Hindustan Appliances Ltd Directors Report.

Dear members,

The Board of Directors is pleased to present the Companys 36th annual report and Companys Audited Financial Statements for the financial year ended March 31, 2020

1. FINANCIAL RESULTS

The Companys financial performance for the year ended March 31, 2020 is summarized below: 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 previous year.

The profit after finance cost and depreciation has decreased to Rs. 22.67 Lakhs for the year 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 of the company between end of the financial year and date of this report. There has been no change 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-2 relating 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 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 2019-20.

6. 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. The Board of Directors of the Company reviewed the affairs of subsidiaries of the Company. In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared consolidated financial statements of the company and all its subsidiaries, which form part of the Annual Report. Further a statement containing salient features of the financial statements of the Companys 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 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, 2020 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.

8. 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.

9. 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.

10. DIRECTORS RESPONSIBILITY STATEMENT Your Directors state that: a) in the preparation of the annual accounts for the year ended March 31, 2020, 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, 2020 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; and

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

11. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All transactions with Related Parties entered in Financial Year 2020, were in ordinary course of business and at arms length basis and in accordance with the provisions of the Act and the Rules made thereunder, the Listing Regulations and the Companys Policy on Related Party Transactions and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in Form AOC-2 is not required.

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

12. CORPORATE SOCIAL RESPONSIBILITY (CSR)

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

13. 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.

14. 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.

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

15. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to the financial statements. During the year such controls were tested and no reportable material weakness 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 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of the Company, Mrs Kanan Hemang Shah, retires by rotation at the ensuing Annual General Meeting. The Nomination and Remuneration Committee has recommended her reappointment.

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

As per the provisions of the Companies Act, 2013, Independent Directors have been appointed for a period of 5 years and shall not be liable to retire by rotation. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence prescribed under the act and the listing regulations.

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

Declaration by Independent Directors:

All Independent Directors have given declarations to the effect that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 read with Regulation 16 of SEBI (Listing obligations and Disclosures Requirements), Regulations 2015. In the opinion of the Board, Independent Directors fulfil the conditions specified in the Act, Rules made there under and Listing Regulations.

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 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.

17. AUDITORS AND AUDITORS REPORT Statutory Auditors

M/s. N. B. Purohit & Co., Chartered Accountants 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. 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.

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

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

Secretarial Auditor

The Board has appointed M/s. D. Kothari & Associates, Practicing Company Secretary to 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 per the provisions of Section 204 of the Act read with Rules framed thereunder for the financial year ended March 31, 2020 has been annexed to this Board Report as Annexure I and forms part of this Annual Report. The said report does not contain any qualification, reservation, adverse remark or disclaimer.

DISCLOSURES

(a) Meetings of the Board:

Four meetings of the Board of Directors were held during the year on the following dates 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 to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company.

The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to Executive and Non-executive Directors Key Managerial Personnel, Senior Management and other employees. The policy also provides the criteria for determining qualifications, positive attributes and Independence of Director and criteria for appointment of Key Managerial Personnel / Senior Management and performance evaluation which are considered by the Nomination and Remuneration Committee and the Board of Directors while making selection of the Annual Report 2019-20 Directors Report candidates.

(c) 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 executives of the Company. Protected disclosures can be made by a whistle-blower through an email, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee.

(d) 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, 2020. The Company has 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 has taken steps to conserve energy. The Company has not taken any technology domestically nor imported any technology and hence furnishing the details required doesnt 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) of the Companies (Management and Administration) Rules, 2014, extract of annual return in prescribed Form No. MGT - 9 is annexed as Annexure III and forms part of this report. The Annual Return of the Company for the year ended 31st March, 2020 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 web link: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 paid any remuneration to Whole-time Director / Managing Director and hence the question of furnishing information regarding ratio of remuneration of each director to the median remuneration of the employees of the Company is not applicable. There was no remuneration paid to any director and hence furnishing the details regarding the comparison of remuneration of the Key Managerial remuneration against company performance and percentile increase, key parameters for variable components is not applicable.

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

(i) 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.

(j) 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.

(k) 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 Hindustan Appliances Limited Annual Report 2019 - 20 to the Sexual 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 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.

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

- 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 Directors would like to express the sincere appreciation for the assistance and cooperation received from banks, government authorities and members during the year under review.

The Board of Directors also wish to place on record its deep sense of appreciation for the committed services by the Companys 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