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Directors Report of Bharat Forge Ltd.

Mar 31, 2023

Your Directors have pleasure in presenting the 62nd (Sixty Second) Annual Report on the business and operations of the Company together with the audited financial statements for the Financial Year ended March 31, 2023.

1. Financial Highlights

The financial performance of the Company on a standalone and consolidated basis for the Financial Year ended March 31, 2023, as compared with the previous year is summarised below:

In '' Million

Standalone

Consolidated

Particulars

31-Mar-23

31-Mar-22

31-Mar-23

31-Mar-22

Total Income

77,232.08

64,221.14

130,831.16

106,569.78

Exports Revenue

44,502.75

36,620.65

95,345.27

78,064.18

Net Profit

Profit for the year before Taxation and Exceptional item

14,229.60

13,641.40

9,061.74

13,211.29

Share of (loss)/Profit of associates and Joint Venture

-

-

(334.38)

(330.20)

Add/(Less): Exceptional item

(402.13)

318.03

(457.91)

924.05

Provision for Taxation:

Current Tax

3,759.26

3,328.22

3,951.57

3,529.58

Deferred Tax

(386.53)

(146.82)

(765.99)

(495.05)

Profit for the year

10,454.74

10,778.03

5,083.87

10,770.61

Less: Non-controlling interest

-

-

(199.77)

(46.95)

Profit for the year attributable to equity holders of parent

10,454.74

10,778.03

5,283.64

10,817.56

Items of other Comprehensive Income for the year (Net of tax)

277.34

1,700.77

479.58

1,889.47

Total

10,732.08

12,478.80

5,763.22

12,707.03

Balance of Profit from Previous year

57,175.05

46,325.81

50,841.56

39,764.24

Profit available for Appropriation

67,907.13

58,804.61

56,604.78

52,471.12

Appropriations:

Interim Dividend on Equity Shares

698.38

698.38

698.38

698.38

Tax on above dividend

-

-

-

-

Final Dividend on Equity Shares

2,560.74

931.18

2,560.74

931.18

Tax on above dividend

-

-

-

-

Transfer to General Reserve

-

-

-

-

Surplus retained in the Statement of Profit and Loss

64,648.01

57,175.05

53,345.66

50,841.56

2. Dividend

The Board, in its meeting held on November 14, 2022, declared an interim dividend of '' 1.50/- per equity share (i.e. 75%) of the face value of '' 2/- each aggregating to '' 698.38 Million subject to deduction of income tax at source.

Based on the Company''s performance, the Directors are pleased to recommend, for the approval of members, a final dividend of '' 5.50/- per equity share (i.e. 275%) of the face value of '' 2/- each. The final dividend on equity shares, if approved by the members, would involve a cash outflow of '' 2,560.74 million and shall be subject to deduction of income tax at source.

The dividend pay-out has been determined in accordance with the Dividend Distribution Policy of the Company.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time-to-time ("Listing Regulations"), the Company had adopted the Dividend Distribution Policy, which is available on the Company''s website at: https://www.bharatforge.com/assets/ pdf/investor/download/Dividend-Distribution-Policy.pdf

3. Reserves

During the year under review, the Company does not propose to transfer any amount to the General Reserve. An amount of '' 64,648.01 million is proposed to be retained as surplus in the Profit and Loss account.

4. Performance of the Company

The financial year 2022-23 saw a complete restoration of economic activity with no major disruptions. Rebound in economic activity coupled with partial easing of supply-side challenges ensured that the automotive industry had a very strong year. Despite continuing inflationary challenges due to the geopolitical crisis, all the businesses of your Company performed well. At the close of the financial year 2022-23 revenue stood at '' 75,727 million representing a 21.1% year-on-year growth. A strong performance was achieved on the back of record exports.

While your Company grew at a swift pace, the balance sheet continues to be sufficiently liquid with leverage levels remaining in check.

Domestic Business

Automotive Market: As the domestic economy revived, latent demand accumulated over the pandemic years led to pick-up in Passenger Vehicle ("PV") and Commercial Vehicles ("CV") sales. The product premiumisation trend witnessed in the PV business continued with Utility Vehicle sales now accounting for ~50% of the PV market. This has created a lucrative opportunity for your Company to tap into the domestic PV market.

The domestic CV industry continued to gallop ahead due to a combination of factors. Strong economic rebound, improving fleet operator profitability and enhanced road connectivity have put the CV OEMs in a sweet spot. The expanding share of Medium and Heavy CVs ("M&HCVs") in the overall mix has meant that your Company''s core strengths and the market''s needs were aligned in a major way. Going ahead, the government''s focus on infrastructure upgrades and general improvement in utilisation levels across sectors augurs well for M&HCV demand.

Industrial: The Industrial business during the financial year 2022-23 has grown by 11% to '' 12,978 million, however, if we normalise for the one-time impact of oxygen cylinder supply in financial year 2021-22 the year-on-year growth is 37%. The Company has, over the years, become proficient in the Industrial business, thanks to products built in critical-use areas. This product repository, when combined with a conducive policy environment and improving industrial demand represents a long runway for success.

In addition to the existing forging business, with the acquisition of J S Auto Cast Foundry India Private Limited ("JSA"), a Coimbatore based casting and machining company, your Company has added ferrous casting (upto 400 Kg) as an additional offering to its clients. JSA has a strong presence in wind energy, hydraulics, earth moving and off-highway with a total capacity of 1,00,000 MTPA. Through this acquisition, your Company has significant cross-sell opportunities for our existing customers.

Internationa! Business

Automotive Market: The Company witnessed record exports during the year under review and the bulk of this growth was supported by demand momentum on the automobiles side with PV revenue up 71% YoY. As most markets removed COVID-19 restrictions, demand for personal mobility has only accelerated. The production too increased with improving chip supplies helping drive a strong growth. Your Company''s consistent efforts at diversifying its Automobile basket beyond CV held it in good stead as the financial year 2022-23, PV performance surpassed all expectations. Going ahead, as growth rates come to more realistic levels, the Company remains confident of its PV strategy.

CV business continued to do well, supported by a resilient Class 8 demand and some market share gains by your Company. Fleet replacement demand across key markets of US and Europe continues to give comfort. Your Company continues to be a supplier of choice across US and European OEMs due to its consistent track record for defect-free delivery.

Industrial: The growth in the Industrial exports during the financial year 2022-23 remains broad-based with high-horsepower engines and Aerospace driving most of the incremental performance. A good pick-up in industrial activity and impending 5G roll-out across markets helped drive the demand for engines. The Aerospace business recorded revenue in excess of $20 million as program ramp ups from major OEM customers began. Going ahead, this business is expected to see exponential growth as your Company is one of the handful organisations certified by regulatory and industry bodies (NADCAP) for aerospace component supplies.

In the financial year 2022-23, despite unfortunate geo-political events, your Company was able to record healthy export growth. Your Company''s dependable supply quality and long-standing customer relationships are likely to hold it in good stead in the times to come.

Standalone & Consolidated

In the financial year 2022-23, the revenue of the Company increased by 21.1% as compared to the last financial year 2021-22 on a standalone basis whereas Profit after Tax stood at '' 10,454.74 million.

On a consolidated basis, the Company, its subsidiaries and joint venture companies achieved total revenue of '' 130,831.16 Million as against '' 106,569.78 million, an increase of 22.7%.

5. Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013 ("Act")

Particulars of loans, guarantees and investments covered under Section 186 of the Act, forms part of notes to the financial statements provided in this Annual Report.

6. Particulars of Contracts or Arrangements with Related Parties

All contracts or arrangements entered into by and between the Company with Related Parties are on an arm''s length basis and in the ordinary course of business. All Related Party Transactions are placed before the Audit Committee for prior approval.

Pursuant to Section 134 of the Act, read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of transactions with related parties are provided in Form No. AOC-2 which is annexed as

Annexure "A" to this report. Related Party disclosures as per Ind AS 24 have been provided in Note 39 to the financial statements.

The Related Party Transaction Policy as amended in line with the requirements of Listing Regulations has been displayed on the Company''s website at: https://www.bharatforge.com/assets/pdf/investor/ download/BFL.RPT-Policy.pdf

7. Deposits

During the year under review, the Company has neither accepted nor renewed any deposits under Chapter V of the Act.

8. Internal Financial Controls

Your Company has in place adequate internal financial controls, with reference to financial statements, commensurate with the size, scale, and complexity of its operations. An extensive risk-based programme of internal audits and management reviews provides assurance to the Board regarding the adequacy and efficacy of internal controls. The internal audit plan is also aligned with the business objectives of the Company which is reviewed and approved by the Audit Committee. Significant audit observations, if any, along with corrective actions thereon are presented to the Audit Committee. Further, the Audit Committee monitors the adequacy and effectiveness of your Company''s internal control framework. The internal control system has been designed to ensure that financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets.

9. Risk Management

The Company has a robust risk management framework comprising of risk governance structure and defined risk management processes. The Board of Directors of the Company has formed a Finance and Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Finance and Risk Management Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis (MDA), which forms part of this report.

10. Material Changes and Commitments - if any, affecting the financial position of the Company

There are no adverse material changes or commitments that occurred after March 31, 2023, which may affect the financial position of the Company or may require disclosure.

11. Significant and Material Orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in the future.

There are no applications made or proceedings pending under the Insolvency and Bankruptcy Code, 2016 as at the end of the financial year, nor has the Company done any one-time settlement with any Bank or Financial institution.

12. State of Company''s Affairs

Discussion on the state of affairs of the Company has been covered as part of the Management Discussion and Analysis (MDA). MDA for the year under review, as stipulated under Regulation 34 of Listing Regulations, is presented in a separate section forming part of this Annual Report.

13. Share Capital

The paid-up Equity Share Capital of the Company as on March 31, 2023, stood at '' 931.18 million.

During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2023, none of the Directors of the Company hold any instruments convertible into equity shares of the Company.

Debt

During the financial year 2022-23, the Company issued and allotted 2,000 listed, rated, unsecured, redeemable, non-convertible debentures of the face value of '' 1 Million each for cash aggregating to '' 2,000 Million to identified investors on a private placement basis.

14. Transfer of Unpaid and Unclaimed Amounts to Investor Education and Protection Fund (''IEPF'')

Pursuant to the provisions of the Act and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), as amended from time-to-time, the declared dividends, which remained unpaid or unclaimed for a period of 7 (seven) years and shares in relation to such unpaid/unclaimed dividend shall be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Accordingly, during the year, the Company transferred the dividends unpaid or unclaimed for a period of 7 (seven) years from the date they became due for payment along with the shares thereof, to IEPF. The shareholders have an option to claim their shares and/or amount of dividend transferred to IEPF. No claim shall be entertained against the Company for the amounts and shares so transferred.

The list of equity shareholders whose shares are transferred to IEPF can be accessed on the website of the Company at the link: https://www.bharatforge.com/investors/shareholders-information/ unclaimed-dividend

The Company has sent notices to respective shareholders who have not claimed a dividend for 7 (seven) consecutive years and whose shares were liable to be transferred to IEPF during the financial year 2022-23. The newspaper advertisement stating the same has also been published in Loksatta, Marathi, Pune and Business Standard - All Editions newspapers on June 18, 2022, November 25, 2022 and January 07, 2023. The list of equity shareholders whose shares are liable to be transferred or which have been transferred to IEPF, as the case may be, can be accessed on the website of the Company at the link: https://www.bharatforge.com/investors/shareholders-information/unclaimed-dividend

15. Annual Return

In accordance with Sections 92(3) read with 134(3)(a) of the Act, the extract of the Annual Return of the Company for the financial year 2022-23 is available on the website of the Company at https://www.bharatforge.com/investors/agm

16. Directors'' Responsibility Statement

Based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company, the work performed by the Internal Auditors, Statutory Auditors and Secretarial Auditors, including the Audit of Internal Financial Controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2022-23.

Pursuant to Section 134(5) of the Act, the Directors confirm that:

a. in preparation of the annual accounts for the financial year ended March 31, 2023, the applicable Accounting Standards have been followed and there were no material departures;

b. they 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 on March 31, 2023, and of the profit of the Company for that period;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

17. Directors and Key Managerial Personnel (KMP)

In terms of the provisions of the Act and the Articles of Association of the Company, Mr. S. E. Tandale (DIN: 00266833), Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment. A resolution seeking shareholders'' approval for his re-appointment along with other required details forms part of the Notice convening the 62nd Annual General Meeting ("AGM") of the Company.

The shareholders at its 61st AGM held on Friday, August 12, 2022, regularised the appointments of Mr. K. B. S. Anand (DIN: 03518282) and Ms. Sonia Singh (DIN: 07108778) as Non-Executive Independent Directors for a term of 3 (three) consecutive years up to June 26, 2025.

Material changes in the Board structure which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report

a. The Board at its meeting held on Tuesday, February 14, 2023, approved the re-appointments of Mr. B. N. Kalyani (DIN: 00089380) as Chairman and Managing Director for a term of 5 (five) consecutive years from March 30, 2023 up to March 29, 2028, and Mr. G. K. Agarwal (DIN: 00037678) as the Deputy Managing Director for a term of 1 (one) year from April 01, 2023 up to March 31, 2024. The resolutions have been recommended to shareholders for their approval by way of postal ballot notice dated April 14, 2023.

b. Considering the invaluable contribution made by Mr. Amit Kalyani (DIN: 00089430) over a period of time and to further entrust Mr. Amit Kalyani with larger responsibilities with the aim of expanding the business multifold, the Board at its meeting held on Friday, May 05, 2023, approved re-designation of Mr. Amit Kalyani as Joint Managing Director of the Company with an immediate effect.

c. Mr. Kishore Saletore (DIN: 01705850) tendered his resignation from the post of Executive Director and Chief Financial Officer ("CFO") of the Company with effect from closure of business hours on Friday, June 30, 2023. The Board at its meeting held on Friday, May 05, 2023, accepted the resignation and put on record its sincere appreciation for the contributions made by Mr. Saletore during his association with the Company as a Director and CFO.

d. The Board at its meeting held on Friday, May 05, 2023, approved the appointment of Mr. Kedar Dixit as the CFO and designated as Key Managerial Personnel of the Company with effect from Saturday, July 01, 2023.

Independent Directors'' Declaration

The Company has received the necessary declarations from each Independent Director in accordance with Section 149(7) of the Act and Regulations 16(1)(b) and 25(8) of the Listing Regulations, that he/she meets the criteria of independence as laid out in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience of all Independent Directors on the Board.

18. Number of Meetings of the Board

The Board met 4 (four) times during the year. Also, a separate meeting of Independent Directors as prescribed under Schedule IV of the Act, was held during the year under review. The details of meetings of the Board of Directors are provided in the Report on Corporate Governance that forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Act.

19. Board Evaluation

Led by the Nomination and Remuneration Committee, a formal evaluation of the performance of the Board, its Committees, the Chairperson, and the individual Directors was carried out using individual questionnaires.

As part of the evaluation process, the performance of Non-Independent Directors, the Chairperson and the Board was conducted by the Independent Directors. The performance evaluation of the respective Committees and that of Independent and Non-Independent Directors was done by the Board excluding the Director being evaluated.

20. Familiarisation Programme

The Company regularly provides orientation and business overview to its Directors by way of detailed presentations by the various business and functional heads at Board meetings and through other interactive programmes. Such meetings/programmes include briefings on domestic and global business of the Company. Besides this, the Directors are regularly updated about the Company''s new projects, R&D initiatives, changes in the regulatory environment and strategic direction. The Board members are also provided with relevant documents, reports and internal policies to facilitate familiarisation with the Company''s procedures and practices, from time to time.

The details of the familiarisation programmes for Independent Directors are posted on the website of the Company and can be accessed at: https://www.bharatforge.com/assets/pdf/investor/ familiarisation-programme-for-independent-directors.pdf

21. Business Responsibility and Sustainability Report

In accordance with the Listing Regulations, the Business Responsibility and Sustainability Report (BRSR) forms a part of this Annual Report describing the initiatives undertaken by the Company from an environmental, social and governance perspective during the year under review.

22. Information Pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

In terms of Section 136 of the Act, the Reports and Accounts are being sent to the shareholders excluding the information required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Any shareholder interested in obtaining the same may write to the Company Secretary at [email protected].

The statement containing the information as required under the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure "B" and forms part of this Report.

23. Nomination and Remuneration Policy

The Nomination and Remuneration Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall formulate the criteria for appointment of Directors on the Board of the Company and persons holding Senior Management positions in the Company, including their remuneration and other matters as provided under Section 178 of the Act and Listing Regulations.

The Policy is also available on the Company''s website at: https://www.bharatforge.com/assets/pdf/ investor/download/NOMINATION_AND_REMUNERATION_POLICY.PDF

24. Corporate Governance

The Company has been practising the principles of good corporate governance over the years. A separate section on corporate governance and a certificate from the Practicing Company Secretary regarding compliance with the conditions of corporate governance as stipulated under the Listing Regulations forms part of this Annual Report. The Chairman and Managing Director and the Chief Financial Officer of the Company have certified to the Board on financial statements and other matters in accordance with Regulation 17 (8) of the Listing Regulations pertaining to CEO/CFO certification for the financial year ended March 31, 2023.

25. Subsidiaries, Joint Ventures, and Associate Companies

During the year under review, the Company undertook following investments/acquisitions/ internal restructuring:

a. The Company has subscribed to 26% of paid-up share capital of Avaada MHVidarbha Private Limited ("Avaada") on April 19, 2022, as a condition precedent to purchase of solar power on a Single Captive User basis under the provisions of Electricity Act, 2003. Subsequent to the above, Avaada became an associate of the Company.

b. The Company has acquired 100% shareholding of J S Auto Cast Foundry India Private Limited, a Coimbatore-based casting and machining company through its wholly owned subsidiary - BF Industrial Solutions Limited ("BFISL") on July 01, 2022.

c. The Company has incorporated a Wholly Owned subsidiary (WOS) Kalyani Lightweighting Technology Solutions Limited on July 12, 2022, with a view of creating a separate vertical for aluminum business and for light weighting technology.

d. Kalyani Powertrain Limited ("KPL"), a WOS of the Company has incorporated a WOS in the name of "Electroforge Limited" on July 25, 2022, which will cater to the e-mobility vertical under KPL. Consequent to the above, Electroforge Limited has become a step-down subsidiary of the Company.

e. A Joint Venture Agreement was executed between Kalyani Strategic Systems Limited ("KSSL") a WOS of the Company and Open Joint Stock Company Dastan Transnational Corporation Ltd. ("Dastan"), whereby 49% of equity holding of Sagar-Manas Technologies Limited ("SMTL") has been transferred on September 20, 2022, by KSSL to Dastan. Consequently, SMTL has become a subsidiary of KSSL as against the earlier status of WOS and step-down subsidiary of the Company.

f. The Company through BF Infrastructure Limited ("BFIL") - its WOS, has executed a Share Purchase Agreement on February 28, 2023, with PNC Infratech Limited and Ferrovia Transrail Solutions Private Limited ("Ferrovia") for purchase of 51% shareholding in Ferrovia. Subsequently, with effect from March 02, 2023, BFIL''s shareholding in Ferrovia has increased from 49% to 100% resulting in Ferrovia becoming a WOS of BFIL and a step-down subsidiary of the Company.

g. In order to house all defence related investments of the Company under one entity, the Company has transferred its stake held in its WOS, Analogic Controls India Limited ("ACIL") and its associate Aeron Systems Private Limited ("Aeron") to its WOS KSSL on September 30, 2022, and March 31, 2023, respectively. Consequently, ACIL became a WOS of KSSL and a step-down subsidiary of the Company. To further consolidate the defence business, with effect from March 10, 2023, ACIL has merged into KSSL.

As on March 31, 2023, the Company has 33 (Thirty-three) subsidiaries (including step-down subsidiaries) and 3 (Three) associate companies and 2 (Two) joint venture companies. In accordance with Section 129(3) of the Act, the Company has prepared the consolidated financial statement, which forms part of this Annual Report. Further, a statement containing salient features of the financial statements of

our subsidiaries in the prescribed Form AOC-1 is presented in a separate section forming part of the financial statements.

Performance of Material Subsidiaries:

i. Bharat Forge CDP GmbH:

Bharat Forge CDP GmbH ("BF CDP") is the step-down subsidiary of the Company located in Ennepetal, Germany.

BF CDP is engaged in the business of manufacturing of forged and machined components for commercial vehicle, passenger vehicle and industrial applications. BF CDP recorded revenue of '' 18,558 million (Eur 221.66 million) as on March 31, 2023.

ii. Bharat Forge International Limited:

Bharat Forge International Limited ("BF International") is a wholly owned subsidiary of the Company located in England, United Kingdom. BF International is engaged in the business of trading forged and machined components for the automotive and industrial sectors and has a revenue of '' 33,708 million (USD 419.30 million) for the year ended March 31, 2023.

Pursuant to Section 136 of the Act, the audited financial statements, including the consolidated financial statements and related information of the Company and separate audited accounts in respect of subsidiaries, are available on the website of the Company at: https://www.bharatforge. com/investors/reports/annual-reports

26. Audit Committee

The Audit Committee comprises of Mr. P. G. Pawar, Independent Director as Chairperson, Mr. P. H. Ravikumar, Independent Director, and Mr. Vimal Bhandari, Independent Director as members.

All the recommendations made by the Audit Committee were deliberated and accepted by the Board during the financial year 2022-23.

27. Auditors

A. Statutory Auditors and Audit Report

At the 61st Annual General Meeting of the Company held on Friday, August 12, 2022, M/s. B S R & CO LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022) were appointed as Statutory Auditors to hold office for a period of 5 (five) consecutive years till the conclusion of 66th Annual General Meeting to be held in the year 2027.

The Auditor''s Report for the financial year 2022-23 does not contain any qualification, reservation or adverse remark. The Auditor''s Report is enclosed with the Financial Statements in this Annual Report.

B. Secretarial Auditor and the Audit

The Board has appointed M/s. SVD & Associates, Company Secretaries, Pune, to conduct Secretarial Audit for the financial year 2022-23. The Secretarial Audit Report for the financial year ended March 31, 2023, is appended as Annexure "C" to this report.

The observations of the Secretarial Auditor in their report are self-explanatory and therefore, the Directors do not have any further comments to offer on the same.

Further, as required under Section 204 of the Act and rules thereunder, the Board has appointed M/s. SVD & Associates, Company Secretaries, Pune, to also conduct the Secretarial Audit for the financial year 2023-24.

C. Cost Auditors

The Board of Directors, on the recommendation of the Audit Committee, has appointed M/s. Dhananjay V. Joshi & Associates, Cost Accountants, Pune, (Firm Registration No.: 00030) as Cost Auditors to audit the cost accounts of the Company for the financial year 2023-24. As required under the Act, a resolution seeking shareholders'' approval for the remuneration payable to the Cost Auditors forms part of the Notice convening the 62nd Annual General Meeting.

In accordance with the provisions of Section 148(1) of the Act, read with the Companies (Cost Records & Audit) Rules, 2014, the Company has maintained cost records.

The Cost Audit report for the financial year 2021-22 was filed with the Ministry of Corporate Affairs on October 17, 2022.

D. Reporting of fraud by auditors

During the year under review, the Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act to the Audit Committee.

28. Corporate Social Responsibility Activities

The Company has been carrying out various Corporate Social Responsibility (CSR) activities. These activities are carried out in terms of Section 135 read with Schedule VII of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time-to-time.

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure "D" of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which forms a part of this report. The CSR policy is also available on the Company''s website at the link: https:// www.bharatforge.com/assets/pdf/investor/download/BFL-CSR-Policy-Signed.pdf

29. Obligation of the Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition, and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and the Rules made thereunder. All women associated (permanent, temporary, contractual and trainees) as well as any women visiting the Company''s office premises or women service providers are covered under this Policy.

During the year, the Internal Complaints Committee of the Company constituted under the POSH Act has received 4 (four) complaints, which are undergoing investigation as on March 31, 2023. The pending cases were registered in Q4 FY 2022-23 and are in various stages of enquiry/redressal. Further, the Company reached out to 952 employees through awareness sessions for creating greater awareness with respect to the Company''s Policy on Sexual Harassment at workplace. During the year under review, a video-based training on POSH awareness was rolled out to all the employees and is being hosted on the employee portal to create greater awareness on this subject.

30. Vigil Mechanism

Pursuant to the provisions of Section 177(9) of the Act, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Listing Regulations and in accordance with the requirements of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Board of Directors had approved the Policy on Vigil Mechanism/Whistle Blower and the same has been hosted on the website of the Company. Over the years, the Company has established a

reputation for doing business with integrity and displays zero tolerance for any form of unethical behaviour. The mechanism under the Policy has been appropriately communicated within and outside the organisation. This Policy inter-alia provides direct access to the Chairperson of the Audit Committee. It is affirmed that no personnel of the Company have been denied access to the Audit Committee.

The Company reached out to employees through physical/virtual sessions with an aim of creating greater awareness on this subject. During the year under review, the Company has received 4 (four) complaints under the said mechanism, the details of which is tabulated below:

Number of complaints received during the year

Number of complaints resolved during the year

Number of complaints remaining unresolved/undergoing investigaton as on March 31, 2023

4

1

3

The pending cases were registered in Q4 FY 2022-23 and are in various stages of enquiry / redressal.

The Whistle Blower Policy of the Company has been displayed on the Company''s website at the link: https://www.bharatforge.com/assets/pdf/investor/download/BFL-Whistle-Blower-Policy-Signed.pdf

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

The particulars relating to the conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014 are appended as Annexure "E" to this report.

32. Compliance with Secretarial Standards

The Company complies with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

33. Acknowledgement

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

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

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

For and on behalf of the Board of Directors

B. N. KALYANI

Chairman and Managing Director DIN: 00089380

Pune: May 05, 2023


Mar 31, 2022

Your Directors have pleasure in presenting the 61st (Sixty-First) Annual Report on the business and operations of the Company together with the audited financial statements for the Financial Year ended March 31, 2022.

1. Financial Highlights

The financial performance of the Company on standalone and consolidated basis for the Financial Year ended March 31, 2022 as compared to previous year is summarised in the following table:

In ? Million

Standalone

Consolidated

Particulars

31-Mar-22

31-Mar-21

31-Mar-22

31-Mar-21

Total Income

64,221.14

37,919.69

106,569.78

65,051.59

Exports Revenue

36,620.65

19,558.66

78,064.18

46,666.08

Net Profit

Profit for the year before Taxation and Exceptional item

13,641.40

4,240.90

13,211.29

3,107.48

Share of (loss) / Profit of associates and Joint Venture

-

-

(330.2)

(299.74)

Add / (Less): Exceptional item

318.03

(91.83)

924.05

(3,062.28)

Provision for Taxation:

Current Tax

3,328.22

882.21

3,529.58

906.56

Deferred Tax

(146.82)

145.92

(495.05)

108.56

Profit for the year

10,778.03

3,120.94

10,770.61

(1,269.66)

Less: Non-controlling interest

-

-

(46.95)

(5.85)

Profit for the year attributable to equity holders of parent

10,778.03

3,120.94

10,817.56

(1,263.81)

Items of other Comprehensive Income for the year (Net of tax]

1,700.77

197.84

1,889.47

127.76

Total

12,478.80

3,318.78

12,707.03

(1,136.05)

Balance of Profit from Previous year

46,325.81

43,007.03

39,764.24

40,900.29

Profit available for Appropriation

58,804.61

46,325.81

52,471.12

39,764.24

Appropriations:

Interim Dividend on Equity Shares

698.38

-

698.38

-

Tax on above dividend

-

-

-

-

Final Dividend on Equity Shares

931.18

-

931.18

-

Tax on above dividend

-

-

-

-

Transfer to General Reserve

-

-

-

-

Surplus retained in Statement of Profit and Loss

57,175.05

46,325.81

50,841.56

39,764.24

2. Dividend

The Board, in its meeting held on November 12, 2021 declared an interim dividend of ? 1.50/- per equity share (i.e.75%) of the face value of ? 2/- each aggregating to ? 698.38 Million plus applicable taxes thereon.

Based on the Company''s performance, the Directors are pleased to recommend for approval of members a final dividend of ? 5.5/- per equity share (i.e. 275%) of the face value of ? 2/- each. The final dividend on equity shares, if approved by the members, would involve a cash outflow of ? 2560.74 million and shall be subject to deduction of income tax at source.

The dividend payout has been determined in accordance with the Dividend Distribution Policy of the Company.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, ("Listing Regulations"), the Company had adopted the Dividend Distribution Policy which is available on the Company''s website at: https://www.bharatforge.com/investors/corporate-governance/policies

3. Reserves

During the year under review, the Company does not propose to transfer any amount to the General Reserve. An amount of ? 57,175.05 million is proposed to be retained as surplus in the Profit and Loss account.

4. Performance of the Company

The end of financial year 2021 and the beginning of financial year 2022 was severely impacted by the devastating outbreak of second wave of COVID-19 in India resulting in significant loss of lives and disruption to industrial activity. Your Company has diligently followed all the Government guidelines including adoption of social distancing norms at workplace and necessary precautions for all employees on an ongoing basis. The Company also administered vaccination for all the employees of the Company.

Post the slump in the initial few months, economic activity picked up significantly across all sectors. The Company, for the year, recorded revenues of ? 62,546.12 million as against ? 36,515.12 million in previous year, a growth of 71.3%.

The balance sheet at the end of financial year continues to be robust with significant level of liquidity.

Domestic Business

Automotive Market: Despite unabated challenges, the industry has had to weather over the past few years ranging from supply chain related issues, increased cost due to regulatory challenges, high input cost inflation etc. The Company''s performance in financial year 2022 has been very encouraging, albeit from a low base. All segments of the industry have shown double digit growth ranging from 20% for Passenger Vehicles ("PV") to 50% for Medium and Heavy Commercial Vehicle ("MHCV"). Outlook for MHCV sector looks promising driven by healthy freight rates, improving fleet operators'' profitability and the strong focus of the Government on infrastructure development.

The stark performance between the PV segment which grew by 4% and the Utility Vehicle ("UV") segment which grew by 43% is clear signal about the product premiumization in the domestic car market. The Company''s presence in the PV/UV segment has been strengthened over the past few years with both new product and customer addition. As against the industry growth of 19%, the Company''s revenue has grown by 36%.

Industrial Business: The Industrial segment during the financial year 2021-22 has grown by 57% to ? 11,666 million which includes revenues of ? 2,209 million attributable to the supply of Oxygen Cylinders. This segment is going to be big focus and growth area over medium to long term as the Company focuses its attention towards addressing areas which has 100% dependency on imports and area which will see exponential growth driven by AtmaNirbharta and the Government''s aim to make manufacturing >20% of GDP from the current ~15%.

International Business

The Company''s exports saw growth across all major segments. Export revenues in financial year 2022 were at ? 36,620.65 million was a growth of 87.23% as against financial year 2021.

A key pillar of growth was the Industrial segment which witnessed revenues jumping by 150.3% to ? 13,906 million. This was on the back of sharp recovery in shale gas drilling activity in North America and strong demand from HHP segment.

The Automotive segment across both PV & Commercial Vehicle saw a sharp jump in revenues of 25.6% and 78.8% respectively. The growth could have been much better if not for supply chain related issues and shortage of semiconductors which impacted the ability of OEM to produce more vehicles.

Your Company continues to maintain razor sharp focus to grow exports on year-on-year basis. We have intensified our business development and new product development activities in spite of the lockdown and associated challenges including reduced mobility due to travel restrictions. We have successfully overcome these challenges by actively implementing virtual interface and digital collaborations across all functions including customer critical actions like plant audits.

Despite the challenges on account of operations, logistics, etc., your Company has ensured supply chain fulfilment for all our customers. Your Company has received generous appreciation for our dependability from domestic and global customers.

Standalone & Consolidated

In the financial year 2021-22, the revenue of the Company increased by 69% and Profit after Tax increased by 245%, as compared to the last financial year 2020-21 on a standalone basis. The total revenue increased by 69% to ? 64,221.14 as compared to last year of ? 37,919.69 million. Whereas export revenue increased by 87% to ? 36,620.65 million as compared to last year of ? 19,558.66 million. On a consolidated basis, the Company, its subsidiaries and

joint venture companies, achieved total revenue of ? 1,06,569.78 Million as against ? 65,051.59 million, an increase of 64%.

5. Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013 [“Act”)

Particulars of loans, guarantees and investments covered under Section 186 of the Act, forms part of notes to the financial statements provided in this Annual Report.

6. Particulars of Contracts or Arrangements with Related Parties

All contracts or arrangements entered into by and between the Company with Related Parties are on arm''s length basis and in the ordinary course of business.

Pursuant to Section 134 of the Act, read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of transactions with related parties are provided in Form AOC-2 which is annexed as Annexure “A” to this report. Related Party disclosures as per Ind AS 24 have been provided in Note 39 to the financial statements.

The Related Party Transaction Policy as amended in line with the requirements of Listing Regulations has been displayed on the Company''s website at: https://www.bharatforge.com/investors/corporate-governance/policies

7. Deposits

During the year under review, the Company has not accepted any deposit under Chapter V of the Act.

8. Internal Financial Controls

Your Company has in place adequate internal financial controls, with reference to financial statements, commensurate with size, scale and complexity of its operations. An extensive risk-based programme of internal audits and management reviews provides assurance to the Board regarding the adequacy and efficacy of internal controls. The internal audit plan is also aligned to the business objectives of the Company which is reviewed and approved by the Audit Committee. Further, the Audit Committee monitors the adequacy and effectiveness of your Company''s internal control framework. The internal control system has been designed to ensure that financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets.

9. Risk Management

The Company has a robust risk management framework comprising of risk governance structure and defined risk management processes. The Board of Directors of the Company has formed a Finance and Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis (MDA), which forms part of this report.

10. Material Changes and Commitments affecting the Financial Position of the Company

There are no adverse material changes or commitments occurred after March 31, 2022, which may affect the financial position of the Company or may require disclosure.

11. Significant and Material Orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

There are no applications made or proceedings pending under the Insolvency and Bankruptcy Code, 2016 as at the end of the financial year, nor has the Company done any one-time settlement with any Bank or Financial Institutions.

12. State of Company''s Affairs

Discussion on the state of affairs of the Company has been covered as part of the Management Discussion and Analysis (MDA). MDA for the year under review, as stipulated under Regulation 34 of Listing Regulations, is presented in a separate section forming part of this Annual Report.

13. Share Capital

The paid-up Equity Share Capital of the Company as on March 31, 2022, stood at ? 931.18 million.

During the year under review, the Company has not issued shares with the differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2022, none of the Directors of the Company hold any instruments convertible into equity shares of the Company.

14. Transfer of Unpaid and Unclaimed Amounts to Investor Education and Protection Fund (''IEPF'')

Pursuant to the provisions of the Act and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), as amended from time-to-time, the declared dividends, which remained unpaid or unclaimed for a period of 7 (seven) years and shares in relation to such unpaid / unclaimed dividend shall be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Accordingly, during the year, the Company has transferred the unpaid or unclaimed dividend for a period of 7 (seven) years from the date they became due for payment along with the shares thereof, to IEPF. The shareholders have an option to claim their shares and / or amount of dividend transferred to IEPF. No claim shall be entertained against the Company for the amounts and shares so transferred.

The list of equity shareholders whose shares are transferred to IEPF can be accessed on the website of the Company at the link: https://www.bharatforge.com/investors/shareholders-information/unclaimed-dividend

The Company has sent notices to respective shareholders who have not claimed dividend for 7 (seven) consecutive years and whose shares were liable to be transferred to IEPF during the financial year 2021-22. The newspaper advertisement stating the same has also been published in Loksatta, Marathi, Pune and Business Standard- All Editions newspapers on June 30, 2021 and December 02, 2021. The list of equity shareholders whose shares are liable to be transferred or which have been transferred to IEPF, as the case may be, can be accessed on the website of the Company at the link: https://www.bharatforge.com/investors/shareholders-information/unclaimed-dividend

15. Annual Return

In accordance with Sections 92(3) read with 134(3)(a) of the Act, the Annual Return of the Company as on March 31, 2022 is available on the website of the Company at: https://www.bharatforge.com/investors/agm

16. Directors'' Responsibility Statement

Pursuant to Section 134(5) of the Act Directors confirm that:

a. in preparation of the annual accounts for the financial year ended March 31, 2022, the applicable Accounting Standards have been followed and there was no material departures;

b. they 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 on March 31, 2022, and of the profit of the Company for that period;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and that such internal financial

controls are adequate and are operating effectively; and

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

17. Directors and Key Managerial Personnel (KMP)

In terms of provisions of the Act and the Articles of Association of the Company, Mr. B. P Kalyani (DIN 00267202), Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment. A resolution seeking shareholders'' approval for his re-appointment along with other required details forms part of the Notice convening the 61st Annual General Meeting of the Company.

During the year under review, Mr. P. C. Bhalerao (DIN 00037754), Non-Executive Non-Independent Director and Mr. S. M. Thakore (DIN 00031788), Independent Director of the Company, have stepped down from the Board w.e.f. the closure of working hours of Friday, November 12, 2021. The Board placed on record its sincere appreciation for the contributions made by Mr. Bhalerao and Mr. Thakore during their association with the Company.

Further, in the 60th Annual General Meeting of the Company held on Friday, August 13, 2021, the shareholders approved re-appointment of Mr. S. E. Tandale (DIN: 00266833) and Mr. B. P Kalyani (DIN 00267202) as Executive Directors of the Company, for a period of 5 (five) consecutive years each, commencing from May 23, 2021.

Independent Directors'' Declaration

The Company has received the necessary declarations from each Independent Director in accordance with Section 149(7) of the Act and Regulations 16(1)(b) and 25(8) of the Listing Regulations, that he / she meets the criteria of independence as laid out in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience of all Independent Directors on the Board.

18. Number of Meetings of the Board

The Board met 5 (five) times during the year. Also, a separate meeting of Independent Directors as prescribed under Schedule IV of the Act, was held during the year under review. The details of meetings of Board of Directors are provided in the Report on Corporate Governance that forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under Act.

19. Board Evaluation

A formal evaluation of the performance of the Board, its Committees, the Chairperson and the individual Directors was carried out. Led by the Nomination and Remuneration Committee, the evaluation was carried out using individual questionnaires.

As part of the evaluation process, the performance of Non-Independent Directors, the Chairperson and the Board was conducted by the Independent Directors. The performance evaluation of the respective Committees and that of Independent and Non-Independent Directors was done by the Board excluding the Director being evaluated.

20. Familiarisation Programme

The Company regularly provides orientation and business overview to its Directors by way of detailed presentations by the various business and functional heads at Board meetings and through other interactive programs. Such meetings/ programs include briefings on domestic and global business of the Company. Besides this, the Directors are regularly updated about Company''s new projects, R&D initiatives, changes in regulatory environment and strategic direction. The Board members are also provided relevant documents, reports and internal policies to facilitate familiarisation with the Company''s procedures and practices, from time to time.

The details of programmes for familiarisation for Independent Directors are posted on the website of the Company and can be accessed at: https://www.bharatforge.com/assets/pdf/investor/familiarisation-programme-for-independent-directors.pdf

21. Business Responsibility and Sustainability Report

In accordance with the Listing Regulations, we have provided the Business Responsibility and Sustainability Report (BRSR) as a part of this Annual Report describing the initiatives undertaken by the Company from an environmental, social and governance perspective during the year under review.

22. Information Pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Sr. No.

Information Required

Input

1

The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year

Please refer Annexure "B"

2

The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;

Please refer Annexure "B"

3

The percentage increase in the median remuneration of employees in the financial year

9.77%

4

The number of permanent employees on the roll of company

4079

5

Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration

Percentage increase in salaries of managerial personnel at 50th Percentile is: (39.99)%

Percentage increase in salaries of non- managerial personnel at 50th Percentile is: 11.06%

The increase in remuneration is not solely based on company performance but also includes various other factors like individual performance, experience, skill sets, academic background, industry trends, economic situation and future growth prospects etc. besides Company performance. There are no exceptional circumstances for increase in the managerial remuneration.

6

Affirmation that the remuneration is as per the remuneration policy of the Company

The remuneration paid to the Directors is as per the Remuneration policy of the Company

7

Statement showing the names of the top ten employees in terms of remuneration drawn and the name of every employee, who-

(i) if employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than one crore and two lakh rupees;

(ii) if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than eight lakh and fifty thousand rupees per month;

(iii) if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company.

Please refer Annexure "C"

23. Nomination and Remuneration Policy

The Nomination and Remuneration Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall formulate the criteria for appointment of Directors on the Board of the Company and persons holding Senior Management positions in the Company, including their remuneration and other matters as provided under Section 178 of the Act and Listing Regulations. The Policy is also available on the Company''s website at: https://www.bharatforge.com/investors/corporate-governance/policies

24. Corporate Governance

The Company has been practicing the principles of good Corporate Governance over the years. A separate section on corporate governance and a certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated under the Listing Regulations forms part of this Annual Report. The Chairman and Managing Director and the Chief Financial Officer of the Company have certified to the Board on financial statements and other matters in accordance with the Regulation 17 (8) of the Listing Regulations pertaining to CEO/CFO certification for the financial year ended March 31, 2022.

25. Subsidiaries, Joint Ventures and Associate Companies

During the year under review, the Company undertook following acquisitions:

a. The Company acquired 100% of paid-up equity share capital of Nouveau Power & Infrastructure Private Limited ("NPIPL"), to align Company''s strategic objective in industrial segment and to act as a special purpose vehicle to undertake Company''s new acquisition initiatives. NPIPL was later converted to a public company and renamed as BF Industrial Solutions Limited ("BFISL");

b. The Company acquired 100% control of Sanghvi Forging and Engineering Limited ("SFEL") through BFISL in accordance with the Resolution Plan as approved by the National Company Law Tribunal ("NCLT") vide its order dated April 26, 2021. Consequently, the name of SFEL was changed to BF Industrial Technology & Solutions Limited.

c. The Company acquired 49% of paid-up share capital of Kalyani Strategic Systems Limited ("KSSL"), thereby resulting in an increase in the shareholding of Company from 51% to 100% and consequently KSSL becoming the wholly owned subsidiary of the Company.

Further, KSSL has incorporated "Sagar-Manas Technologies Limited" with an aim to participate in joint upgradation and manufacturing/ providing solutions for marine and defence products. KSSL has also incorporated a wholly owned subsidiary in Australia, namely, Kalyani Strategic Systems Australia Pty Ltd with an objective of exploring new business opportunities and diversifying existing product portfolio in the defence and aerospace industry.

d. Considering Company''s strategic outlay, in order to house all Electric Vehicle ("EV") initiatives of the Company through its EV company i.e. Kalyani Powertain Limited (wholly-owned subsidiary) ("KPL"), the Company''s stake of 48.86% in Tork Motors Private Limited ("Tork") was transferred to KPL. Pursuant to a conversion notice, KPL''s aggregate stake in Tork rose to 60.66% resulting in Tork being subsidiary of KPL and step-down subsidiary of the Company.

As on March 31, 2022, the Company has 31 (Thirty-one) subsidiaries (including step down subsidiaries) and 2 (Two) Associate Companies and 1 (One) Joint Venture Company. In accordance with Section 129(3) of the Act, the Company has prepared the consolidated financial statement, which forms part of this Annual Report. Further, a statement containing salient features of the financial statements of our subsidiaries in the prescribed Form AOC-1 is presented in a separate section forming part of the financial statements.

Performance of Material Subsidiaries:

i. Bharat Forge CDP GmbH

Bharat Forge CDP GmbH ("BF CDP") is the step-down subsidiary of the Company located in Ennepetal, Germany. BF CDP is engaged in business of manufacturing of components for auto industry. BF CDP recorded revenue of ? 19,299 million (15-month revenue) as on March 31, 2022.

ii. Bharat Forge International Limited

Bharat Forge International Limited ("BF International") is a wholly owned subsidiary of the Company located in England, United Kingdom. BF International is engaged in the business of trading of forged and machined components for automotive and industrial sector and has a revenue of ? 26,491 million for year ended March 31, 2022.

Pursuant to Section 136 of the Act, the audited financial statements, including the consolidated financial statements and related information of the Company and separate audited accounts in respect of subsidiaries, are available on the website of the Company at: https://www.bharatforge.com/investors/reports/annual-reports

26. Audit Committee

Considering the changes in the Board structure that took place during the year under review, the composition of Audit committee of the Board underwent change as follows:

From April 01, 2021 till November 12, 2021

With effect from November 13, 2021

Mr. P. G. Pawar- Chairperson

Mr. P. G. Pawar- Chairperson

Mr. S. M. Thakore- Member

Mr. P. H. Ravikumar - Member

Mr. P. H. Ravikumar - Member

Mr. Vimal Bhandari - Member

Mr. P. C. Bhalerao- Member

All the recommendations made by the Audit Committee were deliberated and accepted by the Board during the financial year 2021-22.

27. Auditors

A. Statutory Auditors and Audit Report

At the 56th Annual General Meeting of the Company held on Thursday, August 10, 2017, M/s. S R B C & CO LLP, Chartered Accountants, Pune (Firm Registration No. 324982E/E300003) were appointed as Statutory Auditors to hold office up to the conclusion of the 61st Annual General Meeting of the Company to be held in the year 2022.

The Auditor''s Report for FY 2021-22 does not contain any qualification, reservation or adverse remark. The Auditor''s Report is enclosed with the Financial Statements in this Annual Report.

In the meeting held on May 16, 2022, the Audit Committee of the Company has proposed, and the Board of Directors of the Company has recommended appointment of M/s. B S R & CO LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022), Pune as the Statutory Auditors of the Company. Subject to approval of shareholders of the Company, M/s. B S R & CO LLP, Chartered Accountants, Pune will hold office for a period of 5 (five) consecutive years from the conclusion of 61st Annual General Meeting of the Company scheduled to be held on August 12, 2022, till the conclusion of 66th Annual General Meeting to be held in the year 2027.

The Company has received a certificate from M/s. B S R & CO LLP, Chartered Accountants, Pune to the effect that their appointment, if made, at the ensuing 61st Annual General Meeting of the Company will be in accordance with the conditions laid down under the Companies Act, 2013 and Rule 4 of Companies (Audit and Auditors) Rules, 2014.

B. Secretarial Auditor and the Audit

The Board has appointed M/s. SVD & Associates, Company Secretaries, Pune, to conduct Secretarial Audit for the financial year 2021-22. The Secretarial Audit Report for the financial year ended March 31, 2022, is appended as Annexure “D” to this report.

The observations of the Secretarial Auditor in their report are self-explanatory and therefore, the Directors do not have any further comments to offer on the same.

Further, as required under Section 204 of the Act and rules thereunder, the Board has appointed M/s. SVD & Associates, Company Secretaries, Pune, to conduct Secretarial Audit for the financial year 2022-23.

C. Cost Auditors

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s. Dhananjay V. Joshi & Associates, Cost Accountants, Pune, (Firm Registration No.: 00030) as Cost Auditors to audit the cost accounts of the Company for the financial year 2022-23. As required under the Act, a resolution seeking Shareholders'' approval for the remuneration payable to the Cost Auditors forms part of Notice convening the 61st Annual General Meeting.

In accordance with the provisions of Section 148(1) of the Act, read with the Companies (Cost Records & Audit) Rules, 2014, the Company has maintained cost records.

The Cost Audit report for the Financial Year 2020-21 was filed with the Ministry of Corporate Affairs on October 09, 2021.

D. Reporting of fraud by auditors

During the year under review, the Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act to the Audit Committee.

28. Corporate Social Responsibility Activities

The Company has been carrying out various Corporate Social Responsibility (CSR) activities. These activities are carried out in terms of Section 135 read with Schedule VII of the Act as amended from time to time and the Companies (Corporate Social Responsibility Policy) Rules, 2014.

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure "E" of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which is a part of this report. The CSR policy is also available on the Company''s website at the link: https://www.bharatforge.com/investors/corporate-governance/policies

29. Obligation of the Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and the Rules thereunder. All women associate (permanent, temporary, contractual and trainees) as well as any women visiting the Company''s office premises or women service providers are covered under this Policy. During the year, the Company reached out to 260 employees through awareness sessions for creating greater awareness with respect to the Company''s Policy on Sexual Harassment at workplace.

The Company has constituted Internal Complaints Committee under the POSH Act and during the year under review, no complaints were received by the Committee.

30. Vigil Mechanism

Pursuant to the provisions of Section 177(9) of the Act, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Listing Regulations and in accordance with the requirements of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Board of Directors had approved the Policy on Vigil Mechanism/Whistle Blower and the same has been hosted on the website of the Company. Over the years, the Company has established a reputation for doing business with integrity and displays zero tolerance for any form of unethical behavior. The mechanism under the Policy has been appropriately communicated within the organization. This Policy inter-alia provides a direct access to the Chairperson of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

The Company reached out to employees through physical / virtual sessions with an aim for creating greater awareness on this subject. During the year under review, the Company has not received any complaints under the said mechanism. The Whistle Blower Policy of the Company has been displayed on the Company''s website at the link: https://www.bharatforge.com/investors/corporate-governance/policies

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

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014 are appended as Annexure "F" to this report.

32. Compliance with Secretarial Standards

The Company complies with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

33. Acknowledgement

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

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

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

For and on behalf of the Board of Directors B. N. KALYANI

Chairman and Managing Director DIN:00089380

Pune: May 16, 2022


Mar 31, 2021

Your Directors have pleasure in presenting the 60th (Sixtieth) Annual Report on the business and operations of the Company together with the audited financial statements for the Financial Year ended March 31, 2021.

1. FINANCIAL HIGHLIGHTS

The financial performance of the Company on standalone and consolidated basis for the Financial Year ended March 31, 2021 as compared to previous year is summarised in the following table:

In '' Million

Particulars

Standalone Consolidated

31-Mar-21

31-Mar-20

31-Mar-21

31-Mar-20

Total Income

37,919.69

47,247.72

65,051.59

82,437.07

Exports Revenue

19,558.66

26,501.79

46,666.08

62,648.57

Net Profit

Profit for the year before Taxation and Exceptional item

4,240.90

6,865.05

3,107.48

5,835.28

Share of (loss) / Profit of associates and Joint Venture

-

-

(299.74)

(429.03)

Add / (Less): Exceptional item

(91.83)

(939.14)

(3,062.28)

(789.16)

Provision for Taxation:

Current Tax

882.21

1,779.29

906.56

1,833.61

Deferred Tax

145.92

(588.54)

108.56

(708.98)

Profit for the year

3,120.94

4,735.16

(1,269.66)

3,492.46

Less: Non-controlling interest

-

-

(5.85)

(5.86)

Profit for the year attributable to equity holders of parent

3,120.94

4,735.16

(1,263.81)

3,498.32

Items of other Comprehensive Income for the year (Net of tax)

197.84

(161.10)

127.76

(236.05)

Total

3,318.78

4,574.06

(1,136.05)

3,262.27

Balance of Profit from Previous year

43,007.03

41,768.31

40,900.29

40,973.36

Profit available for Appropriation

46,325.81

46,342.37

39,764.24

44,235.63

Appropriations :

Interim Dividend on Equity Shares

-

1,629.56

-

1,629.56

Tax on above dividend

-

317.21

-

317.21

Final Dividend on Equity Shares

-

1,163.97

-

1,163.97

Tax on above dividend

-

224.60

-

224.60

Transfer to General Reserve

-

-

-

-

Surplus retained in Statement of Profit and Loss

46,325.81

43,007.03

39,764.24

40,900.29

2. DIVIDEND

Based on the Company''s performance, the Directors are pleased to recommend for approval of members a final dividend of '' 2/- per equity share (i.e. 100%) of the face value of '' 2/- each. The final dividend on equity shares, if approved by the members, would involve a cash outflow of '' 931.17 Million and shall be subject to deduction of income tax at source.

The dividend payout has been determined in accordance with the Dividend Distribution Policy of the Company.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, ("Listing Regulations"), the Company had adopted the Dividend Distribution Policy which is available on the Company''s website at : https://www.bharatforge.com/investors/corporate-governance/policies.

3. RESERVES

During the year under review, the Company does not propose to transfer any amount to the General Reserve.

An amount of '' 46,325.81 Million is proposed to be retained as surplus in the Profit and Loss account.

4. PERFORMANCE OF THE COMPANY

The outbreak of COVID-19 pandemic globally and in India has caused a significant social and economic disruption. Your Company has diligently followed all the Government issued guidelines including adoption of social distancing norms at workplace and necessary precautions for all employees on an ongoing basis.

In the first few months of this financial year, overall demand slumped due to mandatory lockdowns, as such adversely impacting your Company''s production and capacity utilization. In this difficult period, your Company focused hard on cost optimization, digitalization across all functions including the shop floor and a heightened focus on customers and new product development.

Despite the moderate operating performance, your Company has endeavored to maintain a strong balance sheet. Your Company is well positioned and committed to further strengthen financial performance in future.

The operations of your Company in India and globally resumed in a phased manner starting mid May, 2020 however, with utilization at sub-optimal levels. In these difficult times, your Company continued to fulfill customer''s demands in India and globally while also ensuring the safety and well-being of its employees which was very well acknowledged and highly appreciated by customers.

The balance sheet at the end of financial year continues to be robust with significant level of liquidity.

Standalone & Consolidated

In the financial year 2020-21, the revenue of the Company declined by 19.74% and Profit after Tax decreased by 34.09%, as compared to the last financial year 2019-20 on a standalone basis. The total revenue decreased by 19.74% to '' 37,919.69 Million as compared to last year of '' 47,247.72 Million. Whereas export revenue reduced by 26.20% to '' 19,558.66 Million as compared to last year of '' 26,501.79 Million. On a consolidated basis, the Company, its subsidiaries and joint venture companies, achieved total revenue of '' 65,051.59 Million as against '' 82,437.07 Million, a decline of 21.09%.

Domestic Business

After a very weak first quarter due to COVID-19 related mandatory lockdowns, the sequential quarters witnessed a steady revival of domestic business. During the year under review, your Company has seen strong recovery in second half for medium and heavy commercial vehicle volumes, robust demand in agriculture and farm sector, growth in passenger car segment with new customers and continued growth in existing and new products that Company has developed for many of these sectors.

The Medium and Heavy duty Commercial market shrunk by 27% for the year. However, your Company''s sales in this segment remained stable due to our relentless efforts to maintain and grow market share with our customers.

This could not have been possible without the wholehearted support by customers. Your Company saw a strong growth in revenues from agricultural segment backed by a strong farm segment, thanks to the massive thrust on rural infrastructure development initiatives by the Government of India. Your Company also gained traction in the passenger vehicle segment and despite an overall drop in the segment, your Company''s revenue witnessed substantial growth. Your Company also maintained steady presence in the industrial segments. Your Company is also well poised to address growth opportunities that may emerge from the ambitious and important program launched by the Government of India - ''Atmanirbhar Bharat''.

In the defence sector, your Company has so far completed the initial trails of artillery guns and is intending to complete the final stage of trails in due course after which it will be available for sale. We are also working relentlessly for timely delivery of recently bagged order for Kalyani M4 vehicles, which is due later this year.

International Business

COVID-19 being a global pandemic, had a negative impact on demand across the world. Consequently, this had an adverse impact on the exports of your Company in all segments of its operations.

North American and European Heavy Duty Truck market shrunk by 38% and 28% in the year 2020, respectively. We have intensified our engagement with customers and continue to maintain a strong position. For the Passenger Car segment, there was a significant reduction in demand however, our exports declined relatively marginally.

Revival of demand was quickest from the global transportation segment - both Heavy Truck and Passenger Cars. Industrial segments were slow to revive. Oil and Gas segment was very severely affected as such, remained in a slump throughout the year.

Your Company continues to maintain razor sharp focus to grow exports. We have intensified our business development and new product development activities in spite of the lockdown and associated challenges including reduced mobility due to travel restrictions. We have successfully overcome such challenges by actively implementing virtual interface and digital collaborations across all functions including customer critical actions like plant audits.

Despite the challenges for operations, logistics, etc. your Company has ensured supply chain fulfilment for all our customers. Your Company has received generous appreciation for our dependability.

Overseas Operations

Post the COVID-19 lockdown, the global automotive industry has picked up and all segment have witnessed sharp rebound across geographies. The Company''s main addressable segments, Class 8 Heavy trucks in North America and 16T and above Heavy Duty Trucks in Europe have seen sharp increases in demand.

In Germany and in North Carolina, the Company undertook expansion by adding additional press lines for aluminum products for passenger cars and the plant is under trial production phase. It is expected to ramp up production in the coming years. In North America, the Company has set up a center of excellence for light-weighting, which is an engineering and solutions center.

5. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013 [“ACT”)

Particulars of loans, guarantees and investments covered under Section 186 of the Act, forms part of notes to the financial statements provided in this Annual Report.

6. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts or arrangements entered into by and between the Company with Related Parties are on arm''s length basis and in the ordinary course of business.

Pursuant to Section 134 of the Act, read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of transactions with related parties are provided in Form AOC-2 which is annexed as Annexure “A” to this report. Related Party disclosures as per Ind AS 24 have been provided in Note 39 to the financial statements.

The Related Party Transaction Policy as amended in line with the requirements of Listing Regulations has been displayed on the Company''s website at: https://www.bharatforge.com/investors/corporate-governance/policies.

7. DEPOSITS

During the year under review, the Company has not accepted any deposit under Chapter V of the Act.

8. INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls, with reference to financial statements, commensurate with size, scale and complexity of its operations. An extensive risk based programme of internal audits and management reviews provides assurance to the Board regarding the adequacy and efficacy of internal controls. The internal audit plan is also aligned to the business objectives of the Company which is reviewed and approved by the Audit Committee. Further, the Audit Committee monitors the adequacy and effectiveness of your Company''s internal control framework. The internal control system has been designed to ensure that financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets.

9. RISK MANAGEMENT

The Company has a robust risk management framework comprising of risk governance structure and defined risk management processes. The Board of Directors of the Company has formed a Finance and Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis (MDA), which forms part of this report.

10. MATERIAL CHANGES AND COMMITMENTS, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no adverse material changes or commitments occurred after March 31, 2021 which may affect the financial position of the Company or may require disclosure.

11. SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

There are no application made or proceeding pending under the Insolvency and Bankruptcy Code, 2016 as at the end of the financial year, nor the Company has done any one time settlement with any Bank or Financial Institutions.

12. STATE OF Company''s AFFAIRS

Discussion on state of affairs of the Company has been covered as part of the Management Discussion and Analysis (MDA). MDA for the year under review, as stipulated under Regulation 34 of Listing Regulations, is presented in a separate section forming part of this Annual Report.

13. share CAPITAL

The paid-up Equity Share Capital of the Company as on March 31, 2021 stood at '' 931.18 Million.

During the year under review, the Company has not issued shares with the differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2021, none of the Directors of the Company hold any instruments convertible into equity shares of the Company.

Debt

During the financial year 2020-21, the Company issued and allotted 5,000 listed rated unsecured redeemable non-convertible debentures of the face value of '' 1 Million each for cash aggregating to '' 5,000 Million to identified investors on a private placement basis.

14. TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND C''lEPF'')

Pursuant to the provisions of the Act and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), as amended from time-to-time, the declared dividends, which remained unpaid or unclaimed for a period of 7 (seven) years and shares in relation to such unpaid / unclaimed dividend shall be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Accordingly, during the year, the Company has transferred the unpaid or unclaimed dividend for a period of 7 (seven) years from the date they became due for payment alongwith the shares thereof, to IEPF. The shareholders have an option to claim their shares and / or amount of dividend transferred to IEPF. No claim shall be entertained against the Company for the amounts and shares so transferred.

The list of equity shareholders whose shares are transferred to IEPF can be accessed on the website of the Company at the link: https://www.bharatforge.com/investors/shareholders-information/unclaimed-dividend.

The Company has sent notices to respective shareholders who have not claimed dividend for 7 (seven) consecutive years and whose shares were liable to be transferred to IEPF during the financial year 2020-21. The newspaper advertisement stating the same has also been published in Loksatta, Marathi, Pune and Business Standard, All Editions newspapers on June 05, 2020 and December 04, 2020. The list of equity shareholders whose shares are liable to be transferred or which have been transferred to IEPF, as the case may be, can be accessed on the website of the Company at the link: https://www.bharatforge.com/investors/shareholders-information/unclaimed-dividend.

15. ANNUAL RETURN

In accordance with Sections 92(3) read with 134(3)(a) of the Act, the Annual Return of the Company as on March 31, 2021 is available on the website of the Company at: https://www.bharatforge.com/investors/agm.

16. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act Directors confirm that:

a. in preparation of the annual accounts for the financial year ended March 31, 2021, the applicable Accounting Standards have been followed and there were no material departures;

b. they 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 on March 31, 2021 and of the profit of the Company for that period;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

17. DIRECTORS AND Key MANAGERIAL PERSONNEL (KMP)

In terms of provisions of the Act and the Articles of Association of the Company, Mr. K. M. Saletore (DIN:01705850) and Mr. P C. Bhalerao (DIN 00037754), Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment.

Based on the recommendation of the Nomination and Remuneration Committee of the Company, the Board of Directors of the Company re-appointed Mr. B. P. Kalyani (DIN: 00267202) and Mr. S. E. Tandale (DIN: 00266833) as the Executive Directors of the Company for a period of 5 (five) years, commencing from May 23, 2021. The appointment is subject to approval of the shareholders. Accordingly, the resolution for re-appointment of Mr. B. P Kalyani and Mr. S. E. Tandale forms part of Notice convening the 60th Annual General Meeting.

Further, in the 59th Annual General Meeting of the Company held on September 23, 2020, the shareholders appointed Mr. K. M. Saletore (DIN 01705850) as an Executive Director of the Company, for the period of 5 (five) consecutive years, commencing from February 02, 2020.

The disclosures pertaining to Directors being re-appointed as required pursuant to Regulation 36 of the Listing Regulations given in the explanatory statement to the Notice convening the 60th Annual General Meeting of the Company for reference of the shareholders.

Independent Directors'' Declaration

The Company has received the necessary declarations from each Independent Director in accordance with Section 149(7) of the Act and Regulations 16(1)(b) and 25(8) of the Listing Regulations, that he / she meets the criteria of independence as laid out in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience of all Independent Directors on the Board.

18. NUMBER OF MEETINGS OF THE BOARD

The Board met 7 (Seven) times during the year. Also a separate meeting of Independent Directors was convened as prescribed under Schedule IV of the Act, was held during the year under review. The details of meetings of Board of Directors are provided in the Report on Corporate Governance that forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under Act.

19. board evaluation

A formal evaluation of the performance of the Board, it''s Committees, the Chairman and the individual Directors was carried out. Led by the Nomination and Remuneration Committee, the evaluation was carried out using individual questionnaires.

As part of the evaluation process, the performance of Non-Independent Directors, the Chairman and the Board was conducted by the Independent Directors. The performance evaluation of the respective Committees and that of Independent and Non-Independent Directors was done by the Board excluding the Director being evaluated.

20. familiarisation programme

The Company regularly provides orientation and business overview to its Directors by way of detailed presentations by the various business and functional heads at Board meetings and through other interactive programs. Such meetings/ programs include briefings on domestic and global business of the Company. Besides this, the Directors are regularly updated about Company''s new projects, R&D initiatives, changes in regulatory environment and strategic direction. The Board members are also provided relevant documents, reports and internal policies to facilitate familiarization with the Company''s procedures and practices, from time to time.

The details of programmes for familarisation for Independent Directors are posted on the website of the Company and can be accessed at: https://www.bharatforge.com/assets/pdf/investor/familiarisation-programme-for-independent-directors

21. business responsibility report

In accordance with the Listing Regulations, we have provided the Business Responsibility Report (BRR) as a part of this Annual Report describing the initiatives undertaken by the Company from an environmental, social and governance perspective during the year under review.

22. INFORMATION PURSUANT TO RULE 5 OF THE COMPANIES [APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Sr.

No.

Information Required

Input

1

The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year

Please refer Annexure B

2

The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;

Please refer Annexure B

3

The percentage increase in the median remuneration of employees in the financial year

7.77%

4

The number of permanent employees on the rolls of company

4,388

5

Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration

Percentage increase in salaries of managerial personnel at 50th Percentile is:

(13.84%)

Percentage increase in salaries of non- managerial personnel at 50th Percentile is: 0.025%.

The increase in remuneration is not solely based on company performance but also includes various other factors like individual performance, experience, skill sets, academic background, industry trends, economic situation and future growth prospects etc. besides Company performance. There are no exceptional circumstances for increase in the managerial remuneration.

6 Affirmation that the remuneration is as per the remuneration policy of the company.

The remuneration paid to the Directors is as per the Remuneration policy of the company.

7 Statement showing the names of the top ten employees in terms of remuneration drawn and the name of every employee, who-

(i) if employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than one crore and two lakh rupees;

Please refer Annexure C

(ii)

if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than eight lakh and fifty thousand rupees per month;

(iii)

if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company.

23. NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall formulate the criteria for appointment of Directors on the Board of the Company and persons holding Senior Management positions in the Company, including their remuneration and other matters as provided under Section 178 of the Act and Listing Regulations. The Policy is also available on the Company''s website at: https:// www.bharatforge.com/investors/corporate-governance/policies.

24. CORPORATE GOVERNANCE

The Company has been practicing the principles of good Corporate Governance over the years. A separate section on corporate governance and a certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated under the Listing Regulations forms part of this Annual Report. The Chairman and Managing Director and the Chief Financial Officer of the Company have certified to the Board on financial statements and other matters in accordance with the Regulation 17 (8) of the Listing Regulations pertaining to CEO/CFO certification for the financial year ended March 31, 2021.

25. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

During the year under review, the Company acquired 100% of paid-up equity share capital of Kalyani Powertrain Private Limited, in order to segregate and undertake Company''s existing E-mobility business initiatives through a separate entity specifically acquired for this purpose.

Further, two of Company''s foreign step-down subsidiaries viz., Bharat Forge Hong Kong Limited and Bharat Forge CDP Trading has been de-registered and dissolved. The closure of these two step-down subsidiaries did not have any material impact on the operations / financials of the Company, either on a standalone or on a consolidated basis.

As on March 31, 2021, the Company has 23 (Twenty-three) subsidiaries (including step down subsidiaries) and 4 (Four) Associate Companies and 1 (One) Joint Venture Company. In accordance with Section 129(3) of the Act, the Company has prepared the consolidated financial statement, which forms part of this Annual Report. Further, a statement containing salient features of the financial statements of our subsidiaries in the prescribed Form AOC-1 is presented in a separate section forming part of the financial statements.

Pursuant to Section 136 of the Act, the audited financial statements, including the consolidated financial statements and related information of the Company and separate audited accounts in respect of subsidiaries, are available on the website of the Company at: https://bharatforge.com.

26. AuDIT COMMITTEE

The Audit Committee comprises of Mr. P. G. Pawar - Chairman of the Committee and Independent Director, Mr. S. M. Thakore - Independent Director, Mr. P. H. Ravikumar - Independent Director and Mr. P. C. Bhalerao - Non-Executive Director.

All the recommendations made by the Audit Committee were deliberated and accepted by the Board during the financial year 2020-21.

27. AuDITORS

A. Statutory Auditors and Audit Report

At the 56th Annual General Meeting of the Company held on Thursday, August 10, 2017, M/s. S R B C & CO LLP, Chartered Accountants, Pune (Firm Registration No. 324982E/E300003) were appointed as Statutory Auditors to hold office upto the conclusion of the 61st Annual General Meeting of the Company to be held in the year 2022.

The Auditor''s Report for FY 2020-21 does not contain any qualification, reservation or adverse remark. The Auditor''s Report is enclosed with the Financial Statements in this Annual Report.

B. Secretarial Auditor and the Audit

The Board has appointed M/s. SVD & Associates, Company Secretaries, Pune, to conduct Secretarial Audit for the financial year 2020-21. The Secretarial Audit Report for the financial year ended March 31, 2021 is appended as Annexure “D” to this report.

Further, as required under Section 204 of the Act and rules thereunder, the Board has appointed M/s. SVD & Associates, Company Secretaries, Pune, to conduct Secretarial Audit for the financial year 2021-22.

C. Cost Auditors

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s. Dhananjay V. Joshi & Associates, Cost Accountants, Pune, (Firm Registration No. : 00030) as Cost Auditors to audit the cost accounts of the Company for the financial year 2021-22. As required under the Act, a resolution seeking Shareholder''s approval for the remuneration payable to the Cost Auditors forms part of Notice convening the 60th Annual General Meeting.

In accordance with the provisions of Section 148(1) of the Act, read with the Companies (Cost Records & Audit) Rules, 2014, the Company has maintained cost records.

The Cost Audit report for the Financial Year 2019-20 was filed with the Ministry of Corporate Affairs on November 12, 2020.

D. Reporting of fraud by auditors

During the year under review, the Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act to the Audit Committee.

28. corporate social responsibility activities

The Company has been carrying out various Corporate Social Responsibility (CSR) activities. These activities are carried out in terms of Section 135 read with Schedule VII of the Act as amended from time to time and the Companies (Corporate Social Responsibility Policy) Rules, 2014.

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure “E” of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which is a part of this report. The CSR policy is also available on the Company''s website at the link: https://www.bharatforge.com/investor/policy.

29. oBLIGATioN of THE CoMPANY uNDER THE SExuAL HARASSMENT oF WoMEN AT WoRKPLACE [prevention, prohibition AND REDRESSAL) ACT, 2013

The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and the Rules thereunder. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Company''s office premises or women service providers are covered under this Policy. During the year, the Company reached out to 329 employees through awareness sessions for creating greater awareness with respect to the Company''s'' Policy on Sexual Harassment at workplace.

The Company has constituted Internal Complaints Committee under the POSH Act and during the year under review, no complaints were received by the Committee.

30. VIGIL MECHANISM

Pursuant to the provisions of Section 177(9) of the Act, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Listing Regulations and in accordance with the requirements of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Board of Directors had approved the Policy on Vigil Mechanism/Whistle Blower and the same has been hosted on the website of the Company. The mechanism under the Policy has been appropriately communicated within the organisation. This Policy inter-alia provides a direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

During the year under review, the Company has not received any complaints under the said mechanism. The Whistle Blower Policy of the Company has been displayed on the Company''s website at the link: https://www.bharatforge.com/ investors/corporate-governance/policies.

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

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(im) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014 are appended as Annexure "F" to this report.

32. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company complies with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

33. ACKNOWLEDGEMENT

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

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

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

For and on behalf of the Board of Directors

B.N. KALYANI

DIN:00089380 Chairman and Managing Director

Pune: June 04, 2021


Mar 31, 2019

Board''s Report

For the year ended March 31, 2019

To the Members,

The Directors have pleasure in presenting the 58th [Fifty-Eighth] Annual Report on the business and operations of the Company together with the audited financial statements for the Financial Year ended March 31, 2019.

1. FINANCIAL HIGHLIGHTS

The financial performance of the Company on standalone and consolidated basis for the Financial Year ended March 31, 2019 as compared to previous year is summarized in the following table:

In Rs, Million

Particulars

Standalone Consolidated

31-Mar-19

31-Mar-18

31-Mar-19

31-Mar-18

Total Income

66,860.07

54,916.37

1,03,485.26

85,566.79

Exports Revenue

37,258.44

29,711.73

73,539.84

61,230.68

Net Profit

Profit for the year before Taxation and Exceptional item

16,230.78

12,638.75

16,103.56

12,915.87

Share of [loss]/ Profit of associates and Joint Venture

-

-

[113.75]

[3.78]

Add / (Less): Exceptional item

-

[1,332.05]

-

[954.48]

Provision for Taxation:

Current Tax

5,350.68

4,161.42

5,742.68

4,318.49

Deferred Tax

167.29

72.33

[78.83]

99.44

Profit forthe year

10,712.81

7,072.95

10,325.96

7,539.68

Less: Non-controlling interest

-

-

4.23

[84.76]

Profit for the year attributable to equity holders of parent

10,712.81

7,072.95

10,321.73

7,624.44

Items of other Comprehensive Income for the year [Net of tax]

[121.25]

202.71

[118.15]

251.19

Total

10,591.56

7,275.66

10,203.58

7,875.63

Balance of Profit from Previous year

34,083.21

29,429.22

33,676.24

28,493.30

Profit available for Appropriation

44,674.77

36,704.88

43,879.82

36,368.93

Appropriations :

Interim Dividend on Equity Shares

1,163.97

931.18

1,163.97

931.18

Tax on above dividend

239.26

189.56

239.26

189.56

Final Dividend on Equity Shares

1,163.97

1,163.97

1,163.97

1,163.97

Tax on above dividend

239.26

236.96

239.26

236.96

Transfer to General Reserve

100.00

100.00

100.00

100.00

Adjustment during the year

-

-

-

71.02

Surplus retained in Statement of Profit and Loss

41,768.31

34,083.21

40,973.36

33,676.24

2. DIVIDEND

The Board, in its meeting held on November 2, 2018 declared an interim dividend of Rs, 2.50 per equity share [i.e.125%] of the face value of Rs, 2/- each aggregating to Rs,1,163.97 Million plus applicable taxes thereon.

Based on the Company’s performance, the Directors are pleased to recommend for approval of the members a final dividend of Rs, 2.50 per equity share [i.e. 125%] of the face value of Rs, 2/- each. The final dividend on equity shares, if approved by the members would involve a cash outflow of Rs, 1,163.97 Million plus a dividend tax of Rs, 239.26 Million.

The total dividend for the financial year ended March 31, 2019, including the proposed final dividend would aggregate to Rs, 2,806.46 Million inclusive of the dividend tax.

The dividend payout has been determined in accordance with the Dividend Distribution Policy of the Company.

Pursuant to Regulation 43A of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015, the Company had adopted the Dividend Distribution Policy which is attached as Annexure "A” to this report and is also available on the Company’s website, at: www.bharatforge.com/investors/corporate-governance/policies.

3. RESERVES

During the year under review, the Company proposes to transferRs, 100.00 Million to the General Reserve.

An amount of Rs, 41,768.31 Million is proposed to be retained as surplus in the Profit and Loss account.

4. PERFORMANCE OF THE COMPANY

The financial year 2018-19 has been a record year for your Company, with strong revenue and profit growth. In the financial year 2018-19, the revenue of the Company increased by 21.75% and Profit after Tax increased by 51.46%, as compared to the last financial year 2017-18 on a standalone basis. Domestic revenue increased by 17.45% to Rs, 29,601.64 Million as compared to last year of Rs, 25,204.64 Million. Whereas export revenue grew by 25.4% to Rs, 37,258 Million as compared to last year of Rs, 29,712 Million. The Balance Sheet of your Company continued to become stronger with the improvement in all the key financial ratios as compared to the last financial year 2017-18. ROCE [Net of Cash] has witnessed sharp growth of 24.7% despite significant new capacity creation and strategic initiatives on e-mobility.

On a consolidated basis, the Company, its subsidiaries and joint venture companies, achieved revenue of Rs, 103,485 Million as against Rs, 85,566.79 Million, a growth of 20.94%. Under International business, the Company recorded highest revenue from heavy vehicle business in FY 2018-19 at Rs, 15,912 Million. The passenger vehicle segment has been on a positive growth from the last five years from Rs, 420 Million in FY 2013-14 to Rs, 4,875 Million in FY 2018-19. Witnessing another good year for Oil & Gas Industry in North America, in the FY 2018-19, the Company recorded highest ever revenues from Industry segment at Rs, 16,471 Million.

During the year, your Company has set-up a facility viz., "The Centre for Light Weighting Technology" at Nellore, Andhra Pradesh. The facility is expected to be operational zed by the third quarter of the financial year 2019-20. The facility will manufacture critical light weight components in Aluminum. The Company has also undertaken an expansion of its forging and machining capacity at Baramati, Pune. This will caterthe requirements of Automotive and Industrial market globally.

5. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Particulars of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013, forms part of notes to the financial statement provided in this Annual Report.

6. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts or arrangements entered into by the Company with Related Parties are at arm’s length basis and are in the ordinary course of business.

Pursuant to Section 134 of the Companies Act, 2013 read with Rule 8[2] of the Companies [Accounts] Rules, 2014, the particulars of transactions with related parties are provided in Form AOC-2 which is annexed as Annexure "B” to this report. Related Party disclosures as per Ind AS 24 have been provided in Note 39 to the financial statement.

The Related Party Transaction Policy has been amended in line with the requirements of SEBI [Listing Obligations and Disclosure Requirements] [Amendment] Regulations, 2018 and adopted effective from April 1, 2019. The revised policy as approved by the Board has been displayed on the Company’s website at: www.bharatforge.com/investors/corporate-governance/policies.

7. DEPOSITS

During the year under review, the Company has not accepted any deposit under Chapter V of the Companies Act, 2013.

8. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

9. RISK MANAGEMENT

The Company has a robust risk management framework comprising risk governance structure and defined risk management processes. The Board of Directors of the Company has formed a Finance and Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis [MDA], which forms part of this report.

10. MATERIAL CHANGES AND COMMITMENTS, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no adverse material changes or commitments occurred after March 31, 2019 which may affect the financial position of the Company or may require disclosure.

11. SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

12. STATE OF COMPANY''S AFFAIRS

Discussion on state of affairs of the Company has been covered as part of the Management Discussion and Analysis [MDA], MDA for the year under review, as stipulated under Regulation 34 of SEBI [Listing Obligations and Disclosure Requirements] Regulations 2015, is presented in a separate section forming part of this Annual Report.

13. SHARE CAPITAL

The paid-up Equity Share Capital of the Company as on March 31, 2019 stood at'' 931.27 Million.

During the year under review, the Company has not issued shares with the differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2019, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

14. TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (‘IEPF'')

Pursuant to the provisions of the Companies Act, 2013 and Investor Education and Protection Fund Authority [Accounting, Audit, Transfer and Refund] Rules, 2016 [IEPF Rules], the declared dividends, which remained unpaid or unclaimed for a period of 7 [seven] years and shares thereof shall be transferred by the Company to the Investor Education and Protection Fund [IEPF] established by the Central Government.

Accordingly, during the year, the Company has transferred the unpaid or unclaimed dividend for a period of 7 [seven] years from the date they became due for payment along with the shares thereof, to IEPF. The shareholders have an option to claim their shares and / or amount of dividend transferred from IEPF. No claim shall be entertained against the Company for the amounts and shares so transferred.

The list of equity shareholders whose shares are transferred to IEPF can be accessed on the website of the Company at below mentioned link:

www.bharatforge.com/investors/shareholders-information/unclaimed-dividend

The Company has sent notices to respective shareholders who have not claimed dividend for 7 [seven] consecutive years and whose shares are liable to be transferred to IEPF during the financial year 2019-20. The newspaper advertisement stating the same has also been published in the newspapers. The list of equity shareholders whose shares are liable to be transferred to IEPF can be accessed on the website of the Company at below mentioned link: www.bharatforge.com/investors/shareholders-information/unclaimed-dividend

15. EXTRACT OF ANNUAL RETURN

In accordance with Section 134[3][a] of the Companies Act, 2013, an extract of the Annual Return of the Company in Form MGT-9 is appended as Annexure "C” to this Report.

16. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134[5] of the Companies Act, 2013, Directors confirm that:

a. in preparation of the annual accounts for the financial year ended March 31, 2019, the applicable Accounting Standards have been followed and there were no material departures;

b. they 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 on March 31, 2019 and of the profit of the Company for that period;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

17. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

In terms of provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. B. P. Kalyani [DIN : 00267202] and Mr. Kishore Saletore [DIN : 01705850], Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment.

During the year, the Board of Directors of the Company re-appointed Mr. Amit B. Kalyani [DIN : 00089430] as the Executive Director of the Company for a period of 5 [five] years, commencing from May 11, 2019. Further, at the Board Meeting held on May 20, 2019, Mr. Amit B. Kalyani has been re-designated as a Deputy Managing Director of the Company. The appointment is subject to approval of the shareholders. Accordingly, the resolution for re-appointment of Mr. Amit B. Kalyani forms part of Notice convening the 58th Annual General Meeting ["AGM"].

As per the Retirement Policy for Non-Executive Directors of the Company, Mr. Naresh Narad [DIN : 02737423] and Dr. T. Mukherjee [DIN : 00004777] retired from the Board of the Company, from the closure of working hours on March 31, 2019. The Board places on record its sincere appreciation of the contribution made by Mr. Naresh Narad and Dr. T. Mukherjee during theirtenure with the Company.

Mr. P. G. Pawar, Mr. S. M. Thakore, Mrs. Lalita D. Gupte, Mr. Vimal Bhandari and Mr. P. H. Ravikumar were appointed as NonExecutive Independent Directors, for a period of 5 [five] years from September 4, 2014. Based on the recommendation of the Nomination and Remuneration Committee, their re-appointment for a second term of 5 [five] years is proposed at the ensuing AGM forthe approval of the Members by way ofspecial resolution.

Further, the Board of Directors in its meeting held on June 21, 2019, appointed Mr. Dipak Mane [DIN : 01215889] and Mr. Murali Sivaraman [DIN : 01461231], as Additional Independent Directors of the Company. The said appointment is till the ensuing Annual General Meeting. The Directors have proposed to appoint Mr. Dipak Mane and Mr. Murali Sivaraman as Independent Directors of the Company, for the period of 5 [five] consecutive years; which is subject to approval of the shareholders of the Company. Accordingly, the resolutions for appointment of Mr. Dipak Mane and Mr. Murali Sivaraman forms part of Notice convening the 58th Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149[6] of the Companies Act, 2013 and Regulation 25 of SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015.

The disclosures pertaining to Directors being appointed/re-appointed as required pursuant to Regulation 36 of the SEBI Listing Regulations given in the explanatory statement to the Notice convening the 58th Annual General Meeting of the Company for reference of the shareholders.

18. NUMBER OF MEETINGS OF THE BOARD

The Board met 4 [Four] times during the year. Also a separate meeting of Independent Directors was convened as prescribed under Schedule IV of Companies Act, 2013 was held during the year under review. The details of meetings of Board of Directors are provided in the Report on Corporate Governance that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days as prescribed under the Companies Act, 2013.

19. BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act, SEBI Listing Regulations and the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on May 24, 2017. The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as, the board composition and structure, effectiveness of board processes, information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as, the composition of committees, effectiveness of committee meetings etc. In a separate meeting of independent directors, performance of non-independent directors, the Chairman of the Company and the board as a whole was evaluated, taking into account the views of executive directors and non-executive directors.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as, the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc.

In the board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration Committee, the performance of the board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

20. FAMILIARISATION PROGRAMME

The Company, on a regular basis, makes detailed presentations to the entire Board including Independent Directors on the Company’s operations and business plans, strategy, global and domestic business environment and the business model of its respective businesses. Such presentations are made by the senior management/leadership team/function heads so that the Independent Directors can have direct interaction with them. The Board members are provided with necessary documents/ brochures, reports and internal policies to enable them to familiarize with the Company’s procedures and practices.

The Independent Directors were also briefed regularly on the R&D and Innovation initiatives in the Company.

The details of programmes for familiarization for Independent Directors are posted on the website of the Company and can be accessed at:

www.bharatforge.com/assets/pdf/investor/familiarisation-programme-for-independent-directors

21. BUSINESS RESPONSIBILITY REPORT

The SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 ["Regulation"] mandates inclusion of the Business Responsibility Report [BRR] as a part of Annual Report of Top 500 Listed entities based on market capitalization. In compliance with the Regulation, we have provided the BRR as a part of this Annual Report.

22. INFORMATION PURSUANT TO RULE 5 OF THE COMPANIES [APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Sr.

No.

Information Required

Input

1

The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year

Please refer Annexure "D”

2

The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;

Please refer Annexure "D”

3

The percentage increase in the median remuneration of employees in the financial year

18.60%

4

The number of permanent employees on the rolls of Company

4,711

5

Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration

Percentage increase in salaries of managerial personnel at 50th Percentile is: 15.16%

Percentage increase in salaries of non- managerial personnel at 50th Percentile is: 16.91%

The increase in remuneration is not solely based on Company performance but also includes various other factors like individual performance, experience, skill sets, academic background, industry trends, economic situation and future growth prospects etc. besides Company performance. There are no exceptional circumstances for increase in the managerial remuneration.

6

Affirmation that the remuneration is as per the remuneration policy of the Company.

The remuneration paid to the Directors is as per the Remuneration policy of the Company.

7

Statement showing the names of the top ten employees in terms of

remuneration drawn and the name of every employee, who-

[i] if employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than one crore and two lakh rupees;

[ii] if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than eight lakh and fifty thousand rupees per month;

[iii] if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company.

Please refer Annexure "E”

23. NOMINATION AND REMUNERATION POLICY

During the year, the Company has revised the Nomination and Remuneration Policy, in accordance with the SEBI [Listing Obligations and Disclosure Requirements] [Amendment] Regulations, 2018. The salient features of the Policy and changes therein are set out in the Corporate Governance Report which forms part of this Annual Report.

The said Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall formulate the criteria for appointment of Directors on the Board of the Company and persons holding Senior Management positions in the Company, including their remuneration and other matters as provided under Section 178 of the Companies Act, 2013 and SEBI Listing Regulations. The Policy is also available on the Company’s website at: www.bharatforge.com/ investors/corporate-governance/policies

24. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has implemented several best Corporate Governance practices as prevalent globally. The report on Corporate Governance as stipulated under the SEBI [Listing Obligations and Disclosures Requirements] Regulations, 2015 forms an integral part of this Annual Report. The requisite certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

25. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

During the year under review, the Board approved acquisition of 35.26% stake in Tevva Motors [Jersey] Limited, Jersey. Tevva Motors is the world’s leading developer of Electric Ranged Extended Vehicles [EREVs] and also developing sophisticated software for autonomous vehicle pollution management in urban and in environmentally sensitive locations.

As on March 31, 2019, the Company has 22 [Twenty Two] subsidiaries [including step down subsidiaries] and 2 [Two] Associate Companies. In accordance with Section 129[3] of the Companies Act, 2013, the Company has prepared the consolidated financial statement, which forms part of this Annual Report. Further, a statement containing salient features of the financial statements of our subsidiaries in the prescribed Form AOC-1 is presented in a separate section forming part of the financial statements.

Pursuant to Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and separate audited accounts in respect ofsubsidiaries, are available on the website of the Company at: http://bharatforge.com.

The Policy on Material Subsidiaries has been amended in line with the requirements of the SEBI [Listing Obligations and Disclosure Requirements] [Amendment] Regulations, 2018 and adopted w.e.f. April 1, 2019. The key changes include, inter-alia, the definition of material subsidiary. Pursuant to revised Policy and as per consolidated audited Financial Statements for the year ended March 31, 2019, Bharat Forge CDP GmbH, Bharat Forge International Limited and Bharat Forge Global Holding GmbH have become material subsidiaries of the Company.

26. AUDIT COMMITTEE

The Audit Committee comprises of Mr. P. G. Pawar- Chairman of the Committee and Independent Director, Mr. S. M. Thakore - Independent Director, Mr. P. H. Ravikumar - Independent Director and Mr. P. C. Bhalerao - Non-Executive Director.

All the recommendations made by the Audit Committee were deliberated and accepted by the Board during the financial year 2018-19.

27. AUDITORS

A. Statutory Auditors and Audit Report

At the 56th Annual General Meeting of the Company held on August 10, 2017, M/s. S R B C & CO LLP, Chartered Accountants, Pune [Firm Registration No. 324982E/E300003] were appointed as Statutory Auditors to hold office up to the conclusion of the 61st Annual General Meeting of the Company to be held in the year 2022, subject to ratification of appointment at every Annual General Meeting. However, the Companies [Amendment] Act, 2017, published in the Gazette of India on January 3, 2018, omitted first proviso to Section 139[1] of Companies Act 2013, which provided for ratification of appointment of Statutory Auditors by members at every AGM. The said amendment has been effective from May 7, 2018.

In view of the above, at the 57th Annual General Meeting of the Company held on August 9, 2018, the members of the Company ratified the appointment of M/s. S R B C & CO LLP, Chartered Accountants, Pune [Firm Registration No. 324982E/E300003], as Statutory Auditors of the Company, up to the conclusion of the 61st Annual General Meeting of the Company to be held in the year 2022 and the Statutory Auditors are not liable for ratification at every Annual General Meeting.

The Auditor’s Report for FY 2018-19 does not contain any qualification, reservation or adverse remark. The Auditor’s Report is enclosed with the Financial Statements in this Annual Report.

B. Secretarial Auditor and the Audit

The Board has appointed M/s. SVD & Associates, Company Secretaries, Pune, to conduct Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report for the financial year ended March 31, 2019 is appended as Annexure "F” to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Further, as required under Section 204 of the Companies Act, 2013 and Rules there under, the Board has appointed M/s. SVD & Associates, Company Secretaries, Pune, to conduct Secretarial Audit for the financial year 2019-20.

C. Cost Auditors

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s. Dhananjay V. Joshi & Associates, Cost Accountants, Pune, [Firm Registration No. : 00030] as Cost Auditors to audit the cost accounts of the Company for the financial year 2019-20. As required under the Companies Act, 2013, a resolution seeking Member’s approval for the remuneration payable to the Cost Auditors forms part of Notice convening the 58th Annual General Meeting.

The Cost Audit report for the Financial Year 2017-18 was filed with the Ministry of Corporate Affairs on October 8, 2018.

D. Reporting offraud by auditors

During the year under review, the Auditors of the Company have not reported any fraud as specified under Section 143[12] of the Companies Act, 2013 to the Audit Committee.

28. CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES

The Company has been carrying out various Corporate Social Responsibility [CSR] activities. These activities are carried out in terms of Section 135 read with Schedule VII of the Companies Act, 2013 as amended from time to time and the Companies [Corporate Social Responsibility Policy] Rules, 2014.

The brief outline of the Corporate Social Responsibility [CSR] policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure "G” of this report in the format prescribed in the Companies [Corporate Social Responsibility Policy] Rules, 2014. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which is a part of this report. The CSR policy is also available on the Company’s website at the link: www.bharatforge.com/investor/policy

29. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE [PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace [Prevention, Prohibition and Redressal] Act, 2013 and the Rules made thereunder for prevention and redressal of complaints of sexual harassment at workplace. All women associates [permanent, temporary, contractual and trainees] as well as any women visiting the Company’s office premises or women service providers are covered under this Policy.

During the year under review, no complaints were received by the Committee constituted under the Sexual Harassment ofWomen at Workplace [Prevention, Prohibition and Redressal] Act, 2013, which has been resolved.

30. VIGIL MECHANISM

The Company has formulated a Whistle Blower Policy, wherein the Employees / Directors / Stakeholders of the Company are free to report any unethical or improper activity, actual or suspected fraud or violation of the Company’s Code of Conduct. The policy provides for a mechanism to report such concerns to the Audit Committee through specified channels. This mechanism provides safeguards against victimization of Employees, who report under the said mechanism. During the year, the Whistleblower Policy was amended and adopted w.e.f. April 1, 2019 in line with SEBI [Listing Obligations and Disclosure Requirements] [Amendment] Regulations, 2018 enabling employees to report instances of leak of Unpublished Price Sensitive Information [UPSI],

During the year under review, the Company has not received any complaints under the said mechanism. The Whistle Blower Policy of the Company has been displayed on the Company’s website at the link: www.bharatforge.com/investors/corporate-governance/policies

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

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134[3][m] of the Companies Act, 2013 read with Rule 8 of the Companies [Accounts] Rules, 2014 are appended as Annexure "H” to this report.

32. GREEN INITIATIVES

The Company supports and pursues the "Green Initiative” of the Ministry of Corporate Affairs, Government of India. The Company has effected electronic delivery of Notice of Annual General Meeting and Annual Report to those Members whose e-mail IDs are registered with the Company / Depository Participants. The Companies Act, 2013 and the underlying rules as well as Regulation 36 of Securities and Exchange Board of India [Listing Obligations and Disclosure Requirements] Regulations, 2015, permit the dissemination of financial statements and annual report in electronic mode to the Members.

For members who have not registered their email addresses, physical copies are sent in the permitted mode.

Your Directors are thankful to the Members for actively participating in the Green Initiative and seek your continued support for implementation of the green initiative.

33. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company complies with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

34. ACKNOWLEDGEMENT

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

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

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

For and on behalf of the Board of Directors

B. N. KALYANI

Chairman and Managing Director

Pune: June 21, 2019


Mar 31, 2018

To the Members,

The Directors have pleasure in presenting the 57th (Fifty-seventh) Annual Report on the business and operations of the Company together with the audited financial statements for the Financial Year ended March 31, 2018.

1. FINANCIAL HIGHLIGHTS

The financial performance of the Company on standalone and consolidated basis for the Financial Year ended March 31, 2018 as compared to previous year is summarised in the following table:

In Rs. Million

Particulars

Standalone

Consolidated

FY 2018

FY 2017

FY 2018

FY 2017

Total Income

54,916.37

41,656.18

85,566.79

67,174.35

Revenue outside India

29,711.73

19,417.50

59,936.19

44,817.70

Net Profit

Profit for the year before Taxation & Exceptional Item

12,638.75

8,044.68

12,915.87

8,183.39

Share of (loss)/ Profit of associates and Joint Venture

-

-

(3.78)

0.20

Add/(Less): Exceptional Item

(1,332.05)

380.24

(954.48)

1,284.29

Provision for Taxation:

Current tax

4,161.42

2,600.04

4,318.49

2,704.79

Deferred tax

72.33

(25.89)

99.44

(213.12)

Profit for the year from continuing operations

7,072.95

5,850.77

7,539.68

6,976.01

Profit for the year from discontinued operations

-

-

-

131.17

Profit for the year

7,072.95

5,850.77

7,539.68

7,107.18

Less : Non-controlling interests

-

-

(84.76)

61.02

Profit for the year attributable to equity holders of the parent

7,072.95

5,850.77

7,624.44

7,046.16

Items of other comprehensive income (net of tax)

202.71

48.82

251.19

(14.93)

Total

7,275.66

5,899.59

7,875.63

7,031.23

Balance of Profit from previous year

29,429.22

23,405.20

28,493.30

21,337.64

Debenture Redemption Reserve written back

-

1,065.00

-

1,065.00

Profit available for appropriation

36,704.88

30,369.79

36,368.93

29,433.87

APPROPRIATIONS:

Interim Dividend on Equity Shares

931.18

581.99

931.18

581.99

Tax on above dividend

189.56

118.48

189.56

118.48

Final Dividend on Equity Shares

1,163.97

116.40

1,163.97

116.40

Tax on above dividend

236.96

23.70

236.96

23.70

Transfer to General Reserve

100.00

100.00

100.00

100.00

Adjustment during the year

-

-

71.02

-

Surplus retained in Statement of Profit and Loss

34,083.21

29,429.22

33,676.24

28,493.30

2. DIVIDEND

The Board, in its meeting held on November 8, 2017 declared an interim dividend of Rs.2/- per equity share (i.e.100%) of the face value of Rs.2/- each aggregating to Rs.931.18 Million plus applicable taxes thereon.

Based on the Company’s performance, the Directors are pleased to recommend for approval of the members a final dividend of Rs.2.50 per equity share (i.e. 125%) of the face value of Rs.2/- each. The final dividend on equity shares, if approved by the members would involve a cash outflow of Rs.1,163.97 Million plus a dividend tax of Rs.239.26 Million.

The total dividend for the financial year ended March 31, 2018, including the proposed final dividend would aggregate to Rs.2,523.97 Million inclusive of the dividend tax.

The dividend payout has been formulated in accordance with the Dividend Distribution Policy of the Company.

3. RESERVES

During the year under review, the Company proposes to transfer Rs.100.00 Million to the General Reserve.

An amount of Rs.34,083.21 Million is proposed to be retained as surplus in the Statement of Profit and Loss.

4. PERFORMANCE OF THE COMPANY

a) Total Income:

During the year under review, the total income of the Company on a standalone basis amounted to Rs.54,916.37 Million as against Rs.41,656.18 Million in the previous year, representing an increase of 31.83%.

b) Revenue from Exports:

During the year under review, the exports turnover of the Company on a standalone basis was Rs.29,711.73 Million against Rs.19,417.50 Million in the previous year, representing an increase of 53.02%. The increase in exports was primarily on account of strong market demand and increase in market share in the heavy commercial vehicle business. The Company has continued to de-risk its export business through new product development and new order wins across sectors and geographies.

5. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Particulars of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013, form part of notes to the financial statement provided in this Annual Report.

6. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts or arrangements entered into by the Company with Related Parties are at arm’s length and are in the ordinary course of business.

Pursuant to Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of transactions with related parties are provided in Form AOC-2 which is annexed as Annexure “A” to this report. Related Party disclosures as per Ind AS 24 have been provided in Note 39 to the financial statement.

The policy on Related Party Transactions as approved by the Board has been displayed on the Company’s website at: http://bharatforge.com/images/PDFs/policies/BFL.RPT%20 Policy.pdf

There has been no change to the policy on Related Party Transactions during the financial year ended March 31, 2018.

7. DEPOSITS

During the year under review, the Company has not accepted any deposit under Chapter V of the Companies Act, 2013.

8. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

9. RISK MANAGEMENT

The Company has a robust risk management framework comprising risk governance structure and defined risk management processes. The Board of Directors of the Company has formed a Finance and Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis (MDA), which forms part of this report.

10. MATERIAL CHANGES AND COMMITMENTS, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no adverse material changes or commitments occurred after March 31, 2018 which may affect the financial position of the Company or may require disclosure.

11. SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

12. STATE OF COMPANY’S AFFAIRS

Discussion on state of affairs of the Company has been covered as part of the Management Discussion and Analysis (MDA). MDA for the year under review, as stipulated under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, is presented in a separate section forming part of this Annual Report.

13. SHARE CAPITAL

The fully paid-up Equity Share Capital of the Company as on March 31, 2018 stood at Rs.931.18 Million.

During the year, the Company has allotted Bonus equity shares in the ratio 1:1 (i.e. 1 equity share for every 1 fully paid-up equity share of the Company). The Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2018, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

14. TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (‘IEPF’)

Pursuant to the provisions of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules), the declared dividends, which remained unpaid or unclaimed for a period of seven (7) years and shares thereof shall be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Accordingly, during the year, the Company has transferred the unpaid or unclaimed dividend for a period of seven (7) years from the date they became due for payment alongwith the shares thereof, to IEPF. The shareholders have option to claim their shares and / or amount of dividend transferred from IEPF. No claim shall be entertained against the Company for the amounts and shares so transferred.

The list of equity shareholders whose shares are transfered to IEPF can be accessed on the website of the Company at below mentioned link:http://bharatforge.com/images/PDFs/Unclaimed_Dividend/DETAILS0/o200F%20SHARES0/o20TRANSFERED0/o20T00/o20IEPF.PDF.

The Company has sent the notice to the respective shareholders who have not claimed dividend for seven (7) consecutive years and whose shares are liable to be transferred to IEPF during the financial year 2018

19. The newspaper advertisement stating the same has also been published in the newspapers. The list of equity shareholders whose shares are liable to be transfred to IEPF can be accessed on the website of the Company at below mentioned link:http://bharatforge.com/images/PDFs/Unclaimed_Dividend/List%20of%20Shareholders%20whose%20Shares%20are%20liable%20to%20transfer%20to%20IEPF%20-%202018.pdf.

15. DIVIDEND DISTRIBUTION POLICY

The Securities and Exchange Board of India (‘SEBI’) vide notification bearing No. SEBI/LAD-NR0/GN/2016-17/008 dated July 8, 2016 has inserted Regulation 43A Dividend Distribution Policy to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. According to this regulation, it is mandatory for the top five hundred listed entities based on market capitalization (calculated as on March 31 of every financial year) to formulate a Dividend Distribution Policy.

Accordingly, the Board of Directors of the Company has, on recommendation of the Audit Committee, adopted the Dividend Distribution Policy. The Dividend Distribution Policy of the Company is enclosed as Annexure “B” to this report and is also available on the Company’s website, at : http:// bharatforge.com/images/PDFs/policies/Dividend%20 Distribution%20Policy.pdf.

16. EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the Annual Return of the Company in Form MGT-9 is appended as Annexure “C” to this Report.

17. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, Directors confirm that:

a. in preparation of the annual accounts for the financial year ended March 31, 2018, the applicable Accounting Standards have been followed and there were no material departures;

b. they 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 on March 31, 2018 and of the profit of the Company for that period;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

18. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

In terms of provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. P. C. Bhalerao (DIN: 00037754) and Mr. S. E. Tandale, (DIN: 00266833), Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment.

Brief profiles of Mr. P. C. Bhalerao and Mr. S. E. Tandale, Directors of the Company are given in the Notice convening the 57th Annual General Meeting of the Company for reference of the shareholders.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the year under review, the Board of Directors of the Company re-appointed Mr. B. N. Kalyani (DIN: 00089380) as a Managing Director of the Company for a period of 5 (five) years, commencing from March 30, 2018 and Mr. G. K. Agarwal (DIN: 00037678) as a Deputy Managing Director of the Company for the period of 5 (five) years, commencing from April 1, 2018. Both the appointments are subject to approval of the sharesholders. Accordingly, the resolution for re-appointment of Mr. B. N. Kalyani and Mr. G. K. Agarwal forms part of Notice convening the 57th Annual General Meeting.

19. NUMBER OF MEETINGS OF THE BOARD

The Board met 5 (five) times during the year. Also a separate meeting of Independent Directors was convened as prescribed under Schedule IV of Companies Act, 2013 was held during the year under review. The details of meetings of Board of Directors are provided in the Report on Corporate Governance that forms a part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days as prescribed under the Companies Act, 2013.

20. BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Companies Act, 2013 SEBI Listing Regulations and the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on May 24, 2017. The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. In a separate meeting of independent directors, performance of nonindependent directors, the Chairman of the Company and the board as a whole was evaluated, taking into account the views of executive directors and non-executive directors.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc.

In the board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration Committee, the performance of the board, its committees, and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

21. FAMILIARISATION PROGRAMME

The Company, on a regular basis, makes detailed presentations to the entire Board including Independent Directors on the Company’s operations and business plans, strategy, global and domestic business environment and the business model of its respective businesses. Such presentations are made by the senior management/ leadership team/function heads so that the Independent Directors can have direct interaction with them. The Board members are provided with necessary documents/ brochures, reports and internal policies to enable them to familiarise with the Company’s procedures and practices.

During the year in October 2017, the Company organised a Plant Tour at Bharat Forge Aluminiumtechnik, Germany for Independent Directors along with Senior Management team to apprise the directors on the detailed operational aspects and the business of the Subsidiary Companies. Deep dives and immense sessions were conducted by senior executives on their respective business units. The Directors were apprised on key aspects including the industry/market and technology trends, the Company’s performance, Strategic bets and their progress and future outlook.

The Independent Directors were also briefed regularly on the R&D and Innovation initiatives in the Company. Additionally, visit to KCTI - Research and Development Centre, Pune of the Company was organized for the Independent Directors.

The details of programmes for familarisation for Independent Directors are posted on the website of the Company and can be accessed at:http://bharatforge.com/images/PDFs/BFL-Familiarisation%20Programme%20for%20Independent%20Directors-22%2005%2018.pdf

22. BUSINESS RESPONSIBILITY REPORT

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Regulation”) mandates inclusion of the Business Responsibility Report (BRR) as a part of Annual Report of Top 500 Listed entities based on market capitalization. In compliance with the Regulation, we have provided the BRR as a part of this Annual Report.

23. INFORMATION PURSUANT TO RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Sr. No.

Information Required

Input

1

The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year

Please refer Annexure “D”

2

The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year

Please refer Annexure “D”

3

The percentage increase in the median remuneration of employees in the financial year

10.37%

4

The number of permanent employees on the rolls of company

4715

5

Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.

Percentage increase in salaries of managerial personnel at 50th Percentile is: 7.97%.

Percentage increase in salaries of non-managerial personnel at 50th Percentile is: 12.77%.

The increase in remuneration is not solely based on company’s performance but also includes various other factors like individual performance, experience, skill sets, academic background, industry trends, economic situation and future growth prospects etc. besides Company performance. There are no exceptional circumstances for increase in the managerial remuneration.

6

Affirmation that the remuneration is as per the remuneration policy of the company.

The remuneration paid to the Directors is as per the Remuneration policy of the company.

7

Statement showing the names of the top ten employees in terms of remuneration drawn and the name of every employee, who-

(i) if employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than one crore and two lakh rupees;

(ii) if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than eight lakh and fifty thousand rupees per month;

(iii) if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself/herself or along with his/her spouse and dependent children, not less than two percent of the equity shares of the company.

Please refer Annexure “E”

24. NOMINATION AND REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Personnel and their remuneration. The Nomination and Remuneration Policy is available on the Company’s website at :http://bharatforge.com/images/PDFs/policies/NOMINATION_AND_REMUNERATION_POLICY.PDF

There has been no change to the Nomination and Remuneration Policy during the financial year ended March 31, 2018.

25. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has implemented several best Corporate Governance practices as prevalent globally. The report on Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 forms an integral part of this Anual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

26. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

During the year under review, the Board approved acquisiotion of 45% stake in TORK Motors India Private Limited, Pune in three tranches. Accordingly, the Company has acquired first tranche of 30.37%. TORK Motors is an electric drive train company mainly focused on electrical two wheeler and/or premium electric motor cycle.

During the year the Company also incorporated a wholly owned subsidiary in Israel viz. Indigeneous IL Limited with an objective of exploring targets in technology, space and also explore tie-ups with universities/tehnology institutions in further upgrading research and development initiatives in various new technologies.

The Company has purchased remaining 40% shares of Analogic Control India Limited (ACIL), from its erstwhile promoters. With this acquisition, ACIL became a Wholly-Owned Subsidiary of the Company.

Further, during the year the Company has completed the sale of remaining balance equity of 26% in the power equipment Joint Venture, Alstom Bharat Forge Power Private Limited (ABFPPL). With this divestment, the Company has completed its total divestment in ABFPPL.

In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared the consolidated financial statements, which forms part of this Annual Report. Further, a statement containing the salient features of the financial statements of our subsidiaries in the prescribed Form AOC-1 is presented in a separate section forming part of the financial statements.

Pursuant to Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and separate audited accounts in respect of subsidiaries, are available on the website of the Company at: http://bharatforge.com.

The Policy for determining ‘Material’ subsidiaries has been displayed on the Company’s website at the link: http:// bharatforge.com/images/PDFs/policies/Policy%20on%20 Material%20Subsidiary-BFL.PDF.

There has been no change to the Policy for determining ‘Material’ subsidiaries during the financial year ended March31, 2018.

27. AUDIT COMMITTEE

The Audit Committee comprises of Mr. P. G. Pawar -Chairman of the Committee and Independent Director, Mr. S. M. Thakore - Independent Director, Mr. P. H. Ravikumar- Independent Director and Mr. P. C. Bhalerao - Non Executive Director.

All the recommendations made by the Audit Committee were deliberated and accepted by the Board during the financial year 2017-18.

28. AUDITORS

A. Statutory Auditors

At the 56th Annual General Meeting (AGM) of the Company held on Thursday, August 10, 2017, M/s. S R B C & CO LLP, Chartered Accountants, Pune (Firm Registration No. 324982E/E300003) were appointed as Statutory Auditors to hold office upto the conclusion of the 61stAnnual General Meeting of the Company to be held in the year 2022 subject to ratification of appointment at every Annual General Meeting. However, the Companies (Amendment) Act, 2017, published in the Gazette of India on January 3, 2018, omitted first proviso to Section 139(1) of Companies Act, 2013, which provided for ratification of appointment of Statutory Auditors by members at every AGM which has been effective from May 7, 2018.

In view of the above, the Board of Directors of the Company have proposed to ratify the appointment of Statutory Auditors and recommended to continue their appointment for the period of four years commencing from the conclusion of this AGM till the conclusion of AGM to be held in the year 2022, without seeking any further ratification of their appointment from members at the ensuing AGMs.

In this regard, the Company has received a certificate from the Auditors to the effect that if their appointment is made by the shareholder, will be in accordance with the provisions of Section 141 of the Companies Act, 2013.

B. Secretarial Auditor and the Audit

The Board has appointed M/s. SVD & Associates, Company Secretaries, Pune, to conduct Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report for the financial year ended March 31, 2018 is appended as Annexure “F” to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Further, as required under Section 204 of the Companies Act, 2013 and Rules thereunder, the Board has appointed M/s. SVD & Associates, Company Secretaries, Pune, to conduct Secretarial Audit for the financial year 2018-19.

C. Cost Auditors

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s. Dhananjay V. Joshi & Associates, Cost Accountants, Pune, (Firm Registration No. : 00030) as Cost Auditors to audit the cost accounts of the Company for the financial year 2018-19. As required under the Companies Act, 2013, a resolution seeking Member’s approval for the remuneration payable to the Cost Auditors forms part of Notice convening the 57th Annual General Meeting.

The Cost Audit Report for the Financial Year 2016-17 has been filed with the Ministry of Corporate Affairs on September 27, 2017.

D. Reporting of fraud by Auditors

During the year under review, the Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013 to the Audit Committee.

29. CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES

The Company has been carrying out various Corporate Social Responsibility (CSR) activities. These activities are carried out in terms of Section 135 read with Schedule VII of the Companies Act, 2013 as amended from time to time and the Companies (Corporate Social Responsibility Policy) Rules, 2014.

During the year under review, the Company has spent Rs.218.45 Million on various CSR activities.

The CSR Committee of the Company comprises of Mr. P. G. Pawar, Chairman of the Committee and Independent Director, Mr. B. N. Kalyani, Chairman and Managing Director and Mr. Amit B. Kalyani, Executive Director.

The Annual Report on CSR activities and the CSR initiatives taken during the year is appended as Annexure “G” to this report.

30. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal Act, 2013) and the Rules made thereunder for prevention and redressal of complaints of sexual harassment at workplace. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Company’s office premises or women service providers are covered under this Policy.

During the year under review, there was 1 (one) complaint received to the Committee constituted under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, which has been resolved.

31. VIGIL MECHANISM

The Company has formulated a Whistle Blower Policy, wherein the Employees / Directors / Stakeholders of the Company are free to report any unethical or improper activity, actual or suspected fraud or violation of the Company’s Code of Conduct. The policy provides for a mechanism to report such concerns to the Audit Committee through specified channels. This mechanism provides safeguards against victimisation of Employees, who report under the said mechanism. The Whistle Blower Policy complies with the requirements of Vigil Mechanism as stipulated under Section 177 of the Companies Act, 2013.

During the year under review, the Company has not received any complaints under the said mechanism. The Whistle Blower Policy of the Company has been displayed on the Company’s website at the link: http://bharatforge.com/images/PDFs/policies/BFL%20Whistle%20Blower%20Policy-Signed.pdf

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

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are appended as Annexure “H” to this report.

33. GREEN INITIATIVES

The Company supports and pursues the ‘‘Green Initiative’’ of the Ministry of Corporate Affairs, Government of India. The Company has effected electronic delivery of Notice of Annual General Meeting and Annual Report to those Members whose e-mail IDs are registered with the Company / Depository Participants. The Companies Act, 2013 and the underlying rules as well as Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, permit the dissemination of financial statements and annual report in electronic mode to the Members.

For members who have not registered their email addresses, physical copies are sent in the permitted mode.

Your Directors are thankful to the Members for actively participating in the Green Initiative and seek your continued support for implementation of the green initiative.

34. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company complies with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

35. ACKNOWLEDGEMENT

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

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

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

For and on behalf of the Board of Directors

B. N. KALYANI

Chairman and Managing Director

(DIN: 00089380)

Pune : May 22, 2018


Mar 31, 2017

To the Members,

The Directors have pleasure in presenting the 56th (Fifty-sixth) Annual Report on the business and operations of the Company together with the audited financial statements for the Financial Year ended March 31, 2017.

1. FINANCIAL HIGHLIGHTS

The financial performance of the Company on standalone and consolidated basis for the Financial Year ended March 31, 2017 as compared to previous year is summarised in the following table:

In Rs. Million

Standalone

Consolidated

FY 2017

FY 2016

FY 2017

FY 2016

Total Income

41,656.18

46,378.22

67,174.35

71,336.83

Revenue outside India

19,417.50

24, 984.73

44,817.70

49,742.00

Net Profit

Profit for the year before Taxation & Exceptional Item

8,044.68

10,302.00

8,183.39

9,712.72

Add/(Less): Exceptional Item

380.24

(42.20)

1,284.29

(54.69)

Provision for Taxation:

Current tax

2,600.04

3,130.86

2,703.68

3,219.88

Deferred tax

(25.89)

152.76

(213.12)

(55.33)

Adjustment of tax relating to earlier year/MAT credit

-

-

1.11

0.21

Profit for the year from continuing operations

5,850.77

6,976.18

6,976.01

6,493.27

Profit for the year from discontinued operations

-

-

131.17

260.33

Profit for the year

5,850.77

6,976.18

7,107.18

6,753.60

Less: Non-controlling interests

-

-

61.02

(30.95)

Profit for the year attributable to equity holders of the parent

5,850.77

6,976.18

7,046.16

6,784.55

Items of other comprehensive income (net of tax)

48.82

(73.65)

(14.93)

(45.87)

Total

5,899.59

6,902.53

7,031.23

6,738.68

Balance of Profit from previous year

23,405.20

19,824.80

21,337.64

17,921.09

Debenture Redemption Reserve written back

1,065.00

-

1,065.00

-

Profit available for appropriation

30,369.79

26,727.33

29,433.87

24,659.77

APPROPRIATIONS:

Interim Dividend on Equity Shares

581.99

1,629.56

581.99

1,629.56

Tax on above dividend

118.48

331.74

118.48

331.74

Final Dividend on Equity Shares

116.40

1,047.57

116.40

1,047.57

Tax on above dividend

23.70

213.26

23.70

213.26

Transfer to General Reserve

100.00

100.00

100.00

100.00

Adjustment during the year

-

-

82.06

-

Surplus retained in Statement of Profit and Loss

29,429.22

23,405.20

28,411.24

21,337.64

2. INDIAN ACCOUNTING STANDARDS

The Ministry of Corporate Affairs (MCA), vide its notification dated February 16, 2015, notified the Indian Accounting Standards (Ind AS) applicable to certain classes of companies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

Being applicable, the Company has adopted Ind AS from April 1, 2016 and accordingly, the transition was carried out, from the Accounting Principles generally accepted in India as specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 (previous GAAP) to Ind AS 101 “First time adoption of Indian Accounting Standards”.

The impact of transition has been recorded in opening reserves as at April 1, 2015 and the periods presented have been restated / reclassified.

The reconciliation and descriptions of the effect of the transition from Indian GAAP to Ind AS have been provided in Note 55 in the notes to accounts in the standalone and consolidated financial statements.

3. DIVIDEND

The Board, in its meeting held on February 8, 2017 declared an interim dividend of Rs.2.50/- per equity share (i.e.125%) of the face value of Rs.2/- each aggregating to Rs.700.47 Million inclusive of dividend tax.

Based on the Company’s performance, the Directors are pleased to recommend for approval of the members a final dividend of Rs.5/- per equity share (i.e. 250%) of the face value of Rs.2/- each. The final dividend on equity shares, if approved by the members would involve a cash outflow of Rs.1,163.97 Million plus a dividend tax of Rs.236.96 Million.

The total dividend for the financial year ended March 31, 2017, including the proposed final dividend would aggregate to Rs.2,101.40 Million inclusive of the dividend tax.

The final dividend payout has been formulated in accordance with the Dividend Distribution Policy of the Company.

4. RESERVES

During the year under review, the Company proposes to transfer Rs.100.00 Million to the General Reserve.

An amount of Rs.29,429.22 Million is proposed to be retained as surplus in the Profit and Loss account.

5. PERFORMANCE OF THE COMPANY

a) Total Income:

During the year under review, the total income of the Company on a standalone basis amounted to Rs.41,656.18 Million as against Rs.46,378.22 Million in the previous year, representing a decrease of 10.20%. The total domestic revenue of the Company has grown by 4.80%.

Further, during the year under review, the Company has secured long term export orders of US$ 80 Million and domestic order of Rs.2,700 Million from the domestic market across various segments and geographies for the existing as well as new products.

b) revenue from Exports:

During the year under review, the exports turnover of the Company on a standalone basis was Rs.19,418 Million against Rs.24,985 Million in the previous year, representing a decrease of 22.3%. The decline in exports was primarily on account of weakness in end demand from the North American market. The Company has continued to de-risk its export business through new product development and new order wins across sectors and geographies.

6. particulars of loans, guarantees or investments under section 186 of the companies ACT, 2013

Particulars of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013, form part of notes to the financial statement provided in this Annual Report.

7. PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES

All contracts or arrangements entered into by the Company with Related Parties are at arm’s length and are in the ordinary course of business.

Pursuant to Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of transactions with related parties are provided in Form AOC-2 which is annexed as Annexure “A” to this report. Related Party disclosures as per Ind AS 24 have been provided in Note 39 to the financial statement.

The policy on Related Party Transactions as approved by the Board has been displayed on the Company’s website at: http://bharatforge.com/images/PDFs/policies/BFL.RPT%20Policy.pdf

There has been no change to the policy on Related Party Transactions during the financial year ended March 31, 2017.

8. Deposits

During the year under review, the Company has not accepted any deposit under Chapter V of the Companies Act, 2013.

9. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statement. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

10. RISK MANAGEMENT

The Company has a robust risk management framework comprising risk governance structure and defined risk management processes. The risk governance structure of the Company is a formal organisation structure with defined roles and responsibilities for risk management.

The processes and practices of risk management of the Company encompass risk identification, classification and evaluation. The Company identifies all strategic, operational and financial risks that the Company faces, by assessing and analysing the latest trends in risk information available internally and externally and using the same to plan for risk management activities.

The Company has set-up a Finance and Risk Management Committee to review the risks faced by the Company and monitor the development and deployment of risk mitigation action plans. The Finance and Risk Management Committee reports to the Board of Directors and the Audit Committee who provide oversight for the entire risk management framework of the Company.

As a part of the Company’s strategic planning process, the Directors have reviewed the risk management processes and the risks faced by the Company and the corresponding risk mitigation plans deployed. The Company is on track in respect of its risk mitigation activities.

11. MATERIAL CHANGES AND COMMITMENTS, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no adverse material changes or commitments occurred after March 31, 2017 which may affect the financial position of the Company or may require a disclosure.

12. SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

13. STATE OF COMPANY’S AFFAIRS

Discussion on state of affairs of the Company has been covered as part of the Management Discussion and Analysis (MDA). MDA for the year under review, as stipulated under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of this Annual Report.

14. SHARE CAPITAL

The paid-up Equity Share Capital of the Company as on March 31, 2017 stood at Rs.465.59 Million. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2017, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

15. REDEMPTION OF DEBENTURES

The 30% installment of Company’s 10.75% Secured Redeemable Non-Convertible Debentures of face value of Rs.1,000,000/- each was due for redemption on April 28, 2016. The Company has paid the said installment on April 28, 2016. With this payment of final installment, the 10.75% Secured Redeemable Non-Convertible Debentures of face value of Rs.1,000,000/- stand fully redeemend as on April 28, 2016.

The 33.34% installment of Company’s 11.95% Secured Redeemable Non-Convertible Debentures of face value of Rs.1,000,000/- each was due for redemption on January 5, 2017. The Company has paid the said installment on January 5, 2017. With this payment of third and final installment, the 11.95% Secured Redeemable Non-Convertible Debentures of face value of Rs.1,000,000/- each stand fully redeemed as on January 5, 2017.

As a result, all the debentures of the Company stand redeemed during FY 2016-17.

16. TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (‘IEPF’)

Pursuant to provisions of the Companies Act, 2013, the declared dividends, which remained unpaid or unclaimed for a period of seven years, shall be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Accordingly, the unpaid or unclaimed dividend remaining unpaid / unclaimed for a period of seven years from the date they became due for payment, have been transferred to the IEPF established by the Central Government. No claim shall be entertained against the Company for the amounts so transferred.

Recently, the MCA has notified the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules). Pursuant Section 124(6) of the Companies Act, 2013 read with IEPF Rules as amended, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more, shall be transferred by the Company to the IEPF.

Accordingly, the Company has sent notice to the respective shareholders who have not claimed dividend for seven consecutive years or more and the newspaper advertisement stating the same has been published in the newspapers. The list of equity shareholders whose shares are liable to be transfered to IEPF can be accessed on the website of the Company at below mentioned link:http://bharatforge.com/images/PDFs/Unclaimed_Dividend/List%20of%20Shareholders%20and%20shares%20due%20to%20transfer%20to%20the%20IEPF%202016%2003%2010.pdf

17. DIVIDEND DISTRIBUTION POLICY

The Securities and Exchange Board of India (‘SEBI’) vide notification bearing No. SEBI/LAD-NR0/GN/2016-17/008 dated July 8, 2016 has inserted Regulation 43A Dividend Distribution Policy to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. According to this regulation, it is mandatory for the top five hundred listed entities based on market capitalization (calculated as on March 31st of every financial year) to formulate a Dividend Distribution Policy.

Accordingly, the Board of Directors of the Company has on recommendation of the Audit Committee adopted the Dividend Distribution Policy. The Dividend Distribution Policy of the Company is enclosed as Annexure “B” to this report and is also available on the Company’s website at:http://bharatforge.com/images/PDFs/policies/Dividend%20Distribution%20Policy.pdf.

18. EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the Annual Return of the Company in Form MGT-9 is appended as Annexure “C” to this Report.

19. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, Directors confirm that:

a. in preparation of the annual accounts for the financial year ended March 31, 2017, the applicable Accounting Standards have been followed and there were no material departures;

b. they 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 on March 31, 2017 and of the profit of the Company for that period;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

20. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

In terms of provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. G. K. Agarwal and Mr. Kishore saletore, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment.

Brief profiles of Mr. G. K. Agarwal and Mr. Kishore Saletore, Directors of the Company are given in the Notice convening the 56th Annual General Meeting of the Company for reference of the shareholders.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the year under review, Ms. Tejaswini Chaudhari has been appointed as a Deputy Company Secretary and Compliance Officer of the Company with effect from July 16, 2016 due to resignation of Mr. Anand Daga, Vice President (Legal) and Company Secretary from services of the Company effective from July 15, 2016.

21. NUMBER OF MEETINGS OF THE BOARD

The Board met 5 (five) times during the year. Also a separate meeting of Independent Directors as prescribed under Schedule IV of Companies Act, 2013 was held during the year under review. The details of meetings of Board of Directors are provided in the Report on Corporate Governance that forms a part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days as prescribed under the Companies Act, 2013.

22. BOARD EVALUATION

SEBI vide a Circular No. SEBI/HO/CFD/CMD/ CIR/P/2017/004 dated January 5, 2017 has issued a guidance note on Board Evaluation. Based on the guidance note issued by SEBI and on recommendations of the Nomination and Remuneration Committee of the Company, the revised evaluation criterion of performance of Independent Directors and Board of Directors of the Company has been adopted by the Board of Directors of the Company.

Further, pursuant to provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. Performance evaluation has been carried out as per the Nomination and Remuneration Policy of the Company.

In a separate meeting of independent directors, performance of non-independent directors and the board as a whole was evaluated. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

23. FAMILIARISATION PROGRAMEE

The Board members are provided with necessary documents/brochures, reports and internal policies to enable them to familiarise with the Company’s procedures and practices. Periodic presentations are made at the Board Meetings, Board Committee Meetings and Independent Directors Meetings, on business and performance updates of the Company, global business environment, business strategy and risks involved. The details of programmes for familarisation for Independent Directors are posted on the website of the Company and can be accessed at: http://bharatforge.com/images/PDFs/investor_ reports/BFL-Familiarisation%20Programme%20 for%20Independent%20Directors-24%2005%2017. pdf

24. BUSINESS RESPONSIBILITY REPORT

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (“Regulation”) mandates inclusion of the Business Responsibility Report (BRR) as a part of Annual Report for Top 500 Listed entities based on market capitalization. In compliance with the Regulation, we have provided the BRR as a part of this Annual Report.

26. NOMINATION AND REMUNERATION POLICY

25. INFORMATION PURSUANT TO RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Sr.No.

Information Required

Input

1

The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year.

Please refer Annexure “D”

2

The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year.

Please refer Annexure “D”

3

The percentage increase in the median remuneration of employees in the financial year.

5.02%

4

The number of permanent employees on the rolls of Company.

4,727

5

Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.

Percentage increase in salaries of managerial personnel at 50th Percentile is: (0.06%)

Percentage increase in salaries of non-managerial personnel at 50th Percentile is: 5.81%

The increase in remuneration is not solely based on Company’s performance but also includes various other factors like individual performance, experience, skill sets, academic background, industry trends, economic situation and future growth prospects etc. besides Company performance. There are no exceptional circumstances for increase in the managerial remuneration.

6

Affirmation that the remuneration is as per the Remuneration Policy of the Company.

The remuneration paid to the Directors/KMP is as per the Remuneration Policy of the Company.

7

Statement showing the name of every employee of the Company,

who-

(i) if employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than one crore and two lakh rupees;

(ii) if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than eight lakh and fifty thousand rupees per month;

(iii) if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the Managing Director or Whole-time Director or Manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company.

Please refer Annexure “E”

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Personnel and their remuneration. The Nomination and Remuneration Policy is appended as

Annexure “F” to this report and is also available on the Company’s website at: http://bharatforge.com/images/PDFs/policies/

NOMINATION_AND_REMUNERATION_POLICY.PDF

There has been no change to the Nomination and Remuneration Policy during the financial year ended March 31, 2017.

27. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has implemented several best Corporate Governance practices as prevalent globally. The report on Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 forms an integral part of this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

28. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

During the year under review, the Company has acquired Walker Forge Tennessee LLC, USA and PMT Holding Inc.,USA through its wholly owned subsidiary - Bharat Forge America Inc., USA for an aggregate consideration of US $ 14 Million. Walker Forge Tennessee LLC, USA and PMT Holding Inc., USA have become indirect subsidiaries of the Company with effect from December 1, 2016. Walker Forge Tennessee LLC, USA and PMT Holding Inc., USA are renamed as Bharat Forge Tennessee Inc. and Bharat Forge PMT Technologies LLC, respectively.

During the year under review, the Board of Directors has approved divestment of Company’s 49% stake in power equipment Joint Venture with Alstom Bharat Forge Power Private Limited (ABFPPL) for US $ 35 Million. Accordingly, till now the Company has divested 23% of its shareholding in ABFPPL. The transaction for balance 26% equity would be consummated upon receipt of customer approvals for certain projects.

As on March 31, 2017, the Company has 19 (Nineteen) subsidiaries (including step down subsidiaries) and one associate/joint venture company. In accordance with Section 129 (3) of the Companies Act, 2013, the Company has prepared the consolidated financial statement, which forms part of this Annual Report. Further, a statement containing the salient features of the financial statement of our subsidiaries in the prescribed Form AOC-1 is presented in a separate section forming part of the financial statements.

Pursuant to Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and separate audited accounts in respect of subsidiaries, are available on the website of the Company at: http://bharatforge.com.

The Policy for determining ‘Material’ subsidiaries has been displayed on the Company’s website at the link:

http://bharatforge.com/images/PDFs/policies/Policy%20on%20Material%20Subsidiary-BFL.pdf

There has been no change to the Policy for determining ‘Material’ subsidiaries during the financial year ended March 31, 2017.

29. AUDIT COMMITTEE

The Audit Committee comprises of Mr. P. G. Pawar- Chairman of the Committee and Independent Director, Mr. S. M. Thakore - Independent Director, Mr. P. H. Ravikumar - Independent Director and Mr. P. C. Bhalerao - Non Executive Director.

All the recommendations made by the Audit Committee were deliberated and accepted by the Board during the financial year 2016-17.

30. AUDITORs

A. statutory Auditors

At the 53rd Annual General Meeting of the Company held on September 4, 2014, M/s. S R B C & CO LLP, Chartered Accountants, Pune (Firm Registration No. 324982E/E300003) were appointed as Statutory Auditors to hold office upto the conclusion of the 56th Annual General Meeting of the Company to be held in the year 2017.

In terms of the provisions of the Companies Act, 2013 and the related rules in respect of rotation of Auditors thereunder, M/s. S R B C & CO LLP, Chartered Accountants, Pune are eligible for re-appointment as Statutory Auditors of the Company for five years under the second term i.e. upto the conclusion of 61st Annual General Meeting to be held in the year 2022.

The Company has received a certificate from M/s. S R B C & CO LLP, Chartered Accountants, Pune to the effect that their appointment, if made, at the ensuing 56th Annual General Meeting of the Company will be in accordance with the conditions laid down under the Companies Act, 2013 and Rule 4 of Companies (Audit and Auditors) Rules, 2014.

In the meeting held on May 24, 2017, the Audit Committee of the Company has proposed and the Board of Directors of the Company has recommended appointment of M/s. S R B C & CO LLP, Chartered Accountants, Pune as the Statutory Auditors of the Company. Subject to approval of shareholders of the Company, M/s. S R B C & CO LLP, Chartered Accountants, Pune will hold office for a period of 5 (five) consecutive years from the conclusion of 56th Annual General Meeting of the Company scheduled to be held on August 10, 2017, till the conclusion of 61st Annual General Meeting to be held in the year 2022.

Further, the Notes on financial statements referred to in the Auditors’ Report are self-explanatory and do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark.

B. Secretarial Auditor and the Audit

The Board has appointed M/s. SVD & Associates, Company Secretaries, Pune, to conduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report for the financial year ended March 31, 2017 is appended as Annexure “G” to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Further, as required under Section 204 of the Companies Act, 2013 and Rules thereunder, the Board has appointed M/s. SVD & Associates, Company Secretaries, Pune, to conduct Secretarial Audit for the financial year 2017-18.

C. Cost Auditors

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s. Dhananjay V. Joshi & Associates, Cost Accountants, Pune (Firm Registration No.:00030) as Cost Auditors to audit the cost accounts of the Company for the financial year 2017-18. As required under the Companies Act, 2013, a resolution seeking Member’s approval for the remuneration payable to the Cost Auditors forms part of Notice convening the 56th Annual General Meeting.

The Cost Audit report for the Financial Year 201516 was filed with the Ministry of Corporate Affairs on September 26, 2016.

31. CORPORATE SOCIAL RESPONSIBILITY

ACTIVITIES

The Company has been carrying out various Corporate Social Responsibility (CSR) activities. These activities are carried out in terms of Section 135 read with Schedule VII of the Companies Act, 2013 as amended and the Companies (Corporate Social Responsibility Policy) Rules, 2014.

During the year under review the Company has spent Rs.73.04 Million on various CSR activities.

The CSR Committee of the Company comprises of Mr. P. G. Pawar, Chairman and Independent Director, Mr. B. N. Kalyani, Chairman and Managing Director and Mr. Amit B. Kalyani, Executive Director.

The Annual Report on CSR activities and the CSR initiatives taken during the year is appended as Annexure “H” to this report.

32. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PRPHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder for prevention and redressal of complaints of sexual harassment at workplace. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Company’s office premises or women service providers are covered under this Policy.

During the year under review, there were no complaints reported to the Committee constituted under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

33. VIGIL MECHANISM

The Company has formulated a Whistle Blower Policy, wherein the Employees/Directors/Stakeholders of the Company are free to report any unethical or improper activity, actual or suspected fraud or violation of the Company’s Code of Conduct. The policy provides for a mechanism to report such concerns to the Audit Committee through specified channels. This mechanism provides safeguards against victimisation of Employees, who report under the said mechanism.

The Whistle Blower Policy complies with the requirements of Vigil Mechanism as stipulated under Section 177 of the Companies Act, 2013.

During the year under review, the Company has not received any complaints under the said mechanism. The Whistle Blower Policy of the Company has been displayed on the Company’s website at the link:

http://bharatforge.com/images/PDFs/policies/BFL%20Whistle%20Blower%20Policy-Signed.pdf

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

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are appended as Annexure “I” to this report.

35. GREEN INITIATIVEs

The Company supports and pursues the ‘‘Green Initiative’’ of the Ministry of Corporate Affairs, Government of India. The Company has effected electronic delivery of Notice of Annual General Meeting and Annual Report to those Members whose e-mail IDs were registered with the Company/ Depository Participants. The Companies Act, 2013 and the underlying rules as well as Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, permit the dissemination of financial statements and annual report in electronic mode to the Members.

For members who have not registered their email addresses, physical copies are sent in the permitted mode.

Your Directors are thankful to the Members for actively participating in the Green Initiative and seek your continued support for implementation of the green initiative.

36. ACKNOWLEDGEMENT

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

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

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

For and on behalf of the Board of Directors

B. N. KALYANI

Chairman and Managing Director

Pune: May 24, 2017


Mar 31, 2014

The Members,

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

1. PERFORMANCE OF THE COMPANY

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

2013-14 2012-13 % Change

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

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

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

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

2013-14 2012-13 % Change

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

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

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

c) Financials (On stand-alone basis):

In Rs. Million

Current Year Previous Year

1) Total Income 35,139.73 32,428.52

2) Exports Revenue 18,482.13 15,866.30

3) Net Profit

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

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

Current tax 1,539.00 887.17

MAT Credit - (20.30)

- Deferred 426.73 521.97

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

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

profit available for appropriation 15,468.70 13,107.82

APPROPRIATIONS:

Interim Dividend on Equity Shares 465.59 232.79

Tax on above dividend 79.13 37.76

Proposed Final Dividend on Equity Shares 581.99 558.71

Tax on above dividend 98.91 94.95

Debenture Redemption Reserve 403.77 408.60

Transfer to General Reserve 400.00 305.60

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

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

2. DIVIDEND

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

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

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

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

3. CONSOLIDATED FINANCIAL STATEMENTS

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

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

5. SUBSIDIARIES

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

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

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

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

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

6. SUBSIDIARY COMPANIES ACCOUNTS

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

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

Foreign Subsidiaries:

i) CDP Bharat Forge GmbH, Germany

ii) Bharat Forge Holding GmbH, Germany

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

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

v) Bharat Forge Daun GmbH, Germany

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

vii) Bharat Forge Beteiligungs, GmbH, Germany

viii) Bharat Forge Kilsta AB, Sweden

ix) Bharat Forge Scottish Stampings ltd., Scotland

x) Bharat Forge Hong Kong ltd., Hong Kong

xi) BF New Technologies GmbH, Germany and

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

Indian Subsidiaries:

xiii) BF-NTPC Energy Systems limited

xiv) Kalyani AlSTOM Power limited

xv) BF Infrastructure limited

xvi) BF Infrastructure Ventures limited

xvii) Kalyani Strategic Systems limited

(Formerly BF Power Equipment limited)

xviii) Analogic Controls India limited

xix) BF Elbit Advanced Systems Private limited and

xx) Kalyani Polytechnic Private limited

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

7. FOREIGN CURRENCY CONVERTIBLE BONDS

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

As on date, the Company has no outstanding FCCBs.

8. CONVERTIBLE WARRANTS

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

9. REDEMPTION OF DEBENTURES

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

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

10. PARTICULARS OF EMPLOYEES

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

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

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

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

12. FIXED DEPOSITS

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

13. CORPORATE SOCIAL RESPONSIBILITY

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

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

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

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

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

14. WHISTLE BLOWER POLICY

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

15. DIRECTORS

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

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

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

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

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

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

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

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

16. DIRECTORS'' RESPONSIBILITY STATEMENT

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

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

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

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

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

17. AUDITORS AND AUDITORS'' REPORT

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

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

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

18. COST AUDITORS

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

19. CORPORATE GOVERNANCE

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

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

20. SECRETARIAL AUDITORS

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

21. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

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

22. ACKNOWLEDGEMENT

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

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

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

For and on behalf of the Board of Directors

Place: Pune B. N. KALYANI

Date: May 27, 2014 Chairman and Managing Director


Mar 31, 2013

To, The Members,

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

1. PERFORMANCE OF THE COMPANY

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

2012-13 2011-12 % Change

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

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

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

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

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

2012-13 2011-12 % Change

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

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

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

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

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

In Rs. Million

Current Previous Year Year

1) Total Income 32,428.52 37,535.44

2) Exports Revenue 15,866.30 17,347.09

3) Net Profit

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

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

Provision for Taxation

Current tax 887.17 1,812.00

MAT Credit (20.30) -

- Deferred 521.97 37.85

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

Net Profit 3,055.93 3,620.73

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

Profit available for appropriation 13,107.82 11,904.83

APPROPRIATIONS:

Interim Dividend on Equity Shares 232.79 349.19

Tax on above dividend 37.76 56.65

Proposed Final Dividend on Equity Shares 558.71 581.99

Tax on above dividend 94.95 94.41

Debenture Redemption Reserve 408.60 408.60

Transfer to General Reserve 305.60 362.10

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

2. DIVIDEND

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

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

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

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

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

3. CONSOLIDATED FINANCIAL STATEMENTS

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

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

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

5. SUBSIDIARIES

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

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

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

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

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

6. SUBSIDIARY COMPANIES ACCOUNTS

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

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

Foreign Subsidiaries:

i) CDP Bharat Forge GmbH, Germany

ii) Bharat Forge Holding GmbH, Germany

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

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

v) Bharat Forge Daun GmbH, Germany

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

vii) Bharat Forge Beteiligungs, GmbH, Germany

viii) Bharat Forge Kilsta AB, Sweden

ix) Bharat Forge Scottish Stampings Ltd., Scotland

x) Bharat Forge Hong Kong Ltd., Hong Kong

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

xii) BF New Technologies GmbH, Germany and

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

Indian Subsidiaries:

xiv) BF-NTPC Energy Systems Ltd.

xv) Kalyani ALSTOM Power Ltd.

xvi) BF Infrastructure Ltd.

xvii) BF Infrastructure Ventures Ltd.

xviii) BF Power Equipments Ltd.

xix) BF Elbit Advanced Systems Private Limited and

xx) Kalyani Polytechnic Private Limited

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

7. FOREIGN CURRENCY CONVERTIBLE BONDS

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

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

As on date, the Company has no outstanding FCCBs.

8. CONVERTIBLE WARRANTS

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

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

9. PARTICULARS OF EMPLOYEES

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

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

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

11. FIXED DEPOSITS

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

12. DIRECTORS

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

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

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

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

13. DIRECTORS'' RESPONSIBILITY STATEMENT

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

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

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

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

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

14. AUDITORS AND AUDITORS'' REPORT

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

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

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

15. COST AUDITORS

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

16. CORPORATE GOVERNANCE

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

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

17. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

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

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

18. ACKNOWLEDGEMENT

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

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

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

For and on behalf of the Board of Directors

Place: Pune B. N. KALYANI

Date: May 25, 2013 Chairman and Managing Director


Mar 31, 2012

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

1. PERFORMANCE OF THE COMPANY:

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

2011-12 2010-11 % Increase

Rs 37,521 million Rs 29,935 million 25.34

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

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

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

2011-12 2010-11 % Increase

Rs 17,347 million Rs 12,195 million 42.25

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

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

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

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

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

(Rs in Million)

Current Previous Year Year

1) Total Income 37,520.70 29,935.47

2) Exports Revenue 17,347.09 12,195.09

3) Net Profit

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

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

Provision for Taxation

Current tax 1,812.00 876.71

- Deferred 37.85 491.20

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

Net Profit 3,620.73 3,108.25

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

Profit available for appropriation 11,904.83 9,941.48

APPROPRIATIONS:

Interim Dividend on Equity Shares 349.19 -

Tax on above dividend 56.65 -

Proposed Final Dividend on Equity Shares 581.99 814.78

Tax on above dividend 94.41 132.18

Debenture Redemption Reserve 408.60 399.42

Transfer to General Reserve 362.10 311.00

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

2. DIVIDEND:

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

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

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

3. CONSOLIDATED FINANCIAL STATEMENTS:

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

4. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:

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

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

5. SUBSIDIARIES:

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

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

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

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

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

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

6. SUBSIDIARY COMPANIES ACCOUNTS:

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

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

Foreign Subsidiaries:

i) CDP Bharat Forge GmbH, Germany,

ii) Bharat Forge Holding GmbH, Germany

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

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

v) Bharat Forge Daun GmbH, Germany

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

vii) Bharat Forge Beteiligungs, GmbH, Germany

viii) Bharat Forge Kilsta AB, Sweden

ix) Bharat Forge Scottish Stampings Ltd., Scotland

x) Bharat Forge Hong Kong Ltd., Hong Kong

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

xii) BF New Technologies GmbH, Germany and

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

Indian Subsidiaries:

xiv) BF-NTPC Energy Systems Ltd.

xv) Kalyani ALSTOM Power Ltd.

xvi) BF Infrastructure Ltd.

xvii) BF Infrastructure Ventures Ltd. and

xviii)BF Power Equipment Ltd.

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

7. FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs):

REDEMPTION:

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

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

8. QIP ISSUE:

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

9. TERM DEPOSITS:

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

10. PARTICULARS OF EMPLOYEES:

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

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

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

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

12. DIRECTORS:

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

13. DIRECTORS' RESPONSIBILITY STATEMENT:

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

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

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

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

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

14. AUDITORS AND AUDITORS' REPORT:

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

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

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

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

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

15. COST AUDITORS:

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

16. CORPORATE GOVERNANCE:

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

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

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

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

18. ACKNOWLEDGEMENT:

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

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

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

For and on behalf of the Board of Directors

B.N. KALYANI

Mumbai: May 28, 2012 Chairman & Managing Director


Mar 31, 2011

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

1. PERFORMANCE OF THE COMPANY:

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

2010-11 2009-10 % Increase

Rs 29,935 million Rs 18,887 million 58.49

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

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

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

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

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

million million million million

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

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

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

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

(Rs in million)

Current Previous

Year Year

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

Provision for Taxation

Current including Wealth Tax & FBT 879.21 603.30

- Deferred 491.20 (66.59)

Net Profit 3,105.67 1,270.46

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

9,938.90 7,437.97

Add/(Less): Tax Refunds and Excess

Provisions net of prior year items 2.58 0.43

Profit available for appropriation 9,941.48 7,438.40

APPROPRIATIONS:

Proposed dividend on Equity Shares 814.78 232.79

Tax on above dividend 132.18 38.66

Debenture Redemption Reserve 399.42 206.22

Transfer to General Reserve 311.00 127.50

Surplus retained in Profit &

Loss Account 8,284.10 6,833.23

2. DIVIDEND:

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

3. CONSOLIDATED FINANCIAL STATEMENTS:

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

4. MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT:

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

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

5. SUBSIDIARIES:

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

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

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

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

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

6. SUBSIDIARY COMPANIES ACCOUNTS:

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

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

Foreign Subsidiaries:

i) CDP Bharat Forge GmbH, Germany,

ii) Bharat Forge Holding GmbH, Germany

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

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

v) Bharat Forge Daun GmbH, Germany

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

vii) Bharat Forge Beteiligungs, GmbH, Germany

viii) Bharat Forge Kilsta AB, Sweden

ix) Bharat Forge Scottish Stampings Ltd., Scotland

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

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

xii) BF New Technologies GmbH, Germany and

xiii) Bharat Forge International Ltd., UK

Indian Subsidiaries:

xiv) BF-NTPC Energy Systems Ltd.

xv) Kalyani ALSTOM Power Ltd.

xvi) BF Infrastructure Ltd.

xvii) BF Infrastructure Ventures Ltd. and

xviii)BF Power Equipment Ltd.

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

7. CAPACITY EXPANSION AND NON-AUTO BUSINESS:

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

A. BARAMATI:

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

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

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

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

B. MUNDHWA / SATARA:

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

8. FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs):

A. CONVERSION OF FCCBs:

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

B. REDEMPTION:

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

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

9. QIP ISSUE:

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

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

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

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

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

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

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

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

10. TERM DEPOSITS:

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

11. PARTICULARS OF EMPLOYEES:

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

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

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

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

13. DIRECTORS:

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

14. DIRECTORS’ RESPONSIBILITY STATEMENT:

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

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

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

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

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

15. AUDITORS AND AUDITORS’ REPORT:

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

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

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

16. CORPORATE GOVERNANCE:

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

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

17. ACKNOWLEDGEMENT:

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

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

For and on behalf of the

Board of Directors

B.N. KALYANI

Mumbai: May 24, 2011 Chairman & Managing Director


Mar 31, 2010

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

1. PERFORMANCE OF THE COMPANY:

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

2009-10 2008-09 % Decrease

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

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

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

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

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

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

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

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

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

(Rs. in Million)

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

Current including Wealth Tax & FBT 603.30 55.20

- Deferred (66.59) 488.60

Net Profi t 1 270.46 1 032.85

Balance of Profi t from Previous Year 6 167.51 5 570.29

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

Profi t available for appropriation 7 438.40 6 574.10

APPROPRIATIONS:

Proposed dividend on Equity Shares 232.79 222.65

Tax on above dividend 38.66 37.84

Debenture Redemption Reserve 206.22 26.10

Transfer to General Reserve 127.50 120.00

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

2. DIVIDEND:

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

3. CONSOLIDATED FINANCIAL STATEMENTS:

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

4. SUBSIDIARIES:

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

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

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

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

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

5. SUBSIDIARY COMPANIES ACCOUNTS:

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

i) CDP Bharat Forge GmbH, Germany,

ii) Bharat Forge Holding GmbH, Germany

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

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

v) Bharat Forge Daun GmbH, Germany

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

vii) Bharat Forge Beteiligungs, GmbH, Germany

viii) Bharat Forge Kilsta AB, Sweden

ix) Bharat Forge Scottish Stampings Ltd., Scotland

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

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

xii) BF New Technologies GmbH, Germany

xiii) BF-NTPC Energy Systems Ltd. India

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

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

6. CAPACITY EXPANSION AND NON-AUTO BUSINESS:

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

A. BARAMATI

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

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

B. MUNDHWA/SATARA

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

7. JOINT VENTURES

A. JOINT VENTURE WITH NTPC:

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

B. JOINT VENTURES WITH ALSTOM:

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

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

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

C. JOINT VENTURE WITH AREVA:

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

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

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

8. FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)

A. CONVERSION OF FCCBs:

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

B. REDEMPTION:

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

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

9. ISSUE OF NON-CONVERTIBLE DEBENTURES :

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

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

10. QIP ISSUE:

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

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

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

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

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

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

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

11. TERM DEPOSITS:

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

12. PARTICULARS OF EMPLOYEES:

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

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

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

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

14. DIRECTORS:

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

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

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

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

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

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

15. DIRECTORS’ RESPONSIBILITY STATEMENT:

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

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

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

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

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

16. AUDITORS:

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

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

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

For and on behalf of the Board of Directors

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

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