Happy Forgings Ltd

Dear Shareholders,

Your Board of Directors take pleasure in presenting the 45th Annual Report of Happy Forgings Limited ("The Company") on the business and operations of the Company, together with the Audited Financial Statements, prepared in compliance with Ind AS Accounting Standards, for the year ended 31st March, 2024.

FINANCIAL SUMMARY & PERFORMANCE HIGHLIGHTS

The Audited Financial Statements for the Financial Year ended 31st March, 2024, forming part of this Annual Report, have been prepared in accordance with the Indian Accounting Standard (hereinafter referred to as "Ind AS") prescribed under Section 133 of the Companies Act, 2013 and other recognised accounting practices and policies to the extent applicable. Necessary disclosures with regard to Ind-AS reporting have been made under the Notes to Financial Statements. The Company's performance during the financial year under review as compared to the previous financial year is summarised below:

Note:

1. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.

Standalone:

During the year under review, the revenue from operations and other income stood at ' 1,37,159.12 Lakhs as compared to the last year's revenue of ' 1,20,228.00 Lakhs. The Company has achieved Profit Before Tax of ' 32,439.23 Lakhs and Profit After Tax of ' 24,298.67 Lakhs as on 31st March, 2024 as against previous year's Profit Before Tax of ' 28,002.92 Lakhs and Profit After Tax of ' 20,870.11 Lakhs. The Company achieved a total Comprehensive Income of ' 24,913.11 Lakhs as against previous year's Comprehensive Income of ' 20,068.22 Lakhs. The EPS on financials for the year ended on 31st March 2024 was ' 26.78 (Basic) and 26.75 (Diluted).

Consolidated :

During the year under review, the revenue from operations and other income stood at ' 1,37,159.07 Lakhs as compared to the last year's revenue of ' 1,20,227.05 Lakhs. The Company has achieved Profit Before Tax of ' 32,438.83 Lakhs and Profit After Tax of ' 24,298.37 Lakhs as on 31st March, 2024 as against previous year's Profit Before Tax of ' 28,002.66 Lakhs and Profit After Tax of ' 20,869.92 Lakhs. The Company achieved a total Comprehensive Income of ' 24,912.81 Lakhs as against previous year's Comprehensive Income of ' 20,068.04 Lakhs. The EPS on financials for the year ended on 31st March, 2024 was ' 26.78 (Basic) and 26.75 (Diluted).

More details on the financial statements of the Company along with various financial ratios are available in the Management Discussion & Analysis Report forming part of this report.

DIVIDEND & APPROPRIATIONS

The Board of Directors of your company has decided to recommend final Dividend of ' 4 per share of Face value of ' 2/- each fully paid for the financial year ended 31st March, 2024 subject to the approval of shareholders in the ensuing Annual General Meeting .

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), the Company has formulated Dividend Distribution Policy taking into account the parameters prescribed in the said Regulations. The Dividend Distribution Policy is available on Company's website at https:// happyforgingsltd.com/wp-content/uploads/2023/1 2/ Dividend-Distribution-Policy.pdf

There is no dividend which was required to be transferred to Investor Education and Protection Fund during the year ended 31st March 2024.

TRANSFER TO RESERVES

The Directors do not propose to transfer any amounts to the general reserves of the Company, instead have recommended to retain the entire of profits for the financial year ended 31st March, 2024 in the profit and loss account. There is no dividend which was required to be transferred to Investor Education and Protection Fund during the year ended 31st March, 2024.

a) Authorised Share Capital

During the year under review, there is no change in the Authorised Share Capital of the Company.

As on 31st March, 2024 the Authorised Share Capital of the Company is 15,00,00,000 Equity Shares of ' 2/- each amounting to ' 30,00,00,000 (Rupees Thirty crores only).

b) Issued, Subscribed and Paid-up Share Capital

During the year under review, the paid up capital has increased from 8,94,99,000 shares of FV of ' 2/- each to 9,42,04,882 shares of FV of ' 2/- each consequent to IPO which happened during the year.

The total offer size of IPO was 1,18,65,802 Equity shares of FV of RS 2/- each, out of which 47,05,882 was fresh issue and 71,59,920 was offer for sale.

As on 31st March, 2024, the Issued, Subscribed and Paid up Share Capital of the Company is 9,42,04,882 Equity Shares of FV ' 2/- each amounting to ' 18,84,09,764 (Rupees Eighteen crores eighty four Lakhs nine thousand seven hundred sixty four only).

c) Utilisation of Proceeds of IPO

Pursuant to the Regulation 32 of the Listing Regulations, there was no deviation(s) or variation(s) in the use of proceeds of IPO till 31st March, 2024.

The proceeds of IPO were utilised for the objects as disclosed in the Prospectus. Details as on 31 st March, 2024 are as follows:

There was no deviation / variation in the utilisation of the funds as certified by Mr Pankaj Kumar Goyal, Chief Financial Officer of the Company. Necessary disclosures have been made to the Stock Exchanges in the Statement of Deviation/Variation Report issued quarterly along with the Financial Statements.

DETAILS OF SUBSIDIARY, JOINT VENTURES AND ASSOCIATES/CONSOLIDATED FINANCIAL STATEMENTS

During the financial year under review, M/s HFL Technologies Private Limited was incorporated as a wholly owned subsidiary of the Company.

The consolidated financials and its subsidiary have been prepared in the same form and manner as mandated by Companies Act 2013 and shall be laid before the forthcoming Annual General Meeting of the Company. Statement containing salient features of the Financial statements of subsidiaries, associates and joint ventures in form AOC-1 is annexed as annexure 1.

Further, there is no other company which has ceased to become a Subsidiary/Joint Venture/Associate Company during the year under review.

DIRECTORS & KEY MANAGERIAL PERSONNEL DIRECTORS

The Board of Directors holds fiduciary position and is entrusted with the responsibility to act in the best interests of the Company. The Board at its meetings deliberates and decides on strategic issues including review of policies, financial matters, discuss on business performance and other critical matters for the Company. Committees constituted by the Board focus on specific areas and take informed decisions within the framework of the delegated authority and responsibility and make specific recommendations to the Board on matters under its purview. Decisions and recommendations of the Committees are placed before the Board for consideration and approval as required. Composition of Board of Directors of the Company is duly constituted with proper balance of Executive Directors, NonExecutive Non-Independent Director and Non-Executive Independent Directors including Women Director in accordance with the provisions of Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). All the Directors have rich experience and specialised knowledge in sectors covering law, finance, accountancy and other relevant areas.

As on 31 st March, 2024, the Board consists of 10 (Ten) directors comprising of five Non-Executive Independent Directors including a woman director, namely, Ms. Rajeswari Karthigeyan. The Chairman of the Company is an Executive Director. The profile of all the Directors is available in the Annual Report of the Company.

None of the Directors of the Company are disqualified from being appointed as Directors in terms of Section 164(1) and (2) of the Companies Act, 2013 and are not debarred from holding the office of Director by virtue of any SEBI order or any other such authority. Your Company has also obtained a certificate from a Company Secretary in practice confirming that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of companies by Securities Exchange Board of India ("SEBI")/Ministry of Corporate Affairs ("MCA") or any such statutory authority. The aforementioned certificate forms part of this Annual Report annexed with Corporate Governance Report. In the view of the Board, all the Directors possess the requisite skills, expertise, integrity, competence, as well as experience considered to be vital for business growth.

The composition of Board of Directors and detailed analysis of various skills, qualifications and attributes as required and available with the Board has been presented in the Corporate Governance Report.

Directors retiring by rotation

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Narinder Singh Juneja, Whole Time Director and Ms. Megha Garg, Director of the Company, retired by rotation and being eligible, were re-appointed as Directors of the Company with the approval of Members at the 44th AGM held on 8th August, 2023.

Further, in accordance with the provisions of the Companies Act, 2013, Mr. Ashish Garg (DIN: 01829082) is liable to retire by rotation at the ensuing 45th AGM of the Company. He is eligible and has offered himself for reappointment as Director of the Company. Resolution for his reappointment is being proposed at the 45th AGM and his profile is included in the Annexure to Notice of the 45th AGM.

Change in Board of Directors

During the financial year under review, there was no change in the Board of Directors other than mentioned above. However, after the closure of financial year, Mr. Prakash Bagla (DIN: 03043874), Nominee director has resigned from the directorship of Company with effect from 24th May 2024.

KEY MANAGERIAL PERSONNEL

As on 31st March, 2024, the following persons have been designated as Key Managerial Personnel ("KMP") of the Company pursuant to the provisions of Sections 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

DECLARATION BY INDEPENDENT DIRECTORS

There are five Independent Directors on the Board of the Company. The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149 (6) of the Act and Regulation 16(1)(b) & 25 of SEBI LODR Regulations.

The Independent Directors have also submitted a declaration confirming that they have registered their names in the databank of Independent Directors as being maintained by the Indian Institute of Corporate Affairs (IICA) in terms of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act along with the Code of Conduct for Directors and Senior Management Personnel formulated by the Company as per Listing Regulations.

The Company has obtained declaration of independence from all the Independent Directors of the Company. None of the Directors have any pecuniary relationship or transactions with the Company.

COMPANY'S POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL SENIOR MANAGEMENT PERSONNEL AND OTHER EMPLOYEES

The Company has in place a 'Policy on Nomination & Remuneration for Directors, Key Managerial Personnel (KMP) and Senior Management', which, inter-alia, lays down the criteria for identifying the persons who are qualified to be appointed as Directors and/or Senior Management Personnel of the Company, along with the criteria for determination of remuneration of Directors, KMPs, Senior Management and their evaluation and includes other matters, as prescribed under the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI LODR Regulations. The Remuneration paid to the Directors is in line with the Remuneration Policy of the Company.

The Nomination and Remuneration policy is available on the website of the Company at https://happyforgingsltd. com/wp-content/uploads/2023/09/Nomination-and- Remuneration-Policy.pdf

NUMBER OF MEETINGS OF THE BOARD

Your Board meets at regular intervals to discuss and decide on business strategies/policies and review the Company's financial performance. During the Financial Year 202324, 10 Board Meetings were held. The meetings were held in accordance with the applicable provisions of the Act. The details relating to Board Meetings and attendance of Directors in each Board Meeting held during 2023-24 has been separately provided in the Corporate Governance Report.

COMMITTEES OF THE BOARD

The constitution of the Board Committees is in acquiescence of provisions of the Act and the relevant rules made thereunder and Listing Regulations of the Company. The Board has constituted Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee and IPO Committee to deal with specific areas/activities that need a closer review and to have an appropriate structure for discharging its responsibilities.

The composition, terms of reference, attendance of directors at the meetings of all the above Committees has been disclosed in the Corporate Governance Report.

There has been no instance where the Board has not accepted any of the recommendations of the Audit Committee.

BOARD EVALUATION

The Nomination and Remuneration Committee of the Company had approved a Nomination and Remuneration policy containing the criteria for performance evaluation, which was approved and adopted by the Board of Directors. The Board has carried out an annual evaluation of its own performance, Board Committees, and individual Directors pursuant to the provisions of the Act and SEBI LODR Regulations and as per the criteria defined in the said act and regulations. The Board's assessment was discussed with the full Board evaluating, amongst other things, the full and common understanding of the roles and responsibilities of the Board, contribution towards development of the strategy and ensuring robust and effective risk management, understanding of the operational programs being managed by the Company, receipt of regular inputs, receipt of reports by the Board on financial matters, budgets and operations services, timely receipt of information with supporting papers, regular monitoring and evaluation of progress towards strategic goals and operational performance, number of Board meetings, committee structures and functioning, etc.

The outcome of the evaluations conducted by the Nomination and Remuneration Committee and the Independent Directors at their respective meetings was presented to the Board, for assessment and development of plans/suggestive measures for addressing action points that arise from the outcome of the evaluation. The Directors expressed their satisfaction on the parameters of evaluation, the implementation and compliance of the evaluation exercise done and the results/outcome of the evaluation process.

The members concluded that the Board was operating in an effective and constructive manner.

MEETING OF INDEPENDENT DIRECTORS

During the Financial Year under review, a separate Meeting of the Independent Directors was held on 29th March 2024 without the attendance of Non-Independent Directors and the Management of the Company. The Independent Directors discussed and reviewed the performance of the Non-Independent Directors and the Board as a whole, and also assessed the quality, quantity and timeliness of flow of information between the Management and the Board which is necessary for the Board to effectively and reasonably perform its duties.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act, the Directors of the Company, based on representation from the management and after due enquiry , confirm that:

(i) i n the preparation of the Annual Accounts for the year ended 31st March, 2024, the applicable accounting standards have been followed and there are no material departures from the same;

(ii) they 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 state of affairs of the Company as at 31st March, 2024 and of the profit of the Company for the year ended on that day;

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

(iv) the Annual Accounts for the year ended 31st March, 2024 have been prepared on a "going concern" basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively throughout the financial year ended 31st March, 2024.

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively throughout the financial year ended 31st March, 2024.

RISK MANAGEMENT

The Company has built a comprehensive risk management framework that seeks to identify all kinds of anticipated risks associated with the business and to take remedial actions to minimise any kind of adverse impact on the Company. The Company understands that risk evaluation and risk mitigation is an ongoing process within the organisation and is fully committed to identify and mitigate the risks in the business.

The Company has also set up a Risk Management Committee to monitor the existing risks as well as to formulate strategies towards identifying new and emergent risks. The Risk Management Committee identifies the key risks for the Company, develops and implements the risk mitigation plan, reviews and monitors the risks and corresponding mitigation plans on a regular basis and prioritises the risks, if required, depending upon the effect on the business/reputation. The Company has also formulated and implemented a Risk Management Policy which is approved by the Board of

Directors to identify and monitor business risk and assist in measures to control and mitigate such risks. The Policy is available on the Website of the Company at https:// happyforgingsltd.com/wp-content/uploads/2023/09/Risk- Management-Policy.pdf. The other details in this regard are provided in the Corporate Governance Report, which forms part of this Annual Report.

INTERNAL FINANCIAL CONTROLS

According to Section 134(5)(e) of the Act and Regulation 17(8) of Listing Regulations in terms of internal control over financial reporting, the term Internal Financial Control ('IFC') means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, the prevention and early detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The Company has a well-established internal control framework, which is designed to continuously assess the adequacy, effectiveness and efficiency of financial and operational controls and the Board is responsible for ensuring that IFC are laid down in the Company and that such controls are adequate and operating effectively.

The Company believes that strengthening of internal controls is an ongoing process and there will be continuous efforts to keep pace with changing business needs and environment. The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors. Further there were no letters of internal control weaknesses issued by the Internal Auditor or the Statutory Auditors during the financial year under review.

Necessary certification by the Statutory Auditors in relation to Internal Financial Control u/s 143(3)(i) of the Act forms part of the Audit Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company believes that as a responsible corporate citizen, it has a duty towards the society, environment, and the Country where it operates. The Company's sense of responsibility (which goes beyond just complying with operational and business statutes) towards the community and environment, both ecological and social, in which it operates is known as corporate social responsibility.

In compliance with the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a Corporate Social Responsibility (CSR)

Committee. It is committed to ensure the social wellbeing of the communities through its CSR initiatives, in alignment with the Company's key priorities. The details of the Committee along with its terms of reference has been disclosed in detail in the Corporate Governance section of the Annual Report. The Company has adopted a Corporate Social Responsibility Policy in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014 which can be accessed at https://happyforgingsltd.com/wp-content/ uploads/2023/09/CSR-Policy-revised-Happy-Forgings- Limited.pdf. The Policy inter alia briefs the areas in which CSR outlays can be made, objectives, the various CSR Programs/ Projects which can be undertaken, implementation of the said programs and projects, criteria for identification of the implementing agencies, monitoring and evaluation mechanisms and annual action plan.

In 2023-24, the Company has spent ' 275.97 Lakhs towards CSR initiatives in the local communities where it operates. During the year under review, the Company has utilised ' 56.99 Lakhs from unspent CSR account for 2022-23 on the long term project of adopted school in local area .

The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company during the financial year ended 31st March, 2024, in accordance with Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out in "Annexure- 2 " to this report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, all the transactions entered into by the Company with related parties were in compliance with the applicable provisions of the Act and the Listing Regulations, details of which are annexed to this report as "Annexure-3". All related party transactions are entered into only after receiving prior approval of the Audit Committee. Further, in terms of the provisions of Section 188(1) of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, all contracts/arrangements/ transactions entered into by the Company with its related parties, during the financial year under review, were in ordinary course of business and on arm's length and not material as per the Related Party Transaction policy.

In line with the requirements of the Act and the Listing Regulations, the Company has also formulated a Policy on dealing with Related Party Transactions ('RPTs') and the same is available on the website of the Company at https:// happyforgingsltd.com/wp-content/uploads/2023/1 2/ Policy-on-related-party-approvals.pdf Further, the Company has not entered into any contracts/ arrangements/transactions with related parties which are

material in nature in accordance with the Related Party Transactions Policy of the Company nor any transaction has any potential conflict with the interest of the Company at large.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of loans, guarantees and investments covered under the provisions of Section 186 of the Act and Regulation 34 read with Schedule V of the SEBI Listing Regulations form part of the Notes to the financial statements of the Company provided in this Annual report.

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 as amended from time to time in respect of Directors/ employees of the Company and a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time- to-time forms part of this Board Report as "Annexure- 4" to this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHNAGE EARNINGS AND OUTGO

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated in Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 for year ended 31st March, 2024 is attached as "Annexure -5".

Statutory Auditors and Auditor's Report

As per Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, the Members of the Company approved the appointment of M/s S R Batliboi & Co LLP Chartered Accountants (Firm's Registration No. 301003E/E300005) as the Statutory Auditors of the Company for a period of 5 (five) consecutive years to hold office with effect from FY 2020-21 until the conclusion of the 46th AGM of the Company to be held in the calendar year 2025. The Company has received certificate from the said auditors that they are not disqualified and are eligible to hold the office as Auditors of the Company.

The Statutory Auditors have not made any adverse comments or given any qualification, reservation or adverse remarks or disclaimer in their Audit Reports on the Financial Statements both standalone and consolidated for the Financial Year

2023-24 and the Reports are self-explanatory. The said Auditors' Reports for the Financial Year ended March 31, 2024 on the Financial Statements of the Company forms part of this Annual Report.

Internal Auditors

The Company has in place an adequate internal audit framework to monitor the efficacy of the internal controls with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance on the adequacy and effectiveness of the Company's processes. The Internal Auditor reports directly to the Chairman of the Audit Committee.

M/s. S C V & Co LLP , were appointed as the Internal Auditors of the Company in accordance with the provisions of Section 138 of the Act read with the Companies (Accounts) Rules, 2014.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board at its meeting held on 14th September, 2023, had appointed M/s P S Batla as Secretarial Auditor of the Company for the 2023-24. The Secretarial Audit Report for 2023-24 in form MR 3 is annexed to this report as "Annexure- 6".

Pursuant to provisions of Regulation 24A of Listing Regulations, the Company has undertaken an audit for the 2023-24 for all applicable compliances as per SEBI Rules, Regulations, Circulars, Notifications, Guidelines etc. issued thereunder.

The Secretarial Audit Report and the Annual Secretarial Compliance Report for the financial year ended 31st March, 2024 are unmodified i.e. they do not contain any qualification, reservation, or adverse remark.

Cost Auditors and Cost Audit Report

Pursuant to Section 148(1) of the Companies Act, 2013 the Company is required to maintain cost records as specified by the Central Government and accordingly such accounts and records are made and maintained. Pursuant to Section 148(2) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Company is also required to get its cost accounting records audited by a Cost Auditor. Accordingly, the Board, at its meeting held on 8th June 2024 has on the recommendation of the Audit Committee, re-appointed M/s. Rajan Sabharwal & Associates, Cost Accountants to conduct the audit of the cost accounting records of the Company for FY 2024-25 on a remuneration of ' 1,00,000 plus out of pocket expenses and applicable taxes. The remuneration is subject to the ratification of the Members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and is being accordingly placed before the Members for ratification. The cost audit report does not contain any observation or qualification requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.

M/s Rajan Sabharwal & Associates were appointed as the Cost Auditors of the Company for FY 2023-2024.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, none of the auditors have reported any instances of fraud committed against the Company by its officers or employees to the Audit Committee as required to be reported under Section 143 (12) of the Act.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy and established the necessary Vigil Mechanism, which is in line with the Section 177 of the Companies Act, 2013 for its Directors and employees. This policy was amended in line with listing regulations by the Board in the meeting held on 24th May 2024.

The details of this Policy are explained in the Corporate

Governance Report which forms a part of this Annual Report

and also hosted on the website of the Company at https://

happyforgingsltd.com/wp-content/uploads/2024/06/

Whistle-Blower-Policy-24th-May-2024.pdf

There were no instances of reporting under vigil mechanism

during the financial year ended 31st March, 2024.

ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Returns of the Company are available on the website of the Company at https://happyforgingsltd.com/investors/ regulation-46-disclosures/

DEPOSITS

During the year under review, the Company has not accepted any deposits from the public within the meaning of Sections 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. As the Company has not accepted any deposit during the financial year under review there is no noncompliance with the requirements of Chapter V of the Act.

CREDIT RATING

The credit rating of the Company has been upgraded as below:

• I CRA has upgraded long-term rating to [ICRA]AA from [ICRA]AA- and has reaffirmed the short-term rating to [ICRA]A1+. The outlook on the long-term rating is Stable.

• CRISIL has upgraded long-term rating to CRISIL AA / stable from CRISIL AA- / stable

Details of the same are provided in the Corporate Governance Report.

CORPORATE GOVERNANCE

As per Regulation 34(3) read with Schedule V of the Listing Regulations, a separate section on corporate governance practices followed by the Company, together with a certificate from M/s P S Bathla & Associates confirming compliance with the same has been disclosed under the Corporate Governance Report section of this Annual Report. A certificate of the CEO & Whole Time Director and Chief Financial Officer of the Company in terms of Listing Regulations, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, is also annexed. Also, a declaration signed by the CEO & Whole Time Director stating that members of the board and senior management personnel have affirmed the compliance vide Code of Conduct of the Board and senior management is attached to the report on corporate governance.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion and Analysis Report in compliance with Regulation 34(2)(e) of Listing Regulations is provided in a separate section and forms an integral part of this report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Pursuant to Regulation 34(2)(f) of SEBI LODR Regulations and with effect from the financial year 2022-23, the top 1,000 listed companies based on market capitalisation shall submit a Business Responsibility and Sustainability Report describing the initiatives taken by the Company from an environmental, social and the governance perspective. Your Company, being a top thousand listed entity as per Market Capitalization and adhering to good Corporate Governance and for the amelioration of the society in which it operates,

has prepared the Business Responsibility and Sustainability Report (BRSR) describing the initiatives taken by the Company from an environmental, social and governance perspective. The BRSR report is annexed as "Annexure-7" to this Report.

HUMAN RESOURCES & INDUSTRIAL RELATIONS

Employees are the most valuable and indispensable asset for a Company. Your Company has cordial relations with the workers and employees at all levels of the organisation. A section on Human Resources/ Industrial relations is provided in the Management Discussion and Analysis Report which forms part of the Annual Report.

DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS

Employee Stock Options have been recognised as an effective instrument to attract talent and align the interest of employees with that of the Company, providing an opportunity to the employees to share in the growth of the Company and to create long term wealth in the hands of employees, thereby acting as a retention tool.

During the financial year under review, the Company has formulated Happy Forgings ESOP Scheme 2023 pursuant to the resolution passed by the shareholders on July 31, 2023 and approved maximum of 1,342,485 options under the ESOP Scheme. As on the date of this report, 392,687 options have been granted by our Company under the ESOP Scheme. As on financial year ended on March 31,2024, the Company has one Employee's Stock Option Plan namely Happy Forgings ESOP Scheme 2023.

The ESOP plan of the Company is in compliance with the provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI SBEB and Sweat Equity Regulations) as amended from time to time. The Nomination & Remuneration Committee monitors the ESOP Scheme in compliance with the Act, SEBI SBEB and Sweat Equity Regulations and SEBI LODR Regulations. A Certificate from Secretarial Auditors of the Company, confirming that the above ESOP Scheme has been implemented in accordance with the SEBI (SBEB and Sweat Equity Regulations) as amended from time to time and are as per the resolutions passed by the Members of the Company will be available for the inspection of the Members of the Company. Disclosure on various plans, details of options granted, shares allotted upon exercise, etc. as required under SEBI SBEB and Sweat Equity Regulations and Companies (Share Capital and Debentures) Rules, 2014 is given as " Annexure-8".

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

The Company has zero tolerance towards sexual harassment at workplace and is committed to provide a safe and secure working environment for all employees.

The Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder and the same is hosted on the Company's website at https://happyforgingsltd. com/wp-content/uploads/2023/09/Prevention-of-Sexual- Harassment-at-Workplace-Policy-Happy-Forgings- Limited.pdf. An Internal Complaints Committee (ICC) has also been set up to redress complaints received regarding sexual harassment.

During the year under review, no cases were filed under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD MEETINGS AND GENERAL MEETINGS

During the Financial Year 2023-24, the Company has complied with all the relevant provisions of the applicable mandatory Secretarial Standards i.e. SS-1 and SS-2, relating to "Meetings of the Board of Directors" and "General Meetings", respectively issued by the Institute of Company Secretaries of India, and notified by Ministry of Corporate Affairs.

CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING IN COMPANY'S SECURITIES

In accordance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 as amended from time to time, the Company has complied and formulated a Code of Conduct for Prevention of Insider Trading Policy, which prohibits trading in shares of the Company by insiders while in possession of unpublished price sensitive information in relation to the Company and

can be accessed on the Company's website through the following link https://happyforgingsltd.com/wp-content/ uploads/2024/03/Code-of-Conduct-Policy-for-PIT-HFL. pdf. The objective of this Code is to protect the interest of Shareholders at large, to prevent misuse of any price sensitive information and to prevent any insider trading activity by way of dealing in securities of the Company by its Designated Persons. Ms. Bindu Garg, Company Secretary and Compliance Officer of the Company is authorized to act as Compliance Officer under the Code.

The code is applicable to all directors, designated persons and their immediate relatives and connected persons who have access to unpublished price sensitive information . Further, the Company has maintained a Structural Digital Database (SDD) pursuant to provisions of regulations 3 (5) and (6) of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

GENERAL DISCLOSURES Your Directors state that:

1. No material changes and commitments affecting the financial position of the Company have occurred from the close of the financial year ended 31st March, 2024 till the date of this report.

2. There was no change in the nature of business of the Company during the financial year ended 31st March, 2024.

3. During the year, no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operation in future.

4. During the financial year under review no disclosure or reporting is required with respect to issue of equity shares with differential rights as to dividend, voting or otherwise, issue of Sweat equity shares and Buyback of shares.

5. During the Financial Year under review, the Company neither made any application nor any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016).

6. The Company serviced all the debts & financial commitments as and when they became due with the bankers or Financial Statements.

7. The Company does not have any holding company. Further, the subsidiary company has not paid any commission/ remuneration to the Managing Directors and Whole Time Directors of the Company.

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

ACKNOWLEDGEMENT

Your Directors' place on record their sincere appreciation for the continued co-operation and support extended to the

Company by all the stakeholders. Your Directors' also place on record sincere appreciation of the continued hard work put in by the employees at all levels, amidst the challenging time. The Directors are thankful to the esteemed shareholders for their support and the confidence reposed in the Company and its management and also thank the Company's vendors, investors, business associates, Central/State Government and various departments and agencies for their support and co-operation.