Kalyani Forge Ltd

The Board of Directors of your Company are pleased to present the 45th Annual Report together with the Audited Statement of Accounts of Kalyani Forge Limited ("the Company") for the year ended March 31, 2024.

I. Financial Performance:

The summarized standalone results of your Company are given below.

Rs. in Lakhs

2. Summary of Operations:

During the year, the net revenue from operations of your Company for FY 2023-24 decreased to Rs. 24,066.32 Lakhs against Rs. 27,282.74 Lakhs for the FY 2022-23. Your Company's Profit after tax stood at Rs. 455.01 Lakhs as against Loss of Rs. 18.37 Lakhs for FY 2022-23.

3. Change in the nature of business, if any:

There is no change in the nature of the business of the Company during the year.

4. Reserves:

The Company has not transferred any amount to General Reserves for the year under review.

5. Dividend:

Your Directors are pleased to recommend for approval of members a dividend of Rs. 3.00 per equity share (30%) at the face value of Rs.10/- per share for the Year ended 31st March, 2024.

6. Capital/ Finance:

During the year, the Company has not issued/allotted equity or preference shares. As on 31st March, 2024, the issued, subscribed and paid-up share capital of your Company is at Rs.3,63,80,000/-, comprising 36,38,000 equity shares of Rs.10/- each.

7. Particulars of Loans, Guarantees or Investments

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013, are given in the notes to the Financial Statements. (Refer Note 3 of the Financial Statements)

All contracts/ arrangement/ transactions entered by the Company during the Financial Year with related party were in the ordinary course of business and on arm's length basis. Such transaction forms part of the notes to the financial statements provided in the Annual Report.

During the year, the particulars of any contract / arrangement / transaction with related parties which could be considered material entered into in accordance with the policy of the Company on materiality of related party transactions which is available on the Company's Website: www.kalyaniforge.co.in

The summary of related party transaction in Form AOC-2 is enclosed as Annexure 1. Related Party disclosures as per Ind AS 24 have been provided in Note 30.7(b) to the financial statements.

9. Fixed Deposits:

Your Company has not accepted any deposits from public, Therefore, details relating to deposits covered under Chapter V of the Companies Act, 2013 are not applicable to the Company.

10.Material Events Occurring after Balance Sheet Date

There were no material changes, events and commitments affecting the financial position of your Company between the end of the Financial Year and the date of this report.

11.Annual Return:

Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Annual return in Form MGT -7 as on March 31, 2024 will be placed on the Company's website available at the following link.

https://www.kalyaniforge.co.in/investors/annual-reports/

12.Transfer of Amounts to Investor Education and Protection Fund:

Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the declared dividends, which are unpaid or unclaimed for a period of seven (7) years and the shares thereof, shall be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.

13.Details of Board meetings:

The Board met Seven times during year from 1st April 2023 to 31st March 2024. The intervening gap between the meetings was within the period prescribed under Act.

14.Composition of Board and its attendance:

The composition of the Board of Directors as on 31st March, 2024 and attendance of members in the meetings held during the financial year 2023-24 are as under:

15.Committees of Board:

The composition of the Committees of the Board of Directors has been detailed in the Corporate Governance annexure to this report.

16.Declaration by Independent directors:

Pursuant to the provisions of section 149 of the Companies Act, 2013 (‘the Act"), Mr. Ajay Tandon, Mr. Jeevan Mahaldar, Mr. Abhijit Sen, Mr. Pradip P. Nadkarni & Mr. Adit Rathi are the independent directors and have submitted declarations that each of them meets 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 no change in the circumstances affecting their status as Independent Directors of the Company. Further Mr. Adit Rathi & Mr. Pradip P. Nadkarni ceased to be Independent Director of the Company w.e.f. 30th January, 2024 and 31st March, 2024 respectively.

17.Directors and Key Managerial Personnel:

As per the provisions of Companies Act 2013, Mrs. Rohini G. Kalyani who retired by rotation were reappointed at the Annual General Meeting of the Company held on 20th September 2023.

Based on his long tenure and expertise as Executive Director of Kalyani Forge and in line with the leadership succession plan deliberated by the NRC of the Company, Mr. Viraj G. Kalyani, was appointed as Managing Director of the Company for the period of Five years w.e.f. 11th August, 2023 to 10th August, 2028, who shall not be liable to retire by rotation.

The members have approved the term of Mr. Pradeep Nadkarni, Independent Director, in its 44th Annual General Meeting held on 20th September, 2023, for continuation as an Independent Director of the Company up to the conclusion of his term as an independent director notwithstanding that he attains the age of 75 years.

Mr. Adit Rathi tendered his resignation from the post of Independent Director of the Company with effect from closure of business hours on 30th January, 2024. The Board at its meeting held on 13th February, 2024, accepted the resignation and put on record its sincere appreciation and expressed their gratitude for sincere contributions made by Mr. Adit

Rathi during his association with the Company as an Independent Director which given the company growth trajectory.

Material changes in the Board structure which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report

The term of Mr. Pradeep Nadkarni, as an Independent Director has expired on 31st March, 2024, the Board has expressed their gratitude and acknowledged his sincere efforts towards the wellbeing and stabilized growth of the Company during his tenure.

The Board at its meeting held on 27th April, 2024, approved the appointment of Mr. Ajay Tandon (DIN: 00128667) as Independent Director of the Company Mr. Ajay Tandon, has Strong Academic Background of Engineering and rich work experience including Executive and Non-Executive roles.

The Company has appointed Mr. Jeevan Mahaldar (DIN: 00137467) as Additional Director in the capacity of Independent Director w.e.f. May 30, 2024. Mr. Jeevan Mahaldar has Academic Background of Master of Business Administration along with the rich experience of over 26 years' in automotive industry, 5 years in Consumer Durable Industry and 2 years in Light Engineering Industry which will benefit to the Company in near future.

Mr. Aniruddha Hubalikar, tendered his resignation from the post of Company Secretary and Compliance Officer of the Company w.e.f. 9th April, 2024. The Board placed same on record and took the note of the same.

18.Formal Annual Evaluation:

SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation framework. Also, the Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its Committees and individual Directors. In addition, Schedule IV of the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated.

In pursuance of above, the Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the Non- Executive Directors and Executive Director.

The Company commenced with the review of the best practices prevalent in the industry and evaluation of Board members. On the basis of review and the Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors, a process of evaluation was followed by the Board for its own performance and that of its Committees and individual Directors.

At a Separate meeting of Independent Directors held on 23rd February, 2024, performance evaluation of Chairperson, Non- Independent Directors, and the Board of Directors was carried out by Independent Directors which has also reviewed the adequacy of the flow of information between the Company Management and Board.

The detailed programme for familiarization of Independent Directors with the Company, their roles, rights and responsibilities in the Company, nature of business, business model of the Company, etc. was undertaken by the Company.

A formal evaluation of the performance of the Board, its Committees, the Chairman and the individual Directors was carried out. Led by the Nomination & Remuneration Committee, the evaluation was carried out using individual questionnaires. As part of the evaluation process, the performance of Non-Independent Directors, the Chairman and the Board was conducted by the Independent Directors. The performance evaluation of the respective Committees and that of Independent and Non-Independent Directors was done by the Board excluding the Director being evaluated.

19.Nomination and Remuneration Policy:

The Nomination and Remuneration Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall formulate the criteria for appointment of Directors on the Board of the Company and persons holding Senior Management positions in the Company, including their remuneration and other matters as provided under Section 178 of the Act and Listing Regulations. The Policy is also available on the Company's website at: https:// www.kalyaniforge.co.in/investors/corporate-information/

20.Holding, Subsidiaries, Associates or Joint Venture Companies:

During the period under review the Company does not have any holding, Subsidiary, Associates or Joint Venture company.

21.Statutory Auditors and their Report:

The Board appointed M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants (Firm Registration No. 104607W/W100166) as a statutory auditors of the Company, w.e.f. 4th July, 2023. The said appointment was than ratified the Members of the Company in last Annual General Meeting held on 20th September, 2023 and appointed M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants for the term of Five years i.e. upto the Annual General Meeting to be held in 2028.

The Notes to the financial statements referred in the Auditors Report are self-explanatory. In the Statutory Auditor's Report there are following qualifications to which suitable and sufficient comments are provided by the Board of Directors. under Section 134 of the Companies Act, 2013. The Auditors' Report is enclosed with the financial statements in this Annual Report.

Disclaimers by the Statutory Auditors and Management Responses are as follows:

"The Company is in the process of refining its stock valuation process by updating the standard rates of material, labour and overheads based on the current prevailing rates and relevant data. As the said process is not completed, the consequential financial impacts, if any, have not been considered in the Statement. The quantities and valuation of inventories amounting to INR 5678.06 Lakh as at June 30, 2024 and the consequential impact thereof on the cost of raw materials and components consumed and the changes in inventories of finished goods, work in progress and stock in trade amounting to INR 3012.57 Lakh and INR (78.68) Lakh respectively are as represented by the Company."

Management Response: The Company has completed stock revaluation for A Class items and is taking due precautions in validating standard costs of the B and C class items considering the volume and variety of the stock kept by the

Company. However, the Management is confident that the current quantities and valuations are reliable.

"Balance of Trade receivables, Trade payables are subject to confirmations, reconciliations, and consequential adjustments, if any."

Management Response: the Company has received confirmations for a significant portion of the value of receivables and payables. It is in discussion with remaining vendors and suppliers and would complete the same in the first quarter of 2024-25.

"We have been given to understand that the Company is in the process of updating the relevant documentation for internal financial control over financial reporting. In the absence of necessary documentation, we could not determine if the Company has established adequate internal financial control with reference to financial results and whether such internal financial controls were operating effectively as at June 30, 2024."

Management Response: The Company and management is of the opinion that, the Company has adequate financial control over financial reporting and taking required steps in improving and implementing the financial control policies from time to time to have better reporting system in place. The IFC system is updated in line with latest requirements and testing of controls for the current financial year is also in process

22.Internal financial controls:

The Board is responsible for establishing and maintaining adequate internal financial control as per Section 134 of the Act. The Board has laid down policies and processes in respect of internal financial controls and such internal financial controls were adequate and were operating effectively. The internal financial controls covered the policies and procedures adopted by your Company for ensuring orderly and efficient conduct of business including adherence to your Company's policies, safeguarding of the assets of your Company, prevention and detection of fraud and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information

23.Cost Audit:

Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014 and as per the Cost Audit Orders, the cost audit records maintained by the Company in respect of its Forging Business are required to be audited.

In view of the same and in terms of the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, M/s. R.C.K & Co, Cost Accountants (Firm Registration No. 002587), Mr. Rahul Chincholkar, Partner (F-27063) have been appointed as Cost Auditors to conduct the audit of cost records of your company for the financial year 2024-25. The remuneration proposed to be paid to them requires ratification of the shareholders of the Company. In view of this, your ratification for payment of remuneration to Cost Auditors is being sought at the ensuing Annual General Meeting.

In accordance with the provisions of Section 148(1) of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, the Company has maintained cost accounts and records.

24.Secretarial Audit:

In terms of Section 204 of the Companies Act, 2013 and Rules made thereunder, Mr. Nitin Prabhune (Membership No.

FCS 6707) Company Secretary in practice has been appointed as Secretarial Auditor of the Company. The report of the Secretarial Auditors is enclosed as Annexure 2 to this report. There are no qualifications, reservations, adverse remarks or disclaimers made by the Secretarial Auditors in their report.

25.Reporting of fraud by auditors:

During the year under review, the Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act to the Audit Committee.

26.Secretarial Standards

The company has complied with the revised Secretarial Standards on meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2).

27.Significant and Material Orders Passed by the Regulators or Courts

There are no significant material orders passed by the regulators and courts which would impact the going concern status of the company.

28.Human Resources:

Your Company treats its "human resources" as one of its most important assets.

Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company's thrust is on the promotion of talent internally through job rotation and job enlargement.

29.Risk Management Policy:

The Company has implemented a structured risk management process to identify, prioritize, mitigate, and monitor risks. The management is responsible for reviewing the risk management plan and ensuring its effectiveness. Major risks identified by the businesses and functions are systematically addressed through mitigating actions plan on a continuing and rigorously.

The Company has adopted various measures concerning the development and implementation of a Risk Management

Policy after identifying the elements of risks, which in the opinion of the Board may threaten the Company. To have management on same pathway, the Company has developed and implemented the Risk Management Policy and the Audit Committee of the Board reviews the same periodically. The detailed Risk Management Policy is available on

Company's website.

30.Management Discussion and Analysis:

Management Discussion and Analysis comprising an overview of the financial results, operations / performance and the future prospects of the Company form part of this Annual Report.

31.Corporate Social Responsibility (CSR):

The Company has adopted the CSR policy pursuant to Sec 135 of the Companies Act, 2013. The disclosure as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure 3. The detailed Corporate Social Responsibility Policy is available on Company's website.

Highlights of Corporate Social Responsibility Policy:

• The Company proposes to undertake CSR projects and programmes in respect of the activities stated below with a preference to implement these projects and programme in the areas in which it operates:

• Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation and making available safe drinking water;

• Promoting education including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects.

• Promoting gender equality, empowering women, setting-up homes and hostels for women and orphans; setting up old age homes, day care centers and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups.

• Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water.

• Protection of national heritage, art and culture including restoration of buildings and sites historical importance and works of art; setting-up public libraries, promotion and development of traditional arts and handicrafts.

• Measures for the benefit of armed forces veterans, war widows and their dependents.

• Training to promote rural sports, nationally recognized sports, Paralympics Sports and Olympic Sports.

• Contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women.

• Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government.

• Rural development Projects.

32.Highlights on Company's policy on Sexual Harassment:

Your Company's always aims to create an open and safe workplace for every employee to feel empowered, irrespective of gender, sexual preferences, and other factors and has zero tolerance for sexual harassment at workplace and has 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 (POSH Act) and the Rules made thereunder. Not only women but entire staff, persons associated (permanent, temporary, contractual and trainees) as well as any visiting faculty to the Company's office premises or service providers are covered under this Policy. Your Company has gone beyond the intention of the law and has made this policy gender-neutral. Your Company follows this practice as a part of equal employment opportunity including gender equality.

During the year under review, physical as well as video-based training on POSH awareness was conducted for all the employees at factory premises as well as office premises and is being hosted on the employee portal to create greater awareness on this subject. During the year under review, the Company did not receive any complaints from any party as mentioned hereinabove and disclosure in this regard are attached in Annexure - 4.

33.Particulars of Employees:

Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, statement of particulars of employees is annexed as Annexure 5.

34.Details of establishment of vigil mechanism for directors and employees:

Your Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behavior. Pursuant to the provisions of Section

177(9) of the Act, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Listing Regulations and in accordance with the requirements of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Board of Directors had approved the Policy on Vigil Mechanism/Whistle Blower and the same has been hosted on the website of the Company. Over the years, the Company has established a reputation for doing business with integrity and displays zero tolerance for any form of unethical behavior. The mechanism under the Policy has been appropriately communicated within and outside the organization. This Policy inter-alia provides direct access to the Chairperson of the Audit Committee. It is affirmed that no personnel of the Company have been denied access to the Audit Committee During the year under review, the Company has not received any complaints. The details of establishment of vigil mechanism/ whistle blower policy for directors and employees to report genuine concerns are available at the website of the company at https://www.kalyaniforge.co.in/investors/corporate-information/.

35.Corporate Governance Certificate:

The Compliance certificate from the Auditors regarding compliance of conditions of corporate governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed with the report.

36.Details of conservation of energy, technology absorption, foreign exchange earnings and outgo, the particulars relating to the conservation of energy, technology absorption, foreign exchange earnings and outgo:

The particulars relating to the conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014 are appended as Annexure 6 to this report.

37.Directors' Responsibility Statement:

Pursuant to the requirement clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, your Directors confirm that:

• in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; if any

• 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 year;

• the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

• the directors had prepared the annual accounts on a going concern basis; and

• 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.

• the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

38.Acknowledgement:

Your Directors' place on record their appreciation for employees at all levels, who have contributed to the growth and performance of your Company.

Your Directors also thank the clients, vendors, bankers, shareholders and advisers of the Company for their continued support. Your Directors also thank the Central and State Governments, and other statutory authorities for their continued support

For and on behalf of the Board

Rohini G. Kalyani

Executive Chairperson

(DIN: 00519565)

Pune, May 30, 2024

Annexure 1

Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm's length basis:

Not Applicable as there are no related party transactions during the year which were not on arm's length basis

2. Details of material contracts or arrangement or transactions at arm's length basis:

During the Financial Year 2023-24, all the transactions entered into with related parties were at arm's length.

For and on behalf of the Board

Rohini G. Kalyani

Executive Chairperson

(DIN: 00519565)

Pune, May 30, 2024