Dear Members,
Your directors are pleased to present the 33rd Annual Report together with the Audited Financial Statements for the Financial Year ended March 31, 2024.
• FINANCIAL HIGHLIGHTS
*Previous year's figures are restated, regrouped, rearranged and recast, wherever considered necessary.
• BUSINESS OVERVIEW
During the year under review (FY 2023-24), the world continued to have the crises that started during FY 2022-23. The geo-political situation kept the global economy stressed due to supply chain disruptions and the liquidity crunch in the global banking system. Various developed economies witnessed recessionary conditions. However, despite these uncertainties, the Indian economy has proven to be quite resilient. India also faced its own set of challenges, including the increase in interest rates and higher inflation.
However, the overall Indian industry remained stable and is progressing well.
During FY 2023-24, the consolidated total revenues of the Company stood at Rs. 967.92 crores compared with Rs. 932.02 crores in the previous FY 2022-23, registering a growth of 3.9% on a year-on-year basis. The filtration, drying and other equipment contributed approximately 39% of the revenue at Rs. 373.66 crores compared to Rs. 344.19 crores in the previous year, posting a growth of 8.6% on a year- on-year basis. The glass lined business contributed to the total revenue at Rs 496.76 crores in FY 2023-24 against Rs. 579.08 crores in the previous FY 2022-23. This also includes the impact of the consolidation of the Thaletec financials. The consolidated EBITDA for the year was Rs. 115.57 crores compared with Rs. 145.07 crores in the previous FY 202223. The Company reported EBITDA margins of 11.94 % against 15.6% in the previous FY 2022-23. The consolidated PAT stood at Rs. 40.89 crores compared with Rs. 69.81 crores in the previous FY 2022-23.
During recent times, the key end users of the Company?s products viz. the Agrochemical, Specialty Chemical, Dyes, Pigment and the Active Pharmaceutical Ingredient manufacturers continued to grow, albeit at a lower rate. The order book of the Company for both the businesses continues to remain strong and this portends well for your Company?s prospects in the foreseeable future. Your Directors attribute this improved performance, apart from the market growth and external factors, to various steps taken by the management in multiple facets of the business viz. increased manufacturing capacity, improvements in production processes, improved planning, focus on timely delivery and better marketing coverage.
• SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
Thaletec, GmbH and Thaletec Inc., USA
THALETEC GmbH ("Thaletec") (a company incorporated in Germany) is a wholly owned subsidiary of the Company; and Thaletec in turn has a wholly owned subsidiary, Thaletec Inc., USA.
The Financial Highlights of Thaletec GmbH (including its step-down subsidiary) is as under:
Financial highlights
Kinam Group
The Company on 26th September 2023, completed the acquisition of 35.56% profit share with a controlling interest in Kinam Engineering Industries (Kinam) (a partnership firm) for the purchase consideration of Rs.7,996.66 lakhs in cash. The Company had acquired 0.50% equity shareholding in Kinam Enterprise Private Limited (KEPL) for the purchase consideration of Rs. 3.34 lakhs in cash. A business succession agreement and a Shareholders agreement has been executed on 10th January, 2024 to be effective from 1st January, 2024 between Kinam, its partners and Kinam Engineering Industries Private Limited (KEIPL), a company incorporated on 9th October, 2023, for the business succession and functioning of KEIPL.
Further, the Board has approved an additional acquisition of 34.44% profit share and controlling interest in Kinam by raising the profit share with controlling interest to 70.00% subject to fulfilment of certain obligations and court approval for amalgamation of KEPL into the Company. The Company has already filed draft scheme of Amalgamation between KEPL and the Company with both the Stock Exchanges for their in-principle approval and the same is under process.
In view of the above, the financial information for FY 2023-2024 includes the performance of Kinam / KEIPL, KEPL which have become subsidiaries and also Kinam Process Equipment Private Limited (KPEPL) which have become step-down subsidiary (subsidiary of KEPL). The brief details of the subsidiaries is as under:
Kinam Engineering Industries (Kinam) (a partnership firm) / succeeded to Kinam Engineering Industries Pvt Ltd from 01st January 2024 - Subsidiary
Kinam Enterprise Private Limited (KEPL) - Subsidiary
Kinam Process Equipments Private Limited (KPEPL) - step-down subsidiary (subsidiary of KEPL).
The Financial Highlights of Kinam (KEIPL) / KEPL/ KPEPL is as under:
# The financial information includes from 26th September 2023 to 31st December 2023 related to Kinam
Engineering Industries (Partnership firm) and from 01st January 2024 to 31st March 2024 related of Kinam Engineering Industries Pvt Ltd., upon its succession.
Thaletec (Previously known as H L Equipments)
Thaletec (Previously known as H L Equipments) is a Partnership Firm, in which your Company owns 99% ownership interest. The partners of the Firm have entered into an amendment of Partnership Deed on 25th August, 2023, for change of the name of the Firm from H L Equipments to Thaletec. The necessary name change in the records of the Registrar of Firms was done on 28th March, 2024.
During the year there were no operations in the firm, however, it is anticipated to have the business activities in near future.
As per the requirements of Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of subsidiary companies in Form AOC-1 is annexed hereto in Annexure-I and form part of this Report.
• DIVIDEND
Your Directors are pleased to recommend a Dividend of Rs. 1.1 (55%) per equity share of face value of Rs.2/- each for the financial year ended March 31, 2024. The Dividend, subject to the approval of the Members at the 33rd Annual General Meeting will be paid, within the time period stipulated under the Companies Act, 2013 (subject to deduction of Tax at source).
The Board of Directors had approved dividend of Rs.0.19 on 9.50% non -convertible cumulative redeemable preference share (NCCRPS). The dividend is 9.50% of the paid-up value of Rs.2 per share, (Rs. 8 has been redeemed as per the terms of issue of NCCRPS).
•TRANSFER TO RESERVES
The Board of Directors of your Company have transferred Rs.1,000 lakhs to General Reserve for the financial year under review.
•SHARE CAPITAL
Your Company?s paid-up Share Capital as on March 31, 2024 was Rs.14.40 crores, comprising of 6,82,65,480 equity shares of Rs.2 each, fully paid up and 18,75,152, 9.50% nonconvertible cumulative redeemable preference shares
(NCCRPS) having paid-up value of Rs.2 per share (Rs.8 has been redeemed as per the terms of issue of NCCRPS).
During the financial year under review, your Company had redeemed 20% of the face value of 9.50% Non-Convertible Cumulative Redeemable Preference Shares at a premium of Rs.189.38 per share as per the terms of issue and out of the profits of the Company in accordance with Section 55 of the Companies Act, 2013.
Your Company has not issued any shares with differential rights and hence no information as per the provisions of Section 43(a)(ii) of the Companies Act, 2013 read with Rule 4(4) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished.
Your Company has not issued any sweat equity shares during the financial year under review and hence no information as per the provisions of Section 54(1)(d) of the Companies Act, 2013read with Rule 8(13) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished.
Your Company has not issued any equity shares under any Employees Stock Option Scheme during the financial year under review and hence no information as per the provisions of Section 62(1)(b) of the Companies Act, 2013 read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished.
During the financial year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Companies Act, 2013 read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 and hence no information in connection therewith has been furnished.
During the year, the Company had not bought back its shares, pursuant to the provisions of Section 68 of Companies Act, 2013 and Rules made thereunder.
During the year, the Company had not made any provisions of money or had not provided any loan to the employees of the Company for purchase of shares of the Company or its holding Company, pursuant to the provisions of Section 67 of the Companies Act, 2013 and Rules made thereunder.
• DEPOSITS
Your Company had not accepted/ renewed any deposits from the public or the Members, within the meaning of Section 73 of the Companies Act, 2013 read with Chapter V and the Companies (Acceptance of Deposits) Rules, 2014, during the financial year 2023-2024 and as such no amount of principal or interest on deposit from public or Members, was outstanding as of the Balance Sheet date.
•CREDIT RATING
Your Company enjoys a good reputation for its sound financial management and the ability to meet its financial obligations in a timely manner. ICRA Limited has assigned its ratings with regards to the banking facilities enjoyed by your Company as "A" (for long term facilities) and A2+ (for short-term facilities) with a stable outlook.
The details of credit ratings obtained by the Company are placed on the Company?s website: https://hleglascoat.com/ wp-content/uploads/7071/08/577715 INTIMATION-OF- CRA-RATINGS-REG.-30 16.08.21.pdf.
•PARTICULARS OF LOANS, GUARANTEES, OR INVESTMENTS - UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The particulars of loans, guarantees, investments and securities provided during the financial year under review, covered under the provisions of Section 186 of the Companies Act, 2013 have been provided in the note no. 31(b) to the consolidated Financial Statements and the note no. 30(c) to the Standalone Financial Statements. Your Company has complied with the provisions of Sections 186 of the Companies Act, 2013 to the extent applicable, with respect to the loans and investments made.
•INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
During the financial year 2023-2024 and in accordance with the provisions of Sections 124 and 125 of the Companies Act, 2013 and the Rules made thereunder:
•Dividend amounting to Rs.16.01 lakhs pertaining to the financial year 2015-16, which remained unclaimed and unpaid for a period of seven years from the date of its transfer to the Unpaid Dividend Account, has been transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government.
•Rs.8.23 lakhs have been transferred to the IEPF Authority towards the final equity dividend declared for financial year 2022-2023 at the Annual General Meeting held on September 28, 2023, for the 7,48,350 equity shares held by the IEPF Authority.
•26,000 equity shares of Rs. 2 each have been transferred to the IEPF Authority after compliance of due procedures as prescribed and 9,000 shares have been credited to the Shareholders account against their claim, from the IEPF Authority.
•DETAILS OF NODAL OFFICER
In accordance with Rule 7(2A) of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the details of Nodal Officer of the
Company, for the purpose of coordination with Investor Education and Protection Fund Authority are as under:
Name: Achal Thakkar
Designation : Company Secretary and Nodal Officer Postal Address : H-106, GIDC Estate, Vitthal Udyognagar, Anand - 388121, Gujarat, India.
Telephone No. : 02692-236842-45 E-mail ID : share@hleglascoat.com
The Company has also displayed the details of Nodal Officer at its website at www.hleglascoat.com.
•PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Your Company has adopted a policy on Related Party Transactions and the said Policy is available in Policies section on https://hleglascoat.com/wp-content/ uploads/2022/02/PQLICY-FQR-RELATED-PARTY- TRANSACTIONS 11.02.2022-1.pdf
During the financial year under review, your Company has entered into related party transactions on an arm?s length basis and in the ordinary course of business and the same are in compliance with Section 188 of the Companies Act, 2013 and the Rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. No material contract or arrangement with related parties was entered into during the year under review. Therefore, there is no requirement to report any transaction in Form No. AOC-2 in terms of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014.
Further, all such contracts/ arrangements/ transactions were placed before the meetings of the Audit Committee, Board of Directors and the Shareholders, as may be required, for their approval. Prior approval/s of the Audit Committee/ Board / Shareholders, as may be required, including omnibus approvals, if any, are obtained on an annual basis, which is reviewed and updated on a quarterly basis.
•PARTICULARS RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company in its regular course of business makes best effort to conserve the resources and continuously implements measures required to save energy. The Company has strong commitment towards conservation of energy, natural resources and adoption of latest technology in its areas of operation.
The particulars as required under the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo, etc. are furnished in the Annexure-II, which forms part of this Report.
•PARTICULARS OF REMUNERATION OF DIRECTORS AND EMPLOYEES
A.The details of the ratio of the remuneration of each director to the median remuneration of the employees and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed hereto in Annexure-III and forms part of this Report.
B.The details of the Top 10 employees of the Company in terms of remuneration drawn as required under Section 134 of the Companies Act, 2013 and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed hereto in Annexure-IV and forms part of this Report.
C.None of the employees of the Company have drawn remuneration of Rs.1,02,00,000 or more per annum or Rs. 8,50,000 or more per month or for any part of the year, except Mr. Himanshu Patel, Managing Director, whose remuneration details is mentioned in the Corporate Governance Report and except the persons whose details are mentioned in the Top 10 employees in Annexure IV, forming part of the Board?s Report. There being no other employees falling under the subject category, the particulars required to be disclosed under Section 134 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not required to be furnished.
D.None of the employees of the Company, employed throughout the year under review or part thereof, was in receipt of remuneration which was in excess of that drawn by the Managing Director or Whole-time Director or Manager and holds by himself or along with his spouse and dependent children, exceeding two percent of the equity shares of the Company.
•ANNUAL RETURN
The Annual Return for the financial year 2023-2024 has been uploaded on the Company?s website: https:// hleglascoat.com/corporate-governance/in accordance with the provisions of Section 134 of the Companies Act, 2013.
•BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT [BRSR]
Pursuant to the provisions of Regulation 34(2)(f)of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI Circular No. CIR/ CFD/
CMD/10/2015 dated November 4, 2015 and the Business Responsibility & Sustainability Report detailing the various initiatives taken by the Company on the environmental, social and governance front, is annexed hereto in Annexure-V and forms part of this Report.
•CORPORATE GOVERNANCE
Pursuant to the provisions of Regulation 34(3) read with Schedule V(C) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Report on Corporate Governance is annexed hereto in Annexure-VI and forms part of this Report. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. The requisite Compliance Certificate as required under Part E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, issued by Mr. D. G. Bhimani (CP No. 6628), proprietor of M/s. D. G. Bhimani & Associates, Practising Company Secretaries, Anand confirming to the compliance with the conditions of Corporate Governance, is also annexed hereto which forms part of this Report.
•MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34(3) read with Schedule V(B) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Report on Management Discussion and Analysis is annexed hereto in Annexure-VII and forms part of this Report.
•RISK MANAGEMENT
Your Company recognizes the importance of managing risk in the business to sustain growth. Pursuant to provisions of Regulations 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 134(3)(n) of the Companies Act,2013 ("the Act") and other applicable provisions, if any, the Board of Directors of the Company has approved and framed "Risk Management Policy" of the Company, which is available on the website of the Company at https://hleglascoat.com/wp-content/ uploads/2Q21/Q9/HGL Risk-Management-Policy.pdf. The Risk Management Policy has a detailed risk assessment and minimization procedures and wherein all material risks faced by your Company are identified and assessed. The Risk Management Policy adopted by your Company establishes a structured and disciplined approach to Risk Management, in order to guide the Board on decisions on risk related issues and to mitigate various risks viz. economic risk, production risk, inventory management risk, technology risk, competition risk, financial risk, raw material price fluctuation risk, pandemic risk, human resource risk, reputation risk, legal risk, regulatory risk, cyber risk, etc.
Your Company has also formed a Risk Management Committee, having the following members:
a.Mr. Aalap Patel - Chairperson (Executive Director)
b.Mr. Sandeep Randery - Member (Independent Director)
c.Mr. Yatish Parekh - Member (Independent Director)
During the year 2023-2024 , Three (03) Meetings were held on May 29, 2023, November 6, 2023 and February 13, 2024 wherein, all the major and important risks identified for the Company and relevant mitigation measures were reviewed and discussed.
The main objective of this Policy is to ensure sustainable business growth with stability and to promote a proactive approach in reporting, evaluating and resolving risks associated with the Company?s business and processes.
The risks faced by the Company and the various measures taken by the Company are detailed in Management Discussion and Analysis Report.
• DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3) C read with 134(5) of the Companies Act, 2013, your Directors confirm that:
(a)in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b)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 of the Company for that period;
(c)the Directors 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)the Directors had prepared the annual accounts on a going concern basis; and
(e)the Directors, in the case of a listed company, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(f)the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
•DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Directors of your Company are well experienced with expertise in their respective fields of technical, financial, strategic and operational management and administration. None of the Directors of your Company are disqualified under the provisions of Section 164(2)(a) and (b) of the Companies Act, 2013. During the period under review, no Non-Executive Director of your Company had any pecuniary relationship or transactions with your Company except as stated elsewhere in this Report and in the notes to the accounts.
Mr. Aalap Patel, Executive Director (DIN: 06858672), is retiring by rotation and being eligible, have offered himself for re-appointment at the ensuing Annual General Meeting. The brief profile of Mr. Aalap Patel has been given in the Notice convening the Annual General Meeting.
The day-to-day operations of your Company are managed by its Key Managerial Personnel ("KMP") viz. the Managing Director, the Executive Director, the Chief Financial Officer and the Company Secretary. As required under the provisions of Section 203 of the Companies Act, 2013, Mr. Himanshu Patel (DIN 00202312), Managing Director, Mr. Aalap Patel (DIN 06858672), Executive Director, Mr. Harsh Patel (DIN: 00141863), Whole-Time Director, Mr. Naveen Kandpal, Chief Financial Officer of the Company and Mr. Achal Thakkar, Company Secretary are the Key Managerial Personnel of your Company as on the date of this Report.
Policy on Directors? Appointment and Remuneration including Criteria for Determining Qualifications, Positive Attributes, Independence of a Director.
The Nomination and Remuneration Committee has formulated the Policies relating to the appointment and remuneration of the Directors of your Company, laying down criteria for determining qualification, positive attributes, independence of directors, etc. The Policy is available on the Company?s website: https://hleglascoat.com/wp- content/uploads/2021/04/POLICY-FOR-APPOINTMENT- OF-DIRECTORS1.pdf.
•BOARD OF DIRECTORS AND COMMITTEES FORMED THEREUNDER
The Board of Directors has constituted the following Statutory Committees:
1.Audit Committee
2.Stakeholders Relationship Committee
3.Nomination and Remuneration Committee
4.Corporate Social Responsibility Committee
5.Risk Management Committee
6.Independent Directors? Committee
The details related to the composition of the Board of the Company and the Committees formed by it and meetings conducted during the year under review are given in the Corporate Governance Report annexed hereto and forming part of this Report.
•NUMBER OF BOARD MEETINGS
The Company has complied with the of the Companies Act, 2013, Listing Regulations and Secretarial Standard - 1 (SS-1) for holding Board Meetings and the gap between two meetings did not exceed 120 days. Six (6) Meetings of the Board of Directors of the Company were held during the year under review on May 29, 2023, July 31, 2023, August
07.2023, September 26, 2023, November 06, 2023 and February 13, 2024.
•DECLARATION BY INDEPENDENT DIRECTORS
Pursuant to Section 149(7) of the Companies Act, 2013, the Company has received declarations from all Independent Directors confirming that they meet the criteria of independence as specified in Section 149(6) of the Companies Act, 2013, as amended, read with Rules framed thereunder and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In terms of Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence and that they are independent of the Management. The Board of Directors of the Company have taken on record the declaration and confirmation submitted by the Independent Directors after undertaking due assessment of the veracity of the same. The Board is of the opinion that the Independent Directors possess the requisite qualifications, experience, expertise and they hold high standards of integrity. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013 and have also confirmed that their registration with the databank of Independent Directors maintained by the Indian Institute of Corporate Affairs is in compliance with the requirements of the Companies (Appointment and Qualifications of Directors) Rules, 2014.
• PERFORMANCE EVALUATION OF THE DIRECTORS
During the financial year 2023-2024, the Board of Directors of your Company has carried out an Annual Performance Evaluation of the Board, its Committees and all the individual Directors as per the Company?s Policy for Performance Evaluation of Directors.
(i)The Board, in its Meeting held on February 13, 2024, has carried out the evaluation task of the entire Board, the Committees of the Board, the Chairman, the Managing Director, the Executive Director, the Whole-Time Director, the Non-Executive Director and the Independent Directors individually, for the period from January 1, 2023 to December 31, 2023. In accordance with the provisions of the Section 149 of the Companies Act, 2013 read with Schedule IV, annual performance evaluation of the Independent Directors was carried out by the entire Board of Directors, excluding the Directors being evaluated.
The performance of each Independent Director has been evaluated on various parameters like ethics/ values, inter-personal skills, competence and general administration, liaison skills, participation in meetings, etc. The Board was satisfied that each of the Independent Directors has been acting professionally and has brought his/ her rich experience in the deliberations of the Board.
(ii)The Independent Directors, in their separate Meeting held on February 13, 2024, carried out the performance evaluation of all the non-Independent Directors and the Board as a whole, with special attention to the performance of the Chairperson of the Company for the period from January 1, 2023 to December 31, 2023. The various criteria considered for the purpose of evaluation included composition of the board, ethics/ values, inter-personal skills, competence and general administration, liaison skills, participation in meetings, etc. The Independent Directors were of the view that the Chairperson and all the other non-Independent Directors were competent and the results of the evaluation were satisfactory and adequate to meet your Company?s requirements.
(iii)The Nomination and Remuneration Committee, in its Meeting held on February 13, 2024, reviewed the performance of the Executive Directors of the Company with special attention to the leadership criteria for the Managing Director, the Executive Director and Whole-Time Director for the period from January 1, 2023 to December 31, 2023.The various
criteria considered for purpose of evaluation included ethics/ values, inter-personal skills, competence and general administration, liaison skills, participation in meetings, etc. The Committee was of the view that the Managing Director, Executive Director and WholeTime Director were capable and the results of the evaluation were satisfactory and adequate to meet your Company?s requirements.
The Board also expressed its satisfaction over the process of evaluation.
•CORPORATE SOCIAL RESPONSIBILITY [CSR]
Your Company has formed a CSR Committee in accordance with the provisions of Section 135 of the Companies Act, 2013, details of which are provided in the Corporate Governance Report annexed hereto and forming part of this Report. The CSR Policy of your Company as approved by the Board of Directors is available on the Company?s website: https://hleglascoat.com/wp-content/uploads/2021/04/ Csr-Policy.pdf in the Corporate Social Responsibility section.
The CSR activities as required to be undertaken under Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014, including a brief outline of the Company?s CSR Policy, total amount to be spent under the CSR Policy for the financial year 2023-2024, amount unspent and the reason for the unspent amount, is annexed hereto in Annexure-VIII and forms part of this Report.
•VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has established a Whistle Blower Policy as envisaged under the provisions of Section 177 (9) of the Companies Act, 2013 and the Rules made thereunder and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and a vigil mechanism to provide a framework to promote responsible and secure whistle blowing and to provide a channel to the employee(s) and Directors to report to the management, concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct or policy/ies of the Company, as adopted/framed from time to time. The Policy provides for protecting confidentiality of those reporting violation(s) and restricts any discriminatory practices against them. The mechanism provides for adequate safeguards against victimisation of employee(s) and Directors to avail of the mechanism and also provide for direct access to the Chairperson of the Audit Committee in exceptional cases.
The Policy covers malpractices and/ or events related to all issues that could have grave impact on the operations and performance of the business of your Company. The
concerned matters are to be reported to the Compliance Officer and/ or the Chairperson of the Audit Committee. The Audit Committee monitors the Vigil Mechanism of your Company.
During the financial year 2023-2024 no employee has been denied access to the Compliance Officer/ the Chairperson of the Audit Committee, who have been appointed as the Whistle Blower Officers of the Company.
The details of establishment of Vigil mechanism/ Whistle Blower policy and the contact details of the Whistle Blower QfficersareavailableontheCompany?swebsite:https://www. hleglascoat.com/wp-content/uploads/2023/08/HGL-WHISTLE- BLOWER-POLICY-VIGIL-MECHANISM 12.06.2021-R.pdf.
•DIVIDEND DISTRIBUTION POLICY
In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company has adopted the Dividend Distribution Policy at its Meeting held on June 12, 2021 which is available on the Company?s Website at https://hleglascoat.com/corporate-governance/.
•PREVENTION OF SEXUAL HARASSMENT AT THE WORKPLACE
Your Company has framed a Policy against sexual harassment and a formal process for dealing with complaints relating to harassment or discrimination. The said Policy is in line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. As per the provisions of Section 4 of the said Act, the Board of Directors has constituted the Internal Complaints Committee (‘ICC?) to deal with the complaints received by your Company pertaining to gender discrimination and sexual harassment at the workplace. No unresolved complaints were there as on the start of the financial year, no complaints were received during the year and no complaints were pending to be resolved as at the end of the financial year.
•MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments, affecting the financial position of your Company which have occurred during the period between the end of the financial year to which the financial statements relate and the date of this Report.
•INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has strong integrated systems for internal financial control system commensurate with the size and scale of its operations and the same has been operating effectively. The Internal Auditor evaluates the efficacy and adequacy of internal control system, accounting procedures and policies adopted by the Company for efficient conduct of its business, adherence to Company?s policies, safeguarding of Company?s assets, prevention and detection of frauds and errors and timely preparation of reliable financial information etc. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon if any, were presented to the Audit Committee of the Board.
Your Company has established effective internal control systems to ensure accurate, reliable and timely compilation of financial statements, to safeguard assets of your Company and to detect and mitigate irregularities and frauds.
In accordance with the requirements of the Section 143(3) (i) of the Companies Act, 2013, the Statutory Auditors have confirmed the adequacy and operating effectiveness of the internal financial control systems over financial reporting.
•STATUTORY AUDITORS AND INDEPENDENT AUDITORS' REPORT
M/s. M M Nissim & Co LLP, Chartered Accountants, Mumbai (Firm Registration No. 107122W/W100672) have been appointed as the Statutory Auditors of your Company for a tenure of 5 (five) years at the 31st Annual General Meeting to hold the office from conclusion of 31st Annual General Meeting till the conclusion of 36th Annual General Meeting.
The Auditors Report given by M/s. M M Nissim & Co LLP, Statutory Auditors, on the Financial Statements of your Company, for the year ended March 31, 2024, forms part of the Annual Report. There is no qualification, reservation or adverse remark or any disclaimer of opinion in their Report.
In accordance with the Section 40 of the Companies (Amendment) Act, 2017 (corresponding to Section 139 of the Act) and revised Secretarial Standard-2, the requirement of ratification of the appointment of the Statutory Auditors in every Annual General Meeting of the Company during the tenure of appointment has been dispensed with. Hence, the matter has not been placed as an agenda item in the AGM Notice for the approval of the shareholders.
•REPORTING OF FRAUDS
There have been no frauds reported under sub-section (12) of Section 143 of the Companies Act, 2013, during the financial year under review, to the Audit Committee or the Board of Directors.
•SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT
The Company had appointed M/s. D. G. Bhimani and Associates, Practising Company Secretaries (CP No. 6628) as the Secretarial Auditors for the financial year 2023-2024 in accordance with Section 204 of the Companies Act, 2013. The Report on Secretarial Audit issued by the Secretarial Auditor for the financial year 2023-2024, in Form MR-3, is annexed hereto in Annexure- IX and forms part of this Report. There is no qualification, reservation or adverse remark or any disclaimer of opinion in their Report.
In terms of Section 204 of the Companies Act 2013, on the recommendation of the Audit Committee, the Board has appointed M/s. N. M. & Co., Practicing Company Secretaries (C P No. 9651), as the Secretarial Auditors for the financial year 2024-25. The Company has received the consent from M/s. N. M. & Co. for the said appointment.
•COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETING
The Company has complied with the provisions of Secretarial Standards on Meetings of the Board of Directors (SS-1) and on General Meetings (SS-2).
•INTERNAL AUDITORS
M/s CNK & Associates LLP, Chartered Accountants (Firm Registration No. 101961W) had conducted the internal audit of your Company for the Anand works for the financial year 2023-2024; and M/s. AKMK Associates, Chartered Accountants (Firm Registration No.: 136206W) had conducted the internal audit of your Company for the Maroli works and for the Silvassa Works for the financial year 2023-2024.
Pursuant to provisions of Section 138 of the Companies Act, 2013 and the Rules made thereunder, on the recommendation of the Audit Committee, the Company has appointed M/s CNK & Associates LLP, Chartered Accountants (Firm Registration No. 101961W) and M/s AKMK Associates, Chartered Accountants (Firm Registration No.: 136206W) as the Internal Auditors, for the Anand works and the Maroli & Silvassa Works respectively for the financial year 2024-25.
The Company has received the consent from the respective firms for their said appointment.
•COST AUDITORS
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Record and Audit) Rules, 2014, your Company has duly maintained the cost records as prescribed under the said rules. The cost audit for the financial year 2023-2024 of the said records was carried out by M/s. Nanty Shah & Associates, Cost Accountants (Membership No. 31497), the Cost Auditors appointed by the Company.
Further, the Board on the recommendation of the Audit Committee has appointed M/s. Nanty Shah & Associates, Cost Accountants (Membership No. 31497), as the Cost Auditors of the Company for the financial year 2024-2025. The Company has received the consent from them for their re-appointment. Accordingly, the Board of Directors recommends to the Members, the resolution seeking approval of the members for ratifying the remuneration payable to the Cost Auditors for FY 2024-2025 as per details provided in the Notice of the ensuing Annual General Meeting.
•LISTING REGULATIONS COMPLIANCE / LISTING ON NSE
The Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, and Secretarial Standards. There has been no penalty / stricture imposed on the Company by Stock Exchanges or SEBI or any other Statutory Authority on any matter related to capital markets during last three financial years.
•DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS/ TRIBUNAL
No significant and material orders were passed by the Regulators or the Courts or Tribunals during the year under review.
•PROCEEDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016
There are no proceedings, either filed by the Company or against the Company, pending under the Insolvency and Bankruptcy Code, 2016 as amended, before the National Company Law Tribunal or other Courts as on March 31, 2024.
•GENERAL
•During the year under review, there was no change in nature of business of the Company.
•During the year under review, there was no one time settlement with the Banks/ Financial institutions.
• ACKNOWLEDGEMENTS
Your Directors and Management take this opportunity to thank your Company?s customers, vendors, investors, business associates, bankers and other stakeholders for their continued support. Your Directors also take this opportunity to applaud the contributions made by all the employees to the operations of your Company for its continued growth and success.