Hil Ltd Directors Report.

Dear Members

Your Directors take pleasure in presenting the 74th Annual Report along with Standalone and Consolidated Financial Statements for the year ended March 31, 2021. Your Company has embarked on a disciplined path of progression to redefine itself as a one stop end to end building solutions provider. While Roofing Solutions has been one of the biggest contributors since decades, the growth of Polymer Solutions, Building Solutions and Flooring Solutions along with other newer opportunities, your Company is objectively looking for growth profile from greener ventures profitably.

COVID-19 led to a complete breakdown of economy, livelihood and healthcare in Financial Year 21. The unprecedented shutdowns and loss of lives have never been witnessed in recent memory. To mitigate these headwinds and come out successfully, your Company has institutionalized ten cross functional teams to re-imagine HIL post Covid situation while continuing to build "OneHIL" with focus on health & safety, liquidity, cost optimization, effective customer connect through digital monitoring of greener pastures, lean and productive operations and various other activities to engage all relevant stakeholders. The business was systematically converted from a quarterly and monthly based target focus to a daily monitoring system, which brought further attention, harmony and impetus into the whole drive resulting in enhancing our abilities to harness the newer opportunities arising out of the fast-changing scenarios.

Looking back, your Company is proud of its committed and passionate employees and effectiveness with which they have channelled their efforts to overcome this challenging situation. While keeping the business and cash flow safe, the biggest organization-wide impetus was given towards safety and wellbeing of our employees. Your Company fast-tracked the SOPs, work instructions, video snippets and directions were made available across all locations, offices and depots, which were personally executed by a well formed central response team & local response teams at various locations to ensure business continuity and safety with fullest commitment towards social distancing, cleanliness and personal safety managing sustainability amidst rapidly spreading pandemic.

On the sales front your Company recognized the challenge that was posed due to closure of our Country from time to time in different pockets and therefore started utilizing extensively the digital and business intelligence tools and heat maps to focus at greener pastures with newer customer base in Tier II & Tier III cites and maximize revenue from these pockets. A very effective contribution was also done by your Company towards building Covid centres and labour hutments in time of need for our Country, which also supported in building up our connect with the country wide fight against the pandemic.

Despite a challenging market environment, your Company delivered a resilient financial performance. Revenues remained buoyant with a good increase over previous year with stringent focus on cost optimization, penetration into new markets, expanding product base and getting the right product mix. Strategic market mapping and in-depth tabs on each region, ensured your Company to bounce back on growth trajectory and maintain its leadership position despite adverse market environment. Our ability to exploit data in a timely and smart way fortified by appropriate analytical tools in which we had invested, considerably enhanced the abilities of our multi-talented teams.

HIL continues to service European markets through its subsidiary, Parador GmbH, Germany. Despite facing challenges like closure of borders, distorted movements of people and goods, lock down restrictions hugely impacting the business operations, Parador demonstrated the zeal in true sense of "OneHIL". Parador, while abiding with the laws and guidelines, and following the social distancing norms, cleanliness, employee safety and wellbeing measures, utilized its capacity to the maximum at both of its manufacturing locations at Germany and Austria and delivered to the consumers through its innovative, contactless business models like DIY Stores & Digital Customer Studios.

Your Companys strength and ability to manufacture a variety of products in extremely challenging conditions catering to a dynamic market situation and maintaining appropriate inventory levels are mainly due to our steadfast focus, motivated people, advanced technologies, digitization processes continuous monitoring and financial resilience, which all contributed to nurture business opportunities resulting in superior performances. Our people have also distinguished themselves through their personal commitment and contributions, which has not only solidified our presence in the existing markets but also enabled us to create new opportunities in the coming years. We are also excited about our potential to enhance our efforts and maintain our commitment towards environmental sustainability.

With the above brief synopsis, your Directors are pleased to present the financial performance of the Company, both on standalone and consolidated basis, for the year ended March 31, 2021:

Summary of Financial Results
(Rs. Crores)
Particulars Standalone Consolidated
2020-21 2019-20 2020-21 2019-20
Total Income 1596.45 1396.60 3066.19 2618.79
Earnings Before Interest, Depreciation & Tax 260.26 175.75 428.09 271.35
Less : Interest 18.69 31.17 27.84 38.52
Depreciation 49.18 49.97 108.97 97.88
Profit Before Tax and Exceptional items 192.39 94.61 291.28 134.95
Add/(Less): Exceptional items / Profit / Income from JV - - 1.14 0.64
Profit before tax from operations 192.39 94.61 292.42 135.59
Less : Taxes 49.57 17.89 77.60 29.63
Profit for the year from operations 142.82 76.72 214.82 105.96
Profit before tax on sale of discontinued operations 60.56 - 60.56 -
Less: Taxes on profit on sale of discontinued operations 15.64 - 15.64 -
Profit from sale of discontinued operations 44.92 - 44.92 -
Total Profit before tax 252.95 94.61 352.98 135.59
Less: Total taxes 65.21 17.89 93.24 29.63
Total Profit for the year 187.74 76.72 259.74 105.96
Other Comprehensive Income – net of tax 0.08 0.11 9.14 18.24
Total Comprehensive Income for the year from operations 142.90 76.83 223.96 124.20
Total Comprehensive Income for the year 187.82 76.83 268.88 124.20
Basic Earnings Per Share (H) 250.74 102.62 346.89 141.73

The above mentioned financial numbers include income and profit generated from discontinued operations.

Revenue

Your Company achieved a net revenue from operations on standalone basis at H 1570.38 Crores as against H 1360.01 Crores in the previous year, an increase of 15.5% and on consolidated basis registered a net revenue from operation at H 3048.06 Crores against H 2594.12 Crores in the previous year recording a growth of 17.5%. The year has seen an exponential growth as "OneHil" team which has mitigated the crisis and redefined many of the business processes and norms. This model will continue in the coming years. Various aggressive cost saving initiatives have helped us to redefine our cost base thereby achieving better cost optimization along with lean operational models, augmenting the growth of your Company in coming years.

Your Company has come up with a Lead Generation and Management Portal, a one stop solution for all sales leads, which will augment leads from one business to other business vertical which in turn help the Company to service the customers at large.

While the pandemic continues to pose considerable headwinds to the safety of employees and business in general, your Companys set guidelines, a mature set of SOPs and newer ways of doing business, will help to wade through times in a disciplined and progressive manner. Your Companys attention is more focused towards safety of employees, as well as doing enough and more towards dealers, distributors, customers and plumbers, to help them wade through the difficult times and this responsibility will continue to separate this Company and live up to being extremely focused to support the community.

Your Company strongly believes that, in coming years, once the pandemic is over, the economy will emerge stronger, than it ever was and it is pertinent time to focus on blueprint for new opportunities and gear up to drive transformations.

Interest & Loans

During the year under review, interest cost reduced to H 18.69 Crores on a standalone basis as against H 31.17 Crores during the previous year. Your Company has taken this opportunity to redefine the working capital norms and re-shape the cost structure for each business with a lean set up to run the business more efficiently. On a consolidated basis, interest cost for the Financial Year 2020-21 stood at H 27.84 Crores as against H 38.52 Crores in the previous year.

The focus on cash generation persisted even in the subsidiaries as a result of which, Parador could partly prepay shareholder loan to an extent of Euro 5.5 million to the parent Company during Financial Year 2020-21. Your Company has repaid during the year H 283.55 Crores to banks at standalone level in India and H 331.83 Crores to banks at consolidated level. During the year, your Company has fully repaid the loan taken for acquisition of Parador GmbH, Germany.

Profit Before Tax

During the year under review, your Company registered a standalone Profit Before Tax (PBT) from operations of H 192.39 Crores as against H 94.61 Crores in the previous year, recording a growth of 103%. Your Company could achieve this due to detailed planning and bringing in sharper focus on realizations, initiatives to boost sales, improve net sales realizations and adopting product specific / market specific models. These timely actions have benefited your Company to deliver one of the best performing year in the history of HIL.

HIL International GmbH, Germany and its subsidiaries, have performed much better than expected, profit before tax on a consolidated basis for the year 2020-21 stood at H 292.42 Crores as against H 135.59 Crores in the previous year, recording a growth of 116%.

Net Worth

On a consolidated basis, the Net Worth of your Company as at March 31, 2021 stood at H 995.27 Crores as against H 742.73 Crores in the previous year.

The Consolidated earnings per share (basic) for the year ended March 31, 2021 stood at H 346.89 per share as against H 141.73 per share for the year ended March 31, 2020 and the book value per share as at March 31, 2021 was at H 1328/-as against H 993/-as on March 31, 2020.

Credit Rating

The credit ratings on Companys long term and short term facilities have been re-affirmed by the respective credit rating agencies and the same is furnished below:

Sl No Agency Type Rating
1 ICRA Long Term –Credit Facilities ‘ICRA AA-/Stable
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 H 15/- per equity share (150% of the paid-up value). Your Directors are pleased to recommend a final dividend of H 25/- per equity share (250% of the paid-up value) for your consideration and approval at the ensuing 74th Annual General Meeting of the Company.

With the proposed final dividend, the total dividend for the year 2020-21 works out to be H 40/- per equity share (400% of the paid-up value) as against the total dividend of H 20/- per equity share (200% of the paid-up value) declared in the previous year.

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

The total dividend outgo would amount to H 29.97 Crores and the Company has transferred H 10 (Ten) 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 24, 2021 to Friday, July 30, 2021 both days inclusive, for determining the entitlement of the shareholders for the final dividend for the Financial Year ended March 31, 2021 and for annual book closure.

The Record Date for payment of final dividend is Friday, July 23, 2021 for determining the entitlement of members for final dividend for the Financial Year 2020-21.

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

Share Capital

The paidup Equity Share Capital as on March 31, 2021 was H 751.97 Crores. During the year under review, the Company has issued 14,240 equity shares on exercise of options by an eligible employee and there are no shares with differential voting rights, nor sweat equity issued by the Company.

Listing With Stock Exchanges

The Equity Shares of the Company are listed on NSE Limited and BSE Limited. The annual listing fees for the years 2020 & 2021 have been paid to these exchanges.

During the year 2021, the Issued and Listed Capital of the Company has increased due to allotment of equity shares to eligible employee on exercise of options under HIL Employee Stock Option Scheme, 2015.

State of Companys Affair

Covid-19, a global pandemic, has threatened the very existence of human life across the globe. It has caused what seems to be transitory pause to most of the businesses across the globe. Your Company is no exception to these challenges and its effects. During these time, key focus of the Company was on Employee Health and Safety along with cost optimization and cash flow management. Your Company has implemented a process of daily review of various costs to obtain immense cost discipline.

Your Companys dedicated approach with People Health, Safety, Liquidity and Optimized Cost Structure to run the business more effectively, has helped to convert this crisis into an opportunity and moving ahead the embarked growth trajectory.

During the first quarter of the year, the business performance of all products was severely affected. However, with the focused and committed approach combined with its unique and timely market/product based strategies your Company was successful in safeguarding its market leadership position in most of its products categories.

During the year, challenges such as sharp rise in prices of raw materials, local restrictions of movement of people, continuous challenges in Real Estate sector and various other reasons have played its role and impact on the business. However, Management had anticipated some of these emerging challenges and quickly began calibrating its responses by adopting product specific / market specific models. These timely actions have yielded results, which not only helped the Company to overcome these problems, but also to come out with flying colours in India as well as in Europe

Your Company institutionalised "Six Sigma", "Lean Management Systems" and "Learning Management Tool" across its manufacturing units and other key enabling functions which has helped to achieve operational excellence and supported the initiative of our continuing efforts in driving the costs effectively.

Your Companys in-house initiative "Nayi Disha", an Idea Management Platform enabling employees to share their ideas for cost optimization and growth of the business, has seen a qualitative response from the employees. This platform is extensively utilized to harness employee involvement towards new idea generation and cost reduction.

Roofing Solution

Your Company continues to maintain its market leadership position in this product category mainly backed by its loyal customers and retailers. Along with your Companys deep brand presence coupled with market penetration and dealer / sub-dealer connect activities, Digital Connect and ‘Cash is King approach has yielded a good outcome for the Company and helped to boost sales and improve net sales realizations.

The first quarter, which was always been the most favourable period for your Company, began witnessing certain challenges. It all began with nation-wide lockdown due to COVID-19 which impacted the demand, supply & logistics of our Fibre Roofing Sheets in rural parts of the Country. Then there was significant influence of increase in material cost, logistics constraints and liquidity crunch in the market. To add to these woes, availability of labour and drivers was also an issue. All these cumulatively had an adverse impact on the day-to-day operations during the season, still the commitment of employees and channel partners have made Financial Year 2020-21 a memorable year in the history of your Company.

Overall, despite the pandemic year and immense challenges, the roofing business ended the year with an impressive growth of 14% in volume terms over the previous year. Your Company is confident of consolidating its leadership position in the industry.

"Charminar" and "Charminar Fortune" brands continue to enjoy the trust of the customers backed by your Companys enhanced Customer centric approach, superior quality than competition, improved post sale customer service, deep routed supply chain network and widely spread depots and dealer network. This has helped the Company to manage the headwinds faced in the industry with ease.

Building Solutions

Building Solutions business consists of Wet Walling and Dry Walling products, which caters to the various requirements of building industries/commercial spaces and infrastructure segments. Due to the pandemic and lockdown, overall demand was low throughout the year; however our all-out efforts resulted in improved Business performance during second half of the year.

In Financial Year 2020-21, your Company focused on growing the building solutions business by optimal utilisation of capacity. Your Company continued its position as a comprehensive solutions provider in the building materials category by offering all relevant products under one roof thereby retaining and enhancing its customer base. Having achieved the maximum capacity utilisation in the previous year, your Company has focused on process efficiency and lean management principles in these factories to optimize the cost further.

Business Challenges faced in the Building Solutions viz. drop of housing sales, delay in major housing sector projects along with the liquidity in the market impacted this sector as a whole and decline in revenue from this segment. To overcome these hurdles, various steps such as New Markets penetration, additional focus on Tier II & Tier III cities along with emerging territories like East and Jammu & Kashmir were implemented and have shown fruitful results.

Wet-Walling Solutions

HIL, under the brand name "Birla Aerocon", is Indias leading manufacturer of Autoclaved Aerated Concrete (AAC) fly ash blocks and has a leadership position in the market. These blocks offer effective and practical solutions for current building regulations and are manufactured using latest technologies and are an excellent substitute for clay bricks, concrete and hollow blocks. They save up to 30% construction time in building internal & external walls and slabs while giving the desired strength.

Wet-Walling category consists of "Fly Ash Blocks", an eco-friendly building material, "Smart fix", "Smart Plaster" and "Tile-Adhesive" under the brand name "Birla Aerocon". All products cohesively offer a complete range of solutions to the stakeholders in the Building Material industry. Tile-Adhesive is a new addition to this family and will be a compliment to other products in this category.

Fly Ash Blocks – an eco-friendly building material product, with unique combination of strength, low weight, cost-effectiveness and durability, continue to be the preferred choice among the builders and dealers.

During the year under review, Fly Ash Blocks registered de-growth of 17% in quantity terms over the previous year.

Dry-Walling Solutions

Dry-Walling category consists of "Panels", "Boards" and "Smart bond" under the brand name "Birla Aerocon". Panels & Boards continue to be the preferred choice of the architects and designers. Technical solutions team of the Company continue to work closely with various architects and designers to provide them requisite support by creating awareness about the properties of these products and its advantages and they continue to promote these products. During the year the Panels and Boards division registered a decline of 8% in quantity as compared to the previous year. However, our focus on new projects like COVID centres and additional healthcare facilities required due to pandemic, could keep the business momentum up. Your Company continues to maintain its preferred position in this category as well.

Building Solutions segment is presently operating at more than 90% capacity and given the strong efficiencies and brand reputation, this segment has performed extremely well in Tier II and Tier III markets. With Companys focus to expand its presence in Tier II & Tier III markets to ably cater to the upcoming Housing and infra projects, Company has identified the state of Odisha as one of the prominent place to establish its foot print and service the emerging nearby markets.

Your Company is in the process to expand its manufacturing foot print in the State of Odisha by setting up facility to manufacture

AAC Blocks, Solid Cement Panels and Fiber Cement Board under Birla Aerocon brand with a project outlay H 82 Crores (approx.).

Polymer Solutions

This vertical consists of Pipes & Fittings and Wall Putty marketed under the brand name "Birla HIL". The brand "Birla HIL" continued its growth trajectory even amidst the pandemic conditions.

Pipes & Fittings

During the year, Pipes & Fittings business vertical registered a healthy growth of 64% over Financial Year 2019-20 outperforming the industry. Your Company focused on aggressive channel expansion especially in Tier II and Tier III cities in order to achieve its growth. In addition, your Company continued its range expansion initiatives adding new SKUs in its portfolio of Pipes & Fittings. During the year, your Company focused on improving the brand visibility for Birla HIL through aggressive BTL drives and participation in Plumbing trade fairs and exhibitions.

HIL offers CPVC and UPVC Pipes and Fittings – these pipes are environment-friendly & far superior replacement for the widely used GI pipes. Because of their unique characteristics, Birla HIL CPVC and UPVC pipes, fittings and solvents are suitable for a broad range of applications. These plumbing solutions are the ideal choice, as they are corrosion resistant, durable, smooth, friction free and resistant to bacterial growth. CPVC pipes are cost effective with low maintenance cost and they are easy to install. Birla HIL Pipes & Fittings have a unique TrueFitTM technology which offers 100% leak proof joints and enhances the value propositions for consumers. Your Company also offers Birla HIL SWR Pipes, for sewage systems & Column Pipes Systems, which are easy & economical solutions for underground bore well water application in residential, commercial & industrial buildings.

A well thought investments into this segment has enabled us to augment several SKUs for both pipes and fittings to deliver composite solutions in both B2B and B2C segments.

Wall Putty

Birla HIL Wall Putty is another fast moving product in the building material category, where your Company is in commanding premium position in terms of quality and brand pull. Birla HIL Wall Putty is made with cutting edge "TRUE COLOUR" technology with a blend of white cement, superior minerals, German polymers and functional additives.

During the year, Wall Putty business continued its momentum by enhancing its presence in newer markets and territories especially in South and East. Wall Putty business vertical registered a growth of 38% over Financial Year 2019-20 outperforming the industry. In order to service the growing demand across various regions, your Company commissioned a manufacturing facility for wall putty in Golan, Gujarat in addition to adding multiple supply locations in South and East. During the year, your Company improved the brand visibility for Birla HIL through aggressive BTL activities.

In Financial Year 2020-21, polymer solutions business continued its growth momentum and strengthened its presence across the Country.

Flooring Solutions

Parador - a leading international premium brand for flooring Solutions with its "Made in Germany" & "Made in Austria" quality products, is a perfect blend of design and technology. Paradors

Innovative and sustainable products make it highly complementary to the existing product portfolio, which will enable the Company to market its widened product range across the globe.

Introduction of E-business, through "Online Brand Store" and focus on "DIY Kits" were key success factors to positively impact Parador business, amongst the other factors, the highlights points being:

"One Ground" brand campaign launched worldwide to promote new products, territories, while primary focus was on markets such as Germany, Austria and Switzerland which helped to achieve better growth despite having intermittent lock downs.

The utilization of the plants improved to 72.1% in Financial Year 2020-21 from 67.6% in previous year.

Higher focus was on Digitization including Industry 4.0, Digital Customer Studio to provide a walk-in feel for the customers.

During the year Parador Group has reported a Net Revenue of H 1,479.34 Crores as against H 1,239.04 Crores in previous year recording a growth of 19%. The Profit Before Tax for the year stood at H 100.17 Crores as against H 40.91 Crores in previous year recording a growth of 145%.

Thermal Insulation

In the year 2019-20, the Company entered into a Business Transfer Agreement for Sale and Transfer of this business to M/s. Calderys India Refractories Limited for an overall consideration of H 80 Crores, subject to terms of Business Transfer Agreement. The said transaction was completed as per the mutually agreed timelines during the year under review.

Branding

The philosophy of Together, We Build is synonymous not just with our products but also with our brand persona, which is reflected in all our activities and outreach programs.

Owing to the pandemic impact this year, your Company invested its efforts to enhance its digital presence and increase its brand salience in the minds of the consumers via online means. Influencer meets were done online where renowned architects had live conversations with stakeholders, consumers and answered Q&As on the future of wooden flooring. Birla HIL engaged in brand associations with ISH and Plumb skills Expo organised by Ministry of Skill, Development & Entrepreneurship, which are nationally recognized platforms and facilitate interactions between plumbers, architects and relevant stakeholders.

Our products were displayed through these platforms that garnered high visibility and resulted in lead generation. Charminar leveraged ubiquitous B2C and B2B e-commerce platforms like Amazon, Indiamart, TradeIndia along with different social media platforms to generate leads and drive digital sales along with arranging channel partner conferences, influencer connect and leveraging loyalty programs.

Our extensive engagement with the plumbers, architects, masons and the channel partners with a focus on building a strong digital platform offering our entire range of products have fortified the efforts and resulted in a good performance despite challenges.

Awards

Great Place to Work, 2021

Your Company is proud of being certified as a "Great Place To Work" for the third time in a row for 2021-22, the employee satisfaction score has increased to 86% from earlier 82%. Winning this coveted title for a third time reassures that our employees take pride in working at HIL and feel like a family unit. This is a result of commendable efforts taken by the management towards building an impeccable performance-based organization. Also, your Company was in top 30 in the manufacturing segment last year. Happy to inform that this year your Company has been chosen to be amongst the Top 100 Companies in India and No. 1 in the Building Material and Cement Industry.

Economic Times - Asias Most Promising Leader of the Year

Mr. Dhirup Roy Choudhary, Managing Director and CEO of your Company was conferred with the prestigious ‘Most Promising Business Leader in Asia Award 2020 by The Economic Times, for a third time in a row marking a significant achievement, and testimony to his persistent endeavors towards strengthening an innovation-led organization and leading and shaping the business demographics of HIL.

Superbrand Award

Superbrand is the worlds largest independent arbiter of branding. It pays tribute to the strongest and most valuable brands in the world. ‘Superbrand Status strengthens a brands image, adds prestige and sets the brand apart from its competitors. Your Companys brands "Charminar" and "Birla Aerocon" have been recipients of this prestigious award this year as well.

Brand of the Year, 2020 – The CEO Magazine

The CEO Magazine covers Indias best brands on a quarterly and yearly basis covering the achievements of the brand and the brains behind the company. Your Company featured in its latest issue encompassing the brand being a market leader in the Indian subcontinent and its growing recognition in the international market.

MUSE Design Award, 2020 - Parador

Pardor Germany has won Gold in the category of Product Design at the MUSE Design awards. The MUSE Creative and MUSE Design Awards are international competitions aimed at professionals in the creative and design industries who help to open up new horizons for their industry. Under the management of the International Awards Associate (IAA), both awards are judged by a jury of professionals who have received awards in an international context. IAA oversees the awards and recognition programmes, assembles the juries and sets strict standards for both competitions.

German Design Award, 2020 – Parador

Parador Germany got selected as a winner for Parador Online Brand Store in the category Excellent Communications Design – Web. Outstanding design means providing answers to the challenges of our time and thinking design further ahead. The top-class international jury honours these groundbreaking design achievements - and the German Design Awards make the design trends visible across all sectors in a glamorous setting.

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 period under review, there were no changes to the Board of Directors of your Company. Pursuant to the provisions of Section 149 & 184 of the Companies Act, 2013 and under Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Independent Directors of the Company have submitted a declaration that each of them meet the criteria of independence as prescribed in Section 149(6) of the Companies Act, 2013 and SEBI Regulations and there has been no change in the circumstances which may affect their status as an Independent Director during the year.

In accordance with provisions of Section 152 of the Companies Act, 2013 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 74th 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.

Pursuant to the provisions of Section 203 of the Companies Act, 2013, details of the Key Managerial Personnel of the Company.

Sl No Name of the Person Designation Remarks
1 Mr. Dhirup Roy Choudhary Managing Director & CEO -
2 Mr. KR Veerappan Chief Financial Officer -
3 Mr. Mahesh Thakar Company Secretary & Head Legal Appointed w.e.f February 2, 2021
4 Mr. Ashish Malhotra Company Secretary & Head Legal Appointed w.e.f August 14, 2020 and resigned w.e.f September 30, 2020
5 Mr. G Manikandan Company Secretary & Financial Controller Resigned w.e.f August 13, 2020.

There were no other changes in the Key Managerial Personnel of the Company and Company is in compliance with the required provisions of the Companies Act, 2013.

Board & Committees

Board Meetings

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.

During the year, Six (6) meetings of Board of Directors of the Company were convened and held in accordance with the provisions of the Companies Act, 2013. The date(s) of the Board Meeting, 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 Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

None of the Directors are disqualified under Section 164(2) of the Act. Certificate on non-disqualification, as required under Regulation 34 of SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015 is forming part of the Corporate Governance Report forming part of this Annual Report.

Independence of the Board

The Board of Directors of the Company comprises of optimum number of Independent Directors. Based on the confirmation/ disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 149(6) of the Act:

1. Mr. V V Ranganathan
2. Dr. Arvind Sahay
3. Mrs. Gauri Rasgotra

All the above Directors have registered themselves with the Independent Directors Data Bank. The Company has received necessary declarations from each Independent Director under Section 149 of the Act and Regulation 25 of the Listing Regulations, confirming that he / she meets the criteria of independence laid down in Section 149 of the Act and Regulation 16(1)(b) of the Listing Regulations.

Committees of the Board

As per regulatory requirements and with a view to have focused deliberation, the Board has constituted following committees.

Audit Committee

Audit Committee of the Company meets the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the year, Four (04) meetings of the Committee were held, the details along with the composition of the Audit Committee as required under the provisions of Section 177(8) of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this Annual Report. During the year under review, the Board has accepted all the recommendations of the Audit Committee.

Nomination and Remuneration cum Compensation Committee

Nomination and Remuneration cum Compensation Committee meets the requirements of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the year, Five (5) meetings of the Committee were held, the details of the composition of the Nomination and Remuneration cum Compensation Committee as required under the provisions of Section 178 of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this Annual Report. During the year under review, the Board has accepted all the recommendations of the Nomination and Remuneration cum Compensation Committee.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, a formal evaluation of the performance of the Board, its Committees, the Chairman and the individual directors was carried out for the financial year 2020-21.

Structured forms covering evaluation of Board, Committees of the Board, Chairperson, Independent Directors and Non-Independent Directors were circulated to all the Directors and Directors were requested to 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. The performance evaluation of the respective Committees and that of independent and non-independent directors was done by the Board excluding the director being evaluated.

Evaluation of all Board members is performed on an annual basis. The evaluation is performed by the Board with specific focus on the performance and effective functioning of the Board and Individual Directors and the same is taken note by the Nomination and Remuneration Cum Compensation Committee.

The entire Board carried out the performance evaluation of the Independent Directors. Further the Independent Directors carried out the performance evaluation of the Chairman and the Non-Independent Directors.

Based on the recommendation of the Nomination and Remuneration Cum Compensation Committee, the Board reviews the key skills/ expertise/competence of Board of Directors, so that 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 the SEBI (Listing Obligation & Disclosure Requirements) 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

Disclosures as required are given in the Corporate Governance Report which forms part of this Annual Report.

Familiarisation Programme for Directors

In addition to giving a formal appointment letter to the 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 Companies Act, 2013 and relevant Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are given and explained to a new Director.

Pursuant to Regulation 25(7) of 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 Listing Regulations, the details required are available on the Companys website https://hil.in/investor-relations/ familiarization-program/.

Corporate Social Responsibility Committee (CSR)

Corporate Social Responsibility Committee of the Company meets the requirements of Section 135 of the Companies Act, 2013. The details of the composition of the Corporate Social Responsibility Committee as required under the provisions of Section 135 of the Companies Act, 2013 is given in the Corporate Governance Report which forms part of this Annual Report.

Pursuant to the provisions of Section 135 of the Companies Act, 2013 and the Rules made thereunder, the brief outline of the Corporate Social Responsibility (‘CSR) policy of the Company and the initiatives undertaken by the Company on the CSR activities during the year are given in Annexure (II) to this report in the format prescribed in the Companies (Corporate Social Responsibility) Rules, 2014. The said policy is available on the Companys website "https://hil.in/ investor-relations/policies/CSR Policy".

As per the provisions of Section 135 of the Companies Act, 2013, 2% of average Net Profits of the Company for the immediately preceding three financial years calculated as per Section 198 of the Companies Act, 2013 works out to H 2.36 Crores and the Company has spent H 3.08 Crores on CSR activities in the areas of Preventive healthcare including PM Cares Fund and education.

During the year under review, your Company has transferred H 3.00 Crores to PM Cares Fund to support the fight against Covid-19 Pandemic.

Stakeholders Relationship Committee (SRC)

The Stakeholders Relationship Committee of the Company meets the requirements of Section 178 of the Companies Act, 2013 and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the year Four (04) meetings of the Committee were held, the details along with the composition of the Committee as required under the provisions of Section 178 of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this Annual Report. During the year under review, the Board has accepted all the recommendations of the Committee.

Risk Management Committee

In terms of the provisions of the Listing Regulations, your Company has constituted a Risk Management Committee comprising of all the members of the Audit Committee along with the Managing Director & CEO, Chief Financial Officer and Head – Internal Audit of the Company. The Risk Management Committee is mandated to review the risk management process of your Company. The Company Secretary acts as the Secretary to the Committee.

The Company has an elaborate Risk Management framework in place, which helps in identifying the risks and proper mitigation thereof and also lays down the procedure for risk assessment and its mitigation through an internal Risk Committee.

Key risks and their mitigation arising out of reviews by the Committee are assessed and reported to the Audit Committee on a periodic basis. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

The Risk Management Policy details the Companys objectives and principles of Risk Management along with an overview of the Risk Management process, procedures and related roles and responsibilities.

During the year, the Risk Management Committee, Audit Committee and the Board have reviewed the elements of risk and the steps taken to mitigate the identified risks. In their opinion, apart from the existing challenges posed by the Covid pandemic, there are no major elements of risk, which has the potential of threatening the existence of the Company and as an organization, your Company promotes strong ethical values and high levels of integrity in all its activities, which in itself is a significant risk mitigator.

Annual Return

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the annual return of the Company for the Financial Year 2020-21 can be accessed through the web link on the Companys website https://hil.in/investor-relations/2021-annual-report/

Directors Responsibility Statement

Pursuant to the requirement of Section 134(3)(c) and 134(5) of the Companies Act, 2013 and on the basis of compliance certificate received from the executives of the Company and subject to disclosures in the Annual Accounts, 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 year ended March 31, 2021 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, 2021.

III. We have taken proper and sufficient care 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 for the year ended March 31, 2021 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.

Corporate Governance

Your Company is committed to good Corporate Governance and best corporate practices. The report on Corporate Governance for the year ended March 31, 2021 pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed herewith as Annexure (III). The Certificate from the Auditors of the Company M/s. B S R & Associates LLP., Chartered Accountants, [ICAI Firm Registration Number: 116231W/W-100034] regarding compliance of conditions of Corporate Governance is attached to the report of Corporate Governance forming part of this Annual Report.

Policies

Vigil Mechanism

Pursuant to the requirement laid down in the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Company has a Whistle Blower Policy as part of its Vigil Mechanism to deal with instances of fraud and mismanagement, if any. The Vigil Mechanism framework ensures that strict confidentiality is maintained whilst dealing with reported concerns and that no discrimination whatsoever is allowed to be practiced against any person who has genuinely raised a concern. The designated officer/ Audit Committee Chairman can be directly contacted to report any suspected or confirmed incident of fraud/ misconduct at whistleblower@hil.in. A High Level Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board.

The details of the same are provided in the Report on Corporate Governance forming part of this report. The Whistle Blower Policy is also posted in the Investors section of the Companys website www.hil.in on the following link https://hil.in/investor-relations/policies/

The complaints received under Vigil Mechanism Policy will be investigated thoroughly and detailed update including action taken, if any, on the same will be presented to the Audit Committee and Statutory Auditors of the Company. There was one complaint received during the year and the same has been resolved.

Remuneration Policy

Nomination & Remuneration Policy ("Remuneration Policy") of the Company is designed to create a high-performance culture. It enables the Company to attract, retain and motivate Directors on the Board, Key Managerial Personnel and the Senior Management Officers. Our Business Model promotes customer centricity and requires employee mobility to address project needs. The Remuneration Policy supports such mobility through pay models that are at par with industry standards.

The Nomination & Remuneration Policy is in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. The Nomination & Remuneration Policy is also posted in the Investors section of the Companys website www.hil.in on the following link https://hil.in/investor-relations/policies/

Sexual Harassment Policy

Diversity and Inclusion is one of the major thrusts of your Company enabling an equal opportunity to all; it has been an endeavour of the Company to support women professionals through a safe, healthy and conducive working environment by creating and implementing proper policies to tackle issues relating to safe and appropriate working conditions. As per provisions of "The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013" the Company has framed a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto.

During the year under review, no complaint of sexual harassment was received by the Company and details as per Section 21 and 22 of the POSH Act are 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

The Company is having a robust process of identifying and monitoring of related party transactions. All related party transactions that were entered into during the financial year under review were on an arms length basis and were in the ordinary course of business. There were no materially significant related party transactions entered or transacted by the Company with Related Parties, Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.

In line with the provisions of Section 177 of the Companies Act, 2013 read with the Companies (Meetings of the Board and its Power) Rules, 2014, all Related Party Transactions are placed before the Audit Committee for review and approval, the Board and shareholders, wherever such approval is required as per the provisions of Section 188 of the Act, rules made thereunder, Regulation 23 of the Listing Regulations and applicable Accounting Standards. Prior omnibus approval is obtained for Related Party Transactions which are of repetitive nature and / or entered in the ordinary course of business and are at arms length.

All Related Party Transactions entered during the financial year 2020-21 were in ordinary course of business and at arms length basis. Your Company did not enter into Material Related Party Transactions, i.e. transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statement, during the year under review.

A summary statement of the transactions entered into with the related parties pursuant to the omnibus approval so granted are reviewed and approved by the Audit Committee and the Board of Directors on quarterly basis. The requisite details of the related party transactions entered into during the financial year are provided as Annexure (IV) to this report.

The Related Party Transaction Policy of the Company is available on the Companys website https://hil.in/investor-relations/ policies/

None of the Directors, other than to the extent of their shareholding, receipt of remuneration/ commission, has any pecuniary relationships or transactions vis--vis the Company and None of Directors are relatives to each other.

Other Policies

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

Dissemination of Material Events Policy.

Documents Preservation Policy.

Monitoring and Reporting of Trading by Insiders.

Code of Internal Procedures and Conduct for Regulating

Code of Practices and Procedures for Fair Disclosures.

Material Subsidiary Policy.

Internal Financial Controls with Reference to Financial Statements

Your Company has in place adequate internal control systems commensurate with the size of its operations. Internal control systems comprising of policies and procedures are designedto ensure sound management of your Companys operations, safekeeping of its assets, optimal utilisation of resources, reliability of its financial information and compliance. Clearly defined roles and responsibilities have been institutionalised. Systems, processes, and procedures are periodically reviewed and appropriately revised to strengthen them to mitigate emerging risks associated with the growing size and complexity of your Companys operations.

Auditors

Statutory Auditors

The Companys Statutory Auditors, B S R and Associates LLP, Chartered Accountants (ICAI Regn. No.-116231W/W-100024), were appointed as the Statutory Auditors of the Company for a period of 5 years i.e 70th Annual General Meeting (held on July 18, 2017) till the conclusion of the 75th Annual General Meeting to be held in 2022. Accordingly, BSR and Associates LLP, Chartered Accountants, Statutory Auditors of the Company will continue till the conclusion of 75th Annual General Meeting. In this regard, the Company has received a confirmation from the Auditors to the effect that their continuation as Statutory Auditors, would be in accordance with the provisions of Section 141 of the Companies Act, 2013

B S R & Associates LLP, Chartered Accountants (ICAI Regn. No. 116231W/W-100024) who are the statutory auditors of the Company has issued an unmodified Auditors Report (Standalone & Consolidated) for Financial Year ended March 31, 2021 and the Auditors have not reported any matter under Section 143 (12) of the Act, and therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

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 your Company as well as the periodical results of its review of the Companys operations as per an 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 were also presented periodically to the Audit Committee.

During the year under review, the 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, 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, 2022 at a remuneration of H 7 Lacs plus out of pocket reimbursements. 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 Annual General Meeting. 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.

The Cost Audit report for the financial year ended March 31, 2020 was duly filed with the Central Government within the due date and the Company has maintained the Cost Records/Accounts as required under Section 148 of the Companies Act, 2013.

During the year under review, the Cost 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.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013, Regulation 24A of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and rules framed thereunder, the Board of Directors, on recommendation of the Audit Committee, appointed M/s. P.S. Rao and Associates, Company Secretaries to undertake the secretarial audit of the Company. Company has received a certificate from the Secretarial Auditor, interalia, confirming that their appointment is within the limits laid down by the Act and rules made thereunder, is as per the term provided under the Act, 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, 2021 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 an audit for the Financial Year 2020-21 for all applicable Securities and Exchange Board of India ("SEBI") compliances as per circular dated February 8, 2019 issued by 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 and is forming part of the Corporate Governance Report.

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

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.

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, 2021.

Subsidiaries and Joint Ventures

The following is the group structure of your Company:

Sl No Legal name of the entity Relationship Country of incorporation and Date Full address
1 HIL LIMITED Holding Company India, Office No 1 & 2, Level 7, SLN Terminus,
2 HIL International GmbH Subsidiary (Wholly Owned Subsidiary) June 23, 1955 Germany, July 3, 2018 Gachibowli, Hyderabad Millenkamp 7-8, 48653 Coesfeld, Germany
3 Parador Holding Step Down Subsidiary (WOS to Germany, Millenkamp 7-8, 48653 Coesfeld, Germany
GmbH HIL International GmbH) June 20, 2016
4 Parador GmbH Step Down Subsidiary (WOS to Parador Holding GmbH) Germany, September 21, 2015 Millenkamp 7-8, 48653 Coesfeld, Germany
5 Parador Parkettwerke GmbH Step Down Subsidiary (WOS to Parador GmbH) Austria, April 10, 1998 Wiener Strasse 66, 7540 Gssing, Austria
6 Parador (Shanghai) Trading Co., Ltd. Equity Joint venture (50%) of Parador GmbH and (50%) Horgus Oriental Glamour Co., Ltd,. Republic of China, August 8, 2018 Room 1006, Floor 10, No, 233 Taicang Road, Huangpu District, Shanghai Municipality, the Peoples Republic of China

In compliance with the requirements of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 your Company has appointed Dr. Arvind Sahay, Independent Director as a Director on the Board of HIL International GmbH, Germany (wholly owned subsidiary). Dr. Arvind Sahay will hold office as a Director in HIL International GmbH, Germany upto March 31, 2022.

Supercor Industries Ltd

Your 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. Your 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 3 years. The Interim Board set up by the Nigerian Government is not responsive and your Company is awaiting to hear from the Board of Supercor Industries Limited for deciding further course of action.

In view of the above, your 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

The Consolidated Financial Statements has 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 will also place separate Audited accounts of its Subsidiaries on its website.

Employee Stock Options

The Company has two operative Employees Stock Option Schemes i.e HIL Limited Employees Stock Option Scheme, 2015 and HIL Limited Employee Stock Option Scheme, 2019, which provides for grant of Stock Options to eligible employees of the Company.

Nomination & Remuneration cum Compensation Committee of the Board of Directors, inter alia, administers and monitors the Employees Stock Option Scheme(s) of the Company in accordance with the Securities and Exchanges Board of India (Share Based Employee Benefits) Regulations, 2014 ("SEBI Regulations").

During the year there were no new options granted to the employees of the Company.

The details of Employee Stock Options pursuant to Section 62 of the Companies Act, 2013 read with Rules made thereunder and SEBI (Share Based Employee Benefits) Regulations, 2014 and erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are provided in website of the Company https://hil.in/investor-relations/2021-annual-report/ Certificate from M/s. B S R & Associates, LLP, Chartered Accountants, (ICAI Firm Registration Number: 116231W/W-100024), Statutory Auditors of the Company confirming that the scheme has been implemented in accordance with the SEBI Regulations will be placed at the forthcoming Annual General Meeting of the Company for inspection by the members.

Particulars of Employees

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in Annexure (VII) to this report.

Compliance with Secretarial Standards

During the year under review your Company has complied with the respective Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings, General Meetings and Dividend.

Human Capital and Industrial Relations

Your Company believes that the quality of its employees is the key to its continued growth and success. Hence, HIL is committed to providing necessary Human Resource development and training opportunities to equip employees with new skills to enable them to adapt to contemporary technological advancements. We practice and promote an open, fearless and transparent, value based culture in the organization. The recruitment process is aligned to attract the best talent available and diversity at workplace is another priority that has significant emphasis of the Company.

Your Companys management firmly believes that a stable and peaceful industrial relation is key to the success of your organization. Over the years, the management has made sincere and continued efforts for the development of an atmosphere of mutual trust, co-operation, confidence and respect, duly recognizing the rights of the workers. A robust labour law compliance mechanism is in place to help the organization run its businesses in the most ethical and efficient manner.

Your Companys employee engagement program – JOSH – makes learning activities fun by indulging in various programmes like festive celebrations, sports events, health care activities, cultural nights with family events, etc. to create an overall healthy work environment. We are committed to build an open and transparent culture, through which employees can provide feedback without any fear. The organization is committed to the welfare and career growth of its people.

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.

Business Responsibility Report

Regulation 34(2)(f) of the Listing Regulations mandates the inclusion of Business Responsibility Report ("BRR") as part of the Annual Report for top 500 listed companies which was thereafter amended to top 1000 listed companies with effect from December 26, 2019, based on market capitalization as on March 31 every year. In compliance with the Listing Regulations, BRR of your Company for the Financial Year 2020-21 is included in the Annual Report.

Your Company 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 rapid growth.

Significant and Material Orders Passed by the Regulators/Court

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.

Material Changes and Commitments

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, 2021 to which the financial statements relate and the date of signing of this report.

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

Change in the Nature of Business

There has been no change in the nature of business of the Company

Other Statutory Disclosures

Your Directors state that no disclosure or reporting is required with respect to the following items as there were no transactions related to these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issues of sweat equity shares.

3. Provision of money for purchase of its own shares by employees or by trustees for the benefit of employees.

Investor Education and Protection Fund (IEPF)

In terms of Section 123, 124 and 125 of the Companies Act, 2013, the unclaimed dividends and shares wherein the dividends are unclaimed for a period of seven consecutive years relating to the Final Dividend for the year 2012-13, have been transferred to the IEPF Fund/Suspense account respectively. The details of shares transferred is available in the website of the Company.

Further, as per the provisions of Section 125, the share(s) wherein the dividend is unclaimed for a period of consecutive seven (07) years will be transferred to the suspense account as prescribed by the IEPF Rules, therefore the shareholders whose dividends are unclaimed for consecutive seven years from 2012-13 (list of the shareholders along with the unclaimed dividend details are available on the website of the Company https://hil.in/investor-relations/unclaimed-divided-shares-due-to-transfer-to-iepf/ are requested to claim their unclaimed dividend at the earliest.

Shareholders are requested to ensure their dividends are encashed on time. In case of non-encashment of dividends, shareholders are advised to approach the Company or RTA to claim their unclaimed dividends.

Acknowledgements

Your 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. Your 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 your Company.