Happiest Minds Technologies Ltd Directors Report

Dear Members,

Your Directors take pleasure in presenting the Thirteenth Annual Report covering the highlights of the finances, business and operations of your Company. Also included herein are the Audited Financial Statements of the Company (standalone and consolidated) prepared in compliance with Ind AS Accounting Standards, for the financial year ended March 31,2024.

Highlights of Financial Performance

Description	Standalone		Consolidated
	March 31, 2024	March 31, 2023	March 31,2024	March 31,2023
Revenue from Operations	1,47,288	1,33,255	1,62,466	1,42,929
Other Income	11,126	2,234	8,537	2,111
Total Income	1,58,414	1,35,489	1,71,003	1,45,040
Employee benefits expense	94,772	78,690	1,01,469	80,681
Depreciation and amortization	3,430	2,996	5,829	4,191
Finance cost	4,227	2,150	4,227	2,186
Other expenses	23,632	22,485	27,412	26,362
Total expenses	1,26,061	1,06,321	1,38,937	1,13,420
Profit / (Loss) before Exceptional Items and Tax	32,353	29,168	32,066	31,620
Exceptional (Income) / Expense	143	-	1,402	-634
Profit / (Loss) before Tax	32,496	29,168	33,468	30,986
Tax expense	7,923	7,530	8,629	7,887
Profit / (Loss) after Tax	24,573	21,638	24,839	23,099
Earnings per share (Basic)	16.55	15.11	16.73	16.13
Earnings per share (Diluted)	16.55	15.00	16.73	16.01
Attributable to:
Shareholders of the Company	24,573	21,638	24,839	23,099
Opening balance of retained earnings	38,240	22,388	39,064	21,773
Dividend on equity shares	-8,604	-5,715	-8,604	-5,715
Other Comprehensive income recognised directly in retained earnings	-281	-94	-259	-116
Transferred from share option outstanding reserve for options forfeited	2	23	2	23
Closing balance of retained earnings	53,930	38,240	55,042	39,064

Note: Previous years figures have been regrouped/reclassified wherever necessary to correspond with the current years classification/disclosure.

A detailed analysis of the financials and business performance of the Company during the year under review is provided below.

Management Discussion and Analysis

Management Discussion and Analysis as required under Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is provided separately in the Annual Report.

Dividend & Transfer to Reserves

Your Companys policy on Dividend Distribution is available at https://www.happiestminds.com/investors/policy-documents/.

In accordance with the said policy, your Directors declared an interim dividend of 2.50/- per equity share in the Board meeting held on October 17, 2023 and are pleased to recommend a final dividend of 3.25 /- per equity share for the financial year ended

March 31,2024, i.e., the total dividend for the current financial year under review being 5.75/- per equity share (previous financial year - 5.40/- per equity share). If the above recommendation is accepted by the Members of the Company at the ensuing Annual General Meeting, the total outflow on this account will be 8,755.80 Lakhs.

Your Directors do not propose to transfer any amounts to the general reserves of the Company, instead have recommended to retain the entire profits for the financial year ended March 31,2024, in the profit and loss account.

Your Company did not have any amounts due or outstanding as of the Balance Sheet date to be credited to the Investor Education and Protection Fund.

Mergers & Acquisitions

A strategic and focused M&A program tied to the long-term goals of the Company is in place and is represented by the investment committee which consists of two executive members. The Company follows a programmatic M&A approach which works to acquire companies of strategic interest and of meaningful size and scale.

The current M&A priorities are -

• Strengthen our geographical presence in USA, Europe, Middle-East and Australia / New Zealand regions

• Enhance length and breadth of our technology offerings - Cyber Security, Service Now, Salesforce, Low Code / No Code

• Go deep into our focus industry groups seeking specialized offerings in sub verticals - Insurance, Banking, Life Sciences

• Enhance partnerships and strategic alliances with Microsoft, Service Now, etc.

Subsidiary Company

As of March 31,2024, your Company had two wholly-owned subsidiary companies viz., Happiest Minds Inc., USA (formerly PGS Inc.) and Sri Mookambika Infosolutions Private Limited., Madurai, India ("SMI"). The statement under Section 129(3) of the Companies Act, 2013 in respect of the subsidiaries in Form AOC-1 is attached as Annexure I. The Consolidated Accounts of your Company duly audited by the Statutory Auditors are presented as part of this Report.

The financial statements together with related information and other reports of the subsidiaries are available on the website at https://www.happiestminds.com/investors/

Your Companys policy on material subsidiary is also available on the website at https://www.happiestminds.com/investors/ policy-documents/

Recognitions

Please refer to pages 22, 23 of the Integrated Annual Report of 2023-24.

Share Capital and Debentures

During the year under review, your Company issued 54,11,255 equity shares of face value of 2/- each at a price of 924/- per equity share. The paid-up equity share capital as on March 31, 2024, was 304,549,622/- consisting of 152,274,811 equity shares of 2/- each.

Further your Company has issued 8,000 rated, listed, negotiable, unsecured, redeemable non-convertible debentures of the nominal value of 1,00,000/- each and are listed on the Bombay Stock Exchange (BSE).

Your Company has not issued shares with differential voting rights and sweat equity shares during the year under review.

Directors and Key Managerial Personnel

As on March 31,2024, the Board of Directors of your Company comprised of six Directors, viz., three Executive Directors and three Independent Directors including two women Independent Directors. As per the Articles of Association of the Company, one third of the Directors (other than Independent Directors) are liable to retire by rotation at the Annual General Meeting ("AGM") of the Company, every year. Mr. Venkatraman Narayanan (DIN: 01856347) retires by rotation at the ensuing 13th AGM and being eligible, offers himself for re-appointment.

Mr. Ashok Soota (having DIN 00145962-Executive Chairman), Mr. Joseph Anantharaju (having DIN 08859640- Executive Vice Chairman) and Mr. Venkatraman Narayanan (having DIN 01856347-Managing Director & CFO), are Executive Directors on the Board.

Ms. Anita Ramachandran (DIN 00118188), Mr. Rajendra Kumar Srivastava (DIN 07500741) and Ms. Shuba Rao Mayya (DIN No. 08193276) are the Independent Directors on the Board with Mr. Rajendra Kumar Srivastava being designated as the "Lead Independent Director". Pursuant to the provisions of Section 149 of the Companies Act, 2013 the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 along with the Rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company. In the opinion of the Board, the Independent Directors possess the requisite integrity, experience, expertise, and proficiency required under all applicable laws and the policies of the Company.

Policy on Nomination and Remuneration of Directors

This policy on the nomination and remuneration of Directors, Key Managerial Personnel and Senior Management Personnel has been formulated by the Nomination and Remuneration Committee and approved by the Board of Directors of the Company. The policy is guided by the principles and objectives as enumerated under the provisions of the Companies Act, 2013 and the Listing Regulations, to ensure reasonableness and sufficiency of remuneration to attract, retain and motivate competent resources, a clear relationship of remuneration to performance and a balance between rewarding short and long-term performance of the Company. A copy of the policy is uploaded on the Companys website at https://www.happiestminds.com/investors/policy-documents/.

We confirm that the remuneration paid to Directors, Key Managerial Personnel and Senior Management Personnel is in accordance with the said policy of the Company. The statement of Disclosure of Remuneration under Section 197 of Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached to this report as Annexure II.

None of the Executive Directors of the Company were in receipt of any commission from the Company or any remuneration from the subsidiaries of the Company.

Familiarization Program for Independent Directors

The Company has in place a familiarization program for its Independent Directors. The objective of the program is to familiarize Independent Directors on our Board with the business of the Company, industry in which the Company operates, business model, challenges etc. through various programs which includes interaction with subject matter experts within the Company, meetings with our business leads and functional heads on a regular basis.

The familiarization program and other disclosures as specified under the Listing Regulations is available on the Companys website at https://www.happiestminds.com/investors/disclosures/HappiestMinds-Details-of-Familiarization-Programme.pdf

Board Evaluation

The Nomination, Remuneration and Governance Committee of the Company has reviewed and approved the evaluation criteria for the Board Evaluation. The criteria for the evaluation were broadly based on the SEBIs Guidance Note on Board Evaluation. The evaluation criteria covered the Board as a whole, the Committees of the Board, each individual Director and the Chairman of the Company and were focused on the Boards composition and accountability, their role in setting strategies, the effectiveness of the Board Committees and the performance of each individual Director and the Chairman.

During the year under review, the questionnaire was circulated to all the Board Members of the Company in a transparent and confidential manner and based on their responses, a detailed report was presented to the Board on an anonymous basis to give an understanding of its working dynamics, highlight areas of strength/improvement and proposed the suggested action plan to improve the Boards overall performance and effectiveness.

Some of the suggested action plans that are being implemented during FY 2024-25 are as below:

1. To expand the Board with induction of two Directors.

2. To ensure a detailed half-year review by the management.

3. To organize professional development programs for the Directors.

4. To come up with a plan for increasing the Risk committee involvement and to enhance its working procedures.

Committees of the Board

The details of the powers, functions, composition, and meetings of the Committees of the Board held during the year are given in the Report in the Corporate Governance section forming part of the Annual Report.

Board Meetings

The Board of Directors of the Company met seven times during the year under review. The details of these Board Meetings are provided in the Corporate Governance section forming part of the Annual Report. The necessary quorum was present for all the meetings. The maximum interval between any two meetings did not exceed 120 days.

Corporate Governance

Your Company has taken adequate steps to adhere to all the stipulations laid down in the Listing Regulations. A report on Corporate Governance is disclosed separately in the Annual Report.

A Certificate from M/s. V Sreedharan & Associates, a firm of Company Secretaries in practice, confirming the compliance with the conditions of Corporate Governance as stipulated under the said Regulations is attached as Annexure VII to this Report.

Employees Stock Option Plan (ESOP)

During the year under review, no fresh grants were made under the Happiest Minds Employee Stock Option Scheme 2020, however, your Company facilitated the transfer of 7,59,541 Equity Shares of 2/- each by the Happiest Minds Technologies Share Ownership Plans Trust to the employees who exercised their options under the old schemes.

The additional details of stock options are provided under Notes to Financial Statements (Standalone).

Pursuant to the requirements of the SEBI (Share Based Employee Benefit and Sweat Equity) Regulations, 2021, a certificate has been issued by the Secretarial Auditors of the Company confirming that the Plan has been implemented in accordance with the said Regulations and in accordance with the resolution passed by the Company in the General Meeting.

As required under the SEBI (Share Based Employee Benefit and Sweat Equity) Regulations, 2021, the applicable disclosures as on March 31,2024, are uploaded on the website of the Company at https://www.happiestminds.com/investors/disclosures/

Code for Prevention of Insider Trading

Your Company has adopted a Code of Conduct to regulate, monitor and report trading by designated persons and their immediate relatives as per the requirements under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. This Code of Conduct also includes the code for practices and procedures for fair disclosure of unpublished price sensitive information which has been made available at https://www.happiestminds.com/investors/policy-documents/

Vigil Mechanism

The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the Listing Regulations is implemented through the Companys Whistle Blower Policy to enable all its employees, consultants (part-time, full-time and temporary employees) of the Company and its subsidiary companies and its associate companies to report genuine concerns, to provide for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee. Your Directors affirm that no employee/consultant has been denied access to the Audit Committee.

The Whistle Blower Policy is available at https://www.happiestminds.com/investors/policy-documents/

During the year under review, your Company did not receive any complaints under the said Policy.

Annual Return

Pursuant to Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, copies of the Annual Returns of the Company for previous financial years prepared in accordance with Section 92(1) of the Act have been placed on the website and is available at https://www.happiestminds.com/investors/disclosures/

Software Technology Park

The entire Indian operations of the Company have been registered under the Software Technology Parks of India (STPI) Scheme.

Deposits

Your Company has not accepted any deposits during the year under review and as such, no amount of principal or interest was outstanding on the date of the Balance Sheet.

Significant & Material Orders passed by the Regulators or Courts or Tribunals

During the year under review, your Directors confirm that there were no significant material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its future operations.

Loans, Guarantees and Investments

Pursuant to Section 186 of the Companies Act, 2013 and Schedule V of the Listing Regulations, disclosure on particulars relating to Loans, Advances, Guarantees, and Investments are provided as part of the financial statements. Further, your Directors have sought your approval at the ensuing AGM to enhance the limits provided under the said Section.

Related Party Transactions

The Policy on related party transactions is available at https://www.happiestminds.com/investors/policy-documents/

Particulars of the Contracts or Arrangements with related parties referred to in Section 188(1) in the format specified as Form AOC-2 forms part of this Report as Annexure III. Further details of related party transactions are provided in Notes to Financial Statements (both Standalone and Consolidated).

All the Related Party Transactions entered by your Company with the Related Parties are in the ordinary course of business and are carried out at arms length pricing.

Details of the transaction(s) of your Company with the entity(ies) belonging to the promoter/promoter group which hold(s) more than 10% shareholding in the Company as required under Para A of Schedule V of the Listing Regulations are provided as part of the financial statements.

Auditors & Auditors Report

The current Statutory Auditors of the Company are M/s. Deloitte Haskins & Sells (ICAI registration number 008072S) who have been appointed at the 10th AGM of the Company held on July 07, 2021 to hold office for a term of 5 years i.e., till the conclusion of the 15th AGM.

The Auditors Report does not contain any qualification, reservation, or adverse remark on the financial statements for the financial year ended March 31,2024. The Notes on financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed M/s. V Sreedharan & Associates, a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report issued by them for the financial year ended March 31,2024, is attached as Annexure VIII to this Report. The Secretarial Audit Report does not contain any qualifications, reservations, or adverse remarks.

During the year under review, the Statutory Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its officers or employees, to the Audit Committee under Section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in his Report.

Sustainability and Corporate Social Responsibility (CSR)

The Companys Sustainability, Environment, Social and Governance Reporting is provided separately as part of the Annual Report.

The annual report on CSR including a brief outline of the CSR Policy and the activities undertaken during the year under review is enclosed as Annexure IV to this Report. The CSR policy is available at https://www.happiestminds.com/investors/policy-documents/

Risk Management

Your Company under the supervision of the Executive Board has established a well-defined framework and procedures on organization wide risk and its management. The framework encompasses significant risk in areas of Information security, operations, delivery, and key support functions. Under the framework and procedures, detailed risk management guidelines have been prescribed and implemented covering Risk Identification, Analysis, Response, Tracking, and Management Discussion and Mitigation. Risk registers are maintained by respective functions and project teams. These are centrally reviewed and periodically monitored by compliance and governance teams identified as the owner for the area of risk. The Chief Information Security Officer (CISO), Chief Information Officer (CIO) and Engineering and Business Excellence Team (EBE) work together with the Executive Board in achieving the above.

The Executive Board with the assistance of the CISO, CIO and EBE follows a process covering the steps below in identifying areas of risk in the Company. The process covers:

• Identification of key risk areas

• Assessment of key risks for probability and impact

• Prioritization

• Formulation of response

• Identification of Owners

• Participation by Owners in outlining mitigation plans

• Reporting on adequacy and effectiveness

• Acceptance of residual risk

Your Company while designing its strategy in drawing up of its long-term business plan, makes provision to accommodate broader/ higher level of risk than it expects/envisages so that Company is prepared to sustain in the eventuality of unforeseen level of risk.

Significant risks areas which have been identified and are constantly monitored are:

1. Financial Risks:

a. Foreign currency fluctuation

b. Customer credit

c. Profitability and sustenance of the business

d. Availability of credit and liquidity management

2. Business Risks:

a. Concentration of revenues

b. New, emerging disruptive technologies and their impact on business, and delivery

c. Shrinking product development cycles

d. Customers insourcing

3. Operational Risks:

a. Data privacy, social media

b. Talent availability and timely staffing of projects

c. Optimal resource utilization

d. Contractual commitments and project delivery challenges

e. Business continuity

f. COVID 19 Pandemic

4. Legal and Regulatory:

a. Compliance with local legislation in the geographies we operate in

b. Dynamic and ever-changing immigration and travel laws

5. Projects Delivery related risk

a. Related to change meeting timelines, estimated effort

b. Quality of deliverables

6. Information Security Risks

a. Loss of Happiest Minds or Customer Intellectual Property (Assets, Code, documents etc.,)

b. Privacy breach, sharing of sensitive data without requisite approvals

c. Phishing, Malware and Ransomware attacks

d. New tech adoption e.g. AI and Generative AI

Oversight of the framework is provided by the Risk Management Committee of the Board of Directors. A Risk Management Policy has also been adopted based on this framework, copy of the policy is available at https://www.happiestminds.com/ investors/policy-documents/

People Practices

Guided by the 8C Model, which emphasizes well-being, happiness, and innovation, our People Practices team has effectively established a standout brand identity amidst a year marked by intense talent competition, business shifts, and market adjustments within the IT sector. Despite these challenges, we achieved a net increase in team members, with our attrition rate impressively falling to 13.01%—well below our targeted 18%. This achievement is a testament to our forward-thinking adoption of technology and best practices, which not only kept us ahead in a dynamic environment but also bolstered our brand, making us a preferred employer. Our efforts are reflected in our Glassdoor rating, where members and alumni have recognized us with a commendable score of 4, showcasing the positive impact of our strategies and initiatives.

This year, our focus was centered around five strategic pillars aimed at strengthening our organization and enhancing our workforce capabilities.

Firstly, we concentrated on building our organization for scale, aiming to develop a global and distributed workforce. This effort encompassed enhancing our people practice capabilities across various domains such as benefits, engagement processes, and compliance, while also preparing for future mergers and acquisitions to ensure a seamless integration of operations, personnel, and culture. A key aspect of this pillar was the emphasis on strengthening our compensation framework, particularly for our IMSS and US operations, and customizing benefits to cater to different employee segments to boost retention rates. Initiatives like completing the SMI Integration and launching tailored compensation frameworks for our Centre of Excellence were integral to our comprehensive approach to organizational design and talent management.

In our pursuit of digital transformation and people analytics, we introduced the MySmiles HRMS and focused on leveraging technology through automation and the application of AI in our HR practices. These measures aimed to enhance efficiency, provide insights, and create a more engaging and seamless experience for our employees from their onboarding through their career development.

Developing leadership and people capabilities was another critical area of focus. Through programs like the I3 Talent Transformation and the Global Leadership Development Program (GLDP), complemented by Hogan Assessments, we invested in cultivating a robust leadership pipeline and enhancing talent across the organization. Initiatives such as executive mentoring programs and the creation of specialized tracks for sales enablement and managerial development demonstrated our commitment to nurturing leadership and talent.

Our culture-building strategy emphasized happiness evangelism, health and well-being, and the alignment of our organizational purpose and vision with employee aspirations. By expanding happiness touchpoints, enhancing participation in volunteering activities, and strengthening our listening programs like Mithra and Little Mithra, we aimed to foster a supportive and engaged community.

Our talent engagement initiatives focused on promoting diversity and inclusion, plans to launch a Women Mentoring Program by H1 FY25 and execute various gender diversity initiatives. This pillar also aimed at reintroducing clubs and committees, enhancing workforce diversity through PWD hiring, and conducting a gender pay parity exercise. By creating more engaging office spaces and fostering camaraderie across locations, we committed to creating an inclusive and dynamic work environment.

Thanks to our focused efforts this year, we achieved remarkable successes across various domains of our operations.

In the area of Talent Management, we launched the I3 Talent Transformation program in collaboration with NIIT and Hogan, benefiting 25 Business Analysts, 27 Delivery Managers, and 36 Architects. This initiative demonstrates our commitment to talent enhancement. Additionally, the introduction of the GLDP, which included a Hogan workshop for 42 senior leaders, marks our investment in the future leadership of our organization.

Our approach to Compensation & Benefits underwent a thorough review, particularly in the UAE, where we integrated a competitive US compensation framework. Innovations like onsite salary advances, enhanced travel allowances, improved life insurance covers, and expanded corporate partnerships reflect our strategic intent to offer a competitive and comprehensive benefits package.

In the realm of Wellness Programs, our dedication to employee wellness was underscored by the successful execution of 36 Total Wellness Events, with participation from 2868 employees and an outstanding satisfaction rating of 4.5 out of 5. The launch of Ekincare, a health and wellness app, along with the completion of 58 annual health check-ups, showcases our holistic approach to employee health and engagement.

Our Happiness Evangelism efforts, through initiatives such as Mithra and the introduction of resources like the Seven Spokes of Happiness, Mindfulness Matters, and the Happiness Compass magazine, have nurtured a culture emphasizing mental and emotional well-being. The launch of Little Mithra for younger minds and the engagement of 15,652 participants with an 85% happiness rate on the Happometer since January 2023 further highlight our dedication to this cause.

Celebrations, Roadshows, and Connects have been pivotal in our engagement strategy. We organized 24 PoSH Awareness Roadshows, launched MySmiles HRMS through dedicated roadshows, and held impactful Leadership Connects for 500 new hires. Celebratory events like Potluck, Biriyani Bash, Mango Mania, and the Happiest Minds Run, engaging over 1000 participants across four cities, significantly contributed to a vibrant workplace community.

Our Recognition & Rewards & Engagement initiatives were showcased during the 10th anniversary of Happiest Minds with a gala dinner, celebrating our journey alongside our members and their families. The Glitz 2023 Annual Awards and the release of a 10-year milestone coffee table book were significant in recognizing our teams contributions. Additionally, our Gratitude Week, featuring 9000+ messages sent to over 2800 members, underscored the culture of appreciation within our organization.

Operational Excellence was evident in our high onboarding satisfaction rates, robust audit compliance, and the efficient resolution of 89.9% of PP tickets within a day. The successful introduction of four key modules in the partner management system underlines our dedication to continuous improvement and operational integrity.

In Diversity & Inclusion (D&I), we proudly maintained a 28% gender diversity rate and expanded our Aura team to over 1596 members. Our focus on disability inclusion, high parental leave returns, and comprehensive D&I training for 3308 members illustrates our commitment to an inclusive environment where everyone feels valued.

Our Circle of Happiness initiative, through significant donations to Akshaya Patra, Idayangal Trust, and Daan Utsav for various NGOs, reflects our commitment to community welfare and extending the circle of happiness beyond our organization.

This year marked our participation and recertification in the Great Place to Work (GPTW) survey, a testament to our enduring commitment to excellence. Furthermore, Happiest Minds has been honoured with numerous awards over the past year, highlighting our standing as a premier organization in various domains. We were named among the Top 50 Indias Best Workplaces™ in Health and Wellness 2023 and Top 50 Indias Best Workplaces™ in IT & IT-BPM 2023 by GPTW, alongside being listed in the 100 Best Companies for Women in India 2023 by Avtar and Seramount, and also recognized as one of the Top 50 Indias Best Workplaces for Women™ 2023 by GPTW. Our achievements in innovation were spotlighted as we received the ‘Digital Transformation of the Year award at the IReC Awards 2023.

Our commitment as a leading IT organization and market leader is further illustrated through accolades such as the ‘Best Tech for Security Award at the 3rd Edition of the IDEA Awards, and our recognition by Zinnov Zones as a ‘Niche & Established player in Gen-AI Engineering Services. Additionally, our distinction as one of the ‘Top Firms to Work for in AI & Analytics and the recognition of Mr. Sridhar Mantha as the ‘AI Leader of the Year at the 3AI ACME Awards, alongside being acknowledged as a Rising Star in the ISGs Provider Lens™ Digital Engineering Services US Report 2023, underscores our commitment to innovation and leadership in the IT sector.

As we move forward, the People Practice Team remains dedicated to pushing the boundaries of whats possible, leveraging technology, fostering leadership, and nurturing a culture that aligns with our organizational values and aspirations. This strategic approach has not only contributed to our remarkable achievements in FY 2023-24 but also positions us for sustained success and impact in the years to come.

The People Practice Teams achievements in FY 2023-24 highlight our strategic and holistic approach to HR management, emphasizing well-being, innovation, and inclusivity. Our efforts have solidified our position as an employer of choice in the IT industry, setting a benchmark for excellence and strategic HR management. As we look to the future, we are committed to continuing our

journey towards operational excellence, talent development, and cultural enrichment, ensuring that Happiest Minds remains at the forefront of the IT industry.

Quality Management System (QMS)

1. Quality Policy

"Happiest Minds will consistently strive for customer happiness. We are committed to deliver excellence in our services by continually improving processes and systems, aiding in creating value to all our stake holders". Our Quality Policy is in alignment with our Mission statement.

Your Company this year has ventured into Medical device domain as part of the Healthcare Industry Group and has defined Quality Policy for Medical Devices.

We are committed to deliver Excellence in our services and enable the realization of safe, secure and clinically effective Medical Devices for its intended use, by adopting a risk-based process approach and continually improving processes and systems, aiding in creating value to all our stakeholders and ensuring regulatory compliance, leveraging our core technical competencies in hardware and software development.

2. QMS Framework

Our strategy for continual quality improvement is derived from our Vision, business needs, technology changes, customer feedback, suggestions, and process performance. Our quality processes are derived from industry best practices and are continually improved based on our experience, and our processes have been assessed by external accredited agencies. Your Company has received accreditation on international quality and process models, including ISO 9001:2015. In December 2021, your Company was recertified for ISO 9001:2015 with the external auditors applauding our focus on the digitization of internal processes. There was surveillance audit for ISO 9001:2015 in December 2022. In addition, your Company is certified to Information Security standards like ISO 27001:2013 and privacy standards like ISO 27701:2019 which guides our policies and procedures for protecting information security, our own software enablers and customers software enablers. To enhance our business capabilities and grow our business in the medical devices domain we have undergone year long journey of aligning QMS framework for Medical devices which also included aligning towards medical device standards of ISO 13485:2016. This would also help us align our process with medical regulatory standards of various regions. During the year under review, your Company got itself certified for ISO 13485:2016 standard.

To enhance our process towards various IT services provided by us to our customers we have started our journey of enhancing our QMS to align to ISO 20000:2018 standard. We plan for getting certified for this standard in the financial Year 2024-2025.

3. Engineering Practices.

Engineering practices form the crux of successful delivery. Our engineering practices help your Company deliver high-quality software to its customers as per the planned timelines and consistently earn their trust and enable customer happiness. We measure the satisfaction levels of our customers every year and have been consistently improving on the scores, year after year since inception. Our digital driven engineering practices have been well accepted by our customers with some of them adopting these practices in their internal processes. In this Financial year to enhance our data driven engineering practices we have started out journey towards integrating the measures captured by various tools by Integrated Metric dashboard which would help our teams to take quicker decisions and deliver with Agility.

We have adopted Agile practices to support our Mission of "Born Digital . Born Agile".

4. Systems Driven

Our projects are managed using systems to track project management practices and engineering practices for projects managed within your Company. This is in line with our digital focus on processes and practices. Our Integrated Project Management system helps the delivery to have an end-to-end view of the project at all levels of the management to provide enhanced delivery value to our customers.

This year we have upgraded our Project management system to the latest platform including moving our entire setup to cloud. This enhanced system will help cater to our 10-year vision along with providing a platform for more Agile processes and practices. Along with our well established Business Intelligence (BI) platform which helps us to provide repots and Dashboards for well informed decision making we have also added No code low code platforms to automate processes and bring in controls for enhanced delivery.

5. Code Quality

Apart from regular code reviews process our projects extensively use Code Quality tools to check the code on various parameters. We have defined Code Quality Index based on the Code Quality metrics and this helps us to deliver high-quality outputs to our customers. We have created groups for focused code review and critical codes will be undergoing this code review. To enhance coding practices, we have introduced new repository system which helps to manage code in more structured and secure way.

6. Rapid Iteration and Experimentation

Fail fast and learn quickly - Agile teams develop solutions through fast cycles of field testing and learning from mistakes. Products and solutions are developed iteratively using minimum viable products i.e., minimum set of features needed to test and learn. This also helps our customers to get an early feel for the products/solutions that they will be using and also help reduce the time for production release. To enhance our testing practices, we have introduced new process and tools.

Your Company has deployed DevOps practices which include building pipelines for continuous integration, code analysis, testing and deployment of software solutions developed. Some of the practices like continuous deployment, pushing a new release into production based on passing of all the tests, checking code and software quality in the build pipeline and leveraging the build pipeline to get feedback on the health of their software, etc. help your Company to decrease the turnaround to the customers and build better-quality products.

7. Information Transparency

The accessibility, accuracy, and availability of quality, unfiltered data which are critical for organizational agility is deployed across the organization. Various data pipelines and reports are built to enable team members to easily share their ideas and results of their work with those who might benefit from the information.

8. Continuous Learning

At your Company, continuous learning happens on both the individual and organizational levels. At the organizational level, structured processes and tools have been enabled to share knowledge. This helps the information learned through experimentation and experience is available across the organization. There various platforms created to ideate and share the learning withing the organization.

9. Involve to Evolve

We drive continual improvement programs by actively engaging team members across the organization. Focused groups will be formed to make the resources part of the continual improvement journey to bring in the Agile community of practice, technical experts from practice, the estimation work group and the internal audit community. The continuous measurement of benefits accrued from your Companys process improvement initiatives has brought to light a significant reduction in rework, an increase in productivity, adherence to schedules and budget, and significant added value, culminating in customer delight. We have also piloted an excellent framework named "My Customer Happy Customer" (MCHC) which provides balanced view of projects rolled up to customers on various aspects.

10. Rewards and Recognitions

The team members/teams are rewarded for their exemplary work towards process improvements and customer delight with awards such as Code excellence award, Service Delivery excellence award, etc.

11. Customer Connect

Your Company has a customer experience framework to understand the behaviours, needs and expectations of individual customers which helps in developing a roadmap for continuous engagement and enriching the customer relationship. As part of this framework, we conduct Customer Happiness Survey, Customer Pulse, bringing Value Adds, etc. We also make sure we have regular reviews with our customers to provide status on current engagement and discuss how we could further help our customers in their IT journey.

Along with feedback we also have introduced feedforward mechanisms to understand various needs of customers as part of our Customer Happiness Survey and hence better align our strategies towards customer needs.

Whenever there is a customer escalation related to delivery or staffing, the manager concerned will raise the escalation in the project management system. An action item for the same is created and assigned to the respective team member to track and monitor the status of the escalation. The closure of the escalation is communicated back to the customer.

Internal Control System

Your Company has deployed adequate Internal Control Systems in place to ensure the smooth functioning of its business. The processes and the systems are reviewed constantly and changed to address the changing regulatory and business environment. The Control Systems provide a reasonable assurance of recording the transactions of its operations in all material aspects and of providing protection against misuse or loss of the Companys assets. The ERP system which the Company implemented has helped in further strengthening the internal control systems that are in place.

The existing Internal Control Systems and their adequacy are frequently reviewed and improved upon to meet the changing business environment. The Statutory Auditors as well as the Internal Auditors periodically review the Internal Control Systems, Policies and Procedures for their adequacy, effectiveness and continuous operation for addressing risk management and mitigation strategies.

Conservation of Energy, Research and Development, Foreign Exchange Earnings and Outgo

Your Company has made the necessary disclosures in Annexure V to this Report in terms of Section 134(3) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014.

Employees Remuneration

As per the proviso to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the statement containing the names and other details of employees drawing more than 10.2 million per financial year or 0.85 million per month, as the case may be, are set out in Annexure VI to the Boards Report. Further, as per the proviso to Rule 5(3) of the said Rules, the particulars of employees posted and working outside India not being Directors or their relatives, need not be included in the statement but, such particulars shall be furnished to the Registrar of Companies. Accordingly, the statement included in this Report does not contain the particulars of employees who are posted and working outside India. If any Member is interested in obtaining a copy thereof, such Member may write to the Company in this regard.

Directors Responsibility Statement

Pursuant to the requirement under Section 134 (5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed that:

(i) I n the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

(ii) Accounting policies have been selected and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year 2023-24 and of the profit or loss of the Company for that financial year.

(iii) Proper and sufficient care have 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.

(iv) The Annual Accounts have been prepared on a going concern basis.

(v) Your Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operate effectively.

(vi) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating efficiently.

Secretarial Standards

During the year under review, your Company has duly complied with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Cost Audit

The provisions of Companies (Cost Records and Audit) Rules, 2014 are not applicable to your Company.

Insolvency and Bankruptcy Code

During the year, there was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 hence the requirement to disclose the details of application made or proceeding pending at the end of financial year is not applicable.

Disclosure under Rule 8(5)(xii) of the Companies (Accounts) Rules,2014

During the year, there were no instances where your Company required the valuation for one time settlement or while taking the loan from the Banks or Financial institutions.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act")

The POSH Act stands as a crucial legislation in India dedicated to preventing sexual harassment. It was put in place to ensure a safe and secure working environment for women and to deter harassment in the workplace. We believe that POSH Act has played a significant role in promoting teamwork, diversity and trust within our Company. At Happiest Minds, we are committed to fostering a safe and professional work setting. In addition to maintaining a gender-neutral Anti-Sexual Harassment Policy, we comply with the regulations of the POSH Act. To address complaints related to sexual harassment, we have established an Internal Committee. Further, to support our Internal Committee, we have appointed a legal expert specializing in the subject matter.

Following steps have been taken as a part of the ensuring that we comply to the statutory nature of the POSH Act this year:

POSH Committee: From the inception of the POSH Act, your Company has been compliant with the establishment of the POSH Committee. Complaints of sexual harassment at work will be dealt with judiciously and expeditiously by this committee. The committee comprises female and male members, of whom more than 50% are women. The committee is headed by the Presiding officer and representatives from each business and location.

Training: Based on the requirement of the POSH Act, we have initiated training and certification for all our employees and partners to create awareness about sexual harassment in the workplace and the POSH Act. We have ensured that all our employees and partners who join us have been trained on the POSH Act in India through our online module. All employees and partners completing one year in the Organisation will go through the refresher training. POSH Training is a mandatory training at Happiest Minds and the following are some of the modules that have been covered.

• Walk through of the POSH Act

• What is covered under sexual harassment

• Gender based scenarios under POSH

• Sexual Harassment during remote working

• How to raise a complaint

• Investigation procedure

Please Note: A POSH Refresher is conducted once every two years at Happiest Minds. Failure to complete the mandatory training within the suggested time limit will be reflected under the Performance review of the concerned employee or partner as non-complaint.

Complaints: We have received no POSH complaints during the year under review. Regardless of no complaints, we have ensured that we have created awareness of POSH through our various outreach programs.

Disciplinary action: No disciplinary action was taken as there was no complaint registered during the year under review.

Compliance: As required under POSH Act, we have filed an Annual Report with the competent authorities. All required documents in compliance with the POSH Act have been filed. There have been no non-conformities or observations identified by our competent authorities.

Other Action taken to create awareness: During the year under review, majority of our employees and partners have transitioned to working from the office after operating in a hybrid mode for most of last year. We maintained consistent communication by sharing information and guidelines on POSH compliance. Additionally, we conducted a POSH awareness month, featuring roadshows, posters, and speeches to educate employees and partners about POSH regulations. To reinforce compliance, we prominently displayed POSH posters alongside the statutory boards. All senior leaders have completed training on POSH, showcasing their dedication to nurturing a workplace culture that is free from harassment.

All members of the POSH Committee have been trained, certified and are compliant to the POSH Acts needs to be a part of the Committee.

Full Disclosure Statement: While the provision of the POSH Act covers and protects the women members who are subjected to sexual harassment, we have taken cognizance to expand the scope of our sexual harassment policy to cover all employees and partners irrespective of gender, contractual status, caste, class, race, ethnicity or affinity, however, within the confines of the POSH Act. Companys Policy also applies to visitors, and casual employees. Additionally, all complaints (if any) received by the Internal Committee are reviewed and kept confidential.

Acknowledgements

Your Directors have pleasure in recording their appreciation for all the guidance and co-operation received from all its customers, Members, investors, vendors, partners, bankers, government authorities and other stakeholders for their consistent support to your Company in its operations. Your Directors take this opportunity to place on record their sincere appreciation of the dedication, contribution and commitment of all Happiest Minds in Companys growth.