Hittco Tools Director Discussions


To,

The Members,

Your directors have pleasure in presenting the 29th Annual Report of your Company together with the Audited Financial Statements

for the year ended 31s1 March 2023.

FINANCIAL RESULTS:

The summarized financial results for the year are as under:

Particulars 2022-2023 2021-2022
INCOME:
Sales 700.67 657.25
Other Income 3.94 9.12
Total (A) 704.61 666.38
EXPENSES:
Cost of Material Consumed 277.57 235.65
Changes in inventories of finished goods, work in progress and stock-in-trade -10.76 5.38
Employee benefit expenses 155.20 151.57
Interest and Financial Charges 24.98 26.50
Other expenses 122.17 112.01
Total (B) 569.16 531.11
Profit before Depreciation and Tax (C) = (A) - (B) 135.45 135.27
Depreciation and amortization expenses 77.26 60.90
Profit after Depreciation 58.19 74.17
Exceptional items - Net Income / Expenditure 0 0
Profit before Tax 58.19 74.17
Provision for Tax 3.74 0
Profit for the period from continuing operation 61.91 74.17
Other comprehensive income (Re-measurement of defined benefit obligation / Assets) -1.30 4.71
Profit / (Loss) after Depreciation and Tax 60.61 78.88
Earnings Per Share (Basic) 1.00 1.31
Earnings Per Share (Diluted) 1.00 1 31

OPERATIONS AND BUSINESS PERFORMANCE:

During the year under review the ineome of the Company increased to Rs.704.61 lakhs during the year 2022-23 as against Rs. 666.38 lakhs during the previous year 2021-22. The Export Sales for the year 2022-23 is Nil as compared to Rs. 15.74 lakhs in the previous financial year 2021-22. Regarding accountability and governance, your company continue to erasure an environment of transparency and responsibility while aiming for the highest standard of corporate governance and trust. There is no change in the nature of business of the company during the year.

ANNUAL RETURN:

In terms of Section 92(3) of the Companies Act. 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return in form MGT-7 of the Company is available on the website of the Company at the link: https://www.hittco.com.

STATEMENT OF DECLARATION BY INDEPENDENT DIRECTORS:

All the Independent Directors of the Company have given declaration that they meet the criteria of independence as provided in Sub-Section (6) of Section 149 of the Companies Act. 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and they are not aware of any circumstances or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

The Board of Directors have taken on record tire declaration and confirmation received from the Independent Directors and verified the veracity of such disclosures.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:

The independent directors are regularly updated on the industry and market trends, plants and process and operation performance of the company through presentations hi this regard and periodic plant visit. They are also periodically kept aware of the latest development in the corporate governance, their duties as a director and relevant laws.

NOMINATION & REMUNERATIONN POLICY:

In adherence to the provisions of Section 134(3) (e) and 178 (1) & (3) of the Companies Act, 201.3. the Board of Directors on the recommendation of the Nomination and Remuneration Committee approved the policy to govern the appointment /Nomination of Directors, KMP and Other Senior Management and their remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided. There is no change in the Nomination and Remuneration Policy during the year under review.

CORPORATE GOVERNANCE:

Your Company has a Paid-Up Share Capital of Rs. 603.60 Lakhs and the net worth of Rs. 266.71 Lakhs during the financial year ending 31.03.2023. Hence, Regulation 27(2) of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 are not applicable on the Company and your Company is not required to report on the Corporate Governance. However, your company has made every effort to comply with the provisions of the Corporate Governance and to see that the interest of the shareholders and the Company are properly served.

MANAGEMENT DISCI SSION & ANALISYS REPORT:

A review of the performance of the Company is provided in the Management Discussion & Analysis Report for the year under review, as stipulated under SEBI (LODR) Regulation, 2015, is presented in a separate section forming part of the Annual Report and annexed herewith as Annexure 2.

DIVIDEND:

The Board of Directors has decided not to recommend any dividend for the financial year ended March 31,2023 due to expansion and future growth of the business.

TRANSFER TO RESERVES:

The Board of Directors of your Company does not propose to carry any amount to reserve.

SHARE CAPITAL:

The paid-up Equity Share Capital of the Company as on March 31, 2023, was Rs. 60,360,470/- During the year under review, the Company has not issued any shares during the period under review.

SUBSIDIARY, JOINT VENTURES AND ASSOCIATE REPORT

During the year under review, no company have become or ceased to be companys subsidiaries, joint ventures, or associate companies.

MATERIAL CHANGES AND COMMITMENTS:

There have been no material changes and commitments, affecting the financial position of the company occurring between the end of financial year and the date of the report.

DIRECTORS RESPONSIBILITY STATEMENT:

To the best of their knowledge and based on the guidance and insights from the Auditors and pursuant to the provisions of sub-section (5) of Section 134 of the Companies Act, 2013, your Directors confirm that:

i) In the preparation of the annual account for the year ended March 31, 2023 the applicable accounting standard have been followed along with proper explanation relating to material departure if any.

ii) Such accounting policies have been selected and applied 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 on March 31,2023 and of the profit and loss of tire company for that period;

iii) Proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provision of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) The financial statements have been prepared on a going concern basis.

v) Proper internal financial controls were in place and the financial controls were adequate and operating effectively; and

vi) The system to ensure compliance with the provision of all applicable laws were in place and adequate and operating effectively.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SEC TION 143(12):

During the year under review, there were no frauds reported by the auditors to the Audit Committee or the Board imder Section 143(12) of the Companies Act, 2013.

CHANGES IN DIRECTORS:

Appointments

During the year under review, the Board of Directors, based on the recommendation of Nomination and Remuneration Committee, appointment of Mr. Yash Vardhan Bhandari as a CFO of the Company in the meeting held on 14.11.2022.

During the year under review, the Board of Directors, based on the recommendation of Nomination and Remuneration Committee, appointed of Mrs. Nidhi Kumari as a CS (Company Secretary7) and Compliance Officer of the company in the meeting held on 12.08.2022.

During the year under review, the Board of Directors, based on the recommendation of Nomination and Remuneration Committee, appointed of Ms. Preeti Saxena as a CS (Company Secretary) and Compliance Officer of the company in the meeting held on 23.12.2022.

Resignation

Mrs. Ruth Mary Chita J resigned from the office of Chief Financial Officer of the Company w.e.f 07lh November, 2022.

Ms. Priya Mehrotra resigned from the office of Company Secretary7 and Compliance Officer of the Company w.e.f. 12.07.2022.

The Board, at its meeting held on 12th August, 2022, has accepted her resignation w.e.f. 12.07.2022 and recorded its appreciation for his valuable contribution during his tenure on the Board of the Company.

Mrs. Nidhi Kumari resigned from the office of Company Secretary7 and Compliance Officer of the Company w.e.f. 15.10.2022.

The Board, at its meeting held on 23,tl December, 2022, has accepted her resignation w.e.f. 15.10.2022 and recorded its appreciation for his valuable contribution during his tenure on the Board of the Company.

Re-appointment:

In accordance with the provisions of Section 152 of the Companies Act, 2013 and Article of Association, Mr. Yash Vardhan Bhandari, Director of the Company, retire by rotation in ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

CHANGES IN KEY MANAGERIAL PERSONEL:

During the year under review, Ms. Priya Mehrotra resigned from the office of Company Secretary7 of the Company w.e.f. 12.07.2022 and Mrs. Nidhi Kumari was appointed as the Company Secretary7 of the Company w.e.f. 01.08.2022.

During tire year under review, Mrs. Nidhi Kumari resigned from tire office of Company Secretary of the Company w.e.f. 15.10.2022 and Ms. Preeti Saxena was appointed as the Company Secretary7 of the Company w.e.f. 01.12.2022.

Mr. Yash Vardhan Bhandari was appointed as Chief Financial Officer of tire company by tire board in the meeting held on 14.11.2022.

MEETING OK THE BOARD

Six meeting of the Board of Directors were held during the year mrder review. Details of the same are mentioned below:

S. No. Date of Meeting

Directors associated as on the date of Meeting

Attendance

No. of Director % of attendance
1. 30/05/2022 8 8 100
2 12/08/2022 8 7 87.5
3. 14/11/2022 8 8 100
4. 23/12/2022 8 7 87.5
5. 08/02/2023

(Adjourned)

8 8 100
6. 13/02/2023 8 8 100

Audit Committee:

The composition, function and procedure of the Audit Committee and Nomination and Remuneration Committee are in conformity with the requirement of Section 177 & 178 of the Companies Act, 2013. During the year under review, the Board accepted all the recommendation made by the Audit Committee of the Board. The Audit Committee met Four times and Nomination and Remuneration Committee met Four times in the year under review on the following dates:

S. No.

Date of Meeting

No. of Members associated on the date of Meeting

Attendance

No. of Member % of Attendance
1. 30/05/2022 3 3 100
2. 12/08/2022 3 3 100
3. 14/11/2022 3 3 100
4. 13/02/2022 3 3 100

Nomination and Remuneration Committee:

S. No. Date of Meeting

No. of Members associated on the date of Meeting

Attendance

No. of Member % of Attendance
1. 30/05/2022 3 3 100
2. 11/08/2022 3 3 100
3. 13/11/2022 3 3 100
4. 23/12/2022 3 3 100

PERFORMANCE EVALUATION OF CHAIRMAN, DIRECTORS. BOARD AND COMMITTEES:

Pursuant to the provision of Section 134 of the companies Act 2013 and regulation 17 of the SEBI (Listing Obligation and Disclosure Requirement) Regulation 2015, the board has carried out an annual perfonnance Evaluation of its performance, the director individually as well as the evaluation of its Audit, Nomination and Remuneration and Other committee.

The performance of the Board was evaluated by the board after seeking inputs from all the directors on the basis of factors which includes Active participation, financial literacy, contribution by Directors, Positive inputs, effective deployment, knowledge & expertise, integrity and maintenance of confidentiality and independence of behaviour and judgement. In the meeting of Independent Directors performance of Non-independent Directors, Board and performance of the Chairman was evaluated. The performance of independent director was carried out by the entire board.

At the conclusion of the evaluation exercise, the members of the Board accessed that the Board together with each of its committees was working effectively in performance of its key functions.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. Further the testing of such controls was also carried out independently by the statutory and the internal auditor for the financial year 2022-23. In the opinion of the Board, the existing internal control framework is adequate and commensurate with the size and nature of the business of the Company. The details in respect of internal financial control and their adequacy are included in the management and discussion & analysis report, which forms part of this report.

AUDITORS AND AUDITORS REPORT:

Statutory Auditors

In accordance with Sec 139 of the Companies Act, 2013, M/s. Bothra Nirmal Associates (FRN: 322103E), Chartered Accountant were appointed by the shareholders of the Company at the Annual General Meeting held on September 13, 2021, as Statutory Auditors for a period of 5 years to hold office from the conclusion of the 27Th Annual General Meeting till the conclusion of 32nd Annual General meeting to be held in the year 2026.

The Ministry of Corporate Affairs vide its Notification dated May 7. 2018. has dispensed with the requirement of ratification of Auditors appointment by the shareholders, every year. Hence, approval of the Members for the ratification of Auditors appointment is not being sought at the ensuing Annual General Meeting.

Statutory Auditors Report

Auditor Qualification

Notes to accounts referred to in the Auditors Report are self — explanatory and therefore, do not call for any further explanation. However the following has not been recognized as explained below:

Auditors Comment:

1. The finished goods and work in progress have been valued at estimated cost. We are unable to obtain Sufficient and appropriate audit evidence about approximation of the estimated cost to the actual cost. As Required by the lnd AS - 2 "Inventories" from the records maintained by the company. Consequently, wre are unable to determine the impact of the same on the financial statements for the year end 31s1 March 2023.

Director View on Auditor Adverse remark:

The company lias maintained proper book of account including inventory and the same has been provided to statutory auditor during the audit. Hence the view of audit qualification is unnecessary.

2. Balance confirmations have not been received from Trade receivables, other financial assets and Other Financial liabilities against balance outstanding as on 31st March 2023. In the absence of such confirmations, we are unable to comment on the impact arising out of reconciliation/ adjustments, if any, on the financial statements for the year end 31 st March 2023.

Director View on Auditor Adverse remark:

The company has maintained proper book of account and same has been provided to statutory auditor during the audit. Balance confirmations provided to auditor. Hence the view of audit qualification is unnecessary.

SECRETARIAL AUDITOR REPORT

Secretarial Auditor

The Secretarial Auditors, M/s Manjeet & Associates, Practising Company Secretaries, has issued Secretarial Audit Report (Form MR-3) for the Financial Year 2022-23 pursuant to Section 204 of the Companies Act, 2013 and pursuant to Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which is annexed to Directors Report (Refer Amiexure-3).

Secretarial Auditors Report:

The observations in Secretarial audit report are self -explanatory and therefore does not call for any further explanation.

COST AUDITORS:

The provision of Section 148(1) does not apply to the Company, hence the Company is not required to maintain the cost records.

INTERNAL AUDITOR:

The Board has appointed Internal Auditor in compliance with Section 138 of the Companies Act, 2013 and rules made thereunder.

RISK MANAGEMENT:

The Company has a mechanism to identify, assess, monitor, and mitigate various risks to its key business objective. Major risks identified by the business and functions are systematically addressed through mitigating actions on a continuing basis. However, as per tlie listing regulation, constitution of Risk Management Committee for enforcing Risk Management Policy is not applicable to the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE:

No significant and material orders were passed by the Regulators or Courts or Tribunal w hich impact the going concern status and future operations of the Company.

There is No application /proceeding pending against the Company under the Insolvency and Bankruptcy Code, 2016.

INDIAN ACCOUNTING STANDARDS. 2015:

The annexed financial statements for the Financial Year 2022-23 and corresponding figures for 2022-23 comply in all material aspects with Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.

CORPORATE SOCIAL RESPONSIBILITY (C SR):

As the Company does not fall under any of the threshold limits given under Section 135 of the Companies Act,

2013, the provision of Corporate Social Responsibility is not applicable to the Company.

CONTRACTS AND ARRANGEMENT WITH RELATED PARTIES:

All related party transaction that were entered into during the financial year were on arms length basis and were in tile ordinary course of business. There is no material contract or arrangement in accordance with the requirement of SEBI (Listing Obligation and Disclosure Requirement) Regulation 2015.

There is no materially significant related party transactions made by the company with the Promoter, Director, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the company at large. All related party transaction is placed before the audit committee and given in the notes annexed to and fonning part of this financial statement.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The company has a vigil mechanism / Whistle Blower policy to deal with the instance of fraud and mismanagement, if any. It provides opportunities to the directors, employees and any other person dealing with the company to report in good faith to the management about the unethical and improper practices, fraud or violation of Companys code of conduct. The vigil mechanism under the policy also provides for adequate safeguard agaiast victimization of employee and directors who use such mechanism and makes provision for direct access to the Chairman of the Audit Committee in exceptional Cases. The Company affinns that none of the personnel of the Company has been denied access to the Audit Committee.

Further, as per the provisions of Regulation 18 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 (Listing Regulations) read with Part C of Schedule II to Listing Regulations, the Audit Committee has reviewed the functioning of whistle blower mechanism of the Company and found the same satisfactory

PUBLIC DEPOSITS:

During the year under review, the Company lias not accepted/renewed any deposit from the public within the meaning of section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules,

2014.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclose under the act are provided in Annexure-1.

PARTICULAR OF LOAN GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED:

During the financial year 2022-23 the company has neither made any investment nor given any loans or guarantee covered under the provision of Section 186 of the Companies Act, 2013.

PERSONNEL RELATIONS:

The Company considers human capital as a critical asset and success factor for smooth organizational workflow. Your directors hereby place on record their appreciation for the service rendered by the executives, staff, and workers of the Company for their hard work, dedication, and commitment. During the year under review, relations between the employee and the management continued to remain cordial.

PARTICULAR OF EMPLOYEES AND RELATED DISCLOSURE:

No employee of the Company had drawn salary in excess of the limits specified under Section 197(12) of the Companies Act, 2013 and the rule 5 of the company (Appointment and Remuneration of managerial personnel) rules 2014 and read with the Companies (Particular s of Employees) Rules, 197.

LISTING ON STOCK EXCHANGE:

The Companys shares are listed on the Bombay Stock Exchanges, Mumbai. The Company has paid the listing fee to the stock exchange for the financial year 2022-23 and lias complied with all the requirement of the listing regulations.

DISCLOSURE AS REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSED ACT 2013:

Pursuant to the provisions of Section 22 of the Sexual Harassment of Women at Workplace (Prevention. Prohibition and Redressal) Act, 2013 read with Rule 14, the internal committee constituted under the said act has confirmed that no complaint / case has been filed / pending against the Company during the year.

SECRETARIAL STANDARD:

The Company complies with all applicable mandatory secretarial standard issued by the Institute of Company Secretaries of India.

CODE OF CONDUCT:

The Company has adopted the code of conduct for all Board members and Senior Management as required under Regulation 17 of the Listing Regulations. All Board Members and Senior Management personnel have affinned compliance with the code on an annual basis and a declaration to this effect signed by Mr. Rajib Ghosh Roy, CEO of the Company, forming part of this report.

CEO/CFO CERTIEICATION:

A certificate duly signed by CEO and CFO relating to financial statements and internal controls and internal control systems for financial reporting as per the fonnat provided in Regulation 17(8) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 was placed before the Board and was taken on record.

CAUTIONARY NOTE:

Statement in this Management Discussion Analysis Report describing the Companys objectives, projections, estimates and expectations may be forward looking statement within the meaning of applicable laws and regulation. Actual results may differ substantially or materially from those expressed or implied. Important development that could alter your Companys performance include increase in material costs, technology development and significant changes in political and economic environment tax laws and labor relations.

ACKNOWLEDGEMENTS:

Your Directors would like to place on record their sincere gratitude to the Governments, Financial Institutions and Banks for the assistance, co-operation and encouragement received during the year. Your Directors also wish to place on record their sincere appreciation to tire Investors for their continuing support. Dealers, Business Associates and Employees at all levels for their unstinting efforts in ensuring excellent performance.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS HITTCO TOOLS LIMITED

Sd/- Sd/-
(Surendra Bhnndari) (Madhu Bhandari)
Managing Director Director
DIN: 00727912 DIN: 00353298
Place: Bangalore
Date: 22/07/2023