Hercules Hoists Ltd

We present our 62nd Annual Report together with the Audited Financial Accounts for the year ended March 31, 2024:

During the year, the Company announced a final dividend of Rs. 4.00 per share of value Re. 1.00 each, subject to shareholders approval in the ensuing AGM for the year ended March 31, 2024, against the total dividend including interim dividend of Rs. 3.00 paid per equity share of value Re. 1 each in the previous year.

The Company's dividend policy is based on the need to balance the twin objectives of appropriately rewarding the shareholders with dividend and conserving the resources to meet the Company's growth. The details of Dividend Distribution Policy are put up on the website of the Company at the link: www.indef.com.

The revenue from operations of Rs. 17,952.51 lakhs is up by 19.07% as compared to the previous year's revenue from operations of Rs. 15,077.08 Lakhs. The profit after tax of Rs. 3,601.91 lakhs, is decreased by 65.13%, as compared to previous year's net profit of Rs. 10,370.71 lakhs.

As a dynamic solutions provider, the Company has transcended traditional roles to present a comprehensive 360-degree offering that caters to the evolving needs of industries establishing itself as the ultimate partner for worry free lifting. With a team of dedicated professionals propelling our journey, we proudly lead the market in hoisting solutions across India. Our offerings adhering to ISO 9001:2015 standards and holding ISI and CE certifications symbolize the unwavering commitment to safety and reliability.

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

The demand and industrial sales growth post Covid-19 recovery is stabilizing to a more long term value of 7% to 10%. The metal prices were stable, leading to better margin but logistics disruption and geo-political issues continue as business risk. The stability of government policies has helped infrastructure growth, and capex investment, leading to increase demand for MHE products.

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 formally presented a scheme of arrangement for demerger between Hercules Hoists Limited and Indef Manufacturing Limited to the National Company Law Tribunal (NCLT), Mumbai bench. This follows the receipt of an “Observation Letter” from both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The NCLT, Mumbai bench, issued a court order on December 19, 2023, which mandated the company to convene a shareholders meeting. On January 30, 2024, the company successfully conducted the shareholders meeting where the proposed scheme of demerger was presented for approval. Subsequent to the shareholders' approval, the company has submitted the necessary applications for further approval from the NCLT, Mumbai. Now, it is at hearing stage.

As per section 152 (6) of the Companies Act, 2013, Shri Nirav Nayan Bajaj (DIN: 08472468) is liable to retire by rotation at the ensuing AGM and being eligible, offer himself for re-appointment.

The Board of Directors at its meeting held on July 11, 2023, based on the recommendation of Nomination and Remuneration Committee, had appointed Smt Neelima Bajaj Swamy as an Additional Director (Non-Executive) and Shri K J Mallya as an Additional Director (Non-Executive Independent) of the Company for term of 5 years. The members of the Company at its 61st Annual General Meeting held on August 11, 2023 approved the same.

Upon completion of the second consecutive term, office of Mr. Gaurav Vinod Nevatia (DIN: 01005866), as a Independent Director has ceased on March 31, 2024.

The existing tenure of Mr. Hariprasad Anandkishore Nevatia (DIN: 00066955), Whole-time director is up to 21st November, 2024. Considering the provisions of Section 196(2) of the Companies Act, 2013 of the Act, the Nomination and Remuneration Committee at its meeting held on 27th May, 2024 recommended to the Board, the re-appointment of Mr. Hariprasad Anandkishore Nevatia as Whole-time director for a period of 2 years effective from 22nd November, 2024. The Board at its meeting held on the same day, based on the recommendation of the Nomination and Remuneration Committee, considered and approved, the re-appointment of Mr. Hariprasad Anandkishore Nevatia as Whole-time director, subject to approval of the shareholders.

The above proposals forms part of the Notice of the 62nd AGM and the relevant resolutions are recommended for the members' approval therein.

Further, based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at their meeting held on March 26, 2024, appointed Mr. Vikram Taranath Hosangady (DIN: 09757469) as Non-Executive Independent Director w.e.f. 01st April, 2024. The members of the Company via postal ballot (resolution passed on May 07, 2024) also approved the same.

Further, based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at their meeting held on May 27, 2024, appointed Smt. Girija Balakrishnan (DIN 06841071) as NonExecutive Independent Director w.e.f. 27th May, 2024, subject to approval of the shareholders.

Shri Vijay Singh, the Chief Financial Officer (CFO) and Key Managerial Personnel (KMP), and Shri Kiran Mukadam, the Company Secretary and KMP, have resigned. Shri Vijay Singh's resignation is effective December 29, 2023, while Shri Kiran Mukadam's resignation is effective March 4, 2024. To fill these positions, on recommendation of Nomination and Remuneration Committee, the company has appointed Shri Girish Jethmalani as the Chief Financial Officer (CFO) and KMP, effective December 30, 2023 and Shri Vivek Maru has been appointed as the Company Secretary, Compliance Officer, and KMP, effective March 5, 2024.

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 company's code of business conduct & ethics. All independent directors of the company have valid registration in the independent director's 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.

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 2023-24 is unmodified, i.e., it does not contain any qualification, reservation, or adverse remark.

Pursuant to Section 148 of the Companies Act, 2013 and rules made thereunder, the Board of 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 2024-25 at a remuneration of Rs. 60,000/-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 31,2023, under review.

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 B”. There is no secretarial audit qualification for the year ended March 31,2024, under review. The Company is following the applicable secretarial standards.

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.

The Company's 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.

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.

The financial results of the Company for the year ended March 31, 2024 have been disclosed as per Schedule III of the Companies Act, 2013.

The financial statements up to year ended March 31, 2024 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.

In accordance with the provisions of Section 129(3) of the Companies Act, 2013 and Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015; as amended; the Consolidated Financial Statements forms part of this Annual Report. The Consolidated Financial Statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014

The Risk Management Committee is set up in conformity pursuant to Regulation 21 of the SEBI LODR Regulations in May 2024. Risk management is embedded in your Company's 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. The Board has adopted a Risk Management Policy for all its business divisions and corporate functions.

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”.

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 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.

The Board of Directors of the Company has pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, established Vigil Mechanism Policy-Whistle Blower Policy for Directors and employees of the Company to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and/or reports, etc.

The employees of the Company have the right to report their concern or grievance to the Chairman of the Audit Committee. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. The Whistle Blower Policy is hosted on the Company's website at: www.indef.com

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.

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.

As per SEBI's 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, 2024, Hercules Hoists Limited is covered under the top 1,000 companies based on market capitalization, and therefore, a BRSR is included in our Annual Report. Nonetheless, as a responsible corporate citizen, we remain committed to ensuring that our business operations adhere to the highest standards of ethical and sustainable practices.

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. 44 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.

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. 7, 12 and 16 to the financial statements.

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

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.

All transactions entered with related parties for the year under review were on arm's 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 Company's website www.indef.com/ investor

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.

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.

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 2023-24 in the prescribed Form MGT 7 is put up on the Company's website -www.indef.com/investor

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

Company's 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.