Hindoostan Mills Ltd

Dear Members,

Your Directors are pleased to present the 120^th Annual Report together with the Audited Financial Statements for the year ended March 31, 2024.

The Company's financial performance, for the year ended March 31, 2024 is summarized below:

REVIEW OF OPERATIONS

The revenue from operations of the Company for the financial year 2023-24 was Rs. 8826.40 Lacs as against Rs. 9908.60 Lacs of the previous year.

Textile

Demand of textiles reduced due to recession in global economy thereby putting pressure on the pricing which have also gone down by 15% to 20%. Spinning industry was under-utilized by about 25-30%. Prices of Cotton were more or less stable in the long run with slight reductions in between. But the Cotton waste generation was less due to lower utilization of spinning industry which led to increase in price of waste cotton, a major raw material for our Yarn products and making the Spinning unviable.

The ongoing legal matter and disciplinary actions relating to labour in the textile plant are moving at a slow pace. However, this remains one of the biggest challenges for the Company in the short term.

Trading sales (finished fabrics) have been steady with renewed focus on developing new customers and new products. The demand has been slow thereby effecting the overall sales and margins.

The share of value-added products has been maintained in the range of 15-20%. The scope of performance will increase more once we see better demand and resolve the Labour issues.

The Company has developed /sustained strong relationships with Bag manufacturers and apparel manufacturers to enable a direct touch with the end consumers. The Company produces mostly against sales order thereby controlling the inventory of finished goods.

Successful developments of various qualities of value-added products have provided increased visibility to the Brand and are appreciated by the Company's Dealers /Customers.

Engineering

The market is sluggish due to the global slowdown. Paper industry and textile industry is slow in performance; however, steel industry and corrugated industry are doing very well.

Sales of new Rolls have increased during the year under review. The Company obtained orders of Calender machines from Bangladesh and Uzbekistan. Further response from prospective customers from Brazil and Uzbekistan is good and likely to be materialized.

We are strengthening the marketing and sales teams to effectively penetrate new markets.

DIVIDEND

In view of operation losses incurred during the year under review, the Directors have not recommended dividend for the year ended March 31, 2024.

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, 2024.

DIRECTORS

Mr. Abhimanyu J. Thackersey, Director of the Company, retires by rotation at 120^th Annual General Meeting and being eligible offered himself for re-appointment as a Director of the Company.

The Board recommends his reappointment as a director retiring by rotation

The Board of directors has appointed and re designated Mr. Abhimanyu J. Thackersey and Mr. Khushaal C. Thackersey, the Executive Directors as Joint Managing Directors with effect from May 23, 2024.

The Board of Directors has recommended reappointment of Mr. Khushaal C. Thackersey as Joint Managing Director with effect from November 09, 2024, for a period of three years on remuneration as mentioned in the Notice of 120th Annual General Meeting.

The Board also recommends the appointment of Mr. Anant P. Patel as an Independent director with effect from August 09, 2024 for a period of five years.

Their brief profiles as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are part of the Notice convening the Annual General Meeting.

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.

INDUSTRIAL RELATIONS

The Company had taken disciplinary action against workers for absenteeism during Covid period from May 08, 2020 till January 18, 2021. Workers have resorted to the Court against the said action.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Your Company has, during the year under review, transferred unpaid dividend of Rs.1,45,508/- pertaining to the financial year 2015-16 on October 06, 2023 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 transferred 3193 equity shares pertaining to unpaid dividend of 2015-16 which was unpaid for more than seven years to IEPF on February 22, 2024.

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. Form AOC-2 giving details of transactions with related parties referred to in sub-section (1) of section 188 is herewith enclosed, marked as Annexure I.

The policy on Related Parties Transactions as approved by the Board is uploaded on the Company's website.

COMPLIANCE UNDER THE COMPANIES ACT

1) Annual return

Annual return referred to in sub-section (3) of section 92 has been placed on website of the Company, website address https://www.hindoostan.com/downloads/#Annual-Return

2) No. of Board meetings

Five Board Meetings were held during the year.

3) 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 had been followed and there are no material departures;

(b) that the directors had 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 sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 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.

4) 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.

5) Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director, appointment of Directors, Key Managerial Personnel, Senior Management and to fix/review their remuneration. Policy is on the Company's website www.hindoostan.com.

6) Particulars of Loans, Guarantees or Investments

The Company has not given any loan and guarantee nor made any investments under Section 186 of the Companies Act, 2013.

7) 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, Stakeholders Relationship and Nomination & Remuneration Committees.

8) 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 the Executive Directors to the median remuneration of the employees of the Company for the financial year.

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.

iv. The percentage increase in the median remuneration of employees in the financial year: 2.5%

v. The number of permanent employees on rolls of the Company: - 266 employees as on March 31, 2024

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.

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.

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

A. Conservation of energy

i. Steps taken by the Company for utilizing alternate sources of energy: -

- Nil

ii. The Capital investment on energy conservation equipment.

- Nil

B. Technology absorption

i) the efforts made towards technology absorption

- Nil

ii) the benefits derived like product improvement, cost reduction, product development or import substitution;

- Nil

C. Foreign Exchange Earnings & Outgo:

RISK MANAGEMENT POLICY

The Company has developed 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. Financial risk management is mentioned in Note no. 33 (VII) of Notes to Accounts, please refer page no. 103 to 108 of the Annual Report.

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 M/s. K. C. Nevatia & Associates, Practicing Company Secretaries 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 consisting of Mr. Sujal A. Shah, Mr. Bhavesh V. Panjuani, and Mr. Khushaal C. Thackersey. 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.

In view of the loss during the immediately preceding financial year i.e. 2022-23, the Company was not required to spend any amount on CSR activities during FY 2023-24. Since there was no CSR activity, annual report on CSR activities is not enclosed.

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 Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during financial year 2023-24.

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 https://www. hindoostan.com /downloads/#Policies-download.

AUDITORS

Statutory Auditors

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.

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 2024-25 on the remuneration of Rs.1,25,000/-. The Board has recommended to the Members to ratify the said remuneration.

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 II. The observations and comments appearing in the Secretarial Auditors' Report are self-explanatory and do not call for any further explanation / clarification by the Board.

SEXUAL HARASSMENT

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. 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.