Review of Term Paper

Company: Bharatforg

Subject : Corporate Law

Submitted to: Submitted by:

Nancy Sahni Mam Jagjeet Singh Khaira
Regd no: 10800926
Section no: RQ1809
Roll no: A17
 “Company History - Bharat Forge Ltd”
Bharat Forge Ltd is one of the most innovative and exciting companies to emerge in the
history of the forging industry. The Indian Automotive Industry in the 50’s was more like
the story of imported kits. Ancillaries were nominal and infrastructure was scarce and
inadequate. It was then, that Bharat Forge came into existence in 1961 to meet the
forging needs of the Indian Automotive Industry. The 70’s witnessed a spurt in the Indian
forging industry with more and more units coming up. For Bharat Forge, it was a period
of consolidation and growth. With the largest integrated facilities in Asia and an
unbeatable track record, Bharat Forge emerged as the undisputed leader - the first name
in the forgings industry in India. With an emphasis on diversification, the 80’s saw
Bharat Forge grow from a primarily automotive ancillary to an engineering enterprise
focusing on technological supremacy, resilience and total customer-orientation. Today,
the art of forging metal is a tradition at Bharat Forge, and all of our products are built
with the expertise necessary to accommodate various industries. Each customer
specification is carefully transformed into a cost-efficient reality. Every part we create is
a representation of our overall dedication to craftsmanship. An outstanding reputation for
customer service coupled with the Management commitment to quality has made Bharat
Forge the preferred domestic and global supplier for major OEM’s. Under the intense and
caring supervision of the Chairman & Managing Director, Mr. Babasaheb N. Kalyani, the
company continues to expand and its markets continue to grow, while the goal remains
the same : to deliver competitive, quality products and services - time after time.

“ 1961”

- The Company was incorporated on 19th June at Mumbai. The main object of the
Company is to manufacture forgings and finished crankshafts.

“ 1971”

- Shares of Rs.100 each subdivided.

“ 1976”

- 9,30,000 Bonus Equity shares issued in prop. 3:5.

“ 1978”

- Pref. shares redeemed in 3 equal instalments on 2nd January, 1st July and 1st January,
1979.

1981

- The Company's technical collaboration with Sifco Industries Inc., of U.S.A., ended on
31st March.
- 24,80,000 No. of equity shares issued at a prem. of Rs.30 per share in part conversion of
V Series debentures.

1982

- Balchandra Investment Pvt. ltd., became a wholly owned subsidiary of the Company
and consequently, a deemed public limited company under section 43-A of the
Companies Act, 1956.

1983

- An agreement was concluded with Tokyo, Drop Forging Co., Ltd., of Japan for
technology upgradation, cost optimisation and quality improvements in the Company's
forging unit.

- The Company concluded an agreement with Maharashtra Electronics Corporation Ltd.

(MELTRON), to establish a joint venture to manufacture colour T.V. sets.

1984

- Forge Investment Ltd., and Mundhwa Investment Ltd., became subsidiaries of

Bhalchandra investment Ltd., with effect from 4th January.

1985

- The installed capacity of steel forgings at Pune was further increased from 30,000
tonnes to 40,000 tonnes per annum.

- Industrial licence for steel forgings was endorsed for 7,200 tonnes and 42,800 tonnes
per annum at Jalgaon and Pune units respectively.

- In addition, the Company also received industrial licence for the manufacture of
couplings with 600 tonnes per annum capacity at Mundhwa, Pune.

- To obtain technology and know-how for the manufacture of couplings, the Company
entered into a collaboration agreement with Torsiflex Ltd., U.K.

- The Company privately placed with financial Institutions 3,80,000-15% secured

redeemable non-convertible debentures (IV Series - PP) of Rs. 100 each, for working
capital requirements. Also, 4,80,000-15% fully paid secured redeemable non-convertible
debentures (IV series-Rights) of Rs.100 each were issued on rights basis to finance its
industrial machinery and couplings projects at Vaduth, Satara, and at Mundhwa, Pune.

- In addition, 7,50,000-10% fully paid secured redeemable convertible debentures (V

Series) of Rs.240 each were issued on rights basis to finance its front axle assembly
projects and for the expansion of open forgings capacity and defence products machinery
at Mundhwa, Pune.

1986

- A letter of intent for machine components was partially converted into an industrial
licence for the manufacture of some of the items such as defence products machinery etc.
as included in the letter of intent at Mundhwa, Pune.

- Registration was obtained for the manufacture of assemblies, components, spares,

accessories for metallurgical machinery, size reduction and crushing equipment,
conveying equipment and size separation units with a total capacity of 1,200 tonnes per
annum at Vaduth, Satara.

- Registration for additional capacity of 700 tonnes per annum was obtained for the
Vaduth unit, for the manufacture of other items of industrial machinery. The Company
also undertook to market colour TV receivers and automotive components manufactured
by other companies.

- The name of the Company was changed from Bharat Forge Co. Ltd., to Bharat Forge,
Ltd. with effect from 30th April.

- 3,12,500 No. of equity shares issued at a prem. of Rs 30 per share in part conversion of
V Series debentures.

1987

- Effective from 31st October, Jalkumbhi Investment and Finance Pvt. Ltd. and
Starflower Investment Ltd. became subsidiaries of Forge Investment Ltd.

- Chakrapushpa Investment and Finance Ltd. and Jalakamal Investment and Finance
became subsidiaries of Mundhwa Investment, Ltd.

1989

- The Company undertook modernisation and rationalisation of the steel forgings &
furnish machined crankshafts division at Pune.

- Delay in the receipt of imported equipment and the initial teething troubles delayed the
modernisation programme at the steel forgings division, Pune. Both the presses were
installed by 1991-92.

- A joint venture under the name of Kalyani Sharp India Ltd. (KSIL) was set up for the
manufacture of Televisions & VCRs. Necessary approvals were received for the transfer
of the Company's electronics marketing division to KSIL effective from 1st, October.
- During September-October, the Company offered 10,55,450-14% non-convertible (VI
Series) debentures of Rs.100 each on Rights basis in the prop. 1 debenture : 10 equity
shares held. (All were taken up). Additional 1,52,349 debentures were allotted to retain
over-subscription.

- The Company also issued 63,882 debentures (inclusive of over-subscription of 15% of

55,500 debentures) to employees (including Indian working directors)/workers of the
Company on an equitable basis (only 2,010 debentures were taken up). The unsubscribed
portion of 61,872 debentures was allowed to lapse.

- A detachable coupon is attached to every debenture entitling the holder thereof the right
to apply and get one equity share of Rs.10 each at a premium as may be approved by CCI
at the expiry of 5 years from the date of allotment of debentures.

- The debentures were to be redeemed at par at the end of the seventh year, from the date
of allotment of debentures.

- 52,72,500 bonus shares issued in prop. 1:1. 35,15,000 rights shares issued (prem. Rs.40
per share; prop. 1:3). 4,76,412 shares allotted to retain oversubscription. Another 50,838
shares allotted privately (prem. Rs.40 per share). Another 48,450 shares allotted to
employees (prem. Rs.40 per share).

1991

- On 22nd May, the Company allotted 10,00,000-14% non-convertible debentures (7th

series) of Rs.100 each on private placement basis.

- The Company issued 19,00,000-18% secured redeemable non-convertible debentures

(8th Series) of Rs.100 each on private placement basis with Mutual Funds. These are to
be redeemed in equal instalments at the end of 6th, 7th and 8th year from the date of
allotment viz., 26th November, at a premium of 5% payable along with the instalment
due at the end of 7th year.

1992

- The Financial Services Division commenced for investment in various fund based areas.
During the year, it diversified its portfolio into real estate development.

- The company commissioned the 12,800 tonnes capacity screw type hot forging press.

- During September/October, the Company offered 13,36,500-16% Non-convertible

debentures of Rs.300 each with a detachable warrant on Rights basis in the prop. 1
debenture : 11 equity shares held. All were taken up.

- Another 66,830-16% Non-Convertible debentures of Rs.300 with detachable warrants

each were offered to the employees' on an equitable basis only 1,560 debentures were
taken up. Unsubscribed portion of 65,270 debentures was allowed to lapse.

- These debentures are to be redeemed at a premium of 5% in three equal instalments at

the expiry of 6th, 7th, and 8th year from the date of allotment of debentures.

- Every debenture was attached with a warrent which entitled the allottee (of the
debenture) to receive a equity shares of 12 months from the date of allotment of
debentures. If the right attached to any coupon/warrant was not exercised within the
specified period, the equity shares pertaining to the warrants were to be disposed of at the
discretion of the directors.

- Forfeiture on 370 shares annulled. 38,01,950 shares allotted as rights/to employees

(prem. Rs.150 per share).

1993

- The fall in exports was due to the letter of credit not being opened at Ukraine and
recessionery conditions in the thrust markets of Japan & W. Europe.

- 13,37,035 No. of equity shares issued at a prem. of Rs. 145 per share on excercise of
warrants attached to NCD (9th shares).

1994

- During February/March, the Company offered 65,93,300 No. of equity shares of Rs.10
each at a premium of Rs.40 per shares in prop. 1:3 (all were taken up).

- Another 3,29,700 No. of equity shares of Rs.10 each were issued to the employees on
an equitable basis (all were taken up).

- The Company also offered 28,26,000-14.5% secured redeemable non-convertible

debentures of Rs.50 each with a coupon/warrant attached in the prop. 1 deb : 7 equity
shares held. (All were taken up).

- Another 1,41,300-14.5% debentures were issued to the employees on an equitable basis

(only 1,00,450 debentures taking unsubscribed portion was allotted to lapse).

- These debentures would be redeemed at par in three equal instalments at the expiry of
6th, 7th, 8th year from the date of allotment.

- Each warrant entitles the holder to apply for one equity share of Rs 10 each at a
premium of Rs 40 per share.

- On 1st March, the Company issued convertible notes (1994-1999) of Swiss Francs
20.00 million equivalent approximately to Rs.431 million.
- Effective from 24th October, Starfflower Investment and Finance Ltd. and
Chakrapushpa Investment and Finance Ltd. ceased to be subsidiaries of the Company.

- Forfeiture on 4485 shares annulled. 69,23,000 shares allotted as Rights to the

shareholders and employees, 12,09,801 shares issued (Prem. Rs. 40 againt Equity
Warrants attached to NCD VI Series. 35,00,000 shares allotted (Prem. Rs. 146) against
Warrants issued to Promoters. Pref. shares issued on private placement basis.

1995

- The Company proposed to set up a plant for the manufacture of Finish Machined
Crankshafts with a capacity of 1,80,000 nos. per annum at Pune.

- The Company had entered into a technical knowhow and Assistance agreement with
Metalart Corporation, Japan for the manufacture of small precision forgings.

- 293, shares allotted. 29,26,450 shares allotted (prem. Rs. 40 per share) against warrants
attached to NCDs. (Xth series). 15,68,600 shares issued (prem. Rs. 186.93 per share).
Under senior executive stock cum share option scheme 18,00,000 shares issued (prem.
Rs. 107.18 per share) to Promoters/Group Companies.

1997

- 120,00,000 Redeemable pref. shares redeemed during the year.

1998

- The Company has decided to go head with the implementation of the Mundhwa project
for additional forgings capacity of 38,000 Tonnes.

- BFL also has a financial services division which it set up in FY 93, IN FY95 it
diversified into production of wheel rims.

- BFL's wheel rim division has been hived off into a joint venture with the collaborator
Lemmerze-Were of Germany, with effective from 4th June 1996.

- BFL is the leading player in the sector. It is the flagship of the Kalyani group and was
established in 1961 in collaboration with Steel Improvement and Forge Co., USA
(SIFCO), Commercial production of forgings began in 1966 with the setting up of a plant
at Mundhwa near Pune.

1999

- Bharat Forge has surprisingly turned an impressive results. Being the fifth-largest
forging company in the world in volume terms.
2000

- Demerger of Investment Division & Wind Mills Division with effect from March, 1.

2002-Bharat Forge Ltd has informed that Mr G A Nayak, Nominee Director of Unit Trust
of India (UTI) has resigned and ceased to be Director, with effect from December 19,
2002, his nomination having been withdrawn by UTI.

2001

-Bharat Forge Ltd has retrenched around 800 employees which represents close to one
fourth of its total workforce at its manufacturing facility.

-G A Nayak has replaced Mr.K.G.Vassal as the nominee of UTI on the Board of Bharat
Forge.

-Bharat Forge reported a 16% drop in the revenue and 81% drop in the net profits.

2002

-Bharat Forge signs a contract with Dana Corporation's Spincer Europe Ltd., for the
supply of forgings.

-Leading Chinese Auto Dealer OEM has awarded the company a large contract for the
supply of engine components,which is worth around $20 million order.

2003

- Bharat Forge Ltd secured the second Largest Customer in China. Guangxi Yuchai
Machinery Co. a part of second Auto Works is among the largest Auto companies in
China, which is a stepping stone for acquiring a large size of the Chinese Markets.

-Bharat Forge Ltd has appointed Ajay S Nagle as Company Secretary and also to act as
Compliance Officer.

-New contracts has been won in the area of passenger car components. BFL has been
chosen by Ford Motor Company and Daimler Chrysler as a supplier of components for
their global passenger car programs.

-Board approves raising of raising long term resources

2004

-Bharat Forge all set to enter China

-Bharat Forge Ltd (BFL) has tied up with BITS-Pilani for offering employees an
opportunity to enhance their education while continuing to work with the company and
acquire degrees in BE and B.Tech.

-Bharat Forge Ltd has appointed Mr Amit B Kalyani as Director of the company wef
May 11, 2004 and also as Executive Director of the company wef May 11, 2004.

2005

-Bharat Forge Ltd receives `outstanding organisation' award for quality from the National
Institution for Quality and Reliability on April 23

-Bharat Forge acquires Imatra Kilsta AB, Sweden & Scottish Stampings, Scotland

-Bharat Forge Ltd has signed a Joint Venture contract with FAW Corporation for its
forging business

-Bharat Forge enters in JV contract with FAW Corporation, China

2006

-Bharat Forge Ltd has appointed Mrs. Lalita D Gupte as Director of the Company with
effect from December 05, 2006.

-Bharat Forge inks agreement with Maharashtra Govt to establish SEZ

-Opening Ceremony of FAW Bharat Forge (Changchun) Co., Ltd. -Government of

Maharashtra and Bharat Forge joined hands to set up a multi-product SEZ in Pune
District.

2007

-Centre for Advanced Manufacturing … takes shape in Baramati -BHARAT FORGE –

BITS PILANI convocation ceremony held for the first batch of B.S. (Manufacturing
Engineering) Programme.

2008

-Bharat Forge Ltd has announced that on February 08, 2008, the Company has signed a
Memorandum of Understanding (MOU) with NTPC Ltd, to set up a Joint Venture
Company for its foray into the Capital Goods sector.

-Bharat Forge Ltd has has appointed Mr. Sunil Chaturvedi as Additional Director of the
Company with effect from May 20, 2008 and he is also appointed as Executive Director
of the Company with effect from May 20, 2008.

-Bharat Forge Commissioned India’s Largest Commercial Open Forging Press. -Bharat
Forge signed Letter of Intent with IIT-Bombay -Alstom and Bharat Forge to set up a
Joint Venture to manufacture state-of-the-art super-critical power plant equipments in
India. -Bharat Forge signs MOU with Government of Maharashtra for its Centre for
Advanced Manufacturing in Baramati -Bharat Forge signed a MOU with NTPC 2009

- Bharat Forge Ltd has informed that the Board of Directors of the Company at its
meeting held on May 20, 2009, has appointed Mr. P H Ravikumar as Additional Director
of the Company with effect from May 20, 2009.

-Bharat Forge and AREVA sign MoU for Manufacture of Heavy Forgings in India
-Bharat Forge receives National Award for Best HR Practices -2009

2010

- Bharat Forge Ltd has appointed Dr. T. Mukherjee as Additional Director of the
Company with effect from January 23, 2010.

“Meetings”
“Board Meet” 23-oct-2010
Bharat Forge Ltd has informed BSE that a meeting of the Board of Directors of the
Company will be held on October 23, 2010, inter alia, to take on record the Unaudited
Financial Results of the Company for the quarter ended on September 30, 2010 as also
for the half year ended on that date (with limited Review by the Auditors of the
Company.

“Annual General Meeting” 26-July 2010.

Bharat Forge Limited has submitted to the Exchange a copy of the Notice of the Annual
General Meeting of the Members of the company to be held on July 26, 2010. Bharat
Forge Ltd has informed BSE that the members at the 49th Annual General Meeting
(AGM) of the Company held on July 26, 2010, has approved all the resolutions proposed
at item No. 1 to 9 of the Notice dated May 22, 2010. (As Per BSE Announcement
Website dated on 26.07.2010) Bharat Forge Ltd has informed BSE that the members at
the 49th Annual General Meeting (AGM) of the Company held on July 26, 2010, inter
alia, have also accorded to the following business: 1. Adoption of the Balance Sheet as at
March 31, 2010 & Profit & Loss Account for the year ended on March 31, 2010 & the
Directors Report & Auditors Report thereon. 2. Declaration of dividend at the rate of
50% i.e. Re. 1.00 per equity share of Rs. 2/- on 232,794,316 equity shares of Rs. 2/- each,
for the period from April 01, 2009 to March 31, 2010. 3. Re-appointment of Mr. G K
Agarwal, Mr. P C Bhalerao, Mr. P G Pawar & Mr. S D Kulkarni as Directors of the
Company. 4. Re-appointment of M/s. Dalal & Shah, Chartered Accountants, Mumbai, as
Auditors of the Company to hold office from the conclusion of this meeting until the
conclusion of the next Annual General Meeting of the Company, on remunerations, terms
& conditions. 5. Appointment of Mr. Naresh Narad & Dr. T Mukherjee as Directors of
the Company, liable to retire by rotation.

“Extra Ordinary General Meeting”

Bharat Forge Ltd has informed BSE that an Extra Ordinary General Meeting (EGM) of
the members of the Company will be held on October 01, 2009, inter alia, to transact the
following business: 1. To reate, offer, issue and allot in one or more tranches whether
Rupee denominated or denominated in Foreign Currency, in the course of Domestic /
International Offerings representing Equity Shares through Global Depository Receipts
(GDRs), Debentures or Bonds Whether Partly / Optionally / Fully Convertible and / or
Securities linked to Equity Shares including Foreign Currency Convertible Bonds and / or
any Other Financial Instruments (OFIs) Convertible into or Linked to Equity Shares or
With or Without Detachable Warrants with a Right Exercisable By the Warrant Holders
to Convert or Subscribe to the Equity Shares or Otherwise, in Registered Or Bearer Form
Secured or Unsecured Such that the total amount raised through the aforesaid Securities
(As Detailed Below) should not exceed US $ 150, Million (With or Without Green shoe
Option) or Its Indian Rupee Equivalent Rs. 7200 Million (At An Exchange Rate of
Rupees 48/- Per Us Dollar), of Incremental Funds For the Company ('Securities', Which
Shall include the Specified Securities as Detailed Below) to any Person including Foreign
/ Resident Investors Whether Domestic / Foreign Institutions, Promoters, Employees of
the Company, Non-resident Indians, Indian Public Companies, Corporate Bodies, Trusts,
Mutual Funds, Banks, Insurance Companies, Pension Funds, Individuals Or Otherwise,
('Investors'), through Public Issue(s), Private Placement(s) or a combination thereof at
such time or times, at Such Price or Prices, at a discount or premium to the Market Price
or prices in such manner and on such terms and conditions including Security, Rate of
Interest, etc., as may be decided by and deemed appropriate by the Board, Subject to
applicable law, in its absolute discretion including the discretion to determine the
categories of Investors to whom the Offer, Issue and Allotment shall be made to the
exclusion of all other categories of Investors at the time of such Issue and Allotment
considering the Prevailing Market Conditions and Other Relevant Factors wherever
necessary in consultation with the Lead Managers, As the Board in its absolute discretion
may deem fit and appropriate, subject to necessary provisions & approvals. 2. To alter the
Article 133 of the Articles of Association of the Company as under: ¶he figure '7' at the
end of Article be substituted by the Figure '9'. 3. To increase the number of Directors
from 17 to 19 as Excluding Debenture Directors, Permanent Directors, Special Directors
and Nominee Directors, if any. Bharat Forge Ltd has informed BSE that the members at
the Extra Ordinary General Meeting (EGM) of the Company held on October 01, 2009,
inter alia, have approved all the resolutions proposed at Item Nos. 1 to 3 of the Notice
dated August 18, 2009. (As Per BSE Announcement Dated on 01/10/2009) Bharat Forge
Ltd has informed BSE that the members at the Extra Ordinary General Meeting (EGM)
of the Company held on October 01, 2009 inter alia, have also accorded to the following:
1. Authority to the Board to create, offer, issue and allot in one or more tranches whether
Rupee denominated or denominated in Foreign Currency, in the course of Domestic /
International Offerings representing Equity Shares through Global Depository Receipts
(GDRs), Debentures or Bonds Whether Partly / Optionally / Fully Convertible and / or
Securities linked to Equity Shares including Foreign Currency Convertible Bonds and / or
any Other Financial Instruments (OFIs) Convertible into or Linked to Equity Shares or
With or Without Detachable Warrants with a Right Exercisable By the Warrant Holders
to Convert or Subscribe to the Equity Shares or Otherwise, in Registered Or Bearer Form
Secured or Unsecured Such that the total amount raised through the aforesaid Securities
(As Detailed Below) should not exceed US $ 150, Million (With or Without Green shoe
Option) or Its Indian Rupee Equivalent Rs. 7200 Million (At An Exchange Rate of
Rupees 48/- Per Us Dollar), of Incremental Funds For the Company ('Securities', Which
Shall include the Specified Securities as Detailed Below) to any Person including Foreign
/ Resident Investors Whether Domestic / Foreign Institutions, Promoters, Employees of
the Company, Non-resident Indians, Indian Public Companies, Corporate Bodies, Trusts,
Mutual Funds, Banks, Insurance Companies, Pension Funds, Individuals Or Otherwise,
('Investors'), through Public Issue(s), Private Placement(s) or a combination thereof at
such time or times, at Such Price or Prices, at a discount or premium to the Market Price
or prices in such manner and on such terms and conditions including Security, Rate of
Interest, etc., as may be decided by and deemed appropriate by the Board, Subject to
applicable law, in its absolute discretion including the discretion to determine the
categories of Investors to whom the Offer, Issue and Allotment shall be made to the
exclusion of all other categories of Investors at the time of such Issue and Allotment
considering the Prevailing Market Conditions and Other Relevant Factors wherever
necessary in consultation with the Lead Managers, As the Board in its absolute discretion
may deem fit and appropriate, subject to necessary provisions & approvals. 2. Alternation
in the Article 133 of the Articles of Association of the Company as under: ¶he figure 7' at
the end of Article be substituted by the Figure 9'. 3. Increase the number of Directors
from 17 to 19 as Excluding Debenture Directors, Permanent Directors, Special Directors
and Nominee Directors, if any.
Bharat Forge Ltd - Corporate Social Responsibility Activities
are as follows:
Company's Slogan: Turn your face into the sun and the shadows fall behind you.
Company's Vision: To be the No.1 forging company in the world by 2008.
Special Notes: Part of the Kalyani Group.
Company Type: Indian Multi National Industry Sector Engineering / Machinery
Products / Services :1. Forging steel
2. forging forge arcticles
3. Finished crankshafts

No. of employees: 7000

Other locations of factories / offices :12 Manufacturing locations across 6 countries 4 in

India (Mundhwa, Chakan, Baramati & Satara) 3 in Germany, 1 in Sweden, 1 in Scotland,
1 in USA & 2 in China

Financial result for time period April 2008 - March 2009

-Sales Rs. 2106 Crores

-Profit before tax: Rs. 158 Crores

Net profit after tax: Rs. 103 Crores

CSR Budget: Not Disclosed

CSR Activities
Trust / Foundation for CSR :No

CSR Areas :

1. Children

2. Community Welfare

3. Education

4. Senior Citizens

5. Vocational Training

6. Women

Three main CSR activities :

1. Education

2. Environment

3. Community welfare
Publish Sustainability Report No
Member of Global Compact
No
CSR activities in brief
Pg. 25, Annual Report, Management Discussion and Analysis.

Corporate Social Responsibiity Activities in brief:

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In addition to focusing on maximising long term shareholder value, BFL has always been
a responsible corporate citizen and continues to work for other stakeholders and the
community at large. BFL’s corporate social responsibility initiatives are focussed on
employees, the community around its facilities and the environment.
In 2008-09, there was increased energy in the CSR activities with wider participation of
BFL employees. In a structured way, every department at Mundhwa has taken up a
specified activity. This way the CSR activities have become integral to the work profile
of employees at Mundhwa.
Some of the activities include:
Running of 3 community centers which employ the wives of BFL employees, where they
are provided vocational training to make them self sufficient. For example, BFL factory
at Mundhwa purchases uniforms and hand gloves stitched by them.
CSR activities conducted by the employees of BFL focus on three groups: women, senior
citizens & underprivileged children wherein each department in the company has adopted
an institution around Pune. The employees visit the institutions regularly. Various
institutions adopted include schools, old age homes & remand homes.
BFL continues to actively support the efforts of ‘Pratham Pune Education Foundation’
(PPEF), which imparts primary education to the children of economically weaker
sections of society. The foundation has delivered education programmes to a large
number of children during its existence.
On the environment front there have been active drives at tree plantation
across Pune and training and lectures were delivered by the company’s in-house
environment specialists at different forums.
Measures taken by BFL to reduce fossil fuel consumption include improving efficiency
of furnaces and recuperation of waste heat. BFL continues to procure significant portion
of its energy requirement by way of power generated from wind energy.
-----------------------------------
(As on 27-11-09, information on CSR activities on the company website is the same as
was available last year)

http://www.bharatforge.com/commitment/commitment.asp
Commitment
At Bharat Forge, we believe that as a corporate citizen, we should reciprocate and give
back to the society that has given us so much. The company is therefore, morally
committed to addressing issues such as Education, Quality, Environment and
Community.
* Education
PRATHAM PUNE EDUCATION FOUNDATION (PPEF)
As part of its Corporate Social Responsibility, Bharat Forge is closely involved with
activities of the India Education Initiative and PPEF. Mr. B. N. Kalyani is the Founder
and Chairman of PPEF, which is engaged in providing primary education to children in
the age group of 3-14, belonging to the most underprivileged sections of the local
community. Over the past 4 years, PPEF has touched the lives of over 50,000 children in
Pune, and has become an important catalyst for women empowerment.

PPEF operates through an extensive network of Balsakhis, Balwadis, Bridge Courses and
Outreach Programmes. PPEF's contributions have resulted in Pune achieving almost
100% literacy.
http://www.bharatforge.com/commitment/education.asp
---------------------------------------
* Environment
Green Energy - Making our planet more habitable.
In India, there has been an upsurge for the development of non-conventional energy
projects for quite some time. The likely depletion of fossil fuels means that we have to
depend more and more on non-fossil fuel based energy. To further strengthen our
commitment to environment, we ventured into the Green Energy Concept - one of the
best and fastest ways to generate power by non-polluting wind as the source of energy.
Implemented in phases from 1998 onwards, today these wind turbines are generating 50
million units annually and supplying power to Bharat Forge. Located in the picturesque
Sahyadri ranges, the wind farm currently meets most of our power requirement, which is
green energy, and has no pollution element.
We manufacture all our products using this green energy, thereby contributing to the
environment too.
We are committed to:
* Preventing pollution, maximizing recycle and reducing wastes, discharges and
emissions generated by processes.
* Conservation of natural resources by using them in a responsible and efficient
manner across all operations.
* Encouraging tree plantation and promoting green belts and lush green surroundings
at all our manufacturing locations so as to work in harmony with nature.
We as a group are conscious of our responsibility towards creating, maintaining and
ensuring a safe and clean environment.
An elaborate landscaping work was planned and undertaken by Bharat Forge in 1988 and
is still under way. The 87 acres Bharat Forge campus initially had 893 trees – some
planted and some which had naturally taken root. Today, this population stands at 4364
trees and 5200 shrubs and vast stretches of lawns.
Simultaneously, Bharat Forge has been undertaking studies to monitor the effect of
plantation on ambient air quality and sound levels, with the help of investigators from the
school of Environmental Sciences, University of Pune. Collection of air and dust samples
was done at 15 different locations in the premises. Chemical analysis of the sample
indicated a very positive impact with lowering of pollution. Investigations are done on a
periodic basis and results of investigations are made available to industrial houses and
Government Agencies concerning pollution control.

Community Initiatives
At Bharat Forge, a global business perspective goes hand-in-hand with a local
community focus. Our emphasis on building strength and adding value extends beyond
the customers we serve and the products we make, to the communities and
neighborhoods we work in. Bharat Forge community relations program consists of a
dynamic combination of associate volunteer efforts and corporate giving / community
activities.
Our community involvement reflects our values as a corporation. Most of Bharat Forge’s
community and business contributions, sponsorships and volunteer activities support
educational, youth-focused initiatives programs that have a direct impact on our future
workforce.

Community Centres
The Kalyani Group Community Centre is where the benefits of industrial progress are
enjoyed by the employee and his / her family. The centre is a space for social
emancipation, recreation, and income generation. Run with a professional attitude toward
community development.
For Twenty-five years, three community centres are functioning in full-fledged manner.
The activities of the community centre include :

Income generation for women

At the Community Centres, women stitch Uniforms includingshirts, trousers, boiler suits,
aprons, and handgloves which cater to the in-house requirements of Bharat Forge. There
areother initiatives like Rakhi Making that give boost to their creativity and generate
income.
A variety of vocational training is imparted to them and theproducts made by them are
exhibited in exhibition which in turnhelps the women to generate income for themselves.
Alongwith this they have formed saving groups among themselves.

Personality development camps

Day camps for the women include training in :
* Communication Skills
* Health / Nutrition
* Time Management
* Bank / Postal Transactions
* Dealing with Alcoholism
* Yoga
* Visit to social institutions / industry
Skill development programmes
Various workshops are organized for skill development, such as :
* Cookery
* Painting
* Embroidery
* Purse / bag making
* Ceramic painting

Medical check-ups
Well known, qualified doctors visit the community centers on a regular basis. This clinic
helps in early detection of health problems as well as in creating health awareness among
women.

Health and safety related programmes

* Aids awareness programmes
* Training in First Aid
* Family education for couples
* Safety at home training for children
* Programmes on healthy food habits
* Cancer Awareness Lectures
* Guidance on physical and mental health after 40

Extracurricular activities
The community centre also organises excursions and competitions in cookery, interior
decoration, and essay writing. Women are also encouraged to participate in drama and
dance, besides festivities like Haldikumkum, Navratri, Diwali Exhibition and
Independence Day.

Camps for children

Personality Development Camps during vacations, include :
* Writing and elocution skills
* Dramatics
* Art and craft
* Leadership qualities
* Environmental awareness
* Anand Mela (Fun Fair)

Home Management Course for adolescents

Conducted to teach adolescents basic skills of home management. The topics include:
* Intra-family interaction
* Discipline at home
* Home management / budgeting
* Health / senior citizen care / nutrition
* Sex education
Competitions
To help the children to develop their communication skills and confidence level, various
kinds of competitions are conducted such as :
* Elocution.
* Essay writing.
* Drawing.
Company Contact Information Company Name Bharat Forge Ltd

Registered Address : Pune Cantonment Mundhwa Maharashtra, Pune - 411 036

Phone 020-26702777
Fax 020-26822387
Email id bkalyani@bharatforge.com info@bharatforge.com
Website http://www.bharatforge.com
Year of Establishment 1961
Name of the Chairman / CEO Mr. B.N. Kalyani
Designation Chairman & Managing Director
Karmayog CSR 2009 Rating 2 / 5
Link http://www.karmayog.org/csr2009/csrdetails.aspx?id=476
Karmayog CSR 2008 Rating 2 / 5 Link
http://www.karmayog.org/csr1to500/csr1to500_19269.htm
Karmayog CSR 2007 Rating 2 / 5 Link
http://www.karmayog.org/csr500companies/csr500companies_7389.htm
Analysis of Changing face of Annual Report of its company by comparing the
annual reports of the company for past 3 years.
Directors Report Year End : Mar '10
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.