Hindoostan Mills Ltd Directors Report.

Dear Members,

Your Directors are pleased to present the 115th Annual Report together with the Audited Financial Statements for the year ended March 31, 2019.

FINANCIAL RESULTS

The Companys 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 1,117.73
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 (1,180.83) (1,059.01)
Add: Other comprehensive income 7.92 (18.10)
Total comprehensive income / (Loss) (1,172.91) (1,077.11)

REVIEW OF OPERATIONS

The revenue from operations of the Company for the financial year 2018-19 was of Rs.16243.74 lakhs as compared to Rs.15656.73 Lacs during previous year. The Loss before tax was of Rs.1181.70 Lacs as against Rs.1062.70 Lacs of previous year. Business has suffered due to adverse market conditions and losses were higher due to abnormally high 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 been covered in the Management Discussion and Analysis which forms part of this Annual Report.

DIVIDEND

In view of loss incurred during the year under review, the Directors regret their inability to declare any dividend for the year ended March 31, 2019.

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, 2019.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loan and guarantee. Details of Investment of Rs.0.68 Lacs covered under the provisions of

Section 186 of the Companies Act, 2013 are given in the Notes no. 5 to the Financial Statements.

DIRECTORS

Mr. Pradyumna D. Vora and Mr. Prem Malik have resigned from the Directorship of the Company with effect from March 29, 2019 and February 12, 2019 respectively. The Board places 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 Directorship of the Company effective from August 09, 2018. The Board places on record its appreciation for 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 the Board of the Company and retired withTaxfrom effect from August 08, 2018. The Board places on record its appreciation for the contribution made by him during his tenure as Director of the Company.

The Board of Directors on the recommendation of the

Nomination & Remuneration Committee appointed Ms. Maitreyee Agboatwala as an Independent 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 of five years subject to approval of the

Members in the ensuing Annual General Meeting (AGM). The Nomination and Remuneration Committee has recommended reappointment of Mr. Sujal A. Shah and Mr.

Bhavesh V. Panjuani, as Independent Directors of the Company for the Second Term of 5(five) consecutive Years on the of their current term of office

Mr. Khushaal Thackersey, Director of the Company retires by rotation at the ensuing AGM and being eligible offer himself for re-appointment as Director of the Company.

Brief profiles of the Directors as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, are part of the Notice convening the Annual General Meeting. Board recommends reappointment of the aforesaid directors at the ensuing AGM.

COMMITTEES OF THE BOARD

Details of all the Committees, their composition and Meetings held during the year are provided 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 2013, the Directors confirms to the best of their knowledge and belief:

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

(b) 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 at the end of the financial 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 of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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 the Company and such internal financial controls are adequate and operating effectively; and

(f) 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.

KEY MANAGERIAL PERSONNEL expiry

The Board at their Meeting held on August 07, 2019 appointed Mr. Kaushik N. Kapasi as Company Secretary & Compliance Officer in place of Mr. Rajesh J Singh who was appointed with effect from January 21, 2019 and resigned with effect from August 6, 2019.

Earlier, Mr. Jagat Reshamwala who was Company Secretary & Compliance officer resigned with effect from December 01, 2018.

INDUSTRIAL RELATIONS

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

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Your Company has, during the year under review transferred unpaid dividend of Rs.2,71,670/- pertaining to the financial year 2010-11 which was unclaimed for more than seven years to Investor Education and Protection Fund in compliance with the provisions of Section 125 of the Companies Act, 2013. The Company has also transferred unpaid amount of sales proceeds of fractional shares of Rs. 91,890/- which was unclaimed for more than seven years.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. During the year, the Company had not entered into any transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website.

COMPLIANCE UNDER THE COMPANIES ACT

1) Annual return

The details forming part of the extract of the Annual Return as provided under Rule 12 of 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 website of 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 criteria of Independence as prescribed under sub-section (6) of Section 149 of the Companies Act,

2013 and under SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.

4) Policy

The Board has, on the recommendation of the Nomination

& Remuneration Committee framed a policy for selection and appointment of Directors, 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) Regulations 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit and Nomination & Remuneration

Committees.

6) Information under section 197 i. 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: There was no employee drawing remuneration of Rs.one crore and two Lacs during the year or

Rs.8,50,000 per month for a part of the year covered under Section 197 of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. ii. The ratio of the remuneration of Directors to the median 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 or Manager, 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 financial year: 6.7% v. The number of permanent employees on rolls of the Company: 432 employees as on March 31, 2019. vi. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.

Average Salary Increase for KMPs :16.1%
Average Salary Increase for non-KMPs :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 of the Company. viii. The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rules 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate Annexure forming part of this Report and the accounts are being sent to the Members excluding the aforesaid Annexure. In terms of Section 136 of the Act, the said Annexure is open for inspection at the Registered Office of the

Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

DISCONTINUATION/SALE OF THE COMPOSITE UNIT

The Company ventured into Technical Textile (Composite) business in the year 2010 with a vision to be a major player in this particular field.Further during the journey of eight years from year 2010 to 2018 the Company was able to reach only to the revenue of around Rs.8.1 crores during the financial year 2017-18 with a loss of Rs.2.18 crores during FY 2017-18 vis a vis capital employed of Rs.11.27 crores. As volume manufacturing of high performance Composite and commoditization of raw materials remains the biggest concern with entry of big players in the Industry, the Board decided at their meeting held on 5th June 2018 to discontinue operations of Composite Unit situated at Ambarnath, Additional Ambernath MIDC Industrial Area, Village – Anandnagar , Dist- Thane 421 506, Maharashtra and MIDC Industrial area, village Taswade , Tal - Karad, Dist. – Satara , Maharashtra – 415 109 with effect from June 30, 2018 and focus on its Textile and Engineering Business.

The Board has now proposed to sale the said composite unit consisting of Plot no. B-24 situated at Ambernath MIDC Area, plant and machinery and other assets in relation to the

Undertaking at floor price of Rs. 7,50,00,000 either in whole or substantially the whole or in part(s) on an "as is where is" basis or in any other manner as the Board may deem fit in the interest of the Company, on such terms and conditions as may be deemed fit by the Board.

The Board has sought approval of shareholders under Section 180(1) (a) of the Companies Act, 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 departments which was consuming 36 watt power per tube. Under Energy conservation, we have replaced 475 fluorescent tubes of 36 Watt with 18 Watt LED tubes without influencing required illumination 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 per year

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 Access power, Solar

Power, Wind Mill power etc. We were drawing power under Open Access scheme earlier but this was stopped in February 2018 as the power supplier was not meeting all the conditions as per MSEDCL rules. iii) The Capital investment on energy conservation equipment.

Capital investment of Rs. 2,83,000 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. Two looms of Airjet and one loom of Rapier have started on Monogram selvedge. ii) the benefits derived like product improvement, cost reduction, product development or import substitution;

This Jacquard type monogram attachment is giving flexibility of any style and shape of words and symbols on fabric selvedge.Technology is completely adopted for working and handling of these attachments. The

Company has invested around Rs. 6 Lakh for these attachments. We are getting value addition and improvement in price realisation in same fabric with monogram . We propose to install 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 secondary risk. Primary risk includes manpower development, product efficiency, fluctuation in price of raw materials and competition. Although the profitability of the company may be affected on account of these risk factors,

Board has not identified any risk which threatens the existence of the Company.

CORPORATE GOVERNANCE

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

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

In terms of the provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted 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 CSR Policy indicating the activities to be undertaken by the Company, which has been approved by the Board and the same is available on your Companys website, www.hindoostan.com. The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company is enclosed herewith as Annexure -I. In view of the average loss for the three immediately preceding financial years, the Company was not required to spent any amount on CSR 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 future operations.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work perform by the internal, statutory and secretarial auditors, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by the Management and the Audit Committee, the Board is of the opinion that the Companys internal 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, if any. The Vigil Mechanism Policy is available on your Companys website, www.hindoostan.com.

AUDITORS

(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 their appointment as statutory auditors for another two years.

The Board has duly reviewed the Statutory Auditors Report on the Accounts. The observations and comments appearing in the Auditors Report are self-explanatory and do not 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 audit of the cost records of the Company for FY 2019-20 on the remuneration of Rs.1,05,000/-. 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 in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure-III.

SEXUAL HARASSMENT

During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention,

Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENT

Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the Banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Companys executives, staff and workers.

For and on behalf of the Board of Directors,

Chandrahas Thackersey
Chairman
Place : Mumbai
Date: August 07, 2019