Hiliks Technologies Ltd

To,

Our Directors are pleased to present the 39^th (Thirty Ninth) Annual Report on the business and operations of the Company, together with the Audited Financial Statements for the financial year ended 31^st March, 2024.

The Company's financial results for the financial year ended on the 31^st March, 2024 are as under:

The Company has not transferred any amount to general reserves.

The management believes that the profits earned during the financial year must be retained and redeployed for the operations of the Company. As the Company needs further funds to enhance its business operations, to upgrade the efficiency and to meet out the deficiencies in working capital, the Directors do not recommend any dividend on equity shares for the financial year 2023-24.

There is no change in the nature of the business in the financial year under review.

The Authorized Share Capital of the Company as on March 31, 2024 stood at Rs. 6,00,00,000/- (Rupees Six Crore only) divided into 60,00,000 (Sixty Lakh) equity shares of Rs. 10/- (Rupees Ten only) each.

Post closure of financial year, the Authorized Share Capital of the Company has been increased from Rs. 6,00,00,000/- to Rs. 12,00,00,000/-.

The Paid-up Share Capital of your Company as on March 31, 2024 stood at Rs. 6,00,00,000/- (Rupees Six Crore only) divided into 60,00,000 (Sixty Lakh) equity shares of Rs. 10/- (Rupees Ten only) each.

During the financial year 2023-24, the Paid up Share Capital of the Company has been increased from Rs. 5,07,90,000/- to Rs. 6,00,00,000/- by way of issue of 9,21,000 equity shares on preferential basis.

Post closure of the financial year 2023-24, the Company has allotted 48,00,000 (Forty Eight Lakh) convertible warrants on 21^st June, 2024 on preferential basis at an issue price of Rs. 37/- (Rupees Thirty Seven only) each including premium of Rs. 27/- (Rupees Twenty Seven only) and as on the date of this report the paid-up value of warrants (including the premium) is Rs. 4.44 crores.

As on 31^st March, 2024, the composition of Board of Directors and KMPs was as follows:

During the year under review:

• Mr. Ramakrishnam Raju Datla has resigned from the post of Chief Financial Officer (CFO) w.e.f 4^th April, 2023

• Mrs. Brinda Mahajan was appointed as Company Secretary (CS) w.e.f. 5^th July, 2023.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Sandeep Copparapu and Mrs. Jhansi Lakshmi Adivishnu, Directors are liable to retire by rotation at the ensuing Annual General Meeting of the Company. Your Board of Directors commends their re-appointment.

The Board met nine (9) times during the financial year 2023-24. The intervening gap between any two Meetings was within the period prescribed by the Companies Act, 2013.

The Independent Director have submitted their declarations of independence, as required pursuant to provisions of section 149 (7) of the Companies Act, 2013 and rules made thereunder.

During the year under review, no Independent Director was appointed.

In pursuance of the provisions of the Act, the evaluation of performance of the Board as a whole, Committees of the Board, Directors individually and Chairperson of the Company was carried out for the financial year 2023-24. The performance of each Director has been evaluated by Nomination and Remuneration Committee.

In terms of provisions of Section 178 of the Companies Act, 2013, the Board has, on the recommendation of the Nomination & Remuneration Committee, framed and adopted a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration. The said policy is available on the website of the Company at www.hiliks.com.

M/s. A S K M & Co., Chartered Accountants (FRN: 012799S) was appointed as the Statutory Auditor of the Company at 37^th Annual General Meeting (AGM) held on 30^th September, 2022 for a period of five years to hold office from the conclusion of 37^th AGM until the conclusion of the 42^nd AGM of the Company. The Auditors have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Auditors' Report does not contain any qualification, reservation or adverse remark and do not call for any further explanation/ clarification by the Board of Directors as provided under Section 134 of the Act.

There were no frauds reported by Auditors under sub-section (12) of Section 143 which have occurred during the financial year 2023-24.

M/s. Jain Alok & Associates, Practicing Company Secretaries conducted the Secretarial Audit for the financial year 2023-24. The Secretarial Audit Report for the financial year ended 31^st March, 2023 is annexed herewith as Annexure-A which forms a part of this Report.

The Secretarial Audit Report for the financial year ended 31^st March, 2024 contains certain observations and qualifications. The observations, qualifications and clarification by the Board are as follows:

Observation 1: Pursuant to the provisions of Section 203 of the Companies Act, 2013 and Regulation 6 of the SEBI (LODR) Regulations, 2015, there was no Company Secretary cum Compliance officer of the Company from 1st December, 2022 till 4th July, 2023.

Clarification: The delay in compliance arose from the time required to appoint a suitable Company Secretary (CS). Once the appropriate candidate was identified by the management, the appointment was made effective from 5^th July, 2023

Observation 2: The Company has made the delayed in the payment of Annual Listing Fees to BSE Limited and Metropolitan Stock Exchange of India Limited (MSEI) for the financial year 2023-24

Clarification: It was inadvertently delayed. The Company will comply the same in future in timely manner.

Observation 3: There was a delay of 1 day in publication of the approved financial results in the newspapers for the quarter ended 30th June, 2023 as required under Regulation 47 of the SEBI (LODR) Regulations, 2015

Clarification: It was inadvertently delayed. The Company will comply the same in future in timely manner.

Observation 4: The Company has complied with the requirements of Regulation 47 of the SEBI (LODR) Regulations, 2015, by publishing the necessary information in both an English newspaper and Marathi newspaper. However, it is noted that all such publications have been made in the English language only

Clarification: The Company acknowledges the discrepancy and ensures proper compliance of the requirements in future.

Observation 5: The Company has paid SOP fine of Rs. 40,120/- to MSEI and BSE Limited on 20^th November, 2023 and 22^nd November, 2023 respectively under Regulation 6 SEBI (LODR) Regulations, 2015 from quarter ended June, 2023 to quarter ended September, 2023

Clarification: The delay in compliance arose from the time required to appoint a suitable Company Secretary (CS). Once the appropriate candidate was identified by the management, the appointment was made effective from 5 ^th July, 2023.

Observation 6: The Company has not directly intimated to the Members holding shares in physical form for furnishing their PAN, KYC details and Nomination pursuant to SEBI Circular No. SEBI/ HO/MIRSD /MIRSD_RTAMB/P/ CIR/2021/655 dated November 03, 2021.

Clarification: It was inadvertently missed. The Company ensures proper compliance of the requirements in future.

Observation 7: The Company did not have the minimum required number of Independent Directors in accordance with the provisions of Section 149(4) of the Companies Act, 2013. Therefore, no meeting of Independent Directors was held during the financial year 2023-24

Clarification: The Company had tried to find Independent Director to fill the casual vacancy, however could not find a suitable person. The management will comply with the provisions of Section 149(4) of the Companies Act, 2013 as soon as the deserving candidate will be found.

Observation 8: The composition of Audit Committee and Nomination and Remuneration Committee were not as per the provisions of Section 177 and 178 of the Companies Act, 2013 respectively

Clarification: The Company had tried to find Independent Director to fill the casual vacancy, however could not find a suitable person. The management will comply with the provisions of Section 177 and 178 of the Companies Act, 2013 as soon as the deserving candidate will be found and appointed on Board of the Company as Independent Director.

Observation 9: Pursuant to the provisions of Section 203 of the Companies Act, 2013, there was no Chief Financial Officer of the Company since 4th April, 2023

Clarification: The Company had tried to find Chief Financial Officer to fill the casual vacancy, however could not find a suitable person. The management will comply with the provisions of Section 203 of the Companies Act, 2013 as soon as the deserving candidate will be found

Observation 10: During the financial year 2023-24, the Company has filed all the ROC forms within time, except the forms listed in Annexure-2 of this report.

Clarification: It was inadvertently delayed. The Company will comply the same in future in timely manner.

The management of the Company assure you to comply all the provisions of the applicable law in true spirit in future and is under process of making all the default good.

The Board of Directors of the Company had appointed M/s. Rangana Siva & Associates as an Internal Auditor of the Company for the financial year 2023-24 to conduct the Internal Audit for ensuring the orderly and efficient conduct of its business under the provisions of Companies Act, 2013 and rules made thereunder. The scope, functioning, periodicity and methodology for conducting internal audit were approved by the board of directors.

The report of the Internal Auditor has considered by the Board of Directors of the Company for the financial year 2023-24.

The details of the loan given by the Company covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the financial statements. Further, the Company has not made any investment or given any guarantee during the financial year.

The Company did not enter into a contract or transaction which would fall under the purview of Section 188 of the Companies Act, 2013. Further, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material and which is required to be reported in Form No. AOC-2 in terms of Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014. Therefore, Form AOC-2 is not applicable.

The Company did not have any Subsidiary, Joint Venture or Associate Company during the financial year.

There has been no material change or commitment, affecting the financial position of the Company which have occurred between March 31, 2024 and the date of this report.

There was no such order passed by the Regulators or Courts against the Company during the financial year which would impact the going concern status of the Company and its future operations.

Information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is available at the registered office of the Company. The members may obtain the same.

No directors/employees of the Company was in receipt of amount exceeding a salary of Rs. 8,50,000/- per month or more when employed for a part of the year or Rs. 1,02,00,000/- per annum or more when employed for whole of the year, under the provisions of Rule 5(2) & (3) of The Companies (Appointment And Remuneration of Managerial Personnel) Rules, 2014.

The prospects for the Company's business are dependent upon economic and industrial growth as well as resources available for implementation of liberalization policies of the Government. Adverse changes and delays of lack of funds can affect the business prospects of the Industry and the Company.

Risk Management is an integral part of the Company's business strategy. The Risk Management oversight structure includes Committees of the Board and Senior Management Committees. The Risk Management Committee of the Board ("RMC") reviews compliance with risk policies, monitors risk tolerance limits, reviews and analyses risk exposure related to specific issues and provides oversight of risk across the organization. The RMC nurtures a healthy and independent risk management function to inculcate a strong risk management culture in the Company.

As part of the Risk Management framework, the management of Credit Risk, Market Risk, Operational Risk and Fraud Risk are placed under the Head-Risk, to ensure Integrated Risk Management for various Risks.

The Company's internal control system is designed to ensure operational efficiency, protection and conservation of resources, accuracy and promptness in financial reporting and compliance with laws and regulations. The internal control system is supported by an internal audit process for reviewing the adequacy and efficacy of the Company's internal controls, including its systems and processes and compliance with regulations and procedures.

Internal Audit Reports are discussed with the Management and are reviewed by the Audit Committee of the Board which also reviews the adequacy and effectiveness of the internal controls in the Company. The Company's internal control system is commensurate with the size, nature and operations of the Company.

The Company has vigil mechanism during the financial year 2023-24. The Board of Directors are under discussion to derive a mechanism through which fraud risk, including corrective and remedial actions as regards people and processes can be determined and implemented.

The Company recognizes people as its most valuable asset and it has built an open, transparent and meritocratic culture to nurture this asset. The Company has kept a sharp focus on Employee Engagement. The Company's Human Resources is commensurate with the size, nature and operations of the Company.

The provisions of Section 135 of the Companies Act, 2013 was not applicable to the Company during the financial year 2023-24.

The Company is fully compliant with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

The Company has neither invited nor accepted any deposits from the public during the year. There is no unclaimed or unpaid deposit lying with the Company.

The Annual Return of the Company for the financial year 2023-24 shall be placed at its website: www.hiliks.com.

The equity shares of the Company are listed on BSE Limited and Metropolitan Stock Exchange of India Ltd.

As on 31^st March, 2024, a total of 56,93,320 equity shares representing 94.89% of the equity share capital have been dematerialized.

Corporate Governance provisions i.e. Regulation 17 to 27 and clause (b) to (i) of sub-regulation (2) of Regulation 46 and Para C to E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 are not applicable to the Companies having paid up equity share capital not exceeding Rs. 10 crore and net worth not exceeding Rs. 25 crores as on the last day of the previous financial year. The Company's paid up equity share capital as on 31^st March, 2024 was Rs. 6

crores which is less than Rs. 10 crores and the Net worth was Rs.7.72 crores which is less than Rs. 25 crores.

The Company has zero tolerance for sexual harassment at workplace. The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassments at workplace.

A Complaints Committee has been set up to redress complaints received. There was no complaint received from any employee during the financial year 2023-24 and hence no complaint is outstanding as on March 31, 2024 for redressal.

In view of the nature of the activities carried out by the Company, Section 134(3)(m) of the Companies Act, 2013, read with Companies (Accounts) Rules, 2014:

i. Energy Conservation Measures Taken

Energy Conversation continues to receive major emphasis and is being systematically mentioned and corrective measures are taken whenever required immediately.

ii. Additional investment, and proposals, if any, being implemented.

At present the company has no proposal to make any substantial investments for further reduction of consumption of energy. However, regular up-gradation of facilities is being done as and when required. The Company has been able to control its energy cost substantially.

Total Energy consumption & energy consumption per unit of Production are prescribed in form-A

(B) Technology Absorption: The Company is carrying on Research and Development in a routine manner along with its business activities. The initiatives taken by the Company have resulted in lower cost of energy consumption. Company has already absorbed technology fully.

Research, Development and improvement of products are an in built and on-going activity within the existing manufacturing operations of the Company. Expenditure on R&D is not separately allocated and identified.

(C) Foreign Exchange Earnings & Outgo: The Company did not earn or spent any foreign exchange during the year under review.

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013:

a) that in the preparation of the annual financial statements for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that accounting policies as mentioned in the Notes to the Financial Statements 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 at March 31, 2024 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, 2013 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 were in place and that the financial controls were adequate and were operating effectively.

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

The Company has not received any amount by way of loan from its Director or relative of the

Director during the financial year 2023-24.

The Board of Directors state that no disclosures or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

a) The Company had not issued any equity shares with differential rights as to dividend or voting or otherwise.

b) The Company had not issued any shares (including sweat equity shares) to employees of the Company under any scheme.

c) Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year- There is no such proceedings.

d) The details of the difference between the amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons-Not Applicable.

The Directors gratefully acknowledge all stakeholders of the Company viz. financial institutions, Government Authorities customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees, executives, staff and workers of the Company for their unstinted commitment and continued contribution to the Company.

To

The Members,

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate governance practice by Hiliks Technologies Limited (hereinafter called "the Company"). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon.

Based on our verification of the Company's Books, Papers, Minutes Books, Forms and Returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended 31^st March, 2024, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31^st March, 2024 according to the provisions of:

1. The Companies Act, 2013 (the Act) and the rules made there under;

2. The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made there under;

3. The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

4. Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of foreign Direct Investment, Overseas Direct Investment, External Commercial Borrowings;

5. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act') were applicable to the Company under the financial year under report:-

i. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

ii. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

iii. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;

iv. The Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015;

v. The Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018;

Provisions of the following Regulations and Guidelines prescribed under the Securities and Exchange

Board of India Act, 1992 ('SEBI Act') were not applicable to the Company under the financial year

under report:-

i. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

ii. The Securities and Exchange Board of India (Registrars to Issue and Share Transfer Agents) Regulations, 1993, regarding the Companies Act and dealing with client;

iii. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;

iv. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018;

v. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock purchase Scheme) Guidelines, 1999;

6. Other laws applicable to the Company as per representations made by the Company.

We have also examined compliance with the applicable clauses of the following:

i. Secretarial Standard 1 and 2 issued by The Institute of Company Secretaries of India.

ii. The Listing Agreements entered into by the Company with BSE Limited and Metropolitan Stock Exchange of India Limited (MSEI) pursuant to the Regulations of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 [SEBI (LODR)].

During the period under review, the Company has complied with the provisions of the Act, Rules,

Regulations, Guidelines, Standards, etc. mentioned above subject to the following observations:

As on 31^st March, 2024, the composition of the Board of Directors of the Company is not as per the provisions of the Companies Act, 2013 as the Company did not have minimum required number of Independent Directors.

Further, during the financial year under review, following changes took place in the composition of Board of Directors and KMPs:

i. Mr. Rama Krishnam Raju Datla has resigned from the post of Chief Financial Officer (CFO) w.e.f 4^th April, 2023;

ii. Mrs. Brinda Mahajan was appointed as Company Secretary (CS) of the Company w.e.f 5^th July, 2023.

Apart from above, there were no changes in the composition of the Board of Directors during the period under review.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members' views, if any, are captured and recorded as part of the minutes.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period, the Company has allotted 9,21,000 equity shares having face value of Rs. 10/- each at an issue price of Rs. 20/- each on 27th October, 2023 on preferential basis.

To,

The Members,

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in Secretarial records. We believe that the process and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Wherever required, we have obtained the Management representation about the Compliance of laws, rules and regulations and happening of events etc.

5. The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedure on test basis.

Forms filed beyond the due date