force motors ltd Management discussions

I. INDUSTRYSTRUCTUREANDDEVELOPMENTS

The Automotive Industry, both in terms of vehicle technology demanded by the market, and in terms of the technology of the component required - is evolving rapidly.

It is clear that the latest generation of Diesel Vehicles meeting BS 6.2 standard will have validity and demand for several years ahead. We are required to continue to make continuous efforts to improve the Diesel and CNG Engines as we go along. The diesel fuel will survive for longer than recently predicted. We have well established and highly acclaimed diesel engines and drivelines, which is a cause for satisfaction.

In the case of Commercial Vehicles such as ours i.e., such as Vans and Minibuses, clearly the market opportunity for electrified vehicles lies in last mile connectivity. Electrification is logically only justified, in terms of the total life time cost of the vehicle, on the basis of substantial mileage to be covered, because the savings in electric vehicles stem fundamentally from the very high efficiency and very low cost of electric traction in comparison to fossil fuel drivelines. The more the EV is run, greater the justification for the extra cost of the EV system.

Commuter vehicles in the normal sense are not best suited for electrification at this stage of the evolution of the market. The opportunity is seen mainly in last mile public transport, in conjunction with and complementary to the trunk routes of large electric buses, metro and local trains, to facilitate passengers to travel from homes or place of work to the main line metro, railway or large bus transport.

The electric vehicles developed by the Company are undergoing introduction trials, and we expect to get orders during the next two quarters to really bring our vehicles on the road. Since this process involves State Governments, Municipal Corporations and Specialized Fleet Operators, etc. the nature of the sale is different from that of individual vehicles like motorcycles or cars, sold to an individual user. The business structure, the contractual and financial arrangements required for implementation of such fleets do need time. While metro trains and electric bus routes over long distances in major cities are now getting established, the next expansion phase, must logically include last mile transport, which is the area we hope to participate in. The Company is enthusiastically engaged in delivering efficient, attractive and economic solutions, for this usage.

While the interest rates in India have been much steadier than the rest of the world, there is no denying that there is creeping inflation.

The factors of production, such as land remain very cumbersome and expensive to purchase and manage, given the plethora of laws, rules, etc. involving layer upon layer of bureaucracy and obstructions. Price for industrial land in India is unusually high in international comparison. If new Plants in new locations have to be set up, it would help greatly if this aspect is also reformed by the Government, as effectively as Industrial Licensing and Permit License regime was reformed.

Taxation levels on Vans, for reasons best known to the decision makers that be in the authorities, remain extremely adverse, particularly for Vans in the 10 to 13 seats capacity This is an anomaly which refuses to go away.

The Indian Automotive Industrys global competitiveness can hugely improve if the overall taxation level on passenger vehicles is reduced. The earnings of the industry are only 20 per cent of the earnings of the Government from the same product. On the sale of a vehicle, for every 20 rupees that the industry earns, the Government extracts approximately 50 rupees from the automobile, by way of applied taxes. This must be the highest taxation skew applied to the Automobile Industry anywhere.

The Automobile Industry in India is now very much mature, has scale, experience, competence and drive. The global footprint of vehicles made in India can be rapidly improved to impressive levels, provided the taxation levels are brought within control and the industry is enabled to plough back the profits. Schemes like "Investment Allowance", etc. need to be looked at again, to build up the capital base, and fiduciary strength of companies.

II. PERFORMANCEOF THECOMPANY

Operational Performance: The number of vehicles sold during the Financial Year under report was 26,461 compared to 20,575 vehicles sold in the Financial Year 2021-22. During the year under report, the Company achieved a top line of 5,028.59 Crore. The sales turnover stood at 4,980.96 Crore compared to the previous years turnover of 3,207.26 Crore.

Financial Performance : As stated above, the Company sold 26,461 vehicles during the Financial Year 2022-23 compared to 20,575 vehicles in the previous Financial Year 2021-22. The Profit before Depreciation, Exceptional Items and Taxes, from operations for the year under report was 323.05 Crore as compared to operating profit for the previous Financial Year 2021-22 amounting to 77.59 Crore. The Net Profit after Depreciation, Exceptional Items and Taxes was 152.05 Crore for the Financial Year 2022-23. The Reserves and Surplus of the Company as on 31st March 2023 stood at 1,919.27 Crore.

Key Financial Ratios : In accordance with the SEBI (LODR) Regulations, 2015, the following are the key financial ratios along with the explanation where changes are more than 25%, as compared to previous financial year.

Sr. No. Ratios	FY 2022-23	FY 2021-22	% change	Reason for change in the ratios by more than 25%
(i) Current Ratio	1.03	0.80	30%	Improvement in ratio is due to improved operating performance and working capital management.
(ii) Debt-Equity Ratio	0.49	0.60	17%	--
(iii) Debt Service Coverage Ratio	1.28	0.80	60%	Improvement in ratio is due to better financial performance as a result of overall improvement in sales and profitability.
(iv) Return On Equity	0.04	(0.04)	208%	Improvement in ratio is due to better financial performance as a result of overall improvement in sales and profitability.
(v) Inventory Turnover Ratio	6.81	5.37	27%	Improvement in ratio is attributable to overall improvement in sales.
(vi) Debtors Turnover Ratio	25.79	20.34	27%	Improvement in ratio is attributable to overall improvement in sales, better collection efforts and improved credit management process
(vii) Operating Profit Margin	0.08	0.04	112%	Improvement in ratio is due to better financial performance as a result of overall improvement in sales and profitability.
(viii) Net Profit Margin	0.01	(0.02)	145%	Improvement in ratio is due to better financial performance as a result of overall improvement in sales and profitability.

III. OUTLOOK

Outlook on the business of the Company is covered in the Boards Report.

IV. SUBSIDIARY

(a) The Company is a subsidiary of Jaya Hind Industries Private Limited, which holds 57.38% stake in the Company.

(b) The Company is a Holding Company of Tempo Finance (West) Private Limited, and holds 66.43% stake in the subsidiary company.

(c) The Company has a joint venture with Rolls Royce Solutions GmbH, a company of the Rolls Royce Group. The Company holds 51% stake in Force MTU Power Systems Private Limited which has thus become a subsidiary of the Company.

V. OPPORTUNITIES, THREATSAND RISK FACTORS

The opportunity in India for successfully enlarging the Tour and Travel hospitality sector is a very substantial possibility to achieve high economic gains. The improving roadway infrastructure in India, the focus on connecting attractive pilgrimage centers, and tourist sites to the large and efficient grid of express ways and highways, will yield impressive results in the future. This is a special opportunity, given the emerging enhanced stature of India, as the country to travel to.

There is still a tendency to restrict Diesel vehicles in a number of inner cities even though they meet the mandated stringent regulations which are equal to internationally the best regulation. This is a damper on the image and sale of diesel passenger vehicles, particularly mass transport vehicles, such as Vans and Buses.

VI. INTERNAL CONTROL SYSTEM ANDTHEIRADEQUACY

The Companys internal control procedures are adequate to ensure compliance with various policies, practices and statutes in keeping with the organizations pace of growth and increasing complexity of operations.

The Company maintains system of multi level internal controls which provides reasonable assurance regarding Effectiveness and Efficiency of Operations, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

VII. HUMANRESOURCEDEVELOPMENT

The Company has continued its programme for training and skill development in its plants, for employees at various levels, who are provided training both in hard and soft skills. A large number of executives in the Sales & Marketing arm of the Company and in our dealer network spread all over India, are also provided continuous upgradation, training in selling skills, product familiarisation, customer service aspects - in a well structured and extensive programme. The Company had 5101 employees as on 31st March 2023.

VIII. CAUTIONARYSTATEMENT

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations may be forward looking statements. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include, amongst others, economic conditions affecting demand / supply and price conditions in the markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors.

ANNUAL REPORT DISCLOSURES AS SPECIFIED UNDER REGULATION 34 AND SCHEDULE V OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (LODR) REGULATIONS, 2015

A. RELATEDPARTYDISCLOSURE

The disclosure in compliance with the Accounting Standard is provided in the Financial Statement as Note No. 36.

B. MANAGEMENTDISCUSSION AND ANALYSIS

Management Discussion and Analysis is provided in the Annual Report. Necessary disclosures relating to the Accounting Treatment as prescribed in the Accounting Standards are provided in the Boards Report and the Financial Statements.

C. REPORTONCORPORATEGOVERNANCE

1. Companys philosophy on Corporate Governance

The Companys decision making process and operational methods are guided by the philosophy of "creating low cost, hi-tech products, which are suitable for Indian markets". Simplicity, self-reliance, social responsibility, trust and transparency in dealings with all stakeholders, the ethos on which this business was started by Late Shri N. K. Firodia, the founder of the Company, continues to be the guiding principles for the Organization, in arranging the activities. The Companys philosophy on the Code of Governance is based on compliance of applicable provisions and requires exchange of relevant information and appropriate disclosures to each group of stakeholders, connected with the area of common interest/ stake between the Company and the stakeholder.

2. Board of Directors

• Composition

As on 31st March 2023, the Board comprises of 8 Directors. 3 Directors are Executive Directors, while remaining 5 Directors are Non- Executive Independent Directors. The Companys Board did not consist of any Nominee Director appointed by lender(s) ora group of equity investor(s) during the year under review. Mr. Abhaykumar Firodia, Chairman and Mr. Prasan Firodia, Managing Director; of the Company; are also the Promoters of the Company.

During the year under review, Mr. Pratap Pawar, Mr. S. Padmanabhan, Dr. Indira Parikh, Mr. Arun Sheth and Mr. Nitin Desai ceased to be the directors of the Company w.e.f. 12th September 2022, due to completion of their second term as independent directors.

Further, Mr. Vallabh Bhanshali (DIN : 00184775), Mr. Mukesh Patel (DIN: 00053892) and Ms. Sonia Prashar (DIN: 06477222),were appointed as Independent Directors of the Company for a term of 5 years w.e.f. 13th August 2022,13th August 2022 and 28th September 2022 respectively.

• Directorships/Committee Positions

The details of directorships/ committee positions held by the Directors (as of 31st March 2023) of the Company in other Companies, are as under:

Name of the Director	Number of other companies in which directorships held*		Committee positions in listed and unlisted public companies#		Details of directorships held in other listed entities
	Director	Chairman	Member	Chairman	Name of the entity	Category of directorship
Mr. Abhaykumar Firodia	05	01	--	--	--	--
Mr. Prasan Firodia	05	01	2	1	Sona BLW Precision Forgings Limited	Independent Director
Mr. Arvind Mahajan	02	--	02	--	--	--
Lt. Gen. Dr. D.B. Shekatkar (Retd.)	__	__	--	--	--	--
Mr. Vallabh Bhanshali	11	--	--	--	Arvind Fashions Limited	Independent Director
Mr. Mukesh Patel	08		06	04	- Zydus Lifesciences Limited - Johnson Controls-Hitachi Air Conditioning India Limited	- Non-Executive Non- Independent Director - Independent Director
Ms. Sonia Prashar	03	--	01	--	INSILCO Limited	Independent Director
Mr. PrashantV. Inamdar	01	--	--	--	--	--

# Only audit committee and stakeholders relationship committee of public limited companies, whether listed or unlisted, are considered for the purpose of reckoning committee positions.

• Attendance

During the Financial Year 2022-23, four meetings of the Board were held on 27th May 2022, 13th August 2022, 11th November 2022 and 9th February 2023. The details of attendance of Directors during the Financial Year 2022-23 for Board Meetings and the AGM are as under:

Name of the Director	Number of Board Meetings attended	Whether present at the last AGM held on 28th September 2022
Mr. Abhaykumar Firodia	04	Yes
Mr. Prasan Firodia	04	Yes
Mr. Pratap Pawar*	02	--
Mr. S. Padmanabhan*	02	--
Mr. Nitin Desai*	02	--
Dr. Indira Parikh*	02	--
Mr. Arun Sheth*	01	--
Mr. Arvind Mahajan	04	Yes
Lt. Gen. Dr. D.B. Shekatkar (Retd.)	04	Yes
Mr. Vallabh Bhanshali#	03	Yes
Mr. Mukesh Patel#	03	Yes
Ms. Sonia Prashar@	02	No
Mr. Prashant V. Inamdar	04	No

* Ceased to be the director w.e.f. 12th September 2022.

# Appointed as Director w.e.f. 13th August 2022.

@ Appointed as Director w.e.f. 28th September 2022.

• Inter-se Relation ol Directors

Mr. Abhaykumar Firodia and Mr. Prasan Firodia are related to each other. None of the other Directors are related to any other Director of the Company as defined under the Act, including the relevant Rules thereof.

• Information supplied to the Board

The Board is presented with all the relevant information in various matters affecting the working of the Company and which requires deliberation at the highest level. Besides key operational and financial information, the Board is presented with information relevant to strategy formulation, for deliberations. This includes information as per Part A of Schedule II of the SEBI (LODR) Regulations, 2015.

At each meeting, the Managing Director presents an elaborate report on the operations of the Company, including an assessment of the market, operational issues, operating profitability and various risks associated with the Companys business. The assessments of the strategic and technological issues enabling a discussion on the strategy, projects, and tactics employed in the management of the Companys affairs are also presented. In the meetings, the presentations are also made by the Senior Management Officials and Internal Auditors of the Company, covering different functions and areas of the business of the Company. The Directors have made disclosures as per the requirements of the Act, from time to time, to the Board regarding their financial interest, if any, in the transactions with the Company. The Directors have also informed the Company about the Committee positions occupied by them in other Companies and changes therein. The related party disclosure forms part of the Notes to Financial Statements as per the disclosure requirement of the

Indian Accounting Standard 24 issued by the Institute of Chartered Accountants of India.

• Independent Directors Meeting

In our opinion, the Independent Directors of the Company fulfill the conditions specified in the Act and SEBI (LODR) Regulations, 2015 and are independent of the Management. The Independent Directors held their separate Meeting on 9th February 2023, as mandated by the provisions of the Act and the SEBI (LODR) Regulations, 2015. The details of the familiarization programme for the Independent Directors of the Company can be accessed at the web link: https:// www.forcemotors.com/assets/Others/Familiarisation-Programme-for-Directors-2022-23.pdf

• Performance Evaluation

Pursuant to the provisions of the Act and the SEBI (LODR) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually, including the Chairman, as well as evaluation of the working of its Committees on the basis of criteria set for Performance Evaluation of Directors through a structured questionnaire and taking into consideration inputs received from the Director which covered aspects of Boards functioning.

• Remuneration to Executive Directors

The details of remuneration paid to the Executive Directors during the FinancialYear2022-23 are as follows :

(Amount in Rs)

Sl. Particulars of No. Remuneration	Mr. Abhaykumar Firodia	Mr. Prasan Firodia	Mr. Prashant V. Inamdar
1. Gross Salary	Nil	1,44,93,640	1,54,74,103
2. Commission	Nil	2,80,00,000	Nil
3. Others	Nil	26,11,201	19,22,764
Total	Nil	4,51,04,841	1,73,96,867

• Remuneration, pecuniary transactions with Non-Executive Directors and Shareholding details

The details of sitting fees paid to the Non-Executive Directors duringthe FinancialYear2022-23are as follows:

(Amount in Rs)

Sl. Name of the Directors No.	Sitting Fees	No. of Equity Shares Held
1. Mr. Pratap Pawar*	2,00,000	Nil
2. Mr. S. Padmanabhan*	2,50,000	Nil
3. Mr. Nitin Desai*	1,50,000	Nil
4. Dr. Indira Parikh*	3,00,000	Nil
5. Mr. Arun Sheth*	1,00,000	Nil
6. Mr. Arvind Mahajan	5,50,000	Nil
7. Lt. Gen. Dr. D.B. Shekatkar (Retd.)	3,00,000	Nil
8. Mr. Vallabh Bhanshali#	2,00,000	Nil
9. Mr. Mukesh Patel#	3,50,000	Nil
10. Ms. Sonia Prashar@	1,50,000	Nil
Total	25,50,000

* Ceased to be the director w.e.f. 12th September 2022.

# Appointed as Director w.e.f. 13th August 2022.

@ Appointed as Director w.e.f. 28th September 2022.

• Stock Options to Directors

The Company does nothave any stock options.

• Skills/expertise/competencies of the Board of Directors

Pursuant to the SEBI (LODR) Regulations, 2015, the Board of Directors have identified core skills/expertise/ competencies of each Director, which are vital in the context of the business of the Company.

Considering the nature and size of the Company and the complex business environment in which it is operating, the Board has identified the following key skills expertise competencies:

Sr. No. Name of Director

Leadership

Research & Development

Management & Strategy

Operations & Engineering

Supply Chain Management

Sales & Marketing

Finance, Banking & Investment

Audit & Risk Management

CSR, Sustainability & Philanthropy

Information Technology

Human Resources & Industrial Relations

Legal and Corporate Governance

1. Mr. Abhaykumar Firodia

Y

Y

Y

Y

Y

Y

Y

Y

2. Mr. Prasan Firodia

Y

Y

Y

Y

Y

Y

Y

Y

3. Mr. Arvind Mahajan

Y

Y

Y

Y

Y

4. Mr. Vallabh Bhanshali

Y

Y

Y

Y

Y

5. Mr. Mukesh Patel

Y

Y

Y

Y

Y

6. Lt. Gen. Dr. D. B.Shekatkar (Retd.)

Y

Y

Y

7. Ms. Sonia Prashar

Y

Y

Y

Y

8. Mr. Prashant V. Inamdar

Y

Y

Y

Y

Y

Y

• Transactions with Promoter/ Promoter Group

Pursuant to the SEBI (LODR) Regulations, 2015, the details of transactions entered by the Company with Jaya Hind Industries Private Limited, which belongs to the Promoter / Promoter Group and holds more than 10% shareholding in the Company, are provided under Note No. 36 to the Financial Statement.

3. Committees

Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprised of 03 Directors as on 31st March 2023:

• Mr. Arvind Mahajan, Chairman of the Committee, Independent Director

• Mr. Mukesh Patel, Member, Independent Director

• Lt. General Dr. D.B. Shekatkar (Retd.), Member, Independent Director

The Committee met three times during the Financial Year 2022-23. The details of attendance of the members in the Committee meetings, are as follows:

Name of the Member	Date and details of attendance of Nomination and Remuneration Committee meetings
	27.05.2022	13.08.2022	09.02.2023
Mr. S. Padmanabhan*	P	P	--
Mr. Arvind Mahajan	P	P	P
Dr. Indira Parikh*	P	P	--
Mr. Mukesh Patel#	--	--	P
Lt. Gen. Dr. D. B.Shekatkar (Retd.)#	--	--	P

* Ceased to be the director and member of the Committee w.e.f. 12th September 2022.

# Appointed as the member of the Committee w.e.f. 27th September 2022.

Terms of reference of Nomination and Remuneration Committee include:

(i) Formulation of the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration of the Directors, Key Managerial Personnel and other employees.

(ii) Formulation of criteria for evaluation of Independent Directors and the Board.

(iii) Devising a policy on Board diversity.

(iv) Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal.

(v) Whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.

(vi) Recommend to the Board, all remuneration, in whatever form, payable to the senior management.

On recommendation of the Nomination and Remuneration Committee, the Board has adopted the policy on appointment of Directors, Independent Directors and Key Managerial Personnel and remuneration payable to them. As mandated, the said policy is posted on the website of the Company https:// www. forcemotors.com/assets/Others/Remuneration-Policy-New.pdf

Audit Committee

The Audit Committee comprised of 03 Directors ason31stMarch 2023:

• Mr. Mukesh Patel, Chairman of the Committee, Independent Director

• Mr.ArvindMahajan,Member, Independent Director

• Mr. Prasan Firodia, Member, Managing Director

The Committee met four times during the Financial Year 2022-23. The details of attendance of the members in the Committee meetings, are as follows:

Name of the Member	Date of meetings and details of attendance
	27.05.2022	13.08.2022	11.11.2022	09.02.2023
Mr. Pratap Pawar*	P	P	--	--
Mr. Arun Sheth*	A	P	--	--
Dr. Indira Parikh*	P	P	--	--
Mr. Mukesh Patel#	--	--	P	P
Mr. Arvind Mahajan#	--	--	P	P
Mr. Prasan Firodia#	--	--	P	P

* Ceased to be the director and member of the Committee w.e.f. 12th September 2022.

# Appointed as the member of the Committee w.e.f. 27th September 2022.

The terms of reference of the Audit Committee include:

(i) Oversight of Companys reporting processes and financial information, review of Financial Statements, both audited and unaudited.

(ii) Review of accounting policies and practices, review of compliance with accounting standards, discussion with statutory auditors before the audit commences and post audit, review of auditorsRs Independence and performance.

(iii) Recommendation of appointment and remuneration of statutory auditors and cost accountants, internal auditors, approval of appointment of Chief Financial Officer.

(iv) Review and approval of related party transaction(s), decide the principles for grant of omnibus approval for related party transaction(s).

(v) Oversee the vigil mechanism, evaluation of internal financial controls and risk management systems.

(vi) Review of utilization of loans/advances/investments made by the Company and its subsidiaries.

(vii) Other areas indicated in the SEBI (LODR) Regulations, 2015 and as per the provisions of Section 177 of the Act.

The Audit Committee reviewed the Unaudited Financial Results (Provisional) for the first three quarters in its Meetings held on 13th August 2022,11th November 2022 and 9th February 2023 respectively; and Audited Financial Accounts for the Financial Year ended 31st March 2023 in its meeting held on 29th May 2023. During the year under report, the Audit Committee interacted with the Statutory Auditors and Internal Auditors of the Company regarding internal control systems, discussed the financial results / cost accounting records, and also held a post statutory audit verification of the financial/cost accounts.

The Committee also interacted with the executives of the Company on finance related matters. The Committee reviewed the risk management policies, insurance covers taken by the Company, purchase procedures of raw materials and components for manufacture of various types of motor vehicles and also the foreign exchange exposure of various transactions.

The remuneration of the Auditors was decided in consultation with the Audit Committee. Extensive data / details connected with the financial management of the Company and on other related aspects were submitted to the Committee in each of the meetings.

The Certificate as per Regulation 33(2)(a) of the SEBI (LODR) Regulations, 2015 from the Managing Director and the Chief Financial Officer was also submitted to the Audit Committee and to the Board. The Audit Committee is empowered to require presence of any of the employee of the Company. No employee has sought access to the Audit Committee during the year under report.

Stakeholders Relationship Committee

The Stakeholders Relationship Committee comprised of 03 Directors as on 31stMarch 2023:

• Lt. Gen. Dr. D. B. Shekatkar (Retd.), Chairman of the Committee, Independent Director

• Mr. Abhaykumar Firodia, Member

• Mr. Prasan Firodia, Member

The Committee met from time to time for approving requests for the issue of duplicate share certificates, transmission and to deal with other matters.

Name of the Member	Date of meetings and details of attendance
	11.11.2022	22.12.2022	09.01.2023
Lt. Gen. Dr. D. B. Shekatkar (Retd.)*	P	P	P
Mr. Abhaykumar Firodia	P	P	P
Mr. Prasan Firodia	P	P	P
Mr. Nitin Desai#	NA	NA	NA

# Ceased to be the director and Chairman of the Committee w.e.f. 12th September 2022.

* Appointed as the Chairman of the Committee w.e.f. 27th September 2022.

During the year under report, 13 shareholders complaints were received and all these complaints were resolved to the satisfaction of the concerned Members. As of 31st March 2023, no complaint was pending to beresolved.

Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee comprised of 03 Directors ason31stMarch 2023:

• Mr. Mukesh Patel, Chairman of the Committee, Independent Director

• Mr.AbhaykumarFirodia,Member

• Mr. Prasan Firodia, Member

The Committee met once during the Financial Year 2022-23. The details of attendance of the members in the Committee meetings, are as follows:

Name of the Member	Date of meetings and details of attendance 27.05.2022
Mr. S Padmanabhan, Chairman*	P
Mr. Nitin Desai, Member*	P
Mr. Mukesh Patel, Chairman#	NA
Mr. Abhaykumar Firodia, Member#	NA
Mr. Prasan Firodia, Member#	NA

* Ceased to be the Director and Chairman / Member of the Committee w.e.f. 12th September 2022.

# Appointed as Chairman / Member after the meeting of the Committee held on 27th May 2022.

The Committee recommends Corporate Social Responsibility (CSR) activities to the Board, approves the CSR activities to be undertaken and amounts to be spent over the same. The Committee also monitors the CSR activities of the Company and is entrusted to formulate mechanism for transparent implementation of the same. The Committee reviews and ensures compliance with the requirement of the provisions of the Act and the CSR Rules.

During the year under report, the Committee met once on 27th May 2022.

Risk Management Committee

The Risk Management Committee comprises of 04 directors of the Company:

• Mr. Abhaykumar Firodia, Chairman of the Committee and the Board

• Mr. Prasan Firodia, Member, Managing Director

• Mr. Arvind Mahajan, Member, Independent Director

• Mr. Prashant V. Inamdar, Member, Executive Director (Operations)

The Committee met twice during the Financial Year 2022-23. The details of attendance of the members in the Committee meetings, are as follows:

Name of the Member	Date of meetings and details of attendance
	16.09.2022	15.03.2023
Mr. Abhaykumar Firodia	P	P
Mr. Prasan Firodia	P	P
Mr. Arvind Mahajan*	--	P
Mr. Prashant V. Inamdar	P	P
Mr. Nitin Desai#	NA	NA

* Appointed as the member of Committee w.e.f. 27th September 2022.

# Ceased to be the Director and Member of the Committee w.e.f. 12th September 2022.

The terms of reference of the Risk Management Committee are as under:

(1) To formulate a detailed risk management policy which shall include:

(a) A framework for identification of internal and external risks specifically faced by the listed entity, in particular including financial, operational, sectoral, sustainability (particularly, ESG related risks), information, cyber security risks or any other risk as may be determined by the Committee.

(b) Measures for risk mitigation including system sand processes for internal control of identified risks.

(c) Business continuity plan.

(2) To ensure that appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the Company;

(3) To monitor and oversee implementation of the risk management policy, including evaluating the adequacy of risk management systems;

(4) To periodically review the risk management policy, at least once in two years, including by considering the changing industry dynamics and evolving complexity;

(5) To keep the board of directors informed about the nature and content of its discussions, recommendations and actions to be taken;

(6) The appointment, removal and terms of remuneration of the Chief Risk Officer (if any) shall be subject to review by the Risk Management Committee.

The Risk Management Committee will coordinate its activities with other Committees, in instances where there is any overlap with activities of such Committees, as per the framework laid down by the Board of Directors.

The details of the last three Annual General Meetings and resolutions passed through Postal Ballots are as under:

Annual General Meeting / Postal Ballot held on	Time	Location	Number of Special Resolutions	Subject of Special Resolution
29th September 2020	3.00 p.m.	Through Video Conferencing	02	1. Modification in the terms and conditions, related to remuneration payable to Mr. Prasan Firodia as Managing Director of the Company. 2. Adoption of the new set of Regulations as the Articles of Association of the Company.
Postal Ballot on 10th February 2021	NA	NA	02	1. Authorization to offer, issue and allot Non- convertible Debentures (NCDs) on private placement basis aggregating upto 500 crore. 2. Fixing of borrowing limits and creation of charge, mortgage or hypothecation on the assets of the Company in connection with the borrowings.
28th September 2021	3.00 p.m.	Through Video Conferencing	02	1. Re-appointment of Mr. Anant Talaulicar as an Independent Director 2. Re-appointment of Lt. Gen. Dr. D B Shekatkar (Retd.) as an Independent Director
28th September 2022	3.00 p.m.	Through Video Conferencing	04	1. Appointment of Mr. Vallabh Bhanshali (DIN: 00184775) as a Director and as an Independent Director. 2. Appointment of Mr. Mukesh Patel (DIN: 00053892) as a Director and as an Independent Director. 3. Approval for payment of minimum remuneration to Mr. Prasan Firodia, Managing Director (DIN: 00029664). 4. Approval for payment of minimum remuneration to Mr. Prashant Inamdar, Executive Director (DIN: 07071502).
Postal Ballot on 25th December 2022	NA	NA	01	1. Appointment of Ms. Sonia Prashar (DIN: 06477222) as a Director and as an Independent Director of the Company.

5. Means of Communication

The quarterly and annual financial results of the Company are communicated forthwith to the stock exchange and shareholders, on approval by the Board.

The quarterly, half-yearly and the annual financial results of the Company are published in the leading newspapers ‘Financial Express, ‘Business Standard (English newspapers) and ‘Loksatta (Marathi newspaper).

The quarterly results of the Company are available on the Companys website www.forcemotors.com

No presentation was made to any institutional investor or analyst during the Financial Year 2022-23.

6. Policies as mandated under the SEBI (LODR) Regulations, 2015

• Archival Policy

Pursuant to Regulation 30(8) of the SEBI (LODR) Regulations, 2015, every listed company shall disclose on its website all such events or information which have been disclosed to the stock exchange(s) under Regulation 30. Such disclosures shall be posted on the website of the Company for a minimum period of five years and thereafter as per the archival policy of the Company. Accordingly, Archival Policy as approved by the Board of Directors of the Company can be accessed from the Companys website at https://www.forcemotors.com/ assets/Others/archival-policy.pdf

• Dividend Distribution Policy

The Dividend Distribution Policy as approved by the Board of Directors of the Company can be accessed from the Companys website at https://www.forcemotors.com/assets/ Others/Dividend-Distribution-Policy.pdf

• Whistle Blower Policy/Vigil Mechanism

The Whistle Blower Policy / Vigil Mechanism addresses complaints w.r.t. leakage of unpublished price sensitive information in relation to the Company and prescribe the manner in which such cases shall be investigated. The Audit Committee oversees the genuine concerns expressed by the employees and Directors. The Company has also provided adequate safeguards against the victimization of employees and Directors who express their concerns. The details of the mechanism / policy are disclosed on the website of the Company at https://www.forcemotors.com/assets/Others/Whiste-Blower-Policy.pdf

• Policy on materiality of Related Party Transactions

The Board has formulated a policy on materiality of the Related Party Transactions (RPTs) pursuant to the SEBI (LODR) Regulations, 2015. The policy has been revised pursuant to the amendments in the said Regulations, for revising threshold limits for determining materiality of RPTs entered by the Company during a financial year or any modification to the existing RPTs. The limits will be reviewed by the Board of Directors once in 3 (three) years. Web link for the policy is https://www.forcemotors.com/assets/Others/Policy_on_Ma teriality_of_Related_Party_Transactions.pdf

• Policy for determining Material Subsidiaries & its Governance Framework

The Board has formulated a policy for determining material subsidiaries pursuant to the SEBI (LODR) Regulations, 2015.

Web link for the policy is https://www.forcemotors.com/ assets/Others/Policy-for-determining-Material-Subsidiaries- &-its-Governance-Framework.pdf

• Code of Practices & Procedures for Fair Disclosure of Unpublished Price Sensitive Information and Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting ofTrading by Designated Persons

The Company has a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (the Code for UPSI) and also a Code of Internal Procedures And Conduct for Regulating, Monitoring and Reporting of Trading by Designated Persons (the Code of Conduct) in pursuance to the Regulation 8 and Regulation 9, respectively of the SEBI (Prohibition of Insider Trading) Regulations, 2015.

The above Codes can be accessed at https://www. forcemotors.com/assets/Others/Code-of-conduct-as-per- Insider-Trading-Regulations.pdf

7. Other Disclosures

• Materially significant related party transactions

During the year under review, there were no material RPTs entered into by the Company as per the threshold limits set out in Companys Policy on Materiality of the Related Party Transactions.

• Details of non-compliance etc. during the last three years

The Company has been compliant of the provisions w.r.t. Corporate Governance. No penalties were imposed by the Stock Exchange or the SEBI on the Company in any matter related to capital market(s) during the last three years.

• Utilization of funds raised through preferential allotment or qualified institutional placement

There is nothing to report under this heading.

• Commodity Price Risk and Commodity Hedging Activities

The details of Commodity Price Risk and Hedging Activities related to the same have been covered in Note No. 39 of the Financial Statement relating to Financial Risk Management.

• Credit ratings

During the year under report, the Company obtained the following credit ratings for its bank loan facilities and Non- Convertible Debentures issued:

Credit rating agency	Type of facilities rated	Rating assigned (Previous rating)
CRISIL	142.5 Crore Secured Non-Convertible Debentures	CRISIL AA / Stable (Reaffirmed)
	Bank Loan facilities amounting to 1,507 Crore :
	Long Term	CRISIL AA / Stable (Reaffirmed)
	Short Term	CRISIL A1 + (Reaffirmed)

• Total lees paid to the Auditors

Please refer the details of payments made by the Company to its Auditors during the period under review, in Note No. 27 to the Financial Statement under a separate heading.

None of the subsidiaries of the Company made any payment to the Auditors of the Company, during the period under review.

• Loans and advances to firms/entities where the directors are interested

During the year under review, no loans or advances in the nature of loan were given by the Company or its subsidiaries to the firms/entities where the directors are interested.

• Disclosure in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

Please refer the disclosure under this head in the Boards Report.

8. Compliance of Corporate Governance and SEBI (LODR) Regulations, 2015.

The Company has complied with the requirements w.r.t. Corporate Governance Report as specified in the Schedule V of the SEBI (LODR) Regulations, 2015. The Company has submitted quarterly compliance report on Corporate Governance to the Stock Exchange within prescribed timelines, during the Financial Year. The Company has complied with mandatory requirements of the SEBI (LODR) Regulations, 2015.

The Company has complied with the discretionary requirements as specified in Part E of Schedule II as under:

• The Board

The Chairman of the Company is also an Executive Director; hence there is nothing to report under this heading.

• Shareholder Rights

The quarterly/half-yearly/annual results, after they are taken on record by the Board of Directors, are sent forthwith to BSE Limited. The results, in the prescribed format are published in the newspapers as per the requirements under the SEBI (LODR) Regulations, 2015.

• Modified opinion(s) in Audit Report

The Company confirms that its Financial Statement is with unmodified audit opinion.

• Separate posts of Chairperson and the Managing Director or the Chief Executive Officer

Mr. Abhaykumar Firodia, Chairman, is also the Managing Director of the Company. He is also related to Mr. Prasan Firodia, the Managing Director.

• Reporting of Internal Auditor

The Internal Auditor of the Company reports to the Audit Committee.

9. General ShareholdersRs Information

• Scheduled AGM

The 64th AGM of the Shareholders of the Company will be held before 30th September 2023.

• Financial Year

The Financial Year observed by the Company is 1st April of a yearto 31st March of the following year.

• Financial Calendar

Unaudited Financial Results will be published on or before:

For Quarter 1:14th August ForQuarter2:14th November For Quarter 3: 14th February Audited Results :30th May

• Payment of Dividend

The Board in its Meeting held on 29th May 2023; has recommended a final dividend of 10/- per equity share on 1,31,76,262 equity shares, for the Financial Year ended 31st March 2023. The dividend, if declared by the Members of the Company, will be paid within 30 days from the date of the 64th AGM.

• Record Date

The details of Record Date forms part of the Notice of the 64th AGM.

• Listing on Stock Exchange

Shares of the Company are listed on the BSE Limited. Annual Listing fee for the Financial Year 2023-24 has been paid to BSE Limited.

• Stock Code

The Stock Code allotted by BSE Limited is 500033.

• Share Price performance vis-a-vis BSE Sensex

Performance of share price of the Company during the Financial Year 2022-23 in comparison to BSE Sensex is given as under:

Month	S&P BSE Sensex		FML Share Price
	High	Low	High	Low
Apr-22	60,845.10	56,009.07	1,247.35	1,028.50
May-22	57,184.21	52,632.48	1,191.90	991.80
Jun-22	56,432.65	50,921.22	1,119.40	918.85
Jul-22	57,619.27	52,094.25	1,061.95	985.00
Aug-22	60,411.20	57,367.47	1,327.50	1,028.10
Sep-22	60,676.12	56,147.23	1,442.95	1,202.50
Oct-22	60,786.70	56,683.40	1,397.00	1,206.00
Nov-22	63,303.01	60,425.47	1,622.95	1,313.90
Dec-22	63,583.07	59,754.10	1,603.90	1,316.00
Jan-23	61,343.96	58,699.20	1,582.50	1,390.00
Feb-23	61,682.25	58,795.97	1,488.45	1,203.05
Mar-23	60,498.48	57,084.91	1,299.00	1,085.20

• Distribution of Shareholding:

Distribution of shareholding as on 31stMarch 2023 was as under:

Category (Shares)	Number of shareholders	Percentage to total shareholders	Number of shares	Percentage to total number of shares held
1 to 500	54,196	97.82	22,28,424	16.91
501 to 1000	643	1.16	4,77,768	3.63
1001 to 2000	308	0.56	4,34,038	3.29
2001 to 3000	87	0.16	2,19,218	1.66
3001 to 4000	42	0.08	1,52,722	1.16
4001 to 5000	32	0.06	1,50,949	1.15
5001 to 10000	58	0.10	4,06,659	3.09
10001& above	35	0.06	91,06,484	69.11
Total	55,401	100.00	1,31,76,262	100.00

• Share Transfer Agent

The Companys Registrar and Share Transfer Agent (RTA) is Link Intime India Private Limited, situated at Block No. 202, Akshay Complex, Near Ganesh Temple, Off Dhole Patil Road, Pune - 411001, who handles the demat and physical share transfers as well as other shares related activities of the Company.

• Share Transfer System

Applications for transfers, transmission are received by the Company at its Registered Office or at the office of its RTA and are processed by the RTA on regular basis. The requests for transfer of shares are approved only in dematerialized form and the same are duly processed by National Securities Depository Limited / Central Depository Services (India) Limited in the electronic form through the respective depository participants. As on the date of report, no transfer and transmission request of shares held in physical form is pending. During the year under report, the Company processed 28 transmissions and 58 requests for dematerialization. There was no request for rematerialisation of shares.

• Dematerialization/Rematerialisation of Shares

The shares of the Company are available for trading in depository system of both National Securities Depository Limited and Central Depository Services (India) Limited. The International Securities Identification Number (‘ISIN) code allotted to the shares of the Company is INE451A01017.

As on 31st March 2023,97.84% of the Companys shares were held in dematerialized form and 2.16% in physical form.

• The Company has not issued any GDR, ADR or Warrants or Convertible Instruments.

• CIN

The Corporate Identity Number allotted to the Company is L34102PN1958PLC011172.

• Registered Office

The Companys registered office address is Mumbai-Pune Road, Akurdi, Pune-411 035, Maharashtra.

• Plant locations

The Companys plants are located at the following places:

(a) Mumbai - Pune Road, Akurdi, Pune - 411035, Maharashtra.

(b) Plot No.3, Sector No.1, Industrial Area, Pithampur,

District Dhar - 454 775, Madhya Pradesh.

(c) Gat no. 330 (P), 331, 332, 312 / 5 / 6 / 7 and 355 Village Nanekarwadi, Chakan, Taluka Khed, District Pune - 410 505, Maharashtra.

(d) Mahindra World City, Panchayat Anjur, Taluka Chengalpattu, District Kancheepuram - 603 004, Tamilnadu.

The address for correspondence is:

• Mr. Nikhil Deshpande

Company Secretary & Compliance Officer

Force Motors Limited

Mumbai - Pune Road, Akurdi, Pune - 411 035, Maharashtra Phone : (020) 27476381

e-mail : compliance-officer@forcemotors.com or

• Mr. Sandip Pawar

Link lntime India Private Limited

Block no. 202, Akshay Complex, Near Ganesh Temple, Off Dhole Patil Road, Pune - 411 001, Maharashtra

Phone : (020) 26161629 / 26160084 Telefax No. : (020) 26163503 e-mail : pune@linkintime.co.in

D. AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE AND DECLARATION ON CODE OF CONDUCT

The certificate obtained from the Statutory Auditors of the Company regarding compliance of conditions on Corporate Governance, as perthe provisions of the SEBI (LODR) Regulations, 2015 is annexed to the Report. The Code of Conduct approved by the Board of Directors of the Company is available on the website of the Company. The confirmation about compliance of the code is being obtained on annual basis. A declaration signed by the Managing Director to that effect is obtained. The Company has complied with the mandatory requirements prescribed under the SEBI (LODR) Regulations, 2015.

E. UNPAID/UNCLAIMEDDIVIDEND

In terms of the provisions of Section 124 of the Act, the Company is obliged to transfer dividends which remain unpaid or unclaimed for a period of seven consecutive years from the date of transfer to Unpaid Dividend Account, to be credited to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Accordingly, during the year under review unclaimed/unpaid dividend of 5,93,092/- was transferred to IEPF.

Members are hereby informed that the seven years period for payment of the dividend pertaining to the financial years as given below will expire on respective dates and thereafter the amount standing to the credit in the said account will be transferred to the IEPF. Members are therefore requested to encash the dividend at the earliest.

Dates for transfer of Unclaimed Dividend to the fund :

Sr. No. Financial Year	Date of Dividend Declaration	Date on which Dividend become Due for Transfer to IEPF
1. 2015-16*	12-Mar-2016	18-Apr-2023
2. 2016-17	13-Sep-2017	12-Oct-2024
3. 2017-18	11-Sep-2018	12-Oct-2025
4. 2018-19	19-Sep-2019	22-Oct-2026
5. 2019-20	29-Sep-2020	03-Nov-2027
6. 2020-21	28-Sep-2021	03-Nov-2028
7. 2021-22	28-Sep-2022	31-Oct-2029

* Transferred to IEPFon 10-May-2023

F. TRANSFER OF SHARESTO IEPF

During the year, the Company has transferred 2,248 shares on 22nd November 2022 to the IEPF. The shares were transferred on account of dividends unclaimed for seven consecutive years.

The voting rights on these shares shall remain frozen until the rightful owner claims the shares.

All the benefits accruing on these shares pursuant to any corporate action and any further dividend received on the shares shall be credited to the designated Demat Account / Bank account of the IEPF.

G. UNCLAIMEDSHARECERTIFICATESANDSUSPENSEACCOUNT

Share certificates in respect of 2,612 shares earlier issued as right shares or bonus shares were returned undelivered. The Company had intimated this fact to the concerned Members from time to time including reminders issued as per the requirement. These unclaimed shares were transferred to the Force Motors Limited - Unclaimed Securities Suspense Account.

Of the above mentioned shares, 2,151 shares were transferred to IEPF, in accordance with Section 124(6) of the Act and Rules made thereunder. List of the Members whose shares are held in Force Motors Limited - Unclaimed Securities Suspense Account, is hosted on the website of the Company As per the SEBI (LODR) Regulations, 2015, all corporate benefits in terms of securities accruing on these shares shall be credited to the Force Motors Limited-Unclaimed Securities Suspense Account (for 200 shares) and to the demat account of IEPF (for 2,151 shares).

The details of the above shares are as given below:

(a) Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year: 461 Equity Shares of 10/- each of 3 shareholders.

(b) Number of shareholders who approached the Company for transfer of shares from suspense account during the year: 02

(c) Number of shareholders to whom shares were transferred from suspense account during the year: 02

(d) Aggregate number of shareholder and the outstanding shares in the suspense account lying at the end of the year: 200 Equity Shares of Rs. 10/- each of 01 shareholder.

(e) Voting rights on these shares shall remain frozen till the rightful owner of these shares presents a claim for the same.

H. MD AND CFO CERTIFICATION

The Managing Director and the Chief Financial Officer give an annual certification on financial reporting and internal controls to the Board in terms of the SEBI (LODR) Regulations, 2015. The Managing Director and the Chief Financial Officer also give quarterly certification on financial results while placing the financial results before the Board in terms of Regulation 33(2) of the SEBI (LODR) Regulations, 2015.

J. CERTIFICATEFROM COMPANYSECRETARYIN PRACTICE

We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Force Motors Limited having CIN L34102PN1958PLC011172 and having registered office at Mumbai Pune Road, Akurdi Pune, MH 411035 (hereinafter referred to as "the Company"), produced before us by the Company & its officers for the purpose of issuing this Certificate, in accordance with the Regulation 34 (3) read with Schedule V Para- C Sub clause 10 (i) of the Securities Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015.

In our opinion and to the best of our information and according to the verification (including Director Identification Number (DIN) status at the portal (www.mca.gov.in) as considered necessary and explanations furnished to us by the Company and its officers, we hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending on 31st March 2023 have been debarred or disqualified from being appointed or continuing as Director of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other Statutory Authority.

Sr. No. Name of Director	DIN	Date of Appointment in Company
1. Mr. Abhaykumar Navalmal Firodia	00025179	01/07/2002
2. Mr. Prasan Abhaykumar Firodia	00029664	30/09/2006
3. Mr. Arvind Rajindernth Mahajan	07553144	30/07/2016
4. Mr. Dattatray Balajirao Shekatkar	02676828	13/02/2019
5. Mr. Vallabh Roopchand Bhanshali	00184775	13/08/2022
6. Mr. Mukesh Mangalbhai Patel	00053892	13/08/2022
7. Ms. Sonia Prashar	06477222	28/09/2022
8. Mr. Prashant Vijay Inamdar	07071502	16/01/2015

Ensuring the eligibility for the appointment / continuity of every Directoron the Board isthe responsibility of the managementof the Company. Our responsibility is to express an opinion on these based on our verification. This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

Place: Pune	Name: I. U. Thakur
Date: 4thMay2023	MembershipNo.:2298
	CP No.: 1402
	Peer Review no. 1959 / 2022
	UDIN:F002298E000252658