The Directors are pleased to present the 47th Annual Report and
 Audited Accounts for the year ended June 30, 2012(FY12).
 
 FINANCIAL RESULTS                                   (Rs. In Lakhs)
 
                                                 FY12           FY11
 Particulars                               Year ended     Year ended
                                        June 30, 2012  June 30, 2011
 
 Total Revenue                                57278           51905
 
 Profit Before Tax                             9894           12754
 
 Less: Provision for Tax
 
 Current Tax                                   3145            4019
 
 Tax provision relating to earlier years          -            (115)
 
 Deferred Tax (credit)/charge                   (90)             (5)
 
 Profit After Tax                              6839            8855
 
 Add: Balance brought forward from 
 previous year                                13288           14259
 
 Tota! available for appropriation            20127           23114
 
 Transfer to General Reserve                    684             886
 
 Interim Dividend                              5495            7692
 
 Tax on Interim Dividend                        891            1248 
 
 Balance transferred to Balance Sheet         13057           13288
 
 DIVIDEND
 
 An interim dividend of Rs.25 per equity share of Rs.10/- each (250% on the
 paid-up capital of the Company) was declared by the Board for the
 financial year ended June 30, 2012. May 25, 2012 was fixed as ''Record
 Date'' for the said purpose. The said interim dividend was paid from
 June 4, 2012. The Board of Directors has decided to treat the same as
 final dividend and therefore no additional dividend is recommended for
 the year ended June 30,2012.
 
 OPERATING RESULTS
 
 During FY12, Total revenue was Rs. 57278 Lakhs as compared to Rs. 51905
 Lakhs during the previous year {10.35% higher). Profit after tax
 declined to Rs. 6839 Lakhs from Rs.8855 Lakhs recorded for the previous
 year. The decline in profit is mainly due to increase in the cost of
 input raw materials.
 
 Your Company does not have any subsidiaries.
 
 MATERIAL CHANGES AND COMMITMENTS
 
 There were no material changes and commitments that occurred affecting
 the financial position of your Company between June 30, 2012 and the
 date of approval ofthis report.
 
 MANAGEMENT DISCUSSION AND ANALYSIS
 
 A Management Discussion and Analysis (MD&A) report is annexed to this
 report as Annexure I as required under Clause 49 of the Listing
 Agreement with BSE Limited.
 
 DIRECTORS
 
 In accordance with the provisions of the Companies Act, 1956 and the
 Articles of Association of the Company, Mr.Bidadi Anjani Kumar and
 Mr.Bernard North retire by rotation, and being eligible, offers
 themself for re-appointment. Your Directors commend the re-appointment
 of Mr. Bidadi Anjani Kumarand Mr. Bernard North for youracceptance.
 
 Mr. Santanoo Medhi, resigned as Managing Director and Director of the
 Company and the Board of Directors have relieved him from the position
 of the Managing Director with effect from September 17, 2012. The
 Directors place on record their appreciation for the valuable
 contributions made by Mr. Medhi during his tenure as Managing Director
 of the Company.  .
 
 Mr. Bhagya Chandra Rao was appointed as Additional Director on the
 Board and subsequently as Managing Director of the Company with effect
 from September 17,2012, subject to the approval of the members.
 
 Appropriate resolutions are being proposed seeking consent of the
 members for the aforesaid reappointments/appointment and your Directors
 recommend your approval. Profiles of respective Directors being
 appointed/reappointed as required under Clause 49 of the Listing
 Agreement are given along with the Notice convening 47 Annual
 General Meeting.
 
 DIRECTORS''RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217{2AA) of the Companies Act, 1956, the Board of
 Directors report that:
 
 - that in the preparation of the Annual Accounts for the financial
 year ended June 30, 2012, the applicable accounting standards have been
 followed along with proper explanation relating to material departures
 
 - Accounting policies have been selected and applied consistently and
 that the judgments and estimates made are reasonable and, prudent so as
 to give a true and fair view of the state of affairs of the Company as
 on June 30, 2012 and of the profit for the period of July 1,2011 toJune
 30,2012;
 
 - Proper and sufficient care has 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:
 
 - The Annual Accounts have been prepared for the year ended June 30,
 2012 on a going concern basis.
 
 FIXED DEPOSITS
 
 During the year, your Company has not invited/accepted any Fixed
 Deposits under Section 58Aand 58AAofthe Companies Act, 1956 read with
 the Companies {Acceptance of Deposits) Rules, 1975.
 
 AUDITORS
 
 M/s.Price Waterhouse & Co., Chartered Accountants (Firm registration
 No. FRN 007567S), will retire at the conclusion of the forthcoming 47th
 Annual General Meeting and being eligible, offer themselves for
 re-appointment. They have furnished a written certificate to the
 Company certifying that, if they are re-appointed as auditors of your
 Company, such appointment would be within the limits specified in
 Section 224(1)(B) of the Companies Act, 1956.
 
 The Notes to the Accounts referred to by the auditors in their report
 are self-explanatory and may be treated as information/explanation
 submitted by the Board as contemplated under Section 217 (3) of the
 Companies Act, 1956.
 
 CORPORATE GOVERNANCE
 
 A detailed report on Corporate Governance and the certificate from Mr.
 Vijay Krishna VT, a Practicing Company Secretary confirming compliance
 of Corporate Governance norms as stipulated in Clause 49 of the Listing
 Agreement with BS E Li mited is set out in Annexure II to this report.
 
 CODE OF CONDUCT COMPLIANCE
 
 A declaration signed by the Managing Director affirming compliance with
 the Company''s Code of Conduct by your Directors and Senior Management
 of your Company, for the year under review, as required under Clause 49
 of the Listing Agreement with BSE Limited is annexed and forms part of
 this report.
 
 Kennametal Code of Business Ethics & Conduct is a major component of
 the Kennametal Value Business System (KVBS). The Code addresses the
 importance of fair dealing and compliance in ail aspects of your
 Company''s business and focuses on the concept of doing the right thing
 everyday.
 
 Your Company encourages its employees to embrace the Code of Business
 Ethics & Conduct to ensure maintenance of strong ethical culture.
 
 PARTICULARS OF EMPLOYEES
 
 In terms of the provisions of Section 217(2A) of the Companies Act,
 1956, read with the Companies (Particulars of Employees) Rules, 1975,
 the names and other particulars of employees forms part of this report.
 However, as per the provisions of Section 219(1) (b)(iv) of the
 Companies Act, 1956, the Annual Report excluding the aforesaid
 information is being sent to all the members of your Company and others
 entitled thereto. Any member interested in obtaining a copy of the
 statement containing the aforesaid information may write to the Company
 Secretary at the Registered Office of the Company and the same shall be
 provided by the Company.
 
 RESEARCH & DEVELOPMENT (R&D)
 
 The Research, Development and Engineering (RD&E) works on development
 of new Products and Process Developments with specific focus on
 materials, coatings and design.
 
 RD&E function of your Company in collaboration with the parent
 Company-Kennametal Inc.  continues its endeavor for new products
 development, enhancement of product efficiency, reduction in cost,
 enhancement of durability etc. and has a globally aligned matrix
 set-up. RD&E works as per the global requirements of Kennametal Inc.
 with a continued specific focus on up-gradation of products, processes
 and technology in line with local market requirements.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE, ETC.
 
 A report in respect of conservation of energy, technology absorption,
 foreign exchange earnings and outgo, as required under Section
 217{1){e) read with the Company''s (Disclosure of Particulars in the
 Report of Board of Directors) Rules, 1988, is set out in Annexure III
 to this report.
 
 ENVIRONMENT, HEALTH AND SAFETY (EHS)
 
 Safety, Health and Environment protection have continued to be an
 important focus area in your Company. Your Company has adopted an
 integrated approach towards EHS and has incorporated these in business
 practices. Your Company is committed to maintain highest standard of
 Health, Safety and Environment Protection and also complying with all
 applicable EHS laws and regulations and align EHS strategies with
 business goals and objectives.
 
 On Safety front, you r Company strives to work safely in a manner that
 protects and promotes the health and well-being of employees,
 contractors, and the communities in which it operates because it is
 fundamentally the right thing to do. Your Company believes that safety
 is largely about cultural change, with the ultimate goal of
 institutionalizing a safety system that first and foremost protects its
 employees, contractors, and the communities in which it operates.
 Management Based Safety (MBS) process is implemented in your Company
 which involves Leaders , Supervisors and Employees to practice MBS
 Tools which will help to build safety culture.
 
 EHSTraining
 
 Your Com pany du ring the year under review -
 
 - Focused-Hand Safety awareness, Chemical Safety, Office ergonomics,
 MBS office, MBS Refreshing , Health Awareness and Industrial Safety.
 Achieved 5.73 hrs peremployee EHStraining.
 
 - EHS e-learning tool has been designed and developed to give its
 employees the knowledge needed to develop skill, and competency to
 create 100% compliance and safe working environment.
 
 - Developed on line reporting system to inculcate a habit to follow
 MBS Tools practice with meaning by all the levels.
 
 Environment:
 
 Your Company during the year under review-
 
 * continued its green initiatives and conserved Energy of 5.7 Lakh
 units, reduced its water consumption by 20 % and continued the rain
 water harvesting. The factory premises'' greenery was increased by
 25,000 Sq.ft and trees which were up- rooted due to land acquisition by
 Karnataka Industrial Areas Development Board (KIADB) for the Bangalore
 Metro Rail Project were successfully transplanted. In addition about
 100 saplings were planted to facilitate green coverage of the facility.
 Your Company continued to recycle sewage water by treating it in the
 Sewage Treatment Plant and using the treated water for gardening.
 
 * conducted Carbide Recycling process- 8.5 Tons of used Carbide was
 purchased from various customers and recycled the same, so as to reduce
 energy usage, and add sustainable raw material usage.
 
 Awards and Recognitions for EHS activities:
 
 Awards received from Kennametal Inc.  USA, the Parent company viz.
 (1)100% Safe - Health and Safety Awards- Excellence Award No.1, and (2)
 ''Protecting Our Plant''-Environmental Awards - Presidential Award.
 
 Your Company was conferred with the following awards (1) Certificate
 of Commendation for Strong Commitment - 2011 by Confederation of
 Indian Industries (Cll)— Indian Tobacco Company (ITC) Sustainability
 Center (2) State Energy Conservation Award- 2011 by Government of
 Karnataka and Karnataka Renewable Energy Development Ltd. (KREDL) (3)
 State Best Maintained Industrial Garden by - Department of
 Horticulture & Mysore Horticultural Society and Gold Award in
 Engineering Sector at National Level Competition for outstanding
 achievement in Safety Management, during the year under review.
 
 CORPORATE SOCIAL RESPONSIBILITY {CSR)
 
 Corporate Social Responsibility continues to be an important part in
 the activities of your Company, The employees of your Company continued
 their commitment to Protect Our Planet. Your Company undertaken
 following initiatives/activities relating to CSR.
 
 - Active participation in the ''LaSbagh Republic Day Flower Show''
 organized by Mysore Horticultural Society, as a part of ''Protect Our
 Planet'' initiative.
 
 - In order to create Environmental Awareness among school children the
 employees of your Company conducted workshop on Rain Water Harvesting
 in schools located adjacenttothe premises of your Company, .
 
 - Continued to participate in the Akshaya Patra Programme under which
 Mid-Day meals were provided to the students of government schools
 located adjacent to the premises of your Company.
 
 FACTORY LAND ATTUMKUR ROAD
 
 KIADB had acquired and taken possession of your Company''s land to the
 extent of 3,435.26 sq. mts located at Sy. No. 11 Nagasandra,
 Yeshwanthpur Hobli, Bangalore for the use of Bangalore Metro Rail
 Project. The Company had sought release of compensation amount by
 producing all the relevant records establishing the title of the
 Company over the acquired land, without prejudice to its right to claim
 higher compensation in future. Meanwhile, Sri Ramlingeshwar Mutt,
 Harnahalli, Shimoga, Karnataka, a religious organisation filed an
 objection against payment of the compensation amount to your Company
 contending that several lands including that acquired by KIADB belongs
 to them. The Office of the Special Land Acquisition Officer-2 vide its
 Order dated March 05, 2012 has decided to refer the matter to the City
 Civil Court under Section 30, 31 of the Land Acquisition Act, 1894
 stating that there is an objection with regard to the right of
 ownership of land existed and that civil court was the appropriate
 authority to decide the same. Upon challenging the order by your
 Company by way of a Writ application, the Hon''ble High Court of
 Karnataka, Bangalore has, vide its Order dated July 11, 2012 granted an
 interim stay of the Order passed by the Special Land Acquisition
 Officer. The matter is pending before the High Court of Karnataka,
 Bangalore.
 
 PERSONNEL / INDUSTRIAL RELATIONS
 
 During the period under review, your Company maintained healthy,
 cordial and good industrial relations at all levels. Kennametal India
 Employees Association (KlEA) had served a notice of indefinite strike
 due to delay in wage settlement. The 4 Year Wage Settlement was signed
 between KIEAand the Company on June 29, 2012. The enthusiasm and
 unstinting efforts of the employees have enabled your Company to remain
 at the forefront of the industry. Your Directors record their
 appreciation for this hard workand efficiency.
 
 ACKNOWLEDGEMENTS
 
 Your Directors place on record their appreciation for the support and
 assistance received from customers, investors, business associates,
 bankers, vendors, regulatory and governmental authorities.  Your
 Directors place on record their gratitude to the Members for their
 continued trust, confidence and expresses its sincere appreciation to
 all the employees for their teamwork and contributions during the year.
 
                          For and on behalf of the Board of Directors 
 
                                          of Kennametal India Limited
 
                                                        M. N. Bhagwat
 
 September 17,2012                                           Chairman