m m forgings ltd Directors report

The Directors have the pleasure in presenting the 77^th Annual Report and the audited accounts of the Company for the year ended 31^st March 2023.

1. FINANCIAL RESULTS FOR THE YEAR ENDED 31^ST MARCH 2023:

S. No. Particulars	2022-23	2021-22
1.1 Forging sales	1,39,511.00	1,08,798.03
1.2 Profit before items/ exceptional extraordinary items and Tax	17,484.41	13,289.40
1.3 Exceptional/Extraordinary Items	0.65	0.13
1.4 Profit Before Tax	17,485.06	13,289.53
1.5 Tax
For current year	4,625.00	2,599.52
Relating to previous years	-	84.55
Deferred Tax / MAT credit	301.19 4,926.19	1,429.48 4,113.55
1.6 Profit after Tax	12,558.22	9,175.99

2. DIVIDEND AND FINANCIAL RESULTS

. Particulars	2022-23	2021-22
2.1 Profit after Tax	12,558.22	9,175.99
2.2 Balance in P & L Account	123.71	121.17
2.3 Profit available for appropriation	12,681.93	9,297.16
2.4 Transfer to General Reserve	11,110.00	7,725.00
2.5 Proposed Dividend	1,448.45	1,448.45
2.6 Balance carried forward	123.48	123.71

The Directors declared 60% dividend (C6/- per share) of face value of C10/- each, in their meeting held on 17 May 2023. The record date fixed for determining the shareholders for payment of dividend is 29 May 2023. The Directors does not recommend any final dividend for the FY 2022-23. The dividend pay-out is in accordance with the Companys Dividend Distribution Policy.

3. SHARE CAPITAL:

There was no change in the share capital during the year.

4. HIGHLIGHTS OF THE COMPANYS OPERATIONAL PERFORMANCE:

4.1. The Company has overall Revenue, of above C1,400 crores. 4.2. The Companys PBT is C174.85 crores.

4.3. The Companys PAT stands at C125.58 crores.

4.4. The Company continues to be a net foreign exchange earner. The net foreign exchange earnings during the current year were C430.53 crores.

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

4.6. The domestic sales is C906 crores and the export sales stands at C490 crores. 4.7. The Company has declared an interim dividend of 60% dividend for the year.

5. 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).

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

Raw Material - C734.36 Crores (51.52 %)

7. MANAGEMENT DISCUSSION AND ANALYSIS

Economic Overview – Global ?

The year 2022 proved to be a tumultuous period for the global economy. Just as the world was on the mend post multiple waves of COVID, the Russia-Ukraine conflict induced a trail of irreversible economic, social and political effects. Global inflation touched an all-time high of 8.7% with many developed economies witnessing double digit inflation figures for the first time in many decades.

The surge in inflation witnessed across commodities in the aftermath of the conflict , added to the already elevated inflationary concerns across economies grappling with the fractured supply chain networks resulting from the COVID fallout. This led to unprecedented, synchronized, increases in policy rates across all major economies which not just resulted in monetary policy tightening across the emerging economies but also led to significant forex reserve challenges in many economies, ultimately impacting business conditions across many markets.

With global growth decelerating as the effects of monetary tightening and Russias war in Ukraine continue to weigh on activity, the year 2023, equally looks to be a challenging year for the global economy. Persistent inflationary pressures, and recent financial sector problems in the United States and Europe, are injecting additional uncertainty into an already complex economic landscape.

Global growth at 3.4% in 2022 will bottom out at 2.8% in 2023, before rising modestly to

3.0% in 2024. Global headline inflation is set to fall from 8.7% in 2022 to 7.0% in 2023 on the back of lower commodity prices, but underlying (core) inflation is likely to decline more slowly. Inflations return to target is unlikely before 2025 in most cases. Once inflation rates are back to targets, deeper structural drivers will likely reduce interest rates toward their pre-pandemic levels.

The anaemic outlook reflectsthe tight policy stances needed to bring down inflation,the fallout from the recent deterioration in financial conditions, the ongoing war in Ukraine, and growing geo-economics 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.

Economic Overview – India

Indias growth continues to be resilient and set to be the second-fastest growing economy in the G20 in F23, despite some signs of moderation in growth, decelerating global demand and the tightening of monetary policy to manage inflationary pressures. ?

The growth was underpinned by strong investment activity bolstered by the governments capex push and buoyant private consumption, particularly among higher income earners. Inflation remained high, averaging around 6.7% in F23 but the current-account deficit narrowed in Q3F23 on the back of strong exports and easing global commodity prices.

Indias economic growth rate is stronger than in many peer economies and reflects relatively strong domestic consumption and lesser dependence on global demand. Indias Gross Domestic Product (GDP) grew by 7.2% in F23 against 9.1% expansion in previous fiscal.

Due to headwinds from the impact of rapid monetary policy tightening in the advanced economies, heightened global uncertainty and the lagged impact of domestic policy tightening, Indias GDP is expected to slow down to 6% in F24 and is projected to rise to 6.9% in F25 and F26 and 7.1% in F27.

The automotive industry will remain vulnerable to global headwinds in 2023 including the energy crisis, spike in fuel price due to the conflict,slower global demand and continued supply-chain problems. Steel prices has reduced globally in F23, while in India, it continues to be stable, after plotting a volatile season since F21.

Based on the current market scenario, domestic equity markets could experience some volatility in the short term. However, in the long run, Indian equity markets are likely to remain attractive for investors due to the countrys strong economic fundamentals and growth prospects.

Indias automotive industry is poised to become the worlds third-largest market by 2030, showcasing its dominance in the international heavy vehicles arena. As the industry contributes significantly to Indias GDP and manufacturing sector, the nation is also emerging as a leader in Electric Vehicle (EV) adoption. Climate action has become more important globally, and enterprises focusing on sustainability, renewable energy and EV sectors will receive attention from investors. The EV market is expected to grow at a CAGR of 49% between 2023-2030, with annual sales reaching 10 million units by 2030.

Market segments outlook:

Key segment analysis: Commercial Vehicles (CV)

The Indian domestic market is exuberant and continues to register its growth, 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 owing to the government push on infrastructure development. MHCV Industry is the backbone of Indian Economy and is undergoing technological upgradation through the implementation of Real-Time Driving Emission (RDE) Norms in F24.

In the Indian markets, CV sales increased from 7,17,000 to 9,63,000 Vehicles and total PV Sales increased from 30,70,000 to 38,91,000 vehicles during the year 2022-23 as compared to the previous year. Sales of MHCV increased from 2,41,000 to 3,59,000 Vehicles.

Globally, container availability has improved but with headwinds of inflation and the Ukraine war, growth in export markets is expected to be a challenge. The fall in exports to a few countries has been mainly due to unfavourable forex situation. However, an improvement is expected in the coming months.

The CV Segment plays a significant role of MMF in F23 with overall sales of 80%. Passenger car segment constitutes 11% and others 9%. Further, with increase in share of business in Europe and a positive outlook for class 8 trucks in North America from Q3F23, the market conditions have turned significantly positive and the segment is expected to do well in North America and Europe in F24. The Class 8 truck sales reported at 3,09,615 units in the CY 2022.

Overall Outlook:

Inflation, global trade tensions and economic uncertainties is expected to be crucial in F24.

Overall, the outlook is positive with significant growth in domestic sales. Export market looks to be challenging.

Currency movement: [USD vs INR]

The continued impact of Russia-Ukraine conflict, macroeconomic uncertainties and increase in interest rates by US Federal Reserve from time to time to combat the higher inflation rates had significantly weakened the

INR value, to end the year on 31^st March, 2023 above C82 levels. The Indian Rupee is expected to be under pressure in FY 2023-24 also.

M M FORGINGS – Achievements in F23

The following were achieved during F23, despite global trade tensions and economic uncertainties.

Domestic sales:	Rs 906 crore
Export sales:	Rs 490 crore
Total sales:	Rs 1,395 crore
Overall sales:	Rs 1,425 crore
Production tonnage:	Rs 76,245 Tons

Changes in steel prices which are in line with international markets are generally being passed on to customers as is the industry practice.

We are focusing on launching new products to take advantage of the forging capacities created in the last 4 years. We are also de-bottlenecking to take advantage of the growth in established products.

Key Financial Ratios:
Return on Capital Employed:	18.04%
Return on Networth:	17.76%
Ratio on total outside liabilities: 1.37
Debtors Turnover:	107 days
Inventory Turnover:	4.68
Interest Coverage Ratio:	8.75
Current Ratio:	1.66
Debt Equity Ratio:	0.63
Operating Profit Margin (%):	12.27 %
Net Profit Margin (%):	8.81 %.

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 2023, the Company had 3722 employees. It is their invaluable contribution that has primarily resulted in our Companys position of strength in the industry.

2. Focus on a safe working atmosphere, constantly evolving systems for recognition and reward, consistent communication and imparting skills and training – all these focused on meeting customer needs, characterize the HR development of Hunan Resources of the Company.

Every year, each plant of the Company celebrates Founders Day in a family atmosphere with all employees and their households. This practice has been hampered on account of COVID-19 for the past two years. During F23, the Company continued Founders Day celebration and it was celebrated 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. Regular communication, periodic reviews of practices and training, play a vital role in maintaining safety standards.

2. 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 Companys product is subject to the health of the global economy.

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

4. Further, the consequent inflation in commodity prices, hike in interest rates and prospect of significant demand reduction are risks to be considered in the coming months.

5. 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.

6. Risk Management Committee (RMC) has been formed effective 21 June 2021.

7. RMC shall meet minimum of twice a year.

8. 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 in keeping with market conditions.

2. Utilizing the production capacity of 1,20,000 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.

Sources:

• IMF World Economic Output

• The Economist

• SIAM data

• Act Research

• The World Bank ?

8. TRANSFER TO RESERVE:

A sum of C111.10 Crores has been transferred to General Reserve.

9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has made advance to its wholly-owned Subsidiary Companies viz., DVS Industries Private Limited (outstanding as on 31^st March 2023 - C82.68 Crores) and Suvarchas Vidyut Private Limited (outstanding as on 31^st March 2023 - C8.22 Crores), repayable at prevailing rates. The details of the investments made by the Company are given in the notes to the financial statements.

10. DIRECTORS & KEY MANAGERIAL PERSONNEL:

10.1. Special Recognition for Shri. Vidyashankar Krishnan:

During the year under review, Shri. Vidyashankar Krishnan, Vice Chairman and Managing Director, was conferred as "Indias Top Minds 2022" and has been recognised as one of the "Top Business Leaders of the Nation". The above prestigious award was issued in the "Indian Brand and Leadership Conclave

2022" held on 30 April 2022 at ITC Sheraton, New Delhi organized by The Brand Story Presided by Sri Faggan Singh Kulaste, Minister of State, Ministry of Steel and Special Rural Development, Government of India.

10.2. Directors Appointment / Re-appointment / Cessation:

The Board of Directors at its meeting held on 17 May 2023 has approved the re-appointment of Shri. Vidyashankar Krishnan, Vice-Chairman and Managing Director and Shri. K. Venkatramanan, Joint

Managing Director, for a further period of five years accordance with the Companies Act, 2013 and the Listing Regulations on such terms and conditions of his re-appointment including remuneration, as recommended by the Nomination and Remuneration Committee of directors at their meeting held on 17 May 2023. The shareholders approval is being sought and the resolution forms part of Notice of this AGM.

10.3. Retirement by Rotation:

Smt. Sumita Vidyashankar, holding DIN 00059062, will retire by rotation and being eligible has offered herself for re-appointment.

10.4. 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, and shall hold office till 31^st March 2024. Smt. Kavitha Vijay, Independent Director, was appointed for the second term of five years in the AGM held on 29 September 2020, and shall hold office as Independent Director till

31^st March 2025.

All Independent Directors hold office for a fixed

Shri. N. Srinivasan and Shri. V. Vaidyanathan are exempted from undergoing self-assessment test. Shri A. Gopalakrishnan and Smt. Kavitha Vijay have passed the self-assessment test conducted by the Ministry of Corporate Affairs.

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 FY 2022-23, a separate meeting of Independent Directors was held on 14 November 2022, 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.

10.5. Change in Key Managerial Personnel (KMP):

The Board of Directors at their meeting held on 13 February 2023, has noted the retirement pursuant to superannuation of Smt. J. Sumathi, Company Secretary of the Company effective 31 March 2023. As recommended by Nomination and Remuneration Committee, Shri. Chandrasekar. S, holding ACS Membership number A34736, was appointed as Company Secretary of the Company, effective 1 April 2023.

11. 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 Companys website as below:

https://www.mmforgings.com/uploads/policies/Nomination_and_Remuneration_Policy_(_amended).pdf

12. BOARD AND COMMITTEE MEETING DATES:

During the Financial Year 2022-23, 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.

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

None

14. RISK MANAGEMENT:

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

The Companys Risk Management Committee is overseeing all the risks that the organization faces 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.

15. RELATED PARTY TRANSACTION:

The Company has formulated a policy on related party transactions and the same is uploaded on the Companys website: https://www.mmforgings.com/uploads/policies/Policy_on_Related_Party_Transactions.pdf? There are no ‘Material contracts or arrangement or transactions at arms 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.

16. 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.

Amount to be spent under CSR for F23	- C162.83 lakhs
Excess Spent in F22	- C 26.68 lakhs
Amount spent in F23	- C189.98 lakhs
Excess spent in F23	- C 27.15 lakhs

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

17. PARTICULARS OF EMPLOYEES

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

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

18.1. The ratio of remuneration of each Director to the median remuneration of the employees:

. Name of the Director	Ratio
1 Shri. N. Srinivasan	0.00:1
2 Shri. V. Vaidyanathan	1.87:1
3 Shri. A. Gopalakrishnan	1.87:1
4 Smt. Kavitha Vijay	1.87:1
5 Smt. Sumita Vidyashankar	1.87:1
6 Shri. Vidyashankar Krishnan	318.90:1
7 Shri. K. Venkatramanan	317.66:1

18.2. % increase in remuneration of each Director, KMP, in the financial year:

Name of the Director	% increase / (decrease) in the Remuneration
1 Shri. N. Srinivasan	(77.78)
2 Shri. V. Vaidyanathan	13.43
3 Shri. A. Gopalakrishnan	15.69
4 Smt. Kavitha Vijay	34.09
5 Smt. Sumita Vidyashankar	35.23
6 Shri. Vidyashankar Krishnan	22.33
7 Shri. K. Venkatramanan	21.86
8 Smt. J. Sumathi	4.10
9 Shri. R. Venkatakrishnan	10.80

18.3. % increase in median remuneration of employees in the FY 2022-23 14.60%.

18.4. The number of permanent employees on the rolls of Company: 1941.

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

Name	Designation	CTC (Rs in lakhs)	% of increase	PAT (Rs in lakhs)	% increase in PAT
Shri. Vidyashankar Krishnan	Vice Chairman and Managing Director (CEO)	850.53	22.33	12558.22	36.85
Smt. J. Sumathi	Company Secretary	11.32	4.10
Shri. R.Venkatakrishnan	CFO	17.14	10.80

18.6. Average Increase in Remuneration for employees other than Directors and KMP is 10.10% and average Increase in Remuneration for KMP and Senior Management is 21.90%.

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.

18.7. 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.

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

Date	Paid-up Capital (Shares)	Closing market price per share	EPS	PE Ratio	Market Capitalisation (C in Cr.)
31 March 2023	24140800	833.00	52.02	16.01	2,010.93
31 March 2022	24140800	846.75	38.01	22.28	2,044.12

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

18.10. Affirmation that the remuneration is as per the remuneration policy of the

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

19. SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATIONS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:

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

20. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURRED SINCE 31^ST MARCH, 2023 TILL

THE DATE OF THE REPORT:

NIL

21. 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:

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

21.2. 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^st March 2023 and of the profit or loss of the Company for that period ended on that date;

21.3. The Directors have taken proper and sufficientcare 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;

21.4. The Directors had prepared the annual accounts on a going concern basis;

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

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

22. 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 cov ering all employees and Directors is hosted on the Companys website at: ? https://www.mmforgings.com/uploads/policies/Whistle_Blower_Policy2.pdf.

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

23. 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 Companys 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.

24. 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.

25. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT (BRSR)

In accordance with Regulation 34(2)(f) of the Listing Regulations, with effect from F23, top 1000 companies based on Market Capitalisation as per NSE / BSE as on 31^st March of every Financial Year, are required to disclose BRSR as part of their Directors Report. BRSR, covering disclosures on the Companys performance on Environment, Social and Governance parameters for F23, 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.

26. 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^st March 2022 and the draft Annual Return of the Company for the year ended 31^st March 2023 is available in the Companys website in the following link. https://www.mmforgings.com/Investors/annual_return

27. 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:

27.1. 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.,

27.2. Further, Independent Directors, in their meeting held on 14 November 2022 (without the participation of non-Independent Director and personnel from management), had considered and evaluated the Boards performance on the whole, the performance of the Chairman and other non-independent Directors.

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

28. FAMILIARISATION OF PROGRAMME ARRANGED FOR INDEPENDENT DIRECTORS

28.1. 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.

28.2. 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.

28.3. They are also made aware of Companys Board and Board Committee framework, policies and procedures.

28.4. As a part of Boards discussions, presentations on business of the Company are made to the Directors from time to time.

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

28.6. Each member of the Board, including the independent Directors, have been given complete access to any information relating to the Company. 28.7. The details of familiarisation programme are available on the Companys website in the link given below: https://www.mmforgings.com/uploads/Familiarisation_programme/Familirisation_Programme.pdf

29. AUDITORS: 29.1. 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 second year in their first term of five consecutive years, from the conclusion of this AGM.

The Auditors Report for the financial year 2022-23 does not contain any qualification, reservation or adverse remark and the same is attached with the annual financial statements.

29.2. 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 2023-24.

The Secretarial Audit Report for the Financial Year 2022-23 given by Shri. V. Shankar is attached to this Report. The Secretarial Audit Report does not contain any qualification, reservations or adverse remarks.

29.3. 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 2023-24.

30. EXPLANATION TO AUDITORS 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.

31. 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.

32. PERFORMANCE OF SUBSIDIARIES:

32.1. 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, D V S has achieved a turnover of C95.54 Crores as against C66.51 Crores in F22. The EBITDA stood at C16.41 crores as against loss of C5.25 Crores in F22.

32.2. Cafoma Autoparts Private Limited:

The Company has acquired Cafoma Autoparts Private Limited (Cafoma) for C33 Crores, including subordinated debt of C5 Crore on 15 October 2021. It is the wholly-owned subsidiary of MM Forgings

Limited and is engaged in manufacturing and machining of crankshaft.

Cafoma achieved a turnover of C10.76 Crores in F23 as against C10.09 Crores achieved in F22. The EBITDA in F23 stands at C2.97 Crores as against C3.17 Crores in F22. ? In order to have integration of business operations and consolidation of the activities leading to operational synergies and to reduce multiplicity of legal and regulatory compliance, the Board of Directors, in their meeting held on 13 February 2023, have approved the scheme of amalgamation of Cafoma with the Company effective 01 April 2023. The Company is in the process of filing necessary applications with National Company Law Tribunal and procedural activities are being undertaken for the aforesaid amalgamation process.

32.3. 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 C7.53 Crores with EBITDA reported with a loss of C1.82 Crores.

32.4. 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 C15.84 Crores in equity, thereby becomes a holding Company of

ARPL.

APRL is engaged in business of design, manufacturing of parts / components for EVelectric power train, electric motors and electric controllers / drives gearbox and ADAS systems, 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 Q3F24.

33. DEPOSITS:

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

34. 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.

35. 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

36. 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 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.

	For and On behalf of the Board
	VIDYASHANKAR KRISHNAN
Place: Chennai	Chairman of the Meeting
Date: 17 May 2023	(DIN 00081441)