Your Board of Directors take pleasure in presenting the 46^th 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 31^st March, 2025.

STATE OF COMPANY'S AFFAIRS

FINANCIAL SUMMARY & PERFORMANCE HIGHLIGHTS

The Audited Financial Statements for the Financial Year ended 31^st March, 2025, 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 ' 1,44,646.28 Lakhs as compared
to the last year's revenue of ' 1,37,159.12 Lakhs. The
Company has achieved Profit Before Tax of ' 35,967.41
Lakhs and Profit After Tax of ' 26,757.46 Lakhs as on 31^st
March, 2025 as against previous year's Profit Before Tax of
' 32,439.23 Lakhs and Profit After Tax of ' 24,298.67 Lakhs.

The Company achieved a total Comprehensive Income of
' 26,907.86 Lakhs as against previous year's Comprehensive
Income of ' 24,913.11 Lakhs. The EPS on financials for the
year ended on 31^st March, 2025 was ' 28.40 (Basic) and
' 28.39 (Diluted).

Consolidated:

During the year under review, the revenue from operations
and other income stood at ' 1,44,634.48 Lakhs as compared
to the last year's revenue of ' 1,37,159.07 Lakhs. The
Company has achieved Profit Before Tax of ' 35,955.34
Lakhs and Profit After Tax of ' 26,743.63 Lakhs as on 31^st
March, 2025 as against previous year's Profit Before Tax of
' 32,438.83 Lakhs and Profit After Tax of ' 24,298.37 Lakhs.
The Company achieved a total Comprehensive Income of
' 26,894.03 Lakhs as against previous year's Comprehensive
Income of ' 24,912.81 Lakhs. The EPS on financials for the
year ended on 31^st March, 2025 was ' 28.39 (Basic) and
' 28.37 (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 ' 3 per share of Face value of
' 2/- each fully paid for the financial year ended 31^st March,
2025 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://happyforainasltd.com/wp-content/uploads/2025/02/

Dividend-Distribution-Policy.pdf

There is no dividend which was required to be transferred
to Investor Education and Protection Fund during the year
ended 31^st March, 2025.

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 profits for the financial
year ended 31^st March, 2025 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 31^st March, 2025.

share capital

a) Authorised Share Capital

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

As on March 31, 2025, 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 9,42,04,882 shares of FV ' 2/- each to
9,42,42,200 shares of FV of ' 2 each pursuant to the
allotment of two lots of ESOPs during the year.

After the first ESOP allotment of 19,943 equity
shares of ' 2 each on 31^st December, 2024, the
paid-up capital increased from 9,42,04,882 of FV
' 2 each amounting to ' 18,84,09,764 to 9,42,24,825 of
FV ' 2 each amounting to ' 18,84,49,650.

After the second ESOP allotment of 17,375 equity
shares of ' 2 each on 12^th February, 2025, the
paid-up capital increased from 9,42,24,825 of FV
' 2 each amounting to ' 18,84,49,650 to 9,42,42,200 of
FV ' 2 each amounting to ' 18,84,84,400.

As on March 31, 2025, the Issued, Subscribed and Paid-
up Share Capital of the Company is 9,42,42,200 Equity
Shares of FV ' 2/- each amounting to ' 18,84,84,400
(Rupees Eighteen crores eighty-four Lakhs eighty-four
thousand four hundred 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 31^st March, 2025.

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

The Company has a wholly owned subsidiary i.e. M/s HFL
Technologies Private Limited.

The consolidated financials of the Company 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 Company's Board of Directors is duly constituted in
accordance with the provisions of the Companies Act,
2013 and Regulation 17 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("SEBI LODR").
As on the date of this report, the Board comprises of a
balanced mix of Executive, Non-Executive and Independent
Directors including Women Director. The Directors hold
extensive experiences and specialised knowledge in sectors
covering law, finance, accountancy and other relevant areas.

As on 31^st March, 2025, the Board consists of 7 (Seven)
directors comprising of four Non-Executive Independent
Directors and three Executive Directors including two
women directors, namely, Ms. Rajeswari Karthigeyan and
Ms. Megha Garg. 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 afore mentioned
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.

The composition of the Board and its functioning reflect the
Company's commitment to sound corporate governance
principles.

Directors retiring by rotation

Pursuant to the provisions of Section 152 of the Companies
Act, 2013, Ms. Megha Garg (DIN: 07352042), Whole-time
director of the Company is liable to retire by rotation at the
ensuing 46^th AGM of the Company.

She being eligible has offered herself for reappointment as
Director of the Company. Resolution for her reappointment
is being proposed at the 46^th AGM and her profile is included
in the Annexure to Notice of the 46^th AGM.

Change in Board of Directors

During the financial year under review, the following changes
occurred in the Board of Directors.

a. Mr. Prakash Bagla (DIN: 03043874), Nominee director
resigned from the directorship of Company with effect
from close of business hours on 24^th May, 2024.

b. The term of Mr. Narinder Singh Juneja, DIN: 00393525,
CEO and Whole-time Director of the Company was
completed with effect from close of business hours on
31^st December, 2024.

c. The second term of Mr. Vikas Giya, DIN:01399764,
Independent Director of the Company was completed
with effect from close of business hours on 30^th
January 2025.

key managerial personnel

As on 31^st March, 2025, the following persons are 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 were four Independent Directors on the Board of the
Company as on 31^st March, 2025. The Company 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 directors further confirmed that
they have complied with the Code of Conduct as per SEBI
(Prohibition of Insider Trading) Regulations.

The Company has obtained declaration from all the
Independent Directors of the Company undertaking that
they do not 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 2024¬
25, 6 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 2024-25 has
been separately provided in the Corporate Governance
Report. The interval between any two Board Meetings was
well within the maximum allowed gap of 120 days. During
the year, some of the business were considered by the Board
by passing resolutions by circulation.

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 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.

Pursuant to the provisions of the Companies Act, 2013
and Regulation 17(10) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the Board has
carried out an annual performance evaluation of its own
performance, the performance of its committees, and that
of the individual Directors.

The evaluation process was conducted through a
structured questionnaire covering various aspects such
as the composition and structure of the Board and its
Committees, effectiveness of Board processes, information
flow, functioning, decision-making, and the performance of
individual Directors, including Independent Directors and the
Chairperson.

The performance evaluation of the Independent Directors
was carried out by the entire Board, excluding the Director
being evaluated. The Nomination and Remuneration
Committee also reviewed the performance of the Board, its
committees, and individual Directors. The feedback from the
evaluation was discussed at the Board meeting and noted
for further improvement and action, wherever required.

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.

meeting of independent directors

During the Financial Year under review, a separate Meeting
of the Independent Directors was held on 26^th March, 2025
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
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 31^st March, 2025, 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 of 31^st March, 2025 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 31^st March,
2025 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 31 ^st
March, 2025.

(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 31 ^st March, 2025.

risk management

The Company has in place a robust Risk Management
framework to identify, evaluate, and manage various risks
associated with its business operations. This framework is
designed to ensure appropriate risk management practices
across all levels of the organisation, thereby safeguarding the
Company's assets, reputation, and stakeholders' interests.

In accordance with the provisions of Section 134(3)(n) of the
Companies Act, 2013 and Regulation 21 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015, the Company has constituted a Risk Management
Committee comprising members of the Board and senior
executives. The Committee periodically reviews the risk
exposure and the measures taken to mitigate key risks.

Key risks identified include operational risks, Governance
and regulatory risks, financial risks, cyber risks, Environment
risks, Sector/Industry risks, Social risks The Company
continuously monitors these risks through appropriate
control measures and timely corrective actions.

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 reviewed regularly and updated as necessary to align
with the changing business environment and regulatory
landscape The Policy is available on the Website of the
Company at

https://happvforainasltd.com/wp-content/uploads/2025/02/

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

The internal financial controls include well-documented
policies and procedures, clearly defined roles and
responsibilities, standard operating procedures, risk
control matrices, and robust IT systems. These are tested
periodically for design and operating effectiveness through
internal audits conducted by a reputed firm of internal
auditors.

The Company has established and maintained adequate
internal financial controls with reference to the financial
statements, commensurate with the size, scale, and
complexity of its operations. These controls are designed
to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial
statements in accordance with applicable laws.

The Audit Committee actively oversees and reviews the
adequacy and effectiveness of the internal control systems
and suggests improvements as needed.

The Company's internal control systems 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.

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.

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

In accordance 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 Committee.
The composition, role, and responsibilities of the Committee
are in line with the statutory requirements.

The Company has adopted a CSR Policy, which outlines
the guiding principles and activities to be undertaken in line
with Schedule VII of the Act. The policy is available on the
Company's website at

https://happvforainasltd.com/wp-content/uploads/2023/09/

CSR-Polioy-revised-Happy-Forgings-limited.pdf.

During the financial year under review, the Company has
spent ' 480.26 Lakhs towards CSR initiatives in the local
communities where it operates through projects focused
on education, healthcare, environment sustainability, skill
development etc. Apart from that, the Company has utilised
' 124.03 Lakhs from unspent CSR account for 2023-24 on
the long-term project of construction of Vocational college
under Bal Vikas Trust, Ludhiana which was started in FY
2023- 24.

The CSR activities were implemented either directly or
through approved implementing agencies.

A detailed report on CSR activities in the prescribed format,
as required under Rule 8 of the Companies (CSR Policy)
Rules, 2014, is annexed to this Report as Annexure 2.

The Company remains committed to contributing positively
to society and creating long-term social value through its
CSR initiatives.

The Company firmly believes that businesses are
responsible not only for generating financial returns but also
for contributing to the betterment of society. It is committed
to making a meaningful impact in the areas of education,
healthcare, environment & community development and
remains committed to fulfilling its social obligations with
integrity and purpose.

The brief outline of the CSR Policy of the Company and the
initiatives undertaken by the Company during the financial
year ended 31^st March, 2025, 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 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 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://happyforqinqsltd.com/wp-content/uploads/2025/04/

Policv-on-Related-Partv-Transactions-1.pdf

Further, the Company has not entered 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 exchange 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
31^st March, 2025 is attached as "Annexure -5"

auditors & audit reports

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 46^th 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
2024-25 and the Reports are self-explanatory. The said
Auditors' Reports for the Financial Year ended March 31,
2025, on the Financial Statements of the Company forms
part of this Annual Report.

Re-appointment of SR Batliboi & CO. LLP

The Audit Committee and the Board of Directors in their
respective meetings held on May 17, 2025 have approved
and recommended the re-appointment of M/s. S R Batliboi
& Co., LLP, Chartered Accountants, as Statutory Auditors
of the Company to hold office for a period of 5 (Five)
consecutive financial years, from the conclusion of the 46^th
Annual General Meeting to be held in the year 2025 until the
conclusion of the 51^st Annual General Meeting to be held in
the year 2030 subject to the approval of the shareholders at
the 46^th Annual General Meeting.

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 for 2024-25.

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 24^th May, 2024, had appointed M/s Chandrasekaran
Associates, Practicing Company Secretaries as Secretarial
Auditor of the Company for the financial year 2024-25. The
Secretarial Audit Report for 2024-25 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
2024-25 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 31^st March,
2025 are unmodified i.e. they do not contain any qualification,
reservation, or adverse remark.

Appointment of M/s Chandrasekaran , Practicing

Company Secretaries as Secretarial Auditor

Pursuant to the amended provisions of Regulation 24A
of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations,
2015 (‘SEBI LODR Regulations') vide SEBI Notification dated
12^th December, 2024 and provisions of Section 204 of the
Companies Act, 2013 ('Act') and Rule 9 of the Companies
(Appointment and Remuneration of Managerial Personnel)
Rules, 2014 the Audit Committee and the Board of Directors
at their meetings held on May 17, 2025 have approved and
recommended the appointment of M/s Chandrasekaran
Associates, Peer Reviewed Firm of Company Secretaries
in Practice ( Firm Registration No. P1988DE002500) as
Secretarial Auditor of the Company to hold office for a period
of 5 (Five) consecutive financial years, from the conclusion
of the 46^1h Annual General Meeting to be held in the year
2025 until the conclusion of the 51^st Annual General Meeting
to be held in the year 2030 subject to the approval of the
shareholders at the 46^th Annual General Meeting.

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 8^th 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 2024-25 on
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 2024-25.

The Company has received consent from M/s. Rajan
Sabharwal & Associates, cost auditors for appointment as

Cost Auditors of the Company for FY 2025-26 which was
approved by the Board of Directors in their meeting held on
17^th May, 2025.

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 believes in promoting a culture of honesty,
transparency, and accountability. The Vigil Mechanism
ensures that adequate safeguards are provided against
victimisation of the whistle blower, who can raise concerns
through designated channels, including anonymous
reporting. All concerns reported under this mechanism
are investigated promptly and thoroughly, and appropriate
action is taken based on the investigation outcome.

In accordance with the provisions of Section 177(9) and
(10) of the Companies Act, 2013 and Regulation 22 of the
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Company has established a Vigil
Mechanism and adopted a Whistle Blower Policy to provide
a framework for directors and employees to report genuine
concerns or grievances regarding unethical behaviour, actual
or suspected fraud, or violation of the Company's Code of
Conduct.

The Audit Committee of the Board oversees the functioning
of the vigil mechanism and reviews the findings, if any. The
Policy also provides access to the Chairperson of the Audit
Committee in exceptional cases.

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/7075/07/
Whistle-Blower-Policy.pdf

There were no instances of reporting under vigil mechanism
during the financial year ended 31^st March, 2025.

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
Return of the Company in Form MGT-7 for financial year
2024-25 is 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 is as below:

CRISIL has reaffirmed "CRISIL AA/Stable" rating for various
bank facilities.

ICRA has assigned long-term rating of [ICRA] AA and short¬
term is [ICRA] A1 . The outlook on the long-term rating is
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 Chandrasekaran Associates, Practicing
Company Secretaries confirming compliance with the same
has been disclosed under the Corporate Governance Report
section of this Annual Report.

A certificate of the Managing 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 Managing
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. The
BRSR report is annexed as "Annexure-7" to this Report.

human resources & industrial relations

The Company believes in promoting a workplace environment
that encourages innovation, collaboration, and continuous
learning. Various employee engagement programs,
training sessions, and health and wellness initiatives were
conducted during the year to enhance employee satisfaction
and productivity The management continues to work closely
with employees and labour representatives to ensure a
positive and transparent working environment. 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.

The Company had formulated Happy Forgings ESOP Scheme
2023 pursuant to the resolution passed by the shareholders
on 31^st July, 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 31^st
March, 2025, the Company has one Employee's Stock Option
Plan, namely, Happy Forgings ESOP Scheme 2023.

Further, during the financial year, ESOPs were allotted twice.
The details are given below:

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 enclosed 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.

In accordance with the provisions of the Sexual Harassment
of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 and the rules made thereunder,
the Company has constituted an Internal Complaints
Committee (ICC) to look into complaints, if any, relating to
sexual harassment.

The policy on prevention of sexual harassment at workplace
can be accessed through the below link:

https://happyforainasltd.com/wp-content/uploads/7073/09/

Prevention-of-Sexual-Harassment-at-Workplace-Policy-

Happy-Forgings-Limited.pdf

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 2024-25, 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
following link

https://happyforainasltd.com/wp-content/uploads/7075/07/

Policv-on-Prohibition-of-Insider-Tradina.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 authorised 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 31^s1 March, 2025
till the date of this report.

2. There was no change in the nature of business of the
Company during the financial year ended 31^st March,
2025.

3. During the Financial Year under review 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.

acknowledgement

Your directors, place on records 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 thank the Company's vendors,
investors, business associates, Central/State Government
and various departments and agencies for their support and
co-operation.