Hercules Hoists Ltd Directors Report

Dear Members,

We present our 61^st Annual Report together with the Audited Financial Statements for the year ended March 31, 2023:

1. Financial Results

(Rs. in Lakhs)

Financial Results	As on March 31, 2023	As on March 31, 2022
Revenue from Operations	15,077.08	10,844.62
Other Income	1,768.58	1,598.22
Total Income	16,845.66	12,442.84
Profit before Finance Cost & Depreciation	3,439.92	2,286.31
Less- Finance Cost	54.91	0.96
Less-Depreciation	395.65	247.35
Profit before taxes and exceptional items	2,989.36	2,038.00
Profit before taxes after exceptional items*	11,612.06	1,844.77
Provision for Taxation for the year (including Deferred tax and earlier years Income-Tax adjustment)	1,281.35	350.75
Profit after Taxes	10,330.71	1,494.01

* Includes profit of Rs. 8,696.16 Lakhs on sale of mulund land and loss of Rs. 73.46 Lakhs on sale of windmill considered as exceptional item

2. Dividend

During the year, the Company announced a final dividend of INR 1.50 per share of value INR 1.00 each, and special dividend of INR 1.00 per share of value INR 1.00 each subject to shareholders approval in the ensuing AGM for the year ended March 31, 2023, which brings the total dividend for the financial year 2022-23 to INR 3.00 [300%] per share, inclusive of interim dividend of INR 0.50 paid in the month of February 2023, against the total dividend of INR 2.60 paid per equity share of value INR 1 each in the previous year.

3. Operations

The revenue from operations of Rs. 15,077.08 lakhs is up by 39.03% as compared to the previous years revenue from operations of Rs. 10,844.62 Lakhs. The profit after tax of Rs. 10,330.71 lakhs, is up by 591.48%, as compared to previous years net profit of Rs. 1,494.01 lakhs.

The Company places a significant emphasis on the quality and usage of latest technology. The Company has invested in various high-end manufacturing equipments that ensure consistent high-quality products, services and delivery commitments while ensuring customer centricity.

The aforesaid action at companys end corroborated with Chinas plus one policy globally, “Make in India”, supported by PLI schemes is providing a significant boost to new investments. Moreover, the Union governments focus on increasing capital expenditure in infrastructure and other various sectors along with the surge in private investments for expanding capacities, which have created a favorable environment for growth and development. In spite of global issues on macroeconomic and geo-political front, India has confirmed to grow and invest into infrastructure. Even with the higher inflation, the demand for Material Handling Equipment continues to be strong, robust and fairly consistent

The Company has sold one balanced windmill in the second quarter of FY 2022-23.

The Company has completed sale and transfer of Mulund land approximately 8327 square meters [2.05 Acre] situated at 110, Minerva Industrial Estate, Mulund West Mumbai 400080, through Memorandum of Understanding (MOU) dated February 2, 2022, and received a lumpsum consideration of Rs. 90 Crore.

4. Scheme of Demerger

The scheme of arrangement between Hercules Hoists Limited (‘HHL) and Indef Manufacturing Limited (‘IML) under section 230-234 and other applicable provisions of the Companies Act, 2013 was approved by the Board of Directors of the Company on September 23, 2022. The scheme envisages transfer of manufacturing business of HHL to its wholly owned subsidiary (WOS), namely IML by way of a demerger in order to segregate the manufacturing business from investment business of HHL. HHL will continue to carry on the investment business post the scheme. Pursuant to the demerger, shares in the ratio of 1:1 will be issued to shareholders of HHL and shares held by HHL in IML will get cancelled thereby replicating mirror shareholding pattern of HHL in IML.

The Company has received “No Objection” to file the draft scheme before National Company Law Tribunal, from BSE on 23th May 2023 and from NSE on 24th May 2023. The Company will file application for sanction of the scheme before National Company Law Tribunal (‘NCLT) bench in Mumbai.

5. Directors and Key Managerial Personnel-Changes

As per section 152 (6) of the Companies Act, 2013, Shri Shekhar Bajaj is liable to retire by rotation at the ensuing AGM and being eligible, offer himself for re-appointment.

The Board of Directors had appointed, in their meeting July 11, 2023, on recommendation of Nomination and Remuneration Committee, Smt Neelima Bajaj Swamy as an Additional Director (Non-Executive) and Shri K J Mallya as an Additional Director (Independent) of the Company for term of 5 years. Smt Neelima Bajaj Swamy and Shri K J Mallya holds office till the ensuing Annual General Meeting. The Ordinary Resolution for confirmation of appointment of both as a Director are given in the Notice. The detailed profile of Shri Shekhar Bajaj, Smt Neelima Bajaj Swamy and Shri K J Mallya are given under the head “Corporate Governance”.

The members at the Annual General Meeting held on August 10, 2022 vide special resolution, had approved the re-appointment of Shri H A Nevatia as a whole-time director for the term November 22, 2022 to November 21, 2024.

6. Independent Directors

The independent directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013. In the opinion of the Board, the independent directors, fulfil the conditions of independence specified in Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) of the Listing Regulations. The independent directors have also confirmed that they have complied with the companys code of business conduct & ethics. All independent directors of the company have valid registration in the independent directors databank of Indian Institute of Corporate Affairs as required under Rule 6(1) of the Companies (Appointment and Qualification of Director) Fifth Amendment Rules, 2019. The terms and conditions of appointment including the code of conduct and the duties of independent directors as laid down in the Companies Act, 2013, are placed on the website of the Company. The details of familiarization programme for the independent directors are explained in the Corporate Governance Report.

7. Auditors

A) Statutory Auditors

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules made thereunder, the auditors of the Company, M/s. Kanu Doshi Associates LLP, Chartered Accountants, Mumbai were appointed as Statutory Auditors of the Company for a period of five consecutive years at the Annual General Meeting (AGM) of the Members held August 10, 2022. The statutory auditors of the Company shall hold office from the conclusion of the 60th AGM of the Company till the conclusion of the 65th AGM, The audit report for FY 2022-23 is unmodified, i.e., it does not contain any qualification, reservation, or adverse remark.

B) Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 and rules made thereunder, the Board A Directors had on the recommendation of the audit committee, appointed M/s. Aatish Dhatrak & Associates, as a Cost Auditor, to audit the cost accounts of the Company for the financial year 2023-24 at a remuneration of Rs. 52,000/-plus applicable tax, reimbursement of out-of-pocket expenses, subject to ratification by the shareholders at ensuing AGM. Accordingly, a resolution seeking Members ratification for the remuneration payable to Cost Auditors is given in the notice. The Company is in compliance with maintenance of cost records as specified by the Central Government under section 148 (1) of the Companies Act, 2013, and Rule 8(5)(ix) of Companies (Accounts) Rules], There is no audit qualification for the cost audit report for the year ended March 31, 2022, under review.

C) Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rule made thereunder, the Company has appointed M/s. S N Ananthasubramaniam & Co, as Company Secretaries, to undertake the secretarial audit of the Company. The secretarial audit report is annexed herewith as “Annexure C". There is no secretarial audit qualification for the year ended March 31, 2023, under review. The Company is following the applicable secretarial standards.

8. Significant and Orders passed by the Regulators or Court

During the year in review, there were no significant and material orders passed by the regulators or courts or tribunals, which may impact the going concern status of the Company and its operations in future.

9. Internal Control System and Financial Reporting

The Companys internal control system is commensurate with its size, scale, and complexities of its operations. The internal and operational audit is entrusted to M/s. Deloitte Touche Tohmatsu India LLP. The audit committee of the Board of Directors periodically reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Company has policies and procedure in place for reliable financial reporting.

10. Material Changes & Commitments

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

11. Presentation of Financial Results

The financial results of the Company for the year ended March 31, 2023 have been disclosed as per Schedule III of the Companies Act, 2013.

The financial statements for the year ended March 31, 2023 were prepared in accordance with the Accounting Standards notified under Companies (Accounting Standard) Rules 2006 as amended and other relevant provisions of the Companies Act, 2013.

The annexed financial statements comply in all material aspects with Indian Accounting Standards (IND AS) notified as per Companies (Indian Account Standard) Rules 2015 under section 133 of the Companies Act, 2013 and other relevant provisions.

12. Risk Management Policy

Risk management is embedded in your Companys operating framework. The risk management framework is reviewed by the Board and the audit committee, information on the development and implementation of a risk management framework for the Company is given under management discussion and analysis.

13. Corporate Social Responsibility (CSR)

Detailed information on CSR Policy developed and implemented by the Company and the CSR initiatives taken during the year pursuant to section 134 & 135 of the Companies Act, 2013 is given in the “Annexure A”.

14. Directors Responsibility Statement

As required under section 134(3)(c) of the Companies Act, 2013, directors, to the best of their knowledge and belief, state that -

a) in the preparation of the annual accounts, 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 and loss of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 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 an on- 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; and

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

15. Vigil Mechanism

The details of the Vigil Mechanism Policy covered under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are explained in the Corporate Governance Report and posted on the website of the Company.

16. Directors Remuneration Policy and Criteria for matters under section 178

Information regarding Directors Remuneration Policy & criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of Section 178 are provided in the annexed Corporate Governance Report.

17. Corporate Governance

Detailed reports on matters relating to Corporate Governance and Management Discussion and Analysis Report under SEBi (Listing Obligations and Disclosure Requirements) Regulations 2015, are annexed as part of this Annual report together with the report of practicing company secretary on its compliance thereon.

18. Business Responsibility and Sustainability Report

As per SEBIs circular no. SEBI/HO/CFD/CMD-2/P/CIR/2021/562M dated 10 May 2021, the top 1,000 listed companies in India are mandated to submit a Business Responsibility and Sustainability Report (BRSR) as part of their annual reports to the stock exchanges. However, as of March 31, 2022 and March 31, 2023, Hercules Hoists Limited is not covered under the top 1,000 companies based on market capitalization, and therefore, a BRSR is not included in our Annual Report. Nonetheless, as a responsible corporate citizen, we remain committed to ensure that our business operations adhere to the highest standards of ethical and sustainable practices.

19. Particulars of Employees

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. The details of remuneration of directors, key managerial personnel and details of employee who was in receipt of remuneration more than Rs. 102 lakh per annum in the current financial year are given in note No. 45 to the Financial Statements and Corporate Governance Report.

In terms of Section 136 of the Act, the Report and Accounts are being sent to the members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the members at the registered office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting.

20. Particulars of Loans, Guarantees or Investments

Details of loans, guarantees and investments, if any covered under the provisions of Section 186 of the Companies Act, 2013 are given in note No. 8, 13, 18 and 32a to the financial statements.

21. Number of Meetings of the Board and Audit Committee

During the year, five Board Meetings and five Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report.

22. Formal Annual Evaluation of the performance of Board, its Committees and Directors

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015, the board has carried out an annual performance evaluation of its own performance, board as a whole and committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

23. Related Party Transactions

All transactions entered with related parties for the year under review were on arms length basis and thus a disclosure in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required. There were no materially significant related party transactions made by the Company with promoters, directors and key managerial personnel which may have a potential conflict with the interest of the Company. All related party transactions are mentioned in the notes to the accounts, all related party transactions are placed before the audit committee for approval. Omnibus approval was obtained on a yearly basis for transactions which are of repetitive nature. Transactions entered into pursuant to omnibus approval are verified and a statement giving details of all related party transactions are placed before the audit committee and the Board for review and approval on a quarterly basis. The policy on related party transactions as approved by the board is placed on the Companys website www.indef.com/investor

24. Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace

The Company has in place an anti-sexual harassment policy and internal complaints committee (ICC) to redress complaints received regarding sexual harassment in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees are covered under this policy. There were no complaints received during the year. As part of the compliance under this policy, the workforce at the company was also trained towards appropriate behavior at workplace.

25. Energy Conservation, Technology Absorption and Foreign Exchange Earning and Outgo

The information on conservation of energy, technology absorption, foreign exchange earnings and outgo etc. to the extent applicable stipulated under section 134 (3) (m) of the Companies Act, 2013 read with Rule no. 8 of the Companies (Accounts) Rules, 2014 is set out in “Annexure A” annexed hereto.

26. Annual Return

As required under Section 134(3)(a) of the Companies Act, 2013 and as per Companies (Management and Administration) Amendment Rules 2022, annual return for 2021-22 in the prescribed Form MGT 7 is put up on the Companys website - www.indef.com/investor

27. Industrial Relations

The relationship with the employees continued to remain cordial during the year.

Companys directors take this opportunity to thank the banks, government authorities, regulatory authorities, stock exchanges, employees and all stakeholders for their continued co-operation and support to the Company.

On behalf of the Board of Directors

	Shekhar Bajaj
Dated : 26/05/2023	Chairman
Place : Mumbai	(DIN No. 00089358)