[In terms of Section 134 (3) and other applicable provisions of the Companies Act, 2013 (the “Act”)] To the Members,
Directors of your Company are pleased to present herewith their 13th Annual Report together with the Audited Financial Statements for the Financial Year 2023-24 and report of Auditors thereon.
Financial Summary:
Operational Results and State of Company's Affairs
During the Financial Year under review, Sales revenue of the Company decreased by 10.88% to Rs. 7024.70 Lakhs as compared to Rs. 7789.06 Lakhs in the Previous Financial Year. Total Expenses has been decreased to Rs. 5660.79 Lakhs as compared to Rs. 6236.14 Lakhs as compared to previous financial year.
Dividend:
The Board of Directors does not recommend any dividend for the year 2023-24. Since there was no unpaid/unclaimed Dividend declared and paid last year, the provisions of Section 125 of the Companies Act, 2013 do not apply. and no amount from current profit is proposed to be carried to general reserves.
Amount Transferred To Reserve
During the year under review, the Company has not transferred any amount to Free Reserve.
Initial Public Offer (IPO)
During the year under review, Company successfully completed its Initial Public Offer (IPO). Company has raised Rs. 4492.50 Lacs in its Initial Public Offering by issuance of 59,90,000 Equity Shares of Rs. 10/- each at premium of Rs. 65/- per share. The Equity Shares of the company is listed on EMERGE platform of National Stock Exchange (NSE) w.e.f. September 28, 2023.
Share Capital
The Authorized Share Capital of the Company is Rs. 25,00,00,000/-(Rupees Twenty Five Crores only) divided into 2,50,00,000 (Two Crore Fifty Lacs) equity shares of Rs. 10/- each.
The Issued, Subscribed and Paid Up Capital of the Company as on March 31, 2024 was Rs. 24,99,00,000/- (Rupees Twenty Four Crores Ninety Nine Lacs) divided into 2,49,90,000 Equity Shares of Rs. 10/- each.
Change in the nature of business of the Company:
There was no change in nature of the business of the Company during the year under report.
Details as to holding, subsidiary, associate, joint venture:
RNG Finlease Private Limited (RNG for brevity) is the Holding Company of your Company at the beginning and at the end of the financial year. While Shantol Recycling Private Limited is incorporated as a Wholly Owned Subsidiary Company of Hi-Green Carbon Limited on April 16, 2023.Other than this, Company does not have any subsidiary, associate or joint venture Company either at the beginning or end of the year under report and none of the Company has become or ceased to be holding, subsidiary, associate or joint venture Company of your Company.
Material changes and commitments, if any, affecting financial position:
There was no material change or commitment, in between balance sheet date and date of this Report, which may affect financial position of the Company except that as stated earlier the Company has been in the process of coming out with its maiden public offer.
Web Link of Annual Return:
Annual Return of the Company in Form MGT-7 once filed with RoC, the same shall be placed on the website of the Company at www.higreencarbon.com as required under section 92(3) of the Act.
Vigil Mechanism/Whistle Blower Policy
Pursuant to Section 177 of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements), 2015, the company has vigil mechanism in the form of Whistle Blower Policy for their Directors and employees to report genuine concerns or grievances to deal with instances of fraud or mismanagement.
Disclosure as to deposits covered under Section 73 or 76 of the Act:
Note: During the year under report Company has accepted unsecured loans only from Directors of the Company or their relatives or Inter Corporate Deposits which are disclosed in Note No. 6 to the Financial Statements as required by virtue of proviso to Rule 2 (1) (c) (viii) of the Companies (Acceptance of Deposits), Rules, 2014
Particulars of Loans, Guarantees or Investments under Section 186 of the Act:
The Company, during the year, has not granted any loan or provided any guarantee or security or made any investments covered u/s 186 of the Act other than M/s. Shantol Recycling Private Limit, a Wholly Owned Subsudiary Company of Hi-Green Carbon Limited, Details of Loans provided and innvestments made are given below:
Board Composition and changes among them:
During the year under review, there were no changes in the composition of Board of Directors. Board of Directors comprised following Directors at the end of the year under report:
Annual evaluation of Board's Performance
The evaluation framework for assessing the performance of the Directors of the Company comprises of contributions at the Meeting(s) and strategic perspective or inputs regarding the growth and performance of the Company, amongst others.
Pursuant to the provisions of the Companies Act, 2013 and rules made thereunder and as provided under Schedule IV of the Act and Listing Regulations, the Board has carried an annual performance evaluation of its own performance, all the committees of Board and the directors individually including Chairman & Managing Director and Independent Directors in accordance with the criteria of evaluation approved by Nomination & Remuneration Committee.
Outcome of Evaluation:
Board of the Company was satisfied with the functioning of the Board and its Committees. The Committees are functioning well and besides covering the Committees' terms of reference, as mandated by law, important issues are brought up and discussed in the Committee meetings. The Board was also satisfied with the contribution of Directors, in their individual capacities
Board Meetings and participation of directors at Board Meetings
Details of Board Meetings held during the FY 2022 - 23 and attendance of directors thereat are as under:
Attendance of Directors at Board Meetings
Number of Board meeting attended by Director:
All the said Board Meetings were convened and held and proceedings thereof were recorded and signed in compliance of applicable provisions of the Act and Secretarial Standards (SS 1).
Directors' Responsibility Statement:
In pursuance of the provisions of Section 134 (3) (c) and 134 (5) of the Act, the directors of your Company state that:
In preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any; 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 cash flow of the Company for that period; The directors had taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; The directors had prepared the annual accounts on a going concern basis; The Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. The directors have ensured compliance with provisions of all applicable laws.
Independent director's declaration:
The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the rules made thereunder and Listing Regulations.
Familiarisation program for independent directors:
The familiarisation program seeks to update the Directors on the roles, responsibilities, rights and duties under the Act and other statutes and about the overall functioning and performance of the Company.
Audit Committee:
In compliance with the provisions of section 177 of the Act and regulation 18 of the SEBI LODR Regulations, the Board has constituted an Audit Committee. The Statutory Auditors and Internal Auditors of the Company are regular invitees at the Audit Committee Meetings. The Audit Committee holds discussions with the Statutory Auditors on the ‘Limited Review” of the half yearly, the yearly Audit Plan, matters relating to compliance of Accounting Standards, their observations arising from the annual audit of the Company's accounts and other related matters.
The Audit Committee is presented with a summary of internal audit observations and follow up actions thereon. The terms of reference of Audit Committee includes the matters prescribed under Section 177 of the Companies Act, 2013 read with SEBI (LODR) Regulation, 2015.
The Company Secretary acts as the Secretary to the committee. The composition of the Audit Committee as at March 31, 2024:
During the year under review 3 (Three) Meetings of Audit Committee were held.
Stakeholders' Relationship Committee
Our Company has formed the Stakeholders Relationship Committee as per the applicable provisions of the Section 178 of the Companies Act, 2013 and Regulation 20 of SEBI Listing Regulation, 2015 vide Resolution dated May 22, 2023. As The constituted Stakeholders Relationship Committee comprises the following:
During the year under review, 1 (One) Meeting was held.
Nomination and remuneration committee and company's policy on directors' appointment and remuneration:
In compliance with the provisions of section 178 of the Act and regulation 19 of the SEBI Listing Regulations, the Board has constituted the Nomination and Remuneration Committee (“NRC”). The brief terms of reference of NRC as specified in clause A of Part D of Schedule II of the Listing Regulations inter alia contains: Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees.
Formulation of criteria for evaluation of performance of independent directors and the Board.
Devising a policy on Board diversity
Identifying persons who are qualified to become directors of the Company and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal.
Recommending the remuneration, in whatever form, payable to the senior management personnel.
Determining whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.
Perform such functions as are required to be performed by the NRC committee under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.
Performing such other activities as may be delegated by the Board and/or are statutorily prescribed under any law to be attended to by the Nomination and Remuneration Committee.
The composition of NRC as on March 31, 2024:
During the year under review, 2 (Two) Meetings of NRC were held.
Particulars of related party transaction referred to in Section 188 (1) of the Act:
The disclosures as to Related Party Transactions covered u/s 188 (1) of the Act are given in Form AOC-2 marked as ‘Annexure II'.
Statutory Auditors:
M/s. J C Ranpura & Co., (FRN 108647W), Chartered Accountants has been appointed as Statutory Auditors of the Company for the Term of Five Years starting from Annaul General Meeting held for Financial Year 2022-2023 till the conclusion of Financial Year 2027-28.
The Report of the Statutory Auditors has issued Audit Report with unmodified opinion on Standalone and Consolidated Financial Statements of the Company for the financial year ended on March 31, 2024. The notes on the Financial Statements referred to in the Audit Report are self-explantory and therefore, do not call for any further explanation or comments from the Board under Section 134 (3) (f) of the Companies Act, 2013.
Internal Auditors:
Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, Internal Audit of functions and Activities of the Company was taken by the M/s. P. N. Rangani & Associates, Rajkot (FRN: 155863W, Membership No. 602392).
Secretarial Auditor:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remunneration of Managerial Personnel) Rules, 2014, CS Piyush Jethva (ICSI Membership No. F6377}, a practice Company Secretary, Rajkot appointed to conduct Secreterial Audit of the Company for the Financial Year 2023-24.
Report of Secretarial Auditor in prescribed Form MR-3 annexed herewith as Annexure - III. The said Audit Report does not contain any adverse remarks or qualifications.
Explanations on qualifications/ adverse remarks contained in the audit report:
Remark 1: The Auditors stated in their Report that the Company has not provided for interest due and payable to suppliers falling under the Micro, Small and Medium Enterprise Development Act, 2006, which is contrary to the provisions of the said act.
In this regards, Board likes to state that the company informs all its suppliers to confirm their status about registered under Micro, Small and Medium Enterprise Dvelopment Act, 2006. However, the company has received confirmation from a few Suppliers only. Company usually settles the outstanding of MSME suppliers within 45 days only, except for those suppliers with whom agreed terms of payments are more than 45 days. Hence, no provision is made as to interest for delayed payment to MSME suppliers.
Secreterial Auditors:
Remark 1: The Company has not filed form MGT-14 related to filing of resolution for issue of securities pursuant to section 179 (3) of the Companies Act, 2013 and Form MSME, till the completion of financial year ended on 31.03.2024.
Due to oversite by the management, the Company has not filed form MGT-14 for the Resolution Passed for the issue of securities. While the company has submitted the said Form MGT-14. Remark 2: The Company has not given advance notice of Five days under regulation 29 of SEBI (LODR) Regulations, 2015 for one Board meeting held on 04th November 2023, in which there was an agenda of financial result
As this was the first half-year results of the company after Listing, We have by mistake considered both the days i.e. Date of Intimation and Date of Meeting while calculating the Five days advance notice. We have already paid the penal amount as directed by the Exchange.
Remark 3: The Financial result for the half-year need on 30th September 2023 was filed on 15th April 2024 due to some glitches problem in a filing.
As stated by the Secreterial Auditors, there were some technical glitch in the XBRL utilities for submitting Half Yearly Results to the Exchange. We have made communication with the Exchange officals regarding the error and as guided by the Exchange we have filed the full Results on April 15, 2024 for Half Year ended on September 30, 2023.
Details in respect of fraud reported by Auditor u/s 143 (12) of the Act:
No fraud was noticed by the Auditors under Section 143(12) of the Companies Act, 2013.
Except the market risk involved in every business, the Board of Directors does not foresee any inherent or foreseeable external risk involved in business of the Company which may threaten the existence of the Company.
The Risk Management Policy of the Company consists of identifying those market risks which includes availability and pricing of raw materials, competitors in the markets, fluctuation in forex rates, technological changes and upgradation etc. and remedial actions to overcome those risk factors. In the opinion of the Board, the risk management policy of the Company has been working effectively.
Internal Controls including internal financial control:
The Directors wish to state that the Company is having adequate internal control and internal financial control system that commensurate with the size and nature of business.
Almost all financial and other operational activities are under the direct supervision of the Directors leaving no scope for any manipulation, fraud or other irregularities. The Board reviews the internal control policy of the Company and in the opinion of the Board, the internal control and internal financial control policy of the Company have been operating effectively leaving no scope for any operational or financial irregularities including fraud.
Conservation of energy, technology absorption, foreign exchange earnings and outgo: Conservation of Energy:
Technology absorption:
Particulars of employee:
In terms of the provisions of Section 134, 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the details of the employees drawing remuneration in excess of the limits set out in the said rules and relevant disclosures pertaining to the remuneration and the other details are provided in the “Annexure-I” forming part of the Annual Report.
Management Discussion & Analysis Report
The Management Discussion & Analysis Report is attached as Annexure IV and forms a part of this report.
Cost accounting records under section 148 of the Act:
Since company has crossed the turnover of Rs. 35 Crore during previous financial year and products of the company fall under the products specified by the central government for which maintenance of cost records under section 148 of the Act read with rules framed thereunder are mandatory. Company is in the process of maintaining cost records as mandated u/s 148 of the Act.
Policy on Corporate Social Responsibility (CSR):
In accordance with the provisions of Section 135 of the Act, Company required to frame a Corporate Social Responsibility Policy indicating the activities to be taken by the company as specified in Schedule VII to the Act, to recommend the amount of expenditure to be incurred on such acitivies, action plan, and to monitor the Corporate Social Responsibilty Policy of the Company from time to time.
Details of Corporate Social Responsibility is given under the separe section as Annexure V and form part of this report.
Details of significant and material orders passed by the regulators or courts or tribunals:
No order was passed by any Regulator or Court or Tribunal, during the year 2022 23, which may impact on going concern status and Company's operations in future.
Prevention Of Insider Trading
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The said code of conduct is in line with SEBI (Prohibition of Insider Trading)
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The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.
Other Statutory Disclosure:
(a) Equity Shares with Differential Rights: Since your Company has not issued Equity Shares with Differential Rights, no disclosure under Rule 4 (4) of the Companies (Share Capital and Debenture) Rules, 2014, are required to be made in this report.
(b)Sweat Equity Shares: Since your Company has not issued Sweat Equity Shares, no disclosure under Rule 8 (13) of the Companies (Share Capital and Debenture) Rules, 2014 are required to be made in this report.
(c) Employee Stock Option/Purchase Scheme: Since your Company does not have any Employee Stock Option/Purchase Scheme and has not issued any shares under any such scheme, no disclosure under Rule 12 (9) of the Companies (Share Capital and Debenture) Rules, 2014 are required to be made in this report.
(d)Disclosure under Rule 16 (4) of the Companies (Share Capital and Debenture), Rules, 2014: Since your Company has not provided for any money or has given any financial assistance to the employees for purchase of shares of your Company, no disclosure under the said Rule is required to be made in this report.
(e)Buy back of securities: Since the Company has not bought back any shares during the year, no disclosure relating to buy back required to be made in this report.
(f) Loan for purchase of own shares: Company has not provided any loan for the purchase of its own shares in violation of section 67 of the Act.
(g)Disclosure under Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013: The Company has not received any complaint nor has come across any event requiring disclosure under the said Act. Your Company is fully committed to uphold and maintain the dignity of every women working at the Company or visiting the Company.
(h) Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016: During the year under report, no application or any other proceedings under the IBC, 2016 is made by or against the Company, no such proceedings is pending at the end of the FY 2022-23.
(i) Revision in Financial Statements or Directors report: Company has not initiated any process under section 131 of the Act for revision in financial statements or Board's Report. (j) Directors' Remuneration: Remuneration paid to Directors is disclosed in Note No. 30 to Audited Financial Statements.
Your Directors take this opportunity to place on record their appreciation and sincere gratitude to the Bankers to the Company for their valuable support and look forward to their continued co-operation in the years to come. Your Directors acknowledge the support and co-operation received from the employees and all those who have helped in the day to day management. The Board would be failing in its duty without acknowledging the cooperation received from various government, semi government and local authorities. The Board expects continuous patronage from all its stakeholders.
By the order of Board of Directors For, Hi-Green Carbon Limited
Shaileshkumar V. Makadia
Non-Executive Chairman DIN: 00593049