To,

The Members,

The Board of Directors is pleased to present Integrated Annual Report together with the Audited Financial Statements of the Harsha Engineers International Limited ("the Company") for the financial year ("year") ended March 31,2026.

The Audited Standalone and Consolidated Financial Statements of the Company as on March 31, 2026 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, 2026 has been summarised as under:

(' in lakhs)

# 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.

The Company has achieved revenue from operations of ' 162,679 lakhs for the financial year ended March 31, 2026, an increase of 15.57% as compared to ' 140,765 lakhs in the previous financial year.

Profit after tax (PAT) for the financial year ended March 31, 2026 is ' 15,520 lakhs, an increase of 73.78% as against ' 8,931 lakhs in the previous financial year.

Basic earnings per share (EPS) for the financial year ended March 31, 2026 is ' 17.05 as against ' 9.81 in the previous financial year.

Diluted earnings per share (EPS) for the financial year ended March 31, 2026 is ' 17.05 as against ' 9.81 in the previous financial year.

The Company has achieved revenue from operations of ' 122,820 lakhs for the financial year ended March 31, 2026, increase of 12.75% as compared to ' 108,930 lakhs in the previous financial year.

Profit after tax (PAT) for the financial year ended March 31,2026 is ' 17,680 lakhs, increase of 400.00% as against ' 3,536 lakhs in the previous financial year.

Basic earnings per share (EPS) for the financial year ended March 31, 2026 is ' 19.42 as against ' 3.88 in the previous financial year.

Diluted earnings per share (EPS) for the financial year ended March 31, 2026 was ' 19.42 as against ' 3.88 in the previous financial year.

The year under review would be remembered for the following significant activities in your Company:

• 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.

• The Company has successfully commissioned 2*5.20 MWp Solar Tracker PV Power Plant ("Solar Power Plant") at Survey No. 13, 19, 34, 35, 36, 37, Village: Vada, Taluka: Kankrej, District: Banaskantha, Gujarat. The Solar Power Plant was commissioned on May 23, 2025 in accordance with the approved commissioning protocol and will be used for captive purpose.

• M/s. Harsha Engineers Advantek Limited, Wholly Owned Subsidiary of the Company ("Harsha Advantek") has commenced commercial production and invoicing from June 26, 2025 at its newly established plant at Survey No: 376 to 379, TA: Bavla, Bhayla, Ahmedabad, Gujarat, 382220.

• The Company has entered into a long term Agreement ("the Agreement") with a leading multinational company for manufacture and supply of journal bearings / bushings in accordance with terms and conditions stipulated in the Agreement effective on July 31, 2025.

• M/s. Harsha Precision Bearing Components (China) Co. Ltd, Wholly Owned Subsidiary of the Company ("Harsha China"), will undertake a brownfield expansion Project at an outlay of approximately USD 9.94 Mio at its plant situated at No. 10 Fuhua Road, Bixi Sub-district, Changshu, Jiangshu. The capital expenditure will be towards infrastructure development and purchase of plant and machinery.

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

• The Company won the Silver Award on August 21, 2025 and August 22, 2025 at the 53^rd CII National Kaizen Competition for a Renovative and Innovative Kaizen, recognising team excellence, continuous improvement, and impactful results at the CII National Kaizen Event.

• The Company was awarded Long Association recognition by our esteemed customer at the SKF Seals Supplier Meet 2025 on August 22, 2025, acknowledging a long-standing partnership, consistent performance, and strong support in sheet metal parts supply.

• The Company was awarded Best Presentation on Sustainability Award at the 12^th ACMA Zonal Kaizen Competition, Gujarat, on November 22, 2025, recognising excellence in sustainable practises.

• The Company was awarded 2^nd Prise for Best Presentation on Sustainability at the 16^th ACMA (WR) Regional Kaizen Competition, Pune, on December 19, 2025, recognising excellence in sustainable practises, innovation, and impactful continuous improvement initiatives.

• The Stamping Team won 1^st Prize on November 18, 2025 at the Schaeffler Pune Supplier Competition during Schaeffler Quality Month 2025, recognized for excellence in quality, innovation, teamwork, and consistent superior performance at Pune.

• The Cut & Carry Team was honored by NBC at the Quality Circle Competition on November 20, 2025, in recognition of their innovative solutions, strong teamwork and commitment to continuous improvement.

• 3^rd position award was secured by Team "Brass Champions" at the 12^th ACMA (WR) Zonal Kaizen Competition - Gujarat Zone, held on November 21,2025.

• The Company has participated in India Supplier Excellence Award Day 2026 on January 29, 2026 at Pune.

• The Company was awarded TPM Special Award on March 20, 2026 at Kyoto, Japan.

• The Company has inaugurated "Tech Facility" at Indian Institute of Technology Gandhinagar.

As on March 31,2026, the main objects and utilisation of net proceeds of the IPO are as follows:

The Company has fully utilized the net proceeds from its IPO for the purposes stated in the Prospectus dated September 19, 2022, and the same stands fully utilized as on March 31, 2026.

The Authorised Share Capital of your Company as on March 31, 2026 stood at ' 1,000,000,000 divided into 100,000,000 equity shares of ' 10 each. The Issued Share Capital of your Company is ' 910,441,050 divided into 91,044,105 equity shares of ' 10 each and the Subscribed and Paid-up Share Capital is ' 910,441,050 divided into 91,044,105 equity shares of ' 10 each fully paid-up.

The Board of Directors have recommended a final dividend of ' 1.5 per equity share of ' 10 each fully paid up for the financial year ended on March 31, 2026. 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 ' 1,365.66 lakhs.

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.

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, 2026 the Company was not required to transfer any amount in the Investor Education and Protection Fund.

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, 2026.

There have been no 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.

As on March 31, 2026, the Company has three subsidiaries and a Joint Venture, the details of which are given below:

During the year under review, the Board of Directors reviewed the affairs of subsidiaries and joint venture. In accordance with Section 129(3) of the Act, the Company has prepared consolidated financial statements of the Company and all its subsidiaries and joint venture, which form part of the Annual Report. Further a statement containing the salient features of the financial statements of subsidiaries and joint venture in the prescribed Form no. AOC-1 is appended as ANNEXURE-A. The separate audited financial statements in respect of the subsidiary shall be kept open for inspection at the Registered Office of the Company. The Company will also make available these documents upon request by any Member of the Company interested in obtaining the same. The separate audited financial statements in respect of the subsidiary are also available on the website of the Company at https://www.harshaengineers. com/InvestorRelations/financial-information.php#. The Company has framed a policy for determining material subsidiaries, which has been available on the website of the Company at https://www. harshaengineers.com/InvestorRelations/company- policies.php.

The Board of Directors consists of 10 Directors, out of which 5 are Non-Executive & Independent Directors including one women Director and 5 are Executive & Non-Independent Directors including one women Director. The composition is in compliance with the Act and SEBI Listing Regulations.

During the year, no changes have been made in the composition of the Directors of the Company.

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Act and the Articles of Association of the Company, Mr. Rajendra Shah (DIN:00061922) Chairman & Whole-time Director and Mr. Harish Rangwala (DIN:00278062) Managing Director of the Company are liable to retire by rotation at the ensuing Annual General Meeting, being eligible for re-appointment, both have offered themselves for the same.

The term of Mr. Ambar Patel (DIN:00050042), Mr. Kunal Shah (DIN:02087152), Mr. Bhushan Punani (DIN:00119874) and Mr. Ramakrishnan Kasinathan (DIN:09461806) as an Independent Director will expire on January 09, 2027. Hence, proposal of their re-appointment for a second term of 5 (five) consecutive years with effect from January 10, 2027 has been attached in the Notice which forms part of this Annual Report.

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.

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.

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, 2026.

The Board of Directors duly met 4 (four) times during the financial year 2025-26. All the Board Meetings were convened and held in accordance with 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 2025-26 are given in the Corporate Governance Report which forms part of this Annual Report.

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.

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 familiarize with the Company's procedures and practices. The Company has, through presentations, at regular intervals, familiarized 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.

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.

The Company has a Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize 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.

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.

During the year the Company has not accepted deposits under the provisions of the Act.

All Related Party Transactions that were entered into during the financial year 2025-26 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.

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2026 in the prescribed Form no. MGT-7 is available on the Company's website at https://www.harshaengineers. com/InvestorRelations/financial-information.php#.

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.

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, 2026, 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 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.

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 term of M/s. Pankaj R. Shah & Associates, Chartered Accountants (FRN: 107361W) will expire at the conclusion of ensuing Annual General Meeting.

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.

Pursuant to the provisions of the Companies Act, 2013 and other applicable provisions, if any, and subject to approval of members at the ensuing Annual General Meeting, the Board, on the recommendation of the Audit Committee, at its meeting held on May 07, 2026 has appointed M/s. Mukesh M. Shah & Co., Chartered Accountants, (FRN: 106625W) Ahmedabad as the Statutory Auditor of the Company for a term of five consecutive years from the conclusion of 16^th Annual General Meeting until the conclusion of the 21^st Annual General Meeting of the Company with such remuneration as may be decided by the Board of Directors.

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, 2026.

Pursuant to Regulation 24A of SEBI Listing Regulations and the Act, M/s. Chirag Shah &

Associates, Peer Reviewed Firm of Practicing Company Secretaries has been appointed 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.

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 of the Company is enclosed as a part of this Board's Report as an ANNEXURE-B1 . The observations and comments, appearing in the Secretarial Auditor's Report are selfexplanatory 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(1)(a) of the SEBI Listing Regulations, Secretarial Audit Report of Harsha Engineers Advantek Limited, material unlisted subsidiary incorporated in India, is annexed to the report as ANNEXURE-B2. The said report issued by M/s. Chirag Shah & Associates, Peer Reviewed Firm of Practicing Company Secretaries, does not contain any qualification, reservation or adverse remarks.

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 2025-26. 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.

During the financial year under review, neither the Statutory Auditor nor the Secretarial Auditor have reported to the Audit Committee or the Board, any instances of fraud committed against the Company by its officers or employees under Section 143(12) of the Companies Act, 2013, the details of which would be required to be mentioned in the Board's Report.

The Company has taken adequate insurance cover of all its movable and immovable assets (except Land) to cover various types of risks.

There has been no revision in credit ratings of the Company during the financial year ended March 31, 2026, details of which are as under:

Information required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is disclosed in the ANNEXURE-C to this Board's Report.

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.

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.

Management Discussion and Analysis Report as stipulated under the SEBI Listing Regulations is presented in a separate section forming part of this Annual Report.

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.

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 2025-26, no complaints in respect of the same have been received by the Company.

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.

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.

During the year under review, your Company has complied with all the applicable provisions of

Secretarial Standards issued by the Institute of Company Secretaries of India.

The notes forming part of the accounts are selfexplanatory and therefore do not call for any further comments. ANNEXURE-A to ANNEXURE-E forms part of this Board's Report.

The Directors are thankful for the co-operation and assistance received from the Financial Institutions, Bankers, Collaborators, Central and State Government Departments, Local Authorities, Shareholders, Employees and other Stakeholders of the Company.