Dear Members,
The Board of Directors are pleased to present the 5th Integrated Annual Report covering the business and operations of Hitachi Energy India Limited ("the Company") along with the Company's audited financials for the year ended March 31,2024.
1. Financial Summary and Highlights:
(Amount in Rs Crores)
2. Performance Review:
During the financial year ended March 31, 2024, orders touched C 5,536.30 Crores as against C 6,817.20 Crores during the year ended March 31, 2023. The orders witnessed a healthy growth reflecting the technology push and continued traction in transformers and high voltage products. The order backlog at the end of the year stood at C 7,229.53 Crores (March 31,2023 was C 7,070.91 Crores) which continued to provide visibility to the future revenue streams. The total income for your Company for the financial year ended March 31, 2024, stood at C 5,246.78 Crores (March 31, 2023 was C 4,483.65 Crores), reflecting stability of operations. Profit before tax was C 221.70 Crores (March 31, 2023 was C 130.82 Crores). Accordingly, net profit after tax was C 163.78 Crores (March 31, 2023 was C 93.90 Crores). The earnings per share for the financial year ended March 31, 2024, stood at C 38.64 (March 31, 2023 was C 22.16).
For detailed analysis of the performance, including industry overview, changes, and outlook, please refer to the Management's Discussion and Analysis section of this Report.
There has been no change in the nature of business during the financial year under review.
3. Management Discussion and Analysis:
Management Discussion and Analysis for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), is presented in Annexure-A, forming part of the Boards' Report.
4. Glimpse of rebranding and consolidation:
Hitachi Energy India Limited ("the Company") underwent significant transformations since its inception. Firstly, the Scheme of Arrangement ("Scheme") between (i) ABB India Limited ("INABBVTransferor") and (ii) Hitachi Energy India Limited ("Company"/"Transferee") and their respective shareholders and creditors, pursuant to the provisions of Section 230 to 232 and other applicable provisions of the Companies Act, 2013, ("Act") which provided for inter alia the Demerger of the Power Grids Business of INABB ("Demerged Undertaking") and the consequent issuance of equity shares by your Company to the shareholders of INABB as per the share entitlement ratio, which was approved by the National Company Law Tribunal, Bengaluru Bench ("NCLT") on November 27, 2019, allowed Hitachi Energy India Limited to concentrate its resources on its core business areas, enhance operational efficiency, and maximize value for its stakeholders.
In addition, 3,17,86,256 equity shares aggregating 75% of the paid-up capital of your Company was transferred from ABB Asea Brown Boveri Ltd. to ABB Ltd. by way of dividend in kind, and subsequently from ABB Ltd. to Hitachi Energy Ltd as contribution in kind (as disclosed by the Shareholders) on February 5, 2021.
Consequent to this, your Company underwent a name change from "ABB Power Products and Systems India Limited" to "Hitachi Energy India Limited" with effect from November 12, 2021, following the rebranding of its parent company as Hitachi Energy Ltd. and in keeping with its' vision of becoming a part of Hitachi Energy group. This change reaffirms your Company's commitment to advance a sustainable energy future for all in India, in the presence of key policy makers and industry leaders. With its new brand name - Hitachi Energy India - the business will be able to effectively position its pioneering technologies and services to existing and future customers expanding beyond the grid - opening up a breadth of opportunities in areas such as sustainable mobility and smart life, and contributing further economic, environmental and social value. In continuation to the change in name of the Company, the Memorandum of Association and Articles of Association of your Company were also amended involving name change and the financial year of the Company was changed from January 1 - December 31 to April 1 - March 31 during the financial period 2021-22. Necessary approvals from various regulatory authorities, as applicable in this regard was secured by the Company from time to time.
Furthermore, on December 28, 2022, Hitachi Ltd., the ultimate parent entity of the Company has completed the previously announced acquisition of ABB Ltd.'s remaining 19.9% equity stake in Hitachi Energy Ltd., a Joint Venture that was formed from ABB's Power Grids business in 2020. Thus, Hitachi Ltd. now holds 100% of the equity stake in Hitachi Energy Ltd., (Zurich, Switzerland), which is the holding company which presently holds 75% stake in the Company. The solid commitment from Hitachi to the announced acquisition of the remaining shares of Hitachi Energy ahead of plan will help accelerating enabling the agile and committed team to support customers and partners addressing the global challenge of the energy transition, while continuing to deliver strong financial performance and creating value.
Re-classification of Promoter/Promoter Group entities of the Company:
During the year under review, the Board of Directors at their meeting held on May 23, 2023 (which adjourned and concluded on May 24, 2023), approved the request received from ABB Asea Brown Boveri Ltd, ABB Switzerland Ltd, and ABB Ltd ("Outgoing Promoters") under Promoter/ Promoter Group, seeking re-classification from ‘Promoter/ Promoter Group Category' to ‘Public Category' under Regulation 31A of the SEBI Listing Regulations. Further, your Company had made an application to National Stock Exchange of India Limited and BSE Limited (collectively referred to as the "Stock Exchanges") on June 7, 2023, seeking approval for re-classification of the Outgoing Promoters from ‘Promoter/ Promoter Group Category' to ‘Public Category'.
On October 6, 2023, your Company had received the necessary approvals from the Stock Exchanges vide their letters dated October 6, 2023 and accordingly, ABB Asea Brown Boveri Ltd, ABB Switzerland Ltd, and ABB Ltd, have been reclassified from ‘Promoter/Promoter Group Category' to ‘Public Category' in the shareholding of the Company with effect from October 6, 2023. Accordingly, the above Promoters were considered under the ‘Public' category of shareholders with effect from October 6, 2023.
Also, your Company has received advisory letters from the Stock Exchanges vide their letters dated October 6, 2023. Your Company had filed an application with the Stock Exchanges on June 7, 2023 for re-classification of certain persons from ‘Promoter/Promoter Group Category' to ‘Public Category' in accordance with Regulation 31A of the SEBI Listing Regulations. The advisory letters were issued on account of a delay (of 21.5 hours) in filing the intimation, in relation to submission of the aforesaid application, with the Stock Exchanges pursuant to disclosure requirement under Regulation 31A(8)(c) of the SEBI Listing Regulations. The intimation was required to be filed within 24 hours of the filing of the application by the Company. However, there was no impact on financial, operation or other activities of your Company pursuant to the abovementioned advisory letters.
5. Dividend & Reserves:
a) Declaration and payment of dividend:
The Board of Directors at their meeting held on May 21,2024, recommended a final dividend of C 4.00 (Rupees Four only) per equity share for the financial year ended March 31, 2024, on 4,23,81,675 equity shares of C 2/- each fully paid.
The dividend recommended is in accordance with the Company's Dividend Distribution Policy.
b) Dividend Distribution Policy:
I n terms of the provisions of Regulation 43A of the SEBI Listing Regulations, the Company has in place a Dividend Distribution Policy, which contains various parameters, basis which the Board of Directors may recommend or declare Dividend. The same is accessible at the Company's website at: https://www. hitachienergy.com/in/en/investor-relations/corporate- governance#policies
c) Book Closure:
The Register of Members and Share Transfer Books of the Company will remain closed from August 15, 2024 to August 21,2024 (both days inclusive) to determine the eligible shareholders to receive the dividend for the year ended March 31, 2024 and accordingly, the record date for dividend will be Wednesday, August 14, 2024.
According to the Finance Act, 2020, dividend income will be taxable in the hands of the Members w.e.f. April 1, 2020, and the Company is required to deduct tax at source from the dividend paid to the Members at prescribed rates as per the Income Tax Act, 1961.
d) Unclaimed dividends:
Details of outstanding and unclaimed dividends previously declared and paid by the Company are given under the Corporate Governance Report.
e) Transfer to Investor Education and Protection Fund:
As per Section 124 of the Companies Act, 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules 2016 (‘the Rules') all unpaid or unclaimed dividends are required to be transferred by the Company to the I EPF established by the Central Government, after completion of seven years and the shares in respect of which dividend has not been paid or claimed by the members for seven consecutive years or more shall also be transferred to the Demat account created by IEPF Authority. In line with the applicable provisions and after completion of seven consecutive years, the Company will transfer the said shares, after sending an intimation of the proposed transfer in advance to the concerned shareholders, as well as publish a public notice in this regard.
Further, pursuant to the Scheme of Arrangement [entered into between (i) ABB India Limited ("INABB"/"Transferor") and (ii) Hitachi Energy India Limited ("the Company") and their respective shareholders and creditors] approved by National Company Law Tribunal, Bengaluru Bench vide its order dated November 27, 2019, the Company directly allotted 1,07,421 Equity Shares to the shareholders of ABB India Limited in accordance with the share entitlement ratio pertaining to the relevant shares of ABB India Limited lying with IEPF.
Accordingly, the Dividend declared up to financial year 2023-24 pertaining to the shares remaining with IEPF authorities has also been transferred to the Investor Education and Protection Fund account from time to time.
The details of the above are provided on the website of the Company at: https://www.hitachienergy.com/ in/en/investor-relations/shareholder-information#iepf
f) Transfer to Reserves:
For the financial year under review, your Company has proposed not to transfer any amount to the General Reserves.
6. Share Capital:
As of March 31, 2024, the authorized share capital of the Company was C 10 Crores comprising of 5,00,00,000 equity shares of C 2 each, and the paid-up equity share capital as of March 31,2024, was C 8.48 Crores comprising of 4,23,81,675 equity shares of C 2 each.
During the year under review, the Company had neither issued any shares nor instruments convertible into equity shares of the Company or with differential voting rights nor has granted any sweat equity shares.
7. Material Changes and Commitment affecting the Financial Position:
There were no material changes affecting the financial position of the Company that took place after the close of the financial year 2023-24 till the date of this Report.
8. Subsidiary / Joint Venture or Associate Company:
During the financial year under review, the Company did not have any subsidiary, joint venture, or associate Company.
9. Expansion / Addition of new manufacturing facilities:
Your Company added new manufacturing facilities, the details of which are provided under Management Discussion and Analysis section of this Report.
10. Credit Rating:
The Company had outstanding short-term borrowings of C 150 Crores as on March 31, 2024, utilized from the established credit lines with banks.
CRISIL Ratings Limited has reaffirmed the long-term and short-term credit ratings for C 6,000 Crores bank loan facilities of the Company.
CRISIL has assigned ‘CRISIL A1+' as Short-Term Rating and assigned ‘CRISIL AAA/Stable' ratings as a Long-Term Rating effective from August 29, 2023.
The Company's financial discipline and prudence are reflected in the strong credit ratings ascribed by rating agencies. The details of credit ratings are also disclosed in the Management Discussion and Analysis section, which forms part of the Board's Report.
11. Board of Directors and Key Managerial Personnel:
The Board of Directors of the Company comprises of eminent persons with proven competence and integrity. Besides the experience, strong financial insight and leadership qualities, they have a significant degree of commitment towards the Company and devote adequate time to the Meetings.
As at March 31, 2024, the Board of Directors comprised 6 Directors of which 1 is Executive Director, 2 are Non-Executive, Non-Independent Directors and 3 are Non-Executive, Independent Directors.
• Mr. Nuguri Venu (DIN: 07032076), Managing Director and Chief Executive Officer is the Executive Director.
• Mr. Ismo Antero Haka (DIN:08598862) and Mr. Achim Michael Braun (DIN:08596097) are the Non-Executive, Non-Independent Directors.
• Mr. Mukesh Butani (DIN: 01452839), Ms. Akila Krishnakumar (DIN: 06629992) and Ms. Meena Ganesh (DIN: 00528252) are the Independent Directors.
The composition of the Board of Directors is in due compliance with the Companies Act, 2013 and SEBI Listing Regulations.
None of the Directors of the Company are disqualified under Section 164(2) of the Companies Act, 2013.
Key Managerial Personnel:
Mr. Nuguri Venu (DIN: 07032076), Managing Director and Chief Executive Officer, Mr. Ajay Singh, Chief Financial Officer, and Mr. Poovanna Ammatanda, General Counsel, Company Secretary and Compliance Officer are the Key Managerial Personnel in accordance with the provisions of Section 203 of the Companies Act, 2013. There was no change in the Key Managerial Personnel during the year.
Change in Composition of Board of Directors:
During the year under review, Ms. Nishi Vasudeva (DIN: 03016991) resigned from the position of Independent Director of the Company effective from May 24, 2023. The Board places on record its appreciation for the valuable contributions made by Ms. Nishi Vasudeva during her tenure as an Independent Director of the Company.
Based on the recommendation of Nomination and Remuneration Committee, the Board of Directors at their Meeting held on May 24, 2023, has approved the appointment of Ms. Meena Ganesh (DIN: 00528252) as an Additional Director in the capacity of Independent Director for a term of 5 (five) consecutive years effective from May24, 2023 to May 23, 2028.
The Board of Directors is of the opinion that Independent Director appointed during the year under review possess necessary expertise, integrity and experience.
Appointment/ Re-appointment of Directors:
Based on the recommendation of the Board of Directors, the Shareholders at the fourth Annual General Meeting held on August 17, 2023, approved the:
• Re-appointment of Mr. Ismo Antero Haka (DIN: 08598862), Non-Executive Director who retired by rotation.
• Appointment of Ms. Meena Ganesh (DIN: 00528252) as an Independent Director for a term of five (5) consecutive years effective from May 24, 2023 to May 23, 2028.
Further, in accordance with the Articles of Association of the Company and the provisions of Section 152(6)(e) of the Companies Act, 2013, Mr. Achim Michael Braun (DIN: 08596097), Director, will retire by rotation at the ensuing Annual General Meeting, and being eligible, offer himself for re-appointment.
A brief resume of Mr. Achim Michael Braun (DIN: 08596097) proposed to be re-appointed, the nature of his expertise in specific functional areas and names of the Companies in which he holds Directorship/ Membership/ Chairmanship of the Board or Committees, as stipulated under SEBI Listing Regulations has been provided as an annexure to the Notice convening the 5th Annual General Meeting.
Details of Directors, Key Managerial Personnel and Composition of various Committees of the Board are provided in the Corporate Governance Report forming part of this report.
Declaration of Independent Directors:
The Company's Independent Directors have submitted requisite declarations confirming that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) read with Regulation 25 of SEBI Listing Regulations and they have registered their names in the Independent Directors' Databank.
The Independent Directors have also given their undertaking that they are not aware of any event or incident that exists or might reasonably be anticipated that could impair or damage their capacity to fulfil their duties objectively and independently.
Familiarization Program for Independent Directors:
The Company has a program in place to familiarize its Independent Directors. The program's primary objective is to familiarize Independent Directors on our Board with the Company's business, industry in which the Company operates, business model, challenges, and so on, through a variety of programs that include regular meetings with our business leads and functional heads, as well as interaction with subject matter experts within the Company.
The familiarization program and other disclosures as specified under the Listing Regulations is available on the Company's website at https://www.hitachienergy.com/in/ en/investor-relations/board-of-directors.
Selection and Procedure for Nomination and Appointment of Directors and Nomination and Remuneration Policy of the Company:
The Nomination and Remuneration Committee (NRC) of the Company is entrusted to determine the criteria for the requirements of the Board. NRC, while recommending candidature to the Board, takes into consideration the qualification, attributes, experience and independence of the candidate.
Pursuant to Section 178(3) of the Companies Act, 2013, the Nomination and Remuneration Committee of the Board has formulated, amongst others, a policy on Nomination and Remuneration which provides the framework for remunerating the members of the Board, Key Managerial Personnel, Senior Management and other employees of the Company. This Policy is guided by the principles and objectives enumerated in Section 178(4) of the Companies Act, 2013.
The details of the Nomination and Remuneration Policy are mentioned in the report on Corporate Governance and the same is also placed on the Company's website at https:// www.hitachienergy.com/in/en/investor-relations/board-of- directors.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the prescribed format and annexed as Annexure-B to this Report.
Annual Performance Evaluation of the Board, its Committees and individual Directors:
The Board, along with the Nomination and Remuneration Committee, approved a criteria framework in the form of a questionnaire for annual evaluation of the Board, Board Committees and Individual Directors pursuant to the provisions of the Companies Act, 2013 and the Corporate Governance requirements under Regulation 25(4) of SEBI Listing Regulations read with SEBI's Guidance Note on Board Evaluation.
During the year under review, the Board of Directors have carried out an annual evaluation of its own performance, Board Committees, and Individual Directors. The Board evaluation was conducted through a questionnaire designed with qualitative parameters and feedback based on ratings.
Further, the performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman, the Board as a whole and the Non-Independent Directors was carried out by the Independent Directors at their separate meeting held during the year.
The questionnaire was circulated to all the Board members of the Company in a transparent and confidential manner. The key parameters considered for Board evaluation are Board Membership, Board's Culture and Relationships with Key Constituencies, Board Responsibilities, Decision- Making and Board Committees. During the evaluation process, the Directors have given ratings of either ‘Strongly agree' / ‘Agree' on various assessment questions.
A consolidated report was shared with the Chairman of the Board for his review and giving feedback to each Director. Accordingly, feedback was provided to Directors.
12. Board Meetings:
During the year under review, the Board of Directors of the Company met four (4) times viz., (1) May 23, 2023 (which was adjourned and concluded on May 24, 2023); (2) July 25, 2023; (3) November 6, 2023 and (4) January 23, 2024.
In accordance with the provisions of the Companies Act, 2013, a separate meeting of the Independent Directors of the Company was held on July 25, 2023.
The attendance of the Directors in the meetings are provided in the Corporate Governance Report forming part of this Report.
Committees of the Board:
As required under the Act and the Listing Regulations, the Company has constituted the following, including the statutory committees:
i. Audit Committee
ii. Nomination and Remuneration Committee
iii. Stakeholders' Relationship Committee
iv. Risk Management Committee
v. Corporate Social Responsibility Committee
vi. Environment, Social and Governance Committee
A detailed note on the composition of various Committees of the Board and their Meetings including the terms of reference are given in the Corporate Governance Report forming part of the Board's Report.
Further, pursuant to resignation of Ms. Nishi Vasudeva and appointment of Ms. Meena Ganesh as Independent Director of the Company, the Board of Directors at their Board Meeting held on May 23, 2023 (which adjourned and concluded on May 24, 2023) has reconstituted the composition of certain Committees with effect from May 24, 2023, details have been included in Corporate Governance Report which forms part of this Board's Report.
13. Directors' Responsibility Statement:
Pursuant to the provisions of Section 134(5) of the Act, the Directors confirm that, to the best of their knowledge and belief:
a) in the preparation of the annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b) they 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 and of the profit and loss of the Company for that period;
c) they 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;
d) they have prepared the annual financial statements on a going concern basis;
e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
14. Corporate Governance Report:
The Company is committed to upholding the highest standards of Corporate Governance and follows the Corporate Governance requirements set out by the Securities and Exchange Board of India ("SEBI"). In addition, the Company has included various best governance practices.
In terms of Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, a separate section on Corporate Governance including a certificate from M/s V. Sreedharan & Associates, Practicing Company Secretaries confirming compliance is annexed as Annexure-C, forming an integral part of this Report.
15. Statutory Auditors:
Pursuant to provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, M/s. S. R. Batliboi & Associates LLP, Chartered Accountants (Registration No. 101049W/ E300004) were appointed as Statutory Auditors, for a period of five years, to hold office from the conclusion of first Annual General Meeting until the conclusion of the sixth Annual General Meeting at such remuneration as may be mutually agreed amongst by the Board of Directors and the Statutory Auditors.
The Statutory Auditor's Report on the financial statements for the financial year ended March 31, 2024, does not contain any qualifications, reservation, adverse remarks or disclaimer which requires any explanation from the Board of Directors.
16. Cost Audit and Cost Auditors of the Company:
As per requirements of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Company is required to make and maintain cost records for certain products as specified by the Central Government. Accordingly, the Company has, during the year under review, in accordance with Section 148(1) of the Act, the Company has maintained the accounts and cost records, as specified by the Central Government.
i n terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors, on the recommendation of the Audit Committee, appointed M/s. Ashwin Solanki & Associates, Cost Accountants (Registration No: 100392) as Cost Auditor of the Company, for the financial year 2024-25, on a remuneration as stated in notice convening the Fifth Annual General Meeting Notice dated May 21,2024 for conducting the audit of the cost records maintained by your Company.
A certificate from M/s. Ashwin Solanki & Associates, Cost Accountants has been received to the effect that their appointment as Cost Auditor of the Company, if made, would be in accordance with the limits specified under Section 141 of the Act and Rules framed thereunder and they are not disqualified to be appointed as Cost Auditor.
A Resolution seeking Shareholders' approval for remuneration payable to Cost Auditor forms part of the Notice convening the 5th Annual General Meeting of your Company and same is recommended for your consideration. Cost Audit and Compliance reports for the financial year 2022-23 were filed with the Registrar of Companies, within the prescribed time limit.
17. Secretarial Audit:
Pursuant to provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and amendments thereto, the Board of Directors of the Company have appointed BMP & Co. LLP (LLPIN: AAI-4194), Company Secretaries, Bengaluru, to conduct the Secretarial Audit for the financial year 2023-24.
The Secretarial Audit Report (Form MR-3) for the financial year ended March 31, 2024, is annexed herewith and marked as Annexure-D to this Report.
The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
18. Secretarial Standards:
The Board of Directors affirms that the Company has complied with applicable Secretarial Standards on board meetings and general meetings issued by the Institute of Company Secretaries of India (ICSI).
19. Branch Offices:
During the year under review, the Company had branch offices in Nepal, Bangladesh and Sri Lanka. All these branch offices continue to be operational. The branch offices are undertaking business operations in respective countries. The branches play a key role in supporting the Company to penetrate the market, by providing local support for various business activities.
Through these branches, your Company is engaged with a wide spectrum of customers (Utilities, Industries, Distributors, OEMs etc.) in their respective countries.
20. Branch Auditors:
In terms of provisions of sub-section (8) of Section 143 of the Act read with Rule 12 of the Companies (Audit and Auditors) Rules, 2014, the audit of the accounts of the branch offices of the Company located outside India is required to be conducted by the person(s) or firm(s) qualified to act as Branch Auditors in accordance with the laws of that country.
In this regard, the Company has secured the Shareholders' approval in the Third Annual General Meeting held on July 22, 2022, for authorizing the Board of Directors/ Audit Committee to appoint Branch Auditors of any branch office of the Company from time to time.
The Board of Directors at their Meeting held on May 23, 2023 (which adjourned and concluded on May 24, 2023) has appointed the following branch auditors for the Branch Offices of the Company to conduct the audit for the financial year 2023-24:
21. Environment, Social and Governance Committee and Business Responsibility and Sustainability Report (BRSR):
The Company is on a continuous improvement journey for creating long-term value for its stakeholders.
The Company has constituted Environment, Social and Governance (ESG) Committee in the Board Meeting held on October 22, 2021.
During the financial year under review, the Environment, Social and Governance Committee was reconstituted by inducting Ms. Meena Ganesh, Independent Director as member of the Committee with effect from May 24, 2023 in place of Ms. Nishi Vasudeva, Independent Director, who ceased to be a member of the Environment, Social and Governance Committee upon her resignation as a Director of the Company with effect from May 24, 2023.
The details of the performance and reporting under ESG as a part of mandatory disclosure from the financial year under review are included under the Business Responsibility and Sustainability Report forming part of the Board's Report.
Further, the sustainability initiatives taken by the Company including sustainable development goals from an environmental, social and governance perspective is available on the Company's website and can be accessed at https://www.hitachienergy.com/in/en/sustainability/ sustainability-overview.
22. Significant and material orders passed by the regulators or courts or tribunals impacting the going Concern status of the Company:
During the financial year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status of the Company.
23. Deposits:
During the year under review, the Company has neither invited nor accepted any deposits falling under the ambit of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 framed thereunder.
24. Particulars of Loans, Guarantees or Investments:
During the financial year under review, the Company has not granted any Loans, or made investments within the meaning of Section 186 of the Act.
25. Borrowing Limits:
The existing borrowing limits of the Company is C6,500 Crores (Rupees Six Thousand Five Hundred Crores only) consisting of C1,500 Crores towards fund-based limits and C5,000 Crores towards non-fund based borrowings facilities.
26. Related Party Transactions:
The Board of Directors have adopted a policy on Related Party Transactions. The objective is to ensure proper approval, disclosure, and reporting of transactions as applicable, between the Company and any of its related parties. The policy on related party transactions is available at https://www.hitachienergy.com/in/en/investor-relations/ corporate-governance#policies
Particulars of the Contracts or Arrangements with related parties referred to in Section 188(1) in the format specified as Form AOC-2 forms part of this Report as Annexure-E. Further details of related party transactions are provided in Notes to Financial Statements.
All contracts or arrangements with related parties were entered into only with prior approval of the Audit Committee, except transactions that qualified as Omnibus transactions as permitted under law. In addition, during the financial year 2023-24, the Company has obtained the Shareholder approval through Postal Ballot for material related party transactions with Hitachi Energy Sweden AB for the financial year 2023-24.
There were no materially significant related party transactions that could have potential conflict with the interests of the Company at large.
Details of the transaction(s) of the Company with the entity(ies) belonging to the promoter/promoter group which hold(s) more than 10% shareholding in the Company as required under para A of Schedule V of the Listing Regulations are provided as part of the financial statements.
27. Internal financial control systems and their adequacy:
Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations and is in line with the requirements of the regulations. Further, the Directors have laid down internal financial controls to be followed by the Company and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.
The Audit Committee evaluates the internal financial control system periodically. The details of Internal Control System and their adequacy are provided in the Management Discussion and Analysis section of this report which forms part of this report.
28. Audit Committee:
During the year under review, the Audit Committee was reconstituted by inducting Ms. Meena Ganesh, Independent Director as member of the Audit Committee with effect from May 24, 2023 in place of Ms. Nishi Vasudeva, Independent Director, who ceased to be a member of the Audit Committee upon her resignation as a Director of the Company with effect from May 24, 2023.
The powers and role of the Audit Committee are included in the Corporate Governance Report, which forms an integral part of the Integrated Annual Report. All the recommendations made by the Audit Committee were accepted by the Board of Directors.
29. Reporting of frauds:
During the year under review, there have been no instances of fraud reported by the Statutory Auditors, Cost Auditors and Secretarial Auditors under Section 143(12) of the Act and Rules framed thereunder either to the Audit Committee and/or Board or to the Central Government.
30. Whistle-Blower Policy/Vigil Mechanism:
Pursuant to Section 177(9) of the Act and Regulation 22 of LODR, the Company has adopted a whistle-blower policy/ vigil mechanism for Directors, Employees and third parties to report their concerns about unethical or inappropriate behavior, actual or suspected fraud or violation of the Company's Code of Conduct, leak of unpublished price sensitive information and related matters.
This mechanism also provides adequate safeguards against the victimization of whistle blowers who avail of the whistle blower / vigil mechanism. The whistle blowers may also access their higher level/ supervisors and/ or the Audit Committee. The Whistle Blower Policy is available at https:// www.hitachienergy.com/in/en/about-us/integrity/reporting- channels/whistleblower-protection-policy.
During the year under review, the Complaints received under the said policy were / are being investigated.
31. Risk Management Policy:
The Company has in place the Risk Management Policy and constituted the Risk Management Committee as required under the Companies Act, 2013 and Regulation 21 of SEBI Listing Regulations. The Committee is chaired by an Independent Director, which assists the Board in monitoring and overseeing implementation of the risk management policy, including evaluating the adequacy of risk management systems and such other functions as mandated under the SEBI Listing Regulations and as the Board may deem fit from time to time.
The Committee oversees the Risk Management process including risk identification, impact assessment, effective implementation of the mitigation plans and risk reporting. The purpose of the Committee is to assist the Board of Directors in fulfilling its oversight responsibilities with regard to enterprise risk management.
During the financial year under review, the Risk Management Committee was reconstituted by inducting
Ms. Meena Ganesh, Independent Director as member of the Committee with effect from May 24, 2023 in place of Ms. Nishi Vasudeva, Independent Director, who ceased to be a member of the Risk Management Committee upon her resignation as a Director of the Company with effect from May 24, 2023.
The details of the Committee and its terms of reference are set out in the Corporate Governance Report and Management's Discussion and Analysis Report forming part of this Report.
32. Corporate Social Responsibility (CSR):
Corporate Social Responsibility (CSR) Committee has been constituted in accordance with Section 135 of the Companies Act, 2013. The details of the composition of the Committee, scope and functions are listed in the Corporate Governance Report annexed to this Integrated Annual Report.
The CSR Policy formulated by the Corporate Social Responsibility Committee and approved by the Board continues unchanged. The policy can be accessed at https://www.hitachienergy.com/in/en/investor-relations/ corporate-governance#policies
For the financial year 2023-24, the Company has spent C 1.51 Crores on CSR activities. The Annual Report on CSR activities as required under Section 135 of the Companies Act, 2013 read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure-F to this Report.
33. Annual Return:
Pursuant to Section 92(3) of the Companies Act, 2013, the Company has placed a copy of the annual return on its website and the same is available at https://www. hitachienergy.com/in/en/investor-relations/general- meetings#annual-general-meeting.
34. Conservation of energy, technology absorption, foreign exchange earnings and outgo:
The particulars relating to the Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) Companies (Accounts) Rules, 2014, is provided in Annexure-G to this Report.
35. Particulars of Employees including Remuneration of Directors and Employees:
The details related to remuneration and other details of the employees drawing remuneration under Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. None of the employees listed as per above are related to any Director / KMP of the Company.
In terms of Section 136(1) of the Companies Act, 2013 and the Integrated Annual Report is being sent to the Shareholders and others entitled thereto excluding the aforesaid disclosure. In pursuance of second proviso of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, if any Shareholder interested in obtaining the same may write to the Company Secretary & Compliance Officer at investors@hitachienergy.com.
In accordance with Section 136 of the Act, this disclosure is available for inspection by Shareholders through electronic mode.
36. Disclosure as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:
The Company has in place a policy in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the Rules thereunder that mandates no tolerance against any conduct amounting to sexual harassment of women at the workplace.
The Company has also constituted an Internal Complaints Committee (ICC) for reporting and conducting inquiries into the complaints made by the victim on harassment at the workplace. Throughout the year, training and awareness events are held to instill sensitivity toward creating a respectful workplace.
During the financial year under review, no complaints pertaining to sexual harassment of women employees were received. Further, the Company has a web portal known as "Hitachi Energy Ethics Web Portal" wherein employees can report/ raise inter-alia workplace harassment concerns/ related incidents. The sexual harassment complaints as received via this portal was investigated / being investigated and brought to the attention of the Audit Committee of the Board from time to time.
37. Insolvency and Bankruptcy Code, 2016:
During the financial year under review, neither any application nor any proceeding was initiated against the Company under the Insolvency and Bankruptcy Code, 2016.
38. Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof:
During the financial year under review, the Company has not made any one-time settlement with the banks or financial institutions, therefore, the same is not applicable.
39. Fractional Shares:
Pursuant to the Scheme of Arrangement, entered into between (i) ABB India Limited ("INABB"/ "Transferor") and (ii) the Company ("Company"/ "Transferee") and their respective shareholders and creditors, pursuant to the provisions of Section 230 to 232 and other applicable provisions of the Companies Act, 2013, the Company has allotted shares of the Company to the shareholders of ABB India Limited in accordance with the share entitlement ratio.
Out of the total shares allotted to the shareholders of ABB India Limited, the Company allotted 9,266 Equity shares (pursuant to fractional entitlements of Members of ABB India Limited as per share entitlement ratio) to Hitachi Energy India Limited Fractional Shares Trust 2019 ("Trust") on December 24, 2019. Catalyst Trusteeship Limited ("Catalyst") is acting as Trustee to the Trust effective April 30, 2020.
The total amount paid as on March 31,2024, stood at C 61.17 lakhs consisting of 19,897 Members eligible for the value of such fractional shares and the total amount remained unpaid as on March 31,2024, stood at C 2.10 lakhs pertaining to 722 Members eligible for the value of such fractional shares.
Further, on November 26, 2022 and May 30, 2023, reminder letters were sent through registered post to all
unpaid shareholders wherein the Company has requested the unclaimed shareholders to claim the unclaimed fractional share sale proceeds by submitting the Letter- Cum-Indemnity in the format shared with them.
40. Acknowledgments:
The Board of Directors wishes to place on record their appreciation for the guidance and cooperation received from its parent Company, its customers, members, suppliers, investors, vendors, partners, bankers, associates, government authorities and other stakeholders for their consistent support to the Company in its operations.
The Board of Directors also records their appreciation of the dedication of all the employees at all levels and their commitment to ensuring that the Company continues to grow.