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:

#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:

• 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.

• 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.

• 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.

• 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.

• 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.

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

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

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

• 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.

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

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

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

• 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 Management’ 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:

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 2023¬

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.

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 & Whole¬
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 Company’s
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 Company’s 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
arm’s 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 Company’s 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
Company’s 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^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 statement referred to in the
Auditors’ Report are self-explanatory and do not call
for any further comments. The Auditors’ 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 Board’s Report as an ANNEXURE-B.

The observations and comments, appearing in the
Secretarial Auditor’s Report are self-explanatory and
do not call for any further comments. The Secretarial
Auditor’s 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.

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 Board’s 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 Board’s
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 sec@harshaengineers.com.

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
Harassment’ (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 self¬
explanatory and therefore do not call for any further
comments. ANNEXURE-A to ANNEXURE-E forms part
of this Board’s Report.