The Board of Directors of the Company regretfully reports sad demise of Shri Raghu Nandan Mody, Chairman and Non-Executive Director of the Company on 8^th February 2024 and express its heartfelt deep condolences. The Board places on record its sincere and deep appreciation for visionary leadership and invaluable guidance and contribution made by Late Shri Raghu Nandan Mody during his tenure of 37 years with the Company.

Your directors are pleased to present the Sixtieth Annual Report together with the Standalone and Consolidated Audited Financial Statements of the Company for the financial year ended 31^st March, 2024.

1. FINANCIAL HIGHLIGHTS

The Company's financial performance for the financial year ended 31^st March 2024 is summarized below:

(' in Lakh)

2. OPERATIONAL PERFORMANCE

On a standalone basis, the Company achieved total revenue of ' 29,768.43 Lakh during the financial year under review compared to ' 28,268.76 Lakh in the previous financial year. The net manufacturing revenue was higher by 7% from ' 23,469.93 Lakh to ' 25,016.21 Lakh.

Investment income during the financial year remained almost same at ' 4,699.53 Lakh compared to ' 4,731.54 Lakh in the previous financial year. It could be 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 ' 5,221.63 Lakh as against ' 4,145.25 Lakh in the previous financial year. After considering the interest of ' 8.96 Lakh and depreciation of ' 952.51 Lakh, Profit before tax was ' 4260.16 Lakh. With a tax provision of ' 819.01 Lakh (previous year ' 512.38 Lakh) Profit after tax stood at ' 3,441.15 Lakh as against ' 2,747.27 Lakh in the previous financial year. Other comprehensive income, net of tax during the financial year was ' 3,435.40 Lakh (previous financial year ' - 2,093.46 Lakh) and the total comprehensive income was ' 6876.55 Lakh (previous financial year ' 653.81 Lakh).

It was another successful year on the journey of excellence & growth and the Company 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 rail friction material business.

We are also happy to report that our Company has become a green Company with elimination of Asbestos based products at its plants.

Global economy continues to present a mixed trend. Multiple factors like on-going geo-political conflicts, widespread elevation of debt, extreme weather conditions and elections in many parts of the world continue to contribute to the uncertainty of the global economic outlook. Encouragingly, inflation has softened over the highs of the previous year and is expected to continue to moderate.

Amidst these conditions, Indian economy has continued to grow with resilience. With a GDP growth of 7.8% in calender year 2023, the fifth largest economy was the fastest growing major economy in the world. This strength is attributed to sustained domestic demand and growing working population. The sharp focus on improving productivity in both manufacturing and agriculture sectors, coupled with a promising growth outlook, bodes well for overall demand creation for both Commercial and Passenger Vehicles.

Indian Automotive industry achieved a healthy growth during the year under review. It was led by personal mobility vehicles with passenger car sales crossing

4.2 million nos. in the domestic market. Two wheelers registered double digit growth but were yet to touch the pre-covid levels. The Commercial vehicle segment overall grew marginally.

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

The Company has taken several steps towards sustainability including installation of 1.4 MWp on-sight Solar plant (which meets about 25% of total electricity requirement of Paithan plant), putting up recycling plant to use waste materials, elimination of asbestos products, putting up plantation around the plant.

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 (India) Private Limited, remained under pressure with high cost escalation of raw materials and low-price realization. Several measures have been taken towards change in product mix and cost reduction program.

The outlook for the financial year 2024-25 remains 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 plans 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 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, 2024 was ' 7,38,45,000/- (Rupees Seven Crore Thirty Eight Lakh Forty Five Thousand only) divided into 1,47,69,000 Equity Shares of ' 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 ' 2/-per share (previous financial year ' 2/- per share) of ' 5/- each, being 40% (previous financial year 40%) on equity share capital for the financial year ended 31^st March, 2024. This will absorb a total cash outflow of ' 295.38 Lakh. The dividend, if approved, will be paid to those members whose names shall appear in the Register of Members / List of Beneficial Owners as on 20^th September, 2024.

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 ' 4,000 Lakh (previous year ' 2,000 Lakh) was transferred to the General Reserve.

7. SUBSIDIARIES, 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 was 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. A detailed 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.

Pursuant to the provisions of Regulation 21 of the Listing Regulations, the Company has constituted Risk Management Committee. As on 31^st March, 2024, Risk Management Committee comprised of Mr. Lalit Kumar Bararia and Mrs. Preeti Vimal Agrawal, Independent Directors as its members and Mr. P K. Choudhary as Chairman of Committee. The Company Secretary and Compliance officer of the Company acts as 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, 2024 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.

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

a) Composition

As on 31^st March, 2024, the Board comprised of eight 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. P K. Choudhary (DIN: 00535670), 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 as such to the members of the Company.

c) Appointment and Re-appointment

I. Details of the appointments and re-appointments made during the year under review are as follows:

Upon the recommendation of Nomination and Remuneration Committee and the Board of Directors of the Company:

(i) Mr. Raghu Mody, who retired by rotation at

previous 59^th Annual General Meeting held on 29^th September, 2023, was re-appointed by the members as Director of the Company in terms of provisions of Section 152(6) of the Act. He was also re-appointed as NonExecutive Non-Independent Director of

the Company w.e.f. 1^st October, 2023 by the members of the Company at their 59^th Annual General Meeting;

(ii) Mr. Vinay Sarin (DIN: 00090757) was

appointed as an Additional Director

(Non-Executive Non-Independent) of the Company w.e.f. 1^st July, 2023. Further, he was appointment as Non - Executive Non-Independent Director of the Company w.e.f. 1^st July, 2023 by the members of the Company at their 59^th Annual General Meeting; and

(iii) Mr. Rajan Arvind Dalal (DIN: 00546264)

was appointed as an Additional Director (Non-Executive Independent Director) of the Company, not liable to retire by rotation, for a term of five (5) consecutive years commencing from 21^st February, 2024 to 20^th February, 2029, by the Board of Directors of the Company at their meeting held on 21^st February, 2024. Further, he was appointed as such by the members of the Company by way of passing of a Special Resolution through Postal Ballot Process concluded on 27^th March, 2024, result of which was declared on 29^th March, 2024.

II. Details of the proposed appointments and reappointments at the ensuing Annual General Meeting are as follows:

Upon the recommendation of Nomination and Remuneration Committee and approval of the Audit Committee, wherever applicable, the Board of Directors of the Company recommends

appointment / reappointment of following persons as directors of the Company at the ensuing Annual General Meeting:

(i) Mr. P K. Choudhary (DIN: 00535670) has been re-appointed as Managing Director of the Company for further period of three (3) years w.e.f. 1^st July, 2024 to 30^th June, 2027, by the Board of Directors in their meeting held on 29^th May, 2024, subject to the approval of the members of the Company;

(ii) Mr. Lalit Kumar Bararia (DIN: 00204670) was appointed as Independent, Non - Executive Director for a term of five (5) consecutive years w.e.f. 13^th February, 2020 by the members of the Company in their 56^th Annual General Meeting held on 29^th September, 2020, accordingly his current tenure expires on 12^th February, 2025. Pursuant to the provisions of Section 149(10) read with Schedule IV of the Act and the Listing Regulations and considering the integrity, expertise and experience of Mr. Lalit Kumar Bararia, it is proposed to re-appoint him as Independent, Non - Executive Director of the Company for another term of five (5) consecutive years to hold office from 13^th February, 2025 till 12^th February, 2030; and

(iii) Mrs. Preeti Vimal Agrawal (DIN: 08693668) was appointed as Independent, NonExecutive Director for a term of five (5) consecutive years w.e.f. 13^th February, 2020 by the members of the Company in their 56^th Annual General Meeting held on 29^th September, 2020, accordingly her current tenure expires on 12^th February, 2025. Pursuant to the provisions of Section 149(10) read with Schedule IV of the Act and the Listing Regulations and considering the integrity, expertise and experience of Mrs. Preeti Vimal Agrawal, it is proposed to reappoint her as Non-Executive Independent Director of the Company for another term of five (5) consecutive years to hold office from 13^th February, 2025 till 12^th February, 2030; and

(iv) Mr. Snehal Muzoomdar (DIN: 00729992) is proposed to be appointed as Non-Executive Independent Director of the Company, not liable to retire by rotation, for a term of five (5) consecutive years with effect from 1^st October, 2024 to 30^th September, 2029 by the members of the Company.

The resolutions seeking approval of members of the Company by passing of special resolutions for re-appointment of Mr. P K. Choudhary as Managing Director, Mr. Lalit Kumar Bararia and Mrs. Preeti Vimal Agrawal and appointment of

Mr. Snehal Muzoomdar as Independent Directors, along with their brief resume and other relevant details as required under Regulation 36(3) of Listing Regulations and revised Secretarial Standard - 2 on General Meetings are provided in the Notice convening the 60^th Annual General Meeting of the Company.

III. Appointment of Key Managerial Personnel of the Company:

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 and to fill the casual vacancy arose upon resignation of Mr. Ravi Vaishnav from the services of the Company, the Board of Directors of the Company appointed Mr. Arvind Purohit (ICSI Membership No. ACS 33624) as Company Secretary and Compliance Officer of the Company w.e.f. 29^th May, 2024.

d) Cessation

(i) Mr. Raghu Mody ceased to be the Chairman and Non-Executive Non-Independent Director of the Company w.e.f. 8^th February, 2024 due to his sad demise;

(ii) Lt. Gen. (Retd.) K. S. Brar (DIN: 01146720) and Mr. Ashok B. Vaidya (DIN: 00246208) ceased to be the Independent Directors of the Company w.e.f. the close of business hours of 31^st March, 2024 upon completion of their two consecutive terms as Independent Directors of the Company. The Board of Directors of the Company places on record its appreciation for the valuable contributions and guidance provided by Lt. Gen. (Retd.) K. S. Brar and Mr. Ashok B. Vaidya during their tenure with the Company;

(iii) 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^th April, 2023; and

(iv) Mr. Ravi Vaishnav, Company Secretary and Compliance Officer of the Company resigned from the services of the Company w.e.f. the close of business hours of 5^th April, 2024.

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 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 that of its committees and individual directors. 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.

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

i. Attendance at Board and Committee meetings;

ii. Quality of contribution to Board deliberations;

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 7 (seven) 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 Listing Regulations.

15. COMMITTEES OF THE BOARD

Details of the Committees constituted by the Board under the Act and 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 Annual Report.

16. AUDIT COMMITTEE AND ITS COMPOSITION

The Audit Committee is duly constituted as per the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of Listing Regulations.

As on 31^st March, 2024, the Audit Committee comprised of Mr. Lalit Kumar Bararia, Mr. A. B. Vaidya, Mr. Deepak Sethi, Lt. Gen. (Retd.) K. S. Brar and 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 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.

Mr. A. B. Vaidya and Lt. Gen. (Retd.) K. S. Brar, Independent Directors, ceased to be Directors of the Company w.e.f. closing hours of 31^st March, 2024 upon completion of their two consecutive terms as Independent Directors. Accordingly, they ceased to be members of the Committee w.e.f. closing hours of 31^st March, 2024. The Committee was reconstituted with effect from 1^st April, 2024 as follows:

1) Mr. Lalit Bararia - Chairman

2) Mrs. Preeti Agrawal - Member

3) Mr. Deepak Sethi - Member

4) Mr. Rajan Dalal - Member

5) Mr. P K. Choudhary - Member

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 Companies (Acceptance of Deposits) Rules, 2014. As on 31^st March 2024, 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) OF THE ACT

All contracts / arrangements / transactions entered by the Company during the financial year under review with related parties were in ordinary course of business 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, guarantees 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 of this Annual Report.

21. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Pursuant to the provisions of Section 135 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 of ' 85.00 Lakh 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 Company viz. 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 Annual 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 avail of the mechanism and also provides 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^th Annual General Meeting held on 29^th September, 2022 appointed M/s. Lodha & Company (Currently known as Lodha & Co. LLP), Chartered Accountants, Mumbai (Firm Registration No. 301051E), as Statutory Auditors of the Company for a term of consecutive 5 (five) years i.e. to hold office from the conclusion of 58^th Annual General Meeting till the conclusion of 63^rd Annual General Meeting of the Company to be held for the financial year ending 31^st March, 2027.

M/s. Lodha & Co. LLP, 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 of the Act and 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, Mumbai 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. INTERNAL AUDITORS

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 Internal Auditors for the financial year 2024-25.

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 at Aurangabad unit.

As per the provisions of Section 148(2) & (3) of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors of the Company in its meeting held on 14^th December, 2023 appointed M/s. Suresh Pimple & Associates, Cost Accountants,

Aurangabad (Firm Registration No. 100780) to fill the casual vacancy caused due to cessation of M/s. M. R. Pandit & Co., Cost Accountants, Aurangabad (Firm Registration No: 00268) as Cost Auditors of the Company consequent to the dissolution of the firm, to conduct audit of cost records maintained by the Company of its products viz. Railway Brake Block manufactured at Aurangabad unit for the financial year 2023-24. Further, M/s. Suresh Pimple & Associates, Cost Accountants, Aurangabad (Firm Registration No. 100780) have been re-appointed as Cost Auditors of the Company to conduct audit of cost records for the financial years 2024-25. A resolution seeking ratification of remuneration payable to the Cost Auditors by the members of the Company for the financial years 2023-24 and 2024-25 is included in the Notice of the ensuing 60^th Annual 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.

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. M Baldeva Associates, Secretarial Auditors in the Secretarial Audit Report, however, a few observations are made by the Secretarial Auditors in their report and explanation by the Board on such observations are as follows:

As required under Regulation 17(1 A) of the Listing Regulations, appointed Mr. Vinay Sarin as Additional Director, who was attaining age of 75 years before his appointment as director in general meeting, without taking prior approval of its members, however his appointment as Non - Executive Non-Independent Director of the Company was approved in the next Annual General Meeting by the members of the Company by passing a special resolution, held on 29^th September, 2023, within three months from the date of his appointment.

Board's explanation:

The Board of Directors of the Company in its meeting held on 30^th June, 2023 appointed Mr. Vinay Raj Sarin as an Additional Director of the Company (Non

- Executive Non-Independent) w.e.f. 1^st July, 2023 and also approved the Noice of AGM dated 30^th June, 2023 seeking members' approval by way of special resolution for appointment of Mr. Vinay Raj Sarin as Non

- Executive Non-Independent Director and on the date of appointment by the Board of Directors, the age of Mr. Vinay Raj Sarin was below 75 years, his appointment as Non - Executive Non-Independent Director of the Company was approved in the next annual general meeting by the members of the Company by passing a special resolution, held on 29^th September, 2023, within three months from the date of appointment.

The Hon'ble Securities Appellate Tribunal ('SAT') in the matter of 20 Micron Limited vs. SEBI & Ors., decided on 28^th November 2023, held that:

'Regulation 17(1A) and 17(1C) has to be read harmoniously with the provisions of Section 152(2) and 161(1) of the Act which will make it clear that a person above the age of 75 years can be appointed by the Board of Directors. Such appointment is required to be approved subsequently within the prescribed period by a special resolution in the next general meeting by the members of the Company which in the instant case was done within the prescribed period. In view of the aforesaid, no penalty could have been imposed by the BSE and NSE for violation of Regulation 17(1A) of the LODR Regulations'.

Further, The Hon'ble Securities Appellate Tribunal ('SAT') in the matter of Nectar Life Sciences Ltd. vs. SEBI & Ors., Appeal no. 185/2023 decided on 27^th April, 2023, held that:

'This Tribunal considered the provisions of Regulations 17(1 A) with other provisions and held that the word “unless” as depicted in Regulation 17(1A) does not mean “prior approval” nor the requirement of passing a special resolution was a qualifying condition for appointment as a director.'

In view of the facts and circumstances of the matter and above SAT judgements, the Company believes that it has not violated the provisions of Regulation 17(1A) the Listing Regulations, and took its members' approval in the next Annual General Meeting held on 29^th September, 2023. However, under protest, the Company made payment of fines imposed by the BSE and NSE and preferred necessary applications before both the BSE Ltd. (designated Stock Exchange) and NSE for waiver of fines imposed.

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

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. INVESTORS 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 said Rules, the shares on which dividend remains unpaid or unclaimed by the shareholders for 7 (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 17,100 equity shares to the demat account of the IEPF Authority on which the dividend remained unclaimed / unpaid upto financial year 2015-16.

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 ' 2,01,887/- being remained unpaid / unclaimed dividend for the financial year 2015-16 was transferred to the IEPF Authority.

Further, the unpaid and unclaimed dividend amount lying with the Company for financial year 2016 - 17 is due to transfer to the IEPF in the month of October, 2024. The details of the same are available on the Company's website viz. www.hindcompo.com.

During the financial year under review, Mr. Ravi Vaishnav, Company Secretary and Compliance Officer of the Company was appointed as Nodal Officer to ensure compliance with the IEPF Rules. Upon resignation of Mr. Ravi Vaishnav, Mr. P K. Choudhary, Managing Director was appointed as the Nodal Officer and Mr. Arvind Purohit, the then Deputy Company Secretary as Deputy Nodal Officer to ensure compliance with the IEPF Rules w.e.f. 11^th May, 2024.

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:

On 7^th June, 2024, the Acuite Ratings & Research Limited upgraded 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 shares 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

Place: Mumbai P. K. Choudhary Lalit Kumar

Date: 14^th August, 2024 Managing Bararia

Director Independent

DIN: 00535670 Director

DIN: 00204670