Balu Forge Industries Ltd Directors Report

Dear Shareholders,

The Board of Directors is pleased to present the 36^th Annual Report of Balu Forge Industries Limited ("the Company") together with the Audited Financial Statements of the Company for the Financial Year ended 31^st March 2025.

FINANCIAL RESULTS

The Companys financial performance during the year ended 31^st March 2025 compared to the previous financial year is summarised below:

H ( in Lakhs)

	Standalone		Consolidated
Description	Year ended 31 March 2025	Year ended 31 March 2024	Year ended 31 March 2025	Year ended 31 March 2024
Revenue from operations	59,847.65	38,808.26	92361.74	55985.58
Other Income	1,743.43	1,062.72	1,714.30	1,023.45
Total Revenue	61,591.08	39,870.98	94,076.04	57,009.03
Total Expenses	43,159.39	31,139.02	68,681.78	45,642.75
(Loss) / Profit before tax and exceptional items	18,431.69	8,731.96	25,394.26	11,366.28
Profit before tax	18,431.69	8,731.96	25,394.26	11,366.28
Tax expense	5,008.72	2,017.46	5,008.72	2,016.96
Net Profit after tax	13,422.97	6,714.50	20,385.54	9,349.32
Other Comprehensive expense/ (Income), net of Income tax	(4.74)	1.23	182.45	20.74
Balance Transfer to Reserve	13,418.23	6,715.73	20,567.99	9,370.06

The Financial Statements for the year ended 31^st March 2025 have been prepaid as per the Indian Accounting Standards (Ind AS).

REVIEW OF OPERATIONS

During the financial year ended 31^st March 2025, the Company has recorded, on standalone basis, total revenue of H 61,591.08 Lakhs and the Company have earned Net Profit of H 13,422.97 Lakhs as compared to H 38,970.98 Lakhs and H 6.714.50 Lakhs of the previous year, respectively.

On consolidated basis, the Company achieved total revenue of H 94,076.04 Lakhs and the Company has earned Net Profit of H 20,385.54 Lakhs as compared to previous year total revenue of H 57,009.03 Lakhs and Net Profit of H 9,349.32 Lakhs.

There was no change in nature of business of the Company, during the year under review.

OPERATIONAL HIGHLIGHTS

During FY25, Balu Forge Industries Limited undertook significant capacity expansion and infrastructure development. Forging capacity was scaled up to 100,000 TPA with further expansion in progress, while precision machining capacity increased to 45,000 TPA. The Company commissioned advanced equipment, including 16-ton closed-die forging hydraulic hammers, with an 8,000-ton mechanical forging press and 25 ton closed die forging hydraulic press under commissioning. The 46+ acre greenfield facility was advanced, featuring robotic handling, anti-vibration systems, and Industry 4.0-enabled processes, with a dedicated forging and machining line for defence scheduled to commence in H1 FY26.

On the product and R&D front, BFIL enhanced its portfolio across crankshafts, undercarriage parts, turbine blades, aerospace and defence components. Its in-house R&D team of over 75 professionals focused on new alloys, rapid prototyping, and high-precision machining. With product development cycles averaging 3–5 months and product lifecycles spanning beyond 10 years, the Company has further strengthened its innovation capabilities through advanced metallurgical labs, tool rooms, and inspection systems.

The Company also diversified sectoral contributions, with growing presence in defence, aerospace, and railways. Defence remains a strategic priority, with approval to supply over 180 products. While legacy sectors like commercial vehicles continued to expand, their contribution reduced as high-value sectors gained share. Alongside, BFIL expanded its footprint to over 80 countries, servicing 25+ global OEMs, and benefitted from global supply chain shifts under the China+1 and Europe+1 trends.

Operational efficiency remained a key focus, with increased emphasis on value-added fully machined components, integration of 7-axis & 11-axis CNC machining and, automation in forging. These initiatives improved scalability, cost efficiency, and resilience across operations. On the ESG front, the Company has committed to becoming carbon neutral by 2040, transitioning fully to renewable energy by 2035, achieving 100% water recycling by 2027 and Zero Liquid Discharge by 2030, and reducing total waste generation by 2030. In FY25,

BFIL recovered 3,661 MT of waste and spent H7.5 million on CSR initiatives, directly benefitting 517 individuals.

FUTURE OUTLOOK

Balu Forge Industries Limited delivered a robust performance in FY25 with consolidated revenue from operations of Rs. 92,361.74 lakhs, registering a growth of 65.0% over Rs. 55,985.58 lakhs in FY24. EBITDA increased sharply to Rs. 25,110.73 lakhs, up 110.8% from Rs. 11,912.08 lakhs in the previous year, supported by higher volumes, operating efficiencies, and an enhanced product mix. EBITDA margin expanded to 27.2% as against 21.3% in FY24, underscoring the Companys focus on high-value precision machining.

Profit after tax stood at Rs. 20,385.54 lakhs, an increase of 118.0% compared to Rs. 9,349.32 lakhs in FY24, with PAT margin improving to 21.7% from 16.4%. Earnings per share rose to Rs. 19.24 in FY25 compared to Rs. 9.80 in FY24, reflecting a strong year-on-year growth of nearly 97%. Return ratios remained healthy, with ROCE at 30.1% and ROE at 25.4%, driven by robust profitability and efficient capital utilization.

On the balance sheet side, borrowings declined to Rs. 3,591.25 lakhs from Rs. 4,877.53 lakhs in FY24, resulting in an improvement in the net debt-to-equity ratio by 66.7%, positioning the Company nearly debt-free. The cash conversion cycle improved by 25 days to 104 days, while CFO/EBITDA stood at 59%, highlighting strong cash flow management and disciplined working capital practices.

CREDIT RATING

CRISIL Ratings Limited has revised its Credit rating during the year, for its bank facilities as follows:

Instruments	Rating
1 Packing Credit	BBB+/STABLE
2 Post Shipment Credit	A2

The above rating reflects the overall improvement in the credit risk profile of the company backed by strong growth in scale of operations and healthy profitability.

TRANSFER TO RESERVES

The Board of Directors has decided to retain the entire profit generated during the year under review, in the profit and loss reserve account. Accordingly, it is not proposed to transfer any amount to the ‘Reserves from the profit for the year ended 31^st March 2025.

DIVIDEND

The Board of Directors at their meeting held on May 14, 2025, has recommended payment of H 0.15/- at the rate of 1.5% per

fully paid-up equity share of the face value of H10/- each as final dividend for the financial year ended 31^st March 2025. The payment of the final dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM) of the Company. The dividend shall be paid to those shareholders whose name appear in the Register of Members as on the Record Date, on approval by the members at the Annual General Meeting.

In view of the provisions of the Income Tax Act, 1961, dividends paid or distributed by the Company shall be taxable in the hands of the Shareholders. The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source. The proposed dividend been recommended in accordance with the Dividend Distribution Policy of the Company.

DIVIDEND DISTRIBUTION POLICY

The Company has in place a Dividend Distribution Policy in accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same is available on the Companys website at https://www. baluindustries.com/corporate-governance.php

UTILISATION OF PREFERENTIAL ALLOTMENT PROCEEDS

The proceeds of funds raised under preferential Allotments of the Company have been fully utilised as per Objects of the Issue. The disclosure in compliance with the Regulation 32(7A) of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and detailed utilization are provided in the Corporate Governance Report which forms part of this Report.

CHANGES IN SHARE CAPITAL:

Increase in Authorised Share Capital of the Company

The Authorised Share Capital of the Company has increased from H 1,10,00,00,000/- (Rupees One Hundred and Ten Crore Only) divided into 11,00,00,000/- (Eleven Crore) Equity Shares of H 10/- (Rupees Ten only) each to H 1,25,00,00,000/- (Rupees One Hundred and Twenty-Five Crore Only) divided into 12,50,00,000/- (Twelve Crore and Fifty Lakh) Equity Shares of H 10/- (Rupees Ten only).

Issue and Allotment of Equity Shares & Warrants on Preferential Basis

During the FY 2024-25, the Company has issued and allotted:

i. 36,75,000 Equity Shares having face value of H10/- each at an issue price of H 183.60/- fully paid up upon exercising the option available with the Share Warrant Holder (person belonging to the Promoter group).

ii. 45,00,000 Equity Shares to the Non-Promoters (Public Category) on preferential basis of H10/- each for cash at premium of H 350/- aggregating to H 1,62,00,00,000/-.

iii. 93,00,000 Convertible Warrants to persons forming part of promoter group on preferential basis of H 10/-

each for cash at premium of H 350/- aggregating to H 3,34,80,00,000/-, with an option to convert the same into equal number of equity shares of H10/- (Rupees Ten) each at an issue price of H 360/- per share within a period of 18 months from the date of allotment of warrants, as per terms and conditions approved in Extra-Ordinary General Meeting held on 09^th August, 2024.

Share capital as on 31^st March 2025

The paid-up Equity Share Capital as on 31^st March 2025 was stood at H 1,10,76,69,000/- divided into 11,07,66,900 Equity Shares of H 10/- each.

The Company has neither issued any shares with differential rights as to dividend, voting or otherwise nor issued any sweat equity shares and issue shares under Employees Stock Option Scheme as per provisions of Section 62 (1) (b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules 2014, during the year under review.

CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the applicable provisions of the Companies Act, 2013, including the relevant Indian Accounting Standards (Ind AS) as issued by the Institute of Chartered Accountants of India and notified under Section 133 of the Companies Act, 2013 and as required under Regulation 34 of the Listing Regulations, 2015, this Annual Report includes Consolidated Financial Statements for the FY 2024-25.

REPORT ON PERFORMANCE OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company has in total Three (3) Subsidiaries of which Two (2) are Indian and One (1) Overseas and One (1) Associate Company: -

1. Naya Energy Works Private Limited (WOS)

2. Balu Advanced Technologies & Systems Private Limited (WOS)

3. Safa Otomotiv FZ – LLC in Dubai (as a WOS)

4. *Swan Balu Heavy Industries Limited ("SBHIPL") – Associate Company

* SBHIPL was incorporated in 20^th April, 2025 as SPV Company with Swan Energy Limited. The Company holds 40% equity in SBHIPL, pursuant to the said Investment, SBHIPL has become the Associate of Balu Forge Industries Limited w.e.f. 23^rd June, 2025.

The Company does not have any Joint Venture within the meaning of Section 2(6) of the Companies Act, 2013. No material change has taken place in the nature of business of the subsidiaries.

Pursuant to the first proviso to Section 129(3) of the Companies Act, 2013 read with Rule 5 and 8 of the Companies (Accounts) Rules, 2014, the salient features of the financial statements and performance of each subsidiary in Form AOC-1 is disclosed under Annexure-A and forms part of this Report.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the standalone and consolidated financial statements of the Company, and separate audited financial statements in respect of subsidiaries are available on the website of the Company under web link https://www.baluindustries.com/ financial-information.php

The Company has formulated a Policy for determining material subsidiaries. The said policy is available on the website of the Company at https://www.baluindustries.com/ corporate-governance.php

UNCLAIMED AND UNPAID DIVIDENDS AND TRANSFER OF SHARES TO IEPF

Pursuant to Section 124 of the Companies Act, 2013 read with the Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("Rules"), all dividends remaining unpaid or unclaimed for a period of 7 years and also the shares in respect of which the dividend has not been claimed by the shareholders for 7 consecutive years or more are required to be transferred to Investor Education Protection Fund (IEPF) in accordance with the procedure prescribed in the Rules.

During the year under review, there was no transfer of unclaimed and unpaid dividend and equity shares to the Investor Education and Protection Fund in terms of Section 125 of the Companies Act, 2013.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Particulars of loans given, investments made, guarantees given and securities provided during the year under review and as covered under the provisions of Section 186 of the Companies Act, 2013, have been disclosed in the notes to the standalone financial statements forming part of the Annual Report.

DIRECTOR‘S RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (5) of the Companies Act, 2013, in relation to audited financial statements of the Company for the year ended 31^st March 2025; the Board of Directors hereby confirms that:

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

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 31^st March 2025 and of the profit of the Company for the year under review;

c. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the Directors had prepared the accounts for the financial year ended 31^st March 2025 on a going concern basis;

e. 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;

f. 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.

DEPOSITS

The Company has not accepted any deposits within the meaning of sub-section (31) of Section 2 and Section 73 of the Companies Act, 2013 ("the Act") and the Rules framed thereunder. As on 31^st March 2025, there were no deposits lying unpaid or unclaimed.

DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP) i. Composition of the Board of Directors

The Board of Directors is duly constituted. The details of the directors are given in the Corporate Governance Report forming part of the Annual Report.

ii. Changes in Composition of Board and Key Managerial Personnel

Mr. Sumer Singh (DIN: 10768646), was appointed by the Board of Directors as an Additional Director (Non-Executive Independent Category) of the Company w.e.f. 06^th September, 2024. Thereafter he has resigned from the Board w.e.f. 25^th September, 2024 due to no-receipt of No-Objection Certificate (NOC) from Union Bank of India, where he served as Deputy General Manager (DGM and he confirmed that there are no any material reasons other than those provided above.

The Board of Directors at their meeting held on 07^th February, 2025 approved appointment of Mr. Roop Lal Meena (DIN: 10938270) as an Independent Director of the Company for a term of five years with effect from 07^th February, 2025.

Subsequently, the shareholders approved his appointment through Postal Ballot process on 23^rd April, 2025.

Retirement of Directors by Rotation

Mr. Jaikaran Jaspalsingh Chandock, (DIN: 06965738), Wholetime Director, being longest in the office is liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, he has offered himself for appointment.

Pursuant to Regulation 36 of the Listing Regulations read with Secretarial Standard-2 on General Meetings, necessary details of Mr. Jaikaran Chandock, have been provided as an Annexure to the Notice of the Annual General Meeting.

Key Managerial Personnel

During the year under review, there was no change in Key Managerial Personnel of the Company as prescribed under Section 203 of the Companies Act, 2013.

DECLARATION OF INDEPENDENT DIRECTORS

In accordance with Section 149(7) of the Companies Act, 2013, and Regulation 25(8) of the Listing Regulations, as amended, each Independent Director of the Company has provided a written declaration confirming that he/she meets the criteria of independence as stipulated under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations.

In the opinion of the Board, Independent Directors fulfil the conditions specified in Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Listing Regulations and are independent from Management.

All the Independent Directors of the Company have enrolled their names in the online database of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The familiarization program aims to provide Independent Directors with the industry scenario, the socioeconomic environment in which the Company operates, the business model, the operational and financial performance of the Company, significant developments so as to enable them to take well informed decisions in a timely manner.

The familiarization program also seeks to update the Directors on the roles, responsibilities, rights and duties under the Act and other statutes, also directors are regularly briefed on the regulatory changes and legal updates applicable to the Company. This facilitates Board interaction and engagement with the Senior Management team.

The details of the training and familiarisation programmes arranged by the Company during FY 2024-25 are disclosed on the Companys website under the web-link https://www. baluindustries.com/corporate-governance.php

DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES

Board Meetings

The Board of Directors met Eight (8) times during the financial year under review. The details of the Board meetings and attendance of each Director thereat are provided in the Corporate Governance Report forming part of the Annual Report.

The periodicity between two Board Meetings was within the maximum time gap as prescribed in the SEBI Listing Regulations, 2015 / The Companies Act, 2013.

Audit Committee

The Audit Committee of the Company is constituted/re- constituted in line with the provisions of Regulation 18 of SEBI (Listing Obligations and Disclosure requirements) Regulations, 2015 read with Section 177 of the Companies Act, 2013.

The Composition of the Audit Committee is as under:

Members name	Category	Designation
1. Mr. Raghvendra Raj Mehta	Independent Director	Chairman
2. Mr. Radheshyam Soni	Independent Director	Member
3. Mrs. Shalu Laxmanraj Bhandari	Independent Director	Member
4. Mr. Trimaan Chandock	Whole Time Director	Member
5. Mr. Roop Lal Meena	Independent Director	Member

*Mr. Roop Lal Meena, was appointed as Independent Director w.e.f. 07^th February, 2025. Further the Audit Committee was reconstituted on 07^th August, 2025, to include Mr. Roop Lal Meena, as a Member of the Committee w.e.f. 07^th August, 2025.

The terms of reference of the Audit Committee and the particulars of meetings held, and attendance thereat are mentioned in the Corporate Governance Report forming part of the Annual Report. The Statutory Auditors, Internal Auditor and Whole Time Directors/ Chief Financial Officer are being invited to the meeting as and when required.

Nomination & Remuneration Committee

The Nomination and Remuneration Committee recommends the appointment of Directors and remuneration of such Directors. The level and structure of appointment and remuneration of all Key Managerial personnel and Senior Management Personnel of the Company, as per the Remuneration Policy, is also overseen by this Committee.

The Composition of the Nomination & Remuneration Committee is as under:

Members name	Category	Designation
1. Mr. Radheshyam Soni	Independent Director	Chairman
2. Mr. Raghvendra Raj Mehta	Independent Director	Member
3. Mrs. Shalu Laxmanraj Bhandari	Independent Director	Member
4. *Mr. Roop Lal Meena	Independent Director	Member

*Mr. Roop Lal Meena, was appointed as Independent Director w.e.f. 07^th February, 2025. Further the Audit Committee was reconstituted on 07^th August, 2025, to include Mr. Roop Lal Meena, as a Member of the Committee w.e.f. 07^th August, 2025.

The Nomination & Remuneration Committee is duly constituted, during the year under review. The terms of reference of the Nomination and Remuneration Committee and the particulars of meetings held, and attendance thereat are mentioned in the Corporate Governance Report forming part of the Annual Report.

Policy on Appointment and Remuneration of Directors, Key Managerial Personnel and Senior Management Personnel

The Board of Directors has adopted a Nomination and Remuneration Policy in terms of the provisions of sub- section (3) of Section 178 of the Act and SEBI Listing Regulations dealing with appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Personnel and other employees of the Company.

The policy covers criteria for determining qualifications, positive attributes, independence and remuneration of Directors, Key Managerial Personnel and Senior Management Personnel as required under sub-section (3) of Section 178 of the Companies Act, 2013 and the Listing Regulations.

The Nomination and Remuneration Policy of the Company is hosted on the Companys website under the web link https:// www.baluindustries.com/corporate-governance.php

Stakeholders Relationship Committee

The Stakeholders Relationship Committee was constituted by the Board of Directors in compliance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 20 of the Listing Regulations.

The scope of the Shareholders/ Investors Grievance Committee is to review and address the grievance of the shareholders in respect of share transfers, transmission, non-receipt of annual report, non-receipt of dividend etc, and other related activities. In addition, the Committee also looks into matters which can facilitate better investors services and relations.

The Composition of the Stakeholders Relationship Committee is as under:

Members name	Category	Designation
1. Mr. Raghvendra Raj Mehta	Independent Director	Chairman
2. Mr. Radheshyam Soni	Independent Director	Member
3. Mrs. Shalu Laxmanraj Bhandari	Independent Director	Member
4. *Mr. Roop Lal Meena	Independent Director	Member

*Mr. Roop Lal Meena, was appointed as Independent Director w.e.f. 07^th February, 2025. Further the Audit Committee was reconstituted on 07^th August, 2025, to include Mr. Roop Lal Meena, as a Member of the Committee w.e.f. 07^th August, 2025.

The brief terms of reference of the Stakeholders Relationship Committee and particulars of meetings held and attendance thereat are mentioned in the Corporate Governance Report forming part of the Annual Report.

Risk Management Committee

Pursuant to Regulation 21 of the Listing Regulations, the Board constituted Risk Management Committee to frame, implement and monitor risk management plan of the Company. The Board has adopted the Risk Management Policy and framework to mitigate foreseeable risks, avoid events, situations or circumstances, which may lead to negative consequences on the Companys businesses. The major risks identified are systematically approached through mitigating actions on continual basis. Risk evaluation is an ongoing and continuous process within the Company, and it is regularly updated to the Board of the Company.

The Risk Management Committee is duly constituted, during the year under review. The Committee has been entrusted with the responsibility to assist the Board in overseeing and approving the Companys enterprise-wide risk management framework. A detailed analysis of the business risks and opportunities is given under Management Discussion and Analysis Report.

The Composition of the Risk Management Committee is as under:

Members name	Category	Designation
1. Mr. Trimaan Chandock	Whole Time Director	Chairman
2. Mr. Jaikaran Chandock	Whole Time Director	Member
3. Mr. Radheshyam Soni	Independent Director	Member

The brief terms of reference, particulars of meetings held, and attendance thereat are mentioned in the Corporate Governance Report forming part of the Annual Report.

Corporate Social Responsibility Committee

In accordance with the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time, the Board of Directors of the Company has constituted Corporate Social Responsibility (CSR) Committee.

One of the key focus areas of the Committee is to make CSR to play a vital role and provide a reasonable contribution to the society by entering into sustainable programs of high impact and integrity. The CSR Committee reviews and monitors the CSR projects and expenditure undertaken by the Company on a regular basis and apprises the Board of the same.

The brief outline of the Companys CSR initiatives undertaken during the year under review is furnished in "Annexure-B" in the format as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time. The Companys CSR Policy is placed on the website of the Company https://www.baluindustries.com/ corporate-governance.php

The Composition of the Corporate Social Responsibility Committee is as under:

Members name	Category	Designation
1. Mr. Raghvendra Raj Mehta	Independent Director	Chairman
2. Mr. Trimaan Chandock	Whole Time Director	Member
3. Mr. Jaikaran Chandock	Whole Time Director	Member

The brief terms of reference, particulars of meetings held, and attendance thereat are mentioned in the Corporate Governance Report forming part of the Annual Report.

ATTRIBUTES, QUALIFICATIONS & INDEPENDENCE OF DIRECTORS, THEIR APPOINTMENT AND REMUNERATION

The Nomination & Remuneration Committee of Directors have approved a Policy for Selection, Appointment and Remuneration of Directors which inter-alia requires that composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, KMP and senior management employees and the Directors appointed shall be of high integrity with relevant expertise and experience so as to have diverse Board and the policy also lays down the positive attributes/criteria while recommending the candidature for the appointment as Director.

ANNUAL EVALUATION OF DIRECTORS, COMMITTEES AND BOARD

Pursuant to the provisions of the Companies Act, 2013 and as per the Listing Regulations, the Board of Directors carried out annual performance evaluation of its own performance, individual directors as well as the working of its committees.

The performance of the Board as a whole and of its Committees was evaluated by the Board through structured questionnaire which covered various aspects such as adequacy of composition of Board and its Committees, execution and performance of specific duties and obligations, preparedness and participation in discussions, quality of inputs, effectiveness of the functions allocated, relationship with management, appropriateness and timeliness of information etc.

Taking into consideration the responses received from the Individual Directors to the questionnaire, the performance of the Board and its Committees was evaluated. The Directors have expressed their satisfaction with the constitution of the Board and its Committees and performance of each of the directors.

In terms of requirements of Schedule IV of the Companies Act, 2013, a separate meeting of Independent Directors of the Company was held on Friday, 07^th February, 2025 to review:

The performance of non-independent directors and the Board as a whole and its committees thereof;

The performance of the Chairman of the Company, taking into account the views of executive directors and non-executive directors;

To assess the quality, quantity and timeliness of the flow of information between the Management and the Board. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

PARTICULARS OF EMPLOYEES

In terms of the requirements of sub-section (12) of Section 197 of the Act read with sub-rule (1) of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, the disclosures pertaining to the remuneration and other details, are annexed to this Report as ‘‘Annexure – C.

In terms of Section 136(1) of the Act, details of employee remuneration as required under provision of Section 197 of the Companies Act, 2013 and rule 5 (2) and rule 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available for inspection and any member interested in obtaining a copy of the same may write to Company at compliance@baluindustries.com

RELATED PARTY TRANSACTIONS

The Audit Committee reviews all the related party transactions and subsequent modifications and Omnibus approval is obtained before the commencement of the new financial year, for the transactions which are repetitive in nature and also for the transactions which are not foreseen. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis specifying the nature, value and terms & conditions of the transactions.

During the year under review, all the transactions entered into by the Company with the Related Parties were at arms length and in the ordinary course of business. These transactions were preapproved by the Independent Directors of the Audit Committee. The transactions entered by the Company with the related parties during the year were in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. The details of actual transactions were reviewed by the Audit Committee on a quarterly basis.

During the FY 2024-25, your Company did not enter into any material related party transactions. Accordingly, disclosure with respect to the same in the Form AOC- 2 in terms of Section 134 of the Companies Act, 2013 is not furnished.

During the year under review, Policy on Related Party Transactions in compliance with the requirements of Companies Act, 2013 and amendment to SEBI Listing Regulations, is available on the website of the Company https:// www.baluindustries.com/corporate-governance.php.

IMPLEMENTATION OF RISK MANAGEMENT POLICY

The Company has formulated a policy and process for risk management. The Company has set up a core group of leadership team, which identifies, assesses the risks and the trends, exposure and potential impact analysis at different level and lays down the procedure for minimization of risks. Risk Management forms an integral part of Management policy and is an ongoing process integrated with the operations.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY

Pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, and in accordance with Regulation 22 of the Listing Regulations, the Company had adopted ‘Vigil Mechanism Policy for Directors, Employees and other Stakeholders of the Company to report concerns about unethical behaviour.

The policy provides a mechanism, which ensures adequate safeguards to Employees, Directors and other stakeholders from any victimisation on raising concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, and so on. The employees of the Company have the right/option to report their concern/ grievance to Chairperson of the Audit Committee.

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. The Vigil Mechanism Policy is hosted on the Companys website https://www.baluindustries.com/corporategovernance.php

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Companys internal control system has been established on values of integrity and operational excellence and it supports the vision of the Company "To be the most sustainable and competitive Company in our industry". The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations.

The details of the internal financial control systems and their adequacy are included in the Management Discussions and Analysis Report, which forms part of the Annual Report.

AUDITORS AND REPORTS

The matters relating to the Auditors and their Reports are as under:

Statutory Auditors

In accordance with provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. M. B. Agrawal & Co. (Firm Registration Number 100137W) will complete their term as Statutory Auditors of the Company at the conclusion of the forthcoming AGM.

Considering their expertise and experience, the Audit Committee and the Board of Directors of the Company, have approved and recommended the re-appointment of M/s. M. B. Agrawal & Co. (Firm Registration Number 100137W), Chartered Accountants as the Statutory Auditors of the Company for the second term of 5 (five) consecutive years from conclusion of this 36^th Annual General Meeting of the Company until the conclusion of the 41^st Annual General Meeting subject to approval of the shareholders.

Pursuant to Section 139 of the Companies Act, 2013 (the Act) and the Rules framed thereunder, the Company has received written confirmation from M/s. M. B. Agrawal & Co. and a certificate that they satisfy the criteria provided under Section 141 of the Act and that the appointment, if made, shall be in accordance with the applicable provisions of the Act and Rules framed thereunder. As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s. M. B. Agrawal & Co., has confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI.

The Report given by M/s. M. B. Agrawal & Co., Statutory Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

Internal Auditors

The Company has in place a robust Internal Control System and ably supported by reputed independent firm i.e. M/s. Mehta Singhvi & Associates, Chartered Accountants, Mumbai as the Internal Auditors. The audit conducted by the Internal Auditors is based on an internal audit plan, which is reviewed each year in consultation with the Audit Committee. These audits are based on risk based methodology and inter-alia involve the review of internal controls and governance processes, adherence to management policies and review of statutory compliances. The Internal Auditors share their findings on an ongoing basis during the year for corrective action.

During the year the Board of Directors has re- appointed M/s Mehta Singhvi & Associates, Chartered Accountants (Registration No. 122217W) as Internal Auditors of the Company. The audit conducted by the Internal Auditors is based on an internal audit plan, which is reviewed each year in consultation with the Audit Committee. These audits are based on risk- based methodology and inter-alia involve the review of internal controls and governance processes, adherence to management policies and review of statutory compliances.

Report of the Internal Auditors for the FY 2024-25 does not contain any qualification, reservation, disclaimer or adverse remarks.

Cost Auditors

The provisions of Section 148(1) of the Companies Act, 2013 are applicable to the Company and accordingly the Company has maintained cost accounts and records in respect of the applicable products for the year ended 31^st March 2025.

The Board, on the recommendation of the Audit Committee, at its meeting held on 14^th May, 2025, has approved the appointment of M/s. S K Agarwal & Associates, Cost and Management Consultants, as the Cost Auditors for the Company for the financial year ending 31^st March 2026, at a remuneration of H 3 Lakhs plus taxes and out of pocket expenses. They have confirmed that they are free from any disqualifications under Section 141 of the Companies Act, 2013.

A proposal for ratification of remuneration of the Cost Auditor for the FY 2025-26 is placed before the Shareholders for approval in the ensuing AGM.

Secretarial Auditors

Pursuant to the amended provisions of Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 204 of the Companies Act, 2013, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Audit Committee and the Board of Directors have approved and recommended the appointment of M/s. Prachi Bansal and Associates, Practicing Company Secretaries (Firm Registration

Number: I2020HR2093500) as the Secretarial Auditors of the Company for a term of 5 (Five) consecutive years from the FY 2025-26 till FY 2029-30, subject to the approval of the Members at ensuing AGM.

Brief profile and other details of M/s. Prachi Bansal and Associates, Practicing Company Secretaries, are disclosed in the AGM Notice approved by the Board. They have given their consent to act as Secretarial Auditors of the Company and have confirmed their eligibility for the appointment.

The Secretarial Auditors have confirmed that they have subjected themselves to the peer review process of Institute of Company Secretaries of India (ICSI) and hold valid certificate issued by the Peer Review Board of the ICSI.

The Secretarial Audit Report pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, issued by M/s. Singhvi & Associates, Company Secretaries, in form MR-3 for FY 2024-25 is attached as Annexure ‘D forming part of this Report. The Secretarial Audit Report does not contain any qualification, reservation or disclaimer or adverse remark.

Reporting of fraud by auditors

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

OTHER DISCLOSURES

Annual Return

In terms of Section 92(3) of the Companies Act, 2013 read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company as on 31^st March 2025 is available on the Companys website at https://www.baluindustries.com.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The Company has strong commitment towards conservation of energy, natural resources and adoption of latest technology in its areas of operation. The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under clause (m) of subsection (3) of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed to this Report as "Annexure-E".

Report on Corporate Governance

In terms of Regulation 34 of SEBI (LODR) Regulations, a separate section on Corporate Governance with a detailed report on Corporate Governance is provided as a separate section in the Annual Report and a certificate from Mohammed Aabid, Partner of M/s. Aabid & Co., Practicing Company Secretaries, is certifying compliance of conditions of Corporate Governance as stipulated under the Listing Regulations, forms part of this Annual Report. The Report on Corporate Governance also contains disclosures as required under the Companies Act, 2013.

Business Responsibility and Sustainability Report (BRSR)

In accordance with the provisions of Regulation 34 of the Listing Regulations, the Business Responsibility and Sustainability Report (BRSR) forms a part of this Annual Report describing the initiatives undertaken by the Company from an environmental, social and governance perspective during the year under review.

Management Discussion Analysis Report

The Management Discussion and Analysis Report for the year under review, as stipulated under regulation 34 (3) and Part B of schedule V of the SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015 is provided as a separate section in the Annual Report.

Secretarial Standards Compliance

During the year under review, the Company has complied with all the applicable Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government pursuant to Section 118 of the Companies Act, 2013.

Disclosures as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The details of complaints reported under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 during FY 2024-25 are as follows:

No. of complaints of sexual harassment received during the year;	0
No. of complaints disposed off during the year;	0
No. of complaints pending as on 31st March 2025	0

Adherence to provisions of the Maternity Benefit Act, 1961:

The Company has complied with the applicable provisions of the Maternity Benefit Act, 1961, including those relating to maternity leave, benefits, and safeguards for female employees.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions for the same during the year under review:

1. Material Changes and/or commitment that could affect the Companys financial position, which have occurred between the end of the financial year of the Company and the date of this report;

2. Significant or material orders passed by the Regulators or Courts or Tribunals, impacting the going concern status and Companys operations in future;

3. Non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Companies Act, 2013 read with rules 16(4) of Companies (Share Capital and Debentures) Rules, 2014;

4. Receipt of any remuneration or commission from any of its subsidiary companies by the Managing Director or the Whole-Time Directors of the Company;

5. Revision of the financial statements pertaining to previous financial periods during the financial year under review;

6. Frauds reported as per Section 143(12) of the Companies Act, 2013;

7. The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of

2016) during the year along with their status as at the end of the financial year;

8. The details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.

ACKNOWLEDGEMENTS

Your Board takes this opportunity to thank Companys employees at all levels for their hard work and commitment. Your Board also places on record its sincere appreciation for the continued support received from the customers, members, suppliers, bankers, financial institutions and all other business partners/associates.

	By Order of the Board
	For Balu Forge Industries Limited
	Sd/-
	Jaspalsingh Chandock
Date: 4th September 2025	Place: Mumbai
DIN No.: 00813218	Chairman and Managing Director