<dhhead>Directors' Report</dhhead>
Dear Members,
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.
Financial Highlights
Your Company's financial performance (standalone and consolidated) for
the financial year ended March 31, 2022 is summarized below:
Particulars |
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%.
Net Worth
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.
Gross Debt
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.
Transfer To Reserves
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.
Dividend
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.
Dividend Distribution Policy
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.
The Dividend Distribution Policy is available on the Company's website
at https://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 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.
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 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.
Fixed Deposits
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
Authorized Share Capital
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).
Paid-up Share Capital
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.
Allotment of equity shares under Employee Stock Option Plan
("ESOP") and Qualified Institutions Placement (QIP):
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.
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 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.
Cessation
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.
Key Managerial Personnel
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.
Declaration by the Company
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.
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
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.
Audit Committee
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.
Performance Evaluation
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.
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 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.
Remarks by Secretarial Auditor
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.
Explanation by the Board pursuant to Section 134(3)(f) of the Act
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.
Cost Records and Cost Audit
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 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.
Credit Ratings
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) |
|
Annual Return
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:-
Particulars |
Amount |
Loans given |
40.50 |
Guarantees given |
268.16 |
Investments made |
82.24 |
Loans given, Guarantees provided and Investments made during the FY22:
Name of the entity |
Relation |
Amount (? in Crores) |
Particulars of Loans, Guarantees & Investments |
Purpose for which the Loans, Guarantees and Investments are
proposed to be utilized by the recipient |
BigCat Wireless Private Limited |
Associate |
10.50 |
Investment in Equity Shares |
For Product development, working capital and general
corporate business purposes. |
Satvik Securities Private Limited |
Unrelated |
5.00 |
Loan with interest @ 9% p.a. |
For working capital and general corporate business purposes. |
Kamna Industries Private Limited |
Unrelated |
5.00 |
Loan with interest @ 12% p.a. |
For working capital and general corporate business purposes. |
HTL Limited |
Subsidiary |
114.00 |
Corporate Guarantee |
Collateral Security for various credit facilities sanctioned
by SBI and Yes Bank Limited to HTL Limited. |
HFCL Inc. |
Subsidiary |
0.00 (USD 1 equivalent to ' 81 only) |
Investment in Equity Shares |
For general corporate business purposes. |
HFCL B.V. |
Subsidiary |
0.00 (Euro 1 equivalent to ' 80 only) |
Investment in Equity Shares |
For general corporate business purposes. |
HFCL Technologies Private Limited |
Subsidiary |
1.00 |
Investment in Equity Shares |
For working capital and general corporate business purposes. |
Nimpaa Telecommunications Private Limited |
Associate |
1.00 |
Loan given |
For working capital and general corporate business purposes. |
Nimpaa Telecommunications Private Limited |
Associate |
1.00 |
Investment in Equity Shares |
For working capital and general corporate business purposes. |
For more details, please refer Note No. 18, 47(c) and 51 to the
Standalone Financial Statements for FY22 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 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.
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 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.
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) 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.
Listing
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.
Depository Systems
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).
Reporting Principle
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, 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.
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 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.
|
For and on behalf of the Board |
|
|
Mahendra Nahata |
Arvind Kharabanda |
Place: New Delhi |
Managing Director |
Non-Executive Director |
Date: September 02, 2022 |
DIN:00052898 |
DIN:00052270 |
Annexure (A) to Directors' Report
Disclosures pursuant to regulation 14 of the SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 ("SBEB & SE Regulations") read
with part F of schedule I of SBEB & SE regulations
A. Relevant disclosures in terms of the accounting standards prescribed
by the Central Government in terms of Section 133 of the Companies Act, 2013 including the
'Guidance note on accounting for employee share-based payments' issued in that regard from
time to time.
Please refer to Note No. 56 to the Standalone Financial Statements for
FY22, which forms part of this Annual Report.
B. Diluted EPS on issue of shares pursuant to all the schemes covered
under the Regulations shall be disclosed in accordance with 'Accounting Standard 20 -
Earnings Per Share' issued by Central Government or any other relevant accounting
standards as issued from time to time:
? 2.15/- (Rupees Two and Paisa Fifteen only) as on March 31,2022.
C. Details related to Employee Stock Options (Options/ ESOs) and
Restricted Stock Units (RSUs):
(i) A description of each ESOs that existed at any time during the
year, including the general terms and conditions of each ESOs, including -
(a) Date of shareholders' approval: August 26, 2017
(b) Total number of Options approved under ESOs and RSUs:
Sr. No. Particulars |
No. of Options/RSUs |
i. Employee Stock Options |
1,00,00,000 |
2. Restricted Stock Units |
1,00,00,000 |
(c) Vesting requirements of ESOs and RSUs: The Vesting conditions in
respect of the Options and RSUs granted under the Employee Stock Option Plan shall be as
determined by the Nomination, Remuneration and Compensation Committee ("the
Committee") from time to time. Upon commencement of this Plan, subject to terms and
conditions of this Plan, the Options and RSUs granted to Eligible Employees shall Vest as
per the schedule ("Vesting Schedule") determined by the Committee at the time of
grant but the Vesting Schedule shall not be less than one year and not more than five
years from the date of grant of Options and RSUs as the case may be. At the stage of
determining the grant, the Committee may or may not consider performance based vesting of
the Options.
ESOs:
% Options to be Vested |
Year |
40% of the Options granted |
End of the 1st year from the
date of grant |
30% of the Options granted |
End of the 2nd year from the
date of grant |
30% of the Options granted |
End of the 3rd year from the
date of grant |
RSUs:
% RSUs to be Vested |
Year |
70% of the RSUs granted |
End of the 3rd year from the
date of grant |
30% of the RSUs granted |
End of the 4th year from the
date of grant |
(d) Exercise price or pricing formula for ESOs and RSUs:
Options were granted at a price of ? 20.65/- per equity share, i.e.,
the closing market price of the shares of the Company on the NSE immediately prior to the
date of grant i.e. October 15, 2018.
RSUs were granted at a price of ? 1/- per equity share.
(e) Maximum term of Options/RSUs granted:
Not more than five years from the date of grant of Options/RSUs.
(f) Source of shares (primary, secondary or combination):
Primary.
(g) Variation in terms of Options/RSUs:
Not Applicable.
(ii) Method used to account for ESOs/RSUs- Intrinsic or Fair Value:
Fair Value Method.
(iii) Where the company opts for expensing of the Options using the
intrinsic value of the Options, the difference between the employee compensation cost so
computed and the employee compensation cost that shall have been recognized if it had used
the fair value of the Options shall be disclosed. The impact of this difference on profits
and on EPS of the company shall also be disclosed:
Not Applicable.
(iv) Options/ RSUs movement during the year:
Particulars |
ESOs |
RSUs |
Number of Options/RSUs outstanding at the
beginning of the period |
63,37,000 |
60,08,000 |
Number of Options/RSUs granted during the year |
NIL |
NIL |
Number of Options/RSUs forfeited/lapsed during
the year |
81,600 |
2,72,000 |
Number of Options/RSUs vested during the year |
NIL |
NIL |
Number of Options/RSUs exercised during the
year |
32,34,400 |
NIL |
Number of shares arising as a result of
exercise of Options/RSUs |
32,34,400 |
NIL |
Money realized by exercise of Options/RSUs
(INR), if scheme is implemented directly by the Company |
NIL |
NIL |
Loan repaid by the Trust during the year from
exercise price received |
6,60,00,000 |
NIL |
Number of Options/RSUs outstanding at the end
of the year |
30,21,000 |
57,36,000 |
Number of Options/RSUs exercisable at the end
of the year |
13,00,200 |
NIL |
(v) Weighted-average exercise prices and weighted-average fair values
of options shall be disclosed separately for Options whose exercise price either equals or
exceeds or is less than the market price of the stock:
Particulars |
ESOs |
RSUs |
Weighted average exercise price |
20.65 |
1.00 |
Weighted average fair value as on granted date |
11.04 |
19.74 |
(vi) Employee wise details (name of employee, designation, number of
Options/RSUs granted during the year, exercise price)
of Options/RSU's granted to:
(a) Senior managerial personnel: During the financial year ended March
31, 2022 no further Options/RSUs have been granted by the Company pursuant to HFCL 2017
Scheme .
(b) Any other employee who receives a grant in any one year of Option
amounting to 5% more of Options granted during that year: N.A.
(c) Identified employees who were granted Options/RSUs, during any one
year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and
conversions) of the Company at the time of grant: N.A.
(vii) A description of the method and significant assumptions used
during the year to estimate the fair value of Options and
RSUs:
(a) The fair value of each equity-settled award is estimated on the
date of grant using the Black-Scholes model with the following assumptions:
Particulars |
For Grants made
during the year ended March 31, 2022 |
|
ESOs |
RSUs |
Weighted average share price (?) |
20.65 |
20.65 |
Exercise price (?) |
20.65 |
1.00 |
Expected volatility |
56.4% to 59.1% |
56.8% to 59.1% |
Expected life of the Options (years) |
3.50 to 5.50 |
4.50 to 5.50 |
Expected dividends |
0.23% |
0.23% |
Risk-free interest rate |
7.81% to 7.89% |
7.85% to 7.89% |
Weighted average fair value as on grant date (?) |
11.04 |
19.74 |
(b) The method used and the assumptions made to incorporate the effects
of expected early exercise, how expected volatility was determined, including an
explanation of the extent to which expected volatility was based on historical volatility;
and whether and how any other features of the Options/RSUs grant were incorporated into
the measurement of fair value, such as a market condition.
The expected life of the ESOs/RSUs is estimated based on the vesting
term and contractual term of the ESOs/RSUs, as well as expected exercise behaviour of the
employee who receives the ESOs/RSUs. Expected volatility during the expected term of the
ESOs/RSUs is based on historical volatility of the observed market prices of the Company's
publicly traded equity shares during a period equivalent to the expected term of the
ESOs/RSUs.
(viii) Disclosures in respect of grants made in three years prior to
IPO under each ESOs/RSUs:
Until all Options/RSUs granted in the three years prior to the IPO have
been exercised or have lapsed, disclosures of the information specified above in respect
of such Options/RSUs shall also be made: Not Applicable
Details related to Employee Stock Purchase Scheme (ESPS):
(i) The following details on each ESPS under which allotments were made
during the year:
a. Date of shareholders' approval |
: August 26, 2017 |
b. Number of shares issued |
: NIL |
c. The price at which such shares are issued |
: NIL |
d. Lock-in period |
: Not Applicable |
(ii) The following details regarding allotment made under each ESPS, as
at the end of the year:
Particulars |
Details |
The details of the number of shares issued under ESPS |
NIL |
The price at which such shares are issued |
Not Applicable |
Employee-wise details of the shares issued to; |
|
(i) senior managerial personnel; |
NIL |
(ii) any other employee who is issued shares in any one year
amounting to 5% or more shares issued during that year; |
NIL |
(iii) identified employees who were issued shares during any
one year equal to or exceeding 1% of the issued capital of the Company at the time of
issuance; |
NIL |
(iv) Consideration received against the issuance of shares,
if scheme is implemented directly by the Company |
NIL |
(v) Loan repaid by the Trust during the year from exercise
price received |
NIL |
Details related to Trust:
The following details, inter-alia, in connection with transactions made
by the Trust meant for the purpose of administering the schemes under the Regulations are
to be disclosed:
(i) General information on all schemes:
Sr. Particulars No. |
Details |
a. Name of the Trust |
HFCL Employees' Trust |
b. Details of the Trustee(s) |
(i) Mr. Brij Behari Tandon (ii) Mr. Pankaj
Jain |
c. Amount of loan disbursed by Company/any Company in the
group, during the year |
' 10,18,93,295/- |
d. Amount of loan outstanding as at the end of the year
(repayable to Company/any Company in the group) |
' 3,59,40,495/- |
e. Amount of loan, if any, taken from any other source for
which Company/any Company in the group has provided any security or guarantee |
NIL |
f. Any other contribution made to the Trust during the year |
NIL |
(ii) Brief details of transactions in shares by the Trust:
Sr. Particulars No. |
Details |
(a) Number of shares held at the beginning of the year |
49,34,300 |
(b) Number of shares acquired during the year through (i)
primary issuance (ii) secondary acquisition, also as a percentage of paid up equity
capital as at the end of the previous financial year, along with information on weighted
average cost of acquisition per share |
Nil |
(c) Number of shares transferred to the employees/sold along
with the purpose thereof |
32,34,400 |
(d) Number of shares held at the end of the year |
16,99,900 |
(iii) In case of secondary acquisition of shares by the Trust:
Number of shares |
As a percentage of paid-up equity capital as
at the end of the year immediately preceding the year in which shareholders' approval was
obtained |
Held at the beginning of the year |
NIL |
Acquired during the year |
NIL |
Sold during the year |
NIL |
Transferred to the employees during the year |
NIL |
Held at the end of the year |
NIL |
It is informed that the Nomination Remuneration and Compensation
Committee in its meeting held on April 23, 2022, waived off the conditions of achieving
Composite Performance Score of 70% for the third year of the Scheme i.e., for FY 2020-21
as well and accordingly, all the eligible employees have right to exercise their remaining
30% of ESOPs. Further, since the performance conditions of RSUs have not been met and
Nomination, Remuneration and Compensation Committee has also not relaxed any of the
performance conditions, RSUs stands cancelled.
The details as required to be disclosed under the SBEB & SE
Regulations can be accessed at the weblink: https://
www.hfcl.com/wp-content/uploads/2022/09/ESOP- Annexure.pdf.
A. Details pertaining to Remuneration 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 as amended by the Companies (Appointment and
Remuneration of Managerial Personnel) Amendment Rules, 2016: -
I. Ratio of the remuneration of each director to the median
remuneration of all the employees of your Company for the FY22 is as follows: -
Sr. Name of Director No. |
Category |
Total Remuneration (?) |
Ratio of remuneration of
Director to the Median remuneration |
1. Mr. Mahendra Pratap Shukla* |
Non-Executive Director |
50,000 |
0.08 |
2. Mr. Mahendra Nahata |
Managing Director |
7,04,61,400 |
106.00 |
3. Mr. Arvind Kharabanda |
Non-Executive Director |
13,50,000 |
2.03 |
4. Dr. (Mr.) Ranjeet Mal Kastia |
Non-Executive Director |
6,50,000 |
0.98 |
5. Mr. Bharat Pal Singh |
Independent Director |
9,50,000 |
1.43 |
6. Mr. Surendra Singh Sirohi |
Independent Director |
8,50,000 |
1.28 |
7. Dr. (Ms.) Tamali Sengupta |
Independent Director |
8,00,000 |
1.20 |
8. Mr. Ramakrishna Eda# |
Non-Executive Director |
2,00,000 |
0.30 |
9. Mr. Ajai Kumar## |
Independent Director |
1,00,000 |
0.15 |
* Deceased on May 04, 2021.
# Ceased as Non-Executive Director (Nominee - IDBI Bank Limited) w.e.f.
May 02, 2022.
## Appointed as Non-Executive Independent Director w.e.f. November 25,
2021.
Notes:
1. The information provided above is on standalone basis.
2. Remuneration to Directors includes sitting fees paid to
Non-Executive Directors.
3. Median remuneration of the Company for all its employees is
?6,64,741/- for the FY22.
II. Percentage increase in remuneration of Chief Executive Officer,
Chief Financial Officer, other Executive Directors and Company Secretary during the FY22:-
Sr. Name No. |
Category |
Remuneration (?) |
Increase |
2021-22 |
2020-21 |
(%) |
1. Mr. Mahendra Nahata |
Managing Director |
7,04,61,400 |
6,44,25,590 |
9.37 |
2. Mr. Vijay Raj Jain |
Chief Financial Officer |
4,99,79,343 |
3,09,84,695 |
61.30 |
3. Mr. Manoj Baid |
Senior Vice President
(Corporate) & Company Secretary |
1,47,67,814 |
84,66,545 |
74.43 |
Note: The remuneration paid to Directors is within the overall limits
approved by the shareholders.
III. Percentage increase in the median remuneration of all employees in
the FY22:
Particulars |
Remuneration (?) |
Increase |
2021-22 |
2020-21 |
(%) |
Median remuneration of all employees per annum |
6,64,741 |
7,05,000 |
-5.71 |
IV. Number of permanent employees on the rolls of the Company as on
March 31, 2022:
The number of permanent employees on the rolls of the Company as on
March 31, 2022 were 2,100. Besides, the Company has 1,328 personnel also, on off-roll or
contractual basis as on March 31, 2022.
V. Comparison of average percentile increase in the salaries of
employees other than the key managerial personnel and the percentile increase in the
managerial remuneration and justification thereof and point out if there are any
exceptional circumstances for increase in the managerial remuneration:
Particulars |
Remuneration (?) |
Increase |
2021-22 |
2020-21 |
(%) |
Average salary of all employees (other than
Key Managerial Personnel) |
11,78,808 |
11,14,537 |
5.77 |
Average Salary of Managing Director |
7,04,61,400 |
6,44,25,590 |
9.37 |
Average Salary of CFO and Company Secretary |
3,23,73,579 |
1,97,25,620 |
64.12 |
The percentile increase in remuneration is in line with the performance
of the Company and prevailing industry pay scale. The increase in the remuneration of Mr.
Vijay Raj Jain, CFO and Mr. Manoj Baid, Company Secretary is mainly due to perquisites
which arose on account of exercise of vested ESOPs and payment of ex-gratia aggregating to
' 2.86 crores and ' 66 lakhs respectively. There is no exceptional circumstances for
increase in remuneration.
VI. Affirmation: It is hereby affirmed that the remuneration paid
during the year under review is as per the Remuneration Policy of the Company.
B. Details pertaining to Remuneration as required 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 as amended by the Companies (Appointment and
Remuneration of Managerial Personnel) Amendment Rules, 2016:-
I. Names of the top ten employees of the Company in terms of
remuneration drawn and the names of employees who were employed throughout the FY22 and
were paid remuneration not less than f 1,02,00,000/-:
S,r* Name No. |
Remuneration received (f) |
Nature of employment |
Designation |
Qualifications & Experience |
Date of commencement of employment |
Age (Years) |
Last employment held |
1. Mr. Mahendra Nahata |
7,04,61,400 |
Contractual |
MD |
B.Com. (Hons.) 38 years |
October 01, 1992 |
62 |
Himachal Telematics Ltd. - Vice Chairman |
2. Mr. Vijay Raj Jain |
4,99,79,343 |
Permanent |
CFO |
CA, CS 34 years |
July 15, 2011 |
57 |
Teracom Ltd. - CFO |
3. Mr. Harshwardhan Pagay |
2,43,42,645 |
Permanent |
Executive President |
B.E, MBA 26 years |
October 22, 2012 |
50 |
Teracom Ltd. - CEO |
4. Mr. Jitendra Singh Chaudhary |
2,14,33,212 |
Permanent |
Executive President |
B.E. 26 years |
April 01,2017 |
48 |
DragonWave HFCL India Pvt. Ltd.- CEO |
5. Mr. Sunil Kumar Kulshrestha |
1,96,06,463 |
Permanent |
Executive President |
B.Sc. (H), M.A. 44 years |
January 01,2015 |
68 |
Parmesh Finlease Ltd. - Director |
6. Mr. Subodh Kumar Garg |
1,93,72,952 |
Contractual |
Executive Director |
B.E., M. Tech. 46 years |
October 01,2015 |
70 |
Infotel Business Solution Ltd. - Chief
Project Officer |
7. Mr. Nand Lal Garg |
1,75,01,108 |
Permanent |
President |
B.E. 36 years |
July 15, 2020 |
57 |
Indus Tower. - Head - Contract Management |
8. Mr. Prakash Chand Gulgulia |
1,63,00,303 |
Contractual |
Vice President |
B.Com 41 years |
April 01,2016 |
63 |
Infotel Business Solution Ltd. -
Vice-President |
9. Mrs. Neelu Chandra |
1,61,70,200 |
Permanent |
Vice President |
M. Ed 33 years |
June 01,2017 |
60 |
Elder Pharmaceutical Ltd. - General Manager |
10. Mr. Jayanta Dey |
1,51,05,730 |
Permanent |
Executive President |
BE 32 years |
March 08, 2021 |
57 |
IP Infusion - Chief Business Development |
II. Names of the employees who were employed for a part of FY22 and
were paid remuneration not less than f8,50,000/- per month:
Sr. Name No. |
Remuneration received (f) |
Nature of employment |
Designation |
Qualifications & Experience |
Date of commencement of employment |
Age (Years) |
Last employment held |
1. Mr. Rajesh Jain |
39,03,800 |
Permanent |
Executive President |
MBA. 26 years |
December 01,2021 |
49 |
A2Z Infra Engineering Ltd |
2. Mr. Santanu Bhattacharyya |
32,78,862 |
Permanent |
Executive President |
M.Tech 31 years |
December 06, 2021 |
56 |
Xilinx Design Engineering Director |
Notes:
i. The remuneration shown above comprises salary, allowances,
perquisites, performance linked incentive/ Ex-gratia, medical, Company's contribution to
provident fund and all other reimbursements, if any.
ii. None of the above employees is related to any Director of the
Company.
iii. None of above employees draws remuneration more than the
remuneration drawn by Managing Director and holds by himself or along with his spouse and
dependent children, not less than two percent of equity shares of the Company.
|