mohota industries ltd share price Directors report

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)


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.


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 Companys unit has posed a challenge for the Company to resume operations. Your Directors are exploring alternate avenues to make the units operative.


In view of the Companys 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.


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.


During the financial year due to lock down and lack of working capital, the Companys 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 Companys account. Last Rating given by ‘BRICKWORK was "D" for the Companys long term borrowings and Companys 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 Companys 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.


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 Companys Auditors confirming compliance, forms an integral part of this report as Annexure-E.


The Annual Return for the period ended March 2021 will be available on the companys Web site after conclusion of74thAGM.


In accordance with the provisions of section 152 of the Companies Act, 2013 and the Companys 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.


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.


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 Boards 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.


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


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.


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.


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


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 Companys web-site


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.


All the related party transactions entered into during the financial year were on an arms 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.


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. Honble 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 Companys 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 Companys entire production

3. Honble 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.


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.


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 Companys 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 Auditors 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.


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.


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.


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.


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.


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.


The Company does not have any subsidiary/subsidiaries within the meaning of Companies Act, 2013.


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.


The Company has a policy on Corporate Social Responsibility and the same has been posted on the website of the Company at 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.


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.


Statement in this Directors Report including Management Discussion and Analysis describing the Companys 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 Companys 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.


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.