Mohit Industries Ltd.
|BSE: 531453||Sector: Industrials|
|NSE: MOHITIND||ISIN Code: INE954E01012|
|BSE 00:00 | 21 Oct||11.88||
|NSE 00:00 | 21 Oct||11.95||
|Mkt Cap.(Rs cr)||17|
|Mkt Cap.(Rs cr)||16.82|
Mohit Industries Ltd. (MOHITIND) - Director Report
Company director report
MOHIT INDUSTRIES LIMITED
Your Directors have pleasure in presenting the 30th Annual Report ofthe Company together with the Audited Financial Statements for the year ended 31st March2020.
FINANCIAL RESULT AND PERFORMANCE:
(Rs. in Lakhs except EPS)
In the last month of FY 2020 the COVID-19 pandemic developed rapidlyinto a global crisis forcing governments to enforce lock-downs of all economic activityresulting temporary closure of our manufacturing operations. The Company had resumed itsoperations in a gradual manner putting in place the mandatory protocols for all ouremployees as per the guidelines stipulated by the Ministry of Home Affairs of theGovernment of India. The policies revolve around safety for self Safety at Home Safetyfor family Safety in Transit Safety of Colleagues Safety at Workplace and Safety forCommunity. There had been a temporary halt in the supply chain of the Company due to thelockdown regulations however the supply chain now is slowly coming back to its normalphase; the problem of shortage of drivers for both inbound and outbound transport is beingfaced by the business at this time.
With a view to conserve the resources for the Company's Businessoperations your directors have deemed it prudent to not to recommend any dividend for theyear ended 31st March 2020. During the year under review no amount from profit wastransferred to General Reserve.
3. SHARE CAPITAL
The Paid up equity share capital as on March 31 2020 was Rs. 1415.76lakhs divided into 14157575 equity shares of Rs. 10 each. During the year under reviewthe Company has neither issued any shares/convertible warrant nor has granted any stockoptions and nor sweat equity.
4. STATE OF THE COMPANY'S AFFAIRS
During the year under review your Company has recorded its net revenuefrom operations as Rs. 17501.02 lakhs against revenue recorded of Rs. 19147.00 lakhs inthe previous year. The EBIDT recorded at Rs. 997.76 lakhs against last year's figureof Rs. 1300.73 lakhs. Net profit after tax is recorded at Rs. 23.36 lakhs against previousyear net profit of Rs. 68.40 lakhs. Your company has 16 Texturising Machines 150 HighSpeed Shuttle-less water jet Looms with a capacity to manufacture 18000 tonnes of DrawTexturised Yarn (DTY) per annum and 14 Million meters Grey fabrics per annum respectively.
The Company has exported DTY Yarn with a Premium and in its Brand Nameto South Korea Thailand Czech Republic Guatemala Bulgaria Indonesia Japan VietnamMalaysia Mexico Colombia and many more Countries. The Company is having star exporthouse status. During the year under review your company has recorded export turnover ofRs. 8782.51 lakhs against last year's figure of Rs. 10062.95 lakhs. Your companyalso holds Certificate of Oeko-Tex Standard 100.
6. EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3) (a) of the Companies Act readwith Rule 12(1) of the Companies (Management and Administration) Rules 2014 an extractof the annual return in the prescribed format is annexed as Annexure- 1 to theDirector's Report.
The web link for the Annual Return placed on the Company'swebsite is www.mohitindustries.com/downloads/annual-report/2019-2020.
7. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of Mohit Industries Limited itssubsidiaries and its associates is prepared in accordance with Ind AS- 110 on ConsolidatedFinancial statements and Equity method of accounting given in Ind AS - 28 on"Accounting of Investments in Associates in Consolidated Financial statements".The details of such subsidiary and associates are as follows:-
8. BUSINESS GROWTH
Your Company has a dedicated team of Management and Operating Personnelwho have been instrumental in the growth of the business over the years. Your Directorsbelieve that the Company has the potential to further scale up its business volumes andprofitability and are in the process of identifying new avenues of growth and effectiveutilization of its existing resources.
9. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THESUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES
There are two associate companies within the meaning of Section 2(6) ofthe Companies Act 2013 ("Act") as on 31st March 2020. Pursuant to provisionsof Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies (Accounts)Rules 2014 a statement containing salient features of the financial statements of theCompany's subsidiaries/ Associate Companies and Joint Ventures is given in Form AOC-1and forms an integral part of this Annual Report.
10. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSISREPORT
As per Regulation 34 (3) read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a separate section oncorporate governance practices followed by the Company together with a certificate fromMr. Dhiren Dave Company Secretary in practice confirming compliance and ManagementDiscussion Analysis Report forms an integral part of this Annual Report.
11. FIXED DEPOSITS
During the year under review the company has not accepted any depositswithin the meaning of section 73 of the Companies Act 2013 and the rules made thereunder.
In accordance with the provisions of Section 152 of the Companies Act2013 and the Company's Articles of Association Mr. Manish Saboo Director (DIN:01576187) will retire by rotation at the ensuing Annual General Meeting and beingeligible has offered himself for re-appointment. The details of the aforesaid Directorshis expertise in various functional areas as required to be disclosed under Regulation 36(3) of the Listing Regulations form part of the Notice of the ensuing Annual GeneralMeeting. The Board of Directors s at their meeting held on 28th August 2020 had decidedto re-appoint Mr. Narayan Saboo as managing Director for a term of 5 years with effectfrom 01st October 2020 subject to approval of Members in the ensuing Annual Generalmeeting.
During the financial year other than as stated above no changes havebeen occurred in the Directors of the Company. The details of the aforesaid directorshis/her expertise in various functional areas as required to be disclosed under Regulation36 (3) of the Listing Regulations form part of the Notice of the ensuing Annual GeneralMeeting.
13. DECLARATION FROM INDEPENDENT DIRECTORS
The Independent Directors have submitted their declaration to the Boardthat they fulfill all the requirements as stipulated in Section 149(6) of the CompaniesAct 2013 read with rules framed thereunder.
14. BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout the annual performance evaluation of its own performance the Directors individuallyas well as the evaluation of Committees. The performance of the Board / Committee wasevaluated after seeking inputs from all the Directors / Committee members on the basis ofthe defined 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 tocompany's long term strategic issues and understanding of duties roles and functionas Independent Director. The Directors expressed their satisfaction with the evaluationprocess.
15. NUMBER OF MEETINGS HELD
The Board met Eight times during the financial year the details ofwhich are given in the Corporate Governance Report that forms part of this Annual Report.The intervening gap between any two meetings was within the period prescribed by theCompanies Act 2013 and the Listing Regulations.
16. POLICY ON DIRECTOR'S APPOINTMENT REMUNERATION INCLUDINGCRITERIA FOR DETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES INDEPENDENCE OF A DIRECTORAND OTHER MATTERS
The Board has on the recommendation of the Nomination &Remuneration Committee framed a policy for selection and appointment of Directors SeniorManagement and their remuneration including criteria for determining qualificationspositive attributes and other matters provided under sub section (3) of section 178 of theCompanies Act 2013. The Company's Remuneration Policy for Directors Key ManagerialPersonnel and other employees is annexed as Annexure- 2 to the Director's Report andalso available on Company's website www.mohitindustries.com.
17. VIGIL MECHANISM / WHISTLE BLOWER POLICY
In order to ensure that the activities of the Company and its employeesare conducted in a fair and transparent manner by adoption of highest standards ofprofessionalism honesty integrity and ethical behavior the Company has adopted a Vigilmechanism/ Whistle Blower Policy. This policy is also posted on the Company's websitewww.mohitindustries.com.
18. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company has formulated a familiarization program for theIndependent Directors to provide insights into the Company to enable the IndependentDirectors to understand its business in depth and contribute significantly to the Company.The details of such program are available on the Company's websitewww.mohitindustries.com.
19. COMPOSITION OF KEY MANAGERIAL PERSONNEL (KMP)
The Company has the following KMP;
20. COMPOSITION OF AUDIT AND NOMINATION & REMUNERATION COMMITTEE
The Audit Committee comprises of Mr. Sachin Jain (Chairman) Mr. JayeshGandhi (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.
21. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the informationand explanations 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 annual accounts for the financial yearended 31st March 2020 the applicable accounting standards have been followed along withproper explanation relating to material departures; the annual accounts have been preparedin compliance with the provisions of the Companies Act 2013;
b) the directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for year ended on that date;
c) the directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) the directors have prepared the annual accounts on a going concernbasis; and
e) the directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively;
f) the directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.
22. STATUTORY AUDITORS
M/s. Rajendra Sharma & Associates Chartered Accountants (FRN:108390W) were appointed as the Statutory Auditors of the Company at the 27th AnnualGeneral Meeting of the Company held on 07th August 2018 for a term of five consecutiveyears commencing from financial year 2017-18 up to Financial Year 2021-22 from conclusionof the 27th Annual General Meeting of the Company till the conclusion of the 32nd AnnualGeneral Meeting of the Company and their appointment would be placed for ratification bythe members at every Annual General Meeting during the said term. In view of the aboveratification by the Members for continuance of their appointment at this AGM is not beingsought. The Statutory Auditors have given a confirmation to the effect that they areeligible to continue with their appointment and that they have not been disqualified inany manner from continuing as Statutory Auditors. The remuneration payable to theStatutory Auditors shall be determined by the Board of Directors based on therecommendation of the Audit Committee.
Members' attention is invited to the observation made by theAuditors under "Qualified Opinion" appearing in Auditors Reports.: The Companyhas not provided for Post-Employment Benefits and other long-term employee benefits underDefined Benefit Plans on accrual basis but provides the same as and when they become duefor payment. This method of accounting of Post-Employment Benefits and other long-termemployee benefits under Defined Benefit Plans is in deviation with Ind AS 19 onEmployee Benefits. As there is no actuarial report or basis of calculation available withthe management of such Post-Employment Benefits and other long-term employee benefits thequantum of deviation cannot be ascertained. If the company had followed the methodaccounting as per Ind AS 19 then employee benefit expense would have increased andcorrespondingly Profit for the period would have reduced.
"The Board is of the opinion that the Provision for the Long termEmployees are determined on the basis of actuarial Valuation Method & techniqueprescribed in the Accounting Standard. The Consulting fees by actuaries for determiningthe Provision for long term benefit Plan is even higher than the Annual Liability of thecompany for Long term benefits. The company has decided to pay the Long term benefits asand when it becomes due as the amount is negligible and it is not going to make any impacton the financial Position of the company. Considering the size of the company andnegligible liability the company has not made provisions for Long term employee benefits& Defined benefits plan"
23. COST AUDITOR
The Board of Directors on the recommendation of Audit Committee hasappointed M/s. Nainesh Kantliwala & CO Cost Accountants (Firm Registration Number001303) as Cost Auditor to conduct the audit of company's cost records for thefinancial year 2020-21 at a remuneration of _ 50000/- (Rupees Fifty Thousands only) plusapplicable service tax and reimbursement of out of pocket expenses. As required under theCompanies Act 2013 the remuneration of Cost Auditors as approved by the Board ofDirectors is subject to ratification by the shareholders at the ensuing Annual GeneralMeeting and in this connection resolution seeking member's approval forms part of theNotice convening the 30th Annual General Meeting.
24. SECRETARIAL AUDIT
Mr. Dhiren R Dave Surat Practising Company Secretaries were appointedto conduct the secretarial audit of the Company for the financial year 2019-20 asrequired under Section 204 of the Companies Act 2013 read with rules framed there under.The Secretarial Audit Report for F.Y 2019-20 is annexed as Annexure-3 to theDirector's Report. There is no secretarial audit qualification for the year underreview.
25. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE
Loans Guarantees and Investments covered under Section 186 of theCompanies Act 2013 form part of the notes to the financial statements provided in thisAnnual Report.
26. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All transactions entered with Related Parties for the year under reviewwere on arm's length basis and in the ordinary course of business and that theprovisions of Section 188 of the Companies Act 2013 and the Rules made thereunder are notattracted. Thus disclosure in form AOC-2 in terms of Section 134 of the Companies Act2013 is not required. Further there are no material related party transactions during theyear under review with the Promoters Directors or Key Managerial Personnel. Thetransactions with related parties as per requirements of Indian Accounting Standard (INDAS-24) Related Party Disclosures' are disclosed in Note No. 36 of Notesto Accounts. All Related Party Transactions are placed before the Audit Committee as alsoto the Board for approval. Omnibus approval was obtained for transactions which are ofrepetitive nature. The policy on materiality of Related Party Transactions as approved bythe Board of Directors has been uploaded on the website of the Company. The web-link ofthe same has been provided in the Corporate Governance Report. None of the Directors/KMPhas any pecuniary relationship or transactions vis--vis the Company.
27. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
Pursuant to the provisions of the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board formallyadopted steps for framing implementing and monitoring the risk management plan for theCompany by way of Risk Management Policy. The main objective of this policy is to ensuresustainable business growth with stability and to promote a pro-active approach inreporting evaluating and mitigating risks associated with the business. The policyestablishes a structured and disciplined approach to Risk Management in order to guidedecisions on risk related issues. In today's challenging and competitive environmentstrategies for mitigating inherent risks associated with business and for accomplishingthe growth plans of the Company are imperative. The common risks inter alia are risksemanating from; Regulations Competition Business Technology obsolescence Investmentsretention of talent finance politics and fidelity. As a matter of policy these risksare assessed and steps as appropriate are taken to mitigate the same. The Risk ManagementPolicy is also hosted on the Company's website www.mohitindustries.com.
28. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESEFINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There are no material changes or commitments affecting the financialposition of the Company which have occurred between the end of the financial year and thedate of this Report.
29. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls withreference to financial statements. The Company's internal control system iscommensurate with its size scale and complexities of its operations. During the yearsuch controls were tested and no reportable material weaknesses in the design or operationwere observed.
The Company's building plant and machineries Stocks and otherproperties wherever necessary and to the extent required have been adequately insured.
31. LISTING OF SHARES AND LISTING FEES
The Equity Shares of your Company are listed and actively traded on theBSE Limited and the National Stock Exchange of India Limited. The Company has paid annuallisting fees to the both stock exchanges for the financial year 2020-21. Pursuant to theapproval of the Board of Directors of the Company at its meeting held on July 27 2020your Company had filed an application to BSE Limited ("BSE") for voluntarydelisting of its equity shares from the BSE on July 29 2020 in terms of regulation 6 and7 of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009 ("SEBI Delisting Regulations").
32. REMUNERATION AND PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Companies Act 2013read with Rule 5(1) and Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed as Annexure -4 to the Director'sReport.
33. INDUSTRIAL RELATIONS
The Company maintained healthy cordial and harmonious industrialrelations at all levels.
34. TRANSFER OF UNCLAIMED AMOUNTS TO IEPF
During the period under review the Company has transferred theunclaimed dividend amount of Rs. 299914.5/- pertaining to Financial Year 2011-12 (FinalDividend) to the IEPF pursuant to provision of Section 125 of the Companies Act 2013. TheCompany has also transferred 5265 Equity Shares of Rs. 10/- each to the IEPF Account onwhich the dividends had remained unpaid or unclaimed for seven consecutive years or moreafter following the prescribed procedure.
35. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
As required under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 the particulars relating toconservation of energy technology absorption and foreign exchange earnings and outgo isannexed as Annexure- 5 to the Director's Report.
36. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has complied with provisions relating to the constitutionof Internal Complaints Committee under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. All employees (permanent contractualtemporary trainees) are covered under this policy. Your Directors further state thatduring the year under review No compliant was received from any employee during F.Y2019-20 and hence no complaint is outstanding as on 31st March 2020 for redressal.
37. DETAILS OF SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORSOR COURTS
During the year under review there are not any significant or materialorders passed by the Regulators or Courts or tribunals impacting the going concern statusand your Company's operations in future.
38. GREEN INITIATIVES
In commitment to keep in line with the Green Initiative and goingbeyond it to create new green initiatives electronic copy of the Notice of 30th AnnualGeneral Meeting of the Company are sent to all Members whose email addresses areregistered with the Company/Depository Participant(s).
The Board of Directors wishes to place on record its appreciation forthe commitment 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. The Directorsregret the loss of life due to COVID-19 pandemic and are deeply grateful and have immenserespect for every person who risked their life and safety to fight this pandemic. TheDirectors appreciate and value the contribution made by every member of the MIL family.