Private & Confidential – For Private Circulation Only & Confidential Registered Office Mundhwa,...

Registered Office: Mundhwa, Pune Cantonment, Pune 411036 Tel: +91 20 2670 2777 Fax: +91 20 2682 2163, Website: www.bharatforge.com Contact Person: Mr. Beejal Desai, Company Secretary Email: [email protected] SCHEDULE – I DISCLOSURE AS PER SEBI GUIDELINES FOR THE ISSUE OF DEBENTURES

ON A PRIVATE PLACEMENT BASIS

PRIVATE PLACEMENT OF SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURES (NCD’S) OF RS.10,00,000/- EACH FOR CASH AT PAR AGGREGATING TO RS.350 CRORES

GENERAL RISKS

For taking an investment decision, investors must rely on their own examination of the Issue and the Information Memorandum including the risks involved. The Issue has not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this Information Memorandum.

CREDIT RATING “LA+” (pronounced L A Plus) by ICRA Limited for Rs.350 Crores long term NCDs indicating “adequate-credit-quality. The rated instrument carries average credit risk”.

The rating is not recommended to buy, sell or hold Securities and investors should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating should be evaluated independently of any other rating. The rating obtained is subject to revision at any point of time in the future. The rating agencies have a right to suspend, withdraw the rating at any time on the basis of new information etc.

LISTING The Debentures are proposed to be listed on the National Stock Exchange of India Limited (“NSE” or the “Stock Exchange”).

SOLE ARRANGER AXIS BANK LIMITED 111, Maker Tower – F, Cuffe Parade, Colaba, Mumbai – 400005

DEBENTURE TRUSTEES

Bank of Maharashtra Recovery & Legal Services Department Central office, Lokmangal, 1501, Shivaji Nagar, Pune - 411005

REGISTRAR TO THE ISSUE In House Registrar & Transfer Agent Bharat Forge Limited Beejal Desai – Sr. Vice President (Legal) & Company Secretary Tel: +91 20 2670 2777 [email protected] www.bharatforge.com

Issue Opens on September 10, 2009

Earliest Issue Closure Date September 18, 2009

Allotment/Deemed Date of Allotment Within 4 days from the issue closure date The company reserves the right to change the issue closing date and in such an event, the Date of Allotment for the Debentures may also be revised by the company at its sole and absolute discretion. In the event of any change in the above issue programme, the company will intimate the investors about the revised issue programme.

Private & Confidential – For Private Circulation Only(This Disclosure Document is neither a Prospectus nor a Statementin Lieu of Prospectus). This Disclosure Document prepared inconformity with Securities and Exchange Board of India (Issue andListing of Debt Securities) Regulations, 2008 issued vide circularNo. LAD-NRO/GN/2008/13/127878 dated June 06, 2008)

Private & Confidential Not for circulation

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TABLE OF CONTENTS

I. NAME, ADDRESS & REGISTERED OFFICE OF THE COMPANY ............................................... 6 II. BOARD OF DIRECTORS ............................................................................................................................ 6 III. SUMMARY OF BUSINESS/ ACTIVITIES ....................................................................................... 12

BUSINESS DESCRIPTION ............................................................................................................................................. 12 CORPORATE STRUCTURE ............................................................................................................................................. 12 COMPETITIVE STRENGTHS ........................................................................................................................................... 13 LOOKING FORWARD ..................................................................................................................................................... 13 OUR PRODUCTS ............................................................................................................................................................ 14 FACILITIES..................................................................................................................................................................... 16 CAPACITY ....................................................................................................................................................................... 16 FINANCIAL ANALYSIS ................................................................................................................................................... 17

IV. BRIEF HISTORY OF OUR COMPANY SINCE INCORPORATION AND CHANGES IN CAPITAL STRUCTURE ............................................................................................................................................ 17

HISTORY ........................................................................................................................................................................ 17 MILESTONES AND ACHIEVEMENTS OF OUR COMPANY: ............................................................................................ 17 CAPITAL STRUCTURE OF THE COMPANY..................................................................................................................... 19 SHAREHOLDING PATTERN............................................................................................................................................ 19 CHANGES IN CAPITAL STRUCTURE ............................................................................................................................. 19

V. INDUSTRY........................................................................................................................................................... 23 INDIAN AUTOMOTIVE COMPONENTS INDUSTRY OVERVIEW .................................................................................... 23 KEY MARKETS FOR INDIAN AUTO COMPONENTS INDUSTRY .................................................................................... 24 INDIAN AUTOMOTIVE INDUSTRY................................................................................................................................. 24 OUTLOOK FOR THE INDIAN AUTO COMPONENTS INDUSTRY.................................................................................... 25 GLOBAL NON-AUTOMOTIVE INDUSTRY OVERVIEW ................................................................................................... 26

VI. SECURITIES TO BE ISSUED AND LISTED UNDER CURRENT DOCUMENT ............... 26 CREDIT RATING ............................................................................................................................................................ 27

VII. DETAILS OF THE ISSUE SIZE............................................................................................................. 28 VIII. DETAIL OF UTILISATION OF PROCEEDS OBJECTS OF THE ISSUE ........................ 28 IX. MATERIAL CONTRACTS INVOLVING FINANCIAL OBLIGATION................................... 28

MATERIAL CONTRACTS ................................................................................................................................................ 28 MATERIAL DOCUMENTS ............................................................................................................................................... 29

X. DETAILS OF PAST BORROWINGS ........................................................................................................ 29 DETAILS OF SECURITY FOR SECURED INDEBTNESS- NCD/TERM LOAN (RUPEE/FCL) ..................................... 31

XI. MATERIAL DEVELOPMENT ................................................................................................................... 31 XII. DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER THAN CASH, AT PREMIUM OR AT DISCOUNT, IN PURSUANCE OF AN OPTION.................................................... 31 XIII. DETAILS OF HIGHEST TEN HOLDERS OF EACH KIND OF SECURITIES............... 32 XIV. UNDERTAKING TO USE A COMMON FORM OF TRANSFER................................................ 33 XV. REDEMPTION AMOUNT, PERIOD OF MATURITY, YIELD ON REDEMPTION .......... 33 XVI. INFORMATION RELATING TO THE TERMS OF OFFER OR PURCHASE....................... 34

MARKET LOT ................................................................................................................................................................. 34 LETTER(S) OF ALLOTMENT/ DEBENTURE CERTIFICATE(S)/ REFUND ORDER(S) ................................................ 34 ISSUE OF LETTER(S) OF ALLOTMENT......................................................................................................................... 34


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ISSUE OF DEBENTURE CERTIFICATE(S) .................................................................................................................... 34 DISPATCH OF REFUND ORDERS.................................................................................................................................. 34 TERMS OF PAYMENT ..................................................................................................................................................... 34 PAYMENT OF INTEREST ................................................................................................................................................ 35 TAX DEDUCTION AT SOURCE (TDS)......................................................................................................................... 35 TAX BENEFITS............................................................................................................................................................... 35 REDEMPTION ................................................................................................................................................................. 36 PAYMENT ON REDEMPTION .......................................................................................................................................... 36 EFFECT OF HOLIDAYS................................................................................................................................................... 36 LIST OF BENEFICIAL OWNERS .................................................................................................................................... 36 DEBENTURE REDEMPTION RESERVE (DRR) ............................................................................................................. 36 NOTICES ........................................................................................................................................................................ 36 JOINT-HOLDERS ........................................................................................................................................................... 36 SHARING OF INFORMATION......................................................................................................................................... 37 UNDERTAKING BY THE ISSUER.................................................................................................................................... 37 DEPOSITORY ARRANGEMENTS .................................................................................................................................... 37 PROCEDURE FOR APPLYING FOR DEMAT FACILITY .................................................................................................... 37 TRUSTEES FOR THE DEBENTURE HOLDERS................................................................................................................ 38 RIGHT TO ACCEPT OR REJECT APPLICATIONS .......................................................................................................... 38 HOW TO APPLY ............................................................................................................................................................. 38 WHO CAN APPLY .......................................................................................................................................................... 39 APPLICATIONS UNDER POWER OF ATTORNEY ........................................................................................................... 40 APPLICATION BY MUTUAL FUNDS ............................................................................................................................... 40 FUTURE BORROWINGS ................................................................................................................................................. 40 PURCHASE/ SALE OF DEBENTURES............................................................................................................................ 40 RIGHT TO RE-ISSUE .................................................................................................................................................... 40 DEBENTURE HOLDER NOT A SHAREHOLDER .............................................................................................................. 40 RIGHTS OF DEBENTURE HOLDERS .............................................................................................................................. 40 STATUTORY AUDITORS ................................................................................................................................................ 41 REGISTRAR TO THE ISSUE ........................................................................................................................................... 41 TRUSTEE FOR THE ISSUE ............................................................................................................................................. 41

XVII. THE DISCOUNT AT WHICH SUCH OFFER IS MADE AND THE EFFECTIVE PRICE FOR THE INVESTOR AS A RESULT OF SUCH DISCOUNT. ................................................................ 41 XVIII. THE DEBT EQUITY RATIO PRIOR TO AND AFTER ISSUE OF THE DEBT SECURITY ..................................................................................................................................................................... 41 XIX. SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES, PAYMENT OF DUE INTEREST ON DUE DATES ON TERM LOANS AND DEBT SECURITIES. ................................... 42 XX. THE PERMISSION / CONSENT FROM THE PRIOR CREDITORS FOR A SECOND OR PARI PASSU CHARGE.................................................................................................................................... 42 XXI. NAME OF DEBENTURE TRUSTEE ...................................................................................................... 42 XXII. RATING RATIONALE ADOPTED BY RATING AGENCIES. .............................................. 42 XXIII. NAMES OF ALL RECOGNIZED STOCK EXCHANGE WHERE SECURITIES ARE PROPOSED TO BE LISTED CLEARLY INDICATING THE DESIGNATED STOCK EXCHANGE AND ALSO WHETHER IN-PRINCIPAL APPROVAL FROM THE RECOGNIZED STOCK EXCHANGE HAS BEEN OBTAINED................................................................................................. 42 XXIV. TERM SHEET ............................................................................................................................................ 42

DISCLAIMER CLAUSE ............................................................................................................................................ 44 DECLARATION .......................................................................................................................................................... 44


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GENERAL DISCLAIMER

This Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus and is prepared in accordance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008. This document does not constitute an offer to the public generally to subscribe for or otherwise acquire the Debentures to be issued by Bharat Forge Ltd. (the “Issuer”/ the “Company”). The document is for the exclusive use of the Institutions to whom it is delivered and it should not be circulated or distributed to third party (ies). The Company certifies that the disclosures made in this document are generally adequate and are in conformity with the captioned SEBI Regulations. This requirement is to facilitate investors to take an informed decision for making investment in the proposed Issue.

DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIA

This Disclosure Document has not been filed with Securities & Exchange Board of India (SEBI). The Securities have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this document. It is to be distinctly understood that this document should not, in any way, be deemed or construed that the same has been cleared or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project for which the Issue is proposed to be made, or for the correctness of the statements made or opinions expressed in this document. The issue of Debentures being made on private placement basis, filing of this document is not required with SEBI, however SEBI reserves the right to take up at any point of time, with the Company, any irregularities or lapses in this document.

DISCLAIMER OF THE ISSUER

The Issuer confirms that the information contained in this Disclosure Document is true and correct in all material respects and is not misleading in any material respect. All information considered adequate and relevant about the Issue and the Company has been made available in this Disclosure Document for the use and perusal of the potential investors and no selective or additional information would be available for a section of investors in any manner whatsoever. The Company accepts no responsibility for statements made otherwise than in this Disclosure Document or any other material issued by or at the instance of the Issuer Company and anyone placing reliance on any other source of information would be doing so at his/her/their own risk.

DISCLAIMER OF THE STOCK EXCHANGE

As required, a copy of this Disclosure Document has been submitted to the Bombay Stock Exchange Limited (hereinafter referred to as “BSE”) for hosting the same on its website. It is to be distinctly understood that such submission of the document with BSE or hosting the same on its website should not in any way be deemed or construed that the document has been cleared or approved by BSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this document; nor does it warrant that this Issuer’s securities will be listed or continue to be listed on the Exchange; nor does it take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of the Company. Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.

DISCLAIMER OF THE ARRANGER

It is advised that the Company has exercised self due-diligence to ensure complete compliance of prescribed disclosure norms etc in this Disclosure Document. The role of the Arranger in the assignment is confined to marketing and placement of the Debentures on the basis of this Disclosure Document as prepared by the Company. The Arrangers have neither scrutinized/ vetted nor have they done any due-diligence for verification of the contents of this Disclosure Document. The Arranger shall use this document for the purpose of soliciting subscription from qualified institutional investors and other eligible investors in the Debentures to be issued by the Company


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on private placement basis It is to be distinctly understood that the aforesaid use of this document by the Arranger should not in any way be deemed or construed that the document has been prepared, cleared, approved or vetted by the Arranger; nor do they in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this document; nor do they take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of the Company. The Arranger or any of its directors, employees, affiliates or representatives do not accept any responsibility and/or liability for any loss or damage arising of whatever nature and extent in connection with the use of any of the information contained in this document.


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I. NAME, ADDRESS & REGISTERED OFFICE OF THE COMPANY

Summary Information Of Our Company

Issuer Bharat Forge Limited

Registered Office Mundhwa, Pune Cantonment, Pune - 411036

Contact Person Mr. Beejal Desai, Sr. Vice President (Legal) & Company Secretary Tel: +91 20 2670 2777 Fax: +91 20 2682 2163, Email: [email protected] Website: www.bharatforge.com

II. Board of Directors

Brief Profile

Sr. No. Name of Director Category

1 Mr. B.N. Kalyani Promoter, Executive and Managing Director

2 Mr. S.M. Thakore Non-executive, Independent

3 Mr. S.D. Kulkarni Non-executive, Independent

4 Mr. P.G. Pawar Non-executive, Independent

5 Dr. Uwe Loos Non-executive, Independent

6 Mr. P.C. Bhalerao Non-executive Director

7 Mrs. Lalita D. Gupte Non-executive, Independent

8 Mr. Alan Spencer Non-executive, Independent

9 Mr. P.H. Ravikumar Non-executive, Independent

10 Mr.Naresh Narad * Non-executive, Independent

11 Mr.V.K.Jairath * Non-executive, Independent

12 Mr. G.K. Agarwal Deputy Managing Director

13 Mr. Amit B. Kalyani Executive Director

14 Mr. B.P. Kalyani Executive Director

15 Mr. S.E. Tandale Executive Director

16 Mr. P.K. Maheshwari Executive Director

17 Mr. Sunil Kumar Chaturvedi Executive Director

*Joined the Board with effect from 24th July 2009.


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BRIEF PROFILE OF DIRECTORS, DATE OF APPOINTMENT, ADDRESS & OTHER DIRECTORSHIP

Mr. B. N. Kalyani Appointment Date: 30/03/1993 as Director and 23/08/1997 as CMD Residence Address: ‘Amit’, 221-A, Kalyani Nagar, Yerawada, Pune – 411006 Mr. Baba Kalyani (60), is the Chairman and Managing Director of Bharat Forge Limited. Born on 7 January, 1949, Mr. Kalyani is a Mechanical Engineer from the Birla Institute of Technology, Pilani, Rajasthan. He also has an M.S. from the Massachusetts Institute of Technology, USA. Mr Kalyani is also the Chairman of Kalyani Group. The group’s business interests are in Specialty Steel, Forgings, Auto Components, Infrastructure and Specialty chemicals. With a global workforce of over 10,000 employees, the group comprises companies that include Bharat Forge Limited, Kalyani Steels Ltd, Kalyani Carpenter Special Steels Ltd, Automotive Axles Ltd, Kalyani Lemmerz Ltd, BF Utilities Ltd., Hikal Ltd, BF-NTPC Energy Systems Ltd., CDP Bharat Forge GmbH, Germany, Bharat Forge Aluminiumtechnik GmbH & Co. KG., Germany, Bharat Forge America, Inc, USA, Bharat Forge Kilsta AB, Sweden, Bharat Forge Scottish Stampings Ltd, Bharat Forge Daun GmbH, Bharat Forge Hong Kong Ltd., and FAW Bharat Forge (Changchun) Co. Ltd, China, The group’s annual turnover is USD 2.4 billion and it has joint ventures with leading global companies that include ArvinMeritor, USA, Carpenter Technology Corporation, USA, Hayes Lemmerz, USA and FAW Corporation, China. Mr. Kalyani is also director in The Ugar Sugar Works Ltd., Nandi Infrastructure Corridor Enterprises Ltd., Nandi Economic Corridor Enterprises Ltd., Kalyani Carpenter Metal Centres Ltd., Merritor HVS (India) Ltd., Khed Developers Ltd., Xapiola Holdings Ltd., UTI Asset Management Co. Pvt. Ltd., True Value Holdings Pvt. Ltd., Epicentre Technologies Pvt. Ltd., Kalyani Mauritius Pvt. Ltd., and Khed Economic Infrastructure Pvt. Ltd. Mr. Kalyani is associated with several leading Industry, Trade and Educational institutions in India and abroad. He is a member of the National Council of the Confederation of Indian Industry, the apex industry association in the country; Chairman, Board of Governors, Shri Guru Gobind Singhji Institute of Engineering & Technology Nanded; Vice President, Maratha Chamber of Commerce, Industries and Agriculture; Member, India Education Initiative; Member, Governing Board, National Institute of Bank Management; Member, Executive Committee, Indo German Chamber of Commerce; Member, Indo-US CEOs Forum; Member, Robert Bosch Advisory Committee Member, India Advisory Committee, World Economic Forum, Switzerland; and Member, Commonwealth Business Council, UK. Mr. Kalyani also serves on Boards of many prestigious companies and represents industry on several Government Committees including as Member, National Manufacturing Competitiveness Council; Member, Board of Trade; Member, National Knowledge Commission; Member, Development Council for Automobiles & Allied Industries; and Member, Consultative Group of Higher & Technical Education [including Vocational Education]. Mr. Kalyani is the Founder Chairman of Pratham Pune Education Foundation, an NGO that is engaged in providing primary education to children belonging to under privileged section of the local community in Pune. Mr. Kalyani’s significant contributions to industry and the community have been recognized through various prestigious awards that he has received. He has been conferred “Businessman of the Year-2006” by Business India Magazine, “Entrepreneur of the Year - 2005 for Manufacturing” by Ernst & Young and “CEO of the Year 2004” by the Business Standard group. He is also recipient of several other awards including “Leader of Quality [Gold Award]” by Qimpro Foundation; “The CEO of the Year 2006” by Indian Institute of Materials Management; “Baroda Sun Award” by Bank of Baroda; “V. Krishnamurthy Award for Excellence – 2006” from the Centre for Organisation Development, Hyderabad; FIE Foundation’s “Rashtrabhushan Award” for outstanding contribution in Industrial Globalisation; “Global Entrepreneur of the Year 2006” by Jagatik Marathi Chamber of Commerce & Industries [JMCCI]; the National Press Award and FIE Foundation Award.


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Mr. Kalyani was conferred [D.Litt] Honoris Causa by Symbiosis International University, Pune in 2006 and he is a Fellow of The Indian National Academy of Engineering. Mr. Kalyani has been honored by the Government of India with the prestigious Padma Bhushan Award. Mr. S. M. Thakore Appointment Date: 27/06/1986 Residence Address: 509, Cumbala Crest, 42-A, G. Deshmukh Marg, Mumbai – 400026 Mr. S.M. Thakore (62), a solicitor, is a Partner in at solicitors’ firm Talwar, Thakore & Associates. Born on 23rd July 1947, Mr. Thakore is an Independent and Non-executive Director since 27 June 1986. Mr. Thakore also serves on the Boards of Alkyl Amines Chemicals Limited, Carraro India Private Limited, Carraro PNH Components (India) Private Limited, Morarjee Textiles Limited, Carborundum Universal Limited, , Uni Deritend Limited , Uni Klinger Limited and DSP BlackRock Investment Managers (Mauritius) Limited. Mr. S.D. Kulkarni Appointment Date: 24/07/1999 Residence Address: 12, ‘Pushkar’, Bhikoba Pathare Marg, B/H. Catering College, Dadar (West), Mumbai – 400028 Mr. S.D. Kulkarni (74), is a Chartered Accountant. Born on 20th September, 1934, Mr. Kulkarni is an Independent and Non- executive Director. He is a Chartered Accountant and was formerly Managing Director and Chief Executive Officer of Larsen and Toubro Limited. Mr. Kulkarni is an Independent and Non-executive Director since 24 July 1999. Mr. Kulkarni also serves on the Boards of Sesa Goa Limited, SICOM Capital Management Private Limited, Syngenta India Limited, Syngenta Foundation India and Voltas Limited. Mr. P.G. Pawar Appointment Date: 24/05/2005 Residence Address: S. No.73 (P), , Near Shroff Suyash Building, Near Pancard Club Road, Baner, Pune – 411 045. Mr. P.G. Pawar (64), B.E. (BITS, Pilani), born on 15 October, 1944, is an Independent and Non-executive Director of the Company with effect from 24 May, 2005. Mr. Pawar also serves on the Board of P.P Holdings Ltd., Sakal Papers Ltd., , Finolex Cables Ltd., Kirloskar Oil Engine Ltd., Force Motors Ltd., , Ajay Metachem Sud Chemie Pvt. Ltd., Sakal Printers Pvt. Ltd., United Risk Insurance Broking Company Pvt. Ltd., United Metachem Pvt. Ltd., Panhala Investment Pvt. Ltd., International Conventions India Pvt. Ltd., Karha Developers & Miners Pvt. Ltd., Rajgadh Agro Farms Pvt. Ltd., Pasle Agro Farms Pvt. Ltd., Bhimthadi Developers & Miners Pvt. Ltd., Karha Infrastructure Pvt. Ltd. and World Association of Newspapers. Prof. Dr. Uwe Loos Appointment Date: 01/08/2005 Residence Address: Industrial Consultant, Hauptmansreute 122, D-70193 Stuttgart, Germany. Prof. Dr. Uwe Loos (63), Graduate Engineer, Ph.D., born on 6 March, 1946 is an Independent and Non-executive Director of the Company with effect from 1 August, 2005. Dr Loos was a Member of the Management Board of Porsche AG (1993), for production and logistics and was responsible for the introduction and implementation of a programme to establish worldwide competitiveness in manufacturing. He joined FAG in 1998, a leading ball bearing manufacturer and was appointed Chairman of the Board. During his tenure at FAG, he gained experience with its global operations including India. Dr. Loos also serves on the Boards of Gildemeiste AG, , Claas GmbH, Dorma GmbH, Trumpf GmbH, CDP Bharat Forge GmbH, EDAC GmbH and Rodenstock GmbH, Bharat Forge Aluminiumtechnik GmbH & Co. KG., Bharat Forge Daun GmbH, HP Pelzer GmbH and OPEL GmbH.


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Mr. P. C. Bhalerao Appointment Date: 31/07/2005 Residence Address: B-7, Varsha Park, Baner, Pune – 411045 Mr. P.C. Bhalerao (59), B.E., M.B.A., D.T.M., born on 4 March, 1950 is a Non-Executive Director of the Company with effect from July 31, 2005. Mr. Bhalerao also serves on the Boards of Meritor HVS (India) Limited, Nandi Infrastructure Corridor Enterprises Limited, Kumar Housing &Land Development Limited, Sanghvi Movers Limited, Nandi Economic Corridor Enterprises Limited, CDP Bharat Forge GmbH, Bharat Forge Aluminiumtechnik GmbH & Co. KG. and Bharat Forge Daun GmbH. Mrs. Lalita D. Gupte Appointment Date: 05/12/2006 Residence Address: Mhaskar Building, 1st Floor, 153C, Sir Bhalchandra Road, Matunga, Mumbai – 400019 Mrs. Lalita Gupte (60), holds a Bachelor’s Degree in Economics and a Master’s Degree in Business Management. Born on 4 October, 1948, Mrs. Gupte is an Independent and Non-executive Director of the Company with effect from 5 December, 2006. She retired, in October 2006, as the Joint Managing Director of ICICI Bank Ltd. At ICICI Bank, she has vast experience in International Business of the Bank and held leading positions in the areas of Retail and Corporate Banking, Leasing, Planning & Resources and other areas. She was instrumental in transforming ICICI Bank into a technology led leader in diversified financial services business. She is also a director of ICICI Venture Funds Management Company Limited, Godrej Properties Ltd., Firstsource Solutions Ltd., HPCL- Mittal Energy Ltd., Kirloskar Brothers Ltd., Swadhaar Finserve Pvt. Ltd., and Nokia Corporation Mr. Alan Spencer Appointment Date: 21/01/2008 Residence Address: 13 Chesham Street, London SW1X 8ND, London. Mr. Alan Spencer (75) is M.A. from Balliol College, Oxford. Born on 3 December, 1933, Mr. Alan Spencer is an Independent and Non-executive Director of the Company with effect from 21 January, 2008. He has vast knowledge and experience of the Automotive Industry, being associated with Ford Motors Company for 38 years. Mr. Spencer also serves on the Board of NEFAZ, Russia and RABA, Hungary. Mr. P. H. Ravikumar Appointment Date: 20/05/2009 Residence Address: Flat # 501, Yashowan Towers, Y.H. Kataria Marg, Behind Mahim Head Post Office, Mahim (West), Mumbai – 400 016.

Mr. P.H. Ravikumar, born on 20th July 1951, is an Independent and Non-executive Director on the Board with effect from 20 May 2009. Mr. Ravikumar has done Bachelors in Commerce and CAIIB, AIB from London. He has also done a Senior Diploma in French. He has total work experience of 36 years in Banking and financial services.

Mr. P.H. Ravikumar is also Director, amongst others, on the Board of Directors of Federal Bank Ltd., Federal Bank Financial Services Ltd., Eveready Industries India Ltd., Akruti City Ltd., SKS Microfinance Pvt. Ltd., NABARD Consultancy Services Pvt. Ltd., Akruti City Venture Capital Mgt. Pvt. Ltd. and Fundamental Value Partners (FVP) Kairos Credit Fund India Ltd.

Mr.Naresh Narad Appointment Date: 24th July 2009 Residence Address: C II / 127, Moti Baugh, New Delhi 110 021


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Mr. Naresh Narad (65) is B.A., LL.B. and a Veteran IAS Civil Servant. Born on 5th May 1944, Mr. Naresh Narad is an Independent and Non-executive Director on the Board with effect from 24 July 2009.

Mr. Naresh Narad has held various important positions in the Govt. of India and Govt. of Madhya Pradesh.

Mr. Naresh Narad is currently Additional Director on the Board of FAT Pipe Networks Limited.

Mr. V. K. Jairath Appointment Date: 24th July 2009 Residence Address: 194-B , Kalpataru Horizon , S.K Ahire Marg, Off. Dr.Annie Besant Road, Worli , Mumbai -400 018

Mr. Vinesh Kumar Jairath (50) , is IAS, B.A., LL.B., Masters in Economics from the University of Manchester, U.K., and a Fellow of Rockefeller Foundation, USA. Born on 27th December 1958, Mr. Jairath is a former Principal Secretary (Industries), Govt. of Maharashtra. Mr. Jairath is an Independent and Non-executive Director on the Board with effect from 24 July 2009.

Mr. Jairath has over 25 years of experience in public administration, rural development, poverty alleviation, infrastructure planning and development and infrastructure financing, finance, industry, urban development, environmental management, while occupying various important positions in the Government of India and the State Government of Maharashtra.

Mr. Jairath is currently also an Independent Director in Tata Motors Ltd., Avantha Power & Infrastructure Limited and Maharashtra Airport Development Co. Ltd. (MADC).

Mr. G. K. Agarwal Appointment Date: 01/04/1998 as Executive Director and Deputy Managing Director with effect from 23/05/2006 Residence Address: B-10, Varsha Park, Baner, Pune – 411045 Mr. G K Agarwal, born on 17th February 1951, B.E. (Mech), MBA, has been on the Board since 01 April 1998. He is elevated as the Dy. Managing Director with effect from 23 May 2006. Mr Agarwal serves on the board of BF Utilities Limited, CDP Bharat Forge GmbH, Bharat Forge Aluminiumtechnik GmbH &Co. KG, Bharat Forge Daun GmbH and Bharat Forge Hong Kong Limited. Mr. Amit Kalyani Appointment Date: 11/05/2004 Residence Address: ‘Amit’, 221/A, Kalyani Nagar, Yerawada, Pune – 411006 Mr. Amit Kalyani (34), has received his Bachelor’s Degree in Mechanical Engineering from Bucknell University, Pennsylvania, USA in 1998. Born on 26th July, 1975, Mr. Amit Kalyani is Executive Director of the Company with effect from 11 May, 2004. He initially worked with Kalyani Steels Ltd, followed by other companies within the group. He then joined Bharat Forge in 1999 as Vice President and Chief Technology Officer, where he played a critical role responsible for implementing Unified MIS System SAP R3. He later took charge of investor relations & fund raising such as GDR, FCCB, Rights Issue & ECB’s, to the tune of $ 400 million over a period of 3 years. He was also instrumental in strategizing and execution of the several acquisitions that the group had in Germany. Mr. Amit Kalyani is currently an Executive Director on the board of Bharat Forge Limited, the flagship company of the US $ 2.4 billion Kalyani Group. While he is involved in the company’s strategic planning & global business development initiatives, Mr. Amit Kalyani also takes care of the overall group strategy and is responsible for the expansion of its steel business and driving the infrastructure business foray of the group.


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Mr. Amit Kalyani also serves on the Boards of Kalyani Infotech Solutions Limited, Nandi Economic Corridor Enterprises Limited, Epicentre Technologies Private Limited, Kalyani Steels Limited, Nandi Infrastructure Corridor Enterprises Limited, BF Utilities Limited, KPIT Cummins Infosystems Ltd., CDP Bharat Forge GmbH., Bharat Forge Aluminiumtechnik GmbH & Co. KG., Bharat Forge America Inc., Bharat Forge Hong Kong Limited, Bharat Forge Kilsta AB, Bharat Forge Scottish Stampings Limited, FAW Bharat Forge (Changchun) Company Limited, Bhalchandra Invt. Ltd., Forge Invt. Ltd., Mundhwa Invt. Ltd.,True Value Holding Pvt. Ltd., Crocus Properties. Pvt. Ltd., Khed Economic Infrastructure Pvt. Ltd., Ajinkya Invt. & Trading Co., Jalkamal Invt. & Fin. Ltd., Jalkumbhi Invt. & Fin. Ltd., Khed Developers Ltd., BF-NTPC Energy Systems Ltd., Bharat Forge Daun GmbH and Xapiola Holdings Ltd. Mr. B. P. Kalyani Appointment Date: 23/05/2006 Residence Address: B ¾, ‘The Tulip’, 211/2, Plot 65, Kalyani Nagar, Pune – 411 006. Mr. B. P. Kalyani (47), B.E. (Production Engineering), VJTI, Mumbai, MBA in finance from New York University, MS (Mech.) Columbia University, New York. Born on 31 July, 1962, is an Executive Director of the Company with effect from 23 May, 2006. He has served with the Company for 24 years and was senior vice president (FMD). He also serves on the Board of Kalyani Utilities Development Limited. Mr. S. E. Tandale Appointment Date: 23/05/2006 Residence Address: C-S02, Pride Panorama, Senapati Bapat Marg, Pune – 411 016. Mr. S. E. Tandale (40), B.E. (Mech.) born on 24 September, 1968, is an Executive Director of the Company with effect from 23rd May, 2006. He has served with the Company for 15 years and was Senior Vice President (International Trade Division). He also serves on the Boards of Bharat Forge America Inc., Bharat Forge Kilsta AB, Bharat Forge Scottish Stampings Limited, FAW Bharat Forge (Changchun) Company Limited and Tecnica UK Limited. Mr. P. K. Maheshwari Appointment Date: 23/05/2006 Residence Address: Flat No.102, Prime Building, “Cosmos”, Magarpatta City, Hadpsar, Pune 411028 Mr. P. K. Maheshwari (48), B.Com. CA, PGDM, born on 18 February, 1961, is an Executive Director of the Company with effect from 23 May, 2006. He was Group Chief Finance Officer of the Company. He also serves on Boards of Nandi Highway Developers Ltd. , Nandi Infrastructure Corridor Enterprises Ltd., Nandi Economic Corridor Enterprises Ltd., CDP Bharat Forge GmbH., Bharat Forge Aluminiumtechnik GmbH & Co. KG., Bharat Forge America Inc., Bharat Forge Hong Kong Limited, Bharat Forge Kilsta AB, Bharat Forge Scottish Stampings Limited, FAW Bharat Forge (Changchun) Company Limited and Bharat Forge Daun GmbH. Mr. Sunil K. Chaturvedi Appointment Date: 20/05/2008 Residence Address: D-16, Sector-39, Noida – 201 303 U.P. Mr. Sunil K. Chaturvedi (46) is a commerce graduate and Chartered Accountant. Born on 5 February, 1963, Mr. Chaturvedi is an Executive Director of the Company with effect from 20 May, 2008. He joined Indian Administrative Service, Government of India, in August 1988 and worked in various capacities till January 31, 2008. He has over 23 years of experience. He serves on Board of BF-NTPC Energy Systems Limited.


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III. SUMMARY OF BUSINESS/ ACTIVITIES

Business Description The Company Our Company is the flagship company of the Kalyani group which has significant presence in the auto component sector in India. We are one of the leading commercial forging companies globally in terms of capacity and revenue and our Company is one of the largest commercial forging companies in India. We are one of the world’s leading manufacturers of automotive chassis and Power train (engine) components such as crankshafts, front axle beams, connecting rods, steering knuckles and other components to several of the world’s leading commercial vehicle and passenger vehicle manufacturers. We also produce forged components for non automotive industries including wind energy, railways, marine, stationery diesel engines and the oil and gas industry. These products include shafts for windmills, valves, bonnets and Blow out Preventers (BOP) for the oil and gas industry, and crankshafts for marine, Locomotive and stationery diesel engines. Our Company’s principal production facility is located in Pune. Installed capacities of major products of our line of business are as under as on 31st March 2009: Forging approximately 2, 52,685 MT per annum Crankshaft Machining capacity 7, 59,600 Nos per annum Front axle assembly and components 7, 53,200 Nos per annum Corporate Structure Our Company has direct and indirect wholly-owned subsidiaries in Germany, Sweden, Scotland, the United States and Hong Kong. Our Company has a joint venture company in China, in which we own 52 per cent stake. Since 2004, our Company has made several strategic acquisitions in key locations such as Germany, Sweden, Scotland, USA, China etc. These acquisitions have given our Company competitive strengths such as dual shore manufacturing capabilities, full service supply capabilities and strong design and engineering capabilities. Our Company’s capabilities and access to customers and markets outside of India have been significantly expanded by these investments, which include the formation of a joint venture company, FAW Bharat Forge (Changchun) Company Limited,(FAWBF) in China with FAW Forging Limited of FAW Corporation in March 2006, the acquisition of the Imatra Forging Group, now renamed as Bharat Forge Kilsta AB (BFK) in Sweden and Bharat Forge Scottish Stampings Limited, (BFSSL) in Scotland, in September 2005, the acquisition of Federal Forge Inc., now known as Bharat Forge America Inc.(BFA), based in Lansing, Michigan, USA in June 2005, acquisition of Bharat Forge Aluminiumtechnik GmbH & Co. KG (BFAT) based in Brand-Erbisdorf, Germany in December 2004 and acquisition of CDP Bharat Forge GmbH (CDPBF) based in Ennepetal, Germany in January 2004. The forging capacity & Products of our Company’s Subsidiaries are as follows: Name of the Company Capacity MT per annum Products FAW BF 135,000 Chassis Components for Passenger &

Commercial Vehicles BFK & BFSSL 100,000 Engine & Chassis Components for

Commercial Vehicles BFA 60,000 Chassis Components for Light Commercial

Vehicles CDP BF & BF AT 100,000 Engine & Chassis Components for Passenger

& Commercial Vehicles Our Company has on June 19, 2008 incorporated BF-NTPC Energy Systems Limited as a joint venture company pursuant to a MoU dated February 8, 2008 with NTPC Limited. In November 2008, we have also signed an agreement with Alstom SA, France to set up a Joint Venture Company for manufacturing state of the art supercritical power plant equipments in India.


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In August 2009, we have signed a Joint Venture & Shareholders Agreement with Areva to set up a Joint Venture (JV) to build a manufacturing facility for heavy forgings in India. Competitive strengths We believe that we have several competitive strengths that provide us with significant opportunities to grow our business in the forging industry. Our principal competitive strengths are as follows: 1. Strong focus on technology and full service supply capabilities Over the years, we have developed extensive technology and product design capabilities. Examples of such development include vertically integrated steel mills within the Kalyani group, and wide domain knowledge for the design and engineering of highly critical and safety automotive and non automotive components. We are well placed in terms of providing a single window for meeting the requirements of global OEMs from material sourcing and approval to machining, testing and validation. 2. Established relationships with premier global customers We supply products to customers in four major geographic regions, namely India, the United States, Europe and Asia Pacific (excluding India). We have a well diversified customer base of more than 35 global OEM and Tier 1 companies in both the automotive as well as non-automotive space. 3. Development partner with major OEMs We have moved from supplying components as per customer’s drawings to co-developing the part along with the customer. In the process we offer our metallurgical and design engineering capabilities and experience in manufacturing, enabling the customer to optimize the component design. This leads to a long-term mutually beneficial relationship with OEMs besides giving us a major share of the business. 4. Wide product range and scalability of operations We have diverse production facilities with press lines ranging from 1,600 MT to 16,000 MT, which enable us to produce almost an entire range of closed and open die forgings. 5. Dual Shore manufacturing capabilities Our global presence gives us the ability to cater to the needs of our customers from multiple locations, at times designing products at one location while manufacturing them at another. Such “Dual-shore” manufacturing with certain facilities in close proximity to customers assures our customers uninterrupted and certainty of supply and also gives the benefit of cost-competitive manufacturing operations. Looking Forward The key elements of our strategy are as follows: 1. Capture the growth potential offered by the non automotive sectors

Considering the growth potential, we are capitalizing on our manufacturing and design engineering capabilities, metallurgical know-how and existing customer relationships, to expand our business in the following non automotive sectors: • Conventional and non – conventional energy • Aerospace • Oil and gas exploration • Rail and marine • Infrastructure metals and mining

As of March 31, 2009, the non-automotive business contributed 21% to our consolidated revenues. The forgings for the non-automotive sector are presently being supplied from both our Indian and overseas Subsidiaries. The non-automotive sectors are seeing demand and growth due to various factors including new investments in the infrastructure sector in emerging economies such as India and China and replacement investments in the infrastructure and transportation sector to replace legacy infrastructure and comply with new stringent emission norms.


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As a part of our foray into the non-automotive sector, we have incorporated a joint venture company, BF NTPC Energy Systems Limited, on June 19, 2008, with a 51% majority stake for the manufacture of castings, forgings, fittings and high pressure pipings required for power and other industries, balance of plant (BOP) equipment for the power sector etc. In November 2008, we have also signed an agreement with Alstom SA, France to set up a Joint Venture Company for manufacturing state of the art supercritical power plant equipments in India.

In August 2009, we have signed a Joint Venture & Shareholders Agreement with Areva to set up a Joint Venture (JV) to build a manufacturing facility for heavy forgings in India. 2. Explore strategic opportunities to expand product portfolio and further diversify the

geographic, economic and customer risk of our existing business model We will continue to de-risk our business model through organic and inorganic growth initiatives across the following areas:

Geography: We are already present in major continents including North America, Europe

and Asia (India and China) and will continue to penetrate these markets further and explore new geographies.

Product portfolio: Expanding the product portfolio across steel and aluminum forgings for the automotive sector, covering engine and chassis components and increasing our presence in non automotive sectors, thereby transforming our Company from an auto component supplier to an engineering and capital goods company.

Customer base: Deepen relationships with existing customers and expand our customer base across geographies and product portfolio.

Our Products We manufacture wide range of products both in forged and machined conditions. The majority of our products such as crankshafts, front axle assembly and components and connecting rods are for the automotive industry. We also produce forged components for non automotive industries including wind energy, railways, marine and stationery diesel engines and the oil and gas industry. These products include shafts for windmills, valves, bonnets and Blow out Preventers (BOP) for the oil and gas industry, and crankshafts for marine, Locomotive and stationery diesel engines. Our steel forgings products include products such as crankshafts, front axle assembly and components, connecting rods and heavy engineering products sold in forged condition for automotive and other industries such as oil and gas. We also manufacture open die forged products such as roller shafts, blooming mill rolls, integral frame shafts and wind mill shafts. We have broadly organized our product offerings into two segments, based on the method of forging; viz. closed die forgings and open die forgings. Our technically competent engineers work closely with our customers to extract the best design and produce cost effective and quality forgings. 1. Closed Die Forging Closed die forgings accounts for a major portion of our production. In this process, the hot metal is closed around a die consisting of two halves. This process is used to make smaller forgings requiring closer tolerance limits like axles, gear blanks and crankshafts among others. The process is sometimes referred to as impression die forging. Our closed die forging products can be primarily classified as engine components, chassis components and others. These components include the following:


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A. Engine Components (a) Crankshafts A crankshaft is a power train part, which transmits the power generated in the cylinder through the connecting rod to the main drive of the vehicle. We have the capability to manufacture a wide variety of crankshafts for various automotive & non automotive applications such as passenger & commercial vehicles, Stationary & Marine diesel engines, Locomotives and power generating sets. We manufacture crankshafts in both forged and machined form. Our customers for crankshafts include global OEMs and Indian commercial vehicle manufacturers. (b) Connecting Rods We are a major supplier of connecting rods for the diesel engine industry, Locomotives & Marine Engines, automobile as well as power generation applications. We currently manufacture forged connecting rods for global OEMs. Current range of connecting rods varies between 1-125 kg B. Chassis Components (a) Front axle assembly and components Front axle assembly and components comprise the front axle beam and steering knuckles. A front axle beam is a chassis component that supports the two front wheels of a vehicle. We are one of the leading suppliers of front axle beams to the world market. We supply both forged and machined front axle beams for a wide array of applications ranging from light commercial vehicles to heavy trucks. A steering knuckle is also a chassis component that usually includes a spindle and steering arm and allows the front wheel to pivot. We supply fully machined steering knuckles to OEMs globally. C. Other products (a) Transmission parts We manufacture transmission parts for passenger cars and sports utility vehicles, used in highly sophisticated manual as well as automated transmissions. We supply a wide variety of parts such as input shafts, gears, sleeve transmission counter shafts and output shafts ranging from 0.5 kg to 10 kg. (b) Oil and Gas Products We provide forgings for the oil and gas segment, with products ranging from valves, chokes, casing heads, both in forged and machined condition. We have also developed forged valves for high pressure applications in the oil industry. We currently manufacture oil and gas products ranging from 15 – 500 kg. Our Company’s facility is API-6A certified and our production strictly adheres to the API requirements. 2. Open Die Forging In open die forging, the work piece is not completely confined as it is being shaped by the dies. This process is adopted when the volume requirements are low. Usually open die forging is used for heavy forgings, which find application in industrial machinery. Open die production is restricted to a few companies in the industry. The open die process is commonly associated with large parts such as shafts, sleeves and disks, where part weights can be upwards of 1 Ton. Most open die forgings are produced on flat dies. Round swaging dies and V dies also are used in pairs or with a flat die. Operations performed on open die presses include drawing out or reducing the cross-section of an ingot or billet to lengthen it, upsetting or reducing the length of an ingot or billet to a larger diameter, upsetting, drawing out and piercing-processes sometimes combined with forging over a mandrel for forging rough-contoured rings. In open die forging, metals are worked above their recrystallisation temperatures. As the process requires repeated changes in work piece positioning, the work piece cools during open die forging below its hot-working or recrystallisation temperature. It then must be reheated before forging can continue. For example, a steel shaft 2ft in diameter and 24ft long may require four to six heats before achieving the final forged dimension.


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The open die forging process is adopted for heavy forgings, which find application in industrial machinery, power plants, wind turbines and oil exploration among others. Facilities Our Company has facilities for every step of the production process from design to testing and validation. This reduces our Company’s dependence on third-party service providers and enables us to offer our Company’s customers a shorter time to market of our products. Our Company’s control over the entire production process enables our Company to ensure the quality of our Company’s products. We have 12 plants spread across India, US, Europe and China.

Capacity As at March 31, 2009, our Company on standalone basis had an installed forging capacity of 240,000 MT per annum. The table below sets out our installed capacity and level of production of major products for the years ended March 31, 2009, 2008 and 2007 respectively:

Installed Capacity Production (Incl job work) FY FY

Unit 2009 2008 2007 2009 2008 2007

Steel Forgings MT 252,685

240,000

240,000 134,428

191,738

165,239

Machined Products

Crankshafts Nos 759,600

719,635

650,000 440,511

559,983

522,065

Front Axle Assembly and Components Nos

753,200

753,200

753,200 309,583

509,417

572,053


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Notes: Our Company’s installed capacity is dependent on product mix, which in turn is dependent on actual demand for various products from time to time. Actual production includes captive consumption of 54,263 MT per annum for the year ended March 31st 2009, 74,687 MT per annum for the year ended March 31, 2008 Financial Analysis The Financial Performance of the Company (stand alone) for last five years is as under;

Rs. Crore 2009 2008 2007 2006 2005 Equity Paid Up 44.54 44.54 44.54 44.46 39.56 Net worth 1,486.93 1,473.28 1,316.80 1,154.13 422.56 Gross Block 2,684.02 2,029.64 1,735.06 1,265.11 948.78 Gross Sales 2,114.78 2,314.37 1,990.84 1,651.44 1,258.63 Net Sales 1,994.55 2,141.76 1,834.82 1,530.79 1,167.22 PBIDT 407.48 640.91 541.72 442.72 334.20 PAT 103.29 273.59 240.95 206.97 161.63 Cash Profit (PAT + Depreciation) 252.73 412.53 340.75 280.01 214.19 Dividend (annualised %) 50 175 175 150 125 Total Debt-Equity Ratio 1.22 0.87 1.06 0.85 0.94 Long Term Debt-Equity Ratio 1.07 0.63 0.76 0.63 0.62

IV. BRIEF HISTORY OF OUR COMPANY SINCE INCORPORATION AND CHANGES IN CAPITAL STRUCTURE

History We are the flagship company of the Kalyani Group which has a significant presence primarily in the auto component sector in India. We were established in 1961 as Bharat Forge Company Limited by Mr. Neelakanth Kalyani. We commenced our production in 1966. The name of our Company was subsequently changed to Bharat Forge Limited on April 30, 1986. Milestones and achievements of our Company: Year Event 1961 Incorporation of our Company 1962 Technical agreement with SIFCO, USA for hammer forging technology 1966 Start of hammer shop commercial production 1972 Execution of maiden export order to Greece 1984 Technical agreement with Tokyo Drop Forge, Japan for technology up-gradation and

quality improvement for hammer forgings 1985 Entry in the erstwhile USSR market by winning a large contract for under carriage

components 1986 Technical agreement with Jidosha Buhin Kogyo, Japan for machining of front axle beams 1990-91 Major breakthrough in the developed markets of Japan, USA and UK for the critical

suspension and engine components like front axle beams and machined crankshafts 1991 Implementation of a large US $ 50 million forging facility up-gradation programme by

commissioning of 16000 MT’s and 6000 MT’s Weingarten (Germany) presses 1993 ISO 9002 accreditation 1996 Technical agreement with Metalart Corporation, Japan for small forgings and

commissioning of 4000 MT’s and 2500 MT’s mechanical press lines for small forgings 1997-98 Establishment of new machining facilities for crankshafts, front axle beams and heavy

steering knuckles 1999 QS 9000 accreditation 2000 Implementation of a US $ 30 million forging facility expansion programme by


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Year Event commissioning of second 16000 MT’s Weingarten (Germany) press and 2500 MT’s mechanical press lines

2001 Windmill Division and Investment Division were vested in BF Utilities Limited vide a Scheme of Arrangement under Section 391 and 394 of the Companies Act, 1956

2002 Acquired the order book of Dana Spicer Europe Limited (Kirkstall Forge Division) and got access to new customers in Europe and strengthen our presence in Oil and Gas Sector.

2004 Acquired German operations of Carl Dan Peddinghaus GmbH & Co., Germany in an asset purchase deal through our wholly owned subsidiary, CDP Bharat Forge GmbH. Acquired 100 per cent ownership interest of CDP-AT, now renamed as BF AT, which marked our entry into the aluminium auto component business and enabled our Company to offer a wider range of products to its customers.

2005-06 Acquired the operations of Federal Forge Inc., in an asset purchase deal through its wholly owned subsidiary BFA. This acquisition gave our Company access to the light truck market in the United States and established a manufacturing presence in the United States. Acquired 100 per cent ownership in the Swedish forging group, Imatra Kilsta AB, renamed BFK and its wholly owned subsidiary Scottish Stamping Limited, renamed BFSSL. Formed a joint venture company, FAW Bharat Forge with the FAW Group. Our Company holds 52 per cent of the shares in FAW Bharat Forge while the FAW Group holds 48 per cent of the shares. The FAW Group transferred its ongoing forging business to FAW Bharat Forge. FAW Bharat Forge commenced operations on April 6, 2006. Completed Rs 650 Crore capacity expansion programmes for forging & Machining facility at its Pune plant. The said programme increased its forging capacity from 102,966 TPA to 240,000 TPA and crankshaft & Front axle components machining capacity.

2007 Embarked on Rs 500 crores capacity expansion programme for setting up a ring rolling facility, state of the art non-auto forging facility with complimentary machining ,machining of medium crankshafts at Baramati & machining of windmill shafts at Satara. The capacity expansion will augment the forging capacity of the Indian operations to 365,000 tons Per Annum (TPA).

2008 Incorporated a joint venture company, BF NTPC Energy Systems Limited, on June 19, 2008, with a 51% majority stake for the manufacture of castings, forgings, fittings and high pressure pipings required for power and other industries, balance of plant (BOP) equipment for the power sector etc Signed an agreement with Alstom SA, France to set up a Joint Venture Company for manufacturing state of the art supercritical power plant equipments in India in November 2008.

2009 Signed a Joint Venture & Shareholders Agreement with Areva to set up a Joint Venture to build a manufacturing facility for heavy forgings in India.


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Capital Structure of the Company Share Capital as at 31st March 2009 is set forth below: (Rs. In crores) As on 31st March, 2009 Amount 1. SHARE CAPITAL A. Authorised Equity Share Capital 60.00 Authorised Preference Share Capital 43.00 Authorised Unclassified Shares 2.00 B. Issued Equity Capital 44.57 Issued Preference Share Capital - Issued Unclassified Shares - C. Subscribed and Paid up Equity Capital 44.54 Subscribed and Paid up Preference Share Capital - Subscribed and Paid up Unclassified Shares - Total Borrowings as on: (Rs. In crores) Particulars 31st March 2009 31st March 2008 LOAN FUND a. Secured Loan 870.66 461.58 b. Unsecured Loan 937.21 825.91 Total 1,807.87 1,287.49 Shareholding Pattern Statement showing Shareholding Pattern as on June 30th, 2009

Category of Shareholder Total No. of Shares

% to Total No. of Shares

Promoter & Promoter Group 97,908,905 43.97 Mutual Funds / UTI 90,14,201 4.05 Financial Institutions / Banks 13,587,346 6.10 Insurance Companies 10,676,336 4.80 Foreign Institutional Investors 17,120,389 7.70 Bodies Corporate 24,699,858 11.09 Individuals 46,624,048 20.94 Others (Clearing Members & Trusts) 3,011,988 1.35 Shares held by Custodians and against which Depository Receipts have been issued 9,200 0.00 Total 22,26,52,271 100 Changes in Capital Structure The table below sets forth changes in the issued share capital of the Company.

Date of allotment

No. of Equity Shares Allotted

Face Value(Rs.)

Issue Price (Rs.)

Cumulative Number of shares

Cumulative paid-up capital (Rs.)

ConsiderationRemarks

September 26, 1961

156 100 100 156 15,600 Cash Subscription to MOA1

January 20, 1962 6,000 100 100 6,156 615,600 Cash

Private Placement of Shares to Directors, Friends &


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Date of allotment


Face Value(Rs.)

Issue Price (Rs.)




Relatives

May 8, 19623,050 100 100 9,206 920,600 Cash

Private Placement of Shares to Directors, Friends & Relatives

September 22, 1962

50 100 100 9,256 925,600 Cash

Private Placement of Shares to Directors, Friends & Relatives

May 21, 1963 2,380 100 100 11,636 1,163,600 Non Cash

Issued to SIFCO, USA for consideration other than cash pursuant to their technical assistance contract 2

April 23, 1963

Subscribed privately by directors, friends & relatives

June 7, 1963

Subscribed privately by promoters and managing agents

June 15, 1963

12,095 100 100 23,731 2,373,100 Cash

Subscribed privately by friends & relatives

October 4, 1963

13,458 100 100 37,189 3,718,900 Cash

Subscribed privately by directors, promoters, managing agents, friends & relatives

November 16, 1963

6,600 100 100 43,789 4,378,900 Cash


November 30, 1963

23 076 100 100 66,865 6,686,500 Cash


1963 – 8,755 100 100 75,620 7,562,000 Cash Details regarding


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Date of allotment


Face Value(Rs.)

Issue Price (Rs.)




1964 share capital subscription not available1

January 20, 1964

77,000 100

100 152,620 15,262,000 Cash Initial Public Offering

March 25, 1964

2,380 100 100 155,000 15,500,000 Non Cash

Issued to SIFCO, USA for consideration other than cash pursuant to their technical assistance contract2

Subdivision of equity shares from Rs. 100 each to Rs. 10 each resulting in 1,550,000 shares of Rs. 10 each3 September 17, 1976

930,000 10 10 2,480,000 24,800,000 - Bonus Issue in the ratio of 3:54

June 20, 1981

2,480,00010 10

4,960,000 49,600,000 - Bonus Issue in the ratio of 1.14

May 20, 1987

312,500 10 40 5,272,500 52,725,000 Cash

Vth Series Convertible Debentures issued on a rights basis tothe existing shareholders in the ratio of 5:80

April 24, 1989

5,272,50010

10 10,545,0 00 105,450, 00 - Bonus Issue in the ratio of 1.14

December 23, 1989

4,090,70010 50 14,635,700 146,357,000 Cash Rights Issue in the ratio of 1:4

November 6, 1992


December 14, 1993

1,337,03510 160 19,774,685 197,746,850 Cash

IX Series Non Convertible Debentures Coupon conversion

April 15, 1994


September 13, 1994

3,500,00010 156

30,197,685 301,976,850 Cash Preferential issue to Promoter group5

December 19, 1994

1,209,801 10

50 31,407,486 314,074,860 Cash

VIth Series Non Convertible Debentures Coupon


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Conversion June 16, 1995

1,568,60010 196.93 32,976,086 329,760,860 Cash Senior executive stock Option Scheme6

August 1, 1995

2,926,45010 50 35,902,536 359,025,360 Cash

Xth Series non-convertible debentures Coupon Conversion

November 8, 1995

1,800,00010 117.18 37,702,536 377,025,360 Cash Private placement to Promoter Group7

(34,568) 10 - 37,667,968 376,679,680 Forfeited8

(340) 10 - 37,667,628 376,676,280

Annulment of equity shares allotted to non-residents9

October 1, 2004


April 19, 2005

3,636,50010 1,190.3843,187,042 431,870,420 Cash GDRs allotted on April 19, 2005 and May 5, 2005

Sub-division of equity shares from Rs.10 each to Rs. 2 each resulting in 215,935,210 shares of Rs. 2 each pursuant to a resolution of the shareholders dated March 30, 2005

December 12, 2005

4,574,205 2

268.20 220,509,415 441,018,830 Cash

Conversion of Warrants attached to Equity Shares allotted in the 2004 Rights Issue

March 17, 2006

1,753,2462 336.11 222,262,661444,525,322 Cash Conversion of 1st Tranche FCCBs

April 12, 2006 389,610

2

336.11 222,652,271445,304,542 Cash Conversion of 1st Tranche FCCBs

1. The details are not available as the records were burnt in fire which took place in our premises on April 24, 1998 2. 4,760 Equity Shares of Rs. 100 each were issued as fully paid up for consideration other than cash, to SIFCO, USA pursuant to a Technical Assistance Contract. These shares were issued in calendar year 1963 and 1964. 3. The shares of face value of Rs. 100 each were subdivided into equity shares of face value of Rs. 10 each vide the approval given the general body at the extraordinary general meeting held on July 02, 1971. 4. Issue of fully paid Bonus Shares by way of capitalization of Share Premium Account and Reserves. The details are not available as the records were burnt in a fire which took place in our premises on April 24, 1998. 5. Equity shares issued at a premium of Rs. 146/- per equity share, against warrants issued to Promoter/Promoter Group Companies on preferential basis. These shares were allotted to Kalyani Steels Limited (2,885,000 equity shares), Ajinkya Investment and Trading Company Limited (205,000 equity shares), Koyna Investment and Trading Company (205,000 equity shares) and Cockscomb Investment and Finance Private Limited (205,000 equity shares). Details of certificate from the statutory auditors that the securities were issued in accordance with then existing SEBI Guidelines was not available as the records were burnt in fire which took place in our premises on April 24, 1998.


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6. In 1995, the Company provided an interest free loan of Rs.309 million to a company, Kritadnya Management and Trading Services Private Limited (“KMTS”), which has given an undertaking to hold the shares solely for the purpose of obligations of the “BFL Executives Welfare and Share Option Trust” in terms of clause (b) of the proviso to Section 77(2) of the Companies Act, 1956. In this regard, the Company has allotted 1,568,600 equity shares to KMTS in 1995. 7. A private placement of 18, 00,000 shares was done to Promoter group companies. 900,000 shares were allotted to Surajmukhi Investment & Finance Limited and other 900,000 shares to Chakrapani Investment & Trades Limited. A certificate from the statutory auditors that the securities were issued in accordance with then existing SEBI Guidelines was obtained. 8. Pertains to shares forfeited on account of non-payment of calls; 5,426 equity shares were forfeited on June 30, 1991, of which forfeiture of 2,424 equity shares has been annulled on account of payment of overdue calls subsequently; 65,730 equity shares were forfeited on November 30, 1993, of which forfeiture of 34,164 equity shares has been annulled on account of payment of overdue calls subsequently. 9. Allotment of 340 equity shares to non-residents was annulled in reference to RBI advice against allotting additional shares under 89 series debentures of VIth series with attached coupon warrants.

V. INDUSTRY Indian Automotive Components Industry overview India’s automotive components industry manufactures almost the entire range of parts required by the automotive industry for various types of vehicles. The forging industry caters to five major segments namely power train parts (pistons, piston rings, engine valves, crankshafts, connecting rods etc.), electrical parts (starter motors and generators etc.), drive, transmission, Chassis and steering parts (gears, clutches, front axle beams, steering knuckles etc.), suspension and braking parts (brakes, leaf springs, shock absorbers etc.), equipment (headlights, dashboard instruments etc.) and others (sheet metal parts, pressure die castings, tyres, tubes etc.). The Indian Automotive industry witnessed strong growth with automobile production increasing from 6.28 million vehicles in 2002-03 to over 11.18 million vehicles in 2008-09, at a CAGR of 10 per cent. This was driven by a vibrant economy, increased purchasing power of the Indian consuming class among others. (Source: Society of Indian Automobile Manufacturers (SIAM) website www.siamindia.com.) The Indian auto component industry is estimated to have achieved a turnover of US$ 18 billion in 2007–08 registering a growth of 20 per cent as compared to previous year. The auto parts industry has emerged as one of India’s fastest growing manufacturing sectors, growing at a compound annual growth rate (CAGR) of 28 per cent in value terms between 2002-03 and 2007-08. The industry has achieved this through expansion of product portfolio, entry in to newer markets and efficiency improvement. (Source: “Global Competitiveness of Indian Auto Component Industry & Its Sustainability”. Automotive Component Manufacturers Association of India website http://www.acmainfo.com). The auto component sector in 2007-08 is estimated to have exported 20 per cent of its output. In the year 2007-08, the industry exported goods worth US$ 3.6 billion as against US$ 2.9 billion in year 2006-07, registering a growth of 26%. (Source: “Global Competitiveness of Indian Auto Component Industry & Its Sustainability”. Automotive Component Manufacturers Association of India website http://www.acmainfo.com).


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Key markets for Indian Auto components Industry Domestic Markets A major source of domestic demand for the auto component manufacturers is derived from domestic passenger vehicles and commercial vehicles demand. As per SIAM, for the year ended March 31, 2009, passenger cars and utility vehicles production grew at CAGR of 16.8 per cent between 2002-03 and 2008-09. For the same period; commercial vehicles production registered a CAGR of 12.7 per cent. (Source: Society of Indian Automobile Manufacturers (SIAM website www.siamindia.com). Export Markets The offshore demand for auto components mainly comprises of global vehicle majors (OEMs) and Tier 1 manufacturers. As per ACMA, Indian auto component exports have grown at approximately 30 per cent per annum in the past four years to cross US$ 3.6 billion in 2008 from US$ 1.3 billion in 2004. (Source: “Global Competitiveness of Indian Auto Component Industry & Its Sustainability”. Automotive Component Manufacturers Association of India, website http://www.acmainfo.com/) Indian Automotive Industry The automotive sector is one of the core industries of the Indian economy. The delicensing of the sector in 1991 and the subsequent opening up of 100 per cent foreign direct investment (FDI) through the automatic route marked the beginning of a new era for the Indian automotive industry. Since then almost all the global major automobile players have set up their facilities in India taking the level of production of vehicles from 2 million in 1991 to 11.18 million (Including 2 & 3 wheelers) in 200809. The growth of the Indian middle class with increasing purchasing power along with the strong growth of the economy over the past few years has attracted global major auto manufacturers to the Indian market. Moreover, India provides trained manpower at competitive costs making India a favoured global manufacturing hub. The attractiveness of the Indian markets on one hand combined with the stagnation of the auto sector in markets such as Europe, US and Japan on the other, have resulted in shifting of new capacities and flow of capital to the Indian auto industry resulting in a boom for the domestic auto industry over the past 5 years Passenger vehicle production increased from around 0.7 million vehicles in 2002-03 to more than 1.84 million vehicles in 2008-09, a CAGR of 16.8%. During the same period, Commercial vehicle production increased at a CAGR of 12.7% from 0.20 million vehicles to 0.42 million vehicles. Domestic Passenger Vehicle Segment (2003-2009)


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Passenger Vehicles

723,330

989,5601,209,876

1,309,300

1,545,2231,777,583 1,838,697

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Domestic Commercial Vehicle Segment (2003-2009)

Commercial Vehicles

203,697

275,040

353,703391,083

519,982549,006

417,126

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

In 2008-09, the Indian Auto industry witnessed turbulent times due to hardening interest rates, lower availability of finance, escalating fuel prices, economic slowdown all of which have contributed to the sluggish volumes in the sector. The situation drastically deteriorated in the latter half of the year due to sudden global economic crisis due to the sub prime crisis. Within the auto pack, volumes of the Commercial Vehicles (CV) segment have been impacted the most due to the slowdown, with Medium & Heavy Commercial Vehicles (M&HCV) volumes declining drastically. M&HCV production in H2 FY09 declined by 61.3% as compared to the same period last year. Outlook for the Indian Auto components Industry After seven consecutive years of good growth, auto component majors are facing major headwinds on both the domestic as well as the export front and Auto component manufacturers have begun cutting production. Lack of finance and a large inventory stockpile had forced truck majors to sharply cut production commercial & Passenger vehicles in the wake of slowing demand. Off late, the incentives provided by the federal government have resulted in stifling of the decline and small recovery in certain segments.


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Global Non-automotive industry overview Forgings find application in various industries other than automobiles, like power plants, wind turbines, earth-moving equipments, marine engines, aerospace, railways etc. These sectors are globally witnessing phenomenal growth driven by:

New investments in emerging economies like India and China Replacement investments in developed economies of North America and Europe for

overhaul of legacy infrastructure and complying with new emission norms The growth potential offered by some segments of the non automotive sector both globally & in India is explained below. Wind Energy The rise of wind energy as an alternative energy source is being driven by higher prices & supply scarcity of commodities like oil, coal etc., and increasing social and political concern over carbon emissions and climate change, and by the changing legislative landscapes that accompany this. In the 11th five year plan (2008-12), the Government of India is targeting additional installed power generation capacity of 10,500 MW through wind energy (Source:www.mnes.nic.in/pdf/11th-plan-proposal.pdf). Forged components for the wind energy sector include main shafts, flanges, gear box components and rings among others. Railways The railway industry is on a growth path fueled by growing global trade and rising fuel costs for transportation by road and air. The rapid rise in international trade and domestic cargo has placed a great strain on railway infrastructure in India. The Government of India has decided to build dedicated freight corridors in the Western and Eastern high-density routes. The investment is expected to be about Rs. 22,000 crore (US$ 5 bn).(Source: Committee on infrastructure www.infrastructure.gov.in). Forged components for the railways include connecting rods, crankshafts, track links, pistons, axles and camshafts among others. Power The government has plans for capacity creation of 78,000 MW during the 11th five year plan (2008-12) and has announced setting up of nine major Ultra Mega Power Projects (UMPPs). These are very large sized projects, approximately 4000 MW each, requiring investment of about Rs 16,000 Crores each. This sector overall will require projected investments to the tune of US$ 150 billion. (Source: Government websites: Ministry of power (www.powermin.nic.in and investment commission of India (http://www.investmentcommision.in). At the same time existing infrastructure in the developed markets is getting replaced to conform to the new emission norms. Forged components for the power sector include rotor shafts, precision forged blades for turbines and components for turbo generators.

VI. SECURITIES TO BE ISSUED AND LISTED UNDER CURRENT DOCUMENT Under the purview of current document, the Company intends to raise an amount of Rs.350 Crores of Secured Redeemable Non Convertible Debentures in dematerialised form. The Company has a valid rating of “LA+ With a Stable Outlook” (pronounced L Double A) by ICRA Limited as per the details given below and the rating letter from the rating agency is enclosed at the end of this document. The detail terms sheet of the proposed debenture issue is given in section XXIII of this document.


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Credit Rating For Secured Redeemable Non Convertible Debentures “LA+ with a Stable Outlook” (pronounced L A Plus) by ICRA Limited for Rs.350 Crores long term NCDs. Instruments with this rating are judged to offer an adequate credit quality rating. The rating is not a recommendation to buy, sell or hold securities and investors should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating should be evaluated independently of any other rating. The rating obtained is subject to revision at any point of time in the future. The rating agencies have a right to suspend, withdraw the rating at any time on the basis of new information etc.


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VII. DETAILS OF THE ISSUE SIZE

The Company proposes to mobilise through private placement of Secured Redeemable Non-Convertible Debentures (NCDs). Summary Term Sheet

Issuer Bharat Forge Ltd.

Instrument Secured Redeemable Non Convertible Debentures

Issue Size Rs.350 Crores (Rupees Three Hundred Fifty Crores only)

No. of Debentures 3500

Face Value Rs.10,00,000 each

Tenor The above NCDs will be redeemed at par as under: At the end of 54th month – 25% At the end of 60th month – 50% At the end of 66th month – 25%

Listing The debentures are proposed to be listed on the WDM segment of the National Stock Exchange of India Limited (NSE)

Issuance The Debentures are proposed to be issued in Dematerialised form

Trading The Debentures will be traded in Dematerialised form only

Depository NSDL/CDSL

Settlement Payment of interest will be made by way of cheque(s)/ interest warrant(s)/ demand draft(s)/credit through RTGS system

The Company reserves the right to change the issue programme and also accept or reject any application in part or in full without assigning any reason.

VIII. DETAIL OF UTILISATION OF PROCEEDS OBJECTS OF THE ISSUE The Present issue of Debenture is being made to meet the normal capital expenditure, general corporate purposes and long term funds requirement. The Main Object Clause of the Memorandum of association of the Company enables it to undertake the activities for which the funds are being raised through the present issue and also the activities which the Company has been carrying on till date. The proceeds of this Issue after meeting all expenses of the Issue will be used by the Company for meeting issue objects.

IX. MATERIAL CONTRACTS INVOLVING FINANCIAL OBLIGATION

The following contracts (not being contracts entered into in the ordinary course of business carried on by the Company or entered into more than two years before the date of this document which are or may be deemed material have been entered or to be entered into by the Company. These material contracts and material documents referred to hereunder, may be inspected at the Registered Office of our Company between 10.00 am to 4.00 pm on working days. Material Contracts Copy of letter from the Company appointing Bank of Maharashtra as Trustee to the Issue.


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Material Documents 1) Certified true copies of the Memorandum and Articles of Association of the Company, as

amended from time to time. 2) Copy of the Certificate of Incorporation of the Company dated 19th June 1961. 3) Copy of Certificate of Commencement of Business. 4) Certified true copy of the Resolution(s) of the Company passed at the General Meeting held on

24th July 2009 for increase in borrowing limits. 5) Certified true copy of the Resolution of the Board of Directors dated 20th May 2009 for

issuance of debentures and empowering for other related matters. 6) Copies of Annual Reports of our Company for the last five financial years. 7) Certified true copy of the Resolution of the Members of the Company passed at the 48th

Annual General Meeting held on 24th July 2009 appointing M/s. Dalal & Shah, Chartered Accountants, as statutory auditors of the Company.

X. DETAILS OF PAST BORROWINGS

The table below sets forth outstanding borrowing of the Company as on 31st March 2009: (Amount in Crores)

Name of the Bank Nature of Facility

Sanctioned Limit Outstanding Amount

Secured Loans Bank of Baroda London Long Term Loan Rs.76.08 (USD 1.5) Rs. 25.36 (USD 0.50) Bank of India, London Long Term Loan Rs.76.08 (USD 1.5) Rs.50.72 (USD 1.00) Standard Chartered Bank, Mauritius

Long Term Loan Rs.101.44 (USD 2.00) Rs.81.15 (USD 1.60)

Consortium Banks Working Capital Loan

Rs.825.00 Rs.209.83

Calyon, Singapore Long Term Loan Rs.253.60 (USD 5.00) Rs.253.60 (USD 5.00)

Private placement of NCD

Non Convertible Debentures

Rs.250.00 Rs.250.00

Sub Total (a) Rs.870.66 (USD 8.10)

Unsecured Loans

0.5 % FCCB Tranche 1 FCCB Rs.304.32 (USD 6.00) Rs.220.63 (USD 4.35)

0.5 % FCCB Tranche 2 FCCB Rs.304.32 (USD 6.00) Rs.304.32 (USD 6.00)

0 % FCCB Tranche A FCCB Rs.202.88 (USD 4.00) Rs.202.88 (USD 4)

0 % FCCB Tranche B FCCB Rs.202.37 (USD 3.99) Rs.202.37 (USD 3.99)

Sales Tax Deferral Loan

Deferral Loan Rs.6.94

Others Rs.0.06

Sub Total (b) Rs.937.20

Total ( a) + (b) Rs.1,807.87 The Company had issued Foreign Currency Convertible Bonds (FCCB) in four Tranches aggregating USD 19.99 crore, detailed in the table below. The said bonds are optionally convertible into GDR/


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Equity Shares to be exercised at any time during the exercise period at a pre determined initial price subject to adjustments upon occurrence of certain event. However, the Company has option to redeem the balance of the above Bonds if such balance is less than 10% in aggregate of principal amount of such tranche of bonds originally issued in respect of each Tranche, during the redemption exercise period in the manner specified in the offering circular at a premium so as to provide a predetermined yield to the Bondholders The Company also has the option to call the Bondholders of Tranche A & Tranche B to mandatorily convert the Bonds into Equity Shares if the Market price on the specified date provided the holder a gain of at least a 30% over the Early Redemption amount. The following table sets out the parameters associated with each Tranche of Bonds issued as discussed above:

Tranche

Amt. USD Crore

Face Value USD

Coupon Int Rate % p.a.

Holders option to convert Company’s option for Early Redemption Maturity

Exercise period

Exercise period

Date

Price % of Face Value

From To

Initial Price per Share Rs. From To

Gross Yield to Bond holders

1 6.00 1,000 0.50% 30-May-05 10-

Apr-10

336.105 19-Apr-07

13-Apr-10

5.25% 20-Apr-10

126.778%

2 6.00 1,000 0.50% 30-May-05 10-

Apr-10

384.12 19-Apr-08

13-Apr-10

5.75% 20-Apr-10

129.939%

A 4.00 100,000 - 08-Jun-06 18-

Apr-12

604.03 28-Apr-09

18-Apr-12

6.00% 28-Apr-12

142.576%

B 3.99 100,000 - 08-Jun-06 18-

Apr-13

690.32 28-Apr-09

18-Apr-13

6.50% 28-Apr-13

156.481%

Due to variables currently indeterminate, the premium on actual redemption is not computable and hence will be recognised if and as and when the redemption option is exercised, as a charge to the securities premium account in terms of Section 78(2)(d) of the Companies Act,1956.


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Details of Security for Secured Indebtness- NCD/Term Loan (Rupee/FCL)

Facility Sanctioned Limit

Outstanding Amount

Properties Security Charge

Term Loan from Bank of India , London

USD 1.5 Crore

USD 1.00 Crore

Fixed Assets of the Co

First Fixed legal Pari Passu charge on all present and future fixed assets of the Co & Pari Passu Hypothecation with existing lenders of P&M and all other Fixed Assets of the Co.

Term Loan from Bank Of Baroda, London

USD 1.5 Crore

USD 0.50 Crore


First Fixed legal Pari Passu charge on all present and future fixed assets of the Co & Pari Passu Hypothecation with existing lenders of P&M and all other Fixed Assets of the Co

Term Loan from Calyon, Singapore

USD 5.00 Crore

USD 5.00 Crore


First Pari Passu charge over present and future movable fixed assets of the Co.

Term Loan – Standard Chartered Bank for Aircraft

USD 2.0 Crore

USD 1.60 Crore

Aircraft Exclusive First Charge over Aircraft by way of Specific Hypothecation

Non Convertible Debentures to LIC

Rs.250 Crore

Rs.250 Crore

Fixed Assets Of the Co

First Pari Passu mortgage on immovable properties at Mundhwa, Satara, Jalgaon, and Chakan and hypothecation of all present and future movable properties of the Co.

Fund Based consortium Working Capital

Rs.825 Crores

Rs.209.83 Crore

Inventory and Book Debts

XI. Material Development

There are no material event/development or change at the time of issuance of this document which may affect the issue or the investor’s decision to invest/ continue to invest in the debt securities.

XII. Debt Securities Issued for Consideration Other Than Cash, At Premium Or At Discount, In Pursuance Of An Option.

The Issuer Company has not issued any debt securities for consideration other than cash, at premium, or at discount. The details of the FCCBs issued are provided in the section IV titled Brief History of Issuer Company since incorporation and changes in Capital Structure.


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XIII. Details of Highest Ten Holders of Each Kind of Securities List of Top 10 Shareholders of Equity Shares and No. of Equity Shares held by them (as on 30th June 2009):

Sr.No

Name Address Total Shares % To Equity

1 KSL Holdings Pvt Ltd C/o Kalyani Steels Ltd, Mundhwa,Pune Cantonment, Pune – 411 036

2,31,42,870 10.39

2 Life Insurance Corporation Of India

Investment Department, 6th Floor, West Wing,Central Office, Yogakshema, Jeevan Bima Marg, Mumbai – 400 021

2,24,43,729 10.08

3 Sundaram Trading & Investment Pvt Ltd

Industry House, S.No 49, Opp Kalyani Carpenter Special Steels Ltd, Mundhwa, Pune Cantonment, Pune – 411 036

2,08,16,932 9.35

4 Gladiola Investments Ltd

C/o Kalyani Steels Ltd, Mundhwa,Pune Cantonment, Pune – 411 036

1,13,96,420 5.12

5 Surajmukhi Investment and Finance Limited


1,07,49,265 4.83

6 Ajinkya Investment and Trading Co Pvt. Ltd.

Industry House, S. No 49, Opp. Kalyani Carpenter Special Steels Ltd., Mundhwa, Pune Cantonment, Pune – 411 036

98,18,925

4.41

7 Chakrapani Investment and Finance Limited


95,10,410 4.27

8 Kritadnya Management & Trading Services Pvt Ltd

C/o Bharat Forge Ltd, Mundhwa, Pune Cantonment, Pune – 411 036

84,31,225 3.79

9 Janus Contrarian Fund

Deutsche Bank, A.G , DB House, Hazarimal Somani Marg, Next to Sterling Centre, P.O Box No 1142, Fort Mumbai , Mumbai, 400 001

67,11,673 3.01

10 The New India Assurance Company Limited

The New India Assurance Building , 87 M.G.Road , Fort, Mumbai – 400 001

60,36,470 2.71

Total 12,90,57,919 57.96

As on 31st March 2009: 0.5% Tranche 1 FCCB USD 6.00 crore (O/s USD 4.35 crore) due April 2010 Sr.No Name Address Total

Shares % To Equity

1 * Refer Note below 0.5% Tranche 2 FCCB USD 6.00 crore (O/s USD 6.00 crore) due April 2010 Sr.No Name Address Total

Shares % To Equity

1 * Refer Note below


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0% Tranche A FCCB USD 4.00 crore (O/s USD 4.00 crore) due April 2012 Sr.No Name Address Total

Shares % To Equity

1 * Refer Note below 0% Tranche B FCCB USD 3.99 crore (O/s USD 3.99 crore) due April 2013 Sr.No Name Address Total Shares % To

Equity

1 * Refer Note below *Note: The holders of each of the series of FCCBs are represented by Depository viz. Citibank N.A 388, Greenwich Street, New York, New York 10013, USA. The payment due towards interest where applicable is made to the Paying Agent Citibank NA, 5, Carmaelite Street, London EC4Y0PA, United Kingdom Global Depository Recepits (GDR) USD 10.00 crore (O/s USD 0.25 crore) Sr.No Name Address Total Shares % To

Equity

1 ** Refer Note below **Note: The holders of each of the GDRs are represented by Depository viz. Citibank N.A 388, Greenwich Street, New York, New York 10013, USA. 11.95% p.a. Non Convertible Debentures of Rs.250 Crore Sr.No Name Address Total Shares % To

Equity

1 Life Insurance Corporation of India

Yogakshema, Jeevan Beema Marg, Mumbai : 400 021 - -

XIV. Undertaking To Use A Common Form Of Transfer

The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these debentures held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant. The Issuer undertakes that there will be a common transfer form / procedure for transfer of debentures

XV. Redemption Amount, Period Of Maturity, Yield On Redemption Issuer Bharat Forge Ltd. Instrument Secured Redeemable Non Convertible Debentures Issue Size Rs.350 Crores (Rupees Three Hundred Fifty Crores only) No. of Debentures 3500 Face Value Rs.10,00,000 each Tenor The above NCDs will be redeemed at par as under:

At the end of 54th month – 25% At the end of 60th month – 50% At the end of 66th month – 25%

Coupon Rate 10.75% p.a. payable semi-annually Listing The debentures are proposed to be listed on the WDM segment

of the National Stock Exchange of India Limited (NSE) Issuance The Debentures are proposed to be issued in Dematerialised

form



34


Security First charge on the fixed assets with minimum asset cover of 1.25 times.

Security Creation Within a period of 120 days from the date of disbursement, failing which an additional interest @ 2% p.a. on the outstanding amount of debentures shall be payable from the date of disbursement till such creation of security to the satisfaction of the Corporation. In case security is not created even after a period of further 90 days over and above the stipulated period of 120 days the investors shall have the right to recall the outstanding principle amount along with other monies/ accrued interest thereon.

Default Interest In case of default in payment of interest and/or principal redemption on the due dates, additional interest @ 2% over the documented rate will be payable by the company.


The Company reserves the right to change the issue programme and also accept or reject any application in part or in full without assigning any reason.

XVI. Information Relating To The Terms of Offer or Purchase Market Lot The market lot will be one Debenture (“Market Lot”). Since the debentures are being issued only in dematerialised form, the odd lots will not arise either at the time of issuance or at the time of transfer of debentures. Letter(s) of Allotment/ Debenture Certificate(s)/ Refund Order(s) Issue of Letter(s) of Allotment The beneficiary account of the investor(s) with National Securities Depository Limited (NSDL)/ Central Depository Services (India) Limited (CDSL)/ Depository Participant will be given initial credit within 4 days from the Deemed Date of Allotment. The initial credit in the account will be akin to the Letter of Allotment. On completion of the all statutory formalities, such credit in the account will be akin to a Debenture Certificate. Issue of Debenture Certificate(s) Subject to the completion of all legal formalities within 4 days from the Deemed Date of Allotment, or such extended period as may be approved by the Appropriate Authorities, the initial credit akin to a Letter of Allotment in the Beneficiary Account of the investor would be replaced with the number of Debentures allotted. The Debentures since issued in electronic (dematerialized) form, will be governed as per the provisions of The Depository Act, 1996, Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, rules notified by NSDL/ CDSL/ Depository Participant from time to time and other applicable laws and rules notified in respect thereof. Dispatch of Refund Orders The Company shall ensure dispatch of Refund Order(s) by Registered Post only. Terms of Payment The full face value of the Debentures applied for is to be paid along with the Application Form. Investor(s) need to send in the Application Form and the cheque(s)/ demand draft(s) for the full face value of the Debentures applied for.

Face Value Per Debenture

Minimum Application for Amount Payable on Application per Debenture

Rs. 10,00,000/- 1 Debenture & in multiples of 1 Debenture thereafter

Rs. 10,00,000/-


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Payment of Interest The interest will be payable to the Debenture holder(s) whose names appear in the List of Beneficial Owners given by the Depository to the Company on the Record Date/ Book Closure Date. Payment of interest will be made by way of cheque(s)/ interest warrant(s)/ demand draft(s)/credit through RTGS system. In case of cheque/demand draft the same will be dispatched to the sole/ first applicant, 7 days before the due date(s) by registered post at the sole risk of the applicant. Tax Deduction at Source (TDS) Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof will be deducted at source. For seeking TDS exemption/ lower rate of TDS, relevant certificate(s)/ document(s) must be lodged at least 15 days before the payment of interest becoming due with the Company at its Registered Office at “Bharat Forge Limited, Mundhwa, Pune Cantonment, Pune 411036 or to such other person(s) at such other address(es) as the Company may specify from time to time through suitable communication. Tax exemption certificate/ declaration of non-deduction of tax at source on interest on application money, should be submitted along with the Application Form. Where any deduction of Income Tax is made at source, the Company shall send to the Debenture holder(s) a Certificate of Tax Deduction at Source. Tax Benefits Under the existing provisions of the Income Tax Act, 1961 for the time being in force, the following tax benefits and deductions will be available to the Debenture holder(s) of the Company subject to the fulfillment of the requirements of the relevant provisions. The tax benefits are given as per the prevailing tax laws and may vary from time to time in accordance with the amendments or enactment thereto. As alternate views are also possible, the Debenture holder(s) are advised to consult their own tax advisers on the tax implications of the acquisition, ownership and sale of Debentures, and income arising thereon I. To Resident Debenture holders No Income Tax will be deducted at source from interest payable on Debentures in the following cases: In case of payment of interest to a Debenture holder, who is an individual and resident in India, where the interest payment in the aggregate during the financial year does not exceeds Rs. 5,000/-; Tax will be deducted at a lower rate where the Assessing Officer, on an application of any Debenture holder, issues a certificate for deduction of tax at such lower rate as per provisions of the Section 197(1) of the Income Tax Act. In all other situations, tax would be deducted at source on each payment as per prevailing provisions of the Income Tax Act. Details on deduction of tax at source are given under para ‘Tax Deduction at Source (TDS)’ mentioned elsewhere in this Information Memorandum. No Wealth Tax is payable in respect of investments in Debentures of the Company. II. To other Eligible Institutions Mutual Funds registered under the SEBI Act or regulations made there under or such other mutual fund sets up by public sector bank or public financial institution or authorized by Reserve Bank of India and notified by the Central Government will, subject to the provisions of Chapter XII-E, be exempted from income tax on all their income, including from investment in Bonds/ Debentures under the provisions of Section 10(23D) of Income Tax Act. No Wealth Tax is payable in respect of investments in Debentures of the Company. Notes: 1. All the above benefits are as per the current tax law as amended by the Finance Act, 2008 2. The stated benefits will be available only to the sole/ first named holder in case the Debentures are held by joint holders.


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Redemption The face value of the Debentures will be redeemed at par. In case if the principal redemption date falls on a day which is not a Business Day (‘Business Day’ being a day on which Commercial Banks are open for Business in the city of Mumbai), then the payment due shall be made on the next Business Day. Payment on Redemption Payment on redemption will be made by cheque(s)/ warrants(s) in the name of the Debenture holder whose name appears on the List of Beneficial owners given by Depository to the Company as on the Record Date. On the Company dispatching the redemption warrants to such Beneficiary (ies) by registered post/ courier, the liability of the Company shall stand extinguished. The Debentures shall be taken as discharged on payment of the redemption amount by the Company on maturity to the list of Beneficial Owners as provided by NSDL/ CDSL/ Depository Participant. Such payment will be a legal discharge of the liability of the Company towards the Debenture holders. On such payment being made, the Company will inform NSDL/ CDSL/ Depository Participant and accordingly the account of the Debenture holders with NSDL/ CDSL/ Depository Participant will be adjusted. The Company’s liability to the Debenture holders towards all their rights including for payment or otherwise shall cease and stand extinguished from the due date of redemption in all events. Further the Company will not be liable to pay any interest or compensation from the date of redemption. On the Company dispatching the amount as specified above in respect of the Debentures, the liability of the Company shall stand extinguished. Effect of Holidays Should any of dates defined above or elsewhere in the Information Memorandum, excepting the Deemed Date of Allotment, fall on a Saturday, Sunday or a Public Holiday, the next working day shall be considered as the effective date(s). List of Beneficial Owners The Company shall request the Depository to provide a list of Beneficial Owners as at the end of the Record Date. This shall be the list, which shall be considered for payment of interest or repayment of principal amount, as the case may be. Debenture Redemption Reserve (DRR) As per extant circular no. 6/3/2001-CL.V dated 18.04.2002 issued by the Government of India with respect to creation of Debenture Redemption Reserve, for manufacturing and infrastructure companies, the adequacy of DRR is defined at 25% of the value of debentures issued through private placement route. In terms of extant provisions of Companies Act, 1956, the Company is required to create Debenture Redemption Reserve out of profits, if any, earned by the Company. The Company shall create a Debenture Redemption Reserve (‘DRR’) and credit to the DRR such amounts as applicable under provisions of Section 117C of the Companies Act 1956 (as amended from time to time) or any other relevant statute(s), as applicable. Notices All notices to the Debenture holder(s) required to be given by the Company or the Trustees shall be published in one English and one regional language daily newspaper in Mumbai, New Delhi, Kolkata and Chennai and/ or, will be sent by post/ courier to the sole/ first allottee or sole/ first Beneficial Owner of the Debentures, as the case may be from time to time. All notice(s) to be given by the Debenture holder(s) shall be sent by registered post or by hand delivery to the Company or to such persons at such address as may be notified by the Company from time to time through suitable communication. Joint-Holders Where two or more persons are holders of any Debenture(s), they shall be deemed to hold the same as joint tenants with benefits of survivorship subject to other provisions contained in the Articles.


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Sharing of Information The Company may, at its option, use on its own, as well as exchange, share or part with any financial or other information about the Debenture holders available with the Company, with its subsidiaries and affiliates and other banks, financial institutions, credit bureaus, agencies, statutory bodies, as may be required and neither the Company or its subsidiaries and affiliates nor their agents shall be liable for use of the aforesaid information. Undertaking by the Issuer The Issuer Company undertakes that: 1. the complaints received in respect of the Issue shall be attended to by the issuer company

expeditiously and satisfactorily; 2. it shall take all steps for completion of formalities for listing and commencement of trading at

all the concerned stock exchange(s) where securities are to be listed and taken within 120 working days from the date of closure of issue.

3. the funds required for dispatch of refund orders by registered post shall be made available to the Registrar to the Issue by the Issuer Company;

4. no further issue of securities shall be made till the securities offered through this Information Memorandum are listed or till the application moneys are refunded on account of non-listing, under-subscription, etc;

5. necessary co-operation to the credit rating agency shall be extended in providing true and adequate information till the debt obligations in respect of the instrument are outstanding.

Depository Arrangements Company has In-house arrangements for the present Debenture issue. The Company has made necessary depository arrangements with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for issue and holding of Debentures in dematerialized form. In this context the Company has signed two agreements as under: Agreement dated 5th May, 2004 between Bharat Forge Ltd., and National Securities Depository Limited (NSDL) for offering depository option to the investor. Agreement dated 1st January, 2004 between Bharat Forge Ltd., and Central Depository Services (India) Limited (CDSL) for offering depository option to the investor. Investor can hold the debentures only in dematerialized form and deal with the same as per the provisions of Depositories Act, 1996 as amended from time to time. Procedure for applying for Demat Facility

• The applicant must have at least one beneficiary account with any of the Depository Participants (DPs) of NSDL or CDSL prior to making the application.

• The applicant must necessarily fill in the details (including the beneficiary account number and Depository Participant’s ID) appearing in the Application Form under the heading ‘Details for Issue of Debentures in Electronic/ Dematerialised Form’.

• Debentures allotted to an applicant will be credited directly to the applicant’s respective Beneficiary Account(s) with the DP.

• For subscribing the debentures, names in the application form should be identical to those appearing in the account details in the depository. In case of joint holders, the names should necessarily be in the same sequence as they appear in the account details in the depository.

• Non-transferable allotment advice/refund orders will be directly sent to the applicant by the Registrars to the Issue.

• If incomplete/incorrect details are given under the heading ‘Details for Issue of Debentures in Electronic/ Dematerialised Form’ in the application form, it will be deemed to be an incomplete application and the same may be held liable for rejection at the sole discretion of the Company.

• For allotment of Debentures, the address, nomination details and other details of the applicant as registered with his/her DP shall be used for all correspondence with the applicant. The Applicant is therefore responsible for the correctness of his/her demographic details given in the application form vis-à-vis those with his/her DP. In case the information is incorrect or insufficient, the Issuer would not be liable for losses, if any.


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• It may be noted that Debentures being issued in electronic form, the same can be traded only on the Stock Exchanges having electronic connectivity with NSDL or CDSL. The National Stock Exchange of India Limited, where the Debentures of the Company are proposed to be listed has connectivity with NSDL and CDSL.

• Interest or other benefits would be paid to those Debenture holders whose names appear on the list of beneficial owners given by the Depositories to the Company as on Record Date/ Book Closure Date. In case of those Debentures for which the beneficial owner is not identified by the Depository as on the Record Date/ Book Closure Date, the Company would keep in abeyance the payment of interest or other benefits, till such time that the beneficial owner is identified by the Depository and conveyed to the Company, whereupon the interest or benefits will be paid to the beneficiaries, as identified, within a period of 30 days.

Trustees for the Debenture holders The Company has appointed Bank of Maharashtra to act as Trustees for the Debenture holders (hereinafter referred to as “Trustees”). A copy of letter from Bank of Maharashtra conveying their consent to act as Trustees for the Debenture holders is enclosed elsewhere in this Information Memorandum. The Company and the Trustees will enter into a Trustee Agreement, inter alia, specifying the powers, authorities and obligations of the Company and the Trustees in respect of the Debentures. The Debenture holder(s) shall, by signing the Application Form and without any further act or deed, be deemed to have irrevocably given their consent to the Trustees or any of their agents or authorized officials to do inter-alia all acts, deeds and things necessary in respect of or relating to the security to be created for securing the Debentures being offered in terms of this Information Memorandum. All the rights and remedies of the Debenture holder(s) shall vest in and shall be exercised by the said Trustees without having it referred to the Debenture holder(s). No Debenture holder shall be entitled to proceed directly against the Company unless the Trustees, having become so bound to proceed, fail to do so. Any payment made by the Company to the Trustees on behalf of the Debenture holders shall discharge the Company pro tanto to the Debenture holder(s). The Trustees will protect the interest of the Debenture holder(s) in the event of ‘Default’ by the Company in regard to timely payment of interest and repayment of principal and they will take necessary action at the cost of the Company. Right to Accept or Reject Applications The Board of Directors/ Committee of Directors reserves its full, unqualified and absolute right to accept or reject any application, in part or in full, without assigning any reason thereof. The rejected applicants will be intimated along with the refund order, if applicable, to be sent. Interest on application money will be paid from the date of realisation of the cheque(s)/ demand drafts(s) till one day prior to the date of refund. The Application Forms that are not complete in all respects are liable to be rejected and would not be paid any interest on the application money. Application would be liable to be rejected on one or more technical grounds, including but not restricted to: • Number of debentures applied for is less than the minimum application size; • Applications exceeding the issue size; • Bank account details not given; • Details for issue of debentures in electronic/ dematerialized form not given; • PAN/GIR and IT Circle/Ward/District not given; • In case of applications under Power of Attorney by limited companies, corporate bodies, trusts,

etc. relevant documents not submitted; • In the event, if any Debenture(s) applied for is/ are not allotted in full, the excess application

monies of such Debentures will be refunded, as may be permitted. How to Apply This Information Memorandum is neither a prospectus nor a statement in lieu of prospectus and does not constitute an offer to the public generally to subscribe for or otherwise acquire the Debentures issued by the Company. The document is for the exclusive use of the Institution(s) to whom it is delivered and it should not be circulated or distributed to third parties. The document would be sent specifically addressed to the institution(s) by the Issuer Company.


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Only eligible investors as given hereunder may apply for debentures by completing the Application Form in the prescribed format in BLOCK LETTERS in English as per the instructions contained therein. Applications should be for a minimum of 1 Debentures and in multiples of 1 Debenture thereafter. Applications not completed in the said manner are liable to be rejected. Application Form duly completed in all respects must be submitted with any of the designated branches of the Bankers to the Issue. The name of the applicant’s bank, type of account and account number must be filled in the Application Form. This is required for the applicant’s own safety and these details will be printed on the refund orders and interest/ redemption warrants. The applicant or in the case of an application in joint names, each of the applicant, should mention his/her Permanent Account Number (PAN) allotted under the Income-tax Act, 1961 or where the same has not been allotted, the GIR No. and the Income tax Circle/Ward/District. As per the provision of Section 139A(5A) of the Income Tax Act, PAN/GIR No. needs to be mentioned on the TDS certificates. Hence, the investor should mention his PAN/GIR No. if the investor does not submit Form 15G/15AA/other evidence, as the case may be for non-deduction of tax at source. In case neither the PAN nor the GIR Number has been allotted, the applicant shall mention “Applied for” and in case the applicant is not assessed to income tax, the applicant shall mention ‘Not Applicable’ (stating reasons for non applicability) in the appropriate box provided for the purpose. Application Forms without this information will be considered incomplete and are liable to be rejected. Applications may be made in single or joint names (not exceeding three). In the case of joint applications, all payments will be made out in favour of the first applicant. All communications will be addressed to the first named applicant whose name appears in the Application Form at the address mentioned therein. Unless the Issuer Company specifically agrees in writing with or without such terms or conditions it deems fit, a separate single cheque/ demand draft must accompany each Application Form. Applicants are requested to write their names and application serial number on the reverse of the instruments by which the payments are made. All applicants are requested to tick the relevant column “Category of Investor” in the Application Form. Application Form must be accompanied by either demand draft(s) or cheque(s) drawn or made payable in favour of ‘Bharat Forge Ltd.’ and crossed ‘Account Payee Only’. Cash, outstation cheques, money orders, postal orders and stock invest shall not be accepted. The Company assumes no responsibility for any applications/ cheques/ demand drafts lost in mail. Detailed instructions for` filling up the application form and list of collection centers are provided elsewhere in this Information Memorandum. No separate receipts shall be issued for the application money. However, Bankers to the Issue at their Designated Branch (es) receiving the duly completed Application Forms will acknowledge the receipt of the applications by stamping and returning the acknowledgment slip to the applicant. Applications shall be deemed to have been received by the Issuer Company only when submitted to Bankers to the Issue at their designated branches or on receipt by the Registrar as detailed above and not otherwise. For further instructions, please read Application Form carefully. Who Can Apply The following categories of investors may apply for the debentures, subject to fulfilling their respective investment norms/ rules by submitting all the relevant documents along with the application form. • Scheduled Commercial Banks; • Regional Rural Banks; • Financial Institutions; • Insurance Companies; • Mutual Funds; • Companies, Bodies Corporate authorised to invest in debentures. • Provident, Pension, Superannuation and Gratuity Fund. • Other eligible investors.


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Applications under Power of Attorney A certified true copy of the power of attorney or the relevant authority as the case may be along with the names and specimen signature(s) of all the authorized signatories and the tax exemption certificate/ document, if any, must be lodged along with the submission of the completed Application Form. Further modifications/ additions in the power of attorney or authority should be notified to the Company or to its Registrars or to such other person(s) at such other address(es) as may be specified by the Company from time to time through a suitable communication. Application by Mutual Funds In case of applications by Mutual Funds, a separate application must be made in respect of each scheme of an Indian Mutual Fund registered with SEBI and such applications will not be treated as multiple applications, provided that the application made by the Asset Management Company/ Trustees/ Custodian clearly indicate their intention as to the scheme for which the application has been made. Future Borrowings The Company shall be entitled to borrow/ raise loans or avail of financial assistance in whatever form as also issue Debentures/ Notes/ other securities in any manner with ranking as pari-passu basis or otherwise and to change its capital structure, including issue of shares of any class or redemption or reduction of any class of paid up capital, on such terms and conditions as the Company may think appropriate, without the consent of, or intimation to, the Debenture holder(s) in this connection. Purchase/ Sale of Debentures The Company will have the power exercisable at its absolute discretion from time to time to purchase some or all the Debentures at any time prior to the specified date(s) of redemption, at discount, at par or at premium from the open market in accordance with the applicable laws. Such Debentures, at the option of the Company, may be cancelled, held or resold at such price and on such terms and conditions as the Company may deem fit and as permitted by law. Right to Re-Issue In the event of the Debentures being so purchased and/ or redeemed before maturity in any circumstances whatsoever, the Company shall have the right to re-issue the Debentures under section 121 of the Companies Act, 1956 or any other relevant statute(s), as applicable. Debenture holder not a Shareholder The Debenture holders will not be entitled to any of the rights and privileges available to the Shareholders. Rights of Debenture holders The Debentures shall not, except as provided in the Companies Act, 1956 confer upon the holders thereof any rights or privileges available to the members of the Company including the right to receive Notices or Annual Reports of, or to attend and/or vote, at the General Meeting of the Company. However, if any resolution affecting the rights attached to the Debentures is to be placed before the shareholders, the said resolution will first be placed before the concerned registered Debenture holders for their consideration. In terms of Section 219(2) of the Act, holders of Debentures shall be entitled to a copy of the Balance Sheet on a specific request made to the Company. The rights, privileges and conditions attached to the Debentures may be varied, modified and/or abrogated with the consent in writing of the holders of at least three-fourths of the outstanding amount of the Debentures or with the sanction of Special Resolution passed at a meeting of the concerned Debenture holders, provided that nothing in such consent or resolution shall be operative against the Company, where such consent or resolution modifies or varies the terms and conditions governing the Debentures, if the same are not acceptable to the Company. The registered Debenture holder or in case of joint-holders, the one whose name stands first in the Register of Debenture holders shall be entitled to vote in respect of such Debentures, either in person or by proxy, at any meeting of the concerned Debenture holders and every such holder shall be entitled to one vote on a show of hands and on a poll, his/her voting rights shall be in proportion to the outstanding nominal value of Debentures held by him/her on every resolution placed before such meeting of the Debenture holders.


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The Debentures are subject to the provisions of the Companies Act, 1956, the Memorandum and Articles of Association, the terms of this prospectus and Application Form. Over and above such terms and conditions, the Debentures shall also be subject to other terms and conditions as may be incorporated in the Trustee Agreement/ Letters of Allotment/ Debenture Certificates, guidelines, notifications and regulations relating to the issue of capital and listing of securities issued from time to time by the Government of India and/or other authorities and other documents that may be executed in respect of the Debentures. Save as otherwise provided in this Information Memorandum, the provisions contained in Annexure C and/ or Annexure D to the Companies (Central Government’s) General Rules and Forms, 1956 as prevailing and to the extent applicable, will apply to any meeting of the Debenture holders, in relation to matters not otherwise provided for in terms of the Issue of the Debentures. A register of Debenture holders will be maintained in accordance with Section 152 of the Act and all interest and principal sums becoming due and payable in respect of the Debentures will be paid to the registered holder thereof for the time being or in the case of joint-holders, to the person whose name stands first in the Register of Debenture holders. The Debenture holders will be entitled to their Debentures free from equities and/or cross claims by the Company against the original or any intermediate holders thereof. Statutory Auditors Dalal & Shah Chartered Accountants 252, Veer Savarkar Marg, Shivaji Park, Dadar, Mumbai- 400 028 Registrar to the Issue In House Registrar & Transfer Agent Bharat Forge Limited Beejal Desai – Sr. Vice President (Legal) & Company Secretary Tel: +91 20 2670 2777 [email protected] www.bharatforge.com Trustee for the Issue Bank of Maharashtra Recovery and Legal Services Department, Central Office, Lokmangal, 1501, Shivaji Nagar, Pune 411005

XVII. The discount at which such offer is made and the effective price for the investor as a result of such discount.

The debentures are being issued at the face value and not at discount to offer price.

XVIII. The Debt Equity Ratio prior to and after issue of the debt security

The debt equity ratio of the Company as on 31st March 2009 is 1.22 times and subsequent to the issue to these debentures will be approximately 1.45 times.


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XIX. Servicing behavior on existing debt securities, payment of due interest on due dates on term loans and debt securities.

The company is discharging all its liabilities in time and would continue doing so in future as well. The company has been paying regular interest and repaying the bank.

XX. The permission / consent from the prior creditors for a second or pari passu

charge.

The Company shall procure consent from the existing charge holders for creation of security for the Proposed Debentures on pari passu basis. The trustee shall in future provide consent to create pari-passu charge subject to the Issuer Company complying with the requisite terms of the debentures issued.

XXI. Name Of Debenture Trustee

The Company has appointed Bank of Maharashtra to act as Trustees for the Debenture holders. A copy of letter from Bank of Maharashtra conveying their consent to act as Trustees for the Debenture holders is enclosed.

XXII. Rating rationale adopted by rating agencies.

““LA+ With Stable Outlook” (pronounced L A Plus) by ICRA Limited for Rs. 350 Crores long term NCDs. Instruments with this rating are judged to offer a adequate credit quality rating and carries low credit risk. The rating is not a recommendation to buy, sell or hold securities and investors should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating should be evaluated independently of any other rating. The rating obtained is subject to revision at any point of time in the future. The rating agencies have a right to suspend, withdraw the rating at any time on the basis of new information etc.

XXIII. Names of all recognized stock exchange where securities are proposed to be listed clearly indicating the designated stock exchange and also whether in-principal approval from the recognized stock exchange has been obtained.

The Company shall get the debentures listed on the WDM segment of the National Stock Exchange Limited.

XXIV. TERM SHEET

Issuer Bharat Forge Ltd.

Instrument Secured Redeemable Non Convertible Debentures

Object of the Issue Normal Capital Expenditure, General Corporate Purposes and Long Term Funds requirement

Issue Size Rs.350 Crores (Rupees Three Hundred Fifty Crores only)

No. of Debentures 3500

Face Value Rs.10,00,000/- each (Rupees Ten Lakhs each)

Minimum Subscription 1 debentures of Rs.10,00,000/- each and in multiple of 1 thereafter

Tenor 5 years 6 months from the date of allotment


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Redemption The NCDs will be redeemed at par in three installments form the date of allotment as under: At the end of 54th month – 25% At the end of 60th month – 50% At the end of 66th month – 25%

Rating LA+ by ICRA

Coupon Rate 10.75% p.a.

*Interest Payment Semi Annually

Security First charge on fixed assets of the Company to the extent that a Fixed Asset Cover of 1.25 times is maintained till date of maturity.

Security Creation

Security will be created within 120 days from the date of allotment. A penal interest of 2% will be charged from date of allotment till the date of security creation, if the Company fails to create the security within the stipulated time. Further if the company fails to create the security after the extended time of 90 days, the investors reserves the right to re-call the investment along with all outstanding.

Default Interest In case of default in payment of interest and/or principal redemption on the due dates, additional interest @ 2% over the documented rate will be payable by the company.


Interest on Application Money

Interest at the coupon rate (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) will be paid to all the applicants on the application money for the Debentures. Such interest shall be paid from the date of realisation of cheque(s)/ demand draft(s) upto one day prior to the Deemed Date of Allotment. The interest on application money will be computed on an Actual/ 365 day basis. Such interest would be paid on all the valid applications, including the refunds. Where the entire subscription amount has been refunded, the interest on application money will be paid along with the Refund Orders. Where an applicant is allotted lesser number of Debentures than applied for, the excess amount paid on application will be refunded to the applicant along with the interest on application money.

Listing Proposed to be listed on the WDM segment of the National Stock Exchange of India Limited (NSE)

Issuance The Debentures are proposed to be issued in Dematerialised form



Interest Calculation

Interest for each of the interest periods shall be calculated, on 'actual/ 365 (366 in case of a leap year) days' basis, on the face value of principal outstanding on the Debentures at the coupon rate rounded off to the nearest Rupee.

Record Date The Record date for the debentures shall be 15 days prior to each interest payment and/or principal repayment date.

Trustee Bank of Maharashtra


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* Subject to TDS at applicable rate. Issue Programme Issue Open Date September 10, 2009

Earliest Closing Date September 18, 2009

Deemed Date of Allotment Within 4 days from the issue closure date # The issuer reserves the right to change the issue closing date and in such an event, the Date of Allotment for the Debentures may also be revised by the issuer at its sole and absolute discretion. In the event of any change in the above issue programme, the issuer will intimate the investors about the revised issue programme. DISCLAIMER CLAUSE This Disclosure Document is neither a prospectus nor a statement lieu of prospectus and does not constitute an offer to the public to subscribe for or otherwise acquire the Debenture issued by the Issuer. Apart from this Disclosure Document, no offer document or prospectus has been prepared in connection with this Issue and no prospectus in relation to the Issuer or the Debentures relating to this Offer has been delivered for registration nor such a document is required to be registered under the applicable laws. This Disclosure Document is issued by the issuer and has been prepared by the issuer to provide general information on the company and does not purport to contain all the information a potential investor may require. This information relating to the issuer contained in the Disclosure Document is believed by the issuer to be accurate in all respects as of the date hereof. DECLARATION It is hereby declared that this Disclosure Document contains full disclosure in accordance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008. The Issuer also confirms that this Disclosure Document does not omit disclosure of any material fact, which may make the statements made therein, in the light of the circumstances under which they are made, misleading. The Disclosure Document also does not contain any false or misleading statement. The Issuer accepts no responsibility for the statements made otherwise than in this Disclosure Document or in any other material issued by or at the instance of the Issuer and that any one placing reliance on any other source of information would be doing so at his own risk. For Bharat Forge Limited Beejal Desai Sr. Vice President (Legal) & Company Secretary Date: Place: Pune

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