Bharat Forge : Annual Report for 2022

SMALLER STEPS TO BIGGER STRIDES

ASCENDING RESPONSIBLY

ANNUAL REPORT 2021-22

WELCOME TO OUR ANNUAL REPORT 2021-22

Corporate

Information

Bankers

Bank of India

Bank of Baroda

Bank of Maharashtra

Canara Bank

State Bank of India

HDFC Bank Ltd.

ICICI Bank Ltd.

Axis Bank Ltd.

Citibank N.A.

Standard Chartered Bank

Credit Agricole CIB

HSBC Ltd.

JP Morgan Chase Bank N.A.

Deutsche Bank AG

Kotak Mahindra Bank Ltd.

Auditors

S R B C & Co LLP

Chartered Accountants

Company Secretary

Ms. Tejaswini Chaudhari

Registered Office

CIN: L25209PN1961PLC012046

Bharat Forge Limited

Mundhwa, Pune Cantonment,

Pune - 411 036, Maharashtra, India.

Phone: [phone] / 2476

Fax: [phone]

Email: [e-mail]

Web: www.bharatforge.com

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Contents

02

Corporate Overview

50

Statutory Reports

152

About the Report02 Highlights of the Year 06

Message from the Chairman and Managing Director 08

Bharat Forge Smart Engineering for a Better World 14

Our Strategic Global Presence 16

Taking Bigger Strides with a Resilient Business Model 18

Strategy for Maximizing Value Creation 20

Meeting the Needs and Expectations of Stakeholders 21

Material Matters Impacting our Business 22 Small Steps to Bigger Strides 23 E-mobility Makes a Silent Revolution 24

International Operations Rejuvenated to Deliver in the Long Run 25

Defence Business Progresses with India's Journey of Self-Reliance26

Industrial Business Stronger than Ever 27 Financial Capital 28

Intellectual Capital 30 Manufactured Capital 34 Taking Bigger Strides towards a Better and Sustainable Tomorrow 36 Human Capital 38

Social and Relationship Capital 40 Natural Capital 46 Governance at Bharat Forge 48 Board of Directors 49

Management Discussion and Analysis 50

Board's Report 64

Report on Corporate Governance 94

Business Responsibility and Sustainability Reporting 119

Standalone Financial Statements 153 Consolidated Financial Statements 288

Financial Statements

BHARAT FORGE LIMITED

Annual Report 2021-22

About the Report

Basis of Reporting

This is our third year of integrated reporting based on the principles of Integrated Reporting by the International Integrated Reporting Council (IIRC). This reporting is in line with our philosophy of transparently disclosing information beyond the statutory norms. We have tried to provide all-inclusive insight of our value creation process and factors that may affect it. The Report covers the six capitals - Financial, Manufactured, Human, Intellectual, Social & Relationship and Natural capital - that we use in our business. Further, we cover information on material matters, governance, performance and prospects in context of external environment. Our intent is to provide information to the stakeholders to better equip them to evaluate our performance and take an informed decision.

Reporting Principle

This Report has been prepared in accordance with:

• Companies Act, 2013 (and the Rules made thereunder)
• Indian Accounting Standards, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
• Secretarial Standards

Other international guidelines in accordance with:

• framework of International Integrated Reporting Council (IIRC)
• Global Reporting Initiative (GRI) Standards

Boundary and Scope of

Reporting

The Report covers financial and non-financial information and activities of Bharat Forge Limited, India for the period of April 1, 2021 to March 31, 2022. We have captured significant material events up to Board Meeting held on May 16, 2022.

Board Assurance

The members of the Board acknowledge having applied their collective mind in the preparation of this Report. They accept the responsibility for its integrity and is of the opinion that the Report addresses all material issues and provides a fair and balanced view of the Company's performance.

Forward-looking Statements

Certain statements in this Report regarding our business operations may constitute forward-looking statements. These include all statements other than statements of historical fact, including those

regarding the financial position, business strategy, management plans and objectives for future operations. Forward-looking statements can be identified by words such as 'believes', 'estimates', 'anticipates', 'expects', 'intends', 'may', 'will', 'plans', 'outlook' and other words of similar meaning in connection with a discussion of future operating or financial performance.

Forward-looking statements are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and that may be incapable of being realized and as such, are not intended to be a guarantee of future results, but constitute our current expectations based on reasonable assumptions. Actual results

could differ materially from those projected in any forward-looking statements due to various events, risks, uncertainties and other factors. We neither assume any obligation nor intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

United Nations Sustainable Development Goals (UN SDGs)

2

About the Report

Our Capitals

Financial Capital

It represents the capital that we employ in the business to support our operations and execute business strategy for generating surplus for the investors and shareholders.

Manufactured Capital

It represents our modern manufacturing facilities and equipment. We continually invest financial capital in it to support our growing scale of operations and enable manufacturing of diverse and evolving range of products.

Intellectual Capital

It represents our knowledge, process and technical excellence and digital readiness and innovation capabilities led by our research and development (R&D) centers which provide us competitive edge in the industry. We are continually investing in these to strengthen our ability to develop innovative solutions as per the evolving trends in the industry.

Statements Financial 3 Reports Statutory 2 Overview Corporate 1

Human Capital

It represents the competencies, experience, engagement level and motivation of our people. They drive the organization's ability to innovate and run business efficiently, better serve customers and maintain strong relations and achieve strategies.

Social and Relationship Capital

It represents the quality of relationship that we have with the customers, business partners and communities which enhances our reputation, and facilitates in business growth and giving back to the society.

Natural Capital

It represents the renewable and non-renewable environmental resources that we use in our operations and the impact our operations have on the environment. We are continually investing in these towards making our operations more sustainable.

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