To,
The Members
H.G. Infra Engineering Limited
Your directors (the "Board of Directors/"Board") are pleased to present the 22nd Annual Report of H.G. Infra Engineering Limited (the "Company"/ "HG INFRA") together with the Audited Financial Statements (standalone and consolidated) for the financial year ended March 31,2024 (the "Financial Year").
FINANCIAL RESULTS
The Company's financial performance (standalone and consolidated) for the year ended March 31,2024, is summarized below:
(Amount in Rs Million, except per share data)
RESULTS OF OPERATIONS AND STATE OF COMPANY'S AFFAIRS
Highlights of the Company's financial performance for the year ended March 31,2024, are as under:
Standalone
At the Standalone level, the Revenue from Operations increased to Rs 51,217.44 Million as against Rs 44,185.36 Million in the previous year, recording an increase of 15.91%. The Net Profit before Tax amounted to Rs 7,191.88 Million as against Rs 5,687.36 Million in the previous year recording an increase of 26.45%. The Net Profit after tax amounted to Rs 5,454.88 Million against Rs 4,213.83 Million reported in the previous year, recording an increase of 29.45% and total comprehensive income for the period amounted to Rs 5,482.04 Million as against Rs 4,206.09 Million in the previous year, recording an increase of 30.34%.
Consolidated
At the Consolidated level, the Revenue from Operations increased to Rs 53,784.79 Million as against Rs 46,220.08 Million in the previous year, recording an increase of 16.37%. The Net Profit before Tax amounted to Rs 7,399.17 Million as against Rs 6,645.74 Million in the previous year recording an increase of 11.34%. The Net Profit after tax amounted to Rs 5,385.86 Million against Rs 4,931.91 Million reported in the previous year, recording an increase of 9.20% and total comprehensive income for the period amounted to Rs 5,413.02 Million as against Rs 4,924.17 Million in the previous year, recording an increase of 9.93%.
BUSINESS OPERATIONS/ PERFORMANCE OF THE COMPANY AND ITS SUBSIDIARIES
During the financial year, the Company has secured the following orders:
• Doubling of Track between Karanjgaon station (Including) at Km 69.01(Ch 69010) & Aurangabad station (Including) at Km 113.15(Ch 113150) [i.e. (44.14 km)] including Electrification and Signaling works in connection with Aurangabad- Ankai Doubling Project in Nanded Division of South-Central Railway valued at Rs 4,471.10 Million.
• Construction of double line track (3rd & 4th line) formation including earth work, blanketing, minor bridges, major bridges, electrification works and other miscellaneous works for 32.5 T axle load including Electrical TRD (2x25 KV) in Gaya-Son Nagar section (in between DFCC CH:225.300 (IR CH:475.200) to DFCC CH:292.175 (IR CH:542.075)) in DDU Division of East Central Railway in the state of Bihar valued at Rs 7,091.10 Million.
• Construction of 4 lane Elevated corridor of Kalimandir- Dimna Chowk- Baliguma (Jamshedpur) Section of NH-33 (New NH-18) (from km 241.940 to km 251.961) (Length 10.021 km) under NH(O) on EPC mode in Jharkhand valued at Rs 6,101.10 Million.
• Controlled Highway of 4 Lane with Paved Shoulders from TN/AP Border (Design Chainage km 61 +51 ) to Puttur (Design Chainage Km 81+450) of NH-716 & 6 Lane with Paved Shoulders from Mallavaram (Design Chainage Km 97+100) to Renigunta (Design Chainage Km 114+500) of NH-71 in Andhra Pradesh on Hybrid Annuity Mode under NH(O) (Chennai Tirupati Package-II) valued at Rs 8,621.10 Million.
• Construction of New BG Line Between Dhule (Borvihir) to Nardana (Approx. 49.45 Km) of Central Railway valued at Rs 7,161.10 Million.
During the financial year, the Company has diversified into Renewable Energy sector and received solar power plant projects for development under KUSUM-C scheme for 543 megawatts DC valued at Rs1,307 Crores (EPC value).
Order book as on March 31, 2024, stood at Rs1,24,340 Million and out of the total order book, 83% are government contracts, and 17% are from private clients.
Projects Completed during the financial year:
During the financial year, the Company has received the provisional completion certificates/ completion certificates for the following projects:
• Amravati - Nandgaon - Morshi - Warud - Pandhurna:
Rehabilitation and Up-gradation of Amravati-Nandgaon - Morshi - Warud - Pandhurna National Highway from existing km 95+670 (on 140+200 NH-53, Nandgaon) to km 52+440 (Morshi) [Design km. 0.000 to km. 43.000] to two lane with paved shoulders in the state of Maharashtra on Engineering, Procurement and Construction (EPC) basis contract.
Rehabilitation and Up-gradation of Amravati-Nandgaon
- Morshi - Warud - Pandhurna National Highway from existing km 52+440 (Morshi) to km 0+000 (Maharashtra/ Madhya Pradesh State Border upto Wardha River Bridge) [Design km.43.000 to km.95.390] to two lane with paved shoulders in the state of Maharashtra on Engineering, Procurement and Construction (EPC) basis contract.
• Nagpur - Katol - Warud: Rehabilitation and Upgradation of Nagpur-Katol-Warud National Highway from existing Km 60+100(End of Katol Bypass) to Km 101+085 (Warud upto Joint Junction) of NH-353J (Design Chainage 60+100 to 100+565) to 2 lane with paved shoulder in the state of Maharashtra on Engineering, Procurement and Construction (EPC) basis contract.
• Morshi - Chandur Bazar - Achalpur: Rehabilitation and up gradation of Morshi- Chandur Bazar- Achalpur (Design chainage from km.0.000 to km. 53.719) road section of NH-353K, to two lanes with paved shoulder configuration on EPC mode in the state of Maharashtra.
• Rewari - Ateli Mandi: Up-gradation of four lane of Rewari- Ateli Mandi section of NH-11 from km 11.780 to Rewari to EX km 43.445 near Ateli Mandi (designed length 30.45 km) as feeder Route in the state of Haryana on Hybrid Annuity Mode- Package III.
• Rewari - Bypass: Construction of proposed Rewari Bypass (NH-11) as feeder route in Rewari district in the state of Haryana (Design length - 14.40KM) on Hybrid Annuity Mode- Package III.
• Nandurbar - Praksha - Shahada - Khetia: Rehabilitation and Up-gradation of Nandurbar (Near Kolde) - Praksha
- Shahada - Khetia (SH-4 & SH-5) State Highway from existing km 50+260 of SH-5, (Kolde) to Km 90+220 (Khetia) [Design km 50+200 to km 98+800) to Two lane with paved shoulders/4 lane in the state of Maharashtra on Engineering, Procurement and Construction (EPC) basis Contract.
INFORMATION ABOUT HOLDING / SUBSIDIARIES / JOINTLY CONTROLLED OPERATIONS / ASSOCIATE COMPANIES
As on March 31,2024, the Company has 11 (eleven) wholly owned subsidiaries (the "WoS"), 2 (two) associates, 2 (two) step down subsidiaries and 1 (one) jointly controlled operations. During the financial year, the Company incorporated 4 (four) wholly owned subsidiaries, 2 (two) step down subsidiaries whereas 3 (three) Companies ceased to be the Company's subsidiaries. The details of which are provided hereunder:
The Company does not have any holding Company as on March 31,2024.
Performance of subsidiaries, associates, and joint ventures
In accordance with Section 129(3) of the Companies Act, 2013 (the "Act"), a statement containing salient features of the financial statements of the subsidiary companies in the prescribed format Form AOC-1 is annexed as "Annexure-I" to this Report. The statement also provides details of the performance and financial position of each of the subsidiaries, associates, and jointly controlled operations and their contribution to the overall performance of the company during the financial year. Audited financial statements, together with related information and other reports of each of the subsidiary companies, can be accessed on the Company's website at https://hginfra.com/investors- relation.html#btn-quart
The Company funds its subsidiaries, from time to time, in the ordinary course of business, through equity, loan and/or other means to meet their funding requirements.
According to the Company's Policy on determining "material subsidiary," during the financial year, H.G. Raipur Visakhapatnam OD-5 Private Limited, was determined as the material subsidiary whose income exceeded 10% of the Company's consolidated income in the immediately preceding financial year.
The Company's Policy for determining material subsidiary Company can be accessed on the Company's website at https://hginfra.com/investors-relation.html#btn-policy
The details of subsidiaries, associates, and jointly controlled operations are mentioned below:
A. Wholly owned Subsidiary Companies
(1) Gurgaon Sohna Highway Private Limited (GSH)
GSH was incorporated as a Special Purpose Vehicle (SPV) on April 06, 2018, to domicile a project allotted by the National Highways Authority of India (NHAI) i.e. "Construction of Six laning and strengthening of new NH- 248A from existing km 11+682 to existing km. 24+400 in the state of Haryana Package-2: Existing Ch. Km 11+682 to km 24+400 (Design Ch. km 9+282 to km 22+000) under NHDP Phase IV on Hybrid Annuity Mode".
Highlights of the performance of GSH and its contribution to the overall performance of the Company during the financial year are as follows:
(Amount in Rs Million)
During the financial year, GSH ceased to be a wholly owned subsidiary of the Company with effect from November 21, 2023, due to the sale of its 100% shareholding by HG INFRA.
(2) H.G. Rewari Ateli Highway Private Limited (HGRAH)
HGRAH was incorporated as a Special Purpose Vehicle (SPV) on April 08, 2019, to domicile a project allotted by the National Highways Authority of India (NHAI), i.e. "Upgradation of Four Lane of Rewari-Ateli Mandi Section of NH-11 from km 11.780 at Rewari to Ex. Km 43.445 near Ateli Mandi (designed length 30.45 km) as Feeder Route PKG-III in the State of Haryana on Hybrid Annuity Mode."
Highlights of the performance of HGRAH and its contribution to the overall performance of the Company during the financial year are as follows:
During the financial year, HGRAH ceased to be a wholly owned subsidiary of the Company with effect from November 21, 2023, due to the sale of its 100% shareholding by HG INFRA.
(3) H.G. Ateli Narnaul Highway Private Limited (HGANH)
HGANH was incorporated as a Special Purpose Vehicle (SPV) on April 04, 2019, to domicile a project allotted by the National Highways Authority of India (NHAI) i.e. "Construction of proposed Narnaul Bypass (design length 24.0 km) & Ateli Mandi to Narnaul Section of NRs 11 from km 43.445 to km 56.900 (design length 14.0 km) as an Economic Corridor & Feeder route PKG-II in the State of Haryana on Hybrid Annuity Mode."
Highlights of the performance of HGANH and its contribution to the overall performance of the Company during the financial year are as follows:
During the financial year, HGANH ceased to be a wholly owned subsidiary of the Company with effect from November 21, 2023, due to the sale of its 100% shareholding by HG INFRA.
(4) H.G. Rewari Bypass Private Limited (HGRB)
HGRB was incorporated as a Special Purpose Vehicle (SPV) on May 01, 2020, to domicile a project allotted by the National Highways Authority of India (NHAI) i.e. "Construction of proposed Rewari Bypass (NH-11) as Feeder Route in Rewari District in the State of Haryana (Design length-14.40 km) on Hybrid Annuity Mode."
Highlights of the performance of HGRB and its contribution to the overall performance of the Company during the financial year are as follows:
(5) H.G. Raipur Visakhapatnam AP-1 Private Limited (HGRVAP-1)
HGRVAP-1 was incorporated as a Special Purpose Vehicle (SPV) on August 19, 2021, to domicile a project allotted by the National Highways Authority of India (NHAI) i.e. "Development of Six Lane Aluru-Jakkuva section of NH-130-CD Road from km 365+033 to km 396+800 under Raipur-Visakhapatnam Economics Corridor in the state of Andhra Pradesh on Hybrid Annuity Mode (HAM) [Package-1(AP)]."
Highlights of the performance of HGRVAP-1 and its contribution to the overall performance of the Company during the financial year are as follows:
(6) H.G. Khammam Devarapalle PKG-1 Private Limited (HGKD PKG-1)
HGKD PKG-1 was incorporated as a Special Purpose Vehicle (SPV) on October 14, 2021, to domicile a project allotted by the National Highways Authority of India (NHAI) i.e. "Construction of 4 lane Access Controlled New Greenfield Highway Section of NH- 365BG (Khammam- Devarapalle) of length 33.604 km from Thallampadu village to Somavaram village (Design Ch. Km 0+000 to km 33+604) under Inter Corridor Route under Bharatmala Pariyojana, on Hybrid Annuity mode in the state of Telangana(Package-I)."
Highlights of the performance of HGKD PKG-1 and its contribution to the overall performance of the Company during the financial year are as follows:
(7) H.G. Khammam Devarapalle PKG-2 Private Limited (HGKD PKG-2)
HGKD PKG-2PL was incorporated as Special Purpose Vehicle (SPV) on October 14, 2021, to domicile a project allotted by the National Highways Authority of India (NHAI) i.e. "Construction of 4 lane Access Controlled New Greenfield Highway Section of NH- 365BG (Khammam- Devarapalle) of length 29.513 km from Somavaram village to Chintagudem village (Design Ch. Km 33+604 to km 63+117) under Inter Corridor Route under Bharatmala Pariyojana on Hybrid Annuity mode in the state of Telangana (Package-II)."
Highlights of the performance of HGKD PKG-2 and its contribution to the overall performance of the Company during the financial year are as follows:
(8) H.G. Raipur-Visakhapatnam OD-6 Private Limited (HGRV OD-6)
HGRV OD-6 was incorporated as a Special Purpose Vehicle (SPV) on November 22, 2021, to domicile a project allotted by the National Highways Authority of India (NHAI) i.e. "Development of Six Lane Baunsaguar-Baraja Section of NH-130-CD Road from km 293+000 to km 338+500 under Raipur-Visakhapatnam Economics Corridor in the state of Odisha on Hybrid Annuity mode [Package- OD-6]."
Highlights of the performance of HGRV OD-6 and its contribution to the overall performance of the Company during the financial year are as follows:
(9) H.G. Raipur-Visakhapatnam OD-5 Private Limited (HGRV OD-5)
HGRV OD-5 was incorporated as a Special Purpose Vehicle (SPV) on November 24, 2021, to domicile a project allotted
by the National Highways Authority of India (NHAI) i.e. "Development of Six Lane Kaliagura-Baunsaguar Section of NH-130-CD Road from km 249+000 to km 293+000 under Raipur-Visakhapatnam Economics Corridor in the state of Odisha on Hybrid Annuity Mode [Package-OD-5]."
Highlights of the performance of HGRV OD-5 and its contribution to the overall performance of the Company during the financial year are as follows:
(10) H.G. Karnal-RingRoad Private Limited (HGKR)
HGKR was incorporated as a Special Purpose Vehicle (SPV) on March 21, 2023, to domicile project allotted by the National Highways Authority of India (NHAI) i.e. "Construction of 6-lane Greenfield Karnal Ring Road starting from NH-44 near Village Shamgarh (Design km 0+000) and terminating at Karnal -Munak Road (MDR 115) near Village Samalakha (Design km 34 + 500) under Bharatmala Pariyojana in the state of Haryana on Hybrid Annuity Mode [Package-OD-5]."
Highlights of the performance of HGKR and its contribution to the overall performance of the Company during the financial year are as follows:
(11) H.G. Varanasi-Kolkata PKG-13 Private Limited (HGVK PKG-13)
HGVK PKG-13 was incorporated as a Special Purpose Vehicle (SPV) on April 25, 2023, to domicile a project allotted by the National Highways Authority of India (NHAI) i.e. "Construction of 6-lane Greenfield Varanasi-Ranchi- Kolkata Highway from junction with NH-320 in Lepo village to Kamlapur village (JH/WB border) from km 358.500 to km 387.200 under Bharatmala Pariyojana in the state of Jharkhand on Hybrid Annuity Mode (Package 13).
Highlights of the performance of HGVK PKG-13 and its contribution to the overall performance of the Company during the financial year are as follows:
(12) H.G. Varanasi-Kolkata PKG-10 Highway Private Limited (HGVK PKG-10)
HGVK PKG-10 was incorporated as a Special Purpose Vehicle (SPV) on April 27, 2023, to domicile project allotted by the National Highways Authority of India (NHAI) i.e. "Construction of 6-lane Greenfield Varanasi-Ranchi- Kolkata Highway from Deoria village to Donoreshan village from km 253.000 to km 288.600 under Bharatmala Pariyojana in the State of Jharkhand on Hybrid Annuity Mode (Package 10)
Highlights of the performance of HGVK PKG-10 and its contribution to the overall performance of the Company during the financial year are as follows:
(13) H.G. Foundation
H.G. Foundation was incorporated as a Section 8 company under the Companies Act, 2013 on October 25, 2023, with charitable objects and similar activities.
Highlights of the performance of H.G. Foundation and its contribution to the overall performance of the Company during the financial year are as follows:
(14) H.G. Solar Projects Private Limited (HGSP)
HGSP was incorporated as a wholly owned subsidiary on February 17, 2024, to carry on the business of solar power and related activities.
Highlights of the performance of HGSP and its contribution to the overall performance of the Company during the financial year are as follows:
B. Step down Subsidiary Companies
(1) Norangdesar Solar Project Private Limited (NSP)
NSP was incorporated as a Step down subsidiary on March 10, 2024, to carry on the business of solar power and related activities.
Highlights of the performance of NSP and its contribution to the overall performance of the Company during the financial year are as follows:
(2) Rasisar Solar Project Private Limited (RSP)
RSP was incorporated as a Step down subsidiary on March 10, 2024, to carry on the business of solar power and related activities.
Highlights of the performance of RSP and its contribution to the overall performance of the Company during the financial year are as follows:
C. Associates
(1) Safety First Engineering Private Limited (SFEPL)
The Company acquired a stake of 26% in SFEPL on August 24, 2022, a Gurgaon-based Company engaged in the business of operations of supply and service of safety items, including metal beam crash barriers, wire rope safety barriers, pavement marking, noise barriers etc.
Highlights of the performance of SFEPL during the financial year are as follows:
(2) Safety First
The Company acquired 26% control in Safety First on May 01, 2022, a New Delhi-based registered partnership firm engaged in the business of supply and service of safety items, including metal beam crash barriers, wire rope safety barriers, pavement marking, noise barriers etc.
Highlights of the performance of Safety First during the financial year are as follows:
D. Jointly controlled operations (1) HGIEPL-Ranjit JV
The Company and Ranjit Buildcon Limited formed a Joint venture on May 15, 2015, to collaborate in the name and style of HGIEPL-Ranjit JV for "Development and Construction of Four Laning of Babatpur -Varanasi Section of NH-56 (km 263/000 to 280/250) in the state of Uttar Pradesh on Engineering, Procurement and Construction (EPC) basis."
Highlights of the performance of HGIEPL-Ranjit JV during the financial year are as follows:
During the financial year, HGIEPL-Ranjit JV dissolved on March 29, 2024.
(2) HGIEPL-MGCPL JV
The Company and M.G. Contractors Private Limited formed a Joint venture on August 30, 2014, to collaborate in the name and style of HGIEPL- MGCPL JV for "Rehabilitation and augmentation of Two-Laning from Chanlang District Boundary to Khonsa section of NH-52B (New NH-215) from km. 0.00 to km. 42.844 in the state of Arunachal Pradesh under Arunachal Pradesh Package of SARDP_ NE on Engineering, Procurement and Construction (EPC) basis."
Highlights of the performance of HGIEPL- MGCPL JV during the financial year are as follows:
CAPITAL, SHARES AND DEBENTURES
The current capital structure of the Company is given below:
Authorized Capital:
There was no change in the Authorized Capital of the Company during the financial year. The Authorised Capital of the Company as on March 31,2024, stood at Rs 80,00,00,000 (Rupees Eighty Crore only) consisting of 8,00,00,000 (Eight Crore) equity shares of a face value of Rs 10 each.
Issued, Subscribed & Paid-up Capital:
There was no change in the issued, subscribed, and paid-up Capital of the Company during the financial year. The issued, subscribed and paid-up Capital of the Company as on March 31, 2024 stood at Rs 65,17,11,110 (Rupees Sixty Five Crore Seventeen Lakh Eleven Thousand One Hundred Ten only) consisting of 6,51,71,111 (Six Crore Fifty One Lakh Seventy One Thousand One Hundred Eleven) Equity Shares of Rs 10 each.
The Company has not issued any preference shares.
Non-Convertible Debentures (NCDs):
The Company has 970 outstanding Rated, Listed, Senior, Secured, Redeemable, Non-Convertible Debentures ("NCDs") (ISIN: INE926X07017), each having a face value of Rs 10,00,000 for an aggregate nominal value of Rs 970 Million, issued on a private placement basis on December 21,2021. The NCDs of the Company are listed on the Wholesale Debt Market segment of BSE Limited.
During the financial year 2023-24, the outstanding amount of NCDs was reduced from Rs 970 Million to Rs 808.33 Million on September 21, 2023, Rs 646.67 Million on December 21, 2023, and further reduced to Rs 485.00 Million upon part principal redemptions. Accordingly, the face value of NCDs has been reduced to Rs 0.50 Million as on March 31,2024.
The interest amounts on NCDs were paid by the Company on due dates and there was no instance of interest amount not claimed by the investors or not paid by the Company.
The Company has appointed MITCON Credentia Trusteeship Services Limited as the debenture trustee for the benefit of the debenture holders. The details of the Debenture Trustee are available on the Company's website at https://hginfra.com/ investors-relation.html#btn-investor
The Company is exempted from the requirement to create a Debenture Redemption Reserve (DRR) on privately placed debentures. Therefore, the Company has not created a DRR.
DIVIDEND
The Company recommended/declared dividends as under:
The aforesaid final dividend is being paid by the Company from its profits.
The payment of Rs. 1.50 (15%) per equity share of Rs. 10 each fully paid-up as final dividend for the financial year 2023-24 has been recommended by the Board, at its meeting held on May 08, 2024. The payment of dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting ("AGM") of the Company.
No interim dividend declared by the Board during the aforesaid financial years.
The dividend recommended is in accordance with the Company's Dividend Distribution Policy. In accordance with the provision of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "Listing Regulations"), the Dividend Distribution Policy is available on the Company's website at https://hginfra.com/investors-relation.html#btn-policy
The Company declares and pays dividends in Indian rupees. The Company is required to pay/distribute dividends after deducting applicable withholding taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.
The Dividend Distribution Policy (‘DD Policy') sets out the parameters and circumstances to be considered by the Board in determining the distribution of dividend to its shareholders and/or the utilisation of the retained profits earned by the Company. The Board of Directors of the Company, considering the business & financial parameters, internal and external factors as mentioned in the DD Policy, recommended the payment of final dividend of Rs. 1.50 (15%) per equity share of Rs. 10 each fully paid-up for the financial year 2023-24.
The details of dividends declared and paid by the Company for the last five years are disclosed in the Corporate Governance Report, which forms part of this report.
UNCLAIMED DIVIDEND AND TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
In compliance with Sections 124 and 125 of the Act read with Investor Education and Protection Fund Authority (Accounting, Audit, T ransfer and Refund) Rules, 2016, any money transferred to the Unpaid Dividend Account of a Company in pursuance of these sections, which remains unpaid or unclaimed for a period of seven years from the date of such transfer shall be transferred by the Company along with interest accrued, if any, thereon to the Fund established under sub-section (1) of section 125 of the Act i.e. Investor Education and Protection Fund.
During the financial year, the Company was not liable to transfer any unclaimed dividends and corresponding shares thereto to IEPF. The details of the unclaimed dividend amount lying with the Unpaid Dividend Account can be accessed on the Company's website at https://hginfra.com/investors-relation.html#open and also submitted to the Ministry of Corporate Affairs ("MCA") and with IEPF Authority. The same can also be accessed through the website of IEPF at www.iepf.gov.in
TRANSFER TO RESERVES
During the financial year, no amount was transferred to any of the reserves by the Company. The Total Other Equity (including securities premium and retained earnings) as on March 31, 2024, is Rs 23,898.60 Million (on a Consolidated Basis) as against the Paid-up Capital of Rs 651.71 Million.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
As per Section 186(11) of the Act, except Section 186(1), nothing contained in section 186 of the Act shall apply to any loan made, any guarantee given, or any security provided, or any investment made by a Company engaged in the business of providing infrastructural facilities. Since the Company is engaged in the business of Infrastructure & Construction, the criteria of section 186 are not applicable to the Company except sub-section (1) of Section 186 of the Act.
Details of loans, guarantees and investments under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on March 31,2024, are set out in Note No. 43 to the Standalone Financial Statements of the Company.
DEPOSITS
During the financial year, the Company has not accepted deposits from the public falling within the ambit of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 and hence no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.
PARTICULARS OF CONTRACT AND ARRANGEMENTS MADE WITH RELATED PARTIES
In accordance with the provisions of Section 188 of the Act and rules made thereunder, all the contracts/arrangements/ transactions entered by the Company during the year under review with Related Parties were on an arm's length basis and in compliance with the applicable provisions. All related party transactions were approved by the Audit Committee as per the provisions of the Act and the Listing Regulations. The policy on related party transactions is available on the Company's website at https://hginfra.com/investors-relation.html#btn-policy
The details of the Related Party Transactions are set out in the Notes to Financial Statements forming part of this Report. During the financial year, there are no material significant related party transactions entered by the Company with Promoters, Directors, Key Managerial Personnel or other Designated Persons and their relatives that may have a potential conflict with the interests of the Company at large.
During the financial year, the Company had entered material Related Party Contracts/ arrangements with wholly owned subsidiaries of the Company. The details of which are disclosed in Form AOC-2 as "Annexure-II".
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of the Listing Regulations, the Management Discussion and Analysis (‘MD & A') Report is forming part of this Report.
BOARD POLICIES
The details of the policies approved and adopted by the Board as required under the Act and Securities and the Listing Regulations can be accessed on the Company's website at https://hginfra.com/investors-relation.html#btn-policy
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report except the followings:
1) H.G. Chennai-Tirupati (II) Highway Private Limited has been incorporated as a wholly owned subsidiary as a Special Purpose Vehicle (SPV) on April 08, 2024 for domiciling a project allotted by National Highways Authority of India i.e. "Construction of Access Controlled Highway of 4 Lane with Paved Shoulders from TN/AP Border (Design Chainage km 61+51) to Puttur (Design Chainage Km 81+540) of NH-716 & 6 Lane with Paved Shoulders from Mallavaram (Design Chainage Km 97+100) to Renigunta (Design Chainage Km 114+500) of NH-71 in Andhra Pradesh on Hybrid Annuity Mode under NH(O) (Project Length-37.43 km) (Chennai- Tirupati Package-II).
2) H.G. Solar Park Private Limited has been incorporated as a wholly owned subsidiary on April 23, 2024, for carrying on the business of Solar and related activities.
3) H.G. Jodhpur Solar Energy Private Limited has been incorporated as a wholly owned subsidiary on April 24, 2024, for domiciling a project for carrying on the business of Solar and related activities.
4) H.G. Solar Project Developer Private Limited has been incorporated as a wholly owned subsidiary on April 24, 2024, for carrying on the business of Solar and related activities.
5) H.G. Green Hydrogen Power Private Limited has been incorporated as a wholly owned subsidiary on April 24, 2024, for carrying on the business of Solar and related activities.
6) H.G. Solar Park Developer Private Limited has been incorporated as a wholly owned subsidiary on April 26, 2024, for carrying on the business of Solar and related activities.
HUMAN RESOURCE DEVELOPMENT
The Company has demonstrated a strong growth trajectory over the years, propelled by its successful execution of infrastructure projects and a commitment to quality and timely delivery. This financial year presents new opportunities for growth and building a sustainable business landscape. To achieve organizational goals and create a great workplace, the HR department has identified the following focus areas:
• Strategical Talent Acquisition:
The experienced team is instrumental in civil execution works by ensuring the right people are brought in at the right time. The company's core focus is to build a robust frontline team efficiently. The Company is in the process of collaborating with various institutions to recruit quality trainees.
• Workplace Culture and Employee Experience:
The Company is dedicated to fostering an inclusive and diverse culture that promotes collaboration, transparency, and open communication. Employee experience initiatives are prioritized, ensuring that employees feel valued, supported, and empowered in their roles.
• Managerial & Leadership Development Programs:
Managerial and leadership development programs are of utmost importance to the Company. These programs aim to nurture and enhance the skills and capabilities of managers and leaders, enabling them to navigate complex challenges effectively and drive organizational success.
• Process Digitization & Automation
We ensure continuous improvement and innovation in our internal departmental processes by simplifying the workflows and enabling employees to focus on strategic and value-added tasks.
Prevention and redressal of sexual harassment policy, and disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH ACT")
• Internal Complaints Committee (ICC):
The Company has instituted an Internal Complaints Committee (ICC) to redress and manage sexual harassment complaints in a timely manner. The Committee is chaired by a female employee employed at a senior level amongst the employees and has an external senior representative who is a subject matter expert. The Board is periodically updated on matters arising out of the policy/ framework and on certain incidents, if any.
• Policy on Prevention of Sexual Harassment at Workplace (POSH) and Awareness:
The Company has zero tolerance towards sexual harassment and is committed to providing a safe environment for all. The Company's policy is inclusive, irrespective of the gender or sexual orientation of an individual. It also includes situations around work from home scenarios.
To create awareness on this sensitive and important topic, training/awareness programs are conducted throughout the year to create sensitivity towards ensuring a respectable workplace.
Pursuant to the POSH Act, the details regarding the number of complaints received, disposed, and pending during the financial year, pertaining to incidents under the above framework/ law are as follows:
Particulars of Employee Remuneration
The directors would like to place on record their sincere appreciation for the contributions made by employees of the Company at all levels. The ratio of the remuneration of each
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Director to the median employee's remuneration including other details and the list of top 10 employees in terms of remuneration drawn in terms of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is set out in "Annexure-VI" to this Report. Other details as required under Section 197(12) of the Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is available on the website of the Company, at https://hginfra.com/ investors-relation.html#btn-annual
CORPORATE GOVERNANCE
Maintaining high standards of Corporate Governance has been fundamental to the business of the Company since its inception. A separate report on Corporate Governance together with a Certificate from the Practicing Company Secretary of the Company regarding compliance with the conditions of Corporate Governance as stipulated under the Listing Regulations is forming part of this Report as "Annexure IV".
A Certificate of the Managing Director / Chief Financial Officer of the Company in terms of the Listing Regulations, inter-alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, also forming part of this Report.
Meetings of the Board
During the financial year, six (6) Board meetings were convened and duly held. The intervening gaps between the said meetings were in accordance with the provisions of the Act, relevant Rules made thereunder, Secretarial Standards issued by the Institute of Company Secretaries of India and provisions of the Listing Regulations.
The details of the Board meetings held during the financial year and the Directors' attendance are given in the Report of Corporate Governance, which forms part of this Report as "Annexure IV."
Directors and Key Managerial Personnel
The Board comprises highly experienced persons of repute and eminence. The Board has a good and diverse mix of Executive and Non-Executive Directors with the majority of the Board Members comprising Independent Directors. The Board composition is in conformity with the applicable provisions of the Act and the Listing Regulations, as amended from time to time. As on March 31,2024 and date of this Annual Report, the Board consists of 8 directors comprising of five (5) Independent Directors and three (3) Executive Directors. The composition of the Board represents an optimal mix of professionalism, knowledge and experience and enables the Board to discharge its responsibilities and provide effective leadership to the business. The Board as part of its succession planning exercise, periodically reviews its composition to ensure that the same is closely aligned with the strategy and long term needs of the Company.
The Board and Board's Committees composition, tenure of directors, areas of expertise and other details are available in the Corporate Governance Report, forming part of this Report.
• Appointment / Re-appointment
In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Act and the Articles of Association of the Company, Mr. Dinesh Kumar Goyal, Executive Director (DIN: 02576453), is liable to retire by rotation at the ensuing annual general meeting and being eligible has offered himself for re-appointment.
The disclosures required pursuant to Regulation 36 of the SEBI Listing Regulations and the SS-2 on General Meeting are given in the Notice of AGM, forming part of this Report.
During the financial year, Ms. Sharada Sunder (DIN: 07599164) and Ms. Monica Widhani (DIN: 07674403) were regularized as Directors (Independent) in the Extra Ordinary General Meeting of the shareholders held on May 04, 2023 for a first term of 5 (Five) consecutive years with effect from February 08, 2023 to February 07, 2028, who were appointed as an Additional Directors (Independent) in a board meeting dated February 08, 2023.
During the financial year, no Director of the Company has resigned.
Apart from above there were no changes made in the composition of the Board of the Company during the financial year.
• Independent Directors
In terms of Section 149 of the Act and the Listing Regulations, Mr. Ashok Kumar Thakur, Mr. Manjit Singh, Ms. Monica Widhani, Ms. Pooja Hemant Goyal, and Ms. Sharada Sunder are the Company's Independent Directors as on March 31,2024 and as of the date of this Report.
All Independent Directors of the Company have given declarations under Section 149(7) of the Act, that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. The Independent Directors have also confirmed that they have registered themselves with the Independent Director's Database maintained by the Indian Institute of Corporate Affairs, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.
The Board believes that the Independent Directors possess the requisite expertise and experience (including the proficiency) and are persons of high integrity and repute. They fulfill the conditions specified in the Act and the Listing Regulations and are independent of the management of the Company.
• Key Managerial Personnel
In terms of the provisions of Section 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any amendments thereunder), the Key Managerial Personnel ("KMPs") of the Company during the financial year were:
• Mr. Harendra Singh, Managing Director
• Mr. Vijendra Singh, Executive Director
• Mr. Dinesh Kumar Goyal, Executive Director
• Mr. Rajeev Mishra, Chief Financial Officer
• Ms. Ankita Mehra, Company Secretary
During the financial year, there were no changes to the KMP of the Company.
Committees of the Board
As of March 31, 2024, the Board had five statutory board committees: the Audit Committee, the Corporate Social Responsibility Committee, the Nomination and Remuneration Committee, the Risk Management Committee and the Stakeholders Relationship Committee.
During the financial year, all recommendations made by the Board's including the Audit Committee were approved by the Board.
A detailed note on the composition of the Board and its Committees is provided in the Corporate Governance Report, forming part of this report as "Annexure IV."
Certificate from Practicing Company Secretaries
None of the Director of the Company are disqualified from being appointed as Directors as specified under Section 164(1) and 164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualifications of Directors) Rules, 2014 or are debarred or disqualified from being appointed or continuing as directors by the SEBI, MCA or any other such statutory authority.
The Company has received a certificate in this regard from M/s Deepak Arora & Associates (Firm Registration No. P2001RJ080000), Practicing Company Secretaries, which forms part of this Report.
Familiarization Programs for Independent Directors
The Company familiarizes its Independent Directors through various programs/presentations whenever a new Independent Director is appointed to the Board. Such programs/presentations provide an opportunity for the Independent Directors to interact with the Senior Management of the Company and help them understand the Company's strategies, operations, products, organization structure, market, and other relevant areas, etc.
New Independent Directors are provided with a copy of the Latest Annual Report, Code of Conduct, Memorandum and Articles of Association of the Company and the Code of Conduct for Prevention of Insider Trading. They are also made aware of their role, rights, and responsibilities at the time of their appointment or reappointment through a formal appointment letter that also specifies the various terms and conditions of their engagement.
Regular updates on the key developments occurring in the Company are informed to Independent Directors from time to time.
Details of familiarization programmes imparted to the Independent Directors are given in the Report on Corporate Governance, which forms part of this Report as "Annexure IV."
Criteria for determining qualifications, positive attributes and independence of a director
In terms of the provisions of Section 178(3) of the Act and Regulation 19 of the Listing Regulations, the Nomination and Remuneration Committee ("NRC") has formulated the criteria for determining qualifications, positive attributes and independence of Directors, the key features of which are as follows:
Annual evaluation of board performance and performance of its committees and directors
The Board has carried out an annual evaluation of its own performance, Board's Committees, and individual directors (including Independent Directors) pursuant to the provisions of the Act and the Listing Regulations.
The Board evaluated its performance after seeking input from all the directors based on criteria such as the Board's composition and structure, the effectiveness of Board processes, information and functioning, etc.
The Board evaluated the committees' performance after seeking input from all the directors based on criteria such as committee composition, effectiveness of committee meetings, etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contributions and inputs in meetings, etc.
In a separate meeting of independent directors, the performance of non-independent directors and the Board as a whole was evaluated. The Independent directors also evaluated the quality, quantity, and timeliness of the information flow between Company management and the Board, which is necessary for the Board to effectively and reasonably perform its duties. Additionally, the Chairman of the Board was also evaluated on key aspects of his role, taking into account the views of executive directors and non-executive directors in the aforesaid meeting.
Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.
All directors responded through a structured questionnaire, based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India, the requirement of section 178 read with clause VII of schedule IV of the Act and the Guidance Note on Board Evaluation issued by the Institute of Company Secretaries of India ("ICSI"), about the performance of the Board, its Committees, Individual directors, and the Chairman.
The Board evaluation process was completed for the financial year 2023-24. The outcome of the performance evaluation was presented to the Board. The overall performance evaluation exercise was completed to the satisfaction of the Board. The Board deliberated on the outcome and agreed to take the necessary steps going forward.
For details of the previous year's annual evaluation, please refer to the Annual Report for the financial year, which is accessed through https://hginfra.com/investors-relation.html#btn-annual
Policy on Directors' Appointment & Remuneration
The Board on the recommendation of the Nomination and Remuneration Committee adopted a Policy on Nomination & Remuneration of Directors, Key Managerial Personnel, Senior Management and Other Employees, which, inter-alia, lays down the criteria for determining qualifications, positive attributes and independence of a director, appointment and removal of Directors, Key Managerial Personnel and other Senior Management of the Company, along with the criteria for determination of their remuneration and evaluation and includes other matters, as prescribed under the provisions of Section 178 of the Act and the Listing Regulations.
The policy is available on the website of the Company at https://hginfra.com/investors-relation.html#btn-policy
We affirm that the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.
Selection and Procedure for Nomination and Appointment of Directors
The Company has a Nomination and Remuneration Committee ("NRC"), which is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. The Board composition analysis reflects an in- depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements. The role of the NRC encompasses conducting a gap analysis to refresh the Board on a periodic basis, including each time a director's appointment or re-appointment is required.
The NRC is also responsible for reviewing the profiles of potential candidates vis- a-vis the required competencies, undertaking a reference and due diligence and meeting potential candidates prior to making recommendations of their nomination to the Board. The appointee is also briefed about the specific requirements for the position including expert knowledge expected at the time of appointment.
Declaration regarding compliance by Board Members and Senior Management Personnel with the Company's Code of Conduct
The Code of Conduct of the Company aims at ensuring consistent standards of conduct and ethical business practices across the Company. This Code is available on the website of the Company at https://hginfra.com/investors-relation.html#btn- policy. Pursuant to the Listing Regulations, a confirmation from the Chairman and Managing Director regarding compliance with the Code by all the Directors and Senior Management of the Company forming part of this Report.
Details with respect to the adequacy of internal financial controls with reference to the Financial statements
The Company has designed and implemented a process- driven framework for Internal Financial Controls ("IFC") within the meaning of the explanation to Section 134(5)(e) of the Act read with Rule 8(5) (viii) of the Companies (Accounts) Rules, 2014. The Company has appropriate internal control systems for business processes with regard to its operations, financial reporting and compliance with applicable laws and regulations.
It has documented policies and procedures covering financial and operating functions and processes. These policies and procedures are updated from time to time, and compliance is monitored by the internal audit function as per the audit plan.
The Company continues its efforts to align all its processes and controls with best practices. The Company uses SAP ERP Systems as a business enabler and to maintain its Books of Account. The transactional controls built into the SAP ERP systems ensure the appropriate segregation of duties, the appropriate level of approval mechanisms and the maintenance of supporting records. The systems, Standard Operating Procedures and controls, including manual controls, are reviewed by the Management.
The Company has in place adequate Internal Financial Controls regarding the Financial Statements commensurate with the size, scale, and complexity of its operations. The Company has appointed independent audit firms as Internal Auditors to observe the Internal Control system.
The Board of the Company have adopted various policies viz Policy on determining Material Subsidiary, Policy on Determination of Materiality of Events or Information, Vigil Mechanism/Whistle Blower Policy, Policy on Related Party Transactions, Code of Conduct to Regulate, Monitor and Report Trading by Designated Persons, Prevention of Sexual Harassment at Workplace, Policy on Corporate Social Responsibility Policy, Nomination and Remuneration Policy, Enterprise Risk Management Policy, Dividend Distribution Policy and other policies and procedures for ensuring the orderly and efficient conduct of its business for 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 of the Board actively reviews the adequacy and effectiveness of the internal control system and suggests improvements to strengthen the same. The Company has a robust management information system, which is an integral part of the control mechanism.
Significant and material orders
During the financial year, no significant or material orders were passed by the regulators, courts, or tribunals, which impacted the Company's going concern status and future operations.
Reporting of frauds by auditors
During the year under review, neither the statutory auditors nor the secretarial auditors have reported to the Audit Committee, under Section 143(12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees.
Annual Report
The MCA and the SEBI has issued the circulars in relation to ‘relaxation from compliance with dispatching of physical copies of the Annual Report and the Notice convening the AGM.
Members who wish to have a physical copy may write to the Company Secretary of the Company at cs@hginfra.com or submit a written request to the Registered Office of the Company. In accordance with the aforesaid circulars, the web link of the Annual Report and the Notice convening the AGM of the Company is being sent in electronic mode only to members whose e-mail addresses are registered with the Company or the Depository Participant(s). Those members, whose email addresses are not registered with the Company or with their respective Depository Participant(s) and who wish to receive the Notice of the AGM and the Annual Report for the financial year ended March 31, 2024, can get their email addresses registered by following the steps as detailed in the Notice convening the AGM.
The Annual Report of the Company is available on the Company website at https://hginfra.com/investors-relation.html#btn-annual
Annual Return
In accordance with the provisions of Section 134(3) read with Section 92(3) of the Act, the Annual Return as on March 31,2024, in Form MGT-7, is available on the Company's website and can be viewed at https://hginfra.com/investors-relation.html#btn- annual. The Annual Return will be submitted to the Registrar of Companies within the timelines prescribed under the Act.
Secretarial Standards
The Company has followed all applicable Secretarial Standards, issued by the Institute of Company Secretaries of India (ICSI).
Directors' responsibility statement
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost, secretarial auditors and external agencies, including audit of internal controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year.
Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:
• in the preparation of the annual accounts for the financial year ended March 31, 2024, the applicable accounting standards have been followed and that there are no material departures from the same; •
• 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 as at March 31, 2024 and of the profit of the Company for the financial year ended March 31,2024;
• they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
• they have prepared the annual accounts on a going concern basis;
• they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and
• they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
AUDITORS AND AUDIT REPORTS
Statutory Auditors
The shareholders of the Company have appointed M/s. Shridhar & Associates, Chartered Accountants (ICAI Firm Registration No. 134427W) as one of the Joint Statutory Auditors of the Company for the first term of 5 consecutive years at the AGM held on September 25, 2020 and M/S. M S K A & Associates, Chartered Accountants (Firm Registration No. 105047W), as Joint Statutory Auditors of the Company for the first term of 5 consecutive years at the AGM held on August 03, 2022.
During the financial year, there was no change in the statutory auditors of the Company.
Secretarial Auditors
M/s. Deepak Arora & Associates, Company Secretaries in Practice, (Firm Registration No. P2017RJ063900) have carried out the Secretarial Audit for the financial year ended March 31,2024.
During the financial year, there was no change in the secretarial auditors of the Company.
On the recommendation of the Audit Committee, the Board has appointed M/s. Deepak Arora & Associates, Company Secretaries in Practice, (Firm Registration No. P2001RJ080000) as Secretarial Auditors of the Company for the FY2024-25, as required under Section 204 of the Act and Rules thereunder.
Cost Records and Cost Audit
The Company has maintained cost accounts and records as specified by the Central Government under sub-section (1) of Section 148 of the Act. M/s. Rajendra Singh Bhati & Co., Cost Accountants (Firm Registration No. 101983) have carried out the cost audit for the financial year.
The Board, on the recommendation of the Audit Committee, has re-appointed M/s. Rajendra Singh Bhati & Co., as Cost Auditors of the Company for conducting the audit of cost records for the financial year 2024-25 under Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014.
The remuneration proposed to be paid to the Cost Auditor for the financial year 2024-25 is subject to ratification by the Company's shareholders at the ensuing Annual General Meeting.
Internal Auditors
The Board has appointed M/s. Mahajan & Aibara Chartered Accountants LLP, (Firm Registration No. 105742W) as Internal Auditors for conducting Internal Audit for the financial year.
The observations and suggestions of the Internal Auditors were reviewed, and necessary corrective/ preventive actions were taken in consultation with the Audit Committee.
On the recommendation of the Audit Committee, the Board has re-appointed M/s. Mahajan & Aibara Chartered Accountants LLP, (Firm Registration No. 105742W), as Internal Auditors of the Company for the financial year 2024-25.
Audit Reports
• The Joint Statutory Auditors' Report for the financial year ended March 31,2024, does not contain any qualification, reservation or adverse remark or disclaimer. The Report is enclosed with the financial statements in this Annual Report;
• The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by the SEBI. The Company has also implemented several best governance practices. The report on Corporate Governance as stipulated under the Listing Regulations is annexed as "Annexure-IV" to this Report.
• The Secretarial Audit Report issued by M/s. Deepak Arora & Associates, for the financial year ended March 31,2024, does not contain any qualification, reservation or adverse remark. The Secretarial Auditors' Report is annexed as "Annexure-V (i)" to this Report;
• The Secretarial Auditors' (Practicing company secretaries) certificate confirming compliance with conditions of corporate governance as stipulated under the Listing Regulations, for the financial year ended March 31,2024, forming part of this Report;
• The Secretarial Compliance Report issued by M/s. Deepak Arora & Associates, Practicing Company Secretaries, for financial year ended March 31, 2024, in relation to compliance of applicable SEBI Regulations/ circulars/ guidelines issued thereunder, pursuant to requirement of Regulation 24A of the Listing Regulations, is annexed as "Annexure-V (ii)" to this Report; and
• As per regulation 24A of the Listing Regulations, the Company is required to annex the secretarial audit report of its material unlisted subsidiaries to its directors' report. The Secretarial Audit Report of the material subsidiary does not contain any qualification, reservation or adverse remark and the same is annexed herewith.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In accordance with the requirements of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has duly constituted the CSR Committee, which is responsible for fulfilling the CSR objectives of the Company. The composition of the CSR committee is stated in the "Board Committees" section under "Corporate Governance Report. The Board of Directors have adopted a CSR policy which is in line with the provisions of the Act. The CSR Policy of the Company lays down the philosophy and approach of the Company towards its CSR commitment. The policy can be accessed on the website of the Company at https://hginfra.com/investors-relation.html#btn-policy
The Annual Report on Corporate Social Responsibility Activities of the Company is annexed as "Annexure-III" forming the part of this Report.
RISK MANAGEMENT
The Company has a well-defined risk management framework in place. The framework works across the Company's operations. It ensures that risks are mitigated and that the business adheres to regulatory requirements and industry best practices when identifying, assessing, responding to, and monitoring risk.
The Company is exposed to market risk, credit risk and liquidity risk, as set out in Note No. 39 to the Standalone and Consolidated Financial Statements of the Company.
In terms of Regulation 21 of the Listing Regulations, the Board has constituted the Risk Management Committee (RMC). The composition of the RMC is in conformity with the Listing Regulations, with the majority of members being directors of the Company.
The RMC is responsible for oversight the overall risk management processes of the Company and ensuring that key strategic and business risks are identified and addressed by the management, including framing policy, identifying current and emerging risks, developing risk assessment and measurement systems, establishing policies, practices and other control mechanisms to manage risks. The detailed terms of reference of the Risk Management Committee is disclosed in the Corporate Governance Report annexed as "Annexure-IV" forming part of this report.
The Enterprise Risk Management Policy of the Company is available on the Company's website at https://hginfra.com/investors- relation.html#btn-policy
VIGIL MECHANISM/WHISTLE-BLOWER POLICY
The Company encourages an open and transparent system of working and dealing amongst its stakeholders. In accordance with Section 177(9) of the Act and Regulation 22 of the Listing Regulations, the Company is required to establish a Vigil Mechanism for directors and employees to report genuine concerns. The Company has a Policy for the Prevention, Detection and Investigation of Fraud and Protection of Whistle Blowers ("the Whistle Blower Policy"), which also encourages its employees and various stakeholders to bring to the notice of the Company any issue involving compromise/ violation of ethical norms, legal or regulatory provisions, actual or suspected fraud etc., without any fear of reprisal, discrimination, harassment or victimisation of any kind. The Company investigates such
incidents when reported, in an impartial manner and takes appropriate action to ensure that requisite standards of professional and ethical conduct are always upheld. It is the Company's Policy to ensure that no persons are victimised or harassed for bringing such incidents to the attention of the Company. Further details of the Vigil Mechanism/ Whistle Blower Policy of the Company are provided in the Report on Corporate Governance, forming part of this report. The Whistle Blower Policy is hosted on the Company's website at https://hginfra.com/investors-relation.html#btn-policy
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars of energy conservation, technology absorption and foreign exchange earnings and outgo are provided as under in terms of Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014:
The steps taken by the Company to utilize alternate sources of energy;
Maintenance tracking. (PM03, PM16, Codes & Catalogues)
C) FOREIGN EXCHANGE EARNINGS AND OUTGO
Details of foreign exchange earnings and outgo during the financial year are as follows:
Business Responsibility & Sustainability Reporting (BRSR)
Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility and Sustainability Report (‘BRSR') on initiatives taken from an environmental, social and governance perspective, in the prescribed format is annexed as "Annexure- VII" to this Report.
Environmental, Social and Governance (ESG)
The Company focus on steadfast on leveraging technology to battle climate change, conserving water and managing waste.
On the social front, Company's emphasis is on the development of people, especially around digital skilling, improving diversity and inclusion, facilitating employee wellness and experience, delivering technology for good and energizing the communities it work in. The Company is also redoubling efforts to serve the interests of all its stakeholders, by leading through its core values and setting benchmarks in corporate governance. The Board instituted an ESG council to discharge its oversight responsibility on matters related to organization wide ESG initiatives, priorities, and leading ESG practices.
CREDIT RATING
The Company's financial prudence is reflected in the strong credit rating ascribed by rating agencies. The table below depicts the Credit Rating profile as on March 31,2024:
During the financial year, the outlook of the ratings has been changed from Stable to Positive for all above said ratings.
CONFLICT OF INTERESTS
Each director informs the Company on an annual basis about the Board and Committee positions he/she occupies in other companies, including Chairmanships, and notifies changes during the financial year. The Members of the Board avoid conflict of interest in the decision-making process while discharging their duties. The Members of the Board restrict themselves from any discussions and voting in transactions in which they have concerns or interests.
SHAREHOLDERS AND INVESTORS
The Company regularly interacts with its shareholders and investors through results announcements, annual reports, performance highlights, media releases, the Company's website, and subject-specific communications. The AGM gives the shareholders an opportunity to communicate directly with the Board and Management. During this meeting, the Board engages with shareholders and answers their queries on various subjects.
The Company has a designated e-mail address for shareholders i.e. cs@hginfra.com
The Investor Relations team also interacts regularly with investors and analysts through quarterly results calls, one-on-one and group meetings, and participation in investor conferences.
Investor and Analyst Interactions in the financial year
ENVIRONMENT HEALTH AND SAFETY (EHS) PROTECTION
The Company is committed towards the well-being and protection of Health, Safety and the Environment through its EHS Policies, which are formulated in line with applicable laws and legal requirements connected with occupational Health, Safety, and Environment matters. Trainings are being provided
to employees of the Company for the better awareness and implementation of EHS. The Company always ensures that a healthy and safe working environment is provided to all employees of the Company.
INSIDER TRADING CODE
The Company has instituted a mechanism to avoid Insider Trading and abusive self-dealing in the securities of the Company. In accordance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (‘SEBI PIT Regulations'), the Company has established systems and procedures to prohibit insider trading activity and has framed the Code of Prohibition of Insider Trading (the "Code"). The Code of the Company prohibits the directors of the Company and other specified employees from dealing in the securities of the Company on the basis of any Unpublished Price Sensitive Information (UPSI), available to them by virtue of their position in the Company.
The objective of this Code is to prevent the misuse of any UPSI and prohibit any insider trading activity to protect the interests of the shareholders at large.
The Board of Directors of the Company has adopted the Code and formulated the Code of Practices and Procedures for Fair Disclosure in terms of the requirements of the SEBI PIT Regulations. The Company Secretary has been appointed as the Compliance Officer for ensuring implementation of the Code.
The Code is available on the website of the Company at https://hginfra.com/investors-relation.html#btn-policy
DIRECTORS AND OFFICERS LIABILITY INSURANCE (D&O)
Pursuant to Regulation 25(10) of the Listing Regulations, the Company has taken the Directors and Officers Liability Insurance (‘D & O Insurance') policy for all the Directors, including Independent Directors, to indemnify them against any liability in respect of any negligence, default, misfeasance, breach of duty, or breach of trust for which they may be guilty in relation to the Company.
SUCCESSION PLANNING
The Nomination and Remuneration Committee of the Board oversees matters related to succession planning of the Board and Senior Management of the Company. The Company understands that sound succession planning is essential for the sustained growth of the Company.
Information about succession planning for the Board and Senior Management of the Company is given in the Nomination and Remuneration Policy, which is available on the Company's website at https://hginfra.com/investors-relation.html#btn-policy
INDUSTRIAL RELATIONS
The Company's business is dependent on infrastructure projects awarded by government authorities/ private authorities funded by governments or by international and multilateral development finance institutions. The Company, therefore, developed and maintained strategic alliances with other construction developers that undertake contracts for such infrastructure development projects and intends to continue to explore entering into Jointly Controlled Operations, consortia or sub-contract relationships for specific projects with certain of these contractors. In addition, the Company develop and maintain relationships and pre- qualified status with certain major clients and obtain a share of contracts from such clients.
OTHER DISCLOSURES
The Board states that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the financial year:
1) As per rule 4(4) of the Companies (Share Capital and Debentures) Rules, 2014, the Company has not issued equity shares with differential rights as to dividend, voting or otherwise;
2) As per rule 8(13) of the Companies (Share Capital and Debentures) Rules, 2014, the Company has not issued shares (including sweat equity shares) to employees of the Company under any scheme;
3) As per rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014, the Company has not issued equity shares under the Employees Stock Option Schemes;
4) Neither the Managing Director nor the Whole Time Directors of the Company receive any remuneration or commission from any of its subsidiaries except sitting fees as entitled as a Non-Executive Directors in subsidiary companies;
5) Since the Company has not formulated any scheme of provision of money for the purchase of own shares by employees or by the trustee for the benefit of the employees in terms of Section 67(3) of the Act, no disclosures are required to be made;
6) There was no revision of financial statements and the Board's Report of the Company during financial year;
7) There has been no change in the nature of business of the Company;
8) No application has been made under the Insolvency and Bankruptcy Code, hence the requirement to disclose the details of the application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial along with their status as at the end of the financial year is not applicable; and
9) The requirement to disclose the details of the difference between the amount of the valuation done at the time of one-time settlement and the valuation done while taking a loan from the Banks or Financial Institutions, along with the reasons thereof, is not applicable for the financial year.
APPRECIATION AND ACKNOWLEDGEMENT
The Directors would like to express their appreciation and thank the Government of India, the Governments of various states in India, and concerned Government departments and agencies for the continued help and cooperation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company, viz. clients, members, vendors, banks and other business partners, for the excellent support received from them during the financial and look forward to their continued support in future.
The Directors express their sincere appreciation to all company employees for their unstinted commitment and continued contribution.