అకౌంట్స్ గమనికలుForge Auto International Ltd.

2.9 Provisions and Contingent Liabilities
Provisions:

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that
an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.
Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the
best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date
and adjusted to reflect the current best estimates.

Contingent Liabilities:

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present
obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the
obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized
because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence
in the financial statements.

The Company has received a demand under Income Tax Act, 1961 amounting to Rs.70,09,310 with accrued interest of
Rs. 1261674.

2.10 Taxation

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the
provisions of the Income Tax Act, 1961. Deferred tax is recognised on timing differences, being the differences between
the taxable income and the accounting income that originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at
the reporting date. Deferred tax liabilities are recognised for all timing differences. The Company has accounted for
Deferred taxation in accordance with the Accounting Standards 22- "Accounting for Taxes on Income" issued by the
Institute of Chartered Accountants of India.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is
virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets
are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient
future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if
such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable
right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

2.11 Employee benefits

2.11.1 Short term employee benefits

Employee benefits payable wholly within twelve months of receiving employee services are classified as short-term
employee benefits and are recognized in the period in which the employee renders the related services. These benefits
include salary and wages, bonus and ex-gratia. The undiscounted amount of short-term employee benefits to be paid in
exchange for employee services is recognized as an expense as the related service is rendered by employees. Bonus is
provided to eligible staff members as per Bonus act.

2.12 SMC under Companies accounting Standard Rules, 2006

The Company is a Small and Medium Sized Company (SMC) as defined in the General Instructions in respect of
Accounting Standards notified under the Companies Act, 2013. Accordingly, the company has complied with the
Accounting Standards as applicable to a Small and Medium Sized Company.

2.13 Cash and cash equivalent

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term
investments with an original maturity of three months or less

26. There is Contingent Liability of Rs. 70.09 Lakhs for the year ended 31.03.2026 (31.03.2025¬
70.09 Lakhs) with accrued interest of Rs. 12.61 lakhs under Section 1431a.

27. Capital Commitments net of Advances for the year ended 31.03.2026 Rs. Nil (31.03.2025-Nil.

28. Disclosure Under Micro, Small & Medium Scale Enterprise Development Act, 2006.

The company has no outstanding balance as on 31.03.2026, Hence provision of Micro, Small &
Medium Enterprises Act, 2006 is not applicable.

29 The balances in respect of Trade Receivables, Trade Payables and other Loans &Advances and
reconciliation in respect of some of the credit/debit balances are subject to confirmation and
verification. The effect is any of the same which are likely to be adjusted at the time of
confirmation/reconciliation.

30 In the opinion of the Board, the realizable value of current assets, loans &advances, current
liabilities in the ordinary course of business would not be less than the amount at which they are
stated.

31 These financial statements have been prepared in the format prescribed by the Schedule III to the
Companies Act, 2013.

32 Previous year''s figures are regrouped, rearranged and reclassified where necessary to conform
with current year''s presentation.

33 These financial statements have been prepared in the format prescribed by the Schedule III to the
Companies Act, 2013.

34 Previous year''s figures are regrouped, rearranged and reclassified where necessary to conform
with current year''s presentation.

35 Additional Regulatory Information

a) There are no proceedings initiated or pending against the Company for holding any
benami property under the Prohibition of Benami Property Transactions Act, 1988

(as amended from time to time) (earlier The Benami Transactions(Prohibitions)Act,1988)
and the rules made thereunder.

b) The Company is not declared as a willful defaulter by any bank or financial institution or other lender,

d) 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,and there are no companies
beyond the specified layers.

e) Utilization of Borrowed funds and share premium; El

A. 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 any other person(s) or entity(ies), including foreign entities
("Intermediaries") with the understanding (whether recorded in writing or otherwise) that the Intermediary
shall

(i) 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

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries;

B. The Company has not received any fund from any person(s) or entity(ies), including foreign entities
("Funding Party") with the understanding (whether recorded in writing or otherwise) that the company shall

(i) 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

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Hence, the relevant provisions of Foreign Exchange Management Act, 1999 and Companies Act, 2013
are not applicable and the transactions are not violative of Money Laundering Act, 2002.

f) Undisclosed Income: E

The Company does not have any transaction not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income-tax Act, 1961
(such as, search or survey or any other relevant provisions of the Income-tax Act, 1961). Further,
there was no previously unrecorded income and no additional assets were required to be recorded in
the books of account during the year.

g) Details of Crypto Currency or Virtual Currency:

The Company has neither traded nor invested in Crypto currency or Virtual Currency during the financial
year ended March 31, 2026. Further, the Company has also not received any deposits or advances
from any person for the purpose of trading or investing in Crypto Currency or Virtual Currency.

h) The Company has not granted any loans and advances in the nature of loans to promotors, directors, KMPs
and related parties.

i) Creation or Satisfaction of charges with Registrar of Companies:

There are no charges created or satisfied during the year which are yet to be registered with Registrar
of Companies beyond the statutory period.

j) The company has not declared any dividend during the year.

k) The company is not covered under the 135 of Companies Act, 2013 so there is no responsibility of CSR.

l) Where the Company has borrowings from banks or financial institutions on the basis of security of
current assets,it shall disclose the following:-

(a) whether quarterly returns or statements of current assets filed by the Company with banks or financial
institutions are in agreement with the books of accounts.

(b) if not, summary of reconciliation and reasons of material discrepancies, if any to be adequately disclosed.

m) Compliance ^with Approved Sche^ne of Arrange^nent:

N o sche^ne of arrange^nent under Sections 2 3 0 to 2 3 7 of the Companies Act, 2 013, has been
approved or is pending for approval by any Competent Authority during the year.

11. PROVISIONS AND CONTINGENT LIABILITIES

Provisions requiring a substantial degree of estimation in measurement are recognized, if in the
opinion of the Management, there is a probability that a present obligation as a result of past
events will result in an outflow for the Company in the future. Contingencies, the outcome of
which is not certain, have been disclosed in these notes as Contingent Liabilities. Contingent
Assets are neither recognized nor disclosed in the financial statements.

12. IMPAIRMENT OF ASSETS

Assessment of Impairment of Assets (as covered under AS-28 Impairment of Assets) is done as at
the Balance Sheet Date considering external and internal impairment indicators. If there is an
indication that an asset may be impaired, its recoverable amount is estimated and the impairment
loss duly provided for.

13. INVESTMENTS

Investments, which are readily realizable and intended to be held for not more than one year
from the date on which such investments are made, are classified as current investments. All
other investments are classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price
and directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in the financial statements at lower of cost and fair value
determined on an individual investment basis. Long-term investments are carried at cost.
However, provision for diminution in value is made to recognize a decline other than temporary in
the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal
proceeds is charged or credited to the statement of profit and loss.

14. USE OF ESTIMATES

The preparation of financial statements required the management to make estimates and
assumptions that affect the reported balance of assets and liabilities, revenues and expenses and
disclosures relating to contingent liabilities. The Management believes that the estimates used in
the preparation of financial statements are prudent and reasonable. Future results could differ
from these estimates. Any revision of accounting estimates is recognized prospectively in the
current and future periods.

15. CONTINGENT LIABILITIES AND PROVISIONS

Provisions are recognized only when there is a present obligation as a result of past events and
when a reliable estimate of the amount of obligation can be made.

Contingent Liability is disclosed for

a) Possible obligation which will be confirmed only by future events not wholly within the control
of the Company or

b) Present obligations arising from the past events where it is not probable that an outflow of
resources will be required to settle the obligation or a reliable estimate of the amount of the
obligation cannot be made.

c) Contingent Assets are not recognized in the financial statements since this may result in the
recognition of income that may never be realized.

A disclosure for a contingent liability is made when there is a possible obligation or a present
obligation that may, but probably will not, require an outflow of resources. Where there is a
possible obligation or a present obligation that the likelihood of outflow of resources is remote, no
provision or disclosure is made.

16. EARNINGS PER SHARE:

In determining the Earnings Per share, the company considers the net profit after tax which does
not include any post tax effect of any extraordinary / exceptional item. The number of shares used
in computing basic earnings per share is the weighted average number of shares outstanding as at
31 March, 2024.

17. DERIVATIVES

The Company is exposed to foreign currency fluctuations on foreign currency assets and
forecasted cash flows denominated in foreign currency. The Company tries to limit the effects of
foreign exchange rate fluctuations by following risk management policies including use of
derivatives. For this the Company enters into forward exchange contracts, where the counter¬
party is a Bank. Theses forward contracts are not used for trading or speculation purposes.

In case of forward contracts the gain or loss arising on exercise of option or settlement or
cancellation are recognized in the Statement of profit and loss for the period. The forwards
contracts outstanding as at the balance sheet date, if any, are marked-to-market and
corresponding exchange gain or loss recognized on the same.

In case of derivative transactions in currency futures, the net gain or loss is recognized in the
Statement of Profit and Loss on settlement. In case of outstanding contracts as at the balance
sheet date, the same are also marked-to-market and corresponding gain / loss recognized on the
same.

4. Figures have been rearranged and regrouped wherever practicable and considered necessary.

5. The management has confirmed that adequate provisions have been made for all the known
and determined liabilities and the same is not in excess of the amounts reasonably required to be
provided for.

6. The balances of trade payables, trade receivables, loans and advances are unsecured and
considered as good are subject to confirmations of respective parties concerned.

7. Employee benefits:

The Company has adopted the Accounting Standard 15 (revised 2005) on Employee Benefits as
per an actuarial valuation carried out by an independent actuary. The disclosures as envisaged
under the standard are as under:

8. Realizations

In the opinion of the Board and to the best of its knowledge and belief, the value on realization of
current assets and loans and advances are approximately of the same value as stated.

9. Contractual liabilities

All other contractual liabilities connected with business operations of the Company have been
appropriately provided for.

10. Amounts in the financial statements

Amounts in the financial statements are rounded off to nearest lakhs. Figures in brackets indicate
negative values.

11. Impact of Audit Qualifications/Observations in Statutory Auditor''s Report on Financial
Statements

There has been no audit qualifications/observations in Statutory Auditor''s Report for the period
ended on 31st March 2024, which requires adjustments in financial statements.

12. ( I ) Material Adjustments

Appropriate adjustments have been made in the financial statements, whenever required, by
reclassification of the corresponding items of assets, liabilities and cash flow statement, in order to
ensure consistency and compliance with requirement of Schedule VI and Accounting Standards.

13. Material Regrouping in Financial Statements

Appropriate adjustments have been made in the Summary Statements, wherever required, by a
reclassification of the corresponding items of income, expenses, assets, liabilities and cash flows in
order to bring them in line with the groupings as per the audited financials of the Company
prepared in accordance with Schedule III and the requirements of the Securities and Exchange
Board of India (Issue of Capital and Disclosure Requirements) Regulations 2009 (as amended).
However no material regroupings carried out in financial statements.

1. Terms/rights attached to equity shares:

i. The company has only one class of shares referred to as equity shares having a par value of Rs. 10/-
as at 31st March, 2025.

ii. Each holder of equity shares is entitled to one vote per share. All shares rank pari passu with
reference to all rights relating thereto.

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

1. The Credit Facilities from HDFC bank are secured by way of charge on Book Debts, Stocks, FDRs,
Plant and Machinery and Land & Building situated at Village Mangarh, Kohara Machhiwara Road,
Ludhiana Punjab. The facilities are also collaterally secured by way of Equitable Mortgage of House
No. 461, Near G S Motors Workshop, Jagjit Nagar, Threekay Road, Ludhiana in the name of Smt.
Rekha Mittal and further collaterally secured by way of Personal Guarantees of Smt. Rekha Mittal
and the Directors of the Company viz. Sh. Rajan Mittal and Sh. Parmod Gupta and M/s Auto
International

1. The amount taken as Unsecured Loan from the Directors of the Company is usually payable on
demand. Interest has been paid @ 9% per annum for the period ended on 31st March 2025.

1. Amount due to entities covered under Micro, Small and Medium Enterprises as defined in the Micro,
Small, Medium Enterprises Development Act, 2006, have been identified on the basis of information
available with the Company. Management is in process of complying information from their suppliers
regarding their status under the MSME act.

2. Ageing of the Supplier, along with any amount involved in disputes as required by Schedule III of
Companies Act, 2013 is disclosed below after it becomes due for payment. In case of no credit terms
defined the break-up of age wise supplier balance is given below after considering from the date of
transactions.

41. BORROWING COSTS :

No Borrowing Costs were eligible for capitalization during the year.

42. SEGMENT REPORTING :

With respect to Accounting Standard-17, the Management of the Company is of the view that the
products offered by the Company are in the nature of forgings, and its related products, having the
same risks and returns, same type and class of customers and regulatory environment. Hence, the
business of production of forgings and its related products belong to one business segment only.

45. IMPAIRMENT OF ASSETS:-

In absence of any indications, external or internal, as to any probable impairment of assets, no
provision has been made for the same during the year under report, in accordance with the
requirement of Accounting Standard - 28 on "Impairment of Assets"

46. CRYPTO CURRENCY / VIRTUAL CURRENCY :-

The Company has not traded or invested in Crypto Currency or Virtual Currency during the Financial
Year.

47. NO UNDISCLOSED INCOME :-

There are no transactions which are not recorded in books and have been surrendered or disclosed
as income during the year in Income Tax Assessments.

All figures are rounded off to lacs unless otherwise stated.

For Jasminder Singh & Associates For and on behalf of Board of Directors

Chartered Accountants For Forge Auto International Limited

FRN:016192N

CA. Jasminder Singh Rajan Mittal

Partner (Managing Director)

Mem No: 096895

Parmod Gupta

Place: Ludhiana (Chairman and Whole time Director)

Date: 30.05.2025

UDIN:25096895BMGYHO7444 Gautam Kanchan

(CFO)

Medhavi Sharma
(Company Secretary)