MOHIT INDUSTRIES LIMITED
Your Directors have pleasure in presenting the 29th Annual Report of the companytogether with the Audited Financial Statements for the year ended 31st March 2019.
|FINANCIAL RESULT AND PERFORMANCE: || || ||Rs. ( in Lakhs except EPS) |
| ||STANDALONE ||CONSOLIDATED |
|PARTICULARS || || || || |
| ||31/03/2019 ||31/03/2018 ||31/03/2019 ||31/03/2018 |
|Sales (net excise duty) ||19147.00 ||15791.06 ||19147.00 ||15798.16 |
|Other income ||395.91 ||194.15 ||395.91 ||194.77 |
|Profit Before Interest & Depreciation ||1300.73 ||1234.33 ||1300.73 ||1235.02 |
|(-)Finance Cost ||856.80 ||763.55 ||856.80 ||764.18 |
|(-) Depreciation ||383.36 ||406.03 ||383.36 ||406.03 |
|Net Profit before tax & Exceptional items ||60.57 ||64.75 ||60.57 ||64.81 |
|(+)Exceptional Items ||- ||(0.53) ||0.41 ||(0.53) |
|Net Profit Before prior period item & tax ||60.57 ||64.22 ||60.99 ||64.28 |
|(+) Prior period item ||- ||22.27 ||- ||22.29 |
|(-) Tax Expense ||(7.83) ||51.40 ||(7.83) ||51.42 |
|Share in Profit of Associates & Minority Interest ||- ||- ||1.38 ||8.90 |
|Net Profit for the year after tax ||68.40 ||35.09 ||70.19 ||44.05 |
|Total Comprehensive Income for period ||38.16 ||57.72 ||(3257.43) ||1811.74 |
|Earnings per share (Basic & Diluted) (In Rs.) ||0.48 ||0.25 ||0.50 ||0.31 |
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 2019. 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 2019 was Rs. 1415.76 lakhs dividedinto 14157575 equity shares of Rs. 10 each. During the year under review the Companyhas neither issued any shares/convertible warrant nor has granted any stock options andnor sweat equity.
3. STATE OF THE COMPANY'S AFFAIRS
During the year under review your Company has recorded its net revenue from operationsas Rs. 19147.00 lakhs against revenue recorded of Rs. 15791.06 lakhs in the previousyear. The EBIDT recorded at Rs. 1300.73 lakhs against last year's figure of Rs. 1234.33lakhs. Net profit after tax is recorded at Rs. 68.40 lakhs against previous year netprofit of Rs. 35.09 lakhs. Your company has 16 Texturising Machines 150 High SpeedShuttle-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 Name to South KoreaThailand Czech Republic Guatemala Bulgaria Indonesia Japan and many more Countries.The Company is having star export house status. During the year under review your companyhas recorded export turnover of Rs. 10062.95 lakhs has increased at 45.25% against lastyear's figure of Rs. 6928 lakhs. Your company also holds Certificate of Oeko-TexStandard 100.
5. EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3) (a) of the Companies Act read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of the annual return inthe prescribed format is annexed as Annexure- 1 to the Director's Report.
The web link for the Annual Return placed on the Company's website iswww.mohitindustries.com/downloads/annual-report/2018-2019.
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:-
|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 |
**Mohit E-waste Recovery Pvt Ltd being ceased to be associate Company of MohitIndustries Limited as the said Company has passed the resolution as on 11.02.2019 to getthe name struck off from the Registrar of Companies. The Status of the Company is beenunder process of striking off by the respective Registrar of Companies Ahmedabad.
**Maxum Metals Private Limited ceased to be subsidiary company with effect from 18thSeptember 2018.
7. BUSINESS GROWTH
Your Company has a dedicated team of Management and Operating Personnel who have beeninstrumental in the growth of the business over the years. Your Directors believe that theCompany has the potential to further scale up its business volumes and profitability andare in the process of identifying new avenues of growth and effective utilization of itsexisting resources.
8. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATESAND JOINT VENTURE COMPANIES
There are three associate companies and out of which one ceased to be associates as on11th February 2019 within the meaning of Section 2(6) of the Companies Act 2013("Act") as on 31st March 2019. Pursuant to provisions of Section 129(3) of theCompanies Act 2013 read with Rule 5 of the Companies (Accounts) Rules 2014 a statementcontaining salient features of the financial statements of the Company's subsidiaries/Associate Companies and Joint Ventures is given in Form AOC-1 and forms an integral partof this Annual Report.
9. 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.
10. 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. The Boardaccepted the resignation letter received from Mr. Sitaram Saboo Director & Chairmanof the Company owing to his personal reasons and health conditions with effect from 14thAugust 2018. The Members at their meeting held on 29th September 2014 had passed anordinary resolution and appointed Mr. Sachinkumar Pramod Jain Mr. Jayesh Rasiklal Gandhiand Mrs. Pragya Memani as an Independent Non- Executive Director of the Company to holdthe office for five (5) consecutive years for a term upto the conclusion of 29th AnnualGeneral Meeting i.e 30th September 2019. The Nomination and Remuneration Committee of theBoard of Directors on the basis of the report of performance evaluation of IndependentDirectors has recommended re-appointment of Mr. Sachinkumar Pramod Jain Mr. JayeshRasiklal Gandhi and Mrs. Pragya Memani who are eligible for re-appointment as anIndependent Director for second term to hold office for 5 (Five) consecutive years for aterm upto the conclusion of the 34th Annual General Meeting of the Company to be held inthe year 2024 subject to approval of Members in the ensuing Annual General meeting.
During the financial year other than as stated above no changes have been occurred inthe Directors of the Company. The details of the aforesaid directors his/her expertise invarious functional areas as required to be disclosed under Regulation 36 (3) of theListing Regulations form part of the Notice of the ensuing Annual General Meeting.
12. 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.
13. 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 definedcriteria including composition and structure effectiveness of meetings information andfunctioning. Performance evaluation of Independent Directors was done by the entire Boardexcluding the Independent Director being evaluated on the basis of relevant knowledgeexpertise experience devotion of time and attention to company's long term strategicissues and understanding of duties roles and function as Independent Director. TheDirectors expressed their satisfaction with the evaluation process.
14. NUMBER OF MEETINGS HELD
The Board met Eight 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.
15. 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.
16. 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.
17. 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.
18. 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 ||30/03/2019 |
|Miss. Nikita Pediwal ||Company Secretary ||15/04/2019 ||N.A |
19. 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.
20. 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 accounts for the financial year ended 31st March2019 the applicable accounting standards have been followed along with proper explanationrelating to material departures; the annual accounts have been prepared in compliance withthe provisions of the Companies Act 2013;
b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for year ended on that date;
c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the directors have prepared the annual accounts on a going concern basis; and
e) the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively;
f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
21. 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 hasnotified amendments in the provisions of Section 139 of the Companies Act 2013 and Rulesmade thereunder with effect from 7th May 2018. Pursuant to the said amendments therequirement for ratification of appointment of Statutory Auditors by the Shareholders atevery subsequent Annual General Meeting till the conclusion of their tenure has been doneaway with.
In view of the above ratification by the Members for continuance of their appointmentat this AGM is not being sought. The Statutory Auditors have given a confirmation to theeffect that they are eligible to continue with their appointment and that they have notbeen disqualified in any manner from continuing as Statutory Auditors. The remunerationpayable to the Statutory Auditors shall be determined by the Board of Directors based onthe recommendation of the Audit Committee.
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"
22. COST AUDITOR
The Board of Directors on the recommendation of Audit Committee has appointed M/s.Nainesh Kantliwala & CO Cost Accountants (Firm Registration Number 001303) as CostAuditor to conduct the audit of company's cost records for the financial year 2019-20 at aremuneration of Rs. 50000/- (Rupees Fifty 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 the29th Annual General Meeting.
23. SECRETARIAL AUDIT
Mr. Dhiren R Dave Surat Practising Company Secretaries were appointed to conduct thesecretarial audit of the Company for the financial year 2018-19 as required under Section204 of the Companies Act 2013 read with rules framed there under. The Secretarial AuditReport for F.Y 2018-19 is annexed as Annexure-3 to the Director's Report. There is nosecretarial audit qualification for the year under review.
24. 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.
25. 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.
26. 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 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.
27. 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.
28. 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.
30. 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 2019-20.
31. 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.
32. INDUSTRIAL RELATIONS
The Company maintained healthy cordial and harmonious industrial relations at alllevels.
33. TRANSFER OF UNCLAIMED AMOUNTS TO IEPF
During the period under review the Company has transferred the unclaimed dividendamount of Rs. 407317.5/- pertaining to Financial Year 2010-11 (Final Dividend) to theIEPF pursuant to provision of Section 125 of the Companies Act 2013. The Company has alsotransferred 5265 Equity Shares of Rs. 10/- each to the IEPF Account on which thedividends had remained unpaid or unclaimed for seven consecutive years or more afterfollowing the prescribed procedure.
34. 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.
35. 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 2018-19 and hence nocomplaint is outstanding as on 31st March 2019 for redressal.
36. 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.
37. GREEN INITIATIVES
In commitment to keep in line with the Green Initiative and going beyond it to createnew green initiatives electronic copy of the Notice of 29th Annual General Meeting of theCompany are sent to all Members whose email addresses are registered with theCompany/Depository Participant(s). For members who have not registered their e-mailaddresses physical copies are sent through the permitted mode.
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 : July 23 2019 ||(Narayan Saboo) ||(Manish Saboo) |
|Place : Surat ||Managing Director ||Director & CFO |