HFCL LIMITED — Capital/Financing Update 2025

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HFCL/SEC/24-25 February 03, 2025

BSE Ltd. National Stock Exchange of India Ltd. 1[st] Floor, New Trading Wing, Rotunda Building Exchange Plaza, 5[th] Floor, C – 1, Block G Phiroze Jeejeebhoy Towers, Dalal Street, Fort Bandra – Kurla Complex, Bandra (E) Mumbai – 400001 Mumbai – 400051 [email protected] [email protected] Security Code No.: 500183 Security Code No.: HFCL

• RE: Regulation 32(6) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”).

Subject: Monitoring Agency Report on the utilisation of proceeds raised through Qualified Institutions Placement for the Quarter ended December 31, 2024

Dear Sir(s)/ Madam,

We would like to inform that the Company had raised funds by way of allotment of 5,10,14,491 (Five Crores Ten Lakhs Fourteen Thousand Four Hundred and Ninety One) equity shares of face value of Re.1/- each, to qualified institutional buyers ("QIBs") , at a price of Rs.69/- per Equity Share (including premium of Rs.68/- per Equity Share) , pursuant to the resolution passed by the Board of Directors dated September 02, 2022, special resolution passed by the Shareholders at their 35[th] Annual General Meeting (AGM) held on 30[th] September, 2022, the preliminary placement document dated August 28, 2023, the placement document dated August 31, 2023 and resolution of the Fund Raising Committee of the Board of Directors dated August 31, 2023 (the “ Issue ”).

In terms of Regulations 32(6) of the SEBI Listing Regulations read with Regulation 173A(4) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("SEBI ICDR Regulations"), please find enclosed the Monitoring Agency Report for the quarter ended December 31, 2024, issued by CARE Ratings Limited, Monitoring Agency, appointed to monitor the utilisation of proceeds raised through issuance of equity shares by way of Qualified Institutions Placement.

You are requested to take the above information on records and disseminate the same on your respective websites.

Thanking you.

Yours faithfully, For HFCL Limited

Digitally signed Mano by Manoj Baid Date: 2025.02.03 18:32:09 +05'30' j Baid

(Manoj Baid) President & Company Secretary

Encl.: Monitoring Agency Report

Regd. Office & Works : 8, Electronics Complex, Chambaghat, Solan-173213 (H.P.) Tel: (01792) 230644, 230645, 230647 Fax: (01792) 231902 Corporate Identity Number: L64200HP1987PLC007466

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No. CARE/NRO/GEN/2024-25/1110

Monitoring Agency Report

The Board of Directors HFCL Limited

8, Commercial Complex, Masjid Moth, Greater Kailash – II, New Delhi – 110048, India

February 03, 2025

Dear Sir/Ma’am,

- Monitoring Agency Report for the quarter ended December 31, 2024 in relation to the Qualified Institutions Placement of Equity Shares of HFCL Limited (“the Company”)

We write in our capacity of Monitoring Agency for the Qualified Institutions Placement of Equity shares for the amount aggregating to Rs. 352.00 crore of the Company and refer to our duties cast under 173A of the Securities & Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations.

In this connection, we are enclosing the Monitoring Agency Report for the quarter ended December 31, 2024 as per aforesaid SEBI Regulations and Monitoring Agency Agreement dated August 28, 2023.

Request you to kindly take the same on records.

Thanking you,

Yours faithfully,

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Bhawna Rustagi

Assistant Director [email protected]

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CARE Ratings Limited 9th floor, C-001/A2, Berger Towers, Sector 16B, Noida, 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Gautam Budh Nagar, Uttar Pradesh -201301 Eastern Express Highway, Sion (East), Mumbai - 400 022 Phone: +91-120-4452000 Phone: +91-22-6754 3456 Email: [email protected] • www.careedge.in

CIN-L67190MH1993PLC071691

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Report of the Monitoring Agency (MA)

Name of the issuer: HFCL Limited

For quarter ended: December 31, 2024 Name of the Monitoring Agency: CARE Ratings Limited (a) Deviation from the objects: Nil

(b) Range of Deviation: Not Applicable

Declaration:

We declare that this report provides an objective view of the utilization of the issue proceeds in relation to the objects of the issue based on the information provided by the Issuer and information obtained from sources believed by it to be accurate and reliable. The MA does not perform an audit and undertakes no independent verification of any information/ certifications/ statements it receives. This Report is not intended to create any legally binding obligations on the MA which accepts no responsibility, whatsoever, for loss or damage from the use of the said information. The views and opinions expressed herein do not constitute the opinion of MA to deal in any security of the Issuer in any manner whatsoever. Nothing mentioned in this report is intended to or should be construed as creating a fiduciary relationship between the MA and any issuer or between the agency and any user of this report. The MA and its affiliates also do not act as an expert as defined under Section 2(38) of the Companies Act, 2013.

The MA or its affiliates may have credit rating or other commercial transactions with the entity to which the report pertains and may receive separate compensation for its ratings and certain credit related analyses. We confirm that there is no conflict of interest in such relationship/interest while monitoring and reporting the utilization of the issue proceeds by the issuer, or while undertaking credit rating or other commercial transactions with the entity.

We have submitted the report herewith in line with the format prescribed by SEBI, capturing our comments, where applicable. There are certain sections of the report under the title “Comments of the Board of Directors”, that shall be captured by the Issuer’s Management / Audit Committee of the Board of Directors subsequent to the MA submitting their report to the issuer and before dissemination of the report through stock exchanges. These sections have not been reviewed by the MA, and the MA takes no responsibility for such comments of the issuer’s Management/Board.

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Signature:

Name and designation of the Authorized Signatory: Bhawna Rustagi Designation of Authorized person/Signing Authority: Assistant Director

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CARE Ratings Limited 9th floor, C-001/A2, Berger Towers, Sector 16B, Noida, 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Gautam Budh Nagar, Uttar Pradesh -201301 Eastern Express Highway, Sion (East), Mumbai - 400 022 Phone: +91-120-4452000 Phone: +91-22-6754 3456 Email: [email protected] • www.careedge.in

CIN-L67190MH1993PLC071691

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1) Issuer Details:

Name of the issuer Name of the promoter Industry/sector to which it belongs

: HFCL Limited : Mr. Mahendra Nahata : Telecommunications - Telecom Equipment & accessories

2) Issue Details

Issue Period : August 28, 2023 to August 31, 2023 Type of issue (public/rights) : Private placement Type of specified securities : Equity Shares IPO Grading, if any : Not applicable Issue size (in Rs. crore) : Rs. 352.00 crore

3) Details of the arrangement made to ensure the monitoring of issue proceeds:

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Source of information / Comments
certifications considered Comments of the of the
Particulars Reply
by Monitoring Agency for Monitoring Agency Board of
preparation of report Directors
Whether the means of finance for the disclosed objects -
Not applicable Not applicable Not applicable
of the issue have changed?
Is there any major deviation observed over the earlier -
Not applicable Not applicable Not applicable
monitoring agency reports?
Whether all Government/statutory approvals related to
Not applicable Not applicable Not applicable
the object(s) have been obtained?
Whether all arrangements pertaining to technical
Not applicable Not applicable Not applicable
assistance/collaboration are in operation?
Are there any favorable/unfavorable events affecting
No Not applicable Not applicable
the viability of these object(s)?
Is there any other relevant information that may
No Not applicable Not applicable
materially affect the decision making of the investors?
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• Chartered Accountant certificate from Oswal Sunil & Company dated January 13, 2025

a) Devia�on in the objects or purposes for which the funds have been raised

4) Details of objects to be monitored:

(i) Cost of objects –

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Comments of the
Source of information/ Amount Amount utilised in Rs. Crore
Board of Directors
certifications proposed
Sr. Item As at At the Unutilised Comments of the
considered by in the During Reasons Proposed
No Head beginning end of amount Monitoring Agency
Monitoring Agency for Offer the for idle course of
of the the
preparation of report Document quarter funds action
quarter quarter
Chartered Accountant
General Nil for the quarter ended
certificate, Bank
5 Corporate 33.46 33.65^ - 33.65^ - December 31, 2024.
statements, Placement
Purposes
Document
Total 342.50 270.19 0.31 270.50^ 72.19
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• Chartered Accountant certificate from Oswal Sunil & Company dated January 13, 2025

^ As outlined in the placement document, the anticipated expenses for the issue were projected at Rs. 9.50 crore. However, the expenses incurred as of December 31, 2023, amounted to Rs. 9.31 crore. The remaining Rs. 0.19 crore, initially held in escrow, was transferred to the monitoring account in Q3FY24. Subsequently, the company utilized this sum as GCP during the quarter ended March 31, 2024, in accordance with the placement document.

(iii) Deployment of unutilized QIP proceeds:

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Amount in (Rs. Source of information / certifications considered by
Sr. No. Name of the Bank Type of account
Crore) Monitoring Agency for preparation of report
1 State Bank of India Fixed Deposit – 2568 10.44
2 State Bank of India Fixed Deposit – 2273 10.44
3 State Bank of India Fixed Deposit – 2035 10.44
4 State Bank of India Fixed Deposit – 1803 10.44
5 State Bank of India Fixed Deposit – 1440 10.44
6 State Bank of India Fixed Deposit – 1255 5.21 Chartered Accountant certificate, Fixed Deposit Receipts (FDR),
7 State Bank of India Fixed Deposit – 8493 10.55 Monitoring Account Statement, Bank Certificate
8 State Bank of India Fixed Deposit – 1098 3.08
8 State Bank of India Fixed Deposit – 0394# 4.69
9 State Bank of India Monitoring account 1.06
Total 76.77^
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• *Chartered Accountant certificate from Oswal Sunil & Company dated January 13, 2025

^ Total unu�lized amount is Rs 76.77 crores including Interest earned on FD’s of Rs 4.58 crore.

# During Q3FY25, company has liquidated FDR (FDR No.42462953614) of Rs. 5 cr and received total proceeds of Rs. 5.25 cr (incl. aggregate interest of Rs. 0.25 cr) in CC account on November 07, 2024. Subsequently, the company has utilised proceeds of Rs. 0.31 crore out of the same towards the capital expenditure from the CC account itself and then recreated the FD (total FD amount of Rs. 5 crores vide FDR no. 43663900394 out of which unutilised is Rs. 4.69 crore) on December 30, 2024 from the cash credit account balance. Since the funds in the

CARE Ratings Limited

9th floor, C-001/A2, Berger Towers, Sector 16B, Noida, 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Gautam Budh Nagar, Uttar Pradesh -201301 Eastern Express Highway, Sion (East), Mumbai - 400 022 Phone: +91-120-4452000 Phone: +91-22-6754 3456 Email: [email protected] • www.careedge.in

CIN-L67190MH1993PLC071691

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interim were lying in the cash credit account where there were other day to day transactions happening for the company, hence CARE team cannot certify that the amount of the FD which was recreated are against the actual MA proceeds which were credited.

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Amount
Type of instrument and name of the Earning Return on Market Value as at the end of
Sr. No. invested Maturity date
entity invested in (Rs. crores) Investment (%) quarter
(Rs. crores)
Fixed Deposit, State Bank of India 10.44 6.25%
1 January 25, 2025 NA NA
(42547132568)
Fixed Deposit, State Bank of India 10.44 January 25, 2025 6.25%
2 NA NA
(42547132273)
Fixed Deposit, State Bank of India 10.44 January 25, 2025 6.25% NA
3 NA
(42547132035)
Fixed Deposit, State Bank of India 10.44 January 25, 2025 6.25% NA
4 NA
(42547131803)
Fixed Deposit, State Bank of India 10.44 January 25, 2025 6.25% NA
5 NA
(42547131440)
Fixed Deposit, State Bank of India 5.21 March 25, 2025 6.25% NA
6 NA
(42827311255)
Fixed Deposit, State Bank of India 10.55 February 22, 2025 6.25% NA
7 NA
(42459678493)
Fixed Deposit, State Bank of India 3.08 January 04, 2025 6.25%
8 NA NA
(42861881098)
Fixed Deposit, State Bank of India 4.69 December 30, 2025 7.00%
8 NA NA
(43663900394)
9 Monitoring Account, State Bank of India 1.06 NA NA NA NA
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– (iv) Delay in implementation of the object(s)

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Completion Date Comments of the Board of Directors
Delay (no. of days/
Objects As per the Placement Proposed course of
Actual months) Reason of delay
document action
Funding Working Capital requirements Fiscal 2024 September 2023 Not applicable
General corporate purposes From time to time March 2024 Not applicable
Note: Capital expenditure is expected to be completed by July 2025 however, implementation schedule is not available for the capital expenditure.
5) Details of utilization of proceeds stated as General Corporate Purpose (GCP) amount in the offer document:
Source of information /
Amount certifications considered by Comments of the
Sr. No Item Head^ Comments of Monitoring Agency
in Rs. Crore Monitoring Agency for preparation Board of Directors
of report
^The objects of the issue may include, but not restricted towards
strategic initiatives, investments in subsidiaries of our Company,
opening or setting up new offices, business development initiatives
including marketing & branding expenses, acquiring fixed assets
(other than those mentioned as part of capital expenditure),
meeting any expense of our Company, including salaries and
wages, rent, administration, insurance, repairs and maintenance,
General Corporate Chartered Accountant certificate, Bank payment of taxes and duties, ESG / renewable energy, meeting
1 33.46
Purposes statement, and Placement Document expenses incurred in the ordinary course of business and towards
any exigencies. Accordingly, company has expensed the GCP over
ongoing general corporate expenses.
The allocated amount of Rs. 33.46 cr and balance Rs. 0.19 crores
of issue expenses were already expensed as per object of issue.
Nil amount incurred for quarter ended December 31, 2024.
Total 33.46
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• Chartered Accountant certificate from Oswal Sunil & Company dated January 13, 2025

^ Section from the offer document related to GCP: Mentioned above.

CARE Ratings Limited

4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai - 400 022 Phone: +91-22-6754 3456 Email: [email protected] • www.careedge.in

9th floor, C-001/A2, Berger Towers, Sector 16B, Noida, Gautam Budh Nagar, Uttar Pradesh -201301 Phone: +91-120-4452000

CIN-L67190MH1993PLC071691

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Disclaimers to MA report:

a) This Report is prepared by CARE Ra�ngs Ltd (hereina�er referred to as “Monitoring Agency/MA” ). The MA has taken utmost care to ensure accuracy and objec�vity while developing this Report based on the informa�on provided by the Issuer and informa�on obtained from sources believed by it to be accurate and reliable. The views and opinions expressed herein do not cons�tute the opinion of MA to deal in any security of the Issuer in any manner whatsoever.

b) This Report has to be seen in its en�rety; the selec�ve review of por�ons of the Report may lead to inaccurate assessments. For the purpose of this Report, MA has relied upon the informa�on provided by the management /officials/ consultants of the Issuer and third-party sources like statutory auditors (or from peer reviewed CA firms) appointed by the Issuer believed by it to be accurate and reliable.

c) Nothing contained in this Report is capable or intended to create any legally binding obliga�ons on the MA which accepts no responsibility, whatsoever, for loss or damage from the use of the said informa�on. The MA is also not responsible for any errors in transmission and specifically states that it, or its directors, employees do not have any financial liabili�es whatsoever to the users of this Report.

as an expert to the extent defined under Sec�on 2(38) of the Companies Act, 2013. While the MA has obtained informa�on from sources it believes to be reliable, it does not perform an audit and undertakes no independent verifica�on of any informa�on/ cer�fica�ons/ statements it receives from auditors (or from peer reviewed CA firms), lawyers, chartered engineers or other experts, and relies on in its reports.

the report pertains. As an example, the MA may rate the issuer or any debt instruments / facili�es issued or proposed to be issued by the issuer that is subject ma�er of this report. The MA may receive separate compensa�on for its ra�ngs and certain credit-related analyses, normally from issuers or underwriters of the instruments, facili�es, securi�es or from obligors.

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CARE Ratings Limited 9th floor, C-001/A2, Berger Towers, Sector 16B, Noida, 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Gautam Budh Nagar, Uttar Pradesh -201301 Eastern Express Highway, Sion (East), Mumbai - 400 022 Phone: +91-120-4452000 Phone: +91-22-6754 3456 Email: [email protected] , www.careedge.in

CIN-L67190MH1993PLC071691