Harish Textile Engineers Ltd Management Discussions

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Harish Textile Engineers Ltd Share Price Management Discussions

The purpose of this discussion is to provide an understanding of financial statements and a composite summary of performance of our business. Management Discussion and Analysis (MDA) is structured as follows:

OVERALL REVIEW:

India recovered from the pandemic in FY22 and positioned itself to ascend to the pre-pandemic growth path. During FY23, India faced challenges in reining inflation which was accentuated by the global geopolitical developments. The average retail inflation for FY23 was 6.7 per cent. That India is poised to retain its position as the fastest-growing major economy with a GDP growth estimated at around 7.2% in FY23 and about 6.5% plus GDP in FY24. The economic progress in FY24 will be supported by robust domestic demand and a healthy pick-up in capital formation.

The measure thrust on infrastructure creation in the Union Budget 2023 is expected to have a significant positive impact cascading on multiple sectors.

Geopolitical developments triggered high energy costs in 2022. Also, supply-side disruptions distorted consumer prices. As a result, unreasonable inflation prevailed across the globe - averaging around 9%. Majority of the global central banks tightened the monetary policy to restore price stability.

Rising interest rates and the developments in Eastern Europe will continue to cast a grim shadow on global economic stability, however, the reopening of Chinas economy, higher global demand and slowing inflation projected across certain countries in the year ahead have seemingly paved the way for a healthy recovery.

COMPANY PERFORMANCE/ REVIEW OF OPERATIONS:

FY 2022-23 was a landmark year for the company as the top line of the company crossed Rs. 116 crores, this marks for almost 9% Y-o-Y growth in the annual turnover of the company. The Non- Woven business performed exceptionally well showing an annual increase in the turnover by almost 30%. The performance of the PSF division was also increased by approximately 14%. The Company is taking appropriate cost optimisation measure, the management expects that the Engineering division will also do better in the current year.

During the year under review, Company had participated in Textile Machinery Exhibition that was 10th International Exhibition & Conference on Technical Textiles TECHNOTEX-2023 during the year. The Company has received very encouraging response from the Customers and these efforts are expected to help the division perform robustly during FY24.

Brief Introduction of Your Company

Your Company is one of the leading producers of textile processing and finishing machinery in India. The Machinery produced by your company has found acceptance by reputed clients in India and abroad. Your company has also exported its products to over 25 countries, including to a prestigious market like U.K.

Your company has manufacturing facilities spread over 50,000 square feet in Umbergam, Gujarat.

Your company is also engaged in Production of Non-woven fabrics used mainly for auto interiors and filtration and hygiene segments at its plant in Umbergam which has factory building of approx. 1,10,000 square feet.

Your Company is also engaged in the production of polyester staple fibre by recycling pet bottle and waste polyester, at its plant in Gondhe, Nashik.

Strengths

Over the years your company has acquired Product and Domain Expertise in all the products manufactured. Your Company also has excellent technical and design team that can take up special tailor-made projects even for non-textile applications. Your company has best in class infrastructure and plant and machinery in this business. The PSF business is environmentally friendly green business as it recycles Pet Bottles and Other Polyester Scrap into PSF. Your Company has domain expertise and experience in this Business and best in class infrastructure. Your Company has ambitious Plans of Expansion in this Business.

Your Company has wide range of Products in its Non-Woven Business which caters to a wide range of clients. With PSF plant providing assured raw material supply, your Company is in a unique position in the Business.

Quality

Harish Machines are known and well respected for its Quality and productivity and command a premium valuation.

The PSF and Non-Woven Products of Your Company are well known and respected for their Highest Quality Standards.

Outlook

Outlook for the current financial year 2023-24 seems to be better with Non-Woven business attaining monthly highest turnover and expanded Non-Woven capacity has started to yield fruits in the current year.

The overall scenario for Engineering and PSF is also encouraging.

The recycling industry has evolved from viable businesses in medium term to long term and now the recycling industry is seen/taken as "must have" from "good to have" for overall ecological development resulting to move the industry to main stream from the side stream.

A number of Companies are looking for recycled material to reduce their carbon foot prints, automotive industries is one of the leading industries among this. Our Companys products Fibre and Non-Woven Fabrics are mainly supplied to automotive ancillary companies and hence we are one of the few Company that can address their growing appetite/demand.

Opportunities and threats

Opportunities:

For engineering business export markets offer exciting opportunities. Specialised, tailor made non textile customers also offer excellent growth prospects.

For PSF business, there are ambitious expansion plans and with the auto sales picking up sharply, the opportunities for Non-Woven and PSF have improved substantially.

Threats:

The threats are in relation to the economic slow-down, liquidity issues, recent spurt in Raw Material prices and any adverse government policies. However, since textile industry is one of the top-three employment generators, the government policies are expected to be conducive and supportive.

Other Threats:

Geopolitical

• Emerging geopolitical trade

• restrictions and supply chain challenges

New Competition

• New competitors are entering the market

Financial

• Volatility in Indian Rupee (?) and US Dollar ($) exchange rates

• The emerging scenario of higher interest rate regime.

Cyber-Security

• Data loss/Thefts

• Domain-based threats

• Hacktivism

• Site non-availability

Others

• Looming threat of global recession

• Supply chain disruptions

• Employee Health & Wellness

RISKS AND CONCERNS:

The recent liquidity crunch and global economic down turn due to liquidity tightening and higher interest rate regime followed by the Central Banks all over the world are the risks and concerns being faced by the industry.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Companys well-defined organizational structure, documented policy guidelines, defined authority matrix and internal financial controls ensure operational effectiveness, reliability of financial data and compliance with applicable laws, regulations and Companys policies.

The financial control framework includes internal controls, delegation of authority procedures, segregation of duties, system access controls, and document filing and storage procedures. The Internal Auditor ensures the continued effectiveness of the Companys internal control system. The Audit Committee reviews internal financial control reports prepared by the internal auditor. The Company has framed risk based internal audit policy as part of its oversight function. The objective of risk based internal audit review is to identify the key activities and controls in the business processes, review effectiveness of business processes and controls, assess the operating effectiveness of internal controls and provide recommendations for business process and internal control improvement.

For and on behalf of the Board of Directors Harish Textile Engineers Limited

Sandeep Gandhi Managing Director DIN No. 00941665

Hitendra Desai Whole Time Director DIN No.: 00452481

Date: May 30, 2023 Place: Mumbai

Annexure II

FORM NO. MGT 9 EXTRACT OF ANNUAL RETURN As on financial year ended on 31.03.2023

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company

(Management & Administration) Rules, 2014.

I. REGISTRATION & OTHER DETAILS:

1 CIN

L29119MH2010PLC201521

2 Registration Date

31/03/2010

3 Name of the Company

Harish Textile Engineers Limited

4 Category/Sub-Category of the Company

Company Limited By Shares/ Indian Non-Government Company

5 Address of the Registered Office & Contact Details

2nd Floor, 19 Parsi Panchayat Road, Andheri (East), Mumbai- 400069

6 Whether Listed Company

Yes

7 Name, Address & Contact Details of the Registrar & Transfer Agent, if any.

Bigshare Services Pvt. Ltd.

Office No S6-2, 6th Floor, Pinnacle Business Park, Next to Ahura Centre, Mahakali Caves Road, Andheri (East) Mumbai-400093

Telephone:022-62638200/206

Fax: 022-62638299

8 E-mail ID

compliances@harishtextile.com

9 Telephone Number

+91-2266490251

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

(All the business activities contributing 10 % or more of the total turnover of the company shall be stated):

Sr. No. Name and Description of main products / services

NIC Code of the Product/service % to total turnover of the company

1 Textile Processing and Machineries

1313 22.30%

2 Non-Woven

5603 60.06%

3 Polyester staple fibre

3252 17.64

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES [No. of Companies for which information is being filled]

SR. NO. NAME AND ADDRESS OF THE COMPANY

CIN/GLN HOLDING/

SUBSIDIARY/

ASSOCIATE

1 N.A.

N.A. N.A.

IV. SHARE HOLDING PATTERN

(Equity Share Capital Break up as percentage of Total Equity)

Category-wise Share Holding

Category

of

Shareholders

No. of Shares held at the beginning of the year [As on 31-March-2022]

No. of Shares held at the end of the year [As on 31-March-2023]

%

Change during the year

Demat

Physical

Total

% of Total Shares

Demat

Physical

Total

% of Total Shares

A.

Promoters

(1) Indian

a)

Individual/

2196887

1257

2198144

65.89

1604887

1257

1606144

48.15

(17.75)

HUF

b) Central Govt

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

c) State Govt(s)

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

d) Bodies Corp.

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

e) Banks / FI

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

f) Any other

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Total

shareholding of Promoter (A)

2196887

1257

2198144

65.89

1604887

1257

1606144

48.15

(17.75)

(2) Foreign

a)

Individuals

(Non

Resident

Individuals/

Foreign

Individuals)

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

b) Bodies Corporate

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

c)

Institutions

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

d) Any

Other

(Specify)

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Sub Total A2

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Total

Shareholding of Promoter Group A(1+2)

2196887

1257

2198144

65.89

1604887

1257

1606144

48.15

(17.75)

B. Public Shareholding

1.

Institutions

a) Mutual Funds

0

1521

1521

0.05

0

1521

1521

0.05

0

b) Banks / FI

13

0

13

0

13

0

13

0

0

c) Central Govt

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

d) State Govt(s)

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

e) Venture

Capital

Funds

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

f) Insurance Companies

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

g) Fils

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

h) Foreign Venture Capital Funds

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

i) Others (specify)

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Sub-total

(B)(1):-

13

1521

1534

0.05

13

1521

1534

0.05

0

2. Non Institutions

a) Bodies Corp.

i) Indian

3466

18551

22017

0.66

4321

18551

22872

0.69

0.03

ii) Overseas

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

b)

Individuals

i) Individual shareholder s holding nominal share

capital up to Rs. 1 lakh

344239

219869

564108

16.91

488263

215748

704011

21.10

4.19

ii) Individual shareholder s holding nominal share capital in excess of Rs 1 lakh

486202

16510

502712

15.07

893880

16510

910390

27.29

12.22

c) Others (specify)

Non

Resident

Indians

14053

0

14053

0.42

13683

0

13683

0.41

(0.01)

Overseas

Corporate

Bodies

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Foreign

Nationals

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Clearing

Members

169

0

169

0.01

461

0

461

0.01

0.01

Hindu Undivided Family (HUF)

33133

0

33133

0.99

76905

0

76905

2.31

1.31

Trusts

130

0

130

0

0

0

0

0

0

Foreign Bodies - D R

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Sub-total

(B)(2):-

881392

254930

1136322

34.06

1477513

250809

1728322

51.81

17.75

Total

Public

Shareholding

(B)=(B)(1)+

(B)(2)

881405

256451

1137856

34.11

1477526

252330

1729856

51.85

17.75

C. Shares held by Custodian for GDRs & ADRs

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Grand

Total

(A+B+C)

3078292

257708

3336000

100.00

3082413

253587

3336000

100.00

0.00

B) Shareholding of Promoter (including Promoter Group):

Sr. No. Shareholders Name

Shareholding at the beginning of the year 01.04.2022

Shareholding at the end of the year 31.03.2023

%

change

in

shareholding

during

the

year

No. of Shares % of total Shares of the company %of Shares Pledge d /encamp be red to total shares No. of Shares % of total Shares of the company % of Shares Pledge d /

encumbered to total shares

1 Mr. Sandeep Kirtikumar Gandhi

217334

4

65.15 0 1581344 47.40 0
(17.75)

2 Mr. Kirti Shantilal Gandhi

23796 0.71 0 23796 0.71 0 0.00

3 Sandeep Gandhi (HUF)

1 0.00 0 1 0.00 0 0.00

4 Kirtikumar Gandhi (HUF)

1 0.00 0 1 0.00 0 0.00

5 Mr. Shovan Sandeep Gandhi

261 0.01 0 261 0.01 0 0.00

6 Mr. Shaiv Sandeep Gandhi

1 0.00 0 1 0.00 0 0.00

7 Mrs. Saher Ahmed Gandhi

157 0.01 0 157 0.01 0 0.00

8 Mrs. Shaila Sandeep Gandhi

1 0.00 0 1 0.00 0 0.00

9 Mr. Niranjana Kirtikumar Gandhi

582 0.02 0 582 0.02 0 0.00

Total

219814

4

65.89 0 1606144 48.15 0 (17.74)

C) Change in Promoters (including Promoter Group) Shareholding:

Sr. No Name of Promoter

Particulars

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of shares % of total

shares of the

company

No. of shares % of total

shares of the

company

1 Mr. Sandeep Kirtikumar Gandhi

At the beginning of the year 21,73,344 65.15 21,73,344 65.15
Increase/Decrease (5,92,000) (17.75) (5,92,000) (17.75)
At the end of the year 15,81,344 47.40 15,81,344 47.40

2 Mr. Kirtikumar Shantilal Gandhi

At the beginning of the year 23,796 0.71 23,796 0.71
Increase/Decrease 0 0 0 0
At the end of the year 23,796 0.71 23,796 0.71

3 Sandeep Gandhi (HUF)

At the beginning of the year 1 0.00 1 0.00
Increase /Decrease 0 0 0 0
At the end of the year 1 0.00 1 0.00

4 Kirtikumar Gandhi (HUF)

At the beginning of the year 1 0.00 1 0.00
Increase/Decrease 0 0 0 0
At the end of the year 1 0.00 1 0.00

5 Mr. Shovan Sandeep Gandhi

At the beginning of the year 261 0.01 261 0.01
Increase/Decrease 0 0 0 0
At the end of the year 261 0.01 261 0.01

6 Mr. Shaiv Sandeep Gandhi

At the beginning of the year 1 0.00 1 0.00
Increase/Decrease 0 0 0 0
At the end of the year 1 0.00 1 0.00

7 Mrs. Saher Ahmed Gandhi

At the beginning of the year 157 0.00 157 0.00
Increase/Decrease 0 0 0 0
At the end of the year 157 0.00 157 0.00

8 Mrs. Shaila Sandeep Gandhi

At the beginning of the year 1 0.00 1 0.00
Increase/Decrease 0 0 0 0
At the end of the year 1 0.00 1 0.00

9 Mrs. Niranjana Kirtikumar Gandhi

At the beginning of the year 582 0.02 582 0.02
Increase/Decrease 0 0 0 0
At the end of the year 582 0.02 582 0.02

D) Shareholding Pattern of top ten Shareholders: -

(Other than Directors, Promoters and Holders of GDRs and ADRs):

Sr. No. Name of top ten Shareholder

Shareholding at the beginning of the year as on 01.04.2022

Change in Share Holding during the year

Shareholding at the end of the year as on 31.03.2023

No. of Shares % of total Shares of the company No. of Share s % of total Shares of the company No. of Share s % of total Shares of the company

1 Kuntal Pinkesh Upadhyay

930 0.03 63000 1.92 63930 1.92

2 Mahendra Girdharilal

63536 1.90 0 0 63536 1.90

3 Kailashben Ashokkumar Patel

57135 1.71 225 0.01 57360 1.72

4 Nivedita Kishorechandra Kothari

260 0.01 50000 1.50 50260 1.51

5 Patel Mayur Rajendrabhai

45684 1.37 0 0 45684 1.37

6 Dheeraj Kumar Lohia

44792 1.34 -51 0 44741 1.34

7 Pinkesh H Upadhyay Huf

0 0 44500 1.33 44500 1.33

8 Varsha Chugh

42979 1.29 -1995 0.06 40984 1.23

9 Sunil Bhirud

0 0 42000 1.26 42000 1.26

10 Rahul C. Shah

13 0 41797 1.25 41810 1.25

11 Bhooshan Suresh Patel

0 0 41500 1.24 41500 1.24

12 Rajkumar Samanmal Makhija

35099 1.05 -1428 0.04 33671 1.01

13 Gaurang Shashikant Vasani

30000 0.90 -30000 0.90 0 0

14 Anand L.

22000 0.66 3000 0.09 25000 0.75

15 Ketankumar V Patel

18460 0.55 -6702 0.20 11758 0.35

16 Kushal Sanjaybhai Patel

16896 0.51 0 0 16896 0.51

E) Shareholding of Directors and Key Managerial Personnel:

Sr. No. Name of the Shareholder

Shareholding at the

beginning of the

year as on 01.04.2022

Change in Share Holding during the year

Shareholding at the end of the year as on 31.03.2023

No. of shares % of total

shares

of

the

company

No. of Shares % of total

shares of the

company

No. of Shares % of total

shares of the company

1 Mr. Sandeep Gandhi (Managing Director)

217334

4

65.15 592000 17.75 158134

4

47.40

2 Mr. Hitendra Desai (Whole-Time Director)

- - 39000 1.17 39000 1.17

2 Mr. Ritesh Patel (Independent Director)

" " " "

3 Ms. Meena Mistry (Independent Director)

" " " "

4 Mr. Nainesh Trivedi (Independent Director)

" " " " " "

5 Mr. Pinkesh Upadhyay (Chief Financial Officer)

25000 0.75 25000 0.75

6 Ms. Priya Gupta (Company Secretary and Compliance Officer)

F) INDEBTEDNESS - Indebtedness of the Company including interest outstanding/accrued but not due for payment.

(Rs. In Lakhs)

Secured

Loans

excluding

deposits

Unsecured

Loans

Deposits Total

Indebtedness

Indebtedness at the beginning of the financial year

i) Principal Amount

3271.08 742.27 4013.35

ii) Interest due but not paid

- - - -

iii) Interest accrued but not due

- - - -

Total (i+ii+iii)

3271.08 742.27 4013.35

Change in Indebtedness during the financial year

* Addition**

329.73 243.21 0 572.94

* Reduction

469.00 150.00 0 619.00

Net Change

Indebtedness at the end of the financial year

i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not due

Total (i+ii+iii)

3131.81 835.41 0 3967.22

^Additions includes amount of Rs. 146.79 Lakhs converted from Trade Payables to NCD.

XI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL-

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

(Rs. in Lakhs)

Sr. No. Particulars of Remuneration

Name of Director

Total

*Sandeep K. Gandhi *Hitendra C. Desai

1 Gross salary

(a)Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

137.00 22.20

159.20

(b)Value of perquisites u/s 17(2) Income-tax Act, 1961

" "

"

(c)Profits in lieu of salary under section 17(3) Income- tax Act, 1961

2 Stock Option

- -

-

3 Sweat Equity

- -

-

4 Commission - as % of profit - others, specify...

5 Others, please specify (Reimbursement of Expenses)

Total (A)

137.00 22.20

159.20

Ceiling as per the Act

180.00 30.00

210.00

Notes-

*The Company had passed a special resolution at the Annual General Meeting held on 30th September 2022 for payment of remuneration along-with perquisites and allowances Managing Director and Whole-time Director

**The amount paid is including of reimbursement of expenses.

B. Remuneration to other Directors- Sitting fees-

The details of sitting fees/remuneration paid to the Directors for the year 2022-2023 are as under: Nil

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

(Rs. in Lakhs)

Sr. No. Particulars of Remuneration

Key Managerial Personnel

CEO CS CFO Total

1 Gross salary

-

(a)Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

4.83 18.00 22.83

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

" " " "

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

" " " "

2 Stock Option

- - - -

3 Sweat Equity

- - - -

4 Commission

- - - -

- as % of profit

- - - -

others, specify...

- - - -

5 Others, please specify

- - - -

Total

- 4.83 18.00 22.83

XII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: NIL

For and on behalf of the Board of Directors Harish Textile Engineers Limited

Sandeep Gandhi Managing Director DIN No. 00941665

Hitendra Desai Whole Time Director DIN No.: 00452481

Date: May 30, 2023 Place: Mumbai

FORM MR-3

SECRETARIAL AUDIT REPORT

(Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

FOR THE FINANCIAL YEAR ENDED 31st MARCH, 2023

To,

The Members

Harish Textile Engineers Limited

2nd Floor, 19 Parsi Panchayat Road,

Andheri East, Mumbai-400069

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by HARISH TEXTILE ENGINEERS LIMITED (hereinafter called ‘the Company). Secretarial Audit was conducted in a manner that provided me with a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verification of the Companys books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, We hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2023 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and the records maintained by the Company for the financial year ended on 31st March, 2023 according to the provisions of the Companies Act, 2013 and the rules made there under:

i. The Companies Act, 2013 (the Act) and the rules made there under;

ii. The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

iii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA) and the rules made there under;

iv. Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (Not Applicable during the Audit Period)

v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act):-

a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and The Securities and Exchange Board of India (Issue of Capital And Disclosure Requirements) Regulations, 2018;

d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; (Not Applicable during the Audit Period)

e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not Applicable during the Audit Period)

h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 and The Securities and Exchange Board of India (Buyback of Securities) Regulations 2018; (Not Applicable during the Audit Period)

i) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

We have also examined compliance with the applicable clauses of the following:

i. Secretarial Standards issued by The Institute of Company Secretaries of India.

ii. The Listing Agreements entered into by the Company with BSE Limited read with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject.

I further report that:

• The Board of Directors of the Company are:

1. Mr. Hitendra Chimanlal Desai- Wholetime Director.

2. Mr. Ritesh Harshad Patel - Director.

3. Mr. Sandeep Kirtikumar Gandhi - Managing Director

4. Mrs. Meena Ramesh Mistry-Director

5. Mr. Nainesh Trivedi - Director

Following are the KMP of the Company:

1. Mr. Pinkesh Hasmukhlal Upadhyay- CFO

2. Ms. Priya Umesh Gupta - Company Secretary

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors. There were no changes in the composition of the Board of Directors that took place during the period under review.

• During the year under review, the Company had issued 4,23,209 Non-convertible debentures at a single terms for all the Debenture Holders on 21/09/2022 at a face value of Rs. 100 /-;

• There were a few forms which were filled with additional fees. Except these, The Company has filed the required forms and returns with the Registrar of Companies (RoC) within the time prescribed under the Act. However, no forms or returns were filed with the Regional Director, Central Government, Company Law Board/The Tribunal, Court or other authorities.

• The Website of the Company is not updated as required to be maintained Regulation 46 of SEBI Listing (Obligations and Disclosure Requirements) Regulations 2015.

• Majority decision is carried through while the dissenting members views are captured and recorded as part of the minutes.

• Adequate notice of board meeting is given to all the directors along with agenda at least seven days in advance or shorter notice consent is taken whenever required, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and meaningful participation at the meeting.

• As per the minutes of the meeting duly recorded and signed by the Chairman, the decisions of the Board were unanimous and no dissenting views have been recorded.

• I, further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

• I, further report that during the audit period there were no specific events / actions having a major bearing on the affairs of the Company in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc.

For D N Vora & Associates Practising Company Secretaries

Date: May 30, 2023 Place: Mumbai

Dipali Vora Proprietor ACS No.: 46989 C. P. No.: 21254 UDIN: A046989E000946745

This report is to be read with our letter of even date which is annexed as ANNEXURE-A- and forms an integral part of this report.

To,

The Members,

HARISH TEXTILE ENGINEERS LIMITED

2nd Floor, 19 Parsi Panchayat Road,

Andheri East, Mumbai-400069

Our report of even date is to read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provided a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Book of Accounts of the Company.

4. Wherever required, we have obtained the management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulation, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For D N Vora & Associates Practising Company Secretaries

Date: May 30, 2023 Place: Mumbai

Dipali Vora Proprietor ACS No.: 46989 C. P. No.: 21254 UDIN: A046989E000946745

FORM NO. AOC -2

(Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the

Companies (Accounts) Rules, 2014.

Form for Disclosure of particulars of contracts/arrangements entered by the company with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 including certain arms length transaction under third proviso thereto.

1. Details of contracts or arrangements or transactions not at Arms length basis.

Sr.

No.

Name(s) of the related party and

nature of relations hip

Nature of contracts/ arrangements/

transactions

Duration of the

contracts / arrangements/transactions

Salient terms of the contracts or

arrangements or

transaction s including the value, if any

Justification for entering into such contracts / arrangements /

transaction

s

Date (s) of approval by the Board Amount paid as

advances

Date on

which

special

resolution was

passed

in

General

meeting

-

- - - - - - - -

2. Details of material contracts or arrangements or transactions at Arms length basis.

Sr. No. Name of the related party and nature of relationship

Nature of contracts / arrangements / transactions Duration of contracts / arrangements / transaction s Salient features of contracts / arrangements / transaction s, including value, if any Date(s) of

approval

by the

Board /

Audit

Committee

Amount paid as advances, if any

1 Harish Enterprise Private Limited Company with common Directors

Rent Expenses 8 Years Factory Building taken on rent for the period of 8 years ending on 31.03.2024 at Umbergaon 31.03.201 6 12.00

2 Everys Healthcare Private Limited Company with common Directors

Interest

Income

NA NA 12.04.201

9

6.52

3 Sandeep Gandhi Managing Director

Remuneration Paid 5 Years NA 30.12.201

8

137.00

4 Hitendra Desai Whole time Director

Remuneration Paid 5 Years NA 30.12.201

8

22.20

5 Shaila Gandhi Relative of Managing Director

Professional Fees paid 5 Years NA 12.04.201

9

30

6 Shovan Gandhi Relative of Managing Director

Remuneration paid 5 Years NA 22.09.202

0

24

7 Pacific Harish Industries Limited (Financial liability- Reliance Loan) Company with common Directors

Repayment of Loan 7 Years NA 12.04.201

9

148.73

For and on behalf of the Board of Directors Harish Textile Engineers Limited

Sandeep Gandhi Managing Director DIN No. 00941665

Hitendra Desai Whole Time Director DIN No.: 00452481

Date: May 30, 2023 Place: Mumbai

The information required under Section 197 of the Act and the Rules made there-under, in respect of employees of the Company, is follows:-

(a) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year;

Executive Directors

Ratio to Median Remuneration

Sandeep Gandhi

7.96

Hitendra Desai

2.72

(b) The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary or Manager, if any, in the financial year;

Name of Person

% Increase in remuneration

Mr. Sandeep Gandhi

23.42%

Mr. Hitendra Desai

7.90%

Mr. Pinkesh Upadhyay

1.12%

Ms. Priya Gupta

8.71%

(c) The percentage increase in the median remuneration of employees in the financial year: about 9.50%.

Note: Percentage in bracket represents negative percentage.

(d) The number of permanent employees on the rolls of company: 141

(e) The explanation on the relationship between average increase in remuneration and company performance;

On an average, employees received an increase of 10%. The increase in remuneration is in line with the market trends. In order to ensure that remuneration reflects company performance, the performance pay is linked to organization performance.

(f) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:

Particulars

Rs. In lakhs

Remuneration of Key Managerial Personnel (KMP) during financial year 20222023 (aggregated)

182.03

Revenue from operations

11,644.16

Remuneration (as % of revenue)

1.56%

Profit before tax (PBT)

10.34

Remuneration (as % of PBT)

1759.60%

(g) variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the Company as at the close of the current financial year and previous financial year;

Particulars

Unit As at 31st March, 2023 As at 31st March, 2022 Variation %

Closing rate of share at BSE

Rs. 31.93 51.05 -37%

Closing rate of share at NSE

Rs. N.A. N.A. N.A.

EPS (consolidated)

Rs. (0.10) 1.45 -106.89%

Market capitalization

Rs./Lakhs 1065.18 1703.03 -37.45%

BSE

1065.18 1703.03 -37.45%

NSE

N.A. N.A. N.A.

Price Earnings Ratio

Ratio

BSE

N.A. 35.21 Since EPS is negative PE cant be calculated

NSE

N.A. N.A. N.A.

(h) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration

The average increase in salaries of employees other than managerial personnel in 2022-2023 was 9.50%. Percentage increase in the managerial remuneration for the year was 0.21%.

(i) Comparison of each remuneration of the Key Managerial Personnel against the performance of the Company

Particulars

Chief Executive Officer Chief Financial Officer Company Secretary
Rs. /Lac

Remuneration

- 18.00 4.83

Revenue from operations

11,644.16 11,644.16

Remuneration (as % of revenue)

0.15% 0.04%

Profit before Tax (PBT)

- 10.34 10.34

Remuneration (as % of PBT)

174.00% 46.69%

(j) The key parameters for any variable component of remuneration availed by the directors;

No Variable Component in the Remuneration availed by Directors

(k) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year;- Not applicable.

(I) Affirmation that the remuneration is as per the remuneration policy of the Company

The Companys remuneration policy is driven by the success and performance of the individual employees and the Company. Through its compensation package, the Company endeavours to attract, retain, develop and motivate a high performance staff. The Company follows a compensation mix of fixed pay, benefits and performance based variable pay. Individual performance pay is determined by business performance and the performance of the individuals measured through the annual appraisal process. The Company affirms remuneration is as per the remuneration policy of the Company.

(2)The statement to the boards report shall include a statement showing the name of every employee of the company-.

(i) if employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than one crore two lakh rupees;- Not Applicable to the Company

(ii) if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than eight lakh fifty thousand rupees per month;- Not Applicable to the Company

(iii) if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is 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;- Not Applicable to the Company. who-

For and on behalf of the Board of Directors Harish Textile Engineers Limited

Sandeep Gandhi Managing Director DIN No. 00941665

Hitendra Desai Whole Time Director DIN No.: 00452481

Date: May 30, 2023 Place: Mumbai

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