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Hindoostan Mills Ltd.

BSE: 509895 | NSE: | Series: NA | ISIN: INE832D01020 | SECTOR: Textiles - General

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Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2011 2010 2009

Director’s Report

Dear Members,

The Directors are pleased to present the 114th Annual Report together with the Audited Financial Statements for the year ended March 31, 2018.

FINANCIAL RESULTS

The Company’s financial performance, for the year ended March 31, 2018 is summarized below:

(Rs. in lakhs)

Current Year Ended 31.03.2018

Previous Year Ended 31.03.2017

Gross Profit before Interest, Depreciation and Tax

411.30

241.29

Less: Finance Cost

234.69

266.53

Gross Profit after interest but before Depreciation

176.61

(25.24)

Less. Depreciation

1235.46

1243.06

Profit before Exceptional and Extraordinary Items and Tax

(1058.85)

(1268.30)

Add: Exceptional Items

(3.85)

(77.82)

Add: Extraordinary Items

--

--

Profit/(Loss) before Taxation

(1062.70)

(1346.12)

Less: (Excess) / Short Provision of Tax of earlier year

(3.69)

9.69

Profit / (Loss) after Tax

(1059.01)

(1336.43)

Balance brought forward from last year

--

--

Add: Transfer from General Reserve

Amount available for appropriation / Balance carried to Balance Sheet

(1059.01)

(1336.43)

REVIEW OF OPERATIONS:

The revenue from operations of the Company for the financial year 2017-18 is Rs.16,499.89 lakh. The Loss before tax is Rs.1,062.70 lakhs. The performance and overall view of the Textile, Engineering and Composite 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, 2018.

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, 2018.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.

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.

Mr. Hrishikesh Thackersey and Mr. Abhimanyu Thackersey Executive Directors resigned from the Directorship of the Company effective September 06, 2017. The Board placed on record its deep appreciation for valuable services provided by them during their tenure as Executive Directors of the Company. Mr. Krishnadas D. Vora, Independent Director will complete his term of 2 years on the Board of the Company and will retire on the conclusion of 114th Annual General Meeting of the Company. The Board placed on record its appreciation for the contribution made by him during his tenure as Director of the Company.

Mr. Prem Malik was appointed as Independent Director effective September 07, 2017. The Board at its Meeting held on December 11, 2017 approved payment of consultancy charges of Rs.2,50,000/- (including taxes, if any) per month effective October 01, 2017, Mr. Prem Malik to be considered as Non-Executive and Non-Independent Director whose period of office will be liable to retire by rotation.

The Board of Directors on the recommendation of the Nomination & Remuneration Committee appointed Mr. Rajiv Ranjan as Whole-time Director of the Company designated as “Executive Director & CEO” with effect from December 11, 2017 upto September 06, 2020 subject to approval of the Members in the ensuing Annual General Meeting (AGM).

Mr. Chandrahas Thackersey, Director of the Company will retire by rotation at the ensuing AGM and being eligible offer himself for re-appointment as Non - Executive 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.

(a) 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.

(b) Remuneration 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.

(c) Meetings:

During the year four Board Meetings and four Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

(d) 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’ RESPONSIBIUTY 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 they 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 loss of the Company for that period;

(c) that they had taken proper and sufficient care 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 they have prepared the annual accounts on a going concern basis;

(e) that they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and

(f) they 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:

The Board at their Meeting held on September 07, 2017 on the recommendation of Nomination and Remuneration Committee appointed Mr. Rajiv Ranjan as Chief Executive Officer (CEO) of the Company effective September 07, 2017.

Further the Board at its Meeting held on December 11, 2017 on the recommendation of Nomination and Remuneration Committee appointed Mr. Rajiv Ranjan as Executive Director & CEO from December 11, 2017 to September 06, 2020.

During the year Mr. K. Nandakumar, Chief Financial Officer resigned effective October 31, 2017 and in his place Ms Shraddha Shettigar was appointed as Chief Financial Officer effective April 25, 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 a sum of Rs.33,100/- to Investor Education and Protection Fund, in compliance with the provisions of Section 125 of the Companies Act, 2013. The said amount remained unclaimed by the Members of the Company for a period exceeding 7 years from its due date of payment.

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 arm’s 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.

All Related Party Transactions were placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions, which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

CASH FLOW STATEMENT:

In conformity with the Accounting Standard issued by the Institute of Chartered Accountants of India and the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Cash Flow Statement for the year ended March 31, 2018 is annexed to the accounts.

PARTICULARS OF EMPLOYEES:

There was no employee during 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.

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:

i) The ratio of the remuneration of Directors to the median remuneration of the employees of the company for the financial year.

Mr. Hrishikesh Thackersey (Upto 06.09.2017) : 7.6 Mr. Abhimanyu Thackersey (Upto 06.09.2017) : 13.8 Mr. Khushaal Thackersey : 7.1

Mr. Rajiv Ranjan (appointed on 11.12.2017) : 6.8

ii) 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. Hrishikesh Thackersey, Executive Director (Upto 06.09.2017)

N.A.

Mr. Abhimanyu Thackersey, Executive Director (Upto 06.09.2017)

N.A.

Mr. Khushaal Thackersey, Executive Director

42.86

Mr. Rajiv Ranjan, Executive Director & CEO(appointed on 11.12.2017)

N.A.

Mr. K. Nandakumar, Chief Financial Officer (Upto 30.10.2017)

N.A.

Mr. Jagat Reshamwala, Company Secretary

21.97

iii) The percentage increase in the median remuneration of employees in the financial year.

45.9%

iv) The number of permanent employees on rolls of the Company.

468 employees as on March 31, 2018 on rolls of the Company.

v) 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 KMP’s : 17.24%

Average Salary Increase for non-KMP’s : 0.66%

vi) The key parameters for any variable component of remuneration availed by the Director.

No Director has received any variable component of remuneration.

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 Statment 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 Anexure 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.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Your Company has been making continuous efforts to conserve energy and upgrade / absorb technology to optimize the energy cost. Information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) (A) & (B) of the Companies (Accounts) Rules, 2014, as amended from time to time, forms part of this Report. However, as per the provisions of Section 136 (1), the report and accounts are being sent to all the Members of the Company excluding the information relating to conservation of energy and technology absorption. Any shareholder interested in obtaining such particulars may inspect the same at the Registered Office of the Company or write to the Company Secretary for a copy.

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.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return as provided under Section 92(3) of the Companies Act, 2013 and as prescribed in Form MGT- 9 of Rules prescribed under Chapter VII relating to Management and Administration under Companies Act, 2013 is enclosed herewith as Annexure - I.

CORPORATE SOCIALRESPONSIBILITY 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. K.D.Vora and Mr. Sujal Shah. 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 Company’s website, www.hindoostan.com. The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company is enclosed herewith as Annexure -II. 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 FY 2017-18.

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 Company’s internal financial controls were adequate and effective during financial year 2017-18.

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 Company’s website, www.hindoostan.com.

AUDITORS:

(a) Statutory Auditors:

M/s. M.A. Parikh & Co., Chartered Accountants, Mumbai (Firm Registration No. 107556W) were appointed as statutory auditors of the Company to hold office till the conclusion of 115th Annual General Meeting (AGM) to be held in the calendar year 2019 at the AGM held on December 12, 2014. In terms of the provision of Section 139(1) of the Companies Act, 2013, the appointment shall be placed for ratification at every AGM. Accordingly, the appointment of M/s. M.A. Parikh & Co., Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the Members. In this regard, the Company has received a certificate from the Auditors confirming to the effect that if they are re-appointed, it would be in accordance with provisions of Section 141 of the Companies Act, 2013.

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 on recommendation of the Audit Committee at its Meeting held on May 16, 2018 re-appointed Mr. Pranav J. Taralekar, Cost Auditor to conduct cost audit of the cost records of the Company for FY 2018-19 and recommended payment of Rs.1,05,000/- p.a. plus taxes as applicable and requested the Members to ratify the remuneration as recommended above.

(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 Company’s executives, staff and workers.

For and on behalf of the Board of Directors,

Chandrahas Thackersey

Chairman

Mumbai, May 16, 2018

Director’s Report