Hil Ltd Directors Report.

Dear Members

Your Directors take pleasure in presenting the 75th Annual Report along with Standalone and Consolidated Financial Statements for the year ended March 31, 2022. Your Company commits to a disciplined path of progression to redefine itself as a one stop end to end building solutions provider. On the business front Roofing Solutions business delivers highest Volume, Revenue and EBIDTA; the solution based approach driven by technical teams enables highest ever realisation levels in Building Solutions business and the Polymer Solutions business delivers 36% growth Y-o-Y for the second consecutive time. The European Flooring business produces consistent performance amidst severe head winds created by raw material availability and geo-political situation. Your Company has also decided to venture into a new business vertical of Construction Chemicals in the coming year, for which the test launches have already started.

Your Companys initiative of "OneHIL a well-knit family value, has paid back immensely, infusing passion amogst the employees, driving busineeses to achieve good market shares in domain products, generating new ideas for cost savings, improving liquidity, cost optimization, effective customer connects through digital initiatives, monitoring newer opportunities, lean & productive operations: all delivering huge engagement & value for stakeholders. Close monitoring of business segments on a daily basis brought further harmony and impetus in converting and achieving every possible opportunity.

Your Company operates in competitive markets and recognizes the underlying challenges and accordingly stays agile in aligning its strategies and objectives to maintain market leadership by introducing new and innovative products and services which are eco-friendly. Optimum use of Digital initiatives, business intelligence tools and heat maps enables businesses to monitor and focus on greener pastures and newer opportunities with customers in Tier 2 & Tier 3 cities. During all our business endeavors, your Company has continued to stay close to the communities, investing through its CSR budget by supporting initiatives and Covid medical care.

HIL believes that the biggest assets is its committed and passionate employees. Continuous endeavour to keep them safe during Covid pandemic, while proposing several people supported policies has been the prime focus. Corporate governance and ethical practices have been passionately driven with zero non-compliance across all locations and as a continuous process robust SOPs, work instructions have been modified to suit the purpose.

Amidst strong headwinds due to material unavailability / price volatility, sea freight explosion and a weak rural sentiments, your Company delivered the highest ever Profit Before Tax (PBT) overcoming all the challenges with grit and determination to succeed. Revenues remained buoyant with a good increase over previous year with stringent focus on new markets, expanding product base and getting the right product mix. Strategic market mapping and in-depth tabs on each region, ensured your Company on a growth trajectory and registered a 26% growth in India and 16% globally on its top line while maintaining its leadership position.

The severity of challenges was far more in the European context where PARADOR had faced huge scarcity of raw materials and doubling of key raw material costs. Other challenges like increase in energy costs and tripling of sea freight impacted the operations. Yet PARADOR registered growth in top line over last year. Our European team has taken determent effort towards augmenting multiple selling price escalations across product categories, entering long-term supply contracts with key dependable raw material suppliers, improving product mix and continuously working on cost base, which have all supported towards partially offsetting the impact of cost adversities. Further, towards the end of the year, the geopolitical crisis between Russia and Ukraine as well as the severe COVID spread in China have further impacted the availability of wood products, vinyl products, increased energy and freight costs. Relentless efforts are being made to mitigate these challenges too by innovative sourcing strategies to reduce dependency on Ukraine.

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, 2022:

Summary of Financial Results

(Rs Crore)

Particulars Standalone Consolidated
2021-22 2020-21* 2021-22 2020-21*
Total Income 2005.45 1596.45 3550.68 3066.19
Earnings Before Interest, Depreciation and Amortisation & Tax 306.63 260.26 421.85 428.09
Less : Interest 4.51 18.69 12.61 2784
Depreciation and Amortisation 53.81 49.18 116.30 108.97
Profit Before Tax and Exceptional items 248.31 192.39 292.94 291.28
Add/(Less): Exceptional items / Profit / Income from JV - - 2.18 1.14
Profit before tax from operations 248.31 192.39 295.12 292.42
Less : Taxes 62.48 49.57 84.68 7760
Profit for the year from operations 185.83 142.82 210.44 214.82
Profit before tax on sale of discontinued operations - 60.56 - 60.56

(Rs Crore)

Particulars Standalone Consolidated
2021-22 2020-21* 2021-22 2020-21*
Less: Taxes on profit on sale of discontinued operations - 15.64 - 15.64
Profit from sale of discontinued operation - 44.92 - 44.92
Total Profit before tax 248.31 252.95 295.12 352.98
Less: Total taxes 62.48 65.21 84.68 93.24
Total Profit for the year 185.83 18774 210.44 259.74
Other Comprehensive Income - net of tax (0.39) 0.08 (756) 9.14
Total Comprehensive Income for the year from operations 185.44 142.90 202.88 223.96
Total Comprehensive Income for the year 185.44 18782 202.88 268.88
Basic Earnings Per Share (H) 24773 250.74 280.54 346.89
Diluted Earnings Per Share (H) 246.12 249.89 278.72 345.72

REVENUE

Your Company achieved a net revenue from operations on standalone basis at RS 1973.48 Crore as against RS 1565.89 Crore in the previous year, an increase of 26% and on consolidated basis registered a net revenue from operation at RS 3520.24 Crore against RS 3043.57 Crore in the previous year recording a growth of 16%. This trajectory is expected to continue in the coming years as well. Various aggressive cost saving Initiatives and R&D interventions along with lean operational models have helped us to redefine our cost base thereby achieving better cost optimization; augmenting the growth of your Company in coming years.

Companys Lead Generation & Management Portal, a one stop digital solution for all sales leads, augments leads from one business unit to the other, which in turn help the Company to service the customers at large across various class of cities. Further, enhancement of E-business portals and digital customer connects have made your company far more approachable and customer focused in this financial year.

INTEREST & LOANS

During the year under review, interest cost significantly reduced to Rs 4.51 Crore on a standalone basis as against RS 18.69 Crore 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 2021-22 stood at RS 12.61 Crore as against RS 2784 Crore in the previous year.

Your Company has repaid during the year Rs 80.17 Crore to banks at standalone level in India and RS 124.54 Crore to banks at consolidated level.The Debt Equity ratio on consolidated basis stood at 0.25 times as of March 31, 2022 against 0.41 times as of March 31, 2021.

PROFIT BEFORE TAX

During the year under review, your Company registered a standalone Profit BeforeTax (PBT) from operations of RS 248.31 Crore as against RS 191.61 Crore in the previous year, recording a growth of 30%. This could be achieved as a result of financial discipline, detailed planning and sharper focus on initiatives to boost market leadership, improve Net Sales Realizations and adopting solution / market specific models. These timely actions have benefited your

Company to deliver the best performing year in the history of HIL.

Profit before tax on a consolidated basis for the year 2021-22 stood at RS 295.12 Crore as against RS 291.64 Crore in the previous year, recording marginal growth.

NET WORTH

On a consolidated basis, the Net Worth of your Company as at March 31, 2022 stood at RS 1166.43 Crore as against RS 995.27 Crore in the previous year.

The Consolidated earnings per share (basic) for the year ended March 31, 2022 stood at RS 280.54 per share as against RS 286.12 per share for the year ended March 31, 2021 and the book value per share as at March 31, 2022 was at RS 1552/- as against RS 1328/- as on March 31, 2021.

CREDIT RATING

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

Sl Agency No 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 RS 20/- per equity share of RS 10/- each (200% of the paid-up value). Your Directors are pleased to recommend a final dividend of RS 25/- per equity share of RS 10/- each (250% of the paid-up value) and an additional final dividend of RS 20/- per equity share of RS 10/- each (200% of the paid-up value) to commemorate the celebration of Platinum Jubilee on completion of Seventy Five (75) years of incorporation for your consideration and approval at the ensuing 75th Annual General Meeting of the Company.

With the proposed final dividends, the total dividend for the year 2021-22 works out to be H 65/- per equity share (650% of the paid- up value) as against the total dividend of H 40/- per equity share (400% of the paid-up value) declared in the previous year.

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

The total dividend for the financial year is H 48.84 Crore and the Company has transferred RS 10.00 Crore 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 23, 2022 to Friday, July 29, 2022, both days inclusive, for determining the entitlement of the shareholders for the final dividend for the financial year ended March 31, 2022 and for annual book closure.

The Record Date for payment of final dividend is Friday, July 22, 2022 for determining the entitlement of members for final dividend for the financial year 2021-22.

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 paid-up Equity Share Capital as on March 31, 2022 was H 754.11 Lacs. During the year under review, the Company has issued 21360 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 National Stock Exchange India Limited and BSE Limited. The annual listing fees for the year 2021-22 has been paid to these exchanges.

During the year 2022, 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

Your Company has with grit and resilience overcome the challenges during the last year however, while the committed workforce has well aligned itself with the new business norms, the key focus of the Company remains to be Employee Health and Safety while ensuring profitable growth.

Your Company institutionalised "Six Sigma" "Lean Management Systems" "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 registering 1572 ideas from them. This platform is extensively utilized to harness employee involvement towards new idea generation and cost reduction.

Roofing Solution

Your Company has enhanced its market leadership position in this business backed by its loyal customers and retailers. Along with your Companys strong brand presence across rural India and focus on new dealer/sub-dealer recruitment and engagement activities, Digital Connect and ?Cash is King approach has yielded a good outcome for the Company and helped to boost sales while improving net sales realizations.

To cater to the rural demand in the first quarter, we focused on inventory & logistics planning and worked out aggressive dealer wise targets, which helped gain exceptional market share in Q1. Despite the pandemic challenges, the last leg connects with our channel partners backed by firm commitment and passion of all our employees across functions have made FY22 the most successful year in the history of your company.

Our aggressive counter acquisition drive saw us achieve 1000 new counters during the year, enabling the roofing business to register an impressive double-digit growth in volume terms over the previous year. Your Company is confident to further consolidate its leadership position in this industry.

"Charminar" and "Charminar Fortune" brands continue to enjoy the trust of the customers backed by your Companys enhanced Customer-centric approach, unparalleled quality, enhanced after sales customer service, deep routed supply chain network and widely spread depots and dealer network. This has helped the Company to mitigate the headwinds faced in the industry with ease.

Building Solutions

Building Solutions business consists of Wet Walling and Dry Walling solutions, which cater to various requirements of building industries/commercial spaces/Covid centers/ Labour hutments and infrastructure segments. Due to the pandemic and lockdown, overall demand was low during H1, but as the construction activities picked up from third quarter onwards - our all-out efforts resulted in improved Business performance during the second half of the year.

In order to get better realization for your Building Solutions products, we cherry-picked customers and markets closer to the manufacturing plants and aggressively focused on product specifications through our technical sales team to gain prestigious and high-value projects in the infrastructure and health care segments with far better realizations.

In FY22, your Company concentrated on growing the building solutions business by best utilization of available capacity. Your Company continued its approach 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 utilization in the previous year, the Company has focused on process efficiency and lean management principles in these factories to optimize the costs further.

Polymer Solutions

This vertical consists of Pipes & Fittings and Wall Putty marketed under the brand name "Birla HIL. During FY22, Polymer Solutions business grew 36% over FY21 by entering new geographies by enhancing the team and its capabilities, selective brand spend, expansion of distribution network, expansion of product portfolio and through forging of strong connect with influencers and customers.

Birla HIL Pipes

Birla HIL Pipes offers a wide range of plumbing solutions, including cPVC, uPVC, Column Pipes, SWR, Pressure & UGD Pipes and Fittings and Water Tanks confirming with related IS or ASTM specifications. These are ideal for household, industrial and commercial applications producing eco-friendly, anti-microbial, and cost-effective suitable solutions for carrying drinking water. Your company has a state of the art DSIR-approved R&D facility where in- house recipes are designed and new innovations to improve quality are undertaken. Birla HIL Pipes and Fittings have a unique TrueFit™ technology that offers 100% leak-proof joints and enhances the value propositions for consumers.

During FY22, Birla HIL Pipes showed a healthy growth of 52% over FY21, outperforming the industry growth. Your company has grown ~6X in last 4 years in the Pipes & Fittings segment. This was enabled by strategic focus on Tier 2 and Tier 3 towns in retail segment together with focused approach on technical sales in B2B segment. In addition, in this financial year, as part of our continued range expansion drive, we have added ~200 new SKUs to our portfolio.

Birla HIL Putty

Birla HIL Putty now has a pan-India presence, and we are continuously working and adding new channel partners to improve our presence in tier 2 and tier 3 towns. The expansion helped us grow by ~38% over the last Financial Year. With superior quality, Birla HIL putty has created a strong and loyal customer base. We have added Gypsum Plaster and Waterproof Putty to our product portfolio to cater to our increased customer demand.

Birla HIL Wall Putty made with cutting-edge "TRUE COLOUR" technology and is effective on all types of cementitious surfaces. Pure white in colour, its strong adhesive properties ensures a powerful bond between the base and the paint.

Flooring Solutions

Parador - a leading international premium brand for flooring Solutions with its "Made in Germany" & "Made in Austria" quality products - a perfect blend of design and technology. Paradors Innovative and sustainable products make it highly complementary to the existing product portfolio, which enables the Company to market its widened product range to more than 80 countries across the globe.

Introduction of E-business by augmenting its "Online Brand Store" and focus on "DIY Kits" were key success factors to positively impact Parador Germany business.

PARADOR is well aware of the pivotal role the flooring has in enhancing the aesthetic appeal of virtually all utilitarian structures, including residential, industrial and commercial buildings. Among the flooring types, wood floors are considered environmentally friendly, durable, and easy to clean. Changing lifestyles, a growing urban population, a rise in spending on home renovation and enhancement, and increasing consumer demand for eco-friendly materials are some of the key growth drivers augmenting demand for wood flooring. With a refinancing, housing, and remodeling trends remaining strong, the prospects for wood sales are bright. The generally positive outlook and stable demand for wood flooring is also spurred by advances in material and technology, which include water-resistant products and digital printing. In days to come preference for green products is expected to kindle consumer interest and re-energize demand patterns.

Amid the COVID-19 crisis, the global market for Wood Flooring estimated at US$43.2 Billion in the year 2020, is projected to reach a revised size of US$55.8 Billion by 2026, growing at a CAGR of 4.3% over the analysis period. Over the years, laminate flooring has gained popularity as a flooring material. The laminate flooring has been largely used owing to their developments in design and printing technology and the launch of unique product designs by manufacturers, fueling global demand for laminate flooring. Vinyl flooring is a type of resilient and robust flooring, which is significantly being used in construction applications associated with the residential and commercial projects.

The European floor covering market is expected to witness a strong rate during the forecast period. Some of the major factors attributing to the demand for flooring products in this region are increasing disposable income, growth in the residential real estate in the region, and rising demand for luxury flooring options. There is a growing trend of spending on the styling and interiors of the living spaces among consumers, leading them to spend more on home furnishings such as carpets, rugs, and other floor coverings that add to the aesthetic appeal of interiors. Europe is an attractive region of the flooring market, despite strict regulations on products such as PVC and other laminated flooring coverings that cause VOC emissions.

During the year Parador has reported a Net Revenue of RS 154794 Crore as against RS 1479.34 Crore in previous year recording a growth of 5%. The Profit Before Tax, which was hugely impacted due to extra-ordinary increase in costs in raw materials, for the year stood at H 46.72 Crore as against RS 100.17 Crore in previous year resulting to a de-growth of 53%. As the transient headwinds subside, Parador will return to its profitable growth model.

Awards & Recognition

1. Twin awards: Most Trusted Brand & Brand of the Year Water Technologies- Pipes for Birla HIL Pipes at 6th Realty+ INEX Awards 2022, realty industry awards and conclave. These Awards recognized Birla HIL Pipes for its ?exemplary performance and achievement and ?contribution to making a positive difference in the Indian real estate industry. Realty+ is the oldest and most respected real estate publication in the country. The event saw Indian and international architects and building product brand leaders joining to discuss the way forward for the design and construction industry.

2. The Economic Times Best Brands in Building Materials & Fittings Industry for 2021 - Birla HIL Pipes & Putty was awarded as Best Brands in building materials & fittings for 2021. The Economic Times Best Brand is a research-based initiative that endeavors to highlight brands that have gained customers confidence, maintained their positions over a period, and sailed successfully through dynamic market challenges. Birla HILs innovative product offerings and the legacy of CK Birla Group make it the best brand that is built around trust and its customer-centric approach.

3. Birla HIL Putty was adjudged as Indias Most Trusted for 2022. This award from Team Marksmen recognizes the trust and quality standards instituted at Birla HIL Putty. Birla HIL Putty is constantly setting high standards. Our cutting-edge True Colour Technology enables true reflection of the colours of selected paint shade. This innovative & technically superior product is behind the trust of our customers.

4. IBC Infomedia recognized Birla HIL Pipes as Indias Most Trusted Brand 2021. Awarded on the basis of extensive market research, expert analysis and an attribute-based qualitative research approach, it is a distinctive recognition for your company.

Great Place to Work, 2022

Your Company has been certified as a Great Place to Work for the fourth time in a row for 2022-23. Trust lies at the heart of building a great workplace culture. This philosophy is deeply embedded in HILs culture, which is evident in the significant difference we have made in the trust index score; from 86 last year to 94 this year, a giant leap of 8 points. This coveted recognition is an affirmation of our continuous efforts in nurturing and building a High-Trust and High- Performance culture at HIL. We have also been recognised as Indias Best Workplaces in Manufacturing 2022 - Top 30, Best workplaces in Cement and Building Materials Industry 2021; and chosen as Indias Best Companies to Work for 2022, ranked at 57 All this goes towards employees grit, determination and unwavering commitment towards your organisation to deliver stupendous results.

Economic Times - Asias Most Promising Leader of the Year

Mr. Dhirup Roy Choudhary, Managing Director and CEO of HIL Limited was conferred with the prestigious Most Promising Business Leaders of Asia Award 2021-22 by The Economic Times, for the fourth consecutive year 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.

Super brand Award

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

Top 100 Top-Innovator

The TOP 100 honours the most innovative companies in the German SME sector. TOP 100 has been on the market for over 25 years and is the only competition that honours innovation management and is therefore the most important award for innovative companies in the SME sector.

Only creative companies with visions and a sense for the new make it into the ranks of the 100 most innovative medium-sized companies in Germany. Parador has already been included for the 5th time and has been awarded the "Top 100" seal of quality for its sophisticated innovation management.

Good Design Award 2022

The Good Design Awards are one of the oldest international design awards and have been promoting excellence in design and innovation since 1958. Each year, the programme attracts new and innovative design projects from around the world and recognises the best in all areas of design, architecture, engineering, research and social innovation. Created by Ray and Charles Eames, the Good Design Awards are presented annually by the Chicago Athenaeum and an international jury of experts and are among the most prestigious and distinguished design awards in the world.

After the Open Frameworks Design Edition, Parador has now received this award a second time, now for the One Ground Design Edition floors.

Annual Multimedia Award for Parador Online Brand Store The Parador Online Brand Store, which has been successfully combining the digital and analogue worlds of the Coesfeld-based premium manufacturer of products for floor, wall and ceiling design since June last year, has now been awarded "Silver" at the Annual Multimedia Award 2022. In the E-Commerce & Onlineshop category, Paradors Online Brand Store was able to win a silver trophy at the Annual Multimedia Award 2022 and thus join a gallery of renowned national and international award winners. A total of 103 projects were recognised for their digital excellence this year. "Building a clever brand identity and communicating it credibly to the target group is how projects score points with the jury this year," reads the official announcement on Paradors successful participation.

Reddot winner 2021

After the products of our "One Ground Design Edition" already received a Red Dot Award for product design in March, the accompanying campaign has now received the Red Dot Award: Brands & Communication Design 2021. We are proud of this honour and very pleased!

Online award for e-commerce-concept

Our Online Brand Store, which was launched in June last year, has now been awarded 3rd place with the Deutscher Preis fur Online- Kommunikation (DPOK) in the category "Building & Real Estate"

Life & Living Award 2022 for Parador The news channel NTV and the German Institute for Service Quality have presented the Life & Living Awards 2022. In the "Wood Flooring" category, Parador is one of this years award winners, as has now been announced. CSO Stefan Kukenhohner accepted the award.

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. CK Birla (DIN: 00118473) Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The brief details required to be disclosed in accordance with Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, Companies Act, 2013 and Secretarial Standards is included in the notice of the ensuing Annual General Meeting forming part of this Annual Report.

Mr. Dhirup Roy Choudhary, Managing Director and CEO was first appointed on January 16, 2017 for a term of five (5) years. He was re-appointed effective January 16, 2022 consequent to the expiry of his initial term on January 15, 2022 by the Board at its meeting held on December 06, 2022 for another term of five (5) years. His re-appointment and remuneration continued on the same terms as that of his initial tenure which expired on January 15, 2022.

Further the Nomination and Remuneration Committee at its meeting held on May 12, 2015 approved and recommended the Employee Stock Option Scheme 2015 to the Board and the Board at its meeting held on May 12, 2015 recommended the said Scheme for Members approval and the Members at their meeting held on July 30, 2015 approved the said Scheme. The Scheme was made applicable to the eligible employees and Mr. Dhirup Roy Choudhary, Managing Director and CEO was one of the eligible employees subject to the terms and conditions of the Scheme. Consequent to the approval of the ESOPs Scheme by the Members at their meeting Mr. Dhirup Roy Choudhary, Managing Director and CEO, certain options vested in Mr. Dhirup Roy Choudhary, Managing Director and CEO and were due for grant in July 2021.

Further, as per the provisions of Section 197 and other applicable provisions of the Companies Act, 2013 ("the Act"), read with Schedule V thereof and the Rules made thereunder, the maximum managerial remuneration payable to the managing director in respect of any financial year may exceed 5% of the net profits of the Company, calculated as per Section 198 of the Act, provided the same is approved by the members of the Company by way of a special resolution. For the purpose of assessing the proportion of the remuneration to the net profits of the Company, all elements of remuneration package such as salary, benefits, bonuses, stock option, pension, perquisites etc. are taken into consideration.

Pursuant to the approval of the Nomination and Remuneration Committee, from time to time, Mr. Dhirup Roy Choudhary, Managing Director and CEO of the Company (Director Identification Number: 07707322), has been granted Stock Options ("Options") - under the HIL Limited Employee Stock Option Scheme 2015" ("ESOP 2015") as a part of his compensation package. The details of these grants have been appropriately disclosed in the Annual Reports of the Company. The perquisite value of the Options, exercised by Mr. Dhirup Roy Choudhary during any financial year forms part of his total remuneration. The perquisite value is the differential value between the fair market price of shares on the date of exercise of Options and the exercise price. The perquisite value is directly linked to the fair market value of the shares of the Company on the date of exercise of Options. During the financial year 2021-22, as per vesting schedule under ESOP Scheme 2015, certain number of options have vested in him. These options were exercised and allotted to him on November 01, 2021 by the Nomination and Remuneration Committee within the meaning of the subject ESOP Scheme as well as the respective Board approvals. Taking into account the perquisite value which gets added to his remuneration, the total managerial remuneration payable to him exceeds 5% of the net profits of the Company purely due to inclusion of the perquisite value of options exercised by him during the year 2021-22 and no cash pay-out has been made to him. His cash remuneration excluding the perquisite value arising out of ESOPs is well within the prescribed limits under section 197 of the Companies Act, 2013.

In view of the above, based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors of the Company at its meeting held on May 06, 2022, approved and accordingly recommends to the members an increase in the managerial remuneration limit in excess of 5% of the net profits of the Company (computed in the manner as laid down in Section 198 of the Act) thereby seeking Members consent to ratify the excess amount of H 422.07 Lacs paid to Mr. Dhirup Roy Choudhary, Managing Director and CEO during the year 2021-22. The Board of Directors recommends the proposal and the resolution for approval of members of the Company, as set out at Item No. 5 & 6 of the Notice.

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

Sl Name of the No Person Designation Remarks
1 Mr. Dhirup Roy Choudhary Managing Director & CEO Ongoing
2 Mr. KR Veerappan Chief Financial Officer Resigned *
3 Mr. Mahesh Thakar Company Secretary & Head Legal Ongoing

*He ceased to be CFO of the Company on close of working hours of May 10, 2022.

There were no other changes in the Key Managerial Personnel of the Company and the Company is in compliance with the required provisions of Section 203 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 i ncluding 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 Obligations & Disclosure Requirements) Regulations, 2015 is forming part of the Corporate Governance 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 Five (5) 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 COMMITTEE

Nomination and Remuneration 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 three (03) meetings of the Committee were held, the details of the composition of the Nomination and Remuneration 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 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 is conducted.

Structured forms covering evaluation of Board, Committees of the Board, Chairperson, Independent Directors and non-independent directors are devised for evaluation by all the Directors and Directors rate against various criteria such as composition of Board, receipt of regular inputs and information, functioning, performance and structure of Board Committees, skill set, knowledge and expertise of directors, preparation and contribution at Board meetings, leadership etc.

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

Further, as per the SEBI (Listing Obligations & 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

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 RS 290.10 Lacs and the Company has spent an actual of RS 291.15 Lacs on CSR activities in the areas of educations, preventive healthcare, supporting tribal community with education and vocational training and safety related initiatives.

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 voluntarily 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 Management 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 continuous 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 2021-22 can be accessed through the web link on the Companys website https://hil.in/investor-relations/2022-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 31,2022 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, 2022.

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, 2022 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 sound Corporate Governance and best corporate practices. The report on Corporate Governance for the year ended March 31, 2022 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-100024] 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 and 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 Obligations and Disclosure Requirements) Regulations, 2015 and the same provided in the Corporate Governance Report. 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/

PREVENTION OF SEXUAL HARASSMENT POLICY

Diversity and Inclusion is one of the major thrusts of your Company this year 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. 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 The Company regularly conducts necessary awareness programs
sexual harassment carried out 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 2021-22 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-a-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 the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same are available on the website of the Company https://hil.in/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 designed to 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, BSR & Associates LLP Chartered Accountants (ICAI Regn. No.-116231W/W-100024), were appointed as the Statutory Auditors of the Company for a period of five years i.e. from the conclusion of 70th Annual General Meeting held on July 18, 2017 till the conclusion of the 75th Annual General Meeting to be held in 2022. Accordingly, the term of M/s. BSR &

Associates LLP Chartered Accountants, Statutory Auditors of the Company will come to end on conclusion of ensuing 75th AGM of the Company to be held on July 29, 2022.

In view of the above, it is proposed to appoint M/s. B S R and Co, Chartered Accountants (FRN - 128510W), as Statutory Auditors of the Company under the provisions of section 139 and 142 of the Companies Act, 2013 read with Rules made thereunder. The Company received their consent along with a certificate confirming that they have not attracted any disqualifications as prescribed under the Companies Act, 2013 and the Chartered Accountant Act, 1949 read with rules made thereunder. The Audit Committee at its meeting held on May 6, 2022, reviewed the credentials of M/s. B S R and Co, Chartered Accountants (FRN - 128510W) and recommended for their appointment; accordingly, the Board at its meeting held on May 6, 2022 considered the recommendations of the Audit Committee and approved appointment of M/s. B S R and Co, Chartered Accountants (FRN - 128510W) as statutory auditors of the Company under the provisions of section 139 and 142 of the Companies Act, 2013 read with Rules made thereunder for a term of five years i.e. from the conclusion of 75th Annual General Meeting of the Company till the conclusion of 80th Annual General Meeting of the Company to be held in year 2027, at such terms and conditions as may be agreed between the Board and the Auditors including the remuneration of RS 93.00 Lacs (Rupees Ninety Three Lacs only) (excluding applicable taxes) and in addition the agreed remuneration actual out-of pocket expenses incurred by them for the purpose of audit and the applicable taxes shall be reimbursed.

It is further informed that the Board recommended the appointment of M/s. B S R and Co, Chartered Accountants (FRN - 128510W) for approval of the members by way of Ordinary Resolution as set out under the item No. 4 of the notice annexed with this annual report in terms of the provisions of section 139 and 142 of the Companies Act, 2013 read with Rules made thereunder.

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) Financial Year ended March 31, 2022 and during the year, 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 approved internal audit plan duly approved by the Audit Committee. The in-house internal audit team works in tandem with M/s. Ernst and Young, LLP whose professional services have been availed by the Company to audit specific locations and processes as per the Internal Audit plan approved by the Audit Committee. Together they provide a robust framework.

The recommendations of the internal audit teams on improvements in the operating procedures and control systems for strengthening the operating procedures 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 31st March 2023 at a remuneration of H 8.00 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 AGM. The Cost Auditor has certified that their appointment is within the limits as prescribed under Section 141(3)(g) of the Act and that they are not disqualified from such appointment within the meaning of the said Act

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013, Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and rules framed thereunder, the Board of Directors, on recommendation of the Audit Committee, appointed M/s. PS. Rao and Associates, Company Secretaries to undertake the secretarial audit of the Company. Pursuant to Section 139 and 141 of the Act and relevant Rules prescribed thereunder, the 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. PS. Rao & Associates, Company Secretaries for the financial year ended March 31, 2022 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 2021-22 for all applicable Securities and Exchange Board of India ("SEBI") compliances as per circular dated February 08, 2019 issued by the SEBI. The Annual Secretarial Compliance Report issued by M/s. PS. Rao & Associates, Company Secretaries has been submitted to the Stock Exchanges within the prescribed time limit.

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

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of Loans, Guarantees /Security provided and Investments made during the Financial Year ended March 31, 2022 is given in compliance with the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 and the same is provided in the notes to financial statements.

DEPOSITS

The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 and as such, no amount of principal or interest was outstanding as on March 31, 2022.

SUBSIDIARIES AND JOINT VENTURES

The following is the group structure of your Company:

S. Legal name of the entity No. Relationship Country of incorporation and Date Full address
1 HIL LIMITED Holding Company India, 23.06.1955 Office No 1 & 2, Level 7 SLN Terminus, Gachibowli, Hyderabad, Telangana - 500032
2 HIL International GmbH Subsidiary (Wholly Owned Subsidiary) Germany, 03.072018 Millenkamp 7-8, 48653 Coesfeld, Germany
3 Parador Holding GmbH Step Down Subsidiary (WOS to HIL International GmbH) Germany, 20.06.2016 Millenkamp 7-8, 48653 Coesfeld, Germany
4 Parador GmbH Step Down Subsidiary (WOS to Parador Holding GmbH) Germany, 21.09.2015 Millenkamp 7-8, 48653 Coesfeld, Germany
5 Parador Parkettwerke GmbH Step Down Subsidiary (WOS to Parador GmbH) Austria, 10.04.1998 Wiener Strasse 66, 7540 Gussing, Austria
6 Parador (Shanghai) Trading Co., Ltd. Equity Joint venture (50%) of Parador GmbH and (50%) Horgus Oriental Glamour Co., Ltd,. Republic of China, 08.08.2018 Room 1006, Floor 10, No, 233 Taicang Road, Huangpu District, Shanghai Municipality, the Peoples Republic of China

In compliance with the requirements of SEBI (Listing Obligations 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).

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 three 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.

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 Meeting and General Meetings.

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.

The 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 2021-22 is included in the Annual Report as Annexure (IX).

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.

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 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, as amended from time to time ("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 as Annexure (X)

Certificate from M/s. PS. Rao & Associates, Company Secretaries, Secretarial 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.

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, 2022 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)

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

In line with the aforesaid provisions, during the year, unclaimed interim dividend declared for the FY 2014-15 & unclaimed final dividend declared for the FY 2013-14 along with the underlying shares on which dividend has not been claimed for seven consecutive years have been transferred to IEPF.

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

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.

On behalf of the Board of Directors
CK Birla
Place: New Delhi Chairman
Date: May 06, 2022 (DIN No. 00118473)