The Board of Directors have pleasure in presenting the 07^th Annual Report of the Company along with audited financial statements for the financial year ended March 31, 2023.

1. FINANCIAL RESULTS

The Company's financial (Standalone) performance for the year ended March 31, 2023 is summarised below:

2. RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS

During the year under review, the Company recorded revenue of D5789.42 lakhs from its operation as against D 2233.27 lakhs in the previous financial year 2021-22. Other Income during the current financial year 2022-23 was D84.43 lakhs as against D3.33 lakhs in the previous financial year 2021-22. The Company recorded Profit before Tax of D2177.58 lakhs for the financial year 2022-23 as against D 655.11 lakhs for the previous financial year 2021-22. The net profit for the financial year 2022-23 stood at D1619.56 lakhs as against D490.33 lakhs in the previous financial year.

3. BUSINESS OVERVIEW

The Visual Effects (VFX) industry in India has been transitioned from being an outsourcing partner to being a global competitor in its own right. The industry is witnessing tremendous growth with the increase in demand for high-quality visuals

coupled with technological advancements and government initiatives to encourage innovation and entrepreneurship in this sector.

As a TPN Certified studio, the Company offers a wide range of VFX services. The company's specializations include (i) Completing a Shot with final compositing (ii) Creating 3D elements, photoreal creatures, and environments (iii) Rig/Wire removal, paint cleanup, rotoscopy (iv) 3D matchmove (v) 3D animation (storyboard, animation) (vi) Pre-visualization Game cinematics (viii) Fire / water Fx and other natural phenomena 3D ride animation.

The company provides high end visual effects solutions for commercials, feature films and web series globally, through its' offices based in India, and is contemplating to establish its presence in US, Dubai, Canada and London to cater to the Europe, Middle East and UK markets. Presently, the Company has operating studios at Chennai, Hyderabad and

Mumbai besides having marketing teams based in Vancouver, Montreal and Los Angeles to cover the North American markets.

A detailed overview of the business is provided in the Management Discussion & Analysis Report which forms part of this report

4. DIVIDEND

Considering the capital requirement for expansion and growth of business operations and to augment working capital requirements, the Board of Directors do not recommend any dividend on the Equity shares for the financial year 2022-23.

To bring transparency in the matter of declaration of dividend and protect the interests of investors, the company had adopted a Dividend Policy since listing of its shares. The policy has been displayed on the Company's website at link https:// phantomfx.com/Phantomfxcms/InvestorUpfile/ P11_DividendDistributionPolicy.pdf

I n the absence of any declaration of dividend in the past, the Company does not have any unpaid/ unclaimed dividend coming under the purview of Section 124(5) of the Act to be transferred to Investors Education and Protection Fund (“IEPF") of the Central Government.

5. TRANSFER TO RESERVES

There is no amount proposed to be transferred to reserves during the year under review.

6. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report, which forms part of this report.

7. AWARDS & RECOGNITIONS • VAM Summit 2023

(Visual Film Exchange Summit)

S Best VFX Shot Award for the Movie, Dangerous

S Best Simulation Effects for the movie Beast S Best use of Previsualization for the movie Beast

• Excellence In Animation and Visual Effects In Times Business Awards 2022

• Company of the Year In Outlook Business ICON Awards 2023,

• Outstanding Young Person of the year in India at the 67^th JCI India (Junior Chamber International) 2022 National Convention

• VFX excellence award at the IndiaJoy Summit 2022

8. CHANGE IN STATUS OF THE COMPANY

The Company was converted into a Public Limited Company pursuant to approval of the Shareholders at an Extraordinary General Meeting held on July 21, 2022 and consequently, the name of our Company was changed to “Phantom Digital Effects Limited" and a Fresh Certificate of Incorporation consequent upon conversion from Private Company to Public Company was issued by Registrar of Companies, Chennai dated July 29, 2022. The Corporate Identification Number of our Company is L92100TN 2016PLC103929.

9. CHANGE IN THE NATURE BUSINESS

There has been no change in the nature of business of the Company in the Financial Year under review.

10. CHANGE IN CAPITAL STRUCTURE

During the year, the Authorised Share Capital of the company has been increased two times i.e., from D5,00,000 (Rupees Five Lakhs) divided into 50,000 equity shares of D10 each to D7,00,00,000 (Rupees Seven Crores) divided into 70,00,000 equity shares of D10 each thereafter from D7,00,00,000 to D12,00,00,000 (Rupees Twelve Crores) divided into 1,20,00,000 equity shares of D10 each. Consequential amendments were made in the Memorandum and Articles of Association of the Company.

11. ISSUE OF SHARES, INCLUDING DISCLOSURE ABOUT ESOP AND SWEAT EQUITY SHARE:

a. BUY BACK OF SECURITIES :- The Company has not bought back any of its securities during the year under review.

b. SWEAT EQUITY:- The Company has not issued any Sweat Equity Shares during the year under review.

c. BONUS SHARES:- During the year, the Company has issued bonus shares to its shareholders , in the ratio of 899 : 1, i.e., Eighty Hundred and Ninety Nine (899) shares of D10/-for every One (01) existing equity shares by

capitalizing a sum of D8,99,00,000/- (Rupees Eight Crores Ninety Nine Lakhs only) out of D9,10,00,000/- (Rupees Nine Crores Ten Lakhs Only) standing to the credit of free reserves as on June 30, 2022.

d. EMPLOYEES STOCK OPTION PLAN:- The

Company has not provided any Stock Option Scheme to the employees.

e. INITIAL PUBLIC OFFER (“IPO”) :- During the year under review, the Company has successfully completed the Initial Public Offer (IPO). The offer to the public consisted of fresh issue of shares to the tune of 26,40,000 as well as an offer for sale of 4,23,600 shares from the promoter shareholders. The Company raised D 2508 lakhs through IPO wherein 26,40,000 equity shares of D10/- each at a premium of D85/- per shares was offered to the public for subscription. The issue was oversubscribed by 234 times. The equity shares got listed on October 21, 2022 on the SME Platform of National Stock Exchange of India Limited viz., NSE EMERGE

f. ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS AS TO DIVIDEND, VOTING OR OTHERWISE:- The Company has not issued any equity shares with differential rights as to dividend, voting or otherwise.

g. ISSUE OF SHARES (INCLUDING SWEAT EQUITY SHARES) TO EMPLOYEES OF THE COMPANY UNDER ANY SCHEME:- The

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

The paid-up share capital of the Company as on March 31, 2023 is D11,64,00,000/- divided into 1,16,40,000 equity shares of Re.10/- each

12. UTILIZATION OF FUNDS RAISED THROUGH PUBLIC ISSUE

The Company had raised funds through Initial Public Offer (IPO) during October 2022 where the equity shares are listed on EMERGE Platform of National Stock Exchange of India Ltd. The proceeds of aforesaid issue is being utilized, for the purpose for which it was raised by the Company in accordance with the terms of the issue.

The Company has opened 3 (three) new studios at Chennai, Mumbai, and Hyderabad, considering the opportunities and our expertise in the VFX business and in order to cater to the demand and increase the

market positioning of the company. The company has entered into formal lease/rental agreements for occupying the required space for setting up of these new studios.

There was no deviation(s) or variation(s) in the utilization of public issue proceeds from the objects as stated in the prospectus dated October 18, 2022

13. PUBLIC DEPOSITS

The Company has not accepted any deposits from public falling within the ambit of section 73 and Section 76 of the Act, read with the Companies (Acceptance of Deposits) Rules, 2014. Hence, no disclosure is required under Rule 8(5)(v) and (vi) of the Companies (Accounts) Rules, 2014.

14. BORROWINGS

As on 31^st March 2023, an amount of D729.10 lakhs is outstanding towards borrowings, which comprises of both secured and unsecured loans.

15. DIRECTORS' RESPONSIBILITY STATEMENT

I n terms of Section 134(3)(c) of the Companies Act, 2013, with respect to Directors' Responsibility Statement it is hereby confirmed that:

a) I n the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards read with requirements set out under Schedule III to the Act have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates 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, 2023 and of the profit of the Company for the year ended on that date;

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

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

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

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

16. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED UNDER SECTION 186 OF THE ACT

The Company has not given any Loans, made any Investments, given any Guarantees and provided any Securities during the Financial Year under Section 186 of the Act.

17. CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES UNDER SECTION 188(1) OF THE ACT

With reference to Section 134(3)(h) of the Act, all contracts, and arrangements with related parties under Section 188(1) of the Act, entered by the Company during the financial year, were approved by the Audit Committee and wherever required, also by the Board of Directors. No contract or arrangement required approval of shareholders by a resolution. Further, during the year, the Company had not entered into any contract or arrangement with related parties which could be considered 'material' (i.e. transactions entered into individually or taken together with previous transactions during the financial year, exceeding rupees one thousand crore or ten percent of the annual consolidated turnover as per the last audited financial statements of the Company, whichever is lower) according to the policy of the Company on materiality of Related Party Transactions.

The Company had not entered into any contract / arrangement /transaction with related parties 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, hence the disclosure under Form AOC-2 is not applicable to the Company.

You may refer to Related Party transactions in Note No.27 (Point No:22) of the Standalone Financial Statements for more details.

18. ANNUAL RETURN

Pursuant to the provisions of Section 92(3) and Section 134(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 as amended from time to time, the Annual Return of the Company as on 31^st March, 2023 is available on the Company's website and can be accessed at https://phantomfx.com/

19. BOARD OF DIRECTORS

Composition of the Board as at March 31, 2023, company's Board consists of 08 members. Besides the Chairman, who is an Executive Promoter Director, the Board comprises of two Executive Promoter Directors (including one Woman Executive Director), one Executive Director and one Non-Executive Non-Independent Director and three Non-Executive Independent Directors. Brief profile of Directors is available at Company's website at https://phantomfx.com/. The composition of the Board is in conformity with the Act and consists of combination of Executive and Non-Executive Directors and not less than 1/3^rd of the Board comprising of Independent Directors as required under the Act.

20. NUMBER OF BOARD MEETINGS AND ATTENDANCE OF DIRECTORS

During the Financial Year 2022-23, the Company held 19 (Nineteen) board meetings of the Board of Directors as per Section 173 of Companies Act, 2013, viz 02^nd May, 2022, 30^th May, 2022, 23^rd June, 2022, 29^th June, 2022, 12^th July, 2022, 20^th July, 2022, 21^st July 2022, 25^th July, 2022, 30^th July, 2022, 18^th August, 2022, 23^rd August, 2022, 25^th August, 2022, 01^st October, 2022, 18^th October, 2022, 19^th October, 2022, 12^th November, 2022, 28^th November, 2022, 23^rd December, 2022 and 13^th February, 2023. The provisions of Companies Act, 2013 were adhered to while considering the time gap between two meetings.

Detailed agenda with explanatory notes and all other related information is circulated to the members of the Board in advance of each meeting. Detailed presentations are made to the Board covering all major functions and activities. The requisite strategic and material information is made available to the Board to ensure transparent decision making by the Board

The Company did not have any pecuniary relationship or transactions with the Non-Executive Directors of the Company other than payment of the sitting fees for attending meetings and commission as specified above. During FY 2022-23, the Company did not advance any loan to any of its Directors. Further, no loans and advances in the nature of loans to firms/ companies in which directors are interested was given by the Company and its subsidiaries.

The Non-Executive Directors including Independent Directors are entitled for sitting fees for attending meetings of the board/ committees thereof. The Company pays sitting fees of D20,000/- per meeting to its Non-Executive Independent Directors for attending the meetings of Board and Committees.

Remuneration of the executive directors consists of a salary and other benefits. The Nomination and Remuneration Committee makes annual appraisal of the performance of the Executive Directors based on a detailed performance evaluation, and recommends the compensation payable to them, within the parameters approved by the shareholders, to the Board for their approval.

21. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act, 2013, and the Articles of Association of the Company, Mr. Binu Joshua Sammanohar (DIN: 03459073) and Mr. Sivasankaran Ravindran (DIN: 08009653), Directors of the Company, retire by rotation at the ensuing Annual General Meeting. The Board of Directors, on the recommendation of the Nomination and Remuneration Committee, has recommended their re-appointment. Details of the Directors retiring by rotation and seeking reappointment have been furnished in the explanatory statement to the notice of the ensuing AGM.

The following are the changes in the Board of Directors/KMPs of the Company during the year under review:

The Board of Directors of the company are of the opinion that all the Independent Directors of the company appointed / re-appointed during the year possess impeccable integrity, relevant expertise and experience required to best serve the interests of the company

22. AUDITORS AND AUDITORS' REPORTA. STATUTORY AUDITORS AND THEIR REPORT

During the year under review, M/s.Ravichandran & Thangaraj Associates, Chartered Accountants, Chennai (FRN:08028S), has resigned from the position of Statutory Auditors with effect from June 23, 2022 and the casual vacancy created consequent to the resignation was filled by the appointment of M/s. L. U. Krishnan & Co, Chartered Accountants, (FRN:001527S) to hold office till the date of conclusion of the sixth AGM. Subsequently pursuant to the provisions of Section 139 of the Act and Rules made thereunder, M/s. L. U. Krishnan & Co, Chartered Accountants, (FRN:001527S) were appointed as Statutory Auditors of the Company for a term of five consecutive years, to hold office from the conclusion of the Sixth (06^th) AGM held on August 25, 2022 until the conclusion of Eleventh (11^th) AGM of the Company to be held in the calendar year 2027 The Auditors have also confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board of the ICAI

M/s. L. U. Krishnan & Co, Chartered Accountants, have submitted their Report on the Financial Statements of the Company for the FY 2022-23, which forms part of the Annual Report 2022- 23. There are no observations (including any qualification, reservation, adverse remark or disclaimer) of the Auditors in the Audit Reports issued by them which call for any explanation/comment from the Board of Directors.

B. COST RECORDS AND COST AUDIT

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable to the company for the period under review.

C. SECRETARIAL AUDITOR AND THEIR REPORT

M/s. Rabi Narayan & Associates, Company Secretaries (unique Identification No.S2000TN667800), were appointed as Secretarial Auditors of the Company for the financial year 2022-23. The Secretarial Audit Report submitted by them for the said financial year in the prescribed form MR3 pursuant to the provisions of Section 204 of the Act is annexed as Annexure III to this report. M/s. Rabi Narayan & Associates, Company Secretaries have been reappointed to conduct the secretarial audit of the Company for FY 2023-24. They have confirmed that they are eligible for the said appointment.

The Secretarial Auditors' Report for the Financial year 2022-23 does not contain any qualification, reservation or adverse remark except that certain forms/returns under the Act had been filed belatedly. The delay in filing certain forms in certain instances were due to the technical problems faced by the company while accessing the MCA website to file the forms/returns. However, the company has filed all applicable forms and returns by paying additional fee wherever applicable and as on the date of this report all the applicable forms/returns are duly filed.

23. SECRETARIAL STANDARDS

The Company is in compliance with the applicable Secretarial Standards i.e. SS-1 and SS-2, relating to 'Meetings of the Board of Directors' and 'General Meetings', respectively issued by the Institute of Company Secretaries of India ('ICSI') and approved by the Central Government under Section 118 (10) of the Act for the Financial Year ended 2022-23.

24. INTERNAL FINANCIAL CONTROL SYSTEM

The Company has put in place an effective internal control system to synchronise its business processes, operations, financial reporting, fraud control, and compliance with extant regulatory guidelines and compliance parameters. The Company ensures that a standard and effective internal control framework operates throughout the organisation, providing assurance about the safekeeping of the assets and the execution of transactions as per the authorisation in compliance with the internal control policies of the Company.

The internal control system is supplemented by extensive internal audits, regular reviews by the management, and guidelines that ensure the reliability of financial and all other records. The management periodically reviews the framework, efficacy, and operating effectiveness of the Internal Financial Controls of the Company.

The Internal Audit reports are periodically reviewed by the Audit Committee. The Company has, in material respects, adequate internal financial control over financial reporting, and such controls are operating effectively. Internal Audits are carried out to review the adequacy of the internal control systems and compliance with policies and procedures. Internal Audit areas are planned based on inherent risk assessment, risk score, and other factors such as probability, impact, significance, and strength of the control environment. Its adequacy was assessed, and the operating effectiveness was also tested.

25. COMPLIANCE TO THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION, AND REDRESSAL) ACT, 2013 READ WITH THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION, AND REDRESSAL) RULES, 2013. The Company has zero tolerance for sexual harassment at workplace and has a mechanism in place for prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. The Company is committed to provide equal opportunities without regard to their race, caste, sex, religion, color, nationality, disability, etc. All employees are treated with dignity with a view to maintain a work environment free of sexual harassment whether physical, verbal

or psychological. All employees (permanent, contractual, temporary, trainees) are covered.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment at workplace. During the year under review, Company has not received any complaints on sexual harassment and hence there are no complaints pending as on the end of the Financial Year 2022-23 on sexual harassment

26. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERNS STATUS AND COMPANY'S OPERATIONS IN FUTURE

The Company has not received any significant or material orders passed by any regulatory authority, court or tribunal which shall impact the going concern status and Company's operations in future.

27. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations"), is presented in a separate section, forming part of the Annual Report.

28. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

The Statutory Auditors, Cost Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under section 143(12) of the Act, including rules made there under.

29. CORPORATE SOCIAL RESPONSIBILITY (CSR)

In compliance with Section 135 of the Companies Act, 2013 read with the Rules made thereunder, the Company has formed Corporate Social Responsibility (“CSR") Committee. The Company has framed a Corporate Social Responsibility (CSR) Policy as required under Section 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, to oversee the CSR activities initiated by the Company. The CSR Committee has adopted a CSR Policy in accordance with the provisions of

Section 135 of the Companies Act, 2013 and rules made thereunder. The details of the CSR initiatives undertaken by the Company during the FY 2022-23 in the prescribed format are annexed as Annexure-IV.

30. RISK MANAGEMENT

Pursuant to provisions of Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) & 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted the Risk Management Committee and laid down a framework to inform the Board about the particulars of Risks Identification, Assessment and Minimization Procedures. In the opinion of the Board, there is no such risk, which may threaten the existence of the Company.

During the year, such controls were tested and no material discrepancy or weakness in the Company's internal controls over financial reporting was observed.

31. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are provided in Annexure II to this Report.

32. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Board, based on the recommendation of the Nomination and Remuneration Committee, has framed a policy for the selection and appointment of Directors and Senior Management Personnel and their remuneration. The Company's policy relating to the Directors appointment, payment of remuneration and discharge of their duties is available on the website of the Company at https:// phantomfx.com

33. PARTICULARS OF EMPLOYEES

Employee relations continued to be cordial during the year under review. The Company continued its thrust on Human Resources Development

Disclosures required under the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration

of Managerial Personnel) Rules, 2014, as amended, containing, inter-alia, the ratio of remuneration of Directors to median remuneration of employees, percentage increase in the median remuneration, are annexed to this Report as Annexure-V. The details of employee who have received remuneration exceeding the limit as stated in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-V.

A statement containing the particulars of the top ten employees and the employees drawing remuneration in excess of limits prescribed under Section 197(12) of the Act, read with Rules 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is an annexure forming part of this Report. In terms of the proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the Members excluding the aforesaid annexure. The said statement is kept open for inspection during working hours at the Registered Office of the Company. Any member who is interested in obtaining these, may write to the Company Secretary at the Registered Office of the Company.

34. PARTICULARS OF HOLDING, SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE

Your Company does not have any Holding, Subsidiary, Joint venture or Associate Company as on March 31, 2023. During the Financial Year under review, there are no companies which has become or ceased to be Subsidiary, Joint Venture/ Associate Companies.

However, as part of the expansion of the business of the company to overseas market, your company has incorporated a wholly owned subsidiary viz Phantomfx Studios Limited on June 23, 2023 in United Kingdom (UK). The Company is yet to start its operations.

35. RECEIPT OF REMUNERATION OR COMMISSION BY THE MANAGING / WHOLE TIME DIRECTOR FROM ITS HOLDING OR SUBSIDIARY COMPANY

The Company does not have any Holding or Subsidiaries Company as on 31^st March 2023. Hence reporting under this clause is not required to be provided

36. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR):

The Business Responsibility and Sustainability Report pursuant to Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the Company for the financial year ended on 31^st March, 2023.

37. CORPORATE GOVERNANCE

The Equity Shares of the Company are listed on the SME platform (NSE-emerge) of NSE Limited. Pursuant to Regulation 15(2) SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 the compliance with the Corporate Governance provision as specified in Regulation 17 to 27 and clause (b) to (i) of sub regulations (2) of regulation 46 and par as C, D and E of Schedule V of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 shall not apply. The Company voluntarily adopted various practices of governance conforming to highest ethical and responsible standards of business and is committed to focus on long term value creation for its shareholders. The Corporate Governance practices followed by the Company is included as part of this Report.

All recommendations of Audit Committee during the year under review were accepted by the Board of Directors. The Company Secretary act as the secretary of the Committee. The role and terms of reference of the Committee are in consonance with the requirements mandated under Section 177 of the Companies Act, 2013 and Listing Regulations and is available on the website of the Company at https://phantomfx.com

B. NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee was constituted at a meeting of the Board of Directors held on August 18, 2022. During the Financial Year 2022-23, the Company held 02 (Two) Nomination and Remuneration Committee meetings, viz 20^th August, 2022 and 13^th February, 2023.

The composition of the Committee and the details of meetings attended by its members are given below:

The Company Secretary act as the secretary of the Committee. The role and terms of reference of the Committee are in consonance with the requirements mandated under Section 178 of the Companies Act, 2013 and Listing Regulations and is available on the website of the Company at https://phantomfx.com

C. STAKEHOLDERS' RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee has been formed by the Board of Directors, at the meeting held on August 18, 2022. During the Financial Year 2022-23, the Company held 02 (Two) Stakeholders' Relationship Committee meetings, viz 20^th August, 2022 and 24^th March, 2023.

The composition of the Committee and the details of meetings attended by its members are given below:

The Company Secretary act as the secretary of the Committee. The role and terms of reference of the Committee are in consonance with the requirements mandated under Section 178 of the Companies Act, 2013 and Listing Regulations and is available on the website of the Company at https://phantomfx.com

D. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Corporate Social Responsibility Committee has been formed by the Board of Directors, at the meeting held on August 18, 2022, in compliance with Section 135 of the Companies Act 2013. During the Financial Year 2022-23, the Company held 02 (Two) Corporate Social Responsibility Committee meetings, viz 20^th August, 2022 and 13^th February, 2023.

The composition of the Committee and the details of meetings attended by its members are given below:

The Company Secretary act as the secretary of the Committee. The role and terms of reference of the Committee are in consonance with the requirements mandated under Section 135 of the Companies Act, 2013 and Listing Regulations and is available on the website of the Company at https://phantomfx.com

E. RISK MANAGEMENT COMMITTEE

The Risk Management Committee has been formed by the Board of Directors, at the meeting held on August 18, 2022.During the Financial Year 2022-23, the Company held 01 (One) Risk Management Committee meetings, viz 20^th August, 2022.

The Company Secretary act as the secretary of the Committee. The terms of reference of the RMC include review and assessment of the risk management system and policy of the Company from time to time and recommend for amendment or modification thereof. The Risk Management policy of the Company is available on the website of the Company at https:// phantomfx.com/Phantomfxcms/InvestorUpfile/ P13_RiskManagementPolicy.pdf

Note: The IPO Committee constituted by the Board, at its meeting held on August 18, 2022 was dissolved, upon listing of company's shares as there was no scope to continue with it. During the Financial Year 2022-23, the Company held 01 (One) IPO Committee meetings, viz 25^th August, 2022.

39. DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have confirmed that they meet the criteria of independence laid down under Section 149(6) read with Schedule IV of the Act and Regulation 16(1)(b) of the Listing Regulations and that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. The board of directors have taken on record the declaration and confirmation submitted by the independent directors after undertaking due assessment of the veracity of the same and is of the opinion that they fulfil the conditions specified in the Act and the Listing Regulations and that they are independent of the management.

40. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Independent Directors have been updated with their roles, rights and responsibilities in the Company by specifying them in their appointment letter along with necessary documents, reports and internal policies to enable them to familiarise with the Company's procedures and practices. The Company endeavors, through presentations at regular intervals to familiarize the Independent Directors with the strategy, operations and functioning of the Company.

The details of such familiarization programmes for Independent Directors are posted on the website of the Company and can be accessed at https:// phantomfx.com

41. TERMS AND CONDITIONS OF APPOINTMENT OF INDEPENDENT DIRECTORS

The terms and conditions of appointment of Independent Directors have been disclosed on the website of the Company https://phantomfx.com

42. SEPARATE MEETING OF INDEPENDENT DIRECTORS

Independent Directors of the Company met separately on March 24, 2023 without the presence of Non-Independent Directors and members of Management. In accordance with the Listing Regulations, read with Section 149 (8) and Schedule-IV of the Act, following matters were, inter alia, reviewed and discussed in the meeting:

i) Performance of Non-Independent Directors and the Board of Directors as a whole;

ii) Performance of the Chairman of the Company taking into consideration the views of Executive and Non-Executive Directors;

iii) Assessment of the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties

All the Independent Directors were present at the meeting.

43. PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS INCLUDING INDEPENDENT DIRECTORS

Pursuant to applicable provisions of the Act and the Listing Regulations, the Board, in consultation with its Nomination and Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and individual directors, including Independent Directors. The framework is monitored, reviewed and updated by the Board, in consultation with the

Nomination and Remuneration Committee, based on need and new compliance requirements.

44. VIGIL MECHANISM AND WHISTLE-BLOWER POLICY

The Company has established a vigil mechanism and accordingly framed a Whistle Blower Policy in accordance with the provisions of Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Rule 7 of the Companies (Meeting of the Board and its Power) Rules 2014. The policy enables directors, employees and business associates to report unethical behavior, malpractices, wrongful conduct, fraud, violation of Company's code of conduct, leak or suspected leak of unpublished price sensitive information without fear of reprisal for appropriate action. Under the vigil mechanism, all directors, employees, business associates have direct access to the Chairman of the Audit committee. The whistle blower policy can be accessed at https://phantomfx.com/Phantomfxcms/ I nvestorU pfi le/P9_Wh istleB lowerPolicy. pdf

45. CODE FOR PREVENTION OF INSIDER-TRADING

I n accordance with SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has in place the following:-

a) Code of Conduct for Prevention of Insider Trading and Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI).

b) Policy for determination of “legitimate purposes" forms part of this Code.

c) Policy and procedures for inquiry in case of leak of UPSI/ suspected leak of UPSI

All compliances relating to Code of Conduct for Prevention of Insider Trading which includes maintenance of structural digital data base (SDD) are being managed through a software installed by the Company in-house including maintenance structural digital data base (SDD). This code lays down guidelines advising the designated employees and other connected persons, on procedures to be followed and disclosures to be made by them while dealing with the shares of the company, and while handling any unpublished price sensitive information.

46. CODE OF CONDUCT

Commitment to ethical professional conduct is a must for every employee, including Board members and senior management personnel of the company. The duties of Directors including duties as an Independent Director as laid down in

the Act also forms part of the Code of Conduct. The Code of Conduct is available on the website of the Company http://www.phantom-fx.com. . All Board members and senior management personnel affirm compliance with the Code of Conduct annually. A declaration signed by the Chairman and Managing Director to this effect is annexed as Annexure-I to this report.

47. POLICIES OF THE COMPANY

The Company is committed to a good corporate governance and has consistently maintained its organizational culture as a remarkable confluence of high standards of professionalism and building shareholder equity with principles of fairness, integrity and ethics. The Board of Directors of the Company have from time to time framed and approved various Policies as required by the Companies Act, 2013 read with the Rules issued thereunder and the Listing Regulations. These Policies and Codes are reviewed by the Board and are updated, if required. The aforesaid policies can be accessed at https://phantomfx.com

48. REGISTRAR AND TRANSFER AGENT (RTA)

During the year as part of listing, the Company appointed Purva Share Registry (India) Private Limited as its RTA. As required under Regulation 7(3) of the Listing Regulations, the Company files, on annual basis, certificate issued by RTA and compliance officer of the Company certifying that all activities in relation to share transfer facility are maintained by RTA registered with SEBI. Details of the RTA are given below

Purva Share Registry (India) Private Limited

CIN: U67120MH1993PTC074079 No 9, Shiv Shakti Industrial Estate Mumbai - 400011, Maharashtra, India

49. LISTING

At present, the equity shares of the Company are listed at the EMERGE Platform on NSE under Stock Code-PHANTOMFX, ISIN : INE0MLZ01019

50. POSTAL BALLOT

During the year under review, no resolution was passed through postal ballot.

51. SCORES

SEBI processes investor complaints in a centralized web-based complaints redressal system i.e. SCORES. Through this system a shareholder can lodge complaint against a company for his grievance. The company uploads the action taken on the

Bankruptcy Code, 2016 during the Financial Year and hence not being commented upon.

55. THE DETAILS OF DIFFERENCE BETWEEN 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 THEREOF.

During the Financial Year under review, there has been no incident of one time settlement for loan taken from the banks of financial institutions and hence not being commented upon

56. GREEN INITIATIVES

I n commitment to keeping in line with the Green Initiative and going beyond it to create new green initiations, an electronic copy of the Notice of the 7^th Annual General Meeting of the Company along with a copy of the Annual Report is being sent to all Members whose email addresses are registered with the Company/ Depository Participant(s) and will is also available at the Company's website at http:// www.phantom-fx.com

57. INVESTOR GRIEVANCE REDRESSAL

During the financial year 2022-23, there were no complaints received from the investors. The designated email id for Investor complaint is cs@ phantom-fx.com

58. COMPLIANCE OFFICER DETAILS AND ADDRESS FOR CORRESPONDENCE

Ms. Pallavi Tongia, Company Secretary & Compliance Officer

Registered Office: 6^th Floor, Tower B, Kosmo One Tech Park, Plot No.14, 3^rd Main Road, Ambattur Industrial Estate, Ambattur, Chennai, 600058, Tamil Nadu, India Phone No. 044-43846228, email: cs@ phantom-fx.com

60. ACKNOWLEDGEMENT

The Board of Directors would like to express their sincere appreciation for the assistance and cooperation received from the government and regulatory authorities, stock exchange, financial institutions, banks, business associates, customers, vendors, members, for their co-operation and support and looks forward to their continued support in future. The Board of Directors wish to place on record its deep sense of appreciation for

the committed services by all the employees of the Company.