To The Members
MOHIT INDUSTRIES LIMITED
Your Directors have pleasure in presenting the 28th annual Report of the companytogether with the Audited Financial Statements for the year ended 31st March 2018.
FINANCIAL RESULT AND PERFORMANCE: ` ( in Lakhs except EPS)
| || |
|PARTICULARS ||31/03/2018 ||31/03/2017 ||31/03/2018 ||31/03/2017 |
|Sales (net excise duty) ||15791.06 ||15333.29 ||15798.16 ||15353.90 |
|Other income ||194.15 ||164.07 ||194.77 ||163.60 |
|Profit Before Interest & Depreciation ||1234.33 ||1269.32 ||1235.02 ||1271.23 |
|(-)Finance Cost ||763.55 ||698.96 ||764.18 ||700.83 |
|(-) Depreciation ||406.03 ||418.58 ||406.03 ||418.58 |
|Net Profit before tax & Exceptional items ||64.75 ||151.78 ||64.81 ||151.82 |
|(+)Exceptional Items ||(0.53) ||5.89 ||(0.53) ||5.89 |
|Net Profit Before prior period item & tax ||64.22 ||157.67 ||64.28 ||157.71 |
|(+) Prior period item ||22.27 ||11.63 ||22.29 ||11.63 |
|(-) Tax Expense ||51.40 ||2.34 ||51.42 ||2.35 |
|Share in Profit of Associates & Minority Interest ||- ||- ||8.90 ||27.06 |
|Net Profit for the year after tax ||35.09 ||166.96 ||44.05 ||194.05 |
|Total Comprehensive Income for period ||57.72 ||166.78 ||1811.74 ||2148.59 |
|Earnings per share (Basic & Diluted) (In `) ||0.25 ||1.18 ||0.31 ||1.37 |
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 2018. 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 2018 was ` 1415.76 lakhs divided into14157575 equity shares of ` 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 net revenue from operationsas ` 15791.06 lakhs against revenue recorded of ` 15333.29 lakhs in the previous year.The EBIDT recorded at ` 1234.33 lakhs against last year's figure of
` 1269.32 lakhs. Net profit after tax is recorded at ` 35.09 lakhs against previousyear net profit of ` 166.96 lakhs. During period under review decrease in profit ofcompany in comparison to last year profit due to bad debt expense recorded at ` 115.60lakhs. Your company has 16 Texturising Machines 150 High Speed Shuttle-less water jetLooms with a capacity to manufacture 22000 tonnes of Draw Texturised Yarn (DTY) per annumand 12 Million meters Grey fabrics per annum respectively.
The Company has exported DTY Yarn with a Premium and in its Brand Name to ThailandCzech Republic Germany Bulgaria Indonesia United Kingdo Vietnam South Korea JapanSweden Nepal Malaysia and many more Countries. The Company is having one star exporthouse status. During the year under review your Company has recorded export of ` 6928lakhs. Your company also holds Certificate 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 subsidiaries andits associates is prepared in accordance with Ind AS- 110 on Consolidated Financialstatements and Equity method of accounting given in Ind AS - 28 on "Accounting ofInvestments in Associates in Consolidated Financial statements". The details of suchsubsidiary and associates are as follows:-
|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 2018. There are three associatecompanies within the meaning of Section 2(6) of the Companies Act 2013 ("Act")as on 31st March 2018. 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 ofthis Annual 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. Manish Saboo Director (DIN: 01576187) 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.
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 (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board has carried out the annualperformance evaluation of its own performance the Directors individually as well as theevaluation of Committees. The performance of the Board / Committee was evaluated afterseeking inputs from all the Directors
/ Committee members on the basis of the defined criteria including composition andstructure effectiveness of meetings information and functioning. Performance evaluationof Independent Directors was done by the entire Board excluding the Independent Directorbeing evaluated on the basis of relevant knowledge expertise experience devotion oftime and attention to company's long term strategic issues and understanding of dutiesroles and function as Independent Director. The Directors expressed their satisfactionwith the evaluation process.
13. NUMBER OF MEETINGS HELD
The Board met Seven 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 Directorsto provide 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 followingKMP;
|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 Committeecomprises of Mr. Sachin Jain (Chairman) Mr. Jayesh Gandhi (Member) and Mrs. Pragya Memani(Member). Brief details on the committee are given in the Corporate Governance Report. Allthe recommendations 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 andexplanations obtained by them your Directors make the following statement in terms ofSection 134(3) (c) of the Companies Act 2013 that: a) in the preparation of the annualaccounts for the financial year ended 31st March 2018 the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures; the annual accounts have been prepared in compliance with the provisions ofthe Companies Act 2013; b) the directors have selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year and of the profit of the Company for year ended on that date; c) thedirectors have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities; d) the directorshave prepared the annual accounts on a going concern basis; and e) the directors have laiddown internal financial controls to be followed by the Company and that such internalfinancial controls are adequate and are operating effectively; f) the directors havedevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems are adequate and operating effectively.
20. STATUTORY AUDITORS
M/s. Rajendra Sharma & Associates Chartered Accountants (FRN: 108390W) wereappointed as the Statutory Auditors of the Company at the 27th Annual General Meeting ofthe Company held on 07th August 2018 for a term of five consecutive years commencing fromfinancial year 2017-18 up to Financial Year 2021-22 from conclusion of the 27th AnnualGeneral Meeting of the Company till the conclusion of the 32nd Annual General Meeting ofthe Company and their appointment would be placed for ratification by the members at everyAnnual General Meeting during the said term.
The Ministry of Corporate Affairs has notified amendments in the provisions of Section139 of the Companies Act 2013 and Rules made thereunder with effect from 7th May 2018.Pursuant to the said amendments the requirement for ratification of appointment ofStatutory Auditors by the Shareholders at every subsequent Annual General Meeting till theconclusion of their tenure has been done away with.
Members' attention is invited to the observation made by the Auditors under"Qualified Opinion" appearing in Auditors Reports.:
The Company has not provided for Post-Employment Benefits and other long-term employeebenefits under Defined Benefit Plans on accrual basis but provides the same as and whenthey become due for payment. This method of accounting of Post-Employment Benefits andother long-term employee benefits under Defined Benefit Plans is in deviation with Ind AS 19 on Employee Benefits. As there is no actuarial report or basis of calculationavailable with the management of such Post-Employment Benefits and other long-termemployee benefits the quantum of deviation cannot be ascertained. If the company hadfollowed the method accounting as per Ind AS 19 then employee benefit expensewould have increased and correspondingly Profit for the period would have reduced.
"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. 32(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 ofthe Gujarat Value Added Tax Tribunal at Ahmedabad Gujarat Vat demand pending beforeGujarat VAT Department has been decided in the Company's favour. This will absolves thecontingent liabilities of company related to Gujarat VAT (Tax and Penalty) pending beforethe Gujarat Value Added Tax Tribunal on year to year basis. Pursuant to said order ofGujarat Value Added Tax Tribunal demands relating to Gujarat Entry Tax is also as similaras to case of Gujarat Vat Demand. For demand relating to Excise duty/excise rebatesrejected pending at appellate stages Board is of view that the demand raised is notsustainable.
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 2018-19 at aremuneration of ` 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 toratification by the shareholders at the ensuing Annual General Meeting and in thisconnection resolution seeking member's approval forms part of the Notice convening the28th 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 2017-18 as required under Section204 of the Companies Act 2013 read with rules framed there under. The Secretarial AuditReport for F.Y 2017-18 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 Indian Accounting Standard (IND AS-24)Related Party Disclosures' are disclosed in Note No. 36 of Notes to Accounts. AllRelated Party Transactions are placed before the Audit Committee as also to the Board forapproval. Omnibus approval was obtained for transactions which are of repetitive nature.The policy on materiality of Related Party Transactions as approved by the Board ofDirectors has been uploaded on the website of the Company. The web-link of the same hasbeen provided in the Corporate Governance Report. None of the Directors/KMP has anypecuniary relationship or 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 (ListingObligations and Disclosure Requirements) Regulations 2015 the Board formally adoptedsteps for framing implementing and monitoring the risk management plan for the Company byway of Risk 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 fidelity. As a matter of policy these risks are assessedand steps as appropriate are taken to mitigate the same. The Risk Management Policy isalso hosted 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.
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 Limited andthe National Stock Exchange of India Limited. The Company has paid annual listing fees tothe both stock exchanges for the financial year 2018-19.
30. REMUNERATION AND PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Companies Act 2013 read with Rule5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)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 UNCLAIMED AMOUNTS TO IEPF
During the period under review the Company has transferred the unclaimed dividendamount of ` 80623/- pertaining to Financial Year 2009-10 (Final Dividend) to the IEPFpursuant to provision of Section 125 of the Companies Act 2013. The Company has alsotransferred 10752 Equity Shares of ` 10/- each to the IEPF Account on which the dividendshad remained unpaid or unclaimed for seven consecutive years or more after following theprescribed procedure.
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 of theCompanies (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 complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. All employees (permanent contractual temporarytrainees) are covered under this policy. Your Directors further state that during the yearunder review No compliant was received from any employee during F.Y 2017-18 and hence nocomplaint is outstanding as on 31st March 2018 for redressal.
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 orders passedby the Regulators or Courts or tribunals impacting the going concern status and yourCompany's operations in future.
The Board of Directors wishes to place on record its appreciation for the commitmentdedication and hard work done by the employees in the Company and the cooperation extendedby Banks Government authorities customers and shareholders of the Company and looksforward to a continued mutual support and co-operation.
For and on behalf of the Board of Directors
For Mohit Industries Limited For Mohit Industries Limited
Sd/- Sd/-Date :
August 14 2018 (Narayan Saboo)
Place : Surat Managing Director
Director & CFO