The Board of Directors ("The Board") is pleased to present the 98th Annual Report together with the Audited Financial Statements for the financial year ended March 31,2024.
2. Financial Highlights ( As per IND AS)
Standalone (' in crore)
| |
Year ended 31 March 2024
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31
|
Year ended March 2023
|
|
Income from Operations
|
|
5042.71
|
5222.01
|
|
Profit before Finance cost, Depreciation and Amortisation, Exceptional Items, Other Income and Tax
|
|
686.97
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712.39
|
|
Less: Finance Costs
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542.89
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|
663.97
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Depreciation and amortisation
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6777
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78.05
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Exceptional Items - gain
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168.56
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(442.10)
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223.30
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(518.72)
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Add: Other Income
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124.99
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61.22
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Profit /(Loss) before Tax
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|
369.86
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254.89
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Less: Tax Expense
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191.29
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1.47
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Profit/(Loss) after Tax
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|
178.57
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253.42
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Add: Other Comprehensive Income
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|
21.39
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0.66
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Total Comprehensive Income / (Loss) carried to Other Equity
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199.96
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254.08
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3. Dividend
In order to conserve the resources, the Board has not recommended any dividend for the financial year ended March 31,2024.
4. Transfer to Reserves
During the year under review, no amount is proposed to be transferred to the General Reserve of the Company.
5. Strategic Development
HCC has set its long-term goals by identifying areas that leverage the Company's strengths, while looking to enhance existing capabilities and strengthening its balance sheet for growth.
Business Development
EPC Projects have been the core competency of the Company in conceptualising, designing, executing, and commissioning large, complex projects in the areas of transportation, power and water & irrigation. India continues to remain the primary market for EPC Projects, and the Company is exploring opportunities where it has a strong geographical presence. The Company will tap into the strong Hydro Power pipeline in Bhutan where the Company recently delivered the Nikacchu Hydro Project. It will also explore opportunities in our neighbouring countries like Nepal, Bangladesh and in the Middle East.
The Company has strengthened its position in Maharashtra and would like to expand its capabilities further by undertaking new work in and around Mumbai. After completing several projects in Jammu & Kashmir in the hydropower sector, the Company is the lowest bidder in a project in J&K, and will target more projects in this region. The National Water Development Agency (NWDA) has been entrusted with the interlinking of rivers under the National Perspective Plan (NPP). NPP has two components: the Himalayan Rivers Development Component and the Peninsular Rivers Development Component. 30 link projects have been identified under NPP The Company is pursuing opportunities in this new sector. Besides these efforts, the Company is exploring opportunities in the nuclear power sector with strategic partnerships with leading equipment manufacturers to improve the scope of its business offerings.
We have engaged with the government on policy formation and have helped strengthen our presence in industry bodies such as the Construction Federation of India (CFI), where Mr. Arjun Dhawan, Executive Vice Chairman of HCC, has been elected National Council Member. Our Chairman, Mr. Ajit Gulabchand, who has been the founding member and President of CFI for the past 24 years, has been nominated as President Emeritus of CFI.
Mr. Arjun Dhawan, Executive Vice Chairman, HCC, is also an active member of the World Economic Forum's Global Commission on Nature-Positive Cities. The Commission
brings together city mayors, business leaders, heads of international and non-governmental organizations, and academia to advocate for and deploy a nature-positive urban transformation. The Commission is a trusted space where real-time urban challenges preventing naturepositive urbanization are identified and addressed with the support of an international network of experts clustered in task forces. It will provide guidance, share learnings and success stories, identify opportunities to unlock financing for nature and advocate for nature-positive city design and delivery at global forums and events. As a member of the Commission, he also works with various World Economic Forum's communities and engages with other relevant Forums, global platforms, dialogues, and initiatives that foster public-private collaboration.
Strong Liquidity
With the challenges posed by the pandemic and geopolitics, which resulted in liquidity and supply chain disruptions, the Company has built appropriate cash buffers to meet both opportunities and challenges. The Company successfully completed its Rights Issue offering of ' 350 crore in April 2024, oversubscribed by 250%. Through the Rights Issue, the Paid-up Share Capital has increased by '17 crore, from 0151 crore to 0168 crore.
In order to unlock its disputed receivables, the Company is selectively engaging with its clients for out of court settlements, which can give immediate liquidity boost. The Company has successfully prepaid the entire fund based debt exposure of two of its lenders by accessing arbitration award monies deposited in court. The Company intends to continue such transactions to accelerate its debt and repayment obligations.
Strategic Divestments
Steiner AG, the wholly owned subsidiary of HCC and a leading Swiss-based real estate firm, has concluded the sale of its construction business subsidiary, Steiner Construction SA, to Demathieu Bard, an international construction group headquartered in France for approximately CHF 98 million (Rs 928 Cr) including liability transfer of around CHF 60 million (Rs 568 Cr). For the fiscal year ending March '23, Steiner Construction posted a turnover of CHF 347 million (Rs 3,076 Cr) and was operating 30 projects. This strategic transaction accelerates Steiner AG's transition to a pure real estate development company, paving the way for long-term growth in this field.
HCC has divested its entire equity shareholding in HCC Real Estate Ltd (HREL), wholly owned subsidiary of the Company, in March 2024. Accordingly, HREL and its subsidiaries -- Nashik Township Developers Ltd, Powai Real Estate Developers Ltd, HCC Aviation Ltd, and HCC Realty Ltd have ceased to be subsidiaries of HCC.
6. Share Capital of the Company
As on March 31,2024, the paid-up Equity Share Capital of the Company was ' 1,51,30,28,244/- comprising of 1,51,30,28,244 Equity Shares having face value of ' 1/-each.
Pursuant to the resolution passed by the Board of Directors at its Meetings held on August 03, 2023 and February 08, 2024, the Company has allotted 166,666,666 Equity Shares of face value of ' 1/- each for cash at a price of ' 21/-(including a share premium of ' 20/-) per Equity Shares for an amount aggregating to ' 350 Crore in the ratio of 13 (Thirteen) Rights Equity Shares for every 118 (One Hundred and Eighteen) fully paid equity shares on April 13, 2024.
Post Rights Issue, the paid-up Equity Share Capital of the Company has become ' 1,67,96,94,910/- comprising of 1,67,96,94,910 Equity Shares having face value of ' 1/-each.
7. Operations
The turnover of the Company during financial year 2023-24 is ' 5,042.71 crore as compared to ' 5,222.01 crore during financial year 2022-23.
During the year under review, the Company has secured 2 contracts aggregating ' 3,815.94 crore (The Company's Share ' 1,423.29 crore) in joint venture.
The total balance value of works on hand as on March 31, 2024 is ' 10,475.00 crore.
8. Operations of Subsidiaries:
i. HCC Infrastructure Company Ltd.
HCC Infrastructure Company Limited (HICL), a wholly owned subsidiary of Hindustan Construction Company Limited, has developed ~' 7,000 Crore NHAI concessions on DBFOT (Design, Build, Finance, Operate and Transfer) basis. The Company has been focussing on Public Private Partnership (PPP) projects with government entities under various BOT / BOOT / HAM / Annuity models.
HICL has undertaken various strategic initiatives over the last 2-3 years to revitalize itself through strategic divestments, thereby fulfilling its obligations towards its shareholders and lenders and completing the reorganisation of itself through a merger of a few of its subsidiaries. In financial year 2023-24, HICL became completely debt-free and has arbitration awards to the tune of ~'1,008 Crore as of March 31,2024. The award amounts have been deposited in the court and can be withdrawn against security.
Pursuant to the sale of Baharampore Farakka Highways Limited (BFHL), in financial year 2023-24, based on agreed terms, HICL achieved and received a maximum earnout of Rs. 110 Crore. The construction of Baharampore Bypass (including the Bhagirathi bridge) has also been completed.
In financial year 2023-24, HICL also decided to undertake EPC / Construction contracts and took on the Rs.183.5 crore Major Maintenance (MM) Agreement for BFHL. HICL has received a Contractor Payout amounting to Rs.42.53 Crore per the MM Agreement's terms. In the BOT space, new
NHAI projects have come up, and the Company is acting as a technical partner providing end-to-end development expertise, including project construction, to Concessionaires in the country. HICL continues to evaluate projects across the PPP space, including Ropeways Sector and Personalized Rapid Transit.
ii. Steiner AG
Steiner AG, HCC's wholly owned subsidiary, is a leading Swiss real estate service provider with a focus on project development. One of the largest Swiss real estate developers with a track record of managing a pipeline of up to CHF 6 bn GDV, Steiner has developed and constructed iconic residential, office, industrial and logistics projects over the last 100 years.
With long-term focus on reducing business risk and improving profitability, Steiner embarked on a journey of organisational restructuring and exited its construction business. Now Steiner AG is a pure play real estate developer, benefiting from industry knowhow, scalability effects, wide network and in-house digital technology support.
Steiner's Real Estate Development (RED) business works on an asset-light model characterized by low capital intensity sustaining a scalable and efficient origination strategy, driving substantial growth and profitability.
Some of the major projects being executed by Steiner AG are:
• Construction of Glasi-quarter, a new urban district in Bulach with 500-plus apartments, a residential and care centre, a hotel and over 20,000 m2 of light-industrial and service-sector units.
• Gupfengarten residential development in Niederweningen, a condominium development with a good mix of apartments and row houses, in total of 57 units.
• Vitznau residential project in Lucerne, development of condominiums with a good mix of apartments of a total of 16 units with a wonderful view of the Vierwaldstattersee lake.
• Mix city project in Renens, Lausanne, a multipurpose and urban green building for industries which incorporates an ambitious architectural approach and innovative features, including urban agriculture on the roof and innovative energy production methods.
• Le Day Project in Vallorbe (Canton Vaud), five buildings with 72 apartments
• The floating Gardens project in Zug is a residential construction project comprising two modern buildings with 14 high-quality apartments.
• Unter Erlen development project in Wollerau (Canton Schwyz), a high-quality residential area
with views of Lake Zurich with a total area of approx. 19,000 m2.
Steiner AG reported revenues of CHF 183 million ('1,679 crore) in FY24 as compared to CHF 337 million ('2,793 crore) in the previous year (restated) and a Profit Before Tax of CHF 24 million ('220 crore) as compared to a net loss of CHF 55 million ('452 crore) in the previous year (restated). The Company secured fresh orders worth CHF 72 million ('654 crore). The order book stood at CHF 425 million C3,907 crore) at the end of the financial year.
9. Subsidiaries, Associates and Joint Ventures
The Company along with Prolific Resolution Private Limited ("Prolific") has entered into an Agreement whereby Jadeja Investments Management Private Limited ("Investor") subscribed to 52,040 equity shares of Prolific on preferential allotment basis. Pursuant to the allotment of 52,040 equity shares to the Investor, the Company's holding in Prolific has been reduced to 49% from existing 100%. Accordingly, Prolific has ceased to be subsidiary of the Company with effect from September 30, 2023.
Steiner AG, Switzerland, a material subsidiary of the Company has divested its entire equity interest in Steiner Construction SA, Switzerland, a step-down material subsidiary of the Company on January 18, 2024, pursuant to Share Purchase Agreement dated December 04, 2023 entered into with Demathieu Bard, a Company headquartered in France. Accordingly, Steiner Construction SA has ceased to be a subsidiary of Steiner AG,
Switzerland and the Company with effect from January 18, 2024.
During the year, a petition has been filed with NCLT with respect to scheme of Amalgamation of Raiganj-Dalkhola Highways Limited (Step-Down Subsidiary) with HCC Infrastructure Company Limited (Wholly Owned Subsidiary) vide resolution approved by Board dated February 28, 2024.
Pursuant to Share Purchase Agreement executed between the Company, HREL Real Estate Limited ("HREL'), wholly owned subsidiary of the Company and HRL (Thane) Real Estate Limited ("HRL (Thane)"), HRL (Thane) has become direct subsidiary of the Company with effect from March 29, 2024.
The Company has divested its entire equity shareholding in HREL, wholly owned subsidiary of the Company vide Share Purchase Agreement executed on March 31, 2024. Accordingly, HREL and its following subsidiaries have ceased to be subsidiaries of the Company with effect from March 31,2024:
1. Nashik Township Developers Limited
2. Powai Real Estate Developers Limited
3. HCC Aviation Limited
4. HCC Realty Limited
Pursuant to initiation of the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 ('IBC') against Lavasa Corporation Limited (LCL), effective August 30, 2018, the Holding Company has lost control / significant influence over LCL and its subsidiaries, associates and joint ventures. Accordingly, the above entities had ceased to be subsidiaries, associates and joint ventures of the Holding Company effective August 30, 2018.
The details as required under Rule 8 of the Companies (Accounts) Rules, 2014 regarding the performance and financial position of the Subsidiaries, Associates and Joint Ventures of the Company are provided in Form AOC-1, which forms part of the Consolidated Financial Statements of the Company for the financial year ended March 31, 2024.
The Company's policy for determining material subsidiaries can be accessed by weblinkhttps://hccindia.com/uploads/ Investors/Policy%20for%20determining%20Material%20 Subsidiaries.pdf.
10. Public Deposits
The Company has not accepted any deposit falling under Chapter V of the Companies Act, 2013 ("The Act") during the year under review. There were no such deposits outstanding at the beginning and end of the FY 2023-24.
11. Particulars of Loans, Guarantees or Investments
Particulars of Loans, Guarantees and Investments made during the year as required under the provisions of Section 186 of the Act are given in the notes to the Financial Statements forming part of this Annual Report.
Disclosures pursuant to Para A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") have been made in the notes to the Financial Statements forming part of this Annual Report.
12. Employee Stock Option Scheme (ESOP)
The HCC ESOP Scheme was approved by the Members of the Company by Special Resolution passed by Postal Ballot on December 10, 2007 The Company had granted 3,71,748 stock options to the eligible employee under the HCC ESOP Scheme on March 16, 2023. Each stock option, when exercised, would entitle the holder to subscribe for one equity share of the Company of face value ' 1/- each. Also, 82,71,402 stock options were available for grant to the eligible employees as on March 31,2024.
The particulars with regard to stock options as on March 31, 2024, as required to be disclosed pursuant to the provisions of the Companies (Share Capital and Debentures) Rules, 2014 read with the applicable SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, are set out at Annexure I to this Report.
A certificate from BNP & Associates, Secretarial Auditors of the Company, certifying that the Company's ESOP Scheme
has been implemented in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the Resolution passed by the Members for approving the Scheme, shall be placed in the ensuing Annual General Meeting.
13. Consolidated Financial Statements
In accordance with the Act and implementation requirements of Indian Accounting Standards ("IND-AS") on accounting and disclosure requirements and as prescribed by the SEBI Listing Regulations, the Audited Consolidated Financial Statements are provided in this Annual Report.
Pursuant to Section 129(3) of the Act, a statement containing the salient features of the Financial Statements of the Subsidiaries, Associates and Joint Ventures of the Company in the prescribed form AOC-1 is annexed to this Annual Report.
Pursuant to Section 136 of the Act, the Financial Statements of the Subsidiaries are available on the website of the Company under the Investors Section and can be accessed by weblink https://www.hccindia.com/investors/ subsidiary-companies-financial-statements.
14. Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements as stipulated by the Securities and Exchange Board of India ("the SEBI").
The report on Corporate Governance as prescribed in the SEBI Listing Regulations forms an integral part of this Annual Report. The requisite certificate from the Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance along with a declaration signed by MD and CEO of the Company stating that the Members of the Board and Senior Management have affirmed the compliance with Code of Conduct of the Board and Senior Management, is attached to the report on Corporate Governance.
15. Directors
The Members of the Company, based on the performance evaluation carried out by the Board and recommendation of the Board and Nomination and Remuneration Committee ("NRC"), by Special Resolution passed at the 97th AGM held on August 30, 2023 had re-appointed Dr. Mita Dixit, Independent Director, whose term was expiring on August 30, 2023 for a second term of 5 consecutive years with effect from August 30, 2023.
The existing tenure of Mr. N. R. Acharyulu as Independent Director is expiring on September 17 2024 i.e. date of the 98th AGM and he, being eligible, has offered himself for re-appointment. Based on the performance evaluation carried out by the Board and after reviewing the declaration submitted by him and pursuant to the recommendation of the NRC, the Board recommends his re-appointment for a second term of 5 consecutive years. A resolution proposing his continuation on the Board for the second term pursuant
to Section 149(6) of the Companies Act, 2013 including justification for his re-appointment, as his age is more than 75 years, in accordance with Regulation 17 (1A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in the notice of the ensuing 98th AGM.
As per the provisions of Section152 of the Companies Act, 2013, Mr. Aditya Pratap Jain, Non-Executive and NonIndependent Director of the Company, is due to retire by rotation at the ensuring 98th Annual General Meeting and, being eligible, has offered himself for re-appointment. The Board, based on the recommendation of the Nomination and Remuneration Committee, at its Meeting held on August 05, 2024, has recommended his re-appointment as a Non-Executive and Non- Independent Director of the Company, liable to retire by rotation.
Brief profiles of the Directors seeking re-appointment have been given as an annexure to the Notice of the ensuing 98th AGM.
The Independent Directors of the Company viz. Mr. Santosh Janakiram, Mr. Mahendra Singh Mehta, Dr. Mita Dixit,
Mr. N. R. Acharyulu and Mr. Arun Karambelkar have furnished the declarations to the Company confirming that they meet the criteria of Independence as prescribed under Section 149 of the Act and Regulation 16 (1)(b) read with Regulation 25(8) of the SEBI Listing Regulations and the Board has taken on record the said declarations after undertaking due assessment of the veracity of the same.
The Company has also received Form DIR-8 from all the Directors pursuant to Section 164(2) and Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.
16. Key Managerial Personnel
As on March 31,2024, the following persons were the Key Managerial Personnel ("KMP") of the Company pursuant to Section 2(51) and Section 203 of the Act read with the Rules framed thereunder:
i. Mr. Arjun Dhawan, Executive Vice Chairman.
ii. Mr. Jaspreet Bhullar, Managing Director and Chief Executive Officer.
iii. Mr. Rahul Rao, Chief Financial Officer (resigned w.e.f. April 18, 2024).
iv. Mr. Nitesh Kumar Jha, Company Secretary and Compliance Officer.
Mr. Girish Gangal has been appointed as Chief Financial Officer of the Company with effect from April 18, 2024 in place of Mr. Rahul Rao.
17. Board Committees
The Board had constituted / re-constituted various Committees in compliance with the provisions of the Act and the SEBI Listing Regulations viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Risk Management Committee.
All decisions pertaining to the constitution of Committees, appointment of Members and fixing of terms of reference/ role of the Committees are taken by the Board.
The details of the role and composition of these Committees, including the number of Meetings held during the financial year and attendance at these Meetings are provided in the Corporate Governance Section of this Annual Report.
18. Meetings
A calendar of Board Meetings, Annual General Meeting and Committee Meetings is prepared and circulated in advance to the Directors of the Company. The Board met 4 times during the financial year 2023-24 on May 18, 2023, August 03, 2023, November 09, 2023, and February 08, 2024.
The maximum time gap between any two consecutive Meetings did not exceed one hundred and twenty days.
19. Familiarization Program of Independent Directors
In compliance with the requirements of the SEBI Listing Regulations, the Company has put in place a familiarization program for Independent Directors to familiarize them with their role, rights and responsibility as Directors, the operations of the Company, business overview etc. The details of the familiarization program are explained in the Corporate Governance Report and the same is also available on the website of the Company and can be accessed by weblink https://hccindia.com/ uploads/Investors/Policy%20for%20Familiarisation%20 Program%20for%20Independent%20Directors.pdf.
20. A statement regarding opinion of the Board with regard to integrity, expertise, and experience (including the proficiency) of the Independent Directors appointed during the year
The Company has received declaration from the Independent Directors that they meet the criteria of independence as prescribed under Section 149 of the Act and Regulation 16 (1)(b) read with Regulation 25(8) of the SEBI Listing Regulations. In the opinion of the Board, they fulfil the condition for appointment/re-appointment as Independent Directors on the Board and possess the attributes of integrity, expertise and experience as required to be disclosed under Rule 8(5) (iiia) of the Companies (Accounts) Rules, 2014.
21. Independent Directors' Meeting
In terms of Schedule IV of the Act and Regulation 25 of the SEBI Listing Regulations, Independent Directors of the Company are required to hold at least one Meeting in a financial year without the attendance of Non-Independent Directors and Members of Management.
During the year under review, Independent Directors met separately on February 08, 2024, inter-alia, for
• Evaluation of performance of Non-Independent Directors and the Board as a whole;
• Evaluation of performance of the Chairman of the Company, taking into views of Executive and NonExecutive Directors; and
• Evaluation of the quality, content, and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
22. Performance Evaluation
Pursuant to the applicable provisions of the Act and the SEBI Listing Regulations, the Board has carried out an Annual Evaluation of its own performance, performance of the Independent Directors and the working of its Committees based on the evaluation criteria specified by Nomination and Remuneration Committee for performance evaluation process of the Board, its Committees and Directors.
The Board's functioning was evaluated on various aspects, including, inter-alia, the structure of the Board, Meetings of the Board, functions of the Board, degree of fulfilment of key responsibilities, establishment, and delineation of responsibilities to various Committees and effectiveness of Board processes, information and functioning.
The Committees of the Board were assessed on the degree of fulfilment of key responsibilities, adequacy of Committee composition and effectiveness of Meetings.
The Directors were evaluated on aspects such as attendance, contribution at Board/Committee Meetings and guidance/support to the management outside Board/ Committee Meetings.
As mentioned earlier, the performance assessment of NonIndependent Directors, Board as a whole and the Chairman were evaluated in a separate Meeting of Independent Directors. The same was also discussed in the Board Meeting. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.
23. Criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel
The Nomination and Remuneration Committee has laid down well-defined criteria, in the Nomination and Remuneration Policy, for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel.
The said Policy is available on the Company's website and can be accessed by weblink https://hccindia.com/uploads/ Investors/Nomination-and-Remuneration-Policy.pdf.
24. Remuneration Policy for Directors, Key Managerial Personnel and Senior Management Employees
The Nomination and Remuneration Committee has laid down the framework for remuneration of Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration Policy recommended by it and approved by the Board. The Policy, inter-alia, defines Key Managerial Personnel and Senior Management Personnel of the Company and prescribes the role of the Nomination and Remuneration Committee. The Policy lays down the criteria for identification, appointment and retirement of Directors, Key Managerial Personnel and Senior Management. The Policy broadly lays down the framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management Personnel. The Policy also provides for the criteria for determining qualifications, positive attributes and independence of Director and lays down the framework on Board diversity.
The said Policy is available on the Company's website and can be accessed by weblink https://hccindia.com/uploads/ Investors/Nomination-and-Remuneration-Policy.pdf.
25. Corporate Social Responsibility Policy
CSR provisions as contained in the Section 135 of the Act are applicable to the Company. However, no CSR amount was required to be spent on CSR activities during the financial year ended March 31, 2024.
A brief outline of the Corporate Social Responsibility ("CSR") Policy as recommended by the CSR Committee and approved by the Board, and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure II of this Report in the prescribed format.
The said Policy is available on the Company's website and can be accessed by weblink https://hccindia.com/uploads/ Investors/Corporate Social Responsibility Policy.pdf.
26. Related Party Transactions
The related party transactions attracting the compliance under the Companies Act, 2013 and/or the SEBI Listing Regulations were placed before the Audit Committee and/ or Board and/or Members for necessary review/approval.
The routine related party transactions were placed before the Audit Committee for its omnibus approval. A statement of all related party transactions entered was presented before the Audit Committee on a quarterly basis, specifying the nature, value and any other related terms and conditions of the transactions.
There are no details to report in Form AOC-2 with respect to the contracts/arrangements/transaction with related parties in terms of Section 134(3) (h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 for the financial year 2023-24.
The Related Party Transaction Policy is available on the Company website and can be accessed by weblink https:// hccindia.com/uploads/Investors/Policy for Related Party Transactions.pdf.
27. Business Responsibility and Sustainability Report
Pursuant to the provisions of Regulation 34(2)(f) of the SEBI Listing Regulations, Business Responsibility and Sustainability Report for the financial year 2023-24 in the revised format prescribed by the SEBI is furnished at Annexure III of this Report.
28. Directors' Responsibility Statement
In accordance with the provisions of Section 134(3) of the Act, the Directors confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.
(b) the selected accounting policies were applied consistently, and the Directors 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, 2024 and of the Profit of the Company for the year ended on that date;
(c) proper and sufficient care has been taken 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 annual accounts have been prepared on a going concern basis.
(e) the internal financial controls have been laid down to be followed by the Company and such controls are adequate and are generally operated effectively during the year.
(f) proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems are adequate and are operating effectively.
The Statutory Auditors have opined that the Company has in, all material respects, maintained adequate internal financial controls over financial reporting and that they were operating effectively.
29. Industrial Relations
The industrial relations continued to be generally peaceful and cordial during the year under review.
30. Transfer of Unclaimed Dividend and Equity Shares to Investor Education and Protection Fund (IEPF)
Pursuant to the applicable provisions of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to IEPF after the completion of seven years. Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to IEPF During the year under review, there were no unclaimed dividend or equity shares due to be transferred to the IEPF Authority pursuant to IEPF Rules.
31. Particulars of Employees and other additional information
Disclosure 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 is annexed to the Report as Annexure-IV. In terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the Members, excluding statement containing particulars of top 10 employees and the employees, drawing remuneration in excess of limits prescribed under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 which forms part of this Report. The said statement is open for inspection. Any Member interested in obtaining a copy of the same may write to the Company Secretary at [email protected].
32. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed under the Companies (Accounts) Rules, 2014 is given in Annexure V forming part of this Annual Report.
33. Secretarial Standards
The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
34. Statutory Auditors
As Walker Chandiok & Co. LLP Chartered Accountants, Mumbai, (Firm Registration No.001076N) retire after being Company's Statutory Auditors for a period of 10 consecutive years, the Board proposes to appoint M/s Mukund Chitale & Co., Chartered Accountants, Mumbai (Firm Registration No. 006655W), as Statutory Auditors of the Company at the ensuing 98th AGM for a term of
5 consecutive years from the conclusion of that AGM till the conclusion of the 103rd AGM at such remuneration as may be mutually agreed upon between the Board and the Statutory Auditors, from time to time. M/s Mukund Chitale & Co. are eligible for the said appointment and have furnished necessary certificate of their eligibility and consent to act as the Statutory Auditors of the Company. Accordingly, a resolution seeking approval
of the Members for appointment of M/s Mukund Chitale
6 Co., Chartered Accountants as Statutory Auditors of the Company is included in the Notice of the ensuing 98th AGM.
35. Board's Comment on Statutory Auditors' Qualifications
The explanations on the qualifications/observations/matter of emphasis given by the Statutory Auditors in their Audit Reports have been provided in the respective Notes to the Standalone and Consolidated Financial Statements.
36. Secretarial Audit
Secretarial Audit for the financial year 2023-24 was conducted by M/s. BNP & Associates, Company Secretaries in Practice in accordance with the provisions of Section 204 of the Act. The Secretarial Auditor's Report is annexed to this Annual Report at Annexure VI.
The Secretarial Auditor's observations are self-explanatory.
37. Cost Audit
The Company is maintaining the accounts and cost records as specified by the Central Government under sub-section (1) of Section 148 of the Act and Rules made thereunder.
In compliance with the provisions of Section 148 of the Act, the Board had at its Meeting held on August 03, 2023, appointed M/s. Joshi Apte & Associates, Cost Accountants as Cost Auditors of the Company for the financial year 2023-24.
In terms of the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration of the Cost Auditors is required to be ratified by the Members. Accordingly, necessary resolution is proposed at the 98th Annual General Meeting for ratification of the remuneration payable to the Cost Auditors for financial year 2023-24.
38. Risk Management
The Company has established a well-documented and robust risk management framework under the provisions of the Act. Under this framework, risks are identified across all business processes of the Company on a continuous basis. Once identified, these risks are managed systematically by categorizing them into Enterprise Level Risk & Project Level Risk. These risks are further broken down into various subcategories of risks such as operational, financial, contractual, order book, project cost and time overrun etc. and proper documentation is maintained in the form of activity log registers, mitigation reports, and monitored by respective functional heads. Review of these risk and documentation is undertaken by Risk Management Committee regularly at agreed intervals. Further, the Risk Management Committee has been assigned the roles and responsibilities as specified in Schedule II of the SEBI Listing Regulations.
39. Internal Control Systems and their adequacy
The Company has an adequate system of internal control to ensure that the resources are used efficiently and effectively so that:
• assets are safeguarded and protected against loss from unauthorized use or disposition.
• all significant transactions are authorised, recorded and reported correctly.
• financial and other data are reliable for preparing financial information.
• other data are appropriate for maintaining accountability of assets.
The internal control is supplemented by an extensive internal audit program and review by management along with documented policies, guidelines and procedures.
40. Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Company has adopted accounting policies, which are in line with the Accounting Standards and the Act.
41. Whistle Blower Policy/Vigil Mechanism
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or Ethics Policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and provides for direct access to the Chairman of the Audit Committee. It is affirmed that no person has been denied access to the Audit Committee.
The said Policy is available on the Company website and can be accessed by weblink https://hccindia.com/uploads/ Investors/Vigil Mechanism Policy.pdf.
42. Prevention of Sexual Harassment
The Company has always believed in providing a conducive work environment devoid of discrimination and harassment including sexual harassment. The Company has a well formulated Policy on Prevention and Redressal of Sexual Harassment. The objective of the Policy is to prohibit, prevent and address issues of sexual harassment at the workplace. This Policy has striven to prescribe a code of conduct for the employees and all employees have access to the Policy document and are required to strictly abide by it. The Policy covers all employees, irrespective of their nature of employment and is also applicable in respect of all allegations of sexual harassment made by an outsider against an employee.
The Company has duly constituted an Internal Complaints Committee in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and the Rules thereunder. During the financial year 2023-24, no case of Sexual Harassment was reported.
43. Reporting of Frauds
There was no instance of fraud during the year under review, which required the Statutory Auditors to report
under Section 143(12) of the Act and the Rules made thereunder.
44. Significant and material Orders passed by the Regulators/Courts, if any
There are no significant or material Orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.
45. Material changes and commitment if any, affecting financial position of the Company from the end of financial year till the date of the Report
There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the Financial Statements relate and the date of this Report.
46. Annual Return
The Company has uploaded Annual Return on the website of the Company and can be accessed by weblink https:// www.hccindia.com/investors.
47. Green Initiatives
In line with the Green Initiatives, the Notice of 98th Annual General Meeting of the Company is being sent to all Members whose email addresses are registered with the Company/Depository Participant(s). Members who have not registered their e-mail addresses, are requested to register their e-mail IDs with their Depository Participant(s)/ Company's Registrar and Share Transfer Agents, Link Intime India Private Limited.
48. Dividend Distribution Policy
Dividend Distribution Policy of the Company endeavours for fairness, consistency and sustainability while distributing profits to the Members and same is attached to this Report as Annexure VI.
49. Other Disclosures
During the year under review:
• no proceedings are admitted under the Insolvency and Bankruptcy Code, 2016 and there is no instance of one-time settlement with any Bank or Financial Institution;
• no shares with differential voting rights and sweat equity shares have been issued;
• there has been no change in the nature of business of the Company.
50. Acknowledgement
The Directors would like to acknowledge and place on record their sincere appreciation to all Stakeholders,
Clients, Financial Institutions, Banks, Central and State Governments, the Company's valued Investors and all other Business Partners, for their continued co-operation and support extended during the year.
The Directors also recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to promote its development.
For and on behalf of Board of Directors
Ajit Gulabchand
Chairman
Registered Office:
Hincon House, Lal Bahadur Shastri Marg,
Vikhroli (West), Mumbai 400 083
Place: Mumbai Date: August 05, 2024
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