Huhtamaki India Ltd Directors Report.

Your Directors have pleasure in presenting the 72nd Annual Report along with the Audited Statements of Accounts for the year ended December 31, 2021.

FINANCIAL HIGHLIGHTS:

Your Companys financial performance during the year was as under:

(Rs. in million)

Particulars 2021 2020
Net Sales 25708.6 24,188.0
Profit/(Loss) before Exceptional items & before tax (5.9) 1,175.9
Exceptional items - (Expenses) 309.8 0.0
Profit/(Loss) after Exceptional items & before tax (315.7) 1,175.9
Less: Provision for Current Tax (58.2) 221.9
Provision for Deferred Tax (30.6) 5.9
Profit/(Loss) for the year (226.9) 959.9
Opening balance of Retained Earnings 5,881.4 5,205.7
Other Comprehensive Income/(Loss) for the year (24.4) (57.6)
Dividend on Equity Shares for the year 226.6 226.6
Closing balance of Retained Earnings 5,403.5 5,881.4

PERFORMANCE:

The Companys performance was adversely affected due to the unprecedented increase in raw material prices on back of the world-wide inflationary commodity cycle. The dynamic cost and volatile demand situation made reliability of forecast very challenging. Higher Ocean freight rates from mid of 2021 and erratic vessel/container schedule affected exports. The impact of the Covid pandemic, consumption which is yet to fully recover and reach pre Covid levels, has put pressure on volumes, pricing & product mix. Further in the third quarter, your Company rolled out a Voluntary Retirement Scheme (VRS) for employees at its Thane Plant, which was accepted by 102 employees and involved a (one time) pay-out cost of Rs. 309.8 million,

The Company registered net sales of Rs. 25,708.6 million, as compared to Rs. 24,188.0 million for the previous year, with a significant drop in Profit before Exceptional Items and Tax which stood at a Loss of Rs. (5.9) million as compared to Rs. 1175.9 million for the previous year.

The Company has embarked on Project Parivartan (Transformation Project) which is focusing on cost transformation, stronger price realisation and better quality of growth to turnaround its performance. The Project focuses on improving efficiency of manufacturing network, labour productivity and reduce wastages from operations to boost the long-term competitiveness of the Company.

DIVIDEND:

Your Directors are pleased to recommend a dividend of Re. 1/- (Rupee One only) per equity share (50%) having face value of Rs. 2/- each, for the year ended December 31, 2021. The said dividend will absorb an amount of Rs. 75.5 million.

The Dividend Distribution Policy of the Company is annexed to this Report as Annexure 1.

FIXED DEPOSITS:

The Company did not invite or accept deposits covered under Chapter V of the Companies Act, 2013 and there are no deposits outstanding with the Company.

BORROWINGS:

The Company continued to optimise borrowings during the year by focusing on cash flows and working capital management. During the year, the Company raised bank debt of Rs. 250 million, being the second and final tranche of the Rs. 500 million agreement signed in 2020 for Term Loan. The Company also availed Working Capital Demand Loan and Commercial Papers for funding Working Capital. The total increase in Borrowings is Rs. 1009.2 million primarily due to increase in raw material cost on back of the inflationary Commodity cycle.

In 2020, your Company had entered into a related party transaction with Huhtamaki Finance Company V BV. Netherlands, to raise finance through External Commercial Borrowings (ECB) to the extent of Rs. 2,000 million at an interest rate of 6.5%, payable annually. Second and final tranche of the ECB of Rs. 1,000 million was raised during the year with the objective of reducing cost of debt and for general corporate purposes.

The said ECB is denominated in Rupee terms and is in accordance with the rules laid down under the Companies Act, SEBI and RBI Regulations and in compliance with the test for arms-length pricing.

SUBSIDIARY COMPANIES AND FINANCIAL STATEMENTS:

Your Company does not have any subsidiaries and hence details to be provided in Form AOC-1 are not required to be given.

In accordance with the provisions of Section 136 of the Companies Act, 2013, the audited financial statements, and related information of the Company are available on the website of the Company - www.flexibles.huhtamaki.in. These documents will be made available to the Members for inspection at the Registered Office of the Company on all working days between 10.00 a.m. to 12.00 noon upto the date of 72nd Annual General Meeting. Members may please note that presently our offices are partially open due to the covid situation and adoption of work from home option.

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

Information pursuant to the provisions of Section 134 of the Companies Act, 2013 and the rules framed thereunder, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, forms part of this Report and is given at Annexure 2.

CORPORATE GOVERNANCE REPORT:

The Report on Corporate Governance and the Certificate of the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in Para C of Schedule V of the Listing Regulations, 2015, are enclosed as a separate section and forms part of this Report. A declaration signed by the Director in regard to compliance with the Code of Conduct by the members of the Board and Senior Management Personnel also forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed review of the operations, performance and future outlook of the Company and its businesses are given in the Management Discussion and Analysis and forms a part of this Report.

DIRECTORS & KEY MANAGERIAL PERSONNEL:

CHANGES IN DIRECTORATE AND KEY MANAGERIAL PERSONNEL:

Dr Arup Basu, Non-Executive Director of the Company stepped down from the above position with effect from May 12, 2021.

Mr Ranjeev Lodha, Executive Director and Chief Financial Officer (CFO), sought early retirement and resigned from the services of the Company with effect from September30, 2021. Mr Jagdish Agarwal has been appointed as Chief Financial Officer (CFO) and designated as Key Managerial Personnel (KMP) of the Company with effect from January 5, 2022.

Mr Sudip Mall stepped down from the position of Managing Director of the Company with effect from November 30,2021.

Mr Marco Hilty, President - Flexible Business and member of Global Executive Team" has been appointed as Additional Director (Non-Executive) of the Company with effect from September 24, 2021, subject to approval of members at ensuing Annual General Meeting, liable to retire by rotation.

Mr Stefan Lotz, VP - Finance, Flexible Packaging has been appointed as Additional Director (Non-Executive) of the Company with effect from February 18, 2022, subject to approval of members at the ensuing Annual General Meeting, liable to retire by rotation.

The details of the proposed appointment/re-appointment of Directors are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the 72nd Annual General Meeting (AGM) of your Company.

DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received necessary declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and SEBI Listing Regulations, 2015 and the same has been noted by the Board of Directors.

The Board of Directors are of the opinion that Mr Murali Sivaraman, Ms Seema Modi and Mr Ashok Kumar Barat, Independent Directors of the Company who were appointed on January 1, 2019, January 1, 2020 and April 1, 2020 respectively, have the integrity, expertise & experience and have ascertained that the said Directors have cleared the proficiency self-assessment test conducted by the institute notified under sub-section (1) of section 150 of the Act / were exempted from appearing for the proficiency self-assessment test.

EVALUATION OF PERFORMANCE OF BOARD, ITS COMMITTEES AND OF DIRECTORS:

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, 2015 the Board of Directors has undertaken an annual evaluation of its own performance, its various Committees and individual directors. The manner in which the performance evaluation has been carried out has been given in detail in the Corporate Governance Report, annexed to this Report.

The Company has in place a policy for appointment and remuneration of Directors and Key Managerial Personnel, encompassing the criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Act, and Part D of Schedule II of the Listing Regulations, appended as Annexure 3 to the Directors Report. The above policy along with the criteria for selection is available on the Companys website at https://www.huhtamaki.com/en-in/flexible- packaging/investors/corporate-governance-and-policies/ policies/

BUSINESS RESPONSIBILITY REPORT:

As per Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (Listing Regulations, 2015) Business Responsibility Report forms part of this Report.

In line with the green initiative, Business Responsibility Report of the Company for the year ended December 31,2021 is available on the website of the Company https://www. huhtamaki.com/en-in/flexible-packaging/investors/financials/ annual-reports/ and forms part of this Report and is kept at the registered office of the Company for inspection. A copy of the aforesaid report shall be made available to such shareholders who are desirous of and interested in perusing them, upon receipt of a written request from them.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:

Your Company has put in place a Familiarisation Programme for Independent Directors to familiarise them with their roles, rights, responsibilities, nature of the Industry, Companys strategy, business plan, operations, markets, products, etc.

The details of the Companys Familiarisation Programme is available on the Companys website - web link: https:// www.huhtamaki.com/globalassets/flexible-packaging/india/ investors-india/news--announcements/2021/details-of- familiarisation-programe-2021.pdf

MEETINGS OF THE BOARD:

During the year, eleven meetings of the Board of Directors were held, particulars of attendance of directors at the said meetings are given in the report on Corporate Governance Report, which forms part of this Report.

AUDITORS AND AUDITORS REPORT:

The Auditors Report to the members on the accounts of the Company for the year ended 31st December 2021 is a part of the Annual Report. The said Audit Report does not contain any qualification, reservation, or adverse remark, except managerial remuneration paid to the erstwhile Managing

Director and the Executive Director & Chief Financial Officer of the Company amounting to Rs. 37.1 million, which was in excess of the limits under Section 197 read with Schedule V of the Companies Act, 2013, by Rs. 16.2 million. The Company is seeking approval of the shareholders in the forthcoming Annual General Meeting for the excess remuneration paid to the aforesaid Executive Directors.

COST ACCOUNTS AND COST AUDITORS:

In terms of the Section 148 of the Companies Act, 2013 (the Act) read with Rule 8 of the Companies (Accounts) Rules, 2014, it is stated that the cost accounts and records are made and maintained by the Company as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013.

The Board of Directors of your Company on the recommendation of Audit Committee has appointed M/s. R. Nanabhoy & Co., Cost Accountants as the Cost Auditors of the Company to conduct the Cost Audit for the Financial year 2022. Pursuant to the provisions of Section 148 of 4(1) Companies Act, 2013 read with the Companies (Audit and Auditors) Rules 2014, members of the Company are required to ratify the remuneration to be paid to the Cost Auditors. Accordingly, members approval is being sought for ratification of their remuneration as Cost Auditors of the Company for the Financial Year 2022. Ms R. Nanabhoy & Co have confirmed that they are free from any disqualifications as specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Companies Act, 2013. They have further confirmed their Independent Status.

SECRETARIAL AUDITOR:

The Board of Directors of your Company has appointed S. N. Ananthasubramanian & Co., Company Secretaries, to conduct Secretarial Audit for the financial year 2021 pursuant to the provisions of Section 4 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 14. The Secretarial Audit Report in prescribed format is annexed as Annexure 4 to this Report.

ANNUAL SECRETARIAL COMPLIANCE REPORT:

The Company has undertaken an audit for the financial year 2021 for all applicable compliances as per Securities and Exchange Board of India Regulations and Circulars/Guidelines issued thereunder.

During the Year 2021, your Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and Annual Secretarial Compliance Report in prescribed format is annexed as Annexure 5 to this Report.

The Annual Secretarial Compliance Report has been submitted to the stock exchanges within 60 days of the end of the financial year.

PARTICULARS OF EMPLOYEES:

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report as Annexure 6.

The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report. In terms of Section 136 of the Companies Act, 2013 the Report and Accounts are being sent to the members and others entitled thereto, excluding the aforesaid information which is available for inspection by the Members at the registered office of the Company during business hours on working days of the Company and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

Your Company has formulated a policy on related party transactions which is also available on Companys website at https://www.huhtamaki.com/en-in/flexible-packaging/ investors/corporate-governance-and-policies/policies/. This policy deals with the review and approval of related party transactions. The Board of Directors of the Company has approved the criteria for making omnibus approval by the Audit Committee within the overall framework of the policy on related party transactions. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and on arms length basis. All related party transactions are placed before the Audit Committee for review and approval.

All related party transactions entered during the Year 2021 were in ordinary course of the business and on arms length basis. During the year, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Hence, there were no transactions that were required to be reported in Form AOC 2 as required under Section 134(3)(h) of the Companies Act, 13. However, members may refer to Notes to the financial statement which sets out related party disclosures pursuant to the Accounting Standards.

None of the Directors and the Key Managerial Personnel have any pecuniary relationship or transactions vis-a-vis the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has not granted any loans, guarantees and investments covered under Section 186 of the Companies Act, 2013, during the financial year ended December 31, 2021.

CORPORATE SOCIAL RESPONSIBILITY:

The Corporate Social Responsibility ("CSR") Policy of your Company is in alignment with the requirements of the Companies Act, 2013. Pursuant to the provisions of the Section 135 of the Companies Act, 2013 (the Act), your Company has constituted a CSR Committee to monitor the CSR activities of the Company, details of which are provided in the Corporate Governance Report, forming part of this Report.

Your Company is committed to CSR and strongly believes that the business objectives of the Company must be in congruence with the legitimate development needs of the society in which it operates. During the year under review the Company incurred a CSR Expenditure of Rs. 81.2 million which was more than statutory limits required to be spent by the Company.

The CSR projects of the Company are primarily focused in the areas of environment sustainability, healthcare, promotion of education and skill development, social welfare & rural development and providing drinking water, sanitation facilities and hygiene. Huhtamaki Foundation successfully commissioned its facility for recycling of post consumer used flexible packaging material towards its drive and focus in the area of environmental sustainability and recyclability.

CSR Report detailing the activities of CSR spending is annexed to this Report as Annexure 7.

VIGIL MECHANISM/ WHISTLEBLOWER POLICY:

Your Company has over the years, established a reputation for conducting business with integrity and displays zero tolerance for any unethical behaviour. The Company has in place a Whistleblower Policy with a view to provide a mechanism for its directors/employees to approach the Chairman of the Audit Committee, in case of any grievances or concern. The Audit Committee of the Board oversees the functioning of this policy. Protected disclosures can be made by a whistle blower through several channels to report actual or suspected frauds and violation of Companys Code of Conduct and/or Ethics Policy. The Whistleblower Policy can be accessed on the Companys website https://www.huhtamaki.com/en-in/ flexible-packaging/investors/corporate-governance-and- policies/policies/. During the year, the Company reached out to employees through e-learning modules and face to face training sessions for creating greater awareness on antibribery, anti-corruption, and code of conduct, formulated by Company/Group.

Huhtamaki Speak Up channel is a new web-based system where any employee can report any suspected violations of any of the Company policies, Code of Conduct, or any laws or regulations.

During the year the Company received 14 complaints under Whistle Blower/Vigil mechanism and as of date, 1 complaint is under review. None of the complaints have any material impact on the Company and do not warrant a disclosure. There was 1 pending complaint carried over from the previous year which has been disposed of during the year. Your Company believes in the highest standard of governance and has been very proactive and swift in dealing with whistle blower complaints and have dealt strictly with cases wherever deviations or evidence of conflicts have been noticed.

RISK MANAGEMENT & INTERNAL FINANCIAL CONTROLS:

The Company has in place mechanism to inform Board Members about the Risk Assessment and Minimisation procedures which are periodically reviewed to ensure that risk including the Information technology and Cyber Security risk, is controlled/mitigated by the Executive Management. The Company has also formulated Risk Management Policy to review and control risk. The Company has also constituted a Risk Management Committee which oversee and monitor implementation of Risk Management Policy, validate the process and procedure of Risk Management and Risk Mitigation and periodically review and evaluate the Companys Risk Management Policy.

Details in respect of adequacy of internal financial controls with reference to the Financial Statements are given in the Managements Discussion and Analysis, which forms part of this Report.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY:

The Directors have laid down internal financial controls to be followed by the Company and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically.

At the beginning of each Financial Year, annual audit plan is rolled out after the same is approved by the Audit Committee. The Audit Plan is aimed at evaluation of the efficacy and adequacy of internal control system and compliance thereof, robustness of internal processes, policies and accounting procedure and compliance with laws and regulations.

The respective process owners take the requisite corrective action, based on internal audit reports/findings. Further, the Internal Auditors place their significant audit observations and corrective actions before the Audit Committee for their review.

ANNUAL RETURN:

The Extracts of the annual return of the Company for Financial year 2021 has been placed on the website of the Company and can be accessed at link https://www.huhtamaki.com/en-in/ flexible-packaging/investors/financials

DIRECTORS RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134 of the Act:

a. that in the preparation of the annual financial statements for the year ended December 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

b. that such accounting policies as mentioned in Note 2 of the Notes to the Accounts have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on December 31, 2021, and of the profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,

13 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

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

f. that the proper systems to ensure compliance with the provisions of all applicable laws are in place and were adequate and operating effectively.

HUMAN RESOURCES AND PARTICULARS OF EMPLOYEES:

People are our biggest asset and the Company is invested in the holistic development, health and well-being of our employees. The Company has been providing continuous skill upgradation and learning opportunities through structured training programs, career discussions and individual development plans. A detailed note on Human Resources is mentioned in the Management & Discussion Analysis (MDA) section.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report as Annexure 6.

The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report. Further, the report and the financial statements are being sent to the members excluding the aforesaid statement. Further, in terms of provisions of Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company.

The said information is open for inspection at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting and any member interested in obtaining such information may write to the Company Secretary at the Registered Office of the Company and the same will be furnished on request. Members may please note that presently our offices are partially open due to the covid situation and adoption of work from home option. The Company is closely monitoring the pandemic situation and will open its offices up, once it feels that it is safe for employees to resume working from office.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 (POSH):

The Company is an equal opportunity provider and continuously strives to build a work culture which promotes the respect and dignity of all employees across the organisation. The Company provides a safe and healthy environment for all our employees. In order to provide women employees a safe working environment and also in compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, the Company has formulated a well-defined policy on prevention, prohibition and redressal of complaints relating to sexual harassment of women at workplace. All women who are associated with the Company either as permanent employees or temporary employees or contractual persons including service providers at Company sites are covered under the above policy. The said policy has been uploaded on the website of Company for information

of all employees. Our Company has a zero-tolerance sexual harassment policy at workplace. As per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (Act) and Rules made thereunder, the Company has constituted an Internal Complaints Committees (ICC). The Company conducts awareness programmes at its units to sensitise the employees to uphold the dignity of their female colleagues at workplace. During the year, the Company has not received any compliant under POSH Regulations.

OTHER DISCLOSURES/REPORTING:

Your Directors state that no disclosure and/or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

• Issue of equity shares with differential rights as to dividend, voting or otherwise;

• Issue of shares (including sweat equity shares) to employees of the Company under any scheme;

• Neither the Executive Director nor the Whole-time Directors of the Company receive remuneration or commission from any of its subsidiaries;

• No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future;

• There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of this Report;

APPRECIATION & ACKNOWLEDGEMENTS:

The Board wishes to place on record its gratitude for the assistance and co-operation received from Banks, Government Authorities, Customers, Vendors and all its shareholders for the trust and confidence reposed in the Company. The Board further wishes to record its sincere appreciation for the significant contributions made by employees at all levels for their commitment, dedication and contribution towards the operations of the Company.

By Order of the Board
For Huhtamaki India Limited
Murali Sivaraman, Chairman
(DIN No. 1461231)
Date: February 28, 2022