Home  »  Company  »  Modern India  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Modern India Ltd.

Mar 31, 2017

Dear Members,

The Directors are pleased to present the Eighty Third Annual Report along with Audited Statement of Accounts for the Financial Year ended 31st March, 2017.

FINANCIAL RESULTS

(Rs. in lakhs)

Financial year 2016-17

Financial year 2015-16

Gross Profit/(Loss) before Depreciation

(386.70)

412.75

Less: Depreciation / Amortization

318.47

396.30

Profit /(Loss) before tax

(705.17)

16.45

Less : Exceptional Expenditure

-

-

Prior Period Expenses

-

-

Provision for Current Tax

-

-

Deferred Tax

(269.71)

2.71

Tax adjusted of prior year(Net)

(0.21)

-

Profit/(Loss) after Tax

(435.25)

13.74

Add: Balance brought forward

3281.23

3403.05

Balance available for appropriation

2845.98

3416.79

LESS : APPROPRIATION1

Proposed Dividend

-

112.63

Tax on distributed profit

-

22.92

Transferred to General Reserve

--

-

135.55

Balance carried to Balance Sheet

2845.98

3281.23

India seems to have braved the effects of demonetization with the Finance Ministry assuring a growth of 7% during the year, which will grow over a period of time. India continues to remain the fastest growing developing economy while retaining its GDP growth projection of 7.2% for 2017-18. In our Company’s context, the performance of the Company was average due to various reasons. As informed earlier, the Company didn’t renew any of the leave and license agreements, as the Company contemplates development of its properties, which has led to loss of rental income furthermore and with the NSEL crises, trading in commodities was stopped. The total turnover during the year under review is ?.5694.29 lakhs against Rs. 8053.36 lakhs in the year 2015-16. Due to the above factors the Company has suffered a loss of Rs. 435.25 lakhs after tax compared to a meagre profit of Rs.. 13.73 Lakhs in the corresponding previous year. As informed earlier, the Company had planned to setup a 5MW Solar Power Plant at Satara of which 3 MW Solar Power Plant has been commissioned in April 2015 and has started supplying power, the remaining 2 MW plant will be commissioned and operational soon. The delay is due to the shake up and ever fluid scenario in the renewable energy sector.

the Company has suffered losses due to the NSEL crisis which had shaken the faith of the investors in the commodity markets. Our Company along with three others had instituted a Representative Suit in the Bombay High Court inter alia against 63 Moons Technologies Limited (erstwhile Financial Technologies (India) Limited(FTIL)), National Spot Exchange Limited(NSEL) and 36 others for recovery of its dues as an investor for the trades executed on the NSEL. The said suit is now clubbed with other suits filed against 63 Moons Technologies Limited, NSEL and others. The suit is in advanced stages of hearing and the Management is of the view that the Company will be in a position to recover its debts. The Government has also ordered the merger of 63 Moons Technologies Limited and NSEL which has been challenged in Hon’ble High Court at Mumbai, the hearing for which is in progress.

The Company is regularly following up on the matter and keeps the Board Members updated about any development in the said matter. All possible steps are being taken to recover the amount receivable, Rs..1359.51 Lakhs is outstanding as on 31s1 March 2017.

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

The Company is in process of executing an agreement for sale with K Raheja Corp Pvt Ltd of Plot D-1, bearing C.S. No. 7/ 1895 of Byculla Division situate at Keshavrao Khadye Marg (Clerk Road) Mahalaxmi, Mumbai -400011 .

CHANGE IN THE NATURE OF BUSINESS, IF ANY

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

DIVIDEND AND RESERVES

Despite the lacklustre performance, your directors are recommending dividend of Rs. 0.30 per share, i.e 15% per equity share of Rs. 2/-each. The dividend for the year amounts to Rs. 135.56 including the dividend distribution tax. This proposed dividend is subject to the approval of share holders in the ensuing annual general meeting. Pursuant to amendment in Accounting standard (AS)-4, Contingencies and events occurring after the Balance sheet Date, Declaration of dividends to shareholders after the balance sheet date is not required to be recognized as a liability as at the Balance sheet date.

The Company has free reserves of Rs. 3163.58 lakhs as on 31st March, 2017.

BOARD MEETINGS AND ATTENDANCE

Details of the Directors, their meetings, attendance etc have been given in the Corporate Governance Report which forms a part of this Annual Report.

DIRECTORS AND KEY MANANGERIAL PERSONNEL

Shri Pradip Kumar Bubna (00135014), Director of the Company, retires by rotation and being eligible, offers himself for re-appointment.

The Management recommends his re-appointment.

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

The Independent Directors of our Company have met once during the year on 23.03.2017

The Nomination and Remuneration Committee and the Board of Directors have carried out the annual performance evaluation of all the Directors and the Board as a whole.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received necessary declaration from each Independent Directors of the Company under Section 149(7) of the Companies Act, 2013 stating that the Independent Directors of the Company meet with the criteria of their Independence as laid down under Section 149(6) of the Companies Act, 2013.

COMMITTEES OF THE BOARD

The Companies Act, 2013 provides for the formation and duties of various committees of the Board, the Company in compliance with the Act, already has the following Committees in existence as on 31st March, 2017 and all the committees have specific roles, duties and responsibilities.

The following are the various Committees of the Board viz.

Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Risk Management Committee. Details of the meetings held and attendance at the various committee meetings are given in the Corporate Governance Report which forms a part of this Annual Report.

AUDIT COMMITTEE

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

The Audit Committee consists of:

Shri. Anand Didwania Chairman

Shri. Rajas Doshi Member

Shri. Pradip Kumar Bubna Member

Shri. S. D. Israni Member

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

NOMINATION AND REMUNERATION COMMITTEE

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

Shri. Rajas R Doshi Chairman

Shri. Vijay Kumar Jatia Member

Shri. Anand Didwania Member

Dr. S D Israni. Member

The terms of reference of the Nomination and Remuneration Committee include reviewing and recommending the terms of remuneration payable to the Executive Director, the Key Managerial Personnel (KMPs) based on the evaluation of their performance and senior management personnel including executives holding office of profit. The Committee also evaluates the performance of the Board of Directors.

The Company has adopted a Nomination and Remuneration Policy for Directors, KMP and other employee formulated by the Committee for determining Qualification, Positive Attributes and Independence of a Director and others.

Shri. Parind Badshah, Vice President and Company Secretary acts as the Secretary to the Nomination and Remuneration Committee.

STAKHOLDERS RELATIONSHIP COMMITTEE

According to the provisions of section 178(5) of the Companies Act, 2013 and the Companies (Meetings of Board and its Powers) Rules, 2014, every company having more than 1000 shareholders/ debenture holders/ deposit holders and any other security holders is required to have a “Stakeholders Relationship Committee”. The Stakeholders Relationship Committee considers and resolves the grievances of security holders of the Company. The Committee consists of the following directors:

- Shri. Rajas R Doshi Chairman

- Shri. Vijay Kumar Jatia Member

- Shri. Pradip Kumar Bubna Member

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

As per the Provision of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has formed a “Corporate Social Responsibility Committee” of the Board consisting of the following Directors:

- Shri. Vijay Kumar Jatia Chairman

- Smt. Gauri Jatia Member

- Shri. Kaiwan Kalyaniwalla Member

- Shri. Pradip Kumar Bubna Member

The Committee is authorized to do all such acts, deeds and things which may be necessary for performing the duties and responsibilities defined under section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014. They plan and execute the various CSR activities to be undertaken by the Company.

RISK MANAGEMENT COMMITTEE

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

- Dr. S.D. Israni Chairman

- Shri. Vijay Kumar Jatia Member

- Shri. Kaiwan Kalyaniwalla Member

VIGIL MECHANISM

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

(i) immediate supervisor;

(ii) Chairman of Audit Committee

(iii) anonymously, by sending an e-mail to: vigilance@modernindia.co.in

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

During the year, the Company had received no complaints DIRECTORS’ RESPONSIBILITY STATEMENT In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby state that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure.

ii) appropriate accounting policies have been selected and applied them consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2017 and of its profit for the year ended as on that date;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

v) Internal Financial Control have been followed by the Company and that such Internal Financial Controls are adequate and are operating effectively.

vi) Directors have devised proper system to ensure Compliance with the provisions of all applicable laws and that such system are adequate and operating effectively.

INTERNAL FINANCIAL CONTROL

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

REPLY TO AUDITORS QUALIFICATION

With reference to the amount of Rs. 13.59 Crores receivables outstanding in respect of commodity trading transactions on NSEL the management considers the same as good for recovery and a representative suit has been filed in the Hon’ble High Court at Bombay and the same is currently being heard, details of which have been given under performance of the Company.

SUBSIDIARY COMPANIES MODERN INTERNATIONAL (ASIA) LIMITED, HONG KONG (MIAL)

Modern International (Asia) Limited [MIAL] is actively involved in the B2B segment Business. MIAL sources products viz Textile, Machinery, furniture, luggage, building /construction material, gift articles etc primarily from China and other countries and exports it to its clientele in other countries. The year 2016-17 was affected by the downturn in the Chinese market and global meltdown however the Company managed to increase its sales, MIAL has registered a turnover of US $ 24.27 million for the year 2016-17 as against US$ 10.82 million for the year 2015-16 and it has recorded a profit of US $ 1,92,392 (previous year US $87,402) a growth of 120%. Efforts are being taken to further increase the turnover in the coming year.

MODERN INDIA PROPERTY DEVELOPERS LIMITED (MIPDL):

Company deploys its surplus funds in real estate activities viz., Bookings of under construction residential and / or commercial space. Funds committed towards booking of under construction spaces and to be paid over a period of time, are placed with corporate entities fetching interest in the intervening period.

The Company has consciously invested into under construction spaces, which falls into affordable category wherein demand is reasonable and offers better exit opportunities. The Company has also undertaken construction and development activity in Bikaner along with a reputed builder.

During the financial year 2016-17, Company has earned profit before tax of Rs. 21.64, Lakhs as compared to a profit of Rs. 47.78 lakhs in the year 2015-16 a reduction of 54.71% due to the impact of demonetization and impending RERA implication.

MODERN INDIA FREE TRADE WAREHOUSING PRIVATE LIMITED (MIFTWPL)

The Company was set up with the aim of setting up free trade warehousing facilities, in this regards the Company has in its taken possession land at village Sai, District Raigad. The said land area has potential and will offer good opportunities over a period of time.

VERIFACTS SERVICES PRIVATE LIMITED

Verifacts Services Private Limited is a human resources consulting company providing background/ antecedents verification services. The Company has started various other essential services like online chat facility to interact with existing and prospective clients. Moreover, the Company is under negotiations with some of the giant corporate entities for extending their services.

During the year Verifacts has achieved a turnover of Rs. 2144.11 lakhs as against Rs. 1853.41 lakhs in the corresponding previous year, a growth of 15.68%. This business has immense potential to flourish in future. The Company has entered into agreements with, NSDL E-KYC, NSDL - PAN Verification, and the Company is in process of executing agreements with UIDAI and NSDL Database Management Ltd for providing better and more efficient verification services. The Company has also executed an agreement with Transunion CIBIL to provide credit scores of candidates whose background verification is being carried out on behalf of clients.

The Company has earned a profit Rs. 76,62,274 as compared to Rs. 1,13,74,894 in the corresponding previous year a reduction of 32.63%.

ASSOCIATE COMPANIES

The Company does not have any associate companies nor does it have any existing joint venture as on 31st March, 2017. Details of the Companies which have become / ceased to be its Subsidiary/ JV/ Associate Company.

During the year no other company became / ceased to be the subsidiary / JV / Associate Company.

Details of existing subsidiaries are given below:

Form AOC-I

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

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

Part “A”: Subsidiaries

Sr. No.

Information in respect of each subsidiary

Name of the subsidiaries

Modern India Free Trade Warehousing Private Limited

Modern India Property Developers Limited

Modern International (Asia) Limited

Verifacts Services Private Limited

1

Reporting period for the subsidiary concerned, if different from the holding company’s reporting period

N A

N A

N A

N A

2

Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries

N A

N A

1USD=64.84 INR

N A

3

Share capital

48000000

150000000

USD 1280000

5000000

4

Reserves & surplus

(2567760)

(53646190)

USD 931840

87875872

5

Total assets

45443740

96376810

USD 4624312

116282986

6

Total Liabilities

45443740

96376810

USD 4624312

116282986

7

Investments

-

-

-

15000000

8

Turnover

107631

3524331

USD 24265702

214410570

9

Profit before taxation

81644

2164251

USD 192392

9883253

10

Profit after taxation

81644

2154251

USD 192392

7662742

11

Proposed Dividend

NIL

NIL

NIL

50%

12

% of shareholding

51%

100%

100%

76%

EXTRACT OF ANNUAL RETURN

As required pursuant to Section 92(3) of the Companies Act, 2013 and rules 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in MGT-9 is annexed to this Report as Annexure- 1

AUDITORS’ APPOINTMENT

M/s. K S Aiyar Chartered Accountants (FRN 100186W ) the existing statutory auditors of the Company were appointed as auditor by the Members to hold office from conclusion of 82nd AGM until conclusion of 83rd AGM . Since the tenure of the existing Auditors comes to an end as per the provision of the Companies Act 2013, new Auditors are required to be appointed who shall hold office from conclusion of this AGM until conclusion of 88th AGM subject to ratification at every AGM.

At the meeting held on 19.05.2017 Board of Directors have recommended the appointment of M/s. Khandelwal Jain & Co, Chartered Accountants, FRN (105049W) as the statutory auditor of the Company who shall hold office in place of M/s K S Aiyar, Chartered Accountants on remuneration to be mutually decided by the Board of Directors and the newly appointed statutory auditor, subject to the approval of the Members.

M/s. Khandelwal Jain & Co, Chartered Accountant have experience of over 40 years and are well established and known in the industry. They have conducted audits of various listed and non-listed entities, Banks ,Financial institutions, Insurance Companies and various types of Government, Public and other Private concerns.

The Board of Directors recommends their appointment.

SECRETARIAL AUDIT REPORT

Secretarial Audit Report as provided by M/s. Parikh & Associates, Practicing Company Secretaries is annexed to this Report as ANNEXURE -2.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOINGS.

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

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

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS/ COURT OR TRIBUNALS

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

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

SECURED LOANS (Taken) : Rs. 7,13,51,181

UNSECURED LOANS (Taken): Rs. 1,00,00,000

SECURED LOANS (given): Rs. 1,24,08,778

UNSECURED LOANS (given): Rs. 1,03,69,182

CURRENT INVESTMENTS: NIL

NON CURRENT INVESTMENTS: Rs.. 65,47,99,112

GUARANTEES: Corporate Guarantee for US $ 5.6 million given to Indian Overseas Bank for credit facility availed by MIAL.

SECURITIES EXTENDED: Working Capital limits from banks are secured by hypothecation of investments in units of mutual fund.

RISK MANAGEMENT POLICY

Risk is an integral and unavoidable component of business and the Management is committed to managing the risk in a proactive and effective manner. The Board of Directors in its Meeting held on 18.10.2015 constituted the “Risk Management Committee” and adopted the Risk Management Policy. The objective is to identify and mitigate the risk. The Company has adopted a systematic approach to mitigate risk associated with accomplishment of objective, operations, revenues and regulations.

CORPORATE SOCIAL RESPONSIBILITY POLICY

The Board of Directors in its meeting held on 16.05.2014 constituted “Corporate Social Responsibility Committee”(CSR) and adopted the Corporate Social Responsibility Policy.

Based on the average Profit for last 3 years, no amount shall be required to be spent for corporate social responsibility for the year 2017-18.

ANNUAL REPORT ON CSR is annexed in ANNEXURE -3

PARTICULARS OF CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES

Details of contracts and arrangements with related parties is given in form AOC-2 as ANNEXURE- 4

FORMAL ANNUAL EVALUATION

The Board of Directors pursuant to Section 134 (3)(p) of the Companies Act, 2013 conducted an evaluation of the Board as a whole, its Committees as well as the performance of each individual director. The Independent directors at their meeting held in March 2015 had laid down the criteria / parameters for conducting the said evaluation which was accepted by the Board and based on the same, the evaluation for the year 2016-17 was conducted. The performance of the Directors and their role and the performance Committees was found satisfactory and in turn the overall performance of the Board was also satisfactory. It is important to note here that the performance of the Company has not been up to the mark, due to the conscious decision taken, to not renew the lease and license agreements of Modern Centre, stoppage of commodity trading due to NSEL crises and overall downward trend due to various market conditions, demonetization, etc in the year under review.

DISCLOSURE ABOUT COST AUDIT

Cost Audit is not Applicable to the Company.

RATIOS OF REMUNERATION TO EACH DIRECTOR

The Directors of the Board receive sitting fees for attending the meeting of the Board and its various Committees except Shri Vijay Kumar Jatia who is the Chairman and Managing Director of the Company, he is appointed by Members of the Company and due to inadequacy of profits / loss, the Company had made an application to the Central Government to approve the remuneration payable to him. The Central Government had vide its approval dated 02.06.2016 approved the payment of Rs. 84 lakhs p.a as remuneration. On 12th September, 2016 the Ministry of Corporate Affairs issued a Notification which replaced the Schedule V of the Companies Act, 2013 with the Amended Schedule V with revised Effective Capital tranches and limit of remuneration payable therein. Moreover the limit of Remuneration based on the Effective Capital could also be doubled with Shareholders approval and without Central Government approval. In the view of the said amendment, the Board of Directors approved the revision of the remuneration paid to Shri. Vijay Kumar Jatia, Chairman and Managing Director from the existing remuneration of Rs. 84 Lakhs to Rs. 1.68 Crore w.e.f 1st October, 2016. Therefore during the year Shri Vijay Kumar Jatia drew a total remuneration of Rs. 1.24 crores.

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

LISTING WITH STOCK EXCHAGE

The Company confirms that it has paid the Annual Listing fees for the year 2017-2018 to BSE where the Company’s Shares are listed.

CORPORATE GOVERNANCE

In compliance of Regulation 34 and 53 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Bombay Stock Exchange Limited, a Report on Corporate Governance, along with a Certificate of the Auditors on Corporate Governance is annexed to this Report marked as ANNEXURE -6.

The Secretarial Standards I & II are effective from 01.07.2015 as per government notification and your Company has implemented the standards well within the time prescribed.

ISSUE OF SWEAT EQUITY SHARES/ISSUE OF SHARES WITH DIFFERENTIAL RIGHTS/ISSUE OF SHARES UNDER EMPLOYEES STOCK OPTION SCHEME.

The Company has not issued any sweat equity shares/ Issue of Shares with Differential Rights/Issue of Shares under Employee’s stock option scheme during the year under review i.e 2016-17.

DISCLOSURE ON PURCHASE BY COMPANY OR GIVING OF LOAN BY IT FOR PURCHASE OF ITS SHARES.

The Company has neither purchased not given any loan to anyone for purchase of its shares.

BUY BACK OF SHARES

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

MANAGEMENT DISCUSSION AND ANALYSES

As per the requirement of Regulation 34(2) and 53(f) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis of the events, which have taken place and the conditions prevailed, during the period under review, are enclosed in ANNEXURE - B to this Report.

GREEN INITIATIVE

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

ACKNOWLEDGMENT

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

Mumbai For and on behalf of the Board of Directors

Date: 19.05.2017 Sd/-

Vijay Kumar Jatia

Chairman & Managing Director

Registered Office: Modern Centre, Sane Guriji Marg, Mahalaxmi, Mumbai- 400 011


Mar 31, 2016

Dear Members,

Your Directors are pleased to present the Eighty Second Annual Report along with Audited Statement of Accounts for the Financial Year ended 31st March, 2016.

FINANCIAL RESULTS

(Rs. in lacs)

Financial Years

Gross profit before Depreciation

2015-16 412.75

2014-15

(284.84)

Less Depreciation / Amortization

396.30

151.30

Profit before tax

16.45

(436.14)

Less : Exceptional Expenditure

-

25.00

Provision for Taxation

-

-

Less MAT credit entitlement

-

-

Prior Period Expenses

-

-

Deferred Tax

2.71

(162.89)

Profit/Loss after Tax

13.74

(249.01)

Add: Balance brought forward

3403.05

3706.28

Balance available for appropriation

3416.79

3457.27

LESS : APPROPRIATION Proposed Dividend

112.63

45.05

Tax on distributed profit

22.92

9.17

Transferred to General Reserve

- 135.55

-

54.22

Balance carried to Balance Sheet

3281.23

3403.05

GENERAL INFORMATION ABOUT THE COMPANY

The Company has various business verticals inter alia Real Estate and Infrastructure Development, offering Business Centre facilities, Power Generation, Background Verification, Commodities Trading, International procurement solutions and services and Vocational Training amongst others.

PERFORMANCE

During the year under review (i.e 2015-2016) the stock markets tumbled due to the overall downturn in the overseas market conditions and the stock market has been bearing the brunt of the same. Though the Government of India has been unveiling a slew of measures and reforms through the Budget for the year 2016-17.

The overall global business scenario is not favourable, with the Chinese economy stagnating, the Japanese economy on a downward trend but the positive being that the economic scenario is looking up with the United States reporting a small marginal growth in employment based on increase in demand and consumption.

The Indian Economy has shown a degree of stabilization and is expected to do well, the GDP is expected to be around 7%. The sovereign rating have also improved. In our Company’s context, the performance of the Company was average due to various reasons. As informed last year, the Company didn’t renew any of the leave and license agreements, as the Company contemplates redevelopment, which has led to loss of rental income and with the NSEL crises, trading in commodities has been stopped. The total turnover during the year under review is Rs. 8053.36 lacs against Rs. 5593.09 lacs in the year 201415. Due to the above factors the Company has earned a marginal profit of Rs. 13.74 lacs after tax compared to a loss of Rs. 249.01 Lacs in the corresponding previous year. As informed earlier, the Company had planned to setup a 5 MW Solar Power plant at Satara of which 3 MW Solar Power Plant has been commissioned in April 2015 and has started supplying power to the various companies and the remaining 2 MW plant will be commissioned and operational during the current financial year.

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

No major event has occurred subsequent to the date of the financial statements. As informed, the Company has suffered losses due to the NSEL crisis which has shaken the faith of the investors in the commodity markets. Our Company along with three others had instituted a Representative Suit in the Bombay High Court inter alia against Financial Technologies (India) Limited (FTIL), National Spot Exchange Limited (NSEL) and 36 others for recovery of its dues as an investor for the trades executed on the NSEL. The said suit is now clubbed with other suits filed against FTIL, NSEL and others. The suit is in advanced stages of hearing and the Management is of the view that the Company will be in a position to recover its debts.

The Company is regularly following up on the matter and keeps the Board Members updated about any development in the said matter. All possible steps are being taken to recover the amount receivable, Rs..1359.51 Lacs is outstanding as on 31s1 March 2016.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

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

DIVIDEND AND RESERVES

Despite the lackluster performance, your Directors are recommending a dividend of 0.30 per share, i.e 15 % per Equity Share of Rs..2/- each. The Dividend for the year amounts to Rs.. 135.55 Lacs including the Dividend Distribution Tax. The Company has total reserves of Rs.. 3839.17 lacs as on 31st March, 2016.

BOARD MEETINGS AND ATTENDANCE

Details of the Directors, their meetings, attendance etc have been given in the Corporate Governance Report which forms a part of this Annual Report.

DIRECTORS AND KEY MANANGERIAL PERSONNEL:

Smt Gauri Jatia (DIN:00096766), Director of the Company, retires by rotation and, being eligible, offers herself for reappointment.

The Management recommends her reappointment.

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

The Independent Directors of our Company have met once during the year on 23.03.2016

The Nomination and Remuneration Committee and the Board of Directors have carried out the annual performance evaluation of all the Directors and the Board as a whole.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received necessary declaration from each Independent Directors of the Company under Section 149(7) of the Companies Act, 2013 stating that the Independent Directors of the Company meet with the criteria of their Independence as laid down under Section 149(6) of the Companies Act, 2013.

COMMITTEES OF THE BOARD

The Companies Act, 2013 provides for the formation and duties of various committees of the Board, the Company in compliance with the Act, already has the following Committees in existence as on 31st March, 2016 and all the committees have specific roles, duties and responsibilities.

The following are the various Committees of the Board viz.

Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Risk Management Committee. Details of the meetings held and attendance at the various committee meetings are given in the Corporate Governance Report which forms a part of this Annual Report.

AUDIT COMMITTEE

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

The Audit Committee consists of:

Shri. Anand Didwania Chairman

Shri. Rajas Doshi Member

Shri. Pradip Kumar Bubna Member

Shri. S. D. Israni Member

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

NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee was constituted in April, 2002 and has been reconstituted from time to time. Shri. Vijay Kumar Jatia, Chairman and Managing Director of the Company was appointed as a member of the Committee in the Board meeting held on 11th May, 2015 and the Committee currently comprises of four directors where majority are Independent Directors. The Nomination and Remuneration Committee comprises:

Shri. Rajas R Doshi Chairman

Shri Vijay Kumar Jatia Member

Shri. Anand Didwania Member

Dr. S D Israni. Member

The terms of reference of the Nomination and Remuneration Committee include reviewing and recommending the terms of remuneration payable to the Executive Director and the Key Managerial Personnel (KMPs) based on the evaluation of their performance. The Committee also evaluates the performance of the Board of Directors. Shri. Parind Badshah, Vice President and Company Secretary acts as the Secretary to the Nomination and Remuneration Committee.

The Company has adopted a Nomination and Remuneration Policy for Directors, KMP and other employee formulated by the Committee for determining Qualification, Positive Attributes and Independence of a Director.

STAKHOLDERS RELATIONSHIP COMMITTEE

According to the provisions of section 178(5) of the Companies Act, 2013 and the Companies (Meetings of Board and its Powers) Rules, 2014, every company having more than 1000 shareholders/ debenture holders/ deposit holders and any other security holders is required to have a “Stakeholders Relationship Committee”. The Stakeholders Relationship Committee considers and resolves the grievances of security holders of the Company. The Committee consists of the following Directors:

- Shri Rajas R Doshi Chairman

- Shri Vijay Kumar Jatia Member

- Shri Pradip Kumar Bubna Member

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

As per the Provision of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has formed a “Corporate Social Responsibility Committee” of the Board consisting of the following Directors:

- Shri Vijay Kumar Jatia Chairman

- Smt Gauri Jatia Member

- Shri Kaiwan Kalyaniwalla Member

- Shri Pradip Kumar Bubna Member

The Committee is authorized to do all such acts, deeds and things which may be necessary for performing the duties and responsibilities defined under section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014. They plan and execute the various CSR activities to be undertaken by the Company.

RISK MANAGEMENT COMMITTEE

The Company has formed a risk management committee to evaluate the various risk factors faced by the organization and how the same can be mitigated. The Committee comprises of the following Directors:

- Dr S.D. Israni Chairman

- Shri Vijay Kumar Jatia Member

- Shri Kaiwan Kalyaniwalla Member

VIGIL MECHANISM:

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

(i) immediate supervisor;

(ii) Chairman of Audit Committee

(iii) anonymously, by sending an e-mail to: vigilance@modernindia.co.in

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

During the year, the Company had received no complaints. DIRECTORS’ RESPONSIBILITY STATEMENT In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby state that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure.

ii) appropriate accounting policies have been selected and applied them consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of its profit for the year ended as on that date;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

v) Internal Financial Control have been followed by the Company and that such Internal Financial Controls are adequate and are operating effectively.

vi) Directors have devised proper system to ensure Compliance with the provisions of all applicable laws and that such system are adequate and operating effectively.

INTERNAL FINANCIAL CONTROL

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

REPLY TO AUDITORS QUALIFICATION

With reference to the amount of Rs. 13.59 Crores receivables outstanding in respect of commodity trading transactions on

NSEL the management considers the same as good for recovery and a representative suit has been filed in the Hon’ble High Court at Bombay and the same is currently being heard, details of which have been given under events subsequent to the date of financial statements.

With regards to note no. 30 of the Notes to Accounts, Management is of view that the diminution in value of the investment is temporary in nature.

SUBSIDIARY COMPANIES MODERN INTERNATIONAL (ASIA) LIMITED, HONG KONG (MIAL)

Modern International (Asia) Limited [MIAL] is actively involved in the B2B segment Business. MIAL sources products viz textile, furniture, luggage, building /construction material, gift articles etc primarily from China and other Countries and exports it to its clientele in other countries. The year 2015-16 was severely affected by the downturn in the Chinese market and global meltdown across, the Company''s sales were adversely affected, in the given scenario MIAL has registered a turnover of US $10.82 million for the year 2015-16 as against US$ 23.25 million for the year 2014-15 and it has recorded profit of US $87,402 (previous year US $1,83,585)

MODERN INDIA PROPERTY DEVELOPERS LIMITED (MIPDL):

Company deploys its surplus funds in real estate activities viz., Bookings of under construction residential and / or commercial space. Funds committed towards booking of under construction spaces and to be paid over a period of time, are placed with corporate entities fetching interest in the intervening period.

The Company has consciously invested into under construction spaces, which falls into affordable category wherein demand is reasonable and offers better exit opportunities. The Company has also undertaken construction and development activity in Bikaner along with a reputed builder.

During the financial year 2015-16, Company has earned profit before tax of Rs. 47.93 lacs as compared to a profit of Rs. 13.69 lac in the year 2014-15.

The Government has implemented the Real Estate (Regulation and Development) Act, 2016 which is expected to benefit both builders as well as the buyers.

MODERN INDIA FREE TRADE WAREHOUSING PRIVATE LIMITED (MIFTWPL)

The Company was set up with the aim of setting up free trade warehousing facilities, in this regards the Company has in its possession land at village Sai, District Raigad. The said land area has potential and will offer good opportunities over a period of time.

VERIFACTS SERVICES PRIVATE LIMITED

Verifacts Services Private Limited, is a human resources consulting company providing background/ antecedents verification services. The Company has started various other essential services like online chat facility to interact with existing and prospective clients Moreover, the Company is under negotiations with some of the giant corporate entities for extending their services.

During the year Verifacts has achieved a turnover of Rs. 1853.41 lacs as against Rs. 1485.54 lacs in the corresponding previous year. This business has immense potential to flourish especially with the push by the Government of India for the Make in India concept, Start Up India initiative etc., this will result in the growth of the bottom line of your Company in the coming years.

ASSOCIATE COMPANIES

The Company does not have any associate companies nor does it have any existing joint venture as on 31st March, 2016.

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

During the year no other company became / ceased to be the subsidiary / JV / Associate Company.

Details of existing subsidiaries is given below:

Form AOC-I

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures

Part “A”: Subsidiaries

Sl. No.

Information in respect of each subsidiary

Name of the subsidiaries

Modern India Free Trade Warehousing Private Limited

Modern India Property Developers Limited

Modern International (Asia) Limited

Verifacts Services Private Limited

1

Reporting period for the subsidiary concerned, if different from the holding company’s reporting period

N A

N A

N A

N A

2

Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries

N A

N A

1USD=66.33INR

N A

3

Share capital

48000000

150000000

USD 1280000

5000000

4

Reserves & surplus

(2649404)

(55803023)

USD 739448

80213130

5

Total assets

45362046

94329091

USD 4540367

113657134

6

Total Liabilities

45362046

94329091

USD 4540367

113657134

7

Investments

-

-

NIL

-

8

Turnover

109193

6442593

USD 10820370

185341129

9

Profit before taxation

82711

4793380

USD 87402

18546050

10

Profit after taxation

82711

3551380

USD 87402

11374894

11

Proposed Dividend

NIL

NIL

NIL

50%

12

% of shareholding

51%

100%

100%

76%

EXTRACT OF ANNUAL RETURN

As required pursuant to Section 92(3) of the Companies Act, 2013 and rules 12(1) of the Companies (Management and Administration) Rules,2014, an extract of Annual Return in MGT-9 is annexed to this Report as Annexure 1

AUDITORS’ APPOINTMENT

As per the requirement of the Companies Act, 2013, an auditor who has been the auditor of the Company for a period of 10 continuous years or more will be required to relinquish his position, however the act provides for an interim period of 3 years to the Company to scout for a new Auditor.

Last year Messers K. S. Aiyar & Company, Chartered Accountants were appointed to hold office from the conclusion of the 81 st Annual General Meeting to the conclusion of the 83rd Annual General Meeting. The Board of Directors recommend the ratification of the appointment of the Statutory Auditors for the year 2016-2017 (i.e from the conclusion of the 82nd Annual General Meeting upto the conclusion of the 83rd Annual General Meeting).

SECRETARIAL AUDIT REOPRT

Secretarial Audit Report as provided by M/s Parikh & Associates Practicing Company Secretaries is annexed to this Report as Annexure 2.

The Company has received the Secretarial Audit report with two observations with regards to the following

a. During the period under review, the Company has spent an amount of Rs.3.76 lacs against the amount of Rs.4.24 lacs to be spent during the year towards Corporate Social Responsibility.

The balance amount had remained un-utilized as repair work was progressing at a slow pace and the same will be utilized during the current financial year.

b. Litigations in respect of Representative Suit filed by the Company against Financial Technologies (India) Ltd, National Spot Exchange Ltd and 36 others for recovery of its dues as an Investor for the Trade executed on the NSEL.

With regard to receivables from NSEL the management considers the same as good for recovery and the representative suit filed in the Hon''ble High Court at Bombay is currently being heard, details of which have been given under events subsequent to the date of financial statements.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOINGS.

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

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

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATOR/ COURT OR TRIBUNALS

There are no significant and material orders passed by the regulators or Court or Tribunals impacting the Going Concern status and the Company‘s operations in future.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company have duly complied with the Provision of the Companies Act, 2013 and the Company has taken / given SECURED LOANS (Taken) : Rs. 113832943 UNSECURED LOANS (Taken/ given): NIL CURRENT INVESTMENTS: NIL

NON CURRENT INVESTMENTS : Rs. 665994869

GUARANTEES : Corporate Guarantee for US $ 5.6 million to Indian Overseas Bank.

SECURITIES EXTENDED : Rs. 5.2 crores and land bearing plot no. D1 admeasuring 1204.99 sq mtrs and Building appurtenant there to bearing C.S.No. 7/1895 (PART) Byculla Division.

RISK MANAGEMENT POLICY:

Risk is an integral and unavoidable component of business and the Management is committed to managing the risk in a proactive and effective manner. The Board of Directors in its Meeting held on 18.10.2015 constituted the “Risk Management Committee” and adopted the Risk Management Policy. The objective is to identify and mitigate the risk. The Company has adopted a systematic approach to mitigate risk associated with accomplishment of objective, operations, revenues and regulations.

CORPORATE SOCIAL RESPONSIBILITY POLICY

The Board of Directors in its meeting held on 16.05.2014 constituted “Corporate Social Responsibility Committee”(CSR) and adopted the Corporate Social Responsibility Policy.

The Committee recommends the activities to be undertaken which are approved by the Board, an amount of Rs. 376250/was spent out of Rs. 424188/- as CSR Activity for the year 2015-16. The balance unutilized amount is being carried forward to the next financial year.

The balance amount of Rs. 47,938 is yet to be utilized, the total balance for the year 2014-15 and 2015-16 would be utilized along with the amount available for the year 2016-17 and the reason for not spending the un-utilized amount was because the repair work was progressing at a slow pace and the same will be utilized during the current financial year.

ANNUAL REPORT ON CSR is annexed in ANNEXURE 3

PARTICULARS OF CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES

Details of contracts and arrangements with related parties is given in form AOC-2 as ANNEXURE-4 FORMAL ANNUAL EVALUATION

The Board of Directors pursuant to Section 134 (3)(p) of the Companies Act, 2013 conducted an evaluation of the Board as a whole, its Committees as well as the performance of each individual director. The Independent Directors at their meeting held in March 2015 had laid down the criteria / parameters for conducting the said evaluation which was accepted by the Board and thereafter the evaluation was conducted. The performance of the Directors and their role and the performance of the Committees was found satisfactory and in turn the overall performance of the Board was also satisfactory. It is important to note here that the performance of the Company has not been upto the mark, due to the conscious decision taken to not renew the lease and license agreements of Modern Centre, stoppage of commodity trading due to NSEL crises and overall downward trend in the market witnessed in the year under review.

DISCLOSURE ABOUT COST AUDIT

Cost Audit is not Applicable to the Company.

RATIOS OF REMUNERATION TO EACH DIRECTOR

The Directors of the Board receive sitting fees for attending the meeting of the Board and its various Committees except Shri Vijay Kumar Jatia who is the Chairman and Managing Director of the Company, he is appointed by Members of the Company and the Company has made an application to the Central Government to approve the remuneration payable to him as the same being approved by the shareholders of the company in the 81st Annual General Meeting. Meanwhile, he continuous to draw at the rate payable to him during last appointment. In view of this, only one ratio of remuneration of the director (Managing Director) with the median of the employees is possible, which is enclosed as ANNEXURE 5.

LISTING WITH STOCK EXCHAGE

The Company confirms that it has paid the Annual Listing fees for the year 2016-2017 to BSE where the Company’s Shares are listed.

CORPORATE GOVERNANCE

In compliance of Regulation 34 and 53 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Bombay Stock Exchange Limited, a Report on Corporate Governance, along with a Certificate of the Auditors on Corporate Governance is annexed to this Report marked as ANNEXURE-6.

The Secretarial Standards I & II became effective from 01.07.2015 as per government notification and the Company has implemented the standards well within the time prescribed.

ISSUE OF SWEAT EQUITY SHARES/ISSUE OF SHARES WITH DIFFERENTIAL RIGHTS/ISSUE OF SHARES UNDER EMPLOYEES STOCK OPTION SCHEME.

The Company has not issued any sweat equity shares/ Issue of Shares with Differential Rights/Issue of Shares under Employee’s stock option scheme during the year under review i.e 2015-16.

DISCLOSURE ON PURCHASE BY COMPANY OR GIVING OF LOAN BY IT FOR PURCHASE OF ITS SHARES.

The Company has neither purchased not given any loan to anyone for purchase of its shares.

BUY BACK OF SHARES

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

MANAGEMENT DISCUSSION AND ANALYSES

As per the requirement of Regulation 34(2) and 53(f) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)Regulations, 2015 the Management Discussion and Analysis of the events, which have taken place and the conditions prevailed, during the period under review, are enclosed in ANNEXURE - B to this Report.

GREEN INITIATIVE:

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

ACKNOWLEDGMENT

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

Mumbai

Date: 26.05.2016 For and on behalf of the Board of Directors

Sd/-

Registered Office:

Modern Centre,Sane Guriji Marg,

Mahalaxmi,Mumbai- 400 011 Vijay Kumar Jatia

Chairman & Managing Director


Mar 31, 2014

Dear Members,

The Directors are pleased to present the Eightieth Annual Report along with Audited statement of Accounts for the Financial Year ended 31st March, 2014.

FINANCIAL RESULTS

(Rs.in lacs)

Financial Years

2013-14 2012-13

Gross profit before Depreciation 463.27 944.02

Less Depreciation / Amortization 155.06 156.21

Profit before tax 308.21 787.81

Add/(Less) Exceptional Items (Net) 129.82 (162.90)

Provision for Taxation 116.00 119.50

Less MAT credit entitlement (24.81) 91.19 69.40 50.10

Prior Period Expenses / Tax 32.55 10.29

Deferred Tax (92.09) 70.93

Profit after Tax 406.38 493.59

Add: Balance brought forward 3576.99 3350.92

Balance available for appropriation 3983.37 3844.51

LESS :APPROPRIATION

Proposed Dividend 187.71 187.71

Tax on distributed profit 31.90 30.45

Transferred to General Reserve 40.64 260.25 49.36 267.52

Balance carried to Balance Sheet 3723.12 3576.99

DIVIDEND

Despite the lack luster performance your Directors are recommending a dividend of 0.50 ps. per share, i.e 25% per Equity Share of Rs.2/- each. The Dividend for the year amounts to 219.61 Lacs including the Dividend Distribution Tax.

REVIEW OF OPERATIONS.

During the year under review (i.e 2013-2014) the stock markets were upbeat with the election results predicting a win for the right wing BJP with Shri Narendra Modi as its PM designate. The overall global business scenario is not favourable and there has been a downturn in all sectors in the Indian economy with the GDP dropping below 5%.

BUSINESS OPERATIONS

The business segments of the Company consist of Real Estate, Trading and Jewellery Training Institute.

Real Estate

Real estate sector is marked by declining volumes, over supply and lack of sustained economic activity. With the economy in a tailspin, the leasing business witnessed a slowdown due to factors such as over supply, lower foreign investments and poor domestic triggers in the retail segment, mixed signals have been witnessed, residential segment has remained muted.

The sector was plagued by high interest cost, however the proposed increase in allocation in the twelfth five-year plan (2012-2017) will translate into a healthy business for real estate companies.

Your Company will continue to focus on building scale through sourcing land in a capital efficient manner and will continue to actively explore suitable re-development opportunities which will add value to the Company and its stakeholders, Company has entered into a joint development of land agreement, which will be beneficial in the long term.

Trading:

Trading activities consist of trading in various commodities including cloth, yarn, sponge iron, steel products, paddy, castor etc. During the year, total sale of trading items stood at Rs. 144.78 Crores as against Rs.440.98 Crore in the corresponding previous year. The fall in volume & revenue is due to the crisis in NSEL which led to a complete closure of trading activity in commodities from August 2013.

INDIAN INSTITUTE OF JEWELLERY (IIJ) – DIVISION OF THE COMPANY FOR VOCATIONAL TRAINING

The Indian Institute of Jewellery (IIJ) is a leading professional institute, recognized and accepted by the jewellery industry for quality training, state-of-the art infrastructure and industry-relevant curriculum;

IIJ has remodeled itself both in terms of curriculum and delivery of programs to meet with the needs of the jewellery industry;

Indian Institute of Jewellery is also the technical partner for the University of Mumbai - Garware Institute of Career Development for the post graduate and undergraduate program in Jewellery Management and is affiliated member of National Skill Development Council.

IIJ has also written the curriculum for the Ministry of Labour and Employment for the Gems and Jewellery

Reply to Auditors Qualification

In view of the steps taken by the Management it is felt that there are good chances of recovery and hence no provision is being made.

SUBSIDIARY COMPANIES

MODERN INTERNATIONAL (ASIA) LIMITED, HONG KONG (MIAL)

Modern International (Asia) Limited [MIAL] is actively involved in the B2B segment. MIAL sources products from China and S. E. Asian countries and exports it to its clientele in other countries. With a wide and varied range of products including textile, furniture, luggage, building / construction material, gift articles etc. Inspite of lull prevailing in major parts of the world, MIAL has registered a turnover of US$ 19.4 million in Financial Year 2013-14 (previous year US$12.8 million). Operations of the Company has stabilized and it has recorded a profit of US $158473 (previous year US $ 506)

The Statutory Auditors in their Report on the Consolidated Financial Statements for the year ended on March 31, 2014 have qualified their opinion as regards investments of about US$ 51,623 made by its wholly owned subsidiary Modern International (Asia) Limited in its Associate concern and its carrying amount as at March 31, 2014.The Management is of the opinion that carrying amount of investment is fully realizable and in view of the steps initiated by the management, there is no permanent diminution in the value of aforesaid investments as at March 31, 2014.

MODERN INDIA PROPERTY DEVELOPERS LIMITED (MIPDL):

Company deploys its surplus funds in real estate activities viz., Bookings of under construction residential and / or commercial space. Funds committed towards booking of under construction spaces and to be paid over a period of time, are placed with corporate entities fetching interest in the intervening period.

The Company has consciously invested into under construction spaces, which falls into affordable category wherein demand is reasonable and offers better exit opportunities.

Above scheme of things have worked well and during the financial year 2013-14, Company has earned profit before tax of Rs.58.51Lacs.

MODERN INDIA FREE TRADE WAREHOUSING PRIVATE LIMITED (MIFTWPL)

Company has taken possession of land at village Sai, District Raigad which was acquired during the preceding years, the said land area has potential and will offer good opportunities over a period of time.

VERIFACTS SERVICES PRIVATE LIMITED

Modern India Limited signed a Share Purchase Agreement with the Promoters of Verifacts Services Private Limited wherein Modern India Limited agreed to acquire 3,80,000 equity shares aggregating to 76 % of the paid up share capital of Verifacts Services Pvt Ltd. for a consideration of Rs.28 Crores. With the acquisition of these shares Verifacts Services Private Limited is the Subsidiary of Modern India Limited with effect from 4th February 2014.

Verifacts Services Private Limited is headquartered in Bangalore, it is a human resources consulting company providing background/ antecedents verification services. Verifacts Services Private Limited has 7 other branches and several associates across the globe providing services to a large number of multinationals and national companies worldwide. With this addition, Modern India Limited has forayed into the business of verifications services.

During the year, Verifacts has achieved a turnover of Rs. 14.72 crores as against Rs. 14.30 crores in the corresponding previous year. It is expected that this business has immense potential to flourish and this will result in the growth of the bottom line of your Company.

SOLAR POWER PLANT

Modern India Ltd is in the process of setting up a 5 MW solar power plant in Satara District, Maharashtra at an estimated total cost of Rs. 36.00 Cr. Your company is taking all necessary regulatory approvals from various authorities before commissioning of the plant.

Company has signed contracts with suppliers for delivering the Solar panels and the other equipments required. Certain equipments have been received and are being installed and the Company anticipates that in the coming few months part of plant could be commissioned.

Till date a sum of Rs. 12.78 Crores has been spent on the project.

NSEL CRISIS

Our Company has suffered losses due to the recent NSEL crisis that has shaken the faith of the investors in the commodity markets. In view of the losses and the monies being locked up, Modern India Ltd. along with three others have instituted a Suit in the Hon''ble High Court of Bombay inter alia against Financial Technologies (India) Ltd. (FTIL), National Spot Exchange Ltd. (NSEL) and 36 others for recovery of its dues, as an investor for the trades executed on the NSEL.

The Company is regularly following up and will keep all stockholders updated about any development in the said matter. All possible steps are being taken to recover the amount receivable. As on date, Rs.1365 Lacs is outstanding.

The said matter is currently being heard in the Hon''ble High Court of Bombay.

ANNUAL ACCOUNTS OF SUBSIDIARY COMPANIES:

The Ministry of Corporate Affairs has granted general exemption to all companies from attaching a copy of Balance Sheet, Statement of Profit & Loss, and Report of the Board of Directors and Report of the Auditors of Subsidiary Companies vide circular dated 08.02.2011. Pursuant to the said general exemption/permission certain details are published regarding the Subsidiaries in an Annexure to this report. Moreover, pursuant to the Accounting Standard 21 issued by the Institute of Chartered Accountants of India, the Company includes the financial information of the Subsidiaries in its notes to the Annual Accounts. Any Member of the Company, desirous of inspecting the same, may inspect and/or request for copy of these documents or any details relating to these documents.

DIRECTORS

Shri Rusi Sethna our independent director passed away on 11.05.2014. The Board and the Management express their heartfelt condolences and the Board places on record his valuable contribution towards the growth of the Company.

As per the new Companies Act, 2013 implemented with effect from 1st April 2014, Independent Directors can be appointed for two terms of five years each, and in view of the explanation given to section 149 (10) and (11), any tenure of the independent director on the date of commencement of the Act shall not be counted, therefore the Management is of the opinion to appoint the following directors viz Shri Anand Didawani, Shri Rajas Doshi, Shri Dilip Thakar, and Shri S D Israni as Independent Directors for a term of 5 years with effect from the date of Annual General Meeting , on the Board of the Company.

Shri Kaiwan Kalyaniwalla was appointed as an Additional Director (Independent) on 16.05.2014 and he will hold office upto the ensuing Annual General Meeting and being eligible offers himself for appointment. Management is of the opinion that Shri Kaiwan Kalyaniwalla will be able to contribute towards the growth of the Company & recommend his appointment an Independent Director of the Company from the date of Annual General Meeting.

Brief resume of all Directors are provided in the Report on Corporate Governance forming part of the Annual Report.

Smt. Gauri Jatia, Director of the Company, retires by rotation and, being eligible, offers herself for re-appointment.

The Management recommends her reappointment.

CONSOLIDATION OF ACCOUNTS:

In pursuance of the mandatory compliance of the Accounting Standard 21, as issued by the Institute of Chartered Accountants of India, the Company has presented Consolidated Financial Statements, for the year under review, consolidating its Accounts with the Accounts of its Subsidiary Companies, Modern International (Asia) Limited, Modern India Property Developers Ltd., Modern India Free Trade Warehousing Pvt. Ltd. and Verifacts Services Pvt Ltd. A separate Report of the Statutory Auditors, on consolidated Financial Statements also forms part of the same.

DEFERRED TAX: The total net Deferred Tax liabilities as on 31.03.2014 are Rs. 23.57 lacs [Previous Year Rs. 115.66 lacs]. Rs.92.09 Lacs [Previous Year Rs.70.93 Lacs debited] have been credited to the Statement of Profit & Loss for the year in respect of the Deferred Tax.

AUDITORS'' APPOINTMENT: Members are requested to appoint Auditors and fix their remuneration. The present Auditors, Messers K.S. Aiyar & Company, Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. It is must noted that according to the new Companies Act 2013, an auditor who has been the auditor of the Company for a period of 10 continuous years or more will be required to relinquish his position, however the Act provides for an interim period of 3 years to the Company to scout for a new Auditor. In view of the same, it is proposed to reappoint Messrs K.S. Aiyar & Company, Chartered Accountants as Statutory Auditor of the Company for a further period of one year.

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

INSURANCE

Adequate insurance cover has been taken for the properties of the Company including Stocks, Tools and Machineries, Furniture and Fixtures, Electronic and Electric Equipments, Vehicles and to cover Directors'' and Officers'' Liability.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied them consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of its profit for the year ended as on that date;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOINGS.

In compliance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, a statement giving requisite information is given in Annexure ''A'' forming part of this Report.

PARTICULARS OF EMPLOYEES

Other than the Chairman and Managing Director, there was no employees receiving remuneration as prescribed under Section 217 (2A) of the Companies Act, 1956, during the period under review. Having regard to the provisions of Section to 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. Any Member interested in obtaining such particulars may write to the Company Secretary of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS

As per the requirement of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited, the Management Discussion and Analysis of the events, which have taken place and the conditions prevailing, during the period under review, are elucidated in ANNEXURE - 1 to this Report.

CORPORATE GOVERNANCE

In compliance of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited, a Report on Corporate Governance, along with a Certificate of the Auditors on Corporate Governance is annexed to this Report marked ANNEXURE - 2.

GREEN INITIATIVE:

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

ACKNOWLEDGMENT

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

For and on behalf of the Board of Directors

Mumbai, Vijay Kumar Jatia

Dated, 16th May, 2014 Chairman & Managing Director

Registered Office:

Modern Centre, Sane Guruji Marg, Mahalaxmi, Mumbai-400011.


Mar 31, 2013

To the Members,

The Directors have pleasure in presenting the Seventy-nineth Annual Report of the Company along with the Audited Accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS

(Rs. in lacs)

Financial Years

2012-13 2011-12

Gross profit before Depreciation 948.74 712.41

Less Depreciation / Amortization 156.21 166.23

Profit before tax 792.53 546.18

Less : Exceptional Expenditure 162.89 586.43

Provision for Taxation 119.50 -

Less MAT credit entitlement 69.40 50.10 - -

Prior Period Expenses 15.02 -

Deferred Tax 70.93 (70.97)

Profit after Tax 493.59 30.72

Add: Balance brought forward 3350.92 3497.14

Balance available for appropriation 3844.51 3527.86

LESS : APPROPRIATION

Proposed Dividend 187.71 150.17

Tax on distributed profit 30.45 24.36

Transferred to General Reserve 49.36 267.52 2.41 176.94

Balance carried to Balance Sheet 3576.99 3350.92



DIVIDEND

Your Directors are pleased to recommend a dividend of Rs.. 00/50 ps. (25%) per Equity Share of Rs.2/- each. The outgo for Dividend for the year amounts to Rs. 218.16 Lacs including the Dividend Distribution Tax.

BUSINESS OPERATIONS

The business segments of the Company consist of Real Estate, Business Centre, Trading and Jewellery Training Institute.

Real Estate

The year 2012 was a challenging year for the Indian real estate sector marked by declining volumes, over supply and lack of sustained economic activity. The leasing business witnessed a slowdown due to factors such as oversupply, lower foreign investments and poor domestic triggers. The retail segment, however, witnessed a mixed year as overcapacities got absorbed. As for the residential segment, the same remained muted. The trends varied in different markets with some witnessing price correction and other seeing higher volume growth.

On an overall basis, companies from the real estate sector faced issues related to higher interest costs on the back of leveraged balance sheets.

India requires quality infrastructure. This simple fact is the long term driver of the real estate sector as infrastructure investments are the most important growth driver for real estate companies. While short term factors will keep the sentiments subdued, over the long term, demand will remain strong. The proposed increase in allocation in the twelfth five-year plan (2012-2017) will translate into a healthy business for real estate companies.

Your Company will continue to focus on building scale through sourcing land in a capital efficient manner and will continue to actively explore suitable re-development opportunities which will be value to the Company and its stakeholders

Business Centre: During the year under review, Joint Venture agreement for running Business Centre has been concluded and activity of the Business Centre has come to an end. The revenue from the Business Centre has been Rs. 48.15 Lacs as compared to Rs. 429.34 Lacs in the previous year.

Trading: Trading activities consist of various commodities including cloth, yarn, sponge iron, steel flat products, paddy, castor etc. During the year, total sale of trading items were at Rs. 439.79 Crores as against Rs.287.97 Crore in the corresponding previous year.

SUBSIDIARY COMPANIES

MODERN INTERNATIONAL (ASIA) LIMITED, HONG KONG (MIAL)

Modern International (Asia) Limited [MIAL] is into B2B segment Business. MIAL sources products, namely from China and S. E. Asian Countries and exports to its clientele in other countries. The range of product is wide and varied including textile, furniture, luggage, building / construction material, gift articles etc. Inspite of lull prevailing in major parts of the world, MIAL has registered turnover of US$ 12.8 million in Financial Year 2012-13 (previous year US$12.05 million). Operations of the Company has stabilized and it recorded profit of US $95,506 (previous year US $45,396), before providing for loss of US $95,000 due to cybercrime fraud.MIAL has chalked calibrated marketing plans and we expect to achieve higher turnover and profitability in the coming year.

The Statutory Auditors in their Report on the Consolidated Financial Statements for the year ended on March 31, 2013 have qualified their opinion as regards investments of about Rs. 27.90 Lacs made by its wholly owned subsidiary Modern International (Asia) Limited in its Associate concern and its carrying amount as at March 31, 2013. The Management is of the opinion that carrying amount of investment of Rs. 27.90 Lacs is fully realizable and in view of the steps initiated by the management, there is no permanent diminution in the value of aforesaid investments as at March 31, 2013.

MODERN INDIA PROPERTY DEVELOPERS LIMITED (MIPDL):

The available funds with the Company are deployed into real estate activities viz., Bookings of under construction residential and / or commercial space. Funds committed towards booking of under construction spaces and to be paid over a period of time, are placed with corporate entities fetching interest in the intervening period;

The Company has consciously invested into under construction spaces, which falls into affordable category wherein demand is reasonable and offers better exit opportunities;

Above scheme of things have worked well and during the financial year 2012-13, Company has earned profit before tax of Rs.63.75Lac;

MODERN INDIA FREE TRADE WAREHOUSING PRIVATE LIMITED (MIFTWPL)

During the year identified land areas at Village SAI, Dist., RAIGAD, have been acquired. Balance advance payment made towards purchases of the land has been received back. The acquired land areas have potential and offers opportunities over a period of time.

INDIAN INSTITUTE OF JEWELLERY (IIJ) – DIVISION OF THE COMPANY FOR VOCATIONAL TRAINING

The Indian Institute of Jewelry (IIJ) is leading professional institute, recognized and accepted by the jewelry Industry for quality training, state-of-the art infrastructure and industry-relevant curriculum;

IIJ went through several changes during the year with deliberate shift in its long term vision and plans and has now remodeled itself both in terms of curriculum and delivery of programs to meet with the needs of the jewelry industry;

Tanishq todays leaders in the jewelry industry were one of the most active patrons of the graduation ceremony amongst seven other reputed companies; Indian Institute of Jewelry has recently signed an MOU with Somaiya College of Commerce for an on line program and Reliance jewels for conditional placement of students

ANNUAL ACCOUNTS OF SUBSIDIARY COMPANIES

The Ministry of Corporate Affairs has granted general exemption from attaching a copy of Balance Sheet, Profit & Loss Account, and Report of the Board of Directors and Report of the Auditors of all the three Subsidiary Companies. Pursuant to the said general exemption/permission certain details are published about the Subsidiaries in Annexure to this report. Moreover, pursuant to the Accounting Standard 21 issued by the Institute of Chartered Accountants of India, the Company includes the financial information of the Subsidiaries in its notes to the Annual Accounts. Any member of the Company, desirous of inspecting the same, may inspect and/or request for copy of these documents or any details relating to these documents.

DIRECTORS

A) Shri. Rajas R Doshi, Director of the Company, retire by rotation and, being eligible, offers himself for re-appointment.

B) Shri. Pradip K Bubna Director of the Company, retire by rotation and, being eligible, offers himself for re-appointment.

Taking into consideration stake of the Promoters and with a view to continue to avail the services of Shri Vijay Kumar Jatia, as Chairman, it is necessary that there is stability in the top management of the Company. It is felt by the Board to make Shri Vijaykumar Jatia as Permanent Chairman. Your Directors recommend the resolution for approval.

CONSOLIDATION OF ACCOUNTS

In pursuance of the mandatory compliance of the Accounting Standard 21, as issued by the Institute of Chartered Accountants of India, the Company has presented Consolidated Financial Statements, for the year under Report, consolidating its Accounts with the Accounts of its Subsidiary Companies, Modern International (Asia) Limited, Modern India Property Developers Ltd. and Modern India Free Trade Warehousing Pvt. Ltd. as also accounts of the Joint Venture – Central Bombay Infotec Park to the extent of the investment made by the Company. A separate Report of the Statutory Auditors, on consolidated Financial Statements also forms part of the same.

DEFERRED TAX : The total net Deferred Tax liabilities as on 31.03.2013 are Rs. 115.66 lacs [Previous Year Rs. 44.72lacs]. Rs. 70.93 Lacs [Previous Year Rs. 70.97 Lacs credited] have been debited to Profit & Loss account of the year in respect of the Deferred Tax.

AUDITORS'' APPOINTMENT

Members are requested to appoint Auditors and fix their remuneration. The present Auditors, Messrs K.S. Aiyar & Company, Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

FIXED DEPOSITS

During the year under Report, the Company has neither accepted nor renewed any Fixed Deposits, under Section 58A, read with Companies (Acceptance of Deposits) Rules, 1975.

INSURANCE

Adequate insurance cover has been taken for the properties of the Company including Stocks, Tools and Machineries, Furniture and Fixtures, Electronic and Electric Equipments, Vehicles and to cover Directors'' and Officers'' Liability.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied them consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of its profit for the year ended as on that date;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOINGS.

In compliance with the provisions of Section 217(1)(e) read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, a statement giving requisite information is given in Annexure ''A'' forming part of this Report.

PARTICULARS OF EMPLOYEES

There were no employees receiving remuneration as prescribed under Section 217(2A) of the Companies Act, 1956, during the period under review. Hence, the Companies (Particulars of Employees) Rule, 1975 do not apply to the Company.

MANAGEMENT DISCUSSION AND ANALYSES

As per the requirement of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited, the Management Discussion and Analyses of the events, which have taken place and the conditions prevailed, during the period under review, are elucidated in ANNEXURE - 1 to this Report.

CORPORATE GOVERNANCE

In compliance of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited, a Report on Corporate Governance, along with a Certificate of the Auditors on Corporate Governance is annexed to this Report marked ANNEXURE - 2.

ACKNOWLEDGMENT

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

For and on behalf of the Board of Directors

Mumbai, Vijay Kumar Jatia

dated 04th May, 2013 Chairman & Managing Director

Registered Office:

Modern Centre, Sane Guruji Marg,

Mahalaxmi,

Mumbai-400011.


Mar 31, 2012

The Directors have pleasure in presenting the Seventy-eight Annual Report of the Company along with the Audited Accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS (Rs in lacs)

Financial Years 2011-12 2010-11

Gross Profit before depreciation 712.41 751.60

Less: Depreciation/Amortization 166.23 158.81

Profit Before Tax 546.18 592.79

Less: Extra Ordinary Expenditure 586.43 -

Provision for Taxation (Including Wealth Tax) - 190.90

Tax provision of earlier year - 0.42

Deferred tax (70.97) 3.35 194.67

Profit after Tax 30.72 398.12

Add: Balance brought forward 3,497.14 3,303.99

Balance available for Appropriation 3,527.86 3,702.11

LESS: APPROPRIATION

Proposed Dividend 150.17 150.17

Tax on distributed profit 24.36 24.94

(Rs in lacs)

Financial Years 2011-12 2010-11

Transferred to General Reserve 2.41 29.86

Balance Carried to Balance Sheet 3,350.92 3,497.14

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 0.40 ps. (20%) per Equity Share of Rs 2/- each. The Dividend for the year amounts to Rs 174.53 Lacs including the Dividend Distribution Tax.

BUSINESS OPERATIONS

The business segments of the Company consist of Real Estate, Business Centre, Trading and Jewellery Training Institute. Real Estate

The Real Estate business is growing with mixed sentiments.

The ground reality in realty remains that despite property prices are above the year 2008 high in Mumbai where the Company has major land bank, the unsold flats rise too. This is because the developers show no sign of lowering prices despite poor sales and the customers have postponed their plans of purchase of houses looking at the high rate of interest. Recent Crisil Report says sales of new homes declined 40% between March, 2011 and February, 2012.

The negation of Vodafone Case like judgement by bringing legislation create doubts in the entrepreneur's mind about continuance of business producing retrogative effect that leads to non-absorption of the commercial spaces and even to the extent of vacation of commercial spaces.

The new changes in the Development Control Regulations imposing premiums on various spaces have stunned the Developers. Moreover, the space of sanctioning the construction plans has created lull in the development market.

The Company has signed MoU with K. Raheja Corp. Private Limited for re-development of some of its land areas. Redevelopment of this land area would unlock sizable capital value to the Company and its stakeholders.

Business Centre:

Central Bombay Infotec Park - Joint Venture arm of Modern India Limited is running Business Centre named Modern Centre. The revenue from the Business Centre has been Rs 429.34 Lacs as compared to Rs 620.66 Lacs in the previous year.

Trading:

Trading activities consist of various commodities including cloth, yarn, sponge iron, steel flat products, paddy, castor etc. During the year, total sale of trading items were at Rs 287.97 Crores as against Rs 126.60 Crore in the corresponding previous year.

SUBSIDIARY COMPANIES

MODERN INTERNATIONAL (ASIA) LIMITED, HONG KONG (MIAL)

MIAL was set up to outsource products from China and other S. E. Asian Countries and is a B2B segment of the company where MIAL services local as well as international companies sourcing raw material/semi finished/finished products and customized products as per requirements. Eight years ago, MIAL started with Textiles, Yarn and Fabric. Fabrics, Yarn and Luggage are still the drivers for improved operations. Economic scenario in international trade is improving and sign of textile revival are available. It is expected that FY 2012-13 will be better compared to FY 2011-12, as textile constitute major component of business in MIAL.

MODERN INDIA PROPERTY DEVELOPERS LIMITED (MIPDL):

Your Company will continue to focus on building scale through sourcing land under the joint development model which allows us to manage capital efficiently. Our primary areas of focus for new business development will be Mumbai. Your Company has initiated to focus on the opportunities available for redevelopment projects across Mumbai. Through strategic partnerships with leading construction firms like K Raheja, your Company is further strengthening its project execution capabilities across regions and thereby endeavouring to ensure on-time delivery and quality

MODERN INDIA FREE TRADE WAREHOUSING PRIVATE LIMITED (MIFTWPL)

The Company had acquired 51% equity shareholding in Modern India Free Trade Warehousing Pvt. Ltd. in 2008. This company has been incorporated to establish Free Trade Warehousing Zone (FTWZ).

The Company was on land acquisition spree. However, with changes in the economic and fiscal conditions the land acquisition was kept on hold. Now, partial return of land acquired took place and a sum of Rs 125 Lacs was received back. The Company is following up matter for recovering of remaining invested amount.

INDIAN INSTITUTE OF JEWELLERY (IIJ) - DIVISION OF THE COMPANY FOR VOCATIONAL TRAINING

The Indian Institute of Jewellery (IIJ) is Asia Pacific's premier autonomous jewellery Institute that offers international standard education in Manufacturing, Design, Gemmology and Business. Backed by Modern India Enterprises, IIJ is a leading professional institute, recognized and accepted by the jewellery Industry for quality training, state-of-the art infrastructure and industry-relevant curriculum.

IIJ has decided to spread its wings and is proud to announce the setting up of its first two franchisee centres at Ahmedabad and Tirupati and the next which is underway at Coimbatore.

Indian Institute of Jewellery has signed an MOU with Kirandevi Saraf Institute of Complete Learning (KSICL) and will offer three of its programs at the KSICL Campus in Malad, Mumbai.

Vinaya: Continuing with its aim to promote the Indian gems & jewellery industry by emphasizing the need for education and professionalization, Vinaya will now conclude its 3rd chapter in 2012-13.

IIJ has also extended its synergetic association with over 100 Preferred Recruitment Partners (PRP) wherein these companies are given first right to interview graduating students. Some of the prestigious names among the list of 100 PRP's are TBZ The Original, TBZ-Nirmal Zaveri Pvt. Ltd., Danabhai Arcade Pvt. Ltd. (Pallazio), Gitanjali Gems Ltd., C. Krishniah Chetty & Sons, Bangalore, Emerald Jewellery, Coimbatore, Raia Jewels, Tikamdas Motiram Jewellers, etc.

ANNUAL ACCOUNTS OF SUBSIDIARY COMPANIES

The Ministry of Corporate Affairs has granted general exemption from attaching a copy of Balance Sheet, Profit & Loss Account, and Report of the Board of Directors and Report of the Auditors of all the three Subsidiary Companies. Pursuant to the said general exemption/permission certain details are published about the Subsidiaries in Annexure to this report. Moreover, pursuant to the Accounting Standard 21 issued by the Institute of Chartered Accountants of India, the Company includes the financial information of the Subsidiaries in its notes to the Annual Accounts. Any member of the Company, desirous of inspecting the same, may inspect and/or request for copy of these documents or any details relating to these documents.

DIRECTORS

A) Shri. Anand Didwania, Director of the Company, retire by rotation and, being eligible, offers himself for re-appointment. Shri. Dilip J. Thakkar, Director of the Company, retire by rotation and, being eligible, offers himself for re-appointment.

B) Permanent Directors:

Taking into consideration stake of the Promoters and with a view to continue to avail services of Shri Vijaykumar Jatia, Chairman & Managing Director, it is felt by the Board to make Directorship as his permanent out of the 1/3 Directors which are not subject to retire by rotation as contemplated in section 255 of the Companies Act, 1956.

Your Directors recommend the resolution for approval

C) Shri Vijaykumar Jatia - Re-appointment as Managing Director

The term of the Managing Directorship of Shri. Vijay Kumar Jatia is expiring on 31st July, 2012. In view of this, the Directors have re-appointed him for a further period of three (3) years with effect from 1st August, 2012 on certain remuneration.

A special resolution for approval of his re-appointment and payment of remuneration is being put before the ensuing 78th AGM.

Your Directors recommend the resolution for approval

CONSOLIDATION OF ACCOUNTS

In pursuance of the mandatory compliance of the Accounting Standard 21, as issued by the Institute of Chartered Accountants of India, the Company has presented Consolidated Financial Statements, for the year under Report, consolidating its Accounts with the Accounts of its Subsidiary Companies, Modern International (Asia) Limited, Modern India Property Developers Ltd. and Modern India Free Trade Warehousing Pvt. Ltd. as also accounts of the Joint Venture - Central Bombay Infotec Park to the extent of the investment made by the Company. A separate Report of the Statutory Auditors, on consolidated Financial Statements also forms part of the same.

DEFERRED TAX

The total net Deferred Tax liabilities as on 31.03.2012 is Rs 44.73 lacs [Previous Year Rs 115.70 lacs], Rs 70.97 Lacs [Previous Year Rs 3.35 Lacs debited] have been credited to Profit & Loss account of the year in respect of the Deferred Tax.

AUDITORS' APPOINTMENT

Members are requested to appoint Auditors and fix their remuneration. The present Auditors, Messrs K.S. Aiyar & Company, Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

FIXED DEPOSITS

During the year under Report, the Company has neither accepted nor renewed any Fixed Deposits, under Section 58A, read with Companies (Acceptance of Deposits) Rules, 1975.

INSURANCE

Adequate insurance cover has been taken for the properties of the Company including Stocks, Tools and Machineries, Furniture and Fixtures, Electronic and Electric Equipments, Vehicles and to cover Directors' and Officers' Liability.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied them consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of its profit for the year ended as on that date;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOINGS.

In compliance with the provisions of Section 217(1 )(e) read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, a statement giving requisite information is given in Annexure 'A' forming part of this Report.

PARTICULARS OF EMPLOYEES

There were no employees receiving remuneration as prescribed under Section 217(2A) of the Companies Act, 1956, during the period under review. Hence, the Companies (Particulars of Employees) Rule, 1975 do not apply to the Company.

MANAGEMENT DISCUSSION AND ANALYSES

As per the requirement of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited, the Management Discussion and Analyses of the events, which have taken place and the conditions prevailed, during the period under review, are elucidated in ANNEXURE - 1 to this Report.

CORPORATE GOVERNANCE

In compliance of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited, a Report on Corporate Governance, along with a Certificate of the Auditors on Corporate Governance is annexed to this Report marked ANNEXURE – 2.

ACKNOWLEDGMENT

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

For and on behalf of the

Board of Directors

Vijay Kumar Jatia

Mumbai, dated 23rd May, 2012 Chairman & Managing Director


Mar 31, 2011

The Directors have pleasure in presenting the Seventy-seventh Annual Report of the Company along with the Audited Accounts for the year ended 31st March, 2011.

FINANCIAL RESULTS

(Rs. in lacs)

Financial Years

2010-11 2009-10

Gross Profit before depreciation 751.60 2092.56

Less: Depreciation 158.81 154.23

Profit Before Tax 592.79 1938.33

Less: Extra Ordinary Expenditure - 142.66

Provision for Taxation (Including Wealth Tax/FBT) 190.90 585.80

Tax provision of earlier year 0.42 (2.51)

Deferred tax 3.35 194.67 (0.70) 582.59

Profit after Tax 398.12 1213.08

Add: Balance brought forward 3303.99 2887.49

Less: Debit balance in the P&L A/c.

of IIJL on Amalgamation - 3303.99 530.49 2357.00

Balance available for Appropriation 3702.11 3570.08

LESS: APPROPRIATION

Proposed Dividend 150.17 150.17

Tax on distributed profit 24.94 24.94

Transferred to General Reserve 29.86 90.98

Balance Carried to Balance Sheet 3497.14 3303.99

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 0.40 ps. (20%) per Equity Share of Rs.2/- each. The Dividend for the year amounts to Rs. 175.11 Lacs including the Dividend Distribution Tax.

BUSINESS OPERATIONS

The business segments of the Company consist of Real Estate, Business Centre, Trading and Jewellery Training Institute.

Real Estate

Despite high inflation, rising interest rate and near absence of institutional funding to the real estate developers, it still remains largest contributor to the GDP of the country. India continues to be one of the fastest growing economies in the global arena.

Indias recovery from the global slowdown and government resolve to contain fiscal deficit is a step in right direction. Reserve Bank of India is using monetary tools judiciously keeping balance between availability of funds and its cost to the industry at large.

The Real Estate Sector in India is growing at double digit and would continue to participate in the growth momentum.

Business Centre:

Central Bombay Infotec Park - Joint Venture arm of Modern India Limited is running Business Centre named Modern Centre. The revenue from the Business Centre has been Rs.620.66 Lacs as compared to Rs.901.92 Lacs in the previous year. The Management, with long term view, resorted to short duration fresh business centre agreements. This has resulted into vacancies.

The Company has signed an MoU with K. Raheja Corp. Private Limited for re-development of some of its land areas. Redevelopment of this land area would unlock sizable capital value to the Company and its stakeholders.

Trading:

Trading activities consist of various commodities including cloth, yarn, sponge iron, steel flat products, etc. During the year, sale of commodities were at Rs.12,662.98 Lacs as against Rs.20,723.73 Lacs in the corresponding previous year.

SUBSIDIARY COMPANIES

MODERN INTERNATIONAL (ASIA) LIMITED, HONG KONG (MIAL)

MIAL was set up to outsource products from China and other S. E. Asian Countries and is a B2B segment of the company where MIAL services local as well as international companies sourcing raw material/semi finished/finished products and customized products as per requirements. Seven years ago, MIAL started with Textiles, Yarn and Fabric but now expanded range of commodities including Tyres, Steel, Chemicals, Paper and Luggage sourcing from China, Indonesia, Thailand and Korea. Economic scenario in international trade is improving and sign of textile revival are available. It is expected that FY 2011-12 will be better compared to FY 2010-11, as textile constitute major component of business in MIAL.

MODERN INDIA PROPERTY DEVELOPERS LIMITED (MIPDL):

MIPDL was to develop Electronic Hardware, Software including IT / ITeS Special Economic Zone at Khopoli, Dist. Raigad in Maharashtra for which it had received recommendation from Government of Maharashtra and formal approval from Board of Approval, Ministry of Commerce and Industry, New Delhi.

In the proposed draft of Direct Tax Code (DTC) and also in the Finance Bill, 2011, various changes in the direct taxes for SEZ were incorporated resulting in radical departure from the tax concessions enshrined in the erstwhile tax laws.

Under the changed tax regime, development of SEZ was not feasible and considering this, it has surrendered formal approval and also disposed of land area during FY 2010-11.

MODERN INDIA FREE TRADE WAREHOUSING PRIVATE LIMITED (MIFTWPL)

The Company had acquired 51% equity shareholding in Modern India Free Trade Warehousing Pvt. Ltd. in 2008. This company has been incorporated to establish Free Trade Warehousing Zone (FTWZ).

Land acquisition process has been kept on hold and efforts are on to settle transactions entered into and completed partially.

INDIAN INSTITUTE OF JEWELLERY (IIJ) – DIVISION OF THE COMPANY FOR VOCATIONAL TRAINING

The Indian Institute of Jewellery (IIJ) is Asia Pacifics premier autonomous jewellery Institute that offers international standard education in Manufacturing, Design, Gemmology and Business. Backed by Modern India Enterprises, IIJ is a leading professional institute, recognized and accepted by the jewellery Industry for quality training, state-of-the art infrastructure and industry-relevant curriculum.

Since the inception of IIJ in 2004, the institute has mainly focused on promoting its short-termed, skill enhancement courses. However, since 2011, as IIJ witnessed substantial growth, it is now keen on setting an intense focus on endorsing its career courses. Though this move may have resulted in a slight dip in the number of registrations for the institute, it has definitely ensured a higher yield year-on-year. Hence, IIJ introduced Indian Institute of Jewellerys Professional Program (IIJP)– a three year comprehensive program designed to give students a step-by-step thorough knowledge of metal art, jewellery design and gemstones with the choice of specialization.

IIJ has also been able to successfully achieve two extremely prestigious collaborations – with the University of Mumbai (locally) and the other with the Gemological Association of Great Britain GEM(A) (internationally).

IIJ continues to have the reputation of being one of the most progressive and forward thinking institution when it comes to education. The proof of this is in the fact that IIJ was chosen as the education partner by the all India Gems and Jewellery Federation to conduct its training programs by way of a road show called Vinaya in 20 cities last year. Vinaya, an educational summit and amongst the countrys largest, has been created with a specific purpose - to professionalize and educate the industry in order to maintain world class standards for all related business operations. Vinayas aim is to promote the Indian gems & jewellery industry by emphasizing the need for education and professionalization.

IIJ has entered into a synergetic association with Jewellery Companies on a Preferred Recruitment Partner (PRP) model wherein these companies are given first right to interview graduating students. Some of the prestigious names among the list of 85 PRPs are Tribhovandas Bhimji Zaveri, TBZ-Nirmal Zaveri Pvt. Ltd., Danabhai Arcade. Pvt. Ltd. (Pallazio), Gitanjali Gems Ltd., etc.

IIJ has been reinforcing its workforce at all levels with new recruitments to undertake and man increased scale of activities.

ANNUAL ACCOUNTS OF SUBSIDIARY COMPANIES

The Ministry of Corporate Affairs has granted general exemption from attaching a copy of Balance Sheet, Profit & Loss Account, and Report of the Board of Directors and Report of the Auditors of all the three Subsidiary Companies. Pursuant to the said general exemption permission certain details are published about the Subsidiaries, in annexure to this report. Moreover, pursuant to the Accounting Standard 21 issued by the Institute of Chartered Accountants of India, the Company includes the financial information of the Subsidiaries in its notes to the Annual Accounts. Any member of the Company, desirous of inspecting the same, may inspect and/or request for copy of these documents or any details relating to these documents.

DIRECTORS

Shri. Rusi N. Sethna, Director of the Company, retire by rotation and, being eligible, offers himself for re-appointment.

Smt. Gauri Jatia, Directress of the Company, retire by rotation and, being eligible, offers herself for re-appointment.

Smt. Vasanti B. Patel resigned during the year from 29th October, 2010.

Dr. S.D. Israni (61), a renowned Advocate by profession, was appointed Additional Director of the Company w.e.f. 18th January, 2011. He is holding the directorship upto the commencement of the ensuing 77th AGM. However, a notice has been received from a member of the Company proposing his candidature as a Rotational Director at the ensuing AGM.

CORPORATE EVENTS

One of the Subsidiary Companies, Indian Institute of Jewellery Limited, got amalgamated with the Company vide the Honble Bombay High Courts Order dated 7th May, 2010 sanctioning the Scheme of Amalgamation approved by the Members of the Company on 8th January, 2010, in the Court Convened Meeting.

Postal ballot procedure was undertaken to obtain consent of the shareholders of the Company for disposal/redevelopment of its land and properties situated in South Mumbai, pursuing new object of publication business and adopting explicit object for real estate development activities and developing real estate on its own. The results were declared on 24th June, 2010 that approved all the resolutions.

The Company has entered into Memorandum of Intended Development with K. Raheja Corp. Pvt. Ltd. on 24th May, 2010 for development/redevelopment of some of its properties situate in the South Mumbai.

CONSOLIDATION OF ACCOUNTS

In pursuance of the mandatory compliance of the Accounting Standard 21, as issued by the Institute of Chartered Accountants of India, the Company has presented Consolidated Financial Statements, for the year under Report, consolidating its Accounts with the Accounts of its Subsidiary Companies, Modern International (Asia) Limited, Modern India Property Developers Ltd. and Modern India Free Trade Warehousing Pvt. Ltd. as also accounts of the Joint Venture – Central Bombay Infotec Park to the extent of the investment made by the Company. A separate Report of the Statutory Auditors, on consolidated Financial Statements also forms part of the same.

DEFERRED TAX

The total net Deferred Tax liabilities as on 31.03.2011 is Rs.115.70 lacs [Previous Year Rs.112.35 lacs]. Rs.3.35 lacs [Previous Year Rs. 0.70 lacs credited] have been debited to Profit & Loss account of the year in respect of the Deferred Tax.

AUDITORS APPOINTMENT

Members are requested to appoint Auditors and fix their remuneration. The present Auditors, Messrs K.S. Aiyar & Company, Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

AUDITORS REPORT

The Auditors Report is attached with the audited statements. There are observations made by the Auditors that have been explained below.

Auditors Observations:

The Municipal Corporation of Greater Mumbai (MCGM) has raised demands for property taxes on the company aggregating to Rs. 805.63 lacs which is outstanding till 31st March, 2011. No provision has been made in the companys books against the demand as the same is under dispute. (Also Refer Note No. 2 (iv) of Schedule 18 Notes to Accounts)

The Managements reply to the above observation is as under:

The Company has disputed the above demands by filing complaints with the appropriate authority and provision, if any, will be considered on disposal of the complaints.

FIXED DEPOSITS

During the year under Report, the Company has neither accepted nor renewed any Fixed Deposits, under Section 58A, read with Companies (Acceptance of Deposits) Rules, 1975.

INSURANCE

Adequate insurance cover has been taken for the properties of the Company including Stocks, Tools and Machineries, Furniture and Fixtures, Electronic and Electric Equipments, Vehicles and to cover Directors and Officers Liability.

In view of 26/11 type terror attack in Mumbai, security in and around the Modern Centre has been tightened by installation of surveillance gadgets and beefing up the security in and around Modern Centre.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied them consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2011 and of its profit for the year ended as on that date;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOINGS.

In compliance with the provisions of Section 217(1)(e) read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, a statement giving requisite information is given in Annexure ‘A forming part of this Report.

PARTICULARS OF EMPLOYEES

Information as per Section 217(2A) of the Companies Act, 1956 read with The Companies (Particulars of Employees) Rules, 1975 is given in Annexure ‘B forming part of this Report.

MANAGEMENT DISCUSSION AND ANALYSES

As per the requirement of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited, the Management Discussion and Analyses of the events, which have taken place and the conditions prevailed, during the period under review, are elucidated in ANNEXURE - 1 to this Report.

CORPORATE GOVERNANCE

In compliance of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited, a Report on Corporate Governance, along with a Certificate of the Auditors on Corporate Governance is annexed to this Report marked ANNEXURE - 2.

ACKNOWLEDGMENT

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

For and on behalf of the Board of Directors

Vijay Kumar Jatia Mumbai, dated 15th June, 2011 Chairman & Managing Director

Registered Office:

Modern Centre, Sane Guruji Marg, Mahalaxmi, Mumbai-400 011


Mar 31, 2010

The Directors have pleasure in presenting the Seventy-sixth Annual Report of the Company along with the Audited Accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS

(Rupees in lacs) Financial Years 2009-10 2008-09

Gross Profit before depreciation 1949.90 987.34 Less: Depreciation 154.23 101.27 Profit Before Tax 1795.67 886.07 Less: Extra Ordinary Expenditure

Provision for Taxation (Including Wealth Tax/FBT) 585.80 221.64

Tax provision of earlier year (2.51) 16.05

Deferred tax (0.70) 582.59 14.03 251.72 Profit after Tax 1213.08 634.35

Add: Balance brought forward 2887.49 2520.34

Less: Debit balancejn the P&L A/c.

of IIJL on Amalgamation 530.49

Less: Amount transferred to Capital Reserve 0 2887.49 0 2520.34

Balance available for Appropriation 3570.08 3154.69

LESS: APPROPRIATION

Proposed Dividend 150.17 187.71 Tax on distributed profit 24.94 31.90 Transferred to General Reserve 90.98 47.58

Balance Carried to Balance Sheet 3303.99 2887.49

DIVIDEND

Your Directors are pleased to recommend a dividend of Re.0.40 ps. (20%) per Equity Share of Rs.2/- each. The Dividend for the year amounts to Rs.175.11 Lacs including the Dividend Distribution Tax.

BUSINESS OPERATIONS

The business segments of the Company consist of Real Estate, Business Centre and Trading.

Real Estate

Despite the global economic decline in fiscal 2008, India continues to be one of the fastest growing countries in the world and is showing sign of recovery following the global financial downturn.

Indias ability to recover from the global slowdown and its own domestic liquidity crunch has been driven by the Countrys large domestic savings and corporate retained earnings which have been used to finance the investments. Moreover, the fiscal policy, primarily, in the form of reduced interest rates and Government intervention, has helped maintain private demand, liquidity and short-term rates, thereby reducing the risk of loan losses.

The Real Estate Sector in India has exhibited a trend towards greater organization and transparency by various regulatory reforms such as repeal of Urban Land (Ceiling and Regulation) Act in most of the States, modification in the Rent Control Act to provide greater protection to homeowners wishing to rent out their properties, rationalization of property taxes in a numbers of states and the computerization of land records.

With the spurt in the demand in real estate sector and especially in Mumbai, the Company has decided to embark on real estate development activities on its South Mumbai situated land bank in priority over its other SEZ and FTWZ projects. In this direction, consent of the Members of the Company has been sought by means of postal ballot. As a substantial step, an understanding has been arrived at with K. Raheja Corp Pvt. Ltd. for redevelopment of some of the properties of the Company situated in the South Mumbai.

Business Centre:

Central Bombay Infotec Park - Joint Venture arm of Modern India Limited is running Business Centre named Modern Centre. The revenue from this segment has been Rs. 901.92 Lacs as compared to Rs. 1239.91 lacs in the previous year. Considering flurry of real estate development happening between Mahalaxmi and Elphinstone Road, the Management was considering various options one of which was redevelopment of the Modern Centre. Accordingly, long term lease rentals agreements were not preferred and this is the main reason for current vacancy and resultant lower revenue.

Trading:

Trading activities consist of cloth, yarn, software/ Revo Milling machine, sponge iron, etc. Turnover, in this segment, has grown from Rs. 19,342.46 lacs to Rs. 20,717.89 registering a 7% growth.

SUBSIDIARY COMPANIES

MODERN INTERNATIONAL (ASIA) LIMITED, HONG KONG (MIAL)

MIAL was set up to outsource products from China and other S. E. Asian Countries and is a B2B segment of the company where MIAL services local as well as international companies sourcing raw material/semi finished/finished products and customized products as per requirements. Seven years ago, MIAL started with Textiles, Yarn and Fabric but now expanded range of commodities including Tyres, Steel, Chemicals, Paper, and Luggage sourcing from China, Indonesia, Thailand and Korea. Economic scenario in international trade is improving and sign of textile revival are available. It is expected that FY 2010-11 to be better compared to FY 2009-10 as textile constitute major component of Business in MIAL.

MODERN INDIA PROPERTY DEVELOPERS LIMITED (MIPDL):

MIPDL is developing Electronic Hardware, Software including IT / ITeS Special Economic Zone at Khopoli, Dist. Raigad in Maharashtra. Company has received recommendation from Government of Maharashtra and formal approval from Board of Approval, Ministry of Commerce and Industry, New Delhi and has filed application for notification of the SEZ which is awaited.

In the Finance bill 2010, no further extension to STPI [Software Technology Park of India] has been envisaged. It was further clarified by spokesperson from the finance ministry that tax benefits to STPI will go after sunset period gets over. Hence, SEZ will be the only avenue available to the IT/ITeS exporters to remain tax neutral.

Current recruitment drive of IT industry, robust growth guidance for FY 2010-11 and increasing pie of Indian IT industry in global market are all pointer to increased space requirement in time to come.

We have sought views from IL&FS IDC Limited, advisor to SEZ development of the Company as well as other agencies involved. It has been informed that in next couple of quarters, scenario may get clearer and at appropriate time, after having reasonable LOIs or anchor tenant, this project can be revived, albeit, in phases.

We, at the same time, also looking into alternate land use or outright sale of the land holding. We have been given to understand that simultaneous to revival of real estate market, other opportunities are surfacing and a final decision in this connection will be taken considering all the facets of the matter.

INDIAN INSTITUTE OF JEWELLERY LIMITED (IIJL)

IIJL had set up a premier autonomous jewellery institute, Indian Institute of Jewellery (IIJ), in the Asia Pacific region, which offers international standard education in Jewellery Manufacturing, Designing and Gemology etc. IIJ is a leading professional institute, recognized and accepted by the jewellery industry for quality training, state of the art infrastructure and industry relevant curriculum.

During the year, IIJ commenced post graduation diploma course in collaboration with Mumbai University. Also it has enrolled students under Vocational Training Programme [VTP] as envisaged by the Ministry of Labour and Employment through Directorate General of Employment and Training.

Out of Batches of VTP modules, undergoing particular course, may come for other vocational training program which would result in more students in other stream of courses, offered by IIJ.

IIJ has started an initiative named VINAYA in collaboration with All India Gems & Jewellery Trade Federation whereunder summits are organized in 20 cities of India to create awareness of opportunities in gems and jewellery segment.

As per the Scheme of Amalgamation sanctioned by the Honble Bombay High Court on 7th May, 2010, IIJL got amalgamated with the Company as on 1a July, 2009. As such, whole of the undertaking of IIJL has been taken over by the Company. IIJL has been dissolved without being would up on 3,a June, 2010, being Effective Date. Now, IIJ functions as a Division of Modern India Limited. Accordingly, tinancials of this undertaking has been merged with the tinancials of the Company.

MODERN INDIA FREE TRADE WAREHOUSING PRIVATE LIMITED (MIFTWPL)

The Company acquired 51% equity shareholding in Modern India Free Trade Warehousing Pvt. Ltd. on 4"1 July, 2008. This company has been incorporated to establish Free Trade Warehousing Zone (FTWZ).

Though international trade is returning to normalcy, the scenario is still full of uncertainties, therefore, at present, no further outlay is earmarked for the project. No further acquisition of land has been undertaken. As such, status quo is maintained.

ANNUAL ACCOUNTS OF SUBSIDIARY COMPANIES

The Ministry of Corporate Affairs has granted exemption from attaching a copy of Balance Sheet, Profit & Loss Account, and Report of the Board of Directors and Report of the Auditors of all the four Subsidiary Companies. However, as per the said permission certain details are published about the Subsidiaries. Moreover, pursuant to the Accounting Standard 21 issued by The Institute of Chartered Accountants of India, the Company includes the financial information of the Subsidiaries in its notes to the Annual Accounts. Any member of the Company, desirous of inspecting the same, may inspect and/or request for copy of these documents or any details relating to these documents.

DIRECTORS

Shri. Rajas Doshi, Director of the Company, retire by rotation and, being eligible, offers himself for re-appointment.

Shri. Pradip Kumar Bubna Director of the Company, retire by rotation and, being eligible, offers himself for re-appointment.

CORPORATE EVENTS

One of the Subsidiary Companies, Indian Institute of Jewellery Limited, got amalgamated with the Company vide the Honble Bombay High Courts Order dated 7th May, 2010 sanctioning the Scheme of Amalgamation approved by the Members of the Company on 8,h January, 2010, in the Court Convened Meeting.

Postal ballot procedure is undertaken to obtain consent of the shareholders of the Company for disposal/redevelopment of its land and properties situate in South Mumbai, pursuing new object of publication business and adopting explicit object for real estate development activities and developing real estate on its own. The process is going on and the results will be declared on June 23, 2010 at the Registered Office of the Company.

The Company has entered into Memorandum of Intended Development with K. Raheja Corp. Pvt. Ltd. on 24" May, 2010 for development/redevelopment of some of its properties situate in the South Mumbai.

CONSOLIDATION OF ACCOUNTS

In pursuance of the mandatory compliance of the Accounting Standard 21, as issued by The Institute of Chartered Accountants of India, the Company has presented Consolidated Financial Statements, for the year under Report, consolidating its Accounts with the Accounts of its Subsidiary Companies, Modern International (Asia) Limited, Modern India Property Developers Ltd. and Modern India Free Trade Warehousing Pvt. Ltd. as also accounts of the Joint Venture - Central Bombay Infotec Park to the extent of the investment made by the Company. A separate Report of the Statutory Auditors, on consolidated Financial Statements also forms part of the same.

DEFERRED TAX

The total net Deferred Tax liabilities as on 31.03.2010 is Rs. 112.35 lacs [Previous Year Rs. (113.05) lacs]. Rs.0.70 lac [Previous Year Rs. (14.03) lacs debited] have been credited to Profit & Loss account of the year in respect of the Deferred Tax.

AUDITORS APPOINTMENT

Members are requested to appoint Auditors and fix their remuneration. The present Auditors, Messrs K.S. Aiyar & Company, Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

AUDITORS REPORT

The Auditors Report is attached with the audited statements. There are observations made by the Auditors that have been explained below.

Auditors Observations:

"Attention is drawn to Note No. 2 - (v) & (vi) of Notes to Accounts wherein the demands raised by the Municipal Corporation of Greater Mumbai (MCGM) for property taxes & Penalty for regularization of change of user amounting to Rs. 550.42 lacs and Rs. 598.88 lacs respectively has not been provided in the accounts as these have been disputed by the Company. In view of the uncertainty involved in terms of final settlement of the demands, the impact on the financial statements cannot be quantified."

The Managements reply to the above observation is as under:

The Company has disputed the property tax demands and has not accepted the another demand of Rs. 598.88 lacs. Provision, if any, will be considered on disposal of the complaints and redressal.

FIXED DEPOSITS

During the year under Report, the Company has neither accepted nor renewed any Fixed Deposits, under Section 58A, read with Companies (Acceptance of Deposits) Rules, 1975.

INSURANCE

Adequate insurance cover has been taken for the properties of the Company including Stocks, Tools and Machineries, Furniture and Fixtures, Electronic and Electric Equipments, Vehicles and to cover Directors and Officers Liability.

In view of 26/11 type terror attack in Mumbai, security in and around the Modern Centre has been tightened by installation of surveillance gadgets and beefing up the security in and around Modem Centre.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied them consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of its profit for the year ended as on that date;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOINGS.

In compliance with the provisions of Section 217(1)(e) read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, a statement giving requisite information is given in Annexure A forming part of this Report.

PARTICULARS OF EMPLOYEES

Information as per Section 217(2A) of the Companies Act, 1956 read with The Companies (Particulars of Employees) Rules, 1975 is given in Annexure B forming part of this Report.

MANAGEMENT DISCUSSION AND ANALYSES

As per the requirement of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited, the Management Discussion and Analyses of the events, which have taken place and the conditions prevailed, during the period under review, are elucidated in ANNEXURE - 1 to this Report.

CORPORATE GOVERNANCE

In compliance of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited, a Report on Corporate Governance, along with a Certificate of the Auditors on Corporate Governance is annexed to this Report marked ANNEXURE -2.

ACKNOWLEDGMENT

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

For and on behalf of the Board of Directors

Vijay Kumar Jatia Mumbai, dated 18th June, 2010 Chairman & Managing Director

Registered Office:

Modern Centre, Sane Guruji Marg, Mahalaxmi, Mumbai-400 011.

Find IFSC