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HLE Glascoat Ltd.

BSE: 522215 Sector: Engineering
NSE: HLEGLAS ISIN Code: INE461D01010
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NSE 00:00 | 22 Oct 6608.80 -209.40
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OPEN 6830.00
PREVIOUS CLOSE 6811.20
VOLUME 3661
52-Week high 7549.00
52-Week low 1291.00
P/E 149.31
Mkt Cap.(Rs cr) 9,006
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Sell Price 0.00
Sell Qty 0.00
OPEN 6830.00
CLOSE 6811.20
VOLUME 3661
52-Week high 7549.00
52-Week low 1291.00
P/E 149.31
Mkt Cap.(Rs cr) 9,006
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

HLE Glascoat Ltd. (HLEGLAS) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 30th Annual Report together withthe 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 48448.93 42640.87 42071.11 38738.01
Other Income 393.32 480.29 1200.33 924.61
Total Income 48842.35 43121.16 43271.44 39662.62
Profit before Finance Costs Depreciation Exceptional Items Extraordinary Items and Tax 9558.77 7623.15 8929.07 7199.72
Less: Finance Costs 973.70 1222.22 943.35 1183.38
Profit before Depreciation Exceptional Items Extraordinary Items and Tax 8585.07 6400.93 7985.72 6016.34
Less: Depreciation/ Amortisation/ Impairment 860.99 744.43 836.55 722.42
Profit before Exceptional Items Extraordinary Items and Tax 7724.08 5656.50 7149.17 5293.92
Less: Exceptional Items and Extraordinary Items - - - -
Profit before Tax 7724.08 5656.50 7149.17 5293.92
Less: Current Tax net of earlier year adjustments 2396.05 1673.49 1926.53 1411.49
Less: Deferred Tax (9.07) 63.03 (12.09) 63.80
Profit after tax for the financial year (A) 5337.10 3919.98 5234.73 3818.63
Profit for the financial year from Continuing Operations 5113.99 - 5011.62 -
Profit for the financial year from Discontinuing Operations 223.11 - 223.11 -
Profit for the financial year (A) 5337.10 5234.73 3818.63
Total Other Comprehensive Income/ Loss (B) (39.54) (32.95) (39.54) (32.95)
Total Comprehensive Income for the financial year (A+B) 5297.56 3887.03 5195.19 3785.68
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 year's figures are restated regrouped rearranged and recast whereverconsidered 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 theoperations after the lockdown declared by the Central and State Government. There has beenno material adverse impact on the Company's performance and financials position as aresult of COVID-19 outbreak in the country except suspension of manufacturing operationsduring the lockdown period resulting in delay of deliveries of the products to thecustomers and incurrence of fixed costs (salaries overheads etc.) for the period duringwhich the manufacturing operations were suspended. The resumption of manufacturing andother operations with restricted manpower (in line with the regulatory guidelines) had ashort-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 economicactivity in the month of March 2020. The Company's production was shut down for a few daysin March 2020 as well as in the quarter ended June 2020. Based on several managementactions and general positive outlook among the user industries the Company continued togrow despite the challenging economic conditions during the financial year ended 31stMarch 2021. Further during the months of March 2021 to May 2021 the country haswitnessed a second wave of Covid-19 infections. Due to the restrictions imposed by theauthorities the Company had limitations in operations caused by regional lockdownsunavailability of oxygen manpower shortages logistic issues and other relatedrestrictions. The Company is taking several measures to minimise the financial impact ofthe second wave of Covid-19 infections.

However despite facing the challenges consequent to COVID - 19 pandemic your Companystrived to maintain a robust performance and achieved an enhanced sales turnover of Rs.42071.11 Lakhs as against Rs. 38738.01 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.3818.63 Lakhs during the previous year (growth of 37.08% over previous year). YourDirectors attribute this improved performance apart from the market growth and externalfactors to various steps taken by the management in multiple facets of the business viz.increased manufacturing capacity improvements in production processes improved planningfocus on timely delivery and better marketing coverage and support of the Companypersonnel.

The continued improvement in the economic outlook for the Active PharmaceuticalIngredients and Chemicals sector the key customer segments for your Company alsoenhances the optimism for the coming years.

The Board of Directors had resolved for the closure and winding down of the ChemicalBusiness operations. The profit after tax reflecting performance of the discontinuingoperations have been stated in the aforesaid financial highlights for the year ended 31stMarch 2021.

• DISCLOSURES RELATING TO SUBSIDIARIES ASSOCIATES AND JOINT VENTURES

H L Equipments ("HLEQ" or "the Firm") is a Partnership Firm inwhich your Company owns 99% ownership interest. HLEQ's manufacturing facility is locatedat Silvassa and is equipped with all key equipment critical for the chemical equipmentfabrication.

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 theyear 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 offace value of Rs. 10/- each for the financial year ended 31st March 2021. TheDividend subject to the approval of Members at the Annual General Meeting scheduled to beheld on 7th September 2021 will be paid within the time period stipulatedunder 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 cumulativeredeemable preference share for the year 2020-21.

Your Company has entered into list of top 500 listed companies as on 31stMarch 2021. Accordingly Dividend Distribution Policy has been formulated and approved bythe 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 toGeneral Reserve for the year under review.

• SHARE CAPITAL

Your Company's paid-up Share Capital as on 31st March 2021 was Rs. 14.57crores comprising of 13075480 equity shares of Rs. 10 each fully paid up and1875152 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 valueof 9.50% Non-Convertible Cumulative Redeemable Preference Shares at a premium of Rs.189.38per share as per the terms of issue out of the profits of the Company in accordance withSection 55 of the Companies Act 2013.

During the financial year under review your Company has issued and allotted securitiescomprising of 577616 convertible warrants and 144404 equity shares of the Companydetails 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 269638 (Two Lakh Sixty Nine Thousand Six Hundred and Thirty Eight) Convertible Series A Warrants ("FPI Series A Warrants") Rs. 1385 (Rupees One Thousand Three Hundred and Eighty-Five only) per FPI Series A Warrant including a premium of Rs. 1375 (Rupees One Thousand Three Hundred and Seventy Five only)
Upto 192455 (One Lakh Ninety Two Thousand Four Hundred and Fifty Five) Convertible Series B Warrants ("Series B Warrants") Rs. 1385 (Rupees One Thousand Three Hundred and Eighty-Five only) per Series B Warrant including a premium of Rs. 1375 (Rupees One Thousand Three Hundred and Seventy Five only)
Upto 144404 (One Lakh Forty Four Thousand Four Hundred and Four) Equity shares of the Company ("Ordinary Shares") Rs. 1385 (Rupees One Thousand Three Hundred and Eighty-Five only) per Ordinary Share including a premium of Rs. 1375 (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 115523 (One Lakh Fifteen Thousand Five Hundred and Twenty Three) Convertible Series A Warrants ("AIF Series A Warrants") Rs. 1385 (Rupees One Thousand Three Hundred and Eighty Five only) per AIF Series A Warrant including a premium of Rs. 1375 (Rupees One Thousand Three Hundred and Seventy Five only)

The proceeds from the Preferential Issue of Convertible Warrants and Equity Shares asabove 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 noinformation 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 underreview and hence no information as per the provisions of Section 54(1)(d) of the Act readwith Rule 8(13) of the Companies (Share Capital and Debenture) Rules 2014 has beenfurnished.

Your Company has not issued any equity shares under any Employees Stock Option Schemeduring the financial year under review and hence no information as per the provisions ofSection 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital andDebenture) Rules 2014 has been furnished.

During the financial year under review there were no instances of non-exercising ofvoting rights in respect of shares purchased directly by employees under a scheme pursuantto Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital andDebentures) Rules 2014 and hence no information in connection therewith has beenfurnished.

During the year the Company has not bought back its shares pursuant to the provisionsof Section 68 of Companies Act 2013 and Rules made thereunder.

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

During the year the Company has not made any provisions of money or has not providedany loan to the employees of the Company for purchase of shares of the Company or itsholding Company pursuant to the provisions of Section 67 of Companies Act 2013 and Rulesmade thereunder.

• DEPOSITS

Your Company has not accepted/ renewed any deposits from the public or the Memberswithin the meaning of Section 73 of the Act read with Chapter V of the Act and theCompanies (Acceptance of Deposits) Rules 2014 during the financial year 2020-21 and assuch no amount of principal or interest on deposit from public or Members was outstandingas of the Balance Sheet date. Pursuant to the Scheme and the demerger of the OperatingBusiness of HLE Engineers Private Limited certain unsecured loans forming part of thedemerged undertaking have been transferred to the Company. These loans have been repaidover a period and will not be renewed by the Company.

• CREDIT RATING

Your Company enjoys a good reputation for its sound financial management and theability to meet its financial obligations in a timely manner. ICRA Limited (formerlyInvestment Information and Credit Rating Agency of India Limited) has continued itsratings 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 astable outlook.

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

• PARTICULARS OF LOANS GUARANTEES INVESTMENTS IN SECURITIES

The particulars of loans guarantees investments and securities provided during thefinancial year under review covered under the provisions of Section 186 of the Act havebeen provided in the notes to the Financial Statements. Your Company has complied with theprovisions of Sections 185 and 186 of the Act to the extent applicable with respect tothe loans and investments made.

• INVESTOR EDUCATION AND PROTECTION

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

• Dividend amount of Rs. 4.60 Lakhs pertaining to the financial year 2019-20which remained unclaimed and unpaid for a period of seven years from the date of itstransfer to the Unpaid Dividend Account has been transferred to the Investor Educationand Protection Fund (IEPF) established by the Central Government.

• Rs. 3.18 Lakhs have been transferred to the IEPF Authority towards the finalequity dividend declared for financial year 2019-20 in the Annual General Meeting held on19th September 2020 for the 131104 equity shares held by the IEPF Authorityin the financial year 2020-21 .

• 7826 equity shares of Rs. 10 each have been transferred to the IEPF Authorityafter compliance of due procedures as prescribed and 100 shares have been claimed by theShareholders 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 isavailable in Policies section on www.hleglascoat.com by accessing the web- linkhttps://hleglascoat.com/corporate-governance/.

During the financial year under review your Company has entered into related partytransactions on an arm's length basis and in the ordinary course of business and were incompliance with Section 188 of the Act and the Rules made thereunder and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The details of the same areprovided 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 AuditCommittee and Board for their approval. Prior approval/s of the Audit Committee/ Boardare obtained on an annual basis which is reviewed and updated on quarterly basis.

• PARTICULARS RELATING TO CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO

The Company in its regular course of business is vigilant to conserve the resources andcontinuously implements measures required to save energy. The Company has strongcommitment towards conservation of energy natural resources and adoption of latesttechnology in its areas of operation.

The particulars as required under the provisions of Section 134(3)(m) of the Act readwith Rule 8 of the Companies (Accounts) Rules 2014 with respect to conservation ofenergy technology absorption foreign exchange earnings and outgo etc. are furnished inthe 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 medianremuneration of the employees and other details as required pursuant to Section 197(12) ofthe Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 are annexed hereto in Annexure-III and form part ofthis Report.

B. The details of the top 10 employees of the Company in terms of remuneration drawn asrequired under Section 134 of the Act and Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are annexed hereto in Annexure- IV andform part of this Report.

C. None of the employees of the Company have drawn remuneration of Rs. 10200000 ormore per annum or Rs. 850000 or more per month or for any part of the year and hence theparticulars required to be disclosed under Section 134 of the Act read with Rule 5(2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are notrequired to be furnished.

D. None of the employees of the Company employed throughout the year under review orpart thereof was in receipt of remuneration which was in excess of that drawn by theManaging Director or Whole-time Director or Manager and holds by himself or along with hisspouse and dependent children not less than two percent of the equity shares of theCompany.

• ANNUAL RETURN

The Annual Return for the financial year 2020-21 has been uploaded on the Company'swebsite: www.hleglascoat.com in accordance with the provisions of Section 134 of theAct.

• BUSINESS RESPONSIBILITY REPORT [BRR]

Pursuant to the provisions of Regulation 34(2) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 ("Listing Regulations") read withSEBI Circular No. CIR/ CFD/CMD/10/2015 dated 4 November 2015 the Business ResponsibilityReport detailing the various initiatives taken by the Company on the environmental socialand 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 ("ListingRegulations") the Report on Corporate Governance is annexed hereto in Annexure-VIand forms part of this Report. Your Company is committed to transparency in all itsdealings and places high emphasis on business ethics. The requisite Compliance Certificateas 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 PractisingCompany Secretaries Anand confirming to the compliance with the conditions of CorporateGovernance 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 theReport on Management Discussion and Analysis is annexed hereto in Annexure-VII and formspart of this Report.

• RISK MANAGEMENT

Your Company follows well-established and detailed risk assessment and minimisationprocedures which are periodically reviewed by the Board.

Your Company recognizes the importance of managing risk in the business to sustaingrowth. The Board of Directors along with the senior management of your Company hasdeveloped and approved the Risk Management Policy wherein all material risks faced byyour Company are identified and assessed. The Risk Management Policy adopted by yourCompany establishes a structured and disciplined approach to Risk Management in order toguide the Board on decisions on risk related issues. and to mitigate various risks viz.operational risk financial risk regulatory risk reputational risk etc. Your Companyhas entrusted the Audit Committee with the responsibility of implementing and monitoringof the Risk Management Policy on a periodic basis.

The main objective of this Policy is to ensure sustainable business growth withstability and to promote a proactive approach in reporting evaluating and resolving risksassociated with the Company's business & processes. In order to achieve the keyobjective

The risks faced by the Company and the various measures taken by the Company aredetailed in Management Discussion and Analysis section. An extract of Risk ManagementPolicy is available on Company's 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 yourDirectors confirm that:

(a) the applicable accounting standards have been followed along with properexplanation relating to material departures if any in the preparation of the annualaccounts;

(b) appropriate accounting policies have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company at the end of the financial yearand of the profit of the Company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 Companyand 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 lawshave 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 respectivefields of technical finance strategic and operational management and administration.None of the Directors of your Company are disqualified under the provisions of Section164(2)(a) and (b) of the Act. During the period under review no Non-Executive Director ofyour Company had any pecuniary relationship or transactions with the Company except asstated elsewhere in this Report and in the notes to the accounts.

Mr. Harsh Patel (DIN 00141863) Non-Executive Director is retiring by rotation andbeing eligible has offered himself for re-appointment at the ensuing Annual GeneralMeeting. The brief profile of Mr. Harsh Patel has been given in the Notice convening theAnnual 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 ChiefFinancial Officer and the Company Secretary. As required under the provisions of Section203 of the Act Mr. Himanshu Patel (DIN 00202312) Managing Director Mr. Aalap Patel (DIN06858672) Executive Director (Technical) Mr. K. V. Unnikrishnan Chief Financial Officerof the Company and Ms. Dhwani Shah Company Secretary are the Key Managerial Personnel ofyour Company as on the date of this Report.

The Nomination and Remuneration Committee has formulated the Policies relating to theappointment and remuneration of the Directors of your Company laying down criteria fordetermining qualification positive attributes independence of directors etc. Salientfeatures of the said Policies are provided as an annexure hereto which forms part of thisReport. The Policy is available on the Company's website: www.hleglascoat.com in Policiessection 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 Committeesformed by it and meetings conducted during the year under review are given in theCorporate 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 thedata bank maintained with the Indian Institute of Corporate Affairs ('MCA'). In terms ofSection 150 of the Act read with Rule 6(4) of the Companies (Appointment &Qualification of Directors) Rules 2014 the Independent Directors are required toundertake online proficiency self-assessment test conducted by the IICA within a period oftwo years from the date of inclusion of their names in the data bank. The IndependentDirectors to whom the provisions of proficiency test are applicable will take the saidonline proficiency self-assessment test in due course.

Further the Board is of the opinion that the Independent Directors of the Companypossess requisite qualifications experience and expertise and they hold highest standardsof integrity.

• PERFORMANCE EVALUATION OF THE DIRECTORS

During the financial year 2020-21 the Board of Directors of your Company has carriedout an Annual Performance Evaluation of the Board its Committees and all the individualDirectors as per the Company's Policy for Performance Evaluation of Directors. Performanceevaluation sheets were distributed prior to the Meeting dates. The outcome of the aboveexercise of performance evaluation of all the Directors collectively and individually andthe Board/ Committees was announced in the respective Meetings.

(i) The Board in its Meeting held on 12th February 2021 has carried outthe evaluation task of the Committees formed by the Board and the Independent Directorsindividually for the period from 1st January 2020 to 31st December2020. In accordance with the provisions of the Section 149 of the Act read with ScheduleIV annual performance evaluation of the Independent Directors was carried out by theentire Board of Directors excluding the Directors being evaluated.

The performance of each Independent Director has been evaluated on various parameterslike ethics/ values inter-personal skills competence and general administration liaisonskills participation in meetings etc. The Board was satisfied that each of theIndependent Directors has been acting professionally and has brought his/ her richexperience in the deliberations of the Board.

(ii) The Independent Directors in their separate Meeting held on 11thFebruary 2021 carried out the performance evaluation of all the non-IndependentDirectors and the Board as a whole with special attention to the performance of theChairperson of the Company for the period from 1st January 2020 to 31stDecember 2020. The various criteria considered for purpose of evaluation includedcomposition of the board ethics/ values inter-personal skills competence and generaladministration liaison skills participation in meetings etc. The Independent Directorswere of the view that the Chairperson and all the other non-Independent Directors werecompetent and the results of the evaluation were satisfactory and adequate to meet yourCompany's requirements.

(iii) The Nomination and Remuneration Committee in its Meeting held on 12thFebruary 2021 reviewed the performance of the Executive Directors of the Company withspecial attention to the leadership criteria for the Managing Director and the ExecutiveDirector for the period from 1st January 2020 to 31st December2020. The various criteria considered for purpose of evaluation included ethics/ valuesinter-personal skills competence and general administration liaison skillsparticipation in meetings etc. The Committee was of the view that the Executive Directorswere capable and the results of the evaluation were satisfactory and adequate to meet yourCompany's requirements.

The Board also expressed its satisfaction over the process of evaluation.

• CORPORATE SOCIAL RESPONSIBILITY [CSR]

Your Company has formed a CSR Committee in accordance with the provisions of Section135 of the Act details of which are provided in the Corporate Governance Report annexedhereto and forming part of this Report. The CSR Policy of your Company as approved by theBoard of Directors and is available on the Company's website: www.hleglascoat.com inCorporate Social Responsibility section.

The CSR activities as required to be undertaken under Section 135 of the Act read withthe Companies (Corporate Social Responsibility) Rules 2014 including a brief outline ofthe Company's CSR Policy total amount to be spent under the CSR Policy for the financialyear 2020-21 amount unspent and the reason for the unspent amount is annexed hereto inAnnexure-VIII and forms part of this Report.

• VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has established a Whistle Blower Policy as envisaged under the provisionsof Section 177 (9) of the Act and the Rules thereunder and Regulation 22 of the SEBIListing Regulations and a vigil mechanism to provide a framework to promote responsibleand secure whistle blowing and to provide a channel to the employee(s) and Directors toreport to the management concerns about unethical behaviour actual or suspected fraud orviolation of the code of conduct or policy/ies of the Company as adopted/framed from timeto time. The Policy provides for protecting confidentiality of those reportingviolation(s) and restricts any discriminatory practices against them. The mechanismprovides for adequate safeguards against victimisation of employee(s) and Directors toavail of the mechanism and also provide for direct access to the Chairperson of the AuditCommittee in exceptional cases.

The Policy covers malpractices and/ or events related to all issues that could havegrave impact on the operations and performance of the business of your Company. Theconcerned matters are to be reported to the Compliance Officer and/ or the Chairperson ofthe 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 ComplianceOfficer/ the Chairperson of the Audit Committee who have been appointed as the WhistleBlower Officers of the Company.

The details of establishment of Vigil mechanism/ Whistle Blower policy and the contactdetails of the Whistle Officers are available on the Company's website:www.hleglascoat.com.

• PREVENTION OF SEXUAL HARASSMENT AT THE WORKPLACE

Your Company has framed a Policy against sexual harassment and a formal process fordealing with complaints relating to harassment or discrimination. The said Policy is inline with the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules made thereunder. As per the provisions of Section 4 ofthe said Act the Board of Directors has constituted the Internal Complaints Committee('ICC') to deal with the complaints received by your Company pertaining to genderdiscrimination and sexual harassment at the workplace.

Following is a summary of sexual harassment complaints received and disposed off duringthe 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 of385161 Series A Warrants into 385161 Equity Shares of Rs. 10 each at a premium ofRs.1375 per equity share fully paid up which shall rank pari- passu with existing equityshares of the Company as per the terms approved by the Shareholders in the Extra-ordinaryGeneral Meeting dated 01st December 2020.

Except as stated above there have been no material changes and commitments affectingthe financial position of your Company which have occurred during the period between theend of the financial year to which the financial statements relate and the date of thisReport.

• INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has strong integrated systems for internal financial control systemcommensurate with the size and scale of its operations and the same has been operatingeffectively. The Internal Auditor evaluates the efficacy and adequacy of internal controlsystem accounting procedures and policies adopted by the Company for efficient conduct ofits business adherence to Company's policies safeguarding of Company's assetsprevention and detection of frauds and errors and timely preparation of reliable financialinformation etc. Based on the report of internal audit function process owners undertakecorrective action in their respective areas and thereby strengthen the controls.Significant audit observations and corrective actions thereon were presented to the AuditCommittee of the Board.

Your Company has established effective internal control systems to ensure accuratereliable and timely compilation of financial statements to safeguard assets of yourCompany and to detect and mitigate irregularities and frauds.

In accordance with the requirements of the Section 143(3) (i) of the Act the StatutoryAuditors have confirmed the adequacy and operating effectiveness of the internal financialcontrol 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 arenot disqualified from continuing as Auditors of the Company.

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

In accordance with the Section 40 of the Companies (Amendment) Act 2017 (correspondingto Section 139 of the Act) the requirement of ratification of the appointment of theStatutory Auditor in every Annual General Meeting of the Company during the tenure ofappointment has been dispensed with. Hence the matter has not been placed as an agendaitem 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 Actduring 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 CompanySecretaries (C P No. 6628) as the Secretarial Auditors for the financial year 2020-21 inaccordance with Section 204 of the Act. The Report on Secretarial Audit for the financialyear 2020-21 in Form MR- 3 is annexed hereto and forms part of this Report. There is noqualification 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 theBoard has appointed M/s. D. G. Bhimani and Associates Practising Company Secretaries (C PNo. 6628) as the Secretarial Auditors for the financial year 2021-22. The Company hasreceived 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 Standardsprescribed for the Board and General Meetings by the Institute of Company Secretaries ofIndia and notified by the Central Government have been complied with during the financialyear under review. The Company has also voluntarily adopted other applicable SecretarialStandards issued and made effective by the Institute of Company Secretaries of India.

• INTERNAL AUDITORS

CNK & Associates LLP Chartered Accountants (Firm Registration No. 101961W) hasconducted the internal audit of your Company for the Anand works for the financial year2020-21;and AKMK Associates Chartered Accountants (Firm Registration No.: 136206W) hasconducted the internal audit of your Company for the Maroli works for the financial year2020-21.

Pursuant to provisions of Section 138 of the Companies Act 2013 and the Rules madethereunder on the recommendation of the Audit Committee the Company has appointed CNK& Associates LLP Chartered Accountants (Firm Registration No. 101961W) and AKMKAssociates Chartered Accountants (Firm Registration No.: 136206W) as the InternalAuditors for the Anand works and the Maroli Works respectively for the financial year2021-22. 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 thesaid rules. The cost audit for the financial year 2020-21 of the said records has beencarried 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 seekingapproval of the members for ratifying the remuneration payable to the Cost Auditors for FY2021-22 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 Company's equityshares on their platform vide their circular dated 18th February 2021 sincethe 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 bythe regulators or courts or tribunals impacting the going concern status and yourCompany's operations in future.

Your Company does not have any subsidiaries joint ventures or associate companiesexcept M/s H L Equipments a partnership firm where the Company holds 99% partnershipinterest. HLE Engineers Private Limited was originally the partner in the said partnershipfirm and as a part of the Scheme the said ownership interest in H L Equipments was vestedin your Company. The consolidated financial statements are also being presented inaddition to the standalone financial statement of your Company.

During the year under review there were no application made or any proceeding pendingunder the Insolvency and Bankruptcy Code 2016 (31 of 2016).

During the year under review there was no one time settlement with the Banks/Financial institutions.

• ACKNOWLEDGEMENTS

Your Directors and Management take this opportunity to thank your Company's customersvendors investors business associates bankers and other stakeholders for theircontinued support. Your Directors also take this opportunity to applaudthecontributionsmadebyalltheemployeestotheoperationsof your Company for its continuedgrowth 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)

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