Paramount Speciality Forgings Ltd Directors Report

To,

The Members of

Paramount Specialty Forgings Limited

The Board of Directors is pleased to present the 3rd Boards Report on the business and operations of Paramount Specialty Forggings Limited ("the Company"), together with the audited financial statements of the Company for the financial year ended March 31, 2026, and the Auditors Report thereon.

I. Financial Performance and Business Overview

A. Financial Highlights

During the financial year under review, the financial performance of the Company was as follows:

(Rs in Lakhs)

Sr. No.	Particulars	Year ended March 31, 2026	Year ended March 31, 2025
1.	Revenue from operations	11,995.97	10,993.26
2.	Other income	180.76	96.84
3.	Total income	12,176.73	11,090.10
4.	(Less): Total expenses, excluding depreciation and amortisation	11,456.12	10,360.49
5.	Profit before depreciation, amortisation and tax	720.61	729.61
6.	(Less): Depreciation and amortisation expense	150.35	142.61
7.	Profit before tax	570.26	587.00
	(Less): Tax expense:
	Current tax	165.00	169.86
8.	Prior-year tax adjustments	(3.52)	(32.99)
	Deferred tax (benefit)/expense	(16.75)	3.56
	Total tax expense	144.73	140.43
9.	Profit after tax	425.53	446.57

The Company was not required to prepare consolidated financial statements for the financial year ended March 31, 2026, as it did not have any subsidiary, associate company or joint venture as at March 31, 2026.

B. Details of Companies which have become or ceased to be Subsidiaries, Associates or Joint Ventures during the year:

During the financial year under review, no company became or ceased to be a subsidiary, associate company or joint venture of the Company. Further, as at March 31, 2026, the Company did not have any subsidiary, associate company or joint venture.

Accordingly, the Company was not required to prepare consolidated financial statements under Section 129(3) of the Companies Act, 2013, and the statement containing the salient features of the financial statements of subsidiaries, associates and joint ventures in Form AOC-1 is not applicable to the Company.

C. Highlights of performance of Subsidiaries, Associates and Joint Ventures:

Since the Company did not have any subsidiary, associate company or joint venture during the financial year under review, there is no performance or financial position of any such entity required to be reported.

D. State of Companys Affairs:

For the financial year ended March 31, 2026, standalone gross revenues and other income of the Company is Rs. 121,76,72,632/- (Rupees one hundred and twenty-one crore seventy-six lakh seventy-Two thousand Six Hundred and Thirty-Two only) as compared to Rs. 110,90,10,130.51/- (Rupees one hundred and ten crore ninety lakh ten thousand One Hundred and Thirty point & Five one Paise only) as on March 31, 2025.

The Company has made a standalone net profit of Rs. 4,25,53,248.49 /- (Rupees four crore twenty-five lakh fifty-three thousand Two Hundred and Forty-Eight point & Four Nine Paise only) for the year ended March 31, 2026 as compared to the previous year profit of Rs. 4,46,57,200.48/- (Rupees four crore forty-six lakh fifty-seven thousand Two Hundred point & Four Eight Paise only) for the year ended March 31, 2025.

E. Changes in the nature of business of the Company:

During the financial year under review, there was no change in the nature of the Companys business. The Company continued to be principally engaged in the manufacture and supply of steel forgings and customised forged components, including flanges, rings, blanks, tube sheets, nozzles, valve components and other non-standard forgings.

F. Dividend:

The Board of Directors has not recommended any dividend on the equity shares of the Company for the financial year ended March 31, 2026, with a view to conserving the resources of the Company for its business requirements and future growth.

The Company has adopted a Dividend Distribution Policy, which is available on the website of the Company under the Investor Information section at the following web-link: https://paramountforge.com/investor-info.html#tab8

G. Transfer to Reserves:

Pursuant to the provisions of Section 134(3)(i) of the Companies Act, 2013, the Board of Directors confirms that no amount has been transferred to the General Reserves of the Company during the Financial Year ended March 31, 2026. The entire net profit earned for the year has been retained in the Profit and Loss Account, to be deployed towards strengthening the operational and financial position of the Company.

H. Particulars of Loans, Investments, Guarantees or Securities under Section 186:

During the Financial Year under review, the Company has not provided any loan or made any investment or given any guarantee or provided any security in respect of any loan to any person as mentioned in Section 186 of the Companies Act, 2013.

I. Particulars of Contracts or Arrangements with Related Parties referred to in Sub-Section (1) of Section 188:

During the financial year under review, No transactions with related parties covered under Section 188(1) of the Companies Act, 2013. None of such transactions was material under the Companys Policy on Related Party Transactions or the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Prior approval of the Audit Committee and the Board of Directors was obtained for the remuneration payable to the promoter employees within specified limits. The actual remuneration paid remained within the approved limits and was periodically placed before the Audit Committee and the Board for review and noting.

Accordingly, there were no transactions requiring disclosure in Form AOC-2.

The Companys Policy on Related Party Transactions is available on its website at: https://paramountforge.com/investor-info.html#tab8

J. Deposits:

i. Deposits covered under Chapter V of the Companies Act, 2013:

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

ii. Deposits not in compliance with Chapter V of the Companies Act, 2013:

During the financial year under review, as the Company has not accepted any deposit during the financial year under review there is no noncompliance with the requirements of Chapter V of the Act.

K. Outstanding Unsecured Loans from Directors and Promoters:

The Company had certain legacy unsecured loan balances outstanding from its Directors and Promoters, originating prior to the conversion of the erstwhile limited liability partnership into the Company. No fresh loan was received from any of the said persons during the financial year under review. The movement in the outstanding balances during the year was as follows:

(Rs in Lakhs)

Sr No.	Name	Capacity	Opening balance as at April 1, 2025	Fresh loan received during the year	Net reduction/ adjustment during the year*	Interest paid	Closing balance as at March 31, 2026
1	Abbasali S. Hararwala	Promoter	66.64	Nil	6.19	Nil	60.45
2	Abdulla A. Bhagat	Promoter	119.98	Nil	14.42	Nil	105.56
3	Hoozefa S. Hararwala	Promoter	66.64	Nil	6.19	Nil	60.45
4	Roshan A. Hararwala	Promoter	80.01	Nil	7.55	Nil	72.46
5	Zahid M. Hararwala	Promoter	80.22	Nil	11.06	Nil	69.16
6	Aliasgar R. Hararwala	Managing Director and Promoter	119.98	Nil	14.42	Nil	105.56
7	Aliasgar A. Bhagat	Director and Promoter	80.01	Nil	7.55	Nil	72.46
8	Mohammed S. Hararwala	Director and Promoter	66.71	Nil	9.59	Nil	57.12
Total			680.19	Nil	76.96*	Nil	603.23*

*The figures are presented in lakhs and have been rounded off. Consequently, the aggregate of the individually rounded figures may vary marginally from the total appearing in the audited financial statements.

The net reduction/adjustment during the year includes payments and book adjustments recorded in the respective loan accounts, including the adjustment of amounts relating to the respective Promoter Selling Shareholders share of expenses incurred in connection with the Offer for Sale undertaken as part of the initial public offering. Such book adjustments did not represent fresh loans received by the Company during the year.

L. Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report:

No material changes and commitments affecting the financial position of the Company have occurred from the close of the financial year ended 31st March, 2026 till the date of this report.

II. Capital & Shares:

A. Share Capital:

During the financial year under review, there was no change in the authorised share capital or the issued, subscribed and paid-up equity share capital of the Company.

As at March 31, 2026, the authorised share capital of the Company was Rs20,00,00,000, divided into 2,00,00,000 equity shares of Rs10 each.

The issued, subscribed and paid-up equity share capital of the Company was Rs19,68,20,000, divided into 1,96,82,000 fully paid-up equity shares of Rs10 each.

B. Issue of Sweat Equity Shares:

During the financial year under review, the Company did not issue any sweat equity shares.

C. Issue of Shares on Right Basis:

During the financial year under review, the Company did not issue any equity shares by way of a rights issue.

D. Issue of Shares under Employee Stock Option Scheme:

During the financial year under review, the Company did not have any employee stock option scheme, employee stock purchase scheme, stock appreciation rights scheme or any other share-based employee benefit scheme. No options or other share-based awards were outstanding as at March 31, 2026.

The Company had also not provided any money for the purchase or subscription of its shares by employees or by any trustee for the benefit of employees.

E. Issue of Equity Shares with differential rights as to dividend, voting or otherwise:

During the financial year under review, the Company did not issue any equity shares with differential rights as to dividend, voting or otherwise. The Company had only one class of equity shares carrying uniform voting rights.

F. Other Changes in Share Capital:

During the financial year under review, the Company did not undertake any bonus issue, preferential issue, private placement, conversion of securities, buy-back, reduction of share capital, subdivision or consolidation of shares, or variation of shareholders rights.

G. Transfer of unclaimed / unpaid amounts / shares to the Investor Education and Protection Fund:

During the financial year under review, no amount or shares became due for transfer to the Investor Education and Protection Fund under the applicable provisions of the Companies Act, 2013.

Further, as at March 31, 2026, no equity shares of the Company were lying in any demat suspense account, unclaimed suspense account or other suspense or escrow account, and there was no movement in any such account during the year.

H. Disclosure in respect of Voting Rights not exercised directly by the Employees:

The disclosure relating to voting rights not exercised directly by employees is not applicable, as the Company did not have any employee benefit trust or other scheme under which shares were held by a trustee for the benefit of employees.

I. Utilisation of Proceeds from the Fresh Issue pursuant to the Initial Public Offering:

Pursuant to Regulation 32 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company confirms that, during the financial year under review, there was no deviation or variation in the utilisation of the proceeds raised through the Fresh Issue pursuant to the Initial Public Offering of the Company, from the objects stated in the Prospectus dated September 23, 2024.

There was also no modification in the objects for which the proceeds were raised.

The cumulative utilisation of the Fresh Issue proceeds up to March 31, 2026 was as follows:

(Rs in Lakhs)

Sr. No.	Objects as stated in the Prospectus	Amount allocated as per the Prospectus	Cumulative amount utilised up to March 31, 2026	Unutilised amount as at March 31, 2026
1.	Capital expenditure towards construction of factory shed and purchase of machinery and equipment at the Khalapur Plant	2,381.28	1,785.88	595.40
2.	General corporate purposes	72.38	33.57	38.81
3.	Offer-related expenses	379.52	377.71	1.81
Total		2,833.18	2,197.16	636.02

As at March 31, 2026, the unutilised Fresh Issue proceeds aggregating to Rs636.02 lakh were temporarily deployed as follows:

Particulars	Amount
Amount placed in fixed deposits	Rs578.27 lakh
Amount maintained in bank accounts with HDFC Bank	Rs57.75 lakh
Total unutilised proceeds	Rs636.02 lakh

The above amounts were pending utilisation in accordance with the objects stated in the Prospectus.

The Audit Committee and the Board of Directors periodically review and monitor the utilization and temporary deployment of the unutilized Fresh Issue proceeds.

The Company will continue to ensure that the balance proceeds are utilised only towards the objects stated in the Prospectus and in accordance with the applicable regulatory requirements.

III. Directors, Key Managerial Personnel

A. Directors

i. Board Composition as at March 31, 2026

As at March 31, 2026, the Board of Directors of the Company comprised six Directors with an appropriate combination of Executive and Non-Executive Independent Directors, as set out below:

Category	Number of Directors
Executive Directors	3
Non-Executive Independent Directors	3
— of which, Woman Independent Director	1
Total	6

The composition of the Board was in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), to the extent applicable to the Company as an SME-listed entity.

The profiles of the Directors, including their qualifications, experience and areas of expertise, are available on the website of the Company.

ii. Changes in the Board during the Financial Year

During the financial year ended March 31, 2026, there was no change in the composition of the Board of Directors of the Company.

During the year, Mr. Aliasgar Abdulla Bhagat retired by rotation at the Annual General Meeting of the Company held on September 25, 2025 and, being eligible, was re-appointed by the Members. Accordingly, his retirement and re-appointment did not result in any change in the composition of the Board.

There were no other appointments, resignations or cessations of Directors during the financial year under review.

iii. Director Retiring by Rotation at the Ensuing Annual General Meeting

In accordance with the provisions of Section 152(6) of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Mohammed Salim Hararwala, Executive Director, retires by rotation at the ensuing Annual General Meeting and, being eligible, has offered himself for re-appointment.

The requisite particulars and brief profile of Mr. Mohammed Salim Hararwala are provided in the Notice convening the ensuing Annual General Meeting in accordance with the applicable provisions of the Companies Act, 2013, the SEBI Listing Regulations, to the extent applicable, and the Secretarial Standard on General Meetings (SS-2).

iv. Changes in the Board after March 31, 2026 and up to the date of this Report

a. Demise of Mr. Nimesh Mukerji

The Board records with profound sorrow the demise of Mr. Nimesh Mukerji (DIN: 07705885), Non-Executive Independent Director of the Company, on April 14, 2026.

Mr. Mukerji served as Chairman of the Nomination and Remuneration Committee and the Stakeholders Relationship Committee and as a Member of the Audit Committee and the Corporate Social Responsibility Committee. During his association with the Company, he made valuable contributions to the deliberations of the Board and its Committees and to the overall governance of the Company.

The Board places on record its deep appreciation for the valuable services and contribution rendered by Mr. Mukerji during his tenure with the Company and conveys its sincere condolences to his family.

b. Appointment of Mr. Satish Madhav Shenoy

Consequent to the vacancy arising in the office of Independent Director and based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors, at its Meeting held on July 11, 2026, appointed Mr. Satish Madhav Shenoy (DIN: 00230771) as an Additional Director in the category of Non-Executive Independent Director of the Company with effect from July 11, 2026.

In accordance with Section 161(1) of the Companies Act, 2013 read with the Articles of Association of the Company, Mr. Shenoy holds office as an Additional Director up to the date of the ensuing Annual General Meeting or the last date on which the ensuing Annual General Meeting should have been held, whichever is earlier.

Based on the recommendation of the Nomination and Remuneration Committee and the declarations, confirmations and other documents placed before it, the Board is of the opinion that Mr. Shenoy is a person of integrity, possesses the requisite expertise and experience and fulfils the conditions prescribed for appointment as an Independent Director and is independent of the management of the Company.

The Board has recommended to the Members the appointment of Mr. Satish Madhav Shenoy as a Non-Executive Independent Director of the Company, not liable to retire by rotation, for a term of five consecutive years commencing from July 11, 2026 up to July 10, 2031, subject to approval of the Members at the ensuing Annual General Meeting.

The requisite particulars, brief profile and other disclosures relating to Mr. Shenoy are provided in the Notice convening the ensuing Annual General Meeting and are also available on the website of the Company.

v. Disqualification and Debarment of Directors

Based on the declarations and disclosures received from the Directors and the certificate obtained from a Practising Company Secretary, none of the Directors of the Company is disqualified from being appointed or continuing as a Director under Section 164 of the Companies Act, 2013.

Further, none of the Directors has been debarred or disqualified from holding the office of Director by the Securities and Exchange Board of India, the Ministry of Corporate Affairs or any other competent authority.

The certificate issued by the Practising Company Secretary in this regard forms part of this Board Report as Annexure - I.

B. Key Managerial Personnel

i. Key Managerial Personnel as at March 31, 2026

Pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following persons were the Key Managerial Personnel of the Company as at March 31, 2026:

Sr. No.	Name	Designation	Date of Appointment
1	Mr. Aliasgar Roshan Hararwala	Managing Director	May 5, 2023
2	Ms. Farkhanda Abdul Razak Pagarkar	Chief Financial Officer	November 11, 2023
3	Ms. Ankita Anil Patankar	Company Secretary & Compliance Officer	November 11, 2023

There was no change in the Key Managerial Personnel of the Company during the financial year ended March 31, 2026.

ii. Changes in Key Managerial Personnel after March 31, 2026

a. Resignation of Ms. Ankita Anil Patankar

Ms. Ankita Anil Patankar resigned from the office of Company Secretary & Compliance Officer of the Company with effect from the close of business hours on April 20, 2026.

The Board places on record its appreciation for the services rendered by Ms. Ankita Anil Patankar during her tenure with the Company and wishes her well in her future endeavours.

b. Appointment of Mr. Zubin Chandulal Shah

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors, at its Meeting held on May 29, 2026, appointed Mr. Zubin Chandulal Shah (Membership No. A44200) as the Company Secretary & Compliance Officer of the Company with effect from May 29, 2026.

iii. Key Managerial Personnel as at the date of this Report

Accordingly, as at the date of this Report, the Key Managerial Personnel of the Company are as follows:

Sr. No.	Name	Designation
1	Mr. Aliasgar Roshan Hararwala	Managing Director
2	Ms. Farkhanda Abdul Razak Pagarkar	Chief Financial Officer
3	Mr. Zubin Chandulal Shah	Company Secretary & Compliance Officer

C. Independent Directors

i. Declaration of Independence

Pursuant to Section 149(7) of the Companies Act, 2013, all the Independent Directors who were in office during the financial year under review submitted the requisite declarations confirming that they met the criteria of independence prescribed under Section 149(6) of the Act and that there was no change in the circumstances which could affect their status as Independent Directors.

Based on the declarations and disclosures received, the Board is of the opinion that the Independent Directors fulfilled the conditions specified under the Companies Act, 2013 for appointment and continuation as Independent Directors and were independent of the management of the Company.

ii. Compliance with Applicable Codes

The Independent Directors confirmed compliance with the Code for Independent Directors prescribed under Schedule IV to the Companies Act, 2013 and the applicable codes adopted by the Company, including the Code of Conduct for Directors and Senior Management Personnel and the Code of Conduct under the SEBI (Prohibition of Insider Trading) Regulations, 2015.

iii. Pecuniary Relationship or Transactions with the Company

During the financial year under review, the Non-Executive Independent Directors had no pecuniary relationship or transactions with the Company other than the sitting fees paid to them for attending Meetings of the Board and its Committees.

No commission or other remuneration was paid to the Non-Executive Independent Directors during the year under review.

D. Nomination and Remuneration Policy & Remuneration

i. Nomination and Remuneration Policy

The Company has adopted a Nomination and Remuneration Policy pursuant to Section 178 of the Companies Act, 2013 and other applicable provisions of law.

The Policy, inter alia, lays down the criteria for identification and appointment of Directors, Key Managerial Personnel and Senior Management, their qualifications, positive attributes and independence, wherever applicable, and provides the framework relating to remuneration and performance evaluation.

There was no change in the Nomination and Remuneration Policy during the financial year under review.

ii. Remuneration during the Financial Year

The remuneration paid to the Directors and Key Managerial Personnel during the financial year under review was in accordance with the applicable approvals and the Nomination and Remuneration Policy of the Company.

During the year under review, the Executive Directors were paid fixed remuneration in accordance with the applicable approvals. No performance-linked incentive, variable pay, bonus or separate perquisite was paid to them.

The Non-Executive Independent Directors were paid only sitting fees for attending Meetings of the Board and its Committees.

iii. Web-link to the Policy

The Nomination and Remuneration Policy of the Company is available on the website of the Company under the Investor Information section at: https://paramountforge.com/investor-info.html#tab8

iv. Remuneration of Directors and Key Managerial Personnel

The disclosures required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report and are annexed hereto as Annexure – II.

E. Committees of the Board

i. Committees Constituted by the Board

In accordance with the applicable provisions of the Companies Act, 2013, the rules made thereunder and the SEBI Listing Regulations, to the extent applicable to the Company, the Board has constituted the following Committees:

a. Audit Committee;

b. Nomination and Remuneration Committee;

c. Stakeholders Relationship Committee; and

d. Corporate Social Responsibility Committee.

The Committees operate within their respective terms of reference and assist the Board in discharging its responsibilities in the areas entrusted to them.

ii. Composition of Committees as at March 31, 2026

The composition of the Committees as at March 31, 2026 was as follows:

Committee	Chairperson	Other Members
Audit Committee	Mr. Kurian Pallathuseril Chandy	Mr. Nimesh Mukerji; Mr. Aliasgar Roshan Hararwala
Nomination and Remuneration Committee	Mr. Nimesh Mukerji	Mr. Kurian Pallathuseril Chandy; Ms. Apurva Pradeep Joshi
Stakeholders Relationship Committee	Mr. Nimesh Mukerji	Mr. Aliasgar Abdulla Bhagat; Mr. Aliasgar Roshan Hararwala
Corporate Social Responsibility Committee	Mr. Aliasgar Roshan Hararwala	Mr. Aliasgar Abdulla Bhagat; Mr. Nimesh Mukerji

iii. Reconstitution of Committees after March 31, 2026

Consequent to the demise of Mr. Nimesh Mukerji on April 14, 2026 and the resultant vacancies in the Committees of which he was a member or Chairperson, the Board reconstituted the Committees by way of a resolution passed by circulation on August 14, 2026. Pursuant to such reconstitution, the composition of the Committees was as follows:

Committee	Chairperson	Other Members
Audit Committee	Mr. Kurian Pallathuseril Chandy	Mr. Satish Madhav Shenoy; Mr. Aliasgar Roshan Hararwala
Nomination and Remuneration Committee	Mr. Kurian Pallathuseril Chandy	Ms. Apurva Pradeep Joshi; Mr. Satish Madhav Shenoy; Mr. Aliasgar Abdulla Bhagat
Stakeholders Relationship Committee	Mr. Kurian Pallathuseril Chandy	Mr. Satish Madhav Shenoy; Mr. Aliasgar Roshan Hararwala
Corporate Social Responsibility Committee	Mr. Aliasgar Roshan Hararwala	Mr. Aliasgar Abdulla Bhagat; Mr. Kurian Pallathuseril Chandy

iv. Recommendations of the Audit Committee

During the financial year under review, there was no instance where the Board did not accept any recommendation of the Audit Committee.

F. Meetings of the Board and its Committees

i. Number and Dates of Meetings

During the financial year ended March 31, 2026, four Meetings of the Board of Directors were held.

The details of the Board and Committee Meetings held during the financial year are as follows:

Particulars	Number of Meetings	Dates
Board of Directors	4	May 29, 2025; August 23, 2025; November 13, 2025; February 24, 2026
Audit Committee	4	May 29, 2025; August 23, 2025; November 13, 2025; February 24, 2026
Nomination and Remuneration Committee	1	August 23, 2025
Stakeholders Relationship Committee	1	February 16, 2026
Corporate Social Responsibility Committee	1	February 16, 2026

The maximum interval between two consecutive Board Meetings held during the financial year did not exceed the prescribed limit of 120 days.

Certain matters were also considered and approved by way of resolutions passed by circulation, wherever required, in accordance with Section 175 of the Companies Act, 2013 and the applicable provisions of Secretarial Standard-1.

ii. Attendance of Directors

The attendance of the Directors at the Board and Committee Meetings during the financial year was as follows:

Name of Director	Board Meetings entitled to attend	Board Meetings attended	Committee Meetings entitled to attend	Committee Meetings attended
Mr. Aliasgar Abdulla Bhagat	4	4	2	2
Mr. Aliasgar Roshan Hararwala	4	4	6	6
Mr. Mohammed Salim Hararwala	4	4	Nil	Nil
Mr. Kurian Pallathuseril Chandy	4	4	5	5
Mr. Apurva Pradeep Joshi	4	4	1	1
Mr. Nimesh Mukerji	4	4	7	7

G. Annual Performance Evaluation

i. Evaluation by the Board and the Nomination and Remuneration Committee

Pursuant to Section 134(3)(p), Section 178 and other applicable provisions of the Companies Act, 2013, the annual performance evaluation of the Board as a whole, its Committees and the individual Directors was carried out during the financial year under review.

The evaluation was undertaken through a structured process based on criteria relating, inter alia, to the composition and functioning of the Board and its Committees, participation and contribution of Directors, quality of deliberations, effectiveness of decision-making, flow of information and overall governance effectiveness.

The Nomination and Remuneration Committee reviewed the performance evaluation process, and the Board carried out the evaluation of the Board as a whole, its Committees and individual Directors in accordance with the applicable framework.

The outcome of the evaluation indicated that the Board and its Committees were functioning effectively and collectively possessed an appropriate mix of skills, experience and expertise for the effective governance and oversight of the Company.

ii. Separate Meeting of Independent Directors

A separate Meeting of the Independent Directors was held on March 28, 2026, without the presence of Non-Independent Directors and members of management.

At the said Meeting, the Independent Directors, inter alia:

a. reviewed the performance of the Non-Independent Directors;

b. reviewed the performance of the Board as a whole;

c. reviewed the performance of the Chairperson of the Company; and

d. assessed the quality, quantity and timeliness of the flow of information between the management and the Board necessary for the Board to effectively and reasonably perform its duties.

H. Directors Responsibility Statement

Pursuant to Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, the Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, state that:

i. In the preparation of the annual accounts for the financial year ended March 31, 2026, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any.

ii. The Directors had selected such accounting policies and applied them consistently and had 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 as at March 31, 2026 and of the profit of the Company for the financial year ended on that date.

iii. 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.

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

v. The Directors had laid down internal financial controls to be followed by the Company and, except for the possible effects of the weaknesses reported by the Statutory Auditors, such internal financial controls were, in all material respects, adequate and were operating effectively as at March 31, 2026. The Boards response in respect of the said matters is set out in Point IV(A)(vi)(b) of this Report.

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

IV. Audit Reports and Auditors:

A. Statutory Audit Report and Boards Comments

i. Statutory Audit Report

M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants (Firm Registration No. 104607W/W100166), Statutory Auditors of the Company, have audited the financial statements of the Company for the financial year ended March 31, 2026.

The Statutory Auditors have expressed an unmodified opinion on the financial statements of the Company for the financial year ended March 31, 2026.

The Auditors Report also contains certain matters reported pursuant to the applicable provisions of the Companies Act, 2013, the Companies (Auditors Report) Order, 2020, the Companies (Audit and Auditors) Rules, 2014 and the report on Internal Financial Controls with reference to the financial statements. The Board has taken note of the said matters, and the relevant observations together with the Management / Boards responses thereto are set out below.

ii. Audit Trail in Accounting Software

a. The Statutory Auditors have reported that the Company has used accounting software for maintaining its books of account which has a feature of recording an audit trail (edit log), and that such feature operated throughout the financial year for all relevant transactions recorded in the software. However, in respect of Cloud 9 ERP software used for financial accounting, the audit trail was not enabled at the database level for recording direct database-level edits.

The Statutory Auditors have further reported that, during the course of their audit, they did not come across any instance of the audit trail feature being tampered with.

Further, the audit trail was preserved in accordance with the applicable statutory requirements for record retention, except to the extent of the period for which compliance relating to daily backup was not adhered to.

b. Management / Boards Response

Management acknowledges that the Company migrated its financial accounting system from Tally to Cloud 9 ERP with effect from October 1, 2025. While the application-level audit trail functionality was enabled and operational, the database-level audit trail functionality for recording direct database-level edits was not enabled during the initial implementation phase. Management has confirmed that the database-level audit trail functionality has since been enabled and is operational.

With regard to daily backup compliance, Management is evaluating suitable options for implementing an automated daily backup mechanism to ensure consistency and reliability of backups and intends to implement the appropriate solution at the earliest.

iii. Immovable Properties not held in the name of the Company

a. The Statutory Auditors have reported that certain immovable properties disclosed in the financial statements continue to stand in the name of Paramount Specialty Forgings LLP, the erstwhile entity from which the Company was converted, and that the Company is in the process of transferring the same in its name.

The details of such properties, as reported by the Statutory Auditors, are as follows:

Sr. No.	Description of Property	Value (Rs in Lakhs)	Held in the name of
1	Freehold Land	42.87	Paramount Specialty Forgings LLP
2	Building – Factory, Office and Residential Building	1,125.52	Paramount Specialty Forgings LLP
3	Leasehold Property	10.26	Paramount Specialty Forgings LLP

b. Management / Boards Response

Management has initiated the necessary documentation and legal formalities for transfer of the title deeds in the name of the Company. The requisite formalities are presently in progress and the Company is taking necessary steps for completion of the transfer at the earliest.

iv. Undisputed Statutory Dues

a. The Statutory Auditors have reported that the Company was generally regular in depositing undisputed statutory dues with the appropriate authorities, including Goods and Services Tax, Provident Fund, Employees State Insurance, Income-tax, Customs Duty, Profession Tax and other applicable statutory dues.

The Statutory Auditors have further reported that, as at March 31, 2026, there were no undisputed statutory dues outstanding for a period of more than six months from the date they became payable, except for certain Provident Fund dues as more particularly detailed in the Auditors Report.

b. Management / Boards Response

The Board has taken note of the observation of the Statutory Auditors. Management has reviewed the matter and is taking appropriate steps to ensure compliance with the applicable statutory requirements. The Company continues to strengthen its monitoring mechanism for timely deposit of statutory dues.

v. Disputed Income-tax Dues

a. The Statutory Auditors have reported that, as at March 31, 2026, there were no dues of Income-tax outstanding on account of any dispute, except for certain matters which are pending before the Commissioner of Income-tax (Appeals), as more particularly detailed in the Auditors Report.

b. Management / Boards Response

The matters referred to above relate to income-tax assessments which are under dispute and are pending before the Commissioner of Income-tax (Appeals). The Company is pursuing the said matters in accordance with the applicable legal process and will take appropriate action based on the outcome thereof.

vi. Internal Financial Controls with Reference to the Financial Statements

a. The Statutory Auditors have observed that the Company needs to strengthen the documentation and standardisation of certain key processes and introduce a maker-checker mechanism over the Payroll and Financial Closing Process.

The Statutory Auditors have further noted that the Management has informed them that the Company is in the process of strengthening its overall controls over the aforesaid processes.

Further, in their report on Internal Financial Controls with reference to the financial statements, the Statutory Auditors have reported that, except for the possible effects of the weaknesses referred to above, the Company had, in all material respects, adequate internal financial controls with reference to the financial statements and such controls were operating effectively as at March 31, 2026.

b. Management / Boards Response

Management has initiated steps towards strengthening the documentation and standardisation of the Companys key processes. Further, a maker-checker mechanism is being implemented for the Payroll and Financial Closing Processes with a view to strengthening the control framework and reducing the risk of errors and omissions.

B. Statutory Auditors

i. Appointment and Tenure

M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants (Firm Registration No. 104607W/W100166), Mumbai, were appointed as the Statutory Auditors of the Company by the Members at the Annual General Meeting held on August 20, 2024, for a term of five consecutive years, to hold office from the conclusion of the said Annual General Meeting until the conclusion of the Annual General Meeting to be held in the year 2029, in accordance with the provisions of Section 139 of the Companies Act, 2013 and the rules made thereunder.

At the time of their appointment, the Company had received the requisite consent and certificate from the Statutory Auditors confirming their eligibility for appointment and compliance with the criteria prescribed under Sections 139 and 141 of the Companies Act, 2013.

Accordingly, M/s. Kalyaniwalla & Mistry LLP continue to hold office as the Statutory Auditors of the Company, and no appointment or re-appointment of Statutory Auditors is proposed at the ensuing Annual General Meeting.

C. Secretarial Auditor

i. Appointment and Tenure

Pursuant to Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and other applicable provisions, M/s. Amit Dharmani & Associates, Practising Company Secretaries, were re-appointed as the Secretarial Auditors of the Company for a term of five consecutive financial years commencing from the financial year 2025-26 up to the financial year 2029-30.

Based on the recommendation of the Audit Committee, the Board of Directors, at its Meeting held on May 29, 2025, approved the re-appointment of M/s. Amit Dharmani & Associates as the Secretarial Auditors of the Company for the aforesaid term. The said re-appointment was subsequently approved by the Members at the Annual General Meeting held on September 25, 2025.

Accordingly, M/s. Amit Dharmani & Associates continue to act as the Secretarial Auditors of the Company for the financial year 2025-26.

ii. Secretarial Audit Report

Pursuant to Section 204 of the Companies Act, 2013 read with the applicable rules made thereunder, the Secretarial Audit Report for the financial year ended March 31, 2026, in Form MR-3, shall form part of this Report and shall be annexed hereto as Annexure - III.

D. Internal Auditor

Pursuant to Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014 and other applicable provisions, M/s. Pipalia Singhal & Associates, Chartered Accountants (Firm Registration No. 114665W) acted as the Internal Auditors of the Company for the financial year 2025-26.

The Internal Auditors carried out the internal audit in accordance with the scope determined for the financial year under review. The internal audit function assists the Company in reviewing its internal controls, operational and financial processes, risk management practices and compliance systems.

Further, upon receipt of their consent to continue as Internal Auditors, the Board of Directors, at its Meeting held on May 29, 2026, re-appointed M/s. Pipalia Singhal & Associates as the Internal Auditors of the Company for the financial year 2026-27, pursuant to Section 138 of the Companies Act, 2013 read with the applicable rules made thereunder.

E. Cost Auditor and Maintenance of Cost Records

i. Maintenance of Cost Records

Pursuant to Section 148(1) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended, the Company is required to maintain cost records as specified by the Central Government. Accordingly, the prescribed cost accounts and records have been duly made and maintained by the Company during the financial year under review.

ii. Cost Auditor for the Financial Year 2025-26

Based on the recommendation of the Audit Committee, the Board of Directors, at its Meeting held on May 29, 2025, re-appointed M/s. Jitendrakumar & Associates, Cost Accountants (Firm Registration No. 101561) as the Cost Auditors of the Company for the financial year 2025-26, pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended.

The remuneration payable to the Cost Auditors for the financial year 2025-26, as approved by the Board of Directors, was duly ratified by the Members at the Annual General Meeting held on September 25, 2025. Section 148(3) provides for appointment of the cost auditor by the Board with remuneration determined by the Members in the prescribed manner.

iii. Cost Audit Report for the Financial Year 2025-26

The Cost Audit Report for the financial year ended March 31, 2026 does not contain any qualification, reservation, adverse remark or observation requiring explanation or comment by the Board.

iv. Cost Auditor for the Financial Year 2026-27

Based on the recommendation of the Audit Committee and upon receipt of the requisite consent, the Board of Directors, at its Meeting held on May 29, 2026, appointed M/s. Jitendrakumar & Associates, Cost Accountants (Firm Registration No. 101561) as the Cost Auditors of the Company for the financial year 2026-27, pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended.

The remuneration payable to the Cost Auditors for the financial year 2026-27, as approved by the Board of Directors, is being placed before the Members at the ensuing Annual General Meeting for ratification in accordance with the applicable provisions of the Companies Act, 2013 and the rules made thereunder.

F. Frauds Reported by Auditors

During the financial year under review, no fraud was reported by the Statutory Auditors, Secretarial Auditor or any other auditor under Section 143(12) of the Companies Act, 2013 read with the applicable provisions thereof.

G. Internal Financial Controls with Reference to the Financial Statements

The Company has established a framework of internal financial controls with reference to the financial statements, having regard to the nature, size and complexity of its operations.

The Statutory Auditors, in their Report on Internal Financial Controls with reference to the financial statements, have observed the need for strengthening the documentation and standardisation of certain key processes and for introducing maker-checker controls over the Payroll and Financial Closing Process.

The Statutory Auditors have further reported that, except for the possible effects of the weaknesses referred to in their Report, the Company had, in all material respects, adequate internal financial controls with reference to the financial statements and such controls were operating effectively as at March 31, 2026.

The Board and the Audit Committee have taken note of the aforesaid observations. Reference is invited to Point IV (A)(vi)(b) of the above-mentioned point.

The Board and the Audit Committee shall continue to review the strengthening of the internal financial control framework and implementation of the corrective measures.

V. Corporate Social Responsibility

The Company has adopted a Corporate Social Responsibility ("CSR") Policy in accordance with the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended.

The Company has constituted a Corporate Social Responsibility Committee to oversee the CSR activities of the Company in accordance with the CSR Policy.

The Annual Report on CSR Activities for the financial year ended March 31, 2026, containing the particulars prescribed under the applicable provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014, forms part of this Report and is annexed hereto as Annexure IV.

The CSR Policy of the Company is available on the website of the Company under the Investor Information section at the web-link specified in this Report.

URL: https://paramountforge.com/investor-info.html#tab8

VI. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

i. Conservation of Energy:

Pursuant to the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are as follows:

1. Steps taken or impact on conservation of energy	The Company has undertaken installation of a solar power project with an aggregate capacity of 1,050 KW, of which 150 KW had been commissioned as at March 31, 2026.
2. Steps taken by the company for utilising alternate sources of energy	The Company has undertaken the aforesaid solar power project towards utilisation of solar energy as an alternate source of energy.
3. Capital investment on energy conservation equipments	The total capital expenditure towards the solar power project is approximately Rs3 crore.

ii. Technology Absorption:

The management always searches for and takes into consideration new developments in the market and the technology so as to absorb the new technology in carrying out the business activities of the Company.

1. Efforts made towards technology absorption	During the financial year, the Company strengthened its in-house manufacturing, machining and testing capabilities through installation and commissioning of various machinery and equipment at its machining centre, comprising: (i) Titan VTL – 2.5 metre chuck – 1 No.; (ii) LTV40 CNC Machining Center – LMW – 1 No.; (iii) LL20TL3 CNC Machining Center – LMW – 1 No.; (iv) Vertical Borer Machine – Webster Bennett 60" – 1 No.; (v) Vertical Turret Lathe Machine – Stanko Make – 1 No.; (vi) J5 Vertical Machining Center – LMW – 1 No.; and (vii) CNC Lathe Machine – Ace Designers – 1 No. Further, the Companys in-house testing laboratory along with an integrated machining facility for sample testing was made fully functional.
2. Benefits derived like product improvement, cost reduction, product development or import substitution	The above initiatives have strengthened the Companys in-house machining and testing capabilities.
3. Any technology imported during the last three years (Yes/No) (If yes, enter below)	No
a. The details of technology imported	Not Applicable
b. The year of import	Not Applicable
c. Whether the technology been fully absorbed	Not Applicable
d. If not fully absorbed, areas where absorption has not taken place, and the reasons thereof	Not Applicable
4. Expenditure incurred on Research and Development	Nil

iii. Foreign Exchange Earnings and Outgo: (In Lakhs)

Foreign Exchange Earnings - 2006.61

Foreign Exchange Outgo - 284.57

VII. Other Compliances:

A. Disclosure Under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance towards sexual harassment at workplace and is committed to provide a safe and secure working environment for all employees and therefore, your Company has put in place a policy for prevention, prohibition and redressal against sexual harassment of women at the work place, to protect women employees and enable them to report sexual harassment at the workplace in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.

The policy on prevention of sexual harassment at workplace is placed on the website of the Company at https://paramountforge.com/investor-info.html#tab8

During the year under review, no cases were filed under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Sr. No.	Particulars	Remarks
1	No. of complaints received during the year	Nil
2	No. of complaints disposed of during the year	Nil
3	No. of complaints pending as on March 31, 2026	Nil

B. Web Address where the Annual Return of the Company is placed:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company for the financial year ended March 31, 2026 will be available on the website of the Company at: https://paramountforge.com/investor-info.html#tab1

C. Vigil Mechanism & Whistle Blower Policy:

Pursuant to Sections 177(9) and 177(10) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Company has established a Vigil Mechanism / Whistle Blower Policy for its Directors and employees to report genuine concerns.

The mechanism provides adequate safeguards against victimisation of persons using the mechanism and provides for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

The Vigil Mechanism / Whistle Blower Policy is available on the website of the Company at: https://paramountforge.com/investor-info.html#tab8

During the financial year under review, no complaints were received under the Vigil Mechanism / Whistle Blower Policy.

D. Application made or pending proceedings under the Insolvency and Bankruptcy Code, 2016:

No application is made and no proceedings are pending, against the Company, under the Insolvency and Bankruptcy Code, 2016.

E. 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:

No One-Time settlement(s) was carried out by the Company with any Banks or Institutions. Hence, no details of valuation is required to be given.

F. Compliance with Maternity Benefit Act, 1961 with respect to employees of the Company:

The Company has complied with the applicable provisions relating to maternity benefits during the financial year under review. During FY 2025-26, no employee availed maternity leave or made any claim for maternity benefits.

G. Number of employees of the Company:

The gender breakup of the employees is as given below:

Number of male employees	Number of female employees	Number of transgender employees
141	12	0

H. Risk Management

The Company has adopted and implemented a Risk Management Policy which provides a framework for the identification, assessment, monitoring and mitigation of risks that may affect the business and operations of the Company.

The Board oversees the risk management framework and periodically reviews material business, operational, financial, regulatory and other risks and the measures taken for their mitigation.

During the financial year under review, the Board was of the opinion that there were no risks which threatened the existence of the Company.

The Risk Management Policy is available on the website of the Company.

I. Significant and Material Orders

During the financial year under review and up to the date of this Report, no significant or material order was passed by any Regulator, Court or Tribunal which impacted the going concern status of the Company or its operations in future.

J. Compliance with Secretarial Standards

During the financial year under review, the Company complied with the applicable provisions of the Secretarial Standard on Meetings of the Board of Directors (SS-1) and the Secretarial Standard on General Meetings (SS-2), issued by the Institute of Company Secretaries of India and approved by the Central Government pursuant to Section 118(10) of the Companies Act, 2013.

K. Code of Conduct For Prevention of Insider Trading in Companys Securities:

In accordance with the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time ("PIT Regulations"), the Company has adopted a Code of Conduct for Prevention of Insider Trading to regulate, monitor and report trading by Designated Persons and other persons covered under the Code and to prevent misuse of Unpublished Price Sensitive Information ("UPSI"). The Companys regulatory framework already recognises the applicability of the SEBI Insider Trading Regulations.

The Company has also implemented and maintains a Structured Digital Database ("SDD") for recording the sharing of UPSI in accordance with Regulations 3(5) and 3(6) of the PIT Regulations. The SEBI LODR framework itself recognises maintenance of information in the SDD under the PIT Regulations.

The Company has designated a Compliance Officer for administering the Code and overseeing compliance with the applicable provisions of the PIT Regulations.

The Companys Code of Conduct for Prevention of Insider Trading is available on its website at https://paramountforge.com/investor-info.html#tab8

L. Certification from CFO/ CEO:

The Company has obtained a Compliance Certificate in accordance with Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from Mr. Aliasgar Roshan Hararwala, Managing Director, and Ms. Farkhanda Abdul Razak Pagarkar, Chief Financial Officer (CFO) of the Company.

The same is enclosed as Annexure - V of the Annual Report.

M. Depository System & Registrar and Transfer Agent:

Entire paid-up equity shares i.e. 1,96,82,000 equity shares of the Company are in dematerialized form as on March 31, 2026, and the Company has appointed M/s Purva Share Registry Private Limited as the Registrar and Share Transfer Agent of the Company.

N. Green Initiatives:

In compliance with Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 Notice of the AGM along with the Annual Report 2025-26 is being sent only through electronic mode to those Members whose email addresses are registered with the Company/ Depositories. Members may note that the Notice and Annual Report 2025-26 will also be available on the Companys website i.e https://paramountforge.com

Acknowledgements

Your directors wish to thank the stakeholders of the Company for their continued support and co-operation and employees for their dedication and the excellence they have displayed in conducting the business operations of the Company.

For and on behalf of the Board of Directors

Paramount Specialty Forgings Limited

Sd/-

Aliasgar Roshan Hararwala

Managing Director

DIN: 00334957

Place: Mumbai

Date: August 25, 2026

Sd/-

Aliasgar Abdulla Bhagat

Director (Chairman)

DIN: 00335869

Place: Mumbai

Date: August 25, 2026