Equity Analysis

To

The Members,

The Directors have pleasure in presenting the 36^th Annual Report of the company together with the financial statements, for the year ended on 31^st March 2024.

During the Financial Year 2023-2024, The Financial position of the Company is as under: (Amount in Lakhs)

During the period under review, the turnover of the Company has decreased slightly to Rs 304.16 Crores as against Rs 321.38 Crores in the financial year 2022-23 and earned profit of Rs 16.41 Crores in the year 2023-24 as compared to profit of Rs 4.86 Crores in the previous year 2022-23.

To conserve the funds for the business of the Company including the funding for the expansion plans, your directors regret their inability to recommend any dividend for the financial period 2023-24.

Taking into account overall financial performances of the Company, your Directors have not transferred any amount to General Reserve Account.

The Company is pleased to present the results for the financial year 2023-24, albeit with a small decrease in sales and however a substantial increase in profits. The company focused on high value products, which gave substantially high margins to the company and hence increased its profits, as also reduced sales of low value added products resulting in much lower sales.

The Company had completed all its planned expansions to increase the capacities of its manufacturing unit in the Kutch region of the state of Gujarat for manufacturing BOPP Packaging Tapes for the international markets. The company is now investing in finishing equipment for making high value added products and is confident of a substantial increase in sales and profits in the current financial year. The Company will also be participating in a number of overseas exhibitions this financial year to increase its overseas sales and has also appointed many sales representatives and distributors around the globe to sell its products.

The Company also continues to make efforts to increase the sales of Carton Sealing Tapes in the domestic markets and other Specialty Adhesive Coated products by providing the customers an excellent quality product backed by dedicated customer services from its unit located in north India.

The company is looking for adding new products in its existing product range and during the current year it has invested to set up new manufacturing facilities by way of a 100% subsidiary company namely Bagla Technopack Private Limited, which will start production in the current financial year for manufacturing highly innovative and sustainable packaging for the food industry.

During the financial year under review, no changes have occurred in the nature of the Company's business.

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and date of the director report of the Company to which the financial statements relates.

There have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory and Secretarial Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2023-24.

The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report and also available on the Company website https://www.bagla-group.com/investor-relations/.

During the year under review, the company has one wholly owned subsidiary company named Bagla Technopack Private Limited. The Company does not have any associate or Joint Venture Company.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of the Company's wholly owned subsidiary in Form AOC-1 is attached as “Annexure A”.

Pursuant to provisions of Section 186 of the Act, read with Companies (Meetings of Board and its Powers) Rules, 2014, the particulars of loans given, guarantees provided and investments made by the Company during the Financial year 2023-24 are disclosed in the notes to Financial Statements which forms part of this report.

During the year under review, your Company did not accept any deposits within the meaning of provisions of Chapter V- Acceptance of Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.The Company had taken unsecured loan from managing director as per note no. 46(B) of Notes to accounts. The said

^^GROUP

Director had submitted a declaration that said unsecured loan were provided to the Company out of his own fund.

The Report given by M/s. Salarpuria & Partners, Chartered Accountants (Firm Registration No: 302113E)), Statutory Auditors on the financial statements of the Company for the Financial year 2023-24 is part of Annual Report. The Notes on financial statements referred to in Auditor's Report are self-explanatory and do not call for any further comments. There has been no qualification, reservation or adverse remark or disclaimer in their Report on Financial Statement for F.Y. 2023-24.

a) Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed Mr. Puneet Kumar Pandey, a Company Secretary in Practice to undertake the Secretarial Audit of the Company for the year ended 31^st March, 2024. The Secretarial Audit Report is annexed as “Annexure B”.

b) CERTIFICATE BY PRACTICING COMPANY SECRETARY

The secretarial Auditor of the company M/s Puneet Pandey & Associates has issued a certificate that none of Director on the Board of the Company have been Debarred or disqualified from being appointed or continuing as a directors of the Companies by the board/Ministry of Corporate Affairs or any such statutory authority. The certificate is attached as “ANNEXURE C”.

As per section 138 of the Companies Act, 2013, the Company is required to have Internal Auditor. In this connection, the Board of Directors of the Company has on the recommendation of the Audit Committee, approved the appointment of M/ s SJC & Co., Chartered Accountants (Firm Registration No. 031696N) as the Internal Auditor of the Company.

Pursuant to Section 148 of the Companies Act, 2013 read with the relevant rules made thereunder or any amendments thereof, the Company is required to maintain cost records and accordingly such accounts and records are made and maintained by the Company in respect of its business activity and the same is required to be audited. Your Board had, upon the recommendation of the Audit Committee, appointed M/s JSN & CO., Cost Accountant to audit the cost accounts of the Company for the Financial Year 2024-25 at a remuneration of upto 75,000(Rupees Seventy Five Thousand) plus taxes and out-of-pocket expenses. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the members in a general meeting for ratification.

Accordingly, a resolution seeking Member's ratification for the remuneration payable to M/s JSN & CO., Cost Auditors is included in Notice convening the Annual General Meeting. The Notes referred to in the Cost Auditors' Report are selfexplanatory and do not call for any further comments.

The Cost Auditors' Report does not contain any qualification, reservation or adverse remark.

During the year under review, neither the statutory auditors nor the Secretarial Auditors has reported to the Audit Committee under section 143(12) of the Companies Act, 2013, any instance of fraud committed against the Company by its officer or employees, the details of which would need to be mentioned in the Board's Report.

The paid-up Equity Share Capital as on 31st March, 2024 was Rs. 5,11,63,000. During the year under review, the Company has not issued any shares.

The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company.

III. Declaration of Independence from Independent Director

The Company has received the necessary declaration from each Independent Directors in accordance with Section 149(7) of the Companies Act, 2013, that he meets the criteria of independence as laid out in sub-section (6) of Section149 of the Companies Act, 2013.

In accordance with the provisions of Sections 2(51) and 203 of the Act, read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as on March 31, 2024 the following were the Key Managerial Personnel of the Company:

*Mr. Suresh Ajila resigned from the position of Whole Time Director w.e.f August 14, 2024.

Ten meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report.

In line with the requirement of Regulation 25(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a meeting of the Independent Directors of the Company was held on 31st March, 2024, wherein the performance of the non-independent directors including Chairman was evaluated.

The Board, based on the recommendation of the Nomination and Remuneration Committee (“NRC”), evaluated the effectiveness of its functioning and that of the Committees and of individual directors by seeking their inputs on various aspects of Board/ Committee Governance.

The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in the long-term strategic planning and fulfillment of Director's obligations and fiduciary responsibilities, including but not limited to active participation at the Board and Committee meetings.

The Company being a Listed Company was required to constitute an Audit Committee under Section 177(1) of the Companies Act, 2013 and Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014. The Composition of the Audit Committee is provided in the Corporate Governance Report forming part of this report. All the recommendations made by the Audit Committee were accepted by the Board.

The Company was required to constitute a Stakeholders Relationship Committee under Section 178(5) of the Companies Act, 2013. The Composition of the Stakeholders Relationship Committee is provided in the Corporate Governance Report forming part of this report.

Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act, 2013 read with Rule 7 of Companies (Meetings of

^^GHOUP

Board and its Powers) Rules, 2014 and as per the listing regulations, the Company has adopted a Whistle Blower Policy, which provides for a vigil mechanism that encourages and supports its Directors and employees to report instances of unethical behavior, actual or suspected, fraud or violation of the Company's Code of Conduct or Ethics Policy. It also provides for adequate safeguards against victimization of persons who use this mechanism. The policy adopted by the company is also posted on the website of the company www.bagla-group.com.

The Company being a Listed Company was required to constitute a Nomination and Remuneration Committee under Section 178(1) of the Companies Act, 2013 and Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014. The Composition of the Nomination and Remuneration Committee is provided in the Corporate Governance Report forming part of this report.

Remuneration of the Key Managerial Personnel and Employees of the Company is based on the performance of the company. Remuneration of the employees are revised on timely basis and based on their performances. The company generally sees the ability and review the performance of the candidate before the appointment of the Director.

With reference to Section 134(3)(h) of the Act, all contracts and arrangements with related parties under Section 188(1) of the Act, entered by the Company during the financial year, were approved by the Audit Committee and wherever required, also by the Board of Directors. No contract or arrangement required approval of shareholders by a resolution.

Further, during the year, the Company had not entered into any contract or arrangement with related parties which could be considered ‘material' (i.e. transactions exceeds rupees one thousand crore or ten percent of the annual consolidated turnover, whichever is lower as per the last audited financial statements entered into individually or taken together with previous transactions during the financial year) according to the policy of the Company on materiality of Related Party Transactions.

Further, there were no transactions undertaken during the year which were not at an arms' length basis, hence the disclosure under Form AOC-2 is not applicable to the Company.

During the year under review, the policy on Materiality of the Related Party Transactions and on dealing with the Related Party Transactions was amended to align it with the amendments in the listing Regulations.

Members may refer to Note No. 46 of the Standalone Financial Statements which sets out related party disclosures pursuant to Ind AS.

The Board reviews the risks faced by the Company and formulates risk management and mitigation procedures from time to time, which are also reviewed to ensure that executive management controls risk through means of a properly defined framework. The major risks have been identified by the Company and its mitigation process/measures have been formulated in the areas such as business, customer service, market, litigation, logistics, project execution, financial, human resources, environment and statutory compliance.

The Company has in place an Anti Sexual Harassment Policy, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, the Company did not receive any complaint.

The Company complies with all applicable mandatory secretarial standards issued by the institute of Company Secretary of India.

The Independent Directors have submitted their disclosures to the Board that they fulfill the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves for their continuance as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

During the year under review no employee whether employed for the whole year or part of the year, was drawing remuneration exceeding the limits as laid down under Section 197(12) 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 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Company Secretary in advance.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been enclosed with the report as “ANNEXURE F”.

a) There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.

b) There was no instance of onetime settlement with any Bank or Financial Institution.

Accordingly, pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a) In the preparation of the annual financial statements for the year ended March 31, 2024, the applicable Accounting Standards had been followed along with proper explanation relating to material departures.

b) for the financial year ended March 31,2024, such accounting policies as mentioned in the Notes to the financial statements have been applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company and of the Profit of the Company for the year ended March 31,2024.

c) That proper and sufficient care has been taken 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) The annual financial statements have been prepared on a going concern basis.

e) That proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively.

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

The Board appreciates and places on record the contribution made by the employees during the year under review. The Board also places on record their appreciation of the support and co-operation of all stakeholders particularly shareholders, bankers, financial institutions, customers, suppliers and business partners.

By order of the Board of Directors of HINDUSTAN ADHESIVES LIMITED