Directors Report of Harsha Engineers International Ltd.

Mar 31, 2025

The Board of Directors is pleased to present Integrated Annual Report together with the Audited Annual Accounts of the Harsha
Engineers International Limited ("the Company") for the financial year ("year") ended March 31,2025.

1. FINANCIAL RESULTS

The Audited Standalone and Consolidated Financial Statements of the Company as on March 31, 2025 are prepared in
accordance with the relevant applicable Indian Accounting Standards (Ind AS) and provisions of the Companies Act, 2013
("the Act").

The Standalone and Consolidated financial performance for the financial year ended March 31,2025 has been summarised
as under:

Particulars	Standalone		Consolidated
	For the year ended March 31,2025	For the year ended March 31,2024	For the year ended March 31, 2025	For the year ended March 31,2024
Revenue from Operations	1,08,930	1,08,094	1,40,765	1,39,230
Profit Before Depreciation and Amortisation Expenses, Exceptional Items and Tax	20,345	19,450	20,390	19,007
Less: Depreciation & Amortisation Expenses	2,867	2,685	4,054	3,932
Less: Exceptional Items#	9,501	-	2,768	-
Profit Before Tax	7,977	16,765	13,568	15,075
Tax Expense:
Less: Current Tax	4,079	3,771	4,120	3,797
Less: Deferred Tax	362	303	517	135
Profit After Tax	3,536	12,691	8,931	11,143
Add: Other Comprehensive Income	(228)	400	(229)	400
Total Comprehensive Income	3,308	13,091	8,702	11,543

#Note: It pertains to Impairment in carrying value of Investment based on Fair Valuation Report of Harsha Engineers
Europe SRL, Wholly-owned subsidiary of the Company.

2. PERFORMANCE AND OPERATION REVIEW
CONSOLIDATED

The Company has achieved revenue from operations
of '' 1,40,765 lakhs for the financial year ended March
31, 2025, an increase of 1.10% as compared to
'' 1,39,230 lakhs in the previous financial year.

Profit after tax (PAT) for the financial year ended March
31, 2025 is '' 8,931 lakhs, a decrease of 19.85% as
against '' 11,143 lakhs in the previous financial year.

Basic earnings per share (EPS) for the financial year
ended March 31, 2025 is '' 9.81 as against '' 12.24 in
the previous financial year.

Diluted earnings per share (EPS) for the financial year
ended March 31, 2025 is '' 9.81 as against '' 12.24 in
the previous financial year.

STANDALONE

The Company has achieved revenue from operations
of '' 1,08,930 lakhs for the financial year ended March
31,2025, increase of 0.77% as compared to '' 1,08,094
lakhs in the previous financial year.

Profit after tax (PAT) for the financial year ended
March 31, 2025 is '' 3,536 lakhs, decrease of 72.14%
as against '' 12,691 lakhs in the previous financial year.

Basic earnings per share (EPS) for the financial year
ended March 31, 2025 is '' 3.88 as against '' 13.94 in
the previous financial year.

Diluted earnings per share (EPS) for the financial year
ended March 31,2025 was '' 3.88 as against '' 13.94 in
the previous financial year.

3. SIGNIFICANT ACTIVITIES IN FINANCIAL YEAR

2024-25

The year under review would be remembered for the

following significant activities in your Company:

â¢ M/s. Harsha Engineers Advantek Limited, a
Wholly-owned subsidiary of the Company, has
completed machinery installation at its newly
established facility located at Survey Nos. 378
and 379, Rajkot-Ahmedabad Highway, Near
Kairose Pharma P Ltd, Bhayla, Ahmedabad,
Gujarat, 382220. Commercial production and
invoicing are anticipated to commence by the
close of the first quarter of FY26.

â¢ The insurance company has settled the product
recall claim amount of USD 1 million. The
Company has received this payment after the
standard deductible as per the policy terms.

â¢ The Company has entered into a long term
Agreement ("the Agreement") with a leading
multinational bearing company engaged in
the business of manufacturing industrial and
automotive bearings and other products, effective
on December 05, 2024, for manufacture and
supply of bearing cage products in accordance
with terms and conditions stipulated in the
Agreement.

â¢ The Company has entered into a Letter of
Intent ("LOI") with a leading multinational
Group company engaged in the business of
manufacturing AC compressors, effective on
April 26, 2025, for manufacture and supply of
stamping products in accordance with terms and
conditions stipulated in LOI.

â¢ During the year, the Company commissioned
0.383 Solar Roof top power plant at its Moriya
Facility. The Company is also setting up a 10.4
MWp (2 x 5.20 MWp) solar tracker PV power
plant in Vada, Kankrej, Banaskantha, Gujarat
(Survey Nos. 13, 19, 34, 35, 36, 37). This project is
expected to be completed and commissioned in
the first quarter of FY26.

â¢ The Company has been honoured with an India
Level Sustainability Award from its esteemed
customer Schaeffler on April 18, 2024.

â¢ The Company has been honoured with a Global
level Sustainability Award from its esteemed
customer Schaeffler on June 19, 2024.

â¢ The Company has been honoured with an
Intelligent & Agile Award in Pune from its
esteemed customer, SKF on March 14, 2024.

â¢ The Company won Platinum Award in the Kobetsu
Kaizen Pillar and Silver Award in the Jishu Hozen
Pillar at the 20^th CII Circle Competition held on
April 23, 2024 and April 24, 2024.

â¢ The Company secured 1^st place in Best
Safety Poster Competition held at the Wabtec
Corporation during 2024 Safety week celebration.

â¢ The Company has participated in Gate 2025 -
GCCI Annual Trade Expo during April, 2025.

â¢ During Annual Vendor Meet 2025, the Company
has been honoured with an Enduring Partnership
Excellence Award from TATA Bearings on
February 19, 2025.

â¢ At the 11^th India Risk Management Awards,
organised by CNBC-TV18 and ICICI Lombard,
the Company was honoured as the winner in the
''Regulatory Compliance Managementâ category.

4. UTILISATION OF NET PROCEEDS OF THE INITIAL

PUBLIC OFFER ("IPO")

As on March 31,2025, the main objects and utilisation

of net proceeds of the IPO are as follows:

Sl. No.	Item Head	Amount as proposed in the Offer Document	Fund Utilised
1	Pre-payment or scheduled repayment of a portion of the existing borrowing availed by the Company	270.00	270.00
2	Funding capital expenditure requirements towards purchase of Machinery	77.95	68.22
3	Infrastructure repairs and renovation of our existing production facilities including office premises in India	7.12	7.12
4	General corporate purposes	74.33	74.33
	Total	429.40	419.67

Note: The Company has not fully utilised the net
proceeds from its IPO for the purposes stated in the
Prospectus dated September 19, 2022, during 2023Â¬

24. Consequently, the Board of Directors and the Audit
Committee, in their meeting held on February 08, 2024,
have approved an extension of the deployment period
for the IPO proceeds towards the objectives outlined
in the Prospectus dated September 19, 2022, up to
March 31,2026.

5. SHARE CAPITAL

The Authorised Share Capital of your Company as on
March 31, 2025 stood at '' 1,00,00,00,000 divided into
10,00,00,000 equity shares of '' 10 each. The Issued
Share Capital of your Company is '' 91,04,41,050
divided into 9,10,44,105 equity shares of '' 10 each
and the Subscribed and Paid-up Share Capital is ''
91,04,41,050 divided into 9,10,44,105 equity shares of
'' 10 each fully paid-up.

6. DIVIDEND

The Board of Directors have recommended a final
dividend of '' 1 per equity share of '' 10 each fully paid
up for the financial year ended on March 31,2025. The
proposal is subject to the approval of Members at the
ensuing Annual General Meeting. The final dividend
on equity shares, if approved by the Members, would
involve a cash outflow of '' 910.44 lakhs.

7. DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of the Securities and
Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("SEBI
Listing Regulations"), the Board of the Company
has adopted a Dividend Distribution Policy, which
is available on the website of the Company at
https://www.harshaengineers.com/InvestorRelations/

company-policies.php

8. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR
EDUCATION AND PROTECTION FUND

In terms of Section 125 of the Act and other applicable
provisions, if any, of the Act including any statutory
modifications or re-enactments thereof, during the
financial year ended March 31,2025 the Company has
not required to transfer any amount in the Investor
Education and Protection Fund.

9. TRANSFER TO RESERVES

As permitted under the provisions of the Act, the
Board does not propose to transfer any amount to
general reserve for the financial year ended on March
31,2025.

10. MATERIAL CHANGES AND COMMITMENTS
AFFECTING FINANCIAL POSITIONS BETWEEN THE
END OF FINANCIAL YEAR AND DATE OF THE REPORT

There have been no other material changes and
commitments which affect the financial position of
the Company, that have occurred between the end of
financial year to which the financial statements relates
and the date of this report.

11. DETAILS OF SUBSIDIARY/HOLDING, ASSOCIATE AND JOINT VENTURE CEASED AND ACQUIRED DURING THE
FINANCIAL YEAR

As on March 31,2025, the Company has three subsidiaries and a Joint Venture, the details of which are given below:

Sl. No.	Name and Address of the company	CIN/GLN	Holding/ Subsidiary/ Associate/ Joint Venture	% of Share Holding/ Capital Contribution
1	Cleanmax Harsha Solar LLP 13, A Floor 13, Plot 400, The Peregrine Apartment, Kismat Cinema, Prabhadevi, Mumbai-400025, Maharashtra, India.	AAE-4231	Joint Venture	50%
2	Harsha Precision Bearing Components (China) Co. Limited No. 10 Fuhua Road, Bixi Avenue, Changshu City, Jiangsu, Province, China.	Foreign Subsidiary	Wholly Owned Subsidiary	100%
3	Harsha Engineers Europe SRL Ghimbav, "ICCO Ghimbav - Brasov Industrial Park", County Road 103C, km 2 115, Building H4, County Brasov.	Foreign Subsidiary	Wholly Owned Subsidiary	100%
4	Harsha Engineers Advantek Limited Sarkhej-Bavla Road, Changodar, Ahmedabad, Sanand-382213, Gujarat, India.	U28140GJ2023PLC139182	Wholly Owned Subsidiary	100%

During the year under review, the Board of Directors reviewed the affairs of subsidiaries and joint venture. In accordance
with Section 129(3) of the Act, the Company has prepared consolidated financial statements of the Company and all its
subsidiaries and joint venture, which form part of the Annual Report. Further a statement containing the salient features of
the financial statements of subsidiaries and joint venture in the prescribed Form no. AOC-1 is appended as ANNEXURE-A.
The separate audited financial statements in respect of the subsidiary shall be kept open for inspection at the Registered
Office of the Company. The Company will also make available these documents upon request by any Member of the
Company interested in obtaining the same. The separate audited financial statements in respect of the subsidiary are also
available on the website of the Company at https://www.harshaengineers.com/InvestorRelations/financial-information.
php#. The Company has framed a policy for determining material subsidiaries, which has been available on the website
of the Company at https://www.harshaengineers.com/InvestorRelations/company-policies.php.

12. DIRECTORS

The Board of Directors consists of 10 Directors, out of which 5 are Non-Executive & Independent Directors including one
women Director and 5 are Executive & Non-Independent Directors including one women Director. The composition is in
compliance with the Act and SEBI Listing Regulations.

During the year following changes has been made in the Directors of the Company:

Sl. No.	Name of the Director	Date of Change	Appointment/ Resignation/ Change in Designation
1	Prof. (Dr.) Neharika Vohra	November 1 1,2024	Resigned as Independent Director
2	Ms. Priyanka Agarwal Chopra	November 1 1,2024	Appointment as Independent Director
3	Mr. Rajendra Shah	December 25, 2024	Re-appointment as Chairman & Whole-time Director
4	Mr. Harish Rangwala	December 25, 2024	Re-appointment as Managing Director
5	Mr. Vishal Rangwala	December 25, 2024	Re-appointment as Chief Executive Officer ("CEO") & WholeÂ¬ time Director
6	Mr. Pilak Shah	December 25, 2024	Re-appointment as Chief Operating Officer ("COO") & WholeÂ¬ time Director
7	Ms. Hetal Naik	December 25, 2024	Re-appointment as Whole-time Director

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Act and the Articles of
Association of the Company, Mr. Pilak Shah (DIN:00407960) COO & Whole-time Director and Ms. Hetal Naik (DIN:01990172)
Whole-time Director of the Company are liable to retire by rotation at the ensuing Annual General Meeting, being eligible
for re-appointment, both have offered themselves for the same.

Sl. No.	Name of KMP	Designation
1	Mr. Rajendra Shah¹	Chairman & Whole-time Director
2	Mr. Harish Rangwala²	Managing Director
3	Mr. Vishal Rangwala³	CEO & Whole-time Director
4	Mr. Pilak Shah⁴	COO & Whole-time Director
5	Ms. Hetal Naik⁵	Whole-time Director
6	Mr. Maulik Jasani	Vice President Finance & Group Chief Financial Officer
7	Mr. Kiran Mohanty	Company Secretary & Chief Compliance Officer

13. PERFORMANCE EVALUATION

Pursuant to the provisions of the Act and SEBI Listing
Regulations, the following performance evaluations
were carried out:

a. Performance evaluation of the Board, Chairman
and non-Independent Directors by the
Independent Directors;

b. Performance evaluation of the Board, its
Committees and Independent Directors by the
Board of Directors.

The manner in which the evaluation has been carried
out has been explained in the Corporate Governance
Report which forms part of this Annual Report.

14. REMUNERATION POLICY

The Board has, on the recommendation of the
Nomination and Remuneration Committee, framed a
policy for selection and appointment of Directors, Key
Managerial Personnel and Senior Management and
their remuneration. The Nomination Remuneration
Evaluation Policy is available on the website of
the Company at https://www.harshaengineers.com/
InvestorRelations/company-policies.php

15. KEY MANAGERIAL PERSONNEL ("KMP")

Pursuant to the provisions of Section 2(51) and 203 of
the Act read with Rule 8 of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014 following persons are acting as Key Managerial
Personnel ("KMP") of the Company as on March 31,
2025.

¹ Mr. Rajendra Shah is re-appointed as Chairman and
Whole-time Director of the Company for the period of
five years with effect from December 25, 2024.

² Mr. Harish Rangwala is re-appointed as Managing
Director of the Company for the period of five years
with effect from December 25, 2024.

³ Mr. Vishal Rangwala is re-appointed as CEO & WholeÂ¬
time Director of the Company for the period of five
years with effect from December 25, 2024.

⁴ Mr. Pilak Shah is re-appointed as COO & Whole-time
Director of the Company for the period of five years
with effect from December 25, 2024.

⁵ Ms. Hetal Naik is re-appointed as Whole-time Director
of the Company for the period of five years with effect
from December 25, 2024.

6. NUMBER OF BOARD MEETINGS HELD

The Board of Directors duly met 4 (four) times during
the financial year 2024-25. All the Board Meetings
were held as per Section 173 of Act with all the relevant
rules & regulations related to that. Secretarial Standard
-1 (Board Meeting) and SEBI Listing Regulations are
duly complied with.

The details of the meetings of the Board of Directors
of the Company held and attended by the Directors
during the financial year 2024-25 are given in the
Corporate Governance Report which forms part of this
Annual Report.

7. INDEPENDENT DIRECTOR

The Company has complied with the definition of
Independence according to the provisions of Section
149(6) of the Act and SEBI Listing Regulations. The

Company has also obtained declarations from all the
Independent Directors pursuant to Section 149(7) of
the Act and SEBI Listing Regulations. All Independent
Directors have provided declarations that they meet
the criteria of independence as laid down under
Section 149(6) of the Act and SEBI Listing Regulations.

18. FAMILIARIZATION PROGRAM FOR THE
INDEPENDENT DIRECTOR

The Independent Directors have been updated with
their roles, rights and responsibilities in the Company
by specifying it in their appointment letter along with
necessary documents, reports and internal policies
to enable them to familiarise with the Companyâs
procedures and practices. The Company has through
presentations, at regular intervals, familiarised and
updated the Independent Directors with the strategy,
operations and functions of the Company and
Engineering Industry as a whole. The details of such
familiarisation programmes for Independent Directors
are explained in the Corporate Governance Report
which forms part of this Annual Report.

19. COMMITTEES

During the financial year the Board has 6 Committees:
Audit Committee, Nomination & Remuneration
Committee, Stakeholder Relationship Committee,
Corporate Social Responsibility Committee, Risk
Management Committee and Management Committee.
During the financial year, all recommendations of the
Committees of the Board which were mandatorily
required have been accepted by the Board.

A detailed note on the composition of the Board and
its Committees, including its terms of reference is in
line with the provisions of the Act and the SEBI Listing
Regulations and provided in the Corporate Governance
Report which forms part of this Annual Report.

20. RISK MANAGEMENT FRAMEWORK

The Company has a Risk Management framework to
identify, evaluate business risks and opportunities. This
framework seeks to create transparency, minimise
adverse impact on the business objectives and
enhance the Companyâs competitive advantage. The
risk framework defines the risk management approach
across the enterprise at various levels including
documentation and reporting. The framework has
different risk models which help in identifying risks
trend, exposure and potential impact analysis at the
Company level as well as for business segments.

The Company has a Risk Management Committee
and Risk Management Policy consistent with
the provisions of the Act and the SEBI Listing
Regulations. The Risk Management Policy is available
on the website of the Company at https://www.
harshaengineers.com/InvestorRelations/company-
policies.php. The Committee facilitates the execution
of risk management practices in the Company, in the
areas of risk identification, assessment, monitoring,
mitigation and reporting and also provides guidance to
the management team. The Company has laid down
procedures to inform the Audit Committee as well
as the Board of Directors about risk assessment and
related procedures and status.

The details of Risk Management Committee along
with other details are set out in Corporate Governance
Report, forming part of this Annual report.

21. DISCLOSURE UNDER SECTION 67(3)(C) OF THE ACT

No disclosure is required under Section 67(3)(c) of
the Act read with Rule 16(4) of the Companies (Share
Capital and Debentures) Rules, 2014 in respect of
voting rights not exercised directly by the employees
of the Company as the provisions of the said section
are not applicable.

22. DEPOSIT

During the year the Company has not accepted
deposits under the provisions of the Act.

23. RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered
into during the financial year 2024-25 were on an
armâs length basis and were in the ordinary course of
business and are in compliance with the applicable
provisions of the Act and the SEBI Listing Regulations.
There are no materially significant related party
transactions made by the Company with Promoters,
Directors, KMP etc. which may have potential conflict
with the interest of the Company at large or which
warrants the approval of the Members. Accordingly,
no transactions are being reported in Form AOC-2
in terms of Section 134 of the Act read with Rule 8
of the Companies (Accounts) Rules, 2014. However,
the details of transactions with Related Parties are
provided in the Companyâs financial statements in
accordance with the Accounting Standards.

All Related Party Transactions are presented to the
Audit Committee and the Board. Omnibus approval is
obtained for the transactions which are foreseen and
repetitive in nature. A statement of all related party
transactions is presented before the Audit Committee
and the Board on a quarterly basis, specifying
the nature, value and terms and conditions of the
transactions.

The Policy on Related Party Transactions is available
on our website at https://www.harshaengineers.com/
InvestorRelations/company-policies.php

24. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a)
of the Act, the Annual Return as on March 31, 2025
in the prescribed Form no. MGT-7 is available on the
Companyâs website at https://www.harshaengineers.
com/InvestorRelations/financial-information.php#

25. PARTICULARS OF LOANS, GUARANTEE AND
INVESTMENTS

Details of Loans, Guarantees and Investments covered
under the provisions of Section 186 of the Act are
provided in the notes to the Financial Statements.

26. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, Directors of the
Company hereby state and confirm that:

a) in the preparation of the annual accounts for
the financial year ended March 31, 2025, the
applicable accounting standards had been
followed along with proper explanation relating to
material departures;

b) the Directors had selected such accounting
policies and applied them consistently and made
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 at the end of
the financial year and of the profit of the Company
for the same period;

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

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

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

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

27. AUDITORS AND AUDITORS'' REPORT
Statutory Auditor

M/s. Pankaj R. Shah & Associates, Chartered
Accountants (FRN:107361W) was appointed as
Statutory Auditor of the Company for a period of
five consecutive years from the conclusion of 11^thAnnual General Meeting until the conclusion of the
16^th Annual General Meeting of the Company with
such remuneration as may be decided by the Board of
Directors.

The notes on financial statement referred to in the
Auditorsâ Report are self-explanatory and do not call
for any further comments. The Auditorsâ Report does
not contain any qualification, reservation or adverse
remarks.

Cost Auditor

M/s. Kiran J. Mehta & Co., Cost Accountants
(FRN:000025) were appointed as Cost Auditors to
carry out the audit of cost records of the Company for
the financial year ending March 31,2025.

Secretarial Auditor

M/s. Chirag Shah & Associates, Peer Reviewed Firm
of Practicing Company Secretaries were appointed as
Secretarial Auditor to carry out Secretarial Audit of the
Company for the financial year ending March 31,2025.

According to the provisions of Section 204 of the Act
read with Rule 9 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014,
the Secretarial Audit Report is enclosed as a part of
this Boardâs Report as an ANNEXURE-B.

The observations and comments, appearing in the
Secretarial Auditorâs Report are self-explanatory and
do not call for any further comments. The Secretarial
Auditorâs Report does not contain any qualification,
reservation or adverse remarks.

Pursuant to Regulation 24A of SEBI Listing
Regulations and subject to approval of the members
at the ensuing Annual General Meeting, the Board,
on the recommendation of Audit Committee, has
appointed M/s. Chirag Shah & Associates, Peer
Reviewed Firm of Practicing Company Secretaries as
Secretarial Auditor to carry out the Secretarial Audit
of the Company for a term of five consecutive years
commencing from financial year 2025-26 till financial
year 2029-30.

Internal Auditor

M/s. Talati & Talati LLP Chartered Accountants
(FRN:110758W) and M/s. MAR & Co., Chartered
Accountants (FRN:138633W) were appointed as
Internal Auditors of the Company for Engineering
Business Division and Solar EPC Business Division
respectively for the financial year 2024-25. The Board
of Directors of the Company in consultation with the
Internal Auditors formulated the scope, functioning,
periodicity and methodology for conducting an Internal
Audit.

28. INSURANCE

The Company has taken adequate insurance cover of all its movable and immovable assets (except Land) to cover various
type of risks.

29. CREDIT RATING

There has been no revision in credit ratings of the Company during the financial year ended March 31, 2025, details of
which are as under:

30. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNING AND OUTGO

Information required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is
disclosed in the ANNEXURE-C to this Boardâs Report.

Credit Rating
Agency

Facilities/

Instruments

Existing Ratings

New Ratings

Rating Action

Amount
('' crores)

CARE Ratings
Limited

Long term / Short
term Bank Facilities

CARE AA-; Stable
/ CAREA1

CARE AA-; Stable
/CAREA1

Reaffirmed by
CARE Rating
Limited

431.32 (Reduced
from 483.87)

31. CORPORATE SOCIAL RESPONSIBILITY ("CSR")

In accordance with the provisions of Section 135 of
the Act and rules made thereunder the Company has
adopted a policy for CSR and the Board has constituted
a committee for implementing the CSR activities. The
Annual Report on the CSR activities is appended as
ANNEXURE-D to this Boardâs Report.

32. CORPORATE GOVERNANCE REPORT AND BUSINESS
RESPONSIBILITY AND SUSTAINABILITY REPORT

In compliance with Regulation 34 of the SEBI
Listing Regulations, a separate Report on Corporate
Governance and the Business Responsibility and
Sustainability Report, forms part of this Annual
Report.

33. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as
stipulated under the SEBI Listing Regulations is
presented in a separate section forming part of this
Annual Report.

34. PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the
Act read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014, is attached as ANNEXURE-E to this Boardâs
Report. The statement containing names of the top
10 employees, in terms of remuneration drawn and
the particulars of employees as required under the
Section 197(12) of the Act read with Rule 5(2) and 5(3)
of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, is provided in a
separate annexure forming part of this report. Further,
the report and the accounts are being sent to the
Members, excluding the aforesaid Annexure. In terms
of Section 136 of the Act, the said Annexure is open for
inspection and any member interested in obtaining a
copy of the same may write to the Company Secretary
at [email protected].

35. DISCLOSURE AS PER THE SEXUAL HARASSMENT
OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013

The Company is committed to provide and promote
a safe and healthy work environment for all its
employees.

The Company has a ''Prevention of Sexual
Harassmentâ (POSH) policy which is in line with the
statutory requirement. The Company has put in place
a structured reporting and redressal mechanism. The
POSH policy is communicated to all employees of
the Company. During the financial year 2024-25, no
complaints in respect of the same has been received
by the Company.

36. VIGIL MECHANISM / WHISTLE BLOWER

Pursuant to the provisions of Act and rules made
thereunder and SEBI Listing Regulations the Company
has framed and adopted vigil mechanism policy to deal
with instance of fraud and mismanagement, if any and
is available on the website of the Company at https://
www.harshaengineers.com/InvestorRelations/
company-policies.php. The Company has also
provided adequate safeguards against victimisation of
employees and directors who express their concerns.

37. INTERNAL FINANCIAL CONTROLS

Your Company has implemented Internal Financial
Controls over Financial Reporting through policies,
procedures and guidelines. The approved schedule
of powers is used to control the approval process for
various activities, based on hierarchical value limits.
A combination of these systems will enable your
Company to maintain a robust design of controls and
its operating effectiveness is ensured from time to
time through internal checks and audit.

The Statutory Auditor of your Company has also given
an opinion that the Internal Financial Controls over
Financial Reporting are adequate and are operating
effectively during the financial year.

38. SECRETARIAL STANDARDS

During the year under review, your Company has
complied with all the applicable provisions of
Secretarial Standard-1 and Secretarial Standard-2
issued by the Institute of Company Secretaries of
India.

39. NOTES TO ACCOUNTS

The notes forming part of the accounts are selfÂ¬
explanatory and therefore do not call for any further
comments. ANNEXURE-A to ANNEXURE-E forms part
of this Boardâs Report.

40. ACKNOWLEDGEMENT

The Directors are thankful for the co-operation and assistance received from the Financial Institutions, Bankers,
Collaborators, Central and State Government Departments, Local Authorities, Shareholders, Employees and other
Stakeholders of the Company.

By Order of the Board of Directors

Registered Office:

Sarkhej - Bavla Road, Changodar, Ahmedabad,

Sanand-382213, Gujarat, India. Rajendra Shah

CIN: L29307GJ2010PLC063233 Chairman & Whole-time Director

Email-Id: [email protected] DIN:00061922

Website: www.harshaengineers.com May 08, 2025

Mar 31, 2024

The Board of Directors are pleased to present Integrated Annual Report together with the Audited Annual Accounts of the Harsha Engineers International Limited ("The Company") for the financial year ended March 31,2024.

1. FINANCIAL RESULTS

The Audited Standalone and Consolidated Financial Statements of the Company as on March 31,2024 are prepared in accordance with the relevant applicable IND AS and provisions of the Companies Act, 2013 ("the Act").

The Standalone and Consolidated performance during the financial year ended March 31,2024 has been as under:

(? in lakhs)

Particulars	Standalone		Consolidated
	For the year ended March 31, 2024	For the year ended March 31,2023	For the year ended March 31,2024	For the year ended March 31,2023
Revenue from Operations	108,094	102,472	139,230	136,402
Profit Before Depreciation and Tax	19,450	19,561	19,007	20,324
Less: Depreciation & Amortisation Expenses	2,685	2,331	3,932	3,612
Profit Before Tax	16,765	17,230	15,075	16,712
Provision for Taxation:
Less: Current Tax	3,771	3,863	3,797	3,846
Less: Deferred Tax	303	528	135	538
Profit After Tax	12,691	12,839	11,143	12,328
Add: Other Comprehensive Income	400	(748)	400	(748)
Total Comprehensive Income	13,091	12,091	11,543	11,580

2. PERFORMANCE AND OPERATION REVIEW CONSOLIDATED

The Company has achieved revenue from operations of '' 139,230 lakhs for the financial year ended March 31, 2024, an increase of 2.07% as compared to '' 136,402 lakhs in the previous financial year.

Profit after tax (PAT) for the financial year ended March 31, 2024 is '' 11,143 lakhs, a decrease of 9.61% as against '' 12,328 lakhs in the previous financial year.

Basic earnings per share (EPS) for the financial year ended March 31,2024 is '' 12.24 as against '' 14.59 in the previous financial year.

Diluted earnings per share (EPS) for the financial year ended March 31,2024 is '' 12.24 as against '' 14.59 in the previous financial year.

STANDALONE

The Company has achieved revenue from operations of '' 108,094 lakhs for the financial year ended March 31,2024, increase of 5.49% as compared to '' 102,472 lakhs in the previous financial year.

Profit after tax (PAT) for the financial year ended March 31,2024 is '' 12,691 lakhs, decrease of 1.15% as against '' 12,839 lakhs in the previous financial year.

Basic earnings per share (EPS) for the financial year ended March 31,2024 is '' 13.94 as against '' 15.19 in the previous financial year.

Diluted earnings per share (EPS) for the financial year ended March 31,2024 was '' 13.94 as against '' 15.19 in the previous financial year.

3. SIGNIFICANT ACTIVITIES IN 2023-24

The year under review would be remembered for the following significant activities in your Company:

â¢ The Company has updated its registered office address. The new address is now Sarkhej-Bavla Road, Changodar, Sanand, Ahmedabad, Gujarat-382213, India.

â¢ M/s. Harsha Engineers Advantek Limited, a wholly owned subsidiary of the Company ("Harsha Advantek") has acquired/agreed to acquire a nonagricultural land spanning approximately 100,161 sq. mtrs. near Bavla, Ahmedabad, Gujarat, India.

This land is intended for industrial use. Additionally, Harsha Advantek has commenced commercial production at its lease site in 4^th quarter of 202324.

â¢ The Company has entered into a Share Subscription Agreement with M/s. Harsha Engineers Advantek Limited, a wholly owned subsidiary of the Company ("WOS"), on May 25, 2023. According to the agreement, the company has committed to investing up to a total amount of '' 350 crores in the WOS. This investment will be made through the subscription of Optionally Convertible NonCumulative Redeemable Preference Shares ("OCRPS") of WOS in one or more installments. The funds invested will be utilized by WOS to enhance its long-term capital base and support its working capital requirements. This investment aims to strengthen WOS''s financial stability and provide the necessary funds for operational expenses. The Company has invested '' 70 crores in WOS as of March 31,2024 through issuance of OCRPS.

â¢ The Company has entered into agreement with Goldi Solar Private Limited to jointly bid for the tender ACE (Ele/Mech)/Light &EEC/09/2023-2024 issued by SMC (Surat Municipal Corporation for EPC of 10 MW (AC) Ground Mounted Grid Connected Solar Photovoltaic Power Plant with Land on lease at any location of Gujarat with comprehensive maintenance up to 10 years including free Maintenance during first year.

â¢ The Company has transferred its equity investment of 3,297,050 shares, equivalent to a 25.9999% stake, in Sunstream Green Energy One Private Limited, an associate of the Company. The transfer was made to Sunstream Green Energy Private Limited ("Transferee") as per the Agreement for Sale of Shares dated February 16, 2024, at a price of '' 10 per share. As of March 31, 2024, the Company owns 10 equity shares in Sunstream Green Energy One Private Limited. Under the provisions of Companies Act 2013, the Company no longer holds the status of being an associate with said company.

â¢ The Company has entered into an Agreement ("the Agreement") with Umbra Group S.p.A ("Umbra Group") on April 12, 2024. In accordance with the Agreement, the Company has been appointed as the exclusive authorized agency of Umbra Group for repair, marketing, promotion, and sale of industrial ball screws, linear actuators, electrospindles, milling heads or other manufactured components ("Products") within the territory of India and the Company wishes to market, promote, repair and sell the Products.

â¢ M/s. HASPL Americas Corporation, a wholly owned subsidiary of the Company, has been officially terminated in accordance with the applicable laws. This has been confirmed by the certificate issued by the State Corporation Commission of Virginia on February 29, 2024.

â¢ National Company Law Tribunal, Ahmedabad Bench (NCLT), in its order dated January 29, 2024, has dismissed Company Petition 156 of 2021 filed by Ganges International Private Limited (Operational Creditor) for the amount of '' 30,855,708 (inclusive of interest).

â¢ The Company has been honored with an award in the category of "Most Improved Supplier" by Timken.

â¢ The Company has been honored with the "Partner Performance Award" by JTEKT India for their exceptional efforts in "Best in Delivery".

â¢ The Company has been recognized by ZF India with the "Outstanding Support to Materials Management India Strategy" award on January 8, 2024.

â¢ The Company has been awarded the prestigious "Three Star Export House Status" by DGFT for a remarkable duration of 5 years.

â¢ The Company was honored with the prestigious "Intelligent & Agile" category award by SKF India on March 18, 2024, during their Supplier Day.

â¢ The Company was honored with the prestigious Best Supplier Award across all categories by NEI India during their Supplier Meet on March 22, 2024.

â¢ The Company has successfully attained the ISO : 45001 certification on September 24, 2023.

â¢ The Company has successfully obtained the TISAX label as issued by ENX portal in January 2024, after undergoing an assessment by Bureau Veritas (India) Pvt. Ltd., Auditor of TISAX.

â¢ Mr. Altaf D. Ghachi, a skilled CNC Operator in the Stamping Division of the Company has been recognized with the esteemed RAJYA SHRAM SHRI AWARD for 2022-23 by the Department of Labour, Skill Development, and Employment, Government of Gujarat, Gandhinagar, on March 11, 2024 in recognition of his outstanding contributions to the field.

â¢ The Company has been recognized for its commitment to sustainability by Schaeffler, earning an award in the ''Sustainability'' category.#

#The award was presented in April 2024.

4. UTILISATION OF NET PROCEEDS OF THE INITIAL PUBLIC OFFER ("IPO")

As on March 31,2024, the main objects and utilisation of net proceeds of the IPO are as follows:

('' in crores)

Sl. No.	Item Head	Amount as proposed in the Offer Document	Fund Utilised
1	Pre-payment or scheduled repayment of a portion of the existing borrowing availed by the Company	270.00	270.00
2	Funding capital expenditure requirements towards purchase of Machinery	77.95	46.93
3	Infrastructure repairs and renovation of our existing production facilities including office premises in India	7.12	6.66
4	General corporate purposes	74.33	74.33
	Total	429.40	397.92

Note: The Company has not fully utilized the net proceeds from its Initial Public Offering (IPO) for the purposes stated in the Prospectus dated September 19, 2022, during 2023-24. Consequently, the Board of Directors and the Audit Committee, in their meeting held on February 8, 2024, have approved an extension of the deployment period for the IPO proceeds towards the objectives outlined in the Prospectus dated September 19, 2022, up to March 31,2026.

5. SHARE CAPITAL

The Authorised Share Capital of your Company as on March 31, 2024 stood at '' 1,000,000,000 divided into 100,000,000 equity shares of '' 10 each. The Issued Share Capital of your Company is '' 910,441,050 divided into 91,044,105 equity shares of '' 10 each and the Subscribed and Paid-up Capital is '' 910,441,050 divided into 91,044,105 equity shares of '' 10 each fully paid-up.

6. DIVIDEND

The Board of Directors have recommended a final dividend of '' 1 per equity share of '' 10 each fully paid up for the financial year ended on March 31,2024. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting. The final dividend on equity shares, if approved by the shareholders, would involve a cash outflow of '' 910.44 lakhs.

7. DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Board of the Company has adopted a Dividend Distribution Policy, which

is available on the website of the Company at https://www.harshaengineers.com/InvestorRelations/ company-policies.php

8. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 125 of the Act and other applicable provisions, if any, of the Act including any statutory modifications or re-enactments thereof, during the financial year ended March 31,2024 the Company has not required to transfer any amount in the Investor Education and Protection Fund.

9. TRANSFER TO RESERVES

As permitted under the provisions of the Act, the Board does not propose to transfer any amount to general reserve for the financial year ended on March 31,2024.

10. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITIONS BETWEEN THE END OF FINANCIAL YEAR AND DATE OF THE REPORT

There have been no other material changes and commitments which affect the financial position of the Company, that have occurred between the end of financial year to which the financial statements relates and the date of this report.

11. DETAILS OF SUBSIDIARY/HOLDING, ASSOCIATE AND JOINT VENTURE CEASED AND ACQUIRED DURING THE FINANCIAL YEAR

As on March 31,2024, the Company has three subsidiaries and a Joint Venture, the details of which are given below:

Sl. No.	Name & Address of the Company	CIN/ GLN	Holding/ Subsidiary/ Associate/ Joint Venture	% of Share Holding/ Capital Contribution
1	Cleanmax Harsha Solar LLP 13, A Floor 13, Plot 400, The Peregrine Apartment, Kismat Cinema, Prabhadevi, Mumbai-400025, Maharashtra, India.	AAE-4231	Joint Venture	50%
2	Harsha Precision Bearing Components (China) Co. Limited No. 10 Fuhua Road, Bixi Avenue, Changshu City, Jiangsu, Province, China.	Foreign Subsidiary	Wholly Owned Subsidiary	100%
3	Harsha Engineers Europe SRL Ghimbav, "ICCO Ghimbav - Brasov Industrial Park", County Road 103C, km 2 115, Building H4, County Brasov.	Foreign Subsidiary	Wholly Owned Subsidiary	100%
4	Harsha Engineers Advantek Limited Sarkhej-Bavla Road, Changodar, Ahmedabad, Sanand-382213, Gujarat, India.	U28140GJ2023PLC139182	Wholly Owned Subsidiary	100%

Note:

M/s HASPL Americas Corporation, a wholly owned subsidiary of the Company, has been officially terminated in accordance with the applicable laws. This has been confirmed by the certificate issued by the State Corporation Commission of Virginia on February 29, 2024.

The Company has transferred its equity investment of 3,297,050 shares, equivalent to a 25.9999% stake, in Sunstream Green Energy One Private Limited, an associate of the Company. The transfer was made to Sunstream Green Energy Private Limited ("Transferee") as per the Agreement for Sale of Shares dated February 16, 2024, at a price of '' 10 per share. As of March 31, 2024, the Company owns 10 equity shares in Sunstream Green Energy One Private Limited. Under the provisions of Companies Act, 2013, the Company no longer holds the status of being an associate with said company.

features of the financial statements of subsidiaries and joint venture in the prescribed Form no. AOC-1 is appended as ANNEXURE-A. The separate audited financial statements in respect of the subsidiary shall be kept open for inspection at the Registered Office of the Company. The Company will also make available these documents upon request by any Member of the Company interested in obtaining the same. The separate audited financial statements in respect of the subsidiary are also available on the website of the Company at https://www.harshaengineers.com/ InvestorRelations/financial-information.php. The Company has framed a policy for determining material subsidiaries, which has been available on the website of the Company at https://www.harshaengineers.com/ InvestorRelations/company-policies.php

12. DIRECTORS

The Board of Directors consists of 10 Directors, out of which 5 are Non-Executive and Independent Directors including one women Director and 5 are Executive and Non-Independent Directors including one women Director. The composition is in compliance with the Act and SEBI Listing Regulations.

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Act and the Articles of Association of the Company, Mr. Harish

Rangwala (DIN:00278062) Managing Director and Mr. Vishal Rangwala (DIN:02452416) CEO & Whole-time Director of the Company are liable to retire by rotation at the ensuing Annual General Meeting, being eligible for re-appointment and both have offered themselves for the same.

13. PERFORMANCE EVALUATION

Pursuant to the provisions of the Act and SEBI Listing Regulations, the following performance evaluations were carried out:

a. Performance evaluation of the Board, Chairman and non-Independent Directors by the Independent Directors;

b. Performance evaluation of the Board, its committees, and Independent Directors by the Board of Directors.

The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report which forms part of this Annual Report.

14. REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The Nomination Remuneration Evaluation Policy is available on the website of the Company at https://www.harshaengineers.com/ InvestorRelations/company-policies.php.

15. KEY MANAGERIAL PERSONNEL ("KMP")

Pursuant to the provisions of Section 2(51) and 203 of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 following persons are acting as Key Managerial Personnel ("KMP") of the Company as on March 31,2024.

Sl. No.	Name of KMP	Designation
1	Mr. Rajendra Shah	Chairman & Whole-time Director
2	Mr. Harish Rangwala	Managing Director
3	Mr. Vishal Rangwala	CEO & Whole-time Director
4	Mr. Pilak Shah	COO & Whole-time Director
5	Ms. Hetal Naik	Whole-time Director

Sl. No.	Name of KMP	Designation
6	Mr. Maulik Jasani	VP Finance & Group CFO
7	Mr. Kiran	Company Secretary & Chief
	Mohanty	Compliance Officer

During the year under review, there was no change to the KMP of the Company.

The term of Mr. Rajendra Shah, Mr. Harish Rangwala, Mr. Vishal Rangwala, Mr. Pilak Shah and Ms. Hetal Naik as a KMP will be expired on December 24, 2024. Hence proposal of their re-appointment for the period of five years with effect from December 25, 2024 has been attached in the Notice which forms part of this Annual Report.

16. NUMBER OF BOARD MEETINGS HELD

The Board of Directors duly met 4 (four) times during the financial year 2023-24. All the Board Meetings were held as per Section 173 of Act with all the relevant rules & regulations related to that. Secretarial Standard-1 (Board Meeting) and SEBI Listing Regulations are duly complied with.

The details of the meetings of the Board of Directors of the Company held and attended by the Directors during the financial year 2023-24 are given in the Corporate Governance Report which forms part of this Annual Report.

17. INDEPENDENT DIRECTOR

The Company has complied with the definition of Independence according to the provisions of Section 149(6) of the Act and SEBI Listing Regulations. The Company has also obtained declarations from all the Independent Directors pursuant to Section 149(7) of the Act and SEBI Listing Regulations. All Independent Directors have provided declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and SEBI Listing Regulations.

18. FAMILIARIZATION PROGRAM FOR THE INDEPENDENT DIRECTOR

updated the Independent Directors with the strategy, operations and functions of the Company and Engineering Industry as a whole. The details of such familiarisation programs for Independent Directors are explained in the Corporate Governance Report which forms part of this Annual Report.

19. COMMITTEES

During the financial year, the Board has 6 Committees: Audit Committee, Nomination & Remuneration Committee, Stakeholder Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee and Management Committee. During the financial year, all recommendations of the Committees of the Board which were mandatorily required have been accepted by the Board.

A detailed note on the composition of the Board and its Committees, including its terms of reference is in line with the provisions of the Act and the SEBI Listing Regulations and provided in the Corporate Governance Report which forms part of this Annual Report.

20. RISK MANAGEMENT FRAMEWORK

The Company has a Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companyâs competitive advantage. The risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at the Company level as well as for business segments.

The Company has a Risk Management Committee and Risk Management Policy consistent with the provisions of the Act and the SEBI Listing Regulations. The Risk Management Policy is available on the website of the Company at https://www. harshaengineers.com/InvestorRelations/company-policies.php. The Committee facilitates the execution of risk management practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting and also provide guidance to the management team. The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and related procedures & status.

The details of Risk Management Committee along with other details are set out in Corporate Governance Report, forming part of this Annual report.

21. DISCLOSURE UNDER SECTION 67(3)(C) OF THE COMPANIES ACT, 2013

No disclosure is required under Section 67(3)(c) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said section are not applicable.

22. DEPOSIT

During the year, the Company has not accepted deposits under the provisions of the Companies Act, 2013.

23. RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year 2023-24 were on an armâs length basis and were in the ordinary course of business and are in compliance with the applicable provisions of the Act and the SEBI Listing Regulations. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel, etc. which may have potential conflict with the interest of the Company at large or which warrants the approval of the shareholders. Accordingly, no transactions are being reported in Form No. AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. However, the details of transactions with Related Parties are provided in the Companyâs financial statements in accordance with the Accounting Standards.

All Related Party Transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee and the Board on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

The Related Party Transactions Policy is available on our website, at https://www.harshaengineers.com/ InvestorRelations/company-policies.php

24. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return as on March 31, 2024 in the prescribed Form no. MGT-7 is

available on the Companyâs website at https://www. harshaengineers.com/InvestorRelations/financial-information.php

25. PARTICULARS OF LOANS, GUARANTEE AND INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are provided in the notes to the Financial Statements.

26. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, Directors of the Company hereby state and confirm that:

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

b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the Company for the same period;

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

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

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

27. AUDITORS AND AUDITORS'' REPORT Statutory Auditor

M/s. Pankaj R. Shah & Associates, Chartered Accountants (FRN:107361W) was appointed as Statutory Auditor of the Company for a period of five consecutive years from the conclusion of 11 ^th Annual General Meeting until the conclusion of the 16^th

Annual General Meeting of the Company with such remuneration as may be decided by the Board of Directors.

The notes on Financial statements referred to in the Auditorsâ Report are self-explanatory and do not call for any further comments. The Auditorsâ Report does not contain any qualification, reservation or adverse remarks.

Cost Auditor

M/s. Kiran J. Mehta & Co., Cost Accountants (FRN:000025) were appointed as Cost Auditors to carry out the audit of cost records of the Company for the financial year ending March 31,2024.

Secretarial Auditor

M/s. Chirag Shah & Associates, Company Secretaries were appointed as Secretarial Auditor to carry out Secretarial Audit of the Company for the financial year ending March 31,2024.

According to the provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report is enclosed as a part of this Boardâs Report as an ANNEXURE-B.

The observations and comments, appearing in the Secretarial Auditorâs Report are self-explanatory and do not call for any further comments. The Secretarial Auditorâs Report does not contain any qualification, reservation or adverse remarks.

Internal Auditor

M/s. Talati & Talati LLP Chartered Accountants (FRN:110758W) and M/s. MAR & Co., Chartered Accountants (FRN:138633W) were appointed as Internal Auditors of the Company for Engineering Business Division and Solar EPC Business Division respectively for the financial year 2023-24. The Board of Directors of the Company in consultation with the Internal Auditors formulated the scope, functioning, periodicity and methodology for conducting an Internal Audit.

28. INSURANCE

The Company has taken adequate insurance cover of all its movable & immovable assets (except Land) to cover various type of risks.

29. CREDIT RATING

There has been no revision in credit ratings of the Company during the financial year ended March 31, 2024, details of which are as under:

Credit Rating Agency

Facilities/

Instruments

Existing Ratings

New Ratings

Rating Action

Amount ('' in crores)

CARE Ratings Limited

Long term / Short term Bank Facilities

CARE AA-; Stable /CARE A1

CARE AA-; Stable / CAREA1

Reaffirmed by CARE Rating Limited

483.87 (Enhanced from 447.87)

30. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNING AND OUTGO

Information required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is disclosed in the ANNEXURE-C to this Boardâs Report.

31. CORPORATE SOCIAL RESPONSIBILITY ("CSR")

In accordance with the provisions of Section 135 of the Act and rules made thereunder the Company has adopted a policy for CSR and the Board has constituted a committee for implementing the CSR activities. The Annual Report on the CSR activities is appended as ANNEXURE-D to this Boardâs Report.

32. CORPORATE GOVERNANCE REPORT AND BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In compliance with Regulation 34 of the SEBI Listing Regulations, a separate Report on Corporate Governance and the Business Responsibility and Sustainability Report, forms part of this Annual Report.

33. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as stipulated under the SEBI Listing Regulations is presented in a separate section forming part of this Annual Report.

34. PARTICULARS OF EMPLOYEES

the report and the accounts are being sent to the Members, excluding the aforesaid Annexure. In terms of Section 136 of the Act, the said Annexure is open for inspection and any member interested in obtaining a copy of the same may write to the Company Secretary at [email protected].

35. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is committed to provide and promote a safe and healthy work environment for all its employees.

The Company has a ''Prevention of Sexual Harassmentâ (POSH) policy which is in line with the statutory requirement. The Company has put in place a structured reporting and redressal mechanism. The POSH policy is communicated to all employees of the Company. During the financial year 2023-24, no complaints in respect of the same has been received by the Company.

36. VIGIL MECHANISM / WHISTLE BLOWER

Pursuant to the provisions of the Act and rules made thereunder and SEBI Listing Regulations, the Company has framed and adopted vigil mechanism policy to deal with instance of fraud and mismanagement, if any and is available on the website of the Company at https://www.harshaengineers.com/InvestorRelations/ company-policies.php. The Company has also provided adequate safeguards against victimisation of employees and directors who express their concerns.

37. INTERNAL FINANCIAL CONTROLS

Your Company has implemented Internal Financial Controls over Financial Reporting through policies, procedures and guidelines. The approved schedule of powers are used to control the approval process for various activities, based on hierarchical value limits. A combination of these systems will enable your Company to maintain a robust design of controls and its operating effectiveness is ensured from time to time through internal checks and audit.

The Statutory Auditor of your Company has also given an opinion that the Internal Financial Controls over Financial Reporting are adequate and are operating effectively during the financial year.

38. NOTES TO ACCOUNTS

The notes forming part of the accounts are selfexplanatory and therefore do not call for any further

comments. ANNEXURE-A to ANNEXURE-E forms part of this Boardâs Report.

39. ACKNOWLEDGEMENT

The Directors are thankful for the co-operation and assistance received from the Financial Institutions, Bankers, Collaborators, Central and State Government Departments, Local Authorities, Shareholders, Employees and other stakeholders of the Company.

Registered Office: By Order of the Board of Directors

Sarkhej-Bavla Road, Changodar, Ahmedabad,

Sanand-382213, Gujarat, India. Rajendra Shah

CIN: L29307GJ2010PLC063233 Chairman & Whole-time Director

Email-Id: [email protected] DIN:00061922

Website: www.harshaengineers.com May 16, 2024

Mar 31, 2023

The Board of Directors are pleased to present Integrated Annual Report together with the Audited Annual Accounts of the Company for the financial year ended March 31,2023.

1. FINANCIAL RESULTS

The Audited Standalone and Consolidated Financial Statements of the Company as on March 31, 2023 are prepared in accordance with the relevant applicable IND AS and provisions of the Companies Act, 2013.

The standalone and consolidated performance during the financial year ended March 31,2023 has been as under:

(Rs. in Lakhs)
Particulars	Standalone		Consolidated
	For the year	For the year	For the year	For the year
	ended	ended	ended	ended
	March 31, 2023	March 31, 2022	March 31, 2023	March 31, 2022
Revenue from Operations	102,472	95,645	136,402	132,148
Profit Before Depreciation and Tax	19,561	16,261	20,324	16,199
Less : Depreciation & Amortisation Expenses	2,331	1,962	3,612	3,536
Profit for the year before tax	17,230	14,299	16,712	12,663
Provision for Taxation:
Less: Current Year Tax	3,863	3,325	3,846	3,325
Less: Deferred Tax	528	366	538	143
Profit after tax	12,839	10,608	12,328	9,195
Add:Other Comprehensive Income for the year	(748)	144	(748)	144
Total Comprehensive Income for the year	12,091	10,752	11,580	9,339

2. PERFORMANCE AND OPERATION REVIEW CONSOLIDATED

The Company has achieved revenue from operation of '' 136,402 lakhs for the year ended March 31,2023, an increase of 3.22% as compared to '' 132,148 lakhs in the previous year.

Profit after tax (PAT) for the year ended March 31,2023 was '' 12,328 lakhs, an increase of 34.07% as against '' 9,195 lakhs in the previous year.

Basic earnings per share (EPS) for the year ended March 31,2023 was '' 14.59 as against '' 16.06 in the previous year.

Diluted earnings per share (EPS) for the year ended March 31,2023 was '' 14.59 as against '' 11.90 in the previous year.

STANDALONE

The Company has achieved revenue of '' 102,472 lakhs for the year ended March 31,2023, increase of 7.14 % as compared to '' 95,645 lakhs in the previous year.

Profit after tax (PAT) for the year ended March 31,2023 was '' 12,839 lakhs, increase of 21.03% as against '' 10,608 lakhs in the previous year.

Basic earnings per share (EPS) for the year ended March 31,2023 was '' 15.19 as against '' 18.53 in the previous year.

Diluted earnings per share (EPS) for the year ended March 31,2023 was '' 15.19 as against '' 13.73 in the previous year.

3. SIGNIFICANT ACTIVITIES IN FINANCIAL YEAR 2022-23

The year under review would be remembered for the following significant activities in your Company:

â¢ The Company has completed Initial Public Offer (IPO) and equity shares of the Company were listed on National Stock Exchange of India Limited and BSE Limited on September 26, 2022

â¢ M/s Harsha Engineers BV merged with the Company effective from November 14, 2022

â¢ Setting up Hybrid Power Project with configuration of Wind Turbines Generators of 2.7 MW alongwith 0.675 MW AC/ 1.0125 MW DC Solar Power Plant

â¢ Repayment of Debt amounting to '' 270 crores through IPO Proceeds

â¢ Upgradation of Credit Rating to CARE AA-; Stable from CARE A ; Stable for Long Term Bank Facilities

â¢ Incorporation of a wholly owned subsidiary company in the name of Harsha Engineers Advantek Limited with objective of manufacturing of bearing cages with primary focus on Large size cages, precision stamping components, Bronze Bushes among other.

â¢ The Company got a Best Kaizen Award at 11 ^th Annual International Quality Management Conference held by the American Society for Quality and hosted by Nirma University

â¢ The Company got a "Gujarat State Annual Solar Awards 2022" presented at SuryaCan Ahmedabad

2022 for EPC Company of Year State of Gujarat in Industrial Category (Gold Category)

â¢ Mr Maulik Jasani, VP Finance & Group CFO has been awarded as CA Business Leader 40 under 40 by the Institute of Chartered Accountants of India in Association with CNBC TV18.

4. INITIAL PUBLIC OFFER (IPO) OF EQUITY SHARES

Your Directors are pleased to inform you that, the Company has completed its Initial Public Offer ("IPO") of 22,886,595 equity shares of face value of '' 10 each at an issue price of '' 330 aggregating up to '' 75,500 lakhs comprising through fresh issue of 13,795,695 equity shares aggregating up to '' 45,500 lakhs and Offer for Sale for 9,090,900 equity shares aggregating up to '' 30,000 lakhs. The Offer was made pursuant to Regulation 6(1) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The equity shares of the Company were listed on National Stock Exchange of India Limited and BSE Limited on September 26, 2022.

As on March 31,2023, the main objects and utilisation of net proceeds from the IPO are as follows: ('' in crores)
Sl. No.	Item Head	Amount as proposed in the Offer Document	Fund Utilised
1	Pre-payment or scheduled repayment of a portion of the existing borrowing availed by the Company	270.00	270.00
2	Funding capital expenditure requirements towards purchase of Machinery	77.95	17.08
3	Infrastructure repairs and renovation of our existing production facilities including office premises in India	7.12	4.25
4	General corporate purposes	74.33	74.33
	Total	429.40	365.66

5. SCHEME OF AMALGAMATION OF M/S HARSHA ENGINEERS BV WITH THE COMPANY

During the financial year 2022-23, the Scheme of Amalgamation of M/s Harsha Engineers BV ("HEBV or Netherland Entity") with the Company and their respective shareholders and creditors was approved by the National Company Law Tribunal (NCLT), Ahmedabad Bench vide order dated August 25, 2022.

All necessary sanctions and approvals as required under the applicable laws of Netherlands have been received by HEBV hence this Scheme is now effective and Netherland Entity is ceased to be effective from November 14, 2022. On account of this merger, Harsha

Engineers Europe SRL has become direct subsidiary of the Company.

6. ACQUISITION OF REMAINING 2 EQUITY SHARES OF M/S HARSHA ENGINEERS EUROPE SRL THROUGH TRANSFER OF SHARES FROM MR. RAJENDRA SHAH AND MR. HARISH RANGWALA

The Company has acquired 2 equity shares of M/s Harsha Engineers Europe SRL by purchasing shares from Mr. Rajendra Shah and Mr. Harish Rangwala who were holding 1 equity share of RON 10 each respectively. On account of this acquisition, M/s Harsha Engineers Europe SRL has become wholly owned subsidiary of the Company.

7. SHARE CAPITAL

The Company had completed its Initial Public Offer (IPO) and alloted fresh issue of 13,795,695 equity shares of face value of '' 10 each. Post IPO, the paid up share capital of the Company is increased to '' 910,441,050 consisting of 91,044,105 equity shares of '' 10 each.

8. DIVIDEND

The Board of Directors have recommended a final dividend of '' 1 per equity share of '' 10 each fully paid up for the financial year ended on March 31,2023. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting. The final dividend on equity shares, if approved by the Shareholders, would involve a cash outflow of '' 910.44 lakhs.

9. DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Board of the Company has adopted a Dividend Distribution Policy, which is available on the website of the Company at https://www. harshaengineers.com/InvestorRelations/company-policies.php.

10. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 125 of the Companies Act, 2013 and other applicable provisions, if any, of the Companies Act, 2013 including any statutory modifications or re-enactments thereof, there was no unpaid/ unclaimed dividend declared last year/years.

11. TRANSFER TO RESERVES

As permitted under the provision of Companies Act, 2013, the Board does not propose to transfer any amount to General Reserve for the financial year ended on March 31,2023.

12. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITIONS BETWEEN THE END OF FINANCIAL YEAR AND DATE OF THE REPORT

There have been no other material changes and commitments which affect the financial position of the Company, that have occurred between the end of financial year to which the financial statements relates and the date of this report.

13. DETAILS OF SUBSIDIARY/HOLDING, ASSOCIATE AND JOINT VENTURE CEASED AND ACQUIRED DURING THE FINANCIAL YEAR

As on March 31, 2023, the Company has four Subsidiaries, an Associate and a Joint Venture, the details of which are given below:

Sl. No.	Name & Address of the Company	CIN/GLN	Holding/ Subsidiary/ Associate/ Joint Venture	% of Shares Held/Capital
1	Cleanmax Harsha Solar LLP 13, A Floor 13, Plot 400 The Peregrine Apartment, Kismat Cinema, Prabhadevi Mumbai, Mumbai-400025, Maharashtra, India.	AAE-4231	Joint Venture	50%
2	HASPL Americas Corporation 7480 Birdwood Avenue, Ste 1120, Mclean-22102, Fairfax, USA.	Foreign Subsidiary	Wholly Owned Subsidiary	100%
3	Harsha Precision Bearing Components (China) Co. Limited No. 10 Fuhua Road, Bixi Sub-District, Changshu, Jiangsu, Province, China.	Foreign Subsidiary	Wholly Owned Subsidiary	100%
4	Harsha Engineers Europe SRL* Str. Hermann Oberth, Nr.23, Hala 4 Parcul Industrial ICCO Ghimbav, Brasov, Romania.	Foreign Subsidiary	Wholly Owned Subsidiary	100%

Sl.

No.

Name & Address of the Company

CIN/GLN

Holding/ Subsidiary/ Associate/ Joint Venture

% of Shares Held/Capital

Sunstream Green Energy One Private Limited Unit No. 28C, Nand Deep Industrial Estate 2^ndFloor, Kondivita Lane, J.B. Nagar, Andheri (E) Mumbai-400059, Maharashtra, India.

U74900MH2016PTC271603

Associate

26%

Harsha Engineers Advantek Limited** NH-8A,Sarkhej-Bavla Highway, Changodar, Sanand, Ahmedabad-382213, Gujarat, India.

U28140GJ2023PLC139182

Wholly Owned Subsidiary

100%

* The Company has acquired 2 equity shares of M/s Harsha Engineers Europe SRL by purchasing share from Mr. Rajendra Shah and Mr. Harish Rangwala who were holding 1 equity share of RON 10 each respectively. On account of acquisition, M/s Harsha Engineers Europe SRL has become wholly owned subsidiary of the Company.

** M/s Harsha Engineers Advantek Limited was incorporated as a wholly owned subsidiary on March 14, 2023.

Note:

M/s Harsha Engineers BV was merged with the Company effective from November 14, 2022.

During the year under review, the Board of Directors reviewed the affairs of subsidiaries, associate and joint venture. In accordance with section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and all its subsidiaries including associates and joint venture, which form part of the Annual Report. Further a statement containing the salient features of the financial statements of our subsidiaries, associate and joint venture in the prescribed Form AOC-1 is appended as Annexure-A. The separate audited financial statements in respect of the subsidiary shall be kept open for inspection at the Registered Office of the Company. The Company will also make available these documents upon request by any Member of the Company interested in obtaining the same. The separate audited financial statements in respect of the subsidiary are also available on the website of the Company at https://www.harshaengineers. com/InvestorRelations/financial-information.php#. The Company has framed a policy for determining material subsidiaries, which has been available on the website of the Company at https://www. harshaengineers.com/InvestorRelations/company-policies.php

14. DIRECTORS

The Board of Directors consists of 10 members, out of which 5 are Independent Directors including one women Independent Director and 5 are Non-Executive and Non-Independent Directors. The composition is in compliance with the Companies Act, 2013 and SEBI Listing Regulations.

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Rajendra Shah (DIN:0061922) Chairman & Wholetime Director and Ms. Hetal Ukani (DIN:01990172) Whole-time Director of the Company are liable to retire by rotation at the ensuing Annual General Meeting, being eligible for re-appointment and both have offered themselves for the same.

15. PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the following performance evaluations were carried out;

a. Performance evaluation of the Board, Chairman and non-Independent Directors by the Independent Directors;

b. Performance evaluation of the Board, its committees, and Independent Directors by the Board of Directors.

The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report which forms part of this Annual Report.

16. REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key

Managerial Personnel and Senior Management and their remuneration. The Nomination Remuneration Evaluation Policy is available on the website of the Company at https://www.harshaengineers.com/ InvestorRelations/company-policies.php.

17. KEY MANAGERIAL PERSONNEL (KMP)

Pursuant to provisions of Section 2(51) and 203 of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 following persons are acting as Key Managerial Personnel (KMP) of the Company as on March 31,2023.

Sl. No.	Name of KMP	Designation
1	Mr. Rajendra Shah	Chairman & Whole-time Director
2	Mr. Harish Rangwala	Managing Director
3	Mr. Vishal Rangwala	CEO & Whole-time Director
4	Mr. Pilak Shah	COO & Whole-time Director
5	Ms. Hetal Ukani	Whole-time Director
6	Mr. Maulik Jasani	VP Finance & Group CFO
7	Mr. Kiran Mohanty	Company Secretary & Chief Compliance Officer

During the year under review, there were no changes to the Key Managerial Personnel (KMP) of the Company.

18. NUMBER OF BOARD MEETINGS HELD

The Board of Directors duly met 7 (Seven) times during the financial year 2022-23. All the Board Meetings were held as per Section 173 of Companies Act, 2013 with all the relevant rules & regulations related to that, Secretarial Standard -1 (Board Meeting) and Listing Regulations are duly complied with.

The details of the meetings of the Board of Directors of the Company held and attended by the Directors during the financial year 2022-23 are given in the Corporate Governance Report which forms part of this Annual Report.

19. INDEPENDENT DIRECTOR

The Company has complied with the definition of Independence according to the provisions of Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has also obtained declarations from all the Independent Directors pursuant to Section 149(7) of the Companies Act,

2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All Independent Directors have provided declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI Listing Regulations.

20. FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

The Independent Directors have been updated with their roles, rights and responsibilities in the Company by specifying it in their appointment letter along with necessary documents, reports and internal policies to enable them to familiarise with the Companyâs procedures and practices. The Company has through presentations, at regular intervals, familiarised and updated the Independent Directors with the strategy, operations and functions of the Company and Engineering Industry as a whole. The details of such familiarisation programmes for Independent Directors are explained in the Corporate Governance Report which forms part of this Annual Report.

21. COMMITTEES

During the year the Board has 6 Committees : Audit Committee, Nomination & Remuneration Committee, Stakeholder Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee, and Management Committee. During the year, all recommendations of the Committees of the Board which were mandatorily required have been accepted by the Board.

A detailed note on the composition of the Board and its Committees, including its terms of reference is provided in the Corporate Governance Report which forms part of this Annual Report. The composition and terms of reference of all the Committees of the Board of Directors of the Company is in line with the provisions of the Act and the Listing Regulations.

22. RISK MANAGEMENT FRAMEWORK

The Company has a Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance the Companyâs competitive advantage. The risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at the Company level as well as for business segments.

The Company has a Risk Management Committee of the Board of Directors and Risk Management Policy consistent with the provisions of the Companies Act,

2013 and the Listing Regulations. The Risk Management Policy is available on the website of the Company at https://www.harshaengineers. com/InvestorRelations/company-policies.php. The Committee facilitates the execution of risk management practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting and also provide guidance to the management team. The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and related procedures & status.

The details of Risk Management Committee along with other details are set out in Corporate Governance Report, forming part of this report.

23. DISCLOSURE UNDER SECTION 67(3)(C) OF THE COMPANIES ACT, 2013

No disclosure is required under section 67(3)(c) of the Companies Act, 2013 read with Rule 16(4) of Companies (Share Capital and Debentures) Rules,

2014 in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said section are not applicable.

24. DEPOSIT

During the year the Company has accepted deposits under the provisions of the Companies Act, 2013, details of which are given below. Further there are no outstanding deposits as at March 31,2023.

('' In lakhs)

Particulars Amount

Deposits at the beginning of the financial year

i) Principal Amount 2,300.00

ii) Interest due but not paid -

iii) Interest accrued but not due -

Total (i ii iii) 2,300.00

Change in Deposits during the financial -

year

â¢ Addition 60.00

â¢ Reduction (2,360.00)

Net Change (2,300.00)

Deposits at the end of the financial year -

i) Principal Amount -

ii) Interest due but not paid -

iii) Interest accrued but not due -

Total (i ii iii) -

25. RELATED PARTY TRANSACTION

All Related Party Transactions that were entered into during the financial year 2022-23 were on an armâs length basis and were in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel, etc. which may have potential conflict with the interest of the Company at large or which warrants the approval of the shareholders. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. However, the details of transactions with Related Parties are provided in the Companyâs financial statements in accordance with the Accounting Standards.

All Related Party Transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value, terms and conditions of the transactions.

The Related Party Transactions Policy is available on our website, at https://www.harshaengineers.com/ InvestorRelations/company-policies.php

26. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return as on March 31, 2023 in the prescribed Form no. MGT-7 is available on the Companyâs website at https://www. harshaengineers.com/InvestorRelations/financial-information.php#.

27. PARTICULARS OF LOANS, GUARANTEE AND INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are provided in the notes to the Financial Statements.

28. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, Directors of the Company hereby state and confirm that:

a) in the preparation of the annual accounts for the year ended March 31, 2023, the applicable

accounting standards have been followed along with proper explanation relating to material departures;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the same period;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act, 2013 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; and

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

29. AUDITORS AND AUDITORS'' REPORT

I. Statutory Auditor

M/s Pankaj R. Shah & Associates, Chartered Accountants (FRN:107361W) was appointed as Statutory Auditor of the Company for a period of five consecutive years from the conclusion of 11^thAnnual General Meeting until the conclusion of the 16^th Annual General Meeting of the Company with such remuneration as may be decided by Board of Directors.

The notes on financial statement referred to in the Auditorsâ Report are self-explanatory and do not call for any further comments. The Auditorsâ Report does not contain any qualification, reservation or adverse remarks.

II. Cost Auditor

M/s Kiran J. Mehta & Co., Cost Accountants, Ahmedabad (FRN:000025) were appointed as Cost Auditors to carry out the audit of cost records of the Company for the financial year ended March 31,2023.

III. Secretarial Auditor

M/s Chirag Shah & Associates, Practicing Company Secretaries, Ahmedabad were appointed as Secretarial Auditor to carry out

Secretarial Audit of the Company for the financial year ended March 31,2023.

According to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report is enclosed as a part of this Boardâs report Annexure-B.

The observations and comments, appearing in the Secretarial Auditorâs Report are self-explanatory and do not call for any further comments. The Secretarial Auditorâs Report does not contain any qualification, reservation or adverse remarks.

IV. Internal Auditor

M/s Talati & Talati (FRN:110758W), Chartered Accountants and M/s MAR & Co. (FRN:138633W), Chartered Accountants were appointed as the Internal Auditors of the Company for Engineering business division and Solar EPC business division respectively for the financial year 2022-23. The Board of Directors of the Company in consultation with the Internal Auditors formulated the scope, functioning, periodicity and methodology for conducting an Internal Audit.

30. INSURANCE

The Company has taken adequate insurance cover of all movable & immovable assets (except Land) to cover various type of risks.

31. CREDIT RATING

There has been revision in credit ratings of the Company during the financial year ended March 31,

9093 details of which are as under

Credit rating agency	Facilities/ Instruments	Existing Ratings	Revised Ratings
CARE	Long Term	CARE A ;	CARE AA-;
Ratings	/Short	Stable/	Stable /
Limited	Term Bank Facilities	CAREA1	CAREA1
CARE Ratings Limited	Long Term Bank Facilities (Terms Loans)#	CARE A ; Stable	Withdrawn

# The Company has fully prepaid its term debt and taking cognizance of it, CARE Ratings Limited has withdrawn the rating assigned to term debt facilities of the Company.

32. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNING AND OUTGO

Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is disclosed in the Annexure-C to this Boardâs report.

33. CORPORATE SOCIAL RESPONSIBILITY (CSR)

In accordance with the provisions of Section 135 of the Companies Act, 2013 and rules framed thereunder your Company has adopted a policy for CSR and the Board has constituted a committee for implementing the CSR activities. The Companyâs CSR Policy is available on website, at https://www.harshaengineers. com/InvestorRelations/company-policies.php. The annual report on our CSR activities is appended as Annexure-D to the Boardâs report.

34. CORPORATE GOVERNANCE REPORT AND BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In compliance with Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate report on Corporate Governance and the Business Responsibility and Sustainability Report, forms part of this Boardâs report.

35. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of this Boardâs report.

36. PARTICULARS OF EMPLOYEES

The information as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure-E to this Boardâs report. The statement containing names of the top 10 employees, in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the Members, excluding the aforesaid Annexure. In terms of Section 136 of the Companies Act, 2013, the said Annexure is open for inspection and any member interested in obtaining a copy of the same may write

to the Company Secretary at sec@harshaengineers. com.

37. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is committed to providing and promoting a safe and healthy work environment for all its employees.

A ''Prevention of Sexual Harassmentâ (POSH) policy is in line with the statutory requirement, along with a structured reporting and redressal mechanism is in place. The POSH policy is communicated to all employees of the Company. During the financial year 2022-23, no complaints in respect of the same has been received by the Company.

38. VIGIL MECHANISM / WHISTLE BLOWER

Pursuant to the provisions of Companies Act, 2013 and rules made thereunder and SEBI (Listing Obligation and Disclosures Requirements) Regulations, 2015 the Company has framed and adopted vigil mechanism policy to deal with instance of fraud and mismanagement, if any and is available on the website of the Company at https://www.harshaengineers. com/InvestorRelations/company-policies.php. The Company has also provided adequate safeguards against victimisation of employees and Directors who express their concerns.

39. INTERNAL FINANCIAL CONTROLS

Your Company has implemented Internal Financial Controls over Financial Reporting through policies, procedures and guidelines. The approved Schedule of powers are used to control the approval process for various activities, based on hierarchical value limits. A combination of these systems will enable your Company to maintain a robust design of controls and its operating effectiveness is ensured from time to time through internal checks and audit.

The Statutory Auditor of your Company has also given an opinion that the Internal Financial Controls over Financial Reporting are adequate and are operating effectively during the financial year.

40. NOTES TO ACCOUNTS

The notes forming part of the accounts are selfexplanatory and therefore, do not call for any further comments. Annexure-A to Annexure-E forms part of this Boardâs report.

41. ACKNOWLEDGEMENT

The Directors are thankful for the co-operation and assistance received from the Financial Institutions, Bankers, Collaborators, Central and State Government Departments, Local Authorities, Shareholders, Employees and other stakeholders of the Company.

Registered Office: By Order of the Board of Directors

NH-8A, Sarkhej-Bavla Highway, Changodar, Rajendra Shah

Ahmedabad-382213, Gujarat, India.

CIN : U29307GJ2010PLC063233 Chairman & Whole-time Director

Email id : [email protected] DIN: 00061922

Website: www.harshaengineers.com May 25, 2023

Mar 31, 2022

The Board of Directors are pleased to present the 12^th Annual Report together with the Audited Annual Accounts of Harsha Engineers International Limited (formerly known as Harsha Engineers International Private Limited and Harsha Abakus Solar Private Limited) for the Financial Year ended on March 31, 2022.

FINANCIAL RESULTS

The standalone and consolidated performance during the Financial Year ended on March 31, 2022 has been as under:				? (in Lakhs)
Particulars	Standalone		Consolidated
	For the year Ended March 31, 2022	For the year Ended March 31, 2021	For the year Ended March 31, 2022	For the year Ended March 31, 2021
Revenue from Operations	95,645	58,204	132,148	87,376
Profit Before Depreciation and Tax	16,261	6,869	16,199	9,482
Less : Depreciation	1,962	1,728	3,536	3,411
Profit for the year before taxation	14,299	5,141	12,663	6,071
Provision for Taxation:
Less : Current Year Tax	3,325	-	3,325	-
Less : Deferred Tax	366	1,343	143	1,528
Profit after taxation	10,608	3,798	9,195	4,543
Add : Other Comprehensive income for the year	144	515	144	515
Total Comprehensive income for the year	10,752	4,313	9,339	5,058

PERFORMANCE AND OPERATION REVIEW CONSOLIDATED

Your Company has achieved revenue of Rs. 132,148 Lakhs for the year ended March 31, 2022, a increase of 51% as compared to Rs. 87,376 Lakhs in the previous year.

Profit after tax (PAT) for the year ended March 31, 2022 was Rs. 9,195 Lakhs, increase of 102% as against Rs. 4,543 Lakhs in the previous year.

Basic earnings per share (EPS) for the year ended March 31, 2022 was Rs. 16.06 as against Rs. 9.09 in the previous year.

Diluted earnings per share (EPS) for the year ended March 31, 2022 was Rs. 16.06 as against Rs. 5.88 in the previous year.

STANDALONE

Your Company has achieved revenue of Rs. 95,645 Lakhs for the year ended March 21, 2022, increase of 64 % as compared to Rs. 58,204 Lakhs in the previous year.

Profit after tax (PAT) for the year ended March 21, 2022 was Rs. 10,608 Lakhs, increase of 179% as against Rs. 3,798 Lakhs in the previous year.

Basic earnings per share (EPS) for the year ended March 21, 2022 was Rs. 18.53 as against Rs. 7.60 in the previous year.

Diluted earnings per share (EPS) for the year ended March 21, 2022 was Rs. 18.53 as against Rs. 4.92 in the previous year.

SIGNIFICANT ACTIVITIES IN FINANCIAL YEAR 2021-22

The year under review would be remembered for the following significant activities in our Company.

1 Consolidated the engineering business and solar EPC business under a single entity pursuant to the Scheme approved by the National Company Law Tribunal, Ahmedabad Bench

2. Filing of Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on February 3, 2022#

3. Leadership in Collaboration award received from SKF

4. Gold Winner Renovative Category 41^st CII National Kaizen Competition award received from Confederation of Indian Industry

5. Platinum Winner Breakthrough Category 41^st CII National Kaizen Competition award received from Confederation of Indian Industry

#DRHP approved by SEBI by issuing final observation letter dated April 30, 2022 which is valid for 12 month from the date of issuance of observation letter.

COMPOSITE SCHEME OF AMALGAMATION AND ARRANGEMENT

During the year under review, the Honâble National Company Law Tribunal, Ahmedabad Bench (âNCLTâ), vide its Order dated December 23, 2021 approved the Composite Scheme of Amalgamation and Arrangement (âthe Schemeâ or âBusiness Reorganization Scheme â) as per below manner:

1. Amalgamation of Aastha Tools Private Limited (ATPL or Transferor Company 1) and Harsha Engineers (India) Private Limited (HEIPL or Transferor Company 2) into the Harsha Engineers Limited (HEL or Transferor Company 3 / Transferee Company 1) and their respective Shareholders and Creditors

2. Amalgamation of Harsha Engineers Limited (HEL or Transferor Company 3 / Transferee Company 1) and Helianthus Solar Power Private Limited (HSPPL or Transferor Company 4) into Harsha Abakus Solar Private Limited (HASPL or Transferee Company 2) and their respective Shareholders and Creditors

3. Reduction in the face value of the existing equity shares from Rs. 10/- each to Re. 1/- each of the HASPL and subsequent consolidation of such 10 equity shares having face value of Re. 1/- each into 1 equity share having face value of Rs. 10/- each in the manner set out in the Scheme and other applicable provisions of applicable Law or the Act.

The appointed date of the Scheme was April 1, 2020. The Scheme became effective from December 24, 2021 upon filing of the certified copy of order with Registrar of Companies, Ahmedabad.

CONSIDERATION GIVEN BY THE TRANSFEROR COMPANY 3 / TRANSFEREE COMPANY 1 TO THE SHAREHOLDERS OF THE TRANSFEROR COMPANY 1

As per the Scheme, Transferor Company 3 / Transferee Company 1 is holding 100% of the equity shares of the Transferor Company 1. Accordingly, pursuant to amalgamation of Transferor Company 1 with Transferor Company 3 / Transferee Company 1, equity shares held by Transferor Company 3 / Transferee Company 1 in Transferor Company

1 has been cancelled and extinguished and hence, no shares of the Transferor Company 3 / Transferee Company 1 has been issued and allotted.

CONSIDERATION GIVEN BY THE TRANSFEROR COMPANY 3 / TRANSFEREE COMPANY 1 TO THE SHAREHOLDERS OF THE TRANSFEROR COMPANY 2

As per the Scheme, Transferor Company 3 / Transferee Company 1 is holding 100% of the equity shares of the Transferor Company 2. Accordingly, pursuant to amalgamation of Transferor Company 2 with Transferor Company 3 / Transferee Company 1, equity shares held by Transferor Company 3 / Transferee Company 1 in Transferor Company

2 has been cancelled and extinguished and hence, no shares of the Transferor Company 3 / Transferee Company 1 has been issued and allotted.

CONSIDERATION GIVEN BY THE TRANSFEREE COMPANY 2 TO THE SHAREHOLDERS OF THE TRANSFEROR COMPANY 3 / TRANSFEREE COMPANY 1

The Transferee Company 2, has, without any further act or deed issue and allot its shares, credited as fully paid up, to the extent indicated below, to the members of Harsha Engineers Limited, whose name is recorded in the register of members of Harsha Engineers Limited as on the Record date in the following ratio:

â3 (Three) Equity Shares of the Transferee Company 2 of the face value of INR 10/- (Rupees Ten only) each, credited as fully paid-up for every 1 (One) Equity Share of INR 10/- (Rupees Ten only) each fully paid-up held by such members in the Transferor Company 3 / Transferee Company 1â.

CONSIDERATION GIVEN BY THE TRANSFEREE COMPANY 2 TO THE SHAREHOLDERS OF THE TRANSFEROR COMPANY 4

As per the Scheme, Transferee Company 2 is holding 100% of the equity shares of the Transferor Company 4. Accordingly, pursuant to amalgamation of Transferor Company 4 with Transferee Company 2 on the Appointed Date, equity shares held by Transferee Company 2 in Transferor Company 4 has been cancelled and extinguished and hence, no shares of the Transferee Company 2 has been issued and allotted.

SCHEME OF AMALGAMATION OF HARSHA ENGINEERS BV WITH THE COMPANY

The Board at its meeting held on February 20, 2021 approved the scheme of amalgamation (âScheme of Amalgamation-2â) of Harsha Engineers BV (HEBV) with the Company and their respective shareholders and creditors in accordance with the provisions of Section 234 read with Sections 230 to 232 of the Companies Act, 2013 and Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and other applicable rules and regulations made thereunder (including any statutory modification(s) or re-enactment(s) or amendment(s) thereof for the time being in force), relevant provisions of Memorandum of Association of the Company subject to necessary statutory approvals.

The Company is holding 100% of the equity shares of the HEBV. Accordingly, pursuant to amalgamation of HEBV. with the Company on the appointed date as per Scheme of Amalgmation-2, equity shares held by the Company in HEBV shall be cancelled and extinguished and hence, no shares of the Company shall be issued and allotted.

Further, Harsha Engineers Europe SRL in Romania is currently the subsidiary of HEBV and upon this Scheme of Amalgamation-2 becoming effective, it will become the direct subsidiary of the Company.

Currently the Scheme of Amalgamation-2 is under process at NCLT for their approval.

CHANGE OF NAME OF THE COMPANY

Pursuant to the Scheme sanctioned by Honâble National Company Law Tribunal, Ahmedabad bench vide its order December 23, 2021 and became effective from December 24, 2021, name of the Company has been changed to Harsha Engineers International Private Limited as approved by Registrar of Companies, Gujarat (âROCâ) after making required amendments to its Memorandum and Articles of Association. ROC had issued fresh certificate of incorporation on December 31, 2021.

CONVERSION OF PRIVATE COMPANY INTO PUBLIC COMPANY

Pursuant to the Scheme sanctioned by Honâble National Company Law Tribunal, Ahmedabad bench vide its order dated December 23, 2021 and became effective from December 24, 2021, the Company has been converted from âPrivate Limitedâ to âPublic Limitedâ after making required amendments to its Memorandum and Articles of Association. The Registrar of Companies, Gujarat had issued fresh certificate of incorporation on January 1, 2022. Consequent to this conversion, the name of the Company was changed from Harsha Engineers International Private Limited to Harsha Engineers International Limited.

SHARE CAPITAL

Pursuant to the Scheme sanctioned by Honâble National Company Law Tribunal, Ahmedabad bench vide its order dated December 23, 2021 and became effective from December 24, 2021 pursuant to filing of INC 28 with RoC, the authorized share capital of the ATPL, HEIPL, HEL & HSPPL (Transferor Companies), amounting to Rs. 20,00,000 (Rupees Twenty Lakhs Only) consisting of 20,000 (Twenty Thousand) equity shares of Rs. 100/- (Rupees Hundred) each and Rs. 1,00,00,000 (Rupees One Crores Only) consisting of 10,00,000 (Ten Lakhs) equity shares of Rs. 10/- (Rupees Ten) each and Rs. 35,00,00,000 (Rupees Thirty-Five Crores only) consisting of 3,50,00,000 (Three Crores and Fifty Lakhs)

equity shares of Rs. 10/- (Rupees Ten) each and Rs. 2,00,000 (Rupees Two Lakhs only) consisting of 20,000 (Twenty Thousand) equity shares of Rs. 10/- (Rupees Ten) each respectively has been consolidated with the authorized share capital of the HASPL (Transferee Company 2) hence as a result the Authorized Share Capital of the Company has been increased from Rs. 50,00,00,000/- (Rupees Fifty Crores) to Rs.

86.22.00. 000/- (Rupees Eighty Six Crores Twenty Two Lakhs). Further Authorised Share Capital of the Company has been increased from Rs.

86.22.00. 000/- (Rupees Eighty Six Crores Twenty Two Lakhs) to Rs.

100.00. 00.000/- (Rupees One Hundred Crore Only).

Pursuant to the aforesaid Scheme the Paid-up Share Capital of the Company has been reduced from Rs. 50,00,00,000/- (Rupees fifty crores only) divided into 5,00,00,000 (Five crores) equity shares of Rs. 10/- (Rupees Ten only) each fully paid up to Rs. 5,00,00,000/- (Rupees five crores only) divided into 5,00,00,000 (Five crores) equity shares of Re. 1/- (Rupee one only) each fully paid up.

Simultaneously, pursuant to reduction as mentioned above, every 10 (Ten) such equity shares of the reduced face value of Re. 1/- (Rupee one only) each of the Company has been consolidated into 1 (One) Equity Share of the face value of Rs. 10/- (Rupees ten only) each fully paid and the fractions has been rounded up to the nearest whole number by issuing additional 10 Equity Shares of Rs. 10/- each at par.

Also pursuant to the Scheme, the Company has issued 7,22,48,400 (Seven Crores Twenty Two Lakhs Forty Eight Thousand Four Hundred) Equity Shares of Rs. 10/- (Rupees ten only) each fully paid up to the shareholders of Harsha Engineers Limited (Transferor Company 3) on record date i.e December 25, 2021. On account of this, paid up share capital has been increased to Rs. 77,24,84,100/- with effect from December 25, 2021.

INITIAL PUBLIC OFFER

During the year under review, the Company had initiated the process of Initial Public Offer (IPO) comprises of fresh issue of shares and offer for sale. IPO has been authorized by Board pursuant to the resolution dated January 10, 2022 and by the Shareholders pursuant to a special resolution dated January 11, 2022. The IPO Committee had approved Draft Red Hearing Prospectus at its meeting held on February 3, 2022 and the same was filed with Securities and Exchange Board of India (SEBI) on February 3, 2022. The Company had applied with BSE and NSE for in-principle approval and same had been obtained from BSE on February 25, 2022 and from NSE on February 24, 2022. Further the Company had received final observation letter from SEBI on April 30, 2022 which is valid for 12 months from the date of issuance of observation letter.

DIVIDEND

The Board of Directors of the Company do not recommend any dividend on equity shares for the financial year ended on March 31, 2022.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

TRANSFER TO RESERVES

Company does not recommend transferring any amount to General Reserve for the financial year ended on March 31, 2022.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITIONS BETWEEN THE END OF FINANCIAL YEAR AND DATE OF THE REPORT

Pursuant to the Scheme, the Company had made application for adjudication of stamp duty order as required under Gujarat Stamp Act. Subsequently the Company has received demand notice from the office of the Superintendent of Stamps, Gujarat State, Gandhinagar vide its letter dated April 13, 2022 for the payment of stamp duty of Rs. 91,91,100 and same was paid by the Company. The Company has received the stamp adjudication order on April 28, 2022 stating the payment has been made as per section 32 of Gujarat Stamp Act.

Pursuant to the Scheme, the Company has applied with the concerned authorities for change of name or transfer of ownership in relation to the immovable properties and other registrations which is currently under process.

There have been no other material changes and commitments which affect the financial position of the Company, that have occurred between the end of financial year to which the financial statements relates and the date of this report.

DETAILS OF SUBSIDIARY / HOLDING, ASSOCIATE AND JOINT VENTURE CEASED AND ACQUIRED DURING THE YEAR Your Company has four Subsidiaries, an Associate and a Joint Venture as on date, the details of which are given below:
Sl. No.	Name & Address of the Company	CIN / GLN	Holding / Subsidary / Associate / Joint Venture	% of Shares held / Capital
1	Cleanmax Harsha Solar LLP 13, A Floor 13, Plot 400 The Peregrine Apartment, Kismat Cinema, Prabhadevi, Mumbai - 400025, Maharashtra, India.	AAE-4231	Joint Venture	50%
2	HASPL Americas Corporation 7480 Birdwood Avenue, Ste 1120, Mclean - 22102, Fairfax, USA.	Foreign Subsidiary	Wholly Owned Subsidiary	100%
3	Harsha Precision Bearing Components (China) Co., Ltd. No. 10 Fuhua Road, Bixi Sub-district, Changshu, Jiangsu, Province, China.	Foreign Subsidiary	Wholly Owned Subsidiary	100%
4	Harsha Engineers BV Strawinskylaan 937, 1077 XX Amsterdam, the Netherlands.	Foreign Subsidiary	Wholly Owned Subsidiary	100%
5	Harsha Engineers Europe SRL Str. Hermann Oberth, Nr. 23, Hala 4, Parcul Industrial ICCO Ghimbav, Brasov - Romania.	Foreign Step-down Subsidiary	Step-down Subsidiary	99.999924% through HEBV
6	Sunstream Green Energy One Private Limited Unit No. 28C, Nand Deep Industrial Estate 2nd Floor, Kondivita Lane, J. B. Nagar, Andheri (E) Mumbai - 400059, Maharashtra, India.	U74900MH2016PTC271603	Associate	26%

Pursuant to the Scheme sanctioned by Honâble National Company Law Tribunal (NCLT), Ahmedabad bench vide its order dated December 23,2021 and became effective from December 24, 2021, Aastha Tools Private Limited (ATPL), Harsha Engineers (India) Private Limited (HEIPL) has been merged with Harsha Engineers Limited (HEL) w.e.f appointed date and immediately thereafter HEL and Helianthus Solar Power Private Limited (HSPPL) has been merged with Harsha Abakus Solar Private Limited (HASPL) effective from appointed date i.e April 1, 2020.

Pursuant to the amalgamation of Harsha Engineers Limited and Helianthus Solar Power Private Limited with the Company, Harsha Precision Bearing Components (China) Co. Ltd., Harsha Engineers BV and Harsha Engineers Europe SRL become subsidiaries of the Company with effect from April 1, 2020 i.e Appointed date.

The Board at its meeting held on February 20, 2021 approved the Scheme of Amalgamation-2 of Harsha Engineers BV with the Company and their respective shareholders and creditors in accordance with the provisions of Companies Act 2013 which is currently under process at NCLT for their approval.

HACM Solar LLP, Joint Venture of the Company has been dissolved on October 21, 2021 and name has been struck off from the ROC.

DIRECTORS

In accordance with the provisions of Section 152 of Companies Act, 2013 read with provisions of the Articles of Association of the Company, Shri Vishal Rangwala (DIN : 02452416) CEO & Whole-time Director and Shri Pilak Shah (DIN : 00407960) COO & Whole-time Director of the Company will liable to retire by rotation at the ensuing Annual General Meeting, being eligible for re-appointment and both offer himself for the same. A brief resume and particulars relating to them are given separately under the Annexure-B.

During the year following changes has been made in the Board:

Sl. No.	Name of the Director	Date of Change	Appointment / Resignation / Change in Designation
1	Shri Dilip Sanghvi	December 25, 2021	Resigned as Independent Director
2	Shri Rajendra Shah	December 25, 2021	Appointment as Chairman and Whole-time Director
3	Shri Harish Rangwala	December 25, 2021	Appointment as Managing Director
4	Shri Vishal Rangwala	August 12, 2021	Appointment as Director
		December 25, 2021	Appointment as CEO and Whole-time Director
5	Ms. Hetal Ukani	August 12, 2021	Appointment as Director
		December 25, 2021	Appointment as Whole-time Director

6	Shri Pilak Shah	December 25, 2021	Appointment as COO and Whole-time Director
7	Shri Ambar Patel	January 10, 2022	Appointment as Independent Director
8	Shri Bhushan Punani	January 10, 2022	Appointment as Independent Director
9	Shri Kunal Shah	January 10, 2022	Appointment as Independent Director
10	Shri Ramakrishnan Kasinathan	January 10, 2022	Appointment as Independent Director
11	Prof. (Dr.) Neharika Vohra	January 10, 2022	Appointment as Independent Director

KEY MANAGERIAL PERSONNEL (KMP)

Pursuant to provisions of Section 2(51) and 203 of the Companies Act 2013 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 following persons are acting as Key Managerial Personnel (KMP) of the Company as on March 31, 2022.

Sr No.	Name of KMP	Designation
1	Shri Rajendra Shah*	Chairman & Whole-time Director
2	Shri Harish Rangwala**	Managing Director
3	Shri Vishal Rangwala***	CEO & Whole-time Director
4	Shri Pilak Shah****	COO & Whole-time Director
5	Ms. Hetal Ukani*****	Whole-time Director
6	Shri Maulik Jasani******	VP Finance & Group CFO
7	Shri Kiran Mohanty*******	Company Secretary & Chief Compliance Officer

*Shri Rajendra Shah is appointed as Chairman and Whole Time Director of the Company with effect from December 25, 2021.

**Shri Harish Rangwala is appointed as Managing Director of the Company with effect from December 25, 2021.

â¢â¢â¢Shri Vishal Rangwala is appointed as Director of the company with effect from August 12, 2021 and appointed as CEO and Whole time Director of the Company with effect from December 25, 2021.

â¢â¢â¢â¢Shri Pilak Shah is appointed as COO and Whole-time Director of the Company with effect from December 25, 2021.

â¢â¢â¢â¢â¢Shri Hetal Ukani is appointed as Director of the company with effect from August 12, 2021 and appointed as Whole time Director with effect from December 25, 2021.

â¢â¢â¢â¢â¢â¢Shri Maulik Jasani is appointed as VP Finance & Group CFO of the

Company with effect from December 25, 2021.

â¢â¢â¢â¢â¢â¢â¢Shri Kiran Mohanty has been appointed as Company Secretary &

Chief Compliance officer of the company with effect from August 12,2021.

Note: Designation of Shri Falgun Shah has been changed from Chief Financial Officer to Head of Finance & Accounts - Solar EPC Division with effect from December 25, 2021.

Except the above mentioned, there was no appointment, resignation or change in designation of the Key Managerial Personnel (KMP).

NUMBER OF BOARD MEETINGS HELD

The Board of Directors duly met 12 times during the Financial Year 202122. All the Board Meetings were held as per Section 173 of Companies Act, 2013 with all the relevant rules & regulations related to that and also Secretarial Standard -1 (Board Meeting) is duly complied with. The dates on which the meetings were held are as follows:

No. of Board Meeting Held	Date of the Board Meeting	Name of Directors who attended the meeting
1	May 7, 2021	Al	the Directors were present
2	June 7, 2021	Al	the Directors were present
3	August 12, 2021	Al	the Directors were present
4	September 10, 2021	Al	the Directors were present
5	November 2, 2021	Al	the Directors were present
6	December 24, 2021	Al	the Directors were present
7	December 25, 2021	Al	the Directors were present
8	December 29, 2021	Al	the Directors were present
9	January 1, 2022	Al	the Directors were present
10	January 6, 2022	Al	the Directors were present
11	January 10, 2022	Al	the Directors were present
12	January 29, 2022	Al	the Directors were present

INDEPENDENT DIRECTORS

The Company has complied with the definition of Independence according to the Provisions of section 149(6) of Companies Act, 2013. The Company has also obtained declarations from all the Independent Directors pursuant to section 149(7) of the Companies Act, 2013. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.

AUDIT COMMITTEE

The Company had been converted into Public Limited Company with effect from January 1, 2022 and also initiated the process of IPO, therefore it was required to constitute Audit Committee under the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (âListing Regulationâ) Therefore the Board by passing resolution in its meeting held on January 10, 2022, constituted Audit Committee in pursuance to Section 177 of the Companies Act 2013 and the Listing Regulations. The Committee consists of following members:

No.	Name of Directors	Designation
1.	Shri Kunal Shah	Chairman
2.	Dr. Bhushan Punani	Member
3.	Shri Ambar Patel	Member
4.	Shri Rajendra Shah	Member

The scope and function of the Audit Committee was in accordance with Section 177 of the Companies Act, 2013 and the Listing Regulations.

After constitution, there was no Committee Meeting held upto the end of financial year 2021-22.

NOMINATION AND REMUNERATION COMMITTEE

The Company had been converted into Public Limited Company with effect from January 1, 2022 and also initiated the process of IPO, therefore it was required to constitute Nomination and Remuneration Committee under the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Therefore the Board by passing resolution in its meeting held on January 10, 2022, constituted Nomination and Remuneration Committee in pursuance to Section 178 of the Companies Act, 2013 and the Listing Regulations. The Committee consists of following members:

No.	Name of Directors	Designation
1.	Shri Ambar Patel	Chairman
2.	Prof. (Dr.) Neharika Vohra	Member
3.	Shri Kunal Shah	Member

The scope and function of the Nomination and Remuneration Committee was in accordance with Section 178 of the Companies Act and the Listing Regulations.

After constitution, there was no Committee Meeting held upto the end of financial year 2021-22.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Board by passing resolution in its meeting held on January 10, 2022, constituted Stakeholders Relationship Committee in pursuance to Section 178 of the Companies Act, 2013 and the Listing Regulations. The Committee consists of following members:

No. Name of Directors Designation

1. Shri Ambar Patel Chairman

2. Shri Ramakrishnan Kasinathan Member

3. Shri Vishal Rangwala Member

The scope and function of the Stakeholders Relationship Committee was in accordance with Section 178 of the Companies Act and the Listing Regulations.

After constitution, there was no Committee Meeting held upto the end of financial year 2021-22.

IPO COMMITTEE

The IPO Committee was constituted by our Board at their meeting held on January 10, 2022. The Committee consists of following members:

No.	Name of Directors	Designation
1.	Shri Kunal Shah	Chairman
2.	Shri Rajendra Shah	Member
3.	Shri Vishal Rangwala	Member
4.	Shri Pilak Shah	Member
After constitution, there were two (2) meetings held by Committee upto the end of financial year 2021-22. MANAGEMENT COMMITTEE The Management Committee was constituted by our Board at their meeting held on January 10, 2022. The Committee consists of following members:
No.	Name of Directors	Designation
1.	Shri Rajendra Shah	Chairman
2.	Shri Harish Rangwala	Member
3.	Shri Vishal Rangwala	Member
4.	Shri Pilak Shah	Member
5.	Ms. Hetal Ukani	Member

After constitution, there were two (2) meetings held by Committee upto the end of financial year 2021-22.

RISK MANAGEMENT COMMITTEE

The Board by passing resolution in its meeting held on January 10, 2022, constituted Risk Management Committee under the provision of the Listing Regulations. The Committee consists of following members:

No.	Name of Directors	Designation
1.	Shri Rajendra Shah	Chairman
2.	Shri Pilak Shah	Member
3.	Shri Kunal Shah	Member
4.	Shri Ramakrishnan Kasinathan	Member
5.	Shri Vishal Rangwala	Member

The scope and function of the Risk Management Committee was in accordance with the Listing Regulations.

After constitution, there was no Committee Meeting held upto the end of financial year 2021-22.

RISK MANAGEMENT POLICY

Key Risk	Impact to the Company	Mitigation Plans
Commodity Price Risk	Risk of Price Fluctuation on basic raw material used in process of manufacturing process and purchases of trading items and their related Services.	The Company commands excellent business relationship with the buyers. In case of major fluctuation either upwards or downwards, the matter will be mutually discussed and compensated both ways. Also in engineering business by focusing on new value added product helps in lowering the impact of price fluctuation in inventory.
Interest Rate Risk	Any increase in interest rate can affect the finance cost.	The Company has been managing the interest rate risk with the help of reduction in dependency on fluctuating interest rate loans.
Foreign Exchange Risk	The Company imports various materials. Any volatility in the currency market can impact the overall profitability.	The company is tracking currency fluctuation on regular basis to take timely and necessary steps to hedge open position on foreign currency transactions.
Human Resource Risk	The Companyâs ability to deliver value is dependent on its ability to attract, retain and nurture talent. Non-availability of the required talent resource can affect the overall performance of the Company.	By continuously benchmarking of the best HR practices across the industry and carrying out necessary improvements to attract and retain the best talent. By putting in place performance incentives on time bound basis and evaluating the performance at each stage of work helps to mitigate this risk.
Competition Risk	The Company is always exposed to competition Risk. The increase in competition can create pressure on margins, market share etc.	By continuous efforts to enhance the brand image of the Company by focusing on design, quality, cost, timely delivery, market share enhancement and customer service to mitigate the risks so involved.
Compliance Risk -Increasing Regulatory Requirements	Any default can attract penal provisions.	By regularly monitoring and review of changes in regulatory framework. Also by monitoring & reporting of compliance periodically.
Industrial Safety	The industry is labour intensive and are exposed to accidents, health and injury risk due to machinery breakdown, human negligence etc.	By development and implementation of critical safety standards across the various project locations, establishing training need identification at each level of employees helps to mitigate the risk so involved.

DEPOSITS

During the year the Company has accepted deposits under the provisions of the Companies Act, 2013, details of which are given below:

? (in Lakhs)
Particulars	Deposits
Deposits at the beginning of the financial year
i) Principal Amount	661
ii) Interest due but not paid	-
iii) Interest accrued but not due	-
Total (i ii iii)	661
Change in Deposits during the financial year
â¢ Addition	2,300
â¢ Reduction	661
Net Change	1,639
Deposits at the end of the financial year
i) Principal Amount	2,300
ii) Interest due but not paid	-
iii) Interest accrued but not due	-
Total (i ii iii)	2,300

RELATED PARTY TRANSACTION

All Related Party Transactions that were entered into during the Financial Year 2021-22 were on an armâs length basis and were in the ordinary course of business.

All Related Party Transactions and a statement giving details of all Related Party Transactions is placed before the Board of Directors for their approval.

Pursuant to Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of such transactions are provided in Form No. AOC-2 which is annexed herewith as Annexure - C to this report.

ANNUAL RETURN

Pursuant to section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return as on March 31, 2022 in the prescribed form no. MGT-7 is available on the Companyâs website at www. harshaengineers.com

PARTICULARS OF LOANS, GUARANTEE AND INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, Directors of the Company hereby state and confirm that:

a) in the preparation of the annual accounts for the year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the Company for the same period;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with

the provision of the Companies Act, 2013 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; and

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

AUDITORS AND AUDITORSâ REPORT

I. Statutory Auditor

M/s. Pankaj R. Shah & Associates, Chartered Accountants (FRN:107361W) was appointed as Statutory Auditor of the Company for a period of five consecutive years from the conclusion of 11^th Annual General Meeting until the conclusion of the 16^th Annual General Meeting of the Company with such remuneration as may be decided by Board of Directors.

The notes on financial statement referred to in the Auditorsâ Report are self-explanatory and do not call for any further comments. The Auditorsâ Report does not contain any qualification, reservation or adverse remarks.

II. Cost Auditor

M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad (FRN : 000025) were appointed as Cost Auditors to carry out the audit of cost records of the Company for the financial year ending March 31, 2022.

III. Secretarial Auditor

M/s. Chirag Shah & Associates, Company Secretaries, Ahmedabad were appointed as Secretarial Auditor to carry out Secretarial Audit of the Company for the financial year ending March 31, 2022.

The observations and comments, appearing in the Secretarial Auditorâs Report are self-explanatory and do not call for any further comments. The Secretarial Auditorâs Report does not contain any qualification, reservation or adverse remarks.

IV. Internal Auditor

M/s. Talati & Talati (FRN : 110758W), Chartered Accountants and M/s. MAR & Co. (FRN : 138633W), Chartered Accountants are appointed as the Internal Auditor of the Company for Engineering business division and Solar EPC business division respectively. The Board of Directors of the Company in consultation with the Internal Auditors formulated the scope, functioning, periodicity and methodology for conducting the Internal Audit.

INSURANCE

The Company has taken adequate insurance cover of all movable & immovable assets (except Land) to cover various type of risks.

CREDIT RATING

The Companyâs rating has been assigned by CARE Ratings Limited for its long-term bank facilities and long- term / short-term bank facilities.

The Company has been awarded âCARE A ; Stable, revised from CARE BB and removed from Credit Watch with Positive Implications for its long term bank facilities of Rs. 12719 crores.

The Company has been assigned âCARE A ; Stable / CARE A1 for its long-term / short-term bank facilities of Rs. 270.00 crores.

The Company has been awarded âCARE A Stable / CARE A1 , revised from CARE BB / CARE A4 and removed from Credit Watch with Positive Implications for its long term / short term bank facilities of Rs. 99.87 crores.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNING AND OUTGO

Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is disclosed in the âAnnexure-Eâ to this Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

However, the Company has been converted into Public Limited Company with effect from January 1, 2022 and thereby it was required re-constitute the committee as per provision of Section 135 of the Companies Act, 2013. Composition of the re-constituted Committee and other details are disclosed in the âAnnexure- Fâ to this Report.

PARTICULARS OF EMPLOYEES

The list of top 10 employees in terms of remuneration drawn and the statement containing particulars of employees employed throughout the year and in receipt of remuneration of Rs. 1.02 crore or more per annum and employees employed for part of the year and in receipt of remuneration of Rs. 8.5 lakh or more per month, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company are disclosed in the âAnnexure-Gâ to this Report.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is committed to providing and promoting a safe and healthy work environment for all its employees.

A ''Prevention of Sexual Harassment'' (POSH) policy is in line with the statutory requirement, along with a structured reporting and redressal mechanism is in place. The POSH policy is communicated to all employees of the Company. During the year 2021-22, no complaints in respect of the same has been received by the Company.

VIGIL MECHANISM / WHISTLE BLOWER

Pursuant to the provisions of Companies Act, 2013 and rules made thereunder and SEBI (Listing Obligation and Disclosures Requirements) Regulations, 2015 the Company has framed and adopted vigil mechanism policy to deal with instance of fraud and mismanagement, if any. The Company has also provided adequate safeguards against victimization of employees and directors who express their concerns.

INTERNAL FINANCIAL CONTROLS

The Statutory Auditor of your Company has also given an opinion that the Internal Financial Controls over Financial Reporting are adequate and are operating effectively during the Financial Year.

NOTES TO ACCOUNTS

The notes forming part of the accounts are self-explanatory and therefore, do not call for any further comments. Annexure-A to Annexure-G forms part of this Report.

ACKNOWLEDGEMENT

The Directors are thankful for the co-operation and assistance received from the Financial Institutions, Bankers, Collaborators, Central and State Government Departments, Local Authorities and Employees of the Company.

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