Hindustan Composites Ltd

To the Members,

Hindustan Composites Limited

Your Directors are pleased to present the Fifty Ninth Annual Report together with the Standalone and Consolidated Audited Financial Statements of the Company for the financial year ended 31⁸¹ March, 2023.

1. FINANCIAL HIGHLIGHTS

The Company's financial performance for the financial year ended 31^st March, 2023 is summarized below:

(Rs.. in Lakhs)

2. OPERATIONAL PERFORMANCE

On a standalone basis, the Company achieved total revenue of Rs. 28,268.76 Lakhs during the financial year under review compared to Rs. 23,263.96 Lakhs in the previous financial year. The net manufacturing revenue was higher by 26.79 % from Rs. 18,592.29 Lakhs toRs. 23,469.93 Lakhs.

Investment income during the financial year was also higher at Rs. 4,731.54 Lakhs compared to Rs. 4,671.67 Lakhs in the previous financial year. It was achieved with judicious deployment of funds in various asset classes, despite volatile market conditions and falling interest rates.

The gross profit of the Company was higher at Rs. 4,145.25 Lakhs as against Rs. 3,335.59 Lakhs in the previous financial year. After considering the interest of Rs. 12.67 Lakhs and depreciation of Rs. 872.93 Lakhs, Profit before tax was Rs. 3,259.65 Lakhs. With a tax provision of Rs. 512.38 Lakhs (previous year Rs. 311.27 Lakhs) profit after tax stood at Rs. 2,747.27 Lakhs as against Rs. 2,160.16 Lakhs in the previous financial year. Other comprehensive income, net of tax during the financial year was Rs. - 2,093.46 Lakhs (previous financial year Rs. 8,161.68 Lakhs) and the total comprehensive income was Rs. 653.81 Lakhs (previous financial year Rs. 10,321.84 Lakhs).

During the financial year, the Company continued its growth trajectory and posted excellent results with highest ever revenue and improved profitability. It aligned with the overall

success of the auto industry. Growth was led by strong traction in commercial vehicle / rail friction material business.

The financial year 2022-23 was marked by global events causing significant disruption to the world economy including the Russia-Ukraine conflict, China's lockdowns and European market slowdown. These led to supply chain disruption and volatile input prices making cost planning challenging. India showcased resilience with a remarkable 6.8% growth rate, becoming fastest growing economy. The government policy aims to drive economic growth and infrastructure development. The Indian automotive industry emerged as a leading global player and performed very well.

Amid the dynamic landscape of the automotive sector, our Company has adeptly positioned itself for healthy growth. Our Company is deeply aware of customer expectations and has taken proactive measures to align itself towards the development of high performance products. The Company continues to emphasis on improvement in operational efficiencies, higher productivity, and prudent cost control measures.

The investment segment faced some challenges related to fluctuations in interest rates, volatile stock market, currency depreciation and global uncertainties. However, performance of investment operations remains stable with a conservative approach towards deployment of funds, keeping capital protection in focus.

The working of Company's Joint venture viz. Compo Advics Private Limited, though improved, remained under pressure with high raw material cost escalation and low-price realization. Several measures have been taken towards change in product mix and cost reduction program.

The outlook for the financial year 2023-24 remain positive with continued growth prospectus of automotive industry in terms of underlying demand. With a clear focus on innovation and customer satisfaction, the Company is well positioned to achieve its plan and will remain a major player in its business segment. The Company also foresees a significant demand growth from its rail business.

There was no change in the nature of the business of the Company during the financial year under review.

3. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT

There were no material changes and commitments affecting the financial position of the Company between the end of the financial year to which the financial statements relate and the date of this annual report.

4. SHARE CAPITAL OF THE COMPANY

During the financial year under review, there was no change in the share capital of the Company. The paid-up equity share capital of your Company as on 31^st March, 2023 was Rs..7,38,45,000/- (Rupees Seven Crore Thirty Eight Lakh Forty Five Thousand only) divided into 1,47,69,000 Equity Shares of Rs.5/- (Rupees Five only) each fully paid up.

During the financial year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

5. DIVIDEND & DIVIDEND POLICY

Your directors have recommended a dividend of Rs. 21- per share (previous financial year Rs. 21- per share) of Rs. 5/- each, being 40% (previous financial year 40%) on equity share capital for the financial year ended 31⁸¹ March, 2023. This will absorb a total cash outflow off 295.38 Lakhs. The dividend, if approved, will be paid to those members whose names shall appear in the Register of Members / List of Beneficiaries as on Friday, 22^nd September, 2023.

Pursuant to the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Company has formulated the Dividend Distribution Policy. The policy can be accessed on the Company's website at https://www.hindcompo.com/investor-relations/documents/ dividend-distribution-policy.pdf

6. RESERVES

During the financial year under review, a sum of f2,000 Lakhs (previous year f 2,000 Lakhs) were transferred to the General Reserve.

7. SUBIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company has a Joint Venture Company namely "Compo Advics (India) Private Limited." The Company had no subsidiary or associate company during the financial year under review.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 ('the Act'), a statement containing salient features of financial statements of the Joint Venture Company in Form AOC-1 is attached to the financial statements of the Company forming part of this Annual Report.

No subsidiary, joint venture or associate company were formed or ceased during the financial year under review.

8. CONSOLIDATED AUDITED FINANCIAL STATEMENTS

Pursuant to the provisions of Sections 129 and 133 of the Act read with the Companies (Accounts) Rules, 2014 and as required under Regulation 34 of the Listing Regulations, the Company has prepared Consolidated Audited Financial Statements consolidating financial statements of its Joint Venture Company namely "Compo Advics (India) Private Limited" with its financial statements in accordance with the applicable provisions of Indian Accounting Standards ("Ind- AS").

The Consolidated Audited Financial Statements along with the Independent Auditors' Report thereon are annexed and form part of this Annual Report.

The summarized consolidated financial position is provided in point no. 1 above.

9. RISK MANAGEMENT AND AREAS OF CONCERN

The Company has laid down a well-defined Risk Management Policy covering the risk mapping, trend analysis, risk exposure, potential impact, and risk mitigation process. Adetailed exercise is being carried out from time to time to identify, evaluate, manage and monitoring of both business and non-business risks. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

During the financial year 2022-23, the Risk Management Committee was reconstituted. Mr. Raghu Mody ceased to be member of the Risk Management Committee with effect from close of business hours of 11^th November, 2022 and Mr. P. K. Choudhary was designated as Chairman of the Risk Management Committee with effect from 12^lh November, 2022. Pursuant to the provisions of Regulation 21 of the Listing Regulations, as on 31^st March, 2023, Risk Management Committee comprised of Mr. Lalit Kumar Bararia and Mrs.Preeti Vimal Agrawal, Independent Directors as its members and Mr. P. K. Choudhry as Chairman of Committee. The Company Secretary and Compliance officer of the Company acts as the Secretary of the Committee.

The Committee assists the Board in fulfilling its oversight responsibilities with regard to enterprise risk management. The Committee reviews the risk management practices and

actions deployed by the Management with respect to identification, impact assessment, monitoring, mitigation and reporting of key risks while at the same time trying to achieve its business objectives.

This Committee's responsibilities include achieving the objective of developing a risk mitigated culture that supports decision making and helps improving the Company's performance as stated in the Risk Management Policy of the Company. The role and terms of reference of the Risk Management Committee are in conformity with the requirements of the Act and Regulation 21 of the Listing Regulations.

10. ANNUAL RETURN

Annual Return of the Company as on 31^st March, 2023 in accordance with the provision of Section 92(3) read with the Section 134(3)(a) of the Act will be placed on the website of the Company and can be accessed at the link https://www.hindcompo.com/investor-relations/annual- reports.htm.

a) Composition

As on 31^st March, 2023, the Board comprised of seven directors including one independent women director. The Board has an appropriate mix of Executive Directors, Non-Executive Directors and Independent Directors, which is in compliance with the requirements of the Act and the Listing Regulations and is also aligned with the best practices of Corporate Governance.

b) Retirement by rotation

In accordance with the provisions of Section 152(6) of the Act read with the Companies (Management and Administration) Rules, 2014 and the Articles of Association of the Company, Mr. Raghu Mody (DIN: 00053329), Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. The Board of Directors, on the recommendation of Nomination and Remuneration Committee, recommends his reappointment to the members of the Company.

c) Appointment and reappointment

Mr. P. K. Choudhary, who retried by rotation at previous 58^th Annual General Meeting held on 29^th September, 2022, was re-appointed as director of the company in terms of provisions of Section 152(6) of the Act.

Pursuant to the provisions of Section 203 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 6 of the Listing Regulations, the Board of Directors of the Company appointed Mr. Pranabh Kapoor as the Company Secretary and Compliance Officer of the Company w.e.f. 11^,h November, 2022.

Further, upon resignation of Mr. Pranabh Kapoor from the services of the Company from close of business

hours of 13^lh April, 2023 , the Board of Directors of the Company appointed Mr. Ravi Vaishnav as the Company Secretary and Compliance Officer of the Company w.e.f. 30^,h June, 2023.

Mr. Raghu Mody, was re-appointed as the Executive Chairman & Whole Time Director of the Company for a period of 3 years w.e.f. 1^st October, 2020 till 30^th September, 2023 by passing a Special Resolution in the 56* Annual General Meeting of the Company held on 29* September, 2020. Mr. Raghu Mody stepped down from the executive position (Whole Time Director) of the Company due to his personal reasons w.e.f. close of business hours of 22^nd October, 2022; and his position was re-categorized as Chairman & Non-Executive Non- Independent Director of the Company w.e.f. 23^rd October, 2022. His tenure as Director of the Company would complete on 30^th September, 2023. The Board of Directors of the Company at its meeting held on 30* June, 2023, based on the recommendation of Nomination and Remuneration Committee, has reappointed Mr. Raghu Mody (DIN: 00053329) as a Chairman & Non-Executive Non-Independent Director of the Company, w.e.f. 1^5t October, 2023, subject to the approval of the Members of the Company. Mr. Raghu Mody has attained more than seventy five (75) years of age, and therefore his re-appointment requires approval of the Members of the Company by passing a Special Resolution in terms of the provisions of Regulation 17(1 A) of the Listing Regulations.

Upon the recommendations of Nomination and Remuneration Committee, the Board of Directors of the Company at its meeting held on 30^th June, 2023 appointed Mr. Vinay Sarin (DIN: 00090757) as Additional Non-Executive Non-Independent Director of the Company w.e.f. 1^st July, 2023, who shall hold office upto the date of ensuing Annual General Meeting of the Company.

The resolutions seeking approval of members for appointment of Mr. Vinay Sarin as Non - Executive Non- Independent Director and re-appointment of Mr. Raghu Mody as Non-Executive Non-Independent Director of the Company along with their brief resume as required under Regulation 36(3) of Listing Regulations and Secretarial Standard - 2 on General Meetings are given in the Notice convening the 59* Annual General Meeting of the Company. The Board recommends their appointment and reappointment respectively.

d) Cessation

There was no cessation from the Board of the Company during the financial year under review. Mr. Raghu Mody stepped down from the executive position (Whole Time Director) of the Company w.e.f. close of business hours of 22^nd October, 2022; however, he continues as Non- Executive Non-Independent Director of the Company.

Mr. Vikram Soni, Company Secretary and Compliance Officer of the Company resigned from the services of the Company w.e.f. the close of business hours of 8^th October, 2022.

Mr. Pranabh Kapoor, Company Secretary and Compliance Officer of the Company resigned from the

services of the Company w.e.f. the close of business hours of 13^,h April, 2023.

e) Declaration from Independent Directors

The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1 )(b) of the Listing Regulations and pursuant to the provisions of Regulation 25 of the said Regulations that they are not aware of any circumstance 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 Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Company's Code of Conduct.

Further, the Independent Directors have also submitted their declarations in compliance with the provision of Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, which mandates the inclusion of Independent Director's name in the data bank of Indian Institute of Corporate Affairs ("MCA") till they continue to hold the office of an independent director.

None of the directors of your Company are disqualified under the provisions of Section 164(2) of the Act. Your directors have made necessary disclosures, as required under various provisions of the Act and the Listing Regulations.

In the opinion of the Board, all the independent directors are person of integrity and possess relevant expertise and experience and are independent of the management.

f) Annual Performance and Board Evaluation

The Board has devised a policy pursuant to the provisions of the Act and the Listing Regulations for performance evaluation of the chairman, board, individual directors (including independent directors) and committees which includes criteria for performance evaluation of non-executive directors and executive directors.

The Nomination and Remuneration Committee of the Company has specified the manner of effective evaluation of the performance of Board, its committees and individual directors of the Company and has authorized the Board to carry out the evaluation. Based on the manner specified by the Committee, the Board has devised questionnaire to evaluate its performance and performance of its committees and individual directors and the chairperson. Such questions are prepared considering the business of the Company and the expectations that the Board has from each of the directors. The performance of each committee was evaluated by the Board, based on the report on evaluation received from respective Board committees. The reports on performance evaluation of the individual directors were reviewed by the Chairman of the Board.

s The evaluation framework for assessing the performance of directors comprises of the following key areas:

i. Attendance at Board and Committee Meetings;

e ii. Quality of contribution to Board deliberations; it

d iii. Strategic perspective or inputs regarding future growth >) of the Company and its performance; and

s

)t iv. Providing perspective and feedback going beyond >r information provided by the management.

>r

n The details of the programmes for familiarization of

y Independent Directors with the Company, their roles,

o rights, responsibilities in the Company, nature of the

>f industry in which the Company operates, business

model of the Company and related matters are put up on the website of the Company at the link: d https://www.hindcompo.com/investor-relations/documents/

if familiarisation-programes-for-indepedent-directors.pdf.

d

s g) Key managerial Personnel (KMP)

a

II The Key Managerial Personnel of the Company are as

it follows:

Note:

1. Stepped down from the executive position (Whole Time Director) of the Company with effect from close of business hours of 22^nd October, 2022 and continues as Chairman & Non-Executive Non-Independent Director of the Company.

12. MANAGERIAL REMUNERATION AND OTHER DETAILS

Disclosure pertaining to remuneration and other details as required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in this Report as "Annexure -A" and forms part of this Annual Report.

The statement containing particulars of employees as required under Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate annexure forming part of this Report. Further in terms of Section 136 of the Act, the report and accounts are being sent to the members excluding the aforesaid annexure. The said annexure is available for inspection at the registered office of the Company during the working hours and any member interested in obtaining copy of the same may write to the Company Secretary and Compliance Officer of the Company and the same will be furnished on request.

13. REMUNERATION POLICY

Pursuant to the provisions of Section 178 of the Act and Regulation 19 of the Listing Regulations and on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company has adopted a policy for selection and appointment of Directors, Key Managerial Personnel (KMP), Senior Management Personnel (SMP), other employees and their remuneration including criteria for determining qualifications, positive attributes, independence of a director and other related matters.

The Remuneration Policy is placed on the website of the Company viz. www.hindcompo.com.

14. MEETINGS OF THE BOARD

The Board met five times during the financial year under review, the details of which are given in the Corporate Governance Report, which forms part of this Annual Report. The intervening gap between the two consecutive meetings was within the period prescribed under the Act and the Listing Regulations.

15. COMMITTEES OF THE BOARD

Details of the Committees constituted by the Board under the Act and the Listing Regulations, along with their composition and changes, if any, and the number and dates of meetings held during the financial year under review are provided in the Corporate Governance Report, which forms part of this Report.

16. AUDIT COMMITTEE AND ITS COMPOSITION

The Audit Committee is duly constituted as per the provisions of Section 177 of the Act and Regulation 18ofthe Listing Regulations.

During the financial year under review, Mr. P. K. Choudhary, Managing Director, was appointed as Member of the Committee effective from 12*¹ November, 2022 in place of Mr. Raghu Mody, who ceased to be the member of the Audit Committee w.e.f. 11^th November, 2022.

As on 31^st March, 2023, the Audit Committee comprised of Mr. Lalit Kumar Bararia, Mr. A. B. Vaidya, Mr. Deepak Sethi, Lt. Gen. (Retd.) K. S. Brarand Mr. P. K. Choudhary.

Mr. Lalit Kumar Bararia is Chairman of the Audit Committee. The Company Secretary and Compliance officer of the Company acts as the Secretary of the Audit Committee. All the recommendations made by the Audit Committee were accepted by the Board of Directors of the Company. Other details with respect to Audit Committee are given in Corporate Governance Report, which forms part of this Annual Report.

The Audit Committee reviews the reports to be submitted to the Board of Directors with respect to auditing and accounting matters, etc. It also supervises the Company's internal control, financial reporting process and vigil mechanism.

17. DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them and as required under Section 134(3)(c) read with Section 134(5) of the Act state that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

(c) the directors have taken proper and sufficient care 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) the directors have prepared the annual accounts on a going concern basis;

(e) the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

18. PUBLIC DEPOSITS

During the financial year under review, the Company has not accepted or renewed any public deposit within the meaning of Sections 73 and 76 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. As on 31^st March 2023, there were no deposits which were unclaimed / unpaid and due for repayment.

19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1)OFTHE ACT

All contracts / arrangements / transactions entered by the Company during the financial year under review with related parties were in ordinary course of business and on arm's length basis and are entered into based on considerations of various business exigencies, such as synergy in operations, their specializations etc. and to further the Company's interests.

During the financial year under review, the Company had no material transactions with related parties falling under the scope of Section 188(1) of the Act. Hence, the Company is not required to furnish disclosure of material related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 for the financial year under review.

In accordance with the provisions of Regulation 23 of the Listing Regulations, the Company has adopted the policy on related party transactions and the same is available on the Company's website viz. https://www.hindcompo.com/ investor-relations/documents/related-party-transaction- policy.pdf.

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The details of loans, guarantee or investments made by the Company as required under Section 186 of the Act are given under notes to accounts on financial statements forming part ofthisAnnual Report.

21. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Pursuant to the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility) Rules, 2014, the Company has formed Corporate Social Responsibility Committee and a Policy on Corporate Social Responsibility ('CSR'). As part of its initiatives under CSR in order to support and assist the Central Government to strengthen the country's fight against the post -pandemic situation or any other kind of emergency or distressed situation, the Company contributed a sum off. 70.00 Lakhs to the PM CARES Fund towards its CSR obligations for the financial year under review. The policy on Corporate Social Responsibility has been placed on the website of the Companyviz. www.hindcompo.com.

As required under the provisions of Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014, a brief outline/salient features of the Company's CSR Policy and the Annual Report on CSR activities undertaken by the Company during the financial year under review are given in "Annexure - B", which forms part of this Report.

22. WHISTLE BLOWER/ VIGIL MECHANISM POLICY

The Company has a Vigil Mechanism / Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The mechanism also provides for adequate safeguards against victimization of directors and employees who avails of the mechanism and also provide for direct access to the Chairman of the Audit Committee in appropriate and exceptional cases.

The details of the Vigil Mechanism Policy are explained in the Corporate Governance Report and the policy has been placed on the website of the Company viz. www.hindcompo.com.

We affirm that during the financial year under review, no employee or director was denied access to the Chairman of the Audit Committee.

23. STATUTORY AUDITORS

As per provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the Members of the Company in their 58^lh Annual General Meeting held on 29^lh September, 2022 appointed M/s. Lodha & Company, Chartered Accountants, Mumbai (Firm Registration No. 301051E), as the Statutory Auditors of the Company for a term of consecutive 5 years i.e. to hold office from the conclusion of 58^th Annual General Meeting till the conclusion of 63^rt Annual General Meeting of the Company to be held for the financial year ending 31^st March, 2027.

M/s. Lodha & Company has furnished written confirmation to the effect that they are not disqualified from acting as the Statutory Auditors of the Company in terms of the provisions of Sections 139 and 141 oftheActand the Companies (Audit and Auditors) Rules 2014.

24. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204(1) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. M Baldeva Associates, Company Secretaries, Thane to undertake Secretarial Audit of the Company for the financial year under review.

The Secretarial Audit Report is annexed to this report as "Annexure-C" and forms part of this Report.

25. INTERNALAUDITORS

Pursuant to the provisions of Section 138 of the Act read with the Companies (Accounts) Rules, 2014, the Board, on recommendation of the Audit Committee, re-appointed M/s. S M M P & Associates, Chartered Accountants, Mumbai, as Company's I nternal Aud itors for the financial year 2023-24.

The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliances with operating systems, accounting procedures and policies at all locations of the Company and reports are presented to the Audit Committee periodically.

26. COST RECORDS AND COST AUDITORS

As required under Section 148(1) of the Act, the Company has prepared and maintained cost accounts and cost records in the prescribed manner for its products viz. Railway Brake Block manufactured atAurangabad unit.

As per the provisions of Section 148(2) & (3) of the Act read with the Companies (Audit and Auditors) Rules, 2014, the Board of Directors of the Company has appointed M/s. M. R. Pandit & Co., Cost Accountants, Aurangabad (Firm Registration No: 00268) as Cost Auditors of the Company to

rnnHi ir.t ai iHit of met remrrlc maintainaH h\/ tha P.nmnanv nf

its products viz. Railway Brake Block manufactured at Aurangabad unit for the financial year 2023-24. A resolution seeking ratification of the remuneration payable to the Cost Auditors by the members of the Company is proposed in the Notice of the ensuing 59Annual General Meeting of the Company.

27. COMMENTS ON QUALIFICATION BY STATUTORY AUDITORS AND SECRETARIAL AUDITORS

There is no qualification / observation / adverse remark in Statutory Auditors' Report.

With respect to observations made by the Secretarial Auditors in their report, your directors would like to state that:

Delay in filing of one e-form with the Registrar of Companies was on account of technical glitches at newly launched version 3 of Ministry of Corporate Affairs website.

Further, none of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143(12)oftheAct.

28. MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT

Pursuant to the provisions of Regulations 34(2) & (3) and Schedule V of the Listing Regulations, the following have been made part of the Annual Report and are attached to this Annual Report:

• Management Discussion and Analysis Report,

• Corporate Governance Report,

• Declaration on compliance with Code of Conduct,

• Certificate from Practicing Company Secretary that none of the directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as director of companies, and

• Auditors'Certificate regarding compliance of conditions of Corporate Governance.

29. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There was no significant or material order passed by any regulator or court or tribunal, which impacts the going concern status of the Company or will have a bearing on Company's operations in future.

30. INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place proper and adequate internal control systems commensurate with the nature of its business, size and complexity of its business operations. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, compliance with policies, procedures, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

31. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 124(5) of the Act read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('the Rules'), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF Authority established by the Government of India after the completion of seven years. Further, according to provisions of Section 124(6) of the Act read with the aforesaid said Rules, the shares on which dividend remains unpaid or unclaimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. Accordingly, during the financial year under review, the Company transferred 15,718 equity shares to the demat account of the IEPF Authority on which the dividend remained unclaimed / unpaid upto financial years 2014-15.

In terms of the provisions of Sections 124(5) and 125 of the Act and said Rules, during the financial year under review, an amount of Rs. 1,95,365/- being remained unpaid / unclaimed dividend for the financial year 2014-15 was transferred to the IEPF Authority.

Further, the unpaid and unclaimed dividend amount lying with the Company for financial year 2015 - 16 is due to transfer to the IEPF in the month of October, 2023. The details of the same are available on the Company's website viz. www.hindcompo.com.

During the financial year under review, Mr. Pranabh Kapoor, Company Secretary and Compliance Officer of the Company was appointed as the Nodal Officer to ensure compliance with the IEPF Rules. Upon the resignation of Mr. Pranabh Kapoor, Company Secretary and Compliance Officer of the Company, Mr. P. K. Choudhary, Managing Director of the Company was appointed as the Nodal Officer to ensure compliance with the IEPF Rules. Upon appointment of Mr. Ravi Vaishnav as Company Secretary and Compliance Officer of the Company, Mr. Ravi is being appointed as Nodal Officer to ensure compliance with the IEPF Rules w.e.f. 30"'June, 2023.

32. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to the provisions of Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 details regarding Conservation of Energy, Technology Absorption, Foreign Exchange earnings and outgo are given in "Annexure - D", which forms part of this Report.

33. CREDIT RATINGS:

Acuite Ratings & Research Limited has reaffirmed the following credit ratings for Company's long term and short term instruments:

34. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and your directors confirm compliance of the same during the financial year under review.

35. INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has complied with the provisions relating to the constitution of the Internal Committee as required under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year under review, there was no complaint filed before the said Committee and there was no complaint pending at the beginning or end of the financial year under review.

36. DETAILS OF PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

During the financial year under review, no application was made or proceeding initiated against the Company under the Insolvency and Bankruptcy Code, 2016 nor any such proceeding was pending at the end of the financial year under review.

37. VALUATION OF ASSETS

During the financial year under review, there was no instance of one-time settlement of loans / financial assistance taken from Banks or Financial Institutions, hence, the Company was not required to carry out valuation of its assets for the said purpose.

38. TRANSFER OF UNCLAIMED SHARES TO UNCLAIMED SUSPENSE ACCOUNT OF THE COMPANY

During the financial year under review, the Company was not required to transfer any share to the unclaimed suspense account as specified in Schedule VI of the Listing Regulations. The details of the number of shares transferred from the Unclaimed suspense account to the respective shareholders are provided in the Corporate Governance report, which forms part of this Annual Report.

39. APPRECIATION

Your directors would like to place on record their sincere appreciation for the continued co-operation, guidance, support and assistance extended during the financial year under review by our bankers, customers, suppliers and Government agencies. The Board also wishes to express its appreciation for the valuable contribution made by the employees at all levels during the financial year under review.

For and on Behalf of the Board of Directors of Hindustan Composites Limited