M M Forgings Ltd

The Directors have the pleasure in presenting the 78^th Annual Report and the audited accounts of the Company for the year ended 31 March 2024.

1. FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2024

(? in lakhs)

2. DIVIDEND AND FINANCIAL RESULTS

(? in lakhs)

Note: Standalone figures of the previous year have been restated to give effect to the Scheme of Amalgamation as approved by NCLT, with appointed date as 01 April 2023, between the Company and its wholly-owned subsidiary namely, Cafoma Autoparts Private Limited.

The Directors at their meeting held on 29 May 2024 declared an interim dividend of ?8/- per share (80%) on 2,41,40,800 equity shares of face value of ?10/- each, absorbing a sum of ?19.31 Cr. The Directors do not recommend any final dividend for the year 2023-24. The dividend pay-out is in accordance with the Company's Dividend Distribution Policy.

3. SHARE CAPITAL

There was no change in the paid-up share capital of the Company during the year.

The Honourable National Company Law Tribunal (NCLT) has approved the scheme of amalgamation of Cafoma Autoparts Private Limited (Cafoma), the Company's wholly-owned subsidiary with the Company vide their order dated 03 May 2024, resulting in consolidation of Authorized share capital of Cafoma with the Company. The Company's authorized share capital has been increased to ?39,00,00,000, which is divided into 3,90,00,000 Equity Shares of ?10/-.

4. HIGHLIGHTS OF THE COMPANY'S OPERATIONAL PERFORMANCE

4.1. The Revenue from operations for the first time has crossed the ?1,500 Crore mark and stood at ?1,553 Crores as against ?1,429 Crores in FY23, registering a growth of 9%.

4.2. Operating EBITDA for the first time has crossed ?300 Crores and stands at ?314 Crores as against ?275 Crores, thereby improved by 14% over the last year.

4.3. PBT for FY24 grew by 13% at ?199 Crores as compared to ?176 Crores reported during previous year.

4.4. PAT for the current year grew by 15% at ?145 Crores as compared to ?126 Crores reported during the year ended March 2023.

4.5. Domestic sales, during the year stands at ?948 Crores and Export sales at ?563 Crores. Export sales grew by 15% during FY24.

4.6. The Company continues to be a net foreign exchange earner. The net foreign exchange earnings during the current year were ?454.11 crores.

4.7. The Company has retained its ISO 9001 and TS 16949 Certification for its Quality Management.

4.8. In April 2024, the Company has completed 50 years of forging operations. To commemorate this golden jubilee year, the Board of Directors have proposed a 1:1 bonus issue of shares, subject to approval of shareholders.

4.9. Further, to reward the shareholders on this occasion, dividend is increased to ?8 per share.

5. SCHEME OF AMALGAMATION OF WHOLLY OWNED SUBSIDIARY WITH THE COMPANY

Pursuant to a Scheme of Amalgamation under Section 230 to 232 of the Companies Act, 2013 (Scheme) the Company's wholly owned subsidiary viz., Cafoma Autoparts Private Limited (Cafoma) has amalgamated with the Company. The Scheme received approval from the NCLT, Chennai Bench on 03 May 2024. The Appointed Date for the said amalgamation was 01 April 2023 and the Effective Date pursuant to the regulatory filing with the Ministry of Corporate Affairs is 27 May 2024.

Consequent to the Amalgamation, investments in the share capital of the Transferor Company appearing in the books of account of the Company and its wholly-owned subsidiary stands cancelled. All the assets, liabilities, employees, contracts, etc., of Cafoma is transferred to the Company and Cafoma stands dissolved, without winding up. The authorized share capital of Cafoma has been consolidated with the Company, resulting in an increase of ?9,00,00,000 in the authorized share capital of the Company.

6. RECOMMENDATION OF BONUS ISSUE

Taking into consideration the performance and the long term prospect of the Company and to commemorate the completion of 50 years of forging operations, the Board of Directors, at their meeting held on 29 May 2024, had recommended a bonus issue of shares at a ratio of 1:1 by capitalizing a part of the amount standing to the credit of General Reserve account or such other account, subject to the approval of shareholders, other stakeholders and statutory bodies.

The subject is placed at the notice of the 78^th AGM for the approval of the shareholders. The above bonus issue would encourage the participation of small investors, increase the liquidity and expand the retail shareholders' base of the Company. The Company is confident of servicing the enlarged capital base and is in the process of obtaining necessary approvals from the Stock Exchanges. The overall bonus procedure will be completed by 28 July 2024.

7. MANAGEMENT DISCUSSION AND ANALYSIS:

Economic Overview - Global

The Global Economy remains remarkably resilient, with growth holding steady as inflation returns to target. The journey over the past few years has been eventful, starting with supply-chain disruptions in the aftermath of the pandemic, the Russia-Ukraine war that triggered a global energy and food crisis, and a considerable surge in inflation, followed by a globally synchronized tightening of monetary policy.

Global economic activity continues to soften, amid the effects of tight monetary policies, restrictive financial conditions and weak global trade growth. As global inflation descended from its mid-2022 peak, economic activity grew steadily, defying warnings of stagflation and global recession. Global growth, estimated at 3.2% in 2023, is projected to continue at the same pace in 2024 and 2025. The forecast for 2024 is revised up by 0.1% point from January 2024.

Global headline inflation is expected to fall from an annual average of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies. The latest forecast for global growth five years from now at 3.1% is at its lowest in decades.

Risks to the global outlook are now broadly balanced. On the downside, new price spikes stemming from geopolitical tensions, including those from the war in Ukraine and the conflict in Gaza and Israel, could, along with persistent core inflation where labour markets are still tight, raise interest rate expectations and reduce asset prices. A divergence in disinflation speeds among major economies could also cause currency movements that put financial sectors under pressure. High interest rates could have greater cooling effects than envisaged as fixed-rate mortgages reset and households contend with high debt, causing financial stress.

Businesses, across geographies, would need to be vigilant and exhibit flexibility, working with dynamic operating models to adapt to the evolving conditions while simultaneously building resiliency in their business models to ensure sustained performance. Intensifying supply-enhancing reforms would facilitate inflation and debt reduction, allow economies to increase growth toward the higher pre-pandemic era average and accelerate convergence toward higher income levels. Multilateral cooperation is crucial to mitigate geo-economic fragmentation and climate change costs, accelerate green energy transition and facilitate debt restructuring.

Economic Overview - India

India's growth continues to be resilient despite some signs of moderation in growth. A conducive domestic policy environment and the Government's sustained focus on structural reforms have kept India's economic activity robust despite global headwinds. Emerging as a beacon of resilience in the global economy, despite a drop in growth rate projections, India continues to be the fastest-growing economy in the world.

Not just in science where India is taking big leaps, India has been showing both resilience as well as progress despite all risks and uncertainties in the global economic landscape. Headline inflation has, on average, moderated although it remains volatile. The financial sector has been resilient, strongest in several years and largely unaffected by global financial stress in early 2023.

Globally, India's 2023 G20 presidency has demonstrated the country's important role in advancing multilateral policy priorities. The growth was underpinned by strong investment activity bolstered by the government's capex push and buoyant private consumption, particularly among higher income earners. This growth is further driven by factors such as strong tax revenue collections, increased government capital spending, firm domestic demand and growth in manufacturing sectors.

Growth in India is projected to remain strong at 6.8% in 2024 (F25) and 6.5% in 2025 (F26) with the robustness reflecting continuing strength in domestic demand and a rising working-age population. The consumer price inflation is declining from an average of 5.4% in FY24 to 4.6% in FY25 and further to 4.2% in FY26. (source: IMF)

Indian Automotive Industry:

The Indian automotive market plays a significant role in the above contribution toward the expansion and growth. India's automotive industry has shown healthy production figures and significant FDI inflow, positioning itself as a global automotive hub with a promising future. India holds a strong position in the international heavy vehicles arena as it is the largest tractor manufacturer, second-largest bus manufacturer and third largest heavy trucks manufacturer in the world. With strong backward and forward linkages, it is the key driver of growth, significantly contributing to the Indian economy and provides employment to millions of people directly and indirectly.

Global supply disruption remains the major threat for the automotive industry's growth. It would also cause recurrent commodity price volatility, increasing fiscal pressures and could further, domestically, reignite inflationary pressures. On the upside, stronger than expected consumer demand and private investment would assist and raise growth.

The contribution of this sector to the national GDP has risen to about 7.1% in FY24 from 2.77% in 1992-93. The growth of the Indian automotive market can be credited to several factors including increasing shifts to urban areas, growing middle-class population and an increasing focus on green mobility solutions. The latter trend has driven Indian automakers to make starting strides in the production of EVs and hybrid vehicles, all to preserve environmental health.

India's electric vehicle (EV) sector is experiencing rapid growth, fuelled by government incentives, rising environmental concerns and technological advancements. The EV market is expected to grow at a CAGR of 49% between 2023-2030 and the industry would create 5 Million direct and indirect jobs by 2030. The transformative boom in India's EV Industry is not only indicative of its domestic prowess but also has significant implications on the global landscape.

Key segment analysis: Commercial Vehicles (CV)

The Indian automotive industry, despite challenges, kept its grit intact and witnessed growth across different segments during FY24, be it the Passenger Vehicle (PV) or Commercial Vehicle (CV) segment, with the latter particularly witnessing good growth in the Medium & Heavy Commercial Vehicles (MHCV) category. The key drivers contributing to the growth and expansion of the CV market in India include strong replacement demand, better financing options, growing economy, infrastructural development and improving road connectivity.

The commercial vehicle segment is highly interconnected with other sectors, especially the manufacturing sector and consequently, any growth or development that occurs in these areas will lead to the growth of the commercial vehicle sector in India. The CV Segment in India is undergoing rapid technological advancements. The electrification phase is quickly getting popular among Commercial Vehicle OEMs due to cost reduction benefits that they provide in transportation sectors.

The trend towards electrification, including battery electric vehicles and hybrid electric vehicles poses challenges for traditional internal combustion engines, necessitates investments in alternative powertrain technologies and infrastructure to remain competitive in the evolving market. The CV Industry in India is also undergoing tough challenges including volatile raw material and fuel prices, global supply chain disruptions, increasing interest cost, reduction in export market.

In the Indian markets, CV sales increased from 9,63,000 to 9,67,878 Vehicles and total PV Sales increased from 38,91,000 to 42,18,746 vehicles during FY24 as compared to the previous year. Sales of MHCV increased from 3,59,000 to 3,73,194 Vehicles. Globally, container availability has improved but with headwinds of geopolitical tensions including the Ukraine war, growth in export markets continues to be a challenge.

The CV Segment plays a significant role of MMF in FY24 with overall sales of 81%. Passenger car segment constitutes 10% and others 9%. Further, with increase in share of business in Europe and a positive outlook for class 8 trucks in North America since Q3FY23, the market conditions have turned significantly positive and the segment continues to do well in North America and Europe in FY24. US Class 8 truck sales recorded at 3,26,992 units in FY24 with slight increase in number as compared FY23 sales. (Source: SIAM data, ACT Research).

Currency movement: [USD vs INR1

Despite global challenges, the INR value remains at 83 level during the FY 2023-24. The Indian Rupee is expected to be under pressure in F25 also.

M M FORGINGS - Achievements in FY24

Despite various geopolitical tension, the following were achieved during FY24:

Changes in steel prices which are in line with international markets are generally being passed on to the customers as is the industry practice. The Company is focusing on launching new products to take advantage of the forging capacities created in the lasi few years. The company is leveraging growth in established products and diversifying its EV segment strategy to mitigate risks and capitalize on the increasing demand.

Key Financial Ratios:

Human Resources and Industrial Relations

1. Our Company continues to focus on the development of its human resources to improve its performance. As on 31 March 2024, the Company had 3,722 employees. It is their invaluable contribution that has primarily resulted in our Company's position of strength in the industry.

2. The Company's HR development focuses on creating a safe work environment, continuously evolving recognition and reward systems, consistent communication and skill and training to meet customer needs.

3. Every year, each plant of the Company celebrates Founder's Day in a family atmosphere with all employees and their households. During FY24, the Company celebrated Founder's Day in a grand manner.

Health, Safety and Environment

1. The Company follows a policy of zero tolerance towards accidents. Wherever possible, visible controls and fail-safe systems are provided to ensure prevention of accidents. Safety is made an integral part of the system through notifications being displayed to the

operators and promoting safety awareness. Regular communication, periodic reviews of practices and training, play a vital role in maintaining safety standards.

2. All the Company's manufacturing facilities comply with occupational health and management safety systems. The Company ensures compliance with all pollution control regulations. Adequate pollution control equipment has been installed to treat effluents and to control air pollution.

Risk Management

1. The Company is a leading manufacturer of automotive components. Automotive industry is subjected to cyclical variations in performance and is very sensitive to policy changes. The market is very competitive. Prices of raw materials change based on supply and demand. Margins remain under constant pressure. Any steep reduction in off-take exposes the Company to high fixed costs.

2. A considerable portion of the customers of the Company are situated outside of India. Hence, demand for the Company's product is subj ect to the health of the global economy.

3. The war in eastern Europe poses significant risk in global geopolitical stability.

4. Further, volatility in the raw material prices, hike in interest rates and prospect of significant demand reduction are risks to be considered in the coming months.

5. Consistent good product quality is essential for sustaining healthy business relations.

6. The Company has spread its risks by increasing the geographic spread of its customer base. The Company proposes to improve capacity utilization in its existing facilities. Working capital management will receive high priority.

7. Risk Management Committee (RMC) has been formed effective 21 June 2021 and was reconstituted twice in FY24 inducting additional Independent Director.

8. RMC shall meet minimum of twice a year.

9. The responsibilities of RMC include formulating risk management policy, implementation of the policy, monitor, evaluate risks, device appropriate methodology, processes and systems.

M M FORGINGS - forging ahead with Manufacturing Excellence

Our goals in the coming months:

1. Focus on improving sales keeping with market conditions.

2. Utilizing the production capacity of 1,26,000 Tons

3. Actively seeking new products and new customers and taking appropriate measures for cost control, particularly on reducing energy consumption and improving productivity.

4. Enhance IT systems with the continued development of the ERP system in place.

5. Continue the evolution into green sources of energy in the coming months.

6. Reduce the impact on the environment.

7. Concentrate on diversification strategy in order to capitalize on the increasing demand.

Sources: IMF World Economic Output, The Economist, SIAM data, Act Research.

8. INDIAN ACCOUNTING STANDARD (IND AS) IFRS CONVERGED STANDARDS

Pursuant to the notification of the Companies (Indian Accounting Standard) Rules, 2015 by the Ministry of Corporate Affairs (MCA) on 16 February 2015, the Company has adopted Indian Accounting standards (IND AS).

9. EXPENSES MADE MORE THAN 10 % OF THE TURNOVER:

Raw Material - ?773.87 Crores (49.80 %)

10. TRANSFER TO RESERVE

A sum of ?124.00 Crores has been transferred to General Reserve.

11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has made advance to its Subsidiary Companies with outstanding as on 31 March 2024:

DVS Industries Private Limited (wholly-owned subsidiary) - ?96.31 Crores Suvarchas Vidyut Private Limited (wholly-owned subsidiary) - ?10.44 Crores and Abhinava Rizel Private Limited - ?15.21 Crores.

The loans were utilized by the subsidiaries for their principle business activities, repayable at prevailing rates. The details of the investments made by the Company are given in the notes to the financial statements.

12. DIRECTORS & KEY MANAGERIAL PERSONNEL

12.1. Retirement of Independent Directors

In the AGM held on 11 July 2018, Shri. N. Srinivasan, Shri. V. Vaidyanathan and Shri. A. Gopalakrishnan, were appointed as Independent Directors, for the second term of five years, up to 31 March 2024. In accordance with the provisions of Section 149(10) & (11) of the Companies Act, 2013 read with Regulation 25(2) of Listing Regulations, the tenure of Shri. N. Srinivasan, Shri. V. Vaidyanathan and Shri. A. Gopalakrishnan (each with two term of five years) as Non-Executive Independent Directors of the Company concludes on 31 March 2024. The aforesaid Directors cease to hold the Directorship and respective Committee Membership / Chairmanship effective 31 March 2024.

Shri. N. Srinivasan has served on the Board for a total of 30 years since 21 February 1994 and as a Chairman since 06 November 2012. Shri. V. Vaidyanathan has served on the Board for a total of 45 years since 31 March 1979 and Shri. A. Gopalakrishnan has served on the Board for a total of 11 years since 29 October 2012.

The Board of Directors in their meeting held on 15 March 2024 extended their sincere appreciation to the aforesaid Directors for their guidance and long term association with the Company.

12.2. Appointment of Chairman for Shri. Vidyashankar Krishnan

The Board of Directors at their meeting held on 15 March 2024 appointed Shri. Vidyashankar Krishnan (DIN:00081441) as the Chairman of the Board, effective 01 April 2024. Shri. Vidyashankar Krishnan takes the position as Chairman and Managing Director of the Company, effective 01 April 2024. The Board extended their sincere appreciation to Shri. N. Srinivasan for his contribution and long association for 11 years with the Company as Chairman / Independent Director.

12.3. Directors' Appointment / Re-appointment

The following are the Directors appointment / re-appointment during the year 2023-24:

Shri. Vidyashankar Krishnan was appointed as Chairman and Managing Director of the Company, effective 01 April 2024, by the Board of Directors at the meeting held on 15 March 2024. There was no cessation / resignation of Directors during the year under review except the retirement as mentioned in Clause 11.1 above.

12.4. Retirement by Rotation

Shri. Vidyashankar Krishnan, holding DIN 00081441, liable to retire by rotation, will retire by rotation and being eligible has offered himself for re-appointment. The subject is placed in the Notice of 78^th AGM for the approval of shareholders.

12.5. Independent Directors

In the AGM held on 29 September 2020, Smt. Kavitha Vijay, Independent Director, was appointed for the second term of five years and shall hold office as Independent Director till 31 March 2025.

In the AGM held on 11 August 2023, Shri. Shankar Athreya (DIN: 10153304) and Shri. Hari Sankaran (DIN: 01734801) were appointed for the first term of five years as Independent Director effective 11 August 2023 and 01 April 2024 respectively.

Shri. S. Krishnakumar (DIN: 09203779) and Shri. R. Subramanian (10480862) were appointed by the Board of Directors at their meeting held on 10 February 2024, effective

08 March 2024 for a period of five years. The appointment was approved by the Shareholders at the meeting held through Postal Ballot dated 21 March 2024.

All Independent Directors hold office for a fixed term of five years and are not liable to retire by rotation. As required under sub section (7) of Section 149 of the Companies Act, 2013, all the Independent Directors have declared that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations of the Listing Regulations.

During FY24, a separate meeting of Independent Directors was held on

09 November 2023, without the participation of non-Independent Director for evaluating the performance of non-Independent Director, the Chairman of the Board and the Board as a whole. Independent Directors had expressed their satisfaction on the evaluation process and the results thereof.

12.6. Change in Key Managerial Personnel (KMP)

As on 31 March 2024, Shri. Vidyashankar Krishnan, Chairman and Managing Director, Shri. K. Venkatramanan, Joint Managing Director, Shri. R. Venkatakrishnan, Chief Financial Officer and Shri. Chandrasekar S, Company Secretary are KMPs of the Company in terms of Section 2(51) of the Companies Act, 2013. There were no changes in the KMP during the year under review.

13. NOMINATION AND REMUNERATION POLICY

In terms of provision of section 178 of the Companies Act, 2013 read with Rules prescribed, a policy for the Directors, KMP and other employees has been adopted by the Board of Directors of the Company, which analyses the criteria for determining qualifications, positive attributes and independence of a Director.

The said policy is provided in Company's website as below:

https://www.mmforgings.com/uploads/policies/NOMINATION AND REMUNERAT ION POLICY.pdf

14. BOARD AND COMMITTEE MEETING DATES

During the Financial Year 2023-24, the Board met five times. The details of the meetings of Board and Committee Meetings are provided as part of Corporate Governance Report prepared in terms of Listing Regulation in Annexure III of this Report.

15. DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOT ACCEPTED BY THE BOARD ALONG WITH REASONS

None

16. RISK MANAGEMENT

Company's risk management framework is well embedded and continually reviewed by the Risk Management Committee, consisting of majority of Board Members. It enables the Board, to identify, evaluate and monitor principal risks and wherever possible, actively mitigate the risks that could affect the achievement of the Company's target.

The Company's Risk Management Committee oversees the significant risks that the organization is likely to face, such as strategic, financial, market, IT, legal, regulatory, reputational and other risks and recommends suitable action.

The Board is satisfied that there are adequate systems and procedures in place to identify, assess, monitor and manage risks. The Audit Committee is informed on the risk assessment and minimizations mechanism adopted by the Company.

17. RELATED PARTY TRANSACTION

The Company has formulated a policy on related party transactions and the same is uploaded on the Company's website:

https://www.mmforgings.com/uploads/policies/Policy on Related Party Transactions 2.pdf

There are no ‘Material' contracts or arrangement or transactions at arm's length basis. There are no materially significant Related Party transactions made by the Company with Promoters, Directors and Key Managerial Personnel which may have a potential conflict with the interest of the Company at large. For related party transactions as per Accounting Standards, refer Notes on Accounts.

18. CORPORATE SOCIAL RESPONSIBILITY

A Board Level Committee of Corporate Social Responsibility (CSR) has been constituted and the Board has adopted a CSR Policy as recommended by the CSR Committee. The thrust areas of CSR Policy are Eradicating Hunger and Poverty, Education, Combating Diseases and Social Business Projects.

Annual report on CSR has been provided as a part of Corporate Governance Report in Clause 6 in Annexure III of this Report.

19. PARTICULARS OF EMPLOYEES

The information required under the rules prescribed, has been given in the annexure appended hereto and forms part of this report.

20. PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES

20.1. The ratio of remuneration of each Director to the median remuneration of the employees and percentage of increase in remuneration of each Director, KMP, in the financial year:

Note: For this purpose, sitting fees paid to the Directors have not been considered as remuneration.

* Appointed effective 11 August 2023 as an Independent Director **Appointed effective 01 April 2023 as Company Secretary.

20.2. Percentage increase in median remuneration of employees in the FY 2023-24 - (4.1)%.

20.3. The number of permanent employees on the rolls of Company: 2054.

20.4. Comparison of remuneration of each KMP against performance of Company.

* CMD - Chairman and Managing Director, CEO - Chief Executive Officer,

JMD - Joint Managing Director, WTD - Whole-Time Director CFO - Chief Financial Officer; CS - Company Secretary

20.5. Average Increase in Remuneration for employees other than Directors and KMP is

0.13% and average Increase in Remuneration for KMP and Senior Management is 18.5%.

The increase in remuneration is not solely based on company performance but also includes various other factors like individual performance, experience, skill sets, academic background, industry trends, economic situation and future growth prospects etc., besides Company performance. There are no exceptional circumstances for increase in the managerial remuneration.

20.6. Key parameters for any variable remuneration of Directors:

Directors are being paid Commission. However, the overall managerial remuneration payable is subject to the provisions of the Companies Act, 2013.

20.7. Variation in market cap/ net worth of Company:

20.8. Ratio of remuneration of highest paid Director to other employees who get remuneration more than highest paid Director - NOT APPLICABLE.

20.9. Affirmation that the remuneration is as per the remuneration policy of the company:

It is hereby affirmed that the Remuneration paid is as per the remuneration policy of the Company.

21. SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATIONS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There are no significant and material orders passed by the Regulators or Courts or Tribunals, which would impact the going concern status of the Company and its future operations.

22. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURRED SINCE 31.03.2024 TILL THE DATE OF THE REPORT

NIL

23. DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 with respect to Directors' Responsibility Statement, it is hereby stated that:

23.1. In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

23.2. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2024 and of the profit or loss of the Company for that period ended on that date;

23.3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

23.4. The Directors have prepared the annual accounts on a going concern basis;

23.5. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

23.6. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

24. ESTABLISHMENT OF VIGIL MECHANISM

The Company has in place a vigil mechanism pursuant to which a Whistle Blower Policy has been in vogue. The Whistle Blower Policy covering all employees and Directors is hosted on the Company's website at

https://www.mmforgings.com/uploads/policies/Policy - Whistle Blower.pdf

A high level Committee has been constituted to look into the complaints. The Committee reports to the Audit Committee and the Board.

25. ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company had laid down Internal Financial Controls and such internal financial controls are adequate with reference to the Financial Statements and were operating effectively. The Board is accountable for evaluating and approving the effectiveness of the internal controls, including financial, operational and compliance controls.

It also ensures the orderly efficient conduct of its business, including adherence to Company's policies, the safe guarding of its assets, the prevention and detention of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information during the year, such controls were tested and no material weakness in the operations were observed.

Further, the internal audit plan is also aligned to the business objectives of the Company which is reviewed, monitored and approved by the Audit Committee.

26. CORPORATE GOVERNANCE REPORT

The guidelines evolved by SEBI were applicable to the Company. The Company is committed to ethical management and excellence in performance. Details are provided in Annexure III.

27. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT (BRSR)

In accordance with Regulation 34(2)(f) of the Listing Regulations, with effect from FY23, top 1000 companies based on Market Capitalisation as per NSE / BSE as on 31 March of every Financial Year, are required to disclose BRSR as part of their Directors' Report.

BRSR, covering disclosures on the Company's performance on Environment, Social and Governance parameters for FY24, is provided as Annexure V to this Report. BRSR includes reporting on the nine principles of the National Voluntary Guidelines on social, environmental and economic responsibilities of business as framed by the MCA.

28. ANNUAL RETURN

In terms of the requirement of Section 92(3) read with Section 134(3) of the Companies Act, 2013, the Annual Return of the Company for the year ended 31 March 2023 and the draft Annual Return of the Company for the year ended 31 March 2024 is available in the Company's website in the following link.

https://www.mmforgings.com/Investors/annual return

29. A STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

29.1. Nomination and Remuneration Committee had laid down the criteria and prescribed a peer evaluation methodology by way of set of questionnaire to evaluate the performance of individual Director, Committee(s) of the Board, Chairman of the Board and the Board as a whole. The Board subsequently carried out the performance evaluation as per the methodology.

1. The Performance evaluation of the Board as whole was assessed based on the criteria viz., adequacy of the composition of the Board and its Committees, Board culture, execution, mix of skills and experience, its meeting sequence, decision making, quality of information, performance of specific duties, obligation and governance.

2. The performance evaluation of individual Director including Chairman of the Board, was carried out based on his/her commitment to roles and responsibility, level of engagement and contribution, independence of judgement, strategic and lateral thinking, safeguarding the interest of the Company and its minority shareholders, etc.

3. The performance evaluation of Senior Managerial Personnel was determined based on their performance and achievement of business plans as approved by the Board and management, their commitment towards roles and responsibility, leadership quality, productivity, team management, etc.

29.2. Further, Independent Directors, in their meeting held on 09 November 2023 (without the participation of non-Independent Director and personnel from management), had considered and evaluated the Board's performance on the whole, the performance of the Chairman and other non-independent Directors.

29.3. There are no observations or pending actions on the Board evaluation. The Board expressed its satisfaction with the evaluation process and results thereof.

30. FAMILIARISATION OF PROGRAMME ARRANGED FOR INDEPENDENT DIRECTORS

30.1. M M Forgings Limited has put in place a system to familiarise independent Directors about the Company, its products, business and the on-going events relating to the Company.

30.2. Independent Directors of the Company are made aware of their role, responsibilities and liabilities at the time of their appointment / re-appointment, through a formal letter of appointment, which also stipulates various terms and conditions of their engagement.

30.3. They are also made aware of Company's Board and Board Committee framework, policies and procedures.

30.4. As a part of Board's discussions, presentations on business of the Company are made to the Directors from time to time.

30.5. Important announcements and press releases for various news related to the Company are forwarded to the Directors from time to time.

30.6. The provision of access to senior managerial personnel at Board / Board Committee meetings enables Independent Directors to interact with them to understand the Company's strategy, business model, operations, service and product offerings, markets, organization structure, finance, human resources, technology, quality and risk management and such other areas as may arise from time to time.

30.7. Each member of the Board, including the independent Directors, have been given complete access to any information relating to the Company.

30.8. The details of familiarisation programme are available on the Company's website in the link given below:

https://www.mmforgings.com/uploads/Familiarisation programme/Familirisation Pro gramme for IDs.pdf

31. AUDITORS

31.1. Statutory Auditors

The Company at its 76^th Annual General Meeting (AGM) held on 4 July 2022 has appointed M/s. G Ramesh Kumar & Co., Chartered Accountants, as Statutory Auditors of the Company to hold office for the first term of 5 years from the conclusion of 76^th AGM till the conclusion of 81^st AGM, at such remuneration in addition to applicable taxes, out of pocket expenses, travelling and other expenses as may be mutually agreed between the Board of Directors of the Company and the Auditors.

The Statutory Auditors will continue to hold office for the third year in their first term of five consecutive years, from the conclusion of this AGM. The Auditors' Report for the financial year 2023-24 does not contain any qualification, reservation or adverse remark and the same is attached with the annual financial statements.

31.2. Secretarial Auditor

Pursuant to Section 204 of the Companies Act, 2013 and Rules made thereunder, the Company has re-appointed Shri. V. Shankar, Practicing Company Secretary (C.P. No. 12974) as the Secretarial Auditor for the financial year 2024-25.

The Secretarial Audit Report for the Financial Year 2023-24 given by Shri. V. Shankar is attached to this Report. The Secretarial Audit Report does not contain any qualification, reservations or adverse remarks.

31.3. Cost Auditor

Pursuant to the provisions contained in Rule 14 of the Companies (Audit and Auditors) Rules, 2014, Shri. S. Hariharan (CP No. 20864) has been appointed as Cost Auditor for the financial year 2024-25.

32. EXPLANATION TO AUDITOR'S REMARK

There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and Company Secretary in practice in their reports respectively. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.

33. SAFETY

Employees have been encouraged to adhere to safety in all their activities in and out of the Company premises. Safety training at all levels have been provided by the Company.

34. PERFORMANCE OF SUBSIDIARIES

34.1. D V S Industries Private Limited

The Company has fully acquired D V S Industries Private Limited (D V S) in the year 2018. D V S becomes a wholly-owned subsidiary of the Company. It has its factory located in Pantnagar, Uttarakhand. D V S Industries is well equipped with precision equipment, in-house tool room inspection facilities, well trained personnel, etc., during the Financial year under review.

DVS has achieved a turnover of ?91.98 Crores and the EBITDA stood at ?7.26 crores.

34.2. Suvarchas Vidyut Private Limited

Suvarchas Vidyut Private Limited (SVPL) was incorporated as a wholly owned subsidiary of the Company on 31 March 2022. SVPL is engaged in manufacturing of electrical and electronic components and subassemblies for industrial, consumer and automotive applications. During the year under review, SVPL have registered sales of ?3.08 Crores with a loss of ?2.23 Crores.

34.3. Abhinava Rizel Private Limited

Abhinava Rizel Private Limited (ARPL) was incorporated on 11 May 2022. As a part of transformation strategy, with an intention to develop and to become a leading player in the growing electric vehicle (EV) segment, M M Forgings Limited (MMF) had acquired 88% stake in ARPL on 01 September 2022 by investing ?15.84 Crores in equity, thereby becomes a holding Company of ARPL.

APRL is engaged in business of design, manufacturing of parts / components for EV electric power train, electric motors and electric controllers' / drives gearbox etc., used in automotive, industrial, marine, aerospace etc., The samples and testing of motors in two and three wheelers are in the initial stage. The production is expected to commence from Q2FY25.

35. DEPOSITS

The Company does not have any deposits nor accepts any fresh deposits.

36. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

Disclosures as per requirements of Section 134 (3) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 with respect to Energy Conservation, Technology Absorption, Research & Development and Foreign Exchange Earnings / Outgo are given in Annexure I.

37. PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE

During the year under review, pursuant to the new legislation, "Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013" introduced by the Government of India, which came into effect from 09 December 2013, the Company has framed a Policy on Prevention of Sexual Harassment at workplace.

There were no cases reported during the year under review under the said Policy.

Disclosures in relation to the Sexual Harassment of Women in work place:

No. of complaints filed during the year - 0

No of complaints disposed of during the year - 0

No of complaints pending as on the end of the financial year - 0

38. INSOLVENCY AND BANKRUPTCY CODE

There was no application made or any proceedings pending during the year under the Insolvency and Bankruptcy code.

There were no instances during the year, which required the banks and the financial institutions to deal with the Company for the one-time settlement for the loans, if any provided.

39. ACKNOWLEDGEMENT

Your Directors would like to express their gratitude for the cooperation and continued assistance received from DBS Bank, State Bank of India, HDFC Bank, Federal Bank, ICICI Bank, RBL Bank Limited, Export-Import Bank of India and Standard Chartered Bank.

Your Directors wish to record their appreciation for the exemplary services rendered by the employees of the Company. The results achieved would not have been possible but for their outstanding effort and divine grace. Above all, the Directors thank the shareholders for their continued confidence in the management.