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Hindustan Construction Company Ltd.

BSE: 500185 Sector: Infrastructure
NSE: HCC ISIN Code: INE549A01026
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OPEN 14.37
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OPEN 14.37
CLOSE 14.38
VOLUME 2076229
52-Week high 22.70
52-Week low 10.54
Mkt Cap.(Rs cr) 2,161
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Hindustan Construction Company Ltd. (HCC) - Director Report

Company director report


The Members of Hindustan Construction Company Ltd.

1. Report

Your Directors are pleased to present the 96th Annual Reporttogether with the Audited Financial Statements for the year ended March 31 2022.

2. Financial Highlights ( As per IND AS)

Year ended 31 March 2022

Year ended 31 March 2021
Income from Operations _ 4666.28 _ 2589.74
Profit before Interest Depreciation Exceptional Items _ 788.92 _ 299.62
Other Income and Tax
Less: Finance Costs 948.80 _ 829.89 _
Depreciation 93.64 _ 91.06 _
Exceptional Item - (1042.44) 274.03 (1194.98)
Add: Other Income _ 80.24 _ 52.64
Profit /(Loss) before Tax _ (173.28) _ (842.72)
Less: Tax Expense _ (20.18) _ (276.27)
Profit/(Loss) after Tax _ (153.10) _ (566.45)
Add: Other Comprehensive Income / Loss _ 7.86 _ 6.89
Total Comprehensive income carried to Other Equity _ (145.24) _ (559.56)

3. Dividend

In view of the losses incurred by the Company your Directors have notrecommended any dividend for the financial year ended March 31 2022.

4. Strategic Development

HCC has undertaken several initiatives to strengthen its balance sheetand streamline operations for accelerated project execution that is reflected in theperformance for FY 2021-22. Some of these initiatives are explained below:

NHAI Conciliations & Realisation of BOT Asset Sale

In FY 2020-21 the Company had initiated a conciliation process withNHAI to generate liquidity in the face of prolonged litigations and their associatedcosts. The Company successfully completed five conciliations within its PPP/BOT arm HCCConcessions (HCON) and one conciliation in HCC thereby receiving a total sum of ` 1849crore. In September 2020 the Company completed the sale of its largest BOT asset FarakkaRaiganj Highways Ltd. to Cube Highways and Infrastructure V Pte. Ltd. (Cube) for anenterprise value of ` 1508 crore generating substantial liquidity for the group.

In February 2022 HCON executed a binding term sheet to sell itsBaharampore-Farakka Highways Limited asset to Cube at an enterprise value of ` 1279crore. Furthermore HCON will be entitled to a material revenue share for the life of theconcession. The transaction is subject to closing adjustments customary due diligence andapprovals including from the NHAI and the lenders.

Strategic Developments at HCC Infrastructure

In August 2021 an exit was provided to the Xander Group which held a14.5% stake in HCC Concessions since 2011. Thereafter 100% of the economic interest ofHCON vested with the Company. In addition HCC Infrastructure group of companies becamedebt free after closing all loans with Yes Bank Ltd. in September 2021.

In the month of November 2021 scheme of merger of HCC Concessions LtdHCC Power Ltd Dhule Palesnar Operation & Maintenance Ltd and HCC Power Ltd with HCCInfrastructure Company Ltd U/s 230 to 232 of the Companies Act 2013 has been filed withNCLT in order to reorganize the legal entities in the group structure to ensure optimizedcorporate holding structure and reduction in the multiplicity of legal and regulatorycompliances at optimized cost.

Debt Resolution Plan

The carve-out of a material portion of HCC?s debt along withcommensurate award assets to an SPV results in a long-awaited solution to theasset-liability mismatch faced by HCC on account of delayed realization of its arbitrationawards visa-vis Government Agencies. The Company has received final board approvals fromall its lenders and achieved a closure of all documentation. Delays in approvals fromLenders and the impact of COVID19 had led to an inordinate delay in plan execution withexpected completion in Q2 FY 2022-23. The focus of HCC is now squarely on growth as itexpects to secure new orders with full access to its working capital and bonding limits.

Under this debt resolution plan HCC will transfer up to `4000 croreworth of liability to subsidiary Prolific Resolution Pvt Ltd. (SPV). It will also transferthe economic interest in arbitration awards and claims of up to `9200 crore to the SPV.The Board approved the plan on 27 May 2021 subject to necessary approvals.

This SPV will have an external investor controlling atleast 51% and HCCholding balance shares. The SPV debt being significantly over-collateralised is expectedto be fully serviced from its own receivables. The underlying arbitration awards carryinterest which will appropriately meet the SPV lenders? liabilities that also accrueinterest. The return on investment to the identified investor entity will be capped andHCC will extend its corporate guarantee to lenders of SPV which have back ended repaymentschedule starting FY 2026-27. On repayment of the SPV liability it is expected that thesurplus awards and claims will flow back to the benefit of HCC which is expected to bematerial in value.

The Plan also entails divestment of identified non-core assets in HCCand conciliation/ realization of identified Awards and Claims (remaining in HCC aftercarve out) to the tune of `1549 crore which will be utilized for operations and growth.

Execution of Arbitration Awards

Consequent to the amendments to the Arbitration & Conciliation Act1996 (as amended in 2015) together with the Supreme Court of India setting aside Section87 of the Arbitration and Conciliation Act there would henceforth not be any automaticstay on the execution of Arbitration Awards. Earlier a stay was granted at the merefiling of a challenge to an Award and would sometimes continue for years until the Courthad time to hear the matter. Today due to HCC?s efforts in the Supreme Court allAwards may be executed resulting in the deposit/collection of monies.

Furthermore due to various pro-business policy frameworks by Govt weexpect Arbitration Awards? realization to be swifter leading to more efficientdispute resolution in the long run.

To avoid litigations the GOI in the Union Budget has proposed aconciliation mechanism for resolving disputes in the construction industry. Para 135 ofBudget provides as under: 135. To have ease of doing business for those who deal withGovernment or CPSE?s and carry out Contracts I propose to set up a Conciliation

Mechanism and mandate its use for quick resolution of Contractualdisputes. This will instil confidence in private sector investors and contractors.

This mechanism is likely to spur private investment in theinfrastructure sector which is considerably problematic due to the mechanical challengingof awards and long delays in dispute resolution. The above mechanism-specific mandate tothe CPSEs will go a long way in helping the Contractors and the Govt agencies to ensurethe infrastructure projects are completed with minimum delays as the disputes would besettled and the money would be available during the performance of the Contracts.

5. COVID-19-Impact on Business operations

During the year project performance was affected due to variousrestrictions imposed by Government authorities due to the 2nd wave of COVID-19and the new variant Omicron. Remobilizing the required manpower at Projects andstreamlining the supply chain management remained challenging. Despite the abovechallenges projects have made additional efforts to remobilize the required workmen andstrengthen the supply chain management with improved vendor management. Though clientshave agreed to sanction the extension of time as per Government guidelines most clientsare yet to sanction payment for compensation for the lockdown period and the 2ndwave of COVID-19.

6. Share Capital of the Company

The present paid-up Equity Share Capital of the Company is`1513028244/- comprising of 1513028244 Equity Shares having face value of ` 1/-each.

7. Operations

The turnover of the Company during financial year 2021-22 is ` 4666.28crore as compared to ` 2589.74 crore during financial year 2020-21.

During the year under review the Company has secured three contractsaggregating ` 3100 crore (The Company?s Share ` 1558 crore) in joint venture.

The total balance value of works on hand as on March 31 2022 is `15967 crore.

Operations of Subsidiaries:

i) HCC Infrastructure Company Limited

HCC Infrastructure Company Limited is a wholly owned subsidiary of HCCLimited. HCC Infrastructure Company Limited has 100% economic interest in HCC ConcessionsLimited (HCON).

HCON has developed a premium portfolio of ~`7000 crore of road assetsunder India?s National Highway Development Program on DBFOT (Design Build FinanceOperate and Transfer) basis. Baharampore-

Farakka Highways Ltd (BFHL) completed an additional stretch of 14.35 kmand consequently its toll rates were enhanced by ~20% from May 14 2021 onwards. Despitethe impact of COVID19 in FY 2021-22 and certain restrictions imposed by the StateGovernment the traffic grew ~12% with the average daily collection being `35.3 lakh.

During FY 2021-22 Raiganj-Dalkhola Highways Ltd (RDHL) a 100%subsidiary of HCON received 2 arbitration awards accumulating to ~`873 crore in respectof termination payment and delay cost claims. NHAI has challenged the Termination paymentAward under Section 34 of the Arbitration & Conciliation Act in Delhi High Court.

In August 2021 an exit was provided to the Xander Group which held a14.5% stake in HCC Concessions since 2011. Thereafter HCC Infrastructure has 100%economic interest in HCON.

In September 2021 HCC Infrastructure group of companies closed all itsloans with Yes Bank Ltd thereby ensuring HCC Infrastructure Group is debt free.

In the month of November 2021 scheme of merger of HCC Concessions LtdHCC Power Ltd Dhule Palesnar Operation & Maintenance Ltd and HCC Power Ltd with HCCInfrastructure Company Ltd U/s 230 to 232 of the Companies Act 2013 has been filed withNCLT in order to reorganize the legal entities in the group structure to ensure optimizedcorporate holding structure and reduction in the multiplicity of legal and regulatorycompliances at optimized cost.

In February 2022 HCON executed a binding term sheet in respect of 100%stake sale of BFHL to Cube Highways and Infrastructure V Pte. Ltd at an enterprise valueof `1279 crore reflecting an equity valuation of `600 crore. In addition to the equityvalue `200 crore of earnout is payable in May 2024 contingent on achieving revenuethresholds. Furthermore HCON will be entitled to a material revenue share for the life ofthe concession. The transaction is subject to closing adjustments customary due diligenceand approvals including from the NHAI and the lenders.

During FY 2021-22 HCON began process of rebuilding its BOT portfoliowith a focus on new project development.

ii) Steiner AG Switzerland

Steiner AG HCC?s wholly-owned subsidiary is a leading Swiss realestate service provider with a focus on project developmen and construction.

The business is primarily divided into four offerings.

First the primary business of the Company is real estate developmentincluding long-standing brownfield projects and redevelopment projects. The focus is ondeveloping projects that will have a market in the future.

Second Steiner is involved in General and Total

Contracting where it provides complete turnkey building services fromdesign to construction in French-speaking Switzerland.

Third Steiner is evolving a model of developing

financial vehicles that will fund real estate development and isworking on partnerships with funds.

Fourth Steiner established the new business field

"Steiner Digital" for digital collaboration platforms servingproperties? entire life cycles.

Some of the major projects being executed by Steiner AG are:

Construction of Glasi-quarter a new urban district in B?lach with500-plus apartments a residential and care centre a hotel and over 20000 m? oflight-industrial and service-sector units worth approx. CHF 350 million (`2825.55crore).

Osiris project in Echallens a new eco-district worth approx. CHF 115million (`928.4 crore) involving the construction of 15 buildings with a total of 410apartments.

Manegg Mitte development in Zurich worth approx. CHF 140 million(`1130.22 crore) comprising two residential buildings with 151 owner-occupied apartmentsand a third new-build with 101 cooperative apartments and light-industrial units.

Gupfengarten residential development in

Niederweningen worth CHF 50.5 million (`407.69 crore) including theconstruction of 36 single-family houses and three multi-family blocks with a total of 21apartments for owner occupancy.

Steiner AG reported revenues of CHF 754 million ( ` 6083 crore) in thefinancial year 2021-22 as compared to CHF 705 million (`5411 crore) in the previous yearand a profit of CHF 39 million (`315 crore) as compared to a net profit of CHF 3.7 million` ( 28 crore) in the previous year. The Company secured fresh orders worth CHF 549 million(`4431 crore). The order book stood at CHF 996 million (`8044 crore) at the end of thefinancial year.

The World Health Organization officially declared the spread of COVID19as a pandemic as of March 12 2020. The effects of the various lockdowns constructionsite closures illness-related absences of skilled site workers and bottlenecks at itssuppliers have also impacted the Steiner Group in FY 2021-22.

Throughout the COVID19 pandemic the Company?s top priority was toensure the health and safety of its employees and partners. Steiner has therefore beenswift in deploying strict hygiene and safety measures for all its construction sites aswell as its office spaces.

Steiner?s subsidiary Steiner India has achieved strong initialtraction in India having successfully completed design-build / turnkey GC/TC key highrise residential hospitality and industrial projects in Mumbai NCR and Kolkata.

8. Subsidiaries and Associate Companies

During the year pursuant to the Securities Purchase Agreement enteredbetween Xander Investment Holding XXVI Limited (‘Xander?) and the Company alongwith certain group entities Xander?s shareholding (14.55%) in HCC ConcessionsLimited (‘HCON?) subsidiary of the Company has been bought back by HCON.Consequent to the buy back effective 20 August 2021 HCON (including its subsidiariesi.e. Narmada Bridge Tollways Limited Badarpur Faridabad Tollways LimitedBaharampore-Farakka Highways Limited Raiganj-Dalkhola Highways Limited) has ceased to bejoint ventures and became subsidiaries of the Company.

Also Projektentwicklungsges. Parking Kunstmuseum AG was liquidated inDecember 2021 and consequently has ceased to be an Associate of the Company.

The details as required under Rule 8 of the Companies (Accounts) Rules2014 regarding the performance and financial position of the Subsidiaries Associates andJoint Ventures of the Company are provided in Form AOC-1 which form part of theConsolidated Financial Statements of the Company for the financial year ended March 312022.

The Company?s Policy for determining material subsidiaries wasrevised by the Board on May 12 2022 and the revised Policy is available on theCompany?s website and can be accessed by weblink Subsidiaries.pdf.

Pursuant to initiation of the Corporate Insolvency Resolution Process(CIRP) under the Insolvency and Bankruptcy Code 2016 (‘IBC?) against LavasaCorporation Limited (LCL) effective 30 August 2018 the Holding Company has lost control/ significant influence over LCL and its subsidiaries associates and joint ventures.Accordingly the above entities cease to be subsidiaries associates and joint ventures ofthe Holding Company effective 30 August 2018.

9. Public Deposits

Your Company has not accepted any deposit falling under Chapter V ofthe Companies Act 2013 during the year under review. There were no such depositsoutstanding at the beginning and end of the financial year 2021-22.

10. Particulars of Loans Guarantees or Investments

Particulars of Loans Guarantees and Investments made during the yearas required under the provisions of Section 186 of the Companies Act 2013 (the Act) aregiven in the notes to the Financial Statements forming part of Annual Report.

Also pursuant to Paragraph A (2) of Schedule V of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (the SEBI Listing Regulations) particulars of Loans/Advances given to subsidiarieshave been disclosed in the notes to the Financial Statements.

11. Employee Stock Option Scheme (ESOP)

As on March 31 2022 347450 stock options were available for grantto the eligible employees. Each option when exercised would entitle the holder tosubscribe for one equity share of the Company of face value ` 1 each.

The particulars with regard to Options as on March 31 2022 asrequired to be disclosed pursuant to the provisions of Companies (Share Capital andDebentures) Rules 2014 read with the applicable SEBI Regulations are set out at AnnexureI to this Report.

BNP & Associates Secretarial Auditors of the Company havecertified that the Company?s ESOP Scheme has been implemented in accordance with theSecurities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity)Regulations 2021 and the Resolution passed by the Members for the Scheme.

12. Consolidated Financial Statements

In accordance with the Act and implementation requirements of IndianAccounting Standards (‘IND-AS?) on accounting and disclosure requirements and asprescribed by the SEBI Listing Regulations the Audited Consolidated Financial Statementsare provided in this Annual Report.

Pursuant to Section 129(3) of the Act a statement containing thesalient features of the Financial Statements of the Subsidiaries Associates and Jointventures of the Company in the prescribed form AOC-1 is annexed to this Annual Report.

Pursuant to Section 136 of the Act the Financial

Statements of the subsidiaries are available on the website of theCompany i.e. under the Investors Section.

13. Corporate Governance

The Company is committed to maintain the highest standards of CorporateGovernance and adheres to the Corporate Governance requirements as stipulated by theSecurities and Exchange Board of India (the SEBI).

The report on Corporate Governance as prescribed in the SEBI ListingRegulations forms an integral part of this Annual Report. The requisite certificate fromthe Statutory Auditors of the Company confirming compliance with the conditions ofCorporate Governance along with a declaration signed by CEO of the Company stating thatthe Members of the Board of Directors and Senior Management have affirmed the compliancewith code of conduct of the Board of Directors and Senior Management is attached to thereport on Corporate Governance.

14. Directors

Mr. N. R. Acharyulu Non-Executive Non-Independent Director whowas appointed as an Independent Director with effect from June 23 2021 by the Board ofDirectors was regularized as an Independent Director in the Annual General Meeting heldon September 23 2021 for a term of 3 consecutive years up to the conclusion of the 98thAnnual General Meeting of the Company not liable to retire by rotation.

Mr. Arun Karambelkar who was appointed as an Additional Director ofthe Company in the category of Non-Executive Non-Independent Director with effect fromJune 23 2021 by the Board of Directors in terms of terms of Section 161(1) of the Actread with Article 88 of the Articles of Association of the Company was regularized as aNon-Executive Non-Independent Director in the Annual General Meeting held on September 232021 liable to retire by rotation.

Mr. Anil Singhvi Independent Director of the Company has resigned fromthe Directorship of the Company with effect from December 23 2021. The Board places onrecord its appreciation for the exemplary services rendered by him and contribution madeby him during his tenure as an Independent Director of the Company.

The existing tenure of Mr. Santosh Janakiram and Mr. Mahendra SinghMehta as Independent Directors is expiring on September 29 2022 i.e. date of the 96thAGM and they being eligible have offered themselves for re-appointment. Based on theperformance evaluation carried out by the Board and after reviewing the declarationsubmitted by them and pursuant to the recommendation of the Nomination & RemunerationCommittee the Board recommends their re-appointment for a second term of 5 consecutiveyears i.e. from the conclusion of the 96th AGM to be held in the calendar year2022 till the conclusion of the 101st AGM to be held in the calendar year 2027.

Based on the recommendation of the Nomination and RemunerationCommittee the Board at its Meeting held on March 23 2022 has re-appointed Mr. ArjunDhawan as a Whole-time Director of the Company for a period of 5 years w.e.f. April 012022 subject to Members? approval. Board has also appointed him as Vice Chairman ofthe Board with effect from March 23 2022.

As per the provisions of Section152 of the Companies Act 2013 Mr.Arun Karambelkar Non-Executive and Non-

Independent Director of the Company is due to retire by rotation atthe ensuring 96th Annual General Meeting and being eligible has offeredhimself for re-appointment. The Board based on the recommendation of the Nomination andRemuneration Committee at its Meeting held on May 12 2022 has recommended hisre-appointment as a Non-Executive and Non- Independent Director of the Company liable toretire by rotation.

Brief profiles of the Directors seeking re-appointment have been givenas an annexure to the Notice of the 96th AGM.

The Independent Directors of the Company viz. Mr. Santosh JanakiramMr. Mahendra Singh Mehta Dr. Mita Dixit and Mr. N. R. Acharyulu have furnished thedeclarations to the Company confirming that they meet the criteria of Independence asprescribed under Section 149 of the Act and Regulation 16 (1)(b) read with Regulation25(8) of the SEBI Listing Regulations and the Board has taken on record the saiddeclarations after undertaking due assessment of the veracity of the same.

The Company has also received Form DIR-8 from all the Directorspursuant to Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification ofDirectors) Rules 2014.

15. Key Managerial Personnel

As on March 31 2022. the following persons were the Key ManagerialPersonnel (KMP) of the Company pursuant to Section 2(51) and Section 203 of the Act readwith the Rules framed thereunder:

i. Mr. Ajit Gulabchand Chairman & Managing Director.

ii. Mr. Arjun Dhawan Vice Chairman and Whole-time Director.

iii. Mr. Jaspreet Singh Bhullar Chief Executive Officer (w.e.f. March23 2022).

iv. Mr. Rahul P. Rao Chief Financial Officer (w.e.f. August 12 2021).

v. Mr. Vithal P. Kulkarni Executive Vice President & CompanySecretary.

Mr. Arjun Dhawan has ceased to be Group CEO (KMP) consequent uponappointment as the Vice Chairman of the Board with effect from March 23 2022.

Mr. U V Phani Kumar has resigned from the position of CEO- HCC(E&C)with effect from March 23 2022.

Mr. Vithal P. Kulkarni has resigned from the position of Executive VicePresident & Company Secretary with effect from May 12 2022.

Mr. Nitesh Kumar Jha has been appointed as the Company Secretary andCompliance Officer of the Company with effect from May 12 2022.

16. Board Committees

The Board had constituted / re-constituted various Committees incompliance with the provisions of the Act and the SEBI Listing Regulations viz. AuditCommittee Nomination and Remuneration Committee Stakeholders Relationship CommitteeCorporate Social Responsibility Committee and Risk Managment Committee.

As the Company has fallen under top 1000 listed companies based on themarket capitalization as on March 31 2021 the Board in its Meeting held on June 232021 has reconstituted the existing Risk Management Committee to comply with theprovisions of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) (second amendment) Regulations 2021.

Consequent upon resignation of Mr. Anil Singhvi

Independent Director of the Company Mr. N. R. Acharyulu was appointedas a Member of the Nomination and Remuneration Committee in his place with effect fromFebruary 03 2022.

The Board has constituted a Committee for Resolution Plan forimplementation of the Debt Resolution Plan of the Company.

All decisions pertaining to the constitution of Committees appointmentof Members and fixing of terms of reference/ role of the Committees are taken by theBoard.

The details of the role and composition of these Committees includingthe number of Meetings held during the financial year and attendance at these Meetings areprovided in the Corporate Governance Section of the Annual Report.

17. Meetings

A calendar of Board meetings Annual General Meeting and CommitteeMeetings is prepared and circulated in advance to the Directors of your Company. The Boardof Directors of your Company met 6 times during the financial year 2021-22. The Meetingswere held on May 21 2021 June 23 2021 August 12 2021 November 11 2021 February 032022 and March 23 2022.The maximum time gap between any two consecutive Meetings did notexceed one hundred and twenty days.

18. Familiarization Program of Independent Directors

In compliance with the requirements of the SEBI Listing Regulationsthe Company has put in place a familiarization program for Independent Directors tofamiliarize them with their role rights and responsibility as Directors the operationsof the Company business overview etc. The details of the familiarization program areexplained in the Corporate Governance Report and the same is also available on the websiteof the Company and can be accessed by weblink

19. A statement regarding opinion of the Board with regard tointegrity expertise and experience (including the proficiency) of the IndependentDirectors appointed during the year

The Company has received declaration from the Independent Directorsthat they meet the criteria of independence as prescribed under Section 149(6) of the Act.In the opinion of the Board they fulfill the condition for appointment/re-appointment asIndependent Directors on the Board and possess the attributes of integrity expertise andexperience as required to be disclosed under Rule 8(5) (iiia) of the Companies (Accounts)Rules 2014.

20. Independent Directors? Meeting

In terms of Schedule IV of the Act and Regulation 25 of the SEBIListing Regulations Independent Directors of the Company are required to hold at leastone meeting in a financial year without the attendance of Non-Independent Directors andmembers of management.

During the year under review Independent Directors met separately onMarch 28 2022 inter-alia for

Evaluation of performance of Non-Independent

Directors and the Board of Directors of the Company as a whole.

Evaluation of performance of the Chairman of the

Company taking into views of Executive and Non-Executive Directors;and

Evaluation of the quality content and timelines of

flow of information between the management and the Board that isnecessary for the Board to effectively and reasonably perform its duties.

21. Performance Evaluation

Pursuant to the applicable provisions of the Act and the SEBI ListingRegulations the Board has carried out an Annual Evaluation of its own performanceperformance of the Directors and the working of its Committees based on the evaluationcriteria defined by Nomination and Remuneration Committee for performance evaluationprocess of the Board its Committees and Directors.

The Board?s functioning was evaluated on various aspectsincluding inter-alia the structure of the Board Meetings of the Board functionsof the Board degree of fulfilment of key responsibilities establishment and delineationof responsibilities to various Committees and effectiveness of Board processesinformation and functioning.

The Committees of the Board were assessed on the degree of fulfilmentof key responsibilities adequacy of Committee composition and effectiveness of Meetings.The Directors were evaluated on aspects such as attendance contribution at Board/Committee Meetings and guidance/support to the management outside Board/ CommitteeMeetings.

As mentioned earlier the performance assessment of Non-IndependentDirectors Board as a whole and the Chairman were evaluated in a separate meeting ofIndependent Directors. The same was also discussed in the Board Meeting. Performanceevaluation of Independent Directors was done by the entire Board excluding theIndependent Director being evaluated.

22. Criteria for selection of candidates for appointment as DirectorsKey Managerial Personnel and Senior Management Personnel

The Nomination and Remuneration Committee has laid down a well-definedcriterion in the Nomination Remuneration and Evaluation Policy for selection ofcandidates for appointment as Directors Key Managerial Personnel and Senior ManagementPersonnel.

The said Policy is available on the Company?s website and can beaccessed by weblink

23. Remuneration Policy for Directors Key Managerial Personnel andSenior Management Employees

The Nomination and Remuneration Committee has laid down the frameworkfor remuneration of Directors Key Managerial Personnel and Senior Management Personnel inthe Nomination and Remuneration Policy recommended by it and approved by the Board ofDirectors. The Policy inter-alia defines Key Managerial Personnel and SeniorManagement Personnel of the Company and prescribes the role of the Nomination andRemuneration Committee. The Policy lays down the criteria for identification appointmentand retirement of Directors and Senior Management. The Policy broadly lays down theframework in relation to remuneration of Directors Key Managerial Personnel and SeniorManagement Personnel. The Policy also provides for the criteria for determiningqualifications positive attributes and independence of Director and lays down theframework on Board diversity.

The said Policy is available on the Company?s website and can beaccessed by weblink

24. Corporate Social Responsibility Policy

A brief outline of the revised Corporate Social Responsibility (CSR)Policy as recommended by the CSR Committee and approved by the Board of Directors of theCompany in its Meeting held on June 23 2021 and the initiatives undertaken by theCompany on CSR activities during the year are set out in Annexure II of this Reportin the prescribed format.

The said Policy is available on the Company?s website and can beaccessed by weblink

25. Related Party Transactions

The related party transactions attracting the compliance under theCompanies Act 2013 and/or the SEBI Listing

Regulations were placed before the Audit Committee and/ or Board fornecessary review/approval.

The related party transactions attracting the compliance under Section188 of the Act and/or the SEBI Listing Regulations were placed before the Audit and Boardfor necessary approval/review.

The routine related party transactions were placed before the AuditCommittee for its omnibus approval. A statement of all related party transactions enteredwas presented before the Audit Committee on a quarterly basis specifying the naturevalue and any other related terms and conditions of the transactions.

Transactions to be reported in Form AOC-2 in terms of Section 134 ofthe Act read with Companies (Accounts) Rules 2014 including the details of thetransactions with related parties are provided in the Company?s financial statementsin accordance with the Indian Accounting Standards.

The Related Party Transactions Policy was amended on May 12 2022 inline with the requirements of Regulation 23 of the SEBI Listing Regulations.

The said Policy is available on the Company website and can be accessedby weblink

26. Business Responsibility Statement

As per the SEBI Listing Regulations a Business Responsibility Reportcovering the performance of the Company on the nine principles as per National VoluntaryGuidelines (NVGs) is forming part of this Annual Report as

Annexure VII.

27. Directors? Responsibility Statement

In accordance with the provisions of Section 134 of the Act yourDirectors confirm that:

(a) in the preparation of the annual accounts the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures if any.

(b) the selected accounting policies were applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at March 31 2022 and of theloss of the Company for the year ended on that date;

(c) proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.

(d) the annual accounts have been prepared on a going concern basis.

(e) the internal financial controls have been laid down to be followedby the Company and such controls are adequate and are generally operated effectivelyduring the year.

(f) proper systems to ensure compliance with the provisions of allapplicable laws have been devised and such systems are adequate and are operatingeffectively.

Your Auditors have opined that the Company has in all materialrespects maintained adequate internal financial controls over financial reporting andthat they were operating effectively.

28. Industrial Relations

The industrial relations continued to be generally peaceful and cordialduring the year under review.

29. Transfer of Unclaimed Dividend and Equity Shares to InvestorEducation and Protection Fund (IEPF)

Pursuant to the applicable provisions of the Act read with the InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 ("the IEPF Rules") all unpaid or unclaimed dividends are required to betransferred by the Company to IEPF after the completion of seven years. Furtheraccording to the IEPF Rules the shares on which dividend has not been paid or claimed bythe shareholders for seven consecutive years or more shall also be transferred to IEPF.During the year under review there were no unclaimed dividend or equity shares due to betransferred to the IEPFA pursuant to IEPF Rules.

30. Particulars of Employees and other additional information

Disclosure pertaining to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed to the Report as Annexure-III.In terms of proviso to Section 136(1) of the Act the Report and Accounts are being sentto the Members excluding statement containing particulars of top 10 employees and theemployees drawing remuneration in excess of limits prescribed under Rule 5(2) and (3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. The saidStatement is also open for inspection. Any member interested in obtaining a copy of thesame may write to the Company Secretary.

31. Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo

The information relating to the Conservation of Energy TechnologyAbsorption and Foreign Exchange Earnings and Outgo as required to be disclosed under theCompanies (Accounts) Rules 2014 is given in Annexure IV forming part of thisAnnual Report.

32. Secretarial Standards

The Company has complied with the Secretarial Standards issued by theInstitute of Company Secretaries of India on Board Meetings and General Meetings.

33. Statutory Auditors

The Members of the Company had at the 93rd Annual GeneralMeeting ("AGM") held on September 26 2019 approved the re-appointment of M/sWalker Chandiok & Co. LLP Chartered Accountants Mumbai bearing ICAI RegistrationNo. 001076N for second term of 5 consecutive years as the Statutory Auditors of theCompany to hold office from the conclusion of that AGM until the conclusion of the 6thAGM to be held in the year 2024. As required under Section 139 of the Act the Company hasobtained certificate from them to the effect that their continued appointment would be inaccordance with the conditions prescribed under the Act and the Rules made thereunder asmay be applicable.

34. Board?s Comment on Auditors? Qualifications

The explanations on the qualifications/observations/matter of emphsisgiven by the Statutory Auditos in their Audit Reports have been provided in the respectiveNotes to the Standalone and Consolidated Financial Statements.

35. Secretarial Audit

Secretarial Audit for the financial year 2021-22 was conducted by M/s.BNP & Associates Company

Secretaries in Practice in accordance with the provisions of Section204 of the Act. The Secretarial Auditor?s Report is attached to this Report at AnnexureV.

The Secretarial Auditor?s observations are self-explanatory.

36. Cost Audit

The Company is maintaining the accounts and cost records asspecified by the Central Government under sub-section (1) of Section 148 of the Act andRules made thereunder.

In compliance with the provisions of Section 148 of the Act the Boardof Directors of the Company had at its Meeting held on August 12 2021 appointed M/s.Joshi Apte & Associates Cost Accountants as Cost Auditors of the Company for thefinancial year 2021-22.

In terms of the provisions of Section 148 of the Act read with theCompanies (Audit and Auditors) Rules 2014 the remuneration of the Cost Auditors isrequired to be ratified by the Members. Accordingly necessary resolution is proposed atthe 96th Annual General Meeting for ratification of the remuneration payable tothe Cost Auditors for financial year 2021-22.

37. Risk Management

As the Company has fallen under top 1000 listed companies based on themarket capitalization as on

March 31 2021 the Board in its Meeting held on June 23 2021 hasreconstituted the existing Risk Management Committee to comply with the provisions of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)(second amendment) Regulations 2021. The terms of reference of the Risk ManagementCommittee have been revised in accordance with Schedule II of the SEBI ListingRegulations.

The Company has established a well-documented and robust riskmanagement framework under the provisions of the Act. Under this framework risks areidentified across all business processes of the Company on a continuous basis.

Once identified these risks are managed systematically by categorizingthem into Enterprise Level Risk & Project evel Risk. These risks are further brokendown into various subcategories of risks such as operational financial contractualorder book project cost & time overrun etc. and proper documentation is maintained inthe form of activity log registers mitigation reports; and monitored by respectivefunctional heads. Review of these risk and documentation is undertaken by Risk ManagementCommittee regularly at agreed intervals.

38. Internal Control Systems and their adequacy

The Company has an adequate system of internal control to ensure thatthe resources are used efficiently and effectively so that:

assets are safeguarded and protected against loss from unauthorized useor disposition.

all significant transactions are authorised recorded and reportedcorrectly.

financial and other data are reliable for preparing

financial information.

other data are appropriate for maintaining accountability of assets.

The internal control is supplemented by an extensive internal auditsprogramme review by management documented policies guidelines and procedures.

39. Internal Financial Controls and their adequacy

The Company has in place adequate internal financial controlscommensurate with the size scale and complexity of its operations. The Company haspolicies and procedures in place for ensuring proper and efficient conduct of itsbusiness the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timely preparationof reliable financial information. The Company has adopted accounting policies which arein line with the Accounting Standards and the Act.

40. Whistle Blower Policy/Vigil Mechanism Policy

The Company has adopted a Whistle Blower Policy to provide a formalmechanism to the Directors and employees to report their concerns about unethicalbehavior actual or suspected fraud or violation of the Company?s Code of Conduct orEthics Policy. The Policy provides for adequate safeguards against victimization ofemployees who avail of the mechanism and provides for direct access to the Chairman of theAudit Committee. It is affirmed that no person of the Company has been denied access tothe Audit Committee.

The said Policy is available on the Company website and can be accessedby weblink Investors/Vigil_Mechanism_Policy.pdf.

41. Sexual Harassment

The Company has always believed in providing a conducive workenvironment devoid of discrimination and harassment including sexual harassment. TheCompany has a well formulated Policy on Prevention and Redress of Sexual Harassment. Theobjective of the Policy is to prohibit prevent and address issues of sexual harassment atthe workplace. This Policy has striven to prescribe a code of conduct for the employeesand all employees have access to the Policy document and are required to strictly abide byit. The Policy covers all employees irrespective of their nature of employment and isalso applicable in respect of all allegations of sexual harassment made by an outsideragainst an employee.

The Company has duly constituted an Internal Complaints Committee inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules thereunder. During the year 2021-22 nocase of Sexual Harassment was reported.

42. Reporting of Frauds

There was no instance of fraud during the year under review whichrequired the Statutory Auditors to report under Section 143(12) of the Act and the Rulesmade thereunder.

43. Significant and material Orders passed by the Regulators/Courts ifany

There are no significant or material orders passed by the Regulators orCourts or Tribunals which would impact the going concern status of your Company and itsfuture operations.

44. Material changes & commitment if any affecting financialposition of the Company from the end of financial year till the date of the report

There have been no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the financialyear to which the Financial Statements relate and the date of this Report.

45. Annual Return

The Company has uploaded Annual Return on the website of the Companyi.e.

46. Green Initiatives

In line with the Green Initiatives the Notice of 96thAnnual General Meeting of the Company is being sent to all Members whose email addressesare registered with the Company/Depository Participant(s). Members who have not registeredtheir e-mail addresses are requested to register their e-mail IDs with Company?sRegistrar and Share Transfer Agents TSR Consultants Private Limited at C-101 1stFloor 247 Park L.B.S. Marg Vikhroli (West) Mumbai – 400083.

47. Dividend Distribution Policy

Dividend Distribution Policy of the Company (‘the Policy")approved by the Board on February 2 2017 endeavors for fairness consistency andsustainability while distributing profits to the Members and same is attached to thisReport as Annexure VI.

48. Acknowledgement

Your Directors would like to acknowledge and place on record theirsincere appreciation to all Stakeholders Clients Financial Institutions Banks Centraland State Governments the Company?s valued Investors and all other BusinessPartners for their continued co-operation and support received during the year.

Your Directors recognize and appreciate the efforts and hard work ofall the employees of the Company and their continued contribution to promote itsdevelopment.

For and on behalf of Board of Directors
Ajit Gulabchand
Chairman & Managing Director
Registered Office:
Hincon House Lal Bahadur Shastri Marg
Vikhroli (West) Mumbai 400 083
Place: Mumbai
Date: May 12 2022