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Directors Report of M M Forgings Ltd.

Mar 31, 2022

1. financial results for the year ended 31st MARCH 2022 ( C in lakhs)

Particulars

2021-22

2020-21

1.1

Forging sales

1,08,798.03

71,146.74

1.2

Profit before exceptional items/ extraordinary items and Tax

13,289.40

5,493.05

1.3

Exceptional/Extraordinary Items

0.13

0.03

1.4

Profit Before Tax

13,289.53

5,493.08

1.5

Tax

For current year

2,599.52

725.00

Relating to previous years

84.55

0.00

Deferred Tax / MAT Credit

1,429.48

4,113.55

107.36

832.36

Profit after Tax

9,175.99

4,660.72

2. dividend and financial results ( C in lakhs)

2.1

Profit after Tax

9,175.99

4,660.72

2.2

Balance in P & L Account

121.17

115.54

2.3

Profit available for appropriation

9,297.16

4,776.28

2.4

Transfer to General Reserve

7,725.00

3,200.00

2.5

Proposed Dividend

1,448.45

1,455.09

2.6

Balance carried forward

123.71

121.17

The Directors declared 60% dividend ( C 6/- per share ) of face value of C 10/- each, in their meeting held on 25th May 2022.

The Directors do not recommend any final dividend for the year 2021-22.

3. SHARE CAPITAL

There was no change in the share capital during the year.

4. HIGHLIGHTS OF THE Company’s OPERATIONAL PERFORMANCE

4.1 The Company has overall Revenue, of above C1100 crores.

4.2 The Company’s PBT is C 132.89 crores.

4.3 The Company‘s PAT stands at C 91.76 crores.

4.4 The Company continues to be a net foreign exchange earner. The net foreign exchange earnings during the current year were C 476.66 crores.

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

4.6 Export sales is C 541 crores and the domestic sales stands at C 547 crores.

4.7 The Company has declared an interim dividend of 60 % dividend for the year.

5. INDIAN ACCOUNTING STANDARD ( IND AS) IFRS CONVERGED STANDARDS

Pursuant to the notification of the Companies (Indian Accounting Standard) Rules, 2015 by the Ministry of Corporate Affairs (MCA) on 16 February 2015, the Company has adopted Indian Accounting standards (IND AS).

6. EXPENSES MADE MORE THAN 10 % OF THE TURNOVER

Raw Material - C 522.81 Crores (46.55 %)

Personnel - C 112.73 Crores (10.04 %)

7. MANAGEMENT DISCUSSION AND ANALYSIS Economic Overview - Global

The onset and subsequent drawn out war in eastern Europe has thrown commodity prices high, further dampening prospects of global economic recovery.

War-induced commodity price increases and broadening price pressures have led to 2022 inflation projections of 5.7% in advanced economies and 8.7% in emerging market and developing economies -1.8% and 2.8% points higher than projected last January. Multilateral efforts to respond to the humanitarian crisis, preventing further economic fragmentation, maintaining global liquidity, manageing debt distress, tackleing climate change, and an end to the pandemic are essential.

2021

2022

2023*

World output

6.1

3.6

3.3

Advanced Economies

5.2

3.3

2.4

Emerging Markets

6.8

3.8

4.4

India

8.9

8.2

6.9

* Projection || Source: World Economic Outlook || IMF

Global growth is projected to slow from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023. This is 0.8 and 0.2 percentage points lower for 2022 and 2023 than projected in January. Beyond 2023, global growth is forecasted to decline to about 3.3 percent over the medium term.

It has been two years since COVID-19 was declared as a global pandemic with terrible loss of lives and livelihoods. Adaptation to life with pandemic induced restriction has enabled the global economy to perform reasonably well despite overall subdued mobility, leading to a stronger-than-anticipated rebound, on average, across regions.

After the near-term, widespread availability of vaccines and near-normalization of economic activity, together with continued policy support, should help fuel the manufacturing recovery. Further normalization of global capital expenditure will be an important source of demand for manufacturing.

MANAGEMENT DISCUSSION AND ANALYSIS Economic Overview - India

With Covid-19 largely behind, the Indian economy faces strong inherent growth momentum which is likely to be tempered by inflation, the consequent rise in interest rates and the risk of demand dampening.

Notwithstanding headwinds, globally, the Indian economy is projected to have the strongest growth in GDP in 2022 and also in 2023!

The phased unlocking of the economy with government intervention eased manufacturing and supply chains. Many sectors of the economy re-bounded in FY22. The third wave of the pandemic which lasted between Dec21 through Feb22 did not dent the momentum. The recovery cycle picked up from the second half of FY22 and is expected to grow further in FY23 and FY24. It may moderate from FY25 onwards. The IMF has upwardly revised the growth forecast to 8.2% for FY22 and 6.9% for FY23. This is the highest GDP growth rate in the world!

India’s GDP, which shrank from $2.87 trillion in FY20 to $2.66 trillion in the FY21, is expected to rise to about $5 trillion in FY27 or FY28. The latest forecast hints that the target of $5 trillion may fructify with a minimum delay of four years.

FY22 saw an unprecedented rally in domestic steel prices which seemed unstoppable even in the current fiscal FY23. Steel prices have increased by almost 30% year on year. Further increases are expected in FY23. There is also anticipation that the government would take structural measures to cool down the steel market in India.

Market segments outlook: Key segment analysis: Commercial Vehicles (CV)

The CV segment plays a significant role of MMF with sales of 82%. Passenger car segment constitutes 11% and others 7%.

CV segment is poised to witness a robust turnaround domestically. It is also expected to do well in North America and Europe. US class 8 truck sales recorded significant numbers in Apr 2021 (440,000) and in Apr 2022 (390,000).

The European market has witnessed consistent demand through the years in excess of 300,000 HCV for the last 3 calendar years. However the prospects of continued war in eastern Europe is expected to dampen these economies. Real GDP growth rate is 5.9% for 2021 and 1.6% in 2022 and is expected to be 1.9% in 2023 and 2.2% in 2024.

In India, MHCV production which peaked in FY19 at 444,000 vehicles has tapered to 234,000 vehicles in FY20,161,000 in FY21 and 241,000 in FY22. In FY23 MHCV production is expected to grow significantly to 400,000 units.

Currency movement: [USD vs INR]

The INR which is near record lows at C 77.56 per USD is expected to be under continued pressure.

M M FORGINGS - Achievements in FY22

The following were achieved during FY22, despite the second and third wave of pandemic:

Domestic sales

C 547 crore

Export sales

C 541 crore

Total sales

C 1088 crore

Overall sales around

C 1123 crore

Production tonnage

61,200 Tons

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

We are focusing on launching new products to take advantage of the forging capacities created in the last 4 years. We are also de-bottlenecking to take advantage of the growth in established products

Key Financial Ratios:

Debtors Turnover

118 days

Inventory Turnover

5.46

Interest Coverage Ratio

7.39

Current Ratio

1.90

Debt Equity Ratio

0.75

Operating Profit Margin (%)

11.76 %

Net Profit Margin (%)

8.17 %

As highlighted in the Directors’ Report, Return on Net Worth (on PAT) is 17.31% and Return on Capital Employed is 16.21%. Total Outside Liabilities to Net Worth stands at 1.41.

Human Resources and Industrial Relations

1. Our Company continues to focus on the development of its human resources to improve its performance. As on 31st Mar 2022, the Company currently has approximately 3703 employees. It is their invaluable contribution that has primarily resulted in our Company’s position of strength in the industry.

2. 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, characterize the HR development of Hunan Resourses of the Company.

Every year, each plant of the Company celebrates Founder’s Day in a family atmosphere with all employees and their households. This practice has been hampered on account of COVID-19. We expect to restart this in the coming months.

3. Health, Safety and Environment

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, periodic reviews of practices and training, play a vital role in maintaining safety standards.

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

Risk Management

1. 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.

2. 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.

3. The war in eastern Europe poses significant risk in global geopolitical stability

4. Further, the consequent inflation in commodity prices, hike in interest rates and prospect of significant demand reduction are risks to be considered in the coming months.

5. 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.

6. Risk Management Committee (RMC) has been formed w.e.f 21 Jun 21.

7. RMC shall meet twice a year.

8. The responsibilities of RMC includes formulating risk management policy, implementation of the policy, monitor, evaluate risks, device appropriate methodology, processes and systems.

M M FORGINGS - forging ahead with Manufacturing Excellence

Our goals in the coming months:

1. Focus on improving sales in keeping with market conditions.

2. Utilizing the production capacity of 1,00,000 Tons.

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

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

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

6. Reduce the impact on the environment.

Sources:

• IMF World Economic Output

• The Economist

• SIAM data

8. TRANSFER TO RESERVE

A sum of C 77.25 Crores has been transfered to General Reserve.

9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has made advance to the tune of C 83.52 Crores to its Subsidiary Company, DVS Industries Private Limited, repayable at prevailing rates. The details of the investments made by the Company are given in the notes to the financial statements.

10. DIRECTORS

Smt. Sumita Vidyashankar was appointed in the Board on 13 August 2021 as an Additional Director. Her appointment was regularised in the Annual General Meeting held on 13 September 2021.

11. RETIRE BY ROTATION

Shri. K. Venkatramanan (DIN 00823317) will retire by rotation and being eligible has offered himself for re-appointment.

12. DETAILS OF DIRECTORS OR KMP RESIGNED DURING THE YEAR - NIL

13. BOARD AND COMMITTEE MEETING DATES

Details are provided in Annexure III of this Report.

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

15. RISK MANAGEMENT

Your Company has implemented a mechanism for risk management and has formulated a Risk Management Policy. The Policy provides for identification of risks and mitigation measures. The Audit Committee is informed on the risk assessment and minimizations mechanism adopted by the Company.

The Company has formed Risk Management Committee, which consist of majority of Board Members.

16. RELATED PARTY TRANSACTION

The Company has formulated a policy on related party transactions and the same is uploaded on the Company’s website:

https: //www.mmforgings.com/uploads/policies/Policy_on_Related_Party_Transactions.pdf

Related Party transactions during the financial year 2021-22 is shown in Annexure III to the Directors’ Report, under the head “Disclosures”.

There are no ‘Material’ contracts or arrangement or transactions at arm’s length basis.

There are no materially significant Related Party transactions made by the Company with Promoters, Directors, and Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.

For related party transactions as per Accounting Standards, refer Notes on Accounts.

17. 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.

Amount to be spent under CSR for F22 - C 147.26 lakhs

Amount spent in F22 - C 173.94 lakhs

Excess spent for F22 - C 26.68 lakhs

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

18. POLICY ON DIRECTORS’APPOINTMENT AND REMUNERATION

In terms of provision of section 178 of the Companies Act, 2013 read with Rules prescribed, a policy for the Directors, KMP and other employees has been adopted by the Board of Directors of the Company, which analyzes the criteria for determining qualifications, positive attributes and independence of a Director.

The said policy is provided in Company’s website as below:

https://www.mmfbrgings.com/uploads/policies/Nomination_and_Remuneration_Policy_f_

amended).pdf

19. PARTICULARS OF EMPLOYEES

The information required under the rules prescribed, has been given in the annexure appended hereto and forms part of this report.

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

20.1 The ratio of remuneration of each Director to the median remuneration of the employees:

Name

Ratio

Shri Srinivasan N

0.00

1

Shri Vaidyanathan V

1.65

1

Shri Gopalakrishnan A

1.65

1

Smt Kavitha Vijay

1.65

1

Smt Sumita Vidyashankar

1.65

1

Shri Vidyashankar Krishnan

287

1

Shri K. Venkatramanan

287

1

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

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

Name

Increase %

Shri Srinivasan N

125.00%

Shri Vaidyanathan V

4.69%

Shri Gopalakrishnan A

50.00%

Smt Kavitha Vijay

24.82%

Smt Sumita Vidyashankar

100.00%

Shri Vidyashankar Krishnan

132.84%

Shri K. Venkatramanan

133.26%

Smt J. Sumathi

14.24%

Shri R. Venkatakrishnan

11.14%

20.3 Percentage increase in median remuneration of employees is 45.30% in the financial year 2021-22.

20.4 The number of permanent employees on the rolls of Company: 2159.

20.5 Explanation of relationship between average increase in remuneration and Company performance: PAT - (last year) C 4,660.72 Lakhs; PAT - (this year) - C 9,175.99 Lakhs. Increase 98.45% against which, the average increase in remuneration is 45.30%

20.6 Comparison of remuneration of each KMP against performance of Company

Name

Designation

CTC in D

% of Increase

PAT

D in Lakhs

% in PAT

Vidyashankar Krishnan

CEO

6,95,29,262

132.84

J.Sumathi

Company Secretary

11,32,900

14.24

9175.99

98.45

R.Venkatakrishnan

CFO

17,14,036

11.14

20.7 Variation in market cap/net worth of Company:

Date

Paid up Capital

(Shares)

Closing market Price per share

in C

EPS

PE

Ratio

Market

Capitalisation

C in Crores

31.03.2021

24140800

495.00

19.31

25.63

1,194.97

31.03.2022

24140800

846.75

38.01

22.28

2,044.12

20.8 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 36.90%.

Average Increase in Remuneration for KMP and Senior Management is 127.10%.

20.9 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.

20.10 Ratio of remuneration of highest paid Director to other employees who get remuneration more than highest paid Director - NOT APPLICABLE.

20.11 Is remuneration as per remuneration policy of the Company: YES.

21 SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATIONS OR

COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND

Company’S OPERATIONS IN FUTURE:

Not applicable.

22 MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE

FINANCIAL POSITION OF THE Company WHICH HAS OCCURRED SINCE

31.03.2022 TILL THE DATE OF THE REPORT:

NIL

23 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:

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

23.2 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 as at 31st March 2022 and of the profit or loss of the Company for that period ended on that date;

23.3 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;

23.4 The Directors had prepared the annual accounts on a going concern basis.

23.5 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.

23.6 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.

24 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 at https: //www.mmforgings.com/uploads/policies/Whistle_Blower_ Policy2.pdf.

A high level Committee has been constituted to look into the complaints. The Committee reports to the Audit Committee and the Board.

25 ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company had laid down Internal Financial Controls and such internal financial controls are adequate with reference to the Financial Statements and were operating effectively.

It also ensures the orderly efficient conduct of its business, including adherence to Company’s policies, the safe guarding of its assets, the prevention and detention of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information during the year, such controls were tested and no material weakness in the operations were observed.

26 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 III.

27 ANNUAL RETURN

In accordance with the Companies Act, 2013, the annual return in the prescribed format is available at https: //www.mmforgings.com/uploads/general_share/AnnualReturn.pdf

28 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;

28.1 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.

28.2 Independent Directors at a meeting without anyone from the non-independent Directors and management, considered/evaluated the Board’s performance, performance of the Chairman and other non-independent Directors. Their meeting was held on 17 November 2021.

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

28.4.1. Observations of Board evaluation carried out for the year: The main inputs received from the Directors, covering various aspects of the Boards functioning was with regard to adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Non Independent Directors and Top Managerial Personnel were carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.

28.4.2 Previous year’s observations and actions taken - NIL

28.4.3 Proposed actions based on current year observations - NIL

29 FAMILIARISATION OF PROGRAMME ARRANGED FOR INDEPENDENTDIRECTORS

• M M Forgings Limited has put in place a system to familiarise independent Directors about 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 time to time.

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

• You may also view the Company website: https://www.mmforgings.com/uploads/ Familiarisation_programme/Familiarization_programme1.pdf

30 AUDITORS:

M/s G R N K & Co., Chartered Accountants (FRN 016847S) will be retiring in the ensuing

Annual General Meeting. M/s Ramesh Kumar & Co., Chartered Accountants, will be appointed

as Auditors for a period of 5 years from this forthcoming Annual General Meeting.

There is no audit qualification, reservation or adverse remark for the year under review.

Brief profile of M/s . Ramesh Kumar & Co.:

Partners: G.Ramesh Kumar FCA and S.Sridhar FCA

1. Statutory / Internal Audit of more than 50 Limited Companies, MSME,Trust, including Trust running Educational Institutions, branches of public sector banks.

2. services for acquisition, mergers/ demergers.

3. Preparation ofProject Feasibility Reports for Term Loan from All India Financial Institutions - IDBI/ IFCI/TFCI/ State Financial Institutions/ banks. Income Tax representations and Appeal of more than 600 families.

31. SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act, 2013 and Rules thereunder, the Company has appointed V.Shankar, Practicing Company Secretary (C.P. No. 12974) as the Secretarial Auditor for the financial year 2022-23.

32. COST AUDITOR

Pursuant to the provisions contained in Rule 14 of the Companies ( Audit and Auditors) Rules, 2014, Shri. S. Hariharan ( CP No. 20864) has been appointed as Cost Auditor for the financial year 2022-23.

33. SUBSIDIARY COMPANIES33.1 DVS INDUSTRIES PRIVATE LIMITED

DVS Industries achieved a turnover of C 66.01 Crores in FY22 located in Pantnagar, Uttarakhand. DVS Industries is well equipped with precision equipment, in-house tool room inspection facilities, well trained personnel, etc.

33.2 CAFOMA AUTOPARTS PRIVATE LIMITED

The Company acquired Cafoma Autoparts Pvt. Ltd. for C33 Crores, including subordinated debt of C5 Crore on 15th October 2021. It is now a wholly owned subsidiary of MM Forgings Ltd. and is engaged in machining. Cafoma achieved a turnover of C 9.12 Crores (in FY22) of crankshafts.

33.3 SUVARCHAS VIDYUT PRIVATE LIMITED

SUVARCHAS VIDYUT PRIVATE LIMITED was incorporated as a wholly owned subsidiary of the Company on 31st March 2022. There were no activities in this year. Authorised Share Capital : C 5,00,00,000/- (Rupees Five Crores Only)

Paid-Up Share Capital : C 1,00,00,000 (Rupees One Crore Only)

Turnover : New Company / not yet started operations.

Object : It is a start-up Company to produce electrical and

electronic components and subassemblies for industrial, consumer, and automotive applications.

34 EXPLANATION TO AUDITOR’S REMARK

There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and Company Secretary in practice in their reports respectively. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.

35. SAFETY

Employees have been encouraged to adhere to safety in all their activities in and out of the Company premises. Safety training at all levels have been provided by the Company.

36. DEPOSITS:

The Company does not have any deposits nor accepts any fresh deposits.

37. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:

Disclosures as per requirements of Section 134 (3) of the Companies Act, 2013, read with the Companies (Accounts)) Rules, 2014 with respect to Energy Conservation, Technology Absorption, Research & Development and Foreign Exchange Earnings / Outgo are given in Annexure

38. 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.

39. 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.

Disclosures in relation to the Sexual Harassment of Women in work place:

No. of complaints filed during the year - 0

No of complaints disposed of during the year - 0

No of complaints pending as on the end of the financial year - 0

40. COVID 19

The Company is following Covid-19 guidelines, rules and regulations issued by Central and State governments. During the second wave (Delta Variant) in May to July of 2021, your company contributed a total of C 132.78 Lakhs towards the Covid effort, largely by building, bolstering and augmenting the availablity of oxygen to hospitals - both private and public.

41. BUSINESS RESPONSIBILITY REPORT

The Report is attached to this Report. (Annexure 5)

42. INDEPENDENT DIRECTOR SELF ASSESSMENT TEST

• Shri. N. Srinivasan and Shri. V. Vaidyanathan are exempted from undergoing selfassessment test.

• Shri A. Gopalakrishnan and Smt. Kavitha Vijay have passed the self-assessment test conducted by the Ministry of Corporate Affairs.

43. ACKNOWLEDGEMENT:

Your Directors would like to express their gratitude for the cooperation and continued assistance received from DBS Bank, State Bank of India, HDFC Bank, Federal Bank, ICICI Bank and Standard Chartered Bank.

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 and divine grace.

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

For and On behalf of the Board Vidyashankar Krishnan

Place: Chennai Chairman of the Meeting

Date: 25 May 2022 (DIN 00081441)


Mar 31, 2018

1. FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2018

(Rs. in Lakhs)

2017-18

2016-17

1.1.

Forging Sales

60091.09

46042.66

1.2.

Profit before exceptional items/ extraordinary items and Tax

8191.36

5514.16

1.3

Exceptional/Extraordinary Items

17.21

0.25

1.4

Profit Before Tax

8208.57

5514.41

1.5

Tax

For current year

1500.00

1176.86

Relating to previous years

-

80.91

Deferred Tax

(323.35)

293.21

MAT credit entitlement

181.19

1357.84

(378.81)

1172.19

Profit After Tax

6850.73

4342.22

The Directors commend the employees for their commitment and contribution.

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

2017-18

2016-17

2.1.

Profit After Tax

6850.73

4342.22

2.2.

Balance in P & L Account

244.71

244.20

2.3.

Profit available for appropriation

7095.44

4586.42

2.4.

Transfer to General Reserve

5400.00

3500.00

2.5.

Interim Dividend paid

701.43

841.71

2.6

Proposed Dividend

701.43

-

2.7.

Balance carried forward

292.58

244.71

The Directors had declared a second Interim Dividend of 50% - Rs.5/- per share of face value of Rs.10/- each on 28 May 2018. The Directors earlier declared first Interim Dividend of Rs.5/- per share and the same was paid on 11 December 2017. With this, the total Dividend for the year ended 31, March 2018, will aggregate to Rs.10/- per share. The Directors do not recommend any final dividend for the year 2017-18.

3. HIGHLIGHTS OF THE COMPANY’S OPERATIONAL PERFORMANCE

3.1 The company continues to be one of the largest exporter of forgings from South India and has received 26 consecutive Annual Awards from The engineering Exports Promotion Council since 1989.

3.2 The company has crossed the Rs.200 Crore mark for the first time in domestic sales, Rs.350 Crore mark in export sales and Rs.600 Crore mark in overall sales.

3.3 The Company continues to be a net foreign exchange earner. The net foreign exchange earnings during the current year were Rs.277.30 crores.

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

3.5 The capital expenditure during the year was Rs.100.90 Crores. Forgings and Machining capacity has been substantially increased in line with customer demand. The company also produces Green energy in its Solar and in Wind farms.

3.6 DVS Industries (P) Ltd : Your Company has acquired DVS Industries (P) Ltd.

4. INDIAN ACCOUNTING STANDARD ( IND AS) IFRS CONVERGED STANDARDS

Pursuant to the notification of the Companies (Indian Accounting Standard) Rules, 2015 by the Ministry of Corporate Affairs ( MCA) on 16 February 2015, the company has adopted Indian Accounting standards (IND AS)

5. EXPENSES MADE MORE THAN 10 % OF THE TURNOVER

Raw Material - Rs.285.57 crores (45.12%)

Personnel - Rs.65.28 crores (10.31%)

7. TRANSFER TO RESERVE

Transfer to General Reserve - Rs.54 Crores

8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has made advance to the tune of Rs.46.28 Crores to its Subsidiary Company, DVS Industries Private Limited, repayable at prevaling rates.

The details of the investments made by the company are given in the notes to the financial statements.

9. DIRECTORS

Both Shri Vidyashankar Krishnan, Vice Chairman and Managing Director and Shri K Venkatramanan, Jt Managing Director are being re-appointed for a period of five years with effect from 1 September 2018. The profile of Directors form part of the notice.

10. DETAILS OF DIRECTORS OR KMP RESIGNED DURING THE YEAR - NIL

11. BOARD AND COMMITTEE MEETING DATES

Details are provided in Annexure III of this Report.

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

13. RISK MANAGEMENT

Your Company has implemented a mechanism for risk management and has formulated a Risk Management Policy. The Policy provides for identification of risks and mitigation measures. The Audit Committee is informed on the risk assessment and minimizations mechanism adopted by the Company.

14. RELATED PARTY TRANSACTION

The Company has formulated a policy on related party transactions and the same is uploaded on the Company’s website.

All Related Party transactions that were entered into by the Company during the financial year 2017-18, were in compliance of Section 188 of the 2013 Act and the Rules framed thereunder. There are no “Material” contracts or arrangement or transactions at arm’s length basis.

All Related Party transactions were placed before the Audit Committee for their prior approval in accordance with the requirements of the SEBI LODR. The transactions entered into pursuant to such approval are placed periodically before the Audit Committee for its review.

There are no materially significant Related Party transactions made by the Company with Promoters, Directors, and Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.

For related party transactions, refer Annexure 3, under the head ‘Disclosures’

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.

Your Company has fulfilled its obligation towards CSR, by spending a sum of Rs.131.36 Lakhs during the year.Annual report on CSR has been provided in Annexure III of this Report.

16. POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

In terms of provision of section 178 of the Companies Act, 2013 read with Rules prescribed, a policy for the Directors, KMP and other employees has been adopted by the Board of Directors of the Company analyzing the criteria for determining qualifications, positive attributes and independence of a Director. The said Policy is given in Annexure 3 under Nomination & Remuneration Committee.

17. PARTICULARS OF EMPLOYEES

The information required under the rules prescribed, 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

4.15 : 1

Shri V. Vaidyanathan

2.21 : 1

Shri A. Gopalakrishnan

1.66 : 1

Ms. Kavitha Vijay

1.66 : 1

Shri Vidyashankar Krishnan

243.52 : 1

Vice Chairman & Managing Director (Chief Executive Officer)

Shri. K. Venkatramanan, Joint Managing Director

236.31 : 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

-

Shri V. Vaidyanathan

-

Shri A. Gopalakrishnan

5.56 %

Ms. Kavitha Vijay

-

Shri Vidyashankar Krishnan

44.39 %

Vice Chairman & Managing Director

(Chief Executive Officer)

Shri. K. Venkatramanan, Joint Managing Director

45.32 %

Smt.J.Sumathi, Company Secretary

5.17 %

Shri.R.Venkatakrishnan, CFO

10.78 %

18.3 Percentage increase in median remuneration of employees is 21.10 in the financial year 2017-18

18.4 The number of permanent employees on the rolls of Company: 1589

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

PAT - ( last year) - Rs.4342.22 Lakhs PAT - ( this year) - \Rs.6850.75 Lakhs,

Increase - 57.77 against which, the average increase in remuneration is 24 %

18.6 Comparison of remuneration of each KMP against performance of company

Name

Designation

CTC in CTC

% Increase

PAT Rs. in Lakhs

% in PAT

Vidvashankar Krishnan

CEO

44045674

44.39%

6850.75

57.77%

J.Sumathi

Company Secretary

1051310

5.17 %

R.Venkatakrishnan

CFO

1570122

10.78 %

18.7 Variation in market cap/net worth of company:

Date

Issued Capital (Shares)

Closing market Price per share in Rs.

EPS

PE Ratio

Market Capitalisation Rs. in Crores

31.03.2017

12070400

542

35.97

15.07

654.21

31.03.2018

12070400

1038

56.76

18.29

1252.90

Increase/ (Decrease)

NIL

496

20.79

3.22

598.69

% of Increase/ (Decrease)

NIL

91.51

57.80

21.37

47.78

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 2.1%

Average Increase in Remuneration for KMP and Senior Management is 42.3%

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 SIGNINFICANT MATERIAL ORDERS PASSED BY THE REGULATIONS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE: Not applicable

20 MATERAIL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURRED SINCE 31.03.2018 TILL THE DATE OF THE 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 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 as at 31 March 2018 and Profit or Loss of the Company for that period ended on that date.

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.

A high level Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board.

23 ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company had laid down Internal Financial Controls and such internal financial controls are adequate with reference to the Financial Statements and were operating effectively.

It also ensures the orderly efficient conduct of its business, including adherence to Company’s policies, the safe guarding of its assets, the prevention and detention of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information during the year, such controls were tested and bi-material weakness in the operations were observed.

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 ANNUALRETURN

An extract of Annual Return as on 31 March 2018 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 the Board’s performance, performance of the Chairman and other non-independent Directors. Their meeting was held on 14 November 2017.

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

4. i) Observations of board evaluation carried out for the year:

The main inputs received from the Directors, covering various aspects of the Board’ functioning was with regard to adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Non Independent Directors and Top Managerial Personnel were carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process

ii) Previous year’s observations and actions taken- NIL

iii) Proposed actions based on current year observations . NIL

27 FAMILIARISATION OF 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.

- 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.

- You may also view the company website www.mmforgings.com in this regard.

28 AUDITORS:

G R N K & Co., Chartered Accountant (FRN 016847S) have been appointed as the Statutory Auditors of the Company in the 71st Annual General Meeting held on 26 September 2017. They will hold office for a period of five years

29. SECRETARIAL AUDIT REPORT

Pursuant to the requirements of the Companies Act, 2013, the Company has appointed V.Shankar, Practicing Company Secretary (C.P. No. 12974 ) as the Secretarial Auditor for the financial year 2017-18 whose report of 28 May 2018 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 (CP No. 20864) has been appointed as Cost Auditor for the financial year 2018-19.

31 SUBSIDIARY COMPANY - DVS Industries Private Limited

Your company has acquired majority stake in DVS Industries Private Limited for cash consideration, who is a leading manufacturer of crank shafts, automobile crank shafts and diesel engines. This acquisition was decided in the Board Meeting held on 05 February 2018.

With this acquisition, your company will enhance synergies between it’s wide ranging capability in forgings and machining and DVS Industries long standing expertise will be an addition in machining of crankshafts.

Incorporated in 1992, DVS Industries (with the paid-up share capital currently being Rs.1,59,29,900/ and turn-over of Rs.13.17 Crores in FY 2017) is a north Indian based player with its manufacturing unit located in Pant Nagar, Uttarakhand. DVS Industries is well equipped with modern manufacturing facilities, such as sophisticated in-house tool room.

32 EXPLANATION TO AUDITOR’S REMARK

There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and Company Secretary in practice in their reports respectively. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.

33 SAFETY

Employees have been encouraged to adhere to safety in all their activities in and out of the Company premises. Safety training at all levels have been provided by the Company.

34 DEPOSITS:

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

35 ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:

Disclosures as per requirements of Section 134 (3) of the Companies Act, 2013, read with the Companies (Accounts)) Rules, 2014 with respect to Energy Conservation, Technology Absorption, Research & Development and Foreign Exchange Earnings / Outgo are given in Annexure

36 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.

37 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.

38 ACKNOWLEDGEMENT:

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

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.

Place : Chennai For and On behalf of the Board

Date : 28 May 2018 N. SRINIVASAN

Chairman


Mar 31, 2017

1. FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2017

(Rs. in Lakhs)

2016-17

2015-16

1.1.

Forging Sales

46,042.66

48,905.80

1.2.

Profit before exceptional items/ extraordinary items and Tax

5514.16

6,928.91

1.3.

Exceptional/Extraordinary Items

0.25

0.55

1.4.

Profit Before Tax

5514.16

6,929.46

1.5.

Tax

For current year

1176.86

1,725.00

Relating to previous years

80.91

52.18

Deferred Tax

293.21

143.45

Mat Credit Entitlement

(378.81)

1172.19

1,920.63

Profit After Tax

4342.22

5,008.83

The Directors commend the employees for their commitment and contribution.

2. DIVIDENDAND FINANCIAL RESULTS:

(Rs. in Lakhs)

2016-17

2015-16

2.1.

Profit After Tax

4342.22

5,008.83

2.2.

Balance in P & L Account

244.20

177.07

2.3.

Profit available for appropriation

4586.42

5,185.91

2.4.

Transfer to General Reserve

3500.00

4,100.00

2.5.

Interim Dividend paid

701.43

841.72

2.6.

Proposed Dividend

140.28

-

2.7.

Balance carried forward

244.71

244.20

The Directors had declared Two Interim Dividend of 50% - Rs.5/- per share of face value of Rs.10/- each on 11 August 2016 and 10% - Rs.1/- per share on 19 May 2017. With this, the total Dividend for the year ended 31st March 2017, will aggregate to 60% - Rs.6/- per share. The Directors do not recommend any final dividend for the year 2016-17

3. HIGHLIGHTS OF THE COMPANY’S OPERATIONAL PERFORMANCE

3.1. 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.

3.2. The Company has also crossed the Rs.150 Crore mark for the second time in domestic sales.

3.3. The Company continues to be a net foreign exchange earner. The net foreign exchange earnings during the current year were Rs.235.56 Crores.

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

3.5. The capital expenditure during the year was Rs.80.57 Crores. Forging and Machining capacity has been substantially increased in line with customer demand. The Company also produces Green Energy in its Solar and in Wind farms.

3.6. Directors retained the dividend payment to 60%.

4. Indian Accounting Standard (IND AS) IFRS Converged Standards

Pursant to the notification of the Companies (Indian Accounding Standard) Rules, 2015 by the Ministry of Corporate Affairs (MCA) on 16 February 2015, the Company has adopted Indian Accounting Standard (IND AS) with effect from 01 April 2016.

5. EXPENSES MADE MORE THAN 10% OF THE TURNOVER

Raw material - Rs.191.13 Crores (43%)

Personnel - Rs.52.86 Crores (12%)

6. TRANSFER TO RESERVE

Transfer to General Reserve - Rs.35 Crores.

7. PARTICULARS OF LOANS, GUARANTEES 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.

Shri. K. Venkatramanan has a Bachelor of Engineering Degree. He has 25 years of experience in the Company. He joined the Board as an Additional Director in this Company. He has been responsible for the tremendous growth in the sales of the Company. His accomplishments include a 10 fold increase in the export sales.

9. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL RESIGNED DURING THE YEAR - Nil

10. BOARDAND 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. RISK MANAGEMENT

Your Company has implemented a mechanism for risk management and has formulated a Risk Management Policy. The Policy provides for idendification of risks and mitigation measures. The Audit Committee is informed on the risk assessment and minimizations mechanism adopted by the Company.

13. RELATED PARTY TRANSACTION

The Company has formulated a policy on related party transactions and the same is uploaded on the Company’s website.

All Related Party transactions that were entered into by the Company during the financial year 2016-17, were in compliance of Section 188 of the 2013 Act and the Rules framed thereunder. There are no “Material” contracts or arrangement or transactions at arm’s length basis and hence disclosure in form AOC-2 is not required.

All Related Party transactions were placed before the Audit Committee for their prior approval in accordance with the requirements of the SEBI LODR. The transactions entered into pursuant to such approval are placed periodically before the Audit Committee for its review.

There are no materially significant Related Party transactions made by the Company with Promoters, Directors, and Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.

14. 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. Your company has fulfilled its obligation towards CSR by spending a sum of Rs.117.12 lakhs during the year Annual Report on CSR has been provided in Annexure III of this Report.

15. POLICY ON DIRECTORS’APPOINTMENT AND REMUNERATION

In terms of provision of Section 178 of the Companies Act, 2013 read with Rules prescribed, a policy for the Directors, KMP and other employees has been adopted by the Board of Directors of the Company analysing the criteria for determining qualifications, positive attributes and independence of a Director. The said policy is given in Annexure 3 under Nomination & Remuneration Committee.

16. PARTICULARS OF EMPLOYEES

The information required under the Rules prescribed, has been given as annexure appended hereto and forms part of this Report.

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

17.1 The ratio of remuneration of each Director to the median remuneration of the employees:

Name

Ratio

Shri. N. Srinivasan

3.80:1

Shri. V. Vaidyanathan

2.03:1

Shri. A. Gopalakrishnan

1.52:1

Smt. Kavitha Vijay

1.52:1

Shri. Vidyashankar Krishnan, Vice Chairman and Managing Director

155:1

Shri. K. Venkatramanan, Joint Managing Director

149:1

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

considered as remuneration

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

Name

% Increase

Shri. N. Srinivasan

0.81 %

Shri. V. Vaidyanathan

-5.75 %

Shri. A. Gopalakrishnan

-2.57 %

Smt. Kavitha Vijay

2.13 %

Shri. Vidyashankar Krishnan, Vice Chairman and Managing Director

-18.75 %

Shri. K. Venkatramanan, Joint Managing Director

-19.23 %

Smt.J.Sumathi

5.40 %

Shri.R.Venkatakrishnan

6.50 %

17.3 Percentage increase in median remuneration of employees is 8.3% in the financial year 2016-17.

17.4 The number of permanent employees on the rolls of Company: 1357

17.5 Explanation of relationship between average increase in remuneration and company performance PAT - (last year) - Rs.5008.83 Lakhs PAT - (this year) - Rs.4342.22 Lakhs, Decrease - 13.31 % against which, the average decrease in remuneration is 4%.

17.6 Comparison of remuneration of each KMP against performance of company

Name

Designation

CTC in CTC

% Increase

PAT Rs. in Lakhs

% in PAT

Vidyashankar Krishnan

CEO

30503724

-18.75%

J.Sumathi

Company Secretary

999650

5.40 %

4342.22

-13.31%

R.Venkatakrishnan

CFO

1417386

6.50 %

17.7 Variation in market cap/net worth of company:

Date

Issued Capital (Shares)

Closing market Price per share in Rs.

EPS

PE Ratio

Market Capitalisation Rs. in Crores

31.03.2016

12070400

443

41.50

10.67

534.72

31.03.2017

12070400

542

35.97

15.07

654.21

Increase/(Decrease)

NIL

99

(5.53)

4.40

19.49

% of Increase / (Decrease)

NIL

18.26

(13.32)

29.20

18.26

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

Average decrease in Remuneration for employees other than Directors and KMP is 0.80%

Average decrease in Remuneration for KMP and Senior Management is 18.99 %

17.9 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

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

17.11 Is remuneration as per remuneration policy of the Company: YES

18. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATIONS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUSAND COMPANY’S OPERATIONS IN FUTURE

Not applicable

19. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURED SINCE 31.03.2017 TILL THE DATE OF THIS REPORT:

Not applicable

20. 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 -

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

20.2 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 as at 31 March 2017 and of the profit or loss of the company for that period ended on that date;

20.3 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;

20.4 The Directors had prepared the annual accounts on a going concern basis.

20.5 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.

20.6 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;

21. 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.

22. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

The Company had laid down Internal Financial Controls and such internal financial controls are adequate with reference to the Financial Statements and were operating effectively.

It also ensures the orderly efficient conduct of its business, including adherence to Company’s policies, the safe guarding of its assets, the prevention and detention of frauds and errors, the accuracy and completements of the accounting records and the timely preparation of reliable financial information’s during the year, such controls were tested and bi-material weakness in the design or operations were observed.

23. 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.

24. ANNUAL RETURN

An extract of Annual Return as on 31 March 2017 pursuant to Section 92 (3) of the Companies Act, 2013 and forming part of the report is attached separately.

25. A STATEMENT INDICATING THE MANNER IN WHICH FORMALANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEE 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 the matters relating to the Board’s performance, performance of the Chairman and other non-independent Directors Their meeting was held on 15 February 2017.

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

26. 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.

- 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 time-to-time.

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

27. STATUTORY AUDITORS:

As per Section 139 (2 ) of the Companies Act 2013 and Rules prescribed thereunder, the term of the present Auditor G. Ramesh Kumar & Co. expires from the date of the ensuing Annual General Meeting. The Board of Directors place on record their appreciation for the service rendered by M/s. G. Ramesh Kumar & Co during their tenure as Statutory Auditors of the Company.

GRNK & CO ( FRN 016847S) is recommended by the Board to be appointed as Statutory Auditor of the Company, for the approval of members in the ensuing Annual General Meeting till the conclusion of the fifth consecutive Annual General Meeting in the year 2022 (subject to the ratification by members at every Annual General Meeting). Certificate from proposed Auditors has been received to the effect that their appointment, if made, would be within the limits prescribed under section 139 of the Companies Act, 2013.

A short profile of G R. Naresh Kumar, the proposed Auditor:

Name : G. R. Naresh Kumar, FCA, CISA

Firm Name : GRNK & CO FRN : 016847S

Mem No: 215577

Address : 26/5, Akila Lands, Ganapathy Colony, South, Thiruvanaikoil Post, Trichy - 620005.

Mission Statement:

To be recognized by the stakeholders of the company as a valuable associate by independently and objectively providing information, analysis and counsel to assist management in fulfilling their responsibility and ensuring operations are managed ethically, effectively and efficiently.

Brief Profile:

Practicing Chartered Accountant with more than a decade experience in Statutory Audits, Internal Audits, Management Consulting, Business Process Reengineering, IT Consulting, Systems Audit, ERP Consulting, Income Tax practice and Internal financial controls audit.

28. SECRETARIAL AUDIT REPORT

Pursuant to the requirements of the Companies Act, 2013, the Company has appointed. V. Shankar, Practicing Company Secretaries ( C.P. No.12974 ) as the Secretarial Auditor for FY 2017 whose report of 19 May 2017 is attached separately to this report.

29. COSTAUDIT:

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 2017-18.

30. EXPLANATION TO AUDITOR’S REMARKS

There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and Company Secretary in practice in their reports respectively. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.

31. SAFETY

Employees have been encouraged to adhere to safety in all their activities in and out of the Company premises. Safety training at all levels have been provided by the Company.

32. DEPOSITS

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

33. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:

Disclosures as per requirements of Section 134 (3 ) ( m) of Companies act 2013, read with the Companies (Accounts ) Rules 2014 with respect to Energy Conservation, Technology Absorption, Research & Development and Foreign Exchange Earnings / Outgo are given in Annexure.

34. 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.

35. PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT 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.

36. 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 : Chennai Vidyashankar Krishnan

Date : 19 May 2017 Chairman of this meeting

(DIN 00081441)


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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