<dhhead>Directors' Report</dhhead>

Dear Members,

Your Board of Directors has pleasure in presenting the 35th Annual Report on the business and operations of your Company together with the Audited Financial Statements for the financial year ended March 31,2022.

Financial Highlights

Your Company's financial performance (standalone and consolidated) for the financial year ended March 31, 2022 is summarized below:

During the FY22, total Consolidated Income of your Company is ' 4,770.02 Crores as compared to ? 4,457.72 Crores during the previous year, showing an increase of 7.00%.

Your Company has achieved Consolidated EBIDTA of ? 692.98 Crores in FY22 from ? 584.34 Crores in the previous year, recording a growth of 18.59%. Profitability, i.e., Consolidated PBT has increased by 31.25% to ? 442.12 Crores in FY21 from ? 336.86 Crores during the previous year.

In FY22, your Company has a Consolidated PAT of ? 325.87 Crores from ? 246.24 Crores in the previous year, recording a growth of 32.34%.

Net Worth

The net worth of your Company has increased during the year under review to ? 2,728.36 Crores from ? 1,876.50 Crores in the previous year.

Gross Debt

The consolidated Debt in FY22 stood at ? 729.78 Crores as against ? 919.62 Crores in FY21.

Consolidated Financial Statements

In accordance with the provisions of Section 129 read with Schedule III to the Companies Act, 2013 (hereinafter referred to as the "Act") and the Companies (Accounts) Rules, 2014, Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the "SEBI Listing Regulations") and applicable Indian Accounting Standards, the Audited Consolidated Financial Statements of the Company for the FY22, together with the Auditors' Report form part of this Annual Report.

Transfer To Reserves

The Board of Directors has decided to retain the entire amount of profits for the FY22, under Retained Earnings and has not transferred any amount to the General Reserves, during the year under review.

Dividend

In the wake of COVID-19 pandemic, each of the business sectors in the economy has been affected, however despite this, your Board of Directors, at its meeting held on April 29, 2022, has recommended

a Dividend @18% i.e., ? 0.18/- (Eighteen Paisa) per equity share of face value of ? 1/- each, aggregating to dividend pay-out of ? 24.80 Crores for the financial year ended March 31, 2022, subject to approval of shareholders at the ensuing annual general meeting ("AGM") of the Company. The above decision is in accordance with the Company's Dividend Distribution Policy.

The dividend shall be subject to deduction of TDS before payment to shareholders, as per applicable provisions of the Income-Tax Act, 1961.

Dividend Distribution Policy

As per Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021, top 1000 listed companies based on the market capitalization, shall formulate a Dividend Distribution Policy.

Accordingly, the Policy has been adopted by the Board of Directors of the Company setting out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/ or retaining profits earned by the Company.

The Dividend Distribution Policy is available on the Company's website at https://www.hfcl.com/wp-content/uploads/2017/05/ Dividend Distribution Policy.pdf.

Investor Education and Protection Fund (IEPF)

In accordance with the applicable provisions of the Act read with the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), all unclaimed dividends are required to be transferred by the Company to the IEPF, which remain unpaid or unclaimed for a period of seven years, from the date of transfer to Unpaid Dividend Account.

Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for seven consecutive years or more shall be transferred to the demat account of the Investor Education and Protection Fund Authority ("IEPF Authority").

During the year under review, no amount of the unclaimed/ unpaid dividend and any such share in the Company, was due to be transferred to the IEPF Authority.

The following table provides a list of years for which unclaimed dividends and their corresponding shares would become eligible to be transferred to the IEPF on the dates mentioned below:

Details of unpaid dividend for the financial year 2017-18, 2018-19 and 2020-21, can be accessed from the website of the Company at www.hfcl.com and claim can be made by making request to the Company.

Details of Nodal Officer

The Company has designated Mr. Manoj Baid, Senior Vice-President (Corporate) & Company Secretary of the Company as a Nodal Officer for the purpose of IEPF Authority.

Indian Accounting Standards (Ind-AS)

Financial Statements of your Company and its subsidiaries, for the financial year ended March 31, 2022, are prepared in accordance with Indian Accounting Standards (Ind-AS), as notified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.

Fixed Deposits

During the FY22, your Company has not accepted any deposit within the meaning of Section 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

Share Capital and changes in Capital Structure

Authorized Share Capital

As on March 31, 2022, the Authorized Share Capital of your Company stood at ? 760 Crores (Rupees Seven Hundred Sixty Crores only) divided into 510 Crores (Five Hundred Ten Crores) equity shares of face value of ? 1/- (Rupee One) each, aggregating to ? 510 Crores (Rupees Five Hundred Ten Crores only) and 2.50 Crores (Two Crore Fifty Lakhs) Cumulative Redeemable Preference Shares (CRPS) of ? 100/- (Rupees Hundred) each, aggregating to ? 250 Crores (Rupees Two Hundred Fifty Crores only).

Paid-up Share Capital

As on March 31, 2022, the Paid-up Equity Share Capital of your Company stood at ? 137.66 Crores comprising of 137,65,84,221 equity shares of face value of ? 1/- each.

Allotment of equity shares under Employee Stock Option Plan ("ESOP") and Qualified Institutions Placement (QIP):

During the reporting year, your Company, on July 15, 2021, had allotted 49,34,300 equity shares of face value of ? 1/- each, to HFCL Employees' Trust for implementing the benefits of HFCL Employees' Long Term Incentive Plan - 2017, in lieu of the vested Employee Stock Options (ESOPs) granted to eligible employees of the Company, pursuant to the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014.

Qualified Institutions Placement: In order to meet funding requirements for capital expenditure for capacity expansion of optic fibre and optic fibre cables ("OFC Expansion") by the Company or through its subsidiaries; funding capital expenditure requirements for defence facilities; repayment of long term and short term borrowings availed from banks and others, funding expenditure towards upgradation of R&D initiatives (including inorganic growth initiatives); funding long term working capital requirements and general corporate purposes, the Board of Directors of the Company at its meeting held on September 03, 2021 which was also approved by the Shareholders of the Company at its Annual General Meeting held on September 30, 2021, decided to raise funds up to ' 750 crores by way of issue of Equity Shares, through a Qualified Institutions Placement ("QIP"), in accordance with Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 and the Act and the rules made thereunder.

Further, the Company had allotted 8,72,72,727 equity shares through QIP at an issue price of ' 68.75/- per equity share (including a premium of ' 67.75/- per equity share) aggregating to ' 600 crores on December 10, 2021.

Details of utilization of QIP proceeds are given in Corporate Governance Report which forms part of the Board's Report.

Pursuant to the said allotments, the paid-up equity share capital of the Company increased from ' 128,43,77,194/- divided into 128,43,77,194 shares of ' 1/- each, as on April 01, 2021 to ' 137,65,84,221/- divided into 137,65,84,221 equity shares of ' 1/- each, as at March 31, 2022.

Further, your Company, on June 08, 2022, has also allotted 11,74,100 equity shares of face value of ? 1/- each, to HFCL Employees' Trust for implementing the benefits of HFCL Employees' Long Term Incentive Plan - 2017, in lieu of the vested Employee Stock Options (ESOPs) granted to eligible employees of the Company, pursuant to the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014 (now replaced with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 w.e.f. August 13, 2021).

Pursuant to aforesaid allotment, the paid-up equity share capital of the Company stands at ' 137,77,58,321/- divided into 137,77,58,321 equity shares of ' 1/- each as on date.

There are no convertible warrants in the Company, as on the date of this Report.

Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

Management Discussion and Analysis (MD&A) Report

The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of the SEBI Listing Regulations, is presented in a separate section, forming part of this Annual Report.

Corporate Governance

Your Company is committed to benchmark itself with global standards for providing good corporate governance. Your Board constantly endeavors to take the business forward in such a way that it maximizes long term value for the stakeholders. The Company has put in place an effective corporate governance system which ensures that the provisions of SEBI Listing Regulations are duly complied with.

A detailed report on the Corporate Governance pursuant to the requirements of the SEBI Listing Regulations forms part of this Annual Report.

A Certificate from the Secretarial Auditor of the Company, confirming compliance of conditions of corporate governance as stipulated in SEBI Listing Regulations, is provided in the Report on Corporate Governance which forms part of the Corporate Governance Report.

Business Responsibility Report

As stipulated under Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility Report, describing the initiatives taken by the Company from environmental, social and governance perspective forms part of this Annual Report.

Employees' Long Term Incentive Plan

In terms of the SEBI (Share Based Employee Benefits) Regulations, 2014 (now replaced with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 w.e.f. August 13, 2021) ("SEBI SBEB & SE Regulations"), as amended from time to time and with the objective to promote entrepreneurial behaviour among employees of the Company, motivate them with incentives and reward their performance with ownership in proportion to

the contribution made by them as well as align the interest of the employees with that of the Company, "Himachal Futuristic Communications Limited Employees' Long Term Incentive Plan- 2017" ("HFCL Plan 2017") was approved by the Board of Directors of your Company on August 26, 2017, which was further approved by the members of the Company, in their 30th Annual General Meeting held on September 25, 2017.

The HFCL Plan 2017 comprises of the following three subsets:

1. Employee Stock Option Plan (ESOP) under which Options would be granted;

2. Restricted Stock Units Plan (RSUP) under which Units would be granted;

3. Employee Stock Purchase Scheme (ESPS) under which shares would be issued.

During the financial year ended March 31, 2022, your Company has not granted any ESOPs and RSUs in terms of the HFCL Plan 2017.

Further, the Company had allotted 49,34,300 and 11,74,100 equity shares of face value of ? 1/- each, to HFCL Employees' Trust for implementing the benefits of HFCL Employees' Long Term Incentive Plan - 2017, in lieu of the vested Employee Stock Options (ESOPs) granted to eligible employees of the Company, pursuant to the SEBI SBEB & SE Regulations, on July 15, 2021 and June 08, 2022 respectively and the same have also been listed on the stock exchanges, viz. NSE and BSE.

Applicable disclosures as stipulated under the SEBI SBEB & SE Regulations with regard to the HFCL Plan 2017, are provided as Annexure - A to this Report.

Your Company has received a Certificate from Mr. Baldev Singh Kashtwal, Secretarial Auditor (FCS: 3616; C.P. No.: 3169) that the HFCL Plan, 2017 for grant of stock options has been implemented in accordance with the SEBI SBEB & SE Regulations and the resolution passed by the members in their 30th Annual General Meeting held on September 25, 2017.

The said Certificate would be placed at the ensuing annual general meeting for inspection by the members.

The Nomination, Remuneration and Compensation Committee of the Board of Directors, inter-alia, administers and monitors, the HFCL Plan, 2017 of your Company.

Subsidiaries, Joint Ventures and Associate Companies

As on March 31,2022, your Company had nine subsidiaries and two associates viz.

1. HTL Limited,

2. Polixel Security Systems Private Limited,

3. Moneta Finance Private Limited,

4. HFCL Advance Systems Private Limited,

5. Raddef Private Limited,

6. DragonWave HFCL India Private Limited,

7. HFCL Technologies Private Limited w.e.f. June 26, 2021,

8. HFCL B.V. Netherlands w.e.f. October 07, 2021

9. HFCL Inc. USA w.e.f. October 08, 2021,

10. Nimpaa Telecommunications Private Limited - Associate w.e.f. June 14, 2021 and

11. BigCat Wireless Private Limited - Associate w.e.f. November 12, 2021

The Company regularly monitors the performance of these companies.

There has been no material change in the nature of the business of the subsidiaries.

A statement containing the salient features of the financial statements of subsidiary companies of the Company in the prescribed Form AOC - 1 forms a part of the Consolidated Financial Statements (CFS) in compliance with Section 129(3) and other applicable provisions, if any, of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, as amended.

The said Form also highlights the financial performance of each of the subsidiaries, included in the CFS of the Company, pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.

In accordance with the provisions of Section 136 of the Act, the financial statements of the subsidiaries are available for inspection by the members at the Registered Office of the Company during business hours on all days except Saturdays, Sundays and public holidays up to the date of the ensuing AGM. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at HFCL Limited, 8, Commercial Complex, Masjid Moth, Greater Kailash - II, New Delhi - 110048 and the same shall be sent by post.

The financial statements including the CFS and all other documents required to be attached to this Report have been uploaded on the website of the Company at www.hfcl.com.

Material Subsidiaries

The Company has adopted a 'Policy for determining Material Subsidiaries' as per requirements stipulated in Explanation to Regulation 16(1)(c) of the SEBI Listing Regulations.

The Company has amended the Policy for Determining Material Subsidiaries, in its meeting held on July 12, 2021, in line with the amendments to the SEBI Listing Regulations, notified on May 05, 2021.

The said policy may be accessed on the website of the Company at https://www.hfcl.com/wp-content/uploads/2021/07/HFCL- Policy-on-Determining-Material-Subsidiaries Revised.pdf.

The Company has one material subsidiary company viz. HTL Limited, as on March 31,2022.

Directors and Key Managerial Personnel (KMPs) Re-Appointments/Appointments

In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Mr. Arvind Kharabanda (DIN: 00052270), Director (Non-Executive), is liable to retire by rotation at the ensuing AGM and being eligible offers himself for re-appointment.

The brief resume of him and other related information are being given in the Notice convening the 35th AGM of your Company.

Your Directors recommend his re-appointment as a Non-Executive Director of your Company.

During the FY22, the Board of Directors appointed Mr. Ajai Kumar (DIN: 02446876) as a Non-Executive Independent Director w.e.f. November 25, 2021, not liable to retire by rotation who was further appointed as a Directors (Independent) for one term of consecutive three years, commencing from November 25, 2021, by

the shareholders of the Company, in their extra-ordinary general meeting held on March 07, 2022, by way of special resolution. In the opinion of the Board, he possesses requisite qualifications, experience, expertise and holds highest standards of integrity. Further he is exempt to qualify on-line proficiency self assessment test conducted by the Indian Institute of Corporate Affairs.

Further, continuation of Mr. Arvind Kharabanda Director (Non-Executive), liable to retire by rotation, on attaining the age of seventy-five years, was also approved by the shareholders of the Company, in their extra-ordinary general meeting held on March 07, 2022, by way of special resolution.

The Board of Directors at its meeting held on July 12, 2021 and on the recommendation of the Nomination, Remuneration and Compensation Committee has re-appointed Mr. Mahendra Nahata as the Managing Director of the Company for a further period of 3 (three) years with effect from October 01, 2021, which was subsequently approved by the shareholders of the Company in their AGM held on September 30, 2021, by way of a special resolution.

The Nomination, Remuneration and Compensation Committee and the Board of Directors, on the basis of performance evaluation of Independent Directors and taking into account the external business environment, the business knowledge, acumen, experience and the substantial contribution made by Mr. Surendra Singh Sirohi (DIN: 07595264) and Dr. (Ms.) Tamali Sengupta (DIN: 00358658) during their tenure, had recommended to the shareholders that continued association of Mr. Surendra Singh Sirohi and Dr. (Ms.) Tamali Sengupta as an Independent Directors would be beneficial to the Company.

Based on the above, the shareholders, in their AGM held on September 30, 2021 approved re-appointment of:

(i) Mr. Surendra Singh Sirohi for a second term of consecutive three years, commencing from August 27, 2021 to August 26, 2024; and

(ii) Dr. (Ms.) Tamali Sengupta for a second term of consecutive three years, commencing from December 24, 2021 to December 23, 2024;

to hold office as Independent Directors of the Company, not liable to retire by rotation on the Board of the Company.

In the opinion of the Board, Mr. Surendra Singh Sirohi and Dr. (Ms.) Tamali Sengupta possess requisite qualifications, experience, expertise and holds highest standards of integrity.

Further Mr. Surendra Singh Sirohi is exempt to qualify on-line proficiency self assessment test conducted by the Indian Institute of Corporate Affairs. Dr. (Ms.) Tamali Sengupta has successfully qualified on-line proficiency self assessment test conducted by the Indian Institute of Corporate Affairs.

Cessation

IDBI Bank Limited vide its letter no. LCG-SSCB.53/15/Nom.8/ 2022-23 dated April 30, 2022 which was received by the Company on May 02, 2022, has withdrawn the nomination of Mr. Ramakrishna Eda (DIN: 07677647) Non-Executive Non-Independent Director who was nominated on the Board of the Company by IDBI Bank Limited.

Consequently, Mr. Ramakrishna Eda has ceased to be a director of the Company w.e.f. May 02, 2022.

Further, Board of Directors places on record its sincere appreciation for the support and valuable guidance given by Mr. Ramakrishna Eda during his tenure as Non-Executive Director of the Company.

Key Managerial Personnel

During the year under review, Mr. Mahendra Nahata, Managing Director, Mr. Vijay Raj Jain, Chief Financial Officer and Mr. Manoj Baid, Senior Vice-President (Corporate) & Company Secretary, continue to be the Key Managerial Personnel of your Company, in accordance with the provisions of Section 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Declaration by the Company

The Company has issued confirmation to its Directors, confirming that it has not made any default under Section 164(2) of the Act, as on March 31, 2022.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Act, read with the Schedules and Rules issued thereunder as well as clause (b) of sub-regulation (1) of Regulation 16 of the SEBI Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and that they are independent of management.

In terms of Regulation 25(8) of the SEBI Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties.

The Independent Directors have also confirmed that they have complied with the Company's Code of Conduct.

In the opinion of the Board, Independent Directors fulfil the conditions specified in the Act, Rules made thereunder and SEBI Listing Regulations and are independent of the management.

Familiarisation Programme for Independent Directors

As per Regulation 25(7) of SEBI Listing Regulations, the Independent Director of the Company need to be imparted with familiarisation programme.

The familiarisation programme aims at making the Independent Directors of the Company familiar with the business and operations of the Company through various structured familiarisation Programmes.

The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company and related matters are available on the website of the Company at the web-link: https://www.hfcl.com/wp-content/ uploads/2022/04/HFCL-Familiarisation-Prog.-ID 20221.pdf.

Remuneration of Directors, Key Managerial Personnel and particulars of employees

The information required under Section 197(12) of the Act, read with Rules 5(1), 5(2) & 5(3) of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) in respect of Directors/Employees of the Company is set out in Annexure - B to this Report.

The remuneration paid to the Directors is in accordance with the Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19 of the SEBI Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

Disclosure under Section 197(14) of the Act

The Managing Director of your Company does not receive remuneration or commission from any of the subsidiaries of the Company.

Remuneration Policy

Pursuant to provisions of Section 178 of the Act and the SEBI Listing Regulations, the Nomination, Remuneration and Compensation Committee ('NRC Committee') of your Board has formulated a Remuneration Policy for the appointment and determination of remuneration of the Directors including criteria for determining qualifications, positive attributes, independence of a director, Key Managerial Personnel, Senior Management Personnel and other employees of your Company.

The NRC Committee has also developed the criteria for determining the qualifications, positive attributes and independence of Directors and for making payments to Executive and Non-Executive Directors and Senior Management Personnel of the Company.

The detailed Policy is available on the Company's website at https:// www.hfcl.com/wp-content/uploads/2019/06/Remuneration- Policy.pdf and the salient aspects covered in the Remuneration Policy have been outlined in the Corporate Governance Report, which forms part of this Report.

Board and Committee Meetings

Six meetings of the Board of Directors were held during the FY22.

The intervening gap between any two consecutive meetings of the Board was within the stipulated time frame prescribed under the Act and the SEBI Listing Regulations.

Details of meetings held and attendance of directors are mentioned in Corporate Governance Report, which forms part of this Annual Report.

Separate Meeting of Independent Directors

In terms of requirements of Schedule IV to the Act and Regulation 25 of the SEBI Listing Regulations, a separate meeting of the Independent Directors was held on March 29, 2022 for the FY22.

The meeting of the Independent Directors was attended by all the four independent directors, namely, Mr. Bharat Pal Singh, Mr. Ajai Kumar, Mr. Surendra Singh Sirohi, and Dr. (Ms.) Tamali Sengupta.

Board Committees

Your Company has constituted several Committees of the Board which have been established as part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

As on March 31, 2022, your Board has 05 (five) mandatory Committees, namely,

1. Audit Committee;

2. Nomination, Remuneration & Compensation (NRC) Committee;

3. Stakeholders' Relationship Committee (SRC);

4. Corporate Social Responsibility (CSR) Committee; and

5. Risk Management Committee (RMC).

The details with respect to the composition, powers, roles, terms of reference, number of meetings etc. of the Committees held during the FY22 and attendance of the Members at each Committee Meeting, are provided in the Corporate Governance Report which forms part of Annual Report.

All the recommendations made by the Committees of the Board including the Audit Committee were accepted by the Board.

Also, details pertaining to Risk Management & Internal Financial Control are mentioned in Management Discussion & Analysis, which forms part of the Annual Report for FY22 of the Company.

Audit Committee

As on March 31, 2022, the Audit Committee comprises of 04 (four) members namely, Mr. Bharat Pal Singh, Mr. Surendra Singh Sirohi, Dr. (Ms.) Tamali Sengupta, Independent Directors and Mr. Arvind Kharabanda, Non-Executive Director.

Mr. Bharat Pal Singh, Independent Director is the Chairman of the Audit Committee.

All members of the Audit Committee are financially literate and have experience in financial management.

Performance Evaluation

The Act mandates formal annual evaluation by the Board of its own performance and that of its committees and individual Directors. Schedule IV to the Act provides that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Directors being evaluated.

Pursuant to the provisions of the Act read with relevant rules issued thereunder, Regulation 17(10) of the SEBI Listing Regulations and the Circular issued by SEBI on January 5, 2017 with respect to Guidance Note on Board Evaluation, the evaluation of the annual performance of the Directors/Board/Committees was carried out for the FY22.

The parameters for the performance evaluation of the Board, inter-alia, include performance of the Board on deciding long term strategy, rating the composition and mix of Board members, discharging of governance and fiduciary duties, handling critical and dissenting suggestions, etc.

The performance of the Board was evaluated after seeking inputs from all the Directors on the basis of above parameters. The performance of the Committees was evaluated after seeking inputs from the Committee members on the basis of criteria such as the composition of Committees, effectiveness of Committee meetings, etc.

The Nomination, Remuneration and Compensation Committee reviewed the performance of the Individual Directors, the Committees of the Board and the Board as a whole. A questionnaire for the evolution of the Board, its committees and the individual members of the Board, covering various aspects of the performance of the Board and its Committees, including

composition and quality, roles and responsibilities, processes and functioning, adherence to Code of Conduct and Ethics and best practices in corporate governance was sent to the Directors.

The Board of Directors reviewed the performance of the Independent Directors. Performance Evaluation was done on the basis of criteria such as the contribution of the individual director to the Board and Committee meetings like preparedness on the agenda items, technical knowledge on the subject matter, meaningful and constructive contribution and inputs in meetings, etc.

In a separate meeting of the Independent Directors, performance of Non-Independent Directors and the Board as a whole was evaluated, taking into account the views of Executive Directors and Non-Executive Directors. As the Independent Directors were aware that Mr. M P Shukla, Non-Executive Chairman of the Company, had deceased on May 04, 2021 due to COVID-19 and since at present, there is no regular chairperson designated in the Company, accordingly, the performance of Chairperson was not required to be evaluated.

The Directors expressed their satisfaction with the evaluation process.

The details of the evaluation process are set out in the Corporate Governance Report which forms part of this Annual Report.

Auditors and Auditors' Report Statutory Auditors & their Report

M/s S. Bhandari & Co., Chartered Accountants (FRN: 000560C) and M/s Oswal Sunil & Company, Chartered Accountants (FRN: 016520N) were appointed as Statutory Auditors for one term of 05 (five) consecutive years, at the 30th Annual General Meeting (AGM) of the Company, held on September 25, 2017, for auditing the accounts of the Company from the financial year 2017-18 to 2021-22.

Pursuant to the provisions of Sections 139, 141, 142 and other applicable provisions, if any, of the Act read with the Companies (Audit and Auditors) Rules, 2014, (including any statutory modification(s) or re-enactment thereof), the Audit Committee and the Board of Directors of the Company, hereby recommends the re-appointment of M/s S. Bhandari & Co., Chartered Accountants (FRN: 000560C) and M/s Oswal Sunil & Company, Chartered Accountants (FRN: 016520N), as Statutory Auditors of the Company, to hold office from the conclusion of this 35th AGM till the conclusion of the 40th AGM to be held in the year 2027, at such remuneration, as may be decided by the shareholders of the Company.

The Auditors' Report does not contain any qualification, reservation or adverse remark.

Further, there were no frauds reported by the Statutory Auditors to the Audit Committee or the Board under Section 143(12) of the Act.

M/s S. Bhandari & Co., Chartered Accountants (FRN: 000560C) and M/s Oswal Sunil & Company, Chartered Accountants (FRN: 016520N) have confirmed that they are eligible and not disqualified to be re-appointed as Statutory Auditors of the Company.

Secretarial Auditors & their Report

Pursuant to provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended or re-enacted from time to time), your Company had appointed Mr. Baldev Singh Kashtwal, Company Secretary in whole-time practice, having COP No. 3169 and Membership No. F-3616, for conducting the Secretarial Audit of your Company for the FY22.

The Secretarial Audit Report in prescribed form MR-3, issued by the Secretarial Auditor is annexed herewith as Annexure - C to this Report. Further, as required under Regulation 24A of the SEBI Listing Regulations, the Secretarial Audit Report of HTL Limited, a material subsidiary of the Company is also annexed herewith as Annexure C1 to this Report.

Remarks by Secretarial Auditor

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark for the FY 2021-22 except that during the period from May 05, 2021 to November 24, 2021 there was non-compliance of Regulation No. 17(1) of the SEBI Listing Regulations, with respect to proper composition of Independent Directors on the Board of the Company, arose due to the sudden demise of Mr. M P Shukla, Chairman & Director (Non-Executive) of the Company, on May 04,2021.

However, the Company has already appointed an Independent Director on the Board w.e.f. November25,2021 in compliance with Regulation 17(1) of the SEBI Listing Regulations.

Explanation by the Board pursuant to Section 134(3)(f) of the Act

It is informed that the Company had already appointed an Independent Director on the Board of the Company w.e.f. November 25, 2021 and complied with the SEBI Listing Regulations.

Cost Records and Cost Audit

Your Company has maintained cost accounts and records as specified by the Central Government under sub-section (1) of Section 148 of the Act and the relevant rules made thereunder.

Requirement of Cost Audit as stipulated under the provisions of Section 148 of the Act, are not applicable for the business activities carried out by the Company.

Insolvency and Bankruptcy Code, 2016

There is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the FY22.

Vigil Mechanism/ Whistle-Blower Policy

The Board of Directors of your Company has formulated a Whistle-Blower Policy, which is in compliance with the provisions of Section 177(9) & (10) of the Act and Regulation 22 of the SEBI Listing Regulations.

The Company, through this Policy envisages to encourage the Directors and employees of the Company to report to the appropriate authorities any unethical behaviour, improper, illegal or questionable acts, deeds, actual or suspected frauds or violation of the Company's Codes of Conduct for the Directors and the Senior Management Personnel.

During FY22, no complaint was received and no individual was denied access to the Audit Committee for reporting concerns, if any.

The Policy on Vigil Mechanism/Whistle-Blower Policy may be accessed on the Company's website at the link: https://www.hfcl. com/wp-content/uploads/2020/01/HFCL-Whistle-Blower- Policy Revised1.pdf.

Brief details of establishment of Vigil Mechanism in the Company, is also provided in the Corporate Governance Report which forms part of this Report.

Credit Ratings

Infomerics Valuation and Rating Pvt. Ltd. (RBI & SEBI Registered Credit Rating Agency) vide its letter dated September 27, 2021, had assigned the credit ratings for the Bank Loan facilities of the Company, the details of which are as below:-

Subsequently, CARE Ratings Limited (a SEBI Registered Credit Rating Agency) vide its letter dated March 23, 2022, had enhanced the credit ratings for the Bank Loan facilities of the Company to "A" with stable outlook from "A-" (A-minus) with negative outlook, the details of which are as below:-

Annual Return

The Annual Return of the Company as on March 31, 2022, in prescribed e-form MGT-7 in accordance with Section 92(3) of the Act, read with Section 134(3)(a) of the Act, is available on the Company's website at https://www.hfcl.com/wp-content/ uploads/2022/09/Draft-HFCL Form MGT 7 2022.pdf.

Further the Annual Return (i.e., e-form MGT-7) for the FY22 shall be filed by the Company with the Registrar of Companies, Himachal Pradesh, within the stipulated period. .

Particulars of Loans, Guarantees and Investments

Details of loans, guarantees and investments, as on March 31, 2022, as stipulated under Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, are as follows:-

Loans given, Guarantees provided and Investments made during the FY22:

For more details, please refer Note No. 18, 47(c) and 51 to the Standalone Financial Statements for FY22 of the Company.

Particulars of contracts or arrangements with Related Parties

Your Company has adopted a "Policy on Dealing with and Materiality of Related Party Transactions", in accordance with the provisions of the Act and Regulation 23 of the SEBI Listing Regulations, inter-alia, providing a framework for governance and reporting of Related Party Transactions including material transactions and threshold limits for determining materiality.

The said Policy is also available on the website of the Company at the web-link: https://www.hfcl.com/wp-content/ uploads/2022/06/HFCL-Policy-on-RPTs Revised.pdf.

During the year under review, all contracts/ arrangements/ transactions entered into by the Company with related parties were in ordinary course of business and on arm's length basis.

The Company has entered into any contracts/ arrangements/ transactions with related parties which qualify as material in accordance with the Policy of the Company on materiality of related party transactions.

Thus, there are transactions required to be reported in prescribed Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the details of which is annexed herewith as Annexure - D to this Report.

All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions, formulated by the Company.

There are no materially significant related party transactions that may have potential conflict with interest of the Company at large.

There are no transactions with the person(s) or entities forming part of the Promoter(s) / Promoter(s) Group, which individually hold 10% or more shareholding in the Company.

The details of the related party transactions as per Indian Accounting Standards (IND-AS) - 24 are set out in Note 51 to the Standalone Financial Statements of the Company.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The details of energy conservation, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act, read with the Rule 8 of the Companies (Accounts) Rules, 2014, are annexed herewith as Annexure - E to this Report.

Corporate Social Responsibility (CSR)

The Company has been proactively carrying out CSR activities since more than two decades.

The Company is undertaking CSR activities through its Registered Society i.e., HFCL Social Services Society ("HSSS") established in the year 1996.

In compliance with requirements of Section 135 of the Act, the Company has laid down a Corporate Social Responsibility (CSR) Policy. The CSR Policy is available on the website of the Company and may be accessed at the web-link https://www.hfcl.com/wp- content/uploads/2022/09/CSR Poliicy 2022.pdf.

The composition of the CSR Committee, brief contents of CSR Policy, unspent amount and reason thereof, if any, and report on CSR activities carried out during the FY 22, in the format, prescribed under Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure - F.

For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which forms part of this Report.

Material Changes Affecting The Company

A. Change in nature of business

The Company has not undergone any change in the nature of the business during the FY22.

B. Material changes and commitments, if any, affecting the financial position of the Company

There are no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the FY22 and the date of this Report.

Further, as we are aware that the outbreak of COVID-19 Pandemic has impacted businesses not only in India but to all economics in the world.

Pursuant to directives of SEBI vide Circular No. SEBI/HO/CFD/ CMDI/CIR/P/2020/84 dated May 20, 2020, the Company vide its Corporate Announcement made to stock exchanges on June 5, 2020, had already disclosed the impact of COVID-19 on business, performance and finance of the Company.

The Company has evaluated the impact of COVID-19 resulting from (i) the possibility of constraints to render supply & services which may require revision of estimations of costs to complete the contracts because of additional efforts; (ii) onerous obligations; (iii) penalties relating to breaches of service level agreements, and (iv) termination or deferment of contracts by customers. The Company has concluded that the impact of COVID-19 is not material based on these estimates. Due to the nature of the pandemic, the Company will continue to monitor developments to identify significant uncertainties relating to revenue in future periods.

The Company has considered the possible effects that may result from the pandemic relating to COVID-19 in the preparation of the financial statements including their coverability of carrying amounts of financial and non-financial assets. Further the impact assessment does not indicate any adverse impact on the ability of the Company to continue as a going concern. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company has, at the date of approval of the financial statements, used internal and external sources of information including credit reports and related information and economic forecasts and expects that the carrying amount of the assets will be recovered. The impact of COVID-19 on the Company's financial statements may differ from that estimated as at the date of approval of these financial statements.

The impact of COVID-19 is also mentioned at Note No. 41 to the Standalone Financial Statements for FY22.

Significant/Material orders passed by the Regulators, Courts, Tribunals Affecting the going concern status and Company's operations in future

There is no significant/material order passed by the Regulators, Courts, Tribunals affecting the going concern status and the Company's operations in future.

Prevention of Sexual Harassment at Workplace

The Company has in place a Policy on Prevention of Sexual Harassment at Workplace, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and the rules made thereunder.

Internal Complaints Committee(s) (ICCs) at each workplace of the Company, have been set up to redress complaints, if any, received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.

ICC of each workplace of the Company has also filed Annual Return for the calendar year 2021 at their respective jurisdictional offices, as required under Section 21(1) of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013.

There was no complaint received from any employee of the Company during the FY22.

Significant Developments

Although, the Company has achieved various milestones which have already been set out in the Management Discussion and Analysis forming part of the Annual Report, however there were no other significant developments during the year under review.

Directors' Responsibility Statement

Pursuant to the requirements under Section 134(3)(c) of the Act, the Directors confirm that:

(a) i n the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had selected 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 March 31,2022 and of the profits of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Listing

The equity shares of your Company are presently listed on the BSE Limited ('BSE') and the National Stock Exchange of India Limited ('NSE').

The Company has paid annual listing fee for the FY23 to the BSE Limited and the National Stock Exchange of India Limited.

Depository Systems

Your Company's Scrip has come under compulsory dematerialization w.e.f. November 29, 1999 for Institutional Investors and w.e.f. January 17, 2000, for all Investors. So far, 99.96% of the equity shares have been dematerialized.

The I SI N allotted to the equity shares of the Company is INE548A01028.

Implementation of Corporate Action

During the year under review, the Company has not failed to implement any Corporate Action within the specified time limit.

Compliance with Secretarial Standards

Pursuant to the provisions of Section 118(10) of the Act, the Company has complied with the applicable provisions of the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

Reporting Principle

The Financial and Statutory Data presented in this Report is in line with the requirements of the Act (including the rules made thereunder), Indian Accounting Standards (Ind AS) and the Secretarial Standards (SS).

Reporting Period

The Financial Information is reported for the period April 01, 2021 to March 31, 2022. Some parts of the Non-Financial Information included in this Board's Report are provided as on the date of this Report.

Cautionary Statement

Statements in the Management Discussions & Analysis Report describing the Company's projections, estimates, expectations or predictions may be 'forward looking statements' within the meaning of applicable securities laws and regulations. Actual results

could differ materially from those expressed or implied. Important factors that would make a difference to the Company's operations include demand supply conditions, raw material prices, changes in government regulations, tax regimes and economic developments within the country and abroad and such other factors.

Personnel

Your Directors wish to place on record their sincere appreciation for the devoted services of all the employees and workers at all levels and for their dedication and loyalty, which has been critical for the Company's success.

Acknowledgements

Your Company's organizational culture upholds professionalism, integrity and continuous improvement across all functions as well as efficient utilization of the Company's resources for sustainable and profitable growth.

Your Directors wish to place on record their appreciation for the valuable co-operation and support received from the Government of India, various State Governments, the Banks and other stakeholders such as, shareholders, customers and suppliers, among others. The Directors look forward to their continued support in future.

The Directors thank the Central Government, Government of Goa, Government of Telangana, Government of Himachal Pradesh, IDBI Bank Limited, State Bank of India, Punjab National Bank, erstwhile Oriental Bank of Commerce & United Bank of India, Bank of Baroda, Union Bank of India, Yes Bank Limited, ICICI Bank Limited, Indian Bank, KEB Hana Bank and other Banks for all co-operations, facilities and encouragement they have extended to the Company.

Your Directors acknowledge the continued trust and confidence you have reposed in the Company.

Annexure (A) to Directors' Report

Disclosures pursuant to regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEB & SE Regulations") read with part F of schedule I of SBEB & SE regulations

A. Relevant disclosures in terms of the accounting standards prescribed by the Central Government in terms of Section 133 of the Companies Act, 2013 including the 'Guidance note on accounting for employee share-based payments' issued in that regard from time to time.

Please refer to Note No. 56 to the Standalone Financial Statements for FY22, which forms part of this Annual Report.

B. Diluted EPS on issue of shares pursuant to all the schemes covered under the Regulations shall be disclosed in accordance with 'Accounting Standard 20 - Earnings Per Share' issued by Central Government or any other relevant accounting standards as issued from time to time:

? 2.15/- (Rupees Two and Paisa Fifteen only) as on March 31,2022.

C. Details related to Employee Stock Options (Options/ ESOs) and Restricted Stock Units (RSUs):

(i) A description of each ESOs that existed at any time during the year, including the general terms and conditions of each ESOs, including -

(a) Date of shareholders' approval: August 26, 2017

(b) Total number of Options approved under ESOs and RSUs:

(c) Vesting requirements of ESOs and RSUs: The Vesting conditions in respect of the Options and RSUs granted under the Employee Stock Option Plan shall be as determined by the Nomination, Remuneration and Compensation Committee ("the Committee") from time to time. Upon commencement of this Plan, subject to terms and conditions of this Plan, the Options and RSUs granted to Eligible Employees shall Vest as per the schedule ("Vesting Schedule") determined by the Committee at the time of grant but the Vesting Schedule shall not be less than one year and not more than five years from the date of grant of Options and RSUs as the case may be. At the stage of determining the grant, the Committee may or may not consider performance based vesting of the Options.

ESOs:

RSUs:

(d) Exercise price or pricing formula for ESOs and RSUs:

Options were granted at a price of ? 20.65/- per equity share, i.e., the closing market price of the shares of the Company on the NSE immediately prior to the date of grant i.e. October 15, 2018.

RSUs were granted at a price of ? 1/- per equity share.

(e) Maximum term of Options/RSUs granted:

Not more than five years from the date of grant of Options/RSUs.

(f) Source of shares (primary, secondary or combination):

Primary.

(g) Variation in terms of Options/RSUs:

Not Applicable.

(ii) Method used to account for ESOs/RSUs- Intrinsic or Fair Value:

Fair Value Method.

(iii) Where the company opts for expensing of the Options using the intrinsic value of the Options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the Options shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed:

Not Applicable.

(iv) Options/ RSUs movement during the year:

(v) Weighted-average exercise prices and weighted-average fair values of options shall be disclosed separately for Options whose exercise price either equals or exceeds or is less than the market price of the stock:

(vi) Employee wise details (name of employee, designation, number of Options/RSUs granted during the year, exercise price)

of Options/RSU's granted to:

(a) Senior managerial personnel: During the financial year ended March 31, 2022 no further Options/RSUs have been granted by the Company pursuant to HFCL 2017 Scheme .

(b) Any other employee who receives a grant in any one year of Option amounting to 5% more of Options granted during that year: N.A.

(c) Identified employees who were granted Options/RSUs, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant: N.A.

(vii) A description of the method and significant assumptions used during the year to estimate the fair value of Options and

RSUs:

(a) The fair value of each equity-settled award is estimated on the date of grant using the Black-Scholes model with the following assumptions:

(b) The method used and the assumptions made to incorporate the effects of expected early exercise, how expected volatility was determined, including an explanation of the extent to which expected volatility was based on historical volatility; and whether and how any other features of the Options/RSUs grant were incorporated into the measurement of fair value, such as a market condition.

The expected life of the ESOs/RSUs is estimated based on the vesting term and contractual term of the ESOs/RSUs, as well as expected exercise behaviour of the employee who receives the ESOs/RSUs. Expected volatility during the expected term of the ESOs/RSUs is based on historical volatility of the observed market prices of the Company's publicly traded equity shares during a period equivalent to the expected term of the ESOs/RSUs.

(viii) Disclosures in respect of grants made in three years prior to IPO under each ESOs/RSUs:

Until all Options/RSUs granted in the three years prior to the IPO have been exercised or have lapsed, disclosures of the information specified above in respect of such Options/RSUs shall also be made: Not Applicable

Details related to Employee Stock Purchase Scheme (ESPS):

(i) The following details on each ESPS under which allotments were made during the year:

(ii) The following details regarding allotment made under each ESPS, as at the end of the year:

Details related to Trust:

The following details, inter-alia, in connection with transactions made by the Trust meant for the purpose of administering the schemes under the Regulations are to be disclosed:

(i) General information on all schemes:

(ii) Brief details of transactions in shares by the Trust:

(iii) In case of secondary acquisition of shares by the Trust:

It is informed that the Nomination Remuneration and Compensation Committee in its meeting held on April 23, 2022, waived off the conditions of achieving Composite Performance Score of 70% for the third year of the Scheme i.e., for FY 2020-21 as well and accordingly, all the eligible employees have right to exercise their remaining 30% of ESOPs. Further, since the performance conditions of RSUs have not been met and Nomination, Remuneration and Compensation Committee has also not relaxed any of the performance conditions, RSUs stands cancelled.

The details as required to be disclosed under the SBEB & SE Regulations can be accessed at the weblink: https:// www.hfcl.com/wp-content/uploads/2022/09/ESOP- Annexure.pdf.

A. Details pertaining to Remuneration 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 as amended by the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016: -

I. Ratio of the remuneration of each director to the median remuneration of all the employees of your Company for the FY22 is as follows: -

* Deceased on May 04, 2021.

# Ceased as Non-Executive Director (Nominee - IDBI Bank Limited) w.e.f. May 02, 2022.

## Appointed as Non-Executive Independent Director w.e.f. November 25, 2021.

Notes:

1. The information provided above is on standalone basis.

2. Remuneration to Directors includes sitting fees paid to Non-Executive Directors.

3. Median remuneration of the Company for all its employees is ?6,64,741/- for the FY22.

II. Percentage increase in remuneration of Chief Executive Officer, Chief Financial Officer, other Executive Directors and Company Secretary during the FY22:-

Note: The remuneration paid to Directors is within the overall limits approved by the shareholders.

III. Percentage increase in the median remuneration of all employees in the FY22:

IV. Number of permanent employees on the rolls of the Company as on March 31, 2022:

The number of permanent employees on the rolls of the Company as on March 31, 2022 were 2,100. Besides, the Company has 1,328 personnel also, on off-roll or contractual basis as on March 31, 2022.

V. Comparison of average percentile increase in the salaries of employees other than the key managerial personnel and the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The percentile increase in remuneration is in line with the performance of the Company and prevailing industry pay scale. The increase in the remuneration of Mr. Vijay Raj Jain, CFO and Mr. Manoj Baid, Company Secretary is mainly due to perquisites which arose on account of exercise of vested ESOPs and payment of ex-gratia aggregating to ' 2.86 crores and ' 66 lakhs respectively. There is no exceptional circumstances for increase in remuneration.

VI. Affirmation: It is hereby affirmed that the remuneration paid during the year under review is as per the Remuneration Policy of the Company.

B. Details pertaining to Remuneration as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended by the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016:-

I. Names of the top ten employees of the Company in terms of remuneration drawn and the names of employees who were employed throughout the FY22 and were paid remuneration not less than f 1,02,00,000/-:

II. Names of the employees who were employed for a part of FY22 and were paid remuneration not less than f8,50,000/- per month:

Notes:

i. The remuneration shown above comprises salary, allowances, perquisites, performance linked incentive/ Ex-gratia, medical, Company's contribution to provident fund and all other reimbursements, if any.

ii. None of the above employees is related to any Director of the Company.

iii. None of above employees draws remuneration more than the remuneration drawn by Managing Director and holds by himself or along with his spouse and dependent children, not less than two percent of equity shares of the Company.