Ganga Forging Ltd Management Discussions

" Annexure-IV" OVERVIEW OF INDIAN FORGING INDUSTRY:

Forging is a fundamental manufacturing process involving the shaping of metal using compressive forces, typically applied through a hammer or press. Globally recognized as the backbone of the manufacturing industry, forging serves as a critical input to key sectors driving economic growth. These include Automobiles, Industrial Machinery, Power, Construction & Mining Equipment, Railways, and General Engineering.

India has emerged as the second-largest forging industry in the world, showcasing its strength, resilience, and technical prowess. With significant contributions to domestic and international markets, Indias forging industry is a key driver of economic progress and innovation.

The Indian forging industry is poised for sustained growth, driven by technological advancements, diversification into non-automotive sectors, and rising global outsourcing trends. Companies must continue to focus on innovation, quality, and sustainability to maintain a competitive edge. The industry is increasingly aligning with global sustainability goals by adopting energy-efficient technologies, reducing waste, and sourcing raw materials sustainably. By continuously upgrading technology, focusing on customer satisfaction, and embracing sustainable practices, the sector is well-positioned to solidify its position as a global leader in forged components.

INSTALLED CAPACITY AND INDUSTRY LANDSCAPE:

The Indian forging industry has an installed capacity of approximately 38.5 lakh MT, capable of processing diverse raw materials such as carbon steel, alloy steel, stainless steel, superalloys, titanium and aluminium to meet varied demands. Over the years, the sector has transitioned from being labour-intensive to capital-intensive, with companies investing INR 27,833 crore in advanced plant and machinery. The classification of forging units by production capacity is as follows:

Very Large Units: Capacity above 75,000 MT.

Large Units: Capacity between 30,000 MT and 75,000 MT.

Medium Units: Capacity between 12,500 MT and 30,000 MT.

Small Units: Capacity between 5,000 MT and 12,500 MT.

Very Small Units: Capacity up to 5,000 MT.

Notably, around 83% of forging units fall into the small or very small categories, while only 8% are classified as very large or large units. The remaining 9% are medium-sized units. This diverse industrial structure reflects the industrys ability to cater to both large-scale industrial demands and smaller, niche requirements.

SECTORAL CONTRIBUTION:

The automotive sector dominates the forging industry, accounting for 58% of total production. Non-automotive applications, including aerospace, railways, agriculture, and general engineering, constitute the remaining 42%. This diversification is vital for mitigating cyclicality and dependency on any single sector.

COMPANY OVERVIEW:

Ganga Forging Limited ("The Company") is also a forging and casting manufacturer, catering the closed die forged products to both automotive and nonautomotive segment. Automotive segment includes manufacturing of products catering to commercial vehicle, passenger car, three wheelers, two-wheeler and tractor. Non-automotive segment includes electric power transmission, dairy equipment manufacturing, agricultural, gear and gear box, crank shafts, connecting road, heavy engineering industrial, hubs and flanges.

Our Company also complies with Quality Assurance System like ISO and strives to deliver quality products to the customers. Our Company is ISO 9001:2008 certified. We believe in manufacturing and delivering quality products and our manufacturing process is under constant supervision by Engineers. The entire system is backed by proper documentation, traceability until the end product, with full proof checks required as per ISO regulations. We are dedicated towards supply of quality products by controlling the procurement of our raw material, monitoring the process parameters and maintaining appropriate measures to comply with applicable statutory and regulatory requirements of our products.

OPPORTUNITIES AND STRENGTH:

Rising adoption of Automation in manufacturing to drive market growth

Government initiative "Make in India" have boosted the manufacturing industry in the region by creating a positive business environment

Increasing export of forging products

Increasing Foreign Direct Investment to boost Market Growth

Automotive to be fastest growing end-user due to rising growth of electric vehicles

Continues development of new Railway lines

THREATS AND RISK:

Electrification in Automotive Industry to slow down Market growth

The industry lacks acutely the resources for upgrading its technological status and there is also a dearth of quality or skilled manpower.

Increased competition in the sectors / areas in which we operate;

Our ability to meet our capital expenditure requirements;

Fluctuations in operating costs;

Changes in political and social conditions in India, the monetary and interest rate policies of India and other countries;

Inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

The performance of the financial markets in India and globally;

Any adverse outcome in the legal proceedings in which we are involved;

Our failure to keep pace with rapid changes in technology;

The occurrence of natural disasters or calamities;

Other factors beyond our control;

Changes in government policies and regulatory actions that apply to or affect our business.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Effective internal financial controls are essential for the integrity of the Companys financial reporting. Management and employees at all levels are responsible for understanding and implementing these policies and procedures to ensure robust internal controls.

There is an adequate internal control system commensurate with the size of the company and nature of the business for inventory, fixed assets and for the sale of goods or services. The Company has implemented proper and adequate systems of internal control to ensure that all assets are safeguarded and protected against loss from any unauthorized use or disposition and all transactions are authorized, recorded and reported correctly. The system ensures appropriate information flow to facilitate effective monitoring. The internal audit system also ensures formation and implementation of corporate policies for financial, reporting, accounting and information security.

The Company has constituted Audit committee to overlook the internal control systems and their adequacy. Audit committee regularly reviews and gives recommendations on proper and adequate internal control systems.

FINANCIAL PERFORMANCE:

During the reporting year, your company has earned Rs. 43,21,94,394 as revenue from operation as compared to Rs. 37,21,24,018 during the previous financial year. Out of total revenue Rs. 1,24,75,560 has been earned form the export of products. As compared to previous fiscal, revenue from operations of the company has been increased by more than 15%. During the year, company has earned net profit of Rs. 65,86,422 as compared profit earned of Rs. 44,71,436 during the previous financial year. Performance trend of last three years is as given under:

SEGMENT REPORTING:

Ganga Forging Limited is operating in only one segment. Hence, comments on segments wise performance is not required.

HUMAN RESOURCES:

Our company is committed to provide work environment that ensures every employee is treated with dignity and respect and equitable treatment for all irrespective of their designation. The company is also committed to promoting a work environment that is conducive to the professional growth of the employees and encourages equality of opportunity.

Further, the company will not tolerate any form of sexual harassment and is committed to take all necessary steps to ensure that the employees are not subjected to any form of harassment. Company always be responsible for the safety of employees as well as the public. Create a positive and dynamic work environment that enable personal achievements, work life balance and business success. We inspire each other to explore ideas that can make the community and world better place.

Key Financial Ratios:

Analysis of key financial ratio for the year as compared to previous financial year is as given under:

Ratio Analysis	Unit of Ratio in	F.Y. 2024- 25	F.Y. 2023- 24	% Variance and reason of variance
Current Ratio	Times	1.60	2.41	- 33.70% Due to improvement in working capital
Debt Equity Ratio	Times	0.52	0.32	62.01% Due to increase in borrowings
Debt service coverage Ratio	Times	0.26	2.41	- 89.17% Due to Higher Interest Cost and increase in borrowing Working Capital
Return on Equity (ROE)	%	0.48	0.50	- 2.73% Due to Increase in Average Equity
Inventory Turnover Ratio	Times	1.63	1.76	- 7.20% Due to higher Inventory holding
Debtors Turnover Ratio	Times	5.24	5.25	- 0.05% Due to higher credit sales
Trade Payable turnover Ratio	Times	7.72	8.76	- 11.86% Due to higher credit purchase
Net Capital Turnover Ratio	Times	3.70	2.14	72.61% Due to change in working capital cycle
Net Profit Ratio	%	1.42	1.19	19.04% Due to profit on sale of assets and changes in turnover
Return on Capital Employed (ROCE)	%	3.81	4.95	- 22.95% Due to increase in Shareholder\u2019s fund
Return on Investment	-	NA	NA	NA

" ANNEXURE V"

Information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

The ratio of remuneration of each director to the median remuneration of the employees of the company for the financial year 2024-25:

Sr. No.	Name of the Directors / Key Managerial Personnel	Designation	Ratio of Remuneration	Percentage increase in Remuneration in the Financial Year 2024-25 as compared to previous F.Y. 2023- 24
1.	Hiralal Mahidas Tilva	Chairman & Managing Director	5.67	-
2.	Rakesh Chhaganbhai Patel	Managing Director	5.33	-
3.	Parulben Rakeshbhai Patel	Wholetime Director	1.33	-
4.	Sheetal Sanjeevkumar Chaniara	Wholetime Director	1.00	-
5.	Avani Nileshkumar Dadhaniya	Chief Financial Officer	1.00	-
6.	Drashti Vaghasiya	Company Secretary	1.23	-

The percentage increase in the median remuneration of employees in the financial year; 36.36 %

The number of permanent employees on the pay rolls of the company; 51

As per the policy of the company, average annual increase in the salaries of employees other than the key managerial personnel in the last financial year was in the range of 5-10% after considering the performance and other event base compensation. Further, there was no increase in the remuneration of the Key Managerial Personnel in the previous financial year.

Further, we confirm that remuneration is as per the remuneration policy of the company.

Further, keeping in view the current business priorities and to support the financial prudence, all executive directors (Key Managerial Personnel) and Chief Financial Officer of the company has partially waived a portion of their entitled remuneration for the F.Y. 2024-25. Details of Remuneration waived by each KMP is as given below:

Sr. No.	Name of the Directors / Key Managerial Personnel	Designation	Remuneration entitlement for the F.Y. 2024-25	Waiver of Remuneration for the F.Y. 2024-25
1.	Hiralal Mahidas Tilva	Chairman & Managing Director	20,40,000	15,93,600
2.	Rakesh Chhaganbhai Patel	Managing Director	19,20,000	14,97,600
3.	Parulben Rakeshbhai Patel	Wholetime Director	4,80,000	4,77,600
4.	Sheetal Sanjeevkumar Chaniara	Wholetime Director	3,60,000	3,57,588
5.	Avani Nileshkumar Dadhaniya	Chief Financial Officer	3,60,000	3,12,704

" ANNEXURE- VI"

CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

(Pursuant to Regulation 34(3) and schedule V Para C clause (10) (i) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015)

To ,

The Members,

Ganga Forging Limited

We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Ganga Forging Limited having CIN: L28910GJ1988PLC011694] and having registered office at Sr. No. 55/1 P6/P1/P1, Near Shree Stamping, At: Sadak Pipaliya, Ta: Gondal, Dis: Rajkot 360311, Gujarat (Hereinafter referred to as "the Company"), produced before us by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3) read with schedule V para C sub clause 10(i) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In our opinion and to the best of our information and according to the verification of Directors Identification Number (DIN) status on the portal of Ministry of Corporate Affairs (MCA) ( as considered necessary and explanations furnished to us by the Company and its officers, we hereby certify that none of the directors on the Board of the Company as stated below for the Financial Year ending on 31 st March, 2025 have been debarred or disqualified from being appointed or continuing as Director of companies by the Ministry of Corporate Affairs.

Sr. No	Name of Director	DIN	Designation	Date of Appointment
1.	Hiralal M. Tilva	00022539	Chairman & Managing Director	02/04/2018
2.	Rakesh C. Patel	00510990	Managing Director	10/03/2016
3.	Sheetal S. Chaniara	07528297	Whole-time Director	01/09/2017
4.	Parulben R. Patel	07528313	Whole-time Director	01/09/2017
5.	Jasubhai K. Patel	01006449	Independent Director	21/04/2018
6.	Rameshbhai G. Dhingani	07946841	Independent Director	01/03/2018
7.	Sagar Ramniklal Govani	09185913	Independent Director	04/06/2021

8.	Nayankumar Karshanbhai Virparia	03297965	Independent Director	12/03/2022
9.	*Nishith Trivedi	10332082	Independent Director	26/09/2023

*After the end of financial year (reporting period) but before the date of signing of this certificate, Mr. Nishith Trivedi [DIN: 10332082] had resigned as non-executive & independent director of the company w.e.f 26 th April, 2025. Further, Board of Directors had taken noting of his resignation in the Board Meeting held on 16 th May, 2025.

To ensure the eligibility for the Appointment and continuity of every director on the Board is the responsibility of the management of the Company. Our responsibility is to express an opinion on these based on our verification. This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

Place: Rajkot

Date: 15 th August, 2025

For, MJP Associates Practicing Company Secretaries

Firm Reg No: P2001GJ007900

Sd/- (CS Purvi Dave)

Partner

ACS No. 27373 CP 10462

PR 1780/2022 UDIN: A027373G001018440

" ANNEXURE- VII"

COMPLIANCE CERTIFICATE

(Regulation 17(8) read with Part B of Schedule II of the SEBI (Listing Obligations and Disclosures Requirement) Regulations, 2015)

To,

The Board of Directors, Ganga Forging Limited

Dear Sir/Madam,

Pursuant to the provisions of Regulation 17(8) of the SEBI (Listing Obligations and Disclosures Requirement) Regulations, 2015, We undersigned hereby declare and certify that:

We have reviewed the financial statements and the cash flow statement of Ganga Forging Limited ("the company") for the year 2024-25 and that to the best of our knowledge and belief, we state that:

these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

these statements together present a true and fair view of the Companys affairs and are in compliance with applicable accounting standards, applicable laws and regulations.

There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year 2024-25, which are fraudulent, illegal or violative of the Companys code of conduct.

We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the audit committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to rectify these deficiencies.

We have indicated to the Auditors and the Audit committee:

There are no significant changes in internal control over financial reporting during the year;

There are no significant changes in accounting policies during the year; and

There are no instances of significant fraud of which we have become aware and the involvement therein, if any of the management or an employee having a significant role in the Companys internal control system over financial reporting.

Date: 29 th August, 2025

Place : Sadak Pipaliya, Rajkot

For Ganga Forging Limited

Sd/- Sd/- Sd/- Avni Dadhaniya Hiralal M. Tilva Rakesh Patel

Chief Financial Officer Chairman & Managing Director

[DIN: 00022539]

Managing Director [DIN: 00510990]

DECLARATION AFFIRMING COMPLIANCE WITH THE CODE OF CONDUCT

(Regulation 34(3) read with Para D of Schedule V of the SEBI (Listing Obligations and Disclosures Requirement) Regulations, 2015)

To,

The Members,

Ganga Forging Limited

Dear Sir/Madam,

As provided under SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, as amended, we hereby declare that all the members of the Board of Directors and Senior Management personnel of the Company have affirmed compliances with the Code of Conduct for Board of Directors and Senior Management of the company during the financial year ended 31 st March, 2025.

Date: 29 th August, 2025

Place : Sadak Pipaliya, Rajkot

For Ganga Forging Limited

Sd/- Sd/-

Hiralal M. Tilva Rakesh Patel

Chairman & Managing Director [DIN: 00022539]

Managing Director [DIN: 00510990]