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Mohota Industries Ltd.

BSE: 530047 Sector: Industrials
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OPEN 9.36
CLOSE 9.17
52-Week high 14.60
52-Week low 5.95
Mkt Cap.(Rs cr) 13
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mohota Industries Ltd. (MOHOTAIND) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the (72nd) Seventy- Second Annual Report on thebusiness and operation of the Company together with the Audited Financial Statement forthe year ended March 31st 2019. A summary of the Financial Results is given below. TheManagement discussion and analysis is also included in this report.

( Rs in Lakhs)
FINANCIAL RESULTS For the year ended 31st March 2019 For the year ended 31st March 2018
Gross Revenue 30458.69 35759.19
Gross Profit (before interest depreciation & tax) 1393.56 1900.95
Less: Interest 1026.39 950.57
Depreciation 313.63 336.72
Profit before tax & extraordinary Item 53.54 613.66
Less: Provision for tax
Mat Current - 125.80
Deferred 10.16 114.35
Net Profit for the year 43.38 373.51
Total Other Comprehensive Income (78.24) 7.73
Total Comprehensive Income for the period (34.86) 380.82
Appropriation :
Transfer to Reserve & Surplus - -
Surplus/(Deficit) in the Statement of Profit & Loss Account 43.38 373.51


Mohota Industries Limited (Formerly- The Rai Saheb Rekhchand Mohota Spg. & Wvg.Mills Ltd.) ("The Company") is one of the oldest Composite Textile Mill inVidarbha region of Maharashtra. The Company has its Corporate Head Office at HinganghatDist – Wardha Maharashtra.


Your company reported a reduction of 14.82% in top-line over the previous year. TheGross Revenue stood at Rs 30458.69 Lakhs compared with Rs 35759.19 Lakhs in the previousyear. The Profit before tax stood at Rs 53.54 Lakhs as against Rs 613.66 Lakhs in theprevious year. Profit before tax decreased by 91.11% as compared to previous year. The NetProfit for the year stood at Rs 43.38 Lakhs against Rs 373.51 Lakhs in the previous year.Total Comprehensive Income for the period stood at Rs -34.86 lakhs compared with Rs 380.82lakhs in previous year.

The Company had ventured into real estate development business the company had enteredJV agreement with Armors Developers Pvt. Ltd for the development of the multiple projectshowever due to poor market conditions and clearances issues from the authorities and otherissues JV partner is unable to perform its obligation therefore Board decided to withdrawfrom the agreements with the JV Partner.

Further looking at the current market scenario Company also proposed to Disinvestmentits share in the M/s. KC Mohunta & Brother Nagpur subject to the approval of Membersat the ensuing Annual General Meeting.

Company has also decided to close its ‘Process Department' as company is facingpoor demand and not able to run process house to its full capacity. Further due to highlabor cost old obsolete machineries and cost of environmental protection company isfacing continuous losses in the process division. Therefore board thinks it's prudent toseek closure of the process division subject to the approval and clearances from therespective authorities.


In view of the planned business growth the board of directors of your company deems itproper to preserve the resources of the Company for its business activities and thereforehas decided not to recommend any Dividend for the period under review.

The Board of Directors of your company has decided not to transfer any amount to theReserves for the year under review


The paid-up Equity Share Capital as on March 31 2019 stood at Rs 1470.71 Lakhs. Duringthe period under review Company has issued and allotted 117647 Equity shares at Rs 425/-per shares (including a premium of Rs 415/- per share) to Shri Vinod Kumar MohotaPromoter of the Company in its meeting held on 07th July 2018 on preferential basis.During the year under review the Company has not issued any Sweat Equity shares Bonusshares or provided any Stock Option Scheme to the employees. None of the Directors of theCompany hold instruments convertible into equity shares of the Company. Company has notbought back any of its securities.

5. Performance Highlights

During the year under report the company's total sales registered declined of 14.82%to Rs 30458.19 Lakhs from Rs 35759.19 Lakhs in the previous financial year. The GrossOperating Profit for the current financial year stood at Rs 1393.56 Lakhs as compared toRs 1900.95 Lakhs for previous financial year and Net Profit after tax stood at Rs 43.38Lakhs as compared to Rs 373.51 Lakhs in the previous financial year. Further the TotalComprehensive Income for the period stood at Rs -34.86 lakhs compare with Rs 380.82 lakhsin previous year.

Raw Material

The fundamental strength of the textile industry is its strong production base of widerange of fibre and yarns – from natural fibres like cotton jute silk and wool tosynthetic and manmade fibres such as polyester viscose nylon and acrylic. The challengehere is the fluctuation in prices of the raw materials like polyester & Cotton andincrease in fuel prices which increase the input costs.

Retail Network

Company has a large retail network spread all over the country. It has more than thirtyagents and over two thousand retailers who help the Company to sell its goods across thecountry.


During the year under review company had allotted 117647 Equity shares at Rs 425/- pershares (including a premium of Rs 415/- per share) to Shri Vinod Kumar Mohota PromoterDirector of the company on preferential basis.

During the year under review the Rating agency ‘BRICKWORK' has upgraded therating from "BBB" to "BBB+" for the Company's long term borrowings andupgraded from A3+ to A2 for the Company's short term borrowings.

As mandated by the Ministry of Corporate Affairs the financial statements for the yearended on March 31 2019 has been prepared in accordance with the Indian AccountingStandards (Ind AS) notified under Section 133 of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 as amended from time to time. The estimates andjudgements relating to the Financial Statements are made on a prudent basis so as toreflect in a true and fair manner the form and substance of transactions and reasonablypresent the Company's state of affairs profits and cash flows for the year ended March31 2019. The Notes to the Financial Statements adequately cover the Standalone AuditedStatements and form an integral part of this 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 the Company's Auditorsconfirming compliance forms an integral part of this report as Annexure-G.


The details as required under section 92(3) of the Companies Act 2013 read with rule12 of the Companies (Management and Administration) Rules 2014 is furnished in form MGT-9is enclosed herewith as Annexure – A and forms an integral part of this Directorsreport.


In accordance with the provisions of section 152 of the Companies Act 2013 and theCompany's Articles of Association Shri Vinod Kumar Mohota (DIN: 00247348) director ofthe Company retire by rotation at the forthcoming Annual General Meeting being eligibleoffer himself for re-appointment.

Board of Directors in its Board meeting held on 14th February 2019 on therecommendation of Nomination and Remuneration committee and subject to the approval ofshareholders reappointed Shri Vinod Kumar Mohota Chairman & Managing Director andShri Vinay Kumar Mohota Whole Time Director for the further period of 3 years i.e. from01.04.2019 to 31.03.2022. The Board recommends their re-appointment for the considerationof the members of the Company at the ensuing Annual General Meeting.

The Directors express their grief for the untimely death of Shri Ranchhoddas MathuradasMohota (DIN:00247357) Non-Executive Non-Independent Chairman of the Company on September5 2018. The Directors place on record their deep appreciation for his valuable guidanceand assistance received during the tenure as Chairman and Director/ Member of variouscommittees of the Board of Directors of the Company.

Shri Girdharlal Singhee (DIN: 01479800) Shri Suresh Rathi (Din: 00474117) IndependentDirectors and Shri Shantilal Binjraj Singhavi (DIN: 00247332) Executive Director wereceased to be the directors on the Board w.e.f. 31.03.2019 on the completion of theirtenure.

The Board has appointed Shri Santosh Kumar Rajpuria (DIN 03106216) as an AdditionalDirector with effect from February 14 2019. In terms of Section 161 of the Act ShriSantosh Kumar Rajpuria holds office up to the date of ensuing Annual General Meeting. TheCompany has received requisite notice in writing from a member proposing his name for theoffice of Director. Board recommends his appointment as Whole Time Director on the Boardof Directors of the Company in accordance with Section 196 of the Act to hold office fora term of 3 (three) years for the consideration of the members at the ensuing GeneralMeeting.

The Board of Directors on recommendation of the Nomination and Remuneration Committeeappointed Shri Likhit Masram (DIN: 07979917) and Shri Ravindra Raghunandan Paliwal (DIN:02336166) as additional directors in the category of Independent Director w.e.f. February14 2019 and March 30 2019 respectively. The Company has received requisite notices inwriting from the members proposing their names for the office of Directors. Boardrecommends their appointment as an Independent Directors on the Board of Directors of theCompany in accordance with Section 149(4) of the Act to hold office for a term of 5(five) consecutive years for the consideration of the members at the ensuing GeneralMeeting.

Smt. Ritu Kabra (DIN: 07402599) Independent Woman Director has resigned from the Boardw.e.f. 18 June 2019 due to personal reasons.

All Independent Directors of the Company have given declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1) (b) of the Listing Regulations 2015 they also confirm that they are not aware of anycircumstance or situation which exist or may be reasonably anticipated that could impairor impact their ability to discharge their duties with an objective independent judgmentand without any external influence and that they are independent of the management.

In the opinion of the Board the Independent Directors fulfill the conditions ofindependence specified in Section 149(6) of the Act and Regulation 16(1) (b) of theListing Regulations. The Independent Directors have also confirmed that they have compliedwith the Code for Independent Directors prescribed in Schedule IV to the Act and also Codeof Conduct for directors and senior management personnel Brief profile of the appointingdirectors has been provided in the Notice convening Annual General Meeting.


Company has following Key Managerial Personnel pursuant to section 203 of the CompaniesAct 2013

Sr. No. Name of the Person Designation
i Shri Vinod Kumar Mohota Chairman & Managing Director
ii Shri Vinay Kumar Mohota Whole-time Director
iii Shri Mukesh B. Mahajan Chief Financial Officer
iv Shri Sachin N. Kanojiya Company Secretary

Remuneration and other details of Key Managerial Personnel for the year ended March 312019 are provided in the Extract of Annual Return is attached as " Annexure A" .


Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 a structured questionnaire was preparedand reviewed based on the evaluation policy after taking into consideration the variousaspects of the Board's functioning composition of the Board and its committees cultureexecution and performance of specific duties obligations and governance.

The Company has received necessary declarations from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 and Regulation 16 (b) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 that the IndependentDirectors of the Company meet with the criteria of their Independence laid down in Section149(6).

The performance evaluation of the independent Directors Board as whole and individualDirectors was completed. The performance evaluation of the Chairman and theNon-Independent Directors were carried out by the Independent Directors. The Board ofDirectors expressed their satisfaction with the evaluation process.


During the year under consideration 5 (Five) Board Meetings were convened and heldThe details of the meetings of the Board and other Committees held during the FinancialYear 2018-19 forms part of the Corporate Governance Report.


The Board of Directors have the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee)

4. Corporate Social Responsibility Committee.

5. Risk Management Committee

6. Executive Committee of the Board

The details of the Committees along with their composition number of meetings andattendance at the meetings are provided in the Corporate Governance Report.


Details of loan Guarantee or Investments made by the Company under Section 186 of theCompanies Act 2013 are given in the notes to Financial Statements.


The Company has a Whistle-blower policy & Vigil Mechanism pursuant to theprovisions of section 177(9) & (10) of the Companies Act 2013 and as per ListingRegulation for their Directors and Employees to report their genuine concerns orgrievances. The policy has been posted on the website of the Company .


The Board of Directors has formulated the Nomination & Remuneration policy for itsDirectors key managerial personnel and senior employees keeping in view the following:the level and composition of remuneration is reasonable and sufficient to attract retainand motivate Directors of the quality required to run the company successfully;relationship of remuneration to performance is clear and meets appropriate performancebenchmarks; and remuneration to directors key managerial personnel and senior managementinvolves a balance between fixed and incentive pay reflecting short and long-termperformance objectives appropriate to the working of the company and its goals:

This policy also lays down criteria for selection and appointment of Board Members.Details of this policy can be accessed at Company's web-site at .


Company has developed and implements Risk Management Policy including identification ofelements of risk which in the opinion of the Board may threaten to the existence of theCompany. Board and Audit Committee periodically reviewed/evaluates the risk managementframework so that the future risk can be minimized.


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 are not attracted. Further there are no Material Related Partytransactions during the year under review with the Promoters Directors or Key ManagerialPersonnel. The disclosure in form AOC-2 is attached as Annexure-B. The Company hasdeveloped a Related Party Transactions framework through Standard Operating Procedures forthe purpose of identification and monitoring of such transactions.

All Related Party Transactions are placed before the Audit Committee and also to theBoard for approval. Transactions which are of repetitive nature are reviewed on aquarterly basis and a statement giving details of all Related Party Transactions wasplaced before the Audit Committee and the Board for review and approval.

The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company. The web-link of the same has been provided in theCorporate Governance Report.


There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.


Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of knowledge and ability hereby confirm: (i) That in the preparation of the AnnualAccounts for the year ended March 31 2019 the applicable accounting standards have beenfollowed along with proper explanation relating to material departures if any;

(ii) That the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31 2019 andof the profit of the Company for the year ended on that date;

(iii) That the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(iv) That the directors have prepared the annual accounts on a going concern basis;

(v) That the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

(vi) That the directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.


M/s M.M. Parikh & Co. Chartered Accountants (Firm Registration Number: 107557W)have tendered their resignation from the position of Statutory Auditors due to healthissues resulting into a Casual vacancy in the office of Statutory Auditors of the Companyas envisaged by section 139(8) of the Companies Act 2013. Casual vacancy caused by theresignation of auditor can be filled by the shareholders in General Meeting within threemonths from the date of recommendation of the Board of Directors of the Company.

The Board of Directors in its board meeting held on August 14 2019 recommended theappointment of M/s. Harshil Shah & Company Chartered Accountants (ICAI Registrationno. 141779W) Mumbai be appointed as Statutory Auditors of the Company to fill the casualvacancy caused by the resignation of M/s M.M. Parikh & Co. Chartered AccountantsMumbai and M/s. Harshil Shah & Company shall hold the office as the Statutory Auditorsof the Company from the conclusion of this Annual General Meeting until the conclusion ofthe next Annual General Meeting. Appointment of the Statutory Auditor is being sought fromthe members at the ensuing Annual General Meeting.

The Company has received consent and written confirmation from M/s. Harshil Shah &Company that their appointment if made would be in conformity with limit specified inthe said section.

Auditor express following opinion on the financial results during the year underreview:

1. The Company has invested Rs 11 Crore in a partnership firm. The financial statementof the said partnership firm for the year ended 31st March 2019 were not availablehence the impact on the profit and corresponding impact on the carrying amount ofinvestment is not ascertainable.

The observations made in the Auditor's Report are dealt with separately in the Notes tothe Statement of Profit and Loss and the Balance Sheet in Note No. 29 to 39 of theAccounts. These are self-explanatory and do not call for any further comments.


As per the requirement of Central Government and pursuant to Section 148(3) of theCompanies Act 2013 and Rules 6(2) read with the Companies (Cost Records and Audit) Rules2014 as amended from time to time the Company has been carrying out audit of cost recordsevery year.

The Board of Directors on the recommendation of the Audit Committee has re-appointedM/s Khanuja Patra & associates Cost Accountants (Firm Registration No.: 000214) asCost Auditor to audit the cost records of the Company for the Financial Year 2019-20. Asrequired under the Companies Act 2013 a resolution seeking members' approval for theremuneration payable to the Cost Auditor forms part of the Notice convening the AnnualGeneral Meeting for their ratification.


Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethere under the Company has appointed M/s DM & Associates Company secretaries LLPCompany Secretary (ICSI unique Code: L2017MH003500) to undertake the Secretarial Audit ofthe Company for Financial Year 2019-20. The Secretarial Audit Report for Financial Year2018-19 is included as Annexure – C and forms an integral part of this Report.

There is no audit qualification by the Secretarial Auditor for the year under review.


The Company accords priority to the health and safety of its employees andsurroundings. It has been taking proper care in complying with all the statutoryrequirements relating to safety environment and pollution control: following are themeasures taken by the company.

1. Company has taken the services of professional ETP Technician from time to time tocontrol all pollution and environment related issues of ETP plant of the Company. Howevercompany does not have the proper equipments as per the requirement of pollution controlboard and company requested for the further time period to comply the same as it requiresheavy capital expenditure.

2. The company planted Trees across the plant sites at Hinganghat and Burkoni.

3. The Company has organised various in-plant safety training sessions for its workersand staff members.


The information on conservation of energy technology absorption and foreign exchangeearnings and outgo pursuant to Section 134(3)(m) of the Companies Act 2013 read with theRule 8(3) of the Companies (Accounts) Rules 2014 is given in Annexure – D to thisReport.


The information required under Section 197(12) of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is furnishedIn Annexure- E and forming part of the Directors' Report for the year ended March 312019.

The Company at present does not have any employee drawing salary in excess of the limitspecified under section 197 of CompaniesAct 2013.


The Company does not have any subsidiary/subsidiaries within the meaning of CompaniesAct 2013.


The Company has not accepted any deposits from public. Therefore the requirement ofChapter V of the Companies Act 2013 is not applicable to it.


The company has a policy on Corporate Social Responsibility and the same has beenposted on the website of the company at The Annual Report on CSRActivities in terms of the requirements of Companies (Corporate Social ResponsibilityPolicy) Rules 2014 is annexed as Annexure- F which forms part of this report.



The Company laid down an Anti Sexual Harassment Policy in line with the requirements ofthe Sexual Harassment of Women at Workplace (prevention prohibition and redressal) Act2013. An Internal Complaints Committee has been set up to redress complaints received inthis regard. All employees (permanent contractual temporary trainees) are covered underthis policy. No sexual harassment complaints were received during the year 2018-19.


Statement in this Director's Report including Management Discussion and Analysisdescribing the Company's objective projections estimates expectations or predictionsmay be "Forward Looking Statements" within the meaning of applicable securitieslaws & regulation. Actual results might differ materially from those expressed orimplied. Important factors that could make a difference to the Company's operationsinclude among others economic conditions affecting demand/supply and price conditions inthe market in which the company operates changes in the Government regulations tax lawsand other statutes and incidental factors.


The Directors wish to place on record their appreciation and gratitude for all theco-operation extended by Government Agencies Bankers Financial Institutions andShareholders. The Directors also record their sense of appreciation for the sincereservices rendered by all the Executives and Staff of the company and for their valuablecontribution in the working of the company.

On Behalf of the Board
Place: HINGANGHAT Vinod Kumar Mohota
Date: 14/08/2019 Chairman & Managing Director