The Directors have pleasure in presenting the Fiftieth Annual Report
 on the business and operations of the Company and the accounts for the
 Financial Year ended March 31, 2011.
 
 1.  PERFORMANCE OF THE COMPANY:
 
 a) Total Income (on stand-alone basis):
 
 2010-11              2009-10                       % Increase
 
 Rs 29,935 million      Rs 18,887 million                58.49
 
 During the year under review, the total income of the Company was Rs
 29,935 million (Rs 18,887 million) representing increase of 58.49%.
 
 The Company saw strong revival of demand both in domestic and export
 markets and was able to respond promptly by ramping up supplies. New
 capacities created at Baramati with 80 M-T Hammer and heavy duty
 machining line for crankshafts became fully operational and contributed
 significantly to Company’s growth.
 
 b) Exports Revenue (on stand-alone basis):
 
 2010-11               2009-10           2008-09            2007-08
 
 Rs 12,195              Rs 7,066            Rs 10,024           Rs 9,610
 
  million               million             million           million
 
 During the year under review, Exports turnover of the Company was Rs
 12,195 million, (Rs 7,109 million) represents increase of 71.54%.
 
 On the global front, there was consistent and progressive QoQ recovery
 over FY 2009 levels in Europe and North America. This applied to the
 Automotive Sector, though, lower than previous peaks scaled earlier in
 FY 2006-07. These sectors are of vital importance for the Company as
 such, the revival augured well. The Company was also able to enhance
 its market share in the period through a stable and reliable
 performance for its customers. Additionally, the Company’s strong focus
 for foray in Non-Automotive segments helped to augment growth
 opportunities.  Overall, Company has been able to post strong results
 as a result of above factors. Performance of overseas operations has
 also improved in the review period due to the strong sustainability
 measures initiated in FY 2009.
 
 The Company continues to successfully secure new business and growth
 opportunities in varied industrial sectors – automotive as well as
 non-automotive.
 
 c) Financials: (On stand-alone basis):
 
                                                      (Rs in million)
 
                                            Current         Previous 
 
                                              Year            Year
 
 Profit for the year before Taxation        4,476.08         1,807.17
 
 Provision for Taxation
 
 Current including Wealth Tax & FBT           879.21           603.30
 
 - Deferred                                   491.20          (66.59)
 
 Net Profit                                 3,105.67         1,270.46
 
 Balance of Profit from Previous Year       6,833.23         6,167.51
 
                                            9,938.90         7,437.97
 
 Add/(Less): Tax Refunds and Excess
 
 Provisions net of prior year items             2.58             0.43
 
 Profit available for appropriation         9,941.48         7,438.40
 
 APPROPRIATIONS:
 
 Proposed dividend on Equity Shares           814.78           232.79
 
 Tax on above dividend                        132.18            38.66
 
 Debenture Redemption Reserve                 399.42           206.22
 
 Transfer to General Reserve                  311.00           127.50
 
 Surplus retained in Profit &
 
 Loss Account                               8,284.10         6,833.23
 
 2.  DIVIDEND:
 
 Your Directors recommend a Dividend of Rs 3.50 per equity share of Rs 2/-
 each (175%) for the year ended March 31, 2011.
 
 3.  CONSOLIDATED FINANCIAL STATEMENTS:
 
 Consolidated Financial Statements in accordance with Accounting
 Standard-21 issued by The Institute of Chartered Accountants of India
 have been provided in the Annual Report. These Consolidated Financial
 Reports provide financial information about your Company and its
 subsidiaries as a single economic entity.  The Consolidated Financial
 Statements form part of this Annual Report.
 
 4.  MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT:
 
 Management’s Discussion and Analysis Report (MD&A) for the year under
 review, as stipulated under clause 49 of the listing agreement with
 stock exchanges in India, is presented in a separate section forming
 part of the Annual Report.
 
 In line with its aspiration of ongoing growth, the Company has entered
 into various Joint Ventures / Alliances as elaborately dealt with in
 MD&A.
 
 5.  SUBSIDIARIES:
 
 The Company has 18 subsidiaries of which 13 are overseas and 5 are in
 India. A summary of their performance is given elsewhere in the Annual
 Report.
 
 In view of the unprecedented downturn in the automotive sectors across
 the globe, during year 2010-11, the Company had carried the process of
 restructuring and rightsizing the operations of its wholly owned
 subsidiaries to adopt for lower market volumes. This along with
 improvement in market conditions has resulted in turnaround of
 operations of overseas subsidiaries and they have achieved overall
 breakeven performance for the calendar year 2010.  Company’s
 initiatives in capital goods sector and EPC activities are in start up
 phase and will be fully operational by 2013.
 
 As a part of such restructuring program, operations and assets of
 Bharat Forge Scottish Stampings Ltd. (BFSSL), subsidiary of the Company
 active in the European markets, were transferred to other group
 companies in Bharat Forge Group. Hence, the accounts of BFSSL have not
 been prepared under ‘going concern’ basis.
 
 The Auditors of Bharat Forge America Inc. (BFA), subsidiary of the
 Company, active in the North American markets, have, without qualifying
 their reports, expressed a possibility about BFA’s inability to
 continue as going concern due to market conditions in North America.
 BFA has implemented various measures to improve the performance, which
 include achievement of considerable saving in wage cost following
 negotiations with Union, new business initiatives with widening
 customer base and product portfolio, a very tight control on costs etc.
 It is expected that these steps, along with the support provided by the
 Company would enable BFA to revive the operations. Hence, the accounts
 of BFA have been prepared on the ‘going concern’ basis.
 
 A significant portion of the consolidated revenues is generated by the
 subsidiary companies. Detailed analysis of the working of the
 subsidiary companies appears in the Management Discussion and Analysis.
 
 6.  SUBSIDIARY COMPANIES ACCOUNTS:
 
 In accordance with the general circular issued by the Ministry of
 Corporate Affairs, Government of India, the Balance Sheet, Profit and
 Loss Account and other documents of the subsidiary companies are not
 being attached with the Balance Sheet of the Company. The Company will
 make available the Annual Accounts of the subsidiary companies and the
 related detailed information to any member of the Company who may be
 interested in obtaining the same. The annual accounts of the subsidiary
 companies will also be kept open for inspection at the Registered
 Office of the Company and that of the respective subsidiary companies.
 The Consolidated Financial Statements presented by the Company include
 the financial results of its subsidiary companies.
 
 Accordingly, Company has not attached to the Balance Sheet, the copies
 of the Balance Sheets, Profit and Loss Accounts, Directors’ Reports and
 Auditors’ Reports and other documents required to be attached under
 Section 212(1) of the Act of its subsidiary companies, namely:
 
 Foreign Subsidiaries:
 
 i) CDP Bharat Forge GmbH, Germany,
 
 ii) Bharat Forge Holding GmbH, Germany
 
 iii) Bharat Forge Aluminiumtechnik GmbH & Co. KG, Germany
 
 iv) Bharat Forge Aluminiumtechnik Verwaltungs GmbH & Co. KG, Germany
 
 v) Bharat Forge Daun GmbH, Germany
 
 vi) Bharat Forge America Inc., U.S.A.
 
 vii) Bharat Forge Beteiligungs, GmbH, Germany
 
 viii) Bharat Forge Kilsta AB, Sweden
 
 ix) Bharat Forge Scottish Stampings Ltd., Scotland
 
 x) Bharat Forge Hong Kong Ltd. (Formerly, Lucrest Limited), Hong Kong
 
 xi) FAW Bharat Forge (Changchun) Company Ltd., China
 
 xii) BF New Technologies GmbH, Germany and
 
 xiii) Bharat Forge International Ltd., UK
 
 Indian Subsidiaries:
 
 xiv) BF-NTPC Energy Systems Ltd.
 
 xv) Kalyani ALSTOM Power Ltd.
 
 xvi) BF Infrastructure Ltd.
 
 xvii) BF Infrastructure Ventures Ltd. and
 
 xviii)BF Power Equipment Ltd.
 
 A gist of the financial performance of the subsidiaries is given in
 this Annual Report.
 
 7.  CAPACITY EXPANSION AND NON-AUTO BUSINESS:
 
 Members are aware of the expansion plans undertaken at Company’s
 factories at Mundhwa, Baramati and Satara.  Current status of
 implementation is as under:
 
 A.  BARAMATI:
 
 80 M-T counterblow hammer for production is fully established. Order
 inflow is satisfactory.
 
 Machining line for upto 3 meter long crankshaft is also fully
 operational. Capacity is now being expanded to take care of growing
 market requirements.
 
 First line of medium duty crankshaft machining in Baramati is now fully
 productionized. Additional investment of Rs 150 crore is being made in
 expanding machining line further for crankshaft machining.
 
 Ring Rolling Mill is also now fully operational and has become a
 supplier of critical rings for different customers specially for Gear
 Box manufacturers.
 
 B.  MUNDHWA / SATARA:
 
 New vertical heat treatment facility for manufacture of Turbine and
 Generator Rotors alongwith thermo stability test facility was
 commissioned. With the help of machining facilities installed at
 Satara, the Company is now supplying Turbine and Generator Rotors in
 fully machined condition.
 
 8.  FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs):
 
 A.  CONVERSION OF FCCBs:
 
 On April 9, 2010, holders of 1,250 FCCBs (Tranche 2) of US $ 1,000 each
 have exercised to convert the same into equity shares. In consequence
 of the above, 142,045 equity shares of Rs 2/- each were issued and
 allotted by the Company and the same have been listed on the Bombay
 Stock Exchange Limited and National Stock Exchange of India Limited and
 Pune Stock Exchange Limited effective from May 10, 2010, May 3, 2010
 and May 4, 2010 respectively.
 
 B.  REDEMPTION:
 
 FCCBs (Tranche 1 & Tranche 2) aggregating US $ 131,487,592.50 (includes
 principal of US $ 102,250.00 and redemption premium of US $
 29,237,592.50) were redeemed on April 20, 2010, in terms of Offering
 Circular dated April 15, 2005.
 
 In 2005, the Company had issued the said FCCBs, optionally convertible
 into GDRs / Equity Shares, in 2 tranches aggregating US $ 120 million
 mainly to finance capital expenditure and global acquisitions. Out of
 FCCBs of US $ 120 million, US $ 17.750 million were converted into GDRs
 / Equity Shares during the tenure of FCCBs.
 
 9.  QIP ISSUE:
 
 Pursuant to authorization given by the members by postal ballot on
 February 27, 2010, the QIP Committee of Directors, issued and allotted
 the following securities on April 28, 2010:
 
 - 10,000,000 equity shares of Rs 2/- each, at a price of Rs 272/- per
 equity share for an aggregate amount of Rs 2,720,000,000 (inclusive of
 premium).
 
 - 6,500,000 warrants at a price of Rs 2/- per warrant for an aggregate
 amount of Rs 13,000,000. Every warrant is exchangeable for 1 equity
 share of Rs 2/- each of the Company, at any time within a period of 3
 years from the date of its allotment i.e. on or before April 28, 2013,
 at a warrant exercise price of Rs 272/- per equity share.
 
 - 1,760 Non-Convertible Debentures of face value of Rs 1,000,000/- each
 at a coupon rate of 10.75% per annum for an aggregate amount of Rs
 1,760,000,000.
 
 Above equity shares and warrants are listed on Bombay Stock Exchange
 Ltd., National Stock Exchange of India Ltd. and Pune Stock Exchange
 Ltd.
 
 As a result of the above, the paid up capital of the Company has
 increased by 10,000,000 equity shares and now stands at 232,794,316
 equity shares of Rs 2/- each.
 
 Non-convertible Debentures are listed on Bombay Stock Exchange Ltd. and
 National Stock Exchange of India Ltd.
 
 The proceeds of the QIP issue will be utilized for long term funding
 requirements and any other uses as may be permissible under applicable
 law.
 
 10.  TERM DEPOSITS:
 
 As on March 31, 2011, 26 Depositors having deposits aggregating to Rs
 350,000 did not collect the amounts due.  However, as of May 24, 2011,
 2 deposits aggregating to Rs 30,000 were transferred to Investor
 Education and Protection Fund (IEPF) as per requirements of law.
 Presently, the Company does not accept/renew deposits.
 
 11.  PARTICULARS OF EMPLOYEES:
 
 In terms of the provisions of Section 217(2A) of the Companies Act,
 1956, read with Companies (Particulars of Employees) Rules, 1975, the
 names and other particulars of employees are set out in the Annexure to
 the Directors’ Report. However, having regard to the provisions of
 Section 219(1)(b)(iv) of the Companies Act, 1956 the Directors’ Report
 and Accounts are being sent to the shareholders and others entitled
 thereto excluding the statement giving particulars of employees under
 Section 217(2A) of the Act.
 
 Any shareholder interested in obtaining such particulars, may write to
 the Company Secretary at the Registered Office of the Company.
 
 12.  CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO:
 
 The particulars as required to be disclosed pursuant to the provisions
 of Section 217(1)(e) of the Companies Act, 1956 read with Companies
 (Disclosure of Particulars in the Report of Board of Directors) Rules,
 1988, forming part of the Report is also annexed hereto.
 
 13.  DIRECTORS:
 
 In terms of provisions of the Companies Act, 1956 and the Articles of
 Association of the Company, Dr. Uwe Loos, Mrs. Lalita D. Gupte, Mr.
 Alan Spencer, Mr. Sunil Kumar Chaturvedi and Mr. B.P. Kalyani,
 Directors of the Company, retire by rotation and, being eligible, offer
 themselves for re-appointment at the ensuing Annual General Meeting.
 
 14.  DIRECTORS’ RESPONSIBILITY STATEMENT:
 
 Pursuant to the requirements under Section 217(2AA) of the Companies
 Act, 1956, with respect to Directors’ Responsibility Statement, it is
 hereby confirmed that:
 
 (i) in the preparation of the accounts for the financial year ended
 March 31, 2011, the applicable Accounting Standards have been followed
 along with proper explanation relating to material departures;
 
 (ii) the Directors had selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company as at March 31, 2011 and of the profit of the Company
 for the year under review;
 
 (iii) the Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities; and
 
 (iv) the Directors had prepared the annual accounts for financial year
 ended March 31, 2011 on a ‘going concern’ basis.
 
 15.  AUDITORS AND AUDITORS’ REPORT:
 
 M/s. Dalal & Shah, Chartered Accountants, Auditors of the Company, hold
 office until the conclusion of the ensuing Annual General Meeting and
 are eligible for re-appointment.
 
 The Company has received letter from M/s. Dalal & Shah, Chartered
 Accountants, to the effect that their appointment, if made, would be
 within the prescribed limits under Section 224(1B) of the Companies
 Act, 1956, and that they are not disqualified for such appointment
 within the meaning of Section 226 of the Companies Act, 1956.
 
 The observations and comments given by Auditors in this Report read
 together with notes to Accounts are self explanatory and hence do not
 call for any further comments under Section 217 of the Companies Act,
 1956.
 
 16.  CORPORATE GOVERNANCE:
 
 The Company has adopted the Corporate Governance Policies and Code of
 Conduct which has set out the systems, processes and policy conforming
 to international standards. The report of Corporate Governance as
 stipulated under Clause 49 of the Listing Agreement with the Stock
 Exchanges, forms part of the Annual Report.
 
 A Certificate from the Auditors of the Company M/s. Dalal & Shah,
 Chartered Accountants, confirming compliance with conditions of
 Corporate Governance as stipulated under the aforesaid Clause 49, is
 attached to this Report.
 
 17.  ACKNOWLEDGEMENT:
 
 Your Directors would like to express their sincere appreciation of the
 positive co-operation received from the Central Government and the
 Government of Maharashtra, Financial Institutions and the Bankers. The
 Directors also wish to place on record their deep sense of appreciation
 for the commitment displayed by all executive, officers, workers and
 staff of the Company resulting in the successful performance of the
 Copmpany during the year.
 
 The Directors express their special thanks to MR. B.N.  KALYANI,
 Chairman & Managing Director, for his untiring efforts for the progress
 of the Company.
 
                                             For and on behalf of the 
 
                                                   Board of Directors
 
                                                         B.N. KALYANI 
 
 Mumbai: May 24, 2011                    Chairman & Managing Director