Mar 31, 2023
Your Board of Directors has pleasure in presenting the 36th Annual Report on the business and operations of your Company together with the Audited Financial Statements for the financial year ended March 31,2023.
Your Company''s financial performance (standalone and consolidated) for the financial year ended March 31,2023 is summarised below:
(Rs. in Crore) |
||||
Particulars |
Standalone Consolidated |
|||
2022-23 |
2021-22 |
2022-23 |
2021-22 |
|
Revenue from Operations (Net) |
4,395.68 |
4,286.44 |
4,743.31 |
4,727.11 |
Other Income |
49.46 |
43.83 |
47.18 |
42.91 |
Total Income |
4,445.14 |
4,330.27 |
4,790.49 |
4,770.02 |
Total Operating Expenses |
3,929.19 |
3,758.66 |
4,124.63 |
4,077.04 |
Depreciation and Amortisation expenses |
57.43 |
57.30 |
82.97 |
78.25 |
Total Expenses |
3,986.62 |
3,815.96 |
4,207.60 |
4,155.29 |
Profit before Finance Cost and Tax |
458.52 |
514.31 |
582.89 |
614.73 |
Finance Cost |
116.83 |
132.64 |
152.19 |
166.40 |
Share of net profits of joint ventures accounted for using equity method |
- |
- |
(0.09) |
0.16 |
Exceptional Items |
- |
- |
- |
6.38 |
Profit before Tax (PBT) |
341.69 |
381.67 |
430.61 |
442.11 |
Tax Expense Net of MAT Credit Entitlement |
87.09 |
98.89 |
112.9 |
116.25 |
Profit after Tax (PAT) |
254.60 |
282.78 |
317.71 |
325.86 |
Attributable to: |
||||
Shareholders of the Company |
- |
- |
300.97 |
313.12 |
Non-Controlling Interests |
- |
- |
16.74 |
12.75 |
Opening Balance of Retained Earnings |
1,444.65 |
1,160.24 |
1,510.63 |
1,196.28 |
Profit for the year |
254.60 |
282.77 |
300.97 |
313.12 |
Transfer to Retained Earnings |
0.30 |
20.98 |
(0.22) |
20.57 |
Amount available for appropriation |
1,699.55 |
1,463.99 |
1,811.38 |
1,529.97 |
Appropriations: |
||||
Dividend on Equity Shares (Previous Year) |
(24.80) |
(19.34) |
(24.80) |
(19.34) |
Closing Balance of Retained Earnings |
1,674.75 |
1,444.65 |
1,786.58 |
1,510.63 |
During the FY23, total Consolidated Income of your Company is H4,790.49 crores as compared to H4,770.02 crores during the previous year, showing an increase of 0.43%.
Your Company has achieved Consolidated EBIDTA of H665.86 crores in FY23 from H692.98 crores in the previous year, recording a decline of 3.91%. Profitability, i.e., Consolidated PBT has decreased by 2.60% to H430.61 crores in FY23 from H442.11 crores during the previous year.
In FY23, your Company has a Consolidated PAT of H317.71 crores from H325.86 crores in the previous year, slight decline of 2.50%.
The net worth of your Company has increased during the year under review to H2,993.01 crores from H2,728.36 crores in the previous year.
Gross Debt
The consolidated Debt in FY23 stood at H748.31 crores as against H729.78 crores in FY22.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of Section 129 read with Schedule III to the Companies Act, 2013 (hereinafter referred to as the "Act") and the Companies (Accounts) Rules, 2014, Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the "SEBI Listing Regulations") and applicable Indian Accounting Standards, the Audited Consolidated Financial Statements of the Company for the FY23, together with the Auditors'' Report form part of this Annual Report.
The Board of Directors has decided to retain the entire amount of profits for the FY23, under Retained Earnings and has not transferred any amount to the General Reserves, during the year under review.
Your Board of Directors, at its meeting held on May 08, 2023, has recommended a Dividend @20% i.e., H0.20/- (Twenty Paise) per equity share of face value of HI/- each, aggregating to dividend pay-out of H28.58 crores for the financial year ended March 31, 2023, subject to approval of shareholders at the ensuing annual general meeting ("AGM") of the Company. The above decision is in accordance with the Company''s Dividend Distribution Policy.
The dividend shall be subject to deduction of TDS before payment to shareholders, as per applicable provisions of the Income-Tax Act, 1961.
As per Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, top 1000 listed companies based on the market capitalisation, shall formulate a Dividend Distribution Policy.
Accordingly, the Policy has been adopted by the Board of Directors of the Company setting out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/ or retaining profits earned by the Company.
In accordance with the applicable provisions of the Act read with the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), all unclaimed dividends are required to be transferred by the Company to the IEPF, which remain unpaid or unclaimed for a period of seven years, from the date of transfer to Unpaid Dividend Account.
Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for seven consecutive years or more shall be transferred to the demat account of the Investor Education and Protection Fund Authority ("IEPF Authority").
During the year under review, no amount of the unclaimed/ unpaid dividend and any such share in the Company, was due to be transferred to the IEPF Authority.
The following table provides a list of years for which unclaimed dividends and their corresponding shares would become eligible to be transferred to the IEPF on the dates mentioned below:
Financial Year |
Dividend per Share (7) |
Date of Declaration |
Last date for claiming Dividend |
Due Date for Transfer |
Amount (K) (Unpaid as on March 31,2023) |
2017-18 |
0.06 |
September 29, 2018 |
November 04, 2025 |
December 04, 2025 |
10,32,187.80 |
2018-19 |
0.10 |
September 28, 2019 |
November 03, 2026 |
December 03, 2026 |
16,29,588.40 |
2020-21 |
0.15 |
September 30, 2021 |
November 05, 2028 |
December 05, 2028 |
24,46,573.47 |
2021-22 |
0.18 |
September 30, 2022 |
November 05, 2029 |
December 05, 2029 |
31,63,367.71 |
Details of unpaid dividend for the FY18, 2018-19, 2020-21 and 2021-22, can be accessed from the website of the Company at www.hfcl.com and claim can be made by making request to the Company.
The Company has designated Mr. Manoj Baid, President & Company Secretary of the Company as a Nodal Officer for the purpose of IEPF Authority.
INDIAN ACCOUNTING STANDARDS (IND-AS)
Financial Statements of your Company and its subsidiaries, for the financial year ended March 31, 2023, are prepared in accordance with Indian Accounting Standards (Ind-AS), as notified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.
During the FY23, your Company has not accepted any deposit within the meaning of Section 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.
SHARE CAPITAL AND CHANGES IN CAPITAL STRUCTURE
As on March 31, 2023, the Authorised Share Capital of your Company stood at H760 crores (Rupees Seven Hundred Sixty crores only) divided into 510 crores (Five Hundred Ten crores) equity shares of face value of H1/- (Rupee One) each, aggregating to H510 crores (Rupees Five Hundred Ten crores only) and 2.50 crores (Two crores Fifty Lakhs) Cumulative Redeemable Preference Shares (CRPS) of H100/- (Rupees Hundred) each, aggregating to H250 crores (Rupees Two Hundred Fifty crores only).
As on March 31, 2023, the Paid-up Equity Share Capital of your Company stood at H137.78 crores comprising of 137,77,58,321 equity shares of face value of H1/- each.
Allotment of equity shares /warrants: During the year, your Company, on June 08, 2022, had allotted 11,74,100 equity shares of face value of H1/- each, to HFCL Employees'' Trust for implementing the benefits of HFCL Employees'' Long Term Incentive Plan - 2017, in lieu of the vested Employee Stock Options (ESOPs) granted to eligible employees of the Company, pursuant to the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.
Further, during the year, the Allotment Committee (Warrants) of the Board of Directors, vide its resolution dated October 15, 2022, had allotted 1,41,00,000 (One crores Forty One Lakh) Warrants convertible into 1,41,00,000 equity shares at a price of H80/- per Equity Share (Warrant Exercise Price), to persons belonging to Promoter and Non-Promoter category in accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("SEBI ICDR Regulations") and applicable provisions the Companies Act, 2013, as approved by the Board of Directors and the Shareholders of the Company at their meetings held on September 02, 2022 and September 30, 2022 respectively.
The Company had received an upfront amount of H20/- (Rupees Twenty Only), per warrant which is equivalent to 25% of Warrant Exercise Price, being the warrants subscription price aggregating to H28,20,00,000. The Warrant Holders will be required to make payments of balance 75% of the Warrants Exercise Price, at the time of exercise of the right attached to Warrant(s) to subscribe to equity share(s). The tenure of Warrants shall not exceed 18 (eighteen) months from the date of allotment. If the entitlement against the Warrants to apply for the equity shares of the Company is not exercised by the Warrant Holders within the aforesaid period of 18 (eighteen) months, the entitlement of the Warrant holder to apply for equity shares of the Company along with the rights attached thereto shall expire and any amount paid by the Warrant Holders on such Warrants shall stand forfeited by the Company. There are 1,41,00,000 convertible warrants in the Company, which are pending for conversion, as on the date of this Report.
Qualified Institutions Placement: In order to meet funding requirements of capital expenditure for capacity expansion of optic fiber and optic fiber cables by the Company or through its subsidiaries ("OFC Expansion"); funding expenditure towards research & development initiatives including acquisition of technologies; repayments/pre-payments of short term borrowings availed from banks; funding working capital requirements and general corporate purposes, the Board of Directors of the Company at its meeting held on September 02, 2022 which was also approved by the Shareholders of the Company at its Annual General Meeting held on September 30, 2022, decided to raise funds up to ''650 crores by way of issue of Equity Shares, through various permissible modes under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("SEBI ICDR Regulations") and the Act and the rules made thereunder.
Subsequently, the Fund Raising Committee of Directors has, at its meeting held on August 28, 2023, approved that the proposed fund raise shall be by way of issue of Equity Shares through a qualified institutions placement ("QIP") in accordance with the provisions of the SEBI ICDR Regulations and the Act and the rules made thereunder, each as amended.
Pursuant to above, the Fund Raising Committee of Directors, has allotted 5,10,14,491 equity shares through QIP at an issue price of ''69/- per equity share (including a premium of ''68/-per equity share) aggregating to approximately ''352 crores, on August 31, 2023.
Pursuant to the said allotment, the paid-up equity share capital of the Company increased from ''137,77,58,321 divided into 137,77,58,321 equity shares of ''1/- each to ''142,87,72,812/- divided into 142,87,72,812 equity shares of ''1/- each, as at August 31,2023.
Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise.
MANAGEMENT DISCUSSION AND ANALYSIS (MD&A) REPORT
The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of the SEBI Listing Regulations, is presented in a separate section, forming part of this Annual Report.
CORPORATE GOVERNANCE
Your Company is committed to benchmark itself with global standards for providing good corporate governance. Your Board constantly endeavors to take the business forward in such a way that it maximises long term value for the stakeholders. The Company has put in place an effective corporate governance system which ensures that the provisions of SEBI Listing Regulations are duly complied with.
A detailed report on the Corporate Governance pursuant to the requirements of the SEBI Listing Regulations forms part of this Annual Report.
A Certificate from the Secretarial Auditor of the Company, confirming compliance of conditions of corporate governance as stipulated in SEBI Listing Regulations, is provided in the Report on Corporate Governance which forms part of the Corporate Governance Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
As stipulated under Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility and Sustainability Report, describing the initiatives taken by the Company from environmental, social and governance perspective forms part of this Annual Report.
EMPLOYEES'' LONG TERM INCENTIVE PLAN
In terms of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI SBEB & SE Regulations"), as amended from time to time and with the objective to promote entrepreneurial behaviour among employees of the Company, motivate them with incentives and reward their performance with ownership in proportion to the contribution made by them as well as align the interest of the employees with that of the Company, "Himachal Futuristic Communications Limited Employees'' Long Term Incentive Plan-2017" ("HFCL Plan 2017") was approved by the Board of Directors of your Company on August 26, 2017, which was further approved by the members of the Company, in their 30th Annual General Meeting held on September 25, 2017.
The HFCL Plan 2017 comprises of the following three subsets:
1. Employee Stock Option Plan (ESOP) under which Options would be granted;
2. Restricted Stock Units Plan (RSUP) under which Units would be granted;
3. Employee Stock Purchase Scheme (ESPS) under which shares would be issued.
During the financial year ended March 31,2023, your Company has not granted any ESOPs and RSUs in terms of the HFCL Plan 2017.
During the year under review, the RSUs granted under the HFCL Plan 2017 were forfeited due to non-achievement of defined annual performance parameters as determined by the Nomination, Remuneration and Compensation Committee in its meeting held on April 23, 2022.
Further, your Company, on June 08, 2022, has also allotted 11,74,100 equity shares of face value of HI/- each, to HFCL Employees'' Trust for implementing the benefits of HFCL Employees'' Long Term Incentive Plan - 2017, in lieu of the vested Employee Stock Options (ESOPs) granted to eligible employees of the Company, pursuant to the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014 (now replaced with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI SBEB & SE Regulations") w.e.f. August 13, 2021). Applicable disclosures as stipulated under the SEBI SBEB & SE Regulations with regard to the HFCL Plan 2017, are provided as Annexure - A to this Report.
Your Company has obtained a Certificate from Mr. Baldev Singh Kashtwal, Secretarial Auditor (FCS: 3616; C.P. No.: 3169) that the HFCL Plan, 2017 for grant of stock options has been implemented in accordance with the SEBI SBEB & SE Regulations and the resolution passed by the members in their 30th Annual General Meeting held on September 25, 2017.
The said Certificate would be placed at the ensuing annual general meeting for inspection by the members.
The Nomination, Remuneration and Compensation Committee of the Board of Directors, inter-alia, administers and monitors, the HFCL Plan 2017 of your Company.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
As on March 31, 2023, your Company had nine subsidiaries and two associates viz.
1. HTL Limited,
2. Polixel Security Systems Private Limited,
3. Moneta Finance Private Limited,
4. HFCL Advance Systems Private Limited,
5. Raddef Private Limited,
6. DragonWave HFCL India Private Limited,
7. HFCL Technologies Private Limited
8. HFCL B.V. Netherlands
9. HFCL Inc. USA
10. Nimpaa Telecommunications Private Limited - Associate
11. BigCat Wireless Private Limited - Associate
The Company regularly monitors the performance of these companies.
There has been no material change in the nature of the business of the subsidiaries.
A statement containing the salient features of the financial statements of subsidiary companies of the Company in the prescribed Form AOC- 1 forms a part of the Consolidated Financial Statements (CFS) in compliance with Section 129(3) and other applicable provisions, if any, of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, as amended.
The said Form also highlights the financial performance of each of the subsidiaries, included in the CFS of the Company, pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.
In accordance with the provisions of Section 136 of the Act, the financial statements of the subsidiaries are available for inspection by the members at the Registered Office of the Company during business hours on all days except Saturdays, Sundays and public holidays up to the date of the ensuing AGM. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at HFCL Limited, 8, Commercial Complex, Masjid Moth, Greater Kailash -II, New Delhi - 110048 and the same shall be sent by post.
The financial statements including the CFS and all other documents required to be attached to this Report have been uploaded on the website of the Company at www.hfcl.com.
The Company has adopted a ''Policy for determining Material Subsidiaries'' as per requirements stipulated in Explanation to Regulation 16(1)(c) of the SEBI Listing Regulations.
The said policy may be accessed on the website of the Company at https://www.hfcl.com/wp-content/uploads/2021/07/HFCL-Policy-on-Determining-Material-Subsidiaries Revised.pdf
The Company has one material subsidiary company viz. HTL Limited, as on March 31, 2023.
DIRECTORS AND KEY MANAGERIAL PERSONNELS (KMPs)
In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Mr. Ranjeet Mal Kastia (DIN: 00053059), Director (Non-Executive), is liable to retire by rotation at the ensuing AGM and being eligible offers himself for re-appointment.
The brief resume of him and other related information are being given in the Notice convening the 36th AGM of your Company.
Your Directors recommend his re-appointment as a Non-Executive Director of your Company.
The Nomination, Remuneration and Compensation Committee and the Board of Directors, on the basis of performance evaluation of Independent Directors and taking into account the external business environment, the business knowledge, acumen, experience and the substantial contribution made by Mr. Bharat Pal Singh (DIN: 00739712) during his tenure, had recommended to the shareholders that continued association of Mr. Bharat Pal Singh as an Independent Directors would be beneficial to the Company.
Based on the above, the shareholders, in their AGM held on September 30, 2022, approved re-appointment of Mr. Bharat Pal Singh for a second term of consecutive three years, commencing from January 21, 2023 to January 20, 2026 to hold office as Independent Director of the Company, not liable to retire by rotation on the Board of the Company.
In the opinion of the Board, Mr. Bharat Pal Singh possess requisite qualifications, experience, expertise and holds highest standards of integrity.
Further Mr. Bharat Pal Singh is exempt to qualify on-line proficiency self-assessment test conducted by the Indian Institute of Corporate Affairs.
IDBI Bank Limited vide its letter no. LCG-SSCB.53/15/Nom.8/ 202223 dated April 30, 2022 which was received by the Company on May 02, 2022, has withdrawn the nomination of Mr. Ramakrishna Eda (DIN: 07677647) Non-Executive Non-Independent Director who was nominated on the Board of the Company by IDBI Bank Limited.
Consequently, Mr. Ramakrishna Eda has ceased to be a director (Nominee-IDBI Bank Limited) of the Company w.e.f. May 02, 2022.
Further, Board of Directors places on record its sincere appreciation for the support and valuable guidance given by Mr. Ramakrishna Eda during his tenure as Non-Executive Director of the Company.
During the year under review, Mr. Mahendra Nahata, Managing Director, Mr. Vijay Raj Jain, Chief Financial Officer and Mr. Manoj Baid, President & Company Secretary, continue to be the Key Managerial Personnel of your Company, in accordance with the provisions of Section 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The Company has issued confirmation to its Directors, confirming that it has not made any default under Section 164(2) of the Act, as on March 31, 2023.
The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Act, read with the Schedules and Rules issued thereunder as well as clause (b) of sub-regulation (1) of Regulation 16 of the SEBI Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and that they are independent of management.
In terms of Regulation 25(8) of the SEBI Listing Regulations, the Independent Directors have confirmed 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.
The Independent Directors have also confirmed that they have complied with the Company''s Code of Conduct.
In the opinion of the Board, Independent Directors fulfil the conditions specified in the Act, Rules made thereunder and SEBI Listing Regulations and are independent of the management.
As per Regulation 25(7) of SEBI Listing Regulations, the Independent Director of the Company need to be imparted with familiarisation programme.
The familiarisation programme aims at making the Independent Directors of the Company familiar with the business and operations of the Company through various structured familiarisation Programmes.
The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company and related matters are available on the website of the
REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES
As required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, information relating to percentage increase in remuneration, ratio of remuneration of each Director and Key Managerial Personnel to the median of employees'' remuneration etc. is annexed as Annexure (B) to this report.
The details of remuneration of top 10 employees of the Company as required to be disclosed under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. Further, pursuant to second proviso to Section 136(1) of the Act, this Report is being sent to the members excluding the said information. Any member interested in obtaining a copy of the same may write to the Company Secretary and Compliance Officer at [email protected]
The remuneration paid to the Directors is in accordance with the Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19 of the SEBI Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).
The Managing Director of your Company does not receive remuneration or commission from any of the subsidiaries of the Company.
Pursuant to provisions of Section 178 of the Act and the SEBI Listing Regulations, the Nomination, Remuneration and Compensation Committee (''NRC Committee'') of your Board has formulated a Remuneration Policy for the appointment and determination of remuneration of the Directors including criteria for determining qualifications, positive attributes, independence of a director, Key Managerial Personnel, Senior Management Personnel and other employees of your Company.
The NRC Committee has also developed the criteria for determining the qualifications, positive attributes and independence of Directors and for making payments to Executive and Non-Executive Directors and Senior Management Personnel of the Company.
The detailed Policy is available on the Company''s website at https://www.hfcl.com/wp-content/uploads/2019/06/ Remuneration-Policy.pdf and the salient aspects covered in the Remuneration Policy have been outlined in the Corporate Governance Report, which forms part of this Report.
Six meetings of the Board of Directors were held during the FY23.
The intervening gap between any two consecutive meetings of the Board was within the stipulated time frame prescribed under the Act and the SEBI Listing Regulations.
Details of meetings held and attendance of directors are mentioned in Corporate Governance Report, which forms part of this Annual Report.
In terms of requirements of Schedule IV to the Act and Regulation 25 of the SEBI Listing Regulations, a separate meeting of the Independent Directors was held on March 28, 2023 for the FY23.
The meeting of the Independent Directors was attended by all the four independent directors, namely, Mr. Bharat Pal Singh, Mr. Ajai Kumar, Mr. Surendra Singh Sirohi, and Dr. (Ms.) Tamali Sengupta.
Your Company has constituted several Committees of the Board which have been established as part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.
As on March 31, 2023, your Board has 05 (five) mandatory Committees, namely,
1. Audit Committee;
2. Nomination, Remuneration & Compensation (NRC) Committee;
3. Stakeholders'' Relationship Committee (SRC);
4. Corporate Social Responsibility (CSR) Committee; and
5. Risk Management Committee (RMC).
The details with respect to the composition, powers, roles, terms of reference, number of meetings etc. of the Committees held during the FY23 and attendance of the Members at each Committee Meeting, are provided in the Corporate Governance Report which forms part of Annual Report.
All the recommendations made by the Committees of the Board including the Audit Committee were accepted by the Board.
Also, details pertaining to Risk Management & Internal Financial Control are mentioned in Management Discussion & Analysis, which forms part of the Annual Report for FY23 of the Company.
The Act mandates formal annual evaluation by the Board of its own performance and that of its committees and individual Directors. Schedule IV to the Act provides that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Directors being evaluated.
Pursuant to the provisions of the Act read with relevant rules issued thereunder, Regulation 17(10) of the SEBI Listing Regulations and the Circular issued by SEBI on January 5, 2017 with respect to Guidance Note on Board Evaluation, the evaluation of the annual performance of the Directors/ Board/Committees was carried out for the FY23.
The parameters for the performance evaluation of the Board, inter-alia, include performance of the Board on deciding long term strategy, rating the composition and mix of Board members, discharging of governance and fiduciary duties, handling critical and dissenting suggestions, etc.
The performance of the Board was evaluated after seeking inputs from all the Directors on the basis of above parameters.
The performance of the Committees was evaluated after seeking inputs from the Committee members on the basis of criteria such as the composition of Committees, effectiveness of Committee meetings, etc.
The Nomination, Remuneration and Compensation Committee reviewed the performance of the Individual Directors, the Committees of the Board and the Board as a whole. A questionnaire for the evolution of the Board, its committees and the individual members of the Board, covering various aspects of the performance of the Board and its Committees, including composition and quality, roles and responsibilities, processes and functioning, adherence to Code of Conduct and Ethics and best practices in corporate governance was sent to the Directors.
The Board of Directors reviewed the performance of the Independent Directors. Performance Evaluation was done on the basis of criteria such as the contribution of the individual director to the Board and Committee meetings like preparedness on the agenda items, technical knowledge on the subject matter, meaningful and constructive contribution and inputs in meetings, etc.
In a separate meeting of the Independent Directors, performance of Non-Independent Directors and the Board as a whole was evaluated, taking into account the views of Executive Directors and Non-Executive Directors.
The Directors expressed their satisfaction with the evaluation process.
The details of the evaluation process are set out in the Corporate Governance Report which forms part of this Annual Report.
AUDITORS AND AUDITORS'' REPORT
M/s S. Bhandari & Co. LLP, Chartered Accountants (FRN: 000560C/ C400334) and M/s Oswal Sunil & Company, Chartered Accountants (FRN: 016520N) were re-appointed as Statutory Auditors for second term of 05 (five) consecutive years, at the 35th Annual General Meeting (AGM) of the Company, held on September 30, 2022, for auditing the accounts of the Company from the financial year 202223 to 2026-27.
The Auditors'' Report does not contain any qualification, reservation or adverse remark.
Further, there were no frauds reported by the Statutory Auditors to the Audit Committee or the Board under Section 143(12) of the Act.
Pursuant to provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended or re-enacted from time to time), your Company had appointed Mr. Baldev Singh Kashtwal, Company Secretary in whole-time practice, having COP No. 3169 and Membership No. F-3616, for conducting the Secretarial Audit of your Company for the FY23.
The Secretarial Audit Report in prescribed form MR-3, issued by the Secretarial Auditor is annexed herewith as Annexure - C to this Report. Further, as required under Regulation 24A of the SEBI Listing Regulations, the Secretarial Audit Report of HTL Limited, a material subsidiary of the Company is also annexed herewith as Annexure C1 to this Report.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark for the FY23.
The Board of Directors of the Company has appointed M/s SKG & Co., Cost Accountants (FRN.000418), having its office at Plot no. 32, 3rd Floor, Pocket -8, Sector -25, Rohini, Delhi - 110085 as Cost Auditor of the Company for conducting the Cost Audit for financial year 2022-23. The Report of the Cost Auditor will be filed with the Ministry of Corporate Affairs within the prescribed period.
INSOLVENCY AND BANKRUPTCY CODE, 2016
There is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the FY23.
VIGIL MECHANISM/ WHISTLE-BLOWER POLICY
The Board of Directors of your Company has formulated a Whistle-Blower Policy, which is in compliance with the provisions of Section 177(9) & (10) of the Act and Regulation 22 of the SEBI Listing Regulations.
The Company, through this Policy envisages to encourage the Directors and employees of the Company to report to the appropriate authorities any unethical behaviour, improper, illegal or questionable acts, deeds, actual or suspected frauds or violation of the Company''s Codes of Conduct for the Directors and the Senior Management Personnel.
During FY23, no complaint was received and no individual was denied access to the Audit Committee for reporting concerns, if any.
The Policy on Vigil Mechanism/Whistle-Blower Policy may be accessed on the Company''s website at the link: https://www.hfcl. com/wp-content/uploads/2020/01/HFCL-Whistle-Blower-Policy Revised1.pdf
Brief details of establishment of Vigil Mechanism in the Company, is also provided in the Corporate Governance Report which forms part of this Report.
CREDIT RATINGS
CARE Ratings Limited (a SEBI Registered Credit Rating Agency) ("CARE") vide its letter dated June 30, 2022, had reaffirmed the credit ratings for the Bank Loan facilities of the Company, the details of which are given below: -
Instrument/Facility Ratings |
Rating Action |
Long term Bank CARE A; Stable Facilities - Term Loans (Single A; Outlook: |
Reaffirmed |
Stable) |
|
Short term Bank CARE A2 (A Two Facilities - Cash Credit Plus) |
Reaffirmed |
Subsequently, CARE, vide its letters dated July 03, 2023, has enhanced the credit rating for the short term bank facilities of the Company to CARE A1 (A One) from CARE A2 (A Two Plus). Further, CARE has also reaffirmed the credit rating for the long term bank facilities of the Company.
The details of Credit ratings assigned to the Company for bank facilities are as under:
Insturment/Facilitiy Ratings |
Rating Action |
|
Short Term Bank |
Care A1 (A One) |
Revised from CARE |
Facilities |
A2 (A Two Plus) |
|
Long Term Bank |
Care A; Stable |
Reaffirmed |
Facilities |
(Single A; Outlook: Stable) |
Insturment/Facilitiy Ratings |
Rating Action |
|
Long Term Fund |
IVR A/Stable (IVR A |
Reaffirmed |
Based Bank Facilities - Term Loans |
with Stable Outlook) |
|
Short Term Fund |
IVR A/Stable (IVR A |
Reaffirmed |
Based Bank Facilities - Cash Credit |
with Stable Outlook) |
|
Short Term Non-Fund IVR A1 (IVR A One) Based Bank Facilities - LC/BGs |
Reaffirmed |
The Annual Return of the Company as on March 31, 2023, in prescribed e-Form MGT-7 in accordance with Section 92(3) of the Act, read with Section 134(3)(a) of the Act, is available on the Company''s website at www.hfcl.com
Further the Annual Return (i.e., e-form MGT-7) for the FY23 shall be filed by the Company with the Registrar of Companies, Himachal Pradesh, within the stipulated period.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of loans, guarantees and investments, as on March 31, 2023, as stipulated under Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, are as follows:-
Infomerics Valuation and Rating Pvt. Ltd. (RBI & SEBI Registered Credit Rating Agency) vide its letter dated November 22, 2022, had assigned the credit ratings for the Bank Loan facilities of the Company, the details of which are as below: -
Amount (K in crores) |
|
Loans given |
90.08 |
Guarantees given |
268.16 |
Investments made |
102.97 |
Loans given, Guarantees provided and Investments made during the FY23: |
|||
Name of the entity |
Relation |
Amount Particulars of Loans, Purpose for which the Loans, Guarantees (K in crores) Guarantees & and Investments are proposed to be Investments utilised by the recipient |
|
BigCat Wireless Private Limited |
Associate |
7 Investment in Equity Shares |
For Product development, working capital and general corporate business purposes. |
Raddef Private Limited |
Subsidiary |
3.38 Loan given |
For Product development, working capital and general corporate business purposes |
HFCL Technologies Private Limited |
Subsidiary |
44.08 Loan given |
For working capital and general corporate business purposes. |
For more details, please refer Note No.7, 9, 48(c) and 52 to the Standalone Financial Statements for FY23 of the Company. |
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Your Company has adopted a "Policy on Dealing with and Materiality of Related Party Transactions", in accordance with the provisions of the Act and Regulation 23 of the SEBI Listing Regulations, inter-alia, providing a framework for governance
and reporting of Related Party Transactions including material transactions and threshold limits for determining materiality.
The said Policy is also available on the website of the Company at the web-link: https://www.hfcl.com/wp-content/ uploads/2022/06/HFCL-Policy-on-RPTs Revised.pdf
During the year under review, all contracts/ arrangements/ transactions entered into by the Company with related parties were in ordinary course of business and on arm''s length basis.
The Company has entered into contracts/ arrangements/ transactions with related parties which qualify as material in accordance with the Policy of the Company on materiality of related party transactions.
Thus, there are transactions required to be reported in prescribed Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the details of which is annexed herewith as Annexure - D to this Report.
All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions, formulated by the Company.
There are no materially significant related party transactions that may have potential conflict with interest of the Company at large.
The details of the transactions with person(s) or entities forming part of the Promoter(s)/Promoter(s) Group, which individually hold 10% or more shareholding in the Company and other related parties as per Indian Accounting Standards (IND-AS) - 24 are set out in Note 52 to the Standalone Financial Statements of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of energy conservation, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act, read with the Rule 8 of the Companies (Accounts) Rules, 2014, are annexed herewith as Annexure - E to this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has been proactively carrying out CSR activities since more than two decades.
The Company is undertaking CSR activities through Registered Society i.e., HFCL Social Services Society ("HSSS") established in the year 1996.
In compliance with requirements of Section 135 of the Act, the Company has laid down a Corporate Social Responsibility (CSR) Policy. The CSR Policy is available on the website of the Company and may be accessed at the web-link https://www.hfcl.com/wp-content/uploads/2022/09/CSR Poliicy 2022.pdf.
The composition of the CSR Committee, brief contents of CSR Policy, unspent amount and reason thereof, if any, and report on CSR activities carried out during the FY23, in the format, prescribed under Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure - F.
For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which forms part of this Report.
MATERIAL CHANGES AFFECTING HE COMPANY
A. Change in nature of business
The Company has not undergone any change in the nature of the business during the FY23.
B. Material changes and commitments, if any, affecting the financial position of the Company
There are no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the FY23 and the date of this Report.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS, TRIBUNALS AFFECTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE
There is no significant/material order passed by the Regulators, Courts, Tribunals affecting the going concern status and the Company''s operations in future.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has in place a Policy on Prevention of Sexual Harassment at Workplace, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and the rules made thereunder.
Internal Complaints Committee(s) (ICCs) at each workplace of the Company, have been set up to redress complaints, if any, received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.
ICC of each workplace of the Company has also filed Annual Return for the calendar year 2022 at their respective jurisdictional offices, as required under Section 21(1) of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013.
During the year under review, the Company has received 1 (one) complaint from one of the employees of the Company, which has been resolved.
SIGNIFICANT DEVELOPMENTS
Although, the Company has achieved various milestones which have already been set out in the Management Discussion and Analysis forming part of the Annual Report, however there were no other significant developments during the year under review.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3)(c) of the Act, the Directors confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there were no material departures from the same;;
(b) the Directors had selected such accounting policies and applied them consistently and made judgements 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 March 31,2023 and of the profits of the Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors, had 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 had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The equity shares of your Company are presently listed on the BSE Limited (''BSE'') and the National Stock Exchange ofIndia Limited (''NSE'').
The Company has paid annual listing fee for the FY24 to the BSE Limited and the National Stock Exchange of India Limited.
Your Company''s Scrip has come under compulsory dematerialisation w.e.f. November 29, 1999 for Institutional Investors and w.e.f. January 17, 2000, for all Investors. So far, 99.96% of the equity shares have been dematerialised.
The ISIN allotted to the equity shares of the Company is INE548A01028.
IMPLEMENTATION OF CORPORATE ACTION
During the year under review, the Company has not failed to implement any Corporate Action within the specified time limit.
COMPLIANCE WITH SECRETARIAL STANDARDS
Pursuant to the provisions of Section 118(10) of the Act, the Company has complied with the applicable provisions of the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).
The Financial and Statutory Data presented in this Report is in line with the requirements of the Act (including the rules made
thereunder), Indian Accounting Standards (Ind AS) and the Secretarial Standards (SS).
REPORTING PERIOD
The Financial Information is reported for the period April 01,2022 to March 31, 2023. Some parts of the Non-Financial Information included in this Board''s Report are provided as on the date of this Report.
CAUTIONARY STATEMENT
Statements in the Management Discussions & Analysis Report describing the Company''s projections, estimates, expectations or predictions may be ''forward looking statements'' within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the Company''s operations include demand supply conditions, raw material prices, changes in government regulations, tax regimes and economic developments within the Country and abroad and such other factors.
PERSONNEL
Your Directors wish to place on record their sincere appreciation for the devoted services of all the employees and workers at all levels and for their dedication and loyalty, which has been critical for the Company''s success.
ACKNOWLEDGEMENTS
Your Company''s organisational culture upholds professionalism, integrity and continuous improvement across all functions as well as efficient utilisation of the Company''s resources for sustainable and profitable growth.
Your Directors wish to place on record their appreciation for the valuable co-operation and support received from the Government of India, various State Governments, the Banks and other stakeholders such as, shareholders, customers and suppliers, among others. The Directors look forward to their continued support in future.
The Directors thank the Central Government, Government of Goa, Government of Telangana, Government of Himachal Pradesh, IDBI Bank Limited, State Bank of India, Punjab National Bank, erstwhile Oriental Bank of Commerce & United Bank of India, Bank of Baroda, Union Bank of India, ICICI Bank Limited, Indian Bank, Yes Bank Limited, KEB Hana Bank and other Banks for all co-operations, facilities and encouragement they have extended to the Company.
Your Directors acknowledge the continued trust and confidence you have reposed in the Company.
Mar 31, 2022
Your Board of Directors has pleasure in presenting the 35th Annual Report on the business and operations of your Company together with the Audited Financial Statements for the financial year ended March 31,2022.
Your Company''s financial performance (standalone and consolidated) for the financial year ended March 31, 2022 is summarized below:
Particulars |
'' in crore Standalone Consolidated |
|||
2021-22 |
2020-21 |
2021-22 |
2020-21 |
|
Revenue from Operations (Net) |
4,286.44 |
4,105.87 |
4,727.11 |
4,422.96 |
Other Income |
43.83 |
33.22 |
42.91 |
34.76 |
Total Income |
4,330.27 |
4,139.09 |
4,770.02 |
4,457.72 |
Operating Expenses |
3,526.83 |
3,450.75 |
3,809.30 |
3,656.77 |
Other Expenditure |
231.84 |
186.51 |
267.74 |
216.61 |
Depreciation and Amortization expenses |
57.30 |
53.59 |
78.25 |
68.63 |
Total Expenses |
3,815.97 |
3,690.85 |
4,155.29 |
3,942.01 |
Profit before Finance Cost and Tax |
514.30 |
448.24 |
614.73 |
515.71 |
Finance Cost |
132.64 |
148.24 |
166.40 |
174.72 |
Share of net profits of joint ventures accounted for using equity method |
- |
- |
0.16 |
- |
Exceptional Items |
- |
4.13 |
6.37 |
4.13 |
Profit before Tax (PBT) |
381.66 |
295.87 |
442.12 |
336.86 |
Tax Expense Net of MAT Credit Entitlement |
98.89 |
73.01 |
116.25 |
90.62 |
Profit after Tax (PAT) |
282.77 |
222.86 |
325.87 |
246.24 |
Attributable to: |
||||
Shareholders of the Company |
- |
- |
313.12 |
239.00 |
Non-Controlling Interests |
- |
- |
12.75 |
7.24 |
Opening Balance of Retained Earnings |
1,160.24 |
1,062.12 |
1,196.28 |
1,082.00 |
Total Comprehensive Income for the year |
282.77 |
222.87 |
313.12 |
239.00 |
Transfer to Retained Earnings (out of DRR) |
7.86 |
(124.75) |
7.87 |
(124.72) |
Amount available for appropriation |
1,450.87 |
1,160.24 |
1,517.27 |
1,196.28 |
Appropriations: |
||||
Dividend on Equity Shares (Previous Year) |
(19.34) |
- |
(19.34) |
- |
Closing Balance of Retained Earnings |
1,431.53 |
1,160.24 |
1,497.93 |
1,196.28 |
During the FY22, total Consolidated Income of your Company is '' 4,770.02 Crores as compared to ? 4,457.72 Crores during the previous year, showing an increase of 7.00%.
Your Company has achieved Consolidated EBIDTA of ? 692.98 Crores in FY22 from ? 584.34 Crores in the previous year, recording a growth of 18.59%. Profitability, i.e., Consolidated PBT has increased by 31.25% to ? 442.12 Crores in FY21 from ? 336.86 Crores during the previous year.
In FY22, your Company has a Consolidated PAT of ? 325.87 Crores from ? 246.24 Crores in the previous year, recording a growth of 32.34%.
The net worth of your Company has increased during the year under review to ? 2,728.36 Crores from ? 1,876.50 Crores in the previous year.
The consolidated Debt in FY22 stood at ? 729.78 Crores as against ? 919.62 Crores in FY21.
Consolidated Financial Statements
In accordance with the provisions of Section 129 read with Schedule III to the Companies Act, 2013 (hereinafter referred to as the "Act") and the Companies (Accounts) Rules, 2014, Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the "SEBI Listing Regulations") and applicable Indian Accounting Standards, the Audited Consolidated Financial Statements of the Company for the FY22, together with the Auditors'' Report form part of this Annual Report.
The Board of Directors has decided to retain the entire amount of profits for the FY22, under Retained Earnings and has not transferred any amount to the General Reserves, during the year under review.
In the wake of COVID-19 pandemic, each of the business sectors in the economy has been affected, however despite this, your Board of Directors, at its meeting held on April 29, 2022, has recommended
a Dividend @18% i.e., ? 0.18/- (Eighteen Paisa) per equity share of face value of ? 1/- each, aggregating to dividend pay-out of ? 24.80 Crores for the financial year ended March 31, 2022, subject to approval of shareholders at the ensuing annual general meeting ("AGM") of the Company. The above decision is in accordance with the Company''s Dividend Distribution Policy.
The dividend shall be subject to deduction of TDS before payment to shareholders, as per applicable provisions of the Income-Tax Act, 1961.
As per Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021, top 1000 listed companies based on the market capitalization, shall formulate a Dividend Distribution Policy.
Accordingly, the Policy has been adopted by the Board of Directors of the Company setting out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/ or retaining profits earned by the Company.
In accordance with the applicable provisions of the Act read with the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), all unclaimed dividends are required to be transferred by the Company to the IEPF, which remain unpaid or unclaimed for a period of seven years, from the date of transfer to Unpaid Dividend Account.
Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for seven consecutive years or more shall be transferred to the demat account of the Investor Education and Protection Fund Authority ("IEPF Authority").
During the year under review, no amount of the unclaimed/ unpaid dividend and any such share in the Company, was due to be transferred to the IEPF Authority.
The following table provides a list of years for which unclaimed dividends and their corresponding shares would become eligible to be transferred to the IEPF on the dates mentioned below:
Financial Year |
Dividend per Share (?) |
Date of Declaration |
Last date for claiming Dividend |
Due Date for Transfer |
Amount (?) (Unpaid as on March 31, 2022) |
2017-18 |
0.06 |
September 29, 2018 |
November 04, 2025 |
December 04, 2025 |
10,35,510.84 |
2018-19 |
0.10 |
September 28, 2019 |
November 03, 2026 |
December 03, 2026 |
16,37,521.40 |
2020-21 |
0.15 |
September 30, 2021 |
November 05, 2028 |
December 05, 2028 |
24,83,192.23 |
Details of unpaid dividend for the financial year 2017-18, 2018-19 and 2020-21, can be accessed from the website of the Company at www.hfcl.com and claim can be made by making request to the Company.
The Company has designated Mr. Manoj Baid, Senior Vice-President (Corporate) & Company Secretary of the Company as a Nodal Officer for the purpose of IEPF Authority.
Indian Accounting Standards (Ind-AS)
Financial Statements of your Company and its subsidiaries, for the financial year ended March 31, 2022, are prepared in accordance with Indian Accounting Standards (Ind-AS), as notified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.
During the FY22, your Company has not accepted any deposit within the meaning of Section 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.
Share Capital and changes in Capital Structure
As on March 31, 2022, the Authorized Share Capital of your Company stood at ? 760 Crores (Rupees Seven Hundred Sixty Crores only) divided into 510 Crores (Five Hundred Ten Crores) equity shares of face value of ? 1/- (Rupee One) each, aggregating to ? 510 Crores (Rupees Five Hundred Ten Crores only) and 2.50 Crores (Two Crore Fifty Lakhs) Cumulative Redeemable Preference Shares (CRPS) of ? 100/- (Rupees Hundred) each, aggregating to ? 250 Crores (Rupees Two Hundred Fifty Crores only).
As on March 31, 2022, the Paid-up Equity Share Capital of your Company stood at ? 137.66 Crores comprising of 137,65,84,221 equity shares of face value of ? 1/- each.
During the reporting year, your Company, on July 15, 2021, had allotted 49,34,300 equity shares of face value of ? 1/- each, to HFCL Employees'' Trust for implementing the benefits of HFCL Employees'' Long Term Incentive Plan - 2017, in lieu of the vested Employee Stock Options (ESOPs) granted to eligible employees of the Company, pursuant to the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014.
Qualified Institutions Placement: In order to meet funding requirements for capital expenditure for capacity expansion of optic fibre and optic fibre cables ("OFC Expansion") by the Company or through its subsidiaries; funding capital expenditure requirements for defence facilities; repayment of long term and short term borrowings availed from banks and others, funding expenditure towards upgradation of R&D initiatives (including inorganic growth initiatives); funding long term working capital requirements and general corporate purposes, the Board of Directors of the Company at its meeting held on September 03, 2021 which was also approved by the Shareholders of the Company at its Annual General Meeting held on September 30, 2021, decided to raise funds up to '' 750 crores by way of issue of Equity Shares, through a Qualified Institutions Placement ("QIP"), in accordance with Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 and the Act and the rules made thereunder.
Further, the Company had allotted 8,72,72,727 equity shares through QIP at an issue price of '' 68.75/- per equity share (including a premium of '' 67.75/- per equity share) aggregating to '' 600 crores on December 10, 2021.
Details of utilization of QIP proceeds are given in Corporate Governance Report which forms part of the Board''s Report.
Pursuant to the said allotments, the paid-up equity share capital of the Company increased from '' 128,43,77,194/- divided into 128,43,77,194 shares of '' 1/- each, as on April 01, 2021 to '' 137,65,84,221/- divided into 137,65,84,221 equity shares of '' 1/-each, as at March 31, 2022.
Further, your Company, on June 08, 2022, has also allotted 11,74,100 equity shares of face value of ? 1/- each, to HFCL Employees'' Trust for implementing the benefits of HFCL Employees'' Long Term Incentive Plan - 2017, in lieu of the vested Employee Stock Options (ESOPs) granted to eligible employees of the Company, pursuant to the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014 (now replaced with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 w.e.f. August 13, 2021).
Pursuant to aforesaid allotment, the paid-up equity share capital of the Company stands at '' 137,77,58,321/- divided into 137,77,58,321 equity shares of '' 1/- each as on date.
There are no convertible warrants in the Company, as on the date of this Report.
Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise.
Management Discussion and Analysis (MD&A) Report
The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of the SEBI Listing Regulations, is presented in a separate section, forming part of this Annual Report.
Your Company is committed to benchmark itself with global standards for providing good corporate governance. Your Board constantly endeavors to take the business forward in such a way that it maximizes long term value for the stakeholders. The Company has put in place an effective corporate governance system which ensures that the provisions of SEBI Listing Regulations are duly complied with.
A detailed report on the Corporate Governance pursuant to the requirements of the SEBI Listing Regulations forms part of this Annual Report.
A Certificate from the Secretarial Auditor of the Company, confirming compliance of conditions of corporate governance as stipulated in SEBI Listing Regulations, is provided in the Report on Corporate Governance which forms part of the Corporate Governance Report.
Business Responsibility Report
As stipulated under Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility Report, describing the initiatives taken by the Company from environmental, social and governance perspective forms part of this Annual Report.
Employees'' Long Term Incentive Plan
In terms of the SEBI (Share Based Employee Benefits) Regulations, 2014 (now replaced with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 w.e.f. August 13, 2021) ("SEBI SBEB & SE Regulations"), as amended from time to time and with the objective to promote entrepreneurial behaviour among employees of the Company, motivate them with incentives and reward their performance with ownership in proportion to
the contribution made by them as well as align the interest of the employees with that of the Company, "Himachal Futuristic Communications Limited Employees'' Long Term Incentive Plan-2017" ("HFCL Plan 2017") was approved by the Board of Directors of your Company on August 26, 2017, which was further approved by the members of the Company, in their 30th Annual General Meeting held on September 25, 2017.
The HFCL Plan 2017 comprises of the following three subsets:
1. Employee Stock Option Plan (ESOP) under which Options would be granted;
2. Restricted Stock Units Plan (RSUP) under which Units would be granted;
3. Employee Stock Purchase Scheme (ESPS) under which shares would be issued.
During the financial year ended March 31, 2022, your Company has not granted any ESOPs and RSUs in terms of the HFCL Plan 2017.
Further, the Company had allotted 49,34,300 and 11,74,100 equity shares of face value of ? 1/- each, to HFCL Employees'' Trust for implementing the benefits of HFCL Employees'' Long Term Incentive Plan - 2017, in lieu of the vested Employee Stock Options (ESOPs) granted to eligible employees of the Company, pursuant to the SEBI SBEB & SE Regulations, on July 15, 2021 and June 08, 2022 respectively and the same have also been listed on the stock exchanges, viz. NSE and BSE.
Applicable disclosures as stipulated under the SEBI SBEB & SE Regulations with regard to the HFCL Plan 2017, are provided as Annexure - A to this Report.
Your Company has received a Certificate from Mr. Baldev Singh Kashtwal, Secretarial Auditor (FCS: 3616; C.P. No.: 3169) that the HFCL Plan, 2017 for grant of stock options has been implemented in accordance with the SEBI SBEB & SE Regulations and the resolution passed by the members in their 30th Annual General Meeting held on September 25, 2017.
The said Certificate would be placed at the ensuing annual general meeting for inspection by the members.
The Nomination, Remuneration and Compensation Committee of the Board of Directors, inter-alia, administers and monitors, the HFCL Plan, 2017 of your Company.
Subsidiaries, Joint Ventures and Associate Companies
As on March 31,2022, your Company had nine subsidiaries and two associates viz.
1. HTL Limited,
2. Polixel Security Systems Private Limited,
3. Moneta Finance Private Limited,
4. HFCL Advance Systems Private Limited,
5. Raddef Private Limited,
6. DragonWave HFCL India Private Limited,
7. HFCL Technologies Private Limited w.e.f. June 26, 2021,
8. HFCL B.V. Netherlands w.e.f. October 07, 2021
9. HFCL Inc. USA w.e.f. October 08, 2021,
10. Nimpaa Telecommunications Private Limited - Associate w.e.f. June 14, 2021 and
11. BigCat Wireless Private Limited - Associate w.e.f. November 12, 2021
The Company regularly monitors the performance of these companies.
There has been no material change in the nature of the business of the subsidiaries.
A statement containing the salient features of the financial statements of subsidiary companies of the Company in the prescribed Form AOC - 1 forms a part of the Consolidated Financial Statements (CFS) in compliance with Section 129(3) and other applicable provisions, if any, of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, as amended.
The said Form also highlights the financial performance of each of the subsidiaries, included in the CFS of the Company, pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.
In accordance with the provisions of Section 136 of the Act, the financial statements of the subsidiaries are available for inspection by the members at the Registered Office of the Company during business hours on all days except Saturdays, Sundays and public holidays up to the date of the ensuing AGM. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at HFCL Limited, 8, Commercial Complex, Masjid Moth, Greater Kailash - II, New Delhi - 110048 and the same shall be sent by post.
The financial statements including the CFS and all other documents required to be attached to this Report have been uploaded on the website of the Company at www.hfcl.com.
Material Subsidiaries
The Company has adopted a ''Policy for determining Material Subsidiaries'' as per requirements stipulated in Explanation to Regulation 16(1)(c) of the SEBI Listing Regulations.
The Company has amended the Policy for Determining Material Subsidiaries, in its meeting held on July 12, 2021, in line with the amendments to the SEBI Listing Regulations, notified on May 05, 2021.
The said policy may be accessed on the website of the Company at https://www.hfcl.com/wp-content/uploads/2021/07/HFCL-Policy-on-Determining-Material-Subsidiaries Revised.pdf.
The Company has one material subsidiary company viz. HTL Limited, as on March 31,2022.
Directors and Key Managerial Personnel (KMPs) Re-Appointments/Appointments
In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Mr. Arvind Kharabanda (DIN: 00052270), Director (Non-Executive), is liable to retire by rotation at the ensuing AGM and being eligible offers himself for re-appointment.
The brief resume of him and other related information are being given in the Notice convening the 35th AGM of your Company.
Your Directors recommend his re-appointment as a Non-Executive Director of your Company.
During the FY22, the Board of Directors appointed Mr. Ajai Kumar (DIN: 02446876) as a Non-Executive Independent Director w.e.f. November 25, 2021, not liable to retire by rotation who was further appointed as a Directors (Independent) for one term of consecutive three years, commencing from November 25, 2021, by
the shareholders of the Company, in their extra-ordinary general meeting held on March 07, 2022, by way of special resolution. In the opinion of the Board, he possesses requisite qualifications, experience, expertise and holds highest standards of integrity. Further he is exempt to qualify on-line proficiency self assessment test conducted by the Indian Institute of Corporate Affairs.
Further, continuation of Mr. Arvind Kharabanda Director (Non-Executive), liable to retire by rotation, on attaining the age of seventy-five years, was also approved by the shareholders of the Company, in their extra-ordinary general meeting held on March 07, 2022, by way of special resolution.
The Board of Directors at its meeting held on July 12, 2021 and on the recommendation of the Nomination, Remuneration and Compensation Committee has re-appointed Mr. Mahendra Nahata as the Managing Director of the Company for a further period of 3 (three) years with effect from October 01, 2021, which was subsequently approved by the shareholders of the Company in their AGM held on September 30, 2021, by way of a special resolution.
The Nomination, Remuneration and Compensation Committee and the Board of Directors, on the basis of performance evaluation of Independent Directors and taking into account the external business environment, the business knowledge, acumen, experience and the substantial contribution made by Mr. Surendra Singh Sirohi (DIN: 07595264) and Dr. (Ms.) Tamali Sengupta (DIN: 00358658) during their tenure, had recommended to the shareholders that continued association of Mr. Surendra Singh Sirohi and Dr. (Ms.) Tamali Sengupta as an Independent Directors would be beneficial to the Company.
Based on the above, the shareholders, in their AGM held on September 30, 2021 approved re-appointment of:
(i) Mr. Surendra Singh Sirohi for a second term of consecutive three years, commencing from August 27, 2021 to August 26, 2024; and
(ii) Dr. (Ms.) Tamali Sengupta for a second term of consecutive three years, commencing from December 24, 2021 to December 23, 2024;
to hold office as Independent Directors of the Company, not liable to retire by rotation on the Board of the Company.
In the opinion of the Board, Mr. Surendra Singh Sirohi and Dr. (Ms.) Tamali Sengupta possess requisite qualifications, experience, expertise and holds highest standards of integrity.
Further Mr. Surendra Singh Sirohi is exempt to qualify on-line proficiency self assessment test conducted by the Indian Institute of Corporate Affairs. Dr. (Ms.) Tamali Sengupta has successfully qualified on-line proficiency self assessment test conducted by the Indian Institute of Corporate Affairs.
IDBI Bank Limited vide its letter no. LCG-SSCB.53/15/Nom.8/ 2022-23 dated April 30, 2022 which was received by the Company on May 02, 2022, has withdrawn the nomination of Mr. Ramakrishna Eda (DIN: 07677647) Non-Executive Non-Independent Director who was nominated on the Board of the Company by IDBI Bank Limited.
Consequently, Mr. Ramakrishna Eda has ceased to be a director of the Company w.e.f. May 02, 2022.
Further, Board of Directors places on record its sincere appreciation for the support and valuable guidance given by Mr. Ramakrishna Eda during his tenure as Non-Executive Director of the Company.
During the year under review, Mr. Mahendra Nahata, Managing Director, Mr. Vijay Raj Jain, Chief Financial Officer and Mr. Manoj Baid, Senior Vice-President (Corporate) & Company Secretary, continue to be the Key Managerial Personnel of your Company, in accordance with the provisions of Section 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The Company has issued confirmation to its Directors, confirming that it has not made any default under Section 164(2) of the Act, as on March 31, 2022.
The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Act, read with the Schedules and Rules issued thereunder as well as clause (b) of sub-regulation (1) of Regulation 16 of the SEBI Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and that they are independent of management.
In terms of Regulation 25(8) of the SEBI Listing Regulations, the Independent Directors have confirmed 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.
The Independent Directors have also confirmed that they have complied with the Company''s Code of Conduct.
In the opinion of the Board, Independent Directors fulfil the conditions specified in the Act, Rules made thereunder and SEBI Listing Regulations and are independent of the management.
As per Regulation 25(7) of SEBI Listing Regulations, the Independent Director of the Company need to be imparted with familiarisation programme.
The familiarisation programme aims at making the Independent Directors of the Company familiar with the business and operations of the Company through various structured familiarisation Programmes.
The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company and related matters are available on the website of the Company at the web-link: https://www.hfcl.com/wp-content/ uploads/2022/04/HFCL-Familiarisation-Prog.-ID 20221.pdf.
Remuneration of Directors, Key Managerial Personnel and particulars of employees
The information required under Section 197(12) of the Act, read with Rules 5(1), 5(2) & 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) in respect of Directors/Employees of the Company is set out in Annexure - B to this Report.
The remuneration paid to the Directors is in accordance with the Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19 of the SEBI Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).
Disclosure under Section 197(14) of the Act
The Managing Director of your Company does not receive remuneration or commission from any of the subsidiaries of the Company.
Remuneration Policy
Pursuant to provisions of Section 178 of the Act and the SEBI Listing Regulations, the Nomination, Remuneration and Compensation Committee (''NRC Committee'') of your Board has formulated a Remuneration Policy for the appointment and determination of remuneration of the Directors including criteria for determining qualifications, positive attributes, independence of a director, Key Managerial Personnel, Senior Management Personnel and other employees of your Company.
The NRC Committee has also developed the criteria for determining the qualifications, positive attributes and independence of Directors and for making payments to Executive and Non-Executive Directors and Senior Management Personnel of the Company.
The detailed Policy is available on the Company''s website at https:// www.hfcl.com/wp-content/uploads/2019/06/Remuneration-Policy.pdf and the salient aspects covered in the Remuneration Policy have been outlined in the Corporate Governance Report, which forms part of this Report.
Board and Committee Meetings
Six meetings of the Board of Directors were held during the FY22.
The intervening gap between any two consecutive meetings of the Board was within the stipulated time frame prescribed under the Act and the SEBI Listing Regulations.
Details of meetings held and attendance of directors are mentioned in Corporate Governance Report, which forms part of this Annual Report.
Separate Meeting of Independent Directors
In terms of requirements of Schedule IV to the Act and Regulation 25 of the SEBI Listing Regulations, a separate meeting of the Independent Directors was held on March 29, 2022 for the FY22.
The meeting of the Independent Directors was attended by all the four independent directors, namely, Mr. Bharat Pal Singh, Mr. Ajai Kumar, Mr. Surendra Singh Sirohi, and Dr. (Ms.) Tamali Sengupta.
Board Committees
Your Company has constituted several Committees of the Board which have been established as part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.
As on March 31, 2022, your Board has 05 (five) mandatory Committees, namely,
1. Audit Committee;
2. Nomination, Remuneration & Compensation (NRC) Committee;
3. Stakeholders'' Relationship Committee (SRC);
4. Corporate Social Responsibility (CSR) Committee; and
5. Risk Management Committee (RMC).
The details with respect to the composition, powers, roles, terms of reference, number of meetings etc. of the Committees held during the FY22 and attendance of the Members at each Committee Meeting, are provided in the Corporate Governance Report which forms part of Annual Report.
All the recommendations made by the Committees of the Board including the Audit Committee were accepted by the Board.
Also, details pertaining to Risk Management & Internal Financial Control are mentioned in Management Discussion & Analysis, which forms part of the Annual Report for FY22 of the Company.
As on March 31, 2022, the Audit Committee comprises of 04 (four) members namely, Mr. Bharat Pal Singh, Mr. Surendra Singh Sirohi, Dr. (Ms.) Tamali Sengupta, Independent Directors and Mr. Arvind Kharabanda, Non-Executive Director.
Mr. Bharat Pal Singh, Independent Director is the Chairman of the Audit Committee.
All members of the Audit Committee are financially literate and have experience in financial management.
The Act mandates formal annual evaluation by the Board of its own performance and that of its committees and individual Directors. Schedule IV to the Act provides that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Directors being evaluated.
Pursuant to the provisions of the Act read with relevant rules issued thereunder, Regulation 17(10) of the SEBI Listing Regulations and the Circular issued by SEBI on January 5, 2017 with respect to Guidance Note on Board Evaluation, the evaluation of the annual performance of the Directors/Board/Committees was carried out for the FY22.
The parameters for the performance evaluation of the Board, inter-alia, include performance of the Board on deciding long term strategy, rating the composition and mix of Board members, discharging of governance and fiduciary duties, handling critical and dissenting suggestions, etc.
The performance of the Board was evaluated after seeking inputs from all the Directors on the basis of above parameters. The performance of the Committees was evaluated after seeking inputs from the Committee members on the basis of criteria such as the composition of Committees, effectiveness of Committee meetings, etc.
The Nomination, Remuneration and Compensation Committee reviewed the performance of the Individual Directors, the Committees of the Board and the Board as a whole. A questionnaire for the evolution of the Board, its committees and the individual members of the Board, covering various aspects of the performance of the Board and its Committees, including
composition and quality, roles and responsibilities, processes and functioning, adherence to Code of Conduct and Ethics and best practices in corporate governance was sent to the Directors.
The Board of Directors reviewed the performance of the Independent Directors. Performance Evaluation was done on the basis of criteria such as the contribution of the individual director to the Board and Committee meetings like preparedness on the agenda items, technical knowledge on the subject matter, meaningful and constructive contribution and inputs in meetings, etc.
In a separate meeting of the Independent Directors, performance of Non-Independent Directors and the Board as a whole was evaluated, taking into account the views of Executive Directors and Non-Executive Directors. As the Independent Directors were aware that Mr. M P Shukla, Non-Executive Chairman of the Company, had deceased on May 04, 2021 due to COVID-19 and since at present, there is no regular chairperson designated in the Company, accordingly, the performance of Chairperson was not required to be evaluated.
The Directors expressed their satisfaction with the evaluation process.
The details of the evaluation process are set out in the Corporate Governance Report which forms part of this Annual Report.
Auditors and Auditors'' Report
Statutory Auditors & their Report
M/s S. Bhandari & Co., Chartered Accountants (FRN: 000560C) and M/s Oswal Sunil & Company, Chartered Accountants (FRN: 016520N) were appointed as Statutory Auditors for one term of 05 (five) consecutive years, at the 30th Annual General Meeting (AGM) of the Company, held on September 25, 2017, for auditing the accounts of the Company from the financial year 2017-18 to 2021-22.
Pursuant to the provisions of Sections 139, 141, 142 and other applicable provisions, if any, of the Act read with the Companies (Audit and Auditors) Rules, 2014, (including any statutory modification(s) or re-enactment thereof), the Audit Committee and the Board of Directors of the Company, hereby recommends the re-appointment of M/s S. Bhandari & Co., Chartered Accountants (FRN: 000560C) and M/s Oswal Sunil & Company, Chartered Accountants (FRN: 016520N), as Statutory Auditors of the Company, to hold office from the conclusion of this 35th AGM till the conclusion of the 40th AGM to be held in the year 2027, at such remuneration, as may be decided by the shareholders of the Company.
The Auditors'' Report does not contain any qualification, reservation or adverse remark.
Further, there were no frauds reported by the Statutory Auditors to the Audit Committee or the Board under Section 143(12) of the Act.
M/s S. Bhandari & Co., Chartered Accountants (FRN: 000560C) and M/s Oswal Sunil & Company, Chartered Accountants (FRN: 016520N) have confirmed that they are eligible and not disqualified to be re-appointed as Statutory Auditors of the Company.
Pursuant to provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended or re-enacted from time to time), your Company had appointed Mr. Baldev Singh Kashtwal, Company Secretary in whole-time practice, having COP No. 3169 and Membership No. F-3616, for conducting the Secretarial Audit of your Company for the FY22.
The Secretarial Audit Report in prescribed form MR-3, issued by the Secretarial Auditor is annexed herewith as Annexure - C to this Report. Further, as required under Regulation 24A of the SEBI Listing Regulations, the Secretarial Audit Report of HTL Limited, a material subsidiary of the Company is also annexed herewith as Annexure C1 to this Report.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark for the FY 2021-22 except that during the period from May 05, 2021 to November 24, 2021 there was non-compliance of Regulation No. 17(1) of the SEBI Listing Regulations, with respect to proper composition of Independent Directors on the Board of the Company, arose due to the sudden demise of Mr. M P Shukla, Chairman & Director (Non-Executive) of the Company, on May 04,2021.
However, the Company has already appointed an Independent Director on the Board w.e.f. November25,2021 in compliance with Regulation 17(1) of the SEBI Listing Regulations.
It is informed that the Company had already appointed an Independent Director on the Board of the Company w.e.f. November 25, 2021 and complied with the SEBI Listing Regulations.
Your Company has maintained cost accounts and records as specified by the Central Government under sub-section (1) of Section 148 of the Act and the relevant rules made thereunder.
Requirement of Cost Audit as stipulated under the provisions of Section 148 of the Act, are not applicable for the business activities carried out by the Company.
There is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the FY22.
Vigil Mechanism/ Whistle-Blower Policy
The Board of Directors of your Company has formulated a Whistle-Blower Policy, which is in compliance with the provisions of Section 177(9) & (10) of the Act and Regulation 22 of the SEBI Listing Regulations.
The Company, through this Policy envisages to encourage the Directors and employees of the Company to report to the appropriate authorities any unethical behaviour, improper, illegal or questionable acts, deeds, actual or suspected frauds or violation of the Company''s Codes of Conduct for the Directors and the Senior Management Personnel.
During FY22, no complaint was received and no individual was denied access to the Audit Committee for reporting concerns, if any.
The Policy on Vigil Mechanism/Whistle-Blower Policy may be accessed on the Company''s website at the link: https://www.hfcl. com/wp-content/uploads/2020/01/HFCL-Whistle-Blower-Policy Revised1.pdf.
Brief details of establishment of Vigil Mechanism in the Company, is also provided in the Corporate Governance Report which forms part of this Report.
Infomerics Valuation and Rating Pvt. Ltd. (RBI & SEBI Registered Credit Rating Agency) vide its letter dated September 27, 2021, had assigned the credit ratings for the Bank Loan facilities of the Company, the details of which are as below:-
Instrument/Facility |
Ratings |
Rating Action |
Long term Bank Facilities - Term Loans |
IVR A/Stable (IVR A with Stable Outlook) |
Assigned |
Short term Bank Facilities - Cash Credit |
IVR A/Stable (IVR A with Stable Outlook) |
Assigned |
Short Term Bank Facilities - LC/BGs |
IVR A1 (IVR A One) |
Assigned |
Subsequently, CARE Ratings Limited (a SEBI Registered Credit Rating Agency) vide its letter dated March 23, 2022, had enhanced the credit ratings for the Bank Loan facilities of the Company to "A" with stable outlook from "A-" (A-minus) with negative outlook, the details of which are as below:-
Instrument/Facility |
Ratings |
Rating Action |
Long term Bank |
CARE A; Stable |
Enhanced |
Facilities - Term Loans |
(Single A; Outlook: Stable) |
|
Short term Bank |
CARE A2 |
Enhanced |
Facilities - Cash Credit |
(A Two Plus) |
The Annual Return of the Company as on March 31, 2022, in prescribed e-form MGT-7 in accordance with Section 92(3) of the Act, read with Section 134(3)(a) of the Act, is available on the Company''s website at https://www.hfcl.com/wp-content/ uploads/2022/09/Draft-HFCL Form MGT 7 2022.pdf.
Further the Annual Return (i.e., e-form MGT-7) for the FY22 shall be filed by the Company with the Registrar of Companies, Himachal Pradesh, within the stipulated period. .
Particulars of Loans, Guarantees and Investments
Details of loans, guarantees and investments, as on March 31, 2022, as stipulated under Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, are as follows:-
^ in Crore |
|
Particulars |
Amount |
Loans given |
40.50 |
Guarantees given |
268.16 |
Investments made |
82.24 |
Particulars of contracts or arrangements with Related Parties
Your Company has adopted a "Policy on Dealing with and Materiality of Related Party Transactions", in accordance with the provisions of the Act and Regulation 23 of the SEBI Listing Regulations, inter-alia, providing a framework for governance and reporting of Related Party Transactions including material transactions and threshold limits for determining materiality.
The said Policy is also available on the website of the Company at the web-link: https://www.hfcl.com/wp-content/ uploads/2022/06/HFCL-Policy-on-RPTs Revised.pdf.
During the year under review, all contracts/ arrangements/ transactions entered into by the Company with related parties were in ordinary course of business and on arm''s length basis.
The Company has entered into any contracts/ arrangements/ transactions with related parties which qualify as material in accordance with the Policy of the Company on materiality of related party transactions.
Thus, there are transactions required to be reported in prescribed Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the details of which is annexed herewith as Annexure - D to this Report.
All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions, formulated by the Company.
There are no materially significant related party transactions that may have potential conflict with interest of the Company at large.
There are no transactions with the person(s) or entities forming part of the Promoter(s) / Promoter(s) Group, which individually hold 10% or more shareholding in the Company.
The details of the related party transactions as per Indian Accounting Standards (IND-AS) - 24 are set out in Note 51 to the Standalone Financial Statements of the Company.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The details of energy conservation, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act, read with the Rule 8 of the Companies (Accounts) Rules, 2014, are annexed herewith as Annexure - E to this Report.
Corporate Social Responsibility (CSR)
The Company has been proactively carrying out CSR activities since more than two decades.
The Company is undertaking CSR activities through its Registered Society i.e., HFCL Social Services Society ("HSSS") established in the year 1996.
In compliance with requirements of Section 135 of the Act, the Company has laid down a Corporate Social Responsibility (CSR) Policy. The CSR Policy is available on the website of the Company and may be accessed at the web-link https://www.hfcl.com/wp-content/uploads/2022/09/CSR Poliicy 2022.pdf.
The composition of the CSR Committee, brief contents of CSR Policy, unspent amount and reason thereof, if any, and report on CSR activities carried out during the FY 22, in the format, prescribed under Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure - F.
For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which forms part of this Report.
Material Changes Affecting The Company
A. Change in nature of business
The Company has not undergone any change in the nature of the business during the FY22.
There are no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the FY22 and the date of this Report.
Further, as we are aware that the outbreak of COVID-19 Pandemic has impacted businesses not only in India but to all economics in the world.
Pursuant to directives of SEBI vide Circular No. SEBI/HO/CFD/ CMDI/CIR/P/2020/84 dated May 20, 2020, the Company vide its Corporate Announcement made to stock exchanges on June 5, 2020, had already disclosed the impact of COVID-19 on business, performance and finance of the Company.
The Company has evaluated the impact of COVID-19 resulting from (i) the possibility of constraints to render supply & services which may require revision of estimations of costs to complete the contracts because of additional efforts; (ii) onerous obligations; (iii) penalties relating to breaches of service level agreements, and (iv) termination or deferment of contracts by customers. The Company has concluded that the impact of COVID-19 is not material based on these estimates. Due to the nature of the pandemic, the Company will continue to monitor developments to identify significant uncertainties relating to revenue in future periods.
The Company has considered the possible effects that may result from the pandemic relating to COVID-19 in the preparation of the financial statements including their coverability of carrying amounts of financial and non-financial assets. Further the impact assessment does not indicate any adverse impact on the ability of the Company to continue as a going concern. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company has, at the date of approval of the financial statements, used internal and external sources of information including credit reports and related information and economic forecasts and expects that the carrying amount of the assets will be recovered. The impact of COVID-19 on the Company''s financial statements may differ from that estimated as at the date of approval of these financial statements.
The impact of COVID-19 is also mentioned at Note No. 41 to the Standalone Financial Statements for FY22.
Significant/Material orders passed by the Regulators, Courts, Tribunals Affecting the going concern status and Company''s operations in future
There is no significant/material order passed by the Regulators, Courts, Tribunals affecting the going concern status and the Company''s operations in future.
Prevention of Sexual Harassment at Workplace
The Company has in place a Policy on Prevention of Sexual Harassment at Workplace, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and the rules made thereunder.
Internal Complaints Committee(s) (ICCs) at each workplace of the Company, have been set up to redress complaints, if any, received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.
ICC of each workplace of the Company has also filed Annual Return for the calendar year 2021 at their respective jurisdictional offices, as required under Section 21(1) of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013.
There was no complaint received from any employee of the Company during the FY22.
Although, the Company has achieved various milestones which have already been set out in the Management Discussion and Analysis forming part of the Annual Report, however there were no other significant developments during the year under review.
Directors'' Responsibility Statement
Pursuant to the requirements under Section 134(3)(c) of the Act, the Directors confirm that:
(a) i n the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the Directors had 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 March 31,2022 and of the profits of the Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors, had 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 had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The equity shares of your Company are presently listed on the BSE Limited (''BSE'') and the National Stock Exchange of India Limited (''NSE'').
The Company has paid annual listing fee for the FY23 to the BSE Limited and the National Stock Exchange of India Limited.
Your Company''s Scrip has come under compulsory dematerialization w.e.f. November 29, 1999 for Institutional Investors and w.e.f. January 17, 2000, for all Investors. So far, 99.96% of the equity shares have been dematerialized.
The I SI N allotted to the equity shares of the Company is INE548A01028.
Implementation of Corporate Action
During the year under review, the Company has not failed to implement any Corporate Action within the specified time limit.
Compliance with Secretarial Standards
Pursuant to the provisions of Section 118(10) of the Act, the Company has complied with the applicable provisions of the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).
The Financial and Statutory Data presented in this Report is in line with the requirements of the Act (including the rules made thereunder), Indian Accounting Standards (Ind AS) and the Secretarial Standards (SS).
The Financial Information is reported for the period April 01, 2021 to March 31, 2022. Some parts of the Non-Financial Information included in this Board''s Report are provided as on the date of this Report.
Statements in the Management Discussions & Analysis Report describing the Company''s projections, estimates, expectations or predictions may be ''forward looking statements'' within the meaning of applicable securities laws and regulations. Actual results
could differ materially from those expressed or implied. Important factors that would make a difference to the Company''s operations include demand supply conditions, raw material prices, changes in government regulations, tax regimes and economic developments within the country and abroad and such other factors.
Your Directors wish to place on record their sincere appreciation for the devoted services of all the employees and workers at all levels and for their dedication and loyalty, which has been critical for the Company''s success.
Your Company''s organizational culture upholds professionalism, integrity and continuous improvement across all functions as well as efficient utilization of the Company''s resources for sustainable and profitable growth.
Your Directors wish to place on record their appreciation for the valuable co-operation and support received from the Government of India, various State Governments, the Banks and other stakeholders such as, shareholders, customers and suppliers, among others. The Directors look forward to their continued support in future.
The Directors thank the Central Government, Government of Goa, Government of Telangana, Government of Himachal Pradesh, IDBI Bank Limited, State Bank of India, Punjab National Bank, erstwhile Oriental Bank of Commerce & United Bank of India, Bank of Baroda, Union Bank of India, Yes Bank Limited, ICICI Bank Limited, Indian Bank, KEB Hana Bank and other Banks for all co-operations, facilities and encouragement they have extended to the Company.
Your Directors acknowledge the continued trust and confidence you have reposed in the Company.
Mar 31, 2021
Your Board of Directors has pleasure in presenting the 34th Annual Report on the business and operations of your Company together with the Audited Financial Statements for the financial year ended March 31,2021.
Your Company''s financial performance (standalone and consolidated) for the financial year ended March 31,2021 is summarized below:
('' in Crores)
Particulars |
Standalone |
Consolidated |
||
2020-21 |
2019-20 |
2020-21 |
2019-20 |
|
Revenue from Operations (Net) |
4,105.87 |
3,547.30 |
4,422.96 |
3,838.91 |
Other Income |
33.22 |
20.94 |
36.13 |
22.08 |
Total Income |
4,139.09 |
3,568.24 |
4,459.09 |
3,860.99 |
Operating Expenses |
3,450.75 |
2,961.77 |
3,656.77 |
3,158.60 |
Other Expenditure |
186.50 |
158.31 |
216.61 |
186.22 |
Depreciation and Amortization expenses |
53.59 |
30.13 |
68.63 |
41.95 |
Total Expenses |
3690.84 |
3,150.21 |
3,942.01 |
3,386.77 |
Profit before Finance Cost and Tax |
448.25 |
418.03 |
517.08 |
474.22 |
Finance Cost |
148.25 |
90.10 |
176.09 |
114.82 |
Share of net profits of joint ventures accounted for using equity method |
- |
- |
- |
(1.05) |
Exceptional Item |
4.13 |
- |
4.13 |
- |
Profit before Tax (PBT) |
295.87 |
327.93 |
336.86 |
358.35 |
Tax Expense Net of MAT Credit Entitlement |
73.01 |
124.10 |
90.62 |
121.01 |
Profit after Tax (PAT) |
222.86 |
203.83 |
246.24 |
237.34 |
Attributable to: Shareholders of the Company |
239.00 |
227.25 |
||
Non-Controlling Interests |
- |
- |
7.24 |
10.09 |
Opening Balance of Retained Earnings |
1,062.12 |
872.09 |
1,082.00 |
868.55 |
Impact on account of Change in Accounting Policy - Adoption of Ind AS-115 |
- |
(1.13) |
- |
(1.13) |
Total Comprehensive Income for the year |
222.87 |
203.83 |
239.00 |
- |
Transfer to Retained Earnings (out of DRR) |
124.75 |
2.81 |
124.72 |
2.81 |
Amount available for appropriation |
1,160.24 |
1077.60 |
1,196.28 |
1,097.48 |
Appropriations : Dividend on Equity Shares (Previous Year) |
15.48 |
15.48 |
||
Closing Balance of Retained Earnings |
1,160.24 |
1,062.12 |
1,196.28 |
1,082.00 |
During the FY21, total Consolidated Income of your Company is ''4,459.09 Crores as compared to ''3,860.99 Crores during the previous year, showing an increase of 15.49%.
Your Company has achieved Consolidated EBIDTA of ''585.71 Crores in FY21 from ''516.17 Crores in the previous year, recording a growth of 13.47%. Profitability, i.e., Consolidated PBT has declined by 5.9% to ''336.86 Crores in FY21 from ''358.35 Crores during the previous year.
In FY21, your Company has a Consolidated PAT of ''246.24 Crores from ''237.34 Crores in the previous year, recording a growth of 3.75%.
Net Worth
The net worth of your Company has increased during the year under review to ''1,916.21 Crores from ''1,668.44 Crores in the previous year.
The consolidated Debt in FY21 stood at ''920 Crores as against ''712 Crores in FY20.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of Section 129 read with Schedule III to the Companies Act, 2013 (hereinafter referred to as the "Act") and the Companies (Accounts) Rules, 2014, Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the "SEBI Listing Regulations") and applicable Indian Accounting Standards, the Audited Consolidated Financial Statements of the Company for the FY21, together withthe Auditors''Report form part ofthis Annual Report.
The following table provides a list of years for which unclaimed dividends and their corresponding shares would become eligible to be transferred to the IEPF on the dates mentioned below:
The Board of Directors has decided to retain the entire amount of profits for the FY21, under Retained Earnings and has not transferred any amount to the General Reserves, during the year under review.
In the wake of COVID-19 pandemic, each of the business sectors in the economy has been affected, however despite this, your Board of Directors, at its meeting held on May 10, 2021, has recommended a Dividend @15%
i.e., ''0.15/- (Fifteen Paisa) per equity share of ''1/- each, aggregating to ''19.26 Crores for the financial year ended March 31, 2021, subject to approval of shareholders at the ensuing annual general meeting (AGM) of the Company. The above decision is in accordance with the Company''s Dividend Distribution Policy.
The dividend shall be subject to deduction of TDS before payment to shareholders, as per applicable provisions of Income Tax Act, 1961.
As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021, top 1000 listed companies based on the market capitalization, shall formulate a Dividend Distribution Policy.
Accordingly, the Policy has been adopted by the Board of Directors of the Company setting out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/ or retaining profits earned by the Company.
The Dividend Distribution Policy is available on the Company''s website at http://www.hfcl.com/wp-content/uploads/2017/05/Dividend_ Distribution_Policy.pdf.
Investor Education and Protection Fund (IEPF)
In accordance with the applicable provisions of the Companies Act, 2013 read with the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), all unclaimed dividends are required to be transferred by the Company to the IEPF, which remain unpaid or unclaimed for a period of seven years, from the date of transfer to Unpaid Dividend Account.
Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for seven consecutive years or more shall be transferred to the demat account of the Investor Education and Protection Fund Authority ("IEPF Authority").
During the year under review, no amount of the unclaimed/unpaid dividend and any such share in the Company, was due to be transferred to the IEPF Authority.
Financial Year |
Dividend per Share ('') |
Date of Declaration |
Due Date for Transfer |
Amount ('') (Unpaid as on March 31,2021) |
2017-18 |
0.06 |
September 29, 2018 |
December 04, 2025 |
10,36,599.60 |
2018-19 |
0.10 |
September 28, 2019 |
December 03, 2026 |
16,40,858.90 |
Details of unpaid dividend for the financial year 2017-18 and 2018-19 can be accessed from the website of the Company at www.hfcl.com and claim can be made by making request to the Company.
Details of Nodal Officer
The Company has designated Mr. Manoj Baid, Senior Vice-President (Corporate) & Company Secretary of the Company as a Nodal Officer for the purpose of IEPF.
INDIAN ACCOUNTING STANDARDS (IND-AS)
Financial Statements of your Company and its subsidiaries, for the financial year ended March 31, 2021, are prepared in accordance with Indian Accounting Standards (Ind-AS), as notified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.
FIXED DEPOSITS
During the FY21, your Company has not accepted any deposit within the meaning of Section 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.
SHARE CAPITAL AND CHANGES IN CAPITAL STRUCTURE Authorized Share Capital
As on March 31,2021, the Authorized Share Capital of your Company stood at ''760 Crores (Rupees Seven Hundred Sixty Crores only) divided into 510 Crores (Five Hundred Ten Crores) equity shares of face value of ''1/- (Rupee One) each, aggregating to ''510 Crores (Rupees Five Hundred Ten Crores only) and 2.50 Crores (Two Crore Fifty Lakhs) Cumulative Redeemable Preference Shares (CRPS) of ''100/- (Rupees Hundred) each, aggregating to ''250 Crores (Rupees Two Hundred Fifty Crores only).
As on March 31,2021, the Paid-up Equity Share Capital of your Company stood at ''128.44 Crores comprising of 1,28,43,77,194 equity shares of face value of ''1/- each.
Further, your Company had allotted 49,34,300 equity shares of face value of ''1/- each, to HFCL Employees'' Trust for implementing the benefits of HFCL Employees'' Long Term Incentive Plan - 2017, in lieu of the vested Employee Stock Options (ESOPs) granted to eligible employees of the Company, pursuant to the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014.
Consequent to the above, the paid up equity share capital stood increased from ''128.44 Crores to ''128.93 Crores comprising of 128,93,11,494 equity shares of face value of ''1/- each, as on the reporting date.
There are no convertible warrants in the Company, as on the date of this Report.
Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise.
MANAGEMENT DISCUSSION AND ANALYSIS (MD&A) REPORT
The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of the SEBI Listing Regulations, is presented in a separate section, forming part of this Annual Report.
Your Company is committed to benchmark itself with global standards for providing good corporate governance. Your Board constantly endeavors to take the business forward in such a way that it maximizes long term value for the stakeholders. The Company has put in place an effective corporate governance system which ensures that the provisions of the SEBI Listing Regulations are duly complied with.
A detailed report on the Corporate Governance pursuant to the requirements of the SEBI Listing Regulations forms part of this Annual Report.
A Certificate from the Secretarial Auditor of the Company, confirming compliance of conditions of corporate governance as stipulated in the SEBI Listing Regulations, is provided in the Report on Corporate Governance which forms part of the Corporate Governance Report.
BUSINESS RESPONSIBILITY REPORT
As stipulated under Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility Report, describing the initiatives taken by the Company from environmental, social and governance perspective forms part of this Annual Report.
EMPLOYEES'' LONG TERM INCENTIVE PLAN
In terms of the SEBI (Share Based Employee Benefits) Regulations, 2014 ("SEBI SBEB Regulations"), as amended from time to time and with the objective to promote entrepreneurial behaviour among employees of the Company, motivate them with incentives and reward their performance with ownership in proportion to the contribution made by them as well as align the interest of the employees with that of the Company, "Himachal Futuristic Communications Limited Employees'' Long Term Incentive Plan-2017â ("HFCL Plan 2017") was approved by the Board of Directors of your Company on August 26, 2017, which was further approved by the members of the Company, in their 30th Annual General Meeting held on September 25, 2017.
The HFCL Plan 2017 comprises of the following three subsets:
1. Employee Stock Option Plan (ESOP) under which Options would be granted;
2. Restricted Stock Units Plan (RSUP) under which Units would be granted;
3. Employee Stock Purchase Scheme (ESPS) under which shares would be issued.
During the financial year ended March 31,2021, your Company has not granted any ESOPs and RSUs in terms of the HFCL Plan 2017.
Further, the Company had allotted 49,34,300 equity shares of face value of ''1/- each, to HFCL Employees'' Trust for implementing the benefits of HFCL Employees'' Long Term Incentive Plan - 2017, in lieu of the vested Employee Stock Options (ESOPs) granted to eligible employees of the Company, pursuant to the SEBI SBEB Regulations, on July 15, 2021 and the same have also been listed on the stock exchanges, viz. NSE and BSE.
Applicable disclosures as stipulated under the SEBI SBEB Regulations with regard to the HFCL Plan 2017, are provided as Annexure- A to this Report.
Your Company has received a Certificate from M/s Oswal Sunil & Company, Statutory Auditors (Firm Registration No. 016520N) that the HFCL Plan 2017 for grant of stock options has been implemented in accordance with the SEBI SBEB Regulations and the resolution passed by the members in their 30th Annual General Meeting held on September 25, 2017.
The said Certificate would be placed at the ensuing annual general meeting for inspection by the members.
The Nomination, Remuneration and Compensation Committee of the Board of Directors, inter-alia, administers and monitors, the HFCL Plan 2017 of your Company.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
As on March 31,2021, your Company had six subsidiaries viz.
1. HTL Limited,
2. Polixel Security Systems Private Limited,
3. Moneta Finance Private Limited,
4. HFCL Advance Systems Private Limited,
5. Raddef Private Limited, and
6. DragonWave HFCL India Private Limited.
The Company regularly monitors the performance of these companies.
Further, the Company has incorporated a new wholly-owned subsidiary company, namely, HFCL Technologies Private Limited, on June 26, 2021.
The Company also has an associate company, namely, Nimpaa Telecommunications Private Limited w.e.f. June 14, 2021.
There has been no material change in the nature of the business of the subsidiaries.
A statement containing the salient features of the financial statements of subsidiary companies of the Company in the prescribed Form AOC-1 forms a part of the Consolidated Financial Statements (CFS) in compliance with Section 129(3) and other applicable provisions, if any, of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, as amended.
The said Form also highlights the financial performance of each of the subsidiaries, included in the CFS of the Company, pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.
In accordance with the provisions of Section 136 of the Act, the financial statements of the subsidiaries are available for inspection by the members at the Registered Office of the Company during business hours on all days except Saturdays, Sundays and public holidays up to the date of the ensuing AGM. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at HFCL Limited, 8, Commercial Complex, Masjid Moth, Greater Kailash - II, New Delhi - 110048 and the same shall be sent by post.
The financial statements including the CFS and all other documents required to be attached to this Report have been uploaded on the website of the Company at www.hfcl.com.
The Company has adopted a ''Policy for determining Material Subsidiaries'' as per requirements stipulated in Explanation to Regulation 16(1)(c) of the SEBI Listing Regulations.
During the year under review, there was no change in the Policy for Determining Material Subsidiaries.
The Company has amended the Policy for Determining Material Subsidiaries, in its meeting held on July 12, 2021, in line with the amendments to the SEBI Listing Regulations, notified on May 05, 2021.
The said policy may be accessed on the website of the Company at http://www.hfcl.com/wp-content/uploads/2019/06/Policy-on-Determining-Material-Subsidiaries.pdf.
The Company has one material subsidiary company viz. HTL Limited, as on March 31,2021.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMPs) Re-Appointments / Appointments
In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Mr. Ranjeet Mal Kastia (DIN: 00053059), Director (Non-Executive), is liable to retire by rotation at the ensuing AGM and being eligible offers himself for re-appointment. The brief resume of him and other related information are being given in the Notice convening the 34th AGM of your Company.
Your Directors recommend his re-appointment as a Non-Executive Director of your Company.
During the FY21, the Board of Directors appointed Mr. Ramakrishna Eda (DIN: 07677647) as a Nominee Director of IDBI Bank Limited w.e.f. February 22, 2021 in place of Mr. Ranjeet Anandkumar Soni. Mr. Ramakrishna Eda is proposed to be appointed as a Nominee Director (Non-Executive), liable to retire by rotation at the ensuing AGM.
The Board of Directors at its meeting held on July 12, 2021 and on the recommendation of the Nomination, Remuneration and Compensation Committee has re-appointed Mr. Mahendra Nahata as the Managing Director of the Company for a further period of 3 (three) years with effect from October 01, 2021 subject to approval of shareholders at the ensuing AGM, as his current term of office is expiring on September 30, 2021.
The Nomination, Remuneration and Compensation Committee, on the basis of performance evaluation of Independent Directors and taking into account the external business environment, the business knowledge, acumen, experience and the substantial contribution made by Mr. Surendra Singh Sirohi (DIN: 07595264) and Dr. (Ms.) Tamali Sengupta (DIN: 00358658) during their tenure, has recommended to the Board that continued association of Mr. Surendra Singh Sirohi and Dr. (Ms.) Tamali Sengupta as Independent Directors would be beneficial to the Company. Based on the above and the performance evaluation of Independent Directors, the Board recommends re-appointment of:
(i) Mr. Surendra Singh Sirohi for a second term of consecutive three years, commencing from August 27, 2021 to August 26, 2024; and
(ii) Dr. (Ms.) Tamali Sengupta for a second term of consecutive three years, commencing from December 24, 2021 to December 23, 2024;
to hold office as Independent Directors of the Company, not liable to retire by rotation on the Board of the Company. The Company has received the requisite Notices in writing under Section 160 of the Act, from Members of the Company, proposing their appointment as Directors.
Mr. Surendra Singh Sirohi and Dr. (Ms.) Tamali Sengupta have given their consent, in prescribed form DIR-2, to act as Directors and also declared that they are not disqualified to be appointed as Directors, in prescribed form DIR-8.
Mr. Surendra Singh Sirohi and Dr. (Ms.) Tamali Sengupta have registered their names in the data bank for Independent Directors maintained by the Indian Institute of Corporate Affairs (IICA), Manesar (notified under Section 150(1) of the Companies Act, 2013 as the institute for the creation and maintenance of data bank of Independent Directors) and paid requisite fee therefor.
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Brief resume, nature of expertise, disclosure of relationships between directors inter-se, details of directorships and Committee membership held in other companies of the Directors proposed to be appointed/ re-appointed, along with their shareholding in the Company, as stipulated under Regulation 36 of the SEBI Listing Regulations and Secretarial Standard on General Meetings (SS-2) issued by the Institute of Company Secretaries of India, is appended as an Annexure to the Notice of the ensuing AGM.
Appropriate resolutions for re-appointment / appointment of Directors are being placed for your approval at the ensuing AGM.
During the FY21, IDBI Bank Limited ("IDBIâ) vide its letter no. LCG-SSCB.53/35/ Nom.8 dated February 01, 2021 has withdrawn the nomination of Mr. Ranjeet Anandkumar Soni (DIN: 07977478) from the Board of Directors of the Company and accordingly, Mr. Ranjeet Anandkumar Soni has ceased as a Nominee Director of the Company w.e.f. February 22, 2021.
Further, Board of Directors places on record its sincere appreciation for the support and valuable guidance given by Mr. Ranjeet Anandkumar Soni during his tenure as Non-Executive Director of the Company.
Mr. Mahendra Pratap Shukla, Non-Executive Chairman of the Company, succumbed to COVID-19 and ceased to be Non-Executive Chairman of the Company w.e.f. May 04, 2021.
Your Board of Directors places on record active and selfless role of Mr. Mahendra Pratap Shukla in the establishment of the Company and contribution in the growth of the Company. The Company benefitted immensely from his vision and guidance during his association with the Company. The demise of Mr. Mahendra Pratap Shukla has left a void that will be impossible to fill in.
During the year under review, Mr. Mahendra Nahata, Managing Director, Mr. Vijay Raj Jain, Chief Financial Officer and Mr. Manoj Baid, Senior Vice-President (Corporate) & Company Secretary, continue to be the Key Managerial Personnel of your Company, in accordance with the provisions of Section 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The Company has issued confirmation to its Directors, confirming that it has not made any default under Section 164(2) of the Act, as on March 31,2021.
Declaration by Independent Directors
The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Act, read with the Schedules and Rules issued thereunder as well as clause (b) of sub-regulation (1) of Regulation 16 of the SEBI Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and that they are independent of management.
In terms of Regulation 25(8) of the SEBI Listing Regulations, the Independent Directors have confirmed 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.
The Independent Directors have also confirmed that they have complied with the Company''s Code of Conduct.
In the opinion of the Board, Independent Directors fulfil the conditions specified in the Act, Rules made thereunder and SEBI Listing Regulations and are independent of the management.
Familiarisation Programme for Independent Directors
The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company and related matters are put up on the website of the Company at the web-link: http://www.hfcl.com/wp-content/uploads/2017/04/HFCL-Familiarisation-Prog.-Idependent-Director.pdf.
Separate Meeting of Independent Directors
In terms of requirements of Schedule IV to the Act and Regulation 25 of the SEBI Listing Regulations, a separate meeting of the Independent Directors was held on March 30, 2021 for the FY21.
The meeting of the Independent Directors was attended by all the three independent directors, namely, Mr. Bharat Pal Singh, Mr. Surendra Singh Sirohi and Dr. (Ms.) Tamali Sengupta.
REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES
The information required under Section 197(12) of the Act read with Rules 5(1), 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) in respect of Directors/Employees of the Company is set out in Annexure-B to this Report.
The remuneration paid to the Directors is in accordance with the Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19 of the SEBI Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).
Disclosure under Section 197(14) of the Companies Act, 2013
The Managing Director of your Company does not receive remuneration or commission from any of the subsidiaries of the Company.
Pursuant to provisions of Section 178 of the Act and the SEBI Listing Regulations, the Nomination, Remuneration and Compensation Committee (''NRC Committee'') of your Board has formulated a Remuneration Policy for the appointment and determination of remuneration of the Directors including criteria for determining qualifications, positive attributes, independence of a director, Key Managerial Personnel, Senior Management Personnel and other employees of your Company.
The NRC Committee has also developed the criteria for determining the qualifications, positive attributes and independence of Directors and for making payments to Executive and Non-Executive Directors and Senior Management Personnel of the Company.
The detailed Policy is available on the Company''s website at http://www.hfcl.com/wp-content/uploads/2019/06/Remuneration-Policy.pdf and the salient aspects covered in the Remuneration Policy have been outlined in the Corporate Governance Report, which forms part of this Report.
Four meetings of the Board of Directors were held during the FY21.
The intervening gap between any two consecutive meetings of the Board was within the stipulated time frame prescribed under the Act and the SEBI Listing Regulations.
Details of meetings held and attendance of directors are mentioned in Corporate Governance Report, which forms part of this Report.
Your Company has constituted several Committees of the Board which have been established as part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.
As on March 31,2021, your Board has 05 (five) mandatory Committees, namely,
1) Audit Committee,
2) Nomination, Remuneration & Compensation (NRC) Committee;
3) Stakeholders'' Relationship Committee (SRC)
4) Corporate Social Responsibility (CSR) Committee; and
5) Risk Management Committee (RMC).
The details with respect to the composition, powers, roles, terms of reference, number of meetings etc. of the Committees held during the FY21 and attendance of the Members at each Committee Meeting, are provided in the Corporate Governance Report which forms part of this Report.
All the recommendations made by the Committees of the Board including the Audit Committee were accepted by the Board.
As on March 31, 2021, the Audit Committee comprises of 04 (four) members namely, Mr. Bharat Pal Singh, Mr. Surendra Singh Sirohi, Dr. (Ms.) Tamali Sengupta, Independent Directors and Mr. Arvind Kharabanda, Non-Executive Director.
Mr. Bharat Pal Singh, Independent Director is the Chairman of the Audit Committee.
All members of the Audit Committee are financially literate and have experience in financial management.
The Companies Act, 2013 mandates formal annual evaluation by the Board of its own performance and that of its Committees and individual Directors. Schedule IV to the Act provides that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Directors being evaluated.
Pursuant to the provisions of the Act read with relevant rules issued thereunder, Regulation 17(10) of the SEBI Listing Regulations and the Circular issued by SEBI on January 05, 2017 with respect to Guidance Note on Board Evaluation, the evaluation of the annual performance of the Directors/ Board/ Committees was carried out for the FY21.
The parameters for the performance evaluation of the Board, inter-alia, include performance of the Board on deciding long term strategy, rating the composition and mix of Board members, discharging of governance and fiduciary duties, handling critical and dissenting suggestions, etc.
The performance of the Board was evaluated after seeking inputs from all the Directors on the basis of above parameters. The performance of the Committees was evaluated after seeking inputs from the Committee members on the basis of criteria such as the composition of Committees, effectiveness of Committee meetings, etc.
The Nomination, Remuneration and Compensation Committee reviewed the performance of the Individual Directors, the Committees of the Board and the Board as a whole. A questionnaire for the evolution of the Board, its Committees and the individual members of the Board (including the Chairperson), covering various aspects of the performance of the Board and its Committees, including composition and quality, roles and responsibilities, processes and functioning, adherence to Code of Conduct and Ethics and best practices in corporate governance was sent to the Directors.
The Board of Directors reviewed the performance of the Independent Directors. Performance Evaluation was done on the basis of criteria such as the contribution of the individual director to the Board and Committee meetings like preparedness on the agenda items, technical knowledge on the subject matter, meaningful and constructive contribution and inputs in meetings, etc.
In a separate meeting of the Independent Directors, performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of Executive Directors and Non-Executive Directors.
The Directors expressed their satisfaction with the evaluation process.
The details of the evaluation process are set out in the Corporate Governance Report which forms part of this Annual Report.
AUDITORS AND AUDITORS'' REPORT Statutory Auditors & their Report
M/s S. Bhandari & Co., Chartered Accountants (FRN: 000560C) and M/s Oswal Sunil & Company, Chartered Accountants (FRN: 016520N) were appointed as Statutory Auditors for one term of 05 (five) consecutive years, at the 30th Annual General Meeting of the Company, held on September 25, 2017, for auditing the accounts of the Company from the financial year 2017-18 to 2021-22.
The requirement to place the matter relating to appointment of auditors for ratification by members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from May 07, 2018. Accordingly, no resolution is being proposed for ratification of appointment of Statutory Auditors at the ensuing AGM and a note in respect of the same has been included in the Notice convening ensuing AGM.
The Statutory Auditors have confirmed that they are not disqualified from continuing as Statutory Auditors of the Company.
The Auditors'' Report does not contain any qualification, reservation or adverse remark.
Further, there were no frauds reported by the Statutory Auditors to the Audit Committee or the Board under Section 143(12) of the Act.
Secretarial Auditors & their Report
Pursuant to provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended or re-enacted from time to time), your Company had appointed Mr. Baldev Singh Kashtwal, Company Secretary in whole-time practice, having COP No. 3169 and Membership No. F-3616, for conducting the Secretarial Audit of your Company for the FY21.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of loans, guarantees and investments, as on March 31, 2021, as stipulated under Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, are as follows:-
The Secretarial Audit Report in prescribed form MR-3, issued by the Secretarial Auditor is annexed herewith as Annexure-C to this Report.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
Your Company has maintained cost accounts and records as specified by the Central Government under sub-section (1) of Section 148 of the Act and the relevant rules made thereunder.
Requirement of Cost Audit as stipulated under the provisions of Section 148 of the Act, are not applicable for the business activities carried out by the Company.
INSOLVENCY AND BANKRUPTCY CODE, 2016
There is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the FY21.
VIGIL MECHANISM/ WHISTLE-BLOWER POLICY
The Board of Directors of your Company has formulated a Whistle-Blower Policy, which is in compliance with the provisions of Section 177(9) & (10) of the Act and Regulation 22 of the SEBI Listing Regulations.
The Company, through this Policy envisages to encourage the Directors and employees of the Company to report to the appropriate authorities any unethical behaviour, improper, illegal or questionable acts, deeds, actual or suspected frauds or violation of the Company''s Codes of Conduct for the Directors and the Senior Management Personnel.
During FY21, no complaint was received and no individual was denied access to the Audit Committee for reporting concerns, if any.
The Policy on Vigil Mechanism / Whistle-Blower Policy may be accessed on the Company''s website at the link: http://www.hfcl.com/wp-content/ uploads/2017/05/Whistle-Blower-Policy.pdf.
Brief details of establishment of Vigil Mechanism in the Company, is also provided in the Corporate Governance Report which forms part ofthis Report.
CARE Ratings Limited, vide its letter dated December 07, 2020, has re-affirmed the credit rating for the Long Term Bank facilities of the Company to CARE A Minus; (Single A Minus) with Outlook "Negativeâ.
The credit rating for the short term bank facilities were revised to CARE A2 (A Two) from CARE A2 (A Two Plus).
The Annual Return of the Company as on March 31, 2020, in prescribed e-form MGT-7 in accordance with Section 92(3) of the Act, read with Section 134(3)(a) of the Act, is available on the Company''s website at https://www.hfcl.com/wp-content/uploads/2021/08/Annual-Retrun -2019-20.pdf.
Further the Annual Return (i.e. e-form MGT-7) for the FY21 shall be filed by the Company with the Registrar of Companies, Himachal Pradesh, within the stipulated period and the same can also be accessed thereafter on the Company''s website at: http://www.hfcl.com.
Particulars |
Amount (? in Crores) |
|||
Loans given |
29.50 |
|||
Guarantees given |
154.16 |
|||
Investments made |
65.19 |
|||
Loans given, Guarantees provided and Investments made during the FY21: |
||||
Name of the entity |
Relation |
Amount |
Particulars of Loans, |
Purpose for which the Loans, Guarantees |
(? in Crores) |
Guarantees & Investments |
and Investments are proposed to be utilized by the recipient |
||
Nimpaa Tele-communications Private Limited |
Unrelated |
3.00 |
Loan with interest @ 10% p.a. |
For Capex & Opex Requirements. |
HTL Limited |
Subsidiary |
14.00 |
Corporate Guarantee |
Collateral Security for various credit facilities sanctioned by Yes Bank Limited to HTL Limited. |
Nivetti Systems Private Limited |
Unrelated |
11.96 |
Investment in Equity Shares |
Product R&D and Business Development |
For more details, please refer Note No. 8.1, 18, 47(c) and 51 to the Standalone Financial Statements for FY21 of the Company. |
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Your Company has adopted a "Policy on Dealing with and Materiality of Related Party Transactionsâ, in accordance with the provisions of the Companies Act, 2013 and Regulation 23 of the SEBI Listing Regulations, inter-alia, providing a framework for governance and reporting of Related Party Transactions including material transactions and threshold limits for determining materiality.
The said Policy is also available on the website of the Company at the web-link: http://www.hfcl.com/wp-content/uploads/2019/06/Policy-on-Related-Party-Transactions-RPTs.pdf.
During the year under review, all contracts/ arrangements/ transactions entered into by the Company with related parties were in ordinary course of business and on arm''s length basis.
The Company has not entered into any contracts/ arrangements/ transactions with related parties which qualify as material in accordance with the Policy of the Company on materiality of related party transactions.
Thus, there are no transaction required to be reported in prescribed Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014.
All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions, formulated by the Company.
There are no materially significant related party transactions that may have potential conflict with interest of the Company at large.
There are no transactions with the person(s) or entities forming part of the Promoter(s) / Promoter(s) Group, which individually hold 10% or more shareholding in the Company.
The details of the related party transactions as per Indian Accounting Standards (IND-AS) - 24 are set out in Note 51 to the Standalone Financial Statements of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of energy conservation, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act read with the Rule 8 of the Companies (Accounts) Rules, 2014, are annexed herewith as Annexure - D to this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has been proactively carrying out CSR activities since more than two decades.
The Company is undertaking CSR activities through its Registered Society i.e. HFCL Social Services Society ("HSSSâ) established in the year 1996.
In compliance with requirements of Section 135 of the Act, the Company has laid down a Corporate Social Responsibility (CSR) Policy. The CSR Policy is available on the website of the Company and may be accessed at the web-link: http://www.hfcl.com/wp-content/uploads/2016/01/ CSR-Policy.pdf.
The composition of the CSR Committee, brief contents of CSR Policy, unspent amount and reason thereof if any and report on CSR activities carried out during the FY21, in the format, prescribed under Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure - E.
For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which forms part of this Report.
MATERIAL CHANGES AFFECTING THE COMPANYA. Change in nature of business
The Company has not undergone any change in the nature of the business during the FY21.
B. Material changes and commitments, if any, affecting the financial position of the Company
There are no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the FY21 and the date of this Report.
Further, as we are aware that the outbreak of COVID-19 Pandemic has impacted businesses not only in India but to all economics in the world.
Pursuant to directives of SEBI vide Circular No. SEBI/HO/CFD/CMDI/ CIR/P/2020/84 dated May 20, 2020, the Company vide its Corporate Announcement made to stock exchanges on June 05, 2020, has already disclosed the impact of COVID-19 on business, performance and finance of the Company.
The Company has evaluated the impact of COVID-19 resulting from (i) the possibility of constraints to render supply & services which may require revision of estimations of costs to complete the contracts because of additional efforts; (ii) onerous obligations;
(iii) penalties relating to breaches of service level agreements, and
(iv) termination or deferment of contracts by customers. The Company has concluded that the impact of COVID-19 is not material based on these estimates. Due to the nature of the pandemic, the Company will continue to monitor developments to identify significant uncertainties relating to revenue in future periods.
The Company has considered the possible effects that may result from the pandemic of COVID-19 in the preparation of the financial statements including their coverability of carrying amounts of financial and non-financial assets. Further the impact assessment does not indicate any adverse impact on the ability of the Company to continue as a going concern. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company has, at the date of approval of the financial statements, used internal and external sources of information including credit reports and related information and economic forecasts and expects that the carrying amount of the assets will be recovered. The impact of COVID-19 on the Company''s financial statements may differ from that estimated as at the date of approval of these financial statements.
The impact of COVID-19 is also mentioned at Note No. 41 to the Standalone Financial Statements for FY21.
SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS, TRIBUNALS AFFECTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE
There is no significant / material order passed by the Regulators, Courts, Tribunals affecting the going concern status and the Company''s operations in future.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has in place a Policy on Prevention of Sexual Harassment at Workplace, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and the rules made thereunder.
Internal Complaints Committee(s) (ICCs) at each workplace of the Company, have been set up to redress complaints, if any, received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.
ICC of each workplace of the Company has also filed Annual Return for the calendar year 2020 at their respective jurisdictional office, as required under Section 21(1) of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013.
There was no complaint received from any employee of the Company during the FY21.
The Company has achieved various milestones which have already been set out in the Management Discussion and Analysis (MDA) Report forming part of the Annual Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3)(c) of the Act, the Directors confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the Directors had 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 March 31,2021 and of the profits of the Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis; and
(e) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The equity shares of your Company are presently listed on the BSE Limited (''BSE'') and the National Stock Exchange of India Limited (''NSE''). The Company has paid annual listing fee for the FY22 to the BSE and the NSE.
Your Company''s Scrip has come under compulsory dematerialization w.e.f. November 29, 1999 for Institutional Investors and w.e.f. January 17, 2000 for all Investors. So far, 99.96% of the equity shares have been dematerialized.
The ISIN allotted to the equity shares of the Company is INE548A01028. IMPLEMENTATION OF CORPORATE ACTION
During the year under review, the Company has not failed to implement any Corporate Action within the specified time limit.
COMPLIANCE WITH SECRETARIAL STANDARDS
Pursuant to the provisions of Section 118(10) of the Act, the Company has complied with the applicable provisions of the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).
The Financial and Statutory Data presented in this Report is in line with the requirements of the Companies Act, 2013 (including the rules made thereunder), Indian Accounting Standards and the Secretarial Standards.
The Financial Information is reported for the period April 01, 2020 to March 31,2021. Some parts of the Non-Financial Information included in this Board''s Report are provided as on the date of this Report.
Statements in the Management Discussions & Analysis Report describing the Company''s projections, estimates, expectations or predictions may be ''forward looking statements'' within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the Company''s operations include demand supply conditions, raw material prices, changes in government regulations, tax regimes and economic developments within the Country and abroad and such other factors.
Your Directors wish to place on record their sincere appreciation for the devoted services of all the employees and workers at all levels and for their dedication and loyalty, which has been critical for the Company''s success.
Your Company''s organizational culture upholds professionalism, integrity and continuous improvement across all functions as well as efficient utilization of the Company''s resources for sustainable and profitable growth.
Your Directors wish to place on record their appreciation for the valuable co-operation and support received from the Government of
India, various State Governments, the Banks and other stakeholders such as, shareholders, customers and suppliers, among others.
The Directors look forward to their continued support in future.
The Directors thank the Central Government, Government of Goa, Government of Telangana, Government of Himachal Pradesh, IDBI Bank Limited, State Bank of India, Punjab National Bank, erstwhile Oriental Bank of Commerce & United Bank of India, Bank of Baroda, Union Bank of India, Yes Bank Limited, ICICI Bank Limited, Indian Bank and other Banks for all co-operations, facilities and encouragement they have extended to the Company.
Your Directors acknowledge the continued trust and confidence you have reposed in the Company.
For and on behalf of the Board
Mar 31, 2018
To the Members,
The Directors have pleasure in presenting the 31st Annual Report and Audited Accounts for the financial year ended 31st March, 2018.
FINANCIAL RESULTS
(Rs. in crore)
Particulars |
Standalone |
Consolidated |
||
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
Revenue from Operations (Net) |
3070.08 |
2015.95 |
3230.56 |
2131.41 |
Other Income |
19.47 |
18.57 |
26.43 |
21.41 |
Total Income |
3089.55 |
2034.52 |
3256.99 |
2152.82 |
Operating Expenses |
2676.00 |
1681.38 |
2799.91 |
1778.41 |
Other Expenditure |
130.95 |
153.78 |
148.04 |
166.06 |
Depreciation and amortization |
16.26 |
15.70 |
23.22 |
21.75 |
Exceptional Items |
1.79 |
- |
1.79 |
- |
Total Expenses |
2825.00 |
1850.86 |
2972.96 |
1966.22 |
Profit before finance cost and tax |
264.55 |
183.66 |
284.03 |
186.6 |
Finance cost* |
60.91 |
59.94 |
63.63 |
62.39 |
Profit before Tax (PBT) |
203.64 |
123.72 |
220.4 |
124.21 |
Tax Expense net of MAT credit entitlement |
48.61 |
- |
48.70 |
0.50 |
Profit after Tax |
155.03 |
123.72 |
171.70 |
123.71 |
Attributable to : |
||||
Shareholders of the Company |
- |
- |
167.87 |
122.93 |
Non-controlling interests |
- |
- |
3.83 |
0.78 |
Opening balance of retained earnings |
629.52 |
513.17 |
549.74 |
434.18 |
Adjustment with other equity |
- |
- |
- |
- |
Amount available for appropriation |
784.55 |
636.89 |
717.61 |
557.11 |
Appropriations |
||||
Debenture redemption reserve |
1.06 |
7.37 |
1.06 |
7.37 |
Capital Redemption Reserve |
20.12 |
- |
20.12 |
- |
Closing Balance of retained earnings |
763.37 |
629.52 |
696.43 |
549.74 |
*Dividend of Rs.5.23 crore (excluding tax) on preference shares is part of Finance cost.
INDIAN ACCOUNTING STANDARDS (IND AS)
Your Companyâs, its subsidiaries and joint venture financial statements for the year ended 31st March, 2018 are the financial statements prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendments Rules, 2016 as applicable.
DIVIDEND
During the year under review, the Board of Directors at its meeting held on 7th November, 2017 has declared and paid first Interim Dividend of Rs.3.25 per share on 80,50,000, 6.50% Cumulative Redeemable Preference Shares (CRPS) of Rs.100/- each for the financial year ended 31st March, 2018. The Board of Directors at its meeting held on 15th March, 2018 also declared and paid second Interim Dividend of Rs.3.25 per share on above CRPS for the financial year ended 31st March, 2018. The Company has made the payment of Rs.5.23 crore towards Interim Dividends (excluding tax) on CRPS for the financial year 2017-18.
The Board of Directors at its meeting held on 3rd May, 2018 has recommended a dividend of â0.06 (paisa six) i.e. 6% per equity share of Rs.1/- each aggregating to Rs.7.44 crore (excluding tax) for the financial year ended 31st March, 2018 subject to the approval of shareholders at the ensuing Annual General Meeting (AGM) of the Company.
The dividend payout is in accordance with the Companyâs Dividend Distribution Policy. The Policy has been uploaded on the Companyâs website and can be accessed through the following links: http://www.hfcl.com/wp-content/uploads/2017/05/Dividend_ Distribution_Policy.pdf.
TRANSFER TO RESERVES
The Company has not transferred any amount to the General Reserve for the financial year ended 31st March, 2018.
CHANGES IN CAPITAL STRUCTURE
As on 31st March, 2018, the paid up capital of the Company stood at Rs.184,31,27,194/- comprising of 1,23,93,77,194 equity shares of Rs.1/- each amounting to Rs.123,93,77,194/- and 60,37,500, 6.50% Cumulative Redeemable Preference Shares (CRPS) of Rs.100/- each amounting to Rs.60,37,50,000/- aggregating to Rs.184,31,27,194/-. During the year, the Company has redeemed 20,12,500, 6.50% CRPS of Rs.100/- each aggregating to Rs.20,12,50,000 at par as per the terms of CRPS.
During the year under review, the Company has issued and allotted 4,50,00,000 Warrants convertible into equity shares on preferential basis at a price of Rs.16/- per warrant to Promoters/Promoter Group of the companies and Non Promoter persons/entity. The Warrant holders have already paid 25% of the issue price and balance 75% of the issue price shall be paid at the time of exercising of Warrants. The Warrants shall be exercised within a period of 18 months form the date of their allotment i.e. 30th October, 2017 in one or more tranches.
The Company has 4,50,00,000 warrants outstanding as on 31st March, 2018. The Warrants are to be converted into equivalent equity shares within 18 months from the date of allotment i.e. 30th October, 2017 upon exercise.
MANAGEMENT DISCUSSION & ANALYSIS (MDA)
Management Discussion & Analysis (MDA) Report for the year under review as stipulated under Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ) is presented in a separate section forming part of this Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
As per Regulation 33 of the Listing Regulations and applicable provisions of the Companies Act, 2013 read with the rules issued thereunder, the Consolidated Financial Statements of your Company for the financial year 2017-18 have been prepared in compliance with the applicable Accounting Standards and on the basis of Audited Financial Statements of the Company, its subsidiaries and Un-audited Financial Statements of joint venture. The Audited Consolidated Financial Statements together with the Auditorsâ report form part of this Annual Report.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
M/s HTL Limited, M/s Moneta Finance Private Limited, M/s Polixel Security Systems Private Limited and M/s HFCL Advance Systems Private Limited continue to be the subsidiaries of your Company. DragonWave HFCL India Pvt. Ltd. continues to be a Joint Venture company of your Company and DragonWave Inc., Canada now known as Dragonwave - X Canada Inc., a subsidiary of Transform - X Inc.
A separate statement containing the salient features of financial statements of all subsidiaries of your Company as on 31st March, 2018 forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. The financial statements of the subsidiary companies and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and Public Holidays up to the date of the AGM as required under Section 136 of the Companies Act, 2013. Any shareholder desirous of obtaining the Annual Accounts and related information of the above subsidiary companies may write to the Company Secretary at M/s Himachal Futuristic Communications Ltd. 8, Commercial Complex, Masjid Moth, Greater Kailash - II, New Delhi - 110048 and the same shall be sent by post. The financial statements including the consolidated financial statements, financial statements of subsidiaries and all other documents required to be attached to this report have been uploaded on the website of the Company www.hfcl.com.
A report on the performance and financial position of each of subsidiaries and joint venture company as per the Companies Act, 2013 is provided as âAnnexure-Aâ to the consolidated financial statements and hence not repeated here for sake of brevity. The policy for determining material subsidiaries as approved by the Board of Directors may be accessed on the Companyâs website at the link http://www.hfcl.com/wp-content/uploads/201 7/05/Policy-on-Material-Subsidiaries.pdf.
FIXED DEPOSITS
During the financial year 2017-18, your Company has not accepted any deposit within the meaning of Section 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.
DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES
The remuneration paid to the Directors is in accordance with the Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force). The salient aspects covered in the Remuneration Policy have been outlined in the Corporate Governance Report which forms part of this Report.
The Managing Director of your Company does not receive remuneration from any of the subsidiaries of the Company.
The information required under Section 197 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) in respect of Directors/employees of the Company is set out in âAnnexure - Aâ to this Report and is also available on the website of the Company.
DIRECTORS & KEY MANAGERIAL PERSONNEL (KMPs) APPOINTMENTS/RE-APPOINTMENTS
Dr. Ranjeet Mal Kastia, Non-Executive Director is liable to retire by rotation at this ensuing AGM pursuant to Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of your Company and being eligible offers himself for re-appointment. Appropriate resolution for his re-appointment is being placed for your approval at the ensuing AGM. The Brief resume of him and other related information are being given in the Notice convening the 31st AGM of your Company. Your Directors recommend his re-appointment as a Non-Executive Director of your Company.
The Board of Directors on recommendation of the Nomination, Remuneration and Compensation Committee has re-appointed Shri Mahendra Nahata as the Managing Director of the Company for a period of 3 (three) years with effect from 1st October, 2018 subject to approval of shareholders, as his current term of office is up to 30th September, 2018.
During the financial year 2017-18, the Board of Directors appointed Shri Ranjeet Anandkumar Soni as a Nominee Director of IDBI Bank Limited w.e.f. 7th November, 2017 in place of Shri Rajiv Sharma. Shri Ranjeet Anandkumar Soni is proposed to be appointed as a NonExecutive Director, liable to retire by rotation at the ensuing AGM.
Further the Board of Directors appointed Shri Surendra Singh Sirohi and Shri Ved Kumar Jain as Additional/Non-Executive Independent Directors for a period of 3 (three) years w.e.f. 27th August, 2018 subject to the approval of shareholders at the ensuing AGM. Your directors recommend their appointments as an Independent Director.
Shri Mahendra Pratap Shukla and Smt. Bela Banerjee shall complete their second term as an Independent Director and will cease to be Independent Director of the Company with the conclusion of ensuing AGM to be held on 29th September, 2018.
However, the Board of Directors of the Company on the recommendation of Nomination, Remuneration and Compensation Committee at their meeting held on 27th August, 2018 has appointed Shri Mahendra Pratap Shukla as a Non-Executive Director designated as Non-Executive Chairman of the Company w.e.f. 29th September, 2018 . Your directors feel confident that your Company will be immensely benefited by his continuing association with the Board.
COMPLIANCE WITH SECRETARIAL STANDARDS
Your Directors confirm that the Secretarial Standards issued by the Institute of Company Secretaries of India, as applicable to the Company have been complied with.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company and related matters are put up on the website of the Company at the link: http://www.hfcl.com/wp-content/uploads/2017/04/HFCL-Familiarisation-Prog.-Idependent-Director.pdf.
ANNUAL EVALUATION OF BOARD PERFORMANCE
Pursuant to the provisions of the Companies Act, 2013 read with the Rules issued thereunder, Regulation 17(10) of the Listing Regulations and the circular issued by SEBI on 5th January, 2017 with respect to Guidance Note on Board Evaluation, the evaluation of the annual performance of the Directors/Board/Committees was carried out for the financial year 2017-18.
The details of the evaluation process are set out in the Corporate Governance Report which forms part of this Report.
KEY MANAGERIAL PERSONNEL
During the year under review, Shri Mahendra Nahata, Managing Director, Shri V R Jain, CFO and Shri Manoj Baid, Vice-President (Corporate) & Company Secretary continue to be Key Managerial Personnel in accordance with the provisions of the Companies Act, 2013 and Rules made thereunder.
PARTICULARS OF EMPLOYEESâ AND RELATED DISCLOSURES
In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), a statement showing the names of top ten employees of the Company in terms of remuneration drawn and other particulars of the employees drawing remuneration in excess of the limits set out in said rules are given in âAnnexure-Aâ annexed herewith.
NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE
The details of the number of Board and Audit Committee meetings of the Company are set out in the Corporate Governance Report which forms part of this Report. The intervening gap between two meetings of the Board is within the stipulated time frame prescribed in the Companies Act, 2013 and Listing Regulations.
AUDIT COMMITTEE
The details pertaining to composition of Audit Committee are included in the Corporate Governance Report which forms part of this Report.
DECLARATION OF INDEPENDENCE
The Company has received a declaration from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013 read with the Schedule and Rules issued thereunder as well as Regulation 16(1)(b) of the Listing Regulations.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:
(a) in the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;
(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 as at 31st March, 2018 and of the profits of the Company for the financial year ended 31st March, 2018;
(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 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 âgoing concernâ basis;
(e) the Directors have laid down proper internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
AUDITORS AND AUDITORSâ REPORT
S. Bhandari & Co., Chartered Accountants (Firm registration number 000560C) (âSBCâ) and Oswal Sunil & Company, Chartered Accountants (Firm registration number 016520N) (âOswalâ) were appointed as Statutory Auditors for a period of five years for auditing the accounts of the Company from the financial year 2017-18 to 2021-2022 at the Annual General Meeting held on 25th September, 2017. They have confirmed that they are not disqualified from continuing as Auditors of the Company.
The Auditorâs observations in the Standalone and Consolidated Auditorsâ Report are self-explanatory and do not call for any further comments. The Statutory Auditors in the Annexure to the Standalone Auditorsâ Report have mentioned about a slight delay in deposit of statutory dues in few cases. In future, the management will make all efforts to deposit the same within time.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Shri Baldev Singh Kashtwal, Practicing Company Secretary having Membership No. F3616 and C.P. No. 3169 to conduct the Secretarial Audit of your Company for the financial year 2017-18. The Secretarial Audit Report is annexed herewith as âAnnexure -Bâ to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
EXTRACT OF ANNUAL RETURN
The details forming part of the extracts of the Annual Return in Form MGT - 9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 are set out herewith as âAnnexure-Câ to this Report.
RELATED PARTY TRANSACTIONS
During the financial year 2017-18, the Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, which were in the ordinary course of business and on armsâ length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued thereunder and Regulation 23 of the Listing Regulations. During the year, the Company has also entered into transactions with related parties which were at armsâ length basis but not in ordinary course of business as per details given hereunder:
(In Rs.)
Sr. |
Names of the Related Party & nature of relationship |
Nature of transactions |
Cost of |
Amount of |
No. |
acquisition |
consideration |
||
1 |
HTL Limited (subsidiary under Section 2(87) of the |
High Sea Sale of Plant & |
2,26,54,800/- |
2,37,87,540/- |
Companies Act, 2013) |
Machineries |
Above related party transaction was entered into after obtaining approval of Audit Committee as well as Board of Directors of the Company.
During the financial year 2017-18, there were no transactions with related parties which qualify as material transactions under the Listing Regulations.
The details of the related party transactions as required under Ind AS - 24 are set out in Note - 51 to the standalone financial statements forming part of this Annual Report.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companyâs website at the link http://www.hfcl. com/wp-content/uploads/2017/05/POLICY-ON-RELATED-PARTY-TRANSACTIONS.pdf.
LOANS, GUARANTEES AND INVESTMENTS
The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 outstanding as at 31st March, 2018 are as follows:
(Rs. in crore)
Particulars |
Amount |
Loans given |
31.25 |
Guarantees given |
35.66 |
Investments made |
66.18 |
Loans, Guarantees and Investments made during the financial year 2017-18:
(Rs. in crore)
Name of the entity |
Relation Amount |
Particulars of Loans, Guarantees and Investments |
Purpose for which the Loans, Guarantees and Investments are proposed to be utilized |
Owens-Corning (India) Private Limited |
Supplier 3.00 |
Guarantee |
Corporate Guarantee given to M/s Owens-Corning (India) Private Limited on behalf of HTL Limited, a subsidiary of the Company, for the supply of material i.e. glass roving for manufacturing FRP Rods. |
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the financial year 2017-18 are set out in âAnnexure-Dâ of this Report in the format prescribed under the Companies (Corporate Social Responsibility) Rules, 2014. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which forms part of this Report. The CSR Policy is available on the website of the Company and may be accessed at the URL http://www.hfcl.com/wp-content/uploads/2016/01/CSR-Policy.pdf.
The Company is undertaking CSR activities through its Registered Society i.e. HFCL Social Services Society (âHSSSâ) established in the year 1996.
BUSINESS RESPONSIBILITY REPORT
As stipulated under the Listing Regulations, the 2nd Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective is attached as âAnnexure Eâ.
CREDIT RATING
Due to significant improvements in the key rating drivers of the Company, CARE Ratings Limited (formerly known as Credit Analysis & Research Limited) (âCAREâ) on its review has upgraded the Credit Ratings of the Company to A Minus; Stable (Single A Minus ; Outlook : Stable) from BBB ; Negative (Triple B Plus; Outlook: Negative).
EMPLOYEESâ LONG TERM INCENTIVE PLAN
With the objective to promote entrepreneurial behaviour among employees of the Company, motivate them with incentives and reward their performance with ownership in proportion to the contribution made by them as well as align the interest of the employees with that of the Company, Himachal Futuristic Communications Limited Employeesâ Long Term Incentive Plan - 2017 (âHFCL Plan 2017â) was approved by the Board of Directors of the Company on 26th August, 2017 which was further approved by the members of the Company on 25th September, 2017.
The HFCL Plan 2017 comprises of the following three subset:
1. Employee Stock Option Plan (ESOP) under which Options would be granted
2. Restricted Stock Units Plan (RSUP) under which Units would be granted
3. Employee Stock Purchase Scheme (ESPS) under which shares would be issued
The In-Principle Approval, for Employee Stock Options (âOptionsâ), Restricted Stock Units (âRSUsâ) and shares under Employee Stock Purchase Scheme (ESPS) in terms of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 was obtained from National Stock Exchange of India Limited (âNSEâ) on 15 th June, 2018. The BSE Limited (âBSEâ) has also granted in-principle approval for Options & RSUs on 21st June, 2018 followed by their in-principle approval dated 28th June, 2018 for shares to be issued under ESPS.
The maximum number of equity shares that may be issued under the HFCL Plan 2017 shall not exceed 2,50,00,000 (Two Crore Fifty Lakh) equity shares of the Company. The maximum number of Options that may be issued pursuant to aforesaid subset is 1,00,00,000 (One Crore) convertible into equal number of equity shares of Rs.1/- each of the Company. Similarly, the maximum number of RSUs that may be issued pursuant to the aforesaid subset is 1,00,00,000 (One Crore) convertible into equal number of equity shares of Rs.1/- each of the Company. The maximum no. of equity shares reserved under ESPS is 50,00,000 equity shares of Rs.1/- each.
During the financial year ended 31st March, 2018, Company has not granted any Stock Options/RSU/ shares under ESPS in terms of the HFCL Plan 2017.
VIGIL MECHANISM
The Board of Directors of the Company have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177(10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations. The Company, through this policy envisages to encourage the Directors and Employees of the Company to report to the appropriate authorities any unethical behaviour, improper, illegal or questionable acts, deeds, actual or suspected frauds or violation of the Companyâs Code of Conduct for Directors and Senior Management Personnel. The Policy on Vigil Mechanism/ Whistle blower policy may be accessed on the Companyâs website at the link http://www.hfcl.com/wp-content/uploads/2017/05/ Whistle-Blower-Policy.pdf.
DEPOSITORY SYSTEMS
The Companyâs scrip has come under compulsory dematerialization w.e.f. 29th November, 1999 for Institutional Investors and w.e.f. 17th January, 2000 for all Investors. So far, 99.96% of the equity shares have been dematerialized. The ISIN allotted to the equity shares of the Company is INE548A01028.
CORPORATE GOVERNANCE
In Compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance along with certificate from a Company Secretary in practice on its compliance, forms an integral part of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is set out herewith as âAnnexure-Fâ to this Report.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future.
GENERAL
a) Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise;
b) Managing Director of the Company does not receive any remuneration or commission from any of its subsidiaries;
c) No fraud has been reported by the Auditors to the Audit Committee or the Board of the Directors of the Company; and
d) Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Your Directors further state that the Company has complied with the provisions relating to the constitution of Internal Complaint Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
e) During the year under review, your Company has maintained cost records as prescribed under Section 148(1) of the Companies Act, 2013
CAUTIONARY STATEMENT
Statement in the Management Discussions & Analysis describing the Companyâs projections, estimates, expectations or predictions may be âforward looking statementsâ within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the Companyâs operations include demand supply conditions, raw material prices, changes in government regulations, tax regimes and economic developments within the country and abroad and such other factors.
ACKNOWLEDGEMENTS
The Directors thank the Central Government, Govt. of Himachal Pradesh, Govt. of Goa, Govt. of Telangana, IDBI Bank Limited, State Bank of India, Oriental Bank of Commerce, Punjab National Bank, Bank of Baroda, Union Bank of India, United Bank of India, Yes Bank Limited and other Banks for all co-operations, facilities and encouragement they have extended to the Company. Your Directors acknowledge the continued trust and confidence you have reposed in the Company. The Directors also place on record their appreciation for the services rendered by the officers, staff & workers of the Company at all levels and for their dedication and loyalty.
For and on behalf of the Board
M P Shukla
Place: New Delhi Chairman
Date: 27th August, 2018 DIN: 00052977
Mar 31, 2017
To the Members,
The Directors have pleasure in presenting the 30th Annual Report and Audited Accounts for the financial year ended 31st March, 2017.
FINANCIAL RESULTS
(Rs. in crore)
Particulars |
Standalone |
Consolidated |
||
2016-2017 |
2015-2016 |
2016-2017 |
2015-2016 |
|
Revenue from Operations |
2241.44 |
2858.37 |
2377.56 |
2872.38 |
Other Income |
19.42 |
22.35 |
222.93 |
34.79 |
Total Income |
2260.86 |
2880.72 |
2400.49 |
2907.17 |
Expenses |
1553.18 |
1918.60 |
1644.26 |
1932.23 |
Operating Expenditure |
509.78 |
618.40 |
548.93 |
621.09 |
Depreciation and amortization |
15.71 |
24.90 |
21.75 |
26.18 |
Exceptional Items |
- |
109.95 |
- |
109.95 |
Total Expenses |
2078.67 |
2671.85 |
2214.94 |
2689.31 |
Profit before finance cost and tax |
182.19 |
208.87 |
185.55 |
217.86 |
Finance cost* |
58.47 |
58.42 |
61.33 |
61.50 |
Profit before tax (PBT) |
123.72 |
150.45 |
124.22 |
156.36 |
Tax Expense net of MAT credit entitlement |
- |
- |
0.50 |
0.01 |
Other Comprehensive Income |
1.87 |
6.46 |
1.80 |
6.88 |
Total Comprehensive Income Attributable to : |
125.59 |
156.92 |
125.52 |
163.23 |
Shareholders of the Company |
- |
- |
124.78 |
162.36 |
Non-controlling interests |
- |
- |
0.74 |
0.87 |
Opening balance of retained earnings |
393.88 |
236.96 |
315.30 |
152.83 |
Adjustment with other equity |
- |
- |
- |
- |
Amount available for appropriation Appropriations |
519.47 |
393.88 |
440.82 |
316.06 |
Debenture redemption reserve |
7.37 |
0.00 |
7.37 |
0.00 |
Non controlling interest |
- |
- |
0.79 |
0.76 |
Closing Balance of retained earnings |
512.10 |
393.88 |
432.66 |
315.30 |
*Dividend of Rs.5.23 crore (excluding tax) on Preference Share is a part of Finance Cost.
INDIAN ACCOUNTING STANDARDS (IND AS)
Your Company, its subsidiaries, associate and joint venture had adopted Ind AS with effect from 1st April, 2016 pursuant to Ministry of Corporate Affairs notification dated 16th February, 2015 notifying the Companies (Indian Accounting Standards) Rules, 2015. Your Company has published Ind AS Financials for the year ended 31st March, 2017 along with comparable as on 31st March 2016.
DIVIDEND
During the year under review, the Board of Directors at its meeting held on 28th November, 2016 has declared and paid first Interim Dividend of Rs.3.25 per share on 80,50,000, 6.50% Cumulative Redeemable Preference Shares (CRPS) of Rs.100/- each. The Board of Directors at its meeting held on 10th May, 2017 also declared Second Interim Dividend of Rs.3.25 per share on above CRPS for financial year ended 31st March, 2017. The Company has made the payment of Rs.5.23 crore towards Interim Dividend (excluding tax) on CRPS for financial year 2016-17.
RE-CLASSIFICATION OF PROMOTERS/PROMOTER GROUP
The Shareholders at its 29th Annual General Meeting held on 29th September, 2016 has approved the re-classification of the Promoters/ Promoter Group pursuant to the Regulation 31 A(2) read with Regulation 31A(7) and other relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ). BSE Limited (ââBSEââ) vide its letter no. LIST/COMP/ VK/04/2017-18 dated 3rd April, 201 7 & LIST/C0MP/VK/31/2017-18 dated 20th April, 2017 & National Stock Exchange of India Limited (âNSEâ) vide its letter no. NSE/LIST/01057 dated 6th April, 2017 have approved Companyâs application for re-classification of following promoter shareholders as public shareholders under the provisions of Regulations 31A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Sr. No. |
Name of Shareholders |
No. of equity shares held |
% of total equity share capital |
1 |
Anil Kumar Nahata |
540 |
0.00004 |
2 |
Vaibhav Credit & Portfolio Pvt. Ltd. |
2800 |
0.00023 |
3 |
Babulal Nahata |
82407 |
0.00665 |
4 |
Yashodham Merchants Pvt. Ltd. |
350000 |
0.02824 |
5 |
Kalyan Vyapaar Pvt. Ltd. |
1098174 |
0.08861 |
6 |
Apex Enterprises (India) Ltd. |
5871195 |
0.47372 |
7 |
Amrit Sales Promotion Pvt. Ltd. |
172700 |
0.01393 |
8 |
Burlington Finance Ltd. |
664200 |
0.05359 |
Total |
8242016 |
0.66501 |
MANAGEMENT DISCUSSION & ANALYSIS (MDA)
Management Discussion & Analysis (MDA) Report for the year under review as stipulated under Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ) is presented in a separate section forming part of this Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
As per Regulation 33 of the Listing Regulations and applicable provisions of the Companies Act, 2013 read with the rules issued thereunder, the Consolidated Financial Statements of your Company for the financial year 2016-17 have been prepared in compliance with the applicable Accounting Standards and on the basis of Audited Financial Statements of the Company, its subsidiaries, associate company and joint venture as approved by the respective Board of Directors. The Audited Consolidated Financial Statements together with the Auditorsâ report form part of this Annual Report.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
M/s HTL Limited, M/s Moneta Finance Private Limited and M/s HFCL Advance Systems Private Limited continue to be the subsidiaries of your Company. The Company has acquired 1,60,000 equity shares of Polixel Security Systems Private Limited (âPolixelâ), thereby the total equity holding of the Company reached upto 94% and Polixel became the subsidiary of the Company w.e.f 9th August, 2016. The Company has further acquired 10,856 equity shares of the Polixel, thereby the total equity holding of the Company in Polixel has reached to 100% and accordingly Polixel has become the wholly owned subsidiary of the Company w.e.f. 31st March, 2017.
A separate statement containing the salient features of financial statements of all subsidiaries of your Company as on 31st March, 2017 forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. The financial statements of the subsidiary companies and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and Public Holidays up to the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any shareholder desirous of obtaining the Annual Accounts and related information of the above subsidiary companies may write to the Company Secretary at M/s Himachal Futuristic Communications Ltd. 8, Commercial Complex, Masjid Moth, Greater Kailash - II, New Delhi - 110048 and the same shall be sent by post. The financial statements including the consolidated financial statements, financial statements of subsidiaries and all other documents required to be attached to this report have been uploaded on the website of the Company www.hfcl.com.
A report on the performance and financial position of each of subsidiaries, associate and joint venture company as per the Companies Act, 2013 is provided as âAnnexure-Aâ to the consolidated financial statements and hence not repeated here for sake of brevity. The policy for determining material subsidiaries as approved by the Board of Directors may be accessed on the Companyâs website at the link http://www.hfd.com/wp-content/uploads/2017/05/Policy-on-Material-Subsidiaries.pdf.
FIXED DEPOSITS
During the financial year 2016-17, your Company has not accepted any deposit within the meaning of Section 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.
DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES
The remuneration paid to the Directors is in accordance with the Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations (including any statutory modification(s) or reenactments) thereof for the time being in force). The salient aspects covered in the Remuneration Policy have been outlined in the Corporate Governance Report which forms part of this Report.
The Managing Director of your Company does not receive remuneration from any of the subsidiaries of the Company.
The Nomination and Remuneration Committee and Board of Directors of the Company at their respective meetings held on 10th May, 201 7 has considered the proposal of revision in remuneration payable to Shri Mahendra Nahata, Managing Director for his remaining tenure i.e. 1stApril, 2017 to 30th September, 2018 subject to the approval of Members at this Annual General Meeting. The Notice of Annual General Meeting will contain the item for the revision of remuneration payable to Shri Mahendra Nahata, Managing Director for his remaining tenure i.e. 1stApril, 2017 to 30th September, 2018.
The information required under Section 197 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) in respect of Directors/employees of the Company is set out in âAnnexure - Aâ to this Report and is also available on the website of the Company.
DIRECTORS & KEY MANAGERIAL PERSONNEL
APPOINTMENTS/RE-APPOINTMENTS
The present term of Shri Arvind Kharabanda, Whole-time Director designated as Director (Finance) had expired on 31st May, 2016 and he has shown his unwillingness to continue as a Whole-time Director. However, he continues to hold the position of a Non Executive Director of the Company.
Shri Arvind Kharabanda, Non-Executive Director is liable to retire by rotation at this ensuing Annual General Meeting (AGM) pursuant to Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of your Company and being eligible offers himself for re-appointment. Appropriate resolution for his reappointment is being placed for your approval at the ensuing AGM. The Brief resume of him and other related information are being given in the Notice convening the 30th AGM of your Company. Your Directors recommend his re-appointment as a Non-Executive Director of your Company.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company and related matters are put up on the website of the Company at the link: http://www.hfcl.com/wp-content/uploads/2017/04/HFCL-Familiarisation-Prog.-Idependent-Director.pdf.
ANNUAL EVALUATION OF BOARD PERFORMANCE
Pursuant to the provisions of the Companies Act, 2013 read with the Rules issued thereunder, Regulation 17(10) of the Listing Regulations and the circular issued by SEBI on 5th January, 2017 with respect to Guidance Note on Board Evaluation, the evaluation of the annual performance of the Directors/Board/Committees was carried out for the financial year 2016-17.
The details of the evaluation process are set out in the Corporate Governance Report which forms part of this Report.
KEY MANAGERIAL PERSONNEL
During the year under review, Shri Mahendra Nahata, Managing Director, Shri V R Jain, CFO and Shri Manoj Baid, Vice-President (Corporate) & Company Secretary remained the Key Managerial Personnel in accordance with the provisions of the Companies Act, 2013 and Rules made thereunder. During the year under review, Shri Arvind Kharabanda, Director (Finance) ceased to be a Wholetime Director of the Company with effect from 1st June 2016 and hence also ceases to be a Key Managerial Personnel of the Company from that date. However, Shri Arvind Kharabanda continues to be a Non-Executive Director of the Company.
PARTICULARS OF EMPLOYEESâ AND RELATED DISCLOSURES
In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), a statement showing the names of top ten employees of the Company in terms of remuneration drawn and other particulars of the employees drawing remuneration in excess of the limits set out in said rules are given in âAnnexure-Aâ annexed herewith.
NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE
The details of the number of Board and Audit Committee meetings of the Company are set out in the Corporate Governance Report which forms part of this Report.
AUDIT COMMITTEE
The details pertaining to Composition of Audit Committee are included in the Corporate Governance Report which forms part of this Report.
DECLARATION OF INDEPENDENCE
The Company has received declaration from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013 read with the Schedule and Rules issued thereunder as well as Regulation 16(1)(b) of the Listing Regulations.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:
(a) in the preparation of the annual accounts for the financial year ended 31st March, 2017, the applicable accounting standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;
(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 as at 31st March, 2017 and of the profits of the Company for the financial year ended 31st March, 2017;
(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 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 âgoing concernâ basis;
(e) the Directors have laid down proper internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
AUDITORS AND AUDITORSâ REPORT
At the 29th Annual General Meeting (AGM) of the Company, Khandelwal Jain & Company, Chartered Accountants (Firm Registration No. 105049W) was appointed as the Statutory Auditors to hold office till the conclusion of the 30th AGM of the Company.
Section 139 of the Companies Act, 2013 (âthe Actâ) was notified effective April 1, 2014. Section 139 of the Act lays down the criteria for appointment and mandatory rotation of statutory auditors. Pursuant to Section 139 of the Act and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of two terms of five consecutive years. The Rules also lay down the transitional period that can be served by the existing auditors depending on the number of consecutive years for which an audit firm has been functioning as auditor in the same company. The existing auditors, Khandelwal Jain & Co., Chartered Accountants (Firm Registration No. 105049W) have served the Company for over 10 years before the Act was notified and will be completing the maximum number of transitional period (three years) at the ensuing 30th Annual General Meeting.
The Audit Committee of the Company at its meeting held on 10th August, 2017 has proposed and on 10th August 2017, the Board has recommended the appointment of S. Bhandari & Co., Chartered Accountants (Firm registration number 000560C) (âSBCâ) and Oswal Sunil & Company, Chartered Accountants (Firm registration number 016520N) (âOswalâ) as the statutory auditors of the Company. SBC & Oswal will hold office for a period of five consecutive years from the conclusion of the 30th Annual General Meeting of the Company till the conclusion of the 35th Annual General Meeting to be held in 2022. The first year of audit will be of the financial statements for the year ending 31st March, 2018, which will include the audit of the quarterly financial statements from second quarter onwards for the financial year ending 31st March, 2018.
The Company has received consent from SBC & Oswal and certificate that they satisfy the criteria provided under Section 141 of the Companies Act, 2013 and that appointment if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and rules made thereunder.
The Auditorâs observations in the Standalone Auditorsâ Report are self-explanatory and do not call for any further comments. The Statutory Auditors in the Annexure to the Auditorsâ Report has mentioned about a slight delay in deposit of statutory dues in few cases. In future, the management will make all efforts to deposit the same within time.
Information and explanations on qualifications/observations in the Consolidated Auditorsâ Report are as under:
Auditorâs Observations in the main Auditorsâ Report:
Para 4:
In case of the subsidiary, HTL Limited, as mentioned in note no. 61 (iv)(b) in the note forming part of CFS, the subsidiary has not made the provision of interest amounting to Rs.1,50,21,120/-for the year ended 31st March, 2017, pending the adjustment of ETP compensation against the interest portion of outstanding Government of India loan. Had the provisions for the same has been made, finance cost and liability as on 31.03.2017 would have been higher by Rs. 1,50,21,120/- and profit for the year and total equity would have been lower by Rs. 1,50,21,120/-.
Reply
The provision for interest on certain borrowings has not been made by the subsidiary company pending the reworking of the interest on account of adjustment of one of claim of Rs.347 lakhs against the outstanding interest on certain loans, the subsidiary company has not provided for the interest amounting to Rs.150.21 lakhs during the year. The final adjustment for interest, if any, will be done by the subsidiary company once the reconciliation is agreed upon.
Though the auditor has mentioned the maximum impact of Rs.150.21 Lakhs, however the management of the subsidiary company is discussing the matter with the concerned lender for the adjustment/ reversal of excess interest, as the case may be. Hence the impact is not ascertainable at present.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Shri Baldev Singh Kashtwal, Practicing Company Secretary having Membership No. F3616 and C.P. No. 3169 to conduct the Secretarial Audit of your Company for the financial year 2016-17. The Secretarial Audit Report is annexed herewith as âAnnexure -Bâ to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
EXTRACT OF ANNUAL RETURN
The details forming part of the extracts of the Annual Return in Form MGT - 9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 are set out herewith as âAnnexure-Câ to this Report.
RELATED PARTY TRANSACTIONS
During the financial year 2016-17, the Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, which were in the ordinary course of business and on armsâ length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued thereunder and Regulation 23 of the Listing Regulations. During the year, the Company has also entered into transactions with related parties which were at armsâ length basis but not in ordinary course of business as per details given hereunder:
(In Rs.)
Sr. No. |
Names of the Related Party & nature of relationship |
Nature of transactions |
Written down value/ Cost of acquisition |
Amount of consideration |
1 |
HTL Limited (Subsidiary under Section 2(87) of the Companies Act, 2013) |
Sale of Old Plant & Machineries |
2,03,20,624 |
4,65,42,709 |
2 |
-do- |
Purchase of Old Plant & Machineries |
16,030 |
5,00,000 |
3 |
-do- |
High Sea Sale of Plant & Machineries |
51,98,400 |
54,58,320 |
Above related party transactions were entered into after obtaining approval of Audit Committee as well as Board of Directors of the Company.
During the financial year 2016-17, there were no transactions with related parties which qualify as material transactions under the Listing Regulations.
The details of the related party transactions as required under Ind AS- 24 are set out in Note - 51 to the standalone financial statements forming part of this Annual Report.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companyâs website at the link http://www.hfcl. com/wp-content/uploads/201 7/05/POLICY-ON-link-PARTY-TRANSACTIONS.pdf.
LOANS, GUARANTEES AND INVESTMENTS
The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 outstanding as at 31st March, 2017 are as follows:
(Rs. in crore)
Particulars |
Amount |
Loans given |
31.25 |
Guarantees given |
38.66 |
Investments made |
64.83 |
Loans, Guarantees and Investments made during the financial year 2016-17
(Rs. in crore)
Name of the entity |
Relation |
Amount |
Particulars of Loans, Guarantees and Investments |
Purpose for which the Loans, Guarantees and Investments are proposed to be utilized |
HTL Limited |
Subsidiary under Section 2(87) of the Companies Act, 2013 |
13.50 |
Loan |
Short term loan given for working capital requirements. |
Polixel Security Systems Private Limited |
Wholly owned subsidiary under Section 2(87) of the Companies Act, 2013 |
11.75 |
Investment |
Investment was made for the benefit of operational synergies. The Company will be able to explore untapped high growth in electronics surveillance & electronic security business and monitoring system etc. |
Owens-Corning (India) Private Limited |
Supplier |
3.00 |
Guarantee |
Corporate Guarantee given to M/s Owens-Corning (India) Private Limited on behalf of HTL Limited, a subsidiary of the Company, for the supply of glass roving for manufacturing FRP Rods. |
E.I. Dupont India Private Limited |
Supplier |
3.00 |
Guarantee |
Corporate Guarantee given to M/s E.I. Dupont India Private Limited on behalf of HTL Limited, a subsidiary of the Company, for the supply of Products. |
PS Group Realty Limited |
Un-related entity |
5.00 |
Loan |
To earn interest on surplus funds |
Moneta Finance Private Limited |
Wholly owned subsidiary under Section 2(87) of the Companies Act, 2013 |
1.98 |
Investment |
Financial assistance to wholly owned subsidiary to carry on its business. |
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the financial year 2016-17 are set out in âAnnexure-Dâ of this Report in the format prescribed under the Companies (Corporate Social Responsibility) Rules, 2014. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which forms part of this Report. The CSR Policy is available on the website of the Company and may be accessed at the URL http://www.hfcl.com/wp-content/uploads/2016/01/CSR-Policy.pdf.
The Company is undertaking CSR activities through its Registered Society i.e. HFCL Social Services Society (âHSSSâ) established in the year 1996.
BUSINESS RESPONSIBILITY REPORT
The Regulation 34(2) (f) of the Listing Regulations mandate the inclusion of Business Responsibility Report as part of Annual Report for the top 500 listed entities based on the market capitalization. Your Companyâs name appear in the top 500 listed companies based on market capitalization as on 31st March, 2016. In compliance with the Listing Regulations, we have integrated maiden Business Responsibility Report disclosures into our Annual Report. The Business Responsibility Report has been marked as âAnnexure Eâ.
VIGIL MECHANISM
The Board of Directors of the Company have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177(10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations. The Company, through this policy envisages to encourage the Directors and Employees of the Company to report to the appropriate authorities any unethical behaviour, improper, illegal or questionable acts, deeds, actual or suspected frauds or violation of the Companyâs Code of Conduct for Directors and Senior Management Personnel. The Policy on Vigil Mechanism/ Whistle blower policy may be accessed on the Companyâs website at the link http://www.hfcl.com/wp-content/uploads/2017/05/Whistle-Blower-Policy.pdf.
DEPOSITORY SYSTEMS
The Companyâs scrip has come under compulsory dematerialization w.e.f. 29th November, 1999 for Institutional Investors and w.e.f. 17th January, 2000 for all Investors. So far, 99.96% of the equity shares have been dematerialized. The ISIN allotted to the equity shares of the Company is INE548A01028.
CORPORATE GOVERNANCE
In Compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance along with certificate from the Auditors on its compliance, forms an integral part of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is set out herewith as âAnnexure-Fâ to this Report.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future.
GENERAL
a) Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise;
b) The Company did not have any Stock Option Scheme till 31st March, 2017;
c) Neither the Managing Director nor the Whole-time Director of the Company receives any remuneration or commission from any of its subsidiaries;
d) No fraud has been reported by the Auditors to the Audit Committee or the Board of the Directors of the Company; and
e) Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
CAUTIONARY STATEMENT
Statement in the Management Discussions & Analysis describing the Companyâs projections, estimates, expectations or predictions may be âforward looking statementsâ within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the Companyâs operations include demand supply conditions, raw material prices, changes in government regulations, tax regimes and economic developments within the country and abroad and such other factors.
ACKNOWLEDGEMENTS
The Directors thank the Central Government, Govt. of Himachal Pradesh, Govt. of Goa, Govt. of Telangana, IDBI Bank Limited, State Bank of India, Oriental Bank of Commerce, Punjab National Bank, Bank of Baroda, Union Bank of India, United Bank of India and other Banks for all co-operations, facilities and encouragement they have extended to the Company. Your Directors acknowledge the continued trust and confidence you have reposed in the Company. The Directors also place on record their appreciation for the services rendered by the officers, staff & workers of the Company at all levels and for their dedication and loyalty.
For and on behalf of the Board
M P Shukla
Place: New Delhi Chairman
Date: 10th August, 2017 DIN: 00052977
Mar 31, 2016
To the Members,
The Directors have pleasure in presenting the 42nd Annual Report of the Company together with Audited Accounts for the year ended 31st March, 2016.
The Financial results of the year under review are as given below:-FINANCIAL RESULTS
(Rs. In Crores
2015-2016 |
2014-2015 |
|
Profit from Operations (EBITDA) |
406.86 |
321.43 |
Less / (Add) Exceptional items |
1.58 |
2.98 |
Less: Finance Cost |
35.69 |
28.54 |
Profit Before Depreciation and Tax |
369.59 |
289.91 |
Less: Depreciation |
59.25 |
57.69 |
Profit before Tax |
310.34 |
232.22 |
Less: Income Tax for the year |
90.98 |
70.37 |
Less Deferred Taxation (Provision) |
13.58 |
8.39 |
Profit After Tax |
205.78 |
153.46 |
Add: Balance brought forward |
643.06 |
519.66 |
Balance available for appropriation |
848.84 |
673.12 |
APPROPRIATIONS |
||
Dividend on Equity shares |
4.38 |
4.2 |
Tax on Dividend |
0.89 |
0.86 |
Transfer to General Reserve |
- |
25 |
Balance carried forward |
843.57 |
643.06 |
PERFORMANCE HIGHLIGHTS
During the year under review, the Total Turnover/sales of the Company was Rs. 2641.04 crore as against Rs. 2753.99 crore during the previous financial year.
The operating profit (EBITDA) before exceptional item was Rs. 406.86 crore as against Rs. 321.43 crore last year growing at 26.58 %.
The Company is taking various measures to retain increase its market share and also to improve margins.
Further during the year under review consolidated financial Turnover/sales was Rs. 7220.66 crore and Net Profit after Tax was Rs. 371.13 crore.
Earning Per Equity share (Consolidated) was Rs. 84.76 Per Equity share against the Rs. 39.34 of Previous year.
DIVIDEND
Your Directors are pleased to recommend a dividend of Re.1/- per equity share (10%) (Previous year Re.1/ per equity share) for the Financial Year 2015-16 for approval of the Members.
The total dividend would absorb a sum of Rs.4.38 crore and tax thereon of Rs. 0.89 crore.
DEMERGER OF MANUFACTURING UNIT OF JINDAL PHOTO LTD. INTO JINDAL POLY FILMS LTD.
Board of Directors of your Company had, at its meeting held on January 12, 2015 approved a scheme of Arrangement (''the scheme'') between Jindal Photo Limited (âDemerged Companyâ) and Jindal Poly Films Limited (âResulting Companyâ) for demerger of the manufacturing division of the demerged Company, which is engaged in the business of manufacture, production, sale and distribution of photographic products (âDemerged Undertakingâ), into the Resulting Company.
suBSEquently, the scheme was filed by both Companies with stock exchanges, NSE and BSE who had given in principle approval vide letter dated 12th March, 2015 and 11th March, 2015 respectively.
Thereafter Petition was filed with Hon''ble High Courts, Allahabad and Mumbai. The Hon''ble Allahabad High court in its hearing held on 12th October, 2015 had approved the scheme.
Further, Hon''ble High Court Mumbai in its hearing held on 26th Feb, 2016 had approved the scheme.
As per the sanctioned scheme, the scheme is effective from the appointed date i.e 1st April, 2014.
Now, the manufacturing division of Jindal Photo Ltd. is a part of Jindal Poly Films Ltd and doing manufacturing business as âJINDAL PHOTO (A Divn. of Jindal Poly Films Ltd.)â.
As per conditions of sanctioned scheme, as a Consideration, Jindal Poly Films Ltd. has issued and allotted 10 equity shares of Jindal Poly Films Ltd for every 59 equity shares of Jindal Photo Ltd. held by Jindal Photo shareholders on record date. (13th May, 2016.) and total No. of allotted Equity shares were 17,38,700.â
Further these shares have been listed on NSE and BSE in July, 2016.
MANAGEMENT DISCUSSION AND ANALYSIS
The MD&A has been included in the Annual Report as a separate section.
DIRECTORS
1. During the year following Directors have resigned
A. Mr. Hemant sharma (DIN 05235723) Non-Executive Director, w.e.f 21st August,2015.
B. Ms. sumita Dhingra, Whole Time Director (DIN 06929317), w.e.f 14th October, 2015.
C. Mr. Anil Kumar Goel (DIN 07195300), Non-Executive Independent Director, w.e.f 7th November,2015.
D. Mr. sanjay Mittal (DIN: 01327274), Whole-time Director w.e.f. 31st May, 2016.
All Directors resigned from Directorship due to their preoccupation and the Board wish to place on record its appreciation of the valuable service rendered by these Directors during their tenure as Directors of your Company.
2. During the year following Directors have been appointed:
A. Mr. Amit Jain (DIN: 00028335), Non-Executive Independent Director w.e.f 29th sept, 2015.
B. Mr. P Uma shankar (00130363), Non-Executive Director w.e.f 7th November, 2015.
C. Ms. shakshi Gupta (07388012), Non-Executive Director, w.e.f 12th January, 2016.
D. Mr. sanjay Digambar Kapote as Whole Time Director w.e.f. 01st June, 2016.
Except Mr. Amit Jain, the term and conditions of appointment of all three directors as mentioned above are subject to approval of members.
Brief resumes of the directors, names of other company (ies) in which they hold directorship, membership of committees of the Board and their shareholdings are given in the Notice to the shareholders.
3. Mr. suresh Dattatraya Gosavi (DIN: 07015202), Whole-time Director, is liable to retire by rotation and being eligible, offer himself for re-appointment.
PARTICULAR OF EMPLOYEES
The information required pursuant to section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company will be provided upon request. In terms of section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Member interested in obtaining a copy thereof, may write to the Company secretary in this regard.
Disclosures pertaining to remuneration and other details as required under section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided as per Annexure âE''.
PERSONNEL
Personnel relations with all employees remained cordial and harmonious throughout the year. Your Directors wish to place on record their sincere appreciations for the continued, sincere and devoted services rendered by all the employees of the Company.
CORPORATE GOVERNANCE
The Company has complied with the mandatory provisions of Corporate Governance as prescribed in the Listing Agreement with the stock Exchanges. A separate report on Corporate Governance is included as a part of the Annual Report along with the Auditor''s Report on its compliance.
RELATIONSHIP BETWEEN DIRECTORS INTER-SE
None of the Directors are related to each other within the meaning of the term ârelativeâ as per section 2(77) of the Companies Act, 2013.
DIRECTORS'' RESPONSIBILITY STATEMENT
On the basis of compliance certificates received from the Executives of the Company, subject to disclosures in the Annual Accounts and also on the basis of the discussion with the statutory Auditors/Internal Auditors of the Company from time to time, your Directors make the following statements in terms of section 134(3)(c) of the Companies Act, 2013:
a) in the preparation of the Annual Accounts for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under schedule III to the Act, have been followed and there are no material departures from the same;
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 as at March 31, 2016 and of the profit of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the 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 are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
The Company''s Internal Auditors have conducted periodic audit to provide reasonable assurance that the Company''s established policies and procedures have been followed.
The Audit Committee constituted by the Board reviewed the internal controls and financial reporting issues with Internal Auditors and statutory Auditors.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
A. Jindal Film India Ltd.(Previously known as Jindal Metal & Mining Ltd.), Global Nonwovens Ltd. and M/s JPF Netherland B.V, Jindal Imaging Limited and Jindal Photo Imaging Limited (Pursuant to scheme of Arrangement) are subsidiary Companies u/s 2(87) of the Companies Act, 2013.
B. JPF Dutch BV, JPF UsA Holding LLC, Jindal Films Americas LLC, Jindal Films Europe Brindisi srl, Jindal Films Europe Kerkrade BV, Jindal Films Europe s.a.r.l, Jindal Films singapore Pte. Ltd., Jindal Films shanghai Co. Limited, Jindal Films Europe Virton s.p.r.l, are stepdown subsidiaries of the Company .
C. Hindustan Powergen Ltd. and Rexor âsAsâ are Associate Companies, however the company has transferred its all shareholding of Rexor sAs to JPF Netherland B.V on 18th July, 2016.
D. Jindal Films Europe services was incorporated as 100% step down subsidiary of JPF Dutch BV. Incorporated in Luxembourg on 7th April, 2016.
E. i) Films shawnee LLC merged with Jindal Films Americas LLC w.e.f. 30.04.2015.
ii) Films Lagrange LLC merged with Jindal Films Americas LLC w.e.f. 30.04.2015
iii) Films Macedon LLC 100% Membership rights have been transferred from Jindal Films Americas LLC to JPF UsA holding LLC w.e.f. 15th June, 2015.
iv) 100% membership rights of Jindal Films Europe Virton LLC has been transferred from Jindal Films Americas LLC to JPF UsA Holding LLC 28th March, 2016.
v) Jindal Films Europe services was Incorporated in Luxembourg on 7th April, 2016 as 100% step down subsidiary of JPF Dutch BV.
In accordance with the General Circular issued by the Ministry of Corporate Affairs, Government of India, the Balance sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance sheet of the
Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company, who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company. The Consolidated Financial statement presented by the Company include the financial results of its subsidiary Companies & Associate Companies. Financial position of the each of the subsidiaries is provided in a separate statement attached to the Financial statement pursuant to first proviso to section 129(3) of the Companies Act, 2013.
SHARE CAPITAL
The paid-up equity share capital as on 31st March, 2016 was Rs.43.78 Crore (please refer note no 30 of standalone Financial statement). During the year under review, the Company has neither issued shares with Differential Voting Rights nor granted stock Options nor sweat Equity. As on 31st March, 2016 none of the Directors of the Company held shares or convertible instruments of the Company.
FIXED DEPOSITS
The Company has not accepted any deposit during financial year ended on 31st March, 2016. Further No renewal of deposits were made during the financial year 2015-2016, so there was no unclaimed deposits as at 31st March, 2016.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability, accuracy, fairness and timeliness of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company has adequate internal control system and procedures, to ensure optimal use of Company''s resources.
The Company has appointed Internal Auditors and they do regular audit of various operational and financial matters to derive findings as a comparison for targets achieved and observations for further action to be taken.
The audit committee of the board of directors periodically reviews and discusses the audit observations.
STATUTORY AUDITORS
M/s Kanodia sanyal & Associates, Chartered Accountants (FRN 008396N) retire and being eligible, offer themselves for reappointment. The auditors have furnished certificate regarding their eligibility for re-appointment as Company''s Auditors, pursuant to section 139 of the Companies Act, 2013
COST AUDITORS
The Board of Directors of your Company has reappointed M/s. R.J. Goel & Company, Cost Accountants (FRN 000026) New Delhi as Cost Auditors of the Company for the financial year 2016-2017.
INTERNAL AUDITORS.
Pursuant to the provisions of section 138 of the Companies Act, 2013, the Board has appointed M/s. B.K. shroff & Co., Chartered Accountants (FRN 302166F) as Internal Auditors for conducting the Internal Audit of the Company for the financial year 2016-17.
SECRETARIAL AUDITORS
The Board have re-appointed M/s DMK Associates, Practicing Company secretaries, New Delhi, Practicing Company secretaries, Delhi as secretarial Auditor pursuant to the provisions of section 204 of the Companies Act, 2013. The Report of the secretarial Auditor is annexed to the Report as per Annexure âA''.
ENERGY CONSE RVATION, TECHNOLOGY ABSORPTION, FOREIGN EARNING & OUTGO
Information in accordance with the provisions of section 134 (5) of Companies Act, 2013 (erstwhile section 217 (2AA) of the Companies Act, 1956) regarding conse rvation of Energy, technology absorption, foreign exchange earnings and outgo is given in the ''Annexure "B" forming part of this report.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with the requirements of section 135 of Companies Act, 2013, your Company has a Corporate social Responsibility (CSR) Committee, which comprises
Mr. R.K Pandey, Chairman, Mr. P. Uma shankar, Member and Mr. sanjay Digambar Kapote, Member.
Your Company has also formulated a Corporate social Responsibility Policy (CSR Policy) which is available on the website of the Company âhttp://www.jindalpoly.com/financial/Final%20CSR%20policy.pdfâ
Annual report on CSR activities as required under the Companies (Corporate social Responsibility Policy) Rules, 2014 has been appended as Annexure -âCâ and forms integral part of this Report.
DISCLOSURE UNDER COMPANIES ACT, 2013 I. EXTRACTS OF ANNUAL RETURN
The details forming Part of the Extracts of Annual Return is annexed as per Annexure âD''.
(II) MEETINGS
During the year, 15 (fifteen) Board Meetings and 08 (Eight) Audit Committee Meetings were held as per details given in Corporate governance Report.
(III) Composition of Audit Committee
The Board has constituted an Audit Committee, which comprises of Mr. Radha Krishna Pandey as the Chairman and Mr. P Umashankar, Mr. Amit Jain and Mr. sunil Kumar Agarwal as the Members. More details about the Committee are given in the Corporate governance Report.
(IV) Related Parties Related Party Transactions
All contracts / arrangements / transactions entered into by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year under review, your Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The Related Party Transactions Policy as approved by the Board is uploaded on the Company''s website http://www.jindalpoly.com/financial/Related Party Transaction.pdf. The details of the transactions with Related Parties are provided in the accompanying financial statements.
Details of related party transactions are given elsewhere in the Annual Report as per Accounting standard As-18.
Your Directors draw attention of the members to Note (A & B) to the financial statement which sets out related party disclosures.
(V) Particulars of Loans, Guarantees and Investments
During the year under review the company has made Loan, guarantee and Investments, details of these as covered under the provisions of section 186 of the Companies Act, 2013 are given in the Note no. 31.09 in accompanying Financial statements.
(VI) Risk Management.
The Company has laid down procedures to inform Board members about the risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that executive management controls risk through means of a properly defined framework.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant, material orders passed by the Regulators or Courts, which would impact the going concern status of the Company and its future operations.
NOMINATION AND REMUNERATION COMMITTEE AND POLICY Terms of reference of Nomination and Remuneration Committee
- Formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.
- Identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal.
- Removal should be strictly in terms of the applicable law/s and in compliance of principles of natural justice.
- Formulation of criteria for evaluation of Independent Directors and the Board.
- Devising a policy on the Board diversity.
- Recommend to the Board, remuneration including salary, perquisite and commission to be paid to the Company''s Executive Directors on an annual basis or as may be permissible by laws applicable.
- Recommend to the Board, the Sitting Fees payable for attending the meetings of the Board/Committee thereof, and, any other benefits such as Commission, if any, payable to the Non- Executive Directors.
- Setting the overall Remuneration Policy and other terms of employment of Directors, wherever required.
As per the requirements of the above provisions of the Companies Act, 2013, a Nomination and Remuneration Committee of directors was formed by the Board of Directors consisting of:
1 Mr. R.K Pandey, Chairman (Non-Executive - Independent)
2 Mr. Amit Jain -Member (Non-Executive - Independent)
3 Mr. sunil Kumar Agarwal - Member, (Non-Executive)
4 Ms. shakshi Gupta- Member, (Non-Executive)
The said committee has been empowered and authorized to exercise the power as entrusted under the provisions of section 178 of the Companies Act, 2013. The Company has a policy on directors'' appointment and remuneration including criteria for determining qualification, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178. The Nomination and Remuneration Policy has been placed on Company''s website www.jindalpoly.com (investor relation), and other required information is annexed to the Board''s Report as Annexure E.
INTERNAL POLICY ON REMUNERATION
The company has Internal Remuneration Policy for Directors, Key Management Personnel and senior Management Personnel. The policy takes into account several factors like age, qualification, years of experience in the industry/ functional area and business management, present emoluments and other qualitative factors such as leadership qualities, communication skills, and performance track record.
The aim is to ensure that the company attracts and retains competent people.
DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed/continue as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.
VIGIL MECHANISM AND WHISTLE BLOWER POLICY
The Company has devised a vigil mechanism in the form of a Whistle Blower Policy in pursuance of provisions of section 177(10) of the Companies Act, 2013 and details whereof is available on the Company''s website at http://www.jindalpoly.com/financial/ Vegil_Mechanism.pdf. During the year under review, there was no complaint received under this mechanism.
EVALUATION OF BOARD''S PERFORMANCE
On the advice of the Board of Directors, the Nomination and Remuneration Committee has formulated the criteria for the evaluation of the performance of Independent Directors, Non-Independent Directors and the Chairman of the Board. The Independent Directors of the Company have also convened a separate meeting for this purpose. All the results and evaluation have been communicated to the Chairman of the Board of Directors.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has constituted an internal Complaints Committee at organization level to deal the issues relating to any complaint regarding sexual Harassment of Women at Workplace and During the year 2015- 16, no complaint was received by the committee. However As per provisions of the sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressed) Act, 2013, the Company has constituted formal Committee.
MATERIAL CHANGES
The subsidiary company Global Nonwovens Ltd. has become wholly owned subsidiary Company in August 2016.
Matters as may be prescribed
As per Rule 8(5) of the Companies (Accounts) Rule, 2014, the following additional information are provided:
Sr. No. |
Particulars |
|
1 |
The financial summary or highlights |
The financial highlights including state of Affairs of the Company, Dividend & Reserve have been provided in point above of this report. |
2 |
(ii) The change in the nature of business, if any. |
There is no change in the business line of the Company except scheme of arrangement among Jindal Photo Ltd, Jindal Poly Films Ltd and their respective Creditors has been approved by the Courts and now Photo division is part of Jindal Poly Films Ltd. |
3 |
The details of directors or key managerial personnel who were appointed or have resigned during the year |
During the year 1. Mr. Hemant sharma - Non Executive Director (DIN 05235723) has resigned w.e.f 21st August, 2015. 2. Ms. sumita Dhingra - Whole Time Director (DIN 06929317) has resigned from Directorship w.e.f. 14th October, 2015. 3. Mr. Anil Kumar Goel, Independent Director (DIN 07195300) has resigned w.e.f 07th November, 2015 4. Mr sanjay Mittal, Whole Time Director (DIN - 01327274) has resigned w.e.f. 31st May 2016 5. Mr. Amit Jain (DIN - 00028335) has been appointed as an Independent Director w.e.f. 29th september, 2015 6. Mr. P Uma shankar (DIN - 00130363) has been appointed as a Non-Executive Director w.e.f. 07th November,2015 7. Ms. shakshi Gupta (DIN - 07388012) has been appointed as Non-Executive Director w.e.f. 12th January, 2016 8. Mr. sanjay Digamber Kapote (DIN: 07529860) has been appointed as Whole-time Director w.e.f 1st June,2016. |
4 |
The names of companies which have become or ceased to be subsidiaries, joint ventures or associate companies during the year |
i) Films shawnee LLC, merged with Jindal Films Americas LLC w.e.f. 30.04.2015. ii) Films Lagrange LLC, merged with Jindal Films Americas LLC w.e.f. 30.04.2015 iii) Films Macedon LLC, 100% Membership rights have been transferred from Jindal Films Americas LLC to JPF UsA holding LLC w.e.f. 15th June, 2015. iv) 100% membership rights of Jindal Films Europe Virton LLC have been transferred from Jindal Films Americas LLC to JPF UsA Holding LLC 28th March, 2016. v) Jindal Films Europe services was Incorporated in Luxembourg on 7th April, 2016 as 100% step down subsidiary of JPF Dutch BV. |
5 |
The details relating to deposits, covered under Chapter V of the Act |
The Company has not accepted deposits |
6 |
The details of deposits which are not in compliance with the requirements of Chapter V of the Act |
Not Applicable |
7 |
The details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companyâs operations in future |
NIL |
8 |
The details in respect of adequacy of internal controls with reference to the Financial |
Procedures are set so as to detect and prevent frauds and to protect the organizationâs resources, both physical (e.g., machinery and property) and Intangible (e.g., Intellectual property such as trademarks). The financial statements are prepared in accordance with the accounting standards issued by the ICAI |
ACKNOWLEDGEMENT
Your Directors would like to express their gratitude to financial institutions, Banks and various state and Central Government authorities for the co-operation extended to the Company. Directors also take this opportunity to thank the shareholders, customers, suppliers and distributors for the confidence reposed by them in the Company. The employees of the Company contributed significantly in achieving the results. Your Directors take this opportunity to thank them and hope that they will maintain their commitment to excellence in the years to come.
For and on behalf of Board of Directors
Sd/- Sd/-
Date : 23rd August, 2016 Whole-time Director Whole-time Director
Place : Delhi. Suresh Dattatraya Gosavi Sanjay Digamber Kapote
Mar 31, 2014
To the Members,
The Directors have pleasure in presenting the Annual Report and Audited
Accounts for the financial year ended 31st March, 2014.
FINANCIAL RESULTS
(Rs. in crore)
Particulars 2013-2014 2012-2013
Gross Sales and Services 2057.27 617.31
Other Income 13.69 25.93
Profit/(Loss) before depreciation, 200.50 98.70
finance charges and taxation
Less: Depreciation & Amortisation 19.85 16.68
Finance charges 33.14 27.18
Profit/(Loss) before taxes 147.51 54.84
Provision for taxation 32.45 10.59
MAT credit entitlement (32.42) (10.55)
Profit/(Loss) for the year 147.48 54.80
Balance brought forward from 106.44 51.64
previous years
Proposed dividend on Preference 16.99 -
Shares
Tax on proposed dividend 2.89 -
Balance carried to Balance Sheet 234.04 106.44
DIVIDEND
The Board of Directors has recommended a dividend of Rs.6.507- p.a. on
each Cumulative Redeemable Preference Shares of Rs.100/- each for the
period from 1st January, 2011 to 31st March, 2014 i.e. financial year
2010-11 to 2013-14 amounting to Rs.19.88 crore (inclusive of tax of Rs.2.89
crore). The dividend for financial year 2010-11 would be proportionate
which is Rs.1.60 per preference share. The dividend payout is subject to
the approval of members at the ensuing Annual General Meeting.
The dividend will be paid to those Preference Shareholders whose names
appear in the Register of Preference Shareholders as on 15th September,
2014 within 30 days from the date of declaration.
MANAGEMENT DISCUSSIONS & ANALYSIS (MDA)
Management Discussions and Analysis (MDA) Report for the year under
review as stipulated under Clause 49 of the Listing Agreement with the
Stock Exchanges in India, is presented in a separate section forming
part of the Annual Report.
SUBSIDIARIES
M/s HTL Limited and M/s Moneta Finance Private Limited, continue to be
the subsidiaries of your Company.
The Ministry of Corporate Affairs (MCA) vide its General Circular No.
2/2011 dated 8th February, 2011 has granted general exemption to all
companies from attaching the annual accounts of the subsidiaries with
the Annual Report of holding company, subject to compliance of
conditions specified therein. As required under the said Circular, the
Board of Directors of the Company at its meeting held on 14th August,
2014 has given its consent for not attaching the annual accounts of
above subsidiary companies to the annual accounts of the Company.
Accordingly, annual accounts of the subsidiary companies are not
annexed to the annual accounts of the Company. The Central Government
has however, prescribed specified information on the subsidiary
companies, to be disclosed
as part of its consolidated financial statements. Such information is
appearing at page no. 99 of this Annual Report. The Company has annexed
audited consolidated financial statements of the Company and all its
subsidiaries in the Annual Report.
Any shareholder desirous of obtaining the Annual Accounts and related
information of the above subsidiary companies may write to the Company
Secretary at M/s Himachal Futuristic Communications Ltd. 8, Commercial
Complex, Masjid Moth, Greater Kailash - II, New Delhi - 110048 and the
same shall be sent by post.
The annual accounts of the above subsidiary companies and the related
information shall be made available to the Shareholders of the Company
as well as to the Shareholders of the subsidiary companies seeking such
information at any point of time. The annual accounts of the above
subsidiary companies shall also be kept open for inspection for any
member of the Company at the Registered office and Corporate office of
the Company as well as at the Registered office of the concerned
subsidiary companies.
CAUTIONARY STATEMENT
Statement in the Management Discussions and Analysis describing the
Company''s projections, estimates, expectations or predictions may be
''forward looking statements'' within the meaning of applicable
securities laws and regulations. Actual results could differ materially
from those expressed or implied. Important factors that would make a
difference to the Company''s operations include demand-supply
conditions, raw material prices, changes in government regulations, tax
regimes and economic developments within the country and abroad and
such other factors.
FIXED DEPOSITS
The Company has not accepted any deposits during the year.
DIRECTORS
Dr. R M Kastia, Director retires by rotation at this Annual General
Meeting and being eligible offers himself for re-appointment.
Shri Mahendra Pratap Shukla is Independent Directorof the Company and
has held the position as such for more than five years. It is proposed
to appoint Shri Mahendra Pratap Shukla as an Independent Director under
Section 149 of the Companies Act, 2013 and Clause 49 of the Listing
Agreement to hold office for two consecutive years for a term up to the
conclusion of the 29th Annual General Meeting of the Company in the
calendar year 2016. The Company has received requisite notice in
writing from a member proposing Shri Mahendra Pratap Shukla for
appointment as Independent Director.
The Company has received declaration from Shri Mahendra Pratap Shukla
confirming that he meets with the criteria of independence as
prescribed both under sub-section (6) of Section 149 of the Companies
Act, 2013 and under Clause 49 of the Listing Agreement with the Stock
Exchanges.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors'' Responsibility Statement, it is
hereby confirmed:
1. That in the preparation of the accounts for the financial year ended
31st March, 2014, the applicable accounting standards have been
followed along with proper explanations relating to material
departures;
2. That the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that were
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 the year under review;
3. That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
4. That the Directors have prepared the accounts for the financial
year ended 31st March, 2014 on a ''going concern'' basis.
AUDITORS AND AUDITORS'' REPORT
M/s Khandelwal Jain & Company, Chartered Accountants, Auditors of the
Company retire at the conclusion of the ensuing Annual General Meeting
and having confirmed their eligibility, offer themselves for
re-appointment. The Company has received necessary letter from them to
the effect that their re-appointment, if made, would be within the
prescribed limits under Section 141(3) (g) of the Companies Act, 2013
and that they are not disqualified for re-appointment. The Audit
Committee and the Board of Directors, therefore, recommended
re-appointment of M/s Khandelwal Jain & Company, Chartered Accountants
as Auditors of the Company for the financial year 2014-15 for the
approval of Shareholders.
The observations in the Auditors'' Report are self explanatory and do
not call for any further comments. The Statutory Auditors in the
Annexure to the Auditors'' Report has mentioned about a slight delay in
deposit of statutory dues in few cases. In future, management will make
all efforts to deposit the same in time.
COST AUDITORS
The Cost Audit Report from M/s SKG & Co., Cost and Management
Accountants for financial year ended 31st March, 2013 was filed with
Ministry of Corporate Affairs (MCA) on 5th September, 2013. The Board
of Directors of the Company has appointed M/s SKG & Co., Cost and
Management Accountants, 7-CAyodhya Enclave, Sector-13, Rohini, Delhi -
110085 as Cost Auditor of the Company for conducting the Cost Audit for
financial year 2013-14. The Report of the Cost Auditor will be filed
within the prescribed period.
PERSONNEL
In accordance with the provisions of Section 217(2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975 as amended is set out in the Annexure-I and forms part of this
Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS/ OUTGO
The information required under Section 217(1) (e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of the Board of DirectorsII Rules, 1988 with respect to these matters
is set out in Annexure- and forms part of this Report.
DEPOSITORY SYSTEMS
The Company''s script has come undercompulsory dematerialization w.e.f.
29th November, 1999 for Institutional Investors and w.e.f. 17th
January, 2000 for all Investors. So far 99.96% of the equity shares
have been dematerialized. The ISIN no. allotted to the equity shares of
the Company is INE548A01028.
CONSTITUTION OF CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board of Directors has constituted the Corporate Social
Responsibility Committee (CSR Committee) comprising of Shri Mahendra
Nahata as the Chairman and Shri M P Shukla and Shri S G Nadkarni as
other members. The said Committee has been entrusted with the
responsibility of formulating and recommending to the Board, a
Corporate Social Responsibility Policy (CSR Policy) indicating the CSR
activities to be undertaken by the Company. The Committee shall
recommend to the Board the amount to be spent by the Company on the CSR
activities. The Committee shall also monitor the CSR Policy of the
Company from time to time.
CANCELLATION OF THE LISTING OF THE GLOBAL DEPOSITORY RECEIPTS (GDRs)
The Company has voluntarily sought the delisting of its GDRs from
London Stock Exchange and Luxembourg Stock Exchange. The GDRs listing
have been cancelled from London Stock Exchange and Luxembourg Stock
Exchange w.e.f. 21st March, 2014 and 23rd December, 2013 respectively
consequent upon resignation by the Depository i.e. Bank of New York
("BNY Mellon"). The Company has not appointed any Successor Depository
and has terminated the Deposit Agreement due to lack of liquidity with
virtually no trading taking place and investors'' decreasing interest in
depositary receipts.
CORPORATE GOVERNANCE
A separate Report on Corporate Governance as stipulated under clause 49
of the Listing Agreement along with the Auditors'' Certificate on its
Compliance is given as a part of the Annual Report.
ACKNOWLEDGEMENTS
The Directors thank the Central Government, Govt, of Himachal Pradesh,
Govt, of Goa, IDBI Bank Limited, State Bank of India, Oriental Bank of
Commerce, Punjab National Bank, Bank of Baroda, Union Bank of India and
other Banks and Institutions for all co-operations, facilities and
encouragement they have extended to the Company. Your Directors
acknowledge the continued trust and confidence you have reposed in this
Company. The Directors also place on record their appreciation for the
services rendered by the officers, staffs & workers of the Company at
all levels and for their dedication and loyalty.
For and on behalf of the Board
Place: New Delhi M P Shukla
Date: 14th August, 2014 Chairman
Mar 31, 2013
To the Members,
The Directors have pleasure in presenting the Annual Report and Audited
Accounts for the fnancial year ended 31st March, 2013.
(Rs. in thousands)
FINANCIAL RESULTS 2012-2013 2011-2012
Sales and Services 6173131 2638282
Other Income 259298 277451
Proft/(Loss) before depreciation,
finance charges and taxation 986987 600389
Less: Depreciation & Amortisation 166765 150652
Finance charges 271816 334939
Proft/(Loss) before taxes 548406 114798
Provision for taxation 105930 7568
MAT credit entitlement (105530) (7056)
Proft/(Loss) for the year 548006 114286
Balance brought forward
from previous years 516437 402151
Balance carried to Balance Sheet 1064442 516437
DIVIDEND
The Board of Directors have decided to conserve the fnancial resources
of the Company and do not recommend any divided on equity and
preference shares for the fnancial year ended 31st March, 2013.
FIXED DEPOSITS
The Company has not accepted any deposits during the year.
DIRECTORS
Shri Y L Agarwal, Director retires by rotation at this Annual General
Meeting and being eligible, offers himself for re- appointment.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors'' Responsibility Statement, it is
hereby confrmed:
1. That in the preparation of the accounts for the fnancial year ended
31st March, 2013, the applicable accounting standards have been
followed along with proper explanations relating to material
departures;
2. That the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that were
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 fnancial year and of the
proft of the Company for the year under review;
3. That the Directors have taken proper and suffcient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
4. That the Directors have prepared the accounts for the fnancial year
ended 31st March, 2013 on a Âgoing concern'' basis.
AUDITORS
M/s Khandelwal Jain & Company, Chartered Accountants, Auditors of the
Company retire at the conclusion of the ensuing Annual General Meeting
and being eligible, offer themselves for re-appointment.
AUDITORS'' REPORT
The information and explanation on qualifcations/ observations in the
Auditors'' Report are given in
Annexure  I
COST AUDITORS
The Board of Directors of the Company with the approval of Central
Government has appointed M/s SKG & Co., Cost and Management
Accountants, 7-C Ayodhya Enclave, Sector -13, Rohini, Delhi  110085 as
Cost Auditor of the Company for conducting the Cost Audit for fnancial
year 2012-13. The due date for fling of the Cost Audit Report is 30th
September, 2013.
PERSONNEL
In accordance with the provisions of Section 217 (2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975 as amended up to the date of this Report is set out in the
Annexure-II and forms part of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS/ OUTGO
The information required under section 217(1) (e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988 with respect to these matters is
set out in Annexure-III and forms part of this Report.
DEPOSITORY SYSTEMS
The Company''s script has come under compulsory dematerialization w.e.f.
29th November, 1999 for Institutional Investors and w.e.f. 17th
January, 2000 for all Investors. So far 99.96% of the equity shares
have been dematerialized. The ISIN no. allotted to the equity shares of
the Company is INE548A01028.
CORPORATE GOVERNANCE
A separate statement on Corporate Governance along with the Auditors''
Certifcate on its Compliance is given as a part of the Annual Report.
ACKNOWLEDGEMENTS
The Directors thank the Central Government, Govt. of Himachal Pradesh,
Govt. of Goa, IDBI Bank Limited, State Bank of India, Oriental Bank of
Commerce, Punjab National Bank, Bank of Baroda, Union Bank of India and
other Banks and Institutions for all corporation, facilities and
encouragement they have extended to the Company. Your Directors
acknowledge the continued trust and confdence you have reposed in this
Company. The Directors also place on record their appreciation for the
services rendered by the offcers, staffs & workers of the Company at
all levels and for their dedication and loyalty.
For and on behalf of the Board
Place: New Delhi M P Shukla
Date: 23rd August, 2013 Chairman
Mar 31, 2012
The Directors have pleasure in presenting the Annual Report and Audited
Accounts for the financial year ended 31 March, 2012.
(Rs. in thousands)
FINANCIAL RESULTS 2011-2012 2010-2011
Sales and Services 2638282 885526
Other Income 277451 131976
Profit/(Loss) before depreciation,
finance charges and taxation 600389 768148
Less: Depreciation & Amortisation 150652 112246
Finance charges 334939 253539
Profit/(Loss) before taxes 114798 402363
Provision for taxation 7568 212
MAT credit entitlement (7056) _
Profit/(Loss) for the year 114286 402151
Balance brought forward from previous years 402151 -
Balance carried to Balance Sheet 516437 402151
DIVIDEND
The Board of Directors have decided to conserve the financial resources
of the Company and do not recommend any divided on equity and
preference shares for the financial year ended 31st March, 2012.
FIXED DEPOSITS
The Company has not accepted any deposits during the year.
DIRECTORS
Shri Arvind Kharabanda and Dr. R M Kastia, Directors retire by rotation
at this Annual General Meeting and being eligible, offer themselves for
re-appointment. During the year under review, the IDBI Bank Limited
vide its letter no. SS.CB/53/56/Nom.8 dated 14th February, 2012 has
withdrawn the nomination of Shri R K Bansal from the Board of the
Company and in his place appointed Shri S G Nadkarni as its Nominee
Director w.e.f. 28th February, 2012.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors' Responsibility Statement, it is
hereby confirmed:
1. That in the preparation of the accounts for the financial year
ended 31st March, 2012, the applicable accounting standards have been
followed along with proper explanations relating to material
departures;
2. That the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that were
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 the year under review;
3. That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
4. That the Directors have prepared the accounts for the financial
year ended 31st March, 2012 on a 'going concern' basis.
AUDITORS
M/s Khandelwal Jain & Company, Chartered Accountants, Auditors of the
Company retire at the conclusion of the ensuing Annual General Meeting
and being eligible, offer themselves for re-appointment.
AUDITORS' REPORT
The information and explanation on qualifications/observations in the
Auditors' Report are given in Annexure - I
PERSONNEL
In accordance with the provisions of Section 217 (2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975 as amended up to the date of this Report is set out in the
Annexure-II and forms part of this report.
CONSERvATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS/ OUTGO
The information required under section 217(1) (e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988 with respect to these matters is
set out in Annexure-III and forms part of this Report.
DEPOSITORY SYSTEMS
The Company's script has come under compulsory dematerialization
w.e.f. 29th November, 1999 for Institutional Investors and w.e.f. 17th
January, 2000 for all Investors. So far 99.92% of the equity shares
have been dematerialized. The ISIN no. allotted to the equity shares of
the Company is INE548A01028.
CORPORATE GOvERNANCE
A separate statement on Corporate Governance along with the Auditors'
Certificate on its Compliance is given as a part of the Annual Report.
ACKNOWLEDGEMENTS
The Directors thank the Central Government, Govt. of Himachal Pradesh,
Govt. of Goa, IDBI Bank Limited, Unit Trust of India, State Bank of
India, Oriental Bank of Commercial, Punjab National Bank, Bank of
Baroda, Union Bank of India and other Banks and Institutions for all
corporation, facilities and encouragement they have extended to the
Company. Your Directors acknowledge the continued trust and confidence
you have reposed in this Company. The Directors also place on record
their appreciation for the services rendered by the officers, staffs &
workers of the Company at all levels and for their dedication and
loyalty.
For and on behalf of the Board
Place: New Delhi M P Shukla
Date: 20th August, 2012 Chairman
Mar 31, 2011
To the Members,
The Directors have pleasure in presenting the Annual Report and Audited
Accounts for the financial year for six months ended 31st March, 2011.
(Rs. in thousands)
FINANCIAL RESULTS 2010-2011 2009-2010
Sales and Services 885526 3205469
Other Income 2410423 816593
Profit/(Loss) before depreciation,
finance charges and taxation 768782 (3925892)
Less: Depreciation & Amortisation 112246 390328
Finance charges 253539 814823
Profit/(Loss) before taxes 402997 (5131043)
Provision for taxation 212 455
Income tax for earlier years - 1143
Prior period adjustments 634 (6688)
Profit/(Loss) for the year 402151 (5125953)
Balance brought forward from
previous years - (14899023)
Accumulated losses transferred
to the Business Reconstruction Account - 20024976
Balance carried to Balance Sheet 402151 -
DIVIDEND
The Board of Directors do not recommend any divided on equity and
preference shares for the financial year ended 31st March, 2011 as the
Company has not earned Profit from the operational activities.
FIXED DEPOSITS
The Company has not accepted any deposits during the year.
DIRECTORS
Shri M P Shukla, Director retire by rotation at this Annual General
Meeting and being eligible, offers himself for re-appointment.
DIRECTORSÃ RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217(2AA) of the Companies
Act, 1956 with respect to Directorsà Responsibility Statement, it is
hereby confirmed:
1. That in the preparation of the accounts for the financial year ended
31st March, 2011, the applicable accounting standards have been
followed along with proper explanations relating to material
departures;
2. That the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that were
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 the year under REVIEW;
3. That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
4. That the Directors have prepared the accounts for the financial year
ended 31st March, 2011 on a Ãgoing concernà basis.
AUDITORS
M/s Khandelwal Jain & Company, Chartered Accountants, Auditors of the
Company retire at the conclusion of the ensuing Annual General Meeting
and being eligible, offer themselves for re-appointment.
AUDITORSÃ REPORT
The information and explanation on qualifications/observations in the
Auditorsà Report are given in Annexure à I
PERSONNEL
In accordance with the provisions of Section 217 (2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975 as amended up to the date of this Report is set out in the
Annexure-II and forms part of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS/ OUTGO
The information required under section 217(1) (e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988 with respect to these matters is
set out in Annexure-III and forms part of this Report.
DEPOSITORY SYSTEMS
The CompanyÃs script has come under compulsory dematerialization w.e.f.
29th November, 1999 for Institutional Investors and w.e.f. 17th
January, 2000 for all Investors. So far 99.90% of the equity shares
have been dematerialized. The ISIN no. allotted to the equity shares
of the Company is INE548A01028.
CORPORATE GOVERNANCE
A separate statement on Corporate GOVERNANCE along with the AuditorsÃ
Certificate on its Compliance is given as a part of the Annual Report.
ACKNOWLEDGEMENTS
The Directors thank the Central Government, Govt. of Himachal Pradesh,
Govt. of Goa, Industrial DEVELOPMENT Bank of India, Unit Trust of
India, State Bank of India, Oriental Bank of Commercial, Punjab
National Bank, Bank of Baroda, Union Bank of India and other Banks and
Institutions for all corporation, facilities and encouragement they
have extended to the Company. Your Director acknowledge the continued
trust and confidence you have reposed in this Company. The Directors
also place on record their appreciation for the services rendered by
the officers, staffs & workers of the Company at all levels and for
their dedication and loyalty.
For and on behalf of the Board
Place : New Delhi M P Shukla
Date : 12th August, 2011 Chairman
Sep 30, 2010
The Directors have pleasure in presenting the Annual Report and Audited
Accounts for the Financial Year for eighteen months ended 30th
September, 2010.
(Rs. in million)
FINANCIAL RESULTS 2009-2010 2008-2009
Sales and Services 3205.47 1435.25
Other Income 816.59 54.41
profit/(Loss) before depreciation,
finance charges and taxation (3925.90) (1999.78)
Less : Depreciation & Amortisation 390.33 261.46
Finance charges 814.82 909.89
profit/(Loss) before taxes (5131.04) (3171.13)
Provision for taxation 0.46 4.21
Income tax for earlier years 1.14 -
Prior period adjustments (6.69) (8.58)
profit/(Loss) for the year (5125.95) (3166.76)
Balance brought forward from
previous year (14899.02) (11732.26)
Accumulated losses transferred to the
Business Reconstruction Account 20024.97 -
Balance carried to Balance Sheet - (14899.02)
DIVIDEND
In view of the loss incurred by the Company, your Directors do not
recommend any dividend on equity and preference shares for the year
ended 30th September, 2010.
FIXED DEPOSITS
The Company has not accepted any Deposits during the year.
DIRECTORS
Shri Arvind Kharabanda and Shri Y L Agarwal, Directors retire by
rotation at this Annual General Meeting and being eligible, offer
themselves for re- appointment. During the year under review Shri Y S
Choudhary has resigned from the position of Director (Operations) and
ceased to be a Director of the Company w.e.f. 30th May, 2009. However
he is continuing with the Company as a Chief Executive officer of the
Company w.e.f. 1st June, 2009.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors Responsibility Statement, it is
hereby confi rmed:
1. That in the preparation of the accounts for the financial year
ended 30th September, 2010, the applicable accounting standards have
been followed along with proper explanations relating to material
departures;
2. That the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that were
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
loss of the Company for the year under review;
3. That the Directors have taken proper and suffi cient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act,1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
4. That the Directors have prepared the accounts for the financial
year ended 30th September, 2010 on a going concern basis.
AUDITORS
M/s. Khandelwal Jain & Company, Chartered Accountants, Auditors of the
Company retire at the conclusion of the ensuing Annual General Meeting
and being eligible, offer themselves for re-appointment.
AUDITORS REPORT
The information and explanation on qualifications/ observations in the
Auditors Report are given in Annexure - I.
PERSONNEL
In terms of provisions of Section 217(2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees) Rules, 1975, the
names and other particulars of employees are set out in the Annexure to
the Directors Report. However having regard to provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding
the aforesaid information is being sent to all the members of the
Company and other entitled thereto. Any member interested in obtaining
such particulars may write to Company Secretary, at the Corporate Offi
ce/ Registered office of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS/ OUTGO
The information required under Section 217 (1)(e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988 with respect to these matters is
set out in the Annexure-II and forms part of this Report.
DEPOSITORY SYSTEM
The Companys scrip have come under compulsory dematerialisation w.e.f.
29th November, 1999 for Institutional Investors and w.e.f. 17th
January, 2000 for all investors. So far 99.78% of the shares have been
dematerialised. The new ISIN no. allotted to the equity shares of the
Company after the reduction of equity share capital is INE548A01028.
CORPORATE GOVERNANCE
A separate statement on Corporate Governance along with the Auditors
Certifi cate on its compliance is given as a part of the Annual Report.
VOLUNTARY DELISTING OF SECURITIES
As approved by the Shareholders at their Annual General Meeting held on
29th September, 2008, Company has filed necessary application for
delisting of its equity shares from Delhi Stock Exchange Ltd. (DSE),
The Calcutta Stock Exchange Association Ltd. (CSE), Jaipur Stock
Exchange Ltd. (JSE) & Ludhiana Stock Exchange Ltd. (LSE) and preference
shares from LSE. The Company has already obtained the delisting
approval from all the above Stock Exchanges.
ACKNOWLEDGEMENTS
The Directors thank the Central Government, Government of Himachal
Pradesh, Government of Goa, Industrial Development Bank of India, State
Bank of India, Oriental Bank of Commerce, Unit Trust of India, Punjab
National Bank, Bank of Baroda, Union Bank of India, Centurian Bank of
Punjab Ltd. (now merged with HDFC Bank Ltd.) and other Banks and
Institutions for all co-operation, facilities and encouragement they
have extended to the Company. Your Directors acknowledge the continued
trust and confi dence you have reposed in this Company. The Directors
also place on record their deep appreciation for the services rendered
by the officers, staff and workers of the Company at all levels and
for their dedication and loyalty.
For and on behalf of the Board
Place: New Delhi M P Shukla
Date: 28th February, 2011 Chairman