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Hindoostan Mills Ltd.

BSE: 509895 Sector: Industrials
NSE: N.A. ISIN Code: INE832D01020
BSE LIVE 13:25 | 20 Sep 354.50 4.50
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OPEN 350.00
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VOLUME 138
52-Week high 479.00
52-Week low 322.05
P/E
Mkt Cap.(Rs cr) 59
Buy Price 347.20
Buy Qty 4.00
Sell Price 354.55
Sell Qty 4.00
OPEN 350.00
CLOSE 350.00
VOLUME 138
52-Week high 479.00
52-Week low 322.05
P/E
Mkt Cap.(Rs cr) 59
Buy Price 347.20
Buy Qty 4.00
Sell Price 354.55
Sell Qty 4.00

Hindoostan Mills Ltd. (HINDOOMILLS) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 113th Annual Report together with the AuditedFinancial Statements for the year ended March 31 2017.

FINANCIAL RESULTS

The Company's financial performance for the year ended March 31 2017 is summarizedbelow:

(Rs in lakhs)
Current Year Ended 31.03.2017 Previous Year Ended 31.03.2016
Gross Profit before Interest Depreciation and Tax 241.87 1084.27
Less: Finance Cost 258.50 331.34
Gross Profit after interest but before Depreciation (16.63) 752.93
Less: Depreciation 1240.23 1181.82
Profit before Exceptional and Extraordinary Items and Tax (1256.86) (428.89)
Add: Exceptional Items (68.50) 222.54
Add: Extraordinary Items (9.32) --
Profit/(Loss) before Taxation (1334.68) (206.35)
Less: (Excess) / Short Provision of Tax of earlier year -- 19.03
Profit / (Loss) after Tax (1334.68) (225.38)
Balance brought forward from last year -- 2.96
Add: Transfer from General Reserve -- 312.81
Amount available for appropriation (1334.68) 90.39
Less: Proposed Dividend -- 74.90
Less: Tax on proposed Dividend -- 15.25
Less: Short provision of Tax on proposed Dividend for the year 2015-16 -- 0.24
Balance carried to Balance Sheet (1334.68) --

REVIEW OF OPERATIONS:

The revenue from operations of the Company for the financial year 2016-17 isRs15915.26 lakhs. The Loss before tax is Rs1334.68 lakhs. The performance and overallview of the Textile Engineering and Composite business has been covered in the ManagementDiscussion and Analysis which forms part of this Annual Report.

DIVIDEND:

In view of loss incurred during the year under review the Directors regret theirinability to declare any dividend for the period ended March 31 2017.

FIXED DEPOSITS:

The Company has not accepted any deposits from the public during the year under review.There are no outstanding deposits remaining unpaid / unclaimed as on March 31 2017.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Notes to the Financial Statements.

DIRECTORS:

All the Independent Directors have given declarations that they meet with the criteriaof independence as prescribed under subsection (6) of Section 149 of the Companies Act2013 and under SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.

Mr. Raoul Thackersey Chairman resigned from the Chairmanship of the Company effectiveAugust 09 2016. The Board placed on record its deep appreciation for leadershipassistance and guidance provided by him during his tenure as a Chairman of the Company.Mr. Chandrahas Thackersey Vice Chairman was appointed as Chairman of the Companyeffective August 09 2016.

Mr. R.N. Bansal and Mr. P.B. Desai Independent Directors completed their term of 2years on the Board of the Company and retired due to advanced age effective August 092016. Mr. Naresh Kara Non-Executive Director resigned from the Board of the Company dueto advanced age effective October 03 2016. The Board placed on record its appreciationfor the contribution made by them during their tenure as Director of the Company.

Dr. Ashok N. Desai was appointed as an Independent Director effective August 09 2016.

The Board of Directors had on the recommendation of the Nomination & RemunerationCommittee appointed Mr. Khushaal Thackersey as Whole-time Director of the Companydesignated as "Executive Director" for a term of 5(Five) years with effect fromNovember 09 2016 upto November 08 2021 subject to approval of the Members in the ensuingAGM. Mr. Raoul Thackersey Director of the Company will retire by rotation at the ensuingAnnual General Meeting and being eligible offered himself for re-appointment as Non -Executive Director of the Company.

Brief profiles of the Directors as required under SEBI (Listing Obligations andRequirements) Regulations 2015 are part of the Notice convening the Annual GeneralMeeting.

(a) Board Evaluation:

Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of SEBI(Listing Obligations and Requirements) Regulations 2015 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Audit and Nomination & RemunerationCommittees.

(b) Remuneration Policy:

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration.

(c) Meetings:

During the year four Board Meetings and four Audit Committee Meetings were convened andheld. The details of which are given in the Corporate Governance Report. The interveninggap between the Meetings was within the period prescribed under the Companies Act 2013.

(d) Committees of the Board:

Details of all the Committees their composition and Meetings held during the year areprovided in the report on Corporate Governance Report a part of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the provision of Section 134(3)(c) and 134(5) of the Companies Act 2013the Directors confirms to the best of their knowledge and belief:

(a) that in the preparation of the annual accounts the applicable accounting standardshave been followed and there are no material departures;

(b) that they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theloss of the Company for that period;

(c) that they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(d) that they have prepared the annual accounts on a going concern basis;

(e) that they have laid down internal financial controls to be followed by the Companyand such internal financial controls are adequate and operating effectively; and (f) theyhave devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems were adequate and operating effectively.

KEY MANAGERIAL PERSONNEL:

The Board of Directors at their Meeting held on May 04 2016 accepted the resignationof Ms. Heena Shah Chief Financial Officer effective May 16 2016 and appointed Mr. K.Nandakumar as President (Finance and Accounts) effective May 04 2016 to be designated asChief Financial Officer effective May 17 2016.

INDUSTRIAL RELATIONS:

The industrial relations continued to be generally peaceful and cordial during theyear.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Your Company has during the year under review transferred a sum of Rs32670/- toInvestor Education and Protection Fund in compliance with the provisions of Section 125of the Companies Act 2013. The said amount remained unclaimed by the Members of theCompany for a period exceeding 7 years from its due date of payment.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

All transactions entered by the Company during the financial year with related partieswere in the ordinary course of business and on an arm's length basis. During the year theCompany had not entered into any transaction with related parties which could beconsidered material in accordance with the policy of the Company on materiality of relatedparty transactions. All Related Party Transactions were placed before the Audit Committeeas also the Board for approval. Prior omnibus approval of the Audit Committee is obtainedfor the transactions which are of a foreseen and repetitive nature. The transactionsentered into pursuant to the omnibus approval so granted are audited and a statementgiving details of all related party transactions is placed before the Audit Committee andthe Board of Directors for their approval on a quarterly basis. The policy on RelatedParty Transactions as approved by the Board is uploaded on the Company's website. None ofthe Directors has any pecuniary relationships or transactions vis--vis the Company.

CASH FLOW STATEMENT:

In conformity with the Accounting Standard 3 issued by the Institute of CharteredAccountants of India and the provisions of SEBI (Listing Obligations and DisclosuresRequirements)

Regulations 2015 the Cash Flow Statement for the year ended March 31 2017 is annexedto the accounts.

PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 (1) of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is given below: i) Theratio of the remuneration of Directors to the median remuneration of the employees of thecompany for the financial year.

Mr . Hrishikesh Thackersey : 16.93
Mr . Abhimanyu Thackersey : 30.24
Mr . Khushaal Thackersey (w .e.f. November09 2016) : 2.77

ii) The percentage increase in remuneration of each Director Chief FinancialOfficer Chief Executive Officer Company Secretary or Manager ifany in the financial year.

Directors Chief Executive Officer Company Secretary or Manager % increase in remuneration in the financial year
Mr. Hrishikesh Thackersey Executive Director 13.48
Mr. Abhimanyu Thackersey Executive Director 11.22
Mr. Khushaal Thackersey (appointed on November 09 2016) N.A.
Mr. Jagat Reshamwala Company Secretary N.A.
Ms. Heena Shah CFO (upto May 16 2016) N.A.
Mr. K. Nandakumar CFO (appointed on May 04 2016) N.A.

iii) The per centage increase in the median remuneration of employees in thefinancial year.

4.10%

iv) The number of permanent employees on rolls of the Company.

486 employees as on March 31 2017 on rolls of the Company.

v) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration.

Average Salary Increase for KMP's : 15.34%
Average Salary Increase for non-KMP's : 13.41%

vi) Affirmation that the remuneration is as per the Remuneration policy of thecompany.

The remuneration paid to employees of the Company is as per the remuneration policy ofthe Company.

vii) The Statment containing names of top ten employees in terms of remuneration drawnand the particulars of employees as required under Section 197 (12) of the Act read withRules 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is provided in a separate Annexure forming part of this Report and the accounts arebeing sent to the Members excluding the aforesaid Annexure. In terms of Section 136 of theAct the said Anexure is open for inspection at the Registered Office of the Company. Anyshareholder interested in obtaining a copy of the same may write to the Company Secretary.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:

Your Company has been making continuous efforts to conserve energy and upgrade / absorbtechnology to optimize the energy cost. Information required under Section 134(3)(m) ofthe Companies Act 2013 read with Rule 8(3) (A) & (B) of the Companies (Accounts)Rules 2014 as amended from time to time forms part of this Report. However as per theprovisions of Section 136 (1) the report and accounts are being sent to all the Membersof the Company excluding the information relating to conservation of energy and technologyabsorption. Any shareholder interested in obtaining such particulars may inspect the sameat the Registered Office of the Company or write to the Company Secretary for a copy.

Foreign Exchange Earnings & Outgo:

(Rs in lakhs)
Particulars 31.03.2017 31.03.2016
Foreign exchange earned 2498.36 2739.36
Foreign exchange used 616.13 631.92

CORPORATE GOVERNANCE:

The Company is maintaining the standards of corporate governance and adheres to thecorporate governance requirements set out by SEBI. The Report on Corporate  Governance as stipulated under the SEBI (Listing Obligations and DisclosuresRequirements) Regulations 2015 is an integral part of this Report. The requisitecertificate from the Auditors of the Company confirming compliance with the conditions ofcorporate governance is attached to the Report on Corporate Governance.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return as provided under Section92(3) of the Companies Act 2013 and as prescribed in Form MGT- 9 of Rules prescribedunder Chapter VII relating to Management and Administration under Companies Act 2013 isenclosed herewith as Annexure - I.

CORPORATESOCIALRESPONSIBILITYINITIATIVES:

In terms of the provisions of Section 135 of the Act read with Companies (CorporateSocial Responsibility Policy) Rules 2014 the Board of Directors of your Company hasconstituted a Corporate Social Responsibility (CSR) Committee which is chaired by Mr.Chandrahas Thackersey. The other Members of the Committee are Mr. K.D.Vora and Mr. SujalShah. The Committee has formulated and recommended to the Board a CSR Policy indicatingthe activities to be undertaken by the Company which has been approved by the Board andthe same is available on your Company's website www.hindoostan.com. The brief outline ofthe Corporate Social Responsibility (CSR) Policy of the Company and the initiativesundertaken by the Company on CSR activities is enclosed herewith as

Annexure -II.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS IF ANY:

There is no significant material order passed by the Regulators / Courts which wouldimpact the going concern status of your Company and its future operations.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. Based on the framework of internal financial controls andcompliance systems established and maintained by the Company work perform by theinternal statutory and secretarial auditors including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed bythe Management and the Audit Committee the Board is of the opinion that the Company'sinternal financial controls were adequate and effective during financial year 2016-17.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has a vigil mechanism to deal with instance of fraud and mismanagement ifany. The Vigil Mechanism Policy is available on your Company's websitewww.hindoostan.com.

AUDITORS:

(a) Statutory Auditors:

M/s. M.A. Parikh&Co. Chartered AccountantsMumbai (Firm Registration No. 107556W)were appointed as statutory auditors of the Company to hold office till the conclusion of115th Annual General Meeting (AGM) to be held in the calendar year 2019 at the AGM held onDecember 12 2014. In terms of the provision of Section 139(1) of the Companies Act2013 the appointment shall be placed for ratification at every AGM. Accordinglytheappointment of M/s. M.A. Parikh & Co. Chartered Accountants as statutory auditors ofthe Company is placed for ratification by the Members. In this regard the Company hasreceived a certificate from the Auditors confirming to the effect that if they arere-appointed it would be in accordance with provisions of Section 141 of the CompaniesAct 2013.

The Board has duly reviewed the Statutory Auditors' Report on the Accounts. Theobservations and comments appearing in the Auditors' Report are self-explanatory and donot call for any further explanation / clarification by the Board.

(b) Cost Auditors:

Due to sudden sad demise of Mr. Anant Ashok Katyare proprietor of M/s. Anant AshokKatyare & Co. on April 24 2017 the Board on recommendation of the Audit Committee atits Meeting held on May 09 2017 appointed Mr. Pranav J. Taralekar Cost Auditor toconduct Cost audit of the cost records of the Company for FY 2016-17 & FY 2017-18 andrecommended payment of Rs105000/- p.a. plus taxes as applicable and requested theMembers to ratify the remuneration as recommended above.

(c) Secr etarial Audit:

The Board has appointed M/s. PRS & Associates a firm of Company Secretaries inPractice to undertake the Secretarial Audit of the Company. The Secretarial Audit Reportis annexed herewith as Annexure-III.

SEXUAL HARASSMENT:

During the year under review there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

ACKNOWLEDGEMENT:

Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the Banks Government authorities customers vendors andmembers during the year under review. Your Directors also wish to place on record theirdeep sense of appreciation for the committed services by the Company's executives staffand workers.

For and on behalf of the Board of Directors

Chandrahas Thackersey

Chairman

Mumbai May 09 2017