Ahmednagar Forgings

The Directors have pleasure in presenting the Thirty First Annual
 Report and the Audited Accounts of the Company for the year ended 30th
 June 2008.
 
 FINANCIAL INFORMATION
                                                          (Rs. in Lacs)
 PARTICULARS                                  Year ended     Year ended
                                          30th June 2008 30th June 2007
 
 Total Income                                  66,105.85      59,996.50
 Expenditures                                  54,931.11      49,026.87
 Gross Profit                                  11,174.74      10,969.63
 Depreciation                                   1,970.20       1,211.41
 Profit Before Tax                              9,204.54       9,758.22
 Tax Expenses                                   2,686.88       3,165.01
 Profit after Tax                               6,517.66       6,593.21
 Add. Accumulated Profit                        2,011.85         195.95
 Balance available for appropriation            8,529.51       6,789.16
 APPROPRIATIONS:
 Transfer to General Reserve                    4,000.00       4,000.00
 Proposed Dividend on Equity                      349.20         664.40
 Corporate Dividend Tax                            59.35         112.91
 Surplus carried to Balance Sheet               4,120.96       2,011.85
 
 DIVIDEND
 
 The Directors of your Company are pleased to recommend a dividend @10 %
 for the year 2007-08 i.e. Rs. 1.00 per equity shares on fully paid up
 equity shares of Rs. 10/- each. The proposed dividend, if approved at
 the ensuing Annual General Meeting, would result in appropriation of
 Rs. 408.55 Lacs (including Corporate Dividend Tax of Rs. 59.35 Lacs)
 out of the profits. The Company has made transfer of Rs. 4000 Lacs to
 the General Reserve.
 
 The Register of members and share transfer books shall remain closed
 from 27th December 2008 to 31st December 2008 (both days inclusive),
 for the purpose of Annual General Meeting and payment of dividend.
 
 FINANCIAL PERFORMANCE
 
 During the year under review, the company has recorded a turnover of
 Rs.66,105.85 lacs as against a total income of Rs. 59,996.50, thus
 recording a growth of more than 10% over the previous year. The profit
 after tax of the Company for the year stands at Rs. 6,517.66 lacs as
 against the corresponding year figure of Rs. 6593.21 lacs. The Company
 has strong reserve position of Rs. 38,231.97 lacs.
 
 EXPANSION OF CAPACITY
 
 During the year under review, the Company has expanded its forging
 capacities from 110000 TPA 165000 TPA by increasing the capacities at
 the existing plants.
 
 SHARE CAPITAL
 
 During the year under review, the Company has allotted 17,00,000 equity
 shares of Rs. 10- per share at a premium of Rs. 230/- per share
 aggregating to Rs. 40.80 Crores to promoters of the Company.
 
 In addition to the above the Company also issued and allotted 38,00,000
 warrants convertible into equivalent number of equity shares of Rs.
 10/- per share at a premium of Rs.230/- per share aggregating to Rs.
 91.20 Crores to the promoter group companies on preferential basis.
 
 MERGER
 
 The Board of Directors of the Company in its meeting held on July 31
 2008 have approved the merger of Ahmednagar Forgings Limited with Amtek
 Auto Limited. The merger is subject to various approvals including
 approval of the shareholders and creditors of the respective companies,
 the Bombay High Court, Stock Exchanges and other concerned authorities.
 The Appointed date of merger is proposed to be 1st July, 2007 or such
 other date as the Board and/or Shareholders of the Company may approve
 or Honble High Court may direct/fix.
 
 As per the scheme of Arrangement, the shareholders of Ahmednagar
 Forgings Limited will get 56 equity shares of Rs. 2/- each (fully paid
 up) of Amtek Auto Limited against 100 shares of Rs. 10/- each (fully
 paid up) of Ahmednagar Forgings Limited held by them.
 
 The amalgamation of the Companies will results in increased business
 synergies with common production facilities, management personnel,
 financial, marketing and other resources. The merger will also enable
 pooling of resources of the aforesaid companies to their common
 advantage, resulting in more productive utilization of the said
 resources, operational efficiencies, greater economies of scale,
 reduction in overhead and other expenses, which would result the
 businesses to be carried on more economically and efficiently and thus
 beneficial for all the stakeholders.
 
 The amalgamation would result into emergence of a strong and focused
 consolidated entity to manage the business more advantageously and
 thereby increase in the profitability and net worth of the
 Stakeholders.
 
 DIRECTORS
 
 Shri Arvind Dham retires at the ensuing Annual General meeting and
 being eligible offers himself for re- appointment. Brief particulars of
 his resume are given in the Notice of Annual General Meeting.
 
 Pursuant to section 260 of the Companies Act 1956 and Article of
 Association of the Company. Mr. Vivek Agarwal was appointed as an
 additional director w.e.f. 25th October 2008. Mr.Vivek Agarwal would
 hold office upto the date of the ensuing Annual general Meeting. The
 Company has received a notice in writing from a member of the Company
 along with deposit as required under the provisions of Section 257 of
 the Companies Act, 1956 expressing his intention to propose the
 appointment of Mr. Vivek Agarwal as Director liable to retire by
 rotation.
 
 Mr. A.K. Syal has been the Managing Director of the Company since
 31.07.06. He tendered his resignation for personal reasons but during
 his tenure, he along with his team put the Company on the global map of
 highly successful and efficient auto companies.
 
 Upon his resignation, Board of Directors has appointed Mr. Sowmya
 Narayanan Rajagopalan as Whole Time Director of the Company w.e. f.
 25th October 2008, for a period of five years. A proposal for the
 appointment of Mr. Sowmya Narayanan Rajagopalan as Whole Time Director
 is being placed before members for approval at the Annual General
 Meeting.
 
 AUDITORS
 
 The Auditors of the Company M/s Manoj Mohan & Associates, Chartered
 Accountants, hold office until the conclusion of the ensuing Annual
 General Meeting and are recommended for reappointment. Certificate from
 Auditors have been received to the effect that their appointment, if
 made, would be within the limit prescribed under Section 224(1 B) of
 the Companies Act, 1956.
 
 Notes forming part of accounts, which are specifically referred to by
 the Auditors in their report, are self explanatory and therefore, do
 not call for any further comments.
 
 FIXED DEPOSITS
 
 During the year under review, the Company did not accept deposits under
 section 58-A of the Companies Act, 1956.
 
 DE-MATERIALISATION OF SHARES
 
 The Companys equity shares are available for de - materialization on
 both the depositories viz., NSDL & CDSL.  Shareholders may be aware
 that SEBI has made trading in your companys shares mandatory, in de -
 materialized form. As on 30th June 2008, 3,22,96,104 Equity Shares
 representing 92.49 % of your Companys Equity shares capital have been
 de-materialised.
 
 LISTING AT STOCK EXCHANGE
 
 The shares of Company are listed at The Bombay Stock Exchange Limited
 and the National Stock Exchange of India Limited.
 
 The Company has paid the annual listing fee to the Stock Exchanges for
 the year 2008 - 2009.
 
 STATUTORY INFORMATION
 
 - Particular of Employees under section 217 (2A) of the Companies Act,
 1956 read with the Companies (Particulars of Employees) Rules, 1975 may
 be taken as Nil.
 
 - Statutory details of Energy Conservation and Technology Absorption,
 R&D activities and Foreign Exchange Earning and Outgo, as required
 under Section 217(1) (e) of the Companies Act, 1956 and rules
 prescribed there under i.e. the Companies (Disclosure of Particulars in
 Report of Board of Directors) Rules, 1988 are given in the Annexure and
 form part of this Report (Please refer Annexure- I)
 
 - Certificate received from the Auditors of the Company regarding
 Compliance of conditions of Corporate Governance, as required under
 clause 49 VII of the Listing Agreement, is Annexed and forms part of
 this report. (Please refer Annexure - II).
 
 - As required under clause 49 IV F of the listing Agreement, Management
 Discussion and Analysis Report is Annexed and forms part of this report
 (Please refer Annexure - III).
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the requirement under Section 217(2AA) of the Companies
 Act, 1956, as amended by the Companies (Amendment) Act, 2000 with
 respect to Directors Responsibility Statement, it is hereby stated and
 confirmed :-
 
 - That in the preparation of the annual accounts, the applicable
 accounting standards had been followed;
 
 - That the Directors had selected such accounting policies and applied
 them consistently and made judgements and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company at the end of the financial year and of the profit or
 loss of the Company for the year under review;
 
 - That the Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities; and
 
 - That the Directors had prepared the annual accounts on a going
 concern basis.
 
 INDUSTRIAL RELATIONS
 
 During the year under review, the relations between the Management and
 the Workmen were highly cordial.
 
 INVESTOR RELATIONS
 
 Your Company always endeavors to keep the time of response to
 shareholders requests/grievances at the minimum. Priority is accorded
 to address all the issues raised by the shareholders and provide them a
 satisfactory reply at the earliest possible time. The shareholders and
 investors grievances committee of the Board meet periodically and
 review the status of the redressal of investors grievances. The shares
 of the Company continue to be traded in Electronic Form and the
 De-materialisation arrangement exists with both the depositories, viz.,
 National Securities Depository Limited and Central Depository Services
 (India) Limited.
 
 EMPLOYEE WELFARE
 
 Your Company demonstrated that it is a caring organization by
 continuing to devise and implement several welfare measures for the
 employees and their families. Employee welfare programmes and schemes
 were implemented with utmost zeal and they were constantly reviewed and
 improvements were made wherever necessary.
 
 ACKNOWLEDGEMENT
 
 Your Directors would like to place on record their appreciation for the
 contribution made by the employees at all levels, who, through their
 competence, hard work, solidarity, co-operation, support and commitment
 have enabled the Company to achieve its strong growth.
 
 Your Directors acknowledge with thanks the continued support and
 valuable co-operation extended by the business constituents, investors,
 vendors, bankers and shareholders of the Company. Your Directors also
 take this opportunity to offer their sincere thanks to the Financial
 Institutions, Banks and other Government Agencies for their continued
 support and assistance.
 
                                                By order of the Board
                                      For AHMEDNAGAR FORGINGS LIMITED
 
                                                                 Sd/-
 Place : New Delhi                                      (Arvind Dham)
 Date  : 1st December 2008                                   Chairman