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BSE: 500183 Sector: Telecom
NSE: HFCL ISIN Code: INE548A01028
BSE 00:00 | 16 Apr 25.45 0.80






NSE 00:00 | 16 Apr 25.45 0.80






OPEN 24.80
VOLUME 1336496
52-Week high 34.75
52-Week low 8.70
P/E 22.52
Mkt Cap.(Rs cr) 3,269
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 24.80
CLOSE 24.65
VOLUME 1336496
52-Week high 34.75
52-Week low 8.70
P/E 22.52
Mkt Cap.(Rs cr) 3,269
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

HFCL Ltd. (HFCL) - Director Report

Company director report

Dear Members

Your Board of Directors has pleasure in presenting the 33rd AnnualReport on the business and operations of your Company together with the Audited FinancialStatements for the financial year ended 31st March 2020.


Your Company's financial performance (standalone and consolidated) forthe financial year ended 31st March 2020 is summarized below:




2019-20 2018-19 2019-20 2018-19
Revenue from Operations (Net) 3547.30 4366.20 3838.91 4737.79
Other Income 20.94 45.79 22.08 42.74
Total Income 3568.24 4411.99 3860.99 4780.53
Operating Expenses 2961.77 3859.60 3158.60 4137.63
Other Expenditure 158.31 166.20 186.22 184.69
Depreciation and Amortization expenses 30.13 17.52 41.95 26.97
Total Expenses 3150.21 4043.32 3386.77 4349.29
Profit before Finance Cost and Tax 418.03 368.67 474.22 431.24
Finance Cost 90.10 77.94 114.82 91.86
Share of net profits of joint ventures accounted for using equity method - - (1.05) (0.09)
Profit before Tax (PBT) 327.93 290.73 358.35 339.29
Tax Expense Net of MAT Credit Entitlement 124.10 106.71 121.01 107.03
Profit after Tax (PAT) 203.83 184.02 237.34 232.26
Attributable to:
Shareholders of the Company - - 227.25 219.91
Non-Controlling Interests - - 10.09 12.35
Opening Balance of Retained Earnings 872.09 763.37 868.55 723.94
Impact on account of Change in Accounting Policy :
Adoption of Ind AS-115 (1.13) (5.97) (1.13) (5.97)
Total Comprehensive Income for the year 203.83 184.02 - -
Transfer to Retained Earnings (out of DRR) 2.81 - 2.81 -
Amount available for appropriation 1077.60 941.42 1097.48 937.88
Appropriations :
Debenture Redemption Reserve (DRR) - - - -
Capital Redemption Reserve (CRR) - 60.37 - 60.37
Dividend on Equity Shares (Previous Year) 15.48 8.96 15.48 8.96
Closing Balance of Retained Earnings 1062.12 872.09 1082.00 868.55

During the FY20 total Consolidated Income of your Company is Rs 3861Crores as compared to Rs 4781 Crores during the previous year showing a decline of19.24%.

Your Company has achieved Consolidated EBIDTA of Rs 515 Crores in FY20from Rs 458 Crores in the previous year recording a growth of 12.45%. Profitabilityi.e. Consolidated PBT has grown by 5.6% to Rs 358 Crores in FY20 from Rs 339 Croresduring the previous year.

In FY20 your Company has a Consolidated PAT of Rs 237 Crores from Rs232 Crores in the previous year recording a growth of 2.16%.

Net Worth

The net worth of your Company has increased during the year underreview to Rs 1668 Crores from Rs 1442 Crores in the previous year.

Gross Debt

The consolidated Debt in FY20 stood at Rs 712 Crores as against Rs 590Crores in FY19.


In accordance with the provisions of Section 129 read with Schedule IIIto the Companies Act 2013 (hereinafter referred to as "the Act") and theCompanies (Accounts) Rules 2014 Regulation 33 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafterreferred to as "the Listing Regulations") and applicable IndianAccounting Standards the Audited Consolidated Financial Statements of the Company for theFY20 together with the Auditors' Report form part of this Annual Report.


The Board of Directors has decided to retain the entire amount ofprofits for the FY20 under Retained Earnings and has not transferred any amount to theGeneral Reserves during the year under review.


In wake of Covid-19 pandemic and consequent lockdown in the entireCountry each of the business sectors in the economy has been affected. Therefore inorder to maintain adequate liquidity and cash flow position in the Company your Board ofDirectors has decided to retain the profits in the Company and has not recommended anydividend for the financial year ended 31st March 2020.

The above decision is in accordance with the Company's DividendDistribution Policy. The Dividend declared for FY19 was paid to the eligible shareholderswithin prescribed time period.

Dividend Distribution Policy

As per Regulation 43A of the Listing Regulations top 500 listedcompanies based on the market capitalization shall formulate a Dividend DistributionPolicy.

Accordingly the Policy has been adopted by the Board of Directors ofthe Company to set out the parameters and circumstances that will be taken into account bythe Board in determining the distribution of dividend to its shareholders and/ orretaining profits earned by the Company.

The Dividend Distribution Policy is available on the Company's websiteat Distribution Policy.pdf and isalso provided as Annexure - A to this Report.

Investor Education and Protection Fund (IEPF)

In accordance with the applicable provisions of the Companies Act 2013read with the Investor Education and Protection Fund (Accounting Audit Transfer andRefund) Rules 2016 ("IEPF Rules") all unclaimed dividends are requiredto be transferred by the Company to the IEPF which remain unpaid or unclaimed for aperiod of seven years from the date of transfer to Unpaid Dividend Account.

Further according to IEPF Rules the shares on which dividend has notbeen claimed by the shareholders for seven consecutive years or more shall be transferredto the demat account of the Investor Education and Protection Fund Authority ("IEPFAuthority").

During the year under review no amount of the unclaimed/ unpaiddividend and any such share in the Company was due to be transferred to the IEPFAuthority.

The following table provides a list of years for which unclaimeddividends and their corresponding shares would become eligible to be transferred to theIEPF on the dates mentioned below:

Financial Year Dividend per Share ( Rs ) Date of declaration Due date for transfer Amount ( Rs ) (Unpaid as on March 31 2020)
2017-18 0.06 September 29 2018 December 04 2025 1039714.80
2018-19 0.10 September 28 2019 December 03 2026 1648237.00

Details of unpaid dividend for the financial year 2017-18 and 2018-19can be accessed from the website of the Company at and claim can be made bymaking request to the Company.

Details of Nodal Officer

The Company has designated Mr. Manoj Baid Vice-President (Corporate)& Company Secretary of the Company as a Nodal Officer for the purpose of IEPF.


Financial Statements of your Company and its subsidiaries for thefinancial year ended 31st March 2020 are prepared in accordance with Indian AccountingStandards (Ind-AS) as notified under Section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended from time to time.


During the FY20 your Company has not accepted any deposit within themeaning of Section 73 and 74 of the Act read with the Companies (Acceptance of Deposits)Rules 2014.


As on 31st March 2020 the Authorized Share Capital of your Companystood at Rs 760 Crores (Rupees Seven Hundred Sixty Crores only) divided into 510 Crores(Five Hundred Ten Crores) equity shares of face value of Rs 1/- (Rupee One) eachaggregating to Rs 510 Crores (Rupees Five Hundred Ten Crores only) and 2.50 Crores (TwoCrore Fifty Lakhs) Cumulative Redeemable Preference Shares (CRPS) of Rs 100/- (RupeesHundred) each aggregating to Rs 250 Crores (Rupees Two Hundred Fifty Crores only).

Paid-up Share Capital

As on 1st April 2019 the Paid-up Equity Share Capital of your Companystood at Rs 127.44 Crores comprising of 1274377194 equity shares of face value of Rs1/- each.

Further during the year under review the Warrants holders haveexercised their right of conversion and pursuant to exercise of conversion of 10000000Warrants outstanding as on 31st March 2019 the Company has allotted equal nos. of10000000 equity shares at a price of Rs 16/- per equity share (including a premium ofRs 15/- per share) upon receipt of balance 75% money from the Warrant holders againstsuch number of Warrants on preferential basis.

Consequent to the above the revised Paid-up Equity Share Capital ofyour Company stood at Rs 128.44 Crores comprising of 1284377194 equity shares of facevalue of Rs 1/- each as on 31st March 2020.

There are no outstanding Warrants due for conversion as on the date ofthis Report.

Your Company has not issued equity shares with differential rights asto dividend voting or otherwise.


The Management Discussion and Analysis Report for the year underreview as stipulated under Regulation 34(2)(e) of the Listing Regulations is presentedin a separate section forming part of this Annual Report.


Your Company is committed to benchmark itself with global standards forproviding good corporate governance. Your Board constantly endeavors to take the businessforward in such a way that it maximizes long term value for the stakeholders. The Companyhas put in place an effective corporate governance system which ensures that theprovisions of Listing Regulations are duly complied with.

A detailed report on the Corporate Governance pursuant to therequirements of the Listing Regulations forms part of this Annual Report.

A Certificate from the Secretarial Auditor of the Company confirmingcompliance of conditions of corporate governance as stipulated in Listing Regulations isprovided in the Report on Corporate Governance which forms part to the CorporateGovernance Report.


As stipulated under Regulation 34(2)(f) of the Listing Regulations theBusiness Responsibility Report describing the initiatives taken by the Company fromenvironmental social and governance perspective forms part of this Annual Report.


In terms of the SEBI (Share Based Employee Benefits) Regulations 2014("SEBI Regulations") as amended from time to time and with the objectiveto promote entrepreneurial behaviour among employees of the Company motivate them withincentives and reward their performance with ownership in proportion to the contributionmade by them as well as align the interest of the employees with that of the Company"Himachal Futuristic Communications Limited Employees' Long Term IncentivePlan-2017” ("HFCL Plan 2017”) was approved by the Board of Directors ofyour Company on 26th August 2017 which was further approved by the members of theCompany in their 30th Annual General Meeting held on 25th September 2017.

The HFCL Plan 2017 comprises of the following three subsets:

1. Employee Stock Option Plan (ESOP) under which Options would begranted

2. Restricted Stock Units Plan (RSUP) under which Units would begranted

3. Employee Stock Purchase Scheme (ESPS) under which shares would beissued

During the financial year ended 31st March 2020 your Company has notgranted any ESOs and RSUs in terms of the HFCL Plan 2017.

Applicable disclosures as stipulated under the SEBI Regulations withregard to the HFCL Plan 2017 are provided as Annexure- B to this Report.

Your Company has received a Certificate from M/s Oswal Sunil &Company Statutory Auditors (Firm Registration No. 016520N) that the HFCL Plan 2017 forgrant of stock options has been implemented in accordance with the SEBI Regulations andthe resolution passed by the members in their 30th Annual General Meeting held on 25thSeptember 2017.

The said Certificate would be placed at the ensuing Annual GeneralMeeting for inspection by the members.

The Nomination Remuneration and Compensation Committee of the Board ofDirectors inter-alia administers and monitors the HFCL Plan 2017 of your Company.


As on 31st March 2020 your Company had six subsidiaries viz.

1. HTL Limited

2. Polixel Security Systems Private Limited

3. Moneta Finance Private Limited

4. HFCL Advance Systems Private Limited

5. Raddef Private Limited and

6. DragonWave HFCL India Private Limited (DHIPL).

During the year under review your Company had mutually terminated theJoint Venture Agreement which was entered with DragonWave Inc. (now known as DragonWave-XCanada Inc.) and the Company on October 18 2010.

Pursuant to termination of the aforesaid Joint Venture Agreement theCompany has acquired the balance stake of 50.10% (comprising of 3507000 equity shares offace value Rs 10/- each) held in DHIPL from DragonWave Pte. Ltd. Singapore at a totalconsideration of Rs 2.25 crores thereby making DHIPL a wholly-owned subsidiary of theCompany w.e.f. December 17 2019.

The Company regularly monitors the performance of these companies.

There has been no material change in the nature of the business of thesubsidiaries.

A statement containing the salient features of the financial statementsof subsidiary companies of the Company in the prescribed Form AOC-1 forms a part ofthe Consolidated Financial Statements (CFS) in compliance with Section 129(3) and otherapplicable 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 thesubsidiaries 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 thefinancial statements of the subsidiaries are available for inspection by the members atthe Registered Office of the Company during business hours on all days except SaturdaysSundays and public holidays up to the date of the ensuing AGM. Any member desirous ofobtaining a copy of the said financial statements may write to the Company Secretary atHFCL

Limited 8 Commercial Complex Masjid Moth Greater Kailash - II NewDelhi - 110048 and the same shall be sent by post.

The financial statements including the CFS and all other documentsrequired to be attached to this Report have been uploaded on the website of the Company

Material Subsidiaries

The Company has adopted a 'Policy for determining MaterialSubsidiaries' as per requirements stipulated in Explanation to Regulation 16(1)(c) of theListing Regulations.

During the year under review there was no change in the Policy fordetermining Material Subsidiaries.

The said policy may be accessed on the website of the Company at

The Company has no material subsidiary company as on 31st March 2020.


In accordance with the provisions of Section 152 of the Act and theArticles of Association of the Company Mr. Mahendra Pratap Shukla (DIN: 00052977)Director (Non-Executive) and Chairman is liable to retire by rotation at the ensuingAnnual General Meeting (AGM) and being eligible offers himself for re-appointment.

The Board of Directors of the Company on the recommendations of theNomination Remuneration and Compensation Committee had appointed Mr. Bharat Pal Singh(DIN: 00739712) as an Additional Director in the category of Independent Director w.e.f.January 212020 in terms of provisions of Section 149 and 161 of the Act and Regulation17 of the Listing Regulations and the Articles of Association of the Company.

In terms of the provisions of Section 161(1) of the Act Mr. Bharat PalSingh holds office up to the date of ensuing AGM of your Company.

The Company has received a requisite Notice from a member under Section160 of the Act proposing the appointment of Mr. Bharat Pal Singh as a Director of theCompany.

Your Board recommends the appointment of Mr. Bharat Pal Singh as aNon-Executive Independent Director of the Company for one term of 3 (three) consecutiveyears with effect from January 212020 to January 20 2023 pursuant to Section 149 andother applicable provisions of the Act and the rules made thereunder. He will not beliable to retire by rotation.

Brief resume nature of expertise disclosure of relationships betweendirectors inter-se details of directorships and Committee membership held in othercompanies of the Directors proposed to be appointed/ reappointed along with theirshareholding in the Company as stipulated under Regulation 36 of the Listing Regulationsand Secretarial Standard on General Meetings (SS-2) issued by the Institute of CompanySecretaries of India is appended as an Annexure to the Notice of the ensuing AGM.

Appropriate resolutions for re-appointment / appointment of Directorsare being placed for your approval at the ensuing AGM.


During the FY20 Mr. Ved Kumar Jain (DIN: 00485623) has resigned as anIndependent Director of the Company w.e.f. 26th December 2019.

Your Board of Directors places on record its sincere appreciation forthe support and valuable guidance given by Mr. Ved Kumar Jain during his tenure asNon-Executive Independent Director of the Company.

Key Managerial Personnel

During the year under review Mr. Mahendra Nahata Managing DirectorMr. Vijay Raj Jain Chief Financial Officer and Mr. Manoj Baid Vice-President (Corporate)& Company Secretary continue to be the Key Managerial Personnel of your Company inaccordance 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 thatit has not made any default under Section 164(2) of the Act as on 31st March 2020.

Declaration by Independent Directors

The Company has received declarations from all the IndependentDirectors confirming that they meet the criteria of independence as prescribed under theprovisions of the Act read with the Schedules and Rules issued thereunder as well asclause (b) of sub-regulation (1) of Regulation 16 of the Listing Regulations (includingany statutory modification(s) or re-enactment(s) thereof for the time being in force) andthat they are independent of management.

In terms of Regulation 25(8) of the Listing Regulations theIndependent Directors have confirmed that they are not aware of any circumstance orsituation which exist or may be reasonably anticipated that could impair or impact theirability to discharge their duties.

The Independent Directors have also confirmed that they have compliedwith the Company's Code of Conduct.

In the opinion of the Board Independent Directors fulfil theconditions specified in the Act Rules made thereunder and Listing Regulations and areindependent of the management.

Familiarisation Programme for Independent Directors

The details of programmes for familiarization of Independent Directorswith the Company their roles rights responsibilities in the Company and related mattersare put up on the website of the Company at the web-link:


The information required under Section 197(12) of the Act read withRules 5(1) 5(2) & 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 (including any statutory modification(s) or re-enactment(s) thereoffor the time being in force) in respect of Directors/Employees of the Company is set outin Annexure-C to this Report.

The remuneration paid to the Directors is in accordance with theRemuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19of the Listing Regulations (including any statutory modification(s) or re-enactment(s)thereof for the time being in force).

Disclosure under Section 197(14) of the Companies Act 2013

The Managing Director of your Company does not receive remuneration orcommission from any of the subsidiaries of the Company.

Remuneration Policy

Pursuant to provisions of Section 178 ofthe Act and the ListingRegulations the Nomination Remuneration and Compensation Committee ('NRC Committee') ofyour Board has formulated a Remuneration Policy for the appointment and determination ofremuneration of the Directors Key Managerial Personnel Senior Management Personnel andother employees of your Company.

The NRC Committee has also developed the criteria for determining thequalifications positive attributes and independence of Directors and for making paymentsto Executive and Non-Executive Directors and Senior Management Personnel of the Company.

The detailed Policy is available on the Company's website at Policy.pdf and the salientaspects covered in the Remuneration Policy have been outlined in the Corporate GovernanceReport which forms part of this Report.


Six meetings of the Board of Directors were held during the FY20.

The intervening gap between any two consecutive meetings of the Boardwas within the stipulated time frame prescribed under the Act and the Listing Regulations.Details of meetings held and attendance of directors are mentioned in Corporate GovernanceReport which forms part of this Report.

Separate Meeting of Independent Directors

In terms of requirements of Schedule IV to the Act and Regulation 25 ofthe Listing Regulations a separate meeting of the Independent Directors was held on 20thMarch 2020 for the FY20.

Since Mr. Bharat Pal Singh was newly inducted on the Board (w.e.f.21st January 2020) the meeting was attended by Mr. Surendra Singh Sirohi and Dr. (Ms.)Tamali Sengupta.

Board Committees

Your Company has constituted several Committees of the Board which havebeen established as part of the best corporate governance practices and are in compliancewith the requirements of the relevant provisions of applicable laws and statutes.

As on 31st March 2020 your Board has 05 (five) mandatory Committeesnamely

1) Audit Committee

2) Nomination Remuneration & Compensation (NRC) Committee;

3) Corporate Social Responsibility (CSR) Committee;

4) Stakeholders' Relationship Committee (SRC) and

5) Risk Management Committee (RMC).

The details with respect to the composition powers roles terms ofreference number of meetings etc. of the Committees held during the FY20 and attendanceof the Members at each Committee Meeting are provided in the Corporate Governance Reportwhich forms part of this Report.

All the recommendations made by the Committees of the Board includingthe Audit Committee were accepted by the Board.

Audit Committee

As on 31st March 2020 the Audit Committee comprises of 04 (four)members namely Mr. Bharat Pal Singh Mr. Surendra Singh Sirohi Dr. (Ms.) TamaliSengupta Independent Directors and Mr. Arvind Kharabanda Non-Executive Director.

Mr. Bharat Pal Singh Independent Director is the Chairman of the AuditCommittee.

All members of the Audit Committee are financially literate and haveexperience in financial management.


The Companies Act 2013 mandates formal annual evaluation by the Boardof its own performance and that of its Committees and individual Directors. Schedule IV tothe Act provides that the performance evaluation of Independent Directors shall be done bythe entire Board of Directors excluding the Directors being evaluated.

Pursuant to the provisions of the Act read with relevant rules issuedthereunder Regulation 17(10) of the Listing Regulations and the Circular issued by SEBIon 5th January 2017 with respect to Guidance Note on Board Evaluation the evaluation ofthe annual performance of the Directors/ Board/ Committees was carried out for the FY20.

The parameters for the performance evaluation of the Board inter-aliainclude performance of the Board on deciding long term strategy rating the compositionand mix of Board members discharging of governance and fiduciary duties handlingcritical and dissenting suggestions etc.

The performance of the Board was evaluated after seeking inputs fromall the Directors on the basis of above parameters. The performance of the Committees wasevaluated after seeking inputs from the Committee members on the basis of criteria such asthe composition of Committees effectiveness of Committee meetings etc.

The Nomination Remuneration and Compensation Committee reviewed theperformance of the Individual Directors the Committees of the Board and the Board as awhole. A questionnaire for the evolution of the Board its Committees and the individualmembers of the Board (including the Chairperson) covering various aspects of theperformance of the Board and its Committees including composition and quality roles andresponsibilities processes and functioning adherence to Code of Conduct and Ethics andbest practices in corporate governance was sent to the Directors.

The Board of Directors reviewed the performance of the IndependentDirectors. Performance Evaluation was done on the basis of criteria such as thecontribution of the individual director to the Board and Committee meetings likepreparedness on the issues to be checked meaningful and constructive contribution andinputs in meetings etc.

In a separate meeting of the Independent Directors performance ofNon-Independent Directors the Board as a whole and the Chairman of the Company wasevaluated taking into account the views of Executive Directors and Non-ExecutiveDirectors.

The Directors expressed their satisfaction with the evaluation process.

The details of the evaluation process are set out in the CorporateGovernance 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/sOswal Sunil & Company Chartered Accountants (FRN: 016520N) were appointed asStatutory Auditors for one term of 05 (five) consecutive years at the 30th Annual GeneralMeeting of the Company held on 25th September 2017 for auditing the accounts of theCompany from the financial year 2017-18 to 2021-22.

The requirement to place the matter relating to appointment of auditorsfor ratification by members at every AGM has been done away by the Companies (Amendment)Act 2017 with effect from 7th May 2018. Accordingly no resolution is being proposed forratification of appointment of Statutory Auditors at the ensuing AGM and a note in respectof the same has been included in the Notice convening ensuing AGM.

The Statutory Auditors have confirmed that they are not disqualifiedfrom continuing as Statutory Auditors of the Company.

The Auditors' Report does not contain any qualification reservation oradverse remark.

Further there were no frauds reported by the Statutory Auditors to theAudit Committee or the Board under Section 143(12) of the Act.

Secretarial Auditors & their Report

Pursuant to provisions of Section 204 of the Act read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (asamended or re-enacted from time to time) your Company had appointed Mr. Baldev SinghKashtwal Company Secretary in wholetime practice having COP No. 3169 and Membership No.F-3616 for conducting the Secretarial Audit of your Company for the FY20.

The Secretarial Audit Report in prescribed form MR-3 issued by theSecretarial Auditor is annexed herewith as Annexure-D to this Report.

The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.

Cost Records and Cost Audit

Your Company has maintained cost records as prescribed under Section148 of the Act and the relevant rules made thereunder.

Requirement of Cost Audit as prescribed under the provisions of Section148 of the Act are not applicable for the business activities carried out by the Company.


The Board of Directors of your Company has formulated a Whistle-BlowerPolicy which is in compliance with the provisions of Section 177(9) & (10) of the Actand Regulation 22 of the Listing Regulations.

The Company through this Policy envisages to encourage the Directorsand employees of the Company to report to the appropriate authorities any unethicalbehaviour improper illegal or questionable acts deeds actual or suspected frauds orviolation of the Company's Code of Conduct for Directors and Senior Management Personnel.

During FY20 no complaint was received and no individual was deniedaccess to the Audit Committee for reporting concerns if any.

The Policy on Vigil Mechanism / Whistle-Blower Policy may be accessedon the Company's website at the link:

Brief details of establishment of Vigil Mechanism in the Company isalso provided in the Corporate Governance Report which forms part of this Report.


CARE Ratings Limited vide its letter dated January 29 2020 hasre-affirmed the credit rating for the Long Term Bank facilities of the Company to CARE AMinus; (Single A Minus) and outlook changed to negative from stable. The credit rating forthe short term bank facilities were also re-affirmed as CARE A2+ (A Two Plus).


The extract of the Annual Return in Form MGT-9 as stipulated underSection 92(3) and Section 134(3)(a) of the Act read with the Rule 12 of the Companies(Management and Administration) Rules 2014 is annexed herewith as Annexure-E tothis Report.

Annual Return i.e. E-form MGT-7 for the FY20 shall be filed by theCompany with the Registrar of Companies Himachal Pradesh within the stipulated periodand the same can also be accessed thereafter on the Company's website at:

Annual Return i.e. E-form MGT-7 for the FY19 is already made availableon the website of the Company.


Details of loans guarantees and investments as on 31st March 2020as stipulated under Section 186 of the Act read with the Companies (Meetings of Board andits Powers) Rules 2014 are as follows:-

Particulars Amount ( Rs in Crores )
Loans given 31.50
Guarantees given 140.16
Investments made 71.03

Loans given Guarantees provided and Investments made during the FY20:

Name of the entity Relation Amount ( Rs in Crores) Particulars of Loans Guarantees & Investments Purpose for which the Loans Guarantees and Investments are proposed to be utilized
Raddef Private Limited Subsidiary 0.009 Investment The acquisition would result in benefit of operational synergies and the Company will be able to explore untapped growth in the Telecom and Defence business verticals of the Company.
DragonWave HFCL India Private Limited Subsidiary 2.25 Investment The acquisition would result in benefit of operational synergies and the Company will be able to explore untapped growth in the Telecom business vertical of the Company.
Nivetti Systems Private Limited Unrelated company 3.99 Investment The acquisition would result in increasing Company's offerings of best in class networking and cyber security products & solutions resulting in growth in its Telecom IT Cyber Security & Surveillance business.

For more details please refer Note 7 & 8 to the StandaloneFinancial Statements of the Company.


During the year under review your Company has revised its Policy onDealing with and Materiality of Related Party Transactions in accordance with theamendments to the applicable provisions of the Act and Listing Regulations. The keychanges include inter-alia threshold limits for determining materiality.

The said Policy is also available on the website of the Company at theweb-link:

During the year under review all contracts/ arrangements/ transactionsentered into by the Company with related parties were in ordinary course of business andon arm's length basis.

The Company has not entered into any contracts/ arrangements/transactions with related parties which qualify as material in accordance with the Policyof the Company on materiality of related party transactions. Thus there are notransaction required to be reported in Form AOC-2 pursuant to Section 134(3)(h) of the Actread with Rule 8(2) of the Companies (Accounts) Rules 2014.

All transactions with related parties were reviewed and approved by theAudit Committee and are in accordance with the Policy on Related Party Transactionsformulated by the Company.

There are no materially significant related party transactions that mayhave potential conflict with interest of the Company at large.

There are no transactions with the person(s) or entities forming partof the Promoter(s) / Promoter(s) Group which individually hold 10% or more shareholdingin the Company.

The details of the related party transactions as per Indian AccountingStandards (IND-AS) - 24 are set out in Note 50 to the Standalone Financial Statements ofthe Company.


The details of energy conservation technology absorption and foreignexchange earnings and outgo as required under Section 134(3)(m) of the

Act read with the Rule 8 of the Companies (Accounts) Rules 2014 areannexed herewith as Annexure - F to this Report.


The Company has been proactively carrying out CSR activities since morethan two decades.

The Company is undertaking CSR activities through its RegisteredSociety i.e. HFCL Social Services Society ("HSSS”) established in the year 1996.

In compliance with requirements of Section 135 of the Act the Companyhas laid down a Corporate Social Responsibility (CSR) Policy. The CSR Policy is availableon the website of the Company and may be accessed at the web- link:

The composition of the CSR Committee brief contents of CSR Policyunspent amount and reason thereof if any and report on CSR activities carried out duringthe FY 20 in the format prescribed under Rule 9 of the Companies (Corporate SocialResponsibility Policy) Rules 2014 is annexed herewith as Annexure - G.

For other details regarding the CSR Committee please refer to theCorporate Governance Report which forms part of this Report.


A. Change in nature of business

The Company has not undergone any change in the nature of the businessduring the FY20.

B. Material changes and commitments affecting the financial position ofthe Company

There are no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the FY20 and the date ofthis Report.

Further as we are aware that the outbreak of Covid-19 Pandemic hasimpacted businesses not only in India but to all economics in the world. Pursuant todirectives of SEBI vide Circular No. SEBI/HO/CFD/CMDI/QR/P/2020/84 dated May 20 2020 theCompany vide its Corporate Announcement made to stock exchanges on June 5 2020 hasalready disclosed the impact of Covid-19 on business performance and finance of theCompany.

Our production facilities and turnkey execution remained closed undernationwide lockdown from 25th March 2020. This has affected production at ourmanufacturing facilities and execution of projects at various locations. Our plants haveprogressively resumed operations from 5th April 2020 at Goa and from 3rd May 2020 atHyderabad. Activities at our Solan Plant have also started. Operations at our subsidiary's(HTL Limited) plants also resumed from 11th April at Chennai and from 23rd April at Hosur.We have also started execution of field projects gradually wherever the permissions havebeen received and more sites are getting opened up with further relaxations by thegovernments.

Profitability got impacted due to disruptions in production andexecution of projects consequent to the nationwide lockdown and disruption in supplychain. In order to mitigate the impact of Covid on profitability the Company has takenseveral measures for rationalising the operating cost including salary cut restructuringof emoluments with increased performance linked component reduction in administrativecosts resource optimisation etc. There has been no impact on the assets of the Company.None of the assets are impaired. We have no threat in meeting our debt and other financialobligations.

The impact on the Company seems to be limited and short term and thattoo resulting into deferment of revenue and realisations. There is no significant impactregarding capital and financial resources. The Company stands adequately funded to aptlysupport its operating plan. It is difficult to estimate the future impact of Covid-19. Wecontinue to keep a close eye on the situation for ensuring continued corrective actionwherever required.

The impact of Covid-19 is also mentioned at Note No. 41 to thestandalone Financial Statements for FY 20.


There is no significant / material order passed by the RegulatorsCourts Tribunals affecting the going concern status and the Company's operations infuture.


The Company has in place a Policy on Prevention of Sexual Harassment atWorkplace in line with the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 and the rules made thereunder.

An Internal Complaints Committee (ICC) has been set up to redresscomplaints if any received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this Policy.

ICC of each workplace of the Company has also filed Annual Return forthe calendar year 2019 at their respective jurisdictional office as required underSection 21(1) of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) 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 duringthe FY20.


The Company is well known with its abbreviated name "HFCL”which stands for the full name viz. "Himachal Futuristic Communications Limited”

The present name of the Company gives impression that the activities ofthe Company are limited to the state of Himachal Pradesh only. However this is far fromtruth. Today the Company's presence is not only on PAN India level but also beyond theterritory of the Nation.

In view of building new brand image the name of the Company has beenchanged from "Himachal Futuristic Communications Limited” to "HFCLLimited” which is a blend of its present full name.

The new name of the Company contains word 'HFCL' as the Company is wellknown by this abbreviated name.

Your Board of Directors at its meeting held on 15th May 2019 hadapproved the change in name of the Company. As per the provision of the Act approval ofthe members had been obtained for changing the name of the Company by way of passing aSpecial Resolution at the 32nd Annual General Meeting of the Company held on 28thSeptember 2019.

The Company has then made an application for the change of name tothe Registrar of Companies Himachal Pradesh and the Registrar of Companies HimachalPradesh has approved the application and has granted a new Certificate of Incorporationdated October 01 2019 pursuant to change of name to "HFCL Limited” effectivefrom October 012019.


Pursuant to the requirements under Section 134(3)(c) of the Act theDirectors confirm that:

(a) in the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures;

(b) the Directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year 31st March 2020 and of the profits of the Company for that period;

(c) the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(d) the Directors had prepared the annual accounts on a going concernbasis; and

(e) the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.

(f) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.


The equity shares of your Company are presently listed on the BSELimited ('BSE') and the National Stock Exchange of India Limited ('NSE').

The Company has paid annual listing fee for the FY21 to the BSE Limitedand the National Stock Exchange of India Limited.


Your Company's Scrip has come under compulsory dematerialization w.e.f.29th November 1999 for Institutional Investors and w.e.f. 17th January 2000 for allInvestors. So far 99.96% of the equity shares have been dematerialized.

The ISIN allotted to the equity shares of the Company is INE548A01028.


During the year under review the Company has not failed to implementany Corporate Action within the specified time limit.


Pursuant to the provisions of Section 118(10) of the Act the Companyhas complied with the applicable provisions of the applicable Secretarial Standards issuedby the Institute of Company Secretaries of India (ICSI).


The Financial and Statutory Data presented in this Report is in linewith the requirements of the Companies Act 2013 (including the rules made thereunder)Indian Accounting Standards and the Secretarial Standards.


The Financial Information is reported for the period 1st April 2019 to31st March 2020. Some parts of the Non-Financial Information included in this Board'sReport are provided as on the date of this Report.


Statements in the Management Discussions & Analysis Reportdescribing the Company's projections estimates expectations or predictions may be'forward looking statements' within the meaning of applicable securities laws andregulations. Actual results could differ materially from those expressed or implied.Important factors that would make a difference to the Company's operations include demandsupply conditions raw material prices changes in government regulations tax regimes andeconomic developments within the country and abroad and such other factors.


Your Directors wish to place on record their sincere appreciation forthe devoted services of all the employees and workers at all levels and for theirdedication and loyalty which has been critical for the Company's success.


Your Company's organizational culture upholds professionalismintegrity and continuous improvement across all functions as well as efficient utilizationof the Company's resources for sustainable and profitable growth.

Your Directors wish to place on record their appreciation for thevaluable co-operation and support received from the Government of India various StateGovernments the Banks and other stakeholders such as shareholders customers andsuppliers among others. The Directors look forward to their continued support in future.

The Directors thank the Central Government Government of HimachalPradesh Government of Goa Government of Telangana IDBI Bank Limited State Bank ofIndia Oriental Bank of Commerce Punjab National Bank Bank of Baroda Union Bank ofIndia United Bank of India Yes Bank Limited ICICI Bank Limited and other Banks for allco-operations facilities and encouragement they have extended to the Company.

Your Directors acknowledge the continued trust and confidence you havereposed in the Company.

For and on behalf of the Board
Mahendra Pratap Shukla
Place: New Delhi Chairman
Date: August 17 2020 DIN:00052977