Hitachi Energy India Ltd
Directors Reports
Dear Members,
The Board of Directors is pleased to present the 4th Annual
Report covering the business and operations of Hitachi Energy India Limited ("the
Company") along with the Company?s audited financials for the year ended March
31,2023.
1. Financial Results:
(Amount in Rs Crores)
|
FY 2022-23 |
FP 2021-22 |
| Particulars |
From 01.04.2022 to 31.03.2023 |
From 01.01.2021 to 31.03.2022 |
| Revenue from Operations |
4,468.51 |
4,883.96 |
| Add: Other Income |
15.14 |
66.94 |
| Total Income |
4,483.65 |
4,950.90 |
| Less: Total Expenses |
4,352.83 |
4,710.16 |
| Profit before tax and exceptional items |
130.82 |
240.74 |
| Less: Exceptional items |
- |
(35.85) |
| Profit before tax and after exceptional items |
130.82 |
276.59 |
| Tax expense |
36.92 |
73.19 |
| Profit after tax |
93.90 |
203.40 |
| Add: Other Comprehensive Income |
1.74 |
4.95 |
| Total Comprehensive Income |
95.64 |
208.35 |
| Balance of retained earnings transferred pursuant to the
scheme of arrangement |
- |
- |
| Balance brought forward from the previous year |
608.39 |
408.52 |
| Amount available for appropriation |
704.03 |
616.87 |
| Appropriations: |
|
|
| Equity dividend paid |
12.72 |
8.48 |
| Tax on equity dividend paid |
- |
- |
| Debenture redemption reserve |
- |
- |
| General reserve |
- |
- |
| Balance carried forward |
691.31 |
608.39 |
| Key ratios: |
|
|
| Earnings per share (^) |
22.16 |
47.99 |
Note: Previous year?s figures have been regrouped/reclassified
wherever necessary to correspond with the current year?s classification/ disclosure.
2. Performance Review:
During the financial year ended March 31, 2023, orders touched Rs
6,817.20 Crores, as against Rs 4,548.10 Crores during the year ended March 31, 2022. The
orders witnessed healthy growth, reflecting the technology push and continued traction in
transformers and system integration. The order backlog at the end of the year stood at Rs
87,070.91 Crores (March 31, 2022 was Rs 4,672.29), which continued to provide visibility
to the future revenue streams. The total income of your Company for the financial year
ended March 31, 2023 stood at Rs 4,483.65 Crores (March 31,2022 was Rs 4,950.90 Crores),
reflecting stability of operations in an uncertain market situation. Profit before tax
after exceptional items was Rs 130.82 Crores (March 31, 2022 was Rs 276.59 Crores), mainly
impacted due to chips and electronic shortages and commodity price fluctuations.
Accordingly, net profit after tax was Rs 93.90 Crores (March 31,2022 was
Rs 203.40 Crores). The earnings per share for the financial year ended
March 31,2023, stood at Rs 22.16 (March 31, 2022, was Rs 47.99).
For detailed analysis of the performance, including industry overview,
changes, and outlook, please refer to the Management?s Discussion and Analysis Report
provided in Annexure-A, forming part of this Report.
There has been no change in the nature of business during the financial
year under review.
3. Management Discussion and Analysis Report:
Management Discussion and Analysis Report for the year under review, as
stipulated under the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), is presented
in Annexure-A, forming part of the Annual Report.
4. Glimpse of Rebranding and Consolidation:
Hitachi Energy India Limited (formerly known as ABB Power Products and
Systems India Limited) ("the Company") underwent a significant transformation
since its inception with several noteworthy milestones. Firstly, the Scheme of Arrangement
("Scheme") which was entered into between (i) ABB India Limited
("INABB" / "Transferor") and (ii) Hitachi Energy India Limited
[Formerly known as (ABB Power Products and Systems India Ltd or APPSIL)]
("Company" / "Transferee") and their respective shareholders and
creditors, pursuant to the provisions of Section 230 to 232 and other applicable
provisions of the Companies Act, 2013, ("Act") which provided for inter alia the
Demerger of the Power Grids Business of INABB ("Demerged Undertaking") and the
consequent issuance of equity shares by your Company to the shareholders of INABB as per
the share entitlement ratio, which was approved by the National Company Law Tribunal,
Bengaluru Bench ("NCLT") on November 27, 2019, allowed Hitachi Energy India
Limited to concentrate its resources on its core business areas, enhance operational
efficiency, and maximize value for its stakeholders.
In addition, 3,17,86,256 equity shares aggregating 75% of the paid-up
capital of your Company was transferred from ABB Asea Brown Boveri Ltd to ABB Ltd by way
of dividend in kind, and subsequently from ABB Ltd to Hitachi Energy Ltd (formerly known
as Hitachi ABB Power Grids AG) as contribution in kind (as disclosed by the Shareholders)
on February 05, 2021.
Consequent to this, your Company underwent a name change from "ABB
Power Products and Systems India Limited" to "Hitachi Energy India Limited"
with effect from November 12,2021, following the rebranding of its parent Company as
Hitachi Energy Ltd. and in keeping with its? vision of becoming a part of Hitachi
Energy group. This change reaffirms your Company?s commitment to advance a
sustainable energy future for all in India. With its new brand name - Hitachi Energy India
- the business will be able to effectively position its pioneering technologies and
services to existing and future customers expanding beyond the grid - opening up a breadth
of opportunities in areas such as sustainable mobility and smart life, and contributing
further economic, environmental and social value. In continuation to the change in name of
the Company, the Memorandum of Association and Articles of Association of your Company
were also amended involving name change and the financial year of the Company was changed
from January 01 - December 31 to April 01 - March 31. Necessary approvals from various
regulatory authorities, as applicable in this regard was secured by the Company from time
to time.
Furthermore, on December 28, 2022, Hitachi Ltd., an ultimate parent
entity of the Company has completed the previously announced acquisition of ABB
Ltd.?s remaining 19.9% equity stake in Hitachi Energy Ltd., a Joint Venture that was
formed from ABB?s Power
Grids business in 2020. Thus, Hitachi Ltd. now holds 100% of the equity
stake in Hitachi Energy Ltd., (Zurich, Switzerland), which is the holding Company which
presently holds 75% stake in your Company. The solid commitment from Hitachi to the
announced acquisition of the remaining shares of Hitachi Energy ahead of plan will help in
accelerating and enabling the agile and committed team to support customers and partners
addressing the global challenge of the energy transition, while continuing to deliver
strong financial performance and creating value.
5. Dividend & Reserves:
Declaration and payment of dividend:
The Board of Directors has recommended a final dividend of Rs 3.40
(Three Rupees and Forty Paise only) per equity share for the financial year ended March
31, 2023 on 4,23,81,675 equity shares of Rs 2 each, fully paid.
The dividend recommended is in accordance with the Company?s
Dividend Distribution Policy.
Dividend Distribution Policy:
In terms of the provisions of Regulation 43A of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Company has in place a
Dividend Distribution Policy which is accessible at the Company?s website
https://www.hitachienergy.com/in/en/investor- relations/corporate-governance#policies
Book Closure:
The Register of Members and Share Transfer Books of the Company will
remain closed from August 11,2023 to August 17, 2023 (both days inclusive) to determine
the eligible shareholders to receive the dividend for the year ended March 31,2023 and
accordingly, the record date for dividend will be Thursday, August 10, 2023.
According to the Finance Act, 2020, dividend income will be taxable in
the hands of the Members w.e.f. April 1, 2020, and the Company is required to deduct tax
at source from the dividend paid to the Members at prescribed rates as per the Income Tax
Act, 1961.
Unclaimed dividends:
Details of outstanding and unclaimed dividends previously declared and
paid by the Company are given under the Corporate Governance Report.
Transfer to Investor Education and Protection Fund:
As per the applicable provisions of the Companies Act 2013, read with
IEPF Authority (Accounting, Audit, Transfer and Refund) Rules 2016 (‘the
Rules?), all unpaid or unclaimed dividends are required to be transferred by the
Company to the IEPF established by the Central Government, after completion of seven years
and the
shares in respect of which dividend has not been paid or claimed by the
members for seven consecutive years or more shall also be transferred to the Demat account
created by IEPF Authority.
Further, pursuant to the Scheme of Arrangement [entered into between
(i) ABB India Limited ("INABB"/"Transferor") and (ii) Hitachi Energy
India Limited (Formerly known as ABB Power Products and Systems India Limited) ("the
Company") and their respective shareholders and creditors] approved by NCLT vide its
order dated November 27, 2019, the Company directly allotted 1,07,421 Equity Shares to the
shareholders of ABB India Limited in accordance with the Share Entitlement Ratio
pertaining to the relevant shares of ABB India Limited lying with IEPF.
Accordingly, the dividend declared for the financial period 2021-22 and
financial year 2022-23 pertaining to the shares remaining with IEPF authorities has also
been transferred to the Investor Education and Protection Fund account from time to time.
The details of the above are provided on the website of the Company at:
https://www.hitachienergy.com/in/en/ investor-relations/shareholder-information#iepf
Transfer to Reserves:
For the financial year under review, your Company has proposed not to
transfer any amount to the General Reserves.
6. Share Capital:
As of March 31,2023, the authorized share capital of the Company was Rs
10 Crores comprising of 5,00,00,000 equity shares of Rs 2 each, and the paid-up equity
share capital as of March 31, 2023, was Rs 8.48 Crores comprising of 4,23,81,675 equity
shares of Rs 2 each.
During the year under review, the Company had neither issued any shares
nor instruments convertible into equity shares of the Company or with differential voting
rights nor has granted any sweat equity.
7. Material Changes and Commitment affecting the Financial Position:
While the economy was in the grip of Covid-19 for the past two years,
the Company maintained business continuity, showed remarkable endurance in difficult
times, and ensured its customers met all mission-critical project timelines. Furthermore,
the Ukraine situation, semiconductor shortages, and supply chain disruptions continue to
weigh on the economy and our sector in particular. Despite the fact that the number of
current cases of Covid-19 has decreased significantly, there are still concerns about a
sustained economic recovery due to a variety of other impacting variables.
With this, there were no material changes affecting the financial
position of the Company that took place after the close of the financial year 2022-23 till
the date of this
Report. Also, there has been no change in the nature of business of the
Company.
Update on COVID-19:
While the severity of the disease due to COVID-19 has reduced because
of increased vaccination, as immunity may wane over a period of time, there is a risk of
further waves and the emergence of highly transmissible and more virulent variants.
In the situation of the COVID-19 pandemic, vaccination camps were
organized across the Company locations in coordination with hospitals, for employees,
their families, third party(ies), as well as contract staff. Regular engagement and
monitoring enabled a quick completion of both vaccination doses along with booster doses.
8. Subsidiary/ Joint Venture or Associate Company:
During the financial year under review, the Company did not have any
subsidiary, joint venture or associate Company.
9. Expansion/ Addition of new manufacturing facilities:
Your Company added new manufacturing facilities, the details of which
are provided under Management Discussion and Analysis section of this Report.
10. Credit Rating:
The Company had outstanding short-term borrowings of Rs 275 Crores as
on March 31,2023 utilized from the established credit lines with banks.
CRISIL Ratings Limited has reaffirmed the long-term and short-term
credit ratings for Rs 6000 Crores bank facilities (enhanced from Rs 5000 Crores) of the
Company.
CRISIL has assigned ‘CRISIL A1+? as Short-Term Rating and
assigned ‘CRISIL AAA/Stable? ratings as a LongTerm Rating effective from July
08, 2022.
The Company?s financial discipline and prudence are reflected in
the strong credit ratings ascribed by rating agencies. The details of credit ratings are
disclosed in the Management Discussion and Analysis Report, which forms part of this
Board?s Report.
11. Board of Directors and Key Managerial Personnel:
As at March 31,2023, the Board of Directors comprised 6 Directors of
which 1 is Executive Director, 2 are Non-Executive Directors and 3 are Non-Executive,
Independent Directors.
• Mr. Nuguri Venu (DIN: 07032076), Managing Director and Chief
Executive Officer is the Executive Director.
• Mr. Ismo Antero Haka (DIN:08598862) and Mr. Achim Michael Braun
(DIN:08596097) are the Non-Executive, Non- Independent Directors.
• Mr. Mukesh Butani, Ms. Akila Krishnakumar and Ms. Nishi Vasudeva
are the independent Directors.
The composition of the Board of Directors is in due compliance with the
Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015.
None of the Directors of the Company are disqualified under Section
164(2) of the Companies Act, 2013.
Key Managerial Personnel:
Mr. Nuguri Venu (DIN: 07032076), Managing Director and Chief Executive
Officer, Mr. Ajay Singh, Chief Financial Officer, and Mr. Poovanna Ammatanda, General
Counsel, Company Secretary and Compliance Officer are the Key Managerial Personnel in
accordance with the provisions of Section 203 of the Companies Act, 2013. There was no
change in the Key Managerial Personnel during the year.
Appointment/ Re-Appointment of Directors:
Based on the recommendations of the Nomination & Remuneration
Committee (NRC) and Board of Directors, the shareholders at the third Annual General
Meeting held on July 22, 2022, approved the re-appointments of:
• Mr. Achim Michael Braun (DIN:08596097), Non-Executive Director
who retired by rotation.
• Mr. Mukesh Butani (DIN: 01452839), Ms. Akila Krishnakumar (DIN:
06629992) and Ms. Nishi Vasudeva (DIN: 03016991) as an independent Directors for a second
term of five (5) years effective from December 24, 2022, to December 23, 2027.
• Mr. Nuguri Venu (DIN: 07032076), Managing Director and CEO of
the Company for a further period of five (5) years effective from December 2, 2022 to
December 1, 2027.
Details of Directors, Key Managerial Personnel and Composition of
various Committees of the Board are provided in the Corporate Governance Report forming
part of this report.
Change in Composition of Board of Directors:
Ms. Nishi Vasudeva (DIN: 03016991) has resigned from the position of
Independent Director of the Company effective from May 24, 2023.
Pursuant to the recommendation of Nomination and Remuneration
Committee, the Board of Directors of the Company at their Meeting held on May 24, 2023,
approved the appointment of Ms. Meena Ganesh (DIN: 00528252) as an Additional Director in
the capacity of Independent Director for a term of 5 (five) years, effective from May 24,
2023 to May 23, 2028, subject to approval of the Shareholders of the Company at the
ensuing Annual General Meeting. The necessary Resolution for her appointment is being
placed for
the approval of Shareholders as part of the Notice convening the 4th
Annual General Meeting.
Further, in accordance with the Articles of Association of the Company
and the provisions of Section 152(6)(e) of the Companies Act, 2013, Mr. Ismo Antero Haka
(DIN: 08598862), Director, retires by rotation at the ensuing Annual General Meeting, and
being eligible, offer himself for re-appointment.
A brief resume of Ms. Meena Ganesh and Mr. Ismo Antero Haka proposed to
be appointed and re-appointed respectively, including the nature of their expertise in
specific functional areas and names of the Companies in which they hold Directorship/
Membership/ Chairmanship of the Board or Committees, as stipulated under SEBI (Listing
Obligations and Disclosure Requirement Regulations, 2015 is provided as an annexure to the
Notice convening the 4th Annual General Meeting.
Declaration of Independent Directors:
The Company?s Independent Directors have submitted requisite
declarations confirming that they continue to meet the criteria of independence as
prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(1 )(b) read
with Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 and they have registered their names in the Independent Directors? Databank.
The Independent Directors have also given their undertaking stating
that they are not aware of any event or incident that exists or might reasonably be
anticipated that could impair or damage their capacity to fulfil their duties objectively
and independently.
Familiarization Program for Independent Directors:
The Company has implemented a program to familiarize its Independent
Directors. The program?s primary objective is to familiarise Independent Directors on
our Board with the Company?s business, industry in which the Company operates,
business model, challenges, and so on, through a variety of programmes that include
regular meetings with our business leads and functional heads, as well as interaction with
subject matter experts within the Company.
The familiarization program and other disclosures as specified under
the Listing Regulations is available on the Company?s website at
https://www.hitachienergy. com/in/en/investor-relations/board-of-directors
Selection and Procedure for Nomination and Appointment of Directors and
Nomination and Remuneration Policy of the Company:
The Nomination and Remuneration Committee (NRC) of the Company is
entrusted to determine the criteria for the requirements of the Board. NRC, while
recommending candidature to the Board, takes into consideration the qualification,
attributes, experience and independence of the candidate.
Pursuant to Section 178(3) of the Companies Act, 2013, the Nomination
and Remuneration Committee of the Board has formulated, amongst others, a policy on
Nomination and Remuneration which provides the framework for remunerating the members of
the Board, Key Managerial Personnel, Senior Management and other employees of the Company.
This Policy is guided by the principles and objectives enumerated in Section 178(4) of the
Companies Act, 2013.
The details of the Nomination and Remuneration Policy are mentioned in
the report on Corporate Governance and the same is also placed on the Company?s
website at https://www.hitachienergy.com/in/en/investor-relations/ board-of-directors
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the
prescribed format and annexed as Annexure-B forming an integral part of this Report.
Annual Performance Evaluation of the Board:
The Board, along with the Nomination and Remuneration Committee, has
approved a performance evaluation framework in the form of a questionnaire for annual
evaluation of the Board, Board Committees and Individual Directors pursuant to the
provisions of the Companies Act, 2013 and the Corporate Governance requirements under
Regulation 25(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 read with SEBI?s Guidance Note on Board Evaluation.
During the year under review, the Board of Directors have carried out
an annual evaluation of its own performance, Board Committees, and Individual Directors.
The Board evaluation was conducted through a questionnaire designed with qualitative
parameters and feedback based on ratings.
Further, the performance evaluation of the Independent Directors was
carried out by the entire Board. The performance evaluation of the Chairman, the Board as
a whole and the Non-Independent Directors was carried out by the Independent Directors at
their separate meeting held during the year.
The questionnaire was circulated to all the Board members of the
Company in a transparent and confidential manner. The key parameters considered for Board
evaluation were Board Membership, Board?s Culture and Relationships with Key
Constituencies, Board Responsibilities, Decision Making and Board Committees. During the
evaluation process, the Directors have given ratings of either ‘Strongly agree?
/ ‘Agree? on various assessment questions.
A consolidated report was shared with the Chairman of the Board for his
review and feedback to each Director.
12. Board Meetings:
During the year under review, the Board of Directors of the Company met
four (4) times on the following dates:
• May 26, 2022 (adjourned and concluded on May 27, 2022)
• July 21,2022
• November 4, 2022
• February 6, 2023
In accordance with the provisions of the Companies Act, 2013, a
separate meeting of the Independent Directors of the Company was held on May 26, 2022.
Committees of the Board:
As required under the Act and the Listing Regulations, the Company has
constituted the following committees:
i. Audit Committee
ii. Nomination and Remuneration Committee
iii. Stakeholders Relationship Committee
iv. Risk Management Committee
v. Corporate Social Responsibility
vi. Environment, Social and Governance (ESG) Committee
A detailed note on the composition of various Committees of the Board
and their Meetings including the terms of references are given in the Corporate Governance
Report forming part of this Board?s Report.
Further, pursuant to resignation of Ms. Nishi Vasudeva and appointment
of Ms. Meena Ganesh as an Independent Director of the Company, the Board of Directors at
their Board Meeting held on May 24, 2023, has reconstituted the composition of certain
Committees with effect from May 24, 2023.
13. Directors? Responsibility Statement:
The Board of Directors hereby confirms that:
a. in the preparation of the annual financial statements, the
applicable accounting standards have been followed along with proper explanation relating
to material departures.
b. they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit and loss of the Company for that period;
c. they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this Act for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities;
d. they have prepared the annual financial statements on a going
concern basis.
e. they have 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. they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
14. Corporate Governance Report:
The Company is committed to upholding the highest standards of
Corporate Governance and follows the Corporate Governance requirements set out by the
Securities and Exchange Board of India ("SEBI"). In addition, the Company has
included various best governance practices.
In terms of Regulation 34(3) read with Schedule V of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, a separate section on
Corporate Governance including a certificate from M/s V. Sreedharan & Associates,
Practicing Company Secretaries confirming compliance is annexed as Annexure-C, forming an
integral part of this Report.
15. Statutory Auditors:
Pursuant to provisions of Section 139 of the Act read with the
Companies (Audit and Auditors) Rules, 2014, M/s. S. R. Batliboi & Associates LLP,
Chartered Accountants (Registration No. 101049W/ E300004) were appointed as Statutory
Auditors, for a period of five years, to hold office from the conclusion of first Annual
General Meeting until the conclusion of the sixth Annual General Meeting at such
remuneration as may be mutually agreed amongst by the Board of Directors and the Statutory
Auditors.
There are no qualifications or adverse remarks in the Statutory
Auditor?s Report for the financial statements for the financial year ended March 31,
2023, which requires any explanation from the Board of Directors.
16. Cost Audit and Cost Auditors of the Company:
In terms of the provisions of Section 148 of the Act read with the
Companies (Cost Records and Audit) Rules, 2014, the Board of Directors, on the
recommendation of the Audit Committee, appointed M/s. Ashwin Solanki & Associates,
Cost Accountants (Registration No: 100392) as Cost Auditor of the Company, for the
financial year 2023-24 for conducting the audit of the cost records maintained by your
Company.
A certificate from M/s. Ashwin Solanki & Associates, Cost
Accountants has been received to the effect that their appointment as Cost Auditor of the
Company, if made, would be in accordance with the limits specified under Section 141 of
the Act and Rules framed thereunder and they are not disqualified to be appointed as Cost
Auditor.
A Resolution seeking Shareholders? approval for remuneration
payable to Cost Auditor forms part of the Notice convening the fourth Annual General
Meeting of your Company and same is recommended for your consideration. Cost Audit and
Compliance reports for the financial period 2021-22 were filed with the Registrar of
Companies, within the prescribed time limit.
17. Secretarial Audit:
Pursuant to provisions of Section 204 of the Act read with Rule 9 of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and
amendments thereto, the Board of Directors of the Company have appointed BMP & Co. LLP
(LLPIN: AAI-4194), Company Secretaries, Bengaluru, to conduct the Secretarial Audit for
the financial year 2022-23.
The Secretarial Audit Report (Form MR-3) for the financial year ended
March 31, 2023, is annexed as Annexure-D forming an integral part of this Report.
The Secretarial Audit Report does not contain any qualification,
reservation, adverse remark or disclaimer.
18. Secretarial Standards:
The Board of Directors affirms that the Company has complied with
applicable Secretarial Standards on board meetings and general meetings issued by the
Institute of Company Secretaries of India (ICSI).
19. Branch Offices:
During the year under review, the Company has branch offices in Nepal,
Bangladesh and Sri Lanka. All these branch offices are operational. The branch offices are
undertaking business operations in respective countries. The branches play a key role in
supporting the Company to penetrate the market by providing local support for various
business activities.
Through these branches, your Company is engaged with a wide spectrum of
customers (Utilities, Industries, Distributors, OEMs etc.) in their respective countries.
20. Branch Auditors:
In terms of provisions of sub-section (8) of Section 143 of the Act
read with Rule 12 of the Companies (Audit and Auditors) Rules, 2014, the audit of the
accounts of the branch offices of the Company located outside India is required to be
conducted by the person(s) or firm(s) qualified to act as Branch Auditors in accordance
with the laws of that country.
in this regard, the Company has secured the Shareholders? approval
at its Third Annual General Meeting held on July 21, 2022 for authorizing the Board of
Directors/ Audit Committee to appoint Branch Auditors for any branch office of the Company
from time to time.
The Board of Directors at their Meeting held on February 6, 2023 has
appointed the following branch auditors for the Branch Offices of the Company to conduct
the audit for the financial year 2022-23:
| Branch office of the Company |
Name of Branch Auditors |
|
Md. Abdus Satter Sarkar, FCA, Partner of |
| Bangladesh Branch |
Mahfel Huq & Co., Chartered Accountants (Firm
Registration Number: P-46323) |
|
Keerthi Mihiripenna & Co, Chartered |
| Sri Lanka Branch |
Accountants (Firm Registration Number: WP 1419 ), Colombo |
|
Shashi Satyal, Partner of TR Upadhya & Co., |
| Nepal Branch |
Chartered Accountants (Firm Registration Number: 6) |
21. Environment, Social and Governance (ESG) Committee and Business
Responsibility and Sustainability Report (BRSR):
The Company is on a continuous improvement journey for creating
long-term value for its stakeholders.
in accordance with the guidance note for Environment, Social and
Governance Reporting issued by the SEBi, the Company has constituted the Environment,
Social and Governance (ESG) Committee at its Board Meeting held on October 22, 2021.
The details of the performance and reporting under ESG as a part of
mandatory disclosure from the financial year under review are included under the Business
Responsibility and Sustainability Report forming part of the Board?s Report.
Further, the sustainability initiatives taken by the Company including
sustainable development goals from an environmental, social and governance perspective is
available on the Company?s website and can be accessed at
https://www.hitachienergy.com/in/ en/sustainabilitv/sustainabilitv-overview
22. Significant and material orders passed by the regulators or courts
or tribunals impacting the going concern status of the Company:
During the financial year under review, no significant and material
orders were passed by the regulators or courts or tribunals impacting the going concern
status of the Company.
23. Deposits:
During the year under review, the Company has neither invited nor
accepted any deposits falling under the ambit of Section 73 of the Act and the Companies
(Acceptance of Deposits) Rules, 2014 framed thereunder.
24. Particulars of Loans, Guarantees or Investments:
During the financial year under review, the Company has not granted any
Loans, Guarantees, or made investments within the meaning of Section 186 of the Act.
25. Borrowing Limits:
The Board of Directors of your Company, at their Meeting held on May
24, 2023 has approved and recommended to the Shareholders for approval to increase the
existing borrowing limits of the Company from Rs 6,000 Crores to Rs 6,500 Crores by
enhancing the fund based limit by Rs 500 Crores. As a result, the revised borrowing limits
would be Rs 6,500 Crores (Rupees Six Thousand Five Hundred crores only) consisting of Rs
1,500 Crores towards fund based limits and Rs 5,000 Crores towards non-fund based
borrowings facilities.
The Resolution for increase in borrowing limits of the Company is
subject to approval of the Shareholders in the ensuing 4th Annual General Meeting of the
Company.
26. Related Party Transactions:
The Board of Directors has adopted a policy on Related Party
Transactions. The objective is to ensure proper approval, disclosure, and reporting of
transactions as applicable, between the Company and any of its related parties. The policy
on related party transactions is available at https://www.hitachienergv.com/in/en/
investor-relations/corporate-governance#policies
Particulars of the Contracts or Arrangements with related parties
referred to in Section 188(1) in the format specified as Form AOC-2 forms part of this
Report as Annexure-E. Further details of related party transactions are provided in Notes
to Financial Statements.
All contracts or arrangements with related parties were entered into
only with prior approval of the Audit Committee, except transactions that qualified as
Omnibus transactions as permitted under law.
There were no materially significant related party transactions that
could have potential conflict with the interests of the Company at large.
Details of the transaction(s) of the Company with the entity(ies)
belonging to the promoter/promoter group which hold(s) more than 10% shareholding in the
Company as required under Para A of Schedule V of the Listing Regulations are provided as
part of the financial statements.
27. Internal financial control systems and their adequacy:
The Directors have laid down internal financial controls to be followed
by the Company and such policies and procedures adopted by the Company for ensuring the
orderly and efficient conduct of its business, including adherence to the Company?s
policies, the safeguarding of its assets, the prevention and detection of frauds and
errors, the accuracy and completeness of the accounting records and the timely preparation
of reliable financial information. The Audit Committee evaluates the internal financial
control system periodically. The details of Internal Control System and their adequacy are
provided in the Management Discussion and Analysis section forming part of this report.
28. Audit Committee:
During the year under review, there was no change in the composition of
the Audit Committee. The powers and role of the Audit Committee are included in the
Corporate Governance Report, which forms an integral part of the Board?s Report. All
the recommendations made by the Audit Committee were accepted by the Board of Directors.
29. Reporting of frauds:
There was no instance of fraud during the financial year under review,
reported by the Statutory Auditors, Cost Auditors and Secretarial Auditors that were
required to be reported to the Audit Committee and/or Board under Section 143(12) of the
Act and Rules framed thereunder.
30. Whistle Blower Policy/ Vigil Mechanism:
The Company has adopted a whistle blower policy/ vigil mechanism for
Directors, Employees and third parties to report their concerns about unethical behavior,
actual or suspected fraud or violation of the Company?s Code of Conduct, leak of
unpublished price sensitive information and related matters.
This mechanism also provides adequate safeguards against the
victimization of whistle blowers who avail of the mechanism. The whistle blowers may also
access their higher level/ supervisors and/ or the Audit Committee. The Whistle Blower
Policy is available at https://www.hitachienergy.com/in/en/investor-relations/
corporate-governance#policies
31. Risk Management Policy:
The Company has in place the Risk Management Policy and constituted the
Risk Management Committee as required under the Companies Act, 2013 and Regulation 21 of
SEBI Listing Regulations.
The Committee oversees the Risk Management process including risk
identification, impact assessment, effective implementation of the mitigation plans and
risk reporting. The purpose of the Committee is to assist the Board of Directors in
fulfilling its oversight responsibilities with regard to enterprise risk management.
The details of the Committee and its terms of reference are set out in
the Corporate Governance Report and Management?s Discussion and Analysis Report
forming part of this Report.
32. Corporate Social Responsibility (CSR):
Corporate Social Responsibility (CSR) Committee has been constituted in
accordance with Section 135 of the Companies Act, 2013. The details of the composition of
the Committee, scope and functions are listed in the Corporate Governance Report annexed
to this Board?s Report.
The CSR Policy formulated by the Corporate Social Responsibility
Committee and approved by the Board continues unchanged. The policy can be accessed at
https://www.hitachienergy.com/in/en/investor-relations/ corporate-governance#other-reports
During the year under review, the Company has spent Rs 1.63 Crores on
CSR activities (both ongoing and other than ongoing projects). The Annual Report on CSR
activities as required under Section 135 of the Companies Act, 2013, read with Rule 8(1)
of the Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed as
Annexure-F forming an integral part of this Report.
33. Annual Return:
Pursuant to Section 92(3) of the Companies Act 2013, read with Rule 12
of the Companies (Management and Administration) Rules, 2014, the Company has placed a
copy of the annual return on its website and the same is available at
https://www.hitachienergy.com/ in/en/investor-relations/general-meetings#annual-
generalmeeting
34. Conservation of energy, technology absorption, foreign exchange
earnings and outgo:
The particulars relating to the Conservation of Energy, Technology
Absorption, Foreign Exchange Earnings and Outgo, as required to be disclosed under Section
134(3) (m) of the Companies Act, 2013, read with Companies (Accounts) Rules, 2014, is
provided in Annexure-G forming an integral part of this Report.
35. Particulars of Employees including Remuneration of Directors and
Employees:
The details related to remuneration and other details of the employees
drawing remuneration under Section 197(12) of the Act read with Rules 5(2) and 5(3) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of
this Report. None of the employees listed as per above are related to any Director / KMP
of the Company.
In terms of Section 136(1) of the Companies Act, 2013 and the Rules
made there under, the Annual Report is being sent to the Shareholders and others entitled
thereto excluding the aforesaid disclosure. Any Shareholder interested in obtaining the
same may write to the Company Secretary & Compliance Officer at
investorsQhitachienergv.com.
36. Disclosure as per the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013:
The Company has in place a policy in accordance with the provisions of
the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013, and the Rules thereunder that mandates no tolerance against any conduct amounting to
sexual harassment of women at the workplace.
The Company has also constituted an Internal Complaints Committee (ICC)
for reporting and conducting inquiries into the complaints made by the victim on
harassment at the workplace. Throughout the year, training and awareness events are held
to instill sensitivity towards creating a respectful workplace.
During the financial year under review, no complaints pertaining to
sexual harassment of women employees were received. Further, the Company has a web portal
known as "Hitachi Energy Ethics Web Portal" wherein employees can report/ raise
the workplace harassment concerns/ related incidents. The complaints as received via this
Portal was redressed and brought to the attention of the Audit Committee of the Board from
time to time.
37. Insolvency and Bankruptcy Code, 2016:
During the financial year under review, neither any application nor any
proceeding was initiated against the Company under the Insolvency and Bankruptcy Code,
2016.
38. Fractional Shares:
Pursuant to the Scheme of Arrangement, entered into between (i) ABB
India Limited ("INABB"/ "Transferor") and ii) the Company
("Company"/ "Transferee") and their respective shareholders and
creditors, in accordance with the provisions of Section 230 to 232 and other applicable
provisions of the Companies Act, 2013, the Company has allotted shares of the Company to
the shareholders of ABB India Limited in accordance with the share entitlement ratio.
Out of the total shares allotted to the shareholders of ABB India
Limited, the Company allotted 9,266
Equity shares (pursuant to fractional entitlements of Members of ABB
India Limited as per share entitlement ratio) to Hitachi Energy India Limited Fractional
Shares Trust 2019 ("Trust") on December 24, 2019. Catalyst Trusteeship Limited
("Catalyst") is acting as Trustee to the Trust effective April 30, 2020.
The total amount paid as on March 31,2023, stood at Rs 61.17 Lakhs
consisting of 19,894 Members eligible for the value of such fractional shares and the
total amount remained unpaid as on March 31,2023 stood at Rs 2.11 Lakhs pertaining to 725
Members eligible for the value of such fractional shares.
Further, on November 26, 2022, a reminder letter was sent through
registered post to all unpaid shareholders wherein the Company has requested the unclaimed
shareholders to claim the unclaimed fractional share sale proceeds by submitting the
Letter-Cum- Indemnity in the format shared with them.
39. Acknowledgements:
The Board of Directors wishes to place on record their appreciation for
all the guidance and cooperation received from its parent Company and all its customers,
members, suppliers, investors, shareholders, vendors, partners, bankers, associates,
government authorities and other stakeholders for their consistent support to the Company
in its operations.
The Board of Directors also records their appreciation of the
dedication of all the employees at all levels and their commitment to ensuring that the
Company continues to grow.
| By order of the Board |
| For Hitachi Energy India Limited |
| (Formerly known as ABB Power Products and Systems India Limited) |
| Achim Michael Braun |
| Chairman |
| DIN: 08596097 |
| Place: Bengaluru |
| Date: May 24, 2023 |
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