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

*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.

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:

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.