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Notes to Accounts of Modern India Ltd.

Mar 31, 2014

Note No: 1 Details of dues to Micro and Small Enterprises as required under section 22 of MSMED Act, 2006.

There are no Micro and Small Enterprises to whom the Company owes dues, which are outstanding for more than 30 days as at the Balance Sheet date. Further, the Company has not paid any interest to any Micro and Small Enterprise during the accounting year, nor is any interest payable to any Micro and Small Enterprise as at the Balance Sheet Date. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company and relied upon by the Auditors.

Note No: 2 The Company has a long term investment of Rs. 1500.00 Lacs in Equity Shares of Modern India Property Developers Limited (MIPDL), a Wholly Owned Subsidiary of the Company. As per Audited Account of MIPDL, there is Accumulated loss of Rs. 603.49 Lacs (Previous Year Rs. 648.95 Lacs) as at March 31, 2014. During the year MIPDL has made Profit after tax of Rs. 45.46 Lacs. However in view of the Long Term and strategic nature of investment, plans for new business initiatives and other ensuing business activity, the management is of the opinion that diminution in value of investment is temporary in nature and hence no provision is considered necessary in respect of the same.

Note No: 3 The Company has filed a claim on 07.05.2010 in respect of monthly outgoing charges on unsold flats paid to Belvedere Court Condominium ( An Association of Residential Apartment owners) wherein it owns flats. In view of the uncertainties involved for the settlement of claim, the same will be considered as income only on settlement of pending issues.

Note No: 4 Exceptional item - represents difference between (i) Excess Property Taxes paid / provided for over Liability as per revised bills amounting to Rs.. 2,69,81,622/- and (ii) provision of Rs.. 1,40,00,000/- made to the extent of diminution in value of security against which Inter Corporate Loan was given.

Note No: 5 Dividend consists of dividend on (i) Current Investments Rs. 9,45,432/- and (ii) Non Current Investments Rs. 7,61,560/-.

Note No: 6 An amount of Rs.. 1,364.59 Lacs (Net of Rs.. 88.04 Lacs recovered till date) is outstanding as receivable in respect of Commodities Trading Transactions done on National Spot Exchange Limited (NSEL). Economic Offence Wing (EOW) Mumbai has registered FIR and investigating the matter in co-ordination with various investigating agencies of Central & State Government. The Company has also filed a Representative Suit in the Hon''ble Bombay High Court for recovery of the same. In view of the uncertainties involved in making any reliable estimate of amount recoverable provision if any, will be considered at an appropriate time on the basis of resultant outcome till then it is shown as good.

Note No: 7 During the year some of the Land and Buildings thereon as also Work - in - Progress relating thereto having book value of Rs. 6,64,26,035/- have been converted into Stock-in-Trade of Real Estate Business at Book Value i.e. Rs. 6,64,26,035/-. Fair Market Value of the same as determined by a Government Registered Valuer V. K. Lad as per his Valuation Reports dated 10th August, 2013 and 24th December, 2013 amounts to Rs. 6,53,56,20,805/-.

Note No: 8 Managing Director''s Remuneration:

During the financial year 2012-13 an application in Form No. 25A was made to the Central Government for approval of reappointment and payment of minimum remuneration to the Managing Director w.e.f. 1st August, 2012 not exceeding Rs. 127.20 Lacs per annum (including Retirement benefits) duly approved by the Shareholders of the Company in the Annual General meeting held on 8th August, 2012. Approval of the Central Government has been received for payment of remuneration not exceeding Rs. 84.00 Lacs.

Note No: 45 Disclosures as required by the Accounting Standard -18 on "Related Party Disclosure" are given below:

i) Related Parties and Relationships:

A) Where Control Exists: Subsidiaries

(i) Modern India Property Developers Limited.

(ii) Modern International (Asia) Ltd.

(iii) Modern India Free Trade Warehousing Private Limited.

(iv) Verifacts Services Pvt. Ltd. W.e.f. 04.02.2014

B) Significant Influence :

(i) Shree Rani Sati Investment & Finance Ltd.

(ii) F. Pudumjee Investment Co. Ltd.

(iii) Modern Derivatives & Commodities Pvt. Ltd.

(iv) Alcyone Trading Co. Pvt. Ltd.

(v) Camellia Mercantile Pvt. Ltd.

(vi) Candescent Traders Pvt. Ltd.

(vii) Ignatutius trading Co. Pvt. Ltd.

(viii) Sarat Leasing & Finance Ltd.

(ix) Vedant Mercantile Pvt. Ltd.

C) Key Management Personnel & Relatives :

(i) Mr. V. K. Jatia - Chairman & Managing Director.

(ii) Mrs. Gauri Jatia - Director.

(iii) Mr. Vedant Jatia - Executive

(iv) Mr. Mudit Jatia - Executive

(v) Mr. Sidhant Jatia - Executive

Note: In respect of above parties, there is no provision for doubtful debts as on March 31, 2014 and no amount has been written off or written back during the year in respect of debts due from / to them.

Note No: 9 Figures of the previous year have been regrouped and rearranged wherever necessary.


Mar 31, 2013

Note No: 1 Details of dues to Micro and Small Enterprises as required under section 22 of MSMED Act, 2006.

There is no Micro and Small Enterprise to whom the Company owes dues, which are outstanding for more than 30 days as at the Balance Sheet date. Further, the Company has not paid any interest to any Micro and Small Enterprise during the accounting year, nor is any interest payable to any Micro and Small Enterprise as at the Balance Sheet Date. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company and relied by the Auditors.

Note No: 2 The Company has a long term investment of Rs. 1500.00 Lacs in Equity Shares of Modern India Property Developers Limited (MIPDL), a Wholly Owned Subsidiary of the Company. As per Audited Account of MIPDL, there is Accumulated loss of Rs. 648.94 Lacs (Previous Year Rs. 696.69 Lacs) as at March 31, 2013. During the year MIPDL has made Profit after tax of Rs. 47.75 Lacs. However in view of the Long Term and strategic nature of investment, plans for new business initiatives and other ensuing business activity, the management is of the opinion that diminution in value of investment is temporary in nature and hence no provision is considered necessary in respect of the same.

Note No: 3 The Company has filed a claim on 07.05.2010 in respect of monthly outgoing charges on unsold flats paid to Belvedere Court Condominium ( An Association of Residential Apartment owners) wherein it owns flats. In view of the uncertainties involved for the settlement of claim, the same will be considered as income only on settlement of pending issues.

Note No: 4 Exceptional item - represents payment of demand of Rs.. 5,20,42,100/- made during the year by Municipal Corporation of Greater Mumbai (MCGM) towards regularization charges for change of user etc. after reducing from it Rs.. 3,57,52,677/- in respect of provision made for property tax in the previous year. This reduction has arisen as a result of revised method of charging property tax on the basis of Capital Value Method.

Note No: 5 Dividend consists of dividend on (i) Current Investments Rs. 1,15,811/- and (ii) Non Current Investments Rs. 7,57,823/-.

During the year an application in Form No. 25A has been made to the Central Government for approval of reappointment and payment of minimum remuneration to Managing Director w.e.f. 1st August, 2012 not exceeding Rs. 127.20 Lacs per annum (including Retirement benefits) duly approved by the Shareholders of the Company in the Annual General meeting held on 8th August, 2012. Pending approval of the Central Government, provision has been made in respect of additional amount of remuneration which will become payable pursuant to approval of Central Government and is in excess of of limits prescribed in Schedule XIII of the Companies Act, 1956 by Rs..17.13 Lacs.

Previous Year''s Figures are given in Italics

Notes:

(i) The Company has identified Business Segments as primary segments. The Reportable Business Segments are: a) Business Center - comprising of activities connected with running of Business Centre, b) Trading - Consists of Trading in all Products and Commodities and c) Real Estate - comprising of Property Development and carrying on business or activities in real estate business of all types.

(ii) Items of Revenue, Income and Expenses, Assets and Liabilities (including Borrowings, Provision for Taxation and Deferred Tax) which are not directly attributable / identifiable / allocable to business segments are shown as Unallocated / Corporate.

Note No: 6 Disclosures as required by the Accounting Standard -18 on "Related Party Disclosure" are given below:

i) Related Parties and Relationships:

A) Where Control Exists: Subsidiaries

(i) Modern India Property Developers Limited.

(ii) Modern International (Asia) Ltd.

(iii) Modern India Free Trade Warehousing Private Limited.

B) Significant Influence :

(i) Shree Rani Sati Investment & Finance Ltd.

(ii) F. Pudumjee Investment Co. Ltd.

(iii) Modern Derivatives & Commodities Pvt. Ltd.

(iv) Alcyone Trading Co. Pvt. Ltd.

(v) Camellia Mercantile Pvt. Ltd.

(vi) Candescent Traders Pvt. Ltd.

(vii) Ignatius Trading Co. Pvt. Ltd.

(viii) Sarat Leasing & Finance Ltd.

(ix) Vedant Mercantile Pvt. Ltd.

C) Key Management Personnel & Relatives :

(i) Mr. V. K. Jatia - Chairman & Managing Director (ii) Mrs. Gauri Jatia - Director (iii) Mr. Vedant Jatia - Executive (iv) Mr. Mudit Jatia - Executive (v) Mr. Sidhant Jatia - Executive

D) Joint Venture : Contractual Arrangement

Central Bombay Infotec Park

Co-Venturers - Eclat Developers Private Limited Note: In respect of above parties, there is no provision for doubtful debts as on March 31, 2013 and no amount has been written off or written back during the year in respect of debts due from / to them.

Note No: 7 Financial Reporting of interest in Joint Venture as required by AS - 27 is given below:

A) Details pertaining to Jointly Controlled Entity:

i) Name Central Bombay Infotec Park,

ii) Address Modern Centre, Sane Guruji Marg,

Mahalaxmi, Mumbai - 400 011. iii) Country of Incorporation or residence India

iv) Proportion of ownership of the Company 90%

Note No: 8 Figures of the previous year have been regrouped and rearranged wherever necessary.


Mar 31, 2012

(a) Terms / Rights attached to Equity Shares:

The Company has only one class of Equity Shares having a par value of Rs 2/- per Share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees and every equity share is entitled to the same rate of dividend.

(a) Term Loan from the Bank was taken during the financial year 2009-10 and is repayable in 120 equal monthly installments along with interest from the date of loan. The loan is secured by assignment of rental receivable and also by mortgage of (i) part of Land and Building at Mahalaxmi, Mumbai and (ii) Residential Flats. As at the Balance Sheet date 74 installments of Rs 33,36,621/- each (including interest) are due. The loan carries interest in the range of 12% to 13%.

(b) Car finance Loans from Banks were taken during the financial years 2009-10, 2010-11 and 2011-12 and are repayable in 36 monthly installments with interest. These loans are secured by hypothecation of specific Vehicles acquired.

Note No: 1 Details of dues to Micro and Small Enterprises as required under section 22 of MSMED Act, 2006.

There is no Micro and Small Enterprise to whom the Company owes dues, which are outstanding for more than 30 days as at the Balance Sheet date. Further, the Company has not paid any interest to any Micro and Small Enterprise during the accounting year, nor is any interest payable to any Micro and Small Enterprise as at the Balance Sheet Date. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company and relied by the Auditors.

As at March 31, As at March 31, Rs Rs

Note No: 01 Contingent Liabilities:

(a) Corporate Guarantee given by the Company to Indian Overseas Bank, Hong Kong on behalf of Wholly Owned Subsidiary M/s. Modern International (Asia) Limited. 30,66,12,540 26,81,41,536

(b) Counter Guarantee given by the Company to the Chairman & Managing Director in respect of Key Man Insurance Policy assigned by him in favour of the Bank for Credit Facility taken by the Company. 5,40,00,000 5,40,00,000

(c) Other money for which the company is contingently liable Property Tax Demand raised by Municipal Corporation of Greater Mumbai (MCGM). - 8,05,62,604

The Company had disputed the property Tax Demand raised by Municipal Corporation of Greater Mumbai (MCGM) and had filed a complaint under Section 163(2) of The Mumbai Municipal Corporation Act, 1888 since the increase in proposed Rateable Value was illegal and improper. As a result the basis of calculation of Rateable Value has been revised and the demand has been reduced to Rs 5,86,42,802/- for which Provision has been made by debiting the Profit and Loss Account of the year under the heading Exceptional Items. The Company has filed an appeal under section 217 of MMC Act, 1888 in Court of Small Causes, Mumbai against the revised basis of calculation of Rateable Value and sought for further reduction in its Rateable Value.

Note No: 02

The Company has a long term investment of Rs 1500.00 Lacs in the Shares of Modem India Property Developers Limited (MIPDL), a Wholly Owned Subsidiary of the Company. As per Audited Account of MIPDL, there is Accumulated loss of Rs 696.69 Lacs (Previous Year Rs 739.95 Lacs) as at March 31, 2012 (Net of current years Profit after tax of Rs 45.39 Lacs). However in view of the Long Term and strategic nature of investment, plans for new business initiatives and other ensuing business activity, the management is of the opinion that diminuitition in value of investment is temporary in nature and hence no provision is considered necessary in respect of the same.

Note No: 03

The Company has filed a claim on 07.05.2010 in respect of monthly outgoing charges on unsold flats paid to Belvedere Court Condominium ( An Association of Residential Apartment owners) wherein it owns flats. In view of the uncertainties involved for the settlement of claim, the same will be considered as income only on settlement of pending issues.

Note No: 04

This amount pertains to flat (of Real Estate Business) transferred during the year from Stock-in-Trade to Capital Work-in-Progress.

Note No: 05

Dividend consists of dividend on (i) Current Investments Rs 2,12,306/- and (ii) Non Current Investments Rs 3,83,636/-.

Previous Year's Figures are given in Italics

Notes:

(i) The Company has identified Business Segments as primary segments. The Reportable Business Segments are: a) Business Center - comprising of activities connected with running of Business Centre, b) Vocational Training Institute - comprising of activities connected with Training for all the facets of Jewellery Industry, Exhibitions and Gem Testing Laboratory etc. c) Trading - Consists of Trading in all Products and Commodities and d) Real Estate - comprising of Property Development and carrying on business or activities in real estate business of all types.

(ii) Items of Revenue, Income and Expenses, Assets and Liabilities (including Borrowings, Provision for Taxation and Deferred Tax) which are not directly attributable / identifiable / allocable to business segments are shown as Unallocated / Corporate.

Note No: 06 Disclosures as required by the Accounting Standard -18 on "Related Party Disclosure" are given below:

i) Related Parties and Relationships:

A) Where Control Exists: Subsidiaries

(i) Modern India Property Developers Limited.

(ii) Modern International (Asia) Ltd.

(iii) Modern India Free Trade Warehousing Private Limited.

B) Significant Influence :

(i) Shree Rani Sati Investment & Finance Ltd.

(ii) F. Pudumjee Investment Co. Ltd.

(iii) Modern Derivatives & Commodities Pvt. Ltd.

(iv) Alcyone Trading Co. Pvt. Ltd.

(v) Camellia Mercantile Pvt. Ltd.

(vi) Candescent Traders Pvt. Ltd.

(vii) Ignatius Trading Co. Pvt. Ltd.

(viii) Sarat Leasing & Finance Ltd.

(ix) Vedant Mercantile Pvt. Ltd.

C) Key Management Personnel & Relatives :

(i) Mr. V. K. Jatia - Chairman & Managing Director.

(ii) Mrs. Gauri Jatia - Director.

(iii) Mr. Vedant Jatia - Executive

(iv) Mr. Mudit Jatia - Executive

(v) Mr. Sidhant Jatia

D) Joint Venture : Contractual Arrangement

Central Bombay Infotec Park.

Co-Venturers - Eclat Developers Private Limited

Note No: 06 Figures of the previous year have been regrouped and rearranged wherever necessary.


Mar 31, 2010

Current Year (Rs) Previous Year(Rs)

(i) Claims against the Company not Acknowledged as debts. 304,351 250,000

(ii) Estimated amount of Contracts remaining to be executed on - 1,987,584

Capital Account and not provided for (Net of advances given) (iii) Corporate Guarantees given by the Company to 451,023,300 509,597,400

Indian Overseas Bank, Hong Kong on behalf of Wholly Owned Subsidiary M/s. Modern International (Asia) Limited.

(iv) Sales Tax Liability in respect ol which Appeals are pending. 1,648,781 1,648,781

(v) Property Tax Demand raised by Municipal Corporation of 55,041,736 27,520,868

Greater Mumbai (MCGM).

The Company has disputed and has filed a complaint under Section 163(2) of The Mumbai Municipal Corporation Act, 1888 since the increase in proposed Ratable Value is illegal and improper.

On the basis of advise received, Management does not envisage any material liability to arise. (vi) Demand raised by Municipal Corporation of Greater Mumbai 59,888,300 (MCGM) in respect of Premium for open space deficiency and penalty for regularization of change of user in the existing premises not accepted by the Company. The Company has asked for details of working of the same. On receipt of such details, the Company will contest this demand with appropriate authority.

2 Working Capital borrowings from Banks and Acceptances are secured by hypothecation of stocks of trading goods, book debts and assignment of Key Man Insurance Policy and are also secured by mortgage of part of Land and Building at Mahalaxmi, Mumbai. Car Finance Loans from Bank are secured by hypothecation of specific vehicles acquired. Term Loans from Banks are secured by assignment of rental receivable and also by mortgage of (i) part of Land and Building at Mahalaxmi, Mumbai and (ii) Residential Flats.

3 There is no Micro and Small Enterprise to whom the Company owes dues, which are outstanding for more than 30 days as at the Balance Sheet date. Further, the Company has not paid any interest to any Micro and Small Enterprise during the accounting year, nor is any interest payable to any Micro and Small Enterprise on the Balance Sheet Date. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

4 Interest consists of interest on loans, deposits and interest on Income Tax Refund, etc.

5 The balances of Sundry Debtors, Loans and Advances and Sundry Creditors are subject to confirmations from some of the parties.

6 Kamataka Industrial Area Development Board which had originally allotted 20 acres of land for setting up an industrial unit at Raipur Industrial Area, Dharvad subsequently restricted the same to 6 acres. Against this, the Company had filed a Writ Petition in Karnataka High Court for the full allotment as per the Original Allotment which has since been dismissed by the order of single judge bench. The Company has filed an appeal before the full bench to set aside this order which is pending for disposal. In the meanwhile, the Company has entered into a Memorandum of Understanding with a party to do all the required formalities in connection with full allotment of the land and eventual disposal of the said land.

7 Amalgamation of Indian Institute of Jewellery Limited with the Company:

(a) Pursuant to the Scheme of Amalgamation ("the Scheme") of the erstwhile Indian Institute of Jewellery Limited (IIJL), the Wholly Owned Subsidiary of the Company with the Company sanctioned by the Honble Bombay High Court vide its Order dated 7th May, 2010, the Undertaking including all the assets and liabilities, duties and obligations of the erstwhile IIJL were transferred to and vested in the Company with effect from 1st July, 2009 (the appointed date). The scheme became effective on 3rd June , 2010. The Scheme has accordingly, been given effect to in these financial statements. Erstwhile IIJL was engaged in Vocational Training in the areas of Jewellery industry.

(b) The Amalgamation has been accounted for under the pooling of interest method as prescribed by Accounting Standard - 14 (AS-14) issued by The Institute of Chartered Accountants of India. Accordingly, the Assets and Liabilities of erstwhile IIJL as at 1st July, 2009 have been taken over at their respective book values and debit balance of Profit & Loss Account of erstwhile IIJL as on 01.07.2009 has been reduced from Credit balance of Profit and Loss Account of the Company.

(c) As provided in the Scheme of Amalgamation referred to in (a) above, 30,00,000 Equity Shares of Rs. 10/- Each of erstwhile IIJL held by the Company stand cancelled and inter corporate loans or balances between erstwhile IIJL and the Company have come to an end. Further, Authorized Share Capital of the Company stands increased by Rs. 5,00,00,000/-.

(d) Since erstwhile IIJL has a carried forward Loss of Rs. 5,30,49,987/- as at 30th June, 2009, therefore Goodwill standing in its books at Rs. 1,42,65,834/- has been written off by debiting the Profit and Loss Account.

(e) In view of the aforesaid amalgamation with effect from 1st July, 2009, the figures for the current year are not comparable to those of the previous year.

8 The Company has a long term investment of Rs. 1500.00 Lacs in the Shares of Modern India Property Developers Limited (MIPDL), a Wholly Owned Subsidiary of the Company. Further, loans amounting to Rs. 4405.00 Lacs and other receivables of Rs. 406.00 Lacs are also recoverable from MIPDL. MIPDL has undertaken the project of setting up IT / ITeS SEZ at Khopoli. Due to Economic meltdown witnessed and slow down in IT / ITeS sector, activities of this project have been kept on hold. It has also been decided to explore alternatives in respect of the land acquired by MIPDL. Activities are expected to commence on revival of IT / ITeS sector. Under the circumstances and on the basis of managements perception, the aforesaid investments, loans and other receivables have been considered as fully realizable.

9 The Company has a long term investment of Rs. 2.55 Lacs in the Shares of Modern India Free Trade Warehousing Private Limited (MIFTWPL), a Subsidiary of the Company. Further, loans amounting to Rs. 593.75 Lacs and other receivables of Rs. 59.37 Lacs are also recoverable from MIFTWPL. MIFTWPL has planned the project of setting up Free Trade Warehousing Zone at Panvel. Due to slow down in the logistics and warehousing sector, the project has not taken off. It is expected that with economic revival the activities of this sector will get boost. In view of the long term and strategic nature of investment, the management is confident of recovering the aforesaid sums.

10 The Company has filed a claim on 07.05.2010 in respect of monthly outgoing charges on unsold flats paid to Belvedere Court Condominium ( An Association of Residential Apartment owners) wherein it owns flats. In view of the uncertainties involved for the settlement of claim, the same will be considered as income only on reconciliation of pending issues.

1) The Company has identified Business Segments as primary segments. The Reportable Business Segments are: a) Business Center - comprising of activities connected with running of Business Centre, b) Vocational Training Institute - comprising of activities connected with Training for all the facets of Jewellery Industry and Gem Testing Laboratory etc. c) Trading - Consists of Trading in all Products and d) Real Estate - comprising of Property Development and carrying on business or activities in real estate business of all types.

2) Items of Revenue, Income and Expenses, Assets and Liabilities (including Borrowings, Provision for Taxation and Deferred Tax) which are not directly attributable / identifiable / allocable to business segments are shown as Unallocated / Corporate.

B) Significant Influence :

(i) Shree Rani Sati Investment & Finance Ltd.

(ii) F. Pudumjee Investment Co. Ltd.

(iii) Modern Derivatives & Commodities Pvt. Ltd.

(iv) Alcyone Trading Co. Pvt. Ltd.

(v) Camellia Mercantile Pvt. Ltd.

(vi) Candescent Traders Pvt. Ltd.

(vii) Ignatius trading Co. Pvt. Ltd.

(viii) Sarat Leasing & Finance Ltd.

(ix) Vedant Mercantile Pvt. Ltd.

C) Key Management Personnel & Relatives :

(i) Mr. V. K. Jatia - Chairman & Managing Director. (ii) Mrs. Gauri Jatia - Director. (iii) Mr. Vedant Jatia - Executive (iv) Mr. Mudit Jatia - Executive

D) Joint Venture : Contractual Arrangement Central Bombay Infotec Park.

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