Home  »  Company  »  Bharat Forge  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Bharat Forge Ltd.

Mar 31, 2014

The Members,

The Directors have pleasure in presenting the Fifty-third Annual Report on the business and operations of the Company and the audited accounts for the Financial Year ended March 31, 2014.

1. PERFORMANCE OF THE COMPANY

a) Total Income (on stand-alone basis):

2013-14 2012-13 % Change

Rs. 35,140 Million Rs. 32,428 Million 8.36

During the year under review, the total income of the Company was Rs. 35,140 Million (previous year Rs. 32,428 Million), representing an increase of 8.36%.

Indian automotive Industry witnessed another year of de-growth across all segments. Motor & Heavy Commercial Vehicle Sector de-grew by 18% after 26% de-growth in FY 2012-13. Tractor Industry, however, witnessed a growth of 20%. Domestic sales for the Company had a drop of 3%. The Company was able to largely ofset the adverse impact of market conditions in Auto Industry through higher sales to Tractor Industry and other non-automotive sectors.

b) Exports Revenue (on stand-alone basis):

2013-14 2012-13 % Change

Rs.18,482 Million Rs.15,866 Million 16.49

During the year under review, Exports turnover of the Company was Rs.18,482 Million (previous year Rs.15,866 Million), representing an increase of 16.49%.

Impressive growth in exports turnover is the result of relentless eforts made to develop new customers both in automotive and non-automotive sectors and also due to higher share of business from existing customers.

c) Financials (On stand-alone basis):

In Rs. Million

Current Year Previous Year

1) Total Income 35,139.73 32,428.52

2) Exports Revenue 18,482.13 15,866.30

3) Net Profit

Profit for the year before Taxation & Exceptional Item 5,834.92 4,299.08

Add/(less): Exceptional Item 123.50 105.69 Provision for Taxation

Current tax 1,539.00 887.17

MAT Credit - (20.30)

- Deferred 426.73 521.97

- (Excess)/short provision for the taxation & tax payments (6.60) (40.00) Net profit 3,999.29 3,055.93

Balance of profit from Previous Year 11,469.41 10,051.89

profit available for appropriation 15,468.70 13,107.82

APPROPRIATIONS:

Interim Dividend on Equity Shares 465.59 232.79

Tax on above dividend 79.13 37.76

Proposed Final Dividend on Equity Shares 581.99 558.71

Tax on above dividend 98.91 94.95

Debenture Redemption Reserve 403.77 408.60

Transfer to General Reserve 400.00 305.60

Surplus retained in Statement of Profit & loss 13,439.31 11,469.41

A Cash fow statement for the year 2013-14 is attached to the Balance sheet.

2. DIVIDEND

Your Company paid an Interim Dividend ofRs. 2/- per Equity Share (100%) of the face value of Rs. 2/- each, aggregating to Rs. 465.59 Million (exclusive of tax on dividend) for the financial year ended on March 31, 2014.

Your Directors are pleased to recommend a Final Dividend of Rs.2.50 per Equity Share (125%) of the face value of Rs.2/- each, aggregating to Rs. 581.98 Million (exclusive of tax on dividend) for the financial year ended on March 31, 2014 for your consideration. Total Dividend paid for the year ended on March 31, 2013 was Rs.3.40 per Equity Share (170%).

The dividend payout for the year under review has been formulated in accordance with shareholders'' aspirations and the Company''s policy to pay sustainable dividend linked to long term growth objectives of the Company to be met by internal cash accruals.

It is proposed to transfer Rs. 400.00 Million to the General Reserves. An amount of Rs. 13,439.31 Million is proposed to be retained in the Statement of profit & loss.

3. CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements in accordance with Accounting Standard-21 issued by The Institute of Chartered Accountants of India have been provided in the Annual Report. These Consolidated Financial Statements provide financial information about your Company and its subsidiaries as a single economic entity. The Consolidated Financial Statements form a part of the Annual Report.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report (MD&A) for the year under review, as stipulated under Clause 49 of the listing Agreement with Stock Exchanges, is presented in a separate section forming part of the Annual Report.

5. SUBSIDIARIES

The Company has 20 subsidiaries including the step- down subsidiaries of which 12 are overseas and 8 are Indian entities. A summary of their performance is given elsewhere in the Annual Report.

During third quarter, the Company through its indirect subsidiary in Hong Kong has divested its 51.85% stake in

Chinese JV operations (FAw Bharat Forge (Changchun) Company limited) to its Joint Venture partner, China FAw Corporation limited, ending its 8 years old Joint Venture in China.

A significant portion of the consolidated revenue is generated on conclusion of this transaction.

During the last quarter of FY 2013-14, a Scheme of Amalgamation under Sections 391 to 394 of the Indian Companies Act, 1956 amongst Kalyani AlSTOM Power limited (Transferor Company) a joint venture subsidiary Company of Bharat Forge limited and AlSTOM Power Holdings S.A.; and AlSTOM Bharat Forge Power limited (Transferee Company) a joint venture Company of AlSTOM Power Holdings S.A. and Bharat Forge limited has been fled in the Hon''ble High Court of Delhi. The Appointed date as proposed under the scheme is April 01, 2013. On the Scheme becoming efective, the Kalyani AlSTOM Power limited shall stand dissolved without being wound up and get amalgamated into AlSTOM Bharat Forge Power limited.

6. SUBSIDIARY COMPANIES ACCOUNTS

In accordance with the general circular issued by the Ministry of Corporate Afairs, Government of India, the Balance Sheet, Statement of profit and loss and other documents of the subsidiary companies are not being attached to the Balance Sheet of the Company. The Company will make available the Annual Accounts of its subsidiary companies and related information to the member of the Company who may be interested in obtaining the same. The annual accounts of its subsidiary companies will also be kept open for inspection at the Registered Ofce of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of subsidiary companies including the step-down subsidiaries.

Accordingly, Company has not attached the Balance Sheet and other documents required to be attached under Section 212(1) of the Companies Act, 1956 of its subsidiary companies including the step-down subsidiaries, namely:

Foreign Subsidiaries:

i) CDP Bharat Forge GmbH, Germany

ii) Bharat Forge Holding GmbH, Germany

iii) Bharat Forge Aluminiumtechnik GmbH & Co. KG, Germany

iv) Bharat Forge Aluminiumtechnik Verwaltungs GmbH & Co. KG, Germany

v) Bharat Forge Daun GmbH, Germany

vi) Bharat Forge America Inc., u.S.A.

vii) Bharat Forge Beteiligungs, GmbH, Germany

viii) Bharat Forge Kilsta AB, Sweden

ix) Bharat Forge Scottish Stampings ltd., Scotland

x) Bharat Forge Hong Kong ltd., Hong Kong

xi) BF New Technologies GmbH, Germany and

xii) Bharat Forge International ltd., u.K.

Indian Subsidiaries:

xiii) BF-NTPC Energy Systems limited

xiv) Kalyani AlSTOM Power limited

xv) BF Infrastructure limited

xvi) BF Infrastructure Ventures limited

xvii) Kalyani Strategic Systems limited

(Formerly BF Power Equipment limited)

xviii) Analogic Controls India limited

xix) BF Elbit Advanced Systems Private limited and

xx) Kalyani Polytechnic Private limited

A gist of the financial performance of the subsidiaries is given in the Annual Report.

7. FOREIGN CURRENCY CONVERTIBLE BONDS

The FCCBs - Tranche B, aggregating to uS $ 62,435,919 (including principal of uS $ 39,900,000 and redemption premium of uS $ 22,535,919) have been redeemed by the Company on April 26, 2013.

As on date, the Company has no outstanding FCCBs.

8. CONVERTIBLE WARRANTS

None of the warrants issued under QIP was submitted for conversion into Equity Shares before the warrants exercise period and all 6,500,000 warrants have lapsed and ceased to be valid with efect from April 28, 2013.

9. REDEMPTION OF DEBENTURES

- The 25% installment of Company''s 10.75% Secured Redeemable Non-Convertible Debentures of Rs. 350 crore of a face value of Rs. 1,000,000/- each was due for redemption on, March 22, 2014 and the same has been paid on due date. As a result, after the said redemption, the paid up value of the said Debentures stands reduced to Rs. 750,000/- each at the end of 54th month from the date of allotment.

- The 35% installment of Company''s 10.75% Secured Redeemable Non-Convertible Debentures ofRs. 176 crore of a paid up of Rs. 1,000,000/- each was due for redemption on April 28, 2014 and the same has been paid on due date. As a result, after the said redemption, the face value of the said Debentures stands reduced to Rs. 650,000/- each at the end of 4th year from the date of allotment.

10. PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. Having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act 1956, the Annual Report excluding the aforesaid information is being sent to all the members and others entitled thereto. Any member interested in obtaining such particulars, may write to the Company Secretary at the Registered Ofce of the Company.

During the year under review, pursuant to the new legislation "Prevention, Prohibition and Redressal of Sexual Harassment of women at workplace Act 2013" introduced by the Government of India, which came into efect from December 9, 2013, the Company has framed a Policy on Prevention of Sexual Harassment at workplace.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided as Annexure - I to this report.

12. FIXED DEPOSITS

The Company has not accepted any deposits from the public during the year.

13. CORPORATE SOCIAL RESPONSIBILITY

Section 135 of the Companies Act, 2013 alongwith the Rules thereunder and revised Schedule VII to the Act, concerning Corporate Social Responsibility (CSR), have been efective from April 1, 2014.

The Company being covered under the provisions of the said section, has taken necessary initial steps in this regard. A committee of the Directors, titled ''Corporate Social Responsibility Committee'', has been formed by the Board in its meeting held on May 27, 2014, consisting of the following Directors: Mr. P. G. Pawar, Chairman Mr. B. N. Kalyani, Member Mr. Amit Kalyani, Member

The Committee has formulated CSR policy for the Company and is in the process of finalisation of its implementation plan.

The said Section being enacted with efect from April 1, 2014, necessary details as prescribed under the said Section shall be presented to the members in the Annual Report for the year 2014-15.

Even when the said provisions were not mandated by the Ministry of Corporate Afairs, the Company has been continuously working on its CSR initiatives in various felds.

14. WHISTLE BLOWER POLICY

The Company has now adopted whistle Blower Policy to meet the requirements of the Companies Act, 2013, wherein the employees/directors of the Company are free to report any unethical or improper activity, actual or suspected fraud or violation of the Company''s Code of Conduct. This mechanism provides safeguards against victimization of employees, who avail of the mechanism.

15. DIRECTORS

In terms of the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Sunil K. Chaturvedi and Mr. B. P. Kalyani Directors of the Company, retire by rotation at the ensuing Annual General Meeting and, being eligible, ofer themselves for re-appointment.

Mr. S. D. Kulkarni and Dr. uwe loos, Directors of the Company, have conveyed their intentions not to ofer themselves for re-appointments at the previous Annual General Meeting held on August 8, 2013 and ceased to be Directors of the Company from that date. The Directors place on record their appreciation of the valuable contribution made by both of them.

Mr. Sunil Kumar Chaturvedi ceased to be an Executive Director of the Company with efect from end of the day on December 31, 2013. However, he continues to be on the Board of the Company as a Non- Executive Director.

Mr. Alan Spencer, Non-Executive Independent Director of the Company has tendered his resignation efective from May 27, 2014 due to his other preoccupation. The Board at its meeting held on May 27, 2014 has noted the same and Mr. Alan Spencer ceases to be a Director of the Company with efect from the close of business hours of May 27, 2014. The Directors place on record their appreciation of the valuable contribution made by Mr. Alan Spencer.

Mr. Amit B. Kalyani has been re-appointed as the Executive Director of the Company for a period of 5 years with efect from May 11, 2014, subject to the approval of the Members.

Pursuant to Sections 149 and 152 of the Companies Act, 2013 and in terms of Clause 49 of the listing Agreement, the Board of Directors has, at its meeting held on May 27, 2014, appointed the existing Independent Directors Mr. S. M. Thakore, Mr. P. G. Pawar, Mrs. lalita D. Gupte, Mr. P. H. Ravikumar, Mr. Naresh Narad, Dr. Tridibesh Mukherjee and Mr. Vimal Bhandari as Independent Directors for a term of 5 consecutive years with efect from the date of ensuing Annual General Meeting, subject to approval of shareholders. The requisite resolutions for approval of their appointment as Independent Directors, are being proposed in the notice of the ensuing Annual General Meeting for the approval of the members.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the listing Agreement with the Stock Exchanges.

As required under Clause 49 of the listing Agreement with the Stock Exchanges, the information on the particulars of Directors proposed for appointment/re-appointment has been given in the Report on Corporate Governance.

16. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the financial year ended March 31, 2014, the applicable Accounting Standards have been followed alongwith proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of afairs of the Company as at March 31, 2014 and of the profit of the Company for the year under review;

(iii) the Directors had taken proper and sufcient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors had prepared the annual accounts for the financial year ended on March 31, 2014 on a ''going concern'' basis.

17. AUDITORS AND AUDITORS'' REPORT

M/s. S. R. Batliboi & Co. llP are holding ofce as Auditors from the conclusion of 51st Annual General Meeting held on July 27, 2012 prior to the commencement of the Companies Act, 2013 ("the Act"). In terms of the provisions of the Act and the related rules thereunder, in respect of rotation of auditors, M/s. S. R. Batliboi & Co. llP are eligible for re-appointment. However, in view of the internal process of re-alignment at the SR Batliboi & Aflates network of firms; M/s. S. R. Batliboi & Co. llP Chartered Accountants, Pune (Firm Registration No. SRBC 301003E) Statutory Auditors of the Company, hold ofce upto the conclusion of the ensuing Annual General Meeting. The Directors, based on the recommendation of the Audit Committee, propose the appointment of M/s. S R B C & Co. llP, Chartered Accountants, Pune - a member of SR Batliboi & Aflates network of firms; in place of M/s. S. R. Batliboi & Co. llP as Statutory Auditors for the period from the conclusion of the ensuing 53rd Annual General Meeting till the conclusion of the 56th Annual General Meeting to be held in the year 2017 and seek authority for fixation of their remuneration for the year 2014-15.

The Company has received letter from M/s. S R B C & Co. llP, Chartered Accountants, Pune to the efect that their appointment, if made, would be within the prescribed limits under the Companies Act, 2013, and the conditions prescribed read with the Rule 4 of Companies (Audit and Auditors) Rules, 2014 and that they are eligible for such appointment.

The observations and comments given by the Statutory Auditors in their report read together with notes thereon are self-explanatory and hence, do not call for any further comments under Section 217 of the Companies Act, 1956.

18. COST AUDITORS

M/s. Dhananjay V. Joshi & Associates, Cost Accountants, Pune, have been re-appointed as the Company''s Cost Auditors for the financial year 2014-15 under Section 148 of the Companies Act, 2013. The members'' approval to the Remuneration of Cost Auditors is sought.

19. CORPORATE GOVERNANCE

The Company has adopted the Corporate Governance Policies and Code of Conduct which has set out the systems, processes and policy conforming to the best standards. The report on Corporate Governance as stipulated under Clause 49 of the listing Agreement with the Stock Exchanges, forms part of the Annual Report.

A Certifcate from the Statutory Auditors of the Company, M/s. S. R. Batliboi & Co. llP, Chartered Accountants, confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is attached to this Report.

20. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder and based on the recommendation from the Audit Committee, Mr. S. V. Deulkar proprietor of M/s. S. V. Deulkar & Co. Company Secretaries has been appointed to conduct a secretarial audit of Company''s Secretarial and related records for the year ending on March 31, 2015. The Secretarial standards issued by the Institute of Company Secretaries of India from time to time are currently recommendatory in nature. The Company is, however, complying with the most of them.

21. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, the dividend which remained unclaimed for a period of seven years has been transferred by the Company to the Investor Education and Protection Fund.

22. ACKNOWLEDGEMENT

Your Directors would like to express their sincere appreciation of the positive co-operation received from the Central Government, the Government of Maharashtra, Financial Institutions and the Bankers. The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, ofcers, workers and staf of the Company resulting in the successful performance of the Company during the year.

The Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued shareholders.

The Directors express their special thanks to Mr. B. N. Kalyani, Chairman and Managing Director, for his untiring eforts for the progress of the Company.

For and on behalf of the Board of Directors

Place: Pune B. N. KALYANI

Date: May 27, 2014 Chairman and Managing Director


Mar 31, 2013

To, The Members,

The Directors have pleasure in presenting the Fifty-second Annual Report on the business and operations of the Company and the audited accounts for the Financial Year ended March 31, 2013.

1. PERFORMANCE OF THE COMPANY

a) Total Income (on stand-alone basis):

2012-13 2011-12 % Change

Rs. 32,428 Million Rs. 37,535 Million (13.61)

During the year under review, the total income of the Company was Rs. 32,428 Million (previous year Rs. 37,535 Million), representing a decrease of 13.61%.

The strong performance in the 1st half of the fiscal was neutralized by the across the board weak global demand environment towards the end of the year.

The domestic automotive industry faced one of its most challenging years in 2013 facing several headwinds. The Medium & Heavy Commercial Vehicle sector de-grew by 27% in FY13 while the overall industry volume was flat.

b) Exports Revenue (on stand-alone basis):

2012-13 2011-12 % Change

Rs. 15,866 Million Rs. 17,347 Million (8.54)

During the year under review, Exports turnover of the Company was Rs. 15,866 Million (previous year Rs. 17,347 Million), representing a decrease of 8.54%.

Strong demand across both automotive and industrial segments continued well into the first half of FY13. However, there had been a sudden and sharp decline in demand due to unscheduled production cuts at the OEMs, leading to simultaneous and significant inventory pile-up across sectors and geographies.

Despite the market volatility, the Company has successfully expanded its relationships with global OEMs across various geographies, notably in Brazil & Japan. The Company is working to enhance its global presence, acquire new customers and develop new value-added products.

c) Financials: (On stand-alone basis):

In Rs. Million

Current Previous Year Year

1) Total Income 32,428.52 37,535.44

2) Exports Revenue 15,866.30 17,347.09

3) Net Profit

Profit for the year before Taxation & Exceptional Item 4,299.08 6,174.74

Add/(Less): Exceptional Item 105.69 (704.16)

Provision for Taxation

Current tax 887.17 1,812.00

MAT Credit (20.30) -

- Deferred 521.97 37.85

- (Excess)/short provision for the taxation & tax payments (40.00) -

Net Profit 3,055.93 3,620.73

Balance of Profit from Previous Year 10,051.89 8,284.10

Profit available for appropriation 13,107.82 11,904.83

APPROPRIATIONS:

Interim Dividend on Equity Shares 232.79 349.19

Tax on above dividend 37.76 56.65

Proposed Final Dividend on Equity Shares 558.71 581.99

Tax on above dividend 94.95 94.41

Debenture Redemption Reserve 408.60 408.60

Transfer to General Reserve 305.60 362.10

Surplus retained in Statement of Profit & Loss 11,469.41 10,051.89

2. DIVIDEND

Your Company paid an Interim Dividend of Rs. 1 per Equity Share (50%) of the face value of Rs. 2 each, aggregating to Rs. 232.79 Million (exclusive of tax on dividend) for the financial year ending on March 31, 2013.

Your Directors are pleased to recommend a Final Dividend of Rs. 2.40 per Equity Share (120%) of the face value of Rs. 2 each, aggregating to Rs. 558.71 Million (exclusive of tax on dividend) for the financial year ended March 31, 2013 for your approval.

The dividend, if approved at the ensuing Annual General Meeting, will be paid to members whose names appear in the Register of Members as on Friday, August 2, 2013; in respect of shares held in dematerialised form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as at the end of that date.

The dividend payout for the year under review has been formulated in accordance with shareholders'' aspirations and the Company''s policy to pay sustainable dividend linked to long term growth objectives of the Company to be met by internal cash accruals.

It is proposed to transfer Rs. 305.60 Million to the General Reserves. An amount of Rs. 11,469.41 Million is proposed to be retained in the Statement of Profit & Loss.

3. CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements in accordance with Accounting Standard-21 issued by The Institute of Chartered Accountants of India have been provided in the Annual Report. These Consolidated Financial Statements provide financial information about your Company and its subsidiaries as a single economic entity. The Consolidated Financial Statements form part of this Annual Report.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report (MD&A) for the year under review, as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges in India, is presented in a separate section forming part of this Annual Report.

In line with its aspiration of ongoing growth, the Company has entered into various Joint Ventures / Alliances as suitably dealt with in the MD&A.

5. SUBSIDIARIES

The Company has 20 subsidiaries including the stepdown subsidiaries of which 13 are overseas and 7 are Indian entities. A summary of their performance is given elsewhere in the Annual Report.

In view of the operations and assets of Bharat Forge Scottish Stampings Ltd. (BFSSL), subsidiary of the Company active in the European markets, being transferred to other group companies in Bharat Forge Group under the restructuring program, the accounts of BFSSL have been prepared not under going concern'' basis.

Bharat Forge America Inc. (BFA), wholly owned subsidiary of the Company in USA has closed down its manufacturing operations in November, 2012. Majority of BFA''s business has been transferred to India in order to protect the business within the Group and the fixed assets of BFA have been sold in USA. The said decision for closure of facility was taken in light of continued losses. Although BFA has ceased manufacturing, it will continue to be the front end for North American business with sales and engineering activities. Through the front end, BFL will target much higher level of customer share and new business.

Analogic Controls India Limited, Hyderabad has become a subsidiary of the Company in April, 2013.

A significant portion of the consolidated revenue is generated by the subsidiary companies.

6. SUBSIDIARY COMPANIES ACCOUNTS

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not being attached to the Balance Sheet of the Company. The Company will make available the Annual Accounts of its subsidiary companies and related information to the member of the Company who may be interested in obtaining the same. The annual accounts of its subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies including the stepdown subsidiaries.

Accordingly, Company has not attached the Balance Sheet and other documents required to be attached under Section 212(1) of the Companies Act, 1956 of its subsidiary companies including the stepdown subsidiaries, namely:

Foreign Subsidiaries:

i) CDP Bharat Forge GmbH, Germany

ii) Bharat Forge Holding GmbH, Germany

iii) Bharat Forge Aluminiumtechnik GmbH & Co. KG, Germany

iv) Bharat Forge AluminiumtechnikVerwaltungs GmbH & Co. KG, Germany

v) Bharat Forge Daun GmbH, Germany

vi) Bharat Forge America Inc., U.S.A.

vii) Bharat Forge Beteiligungs, GmbH, Germany

viii) Bharat Forge Kilsta AB, Sweden

ix) Bharat Forge Scottish Stampings Ltd., Scotland

x) Bharat Forge Hong Kong Ltd., Hong Kong

xi) FAW Bharat Forge (Changchun) Company Ltd., China

xii) BF New Technologies GmbH, Germany and

xiii) Bharat Forge International Ltd., U.K.

Indian Subsidiaries:

xiv) BF-NTPC Energy Systems Ltd.

xv) Kalyani ALSTOM Power Ltd.

xvi) BF Infrastructure Ltd.

xvii) BF Infrastructure Ventures Ltd.

xviii) BF Power Equipments Ltd.

xix) BF Elbit Advanced Systems Private Limited and

xx) Kalyani Polytechnic Private Limited

A gist of the financial performance of the subsidiaries is given in this Annual Report.

7. FOREIGN CURRENCY CONVERTIBLE BONDS

In April 28, 2006, the Company had issued Foreign Currency Convertible Bonds (FCCBs) (Tranche A & Tranche B), optionally convertible into Global Depository Receipts (GDRs)/ Equity Shares, aggregating to US $ 79.90 Million, in terms of Offering Circular dated April 24, 2006, mainly to finance capital expenditure and global acquisitions. FCCBs - Tranche A, aggregating to US $ 57,030,400 (including principal of US $ 40,000,000 and redemption premium of US $ 17,030,400) have already been redeemed by the Company on April 27, 2012.

The remaining FCCBs - Tranche B, aggregating to US $ 62,435,919 (including principal of US $ 39,900,000 and redemption premium of US $ 22,535,919) have been redeemed by the Company on April 26, 2013.

As on date, the Company has no outstanding FCCBs.

8. CONVERTIBLE WARRANTS

The Company had under its QIP issue on April 26, 2010, issued 6,500,000 Warrants at a price of Rs. 2 per warrant for an aggregate amount of Rs. 13,000,000. Under the terms of the issue every warrant was exchangeable with 1 equity share of Rs. 2 each of the Company, at any time within a period of 3 years from the date of its allotment i.e. on or before April 28, 2013, at a warrant exercise price of Rs. 272 per equity share The said Warrants were listed on Bombay Stock Exchange Ltd., National Stock Exchange of India Ltd. and Pune Stock Exchange Ltd.

None of the Warrants were submitted for conversion into Equity Shares before the Warrants exercise period and all 6,500,000 Warrants have lapsed and ceased to be valid with effect from April 28, 2013.

9. PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. Having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act 1956, the Annual Report excluding the aforesaid information is being sent to all the members and others entitled thereto. Any member interested in obtaining such particulars, may write to the Company Secretary at the Registered Office of the Company.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided as Annexure - I to this report.

11. FIXED DEPOSITS

The Company has not accepted any deposits from the public during the year.

12. DIRECTORS

In terms of the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. G. K. Agarwal, Mr. P. C. Bhalerao and Mr. P. G. Pawar Directors of the Company, retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment.

Mr. S. D. Kulkarni, Director of the Company, who retires by rotation at the ensuing Annual General Meeting, has conveyed his intention not to offer himself for re-appointment. He is also the Chairman of the Finance Committee & Investor Grievances Committee and a Member of Remuneration Committee. The Directors place on record their appreciation of the valuable contribution made by him.

Dr. Uwe Loos, Director of the Company, who retires by rotation at the ensuing Annual General Meeting, has conveyed his intention not to offer himself for re-appointment. The Directors place on record their appreciation of the valuable contribution made by him.

The Board of Directors of the Company have appointed Mr. Vimal Bhandari, as an Additional Director of the Company with effect from February 8, 2013. Mr. Vimal Bhandari holds office as an Additional Director till the date of the ensuing Annual General Meeting. A notice proposing appointment of Mr. Vimal Bhandari as Director having been received, the matter is included in the Notice for the ensuing Annual General Meeting.

13. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the financial year ended March 31, 2013, the applicable Accounting Standards have been followed alongwith proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the profit of the Company for the year under review;

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors had prepared the annual accounts for financial year ended on March 31, 2013 on a going concern'' basis.

14. AUDITORS AND AUDITORS'' REPORT

M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, Pune (Firm Registration No. 301003E) Auditors of the Company (formerly M/s. S. R. Batliboi & Co.), hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received letter from M/s. S. R. Batliboi & Co. LLP, Chartered Accountants to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956, and that they are not disqualified for such appointment within the meaning of Section 226 of the Companies Act, 1956.

The observations and comments given by the Statutory Auditors in their report read together with notes to Accounts are self explanatory and hence, do not call for any further comments under Section 217 of the Companies Act, 1956.

15. COST AUDITORS

M/s. Dhananjay V. Joshi & Associates, Cost Accountants, Pune, Cost Auditors of the Company under Section 233 of the Companies Act, 1956 have been re-appointed as the Company''s Cost Auditors for the financial year 2013-14.

16. CORPORATE GOVERNANCE

The Company has adopted the Corporate Governance Policies and Code of Conduct which has set out the systems, processes and policy conforming to international standards. The report of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of the Annual Report.

A Certificate from the Statutory Auditors of the Company, M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, confirming compliance with conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is attached to this Report.

17. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, the dividend which remained unclaimed for a period of seven years has been transferred by the Company to the Investor Education and Protection Fund.

As on March 31, 2013, 11 Depositors having deposits aggregating to Rs. 136,000 did not collect the amounts due. However, as of May 25, 2013, 3 unclaimed deposits for the period of seven years aggregating to Rs. 45,000 were transferred to Investor Education and Protection Fund.

18. ACKNOWLEDGEMENT

Your Directors would like to express their sincere appreciation of the positive co-operation received from the Central Government, the Government of Maharashtra, Financial Institutions and the Bankers. The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers and staff of the Company resulting in the successful performance of the Company during the year.

The Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued shareholders.

The Directors express their special thanks to Mr. B. N. Kalyani, Chairman & Managing Director, for his untiring efforts for the progress of the Company.

For and on behalf of the Board of Directors

Place: Pune B. N. KALYANI

Date: May 25, 2013 Chairman and Managing Director


Mar 31, 2012

The Directors have pleasure in presenting the Fifty-first Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2012.

1. PERFORMANCE OF THE COMPANY:

a) Total Income (on stand-alone basis):

2011-12 2010-11 % Increase

Rs 37,521 million Rs 29,935 million 25.34

During the year under review, the total income of the Company was Rs 37,521 million, (previous year Rs 29,935 million) representing an increase of 25.34%.

Our customers both in domestic and international markets witnessed strong demand. The Company was able to support increased demand by improving productivity of existing operations as also ramping up production at its Baramati facility.

b) Exports Revenue (on stand-alone basis):

2011-12 2010-11 % Increase

Rs 17,347 million Rs 12,195 million 42.25

During the year under review, Exports turnover of the Company was Rs 17,347 million, (previous year Rs 12,195 million) representing an increase of 42.25%.

The Company on its Global front has seen an increase of supply of approx. 45% both in North American and European Markets as compared to the Financial Year 2010-11. This increase seen was 9% for the Rest of the World. Penetration in the Global Automotive/ Non Automotive sector was primarily on account of being a high quality, cost competitive, technically advanced supplier for critical components. The major growth drivers for the Company over the past 2 years have been new customer additions, new product development, new segments and increased business with all marquee customers generating strong order pipe-line.

The Company has demonstrated sustained growth in Non Auto business driven by oil & gas, construction & mining sector along with the strong presence witnessed in Automotive sector.

The Company continues to increase its penetration both in Automotive and Non Automotive sectors inspite of all applicable sectors showing high volatility.

c) Financials: (On stand-alone basis):

(Rs in Million)

Current Previous Year Year

1) Total Income 37,520.70 29,935.47

2) Exports Revenue 17,347.09 12,195.09

3) Net Profit

Profit for the year before Taxation & Exceptional Item 6,174.74 4,473.58

Add/(Less): Exceptional Item (704.16) -

Provision for Taxation

Current tax 1,812.00 876.71

- Deferred 37.85 491.20

- (Excess)/short provision for the taxation & tax payments - (2.58)

Net Profit 3,620.73 3,108.25

Balance of Profit from Previous Year 8,284.10 6,833.23

Profit available for appropriation 11,904.83 9,941.48

APPROPRIATIONS:

Interim Dividend on Equity Shares 349.19 -

Tax on above dividend 56.65 -

Proposed Final Dividend on Equity Shares 581.99 814.78

Tax on above dividend 94.41 132.18

Debenture Redemption Reserve 408.60 399.42

Transfer to General Reserve 362.10 311.00

Surplus retained in Profit & Loss Account 10,051.89 8,284.10

2. DIVIDEND:

Your Company declared and paid an Interim Dividend of 75% i.e. Rs 1.50 per Equity Share of the face value of Rs 2 each, totaling to Rs 349.19 million (exclusive of tax on dividend).

Your Directors are pleased to recommend a Final Dividend of 125% i.e. Rs 2.50 per Equity Share of the face value of Rs 2 per Equity share aggregating to Rs 581.99 million (exclusive of tax on dividend) for the financial year ended March 31, 2012 for your approval.

The Final Dividend, if approved, will be paid to the eligible members within the stipulated period.

3. CONSOLIDATED FINANCIAL STATEMENTS:

Consolidated Financial Statements in accordance with Accounting Standard-21 issued by The Institute of Chartered Accountants of India have been provided in the Annual Report. These Consolidated Financial Reports provide financial information about your Company and its subsidiaries as a single economic entity. The Consolidated Financial Statements form part of this Annual Report.

4. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:

Management's Discussion and Analysis Report (MD&A) for the year under review, as stipulated under clause 49 of the listing agreement with stock exchanges in India, is presented in a separate section forming part of the Annual Report.

In line with its aspiration of ongoing growth, the Company has entered into various Joint Ventures / Alliances as elaborately dealt with in MD&A.

5. SUBSIDIARIES:

The Company has 18 subsidiaries of which 13 are overseas and 5 are in India. A summary of their performance is given elsewhere in the Annual Report.

In light of improvement in market conditions in year 2011 over earlier year and restructuring initiatives, overseas subsidiaries of the Company have shown improvement in the financial performance. Company's initiatives in capital goods sector and Engineering, Procurement and Construction activities are in start up phase and will be operational by Financial Year 2013 - 2014.

As a part of such restructuring program, operations and assets of Bharat Forge Scottish Stampings Ltd. (BFSSL), subsidiary of the Company active in the European markets, were transferred to other group companies in Bharat Forge Group. Hence, the accounts of BFSSL have been prepared not under 'going concern' basis.

The Auditors of Bharat Forge America Inc. (BFA), subsidiary of the Company, active in the North American markets, have, without qualifying their reports, expressed a possibility about BFA's inability to continue as going concern due to market conditions in North America. BFA has implemented various measures to improve the performance, which include successful Union negotiations, new business initiatives with widening customer base and product portfolio, a very tight control on costs etc. Although, BFA is taking steps for overall improvement in operating performance, as a matter of prudence, the Company has taken a provision of Rs 704 million for impairment of its investment in BFA. Such provision do not have any cash flow impact as well as any adverse impact on consolidated financials of the Company.

During the year, the Company started routing of some of its exports through its wholly owned subsidiary in U.K. namely Bharat Forge International Limited (BFINTL). BFINTL is formed for better logistic and supply chain management.

A significant portion of the consolidated revenue is generated by the subsidiary companies. Detailed analysis of the working of the subsidiary companies appears in the MD&A section.

6. SUBSIDIARY COMPANIES ACCOUNTS:

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

Accordingly, Company has not attached the Balance Sheet and other documents required to be attached under Section 212(1) of the Companies Act, 1956, of its subsidiary companies, namely:

Foreign Subsidiaries:

i) CDP Bharat Forge GmbH, Germany,

ii) Bharat Forge Holding GmbH, Germany

iii) Bharat Forge Aluminiumtechnik GmbH & Co. KG, Germany

iv) Bharat Forge Aluminiumtechnik Verwaltungs GmbH & Co. KG, Germany

v) Bharat Forge Daun GmbH, Germany

vi) Bharat Forge America Inc., U.S.A.

vii) Bharat Forge Beteiligungs, GmbH, Germany

viii) Bharat Forge Kilsta AB, Sweden

ix) Bharat Forge Scottish Stampings Ltd., Scotland

x) Bharat Forge Hong Kong Ltd., Hong Kong

xi) FAW Bharat Forge (Changchun) Company Ltd., China

xii) BF New Technologies GmbH, Germany and

xiii) Bharat Forge International Ltd., U.K.

Indian Subsidiaries:

xiv) BF-NTPC Energy Systems Ltd.

xv) Kalyani ALSTOM Power Ltd.

xvi) BF Infrastructure Ltd.

xvii) BF Infrastructure Ventures Ltd. and

xviii)BF Power Equipment Ltd.

A gist of the financial performance of the subsidiaries is given in this Annual Report.

7. FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs):

REDEMPTION:

On April 28, 2006, the Company had issued Foreign Currency Convertible Bonds (FCCBs) (Tranche A & Tranche B), optionally convertible into Global Depository Receipts (GDRs)/ Equity Shares, aggregating to US $ 79.90 million, in terms of Offering Circular dated April 24, 2006, mainly to finance capital expenditure and global acquisitions.

Out of this, FCCBs - Tranche A, aggregating to US $ 57,030,400 (including principal of US $ 40,000,000 and redemption premium of US $17,030,400) were redeemed by the Company in April, 2012.

8. QIP ISSUE:

Pursuant to authorization given by the members by postal ballot on February 27, 2010, the QIP Committee of Directors had issued and allotted on April 28, 2010, 10,000,000 equity shares of Rs 2 each, 6,500,000 convertible Warrants and 1,760 Secured Redeemable Non Convertible Debentures under QIP issue. The proceeds of the QIP issue have been utilized for long term funding requirements.

9. TERM DEPOSITS:

As on March 31, 2012, 16 Depositors having deposits aggregating to Rs 195,000 did not collect the amounts due. However, as of May 28, 2012, 1 deposit of Rs15,000 was transferred to Investor Education and Protection Fund (IEPF) as per requirements of law. Presently, the Company does not accept/renew deposits.

10. PARTICULARS OF EMPLOYEES:

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees are set out in the Annexure to the Directors' Report. Having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act 1956, Annual Report excluding the aforesaid information is being sent to all the members and others entitled thereto.

Any member interested in obtaining such particulars, may write to the Company Secretary at the registered office of the Company.

11. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is provided as Annexure - I to this report.

12. DIRECTORS:

In terms of the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. S.E. Tandale, Mr. S. M. Thakore, Mr. P.H. Ravikumar, Mr. Naresh Narad and Dr. T. Mukherjee, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment.

13. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the financial year ended March 31, 2012, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profit of the Company for the year under review;

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors had prepared the annual accounts for financial year ended March 31, 2012 on a 'going concern' basis.

14. AUDITORS AND AUDITORS' REPORT:

M/s. Dalal & Shah, Chartered Accountants, Mumbai (Firm Registration No.102021W) are the present Statutory Auditors of the Company.

The Company has received a Special Notice pursuant to the provisions of Sections190 and 225 of the Companies Act, 1956 proposing M/s. S. R. Batliboi & Company, Chartered Accountants, Pune (Firm Registration No. SRBC 301003E) as the Statutory Auditors of the Company in place of M/s. Dalal & Shah.

Accordingly, it is proposed to appoint M/s. S. R. Batliboi & Company, Chartered Accountants, Pune (Firm Registration No. SRBC 301003E) as the Statutory Auditors of the Company to hold the office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting.

The requisite certificate pursuant Section 224(1B) of the Companies Act, 1956, has been received from M/s. S. R. Batliboi & Company, Chartered Accountants, Pune.

The observations and comments given by the Auditors in their report read together with notes to Accounts are self explanatory and hence do not call for any further comments under Section 217 of the Companies Act, 1956.

15. COST AUDITORS:

The Board has appointed M/s. Dhananjay V. Joshi & Associates, Cost Accountants, Pune, as the Cost Auditors of the Company under Section 233 of the Companies Act, 1956 for the financial year 2012-13.

16. CORPORATE GOVERNANCE:

The Company has adopted the Corporate Governance Policies and Code of Conduct which has set out the systems, processes and policy conforming to international standards. The report of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of the Annual Report.

A Certificate from the Auditors of the Company, M/s. Dalal & Shah, Chartered Accountants, confirming compliance with conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is attached to this Report.

17. TRANSFER OF FUNDS TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, dividend which remain unpaid or unclaimed for a period of 7 years has been transferred by the Company to the Investor Education and Protection Fund.

18. ACKNOWLEDGEMENT:

Your Directors would like to express their sincere appreciation of the positive co-operation received from the Central Government and the Government of Maharashtra, Financial Institutions and the Bankers. The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers and staff of the Company resulting in the successful performance of the Company during the year.

The Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued shareholders.

The Directors express their special thanks to MR. B.N. KALYANI, Chairman & Managing Director, for his untiring efforts for the progress of the Company.

For and on behalf of the Board of Directors

B.N. KALYANI

Mumbai: May 28, 2012 Chairman & Managing Director


Mar 31, 2011

The Directors have pleasure in presenting the Fiftieth Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2011.

1. PERFORMANCE OF THE COMPANY:

a) Total Income (on stand-alone basis):

2010-11 2009-10 % Increase

Rs 29,935 million Rs 18,887 million 58.49

During the year under review, the total income of the Company was Rs 29,935 million (Rs 18,887 million) representing increase of 58.49%.

The Company saw strong revival of demand both in domestic and export markets and was able to respond promptly by ramping up supplies. New capacities created at Baramati with 80 M-T Hammer and heavy duty machining line for crankshafts became fully operational and contributed significantly to Company’s growth.

b) Exports Revenue (on stand-alone basis):

2010-11 2009-10 2008-09 2007-08

Rs 12,195 Rs 7,066 Rs 10,024 Rs 9,610

million million million million

During the year under review, Exports turnover of the Company was Rs 12,195 million, (Rs 7,109 million) represents increase of 71.54%.

On the global front, there was consistent and progressive QoQ recovery over FY 2009 levels in Europe and North America. This applied to the Automotive Sector, though, lower than previous peaks scaled earlier in FY 2006-07. These sectors are of vital importance for the Company as such, the revival augured well. The Company was also able to enhance its market share in the period through a stable and reliable performance for its customers. Additionally, the Company’s strong focus for foray in Non-Automotive segments helped to augment growth opportunities. Overall, Company has been able to post strong results as a result of above factors. Performance of overseas operations has also improved in the review period due to the strong sustainability measures initiated in FY 2009.

The Company continues to successfully secure new business and growth opportunities in varied industrial sectors – automotive as well as non-automotive.

c) Financials: (On stand-alone basis):

(Rs in million)

Current Previous

Year Year

Profit for the year before Taxation 4,476.08 1,807.17

Provision for Taxation

Current including Wealth Tax & FBT 879.21 603.30

- Deferred 491.20 (66.59)

Net Profit 3,105.67 1,270.46

Balance of Profit from Previous Year 6,833.23 6,167.51

9,938.90 7,437.97

Add/(Less): Tax Refunds and Excess

Provisions net of prior year items 2.58 0.43

Profit available for appropriation 9,941.48 7,438.40

APPROPRIATIONS:

Proposed dividend on Equity Shares 814.78 232.79

Tax on above dividend 132.18 38.66

Debenture Redemption Reserve 399.42 206.22

Transfer to General Reserve 311.00 127.50

Surplus retained in Profit &

Loss Account 8,284.10 6,833.23

2. DIVIDEND:

Your Directors recommend a Dividend of Rs 3.50 per equity share of Rs 2/- each (175%) for the year ended March 31, 2011.

3. CONSOLIDATED FINANCIAL STATEMENTS:

Consolidated Financial Statements in accordance with Accounting Standard-21 issued by The Institute of Chartered Accountants of India have been provided in the Annual Report. These Consolidated Financial Reports provide financial information about your Company and its subsidiaries as a single economic entity. The Consolidated Financial Statements form part of this Annual Report.

4. MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT:

Management’s Discussion and Analysis Report (MD&A) for the year under review, as stipulated under clause 49 of the listing agreement with stock exchanges in India, is presented in a separate section forming part of the Annual Report.

In line with its aspiration of ongoing growth, the Company has entered into various Joint Ventures / Alliances as elaborately dealt with in MD&A.

5. SUBSIDIARIES:

The Company has 18 subsidiaries of which 13 are overseas and 5 are in India. A summary of their performance is given elsewhere in the Annual Report.

In view of the unprecedented downturn in the automotive sectors across the globe, during year 2010-11, the Company had carried the process of restructuring and rightsizing the operations of its wholly owned subsidiaries to adopt for lower market volumes. This along with improvement in market conditions has resulted in turnaround of operations of overseas subsidiaries and they have achieved overall breakeven performance for the calendar year 2010. Company’s initiatives in capital goods sector and EPC activities are in start up phase and will be fully operational by 2013.

As a part of such restructuring program, operations and assets of Bharat Forge Scottish Stampings Ltd. (BFSSL), subsidiary of the Company active in the European markets, were transferred to other group companies in Bharat Forge Group. Hence, the accounts of BFSSL have not been prepared under ‘going concern’ basis.

The Auditors of Bharat Forge America Inc. (BFA), subsidiary of the Company, active in the North American markets, have, without qualifying their reports, expressed a possibility about BFA’s inability to continue as going concern due to market conditions in North America. BFA has implemented various measures to improve the performance, which include achievement of considerable saving in wage cost following negotiations with Union, new business initiatives with widening customer base and product portfolio, a very tight control on costs etc. It is expected that these steps, along with the support provided by the Company would enable BFA to revive the operations. Hence, the accounts of BFA have been prepared on the ‘going concern’ basis.

A significant portion of the consolidated revenues is generated by the subsidiary companies. Detailed analysis of the working of the subsidiary companies appears in the Management Discussion and Analysis.

6. SUBSIDIARY COMPANIES ACCOUNTS:

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

Accordingly, Company has not attached to the Balance Sheet, the copies of the Balance Sheets, Profit and Loss Accounts, Directors’ Reports and Auditors’ Reports and other documents required to be attached under Section 212(1) of the Act of its subsidiary companies, namely:

Foreign Subsidiaries:

i) CDP Bharat Forge GmbH, Germany,

ii) Bharat Forge Holding GmbH, Germany

iii) Bharat Forge Aluminiumtechnik GmbH & Co. KG, Germany

iv) Bharat Forge Aluminiumtechnik Verwaltungs GmbH & Co. KG, Germany

v) Bharat Forge Daun GmbH, Germany

vi) Bharat Forge America Inc., U.S.A.

vii) Bharat Forge Beteiligungs, GmbH, Germany

viii) Bharat Forge Kilsta AB, Sweden

ix) Bharat Forge Scottish Stampings Ltd., Scotland

x) Bharat Forge Hong Kong Ltd. (Formerly, Lucrest Limited), Hong Kong

xi) FAW Bharat Forge (Changchun) Company Ltd., China

xii) BF New Technologies GmbH, Germany and

xiii) Bharat Forge International Ltd., UK

Indian Subsidiaries:

xiv) BF-NTPC Energy Systems Ltd.

xv) Kalyani ALSTOM Power Ltd.

xvi) BF Infrastructure Ltd.

xvii) BF Infrastructure Ventures Ltd. and

xviii)BF Power Equipment Ltd.

A gist of the financial performance of the subsidiaries is given in this Annual Report.

7. CAPACITY EXPANSION AND NON-AUTO BUSINESS:

Members are aware of the expansion plans undertaken at Company’s factories at Mundhwa, Baramati and Satara. Current status of implementation is as under:

A. BARAMATI:

80 M-T counterblow hammer for production is fully established. Order inflow is satisfactory.

Machining line for upto 3 meter long crankshaft is also fully operational. Capacity is now being expanded to take care of growing market requirements.

First line of medium duty crankshaft machining in Baramati is now fully productionized. Additional investment of Rs 150 crore is being made in expanding machining line further for crankshaft machining.

Ring Rolling Mill is also now fully operational and has become a supplier of critical rings for different customers specially for Gear Box manufacturers.

B. MUNDHWA / SATARA:

New vertical heat treatment facility for manufacture of Turbine and Generator Rotors alongwith thermo stability test facility was commissioned. With the help of machining facilities installed at Satara, the Company is now supplying Turbine and Generator Rotors in fully machined condition.

8. FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs):

A. CONVERSION OF FCCBs:

On April 9, 2010, holders of 1,250 FCCBs (Tranche 2) of US $ 1,000 each have exercised to convert the same into equity shares. In consequence of the above, 142,045 equity shares of Rs 2/- each were issued and allotted by the Company and the same have been listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited and Pune Stock Exchange Limited effective from May 10, 2010, May 3, 2010 and May 4, 2010 respectively.

B. REDEMPTION:

FCCBs (Tranche 1 & Tranche 2) aggregating US $ 131,487,592.50 (includes principal of US $ 102,250.00 and redemption premium of US $ 29,237,592.50) were redeemed on April 20, 2010, in terms of Offering Circular dated April 15, 2005.

In 2005, the Company had issued the said FCCBs, optionally convertible into GDRs / Equity Shares, in 2 tranches aggregating US $ 120 million mainly to finance capital expenditure and global acquisitions. Out of FCCBs of US $ 120 million, US $ 17.750 million were converted into GDRs / Equity Shares during the tenure of FCCBs.

9. QIP ISSUE:

Pursuant to authorization given by the members by postal ballot on February 27, 2010, the QIP Committee of Directors, issued and allotted the following securities on April 28, 2010:

- 10,000,000 equity shares of Rs 2/- each, at a price of Rs 272/- per equity share for an aggregate amount of Rs 2,720,000,000 (inclusive of premium).

- 6,500,000 warrants at a price of Rs 2/- per warrant for an aggregate amount of Rs 13,000,000. Every warrant is exchangeable for 1 equity share of Rs 2/- each of the Company, at any time within a period of 3 years from the date of its allotment i.e. on or before April 28, 2013, at a warrant exercise price of Rs 272/- per equity share.

- 1,760 Non-Convertible Debentures of face value of Rs 1,000,000/- each at a coupon rate of 10.75% per annum for an aggregate amount of Rs 1,760,000,000.

Above equity shares and warrants are listed on Bombay Stock Exchange Ltd., National Stock Exchange of India Ltd. and Pune Stock Exchange Ltd.

As a result of the above, the paid up capital of the Company has increased by 10,000,000 equity shares and now stands at 232,794,316 equity shares of Rs 2/- each.

Non-convertible Debentures are listed on Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd.

The proceeds of the QIP issue will be utilized for long term funding requirements and any other uses as may be permissible under applicable law.

10. TERM DEPOSITS:

As on March 31, 2011, 26 Depositors having deposits aggregating to Rs 350,000 did not collect the amounts due. However, as of May 24, 2011, 2 deposits aggregating to Rs 30,000 were transferred to Investor Education and Protection Fund (IEPF) as per requirements of law. Presently, the Company does not accept/renew deposits.

11. PARTICULARS OF EMPLOYEES:

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors’ Report. However, having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Directors’ Report and Accounts are being sent to the shareholders and others entitled thereto excluding the statement giving particulars of employees under Section 217(2A) of the Act.

Any shareholder interested in obtaining such particulars, may write to the Company Secretary at the Registered Office of the Company.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as required to be disclosed pursuant to the provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, forming part of the Report is also annexed hereto.

13. DIRECTORS:

In terms of provisions of the Companies Act, 1956 and the Articles of Association of the Company, Dr. Uwe Loos, Mrs. Lalita D. Gupte, Mr. Alan Spencer, Mr. Sunil Kumar Chaturvedi and Mr. B.P. Kalyani, Directors of the Company, retire by rotation and, being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

14. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the accounts for the financial year ended March 31, 2011, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011 and of the profit of the Company for the year under review;

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors had prepared the annual accounts for financial year ended March 31, 2011 on a ‘going concern’ basis.

15. AUDITORS AND AUDITORS’ REPORT:

M/s. Dalal & Shah, Chartered Accountants, Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received letter from M/s. Dalal & Shah, Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956, and that they are not disqualified for such appointment within the meaning of Section 226 of the Companies Act, 1956.

The observations and comments given by Auditors in this Report read together with notes to Accounts are self explanatory and hence do not call for any further comments under Section 217 of the Companies Act, 1956.

16. CORPORATE GOVERNANCE:

The Company has adopted the "Corporate Governance Policies and Code of Conduct" which has set out the systems, processes and policy conforming to international standards. The report of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of the Annual Report.

A Certificate from the Auditors of the Company M/s. Dalal & Shah, Chartered Accountants, confirming compliance with conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is attached to this Report.

17. ACKNOWLEDGEMENT:

Your Directors would like to express their sincere appreciation of the positive co-operation received from the Central Government and the Government of Maharashtra, Financial Institutions and the Bankers. The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executive, officers, workers and staff of the Company resulting in the successful performance of the Copmpany during the year.

The Directors express their special thanks to MR. B.N. KALYANI, Chairman & Managing Director, for his untiring efforts for the progress of the Company.

For and on behalf of the

Board of Directors

B.N. KALYANI

Mumbai: May 24, 2011 Chairman & Managing Director


Mar 31, 2010

The Directors have pleasure in presenting the Forty-Ninth Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2010.

1. PERFORMANCE OF THE COMPANY:

a) Total Income (on stand-alone basis):

2009-10 2008-09 % Decrease

Rs. 18 887 million Rs. 21 063 million 10%

During the year under review, the total income of the Company was Rs. 18 887 million (Rs. 21 063 million) representing decrease of 10%.

b) Exports Revenue (on stand-alone basis):

2009-10 2008-09 2007- 08 2006-07

Rs. 7 109 Rs. 10 024 Rs. 9 610 Rs. 7 513 million million million million

During the year under review, Exports turnover of the Company was Rs. 7 109 million, decrease of 29% over previous year (Rs. 10 024 million).

Over the review period, major global economies continued to face challenges on various fronts and federal governments introduced measures to revive economic activity across sectors. The Company with signifi cant exposure to the overseas automobile markets through exports and overseas operations was adversely impacted. Capacities of the overseas operations were severely underutilized during the year resulting in poor performance on many parameters. The Indian automotive industry recovered swiftly and posted quarter on quarter improvements during the year. This helped the company in posting reasonable results despite the weakness in export markets.

The Company has been able to successfully develop and validate many new programs. During the year, new business awards have been achieved on both the auto as well as the non-auto business fronts.

c) Financials: (On stand-alone basis):

(Rs. in Million)

Current Previous Year Year Profi t for the year before Taxation & Exceptional item 1 807.17 1 576.65 Provision for Taxation:

Current including Wealth Tax & FBT 603.30 55.20

- Deferred (66.59) 488.60

Net Profi t 1 270.46 1 032.85

Balance of Profi t from Previous Year 6 167.51 5 570.29

7 437.97 6 603.14 Add/(Less): Tax Refunds and Excess Provisions net of prior year items 0.43 (29.04)

Profi t available for appropriation 7 438.40 6 574.10

APPROPRIATIONS:

Proposed dividend on Equity Shares 232.79 222.65

Tax on above dividend 38.66 37.84

Debenture Redemption Reserve 206.22 26.10

Transfer to General Reserve 127.50 120.00

Surplus retained in Profi t & Loss Account 6 833.23 6 167.51

2. DIVIDEND:

Your Directors recommend a Dividend of Re. 1/- per equity share of Rs. 2/- each (50%) for the year ended March 31, 2010.

3. CONSOLIDATED FINANCIAL STATEMENTS:

Consolidated Financial Statements in accordance with Accounting Standard-21 issued by The Institute of Chartered Accountants of India have been provided in the Annual Report. These Consolidated Financial Reports provide fi nancial information about your Company and its subsidiaries as a single economic entity. The Consolidated Financial Statements form part of this Annual Report.

4. SUBSIDIARIES:

The Company has 14 subsidiaries of which 12 are overseas and 2 are in India. A summary of their performance is given elsewhere in the Annual Report.

In view of the unprecedented downturn in the automotive sectors across the globe, during year 2009-10, the Company has carried the process of restructuring and rightsizing the operations of its wholly owned subsidiaries to adopt for lower market volumes. The Company has incurred substantial cost for such rightsizing exercise which has affected the performance of the Company on consolidated basis. The primary objective behind such restructuring and rightsizing is to achieve a lower ‘breakeven threshold’ and thus achieve profi tability in Company’s Subsidiaries at lower capacity utilizations.

As a part of such restructuring programme, operations and assets of Bharat Forge Scottish Stampings Limited (BFSSL), subsidiary of the Company active in the European markets, are being transferred to other group companies in Bharat Forge Group. Hence, the accounts of BFSSL have been prepared not under going concern.

The auditors of Bharat Forge America Inc. (BFA), subsidiary of the Company, active in the North American markets, have, without qualifying their reports, expressed a possibility about BFA’s inability to continue as going concern due to market conditions in North America. BFA has implemented various measures to adapt itself to lower volumes, which include a signifi cant headcount reduction, a very tight control on costs, development of new products and an effi cient working capital management. It is expected that these steps, along with the support provided by the Company would enable BFA to survive the present downturn. Hence, the accounts of BFA have been prepared on the ‘going concern’ basis.

A signifi cant portion of the consolidated revenues are generated by the subsidiary companies. Detailed analysis of the working of the subsidiary companies appears in the Management Discussion and Analysis.

5. SUBSIDIARY COMPANIES ACCOUNTS:

The Company has received approvals of the Central Government under Section 212(8) of the Companies Act, 1956, vide their letter Nos.47/72/2010 – CL - III dated April 8, 2010 and 47/72/2010 – CL - III dated April 22, 2010 which exempts the Company from attaching to the Balance Sheet, the copies of the Balance Sheets, Profi t and Loss Accounts, Directors’ Reports and Auditors’ Reports and other documents required to be attached under section 212(1) of the Act of its subsidiary companies, namely:

i) CDP Bharat Forge GmbH, Germany,

ii) Bharat Forge Holding GmbH, Germany

iii) Bharat Forge Aluminiumtechnik GmbH & Co. K.G., Germany

iv) Bharat Forge Aluminiumtechnik Verwaltungs GmbH & Co. K.G., Germany

v) Bharat Forge Daun GmbH, Germany

vi) Bharat Forge America Inc., U.S.A.

vii) Bharat Forge Beteiligungs, GmbH, Germany

viii) Bharat Forge Kilsta AB, Sweden

ix) Bharat Forge Scottish Stampings Ltd., Scotland

x) Bharat Forge Hong Kong Limited (Formerly, Lucrest Limited), Hong Kong

xi) FAW Bharat Forge (Changchun) Company Limited, China

xii) BF New Technologies GmbH, Germany

xiii) BF-NTPC Energy Systems Ltd. India

xiv) Kalyani ALSTOM Power Ltd. (w.e.f. February 5, 2010) India

Accordingly, the said documents are not being attached to the Financial Statements of the Company. A gist of the fi nancial performance of the subsidiaries is given in this Annual Report. The annual accounts of the subsidiary companies are open for inspection by any member/investor and the Company will make available these documents/details upon request by any member/investor of the Company/ subsidiaries of the Company interested in obtaining the same.

6. CAPACITY EXPANSION AND NON-AUTO BUSINESS:

Members are aware of the Expansion Plans underway at Company’s factories at Mundhwa, Baramati and Satara. Current status of implementation is as under:

A. BARAMATI

The new state-of-the-art 80 Mtr-T counterblow hammer for production of heavy forgings for large diesel engines and aerospace applications as well as Machining line for heavy duty started operations from March 2009. Order infl ow is satisfactory and the production is being ramped up as planned.

The Company has completed installation of a ring rolling mill capable of rolling rings upto 4.5 meter diameter and 500 mm height, along with its Blanking Press. The Company has already secured orders from wind turbine and large gear box manufacturers from both global and Indian OEMs for this facility.

B. MUNDHWA/SATARA

The new state-of-art 4 000T Open Die Forging press was commissioned in August, 2008 and now is fully operational.

7. JOINT VENTURES

A. JOINT VENTURE WITH NTPC:

The Company has incorporated a joint venture (JV) company, BF-NTPC Energy Systems Limited (BFNESL), with a 51% equity interest held by the Company and balance held by NTPC Limited for the manufacture of critical items of Balance of Plants and other equipment for which India still remains dependent on imports. BFNESL is fi nalizing product range which includes high pressure pumps, large castings and high pressure pipings for supercritical and ultra supercritical thermal power plants as well as nuclear power plants, oil and gas, petrochemicals, steel and mining sectors. The JV Company has acquired a 100 acre land at Solapur in Maharashtra, to set-up its fi rst manufacturing facility. BFNESL plans to start ground activities by the third quarter of the current fi nancial year.

B. JOINT VENTURES WITH ALSTOM:

The Company has set up two JV companies in partnership with ALSTOM Power Holdings S.A. for manufacturing sub-critical and supercritical thermal power plant equipment. The two JV companies named ALSTOM Bharat Forge Power Limited and Kalyani ALSTOM Power Limited will manufacture turbine and generators for power plants in the 300- 800 MW range and auxiliaries like heat exchangers, condensers and deaeraters, respectively. They will have a total installed capacity of 5 000 MW of equipment per annum. Company holds 49% equity interest in ALSTOM Bharat Forge Power Limited, and 51% equity interest in Kalyani ALSTOM Power Limited. Their state-of-the-art manufacturing facilities are coming up on a 120 acre land within the SEZ adjacent to Mundra Port in Gujarat

The facilities are slated to become ready in phases beginning fi rst quarter of 2012.

The JV companies have already started bidding for equipment opportunities in large supercritical power plants coming up in India.

C. JOINT VENTURE WITH AREVA:

The Company has entered into Preliminary Joint Venture and Shareholders’ Agreement with AREVA NP, France, to create a manufacturing facility for heavy forgings and castings for the power sector particularly Nuclear Power segment and other heavy industries in India. AREVA is a Worldwide leader in the nuclear power activities, including the design, manufacture and supply of nuclear power plants, components and fuel to customers all over the World.

Manufacture of non-automotive forgings, including for power sector applications, is a major growth area for the Company. In order to meet the strong energy needs in India and given the exciting opportunities emerging in the country’s nuclear power sector, Bharat Forge and AREVA are partnering in the JV. Availability of heavy forgings is a major constraint for global manufacturers of equipment in the energy sector. The JV would secure supply of heavy forgings, especially stainless steel forgings to the customers. Heavy forgings manufactured by the JV would primarily meet indigenous requirements of power generation sector, including manufacture of turbines, generator rotors, steel plant rolls etc. and also of new nuclear power plants in the country.

Bharat Forge and AREVA are presently evaluating various locations in India to set up the new facility. The JV will have a state-of-the-art 12000 Ton open die forging press with associated equipment and an integrated steel making facility.

8. FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)

A. CONVERSION OF FCCBs:

On April 9, 2010, 142 045 equity shares of Rs. 2/- each were issued and allotted upon conversion of 1 250 FCCBs (Tranche 2) of US $ 1 000 each in accordance with shareholders’ resolution passed on March 30, 2005.

B. REDEMPTION:

FCCBs (Tranche 1 & Tranche 2) aggregating US $ 131 487 592.50 (includes principal of US $ 102 250.00 and redemption premium of US $ 29 237 592.50) were redeemed on April 20, 2010, in terms of Offering circular dated April 15, 2005.

In 2005, the Company had issued the said FCCBs, optionally convertible into GDRs / Equity shares, in 2 tranches aggregating US $ 120 million mainly to fi nance capital expenditure and global acquisitions. Out of FCCBs of US $ 120 Million, US $ 17.750 million were converted into GDRs / Equity shares during the tenure of FCCBs.

9. ISSUE OF NON-CONVERTIBLE DEBENTURES :

10.75% Secured Redeemable Non-convertible Debentures of Rs. 350 crore issued on September 22, 2009 were listed on Bombay Stock Exchange Ltd.

The proceeds of NCD issue are to be utilized for normal capital expenditure, general corporate purposes and long term working capital requirement.

10. QIP ISSUE:

Pursuant to authorization given by the members by passing a resolution by postal ballot on February 27, 2010, the QIP committee of Directors, issued and allotted on April 28, 2010, the following securities:

10 000 000 equity shares of Rs. 2/- each, at a price of Rs. 272/- per equity share for an aggregate amount of Rs. 2 720 000 000/- (inclusive of premium).

6 500 000 Warrants at a price of Rs. 2/- per warrant for an aggregate amount of Rs. 13 000 000/-. Every warrant is exchangeable for 1 equity share of Rs. 2/- each of the Company, at any time within a period of 3 years from April 29, 2010 at a warrant exercise price of Rs. 272/- each per equity share.

1 760 Non-Convertible Debentures of face value of Rs. 1 000 000/- each at a coupon rate of 10.75% per annum for an aggregate amount of Rs. 1 760 000 000/-.

Above equity shares and warrants are listed on Bombay Stock Exchange Limited, National Stock Exchange of India Limited and Pune Stock Exchange Limited.

Non-convertible Debentures are listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

The proceeds of the QIP issue will be utilized for long term funding requirements, and any other uses as may be permissible under applicable law.

11. TERM DEPOSITS:

As on March 31, 2010, 29 Depositors having deposits aggregating to Rs. 400 000/- did not collect the amounts due. None of the deposit amount was repaid to the Depositors / transferred to Investor Education and Protection Fund during the year. Presently, the Company does not accept/renew the deposits.

12. PARTICULARS OF EMPLOYEES:

Information as per Section 217(2A) of the Companies Act, 1956 (the Act), read with Companies (Particulars of Employees) Rules, 1975, forms part of this Report. As per the provisions of Section 219(1)(b)(iv) of the Act, the Directors’ Report and Accounts are being sent to the shareholders excluding the statement giving particulars of employees under Section 217(2A) of the Act.

Any shareholder interested in obtaining a copy of the statement, may write to the Company Secretary at the registered offi ce of the Company.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The additional information required under the provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, and forming part of the Report is also annexed hereto.

14. DIRECTORS:

Mr. V. K. Jairath, who was appointed as additional Director on 24th July, 2009 resigned on 22nd February, 2010. The Directors place on record their sincere appreciation of the very useful contributions made by him during his association with the Company.

Mr. Naresh Narad, who was appointed as additional Director on 24th July, 2009 hold offi ce till the ensuing Annual General Meeting. A notice proposing appointment of Mr. Narad as Director having been received, the matter is included in the Notice for the ensuing Annual General Meeting.

Dr. T. Mukherjee, who was appointed as additional Director on 23rd January,

2010 hold offi ce till the ensuing Annual General Meeting. A notice proposing appointment of Dr. Mukherjee as Director having been received, the matter is included in the Notice for the ensuing Annual General Meeting.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. G. K. Agarwal, Mr. P. C. Bhalerao, Mr. P. G. Pawar and Mr. S.D. Kulkarni, Directors of the Company, retire by rotation and, being eligible, they offer themselves for re-appointment.

The Ministry of Company Affairs, Govt. of India, has in terms of letter No. SRN No. A-70987086-CL VII dated 21st January 2010, granted its approval u/s 259 of Companies Act, 1956, to increase the total number of Directors of the Company from 17 to 19.

15. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors’ Responsibility Statement, your Directors confi rm that:

(i) in the preparation of the accounts for the fi nancial year ended March 31, 2010; the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) accounting policies selected have been applied consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the fi nancial year and of the profi t of the Company for the year under review;

(iii) proper and suffi cient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and;

(iv) the annual accounts had been prepared on a ‘going concern’ basis.

16. AUDITORS:

You are requested to re-appoint Auditors for the current year to hold the offi ce from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting.

Your Directors wish to place on record their appreciation of the positive co- operation received from the Central Government and the Government of Maharashtra, Financial Institutions and the Bankers. The Directors also wish to place on record their thanks to all employees of the Company for their unstinted efforts during the year.

The Directors express their special thanks to MR. B. N. KALYANI, Chairman and Managing Director, for his untiring efforts for the progress of the Company.

For and on behalf of the Board of Directors

B. N. KALYANI Mumbai: May 22, 2010 Chairman and Managing Director