Your Directors are pleased to present the 115th Annual Report together withthe Audited Financial Statements for the year ended March 31 2019.
The Company's financial performance for the year ended
March 31 2019 is summarized below:
| || ||(Rs. in lakhs) |
| ||Current Year Ended 31.03.2019 ||Previous Year Ended 31.03.2018 |
|Gross Profit before Interest ||408.64 ||502.67 |
|Depreciation and Tax from continuing operations || || |
|Less: Finance Cost ||198.23 ||232.20 |
|Gross Profit after interest but before ||210.41 ||270.47 |
|Depreciation from continuing operations || || |
|Less: Depreciation ||858.33 ||1117.73 |
|Profit before Exceptional and ||(647.92) ||(847.26) |
|Extraordinary Items and Tax from continuing operations || || |
|Add: Exceptional Items ||- ||(3.85) |
|Profit/(Loss) before Taxation from continuing operations ||(647.92) ||(851.11) |
|Add : Defeerred Tax ||2.25 ||3.06 |
|Profit / (Loss) after continuing operations ||(645.67) ||(848.05) |
|Profit/(Loss) before Taxation from discontinued operations ||(533.78) ||(211.59) |
|Add : Deferred Tax of discontinued operations ||(1.38) ||0.63 |
|Profit/(Loss) after discontinued operations ||(535.16) ||(210.96) |
|Loss for the period ||(1180.83) ||(1059.01) |
|Add: Other comprehensive income ||7.92 ||(18.10) |
|Total comprehensive income / (Loss) ||(1172.91) ||(1077.11) |
REVIEW OF OPERATIONS
The revenue from operations of the Company for the financial year 2018-19 was ofRs.16243.74 lakhs as compared to Rs.15656.73 Lacs during previous year. The Loss beforetax was of Rs.1181.70 Lacs as against Rs.1062.70 Lacs of previous year. Businesshas suffered due to adverse market conditions and losses were higher due to abnormallyhigh price of raw material i.e. cotton and yarn and increase in Power cost.
The performance and overall view of the Textile and Engineering business has beencovered in the Management Discussion and Analysis which forms part of this Annual Report.
In view of loss incurred during the year under review the Directors regret theirinability to declare any dividend for the year ended March 31 2019.
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 2019.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loan and guarantee. Details of Investment of Rs.0.68 Lacscovered under the provisions of
Section 186 of the Companies Act 2013 are given in the Notes no. 5 to the FinancialStatements.
Mr. Pradyumna D. Vora and Mr. Prem Malik have resigned from the Directorship of theCompany with effect from March 29 2019 and February 12 2019 respectively. The Boardplaces on record its appreciation towards valuable contribution made by Mr. Pradyumna D.Vora and Mr. Prem Malik during their tenure as Directors of the Company.
Ms. Vishwadhara Dahanukar Independent Director resigned Taxfrom from the Directorshipof the Company effective from August 09 2018. The Board places on record its appreciationfor valuable services provided by her during her tenure as an Independent Director.
Mr. Krishnadas D. Vora Independent Director completed his term of 2 years on theBoard of the Company and retired withTaxfrom effect from August 08 2018. The Board placeson record its appreciation for the contribution made by him during his tenure as Directorof the Company.
The Board of Directors on the recommendation of the
Nomination & Remuneration Committee appointed Ms. Maitreyee Agboatwala as anIndependent Women Director on
November 1 2018 and Mr. Amol P. Vora as an Independent
Director on May 17 2019 based on their qualification and experience for a period offive years subject to approval of the
Members in the ensuing Annual General Meeting (AGM). The Nomination and RemunerationCommittee has recommended reappointment of Mr. Sujal A. Shah and Mr.
Bhavesh V. Panjuani as Independent Directors of the Company for the Second Term of5(five) consecutive Years on the of their current term of office
Mr. Khushaal Thackersey Director of the Company retires by rotation at the ensuing AGMand being eligible offer himself for re-appointment as Director of the Company.
Brief profiles of the Directors as required under SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 are part of the Notice convening the AnnualGeneral Meeting. Board recommends reappointment of the aforesaid directors at the ensuingAGM.
COMMITTEES OF THE BOARD
Details of all the Committees their composition and Meetings held during the year areprovided in the Corporate Governance Report a part of this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions 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 the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the
Company for that period;
(c) that the directors had taken proper and sufficientcare for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
(d) that the directors have prepared the annual accounts on a going concern basis;
(e) that the directors have laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and operating effectively; and
(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
KEY MANAGERIAL PERSONNEL expiry
The Board at their Meeting held on August 07 2019 appointed Mr. Kaushik N. Kapasi asCompany Secretary & Compliance Officer in place of Mr. Rajesh J Singh who wasappointed with effect from January 21 2019 and resigned with effect from August 6 2019.
Earlier Mr. Jagat Reshamwala who was Company Secretary & Compliance officerresigned with effect from December 01 2018.
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 unpaid dividend ofRs.271670/- pertaining to the financial year 2010-11 which was unclaimed for more thanseven years to Investor Education and Protection Fund in compliance with the provisions ofSection 125 of the Companies Act 2013. The Company has also transferred unpaid amount ofsales proceeds of fractional shares of Rs. 91890/- which was unclaimed for more thanseven years.
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. The policy on Related Party Transactions as approved by the Board isuploaded on the Company's website.
COMPLIANCE UNDER THE COMPANIES ACT
1) Annual return
The details forming part of the extract of the Annual Return as provided under Rule 12of Management and Administration under Companies Act 2013 is enclosed herewith as Annexure- I.
Annual return referred to in sub-section (3) of section 92 has been placed on websiteof the Company website address www.hindoostan.com
2) No. of Board meetings
During the year five Board Meetings were held.
3) Declaration from Independent directors
All the Independent Directors have given declarations that they meet with the criteriaof Independence as prescribed under sub-section (6) of Section 149 of the Companies Act
2013 and under SEBI (Listing Obligations and Disclosures Requirements) Regulations2015.
The Board has on the recommendation of the Nomination
& Remuneration Committee framed a policy for selection and appointment ofDirectors Senior Management and their remuneration.
5) Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and
Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Board has carried out an annual performance evaluation of its own performancethe directors individually as well as the evaluation of the working of its Audit andNomination & Remuneration
6) Information under section 197 i. The information required pursuant to Section197 read with Rule 5 (1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is given below: There was no employee drawing remuneration ofRs.one crore and two Lacs during the year or
Rs.850000 per month for a part of the year covered under Section 197 of the CompaniesAct 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. ii. The ratio of the remuneration of Directors to themedian remuneration of the employees of the company for the financial year.
|Mr. Khushaal Thackersey ||: ||10.87 |
|Mr. Rajiv Ranjan ||: ||21.00 |
iii. The percentage increase in remuneration of each
Director Chief Financial Officer Chief Executive Officer Company Secretary orManager if any in the financial year.
|Directors Chief Executive Officer Company Secretary or Manager ||% increase in remuneration in the financial year |
|Mr. Khushaal Thackersey Executive ||61.30 |
|Director || |
|Mr. Rajiv Ranjan Executive ||Nil |
|Director & CEO || |
|Ms. Shraddha Shettigar ||24.00 |
|Mr. Jagat Reshamwala Company ||Nil |
|Secretary (upto 30-11-2018) || |
|Mr. Rajesh J Singh Company ||Nil |
|Secretary (appointed on 21-01-2019) || |
iv. The percentage increase in the median remuneration of employees in the financialyear: 6.7% v. The number of permanent employees on rolls of the Company: 432 employees ason March 31 2019. vi. Average percentile increase already made in the salaries ofemployees other than the managerial personnel in the last financial year and itscomparison with the percentile increase in the managerial remuneration and justificationthereof and point out if there are any exceptional circumstances for increase in themanagerial remuneration.
|Average Salary Increase for KMP's ||:16.1% |
|Average Salary Increase for non-KMP's ||:7.53% |
vii. Affirmation that the remuneration is as per the
Remuneration policy of the company.
The remuneration paid to employees of the Company is as per the remuneration policy ofthe Company. viii. The statement containing names of top ten employees in terms ofremuneration drawn and the particulars of employees as required under Section 197(12) ofthe Act read with Rules 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided in a separate Annexure forming part of this Report andthe accounts are being sent to the Members excluding the aforesaid Annexure. In terms ofSection 136 of the Act the said Annexure is open for inspection at the Registered Officeof the
Company. Any shareholder interested in obtaining a copy of the same may write to theCompany Secretary.
DISCONTINUATION/SALE OF THE COMPOSITE UNIT
The Company ventured into Technical Textile (Composite) business in the year 2010 witha vision to be a major player in this particular field.Further during the journey of eightyears from year 2010 to 2018 the Company was able to reach only to the revenue of aroundRs.8.1 crores during the financial year 2017-18 with a loss of Rs.2.18 crores during FY2017-18 vis a vis capital employed of Rs.11.27 crores. As volume manufacturing of highperformance Composite and commoditization of raw materials remains the biggest concernwith entry of big players in the Industry the Board decided at their meeting held on 5thJune 2018 to discontinue operations of Composite Unit situated at Ambarnath AdditionalAmbernath MIDC Industrial Area Village Anandnagar Dist- Thane 421 506Maharashtra and MIDC Industrial area village Taswade Tal - Karad Dist. Satara Maharashtra 415 109 with effect from June 30 2018 and focus on its Textile andEngineering Business.
The Board has now proposed to sale the said composite unit consisting of Plot no. B-24situated at Ambernath MIDC Area plant and machinery and other assets in relation to the
Undertaking at floor price of Rs. 75000000 either in whole or substantially thewhole or in part(s) on an "as is where is" basis or in any other manner as theBoard may deem fit in the interest of the Company on such terms and conditions as may bedeemed fit by the Board.
The Board has sought approval of shareholders under Section 180(1) (a) of the CompaniesAct 2013 for disposal of composite unit.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A. Conservation of energy
The steps taken or impact on conservation of energy:-
i) Earlier we were using fluorescent tubes for illumination in various departmentswhich was consuming 36 watt power per tube. Under Energy conservation we have replaced475 fluorescent tubes of 36 Watt with 18 Watt LED tubes without influencing requiredillumination of workplace.
With this step we have optimized 50% power in Lighting (Illumination of department)section which is around 72000 Units per annum which amounts to a saving of Rs. 6 lacs peryear
ii) Steps taken by the company for utilizing alternate sources of energy:-
We have worked on different proposals of alternate source of Energy like Open Accesspower Solar
Power Wind Mill power etc. We were drawing power under Open Access scheme earlier butthis was stopped in February 2018 as the power supplier was not meeting all the conditionsas per MSEDCL rules. iii) The Capital investment on energy conservation equipment.
Capital investment of Rs. 283000 has been done for
Installation of LED tubes.
B. Technology absorption i) the efforts made towards technology absorption
We have installed Monogram Selvedge attachments on our Airjet and Rapier looms. Twolooms of Airjet and one loom of Rapier have started on Monogram selvedge. ii) the benefitsderived like product improvement cost reduction product development or importsubstitution;
This Jacquard type monogram attachment is giving flexibility of any style and shape ofwords and symbols on fabric selvedge.Technology is completely adopted for working andhandling of these attachments. The
Company has invested around Rs. 6 Lakh for these attachments. We are getting valueaddition and improvement in price realisation in same fabric with monogram . We propose toinstall this equipment on more looms in future.
Foreign Exchange Earnings & Outgo:
| || ||Rs. |
|Particulars ||31.03.2019 ||31.03.2018 |
|Foreign exchange earned (Rs. Lacs) ||2294.40 ||3013.13 |
|Foreign exchange used (Rs. Lacs) ||277.91 ||479.07 |
RISK MANAGEMENT POLICY
The Company has evolved risk management policy identifying primary risk and secondaryrisk. Primary risk includes manpower development product efficiency fluctuation in priceof raw materials and competition. Although the profitability of the company may beaffected on account of these risk factors
Board has not identified any risk which threatens the existence of the Company.
The Company is maintaining the standards of corporate governance and adheres to thecorporate governance requirements set out by SEBI. The Report on Corporate Governance asstipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is an integral part of this Report. The requisite certificate from the Auditors ofthe Company confirming compliance with the conditions of corporate governance is attachedto the Report on Corporate Governance.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
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. Sujal Shah and Mr.Bhavesh V. Panjuani. The Committee has formulated and recommended to the Board a CSRPolicy indicating the activities to be undertaken by the Company which has been approvedby the Board and the same is available on your Company's website www.hindoostan.com. Thebrief outline of the Corporate Social Responsibility (CSR) Policy of the Company isenclosed herewith as Annexure -I. In view of the average loss for the threeimmediately preceding financial years the Company was not required to spent any amount onCSR activities during the FY 2018-19.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS IF ANY
There is no significant material order passed by the Regulators
/ Courts which would impact the going concern status of your Company and its futureoperations.
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 2018-19.
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.
(a) Statutory Auditors
M/s. M.A. Parikh & Co. Chartered Accountants Mumbai (Firm Registration No.107556W) holds office upto the conclusion of this 115th Annual General Meeting
(AGM) completing eight years of office. The Board has recommended for theirappointment as statutory auditors for another two years.
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
The Board has re-appointed Mr. Pranav J. Taralekar Cost Auditor to conduct cost auditof the cost records of the Company for FY 2019-20 on the remuneration of Rs.105000/-.The Board has recommended to the Members to ratify the said remuneration.
(c) Secretarial 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.
During the year under review there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention
Prohibition and Redressal) Act 2013.
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 |
|Place : Mumbai || |
|Date: August 07 2019 || |