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Black Box Ltd Directors Report

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Oct 11, 2024|03:32:32 PM

Black Box Ltd Share Price directors Report

The Directors of your Company hereby present the Thirty Seventh (37th) Annual Report alongwith the Audited Financial Statements (Consolidated and Standalone) of the Company for the Financial Year ("FY") ended March 31, 2023.

FINANCIAL RESULTS

The summary of the Companys financial performance, both on a consolidated and standalone basis, for the FY2023 as compared to the previous FY2022 is given below:

Rs in Crores

Standalone Consolidated
Year ended 31 March 2023 Year ended 31 March 2022 Year ended 31 March 2023 Year ended 31 March 2022
Revenue from operations 363.37 293.59 6,287.56 5,370.17
Other income 2.22 6.10 21.63 6.36
Total income 365.59 299.69 6,309.19 5,376.53
Profit before finance costs, depreciation, exceptional items and tax 18.40 17.09 294.80 264.13
Less: Finance costs 7.75 5.70 111.28 73.60
Less: Depreciation 6.51 4.49 107.48 98.60
Profit / (loss) before impact of foreign currency transactions and translations, loss / (gain) on financial liability, exceptional items and tax 4.14 6.90 76.04 91.93
Add/(less): Gain / (loss) on foreign currency transactions and translations (net) 1.65 0.64 16.27 2.60
Add: Gain on settlement of financial liability - - - 13.59
Less: Loss on fair valuation of deferred purchase consideration - - (10.55) -
Less: Exceptional item - (1.73) (52.31) (22.14)
Profit/(loss) before tax 5.79 5.81 29.45 85.98
(Add)/Less: Tax (0.05) - 5.75 13.26
Profit/(loss) after tax 5.84 5.81 23.70 72.72
Add/(less): Other Comprehensive Income/(loss) 0.14 0.50 (26.05) (21.31)
Total Comprehensive Income/(loss) for the year 5.98 6.31 (2.35) 51.41
Earnings/(loss) per share of 2/- each after exceptional items:
Basic (in ) 0.35 0.36 1.42 4.45
Diluted (in ) 0.35 0.35 1.41 4.38

FINANCIAL PERFORMANCE

The Company has recorded a gross turnover of 6,288 Crores for FY23 as against 5,370 Crores in FY22 on consolidated basis, reflecting a growth of 17.1% over previous year. On standalone basis, the gross turnover was 363 Crores as against 294 Crores for the period ended March 31, 2023 reflecting a growth of 23.76% over previous year. This growth was mainly attributed by strong order book reflected in new as well as old customer bookings this year and strong execution capabilities across all geographies.

Consolidated EBITDA for FY23 stood at 269 Crores as compared to 260 Crores during FY22. EBITDA margin reduced to 4.29% for FY23 as compared to 4.85% during FY22. The Company took various initiatives focusing on cost rationalization and productivity improvement during H2FY23 to counter the margin pressure and successfully achieved overall margin improvement during H2FY23 due to positive impact of these initiatives. The management expects further improvement in margins going forward.

On Standalone basis EBITDA stood at 17.83 Crores as against 11.63 Crores during FY22, reflecting more than 50% improvement YoY. This was mainly due to significant improvement in sales and better margins in India business.

On consolidated basis, the Company has recorded a net profit before exceptional item of 76 Crores for FY23 as compared to 95 Crores for FY22 despite of higher revenues. On Standalone basis, the net profit stood at 5.84 Crores for FY23 as against net profit of 5.81 Crores for FY22. The underperformance of bottom-line despite of healthy revenue growth was due to significant inflationary pressure seen on overall manpower cost including contingent workforce, supply chain disruptions and higher freight costs.

The Company has taken additional measures to optimise costs and pass on the additional cost to customers while executing new proposals. The Company continues its focus on all the financial metrics together with better liquidity management and profitability growth initiatives.

Key financial matrix provided below highlights overall financial performance of the Company during FY23:

NATURE OF BUSINESS AND STATE OF AFFAIRS OF THE COMPANY

During the year under review, there have been no changes in the nature of business of the Company. The information on the affairs of the Company has been covered under the Management Discussion & Analysis forming part of this Report.

MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the Financial Year to which these financial statements relate and the date of this Report.

SHARE CAPITAL

At the beginning of the FY2023, the Authorized Share Capital of the Company was 1,45,00,00,000/- (Rupees One Hundred and Forty Five Crores Only) divided into 4,50,00,000 Equity shares of 10/- (Rupees Ten only) each, 50,00,000 Cumulative/Non-Cumulative Redeemable Preference Shares and 50,00,000 Convertible Preference Shares of 100/- (Rupees Hundred only) each respectively and the Paid-up share capital of the Company at the beginning of the FY2023 was 32,81,28,540/- (Rupees Thirty Two Crore Eighty One Lakh Twenty Eight Thousand Five Hundred and Forty only) consisting of 3,28,12,854 Equity shares of 10/- (Rupees Ten only) each.

Subsequently, the Equity shares of 10/- (Rupees Ten only) each in the Capital of the Company were sub-divided into Equity Shares of 2/- (Rupees Two Only) each pursuant to approval of Shareholders by way of Special Resolution passed through Postal Ballot on April 20, 2022. Consequently, the Authorized Share Capital of the Company changed to 1,45,00,00,000/- (Rupees One Hundred and Forty Five Crores Only) divided into 22,50,00,000 Equity shares of 2/- (Rupees Two only) each, 50,00,000 Cumulative/Non-Cumulative Redeemable Preference Shares and 50,00,000 Convertible Preference Shares of 100/- (Rupees Hundred only) each respectively. The Paid-up Share Capital changed to 32,81,28,540/- (Rupees Thirty Two Crore Eighty One Lakh Twenty Eight Thousand Five Hundred and Forty only) consisting of 16,40,64,270 Equity Shares of 2/- (Rupees Two only) each.

During the year under review, the Company issued & allotted 36,73,415 Equity Shares of 2/- (Rupees Two only) each to Promoters Group pursuant to conversion of warrants and 1,66,925 Equity Shares of 2/- (Rupees Two only) each to ESOP Allottees pursuant to exercise of Employee Stock Options ("ESOPs") duly vested in them, in accordance with the applicable terms of Companys ESOP Scheme.

Consequently, as on March 31, 2023, the Paid-up Share Capital of the Company got increased to 33,58,09,220/- (Rupees Thirty Three Crore Fifty Eight Lakh Nine Thousand Two Hundred and Twenty only) consisting of 16,79,04,610 Equity shares of 2/- (Rupees Two only) each.

The Company has not made any issue of Sweat Equity Shares or Equity Shares with Differential Voting Rights during the year under review.

DIVIDEND

With a view to conserve resources for future growth, your Directors have not recommended any dividend for the Financial Year ended March 31, 2023.

Pursuant to Regulation 43A of SEBI LODR Regulations, 2015, the Company has formulated a Dividend Distribution Policy effective from April 02, 2021. The said policy is accessible on the Companys website at https://www.blackbox. com/en-us/investors/dividend-distribution-policy

TRANSFER TO RESERVE

With a view to facilitate the growth of the Companys business over the coming years, the Board of Directors have recommended that the entire profits generated in the current Financial Year should be transferred to the reserves of the Company.

HUMAN RESOURCE MANAGEMENT AND HR INITIATIVE

At Black Box, our people and culture are the key enablers to continue creating value for the organization. Our values work as guiding principles for everything we do. We believe in accountability and transparency with all stakeholders. We embrace global citizenship and respect our differences by nurturing diversity. We strive for continuous innovation that anticipates the ever-changing needs of our customers and accelerates their success.

We strongly practice Diversity and Inclusion in our processes and Black Box was conferred with Best Place to Work for Disability inclusion 2022 with 90% Disability Equality Index. Special care is taken to ensure procedures have reduced biases related to a candidates age, race, gender, religion, sexual orientation, and other personal characteristics that are unrelated to their job performance. We work relentlessly to support the women at the workplace and provide them with an ecosystem that nurture their careers while being mindful of their unique challenges. Today, 19% of our workforce consists of women and we have set a target to increase this in the forthcoming years. We practice equity in the workplace by ensuring that all employees collectively have an equal chance to succeed. We believe in hiring a diverse workforce, mitigating gender biases of roles, managing career progression more fairly, and providing benefits to improve work-life balance that supports more successful careers. On International Womens Day, a session ‘Step into Your Spotlight, had been curated specially to help employees raise awareness about their personal brand and help forge positive change for themself.

Talent Acquisition at Black Box is an ongoing strategic approach that focuses on finding the right leaders, or specialists and genera towards its workforce buildup. In this endeavour, we focused on getting the right talent and had more than 900 new hires in the financial year. A strong employee referral program is the best way to spread the word that the organization requires skilled individuals that are the right fit for the job, and we proudly promote this culture in the organization through the employee referral program.

At Black Box the Learning & Development program offers wide range of approaches like online self-learning, interactive learning experiences, and classroom trainings. Training at Black Box is viewed as a process comprised of five related stages - assessment, motivation, design, delivery, and evaluation. A calendared training program is designed and rolled out with training catalogues to meet desired learning outcomes. The Induction program is crucial in making the employees familiar with the culture and the organizations long-term objectives. Our Leadership Excellence Program covered people managers through a six-month blended learning series. The ELEVATE program, for Service Excellence, enables employees to learn about Professional Excellence, and Customer Orientation.

Our people strategies are geared towards building an unparalleled Employee Engagement through mental, physical, and financial wellbeing of our employees. Our employee wellness programs encompass the three areas of employee wellbeing, namely physical, emotional, and financial wellbeing. To help employees take care of their mental health to navigate stress at work and beyond, various webinars on Mental Health Awareness were conducted for global employees. Towards better physical wellness, some health checkup camps were also held to support our employees in this wellness journey. Our benefits program follows an integrated approach and provides a range of options for better financial security to our employees.

At Black Box, we believe in celebrating accomplishments and milestones that contribute to achieving organizational goals. With the vision to build a positive, collaborative, and creative work environment, Black Boxs first ever digital, seamless and multi directional Reward & Recognition platform - iShine was launched this year. This empowers Managers to recognize their team members achievements on the go and enable leaders reward performances that result in exceptional business outcomes and in exceeding individual and company goals and expectations during a quarter and across the year.

Black Box shares its proud moment this year being honored with the "National Best Employer Brands 2022" in the World HRD Congress forum in association with Times Ascent. This award entails the essence of the Organization Branding, which reflects the company managing its Intellectual Capital and employee potential as a corporate asset. It also reflects the organizations commitment to creating a positive brand experience for their employees which is of due importance than just effective management of the customer brand experience. Some of the key criteria for the assessment were translation and combination of the company vision with actions of aligning HR Strategy, weave HR Strategy with Business, and developing capabilities to enable a future-ready organization. This award establishes employees pride, loyalty, and sense of respect at work that has translated into brand of the organization.

MANAGEMENTS DISCUSSION AND ANALYSIS

Managements Discussion and Analysis for the year under review, in terms of the provisions of Regulation 34 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 ("LODR Regulation"), is set out as a separate section, forming an integral part of this Annual Report.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls for ensuring orderly and efficient conduct of its business including adherence to companys 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 with reference to financial statements.

During the year under review, these internal controls have been subject to audit. For details with regard to reportable material weaknesses in the said controls, if any, please refer the Statutory Auditors Report forming part of this Annual Report.

PUBLIC DEPOSITS

The Company has not accepted any fixed deposits, including from the public and as such, no amount of principal or interest was outstanding as on the date of the Balance Sheet.

SUBSIDIARIES/HOLDING COMPANY

During the year under review, the following changes took place in Subsidiaries and Holding Company of the Company: Holding Company

As on March 31, 2023, Essar Telecom Limited and Essar Steel Metal Trading Limited (Promoter group companies) collectively held 11,94,41,430 Equity shares of 2/- each of the Company, constituting 71.14% Promoter shareholding in the Company. Essar Global Fund Limited remains the ultimate Holding Company of the Company.

DISSOLUTION(S)/DEREGISTRATION(S)/DIVESTMENTS

1. Pyrios Pty Limited, Step-down subsidiary of the Company was deregistered w.e.f May 15, 2022.

2. Black Box Holdings Limited, Step-down subsidiary of the Company, has diluted its stake in Black Box DMCC from 86% to 39.50% during the year. Consequently, Black Box DMCC has become Associate Company of the Company as on March 31, 2023.

As on March 31, 2023, the following are the subsidiaries/step-down subsidiaries/Associate Company of the Company:

Sr. No. Name of the Entity Registration Geos Nature of Relationship
1. Black Box Technologies Pte. Ltd. Singapore Subsidiary Company
2. Black Box Technologies Group B.V. Netherlands Step-down subsidiary
3. AGC Networks Philippines Inc. Philippines Step-down subsidiary
4. AGC Networks & Cyber Solutions Limited Kenya Step-down subsidiary
5. Black Box Products FZE Dubai Step-down subsidiary
6. AGC Networks LLC Dubai Step-down subsidiary
7. AGC Networks LLC Abu Dhabi Step-down subsidiary
8. BBX Main Inc. USA Step-down subsidiary
9. Cybalt Inc. USA Step-down subsidiary
10. BBX Inc. USA Step-down subsidiary
11. Black Box Bangladesh Technologies Pvt. Ltd. Bangladesh Step-down subsidiary
12. Black Box Corporation USA Step-down subsidiary
13. Black Box Chile S.A Chile Step-down subsidiary
14. Black Box Network Services (UK) Limited England Step-down subsidiary
15. Black Box Finland OY Finland Step-down subsidiary
16. Black Box Network Services India Private Limited India Step-down subsidiary
17. Black Box Network Services (Dublin) Limited Ireland Step-down subsidiary
18. Black Box Network Services SDN. BHD. Malaysia Step-down subsidiary
19. Black Box de Mexico, S. de R.L. de C.V. Mexico Step-down subsidiary
20. Black Box Norge AS Norway Step-down subsidiary
21. Black Box Network Services Singapore Pte Ltd Singapore Step-down subsidiary
22. Black Box Network Services AB Sweden Step-down subsidiary
23. Black Box Network Services Corporation Taiwan Step-down subsidiary
24. BBOX Holdings Puebla LLC USA Step-down subsidiary
25. Black Box Corporation of Pennsylvania USA Step-down subsidiary
26. Black Box Network Services Inc. - Government Solutions USA Step-down subsidiary
27. Black Box Services Company USA Step-down subsidiary
28. COPC Holdings Inc. USA Step-down subsidiary
29. Delaney Telecom Inc. USA Step-down subsidiary
30. Norstan Communications Inc. USA Step-down subsidiary
31. ACS Investors LLC USA Step-down subsidiary
32. AGC Network LLC USA Step-down subsidiary
33. Norstan Canada Ltd. / Norstan Canada LTEE Canada Step-down subsidiary
34. Nu-Vision Technologies LLC USA Step-down subsidiary
35. ACS Dataline LP USA Step-down subsidiary
36. Black Box Technologies Australia Pty Ltd. Australia Step-down subsidiary
37. Black Box Network Services Australia Pty Ltd Australia Step-down subsidiary
38. Black Box GmbH Austria Step-down subsidiary
39. Black Box Network Services NV Belgium Step-down subsidiary
40. Black Box do Brasil Industria e Comercio Ltda. Brazil Step-down subsidiary
41. Black Box Canada Corporation Canada Step-down subsidiary
42. Black Box Holdings Ltd. Cayman Islands Step-down subsidiary
43. Black Box A/S Denmark Step-down subsidiary
44. Dragonfly Technologies Pty Ltd Australia Step-down subsidiary
45. AGCN Solutions Pte. Limited Singapore Step-down subsidiary
46. Black Box Network Services New Zealand Limited New Zealand Step-down subsidiary
47. Black Box Technologies New Zealand Limited New Zealand Step-down subsidiary
48. Black Box France France Step-down subsidiary
49. Black Box Network Services S.r.l. Italy Step-down subsidiary
50. Black Box Network Services Co., Ltd. Japan Step-down subsidiary
51. Black Box Network Services Korea Limited Korea Step-down subsidiary
52. Black Box International Holdings B.V. Netherlands Step-down subsidiary
53. Black Box P.R. Corp. Puerto Rico Step-down subsidiary
54. Black Box Comunicaciones, S.A. Spain Step-down subsidiary
55. Black Box Network Services AG Switzerland Step-down subsidiary
56. BB Technologies, Inc. USA Step-down subsidiary
57. Black Box Deutschland GmbH Germany Step-down subsidiary
58. Black Box Software Development Services Limited Ireland Step-down subsidiary
59. Black Box International B.V. Netherlands Step-down subsidiary
60. Black Box Network Services Philippines Inc. Philippines Step-down subsidiary
61. BBOX Holdings Mexico LLC USA Step-down subsidiary
62. Black Box Network Services Colombia S.A.S. Colombia Step-down subsidiary
63. Black Box Costa Rica S.R.L Costa Rica Step-down subsidiary
64. Servicios Black Box S.A. deC.V. Mexico Step-down subsidiary
65. Black Box E-Commerce (Shanghai) Co., Ltd. China Step-down subsidiary
66. Black Box Network Services Hong Kong Limited Hong Kong Step-down subsidiary
67. Black Box Technologies LLC Abu Dhabi Step-down subsidiary
68. Black Box Technologies LLC Dubai Step-down subsidiary
69. Fujisoft Security Solutions LLC Dubai Step-down subsidiary
70. COPC Inc. USA Step-down subsidiary
71. COPC International Inc. USA Step-down subsidiary
72. COPC Asia Pacific Inc. USA Step-down subsidiary
73. COPC Consultants (Beijing) Co. Ltd China Step-down subsidiary
74. COPC International Holdings LLC USA Step-down subsidiary
75. COPC (India) Pvt Limited India Step-down subsidiary
76. Service Journey Strategies Inc. USA Step-down subsidiary
77. Black Box DMCC Dubai Associate Company

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

The particulars of loan(s) given, investment(s) made, guarantee(s) given and/or securities provided by the Company along with the purpose for which such amount of loan, guarantee or security is proposed to be utilized by the recipient, has been provided in the notes to financial statements.

STATUTORY AUDITORS AND THEIR REPORT

M/s. Walker Chandiok & Co LLP, Chartered Accountants (ICAI Registration No. 001076N/N00013) were re-appointed as the Statutory Auditors of the Company, vide resolution passed by Shareholders at the 33rd Annual General Meeting (AGM) of the Company to hold office for a period of Five (5) year commencing from conclusion of the 33rd AGM till the conclusion of 38th AGM of the Company.

Statutory Auditors Report

The Statutory Auditors Report on the financial statements of the Company (Standalone & Consolidated) for the financial year ended March 31, 2023, has been annexed to the financial statements contained in this Annual Report. The Statutory Auditors have expressed their Emphasis of Matter (EOM) on the Standalone & Consolidated financial statements of the Company in the said report. Further, the said EOM along with the managements response on the same is given below:

A. Standalone Audit Report:

Emphasis of Matters - Non- compliances with laws and regulations

"We draw attention to Note 47 to the accompanying standalone financial statements which describes the delay in remittance of import payments and repatriation of proceeds of export of goods and services, aggregating to 3.28 Crores and 17.82 Crores, respectively, outstanding as at 31 March 2023 beyond the timelines stipulated under the Foreign Exchange Management Act, 1999, as amended from time to time. The management has filed necessary applications with the appropriate authority for extension of time period and condonation of such delays. The management is of the view that the fines /penalties, if any that may be levied, are currently unascertainable but not expected to be material and accordingly, no adjustments have been made to the accompanying standalone Financial statements in respect of aforesaid delays. Our opinion is not modified in respect of this matter."

Managements views on the above:

The outstanding balance of trade payables, trade receivables and other financial assets as at 31 March 2023 includes amount payable aggregating to 3.28 Crores and amount receivable aggregating to 6.02 Crores and 11.80 Crores, respectively, to/ from the companies situated outside India. These balances are pending for settlement and have resulted in delay in remittance/ collection beyond the timeline stipulated under the Foreign Exchange Management Act, 1999. The Company has filed necessary application with AD Category I bank (‘AD Bank) for extension of time limit on payables aggregating to 2.71 Crores during the current year and on payables aggregating to 0.24 Crores subsequent to 31 March 2023. For the remaining payables amounting to 0.33 Crores where extension has not been filed, management is planning to approach AD Bank or RBI with write off request. Similarly, the Company has filed application with AD Bank for extension of time limit for the aforementioned receivables aggregating to 15.43 Crores during the current year and on receivables aggregating to 2.39 Crores subsequent to 31 March 2023. For all the cases, approval is pending from AD Bank.

Pending conclusion of the aforesaid matter, the amount of penalty, if any, that may be levied, is not ascertainable but not expected to be material and accordingly, the Statement does not include any adjustments that may arise due to such delays.

B. Consolidated Audit report

Emphasis of Matters - Non- compliances with laws and regulations

"As stated in note no. 50 of the Auditors report on Consolidated Financial Statement of the Company which describes the delay in remittance of import payments and repatriation of proceeds of export of goods and services, aggregating to 1788 Crores and 2034 Crores, respectively, by the Holding Company and its subsidiary companies incorporated in India, outstanding as at 31 March 2023 beyond the timelines stipulated under the Foreign Exchange Management Act, 1999, as amended from time to time. The respective management of companies, as aforesaid, have filed necessary applications with the appropriate authority for extension of time period and condonation of such delays. The management is of the view that the fines/penalties, if any, that may be levied, are currently unascertainable but not expected to be material and accordingly, no adjustments have been made to the accompanying consolidated financial statements in respect of aforesaid delays. Our opinion is not modified in respect of this matter.

Managements views on the above:

The outstanding balance (before eliminating inter-company balances) of trade payables, trade receivables and other financial assets as at 31 March 2023 includes amount payable aggregating to 17.88 Crores and amount receivable aggregating to 8.54 Crores and 11.80 Crores, respectively, to/ from the companies situated outside India. These balances are pending for settlement and have resulted in delay in remittance/ collection beyond the timeline stipulated under the Foreign Exchange Management Act, 1999. The Holding Company and its subsidiary companies, incorporated in India, have filed necessary application with AD Category - I bank (‘AD Bank) for extension of time limit on payables aggregating to 11.81 Crores during the current year and on payables aggregating to 0.79 Crores subsequent to 31 March 2023. Similarly, the Holding Company and its subsidiary companies, incorporated in India, have filed application with AD Bank for extension of time limit for the aforementioned receivables aggregating to 17.20 Crores during the current year and on receivables aggregating to 2.92 Crores subsequent to 31 March 2023. For all these cases, approval is pending from AD Bank. Further, for the remaining payables and receivables amounting to 5.28 Crores and 0.22 Crores, respectively, where extension has not been filed, management is planning to approach AD Bank or RBI with write off request.

Pending conclusion of the aforesaid matter, the amount of penalty, if any, that may be levied, is not ascertainable but not expected to be material and accordingly, the consolidated financial statements do not include any adjustments that may arise due to such delays.

SECRETARIAL AUDITORS AND THEIR REPORT

Pursuant to Section 204(1) of the Act and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit of the Company was carried out by Dr. S. K. Jain, Practicing Company Secretary (FCS No. 1473) & Proprietor of M/s. S. K. Jain & Co., (Secretarial Auditor) for FY2023. The Report given by the Secretarial Auditor is annexed as Annexure - I and forms an integral part of this Boards Report.

REPORTING OF FRAUDS BY THE AUDITORS

During the year under review, neither the Statutory Auditor nor the Secretarial Auditor has reported to the Audit Committee or Board, pursuant to the provisions of Section 143(12) of the Act, any fraud committed against the Company by its employees or officers.

COST RECORDS AND COST AUDIT

The maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act, are not applicable for the business and activities carried out by the Company.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has also implemented several benchmark corporate governance practices as prevalent globally. The Corporate Governance Report, as stipulated under the SEBI LODR Regulations, forms an integral part of this Annual Report. Further, in accordance with the applicable provisions of Schedule V of the said Regulations, a compliance certificate issued by M/s. S. K. Jain & Co. LLP, Practicing Company Secretaries (ICSI Certificate of Practice No. 3076), confirming that the Company has complied with the conditions of corporate governance is annexed herewith and marked as Annexure II.

NUMBER OF BOARD MEETINGS

During the FY2023, 4 (Four) Board meetings were held. Further detail on the same is available in the Corporate Governance Report which forms part of this Annual Report.

The Company has complied with the requirements prescribed under the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) read with the MCA Circulars granting exemptions.

EMPLOYEES STOCK OPTION SCHEME

Pursuant to the shareholders approval dated April 21, 2015, the Nomination and Remuneration Committee of the Board of Directors of the Company has granted stock options as per the terms of "AGC Networks Employee Stock Option Scheme 2015" from time to time, to the employees and executive directors of the Company and its subsidiary(s). The following table shows detailed information with regards to the same:

Total options granting eligibility of the Company (A) 71,16,615
Total options granted as on 31.3.2022 (B) 77,94,565
Total options lapsed as on 31.3.2022 (C) 47,08,390
Options available for grant as on 31.3.2022 (D) = (A-B+C) 40,30,440
Options granted during the FY 2022-23 (E) -
Options lapsed/cancelled during the FY 2022-23 (F) -
Options available for grant as on 31.3.2023 (H) = (D-E+F) 40,30,440

Disclosures on ESOP Scheme of the Company for the FY2023, pursuant to Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014:

Sr. No. Particulars FY2023
1 Total No. of Shares covered by ESOP Scheme approved by the Shareholders 71,16,615
2 Options Granted NIL
3 Options Vested 1,66,925
4 Options Exercised 1,66,925
5 The total no. of shares arising as a result of options 1,66,925
6 Options Lapsed NIL
7 Pricing Formula 10% discount on last closing price
8 Variation of terms of Options/Exercise Price
9 Money realized by exercise of Options 35,72,195
10 Total No. of Options in force 5,36,480

Diluted Earnings per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20: Kindly refer note no. 32 (Standalone) forming part of notes to accounts.

Where the company has calculated the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options: Kindly refer note no. 33 (Standalone) forming part of notes to accounts.

The details pursuant to the SEBI ESOP Regulations have been placed on the website of the Company and web link of the same is https://www.blackbox.com/en-in/investors/corporate-governance/esop

TRANSFER OF UNPAID AND UNCLAIMED DIVIDEND/SHARES TO IEPF

The dividends which remained unpaid/unclaimed for a period of more than seven consecutive years from the date of transfer to respective unpaid dividend account, have been transferred on due dates by the Company to the Investor Education and Protection Fund ("IEPF") established by the Central Government.

Pursuant to the applicable provisions of Section 124 of the Companies Act, 2013 (the "Act") read with applicable provisions of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the Rules"), the Company is required to transfer all amounts of dividend that has remained unpaid or unclaimed for a period of seven years from the date of transfer to respective unpaid dividend account, to the IEPF Fund. Further, according to the applicable provisions of the said section read with the rules made thereunder, the Company is also required to transfer the corresponding shares with respect to the unpaid/unclaimed dividend, which has not been paid or claimed for seven consecutive years or more, to the demat account of the IEPF Authority.

Accordingly, the Company has transferred unpaid/unclaimed dividends alongwith the corresponding shares to IEPF Fund within the time limits prescribed under the said section and rules. The details of the shares already transferred and the shares which are due for transfer have been uploaded on the website of the Company and can be accessed at https://www.blackbox.com/en-in/investors/investor-services/iepf

Members are further informed that the Company has been facing technical difficulty in submission of E-verification Report with IEPF authority in respect of claims received from shareholder for transfer of shares and unclaimed dividend from IEPF authority. There were several claims which were received by the Company and e-verifications could not be submitted with IEPF Authority due to the said technical difficulty which lead to rejection of all such claims from IEPF authority. In the interest of shareholders, the Company had initially filed verification report in physical form to overcome the challenge being phased while submission of E-verification report. However, IEPF did not consider the verification report in physical mode and all such claims were also rejected. We have made sincere efforts to get this issue resolved as early as possible. However, till date no solution has been provided by IEPF authority. The Company is engaging with Ministry of Corporate Affairs to get the issue resolved and will update all the shareholders in due course of time.

As per SEBI Circular dated December 30, 2022, the Company has opened Suspense Escrow Demat Account and it is disclosed that there were no shares lying at the beginning/during/at the end of the FY2023.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

All Directors of the Company, including the Independent Directors, are provided with necessary documents/ brochures, reports and internal policies to facilitate their familiarization with the procedures and practices followed by the Company. Further, periodic presentations are made at the meetings of the Board of Directors and its various Committees, on business and performance updates of the Company, global business environment, business strategy and risks involved. Quarterly updates, new amendments, circulars and notifications issued by the regulatory authorities including ROC, RBI and SEBI which mandates further compliances for the Company and landmark judicial pronouncements encompassing important laws are regularly circulated to the Directors.

Further, at the time of appointment of any Independent Director the Company issues a formal letter of appointment outlining his/her role, function, duties and responsibilities alongwith Code of Conduct to be adhered by the Directors. The Familiarization Policy for Independent Directors is accessible on the website of the Company at https://blackbox. com/investors/familiarization-policy-of-independent-directors

VIGIL MECHANISM

The Vigil Mechanism of the Company in terms of the LODR Regulations, has been established through the Whistle Blower Policy/Policy on Vigil Mechanism of the Company. Protected disclosures can be made by a Whistle Blower through an e-mail or a letter to the Chief Ethics Officer or to the Chairman of the Audit Committee. The Policy on Vigil Mechanism/Whistle Blower Policy may be accessed on the Companys website at the link https://www.blackbox.com/ investors/Whistle-Blower-Policv

PERFORMANCE EVALUATION

In terms of the requirement of the Companies Act, 2013 and LODR Regulations, annual performance evaluation of the Board, the Chairman of the Board, Independent and Non-Independent Directors and various Committees of the Board for the Financial Year 2023, was undertaken by the Company.

The evaluation was carried out through questionnaire based rating assessment mechanism where the evaluators were requested to give rating for each criteria set for evaluating the performance of the Director or the Committee of which, the performance was being evaluated. The board evaluation process was focused around how to make the Board more effective as a collective body in the context of the business and the external environment in which the Company functions. From time to time during the year, the Board was appraised of the business issues and the related opportunities and risks. The Board discussed various aspects of the functioning of the Board and its Committees such as structure, composition, meetings, functions and interaction with management.

Additionally, during the evaluation process, the Board also focused on the contribution being made by the Board as a whole as well as through Committees. The overall assessment of the Board was that it was functioning as a cohesive body including the Committees of the Board that were functioning effectively.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023 will be available on the Companys website on https://www.blackbox.com/en-in/investors/financials/annual-returns

DIRECTORS AND KEY MANAGERIAL PERSONNEL ("KMP")

Section 152 of the Act provides that unless the Articles of Association provide for the retirement of all directors at every AGM, not less than two-third of the total number of directors of a public company (excluding the independent directors) shall be persons whose period of office is liable to determination by retirement of directors by rotation. Accordingly, Mr. Anshuman Ruia (DIN:00008501) Executive Director of the Company shall retire by rotation at the ensuing AGM and being eligible has offered himself for re-appointment.

Mr. Dilip Thakkar who was appointed as Independent Director by the shareholders of the Company at the 32nd AGM held on August 01, 2018, is proposed to be re-appointed for a further period of 5 Years w.e.f August 01, 2023.

The above proposals will be considered for approval by the shareholders of the Company at the ensuing AGM scheduled on Tuesday, September 26, 2023.

As on March 31, 2023, the Company had the following KMPs:

• Mr. Sanjeev Verma, Whole-time Director (DIN:06871685)

• Mrs. Mahua Mukherjee, Executive Director (DIN:08107320)

• Mr. Deepak Kumar Bansal, Executive Director & Chief Financial Officer (DIN:07495199)

• Mr. Anshuman Ruia, Executive Officer (DIN:00008501)

• Mr. Aditya Goswami, Company Secretary & Compliance Officer

The Company has received declarations from all the Independent Directors on its Board, confirming that he/she meets criteria of independence laid down under Section 149(6) of the Act and Regulation 16(1)(b) of LODR Regulations and that he/she is not aware of any circumstance/situation, which exists or may be reasonably anticipated, that could impair/impact his/her ability to discharge the duties of an Independent Director with objective independent judgment and without any external influence. These declarations and confirmations of the Independent Directors were duly noted by the Board of Directors after due assessment. Consequently, the Board is of the opinion that all Independent Directors of the Company fulfil the criteria of independence specified under the Act & SEBI LODR Regulations and are independent from the management of the Company.

Further, in the opinion of the Board of Directors, all Independent Directors of the Company hold highest standards of integrity and possess requisite expertise & experience enabling them to fulfil their duties as Independent Directors.

For detailed composition of Board of Directors and various Committees, kindly refer the Corporate Governance Report forming part of the Annual Report.

The Nomination and Remuneration Committee of the Company has devised a policy for performance evaluation of Directors, Board and Senior Management which includes the criteria for performance evaluation as well as the remuneration policy for the Directors, Senior Management and Employee of the Company. These policies are annexed to this report as Annexure III and Annexure IV respectively and are also accessible on the Companys website at the link https://www.blackbox.com/en-us/investors/performance-evaluation-policv and https://www.blackbox.com/ investors/remuneration-policy respectively.

COMMITTEES OF THE BOARD

The details relating to various Committees constituted by the Board of Directors of the Company are mentioned in the ‘Corporate Governance Report, which forms a part of the Annual Report.

CODE OF CONDUCT FOR DIRECTORS & SENIOR MANAGEMENT

Pursuant to the provisions of Regulation 17(5) of the LODR Regulations, a Code of Conduct for the Directors & Senior Management of the Company has been formulated & approved by the Board of Directors. Further, in accordance with the provisions of Regulation 26(3), all Directors & members of Senior Management of the Company have affirmed compliance with the said Code of Conduct during the Financial Year 2023.

The said Code of Conduct is accessible on the Companys website at the link https://www.blackbox.com/en-us/ investors/Code-Of-Conduct-Directors

Further, pursuant to the provisions of Regulation 34(3) readwith Schedule V Part D of the LODR Regulations, Mr. Sanjeev Verma, Whole-time Director, has issued a declaration stating that all the Directors and members of Senior Management of the Company have complied with the Code of Conduct of the Company during the FY2023. The said declaration has been disclosed in the Corporate Governance Report forming part of the Annual Report.

PERSONNEL

The Board places on record its appreciation for the hard work and dedicated efforts put in by all the employees. The relations between the management and employees continue to remain cordial on all fronts.

The statement of particulars of appointment and remuneration of managerial personnel and employees of the Company 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 annexed to this Report as Annexure V.

Having regard to the provisions of the second proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

POLICY ON PREVENTION OF GENDER HARASSMENT AT WORKPLACE AND INTERNAL COMPLAINTS COMMITTEE ("ICC")

The Company has in place a policy for prevention, prohibition and redressal of gender harassment at workplace. Appropriate reporting mechanisms are in place for ensuring protection against gender harassment and the right to work with dignity.

Further, in accordance with the applicable provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company had constituted an Internal Complaints Committee ("ICC") to consider and resolve sexual harassment complaints raised by the employees of the Company. The constitution of the ICC is in accordance with the applicable provisions of the said Act.

During the year under review, no complaints were received from any of the employee(s) of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO

(i) Part A pertaining to conservation of energy is not applicable to the Company.

(ii) Part B pertaining to particulars relating to technology absorption is as per Annexure VI to this report.

(iii) Part C pertaining to foreign exchange earnings and outgoings is as mentioned below:

Rs in Crores

EXPENDITURE IN FOREIGN CURRENCY (ACCRUAL BASIS) FY2023 FY2022
Service charges 0.31 0.39
Travelling and conveyance expenses 0.50 0.25
Expenses reimbursement paid 0.11 0.46
Total 0.92 1.11
EARNINGS IN FOREIGN CURRENCY (ACCRUAL BASIS) FY2023 FY2022
Sale of goods and services (Including sale from overseas branch and to Export Oriented Units) 32.38 33.04
Interest and Commission income 0.11 0.33
Expenses reimbursement received 15.41 18.31
Total 47.90 51.68

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy is accessible on the Companys website at the link https://www. blackbox.com/en-us/investors/csr-policv

The Report on CSR activities is annexed herewith marked as Annexure VII.

RISK MANAGEMENT POLICY

The Company has a comprehensive Risk Management Policy in place which clearly indicates all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks that have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. The Risk Management Policy is accessible on the Companys website at https://www.blackbox.com/en-us/investors/risk-management-policy

In terms of Regulation 21(5) of SEBI (LODR) Regulations, 2015, the Board of Directors of the Company has constituted the Risk Management Committee (the "Committee" or "Risk Committee") on April 02, 2021. The Committees constitution and terms of reference meet with the requirements of the Regulations. The Risk Committee dwells upon the potential risks associated with the business and their possible mitigation plans and is responsible for Framing, Overseeing and Monitoring implementation of Risk Management Policy.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the Companys policy of on materiality of related party transactions. Most of these are purchase/sales transactions and maintenance services transactions which are of the duration of 3 months to 12 months. Your Directors draw attention of the members to Note no. 39 (Consolidated) and note no. 36 (Standalone) to the financial statement which sets out related party disclosures.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may is accessible on the Companys website at the link https://blackbox.com/investors/rpt

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors state that:

a. in the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b. the Directors have selected such accounting policies and applied them consistently and made judgements 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 on March 31, 2023 and of the profit/(loss) of the Company for the financial year ended on the said date;

c. the Directors 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;

d. the Directors have prepared the annual accounts on a ‘going concern basis;

e. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company; work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial 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 Companys internal financial controls were adequate and effective during FY2023.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANK- RUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT 31 MARCH, 2023

There are no proceedings initiated/pending against the Company under the Insolvency and Bankruptcy Code, 2016 which materially impact the business of the Company.

ACKNOWLEDGEMENTS

The Board is thankful to the Shareholders, Bankers and Customers of the Company for their continued support. It also takes this opportunity to express gratitude to its various suppliers and its partners for their continued co- operation, support and assistance. Above all, the Board expresses its appreciation to each and every employee for his / her contribution, dedication and sense of commitment to the Companys objectives.

For and on behalf of the Board of Directors
Sanjeev Verma Mahua Mukherjee
Whole-time Director Executive Director
DIN: 06871685 DIN: 08107320
Dallas, USA Navi Mumbai
August 12, 2023 August 12, 2023

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