Dear Members,
Your Directors are pleased to present the (74th) Seventy-Forth Annual Report on the
business and operation of the Company together with the Audited Financial Statement for
the year ended March 31, 2021. A summary of the Financial Results is given below. The
Management discussion and analysis is also included in this report.
|
|
(Rs. in Lakhs) |
FINANCIAL RESULTS |
For the year ended 31st March, 2021 |
For the year ended 31st March, 2020 |
Gross Revenue |
855.48 |
11,429.45 |
Gross Profit (before interest, depreciation & tax) |
(598.08) |
(2094.27) |
Less: Interest |
853.20 |
998.76 |
Depreciation |
302.85 |
307.17 |
Profit before tax & extraordinary Item |
(1754.14) |
(3400.20) |
Less: Provision for tax |
|
|
Mat Current |
- |
- |
Deferred |
- |
(320.80) |
Net Profit for the year |
(1754.14) |
(3079.40) |
Total Other Comprehensive Income |
- |
(2.59) |
Total Comprehensive Income forthe period |
(1754.14) |
(3081.99) |
Appropriation : |
|
|
Transfer to Reserve & Surplus |
- |
- |
Surplus/(Deficit) in the Statement of Profit & Loss Account |
(1754.14) |
(3079.40) |
1. CORPORATE OVERVIEW
Mohota Industries Limited (Formerly- The Rai Saheb Rekhchand Mohota Spg. & Wvg.
Mills Ltd.) ("The Company") is one of the oldest Composite Textile Mill in
Vidarbha region of Maharashtra. The Company has its Corporate Head Office at Hinganghat,
Dist -Wardha, Maharashtra.
2. FINANCIAL PERFORMANCE AND DEVELOPMENT
During the year company ran its unit on job work basis. The Gross Revenue of the
company reduced to Rs.855.48 lakhs compared with Rs.11,429.45 Lakhs in the previous year.
The Net loss stood at Rs.1754.14 Lakhs as against Rs.3079.40 Lakhs in the previous year.
The closure of the Company's unit has posed a challenge for the Company to resume
operations. Your Directors are exploring alternate avenues to make the units operative.
3. DIVIDEND AND RESERVE
In view of the Company's business loss, the Board of Directors of your Company has
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 the
Reserves for the year under review.
4. SHARE CAPITAL
The paid-up Equity Share Capital as on March 31,2021 stood at '1470.71 Lakhs. During
the period under review Company has not issued any preference shares, Sweat Equity shares,
Bonus shares or provided any Stock Option Scheme to the employees. None of the Directors
of the Company hold instruments convertible into equity shares of the Company. Company has
not bought back any of its securities.
5. FINANCE AND ACCOUNTS
During the financial year due to lock down and lack of working capital, the Company's
total production remains vulnerable and company worked on Job Work basis.
During the year under review, the company did not carry out any rating activity from
Credit Rating Agency due to NPAof Company's account. Last Rating given by BRICKWORK'
was "D" for the Company's long term borrowings and Company's short term
borrowings.
As mandated by the Ministry of Corporate Affairs, the financial statements for the year
ended on March 31,2021 has been prepared in accordance with the Indian Accounting
Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with the
Companies (Accounts) Rules, 2014 as amended from time to time. The estimates and judgments
relating to the Financial Statements are made on a prudent basis, so as to reflect in a
true and fair manner, the form and substance of transactions and reasonably present the
Company's state of affairs, profits and cash flows for the year ended March 31,2021. The
Notes to the Financial Statements adequately cover the Standalone Audited Statements and
form an integral part of this Report.
Impact of Global Crisis: COVID-19
In March 2020, the World Health Organisation (WHO) declared COVID-19 a global pandemic.
Consequent to this, Government of India declared nation-wide lockdown on March 24, 2020,
which has impacted normal business operations of the Company. Our factory had to be closed
for about first quarter to follow the Standard Operating Procedure (SOP) prescribed by
both the Central and State Governments. We resumed the production from mid of second
quarter on Job Work basis. However due to absence of working capital and freezing of bank
account due to NPA, company was notable to utilize its full capacity.
6. CORPORATE GOVERNANCE
As per Regulation 34 (3) read with Schedule Vof 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 the Company's Auditors
confirming compliance, forms an integral part of this report as Annexure-E.
7. EXTRACT OF ANNUAL RETURN
The Annual Return for the period ended March 2021 will be available on the company's
Web site atwww.mohotaindustries.com after conclusion of74thAGM.
8. DIRECTORS
In accordance with the provisions of section 152 of the Companies Act, 2013 and the
Company's Articles of Association, Shri Vinod Kumar Mohota, director of the Company,
retire by rotation at the forthcoming Annual General Meeting being eligible, offer himself
for re-appointment.
The Board of Directors on recommendation of the Nomination and Remuneration Committee
appointed Shri Pradip Wasudeorao Harne (DIN: 09084304) as additional directors in the
category of Executive Director w.e.f. March 1, 2021. The Company has received requisite
notices in writing from the members proposing his name for the office of Director. Board
recommends his appointment as Whole Time Director on the Board of Directors of the
Company, to hold office for a term of 3 (Three) years for the consideration of the members
at the ensuing General Meeting.
Shri Santosh Kumar Rajpuria (DIN: 03106216), Whole Time Director has resigned from the
Board w.e.f. 1 March, 2021 due to health issue.
All Independent Directors of the Company have given declarations that they meet the
criteria of independence as laid down under Section 149(6) of the Act and Regulation
16(1)(b) of the Listing Regulations. They also confirm that they are not aware of any
circumstance or situation, which exist or may be reasonably anticipated, that could impair
or impact their ability to discharge their duties with an objective independent judgment
and without any external influence and that they are independent of the management.
In the opinion of the Board, the Independent Directors, fulfill the conditions of
independence specified in Section 149(6) of the Act and Regulation 16(1) (b) of the
Listing Regulations. The Independent Directors have also confirmed that they have complied
with the Code for Independent Directors prescribed in Schedule IV to the Act and also Code
of Conduct for directors and senior management personnel, Brief profile of the appointing
directors has been provided in the Notice convening Annual General Meeting.
9. KEY MANAGEMENT PERSONNEL
Company has following Key Managerial Personnel pursuant to section 203 of the Companies
Act, 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 31,
2021 are provided in the Extract of Annual Return and Corporate Governance Report.
10. BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, a structured questionnaire was prepared
and reviewed based on the evaluation policy after taking into consideration the various
aspects of the Board's functioning, composition of the Board and its committees, culture,
execution and performance of specific duties, obligations and governance.
The Company has received necessary declarations from each Independent Director of the
Company under Section 149(7) of the Companies Act, 2013 and Regulation 16 (b) of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 that the Independent
Directors of the Company meet with the criteria of their Independence laid down in Section
149(6).
The performance evaluation of the independent Directors, Board as whole and individual
Directors was completed. The performance evaluation of the Chairman & Managing
Director and the Non-Independent Directors were carried out by the Independent Directors.
The Board of Directors expressed their satisfaction with the evaluation process.
11. NUMBER OF MEETINGS OF THE BOARD
During the year under consideration, 7 (Seven) Board Meetings were convened and held,
The details of the meetings of the Board and other Committees held during the Financial
Year2020-21 forms part of the Corporate Governance Repor
12. COMMITTEES OF THE BOARD
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 and
attendance at the meetings are provided in the Corporate Governance Report.
13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BYCOMPANY
Details of loan, Guarantee or Investments made by the Company under Section 186 of the
Companies Act, 2013, are given in the notes to Financial Statements.
14. VIGIL MECHANISM/WHISTLE-BLOWER POLICY
The Company has a Whistle-blower policy & Vigil Mechanism pursuant to the
provisions of section 177(9) & (10) of the Companies Act, 2013 and as per Listing
Regulation for their Directors and Employees to report their genuine concerns or
grievances. The policy has been posted on the website of the Company
atwww.mohotaindustries.com.
15. NOMINATION AND REMUNERATION POLICY
The Board of Directors has formulated the Nomination & Remuneration policy for its
Directors, key managerial personnel and senior employees keeping in view the following:
the level and composition of remuneration is reasonable and sufficient to
attract, retain and motivate Directors of the quality required to run the company
successfully;
relationship of remuneration to performance is clearand meets appropriate
performance benchmarks; and
remuneration to directors, key managerial personnel and senior management
involves a balance between fixed and incentive pay reflecting short and long-term
performance 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 atwww.mohotaindustries.com.
16. RISK MANAGEMENT POLICY
Company has developed and implements Risk Management Policy including identification of
elements of risk which in the opinion of the Board may threaten to the existence of the
Company. Board and Audit Committee periodically reviewed/evaluates the risk management
framework so that the future risk can be minimized.
17. RELATED PARTYTRANSACTION
All the related party transactions entered into during the financial year were on an
arm's length basis and were in the ordinary course of business. Your Company had not
entered into any transactions with related parties which could be considered material in
terms of Section 188 of the Companies Act, 2013.Accordingly, the disclosure of related
party transactions as required under Section 134(3)(h) of the Act in Form AOC 2 is not
applicable. The Company has developed a Related Party T ransactions framework through
Standard Operating Procedures for the purpose of identification and monitoring of such
transactions.
All Related Party Transactions are placed before the Audit Committee and also to the
Board for approval. Transactions which are of repetitive nature are reviewed on a
quarterly basis and a statement giving details of all Related Party Transactions was
placed 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 been
uploaded on the website of the Company. The web-linkof the same has been provided in the
Corporate Governance Report.
18. SIGNIFICANT AND MATERIAL ORDERS PASSED BYTHE REGULATORS OR COURTS
There are following significant and material orders passed by the High Court that would
impact the going concern status of the Company and its future operations.
There are following significant and material orders passed by the High Court that would
impact the going concern status of the Company and its future operations.
1. Hon'ble National Company Law Tribunal, Mumbai Bench, Mumbai ("NCLT"), vide
an order No. MA 685/ 2020 in C.P. (IB)- 4500/(MB)/2019 Dated 08th May, 2020 (Copy of Order
received on 12 May, 2020) has admitted the application for withdrawal of corporate
Insolvency Resolution Process (CIRP) in respect of Mohota Industries Limited (the
"Company") under the Insolvency and Bankruptcy Code, 2016 ("IBC"). By
the said Order dated 08 May, 2020, Company is released from the rigor of CIRP and the
power of Management and the Board of Directors of the Company are reinstated.
2. Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) Wardha Division has
disconnected the Power supply of Company's Plant situated at Ram Mandir Ward
Hinganghat-442301 on 07th May 2021 due to nonpayment of Electricity Bills. Disconnection
of power supply resulted in suspension of Company's entire production
3. Hon'ble National Company LawTribunal, Mumbai Bench, Mumbai ("NCLT"), vide
an order No. C.P. (IB)-134/(MB)/2021 Dated 15th July, 2021 admitted the application for
order under section 7 of IBC by State Bank of India, counsel for the respondent admitted
the debt as claimed by the petitioner.
19. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors, to the
best of knowledge and ability, hereby confirm:
(i) That in the preparation of the Annual Accounts for the year ended March 31,2021,
the applicable accounting standards have been followed along with proper explanation
relating to material departures, if any;
(ii) That 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 as at March 31,2021 and
of the profit/loss of the Company for the year ended on that date;
(iii) That the directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013
for safeguarding the assets of the Company and for preventing and detecting fraud and
other 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 the
Company and that such internal financial controls are adequate and were operating
effectively; and
(vi) That the directors have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
20. AUDITOR'S REPORT AND STATUTORY AUDIT
M/s. BPSD & Associates, Chartered Accountants, (ICAI Registration no.118251W),
Nagpur have been appointed as Statutory Auditors of the Company at the 73rd Annual General
Meeting fora period of five years i.e. up to the conclusion of the Seventy Eight (78th)
AGM of the Company to be held in the year 2025 subject to ratification by members at every
ensuing AGM. Therefore, ratification of appointment of Statutory Auditors is being sought
from the members of the Company at the ensuing Annual General Meeting as required under
the provision of section 139 of Companies Act, 2013 to audit the accounts of the company
for the FY 2021-22.
The Company has received consent and written confirmation from M/s. BPSD &
Associates, Chartered Accountant that their appointment, if made, would be in
conformity with limit specified in the said section.
Auditor express following opinion on the financial results during the year under
review:
a) The Company has invested Rs. 15.52 crores in a partnership firm. The financial
statements of the said partnership firm for the year ended March 31,2021 were not
available; hence the impact on the profit/(loss) and corresponding impact on the carrying
amount of investment is not ascertainable.
b) The Company has not performed impairment testing with respect to the investment in a
partnership firm as required by Indian Accounting Standard (Ind AS 36) Impairment of
assets'; hence the impact on the carrying amount of investment is not ascertainable.
c) Balances of trade receivables, trade payables, loans and advances, Deposits given/
taken are subject to confirmations, reconciliations and consequent adjustments.
d) Deposits with Government Revenue Authorities are subject to confirmations and full
recoverability is not ascertainable.
e) Grant receivable from Government under PSI2007 Mega Project Incentive Scheme is
subject to confirmations to eligibility of the Audit and full recoverability of said grant
is not ascertainable owing to closure of manufacturing activity and switching to Job Work.
Material Uncertainty related to Going Concern
We draw attention to standalone financial results that the Company has incurred net
loss during the year and the current liabilities have exceeded the current assets.
Further, the Company has defaulted in repayment of principal dues and interest payable to
banks. These events indicate that a material uncertainty exists that may cast significant
doubt on the Company's ability to continue as a going concern. Our opinion is not modified
in respect of this matter.
Emphasis of Matter
We draw attention to standalone financial results that the Company has defaulted in
repayment of principal dues and interest payable to banks. The Company has provided
interest liability based on last available sanction letter on the principal outstanding
and is actively in discussion with the lenders for debt restructuring. Pending the final
outcome of the restructuring with the bankers, no further adjustment have been made in the
standalone financial results in respect of the principal amount of loan and interest
provided thereon. Ouropinion is notqualified in respect ofthis matter.
The observations made in the Auditor's Report are dealt with separately in the Notes to
the Statement of Profit and Loss and the Balance Sheet in Note No. 29 to 38 of the
Accounts. These are self-explanatory and do not call for any further comments.
21. COST AUDITORS
As per the requirement of Central Government and pursuant to Section 148(3) of the
Companies Act, 2013 and Rules 6(2) read with the Companies (Cost Records and Audit) Rules,
2014 is not applicable as company working on Job Work basis.
22. SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made
there under, the Company has appointed M/s DM & Associates Company Secretaries LLP
Company Secretary, (ICSI unique Code: L2017MH003500) to undertake the Secretarial Audit of
the Company for Financial Year 2021-22. The Secretarial Audit Report for Financial Year
2020-21 is included as Annexure-A and forms an integral part of this Report.
There is no audit qualification by the Secretarial Auditor for the year under review.
23. SAFETY AND POLLUTION CONTROL
The Company accords priority to the health and safety of its employees and
surroundings. It has been taking proper care in complying with all the statutory
requirements relating to safety, environment and pollution control: following are the
measures taken by the Company.
1. The Company planted Trees across the plant sites at Hinganghat and Burkoni.
2. The Company has organized various in-plant safety training sessions for its workers
and staff members.
24. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND
OUTGO
The information on conservation of energy, technology absorption and foreign exchange
earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with the
Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure - B to this Report.
25. PARTICULARS OF EMPLOYEES
The Disclosure required under Section 197(12) of the Act read with the Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed
as Annexure C' and forms an integral part of this Report. A statement comprising the
names of top 10 employees in terms of remuneration drawn and every persons employed
throughout the year, who were in receipt of remuneration in terms of Rule 5(2) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as
Annexure C- (b)' and forms an integral part of this annual report. The above
Annexure is not being sent alongwith this annual report to the members of the Company in
line with the provisions of Section 136 of the Act. Members who are interested in
obtaining these particulars may write to the Company Secretary at the Registered Office of
the Company. The aforesaid Annexure is also available for inspection by Members at the
Registered Office of the Company, 21 days before and up to the date of the ensuing Annual
General Meeting during the business hours on working days
The Company at present does not have any employee drawing salary in excess of the limit
specified under section 197 of Companies Act, 2013.
26. SUBSIDIARIES
The Company does not have any subsidiary/subsidiaries within the meaning of Companies
Act, 2013.
27. DEPOSIT
The Company has not accepted any deposits from public. Therefore, the requirement of
Chapter V of the Companies Act, 2013 is not applicable to it.
28. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has a policy on Corporate Social Responsibility and the same has been
posted on the website of the Company at www.mohotaindustries.com The Annual Report on CSR
Activities in terms of the requirements of Companies (Corporate Social Responsibility
Policy) Rules, 2014 is annexed as Annexure- D, which forms part of this report.
29. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
& REDRESSAL) ACT, 2013
The Company laid down an Anti Sexual Harassment Policy in line with the requirements of
the Sexual Harassment of Women at Workplace (prevention, prohibition and redressal) Act,
2013. An Internal Complaints Committee has been set up to redress complaints received in
this regard. All employees (permanent, contractual, temporary, trainees) are covered under
this policy. No sexual harassment complaints were received during the year 2020-21.
30. CAUTIONARY STATEMENT
Statement in this Director's Report including Management Discussion and Analysis
describing the Company's objective, projections, estimates, expectations or predictions
may be "Forward Looking Statements" within the meaning of applicable securities
laws & regulation. Actual results might differ materially from those expressed or
implied. Important factors that could make a difference to the Company's operations
include, among others, economic conditions affecting demand/supply and price conditions in
the market in which the Company operates, changes in the Government regulations, tax laws
and other statutes and incidental factors.
31. ACKNOWLEDGEMENTS
The Directors wish to place on record, their appreciation and gratitude for all the
co-operation extended by Government Agencies, Bankers, Financial Institutions and
Shareholders. The Directors also record their sense of appreciation for the sincere
services rendered by all the Executives and Staff of the Company and fortheir valuable
contribution in the working of the company.
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