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Hindustan Appliances Ltd.

BSE: 531918 Sector: Others
NSE: N.A. ISIN Code: INE02XD01011
BSE 05:30 | 01 Jan Hindustan Appliances Ltd
NSE 05:30 | 01 Jan Hindustan Appliances Ltd

Hindustan Appliances Ltd. (HINDAPPLIANCES) - Director Report

Company director report

Dear members

The Board of Directors is pleased to present the Company's 36th annualreport and Company's Audited Financial Statements for the financial year ended March 312020

1. FINANCIAL RESULTS

The Company's financial performance for the year ended March 31 2020 is summarizedbelow: Financial Results:

(Rupees in Lakhs)

Particulars 2019-2020 2018-2019
Revenue from Operations 54.22 46.87
Less: Expenses
Project Expenses 0.00 0.00
Change in inventories of finished goods stock in trade and work in progress 0.00 0.00
- Employee benefits Expenses 20.68 7.53
- Depreciation and amortization 0.00 0.00
- Finance cost 0.00 0.00
- Other Expenses 10.87 10.85
Total Expenses 31.55 18.38
Profit/ (Loss) before Tax 22.67 28.49
Tax Expenses
- Current Tax 6.02 7.49
Net Profit after Tax carried Forward 16.65 21.00

2. RESULTS OF OPERATIONS AND STATE OF AFFAIRS OF THE COMPANY

The total income has increased to Rs. 54.22 Lakhs from Rs.46.87 Lakhs in the previousyear.

The profit after finance cost and depreciation has decreased to Rs. 22.67 Lakhs for theyear ended 31st March 2020 compared to previous year Rs. 20.49 Lakhs.

3. MATERIAL CHANGES AFFECTING THE COMPANY

There have been no material changes and commitments affecting the financial position ofthe company between end of the financial year and date of this report. There has been nochange in the nature of business of the company.

4. SECRETARIAL STANDARDS

The Directors state that the applicable Secretarial Standards i.e. SS-1 and SS-2relating to the ‘Meetings of the Board of Directors' and ‘General Meetings'respectively have been duly followed by the Company.

5. DIVIDEND AND TRANSFER TO RESERVE

The Board of Directors of your company after considering holistically the relevantcircumstances has decided that in order to conserve the financial resources for the longterm needs of the Company it would be prudent not to recommend any Dividend and noamount is transferred to Reserves for the financial year 2019-20.

6. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company its subsidiaries prepared inaccordance with the Companies Act 2013 the Listing Regulations and applicable IndianAccounting Standards along with all relevant documents and the Auditors Report thereonform part of this Annual Report.

In accordance with the provisions of Section 136 of the Companies Act 2013 and theamendments thereto the audited Financial Statements including the consolidated financialstatements and related information of the Company and financial statements of thesubsidiary companies will be available on our website www.hindustan-appliances.in. Thesedocuments will also be available for inspection during business hours at the RegisteredOffice of the Company. The Board of Directors of the Company reviewed the affairs ofsubsidiaries of the Company. In accordance with Section 129(3) of the Companies Act 2013the Company has prepared consolidated financial statements of the company and all itssubsidiaries which form part of the Annual Report. Further a statement containing salientfeatures of the financial statements of the Company's subsidiaries is given in Form No.AOC-1 at the end of this Report.

7. SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANIES

The Company has two subsidiaries as on March 31 2020. During the year the Board ofDirectors reviewed the affairs of material subsidiaries. We have in accordance withSection 129(3) of the Companies Act 2013 prepared consolidated financial statements ofthe Company and all its subsidiaries which form part of the Integrated Report. Furtherthe particulars of subsidiary Companies as on March 31 2020 have been included in FormMGT – 9 which is annexed to this report in Annexure II and the report on theperformance and financial position of each subsidiary and salient features of theFinancial Statements in the prescribed Form AOC-1 is annexed to this report in AnnexureIII.

8. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report for the year under review as stipulated underthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") is presented in aseparate section forming part of the Annual Report.

9. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by the Securities and ExchangeBoard of India (SEBI). The Company has also implemented several best Corporate Governancepractices as prevalent globally. The report on Corporate Governance as stipulated underthe Listing Regulations forms an integral part of this Report. The requisite certificatefrom the Auditors of the Company confirming compliance with the conditions of CorporateGovernance is attached to the Report on Corporate Governance.

10. DIRECTOR'S RESPONSIBILITY STATEMENT Your Directors state that: a) in thepreparation of the annual accounts for the year ended March 31 2020 the applicableaccounting standards read with requirements set out under Schedule III to the Act havebeen followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2020 and of the profitand loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the act for safeguarding theassets 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;

e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operating; and

f) the Directors have revised proper systems to ensure compliance with the provisionsof all applicable laws were in place and that such systems are adequate and operatingeffectively.

11. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All transactions with Related Parties entered in Financial Year 2020 were in ordinarycourse of business and at arm's length basis and in accordance with the provisions of theAct and the Rules made thereunder the Listing Regulations and the Company's Policy onRelated Party Transactions and that the provisions of Section 188 of the Companies Act2013 are not attracted. Thus disclosure in Form AOC-2 is not required.

There are no related party transactions that may have potential conflict with theinterest of the Company at large. The attention of the Members is drawn to the notes tothe Financial Statement setting out the related party transactions disclosures forFinancial Year 2020.

12. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The provisions relating to Corporate Social Responsibility (CSR) under section 135 ofthe Companies Act 2013 are not applicable to the Company.

13. DEPOSITS

During the year under review the Company has not accepted any deposits within themeaning of Sections 73 and 74 of the Companies Act 2013 read with Chapter V of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014(including any statutory modification(s) or re–enactment(s) for the time being inforce) hence there is no details to disclose as required under Rule 8(5)(v) and (vi) ofthe Companies (Accounts) Rules 2014.

14. RISK MANAGEMENT

The Risk Management Policy has been framed implemented and monitored. Major riskidentified by the businesses and functions are systematically monitored through mitigatingactions on continuing basis.

The development and implementation of Risk Management Policy has been covered inManagement Discussion & Analysis which forms part of this report.

15. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to thefinancial statements. During the year such controls were tested and no reportable materialweakness in the design or operation was observed+

16. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Section 152 of the Companies Act 2013 readwith the Companies (Appointment and Qualification of Directors) Rules 2014 and theArticles of Association of the Company Mrs Kanan Hemang Shah retires by rotation at theensuing Annual General Meeting. The Nomination and Remuneration Committee has recommendedher reappointment.

The Board of Directors on recommendation of Nomination & Remuneration Committee hasrecommended her re-appointment.

As per the provisions of the Companies Act 2013 Independent Directors have beenappointed for a period of 5 years and shall not be liable to retire by rotation. TheCompany has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence prescribed under the act and thelisting regulations.

The board comprises of the following directors and key managerial personnel of thecompany The Managing Director of the company is Kalpesh Rameshchandran Shah. Mr KalpeshRameshchandran Shah is eligible for re-appointment at this Annual General Meeting forfurther term of Five years. On the basis of recommendation of Nomination and RemunerationCommittee and subject to the approval of the members of the company the board has approvedthe re-appointment of Mr Kalpesh Rameshchandran Shah as Managing Director of the Companyfor a further period of five consecutive years with effect from 01st October2019 to 01st October 2024 without remuneration. Independent Directors viz MrRavindra Kanji Myatra and Mr Sunil H Shah. Based on the performance evaluation carried outby the Nomination and Remuneration Committee and the Board of Directors Mr Ravindra KanjiMyatra and Mr Sunil H Shah the Independent Directors are proposed to be re-appointed asIndependent Directors to hold office for the second term for the period of fiveconsecutive years with effect from 35th Annual General Meeting held for the financial yearended 31st March 2019 up to the conclusion of the Annual General Meeting to be held forthe financial year ended 31st March 2024. The Board of Directors recommends theirre-appointment by the way of special resolution and attention of the members is invited tothe relevant items in the Notice convening the 36th AGM and the explanatorystatement thereto. Non Independent Directors are Mr Sanjay Amratlal Desai and Mrs KananHemang Shah Mrs Kanan Hemang Shah who retires by rotation at this meeting be and is herebyappointed as a Director of the company liable to retire by rotation. Mr Sanjay AmratlalDesai continues to be the Chief Financial Officer of the Company with effect from 26thMarch 2015. In terms of Regulation 30 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Ms Niyati Sengar has been appointed as Company Secretaryof the Company with effect from 14th February 2018.

Declaration by Independent Directors:

All Independent Directors have given declarations to the effect that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 readwith Regulation 16 of SEBI (Listing obligations and Disclosures Requirements) Regulations2015. In the opinion of the Board Independent Directors fulfil the conditions specifiedin the Act Rules made there under and Listing Regulations.

Evaluation of Board's Performance:

The Company has devised a Policy for performance evaluation of the Board Committeesand other individual Directors (including Independent Directors) which include criteriafor performance evaluation of Non-executive Directors and Executive Directors. Theevaluation process inter alia considers attendance of Directors at Board and committeemeetings acquaintance with business communicating inter se board members effectiveparticipation domain knowledge compliance with code of conduct vision and strategy.

The detailed programs for familiarization of Independent Directors with the Companytheir roles rights and responsibilities in the Company nature of the industry in whichthe Company operates business model of the Company are being discussed.

The Board carried out an annual performance evaluation of the Board CommitteesIndividual Directors and the Chairman. The Chairman of the respective Committees sharedthe report on evaluation with the respective Committee members. The performance of eachCommittee was evaluated by the Board based on report on evaluation received fromrespective Committees.

The report on performance evaluation of the Individual Directors was reviewed by theChairman of the Board and feedback was given to Directors. Pursuant to the provisions ofthe Companies Act 2013 read with the Rules issued there under and the Listing Regulations(including any statutory modification(s) or re–enactment(s) for the time being inforce) the process for evaluation of the annual performance of the Directors / Board /Committees was carried out.

In a separate meeting of Independent Director's performance of non-independentdirectors performance of the board as a whole and performance of the chairman wasevaluated taking into account the view of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent directors at which the performance of the Board its committees and individualdirectors was also discussed. Performance evaluation of independent directors was done bythe entire board excluding the independent directors being evaluated.

17. AUDITORS AND AUDITORS' REPORT Statutory Auditors

M/s. N. B. Purohit & Co. Chartered Accountants were appointed as StatutoryAuditors of your Company at the Annual General Meeting held on 29th September 2017 for aterm of five consecutive years. They have confirmed that they are not disqualified fromcontinuing as Auditors of the Company. As per the provisions of Section 139 of theCompanies Act 2013 the appointment of Auditors is required to be ratified by the membersat every Annual General Meeting.

In accordance with Companies Amendment Act 2017 enforced on 7th May 2018 by theMinistry of Corporate Affairs the appointment of Statutory Auditors is not required to beratified at every Annual General Meeting.

The Report given by the Auditors on the financial statement of the Company is part ofthis report. There has been no qualification reservation adverse remark or disclaimergiven byt he Auditors in their Report.

Secretarial Auditor

The Board has appointed M/s. D. Kothari & Associates Practicing Company Secretaryto conduct the Secretarial Audit for the financial year ended 2019-20.

The Secretarial Audit report given by the Secretarial Auditor in Form No. MR-3 as perthe provisions of Section 204 of the Act read with Rules framed thereunder for thefinancial year ended March 31 2020 has been annexed to this Board Report as Annexure Iand forms part of this Annual Report. The said report does not contain any qualificationreservation adverse remark or disclaimer.

DISCLOSURES

(a) Meetings of the Board:

Four meetings of the Board of Directors were held during the year on the followingdates i.e. 26/04/2019 13/08/2019 12/11/2019 and 12/02/2020.

(b) Remuneration and Nomination Policy:

The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.

The Policy broadly lays down the guiding principles philosophy and the basis forpayment of remuneration to Executive and Non-executive Directors Key Managerial PersonnelSenior Management and other employees. The policy also provides the criteria fordetermining qualifications positive attributes and Independence of Director and criteriafor appointment of Key Managerial Personnel / Senior Management and performance evaluationwhich are considered by the Nomination and Remuneration Committee and the Board ofDirectors while making selection of the Annual Report 2019-20 Directors' Reportcandidates.

(c) Vigil Mechanism:

The Company has a robust Vigil Mechanism Policy of the Company which also includesWhistle Blower Policy in accordance with provisions of the Act and Listing Regulations.The Vigil Mechanism is supervised by an Ethics and Compliance Task Force comprising seniorexecutives of the Company. Protected disclosures can be made by a whistle-blower throughan email or dedicated telephone line or a letter to the Task Force or to the Chairman ofthe Audit Committee.

(d) Particulars of Loans given Investments made Guarantees given and Securitiesprovided:

The full details of loans given investments made guarantees given have been providedin the notes to the financial statement for the year ended 31st March 2020. The Companyhas not provided any security during the year.

(e) Conservation of Energy technology absorption:

The Company is not engaged in manufacturing process. Wherever possible the Company hastaken steps to conserve energy. The Company has not taken any technology domestically norimported any technology and hence furnishing the details required doesn't arise.

(f) Foreign Exchange Earnings and Outgo

1) Foreign exchange earnings: NIL 2) Foreign exchange outgo: NIL

(g) Extract of Annual Return:

Pursuant to section 92(3) of the Companies Act 2013 (‘the Act') and rule 12(1) ofthe Companies (Management and Administration) Rules 2014 extract of annual return inprescribed Form No. MGT - 9 is annexed as Annexure III and forms part of this report. TheAnnual Return of the Company for the year ended 31st March 2020 prepared in compliancewith Section 92 of the Companies Act 2013 and related Rules in prescribed Form No. MGT 7is placed on the website of the Company and can be accessed at the weblink:http://www.hindustan -appliances.in/.

(h) Particulars of employees and related disclosures:

The total number of permanent employee as on 31/3/2020 was 2 .The Company has not paidany remuneration to Whole-time Director / Managing Director and hence the question offurnishing information regarding ratio of remuneration of each director to the medianremuneration of the employees of the Company is not applicable. There was no remunerationpaid to any director and hence furnishing the details regarding the comparison ofremuneration of the Key Managerial remuneration against company performance and percentileincrease key parameters for variable components is not applicable.

Market Capitalization as on 31/3/2019 Rs. 210.54 Lacs Market Capitalization as on31/3/2020 Rs. 210.54 Lacs There is no change in market capitalization PE ratio as on31/3/2019 …….. Rs. 7.24 PE ratio as on 31/3/2020…….. Rs. 9.28

The Company does not have any employee whose particulars are required to be disclosedin terms of the provisions of Section 197(12) of the act read with Rule 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 hencefurnishing of the same does not arise.

(i) Significant and Material Orders Passed By The Regulators Or Courts:

No significant and material order has been passed by the regulators courts tribunalsimpacting the going concern status and Company's operations in future.

(j) Reporting of Frauds:

There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or Board under Section 143(12)of Act and Rules framed thereunder.

(k) Prevention of Sexual Harassment in the Company:

The Company values the dignity of individuals and strives to provide a safe andrespectable work environment to all its employees. The Company is committed to providingan environment which is free of discrimination intimidation and abuse. All employees arecovered under this policy. Your Directors state that during the year under review therewere no cases filed pursuant Hindustan Appliances Limited Annual Report 2019 - 20 to theSexual Harassment of Women at Workplace (Prohibition Prevention and Redressal) Act 2013.

(l) General:

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as the provisions were not applicable to the company or there were notransactions on these items during the year under review: -

- Issue of Equity Shares with differential rights as to dividend voting or otherwise.- Issue of shares (including sweat equity shares) to employees of the Company. - TheCompany does not have any scheme of provision of money for the purchase of its own sharesby the employees or by trustees for the benefit of employees.

- The Company does not have any subsidiaries hence the question of receivingremuneration or commission by the Managing Directors or Whole Time Directors of theCompany from subsidiary does not arise.

- The details of the top ten employees and employees who were drawing remuneration inexcess of limits prescribed under Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 read with Section 197 of the Companies Act 2013.

ACKNOWLEDGEMENT

The Board of Directors would like to express the sincere appreciation for theassistance and cooperation received from banks government authorities and members duringthe year under review.

The Board of Directors also wish to place on record its deep sense of appreciation forthe committed services by the Company's executives staff and workers

For and on behalf of the Board of Directors

Mr Kalpesh R. Shah Mr Sanjay A. Desai
Managing Director CFO/Director
DIN: 00294115 DIN: 00671414
Mr Sunil H Shah
Director
DIN: 02775683
Date: 31/07/2020
Place: Mumbai

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