The Directors are pleased to present the 64th Annual Report, together with the audited standalone and consolidated Financial Statements forthe FinancialYearended on 31stMarch 2023.

1. Financial Results

2. State of Company’sAffairs and Future Outlook

It can be noted with pleasure that demand in the market for Company's products has steadily risen over the last several quarters. After severe contraction of business over 2 years, due to the impact of Covid where significant market segments like school buses, employee transport and tour & travels were severely affected, todayfortunately all three markets are performing well, as was expected. From the last quarter of the financial year 2022-23, the business has been steadily rising. Along with the topline, the bottom line has also performed well. We do believe that this trend willcontinue.

The new generation products introduced by the Company, comprising of the completely new platform of Vans - an extension to the Traveller range - and branded the “Urbania”, also the very high-tech monocoque 33 and 41-seater Monobuses, (first anywhere in the world - approximately 1 ton lighter than competition), and the very attractive and rugged, the new platform of “Gurkha”, are all seeing increasing demand. The Urbania isin the initial stages of marketing. Thefootprint for sales is being increased in a calibrated manner. Feedback from users is very positive and encouraging, for all the three new technology and improved productplatforms.

We now have, in full flow production the Engines meeting the rigorous emission requirements of BS 6.2 level, while maintaining our excellent standards of reliability and performance. The development of the latest engines enables us to offer excellent power output and fuel economy, on the Traveller, Trax, Gurkha, Urbaniaand Monobus series.

The Component businesses of the Company for supply of engines, both to Mercedes-Benz India Pvt. Ltd. and BMW India Pvt. Ltd. has improved on robust demand volumes. These high-end world-class vehicles, in the top bracket of the passenger car market, are seeing good demand due to the stability and improving spending ability in the market. The dedicated Plants forthese products are functioning well.

Finally, while looking today at the future outlook, one can feel more confident about the prospects of the Indian economy, and thereby of the essential manufacturing industry overthe next several years. The energy in the economy is higher than before. Steadiness of demand and increasing opportunities to enter new segments, and introduce world class products, is a matter which enthuses the Company's Management Team.

3. Change in Nature of Business, if any

During the year under review, there is no change in the nature of business of the Company.

4. Dividend

The Board recommended a dividend of' 10/- per share forthe year under review, at its Meeting held on 29th May 2023. The same will be paid subject to the approval of shareholders at the ensuing Annual General Meeting (aGm) of the Company.

The total payout w.r.t. the dividend recommended for the Financial Year 2022-23 will be' 13.18 Crore as against' 13.18 Croreforthe previousfinancialyear.

The details of dividend and shares transferred to the Investor Education and Protection Fund during the year under review, are covered in the Report of Corporate Governance.

5. ShareCapital

The paid-up equity share capital as on 31st March 2023 was '13.18 Crore. The Company did not issue any shares by way of public issue, rights issue, bonus issue or preferential issue etc. during the year under review. The Company has not issued any shares with differential voting rights or granted stock options or sweat equity, during the yearunder review.

6. AnnualReturn

The Annual Return as on 31st March 2023, pursuant to the provisions of Section 92 of the Act and the Rules made there under, is available on the website of the Company at https:// www.forcemotors.com/investors#shareholders-information.

7. Number of Meetings ofthe Board of Directors

The Board met four times during the financial year. The meeting details are provided in the Corporate Governance Reportthat forms part of this Annual Report.

8. Particulars of Loans, Guarantees or Investments

The Company has not made any investments, given any loans, guarantees under Section 186 of the Companies Act, 2013 ("the Act") during the year under review. Particulars of investments made by the Company upto the period under report are provided in the Financial Statement attached to this Report.

9. Particulars of Contracts orArrangements with Related Party During the Financial Year 2022-23, pursuant to Section 177 of the Act and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('the SEBI (LODR) Regulations, 2015'), all Related Party Transactions (RPTs) were placed before the Audit Committee for its approval.

During the year under review, the Company has not entered into RPTs in excess ofthe limits specified under Regulation 23 ofthe SEBI (LODR) Regulations, 2015.

All RPTs entered during the year were entered in the ordinary course of business and on arm's length basis. As required under the Act, the prescribed Form AOC-2 is a part of this Annual Report.

10. Explanation/Comments on any Qualification oftheAuditors

There are no qualifications, reservations or adverse remarks made either by the Statutory Auditors or by the Secretarial Auditor in their respective audit reports.

11. Material Changes and Commitments

There have been no material changes and commitments affecting the financial position of the Company, which have occurred after the end ofthe period under review.

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

The Company has continued its efforts to ensure incremental improvements in energy conservation across plant locations, various equipment etc. by use of improved technological solutions.

Increasing use of solar power has enabled the Company to reduce its dependence on normal power supply, utilising the large areas offered by factory roofing in various plants.

The installation of 480 KW Solar Power Plant at Chennai Manufacturing Facility, has been completed. Power generation from this plant will start after obtaining necessary permissions. At the Chakan facilities of the Company, installation of solar power plant having a capacity of 750 KW is in progress as on 31st March 2023. During the year under review the Company has generated Solar Power of 8.71 Lakh KW at its Akurdi Pune location which resulted in to annual electrical energy savings of' 90 Lakh and saving CO2 emission of 702 Tonne.

Efforts such as preventing compressed air leakages, using compressors with optimum capacity and their periodic preventive maintenance, auto cut off systems, localised switches, large scale switchover to LED lamps etc. have continued across all the facilities ofthe Company.

TechnologyAbsorption

Technology absorption efforts, though severely disrupted during the Covid-19 pandemic, are continuing. The large scale use of virtual meetings and remote working has enabled a reasonable level of activity to be maintainedformostpartof theyear.

Foreign txcnange tarnings and Outgo

The foreign exchange earned by the Company during the year under review was of' 81.48 Crore as against' 92.82 Crore during the previous year.

Total foreign exchange outflow during the year under review was ' 1,984.79 Crore as compared to ' 1,519.86 Crore during the previous year.

13. Subsidiaries

The Company has two subsidiaries, viz., Force MTU Power Systems Private Limited (FMTU) and Tempo Finance (West) Private Limited.

FMTU was incorporated on 7th August 2018, as a joint venture between the Company and Rolls-Royce Power Systems AG, through its subsidiary company, viz. Rolls-Royce Solutions GmbH (erstwhile MTU Friedrichshafen GmbH) for engaging in the business of development, manufacture and marketing of engines, engines for power generation, complete power generators and engines for various applications like Rail. By virtue of Company's majority shareholding, 'FMTU' is a subsidiary of the Company since its incorporation.

The Company's subsidiary Force MTU Power Systems Private Limited (FMTU) has now gone into smooth production after over two years delay, caused by Covid. Both, for the ramp up of operations in India, and for demand from markets mainly abroad, the situation is rapidly improving. There is good demand for the product. However, the inflation in Europe (from where there still is significant import), is holding down the margins.

Demand from various institutional customers in India and abroad is encouraging. With increasing localization which is aggressively being taken up, margins should improve and the stress on the bottom line of the subsidiary, it is hoped, should be relieved by end of thisfinancial year.

During the year under review, FMTU achieved a top line of' 231.61 Crore as compared to top line of' 78.29 Crore during the Financial Year 2021-22. It recorded net loss of ' 36.47 Crore during the Financial Year 2022-23, as compared to the loss of' 32.69 Crore, duringthe previous Financial Year.

Tempo Finance (West) Private Limited achieved a top line of' 0.39 crore as compared to top line of' 0.38 Crore during the Financial Year 2021-22. It recorded net profit of ' 0.29 Crore during the Financial Year 2022-23, as compared to the net profit of' 0.28 Crore, during the previous Financial Year.

The Company does not have any other subsidiaries, joint ventures and associate companies. During the year under review there was no change in the subsidiaries of the Company. As per Section 129 of the Act, the Company has prepared the Consolidated Financial Statement of the Company, which forms part of the Annual Report. A statement containing the salient features of the Financial Statement of subsidiaries in the prescribed format AOC-1, forms part of the Audited Financial Statements of the Company.

The Audited Financial Statements of the above mentioned subsidiaries are available on the website of the Company www.forcemotors.com, for inspection by any Member of the Company.

The policy for 'Determining Material Subsidiaries & its Governance Framework' is also available on the Company's website www.forcemotors.com.

14. RiskManagement

The Company has in place a comprehensive Risk Management framework to identify, monitor, review and take all necessary steps towards mitigation of any risk elements which can impact the business health of the Company, on a periodic basis.

All the identified risks are managed through continuous review of business parameters by the Management and the Risk Management Committee. The Board of Directors are also informed of the risks and concerns.

The details of composition and meetings of the Risk Management Committee held during the financial year are covered in the Report on Corporate Governance.

15. Changes in the Directors and KeyManagerial Personnel

During the year under review, Mr. Pratap Pawar, Mr. S. Padmanabhan, Dr. Indira Parikh, Mr. Arun Sheth and Mr. Nitin Desai ceased to be the directors of the Company w.e.f. 12th September 2022, due to completion of second term as Independent Directors. The Board placed on record its appreciation towards the valuable contributions made by each of these Directors during their association with the Company.

Further, the shareholders approved appointment of Mr. Vallabh Bhanshali (DIN : 00184775) and Mr. Mukesh Patel (DIN : 00053892), as Independent Directors of the Company for aterm of 5 years w.e.f. 13th August 2022 and Ms. Sonia Prashar (DIN : 06477222) as an Independent Director of the Company for a term of 5 years w.e.f. 28th September 2022, by way of passing Special Resolutions.

The shareholders of the Company also approved re-appointment of Mr. Prashant V. Inamdar (DIN : 07071502), the Director of the Company, who was liable to retire by rotation.

During the year under review, Mr. Kishore P. Shah resigned as the Company Secretary and Compliance Officer of the Company w.e.f. 8th April 2022. Mr. Gaurav Deshmukh was appointed as the

Company Secretary and Compliance Officer of the Company w.e.f. 27th May 2022.

Further, Mr. Gaurav Deshmukh, Company Secretary of the Company resigned from the office effective from 13th May 2023. Consequent upon his cessation, Mr. Nikhil Deshpande, was appointed as Company Secretary and Compliance Officer of the Company effectivefrom 29th May 2023.

16. Declaration of Independent Directors

The Independent Directors have submitted their declarations to the Board that they fulfill all the criteria of independence as stipulated in Section 149(6) of the Act and in Regulation 16 (1)(b) of the SEBI (LODR) Regulations, 2015. The Board after assessing its veracity, has taken the same on record.

17. Details of Significant and Material Orders Passed by the Regulators or Court orTribunal

There was no significant and material order passed by any regulator or court or tribunal impacting the going concern status of the Company's operations in future, during the year under report.

As reported earlier, petition challenging the decision of the Hon'ble High Court of Judicature at Bombay, in respect of change in the name of the Company is still under consideration of the Hon'ble Supreme Court of India.

18. Adequacy of Internal Financial Controls

M/s. Capri Assurance & Advisory Services, Chennai and M/s. Jugal S. Rathi, Chartered Accountants, Pune, are the Internal Auditors of the Company. The internal financial controls are adequate with reference to the financial status, size and operations of the Company.

19. Fixed Deposits

The Company currently has no Fixed Deposit Scheme in place. The details of earlier deposits are furnished hereunder:

20. Corporate Social Responsibility (CSR)

The Annual Report on the CSR activities of the Company, pursuant to Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed to this Report.

21. AuditCommittee

The Audit Committee of the Board consists of 3 members. Details of composition of the Audit Committee are covered in the Corporate Governance Report. During the year, all recommendations made by the Audit Committee were accepted by the Board.

The Company has established a vigil mechanism, formulated a Whistleblower Policy, and the Committee oversees the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The mechanism provides direct access to the Chairman of the Audit Committee in exceptional cases. The details of the mechanism / policy are disclosed on the website of the Company https://www.forcemotors.com/themes/frontend/docs/share-holder-info/other/Whiste-Blower-Policy.pdf

22. Policy on DirectorsAppointment and Remuneration

The Remuneration Policy of the Company and other related matters as provided under Section 178 (3) of the Act are available on the website of the Company https://www.forcemotors.com/ assets/Others/Remuneration-Policy-New.pdf. The Policy covers criteria for recommending and approving the remuneration of nonexecutive and executive directors, key managerial persons as well as senior management employees of the Company.

23. Formal Annual Evaluation of the Performance of Board / Committees and Directors

Information on the manner in which formal annual evaluation is made by the Board, of its own performance, that of its committees and the individual Directors, is given in the Report on Corporate Governance.

24. CorporateGovernance

The Company has taken all necessary steps to implement the provisions of the SEBI (LODR) Regulations, 2015 and a detailed report on the various matters, including the Auditors' Certificate on CorporateGovernance, is annexed to this Report.

25. Business Responsibility and Sustainability Report

In terms of the Regulation 34(2) of the SEBI (LODR) Regulations, 2015, the Business Responsibility and Sustainability Report (BRSR) forms part of the Annual Report.

26. Details of Directors and Employees' Remuneration

Details as required under the provisions of Section 197 (12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended; are annexed to this report.

Details as required under the provisions of Section 197 (12) of the Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended; which form part of this report, will be made available to any shareholder on request, as per provisions of Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

27. Disclosure on Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

The Company has adopted Anti-Sexual Harassment Policy, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints, if any, received regarding sexual harassment. All employees, as defined under the said Act, are covered under this policy. Awareness programs were carried out against sexual harassment. There were no complaints received during the year under review. Further, there are no complaints pending as on 31st March 2023.

28. Details of Frauds Reported by Auditors

There are no frauds against the Company reported by the Auditors forthe period underreport.

29. Directors' Responsibility Statement

The Directors of your Company to the best of their knowledge and belief, and according to the information and explanations obtained by them, make the following statements in terms of Section 134 (3)(c) of the Act:

(a) in the preparation of the Annual Financial Statements for the year ended 31st March 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) forthe Financial Year ended 31st March 2023, such accounting policies as mentioned in the Notes to the Financial Statements have been applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company and of the profit of the Companyfortheyear ended 31st March 2023;

(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Annual Financial Statements have been prepared on a going concern basis;

(e) that proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

30. Secretarial Standards ofthe ICSI

The Company has complied with the Secretarial Standards on the Meetings of Board of Directors (SS-1) and General Meetings (SS-2), as issued and amended, by the Institute of Company Secretaries of India ('the ICSI').

31. StatutoryAuditor

The Shareholders, attheir 63rd AGM held on 28th September 2022, have appointed M/s. Kirtane & Pandit LLP Chartered Accountants (Firm Registration No. 105215W/W100057), Pune, as the Statutory Auditors ofthe Company forthe second term of period of five years, i.e. upto the conclusion ofthe 68th AGM to be held in the year 2027, with an authority to the Board to decide / revise remuneration of the Statutory Auditors from time to time during theirterm.

32. CostAccountant

The Board of Directors of the Company had appointed M/s. Joshi Apte & Associates, Cost Accountants, Pune, for verification and review of the Cost Records of the Company, for the Financial Year 2022-23. M/s. Joshi Apte & Associates, Cost Accountants, Pune, have verified and reviewed the said records for the Financial Year 2022-23.

Further, the provisions of Section 148 of the Act relating to maintenance of cost records are applicableto the Company.

33. Secretarial Audit Report

SIUT & Co LLF, Practicing Firm of Company Secretaries having Registration No. LLPIN: ABA-6960, was appointed to conduct the Secretarial Audit of the Company forthe Financial Year 2022-23, as required under Section 204 of the Act and Rules made thereunder. The Secretarial Audit Report, in Form MR-3, forthe Financial Year 2022-23, is annexed to this report.

34. Industrial Relations

The industrial relations at all the Plants of the Company have been cordial duringthe year.

35. Appreciation

The Directors express their gratitude to the Dealers, Suppliers and Banks fortheir support, and expresstheir warm appreciation forthe sincere co-operation and dedicated work by the employees of the Company.

For and on behalf of the Board of Directors Force Motors Limited

Abhaykumar Firodia

Chairman

DIN: 00025179

Pune, 9th August 2023 Registered Office:

Mumbai-Pune Road, Akurdi, Pune-411 035.

CIN:L34102PN1958PLC011172

Website: www.forcemotors.com

Phone: (Board) 91 2027476381

E-mail: compliance-officer@forcemotors.com