HOV Services Ltd Directors Report

The Board of Directors present the 37^th Annual Report of HOV Services Limited (the "Company" or "HOVS") along with audited Financial Statements for the financial year ended March 31, 2025.

1. FINANICAL RESULTS AND OPERATIONS:

Particulars	Consolidated		Standalone
	Year Ended		Year Ended
	Mar 31,2025	Mar 31,2024	Mar 31,2025	Mar 31,2024
Income
Revenue from operations	2,246.83	1,612.36	2,246.83	1,612.36
Other income	228.31	172.39	228.31	172.39
Total Income	2,475.14	1,784.75	2,475.14	1,784.75
Expenses
Employee Benefits Expense	1,714.20	1,193.45	1,714.20	1,193.45
Finance Costs	17.20	12.87	17.20	12.87
Depreciation and Amortisation Expense	100.01	63.08	100.01	63.08
Other Expenses	164.17	149.72	164.10	149.53
Total Expenses	1,995.58	1,419.12	1,995.51	1,418.93
Profit before exceptional items from continuing opeartions	479.56	365.63	479.63	365.82
Exceptional items: Reversal of provision	-	-	-	207.00
Profit/(Loss) after exceptional items from continuing opeartions	479.56	365.63	479.63	572.82
Tax Expense :
Current Tax	(138.01)	(98.79)	(138.01)	(98.79)
Deferred Tax	7.85	(1.99)	7.85	(1.99)
Relating to earlier years	72.92	-	72.92
Profit/(Loss) after tax for the period from continuing opeartions	422.32	264.85	422.39	472.04
Discontinued Operations
Profit/(Loss) from discontinued operations before tax	(0.61)	3.77	-	-
Tax expense of discontinued operations	-	-	-	-
Profit/(Loss) after tax from continuing & discontinued operations	421.71	268.62	422.39	472.04
Other Comprehensive Income / (Loss)
Items that will not be reclassified subsequently to Profit or loss :
Remeasurement of net defined benefit plans	(14.29)	(15.50)	(14.29)	(15.50)
Changes in fair value of FVOCI equity instruments	(277.03)	(228.61)	-	-
Tax impact of Items that will not be reclassified subsequently to Profit or loss	3.98	4.30	3.98	4.30
Total Other Comprehensive Income / (Loss)	(287.34)	(239.81)	(10.31)	(11.20)
Total Comprehensive Income / (Loss) For The Period	134.37	28.81	412.08	460.84

2. Results of Operations

For the financial year ended March 31, 2025 as follows: -

a) Consolidated and Standalone Financial Performance-Overall Performance - March 2025 vs. March 2024 trong Revenue Growth: Revenue from Operations increasing by 39.35% to Rs2,246.83 lakhs in FY25 from Rs1,612.36 lakhs in FY24.

Total income grew by 38.68% from March 2024 to March 2025 from Rs. 1,784 lakhs to Rs. 2,475 lakhs.

Total Expenses: Total expenses also rose for both, from approximately Rs. 1,419 lakhs in March 2024 to Rs. 1,995 lakhs in March 2025.

Profit before exceptional items from continuing operations grew by 31% to Rs479 lakhs in March 2025 compared Rs365 lakhs in March 2024.

b) Standalone financial performance

Exceptional Items (FY24 Impact): The Standalone results included a significant exceptional gain of Rs207.00 lakhs in March 2024.

Profit/(Loss) after tax and exceptional items from continuing operations is Rs. 422.39 lakhs in March 2025 compared to Rs. 472.04 lakhs in March 2024.

Total Comprehensive Income/(Loss) showed a drop from Rs. 460.84 lakhs in March 2024 to Rs. 412.08 lakhs in March 2025.

The basic and diluted Earnings Per Share (EPS) after Exceptional item is 3.35 for the year.

c) Consolidated financial performance

Profit/(Loss) after tax and exceptional items from continuing and discounting operations is Rs. 421.71 lakhs in March 2025 compared to Rs. 268.62 lakhs in March 2024.

Total Comprehensive Income / (Loss) for the period increased from Rs. 28.81 lakhs in March 2024 to Rs. 134.37 lakhs in March 2025.

The basic and diluted Earnings Per Share (EPS) for Continued and Discontinued operation is 3.35 for the year.

3. Appropriations

(i) Dividend:

The Board of Directors to conserve available resources to pursue strategic growth opportunities for the growth of business requirements of the Company, their inability to recommend any dividend for the financial year 2024-25.

(ii) Transfer to Reserve:

No amount was transferred to Reserve during the financial year ended on March 31, 2025.

4. Subsidiary companies

The Company has below subsidiaries as on March 31, 2025. Your Company has provided the audited Consolidated Financial Statements for the year ended on March 31, 2025, together with Auditors Report and a statement containing salient features of the financial statements of Companys subsidiaries (in Form AOC-1) is forming part of this Annual Report.

i) HOVS LLC incorporated in Delaware under the laws of Unites States of America;

ii) HOV Environment LLC incorporated in Nevada State under the laws of United States of America;

iii) HOVS Holdings Limited incorporated under the Companies Ordinance of Hong Kong; and

iv) HOV Environment Solutions Private Limited incorporated in Maharashtra under Indian Company Laws.

The material changes during the year with respect to below two subsidiaries as follows:

HOVS LLC: - The Board of the Company in its meeting held on February 10, 2025 had approved the Plan of Division (Demerger) of HOVS LLC, the wholly owned subsidiary of the Company. Accordingly, the on May 8, 2025 the "Certificate of Division of HOVS LLC" was granted by the Secretary of the State of Delaware, United States of America confirming the Plan of Division (De-merger) of HOVS LLC, as per applicable statutes of host jurisdiction. The salient points of the Plan are provided in the disclosure section of the Annual Report.

HOVS Holdings Limited: -The Board of the Company in its meeting held on August 10, 2024 had approved to close/eliminate subsidiary entities which are non-operational /discontinued business, in accordance with the applicable statute of host jurisdiction. Accordingly, the HOVS Holdings Limited, a wholly owned subsidiary at HK, has been dissolved as per statute of Hong Kong, effective May 16, 2025.

5. Policy on Material Subsidiaries

The Companys wholly owned subsidiary HOVS LLC is a material subsidiary in accordance with the thresholds laid down under the SEBI Listing Regulations 2015 as amended from time to time.

The Company had adopted the policy for determining material subsidiary pursuant to the SEBI (Listing Obligation and Disclosure Requirements) (Amendment) Regulations, 2018. The said policy has been displayed on the website of the Company at https://hovsltd.com/policies-other-disclosures/

6. Investment

The Company through its wholly owned subsidiary HOVS LLC holds securities of Exela Technologies, Inc. free from any encumbrances/lien and having fair value of Rs. 216 Lakhs on March 31, 2025. The investment is a long term and strategic in nature and in the opinion of the Board expects better future performance from the investee.

7. ADR/GDR

The shareholders in their Annual General Meeting dated July 21, 2007 granted approval for proposed 15,000,000 of ADR/GDR issue. However, so far none of the underlying equity shares were issued by the Company.

8. Share Capital of the Company

The paid up share capital of the Company as on March 31, 2025 has 12,594,972 equity shares of Rs. 10/- each aggregating to Rs. 125,949,720/-.

9. Employee Stock Option Plan (ESOP)

The Company in year 2007 instituted "HOVS Stock Option Plan 2007" for its employees and for employees of its subsidiary companies as detailed below:

Plan	Shareholders Approval Date	No. of Options for employees of the Company	No. of Options for erstwhile employees of subsidiary companies	Total
"HOVS Stock Option Plan 2007"	July 21, 2007	400,000	700,000	1,100,000

There are no employees of subsidiaries eligible for ESOP during the reporting year. The information to be disclosed as per SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, is provided herewith as "ANNEXURE- A" to this report.

10. Conservation of Energy, Technology Absorption and Foreign Exchange

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 13 (3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is provided herewith as "ANNEXURE- B" to this report.

11. Human Resources

The Human Resource department of the Company follows the philosophy to maintain cordial relations with all its employees and the Company value its human resources and takes utmost care of its employees deployed. It encourages all employees to strike a perfect work life balance.

The Company had adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal Act, 2013) and the Rules made thereunder for prevention and redressal of complaints of sexual harassment at workplace. During the year there was no complaint received to the Committee constituted under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

12. Particular of Employees and Related Disclosures

The Company has no employees who received remuneration in excess of limits prescribed Under Section 197 of the Companies Act, 2013 read with the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014. Disclosure as per Section 197 (12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided herewith as "ANNEXURE- C" to this report.

13. Directors Responsibility Statement

The Directors Responsibility Statement in terms of Section 134(5) of the Companies Act, 2013 is provided herewith as "ANNEXURE- D" to this report.

14. Financial Summary and Highlights

The Companys current financial summary and highlights are presented under the Management Discussion and Analysis Report part of the Annual Report.

15. Meetings of the Board

During the financial year 4 (Four) Board Meetings were held. The details of meetings of Board of Directors are provided in the Report on Corporate Governance that forms a part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days as prescribed under the Companies Act, 2013 and as per elaxation provided from time to time during the year by the regulators. Other provisions related to Board and its Committees are stated in the Corporate Governance Report forming part of this Annual Report.

16. Directors and Key Managerial Personnel

Mr. Vikram Negi, Executive Director being liable to retire by rotation at the 37th Annual General Meeting. Mr. Negi has confirmed his eligibility and willingness for re-appointment.

Mr. Sunil Rajadhyaksha, Executive Director, existing term of five years as the whole time director will get complete on March 31, 2026. Mr. Sunil expressed his willingness for reappointment for a further period of 5 years. Accordingly, pursuant to the provisions of Section 196 (2) of the Companies Act, 2013, re-appointment for a further term of five years is being considered for approval by the Shareholders in the ensuing annual general meeting of the Company.

Key Managerial Personnel: - In accordance with the provisions of Section 203 of the Act, Mr. Parvinder S Chadha, Whole-time Director; Mr. Vikram Negi, Whole-time Director; Mr. Sunil Rajadhyaksha, Whole-time Director; Mr. Nilesh Bafna, Chief Financial Officer; and Mr. Bhuvanesh Sharma, Company Secretary are the Key Managerial Personnel of the Company. There were no changes in Company Secretary and Chief Financial Officer of the Company during the year.

17. Declarations from Independent Directors

The independent directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations. There has been no change in the circumstances affecting their status as independent directors of the Company.

18. Meeting of Independent Directors

The meeting of Independent Directors was held on January 27, 2025 to review the performance of the Board as a whole, its committees, non-independent directors, independent directors and the Chairman of the Company and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The independent directors expressed satisfaction on the quality, quantity and timeliness of flow of information between the management and the Board.

19. Familiarisation Programme

The familiarization programme was arranged by the Company during the year on January 27, 2025 for its Independent Directors with regard to their roles, rights, responsibilities with the Company. The details of the familiarization program was disclosed under Investor Relations section of the Companys website www.hovsltd.com. The Board members are provided with necessary documents/ brochures, reports and internal policies to enable them to familiarize with the Companys procedures and practices. The management of the Company, as and when required keeps updating to the entire Board including Independent Directors on the Companys operations and were also briefed regularly and or quarterly basis the changes in applicable statutes and regulations.

20. Internal Financial Controls

The Company has adequate procedures for ensuring the internal financial controls and the same are in place with reference to financial statements. The Management of the Company review the internal control system with periodic overview by the Audit Committee. The internal audit function monitors the adequacy and effectiveness of internal ontrols and provides assurance of the adequacy and effectiveness of the internal controls to the Audit Committee and the Board of Directors. The internal financial controls are tested by Internal Auditors of the Company and no reportable material weaknesses were observed therein for the reportable year.

21. Related Party Transactions

All transaction entered into by the Company with related parties are at arms length and are in the ordinary course of business and are intended to further your Companys interest. All Related Party Transactions are being placed before the Audit Committee for approval. Omnibus approvals are also obtained for transactions which are of repetitive nature. Such transactions are placed before the Audit Committee and Board (as required) for periodical review and approval.

The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are provided herewith as "ANNEXURE- E" to this report. The disclosure of Related Party Transactions as per Ind AS 24 with related parties have been provided in Notes to the Standalone & Consolidated Financial Statements respectively, forming part of this Annual Report.

The policy on Related Party Transactions as updated by the Board keeping in view of SEBI (Listing Obligations and Disclosure) Regulations, 2015, has been displayed on the Companys website at: https://hovsltd.com/docs/Policies/ 2022/HOVS%20RPTs%20Policy-April%202022.pdf

22. Corporate Governance Report

The Company adheres to Corporate Governance guidelines to fulfil its responsibilities to all its stakeholders i.e. investors, customers, vendors, government, employees. Company believes that good corporate governance enhances accountability and increases shareholder value. The report on Corporate Governance is annexed as the part of the Directors report.

23. Management Discussion and Analysis

Management Discussion and Analysis Report for the year under review, as stipulated under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented as a separate section forming part of the Directors report.

24. Code of Conduct for Board and Senior Management

The Company has adopted Code of Conduct for the Directors and Senior Management and is available on the Companys website http://hovsltd.com/code_of_conduct.html. All Directors and Senior Management personnel have affirmed their compliance with the said Code. A declaration signed by the Whole-time Director to this effect is annexed as part of the Directors Report.

25. Auditors and Auditors Report Statutory Auditors:

M/s Lodha & Co LLP, Chartered Accountants were appointed as Statutory Auditors for a period of 5 years, in 34^th Annual General Meeting held on July 20, 2022, till the conclusion of the 39^th AGM to be held in year 2027.

The Statutory Auditors Report for FY 2024-25 does not contain any qualification, reservation or adverse remark. The

Statutory Auditors of the Company have given their Unmodified Opinion(s) on the Audited Standalone Financial Results for the 4^th Quarter and Year ended March 31, 2025 and on the Audited Consolidated Financial Results of the Company for financial Year ended March 31, 2025.

Secretarial Audit Report:

M/s. J B Bhave & Co., Practicing Company Secretaries, Pune were appointed to conduct secretarial audit for the year and the Secretarial Audit Report for FY 2024-25. The report does not contain any qualification, reservation or adverse remark. The Secretarial Auditors Report is annexed herewith as "ANNEXURE- F" to this report.

During the year under review, there were no instances of frauds committed in the Company by its officers or employees, which requires reporting by the Statutory Auditors and the Secretarial Auditor.

Annual Secretarial Compliance Report:

Pursuant to requirements of Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 the Secretarial Auditors of the Company were engaged to issue the Annual Secretarial Compliance Report for year ended March 31, 2025.

No Disqualification certificate from the Company Secretary in Practice:

None of the directors of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by the SEBI Board/MCA or any such statutory authority. The Company has complied with the requirement in terms of Schedule V Part C of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, of taking a certificate to that effect from the Secretarial Auditor of the Company.

Appointment of Secretarial Auditors:

In accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2024, effective April 1, 2025 onwards, the Secretarial appointment is required to be made with approval of the shareholders of the Company for a term of five years. Accordingly, with the recommendations of the Audit Committee, the Board considered the appointment of Mrs. Ruchi Bhave, Practicing Company Secretary, a Peer Reviewed Company Secretary having Membership No.: FCS 13324 and Certificate of Practice No.: 27019, to perform the function of secretarial auditors for a term of five years commencing from FY 202526 to FY 2029-30 until the conclusion of 42^nd AGM in year 2030, is being considered for approval by the Shareholders in the ensuing annual general meeting of the Company.

26. Extract of Annual Return

As per the requirements of Section 92(3) of the Act and Rules framed thereunder, the Annual Return of the Company as on March 31, 2025 is available on the Companys website and can be accessed at https://hgmlimited.com/ uploads/2025/08/Annual-Return-Draft-2025.pdf.

27. Performance Evaluation

The Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations") stipulate the evaluation of the performance of the Board, its Committees, Individual Directors and the Chairperson. The performance evaluation has been carried out on directors individually, working of the Committees and Boards performance.

The evaluation of Independent Directors, Board, Committees and other non-independent directors was carried out as per criteria such as objective, attendance, contribution, interactive, experience, integrity, disclosures provided, ability to monitor corporate governance, domain expertise, strategic vision, industry knowledge, participation in discussions etc., prescribed by the Nomination and Remuneration Committee. The details of the same are as mentioned below.

The Board: The Board regularly spent quality time in reviewing performance of the Company and has working environment which is congenial and co-operative. It has appropriate committees and skill sets to enable its working. It receives timely information from the management to fulfill its role.

The Committees: The Board Committees are appropriately constituted with clear charter which is effective, interactive and decisive.

The Directors: All the directors invest time in understanding Company and its requirements. They bring external knowledge and participate during discussion in the meeting of Board and its various committees. Each one expresses his views on the matter of discussion in the Board/ Committee. All directors keep abreast of the updated issues that are likely to be taken up at the Board level. They are committed to fulfilment of director obligation and fiduciary responsibilities.

28. Policy on directors and senior management appointment and remuneration

The Board of Directors has framed the Nomination and Remuneration Policy which lays down the framework in relation to remuneration to Directors, Key Managerial Personnel and Senior Management of the Company. The Policy lays down criteria for selection and appointment of Board Member and also sets the criteria for selection of candidates eligible to be appointed in the senior management and other employees of the Company and also member on the Board of Directors and the Executive Directors of the Company. The nomination and remuneration policy is provided herewith as "Annexure-G" to this report. The said policy is also available on the Companys website http://www.hovsltd.com/docs/Policies/2019/Nomination%20&%20Remuneration%20Policy.pdf

29. Risk Management

The Board of Directors of the Company overview the implementation and monitor the risk management for the Company with Audit Committee having additional oversight in the area of financial risks and controls. The major risks identified by the businesses and function are addressed through mitigating actions on a continuing basis. The details of risk management have been covered in the Management Discussion and Analysis and Notes to the Financial Statements, which forms part of this report.

30. Committees of the Board Audit Committee

The Company has constituted Audit Committee, the details of the same disclosed in the Corporate Governance Report. The Board accepts all the recommendations of the Audit Committee.

Nomination & Remuneration Committee

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The said Policy is annexed as part of the Directors report.

Stakeholders Relationship Committee

The Company has constituted the above committee to resolve the grievances of the shareholders. The details of the committees along with their charters is annexed as part of this Boards report.

31. Particulars of Loans, Advances and Investments

The particulars as required pursuant to Section 186 (4) of the Companies Act, 2013, read with Companies (Meetings of Board and its Powers) Rules, 2014 and pursuant to Regulation 34(3) and Schedule V Part A of SEBI LODR, 2015, are mentioned in the Notes to Account to the Financial Statements of the Annual Report. The particulars of loans, guarantees and investments as per Section 186 of the Act by the Company, if any have been disclosed in the financial statements.

32. Secretarial Standards

The proper systems are in place to ensure compliance with applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

33. Whistle Blower Policy

The Board of Directors of your Company had adopted the Vigil Mechanism/Whistle Blower Policy in order to establish a mechanism for directors and employees to report genuine concerns or grievances about unethical behavior, actual or suspected frauds or violation of the Companys Code of Conduct. It provides necessary safeguards for protection of employees from reprisals or victimization, for whistle-blowing in good faith. In line with the commitment of Company to the highest possible standards of ethical, moral and legal business conduct and its commitment to open communication and make provisions for direct access to the Chairman of the Audit Committee in appropriate and exceptional cases. During the year under review, the Company has not received any complaints under the said mechanism. The Whistle Blower Policy of the Company has been displayed on the Companys website.

34. Reconciliation of Share Capital Audit

In accordance with the Securities & Exchange Board of India (SEBI), quarterly audit of the Companys share capital is being carried out by an independent external auditor with a view to reconcile the total share capital admitted with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and held in physical form, with the issued and listed capital. The Auditors Certificate in regard to the same is submitted to BSE Limited and National Stock Exchange of India Limited and is also placed before Stakeholders Relationship Committee and the Board of Directors of the Company. The details of the share capital are provided in part of Corporate Governance Report.

35. General

a) The statement relating to risk management policy and identification of risk elements are covered under Management Discussion Analysis Report as annexed with this Report.

b) There are no adverse material changes or commitments occurred after March 31, 2025 which may affect the financial position of the Company or may require disclosure.

c) On following points no reporting or disclosure is required as there were no transactions on these items during the financial year under review:

(i) There were no loans, guarantees and investments made;

(ii) Details relating to deposits covered under Chapter V of the Companies Act, 2013;

(iii) No significant and material orders passed by the regulators or courts or tribunals which impacted the going concern status and operation of the Company;

(iv) Issue of equity shares with differential rights as to dividend, voting or otherwise;

(v) Issue of sweat equity shares; and

(vi) None of the whole-time directors of the Company received any remuneration or commission from the subsidiaries of the Company.

36. Acknowledgement

Your Directors would like to place on record their sincere appreciation for co-operation and support received from the Government of India, Government of Maharashtra, Reserve Bank of India, Registrar of Companies, Pune, other local governmental bodies, the National Stock Exchange, the Bombay Stock Exchange, Bankers of the Company and Shareholders during the financial year.

Your Directors express their sincere appreciation for the efforts made by employees at all levels for their hard work, co-operation and support extended to your Company during the financial year and Your Directors takes this opportunity to express its deep gratitude for the continued co-operation and support received from its each valued shareholders.

For and on behalf of the Board of Directors

Parvinder S Chadha

Chairman & Executive Director

(DIN:00018468)

Date: May 30, 2025