To

The Members,

The Directors are pleased to present the 67th Annual Report, together with the audited standalone and consolidated Financial Statements for the Financial Year ended on March 31,2026.

Standalone

('in lacs)

Consolidated

('in lacs)

No transfer of any amount to general reserve is proposed.

FY 2025-26 was the strongest year in the history of Force Motors Limited. The Company achieved growth in turnover of 12.21%, while profitability increased by 51.41% including exceptional item, compared to the previous financial year. Improvement in topline on a consolidated basis is from '8,07,173 lacs to '9,05,705 lacs, with EBITDA achieved at 17.74%. The performance reflects the benefits of sustained focus on strengthening capabilities, reinforcing core businesses and pursuing growth with financial and operational discipline.

The Company has, over the years, focused on building positions of strength in its chosen segments, while continuing to invest in technology, people and processes to strengthen its ability to respond to evolving customer requirements and pursue future opportunities.

During the year, healthy growth in demand across Tour and Travel, School Buses and buses for commuting professionals provided opportunities across several key mobility applications. The Company's growth during the year was supported by broad-based performance across its key product platforms. Traveller maintained its clear leadership in the core van segment, commanding over 70% market share. Urbania emerged as a significant growth driver, recording over 100% growth in volumes and strengthening its position in premium passenger mobility. The Trax platform also recorded over 70% growth, supported by increasing traction in Tier-2 and Tier-3 markets. The Special Vehicle Division further strengthened the Company's institutional and defence presence with the supply of the first lot of Gurkha vehicles to the Indian Army. The Company also continued to strengthen its capabilities for emerging mobility technologies, including electrification, while pursuing an application-based approach to product and driveline development.

Building on the progress made during the year, the Company has further strengthened its product portfolio with the introduction of the new-generation Traveller N range and Urbania DX. These new offerings reflect the Company's continued emphasis on product development and incorporating evolving customer and passenger expectations into its mobility solutions. The Company also sees continued opportunities in the defence and specialised mobility sectors, where its engineering capabilities and experience in developing purpose-built vehicles provide a strong foundation for future growth.

The component business continued to demonstrate stability and steady growth, with the manufacturing of engines and axles for Mercedes-Benz India at our dedicated facility in Chakan, Pune, and engines and CRFM modules for BMW India at our Chennai facility. During the year, the Company achieved the significant milestone of manufacturing its 100,000th engine for BMW India, reflecting a decade of precision manufacturing and collaboration. Subsequently, the rollout of the 200,000th engine for Mercedes- Benz India marked another important milestone in the Company's long-standing manufacturing relationship with the brand, spanning over 50 years.

The stability in production, sharp customer focus and growing acceptance of the Company's products in India is also enabling the Company to pursue opportunities in a wider range of geographical markets and place greater emphasis on exports. The increasing ability of Indian manufacturers to develop competitive, modern and attractive products, together with the continued growth of the Indian economy despite geopolitical and economic upheavals, provides a favourable environment for the automotive industry.

Going forward, every effort is being made to maintain and improve upon the financial performance achieved during the year. The Company remains focused on strengthening its core businesses, enhancing its product portfolio and building on its engineering and manufacturing capabilities to pursue sustainable and profitable growth. Continued investment in technology, people, processes and market development will remain important as the Company expands its presence across new products, applications and geographies.

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

The Board recommended a dividend of '50/- per share for the year under review, at its Meeting held on April 29, 2026. The same will be paid subject to the approval of the Members at the ensuing Annual General Meeting (‘AGM') of the Company.

The dividend recommended is in accordance with the principles and criteria as set out in the Dividend Distribution Policy of the Company pursuant to the provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ‘LODR Regulations'). The Dividend Distribution Policy is available on the Company's website at https://www.forcemotors.com/wp-content/uploads/2025/02/ Dividend-Distribution-Policv.pdf

The total payout w.r.t. the dividend recommended for the Financial Year 2025-26 will be '6,588 lacs as against '5,270 lacs for the previous financial year.

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

The paid-up equity share capital as on March 31,2026 was '1,318 lacs. The Company did not issue any shares by way of public issue, rights issue, bonus issue or preferential issue or otherwise 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 year under review.

The Annual Return as on March 31,2026, pursuant to the provisions of Section 92 of the Act and the Rules made thereunder, is available on the website of the Company at https://www.forcemotors.com/ investor/

The Board met five times during the financial year. Details of these meetings are provided in the Report on Corporate Governance that forms part of this Annual Report.

Committees of the Board

Pursuant to the provisions of the Companies Act, 2013 (‘the Act') and the LODR Regulations, the Board of Directors have constituted the following Committees:

• Audit Committee;

• Nomination and Remuneration Committee;

• Corporate Social Responsibility Committee;

• Stakeholders' Relationship Committee; and

• Risk Management Committee.

Details of composition, terms of reference and number of meetings held during the Financial Year 2025-26, for the aforementioned Committees are given in the Report on Corporate Governance, which forms a part of this Report. Further, during the year under review, all recommendations made by the various Committees have been considered and accepted by the Board.

The Company has not given any loans, guarantees under Section 186 of the Act during the year under review. Particulars of investments made by the Company up to the period under report are provided in the Financial Statements attached to this Report.

Further, the Company after the closure of financial year acquired 100%> shareholding of Veera Tanneries Private Limited (‘VTPL') at a total consideration of '16,196 lacs.

Further, the Company after the closure of financial year accorded approval for granting Loan to one of its vendor namely PKN Motors Private Limited up to '2,000 lacs pursuant to recommendation of the Audit Committee and approval of the Board of Directors.

All investments made by the Company are held by the Company in its own name except investment in shares covered by proviso to Section 187 (1) of the Act.

During the Financial Year 2025-26, pursuant to Section 177 of the Act and Regulation 23 of the LODR Regulations, 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 of the limits specified under Regulation 23 of the LODR Regulations.

All RPTs entered during the year were entered in the ordinary course of business and on arm's length basis. There were no transactions requiring disclosure under Section 134(3)(h) of the Act. Hence, the prescribed Form AOC-2 does not form a part of this report.

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

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

Conservation of Energy

The Company's efforts towards conservation of energy and the increased use of renewable sources have continued with determination during the year. A significant development was the commissioning of a rooftop solar power plant at Pithampur, further increasing the share of green energy in the Company's energy mix.

The Company continues to work towards its objective of achieving 50% green energy by 2027, while remaining committed to its longer-term goal of Net Zero emissions by 2050. We are pleased to report that renewable sources accounted for 31% of the Company's electricity consumption in the previous year, reflecting steady progress towards this objective.

Along with energy conservation, considerable attention continues to be given to water conservation, tree plantation, rainwater harvesting and the preservation of the natural environment around our plants. A significant example of this commitment is the 30-acre expanse of forest and natural land within the Company's Pithampur Plant, which supports a rich variety of flora and fauna. The preservation and nurturing of this ecosystem reflects the Company's belief that industrial development and environmental stewardship can progress alongside each other.

At the same time, continued improvements in maintenance, reduction of air leakages, use of intelligent devices to regulate consumption of compressed air and electricity, and wider use of energy-efficient equipment are helping improve resource efficiency. These efforts, together with the increasing use of renewable energy, remain an integral part of the Company's approach towards responsible and sustainable manufacturing.

Technology Absorption & Development

Force Motors continues to focus on innovation, manufacturing excellence and customer-centric product development.

For over half a century, the Company has focused on developing products suited to the evolving needs of the Indian market, while progressively preparing them for more sophisticated overseas markets. Local research and development have resulted in products such as the Urbania, Gurkha and Monobus, together with our BS 6.2 drivelines, which are well suited to the product range we manufacture and the markets we serve.

The Company's state-of-the-art Research & Development Centre in Pune is central to these efforts, driving new product development, engineering and technology solutions. Increasing emphasis is being placed on understanding evolving customer requirements and incorporating customer feedback into the development and improvement of our products.

To further strengthen its product development and testing capabilities, while enhancing its engineering expertise for advanced electric mobility, the company invested INR 40 Cr. in upgrading R&D related development and testing infrastructure. In order to ensure next-generation electric vehicle development, company has authorized a total investment of INR 45 Cr. in EV Engineering Infrastructure, assembly stations and testing lab (mainly Powertrain Dyno & Power electronics testing stations).

Force Motors has also become the first manufacturer to develop and homologate an electric ambulance and will offer these vehicles for sale under the PM E-DRIVE Scheme. The Traveller platform, which enjoys a leading position in the passenger van segment, is also available in an electric version, reflecting the Company's preparedness to offer appropriate solutions as the market evolves.

The Company's continued work across conventional, electric and alternative powertrain technologies enables it to remain prepared for changing mobility requirements across different applications and markets.

We have continued to maintain a consistent percentage of expenditure on R&D. The details are as follows:

Foreign Exchange Earnings and Outgo

The foreign exchange earned by the Company during the year under review was of '16,710 lacs as against '12,724 lacs during the previous year.

Total foreign exchange outflow during the year under review was '1,17,597 lacs as compared to '1,14,198 lacs during the previous year.

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

During the year under review, FMTU achieved a top line of '26,032 lacs as compared to top line of '27,357 lacs during the previous financial year. It recorded net profit of '22 lacs during the current financial year, as compared to the net profit of '101 lacs, during the previous financial year.

During the year FMTU was mainly focussed on developing new products for its target markets. FMTU developed a new 500 KVA genset for Indian market, which is compliant with latest emission norms i.e. CPCB IV+. This new product has more than doubled up the accessible market for FMTU in India. Now FMTU has generator sets in various capacities from 500 KVA to1010 KVA, thus enabling the JV to capture complete range in high powered generators, up to 1010 KVA. Also, FMTU successfully developed the DA Set (Diesel Alternator set) for the Indian railways, which is used for powering up the passenger coaches. This has provided FMTU access to an entirely new market. These new products are expected to provide a significant revenue boost in coming years.

Tempo Finance (West) Private Limited achieved a top line of '51 lacs during the current financial year as compared to top line of '50 lacs during the previous financial year. It recorded net profit of '37 lacs during the current financial year, as compared to the net profit of '37 lacs, during the previous financial year.

A statement containing the salient features of the Financial Statement of Subsidiaries, Associates and Joint Ventures 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 at https:// www.forcemotors.com/investor/ 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 at https://www.forcemotors.com/wp-content/uploads/2025/02/ Policy-for-determining-Material-Subsidiaries-its-Governance- Framework-1.pdf

Further, after the closure of financial year the Company has acquired 100% shareholding of VTPL, by virtue of which VTPL has become a Wholly-Owned Subsidiary of the Company.

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 is also informed of the risks and concerns from time to time.

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

A. Appointment and Re-Appointment of Independent Director(s)

During the year under review, the Members of the Company vide Special Resolutions approved the appointment of Mr. Gautam Hemant Bambawale (DIN: 08365776) and Mr. Nitin Nandkishor Kareer (DIN: 01624863) as Independent Directors of the Company

for a term of 5 years with effect from December 19, 2025 and Lt. Gen. Vinod Gulabrao Khandare (Retd.) (DIN: 11363013), as an Independent Director of the Company for a term of 5 years with effect from January 29, 2026, by way of Postal Ballot process completed on March 14, 2026.

In the opinion of the Board, the aforesaid Independent Directors upholds the highest standards of integrity and possesses the requisite experience, expertise and proficiency, which adds value to the Board in the effective discharge of its functions.

Further, Mr. Vallabh Roopchand Bhanshali (DIN: 00184775) and Mr. Mukesh Mangalbhai Patel (DIN: 00053892) who were appointed as Independent Directors of the Company for a term of 5 years with effect from August 13, 2022 and Ms. Sonia Prashar (DIN: 06477222), who was appointed as an Independent Director of the Company for a term of 5 years with effect from September 28, 2022 are proposed to be re-appointed for a second term of 5 years pursuant to the provisions of Sections 149 and 152 of the Act read with Regulation 17, 17(1A) and 25 of the LODR Regulations and other applicable provisions, if any of the Act/LODR Regulations.

The Board recommends aforesaid re-appointments.

B. Directors Retiring by Rotation

During the year under review, the Shareholders of the Company approved re-appointment of Mr. Prashant Vijay Inamdar (DIN: 07071502), as Director of the Company, who was liable to retire by rotation.

Pursuant to the provisions of Section 152 of the Act, read with Articles of Association (‘AoA') of the Company, Mr. Prasan Abhaykumar Firodia (DIN:00029664), Managing Director of the Company, is liable to retire by rotation at the ensuing AGM of the Company and being eligible, offers himself for re-appointment.

The Board recommends his re-appointment.

C. Cessation and appointment of Key Managerial Personnel's

Mr. Sanjay Kumar Bohra, ceased to be Chief Financial Officer (CFO) and Key Managerial Personnel (KMP) of the Company, with effect from June 09, 2025. The Board placed on record its appreciation for professional contribution made by Mr. Sanjay Kumar Bohra during his association with the Company.

Further, based on the recommendations of the Nomination and Remuneration Committee and Audit Committee, the Board of Directors in its meeting held on June 09, 2025, appointed Mr. Rishi Luharuka as the CFO and KMP of the Company, designated as ‘President-Group CFO' with effect from June 10, 2025.

Apart from above, there was no other change in the Directors and Key Managerial Personnel during the period under review.

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 LODR Regulations. The Board after assessing its veracity has taken the same on record.

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.

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.

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

* The deposits are matured, claimed but have been withheld on the instructions of the Statutory Authorities (CBI) and will be repaid upon their approval.

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.

The Company has established a vigil mechanism, formulated a Whistleblower Policy and the Audit Committee oversees the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and/or 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 at

https://www.forcemotors.com/wp-content/uploads/2025/02/Whistle-

Blower-Policv.pdf

The Remuneration Policy of the Company and other related matters as provided under Section 178(3) and 178(4) of the Act are available on the website of the Company at https://www.forcemotors.com/wp- content/uploads/2025/02/Remuneration-Policv-New.pdf The Policy covers criteria for recommending and approving the remuneration of Non-Executive and Executive Directors, Key Managerial Persons as well as Senior Management Employees of the Company.

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 Director's, is given in the Report on Corporate Governance.

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

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

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 Member on request, as per the provisions of Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

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 was one complaint received and disposed off during the year under review. Further, there are no complaints pending as on March 31,2026.

There are no frauds against the Company reported by the Auditors for the period under Report.

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').

The Members, at the 63rd AGM held on September 28, 2022, have appointed M/s. Kirtane & Pandit LLP, Chartered Accountants (Firm Registration No. 105215W / W100057), Pune, as the Statutory Auditors of the Company for the second term of period of five years, i.e. up to the conclusion of the 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 their term.

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 2025-26. M/s. Joshi Apte & Associates, Cost Accountants, Pune, have verified and reviewed the said records for the Financial Year 2025-26.

Further, the provisions of Section 148(1) of the Act relating to maintenance of cost records are applicable to the Company.

The Members, at the 66th AGM held on September 17, 2025, have appointed SIUT & Co LLP, Practicing Firm of Company Secretaries having Registration No. LLPIN: ABA-6960, as the Secretarial Auditors of the Company for a term of five consecutive years, commencing from Financial Year 2025-26 till Financial Year 2029- 30, to conduct the Secretarial Audit of the Company and to furnish Secretarial Audit Report.

The Secretarial Audit Report, in Form MR-3, for the Financial Year 2025-26, is annexed to this Report.

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

No disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review:

• There was no instance of one-time settlement with any Bank or Financial Institution.

• There is no proceedings pending under the Insolvency and Bankruptcy Code, 2016.

• The Company is in compliance with the applicable provisions relating to maternity benefits as prescribed under the Maternity Benefit Act, 1961/ the Code on Social Security, 2020.

• The securities of the Company were not suspended from trading during the year under review on account of corporate actions or otherwise.

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) i n the preparation of the Annual Financial Statements for the year ended March 31, 2026, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) for the Financial Year ended March 31,2026, 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 Company for the year ended March 31, 2026;

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

(d) t he 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 are adequate and operating effectively.

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