Hindustan Tin Works Ltd Directors Report.

Dear Shareholders,

Your Directors have great pleasure in presenting the 62nd Annual Report together with the Audited Annual Accounts of the Company for the financial year ending 31st March 2020.

FINANCIAL RESULTS

The performance of the Company for the financial year ended 31st March, 2020 is summarized below:

(Rupees in Lakhs)

2019-2020 2018-2019
Profit before Interest, Depreciation, & Tax 2551.62 3114.69
Less:
Financial Costs 959.35 1082.26
Depreciation and Amortization expense 857.05 763.39
Provision for Tax 210.22 447.64
Deferred Tax (236.24) 31.95
Profit for the year 761.24 789.45
Other Comprehensive Income (Net of tax) (10.11) 3.53
Total Comprehensive Income for the year 751.14 792.98

NATURE OF BUSINESS

Hindustan Tin Works Ltd. is one of the leading manufacturer and exporter of high performance cans, printed sheets, and related components to consumer marketing companies in India and abroad. It is one of the leading and established Company in Metal Packaging Industry.

We are keenly conscious of the emerging opportunities in the can-manufacturing sector in India as well as abroad. During the year under review, there was no change in nature of the business of the Company.

DIVIDEND

Your Directors are pleased to recommend a dividend @ Rs. 0.60 per Equity Share (6%) on the paid up capital of the Company for the year 2019-20, which if approved at the forthcoming AGM, will be paid to all those Equity Shareholders whose names appear (i) As Beneficial Owners as at the end of the business hours on 22nd September, 2020 as per the list to be furnished by the depository in respect of the shares held in electronic form and, (ii) As member in the Register of Members of the Company after giving effect to all valid shares transfers in physical form lodged with the Company on or before 22nd September, 2020.

TRANSFER TO RESERVES

It is not proposed to transfer any amount to reserves out of the profits earned during financial year 2019-20.

OPERATIONS

Your Company could achieve revenue from operations (net of GST) of Rs.29768.16 lakhs as against the previous years revenue from operations (net of GST) of Rs. 33635.77 lakhs i.e. Decrease of Rs. 3867.61 lakhs (11.50%). The export sale of the Company has been decreased from Rs. 6775.52 lakhs in previous year to Rs. 4483.38 lakhs in current year i.e. Decrease of Rs. 2292.14 lakhs (33.83%).

Your Company has achieved total comprehensive income of Rs. 751.14 lakhs as against the previous year of Rs. 792.98 lakhs i.e. Decrease of Rs. 41.84 lakhs (5.28 %).

COVID-19

Due to outbreak of COVID-19 globally and in India, the Companys management has made initial assessment of likely adverse impact on business and financial risks on account of COVID-19. The Companys management currently believes that the impact is likely to be short term in nature. Given the severity of impact, this financial year and some part of next financial year 2020-21 are likely to get affected, but also given the measures from Government and inherent resilience in Indian Economy, next year onwards are expected to show normal growth scenarios. Accordingly, at present the management does not see any medium to long term risks in the Companys ability to continue as a going concern and meeting its liabilities as and when they fall due, and compliance with the debt covenants, as applicable.

SUBSIDIARY COMPANIES AND FINANCIAL STATEMENTS

Your Company does not have any subsidiaries and hence Form AOC-1 is not applicable.

In accordance with the provisions of Section 136 of the Companies Act, 2013, the audited financial statements, and related information of the Company are available on the website of the Company - www.hindustantin.biz.

DIRECTORS

In terms of the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company Mr. P.P. Singh retires at the ensuing Annual General Meeting and being eligible, has offered himself for reappointment.

Mr. Vijay Kumar Bhatia, Whole Time Director/ Executive Director of the Company has resigned from the Board of the Company w.e.f. 8th June, 2019.

The Board of Directors of the Company has a healthy blend of executive and non executive Directors which ensures the desired level of independence in functioning and decision making.

All the non executive Directors are eminent professional and bring in wealth of expertise and experience for directing the management of the Company.

During the year under review, Mr. M.K. Zutshi, Independent Director/ Non Executive Director of the Company, has resigned from the Board with effect from 26th February, 2020. Also the Company fulfils the requirement of Independent Directors in the Composition of its Board of Directors without filling any vacancy created by such resignation.

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors hold office for a fix term of five years and are not liable to retire by rotation. In accordance with Section 149(7) of the Companies Act, 2013, each Independent Director has given a written declaration to the Company that he/she meets the criteria of Independence as mentioned under Section 149(6) of the Companies Act, 2013 and SEBI Listing Regulations, 2015.

The Board took on record the declaration and confirmation submitted by the independent directors regarding them meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same as required under regulation 25 of SEBI Listing Regulations, 2015.

The Ministry of Corporate Affairs vide its circular dated 22 October 2019 further amended the Companies (Appointment and Qualification of Directors) Rules, 2014 by requiring an independent director to apply online, by 29th Feb 2020(now extended till 30th Sep 2020), to the Indian Institute of Corporate Affairs for inclusion of his/her name in the data bank of an independent director in any company. The independent directors were also required to submit a declaration of compliance in this regard. All the independent directors of the Company have submitted the declaration with respect to the same along with proof of inclusion of his/her name in the data bank.

Key Managerial Personnel

The following persons have been designated as Key Managerial Personnel (KMP) of the Company pursuant to Section 2(51) and Section 203 of the Act, read with the Rules framed there under.

1. Mr. Vijay Kumar Bhatia, Chairman*

2. Mr. Ashok Kumar Bhatia, Chairman*

3. Mr. Sanjay Bhatia, Managing Director

4. Mr. P.P. Singh, Whole-Time Director

5. Mr. Rajat Pathak, Company Secretary

6. Mr. M.K. Mittal, Chief Financial Officer

*None of the Key Managerial Personnel have resigned during the year under review except Mr. Vijay Kumar Bhatia, Whole Time Director/ Executive Director of the Company has resigned from the Board of the Company w.e.f. 8th June, 2019. Mr. Ashok Kumar Bhatia, Whole Time Director of the Company was appointed as Chairman of the Board on place of Mr. Vijay Kumar Bhatia w.e.f. 13th November, 2019 till 30th September, 2024 in the Board Meeting held on 13th November, 2019.

EVALUATION OF PERFORMANCE OF BOARD, ITS COMMITTEES AND OF DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, 2015, the Board carried out annual performance evaluation of its own performance, its committees and individual directors. The manner in which the performance evaluation was carried out is given in detail in the Corporate Governance Report, annexed to this Report.

MEETINGS OF THE BOARD

During the year, four meetings of the Board of Directors were held, particulars of attendance of directors at the said meetings are given in the report on Corporate Governance Report, which forms part of this Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (3) (c) of the Companies Act, 2013 with respect to directors responsibility statement, it is hereby confirmed that: -(a) In the preparation of the Annual Accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures, if any.

(b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2020 and of the profit of the Company for the year ended on that date.

(c) We had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) We had prepared the Annual Accounts on a going concern basis.

(e) We had laid down proper internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. and (f) We had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A report in the form of Management Discussion and Analysis as per Part B of Schedule V of Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations, 2015), as a part of this report is annexed hereto as Annexure - I.

RISK MANAGEMENT

The Company has in place a Risk Management Policy which was reviewed by the Audit Committee and approved by the Board of Directors of the Company. The Policy provides for a robust risk management framework to identify and assess risks such as operational, strategic, financial, security, property, regulatory, reputational and other risks and put in place an adequate risk management infrastructure capable of addressing these risks. The Audit Committee of the Company also evaluates Internal financial controls and risk management systems.

LOANS AND INVESTMENTS BY THE COMPANY

Details of loans and investments, if any, made by the Company are given in notes to the financial statements.

DEPOSITS

During the year under review, the company has not accepted any deposit under Section 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

CORPORATE GOVERNANCE

A report on Corporate Governance, along with a certificate from the Statutory Auditors of the Company detailing the compliance of Corporate Governance norms as enumerated in Part C of Schedule V of Regulation 34(3) of Listing Regulations, 2015 with the Stock Exchanges, is annexed as Annexure - II.

CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGERIAL PERSONNEL

The Company has laid down a code of conduct for the Board Members and Senior Managerial Personnel of the Company. All Board Members and Senior Managerial Personnel have affirmed compliance with the Code of Conduct for the year 2019-2020. A declaration signed by Mr. Sanjay Bhatia, Managing Director, as to the compliance of the Code of Conduct by the Board Members and Senior Managerial personnel has been placed before the Board at its meeting held on 13th August, 2020, is enclosed as Annexure-III.

VIGIL MECHANISM

The Company has in place a whistle blower policy, to support the Code of Business Ethics. This policy documents the Companys commitment to maintain an open work environment in which employees, consultants and contractors are able to report instances of unethical or undesirable conduct, actual or suspected fraud or any violation of Companys Code of Business Ethics at a significantly senior level without any fear of rejection. Individuals can raise their concerns by an e-mail, or telephone or direct interaction or by a letter to the Chairman of the Audit Committee of the Company. The Policy on vigil mechanism and whistler blower policy may be accessed on the Companys website at the link: http://hindustantin.biz/Uploads/Invester/165Invr_Vigil_Mechanism_Policy.pdf and it duly forms a part of corporate governance.

DISCLOSURES

The CEO and Chief Financial Officer (CFO) have furnished to the Board in its meeting held on 26th June, 2020 a certificate with regard to the financial statements and other matters of the Company as on 31st March 2020 as required under Part B of Schedule II of Regulation 17 (8) of Listing Regulations, 2015.

No material penalty or stricture was imposed on the Company by any statutory authority for non-compliance on matter related to capital markets, during the last three years.

The Company is complying with all the mandatory requirements of the Listing Regulations of Stock Exchanges on Corporate Governance.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators/or Courts which would impact the going concern status of the Company and its future operations.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control system and suggests improvements for strengthening them. The Company has a robust Management information system which is an integral part of the control mechanism.

The Audit Committee of Board of Directors, Statutory Auditors and the Business Heads are periodically appraised of the internal audit findings and corrective actions taken.

CREDIT RATING

Due to COVID- 19, the Company is initially allowed by Haryana Government to operate partially for supplying tin cans and components to food sector only (being an essential commodity) and keeping the same in mind, the Rating Committee of ICRA has revised w.e.f. 16th April, 2020 the long-term rating for the captioned Line of Credit (LOC) to [ICRA] BBB+ (pronounced ICRA triple B plus) from [ICRA] A- (pronounced ICRA A minus). The outlook on the long-term rating remains Negative. The Rating Committee of ICRA has also revised the short-term rating to [ICRA] A2 (pronounced as A two) from [ICRA] A2+ (pronounced as A two plus) for the captioned LOC.

The rating still derives strength from the Companys significant presence in Indias Can Manufacturing sector, technologically advanced operations, proven management capability.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy to ensure that Companys Directors, Key Managerial Personnel and other senior management employees are sufficiently incentivised for enhanced performance. Remuneration should be reasonable and sufficient to attract and retain employees. Independent Directors receive remuneration by way of sitting fees for attending meetings of Board and Board Committees (where they are members) and other matters, provided under Section 178(3) of the Act and Part D of Schedule II of the Listing Regulations appended as Annexure VI to the Directors Report. The Remuneration Policy of the Company is also available on the website of the Company which is www.hindustantin.biz.

REMUNERATION

Disclosure pursuant to Section 197(12) of Companies Act, 2013 and Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided below: (i) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the year 2019-20:

Directors Nature of Directorship Ratio
Mr. Vijay Kumar Bhatia* Whole Time Director 2.52:1
Mr. Sanjay Bhatia Managing Director 56.47:1
Mr. Ashok Kumar Bhatia Whole Time Director 32.50:1
Mr. Ramesh Kumar Jain Non-executive Independent Director 0.87:1
Mr. M. K. Zutshi** Non-executive Independent Director 0.50:1
Mr. Nand Prakash Sahni Non-executive Independent Director 0.65:1
Mrs. Aarti Sawhney Non-executive Independent Director 0.44:1
Mr. Prit Pal Singh Whole Time Director 7.66:1

computed based on annualized remuneration.

* Mr. Vijay Kumar Bhatia, Whole Time Director/ Executive Director of the Company has resigned from the Board of the Company w.e.f. 8th June, 2019.

** Mr. M.K. Zutshi, Independent Director/ Non Executive Director of the Company, has resigned from the Board with effect from 26th February, 2020.

(ii) the percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary in the financial year: 15

The annual increase in the salary of Managing Director, Whole Time Director, Company Secretary and CFO is as below:

Name Designation Annual Increase Percentage
Mr. Sanjay Bhatia Managing Director From Rs.89,92,670 /- to Rs. 1,03,72,863/- 15.35 %
Mr. Vijay Kumar Bhatia* Whole Time Director Rs. 27,82,080/- No increase -
Mr. Ashok Kumar Bhatia Whole Time Director From Rs. 52,28,233 /- to Rs. 59,69,822/- 14.18%
Mr. P.P. Singh Whole Time Director From Rs. 13,18,980/- to Rs. 14,07,780/- 6.73%
Mr. Rajat Pathak VP (Finance) & Company Secretary From Rs. 25,52,045/- to Rs. 27,20,717/- 6.61%
Mr. M. K. Mittal CFO From Rs. 16,87,898 /- to Rs. 17,95,160/- 6.35%

* * Mr. Vijay Kumar Bhatia, Whole Time Director/ Executive Director of the Company has resigned from the Board of the Company w.e.f. 8th June, 2019.

(iii) the percentage increase in the median remuneration of employees in the financial year: 8.82% (iv) the number of permanent employees on the rolls of Company: 466 (Four hundred Sixty Six), as on 31 March, 2020.

(v) 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 the remuneration* of employees was 8.54% other than the managerial personnel in the last financial year whereas the average increase in the remuneration of managerial personnel was 6.51% thus there was not any exceptional circumstances for increase in the managerial remuneration.

* It does not include incentive bonus, leave encashment, gratuity & payments to LIC of India.

(vi) Affirmation that the remuneration is as per the Remuneration Policy of the Company: The remuneration is as per the Remuneration Policy of the Company.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Adhering to the provisions of Companies Act, 2013, relevant amounts which remained unpaid or unclaimed for periods of 7 years have been transferred by the Company, from time to time on or before due date to the Investor Education and Protection Fund.

Pursuant to the provisions of Section 124(6) of the Companies Act, 2013 read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 which came into force from September 7, 2016 (including any amendment thereto or reenactment thereof for the time being in force), all equity shares in respect of which dividend has not been paid or claimed by the Member(s) for seven consecutive years or more are required to be transferred to the IEPF Authority, a Fund constituted by the Government of India under Section 125 of the Companies Act, 2013. The Company has communicated individually to the concerned Members to claim their unpaid / unclaimed dividend amount(s) and that failure to claim the same would lead to their equity shares being transferred to the IEPF Authority without any further notice. In accordance with the aforesaid IEPF Rules, during the Financial Year 2019-20 and till date, the Company has transferred shares pertaining to dividends which remained unpaid and unclaimed, being declared for the years 2008-09, 2009-10 (Interim and Final), 2010-11 and 2011-12, to the IEPF Authority.

The unclaimed dividends and corresponding shares including all benefits accruing on such shares, if any, once transferred to the IEPF Authority can only be claimed back from the IEPF Authority, for which details are available at www.iepf.gov.in.

The details of Members whose dividends have remained unclaimed / unpaid for seven consecutive years have been placed on the website of the Company. Members are requested to refer to the "Investor" section on the website of the Company at http://hindustantin.biz/Uploads/image/47imguf_Details_of_Members.pdf

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION AND REDRESSAL) ACT, 2013

The Company has been employing women employees in various cadres within its premises. The Company has in place a policy against Sexual Harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There was no complaint received from any employee during the financial year 2019-20 and hence no complaint is outstanding as on 31st March, 2020.

PERSONNEL

Particulars of employees as required under the provisions of Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, is given in Annexure -VII.

PARTICULARS IN RESPECT OF CONSERVATION OF ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

The information in accordance with the provisions of Clause (m) of Sub-Section (3) of Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are forming part of the Directors Report for the year ended 31st March, 2020 is given in Annexure - VIII.

RELATED PARTY TRANSACTIONS

All related party transactions entered into by the Company during the year were on an arms length basis and were in the ordinary course of business. There are no materially significant Related Party Transactions made by the Company with promoters, directors, key managerial personnel or other designated persons which may have potential conflict with the interest of the Company at large.

All related party transactions that were entered into during the financial year were on an arms length basis. Details of such transactions are given in the Annexure - IX to this report.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 134(3)(a)and Section 92(3) of the Companies Act 2013 read with Companies( Amendment) Act 201 7, an extract of Annual Return (eForm MGT-9) is available on the website of the Company and can be accessed at link: http://hindustantin.biz/Uploads/image/71imguf_AnnualReturen2020.pdf

BADDI LAND

The District Collector, Solan issued a Show Cause Notice to the Company under Section 118 of the H.P. Tenancy and Land Reforms Act. It was alleged that the Company has violated the terms and conditions of the Section 118 of the H.P. Tenancy and Land Reforms Act. The Collector held that the Company has violated the provisions of Section 118 of the H.P. Tenancy and Land Reforms Act, therefore, ordered the vestment of the property in favour of the State of H.P. Being aggrieved, the Company has filed the appeal with Divisional Commissioner, Shimla and after various hearings, the Divisional Commissioner on 18th March, 2019, passed order in favor of the Company.

Now, Himachal Pradesh Government has filed revision petition against the said order and the same is pending adjudication before the Court of financial Commissioner (Appeals) Shimla.

APPRECIATION & ACKNOWLEDGEMENT

The Board wishes to place on record with deep sense of satisfaction, their appreciation for the high degree of professionalism, commitment and dedication displayed by employees at all levels and the guidance, cooperation and assistance extended to the Company by its Bankers, Shareholders, Customers and Suppliers.

For & on behalf of the Board
Place : New Delhi ASHOK KUMAR BHATIA
Date : 13th August, 2020 Chairman