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Notes to Accounts of Modi Rubber Ltd.

Mar 31, 2021

a) Movements in equity share capital:

During the year, the Company has neither issued nor bought back any shares.

b) Terms and rights attached to equity shares:

Voting

Each holder of equity share is entitled to one vote per share held.

Dividends

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in ensuing Annual General Meeting except in the case where interim dividend is distributed.

Liquidation

In the event of liquidation of the Company, the holders of equity shares shall be entitled to receive all of the remaining assets of the Company, after distribution of all preferential amounts, if any. Such distribution amounts will be in proportion to the number of equity shares held by the shareholders.

c) During the last five financial years, no class of shares have been allotted as fully paid up pursuant to contract(s) without payment being received in cash, allotted as fully paid up by way of bonus shares or bought back.

i) Term Loan of Rs. 11.63 lacs (March 31,2020: Rs 37.30 lacs) repayable in equated monthly instalment of Rs 2.39 lacs each (including interest). Final instalment due in August 2021.

ii) Term Loan of Rs. 30.11 lacs (March 31,2020: Rs 47.18 lacs) repayable in equated monthly instalment of Rs 1.71 lacs each (including interest). Final instalment due in October 2022.

(b) Rs. 250 lacs (March 31,2020: Rs. 250 lacs) payable @ 50% of Rs.500 lacs to M/s Morgan Securities & Credit Pvt.Ltd.as per BIFR SS-08

(i) The Company’s exposure to liquidity risk related to trade payables is disclosed in note 33.1

(ii) The Company has requested all its vendors to confirm their status under Micro, Small and Medium Enterprises Development Act, 2006 (‘Act’). Based on the confirmations received, there are no amounts due to any micro or small enterprise under the MSMED Act, 2006. Further, the Company’s liability towards any interest for delayed payments, if any under the provisions of the Act is not likely to be material.

(iii) Trade payables are non interest bearing and are normally settled in normal trade cycle.

(iv) "Due to others" include Rs. 136.62 lacs (March 31,2020: Rs. 136.62 lacs) i.e. 20% of Rs. 683.10 lacs as per settlement terms defined in BIFR SS08 towards lease rent payable to M/s Modi Exports Processors Ltd.(MEPL) for the period January, 2002 to September, 2007. Further no liability towards lease rent has been provided after September, 2007 since the premises are sealed by the Official Liquidator of MEPL.

*Footnote:

(a) include Rs. 1324.50 lacs (March 31, 2020: Rs 1339.52 lacs) which represents the sales tax liability of various State Authorities. The Company had made representations to the States Authorities for giving various relief and concessions in line with BIFR sanctioned scheme. In the opinion of the management, sales tax liability would be reduced as soon as representation of the Company will be heard by various States Authorities. Honourable Allahabad high court vide its order dated 31.07.2017 w.t no 914 of 2015 directed state authorities to provide relief to the company in accordance with the Rehabilitation scheme.

32. Fair Value Measurements

(a) Financial instruments by category

All the financial assets and liabilities viz. deposits for utilities, trade receivables, cash and cash equivalents, other bank balances, interest receivable, recoverable from employees, trade payables, employee related liabilities and payable for expenses, are measured at amortised cost.

(b) Fair value hierarchy

The Company determines the fair value of its financial instruments on the basis of the following hierarchy:

Level 1: The fair value of financial instruments that are quoted in active markets are determined on the basis of quoted price for identical assets or liabilities.

Level 2: The fair value of financial instruments that are not traded in an active market are determined using valuation techniques based on observable market data.

Level 3: The fair value of financial instruments that are measured on the basis of entity specific valuations using inputs that are not based on observable market data (unobservable inputs). Fair value of investment in unquoted equity shares is determined using discounted cash flow technique.

In the course of its business, the Company is exposed to a number of financial risks: liquidity risk, credit risk, market risk. This note presents the Company''s objectives, policies and processes for managing its financial risk and capital.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. Credit risk arises principally from trade receivables, loans & advances, cash & cash equivalents and deposits with banks and financial institutions.

Investments

The Company has made investments in tax free long term bonds, deposit with banks, mutual funds etc. Funds are invested in accordance with the Company''s established investment policy that includes parameters of safety, liquidity and post tax returns.

Trade receivables

The activities of the company primarily include rental income. The invoices raised to customers immediately falls due for payment after the credit period allowed to customers. Refer Note 37 on disclosure on related party transactions with respect to amount outstanding as at reporting date.

Credit risk arising from trade receivables is managed in accordance with the Management control and approval procedure. The Company provides for expected credit losses on trade receivables based on a simplified approach as per Ind AS 109. Under this approach, expected credit losses are computed basis the probability of defaults over the lifetime of the asset. This allowance is measured taking into account credit profile of the customer, geographical spread, trade channels, past experience of defaults, estimates for future uncertainties etc.

Other financial assets

Other financial assets include employee loans, security deposits etc. Based on historical experience and credit profiles of counterparties, the Company does not expect any significant risk of default. The Company''s maximum exposure to credit risk for each of the above categories of financial assets is their carrying values as at the reporting dates.

Liquidity risk

Liquidity risk refers to risk that the Company may encounter difficulties in meeting its obligations associated with financial liabilities that are settled in cash or other financial assets. The Company regularly monitors the rolling forecasts to ensure that sufficient liquidity is maintained on an ongoing basis to meet operational needs. The Company manages the liquidity risk by planning the investments in a manner such that the desired quantum of funds could be made available to meet any of the business requirements within a reasonable period of time. In addition, the Company also maintains flexibility in arranging the funds by maintaining committed credit lines with various banks to meet the obligations.

Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.

Interest Rate Risk

Interest rate risk refers to risk that the fair value of future cash flows of a financial instrument may fluctuate because of changes in market interest rates. The Company is not exposed to any significant interest rate risk as its investments are primarily in fixed rate instruments. Also, there are no significant borrowings as at the balance sheet date.

Price Risk

Price risk refers to risk that the fair value of a financial instrument may fluctuate because of the change in the market price. The Company is exposed to the price risk mainly from investment in mutual funds and investment in equity instruments. Investment in mutual funds are made primarily in units of liquid funds and are not exposed to significant price risk.

Foreign Currency Risk

Foreign currency risk refers to risk that the fair value of future cash flows of an exposure may fluctuate due to change in the foreign exchange rates. The Company is not exposed to foreign currency risk as it is not having any transactions in foreign currency.

34. Capital Management

The Company manages its capital to ensure that it will be able to continue as a Going Concern while maximising the return to stakeholders. The Company has minimum dependence on external debts and operates mainly through internal accruals. Capital includes equity share capital and other

eTqhuei tCy oremspearvneysd.etermines the amount of capital required on the basis of annual operating plans and other strategic investment plans.

a. Interest on lease liabilities is Rs 18.51 lacs and Rs 18.73 lacs for the years ended March 31,2021 and 2020, respectively.

b. The Company incurred Rs 13.78 lacs and Rs 13.80 lacs for the years ended March 31,2021 and 2020, respectively, towards expenses relating to short-term leases and leases of low-value assets.

c The total cash outflow for leases is Rs 46.90 lacs and Rs 46.92 lacs for the years ended March 31, 2021 and 2020, respectively, including cash outflow for short-term and low-value leases.

i Provident Fund

The Employees of the company receive defined contribution for Provident Fund benefit. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employees and the company make monthly contributions at specified percentage of the employee''s salary to the concerned Provident Fund Authorities. The company has no liability to Fund the shortfall in the interest over the statutory rate declared by the Government.

ii Defined benefit plan( Gratuity)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme of Gratuity Fund Trust, administered and managed by the Independent Board of Trustees. The sections of the Company first makes the payment to vested employees at retirement, death, incapacitation or termination of employment of an amount based on the respective employee''s salary and the tenure of employment and then gets the reimbursement from it. Vesting occurs upon completion of five years of service. The present value of Defined Benefit Obligation is calculated annually by an independent actuary using the projected unit credit method.

Note 1 - In view of large number of cases, it is not practicable to disclose individual details. Above amounts are affected by numerous uncertainties and timing of economic benefit outflow will depend upon timing of decision of these cases.

Note 2 - On the basis of current status of individual case and as per legal advise obtained by the Company, wherever applicable. The Company is confident of winning the above cases and is of the view that no further provision required in respect of these cases.

Note 3 - The above amount includes contingent liability amounting to Rs 8,335.97 lacs which may arise pursuant to Share Purchase Agreement dated July 15, 2011, entered between the Company & Continental India Limited, (refer footnote (a) to note 14 of the financial statements).

41 Post sanction of Rehabilitation Scheme under the provisions of SICA by BIFR on 21.04.2008, the Company had given full effect of the scheme from cut off date in the books of accounts assuming that the relief and concessions as given to the company in the scheme would be accepted by all the concerned parties/creditors.

42 BIFR vide its order dated 23.02.2010 discharged the company from the purview of SICA/ BIFR upon turning net worth positive as at 31.03.2009, with the direction that the unimplemented portion of rehabilitation scheme (SS08) for the unexpired period of the Scheme would be implemented by the concerned agencies and their implementation would be monitored by the company. Some of the authorities/parties have not accepted terms of settlement and relief & concessions as provided in SS08. The Company has filed a status report on the unimplemented portion of the Rehabilitation Scheme as at September 30th, 2016 with BIFR on 20/10/2016. Further Government of India (GOI) vide its Gazette notification dated 25/11/2016 repealed SICA w.e.f 01/12/2016 by passing the Sick Industrial Companies (Special provisions) Repeal Act, 2003. All proceedings pending in BIFR/ AAIFR would now stand abated and a time period of 180 days have been given to all applicants to approach National Company Law Tribunal (NCLT) and to get appropriate relief under Insolvency and Bankruptcy Code, 2016. Further all schemes sanctioned by BIFR are saved and would continue to be enforceable by NCLT.

43 Land & Building at Modi Tyre Factory (MTF), Modinagar is on perpetual lease taken from Modi Export Processors Ltd. (MEPL) which has been liquidated by the order of Hon''ble Allahabad High Court. Pursuant to Allahabad High Court Order possession of the MTF is with the Official Liquidator of MEPL. Company has taken appropriate legal recourse for getting possession back of MTF from Official Liquidator for carrying out industrial activities in terms of BIFR Order dated 21.04.2008. After possession, Company shall take necessary steps as required.

44 The company has made investments of Rs.1079.35 lacs and has given loans and advances of Rs.124.60 lacs (inclusive of interest) aggregating to Rs.1203.95 lacs (hereinafter together referred as "Exposure") in "Modi Marco Aldany Private Limited" and is joint venture of the Company. During the year, the business of the joint venture has significantly impacted due to impact of COVID-19 resulting in cash losses and shutting down of multiple operational stores. Given effect to same and in view of the prudence concept, the company has provided provision for impairment in the value of investment amounting to Rs 748.54 lacs to the extent of its share in net accumulated losses of joint venture at 31st March 2021.

45 In accordance with IND AS 108 - Operating Segment used to present the segment information are identified on the basis of informal report used by the Company to allocate resource to the segment and assess their performance. The Board of Directors of the Company is collectively Chief Operating Decision Maker (CODM).The Company is engaged in Renting of immovable property which in the context of Ind AS 108 “Operating Segment" is considered as the only segment. The Company''s activities are restricted within India and hence no separate geographical segment disclosure is considered necessary.

46 Balances of certain payables for expenses, employees related payables and loans & advance are subject to confirmation / reconciliation, if any. The management does not expect any material difference affecting the financial statements on such reconciliation / adjustments.

47 The Company has considered the possible effects that may result from the pandemic relating to COVID-19 in the preparation of these financial statements including the recoverability of carrying amounts of financial and non-financial assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the company has, at the date of approval of these financial statements, used internal and external sources of information and economic forecasts and expects that the carrying amount of these assets will be recovered.

48 Previous year figures have been regrouped/ reclassified wherever necessary, to conform to this year''s classification The accompanying notes 1 to 48 form an integral part of these financial statements.


Mar 31, 2018

1. CORPORATE INFORMATION

Modi Rubber Ltd. (“the Company”) is a company domiciled in India, with its registered office situated at Modi Bhawan, Modinagar-201204, District Ghaziabad, Uttar Pradesh. The Company has been incorporated under the provisions of Indian Companies Act and its equity shares are listed on the BSE & NSE in India.

Footnote i

a) Nature: The restrictions are primarily on account of fixed deposits pledged with various government authorities & others and bank guarantees given.

b) Terms & conditions: The deposits maintained by the Company with banks comprise of time deposits which can be withdrawn by the Company subject to compliance of restrictions.

c) Deposit with banks and interest accrued includes Rs 2,415.42 lacs and Rs 511.14 lacs respectively which represents an escrow account which was created due to Share Purchase Agreement dated July 15, 2011, between the Company & Continental India Limited, in order to cover unascertained liabilities till the expiry of escrow period (2019), and hence interest income accrued on escrow account deposit is not considered as income and shown as liability under “Other Current Liabilities”. (Refer Note 25)

(d) Deposit with banks and interest accrued includes Rs 1,300 lacs and Rs 56.64 lacs respectively which represents payment made against bank guarantee issued on direction of the Registrar of Supreme Court in the matter of intercorporate deposits amounting to Rs 500 lacs (Refer Note 19(b))

Note:

* The Company holds around 55% shares in Modistone Ltd (MSL) which is under liquidation and was having working capital facilities from various banks. In 1996, the Company had also given a cash loan and material loan of Rs. 2524.00 lacs to MSL against mortgage of 2 flats in posh localities of Mumbai by way of deposit of title deeds. In 1996-97, at the time of renewal of working capital facility of MSL, consortium banks had asked for personal guarantee from Mr VK Modi & Dr. BK Modi (not holding any shares in MSL), who were then were the nominee directors of the Company on the board of MSL. MSL had also given them the counter guarantee. Board of Industrial and Financial Reconstruction recommended under section 20 of Sick Industrial Companies Act, 1985 to Bombay High Court for winding up of MSL. Consortium banks have filed recovery suits against guarantors and obtained decree from Debt Recovery Tribunal. Board of Directors of the Company in their board meeting dated 17th August 2017 decided to indemnify director of the Company (Mr. VK Modi) and also to do settlements with other banks on similar terms. The Company settled the liability of State Bank of Bikaner & Jaipur of Rs. 1320.00 lacs & State Bank of Indore of Rs. 536.04 lacs for Rs. 141.11 lacs & Rs. 72.61 lacs respectively which are recoverable from MSL in due course.

(i) Due from a Private Company in which one of the director of the Company, is a director- Maple Bear Education Pvt Ltd: Rs 4.26 lacs

(iii) For explanation on the company credit risk management process refer note 35.1

(iv) For long outstanding trade receivables refer credit risk management process note 35.1

Each holder of equity share is entitled to one vote per share held.

Dividends

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in ensuing Annual General Meeting except in the case where interim dividend is distributed. Liquidation

In the event of liquidation of the Company, the holders of equity shares shall be entitled to receive all of the remaining assets of the Company, after distribution of all preferential amounts, if any. Such distribution amounts will be in proportion to the number of equity shares held by the shareholders.

c) During the last five financial years, no class of shares have been allotted as fully paid up pursuant to contract(s) without payment being received in cash, allotted as fully paid up by way of bonus shares or bought back.

d) Shares held by the shareholders holding more than 5% shares in the Company.

Includes:

(a) Secured by hypothecation of vehicles:

i) Term Loan of Rs. 25.82 Lacs (March 31, 2017: Rs. 38.62 Lacs, April 1, 2016: Rs 50.11 lacs) repayable in equated monthly instalment of Rs.1,34 lacs each (including interest). Final instalment due in December 2019.

ii) Term Loan of Rs. 80.31 Lacs (March 31, 2017: Rs 98.23 lacs, April 1, 2016: Nil) repayable in equated monthly instalment of Rs 2.39 lacs each (including interest). Final instalment due in August 2021.

(b) Rs. 250 lacs (March 31, 2017: Rs. 250 lacs, April 1, 2016: 250 lacs) payable @ 50% of Rs.500 lacs to M/s Morgan Securities & Credit Pvt.Ltd.as per BIFR SS-08

(i) The Company’s exposure to liquidity risk related to trade payables is disclosed in note 35.1

(ii) The Company has requested all its vendors to confirm their status under Micro, Small and Medium Enterprises Development Act, 2006 (‘Act’). Based on the confirmations received, there are no amounts due to any micro or small enterprise under the MSMED Act, 2006. Further, the Company’s liability towards any interest for delayed payments, if any under the provisions of the Act is not likely to be material.

(iii) Trade payables are non interest bearing and are normally settled in normal trade cycle.

(iv) “Due to others” include Rs. 136.62 lacs (March 31, 2017: Rs. 136.62 lacs; April 1, 2016: Rs. 136.62 lacs) i.e 20% of Rs. 683.10 lacs as per settlement terms defined in BIFR SS08 towards lease rent payable to M/s Modi Exports Processors Ltd.(MEPL) for the period January, 2002 to September, 2007. Further no liability towards lease rent has been provided after September, 2007 since the premises are sealed by the Official Liquidator of MEPL.

(v) “Due to others” include Rs 135 lacs (March 31, 2017: Rs 310.71; April 1, 2016: Rs 310.71) which represents settlement of Continental Carbon India Limited dues for Rs. 380 lacs. The Company has paid Rs 245 lacs till 31st March 2018 and the balance amount will be paid by 31st December 2018 in 9 monthly installments of Rs 15 lacs each.

2. First-Time Adoption of Ind AS

The company has prepared its first Financial Statements in accordance with Ind AS for the year ended March 31, 2018. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with Indian GAAP, including accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended). The effective date for Company’s Ind AS Opening Balance Sheet is April 1, 2016 (the date of transition to Ind AS). The adoption of Ind AS has been carried out in accordance with Ind AS 101, First time adoption of Indian Accounting Standards. Ind AS 101 requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements for the year ended March 31, 2018, be applied retrospectively and consistently for all financial years presented.

The accounting policies set out in Note 1.1 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS Balance Sheet at April 1, 2016 (the Company’s date of transition). According to Ind AS 101, the first Ind AS Financial Statements must use recognition and measurement principles that are based on standards and interpretations that are effective at March 31, 2018, the date of first-time preparation of Financial Statements according to Ind AS. These accounting principles and measurement principles must be applied retrospectively to the date of transition to Ind AS and for all periods presented within the first Ind AS Financial Statements.

However, in preparing these Ind AS financial statements, the company has availed certain exemptions and exceptions in accordance with Ind AS 101. Any resulting differences between carrying amounts of assets and liabilities according to Ind AS 101 as of April 1, 2016 compared with those presented in the Indian GAAP Balance Sheet as of March 31, 2016, were recognized in equity under retained earnings within the Ind AS Balance Sheet.

An explanation of how the transition from previous GAAP to Ind AS has affected the company’s financial position, financial performance and cash flows is set out in the following notes and tables

A) Exemption and exceptions availed

In the Ind AS Opening Balance Sheet as at April 1, 2016, the carrying amounts of assets and liabilities from the Indian GAAP as at 31 March 2016 are generally recognized and measured according to Ind AS in effect as on March 31, 2018. For certain individual cases, however, Ind AS 101 provides for optional exemptions and mandatory exceptions to the general principles of retrospective application of Ind AS. The Company has used the following exemptions and exceptions in preparing its Ind AS Opening Balance Sheet:

A.1 Ind AS optional exemptions

A.1.1 Property, plant and equipment & Intangible assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments. This exemption can also be used for intangible assets covered by Ind AS 38, Intangible Assets. Accordingly, the company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

A.2 Ind AS mandatory exceptions A.2.1 Estimates

The Company’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

* Investment in equity instruments carried at FVTPL or FVTOCI;

* Impairment of financial assets based on expected credit loss model.

A2.2 Classification and measurement of financial assets

Ind AS 101 requires the company to assess classification of financial assets on the basis of facts and circumstances existing as at the date of transition. Further, the standard permits measurement of financial assets accounted on amortised cost basis on fact and circumstances existing as at the date of transition, if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets on the basis of facts and circumstances existing as at the date of transition. Measurement of financial assets has been done retrospectively except where the same is impracticable.

A2.3 Dereognition of financial assets and liabilities

As per Ind AS 101 an entity should apply derecognition requirements in Ind AS 109 prospectively for transaction occurring on or after the date of transition to Ind AS.

Notes to first-time adoption:

(a) Financial assets

Under Indian GAAP, investment in equity shares, mutual funds and GOI bonds are recorded at cost.

However, under Ind AS 113, certain assets which meet the definition of financial assets are classified as financial assets at fair value. Therefore, such financial assets have been fair valued as per market data. Gain/loss due to fair valuation of investments on the transition date has been adjusted against the retained earnings. Further, financial income on fair valuation during the year ended March 31, 2017 has been credited to the statement of profit and loss.

The effect of the adjustments resulted in increase in the value of financial assets and increase in retained earnings by Rs. 1,347.14 lacs on transition date. During the year ended March 31, 2017, value of financial assets were decreased by Rs 131.57 lacs by corresponding recording of financial income in the statement of profit and loss.

(b) Financial liabilities

Under Indian GAAP, liabilities pertaining to security deposits received from customers are recorded at cost.

However, under Ind AS, liabilities in which the Company has a contractual obligation to deliver cash are classified as financial liabilities and recorded at amortized cost. Therefore, such financial liabilities have been discounted to present value since they do not carry any interest. The upfront benefit on transition date due to the discounting has been adjusted against the retained earnings. Further, interest cost on unwinding of discount has been charged off to the statement of profit or loss.

The effect of the adjustments resulted in reduction of the value of financial liabilities by Rs. 2.36 lacs along with corresponding increase in retained earnings as on the transition date. During the year ended March 31, 2017, value of financial liabilities was increased by Rs. 0.06 lacs by corresponding increase in the statement of profit and loss.

(c) Employee benefits :

Both under Indian GAAP and Ind-AS, the company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to the statement of profit or loss. However, Under Ind-AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised in Other Comprehensive Income.

(d) Loss allowance on trade receivable

Under Ind AS, impairment allowance has been determined based on Expected Loss Model (ECL) using the provision matrix as practical expedient. Due to ECL model, the Company has impaired its trade receivable by Rs. 2.49 lacs as on April 1, 2016 which has been adjusted against retained earnings. The net impact of Rs. 86.21 lacs for the year ended March 31, 2017 has been recognised in statement of profit and loss.

(e) Borrowings

Under IGAAP, transaction cost incurred in connection with borrowings are amortised upfront and charged to profit and loss for the period. Under Ind AS, transaction cost are included in the initial recognition amount of the financial liability and charged to profit and loss over the tenure of the loan using the effective interest method. Due to this, the Company has decreased its borrowings by Rs 0.03 lacs as on April 1, 2016 which has been adjusted against retained earnings. The corresponding amortization impact of Rs Nil for the year ended March 31, 2017 has been recognised in statement of profit and loss.

(f) Deferred taxes

The above changes increased (decreased) the deferred tax liability as follows based on a tax rate of 30.90 per cent and long term and short term capital gain tax rate of Rs 20.6% and 30.9% respectively:

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind-AS 12 “Income Taxes” requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind-AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP

(g) Retained earnings :

Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments.

(h) Other comprehensive income

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Items that have been reclassified from statement of profit and loss to other comprehensive income includes remeasurement of defined benefit plans (net of tax) and gain/loss on Fair Value Through Other Comprehensive Income of equity instruments. Hence, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

(i) Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

(j) Leasehold land, building on leasehold land as well as building on freehold land that are neither held to earn rentals nor for capital appreciation do not qualify as investment property.

3. Fair Value Measurements

(a) Financial instruments by category

All the financial assets and liabilities viz. deposits for utilities, trade receivables, cash and cash equivalents, other bank balances, interest receivable, recoverable from employees, trade payables, employee related liabilities and payable for expenses, are measured at amortised cost.

(b) Fair value hierarchy

The Company determines the fair value of its financial instruments on the basis of the following hierarchy:

Level 1: The fair value of financial instruments that are quoted in active markets are determined on the basis of quoted price for identical assets or liabilities.

Level 2: The fair value of financial instruments that are not traded in an active market are determined using valuation techniques based on observable market data.

Level 3: The fair value of financial instruments that are measured on the basis of entity specific valuations using inputs that are not based on observable market data (unobservable inputs). Fair value of investment in unquoted equity shares is determined using discounted cash flow technique.

There are no transfers between different fair value hierarchy levels in 2016-17, 2017-18.

The fair values for security deposits received from employees and security deposit for utilities were calculated based on cash flows discounted using a current fixed deposit rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

4.1 Financial Risk Management

In the course of its business, the Company is exposed to a number of financial risks: liquidity risk, credit risk, market risk. This note presents the Company’s objectives, policies and processes for managing its financial risk and capital.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. Credit risk arises principally from trade receivables, loans & advances, cash & cash equivalents and deposits with banks and financial institutions.

Investments

The Company has made investments in tax free long term bonds, deposit with banks, mutual funds etc. Funds are invested in accordance with the Company’s established investment policy that includes parameters of safety, liquidity and post tax returns.

Trade receivables

The activities of the company primarily include rental income. The invoices raised to customers immediately falls due for payment after the credit period allowed to customers.Refer Note 39 on disclosure on related party transactions with respect to amount outstanding as at reporting date.

Credit risk arising from trade receivables is managed in accordance with the Management control and approval procedure. The Company provides for expected credit losses on trade receivables based on a simplified approach as per Ind AS 109. Under this approach, expected credit losses are computed basis the probability of defaults over the lifetime of the asset. This allowance is measured taking into account credit profile of the customer, geographical spread, trade channels, past experience of defaults, estimates for future uncertainties etc.

Other financial assets

Other financial assets include employee loans, security deposits etc. Based on historical experience and credit profiles of counterparties, the Company does not expect any significant risk of default. The Company’s maximum exposure to credit risk for each of the above categories of financial assets is their carrying values as at the reporting dates.

(i) Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

Based on historic default rates, the Company believes that, no impairment allowance is necessary in respect of any asset as the amount are insignificant.

Ageing analysis of trade receivables

The ageing analysis of the trade receivables is as below:

Liquidity risk

Liquidity risk refers to risk that the Company may encounter difficulties in meeting its obligations associated with financial liabilities that are settled in cash or other financial assets. The Company regularly monitors the rolling forecasts to ensure that sufficient liquidity is maintained on an ongoing basis to meet operational needs. The Company manages the liquidity risk by planning the investments in a manner such that the desired quantum of funds could be made available to meet any of the business requirements within a reasonable period of time. In addition, the Company also maintains flexibility in arranging the funds by maintaining committed credit lines with various banks to meet the obligations.

Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.

Interest Rate Risk

Interest rate risk refers to risk that the fair value of future cash flows of a financial instrument may fluctuate because of changes in market interest rates. The Company is not exposed to any significant interest rate risk as its investments are primarily in fixed rate instruments. Also, there are no significant borrowings as at the balance sheet date.

Price Risk

Price risk refers to risk that the fair value of a financial instrument may fluctuate because of the change in the market price. The Company is exposed to the price risk mainly from investment in mutual funds and investment in equity instruments. Investment in mutual funds are made primarily in units of liquid funds and are not exposed to significant price risk.

Foreign Currency Risk

Foreign currency risk refers to risk that the fair value of future cash flows of an exposure may fluctuate due to change in the foreign exchange rates. The Company is not exposed to foreign currency risk as it is not having any transactions in foreign currency.

5. Capital Management

The Company manages its capital to ensure that it will be able to continue as a Going Concern while maximising the return to stakeholders.The Company has minimum dependence on external debts and operates mainly through internal accruals. Capital includes equity share capital and other equity reserves.

The Company determines the amount of capital required on the basis of annual operating plans and other strategic investment plans.

6. Corporate Social Responsibility (‘CSR’)

(i) Gross amount required to be spent by the company during the year Rs Nil (previous year Rs. Nil)

(ii) Amount Spent during the:

7. Leases

Operating Lease

For the year ended March 31, 2018 and year ended March 31, 2017

(i) The Company has taken various residential and office premises under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms.

(ii) The aggregate lease rentals payable are charged as rent in Note 30 -”Rent expenses”

8.Related Parties Disclosures in accordance with Indian Accounting Standard (Ind AS) 24 of The Institute of Chartered Accountants of India.

A) Subsidiary Companies

i) Modistone Ltd. (in liquidation)

Official Liquidator has taken possession of the Company w.e.f. 25.07.2002- the date of appointment of Official Liquidator by Bombay High Court

ii) Superior Investment (India) Ltd.

iii) Spin Investment (India) Ltd

B) Joint Venture Gujarat Guardian Ltd.

Asahi Modi Materials Pvt. Ltd.

Modi Marco Aldany Pvt Ltd

C) Associate

Vinura Beverages Pvt. Ltd. (An Associate of a wholly owned subsidiary)

D) Key Management Personnel:

Mr. Alok Kumar Modi-Managing Director Miss Piya Modi-Whole Time Director Mr. Sanjeev Kumar Bajpai-Company Secretary Mr. Kamal Gupta-Chief Financial Officer (CFO)

E) Relatives of Key Management Personnel

Mr. Vinay Kumar Modi (Father of Mr. Alok Kumar Modi)

Mrs. Chander Bala Modi (Mother of Mr. Alok Kumar Modi)

Mrs. Archana Singhania (Sister of Mr. Alok Kumar Modi)

Mrs. Ritika Modi (Wife of Mr. Alok Kumar Modi)

F) Enterprises in which Key Management Personnel and relatives of Key Management Personnel has significant influence

Leaf Investment Pvt. Ltd.

Mod Fashions and Securities Pvt. Ltd Uniglobe Mod Travels Pvt. Ltd Uniglobe Travel (South Asia) Pvt. Ltd Maple Bear Education Pvt. Ltd.

9 Gratuity and other post-employment benefit plans

Contribution for Employees Benefit:

Defined Contribution Plans

Provident Fund

State Defined Contribution Plans - Employees Pension Scheme 1995

i Provident Fund

The Employees of the company receive defined contribution for Provident Fund benefit. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employees and the company make monthly contributions at specified percentage of the employee’s salary to the concerned Provident Fund Authorities. The company has no liability to Fund the shortfall in the interest over the statutory rate declared by the Government.

The Company has recognized the following amounts in the Statement of Profit and Loss for the year ended 31st March, 2018

ii Defined benefit plan( Gratuity)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme of Gratuity Fund Trust, administered and managed by the Independent Board of Trustees. The sections of the Company first makes the payment to vested employees at retirement, death, incapacitation or termination of employment of an amount based on the respective employee’s salary and the tenure of employment and then gets the reimbursement from it. Vesting occurs upon completion of five years of service. The present value of Defined Benefit Obligation is calculated annually by an independent actuary using the projected unit credit method.

10 Post sanction of Rehabilitation Scheme under the provisions of SICA by BIFR on 21.04.2008, the Company had given full effect of the scheme from cut off date in the books of accounts assuming that the relief and concessions as given to the company in the scheme would be accepted by all the concerned parties/creditors.

11 BIFR vide its order dated 23.02.2010 discharged the company from the purview of SICA/ BIFR upon turning net worth positive as at 31.03.2009, with the direction that the unimplemented portion of rehabilitation scheme (SS08) for the unexpired period of the Scheme would be implemented by the concerned agencies and their implementation would be monitored by the company. Some of the authorities/parties have not accepted terms of settlement and relief & concessions as provided in SS08. The Company has filed a status report on the unimplemented portion of the Rehabilitation Scheme as at September 30th, 2016 with BIFR on 20/10/2016. Further Government of India (GOI) vide its Gazette notification dated 25/11/2016 repealed SICA w.e.f 01/12/2016 by passing the Sick Industrial Companies (Special provisions) Repeal Act, 2003. All proceedings pending in BIFR/ AAIFR would now stand abated and a time period of 180 days have been given to all applicants to approach National Company Law Tribunal (NCLT) and to get appropriate relief under Insolvency and Bankruptcy Code, 2016. Further all schemes sanctioned by BIFR are saved and would continue to be enforceable by NCLT.

12 Land & Building at Modi Tyre Factory (MTF), Modinagar is on perpetual lease taken from Modi Export Processors Ltd. (MEPL) which has been liquidated by the order of Hon’ble Allahabad High Court. Pursuant to Allahabad High Court Order possession of the MTF is with the Official Liquidator of MEPL. Company has taken appropriate legal recourse for getting possession back of MTF from Official Liquidator for carrying out industrial activities in terms of BIFR Order dated 21.04.2008. After possession, Company shall take necessary steps as required

13 Expenses and claims relating to previous year adjusted in respective accounts not separately shown are Rs. Nil Lacs [previous year Rs. 4.64 Lacs].

14 The Company’s operations comprise only one segment i.e. Automobile Tyres, Tubes & Flaps and therefore there is no other business / geographical segments to be reported as required under Accounting Standard (AS-17) of the The Institute of Chartered Accountants of India.

15 During the previous year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated March 30, 2017 on the details of Specified Bank Notes (SBNs) held and transacted during the period from November 8, 2016 to December, 30 2016, the denomination wise SBNs and other notes as per the notification is given below:

16 Exceptional items consist of Rs 2,050.30 lacs being profit on sale of 3,137,000 equity shares held in Xerox India Limited sold @ Rs 80 per equity share pursuant to Share Purchase Agreement with Xerox Investments Europe B.V. dated 24 July 2017.

17 Previous year figures have been regrouped/ reclassified wherever necessary, to conform to this year’s classification The accompanying notes 1 to 50 form an integral part of these financial statements.


Mar 31, 2016

C. NOTES

1. (a) Post sanction of Rehabilitation Scheme under the provisions of SICA by BIFR on 21.04.2008, the Company had given full effect of the scheme from cut off date in the books of accounts assuming that the relief and concessions as given to the company in the scheme would be accepted by all the concerned parties/creditors.

(b) BIFR vide its order dated 23.02.2010 discharged the company from the purview of SICA/ BIFR upon turning networth positive as at 31.03.2009, with the direction that the unimplemented portion of rehabilitation scheme (SS08) for the unexpired period of the Scheme would be implemented by the concerned agencies and their implementation would be monitored by the company. Some of the authorities/parties have not accepted terms of settlement and relief & concessions as provided in SS08. The Company has filed a status report on the unimplemented portion of the Rehabilitation Scheme as at March 31st, 2015 with BIFR on 19/05/2015.

2. Land & Building at Modi Tyre Factory (MTF), Modinagar is on perpetual lease taken from Modi Export Processors Ltd. (MEPL) which has been liquidated by the order of Hon’ble Allahabad High Court. Pursuant to Allahabad High Court Order possession of the MTF is with the Official Liquidator of MEPL. Company has taken appropriate legal recourse for getting possession back of MTF from Official Liquidator for carrying out industrial activities in terms of BIFR Order dated 21.04.2008. After possession, Company shall take necessary steps as required.

3. (a) Provision for Income Tax is computed in accordance with the provisions of the Income Tax Act, 1961.

(b) Deferred Tax is recognized subject to the consideration of prudence, on timing difference, being the difference between taxable income and accounting income that originate in one period and is capable of reversal in one or more subsequent periods.

4. Expenses and claims relating to previous year adjusted in respective accounts not separately shown are Rs. 16.92 lacs [previous year Rs. 5.09 lacs].

5. The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with Interest paid/payable under this Act, has not been given.

6. The Company’s operations comprise only one segment i.e. Automobile Tyres, Tubes & Flaps and therefore there is no other business / geographical segments to be reported as required under Accounting Standard (AS-17) of the The Institute of Chartered Accountants of India.

7. Due to non availability of technical evaluation of the plant at Modinagar, the value of intangible assets and value of impairment loss on assets as per Accounting Standard 26 and 28 respectively, issued by the Institute of Chartered Accountants of India, has not been ascertained.

8. The company adopted Accounting Standard 15 (Revised) issued by The Institute of Chartered Accountants of India.

Contribution for Employees Benefit :

Defined Contribution Plans

a. Provident Fund

b. State Defined Contribution Plans

- Employees Pension Scheme 1995 Provident Fund:

The Employees of the company receive defined contribution for Provident Fund benefit. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employees and the company make monthly contributions at specified percentage of the employee’s salary to the concerned Provident Fund Authorities. The company has no liability to Fund the shortfall in the interest over the statutory rate declared by the Government.

The Company has recognized the following amounts in the Statement of Profit and Loss for the year ended 31st March, 2016

Defined benefit plans Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme of Gratuity Fund Trust, administered and managed by the Independent Board of Trustees. The sections of the Company first makes the payment to vested employees at retirement, death, incapacitation or termination of employment of an amount based on the respective employee’s salary and the tenure of employment and then gets the reimbursement from it. Vesting occurs upon completion of five years of service. Liabilities with regards to the Gratuity Plan are determined by actuarial valuation

Company has shown the amounts payable to In-actives as Current Liability and may show an equal amount as an asset- ‘Amount receivable from the trust against the unpaid benefits’.

9. Previous year figures have been regrouped/ reclassified wherever necessary, to conform to this year’s classification

10. Note 1 to 23 form an integral part of the Balance Sheet and Statement of Profit and Loss and have been duly authenticated.


Mar 31, 2015

C. NOTES

1. (a) Post sanction of Rehabilitation Scheme under the provisions of SICA by BIFR on 21.04.2008, the Company had given full effect of the

scheme from cut off date in the books of accounts assuming that the relief and concessions as given to the company in the scheme would be accepted by all the concerned parties/creditors. (b) BIFR vide its order dated 23.02.2010 discharged the company from the purview of SICA/ BIFR upon turning net worth positive as at 31.03.2009, with the direction that the unimplemented portion of rehabilitation scheme (SS08) for the unexpired period of the Scheme would be implemented by the concerned agencies and their implementation would be monitored by the company. Some of the authorities/parties have not accepted terms of settlement and relief & concessions as provided in SS08. The Company has fled a status report on the unimplemented portion of the Rehabilitation Scheme as at March 31st, 2015 with BIFR on 19/05/2015.

2. Land & Building at Modi Tyre Factory (MTF), Modinagar is on perpetual lease taken from Modi Export Processors Ltd. (MEPL) which has been liquidated by the order of Hon'ble Allahabad High Court. Pursuant to Allahabad High Court Order possession of the MTF is with the Official Liquidator of MEPL. Company has taken appropriate legal recourse for getting possession back of MTF from Official Liquidator for carrying out industrial activities in terms of BIFR Order dated 21.04.2008. After possession, Company shall carry out repair work to make MTF functional at the earliest.

3. (a) Provision for Income Tax is computed in accordance with the provisions of the Income Tax Act, 1961.

(b) Provision for Wealth Tax is computed in accordance with the provision of the Wealth Tax Act, 1957.

(c) Deferred Tax is recognized subject to the consideration of prudence, on timing difference, being the difference between taxable income and accounting income that originate in one period and is capable of reversal in one or more subsequent periods.

4. Expenses and claims relating to previous year adjusted in respective accounts not separately shown are Rs. 5.09 lacs [previous year Rs. 19.30 lacs].

5. The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with Interest paid/payable under this Act, has not been given.

6. The Company's operations comprise only one segment i.e. Automobile Tyres, Tubes & Flaps and therefore there is no other business / geographical segments to be reported as required under Accounting Standard (AS-17) of the The Institute of Chartered Accountants of India.

Provident Fund:

The Employees of the company receive defined contribution for Provident Fund benefit. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employees and the company make monthly contributions at specified percentage of the employee's salary to the concerned Provident Fund Authorities. The company has no liability to Fund the shortfall in the interest over the statutory rate declared by the Government.

The Company has recognized the following amounts in the Statement of Profit and Loss for the year ended 31st March, 2015

7. In accordance with the provisions of the Schedule II of the Companies Act, 2013, in case of assets acquired prior to 1st April, 2014 the carrying value of assets (net of residual value) is depreciated over the remaining useful life as determined effective 1st April, 2014.

8. Previous year figures have been regrouped/rearranged wherever necessary.

9. Note 1 to 24 form an integral part of the Balance Sheet and Statement of Profit and Loss and have been duly authenticated.


Mar 31, 2014

1. SHARE CAPITAL

Terms/Rights attached to Shares

Equity Shares:

Each holder of Equity Share is entitled to one vote per share.

2.Redeemable Cumulative Preference Shares:

Preference Shares shall rank in priority to the Equity Shares including arrears, if any. In the event of the winding up of the Company, these shares shall not be entitled to any further participation in the profits or surplus assets of the company. Preference Shares are entitled to one vote per share at the meetings of the company only in respect of resolutions directly affecting their rights.

3. TRADE PAYABLES

* Includes:-

1. Rs. 136.62 lacs (Previous year Rs. 136.62 lacs) i.e 20% of Rs. 683.10 lacs as per settlement terms defined in BIFR SS08 towards lease rent payable to M/s Modi Exports Processors Ltd. (MEPL) for the period January, 2002 to September, 2007. Further no liability towards lease rent has been provided after September, 2007 since the premises are sealed by the Official Liquidator of MEPL. Legal recourse for re possession of plant is being actively followed. The matter is pending before Allahabad High Court.

2. Rs. 310.71 lacs (Previous year Rs. 310.71 lacs) being 50% of the principal outstanding of Rs. 621.42 lacs due to M/s Continental Carbons Ltd., payable as per settlement term stated in BIFR SS-08 which the party is not accepting and the matter is pending before the Hon''ble Court.

Other Notes

As At As At 31/03/2014 31/03/2013 Rs. Lacs Rs. Lacs

1. Guarantees/Bonds (Unconfirmed) 2393.38 2393.38

2. Excise / Customs / DGFT Matters 2372.00 1853.97

3. Others 3397.75 2776.06

C. NOTES

1. (a) Post sanction of Rehabilitation Scheme under the provisions of SICA by BIFR on 21.04.2008, the Company had given full effect of the scheme from cut off date in the books of accounts assuming that the relief and concessions as given to the company in the scheme would be accepted by all the concerned parties/creditors.

(b) BIFR vide its order dated 23.02.2010 discharged the company from the purview of SICA / BIFR upon turning net worth positive as at 31.03.2009, with the direction that the unimplemented portion of rehabilitation scheme (SS08) for the unexpired period of the Scheme would be implemented by the concerned agencies and their implementation would be monitored by the company. Some of the authorities/ parties have not accepted terms of settlement and relief & concessions as provided in SS08. The Company has filed a status report on the unimplemented portion of the Rehabilitation Scheme as at March 31st, 2014 with BIFR on 26/05/2014.

2. Land & Building at Modi Tyre Factory (MTF), Modinagar is on perpetual lease taken from Modi Export Processors Ltd. (MEPL) which has been liquidated by the order of Hon''ble Allahabad High Court. Pursuant to Allahabad High Court Order possession of the MTF is with the Official Liquidator of MEPL. Company has taken appropriate legal recourse for getting possession back of MTF from Official Liquidator for carrying out industrial activities in terms of BIFR Order dated 21.04.2008. After possession, Company shall carry out repair work to make MTF functional at the earliest.

3. (a) Provision for Income Tax is computed in accordance with the provisions of the Income Tax Act, 1961.

(b) Provision for Wealth Tax is computed in accordance with the provision of the Wealth Tax Act, 1957.

(c) Deferred Tax is recognized subject to the consideration of prudence, on timing difference, being the difference between taxable income and accounting income that originate in one period and is capable of reversal in one or more subsequent periods.

4. Expenses and claims relating to previous year adjusted in respective accounts not separately shown are Rs. 19.30 lacs [previous year Rs. 17.32 lacs].

5. The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with Interest paid/payable under this Act, has not been given.

6. The Company''s operations comprise only one segment i.e. Automobile Tyres, Tubes & Flaps and therefore there is no other business / geographical segments to be reported as required under Accounting Standard (AS-17) of the The Institute of Chartered Accountants of India.

C) Key Management Personnel:

1 Mr. Alok Kumar Modi-Managing Director (No remuneration to Key Management Personnel during the year)

D) Relatives of Key Management Personnel

1 Mr. Vinay Kumar Modi (Father of Mr. Alok Kumar Modi) 2 Mrs. Chander Bala Modi (Mother of Mr. Alok Kumar Modi) 3 Mrs. Archana Singhania (Sister of Mr. Alok Kumar Modi) 4 Mrs. Ritika Modi (Wife of Mr. Alok Kumar Modi) 5 Ms. Piya Modi (Daughter of Mr. Alok Kumar Modi)

E) Enterprises in which relatives of Key Management Personnel has significant influence

1 Leaf Investment Pvt. Ltd. 2 Mod Fashions and Securities Pvt. Ltd. 3 Uniglobe Mod Travels Pvt. Ltd. 4 Uniglobe Travel (South Asia) Pvt. Ltd. 5 Vinura Beverages Pvt. Ltd.

7. Due to non availability of technical evaluation of the plant at Modinagar, the value of intangible assets and value of impairment loss on assets as per Accounting Standard 26 and 28 respectively, issued by the Institute of Chartered Accountants of India, has not been ascertained.

8. The company adopted Accounting Standard 15 (Revised) issued by The Institute of Chartered Accountants of India.

Contribution for Employees Benefit :

Defined Contribution Plans

a. Provident Fund

b. State Defined Contribution Plans

*Employees Pension Scheme 1995

Provident Fund:

The Employees of the company receive defined contribution for Provident Fund benefit. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employees and the company make monthly contributions at specified percentage of the employee''s salary to the Provident Fund Trust and / or the concerned Provident Fund Authorities. The company has no liability to Fund the shortfall in the interest over the statutory rate declared by the Government.

Defined benefit plans Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme of Gratuity Fund Trust, administered and managed by the Independent Board of Trustees. The sections of the Company first makes the payment to vested employees at retirement, death, incapacitation or termination of employment of an amount based on the respective employee''s salary and the tenure of employment and then gets the reimbursement from it. Vesting occurs upon completion of five years of service. Liabilities with regards to the Gratuity Plan are determined by actuarial valuation.

9. a) Previous year/period figures have been regrouped/rearranged wherever necessary.

b) Current year is of 12 months and previous period is of 18 months. Hence, current year figures are not comparable with those of previous period figures.

10. Note 1 to 24 form an integral part of the Balance Sheet and Statement of Profit and Loss and have been duly authenticated.


Mar 31, 2013

As At As At 31.03.2013 30.09.2011 Rs. Lacs Rs. Lacs

1. Guarantees (Unconfrmed) 2393.38 470.38

2. Excise /Customs /DGFT Matters 1853.97 2815.19

3. Others 2776.06 356.17

1. Hon''ble BIFR vide its order dated 21.04.2008 has sanctioned a Rehabilitation Scheme (SS08) for revival of the Company, from the cut off date i.e March 31, 2008, under the provisions of Sick Industrial Companies (Special Provisions) Act 1985 (SICA) for implementation from 1st April 2008 to 31st March 2013 . On 31st March 2008, Company had given full fnancial implications (including writing off of excess liabilities) in the Books of accounts of company with effect from cut off date in terms of the SS08 for giving true and fair view of fnancial health of the company assuming/ considering relief & concessions as directed by the Learned BIFR would be given / accepted / considered by all the concerned parties as per rehabilitation scheme sanctioned by the Learned BIFR.

BIFR vide its order dated 23.02.2010 discharged the company from the purview of SICA/ BIFR upon turning networth positive as at 31.03.2009, with the direction that the unimplemented portion of rehabilitation scheme (SS08) for the unexpired period of the Scheme would be implemented by the concerned agencies and their implementation would be monitored by the company. Some of the authorities/ parties have not accepted terms of settlement and relief & concessions as provided in SS08. The Company has fled a status report on the unimplemented portion of the Rehabilitation Scheme as at March 31st, 2013 with BIFR on 01/04/2013.

2. (a) Land & Building at Modi Tyre Factory (MTF), Modinagar is on perpetual lease taken from Modi Export Processors Ltd. (MEPL) which has been liquidated by the order of Hon''ble Allahabad High Court. Pursuant to Allahabad High Court Order possession of the MTF is with the Offcial Liquidator of MEPL. Company has taken appropriate legal recourse for getting possession back of MTF from Offcial Liquidator for carrying out industrial activities in terms of BIFR Order dated 21.04.2008. After possession, Company shall carry out repair work to make MTF functional at the earliest. (b) Hon''ble Allahabad High Court had ordered for the physical verifcation of the assets lying at Modi Tyre Factory (MTF) Modinagar. Accordingly, physical verifcation was conducted in presence of offcial liquidator on 24/08/2011 and 25/08/2011. Assets were valued by the surveyor. On the basis of such verifcation, necessary adjustment in the inventories lying at MTF plant has been carried out in the books of accounts except the value of scrap which will be accounted for on realization.

3. (a) Provision for Income Tax is computed in accordance with the provisions of the Income Tax Act, 1961.

(b) Provision for Wealth Tax is computed in accordance with the provision of the Wealth Tax Act, 1957.

(c) Deferred Tax is recognized subject to the consideration of prudence, on timing difference, being the difference between taxable income and accounting income that originate in one period and is capable of reversal in one or more subsequent periods.

4. Expenses and claims relating to previous year adjusted in respective accounts not separately shown are Rs. 17.32 l acs [previous year Rs.12.00 lacs].

5. The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with Interest paid/payable under this Act, has not been given.

6. The balances of the suppliers, customers & advances etc. are subject to confrmation / reconciliation.

7. Due to non availability of technical evaluation of the plant at Modinagar, the value of intangible assets and value of impairment loss on assets as per Accounting Standard 26 and 28 respectively, issued by the Institute of Chartered Accountants of India, has not been ascertained.

8. The company adopted Accounting Standard 15 (Revised) issued by The Institute of Chartered Accountants of India. Contribution for Employees Beneft :

Defned Contribution Plans

a. Provident Fund

b. State Defned Contribution Plans - Employees Pension Scheme 1995

Provident Fund:

The Employees of the company receive defned contribution for Provident Fund beneft. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employees and the company make monthly

9. During the year ended 31/03/2013, the revised Schedule VI notifed under the Companies Act, 1956 has become applicable to the company for preparation and presentation of its fnancial statements. The adoption of revised Schedule VI did not have any impact on recognition and measurement principles followed for preparation of fnancial statements. However, it has signifcantly impacted the presentation and disclosures made in the fnancial statements. The company has also reclassifed/regrouped the previous year fgures in accordance with the requirements applicable in the current year.

10. Note 1 to 25 form an integral part of the Balance Sheet and Statement of Proft and Loss and have been duly authenticated.


Sep 30, 2011

A. CONTINGENT LIABILITIES

As at As at 30.09.2011 31.03.2010 Rs. Lacs Rs. Lacs

1. Guarantees (Unconfirmed) 470.38 11555.46

2. Sales Tax Matters NIL 2221.30

3. Excise/Customs/DGFT Matters 2815.19 1657.90

4. Others 356.17 337.06

C. NOTES

1. Hon'ble BIFR vide its order dated 21.04.2008 has sanctioned a Rehabilitation Scheme (SS08) for revival of the Company, from the cut off date i.e March 31, 2008, under the provisions of Sick Industrial Companies (Special Provisions) Act 1985 (SICA) for implementation from 1af April 2008 to 31" March 2013 . On 31st March 2008, Company had given full financial implications and excess liabilities were written off from the Books of accounts of company with effect from cut off date in terms of the SS08 for giving true and fair view of financial health of the company assuming/ considering relief & concessions as directed by the Learned BIFR would be given / accepted / considered by all the concerned parties as per rehabilitation scheme sanctioned by the Learned BIFR.

BIFR vide its order dated 23.02.2010 discharged the company from the purview of SICA/ BIFR upon turning networth positive as at 31.03.2009, with the direction that the unimplemented portion of rehabilitation scheme (SS08) for the unexpired period of the Scheme would be Implemented by the concerned agencies and their implementation would be monitored by the company. Some of the authorities/ parties have not accepted terms of settlement and relief & concessions as provided in SS08.

2. (a) Land & Building at Modi Tyre Factory (MTF), Modinagar is on perpetual lease taken from Modi Export Processors Ltd. (MEPL) which has been liquidated by the order of Hon'ble Allahabad High Court. Pursuant to Allahabad High Court Order possession of the MTF is with the Official Liquidator of MEPL. Company has taken appropriate legal recourse for getting possession back of MTF from Official Liquidator for carrying out industrial activities in terms of BIFR Order dated 21,04.2008.After possession, MRL shall carry out repair work to make MTF functional at the earliest. In view of the above, operations at MTF plant, however, continue to remain suspended, (b) Hon'ble Allahabad High Court had ordered for the physical verification of the assets lying at Modi Tyre Factory (MTF) Modinagar. Accordingly, physical verification was conducted in presence of official liquidator on 24/08/2011 and 25/08/2011. Assets were valued by the surveyor. On the basis of such verification, necessary adjustment in the inventories lying at MTF plant has been carried out in the books of account except the value of scrap which will be accounted for on realization.'

3. Amount due from Modi Spinning & Weaving Mills Company Ltd. (MSWML) (Rs. 460.31 lacs Net) includes Rs. 349.61 lacs appropriated by Punjab National Bank in the year 1992-93 towards the outstanding loan and interest payable by MSWML. The company has filed a suit against MSWML for recovery of amount which is pending before the Delhi High Court for adjudication. .

4. (a) Provision for Income Tax is computed in accordance with the provisions of the Income Tax Act, 1961.

(b) Provision for Wealth Tax is computed in accordance with the provision of the Wealth Tax Act, 1957.

(c) Deferred Tax is recognized subject to the consideration of prudence, on timing difference, being the difference between taxable income and accounting income that originate in one period and is capable of reversal in one or more subsequent periods.

5. (a) Sundry creditors include Rs. 136.62 lacs (20% of Rs. 683.10 lacs as per settlement terms defined in BIFR SS08) towards lease rent payable to M/s Modi Exports Processors Ltd.(MEPL) for the period January, 2002 to September, 2007. Further no liability towards lease rent has been provided after September, 2007 since the premises are sealed by the Official Liquidator of MEPL.

(b) Sundry creditors also include Rs. 136.73 lacs payable to M/s Madura Coats Limited, Rs. 310.71 lacs to M/s Continental Carbons Limited totaling to Rs. 447.44 lacs (being 50% of their principal outstanding of Rs. 894.88 lacs) as per settlement term stated in BIFR SS-08 which they are not accepting and their appeals are pending in courts. However Allahabad High Court vide its order dated 16.11.2011 directed the Company to pay Rs. 150 lacs to M/s Madura Coats Limited or a cheque of the said amount may be produced before the Hon'ble court. Next hearing is fixed on 15.12.2011.

6. Expenses and claims relating to previous year adjusted in respective accounts not separately shown are Rs. 12.00 lacs [previous year Rs. 14.09 lacs].

7. The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the period end together with interest paid / payable under this Act, has not been given.

8. The balances of the suppliers, customers & advances etc. are subject to confirmation / reconciliation.

9. During the year, the company has implemented Accounting Standard 22 - "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India. The company recognized the cumulative net deferred tax asset of Rs. 1570.86 Lacs upto the year ended 31st March' 2010 and a deferred tax liability of Rs. 101.97 Lacs for the period ended 30th September' 2011 as per the provisions of such Accounting Standard.

10. The Company's operations comprise only one segment i.e. Automobile Tyres, Tubes & Flaps and therefore there is no other business / geographical segments to be reported as required under Accounting Standard (AS-17) of the The Institute of Chartered Accountants of India.

11. Due to non availability of technical evaluation of the plant at Modinagar, the value of intangible assets and value of impairment loss on assets as per Accounting Standard 26 and 28 respectively, issued by the Institute of Chartered Accountants of India, has not been ascertained.

12. The company adopted Accounting Standard 15 (Revised) issued by The Institute of Chartered Accountants of India.

Contribution for Employees Benefit:

Defined Contribution Plans

a. Provident Fund

b. State Defined Contribution Plans

- Employees Pension Scheme 1995 Provident Fund:

The Employees of the company receive defined contribution for Provident Fund benefit. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employees and the company make monthly contributions at specified percentage of the employee's salary to the Provident Fund Trust and / or the concerned Provident Fund Authorities. The company has no liability to Fund the shortfall in the interest over the statutory rate declared by the Government.

The Company has recognized the following amounts in the Profit and Loss for the period ended 30th September, 2011.

Defined benefit plans Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme of Gratuity Fund Trust, administered and managed by the Independent Board of Trustees. The sections of the Company first makes the payment to vested employees at retirement, death, incapacitation or termination of employment of an amount based on the respective employee's salary and the tenure of employment and then gets the reimbursement from it. Vesting occurs upon completion of five years of service. Liabilities with regards to the Gratuity Plan are determined by actuarial valuation.

13. a) Previous year figures have been regrouped/ rearranged wherever necessary.

b) The Current financial period is for 18 months whereas the previous year is for 12 months. The previous year figures are, therefore not comparable with those of the current financial period.

14. Schedules 1 to 13 form an integral part of the Balance Sheet and Profit & Loss Account and have been duly authenticated.


Mar 31, 2010

A. CONTINGENT LIABILITIES As at As at

31.03.2010 31.03.2009

Rs. Lacs. Rs. Lacs.

1. Guarantees (Unconfirmed) 11555.46 813.61

2. Sales Tax Matters 2221.30 3205.26

3. Excise / Customs Matters 1657.90 1631.92

4. Others 337.06 NIL

B. NOTES

1. Honble BIFR vide its order dated 21.04.2008 has sanctioned a Rehabilitation Scheme (SS08) for revival of the Company, from the cut off date i.e March 31,2008, under the provisions of Sick Industrial Companies (Special Provisions) Act 1985 (SICA) for implementation from 1sl April 2008 to 31s1 March 2013 . On 31s1 March 2008, Company had given full financial implications and excess liabilities were written off from the Books of accounts of company with effect from cut off date in terms of the SS08 for giving true and fair view of financial health of the company assuming/ considering relief & concessions as directed by the Learned BIFR would be given / accepted/ considered by all the concerned parties as per rehabilitation scheme sanctioned by the Learned BIFR.

BIFR vide its order dated 23.02.2010 discharged the company from the purview of SICA/ BIFR upon turning networth positive as at 31.03.2009, with the direction that the unimplemented provisions of rehabilitation scheme (SS08) for the unexpired period of the Scheme would be Implemented by the concerned agencies and their implementation would be monitored by the company. Appeals against the said discharge order of BIFR has been filed and are pending in the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) for adjudication. Whereas, in fact some of the authorities / parties have not accepted terms of settlement and relief & concessions as provided in SS08.

2. Land & Building at Modi Tyre Factory (MTF), Modinagar is on perpetual lease taken from Modi Export Processors Ltd. (MEPL) which has been liquidated by the order of Honble Allahabad High Court. Pursuant to Allahabad High Court Order possession of the MTF is with the Official Liquidator of MEPL. Company has taken appropriate legal recourse for getting possession back of MTF from Official Liquidator for carrying out industrial activities in terms of BIFR Order dated 21.04.2008. After possession, MRL shall carryout repair work to make MTF functional at the earliest. In view of the above, operation at MTF plant, however, continue to remain suspended.

3. Amount due from Modi Spinning & Weaving Mills Company Ltd. (MSWML) (Rs. 460.31 lacs Net) includes Rs. 349.61 lacs appropriated by Punjab National Bank in the year 1992-93 towards the outstanding loan and interest payable by MSWML. The company has filed a suit against MSWML for recovery of amount which is pending before the Delhi High Court for adjudication.

4. (a) No provision for taxation for the year ended 31s March 2010 is required to be made since there is no taxable income due to unabsorbed depreciation and brought forward losses.

(b) Provision for Wealth Tax is computed in accordance with the provision of the Wealth Tax Act, 1957.

(c) In terms of Accounting Standard (AS-22) on accounting for Taxation of Income issued by the Institute of Chartered Accountants of India, the Company has not recognised the Deferred Tax Assets/Liability due to uncertainty of future profitability.

5. (a) Sundry creditors include Rs. 136.62 lacs (20% of Rs. 683.10 lacs as per settlement terms defined in BIFR SS08) towards lease rent payable to M/s Modi Exports Processors Ltd.(MEPL) for the period January, 2002 to September, 2007. Further no liability towards lease rent has been provided after September, 2007 since the premises are sealed by the Official Liquidator of MEPL.

(b) Sundry creditors also include Rs. 82.04 lacs payable to M/s Madura Coats Limited, Rs. 186.42 lacs to M/s Continental Carbons Limited and Rs. 23.91 lacs to M/s Oriental Carbon and Chemicals Limited totaling to Rs. 292.37 lacs (being 30% of Rs. 974.58 lacs) as per settlement term stated in BIFR SS-08.

6. Expenses and claims relating to previous year adjusted in respective accounts not separately shown are Rs. 14.09 lacs [previous year Rs. 1.36 lacs].

7. The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid / payable under this Act, has not been given.

8. The Companys operations comprise only one segment i.e. Automobile Tyres, Tubes & Flaps and therefore there is no other business/ geographical segments to be reported as required under Accounting Standard (AS-17) of the The Institute of Chartered Accountants of India.

9. Related Parties Disclosures in accordance with Accounting Standard (AS - 18) of The Institute of Chartered Accountants of India.

B) Key Management Personnel:

Mr. Vinay Kumar Modi- Chairman & Managing Director

Mr. Alok Kumar Modi-Director

(No remuneration to Key Management Personnel during the year)

10. Due to suspension of manufacturing operations, the value of intangible assets and value of impairment loss on assets as per Accounting Standard 26 and 28 respectively, issued by the Institute of Chartered Accountants of India, has not been ascertained.

11. The company adopted Accounting Standard 15 (Revised) issued by The Institute of Chartered Accountants of India. Contribution for Employees Benefit:

Defined Contribution Plans

a. Provident Fund

b. State Defined Contribution Plans

- Employees Pension Scheme 1995

Provident Fund:

The Employees of the company receive defined contribution for Provident Fund benefit. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employees and the company make monthly contributions at specified percentage of the employees salary to the Provident Fund Trust and / or the concerned Provident Fund Authorities. The company has no liability to Fund the shortfall in the interest over the statutory rate declared by the Government.

Defined benefit plans

Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme of Gratuity Fund Trust, administered and managed by the Independent Board of Trustees. The sections of the Company first makes the payment to vested employees at retirement, death, incapacitation or termination of employment of an amount based on the respective employees salary and the tenure of employment and then gets the reimbursement from it. Vesting occurs upon completion of five years of service. Liabilities with regards to the Gratuity Plan are determined by actuarial valuation.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market The above information is certified by the actuary. The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Companys policy for plan assets management

Notes :

i) Licenced capacity not applicable - since delicenced.

ii) Figures in brackets are in respect of previous year.

* As certified by the management.

** Balancing figure/stock adjustment.

*** Net of purchase return.

# Including conversion from outside.

Generic Names of Principal Products/Services of Company

(As per monetary terms)

Item Code No. (ITC Code) Product Description

40112000 Automobile Tyres

40131002 Automobile Tubes

40129004 Automobile Flaps

12. Previous year figures have been regrouped/rearranged wherever necessary.

13. Schedules 1 to 13 form an integral part of the Balance Sheet and Profit & Loss Account and have been duly authenticated.

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