To
The Members
HRH Next Services Limited
Your Directors take pleasure in presenting the Eighteenth (18th) Annual Report together with the Audited Balance Sheet and the Statement of Profit or Loss for the period ended 31st March 2024 along with the Report of the Board & Statutory Auditors of your Company.
1. FINANCIAL HIGHLIGHTS:
The Company's financial performance, for the year ended 31st March 2024 is summarized below:
(Rupees in Lakhs)
Particulars
Total Income
Profit before Exceptional and Extraordinary items and tax
Profit Before Tax
Profit After Tax
2. FINANCIAL PERFORMANCE:
The Company continued on its growth trajectory in Financial Year 2023-24. During the financial year under review, your Company recorded revenue from operations amounted to Rs. 4537.08 Lakhs and earned profit after tax amounted to Rs. 184.27 Lakhs. The Company can capitalize on the market conditions through its operational excellence, higher efficiency and well executed strategies.
3. REVIEW OF BUSINESS OPERATIONS, STATE OF COMPANY'S AFFAIRS AND FUTURE PROSPECTS:
The Company is primarily engaged in the business of Business Process Outsourcing (BPO) offering a comprehensive suite of Call Centre Services, covering Inbound Services, Outbound Services, Backend Support, Chat Support, Email Support and more.
4. CHANGE IN NATURE OF BUSINESS
During the financial year under review, there was no changes in the nature of its business.
5. MATERIAL EVENTS DURING THE FINANCIAL YEAR:
During the year, the following material events were undertaken:
a. Conversion of the status of the Company from Private to Public on 25th August 2023.
b. Listing of Company on EMERGE Platform of National Securities Exchange Limited on 3rd January 2024.
c. Setting up a New Delivery Centre at Tumkur, Karnataka on 28th March 2024 to cater the needs of our valued customers in Tier 2 cities, especially in delivering unique services to our Kannada-speaking consumers.
6. DIVIDEND:
The Board of Directors of the Company did not recommend any dividend during FY 2023-24 as they want to plough back the profits for the future development of Company.
7. CORPORATE GOVERNANCE REPORT:
Your Company is an SME Listed Company as on the last day of the previous financial year. As such, according to Regulation 15(2)(a) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015, the compliances with respect to Corporate Governance disclosures are not applicable to your Company. However, your Company strives to incorporate the appropriate standards for Corporate Governance in the interest of the stakeholders of the Company.
8. TRANSFER TO RESERVES:
For the financial year ended on 31st March 2024, the Company had transferred:
a. Rs. 781.41 Lakhs to Securities Premium Account credit on IPO allotment in Reserves & Surplus.
b. Rs. 184.27 Lakhs to the Statement of Profit & Loss account in Reserves & Surplus
9. DEPOSITS:
During the financial year under review the Company has not accepted any deposits in pursuance of Chapter V Companies (Acceptance of Deposits) Rules, 2014.
10. SHARE CAPITAL AND INTIAL PUBLIC OFFERING:
a) The Authorized Share Capital of the Company is Rs. 10,00,00,000/- divided into 1,00,00,000 equity shares of Rs. 10/- each.
b) The issued share capital of the Company is Rs. 9,20,54,380/- divided into 92,05,438 equity shares of Rs. 10/- each.
c) The Paid-up Share Capital of the Company is Rs. 9,20,54,380/- divided into 92,05,438 equity shares of 10/- each.
The following are the changes in the share capital of the Company during the financial year under review:
d) Increase in Authroised Share Capital:
During the financial year under review, your Company has increased its Authorized Capital from Rs. 30,00,000 (Rupees Thirty Lakhs Only) divided into 3,00,000 (Three Lakhs) Equity Shares of Rs. 10/- each (Rupees Ten only) to Rs. 10,00,00,000 (Rupees Ten Crore Only) divided into 1,00,00,000 (One Crore) Equity Shares of Rs. 10/- (Rupees Ten only) each on 5th July 2023
e) Further Issue of Equity Shares:
During the financial year under review, your Company has allotted 60,00,000 (Sixty Lakh) Equity Shares of Rs. 10/- each on 24th July 2023 as Bonus Shares to Mr. Ankit Sanjay Shah, Mr. Parikshit Pankaj Shah and Mrs. Tara Sanjay Shah in the proportion of Equity Shares held by them in the Company.
f) Initial Public Offering (IPO):
During the financial year under review, your Company entered into the Securities Market through Initial Public Offering (IPO). The public issue comprised of Fresh Issue of 26,58,000 Equity Shares of Rs. 10/- each at a premium of Rs. 26/- per share aggregating to Rs. 9,56,88,000/-.
Equity Shares of the Company are listed at EMERGE SME platform of the National Stock Exchange of India Limited and is regularly traded on the exchange w.e.f. 3rd January 2024.
However, there was no change in the share capital of the Company after the closure of the financial year and on the date of this report.
11. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:
The Provisions of Section 125(2) of the Companies Act, 2013 does not apply as there was no dividend declared and paid during the last 7 years.
12. STATEMENT OF DEVIATION(S) OR VARIATION(S):
Out of the total proceeds i.e, Rs. 956.88 Lakhs raised by Initial Public Offer Rs. 955.86 Lakhs were utilized towards the objects as stated in the prospectus. Balance unutilized funds of Rs 1.02/- Lakhs are lying in escrow account maintained with ICICI Bank as on 31st March 2024.
13. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENT:
There are no material changes and commitments that occurred between the end of the financial year of the Company and date of this report which can affect the financial position of the Company:
14. DIRECTORS AND KEY MANEGERIAL PERSONNEL OF THE COMPANY:
The following are the Directors and Key Managerial Personnel of the Company:
15. RETIREMENT BY ROTATION:
Pursuant to provisions of Section 152 of the Companies Act, 2013, Mrs. Trishla Shah (DIN: 10242986), Director will retire at the ensuing Annual General Meeting and being eligible, offers herself for reappointment.
The Board recommends his re-appointment. The relevant details including profile of Mrs. Trishla Shah is included separately in the Notice of AGM forming part of this report.
16. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL APPOINTED OR RESIGNED DURING THE YEAR:
During the Financial year 2023-24 the following changes have taken place in the Directors and Key Managerial Personnel of the Company:
1 Mrs. Trishla Shah was appointed as an Additional Director of the Company by Board of Directors on 24th July 2023 and was further appointed as Whole-time Director in the Extra-Ordinary General Meeting held on 28th August 2023 w.e.f. 26th August 2023.
2 Mrs. Neha Agarwal was appointed as an Additional Director (Non-Executive & Independent Director) of the Company by Board of Directors on 21st August 2023 and thereafter with the approval of members her appointment was regularized as Director (Non-Executive & Independent Director) in the Extra-Ordinary General Meeting held on 28th August 2023 w.e.f. 21st August 2023.
3 Mr. Ankit Sanjay Shah was appointed as a Managing Director of the Company by Board of Directors w.e.f. 21st August 2023.
4 Mr. Gangadhar Sherla was appointed as a Chief Financial Officer of the Company by Board of Directors w.e.f. 21st August 2023.
5 Mr. Parikshit Pankaj Shah was appointed as Non-Executive Director of the Company by Board of Directors on 21st August 2023.
6 Mr. Srikanth Punati was appointed as a Director (Non-Executive & Independent Director), by the members of the Company in the Extra-Ordinary General Meeting held on 28th August 2023 w.e.f. 26th August 2023.
7 Mr. Akash Tiwari was appointed as a Company Secretary & Compliance Officer of the Company by Board of Directors w.e.f. 26th August 2023.
Apart from the details mentioned above, there were no appointments or resignation or changes in Directors or Key Managerial Personnel's during the financial year under review.
Also there were no Appointment, re-appointment and resignation of Directors or Key Managerial Personnel's after the closure of financial year and until the date of this report.
17. *COMMITTEES OF THE BOARD:
The Company constituted Audit Committee, Nomination and Remuneration Committee and Stakeholder Relationship Committee to comply with the provisions of the Companies Act, 2013.
1. AUDIT COMMITTEE:
The Audit Committee consists of:
i. Mr. Srikanth Punati (Non-Executive & Independent Director) - Chairperson;
ii. Ms. Neha Agarwal (Non-Executive & Independent Director) – Member;
iii. Mr. Parikshit Pankaj Shah (Non-Executive Director) - Member.
All the recommendations made by the members of Audit Committee were accepted by the Board.
2. NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee consists of:
3. STAKEHOLDER RELATIONSHIP COMMITTEE:
The Stakeholder Relationship Committee consists of:
iii. Mr. Ankit Sanjay Shah (Managing Director) - Member.
*The above committees were constituted on 1st September 2023.
18. NUMBER OF BOARD MEETINGS/ COMMITTEE/ SHAREHOLDERS MEETINGS CONDUCTED DURING THE YEAR:
a. Board Meeting:
During the year financial year under review, the Board met 16 (Sixteen) times. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 (the "Act"). Required quorum was present throughout each meeting as per the requirement of the said Act, the details of Board meetings are given below:
S. No.
Number of Board Meetings attended by each Director during the financial year 2023-24:
S. No. Name of Director
The Meetings of the following Committees held on the respective dates as mentioned below:
a. Audit Committee:
The Audit Committee met Three (3) times during the financial year i.e. 23rd September 2023, 16th December 2023, and 1st March 2024
b. Nomination and Remuneration Committee:
The Nomination and Remuneration Committee met once during the financial year on 1st March, 2024.
c. Stakeholders Relationship Committee:
The Stakeholders Relationship Committee met once during the financial year on 1st March, 2024
19. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134 (5) of the Companies Act, 2013, the Directors hereby confirm:
(i) That in the preparation of the annual accounts for the year ended 31st March 2024, the applicable accounting standards had been followed along with proper explanation relating to any material departures;
(ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 31st March 2024 and of the profit or loss of the company for that period;
(iii) that the directors had 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;
(iv) that the directors had prepared the annual accounts for the period ended 31st March 2024 on a going concern basis.
(v) that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
20. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (7) OF SECTION 149 OF THE COMPANIES ACT, 2013:
The Independent Directors have submitted the Declaration of Independence, as required pursuant to SubSection (7) Section 149 of the Companies Act, 2013 stating that they meet the criteria of independence as provided in (6) of section 149 of Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.
21. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS PROVIDED UNDER SUB-SECTION (3) OF SECTION 178:
The Company follows a policy on remuneration of directors and other senior managerial personnel. The Policy is recommended by the Nomination and Remuneration Committee and approved by the Board.
22. RELATED PARTY TRANSACTIONS:
All the related party transactions are entered in the ordinary course of business and on arm's length basis they are in compliance with the applicable provisions of Companies Act 2013 and listing regulations. Additional Disclosure Note No. 27 to the Financial Statements can be referred for detailed related party transactions.
The Company has adopted a related party transactions policy and the said policy as approved by the board is uploaded on the Company's website https://hrhnext.com/policies/
23. NAMES OF THE SUBSIDIARIES/ASSOCIATES/JOINT VENTURES:
Your Company has no Subsidiaries, Associates and Joint Ventures during the financial year under review.
24. MECHANISM FOR BOARD EVALUATION:
The board of directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of Schedule IV of the Companies Act, 2013.
The Directors evaluation was broadly based on the parameters such as understanding of the Company's vision, objective, skills, knowledge and experience, participation and attendance in Board/ Committee meetings; governance and contribution to strategy; interpersonal skills etc.
The Board has carried out the annual performance evaluation of its own performance, the Directors individually, as well as evaluation of the working of its Board Committees. A structured questionnaire was prepared covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board Culture, execution and performance of specific duties, obligations and governance.
A meeting of the Independent Directors was also held which reviewed performance of non-independent directors, performance of the board as a whole and performance of the chairman after taking into account the views of executive directors and non-executive directors and assess the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.
25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
As required by the provisions of Companies Act, 2013, the relevant information pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo are provided in Annexure – I.
26. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:
There were no significant and material orders that were passed by the regulators or courts or tribunals against your company.
27. ADEQUACY OF INTERNAL FINANCIAL CONTROLS:
The Company has effective ‘internal financial controls' that ensure an orderly and efficient conduct of its business, including adherence to company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information.
There are adequate controls relating to strategic, operational, environmental and quality related aspects too.
While these controls have been effective through-out the year, these are reviewed on a periodic basis for any changes/ modifications to align to business needs.
28. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
Except for the Non-Current Investments and Unsecured Advance specified in Note No.: 12 & 13 of the Financial Statements of the Company, there were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review
29. UNSECURED LOANS FROM DIRECTORS/RELATIVES OF THE COMPANY
During the year under review, the Company has not accepted any amount as unsecured loans from Directors or relatives of Directors or their relatives pursuant to the applicable provisions of the Companies Act, 2013.
30. RISK MANAGEMENT:
The Board of Directors of the Company formulates implements and monitors the risk management framework for the Company.
The Board evaluates risk management systems and internal financial controls. The Board reviews the internal audit findings, provides guidance on internal controls and ensures that the internal audit recommendations are implemented.
31. PARTICULARS OF EMPLOYEES:
Pursuant to Rule 5 pursuant to the Companies (Appointment and Remuneration Managerial Personnel) Rule, 2014 of the Companies Act, 2013, there are no employees who are in receipt of remuneration of Rs. 1,02,00,000/- or more per annum or Rs. 8,50,000/- or more per month or were employed for a part of the year as furnished in Annexure-II.
32. AUDITORS AND AUDITORS REPORT:
Your Company's Auditors R. Subramanian and Company LLP, Chartered Accountants bearing FRN: 004137S/S200041 have been appointed as Statutory Auditors of the Company in the 17th Annual General Meeting held on 27th September 2023 to hold the office for a period of five (5) years from the conclusion of the 17th Annual General Meeting till the conclusion of the 22nd Annual General Meeting in accordance with Section 139 of the Companies Act, 2013.
The Auditors' Report for Financial year 2023-24 does not contain any qualification, reservation or adverse remark. The Auditors' Report is enclosed with the financial statements in this Annual Report.
33. SECRETARIAL AUDITOR AND THEIR REPORT:
The Board has appointed R&A Associates, Company Secretaries a firm of Practicing Company Secretaries, Hyderabad as the Secretarial Auditors to conduct Secretarial Audit of the Company for the Financial Year ended 31st March 2024 in compliance with the provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report issued by R & A Associates, Company Secretaries, in Form MR-3 is enclosed as Annexure-III.
34. INTERNAL AUDIT:
Pursuant to provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rule, 2014 as amended from time to time, the Board of Directors had appointed Megha Bung & Co, Chartered Accountants, Hyderabad as an Internal Auditor of the Company to conduct internal audit of the Company.
35. EXPLANATION TO AUDITORS' REMARKS
Statutory Auditors: The observations made by the Auditor in their Report read with relevant notes as given in the Notes on Accounts for the year ended on 31st March, 2024 are self-explanatory and therefore do not call for any further comments under Section 134(3)(f) of the Companies Act, 2013.
Secretarial Auditors: The observations made by the Auditor in their Report read with relevant notes as given in the Notes on Accounts for the year ended on 31st March, 2024 are self-explanatory and therefore do not call for any further comments under Section 134(3)(f) of the Companies Act, 2013.
36. EXTRACT OF THE ANNUAL RETURN
Pursuant to Section 92 of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return is available on the website of the Company at https://hrhnext.com/annual-returns/
37. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis report has been separately furnished as Annexure-IV in the Annual Report and forms a part of the Annual Report.
38. POLICIES AND DISCLOSURE REQUIREMENTS:
In terms of provisions of the Companies Act, 2013 the Company has adopted following policies which are available on its website https://hrhnext.com/policies/
• Archival Policy
• Code of Conduct For Directors _ Senior Management Personnel
• Code of Practices And Fair Disclosure of UPSI
• Familiarization Programme For Independent Directors
• Materiality of Events Policy
• Nomination And Remuneration Policy
• Policy on Related Party Transactions
• Policy For Determining Material Subsidiary
• Policy For Inquiry in case of leak of UPSI
• Terms And Conditions – For the Appointment of an independent Director
• Whistle Blower Policy – Vigil Mechanism
• Policy on Prevention of Sexual Harassment of Women at Workplance
39. COMPLIANCE WITH SECRETARIAL STANDARDS:
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India while organizing the Board and Annual General Meetings.
40. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
The provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 are not applicable to the Company as on March 31, 2024. Hence, your Company is not required to adopt the CSR Policy or constitute CSR Committee during the year under review.
41. DISCLOSURE PERTAINING TO SEXUAL HARRASMENT OF WOMEN AT WORKPLACE:
Your directors promote a productive work environment and do not tolerate any conduct by any employee that disrupts, harasses, intimidates, or interferes with another's work performance. While all forms of harassment are prohibited, it is the policy of your Company to emphasize that sexual harassment, particularly towards women, is specifically prohibited. Every employee shall, at all the times, maintain office decorum in dealing with colleagues.
The Company has constituted Internal Complaint Committee (ICC) in terms of requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Also, there were no complaints reported under the Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
42. COST AUDIT AND DISCLOSURE RELATING TO MAINTENANCE OF COST RECORDS:
In terms of the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013, the cost audit is not applicable to this company.
43. DETAILS IN RESPECT OF FRAUDS REPORTED BY THE AUDITOR OTHER THAN THOSE WHICH ARE REORTABLE TO THE CENTRAL GOVERNMENT
During the year under review, the Statutory Auditors of the Company have not reported any frauds to the Board of Directors as prescribed under Section 143(12) of the Companies Act, 2013 and rules made thereunder.
44. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016
There is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year under review.
45. DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONETIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF
During the year under review, there was no one-time settlement done by the Company, accordingly disclosure with respect to difference in valuation and reasons thereof is not applicable.
46. VIGIL MECHANISM
The Board at its meeting adopted a vigil mechanism policy that provides a formal mechanism for all Directors and employees to report their genuine concerns while ensuring that the activities of the Company are conducted in a fair and transparent manner and approach the Board of Directors of the Company about the unethical behavior , actual or suspected fraud or violation of the Company's Code of conduct or ethics. During the year, there were no complaints received in this respect.
ACKNOWLEDGMENT:
Your Directors wish to place on record their appreciation to employees at all levels for their hard work, dedication and commitment. The Board also desires to place on record its sincere appreciation for the support and cooperation that the company received from the customers, strategic partners, bankers, auditors, consultants and all others associated with the company. The company looks upon them as partners in its progress. It will be the company's endeavor to build and nurture strong links with trade based on mutuality, respect and co-operation.
For and on behalf of the Board
Sd/-
HRH NEXT SERVICES LIMITED
ANKIT SANJAY SHAH
TRISHLA SHAH
Managing Director
Whole time Director
Place: Hyderabad
DIN: 00218044
DIN:02299110
Date: 10th July 2024
Add: H.No. 1-2-385/3, Domalguda Himayatnagar, Hyderabad – 500029, Telangana, India
Add: H. No.1-2-385/3, Gagan Mahal, Beside BSG Model School, Domalguda, Gagan Mahal, Himayathnagar, Hyderabad-500029, Telangana, India