HLE Glascoat Ltd Directors Report.

Dear Members,

Your Directors are pleased to present the 30th Annual Report together with the Audited Financial Statements for the Financial Year ended 31st March, 2021.

• FINANCIAL HIGHLIGHTS

(Rs. in Lakhs)

PARTICULARS

Consolidated

Standalone

2020-21 2019-20* 2020-21 2019-20*
Revenue from Operations 48,448.93 42,640.87 42,071.11 38,738.01
Other Income 393.32 480.29 1,200.33 924.61
Total Income 48,842.35 43,121.16 43,271.44 39,662.62
Profit before Finance Costs, Depreciation, Exceptional Items, Extraordinary Items and Tax 9,558.77 7,623.15 8,929.07 7,199.72
Less: Finance Costs 973.70 1,222.22 943.35 1,183.38
Profit before Depreciation, Exceptional Items, Extraordinary Items and Tax 8,585.07 6,400.93 7,985.72 6,016.34
Less: Depreciation/ Amortisation/ Impairment 860.99 744.43 836.55 722.42
Profit before Exceptional Items, Extraordinary Items and Tax 7,724.08 5,656.50 7,149.17 5,293.92
Less: Exceptional Items and Extraordinary Items - - - -
Profit before Tax 7,724.08 5,656.50 7,149.17 5,293.92
Less: Current Tax, net of earlier year adjustments 2,396.05 1,673.49 1,926.53 1,411.49
Less: Deferred Tax (9.07) 63.03 (12.09) 63.80
Profit after tax for the financial year (A) 5,337.10 3,919.98 5,234.73 3,818.63
Profit for the financial year from Continuing Operations 5,113.99 - 5,011.62 -
Profit for the financial year from Discontinuing Operations 223.11 - 223.11 -
Profit for the financial year (A) 5,337.10 5,234.73 3,818.63
Total Other Comprehensive Income/ Loss (B) (39.54) (32.95) (39.54) (32.95)
Total Comprehensive Income for the financial year (A+B) 5,297.56 3,887.03 5,195.19 3,785.68
Earnings Per Share (EPS in Rupees)
From Continuing Operations
Basic 39.41 30.31 38.63 29.53
Diluted 39.41 30.31 38.63 29.53
From Discontinuing Operations
Basic 1.72 - 1.72 -
Diluted 1.72 - 1.72 -

•Previous years figures are restated, regrouped, rearranged and recast, wherever considered necessary.

• BUSINESS OVERVIEW

The financial year 2020-21 in India and globally has been gripped by COVID-19 pandemic. Many businesses and manufacturing and service facilities faced challenges to resume the operations after the lockdown declared by the Central and State Government. There has been no material adverse impact on the Companys performance and financials position as a result of COVID-19 outbreak in the country except suspension of manufacturing operations during the lockdown period, resulting in delay of deliveries of the products to the customers and incurrence of fixed costs (salaries, overheads, etc.) for the period during which the manufacturing operations were suspended. The resumption of manufacturing and other operations with restricted manpower (in line with the regulatory guidelines) had a short-term impact on the overall output and efficiency of operations of your Company.

The outbreak of the Covid-19 pandemic globally and in India caused slowdown of economic activity in the month of March 2020. The Companys production was shut down for a few days in March 2020 as well as in the quarter ended June 2020. Based on several management actions and general positive outlook among the user industries, the Company continued to grow despite the challenging economic conditions during the financial year ended 31st March, 2021. Further, during the months of March 2021 to May 2021, the country has witnessed a second wave of Covid-19 infections. Due to the restrictions imposed by the authorities, the Company had limitations in operations caused by regional lockdowns, unavailability of oxygen, manpower shortages, logistic issues and other related restrictions. The Company is taking several measures to minimise the financial impact of the second wave of Covid-19 infections.

However, despite facing the challenges consequent to COVID - 19 pandemic, your Company strived to maintain a robust performance and achieved an enhanced sales turnover of Rs. 42071.11 Lakhs as against Rs. 38,738.01 Lakhs during the previous year (growth of 8.60% over previous year) and earned a Net Profit after Tax of Rs. 5234.73 Lakhs as against Rs. 3,818.63 Lakhs during the previous year (growth of 37.08% over previous year). 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 and support of the Company personnel.

The continued improvement in the economic outlook for the Active Pharmaceutical Ingredients and Chemicals sector, the key customer segments for your Company, also enhances the optimism for the coming years.

The Board of Directors had resolved for the closure and winding down of the Chemical Business operations. The profit after tax reflecting performance of the discontinuing operations have been stated in the aforesaid financial highlights for the year ended 31st March, 2021.

• DISCLOSURES RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

H L Equipments ("HLEQ" or "the Firm") is a Partnership Firm, in which your Company owns 99% ownership interest. HLEQs 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. 77.94 crores (previous year Rs. 52.05 crores) for the year ended 31st March, 2021 and earned EBITDA of Rs. 14.50 crores (previous year Rs. 8.73 crores) for the same period. The Firm has a good order book at the year end, which provides a promising visibility of revenue for FY22.

• DIVIDEND

Your Directors are pleased to recommend a Dividend of Rs. 4 (@40%) per equity share of face value of Rs. 10/- each for the financial year ended 31st March, 2021. The Dividend, subject to the approval of Members at the Annual General Meeting scheduled to be held on 7th September, 2021, 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 cumulative, redeemable preference share for the year 2020-21.

Your Company has entered into list of top 500 listed companies as on 31st March, 2021. Accordingly, Dividend Distribution Policy has been formulated and approved by the Board of the Company, which shall be effective from 12th June, 2021.

• TRANSFER TO RESERVES

The Board of Directors of your Company has decided to transfer Rs. 2000 Lakhs to General Reserve for the year under review.

• SHARE CAPITAL

Your Companys paid-up Share Capital as on 31st March, 2021 was Rs. 14.57 crores, comprising of 1,30,75,480 equity shares of Rs. 10 each, fully paid up and 18,75,152 9.50% non-convertible, cumulative, redeemable preference shares (NCCRPS) of Rs. 8 each, fully paid up.

During the financial year under review, your Company has 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.

During the financial year under review, your Company has issued and allotted securities comprising of 5,77,616 convertible warrants and 1,44,404 equity shares of the Company, details of which are as under:

S. No. Name of the Investor Nature and number of securities Price of each security
1. Malabar India Fund Limited, a category I foreign portfolio investor ("Foreign Investor") Upto 2,69,638 (Two Lakh Sixty Nine Thousand Six Hundred and Thirty Eight) Convertible Series A Warrants ("FPI Series A Warrants") Rs. 1,385 (Rupees One Thousand Three Hundred and Eighty-Five only) per FPI Series A Warrant, including a premium of Rs. 1,375 (Rupees One Thousand Three Hundred and Seventy Five only)
Upto 1,92,455 (One Lakh Ninety Two Thousand Four Hundred and Fifty Five) Convertible Series B Warrants ("Series B Warrants") Rs. 1,385 (Rupees One Thousand Three Hundred and Eighty-Five only) per Series B Warrant, including a premium of Rs. 1,375 (Rupees One Thousand Three Hundred and Seventy Five only)
Upto 1,44,404 (One Lakh Forty Four Thousand Four Hundred and Four) Equity shares of the Company ("Ordinary Shares") Rs. 1,385 (Rupees One Thousand Three Hundred and Eighty-Five only) per Ordinary Share, including a premium of Rs. 1,375 (Rupees One Thousand Three Hundred and Seventy Five only)
2. Malabar Value Fund - scheme launched under Malabar Investment Trust (SEBI registered AIF category III trust) ("Indian Investor"), represented by the key managerial personnel Mr. Sumeet Nagar and Mr. Akshay Mansukhani Upto 1,15,523 (One Lakh Fifteen Thousand Five Hundred and Twenty Three) Convertible Series A Warrants ("AIF Series A Warrants") Rs. 1,385 (Rupees One Thousand Three Hundred and Eighty Five only) per AIF Series A Warrant, including a premium of Rs. 1,375 (Rupees One Thousand Three Hundred and Seventy Five only)

The proceeds from the Preferential Issue of Convertible Warrants and Equity Shares as above are being fully utilised for the purpose as stated in the Offer Letter.

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 has not bought back its shares, pursuant to the provisions of Section 68 of Companies Act, 2013 and Rules made thereunder.

The Company has not issued Equity Shares with differential rights as to dividend, voting or otherwise, pursuant to the provisions of Section 43 of Companies Act, 2013 and Rules made thereunder during the year.

During the year, the Company has not made any provisions of money or has 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 has 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 2020-21, and as such no amount of principal or interest on deposit from public or Members, was outstanding as of the Balance Sheet date. Pursuant to the Scheme and the demerger of the Operating Business of HLE Engineers Private Limited, certain unsecured loans forming part of the demerged undertaking have been transferred to the Company. These loans have been repaid over a period and will not be renewed by the Company.

• 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 "BBB+" (for long term facilities) and A2 (for short-term facilities) with a stable outlook.

The details of credit ratings obtained by the Company are placed on the Companys website: www.hleglascoat.com.

• 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 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 2020-21 and in accordance with the provisions of Sections 124 and 125 of the Companies Act, 2013 and the Rules made thereunder:

• Dividend amount of Rs. 4.60 Lakhs pertaining to the financial year 2019-20, 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. 3.18 Lakhs have been transferred to the IEPF Authority towards the final equity dividend declared for financial year 2019-20 in the Annual General Meeting held on 19th September, 2020, for the 1,31,104 equity shares held by the IEPF Authority in the financial year 2020-21 .

• 7,826 equity shares of Rs. 10 each have been transferred to the IEPF Authority after compliance of due procedures as prescribed and 100 shares have been claimed by the Shareholders from the IEPF Authority in financial year 2020-21.

• RELATED PARTY TRANSACTIONS

Your Company has adopted a policy on Related Party Transactions and the said Policy is available in Policies section on www.hleglascoat.com by accessing the web- link https://hleglascoat.com/corporate-governance/.

During the financial year under review, your Company has entered into related party transactions on an arms 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 Audit Committee and Board, for their approval. Prior approval/s of the Audit Committee/ Board 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 is vigilant 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 2020-21 has been uploaded on the Companys website: www.hleglascoat.com , 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 4 November 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 follows well-established and detailed risk assessment and minimisation procedures, which are periodically reviewed by the Board.

Your Company recognizes the importance of managing risk in the business to sustain growth. The Board of Directors, along with the senior management of your Company, has developed and approved the Risk Management Policy, 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. operational risk, financial risk, regulatory risk, reputational risk, etc. Your Company has entrusted the Audit Committee with the responsibility of implementing and monitoring of the Risk Management Policy on a periodic basis.

The main objective of this Policy is to ensure sustainable business growth with stability and to promote a proactive approach in reporting, evaluating and resolving risks associated with the Companys business & processes. In order to achieve the key objective,

The risks faced by the Company and the various measures taken by the Company are detailed in Management Discussion and Analysis section. An extract of Risk Management Policy is available on Companys website by accessing the web-link: https://hleglacoat.com/corporate-governance/

• 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) t he 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. Harsh Patel (DIN 00141863), 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. Harsh Patel has been given in the Notice convening the Annual General Meeting.

The day-to-day operations of your Company are managed by its Key Managerial Persons ("KMP") viz. the Managing Director, Executive Director (Technical), the Chief Financial Officer and the Company Secretary. As required under the provisions of Section 203 of the Act, 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 and Ms. Dhwani Shah, Company Secretary are the Key Managerial Personnel of your Company as on the date of this Report.

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. Salient features of the said Policies are provided as an annexure hereto, which forms part of this Report. The Policy is available on the Companys website: www.hleglascoat.com in Policies section by accessing the web-link: https://hleglacoat.com/ corporate-governance/

• BOARD OF DIRECTORS AND COMMITTEES FORMED THEREUNDER

The Board of Directors has constituted the following Committees:

1. Audit Committee

2. Stakeholders Relationship Committee

3. Nomination and Remuneration Committee

4. Corporate Social Responsibility 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.

• CONFIRMATION BY INDEPENDENT DIRECTORS

The Independent Directors have confirmed that they have registered their names in the data bank maintained with the Indian Institute of Corporate Affairs (MCA). In terms of Section 150 of the Act read with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Rules, 2014, the Independent Directors are required to undertake online proficiency self-assessment test conducted by the IICA within a period of two years from the date of inclusion of their names in the data bank. The Independent Directors to whom the provisions of proficiency test are applicable, will take the said online proficiency self-assessment test in due course.

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 2020-21, 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 Companys Policy for Performance Evaluation of Directors. Performance evaluation sheets were distributed prior to the Meeting dates. The outcome of the above exercise of performance evaluation of all the Directors collectively and individually and the Board/ Committees was announced in the respective Meetings.

(i) The Board, in its Meeting held on 12th February, 2021, has carried out the evaluation task of the Committees formed by the Board and the Independent Directors individually for the period from 1st January, 2020 to 31st December, 2020. 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 11th February, 2021, 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 1st January, 2020 to 31st December, 2020. 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 Companys requirements.

(iii) The Nomination and Remuneration Committee, in its Meeting held on 12th February, 2021, 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 1st January, 2020 to 31st December, 2020. 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 Executive Directors were capable and the results of the evaluation were satisfactory and adequate to meet your Companys 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 and is available on the Companys website: www.hleglascoat.com 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 Companys CSR Policy, total amount to be spent under the CSR Policy for the financial year 2020-21, 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 2020-21, 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 Companys website: www.hleglascoat.com.

• 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.

Following is a summary of sexual harassment complaints received and disposed off during the financial year 2020-21.

No. of complaints not resolved as on 1st April, 2020: Nil

No. of complaints received in financial year 2020-21: Nil

No. of complaints resolved in financial year 2020-21: Nil

No. of complaints pending as on 31st March, 2021: Nil

• MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY

Your Company has approved in Board Meeting dated 5th May, 2021 conversion of 385,161 Series A Warrants into 385,161 Equity Shares of Rs. 10 each at a premium of Rs.1375 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 01st December, 2020.

Except as stated above, 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 Companys policies, safeguarding of Companys 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 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., Chartered Accountants, Mumbai (Firm Registration No. 107122W) have been appointed as the Statutory Auditors of your Company for a tenure of 5 (five) years from 28th August, 2017. The Auditors have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Auditors Report given by M/s. M. M. Nissim & Co, Statutory Auditors, on the Financial Statements of your Company, for the year ended 31st March, 2021, forms part of the Annual Report. There is no qualification, reservation or adverse remark or any disclaimer in their Report.

In accordance with the Section 40 of the Companies (Amendment) Act, 2017 (corresponding to Section 139 of the Act), the requirement of ratification of the appointment of the Statutory Auditor in every Annual General Meeting of the Company during the tenure of appointment has been dispensed with. Hence, the matter has not been placed as an agenda item in the AGM Notice for the approval of the shareholders.

• 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 AUDITOR AND SECRETARIAL AUDIT REPORT

The Company has appointed M/s. D. G. Bhimani and Associates, Practising Company Secretaries (C P No. 6628) as the Secretarial Auditors for the financial year 2020-21 in accordance with Section 204 of the Act. The Report on Secretarial Audit for the financial year 2020-21, in Form MR- 3, is annexed hereto 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, Practising Company Secretaries (C P No. 6628), as the Secretarial Auditors for the financial year 2021-22. The Company has received the consent 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. The Company has also voluntarily adopted other applicable Secretarial Standards issued and made effective by the Institute of Company Secretaries of India.

• INTERNAL AUDITORS

CNK & Associates LLP, Chartered Accountants (Firm Registration No. 101961W) has conducted the internal audit of your Company for the Anand works for the financial year 2020-21;and AKMK Associates, Chartered Accountants (Firm Registration No.: 136206W) has conducted the internal audit of your Company for the Maroli works for the financial year 2020-21.

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 2021-22. The Company has received the consent from them 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 2020-21 of the said records has been carried out by M/s Nanty Shah & Associates, Cost Accountants (Membership No. 31497), the Cost Auditor appointed by the Company.

Further, the Company has appointed M/s. Nanty Shah & Associates, Cost Accountants (Membership No. 31497) as the Cost Auditor of the Company for the financial year

2021- 22. 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 2021-22 as per details provided in the Notice of the ensuing Annual General Meeting.

• LISTING ON NSE LIMITED

National Stock Exchange Limited (NSEL) has suo moto allowed trading of Companys equity shares on their platform vide their circular dated 18th February, 2021, since the market cap of the Company increased, with effect from 18th February, 2021.

• 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 Companys operations in future.

Your Company does not have any subsidiaries, joint ventures or associate companies except M/s H L 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. The consolidated financial statements are also being presented in addition to the standalone financial statement of your Company.

During the year under review, there were 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 Companys customers, vendors, investors, business associates, bankers and other stakeholders for their continued support. Your Directors also take this opportunity to applaud thecontributionsmadebyalltheemployeestotheoperationsof your Company for its continued growth and success.

By the Order of the Board of
HLE Glascoat Limited
(formerly Swiss Glascoat Equipments Limited)
Sd/-
Mr. Himanshu Patel
Chairperson and Managing Director
Date: 12th June, 2021 (DIN: 00202312)