Dear Members,
Your directors are pleased to present the 31st Annual Report together with the Audited
Financial Statements for the Financial Year ended March 31, 2022.
FINANCIAL HIGHLIGHTS
|
|
(Rs. in Lakhs, except EPS) |
|
Consolidated |
Standalone |
pAr IICULArS |
2021-22 |
2020-21* |
2021-22 |
2020-21* |
Revenue from Operations |
65,221.82 |
48,448.93 |
50,848.93 |
42,071.11 |
Other Income |
803.56 |
393.32 |
1,386.31 |
1,200.33 |
Total Income |
66,025.38 |
48,842.35 |
52,235.24 |
43,271.44 |
Profit before Finance Costs, Depreciation, Exceptional Items, Extraordinary Items and
Tax |
11,776.38 |
9,558.77 |
10,137.19 |
8,929.07 |
Less: Finance Costs |
1,311.10 |
973.70 |
1,131.16 |
943.35 |
Profit before Depreciation, Exceptional Items, Extraordinary Items and Tax |
10,465.28 |
8,585.07 |
9,006.03 |
7,985.72 |
Less: Depreciation/Amortisation/Impairment |
1,122.58 |
860.99 |
909.18 |
836.55 |
Profit before Exceptional Items, Extraordinary Items and Tax |
9,342.70 |
7,724.08 |
8,096.85 |
7,149.17 |
Less: Exceptional Items and Extraordinary Items |
911.42 |
- |
- |
- |
Profit before Tax |
8,431.28 |
7,724.08 |
8,096.85 |
7,149.17 |
Less: Current Tax, net of earlier year adjustments |
2,568.77 |
2,396.05 |
1,883.82 |
1,926.53 |
Less: Deferred Tax |
39.17 |
(9.07) |
36.55 |
(12.09) |
Profit after Tax for the financial year (A) |
5,823.34 |
5,337.10 |
6,176.48 |
5,234.73 |
Profit for the financial year from Continuing Operations |
6,067.10 |
5,113.99 |
6,420.24 |
5,011.62 |
Profit for the financial year from Discontinuing Operations |
(243.76) |
223.11 |
(243.76) |
223.11 |
Profit for the financial year (A) |
5,823.34 |
5,337.10 |
6,176.48 |
5,234.73 |
Total Other Comprehensive Income/Loss (B) |
131.80 |
(39.54) |
38.60 |
(39.54) |
Total Comprehensive Income for the financial year (A+B) |
5,955.14 |
5,297.56 |
6,215.08 |
5,195.19 |
Earnings Per Share (EPS in Rupees) |
|
|
|
|
From Continuing Operations |
|
|
|
|
Basic |
44.44 |
39.41 |
47.02 |
38.63 |
Diluted |
44.44 |
39.41 |
47.02 |
38.63 |
From Discontinuing Operations |
|
|
|
|
Basic |
(1.79) |
1.72 |
(1.79) |
1.72 |
Diluted |
(1.79) |
1.72 |
(1.79) |
1.72 |
*Previous year's figures are restated, regrouped, rearranged and recast, wherever
considered necessary.
BUSINESS OVERVIEW
The overall economic scenario during the financial year 2021-22 was robust. The Indian
Engineering Sector has witnessed an encouraging growth over the last few years driven by
increased investments in infrastructure and industrial capacities. The growth of the
Engineering Sector is an important barometer of the country's economic progress, and the
trends appear to be positive. The key end users of the Company's products viz. the
Agrochemical, Specialty Chemical, Dyes, Pigment and the Active Pharmaceutical Ingredient
manufacturers are witnessing an unprecedented increase in their long-term demand and this
portends well for your Company's prospects. Your Company achieved an enhanced standalone
sales turnover of Rs. 50,848.93 lakhs as against Rs. 42,071.11 lakhs during the previous
year (growth of 20.86%), with EBITDA of Rs. 9,006.03 lakhs as against Rs. 7,985.72 lakhs
during the previous year and Net Profit After Tax of Rs. 6,176.48 lakhs as against Rs.
5,234.73 lakhs during the previous year (growth of 17.99%). With regard to the
Consolidated financial performance, your Company achieved an enhanced consolidated sales
turnover of
Rs. 65,221.82 lakhs as against Rs. 48,448.93 lakhs during the previous year (growth of
34.62%), with EBITDA of Rs. 10,465.28 lakhs as against Rs. 8,585.07 lakhs during the
previous year and Net Profit After Tax of Rs. 5,823.34 lakhs as against Rs. 5,337.10 lakhs
during the previous year (growth of 9.11%). 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.
The continued improvement in the economic outlook for the Active Pharmaceutical
Ingredients and the Chemicals sector, the key customer segments for your Company, also
enhances the optimism for the coming years.
DISCLOSURES RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
Thaletec, GmbH and Thaletec Inc., USA
During FY 2021-22, your Company had entered into a Share Purchase Agreement with the
erstwhile promoters for acquisition of their entire 100% shareholding in THALETEC GmbH on
a fully diluted basis.
Further, on December 17, 2021, the Company completed the acquisition of 100%
shareholding of Thaletec, in line with the Share Purchase Agreement executed earlier.
Thaletec has a wholly owned subsidiary, Thaletec Inc., USA, The acquisition of 100%
shareholding of Thaletec has been completed for an aggregate consideration of Euro 12
Million, which has been fully remitted.
Thaletec GmBH's management has converted the financial information from accounting
principles generally accepted in their respective country to accounting principles
generally accepted in India, whose financial results and Group's share reflect total
assets of Rs. 16,582.63 lakhs as at and total revenue of Rs. 7,592.07 lakhs, total net
profit after tax of Rs. 604.76 lakhs and total comprehensive income of Rs. 697.96 lakhs
for the period from December 17, 2021 to March 31, 2022, as considered in the Consolidated
Audited Financial Statements. For Thaletec USA, a step-down subsidiary, financial results
and Group's share reflect total assets of Rs. 623.54 lakhs, total revenue of Rs. 42.11
lakhs, of total net profit after tax and total comprehensive income of Rs. 3.86 lakhs for
the period from December 17, 2021 to March 31, 2022, as considered in the Consolidated
Audited Financial Statements.
H L Equipments ("HLEQ" or "the Firm")
H L Equipments is a Partnership Firm, in which your Company owns 99% ownership
interest. HLEQ's manufacturing facility is located at Silvassa and is equipped with all
key equipment critical for the chemical equipment fabrication.
The Firm achieved a sales turnover of Rs. 86.33 crores (previous year Rs. 77.94 crores)
for the year ended March 31, 2022 and earned EBITDA of Rs. 12.38 crores (previous year Rs.
14.50 crores) for the same period. Considering the new greenfield plant being implemented
by your Company in Silvassa, it is intended that the Firm will gradually scale down its
operations and the manufacturing operations will be relocated to the new plant, which has
a considerably higher capacity and potential for future growth.
DIVIDEND
Your Directors are pleased to recommend a Dividend of Rs. 5 (@50%) per equity share of
face value of Rs. 10/- each for the financial year ended March 31, 2022. The Dividend,
subject to the approval of Members at the 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 and paid dividend of Rs. 0.95 per 9.50%
non-convertible, cumulative, redeemable preference share for the year 2021-22.
TRANSFER TO RESERVES
The Board of Directors of your Company has decided to transfer Rs. 2,000 lakhs to
General Reserve for the year under review.
SHARE CAPITAL
Your Company's paid-up Share Capital as on March 31, 2022 was Rs. 14.78 crores,
comprising of 1,36,53,096 equity shares of Rs. 10 each, fully paid up and 18,75,152, 9.50%
non-convertible, cumulative, redeemable preference shares (NCCRPS) having paid-up value of
Rs. 6 per share (Rs. 4 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 out of the profits of the Company in accordance
with Section 55 of the Companies Act, 2013.
Your Company had approved in Board Meeting dated May 5, 2021 conversion of 385,161
Series A Warrants into 3,85,161 Equity Shares of Rs. 10 each at a premium of Rs. 1,375 per
equity share fully paid up which shall rank pari-passu with existing equity shares of the
Company, as per the terms approved by the Shareholders in the Extraordinary General
Meeting dated December 1, 2020.
Further, your Company had also approved in the Board Meeting dated September 23, 2021
conversion of 1,92,455 Series B Warrants into 192,455 Equity Shares of Rs. 10 each at a
premium of Rs. 1,375 per equity share fully paid up which shall rank pari-passu with
existing equity shares of the Company, as per the terms approved by the Shareholders in
the Extra-ordinary General Meeting dated December 1, 2020.
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
("Act") read with Rule 4(4) of the Companies (Share Capital and Debenture)
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 Act read
with Rule 8(13) of the Companies (Share Capital and Debenture) 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 Act read with Rule 12(9) of the Companies (Share Capital and
Debenture) 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 Act 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 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 Act read with Chapter V of the Act and the
Companies (Acceptance of Deposits) Rules, 2014, during the financial year 2021-22, 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 (formerly
Investment Information and Credit Rating Agency of India Limited) has continued its
ratings with regards to the banking facilities enjoyed by your Company from its Bankers as
"A" (for long term facilities) and A2+ (for shortterm 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/2021/08/522215_INTIMATION-
OF-CRA-RATINGS-REG.-30__16.08.21.pdf.
PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS IN SECURITIES
The particulars of loans, guarantees, investments and securities provided during the
financial year under review, covered under the provisions of Section 186 of the Act have
been provided in the notes no. 28(c) to the Financial Statements. Your Company has
complied with the provisions of Sections 185 and 186 of the Act to the extent applicable,
with respect to the loans and investments made.
INVESTOR EDUCATION AND PROTECTION
During the financial year 2021-22 and in accordance with the provisions of Sections 124
and 125 of the Companies Act, 2013 and the Rules made there under:
Dividend amounting to Rs. 5.43 lakhs pertaining to the financial year 2013-14,
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. 5.33 lakhs have been transferred to the IEPF Authority towards the final
equity dividend declared for financial year 2020-21 at the Annual General Meeting held on
September 7, 2021, for the 1,38,430 equity shares held by the IEPF Authority.
8,200 equity shares of Rs. 10 each have been transferred to the IEPF Authority
after compliance of due procedures as prescribed and 2100 shares have been claimed by the
Shareholders 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 : CS Achal S Thakkar
Designation : Company Secretary & 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
RELATED PARTY TRANSACTIONS
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/POLICY-FOR-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 were in
compliance with Section 188 of the Act and the Rules made thereunder and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015. The details of the same are
provided in Form AOC-2 annexed hereto as Annexure-I, which forms part of this
Report.
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 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 Act 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 form
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 Act and Rule 5(2) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are annexed hereto in Annexure-IV and
form 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 and hence the
particulars required to be disclosed under Section 134 of the Act 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, not less than two percent of the equity shares of the
Company.
ANNUAL RETURN
The Annual Return for the financial year 2021-22 has been uploaded on the Company's
website: https://hleglascoat. com/corporate-governance/ in accordance with the provisions
of Section 134 of the Act.
BUSINESS RESPONSIBILITY REPORT [BRR]
Pursuant to the provisions of Regulation 34(2) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("Listing Regulations") read with
SEBI Circular No. CIR/CFD/CMD/10/2015 dated November 4, 2015, the Business Responsibility
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 ("Listing
Regulations"), 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 Listing Regulations, issued by Mr. D. G.
Bhimani (C P 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
Pursuant to Regulation 34(3) read with Schedule V(B) of the Listing Regulations, 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 17 and 21 of SEBI Listing Regulations and
Sections 134 and 177 of the Companies Act,2013 ("the Act") and other applicable
provisions, if any, of the SEBI Listing Regulations and the Act, 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 i.e. https://hleglascoat.com/wp-content/
uploads/2021/09/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 Risk Management Committee, having the following members:
a. Mr. Aalap Patel |
- Chairperson (Executive Director-Technical) |
b. Mr. Sandip Randery |
- Member (Independent Director) |
c. Mr. Yatish Parekh |
- Member (Independent Director) |
The main objective of this Policy is to ensure sustainable business growth with
stability and to promote a pro-active 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 section.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(C) read with 134(5) of the Act, your
Directors confirm that:
(a) the applicable accounting standards have been followed along with proper
explanation relating to material departures, if any, in the preparation of the annual
accounts;
(b) appropriate accounting policies have been selected and applied consistently and
judgments and estimates have been made 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) proper and sufficient care has been taken 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 annual accounts have been prepared on a going concern basis;
(e) proper internal financial controls have been laid down and followed by the Company
and that such internal financial controls are adequate and were operating effectively; and
(f) proper systems to ensure compliance with the provisions of all the applicable laws
have been devised and that such systems were adequate and are working effectively.
DIRECTORS AND KEY MANAGERIAL PERSONS
The Directors of your Company are well experienced with expertise in their respective
fields of technical, finance, 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 Act. During the period under review, no Non-Executive Director of
your Company had any pecuniary relationship or transactions with the Company except as
stated elsewhere in this Report and in the notes to the accounts.
Mr. Nilesh Patel (DIN 00141873), Non-Executive Director, is retiring by rotation and
being eligible, has offered himself for re-appointment at the ensuing Annual General
Meeting. The brief profile of Mr. Nilesh Patel has been given in the Notice convening the
Annual General Meeting.
The term of Mr. Himanshu Patel (DIN 00202312), Managing Director, shall expire on
December 30, 2022 and hence, the Board recommends his re-appointment as a Managing
Director of the Company for a further period of three years with effect from December 31,
2022 at the ensuing Annual General Meeting. The term of Mr. Aalap Patel (DIN 06858672),
Executive Director, shall expire on December 30, 2022 and hence, the Board recommends his
re-appointment as an Executive Director of the Company for a further period of three years
with effect from December 31, 2022 at the ensuing Annual General Meeting. The Board also
recommends appointment of Mr. Harsh Patel (DIN 00141863) as a Whole-Time Director of the
Company for a period of three years with effect from October 1, 2022 at the ensuing Annual
General Meeting. The brief profile of Mr. Himanshu Patel, Mr. Aalap Patel and Mr. Harsh
Patel have been given in the Notice convening the Annual General Meeting.
Further, the Board of Directors of the Company, at its meeting held on May 23, 2022 had
approved Notice of Postal Ballot seeking approval of the shareholders by way of an Special
Resolutions for re-appointment of Mr. Yatish Parekh (DIN: 00168488) and Mr. Sandeep
Randery (DIN 07663581) as Independent Directors of the Company for a period of five (5)
years.
The day-to-day operations of your Company are managed by its Key Managerial Persons
("KMPs). The details of the Key Managerial Persons ("KMP") and the change
in KMP during the year and upto the date of this report are : Mr. Himanshu Patel (DIN
00202312), Managing Director, Mr. Aalap Patel (DIN 06858672), Executive Director
(Technical), Mr. K. V. Unnikrishnan, Chief Financial Officer of the Company (upto March
31,2022), Mr. Naveen Kandpal, Chief Financial Officer of the Company (w.e.f March 1,2022)
and Ms. Dhwani Shah, Company Secretary
(upto January 31, 2022), Mr. Achal Thakkar, Company Secretary (w.e.f May 10, 2022).
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
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 provisions for holding Board Meetings and the gap
between any two meetings did not exceed 120 days. Six (06) Meetings of the Board of
Directors of the Company were held during the year under review on June 12, 2021, August
14, 2021, September 17, 2021, November 13, 2021, December 15, 2021 and February 11, 2022.
CONFIRMATION BY INDEPENDENT DIRECTORS
The Independent Directors have confirmed their independence as prescribed under Section
149(6) of the Companies Act, 2013 and Regulation 16(b) of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015. They also confirmed compliance of Rule
6(1) and 6(2) of Companies (Appointment and Qualification of Directors) Rules, 2014.
Further, the Board is of the opinion that the Independent Directors of the Company
possess requisite qualifications, experience and expertise and they hold highest standards
of integrity.
PERFORMANCE EVALUATION OF THE DIRECTORS
During the financial year 2021-22, 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 11, 2022, has carried out the evaluation
task of the Committees formed by the Board and the Independent Directors individually for
the period from January 1, 2021 to December 31, 2021. In accordance with the provisions of
the Section 149 of the Act 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 11, 2022,
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, 2021 to December 31, 2021. The various criteria considered
for 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 11,
2022, reviewed the performance of the Executive Directors of the Company with special
attention to the leadership criteria for the Managing Director and the Executive Director
for the period from January 1, 2021 to December 31, 2021. 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 and Executive 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 Act, 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 Corporate Social
Responsibility section.
The CSR activities as required to be undertaken under Section 135 of the Act 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 2021-22, 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 Act and the Rules thereunder and Regulation 22 of the SEBI
Listing Regulations 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 behaviour, 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 2021-22, 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 Officers are available on the Company's website:
https://hleglascoat.com/wp-content/uploads/2021/04/ WHISTLE-BLOWER.pdf
DIVIDEND DISTRIBUTION POLICY
As per the recent amendment in the SEBI Listing Regulations, the Dividend Distribution
Policy has been made applicable to Top 1000 companies as per Market Capitalization as on
March 31, 2021. Accordingly, the Board of Directors of the Company at its Meeting held on
June 12, 2021 has adopted "Dividend Distribution Policy" effective from 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 Act, 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 26th Annual General Meeting to hold the office from
conclusion of 26th Annual General Meeting to conclusion of 31st 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, 2022, forms part of the
Annual Report. There is no qualification, reservation or adverse remark or any disclaimer
in their Report.
The term of existing Statutory Auditors M/s. M.M. Nissim & Co. LLP, Chartered
Accountants (Firm Registration No.107122W/W100672) of the Company will expire on
conclusion of the ensuing 31st Annual General Meeting and it is recommended to the
shareholders to re-appoint the said statutory auditors for a second term of five years to
hold office from the conclusion of the 31s Annual General Meeting until the
conclusion of the 36th Annual General Meeting of the Company. The Company has received
consent and non-disqualification certificate from M/s. M. M. Nissim & Co. LLP, for the
said appointment.
REPORTING OF FRAUDS
There have been no frauds reported under sub-section (12) of Section 143 of the Act,
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 (C P No. 6628) as the Secretarial Auditors for the financial year 2021-22 in
accordance with Section 204 of the Act. The Report on Secretarial Audit issued by the
Secretarial Auditors for the financial year 2021-22, 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 in their Report.
In terms of Section 204 of the Act, on the recommendation of the Audit Committee, the
Board has appointed M/s. D. G. Bhimani and Associates, Practicing Company Secretaries (C P
No. 6628), as the Secretarial Auditors for the financial year 2022-23. The Company has
received the consent from M/s. D. G. Bhimani and Associates for the said appointment.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETING
The Directors of your Company confirm that the applicable Secretarial Standards
prescribed for the Board and General Meetings by the Institute of Company Secretaries of
India and notified by the Central Government have been complied with during the financial
year under review.
INTERNAL AUDITORS
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
2021-22 and M/s. AKMK Associates, Chartered Accountants (Firm Registration No.: 136206W)
had conducted the internal audit of your Company for the Maroli works for the financial
year 2021-22.
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 CNK
& Associates LLP, Chartered Accountants (Firm Registration No. 101961W) and AKMK
Associates, Chartered Accountants (Firm Registration No.: 136206W) as the Internal
Auditors, for the Anand works and the Maroli Works respectively for the financial year
2022-23.
The Company has received the consent from the respective firms for their appointment.
COST RECORDS AND AUDIT
Pursuant to Section 148 of the Act 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 2021-22 of the said records was carried
out by M/s. Nanty Shah & Associates, Cost Accountants (Membership No. 31497), the Cost
Auditor 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 2022-23. The Company has received the consent from
them for their 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 2022-23 as per details provided in the Notice of the ensuing
Annual General Meeting.
LISTING REGULATIONS COMPLIANCE/LISTING PERMITTED TO TRADE ON NSE
National Stock Exchange of India Limited (NSE) has already suo-moto allowed trading of
Company's equity shares on their platform vide their circular dated February 18, 2021,
since the market cap of the Company increased, with effect from February 18, 2021.
The Company has complied with the provisions of the Act, Rules, Regulations,
Guidelines, and Secretarial Standards except as mentioned in detail in the Corporate
Governance Report forming part of the Board's Report. There has been no other
penalty/stricture imposed on the Company by the Stock Exchanges or SEBI or any other
Statutory Authority on any matter related to capital markets during last three financial
years.
GENERAL
During the year under review, there was no change in nature of business of the
Company.
During the year under review, there were no significant and material orders
passed by the regulators or courts or tribunals impacting the going concern status and
your Company's operations in future.
Your Company does not have any subsidiaries, joint ventures or associate
companies except 1) M/s. HL Equipments, a partnership firm where the Company holds 99%
partnership interest (HLE Engineers Private Limited was originally the partner in the said
partnership firm and as a part of the Scheme, the said ownership interest in H L
Equipments was vested in your Company); 2) During FY 2021-22, with 100% acquisition of
shares through a Share Purchase Agreement, THALETEC GmbH ("Thaletec") (a
company incorporated in Germany) has become subsidiary of the Company; and 3) Thaletec has
a wholly owned subsidiary, Thaletec Inc., USA, which has also become wholly owned
subsidiary of the Company. The consolidated financial statements are also being presented
in addition to the standalone financial statement of your Company.
During the year under review, there was no application made or any proceeding
pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016).
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.
|
By the Order of the Board of |
|
HLE Glascoat Limited |
|
Sd/- |
|
Himanshu Patel |
|
Managing Director |
|
(DIN: 00202312) |
|
Sd/- |
|
Aalap Patel |
Place: Maroli |
Executive Director |
Date: May 23, 2022 |
(DIN: 06858672) |
|