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Bharat Forge Ltd.

BSE: 500493 Sector: Engineering
NSE: BHARATFORG ISIN Code: INE465A01025
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OPEN 886.95
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VOLUME 76242
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P/E 38.77
Mkt Cap.(Rs cr) 40,361
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OPEN 886.95
CLOSE 875.20
VOLUME 76242
52-Week high 919.50
52-Week low 595.85
P/E 38.77
Mkt Cap.(Rs cr) 40,361
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bharat Forge Ltd. (BHARATFORG) - Director Report

Company director report

For the year ended March 31 2022 To the Members

Your Directors have pleasure in presenting the 61st (Sixty-First)Annual Report on the business and operations of the Company together with the auditedfinancial statements for the Financial Year ended March 31 2022.

1. Financial Highlights

The financial performance of the Company on standalone and consolidatedbasis for the Financial Year ended March 31 2022 as compared to previous year issummarised in the following table:

In Rs. Million

Standalone Consolidated
Particulars 31-Mar-22 31-Mar-21 31-Mar-22 31-Mar-21
Total Income 64221.14 37919.69 106569.78 65051.59
Exports Revenue 36620.65 19558.66 78064.18 46666.08
Net Profit
Profit for the year before Taxation and Exceptional item 13641.40 4240.90 13211.29 3107.48
Share of (loss) / Profit of associates and Joint Venture

-

- (330.2) (299.74)
Add / (Less): Exceptional item 318.03 (91.83) 924.05 (3062.28)
Provision for Taxation:
Current Tax 3328.22 882.21 3529.58 906.56
Deferred Tax (146.82) 145.92 (495.05) 108.56
Profit for the year 10778.03 3120.94 10770.61 (1269.66)
Less: Non-controlling interest

-

-

(46.95) (5.85)
Profit for the year attributable to equity holders of parent 10778.03 3120.94 10817.56 (1263.81)
Items of other Comprehensive Income for the year (Net of tax) 1700.77 197.84 1889.47 127.76
Total 12478.80 3318.78 12707.03 (1136.05)
Balance of Profit from Previous year 46325.81 43007.03 39764.24 40900.29
Profit available for Appropriation 58804.61 46325.81 52471.12 39764.24
Appropriations:
Interim Dividend on Equity Shares 698.38 - 698.38 -
Tax on above dividend - - - -
Final Dividend on Equity Shares 931.18 - 931.18 -
Tax on above dividend - - - -
Transfer to General Reserve - - - -
Surplus retained in Statement of Profit and Loss 57175.05 46325.81 50841.56 39764.24

2. Dividend

The Board in its meeting held on November 12 2021 declared an interimdividend of ? 1.50/- per equity share (i.e.75%) of the face value of ? 2/- eachaggregating to ? 698.38 Million plus applicable taxes thereon.

Based on the Company's performance the Directors are pleased torecommend for approval of members a final dividend of ? 5.5/- per equity share (i.e. 275%)of the face value of ? 2/- each. The final dividend on equity shares if approved by themembers would involve a cash outflow of ? 2560.74 million and shall be subject todeduction of income tax at source.

The dividend payout has been determined in accordance with the DividendDistribution Policy of the Company.

Pursuant to Regulation 43A of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 as amended from time to time ("ListingRegulations") the Company had adopted the Dividend Distribution Policy which isavailable on the Company's website at:https://www.bharatforge.com/investors/corporate-governance/policies

3. Reserves

During the year under review the Company does not propose to transferany amount to the General Reserve. An amount of ? 57175.05 million is proposed to beretained as surplus in the Profit and Loss account.

4. Performance of the Company

The end of financial year 2021 and the beginning of financial year 2022was severely impacted by the devastating outbreak of second wave of COVID-19 in Indiaresulting in significant loss of lives and disruption to industrial activity. Your Companyhas diligently followed all the Government guidelines including adoption of socialdistancing norms at workplace and necessary precautions for all employees on an ongoingbasis. The Company also administered vaccination for all the employees of the Company.

Post the slump in the initial few months economic activity picked upsignificantly across all sectors. The Company for the year recorded revenues of ?62546.12 million as against ? 36515.12 million in previous year a growth of 71.3%.

The balance sheet at the end of financial year continues to be robustwith significant level of liquidity.

Domestic Business

Automotive Market: Despite unabated challenges the industry has had toweather over the past few years ranging from supply chain related issues increased costdue to regulatory challenges high input cost inflation etc. The Company's performance infinancial year 2022 has been very encouraging albeit from a low base. All segments of theindustry have shown double digit growth ranging from 20% for Passenger Vehicles("PV") to 50% for Medium and Heavy Commercial Vehicle ("MHCV").Outlook for MHCV sector looks promising driven by healthy freight rates improving fleetoperators' profitability and the strong focus of the Government on infrastructuredevelopment.

The stark performance between the PV segment which grew by 4% and theUtility Vehicle ("UV") segment which grew by 43% is clear signal about theproduct premiumization in the domestic car market. The Company's presence in the PV/UVsegment has been strengthened over the past few years with both new product and customeraddition. As against the industry growth of 19% the Company's revenue has grown by 36%.

Industrial Business: The Industrial segment during the financial year2021-22 has grown by 57% to ? 11666 million which includes revenues of ? 2209 millionattributable to the supply of Oxygen Cylinders. This segment is going to be big focus andgrowth area over medium to long term as the Company focuses its attention towardsaddressing areas which has 100% dependency on imports and area which will see exponentialgrowth driven by AtmaNirbharta and the Government's aim to make manufacturing >20% ofGDP from the current ~15%.

International Business

The Company's exports saw growth across all major segments. Exportrevenues in financial year 2022 were at ? 36620.65 million was a growth of 87.23% asagainst financial year 2021.

A key pillar of growth was the Industrial segment which witnessedrevenues jumping by 150.3% to ? 13906 million. This was on the back of sharp recovery inshale gas drilling activity in North America and strong demand from HHP segment.

The Automotive segment across both PV & Commercial Vehicle saw asharp jump in revenues of 25.6% and 78.8% respectively. The growth could have been muchbetter if not for supply chain related issues and shortage of semiconductors whichimpacted the ability of OEM to produce more vehicles.

Your Company continues to maintain razor sharp focus to grow exports onyear-on-year basis. We have intensified our business development and new productdevelopment activities in spite of the lockdown and associated challenges includingreduced mobility due to travel restrictions. We have successfully overcome thesechallenges by actively implementing virtual interface and digital collaborations acrossall functions including customer critical actions like plant audits.

Despite the challenges on account of operations logistics etc. yourCompany has ensured supply chain fulfilment for all our customers. Your Company hasreceived generous appreciation for our dependability from domestic and global customers.

Standalone & Consolidated

In the financial year 2021-22 the revenue of the Company increased by69% and Profit after Tax increased by 245% as compared to the last financial year 2020-21on a standalone basis. The total revenue increased by 69% to ? 64221.14 as compared tolast year of ? 37919.69 million. Whereas export revenue increased by 87% to ? 36620.65million as compared to last year of ? 19558.66 million. On a consolidated basis theCompany its subsidiaries and joint venture companies achieved total revenue of ?106569.78 Million as against ? 65051.59 million an increase of 64%.

5. Particulars of Loans Guarantees or Investments under Section 186 ofthe Companies Act 2013 ("Act")

Particulars of loans guarantees and investments covered under Section186 of the Act forms part of notes to the financial statements provided in this AnnualReport.

6. Particulars of Contracts or Arrangements with Related Parties

All contracts or arrangements entered into by and between the Companywith Related Parties are on arm's length basis and in the ordinary course of business.

Pursuant to Section 134 of the Act read with Rule 8(2) of theCompanies (Accounts) Rules 2014 the particulars of transactions with related parties areprovided in Form AOC-2 which is annexed as Annexure "A" to this report. RelatedParty disclosures as per Ind AS 24 have been provided in Note 39 to the financialstatements.

The Related Party Transaction Policy as amended in line with therequirements of Listing Regulations has been displayed on the Company's website at:https://www.bharatforge.com/investors/corporate-governance/policies

7. Deposits

During the year under review the Company has not accepted any depositunder Chapter V of the Act.

8. Internal Financial Controls

Your Company has in place adequate internal financial controls withreference to financial statements commensurate with size scale and complexity of itsoperations. An extensive risk-based programme of internal audits and management reviewsprovides assurance to the Board regarding the adequacy and efficacy of internal controls.The internal audit plan is also aligned to the business objectives of the Company which isreviewed and approved by the Audit Committee. Further the Audit Committee monitors theadequacy and effectiveness of your Company's internal control framework. The internalcontrol system has been designed to ensure that financial and other records are reliablefor preparing financial and other statements and for maintaining accountability of assets.

9. Risk Management

The Company has a robust risk management framework comprising of riskgovernance structure and defined risk management processes. The Board of Directors of theCompany has formed a Finance and Risk Management Committee to frame implement and monitorthe risk management plan for the Company. The Committee is responsible for reviewing therisk management plan and ensuring its effectiveness. The Audit Committee has additionaloversight in the area of financial risks and controls. The major risks identified by thebusinesses and functions are systematically addressed through mitigating actions on acontinuing basis. The development and implementation of risk management policy has beencovered in the Management Discussion and Analysis (MDA) which forms part of this report.

10. Material Changes and Commitments affecting the Financial Positionof the Company

There are no adverse material changes or commitments occurred afterMarch 31 2022 which may affect the financial position of the Company or may requiredisclosure.

11. Significant and Material Orders

There are no significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and Company's operations infuture.

There are no applications made or proceedings pending under theInsolvency and Bankruptcy Code 2016 as at the end of the financial year nor has theCompany done any one-time settlement with any Bank or Financial Institutions.

12. State of Company's Affairs

Discussion on the state of affairs of the Company has been covered aspart of the Management Discussion and Analysis (MDA). MDA for the year under review asstipulated under Regulation 34 of Listing Regulations is presented in a separate sectionforming part of this Annual Report.

13. Share Capital

The paid-up Equity Share Capital of the Company as on March 31 2022stood at ? 931.18 million.

During the year under review the Company has not issued shares withthe differential voting rights nor has granted any stock options or sweat equity. As onMarch 31 2022 none of the Directors of the Company hold any instruments convertible intoequity shares of the Company.

14. Transfer of Unpaid and Unclaimed Amounts to Investor Education andProtection Fund ('IEPF')

Pursuant to the provisions of the Act and Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 ("IEPFRules") as amended from time-to-time the declared dividends which remained unpaidor unclaimed for a period of 7 (seven) years and shares in relation to such unpaid /unclaimed dividend shall be transferred by the Company to the Investor Education andProtection Fund (IEPF) established by the Central Government.

Accordingly during the year the Company has transferred the unpaid orunclaimed dividend for a period of 7 (seven) years from the date they became due forpayment along with the shares thereof to IEPF. The shareholders have an option to claimtheir shares and / or amount of dividend transferred to IEPF. No claim shall beentertained against the Company for the amounts and shares so transferred.

The list of equity shareholders whose shares are transferred to IEPFcan be accessed on the website of the Company at the link:https://www.bharatforge.com/investors/shareholders-information/unclaimed-dividend

The Company has sent notices to respective shareholders who have notclaimed dividend for 7 (seven) consecutive years and whose shares were liable to betransferred to IEPF during the financial year 2021-22. The newspaper advertisement statingthe same has also been published in Loksatta Marathi Pune and Business Standard- AllEditions newspapers on June 30 2021 and December 02 2021. The list of equityshareholders whose shares are liable to be transferred or which have been transferred toIEPF as the case may be can be accessed on the website of the Company at the link:https://www.bharatforge.com/investors/shareholders-information/unclaimed-dividend

15. Annual Return

In accordance with Sections 92(3) read with 134(3)(a) of the Act theAnnual Return of the Company as on March 31 2022 is available on the website of theCompany at: https://www.bharatforge.com/investors/agm

16. Directors' Responsibility Statement

Pursuant to Section 134(5) of the Act Directors confirm that:

a. in preparation of the annual accounts for the financial year endedMarch 31 2022 the applicable Accounting Standards have been followed and there was nomaterial departures;

b. they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as on March 31 2022 andof the profit of the Company for that period;

c. they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and are operatingeffectively; and

f. they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

17. Directors and Key Managerial Personnel (KMP)

In terms of provisions of the Act and the Articles of Association ofthe Company Mr. B. P Kalyani (DIN 00267202) Director of the Company retires by rotationat the ensuing Annual General Meeting and being eligible has offered himself forre-appointment. A resolution seeking shareholders' approval for his re-appointment alongwith other required details forms part of the Notice convening the 61st Annual GeneralMeeting of the Company.

During the year under review Mr. P. C. Bhalerao (DIN 00037754)Non-Executive Non-Independent Director and Mr. S. M. Thakore (DIN 00031788) IndependentDirector of the Company have stepped down from the Board w.e.f. the closure of workinghours of Friday November 12 2021. The Board placed on record its sincere appreciationfor the contributions made by Mr. Bhalerao and Mr. Thakore during their association withthe Company.

Further in the 60th Annual General Meeting of the Company held onFriday August 13 2021 the shareholders approved re-appointment of Mr. S. E. Tandale(DIN: 00266833) and Mr. B. P Kalyani (DIN 00267202) as Executive Directors of the Companyfor a period of 5 (five) consecutive years each commencing from May 23 2021.

Independent Directors' Declaration

The Company has received the necessary declarations from eachIndependent Director in accordance with Section 149(7) of the Act and Regulations 16(1)(b)and 25(8) of the Listing Regulations that he / she meets the criteria of independence aslaid out in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.In the opinion of the Board there has been no change in the circumstances which mayaffect their status as Independent Directors of the Company and the Board is satisfied ofthe integrity expertise and experience of all Independent Directors on the Board.

18. Number of Meetings of the Board

The Board met 5 (five) times during the year. Also a separate meetingof Independent Directors as prescribed under Schedule IV of the Act was held during theyear under review. The details of meetings of Board of Directors are provided in theReport on Corporate Governance that forms part of this Annual Report. The intervening gapbetween the meetings was within the period prescribed under Act.

19. Board Evaluation

A formal evaluation of the performance of the Board its Committeesthe Chairperson and the individual Directors was carried out. Led by the Nomination andRemuneration Committee the evaluation was carried out using individual questionnaires.

As part of the evaluation process the performance of Non-IndependentDirectors the Chairperson and the Board was conducted by the Independent Directors. Theperformance evaluation of the respective Committees and that of Independent andNon-Independent Directors was done by the Board excluding the Director being evaluated.

20. Familiarisation Programme

The Company regularly provides orientation and business overview to itsDirectors by way of detailed presentations by the various business and functional heads atBoard meetings and through other interactive programs. Such meetings/ programs includebriefings on domestic and global business of the Company. Besides this the Directors areregularly updated about Company's new projects R&D initiatives changes in regulatoryenvironment and strategic direction. The Board members are also provided relevantdocuments reports and internal policies to facilitate familiarisation with the Company'sprocedures and practices from time to time.

The details of programmes for familiarisation for Independent Directorsare posted on the website of the Company and can be accessed at:https://www.bharatforge.com/assets/pdf/investor/familiarisation-programme-for-independent-directors.pdf

21. Business Responsibility and Sustainability Report

In accordance with the Listing Regulations we have provided theBusiness Responsibility and Sustainability Report (BRSR) as a part of this Annual Reportdescribing the initiatives undertaken by the Company from an environmental social andgovernance perspective during the year under review.

22. Information Pursuant to Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014

Sr. No. Information Required Input
1 The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year Please refer Annexure "B"
2 The percentage increase in remuneration of each Director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year; Please refer Annexure "B"
3 The percentage increase in the median remuneration of employees in the financial year 9.77%
4 The number of permanent employees on the roll of company 4079
5 Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration Percentage increase in salaries of managerial personnel at 50th Percentile is: (39.99)% Percentage increase in salaries of non- managerial personnel at 50th Percentile is: 11.06% 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.
6 Affirmation that the remuneration is as per the remuneration policy of the Company The remuneration paid to the Directors is as per the Remuneration policy of the Company
7 Statement showing the names of the top ten employees in terms of remuneration drawn and the name of every employee who- Please refer Annexure "C"
(i) if employed throughout the financial year was in receipt of remuneration for that year which in the aggregate was not less than one crore and two lakh rupees;
(ii) if employed for a part of the financial year was in receipt of remuneration for any part of that year at a rate which in the aggregate was not less than eight lakh and fifty thousand rupees per month;
(iii) if employed throughout the financial year or part thereof was in receipt of remuneration in that year which in the aggregate or as the case may be at a rate which in the aggregate is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children not less than two percent of the equity shares of the Company.

23. Nomination and Remuneration Policy

The Nomination and Remuneration Policy of the Company inter aliaprovides that the Nomination and Remuneration Committee shall formulate the criteria forappointment of Directors on the Board of the Company and persons holding Senior Managementpositions in the Company including their remuneration and other matters as provided underSection 178 of the Act and Listing Regulations. The Policy is also available on theCompany's website at: https://www.bharatforge.com/investors/corporate-governance/policies

24. Corporate Governance

The Company has been practicing the principles of good CorporateGovernance over the years. A separate section on corporate governance and a certificatefrom the Practicing Company Secretary regarding compliance of conditions of CorporateGovernance as stipulated under the Listing Regulations forms part of this Annual Report.The Chairman and Managing Director and the Chief Financial Officer of the Company havecertified to the Board on financial statements and other matters in accordance with theRegulation 17 (8) of the Listing Regulations pertaining to CEO/CFO certification for thefinancial year ended March 31 2022.

25. Subsidiaries Joint Ventures and Associate Companies

During the year under review the Company undertook followingacquisitions:

a. The Company acquired 100% of paid-up equity share capital of NouveauPower & Infrastructure Private Limited ("NPIPL") to align Company'sstrategic objective in industrial segment and to act as a special purpose vehicle toundertake Company's new acquisition initiatives. NPIPL was later converted to a publiccompany and renamed as BF Industrial Solutions Limited ("BFISL");

b. The Company acquired 100% control of Sanghvi Forging and EngineeringLimited ("SFEL") through BFISL in accordance with the Resolution Plan asapproved by the National Company Law Tribunal ("NCLT") vide its order datedApril 26 2021. Consequently the name of SFEL was changed to BF Industrial Technology& Solutions Limited.

c. The Company acquired 49% of paid-up share capital of KalyaniStrategic Systems Limited ("KSSL") thereby resulting in an increase in theshareholding of Company from 51% to 100% and consequently KSSL becoming the wholly ownedsubsidiary of the Company.

Further KSSL has incorporated "Sagar-Manas TechnologiesLimited" with an aim to participate in joint upgradation and manufacturing/ providingsolutions for marine and defence products. KSSL has also incorporated a wholly ownedsubsidiary in Australia namely Kalyani Strategic Systems Australia Pty Ltd with anobjective of exploring new business opportunities and diversifying existing productportfolio in the defence and aerospace industry.

d. Considering Company's strategic outlay in order to house allElectric Vehicle ("EV") initiatives of the Company through its EV company i.e.Kalyani Powertain Limited (wholly-owned subsidiary) ("KPL") the Company's stakeof 48.86% in Tork Motors Private Limited ("Tork") was transferred to KPL.Pursuant to a conversion notice KPL's aggregate stake in Tork rose to 60.66% resulting inTork being subsidiary of KPL and step-down subsidiary of the Company.

As on March 31 2022 the Company has 31 (Thirty-one) subsidiaries(including step down subsidiaries) and 2 (Two) Associate Companies and 1 (One) JointVenture Company. In accordance with Section 129(3) of the Act the Company has preparedthe consolidated financial statement which forms part of this Annual Report. Further astatement containing salient features of the financial statements of our subsidiaries inthe prescribed Form AOC-1 is presented in a separate section forming part of the financialstatements.

Performance of Material Subsidiaries:

i. Bharat Forge CDP GmbH

Bharat Forge CDP GmbH ("BF CDP") is the step-down subsidiaryof the Company located in Ennepetal Germany. BF CDP is engaged in business ofmanufacturing of components for auto industry. BF CDP recorded revenue of ? 19299 million(15-month revenue) as on March 31 2022.

ii. Bharat Forge International Limited

Bharat Forge International Limited ("BF International") is awholly owned subsidiary of the Company located in England United Kingdom. BFInternational is engaged in the business of trading of forged and machined components forautomotive and industrial sector and has a revenue of ? 26491 million for year endedMarch 31 2022.

Pursuant to Section 136 of the Act the audited financial statementsincluding the consolidated financial statements and related information of the Company andseparate audited accounts in respect of subsidiaries are available on the website of theCompany at: https://www.bharatforge.com/investors/reports/annual-reports

26. Audit Committee

Considering the changes in the Board structure that took place duringthe year under review the composition of Audit committee of the Board underwent change asfollows:

From April 01 2021 till November 12 2021 With effect from November 13 2021
Mr. P. G. Pawar- Chairperson Mr. P. G. Pawar- Chairperson
Mr. S. M. Thakore- Member Mr. P. H. Ravikumar - Member
Mr. P. H. Ravikumar - Member Mr. Vimal Bhandari - Member
Mr. P. C. Bhalerao- Member

All the recommendations made by the Audit Committee were deliberatedand accepted by the Board during the financial year 2021-22.

27. Auditors

A. Statutory Auditors and Audit Report

At the 56th Annual General Meeting of the Company held on ThursdayAugust 10 2017 M/s. S R B C & CO LLP Chartered Accountants Pune (Firm RegistrationNo. 324982E/E300003) were appointed as Statutory Auditors to hold office up to theconclusion of the 61st Annual General Meeting of the Company to be held in the year 2022.

The Auditor's Report for FY 2021-22 does not contain any qualificationreservation or adverse remark. The Auditor's Report is enclosed with the FinancialStatements in this Annual Report.

In the meeting held on May 16 2022 the Audit Committee of the Companyhas proposed and the Board of Directors of the Company has recommended appointment ofM/s. B S R & CO LLP Chartered Accountants (ICAI Firm Registration No.101248W/W-100022) Pune as the Statutory Auditors of the Company. Subject to approval ofshareholders of the Company M/s. B S R & CO LLP Chartered Accountants Pune willhold office for a period of 5 (five) consecutive years from the conclusion of 61st AnnualGeneral Meeting of the Company scheduled to be held on August 12 2022 till theconclusion of 66th Annual General Meeting to be held in the year 2027.

The Company has received a certificate from M/s. B S R & CO LLPChartered Accountants Pune to the effect that their appointment if made at the ensuing61st Annual General Meeting of the Company will be in accordance with the conditions laiddown under the Companies Act 2013 and Rule 4 of Companies (Audit and Auditors) Rules2014.

B. Secretarial Auditor and the Audit

The Board has appointed M/s. SVD & Associates Company SecretariesPune to conduct Secretarial Audit for the financial year 2021-22. The Secretarial AuditReport for the financial year ended March 31 2022 is appended as Annexure "D"to this report.

The observations of the Secretarial Auditor in their report areself-explanatory and therefore the Directors do not have any further comments to offer onthe same.

Further as required under Section 204 of the Act and rules thereunderthe Board has appointed M/s. SVD & Associates Company Secretaries Pune to conductSecretarial Audit for the financial year 2022-23.

C. Cost Auditors

The Board of Directors on the recommendation of Audit Committee hasappointed M/s. Dhananjay V. Joshi & Associates Cost Accountants Pune (FirmRegistration No.: 00030) as Cost Auditors to audit the cost accounts of the Company forthe financial year 2022-23. As required under the Act a resolution seeking Shareholders'approval for the remuneration payable to the Cost Auditors forms part of Notice conveningthe 61st Annual General Meeting.

In accordance with the provisions of Section 148(1) of the Act readwith the Companies (Cost Records & Audit) Rules 2014 the Company has maintained costrecords.

The Cost Audit report for the Financial Year 2020-21 was filed with theMinistry of Corporate Affairs on October 09 2021.

D. Reporting of fraud by auditors

During the year under review the Auditors of the Company have notreported any fraud as specified under Section 143(12) of the Act to the Audit Committee.

28. Corporate Social Responsibility Activities

The Company has been carrying out various Corporate SocialResponsibility (CSR) activities. These activities are carried out in terms of Section 135read with Schedule VII of the Act as amended from time to time and the Companies(Corporate Social Responsibility Policy) Rules 2014.

The brief outline of the Corporate Social Responsibility (CSR) policyof the Company and the initiatives undertaken by the Company on CSR activities during theyear under review are set out in Annexure "E" of this report in the formatprescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014. Forother details regarding the CSR Committee please refer to the Corporate GovernanceReport which is a part of this report. The CSR policy is also available on the Company'swebsite at the link: https://www.bharatforge.com/investors/corporate- governance/policies

29. Obligation of the Company under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013

The Company has adopted a policy on prevention prohibition andredressal of sexual harassment at workplace in line with the provisions of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 (POSHAct) and the Rules thereunder. All women associate (permanent temporary contractual andtrainees) as well as any women visiting the Company's office premises or women serviceproviders are covered under this Policy. During the year the Company reached out to 260employees through awareness sessions for creating greater awareness with respect to theCompany's Policy on Sexual Harassment at workplace.

The Company has constituted Internal Complaints Committee under thePOSH Act and during the year under review no complaints were received by the Committee.

30. Vigil Mechanism

Pursuant to the provisions of Section 177(9) of the Act read with Rule7 of the Companies (Meetings of Board and its Powers) Rules 2014 and Regulation 22 of theListing Regulations and in accordance with the requirements of Securities and ExchangeBoard of India (Prohibition of Insider Trading) Regulations 2015 the Board of Directorshad approved the Policy on Vigil Mechanism/Whistle Blower and the same has been hosted onthe website of the Company. Over the years the Company has established a reputation fordoing business with integrity and displays zero tolerance for any form of unethicalbehavior. The mechanism under the Policy has been appropriately communicated within theorganization. This Policy inter-alia provides a direct access to the Chairperson of theAudit Committee. It is affirmed that no personnel of the Company has been denied access tothe Audit Committee.

The Company reached out to employees through physical / virtualsessions with an aim for creating greater awareness on this subject. During the year underreview the Company has not received any complaints under the said mechanism. The WhistleBlower Policy of the Company has been displayed on the Company's website at the link:https://www.bharatforge.com/investors/corporate-governance/policies

31. Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo

The particulars relating to conservation of energy technologyabsorption foreign exchange earnings and outgo as required to be disclosed under Section134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules 2014 areappended as Annexure "F" to this report.

32. Compliance with Secretarial Standards

The Company complies with all applicable Secretarial Standards issuedby the Institute of Company Secretaries of India.

33. Acknowledgement

Your Directors would like to express their sincere appreciation of thepositive co-operation received from the Central Government the Government of MaharashtraGovernment of Andhra Pradesh Financial Institutions and the Bankers. The Directors alsowish to place on record their deep sense of appreciation for the commitment displayed byall executives officers workers and staff of the Company resulting in the successfulperformance of the Company during the year.

The Board also takes this opportunity to express its deep gratitude forthe continued co-operation and support received from its valued shareholders.

The Directors express their special thanks to Mr. B. N. KalyaniChairman and Managing Director for his untiring efforts for the progress of the Company.

.