The Directors have pleasure in presenting the 27th annual Report of the company together with the Audited Financial Statements for the year ended 31st March, 2017.
FINANCIAL RESULT AND PERFORMANCE: (Rs. in Lakhs except EPS)
PARTICULARS
|
STANDALONE
|
CONSOLIDATED
|
31/03/2017
|
31/03/2016
|
31/03/2017
|
31/03/2016
|
Sales
|
15,333.29
|
13,616.25
|
15,353.90
|
13,629.96
|
Other income
|
151.30
|
147.22
|
150.84
|
147.17
|
Profit Before Interest & Depreciation
|
1,256.55
|
1,349.03
|
1,258.46
|
1,348.61
|
(-)Finance Cost
|
698.96
|
663.96
|
700.83
|
664.43
|
(-) Depreciation
|
418.58
|
395.71
|
418.58
|
395.71
|
Net Profit before tax & Exceptional items
|
139.01
|
289.36
|
139.05
|
288.47
|
( )Exceptional Items
|
5.89
|
24.25
|
5.89
|
24.25
|
Net Profit Before Tax
|
144.90
|
313.62
|
144.94
|
312.72
|
( ) Prior period item
|
11.63
|
-
|
11.63
|
-
|
(-) Tax Expense
|
2.34
|
96.06
|
2.35
|
96.06
|
Share in Profit of Associates & Minority Interest
|
-
|
-
|
27.04
|
0.78
|
Net Profit for the year after tax
|
154.20
|
217.56
|
181.27
|
217.44
|
Earnings per share (Basic & Diluted) (In ?)
|
1.09
|
1.54
|
1.28
|
1.54
|
1. DIVIDEND
With a view to conserve the resources for the company's Business operations, your directors have deemed it prudent to not to recommend any dividend for the year ended 31st March, 2017. During the year under review, no amount from profit was transferred to General Reserve.
2. SHARE CAPITAL
The Paid up equity share capital as on March 31, 2017 was Rs. 1415.76 lakhs divided into 14,157,575 equity shares of Rs.10 each. During the year under review, the Company has neither issued any shares/convertible warrant nor has granted any stock options and nor sweat equity.
3. STATE OF THE COMPANY'S AFFAIRS
During the year under review, your Company has recorded its revenue from operations as Rs.15,333.29 lakhs against revenue recorded of Rs.13,616.25 lakhs in the previous year. The EBIDT recorded at Rs.1,256.55 lakhs against last year's figure of Rs.1,349.03 lakhs. Net profit after tax is Rs.154.20 lakhs. Your company has 17 Texturising Machines, 150 High Speed Shuttle-less Looms and 144 Conventional Shuttle Looms with a capacity to manufacture 22,000 tonnes of Draw Texturised Yarn (DTY) per annum and 12 Million meters Grey fabrics per annum respectively.
4. EXPORT
The Company has exported DTY Yarn with a Premium and in its Brand Name to Thailand, Czech Republic, Denmark, Germany, Bulgaria, Indonesia, United Kingdo, Mexico, Brazil, Guatemala, Vietnam, South Korea, Turkey, Algeria and many more Countries. The Company is having Export House Status. During the year under review, your Company has recorded export of Rs.7,174 lakhs as compared to Rs.5,584 lakhs in previous year. 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 the annual 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 and its associates is prepared in accordance with AS- 21 on Consolidated Financial statements and Equity method of accounting given in AS - 23 on "Accounting of Investments in Associates in Consolidated Financial statements". The details of such subsidiary and associates are as follows:-
Sr. No.
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Name of company
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Nature of relation
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1.
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Maxum Metals Private Limited
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Subsidiary
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2.
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Mohit Overseas Limited
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Associates
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3.
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Mohit Yarns Limited
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Associates
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4.
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Mohit E-waste Recovery Private Limited
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Associates
|
7. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
The Company has one subsidiary as on March 31, 2017. There are three associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act") as on 31st March, 2017.
Pursuant to provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing 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 part of this Annual Report.
8. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS REPORT
As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on corporate governance practices followed by the Company, together with a certificate from Mr. Dhiren Dave, Company Secretary in practice, confirming compliance and Management Discussion Analysis Report forms an integral part of this Annual Report.
9. FIXED DEPOSITS
During the year under review the company has not accepted any deposits within the meaning of section 73 of the Companies Act, 2013 and the rules made there under.
10. DIRECTORS
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company's Articles of Association, Mr. Naresh Saboo, Director (DIN: 00223350) will retire by rotation at the ensuing Annual General Meeting and, being eligible, has offered himself for re-appointment. The details of the aforesaid Directors, his 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 General Meeting. During the financial year Mr. Harmil Shah was appointed as Independent Director of the company for period of five years w.e.f 23.08.2016 and Mr. Dharmesh Patel has resigned from the directorship w.e.f 12.09.2016.
11. DECLARATION FROM INDEPENDENT DIRECTORS
The Independent Directors have submitted their declaration to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 read with rules framed thereunder.
12. BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of Committees. The performance of the Board / Committee was evaluated after seeking inputs from all the Directors / Committee members on the basis of the defined criteria including composition and structure, effectiveness of meetings, information and functioning. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated, on the basis of relevant knowledge, expertise, experience, devotion of time and attention to company's long term strategic issues and understanding of duties, roles and function as Independent Director. The Directors expressed their satisfaction with the evaluation process.
13. NUMBER OF MEETINGS HELD
The Board met six times during the financial year, the details of which are given 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 the Companies Act, 2013 and the Listing Regulations.
14. POLICY ON DIRECTOR'S APPOINTMENT, REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration including criteria for determining qualifications, positive attributes and other matters provided under sub section (3) of section 178 of the Companies Act 2013. The Company's Remuneration Policy for Directors, Key Managerial Personnel and other employees is annexed as Annexure- 2 to the Director's Report and also available on Company's website www.mohitindustries.com.
15. VIGIL MECHANISM / WHISTLE BLOWER POLICY
In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behavior, the Company has adopted a Vigil mechanism/ Whistle Blower Policy. This policy is also posted on the Company's website www.mohitindustries.com.
16. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company has formulated a familiarization program for the Independent Directors to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly to the Company. The details of such program are available on the Company's website www.mohitindustries.com.
17. COMPOSITION OF KEY MANAGERIAL PERSONNEL (KMP)
The Company has the following KMP;
Name of KMP
|
Designation
|
Date of Appointment in current Designation
|
Date of Resignation
|
Mr. Narayan Saboo
|
Managing Director
|
28/09/2015
|
N.A
|
Mr. Manish Saboo
|
Director & CFO
|
30/05/2014
|
N.A
|
Miss. Swati Malu
|
Company Secretary
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17/12/2012
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N.A
|
18. COMPOSITION OF AUDIT AND NOMINATION & REMUNERATION COMMITTEE
The Audit Committee comprises of Mr. Sachin Jain (Chairman), Mr. Jayesh Gandhi (Member) and Mr. Narayan Saboo (Member). The Nomination and Remuneration Committee comprises of Mr. Sachin Jain (Chairman), Mr. Jayesh Gandhi (Member) and Mrs. Pragya Memani (Member). Brief details on the committee are given in the Corporate Governance Report. All the 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 and explanations obtained 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 year ended 31st March, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures; the annual accounts have been prepared in compliance with the provisions of the Companies Act, 2013
b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for year ended on that date;
c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the Company and that such internal financial controls are adequate and are operating effectively;
f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
20. STATUTORY AUDITORS
In terms of Section 139(1) of the Companies Act, 2013, no listed company can appoint or re-appoint an audit firm (including its affiliate firm) as auditor for more than two terms of five consecutive years. The Act also provided for additional transition period of three years from the commencement of the Act, i.e. from April 1, 2014. M/s. RKM & Co., Chartered Accountants, having Registration No. 108553W, are Statutory Auditors of the Company since 1991. Accordingly, M/s. RKM & Co., Chartered Accountants have completed period of ten years and will also be completing the additional transition period of three years at the conclusion of ensuing 27th Annual General Meeting and now company need to comply with the requirements of mandatory rotation of existing auditor.
The Board of Directors of your Company, on the basis of recommendation of the Audit Committee, has recommended the appointment of M/s. Rajendra Sharma & Associates, Chartered Accountants (FRN: 108390W), as the Statutory Auditors of the Company for a term of five consecutive years from conclusion of the 27th Annual General Meeting of the Company up to the conclusion of the 32nd Annual General Meeting of the Company and in this connection resolution seeking member's approval forms part of the Notice convening the 27th Annual General Meeting of the Company. M/s. Rajendra Sharma & Associates, Chartered Accountants (FRN: 108390W) have submitted a certificate to your Company stating that their appointment, if made, shall be within the limits prescribed under the Companies Act, 2013 and that they satisfy the criteria prescribed under Section 141 of the Companies Act, 2013.
AUDITORS' REPORT
Members' attention is invited to the observation made by the Auditors under "Qualified Opinion" appearing in Auditors Reports.:
The Company has not provided for Long Term Employee Benefits such as Gratuity and Leave Encashment on accrual basis but provides the same as and when they become due for payment. This method of accounting of Long Term Employee Benefits is in deviation with Accounting Standard-15 on Employee Benefits in respect of provision for Long Term Employee Benefit & Defined Benefit plans. As there is no actuarial report or basis of calculation available with the management of such long term employee benefits, the quantum of deviation cannot be determined. If the company had followed the method accounting as per /AS - 15, then employee benefit expense would have increased and correspondingly long term provision would have also increased for such employee benefits.
"The Board is of the opinion that the Provision for the Long term Employees are determined on the basis of actuarial Valuation Method & technique prescribed in the Accounting Standard. The Consulting fees by actuaries for determining the Provision for long term benefit Plan is even higher than the Annual Liability of the company for Long term benefits. The company has decided to pay the Long term benefits as and when it becomes due as the amount is negligible and it is not going to make any impact on the financial Position of the company. Considering the size of the company and negligible liability, the company has not made provisions for Long term employee benefits & Defined benefits plan"
Members' attention is invited to the observation made by the Auditors under "Emphasis of matter" appearing in Auditors Reports.: Attention to note No. 27(i) on "Contingent Liabilities" forming part of financial statements which describes various tax demands liabilities against the Company under litigation, if decided against the company may have an adverse effect on the functioning of the company"
"The Board is of the opinion that Pursuant to Order dated 13.08.2015 of the Gujarat Value Added Tax Tribunal at Ahmedabad, Gujarat Vat demand pending before Gujarat VAT Department has been decided in the Company's favour. This will absolves the contingent liabilities of company related to Gujarat VAT (Tax and Penalty) pending before the Gujarat Value Added Tax Tribunal on year to year basis. Pursuant to said order of Gujarat Value Added Tax Tribunal, demands relating to Gujarat Entry Tax is also as similar as to case of Gujarat Vat Demand. For demand relating to Excise duty/excise rebates rejected pending at appellate stages, Board is of view that the demand raised is not sustainable.
21. COST AUDITOR
The Board of Directors, on the recommendation of Audit Committee, has appointed M/s. Pasari & Associates, Cost Accountants, (Firm Registration Number 100928) as Cost Auditor to conduct the audit of company's cost records for the financial year 2017-18 at a remuneration of Rs.60,000/- (Rupees Sixty Thousands only) plus applicable service tax and reimbursement of out of pocket expenses. As required under the Companies Act, 2013, the remuneration of Cost Auditors as approved by the Board of Directors is subject to ratification by the shareholders at the ensuing Annual General Meeting and in this connection resolution seeking member's approval forms part of the Notice convening the 27th Annual General Meeting.
22. SECRETARIAL AUDIT
Mr. Dhiren R Dave, Surat, Practicing Company Secretaries were appointed to conduct the secretarial audit of the Company for the financial year 2016-17, as required under Section 204 of the Companies Act, 2013 read with rules framed there under. The Secretarial Audit Report for F.Y 2016-17 is annexed as Annexure-3 to the Director's Report. There is no secretarial 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, 2013 form 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's length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 and the Rules made thereunder are not attracted. Thus, disclosure in form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. The transactions with related parties as per requirements of Accounting Standard (AS-18) - 'Related Party Disclosures' are disclosed in Note No. 36 of Notes to Accounts. All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. Omnibus approval was obtained for transactions which are of repetitive nature. The policy on materiality of Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company. The web-link of the same has been provided in the Corporate Governance Report. None of the Directors/KMP has any pecuniary relationship or transactions vis-a-vis the Company.
25. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the Company by way of Risk Management Policy. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and mitigating risks associated with the business. The policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues. In today's challenging and competitive environment, strategies for mitigating inherent risks associated with business and for accomplishing the growth plans of the Company, are imperative. The common risks inter alia are risks emanating from; Regulations, Competition, Business, Technology obsolescence, Investments, retention of talent, finance, politics and fidelity. As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same. The Risk Management Policy is also hosted on the Company's website www.mohitindustries.com.
26. MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There are no material changes or commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this Report. However, the company has received Rs.8.5 crores as Vat refund on 19.05.2017 in reference to case for Gujarat Vat Demand before Gujarat Value Added Tribunal that has been decided in company's favour vide Gujarat VAT tribunal order dated 13.08.2015 and The Hon'ble Gujarat high Court order dated 09.01.2017 directed to Gujarat Vat department for refund of credit due to the company. This will absolve the contingent liability in relation to Gujarat Vat Demand.
27. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference to financial statements. The Company's internal control system is commensurate with its size, scale and complexities of its operations. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.
28. INSURANCE
The Company's building, plant and machineries, Stocks and other properties wherever necessary 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 and the National Stock Exchange of India Limited. The Company has paid annual listing fees to the both stock exchanges for the financial year 2017-18.
30. REMUNERATION AND PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Companies Act, 2013 read with Rule 5(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 all levels.
32. TRANSFER OF UNPAID/UNCLAIMED AMOUNTS TO IEPF
During the period under review as there were no amount of Unclaimed Dividend and interest thereon, which remained unpaid/ unclaimed for a period of 7 years, required to be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to provision of Section 125 of the Companies Act, 2013.
33. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed as Annexure- 5 to the Director's Report.
34. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL), ACT, 2013
The Company has an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Your Directors further state that during the year under review, No compliant was received from any employee during F.Y 2016-17 and hence no complaint is outstanding as on 31st March, 2017 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 passed by the Regulators or Courts or tribunals impacting the going concern status and your Company's operations in future.
36. ACKNOWLEDGMENT
The Board of Directors wishes to place on record its appreciation for the commitment, dedication and hard work done by the employees in the Company and the cooperation extended by Banks, Government authorities, customers and shareholders of the Company and looks forward to a continued mutual support and co-operation.
For and on behalf of the Board of Directors
For Mohit Industries Limited
Date : 21 06 2017 Sd/-
(SITARAM SABOO)
Place : Surat
Chairman
|