MOHIT INDUSTRIES LIMITED
Your Directors have pleasure in presenting the 27th annual Report of the companytogether with the Audited Financial Statements for the year ended 31st3March 2017.
|FINANCIAL RESULT AND PERFORMANCE: || || || |
(3 in Lakhs except EPS)
| || |
|PARTICULARS || || || || |
| ||31/03/2017 ||31/03/2016 ||31/03/2017 ||31/03/2016 |
|Sales ||15333.29 ||13616.25 ||15353.90 ||13629.96 |
|Other income ||151.30 ||147.22 ||150.84 ||147.17 |
|Profit Before Interest & Depreciation ||1256.55 ||1349.03 ||1258.46 ||1348.61 |
|(-)Finance Cost ||698.96 ||663.96 ||700.83 ||664.43 |
|(-) Depreciation ||418.58 ||395.71 ||418.58 ||395.71 |
|Net Profit before tax & Exceptional items ||139.01 ||289.36 ||139.05 ||288.47 |
|(+)Exceptional Items ||5.89 ||24.25 ||5.89 ||24.25 |
|Net Profit Before Tax ||144.90 ||313.62 ||144.94 ||312.72 |
|(+) Prior period item ||11.63 ||- ||11.63 ||- |
|(-) Tax Expense ||2.34 ||96.06 ||2.35 ||96.06 |
|Share in Profit of Associates & Minority Interest ||- ||- ||27.04 ||0.78 |
|Net Profit for the year after tax ||154.20 ||217.56 ||181.27 ||217.44 |
|Earnings per share (Basic & Diluted) (In 3) ||1.09 ||1.54 ||1.28 ||1.54 |
With a view to conserve the resources for the company's Business operations yourdirectors have deemed it prudent to not to recommend any dividend for the year ended 31stMarch 2017. During the year under review no amount from profit was transferred toGeneral Reserve.
2. SHARE CAPITAL
The Paid up equity share capital as on March 31 2017 was 3 1415.76 lakhs divided into14157575 equity shares of 3 10 each. During the year under review the Company hasneither issued any shares/convertible warrant nor has granted any stock options and norsweat equity.
3. STATE OF THE COMPANY'S AFFAIRS
During the year under review your Company has recorded its revenue from operations as3 15333.29 lakhs against revenue recorded of 3 13616.25 lakhs in the previous year. TheEBIDT recorded at 3 1256.55 lakhs against last year's 3gure of 3 1349.03 lakhs. Netprofit after tax is 3 154.20 lakhs. Your company has 17 Texturising Machines 150 HighSpeed Shuttle-less Looms and 144 Conventional Shuttle Looms with a capacity to manufacture22000 tonnes of Draw Texturised Yarn (DTY) per annum and 12 Million meters Grey fabricsper annum respectively.
The Company has exported DTY Yarn with a Premium and in its Brand Name to ThailandCzech Republic Denmark Germany Bulgaria Indonesia United Kingdo Mexico BrazilGuatemala Vietnam South Korea Turkey Algeria and many more Countries. The Company ishaving Export House Status. During the year under review your Company has recorded exportof 3 7174 lakhs as compared to 3 5584 lakhs in previous year. Your company also holdsCertificate of Oeko-Tex Standard 100.
5. EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3) (a) of the Companies Act 2013 an extract of theannual return in the prescribed format is annexed as Annexure- 1 to the Director's Report.
6. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of Mohit Industries Limited its subsidiariesand its associates is prepared in accordance with AS- 21 on Consolidated Financialstatements and Equity method of accounting given in AS - 23 on "Accounting ofInvestments in Associates in Consolidated Financial statements". The details of suchsubsidiary and associates are as follows:-
|Sr. No. ||Name of company ||Nature of relation |
|1. ||Maxum Metals Private Limited ||Subsidiary |
|2. ||Mohit Overseas Limited ||Associates |
|3. ||Mohit Yarns Limited ||Associates |
|4. ||Mohit E-waste Recovery Private Limited ||Associates |
7. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATESAND JOINT VENTURE COMPANIES
The Company has one subsidiary as on March 31 2017. There are three associatecompanies within the meaning of Section 2(6) of the Companies Act 2013 ("Act")as on 31st March 2017. Pursuant to provisions of Section 129(3) of the Companies Act2013 read with Rule 5 of the Companies (Accounts) Rules 2014 a statement containingsalient features of the financial statements of the Company's subsidiaries/ AssociateCompanies and Joint Ventures is given in Form AOC-1 and forms an integral part of thisAnnual Report.
8. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS REPORT
As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate section on corporate governancepractices followed by the Company together with a certificate from Mr. Dhiren DaveCompany Secretary in practice confirming compliance and Management Discussion AnalysisReport forms an integral part of this Annual Report.
9. FIXED DEPOSITS
During the year under review the company has not accepted any deposits within themeaning of section 73 of the Companies Act 2013 and the rules made there under.
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Mr. Naresh Saboo Director (DIN: 00223350) will retireby rotation at the ensuing Annual General Meeting and being eligible has offered himselffor re-appointment. The details of the aforesaid Directors his expertise in variousfunctional areas as required to be disclosed under Regulation 36 (3) of the ListingRegulations form part of the Notice of the ensuing Annual General Meeting. During thefinancial year Mr. Harmil Shah was appointed as Independent Director of the company forperiod of five years w.e.f 23.08.2016 and Mr. Dharmesh Patel has resigned from thedirectorship w.e.f 12.09.2016.
11. DECLARATION FROM INDEPENDENT DIRECTORS
The Independent Directors have submitted their declaration to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013read with rules framed thereunder.
12. BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has carried out theannual performance evaluation of its own performance the Directors individually as wellas the evaluation of Committees. The performance of the Board / Committee was evaluatedafter seeking inputs from all the Directors / Committee members on the basis of thedefined criteria including composition and structure effectiveness of meetingsinformation and functioning. Performance evaluation of Independent Directors was done bythe entire Board excluding the Independent Director being evaluated on the basis ofrelevant knowledge expertise experience devotion of time and attention to company'slong term strategic issues and understanding of duties roles and function as IndependentDirector. The Directors expressed their satisfaction with the evaluation process.
13. NUMBER OF MEETINGS HELD
The Board met six times during the financial year the details of which are given inthe Corporate Governance Report that forms part of this Annual Report. The intervening gapbetween any two meetings was within the period prescribed by the Companies Act 2013 andthe Listing Regulations.
14. POLICY ON DIRECTOR'S APPOINTMENT REMUNERATION INCLUDING CRITERIA FOR DETERMININGQUALIFICATIONS POSITIVE ATTRIBUTES INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration including criteria for determining qualifications positive attributes andother matters provided under sub section (3) of section 178 of the Companies Act 2013. TheCompany's Remuneration Policy for Directors Key Managerial Personnel and other employeesis annexed as Annexure- 2 to the Director's Report and also available on Company's websitewww.mohitindustries.com.
15. VIGIL MECHANISM / WHISTLE BLOWER POLICY
In order to ensure that the activities of the Company and its employees are conductedin a fair and transparent manner by adoption of highest standards of professionalismhonesty integrity and ethical behavior the Company has adopted a Vigil mechanism/Whistle Blower Policy. This policy is also posted on the Company's websitewww.mohitindustries.com.
16. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company has formulated a familiarization program for the Independent Directors toprovide insights into the Company to enable the Independent Directors to understand itsbusiness in depth and contribute significantly to the Company. The details of such programare available on the Company's website www.mohitindustries.com.
17. COMPOSITION OF KEY MANAGERIAL PERSONNEL (KMP)
The Company has the following KMP;
|Name of KMP ||Designation ||Date of Appointment in current Designation ||Date of Resignation |
|Mr. Narayan Saboo ||Managing Director ||28/09/2015 ||N.A |
|Mr. Manish Saboo ||Director & CFO ||30/05/2014 ||N.A |
|Miss. Swati Malu ||Company Secretary ||17/12/2012 ||N.A |
18. COMPOSITION OF AUDIT AND NOMINATION & REMUNERATION COMMITTEE
The Audit Committee comprises of Mr. Sachin Jain (Chairman) Mr. Jayesh Gandhi (Member)and Mr. Narayan Saboo (Member). The Nomination and Remuneration Committee comprises of Mr.Sachin Jain (Chairman) Mr. Jayesh Gandhi (Member) and Mrs. Pragya Memani (Member). Briefdetails on the committee are given in the Corporate Governance Report. All therecommendations of the audit committee are accepted by the Board.
19. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act 2013 that: a) in the preparation of the annual accountsfor the year ended 31st March 2017 the applicable accounting standards have beenfollowed along with proper explanation relating to material departures; the annualaccounts have been prepared in compliance with the provisions of the Companies Act 2013 b)the directors have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for year ended on that date; c) the directors have takenproper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; d) the directors haveprepared the annual accounts on a going concern basis; and e) the directors havelaid down internal financial controls to be followed by the Company and that such internalfinancial controls are adequate and are operating effectively; f) the directorshave devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems are adequate and operating effectively.
20. STATUTORY AUDITORS
In terms of Section 139(1) of the Companies Act 2013 no listed company canappoint or re-appoint an audit firm (including its a3liate firm) as auditor for more thantwo terms of five consecutive years. The Act also provided for additional transitionperiod of three years from the commencement of the Act i.e. from April 1 2014. M/s. RKM& Co. Chartered Accountants having Registration No. 108553W are Statutory Auditorsof the Company since 1991. Accordingly M/s. RKM & Co. Chartered Accountants havecompleted period of ten years and will also be completing the additional transition periodof three years at the conclusion of ensuing 27th Annual General Meeting and now companyneed to comply with the requirements of mandatory rotation of existing auditor.
The Board of Directors of your Company on the basis of recommendation of the AuditCommittee has recommended the appointment of M/s. Rajendra Sharma & AssociatesChartered Accountants (FRN: 108390W) as the Statutory Auditors of the Company for a termof five consecutive years from conclusion of the 27th Annual General Meeting of theCompany upto the conclusion of the 32nd Annual General Meeting of the Company and in thisconnection resolution seeking member's approval forms part of the Notice convening the27th Annual General Meeting of the Company. M/s. Rajendra Sharma & AssociatesChartered Accountants (FRN: 108390W) have submitted a certificate to your Company statingthat their appointment if made shall be within the limits prescribed under the CompaniesAct 2013 and that they satisfy the criteria prescribed under Section 141 of the CompaniesAct 2013.
Members' attention is invited to the observation made by the Auditors under"Qualified Opinion" appearing in Auditors Reports.:
The Company has not provided for Long Term Employee Benefits such as Gratuity and LeaveEncashment on accrual basis but provides the same as and when they become due for payment.This method of accounting of Long Term Employee Benefits is in deviation with AccountingStandard-15 on Employee Benefits in respect of provision for Long Term Employee Benefit& Defined Benefit plans. As there is no actuarial report or basis of calculationavailable with the management of such long term employee benefits the quantum ofdeviation cannot be determined. If the company had followed the method accounting as perAS 15 then employee benefit expense would have increased and correspondingly longterm provision would have also increased for such employee benefits.
"The Board is of the opinion that the Provision for the Long term Employees aredetermined on the basis of actuarial Valuation Method & technique prescribed in theAccounting Standard. The Consulting fees by actuaries for determining the Provision forlong term benefit Plan is even higher than the Annual Liability of the company for Longterm benefits. The company has decided to pay the Long term benefits as and when itbecomes due as the amount is negligible and it is not going to make any impact on thefinancial Position of the company. Considering the size of the company and negligibleliability the company has not made provisions for Long term employee benefits &Defined benefits plan" Members' attention is invited to the observation made by theAuditors under "Emphasis of matter" appearing in Auditors Reports.: Attention tonote No. 27(i) on "Contingent Liabilities" forming part of financialstatements which describes various tax demands liabilities against the Company underlitigation if decided against the company may have an adverse effect on the functioningof the company"
"The Board is of the opinion that Pursuant to Order dated 13.08.2015 of theGujarat Value Added Tax Tribunal at Ahmedabad Gujarat Vat demand pending before GujaratVAT Department has been decided in the Company's favour. This will absolves the contingentliabilities of company related to Gujarat VAT (Tax and Penalty) pending before the GujaratValue Added Tax Tribunal on year to year basis. Pursuant to said order of Gujarat ValueAdded Tax Tribunal demands relating to Gujarat Entry Tax is also as similar as to case ofGujarat Vat Demand. For demand relating to Excise duty/excise rebates rejected pending atappellate stages Board is of view that the demand raised is not sustainable.
21. COST AUDITOR
The Board of Directors on the recommendation of Audit Committee has appointed M/s.Pasari & Associates Cost Accountants (Firm Registration Number 100928) as CostAuditor to conduct the audit of company's cost records for the financial year 2017-18 at aremuneration of 3 60000/- (Rupees Sixty Thousands only) plus applicable service tax andreimbursement of out of pocket expenses. As required under the Companies Act 2013 theremuneration of Cost Auditors as approved by the Board of Directors is subject torati3cation by the shareholders at the ensuing Annual General Meeting and in thisconnection resolution seeking member's approval forms part of the Notice convening the27th Annual General Meeting.
22. SECRETARIAL AUDIT
Mr. Dhiren R Dave Surat Practising Company Secretaries were appointed to conduct thesecretarial audit of the Company for the financial year 2016-17 as required under Section204 of the Companies Act 2013 read with rules framed there under. The Secretarial AuditReport for F.Y 2016-17 is annexed as Annexure-3 to the Director's Report. There is nosecretarial audit qualification for the year under review.
23. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE
Loans Guarantees and Investments covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.
24. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All transactions entered with Related Parties for the year under review were on arm'slength basis and in the ordinary course of business and that the provisions of Section 188of the Companies Act 2013 and the Rules made thereunder are not attracted. Thusdisclosure in form AOC-2 in terms of Section 134 of the Companies Act 2013 is notrequired. Further there are no material related party transactions during the year underreview with the Promoters Directors or Key Managerial Personnel. The transactions withrelated parties as per requirements of Accounting Standard (AS-18) RelatedParty Disclosures' are disclosed in Note No. 36 of Notes to Accounts. All Related PartyTransactions are placed before the Audit Committee as also to the Board for approval.Omnibus approval was obtained for transactions which are of repetitive nature. The policyon materiality of Related Party Transactions as approved by the Board of Directors hasbeen uploaded on the website of the Company. The web-link of the same has been provided inthe Corporate Governance Report. None of the Directors/KMP has any pecuniary relationshipor transactions vis--vis the Company.
25. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board formally adopted steps forframing implementing and monitoring the risk management plan for the Company by way ofRisk Management Policy. The main objective of this policy is to ensure sustainablebusiness growth with stability and to promote a pro-active approach in reportingevaluating and mitigating risks associated with the business. The policy establishes astructured and disciplined approach to Risk Management in order to guide decisions onrisk related issues. In today's challenging and competitive environment strategies formitigating inherent risks associated with business and for accomplishing the growth plansof the Company are imperative. The common risks inter alia are risks emanating from;Regulations Competition Business Technology obsolescence Investments retention oftalent finance politics and 3delity. As a matter of policy these risks are assessed andsteps as appropriate are taken to mitigate the same. The Risk Management Policy is alsohosted on the Company's website www.mohitindustries.com.
26. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT
There are no material changes or commitments affecting the financial position of theCompany which have occurred between the end of the financial year and the date of thisReport. However the company has received 3 8.5 crores as Vat refund on 19.05.2017 inreference to case for Gujarat Vat Demand before Gujarat Value Added Tribunal that has beendecided in company's favour vide Gujarat VAT tribunal order dated 13.08.2015 and TheHon'ble Gujarat high Court order dated 09.01.2017 directed to Gujarat Vat department forrefund of credit due to the company. This will absolve the contingent liability inrelation to Gujarat Vat Demand.
27. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference tofinancial statements. The Company's internal control system is commensurate with its sizescale and complexities of its operations. During the year such controls were tested andno reportable material weaknesses in the design or operation were observed.
The Company's building plant and machineries Stocks and other properties wherevernecessary and to the extent required have been adequately insured.
29. LISTING OF SHARES AND LISTING FEES
The Equity Shares of your Company are listed and actively traded on the BSE Limitedand the National Stock Exchange of India Limited. The Company has paid annual listing feesto the both stock exchanges for the financial year 2017-18.
30. REMUNERATION AND PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Companies Act 2013 read withRule 5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed as Annexure -4 to the Director's Report.
31. INDUSTRIAL RELATIONS
The Company maintained healthy cordial and harmonious industrial relations at alllevels.
32. TRANSFER OF UNPAID/UNCLAIMED AMOUNTS TO IEPF
During the period under review as there were no amount of Unclaimed Dividend andinterest thereon which remained unpaid/ unclaimed for a period of 7 years required to betransferred by the Company to the Investor Education and Protection Fund (IEPF)established by the Central Government pursuant to provision of Section 125 of theCompanies Act 2013.
33. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
As required under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 ofthe Companies (Accounts) Rules 2014 the particulars relating to conservation of energytechnology absorption and foreign exchange earnings and outgo is annexed as Annexure- 5 tothe Director's Report.
34. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013 The Company has an Anti-Sexual Harassment Policy in linewith the requirements of The Sexual Harassment of Women at the Workplace (PreventionProhibition and Redressal) Act 2013. An Internal Complaints Committee (ICC) has been setup to redress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this policy. Your Directors furtherstate that during the year under review No compliant was received from any employeeduring F.Y 2016-17 and hence no complaint is outstanding as on 31st March 2017 forredressal.
35. DETAILS OF SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the year under review there are not any significant or material orderspassed by the Regulators or Courts or tribunals impacting the going concern status andyour Company's operations in future.
The Board of Directors wishes to place on record its appreciation for thecommitment dedication and hard work done by the employees in the Company and thecooperation extended by Banks Government authorities customers and shareholders of theCompany and looks forward to a continued mutual support and co-operation.
| ||For and on behalf of the Board of Directors |
| ||For Mohit Industries Limited |
| ||Sd/- |
|Date : 21.06.2017 || |
| ||(SITARAM SABOO) |
|Place : Surat || |
| ||Chairman |
ANNEXURE-2 TO DIRECTORS' REPORT
NOMINATION AND REMUNERATION POLICY
NOMINATION AND REMUNERATION COMMITTEE
The Board of Directors of Mohit Industries Limited ("the Company")constituted the "Nomination and Remuneration Committee"
The Nomination and Remuneration Committee and this Policy shall be in compliance withSection 178 of the Companies Act 2013 and Regulation 19(4) & Schedule II Part D (A)of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
ROLE OF THE COMMITTEE
The role of the committee will be the following a) To formulate criteria fordetermining qualifications positive attributes and independence of a Director. b) Toformulate criteria for evaluation of Independent Directors and the Board. c) To identifypersons who are qualified to become Directors and who may be appointed in SeniorManagement in accordance with the criteria laid down in this policy. d) To carry outevaluation of Director's performance. e) To recommend to the Board the appointment andremoval of Directors and Senior Management. f) To recommend to the Board policy relatingto remuneration for Directors Key Managerial Personnel and Senior Management. g) Todevise a policy on Board diversity composition size. h) Succession planning forreplacing Key Executives and overseeing. i) To carry out any other function as is mandatedby the Board from time to time and / or enforced by any statutory noti3cation amendmentor modification as may be applicable. j) To perform such other functions as may benecessary or appropriate for the performance of its duties.
Key Managerial Personnel ("KMP") means:
I. Managing Director or Chief Executive Officer or Manager and in their absence aWhole-time Director; II. Chief Financial Officer; III. Company Secretary; and Such otherofficer as may be prescribed.
Senior Managerial Personnel means Personnel of the company who are members of its coremanagement team excluding Board of Directors. Normally this would comprise all members ofmanagement of rank equivalent to General Manager and above including all functionalheads.
The objective of the policy is to ensure that a) the level and composition ofremuneration is reasonable and sufficient to attract retain and motivate directors of thequality required to run the company successfully; b) relationship of remuneration toperformance is clear and meets appropriate performance benchmarks; and c) Remuneration todirectors key managerial personnel and senior management involves a balance between fixedand incentive pay reflecting short and long-term performance objectives appropriate to theworking of the company and its goals.
APPOINTMENT CRITERIA FOR DIRECTOR/KMP AND SENIOR MANAGEMENT a) A person who isproposed to be appointed as a Director and/or Senior Management as a KMP should possessadequate qualification expertise and experience for the position he / she is consideredfor appointment. The Committee has authority to decide whether qualification expertiseand experience possessed by a person are sufficient / satisfactory for the position. b) Aperson shall not be eligible for appointment as a Director of a Company if he standsdisqualified under the provisions mentioned in Section 164 of the Companies Act 2013rules made thereunder SEBI Listing Regulations or any other enactment for the time beingin force. c) The Director shall be appointed as per the procedure laid down under theprovisions of the Companies Act 2013 Rules made thereunder SEBI Listing Regulations orany other enactment for the time being in force. d) Appointment of Independent Director issubject to compliance of provisions of section 149 of the Companies Act 2013 read withschedule IV and Rules made thereunder the Act and SEBI Listing Regulations as amended fromtime to time. e) On appointment to the Board Independent Directors shall have to beissued a formal letter of appointment in accordance with the provisions of the Act and theRules made thereunder. f) Appointment of key Managerial Personnel ("KMP") issubject to compliance of Section 203 of the Companies Act 2013 read with Rules madethereunder the Act (as amended from time to time). g) The appointment of Senior ManagementPersonnel (excluding KMP) will be decided by the Managing Director and their terms ofappointment will be in accordance with the company policy.
TERM / TENURE OF APPOINTMENT FOR DIRECTORS/KMP AND SENIOR MANAGEMENT a) ManagingDirector/Whole-time Director:
The Company shall appoint or re-appoint any person as its Managing Director or WholeTime Director for a term not exceeding five years at a time. No re-appointment shall bemade earlier than one year before the expiry of term. The Company shall not appoint orcontinue the employment of any person as Managing Director or Whole-time Director who hasattained the age of seventy years. Provided that the term of the person holding thisposition may be extended beyond the age of seventy years with the approval of shareholdersby passing a special resolution.
b) Independent Director:
An Independent Director shall hold office for a term up to five consecutive years onthe Board of the Company and will be eligible for re-appointment on passing of a specialresolution by the Company and disclosure of such appointment in the Board's report.
No Independent Director shall hold office for more than two consecutive terms of uptomaximum of 5 years each but such Independent Director shall be eligible for appointmentafter expiry of three years of ceasing to become an Independent Director.
Provided that an Independent Director shall not during the said period of three yearsbe appointed in or be associated with the Company in any other capacity either directlyor indirectly.
At the time of appointment of Independent Director it should be ensured that number ofBoards on which such Independent Director serves is restricted to seven listed companiesas an Independent Director and three listed companies as an Independent Director in casesuch person is serving as a Whole-time Director of a listed company or such other numberas may be prescribed under the Act.
c) Senior Management
In case of Senior Management (excluding KMPs at senior level) term/tenure ofappointment will be as per Company rules and policy.
RETIREMENT AND REMOVAL OF DIRECTORS AND SENIOR MANAGEMENT
The Committee may recommend with reasons recorded in writing removal of a DirectorKMP or Senior Management Personnel subject to the provisions and compliance of theCompanies Act 2013 rules and regulations and the policy of the Company.
The Director KMP and Senior Management Personnel shall retire as per the applicableprovisions of the Act and the prevailing policy of the Company. The Board will have thediscretion to retain the Director KMP Senior Management Personnel in the same position/remuneration or otherwise even after attaining the retirement age for the benefit of theCompany. Due to reasons for any disqualification mentioned in the Act or the Rules madethereunder or under any other applicable Act Rules and regulations thereunder a Directorshall be removed from his directorship held with the Company.
POLICY FOR REMUNERATION TO DIRECTORS / KMP / SENIOR MANAGEMENT PERSONNEL
1. Remuneration to Managing Director / Whole-time Directors a. The Remuneration/Commission etc. to be paid to Managing Director / Whole-time Directors/ExecutiveDirectors etc. shall be governed as per provisions of the Companies Act 2013 and rulesmade there under or any other enactment for the time being in force and the approvalsobtained from the Members of the Company. b. The Nomination and Remuneration Committeeshall make such recommendations to the Board of Directors as it may consider appropriatewith regard to remuneration to Managing Director / Whole time Directors/ExecutiveDirectors.
2. Remuneration to Non-Executive/Independent Directors
The Non-Executive/ Independent Directors may receive sitting fees as per the provisionsof Companies Act 2013. The amount of sitting fees as recommended by the Nomination andRemuneration Committee and approved by the Board of Directors shall be subject toceiling/ limits as provided under Companies Act 2013 and rules made there under or anyother enactment for the time being in force.
3. Remuneration to Key Managerial Personnel and Senior Management
The remuneration to Key Managerial Personnel and Senior Management shall consistof fixed pay and incentive pay in compliance with the provisions of the Companies Act2013 and in accordance with the Company's Policy.
The Fixed pay shall include monthly remuneration employer's contribution to ProvidentFund contribution to pension fund pension schemes etc. as decided from to time.
The Incentive pay shall be decided based on the balance between performance of theCompany and performance of the Key Managerial Personnel and Senior Management to bedecided annually or at such intervals as may be considered appropriate.
POLICY ON BOARD DIVERSITY a) The Board of Directors shall have an optimumcombination of Directors from di3erent areas / 3elds as may be considered appropriate. b)The Board shall have at least one board member who has accounting or related financialmanagement expertise and other members of the Board should be financially literate. c) Theboard shall have at least one woman director. d) To the extent feasible the compositionof the Board should be of individual from di3erent functional domain areas.
DISCLOSURE OF THE POLICY
The remuneration policy and evaluation criteria of the committee shall be disclosed inthe Board's report forming a part of the Annual Report of the Company.
FREQUENCY OF MEETINGS
The meetings of the Committee could be held at such regular intervals as may berequired.
Minimum two (2) members shall constitute a quorum for the Committee meeting.
In the absence of the Chairman the members of the Committee present at the meetingshall choose one amongst them to act as Chairman. Chairman of Nomination and RemunerationCommittee meeting could be present at the Annual General Meeting to answer the Membersqueries. However it would be upto the Chairman to nominate some other member to answer theMembers' queries.
This policy shall be updated from time to time by the Company in accordance with theamendments if any to the Companies Act 2013 rules made thereunder SEBI ListingObligations or any other applicable enactment for the time being in force.
ANNEXURE-3 TO DIRECTORS' REPORT
Form No. MR-3
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED MARCH 31 2017
[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
Mohit Industries Limited
601-B "A" Wing International Trade Centre Majuragate crossing Ring RoadSurat 395 002
I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by MOHIT INDUSTRIES LIMITED(hereinafter called the Company). Secretarial Audit was conducted in a manner thatprovided me a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing my opinion thereon. Based on my veri3cation of the books papers minutebooks forms and returns 3led and other records maintained by the Company and also theinformation and representation provided by the Company its officers agents andauthorized representatives during the conduct of secretarial audit I hereby report thatin my opinion the Company has during the audit period covering the financial year endedon 31.03.2017 complied with the statutory provisions listed hereunder and also that theCompany has proper Board-processes and compliance-mechanism in place to the extent in themanner and subject to the reporting made hereinafter:
1. I have examined the books papers minute books forms and returns 3led and otherrecords maintained by the company for the financial year ended on 31.03.2017 according tothe provisions of: (i) The Companies Act 2013 (the Act) and the Rules made there under;(ii) The Securities Contracts (Regulation) Act 1956 (SCRA') and the Rules madethere under; (iii) The Depositories Act 1996 and the Regulations and Bye-laws framedthereunder; (iv) Foreign Exchange Management Act 1999 and the Rules and Regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings; - There are no events occurred during the year whichattracts provisions of these Act Rules and Regulations and hence not applicable.
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act') to the extent applicable to theCompany :- a. The Securities and Exchange Board of India (Substantial Acquisition ofShares and Takeovers) Regulations 2011; b. The Securities and Exchange Board of India(Prohibition of Insider Trading) Regulations 2015; c. The Securities and Exchange Boardof India (Issue of Capital and Disclosure Requirements) Regulations 2009; - There are noevents occurred during the year which attracts provisions of these regulations hence notapplicable. d. The Securities and Exchange Board of India (Employees Stock Option Schemeand Employee Stock Purchase Scheme) Guidelines 1999; - There are no events occurredduring the year which attracts provisions of these regulations hence not applicable e. TheSecurities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations2008; - There are no events occurred during the year which attracts provisions of theseregulations hence not applicable f. The Securities and Exchange Board of India (Registrarsto an Issue and Share Transfer Agents) Regulations 1993 regarding the Companies Act anddealing with client; g. The Securities and Exchange Board of India (Delisting of EquityShares) Regulations 2009; - There are no events occurred during the year which attractsprovisions of these regulations hence not applicable. h. The Securities and Exchange Boardof India (Buyback of Securities) Regulations 1998; - There are no events occurred duringthe year which attracts provisions of these regulations hence not applicable. i. TheSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015; (vi) Factories Act 1948 (vii) Industrial Disputes Act 1947 (viii) ThePayment of Wages Act 1936 (ix) The Minimum Wages Act 1948 (x) Employees State InsuranceAct 1948 (xi) The Employees Provident Fund and Miscellaneous Provisions Act 1952
(xii) The Payment of Bonus Act 1965 (xiii) The Payment of Gratuity Act 1972
(xiv) The Contract Labour (Regulation and Abolition) Act 1970 (xv) The MaternityBenefit Act 1961 (xvi) The Child Labour (Prohibition and Regulation) Act 1986 (xvii) TheEmployees Compensation Act 1923 (xviii) The Apprentices Act 1961
(xix) The Employment Exchange (Compulsory Noti3cation of Vacancies) Act 1959
(xx) The Environment (Protection) Act 1986 (read with The Environment (Protection)Rules 1986) (xxi) The Hazardous Waste (Management Handling and Transboundary Movement)Rules 2008.
(xxii) The Water (Prevention and Control of Pollution) Act 1974 (read with Water(Prevention and Control of Pollution) Rules 1975) (xxiii) The Air (Prevention and Controlof Pollution) Act 1981 (read with Air (Prevention and Control of Pollution) Rules 1982)I have also examined compliance with the applicable clauses Secretarial Standards issuedby The Institute of Company Secretaries of India. During the period under review theCompany has generally complied with the provisions of the Act Rules RegulationsGuidelines Standards Listing Agreements etc mentioned above subject to the followingobservation: a. Company received show cause notice from Cost Audit Branch Ministry ofCorporate Affairs regarding Cost Audit Report for the financial year 2014 -15. Company hasnot submitted the Cost Audit Report as required by Rule 6 of Companies (Cost Records andAudit) Rules 2014 read with 3rst proviso to Section 403(1) of Companies Act 2013. Ascompany being in Textile Industry did not fall under the ambit of Cost audit for thefinancial year 2014-15 hence there is no requirement of submission of Cost audit reportfor F.Y. 2014-15.
2. I further report that:
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members' views are capturedand recorded as part of the minutes.
3. I further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
4. I further report that during the audit period the company has not taken major stepsor enter into events having a major bearing on the company's affairs in pursuance of theabove referred laws rules regulations guidelines standards etc.
My report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management of thecompany. My responsibility is to express an opinion on these secretarial records based onmy audit.
2. I have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theveri3cation was done on test basis to ensure that correct facts are reflected insecretarial records. I believe that the processes and practices I followed provide areasonable basis for my opinion.
3. I have not veri3ed the correctness and appropriateness of financial records andBooks of Accounts of the company.
4. Wherever required I have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. My examination was limited tothe veri3cation of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the e3cacy or effectiveness with which the management has conducted theaffairs of the company.
| || || ||Dhiren R. Dave |
|Date ||: ||21.06.2017 ||Company Secretary |
|Place ||: ||Surat ||FCS: 4889 |
| || || ||CP: 2496 |
ANNEXURE-4 TO DIRECTORS' REPORT
DISCLOSURE UNDER SECTION 197 (12) OF THE COMPANIES ACT 2013
PART-(A) Disclosure as required under Rules 5 (1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014
(1) Ratio of the Remuneration of each director to the median remuneration of theemployees of the company for the financial year ended 31st March 2017 and the percentageincrease in remuneration of each Director Chief Financial officer Chief Executiveofficer Company Secretary for the financial year ended 31st March 2017:
|Name of the Director/KMP ||Remuneration received (In 3) ||% Increase in Remuneration in F.Y 2016-17 ||Ratio to median remuneration |
|Mr. Narayan Sitaram Saboo (Managing Director) ||180000 ||100.00 ||1.06 |
|Mr. Sitaram Nandlal Saboo( Chairman) ||180000 ||100.00 ||1.06 |
|Mr. Naresh Sitaram Saboo (Director) ||180000 ||100.00 ||1.06 |
|Mr. Manish Narayan Saboo (Director & CFO) ||180000 ||100.00 ||1.06 |
|Miss. Swati Malu (Company Secretary) ||325385 ||13.64 ||N.A |
No remuneration/ sitting fees paid to independent Directors during F.Y 2016-17.
(2) During the financial year 2016-17 there was an increase of 9.17 % in the medianremuneration of employees. (3) There were 137 permanent employees on the rolls of thecompany as on 31st March 2017.
(4) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year was 9.17 %. There was an averageincrease of 100 % in Managerial Remuneration for the financial year 2016-17 as compared toFinancial Year 2015-16 as no remuneration was given to directors during previous year.
(5) It is afirmed that the remuneration paid is as per remuneration policy of thecompany.
PART-(B) information as per Rules 5 (2) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 a) Details of top ten employee in terms of grossremuneration paid during the year ended 31st March 2017.
|Sr. No. ||Name of Employee ||Designation ||Remuneration received (In 3) ||Nature of employment ||Qualification ||Expe- rience ||Date of commencement of employment ||Age ||Last employment held before joining company ||% of equity shares held ||whether any such employee is a relative of any director or manager of the company |
|1. ||D M Kulkarni ||In charge ||650000 ||Permanent ||Textile Engineer ||39 Years ||01/04/2015 ||62 ||Anuba Fabrics Pvt. Ltd. ||- ||- |
| || || || || || || || || || || || |
|2. ||Rajesh D. Panghal ||Sales Manager ||524977 ||Permanent ||Diploma Mechanical Engineer ||25 Years ||05/07/1995 ||49 ||Globe Synthetics Limited ||- ||- |
| || || || || || || || || || || || |
|3. ||Bhavin Bardoliwala ||IT Executive ||449731 ||Permanent ||BCA ||13 Years ||16/11/2015 ||32 ||Sarin Technologies India Pvt. Ltd. ||- ||- |
| || || || || || || || || || || || |
|4. ||Suresh Kumar Agiwal ||GM ||438366 ||Permanent ||B.Com ||29 Years ||01/05/2011 ||49 ||Santosh Chem3ne Chemical Pvt. Ltd ||- ||- |
| || || || || || || || || || || || |
|5. ||Mallikarjun B. ||TECH. ||420000 ||Permanent ||B. Tech (Textile) ||25 Years ||01/08/2011 ||49 ||Sanica Industries Ltd ||- ||- |
| ||Pattanshetty || || || || || || || || || || |
|6. ||Narpat Singh ||Electrician ||380400 ||Permanent ||Under Graduate ||25 Years ||09/07/1997 ||44 ||Viral Filament Ltd. ||- ||- |
|7. ||Sarveswar Das ||Plant In charge ||356929 ||Permanent ||B. A. ||22 Years ||01/08/2011 ||41 ||Jigisha Texo Fab Ltd ||- ||- |
|8. ||Moolchand Mohanlal Saini ||Export Manager ||346342 ||Permanent ||B. A. ||9 Years ||01/04/2012 ||28 ||Shree Sainath Moters Pvt. Ltd ||- ||- |
| || || || || || || || || || || || |
|9. ||Swati Malu ||Company Secretary ||325385 ||Permanent ||Company Secretary ||5 Years ||17/12/2012 ||25 ||Praveen Bazari & Co ||- ||- |
| || || || || || || || || || || || |
| || || || || || || || || || || || |
|10. ||Mahitapsing Gulabsinghsingh Kunwar ||Factory In charge ||224688 ||Permanent ||Under Graduate + I.T.I ||25 Years ||26/06/1994 ||48 ||Kimora Senthetics Pvt. Ltd. ||- ||- |
| || || || || || || || || || || || |
b) Details of every employee who was employed throughout the financial year was inreceipt of gross remuneration for that year which in the aggregate was not less than OneCrores Two lakhs rupees;- (Nil) hence Not applicable c) Details of every employee whowas employed for a part of the financial year was in receipt of remuneration for any partof that year at a rate which in the aggregate was not less than Eight lakhs 3ftythousand rupees per month; (Nil) hence not applicable d) Details of every employee whowas employed throughout the financial year or part thereof was in receipt of remunerationin that year which in the aggregate or as the case may be at a rate which in theaggregate is in excess of that drawn by the managing director or whole-time director ormanager and holds by himself or along with his spouse and dependent children Not lessthan two percent of the equity shares of the company. (Nil) hence Not applicable.
ANNEXURE-5 TO DIRECTORS' REPORT
Information on conservation of Energy Technology absorption Foreign Exchange earningsand outgo required to be disclosed under Section 134 of the Companies Act 2013 read withcompanies (Accounts) Rules 2014 are provided hereunder
A. CONSERVATION OF ENERGY
Energy Conservation is an ongoing process in the Company. The Company continued itsefforts to improve energy usage effciencies and increase the share of renewable energy.Various key performance indicators like specific energy (energy consumed per unit ofproduction) specific energy costs and renewable energy contributions were continuouslytracked to monitor alignment with the Company's overall sustainability approach.
I. Steps taken or impact on conservation of energy: z Use of energy effcientequipment and Replacement of ine3cient motor z Intensi3ed Internal Audit aimed atdetecting wastage of electricity. z More usage of electricity purchased from DGVCL.
II. Steps taken for utilizing alternate sources of energy
No alternative source of energy was used during the period under review.
III. Capital investment on energy conservation equipment during the year: NIL B.TECHNOLOGY ABSORPTION
Your company is keeping a close eye on the new product development and up gradation oftechnology in existing products. Up gradation in various areas of plant and machinery iscontinuously carried out.
I. Efforts made towards technology absorption: NIL II. Benefits derived: NIL
III. In case of imported technology (imported during the last three years reckoned fromthe beginning of the financial year): N.A. a. Details of Technology: N.A. b. Year ofImport: N.A. c. Whether the technology has been fully absorbed: N.A. d. if not fullyabsorbed areas where absorption has not taken place and the reasons thereof N.A.
IV. Expenditure incurred on Research and Development: NIL C. FOREIGN EXCHANGE EARNINGSAND OUTGO
The Company is successfully exporting DTY Yarn to Thailand Czech RepublicDenmark Germany Bulgaria Indonesia United Kingdo Mexico Brazil Guatemala VietnamSouth Korea Turkey Algeria and many more Countries.
| || ||(`. in Lakhs) |
|Particulars ||31/03/2017 ||31/03/2016 |
|Foreign Exchange Earning ||7174.00 ||5584.00 |
|Foreign Exchange Outgo ||- ||- |