DIRECTORS' REPORT Dear Members, Your Directors are pleased to present the 112th Annual Report together with the Audited Financial Statements for the year ended March 31, 2016. REVIEW OF OPERATIONS: The revenue from operations of the Company for the financial year 2015-16 is Rs.15,925.53 lakhs. The Loss before tax is Rs.206.35 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 Directors' Report. DIVIDEND: Your Directors are pleased to recommend a dividend of Rs.4.50 per equity share (last year Rs.4/- per equity share) for the financial year 2015-16, amounting to Rs.90.15 lakhs (inclusive of dividend tax). The dividend payout is subject to approval of Members at the ensuing Annual General Meeting. The dividend will be paid to Members whose names appear in the Register of Members as on August 02, 2016 and in respect of shares held in dematerialised form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date. 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, 2016. 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. The Board of Directors had on the recommendation of the Nomination & Remuneration Committee reappointed Mr. Abhimanyu Thackersey as Whole-time Director of the Company designated as "Executive Director" for a term of 5(Five) years with effect from June 08, 2016 upto June 07, 2021 subject to the approval of the Members in the ensuing AGM. Mr. Krishnadas D. Vora be re-appointed as an Independent Director of the Company not liable to retire by rotation to hold office for a term of 2 (Two) consecutive years commencing from the date of 112th AGM till conclusion of 114th AGM of the Company to be held in calendar year 2018. Mr. Naresh Kara and Mr. Hrishikesh Thackersey, Directors of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment as Non - Executive Director and Executive Director of the Company respectively. Mr. Nitin Singala, Independent Director of the Company resigned w.e.f. August 11, 2015.The Board places on record its deep appreciation for the valuable contribution made by him during his tenure as Director of the Company. Brief profiles of the Directors, proposed to be re-appointed as required under SEBI (Listing Obligations and 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 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' RESPONSIBILITY STATEMENT: Pursuant to the provision 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 financial statements for the year ended March 31, 2016, 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: During the year Mr. Devanand Mojidra, Company Secretary resigned effective October 06, 2015 and Mr. Jagat Reshamwala was appointed as a Company Secretary and President effective November 16, 2015. The Board of Directors at their Meeting held on May 04, 2016 accepted the resignation of Ms. Heena Shah, Chief Financial Officer effective May 16, 2016 and appointed Mr. K. Nandakumar as President (Finance and Accounts) effective May 04, 2016 to be designated as Chief Financial Officer effective May 17, 2016. 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.32,670/- 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-à-vis the Company. CASH FLOW STATEMENT: In conformity with the Accounting Standard 3 issued by the Institute of Chartered Accountants of India and the provisions of SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, the Cash Flow Statement for the year ended March 31, 2016 is annexed to the accounts. 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 Disclosures 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 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. Raoul 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 and the initiatives undertaken by the Company on CSR activities is enclosed herewith as Annexure -II. 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 2015-16. 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 115* Annual Genaral 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, re-appointed M/s. Anant Ashok Katyare, Cost Accountants as Cost Auditors of the Company for the financial year 2016-17 on a remuneration of Rs.1,05,000/- (Rupees One lakh Five Thousand Only) plus service tax as applicable for the said financial year 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 financial institutions, 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, Raoul Thackersey Chairman Mumbai, May 4, 2016 |