a. Terms/ Rights attached to the Equity Shares:

i. The Company has only one class of equity shares having par value of ' 1/- per share. Each holder of Equity Shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees.

ii. The dividend proposed is as recommended by the Board of Directors and subject to the approval of the Shareholders in the Annual General Meeting.

iii. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

b. The Company does not have any holding company or ultimate holding company as on March 31, 2025.

Capital Reserves:

LGB Forge Limited was demerged from M/s. L.G. Balakrishnan and Bros Limited in the year 2008. At the time of demerger on April 21, 2008, reserves on the date of demerger were transferred to Capital Reserves to the extent of the demerged portion.

1) The company has not defaulted in the repayment of loans and interest as at the balance sheet date.

2) Repayment and interest terms:

a) Term Loan from TATA Capital ' 13,00,00,000 has been received in 4 tranches of ' 3,00,00,000, ' 4,50,00,000, ' 1,00,00,000 and ' 4,50,00,000 disbursed on following dates 06-06-2023,15-09-2023, 08-02-2024 and 29-03-2024 respectively. The loan is repayable within 84 Months including moratorium period of 6 months.

Terms and conditions of short term loans taken from banks and financial institutions:

1) Cash Credit from Axis Bank carries an interest rate of “3 Months MCLR 1 %” payable at monthly intervals and are secured by first pari passu charge on entire current assets and second pari passu charge on the entire movable fixed assets of the Company, both present and future.

2) Cash Credit from ICICI Bank carries interest rate of “ 6 Months MCLR 1 %” payable at monthly intervals and are secured by first charge of the Company’s entire stock of raw materials, semi finished and finished goods, consumable stores and spares and such other movables including book debts, bills whether documentary or clean, outstanding monies, receivables , both present and future, ranking pari passu with other participating bank.

3) Cash Credit from IDBI bank carries interest rate of “10.35 %” payable at monthly intervals and are secured by pari passu first charge over the current assets of the Company, Collateral pari passu second charge over the fixed assets of the company except those that are exclusively charged to term lenders.

4) Term Loan from Smt. Rajsri Vijayakumar, disbursed on 30.09.2022 is repayable in 4 quarterly installments of ' 50 lakhs each within expiry of 3 years and has a moratorium of 2 year from the date of disbursement. Interest rate: 8% per annum, payable on quarterly basis. Accordingly, installment repayment has not yet commenced.

5) The term loan from Tata Capital is secured by way of:

a) First and exclusive charge by way of mortgage over on land and building located at plot no s.80/a, 80, 81 part, 82, 83 & 84, Belgoda Industrial area , Sy no 66 67 68 69 & 70 hebbal village, Kasaba Hobla Mysore Karnataka-570001 in the name of M/s LGB Forge ltd.

b) Hypothecation charge on the movable fixed assets located in the above factory at Mysore.

6) The above loans are further secured by Corporate Guarantee by M/s. L.G. Balakrishnan & Bros Limited.

31 DISCONTNUED OPERATIONS:

i) Discontinued operations of Pondy Division :

The company has finalized a Business Transfer Agreement for sale of Pondy Division, effective from April 1, 2024. However, the impact of discontinuing operations has been addressed in accordance with IND AS 105. Consequently, the revenue and profit or Loss arising from discontinued operations (Pondy division) relating to the entire period from April 01, 2023 to March 31, 2024 are disclosed as discontinued operations in the financial statements. Profit from sale of the division is presented as an exceptional item in the financials for the year ended March 31, 2025.The breakup of Profit or Loss from Discontinued operations for the year ended March 31, 2024 is given below.

**A legal case filed by 22 employees of the Company, represented by their union, is currently pending before the Hon’ble High Court of Karnataka, Bangalore. The case was filed during the earlier financial years.

As of March 31, 2025

15 of the 22 employees have rejoined the company; 1 employee has passed away; 1 employee retired; 5 employees have not rejoined.

The legal proceedings are ongoing, and the final outcome remains uncertain. Accordingly, the quantum of potential compensation or financial liability, if any, arising from the litigation cannot be reasonably estimated at this stage.

The company continues to monitor the progress of the case and will assess the implications as developments unfold. The above information has been confirmed by the management.

38. OPERATING SEGMENTS:

The Company is engaged in the business of “Manufacture of Forged and Machined Components’’ and therefore, has only one reportable segment in accordance with Ind AS 108 ‘Operating Segments’.

41. CORPORATE SOCIAL RESPONSIBILITY:

The Company does not exceed the amount specified in the Section 135 of the Companies Act, 2013, So the company is not mandated to spend any amount towards CSR activities for the financial year 2024-25.

42. DISCLOSURE AS REQUIRED UNDER REGULATION 34(3) AND 53(F) OF SEBI (LODR) REGULATIONS, 2015:

Loans and advances to firms / companies in which directors are interested - Nil (Previous year - Nil).

43. DISCLOSURE IN RELATION TO SECTION 186(4) OF THE COMPANIES ACT, 2013:

Nil (Previous year - Nil).

44. FINANCIAL INSTRUMENTS:

A. Capital Management:

The Company manages its capital to ensure that entities in the Company will be able to continue as going concern, while maximising the return to stakeholders through the optimisation of the debt and equity balance.

The Company determines the amount of capital required on the basis of annual operating plans and long term product and other strategic investment plans. The funding requirements are met through equity, Long term and Short term borrowings.

For the purposes of the Company’s capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders. Debt includes Long term loans and Short term loans.

C. Financial Risk Management Objectives:

The Company’s businesses are subject to several risks and uncertainties including financial risks.

The Company’s activities expose it to credit risk, liquidity risk, market risk - interest rate risk and foreign currency risk. The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

i. Credit Risk:

C redit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of credit worthiness as well as concentration risks. The company’s credit risk generally arises from cash and cash equivalents, trade receivables, and other financial assets.

Credit Risk Management:

The Company assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.

A: Low credit risk B: Moderate credit risk C: High credit risk

Based on business environment in which the Company operates, a default on a financial asset is considered when the counterparty fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions. Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognized in statement of profit and loss.

As per simplified approach, the Company makes provision of expected credit losses on trade receivables based on past experiences to mitigate the risk of default in payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves higher risk.

ii. Liquidity Risk:

L iquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company invests its surplus funds in bank fixed deposit. The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

iv. Market Risk:

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company actively manages its currency and interest rate exposures through its finance division and uses derivative instruments such as forward contracts and currency swaps, wherever required, to mitigate the risks from such exposures. The use of derivative instruments is subject to limits and regular monitoring by appropriate levels of management.

Interest Rate Risk:A) Assets:

The Company holds interest bearing assets in the form of fixed deposits with banks. The variation in interest risk not material as the balance in deposits is not significant.

B) Liabilities:

The Company is exposed to interest rate risk because it borrows funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.

Interest Rate Sensitivity Analysis:

If interest rates had been 100 basis points higher / lower and all other variables were held constant, the Company’s profit for the year ended 31 March 2025 would decrease / increase by ' 21.39 Lakhs (for the year ended 31 March 2024: decrease / increase by ' 27.05 Lakhs). This is mainly attributable to the Company’s exposure to interest rates on its variable rate borrowings.

v. Foreign Currency Risk Management:

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company actively manages its currency rate exposures through a centralised treasury division and uses natural hedging principles to mitigate the risks from such exposures. The use of derivative instruments, if any, is subject to limits and regular monitoring by appropriate levels of management.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

Fair Value Hierarchy:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

In addition, for financial reporting purposes, fair value measurements are categorised into level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety. The three levels are explained as follows:

Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities that the company can access

at the measurement date. These quoted prices are unadjusted.

Level 2 - Inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or

liability, either directly or indirectly.

Level 3 - Inputs are unobservable inputs for the asset or liability.

46. RETIREMENT BENEFIT PLANS:Defined Contribution Plans:

I n accordance with Indian law, eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees’ salary. The contributions, as specified under the law, are made to the Provident fund as well as Employee State Insurance Fund.

T he expense recognised during the period towards this defined contribution plan is 38.33 Lakhs (March 31, 2024 - 51.72 Lakhs)

Defined Benefit Plans:

(a) Gratuity:

Gratuity is payable as per Payment of Gratuity Act, 1972. In terms of the same, gratuity is computed by multiplying last drawn salary (basic salary including dearness allowance, if any) by completed years of continuous service with part thereof in excess of six months and again by 15/26. The Act provides for a vesting period of 5 years for withdrawal and retirement and a monetary ceiling on gratuity payable to an employee on separation, as may be prescribed under the Payment of Gratuity Act, 1972, from time to time. However, in cases where an enterprise has more favourable terms in this regard the same has been adopted.

These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk and salary risk.

Investment risk The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to the market yields on government bonds denominated in Indian Rupees. If the actual return on plan asset is below this rate, it will create a plan deficit.

Interest risk A decrease in the bond interest rate will increase the plan liability. However, this

will be partially offset by an increase in the return on the plan’s debt investments. Longevity risk The present value of the defined benefit plan liability is calculated by reference

to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.

Salary risk The present value of the defined benefit plan liability is calculated by reference to

the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

Details of the items included in numerator and denominator for computing the above ratios.

a) Capital employed refers to sum of [Share Capital Other equity - Intangible Assets Lease Liabilites Deferred Tax liabilities Total Debt]

b) Earnings before interest and taxes = [Profits after current & deferred taxes Finance Costs Current Taxes Deferred Taxes]

c) Earnings available for Debt Service = Net Profit after taxes Non-cash operating expenses like depreciation and other amortizations Interest Loss on sale of Fixed assets

d) Debt service = Interest & Lease payments Principal repayments

* The following ratios show a change of more than 25% as compared to last year. The reasons for the high variance are as under:

a) Debt Service Coverage Ratio:

The ratio improved due to substantial non-recurring profits from the sale of discontinuing operations.

b) Inventory Turnover Ratio:

The ratio increased due to a significant reduction in closing inventory.

c) Trade Payables Turnover Ratio:

The ratio increased due to a significant reduction in closing trade payables.

d) Net Profit Ratio:

The ratio improved due to substantial gains from exceptional items.

e) Return on Capital Employed Ratio:

The ratio improved due to reduced losses and lower finance costs.

f) Return on Investment Ratio:

The ratio improved due to a reduction in losses before exceptional items and higher non-current assets.

Note: The comparative ratios for the financial year ended 31.03.2025 (i.e., for 31.03.2024) will not align with the financial statements of 31.03.2024, as the Pondy Division was discontinued during the current financial year. Accordingly, for the purpose of comparatives, the figures relating to the Pondy Division have been excluded, whereas they were included in the previous year’s financials.

50. a) The title deeds of immovable properties (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) disclosed in the financial statements are held in the name of the Company.

50. b) The Company has not revalued its Property, Plant and Equipment (including right of use assets) and Intangible Assets during the year.

51 The company has no proceeding initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

52 No Scheme of Arrangement is approved u/s.230 to 237 of the Companies Act for the company.

53 The Company’s borrowings from banks or financial institutions on the basis of security of current assets and the quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.

54 The Company is not declared as a wilful defaulter by any bank or financial institution.

55 The Company has complied with the number of layers prescribed under clause (87) of Section 2 of the Act read with Companies (Restriction on number of layers) Rules, 2017.

56 The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified. The Company will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

57 The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to or in any other person or entity, including foreign entities (intermediaries) with the understanding (whether recorded in writing or otherwise) that the intermediary shall whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

58 The Company has not been received any funds from any person or entity, including foreign entity (“Funding Parties”) with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

59 The Company has no income which has been surrendered or disclosed as income during the year in any of the Tax assessments under the Income Tax Act, 1961.

60 The Company has not traded/invested in Crypto currency, virtual currency during the financial year.

61 Loans and advances in the nature of loan granted to promoter, KMP and related parties - Nil.

62 There are no charges or satisfaction of charges that are yet to be registered with Registrar of Companies beyond the statutory period.

63 The Company has not issued any securities for a specific purpose.

64 The Company has utilised the borrowings from banks and financial institutions for the purpose for which it was availed.

65 As per the information available with the company, the company has no transactions with the companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of the Companies Act, 1956.