsolete spare-parts & stores 16.15 5.36Provision for Raw Material 10.00 -Provision for doubtful debts, advancesand Security Deposits 199.37 119.01Rent paid on Cylinders 8.84 -Freight/ transport & forwarding 502.64 522.77Commission to selling agents 490.64 308.17Discount & sale promotion 1,075.30 370.25Advertisement expenses 121.54 162.15Travelling expenses 266.16 283.09Legal & professional charges 290.57 183.90Trade mark licensce & marketing fees 148.37 -Job work charges 46.83 11.64Retainership Expenses 208.11 237.37Net gain/loss on foreign currencytransactions & translaion 14.52 -Other general expenses 532.18 555.35

TOTAL 7,659.89 6,116.55

Note:-Auditor’s remuneration:-

(a) As auditors 8.21 7.41(b) For taxation matter (Tax Audit fee) 6.58 6.49(c) For company law matters - -(d) For management services - -(e) For other services including

certification work 7.09 7.61(f) For reimbursement of expenses 1.66 2.13

TOTAL 23.54 23.64

Note no.25. Earnings per Share (EPS) basic and diluted, computed in

accordance with Accounting Standard-20:(` in Lac)

Particulars 2015-16 2014-15Loss for the year asper annual accounts 884.95 2505.50Add: Dividend onPreference Shares 6.11 6.11

Total (A) 891.06 2511.61Number of Equity Shares issued (B) 33,09,214 33,09,214Earning per share (in ) (A)/(B) (26.93) (75.90)Face Value of Equity Share in Rupees 10 10

Note no. 24 (Contd.)


26 ACCOUNTING POLICIES:(1) INVENTORY VALUATION

(a) Stocks of raw materials and stores and spares arevalued at weighted/moving average cost. (Net ofCenvat benefits/input tax credit of U.P.VAT) or netrealizable value whichever is less.

(b) Loose tools are valued at depreciated cost.(c) Cost of machinery spares, which can be used only in

connection with an item of fixed asset and whose useis expected to be irregular, are charged to revenueover useful life of the principal item.

(d) Goods-in-transit are valued at cost.(e) Finished goods/Goods-in-Process are valued at lower

of cost and net realisable value except by-product i.e.molasses which is valued at net realizable value. Costinter-alia, includes direct cost, depreciation, exciseduty, lease rentals and factory overheads but excludesgeneral administration and sell ing expenses,Corporate Office administration expenses andInterest. The closing stocks out of inter divisionaltransfer of goods, is being treated as finished goodsinstead of raw materials/stores and valuedaccordingly.

(2) FIXED ASSETS(i) Major improvements to fixed assets that increases the

future benefits from the existing assets beyond itspreviously assessed standard of performance isincluded in the gross block and is depreciated over theremaining life of the original assets.

(ii) Financing cost (upto the date the assets are ready tobe put to use for commercial production) relating toborrowed funds attributable to acquisit ion ofconstruction of fixed assets are included in the grossbook value of fixed assets to which they relate.

(3) DEPRECIATION(a) Depreciation on Plant & Machinery is provided on

Straight Line Method except in Corporate Office. Inrespect of other assets including Office Equipments,depreciation is provided on Written Down ValueMethod in all units except Sugar and Steel Units whereit is provided on Straight Line Method.

(b) Depreciation on additions/deletions is charged onprorata basis and in accordance with Schedule II of theCompanies Act, 2013.

(c) Depreciation on assets costing upto 5,000/- has beenfully depreciated in the year of purchase.

(4) INTANGIBLE ASSETS:Intangible assets are stated at cost of acquisition lessaccumulated amortization. Computer Software isamortized over a period of five years.

(5) REVENUE RECOGNITION:( i) Export incentives under the duty entitlement pass

book scheme is recognized on accrual basis.(ii) Revenue arising by use of Company’s properties by

others yielding rent is recognized when no significantuncertainty as to measurability or collectability exists.

(iii) Sale of goods is recognized at the point of dispatch ofgoods to customers.

(6) INVESTMENTS:Long-term investments are valued at cost less provision fordiminution, other than temporary, in the value ofinvestments.

(7) RETIREMENT BENEFITS:(a) Contribution to Provident Fund is made at a

predetermined rate to the Provident Fund Trust andcharged to the Statement of Profit and Loss on accrualbasis.

(b) Gratuity Liability is accounted for on accrual basis,computed actuarially, except for Steel Unit upto 31st

March, 2002 which is accounted for on cash basis.(c) Leave encashment is accounted for accrual basis,

computed actuarially.(8) OPERATING LEASE:

Lease payments under an operating lease are recognizedas an expense in Statement of Profit and Loss on a straightline basis over the lease term.

27. CONTINGENT LIABILITIES AND OTHER NOTES:( ` in Lac)

As at As at31.03.2016 31.03.2015

1. (a) Claims against the Companynot acknowledged as debts :(i) Workmen (excluding

unascertainable amounts) 329.76 290.24(ii) Others 244.31 234.42

(b) Partly paid-up Equity Shares ofVital Chemicals Private Limited 0.08 0.08

(c) Disputed Liability for Excise-duty, Sales-tax, Entry-taxmatters and liquidateddamages on Provident Funddues {excluding interestunascertainable andundisputed Sales Tax/penalty demands (net ofprovision made of` 62.21 Lac ) of 175.24 Lac} 1537.57 1378.50

(d) Income Tax 209.59 209.59(e) Bills discounted 148.59 200.21

2. Estimated amount of contracts remaining to be executed onCapital Account `337.57 Lac (Previous Year `63.12 Lac).

3. Guarantees given to Sales-tax/Excise Departments on behalfof Companies in the same group amounts to `139.42 Lac(Previous year 139.42 Lac). Information regarding outstandingposition is not available. This excludes guarantees of `109.63Lac (Previous year `109.63 Lac) vacated by Sales TaxDepartment for which guarantee bonds not yet received back.

4. (a) The Steel Unit is lying closed since 24th January, 1993 dueto strike/lock-out and thereafter closure was declared witheffect from 24th November, 1993, as the Unit was found tobe unviable. The Company has not been able to obtainaccess to the accounting, financial and production recordsof the unit necessary for updating the said books of


accounts/compiling the data to prepare the annualaccounts as well as for finalizing the audit for the yearended 31st March, 1993. Transactions subsequent to theclosure of the unit could not be incorporated in the annualaccounts of 1992-93 and onwards in view of pendingaccess to the earlier accounts viz., 1st April, 1992 to 24thJanuary, 1993, the absence of which would leave the booksstill incomplete. However, the Statement of Profit and Lossfor the current financial year 2015-16 and from 1993-94 to2014-15 have been incorporated in current financial yearand in various previous financial years respectively. As aninterim measure 1026.73 Lac (Previous year 992.24Lac) which represents: (i) 1694.81 Lac (Previous year`1,463.43Lac) being net cumulative inter-unit debitbalance on account of transactions of other units of theCompany with Steel Unit during 1st April, 1992 to 31stMarch, 2016, (ii) payment of unsecured loan of 45.00 Lac{Refer Note (c) below} and (iii) net loss of 623.08 Lac forthe years 1993-94 to 2015-16 (before inter unit rentalincome, write-back of ` 278.95 Lac and provision fordepreciation of ` 696.19 Lac) have been clubbed withCurrent Assets of the Company as on 31st March, 2016and 31st March, 2015 respectively as “Inter- UnitBalances” pending incorporation of (i) Annual Accounts forthe period 1st April, 1992 to 31st March, 1993 and (ii) assetsand liabilities including inter unit balances arising onaccount of transactions for the period 1st April, 1993 to 31stMarch, 2016.

(b) The financial results for the year 1992-93 would beincorporated as soon as the Company is able to obtainaccess to/reconstruct the financial, accounting andproduction records.

(c) In view of above, as per past practice, the audited openingbalances of Assets and Liabilities, quantitative details,contingent liabilities {excluding old electricity dues – ReferNote 4f(viii)} and notes of the Steel Unit as on 1st April, 1992,subject to (i) reduction of unsecured loans taken by`278.95 Lac in view of write back on account of one-timesettlement (O.T.S.) of dues with Hong Kong and ShanghaiBanking Corporation Limited (HSBC) during the year 2004-05, and further reduction of ` 45.00 Lac on account ofpayment during 2005-06 of O.T.S. to H.S.B.C.; (i i)reduction of fixed assets (net) by `696.19 Lac beingdepreciation provided during 1993-94 to 2015-16 on fixedassets and (iii) decrease in Inter-Unit balance by 668.08Lac which represents; the sum of net loss of 623.08 Lacfor the years 1993-94 to 2015-16 (before inter-unit rentalincome, write-back of above amount of 278.95 Lac andprovision for depreciation of 696.19 Lac) and repaymentof unsecured loan of 45.00 Lac. The above inter-unitbalance will actually represent either net increase in assetsor net decrease in liabilities as on 31st March, 2016 overbalances as on 31st March, 1993 of the Steel Unit.

(d) Assets and Liabilities of the Steel Unit incorporated in theBalance Sheet of the Company as on 31.03.2015 and31.03.2016 are as under:

(` in Lac)Liabilities As at As at Assets As at As at

31.3.2016 31.3.2015 31.3.2016 31.3.2015Secured Loans 3421.08 3421.08 Fixed Assets (Net) 429.90 436.71Current Liabilities& Provisions 2838.28 2838.28 Investments 0.11 0.11AccumulatedProfits/ (1040.32) (836.62) Current Assets &(Losses) (net): Advances:

Inventories 1340.14 1340.141993-94 to1995-96 (687.81) Sundry Debtors 1199.25 1199.251996-97 and1997-98 (58.56) Cash & Bank Balance 150.78 150.781998-99 to2000-01 (29.83)2001-02 to Loans and Advances 249.70 249.702003-04 56.532004-05 300.902005-06 (36.67) Miscellaneous 11.07 11.072006-07 (18.94) Expenditure2007-08 (10.86) (to the extent not written2008-09 (24.40) off or adjusted)2009-10 172.482010-11 (152.17)2011-12 (141.82) Inter-unit Balances 1050.87 1247.762012-13 (167.86)2013-14 93.97 Loss for the year 1991-92 787.22 787.222014-15 (131.58)2015-16 (203.70)

Total 5219.04 5422.74 Total 5219.04 5422.74

( e) Statement of Profit and Loss of the Steel Unit for the yearended 31st March, 2016 and 31st March, 2015 (excludinginter-unit rental income of ` 46.12 Lac) (Previous year` 46.12 Lac) is as under:

( ` in Lac)Particulars 2015-16 2014-15

INCOME :Rental Income 185.97 192.25Profit on sale of fixed assets - 3.54

185.97 195.79EXPENDITURE :Employees Benefit Expenses 109.23 100.07Finance Cost 232.29 179.67Depreciation 6.81 6.82Legal and Professional Expenses 1.46 1.47Other Expenses 39.88 389.67 39.34 327.37Loss for the year 203.70 131.58

(f) The Profit and Loss Account/Statement of Profit and Lossof Steel Unit for the years 1993-94 to 2015-16 are subject tothe following notes on accounts:-(i) In view of non-availability of book balance of liabilities

towards PNB, IDBI and IFCI in the books of Steel Unitof the Company on account of non-incorporation ofannual accounts and balance sheets of Steel Unit{Refer Note 27 (4) (a to c) of Annual Accounts}, thedifference between OTS amounts and book balances


could not be ascertained.(ii) No provision of interest, amount unascertained, is

required to be made, on loans from other FinancialInstitutions as the existing amounts appearing in thebooks of accounts of the Company will be more thansufficient in view of in-principle approval/discussionsbeing held for one time settlement of dues with theFinancial Institutions.

(iii) The impact, if any, on account of non-availability andconseq uently non incorporation of audited openingbalances of assets and liabilities of the Steel Unit as on1st April, 2015;

(iv) Non-provision of obsolete/damaged stocks and fixedassets, if any, in view of non-incorporation of earlieryear ’s accounts and non-physical verification ofinventories and fixed assets as on 31st March, 2016;

(v) Non-confirmation/reconciliation of balances of debtors,creditors, banks, financial institutions etc. and impact,if any, on the Statement of Profit and Loss;

(vi) Non-provision of doubtful debts and loans & advances,amount unascertained;

(vii) Non-provision of Impairment, if any, of the fixed assetsas per Accounting Standard (AS 28) i.e. Impairment ofAssets, amount unascertained.

(viii) (a) Uttar Pradesh Electricity Board (now U.P. PowerCorporation Ltd.) raised various demand noticesagainst electricity dues and late paymentsurcharge amounting to 2435.48 Lac on the Steelunit of the Company.

(b) In terms of One Time Settlement with U.P. PowerCorporation Limited regarding arrears of electricitydues, the Steel unit paid during the year 2009-10`563.90 Lac against the demand of 1123.99 Lacincluded in (viii)(a) above. Accordingly shortfall inprovision of 243.37 Lac has been charged torevenue during the year 2009-10.

(c) The Company filed writ petition in Allahabad HighCourt challenging the said demand notices. TheHon’ble Allahabad High Court dismissed the writpetition filed by the Company. The Company filedSpecial Leave Petition (SLP) with the Hon’bleSupreme Court of India, who has granted interimstay on 14th March, 2005 for stay of recovery byway of sale of property which is still continuing.

In view of the above and pending incorporation ofannual accounts of Steel Unit for 1992-93, noprovision is considered necessary against thebalance demand of 1311.49 Lac at this stage.

5. With respect to the assignment of debt, the views of both theManaging Directors are stated herein below:-(i) Shri U.K. Modi submits that:-

“(a) During the year 2006-07, an agreement dated 22nd

January, 2007 for One Time Settlement (OTS) of duesof Punjab National Bank (PNB) was entered intobetween the Company, PNB, Shri U.K. Modi (asGuarantor) and SBEC Sugar Limited (SSL), on theterms as contained in the PNB’s Letter dated 28th

September, 2006. Under the said agreement, PNB has

agreed to assign all its claims against Steel Unit of theCompany together with all securities and chargescreated by the Company to SSL on payment of fullsettlement amount of 2810.60 Lac together withinterest. SSL made full payment to PNB of thesettlement amount together with interest. PNBthereafter executed a Deed of Assignment on 15th

May, 2012 in favour of SSL by which PNB assigned allits claims together with all securities and chargescreated by the Company in its favour to SSL. TheRegistrar of Companies has registered themodification to the charges in favour of SSL. The debtsof MIL which was assigned to SSL has been furtherassigned to SBEC Bioenergy Limited (SBEL) on 31st

December, 2012. In view of the above, the secureddebt is now payable by the Company to SBEL. TheCompany proposes to enter into revised terms ofpayment of this secured debt with SBEL.

(b) (i) With reference to the Company’s liabilities to IDBILimited, a settlement agreement was concludedbetween the Company, IDBI Limited and SBECBio Energy Limited (SBEL) on 6th October, 2007.This settlement agreement was in terms of IDBI’sletter dated 9th February, 2007. Under the saidagreement IDBI agreed to assign its entire debtdue and payable by the Company to SBELsubject to SBEL paying to IDBI its OTS claimamount of `1232.20 Lac. Acting on the saidagreement, SBEL made a payment of 1232.20Lac to IDBI together with interest. The saidpayment to IDBI of `1232.20 Lac along withinterest was completed on 6th October 2007.IDBI’s claim against this Company stoodassigned to SBEL together with the securitiesand charges and the said debt is now payable bythis Company to SBEL.The Hon’ble BIFR vide its orders dated 12th

December, 2011 and 19th April, 2012 recognizedSBEL as this Company’s creditor in place of IDBIand by an order dated 17th July, 2012 directedIDBI (OA) to execute the Deed of Assignment infavour of SBEL. The Company proposes to enterinto fresh terms of payment of the IDBI’s assigneddebt with SBEL.

(ii) With reference to this Company’s liabilities toIFCI Limited, a settlement agreement dated 30th

December, 2009 was concluded between thisCompany, IFCI Limited and SBEC Bio-EnergyLimited (SBEL). This settlement agreement wasin terms of IFCI’s letter dated 30th December,2009. Under the said settlement agreement, IFCIagreed to assign to SBEL its entire debt as dueand payable by this Company to it subject toSBEL paying to IFCI its OTS claim of 775.00Lac. Acting on the said settlement agreement,SBEL made a payment of 775.00 Lac to IFCI on30th December, 2009 and in consideration thereofIFCI Limited executed a Deed of Assignmentdated 19th April, 2012 and assigned its all claimsagainst this Company together with the securities


and charges in favour of SBEL. The Registrar ofCompanies has registered the modification to thecharges in favour of SBEL. The said secured debtis payable by this Company to SBEL. TheCompany proposes to enter into fresh terms ofpayment of this debt with SBEL.

(iii) At the hearings before the Hon’ble BIFR and withthe consent of Advocates for Shri U.K. Modi andShri M.K. Modi, the Hon’ble BIFR passed ordersand issued directions in M.A. No. 754/BC/2011(filed on behalf of Shri U.K. Modi) and clarified thatthe OA shall consider the representations fromShri U.K. Modi, Shri M.K. Modi, Shri D.K. Modiand also from SBEC Bioenergy Ltd. and SBECSugar Ltd.

(iv) The Bench directed that, SBEC Bioenergy andSBEC Sugar be heard and consulted by IDBI(OA) in connection with the preparation of theDRS.

(v) In the order dated 22nd June, 2012 the Hon’bleBIFR observed and noted that IFCI and PNB haveexecuted deeds of assignments in favour ofSBEC Bioenergy Ltd. and SBEC Sugar Ltd.respectively after receiving entire OTS amountalong with interest, whereas the IDBI hasreceived the entire OTS amount along withinterest and had only entered into an agreementto transfer all the rights, title and interest in theFinancial Assistance/ Financial Instruments andthe underlying securities in respect thereof to theApplicant (SBEC Bioenergy) of MA No. 224/BC/2012 but has not executed the deed ofassignment. The Bench also observed that theIDBI, vide their letter dated 7th May, 2012 hasapproached BIFR regarding the execution of theassignment deed in respect of assignment of debtto the applicant (SBEC Bioenergy Ltd.).

(vi) The BIFR by its order dated 22nd June, 2012allowed MA No. 224/BC/2012 and directed thatthe name of Applicant (SBEC Sugar Ltd.) besubstituted for PNB and the name of the Applicant(SBEC Bioenergy Ltd.) be substituted, in place ofIFCI, as the deed of assignment has since beenexecuted.

(vii) In the proceedings held on 17th July, 2012, theHon’ble BIFR directed IDBI to execute the deed ofassignment in favour of the Applicant (SBECBioenergy Ltd.), with respect to the assignment ofits claims against this Company together withsecurit ies and charges in favour of SBECBioenergy Ltd. subject to the various otherdirections stated therein.

(viii) Pursuant to the order passed by AAIFR, Shri U.K.Modi and Shri M.K. Modi have now submittedtheir separate Draft Rehabilitation proposals tothe IDBI.”

(ix) Shri D K Modi had filed 2 Appeals before theAAIFR being Appeal No. 206/2012 and 207/2012challenging the orders dated 22nd June 2012 and17th July 2012 passed by the BIFR. By two ordersboth dated 15th April 2013, the AAIFR has set

aside the orders dated 22nd June 2012 and 17th

July 2012 and remanded the matter back to theBIFR with directions to consider the MA No.s 224/BC/2012 and 226/BC/2012 afresh after hearingShri D K Modi and proceed further in accordancewith law.

(x) Shri U K Modi had also filed an Appeal before theAAIFR, being Appeal No. 178/12 challenging theorder dated 17th July 2012 passed by the BIFR.

(xi) The aforesaid Appeal No. 178/2012 was heard on20th November 2013 and the Hon’ble AAIFR, afterhearing the submissions of the parties, has beenpleased to allow the Appeal, set aside the orderand remanded the matter back to BIFR with thefollowing directions:“Since the order has already been set aside asabove, we make it clear that all the matters beforeBIFR, including MA 224 of 2012 wil l beconsidered by the Board on remand afresh givinga reasonable opportunity of hearing to allconcerned. It is also made clear that all the issuesraised before us in the appeals by the respectiveparties are kept open and will be considered andadjudicated by the Board afresh. In decidingmatters afresh, the Board, needless to mention,will not be influenced by its said earlier orderwhich, as aforesaid was set aside.”The Appeal preferred by SBEC Bioenergy Ltd.before the AAIFR was challenging the wrongfuland arbitrary imposition of conditions on theexecution of Deed of Assignment by IDBI in favourof SBEC Bioenergy Ltd., which has since beenset aside by the AAIFR. In fact, the AAIFR hasclearly stated that all issues raised by SBECBioenergy Ltd. in Appeal No. 178/12 are keptopen and would be agitated before the BIFR.Therefore, in view of the above, it is clear thatSBEC Bioenergy Ltd. and SBEC Sugar Ltd. arethe secured creditors of MIL and continue to be soas assignees of the respective debts of IDBI, IFCIand PNB.Shri M K Modi submits that AAIFR Order dated20th November, 2013 in Appeal No. 178/2012,nowhere recognizes SBEC Bio-energy Ltd. andSBEC Sugar Ltd. as being Secured Creditors ofMIL or the assignments in their favour to be validand/or legal.As per Shri U K Modi, the above contention of ShriM K Modi is incorrect. It is a matter of record thatthe Hon’ble BIFR vide its orders dated 12th

December, 2011 and 19th April, 2012 has alreadyrecognized SBEC Bioenergy Ltd. and SBECSugar Ltd. as MIL’s secured creditor and it is inthis capacity, the applications for substitutionwere moved before the BIFR. By virtue of theorder dated 20th November 2013, the AAIFR hasremanded the matter back to BIFR for freshconsideration.

(ii) Shri M.K. Modi disagrees with the above statements andsubmissions made by Shri U.K. Modi as the same are notcorrect.


Shri M.K. Modi submits that –(a) That the said settlements based on assignment in

favour of one of the Managing Directors of theCompany are neither legal nor binding and are withoutapproval of the Board. The same are also contrary tothe 1989 Modi Family MOU, the agreement betweenthe two Managing Directors, the Board Resolution andthe “Status Quo” order of Hon’ble Supreme Court ofIndia.

(b) Without prejudice to what is stated in para (i) above,assignments and the terms of payment etc. shall begoverned by the directions to be passed by Hon’bleBIFR.

(c) Hon’ble BIFR has, in the proceedings of the hearingheld on 19th April, 2012, already directed IDBI (OA) toassess the liabilities of each unit of the Company(Group wise) and while making an assignment to UKMGroup Companies, to see that the security charged toBanks/FIs belonging to his own units are assigned andthe security belonging to MKM Group is to be freed. Itis thus abundantly clear that the security pertaining tohis own units only is to be charged to SBEC BioenergyLtd and SBEC Sugar Ltd.

(d) By virtue of AAIFR’s orders dated 15.04.2013 :(i) BIFR’s order dated 22.06.2012, whereby SBEC

Bioenergy Ltd. and SBEC Sugar Ltd. weresubstituted in place of IFCI and PNB respectively,has been set aside; and

(ii) BIFR’s order dated 17.07.2012, whereby IDBIwas permitted to execute assignment deed infavour of SBEC Bioenergy Ltd., has been setaside.

(iii) SBEC Bioenergy Ltd. and SBEC Sugar Ltd., thus,have no locus standi in the BIFR proceedings andare not recognized as creditors of MIL by BIFR.

(iv) MKM Group has, without prejudice to their legalcontentions in the matter, already approachedboth IDBI and IFCI for making payment of thedues pertaining to the six units undermanagement and control of Shri M.K.Modi onassignment basis subject to certain conditions.Shri U.K. Modi disagrees with the abovestatements and submissions made by Shri M.K.Modi as the same are not correct. Shri. U.K Modihas commented as below:-It is clarified on the submission made by Shri M.KModi that the Hon’ble BIFR vide its order dated12.12.2011 had directed IDBI (OA) to invite thesecured creditors including SBEC Bioenergy Ltd.and SBEC Sugar Ltd. for discussions beforefinalizing any DRS. By a subsequent order dated19.04.2012, the Hon’ble BIFR has also directedthat SBEC Bioenergy Ltd. and SBEC Sugar Ltd.be heard and consulted by IDBI (OA) whilepreparing the DRS. Therefore it is absolutelyclear that SBEC Sugar Ltd. and SBEC BioenergyLtd. are secured creditors of MIL. This order of12.12.2011 has not been challenged by any partytill date and therefore the issue stands settled bythe BIFR . In so far as the remand of the MAs is

concerned, it is clarified that the matter has beenremanded by Hon’ble AAIFR only on the groundthat Shri D K Modi be heard on the application.The setting aside of the orders dated 22.06.2012and 17.07.2012 are on a technical ground and noton merits therefore the allegations that SBECSugar Ltd. and SBEC Bioenergy Ltd. do not haveany locus standi in the BIFR proceedings or thatthey are not secured creditors are absolutelyincorrect and baseless.Thus as per Shri U.K. Modi, these liabilities willnow be quantified with the assignees of PNB,IDBI and IFCI debts.Shri M.K. Modi disagrees with the abovestatements and submissions made by Shri U.K.Modi as the same are not correct. As the matterstands today, orders dated 22.06.2012 and17.07.2012 stand set aside by Hon’ble AAIFR andfresh order is required to be passed by Hon’bleBIFR. Hence, these orders do not give rise to anyright/obligation to any party.Shri U.K. Modi disagrees with the abovestatements and submissions made by Shri M.K.Modi as the same are not correct. Though it iscorrect to say that the orders dated 22.06.2012and 17.07.2012 has been set aside by Hon’bleAAIFR but it is incorrect to say that SBEC Sugarand SBEC Bioenergy are not the securedcreditors of MIL as the order dated 12.12.2011clearly recognizes SBEC Sugar and SBECBioenergy as a Secured Creditor. Hon’ble AAIFRhas directed BIFR to conduct a rehearing on theM.A’s 224 and 226 of 2012 allowing thesubstitution of SBEC Sugar and SBEC Bioenergyin place of PNB and IFCI.As per Shri M.K.Modi the above contention of ShriU.K. Modi is incorrect.Shri U.K. Modi submits that IDBI vide its letterdated 16.01.2015 again reiterated in unequivocaland unambiguous terms that their debt due fromMIL has been assigned in favour of SBECBioenergy Ltd on 06.10.2007.Shri M.K. Modi stated that there is no agreementbetween Shri M.K.Modi and Shri U.K.Modi on thisissue.

6. With respect to the rehabilitation scheme of the Company, theviews of both the Managing Directors are as below:-Shri M.K.Modi stated that:-As reported last year, Shri M.K. Modi had filed a Special LeavePetition before the Supreme Court of India on 27th July, 2010challenging the order dated 19th May, 2010 of Hon’ble DelhiHigh Court. The Hon’ble Supreme Court vide its order dated27th August, 2010 held that “the parties are directed to maintainstatus quo with regard to the management of the Company,but we make it clear that this will not in any way affect theproceedings pending before the Board for Industrial andFinancial Reconstruction and also the Appellate Authority(AAIFR).”Pursuant to the order dated 22nd June, 2011 passed by Hon’bleAAIFR, Shri M.K.Modi and Shri U.K.Modi had submitted their


separate Draft Rehabilitation proposals to IDBI (OA).Subsequently, BIFR has heard the matter on various datesand passed directions from time to time. The Operating Agency(IDBI) had submitted a DRS to BIFR in July, 2013. which isunder consideration of BIFR.As per Shri M.K. Modi the said DRS had been gone throughby BIFR Consultant, who wanted some technical correctionsto be carried out therein, which were duly carried out by IDBI(OA) and the revised DRS was submitted to BIFR by the O.A.Shri U.K. Modi disagrees with the above statement made byShri M.K Modi. It is hereby clarified that the DRS received inJune, 2013 was returned by Hon’ble BIFR with a direction tothe IDBI (OA) to revise the said DRS after updating thefinancials from MIL. Subsequently a revised DRS wascirculated by OA which was not acceptable. Thereafter the OAhad filed two reports on 06.09.2013 and 04.10.2013 pursuantto the meeting held with all the promoters of MIL on 12.08.2013.In the said report OA informed the BIFR that only workablesolution for revival of MIL is through sale of all unproductiveassets (including Modi Bhawan) and the Company’s net worthwould become positive thereafter.Shri U.K. Modi further submits that:-Shri U K Modi vide letter dated 25th June 2013, had informedthe Operating Agency – IDBI (OA), that the continued disputesamong family members has not only led to the delay inrehabilitation of the Company, but have also adversely affectedthe growth of the Company.The basic objective of the OA is to formulate a scheme for therehabilitation of the Company and not to settle family disputes,and as such it is humbly requested that the OA should ratherconcentrate on the rehabilitation of the Company, leaving thefamily settlement to courts.Shri U. K Modi reiterated that rehabilitation scheme beformulated for the Company as a whole without any split, andwith the conditions that the proceeds from sale of surpluscorporate assets are utilized for paying all the liabilities of theCompany i.e. Secured and Unsecured Loans, pressing andStatutory Liabilities of the Company be fully discharged andno amount shall be distributed among any Units.Shri U K Modi further clarifies that in the hearing held beforethe BIFR on 18th July 2013, the Board informed all the partiesthat it had directed IDBI to circulate the DRS to all stakeholdersand conduct joint meeting of stakeholders vide their letter dated16th July, 2013. Pursuant to this direction, a meeting of theManaging Directors and Shri D K Modi was called by IDBI on12th August 2013 at IDBI Towers, Mumbai.In the joint meeting held at IDBI Towers in Mumbai on 12th

August 2013, Shri U K Modi submitted another letter of evendate and reiterated his proposal that the distribution ofproceeds without payment of liabilities would be unethical andcan be construed as siphoning of funds out of the Companyand the issue regarding division of assets of the Companyshould be left to Civil Courts.Shri. M.K Modi submits that:-The contents of Shri U.K. Modi’s letters dated 25.06.2013 and12.08.2013 travel beyond BIFR’s orders and as being againstthe 1989 Modi Family MoU, 2006 Agreement of Shri U.K. Modiwith Shri M.K. Modi, Shri U.K. Modi’s own earlier stand beforevarious Forums including his own case filed before Hon’ble

Delhi High Court in 1998 which is still pending and the ordersof Hon’ble Supreme Court of India in the matter.Shri M.K. Modi agrees that basic objective of Operating Agencyis to formulate a Scheme for rehabilitation of the Company.The OA has in fact prepared such a scheme and submittedthe same to BIFR. Shri M.K. Modi disagrees with Shri U.K.Modi’s proposal to formulate a rehabilitation scheme withoutsplit as being a self serving and mala-fide suggestion of ShriU.K. Modi.Shri U.K. Modi disagrees with the above statements andsubmissions made by Shri M.K. Modi as the same are notcorrect.Shri M.K Modi disagrees with the above statements andsubmission made by Shri U.K. Modi as IDBI (OA) has alreadysubmitted the minutes of meeting to BIFR as well as to thethree Modi’s and final DRS has also been submitted by IDBI(OA) to BIFR.Shri U.K Modi further submits:Subsequent to the said meeting held in Mumbai on 12.08.2013,Shri U K Modi submitted an email to IDBI on 23.08.2013acknowledging receipt of DRS which has been filed by IDBIon 09.07.2013 as was mentioned during the meeting of thestakeholders in order to enable him to share comments on thesame. By this email, it was further reiterated that Shri U KModi will be supporting a scheme as a whole without any splitwith the condition that the proceeds from sale of surplus assetswould be utilised for payment all liabilities of the Companyand no amount is distributed to any member of any group.By a letter dated 06.09.2013, IDBI informed the BIFR aboutthe outcome of the joint meeting held on 12.08.2013 in Mumbai.IDBI (OA) informed the BIFR that due to extreme polarizedsituation between the 2 fractions, there was no consensus onthe DRS. However, IDBI in its letter took note of the fact thatan acceptable DRS would be possible if the disputes anddifferences between the various promoter groups are resolved.Therefore, IDBI was well aware of the fact that a DRS ispossible to revive MIL by sale of assets which did not involveany adjudication of disputes inter-se the promoter groups.By another letter dated 04.10.2013, IDBI (OA) had categoricallyinformed the BIFR that the only workable solution for revivalof MIL is sale of all unproductive assets (including ModiBhawan) and the Company’s net worth would become positive.Upon the net worth becoming positive, the Company wouldbe de-registered from BIFR and the civil disputes can be settledoutside the purview of BIFR.In the hearing held before the Hon’ble BIFR on 22.10.2013,representative of IDBI (OA) reiterated its recommendation onDRS vide their letter dated 04.10.2013 and submitted that theonly viable solution to revive the Company would be by sale ofall unproductive assets including Modi Bhawan. Since the letterof 04.10.2013 was not circulated by IDBI (OA) to all the partiesincluding Shri U K Modi, the counsel for Shri U K Modi as wellas MKM and DKM requested the Bench to direct IDBI tocirculate the report / letter dated 06.09.2013 and 04.10.2013so as to enable them to comment on the same and requestedfor a short date to file their respective reply. The Bench agreedto issue the necessary directions in that regard and expressedits views that a final opportunity would be given to commenton the recommendations of IDBI (OA) and finally argue thematter.


The order of BIFR dated 22.10.2013 did not correctly reflectthe minutes of proceedings that actually transpired during thehearing held on 22.10.2013. During the said hearing, on thebasis of submissions of all parties, the BIFR had agreed togive time to the counsels for all the promoter groups to finallyargue the matter on the next date of hearing. The Board hadalso agreed to give time to the parties to file their respectivereplies to the report / letter dated 04.10.2013. However, thesame did not find any mention in the order dated 22.10.2013,rather the order records that the Bench decided to reserve theorder.On 28.10.2013, the BIFR passed an order, inter-alia, holdingthat the Company is not likely to make its net worth exceed itsaccumulated losses within a reasonable time while meetingall its financial obligations as a result whereof it is not likely tobecome viable on a long term basis. Hence, it would be just,equitable and in public interest that the Company be woundup u/s 20(1) of SICA. The Board therefore issued a show causenotice to the Company in this regard and also gave finalopportunity to the Company, the present promoters or aregistered Workers Industrial Co-operative Society (WICS) oran outsider to submit a fully tied up proposal with or withoutOTS and with or without co- promoters, to the OA, within 30days from the date of this order.Pursuant to the order dated 28.10.2013, the Bench Officer ofBIFR has published an advertisement on 09.11.2013 in Timesof India in relation to the notice under Section 20 (1) of theSICA and BIFR Regulations for proposed winding up of MIL,thereby inviting shareholders, creditors and others to file theirrespective objections or suggestions with the Registrar.Shri U K Modi has preferred an Appeal before the AAIFRchallenging the order dated 28.10.2013 passed by the BIFR.The said Appeal has been registered as Appeal No. 142 of2013. By an order dated 27.11.2013, the AAIFR has beenpleased to pass an unconditional stay of operation of orderdated 28.10.2013. By subsequent orders dated 18.12.2013,09.01.2014, 10.02.2014, 05.03.2014, 20.05.2014, 05.11.2014,09.01.2015, 06.02.2015, 16.03.2015, 27.03.2015, 01.05.2015and on 20.05.2015 the interim order has been directed tocontinue. It may be pertinent to note that Shri M K Modi hasalso filed two separate Appeals being Appeal No. 11/2014 and22/2014 challenging the orders dated 22.10.2013 and28.10.2014 respectively, which are also listed for hearing onthe same date. On the Appeals filed by Shri M.K. Modi also,AAIFR has granted an unconditional stay upto the next dateof hearing.Shri U.K. Modi submits:The appeals filed by Shri U.K. Modi, Shri M.K. Modi and ShriD.K. Modi were last listed on 27.03.2015 before the Hon’bleAAIFR. On the said date of hearing, the counsel for BhartiyaKisan Union, Mazdoor Congress Modi Steels and KaramchariSangh Modi Steels entered appearance. The Hon’ble AAIFRagreed to hear the counsel for the abovementioned unionsbefore finally deciding all the appeals.However, Shri M.K.Modi states that no such order / directionwas passed by the Hon’ble AAIFR.Shri U K Modi submits that even though the same is notreflected in the said order, but he was informed by his counselswho were present during the course of hearing that during the

course of hearing on 06.02.2015, 13.03.2015, 16.03.2015,27.03.2015, 01.05.2015 and 20.05.2015, the bench hadagreed to hear the all the parties including the counselrepresenting Bhartiya Kisan Union, Mazdoor Congress ModiSteels and Karamchari Sangh Modi Steels whose presence isrecorded in all the above mentioned orders.Shri M.K. Modi stated that there is no agreement betweenShri M.K.Modi and Shri U.K.Modi on this issue.Hon’ble AAIFR had, in its hearing held on 09.10.2015 directed“all the concerned Respondents to file replies to the Appealswhich will include comments on the OA’s reports as well asthe views/comments on the viability or otherwise of the DRSprepared by OA in the year 2013 along with the alternativesuggestions for revival or otherwise of the sick company, ifany, within 2 months.”Pursuant to the above, all the Respondents filed theircomments and alternative suggestions in compliance of theabove directions. The matter was last heard by AAIFR on05.08.2016 and the next date of hearing is yet to be notified.

7. With respect to the Contempt Application (M.A No. 412/2013)filed before Hon’ble BIFR by Shri M.K.Modi , the views of boththe Managing Directors are stated as below:-Shri M.K.Modi stated that:-Shri U.K. Modi has violated BIFR’s injunction order dated11.04.2013 for which Shri M.K. Modi has filed M.A.No.402/2013 before the BIFR. The BIFR has issued notice on theapplication on 12.08.2013 and also directed status quo withregard to the property in question, viz. Land belonging toMIL(Steel Division) leased out to G.S.Pharmbutor Pvt. Ltd. videlease deed dated 31.05.2013.Shri U.K. Modi disagrees with the above allegations andstatements made by Shri M.K. Modi as the same are notcorrect. Shri U.K Modi has commented as below:-There has been no violation of any order of BIFR as there hasbeen no transfer of any asset. It is relevant to state that thesame portions of the land have been leased out since 1995 tovarious group companies of Shri U.K Modi. This was muchprior to the BIFR order dated 11.04.2013 when direction wereissued by the BIFR under Section 22A directing parties notdispose of, alienate or part with possession of the property.The lease rental recovered has been utilised to pay thestatutory liabilities of the Steel Division of MIL and also to repayloans taken for payment of the statutory liabilities and variousother dues including electricity charges, water charges,maintenance of roads, etc. that arose owing to workers andlabourers of the Steel Division residing in the quarters of theSteel Division. The lease deed was initially executed pursuantto an understanding between the Steel Division and the variouslabour Unions relating to the settlement of their dues in orderto avoid a law and order situation and to maintain peace in thearea. In this context, Shri U.K Modi refers to the variousagreements entered into with the labour unions of the SteelDivision where under the Company has agreed to employ thechildren of the workers/ labourers of the closed Steel Divisionin any new venture that is set up, depending on their skill,ability and talent. The labour unions have entered into theseagreements to secure the future interest of their children whowould be offered employment. Shri M.K Modi has filedM.A.No.402/2013 before the Hon’ble BIFR making these


Liability to be recognised inBalance sheet

allegations only to pressurize the management in particular,Shri. U.K Modi to accept his terms relating to the draft schemeto be submitted to BIFR. The matter is still pending before theHon’ble BIFR. Shri U.K Modi has sought time to file a reply tothe application filed by Shri M.K Modi. Shri U K Modi will file adetailed response to the said MA. In any event, the statementsand contentions made in these Notes on Accounts are notexhaustive and detailed objection will be read in the reply tothe MA. It is important to note that Shri M.K Modi had himselfentered into a perpetual lease agreement for certain portionof closed Soap Factory (1584 sq. mtrs.) with his groupCompany M/s Weld Excel India Limited.Shri M.K. Modi disagrees with the above statements andsubmissions made by Shri U.K. Modi as the same are notcorrect as various parts (not the same portions) of the landhave been leased out by Shri U.K. Modi to his privatecompanies. Area leased to TC Healthcare Pvt. Ltd. was8,231.56 Sq. Mtrs. and the area leased to G.S. PharmbutorPvt. Ltd. is 12,531 Sq. Mtrs. The space of closed soap factoryhad been leased out to Weld Excel India Limited much afterthe perpetual lease agreements executed by Shri U.K. Modiwith his group companies namely; TC Healthcare Pvt. Ltd. on05.12.2002 and Modi Revlon Pvt. Ltd. on 01.10.2005 and therewas no restraint order operative at that time.Shri U.K. Modi disagrees with the above statements andsubmissions made by Shri M.K. Modi as the same are notcorrect.As per Shri M.K. Modi, the above contentions of Shri U.K.Modi are factually incorrect.

8. In view of clear cut delineation of responsibilities of the twoManaging Directors of the Company, the accounts of twodivisions of six units and three units of the Company are beingprepared and finalized independently and accordingly ShriM.K.Modi and Shri U.K.Modi are certifying the accounts asrelate to the two divisions of the Company i.e six units andthree units respectively, the management whereof is lookedafter by them.

9. The Company has entered into an agreement with U.P. PowerCorporation Limited for its Residential Feeder SC No. 2005on 29th March, 2000. In pursuance of that agreement, theCompany has paid for the existing authorised occupants onlyafter 1st July, 1998 computed prorata based on covered areaof quarters occupied by the employees. In view of the above,no provision has been made for electricity charges of 131.46Lac upto the period of permanent disconnection of residentialfeeder SC No. 2005 i.e. 31st May, 2001 (Previous year 131.46Lac) for the unauthorized occupants and late paymentsurcharge/recovery charges amounting to ` 302.66 Lac upto31st May, 2001 (Previous year ` 302.66 Lac). In accordancewith the agreement, matter regarding waiver of late paymentsurcharge and recovery charges after 1st July, 1998 will bereferred to the Government.

10. ESI authorities had raised a demand on the Company for `64.68 Lac (upto previous year ` 63.51 Lac) (inclusive ofinterest) towards Company’s liability for ESI for the years 1968

to 1986 and no provision has been made against this liability.

11. Modinagar Municipal Committee had determined the basis/liability of house tax payable by the Company for the years1982-83 to 2006-07 at 213.98 Lac. The said liability/demand/basis is disputed by the Company at various levels and hasdeposited `16.51 Lac on account upto 31st March, 2016.Pending final decision of the Court/settlement and after takinginto account the provision/ payment already made by theCompany, there is a net liability of `188.63 Lac (upto theprevious year `188.63 Lac), which has not been provided forin the accounts.

12. Excise duty on uncleared manufactured finished goods andcustom duty in respect of imported goods lying in bond inrespect of Steel Unit amounting to ` 43.09 Lac and ` 24.35Lac respectively is accounted for as and when such goodsare cleared. However, this has no impact on the loss of theCompany.

13. (a) The Company has adopted Accounting Standard 15(Revised) on employees benefits with effect from 1st April,2007 in respect of provision for Gratuity liability.

(` in Lac)As at As at

31.03.2016 31.3.2015

Present value of Obligations 1,075.82 1,133.73Fair Value of Plan Assets - -Net Liability (1,075.82) (1,133.73)Reconciliation of Opening and Closing Balances of ObligationObligation as at beginning of the year 1,133.73 1,227.94Current Service Cost 58.35 60.13Interest Cost 87.86 104.37Actuarial Losses/(Gain) (42.12) (137.01)Benefits paid (162.00) (121.70)Obligations as at the end of the year 1,075.82 1,133.73Expenditure to be recognized during the yearCurrent Service Cost 58.35 60.13Interest Cost 87.86 104.37Expected Return on Plan Assets - -Net Actuarial Losses/(Gains)Recognized during the year (42.12) (137.01)Total expenditure included in “Employees’ Emoluments” 104.09 27.49AssumptionsDiscount Rate (per annum) 8.00% 7.75%Expected rate of Return on Assets (per annum) - -Salary Escalation Rate 7.00% 7.00%

The Company has unfunded scheme for paymentof gratuity to all eligible employees calculated atspecified number of days of last drawn salary dependingupon tenure of service for each year of completed servicesubject to minimum five years of service payable at thetime of separation upon superannuation or on exitotherwise.

(b) (i) The Company has adopted Accounting Standard 15(Revised) on employees benefits with effect from1st April, 2008 in respect of Earned Leave.


(ii) Details in respect of Earned Leave are as under:(` in Lac)

As at As at31.03.2016 31.3.2015

Present value of Obligations 92.25 100.92Fair Value of Plan Assets - -Net Liability (92.25) (100.92)Reconciliation of Opening and Closing Balances of ObligationObligation as at beginning of the year 100.92 114.85Current Service Cost 8.29 8.59Interest Cost 7.82 9.76Actuarial Losses/(Gain) (8.09) (11.54)Benefits paid (16.69) (20.74)Obligations as at the end of the year 92.25 100.92Expenditure to be recognized during the yearCurrent Service Cost 8.29 8.59Interest Cost 7.82 9.76Expected Return on Plan Assets - -Net Actuarial Losses/(Gains) Recognized during the year (8.09) (11.54)Total expenditure included in “Employees’ Emoluments” 8.02 6.81AssumptionsDiscount Rate (per annum) 8.00% 7.75%%Expected rate of Return on Assets (per annum) - -Salary Escalation Rate 7.00% 7.00%14. The Company has not received information from vendors

regarding their status under the Micro, Small and MediumEnterprises Development Act, 2006 and hence disclosurerelating to amounts unpaid as at the year end together withinterest paid/payable under this act has not been given.

15. Government of India has issued guidelines dated 15th January,1987 which requires companies raising resources throughissue of Debentures to create a Debenture RedemptionReserve. The Company has not created such a reserve inview of the accumulated losses.

16. (a) During the year 2010-11, the Distillery Unit of theCompany (Bottler) has entered into an agreement i.e. a“Bottling Agreement (including addendum to bottlingagreement dated 26th April, 2012”) with MI Spirit IndiaPrivate Ltd (MISIP) whereby the parties i.e. bottler andMISIP have agreed to the blending, manufacturing andbottling of the products by the bottler. Bottling agreementinter-alia includes: (i) the bottler shall manufacture theproducts in accordance with the quality standards,standard manufacturing procedures, the process andother specifications laid down by MISIP from time to timeand in such quantities as may be specified by MISIP fromtime to time (ii) the bottler shall procure the materials i.e.concentrates, spirit, flavouring agents, de-mineralisedwater, packages and levels from MISIP or from thesuppliers suggested or recommended by MISIP (iii)products manufacturing by the bottler shall be supplied,dispatched or sold by the bottler as per the purchaseorders procured by MISIP and bad-debts from directindenters supplied on credit upon request by MISIP areto MISIP’s Account (iv) MISIP will be responsible forworking capital financing. Bottler shall open a bankaccount (“ Account” ) which is to be operated jointly bythe bottler and MISIP and all funds in the account shallbelong to MISIP notwithstanding that the account maybe in the name of the bottler (v) MISIP will reimburse themanufacturing expenses and pay manufacturing margin

Liability to be recognised inBalance sheet

(i.e. 10% of the aggregate of the manufacturing expensesas reduced by statutory charges, taxes and duties andselling and distribution expenses) from the above account(vi) all payments received by the bottler for sale ofproducts shall be credited to the account andmanufacturing expenses incurred by the bottler,manufacturing margin shall be reimbursed by MISIP tobottler. Any surplus remaining in the account shalltherefore be paid to the MISIP as fee.

(b) In the opinion of the management, since the productsare being manufactured and sold in the name of thebottler, the purchase invoices in respect of raw material,packing material and consumables and sales invoicesfor the finished goods are being issued in the name ofthe bottler, necessary compliances under various tax lawsare also being done by the bottler and special bankaccount is also in the name of the bottler, the transactionsof the above business of manufacture and sale of “Vodkaand Whisky” have been treated as part of books ofaccount of the bottler and these have been included insales, expenses, assets and liabilities of the bottler asstated in paragraph (c) below.

(c) Balance Sheet and Statement of Profit and Loss of the bottlerfor the financial year ended 31st March, 2016 and 31st March,2015 includes the following items relating to the above activitiesof manufacture and sale of “Vodka and Whisky”:

Balance Sheet( ` in Lac)

Particulars As at As at31st March, 2016 31st March 2015

Sundry Debtors 2,796.50 1,871.91Bank Balances 147.13 132.03Security Deposits 222.53 107.03Closing Stock 826.80 892.39Advance Recoverable 124.48 81.37Total Current Assets 4,117.44 3,084.73Less: Current Liabilities 1,084.55 845.33Credit Balance of MISIP 2, 750.99 3,835.54 2,093.63 2,938.96Net Current Assets 281.90 145.77Recognized as net profit forthe year instead ofmanufacturing margin 281.90 145.77IMPACT OF NET PROFIT NIL NIL

Statement of Profit & Loss( ` in Lac)


Turnover (Net of discount) 8,690.28 3,190.47Other Income 10.32 8,700.60 27.90 3,218.37Excise duty paid 3,226.11 440.12Cost of materials consumed 1,192.75 629.37Change in Inventories (18.89) (125.63)Employees Benefits Expenses 397.27 336.75Finance Costs 8.68 4.16Rates & Taxes 300.95 212.16Sales Promotional Expenses 999.49 296.28Other Expenses 2,312.34 1,279.39Total Expenses 8,418.70 3,072.60Net Profit for the year 281.90 145.77Recognized as net profit for the yearinstead of manufacturing margin 281.90 145.77IMPACT OF NET PROFIT NIL NIL


(d) The Expert Advisory Committee of Institute of CharteredAccountants of India in an almost similar case do notagree with the above mentioned accounting treatment.The opinion is governed by the substance of thetransaction and not by the legal form i.e. sales,purchases, assets and liabilities relating to such businesscontrolled by the brand owners should not be recordedin the books of account of the Company even thoughsupporting vouchers are in the name of the Companyand the correct accounting treatment of the transactionsin the books of account of the Company would be torecognize only the fixed margin/charge received by itrather than to recognize sales and purchases of thebusiness of manufacturing IMFL and also should notrecognize any current asset or liabilities of the saidbusiness in its books of account. Further, the brandowners entitlement paid by the Company should bebooked as a mere cash outflow. Further the ExpertAdvisory Committee had clarified that the opinionexpressed by the committee is purely from the accountingpoint of view without consideration of any implicationthereof, from the point of view of the provisions of TDS/TCS in the Income Tax Act 1961 or any other legal/statutory requirement.

17. Consequent to the losses, the Company had been declared aSick Industrial Company on 14th March, 1991 in terms ofSection 3(1)(o) of the Sick Industrial Companies (SpecialProvisions) Act, 1985. Show Cause Notice issued by BIFR forwinding up pursuant to its order dated 28th October, 2013 hasbeen stayed by AAIFR. Pending final orders of BIFR/AAIFR,the accounts of the Company have been prepared on a goingconcern basis.

18. (a) No provision has been made for penal/delayed/simple/compound interest amounting to ` 37839.07 Lac upto31st March, 2016 (for the year ` 5400.68 Lac) on termborrowings of Financial Institutions and debenturespending final order of BIFR.

(b) Interest payable by Vanaspati Unit of the Company toFinancial Institutions since the date of disbursement ofthe loan on simple rate of interest basis amounts to` 1450.65 Lac upto 31st March, 2016 and the unit holdstotal interest provision of 732.41 Lac as on 31st March,2016 resulting in the short provision of ` 718.24 Lac onsimple interest basis.

(c) The Sugar & Distillery Units of the Company have givena proposal for settlement of their dues with AllahabadBank of ` 227.00 Lac against which an upfront paymentof ` 50.00 Lac has already been made under ‘No LienAccount’ and included under “Other Bank Balances” andto pay the balance amount of ` 177.00 Lac in two equalmonthly instalments after the receipt of sanction fromthe Bank. The shortfall in interest provision amountingto ` 168.84 Lac will be provided in the books of accountin the year of approval of OTS proposal by the Bankwhich is pending.

(d) The Sugar Unit of the Company has not made provisionfor interest/bank charges amounting to ` 3711.21 Lac(for the year 531.20 Lac) on cash credit loan taken fromAllahabad Bank in view of para (c) above.

(e) No provision has been made for interest on Cash Creditamounting to `413.16 Lac (for the year ` 65.13 Lac).Further, response to the proposal submitted to the Bankfor One Time Settlement (OTS) dues is awaited inDistillery Unit in view of para (c) above.

(f) Till 31st March, 2000, simple interest on matured fixeddeposits and interest upto date of maturity was providedin the books of account. With effect from 1st April, 2000,no provision has been made for interest of ` 325.10 Lacupto 31st March, 2016 (for the year ` 13.97 Lac),computed as per past practice, on these fixed depositsin view of a legal opinion received by the Company tothe effect that as per terms and conditions of FixedDeposit Scheme, deposits do not carry any interestbeyond due dates unless these are renewed. Since thesedeposits were never renewed after their due dates assuch, the question of payment of interest after due datesdoes not arise at all. However, as a prudent measure,the provision made of ` 280.85 Lac in the past (net ofpayments) has been retained in the books of account ason 31st March, 2016.

19. (a) The Vanaspati Unit had applied for Sales Tax ReliefExemption to U.P. Government in terms of Section 4A ofU.P. Sales Tax Act. Consequent to rejection, the Companyhas filed a writ petition in Lucknow Bench of AllahabadHigh Court and Court had passed an order dated 21st

February, 2013 that “the writ petition is allowed andimpugned order dated 22nd April, 1992 is quashed. Theopposite parties are directed to reconsider the case ofthe petitioner afresh, after giving personal opportunity ofhearing and pass appropriate orders, in accordance withlaw.” In compliance of High Court order, we had filed anapplication before the Secretary Level Committee(Constituted under Section 4A of the U.P. Trade Tax Act).As the matter is still pending before the authority, noprovision has been made for sales tax liability of` 2,455.78 Lac relating to the period May, 1991 to July,1994 (previous year ` 2,455.78 Lac).

(b) The Vanaspati Unit had preferred an application fordeferment of Sales-tax with effect from July, 1994 underSection 38 of the U.P. Sales Tax Act and the same hasbeen rejected by the State Government. The Companyhas also filed Writ Petition against the rejection andconsequent to the orders of the Court, the recovery ofSales-tax has been kept in abeyance. Accordingly, Sales-tax amounting to ` 440.46 Lac (previous year ` 440.46Lac) relating to the period August, 1994 to March, 1996has not been deposited with the authorities.The above writ petition filed by the Company was listedfor hearing on 2nd May, 2008 at High Court, LucknowBench. The Company had filed an affidavit with the Courtthat BIFR had passed an order dated 26th March, 2008by virtue of which the Bench permitted the CommercialTax Department, Government of U.P. to recover itsoutstanding dues, due after 30th June, 2007. TheCompany had also stated in the said affidavit that theHon’ble Supreme Court of India had affirmed the orderof the BIFR and therefore in view of the said orders ofBIFR as affirmed by the Hon’ble Supreme Court, the said


Writ Petit ion may be dismissed as infructuous.Accordingly the High Court, Lucknow Bench hasdismissed the said writ petition as infructuous.

(c) In accordance with the scheme announced by U.P.Government regarding Waiver of Interest & Penalty onSales Tax, the Distillery Unit of the Company has paidand provided interest during 2005-06 of ` 54.77 Lac i.e.10% of the total interest as per the scheme. No DuesCertificate of Sales Tax authorities is awaited..

20. Operating Leases:The Company has taken following premises and Plant &Machinery on operating lease basis. Disclosure requirement asper AS-19 are as under:

( ` in Lac)Period Year ended Year ended

31.03.2016 30.03.2015

Not later than one year 82.07 82.20Later than one year but notlater than five years 127.63 NilLater than five years Nil Nil

The above includes:(i) During the financial year 2011-12, Gas Unit of the

Company has entered into lease agreement, asamended, with Weld Excel India Ltd. (WEIL), a relatedparty, taking Oxygen filling plant under operating leasefor 2 years non cancelable lease period at monthly rentof ` 1.00 Lac up to 31st December, 2014 which wasextended by one year in 2014-15. During the currentfinancial year, the Company has further renewed thisagreement for One year up to 31st December, 2016 atthe same rent.

(ii) During the financial year 2010-11, Electrodes unit of theCompany has taken office premises in Delhi on subleasebasis from WEIL, a related party, under operating leasefor an initial period of three years as non-cancelableperiod at monthly rent of `4.15 Lac and the lease wasfurther renewed for a period of three years w.e.f. 1st April,2013 at an increase of 15% over the current lease renti.e. ` 4.78 Lac pm. Lease agreement has now beenfurther renewed at reduced rent of `4.15 Lac pm for aperiod of three year w.e.f. 1st April, 2016.

(iii) Electrodes unit of the Company has taken premises foroffice cum guest house cum residence of ManagingDirector in Chattarpur, New Delhi on operating leasebasis and having sharing arrangement with WEIL witheffect from 1st November, 2011 (for a period of two yearsand further extended till 31st December, 2016) at amonthly rent of `1.60 Lac with effect from 1st January,2015 (our share net of recovery from Managing Director).

(iv) 1633 cylinders (Previous year 1633 cylinders) taken fromWeld Excel India Limited on operating lease at a monthlyrent of Rs.45/- per cylinder since 1st June, 2012 for threeyears, has been further renewed for another 5 year w.e.f.1st June, 2015 on same rent.

21. The Distillery Unit declared cessation and lock-out of the Unit

with effect from 19th December, 1991 and 5th January, 1992respectively. The lockout has since been lifted. The U.P.Government, suo moto, has referred the matter to the IndustrialTribunal to decide the legality of the lockout. Pending finaldecision, no provision has been made for wages ` 27.46 Lacfor the lockout period.

22. Provision/payments (including value of perquisites) has beenmade to Managing Directors for the remuneration of `80.68Lac in terms of shareholders resolution, which is subject toapproval of the Financial Institutions.

23. No provision has been made for Earned Leave for Steel Unit-upto 1991-92, amount unascertained.

24. As per Press Release dated 18th January, 2016, the StateGovernment has announced financial assistance on `23.30per quintal of cane which would be linked to average sellingprice of sugar and its by products during 1st October, 2015 to31st May, 2016, which is yet to be announced. The Companyhas estimated and accounted for the above financial assistanceof 1147.70 Lac @ 23.30 per quintal of cane as the Companyis hopeful for issue of notification by the State Government inthis regard. Had the above financial assistance not accountedfor in the books of account, the cost of material consumedand value of closing stock would increase by `1147.70 Lacand `183.60 Lac respectively is resulting in net impact ofincrease in expenses by `964.10 Lac.

25. Allahabad Bank had filed a recovery suit for recovery of 21.41Crores against Modi Industries Limited and others before theDebt Recovery Tribunal (DRT), Lucknow in April, 2005. TheCompany challenged the recovery suit on the grounds thatbank required prior permission under section 22 (1) of the SickIndustrial Companies (Special Provisions) Act, 1985 for filingrecovery suit. Debt Recovery Tribunal, Lucknow, allowedcontinuation of recovery suit against which Company filedappeal with Debt Recovery Appellate Tribunal, (DRAT)Allahabad. The DRAT had stayed further proceedings by DRTin the matter. A writ petition was filed by the Company beforethe Lucknow Bench of Allahabad High Court challenging theorders of the DRT, Lucknow and DRAT, Allahabad. TheLucknow Bench of Allahabad High Court noting the contentionof the Company has disposed off the Writ Petition by its orderdated 18th July, 2008. The Company has filed review petitionagainst the said order seeking the quashing of the AllahabadBank’s suit before the DRT, which is still pending.

26. Previous year’s figures have been regrouped wherevernecessary.

27. No confirmation letters were sent to debtors/creditors. In theabsence of such confirmations, the balances in respect ofSundry Debtors/Creditors, Loans taken/given and Advancesand other accounts are taken as shown by the books ofaccounts and are subject to adjustments and reconciliation, ifany.

28. In view of non-viability of the Vanaspati Unit, which was aseparate business segment as per AS-17, Segment Reporting,the Company declared closure of the Unit with effect from 3rdFebruary, 2003 and prior information, as required under law,was given to the State Government on 4th December, 2002.The closure is consistent with the Company’s strategy to focuson its other viable manufacturing activities.


29. Delhi Excise Authorities issued Show Cause Notices and raiseddemand for `167.43 Lac towards Risk-Purchase of CountryLiquor in view of non-supply of the same by Distillery Unit ofthe Company. Company has disputed the above demand anda Writ Petition was filed before the Hon’ble Delhi High Courtwho ordered the case to be referred back to Collector of Excisefor taking final decision. The Collector of Excise vide its orderdated 27th June, 2003 has confirmed the above demandagainst which the Company has filed a writ petition before theHon’ble Delhi High Court. On the basis of orders of Hon’bleDelhi High Court, the Company has deposited `50.00 Lac tilldate against the above demand. No provision is considerednecessary at this stage since the matter is sub-judice.

30. (a) As on 31st March, 2016, there were 160 Public Depositsamounting to `7.32 Lac which have remained unclaimedand unpaid for a period of more than seven years andinterest accrued but not paid on these unclaimed depositstill the date of maturity amounts to `2.40 Lac. Details ofunclaimed and unpaid debentures for a period of morethan seven years are presently not available.

The Company has filed a return dated 14th June, 2002with the Registrar of Companies duly certified bypracticing Company Secretary stating that the Companyis a Sick Industrial Company as per orders of BIFR dated14th March, 1991 and rehabilitation proposal for paymentin respect of debentures and fixed deposits etc. ispending before the IDBI (as the Operating Agency)/BIFR/AAIFR for consideration. The Company will pay/creditthe amount as per final orders of BIFR/ AAIFR.Accordingly, no amount was credited / paid to Investor’sEducation and Protection Fund till date.

(b) With regard to payment of Fixed Deposits, as per Section74 of the Companies Act, 2013, deposits accepted beforethe commencement of the Act (i.e. 1st April, 2014) shallbe repaid within one year from the commencement ofthe Act. The Company had filed a petition with theCompany Law Board on 31st March, 2015 which hassince been dismissed by Company Law Board vide itsorder dated 21st April, 2016. Against this order theCompany has filed an appeal before Hon’ble High Court,Allahabad on 23rd July, 2016.

31. There has been diminution ‘other than temporary’ of ` 148.80Lac as on 31st March, 2016 (Previous Year ` 149.60 Lac) inthe market value of one of its investments in the GroupCompanies mainly in view of closure of plant for the last threeyears and negative net worth of the Group Company as perbooks of account as on 31st March, 2016. Even though themodified rehabilitation scheme of this group Company is stillunder consideration of the BIFR, provision for diminution of`148.80 Lac has been made in the books of account as on31st March, 2016 as required by Accounting Standard 13 i.e.Accounting for Investments and shown as an ‘Exceptional Item’in Statement of Profit and Loss.

32. Deferred Tax Assets are ` 5852.05 Lac as on 31st March,2016 (Previous year ` 5775.25 Lac) constituting mainly ofunabsorbed depreciation, unabsorbed losses, provision for

doubtful debts, provisions disallowed and interest on term loansdisallowed in Income Tax. Deferred Tax Liabilities is ` 337.56Lac as on 31st March, 2016 (Previous year `353.50 Lac) onaccount of higher depreciation claimed in Income Tax. Onconservative basis as required by the Accounting Standard22, the net Deferred Tax Assets have not been recognizedand position will be re-assessed at next balance sheet date.However, the estimated Deferred Tax Assets and Liabilitiesdetails are given as under:

( in Lac)Description As at As at

31st March, 2016 31st March 2015(a) Deferred Tax Assets :

(i) Disallowances under theIncome Tax Act. 1336.96 1434.25

(ii) Provision for Doubtful Debts 255.81 217.09(iii) Unabsorbed Depreciation 637.77 549.43(iv) Unabsorbed Loss 3621.51 3574.48

Total 5852.05 5775.25(b) Deferred Tax Liabilities:

Related to Fixed Assets 337.56 353.50(c) Deferred Tax Assets (Net) (a-b) 5514.49 5421.75

33. Till 31st March, 2016, certain Quarters of the Company areoccupied unauthorisedly by ex-employees/outsiders. TheCompany has entered into “Agreement to Sell” for 215(Previous year 215), such residential quarters with such parties.Sale consideration amounting to ` 504.50 Lac (Previous year` 504.50 Lac) has been received as interest free advance.These “agreements” clearly stipulates that final sale of suchquarters are subject to approval of Financial Institutions towhom these quarters have been mortgaged and the Companyproposes to seek the same before affecting final sale of suchquarters. Accordingly the sale of such quarters will beaccounted for only on receipt of approval of FinancialInstitutions. Further the Company has been legally advisedthat it can enter into such “Agreements to Sell”.

34. (a) The Steel Unit of the Company has entered into fewleases, including perpetual leases, agreements forcertain portions of the factory land and building 27954.86Sq. Mtrs (Previous year 27954.86 Sq. Mtr.) for whichapproval of financial institutions, to whom the factory landand buildings are mortgaged, is yet to be obtained.However, the Company has been legally advised that itcan enter into such lease agreements. Further, the leasemoney was mainly utilized for payment of workers andstatutory dues.

(b) The Company has entered into a perpetual leaseagreement for certain portion of closed Soap factory, land& building (1584 sq. mtrs.) to a related party. As the saidland and building is mortgaged with the financialinstitutions therefore the Company had sought theapproval of IDBI Limited (the lead financial institution) tothe said transaction vide its letter dated 6th September,2006. Since IDBI Limited did not respond, therefore the


Company again wrote a letter to IDBI Limited on 5th April,2007 requesting for its approval to the said transaction.The Company in the letter under reference alsomentioned that if IDBI Limited does not respond to theCompany’s request, it will be deemed that the Company’srequest has been approved by IDBI Limited and theCompany will go ahead with the said leasing agreement.The IDBI has so far not responded to the Company’sletter.

35. (a) Recovery Certificate (RC) was issued on 1st May, 2004on account of non payment of cane price/commission/interest due to Co-operative Societies for the sugarseason 2003-04. The Hon’ble High Court has stayed therecovery proceedings against the Company subject topayment of dues upto 31st July, 2004. The Company hascomplied with the conditions regarding payment of caneprice and commission on basic SMP upto 31st July, 2004.However, the Company has disputed the payment ofinterest of `142.00 Lac and recovery charges of `236.00Lac in the Hon’ble Allahabad High Court which is stillpending. On consideration of prudence, the Companyhas made provision for interest of Rs.142.00 Lac duringthe year 2004-05.

(b) Recovery Certificate (RC) was issued on 18th March, 2008on account of non payment of cane price/commission/interest due to Co-operative Societies for the sugarseason 2007-08. The above RC also includes recoverycharges of `413.50 Lac which has not been provided forin the books of account.

(c) Recovery Certificate (RC) was issued on 20th April, 2011on account of non-payment of cane price/commission/interest due to Co-operative Societies for the sugarseason 2010-11. The above RC also includes recoverycharges of `268.25 Lac which has not been provided forin the books of account as stay granted by Hon’bleAllahabad High Court.

(d) Recovery Certificate (RC) was issued on 10th August,2007 on account of non payment of cane price/commission/interest due to Co-operative Societies forthe sugar season 2006-07. The above RC also includesinterest of `340.66 Lac upto 7th August, 2007 on caneprice/ commission payable to societies and recoverycharges of `426.95 Lac which has not been provided forin the books of account. As per the Interim Order dated27th February, 2008 of Hon’ble Supreme Court, there shallnot be any recovery charges or interest for delayedpayment at this stage.

(e) Recovery Certificate (RC) was issued on 21st February,2014 on account of non payment of cane price/commission/interest due to Co-operative Societies forthe sugar season 2012-13. The above RC also includesinterest of `1246.58 Lac and recovery charges of `450.79 Lac. No provision has been made for recovery

charges in the books of account. Hon’ble Allahabad HighCourt vide its order dated 16th April, 2014 has stayed therecovery charges of ` 278.99 Lac. Further the Companyhas paid interest on cane arrears.

(f) Recovery Certificate (RC) was issued on 23rd June, 2014on account of non payment of cane price/interest due toCo-operative Societies for the sugar season 2013-14.The above RC also includes interest of `803.85 Lac andrecovery charges of 1704.67 lac. No provision has beenmade for recovery charges in the books of account.

Further as per Press release dated 22nd May, 2015 issuedby Chief Secretary, Sugar Industry and CaneDevelopment Department, U.P. Government, interest oncane arrears for the sugar season 2013-14 are beingwaived off. State Government Notification in this regardis awaited. In view of the above pending issue ofNotification, the Company has not provided interest of` 2138.58 Lac as the Company expects issue ofNotification ultimately.

(g) Recovery Certificate (RC) was issued on 20th August,2015 on account of non-payment of cane price/interestdue to Co-operative Societies for the sugar season 2014-15. No provision has been made for recovery charges of` 1703.95 Lac in the books of account.

Further no provision for interest of `2010.87 Lac for theperiod upto 31st March, 2016 for the sugar season 2014-15 has been made as the Company expects waiver offthe same.

(h) No provision for interest for the period upto 31st March,2016 of `341.88 Lac for the Sugar Season 2015-16 hasbeen made as the Company expects waiver off the same.

(i) In view of Government Notification No. 4/2015,620S,chiU.Anu-I-2015-1607/2004, Lucknow dated 12th June,2015, commission on cane purchase for crushing season2012-13 is reduced from ` 5.10 per quintal to ` 2.00per quintal resulting in Refund of ` 249.18 Lac which isshown as ` Exceptional Item’ in the statement of Profit &Loss.

36. In the recent past, the Arc Electrode Industry in the countryhas been facing stiff competition from international playerswho entered Indian market and started aggressive publicity tocapture it. This resulted in adverse impact on domesticcompanies. To cope with the treat, the Electrode Unit of theCompany has also undertaken publicity campaign throughadvertisement in Newspapers/banners, calendars etc. incurrent year also.

Further, we give below figures on advertisement during lastfour years:2012-13 ` 381.34 Lac2013-14 ` 281.64 Lac2014-15 ` 154.74 Lac2015-16 ` 115.64 Lac


37. The following are the particulars of dues on account of sales tax, excise duty, income tax and others as at 31st March, 2016 that havebeen disputed by the Company in appeals pending before appellate authorities.

Name of Nature of the dues Amount of Amount Period to which the Forum wherestatute dues deposited amount relates disputes is pending

(` Lac) underprotest(` Lac)

U.P.VAT Act VAT Tax, Penalty, 2584.59 5.98 1987-88, 1990-91 & Allahabad High Court.Interest, Exemption 1991-92, May 91 toto New Units. March 96VAT Tax and Penalty @ 345.78 123.04 1982-83 to 1986-87, Commercial Tax

1988-89, 1992-93, Tribunal, Ghaziabad2001-01 to 2001-022007-08

VAT Tax and Penalty 455.26 254.28 1986-87, Jt.Commr.(A), Ghaziabad.1994-95 to1999-2000

VAT Tax 0.12 - 2005-06 Dy. Commr. (Assessment),Modinagar.

Penaliy under Vat Tax 4.37 0.45 2008-09 Trade Tax Tribunal, Ghaziabad.Gaziabad.

Central Central Sales Tax 162.09 16.10 1985-86, 1988-89, Commercial Tax Tribunal,Sales Tax 1992-93, Ghaziabad.Act 1999-2000 to

2000-01Central Sales Tax 51.04 20.30 1994-95 to 1996-97 Joint Commissioner

Sales Tax,Ghaziabad

Central Sales Tax 1.01 - 2005-06 Deputy Commissioner (A),Modinagar

State Sales State Tax 10.56 0.20 1992-93 Addl.Commr. Sales Tax,Tax Act Delhi.

Sales Tax 5.97 2.00 1985-86, 1997-98, State Tax2002-03, 2004-05 &2005-06

Sales Tax 0.82 0.05 2014-15 State TaxPenalty (HGST) 0.30 - 1991-92 Tribunal Sales Tax,

Chandigarh.State Tax 15.79 1.79 1989-90 to 1993-94, Dy.Commr. (A), States

1998-99 and 2006-07Central Sales Central Sales Tax 1.92 0.29 1988-89 to 1992-93. Appellate Authority/DCTax Act (States) (Appeals) DelhiCentral Excise Custom Duty *43.91 - 1.3.2001 to 25.4.2001 Civil Court Ghaziabad & Custom Act

Excise Duty 0.70 - 2002-03 and 2003-04 Supreme Court of IndiaExcise Duty 77.67 - 2008-09 to 2013-14 Commissioner (Appeals)

MeerutExcise Duty 167.43 50.00 1985-86 Delhi High Court

0.49 0.25 2004-05 Allahabad High Court0.74 0.20 1996-97 Commissioner of Central

Excise, Ghaziabad**169.17 - February 1981 to CESTAT

February, 1987,2002-03 to 2010-11

5.00 - Information not Information not available.available.

6.34 6.34 2009 onwards Supreme Court of IndiaIncome Tax Penalty 209.59 - 2007-08 and 2008-09 CIT (appeal) New Delhi

@ Provided for 82.60 Lac in the Accounts* Provided for in the Accounts** Provided for 32.20 Lac in the Accounts


38. RELATED PARTIES DISCLOSURE01 Entities under the Control of the Company :

Subsidiaries :Own Investment (India) LimitedYour Investment (India) Limited

02 Key Management Personnel :Shri Mahendra Kumar Modi Managing DirectorShri Umesh Kumar Modi Managing Director

03 Other Related Parties with whom the Company had transactions etc :Enterprises over which the Key Management Personnel and their relatives are able to exercise significant influence:

Modipon LimitedAshoka Mercantile LimitedWeld Excel India LimitedModi Paint Pvt. Ltd.Bihar Sponge Iron LimitedSBEC Bio-energy LimitedSBEC Sugar LimitedModerate Leasing & Capital Services LimitedModi Hitech India LimitedTechnicast Engineers LimitedSBEC System India LimitedModi Mundipharma Pvt. LimitedWin-Medicare Pvt. LimitedModi Motors Private LimitedModi Illva India Pvt. Ltd.Modi Line Travel Services Pvt. Ltd.Modi Revlon Private LimitedModi Senator (I) Pvt. LimitedJayesh Tradex Pvt. LimitedA to Z Holding Pvt. LimitedH.M. Tubes & Containers Pvt. Ltd.

04 Disclosure of transactions between the Company and related parties and the status of outstanding balances as at31st March, 2016:

(A) Transactions with the enterprises over which the Key Management Personnel and their relatives are able to exercisesignificant influence:

( ` in Lac)Year

2015-16 2014-15Sale of Goods

SBEC Sugar Limited 31.02 5065.37 Weld Excel India Limited 41.30 43.76 Modipon Limited - 0.20 Modi Paint Pvt. Limited 3.97 - Modi Illva India Pvt. Limited 0.22 -

76.51 5109.33Purchase of Goods/Raw Materials

Weld Excel India Limited 574.98 1233.09 SBEC Sugar Limited 473.41 478.49 Jayesh Tradex Pvt. Limited 4.13 4.34 Modi Hitech India Ltd. 6.20 12.22 Modi Revlon Pvt. Ltd. 8.13 10.19 H.M. Tubes & Containers Pvt. Ltd. - 21.99 Win Medicare Pvt. Ltd. 0.25 -

1067.10 1760.32

Particulars


Purchase of Assets - 1.77Rental Income

Win Medicare Pvt. Ltd. (Foot Note No. 10) 62.21 67.33 Weld Excel India Limited (Foot Note No. 3) 18.93 17.67 Modi Motors Pvt. Ltd. 12.00 12.00 Modi Mundipharma Pvt. Ltd 9.36 10.93 SBEC Sugar Limited 0.26 2.16 Moderate Leasing & Capital Services Ltd.(Foot Note No. 8) 0.91 - Modi Revlon Pvt. Ltd. 0.36 0.36 Jayesh Tradex Pvt. Ltd. 0.32 0.88 Shri Mahendra Kumar Modi 5.76 4.72 Modi Illva India Pvt. Ltd. 0.58 2.29 Others 0.33 0.33

111.02 118.67Interest Income

Ashoka Mercantile Ltd. (Foot Note No. 7) 71.18 78.89Payment of Lease Rent

Weld Excel India Limited (Foot Note No.2, 5 & 6 ) 86.98 85.85 SBEC Bio-energy Ltd. (Foot Note No. 9) 3.49 -

90.47 85.85Expenses reimbursed

Weld Excel India Limited 26.19 22.52 Others. 0.45 0.48

26.64 23.00Interest paid on Loan taken

Moderate Leasing & Capital Services Pvt. Ltd. 797.74 688.51 Weld Excel India Limited 0.54 -

798.28 688.51Expenses realized

Weld Excel India Limited (Foot Note No.3) 2.95 3.10 SBEC Sugar Limited - 3.41 Shri Mahendra Kumar Modi, 1.26 1.32

4.21 7.83Loan and Advances taken

Moderate Leasing & Capital Services Ltd. 489.32 313.66 Weld Excel India Limited 45.00 -

534.32 313.66Royalty Fee received

Weld Excel India Limited (Foot Note No. 4) 4.45 7.34Commission paid for sale promotion

Ashoka Mercantile Ltd. 1.85 5.75Receiving of Services

Modi Line Travel Services Pvt. Ltd. 12.48 21.08Refund received against Loans & Advances Recoverable

Modipon Ltd. 0.37 4.38Refund of Security deposits given

Ashoka Mercantile Ltd.(Foot Note No.7) 69.50 130.20Refund of Loan and Advance

Moderate Leasing & Capital Services Ltd. 1745.09 1593.02

Particulars

( ` in Lac)Year

2015-16 2014-15


(B) Balances outstanding at the year end:Interest recoverable Ashoka Mercantile Ltd.(Foot Note No. 7) 64.07 71.00

Amount recoverable Good 24.54 23.58 Doubtful 3.78 3.78

Security deposit to Weld Excel India Ltd. Against Cylinders (Foot Note No. 5) 32.66 32.66 Against Oxygen Filling Plant (Foot Note No. 7) 4.00 4.00

Security deposit recoverable for quarters Ashoka Mercantile Limited (Foot Note No. 7) 798.30 867.80 Modipon Limited 147.63 147.63

Sundry Debtors SBEC Sugar Limited 220.82 1380.06 Modipon Limited - 0.12

Amount payable Weld Excel India Limited 323.15 248.53 Modi Revlon Pvt. Ltd. 17.58 10.05 H.M. Tubes & Containers Pvt. Ltd. - 16.99 Others 13.72 18.02

Unsecured Loan taken Outstanding A to Z Holding Pvt. Ltd. 24.89 24.89 Moderate Leasing & Capital Services Ltd. 2888.65 3646.04 Weld Excel India Limited 45.00 -

(C) Payment to the Key Management Personnel:( ` in Lac)

Year2015-16 2014-15

i) Managerial Remuneration Shri Mahendra Kumar Modi 18.00 18.00

ii) Amount recoverable from Managing DirectorShri Mahendra Kumar Modi (Recovered subsequently) - 0.49

iii) Amount payable to Managing DirectorShri Mahendra Kumar Modi 0.01 -

iv) Amount payable (for gratuity) 3.35 3.35

Foot Notes :1. The above excludes amount payable/receivable to/from related parties in the books of Steel Unit in view of non-incorporation of

Balance Sheets for these years on account of non-availability of opening audited balances as on 01.04.1993.2. During the financial year 2010-11, Electrodes Unit of the Company has taken office premises in Delhi on sublease basis from

Weld Excel India Limited (WEIL), a related party, under operating lease for an initial period of three years as non-cancelableperiod at monthly rent of ` 4.15 Lac and the lease was further renewed for a period of three years w.e.f. 1st April, 2013 at anincrease 15% over the current lease rent i.e. `4.78 Lac per month . Lease agreement has now been further renewed at reducedrent of `4.15 Lac per month for a period of three years w.e.f. 1st April, 2016.

3. Electrode unit of the Company has taken premises for office cum guest house cum residence of Managing Director in Chatarpur,New Delhi on operating lease basis and having sharing agreement with WEIL with effect from 1st November, 2011 (for a periodof two years and further extended till 31st December, 2016) at monthly rent of `1.60 Lac with effect from 1st January, 2015 (ourshare net of recovery for Managing Director). The Company is legally advised that sharing of lease/rent between related partyare not covered under the provisions of related party transactions specified under section 188 of the Companies Act, 2013.

Particulars

( ` in Lac)Year

2015-16 2014-15

Particulars


4. Electrode Unit of the Company had entered into a trade mark license agreement with WEIL with effect from 1st May, 2009 (forthe period five years and further extended on 1st May, 2014 for next six years) wherein the right to use MODI’s trade mark, logoand brand for arc welding filler metals and welding equipments was given to WEIL at a royalty of 1% of the net sale price.

5. 1633 Cylinders (Previous year 1633 cylinders) taken on operating lease at monthly rent of `45.00 per cylinder since 1st June,2012 for three years has been renewed for five years w.e.f. 1st June, 2015 on same rent. Approval of shareholders would beobtained at the ensuing Annual General Meeting.

6. Oxygen Filling Plant taken on operating lease for 2 years (non-cancelable) on 1st January, 2012 at again monthly rent of `1.00Lac was renewed for period of one year from 1st January, 2015 to 31st December, 2015. Lease period subsequently extended forone more year w.e.f. 1st January, 2016 at the same rent at monthly rent of `1.00 Lac.

7. Unsecured Security deposits amounting to `798.30 Lac (Previous year `867.80 Lac) given during May, 2011 against temporarypossession of 43 (Previous year 47) houses in Modinagar on which interest charged @ 8.50% with effect from 1st April, 2014.

8. Leave and License Agreement entered into with Moderate Leasing and Capital Services Limited for eleven months on 3rd

November, 2015 for rent of `16,200/- per month plus Service Tax.9. DG Set taken on operating lease at monthly rent of `67,000/- for a period of five years with effect from 2nd November, 2015.

Approval of Shareholders would be obtained at the ensuing Annual General Meeting.10. Lease agreement for house w.e.f. 15th March, 2016 for eleven months at monthly rent of `8,000/-. Approval of Shareholders for

the agreement would be obtained at the ensuing Annual General Meeting.39. Undertakings given to Financial Institutions on behalf of Lords Chloro Alkali Limited, Modi Rubber Limited and Bihar Sponge Iron

Limited:(a) To procure funds jointly/severally with other promoters to meet any shortfall in the resources of the Company for completing

their projects and/or for working capital. The funds made available/to be made available can only be withdrawn with the priorapproval of Financial Institutions and shall not involve any charge or lien on the assets of the said Companies.

(b) That the Company shall not transfer, assign, pledge, hypothecate or otherwise dispose of in any manner it’s holding in theircapital without Institutions’ prior approval in writing.

40. Deferred credit including liability for interest payable for unexpired period have been guaranteed by the Bankers of the Companyagainst hypothecation of Gas Cylinders and Machinery purchased under the Scheme in Steel Unit.

41. Impairment of fixed assets, if any, as per Accounting Standard AS-28 i.e. impairment of assets has not been ascertained in Sugar andElectrode Units.

42. Impact of componentization of fixed assets and ascertaining useful life and original cost/estimated value of such components as on1st April, 2015 as required by the amended Schedule II of the Companies Act, 2013 is pending. Impact, if any, on the depreciation forthe year ended 31st March, 2016 is yet to be ascertained by the Management.

43. Debit advice of ` 2.63 Lac of Sugar Unit toward certain expenses has not been accounted for in the books of accounts of MD Office.Further no provision has been made for electricity expenses of six units ` 7.43 Lac.

44. Additional information as required by Schedule III of Companies Act, 2013:

(i) Prior period items:( in Lac)

Sl.No. Particulars For the year For the yearended ended

31st March, 2016 31st March, 2015

(A) Income(i) Revenue from operations (3.81) (0.26)(ii) Other Income 4.11 5.81(iii) Depreciation (Net) - 2.34

Total 0.30 7.89

(B) Expenditure(i) Finance costs 0.34 0.92(ii) Employee benefits expenses 0.88 16.78(iii) Legal & Professional Charges 1.41 -(iv) Discount & Sales Promotion expenses 103.25 -(iii) Other expenses (Net of reversal) 10.43 14.46

Total 116.31 32.16


Satina Uni. Stainer Glowlite putty

Welding Electrodes Oxygen Gas Nitrogen Gas Hydrogen Gas N2H2 Mixure Carbon di oxide Gas Argon Gas Zero Air Gas Freight on above

(ii) Cost of materials consumed:( ` in Lac)


31st March, 2016 31st March, 2015

(a) Sugar cane 15,593.92 19,259.95(b) Sugar Purchased (Reprocess) - 467.67(c) Molasses 6.83 8.62(d) Extra neutral alcohol (ENA) 341.67 191.66(e) Vatted Malt Scotch Whisky 800.70 412.27(f) Oils 91.34 82.48(g) Chemicals 1,358.42 1,588.25(h) Wire 605.76 1,326.61(i) Carbide 203.22 208.71(j) Carbon dioxide (CO2) 17.75 34.82(k) Argon Gas 12.22 23.49(l) Oxygen Gas 28.93 28.47(m) Others 58.71 33.34

Total 19,119.47 23,666.34

(iii) Manufactured goods:( in Lac)

Sl.No. Particulars Sales @ Opening Inventory Closing InventoryFor the year For the year For the year For the year For the year For the year

ended ended ended ended ended ended31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015

(a) Sugar 19,264.89 22,500.64 3,350.13 5,386.99 2,811.36 3,350.13(b) Molasses (By product) 885.78 622.07 545.41 501.58 101.26 545.41(c) Bagasse (By product) 514.41 883.18 25.29 6.15 25.59 25.29(d) Spirit 17.66 8.64 56.89 44.79 85.64 56.89(e) Extra neutral alchohol (ENA) - - 0.63 0.41 0.62 0.63(f) Indian made foreign liquor (IMFL) 8,690.28 3,190.47 317.10 184.99 325.94 317.10(g) Country liquor - - - - - -(h) Bio-organic manure 22.67 13.01 8.17 2.78 7.50 8.17(i) Special denatured spirit 967.65 1,595.45 - - 10.08 -(j) Paints & varnish 2,323.02 1,979.20 132.35 115.75 101.86 132.35(k) Disolved Acetylene 328.29 332.89 3.38 4.31 3.42 3.28(l) Carbon di oxide 40.12 68.52 0.40 0.46 0.33 0.40

(m) Argon 24.61 47.95 0.59 0.55 0.01 0.59(n) Oxygen 65.45 52.67 0.14 0.28 0.23 0.14(o) Welding Electrodes 2,111.70 3,957.60 239.59 401.38 130.13 239.59(p) Flux 38.21 40.88 - - - -(q) Wires* - - 442.63 442.63 442.63 442.63(r) Rods,Flats,Sections* - - 398.25 398.25 398.25 398.25(s) Oxygen Gas* - - 0.05 0.05 0.05 0.05(t) Scrap & Others* - - 54.81 54.81 54.81 54.81(u) Others - - - - - -

TOTAL 35,294.74 35,293.17 5,575.71 7,546.16 4,499.71 5,575.71

* This represents figures of Steel Unit as at 31st March, 1992.{ Refer note 27(4) }.@ Inclusive of Excise-duty but excludes rebates and discounts.


(iv) Traded goods:-( in Lac)

Sl.No. Particulars Sales Purchases Opening Inventory Closing InventoryFor the For the For the For the For the For the For the For the

year year year year year year year yearended ended ended ended ended ended ended ended

31 .03.2016 31.03.2015 31 .03.2016 31.03.2015 31 .03.2016 31.03.2015 31 .03.2016 31.03.2015

(a) Satina Uni. Stainer - - - - 0.04 0.14 0.01 0.04(b) Glowlite putty - - - - 0.08 0.28 0.01 0.08(c) Welding Electrodes 16.32 0.39 11.30 0.37 - - - -(d) Oxygen Gas 18.00 33.87 17.60 20.61 0.02 0.02 0.03 0.02(e) Nitrogen Gas 14.34 15.17 6.80 5.52 0.32 0.18 0.14 0.32(f) Hydrogen Gas 23.27 23.97 11.15 10.71 0.60 0.85 0.65 0.60(g) N2H2 Mixure 12.02 13.49 3.66 4.28 0.04 0.02 0.06 0.04(h) Carbon di oxide Gas 9.67 16.46 4.91 8.93 0.04 0.06 0.01 0.04(i) Argon Gas 30.62 19.58 15.84 9.25 0.04 0.09 0.96 0.04(j) Zero Air Gas 2.04 1.31 0.66 0.45 0.01 0.01 0.02 0.01(k) Freight on above - - 4.43 5.97 - - - -

126.28 124.24 76.35 66.09 1.19 1.65 1.89 1.19

v) Services rendered:- (` in Lac)


31 -03-2016 31-03-2015(a) Product Development Charges 38.34 22.26(b) Conditioning charges of cylinders 11.15 12.48(c) Job work charges 52.68 13.13

TOTAL 102.17 47.87

(vi) Work-in-progress:-( in Lac)

Sl.No. Particulars Opening Inventory Closing InventoryFor the year For the year For the year For the year

ended ended ended ended31st March 2016 31st March 2015 31st March 2016 31st March 2015

(a) Sugar 170.00 237.87 67.84 170.00(b) Indian made foreign liquor (IMFL) 11.66 18.14 23.98 11.66(c) Country liquor 0.60 0.60 0.60 0.60(d) Paints & Varnish 41.57 39.63 31.42 41.57(e) Welding Electrodes 61.52 92.83 20.48 61.52(f) Flux 9.70 10.26 0.78 9.70(g) Steel 40.32 40.32 40.32 40.32

TOTAL 335.37 439.65 185.42 335.37


(vii) Other Information:-( ` in Lac)

Sl.No. Particulars For the year For the yearended % age ended % age

31st March 2016 31st March 2015

(A) Value of imports on CIF basis:(i) Raw materials(cost of material acquired) 257.76 259.24(ii) Components & spare parts - 1.75(B) Expenditure in foreign currency:(i) Travelling 0.73 1.22(ii) Stores purchased 14.25 85.76(iii) Membership & Subscription 0.12 -(iv) Drawings & designing charges 21.71 -(v) Other matters 0.78 0.04-(C) Earing in foreign exchange

Value of Export on FOB basis(including indirect export benefits availed by third parties) - 35.24

(D) Value of imported/indigenous:(a) Raw materials consumed:(i) Imported 807.71 4.22 414.91 1.75(ii) Indigenous 18,311.76 95.78 23,251.43 98.25

TOTAL 19,119.47 100.00 23,666.34 100.0(b) Spare parts and components consumed: (i) Imported - - 1.98 0.63(ii) Indigenous 302.27 100.00 311.54 99.37

TOTAL 302.27 100.00 313.52 100.00

Foot Note :-As segregation between spare parts and components is not possible, the value of consumption of spare parts and components has beenaggregated. The figures given in (vii)(D)(b) above are as certified by the Officials of the Company.





INDEPENDENT AUDITOR’S REPORTTo the members of Modi Industries LimitedReport on the Consolidated Financial Statements(1) We have audited the accompanying consolidated financial statements of Modi Industries Limited (“the holding Company”), and its

subsidiaries (collectively referred to as “the Group”) which comprise the consolidated Balance Sheet as at 31st March, 2016, theconsolidated Statement of Profit and Loss, consolidated Cash Flow Statement for the year then ended and a summary of significantaccounting policies and other explanatory information. The attached consolidated Balance Sheet does not include Assets and Liabilitiesincluding Contingent Liabilities and other additional information of Steel Unit of the Company as at 31st March, 2016 but includes balancesas on 31st March, 1992, except for reduction of: (i) unsecured loan by 323.95Lac in view of write-back of 278.95Lac during the financialyear 2004-05 and payment of 45Lac during the financial year 2005-06 on account of one-time settlement of dues of a bank and (ii) netfixed assets by 696.19Lac (Previous year 689.38Lac) on account of provision for depreciation for the period 1st April, 1993 to 31st March,2016 on fixed assets as stated in Note 27(4)(c) of the consolidated financial statements. The consolidated Statement of Profit and Lossdoes not include: (i) certain provisions as stated in Note 27(4)(f) and (ii) loss, amount unascertained, of the Steel Unit of the Company forthe year 1992-93 in view of non-incorporation of the financial statements of the Steel Unit for the above year. The consolidated Cash FlowStatement, except for certain adjustments made as stated in foot-note 2 of consolidated cash flow statement, does not include adjustmentsfor Cash Flows from investing / financing activities and changes in assets and liabilities of Steel Unit of the holding Company in view ofnon-availability of audited Balance Sheets of the Unit as on 31st March, 2015 and 31st March, 2016 {Refer Note 27(4)}.

(2) Management’s Responsibility for the Consolidated Financial StatementsThe Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms with therequirement of the Companies Act (“the Act”) that give a true and fair view of the consolidated financial position, consolidated financialperformance and consolidated cash flows of the Group in accordance with the Accounting principles generally accepted in India, includingthe Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respectiveBoard of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; anddesign, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracyand completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true andfair view and are free from material misstatement, whether due to fraud or error which have been used for the purpose of preparation ofthe consolidated financial statements by the Directors of the Holding Company, as aforesaid.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit.

While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters whichare required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements arefree from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financialstatements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatementof the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internalfinancial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of theaccounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, aswell as evaluating the overall presentation of the consolidated financial statements.We believe that the audit evidence obtained by us and the audit evidence obtained by other auditor in terms of their report referred to in“Other Matters” paragraph below is sufficient and appropriate to provide a basis for our adverse audit opinion on the consolidated financialstatements.

(3) Basis for Adverse Opinion(A) The books of accounts, vouchers and other documents of the Steel Unit of the holding Company for 1992-93 were not made available

to us and consequently audit could not be conducted in respect of the same. {Note 27(4)}. Therefore, as stated in Paragraph 1 above,the attached consolidated Balance Sheet, consolidated Statement of Profit and Loss and consolidated Cash Flow Statement doesnot include: (a) the financial data / impact of working results and of declaration of closure / post-closure transactions, which includesrealization of depot sales / dues from debtors, provision / payment of final dues of employees and payments to various parties andmanufacturing / personnel / administration expenses etc., of the Steel Unit of the holding Company for the year 1992-93 during whichthe Unit had operated for ten months the exclusion of which, in our opinion, substantially impairs the presentation of aboveconsolidated financial statements of the Company especially in view of the fact that (i) the assets and liabilities of Steel Unit of theholding Company constituted 28% and 43% respectively of the total Assets & Liabilities of the Company as at 31st March, 1992 andthe Income & Expenditure of the Steel Unit constituted 30% and 32% respectively of the total Income & Expenditure of the holding


Company for the said year which resulted in a loss of 787.22Lac for the Unit and (b) impact on assets, liabilities and cash flows onaccount of non-incorporation of transactions / balance sheets for the years 1993-94 to 2015-16 as stated in Note 27(4)(c).

(B) Further to our comments in paragraphs 1 and 4(A) above and in the Annexure 1 referred to in paragraph 6(i) below, we report that: i. Understatement of accumulated losses on account of non-incorporation of impact of operational / working results / declaration

of closure and post closure transactions of Steel Unit of the Company for the year 1992-93, amount / impact unascertained. {ReferNote 27(4) and Paragraph 4(A) above}.

ii. Though the holding Company has been incurring huge losses continuously (losses for the five years i.e. 2011-12 to 2015-16 are` 4,276.10Lac, ` 3,489.48Lac, ` 4,289.92Lac, ` 2,505.50Lac and ` 884.95Lac respectively which aggregates to loss of` 15,445.95Lac for 5 years), accumulated losses of the holding Company of 22,335.47Lac as on 31st March, 2016 are far inexcess of paid-up capital & reserves (excluding revaluation reserve) of the holding Company of 1,006.98Lac as on that dateand the holding Company has been declared a sick Company on 14th March, 1991 and was also issued a show cause notice forwinding up by the Board for Industrial & Financial Restructuring on 28th October, 2013 (presently the winding up order has beenstayed by the Appellate Authority for Industrial & Financial Restructuring), the accounts have been prepared by the managementon a going concern basis for the reason stated in Note 27(15). In our opinion, these events / conditions cast significant doubt onthe ability of the holding Company to continue as a going concern and the appropriateness of the said basis is inter-alia mainlydependent on the vacation of the winding-up order, sanction and implementation of the rehabilitation scheme, governmentsupport / incentives / subsidy for paying huge amount of farmers dues towards cane purchases for sugar season 2015-16 andwaiver off interest liability since sugar season 2013-14 to 2015-16 on dues paid / payable to farmers and also the Company’sability to infuse requisite funds by sale of unproductive assets or otherwise for meeting substantial financial obligations includingdues of farmers towards cane purchases.

iii. Understatement of losses on account of non-provision of interest on loans, obsolete inventories, doubtful debtors / loan andadvances and impairment loss, and non-physical verification of inventories and fixed assets etc. in Steel Unit of the holdingCompany as stated in Notes 27(4)(f)(i) to (vii) and 27(5) of the consolidated financial statements. Amount of non-provision notascertained by the management.

iv. Non-provision of impairment loss, amount unascertained by the management, of assets of Sugar and Electrode Units of theholding Company as stated in Note 27(35).

v. (1) Non-provision of late payment surcharge / recovery charges 302.66Lac (Previous year 302.66Lac) {Note 27(9)} and Non-provision of demands of U.P. Power Corporation Ltd 1311.49Lac (Previous year 1311.49Lac) {Note 27(4)(f) (viii)(c)};

(2) Non-provision of ESI demand 64.68Lac (previous year 63.51Lac) {Note 27(10)};(3) Non-provision of House-tax demand 188.63Lac (Previous year 188.63Lac) {Note27(11)};(4) Non-provision of simple, penal and compound interest of 38,164.17Lac (for the year 5,414.65Lac) on term loans /

debentures and public deposits {Note 27(16)(a) and (f)} and interest / bank charges 4,124.37Lac (for the year 596.33Lac)on cash credit from banks {Note 27(16)(d) & (e)};

(5) Non-provision of Wages 27.46Lac (Previous year 27.46Lac) for the lock-out period {Note 27(18)};(6) Non-provision of recovery charges of 413.50Lac (Previous Year 413.50Lac) for sugar season 2007-08 and 1,703.95Lac

(Previous Year Nil) for sugar season 2014-15{Note 27(30)(b) & (g)};(7) Non-provision of interest up to 31st March, 2016 on cane dues for sugar season 2014-15 and 2015-16 amounting to

` 2,010.87Lac and 341.88Lac respectively. {Notes 27(30)(g) & (h)};(8) Accounting for amount recoverable of 1,147.70Lac as on 31st March, 2016 towards financial assistance for sugar season

2015-16 by way of reimbursement of part of sugar cane price by State Govt. whereas the amount to be reimbursed, if any,is yet to be notified by the State Govt. for this purpose. Had the above financial assistance not accounted for in the booksof account, there would be net increase in expenses by 964.10Lac (net of increase in closing stock by 183.60Lac) asstated in Note 27(21} and

(9) Debit advice of 2.63 Lac of Sugar Unit of the holding Company toward certain expenses has not been accounted for in thebooks of accounts of other units of the Company as stated in Note 37 resulting in under-statement of expenses / loss andover-statement of debit balance of inter-unit balances by the same amount. Further, no provision has been made forelectricity expenses also by certain units amounting to 7.43 Lac.

(C) Accounting treatment given to the manufacture and sale of Vodka and whisky by the Distillery unit (“Unit”) of holding Company in itsbooks of account is not proper even though the same has no impact on the net profit of the Unit for the year in view of the reasons statedin Note 27(14).

(D) Confirmation of Debit / Credit balances of debtors / creditors and of certain banks were not obtained. Impact on the consolidatedfinancial statements is not ascertainable. {Note 27(23)}.

(E) Our audit observations under sections 143(1) & 186 of The Companies Act, 2013 are as under:The holding Company had given unsecured interest free security deposits amounting to: (i) 1,100Lac during May 2011 againsttemporary possession of 59 houses to Ashoka Mercantile Limited (“AML”), a related party, and (ii) 147.63Lac during the earlier yearsagainst temporary possession of 9 houses to Modipon Limited (“MPL”), also a related party. The outstanding amounts as on 31st

March, 2016 in the books of account of the holding Company are 798.30Lac (43 houses) (Previous year 867.80Lac & 47 houses)and 147.63Lac (9 houses) (Previous year 147.63Lac for 9 houses) in respect of AML and MPL respectively. These houses are


not occupied by any of the employees of the Company till date. In our opinion, the above unsecured loans given by the Company{i.e. a sick Company as mentioned in Note 27(15)} to two related parties amounting to ` 945.93Lac (As on 31st March, 2015` 1,015.43Lac) have been shown as deposits by the holding Company since date of payments on which interest @ 8.5% has beencharged w.e.f. 1st April, 2014 from AML since it expressed its inability to refund the amount and no interest has been charged fromMPL since inception. {Refer Note 27(32)(3)(B) and Foot-note 7 of Note 27(32)}.

(F) As stated by the management in Note 27(31), the Electrode Unit of the holding Company has incurred expenditure for advertisementof products amounting to 115.64Lac (previous year 153.12Lac) by way of advertisement in newspapers through agents. In theabsence of sufficient appropriate audit evidence regarding prevailing market rates / charges paid to newspaper publishers by agents,we are unable to verify and express our opinion on these rates/charges paid by the Company to agents. Observations & suggestionsof Internal Auditors in this regard need to be also looked into & implemented.

(G) (i) As per the bottling contract mentioned in Note 27(14), the Distillery Unit (“the Unit”) of the holding Company has agreed forblending, manufacturing and bottling of the products for MI Spirit India Private Limited (MI Spirit) and MI Spirit will, either itselfor through “Modi Illva India Private Limited (Modi Illva), a Company in which a director of the Company is also a director, marketthe products and in case MI Spirit requests the bottler to directly undertake any promotion of the products, then expenses incurredby the bottler in connection with the promotion of the products shall be reimbursed by MI Spirit, against the debit notes raisedby the bottler.

(ii) We note that the Unit has accounted for sale promotion expenses {cost of gift items 805.58Lac and trade scheme amount`183.40Lac which is claimed as reimbursement from the Unit by sale promotion agents (SPAs) on secondary sales i.e. on salemade by the State corporations to their customers} {Previous year: Cost of gifts 250.99Lac & trade scheme amount Nil}. Inview of the facts stated in sub-paragraph (i) above, in our opinion, the accounting for these expenses in the books of accountof the Unit is not proper since the same is to be debited to MI Spirit and also in view of the opinion given by the Expert advisoryCommittee of the Institute of Chartered accountants of India on the similar arrangement as stated in Note 27(14).Further, we could not verify / audit these expenses as the sale promotion policy, records / supporting documents relating to receiptand / or distribution of these gifts and proof / confirmation of customers for having received gifts and trade scheme amounts (fromSPAs) are not available with the Unit.

(iii) However, the accounting of these sale promotion expenses in the books of account of the Unit had no impact on the net profitof the Unit as the Unit is entitled to only fixed manufacturing margin of 281.90Lac for the year ended March 31, 2016 as perthe agreement stated above which is actually represented by way of net profit earned from manufacture and sale of Vodka andwhisky by the Unit as stated in note 27(14) i.e. instead of sale promotion expenses, the trade mark license & marketing feeexpenses would have been accounted for in the books of account of the Unit resulting in no impact on net profit earned by theUnit.

(H) We further report that, without considering items mentioned at 4 (A), (B) (i) to (v) and 4(D)to 4(F) above, the possible effects of whichcould not be determined, had the observations made by us in paragraphs 4(B) (vi), and 4(C & G) above been considered, the lossfor the year would have been 50,524.20Lac (as against the reported loss of 896.40Lac), negative balance of Reserves and Surplusin Note 2 would have been 69,299.77Lac (as against the reported negative figure of 19,671.95 Lac), current assets would havebeen 13,246.68Lac (as against the reported figure of 18,048.95Lac), debit balance of inter-unit balances in Note 17 would havebeen 1,026.73Lac (as against the reported figure of 1,029.36Lac), current liabilities would have been 83,451.32 Lac (as againstthe reported figure of 35,874.78Lac), long-term borrowings would have been ` 2,971.75Lac (as against the reported figure of` 5,722.74Lac), gross revenue (including other income) would have been ` 27,835.98Lac (as against the reported figure of` 36,536.58 Lac), trade mark license and marketing fees expense would have been 1,137.35 Lac (as against the reported figureof 148.37 Lac), discount and sales promotion expense would have been 86.32Lac (as against the reported figure of 1,075.30Lac)and total expenses (including excise-duty) for the year would have been ` 78,641.76Lac (as against the reported figure of` 37,432.64Lac).

(I) In view of the significance of our audit observations in paragraphs 1 and 4(A) to (H) above and especially in view of the fact that thestate of affairs would change substantially in case the Statement of Profit and Loss for the financial year 1992-93 and Balance Sheetas on 31st March, 2016 of Steel Unit of the holding Company were included, which we are unable to quantify, we are of the opinion,the said consolidated financial statements DO NOT give a true and fair view: (a) In the case of the consolidated Balance Sheet, ofthe state of affairs of the Group as at 31st March, 2016, (b) in the case of consolidated Statement of Profit and Loss, of the loss forthe year ended 31st March, 2016 and (c) in the case of consolidated Cash Flow Statement, of the cash flows for the year ended onthat date.

(5) Emphasis of Matter(i) The holding Company has not deposited unpaid unclaimed public deposits and interest accrued thereon amounting to ` 9.72Lac

with Investor Education & Protection Fund. Further, unpaid amount of such unclaimed debentures, if any, as on 31.03.2016 has notbeen identified. {Note 27(26)}.

(ii) Cars costing 82.62Lac (Previous Year 96.26Lac) purchased in the name of employees / others are yet to be transferred to the nameof the holding Company. However, these persons have given disclaimer in favor of the Company. {Refer Foot-Note D of Note 10}.

(iii) We invite attention to Note 27(28) regarding entering into agreements to sell 215 (previous year 215) residential quarters, Note27(29)(a) regarding entering into lease, including perpetual lease, agreements for 27,954.86 Sq. Meters of factory land & buildingsand Note 27(29)(b) regarding entering into perpetual lease agreement for 1584 Sq. Mtrs. of factory land for which the approvals offinancial institutions, to whom these quarters and factory land & buildings are mortgaged, were not obtained.


(iv) We invite attention to Foot-notes 5, 9 & 10 of Note 27(32) regarding post-facto approval of shareholders to be obtained by the holdingCompany in the ensuing annual general meeting for leasing agreements for premises and plant and machinery entered into withrelated parties whereas all these agreements requires prior approval of shareholders.

(v) We invite attention to Note 27(17)(a) regarding reasons for not making provision for disputed Sales-tax demand of `2,455.78Lacexcluding interest (Previous year 2,455.78Lac) of closed Vanaspati Unit of the holding Company.

(vi) We invite attention to Note 27(30)(a), (c), (e) and (f) regarding demands of recovery charges of ` 2,659.71Lac (Previous Year` 2,659.71Lac) on account of non-payment of cane price / commission / interest as the same are disputed by the holding Company/ obtained stay order as stated therein. We also invite attention to Note 27(30)(f) regarding issue of notification by the StateGovernment for waiver off interest for sugar season 2013-14 amounting to 2,138.58Lac which is still awaited.

(vii) We invite attention to Note 27(27)(a) regarding provision made for diminution in market value of one of its long-term investment ina group Company of 148.80Lac for the year ended March 31, 2016 in view of the reasons stated in the Note and is disclosed in theConsolidated Statement of Profit and Loss as an ‘Exceptional Item’.Our opinion is not qualified in respect of the matters mentioned in paragraph 5 above.

(6) Report on Other Legal and Regulatory RequirementsAs required by section 143(3) of the Act, we report that:a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary

for the purposes of our audit except in respect of Steel Unit as mentioned above and the matters referred in paragraphs 4(F) & (G)above. In case of Steel Unit, no details, information and explanations are available for the opening and closing assets and liabilitiesas on 1st April, 2015 and 31st March, 2016 respectively and for contingent liabilities and additional information etc. as on 1st April, 2015and 31st March, 2016 in view of non-incorporation of: (i) the financial statements of Steel Unit for 1992-93 and (ii) Balance Sheetsfor the years 1993-94 to 2015-16 as stated in note 27(4)(c).{(See paragraphs 1 and 4(A) above};

b. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examinationof those books except: (i) in respect of Steel Unit, where audited balances of opening and closing assets, liabilities, contingentliabilities and additional information etc. as on 1st April, 2015 and 31st March, 2016 respectively were not available and consequentlynot incorporated in the books of account and (ii) for the effects of other matters described in the Basis for Adverse Opinion’ paragraph4 above.

c. The Balance Sheet referred to in this report is in agreement with the books of accounts of all units, subsidiaries and accountingcentres taken together, other than Steel Unit, as on 31st March, 2016 as consolidated with the Balance Sheet of Steel Unit as statedin Note 27(4) (c) & (d) of the standalone financial statements and hence is not in agreement with the books of account of the Companyas a whole. Further, the Cash Flow Statement for the year ended on that date, which does not include adjustments for Cash Flowsfrom investing / financing activities and changes in assets and liabilities in view of non-availability of audited Balance Sheet of SteelUnit as on 31st March, 2015 & 31st March, 2016, is also not in agreement with the books of account. (Refer foot-note 2 of consolidatedcash flow statement). Except for non-incorporation of Statement of profit and loss of Steel Unit for the year 1992-93, the ConsolidatedStatement of Profit and Loss is in agreement with the books of accounts.

d. Subject to our observations in paragraph 4(B) above, in our opinion, the Statement of Profit and Loss and Balance Sheet, so far asthey relate to the remaining units i.e. other than Steel Unit, comply with the requirements of the Accounting Standards referred toin Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. However, in view of non-availability andconsequently non-incorporation of audited (i) opening and closing balances as on 1st April, 2015 and 31st March, 2016 respectivelyof assets, liabilities, contingent liabilities and other additional information etc. and (ii) Statement of Profit and Loss for 1992-93 ofSteel Unit {Refer Paragraph 4(A) above}, the aforesaid consolidated financial statements do not comply with the requirements ofAccounting Standards referred to in Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 as a whole.

e. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financialstatements, so far as they relate to the remaining Units i.e. other than Steel Unit, give the information required by the Act in the mannerso required except for non-disclosure of information relating to micro, small and medium enterprises {Refer note 27(12)}. In the caseof Steel Unit, in view of non-incorporation of Balance Sheets of Steel unit as on 31st March, 2016 and 31st March, 2015 on accountof non-availability and consequently non-incorporation of audited opening balances as on 1st April, 2015 and 1st April, 2014respectively of assets, liabilities, contingent liabilities and other additional information etc., the consolidated financial statementsdo not give the information required by the Companies Act, 2013 in the manner so required as a whole. {Refer Note 27(4)}.

f. The matters described in the Basis for Adverse Opinion paragraph above, in our opinion, can have an adverse effect on thefunctioning of the holding Company.

g. On the basis of the written representations received from the directors of the holding Company and its subsidiaries as on 31st March,2016, taken on record by the Board of Directors, none of the directors is disqualified, as on 31st March, 2016, from being appointedas a director in terms of Section 164(2) of the Act. Further, the holding Company was legally advised earlier that provisions of Section 274(1)(g) of the Companies Act, 1956, whichcorresponds to section 164(2) of the Companies Act, 2013, are prospective in nature and the defaults made by it prior to 13thDecember, 2000, for non-payment of deposits/interest on deposits on due dates and non-redemption of debentures on due dates,are not covered by Section 274(1)(g) of the Companies Act, 1956, on which we have relied upon.

h. The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the ‘Basis forAdverse Opinion’ paragraph above.


i. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectivenessof such controls, refer to Annexure 1.

j. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:i. The Company has various pending litigations which could impact its financial position and the same has been suitably disclosed

under contingent liability / notes to accounts under Note 27.ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable

losses.iii. An amount of 9.72Lac being unclaimed deposits and interest accrued till date of maturity of deposit are yet to be transferred

to the Investor Education and Protection Fund by the Company. Amount of unclaimed debentures and interest accrued till maturityis not yet quantified by the management.

(7) Other MatterWe did not audit the financial statements of both the subsidiaries, whose financial statements reflect total assets of 51.01Lac (Previousyear 62.73Lac) as at 31st March, 2016, the total revenue of 2.28Lac (Previous year 2.19Lac) and cash outflows (net) amounting` 4.92Lac (Previous year inflows of 0.46Lac) for the year then ended. These financial statements and other financial information havebeen audited by other auditor whose reports have been furnished to us and our opinion is based solely on the report of other auditor.


( Regn. No. 000051N )

Ramesh Chand GoyalPLACE: DELHI PARTNERDATED: 22nd August, 2016 Membership No.012628

Annexure 1 to the Independent Auditor’s ReportReferred to in paragraph 2(g) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date on theconsolidated financial statements of Modi Industries limited.Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)We have audited the internal financial controls over financial reporting of Mod i Industries Limited (hereinafter referred to as “the Holding

Company”) as of March 31, 2016 In conjunction with our audit of the consolidated financial statements of the Group for the year endedon that date.

1. Management’s Responsibility for Internal Financial Controls

The respective Board of Directors of the holding Company and its subsidiaries, which are companies incorporated in India, are responsiblefor establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established bythe holding Company and its subsidiary companies incorporated in India considering the essential components of internal controls statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountantsof India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective Company’spolicies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accountingrecords, and the timely preparation of reliable financial information, as required under the Act.

2. Auditors’ ResponsibilityOur responsibility is to express an opinion on the Holding Company’s and its subsidiary companies internal financial controls over financialreporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial ControlsOver Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed undersection 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system overfinancial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtainingan understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testingand evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected dependon the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to


fraud or error.

We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditor in terms of their report referredin the ‘Other Matters’ paragraph below is sufficient and appropriate to provide a basis for our audit opinion on the holding Company’s andits subsidiary companies internal financial controls system over financial reporting.

3. Meaning of Internal Financial Controls over Financial ReportingA Company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally acceptedaccounting principles. A Company’s internal financial control over financial reporting includes those policies and procedures that (1)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of theassets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are beingmade only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have amaterial effect on the financial statements.

4. Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or impropermanagement override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of anyevaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies orprocedures may deteriorate.

5. Disclaimer of opinionAccording to the information and explanations given to us, the holding Company has neither established nor evaluated its internal financialcontrols over financial reporting on criteria based on or considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Mainlybecause of this reason and also our comments in paragraph 4 of statutory audit report of even date on consolidated financial statementsof the Group, we are unable to obtain sufficient appropriate audit evidence to provide a basis for our opinion whether the holding Companyhad adequate internal financial controls over financial reporting and whether such internal financial controls were operating effectivelyas at March 31, 2016.

However, according to the information and explanations given to us and based on our audit of the financial statements of the holdingCompany, the following material weaknesses have been noticed as at March 31, 2016 for which remedial action by the management isyet to be initiated:

a) No physical verification of fixed assets has been conducted by the Management since 1989 in Sugar, Steel and Distillery Units andof Corporate Office and since 2001-02 in respect of other units of the holding Company. Fixed asset register of the holding Companyneeds to be updated for: (i) locations in case of furniture and fixture and (ii) recording of additions / deletions of certain previous years.

b) The inventory of stores and spare-parts of all units of the holding Company during the year and inventory of the closed Steel Unit sincethe year 1992-93 has not been physically verified by the management.

c) The books of accounts, vouchers and other documents of the Steel Unit of the holding Company for 1992-93 were not made availableto us and consequently audit could not be conducted in respect of the same. {Note 27(4)}. Therefore, as stated in Paragraph 1 aboveof audit report of even date, the attached Consolidate Balance Sheet, Consolidated Statement of Profit and Loss and ConsolidatedCash Flow Statement does not include: (a) the financial data / impact of working results and of declaration of closure / post-closuretransactions, which includes realization of depot sales / dues from debtors, provision / payment of final dues of employees andpayments to various parties and manufacturing / personnel / administration expenses etc., of the Steel Unit of the holding Companyfor the year 1992-93 during which the Unit had operated for ten months the exclusion of which, in our opinion, substantially impairsthe presentation of above consolidated financial statements of the Group and (b) impact on assets, liabilities and cash flows onaccount of non-incorporation of transactions / balance sheets for the years 1993-94 to 2015-16 as stated in Note27(4)(c).

d) Accounting treatment given to the manufacture and sale of Vodka and whisky by the Distillery unit (“Unit”) of holding Company in itsbooks of account is not in accordance with the opinion given by the Expert Advisory Committee of the Institute of CharteredAccountants of India even though the same has no impact on the net profit of the Unit for the year in view of the reasons stated in Note27(16). In our opinion, the accounting treatment suggested by the Expert Advisory Committee of the Institute of Chartered Accountantsof India for accounting only manufacturing margin in the books of account of the Unit should be followed and accordingly, all expenses,revenue, assets and liabilities related to the manufacture and sale of Vodka and whisky by the Unit should not be recorded in the booksof account of the Unit.

e) As stated by the management in Note 27(36), the Electrode Unit of the holding Company has incurred expenditure for advertisementof products amounting to 115.64Lac (previous year 153.12Lac) by way of advertisement in newspapers through agents. In the


absence of sufficient appropriate audit evidence regarding prevailing market rates / charges paid to newspaper publishers by agents,we are unable to verify and express our opinion on these rates/charges paid by the Company to agents.Observations & suggestionsof Internal Auditors in this regard need to be also looked into & implemented.

f) (i) As stated in paragraph 4(G)(i) of our main report, expenses incurred by the holding Company i.e. bottler in connection with thepromotion of the products shall be reimbursed by MI Spirit, against the debit notes raised by the bottler. We note that the Unit hasaccounted for sale promotion expenses {cost of gift items 805.58Lac and trade scheme amount 183.40Lac which is claimedas reimbursement from the Unit by sale promotion agents (SPAs) on secondary sales i.e. on sale made by the State corporationsto their customers. In our opinion, the accounting for these expenses in the books of account of the Unit is not proper since thesame is to be debited to MI Spirit as per the agreement and also in view of the opinion given by the Expert advisory Committeeof the Institute of Chartered accountants of India on the similar arrangement as stated in paragraph (d) above, these expensesshould not be accounted for in the books of account of the Unit.

(ii) Further, we also could not verify / audit these expenses as the sale promotion policy, records / supporting documents relatingto receipt and / or distribution of these gifts and proof / confirmation of customers for having received gifts and trade schemeamounts (from SPAs) are not available with the Unit.

g) Confirmation of Debit / Credit balances of debtors / creditors are not being obtained by the holding Company since long. Impact onthe consolidated financial statements is not ascertainable.

We have considered the disclaimer above in determining the nature, timing and extent of audit tests applied in our audit of theconsolidated financial statements of the Group and the disclaimer has affected our opinion on the consolidated financial statementsof the Group and we have issued an adverse opinion on the consolidated financial statements.

Other Matters

Our aforesaid report under section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controlsover financial reporting insofar as it relates to both the subsidiary companies, which are incorporated in India, is based on thecorresponding reports of the auditor of the subsidiary companies.


( Regn. No. 000051N )



Consolidated Balance Sheet as at 31st March, 2016(` in Lac)

Particulars Note As at As atno. 31.03.2016 31.03.2015

I EQUITY AND LIABILITIES :(1) Shareholders’ funds:(a) Share Capital 1 371.66 371.42(b) Reserves & Surplus 2 (19,671.95) (18,775.57)

(19,300.29) (18,404.15)(2) Minority interests 0.06 0.08(3) Non-current liabilities :(a) Long term borrowings 3 5,722.74 5,279.61(b) Other long term liabilities 4 1,627.05 1,574.18(c) Long term provisions 5 965.37 1,023.91

8,315.16 7,877.70(4) Current liabilities :(a) Short term borrowings 6 1,828.97 1,880.53(b) Trade payables 7 21,122.01 23,654.35(c) Other current liabilities 8 12,282.41 12,878.77(d) Short term provisions 9 641.39 679.90

35,874.78 39,093.55

TOTAL 24,889.71 28,567.18II ASSETS(1) Non-current assets(a) Fixed assets :

i) Tangible assets 10 5,897.95 6,165.96ii) Intangible assets 11 1.58 5.20iii) Capital work-in progress 41.37 38.06

(b) Non-current investments 12 640.84 801.58(c) Long term loans and advances 13 252.12 225.78(d) Other non-current assets (Fixed Tangible) 10 (foot note G) 6.90 -

6,840.76 7,236.58(2) Current assets(a) Inventories 14 6,018.66 7,441.79(b) Trade receivables 15 5,635.77 6,010.63(c) Cash and bank balances:-

(i) Cash and Cash equivalents 16(i) 605.00 1,350.65(ii) Other bank balances 16(ii) 1,305.78 1,247.10

(d) Short term loans and advances 17 2,779.14 2,821.93(e) Other current assets 18 1,704.60 2,458.50

18,048.95 21,330.60TOTAL 24,889.71 28,567.18Accounting policies and other notes to financial statements 26 & 27





Consolidated Statement of Profit and Loss for the year ended 31st March, 2016(` in Lac)

Particulars Note For the For theno. year ended year ended

31.03.2016 31.03.2015

I Revenue from operations 19 35,735.22 36,003.85Less:- Excise duty 4,862.59 2,224.01

30,872.63 33,779.84II Other income 20 552.13 642.51III Total Revenue ( I + II ) 31,424.76 34,422.35

IV Expenses:-Cost of materials consumed 19,119.47 23,666.34Purchases of stock-in-trade 76.35 66.09Changes in inventories of finished goods, 21 1,225.25 2,075.19work-in-progress and stock-in-tradeEmployee benefits expense 22 3,348.52 3,337.36Finance costs 23 644.04 1,228.39Depreciation and amortization expense 10, 11 334.51 435.92Other expenses 24 7,673.12 6,117.51Total expenses 32,421.26 36,926.80

V Loss before exceptional and 996.50 2,504.45extra-ordinary items and tax ( IV-III )

VI Exceptional items:-(a) Refund of Commission on (27)(30)(i) (249.18) -

Sugar Cane Purchase for 2012-13(b) Provision for Dimunition in the value of (27)(27) 148.80 -

Long Term Investment

VII Loss before extra-ordinary items 896.12 2,504.45and tax ( V+VI )

VIII Extra-ordinary items - -IX Loss before tax (VII + VIII) 896.12 2,504.45X Tax expenses:- - -

(1) - Current tax 0.24 0.33(1) - Earlier year tax 0.04 (0.05)

XI Loss for the period (IX + X) 896.40 2,504.73Minority interest (0.02) -

896.38 -XII Loss from continuing operations 692.68 2,373.15XIII Loss from discontinuing operations 27(4)(e) 203.70 131.58XIV Tax expense of discontinuing operations - -XV Loss from discontinuing operations (after Tax) (XIII + XIV) 203.70 131.58XVI Loss for the period (XII+XV) 896.38 2,504.73XVII Basic /Diluted Earnings per equity share of ` 10 each (in Rupees) 27(42) (27.27) (75.87)

Accounting policies and other notes to financial statements 26 & 27





Consolidated Cash Flow Statement for the year ended 31st March, 2016.(` in Lac)


A. CASH FLOW FROM OPERATING ACTIVITES :

Profit/(Loss) before Tax (896.10) (2,505.45)

Less: Adjustment for :

i) Interest Income 175.39 175.26

ii) Profit on Sale of Fixed Assets 5.01 10.12

iii) Profit on assets held for dosposal 4.13 -

iv) Excess Provision written back 24.11 16.85

v) Unclaimed credit balances W/back 38.42 22.37

vi) Amount written back 17.89 3.21

vii) Depreciation written back 1.96 4.17

viii) Dividend Income 52.50 42.00

319.41 273.98

Add: Adjustments for : (1,215.51) (2,778.43)

i) Depreciation 334.51 435.92

ii) Assets written off/Loss on sale of Assets/Stores 10.13 4.29

iii) Interest Expenses 644.04 1,228.39

iv) Provision for Doubtful Debts & Advances 199.37 119.01

v) Amounts/Claims/Bad Debts written off (Net of provisions) 8.64 9.46

vi) Provision for obsoleteRaw Material, spare-parts & stores 26.15 5.36

vii) Provision for Dimunition in the value of Long Term Investment 160.74 -

1,383.58 1,802.43

Operating Profit/(Loss) before Working Capital Changes 168.07 (976.00)

Adjustments for :

Trade Receivables 213.34 (1,049.47)

Inventories 1,396.76 1,848.34

Trade Payable (2,645.57) 5,294.99

Loans/Advances and other assets 799.23 (1,915.91)

Other bank balances (58.68) (98.25)

Cash Generated from Operations (126.88) 3,103.70

Interest Paid (Foot-note 1 below) (65.93) (1,338.98)

income tax paid/ refund ( Net ) (26.15) (38.29)

Net Cash from Operating Activities (A) (218.96) 1,726.43

(B) CASH FLOW FROM INVESTING ACTIVITIES :

Purchase of Fixed Assets (124.91) (71.87)

Sale of Fixed Assets 26.77 13.16

Interest Received 193.29 103.59

Dividend Received 52.50 42.00

Net Cash Flow from Investing Activities (B) 147.65 86.88


(C) CASH FLOW FROM FINANCING ACTIVITIES :

Secured term borrowings from bank (2.17) (3.93)

Secured borrowings from banks 67.81 45.89

Unsecured Fixed Deposits paid (0.17) (0.62)

Unsecured borrowings from others (net) (80.03) (153.90)

Interset paid on borrowings (619.84) (715.85)

Unsecured Debentures Paid (2.11) -

Net Cash from Financing Activities (C) (636.51) (828.41)

*Inter Unit Balances (Net) (D) (Foot-note 2 below) (37.83) (37.99)

Net Increase/(decrease) in cash and Cash Equivalents (A+B+C+D) (745.65) 946.91

Opening Cash and Cash Equivalents 1,350.65 403.74

Closing Cash and Cash Equivalents 605.00 1,350.65

FOOT NOTES :

1. Interest credited to accounts of suppliers, C & F agents and dealers etc. is treated as paid.

2. In view of non availability of audited balance sheet as on 31.03.2016 and 31.03.2015 of Steel Unit, cash flow from investing/financingactivities and changes in current assets & liabilities of steel unit are not included in the Cash Flow Statement except for inclusion ofnet outflow of ` 37.83 Lac on account of net increse in inter unit balances appearing in Note 17 i.e. Short term loans & advances{Refer Note 27(4)}.

3. Figures in brackets represents outflows.

4. Previous Year figures have been rearranged/regrouped wherever considered necessary.

(` in Lac)Particulars 2015-16 2014-15





Notes : Forming part of the Consolidated Financial Statements for the year ended 31st March, 2016

Note no.1 : SHARE CAPITALParticulars As at As at

31.03.2016 31.03.2015

Authorised:-40,00,000 Equity shares of ` 10/- each 400.00 400.00

1,00,000 15% Redeemable cumulative 100.00 100.00Preference shares of ` 100/- each 500.00 500.00

Issued, subscribed and paid up:-33,09,214 Equity shares of ` 10/- each fully paid-up 330.92 330.92

Less: Calls unpaid (Directors and Officers) - -Less: Calls unpaid (others)* - 0.24

330.92 330.6840,741 15% Redeemable cumulative 40.74 40.74

Preference shares of ` 100/- each fully paid-up

TOTAL 371.66 371.42

* Recovered by way of adjustment from interest payable on debentures held by these shareholders

Foot notes:(1) (a) Details of equity shares held by each shareholder holding more than 5 percent shares as at the end of financial year are

as under:

As at 31.03.2016 As at 31.03.2015


(i) Status Mark Finvest Limited 227844 6.89 227844 6.89

(ii) K K Modi Investment & Financial Services Pvt. Ltd. 231751 7.00 231751 7.00

(b) Details of preference shares held by each shareholder holding more than 5 percent shares as at the end of financial yearare as under:

As at 31.03.2016 As at 31.03.2015


(i) ICICI Bank 7794 19.13 7794 19.13

(ii) The oriental insurance company limited 6550 16.08 6550 16.08(iii) The new india assurance company limited 13624 33.44 13624 33.44(iv) The united india insurance company limited 4093 10.05 4093 10.05

(v) General insurance corporation of india 3560 8.74 3560 8.74(vi) National insurance company limited 4912 12.06 4912 12.06

(2) (a) Cumulative Preference Shares were due for redemption on 31st December, 2010. The company moved Misc. Application (MA)u/s 22(3) of the SICA before Hon’ble BIFR, whereby it had sought extension and suspension of obligation in relation to the 15%Preference Shares concerning Preference Shareholders for two years. The Hon’ble BIFR vide its order dated 18th January,2011 dismissed the application of the Company. Consequent to the order, the company had written letters to the InstitutionalPreference Shareholders for settlement and redemption of Preference Shares. Further, negotiations are pending and preferenceshares are overdue for redemption as on 31st March, 2016.

(b) Arrears of dividend on Cumulative Preference Shares amounts to ` 154.28 Lac (upto 31st March, 2015 ` 148.17 Lac).

(` in Lac)


Note no. 2 : RESERVES & SURPLUS(` in Lac)

Sl.No. Particulars Opening Balance Addition Deduction Closing Balance

(1) Capital Reserve 459.34 - - 459.34(2) Capital Redemption Reserve 25.11 - - 25.11(3) Shares Premium Account 22.57 - - 22.57(4) Debenture Redemption Reserve 113.00 - - 113.00(5) Revaluation Reserve 2,012.51 - - 2,012.51(6) Share options outstanding accounts - - - -

(7) General Reserve 22.91 22.91(8) Other Reserves/Funds:-

-Storage fund for Molasses Account 10.01 5.29 - 15.30-Statutory Reserves 1.09 1.09

(9) Surplus i.e. balance in

Statement of Profit & Loss (21,442.11) (896.38) 5.29 (22,343.78)TOTAL (18,775.57) (891.09) 5.29 (19,671.95)Previous year (16,162.74) (2,500.00) 112.83 (18,775.57)

Foot-note:-1. Storage fund for Molasses ( 5.29 lacs (previous year ` 4.73 lacs) is created @ ` 1.50 per Qtl. of Molasses sold as per the provision

of “ The Molasses control (Regulation of fund for erection of storage facilities) order, 1976” and is to be utilised for construction orerection of storage facilities for Molasses.

2. Deductions in previous year includes ` 108.10 Lacs being depreciation on assets whose life expired as on 31.03.2014 as perschedule II of the Companies Act, 2013.

Note no. 3 : LONG TERM BORROWINGS( ` in Lac)


Secured:-Bonds/debentures - -Term loans from banks (see-foot note below ) 8.10 10.27Term loans from others - -Loans and advances from related parties - -Unsecured:-Bonds/debentures - -Term loans from banks - -Term loans from others 2,825.99 2,193.63Deposits - -Loans and advances from related parties-Moderate Leasing & Capital Finance Service Ltd. 2,888.65 3,075.71

Longs term maturities of finance lease obligations - -

TOTAL 5,722.74 5,279.61

Foot-note:-Secured by hypothecation of vehicles and is repayable in monthly installments. There are no defaults as on 31st March, 2016.


Note no. 4 : OTHER LONG TERM LIABILITIES(` in Lac)


Trade payable - -

Others:Security received against houses 890.28 838.03Security received from others 226.03 229.75

Advance received against houses 504.50 504.50{Note 27 (28)}

Other liabilities 6.24 1.90

TOTAL 1,627.05 1,574.18

Note no. 5 : LONG-TERM PROVISIONS( in Lac)


Provision for employee benefits:-

Provision for gratuity:-

As per last balance sheet 936.61 1,038.91

Add: Provided during the year (11.33) (77.39)


Sub total (A) 884.51 936.61

Provision for leave encashment:-

As per last balance sheet 87.30 103.13

Add: Provided during the year 6.04 (2.46)


Sub total (B) 80.86 87.30

TOTAL (A+B) 965.37 1,023.91

Note no. 6 : SHORT TERM BORROWINGS( in Lac)


Secured:-

Loans repayable on demand:-

-from banks

-Cash credit (including interest 1,498.19 1,498.19

accrued)(see-foot note below)

-overdraft from bank against 285.78 212.34

pledge of FDR’s

-from others - -

Loans and advances from related parties - -

Other loans and advances - -

Note no. 6 : (Contd.)(` in Lac)


Unsecured:-Loans repayable on demand:--from banks - --from others - -Loans and advances from related parties:--Moderte Leasing & Capital Services Ltd. - 170.00-Weld Excel India Limited 45.00 -Deposits - -Other loans and advances - -

TOTAL 1,828.97 1,880.53

Foot-notes:-1 Cash credit of 1498.19 Lac ( including interest accrued and due

of 17.61 Lac ) is secured by hypothecation of Raw Materials,Stock in Progress, Finished Goods, Stores and Spares and BookDebts and guaranteed by a Managing Director.{ Refer note 27(5)(i) (a)}.

2 Cash credit of 58.16 Lac from Allahabad Bank is in default since1996 and ` 1440.03 Lac from PNB is in default since 1992.Interest payable on cash credit has not been paid since then.{Refer note 27(16) (c to e) and note 27 (5) (i) (a)}

Note no. 7: TRADE PAYABLES( in Lac)


Purchase of raw material and store 20,460.13 22,957.20{Note 27 (12)}Customers/ Agents for purchase of goods 661.88 697.15

TOTAL 21,122.01 23,654.35

Note no.8 : OTHER CURRENT LIABILITIES( in Lac)


Current maturities of long-termdebts ( unsecured )-From related parties:-- A to Z Holding Pvt. Ltd. 24.89 24.89- Moderate Leasing & CapitalServices Ltd. - 400.33-From others - -Current maturities of long-term debts( secured )-From banks 2.42 8.05-From other parties (see foot-note 1) 1,506.85 1,506.85Current maturities of finance leaseobligations (see foot-note 2) 79.06 120.99Deferred credits {Note 27 (34)} 35.10 35.11


Note no.8 : (Contd.)(` in Lac)


Interest accrued but not due onborrowings (unsecured) 61.45 61.45Interest accrued but not due onborrowings (secured) 0.09 0.11Interest accrued and due onborrowings ( secured ) 1,707.46 1,707.46Interest accrued and due onborrowings (unsecured)-from banks - --from others 50.95 72.71Income received in advances 0.07 0.13Unpaid matured deposits and interestaccrued thereon( unsecured):-(see foot-note 3)-Fixed deposits 64.19 64.36-Interest accrued thereon 280.85 280.88Unpaid matured debentures andinterest accrued thereon (secured):-(see foot-note 4)-Debentures (Net off calls in arrears) 535.21 537.32-Interest accrued thereon 3,032.58 3,052.50Other Payable:-Employees dues 963.02 839.27Statutory liabilities 2,048.20 2,442.10Security received from others 76.07 75.77Other liabilities 1,813.95 1,648.49Total 12,282.41 12,878.77

Notes:(1) Others:-

(a) Loans aggregating to ` 1377.87 Lac (IDBI ` 627.74 Lac,ICICI ` 235.00 Lac, IFCI ` 287.66 Lac, LIC ` 138.97 Lac,GIC and its subsidiaries ` 88.50 Lac) are secured againstsecurities as mentioned in 3(b) below. {Refer Note27(5)(i)(b) and 27(5)(ii)}.

(b) Loan of ` 8.08 Lac from Government of Uttar Pradeshunder the Industrial Subsidised Housing Scheme issecured by 1st Mortgage of Land and tenamentsconstructed under the Scheme.Details of default notavailable.

c) Loan from IDBI under Technical Development FundScheme amounting to ` 74.70 Lac is secured againstElectrolyser and Copper Electrodes Machine.{Refer Note27(5)(i)(b)(i)}.

(d) Loan taken under Equipment Finance Schemeamounting to ` 46.20 Lac is secured against Effluenttreatment plant.{ Refer Note 27(5)(i)(b)(ii)} and loanrepayment is in default prior to year 1996 and interestpayable has not been paid since then.

(2) Finance lease rent of ` 79.06 Lac 1st October 2013, are overdue.

(3) Fixed deposits:-(a) Fixed deposits guaranted by managing directors ` 22.98

Lac (Previous year ` 22.98 Lac )

(b) Balance outstanding in Fixed deposits and interestpayable on fixed deposits has not been paid since 1989-90 {Also refer Note No. 27 (26)(b)}.

(4) Debentures:-(a) (i) 2,26,105-12.5% Mortgage Debentures (Non-

Convertible part of 200/- each) redeemable in threeyearly instalments of ` 65.00, ` 65.00 and ` 70.00respectively commencing from the expiry of seventhyear from the date of allotment i.e. 29th February,1988 and due for payment. Interest not paid since 29thFebruary, 1988.

(ii) 30,000-15% Mortgage Debentures of ` 100/- eachredeemable at 5% premium on the expiry of seventhyear from the date of allotment i.e. 18th December1987 and due for payment. Interest not paid since1987- 88.

(iii) 5,300-15% Mortgage Debentures of 1000/- eachredeemable upto 20th August, 1990 and due forpayment. 1,000 Debentures redeemed during the year1998-99 for which discharged debenture certificatesnot yet received. Interest not paid since 1987- 88.

(b) The above debentures are secured by Joint Mortgage ofall fixed assets present and future by hypothecation ofthe said assets and by deposit of title deeds relating tocompany’s immovable properties, floating charges on allmovable/current assets, other than assets referred in footnotes1(b,c,d) and foot note 1 of Note 6.

Note no. 9 : SHORT-TERM PROVISIONS(` in Lac)


Provision for employee benefits:-Provision for gratuity:-

As per last balance sheet 284.70 277.52Add: Provided during the year 115.09 108.49Less: Paid during the year 122.96 101.31

Sub total (A) 276.83 284.70Provision for leave encashment:-


Sub total (B) 8.74 11.09Others:-Provision for Incentive:


Sub total 38.42 32.47Provision for excise duty 317.16 351.11

Provision for income tax 0.24 0.53Sub total (C) 355.82 384.11TOTAL (A+B+C) 641.39 679.90


5.20


Note no. 12 : NON CURRENT INVESTMENT(` in Lac)


Trade investments - -Other investments(a) Investment in Equity Instruments:-

Unquoted:-10,50,000 fully paid-up shares of` 10/-each in Indofil Industries Limited 437.43 437.431,200 partly paid-up shares of ` 10/-each in Vital Chemicals Private Limited.(Transfer refused by the Board-matterin dispute before the Court). 0.07 0.0786,750 Fully paid-up shares of ` 10/-each in Modi Spining & weaving MillsCo.Ltd.{Note(27)(27)(b)} 8.68 8.68Less: Provision for Diminution in valueof Shares (8.68) -95,000 Fully paid-up shares of ` 10/-each in Xerox india Limited 9.50 9.5040,000 Fully paid-up shares of 10/- eachin Modi Hightech India Limited 4.00 4.0048,000 Fully paid-up shares of ` 10/-each in Win Medicare Private Limited 4.80 4.8010,000 Fully paid-up shares of ` 10/-each in Modigarh Chemicals Pvt. Ltd. 1.00 1.0020,000 Fully paid-up shares of ` 10/-each in Modi Santa Fe India Pvt. Ltd.{Note(27)(27)(b)} 2.00 2.00Less: Provision for Diminution invalue of Shares (1.56) -4,000 Fully paid-up shares of ` 10/-each in Bekaert Engg. (India) Pvt. Ltd.{Note(27)(27)(b)} 0.40 0.40Less: Provision for Diminution invalue of Shares (0.19) -17,350 Fully paid-up shares of ` 100/-each in Rajputana Fertilizers Ltd. - -17,350 Fully paid-up shares of` 100/-each in Haryana Distillery Ltd. # - -1500 Fully paid-up shares of ` 100/-each in Associated Drilling and ServicesLimited. {Note(27)(27)(b)} 1.50 1.50Less: Provision for Diminution invalue of Shares (1.50) -Quoted:-7,00,000 fully paid-up shares of ` 10/-each in Modipon limited. 20.00 20.0019,99,960 fully paid-up shares of ` 10/-each in Bihar Sponge Iron limited.{Note (27)(27)(a)} 200.00 200.00Less: Provision for Diminution invalue of Shares (148.80) -8,00,000 fully paid-up shares of ` 10/-each in Modi Rubber Limited. 80.00 80.0062,755 fully paid-up shares of ` 10/-each in Lord Chloro Alkali Limited 6.28 6.28

Less: Provision for diminution in Value -4 fully paid-up shares of ` 10/-each inMukund Limited. 0.01 0.01

(b) Investment in preference shares:-(Quoted )1 fully-paid preference Share of` 10/-each in Mukund Limited - -Unquoted:-67 Fully paid-up shares of ` 100/-each in Modi Spg. & Wvg. Mills Co. Ltd. 0.07 0.07

(c) Investment in Government or trust securities:-(Quoted )*75551.226 fully-paid Units in U T IInfrastructure Fund-Growth Plan 25.84 25.84Total 640.84 801.58

* Corporate lien marked on these infrastructure fund units# The relevent Share certificate for above shares not yet received and thecompany has applied for duplicate share script.

Foot Notes:(1) Carrying amount of quoted

investments 306.29 306.29(2) Market value of quoted investments 529.68 392.01(3) Carrying amount of unquoted

investments 495.29 495.29(4) Aggregate provision for dimunition

in value of investments{ Note 27(27)} 160.73 -

(` in Lac)


Capital advances 30.55 -(Unsecured considered good)Less : Allowance for Doubtful 1.90 1.90Security Deposits:-- Secured, considered good (1.90) (1.90)- Unsecured, considered good - -- Related parties: 36.66 36.66- Others 164.12 166.79- Doubtful - 1.00Less Allowance for Doubtful - (1.00)Loans and advances to related parties - -Other Loans and Advances:-(Unsecured, considered good)(a) Prepaid expenses 1.33 2.87(b) Amount recoverable 11.46 11.46(c) Loans to employees - -(d) Loans to othersZA 8.00 8.00

TOTAL 252.12 225.78

Note no. 12 (Contd.)(` in Lac)



Note no. 14 : INVENTORIES(` in Lac)


(a) Raw materials 146.46 495.93(b) Raw materials (in transit ) 220.87 60.65(c) Work-in-progress 185.42 335.37(d) Finished goods 4,499.71 5,575.71(e) Stock-in-trade 1.89 1.19(f) Stores and spare parts 939.95 948.67(g) Loose tools 24.36 24.27

TOTAL 6,018.66 7,441.79

Note no. 15 : TRADE RECEIVABLES(` in Lac)


Trade receivables outstandingfor a period exceeding 6 months:--Secured, considered good 4.56 4.54-Unsecured, considered good 677.21 648.06-Doubtful 827.89 702.58Less:-Allowance for bad and doubtful debts (827.89) (702.58)Other Debts:--Secured, considered good 91.08 93.79-Unsecured, considered good 4,862.92 5,264.24-Doubtful 2.54 7.84Less:-Allowance for bad and doubtful debts (2.54) (7.84)

TOTAL 5,635.77 6,010.63

Note no. 16 : CASH AND BANK BALANCES( in Lac)


(i) Cash and cash equivalents:-(a) Balances with banks:

-In Current Accounts 550.10 1,263.10-In FDR’s 2.45 35.01

(b) Cheques, drafts on hand 34.94 37.49(c) Cash on hand 17.51 15.04(d) Others:-

-Postage imprest &stamps in hand - 0.01

TOTAL 605.00 1,350.65

(ii) Other bank balances:-(a) Earmarked balance with

banks/post office:--Saving account(molasses storage fund) 0.36 0.35-Fixed deposits (molassesstorage fund)* 7.67 47.63

(b) Fixed deposits with banks(Pledged with Excise/Sale Tax /P.F. Authorties) 81.05 20.49

(c) Fixed deposits with banks(Pledged with tender) 46.42 38.74

(d) Fixed Deposits with Banks(Pledged against overdraft) 310.33 286.51

(e) Balance with banks heldas margin money againstguarantees 330.00 313.26

(f) Bank deposits with upto12 months maturity 35.88 54.12

(g) Bank deposits with more than12 months maturity 99.07 91.00

(h) Deposits with Bankin-no lien accounts 395.00 395.00

TOTAL 1,305.78 1,247.10* These FDR’s are in the joint name of Modi Sugar Mills and SubInspector, Molasses Excise.

(` in Lac)Particulars As at As at

31.03.2016 31.03.2015(a) Loans and advances to related parties:-(i) -Secured considered good - -(ii) -Unsecured considered good

-Bihar Sponge Iron Ltd. 1.47 1.36-Win Medicare Pvt. Ltd. 1.15 1.37-Modipon Limited 8.69 9.06-Managing Director(Mahendra Kumar Modi)* - 0.49

(iii) -Doubtful-Modi Senator Pvt. Ltd. 0.85 0.85- Technicast Engineering Ltd. 0.51 0.51Less:Allowance for doubtful (1.36) (1.36)

(b) Others (unsecured, considered good):-(i) Unutilized balances of CENVAT/ VAT 93.93 99.87(ii) Loans & Advances to employees 9.01 12.59(iii) Prepaid expenses 113.05 109.77(iv) Amount recoverable 212.56 190.86(v) Deposits with excise /

sales tax authorties 8.08 8.08(vi) Others 204.11 189.82(vii) Unreconciled Inter-unit balances

{ Note 27 (4) and 37 } 1,029.36 992.24(c) Others (doubtful):-(i) Loans & Advances to employees 3.00 2.97(ii) Amount recoverable 24.55 23.99(iii) Others 95.48 102.16

Less: Allowance for doubtful (123.03) (129.12)(d) Security Deposits:-

-Secured considered good 18.50 --Unsecured considered good 133.30 190.99-Related parties(Unsecured considered good):-Ashoka Mercantile Ltd.{Foot-Note 7 of Note 27(32)} 798.30 867.80-Modipon Limited 147.63 147.63-Doubtful 48.84 8.13Less: Allowance for doubtful (48.84) (8.13)

TOTAL 2,779.14 2,821.93* Recovered Subsequently.

Note no. 16 (Contd.)(` in Lac)



Note no. 18 : OTHER CURRENT ASSETSParticulars As at As at

31.03.2016 31.03.2015

Tax deducted at source 111.36 85.78Wealth tax receivable 7.37 7.37Interest accrued on fixeddeposits with banks 41.10 52.07Amount recoverable {Note 27(24)} 1,457.09 2,218.72Interestreceivable on Security deposit

-Ashoka Mercantile Ltd. 64.07 71.00Rent receivables:- -Unsecured, considered good 1.87 1.82 -Doubtful 22.78 22.78Less:-Allowance for bad and doubtful debts (22.78) (22.78)Deferred revenue expenditure 11.07 11.07Stores and spare parts * 10.67 10.67

TOTAL 1,704.60 2,458.50

*Net value of Store & spare parts of Vanaspati Unit which is lyingclosed since 2002.

Note no. 19 : REVENUE FROM OPERATIONS(` in Lac)


Sale of products 35,421.02 35,417.41Sale of services 102.17 47.87Other operating revenue 49.63 64.49Subsidy on Cane Commission 162.40 474.08

TOTAL 35,735.22 36,003.85

Note no. 20 : OTHER INCOME(` in Lac)


Interest income 175.39 175.26Dividend received (gross) 52.50 42.00Rental income 207.29 216.92Profit on sale of fixed assets 5.01 10.12Profit on sale of non current assets heldfor disposal (Refer foot note (G) of note 10) 4.13 -Excess provision written back 24.11 16.85Unclaimed Credit Balances W/Back 38.42 22.37Amounts written back 17.89 3.21Depreciation Written Back 1.96 4.17Foreign Currency fluctuation gain (Net) - 18.86Other non-operating income 22.92 121.71Miscellaneous Income 2.51 -Claim received on fire (net) - 11.04

TOTAL 552.13 642.51

(` in Lac)

Particulars For the For the

year ended year ended31.03.2016 31.03.2015

(A) Finished goods

Opening stock 4,996.84 7,035.65

Less: Closing stock 4,365.36 4,996.84

Sub Total (A) 631.48 2,038.81

(B) Stock in trade



Sub Total (B) (0.70) 0.46

(C) Goods in process



Sub Total (C) 149.95 104.28

(D) By Product



Sub Total (D) 444.52 (68.36)

Net (Increase) / Decreasein Stock (A+B+C+D) 1,225.25 2,075.19

Note no. 22 : EMPLOYEE BENEFITS EXPENSES

(` in Lac)Particulars For the For the


Salary, wages, gratuity &

other allowances 2,876.54 2,833.52

Contribution to provident and

other funds 202.11 206.48

Staff welfare expenses 269.87 297.36

TOTAL 3,348.52 3,337.36


Note no.25. BASIS OF PREPARATION

(i) These Consolidated Financial Statements have beenprepared to comply in all material aspects with applicableaccounting principles in India, the applicable AccountingStandards prescribed under Section 133 of the CompaniesAct, 2013 [‘Act’] read with Rule 7 of the Companies(Accounts) Rules, 2014, the provisions of the Act (to theextent notified) and other accounting principles generallyaccepted in India, to the extent applicable and in particularAccounting Standard 21(AS 21)-‘Consolidated FinancialStatements’.

(ii) The list of Companies which are included in consolidationand the Parent Company’s holdings therein are as under:

Name of the Company Percentage holding2016 2015

Own Investment (India) Limited 99.89% 99.89%Your Investment (India) Limited 99.93% 99.93%

Each of the above Companies is incorporated in India andfinancial statements are drawn up to the same reportingdate as that of the parent Company i.e. 31st March, 2016.

(` in Lac)Particulars For the For the


Note no. 24 : (Contd.)Note no. 23 : FINANCE COSTS(` in Lac)


(a) Interest expenses:- {Note 27(4)(f)(i) & (ii), 27 (5) and 27(16)}(i) On borrowings 578.13 724.63(ii) On statutory dues 8.83 22.23(iii) On trade payable 47.62 472.92(iv) On security 5.51 5.38(v) On Finance Lease - -(vi) On Loan from Corporate 1.06 -(vii) On car loans taken by

employees / corporate adviser 1.98 2.32(viii) On others 0.91 0.91

(b) Other borrowing costs - -(c) Net gain/loss on foreign currency - -

transactions and translation

TOTAL 644.04 1,228.39

Note no. 24 : OTHER EXPENSES(` in Lac)


Consumption of stores & spare parts 403.73 406.46Consumption of packing materials 1,600.38 1,284.78Power & fuel 341.34 467.93Packing & Filing Expenses 40.04 -Repairs to machinery 670.09 678.20Repairs to building 71.05 46.19Lease rent 130.56 151.30Rates & taxes 339.03 252.67Excise duty on stock 35.89 (18.94)Insurance 44.39 50.54Auditor’s remuneration(see foot-note below) 23.54 23.64Service Tax 9.09 -Loss on sale of fixed assets 9.15 0.01Loss on sale of stores - 5.28Stores Written Off 0.19 -Less: Adjustment of provisionfor obsolete stores - (1.16)Donations 0.77 0.97Bad debts written-off 41.51 22.86Less : Adjustment of provisionfor doubtful debts (36.74) (13.40)Claims / amounts written-off 11.88 10.58Less : Adjustment of provisionfor doubtful (8.01) (10.58)Fixed assets written-off 0.79 0.16Provision for obsolete spare-parts & stores 16.15 5.36Provision for Raw Material 10.00 -Provision for doubtful debts, advancesand Security Deposits 199.37 119.01

Rent paid on Cylinders 8.84 -Freight/ transport & forwarding 502.64 522.77Commission to selling agents 490.64 308.17Discount & sale promotion 1,075.30 370.25Advertisement expenses 121.54 162.15Travelling expenses 266.16 283.09Legal & professional charges 291.81 184.81Trade mark licensce & marketing fees 148.37 -Job work charges 46.83 11.64Retainership Expenses 208.11 237.37Net gain/loss on foreign currencytransactions & translaion 14.52 -Provision for dimunition in value oflong term investments 11.94 -Other general expenses 532.23 555.40

TOTAL 7,673.12 6,117.51

Foot-note :Auditor’s remuneration:-(a) As auditors 8.21 7.41(b) For taxation matter (Tax Audit fee) 6.58 6.49(c) For Company Law matters - -(d) For management services - -(e) For other services including

certification work 7.09 7.61(f) For reimbursement of expenses 1.66 2.13

TOTAL 23.54 23.64


(iii) The Consol idated Financial Statements have beenprepared to comply in al l material respect with theAccounting Standards notified by Companies (AccountingStandards) Rules, 2006 (as amended) and the relevantprovisions of the Companies Act, 2013.

(iv) The Consolidated Financial Statements have beenprepared under the historical cost convention on anaccrual basis, except where revaluation/ impairment ismade.

(v) The Accounting Policies have been consistently applied bythe Company and are consistent with those used in theprevious year.

(vi) The Consolidated Financial Statements of the Companyand its Subsidiary Companies have been consolidated ona line-by-line basis by adding together the book value oflike items of assets, liabilities, income and expenses, afterfully eliminating intra-group balances and intra-grouptransactions resulting in unrealized Profits/Losses.

(vii) The Consol idated Financial Statements have beenprepared using uniform accounting policies for l iketransactions and other events in similar circumstances andare presented, to the extent possible, in the same manneras the Company’s separate financial statements except asstated in notes on accounts.

(viii) Minority Interest in the net assets of consol idatedsubsidiaries is identified and presented in the consolidatedBalance Sheet separately from liabilities and equity of theCompany’s shareholders.Minori ty interest in the net assets of consolidatedsubsidiaries consists of:(a) The amount of equity attributable to minority at the date

on which investment in a subsidiary is made; and(b) The minority share of movements in equity since the

date parent subsidiary relationship came intoexistence.

(ix) Minority Interest’s share of Net Profit/(Loss) for the year ofconsolidated subsidiaries is identified and adjusted againstthe profit/loss after tax of the group.

26 ACCOUNTING POLICIES:(1) INVENTORY VALUATION

(a) Stocks of raw materials and stores and spares arevalued at weighted/moving average cost. (Net ofCenvat benefits/input tax credit of U.P.VAT) or netrealizable value whichever is less.

(b) Loose tools are valued at depreciated cost.(c) Cost of machinery spares, which can be used only in

connection with an item of fixed asset and whose useis expected to be irregular, are charged to revenueover useful life of the principal item.

(d) Goods-in-transit are valued at cost.(e) Finished goods/Goods-in-Process are valued at lower

of cost and net realisable value except by-product i.e.molasses which is valued at net realizable value. Costinter-alia, includes direct cost, depreciation, exciseduty, lease rentals and factory overheads but excludesgeneral administration and selling expenses,Corporate Off ice administration expenses andinterest. The closing stocks out of inter divisional

transfer of goods, is being treated as finished goodsinstead of raw materials/stores and valuedaccordingly.

(2) FIXED ASSETS( i) Major improvements to fixed assets that increases the

future benefits from the existing assets beyond itspreviously assessed standard of performance isincluded in the gross block and is depreciated over theremaining life of the original assets.

(ii) Financing cost (upto the date the assets are ready tobe put to use for commercial production) relating toborrowed funds attr ibutable to acquisition ofconstruction of fixed assets are included in the grossbook value of fixed assets to which they relate.

(3) DEPRECIATION(a) Depreciation on Plant & Machinery is provided on

Straight Line Method except in Corporate Office. Inrespect of other assets including Office Equipments,depreciation is provided on Written Down ValueMethod in all units except Sugar and Steel Units whereit is provided on Straight Line Method.

(b) Depreciation on additions/deletions is charged on prorata basis and in accordance with Schedule II of theCompanies Act, 2013.

(c) Depreciation on assets costing upto 5,000/- has beenfully depreciated in the year of purchase.

(4) INTANGIBLE ASSETS:Intangible assets are stated at cost of acquisition lessaccumulated amortization. Computer Software isamortized over a period of five years.

(5) REVENUE RECOGNITION:( i) Export incentives under the duty entitlement pass

book scheme is recognized on accrual basis.(ii) Revenue arising by use of Company’s properties by

others yielding rent is recognized when no significantuncertainty as to measurability or collectability exists.

(iii) Sale of goods is recognized at the point of dispatch ofgoods to customers.

(6) INVESTMENTS:Long-term investments are valued at cost less provision fordiminution, other than temporary, in the value ofinvestments.

(7) RETIREMENT BENEFITS:(a) Contribution to Provident Fund is made at a

predetermined rate to the Provident Fund Trust andcharged to the Statement of Profit and Loss on accrualbasis.

(b) Gratuity Liability is accounted for on accrual basis,computed actuarially, except for Steel Unit upto 31st

March, 2002 which is accounted for on cash basis.(c) Leave encashment is accounted for accrual basis,

computed actuarially.(8) OPERATING LEASE:

Lease payments under an operating lease are recognizedas an expense in Statement of Profit and Loss on a straightline basis over the lease term.


27. CONTINGENT LIABILITIES AND OTHER NOTES:(` in Lac)

As at As at31.03.2016 31.03.2015

1. (a) Claims against the Companynot acknowledged as debts :(i) Workmen (excluding

unascertainable amounts) 329.76 290.24(ii) Others 244.31 234.42

(b) Partly paid-up Equity Shares ofVital Chemicals Private Limited 0.08 0.08

(c) Disputed Liability for Excise-duty,Sales-tax, Entry-tax matters andliquidated damages on ProvidentFund dues {excluding interestunascertainable and undisputedSales Tax/ penalty demands(net of provision made of` 62.21 Lac) of ` 175.24 Lac} 1537.57 1378.50

(d) Income Tax 209.59 209.59(e) Bills discounted 148.59 200.21

2. Estimated amount of contracts remaining to be executed onCapital Account 337.57 Lac (Previous Year 63.12 Lac).

3. Guarantees given to Sales-tax/Excise Departments on behalfof Companies in the same group amounts to `139.42 Lac(Previous year 139.42 Lac). Information regarding outstandingposition is not available. This excludes guarantees of 109.63Lac (Previous year `109.63 Lac) vacated by Sales TaxDepartment for which guarantee bonds not yet received back.

4. (a) The Steel Unit is lying closed since 24th January, 1993 dueto strike/lock-out and thereafter closure was declared witheffect from 24th November, 1993, as the Unit was found tobe unviable. The Company has not been able to obtainaccess to the accounting, financial and production recordsof the unit necessary for updating the said books ofaccounts/compiling the data to prepare the annualaccounts as well as for finalizing the audit for the year ended31st March, 1993. Transactions subsequent to the closureof the unit could not be incorporated in the annual accountsof 1992-93 and onwards in view of pending access to theearlier accounts viz., 1st April, 1992 to 24th January, 1993,the absence of which would leave the books sti l lincomplete. However, the Statement of Profit and Loss forthe current financial year 2015-16 and from 1993-94 to2014-15 have been incorporated in current financial yearand in various previous financial years respectively. As aninterim measure 1026.73 Lac (Previous year 992.24Lac) which represents: (i) 1694.81 Lac (Previous year`1,463.43Lac) being net cumulative inter-unit debitbalance on account of transactions of other units of theCompany with Steel Unit during 1st April, 1992 to 31stMarch, 2016, (ii) payment of unsecured loan of 45.00 Lac{Refer Note (c) below} and (iii) net loss of 623.08 Lac forthe years 1993-94 to 2015-16 (before inter unit rentalincome, write-back of ` 278.95 Lac and provision fordepreciation of 696.19 Lac) have been clubbed withCurrent Assets of the Company as on 31st March, 2016 and31st March, 2015 respectively as “Inter- Unit Balances”pending incorporation of (i) Annual Accounts for the period1st April, 1992 to 31st March, 1993 and (ii) assets and

liabilities including inter unit balances arising on account oftransactions for the period 1st April, 1993 to 31st March,2016.

(b) The f inancial results for the year 1992-93 would beincorporated as soon as the Company is able to obtainaccess to/reconstruct the financial, accounting andproduction records.

(c) In view of above, as per past practice, the audited openingbalances of Assets and Liabilities, quantitative details,contingent liabilities {excluding old electricity dues – ReferNote 4f(viii)} and notes of the Steel Unit as on 1st April, 1992,subject to ( i) reduction of unsecured loans taken by`278.95 Lac in view of write back on account of one-timesettlement (O.T.S.) of dues with Hong Kong and ShanghaiBanking Corporation Limited (HSBC) during the year 2004-05, and further reduction of ` 45.00 Lac on account ofpayment during 2005-06 of O.T.S. to H.S.B.C.; ( i i )reduction of fixed assets (net) by `696.19 Lac beingdepreciation provided during 1993-94 to 2015-16 on fixedassets and (iii) decrease in Inter-Unit balance by 668.08Lac which represents; the sum of net loss of 623.08 Lacfor the years 1993-94 to 2015-16 (before inter-unit rentalincome, write-back of above amount of 278.95 Lac andprovision for depreciation of 696.19 Lac) and repaymentof unsecured loan of `45.00 Lac. The above inter-unitbalance will actually represent either net increase in assetsor net decrease in liabilities as on 31st March, 2016 overbalances as on 31st March, 1993 of the Steel Unit.

(d) Assets and Liabilities of the Steel Unit incorporated in theBalance Sheet of the Company as on 31.03.2015 and31.03.2016 are as under:

(` in Lac)


( e) Statement of Profit and Loss of the Steel Unit for the yearended 31st March, 2016 and 31st March, 2015 (excludinginter-unit rental income of `46.12 Lac) (Previous year`46.12 Lac) is as under:

(` in Lac)


INCOME :Rental Income 185.97 192.25Profit on sale of fixed assets - 3.54

185.97 195.79EXPENDITURE :Employees Benefit Expenses 109.23 100.07Finance Cost 232.29 179.67Depreciation 6.81 6.82Legal and Professional Expenses 1.46 1.47Other Expenses 39.88 389.67 39.34 327.37Profit/(Loss) for the year 203.70 131.58

(f) The Profit and Loss Account/Statement of Profit and Lossof Steel Unit for the years 1993-94 to 2015-16 are subjectto the following notes on accounts:-(i) In view of non-availability of book balance of liabilities

towards PNB, IDBI and IFCI in the books of Steel Unitof the Company on account of non-incorporation ofannual accounts and balance sheets of Steel Unit{Refer Note 27 (4) (a to c) of Annual Accounts}, thedifference between OTS amounts and book balancescould not be ascertained.

(ii) No-provision of interest, amount unascertained, isrequired to be made, on loans from other FinancialInstitutions as the existing amounts appearing in thebooks of accounts of the Company will be more thansufficient in view of in-principle approval/discussionsbeing held for one time settlement of dues with theFinancial Institutions.

(iii) The impact, if any, on account of non-availability andconsequently non incorporation of audited openingbalances of assets and liabilities of the Steel Unit as on1st April, 2015;

(iv) Non-provision of obsolete/damaged stocks and fixedassets, if any, in view of non-incorporation of earlieryear ’s accounts and non-physical verif ication ofinventories and fixed assets as on 31st March, 2016;

(v) Non-confirmation/reconci l iat ion of balances ofdebtors, creditors, banks, financial institutions etc. andimpact, if any, on the Statement of Profit and Loss;

(vi) Non-provision of doubtful debts and loans & advances,amount unascertained;

(vii) Non-provision of Impairment, if any, of the fixed assetsas per Accounting Standard (AS 28) i.e. Impairment ofAssets, amount unascertained.

(viii) (a) Uttar Pradesh Electricity Board (now U.P. PowerCorporation Ltd.) raised various demand noticesagainst electricity dues and late paymentsurcharge amounting to `2435.48 Lac on theSteel unit of the Company.

(b) In terms of One Time Settlement with U.P. Power

Corporation Limited regarding arrears ofelectricity dues, the Steel unit paid during the year2009-10 `563.90 Lac against the demand of`1123.99 Lac included in (vii i)(a) above.Accordingly shortfall in provision of 243.37 Lachas been charged to revenue during the year2009-10.

(c) The Company filed writ petition in Allahabad High Courtchal lenging the said demand notices. The Hon’bleAllahabad High Court dismissed the writ petition filed by theCompany. The Company filed Special Leave Petition (SLP)with the Hon’ble Supreme Court of India, who has grantedinterim stay on 14th March, 2005 for stay of recovery by wayof sale of property which is still continuing.In view of the above and pending incorporation of annualaccounts of Steel Unit for 1992-93, no provision isconsidered necessary against the balance demand of`1311.49 Lac at this stage.

5. With respect to the assignment of debt, the views of both theManaging Directors are stated herein below:-(i) Shri U.K. Modi submits that:-

“(a) During the year 2006-07, an agreement dated 22nd

January, 2007 for One Time Settlement (OTS) of duesof Punjab National Bank (PNB) was entered intobetween the Company, PNB, Shri U.K. Modi (asGuarantor) and SBEC Sugar Limited (SSL), on theterms as contained in the PNB’s Letter dated 28th

September, 2006. Under the said agreement, PNB hasagreed to assign all its claims against Steel Unit of theCompany together with all securities and chargescreated by the Company to SSL on payment of fullsettlement amount of `2810.60 Lac together withinterest. SSL made full payment to PNB of thesettlement amount together with interest. PNBthereafter executed a Deed of Assignment on 15th May,2012 in favour of SSL by which PNB assigned all itsclaims together with all securities and charges createdby the Company in its favour to SSL. The Registrar ofCompanies has registered the modif ication to thecharges in favour of SSL. The debts of MIL which wasassigned to SSL has been further assigned to SBECBioenergy Limited (SBEL) on 31st December, 2012. Inview of the above, the secured debt is now payable bythe Company to SBEL. The Company proposes toenter into revised terms of payment of this secured debtwith SBEL.

(b) (i) With reference to the Company’s liabilities to IDBILimited, a settlement agreement was concludedbetween the Company, IDBI Limited and SBECBio Energy Limited (SBEL) on 6th October, 2007.This settlement agreement was in terms of IDBI’sletter dated 9th February, 2007. Under the saidagreement IDBI agreed to assign its entire debtdue and payable by the Company to SBEL subjectto SBEL paying to IDBI its OTS claim amount of`1232.20 Lac. Acting on the said agreement,SBEL made a payment of 1232.20 Lac to IDBItogether with interest. The said payment to IDBI of`1232.20 Lac along with interest was completedon 6th October 2007. IDBI’s claim against this


Company stood assigned to SBEL together withthe securities and charges and the said debt isnow payable by this Company to SBEL.The Hon’ble BIFR vide its orders dated 12th

December, 2011 and 19th April, 2012 recognizedSBEL as this Company’s creditor in place of IDBIand by an order dated 17th July, 2012 directedIDBI (OA) to execute the Deed of Assignment infavour of SBEL. The Company proposes to enterinto fresh terms of payment of the IDBI’s assigneddebt with SBEL.

(ii) With reference to this Company’s liabilities to IFCILimited, a settlement agreement dated 30th

December, 2009 was concluded between thisCompany, IFCI Limited and SBEC Bio-EnergyLimited (SBEL). This settlement agreement wasin terms of IFCI’s letter dated 30th December,2009. Under the said settlement agreement, IFCIagreed to assign to SBEL its entire debt as dueand payable by this Company to it subject to SBELpaying to IFCI its OTS claim of `775.00 Lac.Acting on the said settlement agreement, SBELmade a payment of 775.00 Lac to IFCI on 30th

December, 2009 and in consideration thereofIFCI Limited executed a Deed of Assignmentdated 19th April, 2012 and assigned its all claimsagainst this Company together with the securitiesand charges in favour of SBEL. The Registrar ofCompanies has registered the modification to thecharges in favour of SBEL. The said secured debtis payable by this Company to SBEL. TheCompany proposes to enter into fresh terms ofpayment of this debt with SBEL.

(iii) At the hearings before the Hon’ble BIFR and withthe consent of Advocates for Shri U.K. Modi andShri M.K. Modi, the Hon’ble BIFR passed ordersand issued directions in M.A. No. 754/BC/2011(filed on behalf of Shri U.K. Modi) and clarified thatthe OA shall consider the representations fromShri U.K. Modi, Shri M.K. Modi, Shri D.K. Modiand also from SBEC Bioenergy Ltd. and SBECSugar Ltd.

(iv) The Bench directed that, SBEC Bioenergy andSBEC Sugar be heard and consulted by IDBI(OA) in connection with the preparation of theDRS.

(v) In the order dated 22nd June, 2012 the Hon’bleBIFR observed and noted that IFCI and PNB haveexecuted deeds of assignments in favour ofSBEC Bioenergy Ltd. and SBEC Sugar Ltd.respectively after receiving entire OTS amountalong with interest, whereas the IDBI hasreceived the entire OTS amount along withinterest and had only entered into an agreementto transfer all the rights, title and interest in theFinancial Assistance/ Financial Instruments andthe underlying securities in respect thereof to theApplicant (SBEC Bioenergy) of MA No. 224/BC/2012 but has not executed the deed ofassignment. The Bench also observed that the

IDBI, vide their letter dated 7th May, 2012 hasapproached BIFR regarding the execution of theassignment deed in respect of assignment of debtto the applicant (SBEC Bioenergy Ltd.).

(vi) The BIFR by its order dated 22nd June, 2012allowed MA No. 224/BC/2012 and directed thatthe name of Applicant (SBEC Sugar Ltd.) besubstituted for PNB and the name of the Applicant(SBEC Bioenergy Ltd.) be substituted, in place ofIFCI, as the deed of assignment has since beenexecuted.

(vii) In the proceedings held on 17th July, 2012, theHon’ble BIFR directed IDBI to execute the deed ofassignment in favour of the Applicant (SBECBioenergy Ltd.), with respect to the assignment ofits claims against this Company together withsecurit ies and charges in favour of SBECBioenergy Ltd. subject to the various otherdirections stated therein.

(viii) Pursuant to the order passed by AAIFR,Shri U.K. Modi and Shri M.K. Modi have nowsubmitted their separate Draft Rehabilitationproposals to the IDBI.

(ix) Shri D K Modi had filed 2 Appeals before theAAIFR being Appeal No. 206/2012 and 207/2012challenging the orders dated 22nd June 2012 and17th July 2012 passed by the BIFR. By two ordersboth dated 15th April 2013, the AAIFR has setaside the orders dated 22nd June 2012 and 17th

July 2012 and remanded the matter back to theBIFR with directions to consider the MA No.s 224/BC/2012 and 226/BC/2012 afresh after hearingShri D K Modi and proceed further in accordancewith law.

(x) Shri U K Modi had also filed an Appeal before theAAIFR, being Appeal No. 178/12 challenging theorder dated 17th July 2012 passed by the BIFR.

(xi) The aforesaid Appeal No. 178/2012 was heard on20th November 2013 and the Hon’ble AAIFR, afterhearing the submissions of the parties, has beenpleased to allow the Appeal, set aside the orderand remanded the matter back to BIFR with thefollowing directions:“Since the order has already been set aside asabove, we make it clear that all the matters beforeBIFR, including MA 224 of 2012 wil l beconsidered by the Board on remand afresh givinga reasonable opportunity of hearing to allconcerned. It is also made clear that all the issuesraised before us in the appeals by the respectiveparties are kept open and will be considered andadjudicated by the Board afresh. In decidingmatters afresh, the Board, needless to mention,will not be influenced by its said earlier orderwhich, as aforesaid was set aside.”The Appeal preferred by SBEC Bioenergy Ltd.before the AAIFR was challenging the wrongfuland arbitrary imposition of conditions on theexecution of Deed of Assignment by IDBI in favour


of SBEC Bioenergy Ltd., which has since beenset aside by the AAIFR. In fact, the AAIFR hasclearly stated that all issues raised by SBECBioenergy Ltd. in Appeal No. 178/12 are keptopen and would be agitated before the BIFR.Therefore, in view of the above, it is clear thatSBEC Bioenergy Ltd. and SBEC Sugar Ltd. arethe secured creditors of MIL and continue to be soas assignees of the respective debts of IDBI, IFCIand PNB.Shri M K Modi submits that AAIFR Order dated20th November, 2013 in Appeal No. 178/2012,nowhere recognizes SBEC Bio-energy Ltd. andSBEC Sugar Ltd. as being Secured Creditors ofMIL or the assignments in their favour to be validand/or legal.As per Shri U K Modi, the above contention of ShriM K Modi is incorrect. It is a matter of record thatthe Hon’ble BIFR vide i ts orders dated 12th

December, 2011 and 19th April, 2012 has alreadyrecognized SBEC Bioenergy Ltd. and SBECSugar Ltd. as MIL’s secured creditor and it is inthis capacity, the applications for substitutionwere moved before the BIFR. By virtue of theorder dated 20th November 2013, the AAIFR hasremanded the matter back to BIFR for freshconsideration.

(ii) Shri M.K. Modi disagrees with the above statements andsubmissions made by Shri U.K. Modi as the same are notcorrect.Shri M.K. Modi submits that –(a) That the said settlements based on assignment in

favour of one of the Managing Directors of theCompany are neither legal nor binding and are withoutapproval of the Board. The same are also contrary tothe 1989 Modi Family MOU, the agreement betweenthe two Managing Directors, the Board Resolution andthe “Status Quo” order of Hon’ble Supreme Court ofIndia.

(b) Without prejudice to what is stated in para (i) above,assignments and the terms of payment etc. shall begoverned by the directions to be passed by Hon’bleBIFR.

(c) Hon’ble BIFR has, in the proceedings of the hearingheld on 19th April, 2012, already directed IDBI (OA) toassess the liabilities of each unit of the Company(Group wise) and while making an assignment to UKMGroup Companies, to see that the security charged toBanks/FIs belonging to his own units are assigned andthe security belonging to MKM Group is to be freed. Itis thus abundantly clear that the security pertaining tohis own units only is to be charged to SBEC BioenergyLtd and SBEC Sugar Ltd.

(d) By virtue of AAIFR’s orders dated 15.04.2013 :(i) BIFR’s order dated 22.06.2012, whereby SBEC

Bioenergy Ltd. and SBEC Sugar Ltd. weresubstituted in place of IFCI and PNB respectively,has been set aside; and

(ii) BIFR’s order dated 17.07.2012, whereby IDBIwas permitted to execute assignment deed in

favour of SBEC Bioenergy Ltd., has been setaside.

(iii) SBEC Bioenergy Ltd. and SBEC Sugar Ltd., thus,have no locus standi in the BIFR proceedings andare not recognized as creditors of MIL by BIFR.

(iv) MKM Group has, without prejudice to their legalcontentions in the matter, already approachedboth IDBI and IFCI for making payment of thedues pertaining to the six units undermanagement and control of Shri M.K.Modi onassignment basis subject to certain conditions.

Shri U.K. Modi disagrees with the above statements andsubmissions made by Shri M.K. Modi as the same are notcorrect. Shri. U.K Modi has commented as below:-It is clarified on the submission made by Shri M.K Modi thatthe Hon’ble BIFR vide its order dated 12.12.2011 haddirected IDBI (OA) to invite the secured creditors includingSBEC Bioenergy Ltd. and SBEC Sugar Ltd. for discussionsbefore finalizing any DRS. By a subsequent order dated19.04.2012, the Hon’ble BIFR has also directed that SBECBioenergy Ltd. and SBEC Sugar Ltd. be heard andconsulted by IDBI (OA) while preparing the DRS. Thereforeit is absolutely clear that SBEC Sugar Ltd. and SBECBioenergy Ltd. are secured creditors of MIL. This order of12.12.2011 has not been challenged by any party till dateand therefore the issue stands settled by the BIFR . In so faras the remand of the MAs is concerned, it is clarified thatthe matter has been remanded by Hon’ble AAIFR only onthe ground that Shri D K Modi be heard on the application.The setting aside of the orders dated 22.06.2012 and17.07.2012 are on a technical ground and not on meritstherefore the allegations that SBEC Sugar Ltd. and SBECBioenergy Ltd. do not have any locus standi in the BIFRproceedings or that they are not secured creditors areabsolutely incorrect and baseless.Thus as per Shri U.K. Modi, these liabilities will now bequantified with the assignees of PNB, IDBI and IFCI debts.Shri M.K. Modi disagrees with the above statements andsubmissions made by Shri U.K. Modi as the same are notcorrect. As the matter stands today, orders dated22.06.2012 and 17.07.2012 stand set aside by Hon’bleAAIFR and fresh order is required to be passed by Hon’bleBIFR. Hence, these orders do not give rise to any right/obligation to any party.Shri U.K. Modi disagrees with the above statements andsubmissions made by Shri M.K. Modi as the same are notcorrect. Though it is correct to say that the orders dated22.06.2012 and 17.07.2012 has been set aside by Hon’bleAAIFR but it is incorrect to say that SBEC Sugar and SBECBioenergy are not the secured creditors of MIL as the orderdated 12.12.2011 clearly recognizes SBEC Sugar andSBEC Bioenergy as a Secured Creditor. Hon’ble AAIFRhas directed BIFR to conduct a rehearing on the M.A’s 224and 226 of 2012 allowing the substitution of SBEC Sugarand SBEC Bioenergy in place of PNB and IFCI.As per Shri M.K.Modi the above contention of Shri U.K.Modi is incorrect.Shri U.K. Modi submits that IDBI vide its letter dated16.01.2015 again reiterated in unequivocal andunambiguous terms that their debt due from MIL has been


assigned in favour of SBEC Bioenergy Ltd on 06.10.2007.Shri M.K. Modi stated that there is no agreement betweenShri M.K.Modi and Shri U.K.Modi on this issue.

6. With respect to the rehabilitation scheme of the Company, theviews of both the Managing Directors are as below:-Shri M.K.Modi stated that:-As reported last year, Shri M.K. Modi had filed a Special LeavePetition before the Supreme Court of India on 27th July, 2010challenging the order dated 19th May, 2010 of Hon’ble Delhi HighCourt. The Hon’ble Supreme Court vide its order dated 27th

August, 2010 held that “the parties are directed to maintainstatus quo with regard to the management of the Company, butwe make it clear that this wi l l not in any way affect theproceedings pending before the Board for Industrial andFinancial Reconstruction and also the Appellate Authority(AAIFR).”Pursuant to the order dated 22nd June, 2011 passed by Hon’bleAAIFR, Shri M.K.Modi and Shri U.K.Modi had submitted theirseparate Draft Rehabilitation proposals to IDBI (OA).Subsequently, BIFR has heard the matter on various dates andpassed directions from time to time. The Operating Agency(IDBI) had submitted a DRS to BIFR in July, 2013, which is underconsideration of BIFR.As per Shri M.K. Modi the said DRS had been gone through byBIFR Consultant, who wanted some technical corrections to becarried out therein, which were duly carried out by IDBI (OA) andthe revised DRS was submitted to BIFR by the O.A.Shri U.K. Modi disagrees with the above statement made byShri M.K Modi. It is hereby clarified that the DRS received inJune, 2013 was returned by Hon’ble BIFR with a direction to theIDBI (OA) to revise the said DRS after updating the financialsfrom MIL. Subsequently a revised DRS was circulated by OAwhich was not acceptable. Thereafter the OA had filed tworeports on 06.09.2013 and 04.10.2013 pursuant to the meetingheld with all the promoters of MIL on 12.08.2013. In the saidreport OA informed the BIFR that only workable solution forrevival of MIL is through sale of all unproductive assets(including Modi Bhawan) and the Company’s net worth wouldbecome positive thereafter.Shri U.K. Modi further submits that:-Shri U K Modi vide letter dated 25th June 2013, had informed theOperating Agency – IDBI (OA), that the continued disputesamong family members has not only led to the delay inrehabilitation of the Company, but have also adversely affectedthe growth of the Company.The basic objective of the OA is to formulate a scheme for therehabilitation of the Company and not to settle family disputes,and as such it is humbly requested that the OA should ratherconcentrate on the rehabilitation of the Company, leaving thefamily settlement to courts.Shri U. K Modi reiterated that rehabili tation scheme beformulated for the Company as a whole without any split, andwith the conditions that the proceeds from sale of surpluscorporate assets are utilized for paying all the liabilities of theCompany i.e. Secured and Unsecured Loans, pressing andStatutory Liabilities of the Company be fully discharged and noamount shall be distributed among any Units.Shri U K Modi further clarifies that in the hearing held before theBIFR on 18th July 2013, the Board informed all the parties that

it had directed IDBI to circulate the DRS to all stakeholders andconduct joint meeting of stakeholders vide their letter dated 16th

July, 2013. Pursuant to this direction, a meeting of the ManagingDirectors and Shri D K Modi was called by IDBI on 12th August2013 at IDBI Towers, Mumbai.In the joint meeting held at IDBI Towers in Mumbai on 12th August2013, Shri U K Modi submitted another letter of even date andreiterated his proposal that the distribution of proceeds withoutpayment of liabilities would be unethical and can be construedas siphoning of funds out of the Company and the issueregarding division of assets of the Company should be left toCivil Courts.Shri. M.K Modi submits that:-The contents of Shri U.K. Modi’s letters dated 25.06.2013 and12.08.2013 travel beyond BIFR’s orders and as being againstthe 1989 Modi Family MoU, 2006 Agreement of Shri U.K. Modiwith Shri M.K. Modi, Shri U.K. Modi’s own earlier stand beforevarious Forums including his own case filed before Hon’bleDelhi High Court in 1998 which is still pending and the orders ofHon’ble Supreme Court of India in the matter.Shri M.K. Modi agrees that basic objective of Operating Agencyis to formulate a Scheme for rehabilitation of the Company. TheOA has in fact prepared such a scheme and submitted the sameto BIFR. Shri M.K. Modi disagrees with Shri U.K. Modi’sproposal to formulate a rehabilitation scheme without split asbeing a self serving and mala-fide suggestion of Shri U.K. Modi.Shri U.K. Modi disagrees with the above statements andsubmissions made by Shri M.K. Modi as the same are notcorrect.Shri M.K Modi disagrees with the above statements andsubmission made by Shri U.K. Modi as IDBI (OA) has alreadysubmitted the minutes of meeting to BIFR as well as to the threeModi’s and final DRS has also been submitted by IDBI (OA) toBIFR.Shri U.K Modi further submits:Subsequent to the said meeting held in Mumbai on 12.08.2013,Shri U K Modi submitted an email to IDBI on 23.08.2013acknowledging receipt of DRS which has been filed by IDBI on09.07.2013 as was mentioned during the meeting of thestakeholders in order to enable him to share comments on thesame. By this email, it was further reiterated that Shri U K Modiwill be supporting a scheme as a whole without any split with thecondition that the proceeds from sale of surplus assets would beutilised for payment all liabilities of the Company and no amountis distributed to any member of any group.By a letter dated 06.09.2013, IDBI informed the BIFR about theoutcome of the joint meeting held on 12.08.2013 in Mumbai.IDBI (OA) informed the BIFR that due to extreme polarizedsituation between the 2 fractions, there was no consensus onthe DRS. However, IDBI in its letter took note of the fact that anacceptable DRS would be possible i f the disputes anddifferences between the various promoter groups are resolved.Therefore, IDBI was well aware of the fact that a DRS is possibleto revive MIL by sale of assets which did not involve anyadjudication of disputes inter-se the promoter groups.By another letter dated 04.10.2013, IDBI (OA) had categoricallyinformed the BIFR that the only workable solution for revival ofMIL is sale of all unproductive assets (including Modi Bhawan)and the Company’s net worth would become positive. Upon thenet worth becoming positive, the Company would be de-


registered from BIFR and the civil disputes can be settledoutside the purview of BIFR.In the hearing held before the Hon’ble BIFR on 22.10.2013,representative of IDBI (OA) reiterated its recommendation onDRS vide their letter dated 04.10.2013 and submitted that theonly viable solution to revive the Company would be by sale ofall unproductive assets including Modi Bhawan. Since the letterof 04.10.2013 was not circulated by IDBI (OA) to all the partiesincluding Shri U K Modi, the counsel for Shri U K Modi as well asMKM and DKM requested the Bench to direct IDBI to circulatethe report / letter dated 06.09.2013 and 04.10.2013 so as toenable them to comment on the same and requested for a shortdate to file their respective reply. The Bench agreed to issue thenecessary directions in that regard and expressed its views thata f inal opportunity would be given to comment on therecommendations of IDBI (OA) and finally argue the matter.The order of BIFR dated 22.10.2013 did not correctly reflect theminutes of proceedings that actually transpired during thehearing held on 22.10.2013. During the said hearing, on thebasis of submissions of all parties, the BIFR had agreed to givetime to the counsels for all the promoter groups to finally arguethe matter on the next date of hearing. The Board had alsoagreed to give time to the parties to file their respective repliesto the report / letter dated 04.10.2013. However, the same didnot find any mention in the order dated 22.10.2013, rather theorder records that the Bench decided to reserve the order.On 28.10.2013, the BIFR passed an order, inter-alia, holdingthat the Company is not likely to make its net worth exceed itsaccumulated losses within a reasonable time while meeting allits financial obligations as a result whereof it is not likely tobecome viable on a long term basis. Hence, it would be just,equitable and in public interest that the Company be wound upu/s 20(1) of SICA. The Board therefore issued a show causenotice to the Company in this regard and also gave f inalopportunity to the Company, the present promoters or aregistered Workers Industrial Co-operative Society (WICS) oran outsider to submit a fully tied up proposal with or without OTSand with or without co- promoters, to the OA, within 30 days fromthe date of this order.Pursuant to the order dated 28.10.2013, the Bench Officer ofBIFR has published an advertisement on 09.11.2013 in Timesof India in relation to the notice under Section 20 (1) of the SICAand BIFR Regulations for proposed winding up of MIL, therebyinviting shareholders, creditors and others to file their respectiveobjections or suggestions with the Registrar.Shri U K Modi has preferred an Appeal before the AAIFRchallenging the order dated 28.10.2013 passed by the BIFR.The said Appeal has been registered as Appeal No. 142 of 2013.By an order dated 27.11.2013, the AAIFR has been pleased topass an unconditional stay of operation of order dated28.10.2013. By subsequent orders dated 18.12.2013,09.01.2014, 10.02.2014, 05.03.2014, 20.05.2014, 05.11.2014,09.01.2015, 06.02.2015, 16.03.2015, 27.03.2015, 01.05.2015and on 20.05.2015 the interim order has been directed tocontinue. It may be pertinent to note that Shri M K Modi has alsofiled two separate Appeals being Appeal No. 11/2014 and 22/2014 challenging the orders dated 22.10.2013 and 28.10.2014respectively, which are also listed for hearing on the same date.On the Appeals filed by Shri M.K. Modi also, AAIFR has grantedan unconditional stay upto the next date of hearing.

Shri U.K. Modi submits:The appeals filed by Shri U.K. Modi, Shri M.K. Modi and ShriD.K. Modi were last listed on 27.03.2015 before the Hon’bleAAIFR. On the said date of hearing, the counsel for BhartiyaKisan Union, Mazdoor Congress Modi Steels and KaramchariSangh Modi Steels entered appearance. The Hon’ble AAIFRagreed to hear the counsel for the abovementioned unionsbefore finally deciding all the appeals.However, Shri M.K.Modi states that no such order / directionwas passed by the Hon’ble AAIFR.Shri U K Modi submits that even though the same is not reflectedin the said order, but he was informed by his counsels who werepresent during the course of hearing that during the course ofhearing on 06.02.2015, 13.03.2015, 16.03.2015, 27.03.2015,01.05.2015 and 20.05.2015, the bench had agreed to hear theall the parties including the counsel representing Bhartiya KisanUnion, Mazdoor Congress Modi Steels and Karamchari SanghModi Steels whose presence is recorded in all the abovementioned orders.Shri M.K. Modi stated that there is no agreement between ShriM.K.Modi and Shri U.K.Modi on this issue.Hon’ble AAIFR had, in its hearing held on 09.10.2015 directed“all the concerned Respondents to file replies to the Appealswhich will include comments on the OA’s reports as well asthe views/comments on the viability or otherwise of the DRSprepared by OA in the year 2013 along with the alternativesuggestions for revival or otherwise of the sick company, ifany, within 2 months.”Pursuant to the above, all the Respondents filed theircomments and alternative suggestions in compliance of theabove directions. The matter was last heard by AAIFR on05.08.2016 and the next date of hearing is yet to be notified.

7. With respect to the Contempt Application (M.A No. 412/2013)filed before Hon’ble BIFR by Shri M.K.Modi , the views of boththe Managing Directors are stated as below:-Shri M.K.Modi stated that:-Shri U.K. Modi has violated BIFR’s injunction order dated11.04.2013 for which Shri M.K. Modi has filed M.A.No.402/2013before the BIFR. The BIFR has issued notice on the applicationon 12.08.2013 and also directed status quo with regard to theproperty in question, viz. Land belonging to MIL(Steel Division)leased out to G.S. Pharmbutor Pvt. Ltd. vide lease deed dated31.05.2013.Shri U.K. Modi disagrees with the above allegations andstatements made by Shri M.K. Modi as the same are not correct.Shri U.K Modi has commented as below:-There has been no violation of any order of BIFR as there hasbeen no transfer of any asset. It is relevant to state that the sameportions of the land have been leased out since 1995 to variousgroup companies of Shri U.K Modi. This was much prior to theBIFR order dated 11.04.2013 when direction were issued by theBIFR under Section 22A directing parties not dispose of,alienate or part with possession of the property. The lease rentalrecovered has been utilised to pay the statutory liabilities of theSteel Division of MIL and also to repay loans taken for paymentof the statutory liabilities and various other dues includingelectricity charges, water charges, maintenance of roads, etc.that arose owing to workers and labourers of the Steel Divisionresiding in the quarters of the Steel Division. The lease deed was


initially executed pursuant to an understanding between theSteel Division and the various labour Unions relating to thesettlement of their dues in order to avoid a law and ordersituation and to maintain peace in the area. In this context, ShriU.K Modi refers to the various agreements entered into with thelabour unions of the Steel Division where under the Companyhas agreed to employ the children of the workers/ labourers ofthe closed Steel Division in any new venture that is set up,depending on their skill, ability and talent. The labour unionshave entered into these agreements to secure the futureinterest of their children who would be offered employment. ShriM.K Modi has filed M.A.No.402/2013 before the Hon’ble BIFRmaking these allegations only to pressurize the management inparticular, Shri. U.K Modi to accept his terms relating to the draftscheme to be submitted to BIFR. The matter is still pendingbefore the Hon’ble BIFR. Shri U.K Modi has sought time to filea reply to the application filed by Shri M.K Modi. Shri U K Modiwill file a detailed response to the said MA. In any event, thestatements and contentions made in these Notes on Accountsare not exhaustive and detailed objection will be read in the replyto the MA. It is important to note that Shri M.K Modi had himselfentered into a perpetual lease agreement for certain portion ofclosed Soap Factory (1584 sq. mtrs.) with his group CompanyM/s Weld Excel India Limited.Shri M.K. Modi disagrees with the above statements andsubmissions made by Shri U.K. Modi as the same are notcorrect as various parts (not the same portions) of the land havebeen leased out by Shri U.K. Modi to his private companies.Area leased to TC Healthcare Pvt. Ltd. was 8,231.56 Sq. Mtrs.and the area leased to G.S. Pharmbutor Pvt. Ltd. is 12,531 Sq.Mtrs. The space of closed soap factory had been leased out toWeld Excel India Limited much after the perpetual leaseagreements executed by Shri U.K. Modi with his groupcompanies namely; TC Healthcare Pvt. Ltd. on 05.12.2002 andModi Revlon Pvt. Ltd. on 01.10.2005 and there was no restraintorder operative at that time.Shri U.K. Modi disagrees with the above statements andsubmissions made by Shri M.K. Modi as the same are notcorrect.As per Shri M.K. Modi, the above contentions of Shri U.K. Modiare factually incorrect.

8. In view of clear cut delineation of responsibilities of the twoManaging Directors of the Company, the accounts of twodivisions of six units and three units of the Company are beingprepared and finalized independently and accordingly ShriM.K.Modi and Shri U.K.Modi are certifying the accounts asrelate to the two divisions of the Company i.e six units and threeunits respectively, the management whereof is looked after bythem.

9. The Company has entered into an agreement with U.P. PowerCorporation Limited for its Residential Feeder SC No. 2005 on29th March, 2000. In pursuance of that agreement, theCompany has paid for the existing authorised occupants onlyafter 1st July, 1998 computed prorata based on covered area ofquarters occupied by the employees. In view of the above, noprovision has been made for electricity charges of 131.46 Lacupto the period of permanent disconnection of residentialfeeder SC No. 2005 i.e. 31st May, 2001 (Previous year 131.46Lac) for the unauthorized occupants and late paymentsurcharge/recovery charges amounting to 302.66 Lac upto31st May, 2001 (Previous year 302.66 Lac). In accordance

with the agreement, matter regarding waiver of late paymentsurcharge and recovery charges after 1st July, 1998 will bereferred to the Government.

10. ESI authorities had raised a demand on the Company for `64.68 Lac (upto previous year 63.51 Lac) (inclusive of interest)towards Company’s liability for ESI for the years 1968 to 1986and no provision has been made against this liability.

11. Modinagar Municipal Committee had determined the basis/liability of house tax payable by the Company for the years 1982-83 to 2006-07 at 213.98 Lac. The said liability/demand/basisis disputed by the Company at various levels and has deposited`16.51 Lac on account upto 31st March, 2016. Pending finaldecision of the Court/settlement and after taking into accountthe provision/ payment already made by the Company, there isa net liability of 188.63 Lac (upto the previous year 188.63Lac), which has not been provided for in the accounts.

12. The Company has not received information from vendorsregarding their status under the Micro, Small and MediumEnterprises Development Act, 2006 and hence disclosurerelating to amounts unpaid as at the year end together withinterest paid/payable under this act has not been given.

13. Government of India has issued guidelines dated 15th January,1987 which requires companies raising resources throughissue of Debentures to create a Debenture RedemptionReserve. The Company has not created such a reserve in viewof the accumulated losses.

14. (a) During the year 2010-11, the Distillery Unit of the Company(Bottler) has entered into an agreement i.e. a “BottlingAgreement (including addendum to bottling agreementdated 26th April, 2012”) with MI Spirit India Private Ltd(MISIP) whereby the parties i.e. bottler and MISIP haveagreed to the blending, manufacturing and bottling of theproducts by the bottler. Bottling agreement inter-aliaincludes: (i) the bottler shall manufacture the products inaccordance with the quali ty standards, standardmanufacturing procedures, the process and otherspecifications laid down by MISIP from time to time and insuch quantities as may be specified by MISIP from time totime (ii) the bottler shal l procure the materials i.e.concentrates, spirit, flavouring agents, de-mineralisedwater, packages and levels from MISIP or from thesuppliers suggested or recommended by MISIP (i ii )products manufacturing by the bottler shall be supplied,dispatched or sold by the bottler as per the purchase ordersprocured by MISIP and bad-debts from direct indenterssupplied on credit upon request by MISIP are to MISIP’sAccount (iv) MISIP will be responsible for working capitalfinancing. Bottler shall open a bank account (“ Account” )which is to be operated jointly by the bottler and MISIP andal l funds in the account shall belong to MISIPnotwithstanding that the account may be in the name of thebottler (v) MISIP wi l l reimburse the manufacturingexpenses and pay manufacturing margin (i.e. 10% of theaggregate of the manufacturing expenses as reduced bystatutory charges, taxes and duties and sel ling anddistribution expenses) from the above account (vi) allpayments received by the bottler for sale of products shallbe credited to the account and manufacturing expensesincurred by the bottler, manufacturing margin shall bereimbursed by MISIP to bottler. Any surplus remaining in theaccount shall therefore be paid to the MISIP as fee.


(b) In the opinion of the management, since the products arebeing manufactured and sold in the name of the bottler, thepurchase invoices in respect of raw material, packingmaterial and consumables and sales invoices for thefinished goods are being issued in the name of the bottler,necessary compliances under various tax laws are alsobeing done by the bottler and special bank account is alsoin the name of the bottler, the transactions of the abovebusiness of manufacture and sale of “Vodka and Whisky”have been treated as part of books of account of the bottlerand these have been included in sales, expenses, assetsand liabilities of the bottler as stated in paragraph (c) below.

(c) Balance Sheet and Statement of Profit and Loss of thebottler for the financial year ended 31st March, 2016 and31st March, 2015 includes the following items relating to theabove activities of manufacture and sale of “Vodka andWhisky”:

Balance Sheet (` in Lac)

Particulars As at As at 31st March, 2016 31st March, 2015

Sundry Debtors 2,796.50 1,871.91

Bank Balances 147.13 132.03

Security Deposits 222.53 107.03

Closing Stock 826.80 892.39

Advance Recoverable 124.48 81.37

Total Current Assets 4,117.44 3,084.73

Less: Current Liabilities 1,084.55 845.33

Credit Balance of MISIP 2, 750.99 3,835.54 2,093.63 2,938.96

Net Current Assets 281.90 145.77

Recognized as net profit for the yearInstead of manufacturing margin 281.90 145.77

IMPACT OF NET PROFIT NIL NIL

Statement of Profit & Loss (` in Lac)

Particulars 2015-2016 2014-2015

Turnover (Net of discount) 8,690.28 3,190.47

Other Income 10.32 8,700.60 27.90 3,218.37

Excise duty paid 3,226.11 440.12

Cost of materials consumed 1,192.75 629.37

Change in Inventories (18.89) (125.63)

Employees Benefits Expenses 397.27 336.75

Finance Costs 8.68 4.16

Rates & Taxes 300.95 212.16

Sales Promotional Expenses 999.49 296.28

Other Expenses 2,312.34 1,279.39

Total Expenses 8,418.70 3,072.60

Net Profit for the year 281.90 145.77

Recognized as net profit for the yearInstead of manufacturing margin 281.90 145.77

IMPACT OF NET PROFIT NIL NIL

(d) The Expert Advisory Committee of Institute of CharteredAccountants of India in an almost similar case do not agreewith the above mentioned accounting treatment. Theopinion is governed by the substance of thetransaction and not by the legal form i.e. sales, purchases,assets and liabilities relating to such business controlled bythe brand owners should not be recorded in the books ofaccount of the Company even though supporting vouchersare in the name of the Company and the correct accountingtreatment of the transactions in the books of account of theCompany would be to recognize only the fixed margin/charge received by it rather than to recognize sales andpurchases of the business of manufacturing IMFL and alsoshould not recognize any current asset or liabilities of thesaid business in its books of account. Further, the brandowners entitlement paid by the Company should be bookedas a mere cash outf low. Further the Expert AdvisoryCommittee had clarified that the opinion expressed by thecommittee is purely from the accounting point of viewwithout consideration of any implication thereof, from thepoint of view of the provisions of TDS/TCS in the Income TaxAct 1961 or any other legal/ statutory requirement.

15. Consequent to the losses, the Company had been declared aSick Industrial Company on 14th March, 1991 in terms of Section3(1)(o) of the Sick Industrial Companies (Special Provisions)Act, 1985. Show Cause Notice issued by BIFR for winding uppursuant to its order dated 28th October, 2013 has been stayedby AAIFR. Pending final orders of BIFR/AAIFR, the accounts ofthe Company have been prepared on a going concern basis.

16. (a) No provision has been made for penal/delayed/simple/compound interest amounting to 37839.07 Lac upto 31stMarch, 2016 (for the year ` 5400.68 Lac) on termborrowings of Financial Institutions and debenturespending final order of BIFR.

(b) Interest payable by Vanaspati Unit of the Company toFinancial Institutions since the date of disbursement of theloan on simple rate of interest basis amounts to 1450.65Lac upto 31st March, 2016 and the unit holds total interestprovision of 732.41 Lac as on 31st March, 2016 resultingin the short provision of 718.24 Lac on simple interestbasis.

(c) The Sugar & Distillery Units of the Company have given aproposal for settlement of their dues with Allahabad Bankof 227.00 Lac against which an upfront payment of 50.00Lac has already been made under No Lien Account’ andincluded under “Other Bank Balances” and to pay thebalance amount of ` 177.00 Lac in two equal monthlyinstalments after the receipt of sanction from the Bank. Theshortfall in interest provision amounting to 168.84 Lac willbe provided in the books of account in the year of approvalof OTS proposal by the Bank which is pending.

(d) The Sugar Unit of the Company has not made provision forinterest/bank charges amounting to 3711.21 Lac (for theyear 531.20 Lac) on cash credit loan taken from AllahabadBank in view of para (c) above.

(e) No provision has been made for interest on Cash Creditamounting to `413.16 Lac (for the year ` 65.13 Lac).Further, response to the proposal submitted to the Bank forOne Time Settlement (OTS) dues is awaited in Distillery


Unit in view of para (c) above.(f) Till 31st March, 2000, simple interest on matured fixed

deposits and interest upto date of maturity was provided inthe books of account. With effect from 1st April, 2000, noprovision has been made for interest of 325.10 Lac upto31st March, 2016 (for the year 13.97 Lac), computed asper past practice, on these fixed deposits in view of a legalopinion received by the Company to the effect that as perterms and conditions of Fixed Deposit Scheme, deposits donot carry any interest beyond due dates unless these arerenewed. Since these deposits were never renewed aftertheir due dates as such, the question of payment of interestafter due dates does not arise at all. However, as a prudentmeasure, the provision made of 280.85 Lac in the past(net of payments) has been retained in the books of accountas on 31st March, 2016.

17. (a) The Vanaspati Unit had applied for Sales Tax ReliefExemption to U.P. Government in terms of Section 4A ofU.P. Sales Tax Act. Consequent to rejection, the Companyhas filed a writ petition in Lucknow Bench of Allahabad HighCourt and Court had passed an order dated 21st February,2013 that “the writ petition is allowed and impugned orderdated 22nd April, 1992 is quashed. The opposite parties aredirected to reconsider the case of the petitioner afresh, aftergiving personal opportunity of hearing and passappropriate orders, in accordance with law.” In complianceof High Court order, we had filed an application before theSecretary Level Committee (Constituted under Section 4Aof the U.P. Trade Tax Act). As the matter is still pendingbefore the authority, no provision has been made for salestax liability of Rs.2,455.78 Lac relating to the period May,1991 to July, 1994 (previous year Rs.2,455.78 Lac).

(b) The Vanaspati Unit had preferred an application fordeferment of Sales-tax with effect from July, 1994 underSection 38 of the U.P. Sales Tax Act and the same has beenrejected by the State Government. The Company has alsofiled Writ Petition against the rejection and consequent tothe orders of the Court, the recovery of Sales-tax has beenkept in abeyance. Accordingly, Sales-tax amounting to 440.46 Lac (previous year ` 440.46 Lac) relating to theperiod August, 1994 to March, 1996 has not been depositedwith the authorities.The above writ petition filed by the Company was listed forhearing on 2nd May, 2008 at High Court, Lucknow Bench.The Company had filed an affidavit with the Court that BIFRhad passed an order dated 26th March, 2008 by virtue ofwhich the Bench permitted the Commercial TaxDepartment, Government of U.P. to recover its outstandingdues, due after 30th June, 2007. The Company had alsostated in the said affidavit that the Hon’ble Supreme Courtof India had affirmed the order of the BIFR and therefore inview of the said orders of BIFR as affirmed by the Hon’bleSupreme Court, the said Writ Petition may be dismissed asinfructuous. Accordingly the High Court, Lucknow Benchhas dismissed the said writ petition as infructuous.

(c) In accordance with the scheme announced by U.P.Government regarding Waiver of Interest & Penalty onSales Tax, the Distillery Unit of the Company has paid andprovided interest during 2005-06 of 54.77 Lac i.e. 10% of

the total interest as per the scheme. No Dues Certificate ofSales Tax authorities is awaited.

18. The Distillery Unit declared cessation and lock-out of the Unitwith effect from 19th December, 1991 and 5th January, 1992respectively. The lockout has since been lifted. The U.P.Government, suo moto, has referred the matter to the IndustrialTribunal to decide the legality of the lockout. Pending finaldecision, no provision has been made for wages 27.46 Lac forthe lockout period.

19. Provision/payments (including value of perquisites) has beenmade to Managing Directors for the remuneration of 80.68 Lacin terms of shareholders resolution, which is subject to approvalof the Financial Institutions.

20. No provision has been made for Earned Leave for Steel Unit-upto 1991-92, amount unascertained.

21. As per Press Release dated 18th January, 2016, the StateGovernment has announced financial assistance on 23.30 perquintal of cane which would be linked to average selling price ofsugar and its by products during 1st October, 2015 to 31st May,2016, which is yet to be announced. The Company hasestimated and accounted for the above financial assistance of`1147.70 Lac @ 23.30 per quintal of cane as the Company ishopeful for issue of notification by the State Government in thisregard. Had the above financial assistance not accounted for inthe books of account, the cost of material consumed and valueof closing stock would increase by 1147.70 Lac and 183.60Lac respectively is resulting in net impact of increase inexpenses by 964.10 Lac.

22. Previous year ’s f igures have been regrouped wherevernecessary.

23. No confirmation letters were sent to debtors/creditors. In theabsence of such confirmations, the balances in respect ofSundry Debtors/Creditors, Loans taken/given and Advancesand other accounts are taken as shown by the books ofaccounts and are subject to adjustments and reconciliation, ifany.

24. In view of non-viability of the Vanaspati Unit, which was aseparate business segment as per AS-17, Segment Reporting,the Company declared closure of the Unit with effect from 3rdFebruary, 2003 and prior information, as required under law,was given to the State Government on 4th December, 2002. Theclosure is consistent with the Company’s strategy to focus on itsother viable manufacturing activities.

25. Delhi Excise Authorities issued Show Cause Notices and raiseddemand for 167.43 Lac towards Risk-Purchase of CountryLiquor in view of non-supply of the same by Distillery Unit of theCompany. Company has disputed the above demand and a WritPetition was filed before the Hon’ble Delhi High Court whoordered the case to be referred back to Collector of Excise fortaking final decision. The Collector of Excise vide its order dated27th June, 2003 has confirmed the above demand againstwhich the Company has filed a writ petition before the Hon’bleDelhi High Court. On the basis of orders of Hon’ble Delhi HighCourt, the Company has deposited 50.00 Lac till date againstthe above demand. No provision is considered necessary at thisstage since the matter is sub-judice.

26. (a) As on 31st March, 2016, there were 160 Public Depositsamounting to 7.32 Lac which have remained unclaimed


and unpaid for a period of more than seven years andinterest accrued but not paid on these unclaimed depositstill the date of maturity amounts to 2.40 Lac. Details ofunclaimed and unpaid debentures for a period of more thanseven years are presently not available.

The Company has filed a return dated 14th June, 2002 withthe Registrar of Companies duly certified by practicingCompany Secretary stating that the Company is a SickIndustrial Company as per orders of BIFR dated 14thMarch, 1991 and rehabilitation proposal for payment inrespect of debentures and fixed deposits etc. is pendingbefore the IDBI (as the Operating Agency)/BIFR/AAIFR forconsideration. The Company will pay/credit the amount asper final orders of BIFR/ AAIFR. Accordingly, no amountwas credited / paid to Investor’s Education and ProtectionFund till date.

(b) With regard to payment of Fixed Deposits, as per Section74 of the Companies Act, 2013, deposits accepted beforethe commencement of the Act (i.e. 1st April, 2014) shall berepaid within one year from the commencement of the Act.The Company had filed a petition with the Company LawBoard on 31st March, 2015 which has since beendismissed by Company Law Board vide its order dated 21st

April, 2016. Against this order the Company has filed anappeal before Hon’ble High Court, Allahabad on 23rd July,2016.

27. (a) There has been diminution other than temporary’ of`148.80 Lac as on 31st March, 2016 (Previous Year 149.60Lac) in the market value of one of its investments in theGroup Companies mainly in view of closure of plant for thelast three years and negative net worth of the GroupCompany as per books of account as on 31st March, 2016.Even though the modified rehabilitation scheme of thisgroup Company is still under consideration of the BIFR,provision for diminution of 148.80 Lac has been made inthe books of account as on 31st March, 2016 as required byAccounting Standard 13 i.e. Accounting for Investmentsand shown as an Exceptional Item’ in Statement of Profitand Loss.

(b) In accordance with the Accounting Standard AS-13 i.e.`Accounting for Investments’ issued by the Institute ofChartered Accountants of India, a sum of 11.93 Lac hasbeen provided in the books of both the subsidiaries of theCompany during the year ended 31st March, 2016(Previous Year Nil) for diminution, other than temporary, inthe value of certain investments even though the AggregateMarket / Intr insic/Fair value of al l investments aresubstantially higher than their Aggregate Cost’.

28. Till 31st March, 2016, certain Quarters of the Company areoccupied unauthorisedly by ex-employees/outsiders. TheCompany has entered into “Agreement to Sel l” for 215(Previous year 215), such residential quarters with such parties.Sale consideration amounting to 504.50 Lac (Previous year`504.50 Lac) has been received as interest free advance. These“agreements” clearly stipulates that final sale of such quartersare subject to approval of Financial Institutions to whom thesequarters have been mortgaged and the Company proposes to

seek the same before affecting final sale of such quarters.Accordingly the sale of such quarters will be accounted for onlyon receipt of approval of Financial Institutions. Further theCompany has been legally advised that it can enter into such“Agreements to Sell”.

29. (a) The Steel Unit of the Company has entered into few leases,including perpetual leases, agreements for certain portionsof the factory land and building 27954.86 Sq. Mtrs (Previousyear 27954.86 Sq. Mtr.) for which approval of financialinstitutions, to whom the factory land and buildings aremortgaged, is yet to be obtained. However, the Companyhas been legally advised that it can enter into such leaseagreements. Further, the lease money was mainly utilizedfor payment of workers and statutory dues.

(b) The Company has entered into a perpetual leaseagreement for certain portion of closed Soap factory, land& building (1584 sq. mtrs.) to a related party. As the saidland and building is mortgaged with the financial institutionstherefore the Company had sought the approval of IDBILimited (the lead financial institution) to the said transactionvide its letter dated 6th September, 2006. Since IDBI Limiteddid not respond, therefore the Company again wrote a letterto IDBI Limited on 5th April, 2007 requesting for its approvalto the said transaction. The Company in the letter underreference also mentioned that if IDBI Limited does notrespond to the Company’s request, it will be deemed thatthe Company’s request has been approved by IDBI Limitedand the Company will go ahead with the said leasingagreement. The IDBI has so far not responded to theCompany’s letter.

30. (a) Recovery Certificate (RC) was issued on 1st May, 2004 onaccount of non payment of cane price/commission/interestdue to Co-operative Societies for the sugar season 2003-04. The Hon’ble High Court has stayed the recoveryproceedings against the Company subject to payment ofdues upto 31st July, 2004. The Company has complied withthe conditions regarding payment of cane price andcommission on basic SMP upto 31st July, 2004. However,the Company has disputed the payment of interest of`142.00 Lac and recovery charges of `236.00 Lac in theHon’ble Allahabad High Court which is still pending. Onconsideration of prudence, the Company has madeprovision for interest of Rs.142.00 Lac during the year2004-05.

(b) Recovery Certificate (RC) was issued on 18th March, 2008on account of non payment of cane price/commission/interest due to Co-operative Societies for the sugar season2007-08. The above RC also includes recovery charges of`413.50 Lac which has not been provided for in the booksof account.

(c) Recovery Certificate (RC) was issued on 20th April, 2011 onaccount of non-payment of cane price/commission/interestdue to Co-operative Societies for the sugar season 2010-11. The above RC also includes recovery charges of`268.25 Lac which has not been provided for in the booksof account as stay granted by Hon’ble Allahabad HighCourt.


32. RELATED PARTIES DISCLOSURE01 Key Management Personnel :

Shri Mahendra Kumar Modi Managing DirectorShri Umesh Kumar Modi Managing Director

02 Other Related Parties with whom the Company had transactions etc :Enterprises over which the Key Management Personnel and their relatives are able to exercise significant influence:

Modipon Limited

Ashoka Mercantile Limited

Weld Excel India Limited

Modi Paint Pvt. Ltd.

Bihar Sponge Iron Limited

SBEC Bio-energy Limited

SBEC Sugar Limited

Moderate Leasing & Capital Services Limited

Modi Hitech India Limited

Technicast Engineers Limited

SBEC System India Limited

Modi Mundipharma Pvt. Limited

Win-Medicare Pvt. Limited

Modi Motors Private Limited

Modi Illva India Pvt. Ltd.

Modi Line Travel Services Pvt. Ltd.

Modi Revlon Private Limited

Modi Senator (I) Pvt. Limited

Jayesh Tradex Pvt. Limited

A to Z Holding Pvt. Limited

H.M. Tubes & Containers Pvt. Ltd.

(d) Recovery Certificate (RC) was issued on 10th August, 2007on account of non payment of cane price/commission/interest due to Co-operative Societies for the sugar season2006-07. The above RC also includes interest of 340.66Lac upto 7th August, 2007 on cane price/ commissionpayable to societies and recovery charges of 426.95 Lacwhich has not been provided for in the books of account. Asper the Interim Order dated 27th February, 2008 of Hon’bleSupreme Court, there shall not be any recovery charges orinterest for delayed payment at this stage.

(e) Recovery Certificate (RC) was issued on 21st February,2014 on account of non payment of cane price/commission/interest due to Co-operative Societies for the sugar season2012-13. The above RC also includes interest of 1246.58Lac and recovery charges of 450.79 Lac. No provision hasbeen made for recovery charges in the books of account.Hon’ble Allahabad High Court vide its order dated 16th April,2014 has stayed the recovery charges of 278.99 Lac.Further the Company has paid interest on cane arrears.

(f) Recovery Certificate (RC) was issued on 23rd June, 2014on account of non payment of cane price/interest due to Co-operative Societies for the sugar season 2013-14. Theabove RC also includes interest of `803.85 Lac andrecovery charges of 1704.67 lac. No provision has beenmade for recovery charges in the books of account.

Further as per Press release dated 22nd May, 2015 issuedby Chief Secretary, Sugar Industry and Cane DevelopmentDepartment, U.P. Government, interest on cane arrears forthe sugar season 2013-14 are being waived off. StateGovernment Notification in this regard is awaited. In view ofthe above pending issue of Notification, the Company hasnot provided interest of `2138.58 Lac as the Companyexpects issue of Notification ultimately.

(g) Recovery Certificate (RC) was issued on 20th August, 2015on account of non-payment of cane price/interest due toCo-operative Societies for the sugar season 2014-15. Noprovision has been made for recovery charges of 1703.95Lac in the books of account.

Further no provision for interest of 2010.87 Lac for theperiod upto 31st March, 2016 for the sugar season 2014-15has been made as the Company expects waiver off thesame.

(h) No provision for interest for the period upto 31st March,2016 of 341.88 Lac for the Sugar Season 2015-16 hasbeen made as the Company expects waiver off the same.

(i) In view of Government Notification No. 4/2015,620S,chiU.Anu-I-2015-1607/2004, Lucknow dated 12th June, 2015,commission on cane purchase for crushing season 2012-13 is reduced from 5.10 per quintal to 2.00 per quintalresulting in Refund of `249.18 Lac which is shown as`Exceptional Item’ in the statement of Profit & Loss.

31. In the recent past, the Arc Electrode Industry in the country hasbeen facing stiff competition from international players whoentered Indian market and started aggressive publicity tocapture it. This resulted in adverse impact on domesticcompanies. To cope with the treat, the electrode unit of theCompany has also undertaken publicity campaign throughadvertisement in Newspapers/banners, calendars etc. incurrent year also.

Further, we give below figures on advertisement during last fouryears:

2012-13 ` 381.34 Lac2013-14 ` 281.64 Lac2014-15 ` 154.74 Lac2015-16 ` 115.64 Lac


03 Disclosure of transactions between the Company & its subsidiaris and related parties and the status of outstandingbalances as at 3lst March, 2016:

(A) Transactions with the enterprises over which the Key Management Personnel and their relatives are able to exercisesignificant influence:

(` in Lac)

Year2015-16 2014-15

Sale of GoodsSBEC Sugar Limited 31.02 5065.37 Weld Excel India Limited 41.30 43.76 Modipon Limited - 0.20 Modi Paint Pvt. Limited 3.97 - Modi Illva India Pvt. Limited 0.22 -

76.51 5109.33Purchase of Goods/Raw Materials

Weld Excel India Limited 574.98 1233.09 SBEC Sugar Limited 473.41 478.49 Jayesh Tradex Pvt. Limited 4.13 4.34 Modi Hitech India Ltd. 6.20 12.22 Modi Revlon Pvt. Ltd. 8.13 10.19 H.M. Tubes & Containers Pvt. Ltd. - 21.99 Win Medicare Pvt. Ltd. 0.25 -

1067.10 1760.32Purchase of Assets - 1.77Rental Income

Win Medicare Pvt. Ltd. (Foot Note No. 10) 62.21 67.33 Weld Excel India Limited (Foot Note No. 3) 18.93 17.67 Modi Motors Pvt. Ltd. 12.00 12.00 Modi Mundipharma Pvt. Ltd 9.36 10.93 SBEC Sugar Limited 0.26 2.16 Moderate Leasing & Capital Services Ltd.(Foot Note No. 8) 0.91 - Modi Revlon Pvt. Ltd. 0.36 0.36 Jayesh Tradex Pvt. Ltd. 0.32 0.88 Shri Mahendra Kumar Modi 5.76 4.72 Modi Illva India Pvt. Ltd. 0.58 2.29 Others 0.33 0.33

111.02 118.67Interest Income

Ashoka Mercantile Ltd. (Foot Note No. 7) 71.18 78.89Payment of Lease Rent

Weld Excel India Limited (Foot Note No.2, 5 & 6 ) 86.98 85.85SBEC Bio-energy Ltd. (Foot Note No. 9) 3.49 -

90.47 85.85Expenses reimbursed

Weld Excel India Limited 26.19 22.52 Others. 0.45 0.48

26.64 23.00Interest paid on Loan taken Moderate Leasing & Capital Services Pvt. Ltd. 797.74 688.51Weld Excel India Limited 0.54 -

798.28 688.51Expenses realized

Weld Excel India Limited (Foot Note No.3) 2.95 3.10 SBEC Sugar Limited - 3.41 Shri Mahendra Kumar Modi, 1.26 1.32

4.21 7.83


Loan and Advances takenModerate Leasing & Capital Services Ltd. 489.32 313.66Weld Excel India Limited 45.00 -

534.32 313.66Royalty Fee received

Weld Excel India Limited (Foot Note No. 4) 4.45 7.34Commission paid for sale promotion

Ashoka Mercantile Ltd. 1.85 5.75Receiving of Services

Modi Line Travel Services Pvt. Ltd. 12.48 21.08Refund received against Loans & Advances Recoverable

Modipon Ltd. 0.37 4.38Refund of Security deposits given

Ashoka Mercantile Ltd.(Foot Note No.7) 69.50 130.20Refund of Loan and Advance

Moderate Leasing & Capital Services Ltd. 1745.09 1593.02

(B) Balances outstanding at the year end:Interest recoverable

Ashoka Mercantile Ltd.(Foot Note No. 7) 64.07 71.00Amount recoverable

Good 24.54 23.58Doubtful 3.78 3.78

Security deposit to Weld Excel India LtdAgainst Cylinders (Foot Note No. 5) 32.66 32.66Against Oxygen Filling Plant (Foot Note No. 6) 4.00 4.00

Security deposit recoverable for quarters Ashoka Mercantile Limited (Foot Note No. 7) 798.30 867.80 Modipon Limited 147.63 147.63

Sundry DebtorsSBEC Sugar Limited 220.82 1380.06 Modipon Limited - 0.12

Amount payable Weld Excel India Limited 323.15 248.53 Modi Revlon Pvt. Ltd. 17.58 10.05 H.M. Tubes & Containers Pvt. Ltd. - 16.99 Others 13.72 18.02

Unsecured Loan taken OutstandingA to Z Holding Pvt. Ltd. 24.89 24.89Moderate Leasing & Capital Services Ltd. 2888.65 3646.04

Weld Excel India Limited 45.00 -(C) Payment to the Key Management Personnel:

(` in Lac) Year

2015-16 2014-15i) Managerial Remuneration

Shri Mahendra Kumar Modi 18.00 18.00ii) Amount recoverable from Managing Director Shri Mahendra Kumar Modi

(Recovered subsequently) - 0.49iii) Amount payable to Managing Director

Shri Mahendra Kumar Modi 0.01 -iv) Amount payable (for gratuity) 3.35 3.35

(` in Lac)

Year2015-16 2014-15


Foot Notes:

1. The above excludes amount payable/receivable to/from related parties in the books of Steel Unit in view of non-incorporation ofBalance Sheets for these years on account of non-availability of opening audited balances as on 01.04.1993.

2. During the financial year 2010-11, Electrodes unit of the Company has taken office premises in Delhi on sublease basis from WeldExcel India Limited (WEIL), a related party, under operating lease for an initial period of three years as non-cancelable period atmonthly rent of 4.15 Lac and the lease was further renewed for a period of three years w.e.f. 1st April, 2013 at an increase 15% overthe current lease rent i.e. 4.78 Lac per month . Lease agreement has now been further renewed at reduced rent of 4.15 Lac permonth for a period of three years w.e.f. 1st April, 2016.

3. Electrode unit of the Company has taken premises for office cum guest house cum residence of Managing Director in Chatarpur, NewDelhi on operating lease basis and having sharing agreement with WEIL with effect from 1st November, 2011 (for a period of two yearsand further extended till 31st December, 2016) at monthly rent of 1.60 Lac with effect from 1st January, 2015 (our share net of recoveryfor Managing Director). The Company is legally advised that sharing of lease/rent between related party are not covered under theprovisions of related party transactions specified under section 188 of the Companies Act, 2013.

4. Electrode Unit of the Company had entered into a trade mark license agreement with WEIL with effect from 1st May, 2009 (for the periodfive years and further extended on 1st May, 2014 for next six years) wherein the right to use MODI’s trade mark, logo and brand forarc welding filler metals and welding equipments was given to WEIL at a royalty of 1% of the net sale price.

5. 1633 Cylinders (Previous year 1633 cylinders) taken on operating lease at monthly rent of 45.00 per cylinder since 1st June, 2012for three years has been renewed for five years w.e.f. 1st June, 2015 on same rent. Approval of shareholders would be obtained atthe ensuing Annual General Meeting.

6. Oxygen Filling Plant taken on operating lease for 2 years (non-cancelable) on 1st January, 2012 at again monthly rent of 1.00 Lacwas renewed for period of one year from 1st January, 2015 to 31st December, 2015. Lease period subsequently extended for one moreyear w.e.f. 1st January, 2016 at the same rent at monthly rent of 1.00 Lac.

7. Unsecured Security deposits amounting to `798.30 Lac (Previous year 867.80 Lac) given during May, 2011 against temporarypossession of 43 (Previous year 47) houses in Modinagar on which interest charged @ 8.50% with effect from 1st April, 2014.

8. Leave and License Agreement entered into with Moderate Leasing and Capital Services Limited for eleven months on 3rd November,2015 for rent of 16,200/- per month plus Service Tax.

9. DG Set taken on operating lease at monthly rent of 67,000/- for a period of five years with effect from 2nd November, 2015. Approvalof Shareholders would be obtained at the ensuing Annual General Meeting.

10. Lease agreement for house w.e.f. 15th March, 2016 for eleven months at monthly rent of 8,000/-. Approval of Shareholders for theagreement would be obtained at the ensuing Annual General Meeting.

33. Undertakings given to Financial Institutions on behalf of Lords Chloro Alkali Limited, Modi Rubber Limited and Bihar Sponge Iron Limited:

(a) To procure funds jointly/severally with other promoters to meet any shortfall in the resources of the Company for completing theirprojects and/or for working capital. The funds made available/to be made available can only be withdrawn with the prior approval ofFinancial Institutions and shall not involve any charge or lien on the assets of the said Companies.

(b) That the Company shall not transfer, assign, pledge, hypothecate or otherwise dispose of in any manner it’s holding in their capitalwithout Institutions’ prior approval in writing.

34. Deferred credit including liability for interest payable for unexpired period have been guaranteed by the Bankers of the Company againsthypothecation of Gas Cylinders and Machinery purchased under the Scheme in Steel Unit.

35. Impairment of fixed assets, if any, as per Accounting Standard AS-28 i.e. impairment of assets has not been ascertained in Sugar andElectrode Units.

36. Impact of componentization of fixed assets and ascertaining useful life and original cost/estimated value of such components as on 1st

April, 2015 as required by the amended Schedule II of the Companies Act, 2013 is pending. Impact, if any, on the depreciation for the yearended 31st March, 2016 is yet to be ascertained by the Management.

37. Debit advice of 2.63 Lac of Sugar Unit toward certain expenses has not been accounted for in the books of accounts of MD Office. Furtherno provision has been made for electricity expenses of six units 7.43 Lac.

38. Pursuant to directions received from Reserve Bank of India, Main object clauses of both the subsidiary companies were amended as on16th September, 2000 that the Company would not carry on the business of Non-Banking Financial Institution within the meaning of Section45 I A of the Reserve Bank of India Act, 1934. Accordingly the Company has not acquired any fresh investments.


39. Modi Spinning & Weaving Mills Company Limited, one of investee companies, in compliance of BIFR sanctioned scheme has allottedfollowing shares during the year 2011-12 free of cost (one share against 5 (five) Equity Shares held by the Shareholders of MSWM as onrecord date i.e. 12th November, 2009) to both the subsidiaries as under :

Subsidiaries of the Company Shares received ofHaryana Distillery Ltd. Rajputana Fertilizers Ltd.

Own Investment (India) Ltd. 8233 8233

Your Investment (India) Ltd. 9117 9117

40. Investments in two associates i.e. Bekaert Engineering (India) Pvt. Ltd. and Modi Santa Fe India Pvt. Ltd. have not been accounted forin Consolidated Financial Statements under the Equity method as prescribed in Accounting Standard -23 i.e. Accounting for investmentin associates as these associates are operating under severe long term restrictions that significantly impair its ability to transfer fundsto the investor. Accordingly these investments are accounted for at cost.

41. SEGMENT REPORTING :

( i) The Management has identified six reportable Business Segments for the current year namely :Sugar comprising of Cane Sugar.Gas comprising of gases.Distillery comprising of liquors and spirit.Paint comprising of Paints & Varnish.Electrodes comprising of Welding ElectrodesInvestment Operations

(ii) The Vanaspati Unit of the Company, which is lying closed since 2003, has not been treated as business segment.(iii) The Steel Unit is lying closed since 24th January, 1993 due to strike/lock-out. In the meanwhile, opening balances (Assets and

Liabilities) of the unit as on 1st April, 1992 subject to certain modifications as per Note 27 {4(c)} have been incorporated as Assets &Liabilities of Steel Unit. (Refer Note 27(4)).

(iv) Segmentwise information (Primary Segments) for the current year:( in Lac)

Particulars Sugar Gas Distillery Paint Electrode Investment Totaloperations

SEGMENT REVENUETotal Sales/Income 20614.77 564.51 6427.10 2053.92 1984.16 - 31644.46Less: Inter Segment Sales 512.66 2.97 - 6.70 0.32 - 522.65Total Sales/Income 20102.11 561.54 6427.10 2047.22 1983.84 - 31121.81from Operation*

SEGMENT RESULT :Segment Result 434.05 53.59 205.13 (23.88) (645.80) (11.15) 11.94Add: .i) Profit of Steel Unit# - - - - - - 28.59ii) Interest Income/Profit on - - - - - - 54.81 sale of Fixed Assets

95.34Less:Interest Expenses - - - - - - 578.13Provision fo rDiminution invalue of long term investment{27 (27)(a)} - - - - - - 148.80Unallocable Expenses (Net)** - - - - - - 264.51Profit/(Loss) before Tax - - - - - - (896.10)Less: Provision for Tax - - - - - - 0.28Profit/(Loss) after Tax (896.38)

# Excludes inter-unit rental income of 46.12 Lac.* Sugar Units includes refun dof commission on sugar cane purchased for 2012-13 of 249.18 Lac shown as “Exceptional Item” inStatement of Profit & Loss.** Includes Administrative Offices i.e. MD Office and Corporate Office of the Company.


OTHER INFORMATION( in Lac)


Segment Assets 8765.92 214.71 4846.37 734.27 786.94 4.55 15352.76Steel Unit* - - - - - - 3384.09Investments - - - - - - 640.84FD with Banks & Interest Accrued 20.48 6.23 184.06 6.78 389.71 26.39 633.65Other unallocable assets** - - - - - - 2819.51Total Assets #22830.85Segment Liabilities 19362.17 180.51 4815.93 605.94 1389.97 0.59 26355.11Steel Unit* - - - - - - 2778.13Other unallocable liabilities** - - - - - - 2953.90Total Liabilities - - - - - - 32087.14Secured/Unsecured Loan/DPG - - - - - - 12102.76(Including interest accrued)Capital Expenditure :(Including Under Erection andacquired under finance lease)on Segment Assets 37.36 - 45.86 3.67 0.14 - 87.03Depreciation 172.32 2.34 41.52 8.30 64.84 - 289.32

NOTES : * Refer Note 27(41)(iii) above.** Includes Administrative Offices i.e. MD Office and Corporate Office of the Company.01 The Business operations are concentrated in India only.02 External Revenue is exclusive of Excise Duty realized.03 Inter segment revenues between operating segments are accounted for at market price.@ Includes revaluation of Fixed Assets also.

# This includes 1023.76 Lac being unreconciled debit balance of Steel Unit included in Short Term Loan and Advances i.e. Note17.

(v) Segmentwise information (Primary Segments) for the previous year:( in Lac)


SEGMENT REVENUE :Total Sales/Income 24453.79 615.31 4177.91 1737.10 3598.12 - 34582.23Less: Inter Segment Sales 795.96 2.78 - 3.41 0.24 - 802.39Total Sales 23657.83 612.53 4177.91 1733.69 3597.88 - 33779.84

SEGMENT RESULT :Segment Result (1203.22) 59.61 199.64 (12.79) (606.16) 1.05 (1561.87)Add: .i) Profit of Steel Unit# 48.09ii) Interest Income/ Profit on 50.04

sale of Fixed Assets(1463.74)

Less:Interest Expenses 724.63Unallocable Expenses (Net)* 316.08Profit/(Loss) before Tax (2504.45)Less: Provision for Tax 0.28Profit/(Loss) after Tax (2504.73)

# Excludes inter-unit rental income of 46.12 Lac.* Includes Administrative Offices i.e. MD Office and Corporate Office of the Company.


OTHER INFORMATION


Segment Assets 12370.68 240.94 3870.25 792.78 1456.26 5.57 18736.48Steel Unit* 3390.19Investments 801.58FD with Banks & Interest Accrued 13.33 4.39 169.73 6.24 396.22 25.17 615.08Other unallocable assets** 5023.85Total Assets #28567.18Segment Liabilities 22474.30 198.51 3658.26 646.72 1515.52 0.88 28494.19Steel Unit* 2778.13Other unallocable liabilities** 2880.40Total Liabilities 34152.72Secured/Unsecured Loan/DPG 12808.53(Including interest accrued)Capital Expenditure :(Including Under Erection andacquired under finance lease)on Segment Assets 38.27 1.15 13.45 0.63 0.05 - 53.55Depreciation 188.25 2.33 51.00 14.48 112.29 - 368.25NOTES :* Refer Note 27(41)(iii) above.** Includes Administrative Offices i.e. MD Office and Corporate Office of the Company.01 The Business operations are concentrated in India only.02 External Revenue is exclusive of Excise Duty realized.03 Inter segment revenues between operating segments are accounted for at market price. @ Includes revaluation of Fixed Assets also. # This includes 992.24 Lac being unreconciled debit balance of Steel Unit included in Short Term Loan and Advances i.e. Note 17.

42. Earnings per Share (EPS) basic and diluted, computed in accordance with Accounting Standard-20: (` in Lac)

Particulars 2015-16 2014-15Loss for the year as per annual accounts 896.38 2504.73Add: Dividend on Preference Shares 6.11 6.11Total (A) 902.49 2510.84Number of Equity Shares issued (B) 33,09,214 33,09,214Earning per share (in ) (A)/(B) (27.27) (75.87)Face Value of Equity Share in Rupees 10 10

43. Additional information as required by Paragraph 2 of the General Instructions for preparation of Consolidated Financial statements toSchedule III of the Companies Act, 2013:Name of the Enterprise Net Assets i.e. total assets minus total liabilities Share in profit or loss

As % of consolidated Amount As % of consolidated Amountnet assets ( in Lac) profit or loss ( in Lac)

ParentModi Industries Ltd. (100.26) (19350.63) 98.72 (884.95)SubsidiariesIndianOwn Investment (India) Ltd. 0.09 17.83 0.70 (6.30)Your Investment (India) Ltd. 0.174 32.53 0.70 (5.13)Minority interest in all subsidiaries - 0.06 - (0.02)




( in Lac)


PROXY FORM (FORM NO. MGT-11)[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]Name of the company : MODI INDUSTRIES LIMITEDCIN : L15429UP1932PLC000469Registered Office : MODINAGAR-201204. (U.P.)

Name of the member(s)

Registered address

E-mail ID

Folio No.

I/We being the member(s) of .................equity shares of the above named Company, hereby appoint:

(1) (2) (3)NameAddressE-mail ID

or failing him or failing him

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 82st Annual General Meeting of the Company, to be heldon Thursday, the 29th September, 2016 at 12.30 P.M. at Modi Industries Transit House (Modi Industries Complex), Modinagar-201204,Distt. Ghaziabad (U.P.) and at any adjournment thereof in respect of such resolutions as are indicated below:

I wish my above proxy to vote in the name as indicated in the box below :

Resolutions For Against1. Consider and adopt:

(a) Audited Standalone Financial Statements, Report of the Board of Directorsand Auditors.

(b) Audited Consolidated Financial Statements and Auditor Report.2. Re-appointment of the following Directors, retiring by rotation:

(a) Shri Vinay Kumar Modi(b) Shri Rakesh Kumar Modi

3. Appointment of Statutory Auditors and fixing their remuneration.

4. Ratification of remuneration payable to Cost Auditors.5. Ratification of the Rent/Lease/Hire Agreements & Transactions for Cylinders/Flat/DG

Set with related parties.

Signed this ……….......…day of …........................................ 2016.

Signature of First Proxy Holder : …...................................…………..

Signature of Second Proxy holder : …………….....................................

Signature of Third Proxy holder : …………….....................................

NOTE :This form of proxy in order to be effective should be duly completed and deposited at the RegisteredOffice of the Company, not less than 48 hours before the commencement of the Meeting.

Affixrevenuestamp

of ` 1.00

Tel: 01232-231755, 243115Email : [email protected]

Website : www.modiindustries.net


Signature of Shareholder........................................................


NOTES


MODI INDUSTRIES LIMITEDCIN: L15429UP1932PLC000469

Regd. Office: Modinagar 201204 (U.P.)

ATTENDANCE SLIP

I hereby record my presnce at the 82st Annual General Meeting held at Modi Industries Transit House (Modi Industries Complex),

Modinagar 201204, Distt. Ghaziabad (U.P.) on Thursday, the 29th, September, 2016, at 12.30 P.M.

1. Full name of the Shareholder ................................................................................................................... (in Block Letters)

2. L.F. No..................................................................................................................................................................................

3. No. of Equity shares held .....................................................................................................................................................

4. Signature of the Shareholder or proxy attending................................................................................................................

To be used only when First named shareholder is not attending.

Please give full name of the 1st Joint Holder.

Mr./Mrs./Miss.............................................................................................................................................................................

NOTE: Please fill-in this attendance slip and hand it over at the ENTRANCE OF THE TRANSIT HOUSE.

Tel: 01232-231755, 243115Email : [email protected]

Website : www.modiindustries.net


Modi Industries Ltd., Transit House (Modi Industries Complex) opposite Modi Mandir, Modi Nagar.

Route Map of the Venue of the 82nd Annual General Meeting.


NOTES


BY COURIER

ANNUAL REPORT 2015-16

To,

If undelivered please return to :MODI INDUSTRIES LIMITEDCIN - L15429UP1932PLC000469Regd. Office : Modinagar - 201204. (U.P.)Tel: 01232-231755, 243115Email : [email protected] : www.modiindustries.net

MODI INDUSTRIES LIMITED · Shri Manish Kumar Modi Shri Abhishek Modi Shri Santosh Kumar Aggarwal...

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Transcript of MODI INDUSTRIES LIMITED · Shri Manish Kumar Modi Shri Abhishek Modi Shri Santosh Kumar Aggarwal...