The Directors are pleased to present the Sixty Eighth (68th) Annual
Report together with the Audited Financial Statement for the year ended
March 31st 2015. The Management discussion and analysis is also
included in this report.
For the year ended For the year ended
FINANCIAL RESULTS 31st March, 2015 31st March, 2014
Gross Revenue 31926.57 28312.88
Gross Profit (before interest,
depreciation & tax) 1679.85 1606.15
Less: Interest 1052.06 1024.69
Depreciation 324.77 419.75
Profit before tax & extraordinary Item 303.02 161.71
Less: Provision for tax 303.02 161.71
Mat Current (60.63) (32.35)
Deferred (27.47) 14.62
Net Profit for the year 214.92 143.98
Transfer to Reserve & Surplus
(Surplus/Deficit) in the Statement of
Profit & Loss 214.92 143.98
1. CORPORATE OVERVIEW
The Rai Saheb Rekhchand Mohota Spg. & Wvg. Mills Ltd. (Your
Company) is a leading and oldest textile composite mill in Vidarbha
Region of Maharashtra State. The Company has its corporate Head Quarter
at Hinganghat, Dist - Wardha of Maharashtra State.
2. OVERVIEW OF THE ECONOMY
As per the latest GDP growth estimates, Indian economy grew by 7.4% in
FY 2014-15 as compared to 6.9% in FY 2013-14, mostly driven by improved
economic fundamentals and revision of GDP calculation methodology.
Even inflation showed signs of moderation, a welcome sign - wholesale
price and consumer price inflation declined to 4.2% and 7.4%
respectively, compared with last year''s 6.3% and 10.1%. Reduced
inflation, falling crude oil prices, stable Rupee. Improved purchasing
power and consumer spending, higher capital inflows supported by the
government policy reforms have already put India on an accelerating
growth track and improved the business outlook.
The Government envisages GDP growth to accelerate to 8% in FY 2015-16
driven by strengthening macroeconomic fundamentals and implementation
of policy reforms recently announced. Reforms like e- auctions of coal
mines and telecom, FDI hike in insurance, speedier regulatory approvals
etc. will be critic al growth enablers to de-bottleneck stalled
projects, improve the investment outlook and the ease of doing business
in the country. Reforms currently underway such as GST implementation,
Amendment on Land Acquisition Bill, Labour Reforms, etc. are expected
to provide the requisite thrust for growth in the medium- term.
3. FINANCIAL PERFORMANCE
Amid optimism and rising business sentiments, your Company reported a
top-line growth of 12.76% over the Previous Year, the gross profit from
operation stood at Rs.1679.85 lacs compared with Rs. 1606.15 lacs in the
previous year. The operating Profit before tax stood at Rs. 303.02 lacs
as against Rs.161.71 lacs in the previous year. The Net Profit for the
year stood at Rs. 214.92 lacs against Rs. 143.98 lacs in the previous year.
4. DIVIDEND AND RESERVE
Your Directors recommend a dividend of 1% i.e. Rs.0.10 per equity shares
of face value of Rs.10 each aggregating to Rs.14.59 lacs (Rs. 6.25 lacs
previous year). During the year under review no amount was transferred
to General Reserve. General Reserve is reducing to the extent of Rs.
278.77 lacs on account of Depreciation on transition to Schedule II of
Companies Act 2013 on Tangible Fixed Assets.
5. SHARE CAPITAL
The paid-up Equity Share Capital as at March 31st 2015 stood at Rs.
1458.94 lacs. During the year the Board of Directors has issued Bonus
Shares from its permitted reserves/surplus @ 1:6 in its meeting held on
05/02/2015 and same has been approved by members in EGM dated
02/03/2015 and listed on BSE & NSE dated 30/03/2015.
6. ANALYSIS AND REVIEW Textile Industry Conditions
The Textile Industry contributes around 6% to India''s GDP. 11% to
export earnings and is the second largest employer (-whopping 55
million people) after agriculture. The Industry has shown continued
growth with a potential to increase its global trade share from the
current 4.5% to 8% (USD 80 Billion) in the next 5 years supported by a
rich abundance of raw material, skilled labour and talent.
In FY 2014-15, the textile industry is estimated to have contributed
USD 42 Billion (4%) to India''s GDP, and 27% to the country''s foreign
Opportunities and Challenges
Being the second largest employer in India coupled with strong Industry
linkages with the rural economy augurs well for the Indian textile
industry as one of the most significant sectors with an incremental
growth potential. Rural economy has seen a spurt in income levels the
last few years and this is the right time to juxtapose their synergies
to promote the industry''s growth. Being one of the key focus sectors
under the Government''s Make in India campaign is a testimony to the
huge growth potential the industry holds, both in terms of
infrastructure development and skill improvement. Globally, favourable
trade policy reforms would also allow the industry to expand its trade
partners, improve its export competitiveness and contribute
substantially to the nation''s income.
However, the growth prospects are constrained by many challenges
including rising input costs (wages, power and interest costs),
restrictive labour laws and intensified competition from other low cost
countries like Bangladesh. Such issues need to be addressed to result
in unlocking maximum industry growth potential.
STRENGTHS OF THE TEXTILE INDUSTRY
The following are a few strengths of the Indian Textile Industry:
- An Independent and self-reliant industry;
- Tremendous potential of growth in the domestic and international
- Abundant Raw Material availability that helps industry to control
costs and reduces the lead-time across operations;
- Availability of low cost and skilled manpower provides competitive
advantage to industry;
- Availability of large varieties of cotton fiber and has a fast
growing synthetic fiber industry;
- Promising export potential;
WEAKNESSES OF THE TEXTILE INDUSTRY
The following are a few weaknesses of the textile industry, which it
has to overcome.
- The Industry is a highly fragmented Industry.
- It is highly dependent on Cotton.
- There is lower productivity in various segments.
- There is a tremendous growth in the unorganized sector.
- Lack of technological developments that affect the productivity and
other activities in whole value chain.
- Infrastructural Bottlenecks and Efficiency such as transaction time
at ports and transportation time.
- Unfavorable labour Laws.
- Lack of Trade Membership, which is a hindrance to tap other
During FY 2014-15, Your Company''s total sales registered a growth of
12.76% and Net profit being Rs. 214.92 lacs as against t 143.98 lacs in
FY 2013-14. The increase in sales was led by volume growth in domestic
Major raw material prices i.e. Polyester Staple Fibre & Viscose Staple
Fibre were stable during the year largely because of steady
international prices and a stable rupee. The Cotton prices were
marginally higher than last year. The company is taking multiple cost
saving initiatives for its raw materials.
Your Company has a large retail network throughout the country. It has
more than 100 agents and more than 2500 retailers which helps the
company to boost its total marketing strength throughout the country.
7. FINANCE AND ACCOUNTS
During FY 2014-15 your company had issued and allotted bonus shares @
1:6 to its existing share holders and Rs. 1119.93 lacs were repaid for
Term Loan during the year.
Your Company prepares its financial statements in compliance with the
requirements of the Companies Act, 2013 and the Generally Accepted
Accounting Principles (GAAP) in India. The financial statements have
been prepared on historical cost basis. 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 31st, 2015.
There is no audit qualification in the financial statement by the
statutory auditors for the year under review.
8. CORPORATE GOVERNANCE
As per Clause 49 of the Listing Agreement with the Stock Exchanges, 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 the Report.
9. EXTRACT OF ANNUAL RETURNS
The details forming part of the extract of the Annual Return in form
MGT-9 as required under section 92 of the Company Act, 2013, are
included in this Report as Annexure - A and forms an integral part of
In accordance with the provisions of the Companies Act and the
Company''s Articles of Association, Dr. Ranchhoddas Mohota, Shri
Girdharlal G. Singhee & Shri Suresh Rathi Directors of the company,
retire by rotation at the forthcoming Annual General Meeting and being
eligible, offer themselves for re-appointment.
Ms. Aditi Bagri joined our company as Woman Director w.e.f. 29.08.2014.
Shri Pavan Poddar Director of our Company has resigned on personal
ground from Directorship w.e.f. 10.01.2015.
Shri Krishnakant Tekriwal appointed as Director w.e.f. 13.04.2015.
11. KEY MANAGEMENT PERSONNEL
During the year under review the company has appointed following
persons as key managerial personnel.
Sr. Name of the Person Designation
i Shri Vinod Kumar Mohota Managing Director
ii Shri Vinay Kumar Mohota Whole-time Director
iii Shri Shantilal B. Singhvi Whole-time Director
iv Shri Mukesh B. Mahajan Chief Financial Officer
Note: Your Company has appointed a Whole - Time Company Secretary who
will be joining by June 2015.
12. BOARD EVALUATION
Pursuant to the provisions of the Company''s Act, 2013 and Clause 49 of
the Listing Agreement, a structured questionnaire was prepared after
taking into consideration of the various aspects of the Board''s
functioning, composition of the Board and its Committees, culture,
execution and performance of specific duties, obligations and
The Company has received necessary declaration from each Independent
Director of the Company under Section 149(7) of the Companies Act, 2013
and the clause 49 of the listing Agreement 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 was completed.
The performance evaluation of the Chairman and the Non-independent
Directors was carried out by the independent Directors. The Board of
Directors expressed their satisfaction with the evaluation process.
13. NUMBER OF MEETINGS OF THE BOARD
The details of the number of meetings of the Board held during the
Financial Year 2014-2015 forms a part of the Corporate Governance
14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY
Details of Loans, Guarantees and investments covered under the
provisions of Section 186 of the Companies Act 2013 are given in the
notes under Financial Statements.
15. WHISTLE BLOWER POLICY
The Company has a whistle blower policy to report genuine concerns or
16. REMUNERATION AND NOMINATION POLICY
The Company has formulated the Nomination & Remuneration policy for its
directors, key managerial personnel and other employees keeping in view
- 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 clear and 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
17. VIGIL MECHANISM:
Company established a vigil mechanism pursuant to the provisions of
section 177(9) & (10) of the Companies Act, 2013 and as per Clause 49
of the Listing Agreement for their directors and employees to report
their genuine concerns or grievances., which also incorporates a
whistle blower policy in terms of the Listing Agreement, includes an
Ethics & Compliance Task Force comprising senior executives of the
Company. Protected disclosures can be made by a whistle blower through
an e-mail, telephone or a letter to the member of Audit committee or to
the Chairman of the Audit Committee.
18. 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 the existence of the company. Company also reviewed &
evaluates the implementation process of risk management policy from
time to time so that future risk can be minimized.
19. RELATED PARTY TRANSACTION
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 are not
attracted. The disclosure in form AOC-2 is attached as Annexure B. The
Company has developed a Related Party Transactions 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. Omnibus approval was obtained on a
quarterly basis for transactions which are of repetitive nature.
Transactions entered into pursuant to omnibus approval are audited by
the Risk Assurance Department and a statement giving details of all
Related Party Transactions are placed before the Audit Committee and
Board for review and approval on a quarterly basis.
20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the
Regulators/Courts that would impact the going concern status of the
Company and its future operations.
21. 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.
(i) That in the preparation of the Annual Accounts for the year ended
March 31st, 2015, the applicable accounting standards have been
followed along with proper explanation relating to material departures,
(ii) 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 31st, 2015 and of 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 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
(iv) The annual accounts have been prepared on a going concern basis;
(v) That the Directors had 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 had devised proper systems to ensure compliance
with the Provisions of all applicable laws and that such systems were
adequate and operating effectively.
22. AUDITOR''S REPORT AND STATUTORY AUDIT
M/s. Batliboi & Purohit, Chartered Accountant (Firm Registration Number
101048W) who are statutory auditor of the company hold office up to the
conclusion of the Seventieth (70th) AGM of the Company to be held in
the year 2017 subject to ratification at AGM. Board recommends the
appointment for ratification by members as required under the provision
of section 139 of Companies Act, 2013 to audit the accounts of the
company for the FY 2015-16. The Company has obtained written
confirmation from M/s. Batliboi & Purohit, Chartered Accountants that
there appointment, if made, would be in conformity with limit specified
in the said section.
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. 23 to 39 of the Accounts.
23. 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 as amended from time to
time, your Company has been carrying out audit of cost records relating
to Textile Company every year.
The Board of Directors have Re-appointed M/s G. R. Paliwal & Company,
Cost Accountants, (Registration Number 100058) Nagpur as the Cost
Auditors of the Company pursuant to Section 148 of The Companies Act,
2013, for conducting the Cost Audit Records of the Company for the
financial year 2015-2016, which has been approved by the Central
Cost Audit Report for the financial year ended 31st March, 2014 which
was required to be filed with the Central Government on or before 30th
September, 2014 has been filed electronically with the Central
Government on 22nd September, 2014 in XBRL Format by SRN S31308505.
24. SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and rules made there under, the Company has appointed Shri Dinesh Kumar
Deora a firm of Company Secretaries in Practice (Mem. FCS No. 5683,
C.O.P. No.4119) to undertake the Secretarial Audit of the Company. The
Secretarial Audit Report is included as Annexure - C and forms an
integral part of this Report.
In regards to the qualification mentioned on secretarial Auditor
Report, The Board would like to inform that the Company has appointed
the Whole- Time Company Secretary and he will be joining by June, 2015
25. SAFETY AND POLLUTION CONTROL
Your 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 your company.
1. Tree plantation (1000 Plant) in land adjacent to Mills ETP Plant.
2. Green Energy through use of Husk & Briquettes in boiler under United
Nation Environmental Programme (UNEP).
3. Extra bag filter installed in the boiler house to arrest even
smallest emission material.
26. 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 - D to this Report.
The information required under Section 197(12) of the Companies Act,
2013 and with Companies (Appointment and Remuneration of Managerial
Personnel) Rules. 2014 and forming part of the Directors'' Report for
the year ended March 31st'' 2015.
The Company at present dose not has 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 deposit and accordingly no amount was
outstanding as on date of Balance sheet.
30. CORPORATE SOCIAL RESPONSIBILITY (CSR)
According to the Companies Act, 2013, the company is not covered under
the Companies (Corporate Social Responsibility) Rules 2013.
31. SEGMENTWISE PERFORMANCE:
The company has only one business segment i.e. Textiles.
32. INTERNAL CONTROL SYSTEM AND ADEQUACY:
The company has a proper and adequate internal control system to ensure
that its assets are safeguarded and protected against unauthorized use
and disposition and all the transactions are properly recorded and
reported. The company also has a system of management reviews to ensure
compliance with the prescribed procedures and authority levels.
33. PARTICULARS OF EMPLOYEES
Details Pertaining To Remuneration as Required Under Section 197(12) of
the Companies Act, 2013 Read With Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014is
Furnished In Annexure- E
34. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS
Your company''s most valuable resource is its employees. Your company
continues to create a favorable environment at work place. The company
also recognizes the importance of training and continuously deputes its
work force in various courses/seminars relating to important management
tools like ''Total Quality Management'' (TQM). The management is
specifically calling professionals from renowned textile research
institutes like BTRA/SITRA to train its work force.
The Company has taken the following initiatives for skill development
for workers & Staff.
1 Training to maintenance staff by qualified engineers from Voltas
Ltd., Murata Machinery, Saurer Schlafhorst and Toyota.
2. Shop floor Training to technical staff on Air Engineering
(Humidification system) by B.T.R.A. a renowned textile research
3 Training to shop floor workers/operatives by trainer from U.T.T.S.,
Ahmedabad who guided them about discipline and work procedure while
working on machines with proper safety for Toyota Aiijet Looms.
4 Deputed staff members to attend International and National Textile
Conference organized by Textile Association of India.
5. Water conservation in Process reduced by 33% by adopting technical
upgradation and value engg.
6. Electrical power consumption reduced by 2.5% by adopting various
Following social activities held by the Company
1 Organized Blood donation Camp on Founder''s Day of the Company i.e. on
29th March by donating 100 bags of blood to Blood Bank.
2 During the year company organized seminar on Stress-Management by
one of a reputed Social and charitable Trust from Nagpur for entire
staff members of the Mills.
3 Manpower deployment for programmes undertaken in education
development in collaboration with NGO Creative Educators of Nagpur.
These programmes resulted in increase of passing percentage in 10th SSC
Board Exams 2015 conducted in Nagpur region of Maharashtra from 4% to
24% in various schools as compared to 2014.
4 Flag-Day 2014 fund for Sainik Welfare through District Collector,
Industrial relations are cordial and satisfactory.
35. CAUTIONARY STATEMENT:
Statement in the Management Discussion and Analysis describing the
Company''s projections and expectations 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.
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 for their valuable
contribution in the working of the company.
By the order of the Board
Place : Hinganghat Dr. Ranchhoddas Mohota
Date: 30/05/2015 Chairman