Hindustan Appliances Ltd Directors Report.

Dear Members,

The Board of Directors are pleased to present the Companys Thirty Fifth Annual Report and the Audited Financial Statement for the financial year ended March 31, 2019.

FINANCIAL RESULTS

The Companys financial performance for the year ended March 31, 2019 is summarized below:

(Rs.in Lakhs)
Particulars Year ended 31.3.2019 Year ended 31.3.2018
Total Income 46.87 53.53
Total Expenses 18.38 14.55
Gross Profit / loss Before Taxation 28.49 38.98
Deduct:-
Current tax 7.90 10.04
Income Tax of Earlier Years (0.49) -
Net profit / (Loss) for the year 21.08 28.94

RESULTS OF OPERATIONS AND STATE OF AFFAIRS OF THE COMPANY

There have been no changes in the nature of business and operations of your Company during the year.

MATERIAL CHANGES AFFECTING THE COMPANY

No material changes and commitments affecting the financial position of the Company have occurred after the end of the financial year 2018-19 till the date of this report.

PERFORMANCE REVIEW

Standalone Performance:

Total income for the year is Rs. 46.87 Lakhs against Rs. 53.53 Lakhs in the previous year and Profit after tax for the year is Rs. 21.08 Lakhs against profit of Rs. 28.94 Lakhs in the previous year.

DIVIDEND AND TRANSFER TO RESERVE

The Board of Directors of your company, after considering holistically the relevant circumstances, has decided that in order to conserve the financial resources for the long term needs of the Company, it would be prudent, not to recommend any Dividend and no amount is transferred to Reserves for the financial year 2018-19.

DEPOSITS

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

SHARE CAPITAL

The paid up Equity Share Capital as at March 31, 2019 stood at Rs. 9,98,88,000/- divided into 99,76,400 equity shares of Rs. 10/- each fully paid up and 49,600 equity shares of Rs. 10/- each partly paid up at Rs. 2.50 per share, Rs. 7.50 per share being calls-in-arrears.

During the year under review, the Company has not issued shares or convertible securities or shares with differential voting rights nor has granted any stock options or sweat equity or warrants.

As on March 31, 2019, none of the Directors of the Company hold instruments convertible into Equity Shares of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company, its subsidiaries, prepared in accordance with the Companies Act, 2013, the Listing Regulations and applicable Indian Accounting Standards along with all relevant documents and the Auditors Report thereon, form part of this Annual Report.

In accordance with the provisions of Section 136 of the Companies Act, 2013 and the amendments thereto, the audited Financial Statements, including the consolidated financial statements and related information of the Company and financial statements of the subsidiary companies will be available on our website www.hindustan-appliances.in. These documents will also be available for inspection during business hours at the Registered Office of the Company.

SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES

The Company has 2 subsidiaries as on March 31, 2019. During the year, the Board of Directors reviewed the affairs of material subsidiaries. We have, in accordance with Section 129(3) of the Companies Act, 2013 prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Integrated Report.

Further, the particulars of subsidiary Companies as on March 31, 2019 have been included in Form MGT 9 which is annexed to this report in Annexure II and the report on the performance and financial position of each subsidiary and salient features of the Financial Statements in the prescribed Form AOC-1 is annexed to this report in Annexure III.

MANAGEMENT DISCUSSION AND ANALYSIS

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

SECRETARIAL STANDARDS

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

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India (SEBI). The Company has also implemented several best Corporate Governance practices as prevalent globally.

The report on Corporate Governance as stipulated under the Listing Regulations forms 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.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered by the Company during the financial year with related parties wherein ordinary course of business and on arms length basis and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in Form AOC-2 is not required.

Your Directors draw attention of the members to Note 21 to the financial statement which sets out related party disclosures in accordance with the Ind As 24, issued by the Institute of Chartered Accountants of India.

There were no materially significant related party transactions which could have potential conflict with interest of the Company at large.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The provisions of Section 135 of the Companies Act, 2013 read with Rule 3 of the Companies (Corporate Social Responsibility Policy) Rule, 2014 (‘CSR Rules) and other rules framed thereunder, relating to Corporate Social Responsibility (CSR) are not applicable to this Company.

RISK MANAGEMENT

The Risk Management Policy has been framed, implemented and monitored. Major risk identified by the businesses and functions are systematically monitored through mitigating actions on continuing basis.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to the financial statements commensurate with the size, scale and complexity of its operations. Such controls have been assessed during the year under review taking into consideration the essential components of the internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of the Chartered Accountants of India. Based on such results, assessments carried out by management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls were observed.

APPOINTMENT OF SHARE REGISTRAR AND TRANSFER AGENT

During the year under review, M/s. Purva Sharegistry (India) Private Limited, a SEBI Registered Share transfer agent, bearing Reg. No. INR00001112, having its address at 9 Shiv Shakti Ind. Est., J. R. Boricha Marg, Lower Parel (E), Mumbai 400011 has been appointed as a common share Registrar & Transfer Agent, for dealing with physical shares and demat shares of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2019, the applicable accounting standards read with requirements set out under Schedule III to the Act have been followed and there are no material departures from the same;

b) 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 as at March 31, 2019 and of the profit and Loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding the assets 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 the Company and that such internal financial controls are adequate and are operating effectively.

f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of

Association of the Company, Mr. Kalpesh R. Shah, retires by rotation at the ensuing annual general meeting. The Nomination and Remuneration Committee has recommended his reappointment.

In terms of Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Ms. Niyati Arun Sengar has been appointed as Company Secretary and Compliance Officer of the Company with effect from 14th February, 2018. The above said Ms. Niyati Arun Sengar is not related with any of the Directors of the Company.

Mr. Kalpesh Rameshchandra Shah, Managing Director and Mr. Sanjay Amrutlal Desai, CFO and Ms. Niyati Sengar, Company Secretary are the Key Managerial Personnel of your Company in accordance with the provisions of Sections 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re enactment(s) for the time being in force).

Declaration of Independence:

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Regulation 16(1)(b) of Listing Regulations (including any statutory modification(s) or re enactment(s) for the time being in force).

Evaluation of Boards Performance:

The Company has devised a Policy for performance evaluation of the Board, Committees and other individual Directors (including Independent Directors) which include criteria for performance evaluation of Non-executive Directors and Executive Directors. The evaluation process inter alia considers attendance of Directors at Board and committee meetings, acquaintance with business, communicating inter se board members, effective participation, domain knowledge, compliance with code of conduct, vision and strategy.

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

The Board carried out an annual performance evaluation of the Board, Committees, Individual Directors and the Chairman. The Chairman of the respective Committees shared the report on evaluation with the respective Committee members. The performance of each Committee was evaluated by the Board, based on report on evaluation received from respective Committees.

The report on performance evaluation of the Individual Directors was reviewed by the Chairman of the Board and feedback was given to Directors. Pursuant to the provisions of the 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 in force), the process for evaluation of the annual performance of the Directors / Board / Committees was carried out.

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the view of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors at which the performance of the Board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board excluding the independent directors being evaluated.

AUDITORS AND THEIR REPORTS

Statutory Auditors

M/s. N. B. Purohit & Co., Chartered Accountants, having ICAI Firm Registration No. 108241W, were appointed as Statutory Auditors of your Company at the Annual General Meeting held on 29th September, 2017 for a term of five consecutive years till the conclusion of Annual General Meeting of the Company to be held in the calendar year 2022. They have confirmed that they are not disqualified from continuing as Auditors of the Company. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by the members at every Annual General Meeting.

The requirement to place the matter relating to appointment of Auditors for ratification by members at every Annual General Meeting is done away with vide notification dated May 7, 2018 issued by the Ministry of Corporate Affairs, New Delhi. Accordingly, no resolution is proposed for ratification of appointment of Auditors.

The Company has received a letter from M/s. N B. Purohit & Co. to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and they are not disqualified for appointment.

Unmodified Auditors Report

The Auditors Report, on standalone and consolidated Financial Statements for the financial year 2018-19 forms part of this Annual Report and is unmodified i.e. does not contain any qualification, reservation or adverse remarks hence no explanations or comments is required to be given by the Board in the report.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the board of your Company has appointed M/s. D. Kothari & Associates, Practicing Company Secretaries as the Secretarial Auditor of the Company to undertake the secretarial audit of the Company.

The Secretarial Audit report given by the Secretarial Auditor in Form No. MR-3 as per the provisions of Section 204 of the Act read with Rules framed thereunder for the financial year ended March 31, 2019 has been annexed to this Board Report as Annexure I and forms part of this Annual Report.

Additionally, the Company has obtained a Secretarial Compliance Report for the financial year ended March 31, 2019 from M/s. D. Kothari & Associates in compliance with the Regulation 24A of the Listing Regulations and the SEBI circular CIR/CFD/CMD1/27/2019 dated 08th February, 2019.

Regarding the observations in the Secretarial Audit Report, directors wish to clarify that due to financial constraints, economic reasons, and administrative difficulties, Equity Shares of the Company are in process of getting demat and company has during the Financial year had appointed M/s. Purva Share Registry India Private Limited as their Registrar and Transfer Agent. Consequently, the Company is now able to provide & conduct e-voting, besides the share are not traded as also the floating stock of the public holding is very meager. The management has taken steps to comply the required compliances within the constraints mentioned herein as soon as possible.

DISCLOSURES

Vigil Mechanism

The Company has a robust Vigil Mechanism Policy of the Company, which also includes Whistle 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 senior executive of the Company. Protected disclosures can be made by a whistle-blower through an e-mail, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee

Meetings of the Board

Five meetings of the Board of Directors were held during the year on the following dates namely 30/05/2018, 14/08/2018, 14/11/2018, 04/12/2018 and 14/02/2019.

Particulars of loans given, investments made, Guarantees given and Securities provided

The full details of loans given, investments made, guarantees given have been provided in the notes to the financial statement for the year ended 31st March, 2019. The Company has not provided any security during the year.

Conservation of energy, technology absorption

The Company is not engaged in manufacturing activities, however wherever possible the Company has taken measures to conserve the energy.

Foreign Exchange Earnings and Outgo

FOREIGN EXCHANGE EARNING : NIL FOREIGN EXCHANGE OUTGOING : NIL

Extract of Annual Return

Pursuant to section 92(3) of the Companies Act, 2013 (‘the Act) and rule 12(1) of the Companies

(Management and Administration) Rules, 2014, extract of annual return in prescribed Form No. MGT - 9 is annexed as Annexure II and forms part of this report.

Website

The Annual Return of the Company for the year ended 31st March, 2019 prepared in compliance with Section 92 of the Companies Act, 2013 and related Rules in prescribed Form No. MGT 7 is placed on the website of the Company and can be accessed at the website : www.hindustan-appliances.in.

Particulars of employees and related disclosures

The total number of permanent employee as on 31/3/2019 was 4.

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

Having regard to the provisions of the first proviso to Section 136(1) of the act, the annual report excluding the information regarding the top ten employees is being sent to the members of the Company. The said information is available for inspection on all working days during the business hours at the registered office of the Company. Any member interested in obtaining such information, may write to the Company and the same shall be furnished on request.

Market Capitalization as on 31/3/2018 Rs. 210.54 Lacs Market Capitalization as on 31/3/2019 Rs. 210.54 Lacs There is no change in market capitalization PE ratio as on 31/3/2018 …….. Rs. 7.24 PE ratio as on 31/3/2019 …….. Rs. 10.00

Significant and Material Orders Passed By The Regulators Or Courts

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Companys operations in future.

Reporting of Frauds

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

Prevention of Sexual Harassment in the Company

The Company values the dignity of individuals and strives to provide a safe and respectable work environment to all its employees. The Company is committed to providing an environment, which is free of discrimination, intimidation and abuse. All employees are covered under this policy.

Your Directors state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as the provisions were not applicable to the company or there were no transactions 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.

- The Company does not have any scheme of provision of money for the purchase of its own shares by the employees or by trustees for the benefit of employees.

- Managing Director / Whole Time Director of the Company does not receive any remuneration or commission from the subsidiaries of the Company.

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

ACKNOWLEDGEMENT

The Board of our Company conveys its deep gratitude and appreciation to all the employees of the Company, for their tremendous efforts as well as their exemplary dedication and contribution to the Companys performance. We also acknowledge the invaluable support and contribution of all our business associates who continue their loyal partnership with our Company.

The Board of Directors would also like to thank its Shareholders, vendors, business partners, government and all other business associates for their continued support to the Company and the Management.

For and on behalf of the Board of Directors
Kalpesh R. Shah Sanjay A. Desai
Managing Director CFO / Director
DIN : 00294115 DIN : 00671414
Sunil H. Shah Niyati Sengar
Director Company Secretary
DIN : 02775683 M. No. : 50803
Place : Mumbai
Date : 26th April, 2019.