happiest minds Directors report

Dear Members,

Your Directors take pleasure in presenting the Twelfth Annual Report covering the highlights ofthe finances, business, and operations of your Company. Also included herein are the Audited Financial Statements of the Company (standalone and consolidated) prepared in compliance with Ind AS accounting standards, for the financial year ended March 31,2023.

Highlights of Financial Performance

(Amount in Rs lakhs)

Description	Standalone	Consolidated
	March 31,2023	March 31, 2022	March 31,2023	March 31,2022
Revenue from Operations	1,33,255	1,03,354	1,42,929	1,09,365
Other Income	2,234	3,771	2,1 11	3,710
Total Income	1,35,489	1,07,125	1,45,040	1,13,075
Employee benefits expense	78,690	61,210	80,681	62,000
Depreciation and amortization	2,996	2,423	4,191	3,288
Finance cost	2,150	830	2,186	995
Other expenses	22,485	17,577	26,362	21,598
Total expenses	1,06,321	82,040	1,13,420	87,881
Profit / (Loss) before Exceptional Items and Tax	29,168	25,085	31,620	25,194
Exceptional (Income) / Expense	-	-	(634)	(609)
Profit / (Loss) before Tax	29,168	25,085	30,986	24,585
Tax expense	7,530	6,437	7,887	6,465
Profit / (Loss) after Tax	21,638	18,648	23,099	18,120
Earnings per share (Basic)	15.11	13.21	16.13	12.84
Earnings per share (Diluted)	15.00	12.91	16.01	12.55
Attributable to:
Shareholders ofthe company	21,638	18,648	23,099	18,120
Opening balance of retained earnings	22,388	10,637	21,773	10,550
Dividend on equity shares	(5,715)	(6,830)	(5,715)	(6,830)
Other Comprehensive income recognised directly in retained earnings	(94)	(73)	(116)	(73)
Transferred from share option outstanding reserve for options forfeited	23	6	23	6
Closing balance of retained earnings	38,240	22,388	39,064	21,773

Note: Previous year?s figures have been regrouped/reclassified wherever necessary to correspond with the current year?s classification/disclosure.

A detailed analysis ofthe financials and business performance ofthe Company during the year under review is detailed below.

Management Discussion and Analysis

Management Discussion and Analysis as required under Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is provided separately in the Annual Report.

Dividend & Transfer to Reserves

Your Company?s policy on Dividend Distribution is available at https://www.happiestminds.com/investors/policy-documents/.

In accordance with the said policy, your Directors declared an interim dividend ofRs 21- per equity share in the Board meeting held on October 20, 2022, and are pleased to recommend a final dividend ofRs 3.40 /- per equity share for the financial year ended March 31,2023, i.e., the total dividend for the current financial year under review being Rs 5.40/- per equity share (previous financial year - Rs 3.75/- per equity share). If the above recommendation is accepted by the Members of the Company at the ensuing Annual General Meeting, the total outflow on this account will be Rs 7930.63 lakhs.

Your Directors do not propose to transfer any amounts to the general reserves of the Company, instead have recommended to retain the entire profits for the financial year ended March 31,2023, in the profit and loss account.

Your Company did not have any amounts due or outstanding as of the Balance Sheet date to be credited to the Investor Education and Protection Fund.

Mergers & Acquisitions

Your Company has an active investment committee represented by two executive members of the Board who continuously evaluate M&A opportunities that can complement or augment capabilities in strategic focus areas, and help the Company increase its geographic outreach in the chosen markets. Emphasis is given to capabilities that can help the Company further its digital vision for its customers. Your company evaluates each acquisition candidate and ranks it on various parameters such as people/culture fitment, technology and industry focus, partnerships/alliances, geographical strength, offshore presence, and consulting capabilities.

During the year under review, your Company acquired Sri Mookambika Infosolutions Private Limited (SMI), a Madurai headquartered, profitable, IT services company through a combination of upfront and deferred equity consideration totaling Rs 11,132 lakhs. With 400+ offshore-based employees, SMI has an annual run rate in revenues of circa US$ 9 Million. SMI provides product engineering services to its US customers around Enterprise Applications & Integrations, Digital Data Platform Services (Analytics, Data Strategy, AI/ML, User Experience), Mobility Services and DevSecOps. Certified as a CMMI Level 3 and ISO 9001:2015 company, SMI delivers its engagements through agile delivery leveraging mature and industry-standard software engineering and development practices. SMI has over the years built deep domain expertise around the healthcare vertical.

The acquisition of SMI was effective from January 01,2023, and has strengthened your Company?s offerings and leadership in the healthcare vertical with delivery capabilities in tier-2 locations like Madurai and Coimbatore.

Subsidiary Company

As of March 31, 2023, your Company had two wholly-owned subsidiary companies viz., Happiest Minds Inc., USA (formerly PGS Inc.) and Sri Mookambika Infosolutions Private Limited., Madurai, India. The statement under Section 129(3) of the Companies Act, 2013 in respect of the subsidiaries in Form AOC-1 is attached as Annexure I. The Consolidated Accounts of your Company duly audited by the Statutory Auditors are presented as part of this Report.

The financial statements together with related information and other reports of the subsidiaries are available on the website at https://www.happiestminds.com/investors/.

Your Company?s policy on material subsidiary is also available on the website at https://www.happiestminds.com/investors/ policy-documents/.

Recognitions

We are happy to inform that your Company and its Executives have received the following recognitions during the year:

• Recognition in Zinnov Zones Intelligent Automation Services H1 2023

• Winner of ISG Digital Case Study Awards 2022

• Winner ofthe ICAI Award for Excellence in Financial Reporting 2021-22

• MD & CFO, Mr. Venkatraman Narayanan, recognized as a ‘Leading CFO ofthe Year? at the Cll CFO Excellence Awards 2022

• Top 50 India?s Best Workplaces for Building a Culture of Innovation 2023

• Top 10 India?s Best Workplaces in Health & Wellness 2022

• Priya Kanduri is honored with Women In Tech Leadership Awards 2023? by AIM

• Priya Kanduri for being honored as "Women in Work Achiever ofthe Year" 2023 by FKCCI

• Recognition as ‘Major Contender? in Everest MDR Services PEAK Matrix Assessment

• Recognized in Zinnov Zones as a Leader in Enterprise Software, Leader in Software Platform Engineering, Leader among SMSPs for ER&D Services, and Leader among SMSPs in Data & Al Engineering

• India?s Top 25 Best Workplaces in IT & IT-BPM 2022

• Winner of the CULT.fit "India?s Fittest Disruptors 2022" Award

• GOLD for 2022 Integrated Annual Report from the League of American Communication Professionals (LACP)

• Won Multiple Awards at ICSI 2022

> Best Governed Company in Listed Segment: Medium Category at the 2022 National Awards for Excellence in Corporate Governance

> CS Praveen Kumar Darshankar presented the ‘Governance Professional of the Year?

> Ashok Soota conferred ‘ICSI Lifetime Achievement Award for Excellence in Corporate Governance?

• Priya Kanduri honored with "Outstanding Leadership Award" at Internet 2.0 Conference, Dubai

• Sushilkumar Nahar recognized as a "Game Changer" at the CIO100 Awards 2022

• Recognition as ‘Major Contender? in Everest Industry 4.0 PEAK Matrix? 2022

• Recognition as ‘Aspirant? in Everest?s IT Security Services PEAK Matrix? 2022 -North America

• Winner of Golden Peacock Corporate Governance Award 2022

• Recognized among Top 50 India?s Best Workplaces for Women 2022

• Recognized among the Best Workplaces in Asia 2022

• Received Select Tier Partner Status with Snowflake

• Positioned as an ‘Innovator? in NelsonHall?s Digital Banking Services NEAT Report

• Recognized as ‘Major Contender? in Everest?s Digital Product Engineering PEAK Matrix

• Ranked #29 in India?s Best Companies To Work For 2022

• Al/Analytics CoE winner at the ET DataCon Awards 2022

• Ashok Soota is conferred with the prestigious Cll Guality Ratna Award 2021

• Finalist for the 2022 Microsoft Power Automate Partner of the Year Award

• Priya Kanduri wins the ‘Women in AF award at Trescon World Al show, Dubai

Share Capital and Debentures

During the year under review, your Company did not issue any shares. The paid-up equity share capital as on March 31,2023, was Rs 293,727,1 12/- consisting of 146,863,556 equity shares ofRs 2/- each.

Your Company has issued 4,500 rated, listed, negotiable, unsecured, redeemable non-convertible debentures of the nominal value ofRs 1,00,000/- each and are listed on the Bombay Stock Exchange (BSE).

Your Company has not issued shares with differential voting rights and sweat equity shares during the year under review.

Directors and Key Managerial Personnel

As on March 31,2023, the Board of Directors of your Company comprised of six Directors, viz., three Executive Directors and three Independent Directors including two women Directors. As per the Articles of Association of the Company, one third of the Directors (other than Independent Directors) are liable to retire by rotation at the Annual General Meeting ("AGM") of the Company, every year. Mr. Joseph Anantharaju (DIN 08859640) retires by rotation at the ensuing 12th AGM and being eligible, offers himself for re-appointment.

Mr. Ashok Soota (having DIN 00145962-Executive Chairman), Mr. Venkatraman Narayanan (having DIN 01856347-Managing Director & CFO) and Mr. Joseph Anantharaju (having DIN 08859640- Executive Vice Chairman) are Executive Directors on the Board.

Ms. Anita Ramachandran (DIN 00118188), Mr. Rajendra Kumar Srivastava (DIN 07500741) and Ms. Shuba Rao Mayya (DIN No. 08193276) are the Independent Directors on the Board with Mr Rajendra Kumar Srivastava being designated as the "Lead Independent Director". Pursuant to the provisions of Section 149 of the Companies Act, 2013 the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 along with the Rules framed thereunder and Regulation 16(1 )(b) of the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company. In the opinion of the Board, the Independent Directors possess the requisite integrity, experience, expertise, and proficiency required under all applicable laws and the policies of the Company.

Policy on Nomination and Remuneration of Directors

This policy on the nomination and remuneration of Directors, Key Managerial Personnel and Senior Management Personnel have been formulated by the Nomination and Remuneration Committee and approved by the Board of Directors of the Company. The policy is guided by the principles and objectives as enumerated under the provisions of the Companies Act, 2013 and the Listing Regulations, to ensure reasonableness and sufficiency of remuneration to attract, retain and motivate competent resources, a clear relationship of remuneration to performance and a balance between rewarding short and long-term performance of the Company. A copy of the policy is uploaded on the Company?s website at https://www.happiestminds.com/investors/policy-documents/.

We confirm that the remuneration paid to Directors, Key Managerial Personnel and Senior Management Personnel is in accordance with the said policy of the Company. The statement of Disclosure of Remuneration under Section 197 of Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached to this report as Annexure II.

None of the Executive Directors of the Company were in receipt of any commission from the Company or any remuneration from the subsidiaries ofthe Company.

Familiarization Program for Independent Directors

The Company has in place a familiarization program for its Independent Directors. The objective ofthe program is to familiarize Independent Directors on our Board with the business ofthe Company, industry in which the Company operates, business model, challenges etc. through various programs which includes interaction with subject matter experts within the Company, meetings with our business leads and functional heads on a regular basis.

The familiarization program and other disclosures as specified under the Listing Regulations is available on the Company?s website at https://www.happiestminds.com/investors/disclosures/HappiestMinds-Details-of-Familiarization-Programme.pdf

Board Evaluation

The Nomination, Remuneration and Governance Committee ofthe Company had reviewed and approved the evaluation criteria for the Board Evaluation. The criteria for the evaluation were broadly based on the SEBI?s Guidance Note on Board Evaluation. The evaluation criteria covered the Board as a whole, the Committees ofthe Board, each individual Director and the Chairman of the Company and were focused on the Board?s composition and accountability, their role in setting strategies, the effectiveness of the Board Committees and the performance of each individual Director and Chairman.

During the year under review, the questionnaire was circulated to all the Board Members ofthe Company in a transparent and confidential manner and based on their responses, a detailed report was presented to the Board on an anonymous basis to give an understanding of its working dynamics, highlight areas of strength/improvement and proposed the suggested action plan to improve the Board?s overall performance and effectiveness.

Some ofthe suggested action plans that are being implemented during FY 2023-24 are as below:

1. To expand the Board/Committees with induction of one Independent Director and one Executive Director.

2. To organize professional development programs for the Directors.

3. To focus more on strategic challenges and opportunities for FY 2023-24.

Committees ofthe Board

The details ofthe powers, functions, composition, and meetings ofthe Committees ofthe Board held during the year are given in the Report on Corporate Governance section forming part ofthe Annual Report.

Board Meetings

The Board of Directors ofthe Company met seven times during the year under review. The details of these Board Meetings are provided in the Corporate Governance section forming part ofthe Annual Report. The necessary quorum was present for all the meetings. The maximum interval between any two meetings did not exceed 120 days.

Corporate Governance

Your Company has taken adequate steps to adhere to all the stipulations laid down in the Listing Regulations. A report on Corporate Governance is disclosed separately in the Annual Report.

A Certificate from M/s. V Sreedharan & Associates, a firm of Company Secretaries in practice, confirming the compliance with the conditions of Corporate Governance as stipulated under the said Regulations is attached as Annexure VII to this Report.

Employees Stock Option Plan (ESOP)

During the year under review, no fresh grants were made under the Happiest Minds Employee Stock Option Scheme 2020, however, your Company facilitated the transfer of 9,04,591 Equity Shares ofRs 21- each by the Happiest Minds Technologies Share Ownership Plans Trust to the employees who exercised their options under the old schemes.

The additional details of stock options are provided under Notes to Financial Statements (Standalone).

Pursuant to the requirements of the SEBI (Share Based Employee Benefits) Regulations, 2014, a certificate has been issued by the Secretarial Auditors of the Company confirming that the Plan has been implemented in accordance with the said Regulations and in accordance with the resolution passed by the Company in the General Meeting.

As required underthe SEBI (Share Based Employee Benefits) Regulations, 2014, the applicable disclosures as on March 31,2023, are uploaded on the website of the Company at https://www.happiestminds.com/investors/disclosures/.

Code for Prevention of Insider Trading

Your Company has adopted a Code of Conduct to regulate, monitor and report trading by designated persons and their immediate relatives as per the requirements under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. This Code of Conduct also includes the code for practices and procedures for fair disclosure of unpublished price sensitive information which has been made available at https://www.happiestminds.com/investors/policy-documents/.

Vigil Mechanism

The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the Listing Regulations is implemented through the Company?s Whistle Blower Policy to enable all its employees, consultants (part-time, full-time and temporary employees) of the Company and its subsidiary companies and its associate companies to report genuine concerns, to provide for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee. Your Directors affirm that no employee/consultant has been denied access to the Audit Committee.

The Whistle Blower Policy is available at https://www.happiestminds.com/investors/policy-documents/.

During the year under review, your Company did not receive any complaints under the said Policy.

Annual Return

Pursuant to Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, copies of the Annual Returns of the Company for previous financial years prepared in accordance with Section 92(1) of the Act have been placed on the website and is available at https://www.happiestminds.com/investors/disclosures/.

Software Technology Park

The entire Indian operations of the Company have been registered under the Software Technology Parks of India (STPI) Scheme.

Deposits

Your Company has not accepted any deposits during the year under review and as such, no amount of principal or interest was outstanding on the date of the Balance Sheet.

Significant & Material Orders passed by the Regulators or Courts or Tribunals

During the year under review, your Directors confirm that there were no significant material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its future operations.

Loans, Guarantees and Investments

Pursuant to Section 186 of the Companies Act, 2013 and Schedule V of the Listing Regulations, disclosure on particulars relating to Loans, Advances, Guarantees, and Investments are provided as part of the financial statements.

Related Party Transactions

The Policy on related party transactions is available at https://www.happiestminds.com/investors/policy-documents/

Particulars of the Contracts or Arrangements with related parties referred to in Section 188(1) in the format specified as Form AOC-2 forms part of this Report as Annexure III. Further details of related party transaction are provided in Notes to Financial Statements (both Standalone and Consolidated).

All the Related Party Transactions entered by your Company with the Related Parties are in the ordinary course of business and are carried out at arm?s length pricing.

Details of the transaction(s) of your Company with the entity(ies) belonging to the promoter/promoter group which hold(s) more than 10% shareholding in the Company as required under para A of Schedule V of the Listing Regulations are provided as part of the financial statements.

Auditors & Auditors? Report

The current Statutory Auditors of the Company are M/s. Deloitte Haskins & Sells (ICAI registration number 008072S) who have been appointed at the 10th AGM of the Company held on July 7, 2021 to hold office for a term of 5 years i.e., till the conclusion of the 15^th AGM.

The Auditors? Report does not contain any qualification, reservation, or adverse remark on the financial statements for the financial year ended March 31,2023. The Notes on financial statements referred to in the Auditors? Report are self-explanatory and do not call for any further comments.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed M/s. V Sreedharan & Associates, a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report issued by them for the financial year ended March 31,2023, is attached as Annexure VIII to this Report. The Secretarial Audit Report does not contain any qualifications, reservations, or adverse remarks.

During the year under review, the Statutory Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its officers or employees, to the Audit Committee under Section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.

Sustainability and Corporate Social Responsibility (CSR)

Company?s Sustainability, Environment, Social and Governance Reporting is provided separately as part of the Annual Report.

The annual report on CSR including a brief outline of the CSR Policy and the activities undertaken during the year under review is enclosed as Annexure IV to this Report. The CSR policy is available at https://www.happiestminds.com/investors/policy-documents/.

Risk Management

Your Company under the supervision of the Executive Board has established a well-defined framework and procedures on organization wide risk and its management. The framework encompasses significant risk in areas of Information security, operations, delivery, and key support functions. Under the framework and procedures, detailed risk management guidelines have been prescribed and implemented covering Risk Identification, Analysis, Response, Tracking, and Management Discussion and Mitigation. Risk registers are maintained by respective functions and project teams. These are centrally reviewed and periodically monitored by compliance and governance teams identified as the owner for the area of risk. The Chief Information Security Officer (CISO), Chief Information Officer (CIO) and Engineering and Business Excellence Team (EBE) work together with the Executive Board in achieving the above.

The Executive Board with the assistance of the CISO, CIO and EBE follows a process covering the steps below in identifying areas of risk in the Company. The process covers:

• Identification of key risk areas

• Assessment of key risks for probability and impact

• Prioritization

• Formulation of response

• Identification of Owners

• Participation by Owners in outlining mitigation plans

• Reporting on adequacy and effectiveness

• Acceptance of residual risk

Your Company while designing its strategy in drawing up of its long-term business plan, it makes provision to accommodate broader/ higher level of risk than it expects/envisages so that Company is prepared to sustain in the eventuality of unforeseen level of risk.

Significant Risks areas which have been Identified and are Constantly Monitored are:

1. Financial Risks:

a. Foreign currency fluctuation

b. Customer credit

c. Profitability and sustenance of the business

d. Availability of credit and liquidity management

2. Business Risks:

a. Concentration of revenues

b. New, emerging disruptive technologies and their impact on business, and delivery

c. Shrinking product development cycles

d. Customers insourcing

3. Operational Risks:

a. Data privacy, social media

b. Talent availability and timely staffing of projects

c. Optimal resource utilization

d. Contractual commitments and project delivery challenges

e. Business continuity

4. Legal and Regulatory:

a. Compliance with local legislation in the geographies we operate in

b. Dynamic and ever-changing immigration and travel laws

5. Projects Delivery related risk

a. Related to change meeting timelines, estimated effort

b. Quality of deliverables

6. Information Security Risks

a. Loss of Happiest Minds? or Customer Intellectual Property (Assets, Code, documents etc.,)

b. Privacy breach, sharing of sensitive data without requisite approvals

c. Phishing, Malware and Ransomware attacks

Oversight of the framework is provided by the Risk Management Committee of the Board of Directors. A Risk Management Policy has also been adopted based on this framework, copy of the policy is available at https://www.happiestminds.com/investors/ policy-documents/.

People Practices.

The People Practice team rose to the challenges of working in a "Phygital" environment last year, promoting a culture of wellbeing, happiness, and innovation. As a result of a flurry of initiatives and high-impact interventions, we have been able to establish a distinct brand positioning. A competition for talent dominated the IT industry in the first half of the year, followed by market consolidation, business realignments, and market corrections. Despite these circumstances, our net adds amounted to 749 members, contributing

to an 18% growth rate both organically and inorganically. We have stayed ahead of the curve through the proper adoption of technology and industry best practices. Additionally, the brand representation, practices, and positioning helped us attract talent. On Glassdoor, our members and alumni rate us highly, with a 4.3 rating, the highest in the industry. FY 2022-23 was largely a virtual operation. However, we have worked hard to create buzz around the return to work in Q3 and Q4.

Reflecting on the past year, it is important to acknowledge the challenges we faced and how we overcame them through our actions and mindfulness. Despite industry uncertainty and the impact of COVID, we have been able to incorporate SMILES values, which has positively impacted our productivity and internal satisfaction. Having prioritized mindfulness and workplace wellbeing has proven to be one of the most valuable lessons.

To create an environment conducive to learning, open communication and a sense of belonging were essential. In addition, to hosting a virtual town hall, leadership connects, benefits communication series, awareness programs, and team building events, the People Practice team held multiple connect & team events. Additionally, Happometer usage also surged, resulting in many connections.

As mental health awareness increased and the pandemic continued, Happiest Minds proactively continued its commitment to employee wellness. Our existing programs continued to support Happiest Minds and their families, including tele-doctor consultations, Mithra counselling support, leave donation programs, ergonomics consultations, financial wellness, webinars on mental, emotional, and physical well-being, and the Compassionate & Caring Contribution Scheme. As part of our commitment to inclusive policy making, we have defined several policies based on feedback. As a result of some significant changes to the R&R Policy, participation increased by 70% last year. We have developed customized benefits and policies for our members based on their valuable feedback, with the aim of better meeting their individual needs and preferences. In addition, extensive work has been done in both India and globally on streaming policies. Consistent with our annual tradition, the Diversity and Inclusion Summit facilitated meaningful dialogues, strategic planning, and innovative initiatives aimed at cultivating a diverse, inclusive, and equitable work environment for all our members.

Continuing our agile recruitment practices, we have focused on diversity and inclusion as one of our pillars, and our commitment to the cause can be seen in our laser-focused approach to hiring at least 40% women from the campus, as well as conducting dedicated recruiting drives to hire women members. It was a rewarding and enriching experience for us all last year to hire people with disabilities as part of an inclusive hiring program. Additionally, we are immensely pleased to have worked on the gender-neutralization of our people practice documents.

In G4 FY 2022-23, we completed a successful acquisition of Sri Mookambika Infosolutions based out of Madurai and Coimbatore. Through this acquisition, we have added 381 members to our ever-growing Happiest Minds family. As part of our commitment to be present in tier 2 cities, we also invested in new office setups at Bhubaneswar, Madurai, and Coimbatore.

Happiest Minds invested heavily last year as part of its upskilling, cross-skilling and certification programs for professional growth and development of its people. A comprehensive leadership succession plan has also been created across levels. Additionally, various tracks have been enriched and empowered, such as delivery managers, architects, and business analysts. Our focus for the coming year will be to ensure and create new tracks in addition to progressing on them.

This year we were part of the GPTW survey and have been recertified with high scores. In addition, Happiest Minds received a number of industry awards during the past year, including Top 50 India?s Best Workplaces Building a Culture of Innovation by All- India 2023, Top 10 India?s Best Workplaces in Health and Wellness 2022, Top 25 India?s Best Workplaces in IT & IT-BPM 2022, Top 50 India?s Best Workplaces for Women for the year 2022, Best Workplaces in Asia List for the year 2022 for creating & sustaining a High Trust, High-Performance Culture by Great Place to Work? Institute (GPTW). Happiest Minds also features in India?s Top 50 Best Companies to Work? for the year 2022. Priya Kanduri, Senior Vice President & CTO, IMSS won ‘Women in Al? award at Trescon World Al show, Dubai, recognized as one of the "Cyber Security Executive of the Year" during Annual Summit 2022, honored as Women In Tech Leadership Awards 2023? by AIM, honored as "Women in Work Achiever of the Year" 2023 by FKCCI, and also won the "Outstanding Leadership Award" at the Internet 2.0 Conference 2022. This is also a testament to our efforts to ensure a happy and agile workplace.

Our commitment to fostering a culture of innovation has been recognized by industry experts, as evidenced by our awards as an ‘Innovator? in NelsonHall?s Digital Banking Services NEAT Report or as a winner at the ET DataCon Awards 2022 for our Al/ Analytics CoE beyond others. We continue to push boundaries and co-create cutting-edge solutions with partners such as Microsoft, CloudFabrix, Snowflake, ServiceNow, Pimcore, and many others, enabling us to drive value and stay ahead of the curve.

As work dimensions evolve, we continue to integrate technology to enhance communication, collaboration, and productivity. As an organization, we focus on creating a positive experience for our people, including customized development plans, flexible work arrangements, and perks that align with their interests. Our goal is to create a diverse and inclusive workforce for the future, and we are committed to building a $1 billion company in the next 7 years.

Quality Management System (QMS)

1. Quality Policy

"Happiest Minds will consistently strive for customer happiness. We are committed to deliver excellence in our services by continually improving processes and systems, aiding in creating value to all our stake holders". Our Quality Policy is in alignment with our Mission statement.

2. QMS Framework

Our strategy for continual quality improvement is derived from our Vision, business needs, technology changes, customer feedback, suggestions, and process performance. Our quality processes are derived from industry best practices and are continually improved based on our experience, and our processes have been assessed by external accredited agencies. Your Company has received accreditation on international quality and process models, including ISO 9001:2015. In December 2021, your Company was recertified for ISO 9001:2015 with the external auditors applauding our focus on the digitization of internal processes. There was surveillance audit for ISO 9001:2015 in December 2022. In addition, your Company is certified to Information Security standards like ISO 27001:2013 and privacy standards like ISO 27701:2019 which guides our policies and procedures for protecting information security, our own software enablers and customers? software enablers. We have started our journey towards medical device standards of ISO 13485:2016 which will help us align our process with medical regulatory standards of various regions (Ex: FDA). We plan to get certified to the medical device standard in FY 2023-24. This would help to enhance our business capabilities and grow our business in the medical devices domain.

3. Engineering Practices

Engineering practices form the crux of successful delivery. Our engineering practices help your Company deliver high-quality software to its customers as per the planned timelines and consistently earn their trust and enable customer happiness. We measure the satisfaction levels of our customers every year and have been consistently improving on the scores, year after year since inception. Our digital driven engineering practices have been well accepted by our customers with some of them adopting these practices in their internal processes. We have adopted Agile practices to support our Mission of "Born Digital. Born Agile".

4. Systems Driven

Our projects are managed using systems to track project management practices and engineering practices for projects managed within your Company. This is in line with our digital focus on processes and practices. Our Integrated Project Management system helps the delivery to have an end-to-end view of the project at all levels of the management to provide enhanced delivery value to our customers. There are regular updates done to the system. Our projects that are adopting Agile methodologies are using JIRA to plan, track and manage the projects to decrease the turnaround of the shippable products to our customers. The usage of JIRA in extensive to plan epics, plan sprints, manage sprints and to manage releases. We also have built Business Intelligence (Bl) reports and Metrics Dashboards which help in taking proactive actions.

5. Code Quality

Apart from regular code reviews process our projects extensively use Code Quality tools to checkthe code on various parameters. We have defined Code Quality Index based on the Code Quality metrics and this helps us to deliver high-quality outputs to our customers. We have created groups for focused code review and critical codes will be undergoing this code review.

6. Rapid Iteration and Experimentation

Fail fast and learn quickly - Agile teams develop solutions through fast cycles of field testing and learning from mistakes. Products and solutions are developed iteratively using minimum viable products i.e., minimum set of features needed to test and learn. This also helps our customers to get an early feel for the products/solutions that they will be using and also help reduce the time for production release.

7. DevOps and Automation

Your Company has deployed DevOps practices which include building pipelines for continuous integration, code analysis, testing and deployment of software solutions developed. Some of the practices like continuous deployment, pushing a new release into production based on passing of all the tests, checking code and software quality in the build pipeline and leveraging the build pipeline to get feedback on the health of their software, etc. help your Company to decrease the turnaround to the customers and build better-quality products.

8. Information Transparency

The accessibility, accuracy, and availability of quality, unfiltered data which are critical for organizational agility is deployed across the organization. Various data pipelines and reports are built to enable team members to easily share their ideas and results of their work with those who might benefit from the information.

9. Continuous Learning

At your Company, continuous learning happens on both the individual and organizational levels. At the organizational level, structured processes and tools have been enabled to share knowledge. This helps the information learned through experimentation and experience is available across the organization.

10. Delivery Methodologies

Our suite of delivery methodologies in the below mentioned areas demonstrates our thought leadership and execution capabilities viz., Agile Methodologies, Service Delivery Lifecycle, Application Support and Maintenance Life Cycle, Embedded System Software, Waterfall Model for Software Development and Hardware Development Life Cycle. We also defined methodologies for Infrastructure and Security Services. These methodologies along with our best practices help us provide value added services to our customers.

11. Involve to Evolve

We drive continual improvement programs by actively engaging team members across the organization. Focused groups will be formed to make the resources part of the continual improvement journey to bring in the Agile community of practice, technical experts from Practice, the estimation work group and the internal audit community. The continuous measurement of benefits accrued from your Company?s process improvement initiatives has brought to light a significant reduction in rework, an increase in productivity, adherence to schedules and budget, and significant added value, culminating in customer delight. We have also piloted an excellent framework named "My Customer Happy Customer" (MCHC)

12. Rewards and Recognitions

The team members/teams are rewarded for their exemplary work towards process improvements and customer delight with awards such as Code excellence award, Service Delivery excellence award, etc.

13. Customer Connect

Your Company has a customer experience framework to understand the behaviors, needs and expectations of individual customers which helps in developing a roadmap for continuous engagement and enriching the customer relationship. As part of this framework, we conduct Customer Happiness Survey, Customer Pulse, bringing Value Adds, etc. We also make sure we have regular reviews with our customers to provide status on current engagement and discuss how we could further help our customers in their IT journey.

Whenever there is a customer escalation related to delivery or staffing, the manager concerned will raise the escalation in the project management system. An action item for the same is created and assigned to the respective team member to track and monitor the status of the escalation. The closure of the escalation is communicated back to the customer.

Internal Control System

Your Company has deployed adequate Internal Control Systems in place to ensure the smooth functioning of its business. The processes and the systems are reviewed constantly and changed to address the changing regulatory and business environment. The Control Systems provide a reasonable assurance of recording the transactions of its operations in all material aspects and of providing protection against misuse or loss of the Company?s assets. The ERP system which the Company implemented has helped in further strengthening the internal control systems that are in place.

The existing Internal Control Systems and their adequacy are frequently reviewed and improved upon to meet the changing business environment. The Statutory Auditors as well as the Internal Auditors periodically review the Internal Control Systems, Policies and Procedures for their adequacy, effectiveness and continuous operation in addressing risk management and mitigation strategies.

Conservation of Energy, Research and Development, Foreign Exchange Earnings and Outgo

Your Company has made the necessary disclosures in Annexure V to this Report in terms of Section 134(3) of the Companies Act, 2013 (earlier Section 217(1 )(e) of the Companies Act, 1956), read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988.

Employees? Remuneration

As per the proviso to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the statement containing the names and other details of employees drawing more than Rs 10.2 million per financial year or Rs 0.85 million per month, as the case may be, are set out in the Annexure VI to the Board?s Report. Further, as per the proviso to Rule 5(3) of the said Rules, the particulars of employees posted and working outside India not being directors or their relatives, need not be included in the statement but, such particulars shall be furnished to the Registrar of Companies. Accordingly, the statement included in this Report does not contain the particulars of employees who are posted and working outside India. If any Member is interested in obtaining a copy thereof, such Member may write to the Company in this regard.

Directors? Responsibility Statement

Pursuant to the requirement under Section 134 (5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed that:

(i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

(ii) Accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the FY 2022-23 and of the profit or loss of the Company for that financial year.

(iii) Proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) The Annual Accounts have been prepared on a going concern basis.

(v) Your Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operate effectively.

(vi) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating efficiently.

Secretarial Standards

During the year under review, your Company has duly complied with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Cost Audit

The provisions of Companies (Cost Records and Audit) Rules, 2014 are not applicable to your Company.

Insolvency and Bankruptcy Code

During the year, there was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016), hence the requirement to disclose the details of application made or proceeding pending at the end of financial year is not applicable.

Disclosure under Rule 8(5)(xii) of the Companies (Accounts) Rules,2014

During the year, there were no instances where your Company required the valuation for one time settlement or while taking the loan from the Banks or Financial institutions.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Prevention of Sexual Harassment (POSH) Act, 2013 has been a significant legislation in India aimed at preventing sexual harassment. The act was enacted to provide a safe and secure working environment for women, and to prevent sexual harassment in the workplace. This act has been significant in fostering teamwork, diversity, and trust across our company. We at Happiest Minds strive to create a safe and professional working environment. Besides having a gender neutral Anti-Sexual Harassment Policy at work, we also adhere to the requirements of the Sexual Harassment of Women at Work (Prevention, Prohibition and Redressal) Act, 2013. For resolving complaints received regarding sexual harassment, an internal committee has been established. Additionally, an attorney who specializes the Prevention of Sexual Harassment ("POSH") and Protection of Children against Sexual Offences Acts has been appointed to our Internal Committee.

Following steps have been taken as a part of the ensuring that we comply to the statutory nature of the POSH act this year:

Composition of the POSH Committee: From the inception of the POSH Act, Happiest Minds has been compliant with the establishment of the POSH Committee. Complaints of sexual harassment at work will be dealt with judiciously and expeditiously by this committee. The committee comprises female and male members, of whom more than 50% are women. The committee is headed by the Presiding officer and representatives from each business and location.

Training: Based on the requirement of the act we have initiated training and certification for all our Members to create awareness about sexual harassment in the workplace and the POSH Act. We have ensured that all our members and partners who join us have been trained on the POSH Act in India through our online module. All members completing two years in the Organisation have gone through the refresher training. POSH Training is a mandatory training at Happiest Minds, and the following are some of the modules that have been covered.

• Walk through of the POSH Act

• What is covered under sexual harassment

• Gender based scenarios under POSH

• Sexual Harassment during remote working

• How to raise a complaint

• Investigation procedure

Please Note: A POSH Refresher is conducted once every two years at Happiest Minds. Failure to complete the mandatory training within the suggested time limit will be reflected under the Performance review as non-complaint.

Complaints: We have received no POSH complaints during the year. Regardless of no complaints we have ensured that we have created awareness of POSH through our various outreach programs.

Disciplinary action: No disciplinary actions were taken as there were no complaints registered in the year.

Compliance: Based on the subsection of the POSH Act we have also filed for an annual Report on April 02, 2023 with the competent authorities. All required documents in compliance with the POSH Act have been filed. There have been no non-conformities or observations identified by our competent authorities.

Other Action taken to create awareness: As we slowly began returning to work, most of last year was spent in a hybrid mode. Regular communication and awareness mailers were sent about POSH applicability, along with dos and don?ts. Additionally, the POSH posters have been displayed alongside the statutory boards as part of compliance.

This year we have revisited the composition of our POSH Committee based on the movement of individuals.

The committee exited the following members 1. Meenakshi KC

The committee also added the following Members 1. ImpaTejas

All Members of the POSH Committee have been trained, certified and are Compliant to the POSH Act?s needs to be a part of the committee.

Full Disclosure Statement: While the provision of the POSH Act covers and protects the women members who are subjected to sexual harassment, we have taken cognizance to expand the scope of our sexual harassment policy to cover all members irrespective of gender, caste, class, race, ethnicity or affinity, however, within the confines of the proposed act. This Policy applies to all members regardless of their position or contractual status, i.e., permanent, short-term contract, visitors, and casual employees. Additionally, all complaints (if any) received by the IC are reviewed by the IC and kept confidential.

Acknowledgements

Your Directors have pleasure in recording their appreciation for all the guidance and co-operation received from all its customers, Members, investors, vendors, partners, bankers, government authorities and other stakeholders for their consistent support to your Company in its operations. Your Directors take this opportunity to place on record their sincere appreciation of the dedication, contribution and commitment of all the Happiest Minds in the Company?s growth.

For and on behalf of Board

Venkatraman N	Ashok Soota
Managing Director & CFO	Executive Chairman
DIN: 01856347	DIN: 00145962