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Directors Report of M M Forgings Ltd.

Mar 31, 2015

Dear Members,

1. FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2015

(Rs. in Lakhs) 2014-15 2013-14

1.1. Forging Sales 48,950.32 40,073.91

1.2. Profit before exceptional items/ extraordinary items and Tax 6,865.02 3,680.49

1.3. Exceptional/Extraordinary Items 1.42 161.12

1.4. Profit Before Tax 6,866.44 3,841.61

1.5. Tax

For current year 1,690.00 916.30

Relating to previous years 36.92 9.87

MAT credit entitlement (90.48)

Deferred Tax 84.70 74.00

1,811.62 909.69

Profit After Tax 5,054.82 2,931.92

Sales of forgings grew substantially by 22%. Sales Turnover crossed Rs. 500 Crores for the first time in the Company's History. The performance is quite above market conditions. The Directors commend the employees for their commitment and contribution.

2. DIVIDEND AND FINANCIAL RESULTS: (Rs. in Lakhs)

2014-15 2013 -14

2.1. Profit After Tax 5,054.82 2,931.92

2.2. Balance in P & L Account 463.97 493.19

2.3. Profit available for appropriation 5,518.76 3,425.11

2.4. Transfer to General Reserve 4,500.00 2,400.00

2.5. Interim Dividend paid 420.86 280.57

2.6. Interim Dividend inclusive of taxes 420.86 280.57

2.7. Balance carried forward 177.07 463.97

The Directors had declared a second Interim Dividend of 30% - Rs. 3/- per share of face value of Rs. 10/- each on 18th May 2015. The Directors earlier declared first Interim Dividend of Rs. 3/- per share and the same was paid on 11 November 2014. With this, the total Dividend for the year ended 31st March 2015, will aggregate to Rs. 6/- per share. The Directors do not recommend any final dividend for the year 2014 - 2015.

3. HIGHLIGHTS OF THE COMPANY'S OPERATIONAL PERFORMANCE

3.1. Sales Turnover of the Company crossed Rs. 500 Crores for the first time in the Company's History.

3.2. Exports at Rs. 350.59 Crores accounting for 72% of Company's Sales. The Company has crossed the Rs. 350 Crore mark for the first time in export sales. The Company continues to be one of the largest exporter of forgings from India and has received 25 consecutive Annual Awards from The Engineering Exports Promotion Council since 1989.

3.3. The Company has also crossed the Rs. 100 Crore mark for the first time in domestic sales.

3.4. The Company continues to be a net foreign exchange earner. The net foreign exchange earnings during the current year were Rs. 308.91 Crores.

3.5. The Company has retained its ISO 9001 and TS 16949 Certification for its Quality Management.

3.6. The capital expenditure during the year was Rs. 61.15 Crores. Machining capacity has been substantially increased in line with customer demand. The Company also produces Green Energy in its Solar and in Wind farms.

3.7. The Directors increased the Dividend by 20% over previous year and declared 60%.

4. EXPENSES MADE MORE THAN 10 % OF THE TURNOVER

Raw Material - 211.84 crores (42%)

6. TRANSFER TO RESERVE

Transfer to General Reserve - Rs. 4500 lakhs

7. PARTICULARS OF LOANS, GURANTEES OR INVESTMENTS UNDER SECTION 186 Not applicable

8. DIRECTORS

8.1 Shri. K. Venkatramanan, Director retires by rotation and being eligible, offers himself for reappointment.

8.2 DEATILS OF DIRECTORS OR KEY MANAGEMENT PERSONNEL APPOINTED DURING THE YEAR

In compliance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a Woman Director has to be inducted in the Board of Directors of the Company, with effect from 01 April 2015. Hence, the Board appointed Smt. Kavitha Vijay ( DIN 01047261), an advocate, as an Additional, Non - Executive, Independent Director on the Board of Directors with effect from 01 April 2015, by way of Circular Resolution. The term of additional directorship terminates as on the date of this Annual General Meeting. The Board recommends the appointment of Smt Kavitha Vijay, as an Independent Director for a period of 5 years.

9. DEATILS OF DIRECTORS OR KEY MANAGEMENT PERSONNEL RESIGNED DURING THE YEAR - NIL

10. BOARD AND COMMITTEE MEETING DATES

Details are provided in Annexure III of this Report.

11. DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOT ACCEPTED BY THE BOARD ALONG WITH REASONS - None

12. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the transactions with related parties are in the ordinary course of business and on arm's length basis; and there are no material contracts or arrangement or transactions at arm's length basis. Such transactions done in the ordinary course of business has been specified in the Notes on accounts

13. POLICY ON RELATED PARTY TRANSACTION

The Company has a policy on Related Party Transaction and the same has been displayed on the Company's website

14. NOMINATION AND REMUNERATION POLICY

A Board level Committee of Nomination and Remuneration Committee has been constituted and the Board had adopted Nomination and Remuneration Policy. Human Resources Policy of the Company considers Human Resources as its valuable asset.

15. CORPORATE SOCIAL RESPONSIBILITY

A Board Level Committee of CSR has been constituted and the Board has adopted a CSR Policy as recommended by the Committee. The thrust areas of CSR Policy are Eradicating Hunger and Poverty, Education, Combating Diseases and Social Business Projects.

Annual Report on CSR has been provided in Annexure III of this Report.

16. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

* The Board shall have minimum 3 and maximum 15 directors, unless otherwise approved.

* No person of age less than 21 years shall be appointed as a director on the Board.

* The Company shall have such person on the Board who complies with the requirements of the Companies Act, 2013, Provisions of the Listing Agreement, Memorandum of Association and Articles of Association of the Bank and all other statutory provisions and guidelines as may be applicable from time to time.

* Composition of the Board shall be in compliance with the requirements of Clause 49 of the Listing Agreement of the Stock Exchanges.

* Majority of the Directors shall have specialised knowledge/experience in the areas like Agriculture, Banking, SSI, Legal, Risk Management, Accountancy, Finance, Windmill, manufacturing of forgings etc.

* Except for the Vice Chairman and Managing Director and the Joint Managing Director, no other directors are paid remuneration, but are paid only sitting fees and Commission subject to the ceiling provided in the Companies Act, 2013.

* Vice Chairman and Managing Director / CEO, Company Secretary and Chief Financial Officer shall be the Key Managerial Personnel (KMPs) of the Company.

* All persons who are Directors / KMPs, members of Senior Management and all other employees shall abide by the Code of Conduct. Directors/KMPs shall not acquire any disqualification and shall be persons of sound integrity and honesty, apart from knowledge, experience, etc. in their respective fields.

17. PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 and the rules made there under, as amended, has been given in the annexure appended hereto and forms part of this report.

18. PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES :

18.1 The ratio of remuneration of each director to the median remuneration of the employees:

Name Ratio

Shri. N. Srinivasan 2.84 : 1

Shri V. Vaidyanathan 1.51 : 1

Shri A. Gopalakrishnan 1.14 : 1

Shri Vidyashankar Krishnan 126.47 : 1

Vice Chairman and Managing Director (Chief Executive Officer)

Shri. K. Venkatramanan, Joint Managing Director 123.22 : 1

For this purpose, sitting fees paid to the Directors have not been considered as remuneration

18.2 Percentage increase in remuneration of each Director, KMP, in the financial year:

Name % Increase

Shri. N. Srinivasan 7.1%

Shri V. Vaidyanathan 14.3%

Shri A. Gopalakrishnan 20.0%

Shri Vidyashankar Krishnan 90.0%

Vice Chairman and Managing Director (Chief Executive Officer)

Shri. K. Venkatramanan, Joint Managing Director 92.0%

Smt.J.Sumathi 11.4%

Shri.R.Venkatakrishnan 11.2%

18.3 Percentage increase in median remuneration of employees : 18.0%

18.3 The number of permanent employees on the rolls of Company: 1353

18.5 Explanation of relationship between average increase in remuneration and company performance

PAT - ( last year) - Rs. 2931.92 Lakhs PAT - ( this year) - Rs. 5054.82 Lakhs, Increase - 72.4% against which, the average increase in remuneration is 24.90 %.

18.6 Comparison of remuneration of each KMP against performance of company

Name Designation CTC %increase in CTC

Vidyashankar CEO 36888975 82.0% Krishnan

J.Sumathi Company Secretary 866400 11.4%

R.Venkatakrishnan CFO 1220148 11.2%

Name PAT % in PAT Rs. Lakhs

Vidyashankar 5054.82 72.4% Krishnan

J.Sumathi 5054.82 72.4%

R.Venkatakrishnan 5054.82 72.4%

18.7 Variation in market cap/net worth of company:

Date Issued Capital Closing EPS (Shares) Market Price per share in Rs.

31.03.2014 12070400 119 24.29

31.03.2015 12070400 678 41.88

Increase/ NIL 559 17.59 (Decrease)

% of Increase/ NIL 470% 72% (Decrease)

Date PE Ratio Market Capitali- sation Rs. in crores

31.03.2014 4.90 143.64

31.03.2015 16.19 818.37

Increase/ 11.29 674.73 (Decrease)

% of Increase/ 43.39% 470% (Decrease)

18.8 Justification of increase in managerial remuneration with that of increase in remuneration of other employees.

Average Increase in Remuneration for employees other than Directors and KMP is 18%

Average Increase in Remuneration for KMP and Senior Management is 11.39%

18.9 Key parameters for any variable remuneration of directors:

Directors are paid Commission. However, the overall managerial remuneration payable is subject to the provisions of the Companies Act, 2013

18.10 Ratio of remuneration of highest paid director to other employees who gets remuneration more than highest paid director. - NOT APPLICABLE

18.11 Is remuneration is as per remuneration policy of the Company: YES

19 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATIONS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

Not applicable

20 MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURED SINCE 31.03.2015 TILL THE DATE OF THIS REPORT:

Not applicable

21 DIRECTORS RESPONSIBILITY STATEMENT:

The Directors have fulfilled their responsibility for the preparation of the accompanying financial statements by taking all reasonable steps to ensure that -

21.1 In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

21.2 The directors have 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 at the end of the financial year and of the profit or loss of the company for that period;

21.3 The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

21.4 The directors had prepared the annual accounts on a going concern basis.

21.5 The Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

21.6 The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

22 ESTABLISHMENT OF VIGIL MECHANISM

The Company has in place a vigil mechanism pursuant to which a Whistle Blower Policy has been in vogue . The Whistle Blower Policy covering all employees and directors is hosted on the Company's website.

23 ADEQUACY OF INTERNAL FINANCIAL CONTROL

Company has a process to continuously monitor the existing controls and identify gaps, if any. It implements new / improved controls wherever the effect of such gaps would have a material effect on the Company's operation.

24 CORPORATE GOVERNANCE REPORT

The guidelines evolved by SEBI were applicable to the company. The company is committed to ethical management and excellence in performance. Details are provided in Annexure 3.

25 ANNUAL RETURN

An extract of Annual Return as on 31 March 2015 pursuant to Section 92 ( 3) of the Companies Act, 2013 and forming part of the report is attached separately.

26 A STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS;

1. Nomination and Remuneration Committee of the Board had prepared and sent through its Chairman draft parameterized feed back forms for evaluation of the Board, Independent Directors and Chairman.

2. Independent Directors at a meeting without anyone from the non-independent directors and management, considered/evaluated. Their meeting was held on 20 October 2014 the Board's performance, performance of the Chairman and other non-independent Directors.

3. The Board subsequently evaluated performance of the Board, the Committees and Independent Directors (without participation of the relevant director)

27 FAMILIARISATION PROGRAMME ARRANGED FOR INDEPENDENT DIRECTORS

* M M Forgings Limited has put in place a system to familiarise the independent directors about the company, its products, business and the on-going events relating to the company, its products, business and the on-going events relating to the Company.

* Independent Directors of the Company are made aware of their role, responsibilities and liabilities at the time of their appointment / re-appointment , through a formal letter of appointment, which also stipulates various terms and conditions of their engagement.

* They are also made aware of Company's Board and Board Committee framework, policies and procedures.

* As part of Board Discussions, presentations on business of the Company are made to the directors from time to time.

* Important announcements and press releases for various news related to the company are forwarded to the directors from the time - to time.

* Each member of the Board, including the independent directors, have been given complete access to any information relating to the Company.

28 AUDITORS:

The retiring auditors of the Company, G. Ramesh Kumar & Co., Chartered Accountants, Tiruchirapalli being eligible, offer themselves for reappointment.

29 SECRETARIAL AUDIT REPORT

Pursuant to the requirements of the Companies Act, 2013, the Company has appointed M/s S. Dhanapal & Associates, Practicing Company Secretaries ( C.P. No. 7028 ) as the Secretarial Auditor for FY 2015 whose report of 18 May 2015 is attached separately to this report.

30 COST AUDITOR

Pursuant to the provisions contained in Rule 14 of the Companies (Audit and Auditors) Rules, 2014 Shri. S. Hariharan (C.P. No. 20864) has been appointed as Cost Auditor for the financial year 2015-16.

31 EXPLANATION TO AUDITOR'S REMARKS

Not applicable

32 SEEL- Subsidiary Company

Srivatsa Electric and Electronic Limited - The final Order for dissolution of the Company has been received from the High Court, Chennai.

33 DEPOSITS:

The Company does not have any deposits. Fresh deposits are not being accepted by the Company.

34 ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:

Disclosures as per requirements of Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in report of the Board of Directors) Rules, 1988 with respect to Energy Conservation, Technology Absorption, Research & Development and Foreign Exchange Earnings / Outgo are given in Annexure

35 DECLARATION GIVEN BY INDEPENDENT DIRECTORS:

All the Independent Directors have given the necessary declarations to the Company as required under sub section (6) of Section 149 of the Companies Act, 2013.

36 PROHIBITION AND REDRESSAL OF SEXUAL HARRASSMENT OF WOMEN AT WORK PLACE

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 effect from 09 December 2013, the Company has framed a Policy on Prevention of Sexual Harassment at Workplace. There were no cases reported during the year under review under the said Policy.

37 ACKNOWLEDGEMENT:

Your Directors would like to express their gratitude for the cooperation and continued assistance received from Citibank N.A., DBS bank, State Bank of India and State Bank of Travancore.

Your Directors wish to record their appreciation for the exemplary services rendered by the employees of the company. The results achieved would not have been possible but for their outstanding effort.

Above all the Directors thank the shareholders for their continued confidence in the management.

For and On behalf of the Board

Place : Kodaikanal N. SRINIVASAN Date : 18-May-2015 Chairman


Mar 31, 2014

1. FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2013

(in Lakhs)

2013-14 2012 -13

1.1. Forging Sales 40,073.91 35,023.65

1.2. Profit before exceptional items/

extraordinary items and Tax 3,680.48 3,002.01

1.3. Exceptional/Extraordinary Items 161.11 -

1.4. Profit Before Tax 3,841.59 3,002.01

1.5. Tax

For current year 916.30 600.00

Relating to previous years 9.87 45.76

MAT credit entitlement (90.48) (153.68)

Deferred Tax 74.00 65.00

909.69 557.08

Profit After Tax 2,931.90 2,444.93

Sales of forgings grew substantially by 14.4%. The performance has been highly satisfactory. The Directors commend the employees for their commitment and contribution.

2. DIVIDEND AND FINANCIAL RESULTS: (in Lakhs)

2013 -14 2012 -13

2.1. Profit After Tax 2,931.90 2,444.93

2.2. Balance in P & L Account 493.18 669.10

2.3. Profit available for appropriation 3,425.08 3,114.03

2.4. Transfer to General Reserve 2,400.00 2,200.00

2.5. Interim Dividend paid 280.57 -

2.6. Interim Dividend inclusive of taxes 280.57 420.85

2.7. Balance carried forward 463.94 493.18

The Directors had declared a second Interim Dividend of 20% - Rs. 2.00 per share of face value of Rs. 10.00 each on 14th May 2014. The Directors earlier declared first Interim Dividend of Rs. 2.00 per share and the same was paid on 24th February 2014. With this, the total Dividend for the year ended 31st March 2014 is Rs. 4.00 per share as against Rs. 3.00 paid for the previous year ended 31st March 2013. The Directors do not recommend any final dividend for the year 2013 – 2014.

3. HIGHLIGHTS OF THE COMPANY''S OPERATIONAL PERFORMANCE

3.1. Sales Turnover of the Company crossed Rs. 400 Crores for the first time in the Company''s History.

3.2. Exports at Rs. 291.12 Crores accounting for 72.65% of Company''s Sales is at an all time high and has crossed the Rs. 250 Crore mark for the second time. The Company continues to be one of the largest exporter of forgings from India and has received 24 consecutive Annual Awards from The Engineering Exports Promotion Council since 1989.

3.3. The Company continues to be a net foreign exchange earner. The net foreign exchange earnings during the current year were Rs. 238.15 Crores.

3.4. The Company has retained its ISO 9001 TS 16949 Certification for its Quality Management.

3.5. The capital expenditure during the year was Rs. 53.10 Crores. Machining capacity has been substantially increased in line with customer demand.

3.6. The Directors increased the Dividend by 10% over previous year and paid 40%.

4. MANAGEMENT DISCUSSION AND ANALYSIS :

GLOBAL SCENE

4.1. The last fiscal 2013-14 saw a further firming up of equity markets from the increases of previous year. Globally, the availability of "cheap money" was a significant contributing factor for this.

4.2. USA - The US economy has shown resilience and has shown strong performance compared to its peers amongst G7 economies.

4.3. Europe – The Euro has weathered the pressures on account of the floundering economies of Portugal, Ireland, Greece and Spain (PIGS countries).

4.4. Germany along with a few countries bordering the North Sea have emerged as pillars of the European economy. Their relative prosperity forms the back bone of the efforts to keep the EU and ECU integrated. The moribund labour markets in France is a considerable risk to the very EU itself.

4.5. The rigid labour markets of Europe, absence of political union, unwillingness of the German public to bear a higher burden, significant welfare commitments, large share of government spending in the economy, etc., are some of the significant structural issues. Countries like Spain, Ireland, etc., have embarked on a journey of significant and painful structural reforms which are starting to bear fruit.

4.6. The significant challenge for European leadership is the management of structural reforms and containment of public spending without causing social turbulence.

4.7. China – the Chinese economy has maintained its growth rate of around 7.7% for 2013. A further slow- down is expected upto 2017.

4.8. Japan – Japan has benefitted from Abenomics, the radical monetary expansion, fiscal stimulus and structural reforms, promulgated by Mr.Shinzo Abe, the Prime Minister of Japan. In 2013, a real GDP growth of 1.5% has been achieved as against 1.4% in 2012.

4.9. Commodities – The Dow Jones – UBS Commodity Index has risen considerably in the last one year, signifying the impact of "cheap money".

4.10. Overall, Global output is expected to have grown around 3.3% per various economic think tanks. Across mature economies, the 2014 growth outlook has improved significantly to 2.0 percent growth in 2014, compared to 1.3 percent in 2013.

4.11. The issue of high levels of sovereign debt which most countries have run up over the last two decades, continues to be of serious concern. The next few years appear to be a consolidation phase for the global economy with growth stuck in a range of 1-2%. Getting out of high levels of sovereign debt without derailing economies into recession will be a significant conundrum.

INDIA

4.12. The Indian economy is expected to have grown by approximately 4.6% in F14 as compared to about 5% in F13.

4.13. During F14 the automotive industry posted negative growth rates of approximately 5% in the car segment and 21% in the CV segment.

4.14. Steel prices have dropped by about 6% compared to the highs of the previous year.

4.15. The INR ended the year lower by approximately 6.5%, ending the year at a level of Rs. 60.96 per USD. Please refer graph below. Further weakening of the INR is anticipated. However, if FDI inflows are strong, the pressure on the INR will be relieved.

M M FORGINGS – capitalising on favourable winds

4.16. The following were important developments witnessed during the year :

- Adding to the volume of existing parts, were the new parts which were developed in the last 2 years.

- Despite the fall in the automotive and commercial vehicle segments in India, the company has posted a growth of 14% in domestic sales by the development of new parts. Riding on the back of strong global demand, export sales grew by 15%.

- Changes in steel prices which are in line with international markets are being passed on to customers as is the industry practice.

- We are focusing on capacity utilisation, to take advantage of the production capacities created in the last 3 years.

4.17. Overall sales increased by 14.43%. As highlighted in the Directors'' Report, Return On Net Worth is 14.51% and Return On Capital Employed is 22.45%. Current Ratio is 1.41. The total outside liabilities to net worth stands at 0.87. Debt Equity Ratio is 0.25.

Human Resources and Industrial Relations

4.19. Your company continues to focus on the development of its human resources to improve its performance. The company currently has approximately 1100 employees. It is their invaluable contribution that has primarily resulted in your company''s position of strength in the industry.

4.20. Focus on a safe working atmosphere, constantly evolving systems for recognition and reward, consistent communication and imparting skills and training – all these focused on meeting customer needs, characterise the HR development of the Company.

4.21. Every year, each plant of the Company celebrates ''Founder''s Day'' in a family atmosphere with all employees and their household members.

Health, Safety and Environment

4.22. The Company follows a policy of zero tolerance towards accidents. Wherever possible, visible controls and fail-safe systems are provided to ensure prevention of accidents. Regular communication, training and periodic reviews of practices play a vital role in maintaining safety standards.

4.23. The Company ensures compliance with all pollution control regulations. Adequate pollution control equipments have been installed to treat effluents and to control air pollution.

Risk Management

4.24. The Company is a leading manufacturer of automotive components. Automotive industry is subjected to cyclical variations in performance and is very sensitive to policy changes. The market is very competitive. Prices of raw materials change based on supply and demand. Margins remain under constant pressure. Any steep reduction in off-take exposes the Company to high fixed costs.

4.25. A considerable portion of the customers of the Company are situated outside of India. Hence, demand for the Company''s product is subject to the health of the global economy.

4.26. The Company has spread its risks by increasing the geographic spread of its customer base. The Company proposes to improve capacity utilization in its existing facilities. Working capital management will receive high priority.

M M FORGINGS forging ahead

4.27. Our goals in the coming months:

- Focus on improving sales in keeping with market conditions.

- Utilise the production capacity which has been created in the last 3 years.

- Focus on cost reduction continuously and particularly on reducing energy consumption.

- Enhance IT systems with the continued development of the ERP system in place.

- Continue the evolution into green sources of energy in the coming months.

- Reduce the impact on the environment.

5. DIRECTORS

5.1 As per the provisions of the New Companies Act, 2013, the Independent Directors of the Company viz., Shri N. Srinivasan, Shri. V. Vaidyanathan and Shri. A.Gopalakrishnan are being appointed for a period of 5 years term.

5.2 Shri. Vidyashankar Krishnan, Director retires by rotation and being eligible, offers himself for reappointment.

6. DIRECTORS RESPONSIBILITY STATEMENT:

The Directors have fulfilled their responsibility for the preparation of the accompanying financial statements by taking all reasonable steps to ensure that -

6.1. In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

6.2. The Directors have 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 at the end of the financial year and of the profit or loss of the company for that period;

6.3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

6.4. The Directors have prepared the annual accounts on a going concern basis.

7. CORPORATE GOVERNANCE:

The guidelines evolved by SEBI were applicable to the company. The company is committed to ethical management and excellence in performance. Details are provided in Annexure 3.

8. AUDITORS:

The retiring auditors of the Company, G. Ramesh Kumar & Co., Chartered Accountants, Tiruchirapalli being eligible, offer themselves for reappointment.

9. PERSONNEL:

Information required to be furnished u / s 217 ( 2A) of the Companies Act, 1956, read with the Company''s (Particulars of Employees) Rules, 1975, as amended, has been annexed to this Report.

10. SUBSIDIARY COMPANY:

Srivatsa Electric & Electronic Limited - The final order pertaining to amalgamation petition is pending in High Court of Chennai.

11. DEPOSITS:

The Company does not have any deposits. Fresh deposits are not being accepted by the Company.

12. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:

Disclosures as per requirements of Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in report of the Board of Directors) Rules, 1988 with respect to Energy Conservation, Technology Absorption, Research & Development and Foreign Exchange Earnings / Outgo are given in Annexure

13. ACKNOWLEDGEMENT:

Your Directors would like to express their gratitude for the cooperation and continued assistance received from Citibank N.A., DBS bank, State Bank of India and State Bank of Travancore.

Your Directors wish to record their appreciation for the exemplary services rendered by the employees of the company. The results achieved would not have been possible but for their outstanding effort.

Above all the Directors thank the shareholders for their continued confidence in the management.

For and On behalf of the Board

Place : Kodaikanal N. SRINIVASAN

Date :14 May 2014 Chairman


Mar 31, 2013

1. FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2013

(Rs. in Lakhs)

2012-13 2011-12

1.1. Forging Sales 35,023.65 34,381.96

1.2. Profit before exceptional items/ extraordinary items and Tax 3,002.01 3,133.05

1.3. Exceptional/Extraordinary Items 724.62

1.4. Profit Before Tax 3,002.01 3,857.67

1.5. Tax

For current year 600.00 775.00

Relating to previous years 45.76 214.60

MAT credit carried forward (153.68)

Deferred Tax 65.00 192.65

Total Tax 557.08 1,182.25

1.6. Profit After Tax 2,444.93 2,675.42

Despite the slower growth in the world economy and in India, sales of forgings grew marginally by 1.9%.

Given the adverse environment and market conditions, the performance has been highly satisfactory. The Directors commend the employees for their commitment and contribution.

2. DIVIDEND AND FINANCIAL RESULTS:

(Rs.in Lakhs)

2012-13 2011-12

2.1. Profit After Tax 2,444.93 2,675.42

2.2. Balance in P & L Account 669.10 614.54

2.3. Profit available for appropriation 3,114.03 3,289.66

2.4. Transfer to General Reserve 2,200.00 2,200.00

2.5. Interim Dividend inclusive of taxes 420.85 420.85

2.6. Balance carried forward 493.18 669.15

The Directors have declared an Interim Dividend of 30% - Rs. 3/- per share of face value of Rs. 10/- each. The cost of the Interim Dividend inclusive of all taxes is Rs. 420.85 Lakhs. The Interim Dividend is already in line with the Payout Policy of the Company. The Directors, therefore, do not recommend a final Dividend.

3. HIGHLIGHTS OF THE COMPANY''S OPERATIONAL PERFORMANCE

3.1. Sales Turnover of the Company crossed Rs. 350 Crores for the first time in the history of the Company.

3.2. Exports at Rs. 253.96 Crores accounting for 72.5% of the Sales of the Company and has crossed the Rs. 250 crore mark for the first time. The Company continues to be one of the largest exporter of forgings from India and has received 23 consecutive Annual Awards from The Engineering Exports Promotion Council since 1989.

3.3. The Company continues to be a net foreign exchange earner. The net foreign exchange earnings during the current year were Rs. 209.11 Crores.

3.4. The Company has retained its ISO 9001 TS 16949 Certification for its Quality Management.

3.5. The capital expenditure during the year was Rs. 29.02 crores. Machining capacity has been substantially increased in line with customer demand.

3.6. Despite an adverse environment and difficult market conditions, the Directors have maintained the Dividend at 30%

4. DIRECTORS

5.1. Shri. V.Vaidyanathan, Director retires by rotation and being eligible, offers, himself for reappointment.

5.2. Shri. K.Venkatramanan, Director retires by rotation and being eligible, offers, himself for reappointment

5.3. Shri. N. Srinivasan , has been appointed as Chairman of the Board w.e.f. 24 October 2012.

5.4. Shri. Vidyashankar Krishnan, Managing Director has been appointed as Vice Chairman of the Board and will be designated as Vice Chairman and Managing Director w.e.f. 24 October 2012.

5.5. Shri V. Narayanan, Director, had resigned from directorship of the Company and Shri. A.Gopalakrishnan was appointed in his place as a Director appointed by way of casual vacancy with effect from 24 October 2012. The Directors record their appreciation for the valuable services rendered by Shri. V. Narayanan as a Chairman and Director, during his 20 years tenure in your Company.

6. DIRECTORS RESPONSIBILITY STATEMENT:

The Directors have fulfilled their responsibility for the preparation of the accompanying financial statements by taking all reasonable steps to ensure that -

6.1. In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

6.2. The directors have 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 at the end of the financial year and of the profit or loss of the company for that period;

6.3. The directors have 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;

6.4. The directors had prepared the annual accounts on a going concern basis.

7. CORPORATE GOVERNANCE:

The guidelines evolved by SEBI were applicable to the company. The company is committed to ethical management and excellence in performance. Details are provided in Annexure 3.

8. AUDITORS:

The retiring auditors of the Company, G. Ramesh Kumar & Co., Chartered Accountants, Tirchirapalli being eligible, offer themselves for reappointment.

9. PERSONNEL:

Information required to be furnished u / s 217 ( 2A) of the Companies Act, 1956, read with the Company''s (Particulars of Employees) Rules, 1975,as amended, has been annexed to this Report.

10. SUBSIDIARY COMPANY:

Srivatsa Electric & Electronic Limited - The final order pertaining to amalgamation petition is pending in High Court of Chennai.

11. DEPOSITS:

The Company does not have any deposits. Fresh deposits are not being accepted by the Company.

12. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:

Disclosures as per requirements of Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in report of the Board of Directors) Rules, 1988 with respect to Energy Conservation, Technology Absorption, Research & Development and Foreign Exchange Earnings / Outgo are given in Annexure

13. ACKNOWLEDGEMENT:

Your Directors would like to express their gratitude for the cooperation and continued assistance received from Citibank N.A., DBS bank, State Bank of India and State Bank of Travancore.

Your Directors wish to record their appreciation for the exemplary services rendered by the employees of the company. The results achieved would not have been possible but for their outstanding effort.

Above all the Directors thank the shareholders for their continued confidence in the management.

For and On behalf of the Board

Place : Kodaikanal N. SRINIVASAN

Date :21 May 2013 Chairman


Mar 31, 2012

1. RESULTS FOR THE YEAR ENDED 31 MARCH 2012

Sales has increased by 29.31% over the previous year. Profit Before Tax (before extraordinary item) for the current year has increased by 11%.

(Rs in Lakhs)

2011-12 2010-11

1.1 Forging Sales 34,381.96 26,589.58

1.2 Profit before exceptional items/ extraordinary items and Tax 3,133.05 2,853.64

1.3 Exceptional/Extraordinary Items 724.62 952.08

1.4 Profit Before Tax 3,857.67 3,805.72

1.5 Tax

For current year 775.00 700.00

Relating to previous years 214.60 28.91

Deferred Tax 192.65 104.08

Total Tax 1,182.25 832.99

1.6 Profit After Tax 2,675.42 2,972.73

Despite the slowdown in the world economy and in India, sales of forgings grew by 29%. However, because of higher input costs, increased financial charges, enhanced provision for depreciation and lower realisation from extraordinary items, Profit Before Tax was at the same level as last year. As shown in the table above, provision for tax was Rs 3.5 Crores more than the previous year resulting in a decline in Profit After Tax.

Given the adverse environment and market conditions, the performance has been highly satisfactory. The Directors commend the Management and all other employees for their commitment and contribution.

2. DIVIDEND AND FINANCIAL RESULTS:

(Rs in Lakhs)

2011-12 2010-11

2.1 Profit after Tax 2,675.42 2,972.73

2.2 Balance in P & L Account 614.54 64.06

2.3 Profit available for appropriation 3,289.96 3,036.79

2.4 Transfer to General Reserve 2,200.00 2,000.00

2.5 Interim Dividend inclusive of taxes 420.85 422.25

2.6 Balance carried forward 669.11 614.54

The Directors have declared an Interim Dividend of 30% - Rs 31- per share of face value of Rs 10/- each. The cost of the Interim Dividend inclusive of all taxes is Rs 420.85 Lakhs. The Interim Dividend is already in line with the Pay Out Policy of the Company. The Directors, therefore, do not recommend a final Dividend.

3. HIGHLIGHTS OF THE COMPANY'S OPERATIONAL PERFORMANCE

3.1 Sales Turnover of the Company crossed Rs 300 Crores for the first time in the Company's History.

3.2 Exports were Rs 239.07 Crores accounting for 70% of the Company's Sales. The Company continues to be one of the large exporter of forgings from India and has received 22 consecutive Annual Awards from Engineering Exports Promotion Council.

3.3 The Company continues to be a net foreign exchange earner. The net foreign exchange earnings during the current year wereRs 216.97 Crores.

3.4 The Company has retained its ISO/TS 16949 : 2009 Certification for its Quality Management.

3.5 The capital expenditure during the year was Rs66.17 crores. Machining capacity has been substantially increased in line with the changing customer demand.

3.6 Despite an adverse environmental difficult market conditions, the Directors have maintained the Dividend at 30%

4. DIRECTORS:

Shri V. Narayanan, Director retires by rotation and being eligible, offers, himself for reappointment. Shri.N.Srinivasan, Director retires by rotation and being eligible, offers, himself for reappointment.

5. DIRECTORS RESPONSIBILITY STATEMENT:

The Directors have fulfilled their responsibility for the preparation of the accompanying financial statements by taking all reasonable steps to ensure that -

5.1. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

5.2. The directors have selected such accounting policies and applied them consistently and made judgements and estimates that are 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 financial year and of the profit or loss of the company for that period;

5.3. The directors have 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;

5.4. The directors had prepared the annual accounts on a going concern basis.

6. CORPORATE GOVERNANCE:

The guidelines evolved by SEBI were applicable to the company. The company is committed to ethical management and excellence in performance. Details are provided in Annexure 3.

7. AUDITORS:

The retiring auditors of the Company, G. Ramesh Kumar & Co., Chartered Accountants, Tiruchirapalli being eligible, offer themselves for reappointment.

8. PERSONNEL / SUBSIDIARY COMPANY

8.1 Personnel : Information required to be furnished u/s 217(2A) of the Company's Act, 1956, read with the Company's (Particulars of Employees) Rules, 1975, as amended, has been annexed to this Report.

8.2 Srivatsa Electric and Electronic Limited:

The Final Order pertaining to amalgamation petition is pending with the High Court of Chennai.

9. DEPOSITS: Fresh Deposits are not being accepted by the Company.

10. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:

Disclosures as per requirements of Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in report of the Board of Directors) Rules, 1988 with respect to Energy Conservation, Technology Absorption, Research & Development and Foreign Exchange Earn- ings / Outgo are given in Annexure

11. ACKNOWLEDGEMENT:

Your Directors would like to express their gratitude for the cooperation and continued assistance received from Citibank N.A., DBS bank, State Bank of India and State Bank of Travancore.

The Directors thank all other Stakeholders for their unstinted co-operation and support.

Above all the Directors thank the shareholders for their continued confidence in the management.

For and On behalf of the Board

Place : Kodaikanal V. NARAYANAN

Date : 19 May 2012 Chairman


Mar 31, 2011

Dear Members,

1. RESULTS FOR THE YEAR ENDED 31 MARCH 2011

Total sales has increased by 68% over the previous year. Profit After Tax also increased by 195%.

(Rs. in Lakhs) 2010-11 2009-10 %

a. Forging Sales 26,589.18 15,843.96 68%

b. Profit after tax 3,075.17 1,041.66 195%

2. DIVIDEND AND FINANCIAL RESULTS:

(Rs. in Lakhs)

2010-11 2009-10

a. Profit before Tax 3,775.17 1,162.00 b. Provision for taxa tion 700.00 130.00

c. Profit After Tax 3,075.17 1,032.00

d. Deferred Tax Asset / (Liability) (104.08) 9.66

e. Balance in Profit & Loss Account previous year 64.06 234.22

f. Profit available for appropriation 3,035.15 1,275.88 g. Transfer to General Reserve 2,000.00 1,000.00 h. Interim Dividend including Dividend Tax 422.25 211.83

i. Balance carried to Balance Sheet 612.90 64.05

The Directors have decided to pay an interim dividend of Rs. 3 per share of face value of Rs.10 each. The interim dividend will absorb an amount of Rs. 422.25 lakhs. The directors do not recommend any final dividend.

4. DIRECTORS:

Shri V. Vaidyanathan, Director retires by rotation and being eligible, offers, himself for reappointment.

Shri. K.Venkatramanan, Joint Managing Director retires by rotation and being eligible, offers, himself for reappointment.

5. DIRECTORS RESPONSIBILITY STATEMENT:

The Directors have fulfilled their responsibility for the preparation of the accompanying financial statements by taking all reasonable steps to ensure that -

5.1. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

5.2. The directors have 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 at the end of the financial year and of the profit or loss of the company for that period;

5.3. The directors have 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;

5.4. The directors had prepared the annual accounts on a going concern basis.

6. CORPORATE GOVERNANCE:

The guidelines evolved by SEBI were applicable to the company from the previous financial year. The company is committed to ethical management and excellence in performance. Details are provided in Annexure 3.

7. AUDITORS:

The retiring auditors of the Company, G. Ramesh Kumar & Co., Chartered Accountants, Tiruchirapalli are eligible for, and seek reappointment.

8. OPERATIONS:

A. Sales:

The company continues to be one of the largest exporters of steel forgings in India and has received 21 consecutive annual awards from the Engineering Export Promotion Council. Export sales of the Company were Rs. 182.94 crores and account for 69% of total sales.

B. Foreign Exchange Earnings :

The company is a net foreign exchange earner. During the current year, the company's net foreign exchange earnings were Rs.144.51 Crores.

C. Quality :

The company has retained its ISO TS 16949 certification for its quality management system.

D. Personnel:

Information required to be furnished under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, has been annexed to this Report.

E. Investments:

1. Total Capital Expenditure during the year was Rs.15.43 crores.

2. Production capacity has increased from 38,000 MT to 40,000 MT

3. Machining capacity has been substantially increased in line with changing customer demand.

9. SUBSIDIARY COMPANY:

Srivatsa Electric & Electronic Limited - The final order pertaining to amalgamation petition is pending in High Court .

10. DEPOSITS : No unclaimed deposits were outstanding as at the end of the year.

11. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:

Disclosures as per requirements of Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in report of the Board of Directors) Rules, 1988 with respect to Energy Conservation, Technology Absorption, Research & Development and Foreign Exchange Earnings / Outgo are given in Annexure

12. ACKNOWLEDGEMENT:

Your Directors would like to express their gratitude for the cooperation and continued assistance received from Citibank N.A., DBS Bank, State Bank of India and State Bank of Travancore.

Your Directors wish to record their appreciation for the exemplary services rendered by the employees of the company. The results achieved would not have been possible but for their outstanding effort. Above all the Directors thank the shareholders for their continued confidence in the management.

For and On behalf of the Board V. Narayanan Chairman

Place : Chennai Date : 22 April 2011


Mar 31, 2010

The Directors are pleased to present their Report for the Year ended 31st March 2010.

1. RESULTS:

Total sales has decreased by 23% over the previous year. However, Profit After Tax has increased by 2%.

(Rs. in Lakhs ) 2009-10 2008-09

a. Gross Sales 15,843.96 20,680.96 -23%

b. Profit after tax 1,041.66 1,022.53 + 2%

2. DIVIDEND AND FINANCIAL RESULTS:

The Directors recommend a dividend payment of 15%. Taking the dividend into account the financial results are as follows :

(Ks. in Lakhs)

2009-10 2008-09

a. Profit before Tax 1162.00 1,376.26

b. Provision for taxation 130.00 275.00

c. Fringe Benefit Tax - 5.00

d Deferred Tax Asset / (Liability) 9.66 73.73

e. Profit After Tax 1041.66 1,022.53

f. Balance in Profit & loss Account previous year 234.22 223.50

g. Profit available for appropriation 1275.88 1,246.03

h. Transfer toGeneral Reserve 1000.00 800.00

i. Proposed Dividend including DividendTax 211.83 211.83

j. Balance carried to Balance Sheet 64.05 234.23

Although the operational margins have dropped for the year under review, in view of the expectations of better market conditions in the next year, the Directors recommend maintaining the dividend at 15%.

3. OPERATIONS:

A. Sales :

The company continues to be one of the largest exporters of steel forgings in India and has received 20 consecutive annual awards from the Engineering Export Promotion Council. Export sales of the Company were Rs.104.18 crores and account for 66% of total sales.

B. Foreign Exchange Earnings :

The company is a net foreign exchange earner. During the current year, the companys net foreign exchange earnings were Rs.82.37 crores after taking repayment of Rs.17.93 crores of term loans in foreign exchange.

C. Quality :

The company has retained its ISO/TS 16949 : 2009 and ISO 9001 : 2008 certification for its Quality Management System.

D. Personnel :

Information required to be furnished under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, has been annexed to this Report.

E. Investments :

1. Total Capital Expenditure during the year was Rs. 25.83 crores.

2. Production capacity has increased from 35,500 MT to 38,000 MT.

3. Machining capacity has been substantially increased in line with changing customer demand.

4. CORPORATE GOVERNANCE:

The company is committed to ethical management and excellence in performance. Details are provided in Annexure 3.

5. SUBSIDIARY COMPANY:

As required under section 212 of the Companies Act, 1956 the Audited statement of the Accounts along with the report of the Directors and the Auditors Report of the wholly owned subsidiary company, Srivatsa Electric & Electronic Limited for the year ended 31 March 2010 are annexed. An application for merger of SEEL with M M Forgings has been filed in the High Court. The case is pending.

6. DEPOSITS:

No unclaimed deposits were outstanding as at the end of the year.

7. DIRECTORS:

Shri V. Narayanan, Director retires by rotation and being eligible, offers, himself for re- appointment.

Shri N.Srinivasan, Director retires by rotation and being eligible, offers, himself for re- appointment.

8. AUDITORS:

The retiring auditors of the Company, G. Ramesh Kumar & Co., Chartered Accountants, Tiruchirapalli are eligible for, and seek reappointment.

9. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:

Disclosures as per requirements of Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in report of the Board of Directors) Rules, 1988 with respect to Energy Conservation, Technology Absorption, Research & Development and Foreign Exchange Earnings / Outgo are given in Annexure I.

10. ACKNOWLEDGEMENT:

Your Directors would like to express their gratitude for the cooperation and continued assistance received from ABN Amro Bank, Citibank N.A., State Bank of India and State Bank of Travancore.

Your Directors wish to record their appreciation for the exemplary services rendered by the employees of the company. The results achieved would not have been possible but for their outstanding effort.

Above all the Directors thank the shareholders for their continued confidence in the management.

For and On behalf of the Board

V. NARAYANAN

Chairman

Place : Kodaikanal Date : 23 May 2010

 
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