HD Fire Protect Ltd Directors Report

Dear Shareholders,

Your Directors are pleased to present this 27th Annual Report together with the Audited Financial statements of the Company for the year ended 31st March 2024.

FINANCIAL RESULTS:

(Rs. in Lakhs)

The summary of financial performance of the Company for the year is as under:

PARTICULARS	CURRENT YEAR	PREVIOUS YEAR
Revenue from operations	37295	32408
Earnings before Finance Cost, Depreciation & Tax	12570	9964
Finance Cost	1	NIL
Depreciation	934	637
Profit before Tax	11635	9327
Corporate Tax	2795	2320
Profit after Tax	8840	7007

PERFORMANCE HIGHLIGHTS OF THE YEAR:

Your Company has successfully completed 27 years of operation and has posted impressive performance during the year under review.

FY24 has been another great milestone and a rather momentous one, in our journey of stakeholder value creation without compromising on basic values. We have not only grown our revenues, operational profits, net profits, and cash reserves, but we went ahead to create the avenues for a much greater and sustainable growth in the coming years.

The performance of your Company has been commendable in all respects and the strategies adopted at the market place yielded good results. This has resulted in your Company posting the best ever consolidated results in its history.

In terms of the revenue and profits, we again did exceptionally well and passed another psychological milestone with flying colours by achieving a operating revenue of Rs.37,295 lakhs during the year compared to Rs.32,408 lakhs in the Previous Year.

Profit before Interest, Depreciation & Tax at Rs.12,570 lakhs for the current year compared to Rs.9,964 lakhs in the previous year. This was made possible by better capacity utilisation of both the manufacturing plants situated at Jalgaon & Thane. These improvements are due to continuous upgradation of our technical capabilities with sizable investment in plant & machinery at both the manufacturing facilities.

We also achieved a healthy Profit after Tax which stood at Rs.8,840 lakhs in the current year from Rs.7,007 lakhs in the previous year.

EXPORTS:

Even though negative impact on globe, our revenue from export market grew up by Rs.937 lakhs from Rs.11,381 lakhs to Rs.12,317 lakhs.

PRODUCT DEVELOPMENT AND APPROVALS:

• Company developed its Alarm Valves for European CE Approval and same project has been opened It is expecting approval to be done by October 2024

• Company renewed its ASME U stamp certification with ASME (USA) in May 2023 for three years,

• Company also launched its range of Post Indicator and Wall Indicator valves and shall be marketing those specifically in the middle east region.

• Company has submitted a new variant of fire protection Monitor Vajra-331 for FM Approval.

• Company has opened a new UL Approval project of its low expansion foam system with Fluorine-Free environmentally foam.

FINANCE & RATING:

During the year under review, in view of optimum utilisation of resources, the Company generated cash profit and is enjoying status of Debt Free Company.

CRISIL, a SME Rating Agency has reaffirmed "MSE 1", the highest rating to the Company.

DIVIDEND:

The Directors have recommended a final dividend of Rs.20/- per equity share of the face value of Rs.100/- each. The final dividend on equity shares, if approved by the Members, would involve a cash outflow of Rs. 159.30 lakhs.

BUYBACK OF SHARES:

The Board of Directors at its meeting held on 23rd January, 2024, approved a proposal to buy-back upto 19,500 equity shares of the Company for an aggregate amount not exceeding Rs.2,340 lakhs, being 6.84% of the total paid up equity share capital at Rs 12,000/- per equity share A Letter of Offer was made to all eligible shareholders The Company bought back 19,500 equity shares out of the shares that were tendered by eligible shareholders and extinguished the equity shares on 16lh February, 2024. Capital redemption reserve was created to the extent of share capital extinguished (Rs.19.50 lakhs). The excess cost of buy-back of Rs.2,321 lakhs over par value of shares and corresponding tax on buy-back of Rs.541 lakhs were offset from retained earnings.

TRANSFER TO RESERVES:

The Board of Directors proposes to transfer a sum of Rs.40 Lakhs to the General Reserves CHANGE IN CAPITAL STRUCTURE:

A. Authorized Share Capital and Paid-Up Share Capital:

The Authorized Share Capital of the Company changed to Rs.300 lakhs divided into 3,00,000 equity shares of Rs.100/- each.

The total paid up share capital as on 31s1 March, 2024 was Rs.266 lakhs divided into 2,65,500 equity shares of Rs. 100/- each.

B. Changes in Paid up Share Capital:

Sr. No.	Date of Event	Type of Securities	No. of Securities	Face value	Premium per share	Reason
1	25th November, 2023	Equity Shares	1,90,000	100	NA	Bonus issue of shares
2	16th February, 2024	Equity Shares	(19,500)	100	11,900	Buyback of shares
Net Increase in Paid up Share Capital			1,70.500

VISION OF TOP MANAGEMENT & FUTURE EXPANSION PLAN:

VISION:

• To be globally recognized as the most trusted manufacturer and supplier of fire-fighting products, delivering top-quality solutions that seamlessly blend advanced technology with exceptional value, ensuring 100% customer satisfaction

• We aim to create new niche in our markets to ensure our current foothold remain strong and product line gets more innovative.

MISSION:

• Offer broad portfolio of water, foam, and gas-based fire-fighting products suitable for range of medium & high-risk firefighting applications in Indian and International market.

• Continually work on operational excellence towards becoming a lean and fast-moving organization.

• Hire and retain talent, foster teamwork, positivity, safety and our core values among employees.

• Operate in an environmentally responsible manner.

• Be a responsible corporate citizen and play positive role in society EXPANSION:

Company completed the manufacturing expansion project at Plots Gat No.336 and K-96. Both facilities are now fully operational, enhancing our production capabilities. In addition, Company is actively pursuing further growth with new expansions at Plot 298-1 and Plot K-99, which are adjacent to existing Plot K-98. This strategic expansion will support our continued growth and operational efficiency.

HUMAN RESOURCE:

The Companys Philosophy is to establish and build a high performing organisation, where everyone is motivated to perform to the fullest capacity. The Company is giving direct employment to 243 employees We are nurturing and up-skilling our human capital to prepare for the next level of growth. Our Training and Development initiatives help our people learn the latest developments in the industry. One standout exercise is the "Continuous Learning Program". Apart from training in functional area we also stress on personal development and include insights on health, food, etiquette, relationships, self-management, and personal finances, etc. This exercise is a conscious effort to build a brighter future of the Company and the people who have tirelessly served the Company.

ENVIRONMENT AND SAFETY:

The problem of climate change no longer needs prologue. It is widely accepted as the most serious environment challenge that the world faces. At the centre of climate change issue are the increasing concentrations of carbon dioxide (CO2) and other greenhouse gases in the earths atmosphere as a result of human activities. This has been shown to lead to increases in global atmospheric temperatures (Global warming) and associated "changes in the earths climatic system" (climate change). We consider environment responsibility as one of the most important elements in our materiality matrix Your Companys commitment to environmental protection and safety is based on the continued ongoing processes implemented at its manufacturing facilities. Company has successfully implemented the ISO 14001 Environmental Management System, underscoring our commitment to sustainable practices and environmental stewardship. As part of our ongoing efforts to enhance environmental responsibility, we have established a state-of-the-art Sewage Treatment and Effluent Treatment Plant This initiative is pivotal in treating and recycling industrial waste, thereby reducing our ecological footprint

Additionally, we have introduced a comprehensive rainwater harvesting system This setup is designed to capture and utilize rainwater, further promoting resource conservation and sustainability within our operations.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134(3)(c) of the Companies Act. 2013 your Directors confirm that to the best of their knowledge and belief and according to the information and explanation obtained by them:

I. In the preparation of the annual financial statements for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures.

II. The accounting policies as mentioned in Note 1 in the Notes to the financial statements have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2024 and of the profit of the Company for that period.

III. Proper and sufficient care has been taken 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.

IV. The Annual Accounts have been prepared on a Going Concern basis.

V. Proper internal financial controls were in place and that the financial controls are adequate and were operating effectively

VI. System to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

There were no loans or guarantees given under section 186 of the Companies Act, 2013 The details of Investment are as per Note 3 and Note 7 of the Financial Statements

INSURANCE:

The Company takes a very pragmatic approach towards insurance. Adequate cover has been taken for all movable and immovable assets for various types of risks.

RELATED PARTY TRANSACTIONS:

All the transactions with the related parties are in the ordinary course of business and on arms length basis. There are no materially significant related party transactions made by the Company with Directors or other related parties which may have a potential conflict with the interest of the Company The Company has Related Party Transaction Policy for purpose of identification and monitoring of such transactions The transactions with related parties are disclosed in Form AOC-2 attached to the Board report as an annexure and in Note 40 to the Financial Statements in the Annual Report

CORPORATE SOCIAL RESPONSIBILITY:

As required under Section 135 of the Companies Act, 2013, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee to formulate & recommend to the Board, a Corporate Social Responsibility (CSR) Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013, to recommend the amount of expenditure to be incurred on the activities and to monitor the Corporate Social Responsibility of the Company from time to time. The composition of CSR Committee has been given in Annual Report on CSR activities, CSR Policy is available at Companys website: https://hdfire.com. The annual report on CSR activities is enclosed as Annexure 1 to this report.

POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The Company has in place, policy on Prevention, Prohibition and Redressal of Sexual Harassment for women at workplace in accordance with the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 An Internal Complaints Committee (ICC) has been in place to redress complaints received regarding sexual harassment The policy has set guidelines on the redressal and enquiry process that is to be followed by complaints and the ICC, whilst dealing with the issues related to sexual harassment at the workplace. All women employees are covered under this policy. The Company has not received any complaints during the year

ANNUAL PERFORMANCE EVALUATION BY THE BOARD:

The Board has laid down Policy for evaluation of performance of all Directors is undertaken annually. The Company has implemented a system of evaluating performance of the Board of Directors on the basis of a structured questionnaire which comprises of performance evaluation criteria taking into consideration various performance related aspects. The Board of Directors has expressed their satisfaction with the evaluation process as well as performance of all Directors.

WEB LINK OF ANNUAL RETURN:

Pursuant to Section 92(1) and Rule 11(1) of the Companies Management and Administration) Rules, 2014, Annual Return (Form MGT-7) for the year ended 31st March 2024 will be placed on the Companys website: https://www.hdfire.com.

NUMBER OF MEETINGS OF THE BOARD

During the year Fourteen (14) Board Meetings on 22nd April. 2023, 26lh May, 2023. 30th June. 2023, 17" July, 2023, 8th September, 2023, 28th September, 2023, 30,h October, 2023, 4lh November. 2023, 25lh November, 2023, 16th December, 2023, 22nd December, 2023 and 23rd January 2024, 15th February, 2024 and 11"1 March, 2024 were convened and held. The maximum interval between any two meetings did not exceed 120 days.

Name of the Director	Category	Board Meeting attended during the year
Mr. Harish Narshi Dharamshi	Chairman (From 30lh June. 2023) & Managing Director	14
Mr. Narendra Visanji Dharamshi	Chairman & Director (Upto 30th June, 2023)	3
Mr. Anik Narendra Dharamshi	Director	14
Mr. Miheer Sadanand Ghotikar	Director	14
Mrs. Parika Miheer Ghotikar	Director	14

NUMBER OF MEETINGS OF THE MEMBERS / SHARE HOLDERS:

During the year, one meeting of the members was convened and held on 28" September, 2023.

NUMBER OF MEETINGS OF THE CSR COMMITEE

During the year Three (3) Meetings of CSR Committee on 21st April, 2023, 30" June, 2023, 22nd November, 2023 were convened and held.

AUDITOR AND AUDITORS REPORT:

M/s. KKC & Associates LLP, Chartered Accountants, (Formerly Khimji Kunverji & Co LLP) (Firm Registration No.105146W/W100621) & M/s. Hitesh Dedhia & Co., Chartered Accountants (Firm Registration N0.117412W) Joint Statutory Auditors of your Company have been appointed as such by shareholders at the 24th Annual General Meeting held on 2nd September, 2021 to hold the office from the conclusion of 24th AGM till the conclusion of 29mAGM to be held in FY 2026 and till the conclusion of 27" AGM to be held in FY 2024 respectively.

The Board recommends re-appointing M/s Hitesh Dedhia & Co , Chartered Accountants (Firm Registration N0.117412W) as joint statutory auditor for another term of 5 years who shall hold office from the conclusion of 27th AGM till the conclusion of 32nd AGM to be held in the FY 2029 M/s. Hitesh Dedhia & Co., Chartered Accountants (Firm Registration No.117412W) would be appointed as joint statutory auditor along with M/s. KKC & Associates LLP, Chartered Accountants, (Formerly Khimji Kunverji & Co LLP) (Firm Registration No. 105146WAA/100621).

M/s. KKC & Associates LLP, Chartered Accountants, (Formerly Khimji Kunverji & Co LLP) (Firm Registration No.105146W/W100621) continues to hold the office of joint statutory auditor for their remainder period which shall end on the conclusion of 29lh AGM to be held in the FY 2026.

The Auditors Report for the financial year 2023-24 does not contain any qualification, reservation or adverse remark on Financial Statements for the year ended 31st March, 2024. The statement made by the auditors in their report are self-explanatory and do not call for any further comments.

DIRECTORS :

CONSTITUTION AND CHANGES IN THE BOARD OF THE COMPANY:

Mr. Narendra Visanji Dharamshi, vide his letter dated 1st June, 2023 tendered his resignation. Your Board at their meeting held on 30th June, 2023 accepted his resignation w.e.f. 30lh June, 2023.

The constitution of the Board of Directors is as detailed below:

Sr. No.	Name of Director	Designation	Date of Appointment	Date of Cessation
1	Narendra Visanji Dharamshi	Director	24/04/1997	30/06/2023
2	Harish Narshi Dharamshi	Chairman (From 30lh June, 2023) & Managing Director	01/04/2005
3	Anik Narendra Dharamshi	Director	01/01/2010	-
4	Miheer Sadanand Ghotikar	Director	01/01/2010	-
5	Parika Miheer Ghotikar	Director	02/09/2021	-

COST AUDITORS:

Our Company is required to prepare and maintain the cost accounts and cost records pursuant to Section 148(1) of the Act read with rules made thereunder

The Board appointed M/s. Shekhar Joshi & Co, Cost Accountants, Mumbai (Firm Registration Number 100448), as the Cost Auditors to conduct the cost audit of the Company for FY 2024-25 at a remuneration of 0.60 Lakhs plus applicable taxes and reimbursement of out-of-pocket expenses

The Company has received consent from M/s. Shekhar Joshi & Co, Cost Accountants, to act as the Cost Auditor of your Company for FY 2024-25, along with the certificate confirming their eligibility

In accordance with the provisions of Section 148(1) of the Act and Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor is required to be ratified by the Members of the Company. Accordingly, an Ordinary Resolution, for ratification of remuneration payable to the Cost Auditor for FY 2024-25, forms part of the Notice of the ensuing AGM

RISK MANAGEMENT POLICY:

The Company has in place a mechanism to identify, assess, monitor, and mitigate various risks to key business objectives at different level. Major risks identified by the businesses and functions arc systematically addressed through mitigating actions on a continuing basis. Risk management form an integral part of management policy and is an ongoing process integrated with operation The Company manages, monitors, and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives

INTERNAL FINANCIAL CONTROL:

The Company has a proper and adequate internal control system to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition and those transactions are authorised, recorded and reported correctly. The Companys internal control framework is designed specifically to help ensure effectiveness and efficiency of operations, reliability of financial reporting and compliance of laws and regulations. The internal control is exercised through documented policies, guidelines and procedures. It is supplemented by an extensive program of internal audits conducted by trained professionals.

COMPLIANCE WITH SECRETARIAL STANDARDS:

The Company is following the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) issued by the Institute of the Company Secretaries of India (ICSI).

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF REPORT:

There are no material changes affecting the financial position of the Company between the end of the Financial Year of the Company to which the Financial Statements relate and to the date of Report

ENERGY CONSERVATION. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO ETC:

Your Company has directed its efforts to reduce energy costs by focusing on energy savings through the best optimization of operations on a day-to-day basis. Company has planned to upgrade its sewage and effluent treatment plant in coming months.

The Information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure 2.

GENERAL:

Your Directors state that no disclosure or reporting is required of the following(s):

1. The Company has not accepted any public deposits under Chapter V of the Companies Act, 2013;

2. There has been no change in the nature of business of the Company;

3. No significant or material order were passed by Regulators or Courts or Tribunals which impact the going concern status and Companys operation in future;

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

5. The Company does not have any pending application or proceeding under the Insolvency and Bankruptcy Code, 2016 (31 of 2016);

6. There was no instance of one-time settlement with any Bank or Financial Institution APPRECIATION AND ACKNOWLEDGEMENTS:

Your Directors would like to express their grateful appreciation for assistance and co-operation received from Bankers, Central and State Government Departments, Customers, Venders, shareholders and other Business Associates for their continued and valuable co-operation and support extended to the Company

We take these opportunities to place on record warm appreciation for the employees at all levels for their dedicated service and valuable contributions towards the growth of the Company and look forward to their continued commitment to achieve further growth and take up more challenges that the Company has set for the future.