hil ltd Directors report

Dear Members,

The Board of Directors are pleased to present the 76th Annual Report on the business and operations of the company along with audited financial statements for the financial year ended March 31, 2023.

SUMMARY OF FINANCIAL PERFORMANCE

The financial performance of the company for financial year ended March 31, 2023 is summarised below:

(Rs in Crores)

	Standalone		Consolidated
Particulars
	2022-23	2021-22	2022-23	2021-22
Total Income	2187.73	2005.45	3504.30	3550.68
Earnings Before Interest, Depreciation, Amortization & Tax	228.37	306.63	248.26	421.85
Less : Interest	6.63	4.51	19.57	12.61
Depreciation & Amortization	58.06	53.81	110.77	116.30
Profit Before Tax and Exceptional items	163.68	248.31	117.92	292.94
Add/(Less): Exceptional items / Profit / Income from JV	-	-	(1.19)	2.18
Profit before tax for the year	163.68	248.31	116.73	295.12
Less: Taxes	33.58	62.48	19.62	84.68
Profit after tax for the year	130.10	185.83	97.11	210.44
Other Comprehensive Income (Net of tax)	0.88	(0.39)	27.14	(7.56)
Total Comprehensive Income for the year	130.98	185.44	124.25	202.88
Basic Earnings Per Share (INR)	172.95	247.73	129.09	280.54
Diluted Earnings Per Share (INR)	172.91	246.12	129.06	278.72

REVENUE

The company achieved a net revenue from operations on standalone level at RS 2155.20 Crores as against RS 1973.48 Crores in previous financial year, which is an increase of 9.21%. At the consolidated level HIL registered a net revenue of H 3478.96 Crores as against H 3520.24 Crores in the previous year recording a marginal decline of 1.17%.

With the addition of new capacities and introduction of new products, HIL anticipates a positive demand momentum in coming year.

INTEREST & LOANS

Interest cost for the financial year 2022-23 has increased to RS 6.63 Crores at a standalone basis as against RS 4.51 Crores during the previous year. On a consolidated basis, interest cost for the financial year 2022-23 stood at RS 19.57 Crores as against RS 12.61 Crores in the previous year. The increase in interest cost is on account of increase in borrowings for working capital requirements and also on account of significant increase in borrowing cost.

As on March 31, 2023 the company has outstanding borrowings

Rs 117.13 Crores on standalone basis and Rs 407.45 Crores at consolidated level. Debt Equity ratio on consolidated basis stood at 0.33 times as on March 31, 2023 against 0.25 times as on March 31, 2022.

PROFIT BEFORE TAX

During the year under review, the company registered a standalone Profit Before Tax (PBT) of RS 163.68 Crores as against RS 248.31 Crores in the previous year, recording a decline of 34.08% mainly on account of increase in fibre, cement and volatility in resin prices.

Profit before tax on consolidated basis for the year 2022-23 stood at RS 116.73 Crores as against RS 295.12 Crores in previous year, recording a decline of 60.45%.

NET WORTH

On a consolidated basis, the Net Worth of the company as at March 31, 2023 stood at RS 1243.65 Crores as against RS 1166.43 Crores in the previous year.

The Consolidated earnings per share (basic) for the year ended March 31, 2023 stood at RS 129.09 per share as against RS 280.54 per share for the year ended March 31, 2022.

BUSINESS AND FINANCIAL PERFORMANCE

HIL commits to a path of progression to position itself as a one stop building solutions provider. On the business front, roofing solutions business delivered highest volume and revenue. The solution based approach enabled highest ever volume in the building solutions business. The polymer solutions business delivered a marginal growth due to severe volatility in input material cost. Owing to the on-going geopolitical crisis in Europe, inflation has significantly gone up across many European Countries which has led to low sentiments at the market place. During the year, company laid down a strong foundation for the construction chemicals business by launching over fifty products in four different categories. HIL has a great opportunity in this segment to grab more opportunities.

Amidst strong headwinds due to material unavailability / price volatility, sea freight explosion and weak rural sentiments, revenues remained buoyant with stringent focus on new markets, expanding product base and getting the right product mix. The companys focus on new markets, expanding product base and getting the right product mix, helped in better realisations from the market. Strategic market mapping and in-depth tabs on each region, ensured that your company is on a growth trajectory and registered a 9% growth in domestic markets.

The challenges in Europe were stronger and affected Parador due to inflationary pressures on raw material prices as well as an increase in energy costs and sea freight. Due to lower demand, the overall business was negatively impacted.

ROOFING SOLUTIONS

HIL has enhanced its market leadership position during the year. Strong brand presence across rural India and focus on new dealer/sub-dealer recruitment as well as engagement activities and ‘Digital Connect helped boost sales while improving net sales realizations.

To cater to the rural demand in the first quarter, we focused on inventory & logistics planning and worked out aggressive dealer wise targets, which helped gain additional market share.

An aggressive channel acquisition strategy helped to add new counters during the year, enabling the roofing business to register a positive volume growth over the previous year. The company is confident to further consolidate its leadership position in this industry.

"Charminar" and "Charminar Fortune" brands continue to enjoy the trust of customers backed by companys enhanced customer-centric approach, unparalleled quality, superior after sales customer service, strong supply chain network and widely spread depots and dealer network.

BUILDING SOLUTIONS

The Building Solutions business consists of "Wet Walling" and "Dry Walling" solutions that caters to various requirements of building industries, commercial spaces and infrastructure segments. The governments thrust on infrastructure, health care and education segments helped us achieve a robust business performance during the year.

The company is aggressively focused on product specifications through the technical sales team to gain high-value projects in the infrastructure and health care segments. With a firm focus on realizations for the Building Solutions products, we carefully select the customers and locations we service in tier 2 & tier 3 cities.

In FY23, the company enhanced its capacity for AAC Blocks and Panels to meet the growing demand of customers. As part of companys long term growth strategy and in view of the increased in demand for AAC Blocks the company has expanded its presence in Eastern India market by way of acquisition of Fastbuild Blocks at Cuttack, Odisha. We also commissioned the panels plant at Balasore, Odisha during the year.

HIL continues to be a comprehensive provider of quality products in the building materials space by offering all relevant products under one roof thereby retaining and enhancing its customer base. To counter the challenges of increased input cost the company has focused on process efficiency and lean management principles in these factories to optimize costs.

POLYMER SOLUTIONS

This segment consists of "Pipes & Fittings" and "Wall Putty" is marketed under the brand name "BIRLA HIL". Polymer Solutions business grew marginally during FY23 amidst significant external headwinds. We focused on the expansion of our distribution network, added prestigious project accounts with esteemed builders / developers across India and also expanded our product portfolios. We continue to enhance our strong engagement with influencers i.e. plumbers & painters and also our retail marketing efforts to drive stronger brand preference.

Birla HIL Pipes

Birla HIL Pipes offers a wide range of plumbing solutions, including cPVC, uPVC, Column Pipes, SWR, Foam core, Pressure & UGD Pipes, Fittings and Water Tanks conforming to relevant IS or ASTM specifications. The company has a state of the art DSIR-approved R&D facility where in-house recipes are developed and innovations to improve quality are undertaken. BIRLA HIL Pipes and Fittings have a unique TrueFit™ technology that offers 100% leak-proof joints and enhances the value propositions for consumers. Continuing our expansion of our product portfolio, Foam core is a recent addition – these are multilayer pipes having outer and inner layers of conventional PVC and middle layer of foamed PVC.

During FY23, BIRLA HIL Pipes showed a robust volume growth of 22% over FY22, outperforming the industry growth. The company has grown ~7X in last 6 years in the Pipes & Fittings segment. This was enabled by strategic focus on tier 2 and tier 3 towns in retail segment. We also brought a focused approach on technical sales in B2B segment with marquee residential projects across India.

Birla HIL Putty

With superior quality, BIRLA HIL putty has created a strong and loyal customer base. We have added Gypsum Plaster and Waterproof Putty to our product portfolio to cater to our increased customer demand. BIRLA HIL Wall Putty made with cutting-edge "TRUE COLOUR" technology, is effective on all types of cementitious surfaces. We now have presence across India with a robust distribution network and a significant presence in tier 2 and tier 3 towns.

The company continues to drive strong engagement programs with channel partners and influencers via various on ground workshops. We continue to launch new ranges of product lines and application procedures. A dedicated loyalty programme for retailers and influencers has been initiated as a part of direct connect program where they can earn points and also redeem accumulated points for various gifts basis their business transactions.

FLOORING SOLUTIONS

This segment was strongly influenced by the global pandemic and then the ensuing crisis emanating out of the Ukraine war. These headwinds have been accentuated by a strong inflationary environment and disruptions in supply chain for both raw materials and finished goods. Interest rates have risen, impacting investments in the construction and real estate sectors. Both demand and the cost scenarios have been weak.

However, the outlook is cautiously optimistic. With the stabilization of supply cha in and input costs, we are witnessing the first signs of stabilization. Further, measures taken by European governments will stimulate consumer sentiments. We will also continue to strengthen our presence in markets beyond Europe.

AWARDS & RECOGNITION

Super Brand Award 2022

Super brands, a global organisation present in 90 countries recognises, showcases and pays tribute to the best brands inheach country. It recognises the brand custodians persevering efforts to build brands that are strong on consumer perceptions. ‘Super brand status strengthens a brands image, adds prestige and easily sets the brand apart from its competitors. "Charminar" and "Birla Aerocon" have been the recipients of this prestigious award this year as well.

The Economic Times Best Brands

"Charminar" and "Birla Aerocon" awarded as Best Brands 2022 by The Economic Times in Roofing Building Materials 2022. The Economic Times Best Brand is a research-based initiative that endeavours to ‘highlight brands that have gained customers confidence, maintained their positions over a period and sailed successfully through dynamic market challenges. This is a testimony of our continued efforts to engage with our customers.

Asias Most Trusted Brand 2022

IBC Info media recognized "Charminar" as Asias Most Trusted Brand 2022 in recognition of years of trust built among its customers. Awarded on the basis of extensive market research, expert analysis and an attribute-based qualitative research approach, it is a distinctive recognition for the company.

Brand of the Year by Realty+

"Charminar" and "Birla Aerocon" brands are honoured as Brand of the Year at 7th Realty+ INEX Interior & Exterior Conclave Excellence Awards 2023. This award is in recognition for exemplary performance and achievement, contribution to making a positive difference in the Indian real estate industry and outstanding leadership in the market. Realty+ is one of the oldest and most prestigious publications of the country in real estate segment.

‘Brand of the Year - Wall Finishes for Birla HIL Putty at 7th Realty+ INEX Awards 2023, realty industry awards and conclave. These Awards recognized BIRLA HIL Putty for its ‘exemplary performance and achievement and ‘contribution to making a positive difference in the Indian real estate industry. Realty+ is the oldest and most respected real estate publication in the country. The event saw Indian and international architects and building product brand leaders joining to discuss the way forward for the design and construction industry.

BIRLA HIL Pipes was adjudged as the ‘Most Trusted Brands for 2023. This award from Team Marksmen recognizes the trust and quality standards instituted at BIRLA HIL Pipes.

BIRLA HIL PipesRswas awarded as ‘Indias Most Trusted Brand for 2022. Awarded on the basis of extensive market research, expert analysis and an attribute-based qualitative research approach, it is a distinctive recognition for the company.

Great Place to Work, 2023

The company has been certified as a Great Place to Work for the fifth time in a row for 2023-24 with an outstanding trust index score of 93 this year. HIL is ranked amongst:

- Indias Best Companies To Work forTM, ranked at 27

- Indias 25 Best Workplaces in Manufacturing 2023

- Indias Best Workplaces in Cement and Building Materials – 2023

- Indias 50 Best Workplaces in Building a Culture of Innovation by All – 2023

CREDIT RATING

ThecreditratingsonCompanyslongtermandshorttermfacilities have been reaffirmed during the financial year by the respective credit rating agencies and the same is furnished below:

S. No.	Agency	Type	Rating
1	ICRA	Long Term -	ICRA AA/Stable
		Credit Facilities
2	ICRA	Short Term - Debt	ICRA A1+
3	India Ratings	Long Term - Term Loan	IND AA/Stable

DIVIDEND

During the year under review, the Board of Directors declared an interim dividend of RS 20/- per equity share of H10/- each (200% of the paid-up value). The Directors are pleased to recommend a final dividend of RS 25/- per equity share of H10/- each (250% of the paid-up value) for approval of the shareholders at ensuing 76th Annual General Meeting of the company.

With the proposed final dividend, the total dividend for the financial year 2022-23 works out to be RS 45/- per equity share (450% of the paid-up value) as against the total dividend of RS 65/- per equity share (650% of the paid-up value) declared in the previous year.

As per Finance Bill 2020, dividend declared/paid after 1st April 2020 will be taxable in the hands of the shareholders. Shareholders are requested to visit www.hil.in/investor-relations for FAQs on dividend tax.

The total dividend for the financial year is H 33.91 Crores and the company has transferred RS 10.00 Crores to the General Reserves out of the profits for the year. The Register of Members and Share Transfer Books of the company will remain closed from Saturday, July 22, 2023 to Monday, July 31, 2023, both days inclusive, for determining the entitlement of the shareholders for the final dividend for the financial year ended March 31, 2023 and for the purpose of AGM.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ("SEBI Listing Regulations"), the Board of Directors of the company have adopted a Dividend Distribution Policy. The policy lays down a broad framework and factors which the Board considers for deciding the distribution of dividend to its shareholders. The said policy is available on the companys website https://hil.in/investor-relations/policies/

TRANSFER TO GENERAL RESERVES

During the year under review, the company has transferred H10 Crores (Rupees Ten Crores only) to General Reserves.

SHARE CAPITAL

The paid-up equity share capital as on March 31, 2023 was RS 756.48 Lakhs. During the year under review, the company has issued 23,660 equity shares on exercise of options granted to eligible employees under HIL Employees Stock Option Scheme 2019 and further there was no other change on paid-up capital of the company.

LISTING WITH STOCK EXCHANGES

The Equity Shares of the company are listed on National Stock Exchange of India Limited and BSE Limited. Annual listing fees for the year 2022-23 has been paid to these exchanges within the prescribed timelines. There was no suspension on shares of the company during the year.

During the financial year 2022-23, the issued and listed capital of the company has increased due to allotment of equity shares to eligible employees of the company on exercise of options granted under HIL Employee Stock Option Scheme, 2019 ("HIL ESOS 2019"). Further, the difference of 2224 equity shares of RS 10/- each between the issued capital and listed capital of the company as on March 31, 2023 was due to allotment of 2224 equity shares of H10/- each on March 10, 2023 to one of the eligible employees under HIL ESOS 2019 for which listing & trading approval from BSE and NSE was received after March 31, 2023 i.e. on April 21, 2023 and the said shares are listed on both the Stock Exchanges w.e.f. April 24, 2023.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

A Report on Management Discussion & Analysis is appended as Annexure I‘ to this report as per the requirements of SEBI (Listing Obligations & Disclosures Requirements) Regulations 2015.

DIRECTORS & KEY MANAGERIAL PERSONNEL

During the year under review, Mr. Dhirup Roy Choudhary (DIN: 07707322), who got re-appointed as Managing Director (MD) & Chief Executive Officer (CEO) of the company for a second term effective January 16, 2022 and whose re-appointment was approved by the members of the company at their 75th Annual General Meeting (AGM) held on July 29, 2022, resigned from the position of MD & CEO with effect from January 31, 2023. The Board approved his resignation at its meeting held on January 19, 2023 and placed on record its sense of great appreciation for the work done by Mr. Dhirup Roy Choudhary during his tenure as MD & CEO.

Consequent to the resignation of Mr. Dhirup Roy Choudhary, the Board of Directors of the company at its meeting held on January 19, 2023, based on the recommendations of the Nomination and Remuneration cum Compensation Committee ("NRC"), appointed Mr. Akshat Seth (DIN:10039820) as an Additional Director, Managing Director ("MD") & Chief Executive Officer

("CEO") of the company for a period of (5) five years with effect from February 1, 2023 at such remuneration and under such terms & conditions as agreed by the Board under the provisions of section 161, 152, 196, 197, 203 and other applicable provisions, if any, of the Companies Act, 2013 ("the Act") read with Schedule V thereof and the Rules made thereunder and Regulation 17(1C) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") subject to allotment of Director Identification Number (DIN) and the approval of the members of the company.

However, due to ongoing technical issues in the Ministry of Corporate Affairs (MCA) portal, the Director Identification Number (DIN) for Mr. Akshat Seth was pending for approval as on February 1, 2023. In the absence of the DIN, Mr. Akshat Seth assumed office as the CEO and a Key Managerial Personnel (KMP) of the company with effect from February 1, 2023 and the same was noted by the Board vide its Circular Resolution dated February 1, 2023. Subsequently, Mr. Akshat Seths DIN application was approved by MCA vide its order ref. no. AA1241271 dated February 11, 2023 accordingly his appointment as an Additional Director and the Managing Director of the company was effective February 11, 2023 as per the resolution passed by the Board at its meeting held on January 19, 2023 read with Circular Resolution dated February 1, 2023. The Board took note of the same vide its Circular Resolution dated February 15, 2023.

Further, Mr. Akshat Seths appointment as Director, MD & CEO (KMP) was also approved by the shareholders of the company by passing resolutions under section 152, 196, 197 and other applicable provisions, if any, of the Act read with Schedule V thereof and the Rules made thereunder and Regulation 17(1C) of the Listing Regulations on April 4, 2023 vide Postal ballot Notice dated March 3, 2023.

In accordance with provisions of Section 152 of the Act and pursuant to Articles of Association of the company, Mr. Desh Deepak Khetrapal (DIN: 02362633) Director of the company, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The brief details required to be disclosed in accordance with Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, Companies Act, 2013 and Secretarial Standards is included in the notice of the ensuing Annual General Meeting forming part of this Annual Report.

During the year under review, the Non-Executive Directors (NEDs) of the company had no pecuniary relationship or transactions with the company, other than sitting fees and commission, as applicable, received by them.

In terms of Section 149 of the Act, Mr. V V Ranganathan (DIN: 00060917), Ms. Gauri Rasgotra (DIN: 06862334) and Dr. Arvind Sahay (DIN: 03218334) are Independent Directors of the company. In terms of Regulation 25(8) of the SEBI Listing Regulations, they have confirmed that they are not aware of any circumstances or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties. Based upon declarations received from Independent Directors, the Board of Directors has confirmed that they meet the criteria of independence as mentioned under section 149(6) of the Act and Regulation 16(1)(b) of SEBI Listing Regulations and that they are independent of the management.

InopinionoftheBoard,therehasbeennochangeincircumstances which may affect their status as Independent Directors of the company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the company have included their names in data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs, MCA. Independent Directors are not subject to retire by rotation. Independent Directors have also confirmed that they have complied with the companys Code of Conduct for Board members & Senior Management and Codes under SEBI (Prohibition of Insider Trading) Regulations, 2015.

During the year under review, Mr. KR Veerappan, Chief Financial Officer (CFO) and Key Managerial Personnel (KMP) and Mr. Mahesh Thakar, Company Secretary & Head Legal and KMP of the company tendered their resignations w.e.f. close of business hours on May 10, 2022 and January 27, 2023 respectively. The Board places on record its appreciation for the valuable contribution and guidance of Mr. KR Veerappan &

Mr. Mahesh Thakar during their respective tenures. Mr. Saikat Mukhopadhyay, who joined as Head, Finance & Accounts on June 1, 2022, was appointed as Chief Financial Officer (CFO)

& Key Managerial Personnel (KMP) of the company effective from July 29, 2022 under the provisions of section 203 and other applicable provisions if any of the Act and rules made thereunder.

In terms of provisions of section 203 of the Act, the following are the KMPs of the company as on March 31, 2023:

a. Mr. Akshat Seth, CEO & KMP (effective February 1, 2023) and Director & Managing Director (effective February 11, 2023) b. Mr. Saikat Mukhopadhyay, Chief Financial Officer (effective July 29, 2022)

There were no other changes in composition of Board and Key Managerial Personnel of the company apart from the changes mentioned above. Further, the company is in process of identifying a suitable candidate and fill the vacancy caused to the position of Company Secretary within the prescribed timelines under the applicable provisions of the Act.

BOARD & COMMITTEES OF BOARD

The company has a professional Board with an optimum combination of executive, non-executive and independent directors including one woman director who bring to the table the right mix of knowledge, skill and expertise. The Board provides strategic guidance and direction to the company in achieving its business objectives and protecting the interest of the stakeholders.

As per the declarations received by the company none of the Directors are disqualified under Section 164 of the Act. Certificate on non-disqualification as required under Regulation 34 of SEBI Listing Regulations, is forming part of the Corporate Governance Report annexed to this report.

BOARD MEETINGS

During the year, Six (6) meetings of the Board of Directors of the company were convened and held in accordance with the provisions of the Act and secretarial standards issued by the Institute of Company Secretaries of India. The date(s) of the Board Meeting and attendance by the Directors are given in the Corporate Governance Report forming part of this annual report. The maximum time-gap between any two consecutive meetings was within the period prescribed under the Act and SEBI Listing Regulations.

COMMITTEES OF THE BOARD

The Board of Directors has the following Committees:

1. Audit Committee

2. Nomination and Remuneration cum Compensation Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

The details of all the above Committees along with their composition, number of meetings held and attendance at the meetings are provided in detail in the Corporate Governance Report annexed to this Boards Report.

All recommendations of the Audit Committee were accepted by the Board during the FY 2022-23.

BOARD EVALUATION

Pursuant to provisions of the Act and SEBI Listing Regulations, a formal evaluation of the performance of the Board, its Committees, the Chairman and the individual directors is conducted. Structured forms covering evaluation of Board, Committees of the Board, Chairperson, Independent Directors and non-independent directors are devised for evaluation by all the Directors. Each Director rate against various criteria such as composition of Board, receipt of regular inputs and information, functioning, performance and structure of Board Committees, skill set, knowledge and expertise of directors, preparation and contribution at Board meetings, leadership etc.

Based on the recommendations of the Nomination and Remuneration Committee, the Board reviews the key skills/ expertise/competence of the Board of Directors, so that the Board of Directors comprises of a diverse and multidisciplinary group of professionals with requisite skills/expertise/ competence who can contribute towards providing strategic direction to the companys management upholding the highest standards of Corporate Governance.

Further, as per SEBI Listing Regulations 2015, the following is the matrix of skills and competencies on which all Directors are evaluated: Governance and Board service Business Understanding Risk/Legal/Regulatory Compliance Information Technology/ Accounting/Financial Experience Industry/Sector Knowledge Strategy development and implementation

In a separate meeting of Independent Directors held on March 28, 2023, performance of Non-Independent Directors (NIDs), the Board as a whole and the Chairman of the company were evaluated, taking into account the views of the Executive Director and NEDs.

The NRC reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

The above criteria are broadly based on the guidance note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017. In a subsequent Board meeting, the performance of the Board, its Committees and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

FAMILIARISATION PROGRAM FOR DIRECTORS

In addition to giving a formal appointment letter to newly appointed Director on the Board, a detailed induction plan covering the role, function, duties, responsibilities and the details of compliance requirements expected from the director under the Act and relevant Regulations of SEBI Listing Regulations, 2015 are given and explained to a new Director.

Pursuant to Regulation 25(7) of SEBI Listing Regulations, conducting familiarization programmes for the Directors in the company is a continuous process, whereby Directors are informed, either through presentations at the Board or Committee meetings, board notes, interactions or otherwise about industry outlook, business operations, future strategies, business plans, competitors, market positions, products & new launches, internal and operational controls over financial reporting, budgets, analysis on the operations of the company etc.

Pursuant to Regulation 46 of SEBI Listing Regulations, the details required are available on the companys website https:// hil.in/investor-relations/familiarization-program/

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The company endeavours to have an appropriate mix of executive, non-executive and independent directors to maintain independence from management and who continuously provide appropriate governance. The selection and appointment of Board members are done on the recommendation of the Nomination & Remuneration cum Compensation Committee. The appointments are based on meritocracy and having due regard for diversity. While evaluating the candidature of an independent director, the Committee abides by the criteria for determining independence as stipulated under the Act and SEBI Listing Regulations. In case of re-appointment of directors, the Board takes into consideration the results of the performance evaluation of the directors.

The Nomination & Remuneration Policy for Directors, Key Managerial Personnel and Senior Management is placed on the website of the company and can be accessed through the web link https://hil.in/wp-content/uploads/2019/05/Nomination-Remuneration-Evaluation-Policy.pdf

The objective of the companys remuneration policy is to attract, motivate and reta in qualified and expert individuals that the company needs in order to achieve its strategic and operational objectives, whilst acknowledging the societal context around remuneration and recognizing the interests of Companys stakeholders.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR)

The brief outline of the Corporate Social Responsibility (CSR) policy of the company, details regarding CSR Committee and the initiatives undertaken by the company on CSR activities during the year are set out in ‘Annexure II of this report in the format prescribed in Companies (Corporate Social Responsibility Policy) Rules, 2014. CSR Policy is available on the companys website on https://hil.in/wp-content/uploads/2023/05/HIL-CSR-Policy-dt-09052023-FinalRsApproved-on-15052023.pdf

ANNUAL RETURN

Pursuant to section 134(3)(a) and section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the annual return of the company for the financial year 2022-23 can be accessed through the web link on the companys website https://hil.in/investor-relations/2023-annual-report/

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(3)(c) and 134(5) of the Act and on the basis of compliance certificate received from the executives of the company and subject to disclosures in financial statements, as also on the basis of the discussion with the Statutory Auditors of the company from time to time and to the best of their knowledge and information furnished, the Board of Directors state that:

i. In preparation of the Annual Accounts for the financial year ended March 31, 2023, all the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India and Companies Act, 2013 have been followed and there were no material departures.

ii. We have adopted 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 of the company for the financial year ended March 31, 2023.

iii. We 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.

iv. The Annual Accounts for the year ended March 31, 2023 has been prepared on a going concern basis.

v. Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

vi. The systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

RISK MANAGEMENT

The company has constituted a Risk Management Committee of the Board to review the risk management plan / process of the company. The Risk Management Committee identifies potential risks, assesses their potential impact and takes timely action to mitigate the same.

The company has a Risk Management Policy which has been approved by the Board. The Risk Management Policy acts as an overarching statement of intent and establishes the guiding principles by which key risks are managed across the organization. The Board monitors and reviews periodically the implementation of various aspects of the Risk Management Policy through a duly constituted Risk Management Committee (RMC). The RMC assists Audit Committee/ the Board in its oversight of the companys management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall Business Risk Management Framework.

There are no risks identified by the Board which may threaten the existence of the company. Please refer detailed section on risk management covered in the Management Discussion and Analysis Report which is an integral part of this report.

The details about composition of Risk Management Committee and its meetings are provided in Corporate Governance Report which forms part of this Report.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 of SEBI Listing Regulations, Corporate Governance Report for the financial year ended March 31, 2023, with a detailed compliance report thereon forms an integral part of this Report and is annexed herewith as ‘Annexure III. It also includes a certificate from the Statutory Auditors in respect of compliance with the provisions of SEBI Listing Regulations related to Corporate Governance.

VIGIL MECHANISM

The company has in place a robust vigil mechanism through a Whistle Blower Policy to deal with instances of illegal practices, unethical behaviour, actual or suspected fraud or violation of the companys Code of Conduct and Ethics Policy.

Adequate safeguards are provided against victimization to those who take recourse to the mechanism. The details of the Whistle Blower Policy are explained in Corporate Governance Report. The Whistle Blower Policy is available on Companys website and can be accessed through the web link https://hil.in/investor-relations/policies/

The complaints received under Whistle Blower Policy will be investigated thoroughly and detailed update including action taken, if any, on the same are presented to the Audit Committee and Statutory Auditors of the company. There were six complaints received during the year out of which five complaints have been resolved with appropriate action and one complaint is being investigated by the internal audit team.

PREVENTION OF SEXUAL HARASSMENT POLICY

The company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Prevention of Sexual Harassment at Workplace Act, 2013 and the Rules thereunder. The company has constituted Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment.

The details of the number of cases filed under sexual harassment and their disposal, during the financial year 2022-23 is as under:

Number of cases pending as on the beginning of the financial year	Nil
Number of complaints filed during the financial year	Nil
Number of cases pending as on the end of the financial year	Nil
Number of workshops or awareness programs against sexual harassment carried out	The company regularly conducts necessary awareness programs for its employees and all employees are provided detailed education during the induction.
Nature of action taken by the employer or district officer	Not Applicable

RELATED PARTY TRANSACTIONS

In line with the requirements of the Companies Act, 2013 (‘the Act) and SEBI Listing Regulations, as amended from time to time, the Company has formulated a Policy on Related Party Transactions (‘RPT Policy) for identifying, reviewing, approving and monitoring of Related Party Transactions and the same is available on the Companys website at https://hil.in/wpcontent/ uploads/2023/02/Policy-on-Related-Party-Transactions-2022-for-website-1.pdf

All related party transactions entered into during FY 2022-23 were on arms length basis and in the ordinary course of business and were reviewed and approved by the Audit Committee/ Board, as may be applicable. With a view to ensure continuity of day-to-day operations, an omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and on an arms length basis. A statement giving details of all related party transactions entered pursuant to the omnibus approval so granted is placed before the Audit Committee on a quarterly basis for its review.

During the year under review, the Company entered into one material related party transaction in terms of Section 188(1) of the Act read with the relevant rule. Accordingly, the disclosure of related party transactions as required under Section 134(3) (h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is made in Form AOC-2 annexed to Boards Report as an ‘Annexure IV.

In terms of Regulation 23 of SEBI Listing Regulations, the Company submits details of related party transactions as per the specified format to the stock exchanges on a half-yearly basis.

The details of the transactions with related parties are provided in the accompanying Financial Statements.

INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY

The company has put in place adequate internal financial control procedures commensurate with its size, complexity and nature of business. The company has identified and documented all key financials controls, which impact the financial statements as part of its Standard Operating Procedures. The financial controls are tested for operating effectiveness through ongoing monitoring and review process by the management and also independently by the Internal Auditor. Where weaknesses are identified as a result of the reviews, new procedures are put in place to strengthen controls and these are in turn reviewed at regular intervals.

Based on the review, nothing has come to the attention of Directors to indicate that any material breakdown in the function of these controls, procedures or systems occurred during the year.

AUDITORS

STATUTORY AUDITORS

M/s. B S R and Co., Chartered Accountants (FRN - 128510W) have been appointed as Statutory Auditors of the company for a period of five years i.e. from conclusion of 75th Annual General Meeting (AGM) (held on July 29, 2022) till the conclusion of 80th Annual General Meeting of the company to be held in year 2027 under the provisions of section 139 and 142 of the Companies Act, 2013 read with Rules made thereunder.

The Auditors Report for the financial year 2022-23 does not contain any reservation, qualification or adverse remark, on the financial statements of the company. Auditors Report is self-explanatory and therefore, does not require further comments and explanation.

Further, in terms of section 143 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, as amended, notifications / circulars issued by the Ministry of Corporate Affairs from time to time, no fraud has been reported by the Auditors of the company where they have reason to believe that an offence involving fraud is being or has been committed against the company by officers or employees of the company.

INTERNAL AUDITORS

The company has an effective fulltime in-house and professionally competent internal audit team, which regularly monitors the effectiveness of the internal control systems. This function reports to the Audit Committee and the Managing Director about the adequacy and effectiveness of the internal control systems of the company as well as the periodical results of its review of the companys operations as per an approved internal audit plan duly approved by the Audit Committee. The in-house internal audit team works in tandem with M/s. Ernst and Young, LLP, whose professional services have been availed by the company to audit specific locations and processes as per the Internal Audit plan approved by the Audit Committee. Together they provide a robust framework.

The recommendations of the internal audit teams on improvements in the operating procedures and control systems for strengthening the operating procedures are presented periodically to the Audit Committee.

During the year under review, Internal Auditors have not reported any matter under Section 143(12) of the Act and therefore no details are required to be disclosed under Section 134 (3) (ca) of the Act.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with the rules framed thereunder, the cost audit records maintained by the company in respect of its specified products are required to be audited by a Cost Auditor. The Board of Directors, on recommendation of the Audit Committee, re-appointed M/s. S.S. Zanwar & Associates, as Cost Auditors of the company, to conduct the audit of the cost records of the company for the financial year ending March 31, 2024 at a remuneration of H8.00 Lakhs (Rupees Eight lakhs only) plus out of pocket expenses. The requisite resolution for ratification of remuneration of Cost Auditor by the shareholders of the company has been set out in the Notice of ensuing AGM. The Cost Auditor has certified that their appointment is within the limits as prescribed under Section 141(3)(g) of the Act and that they are not disqualified from such appointment within the meaning of the said Act.

During the year under review, Cost Auditors have not reported any matter under secton 143(12) of the Act, aand therefore no details are required to be disclosed under section 134(3) (ca) of the Act.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the 2013 and rules framed thereunder, Regulation 24A of the SEBI (Listing

Obligations and Disclosure Requirements) Regulations, 2015 and rules framed thereunder, the Board of Directors, on recommendation of the Audit Committee, appointed M/s. Ranjeet Pandey & Associates, Practising Company Secretaries, New Delhi, to undertake the secretarial audit of the company for the financial year ending March 31, 2024. Pursuant to Section 139 and 141 of the Act and relevant Rules prescribed thereunder, the company has received a certificate from the Secretarial Auditor, inter alia, confirming that their appointment is within the limits laid down by the Act and rules made thereunder. Further, as per their declaration, they are not disqualified for being appointed as Secretarial Auditor under the provisions of applicable laws and also that there are no pending proceedings against them involving matters of professional misconduct.

The Secretarial Audit Report issued by M/s. P.S. Rao & Associates, Company Secretaries for the financial year ended March 31, 2023 is given in ‘Annexure V attached hereto and forms part of this report. The report does not contain any qualifications, reservations or adverse remarks.

The company has undertaken the audit for the financial year 2022-23 for all applicable Securities and Exchange Board of India ("SEBI") compliances as per circular dated February 8, 2019 issued by the SEBI. The Annual Secretarial Compliance Report issued by M/s. P.S. Rao & Associates, Company Secretaries has been submitted to the Stock Exchanges within the prescribed time limit.

During the year under review, the Secretarial Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134(3)(ca) of the Act.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of loans, guarantees /security provided and investments made during the Financial Year ended March 31, 2023 is given in compliance with the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 and the details of the same forms part of notes to the financial statements.

DEPOSITS

The company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 and as such, no amount of principal or interest was outstanding as on March 31, 2023.

SUBSIDIARIES AND JOINT VENTURES

The following is the group structure of the company:

S. No.	Legal name of the entity	Relationship	Country of incorporation and Date	Full address
1	HIL Limited	Holding Company	India, 23.06.1955	Office No 1 & 2, Level 7, SLN Terminus, Gachibowli, Hyderabad, Telangana - 500032
2	HIL International GmbH	Subsidiary (Wholly Owned Subsidiary)	Germany, 03.07.2018	Millenkamp 7-8, 48653 Coesfeld, Germany
3	Parador Holding GmbH	Step Down Subsidiary (WOS to HIL International GmbH)	Germany, 20.06.2016	Millenkamp 7-8, 48653 Coesfeld, Germany
4	Parador GmbH	Step Down Subsidiary (WOS to Parador Holding GmbH)	Germany, 21.09.2015	Millenkamp 7-8, 48653 Coesfeld, Germany
5	Parador Parkettwerke GmbH	Step Down Subsidiary (WOS to Parador GmbH)	Austria, 10.04.1998	Wiener Strasse 66, 7540 G?ssing, Austria
6	Parador (Shanghai) Trading Co., Ltd.	Equity Joint venture (50%) of Parador GmbH and (50%) Horgus Oriental Glamour Co., Ltd	Republic of China, 08.08.2018	Room 1006, Floor 10, No, 233 Taicang Road, Huangpu District, Shanghai Municipality, the Peoples Republic of China
7	Parador UK Limited	Step Down Subsidiary (WOS to Parador GmbH)	England and Wales, 13.07.2022	C/o Rodl & Partner Legal Ltd 170 Edmund StreetGround Floor, Birmingham, United Kingdom B3 2HB

In compliance with the requirements of Regulation 24 of SEBI Listing Regulations, the company has appointed Dr. Arvind Sahay, Independent Director as a Director on the Board of HIL International GmbH, Germany (wholly owned subsidiary).

Supercor Industries Ltd

The company holds 33% of the share capital in Supercor Industries Limited ("Supercor"), a Company incorporated under the laws of Nigeria. The State Government of Bauchi, Nigeria and other shareholders hold the remaining 67% of the share capital in Supercor.

During the year there is no significant development at Supercor Industries Limited. Company has already suspended its operations since the year 2016 due to cash flow crisis. The company has already informed the Board of Supercor Industries Limited about its intention to sell its stake and has not been participating in any of the discussions of the Board / Management for last five years. The Interim Board set up by the Nigerian Government is not responsive and the company is waiting to hear from the Board of Supercor Industries Limited for deciding further course of action. Accordingly, the company has submitted an application to Reserve Bank of India (RBI) for suspension of UAN allotted towards the above said investment in Supercor and the same has been approved.

In view of the above, the company is not in a position to obtain any information/financials from the Joint Venture entity and hence the consolidated financial statements does not include the financial performance of Supercor Industries Ltd.

As per the provisions of Section 129 of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the Financial Statements of the Subsidiary Companies/ Associate Companies/Joint Ventures in Form AOC-1 is attached as Annexure VI ‘ to this report.

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013. As per the provisions of Section 136 of the Companies Act, 2013, the company has also placed Audited accounts of its Subsidiaries on its website https://hil.in/investor-relations/fy-2022-23/.

PARTICULARS OF EMPLOYEES

The disclosures relating to remuneration and other details as required in terms of the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in ‘Annexure VII, which forms an integral part of this Report. Further, in terms of the first proviso to Section 136 of the Act, the Reports and Accounts are being sent to the shareholders excluding the information required under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said information will be made available for inspection through electronic mode by writing to the company at cs@hil.in from the date of circulation of the AGM Notice till the date of the AGM.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are given in the ‘Annexure VIII attached hereto and forms part of this report.

BUSINESSRESPONSIBILITYANDSUSTAINABILITY REPORT

HIL strongly believes that sustainable and inclusive growth is possible by using the levers of environmental and social responsibility while setting aspirational targets and improving economic performance to ensure business continuity and sustainable growth.

In terms of amendment to Regulation 34(2)(f) of the SEBI Listing Regulations, "Business Responsibility and Sustainability Report (BRSR)" of the company for the financial year ended March 31, 2023 forms part of this Annual Report and annexed as ‘Annexure IX.

EMPLOYEE STOCK OPTIONS

The details of Employee Stock Options pursuant to Section 62 of the Act read with Rules made thereunder and Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 SEBI (SBEB & SE) Regulations, 2021 are made available on the website of the company at https://hil.in/investor-relations/

Further, during the year under review, in continuation of earlier "HIL Limited Long-Term Incentive Plan and HIL Limited Employee Stock Option SchemeRs2015 & 2019" the company has adopted a comprehensiveRs"HIL Limited Long-TermRsIncentive Plan 2023" (or LTIP 2023)Rs in the best interest of the employees focusing on talentRs retention and long term growth of the company. As part of the said plan and as per the recommendations of the Nomination and Remuneration cum Compensation Committee, "HIL Limited Employee Stock Option Scheme 2023" (or Scheme) was formulated in accordance with SEBI (SBEB & SE) Regulations, 2021 and approved by the Board at its meeting held on January 27, 2023. Subsequently, the said scheme was also approved by the Shareholders of the company on April 4, 2023 through passing a resolution by Postal Ballot.

Nomination & Remuneration Committee of the Board of Directors, inter alia, administers and monitors the Employees Stock Option Scheme(s) of the company in accordance with SEBI (SBEB & SE) Regulations, 2021, as amended from time to time. During the year there were no new options granted to the employees of the company under any of the Scheme(s).

Certificate from M/s. P.S. Rao & Associates, Company Secretaries, Secretarial Auditors of the company, confirming that the schemes have been implemented in accordance with the said SEBI Regulations, would be placed at the ensuing AGM of the company for inspection by the members.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

As per section 124 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and subsequent amendments thereto ("the Rules"), all shares in respect of which dividends have not been paid or claimed for seven consecutive years or more shall be transferred to Investor Education and Protection Fund (IEPF).

In line with the aforesaid provisions, during the year, unclaimed interim dividend declared for the FY 2015-16 & unclaimed final dividend declared for the FY 2014-15 along with the underlying shares on which dividend has not been claimed for seven years have been transferred to IEPF.

The List of shareholders whose dividends/ shares have been transferred to IEPF is available on the website of the company https://hil.in/investor-relations/unclaimed-divided-shares-due-totransfer-to-iepf/ and also the procedure for claiming such unclaimed dividends/ shares from IEPF has been made available on website of the company https://hil.in/investor-relations/ procedure-for-claimingshares-transferred-to-iepf/

OTHER DISCLOSURES a. D uring the year, on July 29, 2022, the Board of Directors of the Company have approved the acquisition of AAC blocks business of Fastbuild Blocks Private Limited at a purchase consideration of Rs. 3702.61 Lakhs, through as lump sale on a going concern basis. The acquisition was completed on August 17, 2022 with compliance to the conditions specified in the agreement by the respective parties. The fair value of assets and liabilities acquired have been determined in accordance with lnd AS 103 "Business Combinations". Consequent to the acquisition, the said business has been reported under the Building Solutions segment of the Company.

b. The Board has devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) and that such systems were adequate and operating effectively.

c. During the year under review, no significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the company.

d. There are no material changes and commitments, affecting the financial position of the company which occurred between the end of the financial year March 31, 2023 to which the financial statements relate and the date of signing of this report.

e. During the year, there is no application made or any proceeding pending on the company, under the Insolvency and Bankruptcy Code, 2016.

f. There has been no change in the nature of business of the company.

g. Pursuant to SEBI (Prohibition of Insider Trading) Regulations,

2015 as amended, the company has adopted the Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Designated Persons and their Immediate Relatives along with Code of Fair Disclosures. A copy of the same are available on companys website https://hil.in/investor-relations/policies/ h. O ther Policies

The company has also adopted the following policies, as required by the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same are available on the website of the company https://hil.in/investorrelations/policies/

Dissemination of material events policy

Documents preservation policy Material subsidiary policy

ACKNOWLEDGEMENTS

The Board of Directors take this opportunity to thank all the stakeholders of the company for their continued support and express their sense of gratitude to the customers, vendors, banks, financial institutions, channel partners, business associates, Central and State Governments for their co-operation and look forward to their continued support in future. The Directors wish to place on record their sincere appreciation for the contribution made by the employees at all levels and applaud them for their superior levels of competence, dedication and commitment towards the company.

	On behalf of the Board of Directors
	HIL Limited
	Sd/-
	CK Birla
Place: New Delhi	Chairman
Date: May 15, 2023	DIN No. 00118473