MIRA INFORM REPORT

Report Date :

04.01.2011

IDENTIFICATION DETAILS

Name :	BHARAT FORGE LIMITED

Registered Office :	Mundhwa, Pune Cantonment, Pune – 411036, Maharashtra

Country :	India

Financials (as on) :	31.03.2010

Date of Incorporation :	19.06.1961

Com. Reg. No.:	11-12046

CIN No.: [Company Identification No.]	L25209PN1961PLC012046

TAN No.: [Tax Deduction & Collection Account No.]	PNEB0272E

Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.

Line of Business :	Manufacturing and Sale of Steel Forgings, Finished Machined Crankshafts, Couplings, Front Axle Assembly and Components.

RATING & COMMENTS

MIRA’s Rating :

A (66)

RATING

STATUS

PROPOSED CREDIT LINE

56-70

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

Fairly Large

Maximum Credit Limit :	USD 60000000

Status :	Good

Payment Behaviour :	Regular

Litigation :	Clear

Comments :	Subject is a well established and a reputed company having fine track. Financial position of the company appears to be sound. Directors are reported to be experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – April 1, 2010

Country Name

Previous Rating

(31.12.2009)

Current Rating

(01.04.2010)

India

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INFORMATION PARTED BY

Name :	Mr. Besane
Designation :	Deputy Manager
Contact No.:	91-20-26702777
Date :	04.01.2011

LOCATIONS

Registered Office/ Factory :	Mundhwa, Pune Cantonment, Pune – 411 036, Maharashtra, India
Tel. No.:	91 - 20 – 26702777 / 26702476 / 26702544
Fax No.:	91 - 20 – 26822163 / 26822387 / 26820699 / 26824778
E-Mail :	bflpune@bfl.sprintsmg.ems.vsnl.net.in jtarapore@vsnl.com bharatforge@bharatforge.com info@bharatforge.com secretarial@bharatforge.com
Website :	http://www.bharatforge.com
Area :	5000 sq. ft.
Location :	Owned

Factory 1 :	Gat No. 635, Kuruli Village, Chakan, District Pune – 410 501, Maharashtra, India

Factory 2 :	Opposite Jarandeshwar Railway Station, Vadhuth, District Satara – 415 011, Maharashtra

Factory 3 :	Kusumbe, Jalgaon-Ajantha Road, Jalgaon – 425 003, Maharashtra

Factory 4 :	CDP Bharat Forge GmbH, Julius Saxler – Str.4, D-54550 Daun / Vulkaneifel
Tel. No.:	++ 49 (0) 6592 – 9501- 0
Fax No.:	++ 49 (0) 6592 – 9501 -11

Factory 5 :	CDP Bharat Forge GmbH, Mittelstr. 64, D-58256 Ennepetal
Tel. No.:	++ 49 (0)2333-796-0
Fax No.:	++ 49 (0)2333-796-388
E-Mail :	info@cdp-bharatforge.de

Factory 6 :	Bharat Forge Aluminiumtechnik GmbH and Company KG, Berthelsdorfer Str. 8 09618 Brand-Erbisdorf (Germany)
Tel. No.:	0049 37322 16389
Fax No.:	0049 37322 16333
E-Mail :	info@cdp-at.de

Chennai (Madras) Office :	Fagun Mansion 3^rd Floor, 26, Ethiraj Salai, Chennai- 600 105, Tamilnadu, India
Tel. No.:	91-44-28272116
Fax No.:	91-44-28270921
E-Mail :	bflmds@vsnl.com

New Delhi Office :	Antriksh Bhavan, 14^th Floor, 22 Kasturba Gandhi Marg, New Delhi-110 001, India
Tel. No.:	91-11-3312484 / 3312946
Fax No.:	91-11-3357083
E-Mail :	bfldelhi@bol.net.in bhaforge@bol.net.in

Mumbai Office :	Mittal Towers, B Wing, 15^th Floor, Opp. New Council Hall, Nariman Point, Mumbai – 400 021, Maharashtra, India
Tel. No.:	91-22-22830317/22830523
Fax No.:	91-22-22040053
E-Mail :	bharatforgemumbai@vsnl.com

Kolkata (Calcutta) Office :	20 Netaji Subash Road, Kolkata – 700 001, West Bengal, India
Tel. No.:	91-33-22305976 / 22306592
Fax No.:	91-33-28500017
E-Mail :	bflcal@vsnl.net

Jamshedpur Office :	61-A , Rajendra Nagar, Sakchi, Jamshedpur – 831 001
Tel. No.:	91-657-2426732
E-Mail :	jsr_bfljsr@sancharnet.in

Bangalore Office :	23/2, 2^nd Floor, Kammanahalli Main Road, Next To Vinayak Temple Opp Libetrty Shoe Mart, St Thomas Town Post, Bangalore 560084, Karnataka, India
Tel. No.:	91-80-25806570
Fax No.:	91-80-25806570
E-Mail :	bharath_forge@dataone.in

DIRECTORS

(AS ON 31.03.2010)

Name :	Mr. B. N. Kalyani
Designation :	Chairman and Managing Director
Qualification :	B.E. (Mech.) (Hons.), M.S. (M.I.T.)
Date of Appointment :	01.04.1972

Name :	Mr. S. M. Thakore
Designation :	Director

Name :	Mr. S. D. Kulkarni
Designation :	Director

Name :	Mr. Pratap G Pawar
Designation :	Director

Name :	Prof. Dr. Uwe Loos
Designation :	Director

Name :	Mr. P. C. Bhalerao
Designation :	Executive Director
Qualification :	B.E. (Elect.), M.B.A., D.T.M.
Date of Appointment :	3^rd March, 1987
Previous Employment :	Bharat Steel Tubes Limited, Delhi – Dy. General Manager

Name :	Mrs. Lalita D Gupte
Designation :	Director

Name :	Mr. P. H. Ravikumar
Designation :	ICICI Nominee Director

Name :	Mr. Alan Spencer
Designation :	Director

Name :	Mr. Naresh Narad
Designation :	Director

Name :	Dr. T. Mukherjee
Designation :	Director

Name :	Mr. G. K. Agarwal
Designation :	Deputy Managing Director
Qualification :	B.E. (Mech.), M.B.A.
Date of Appointment :	1^st November, 1976
Previous Employment :	Guest Keen Williams Limited, Howrah, West Bengal

Name :	Mr. Amit B. Kalyani
Designation :	Executive director

Name :	Mr. B. P. Kalyani
Designation :	Executive Director

Name :	Mr. S. E. Tandale
Designation :	Executive Director

Name :	Mr. P. K. Maheshwari
Designation :	Executive Director

Name :	Mr. Sunil Chaturvedi
Designation :	Executive Director

KEY EXECUTIVES

Name :	Mr. Besane
Designation :	Deputy Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 30.09.2010)

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	813,115	0.35
Bodies Corporate	97,089,055	41.71
Sub Total	97,902,170	42.06

(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	97,902,170	42.06

(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	10,781,080	4.63
Financial Institutions / Banks	24,150,101	10.37
Insurance Companies	9,181,637	3.94
Foreign Institutional Investors	34,346,646	14.75
Sub Total	78,459,464	33.70

(2) Non-Institutions
Bodies Corporate	21,818,303	9.37
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	22,402,963	9.62
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	8,730,197	3.75

Any Others (Specify)	3,472,019	1.49
Clearing Members	190,649	0.08
Trusts	2,677,525	1.15
Non Resident Indians	603,845	0.26
Sub Total	56,423,482	24.24

Total Public shareholding (B)	134,882,946	57.94

Total (A)+(B)	232,785,116	100.00

(C) Shares held by Custodians and against which Depository Receipts have been issued	9,200	-

Total (A)+(B)+(C)	232,794,316	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing and Sale of Steel Forgings, Finished Machined Crankshafts, Couplings, Front Axle Assembly and Components.

Products :

Item Code No. (ITC Code)	73269099
Product Description	Forging Steel Forging Forge Articles

Item Code No. (ITC Code)	84831099
Product Description	Crankshafts Finished Machined Crankshafts

Item Code No. (ITC Code)	87081090
Product Description	Axles Front Axle Assembly and Component of Motor Vehicle

Exports :

Countries :

· Argentina

· Bangladesh

· Germany

· Iran

Imports :

Products :

Raw Materials

Countries :

· China

· Sweden

· Mexico

· France

· Germany

Terms :

Selling :

L/C, D/A and D/P

Purchasing :

L/C, D/A and D/P

PRODUCTION STATUS (AS ON 31.03.2010)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production

Steel Forging	MT	320000	240000	128463 (d)
Finished Machined Crankshaft	Nos.	600000	518100	317612
Couplings	MT	600	600	--
Front Axle Assembly and Components	Nos.	600000	533600	175432
Well Head Assembly and Parts	Nos.	5000	--	--
Aluminium Road Wheel	Nos.	4000	4000	--
General Engineering Equipments	Nos.	1100	1100	8
Material Handling Equipments	Nos.	1350	1350	--
Hydraulic and Mechanical Presses	Nos.	250	250	--
Bandshaw Machines for cutting Metallic Round and Square Bars	Nos.	50	50	--
Front Axle Assembly at Dharwar	Nos. (b)	50000	--	--
Finished Machined Crankshaft (Chakan)	Nos.	300000	241500	108074
Front Axle Assembly and Components at Chakan	Nos.	300000	219600	72234
Transmission Parts	Nos.	3000000	2041000	1496568
Seal Rings, Clamps and Hubs	Nos.	50000	7000	--
Rocker Arm Assembly	Nos.	100000	--	--
Bonnets and Key Shaft	Nos.	50000	--	--
Steel Forgings at Baramati	MT	48000	47250	2701 (d)
Machined Components at Baramati	Nos.	120000	12000	5852
Ring Rolling	MT	45000	40500	203

NOTE:

(a) Annual Capacity on maximum utilisation basis.

(b) Under Registration with Government Authority.

(c) Since the Company's installed capacity is dependent on Product mix, which in turn is decided on the basis of actual demand for various products from time to time, it is not feasible for the Company to give exact installed capacity. The Company has, however, indicated installed capacity on the basis of year's Product mix, as certified by the Chairman and Managing Director and being a technical matter accepted by the Auditors as correct.

(d) Includes captive consumption 47285 M.T. (2008 - 2009: 54263 M.T.) and Baramati 42 M.T.

GENERAL INFORMATION

Customers :

Wholesalers

· Meritor Automotive, USA

· Dana Corporation, USA

· Mercedes Benz, Germany

· New Holland Ford, Europe

· Mitsubishi Motor Corporation, Japan

· Volvo Trucks, Sweden

· Lister-Petter, Europe

· Dirona, Mexico

· Isuzu, Japan

· Macimex, Mexico

· Kirloskar Group

· Bajaj Auto Limited

· Maruti Udyog Limited

· Premier Automobiles Limited

· Eicher India Limited

· Larsen and Toubro Limited

· Daewoo Motors

· Simpsons Engines

· Hindustan Earthmoving Equipment

· Tata Engineering and Locomotive Company Limited

· Mahindra and Mahindra Limited

· Ashok Leyland Limited

· Bharat Earth Movers Limited

· Greaves Limited

· Swaraj Mazda

· Escorts Limited

No. of Employees :

3000 (Approximately)

Bankers :

· Bank of India, Pune

Branch, Maharashtra, India

· Bank of Maharashtra,

“Lokmangal”, 1501 Shivajinagar (Head Office), Pune – 411 005, Maharashtra, India

· ANZ Grindlays Bank PLC, Vereinigtes Konigreich

· Bank of Baroda

· Canara Bank

· State Bank of India

· HDFC Bank Limited

· ICICI Bank Limited

· Citibank N A

· Standard Chartered Bank

· ABN Amro Bank NV

· Axis Bank Limited

· Caylon Bank

· Corporate and Investment Bank

Facilities :

Secured Loans :

31.03.2010

Rs. in Millions

31.03.2009

Rs. In Millions

Debentures :

250011.95 % Redeemable secured Non-Convertible Debentures (2009-2017) Sixteenth series of Rs.1000000/- each For Security.

3500 (--) 10.75% Redeemable secured Non-Convertible Debentures (2009-2015) Seventeenth series of Rs.1000000/- each For Security

2500.000

3500.000

2500.000

Foreign Currency Term Loans :

From Bank of Baroda, London

(Charge satisfied)

From Bank of India, London

From Calyon, Singapore

From Standard Chartered Bank

(Charge satisfied)

336.820

2245.500

253.600

507.200

2536.000

811.520

Others :

From Banks, against hypothecation of stocks of Semi finished and Finished goods, raw materials, Finished dies and die blocks, Work-in-Progress, Consumable stores and spares, Book Debts etc.

Cash Credit

Preshipment Packing Credit-Foreign Currency

Preshipment Packing Credit-Rupee Interest accrued and due on above

108.800

530.260

0.010

197.220

328.820

1571.950

0.280

Total

9221.390

870.659

Unsecured Loans :	31.03.2010 Rs. in Millions	31.03.2009 Rs. in Millions

Foreign Currency Convertible Bonds (FCCBs)
0.5% Tranche 1 FCCBs, outstanding U.S. $ 43.5 Million	1953.580	2206.320
0.5% Tranche 2 FCCBs, outstanding U.S. $ 60.0 Million	2694.600	3043.200
0% Tranche A FCCBs, outstanding U.S. $ 40.0 Million	1796.400	2028.800
0% Tranche B FCCBs, outstanding U.S. $ 39.9 Million	1791.910	2023.730

Sales tax deferral liability under Government of Maharashtra Package Scheme of Incentives	69.440	69.440
Fixed Deposits matured but unclaimed : Short term borrowings by issue of" Commercial Papers" by the Company (Maximum balance during the period Rs.1 000 million)	0.400 1000.000	0.570 --

Total	9306.330	9372.060


Banking Relations :	--

Auditors :
Name :	Dalal and Shah Chartered Accountants

International Auditors :
Name :	Mahajan and Aibara Chartered Accountants

Membership :	· Confederation of Indian Industry

Associates :	· Kalyani Carpenter Special Steels Limited Pune, Maharashtra, India · Technica U. K. Limited · ALSTOM Bharat Forge Power Limited

Subsidiaries :	· Bharat Forge – Alstom Joint Venture at Mudra · Bharat Forge – NTPC Joint Venture at Solapur · CDP Bharat Forge GmbH · Bharat Forge Beteiligungs GmbH · Bharat Forge America Inc · Bharat Forge Holding GmbH · Bharat Forge Aluminiumtechnik GmbH and Company KG · Bharat Forge Aluminiumtechnik Verwaltungs GmbH · Bharat Forge Hong Kong Limited · Bharat Forge Kilsta AB · Bharat Forge Scottish Stampings Limited · FAW Bharat Forge (Changchun) Company Limited · Bharat Forge Daun GmbH · BF New Technologies GmbH · BF-NTPC Energy Systems Limited · Kalyani Alstom Power Limited

CAPITAL STRUCTURE

AS ON 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount

300000000	Equity Shares	Rs.2/- each	Rs.600.000 millions
43000000	Cumulative Preference Shares	Rs.10/- each	Rs.430.000 millions
2000000	Unclassified Shares	Rs.10/- each	Rs.20.000 millions

	Total		Rs.1050.000 millions

Issued Capital :

No. of Shares	Type	Value	Amount

222828621	Equity Shares (See Note A and B below)	Rs.2/- each	Rs.445.660 millions

Subscribed Capital :

No. of Shares	Type	Value	Amount
222652271	Equity Shares of Rs.2/- each fully paid	Rs.2/- each	Rs.445.310 millions
172840	Add: Forfeited Equity Shares (amount paid up)		Rs.0.090 million
	Total		Rs.445.400 millions

NOTES: OF THE ABOVE SHARES

A Prior to Sub-division of Share Capital:

(i) 47600 Equity Shares of Rs.10/- each were issued as fully paid up for consideration other than cash, pursuant to a contract.

(ii) 8682500 Equity Shares of Rs.10/- each were issued as fully paid Bonus Shares by way of capitalisation of Share Premium Account and Reserves.

(iii) 1568600 Equity Shares of Rs.10/- each were issued at a premium of Rs.186.93 per share, under Senior Executives Stock Cum Share Option Scheme.

(iv) The Company had issued 3636500 Equity Shares of Rs.10/- each (later sub-divided into 18182 500 Equity Shares of Rs2/- each) in April and May, 2005 represented by 3636500 Global Depository Receipts (GDRs) (on sub-division 18182 500 GDRs) evidencing "Master GDR Certificates" at a price of U.S.$ 27.50 per GDR (including premium). GDRs outstanding at the close of the year are 9 200. The Funds raised have been utilised towards the object of the issue.

(v) The Company had also issued Foreign Currency Convertible Bonds aggregating U.S.J 199.90 million optionally convertible at an initial price specified in offering circular (see note 18). As the initial price is subject to adjustments specified in the offering circular and inability to assess the proportion of conversion, no amounts have been shown under issued Equity Share Capital, in respect of Equity Shares deemed to be issued on exercise of conversion by bondholders. Outstanding Bonds at the close of the year aggregated Rs.8236.49 million of which Bonds aggregating U.S.$ 1.25 million were converted on April 09,2010 and Bonds aggregating U.S.$ 102.25 million were redeemed on April 20,2010.

B Subsequent to Sub-division of the Equity Share Capital:

(i) 2 340 Equity Shares of Rs.2/- each out of the previous issue of Equity Shares on a Right basis together with 234 detachable warrants entitled to subscription of 1170 Equity Shares of Rs.2/- each, have been kept in abeyance pending adjudication of title to the pre right holding.

C Since the close of the year:

(ii) 142045 Equity Shares were issued and allotted on April 09,2010 at a premium of Rs.382.12 per share on conversion of U.S.$ 1250 000 0.50% Foreign Currency Convertible Bonds (FCCBs) Tranche-2 in terms of Offering Circular dated 15th April, 2005.

(iii) The Company issued and allotted 10000000 Equity Shares of Rs.2/- each at a price of Rs.272/- per share aggregating to Rs.2720 million on 28th April, 2010 simultaneous with the issue of 1760 10.75% Non Convertible Debentures (NCDs) of a face value of Rs.1000000/- at par, together with 6 500 000 warrants at a price of Rs.2/- each entitling the holder of each warrant to subscribe for 1 equity share of Rs.2/- each at a price of Rs.272/- at any time within 3 years from the date of allotment. The above securities were subscribed and allotted to Qualified Institutional Buyers on 28th April, 2010.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		445.400	445.400	445.400
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		14838.990	14423.880	14287.370
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		15284.390	14869.280	14732.770
LOAN FUNDS
1] Secured Loans		9221.390	8706.590	4615.810
2] Unsecured Loans		9306.330	9372.060	8259.050
TOTAL BORROWING		18527.720	18078.650	12874.860
DEFERRED TAX LIABILITIES		1064.990	1616.710	1182.480

TOTAL		34877.100	34564.640	28790.110

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		17761.090	18309.480	13174.420
Capital work-in-progress		1385.400	2322.810	4271.360

INVESTMENT		7209.470	3671.990	5936.720
TECHNICAL KNOW-NOW		0.000	2.100	4.180

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	3947.980	3642.420	3381.180
	Sundry Debtors	3071.680	2601.070	3562.890
	Cash & Bank Balances	4934.990	3667.020	1649.850
	Other Current Assets	577.540	839.340	881.060
	Loans & Advances	5583.840	6432.910	6785.020
Total Current Assets		18116.030	17182.760	16260.000
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	3644.000	2253.430	6343.310
	Other Current Liabilities	3387.830	1659.950
	Provisions	2563.060	3011.120	4513.260
Total Current Liabilities		9594.890	6924.500	10856.570
Net Current Assets		8521.140	10258.260	5403.430

MISCELLANEOUS EXPENSES		0.000	0.000	0.000

TOTAL		34877.100	34564.640	28790.110

PROFIT & LOSS ACCOUNT

	PARTICULARS			31.03.2010	31.03.2009	31.03.2008
	SALES
			Income	18563.980	20585.910	21964.960
			Other Income	323.380	476.740	884.040
			TOTAL (A)	18887.360	21062.650	22849.000

Less	EXPENSES
			Manufacturing and Other Expenses	15435.800	17991.560	17793.280
			TOTAL (B)	15435.800	17991.560	17793.280

Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)			3451.560	3071.090	5055.720

Less	FINANCIAL EXPENSES (D)			0.000	0.000	0.000

	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)			3451.552	3071.090	5055.720

Less/ Add	DEPRECIATION/ AMORTISATION (F)			1644.390	1494.440	1085.930

	PROFIT BEFORE TAX (E-F) (G)			1087.170	1576.650	3969.790

Less	TAX (I)			536.710	543.800	1233.900

	PROFIT AFTER TAX (G-I) (J)			1270.460	1032.850	2735.890

Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD			6167.510	5570.290	--

	Excess/ (Short) Provision for Taxation and Tax Payments			0.430	(29.040)	--

Less	APPROPRIATIONS
		Debenture Redemption Reserve		206.220	26.100	--
		General Reserve		127.500	120.000	--
		Proposed Dividend		232.790	222.650	--
		Tax on Proposed Dividend		38.660	37.840	--
	BALANCE CARRIED TO THE B/S			6833.230	6167.510	--

	EARNINGS IN FOREIGN CURRENCY
			FOB Value	7039.960	9883.000	NA
	TOTAL EARNINGS			7039.960	9883.000	NA

	IMPORTS
			Raw Materials and component for manufacturing	319.980	226.140	369.790
			Die, block, Die Steel, Tool steel, and spares	338.810	699.070	615.440
			Capital Goods	218.670	1442.850	1626.710
	TOTAL IMPORTS			877.460	2368.060	2611.940

	Earnings Per Share (Rs.)			5.71	4.51	--

QUARTERLY RESULTS

PARTICULARS	30.06.2010	30.09.2010
Type	1^st Quarter	2^nd Quarter
Sales Turnover	6300.900	7186.800
Total Expenditure	4756.000	5445.700
PBIDT (Excl OI)	1544.900	1741.100
Other Income	101.400	85.800
Operating Profit	1646.300	1826.900
Interest	299.300	319.700
Exceptional Items	0.000	0.000
PBDT	1347.000	1507.200
Depreciation	468.200	489.900
Profit Before Tax	878.800	1017.300
Tax	284.500	335.900
Reported PAT	594.300	681.400
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	594.300	681.400

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	6.73	4.90	11.97

Net Profit Margin (PBT/Sales)	(%)	5.85	7.66	18.07

Return on Total Assets (PBT/Total Assets}	(%)	3.03	4.44	13.49

Return on Investment (ROI) (PBT/Networth)		0.07	0.11	0.27

Debt Equity Ratio (Total Liability/Networth)		1.84	1.68	1.61

Current Ratio (Current Asset/Current Liability)		1.88	2.48	1.50

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS: (RS. IN MILLIONS)

Particulars	31.03.2010	31.03.2009	31.03.2008

Sundry Creditors
- Dues to Micro and Small Enterprises	0.780	1.570	NA
- Dues to other than Micro and small Enterprises	3643.220	2251.860	NA

Total	3644.000	2253.430	NA

HISTORY:

Subject is a wing of the Kalyani group of companies. The Company was incorporated in June 1961 and promoted by Neelkanth A Kalyani. Subject's principal activities are to manufacture and sell closed and open die forgings, machined components and aggregates. The Company operates in two segments namely Steel Forging and General Engineering. The products of the Company include front axle assembly and components, general engineering equipment, hydraulic and mechanical presses, bandsaw machines for cutting metallic rounds, couplings and material handling equipment. The subject caters to the medium and heavy commercial vehicle segments. The manufacturing plants are located at Pune, Satara and Jalgaon districts of Maharashtra. The Company's operations are carried out through its German subsidiary, Carl Dan Peddinghus GmbH. During the year 1982, the Balchandra Investment Private Limited became a wholly owned subsidiary of the Company. In 1983, an agreement was concluded with Tokyo, Drop Forging Company Limited of Japan for technology upgradation, cost optimisation and quality improvements in the Company's forging unit and an agreement was made with Maharashtra Electronics Corporation Limited (MELTRON) to establish a joint venture to manufacture colour T.V. sets. Forge Investment Limited and Mundhwa Investment Limited became the subsidiaries of Balchandra investment during January of the year 1984. To obtain technology and know-how for the manufacture of couplings, the Company entered into a collaboration agreement with Torsiflex Limited, U.K in the year 1985.

During the year 1986, the registration was obtained for the manufacture of assemblies, components, spares, and 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. In 1989, a joint venture under the name of Kalyani Sharp India Limited (KSIL) was set up for the manufacture of Televisions and VCRs. The Financial Services Division originated for investment in various fund-based areas in 1992, during the year, it diversified its portfolio into real estate development. In the year 1994, Starflower Investment and Finance Limited and Chakrapushpa Investment and Finance Limited were ceased to be subsidiaries of the Company. Subject had entered into a technical know-how and assistance agreement in the year 1995 with the Metalart Corporation, Japan for the manufacture of small precision forgings. The company has diversified its financial services division into production of wheel rims in the year 1998. Subject has demerged its Investment Division and Wind Mills Division in the year of 2000. Bharat Forge signed a contract in the year 2002 with Dana Corporation's Spincer Europe Limited for the supply of forgings.

The company secured the second Largest Customer in China during 2003. Guangxi Yuchai Machinery Company. The second Auto Works among the largest Auto companies in China, which was a stepping-stone for acquiring a large size of the Chinese Markets. The company emerged as world's second largest forging company with the acquisition of Carl Dan Peddinghus GmbH and Company KG (CDP) of Germany in November 21, 2003. Subject received `outstanding organisation' award for quality from the National Institution for Quality and Reliability in 2005. The company acquired Imatra Kilsta AB, Sweden and Scottish Stampings, Scotland. Subject has signed a Joint Venture contract in the year 2005 with FAW Corporation for its forging business and in the same year the company entered in JV contract with FAW Corporation, China. Through its wholly owned subsidiary, Bharat Forge Beteiligungs GmbH, Germany, the company acquired Imatra Kilsta AB, Sweden along with its wholly owned subsidiary, Scottish Stampings Limited, Scotland (together called Imatra Forging Group) on September 21, 2005, which are now renamed as Bharat Forge Kilsta AB (BF Kilsta) and Bharat Forge Scottish Stampings Limited, respectively. The company also acquired Federal Forge now known as Bharat Forge America Inc. Provided subject with a manufacturing presence in USA - one of its largest markets. Subject has embarked on setting up of a Centre for Advanced Manufacturing at Baramati in Maharashtra along with machining for such high-end forged components. In addition, as on March 2008, the company is also setting up an open die-forging unit at its existing facilities in Mundhwa. The total estimated cost of these projects is Rs.3.5 billion. As on February 2008, Bharat Forge signed a memorandum of understanding (MoU) with the largest power generation company, NTPC to set up a joint venture (JV) company for its foray into the capital goods sector. Same month of the same year, the company inked a MoU with the West Bengal Government to set up a one million-ton per annum steel plant in the State. The company is planning to invest Rs.65 billion through Kalyani Steel, the Group Company. In the same year and in same month the company inked a MoU with the West Bengal Government to set up a one million-ton per annum steel plant in the State and planning to invest Rs.65 billion through Kalyani Steel, the Group Company. The project involves a captive Rs.20 billion (out of the total investment) 500-MW power plant besides a downstream unit. In March 2008, subject has signed MoU with Maharashtra government for setting up a centre for advanced manufacturing at Baramati near Pune. In April 2008, the company entering into the French automotive sector with help of acquisition of 89% stake in French forgings company Groupe Sifcor (Society of Industrial and Financial Courcelles). In May of the year 2008, Bharat Forge plans to unlock the value of its overseas assets by transferring them to a holding company and then listing it.

MANAGEMENT DISCUSSION AND ANALYSIS:

THE EXTERNAL ENVIRONMENT

In the aftermath of the 'sub-prime' led global financial crisis in 2008, economies across the world went into a tailspin. Chart A shows how developed economies like the US, UK and the European Union witnessed contraction

in GDP from Q3, 2008. With such sharp de-growth, global demand for industrial and engineering products crashed. This trend continued through most of 2009.

Towards the end of 2009 and Q1, 2010, there were some positive signs. Global financial markets witnessed a degree of stabilisation. With two successive quarters of positive growth from Q4, 2009, the US seems to have come out of recession. Not so the Euro zone and the UK, which continue to witness very low or negative growth. Moreover, the Greek debt crisis has created severe uncertainties in Western Europe, and has put the euro under significant strain.

The contrast betv/een the developed economies and the emerging Asian giants such as China and India could not be greater. Chart B shows that after three quarters of reduced growth, China's economy grew steadily from Q2, 2009, to record a GDP growth of 8.7% for 2009. It did even better in Q1, 2010 by recording 11.9% GDP growth. India, too, recovered from a slight slump and has grown by 7.4% for 2009-10. It would seem that these economies are on their way to attaining their higher growth trajectories of the pre 'Lehman collapse' days.

PERFORMANCE SUMMARY

As a global major in the forging industry that caters to markets across the world through its production facilities in Europe, Asia and America, the business of Bharat Forge ('BFL' or 'the Company') was significantly affected by the adverse global economic developments. The Company's financial performance for 2009-10, therefore, reflects the sharp demand downturn. Given below are the performance highlights of the Company as a consolidated entity during 2009-10 (or FY2010).

Key Consolidated Highlights FY 2010

· Sales decreased by 30% from Rs.47.75 bn in FY2009 to Rs.33.28 bn in FY2010

· Total income decreased by 30% from Rs.48.43 bn in FY2009 to Rs.33.79 bn in FY2010

· Earnings before interest, taxes, depreciation and amortisation (EBITDA) were Rs.3.9 bn in FY2010. The EBITDA margin was 11.5%

· Profit before taxes (PBT) before exceptional items was Rs.141.9 million

· Strong fundamental performance in the standalone business

· Restructuring of overseas operations completed, resulting in a one-time net cost of Rs.742 million

· FCCB of US$131.5 million repaid

· Successful fund raising via QIP of US$ 140 million including warrants

Over the last decade, Company had adopted a growth strategy, which was primarily derisked in terms of geography and sectors. The crux of this strategy was that, under most circumstances, market downturns in some geographical and sectoral areas would be surmounted by upswings in others. Despite having this de-risked business model in place, the Company's business performance was adversely affected in FY2010 due to the unprecedented downturn across all global markets after the financial crisis that began in September 2008.

While performance was affected in FY2010, Company confronted these adversities by re-calibrating its business strategy and reorganizing internally to best overcome the current situation and further enhance the Company's potential to reap benefits from the next round of global growth.

On the marketing front, Company continued to increase its efforts to increase its market size, scope and penetration by:

· Focusing on new customers, new markets in terms of geographies and new product applications with thrust on non-auto sectors.

· Increasing market share of existing businesses.

In operations, the Company embarked on rapidly restructuring its internal processes and systems by laying emphasis on:

· Cost reduction and rightsizing of all operations to reduce breakeven levels for plants, so that they are calibrated to generate profits, even when operating at lower levels of capacity utilisation.

· Generating more cash from the system and streamlining working capital.

On the market front, there was a concerted effort at entering newer geographies. Company was successful in winning new orders from customers in Japan, Brazil and Russia for automotive and non-automotive applications. Within India, the Company has made progress in enhancing its presence in the non-automotive field by developing critical products for key growth sectors — thus providing an indigenous supply source for products that were previously imported.

Regarding operations, there have been focused efforts on cost reductions and lean initiatives. The cost reduction efforts included rationalisation of production equipments to optimise their utilisation, which helped reduce costs such as fuel, and electricity consumption. Efforts were also undertaken towards rationalization of.manpower and process improvements. In addition, a separate team was created to promote lean management practices in the Company. The team focuses on streamlining the movement of material and utilisation of resources at the plant. This has helped the Company to manage inventory better and increase overall productivity.

These initiatives have borne fruit. There has been a steady improvement in the performance of the Indian business, as reflected in the stand-alone financials of the Company.

STANDALONE BUSINESS PERFORMANCE: 2009-10

Company’s standalone business has a strong focus on the commercial vehicles (CV) sector for the Indian market as well as the US and Europe through exports. Globally, the CV sector went into a tail-spin from October 2008, and witnessed a volume decline of more than 50% within a short span of time.

The Indian automotive market recovered swiftly from the lows of October-December 2008 on the back of pick up

in economic activity across the board, benign interest rates and sops provided by the Indian government. The industry registered sequential quarterly growth across all segments and recorded yearon-year growth of 29%. Company’s quarterly performance in FY2010 mirrored the recovery in the Indian automotive markets. The charts below depict a steady quarter-on-quarter improvement in all key parameters for the standalone operations.

OVERSEAS SUBSIDIARIES:

Company has a large part of its overseas operations based in Europe and given the poor demand conditions; the focus during the year was on restructuring operations and lowering the break-even levels.

Comprehensive cost reduction measures were undertaken across the European and American operations, which included significant reduction in manpower. In fact, manpower at the European operations have been reduced, which has cost the Company approximately Rs.742 million in redundancy payouts. With this onetime exercise, these facilities are now tuned to break-even at much lower capacity utilisation levels and are well positioned to leverage opportunities when markets revive.

Company rationalised its international facilities by successfully closing down its operations in Scotland, which was operating at sub optimal utilization levels. The equipments have been transferred to the facilities in Sweden.

On the marketing front, notable achievements included the addition of new customers in China outside the FAW group (BFL's joint venture partner) and new product development for passenger vehicles in Germany.

OUTLOOK:

FY2010 was a very challenging year. In light of the slowdown, there has been a focus on operations restructuring and optimal utilisation of machinery in India and at the subsidiaries. Subject as a company is structurally better equipped to tackle the downturn even if it were to continue for a prolonged period.

The Company realises that there will be some time before overseas companies see a revival. It, however, believes in the infrastructure led-growth of India; and it is well positioned to leverage opportunities in the Indian market, so that India operations drive growth in the near term. The ramp up of non-automotive facilities is well on the way. The capital goods business is fairly insulated from market vagaries and the commercial vehicles segment in India, too, seems to be out of its demand slump.

Globally, many companies could be in financial distress. This may open up further opportunities for strong industry leaders like company to increase its market share with established relationships with OEMs. When the revival comes, strong companies like company, which have technology, scale, global reach, capability and cost structure, will have opportunities to consolidate its global leadership position.

With a strong India presence and lean overseas subsidiaries, company is cautiously optimistic about its prospects in FY2011.

PERFORMANCE OF THE COMPANY:

During the year, Exports turnover of the Company was Rs.7109 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 significant 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.

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 profitability 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 significant headcount reduction, a very tight control on costs, development of new products and an efficient 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 significant 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.

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 and Company K.G., Germany

iv) Bharat Forge Aluminiumtechnik Verwaltungs GmbH and Company 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 Limited, 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 Limited, India

xiv) Kalyani Alstom Power Limited, (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 financial 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.

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 finalizing 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 first manufacturing facility. BFNESL plans to start ground activities by the third quarter of the current financial year.

B. JOINT VENTURE 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 first 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.

CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF: (RS. IN MILLIONS)

Particulars	31.03.2010	31.03.2009

A. Sales Bills discounted of Which:	3799.810	4575.130
Bills since realised	904.160	1238.090
Matured, Overdue and outstanding since close of the period	--	--

B. Guarantees given by the Company on behalf of other companies:
Balance outstanding	570.090	735.280
(Maximum amount)	(830.940)	(1520.330)

C. Claims against the Company not acknowledged as Debts- to the extent ascertained	147.490	73.380

D. Disputed Income Tax matters	104.320	104.320

E. Excise/Service Tax Demands - matters under dispute	281.850	277.530

F. Customs demands - matters under dispute	322.150	3179.300

TRADE REFERENCE:

· Dana Corporation

· Volvo Trucks

· Kirloskar Group

FIXED ASSETS

· Land, Free hold

· Land, lease hold

· Buildings

· Plant and Machinery

· Railway sidings

· Electrical installations

· Factory equipments

· Engineering instruments

· Furniture and fittings

· Office equipments

· Vehicles and Aircrafts

· Leased assets ( Plant and Machinery)

· Leased assets (Power line)

WEBSITE DETAILS:

PROFILE:

Subject, the flagship company of the USD 2.4 billion Kalyani Group, manufactures various forged and machined components for the automotive and non-automotive sector.

Since commencement of operations in 1966, subject has achieved several milestones and is today among the largest and technologically most advanced manufacturer of Forged and Machined components. As one of India’s emerging multinationals, the company has manufacturing operations across 12 locations and 6 countries - 4 in India, 3 in Germany, one each in Sweden, Scotland, USA and 2 in China.

Our customers include the top five Passenger Car and top five Commercial Vehicle Manufacturers in the world. The list includes virtually every automotive OEM and Tier I companies.

Backed by a full service supply capability and dual-shore manufacturing model, Bharat Forge provides end-to-end solutions from product conceptualization to designing and finally manufacturing, testing and validation.

PRESS RELEASES:

PERFORMANCE FOR SECOND QUARTER OF THE FINANCIAL YEAR 2010-11

Combined revenue (BFL plus its wholly owned subsidiaries) reached Rs.11110.000 Millions, Standalone revenue reached Rs.7270.000 Millions.

Key Highlights:

• Strong Recovery, Growth on track.

• Stand-alone revenues for Q2 grew by 67.7% on a Y0Y basis to reach Rs.7270.000 Millions.

• Exports record impressive Y0Y growth of 86.5% to Rs.2740.000 Millions.

• Net Profit grew by 154. 5% and 14.8% on a YoY and QoQ basis respectively.

• Non auto Continues to witness strong traction.

Pune, 23rd October 2010: Bharat Forge Limited today announced its Q2 results with combined and standalone revenue reaching Rs.11110.000 Millions a Rs.7270.000 Millions respectively.

Stand-alone revenue a EBIDTA for Q2 reached Rs.7270.000 Millions and Rs.1830.000 Millions, a YoY growth of 67.7% and 68.7% respectively. Combined revenue a EBITDA for the quarter was 1,1110.000 Millions and Rs1943.000 Millions, a YoY growth of 56.3% a 105.4% respectively. Standalone Net Profit grew by 154. 5% and 14.8% on a YoY ft sequential basis to Rs.682.000 Millions.

Exports for the quarter have recorded impressive growth of 86.5% a 20.2% on a YoY and sequential basis respectively. The growth in exports has been witnessed across geographies and segments.

The non automotive business continues to witness strong traction from both domestic a export markets with ramp up of production of new programs. Non Auto contribution to the standalone business in Q2 FY11 was 38% as against 33% in QI FY11.

Commenting on the results of the company Mr. B N Kalyani, Chairman and Managing Director said “The Company continues to post strong growth numbers on back of domestic automotive demand and recovery in us a European markets.”

“The non auto business witnessed strong momentum across domestic a export markets with increased order inflow and scale up of production activity at the new facilities.” he added.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.67
UK Pound	1	Rs.69.45
Euro	1	Rs.59.37

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	7
--RESERVES	1~10	8
--CREDIT LINES	1~10	7
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		66

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.

MIRA INFORM REPORT

Steel Forging

3947.980

3642.420

3381.180

3071.680

2601.070

3562.890

4934.990

3667.020

1649.850

577.540

839.340

881.060

5583.840

6432.910

6785.020

18116.030

17182.760

16260.000

3644.000

2253.430

6343.310

3387.830

1659.950

2563.060

3011.120

4513.260

9594.890

6924.500

10856.570

8521.140

10258.260

5403.430

6.73

4.90

5.85

7.66

3.03

4.44

0.07

0.11

1.84

1.68

1.88

2.48

Unit