Your Directors have pleasure in placing before you the Seventy-eighth Annual Report of the Company together with its Audited Financial Statements for the year ended March 31, 2024 and Management Discussion and Analysis.
1. FINANCIAL RESULTS AND APPROPRIATIONS:
In view of accumulated loss no dividend is being recommended.
2. OPERATIONS:
The Company has registered a turnover of Rs 541.25 lakhs this year as against Rs 390.88 lakhs during the previous year. There is increase of 38.47 % in the revenue from operations of the Company. The increase in revenue is mainly due to increase in income from investment activities.
The Total Income for the year ended March 31, 2024 was at Rs 584.72 lakhs as compared to Rs 409.68 lakhs in the previous year. Profit before tax for the current year stood at Rs 301.85 lakhs as against Rs 130.52 lakhs during the previous year.
3. MANAGEMENT DISCUSSION AND ANALYSIS:
The Indian economy maintained a steady momentum within the uneven global macro-economic landscape, supported by public spending on infrastructure and digitalisation, as well as reforms directed towards ease of doing business and incentivising new investment. In financial year 20232024, the Indian GDP has grown at about 8%, which is higher than the global benchmark.
The global economy is anticipated to strengthen in 2025 as uncertainties diminish and India has emerged as the fastest-growing economy in the world and is expected to be one of the top three economic powers over the next decade, backed by its robust democracy and strong partnerships.
The Company's business activity currently consists of Industrial Chemicals, Investments and Leasing. During the year under review, revenue from industrial chemicals segment was Rs 74.38 lakhs compared to Rs 69.97 lakhs in the previous year, revenue from investment activity was Rs 251.33 lakhs in comparison to Rs 121.35 lakhs in the previous year, while leasing activity yielded a revenue of Rs 215.54 lakhs as compared to Rs 199.56 lakhs in the previous year.
The Company has in place internal financial control systems, commensurate with its size and the nature of its operations to ensure proper recording of financial and operational transactions / information and compliance of various internal controls and other regulatory and statutory compliances. The internal auditors monitor and evaluate the efficacy and adequacy of internal control systems in the Company. The observations arising out of the internal audits are periodically reviewed at appropriate level and summaries along with corrective actions plans, if any, are submitted to the management and Audit Committee for review, comments and directions. The concerned persons undertake corrective action in their respective areas and thereby strengthen the controls.
The Company has entered into transaction(s) with a entity belonging to the promoter / promoter group who hold 10% or more shareholding in the Company details of which appear in note no. 27.05 of the Financial Statements of the Company.
Information pertaining to financial performance forms part of this Report.
There were no material developments in the Company's Human Resource Capital.
RATIOS
Key Financial Ratios
1. Return on Net Worth increased to 6.10% during the current year in comparison to 3.71% in the previous year mainly due to incresae in income from investment activities, during the current year.
2. Operating Profit Margin (OPM) is 51.62% during the current year in comparison to 31.86% in previous year. The increase in OPM in the current year is mainly due to increase in operating income.
For other key financial ratios please refer note no. 27.15 of the Financial Statements of the Company.
4. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
a) At the 77th Annual General Meeting (AGM) of the Company held on 30.9.2023 Mr Piyushkumar Mehta (DIN: 08772311) was re-appointed as a director of the Company.
b) Mr Banwari Lal Jatia (DIN: 00016823) was re-appointed as Managing Director for a period of 3 years w.e.f. 1.4.2023. However, in accordance with the provisions of Section 152(6) of the Companies Act, 2013 (the Act) Mr Banwari Lal Jatia retires by rotation at the ensuing AGM of the Company and being eligible offers himself for re-appointment. If re-appointed his appointment shall continue to be subject to terms and conditions of his earlier appointment being effective from 1.4.2023 as approved by the members at their AGM held on 30.9.2022.
c) Requisite declarations have been received from the independent directors of the Company under Section 149(7) of the Act regarding meeting the criteria of independence laid down in Section 149 (6) of the Act and also under Listing Regulations.
d) Board Evaluation:
Pursuant to provisions of the Act and the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 (Listing Regulations) the Board has carried out an annual performance evaluation of its own performance, of the Directors individually, as well as the evaluation of working of its Audit, Nomination and Remuneration and other Committees of the Board. The performance of Non-Independent Directors and the Board as a whole was carried out by the Independent Directors at their separate meeting. Evaluation of performance of Independent Directors was carried out by the entire Board of Directors, excluding the director being evaluated. The directors expressed satisfaction with the evaluation process and the results thereof.
In the opinion of the Board, all the independent directors possess requisite expertise, integrity and experience.
e) Meetings:
During the year Five (5) board meetings were convened and held.
5. AUDIT COMMITTEE:
The present composition of the Audit Committee of the Company is as under:
1. Ms Pranjali Mangal Bhandari - Chairperson
2. Mr Vimal Chand Kothari
3. Mr Sunil Kantilal Trivedi
4. Mr Banwari Lal Jatia
The Board of Directors of the Company has accepted all recommendations of its Audit Committee during Financial Year 2023 - 2024. The Company has in place a vigil mechanism for directors and employees, to report genuine concerns about any wrongful act and any unethical conduct with respect to the Company or its business affairs to the Audit Committee which oversees functioning of the said mechanism.
6. NOMINATION AND REMUNERATION COMMITTEE (NRC):
The NRC comprises of three members of which two including the Chairperson are Independent Directors.
Salient features of the Nomination and Remuneration policy include, having an appropriate mix of executive, non - executive and independent directors primarily to maintain independence. NRC assesses independence of directors at time of appointment / re-appointment as well as annually. NRC takes into consideration various factors as specified in the policy while considering any remuneration to be paid to directors, key managerial personnel and other employees, etc.
The Policy is available on the Company's website www.hawcoindia.in under the section 'Policies'.
7. RISK MANAGEMENT:
In the Boards' perception, there are no foreseeable risks which could threaten the existence of the Company.
8. UNCLAIMED SHARE CERTIFICATES:
The Company had in accordance with the Listing Regulations transferred on 27.5.2016 & 14.9.2021 to a separate Unclaimed Shares Suspense Demat Account in the Company's name in aggregate 10,104 unclaimed shares of the Company belonging to 79 shareholders, who had failed to exchange their old certificates for new certificates in the Company even after many reminders by the Company. The said shares were allotted to members pursuant to a Scheme of Arrangement between the Company and Vesna Agencies Pvt Ltd (Hawcoplast Chemicals Ltd).
During the year no request/claim was received for transfer of shares from the said Unclaimed Shares Suspense Demat Account.
At end of the year, the number of shareholders and the outstanding shares lying in the suspense account were 77 and 9,624 respectively.
The voting rights on these unclaimed shares shall remain frozen till the rightful owner(s) claim(s) the shares.
Members who have not yet claimed their shares can still do so through the Company's Registrars and Share Transfer Agent viz. Link Intime India Private Limited (RTA).
9. AUDITORS:
The members had at the 73rd AGM of the Company held on 30th September 2019, re-appointed M/s GMJ & Co., Chartered Accountants (Firm Registration No: 103429W) as the Statutory Auditors of the Company under Section 139 of the Act, for second term of 5 years, from conclusion of 73rd AGM till conclusion of 78th AGM of the Company. The term of re-appointment of M/s GMJ & Co. shall come to end and they will retire from the conclusion of the forthcoming AGM.
In accordance with Section 139 of the Act, M/s Desai Saksena & Associates, Chartered Accountants (FRN: 102358W) are proposed to be appointed as Statutory Auditors of the Company for a period of
5 years commencing from the conclusion of the ensuing 78th AGM till the conclusion of the 83rd AGM of the Company to be held in the year 2029.
M/s Desai Saksena & Associates have provided their consent to act as Statutory Auditors of the Company and have confirmed that their appointment, if made, will be in accordance with Section 139 read with Section 141 of the Act and the applicable rules made thereunder. A brief profile of M/s Desai Saksena & Associates appears in explanatory statements annexed to the Notice of AGM.
Members are requested to appoint M/s Desai Saksena & Associates as Statutory Auditors of the Company for a period of 5 years and authorize the Board of Directors to fix their remuneration.
Also the Board places on record its appreciation for the service rendered by M/s GMJ & Co., Chartered Accountants, during their association with the Company.
10. AUDITORS' REPORT:
The Auditors' Report does not contain any reservation, qualification or adverse remark.
11. SECRETARIAL AUDIT:
A Secretarial Audit Report for the financial year ended 31st March, 2024 is annexed hereto as 'Annexure I'.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
12. LOANS, GUARANTEES OR INVESTMENTS:
Details of investments, loans appear in notes to the financial statements. No guarantee or security was provided by the Company on behalf of others during the year.
13. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:
All contracts / arrangements / transactions entered into by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis.
The Company has made few material related party transactions during the year after obtaining appropriate approvals. During the year, the Company did not enter into any materially significant related party transactions that may have potential conflict with the interest of the Company.
In terms of Section 134 details of the same are stated in Form AOC-2 annexed hereto as 'Annexure II'.
14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Since the Company is not into any manufacturing activity there are no particulars to be specified under the heading 'conservation of energy'. There is no technology involved in the business being carried on by the Company. The Company did not earn nor spent any foreign exchange during the year.
15. CORPORATE SOCIAL REPONSIBILITY (CSR):
None of the three criteria specified in Section 135(1) of the Act relating to CSR is applicable to the Company.
16. SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANIES:
The Company does not have any subsidiary, joint venture or associate.
17. PARTICULARS OF EMPLOYEES:
a. Required particulars of employees under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as 'Annexure IN' to this report.
b. There are no employees covered by Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
18. ANNUAL RETURN:
The annual return of the Company for the year ended 31st March, 2024 in the prescribed format is available on the website of the Company at www.hawcoindia.in under the section 'Disclosures'.
19. CORPORATE GOVERNANCE:
A report on Corporate Governance as stipulated under Schedule V of the Listing Regulations has been attached to this Annual Report.
A certificate from Mr Shailesh Kachalia, a practicing Company Secretary, regarding compliance with conditions of Corporate Governance as stipulated in the Listing Regulations is annexed to this Report as 'Annexure IV'.
20. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to provisions of Section 134(3)(c) read with Section 134(5) of the Act, your directors state that:
(a) In preparation of the annual accounts, applicable accounting standards have been followed alongwith proper explanations relating to material departures;
(b) Accounting policies have been selected and applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at end of the financial year and of its profit for the year;
(c) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with provisions of the Act for safeguarding assets of the Company and for preventing and detecting frauds and other irregularities;
(d) The annual accounts have been prepared on a going concern basis;
(e) Internal financial controls to be followed by the Company have been laid down and such internal financial controls are adequate and operating effectively; and
(f) Proper systems have been devised to ensure compliance with provisions of all applicable laws and such systems are adequate and operating effectively.
21. MAINTENANCE OF COST RECORDS:
The Government of India has not prescribed maintenance of cost records under sub-section (1) of Section 148 of the Act for any activities of the Company, thus the Company is not required to maintain cost records.
22. SECRETARIAL STANDARDS OF ICSI:
The Company is in compliance with the Secretarial Standards on Meetings of Board of Directors (SS - 1) and General Meetings (SS - 2) issued by The Institute of Company Secretaries of India.
23. GENERAL:
Your directors state that no disclosure or reporting is required for the following as there were no transactions of the types covered thereby, during the year;
i. Details relating to Deposits covered under Chapter V of the Act;
ii. Issue of equity shares with differential rights as to dividend, voting or otherwise;
iii. Issue of shares (including sweat equity shares) to employees of the Company under any scheme;
iv. No significant or material orders were passed by Regulators or Courts or Tribunals which impact the Company's going concern status and operations in the future;
v. No material changes and commitments have occurred after close of the year till the date of this report, which might affect the financial position of the Company;
vi. No fraud is reported by auditors under Section 143(12) of the Act;
vii. There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016; and
viii. There was no instance of one-time settlement with any Bank or Financial Institution.
Your directors further state that, 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 complaints filed under the said Act.
24. ACKNOWLEDGEMENTS:
The Board sincerely thanks all stakeholders for their continued support.