Forbes Precision Tools & Machine Parts Ltd Management Discussions

Dear Members,

The Board of Directors of Forbes Precision Tools and Machine Parts Limited hereby submits their 4th Annual Report of the business and operations of the Company along with the Audited Financial Statements of the Company for the Financial Year (FY) ended March 31, 2026.

Financial Results and Highlights of Performance

The Companys performance, as per Indian Accounting Standards (IND AS), during the Financial Year under review is summarized as follows:

Rs. in Lakhs

Particulars	FY 25-26	FY 24-25
Revenue and Other Income (Total Income)	25,473.95	23,703.51
Earnings before Finance Cost, Depreciation and Tax	5,666.77	5,550.41
Profit before Tax (PBT)	3,949.73	4,087.59
Tax Expense	1,072.43	1,213.02
Profit/(Loss) for the year	2,877.30	2,874.57
Other Comprehensive Income (net of tax)/(Loss)	(63.62)	(25.65)
Total Comprehensive Income	2,813.68	2,848.93
Earnings Per Share - Basic and Diluted () (Continuing operation)	Rs. 5.58	Rs. 5.57
Earnings Per Share - Basic and Diluted () (Discontinued operations)	Rs. 5.58	Rs. 5.57
Paid-up Equity Shares (each paid up 10) as on end of respective period	51,594,464	51,594,464

Note: The above figures are extracted from Financial Statements as per Indian Accounting Standard (IND AS") and are prepared in accordance with the principles stated therein as prescribed by the Ministry of Corporate Affairs under Section 133 of the Companies Act, 2013 ("Act") read with relevant rules issued therein.

During the year, the Government of India notified the Labour Codes consolidating various existing labour laws relating to wages, social security, industrial relations and occupational safety. Based on the information, legal interpretations and professional guidance available as on the reporting date, the Company has assessed the potential financial impact arising from changes in employee benefit obligations. In accordance with applicable Indian Accounting Standards, the Company has recognized an estimated impact of ?590 Lakhs in the financial statements for the year under review. The Company has also undertaken necessary assessment and system-level changes considering the notified Labour Codes and related developments. The Company continues to monitor the notification and implementation of the relevant rules by the appropriate authorities and will account for any further impact, if required, in the period in which such changes become effective.

Management Discussion & Analysis of Financial Conditions, Results of Operations and State of Company Affairs

General Performance and Outlook

The FY 2025-26 could be described as an interesting year which began with one set of expectation and ended with another for the world, India included. However, one has to consensually agree that there has been a notable continuity in the Indias strongest macroeconomic performance, evident since the post Covid period.

While the financial year continued with the Russia - Ukraine and Israel - Palestine conflict, a few other factors like US Tariffs (initially 25% and later another 25% additional) and the current conflict between Iran - USA - Israel continued to build pressures on supply chain.

The paradox of the financial year is that Indias strongest macroeconomic performance in decades has collided with a global system that no longer rewards macroeconomic success with currency stability, capital inflows, or strategic insulation. It is only the policy dynamism and purposeful governance which has reinforced the continuation of growth. However, one has to be alert on the lingering concern of the ongoing global political shocks and economic turmoil which may manifest with a lag. Together, all the developments of last year suggest a world that is less coordinated, more risk averse and more exposed to the non-linear outcomes with narrower margin of safety.

In our opinion, the best scenario we foresee for the FY 2026-27 is "adapting to the current situation and creating capabilities to handle fragility and managing disorders and increasing secure supply chain lines. We expect Government intervention to more actively stabilize the situation for security and stability of the country itself and its Corporate sector, but we have to remember that this does not guarantee insulation from the Global situation.

To add to the above, the initiatives of investment, developing and using Artificial Intelligence, the boom of which are factored in the growth projections globally, if not achieved, can trigger a correction in the overly optimistic projections of asset value, with a potential for broader financial contagion.

The published economic survey of 2026 indicates the country GDP to grow approximately 7.4%. The continued set up of Infrastructure Investments being focused will result in higher economic growth. The economic survey further advocates deregulation to accelerate and sustain higher economic growth. These very factors indicate an optimism of growth for our industry as well.

Performance and outlook

During the year under consideration, your Company has seen many actions of consolidation and improvements as this was the third year full operations as a Precision Tool business entity with its own full-fledged operations and governance set ups and the highlights are discussed hereunder followed by the discussion on results.

During the year, major actions have been taken in various areas and the key points are being summarized hereunder for the better understanding of all its stakeholders.

Precision Tools business

Given the situation, Precision Tools business achieved a reasonable year-on-year growth, in some new segments and / or Geographies that the company ventured into. The overall growth was reasonably higher than previous year at 7.8% higher. The business has also seen a stable trend in the export business performance while the domestic market saw reasonable growth. The profitability was however maintained in the respective category and the operating management is confident of taking the right steps to ensure and follow a solid growth trajectory by reinforcing the sales strategy adapted for growth. This has to be seen in the context that commodity prices (namely Solid Carbide, Steel and other related commodities) increased abnormally in very high proportion in the Financial Year in consideration.

Our business continues to remain aligned with emerging opportunities in Indias Aerospace, Defence, Railways, and electronic industries through the Make in India initiatives. Channel sales play a pivotal role in our growth strategy, with expansions facilitated by the appointment of channel partners in previously unrepresented territories. We believe this India opportunity is vast and it will be a test of our sales channel ability to extract the best from this markets which will enable the growth. International sales efforts focus on targeted geographies, complemented by product development tailored for markets such as South Americas, GCC, the Far East etc. with focus on large contracts with well recognised Brands operating across the globe but the political situation posed some challenges.

The overall export market has not been very encouraging and despite the situation over the last few years, some of our businesses exhibited decent growth, demonstrating our resilience in the face of market challenges. We have regained some business in Far East and GCC countries restoring presence in these markets. Tariffs imposed by USA and Mexico on India led to a drop in sales. While the opportunities are many, competition and Government protectionist policies make inroads difficult into such markets.

Coming specifically to our own business segments, our actions of the past to increase the capacities in Drill segments of our business has paid off and we are seeing substantial growth in those segments. We expect the trend to continue in the next few years too. We believed that the success seen in Indian and companies abroad in these area give us the required confidence of our ability to scale up the business substantially.

In the Solid Carbide Tools space, the business faced margin pressure due to global raw material price escalation to which your company responded by trying to pass on as much cost increase as possible to the consumers / customers.

Our Taps segment recorded steady growth across domestic and export markets, supported by the launch of upgraded tapping geometries for some specific applications. We are confident, this portfolio will further grow substantially over time. Consequent to the above, we have made substantial investments in this segment and we expect high rate of growth in this segment.

Our capital investment strategies yielded substantial benefits on the quality front, which results in better product quality. We expect the market to respond better to this quality and reward us with larger volumes in the near future. During the year in consideration, we have made investments in capacity augmentation in HSS Drills and Spring Washers. We have made some refurbishments and some major repairs to equipment in High Speed Steel, packing, and quality and measurement equipments to improve the quality of products across the portfolio.

The growth trajectory extended to our flagship High Speed Steel Taps business, which expanded across various segments with the addition of new customers in the export market. Strengthening our product development capabilities and operational efficiencies allowed us to offer innovative technological solutions for emerging applications, drawing increased market interest in this segment.

Our commitment to advancing technology and fortifying the supply chain ensures that we meet the evolving quality and supply demands of our customers. Continued investments in new technology, machinery, and software systems facilitate accelerated product development with consistency and precision. We have seen substantial progress on the improvement of the supply and delivery capability of the company.

Efforts to enhance brand visibility and promote products through participation in both domestic and international exhibitions yielded positive results, including successful engagements at EMO Hannover and Indexpo held in Madurai, Tamil Nadu. TOTEM is also awarded as a best Metal Cutting brand. These initiatives aimed to keep customers informed about our latest offerings to the market in all segments and equipment exploring the direction and trends of the markets we operate in.

The Precision Tool portfolio made significant strides in penetrating key accounts and developing channel partners to meet future growth requirements. Our cutting tools portfolio garnered widespread acceptance across multiple sectors, including Aerospace, Defense, Die & Mould, Valve Industries, and Auto component manufacturing. Successful demonstrations of product superiority enabled us to secure long term relationships with focus key accounts. Strong measures in supply chain management and volume-based negotiations further contributed to the improved profitability. We continue to explore and innovate our product portfolio for various product groups, and we continually seek to introduce new products in all possible geographies in and outside India.

During the year under review, the Company continued to reinforce its commitment to quality, sustainability, and responsible business practices. Building upon the certifications obtained in the previous year, the Company further strengthened its governance framework by implementing ISO 26000, which provides guidance on embedding social responsibility across organizational processes and stakeholder engagements. With this addition, the Company now adheres to a comprehensive suite of internationally recognized standards covering quality management, aerospace, automotive systems, environmental management, occupational health and safety, and social responsibility. The management remains focused on ensuring that key operations are sustainable, compliant with established process control requirements, and aligned with high standards of governance, particularly in the areas of Environment, Health, and Safety. The Company continues to prioritize safeguarding stakeholder interests through proactive risk mitigation and a robust compliance framework. Management is committed to continuous monitoring and improvement of operations, with the objective of progressively elevating performance standards in line with evolving global best practices in sustainability, ethical conduct, and long term value creation.

Key Financial performance, Operational Information and Ratio Analysis

Key Ratios/ Indicators	FY 25-26	FY 24-25	Change in %	Explanation for change of 25% or more
Debtors Turnover (in days)	46	49.01	(6.14%)	NA
Interest Coverage Ratio	24.78	37.24	(33.46%)	Interest Coverage Ratio decreased mainly due to the Company availed borrowing facilities to meet its working capital requirements
Operating Profit Margin %	16.39%	18%	(8.94%)	NA
Return on Net Worth %	17%	17%	-	NA

Revenue

During the year under review, the Company achieved total revenue (including other income) of 25,473.95 Lakhs as against Rs. 23,703.51 Lakhs in the previous year. EBITDA for the year stood at Rs. 5,666.77 Lakhs as compared to Rs. 5,550.41 Lakhs in the previous year, notwithstanding the estimated impact of 590 Lakhs recognized during the year in relation to employee benefit obligations pursuant to the notified Labour Codes.

Profit/(Loss) Before Tax (“PBT")

Consequent to the above, duringthe year PBT is3,949.73 Lakhs (previous year Rs. 4,087.59 Lakhs)

Tax Liability & Profit / (loss) After Tax

The tax liability for the year was computed 1,072.43 Lakhs (previous year Rs. 1,213.02 Lakhs) and the resultant profit after tax was Rs. 2,877.30 Lakhs (previous year Rs. 2,874.57 Lakhs)

Total Comprehensive Income / (Loss)

During the year, total comprehensive income amounted to Rs. 2,813.68 Lakhs (previous year 2,848.93 Lakhs)

Fixed Assets:

During the year Gross Block is 25,976.80 Lakhs (previous year 24,516.76 Lakhs). This includes an addition of Rs. 1,498.65 Lakhs (previous year Rs. 2,612.20 Lakhs). We remain committed to investment in technologies, which increase value and help us expand our market share.

Borrowing

Total outstanding borrowing is 1,487.07 Lakhs (previous year 1,968.29 Lakhs) as a result of borrowings resulting due to capital investments during the year. However, after considering the deposits and investments in mutual funds, the Company continued to maintain a net debt-free position during the year under review.

Opportunities & Risks

Our success as an organization depends on our ability to identify opportunities and leverage them while mitigating the risks that arise while conducting our business. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. Some of the opportunities and key risks, anticipated impact on the Company and mitigation strategy is as follows:

Market Development

Your Company monitors external market trends and collates consumer insights to develop category and brand strategies.

The Company actively searches for ways to translate the trends in consumer preference and taste into new technologies for, incorporation into future products. We develop product ideas both in-house and with selected partners to enable us to respond to rapidly changing consumer trends with speed.

The Company is dedicated to ensuring that its vendors, suppliers, contractors etc. work in a healthy and safe environment while delivering on the expected standard.

Given our dependency on Automotive sector, one more aspect of risk is the way the development of this industry will evolve due to the EV initiatives of the sector. The trends of this industry moving to different fuel options will impact the demand of the consumer and we will have to align ourselves and remain abreast of the happenings to be able to have an important share in contributing to this aspect. While this is being mentioned, the country manufacturing expansion has created opportunities for our own company which we are trying to leverage to our advantage.

Political and Global Uncertainty

Global economic conditions during the year continued to remain uncertain, influenced by evolving geopolitical developments, shifting trade policies, and the imposition of tariff and non-tariff barriers across key markets. Such factors may have an impact on demand patterns and could potentially constrain revenue growth opportunities. However, the Companys diversified business portfolio, catering to multiple industry segments and geographies, provides a degree of resilience against such macroeconomic and geopolitical uncertainties. While geopolitical tensions across regions persist, the global trade environment continues to undergo recalibration, with increased emphasis on protectionist measures and bilateral arrangements. The Company remains watchful of these developments and continues to adapt its strategies to mitigate associated risks and sustain growth momentum.

Legal and Regulatory

Compliance with laws and regulations is an essential part of your Companys business operations. We are subject to laws and regulations in diverse areas as product safety, product claims, trademarks, copyright, patents, competition, employee health and safety, the environment, Water and Air Pollution, corporate governance, listing and disclosure, employment, and taxes. Frequent changes in legal and regulatory regime and introduction of newer regulations with multiple authorities regulating same areas lead to complexity in compliance. The Company has established an internal compliance monitoring framework to ensure adherence to applicable laws, regulations and statutory requirements across its operations. Compliance status is periodically reviewed by the management and placed before the Audit Committee and the Board, wherever applicable. The Company also continues to strengthen its internal processes, controls and governance mechanisms to effectively manage regulatory and compliance risks

Systems and Information

Your Companys operations are increasingly dependent on IT systems and the management of information. Increasing digital interactions with customers, suppliers and consumers place even greater emphasis on the need for secure and reliable IT systems and infrastructure, and careful management of the information that is in our possession.

The cyber-attack threat of unauthorized access and misuse of sensitive information or disruption to operations continues to increase.

To reduce the impact of external cyber-attacks impacting our business, we have sufficient security measures including firewalls and threat monitoring systems in place, complete with immediate response capabilities to mitigate identified threats. Our employees are trained to understand these requirements.

Energy Management

The Companys factories consume power for the manufacturing and for the purpose of air cooling. The Company identifies it as a critical resource and gives it due attention to optimize its use including using green source like solar power etc. The Company has initiated over the years, the installation of solar system within its factory, in small measures. Though this has met only partial demand, attempts have been made to look at the opportunity and enlarge the scope of such coverage.

Internal control systems and their adequacy

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. The Company has established internal control systems and procedures to ensure orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.The internal financial controls are supported through documented policies and procedures, periodic reviews and a structured delegation of authority framework. The Company has also established processes for monitoring compliance with applicable laws and regulations and for ensuring reliability of financial and operational information. The internal control systems are supplemented by internal audit processes and periodic review mechanisms. The findings of the internal auditors are periodically reviewed by the management and the Audit Committee, and appropriate corrective actions are taken, wherever necessary. The Audit Committee also reviews significant audit observations and monitors the effectiveness of the internal control environment on an ongoing basis.M/s. Sharp & Tannan Associates, Statutory Auditors of the Company, have audited the financial statements included in this Annual Report and have issued a report on the

Companys internal financial controls over financial reporting as defined under Section 143 of the Companies Act, 2013.

Material Development in Human Resources and Industrial Relations

The financial year 2025-2026 started with the promising outlook for all product categories. All new employees were geared to undergo employees training for an extended period of time before joining their formal job and responsibilities. These new employees have undergone induction program which includes understanding of the vision, mission and business model of the Company. In addition to the above, for the existing employees, workshops were conducted on Performance Management Systems and performance indicators to enable Peoples capability development.

Attrition remained a concern and we saw a substantial attrition in the lower executive cadre of the Company. This attrition rate was close to 25%. Measures are being put in place to control this aspect.

During the year, the Company also strengthened its human resource processes through implementation of an integrated Human Resource Management System (HRMS) aimed at enhancing operational efficiency and process automation across attendance, payroll and performance management functions and it was successfully implemented in April 2026.

The introduction of the new Labor code also created its own time challenges on the operation team to understand, evaluate the impact and successfully design the system to integrate the new requirements of the labor code. This was successfully implemented in the month of April 2026.

The training process was further strengthened and finalized for execution since October / November 2025 and we believe that the results of the same will be reaped in the near future.

Overall FPTL has seen a very cordial relationship between the employees, the management and the union and the Board has expressed sincere thanks to all for jointly steering the Company to success in their own individual ways.

While on the subject, the Board specifically thanks its employees, its union and the Management who have worked cordially and peacefully, leveraging the synergies the operations offer. The Company has labour settlement agreement with the workmen valid upto 2028.

There were no significant and material orders passed by the regulators, courts or tribunals impacting the going concern status of the Company and its operations in future.

Investment in Subsidiaries, Associates and Joint Ventures

The Company does not have any subsidiary, associate or joint venture company during the financial year under review

Dividend & Transfer to Reserves

During the financial year 2025-26, the Board of Directors, at its meeting held on April 24, 2025, had declared an Interim Dividend of 5/- per equity share of face value 10/- each; the record date for the purpose was May 2, 2025, and the said Interim Dividend was duly paid to the eligible shareholders. The Board has not recommended any final dividend for the financial year 2025-26.

The total cash outflow on account of the Interim Dividend was amounting to 2,579.72 Lakhs.

There is no dividend which was required to be transferred to Investor Education and Protection Fund during the year ended March 31, 2026. The Directors do not propose to transfer any amounts to the general reserves of the Company, instead have recommended to retain the entire of profits for the financial year ended March 31, 2026 in the profit and loss account. No amount has been transferred to the reserves during the year.

Dividend Distribution Policy

Pursuant to Regulation 43A of the SEBI (LODR) Regulations, 2015, the Board of Directors of the Company formulated a Dividend Distribution Policy keeping in view the provisions of the SEBI (LODR) Regulations, 2015, the Companies Act, 2013, This Policy is available on the Companys website at www.forbesprecision.co.in/

Share Capital

The paid-up Equity Share Capital of the Company as on March 31, 2026 was 5,159.45 Lakhs (Previous year 5,159.45 Lakhs).

During the year under review, the Company has not issued any other shares with differential voting rights or sweat equity shares and has not granted any stock options.

Finance

The Board is pleased to inform the stakeholders that the Company remains "Net Debt Free" as on March 31,2026. The Company will continue to focus on judicious management of its working capital. Relentless focus on receivables, inventories, strict cost control and use of alternative borrowing instruments, where possible, has helped in keeping the borrowings and effective interest cost under control.

Deposits

During the financial year under review, the Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014

Particular of loans, guarantees and investments

Particulars of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013, if any, are disclosed in the notes to the Financial Statements forming part of this Annual Report.

Related Party Transactions

All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of business. There were no material related party transactions made by the Company with Promoters and Directors, which may have a potential conflict with the interest of the Company at large.

The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website at www.forbesprecision.co.in/.

Vigil Mechanism/Whistle Blower Policy

Pursuant to provision of Section 177 of the Act and Regulation 22 of SEBI LODR, the Board has established a vigil mechanism for the Directors and employees of the Company to report genuine concerns about unethical behaviour actual or suggested fraud or violation of the Companys Code of Conduct or ethics.

The Company has implemented a Whistle Blower Policy, which is available on the Companys website at www.forbesprecision.co.in/.

Nomination and Remuneration Policy

The Board, upon the recommendation of the Nomination and Remuneration Committee, has formulated a policy governing the selection, appointment, and remuneration of Directors, Key Managerial Personnel, and senior management. The Nomination and Remuneration Policy provides guidance on criteria such as qualifications, positive attributes, and independence of Directors, as well as matters concerning remuneration, appointment, removal, and performance evaluation of Directors, Key Managerial Personnel, and senior management. This policy is available on the Companys website at www.forbesprecision.co.in/.

Business Responsibility and Sustainability Report

The requirements under Regulation 34(2)(f) and the proviso thereof of the SEBI (Listing Obligations and Disclosure Requirements), 2015 is not applicable to the Company as the Company was not in list of top 1000 listed entities based on market capitalization as on March 31, 2026.

Internal Complaints Committee

The Company has zero tolerance towards sexual harassment at the 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 ("POSH Act") and the Rules made thereunder. The Company has constituted an Internal Complaints Committee ("ICC") for redressal of complaints relating to sexual harassment and the ICC includes an external member in compliance with the provisions of the POSH Act. During the financial year 2025-26, no complaint pertaining to sexual harassment was received by the Company.

Compliance with the Maternity Benefit Act, 1961

During the financial year 2025-26, the Company has complied with all applicable provisions of the Maternity Benefit Act, 1961.

Corporate Governance

Your Company continues to adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India SEBI and is committed to the highest standard of Corporate Governance. Your Company has complied with all the mandatory requirements relating to Corporate Governance in the Listing Regulations. The Corporate Governance Report pursuant to the requirement of Listing Regulations is given as a separate section and forms a part of this Report. The Certificate from the Makarand M Joshi & Co., Secretarial Auditors confirming the compliance with the conditions of the Corporate Governance stipulated in Para E of Schedule V of Listing Regulations is annexed to the said Corporate Governance Report. A declaration signed by the Managing Director stating that members of the Board and senior management personnel have affirmed the compliance vide Code of Conduct of the Board and senior management is attached to the report on corporate governance.

Management Discussion and Analysis

The Management Discussion and Analysis Report, pursuant to Regulation 34(2)(e) read with Para B of Schedule V of the SEBI LODR forms part of this Report.

Corporate Social Responsibility (CSR)

The Company remains committed to conducting its business in an economically, socially, and environmentally sustainable manner, guided by principles of transparency and ethical governance.

The Company is committed to inclusive, sustainable development and contributing to building and sustaining economic, social and environmental capital and to pursue CSR projects, as and when required, that are replicable, scalable and sustainable with a significant multiplier impact on sustainable livelihood creation and environmental replenishment.

The total amount spent during the financial year 2025-2026 was 39.78 Lakhs.

The detailed Report on CSR activities, as mandated under Section 135 of the Companies Act, 2013, is annexed as Annexure I to this Annual Report

Risk Management

The requirements of Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, including the proviso thereto, continue to be not applicable to the Company, as it does not fall within the list of the top 1,000 listed entities based on market capitalization. Notwithstanding the above, the Board of Directors recognizes the importance of a robust risk management framework and continues to oversee risk management functions. The Board reviews and assesses key risks that may impact the Companys operations on a half-yearly basis and ensures that appropriate mitigation measures are implemented.

Significant and Material Orders Passed by the Regulators or Courts

There is no significant and material orders passed by the Regulators / Courts, which would impact the going concern status of the Company and its future operations. Major changes and commitments affecting the financial position after the year end and till the date of this report.

During the period from April 1,2026 till the signing of the report there has been no material event which impacts or suggests a change of the operations of the Company or indicates any new or further liabilities that may arise during this period.

Directors and Key Managerial Personnel

As per provisions of Section 152(6) of the Act, Mr. Jai Mavani (DIN: 05260191) is due to retire by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment. The Board of Directors recommends his re- appointment as Director of the Company.

During the year under review, the Members of the Company, by way of a Special Resolution passed at the Extraordinary General Meeting held on February 2, 2026, approved the continuation of directorship of Mr. Sivanandhan Dhanushkodi (DIN: 03607203) as a Non-Executive Independent Director of the Company from the date he attained the age of 75 years till the expiry of his current term on March 29, 2027, in compliance with Regulation 17(1A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as stipulated in Section 149(6) & 149(7) of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and Regulation 16(1)(b) and 25(8) of the SEBI Listing Regulations.

In the opinion of the Board, all the Independent Directors fulfil the conditions specified in the Act with regard to integrity, expertise and experience (including the proficiency) of an Independent Director and are independent of the management.

All Independent Directors have registered themselves with the Indian Institute of Corporate Affairs for the inclusion of their name in the data bank of independent directors, pursuant to the provision of Rule 6 (1) of Companies (Appointment and Qualification of Directors) Rules, 2014. Further, they have confirmed that they shall comply with other requirements, as applicable under the said rule.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company other than sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of Board and Committees thereof. The Non- Executive Director and the Managing Director hold 9,128 and 7,531 equity shares of the Company, respectively, and are entitled to the same rights and obligations as other shareholders.

Independent Directors are familiarized with their roles, rights and responsibilities in the Company.

Pursuant to the provisions of Section 203 of the Act, Mr. M. C. Tahilyani, Managing Director, Mr. Vikram Nagar, Chief Financial Officer and Ms. Rupa Khanna, Company Secretary & Compliance Officer are the Key Managerial Personnel of the Company as on March 31,2026.

Audit Committee of the Board of Directors

The details pertaining to the composition of the Audit Committee of the Board of Directors are included in the Corporate Governance Report which forms part of this report.

Board Evaluation

Pursuant to the provisions of the Act and SEBI LODR, the Board has carried out an annual performance evaluation of its own performance, the directors individually, as well as the evaluation of the working of its Audit, Nomination and Remuneration, Stakeholders Relationship Committees.

The performance of the Board was evaluated by the Board after seeking feedback from all the Directors based on the parameters/ criteria, such as, degree of fulfillment of key responsibility by the Board, Board Structures and Composition, establishment and delineation of responsibilities to the Committees, effectiveness of Board processes, information and functioning, Board culture and dynamics and quality of relationship between the Board and the Management.

The performance of the committees viz. Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility and Stakeholders Relationship Committee was evaluated by the Board after seeking feedback from Committee members based on parameters/ criteria such as degree of fulfillment of key responsibilities, adequacy of committee composition, effectiveness of meetings, committee dynamics and, quality of relationship of the committee with the Board and the Management.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors based on self-assessment questionnaire and feedback/inputs from other Directors (without the concerned director being present). In a separate meeting of Independent Directors, performance of Non-Independent Directors of the Board as a whole and the performance of the Chairman were evaluated.

Disclosure in accordance with Section 197 (12) of Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure II to this Report.

Meetings of the Board

The Board met at least once in each quarter and 4 (four) meetings of the Board were held during the year and the maximum time gap between two Board meetings did not exceed the time limit prescribed in the Act. The details have been provided in the Corporate Governance Report.

Directors Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Act and as per Schedule II Part C (A)(4)(a) of the SEBI Listing Regulations the Directors, based on the representations received from the operating management, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Audit Report

There are no qualifications stated in the audit report and hence there is nothing specific to comment on the Audit Report, other than the comments mentioned in the report itself, which are self- explanatory.

Auditors and Audit Report Statutory Auditors

Pursuant to the provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, M/s Sharp & Tannan Associates (ICAI Firm Registration No.109983W) are

Statutory Auditors of the Company till the conclusion of the 5th Annual General Meeting of the Company.

The Audit Report forms part of the Annual Report. The Auditors have referred to certain matters in their report on Financial Statements to the shareholders, which read with relevant notes forming part of the accounts, is self - explanatory.

During the year under review, the Statutory Auditors have not reported to the Audit Committee, under Section 143(12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees.

Cost Auditors

Pursuant to the provisions of Section 148 of the Companies Act, 2013 ("the Act") read with the Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost records and have the same audited by a Cost Auditor of the Company. Accordingly, the cost accounts and records of the Company are duly prepared and maintained in accordance with the provisions of Section 148(1) of the Act. Based on the recommendation of the Audit Committee, the Board of Directors has appointed M/s. Kishore Bhatia & Associates, Cost Accountants, as the Cost Auditors of the Company for the financial year 2026-27 at a remuneration of ?2.75 Lakhs plus applicable taxes and reimbursement of out-of-pocket expenses. In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors is subject to ratification by the Members at the ensuing Annual General Meeting.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s. Makarand M. Joshi & Co., Practicing Company Secretaries, continue to act as the Secretarial Auditors of the Company for a term of five (5) consecutive financial years from FY 2025-26 to FY 2029-30, as approved by the Members.

The Secretarial Auditors Report for FY 2025-26 does not contain any qualification, reservation or adverse remark. The Secretarial Audit Report received from M/s. Makarand M Joshi & Co for the financial year 2025-26 in the prescribed form MR-3 is annexed as Annexure III.

Secretarial Standards

The Company has complied with the applicable provisions of the Secretarial Standards SS-1 and SS-2 issued by the Institute of Company Secretaries of India.

Annual Secretarial Compliance Report

Secretarial Compliance Report for the financial year ended March 31, 2026 on compliance of all applicable SEBI LODR and circulars/ guidelines issued thereunder, was obtained from M/s Makarand M. Joshi & Co., Practicing Company Secretaries.

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

(a) The information required pursuant to Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members, excluding the information on employees particulars which is available for inspection by the Members at the Registered Office of the Company during the business hours on working days of the Company. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

(b) Information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 forms part of this Report as Annexure IV.

Annual Return

Pursuant to the provisions of Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2026 is available on the website of the Company viz. www. forbesprecision.co.in/

Maintenance of Cost Records

The Company is duly maintaining the Cost Accounts and records as specified by the Central Government in compliance with Section 148 of the Act.

Insolvency and Bankruptcy Code 2016

During the financial year, neither any application nor any proceeding is initiated against the Company under the Insolvency and Bankruptcy Code 2016.

Green Initiative in Corporate Governance

The Ministry of Corporate Affairs (MCA) has taken a green initiative in Corporate Governance by allowing paperless compliances by the Companies and permitted the service of Annual Reports and documents to the shareholders through electronic mode subject to certain conditions. Members who have not yet registered their email addresses are requested to register the same with their Depositories in case the shares are held by them in electronic form and with Companys Registrars and Transfer Agents, MUFG Intime India Private Limited.

Cautionary Statement

Statements in the Boards Report and the Management Discussion & Analysis describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply, input costs, availability, changes in government regulations, tariffs, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

Acknowledgements

Your Directors acknowledge and thank all stakeholders of the Company viz. customers, members, employees, dealers, vendors, banks and other business partners for their valuable sustained support and encouragement. Your Directors look forward to receiving similar support and encouragement from all stakeholders in the years ahead.

	For and on behalf of the Board
	Marzin R. Shroff
	Chairman
Mumbai, May 7, 2026	DIN: 00642613

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